Exhibit 10.8

60 SPEAR STREET

SAN FRANCISCO, CALIFORNIA

 

OFFICE LEASE AGREEMENT

BETWEEN

EOP-60 SPEAR, L.L.C., a Delaware limited liability company

("LANDLORD") "

AND

INDUS INTERNATIONAL, INC., a California corporation

("TENANT")

TABLE OF CONTENTS

 

I.

Basic Lease Information

1

11.

Lease Grant

3

III.

Possession

3

IV.

Rent

3

V.

Compliance with Laws; Use

7

VI.

Secur,ity Deposit

8

VII.

Services to be Furnished by Landlord

8

VIII.

Leasehold Improvements

9

IX.

Repairs and Alterations

9

X.

Use of Electrical Services by Tenant

10

XI.

Entry by Landlord

11

XII.

Assignment and Subletting

11

XIII.

Liens

12

XIV.

Indemnity and Waiver of Claims

13

XV.

Insurance

13

XVI.

Subrogation

14

XVII.

Casualty Damage

14

XVIII.

Condemnation

15

XIX.

Events of Default

15

XX.

Remedies

16

XXI.

Limitation of Liability

17

XXII.

No Waiver

17

XXIII.

Quiet Enjoyment

17

XXIV.

Relocation

17

XXV.

Holding Over

17

XXVI.

Subordination to Mortgages; Estoppel Certificate

18

XXVII.

Attorneys' Fees

18

XXVIII.

Notice

18

XXIX.

Excepted Rights

19

XXX.

Surrender of Premises

19

XXXI.

Miscellaneous

19

XXXII.

Entire Agreement

21

OFFICE LEASE AGREEMENT

THIS OFFICE LEASE AGREEMENT (the "Lease") is made and entered into as of the 3rd
day of March 2000, by and between EOP-60 SPEAR, L.L.C., a Delaware limited
liability company ("Landlord") and INDUS INTERNATIONAL, INC., a California
corporation ("Tenant").

I. Basic Lease Information.

A. .."Building" shall mean the building located at 60 Spear Street, San
Francisco, California, commonly known as 60 Spear Street.

B. "Rentable Square Footage of the Building" is deemed to be 133,782 square
feet.

C. "Premises" shall mean the area shown on Exhibit A-1 to this Lease. The
Premises are located on the 2nd, 3rd,5th, 6th, 7th, 9th, 10th, 11th floors and
the basement level of the Building and known as suite numbers 200, 300, 500,
600, 700, 900, 1000 and 1100, respectively. The "Rentable Square Footage of the
Premises" is deemed to be 95,323 square feet consisting of approximately (i)
6,286 rentable square feet described as Suite No.200 on the 2nd floor; (ii)
12,835 rentable square feet described as Suite No.300 on the 3rd floor; (iii)
12,835 rentable square feet described as Suite No.500 on the 5th floor; (iv)
12,835 rentable square feet described as Suite No.600 on the 6th floor; (v)
12,835 rentable square feet described as Suite No.700 on the 7th floor; (vi)
12,835 rentable square feet described as Suite No.900 on the 9th floor; (vii)
12,835 rentable square feet described as Suite No.1000, Suite No.1000E and Suite
No.1050 on the 10th floor; and (viii) 12,027 rentable square feet described as
Suite No.11 00 on the 11th floor of the Building. If the Premises include one or
more floors in their entirety, all corridors and restroom facilities located on
such full fioor(s) shall be considered part of the Premises. Landlord and Tenant
stipulate and agree that the Rentable Square Footage of the Building and the
Rentable Square Footage of the Premises are correct and shall not be remeasured.

D. "Base Rent":

Base Rent for Suite NO. 300

Period

Annual Rate Per Square Foot

Annual Base Rent

Base Rent per Month/Period

4/15/2000 - 4/30/2000

$42.50

$545,487.48

$24,243.84

5/01/2000 - 3/31/2003

$42.50

$545,487.48

$45,457.29

4/01/2003 - 4/14/2003

$42.50

$545,487.48

$21,213.36

4/15/2003 - 4/30/2003

$44.50

$571,157.52

$25,384.80

5/01/2003 - 5/31/2008

$44.50

$571,157.52

$47,596.46

Base Rent for Suite NOs. 200, 500, 600, 700, 900, 1000, 1000E, 1050 and 1100

Period

Annual Base Rent

Base Rent per Month/Period

4/15/2000 - 4/30/2000

$2,285,757.48

$101,589.28

5/01/2000 - 5/31/2001

$2,285,757.48

$190,479.86

6/01/2001 - 5/31/2004

$3,711,960.00

$309,330.00

6/01/2004 - 5/31/2008

$3,819,194.40

$318,266.20

 

E. "Tenant's Pro Rata Share": 71.2525%.

F. "Base Year": For the period commencing on the Commencement Date and
continuing through the Termination Date, Base Year for Taxes and Base Year for
Expenses shall mean 2000 for Suite No.300. For the period commencing on the
Commencement Date and continuing through May 31, 2001, Base Year for Taxes and
Base Year for Expenses shall mean: (i) 1995 for Suite No.200, Suite No.700,
Suite No.900, Suite No.1000, Suite No.1050, Suite No.1000E and Suite No.1100;
(ii) 1998 for Suite No.600; and (iii) 2000 for Suite No.500. For the period
commencing on June l' 2001 and continuing through the Termination Date, Base
Year for Taxes and Base Year for Expenses shall mean 2001 for Suite No.200,
Suite No.500, Suite No.600, Suite No.700, Suite No.900, Suite No.1000, Suite
No.1050, Suite No.1000E and Suite No.1100.

G. "Term": A period of 97 months and 16 days. The Term shall commence on April
15, 2000 (the "Commencement Date") and, unless terminated early in accordance
with this Lease, end on May 31, 2008 (the "Termination Date"). However, if
Landlord fails to deliver possession of Suite No.300 to Tenant in the manner
required herein on or before February l' 2000: (1) the date set forth in the
prior sentence as the "Commencement Date" shall instead be defined as the
"Target Commencement Date"; and (2) the actual "Commencement Date" shall be the
date which is 75 days after the date Landlord delivers possession of Suite
No.300 to Tenant in the manner required herein. In such circumstances, the
Termination Date, at the option of Landlord, may be postponed by an equal number
of days. Landlord's failure to deliver possession of Suite No.300 to Tenant in
the manner required herein on or before February 1, 2000, shall not be a default
by Landlord or otherwise render Landlord liable for damages. Promptly after the
determination of the Commencement Date, Landlord and Tenant shall enter into a
commencement letter agreement in the form attached as Exhibit C.

H. Tenant allowance(s): More fully set forth in Exhibit D attached hereto.

I. "Security Deposit": $2,250,000.00 in the form of a letter of credit as more
fully described in Article VI below.

J. "Guarantor(s)": As of the date of this Lease, there are no Guarantors.

K. "Broker(s)": Cushman & Wakefield of California, Inc.

L. "Permitted Use": General office use.

M. "Notice Addresses":

Tenant:

Prior to, on and after the Commencement Date, notices shall be sent to Tenant at

the Premises to the attention of Chief Financial Officer.

Landlord: With a copy to:

EOP-60 Spear, L.L.C., a Delaware Equity Office Properties

limited liability company Two North Riverside Plaza

c/o

Equity Office Properties Suite 2200

One Market Chicago, Illinois 60606

Spear Street Tower Attention: Regional Counsel- Pacific Region

Suite 725

San Francisco, California 94105

Attention: Building Manager

Rent (defined in Section IV.A) is payable to the order of Equity Office
Properties at the following address: EOP Operating Limited Partnership, DBA 60
Spear Street, Dept. #8789, Los Angeles, California 90084-8789.

N. "Business Day(s)" are Monday through Friday of each week, exclusive of New
Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day ("Holidays"). Landlord may designate additional Holidays,

2

provided that the additional Holidays are commonly recognized by other office
buildings in the area where the Building is located.

O. "Landlord Work" means the work, if any, that Landlord is obligated to perform
in the Premises pursuant to a separate work letter agreement (the "Work
Letter"), if any, attached as Exhibit D. If a Work Letter is not attached to
this Lease or if an attached Work Letter does not require Landlord to perform
any work, the occurrence of the Commencement Date shall not be conditioned upon
the performance of work by Landlord and, accordingly, Section III.A. shall not
be applicable to the determination of the Commencement Date.

P. "Law(s)" means all applicable statutes, codes, ordinances, orders, rules and
regulations of any municipal or governmental entity.

Q. "Normal Business Hours" for the Building are 8:00 A.M. to 6:00 P.M. on
Business Days.

R. "Property" means the Building and the parcel(s) of land on which it is
located and, at Landlord's discretion, the Building parking facility and other
improvements serving the Building, if any, and the parcel(s) of land on which
they are located.

II. Lease Grant.

Landlord leases the Premises to Tenant and Tenant leases the Premises from
Landlord, together with the right in common with others to use any portions of
the Property that are designated by Landlord for the common use of tenants and
others, such as sidewalks, unreserved parking areas, common corridors, elevator
foyers, restrooms, vending areas and lobby areas (the "Common Areas").

III. Possession.

A. INTENTIONALLY OMITTED.

B. Subject to Landlord's obligations under Section IX.B., the Premises are
accepted by Tenant in ''as is" condition and configuration. As of the date
hereof, Tenant is currently occupying the Premises (other than Suite No.300),
and Tenant agrees that the Premises are in good order and satisfactory
condition, and that there are no representations or warranties by Landlord
regarding the condition of the Premises or the Building. Notwithstanding the
foregoing to the contrary, Landlord shall tender possession of Suite No.300 to
Tenant in broom clean condition, free of any prior tenant's personal property.
If Landlord is delayed delivering possession of Suite No.300 due to the holdover
or unlawful possession of such space by any party , Landlord shall use
reasonable efforts to obtain possession of the space. In such event, the
Commencement Date shall be postponed until the date which is 75 days after the
date Landlord delivers possession of Suite No. 300 to Tenant free from occupancy
by any party, and the Termination Date, at the option of Landlord, may be
postponed by an equal number of days.

C. If Tenant takes possession of Suite No.300 before the Commencement Date, such
possession shall be subject to the terms and conditions of this Lease and Tenant
shall pay Rent (defined in Section IV.A.) to Landlord for each day of possession
before the Commencement Date. However, except for the cost of services requested
by Tenant (e.g. freight elevator usage), Tenant shall not be required to pay
Rent for any days of possession before the Commencement Date during which
Tenant, with the approval of Landlord, is in possession of Suite No. 300 for the
sole purpose of performing improvements or installing furniture, equipment or
other personal property .

IV. Rent.

A. Payments. As consideration for this Lease, Tenant shall pay Landlord, without
any setoff or deduction, the total amount of Base Rent and Additional Rent due
for the Term. "Additional Rent" means all sums (exclusive of Base Rent) that
Tenant is required to pay Landlord. Additional Rent and Base Rent are sometimes
collectively referred to as "Rent". Tenant shall pay and be liable for all

3

 

rental, sales and use taxes '(but excluding income taxes), if any, imposed upon
or measured by Rent under applicable Law. Base Rent and recurring monthly
charges of Additional Rent shall be due and payable in advance on the first day
of each calendar month without notice or demand, provided that the installment
of Base Rent for the first full calendar month of the Term shall be payable upon
the execution of this Lease by Tenant. All other items of Rent shall be due and
payable by Tenant on or before 30 days after billing by Landlord. All payments
of Rent shall be by good and sufficient check or by other means (such as
automatic debit or electronic transfer) acceptable to Landlord. If Tenant fails
to pay any item or installment of Rent when due, Tenant shall pay Landlord an
administration fee equal to 4% of the past due Rent, provided that Tenant shall
be entitled to a grace period of 5 days for the first 2 late payments of Rent in
a given calendar year. If the Term commences on a day other than the first day
of a calendar month or terminates on a day other than the last day of a calendar
month, the monthly Base Rent and Tenant's Pro Rata Share of any Tax Excess
(defined in Section IV.B.) or Expense Excess (defined in Section IV.B.) for the
month shall be prorated based on the number of days in such calendar month.
Landlord's acceptance of less than the correct amount of Rent shall be
"considered a payment on account of the earliest Rent due. No endorsement or
statement on a check or letter accompanying a check or payment shall be
considered an accord and satisfaction, and either party may accept the check or
payment without prejudice to that party's right to recover the balance or pursue
other available remedies. Tenant's covenant to pay Rent is independent of every
other covenant in this Lease.

B. Expense Excess and Tax Excess. Tenant shall pay Tenant's Pro Rata Share of
the amount, if any, by which Expenses (defined in Section IV.C.) for each
calendar year during the Term exceed Expenses for the applicable Base Year (the
"Expense Excess") and also the amount, if any, by which Taxes (defined in
Section IV.D.) for each calendar year during the Term exceed Taxes for the
applicable Base Year (the "Tax Excess"). If Expenses and/or Taxes in any
calendar year decrease below the amount of Expenses and/or Taxes for the
applicable Base Year, Tenant's Pro Rata Share of Expenses and/or Taxes, as the
case may be, for that calendar year shall be $0. Landlord shall provide Tenant
with a good faith estimate of the Expense Excess and of the Tax Excess for each
calendar year during the Term. On or before the first day of each month, Tenant
shall pay to Landlord a monthly installment equal to one-twelfth of Tenant's Pro
Rata Share of Landlord's estimate of the Expense Excess and one- twelfth of
Tenant's Pro Rata Share of Landlord's estimate of the Tax Excess. If Landlord
determines that its good faith estimate of the Expense Excess or of the Tax
Excess was incorrect by a material amount, Landlord may provide Tenant with a
revised estimate. After its receipt of the revised estimate, Tenant's monthly
payments shall be based upon the revised estimate. If Landlord does not provide
Tenant with an estimate of the Expense Excess or of the Tax Excess by January 1
of a calendar year, Tenant shall continue to pay monthly installments based on
the previous year's estimate(s) until Landlord provides Tenant with the new
estimate. Upon delivery of the new estimate, an adjustment shall be made for any
month for which Tenant paid monthly installments based on the previous year's
estimate(s). Tenant shall pay Landlord the amount of any underpayment within 30
days after receipt of the new estimate. Any overpayment shall be refunded to
Tenant within 30 days or credited against the next due future installment(s) of
Additional Rent.

As soon as is practical following the end of each calendar year, Landlord shall
furnish Tenant with a statement of the actual Expenses and Expense Excess and
the actual" Taxes and Tax Excess for the prior calendar year. If the estimated
Expense Excess and/or estimated Tax Excess for the prior calendar year is more
than the: actual Expense Excess and/or actual Tax Excess, as the case may be,
for the prior calendar year, Landlord shall apply any overpayment by Tenant
against Additional Rent due or next becoming due, provided if the Term expires
before the determination of the overpayment, Landlord shall refund any
overpayment to Tenant after first deducting the amount of Rent due. If the
estimated Expense Excess and/or estimated Tax Excess for the prior calendar year
is less than the actual Expense Excess and/or actual Tax Excess, as the case may
be, for such prior year, Tenant shall pay Landlord, within 30 days after

4

 

its receipt of the statement 'of Expenses and/or Taxes, any underpayment for the
prior calendar year.

C. Expenses Defined.

"Expenses" means all costs and expenses incurred in each calendar year In
connection with operating, maintaining, repairing, and managing the Building and
the Property, including, but not limited to:

1. Labor costs, including, wages, salaries, social security and employment
taxes, medical and other types of insurance, uniforms, training, and retirement
and pension plans.

2. Management fees, the cost of equipping and maintaining a management office,
accounting and bookkeeping services, legal fees not attributable to leasing or
collection activity, and other administrative costs. Landlord, by itself or
through an affiliate, shall have the right to directly perform or provide any
services under this Lease (including management services), provided that the
cost of any such services shall not exceed the cost that would have been
incurred had Landlord entered into an arms-length contract for such services
with an unaffiliated entity of comparable skill and experience.

3. The cost of services, including amounts paid to service providers and the
rental and purchase cost of parts, supplies, tools and equipment.

4. Premiums and deductibles paid by Landlord for insurance, including workers
compensation, fire and extended coverage, earthquake, general liability, rental
loss, elevator, boiler and other insurance customarily carried from time to time
by owners of comparable office buildings. As of the date of this lease, landlord
currently carries earthquake insurance for the Building.

5. Electrical Costs (defined below) and charges for water, gas, steam and sewer,
but excluding those charges for which Landlord is reimbursed by tenants.
"Electrical Costs" means: (a) charges paid by Landlord for electricity; (b)
costs incurred in connection with an energy management program for the Property;
and (c) if and to the extent permitted by Law, a fee for the services provided
by Landlord in connection with the selection of utility companies and the
negotiation and administration of contracts for electricity , provided that such
fee shall not exceed 50% of any savings obtained by landlord. Electrical Costs
shall be adjusted as follows: (i) amounts received by Landlord as reimbursement
for above standard electrical' consumption shall be deducted from Electrical
Costs; (ii) the cost of electricity incurred to provide overtime HVAC to
specific tenants (as reasonably estimated by landlord) shall be deducted from
Electrical Costs; and (iii) if Tenant is billed directly for the cost of
building standard electricity to the Premises as a separate charge in addition
to Base Rent, the cost of electricity to individual tenant spaces in the
Building shall be deducted from Electrical Costs.

6. The amortized cost of capital improvements (as distinguished from replacement
parts or components installed in the ordinary course of business) made to the
Property which are: (a) performed primarily to reduce operating expense costs or
otherwise improve the operating efficiency of the Property; or (b) required to
comply with any Laws that are enacted, or first interpreted to apply to the
Property, after the date of this Lease. The cost of capital improvements shall
be amortized by Landlord over the lesser of the Payback Period (defined below)
or 5 years. The amortized cost of capital improvements may, at landlord's
option, include actual or imputed interest at the rate that Landlord would
reasonably be required to pay to finance the cost of the capital improvement.
"Payback Period" means the reasonably estimated period of time that it takes for
the cost savings resulting from a capital improvement to equal the total cost of
the capital improvement.

5

If Landlord incurs Expenses for the Property together with one or more other
buildings or properties, whether pursuant to a reciprocal easement agreement,
common area agreement or otherwise, the shared costs and expenses shall be
equitably prorated and apportioned between the Property and the other buildings
or properties. Expenses shall not include: the cost of capital improvements
(except as set forth above); depreciation; interest (except as provided above
for the amortization of capital improvements); principal payments of mortgage
and other non-operating debts of Landlord; ground lease rental; the cost of
repairs or other work to the extent Landlord is reimbursed by insurance or
condemnation proceeds; costs in connection with leasing space in the Building,
including brokerage commissions; lease concessions, including rental abatements
and construction allowances, granted to specific tenants; costs incurred in
connection with the sale, financing or refinancing of the Building; fines,
interest and penalties incurred due to the late payment of Taxes (defined in
Section IV.D) or Expenses; organizational expenses associated with the creation
and operation of the entity which constitutes Landlord; marketing, advertising
and promotional expenditures; any fines or penalties incurred due to violations
by Landlord of any law, order, rule or regulations of any governmental
authority; Landlord's costs of electricity and other services sold or provided
to tenants in the Building and for which Landlord is entitled to be reimbursed
by such tenants as a separate additional charge or rental over and above the
base rental or additional base rental payable under the lease with such tenant;
any cost or expense related to removal, cleaning, abatement or remediation of
I/hazardous materials" in or about the Building, Common Area or Property,
including, without limitation, hazardous substances in the ground water or soil,
except to the extent such removal, cleaning, abatement or remediation is related
to the general repair and maintenance of the Building, Common Area or Property;
Landlord's charitable and political contributions; all bad debt loss, rent loss,
or reserves for bad debt or rent loss; court costs and legal fees incurred to
enforce the obligations of tenants under leases of portions of the Building
(other than court costs and attorney's fees and expenses incurred by Landlord in
seeking to enforce Building rules and regulations); or any penalties or damages
that Landlord pays to Tenant under this Lease or to other tenants in the
Building under their respective leases. If the Building is not at least 95%
occupied during any calendar year or if Landlord is not supplying services to at
least 95% of the total Rentable Square Footage of the Building at any time
during a calendar year, Expenses shall, at Landlord's option, be determined as
if the Building had been 95% occupied and Landlord had been supplying services
to 95% of the Rentable Square Footage of the Building during that calendar year.
If Tenant pays for its Pro Rata Share of Expenses based on increases over a
"Base Year" and Expenses for a calendar year are determined as provided in the
prior sentence, Expenses for the applicable Base Year shall also be determined
as if the Building had been 95% occupied and Landlord had been supplying
services to 95% of the Rentable Square Footage of the Building. The
extrapolation of Expenses under this Section shall be performed by appropriately
adjusting the cost of those components of Expenses that are impacted by .changes
in the occupancy of the Building.

D. Taxes Defined. "Taxes" shall mean: (1) all real estate taxes and other
assessments on the Building and/or Property, including, but not limited to,
assessments for special improvement districts and building improvement
districts, taxes and assessments levied in substitution or supplementation in
whole or in part of any such taxes and assessments and the Property's share of
any real estate taxes and assessments under any reciprocal easement agreement,
common area agreement or similar agreement as to the Property; (2) all personal
property taxes for property that is owned by Landlord and used in connection
with the operation, maintenance and repair of the Property; and (3) all costs
and fees incurred in connection with seeking reductions in any tax liabilities
described in (1) and (2), including, without limitation, any costs incurred by
Landlord for compliance, review and appeal of tax liabilities. Without
limitation, Taxes shall not include any income, capital levy , franchise,
capital stock, gift, estate or inheritance tax. If an assessment is payable in
installments, Taxes for the year shall include the amount of the installment and
any interest due and payable during that year. For all other real estate taxes,
Taxes for that year shall, at Landlord's election, include either the amount
accrued, assessed or otherwise imposed for the year or the amount due and
payable for that year, provided that

6

Landlord's election shall be applied consistently throughout the Term. If a
change in Taxes is obtained for any year of the Term during which Tenant paid
Tenant's Pro Rata Share of any Tax Excess, then Taxes for that year will be
retroactively adjusted and Landlord shall provide Tenant with a credit, if any,
based on the adjustment. Likewise, if a change is obtained for Taxes for any
applicable Base Year, Taxes for such applicable Base Year shall be restated and
the Tax Excess for all subsequent years shall be recomputed. Tenant shall pay
Landlord the amount of Tenant's Pro Rata Share of any such increase in the Tax
Excess within 30 days after Tenant's receipt of a statement from Landlord.

E. Audit Rights. Tenant may, within 90 days after receiving Landlord's statement
of Expenses, give Landlord written notice ("Review Notice") that Tenant intends
to review Landlord's records of the Expenses for that calendar year. Within a
reasonable time after receipt of the Review Notice, Landlord shall make all
pertinent records available for inspection that are reasonably necessary .for
Tenant to conduct its review. If any records are maintained at a location other
than the office of the Building, Tenant may either inspect the records at such
other location or pay for the reasonable cost of copying and shipping the
records. If Tenant retains an agent to review Landlord's records, the agent must
be with a licensed CPA firm. Tenant shall be solely responsible for all costs,
expenses and fees incurred for the audit. Within 60 days after the records are
made available to Tenant, Tenant shall have the right to give Landlord written
notice (an "Objection Notice") stating in reasonable detail any objection to
Landlord's statement of Expenses for that year. If Tenant fails to give Landlord
an Objection Notice within the 60 day period or fails to provide Landlord with a
Review Notice within the 90 day period described above, Tenant shall be deemed
to have approved Landlord's statement of Expenses and shall be barred from
raising any claims regarding the Expenses for that year. If Tenant provides
Landlord with a timely Objection Notice, Landlord and Tenant shall work together
in good faith to resolve any issues raised in Tenant's Objection Notice. If
Landlord and Tenant determine that Expenses for the calendar year are less than
reported, Landlord shall provide Tenant with a credit against the next
installment of Rent in the amount of the overpayment by Tenant. Likewise, if
Landlord and Tenant determine that Expenses for the calendar year are greater
than reported, Tenant shall pay Landlord the amount of any underpayment within
30 days. In addition, if Landlord and Tenant determine that Expenses for the
Building for the year in question were less than stated by more than 5%,
Landlord, within 30 days after its receipt of paid invoices therefor from
Tenant, shall reimburse Tenant for any reasonable amounts paid by Tenant to
third parties in connection with such review by Tenant. The records obtained by
Tenant shall be treated as confidential. In no event shall Tenant be permitted
to examine Landlord's records or to dispute any statement of Expenses unless
Tenant has paid and continues to pay all Rent when due.

V. Compliance with Laws; Use.

The Premises shall be used only for the Permitted Use and for no other use
whatsoever. Tenant shall not use or permit the use of the Premises for any
purpose which is illegal, dangerous to persons or property or which, in
Landlord's reasonable opinion, unreasonably disturbs any other tenants of the
Building or interferes with the operation of the Building. Tenant shall comply
with all Laws, including the Americans with Disabilities Act, regarding the
operation of Tenant's business and the use, condition, configuration and
occupancy of the Premises. Tenant, within 10 days after receipt, shall provide
Landlord with copies of any notices it receives regarding a violation or alleged
violation of any Laws. Except to the extent properly included in Expenses,
Landlord shall be responsible for the cost of correcting any violations of Title
III of the Americans with Disabilities Act (ADA) with respect to the Common
Areas of the Building. .Notwithstanding the foregoing, Landlord shall have the
right to contest any alleged violation in good faith, including, without
limitation, the right to apply for and obtain a waiver or deferment of
compliance, the right to assert any and all defenses allowed by law and the
right to appeal any decisions, judgments or rulings to the fullest extent
permitted by law. Landlord, after the exhaustion of any and all rights to appeal
or contest, will make all repairs, additions, alterations or improvements
necessary to comply with the terms of any final order or judgment. Tenant shall
comply with the rules and regulations of the Building attached as Exhibit B and
such other reasonable rules and regulations adopted by Landlord from time to
time. Tenant shall also cause its agents, contractors, subcontractors,
employees, customers, and subtenants to comply

7

 

 

 

with all rules and regulations. Landlord shall not knowingly discriminate
against Tenant in Landlord's enforcement of the rules and regulations.

VI. Security Deposit.

A. The Security Deposit shall be in the form of an irrevocable letter of credit
(the "Letter of Credit") which shall: (a) be in the amount of $2,250,000.00; (b)
be issued on the form attached hereto as Exhibit H; (c) name Landlord as its
beneficiary; (d) be drawn on an FDIC insured financial institution satisfactory
to Landlord; and (e) expire no earlier than 90 days after the Termination Date
of this Lease. The Security Deposit shall be delivered to Landlord upon the
execution of this Lease by Tenant and shall be held by Landlord without
liability for interest (unless required by Law) as security for the performance
of Tenant's obligations. The Security Deposit is not an advance payment of Rent
or a measure of Tenant's liability for damages. Landlord may, from time to time,
without prejudice to any other remedy, use all or a portion of the Security
Deposit to satisfy past due Rent or to cure any uncured default by Tenant. If
Landlord uses the Security Deposit, Tenant shall on demand restore the Security
Deposit to its original amount. Landlord shall return any unapplied portion 'of
the Security Deposit to Tenant within 45 days after the later to occur of: (1)
the determination of Tenant's Pro Rata Share of any Tax Excess and Expense
Excess for the final year of the Term; (2) the date Tenant surrenders possession
of the Premises to Landlord in accordance with this Lease; or (3) the
Termination Date. If Landlord transfers its interest in the Premises, Landlord
may assign the Security Deposit to the transferee and, following the assignment,
Landlord shall have no further liability for the return of the Security Deposit.
Landlord shall not be required to keep the Security Deposit separate from its
other accounts.

B. Notwithstanding anything herein to the contrary, provided (1) Tenant is not
in default under this Lease, and (2) Tenant's then-applicable current ratio (as
determined in accordance with generally accepted accounting principles) is
greater .than or equal to 2:1 and Tenant's then-applicable return on equity (as
determined in accordance with generally accepted accounting principles) is
greater than or equal to the average return on equity for Tenant's peer industry
group (as the same is reasonably determined by Landlord) (the "Benchmarks"), as
evidenced by Tenant's audited financial statements delivered by Tenant to
Landlord and prepared by an independent CPA for the most recent calendar year,
Tenant shall have the right to reduce the amount of the Security Deposit (i.e.,
the Letter of Credit) by $260,000.00 on each anniversary of the Commencement
Date that Tenant has successfully met the Benchmarks. Such reduction shall be
accomplished by having Tenant provide Landlord with a substitute Letter of
Credit in the form of the letter of credit attached hereto as Exhibit H in the
reduced amount.

VII. Services to be Furnished by Landlord.

A. Landlord agrees to furnish Tenant with the following services: (1) Water
service for use in the lavatories on each floor on which the Premises are
located; (2) Heat and air conditioning in season during Normal Business Hours,
at such temperatures and in such amounts as are standard for comparable
buildings or as required by governmental authority .Tenant, upon such advance
notice as is reasonably required by Landlord, shall have the right to receive
HVAC service during hours other than Normal Business Hours. Tenant shall pay
Landlord the standard charge for the additional service as reasonably determined
by Landlord from time to time. As of the date of this Lease, Landlord's charge
for after-hours heating and air conditioning is $40.00 per hour per floor for
each of floors 2 through 10, and $32.00 per hour per floor for floor 11, subject
to change; (3) Maintenance and repair of the Property as described in Section
IX.B.; (4) Janitor service on Business Days. If Tenant's use, floor covering or
other improvements require special services in excess of the standard services
for the Building, Tenant shall pay the additional cost attributable to the
special services; (5) Elevator service; (6) Electricity to the Premises for
general office use, in accordance with and subject to the terms and conditions
in Article X; and (7) such other services as Landlord reasonably determines are
necessary or appropriate for the Property.

8

 

B. Landlord's failure to furnish, or any interruption or termination of,
services due to the application of Laws, the failure of any equipment, the
performance of repairs, improvements or alterations, or the occurrence of any
event or cause beyond the reasonable control of Landlord (a "Service Failure")
shall not render Landlord liable to Tenant, constitute a constructive eviction
of Tenant, give rise to an abatement of Rent, nor relieve Tenant from the
obligation to fulfill any covenant or agreement. However, if the Premises, or a
material portion of the Premises, is made untenantable for a period in excess of
3 consecutive Business Days as a result of the Service Failure, then Tenant, as
its sole remedy, shall be entitled to receive an abatement of Rent payable
hereunder during the period beginning on the 4th consecutive Business Day of the
Service Failure and ending on the day the service has been restored. If the
entire Premises has not been rendered untenantable by the Service Failure, the
amount of abatement that Tenant is entitled to receive shall be prorated based
upon the percentage of the Premises rendered untenantable and not used by
Tenant. In no event, however, shall Landlord be liable to Tenant for any loss or
damage, Including the theft of Tenant's Property (defined in Article XV),
arising out of or in connection with the failure of any security services,
personnel or equipment.

VIII. Leasehold Improvements.

All improvements to the Premises (collectively, "Leasehold Improvements") shall
be owned by Landlord and shall remain upon the Premises without compensation to
Tenant. However, Landlord, by written notice to Tenant within 30 days prior to
the Termination Date, may require Tenant to remove, at Tenant's expense: (1)
Cable (defined in Section IX.A) installed by or for the exclusive benefit of
Tenant and located in the Premises or other portions of the Building; and (2)
any Leasehold Improvements that are performed by or for the benefit of Tenant
and, in Landlord's reasonable judgment, are of a nature that would require
removal and repair costs that are materially in excess of the removal and repair
costs associated with standard office improvements (collectively referred to as
"Required Removables"). Without limitation, it is agreed that Required
Removables include internal stairways, raised floors, personal baths and
showers, vaults, rolling file systems and structural alterations and
modifications of any type. The Required Removables designated by Landlord shall
be removed by Tenant before the Termination Date, provided that upon prior
written notice to Landlord, Tenant may remain in the Premises for up to 5 days
after the Termination Date for the sole purpose of removing the Required
Removables. Tenant's possession of the Premises shall be subject to all of the
terms and conditions of this Lease, including the obligation to pay Rent on a
per diem basis at the rate in effect for the last month of the Term. Tenant
shall repair damage caused by the installation or removal of Required
Removables. If Tenant fails to remove any Required Removables or perform related
repairs in a timely manner, Landlord, at Tenant's expense, may remove and
dispose of the Required Removables and perform the required repairs. Tenant,
within 30 days after receipt of an invoice, shall reimburse Landlord for the
reasonable costs incurred by Landlord. Notwithstanding the foregoing, Tenant, at
the time it requests approval for a proposed Alteration (defined in Section
IX.C), may request in writing that Landlord advise Tenant whether the Alteration
or the Initial Alterations, as the case may be, or any portion of the Alteration
or the Initial Alterations, as the case may be, will be designated as a Required
Removable. Within 10 days after receipt of Tenant's request, Landlord shall
advise Tenant in writing as to which portions of the Alteration or the Initial
Alterations, as the case may be, if any, will be considered to be Required
Removables.

IX. Repairs and Alterations.

A. Tenant's Repair Obligations. Tenant shall, at its sole cost and expense,
promptly perform all maintenance and repairs to the Premises that are not
Landlord's express responsibility under this Lease, and shall keep the Premises
in good condition and repair, reasonable wear and tear excepted. Tenant's repair
obligations include, without limitation, repairs to: (1) floor covering; (2)
interior partitions; (3) doors; (4) the interior side of demising walls; (5)
electronic, phone and data cabling and related equipment (collectively, "Cable")
that is installed by or for the exclusive benefit of Tenant and located in the
Premises or other portions of the Building; (6) supplemental air conditioning
units, private showers and kitchens, including hot water heaters, plumbing, and
similar facilities serving Tenant exclusively; and (7) Alterations performed by
contractors retained by Tenant, including related HVAC balancing. All work shall
be performed in

9

accordance with the rules and procedures described in Section IX.C. below. If
Tenant fails to make any repairs to the Premises for more than 15 days after l
notice from Landlord (although notice shall not be required if there Is an [i
emergency), landlord may make the repairs, and Tenant shall pay the ~ reasonable
cost of the repairs to Landlord within 30 days after receipt of an [i invoice,
together with an administrative charge in an amount equal to 7% of the cost of
the repairs.

B. Landlord's Repair Obligations. Landlord shall keep and maintain in good
repair and working order and make repairs to and perform maintenance upon: (1)
structural elements of the Building; (2) mechanical (including HVAC), fi
electrical, plumbing and fire/life safety systems serving the Building in
general; (3) Common Areas; (4) the roof of the Building; (5) exterior windows of
the Building; and (6) elevators serving the Building. Landlord shall promptly
make repairs (considering the nature and urgency of the repair) for which
Landlord is responsible.

C. Alterations. Tenant shall not make alterations, additions or improvements to
the Premises or install any Cable in the Premises or other portions of the
Building (collectively referred to as "Alterations") without first obtaining the
written consent of Landlord In each instance, which consent shall not be
unreasonably withheld i or delayed. However, Landlord's consent shall not be
required for any Alteration that satisfies all of the following criteria (a
"Cosmetic Alteration"): (1) is of a cosmetic nature such as painting,
wallpapering, hanging pictures and installing carpeting; (2) is not visible from
the exterior of the Premises or Building; (3) will not affect the systems or
structure of the Building; and (4) does not require work to be performed inside
the walls or above the ceiling of the Premises. However, even though consent is
not required, the performance of Cosmetic Alterations , shall be subject to all
the other provisions of this Section IX.C. Prior to starting work, tenant shall
furnish Landlord with plans and specifications reasonably f acceptable to
Landlord; names of contractors reasonably acceptable to Landlord (provided that
Landlord may designate specific contractors with respect to Building systems);
copies of contracts; necessary permits and approvals; evidence of contractor's
and subcontractor's insurance in amounts reasonably required by Landlord; and
any security for performance that is reasonably required by Landlord. Changes to
the plans and specifications must also be submitted to Landlord for its
approval. Alterations shall be constructed in a good and workmanlike manner
using materials of a quality that is at least equal to the quality designated by
Landlord as the minimum standard for the Building. Landlord may designate
reasonable rules, regulations and procedures for the performance of work in the
Building and, to the extent reasonably necessary to avoid disruption to the
occupants of the Building, shall have the right to designate , the time when
Alterations may be performed. Tenant shall reimburse Landlord I within 30 days
after receipt of an invoice for sums paid by Landlord for third party
examination of Tenant's plans for non-Cosmetic Alterations. In addition, within
30 days after receipt of an invoice from Landlord, Tenant shall pay Landlord a
fee for Landlord's oversight and coordination of any non-Cosmetic Alterations
equal to 7% of the cost of the non-Cosmetic Alterations. Upon completion, Tenant
shall

furnish ''as-built'' plans (except for Cosmetic Alterations), completion
affidavits, full and final waivers of lien in recordable form, and receipted
bills covering all labor and materials. Tenant shall assure that the Alterations
comply with all insurance requirements and Laws. Landlord's approval of an
Alteration shall not be a representation by Landlord that the Alteration
complies with applicable Laws or will be adequate for Tenant's use.

X. Use of Electrical Services by Tenant

A. Electricity used by Tenant in the Premises shall, at Landlord's option, be
paid for 11 by Tenant either: (1) through inclusion in Expenses (except as
provided in Ii Section X.B. for excess usage); (2) by a separate charge payable
by Tenant to i Landlord within 30 days after billing by Landlord; or (3) by
separate charge billed by the applicable utility company and payable directly by
Tenant. Electrical service to the Premises may be furnished by one or more
companies providing electrical generation, transmission and distribution
services, and the cost of

.electricity may consist of several different components or separate charges for

10

 

such services, such as generation, distribution and stranded cost charges.
Landlord shall have the exclusive right to select any company providing
electrical service to the Premises, to aggregate the electrical service for the
Property and Premises with other buildings, to purchase electricity through a
broker and/or buyers group and to change the providers and manner of purchasing
electricity. Landlord shall be entitled to receive a fee (if permitted by Law)
for the selection of utility companies and the negotiation and administration of
contracts for electricity, provided that the amount of such reasonable fee shall
not exceed 50% of any savings obtained by Landlord.

B. Tenant's use of electrical service shall not exceed, either in voltage, rated
capacity , use beyond Normal Business Hours or overall load, that which Landlord
deems to be standard for the Building. If Tenant requests permission to consume
excess electrical service, Landlord may refuse to consent or may condition
consent upon conditions that Landlord reasonably elects (including, without
limitation, the installation of utility service upgrades, meters, submeters, air
handlers or cooling units), and the additional usage (to the extent permitted by
Law), installation and maintenance costs shall be paid by Tenant. Landlord shall
have the right to separately meter electrical usage for the Premises and to
measure electrical usage by surveyor other commonly accepted methods.

XI. Entry by Landlord.

Landlord, its agents, contractors and representatives may enter the Premises to
inspect or show the Premises, to clean and make repairs, alterations or
additions to the Premises, and to conduct or facilitate repairs, alterations or
additions to any portion of the Building, including other tenants' premises.
Except in emergencies or to provide janitorial and other Building services after
Normal Business Hours, Landlord shall provide Tenant with reasonable prior
notice of entry into the Premises, which may be given orally. However, with
respect to Tenant's data center in the Premises, except in emergencies or to
provide janitorial and other Building services after Normal Business Hours,
Landlord shall provide Tenant with at least 24 hours notice prior to entry,
which notice may be given orally. If reasonably necessary for the protection and
safety of Tenant and its employees, Landlord shall have the right to temporarily
close all or a portion of the Premises to perform repairs, alterations and
additions. However, except in emergencies, Landlord will not close the Premises
if the work can reasonably be completed on weekends and after Normal Business
Hours. Entry by Landlord shall not constitute constructive eviction or entitle
Tenant to an abatement or reduction of Rent.

XII. Assignment and Subletting.

A. Except in connection with a Permitted Transfer (defined in Section XII.E.
below), Tenant shall not assign, sublease, transfer or encumber any interest in
this Lease or allow any third party to use any portion of the Premises
(collectively or individually, a "Transfer") without the prior written consent
of Landlord, which consent shall not be unreasonably withheld if Landlord does
not elect to exercise its termination rights under Section XII.B below. Without
limitation, it is agreed that Landlord's consent shall not be considered
unreasonably withheld if: (1) the proposed transferee's financial condition does
not meet the criteria Landlord uses to select Building tenants having similar
leasehold obligations; (2) the proposed transferee's business is not suitable
for the Building considering the business of the other tenants and the
Building's prestige, or would result in a violation of another tenant's rights;
(3) the proposed transferee is a governmental agency or 'occupant of the
Building; (4) Tenant is in default after the expiration of the notice and cure
periods in this Lease; or (5) any portion of the Building or Premises would
likely become subject to additional or different Laws as a consequence of the
proposed Transfer. Tenant shall not be entitled to receive monetary damages
based upon a claim that Landlord unreasonably withheld its consent to a proposed
Transfer and Tenant's sole remedy shall be an action to enforce any such
provision through specific performance or declaratory judgment. Any attempted
Transfer in violation of this Article shall, at Landlord's option, be void.
Consent by Landlord to one or more Transfer(s) shall not operate as a waiver of
Landlord's rights to approve any subsequent Transfers. In no event shall any
Transfer or Permitted Transfer release or relieve Tenant from any obligation
under this Lease.

11

 

B. As part of its request for Landlord's consent to a Transfer, Tenant shall
provide Landlord with financial statements for the proposed transferee, a
complete copy of the proposed assignment, sublease and other contractual
documents and such other information as Landlord may reasonably request.
Landlord shall, by written notice to Tenant within 30 days of its receipt of the
required information and documentation, either: (1) consent to the Transfer by
the execution of a consent agreement in a form reasonably designated by Landlord
or reasonably refuse to consent to the Transfer in writing; or (2) exercise its
right to terminate this Lease with respect to the portion of the Premises that
Tenant Is proposing to assign or sublet. Any such termination shall be effective
on the proposed effective date of the Transfer for which Tenant requested
consent. Tenant shall pay Landlord a review fee of $750.00 for Landlord's review
of any Permitted Transfer or requested Transfer, provided if Landlord's actual
reasonable costs and expenses (including reasonable attorney's fees) exceed
$750.00, Tenant shall reimburse Landlord for its actual reasonable costs and
expenses in lieu of a fixed review fee.

C. Tenant shall pay Landlord 50% of all rent and other consideration which
Tenant receives as a result of a Transfer that is in excess of the Rent payable
to Landlord for the portion of the Premises and Term covered by the Transfer.
Tenant shall pay Landlord for Landlord's share of any excess within 30 days
after Tenant's receipt of such excess consideration. Tenant may deduct from the
excess all reasonable and customary expenses directly incurred by Tenant
attributable to the Transfer (other than Landlord's review fee), including
brokerage fees, legal fees and construction costs. If Tenant is in Monetary
Default (defined in Section XIX.A. below), Landlord may require that all
sublease payments be made directly to Landlord, in which case Tenant shall
receive a credit against Rent in the amount of any payments received (less
Landlord's share of any excess).

D. Except as provided below with respect to a Permitted Transfer, if Tenant is a
corporation, limited liability company, partnership, or similar entity , and if
the entity which owns or controls a majority of the voting shares/rights at any
time changes for any reason (including but not limited to a merger,
consolidation or reorganization), such change of ownership or control shall
constitute a Transfer: The foregoing shall not apply so long as Tenant is an
entity whose outstanding stock is listed on a recognized security exchange. or
if at least 80% of its voting stock is owned by another entity , the voting
stock of which is so listed.

E. Tenant may assign its entire interest under this Lease to a successor to
Tenant by purchase, merger, consolidation or reorganization without the consent
of Landlord, provided that all of the following conditions are satisfied (a
"Permitted Transfer"): (1) Tenant is not in default under this Lease; (2)
Tenant's successor shall own all or substantially all of the assets of Tenant;
(3) Tenant's successor shall have a net worth which is at least equal to the
greater of Tenant's net worth at the date of this Lease or Tenant's net worth as
of the day prior to the proposed purchase, merger, consolidation or
reorganization; (4) the Permitted Use does not allow the Premises to be used for
retail purposes; and (5) Tenant shall give Landlord written notice at least 30
days prior to the effective date of the proposed purchase, merger, consolidation
or reorganization. Tenant's notice to Landlord shall include information and
documentation showing that each of the above conditions has been satisfied. If
requested by Landlord, Tenant's successor shall sign a commercially reasonable
form of assumption agreement.

XIII. Liens.

Tenant shall not permit mechanic's or other liens to be placed upon the
Property, Premises or Tenant's leasehold interest in connection with any work or
service done or purportedly done by or for benefit of Tenant. If a lien is so
placed, Tenant shall, within 10 days of notice from Landlord of the filing of
the lien, fully discharge the lien by settling the claim which resulted in the
lien or by bonding or insuring over the lien in the manner prescribed by the
applicable lien Law. If Tenant fails to discharge the lien, then, in addition to
any other right or remedy of Landlord, Landlord may bond or insure over the lien
or otherwise discharge the lien. Tenant shall reimburse Landlord for any amount
paid by Landlord to bond or insure over the lien or discharge the lien,
including, without limitation, reasonable attorneys' fees (if and to the extent
permitted by Law) within 30 days after receipt of an invoice from Landlord.

12

XIV. Indemnity and Waiver of Claims.

A. Except to the extent caused by the negligence or willful misconduct of
Landlord or any Landlord Related Parties (defined below), Tenant shall
indemnify, defend and hold Landlord, its trustees, members, principals,
beneficiaries, partners, officers, directors, employees, Mortgagee(s) (defined
in Article XXVI) and agents ("Landlord Related Parties") harmless against and
from all liabilities, obligations, damages, penalties, claims, actions, costs,
charges and expenses, including, without limitation, reasonable attorneys' fees
and other professional fees (if and to the extent permitted by Law), which may
be imposed upon, incurred by or asserted against Landlord or any of the Landlord
Related Parties and arising out of or in connection with any damage or injury
occurring in the Premises or any acts or omissions (including violations of Law)
of Tenant, the Tenant Related Parties (defined below) or any of Tenant's
transferees, contractors or licensees.

B. Except to the extent caused by the negligence or willful misconduct of Tenant
or any Tenant Related Parties (defined below), Landlord shall indemnify, defend
, and hold Tenant, its trustees, members, principals, beneficiaries, partners,
officers, directors, employees and agents ("Tenant Related Parties") harmless
against and from all liabilities, obligations, damages, penalties, claims,
actions, costs, charges and expenses, including, without limitation, reasonable
attorneys' t fees and other professional fees (if and to the extent permitted by
Law), which may be imposed upon, incurred by or asserted against Tenant or any
of the Tenant Related Parties and arising out of or in connection with the acts
or omissions (including violations of Law) of Landlord, the Landlord Related
Parties or any of Landlord's contractors.

C. Landlord and the Landlord Related Parties shall not be liable for, and Tenant
waives, all claims for loss or damage to Tenant's business or loss, theft or
damage to Tenant's Property or the property of any person claiming by, through
or under Tenant resulting from: (1) wind or weather; (2) the failure of any I
sprinkler, heating or air-conditioning equipment, any electric wiring or any
gas, water or steam pipes; (3) the backing up of any sewer pipe or downspout;
(4) the bursting, leaking. or running of any tank, water closet, drain or other
pipe; (5) water, snow or ice upon or coming through the roof, skylight, stairs,
doorways, windows, walks or any other place upon or near the Building; (6) any
act or omission of any party other than Landlord or Landlord Related Parties;
and (7) any causes not reasonably within the control of Landlord. Tenant shall
insure itself against such losses under Article XV below.

XV. Insurance.

Tenant shall carry and maintain the following insurance ("Tenant's Insurance"),
at its sole cost and expense: (1) Commercial General Liability Insurance
.applicable to the premises .and its appurtenances providing, on an occurrence
basis, a minimum combined single limit of $2,000,000.00; (2) All Risk
Property/Business Interruption Insurance, including earthquake, written at
replacement cost value and with a replacement cost endorsement covering all of
Tenant's trade fixtures, equipment, furniture and other personal property within
the Premises ("Tenant's Property"); (3) Workers' Compensation Insurance as
required by the state in which the Premises is located and in amounts as may be
required by applicable statute; and, (4) Employers Liability Coverage of at
least $1,000,000.00 per occurrence. Any company writing any of Tenant's
Insurance shall have an A.M. Best rating of not less than A-VIII. All Commercial
General Liability Insurance policies shall name Tenant as a named insured and
Landlord (or any successor), Equity Office Properties Trust, a Maryland real
estate investment trust, EOP Operating Limited Partnership, a Delaware limited
partnership, and their respective , members, principals, beneficiaries,
partners, officers, directors, employees, and agents, and other designees of
Landlord as the interest of such designees shall appear, as additional,
insureds. All policies of Tenant's Insurance shall contain endorsements that the
insurer(s) shall give Landlord and its designees at least 30 days' advance
written notice of any change, cancellation, termination or lapse of insurance.
Tenant shall provide Landlord with a certificate of insurance evidencing
Tenant's Insurance prior to the earlier to occur of the Commencement Date or the
date Tenant is provided with possession of the Premises for any reason, and upon
i renewals at least 15 days prior to the expiration of the insurance coverage.
So long as the same is available at commercially reasonable rates, Landlord
shall maintain so called All Risk

13

property insurance on the Building at replacement cost value, as reasonably
estimated by Landlord. Except as specifically provided to the contrary, the
limits of either party's' insurance shall not limit such party's liability under
this Lease.

XVI. Subrogation.

Notwithstanding anything in this Lease to the contrary, Landlord and Tenant
hereby waive and shall cause their respective insurance carriers to waive any
and all rights of recovery , claim, action or causes of action against the other
and their respective trustees, principals, beneficiaries, partners, officers,
directors, agents, and employees, for any loss or damage that may occur to
Landlord or Tenant or any party claiming by, through or under Landlord or
Tenant, as the case may be, with respect to Tenant's Property, the Building, the
Premises, any additions or improvements to the Building or Premises, or any
contents thereof, including all rights of recovery , claims, actions or causes
of action arising out of the negligence of Landlord or any Landlord Related
Parties or the negligence of Tenant or any Tenant Related Parties, which loss or
damage is (or would have been, had the insurance required by this Lease been
carried) covered by insurance.

XVII. Casualty Damage.

A. If all or any part of the Premises is damaged by fire or other casualty,
Tenant shall immediately notify Landlord in writing. During any period of time
that all or a material portion of the Premises is rendered untenantable as a
result of a fire or other casualty , the Rent shall abate for the portion of the
Premises that is untenantable and not used by Tenant. Landlord shall have the
right to terminate this Lease if: (1) the Building shall be damaged so that, in
Landlord's reasonable judgment, substantial alteration or reconstruction of the
Building shall be required (whether or not the Premises has been damaged); (2)
Landlord is not permitted by Law to rebuild the Building in substantially the
same form as existed before the fire or casualty; (3) the Premises have been
materially damaged and there is less than 2 ' years of the Term remaining on the
date of the casualty; (4) any Mortgagee requires that the insurance proceeds be
applied to the payment of the mortgage debt; or (5) a material uninsured loss to
the Building occurs. Landlord may exercise its right to terminate this Lease by
notifying Tenant in writing within 90 days after the date of the casualty .In
addition to Landlord's rights to terminate as provided herein, Tenant shall have
the right to terminate this Lease if: (1) a substantial portion of the Premises
has been damaged by fire or other casualty and such damage cannot reasonably be
repaired within 60 days after the date of such fire or other casualty; (2) there
is less than one year of the Lease Term remaining on the date of such casualty;
(3) the casualty was not caused by the negligence or willful misconduct of
Tenant or its agents, employees or contractors; and (4) Tenant provides Landlord
with written notice of its intent to terminate within 30 days after the date of
the fire or other casualty .If neither Landlord nor Tenant elect to terminate
this Lease, Landlord shall commence and proceed with reasonable diligence to
repair and restore the Building and the Leasehold Improvements (excluding any
Alterations that were performed by Tenant in violation of this Lease). However,
in no event shall Landlord be required to spend more than the insurance proceeds
received by Landlord. Landlord shall not be liable for any loss or damage to
Tenant's Property or to the business of Tenant resulting in any way from the
fire or other casualty or from the repair and restoration of the damage.
Landlord and Tenant hereby waive the provisions of any Law relating to the
matters addressed in this Article, and agree that their respective rights for
damage to or destruction of the Premises shall be those specifically provided in
this Lease.

B. If all or any portion of the Premises shall be made untenantable by fire or
other casualty, Landlord shall, with reasonable promptness, cause an architect
or general contractor selected by Landlord to provide Landlord and Tenant with a
written estimate of the amount of time required to substantially complete the
repair and restoration of the Premises and make the Premises tenantable again,
using standard working methods ("Completion Estimate"). If the Completion
Estimate indicates that the Premises cannot be made tenantable within 270 days
from the date the repair and restoration is started, then regardless of anything
in Section XVII.A above to the contrary, either party shall have the right to
terminate this Lease by giving written notice to the other of such election
within 10 days

14

after receipt of the Completion Estimate. Tenant, however, shall not have the
right to terminate this Lease if the fire or casualty was caused by the
negligence or intentional misconduct of Tenant, Tenant Related Parties or any of
Tenant's transferees, contractors or licensees.

XVIII. Condemnation.

Either party may terminate this Lease if the whole or any material part of the
Premises shall be taken or condemned for any public or quasi-public use under
Law, by eminent domain or private purchase in lieu thereof (a "Taking").
Landlord shall also have the right to terminate this Lease if there Is a Taking
of any portion of the Building or Property which would leave the remainder of
the Building unsuitable for use as an office building in a manner comparable to
the Building's use prior to the Taking. In order to exercise its right to
terminate the Lease, Landlord or Tenant, as the case may be, must provide
written notice of termination to the other within 45 days after the terminating
party first receives notice of the Taking. Any such termination shall be
effective as of the date the physical taking of the Premises or the portion of
the Building or Property occurs. If this Lease is not terminated, the Rentable
Square Footage of the Building, the Rentable Square Footage of the Premises and
Tenant's Pro Rata Share shall, if applicable, be appropriately adjusted. In
addition, Rent for any portion of the Premises taken or condemned shall be
abated during the unexpired Term of this Lease effective when the physical
taking of the portion of the Premises occurs. All compensation awarded for a
Taking, or sale proceeds, shall be the property of Landlord, any right to
receive compensation or proceeds being expressly waived by Tenant. However,
Tenant may file a separate claim at its sole cost and expense for Tenant's
Property, Tenant's goodwill and Tenant's reasonable relocation expenses,
provided the filing of the claim does not diminish the award which would
otherwise be receivable by Landlord.

XIX. Events of Default.

Tenant shall be considered to be in default of this Lease upon the occurrence of
any of the following events of default:

A. Tenant's failure to pay when due all or any portion of the Rent, if the
failure continues for 5 days after written notice to Tenant ("Monetary
Default").

B. Tenant's failure (other than a Monetary Default) to comply with any term,
provision or covenant of this Lease, if the failure is not cured within 30 days
after written notice to Tenant. However, if Tenant's failure to comply cannot
reasonably be cured within 30 days, Tenant shall be allowed additional time (not
to exceed 60 days) as is reasonably necessary to cure the failure so long as:
(1) Tenant commences to cure the failure within 30 days, and (2) Tenant
diligently pursues a course of action that will cure the failure and bring
Tenant back into compliance with the Lease. However, if Tenant's failure to
comply creates a hazardous condition, the failure must be cured immediately upon
notice to Tenant. In addition, if Landlord provides Tenant with notice of
Tenant's failure to comply with any particular term, provision or covenant of
the Lease on 3 occasions during any 12 month period, Tenant's subsequent
violation of such term, provision or covenant shall, at Landlord's option, be an
incurable event of default by Tenant.

C. Tenant or any Guarantor becomes insolvent, makes a transfer in fraud of
creditors or makes an assignment for the benefit of creditors, or admits in
writing its inability to pay its debts when due.

D. The leasehold estate is taken by process or operation of Law.

E In the case of any ground floor or retail Tenant, Tenant does not take
possession of, or abandons or vacates all or any portion of the Premises.

F. Tenant is in default beyond any notice and cure period under any other lease
or agreement with Landlord, including, without limitation, any lease or
agreement for parking.

15

XX. Remedies.

A. Upon the occurrence of any event or events of default under this Lease,
whether enumerated in Article XIX or not, Landlord shall have the option to
pursue anyone or more of the following remedies without any notice (except as
expressly prescribed herein) or demand whatsoever (and without limiting the
generality of the foregoing, Tenant hereby specifically waives notice and demand
for payment of Rent or other obligations and waives any and all other notices or
demand requirements imposed by applicable law):

1. Terminate this Lease and Tenant's right to possession of the Premises and
recover from Tenant an award of damages equal to the sum of the following:

 a. The Worth at the Time of Award of the unpaid Rent which had been earned at
    the time of termination;
 b. The Worth at the Time of Award of the amount by which the unpaid Rent which
    would have been earned after termination until the time of award exceeds the
    amount of such Rent loss that Tenant affirmatively proves could have been
    reasonably avoided;
 c. The Worth at the Time of Award of the amount by which the unpaid Rent for
    the balance of the Lease Term after the time of award exceeds the amount of
    such Rent loss that Tenant affirmatively proves could be reasonably avoided;
 d. Any other amount necessary to compensate Landlord for all the detriment
    either proximately caused by Tenant's failure to perform Tenant's
    obligations under this Lease or which in the ordinary course of things would
    be likely to result therefrom; and
 e. All such other amounts in addition to or in lieu of the foregoing as may be
    permitted from time to time under applicable law.

The 'Worth at the Time of Award" of the amounts referred to in parts (a) and (b)
above, shall be computed by allowing interest at the lesser of a per annum rate
equal to: (i) the greatest per annum rate of interest permitted from time to
time under applicable law, or (ii) the Prime Rate plus five percent (5%). For
purposes hereof, the "Prime Rate" shall be the per annum interest rate publicly
announced as its prime or base rate by a federally insured bank selected by
Landlord in the State of California. The 'Worth at the Time of Award" of the
amount referred to in part (c), above, shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%);

2. Employ the remedy described in California Civil Code § 1951.4 (Landlord may
continue this Lease in effect after Tenant's breach and abandonment and recover
Rent as it becomes due, if Tenant has the right to sublet or assign, subject
only to reasonable limitations); or

3. Notwithstanding Landlord's exercise of the remedy described in California
Civil Code § 1951.4 in respect of an event or events of default, at such time
thereafter as Landlord may elect in writing, to terminate this Lease and
Tenant's right to possession of the Premises and recover an award of damages as
provided above in Paragraph XX.A.1.

B. The subsequent acceptance of Rent hereunder by Landlord shall not be deemed
to be a waiver of any preceding breach by Tenant of any term, covenant or
condition of this Lease, other than the failure of Tenant to pay the particular
Rent so accepted, regardless of Landlord's knowledge of such preceding breach at
the time of acceptance of such Rent. No waiver by Landlord of any breach hereof
shall be effective unless such waiver is in writing and signed by Landlord.

16

 

 

C. TENANT HEREBY WAIVES ANY AND ALL RIGHTS CONFERRED BY SECTION 3275 OF THE
CIVIL CODE OF CALIFORNIA AND BY SECTIONS 1174 (C) AND 1179 OF THE CODE OF CIVIL
PROCEDURE OF CALIFORNIA AND ANY AND ALL OTHER LAWS AND RULES OF LAW FROM TIME TO
TIME IN EFFECT DURING THE LEASE TERM PROVIDING THAT TENANT SHALL HAVE ANY RIGHT
TO REDEEM, REINSTATE OR RESTORE THIS LEASE FOLLOWING ITS TERMINATION BY REASON
OF TENANT'S BREACH. TENANT ALSO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING
TO THIS LEASE.

D. No right or remedy herein conferred upon or reserved to Landlord is intended
to be exclusive of any other right or remedy, and each and every right and
remedy shall be cumulative and in addition to any other right or remedy given
hereunder or now or hereafter existing by agreement, applicable law or in
equity. In addition to other remedies provided in this Lease, Landlord shall be
entitled, to the extent permitted by applicable law, to injunctive relief, or to
a decree compelling performance of any of the covenants, agreements, conditions
or provisions of this Lease, or to any other remedy allowed to Landlord at law
or in equity. Forbearance by Landlord to enforce one or more of the remedies
herein provided . upon an event of default shall not be deemed or construed to
constitute a waiver

of such default.

E. This Article XX shall be enforceable to the maximum extent such .enforcement
is not prohibited by applicable law, and the unenforceability of any portion
thereof shall not thereby render unenforceable any other portion.

XXI. Limitation of Liability.

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE LIABILITY
OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) TO TENANT SHALL BE LIMITED TO THE
INTEREST OF LANDLORD IN THE PROPERTY. TENANT SHALL LOOK SOLELY TO LANDLORD'S
INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT OR AWARD AGAINST
LANDLORD. NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE PERSONALLY
LIABLE FOR ANY. JUDGMENT OR DEFICIENCY. BEFORE FILING SUIT FOR AN ALLEGED
DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S) (DEFINED IN
ARTICLE XXVI BELOW) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES (DEFINED IN
ARTICLE XXVI BELOW) ON THE PROPERTY , BUILDING OR PREMISES, NOTICE AND
REASONABLE TIME TO CURE THE ALLEGED DEFAULT.

XXII. No Waiver.

Either party's failure to declare a default immediately upon its occurrence, or
delay in taking action for a default shall not constitute a waiver of the
default, nor shall it constitute an estoppel. Either party's failure to enforce
its rights for a default shall not constitute a waiver of its rights regarding
any subsequent default. Receipt by Landlord of Tenant's keys to the Premises
shall not constitute an acceptance or surrender of the Premises.

XXIII. Quiet Enjoyment.

Tenant shall, and may peacefully have, hold and enjoy the Premises, subject to
the terms of this Lease, provided Tenant pays the Rent and fully performs all of
its covenants and agreements. This covenant and all other covenants of Landlord
shall be binding upon Landlord and its successors only during its or their
respective periods of ownership of the Building, and shall not be a personal
covenant of Landlord or the Landlord Related Parties.

XXIV. Relocation.

INTENTIONALLY OMITTED

XXV. Holding Over.

Except for any permitted occupancy by Tenant under Article VIII, if Tenant fails
to surrender the Premises at the expiration or earlier termination of this
Lease, occupancy of the

17

Premises after the termination or expiration shall be that of a tenancy at
sufferance. Tenant's occupancy of the Premises during the holdover shall be
subject to all the terms and provisions of this Lease and Tenant shall pay an
amount (on a per month basis without reduction for partial months during the
holdover) equal to 150% of the greater of: (1) the sum of the Base Rent and
Additional Rent due for the period immediately preceding the holdover; or (2)
the fair market gross rental for the Premises as reasonably determined by
Landlord. No holdover by Tenant or payment by Tenant after the expiration or
early termination of this Lease shall be construed to extend the Term or prevent
Landlord from immediate recovery of possession of the Premises by summary
proceedings or otherwise. In addition to the payment of the amounts provided
above, if Landlord is unable to deliver possession of the Premises to a new
tenant, or to perform improvements for a new tenant, as a result of Tenant's
holdover and Tenant fails to vacate the Premises within 30 days after Landlord
notifies Tenant of Landlord's inability to deliver possession, or perform
improvements, Tenant shall be liable to Landlord for all damages, including;
without limitation, consequential damages, that Landlord suffers from the
holdover.

XXVI. Subordination to Mortgages; Estoppel Certificate.

Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of
trust, ground lease(s) or other lien(s) now or subsequently arising upon the
Premises, the Building or the Property, and to renewals, modifications,
refinancings and extensions thereof (collectively referred to as a "Mortgage").
The party having the benefit of a Mortgage shall be referred to as a
"Mortgagee". This clause shall be self-operative, but upon request from a
Mortgagee, Tenant shall execute a commercially reasonable subordination
agreement in favor of the Mortgagee. In lieu of having the Mortgage be superior
to this Lease, a Mortgagee shall have the right at any time to subordinate its
Mortgage to this Lease. If requested by a successor-in-interest to all or a part
of Landlord's interest in the Lease, Tenant shall, without charge, attorn to the
successor-in-interest. Landlord and Tenant shall each, within 10 days after
receipt of a written request, from the other, execute and deliver an estoppel
certificate to those parties as are reasonably requested by the other (including
a Mortgagee or prospective purchaser). The estoppel certificate shall include a
statement certifying that this Lease is unmodified (except as identified in the
estoppel certificate) and in full force and effect, describing the dates to
which Rent and other charges have been paid, representing that, to such party's
actual knowledge, there is no default (or stating the nature of the alleged
default) and indicating other matters with respect to the Lease that may
reasonably be requested. Notwithstanding the foregoing, as a condition precedent
to the subordination of this Lease, Landlord shall be required to provide Tenant
with a non-disturbance, subordination and attornment agreement in favor of
Tenant from any Mortgagee who comes into existence after the Commencement Date.
Such non-disturbance, subordination and attornment agreement in favor of Tenant
shall provide that, so long as Tenant is paying the rent due under the Lease and
is not otherwise in default under the Lease, its right to possession and other
terms of the Lease shall remain in full force and effect. Such non- disturbance,
subordination and attornment agreement may include additional time on behalf of
the Mortgagee to cure defaults of the Landlord and provide that (a) neither
Mortgagee nor any successor-in-interest shall be bound by (i) any payment of the
Base Rent, Additional Rent, or other sum due hereunder for more than 1 month in
advance or (ii) any amendment or modification to the Lease made without the
express written consent of Mortgagee or any successor-in-interest; (b) neither
Mortgagee nor any successor-in-interest will be liable for (i) any act or
omission or warranties of any prior landlord (including Landlord), (ii) the
breach of any warranties or obligations relating to construction of improvements
on the property or any tenant finish work performed or to have been performed by
any prior landlord (including Landlord), or (iii) the return of any security
deposit, except to the extent such deposits have been received by Mortgagee; and
(c) neither Mortgagee nor any successor-in-interest shall be subject to any
offsets or defenses which Tenant might have against any prior landlord
(including Landlord).

XXVII. Attorneys' Fees.

If either party institutes a suit against the other for violation of or to
enforce any 'covenant or condition of this Lease, or if either party intervenes
in any suit in which the other is a party to enforce or protect its interest or
rights, the prevailing party shall be entitled to all of its costs and expenses,
including, without limitation, reasonable attorneys' fees.

XXVIII. Notice.

If a demand, request, approval, consent or notice (collectively referred to as a
"notice") shall or may be given to either party by the other, the notice shall
be in writing and delivered by

18

hand or sent by registered or certified mail with return receipt requested, or
sent by overnight or same day courier service at the party's respective Notice
Address(es) set forth in Article I, except that if Tenant has vacated the
Premises (or if the Notice Address for Tenant is other than the Premises, and
Tenant has vacated such address) without providing Landlord a new Notice
Address, Landlord may serve notice in any manner described in this Article or in
any other manner permitted by Law. Each notice shall be deemed to have been
received or given on the earlier to occur of actual delivery or the date on
which delivery is refused, or, if Tenant has vacated the Premises or the other
Notice Address of Tenant without providing a new Notice Address, three (3) days
after notice is deposited in the U.S. mail or with a courier service in the
manner described above. Either party may, at any time, change its Notice Address
by giving the other party written notice of the new address in the manner
described in this Article.

XXIX. Excepted Rights.

This Lease does not grant any rights to light or air over or about the Building.
Landlord excepts and reserves exclusively to itself the use of: (1) roofs, (2)
telephone, electrical and janitorial closets, (3) equipment rooms, Building
risers or similar areas that are used by Landlord for the provision of Building
services, (4) rights to the land and improvements below the floor of the
Premises, (5) the improvements and air rights above the Premises, (6) the
improvements and air rights outside the demising walls of the Premises, and (7)
the areas within the Premises used for the installation of utility lines and
other installations serving occupants of the Building. Landlord has the right to
change the Building's name or address. Landlord also has the right to make such
other changes to the Property and Building as Landlord deems appropriate,
provided the changes do not materially affect Tenant's ability to use the
Premises for the Permitted Use. Landlord shall also have the right (but not the
obligation) to temporarily close the Building if Landlord reasonably determines
that there is an imminent danger of significant damage to the Building or of
personal injury to Landlord's employees or the occupants of the Building. The
circumstances under which Landlord may temporarily close the Building shall
include, without limitation, electrical interruptions, hurricanes and civil
disturbances. A closure of the Building under such circumstances shall not
constitute a constructive eviction nor entitle Tenant to an abatement or
reduction of Rent.

XXX. Surrender of Premises.

At the expiration or earlier termination of this Lease or Tenant's right of
possession, Tenant shall remove Tenant's Property (defined in Article XV) from
the Premises, and quit and surrender the Premises to Landlord, broom clean, and
in good order, condition and repair, ordinary wear and tear excepted. Tenant
shall also be required to remove the Required Removables in accordance with
Article VIII. If Tenant falls to remove any of Tenant's Property within 2 days
after the termination of this Lease or of Tenant's right to possession,
Landlord, at Tenant's sole cost and expense, shall be entitled (but not
obligated) to remove and store Tenant's Property .Landlord shall not be
responsible for the value, preservation or safekeeping of Tenant's Property.
Tenant shall pay Landlord, upon demand, the expenses and storage charges
incurred for Tenant's Property. In addition, if Tenant fails to remove Tenant's
Property from the Premises or storage, as the case may be, within 30 days after
written notice, Landlord may deem all or any part of Tenant's Property to be
abandoned, and title to Tenant's Property shall be deemed to be immediately
vested in Landlord.

XXXI. Miscellaneous.

A. This Lease and the rights and obligations of the parties shall be
interpreted, construed and enforced in accordance with the Laws of the State of
California and Landlord and Tenant hereby irrevocably consent to the
jurisdiction and proper venue of such state. If any term or provision of this
Lease shall to any extent be invalid or unenforceable, the remainder of this
Lease shall not be affected, and each provision of this Lease shall be valid and
enforced to the fullest extent permitted by Law. The headings and titles to the
Articles and Sections of this Lease are for convenience only and shall have no
effect on the interpretation of any part of the Lease.

B. Tenant shall not record this Lease or any memorandum without Landlord's prior
written consent.

C. Landlord and Tenant hereby waive any right to trial by jury in any proceeding
based upon a breach of this Lease.

19

D. Whenever a period of time is prescribed for the taking of an action by
Landlord or Tenant, the period of time for the performance of such action shall
be extended i by the number of days that the performance is actually delayed due
to strikes, acts of God, shortages of labor or materials, war, civil
disturbances and other causes beyond the reasonable control of the performing
party ("Force Majeure"). However, events of Force Majeure shall not extend any
period of time for the payment of Rent or other sums payable by either party or
any period of time for the written exercise of an option or right by either
party.

E. Landlord shall have the right to transfer and assign, in whole or in part,
all of its rights and obligations under this Lease and in the Building and/or
Property referred to herein, and upon such transfer Landlord shall be released
from any I further obligations hereunder, and Tenant agrees to look solely to
the successor I in interest of Landlord for the performance of such obligations.

F. Tenant represents that it has dealt directly with and only with the Broker as
a broker in connection with this Lease. Tenant shall indemnify and hold Landlord
and the Landlord Related Parties harmless from all claims of any other brokers
claiming to have represented Tenant in connection with this Lease. Landlord
agrees to indemnify and hold Tenant and the Tenant Related Parties harmless from
all claims of any brokers claiming to have represented Landlord in connection
with this Lease. Landlord agrees to pay a brokerage commission to Broker in
accordance with the terms of a separate written commission agreement to be
entered into by and between Landlord and Broker, provided that in no event shall
Landlord be obligated to pay a commission to Broker in connection with any

extension of the Lease Term or in connection with any additional space that is
leased by Tenant pursuant to the terms of this Lease.

G. Tenant covenants, warrants and represents that: (1) each individual
executing, I attesting and/or delivering this Lease on behalf of Tenant is
authorized to do so on behalf of Tenant; (2) this Lease is binding upon Tenant;
and (3) Tenant is duly organized and legally existing in the state of its
organization and is qualified to do business in the State of California. If
there is more than one Tenant, or if Tenant is comprised of more than one party
or entity, the obligations imposed upon Tenant shall be joint and several
obligations of all the parties and entities. Notices, payments and agreements
given or made by, with or to anyone person or entity shall be deemed to have
been given or made by, with and to all of them.

H. Time is of the essence with respect to Tenant's exercise of any expansion,
renewal or extension rights granted to Tenant. This Lease shall create only the
relationship of landlord and tenant between the parties, and not a partnership,
joint venture or any other relationship. This Lease and the covenants and
conditions in this Lease shall inure only to the benefit of and be binding only
upon Landlord and Tenant and their permitted successors and assigns.

I. The expiration of the Term, whether by lapse of time or otherwise, shall not
relieve either party of any obligations which accrued prior to or which may
continue to accrue after the expiration or early termination of this Lease.
Without limiting the scope of the prior sentence, it is agreed that Tenant's
obligations under Sections IV.A, IV.B., VIII, XIV, XX, XXV and XXX shall survive
the expiration or early termination of this Lease.

J. Landlord has delivered a copy of this Lease to Tenant for Tenant's review
only, and the delivery of it does not constitute an offer to Tenant or an
option. This Lease shall not be effective against any party hereto until an
original copy of this Lease has been signed by such party.

K. All understandings and agreements previously made between the parties are If
superseded by this Lease, and neither party is relying upon any warranty,
statement or representation not contained in this Lease. This Lease may be
modified only by a written agreement signed by Landlord and Tenant.

L. Tenant, within 15 days after request, shall provide Landlord with a current
financial statement and such other information as Landlord may reasonably

20

request in order to create a '"business profile" of Tenant and determine
Tenant's ability to fulfill its obligations under this Lease. Landlord however
shall not require Tenant to provide such information unless Landlord is
requested to produce the information in connection with a proposed financing or
sale of the Building. Upon written request by Tenant, Landlord shall enter into
a commercially reasonable confidentiality agreement covering any confidential
information that is disclosed by Tenant.

XXXII. Entire Agreement.

This Lease and the following exhibits and attachments constitute the entire
agreement between the parties and supersede all prior agreements and
understandings related to the Premises, including all lease proposals, letters
of intent and other documents: Exhibit A-1 (Outline and Location of Premises),
Exhibit A-2 (Outline and Location of 4th Floor Space), Exhibit A-3 (Outline and
Location of 8th Floor Expansion Space), Exhibit B (Rules and Regulations),
Exhibit C (Commencement Letter), Exhibit D (Work Letter Agreement), Exhibit E
(Additional Provisions) and Exhibit F (Parking Agreement), Exhibit G (Storage
Space Supplement), Exhibit G-1 (Outline and Location of Storage Space), and
Exhibit H (Form of Letter of Credit).

Landlord and Tenant have executed this Lease as of the day and year first above
written.

 

LANDLORD:

EOP-60 SPEAR, L.L.C., a Delaware limited liability

company

By: EOP Operating Limited Partnership, a Delaware

limited partnership, its sole member

By: Equity Office Properties Trust, a Maryland

real estate investment trust,

its managing general partner

By: /s/ Peter H. Adams

Name: Peter Adams.

Title: Senior Vice President

 

 

TENANT:

INDUS INTERNATIONAL, INC., a California corporation

By: /s/ Henry C. Montgomery

Name: Henry C. Montgomery

Title: Chief Financial Officer

By: /s/ Onagh M Ash

Name: Onagh M. Ash

Title: Executive VP of Sales and Services

 

 

EXHIBIT B

BUILDING RULES AND REGULATIONS

The following rules and regulations shall apply, where applicable, to the
Premises, the Building, the parking garage (if any), the Property and the
appurtenances. Capitalized terms have the same meaning as defined in the Lease.

1. Sidewalks, doorways, vestibules, halls, stairways and other similar areas
shall not be obstructed by Tenant or used by Tenant for any purpose other than
ingress and egress to and from the Premises. No rubbish, litter, trash, or
material shall be placed, emptied, or thrown in those areas. At no time shall
Tenant permit Tenant's employees to loiter In Common Areas or elsewhere about
the Building or Property.

2. Plumbing fixtures and appliances shall be used only for the purposes for
which designed, and no sweepings, rubbish, rags or other unsuitable material
shall be thrown or placed in the fixtures or appliances. Damage resulting to
fixtures or appliances by Tenant, its agents, employees or invitees, shall be
paid for by Tenant, and Landlord shall not be responsible for the damage.

3. No signs, advertisements or notices shall be painted or affixed to windows,
doors or other parts of the Building, except those of such color, size, style
and in such places as are first approved in writing by Landlord. All tenant
identification and suite numbers at the entrance to the Premises shall be
installed by Landlord, at Tenant's cost and expense, using the standard graphics
for the Building. Except in connection with the hanging of lightweight pictures
and wall decorations, no nails, hooks or screws shall be inserted into any part
of the Premises or Building except by the Building maintenance personnel.

4. Landlord may provide and maintain in the first floor (main lobby) of the
Building an alphabetical directory board or other directory device listing
tenants, and no other directory shall be permitted unless previously consented
to by Landlord in writing.

5. Tenant shall not place any lock(s) on any door in the Premises or Building
without Landlord's prior written consent and Landlord shall have the right to
retain at all times and to use keys to all locks within and into the Premises. A
reasonable number of keys to the locks on the entry doors in the Premises shall
be furnished by Landlord to Tenant at Tenant's cost, and Tenant shall not make
any duplicate keys. All keys shall be returned to Landlord at the expiration or
early termination of this Lease.

6. All contractors, contractor's representatives and installation technicians
performing work in the Building shall be subject to Landlord's prior approval-
and shall be required to comply with Landlord's standard rules, regulations,
policies and procedures, which may be revised from time to time.

7. Movement in or out of the Building of furniture or office equipment, or
dispatch or receipt by Tenant of merchandise or materials requiring the use of
elevators, stairways, lobby areas or loading dock areas, shall be restricted to
hours designated by Landlord. Tenant shall obtain Landlord's prior approval by
providing a detailed listing of the activity. If approved by Landlord, the
activity shall be under the supervision of Landlord and performed in the manner
required by Landlord. Tenant shall assume all risk for damage to articles moved
and injury to any persons resulting from the activity. If equipment, property,
or personnel of Landlord or of any other party is damaged or injured as a result
of or in connection with the activity, Tenant shall be solely liable for any
resulting damage or loss.

8. Landlord shall have the right to approve the weight, size, or location of
heavy equipment or articles in and about the Premises. Damage to the Building by
the installation, maintenance, operation, existence or removal of Tenant's
Property shall be repaired at Tenant's sole expense.

9. Corridor doors, when not in use, shall be kept closed.

10. Tenant shall not: (1) make or permit any improper, objectionable or
unpleasant noises or odors in the Building, or otherwise interfere in any way
with other tenants or persons

having business with them; (2) solicit business or distribute, or cause to be
distributed, in any portion of the Building, handbills, promotional materials or
other advertising; or (3) conduct or permit other activities in the Building
that might, in Landlord's sole opinion, constitute a nuisance.

11. No animals, except those assisting handicapped persons, shall be brought
into the Building or kept in or about the Premises.

12. No inflammable, explosive or dangerous fluids or substances shall be used or
kept by Tenant in the Premises, Building or about the Property. Tenant shall
not, without Landlord's prior written consent, use, store, install, spill,
remove, release or dispose of, within or about the Premises or any other portion
of the Property, any asbestos- containing materials or any solid, liquid or
gaseous material now or subsequently considered toxic or hazardous under the
provisions of 42 U.S.C. Section 9601 et seq. or any other applicable
environmental Law which may now or later be in effect. Tenant shall comply with
all Laws pertaining to and governing the use of these materials by Tenant, and
shall remain solely liable for the costs of abatement and removal.

13. Tenant shall not use or occupy the Premises in any manner or for any purpose
which might injure the reputation or impair the present or future value of the
Premises or the Building. Tenant shall not use, or permit any part of the
Premises to be used, for lodging, sleeping or for any illegal purpose.

14. Tenant shall not take any action which would violate Landlord's labor
contracts or which would cause a work stoppage, picketing, labor disruption or
dispute, or interfere with Landlord's or any other tenant's or occupant's
business or with the rights and privileges of any person lawfully in the
Building ("Labor Disruption"). Tenant shall take the actions necessary to
resolve the Labor Disruption, and shall have pickets removed and, at the request
of Landlord, immediately terminate any work in the Premises that gave rise to
the Labor Disruption, until Landlord gives its written consent for the work to
resume. Tenant shall have no claim for damages against Landlord or any of the
Landlord Related Parties, nor shall the Commencement Date of the Term be
extended as a result of the above actions.

15. Tenant shall not install, operate or maintain in the Premises or in any
other area of the Building, electrical equipment that would overload the
electrical system beyond its capacity for proper, efficient and safe operation
as determined solely by Landlord. Tenant shall not furnish cooling or heating to
the Premises, including, without limitation, the use of electronic or gas
heating devices, without Landlord's prior written consent. Tenant shall not use
more than its proportionate share of telephone lines and other telecommunication
facilities available to service the Building.

16. Tenant shall not operate or permit to be operated a coin or token operated
vending machine or similar device (including, without limitation, telephones,
lockers, toilets, scales, amusement devices and machines for sale of beverages,
foods, candy, cigarettes and other goods), except for machines for the exclusive
use of Tenant's employees, and then only if the operation does not violate the
lease of any other tenant

in the Building.

17. Bicycles and other vehicles are not permitted inside the Building or on the
walkways outside the Building, except in areas designated by Landlord.

18. Landlord may from time to time adopt systems and procedures for the security
and safety of the Building, its occupants. entry, use and contents. Tenant, its
agents, employees, contractors, guests and invitees shall comply with Landlord's
systems and procedures.

19. Landlord shall have the right to prohibit the use of the name of the
Building or any other publicity by Tenant that in Landlord's sole opinion may
impair the reputation of the Building or its desirability. Upon written notice
from Landlord, Tenant shall refrain from and discontinue such publicity
immediately.

20. Tenant shall not canvass, solicit or peddle in or about the Building or the
Property.

21. Neither Tenant.nor its agents, employees, contractors, guests or invitees
shall smoke or permit smoking in the Common Areas, unless the Common Areas have
been declared a designated smoking area by Landlord, nor shall the above parties
allow smoke from the Premises to emanate into the Common Areas or any other part
of the Building. Landlord shall have the right to designate the Building
(including the Premises) as a non-smoking building.

22. .Landlord shall have the right to designate and approve standard window
coverings for the Premises and to establish rules to assure that the Building
presents a uniform exterior appearance. Tenant shall ensure, to the extent
reasonably practicable, that window coverings are closed on windows in the
Premises while they are exposed to the direct rays of the sun.

23. Deliveries to and from the Premises shall be made only at the times, in the
areas and through the entrances and exits designated by Landlord. Tenant shall
not make deliveries to or from the Premises in a manner that might interfere
with the use by any other tenant of its premises or of the Common Areas, any
pedestrian use, or any use which Is inconsistent with good business practice.

24. The work of cleaning personnel shall not be hindered by Tenant after 5:30
P.M., and cleaning work may be done at any time when the offices are vacant.
Windows, doors and fixtures may be cleaned at any time. Tenant shall provide
adequate waste and rubbish receptacles to prevent unreasonable hardship to the
cleaning service.

EXHIBIT C

COMMENCEMENT LETTER

(EXAMPLE)

Date ______________

Tenant _____________

Address _____________

 

Re: Commencement Letter with respect to that certain Lease dated as of .2000, Qy
and between EOP-60 SPEAR, L.L.C., a Delaware limited liability company, as
Landlord, and INCUS INTERNATIONAL, INC., a CalIfornia corporation as Tenant, for
rentable square feet on the ___________floor of the Building located at 60 Spear
Street, San Francisco, California.

Dear ________________:

In accordance with the terms and conditions of the above referenced Lease,
Tenant accepts possession of the Premises and agrees:

 1. The Commencement Date of the Lease is ________________________:
 2. The Termination Date of the Lease is ___________________________.

Please acknowledge your acceptance of possession and agreement to the terms set
forth above by signing all 3 counterparts of this Commencement Letter in the
space provided and returning 2 fully executed counterparts to my attention.

Sincerely,

___________________________________

Property Manager

 

Agreed and Accepted:

Tenant: _______________________

By: _______________________

Name: _______________________

Title: _______________________

Date: _______________________

EXHIBIT D

WORK LETTER

This Exhibit Is attached to and made a part of the Lease dated as of March 3,
2000, by and between EOP-60 SPEAR, L.L.C., a Delaware limited liability company
("Landlord") and INDUS INTERNATIONAL, INC., a California corporation ("Tenant")
for space in the Building located at 60 Spear Street, San Francisco, California.

I. Alterations and Allowance.

A. Tenant, following the delivery of the Premises by Landlord and the full and
final execution and delivery of this Lease and all prepaid rental and security
deposits required hereunder, shall have the right to perform alterations and
improvements in the Premises (the "Initial Alterations"). Notwithstanding the
foregoing, Tenant and its contractors shall not have the right to perforl11
Initial Alterations in the Premises unless and until Tenant has complied with
all of the terms and conditions of Article IX.C. of this Lease, including,
without limitation, approval by Landlord of the final plans for the Initial
Alterations and the contractors to be retained by Tenant to perform such Initial
Alterations. Tenant shall be responsible for all elements of the design of
Tenant's plans (including, without limitation, compliance with law,
functionality of design, the structural integrity of the design, the
configuration of the premises and the placement of Tenant's furniture,
appliances and equipment), and Landlord's approval of Tenant's plans shall in no
event relieve Tenant of the responsibility for such design. Landlord's approval
of the contractors to perform the Initial Alterations shall not be unreasonably
withheld. The parties agree that Landlord's approval of the general contractor
to perform the Initial Alterations shall not be considered to be unreasonably
withheld if any such general contractor (i) does not have trade references
reasonably acceptable to Landlord, (ii) does not maintain insurance as required
pursuant to the terms of this Lease, (iii) does not have the ability to be
bonded for the work in an amount of no less than $1,000,000.00, (iv) does not
provide current financial statements reasonably acceptable to Landlord, or (v)
is not licensed as a contractor in the state/municipality in which the Premises
is located. Tenant acknowledges the foregoing is not intended to be an exclusive
list of the reasons why Landlord may reasonably withhold its consent to a
general contractor. Notwithstanding the foregoing to the contrary, Tenant shall
utilize the designated Building engineer (Glumac International) for all
engineering work performed in the Premises and Tenant shall utilize the fire,
life and safety subcontractor required by Landlord for all fire, life and safety
work performed in the Premises.

B. Provided Tenant is not in default, Landlord agrees to contribute the sum of
(i) $659,904.00 (the "Main Allowance and (ii) 192,525.00 (the "Suite 300
Allowance") (collectively, the "Allowance") toward the cost of performing the
Initial Alterations in preparation of Tenant's occupancy of the Premises.
Landlord shall be entitled to deduct from the Allowance a construction
management fee for Landlord's oversight of the Initial Alterations in an amount
equal to (i) 2.5% of the Main Allowance, (ii) 2.5% of the Suite 300 Allowance,
and (iii) 1.5% of any additional costs incurred by Landlord or Tenant in
connection with the construction of the Initial Alterations for the Main
Premises and Suite No.300 which are in excess of the Allowance. Landlord and
Tenant agree that the Main Allowance shall be used only for the Initial
Alterations to Suite Nos. 200, 500, 600, 700, 900, 1000, 1000E, 1050 and 1100
(the "Main Premises"); and the Suite300 Allowance shall only be used for Initial
Alterations to Suite300. Notwithstanding the foregoing to the contrary, Tenant
may apply up to 50% of the Suite300 Allowance toward the initial tenant
improvement work to be performed in the remainder of the Premises. The Allowance
may only be used for the cost of preparing design and construction documents and
mechanical and electrical plans for the Initial Alterations and for hard costs
in connection with the Initial Alterations. Notwithstanding the foregoing, at
Tenant's option, up to $59,486.90 of the Allowance may be allocated to real
estate consulting or brokerage services. The Main Allowance and the Suite 300
Allowance, as the case may be, shall be paid to Tenant or, at Landlord's option,
to the order of the general contractor that

performed the Initial Alterations, within 30 days following receipt by Landlord
of (1) receipted bills covering all labor and materials or other allowed
expenses expended and used in the Initial Alterations for the Main Premises or
Suite300, as the case may be: (2) a sworn contractors affidavit from the general
contractor and a request to disburse from Tenant containing an approval by
Tenant of the work done for the Main Premises or Suite 300, as the case may be;
(3) full and final waivers of lien for the Main Premises or Suite300, as the
case may be; (4) as-built plans of the Initial Alterations for the Main Premises
or Suite300, as the case may be: and (5) the certification of Tenant and its
architect that the Initial Alterations for the Main Premises or Suite 300, as
the case may be, have been installed in a good and workmanlike manner in
accordance with the approved plans, and in accordance with applicable laws,
codes and ordinances. The Main Allowance and Suite 300 Allowance, as the case
may be, shall be disbursed in the amount reflected on the receipted bills
meeting the requirements above. Notwithstanding anything herein to the contrary,
Landlord shall not be obligated to disburse any portion of the Main Allowance or
the Suite 300 Allowance during the continuance of an uncured default under the
Lease, and Landlord's obligation to disburse shall only resume when and if such
default is cured.

C. In no event shall the Allowance be used for the purchase d equipment,
furniture or other items of personal property of Tenant. In the event Tenant
does not use the entire Main Allowance and Suite 300 Allowance by March 31, 2001
any unused amount shall accrue to the sole benefit of Landlord, it being
understood that Tenant

shall not be entitled to any credit, abatement or other concession in connection
therewith. Tenant shall be responsible for all applicable state sales or use
taxes, if any, payable in connection with the Initial Alterations, Main
Allowance and/or the Suite 300 Allowance.

D. Tenant agrees to accept the Premises in its ''as-is'' condition and
configuration, it being agreed that Landlord shall not be required to perform
any work or, except as provided above with respect to the Initial Alterations,
the Main Allowance or the Suite 300 Allowance, incur any costs in connection
with the construction or demolition of any improvements in the Premises.

E. This Exhibit D shall not be deemed applicable to any additional space (other
than the 4th Floor Space) added to the original Premises at any time or from
time to time, whether by any options under the Lease or otherwise, or to any
portion of the original Premises or any additions to the Premises in the event
of a renewal or extension of the original Term of this Lease, whether by any
options under the Lease or otherwise, unless expressly so provided in the Lease
or any amendment or supplement to the Lease.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Landlord and Tenant have executed this exhibit as of the day and year first
above written.

 

LANDLORD:

EOP-60 SPEAR, L.L.C., a Delaware limited liability

company

By: EOP Operating Limited Partnership, a Delaware

limited partnership, its sole member

By: Equity Office Properties Trust, a Maryland

real estate investment trust,

its managing general partner

By: /s/ Peter H. Adams

Name: Peter Adams.

Title: Senior Vice President

 

 

TENANT:

INDUS INTERNATIONAL, INC., a California corporation

By: /s/ Henry C. Montgomery

Name: Henry C. Montgomery

Title: Chief Financial Officer

By: /s/ Onagh M Ash

Name: Onagh M. Ash

Title: Executive VP of Sales and Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

.

EXHIBIT E

ADDITIONAL PROVISIONS

This Exhibit Is attached to and made a part of the Lease dated as of March 3,
2000, by and between EOP-60 SPEAR, L.L.C., a Delaware limited liability company
("Landlord"') and INDUS INTERNATIONAL, INC., a California corporation
("'Tenant") for space in the Building located at 60 Spear Street, San Francisco,
California.

 I. MUST TAKE SPACE.

A. Tenant hereby leases from Landlord and Landlord hereby leases to Tenant the
12,835 square feet of rentable area described as Suite No.400 on the 4th floor
of the Building and shown on Exhibit A-2 attached hereto (the "4 th Floor
Space"). The Term with respect to the 4th Floor Space shall commence on the date
(the "4th Floor Space Commencement Date") which is the earlier to occur of
(i)the date which is 75 days after Landlord delivers possession of the 4th Floor
Space to Tenant, and (ii) the date Tenant's initial improvement work to the 4th
Floor Space is substantially complete (as reasonably determined by Landlord).
Landlord and Tenant agree that the date which is 75 days after the date Landlord
delivers possession of the 4th Floor Space to Tenant is currently anticipated to
be June 16, 2000 (the "Anticipated 4th Floor Commencement Date"). For purposes
hereof, the initial tenant improvements to the 4th Floor Space shall be deemed
to be substantially completed on the date such work has been completed, other
than any details of construction, mechanical adjustment or other matter, the
noncompletion of which does not materially interfere with Tenant's use of the
4th Floor Space. The Term for the 4th Floor Space shall terminate on the
Termination Date. The period commencing on the 4th Floor Space Commencement Date
and ending on the Termination Date is hereinafter referred to herein as the "4th
Floor Space Term". Effective as of the 4th Floor Space Commencement Date, the
4th Floor Space shall be deemed to be a part of the Premises; and from and after
the 41 Floor Space Commencement Date, the Premises shall be deemed to be 108,158
rentable square feet. Notwithstanding the foregoing to the contrary, the 4th
Floor Space Commencement Date shall be delayed to the extent that Landlord fails
to deliver possession of the 4th Floor Space for any reason, including but not
limited to, holding over by prior occupants. Landlord shall use its good faith
efforts to ensure that the 4th Floor Space Commencement Date is the Anticipated
4th Floor Commencement Date. However, any delay in the 4th Floor Space
Commencement Date shall not subject Landlord to any liability for any loss or
damage resulting therefrom. If the 4th Floor Space Commencement Date is delayed,
the Termination Date under the Lease shall not be similarly extended.

B. The 4th Floor Space is leased by Tenant pursuant to all of the terms and
conditions of the Lease, except that the financial terms and conditions (i.e.
8ase Rent, Additional Rent and improvement allowance) for the 4th Floor Space
shall be as follows:

1. Tenant shall pay Landlord Base Rent for the 4th Floor Space in monthly
installments as follows:

a. One installment of $22,728.60 (i.e. $1,515.24 per diem x 15 days) payable on
or before June 16, 2000 for the period beginning June 16, 2000 and ending June
30, 2000.

b. 36 equal installments of $45,457.29, each payable on or before the first day
of each month during the period beginning July 1, 2000 and ending June 30, 2003.

c. 59 equal installments of $47,596.46, each payable on or before the first day
of each month during the period beginning July 1, 2003 and ending May 31, 2008.

Landlord and Tenant acknowledge that the foregoing schedule is based on the
assumption that the Anticipated 4th Floor Commencement Date is the

4th Floor Space Commencement Date. If the 4th Floor Space Commencement Date is
other than the Anticipated 4th Floor Commencement Date, the schedule set forth
above with respect to the payment of any installment(s) of Base Rent for the 4th
Floor Space shall be appropriately adjusted on a per diem basis to reflect the
actual 4th Floor Space Commencement Date and the actual 4th Floor Space
Commencement Date shall be set forth in a confirmation letter to be prepared by
landlord. However, the effective date of any increases or decreases in the Base
Rent rate and the Termination Date shall not be postponed as a result of an
adjustment of the 4h Floor Space Commencement Date as provided above.

2. Tenant shall pay Additional Rent (i.e. Expenses and Taxes) for the 4th Floor
Space on the same terms and conditions set forth in ArticlelV of this Lease,
provided that effective as of the 4th Floor Space Commencement Date, Tenant's
Pro Rata Share shall increase by 9.5940% to account for the addition of the 4th
Floor Space, and the Base Year for purposes of the 4th Floor Space shall be
2000.

3. Notwithstanding any of the foregoing to the contrary, if Tenant takes
possession of the 4th Floor Space prior to the 4th Floor Space Commencement Date
for any reason whatsoever (other than the performance of work in the 4th Floor
Space with landlord's prior approval), such possession shall be subject to all
the terms and conditions of the Lease, and Tenant shall pay Base Rent and
Additional Rent as applicable to the 4th Floor Space to Landlord on a per diem
basis for each day of occupancy prior to the 4th Floor Space Commencement Date.
If Landlord is delayed delivering possession of 4th Floor Space due to the
holdover or f unlawful possession of such space by any party, Landlord shall use
r reasonable efforts to obtain possession of the space. In such event, the
Commencement Date shall be postponed until the date which is 75 days after the
date landlord delivers possession of 4th Floor Space to Tenant free from
occupancy by any party, and the Termination Date, at the option of Landlord, may
be postponed by an equal number of days.

4. Improvements to 4th Floor Space.

Tenant has inspected the 4th Floor Space and agrees to accept the same ''as is"
without any agreements, representations, understandings or obligations on the
part of Landlord to perform any alterations, repairs or improvements. Cost of
Improvements to 4th Floor Space. Any construction, alterations or improvements
made to the 4th Floor Space shall be made by Tenant, at Tenant's sole cost and
expense. Notwithstanding the foregoing, provided Tenant is not in default,
Tenant shall be entitled to receive an improvement allowance (the "4th Floor
Allowance") in an amount not b exceed $192,525.00 to be applied toward the cost
of performing initial construction, alteration or improvement of the 4th Floor
Space. Notwithstanding the foregoing to the contrary, after the date landlord
tenders possession of the 4th Floor Space to Tenant, and provided Tenant is "not
then in default under this Lease, Tenant may apply up to 50% of the 4th Floor
Allowance toward the initial tenant improvement work to be performed In the
Premises. Landlord shall be entitled to deduct , from the 4th Floor Allowance a
construction management fee for Landlord's oversight of the improvement work to
the 4th Floor Space in an amount equal to (i) 2.5% of the 4th Floor Allowance
and (ii) 1.5% of any additional costs incurred by Landlord or Tenant in
connection with the initial construction, alteration or improvement of the 4th
Floor Space which are in excess of the 4th Floor Allowance. In the event the
total cost of the initial improvements to the 4th Floor Space exceeds the 4th
Floor Allowance, Tenant shall pay for such excess upon demand. In the event
Tenant has not utilized any portion of the 4th Floor Allowance prior to July 31,
2001, the entire unused balance of the 4th Floor Allowance, if any, shall accrue
to the sole benefit of Landlord. Landlord shall pay such 4th Floor Allowance
directly to the contractors retained to perform the construction, design or
related improvement work to the 4th Floor Space. Responsibility for Improvements
to 4th Floor Space. Any construction. alterations or improvements to the 4th
Floor Space shall be performed by Tenant using contractors selected by Tenant
and approved by Landlord and shall be governed in all respects by the provisions
of Article IX.C of the Lease and Exhibit D of the Lease attached hereto. In any
and all events. the 4th Floor Space Commencement Date shall not be postponed or
delayed if the initial improvements to the 4th Floor Space are incomplete on the
4" Floor Space Commencement Date for any reason whatsoever. Any delay in the
completion of initial improvements to the 4th Floor Space shall , not subject
Landlord to any liability for any loss or damage resulting therefrom.

C. Parking. Effective as of the 4th Floor Space Commencement Date, Landlord
shall lease to Tenant one reserved parking space in connection with the 4th
Floor Space. Such parking space shall be subject to the terms and conditions of
Exhibit F attached hereto.

RENEWAL OPTION

A. Tenant shall have the right to extend the Term (the "Renewal Option") for one
additional period of 5 years commencing on the day following the Termination
Date of the initial Term and ending on the 51h anniversary of the

Termination Date (the "Renewal Term"), if:

 1. Landlord receives notice of exercise of the Renewal Option ("Initial Renewal
    Notice") not less than 9 full calendar months prior to the expiration of the
    initial Term and not more than 12 full calendar months prior to the
    expiration of the initial Term; and
 2. Tenant is not in default under the Lease beyond any applicable cure periods
    at the time that Tenant delivers its Initial Renewal Notice or at the time
    Tenant delivers its Binding Notice (as hereinafter defined); and
 3. No more than 20% of the Premises in the aggregate is sublet (other than
    pursuant to a Permitted Transfer) at the time that Tenant delivers its
    Initial Renewal Notice or at the time Tenant delivers its Binding Notice;
    and
 4. The Lease has not been assigned (other than pursuant to a Permitted
    Transfer) prior to the date that Tenant delivers its Initial Renewal Notice
    or prior to the date Tenant delivers its Binding Notice; and
 5. Tenant executes and returns the Renewal Amendment (as hereinafter defined)
    within 15 days after its submission to Tenant.

B. The initial Base Rent rate per rentable square foot for the Premises during
the Renewal Term shall equal the Prevailing Market (as hereinafter defined) rate
per rentable square foot for the Premises.

C. Tenant shall pay Additional Rent (i.e. Expenses and Taxes) for the Premises
during the Renewal Term in accordance with Article IV of the Lease.

D. Within 30 days after receipt of Tenant's Initial Renewal Notice, Landlord
shall advise Tenant of the applicable Base Rent rate for the Premises for the
Renewal Term. Tenant, within 15 days after the date on which Landlord advises
Tenant of the applicable Base Rent rate for the Renewal Term, shall either (i)
give Landlord final binding written notice ("Binding Notice") of Tenant's
exercise of its option, or (ii) if Tenant disagrees with Landlord's
determination, provide Landlord with written notice of rejection (the "Rejection
Notice"). If Tenant fails to provide Landlord with ,either a Binding Notice or
Rejection Notice within such 15 day penod, Tenant s Renewal Option shall be null
and void and of no further force and effect. If Tenant provides Landlord with a
Binding Notice, Landlord and Tenant shall enter into the Renewal Amendment upon
the terms and conditions set forth herein. If Tenant provides. Landlord with a
Rejection Notice, Landlord and Tenant shall work together in good faith to agree
upon the Prevailing Market Base Rent rate for the Premises during the Renewal
Term. Upon agreement Tenant shall provide Landlord with Binding Notice and
Landlord and Tenant shall enter into the Renewal Amendment in accordance with
the terms and conditions hereof. Notwithstanding the foregoing, if Landlord and
Tenant are unable to agree upon the Prevailing Market Base Rent rate for the
Premises within 30 days after the date on which Tenant provides Landlord with a
Rejection Notice, Tenant may elect to either rescind its intention to renew, or
subject the process to binding arbitration. Tenant's election to cause the
disagreement to be resolved by arbitration shall be deemed to be its Binding
Notice. If Tenant fails to require arbitration by notice (the "Arbitration
Notice") within 3 days of the expiration of the 30 day period set forth above,
Tenant's right to extend the Lease shall be null and void and of no further
force and effect.

If Tenant provides Landlord with an Arbitration Notice, Landlord and Tenant,
within 10 days after the date of the Arbitration Notice, shall each
simultaneously submit to the other, in a sealed envelope, its good faith
estimate of the Prevailing Market rate (collectively referred to as the
"Estimates"). If the higher of such , Estimates is not more than 105% of the
lower of such Estimates, then Prevailing Market rate shall be the average of the
two Estimates. If the Prevailing Market f rate is not resolved by the exchange
of Estimates, Landlord and Tenant, within 7 days after the exchange of
Estimates, shall each select an appraiser to determine which of the two
Estimates most closely reflects the Prevailing Market rate for the Premises
during the Renewal Term. Each appraiser so selected shall be certified as an MAI
appraiser or as an ASA appraiser and shall have had at least 5 years experience
within the previous 10 years as a real estate appraiser working in the San
Francisco, California financial district area, with working knowledge of current
rental rates and practices. For purposes of this Lease, an "MAI" appraiser means
an individual who holds an MAI designation conferred by, and is l an independent
member of, the American Institute of Real Estate Appraisers (or its successor
organization, or in the event there is no successor organization, the
organization and designation most similar), and an "ASA" appraiser means an
individual who holds the Senior Member designation conferred by, and is an
independent member of, the American Society of Appraisers (or its successor
organization, or, in the event there is no successor organization, the
organization and designation most similar). Upon selection, Landlord's and
Tenant's appraisers shall work together in good faith to agree upon which of the
two Estimates most closely reflects the Prevailing Market rate for the Premises
during the Renewal Term. The Estimate chosen by such appraisers shall be binding
on both Landlord and Tenant as the Base Rent rate for the Premises during the
Renewal Term. If either Landlord or Tenant fails to appoint an appraiser within
. the seven day period referred to above, the appraiser appointed by the other
party shall be the sole appraiser for the purposes hereof. If the two appraisers
cannot agree upon which of the two Estimates most closely reflects the
Prevailing Market within the 20 days after their appointment, then, within 10
days after the expiration of such 20 day period, the 2 appraisers shall select a
third appraiser meeting the aforementioned criteria. Once the third appraiser
has been selected as provided for above, then, as soon thereafter as practicable
but in any case within 14 days, the third appraiser shall make his determination
of which of the two Estimates most closely reflects the Prevailing Market rate
and such Estimate shall be binding on both Landlord and Tenant as the Base Rent
rate for the Premises during the Renewal Term. If the third appraiser believes
that expert , advice would materially assist him, he may retain one or more
qualified persons, to provide such expert advice. The parties shall share
equally in the costs of the third appraiser and of any experts retained by the
third appraiser. Any fees of any appraiser, counselor experts engaged directly
by Landlord or Tenant, however, shall be borne by the party retaining such
appraiser, counselor expert. In the event that the Prevailing Market rate has
not been determined by the commencement date of the Renewal Term, Tenant shall
pay Base Rent upon the terms and conditions in effect for initial Term until
such time as the Prevailing

 

Market rate has been determined. Upon such determination, the Base Rent for the
Premises during the Renewal Term shall be retroactively adjusted to the
commencement of the Renewal Term. If such adjustment results in an underpayment
of Base Rent by Tenant, Tenant shall pay Landlord the amount of such
underpayment within 30 days after the determination thereof. If such adjustment
results in an overpayment of Base Rent by Tenant, Landlord shall credit such
overpayment against the next installment of Base Rent due under the Lease and,
to the extent necessary , any subsequent installments until the entire amount of
such overpayment has been credited against Base Rent.

E. If Tenant is entitled to and properly exercises its Renewal Option, Landlord
shall prepare an amendment (the "Renewal Amendment") to reflect changes in the
Base Rent, Term, Termination Date and other appropriate terms. The Renewal
Amendment shall be:

 1. sent to Tenant within a reasonable time after receipt of the Binding Notice;
    and
 2. executed by Tenant and returned to Landlord in accordance with Paragraph
    A.5. above.

An otherwise valid exercise of the Renewal Option shall, at Landlord's option,
be fully effective whether or not the Renewal Amendment is executed.

F. For purpose hereof, "Prevailing Market" shall mean the arms length fair
market annual rental rate per rentable square foot under renewal leases and
amendments entered into on or about the date on which the Prevailing Market is
being determined hereunder for space comparable to the Premises in the Building
and office buildings comparable to the Building in the downtown San Francisco,
California area. The determination of Prevailing Market shall take into account
any material economic differences between the terms of this Lease and any
comparison lease, such as rent abatements, construction costs and other
concessions and the manner, if any, in which the Landlord under any such lease
is reimbursed for operating expenses and taxes. The determination of Prevailing
Market shall also take into consideration any reasonably anticipated changes in
the Prevailing Market rate from the time such Prevailing Market rate is being
determined and the time such Prevailing Market rate will become effective under
this Lease.

8TH FLOOR EXPANSION OPTION.

A. Tenant shall have the option (the "8th Floor Expansion Option") to lease the
12,835 square feet of rentable area: located on the 8th floor of the Building
and shown cross-hatched on Exhibit A-3 to this Lease (the "8th Floor Expansion
Space") if:

 1. Landlord receives written notice (the "8th Floor Expansion Notice") from
    Tenant of the exercise of its 8th Floor Expansion Option not prior to July
    31' 2001 and not later than September 30, 2001; and
 2. Tenant is not in default under this Lease at the time Landlord receives the
    8th Floor Expansion Notice; and

 1. no part of the premises is sublet (other than pursuant to a Permitted
    Transfer) at the time Landlord receives the 8th Floor Expansion Notice; and
 2. this Lease has not been assigned (other than pursuant to a Permitted
    Transfer) prior to the time Landlord receives the 8th Floor Expansion
    Notice; and
 3. the 8th Floor Expansion Space is intended for the exclusive use of Tenant
    only during the Term; and

     

     

 4. Tenant has not vacated or abandoned the Premises at the time Landlord
    receives the 8th Floor Expansion Notice; and
 5. Tenant executes the 8th Floor Expansion Amendment (as defined in Paragraph
    E, below) and returns the same to Landlord in accordance with Paragraph E
    below.

 

B. Terms for 8th Floor Expansion Space.

The initial annual Base Rent rate per square foot for the 8th Floor Expansion
Space shall be the Fair Market rate (as hereinafter defined) per square foot for
the 8th Floor Expansion Space. Within 30 days after Landlord's receipt of
Tenant's 8th Floor Expansion Notice, Landlord shall advise Tenant of the
applicable Fair Market rate for the 8th Floor Expansion Space (the "Fair Market
Notice"). Tenant, within 15 days after the date on which Landlord advises Tenant
of the applicable Fair Market rate for the 8th Floor Expansion Space, shall
either (i) give Landlord notice accepting Landlord's determination of the Fair
Market rate for the 8th Floor Expansion Space (the "8th Floor Acceptance
Notice"), or (ii) if Tenant disagrees with Landlord's determination, provide
Landlord with written notice of rejection (the "8th Floor Expansion Rejection
Notice"). If Tenant fails to provide Landlord with either an 8th Floor
Acceptance Notice or 8th Floor Expansion Rejection Notice within such 15 day
period, Tenant shall be deemed to have delivered an 8th Floor Expansion
Rejection Notice. If Tenant provides Landlord with an 8th Floor Acceptance
Notice, Landlord and Tenant shall enter into the 8th Floor Expansion Amendment
upon the terms and conditions set forth herein. If Tenant provides Landlord with
an 8th Floor Expansion Rejection Notice (or is deemed to have provided Landlord
with an 8th Floor Expansion Rejection Notice), Landlord and Tenant shall work
together in good faith to agree upon the Fair Market rate for the 8th Floor
Expansion Space. Upon agreement Tenant shall provide Landlord with an 8th Floor
Acceptance Notice and Landlord and Tenant shall enter into the 8th Floor
Expansion Amendment in accordance with the terms and conditions hereof.
Notwithstanding the foregoing, if Tenant provides Land1ord with an 8th Floor
Expansion Rejection Notice (or is deemed to have provided Landlord with an 8th
Floor Expansion Rejection Notice) and Landlord and Tenant are unable to agree
upon the Fair Market rate for the 8th Floor Expansion Space within 30 days after
the date on which Tenant provides (or is deemed to have provided) Landlord with
an 8th Floor Expansion Rejection Notice, Tenant's 8th Floor Expansion Option
shall be null and void and of no further force and effect. Base Rent for the 8th
Floor Expansion Space shall be payable in monthly installments in accordance
with the terms and conditions of Article IV of the Lease; Notwithstanding the
foregoing, if (i) Tenant exercises its 8th Floor Expansion Option, but Tenant
subsequently provides (or is deemed to have provided) Landlord with an 8th Floor
Rejection Notice and Landlord and Tenant are then unable to agree upon the Fair
Market Rate within thirty (30) days after the date of the 8th Floor Rejection
Notice, and (ii) Landlord, within a period of six (6) months after the
expiration of such thirty (30) day period, proposes to lease the entire 8th
Floor Expansion Space to a prospective third-party tenant on terms that are not
substantially the same as those set forth in the Fair Market Notice which
Landlord previously delivered to Tenant (the "New Offer"), then Landlord, prior
to consummating a new lease with such prospective third-party tenant, shall
first offer the entire 8th Floor Expansion Space to Tenant on the terms set
forth in the New Offer. Tenant shall have five (5) days after Tenant's receipt
of the New Offer to accept or reject, in writing, the New Offer. Tenant's
failure to respond within such five (5) day period shall be deemed to be a
rejection of the New Offer. In the event Tenant rejects or is deemed to have
rejected the New Offer, Tenant shall have no further rights with respect to the
8th Floor Expansion Space. In the event Tenant accepts the New Offer, the terms
of the New Offer shall be binding on Landlord and Tenant with respect to the 8th
Floor Expansion Space, and Landlord and Tenant shall comply with all of the
other terms set forth herein with respect to the 8th Floor Expansion Space,
including, but not limited to, the obligation to enter into the 8th Floor
Expansion Amendment as provided below. For purposes hereof, the terr11S offered
to a prospective third-party tenant shall be deemed to be substantially the same
as those set forth in the Fair Market Notice as long as there is no more than a
ten percent (10%) reduction in the "bottom line" cost per rentable square foot
of the 8th Floor Expansion Space to the prospective third-party tenant when
compared with the "bottom line" cost per rentable square foot under the Fair
Market Notice from Landlord, considering all of the economic terms of the both
deals, respectively, including, without limitation, the length of term, the net
rent, any tax or expense escalation or other financial escalation and any
financial concessions.

 

Tenant shall pay Additional Rent (i.e. Expenses and Taxes) for the 8th Floor
Expansion Space on the same terms and conditions set forth in Article IV of the
Lease, provided that Tenant's Pro Rata Share shall I increase appropriately to
account for the addition of the 8th Floor Expansion Space, and further provided
that the Base Year with respect to the 8th Floor Expansion Space shall be
calendar year 2002. In the event Tenant properly exercises its Expansion Option
with respect to the Expansion Space, Tenant may lease from Landlord 3 reserved
parking spaces in the Building parking facilities subject to the terms and
provisions of Exhibit F. Tenant shall pay as Additional Rent in accordance with
Article IV of the Lease, the standard monthly charges for such parking spaces
established from time to time by Landlord for parking.

 

C. The term for the 8th Floor Expansion Space shall commence on the earlier to
occur of (i) 60 days after the date Landlord has tendered possession of the 8th
Floor Expansion Space to Tenant, and (ii) the substantial completion of the
initial tenant improvements for the 8th Floor Expansion Space (as reasonably
determined by Landlord). The Term for the 8th Floor Expansion Space shall
terminate on the Termination Date. Landlord and Tenant agree that as of the date
of this Lease, the anticipated commencement date for the 8th Floor Expansion
Space is October l, 2002 ("Anticipated 8th Floor Commencement Date"). For
purposes hereof, the initial tenant improvements to the 8th Floor Expansion
Space shall be deemed to be substantially complete on the date such work has
been completed, other than any details of construction, mechanical adjustment or
other matter, the noncompletion of which does not materially interfere with
Tenant's use of the 8th Floor Expansion Space. Notwithstanding the foregoing to
the contrary , if Landlord is delayed in delivering possession of the 8th Floor
Expansion Space for any reason, including, but not limited to the holdover or
unlawful possession of the 8th Floor Expansion Space by any party, Landlord
shall use reasonable efforts to obtain possession of the 8th Floor Expansion
Space, and the commencement date for the 8th Floor Expansion Space shall be
postponed until the date Landlord delivers possession of the 8th Floor Expansion
Space to Tenant free from occupancy by any party. Landlord shall use its good
faith, reasonable efforts to ensure that the commencement date for the 8th Floor
Expansion Space is the Anticipated 8th Floor Commencement Date. However, any
such delay in the commencement date of the 8th Floor Expansion Space shall not
subject Landlord to any liability for any loss or damage therefrom. If the
commencement date of the 8th Floor Expansion Space is delayed, the Termination
Date under the Lease shall not be similarly extended. The 8th Floor Expansion
Space shall be considered Premises, subject to all the terms and conditions of
this Lease, except that no allowances, credits, abatements or other concessions
(if any) set forth in this Lease for the initial Premises shall apply to the 8th
Floor Expansion Space. Tenant hereby acknowledges that the 8th Floor Expansion
Space is currently leased by Landlord to Liberty Mutual Insurance Company, a
Massachusetts corporation pursuant to the terms of a lease dated July 8, 1997,
as the same may be amended from time to time (the "8th Floor Expansion Lease").
Notwithstanding anything herein to the contrary, if the 8th Floor Expansion
Lease terminates (or the existing tenant's right to possession is terminated)
prior to its stated expiration date due to a default by the tenant under the 8th
Floor Expansion Lease, Landlord, at its option, may provide Tenant with written
notice of such prior termination (the "Prior Terr11ination Notice"). If

Landlord provides Tenant with a Prior Termination Notice, Tenant shall have the
option to lease the 8th Floor Expansion Space in accordance with the terms and
conditions set forth above, except that the 8th Floor Expansion Notice shall be
due within 30 days after the date of Landlord's Prior Termination Notice and the
commencement date for such 8th Floor Expansion Space shall be the first day of
the month following Landlord's receipt of Tenant's 8th Floor Expansion Notice.
If Tenant does not provide Landlord with an 8th Floor Expansion Notice within
such 30 day period or if Tenant is not entitled to exercise its 8th Floor
Expansion Option due to a violation of one of the conditions set forth in
Section IV.A above, Tenant's 8th Floor Expansion Option shall be deemed to be
null and void and Tenant shall have no further rights to lease the 8th Floor
Expansion Space hereunder.

 D. The 8th Floor Expansion Space (including improvements and personalty , if
    any) shall be accepted by Tenant In its ''as-built'' condition and
    configuration existing on the earlier of the date Tenant takes possession of
    the 8th Floor Expansion Space or as of the date the term for the 8th Floor
    Expansion Space commences. Notwithstanding the foregoing to the contrary,
    Landlord shall tender possession of the 8th Floor Expansion Space to Tenant
    in broom clean condition, free of any prior tenant's personal property.
 E. If Tenant is entitled to and properly exercises the 8th Floor Expansion
    Option, Landlord shall prepare an amendment (the "8th Floor Expansion
    Amendment") to reflect the commencement date of the term for the 8th Floor
    Expansion Space and the changes in Base Rent, Rentable Square Footage of the
    Premises, tenant's Pro Rata Share and other appropriate terms. A copy of the
    8th Floor Expansion Amendment shall be (1) sent to Tenant within a
    reasonable time after receipt of the 8th Floor Expansion Notice, and (2)
    executed by Tenant and returned to Landlord within 15 days thereafter.
 F. For purposes of this 8th Floor Expansion Option, Fair Market rate shall mean
    the annual rental rate per square foot for the 8th Floor Expansion Space in
    its "AS-IS" condition based on comparison space comparable to the 8th Floor
    Expansion Space in the Building and office buildings comparable to the
    Building in the downtown financial district of San Francisco, California,
    under leases and renewal and expansion amendments being entered into at or
    about the time that Fair Market is being determined giving appropriate
    consideration to the length of the term, tenant concessions, brokerage
    commissions, tenant improvement allowances, and the method of allocating
    operating expenses and taxes. Notwithstanding the foregoing, space leased
    under any of the following circumstances shall not be considered to be
    comparable for purposes hereof: (i) the lease term is for less than a five
    year term, (ii) the space is encumbered by the option rights of another
    tenant, or (iii) the space has a lack of windows and/or an awkward or
    unusual shape or configuration. The foregoing is not intended to be an
    exclusive list of space that will not be considered to be comparable.

IV. AUXILIARY COOLING TOWER.

Landlord, upon Landlord's receipt of written request from Tenant, shall provide
Tenant exclusive use of the auxiliary cooling tower facility located on the roof
of the Building (the "Auxiliary Cooling Tower"). In the event Tenant elects to
utilize the Auxiliary Cooling Tower, Tenant shall pay to Landlord as Additional
Rent hereunder, all costs incurred by Landlord relating to the refurbishment of
the Auxiliary Cooling Tower. In addition, Tenant shall pay to Landlord as
Additional Rent hereunder, all costs incurred by Landlord relating to all
on-going maintenance, repair and construction in connection with the Auxiliary
Cooling Tower, and Tenant shall also pay to Landlord as Additional Rent
hereunder, the cost of relocating piping from the main cooling tower of the
Building to the Auxiliary Cooling Tower in order to effectuate Tenant's
exclusive use of

the Auxiliary Cooling Tower.

SIGNAGE.

 A. Tenant Slgn. Landlord and Tenant acknowledge and agree that pursuant to the
    terms of the Existing Lease (as defined in Section VI below), Tenant has
    installed an exterior sign identifying Tenant's presence in the Building
    (the "Tenant Sign"). Tenant specifically agrees that:

 1. Illumination, if any, of the Tenant Sign shall comply with all applicable
    governmental codes, restrictions and regulations;
 2. Tenant will promptly repair and replace light bulbs or filaments, as
    applicable, to assure a constant and uniform illumination, if any, of the
    Tenant Sign, and if Tenant fails to promptly repair or replace Illuminated
    letters, if any, Landlord may do so, and Tenant shall reimburse Landlord's
    costs plus a reasonable administrative fee in doing so; and
 3. Tenant shall be responsible for all costs related to the removal of the
    Tenant Sign and repair of any damage to the Building or Property caused
    thereby.

If, during the Term (and any extensions thereof), (a) Tenant is in default under
the terms of this Lease after notice and the expiration of any applicable cure
periods; or (b) Tenant fails to occupy at least 3 full floors of the Building,
the Tenant's rights to the Tenant Sign granted herein will terminate, and
Landlord may remove any Tenant Sign and repair any damage to the Building caused
thereby at Tenant's sole cost and expense.

New Tenant Sign.
Provided Tenant is not in default beyond the expiration of any applicable cure
periods under the terms of this Lease, Tenant may replace, for Tenant's benefit
and at Tenant's sole cost and expense the Tenant Sign with a new exterior sign
identifying Tenant's presence in the Building (the "New Tenant Sign"). Tenant
shall be responsible for obtaining all permits associated with the New Tenant
Sign required by the City of San Francisco, California or any other governmental
authority with jurisdiction. Following installation of the New Tenant Sign,
Tenant shall remain liable for all costs related to the maintenance and, if
applicable, illumination of the New Tenant Sign. Tenant specifically agrees
that:

 1. illumination, if any, of the New Tenant Sign shall comply with all
    applicable governmental codes, restrictions and regulations;
 2. Tenant will promptly repair and replace light bulbs or filaments, as
    applicable, to assure a constant and uniform illumination, if any, of the
    New Tenant Sign, and if Tenant fails to promptly repair or replace
    illuminated letters, if any, Landlord may do so, and Tenant shall reimburse
    Landlord's costs plus a reasonable administrative fee in doing so; and
 3. Tenant shall be responsible for all costs related to the removal of the New
    Tenant Sign and repair of any damage to the Building or Property caused
    thereby.

Tenant must obtain Landlord's written consent to the New Tenant Sign prior to
its fabrication and installation as well

as approval of the City of San Francisco, California. Landlord reserves the
right to withhold consent to any New Tenant Sign that, in the sole judgment of
Landlord, is not harmonious with the design standards of the Building. To obtain
Landlord's consent, Tenant shall submit design drawings to Landlord, showing the
type and sizes of all lettering; the colors, finishes and types of materials
used; the method of attachment; and (if applicable and Landlord consents) any
provisions for illumination.

If, during the Term (and any extensions thereof), (a) Tenant is in default under
the terms of this Lease after notice and the expiration of any applicable cure
periods; or (b) Tenant fails to occupy at least 3 full floors of the Building,
the Tenant's rights to the New Tenant Sign granted herein will terminate, and
Landlord may remove any New Tenant Sign and repair any damage to the Building
caused thereby at Tenant's sole cost and expense.

V1. EXISTING LEASE.

Landlord and Tenant are currently landlord and tenant under that .certain lease
(the "Existing Lease") dated the 2411 day of January, 1990, as amended, for
approximately 95,323 square feet of space on the 2nd, 5 th, 6th, 7th, 9th, 10th
and 11th floors of the Building. Landlord and Tenant hereby agree that the
Existing Lease shall terminate effective as of the day prior to the Commencement
Date of this Lease (the "Existing Lease Termination Date") as if such date were
originally stated to be the termination date of the

Existing Lease, Tenant shall remain liable for all monthly base rent, additional
rent and other sums coming due under the Existing Lease up to and including the
Existing Lease Termination Date, even if such sums are billed subsequent to the
Existing Lease Termination Date, The termination of the Existing Lease shall be
effective without further documentation, provided that Tenant, upon request from
Landlord, shall enter into an amendment to the Existing Lease to document such
early termination.

IN WITNESS WHEREOF,

Landlord and Tenant have executed this exhibit as of the day and year first
above written.

LANDLORD:

EOP-60 SPEAR, L.L.C., a Delaware limited liability

company

By: EOP Operating Limited Partnership, a Delaware

limited partnership, its sole member

By: Equity Office Properties Trust, a Maryland

real estate investment trust,

its managing general partner

By: /s/ Peter H. Adams

Name: Peter Adams.

Title: Senior Vice President

 

 

TENANT:

INDUS INTERNATIONAL, INC., a California corporation

By: /s/ Henry C. Montgomery

Name: Henry C. Montgomery

Title: Chief Financial Officer

By: /s/ Onagh M Ash

Name: Onagh M. Ash

Title: Executive VP of Sales and Services

 

 

 

 

 

EXHIBIT F

PARKING AGREEMENT

This Exhibit is attached to and made a part of the lease dated as of March 3,
2000, by and between EOP-60 SPEAR, L.L.C., a Delaware limited liability company
("landlord") and INDUS INTERNATIONAL, INC., a California corporation ("Tenant")
for space in the Building located at 60 Spear Street, San Francisco, California.

 1. The parties acknowledge that they are contemporaneously herewith entering
    into a certain lease dated March 3, 2000 (the "Lease") for the premises
    known as Suite Nos. 200, 300, 500, 600, 700, 900, 1000 and 1100 (the
    "Premises") located in the building known as 60 Spear Street (the
    "Building"). In the event of any conflict between the lease and this Parking
    Agreement, the latter shall control.
 2. Landlord hereby grants to Tenant and persons designated by Tenant a license
    to use 6 reserved parking spaces in the Building parking facilities. The
    term of such license shall commence on the Commencement Date under the lease
    and shall continue until the earlier to occur of the Termination Date under
    the lease, or termination of the Lease or Tenant's abandonment of the
    Premises thereunder. During the term of this license, Tenant shall pay
    Landlord the monthly charges established from time to time by Landlord for
    parking in the Building parking facilities, payable in advance, with
    Tenant's payment of monthly Base Rent. The initial charge for such parking
    spaces is $300.00 per reserved parking space, per month. No deductions from
    the monthly charge shall be made for days on which the Building parking
    facilities are not used by Tenant. Tenant may, from time to time request
    additional parking spaces, and if landlord shall provide the same, such
    parking spaces shall be provided and used on a month-to-month basis, and
    otherwise on the foregoing terms and provisions, and at such monthly parking
    charges as landlord shall establish from time to time.
 3. Tenant shall at all times comply with all applicable ordinances, rules,
    regulations, codes, laws, statutes and requirements of all federal, state,
    county and municipal governmental bodies or their subdivisions respecting
    the use of the Building parking facilities. landlord reserves the right to
    adopt, modify and enforce reasonable rules ("Rules") governing the use of
    the Building parking facilities from time to time including any key-card,
    sticker or other identification or entrance system and hours of operation.
    The Rules set forth herein are currently in effect. landlord may refuse to
    permit any person who violates such Rules to park in the Building parking
    facilities, and any violation of the Rules shall subject the car to removal
    from the Building parking facilities.
 4. Tenant may validate visitor parking by such method or methods as landlord
    may approve, at the validation rate from time to time generally applicable
    to visitor parking. Unless specified to the contrary above, the parking
    spaces hereunder shall be provided on a reserved basis. Tenant acknowledges
    that landlord has or may arrange for the Building parking facilities to be
    operated by an independent contractor, not affiliated with landlord. In such
    event, Tenant acknowledges that landlord shall have no liability for claims
    arising through acts or omissions of such independent contractor, if such
    contractor is reputable. Landlord shall have no liability whatsoever for any
    damage to building or any other items located in the Building parking
    facilities, nor for any personal injuries or death arising out of any matter
    relating to the Building parking facilities, and in all events, tenant
    agrees to look first to its insurance carrier and to require that Tenant's
    employees look first to their respective insurance carriers for payment of
    any losses sustained in connection with any use of the Building parking
    facilities. Tenant hereby waives on behalf of its insurance carriers all
    rights of subrogation against landlord or landlord's agents. landlord
    reserves the right to assign specific parking spaces, and to re.serve
    parking spaces for visitors, small cars, handicapped persons and for other
    tenants, guests of tenants or other parties which assignment and reservation
    of spaces may be relocated as determined by landlord from time to time, and
    Tenant and persons designated by Tenant hereunder shall not park in any such
    assigned or reserved parking spaces. landlord also reserves the right to
    close all or any portion of the Building parking facilities in order to make
    repairs or perform maintenance services, or to alter, modify , re-stripe or
    renovate the Building parking facilities, or if required by casualty I
    strike, condemnation, act of God, governmental law or requirement or other
    reason beyond landlord's reasonable control. In such event, landlord shall
    refund any prepaid parking rent hereunder, prorated on a per diem basis. If,
    for any other reason, Tenant or persons properly designated by Tenant, shall
    be denied access to the Building parking facilities, and Tenant or such
    persons shall have complied with this Parking Agreement and this Parking
    Agreement shall be in effect, Landlord's liability shall be limited to such
    parking charges (excluding tickets for parking violations) incurred by
    Tenant or such persons in utilizing alternative parking, which amount
    Landlord shall pay upon presentation or documentation supporting Tenant's
    claims in connection therewith.
 5. If Tenant shall default under this Parking Agreement, Landlord shall have
    the right to remove from the Building parking facilities any vehicles
    hereunder which shall have been involved or shall have been owned or driven
    by parties involved in causing such default, without liability therefore
    whatsoever. In addition, if Tenant shall default under this Parking
    Agreement, Landlord shall have the right to cancel this Parking Agreement on
    10 days' written notice, unless within such 10 day period, Tenant cures such
    default. If Tenant defaults with respect to the same term or condition under
    this Parking Agreement more than three times during any 12 month period, and
    Landlord notifies Tenant thereof promptly after each such default, the next
    default of such term or condition during the succeeding 12 month period,
    shall, at Landlord's election, constitute an incurable default. Such
    cancellation right shall be cumulative and in addition to any other rights
    or remedies available to Landlord at law or equity, or provided under the
    Lease (all of which rights and remedies under the Lease are hereby
    incorporated herein, as though fully set forth). Any default by Tenant under
    the Lease shall be a default under this Parking Agreement, and any default
    under this Parking Agreement shall be a default under the Lease.

RULES

(i) Building parking facilities hours shall be 7:00 a.m. to 8:00 p.m., however,
Tenant shall have access to the parking facilities on a 24 hour basis, 7 days a
week. Tenant shall not store or permit its employees to store any automobiles in
the Building parking facilities without the prior written consent of Landlord.
Except for emergency repairs, Tenant and its employees shall not perform any
work on any automobiles while located in the Building parking facilities, or on
the Property or Project. If it is necessary for Tenant or its employees to leave
an automobile in the Building parking facilities or on the Property or Project
overnight, Tenant shall provide Landlord with prior notice thereof designating
the license plate number and model of such automobile.

(ii) Cars must be parked entirely within the stall lines painted on the floor,
and only small cars may be parked in areas reserved for small cars.

(iii) All directional signs and arrows must be observed. (iv) The speed limit
shall be 5 miles per hour.

(v) Parking spaces reserved for handicapped parking must be used only by
vehicles properly designated.

(vi) Parking is prohibited in all areas not expressly designated for parking,
including without limitation:

 a. Areas not striped for parking
 b. aisles
 c. where "no parking" signs are posted
 d. ramps

(e) loading zones

(vii) Parking stickers, key cards or any other devices or forms of
identification or entry supplied by Landlord shall remain the property of
Landlord. Such devices must be displayed as requested and may not be mutilated
in any manner. The serial number of the parking identification device; may not
be obliterated. Devices are not transferable and any device in the possession of
an unauthorized holder will be void.

(viii) Monthly fees shall be payable in advance prior to the first day of each
month. Failure to do so will automatically cancel parking privileges and a
charge at the prevailing daily parking rate will be due. No deductions or
allowances from the monthly rate will be made for days on which the Building
parking facilities is not used by Tenant or its designees.

(ix) Building parking facilities managers or attendants are not authorized to
make or allow any exceptions to these Rules.

(x) Every parker is required to park and lock his/her own car.

(xi) Loss or theft of parking identification, key cards or other such devices
must be reported to Landlord and to any parking facilities manager immediately.
Any parking devices reported lost or stolen found on any authorized car will be
confiscated and the illegal holder will be subject to prosecution. Lost or
stolen devices found by Tenant or its employees must be reported to the office
of the garage immediately.

(xii) Washing, waxing, cleaning or servicing of any vehicle by the customer
and/or his agents is prohibited. Parking spaces may be used only for parking
automobiles.

(xiii) By signing this Parking Agreement, Tenant agrees to acquaint all persons
to whom Tenant assigns parking spaces with these Rules.

 1. NO LIABILITY. TENANT ACKNOWLEDGES AND AGREES THAT, TO THE FULLEST EXTENT
    PERMITTED BY LAW, LANDLORD SHALL NOT BE RESPONSIBLE FOR ANY LOSS OR DAMAGE
    TO TENANT OR TENANTS PROPERTY (INCLUDING, WITHOUT LIMITATIONS, ANY LOSS OR
    DAMAGE TO TENANTS AUTOMOBILE OR THE CONTENTS THEREOF DUE TO THEFT, VANDALISM
    OR ACCIDENT) ARISING FROM OR RELATED TO TENANTS USE OF THE BUILDING PARKING
    FACILITIES OR EXERCISE OF ANY RIGHTS UNDER THIS PARKING AGREEMENT, WHETHER
    OR NOT SUCH LOSS OR DAMAGE RESUL TS FROM LANDLORD'S ACTIVE NEGLIGENCE OR
    NEGLIGENT OMISSION. THE LIMITATION ON LANDLORD'S LIABILITY UNDER THE
    PRECEDING SENTENCE SHALL NOT APPL Y HOWEVER TO LOSS OR DAMAGE ARISING
    DIRECTLY FROM LANDLORD'S WILLFUL MISCONDUCT.
 2. Release of liability. Without limiting the provisions of Paragraph 6 above,
    Tenant hereby voluntarily releases, discharges, waives and relinquishes any
    and all actions or causes of action for personal injury or property damage
    occurring to Tenant arising as a result of parking in the Building parking
    facilities, or any activities incidental thereto, wherever or however the
    same may occur, and further agrees that Tenant will not prosecute any claim
    for personal injury or property damage against Landlord or any of its
    officers, agents, servants or employees for any said causes of action. It is
    the intention of Tenant by this instrument, to exempt and relieve Landlord
    from liability for personal injury or property damage caused by negligence.

     

 3. The provisions of Article XXI of the Lease are hereby incorporated by
    reference as if fully recited.

Tenant acknowledges that Tenant has read the provisions of this Parking
Agreement, has been fully and completely advised of the potential dangers
incidental to parking In the Building parking facilities and is fully aware of
the legal consequences of signing this instrument.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Exhibit as of the day
and year first above written.

LANDLORD:

EOP-60 SPEAR, L.L.C., a Delaware limited liability

company

By: EOP Operating Limited Partnership, a Delaware

limited partnership, its sole member

By: Equity Office Properties Trust, a Maryland

real estate investment trust,

its managing general partner

By: /s/ Peter H. Adams

Name: Peter Adams.

Title: Senior Vice President

 

 

TENANT:

INDUS INTERNATIONAL, INC., a California corporation

By: /s/ Henry C. Montgomery

Name: Henry C. Montgomery

Title: Chief Financial Officer

By: /s/ Onagh M Ash

Name: Onagh M. Ash

Title: Executive VP of Sales and Services

 

 

 

EXHIBIT G

STORAGE SPACE SUPPLEMENT

THIS STORAGE SPACE SUPPLEMENT ("Agreement") is made as of this 3rd day of March,
2000, by and EOP-60 SPEAR, L.L.C., a Delaware limited liability company
("Landlord") and INDUS INTERNATIONAL, INC., a California corporation ('Tenant").

RECITALS:

Landlord and Tenant entered into a certain lease agreement dated March 3, 2000,
(the "Lease") for approximately 83,308 rentable square feet of office space (the
"Premises") on the 2nd, , 3rd, 6th, 7th, 9 th, 10th 11h floors and the basement
level of the building known as 60 Spear Street located at 60 Spear Street, San
Francisco, California ("Building"). Landlord and Tenant desire to enter into
this Agreement for the purpose of supplementing the Lease as hereinafter set
forth.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
whereof being acknowledged, Landlord and Tenant agree as follows:

 1. Landlord leases to Tenant and Tenant accepts the space containing
    approximately2,345 square feet consisting of approximately (i) 314 square
    feet described as Space No.857, (ii) 214 square feet described as Space
    No.859, (i ii) 325 square feet described as Space No. B60, (iv) 257 square
    feet described as Space No.861, (v) 415 square feet described as Space
    No.862, and (vii) 820 square feet described as Space No.8500 on the basement
    level of the 8uilding, as shown on Exhibit G-1 attached hereto (the "Storage
    Space"), for the term (the "Storage Term") commencing on the Commencement
    Date ("Storage Commencement Date") and ending on the Termination Date
    ("Storage Expiration Date"), unless the Lease or Tenant's right to
    possession of the Premises thereunder terminates sooner, in which case the
    Storage Expiration Date shall be such earlier termination date. The Storage
    Space shall be used by Tenant for the storage of equipment, inventory or
    other non-perishable items normally used in Tenant's business, and for no
    other purpose whatsoever. Tenant agrees to keep the Storage Space in a neat
    and orderly fashion and to keep all stored items in cartons, file cabinets
    or other suitable containers. Landlord shall have the right to designate the
    location within the Storage Space of any items to be placed therein. All
    items stored in the Storage Space shall be elevated at least 6 inches above
    the floor on wooden pallets, and shall be at least 18 ,inches below the
    bottom of all sprinklers located in the ceiling of the Storage Space, if
    any. Tenant shall not store anything in the Storage Space which is unsafe or
    which otherwise may create a hazardous condition, or which may increase
    Landlord's insurance rates, or cause a cancellation or modification of
    Landlord's insurance coverage. Without limitation, Tenant shall not store
    any flammable, combustible or explosive fluid, chemical or substance nor any
    perishable food or beverage products, except with Landlord's prior written
    approval. Landlord reserves the right to adopt and enforce reasonable rules
    and regulations governing the use of the Storage Space from time to time.
    Upon expiration or earlier termination of this Agreement, Tenant shall
    completely vacate and surrender the Storage Space. to Landlord in accordance
    with the terms of this Agreement. Without limitation, Tenant shall leave the
    Storage Space in the condition in which it was delivered to Tenant,
    broom-clean and empty of all personalty and other items placed therein by or
    on behalf of Tenant.
 2. Tenant shall pay rent for the Storage Space ("Storage Base Rent") in 98
    monthly Installments according to the following schedule of Storage Base
    Rent:

Period

Storage Base Rent per Month/Period

4/15/2000 - 4/30/2000

$2,292.95

5/01/2000 - 5/31/2001

$4,299.17

6/01/2001 - 5/31/2002

$4,428.15

6/01/2002 - 5/31/2003

$4,561.00

6/01/2003 - 5/31/2004

$4,697.83

6/01/2004 - 5/31/2005

$4,838.76

6/01/2005 - 5/31/2006

$4,983.92

6/01/2006 - 5/31/2007

$5,133.44

6/01/2007 - 5/31/2008

$5,287.44

Each installment of Storage Base Rent shall be payable in advance on or before
the first day of each month of the Storage Term. Any partial month shall be
appropriately prorated. All Storage Base Rent shall be payable in the same
manner that Base Rent is payable under the Lease.

All terms and, provisions of the Lease shall be applicable to this Agreement,
including, without limitation, Article XIV (Indemnity and Waiver of Claims) and
Article XV (Insurance), except that Landlord need not supply air-cooling, heat,
water, janitorial service, cleaning, :passenger or freight elevator service,
window washing or electricity to the Storage Space and Tenant shall not be
entitled to any work allowances, rent credits, expansion rights or renewal
rights with respect to the Storage Space unless such concessions or rights are
specifically provided for herein with respect to the Storage Space. Landlord
shall not be liable for any theft or damage to any items or materials stored in
the Storage Space, it being understood that Tenant is using the Storage Space at
its own risk. Any default by Tenant under the Lease remaining uncured for a
period extending beyond the expiration of any applicable cure period shall be a
default under this Agreement; any default by Tenant under this Agreement shall
be a default under the Lease; and the provisions of the Lease with respect to
Tenant defaults shall apply to any default by Tenant hereunder. The Storage
Space shall not be included in the determination of Tenant's Pro Rata Share
under the Lease nor shall Tenant be required to pay Expenses in connection with
the Storage Space. Tenant agrees to accept the Storage Space in its condition
and ''as-built'' configuration existing on the earlier of the date Tenant takes
possession of the Storage Space or the Storage Commencement Date. In the event
Tenant subleases more than 4 floors of the Premises (or the equivalent thereof)
In the aggregate, then at any time and from time to time thereafter, Landlord
shall have the right to relocate the Storage Space to a new location which shall
be no smaller than the square footage of the Storage Space. Landlord shall pay
the direct, out-of-pocket, reasonable expenses of such relocation. Storage Base
Rent is deemed Rent under the Lease. If Tenant sublets more than 4 floors of the
Premises (or the equivalent thereof) in the aggregate, or assigns the Lease
(other than pursuant to a Permitted Transfer), Landlord, at its option, may
cancel this Agreement effective as of 30 days after notice to Tenant.
Additionally, notwithstanding anything set forth in ArticleXl1 of the Lease to
the contrary, except pursuant to a Permitted Transfer, Tenant shall not, without
the prior written consent of Landlord, which consent may be withheld in
Landlord's sole discretion, assign, sublease, transfer or encumber the Storage
Space or grant any license, concession or other right of occupancy or permit the
use of the Storage Space by any party other than Tenant. Notwithstanding
anything to the contrary contained In this Agreement, the liability of Landlord
to Tenant hereunder shall be limited to the interest of Landlord in the
Building, and Tenant agrees to look solely to Landlord's interest in the
Building for the recovery of any judgment or award against the Landlord, it
being. intended that Landlord shall not be personally liable for any judgment or
deficiency. Tenant hereby covenants that, prior to the filing of any suit for
direct and proximate damages, it shall give Landlord and all mortgagees whom
Tenant has been notified hold mortgages or deed of trust liens on the property,
Building or Premises notice and reasonable time to cure any alleged default by
Landlord.

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

 

LANDLORD:

EOP-60 SPEAR, L.L.C., a Delaware limited liability

company

By: EOP Operating Limited Partnership, a Delaware

limited partnership, its sole member

By: Equity Office Properties Trust, a Maryland

real estate investment trust,

its managing general partner

By: /s/ Peter H. Adams

Name: Peter Adams.

Title: Senior Vice President

 

 

TENANT:

INDUS INTERNATIONAL, INC., a California corporation

By: /s/ Henry C. Montgomery

Name: Henry C. Montgomery

Title: Chief Financial Officer

By: /s/ Onagh M Ash

Name: Onagh M. Ash

Title: Executive VP of Sales and Services

 

 

 

 

EXHIBIT

H

FORM OF LETTER OF CREDIT

[Name of Financial Institution]

Irrevocable Standby

Letter of Credit

No.

Issuance Date:

Expiration Date:

Applicant:

Beneficiary

EOP-60 SPEAR, L.L.C., a Delaware limited liability company

Two North Riverside Plaza

Suite 2200

Chicago, Illinois 60606

Ladies/Gentlemen:

We hereby establish our Irrevocable Standby Letter of Credit in your favor for
the account of the above referenced Applicant in the amount of Two Million Two
Hundred Fifty Thousand and 00/100 U.S. Dollars ($2,250,000.00) available for
payment at sight by your draft drawn on us when accompanied by the following
documents:

1. An original copy of this Irrevocable Standby Letter of Credit.

2. Beneficiary's dated statement purportedly signed by one of its officers
reading: "This draw in the amount of __________ U.S. Dollars ($__________ )
under your Irrevocable Standby Letter of Credit No. represents funds due and
owing to us as a result of the Applicant's failure to comply with one or more of
the terms of that certain lease by and between _____________ as landlord, and
____________________as tenant."

.It is a condition of this Irrevocable Standby Letter of Credit that it will be
considered automatically renewed for a one year period upon the expiration date
set forth above and upon each anniversary of such date, unless at least sixty
(60) days prior to such expiration date or applicable anniversary thereof, we
notify you in writing by certified mail, return receipt requested, that we elect
not to so renew this Irrevocable Standby Letter of Credit. A copy of any such
notice shall also be sent to: Equity Office Properties Trust, 2 North Riverside
Plaza, Suite 2200, Chicago, IL 60606, Attention: Senior Vice
President-Treasurer. In addition to the foregoing, we understand and agree "that
you shall be entitled to draw upon this Irrevocable Standby Letter of Credit in
accordance with 1 and 2 above in the event that we elect not to renew this
Irrevocable Standby Letter of Credit and, in addition, you provide us with a
dated statement proportedly signed by one of Beneficiary's officers stating that
the Applicant has failed to provide you with an acceptable substitute
irrevocable standby letter of credit in accordance with the terms of the above
referenced lease. We further acknowledge and agree that: (a) upon receipt of the
documentation required herein, we will honor your draws against this Irrevocable
Standby Letter of Credit without inquiry into the accuracy of Beneficiary's
signed statement and regardless of whether Applicant disputes the content of
such statement; (b) this Irrevocable Standby Letter of Credit shall permit
partial draws and, in the event you elect to draw upon less than the full stated
amount hereof, the stated amount of this Irrevocable Standby Letter of Credit
shall be automatically reduced by the amount of such partial draw; and (c) you
shall be entitled to assign your interest in this Irrevocable Standby Letter of
Credit from time to time without our approval and without charge. In the event
of an assignment, we reserve the right to require reasonable evidence of such
assignment as a condition to any draw hereunder.

This Irrevocable Standby Letter of Credit is subject to the Uniform Customs and
Practice for Documentary Credits (1993 revision) ICC Publication No.500.

We hereby engage with you to honor drafts and documents drawn under and in
compliance with the terms of this Irrevocable Standby Letter of Credit.

All communications to us with respect to this Irrevocable Standby Letter of
Credit must be addressed to our office located at
___________________________________ to the attention of
_________________________

Very truly yours,

 

[name]

 

 

[title}