Document:

Exhibit
10.1

 

LEASE AGREEMENT BETWEEN

 

WHMNY REAL ESTATE LIMITED PARTNERSHIP,

 

AS LANDLORD, AND

 

EARTHLINK, INC.,

 

AS TENANT

 

DATED SEPTEMBER 19, 2005

 

PASADENA, CALIFORNIA

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  Definitions and Basic Provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Lease Grant

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Tender of Possession

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Rent

  	
   

  
	
   

  	
  (a)

  	
  Payment

  	
   

  
	
   

  	
  (b)

  	
  Operating Costs; Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Delinquent Payment; Handling Charges

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Intentionally Omitted

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Landlord’s Obligations

  	
   

  
	
   

  	
  (a)

  	
  Landlord’s Maintenance Obligations

  	
   

  
	
   

  	
  (b)

  	
  Landlord’s Right to Perform Tenant’s
  Obligations

  	
   

  
	
   

  	
  (c)

  	
  Tenant’s Right to Perform Landlord’s
  Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Improvements; Alterations; Repairs;
  Maintenance

  	
   

  
	
   

  	
  (a)

  	
  Improvements; Alterations

  	
   

  
	
   

  	
  (b)

  	
  Repairs; Maintenance

  	
   

  
	
   

  	
  (c)

  	
  Performance of Work

  	
   

  
	
   

  	
  (d)

  	
  Mechanic’s Liens

  	
   

  
	
   

  	
  (e)

  	
  Janitorial Services

  	
   

  
	
   

  	
  (f)

  	
  Utilities

  	
   

  
	
   

  	
  (g)

  	
  Security Services

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Use

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Assignment and Subletting

  	
   

  
	
   

  	
  (a)

  	
  Transfers

  	
   

  
	
   

  	
  (b)

  	
  Consent Standards

  	
   

  
	
   

  	
  (c)

  	
  Request for Consent

  	
   

  
	
   

  	
  (d)

  	
  Conditions to Consent

  	
   

  
	
   

  	
  (e)

  	
  Attornment by Subtenants

  	
   

  
	
   

  	
  (f)

  	
  Cancellation

  	
   

  
	
   

  	
  (g)

  	
  Additional Compensation

  	
   

  
	
   

  	
  (h)

  	
  Permitted Transfers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Insurance; Waivers; Subrogation; Indemnity

  	
   

  
	
   

  	
  (a)

  	
  Tenant’s Insurance

  	
   

  
	
   

  	
  (b)

  	
  Landlord’s Insurance

  	
   

  
	
   

  	
  (c)

  	
  No Subrogation; Waiver of Property Claims

  	
   

  
	
   

  	
  (d)

  	
  Indemnity

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  Subordination; Attornment; Notice to
  Landlord’s Mortgagee

  	
   

  
	
   

  	
  (a)

  	
  Subordination

  	
   

  
	
   

  	
  (b)

  	
  Attornment

  	
   

  
	
   

  	
  (c)

  	
  Notice to Landlord’s Mortgagee

  	
   

  
	
   

  	
  (d)

  	
  Landlord’s Mortgagee’s Protection Provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  Rules and Regulations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  Condemnation

  	
   

  
	
   

  	
  (a)

  	
  Total Taking

  	
   

  
	
   

  	
  (b)

  	
  Partial Taking - Tenant’s Rights

  	
   

  
	
   

  	
  (c)

  	
  Partial Taking - Landlord’s Rights

  	
   

  

 

 

	
   

  	
  (d)

  	
  Temporary Taking

  	
   

  
	
   

  	
  (e)

  	
  Award

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  Fire or Other Casualty

  	
   

  
	
   

  	
  (a)

  	
  Repair Estimate

  	
   

  
	
   

  	
  (b)

  	
  Tenant’s Rights

  	
   

  
	
   

  	
  (c)

  	
  Landlord’s Rights

  	
   

  
	
   

  	
  (d)

  	
  Repair Obligation

  	
   

  
	
   

  	
  (e)

  	
  Waiver of Statutory Provisions

  	
   

  
	
   

  	
  (f)

  	
  Abatement of Rent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  Personal Property Taxes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  Events of Default

  	
   

  
	
   

  	
  (a)

  	
  Payment Default

  	
   

  
	
   

  	
  (b)

  	
  Estoppel

  	
   

  
	
   

  	
  (c)

  	
  Insurance

  	
   

  
	
   

  	
  (d)

  	
  Mechanic’s Liens

  	
   

  
	
   

  	
  (e)

  	
  Other Defaults

  	
   

  
	
   

  	
  (f)

  	
  Insolvency

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  Remedies

  	
   

  
	
   

  	
  (a)

  	
  Termination of Lease

  	
   

  
	
   

  	
  (b)

  	
  Enforcement of Lease

  	
   

  
	
   

  	
  (c)

  	
  Sublessees of Tenant

  	
   

  
	
   

  	
  (d)

  	
  Efforts to Relet

  	
   

  
	
   

  	
  (e)

  	
  Suspension of Services

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  Payment by Tenant; Non-Waiver; Cumulative
  Remedies

  	
   

  
	
   

  	
  (a)

  	
  Payment by Tenant

  	
   

  
	
   

  	
  (b)

  	
  No Waiver

  	
   

  
	
   

  	
  (c)

  	
  Cumulative Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  Tenant Acknowledgements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  Surrender of Premises

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  Holding Over

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
  Certain Rights Reserved by Landlord

  	
   

  
	
   

  	
  (a)

  	
  Building Operations

  	
   

  
	
   

  	
  (b)

  	
  Prospective Purchasers and Lenders

  	
   

  
	
   

  	
  (c)

  	
  Prospective Tenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
  Landlord Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
  Miscellaneous

  	
   

  
	
   

  	
  (a)

  	
  Landlord Transfer

  	
   

  
	
   

  	
  (b)

  	
  Landlord’s Liability

  	
   

  
	
   

  	
  (c)

  	
  Force Majeure

  	
   

  
	
   

  	
  (d)

  	
  Brokerage

  	
   

  
	
   

  	
  (e)

  	
  Estoppel Certificates

  	
   

  
	
   

  	
  (f)

  	
  Notices

  	
   

  
	
   

  	
  (g)

  	
  Separability

  	
   

  
	
   

  	
  (h)

  	
  Amendments; Binding Effect; No Electronic
  Records

  	
   

  
	
   

  	
  (i)

  	
  Quiet Enjoyment

  	
   

  
	
   

  	
  (j)

  	
  No Merger

  	
   

  
	
   

  	
  (k)

  	
  No Offer

  	
   

  
	
   

  	
  (1)

  	
  Entire Agreement

  	
   

  
	
   

  	
  (m)

  	
  Waiver of Jury Trial

  	
   

  
	
   

  	
  (n)

  	
  Governing Law

  	
   

  

 

 

	
   

  	
  (o)

  	
  Recording

  	
   

  
	
   

  	
  (p)

  	
  Water or Mold Notification

  	
   

  
	
   

  	
  (q)

  	
  Joint and Several Liability

  	
   

  
	
   

  	
  (r)

  	
  Financial Reports

  	
   

  
	
   

  	
  (s)

  	
  Landlord’s Fees

  	
   

  
	
   

  	
  (t)

  	
  Attorneys’ Fees

  	
   

  
	
   

  	
  (u)

  	
  Telecommunications

  	
   

  
	
   

  	
  (v)

  	
  Confidentiality

  	
   

  
	
   

  	
  (w)

  	
  Authority

  	
   

  
	
   

  	
  (x)

  	
  Hazardous Materials

  	
   

  
	
   

  	
  (y)

  	
  Parking

  	
   

  
	
   

  	
  (z)

  	
  List of Exhibits

  	
   

  
	
   

  	
  (aa)

  	
  Consent and Approval Standards

  	
   

  
	
   

  	
  (bb)

  	
  Damages

  	
   

  
	
   

  	
  (cc)

  	
  Compliance With Laws

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
  Renewal Option

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
  Right to Terminate

  	
   

  

 

 

LIST
OF DEFINED TERMS

 

	
  Additional Rent

  	
   

  
	
  Affiliate

  	
   

  
	
  Base Tax Year

  	
   

  
	
  Basic Lease Information

  	
   

  
	
  Basic Rent

  	
   

  
	
  Building

  	
   

  
	
  Building’s Structure

  	
   

  
	
  Building’s Systems

  	
   

  
	
  Casualty

  	
   

  
	
  Commencement Date

  	
   

  
	
  Complex

  	
   

  
	
  Damage Notice

  	
   

  
	
  Default Rate

  	
   

  
	
  Event of Default

  	
   

  
	
  Expense Stop

  	
   

  
	
  GAAP

  	
   

  
	
  Generator Space

  	
   

  
	
  Hazardous Materials

  	
   

  
	
  including

  	
   

  
	
  Initial Liability
  Insurance Amount

  	
   

  
	
  Land

  	
   

  
	
  Landlord

  	
   

  
	
  Landlord’s Mortgagee

  	
   

  
	
  Law

  	
   

  
	
  Laws

  	
   

  
	
  Lease

  	
   

  
	
  Letter of Credit

  	
   

  
	
  Loss

  	
   

  
	
  Mortgage

  	
   

  
	
  Operating Costs

  	
   

  
	
  Operating Costs and Tax
  Statement

  	
   

  
	
  Parking Area

  	
   

  
	
  Permitted Transfer

  	
   

  
	
  Permitted Transferee

  	
   

  
	
  Permitted Use

  	
   

  
	
  Premises

  	
   

  
	
  Prevailing Rental Rate

  	
   

  
	
  Primary Lease

  	
   

  
	
  Prior Lease

  	
   

  
	
  Project

  	
   

  
	
  Rent

  	
   

  
	
  Repair Period

  	
   

  
	
  Taking

  	
   

  
	
  Tangible Net Worth

  	
   

  
	
  Taxes

  	
   

  
	
  Telecommunications
  Services

  	
   

  
	
  Tenant

  	
   

  
	
  Tenant Party

  	
   

  
	
  Tenant’s Off-Premises
  Equipment

  	
   

  
	
  Tenant’s Proportionate
  Share

  	
   

  
	
  Term

  	
   

  
	
  Transfer

  	
   

  

 

 

LEASE

 

This
Lease Agreement (this “Lease”) is
entered into as of September 19, 2005, between WHMNY REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited
partnership (“Landlord”), and EARTHLINK, INC., a Delaware corporation (“Tenant”).

 

1.             Definitions and Basic
Provisions.  The definitions and basic provisions set
forth in the Basic Lease Information (the “Basic
Lease Information”) executed
by Landlord and Tenant contemporaneously herewith are incorporated herein by
reference for all purposes. 
Additionally, the following terms shall have the following meanings when
used in this Lease: “Affiliate” means
any person or entity which, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
party in question; “Building’s Structure”
means the Building’s exterior walls, roof, elevator shafts,
footings, foundations, structural portions of load-bearing walls, structural
floors and subfloors, and structural columns and beams; “Building’s Systems” means the
Building’s base building HVAC, life-safety, plumbing, electrical, elevator and
mechanical systems, but excludes those portions of such systems which were
installed by Tenant or specifically for Tenant; “including” means including, without limitation; “Laws” means all federal, state, and
local laws, ordinances, rules and regulations, all court orders, governmental
directives, and governmental orders and all interpretations of the foregoing,
and all restrictive covenants affecting the Project, and “Law”
means any of the foregoing; “Generator Space”
means the separate structure housing the electrical generators for
the Building, it being acknowledged that all of the provisions of this Lease
applicable to the Premises shall be applicable to the Generator Space except as
otherwise provided herein; “Tenant’s
Off-Premises Equipment” means any of Tenant’s equipment or other
property that may be located on or about the Project (other than inside the
Premises) including the generators, chiller, UPS system, electrical switch,
batteries and control systems located in the Generator Space, and all related improvements
connecting said equipment to the Building; and “Tenant Party” means any of the following persons: Tenant;
any assignees claiming by, through, or under Tenant; any subtenants claiming
by, through, or under Tenant; and any of their respective agents, contractors,
employees, licensees, guests and invitees.

 

2.             Lease Grant.  Subject to the terms of this Lease, Landlord leases to Tenant, and
Tenant leases from Landlord, the Premises.

 

3.             Tender of Possession.  Tenant is currently in possession of the Premises pursuant to that
certain lease dated September 26, 1996, between Landlord’s predecessor in
interest and Tenant, as amended (the “Prior
Lease”).  As the existing tenant of the Premises, Tenant
shall be deemed to have accepted the Premises in their existing “AS-IS” condition as of the Commencement Date except as
otherwise provided in Exhibit D attached hereto and Tenant acknowledges
that the Premises are suitable for the Permitted Use.  From and after the Commencement Date, Tenant’s
continued occupancy of the Premises shall be governed by the terms of this
Lease.  As of the date hereof, neither
Landlord nor Tenant has, to its knowledge, any claims, counterclaims, set-offs
or defenses against the other arising out of the Prior Lease or in any way
relating thereto or arising out of any other transaction between Landlord and
Tenant.  Landlord and Tenant further
agree that effective as of the Commencement Date, the Prior Lease shall be
deemed terminated and neither Landlord nor Tenant shall have any further rights
or obligations to the other accruing under the Prior Lease after the
Commencement Date, but all obligations under the Prior Lease accruing prior to
the Commencement Date shall survive the termination of the Prior Lease,
including reconciliation of Operating Costs and Taxes for the period January 1,
2005 through June 30, 2005, which reconciliation shall be performed in
accordance with the terms of the Prior Lease.

 

4.             Rent.

 

(a)           Payment.  Tenant shall timely pay to Landlord Rent,
without notice, demand, deduction or set off (except as otherwise expressly
provided herein), by good and sufficient check drawn on a national banking
association at Landlord’s address provided for in this Lease or as otherwise
specified by Landlord and shall be accompanied by all applicable state and
local sales or use taxes.  Basic Rent,
adjusted as herein provided, shall be payable monthly in advance.  Basic Rent shall be payable on the first day
of each month in accordance with the Basic Rent schedule set forth in the
Basic Lease Information.  Payments of
Basic Rent for any fractional calendar month at the end of the Term shall equal
the product of 1/365 of the annual Basic Rent in effect during the partial

 

1

 

month and the number of
days in the partial month and shall be due on the first day of such month.  Tenant shall pay Additional Rent at the same
time and in the same manner as Basic Rent.

 

(b)           Operating Costs; Taxes.  Commencing January 1,
2007, Tenant shall pay to Landlord the amount (per each rentable square foot in
the Premises) (“Additional Rent”) by which the annual Operating Costs
(defined below) per rentable square foot in the Building exceed the Expense
Stop (per rentable square foot in the Building).  Landlord may make a good faith estimate of the
Additional Rent to be due by Tenant for any calendar year or part thereof
during the Term.  During each calendar
year or partial calendar year of the Term (after the base year, if the Expense
Stop is calculated on a base year basis), Tenant shall pay to Landlord, in
advance concurrently with each monthly installment of Basic Rent, an amount
equal to the estimated Additional Rent for such calendar year or part thereof
divided by the number of months therein.  From time to time, Landlord may estimate and
re-estimate the Additional Rent to be due by Tenant and deliver a copy of the
estimate or re-estimate to Tenant, but Landlord may re-estimate Additional Rent
no more than once in any calendar year.  Thereafter,
the monthly installments of Additional Rent payable by Tenant shall be
appropriately adjusted in accordance with the estimations so that, by the end
of the calendar year in question, Tenant shall have paid all of the Additional
Rent as estimated by Landlord.  Any
amounts paid based on such an estimate shall be subject to adjustment as herein
provided when actual Operating Costs are available for each calendar year.

 

(1)           The term “Operating Costs” means all expenses and disbursements
(subject to the limitations set forth below) that Landlord incurs in connection
with the ownership, operation, and maintenance of the Project, determined in
accordance with customary real estate industry accounting practices
consistently applied, including the following costs: (A) wages and
salaries of all on-site employees at or below the grade of building manager or
its equivalent engaged in the operation or maintenance of the Project (together
with Landlord’s reasonable allocation of expenses of off-site employees at or
below the grade of building manager or its equivalent to the extent such
off-site employees perform services in connection with the operation or
maintenance of the Project), including taxes, insurance and benefits relating
thereto; (B) all supplies and materials used in the operation, maintenance,
repair, and replacement of the Project; (C) costs for improvements made to
the Project which, although capital in nature, are expected to reduce the
normal operating costs (including all utility costs) of the Project, as
amortized using the interest rate then announced by Bank of America or, if Bank
of America ceases to exist or ceases to publish such rate, the rate then
announced by the largest (as measured by deposits) chartered bank operating in
California, as its “prime rate” or “reference rate” over the time period
reasonably estimated by Landlord to recover the costs thereof and limited to
the estimated savings in Operating Costs, as well as capital improvements made
in order to comply with any Law hereafter promulgated by any governmental authority
or any interpretation hereafter rendered with respect to any existing Law, as
amortized using the interest rate then announced by Bank of America or, if Bank
of America ceases to exist or ceases to publish such rate, the rate then
announced by the largest (as measured by deposits) chartered bank operating in
California, as its “prime rate” or “reference rate” over the useful economic
life of such improvements as determined in accordance with customary real
estate industry accounting practices consistently applied; (D) insurance
expenses; (E) repairs, replacements, and general maintenance of the
Project; and (F) service, maintenance and management contracts with
independent contractors for the operation, maintenance, management, repair or
replacement of the Project.  If the
Building is part of a multi-building office complex (the “Complex”).  Operating Costs and Taxes
for the Complex may be equitably prorated among the Project and the other
buildings of the Complex, as reasonably determined by Landlord.

 

For purposes of this
Lease, Operating Costs shall not include the following:

 

a.             Costs
of repair or replacement, in excess of commercially reasonable deductibles,
incurred by reason of fire or other casualty that are covered or should have
been covered by insurance had Landlord complied with the insurance requirements
imposed upon Landlord under the terms of this Lease, or exercise of the right
of eminent domain.

 

b.             Leasing
commissions, advertising and other promotional costs and expenses, attorneys’
fees, costs and disbursements and other expenses incurred in negotiating or
executing leases or in resolving disputes with other tenants, other occupants,
or other prospective tenants or occupants of the Building or any portion

 

2

 

thereof,
collecting rents or otherwise enforcing leases of other tenants of the Building
or any portion thereof.

 

c.             Any capital improvement items except as set
forth in Section 4(b)(l)(C) above.

 

d.             Depreciation and amortization of loans.

 

e.             Costs and expenses incurred by Landlord for
which Landlord is actually reimbursed by parties other than tenants of the
Building, including, without limitation, insurance proceeds.

 

f.              Costs and expenses attributable to the
correction of any construction defects in the initial construction of the
Building.

 

g.             Finance and debt service costs for the
Building or any portion thereof and rental under any ground lease or leases for
the Building or any portion thereof.

 

h.             Landlord’s general overhead except as it
relates to the operation, management, maintenance and repair of the Building.

 

i.              Costs and expenses for items and services for
which Tenant reimburses Landlord or pays third persons, to the extent of such
reimbursement or payment.

 

j.              Costs, fines or penalties incurred due to
violations by Landlord of any governmental rule or authority, other than
any such cost, fine or penalty (not otherwise paid by Tenant) incurred due to
any violation caused by any act or omission of Tenant, its employees or agents.

 

k.             Costs of management fees (including
reimbursables and other related costs) to the extent they exceed comparable
fees incurred in comparable office buildings in the area.

 

1.             Costs of wages, salaries, or other
compensation paid to any executive employees of Landlord above the grade of “Project
Manager” or paid to employees of Landlord who are not employed full time, on
site at the Building; provided, however, if an employee of Landlord works on
several buildings, including the Building, the costs and expenses incurred in
connection with such employee shall be equitably allocated among such buildings
by Landlord in accordance with reasonable and consistent criteria.

 

m.            Costs and expenses incurred in leasing air
conditioning systems, elevators or other equipment ordinarily considered to be
of a capital nature.

 

n.             Costs and expenses for the removal or
encapsulation of asbestos or other hazardous or toxic substances brought into
the Building by Landlord in violation of Laws.

 

o.             Any expenses for repairs or maintenance which
are covered by warranties and service contracts, to the extent such maintenance
and repairs are made at no cost to Landlord.

 

p.             Any costs representing any amount paid for
services and materials (including overhead and profit increments) to a related
person, firm, or entity to the extent such amount exceeds the amount that would
be paid for such services or materials at the then existing market rates to an
unrelated person, firm or entity.

 

q.             If any taxes paid by Landlord and previously
included in Operating Costs are refunded, Landlord shall promptly pay Tenant an
amount equal to the amount of such refund (less the reasonable expenses
incurred by Landlord in obtaining such refund) multiplied by Tenant’s share in
effect for the period to which such refund relates.

 

r.              The cost of overtime or other expenses
incurred by Landlord in curing its defaults.

 

3

 

s.             Any amounts payable by Landlord which
constitutes a fine or penalty, including interest or penalties for any late
payment.

 

t.              Repairs, 
alterations, and general maintenance paid by proceeds of insurance and
repairs necessitated by Landlord’s violations of law in effect as of the date
of this Lease.

 

u.             Repairs, alterations, and general maintenance
necessitated by the gross negligence or willful misconduct of Landlord or its
agents, employees, or contractors.

 

v.             Taxes which are not properly allocable to the
site on which the Building is located.

 

w.            Any expenses, costs or accruals related to
portions of the Complex other than the Building, except to the extent such
expenses costs or accruals are properly allocated to the Building.

 

x.             Charitable contributions of Landlord.

 

y.             Any other expense which under customary real
estate industry accounting practices consistently applied would not be
considered to be a normal Operating Cost.

 

z.             If the Expense Stop is calculated on a base
year basis, Operating Costs for the base year only shall not include
market-wide labor-rate increases due to extraordinary circumstances, including
boycotts and strikes; utility rate increases due to extraordinary
circumstances, including conservation surcharges, boycotts, embargos or other
shortages; or amortized costs relating to capital improvements.

 

(2)           Commencing January 1, 2007, Tenant shall
also pay Tenant’s Proportionate Share of any increase in Taxes for each year
and partial year falling within the Term over the Taxes for the Base Tax Year.  Tenant shall pay Tenant’s Proportionate Share
of Taxes in the same manner as provided above for Tenant’s Proportionate Share
of Operating Costs. “Taxes” means
taxes, assessments, and governmental charges or fees whether federal, state,
county or municipal, and whether they be by taxing districts or authorities
presently taxing or by others, subsequently created or otherwise, and any other
taxes and assessments (including non-governmental assessments for common
charges under a restrictive covenant or other private agreement that are not
treated as part of Operating Costs) now or hereafter attributable to the
Project (or its operation), excluding, however, penalties and interest thereon
and federal and state taxes on income (if the present method of taxation
changes so that in lieu of or in addition to the whole or any part of any
Taxes, there is levied on Landlord a capital tax directly on the rents received
therefrom or a franchise tax, assessment, or charge based, in whole or in part,
upon such rents for the Project, then all such taxes, assessments, or charges,
or the part thereof so based, shall be deemed to be included within the term “Taxes”
for purposes hereof).  Taxes shall
include the reasonable actual costs of consultants retained in an effort to
lower taxes and all costs incurred in disputing any taxes or in seeking to lower
the tax valuation of the Project.  For
property tax purposes, Tenant waives all rights to protest or appeal the
appraised value of the Premises, as well as the Project, and all rights to
receive notices of reappraisement.

 

(3)           By April 1 of each calendar year, or as
soon thereafter as practicable, Landlord shall furnish to Tenant a statement of
Operating Costs for the previous year, in each case adjusted as provided in Section 4(b)(4),
and of the Taxes for the previous year (the “Operating
Costs and Tax Statement”).  If Tenant’s estimated payments of
Operating Costs or Taxes under this Section 4(b) for the year covered
by the Operating Costs and Tax Statement exceed Tenant’s Proportionate Share of
such items as indicated in the Operating Costs and Tax Statement, then Landlord
shall promptly credit or reimburse Tenant for such excess; likewise, if Tenant’s
estimated payments of Operating Costs or Taxes under this Section 4(b) for
such year are less than Tenant’s Proportionate Share of such items as indicated
in the Operating Costs and Tax Statement, then Tenant shall promptly pay
Landlord such deficiency.  Notwithstanding
the foregoing, in the event that Landlord fails to deliver to Tenant such
Operating Costs and Tax Statement on or before December 31 of the
following year with respect to Operating Costs and

 

4

 

Taxes
actually billed to Landlord during the previous year, Landlord shall waive its
right to collect any such deficiency in the payment of such Operating Costs and
Taxes.

 

(4)           With respect to any calendar year or partial
calendar year in which the Building is not occupied to the extent of 100% of
the rentable area thereof, the Operating Costs for such period which vary with
the occupancy of the Building shall, for the purposes hereof, be increased to
the amount which would have been incurred had the Building been occupied to the
extent of 100% of the rentable area thereof.

 

(5)           Provided no Event of Default then exists,
after receiving an annual Operating Costs and Tax Statement and giving Landlord
30 days’ prior written notice thereof, Tenant may inspect Landlord’s records
relating to Operating Costs and Taxes for the period of time covered by such
Operating Costs and Tax Statement in accordance with the following provisions.  If Tenant fails to object to the calculation
of Operating Costs and Taxes on an annual Operating Costs and Tax Statement
within 90 days after the statement has been delivered to Tenant, or if Tenant
fails to conclude its inspection within 180 days after the statement has been
delivered to Tenant, then Tenant shall have waived its right to object to the
calculation of Operating Costs and Taxes for the year in question and the
calculation of Operating Costs and Taxes set forth on such statement shall be
final.  Tenant’s inspection shall be
conducted where Landlord maintains its books and records (which shall be in
Southern California), shall not unreasonably interfere with the conduct of
Landlord’s business, and shall be conducted only during business hours reasonably
designated by Landlord.  Landlord will
reasonably cooperate, consistent with customary real estate industry practices
for institutional landlords, with Tenant’s conduct of such audit.  Tenant shall pay the cost of such inspection,
unless the total Operating Costs and Taxes for the period in question is determined
to be overstated by more than 4% in the aggregate, in which case Landlord shall
pay the inspection cost (not to exceed the amount Tenant was overcharged for
the period in question).  Tenant may not
conduct an inspection more than once during any calendar year.  Unless Landlord disputes the results of such
inspection, if such inspection reveals that an error was made in the Operating
Costs or Taxes previously charged to Tenant, then Landlord shall refund to
Tenant any overpayment of any such costs, or Tenant shall pay to Landlord any
underpayment of any such costs, as the case may be, within 30 days after notification
thereof.  If Landlord disputes the
results of such inspection, such dispute shall be submitted to expedited,
binding arbitration in accordance with the rules of the American
Arbitration Association.  Tenant shall
maintain the results of each such inspection confidential and shall not be
permitted to use any third party to perform such inspections, other than an
independent firm of certified public accountants (1) reasonably acceptable to
Landlord, (2) which is not compensated on a contingency fee basis or in
any other manner which is dependent upon the results of such inspection (and
Tenant shall deliver the fee agreement or other similar evidence of such fee
arrangement to Landlord upon request), and (3) which agrees with Landlord
in writing to maintain the results of such inspection confidential.  Nothing in this Section 4(b)(5) shall be
construed to limit, suspend or abate Tenant’s obligation to pay Rent when due,
including Additional Rent.

 

5.             Delinquent Payment; Handling
Charges.  All past due payments required of Landlord or
Tenant hereunder shall bear interest from the date due until paid at the lesser
of ten percent per annum or the maximum lawful rate of interest (such lesser
amount is referred to herein as the “Default
Rate”); additionally,
Landlord, in addition to all other rights and remedies available to it, may
charge Tenant a fee equal to five percent of the delinquent payment to
reimburse Landlord for its cost and inconvenience incurred as a consequence of
Tenant’s delinquency.  In no event,
however, shall the charges permitted under this Section 5 or elsewhere in
this Lease, to the extent they are considered to be interest under applicable
Law, exceed the maximum lawful rate of interest.  Notwithstanding the foregoing, the late fee
referenced above shall not be charged with respect to the first two occurrences
(but not any subsequent occurrence) during any 12-month period that Tenant
fails to make payment when due, until five days after Landlord delivers written
notice of such delinquency to Tenant.

 

6.             Intentionally Omitted.

 

5

 

7.             Landlord’s Obligations.

 

(a)           Landlord’s Maintenance Obligations.  Subject to the provisions of Section 4(b), Landlord’s maintenance
obligations are limited to the repair and replacement of the Building’s
Structure, the Building’s Systems, including the three (3) one hundred
twenty ton HVAC units on the roof of the Building, and maintenance and repair
of the common areas of the Project (including parking areas and landscaping)
and Landlord shall keep the Building’s Structure and common areas of the
Project in good order and repair.  Landlord
shall not be responsible for (1) any such work until Tenant notifies
Landlord of the need therefor in writing or (2) alterations to the
Building’s Structure required by applicable law as a result of the nature of
Tenant’s use of the Premises (which alterations shall be Tenant’s
responsibility).  Further, at such time
as Landlord determines that replacement of the Building roof is required,
Landlord shall replace the roof at Landlord’s sole cost.  Such roof replacement shall be coordinated
with Tenant so as to minimize any disturbance of Tenant’s operations in the
Building.  The Building’s Structure does
not include skylights, windows, glass or plate glass, doors, special fronts, or
office entries, all of which shall be maintained by Tenant.  Subject to the provisions of Section 4(b),
Landlord’s liability for any defects, repairs, replacement or maintenance for
which Landlord is specifically responsible for under this Lease shall be limited
to the cost of performing the work.  Further,
within twelve (12) months following the Commencement Date, Landlord shall, at
its sole cost, slurry seal and restripe the parking area of the Project and
install a handrail along the exterior ramp at the west side of the Building.  Additionally, Landlord shall repair the
defective leveling material on the second floor of the Premises in accordance
with Section 12 of Exhibit D attached hereto.  Notwithstanding anything to the contrary
contained in this Lease, Landlord shall have no obligations with respect to the
maintenance, repair or replacement of Tenant’s Off-Premises Equipment, the
Generator Space or the six (6) twenty ton HVAC units on the roof of the
Building, which shall be the sole responsibility of Tenant.

 

(b)           Landlord’s Right to Perform Tenant’s Obligations.  Landlord may perform Tenant’s maintenance, repair, and replacement
obligations and any other items that are Tenant’s obligation pursuant to Section 8
if Tenant fails to do so after 30 days’ written notice to Tenant.  Tenant shall reimburse Landlord for the cost
incurred in so doing within 30 days after being invoiced therefor.

 

(c)           Tenant’s Right to Perform Landlord’s Obligations.  Tenant may perform Landlord’s maintenance, repair, and replacement
obligations and any other items that are Landlord’s obligation pursuant to this
Section 7 if (1) Landlord fails to commence the performance of such
obligations within thirty (30) days’ following written notice from Tenant to
Landlord, which notice shall set forth in reasonable detail the obligations
which Landlord has failed to perform, and (2) Tenant thereafter again
notifies Landlord of Landlord’s failure to perform, which notice shall indicate
that Tenant shall perform such obligations if Landlord fails to commence the performance
of such obligations within 5 business days following Tenant’s second
notice.  Any such work by Tenant shall be
performed in accordance with the requirements of Section 8(c) of this
Lease.  Landlord shall reimburse Tenant for
the reasonable costs incurred in performing such work within thirty (30) days
after receipt of a payment demand from Tenant, which demand shall include
reasonably detailed documentation of such costs.  If Landlord does not pay such amount within
thirty (30) days after such payment demand, the amount owed shall bear interest
at the Default Rate and, alternatively, Tenant may deduct such amounts owed
from the Basic Rent next due under this Lease until such amounts owed are paid
in full; provided, however, that such deductions shall not at any time be more
than twenty percent (20%) of the total monthly Basic Rent then due hereunder
during any month; provided, further, that such offset right shall not be
applicable and Tenant shall have no right to deduct any amount from Basic Rent
unless the amount owed by Landlord to Tenant for any individual obligation of
Landlord so performed by Tenant exceeds Fifty Thousand Dollars
($50,000.00).  Notwithstanding the
foregoing, if Landlord disputes the amounts claimed due by Tenant, such dispute
shall be submitted to expedited, binding arbitration in accordance with the rules of
the American Arbitration Association, and the prevailing party shall be
entitled to the benefit of Section 25(t) of this Lease.

 

8.             Improvements; Alterations; Repairs;
Maintenance.

 

(a)           Improvements;
Alterations.  Improvements
to the Premises shall be installed at Tenant’s expense only in accordance with
plans and specifications which have been previously submitted to and approved
in writing by Landlord, which approval shall be governed by the provisions set
forth in this Section 8(a).  No
alterations or physical additions in or to the Premises may be made without
Landlord’s prior written consent, which shall not be unreasonably withheld or
delayed; however, Landlord may withhold its consent to any alteration

 

6

 

or
addition that would adversely affect (in the reasonable discretion of Landlord)
the (1) Building’s Structure or the Building’s Systems (including the
Building’s restrooms or mechanical rooms), or (2) exterior appearance of
the Building.  Tenant shall not paint or
install lighting or decorations, signs, window or door lettering, or
advertising media of any type visible from the exterior of the Premises without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld and which installation shall be subject to Tenant obtaining approval
of all applicable governmental authorities and compliance with any covenants,
conditions and restrictions affecting the Project.  All alterations, additions, and improvements
shall be constructed, maintained, and used by Tenant, at its risk and expense,
in accordance with all Laws; Landlord’s consent to or approval of any
alterations, additions or improvements (or the plans therefor) shall not
constitute a representation or warranty by Landlord, nor Landlord’s acceptance,
that the same comply with sound architectural and/or engineering practices or
with all applicable Laws, and Tenant shall be solely responsible for ensuring
all such compliance.  Notwithstanding the
foregoing, Landlord’s consent shall not be required for improvements if (i) such
improvements do not adversely affect the Building’s Structure or the Building’s
Systems, (ii) are not visible from the exterior of the Premises, (iii) the
cost of such improvements does not exceed $50,000.00 in the aggregate; and (iv) Tenant
provides Landlord at least 10 days’ prior written notice of its intent to make
such improvements together with plans and specifications for the same.  All improvements shall comply with Laws and
shall be made in good, workmanlike and lien-free manner.  If (a) Landlord shall fail to grant or
withhold its consent to improvements requiring the consent of Landlord within
15 business days following Tenant’s written request for consent, (b) Tenant
thereafter again requests in writing Landlord’s consent of the proposed
improvements which request shall indicate that Landlord’s consent shall be
deemed granted if Landlord fails to respond, and (c) Landlord fails to
notify Tenant in writing of Landlord’s granting or withholding of consent to
the proposed improvements within five (5) business days following Tenant’s
second request, Landlord’s consent shall be deemed granted.  Landlord shall specify in reasonable detail
the basis for the withholding of its consent to any proposed improvements.  With respect to any proposed improvements,
Tenant may, concurrently with Tenant’s request for approval or Tenant’s notice
to Landlord of Tenant’s intent to make such improvements, request that Landlord
notify Tenant if such improvements are to be removed by Tenant at the
expiration or earlier termination of this Lease.  Tenant’s notice to Landlord shall indicate
that Landlord’s failure to notify Tenant within fifteen (15) business days
following Tenant’s request as to whether such improvements are to be so removed
shall be deemed Landlord’s agreement that such improvements need not be so
removed, and if Landlord fails to so notify Tenant within said fifteen (15)
business day period, Landlord shall be deemed to have agreed that such
improvements need not be so removed.

 

(b)           Repairs; Maintenance.  Subject to Landlord’s obligations under Section 7(a) above,
Tenant shall maintain the Premises in a clean, safe, and operable condition,
and shall not permit or allow to remain any waste or damage to any portion of
the Premises.  Additionally, Tenant, at
its sole expense, shall repair, replace and maintain in good condition and in
accordance with all Laws and the equipment manufacturer’s suggested service
programs, all portions of the Premises, Tenant’s Off-Premises Equipment, the
Generator Space and all areas, improvements and systems exclusively serving the
Premises.  Tenant shall repair or
replace, subject to Landlord’s direction and supervision, any damage to the
Building caused by a Tenant Party.  If
Tenant fails to make such repairs or replacements within 15 days after written
notice from Landlord specifying such repair or replacement in reasonable
detail, then Landlord may make the same at Tenant’s cost.  If any such damage occurs outside of the Premises,
then Landlord may elect to repair such damage at Tenant’s expense, rather than
having Tenant repair such damage.  The
reasonable, actual cost of all maintenance, repair or replacement work
performed by Landlord under this Section 8 shall be paid by Tenant to
Landlord within 30 days after Landlord has invoiced Tenant therefor.  Except as otherwise expressly provided in this
Lease, Tenant hereby waives and releases its right to make repairs at Landlord’s
expense under Sections 1941 and 1942 of the California Civil Code or under any
similar law, statute or ordinance now or hereafter in effect.

 

(c)           Performance of Work.  All work described in this Section 8
shall be performed only by Landlord or by contractors and subcontractors
reasonably approved in writing by Landlord.  Tenant shall cause all contractors and
subcontractors to procure and maintain insurance coverage naming Landlord,
Landlord’s property management company and Landlord’s asset management company
as additional insureds against such risks, in such amounts, and with such
companies as Landlord may reasonably require. 
Landlord may post on and about the Premises notices of
non-responsibility pursuant to applicable Laws with respect to such work.  All such work shall be performed in accordance
with all Laws and in a good and workmanlike manner so as not to damage the
Building (including the Building’s Structure and the Building’s Systems).  All such work which may affect the Building’s
Structure or the Building’s Systems must be approved by the Building’s engineer
of record, at Tenant’s expense and,

 

7

 

at
Landlord’s election, must be performed by a licensed contractor mutually
acceptable to Landlord and Tenant.  All
work affecting the roof of the Building must be performed by a licensed roofing
contractor mutually acceptable to Landlord and Tenant and no such work will be
permitted if it would void or reduce the warranty on the roof.

 

(d)           Mechanic’s Liens.  All work performed, materials furnished, or
obligations incurred by or at the request of a Tenant Party shall be deemed
authorized and ordered by Tenant only, and Tenant shall not permit any mechanic’s
liens to be filed against the Premises or the Project in connection
therewith.  Upon completion of any such
work, Tenant shall deliver to Landlord final lien waivers from all contractors,
subcontractors and materialmen who performed such work.  If such a lien is filed, then Tenant shall,
within thirty days after Landlord has delivered notice of the filing thereof to
Tenant (or such earlier time period as may be necessary to prevent the
forfeiture of the Premises, the Project or any interest of Landlord therein or
the imposition of a civil or criminal fine with respect thereto), either (1) pay
the amount of the lien and cause the lien to be released of record, or (2) diligently
contest such lien and deliver to Landlord a bond or other security reasonably
satisfactory to Landlord.  If Tenant
fails to timely take either such action, then Landlord may pay the lien claim,
and any amounts so paid, including expenses and interest, shall be paid by
Tenant to Landlord within ten days after Landlord has invoiced Tenant therefor.
 Landlord and Tenant acknowledge and
agree that their relationship is and shall be solely that of “landlord-tenant”
(thereby excluding a relationship of “owner-contractor,” “owner-agent” or other
similar relationships).  Accordingly, all
materialmen, contractors, artisans, mechanics, laborers and any other persons
now or hereafter contracting with Tenant, any contractor or subcontractor of
Tenant or any other Tenant Party for the furnishing of any labor, services,
materials, supplies or equipment with respect to any portion of the Premises,
at any time from the date hereof until the end of the Term, are hereby charged
with notice that they look exclusively to Tenant to obtain payment for
same.  Landlord may record, at its
election, notices of non-responsibility pursuant to California Civil Code Section 3094
in connection with any work performed by Tenant.  Nothing herein shall be deemed a consent by
Landlord to any liens being placed upon the Premises, the Project or Landlord’s
interest therein due to any work performed by or for Tenant or deemed to give
any contractor or subcontractor or materialman any right or interest in any
funds held by Landlord to reimburse Tenant for any portion of the cost of such
work.  Tenant shall defend, indemnify and
hold harmless Landlord and its agents and representatives from and against all
claims, demands, causes of action, suits, judgments, damages and expenses
(including attorneys’ fees) in any way arising from or relating to the failure
by any Tenant Party to pay for any work performed or materials furnished.  This indemnity provision shall survive
termination or expiration of this Lease.

 

(e)           Janitorial Services.  Tenant, at its sole expense, shall provide
its own janitorial services to the Premises and shall maintain the Premises in
a clean and safe condition.  Tenant shall
store all trash and garbage within the area and in receptacles designated from
time to time by Landlord and shall, at its sole expense, arrange for the
regular pickup of such trash and garbage at times, and pursuant to reasonable
regulations, established by Landlord from time to time.  If Tenant fails to provide janitorial
services to the Premises or trash removal services in compliance with the
foregoing, Landlord, in addition to any other rights and remedies available to
it, may provide such services, and Tenant shall pay to Landlord the cost
thereof within thirty days after Landlord delivers to Tenant an invoice
therefor.

 

(f)            Utilities.  Tenant shall provide and pay for all water, gas,
electricity, heat, telephone, sewer, and other utilities and services used at
the Project, together with all taxes, penalties, surcharges, and maintenance
charges pertaining thereto.  Landlord
shall not be liable for any interruption or failure of utility service to the
Premises, and in no event shall the unavailability of such services or any
other services (or any diminution in the quality thereof) render Landlord
liable to Tenant or any entity claiming through Tenant for any damages caused thereby,
constitute a constructive eviction of Tenant, constitute a breach of any
implied warranty by Landlord, or entitle Tenant to any abatement of Tenant’s
obligations hereunder.  Tenant shall not
install any electrical equipment requiring voltage in excess of Building
capacity.  The use of electricity in the
Premises shall not exceed the capacity of existing feeders and risers to or
wiring in the Premises.  Any risers or
wiring required to meet Tenant’s electrical requirements shall, upon Tenant’s
written request, be installed by Landlord, at Tenant’s cost, if, in Landlord’s reasonable
judgment, the same shall not cause permanent damage to the Building, cause or
create a dangerous or hazardous condition, or entail excessive or unreasonable
alterations, repairs, or expenses. 
Tenant shall not use machines or equipment in the Premises which
overload any utility.

 

(g)           Security Services.  Tenant acknowledges that the Rent payable to
Landlord hereunder does not include the cost of guard service or other security
measures, and that Landlord shall have no obligation

 

8

 

whatsoever
to provide any such service or measures. 
Tenant assumes all responsibility for the protection of Tenant, its
agents and invitees.

 

9.             Use.  Tenant
shall occupy and use the Premises only for the Permitted Use and shall comply
with all Laws relating to the use, condition, access to, and occupancy of the
Premises and will not commit waste, overload the Building’s Structure or the
Building’s Systems or subject the Premises to use that would damage the Premises.  The Premises shall not be used for any use
which is disreputable, creates extraordinary fire hazards, or results in an
increased rate of insurance on the Building or its contents, or for the storage
of any Hazardous Materials except in a manner and quantity necessary for the
ordinary performance of Tenant’s business and then only in compliance with all
Laws.  In no event shall the Generator
Space be used for human occupancy other than entry for service or maintenance
thereof.  If, because of a Tenant Party’s
acts or because Tenant vacates the Premises, the rate of insurance on the
Building or its contents increases, then Tenant shall pay to Landlord the
amount of such increase on demand, and acceptance of such payment shall not
waive any of Landlord’s other rights.  If
Tenant vacates the Premises, Tenant shall, at its sole cost and expense,
provide reasonable security for the Project and shall be responsible for any
additional costs incurred by Landlord in connection with such vacation by
Tenant.  Tenant shall conduct its
business and control each other Tenant Party so as not to create any nuisance.  Except as the result of an emergency, a
requirement by Law, or a specific provision set forth in this Lease, Tenant and
Tenant Parties shall have access to the Building twenty-four (24) hours per
day, seven (7) days per week during the Term.

 

10.          Assignment and Subletting.

 

(a)           Transfers.  Except as provided in Section 10(h),
Tenant shall not, without the prior written consent of Landlord, (1) assign,
transfer, or encumber this Lease or any estate or interest herein, whether directly
or by operation of law, (2) permit any other entity to become Tenant
hereunder by merger, consolidation, or other reorganization, (3) if Tenant
is an entity other than a corporation whose stock is publicly traded, permit
the transfer of an ownership interest in Tenant so as to result in a change in
the current control of Tenant, (4) sublet any portion of the Premises, (5) grant
any license, concession, or other right of occupancy of any portion of the Premises,
or (6) permit the use of the Premises by any parties other than Tenant
(any of the events listed in Section 10(a)(l) through 10(a)(6) being
a “Transfer”).

 

(b)           Consent Standards.  Landlord shall not unreasonably withhold,
condition or delay its consent to any assignment or subletting of the Premises,
provided that the proposed transferee (1) is creditworthy, (2) has a
good reputation in the business community, (3) will use the Premises for
general office use or the Permitted Use and will not use the Premises in any
manner that would conflict with any exclusive use agreement or other similar
agreement entered into by Landlord with any other tenant of the Complex, (4) will
not use the Premises or Project in a manner that would materially increase the
pedestrian or vehicular traffic to the Premises or Project, (5) is not a
governmental entity, or subdivision or agency thereof, (6) is not another
occupant of the Complex unless Landlord is unable to meet the space
requirements of such occupant in the Complex, and (7) is not a person or
entity with whom Landlord is then, or has been within the six-month period
prior to the time Tenant seeks to enter into such assignment or subletting,
negotiating to lease space in the Complex or any Affiliate of any such person
or entity unless Landlord is unable to meet the space requirements of such
person or entity in the Complex; otherwise, Landlord may withhold its consent
in its sole discretion.  Additionally,
Landlord may withhold its consent in its sole discretion to any proposed
Transfer if any Event of Default by Tenant then exists.

 

(c)           Request for Consent.  If Tenant requests Landlord’s consent to a
Transfer, then, at least 15 business days prior to the effective date of the
proposed Transfer, Tenant shall provide Landlord with a written description of
all terms and conditions of the proposed Transfer, copies of the proposed
documentation, and the following information about the proposed transferee:
name and address; reasonably satisfactory information about its business and
business history; its proposed use of the Premises; banking, financial, and
other credit information; and general references sufficient to enable Landlord
to determine the proposed transferee’s creditworthiness and character.  Concurrently with Tenant’s notice of any
request for consent to a Transfer, Tenant shall pay to Landlord a fee of $500
to defray Landlord’s expenses in reviewing such request, and Tenant shall also
reimburse Landlord immediately upon request for its reasonable attorneys’ fees
incurred in connection with considering any request for consent to a Transfer,
provided however, if no extensive negotiation is required in connection with
such proposed Transfer, the maximum amount that Tenant shall be required to
reimburse Landlord shall not exceed $2,000.

 

9

 

(d)          Conditions to Consent.  If Landlord consents to a proposed Transfer, then the proposed transferee
shall deliver to Landlord a written agreement whereby it expressly assumes
Tenant’s obligations hereunder; however, any transferee of less than all of the
space in the Premises shall be liable only for obligations under this Lease
that are properly allocable to the space subject to the Transfer for the period
of the Transfer.  No Transfer shall
release Tenant from its obligations under this Lease, but rather Tenant and its
transferee shall be jointly and severally liable therefor.  Landlord’s consent to any Transfer shall not
waive Landlord’s rights as to any subsequent Transfers.  If an Event of Default occurs while the
Premises or any part thereof are subject to a Transfer, then Landlord, in
addition to its other remedies, may collect directly from such transferee all
rents becoming due to Tenant and apply such rents against Rent.  Tenant authorizes its transferees to make
payments of rent directly to Landlord upon receipt of notice from Landlord to
do so following the occurrence of an Event of Default hereunder.  Tenant shall be responsible for the cost of
any demising walls or other improvements necessitated by a proposed subletting
or assignment.

 

(e)           Attornment by Subtenants.  Each sublease by Tenant hereunder shall be subject and subordinate to
this Lease and to the matters to which this Lease is or shall be subordinate,
and each subtenant by entering into a sublease is deemed to have agreed that in
the event of termination, re-entry or dispossession by Landlord under this
Lease, Landlord may, at its option, take over all of the right, title and
interest of Tenant, as sublandlord, under such sublease, and such subtenant
shall, at Landlord’s option, attorn to Landlord pursuant to the then executory
provisions of such sublease, except that Landlord shall not be (1) liable
for any previous act or omission of Tenant under such sublease, (2) subject
to any counterclaim, offset or defense that such subtenant might have against
Tenant, (3) bound by any previous modification of such sublease not
approved by Landlord in writing or by any rent or additional rent or advance
rent which such subtenant might have paid for more than the current month to
Tenant, and all such rent shall remain due and owing, notwithstanding such
advance payment, (4) bound by any security or advance rental deposit made
by such subtenant which is not delivered or paid over to Landlord and with
respect to which such subtenant shall look solely to Tenant for refund or
reimbursement, or (5) obligated to perform any work in the subleased space
or to prepare it for occupancy, and in connection with such attornment, the subtenant
shall execute and deliver to Landlord any instruments Landlord may reasonably
request to evidence and confirm such attornment.  Each subtenant or licensee of Tenant shall be
deemed, automatically upon and as a condition of its occupying or using the
Premises or any part thereof, to have agreed to be bound by the terms and conditions
set forth in this Section 10(e).  The
provisions of this Section 10(e) shall be self-operative, and no
further instrument shall be required to give effect to this provision.

 

(f)           Cancellation.  Landlord may, within thirty (30) days after
submission of Tenant’s written request for Landlord’s consent to an assignment
or subletting of all or substantially all of the Premises, cancel this Lease as
of the date the proposed Transfer is to be effective.  If Landlord cancels this Lease, then this
Lease shall cease and Tenant shall pay to Landlord all Rent accrued through the
cancellation date.  Thereafter, Landlord
may lease the Premises to the prospective transferee (or to any other person)
without liability to Tenant.  Notwithstanding
the foregoing, if Landlord provides written notice to Tenant of Landlord’s
election to cancel this Lease as provided above, Tenant may rescind such
proposed assignment or subletting by notifying Landlord in writing within three
business days following Landlord’s written cancellation notice.

 

(g)          Additional Compensation.  Tenant shall pay to Landlord, immediately upon receipt thereof, fifty
percent of the excess of (1) all compensation received by Tenant for a
Transfer less the actual out-of- pocket costs reasonably incurred by Tenant
with unaffiliated third parties (i.e., brokerage commissions, attorneys’ fees,
marketing expenses and tenant finish work) in connection with such Transfer
(such costs shall be amortized on a straight-line basis over the term of the
Transfer in question) over (2) the Rent allocable to the portion of the Premises
covered thereby.

 

(h)          Permitted Transfers.  Notwithstanding Section 10(a), Tenant may Transfer all or part of
its interest in this Lease or all or part of the Premises (a “Permitted Transfer”) to
the following types of entities (a “Permitted
Transferee”) without
the written consent of Landlord:

 

(1)           an Affiliate of Tenant;

 

(2)           any corporation, limited partnership, limited
liability partnership, limited liability company or other business entity in
which or with which Tenant, or its corporate successors or

 

10

 

assigns,
is merged or consolidated, in accordance with applicable statutory provisions
governing merger and consolidation of business entities, so long as (A) Tenant’s
obligations hereunder are assumed by the entity surviving such merger or created
by such consolidation; and (B) the Tangible Net Worth of the surviving or
created entity is not less than the Tangible Net Worth of Tenant as of the date
hereof, or Tenant has delivered to Landlord, as collateral for the full and
faithful performance by Tenant of all of its obligations under this Lease, an
irrevocable and unconditional letter of credit in form and from a bank
reasonably acceptable to Landlord in an amount equal to the lesser of (i) the
sum of (x) the unamortized portion (as of the date of such Transfer) of the “Construction
Allowance” (as defined in Exhibit D) and leasing commissions paid to
Landlord’s broker and Tenant’s broker, amortized on a straight-line basis over
the Lease Term, plus (y) twelve (12) months of Basic Rent at the rate as of the
date of such Transfer, or (ii) an amount equal to twenty-five percent
(25%) of the total Basic Rent payable under this Lease from the date of such
Transfer through the expiration of the Term, together with an agreement
regarding such letter of credit on terms and conditions acceptable to Landlord,
including that such letter of credit shall be maintained in effect at the
required amount through the date which is thirty (30) days following the
expiration of the Term of this Lease (collectively, the “Letter of Credit”), which
Letter of Credit shall be delivered to Landlord within sixty (60) days
following the date of such Transfer; or

 

(3)           any
corporation, limited partnership, limited liability partnership, limited
liability company or other business entity acquiring all or substantially all
of Tenant’s assets if such entity’s Tangible Net Worth after such acquisition
is not less than the Tangible Net Worth of Tenant as of the date hereof or
within sixty (60) days following the date of such Transfer, Tenant has
delivered the Letter of Credit.

 

Tenant
shall promptly notify Landlord of any such Permitted Transfer.  Tenant shall remain liable for the performance
of all of the obligations of Tenant hereunder, or if Tenant no longer exists
because of a merger, consolidation, or acquisition, the surviving or acquiring
entity shall expressly assume in writing the obligations of Tenant hereunder.  Additionally, the Permitted Transferee shall
comply with all of the terms and conditions of this Lease, including the
Permitted Use, and the use of the Premises by the Permitted Transferee may not
violate any other agreements affecting the Premises, the Project or the
Complex, or Landlord.  No later than 30
days after the effective date of any Permitted Transfer, Tenant agrees to
furnish Landlord with (A) copies of the instrument effecting any of the
foregoing Transfers, (B) documentation establishing Tenant’s satisfaction
of the requirements set forth above applicable to any such Transfer, and (C) evidence
of insurance as required under this Lease with respect to the Permitted
Transferee.  The occurrence of a
Permitted Transfer shall not waive Landlord’s rights as to any subsequent
Transfers. “Tangible Net Worth” means
the excess of total assets over total liabilities, in each case as determined
in accordance with generally accepted accounting principles consistently
applied (“GAAP”), excluding, however,
from the determination of total assets all assets which would be classified as
intangible assets under GAAP including goodwill, licenses, patents, trademarks,
trade names, copyrights, and franchises.  Any subsequent Transfer by a Permitted
Transferee shall be subject to the terms of this Section 10.

 

11.          Insurance; Waivers; Subrogation;
Indemnity.

 

(a)           Tenant’s Insurance.  Effective as of the Commencement Date, 
and continuing throughout the Term, Tenant shall maintain the following
insurance policies: (A) commercial general liability insurance in amounts
of $5,000,000 per occurrence or, following the expiration of the initial Term,
such other amounts as Landlord may from time to time reasonably require (and,
if the use and occupancy of the Premises include any activity or matter that is
or may be excluded from coverage under a commercial general liability policy
[e.g., the sale, service or consumption of alcoholic beverages], Tenant shall
obtain such endorsements to the commercial general liability policy or
otherwise obtain insurance to insure all liability arising from such activity
or matter [including liquor liability, if applicable] in such amounts as
Landlord may reasonably require), insuring Tenant, Landlord, Landlord’s
property management company, Landlord’s asset management company and, if
requested in writing by Landlord, Landlord’s Mortgagee, against all liability
for injury to or death of a person or persons or damage to property arising
from the use and occupancy of the Premises and (without implying any consent by
Landlord to the installation thereof) the installation, operation, maintenance,
repair or removal of Tenant’s Off-Premises Equipment (it being further
acknowledged that Tenant’s obligation to carry such liability insurance may be
satisfied by coverage under an excess liability policy or policies provided
that the coverage afforded Landlord will not be reduced or diminished and the
requirements set forth in this Lease are otherwise

 

11

 

satisfied
by such excess liability policy or policies), (B) insurance covering the
replacement cost of the Generator Space and all alterations and improvements
and betterments in the Premises, naming Landlord and Landlord’s Mortgagee as
additional loss payees as their interests may appear, (C) insurance
covering the replacement cost of all furniture, trade fixtures and personal
property (including property of Tenant or others) in the Premises or otherwise
placed in the Project by or on behalf of a Tenant Party (including Tenant’s
Off-Premises Equipment), (D) contractual liability insurance sufficient to
cover Tenant’s indemnity obligations hereunder (but only if such contractual
liability insurance is not already included in Tenant’s commercial general
liability insurance policy), (E) worker’s compensation insurance, and (F) business
interruption insurance in an amount reasonably acceptable to Landlord.  Tenant’s insurance shall provide primary
coverage to Landlord when any policy issued to Landlord provides duplicate or
similar coverage, and in such circumstance Landlord’s policy will be excess
over Tenant’s policy.  Prior to execution
of this Lease, Tenant shall furnish to Landlord certificates of such insurance
and such other evidence satisfactory to Landlord of the maintenance of all
insurance coverages required hereunder, and at least 15 days prior to each
renewal of said insurance, and Tenant shall obtain a written obligation on the
part of each insurance company to notify Landlord at least 30 days before
cancellation or a material change of any such insurance policies.  All such insurance policies shall be in form,
and issued by companies with an A.M.  Best rating of A-:VII or better, reasonably
satisfactory to Landlord.  If Tenant
fails to comply with the foregoing insurance requirements or to deliver to
Landlord the certificates or evidence of coverage required herein, Landlord, in
addition to any other remedy available pursuant to this Lease or otherwise,
may, but shall not be obligated to, obtain such insurance and Tenant shall pay
to Landlord on demand the premium costs thereof.

 

(b)          Landlord’s Insurance.  Throughout the Term of this Lease, Landlord
shall maintain, as a minimum, the following insurance policies: (1) property
insurance for the Building’s replacement value (excluding property required to
be insured by Tenant), less a commercially-reasonable deductible if Landlord so
chooses, and (2) commercial general liability insurance in an amount of
not less than $3,000,000.  Landlord may, but
is not obligated to, maintain such other insurance and additional coverages as
it may deem necessary.  The cost of all
insurance carried by Landlord with respect to the Project shall be included in
Operating Costs.  The foregoing insurance
policies and any other insurance carried by Landlord shall be for the sole
benefit of Landlord and under Landlord’s sole control, and Tenant shall have no
right or claim to any proceeds thereof or any other rights thereunder.

 

(c)           No
Subrogation;
Waiver of Property Claims.  Landlord and Tenant each waives any claim it
might have against the other for any damage to or theft, destruction, loss, or
loss of use of any property, to the extent the same is insured against under
any insurance policy of the types described in this Section 11 that covers
the Project, the Premises, Landlord’s or Tenant’s fixtures, personal property,
leasehold improvements, or business, or is required to be insured against under
the terms hereof, regardless of whether the negligence of the other party caused
such Loss (defined below).  Each party
shall cause its insurance carrier to endorse all applicable policies waiving
the carrier’s rights of recovery under subrogation or otherwise against the
other party.  Notwithstanding any provision
in this Lease to the contrary, Landlord, its agents, employees and contractors
shall not be liable to Tenant or to any party claiming by, through or under
Tenant for (and Tenant hereby releases Landlord and its servants, agents,
contractors, employees and invitees from any claim or responsibility for) any
damage to or destruction, loss, or loss of use, or theft of any property of any
Tenant Party located in or about the Project, caused by casualty, theft, fire,
third parties or any other matter or cause, regardless of whether the
negligence of any party caused such loss in whole or in part.  Tenant acknowledges that Landlord shall not
carry insurance on, and shall not be responsible for damage to, any property of
any Tenant Party located in or about the Project.

 

(d)          Indemnity.  Subject to Section 11(c), Tenant shall
defend, indemnify, and hold harmless Landlord and its representatives and
agents from and against all claims, demands, liabilities, causes of action,
suits, judgments, damages, and expenses (including reasonable attorneys’ fees)
arising from any injury to or death of any person or the damage to or theft,
destruction, loss, or loss of use of, any property or inconvenience (a “Loss”) (1) occurring in or on the Project (other
than within the Premises) to the extent caused by the negligence or willful misconduct
of any Tenant Parties, (2) occurring in the Premises, or (3) arising
out of the installation, operation, maintenance, repair or removal of any
property of any Tenant Party located in or about the Project, including the Generator
Space and Tenant’s Off-Premises Equipment. 
Subject to Section 11(c), Landlord shall defend, indemnify, and
hold harmless Tenant and its agents from and against all claims, demands,
liabilities, causes of action, suits, judgments, damages, and expenses
(including reasonable attorneys’ fees) for any Loss arising from any occurrence
in or on the Project’s common areas to the extent caused by the negligence or
willful misconduct of

 

12

 

Landlord
or its agents.  The indemnities set forth
in this Lease shall survive termination or expiration of this Lease and shall
not terminate or be waived, diminished or affected in any manner by any
abatement or apportionment of Rent under any provision of this Lease.  If any proceeding is filed for which indemnity
is required hereunder, the indemnifying party agrees, upon request therefor, to
defend the indemnified party in such proceeding at its sole cost utilizing
counsel satisfactory to the indemnified party.

 

12.          Subordination; Attornment; Notice to
Landlord’s Mortgagee.

 

(a)           Subordination.  This Lease shall be subordinate to any deed
of trust, mortgage, or other security instrument (each, a “Mortgage”), or any ground
lease, master lease, or primary lease (each, a “Primary Lease”),
that now or hereafter covers all or any part of the Premises (the mortgagee
under any such Mortgage, beneficiary under any such deed of trust, or the
lessor under any such Primary Lease is referred to herein as a “Landlord’s Mortgagee”), provided,
however, the subordination of Tenant’s rights hereunder to any future Landlord’s
Mortgagee shall be conditioned on Tenant receiving a subordination,
non-disturbance and attornment agreement in a commercially reasonable form from
such Landlord’s Mortgagee.  Any Landlord’s
Mortgagee may elect, at any time, unilaterally, to make this Lease superior to
its Mortgage, Primary Lease, or other interest in the Premises by so notifying
Tenant in writing.  Tenant shall execute
and return to Landlord (or such other party designated by Landlord) within ten
days after written request therefor such documentation, in recordable form if required,
as a Landlord’s Mortgagee may reasonably request to evidence the subordination
of this Lease to such Landlord’s Mortgagee’s Mortgage or Primary Lease
(including a subordination, non-disturbance and attornment agreement) or, if
the Landlord’s Mortgagee so elects, the subordination of such Landlord’s
Mortgagee’s Mortgage or Primary Lease to this Lease.  Landlord shall use commercially reasonable
efforts to deliver to Tenant a subordination, non-disturbance and attornment
agreement from any existing Landlord’s Mortgagee on such Landlord’s Mortgagee’s
standard form.

 

(b)           Attornment.  Tenant shall attorn to any party succeeding to Landlord’s interest in
the Premises, whether by purchase, foreclosure, deed in lieu of foreclosure,
power of sale, termination of lease, or otherwise, upon such party’s request,
and shall execute such agreements confirming such attornment as such party may
reasonably request.

 

(c)           Notice to Landlord’s
Mortgagee.  Tenant shall not seek to enforce any remedy
it may have for any default on the part of Landlord without first giving
written notice by certified mail, return receipt requested, specifying the
default in reasonable detail, to any Landlord’s Mortgagee whose address has
been given to Tenant, and affording such Landlord’s Mortgagee a reasonable
opportunity to perform Landlord’s obligations hereunder, provided that Tenant
may take such actions as are reasonably necessary to keep its data center functioning.

 

(d)           Landlord’s Mortgagee’s
Protection Provisions.  If Landlord’s Mortgagee shall succeed to the
interest of Landlord under this Lease, Landlord’s Mortgagee shall not be: (1) liable
for any act or omission of any prior lessor (including Landlord); (2) bound
by any rent or additional rent or advance rent which Tenant might have paid for
more than the current month to any prior lessor (including Landlord), and all
such rent shall remain due and owing, notwithstanding such advance payment; (3) bound
by any security or advance rental deposit made by Tenant which is not delivered
or paid over to Landlord’s Mortgagee; (4) bound by any termination,
amendment or modification of this Lease made without Landlord’s Mortgagee’s
consent and written approval, except for those terminations, amendments and
modifications permitted to be made by Landlord without Landlord’s Mortgagee’s consent
pursuant to the terms of the loan documents between Landlord and Landlord’s
Mortgagee; (5) subject to the defenses which Tenant might have against any
prior lessor (including Landlord); and (6) subject to the offsets which Tenant
might have against any prior lessor (including Landlord) except for those
offset rights which (A) are expressly provided in this Lease, and (B) Tenant
has provided written notice to Landlord’s Mortgagee and provided Landlord’s
Mortgagee a reasonable opportunity to cure the event giving rise to such offset
event, provided however, the foregoing provisions shall not be applicable to
any existing Landlord’s Mortgagee except to the extent such Landlord’s
Mortgagee so elects.  Landlord’s
Mortgagee shall have no liability or responsibility under or pursuant to the
terms of this Lease or otherwise for any matters first arising after it ceases
to own an interest in the Project.  Nothing
in this Lease shall be construed to require Landlord’s Mortgagee to see to the
application of the proceeds of any loan, and Tenant’s agreements set forth
herein shall not be impaired on account of any modification of the documents
evidencing and securing any loan.

 

13

 

13.          Rules and Regulations.  Tenant shall comply with the rules and regulations of the Project
which are attached hereto as Exhibit C.  Landlord may, from time to time, change such rules and
regulations for the safety, care, or cleanliness of the Project and related
facilities, provided that such changes will not materially interfere with Tenant’s
use of the Premises, do not conflict with the terms and provisions of this
Lease, are communicated to Tenant at a reasonable time prior to their becoming
effective, and are enforced by Landlord in a non-discriminatory manner.  Tenant shall be responsible for the compliance
with such rules and regulations by each Tenant Party.

 

14.          Condemnation.

 

(a)           Total Taking.  If the entire Premises are taken by right of
eminent domain or conveyed in lieu thereof (a “Taking”), this
Lease shall terminate as of the date of the Taking.

 

(b)           Partial Taking - Tenant’s Rights.  If any part of the Building becomes subject to a Taking and such Taking
will prevent Tenant from conducting on a permanent basis its business in the
Premises in a manner reasonably comparable to that conducted immediately before
such Taking, then Tenant may terminate this Lease as of the date of such Taking
by giving written notice to Landlord within 30 days after the Taking, and Basic
Rent and Additional Rent shall be apportioned as of the date of such Taking.  If Tenant does not terminate this Lease, then
Rent shall be abated on a reasonable basis as to that portion of the Premises
rendered untenantable by the Taking.

 

(c)           Partial Taking - Landlord’s Rights.  If any material portion, but less than all, of the Building becomes
subject to a Taking, or if Landlord is required to pay any of the proceeds
arising from a material Taking to a Landlord’s Mortgagee, then Landlord may
terminate this Lease by delivering written notice thereof to Tenant within 30
days after such Taking, and Basic Rent and Additional Rent shall be apportioned
as of the date of such Taking.  If
Landlord does not so terminate this Lease, then this Lease will continue, and
Landlord shall promptly and diligently proceed to restore the remaining
portions of the Premises, together with the remaining portions of the common
areas, to substantially the same condition as prior to the Taking, all to the
extent of proceeds received, but if any portion of the Premises has been taken,
Rent shall abate as provided in the last sentence of Section 14(b).  Tenant hereby waives any and all rights it
might otherwise have pursuant to Section 1265.130 of the California Code
of Civil Procedures.

 

(d)           Temporary Taking.  If all or any portion of the Premises becomes
subject to a Taking for a limited period of time, this Lease shall remain in
full force and effect and Tenant shall continue to perform all of the terms,
conditions and covenants of this Lease, including the payment of Basic Rent and
all other amounts required hereunder.  If
any such temporary Taking terminates prior to the expiration of the Term,
Tenant shall restore the Premises as nearly as possible to the condition prior
to such temporary Taking, at Tenant’s sole cost and expense.  Landlord shall be entitled to receive the
entire award for any such temporary Taking, except that Tenant shall be
entitled to receive the portion of such award which (1) compensates Tenant
for its loss of use of the Premises within the Term and (2) reimburses
Tenant for the reasonable out-of-pocket costs actually incurred by Tenant to
restore the Premises as required by this Section.

 

(e)           Award.  If any Taking occurs, then Landlord shall
receive the entire award or other compensation for the Land, the Building, and
other improvements taken; however, Tenant may separately pursue a claim (to the
extent it will not reduce Landlord’s award) against the condemnor for the value
of Tenant’s personal property which Tenant is entitled to remove under this
Lease, moving costs and loss of business.

 

15.          Fire or Other Casualty.

 

(a)           Repair Estimate.  If the Premises are damaged by fire or other casualty (a “Casualty”).  Landlord shall, within 60
days after such Casualty, deliver to Tenant a good faith estimate (the “Damage Notice”) of the time needed to repair the
damage caused by such Casualty.

 

(b)           Tenant’s Rights.  If a material portion of the Premises is damaged by Casualty such that Tenant,
in its reasonable judgment, is prevented from conducting its business in the
Premises in a manner reasonably comparable to that conducted immediately before
such Casualty and Landlord estimates that the damage caused

 

14

 

thereby
cannot be repaired within 180 days after the commencement of repairs (the “Repair Period”), then
Tenant may terminate this Lease by delivering written notice to Landlord of its
election to terminate within 30 days after the Damage Notice has been delivered
to Tenant.

 

(c)           Landlord’s Rights.  If a Casualty damages the Premises and (1) Landlord
estimates that the damage to the Premises cannot be repaired within the Repair
Period, (2) the damage to the Premises exceeds 50% of the replacement cost
thereof (excluding foundations and footings), as estimated by Landlord, and
such damage occurs during the last two years of the Term, (3) regardless
of the extent of damage to the Premises, the damage is not fully covered by
Landlord’s insurance policies required hereunder, or (4) Landlord is
required to pay any insurance proceeds arising out of the Casualty to a
Landlord’s Mortgagee, then Landlord may terminate this Lease by giving written
notice of its election to terminate within 30 days after the Damage Notice has
been delivered to Tenant.

 

(d)           Repair Obligation.  If neither party elects to terminate this
Lease following a Casualty, then Landlord shall, within a reasonable time after
such Casualty, begin to repair the Premises and shall proceed with reasonable
diligence to restore the Premises to substantially the same condition as they
existed immediately before such Casualty; however, Landlord shall not be
required to repair or replace the Generator Space, Tenant’s Off-Premises Equipment
or any alterations or betterments within the Premises (which shall be promptly
and with due diligence repaired and restored by Tenant at Tenant’s sole cost
and expense) or any furniture, equipment, trade fixtures or personal property
of Tenant or others in the Premises, and Landlord’s obligation to repair or
restore the Premises shall be limited to the extent of the insurance proceeds
actually received by Landlord for the Casualty in question.  If this Lease is terminated under the
provisions of this Section 15, Landlord shall be entitled to the full proceeds
of the insurance policies providing coverage for the Generator Space and all
alterations, improvements and betterments in the Premises (and, if Tenant has
failed to maintain insurance on such items as required by this Lease, Tenant
shall pay Landlord an amount equal to the proceeds Landlord would have received
had Tenant maintained insurance on such items as required by this Lease), but
Landlord shall not be entitled to receive any insurance proceeds related to
Tenant’s furniture, trade fixtures, equipment or personal property or Tenant’s
Off-Premises Equipment.

 

(e)           Waiver of Statutory Provisions.  The provisions of this Lease, including this Section 15,
constitute an express agreement between Landlord and Tenant with respect to any
and all damage to, or destruction of, all or any part of the Premises and any
statute or regulation of the State of California, including, without
limitation, Sections 1932(2) and 1933(4) of the California Civil Code,
with respect to any rights or obligations concerning damage or destruction in
the absence of an express agreement between the parties, and any other statute
or regulation, now or hereafter in effect, shall have no application to this
Lease or any damage or destruction to all or any part of the Premises.

 

(f)            Abatement of Rent.  If the Premises are damaged by Casualty, Rent
for the portion of the Premises rendered untenantable by the damage shall be
abated on a reasonable basis from the date of damage until the completion of
Landlord’s repairs (or until the date of termination of this Lease by Landlord
or Tenant as provided above, as the case may be), unless a Tenant Party caused
such damage, in which case, Tenant shall continue to pay Rent without abatement
to the extent Landlord does not have rent loss insurance coverage.

 

16.          Personal Property Taxes.  Tenant shall be liable for all taxes levied or assessed against
personal property, furniture, or fixtures placed by Tenant in the Premises or
in or on the Project.  If any taxes for
which Tenant is liable are levied or assessed against Landlord or Landlord’s
property and Landlord elects to pay the same, or if the assessed value of
Landlord’s property is increased by inclusion of such personal property, furniture
or fixtures and Landlord elects to pay the taxes based on such increase, then
Tenant shall pay to Landlord, within 30 days following written request
therefor, the part of such taxes for which Tenant is primarily liable
hereunder; however, Landlord shall not pay such amount if Tenant notifies
Landlord that it will contest the validity or amount of such taxes before
Landlord makes such payment, and thereafter diligently proceeds with such
contest in accordance with Law and if the non-payment thereof does not pose a
threat of loss or seizure of the Project or interest of Landlord therein or
impose any fee or penalty against Landlord.

 

15

 

17.          Events of Default.  Each of the following occurrences shall be an
“Event of Default”:

 

(a)           Payment Default.  Tenant’s failure to pay Rent within five days
after Landlord has delivered written notice to Tenant that the same is due (any
such notice shall be in lieu of, and not in addition to, any notice required
under California Code of Civil Procedure Section 1161 or any similar or
successor law); however, an Event of Default shall occur hereunder without any
obligation of Landlord to give any notice if Tenant fails to pay Rent when due
and, during the 12-month interval preceding such failure, Landlord has given
Tenant written notice of failure to pay Rent on two or more occasions;

 

(b)           Estoppel.  Tenant fails to provide any estoppel
certificate after Landlord’s written request therefor pursuant to Section 25(e) and
such failure shall continue for five days after Landlord’s second written
notice thereof to Tenant;

 

(c)           Insurance.  Tenant fails to procure, maintain and deliver
to Landlord evidence of the insurance policies and coverages as required under Section 11(a);

 

(d)           Mechanic’s Liens.  Tenant fails to pay and release of record, or
diligently contest and bond around, any mechanic’s lien filed against the
Premises or the Project for any work performed, materials furnished, or
obligation incurred by or at the request of Tenant, within the time and in the
manner required by Section 8(d);

 

(e)           Other Defaults.  Tenant’s failure to perform, comply with, or
observe any other agreement or obligation of Tenant under this Lease and the
continuance of such failure for a period of more than 30 days after Landlord
has delivered to Tenant written notice thereof, provided however, if such
default is susceptible of cure but such cure cannot be accomplished with
reasonable diligence within said 30 day period and if Tenant commences to cure
such default promptly after receipt of notice thereof from Landlord and
thereafter diligently prosecutes the curing of such default, such 30 day period
shall be extended for such reasonable period as may be necessary to cure such
default (any such notice shall be in lieu of, and not in addition to, any
notice required under California Code of Civil Procedure Section 1161 or
any similar or successor law); and

 

(f)            Insolvency.  The filing of a petition by or against Tenant
(the term “Tenant” shall include, for the purpose of this Section 17(f),
any guarantor of Tenant’s obligations hereunder) (1) in any bankruptcy or
other insolvency proceeding; (2) seeking any relief under any state or
federal debtor relief law; (3) for the appointment of a liquidator or
receiver for all or substantially all of Tenant’s property or for Tenant’s
interest in this Lease; (4) for the reorganization or modification of
Tenant’s capital structure; or (5) in any assignment for the benefit of
creditors proceeding; however, if such a petition is filed against Tenant, then
such filing shall not be an Event of Default unless Tenant fails to have the
proceedings initiated by such petition dismissed within 90 days after the
filing thereof.

 

18.          Remedies.  Upon any Event of Default, Landlord may, in addition to all other
rights and remedies afforded Landlord hereunder or by law or equity, take any
one or more of the following actions, each and all of which shall be cumulative
and non-exclusive, without notice or demand whatsoever:

 

(a)           Termination
of Lease.  Terminate this
Lease, in which event Tenant shall immediately surrender the Premises to
Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any
other remedy which it may have for possession or arrearages in Rent, enter upon
and take possession of the Premises and expel or remove Tenant and any other
person who may be occupying the Premises or any part thereof, without being
liable for prosecution or any claim or damages therefor; and Landlord may
recover from Tenant the following:

 

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

 

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

 

16

 

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

 

(4)           Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant’s failure to
perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, specifically including but not
limited to, brokerage commissions and advertising expenses incurred, expenses
of remodeling the Premises or any portion thereof for a new tenant, whether for
the same or a different use, and any special concessions made to obtain a new
tenant; and

 

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

 

The
term “Rent” as used in this
Section 18(a) shall be deemed to be and to mean all sums of every
nature required to be paid by Tenant pursuant to the terms of this Lease,
whether to Landlord or to others.  As
used in Section 18(a)(1) and 18(a)(2) above, the “worth at the time
of award” shall be computed by allowing interest at the Interest Rate set forth
in Section 5 of this Lease, but in no case greater than the maximum amount
of such interest permitted by Law.  As
used in Section 18(a)(3) above, the “worth at the time of award” 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%).

 

(b)           Enforcement of Lease.  Landlord shall have the remedy described in
California Civil Code Section 1951.4 (lessor may continue lease in effect
after lessee’s breach and abandonment and recover rent as it becomes due, if
lessee has the right to sublet or assign, subject only to reasonable limitations).  Accordingly, Landlord may, from time to time,
without terminating this Lease, enforce all of its rights and remedies under
this Lease, including the right to recover all rent as it becomes due.

 

(c)           Sublessees of Tenant.  Whether or not Landlord elects to terminate
this Lease on account of any default by Tenant, as set forth in this Section 18,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by Tenant
and affecting the Premises or may, in Landlord’s sole discretion, succeed to
Tenant’s interest in such subleases, licenses, concessions or
arrangements.  In the event of Landlord’s
election to succeed to Tenant’s interest in any such subleases, licenses,
concessions or arrangements, Tenant shall, as of the date of notice by Landlord
of such election, have no further right to or interest in the rent or other
consideration receivable thereunder.

 

(d)           Efforts to Relet.  For the purposes of this Section 18,
Tenant’s right to possession shall not be deemed to have been terminated by
efforts of Landlord to relet the Premises, by its acts of maintenance or preservation
with respect to the Premises, or by appointment of a receiver to protect
Landlord’s interests hereunder.  The
foregoing enumeration is not exhaustive, but merely illustrative of acts which
may be performed by Landlord without terminating Tenant’s right to possession.

 

(e)           Suspension of Services.  Suspend any services required to be provided by Landlord hereunder
without being liable for any claim for damages therefor.

 

19.          Payment by Tenant; Non-Waiver;
Cumulative Remedies.

 

(a)           Payment by
Tenant.  Upon any Event of
Default, Tenant shall pay to Landlord all reasonable actual costs incurred by
Landlord (including court costs and reasonable attorneys’ fees and expenses) in
(1) obtaining possession of the Premises, (2) removing and storing
Tenant’s or any other occupant’s property, (3) repairing, restoring,
altering, remodeling, or otherwise putting the Premises into condition
acceptable to a new tenant, reasonable wear and tear and casualty excepted (4) performing
Tenant’s obligations which Tenant failed to perform, and (5) enforcing, or
advising Landlord of, its rights, remedies, and recourses arising out of the
default.  To the full extent permitted by
law, Landlord and Tenant agree the federal and state courts of the state in
which the

 

17

 

Premises
are located shall have exclusive jurisdiction over any matter relating to or
arising from this Lease and the parties’ rights and obligations under this
Lease.

 

(b)           No
Waiver.  Landlord’s acceptance of Rent following an Event of Default shall not waive
Landlord’s rights regarding such Event of Default.  No waiver by Landlord of any violation or
breach of any of the terms contained herein shall waive Landlord’s rights
regarding any future violation of such term.  Landlord’s acceptance of any partial payment
of Rent shall not waive Landlord’s rights with regard to the remaining portion
of the Rent that is due, regardless of any endorsement or other statement on
any instrument delivered in payment of Rent or any writing delivered in
connection therewith; accordingly, Landlord’s acceptance of a partial payment
of Rent shall not constitute an accord and satisfaction of the full amount of
the Rent that is due.

 

(c)           Cumulative Remedies.  Any and all remedies set forth in this Lease:
(1) shall be in addition to any and all other remedies Landlord may have
at law or in equity, (2) shall be cumulative, and (3) may be pursued
successively or concurrently as Landlord may elect.  The exercise of any remedy by Landlord shall
not be deemed an election of remedies or preclude Landlord from exercising any
other remedies in the future.  Additionally,
subject to the express terms of this Lease, Tenant shall defend, indemnify and
hold harmless Landlord, Landlord’s Mortgagee and their respective
representatives and agents from and against all claims, demands, liabilities,
causes of action, suits, judgments, damages and expenses (including reasonable
attorneys’ fees) arising from Tenant’s failure to perform its obligations under
this Lease.

 

20.          Tenant Acknowledgements.  Due to the existence of a landfill in the area of the Project, Tenant acknowledges
that a methane venting system has been installed at the Project and/or on
adjacent properties.  In addition,
Southern California Edison (SCE) power lines are in the general geographic area
of the Project and Tenant acknowledges that there may be interference with
Tenant’s equipment or other impacts caused by electric and magnetic fields
which may be induced by the SCE power lines.  Information with respect to the possible
effects of power lines on equipment and human health is available from SCE.  Tenant’s acceptance of the Premises in its “AS-IS”
condition shall include all matters relating to the methane venting system and
the SCE power lines.

 

21.          Surrender of Premises.  No act by Landlord shall be deemed an acceptance of a surrender of the Premises,
and no agreement to accept a surrender of the Premises shall be valid unless it
is in writing and signed by Landlord.  At
the expiration or termination of this Lease, Tenant shall deliver to Landlord
the Premises with all improvements located therein in good repair and
condition, free of Hazardous Materials placed on the Premises by Tenant or
Tenant Parties, broom-clean, reasonable wear and tear (and condemnation and
Casualty damage not caused by Tenant, as to which Sections 14 and 15 shall control)
excepted, and shall deliver to Landlord all keys to the Premises.  Provided that Tenant has performed all of its
obligations hereunder, Tenant may remove all trade fixtures, furniture, and
personal property placed in the Premises or elsewhere in the Building by Tenant
which are not permanently affixed (but Tenant may not remove any wiring or
cabling or the Off-Premises Equipment unless and to the extent Landlord
requires such removal).  Additionally, at
Landlord’s option, Tenant shall remove such alterations, additions,
improvements, trade fixtures, personal property, equipment, wiring, conduits,
cabling, and furniture (including Tenant’s Off-Premises Equipment) as Landlord
may request; however, Tenant shall not be required to remove any addition or improvement
to the Premises in place as of the date of this Lease (other than wiring or
cabling which Landlord may require to be removed), and Tenant shall not be
required to remove any future improvement to the Premises if Landlord has
specifically agreed in writing that the improvement or addition in question
need not be removed.  In addition, Tenant
shall have no obligation to remove the Generator Space, which shall be
delivered to Landlord in the condition required by this Lease for the surrender
of the Premises, but notwithstanding anything to the contrary contained herein,
Tenant may be required to remove other equipment and/or property located in or
serving the Generator Space, including without limitation, batteries and
transformers.  Tenant shall repair all
damage caused by such removal.  All items
not so removed shall, at Landlord’s option, be deemed to have been abandoned by
Tenant and may be appropriated, sold, stored, destroyed, or otherwise disposed of
by Landlord without notice to Tenant and without any obligation to account for
such items.  The provisions of this Section 21
shall survive the end of the Term.

 

22.          Holding Over.  If Tenant fails to vacate the Premises at the
end of the Term in the condition required by this Lease, then Tenant shall be a
tenant at sufferance and, in addition to all other damages and remedies to
which Landlord may be entitled for such holding over, (a) Tenant shall
pay, in addition to the other Rent, Basic Rent equal to 150% of the Rent
payable during the last month of the Term, provided however, if Tenant gives

 

18

 

Landlord
at least 120 days notice prior to the expiration of the Term of its intent to
hold over, Tenant shall pay for the first 60 days of such holding over, in
addition to the other Rent and without limiting Landlord’s rights and remedies
in the event of such holding over, Basic Rent equal to 125% of the Basic Rent
payable during the last month of the Term, and (b) Tenant shall otherwise
continue to be subject to all of Tenant’s obligations under this Lease.  The provisions of this Section 22 shall
not be deemed to limit or constitute a waiver of any other rights or remedies
of Landlord provided herein or at law.  If
Tenant fails to surrender the Premises upon the termination or expiration of
this Lease, in addition to any other liabilities to Landlord accruing
therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless
from all loss, costs (including reasonable attorneys’ fees) and liability
resulting from such failure, including any claims made by any succeeding tenant
founded upon such failure to surrender, and any lost profits to Landlord
resulting therefrom.

 

23.          Certain Rights Reserved by
Landlord.  Provided that the exercise of such rights
does not unreasonably interfere with Tenant’s occupancy of the Premises,
Landlord shall have the following rights during Tenant’s normal business hours:

 

(a)           Building Operations.  To make inspections and, if required by this
Lease, repairs, alterations, additions, changes, or improvements, whether
structural or otherwise, in and about the Project, or any part thereof; to
enter upon the Premises (after giving Tenant at least 24 hours’ notice thereof,
which may be oral notice, except in cases of real or apparent emergency, in
which case no notice shall be required) and, during the continuance of any such
work, to temporarily close doors, entryways, public space, and corridors in the
Building; and to interrupt or temporarily suspend Building services and facilities;

 

(b)           Prospective Purchasers and Lenders.  To enter the Premises upon at least 24 hours’ notice to show the
Premises to prospective purchasers or lenders; and

 

(c)           Prospective Tenants.  At any time during the last 12 months of the
Term (or earlier if Tenant has notified Landlord in writing that it does not
desire to renew the Term) or at any time following the occurrence of an Event
of Default, and upon at least 24 hours’ notice to enter the Premises to show
the Premises to prospective tenants.

 

Landlord
agrees to use reasonable, good faith efforts to minimize any interference with
or disruption of Tenant’s business in, and/or quiet enjoyment of, the Premises
at such times as Landlord, its agents, employees or contractors are within the
Premises for any such purposes.

 

24.          Landlord Default.  If Landlord defaults in the performance of any of its obligations under
this Lease, Tenant will notify Landlord of the default and Landlord will have
30 days after receiving such notice to cure the default.  If Landlord is not reasonably able to cure the
default within such 30 day period, Landlord will have an additional reasonable
period of time to cure the default as long as Landlord commences the cure
within the 30 day period and thereafter diligently pursues the cure.  Except as otherwise provided in this Lease,
upon any such default by Landlord (after the expiration of any applicable cure
period), Tenant shall have all remedies provided at law.

 

25.          Miscellaneous.

 

(a)           Landlord Transfer.  Landlord may transfer any portion of the
Project and any of its rights under this Lease.  If Landlord assigns its rights under this
Lease, then Landlord shall thereby be released from any further obligations
hereunder arising after the date of transfer, provided that the assignee
assumes in writing Landlord’s obligations hereunder arising from and after the
transfer date.

 

(b)           Landlord’s Liability.  The liability of Landlord (and its partners,
shareholders or members) to Tenant (or any person or entity claiming by,
through or under Tenant) for any default by Landlord under the terms of this
Lease or any matter relating to or arising out of the occupancy or use of the
Premises shall be limited to Tenant’s actual direct, but not consequential,
damages therefor and shall be recoverable only from the interest of Landlord in
the Project, and Landlord (and its partners, shareholders or members) shall not
be personally liable for any deficiency.  For purposes of this Lease, Landlord’s
interest in the Project shall be deemed to include any insurance, condemnation
or sales proceeds from the Project.

 

19

 

(c)           Force Majeure.
 Other than for Landlord’s or Tenant’s
obligations under this Lease that can be performed by the payment of money
(e.g., payment of Rent and maintenance of insurance), whenever a period of time
is herein prescribed for action to be taken by either party hereto, such party
shall not be liable or responsible for, and there shall be excluded from the
computation of any such period of time, any delays due to strikes, riots, acts
of God, shortages of labor or materials, war, terrorist acts or activities,
governmental laws, regulations, or restrictions, or any other causes of any
kind whatsoever which are beyond the control of such party.

 

(d)           Brokerage.
 Neither Landlord nor Tenant has
dealt with any broker or agent in connection with the negotiation or execution
of this Lease, other than CB Richard Ellis, Inc., who represents Landlord,
and Cushman & Wakefield of California, Inc., who represents
Tenant, whose commission shall be paid by Landlord pursuant to a separate
written agreement.  Tenant and Landlord
shall each indemnify the other against all costs, expenses, attorneys’ fees,
liens and other liability for commissions or other compensation claimed by any broker
or agent claiming the same by, through, or under the indemnifying party.

 

(e)           Estoppel
Certificates.  From time
to time in connection with any sale, financing or refinancing of the Project,
Tenant shall furnish to any party designated by Landlord, within ten days after
Landlord has made a request therefor, a certificate signed by Tenant confirming
and containing such factual certifications and representations as to this Lease
as Landlord may reasonably request. 
Unless otherwise required by Landlord’s Mortgagee or a prospective
purchaser or mortgagee of the Project, the initial form of estoppel certificate
to be signed by Tenant is attached hereto as Exhibit E.

 

(f)            Notices.
 All notices and other communications
given pursuant to this Lease shall be in writing and shall be (1) mailed
by first class, United States Mail, postage prepaid, certified, with return
receipt requested, and addressed to the parties hereto at the address specified
in the Basic Lease Information, (2) hand delivered to the intended
addressee, (3) sent by a nationally recognized overnight courier service,
or (4) sent by facsimile transmission during normal business hours
followed by a confirmatory letter sent in another manner permitted
hereunder.  All notices shall be
effective upon delivery to the address of the addressee (even if such addressee
refuses delivery thereof).  The parties
hereto may change their addresses by giving notice thereof to the other in
conformity with this provision.

 

(g)           Separability.
 If any clause or provision of this
Lease is illegal, invalid, or unenforceable under present or future laws, then
the remainder of this Lease shall not be affected thereby and in lieu of such
clause or provision, there shall be added as a part of this Lease a clause or
provision as similar in terms to such illegal, invalid, or unenforceable clause
or provision as may be possible and be legal, valid, and enforceable.

 

(h)           Amendments; Binding Effect; No Electronic Records.
 This Lease may not be amended except
by instrument in writing signed by Landlord and Tenant.  No provision of this Lease shall be deemed to
have been waived by Landlord or Tenant unless such waiver is in writing signed
by such party, and no custom or practice which may evolve between the parties
in the administration of the terms hereof shall waive or diminish the right of
Landlord or Tenant to insist upon the performance by the other party in strict
accordance with the terms hereof.  Landlord
and Tenant hereby agree not to conduct the transactions or communications
contemplated by this Lease by electronic means, except by facsimile
transmission as specifically set forth in Section 25(f); nor shall the use
of the phrase “in writing” or the word “written” be construed to include
electronic communications except by facsimile transmissions as specifically set
forth in Section 25(f).  The terms
and conditions contained in this Lease shall inure to the benefit of and be
binding upon the parties hereto, and upon their respective successors in
interest and legal representatives, except as otherwise herein expressly
provided.  This Lease is for the sole
benefit of Landlord and Tenant, and, other than Landlord’s Mortgagee, no third
party shall be deemed a third party beneficiary hereof.

 

(i)            Quiet
Enjoyment.  Provided is
not in default under this Lease after the expiration of any applicable cure
period, Tenant shall peaceably and quietly hold and enjoy the Premises for the
Term, without hindrance from Landlord or any party claiming by, through, or
under Landlord, but not otherwise, subject to the terms and conditions of this
Lease.

 

20

 

(j)            No
Merger.  There shall be no merger of the leasehold estate hereby created with
the fee estate in the Premises or any part thereof if the same person acquires
or holds, directly or indirectly, this Lease or any interest in this Lease and
the fee estate in the leasehold Premises or any interest in such fee estate.

 

(k)           No Offer.  The submission of this Lease to Tenant shall
not be construed as an offer, and Tenant shall not have any rights under this
Lease unless Landlord executes a copy of this Lease and delivers it to Tenant.

 

(l)            Entire Agreement.  This Lease constitutes the entire agreement
between Landlord and Tenant regarding the subject matter hereof and supersedes
all oral statements and prior writings relating thereto.  Except for those set forth in this Lease, no
representations, warranties, or agreements have been made by Landlord or Tenant
to the other with respect to this Lease or the obligations of Landlord or
Tenant in connection therewith.  The
normal rule of construction that any ambiguities be resolved against the
drafting party shall not apply to the interpretation of this Lease or any
exhibits or amendments hereto.

 

(m)          Waiver of Jury Trial.  TO THE MAXIMUM EXTENT PERMITTED BY LAW,
LANDLORD AND TENANT EACH WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LITIGATION OR TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE ARISING OUT OF OR WITH RESPECT TO THIS LEASE
OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

 

(n)           Governing Law.  This Lease shall be governed by and
construed in accordance with the laws of the state in which the Premises are
located.

 

(o)           Recording.
 Tenant shall not record this Lease
or any memorandum of this Lease without the prior written consent of Landlord,
which consent may be withheld or denied in the sole and absolute discretion of
Landlord, and any recordation by Tenant shall be a material breach of this
Lease.  Tenant grants to Landlord a power
of attorney to execute and record a release releasing any such recorded
instrument of record that was recorded without the prior written consent of
Landlord.

 

(p)           Water or Mold Notification.  To the extent Tenant or its agents or
employees discover any water leakage, water damage or mold in or about the
Premises or Project, Tenant shall promptly notify Landlord thereof in writing.

 

(q)           Joint
and Several Liability.  If
Tenant is comprised of more than one party, each such party shall be jointly
and severally liable for Tenant’s obligations under this Lease.  All unperformed obligations of Tenant
hereunder not fully performed at the end of the Term shall survive the end of
the Term, including payment obligations with respect to Rent and all
obligations concerning the condition and repair of the Premises.

 

(r)            Financial Reports.  Within 15 days after Landlord’s request,
Tenant will furnish Tenant’s most recent audited financial statements
(including any notes to them) to Landlord, or, if no such audited statements
have been prepared, such other financial statements (and notes to them) as may
have been prepared by an independent certified public accountant or, failing
those, Tenant’s internally prepared financial statements.  If Tenant is a publicly traded corporation,
Tenant may satisfy its obligations hereunder by making Tenant’s most recent
annual and quarterly reports publicly available.  Landlord will not disclose any aspect of
Tenant’s financial statements that Tenant designates to Landlord as
confidential except (1) to Landlord’s Mortgagee or prospective mortgagees
or purchasers of the Building, (2) in litigation between Landlord and
Tenant, and/or (3) if required by court order.  Tenant shall not be required to deliver the
financial statements required under this Section 25(r) more than once in
any 12-month period unless requested by Landlord’s Mortgagee or a prospective
buyer or lender of the Building or an Event of Default occurs.

 

(s)           Landlord’s Fees.  Whenever
Tenant requests Landlord to take any action not required of it hereunder or
give any consent required or permitted under this Lease, Tenant will reimburse
Landlord for Landlord’s reasonable actual out-of-pocket costs payable to third
parties and incurred by Landlord in reviewing the

 

21

 

proposed
action or consent, including reasonable attorneys’, engineers’ or architects’
fees, within 30 days after Landlord’s delivery to Tenant of a statement of such
costs.  Tenant will be obligated to make
such reimbursement without regard to whether Landlord consents to any such
proposed action.

 

(t)            Attorneys’ Fees.  In
the event that either Landlord or Tenant should bring suit for the possession
of the Premises, for the recovery of any sum due under this Lease, or because
of the breach of any provision of this Lease or for any other relief against
the other, then all costs and expenses, including reasonable attorneys’ fees,
incurred by the prevailing party therein, shall be paid by the other party,
which obligation on the part of the other party shall be deemed to have accrued
on the date of the commencement of such action and shall be enforceable whether
or not the action is prosecuted to judgment.

 

(u)           Telecommunications.
 Tenant acknowledges that Landlord
shall not be required to provide or arrange for any telecommunications systems,
including voice, video, data, Internet, and any other services provided over
wire, fiber optic, microwave, wireless, and any other transmission systems (“Telecommunications
Services”)
and that Landlord shall have no liability to any Tenant Party in connection
with the installation, operation or maintenance of Telecommunications Services
or any equipment or facilities relating thereto.  Tenant, at its cost and for its own account,
shall be solely responsible for obtaining all Telecommunications Services.

 

(v)           Confidentiality.
 Tenant acknowledges that the terms
and conditions of this Lease are to remain confidential for Landlord’s benefit,
and may not be disclosed by Tenant to anyone, by any manner or means, directly
or indirectly, without Landlord’s prior written consent; however, Tenant may
disclose the terms and conditions of this Lease if required by Law or court
order, and to its attorneys, accountants, employees and existing or prospective
financial partners provided same are advised by Tenant of the confidential
nature of such terms and conditions and agree to maintain the confidentiality
thereof (in each case, prior to disclosure).  Tenant shall be liable for any disclosures
made in violation of this Section by Tenant or by any entity or individual
to whom the terms of and conditions of this Lease were disclosed or made
available by Tenant.  The consent by
Landlord to any disclosures shall not be deemed to be a waiver on the part of
Landlord of any prohibition against any future disclosure.

 

(w)          Authority.
 Tenant (if a corporation,
partnership or other business entity) hereby represents and warrants to
Landlord that Tenant is a duly formed and existing entity qualified to do
business in the state in which the Premises are located, that Tenant has full
right and authority to execute and deliver this Lease, and that each person
signing on behalf of Tenant is authorized to do so.  Landlord hereby represents and warrants to
Tenant that Landlord is a duly formed and existing entity qualified to do
business in the state in which the Premises are located, that Landlord has full
right and authority to execute and deliver this Lease, and that each person
signing on behalf of Landlord is authorized to do so.

 

(x)           Hazardous
Materials.  The term “Hazardous Materials” means any
substance, material, or waste which is now or hereafter classified or
considered to be hazardous, toxic, or dangerous under any Law relating to
pollution or the protection or regulation of human health, natural resources or
the environment, or poses or threatens to pose a hazard to the health or safety
of persons on the Premises or in the Project.  Neither Tenant nor its agents or employees
shall use, generate, store, or dispose of, or permit the use, generation,
storage or disposal of Hazardous Materials on or about the Premises or the
Project except in a manner and quantity necessary for the ordinary performance
of Tenant’s business, and then in compliance with all Laws.  Upon the expiration or earlier termination of
this Lease, Tenant shall, at Tenant’s sole cost and expense, conduct site
investigation work necessary to evaluate the presence of any Hazardous
Materials on the Premises and the Project and to cleanup, remediate, and
otherwise mitigate the effects of the presence of any such Hazardous Materials
on the Premises and the Project, or Landlord may, if it has reasonable grounds
to conclude that Tenant will not properly perform such work, undertake such
site investigation work and any such cleanup, remediation or mitigation work on
behalf of Tenant, at Tenant’s sole cost and expense.  In any event, any such site investigation work
or such cleanup, remediation or mitigation work shall be performed by qualified
environmental professionals reasonably acceptable to Landlord.  If Tenant breaches its obligations under this Section 25(x),
Landlord may immediately take any and all action reasonably appropriate to
remedy the same, including taking all appropriate action to clean up or
remediate any contamination resulting from Tenant’s use, generation, storage or
disposal of Hazardous Materials.  Notwithstanding
Landlord’s indemnity contained in Section 11(d), Tenant shall defend,
indemnify, and hold

 

22

 

harmless Landlord and its
representatives and agents from and against any and all claims, demands,
liabilities, causes of action, suits, judgments, damages and expenses
(including reasonable attorneys’ fees and cost of clean up and remediation)
arising from Tenant’s failure to comply with the provisions of this Section 25(x).
 This indemnity provision shall survive
termination or expiration of this Lease.  Landlord shall be solely responsible for the
remediation of any Hazardous Materials brought onto the Project by Landlord,
its agents or employees in violation of applicable Laws and Landlord shall
indemnify, defend and hold Tenant harmless from and against any and all claims,
demands, liabilities, causes of action, suits, judgments, damages and expenses
(including reasonable attorneys’ fees) for the costs of any such remediation.  Landlord shall use good faith efforts not to
place or use or permit any agent or employee to place or use any Hazardous
Materials in violation of applicable Laws in or about the Premises during the
Term of this Lease.

 

(y)             Parking.  Tenant and Tenant Parties shall be
entitled to the exclusive use of the parking area on the Project associated
with the Building (the “Parking Area”) during
the Term subject to such terms, conditions and regulations as are from time to
time applicable to the Parking Area.  Landlord
shall not be responsible for enforcing Tenant’s parking rights against any
third parties.

 

Tenant shall at all times
comply with all Laws respecting the use of the Parking Area.  Landlord reserves the right to adopt, modify,
and enforce reasonable rules and regulations governing the use of the
Parking Area from time to time.  Landlord
may refuse to permit any person who violates such rules and regulations to
park in the Parking Area, and any violation of the rules and regulations
shall subject the car to removal from the Parking Area.

 

All motor vehicles
(including all contents thereof) shall be parked in the Parking Area at the
sole risk of Tenant and each other Tenant Party, it being expressly agreed and
understood Landlord has no duty to insure any of said motor vehicles (including
the contents thereof), and Landlord is not responsible for the protection and
security of such vehicles.  Notwithstanding
anything to the contrary contained in this Lease, Landlord shall have no
liability whatsoever for any property damage or loss which might occur on the
Parking Area or as a result of or in connection with the parking of motor
vehicles in any of the parking spaces.

 

(z)           List of
Exhibits.  All exhibits
and attachments attached hereto are incorporated herein by this reference.

 

	
   

  	
  Exhibit A -

  	
  Intentionally Omitted

  
	
   

  	
  Exhibit B -

  	
  Description of the Land

  
	
   

  	
  Exhibit C -

  	
  Building Rules and
  Regulations

  
	
   

  	
  Exhibit D -

  	
  Tenant Finish-Work

  
	
   

  	
  Exhibit E -

  	
  Form of Tenant
  Estoppel Certificate

  

 

(aa)         Consent and Approval Standards.  Whenever the consent, permission or
approval of either Landlord or Tenant is required or provided by the terms of
the Lease, the giving of such consent, permission or approval shall not be
unreasonably withheld, conditioned or delayed except as otherwise provided in
this Lease.  Whenever Landlord is
permitted to exercise its discretion, such discretion shall be reasonable
except as otherwise provided in this Lease.

 

(bb)        Damages.
 Notwithstanding any other provisions
of this Lease to the contrary, Landlord and Tenant agree that whenever in this
Lease one party is required to pay the costs and expenses of or damages
incurred by the other party in connection with a violation of the terms of this
Lease, (i) costs and expenses shall mean the actual, reasonable and
verifiable costs and expenses incurred by the party seeking recovery; and (ii) damages
shall mean actual, direct damages incurred by the party seeking recovery, and
such term shall expressly exclude consequential, indirect or punitive damages
except in connection with Tenant’s obligations under Sections 22 and 25(x) and
Landlord’s obligations under Section 25(x).  Within thirty (30) days following Tenant’s
written inquiry as to whether Landlord has leased the Premises to a succeeding
tenant, Landlord shall so notify Tenant in writing.

 

23

 

(cc)         Compliance
With Laws.  Except as
otherwise set forth herein, Landlord agrees to comply with all Laws of general
applicability to the Premises with respect to those matters that are Landlord’s
responsibility under this Lease, except those requirements related to Tenant’s
specific use or occupancy of the Premises or Tenant’s improvements to the
Premises.

 

26.          Renewal Option.  Provided no Event of Default exists and Tenant is occupying at least
fifty percent (50%) of the Premises at the time of such election, Tenant may
renew this Lease for two consecutive additional periods of five years each, by
delivering written notice of the exercise thereof to Landlord not earlier than 24
months nor later than 12 months before the expiration of the Term.  The Basic Rent payable for each month during
such extended Term shall be 95% of the prevailing rental rate (the “Prevailing Rental Rate”), at
the commencement of such extended Term, for new leases and/or renewals of
comparable buildings in the vicinity of the Building of equivalent quality,
size, configuration, utility and location, with the length of the extended
Term, the credit standing of Tenant and all economic terms and conditions to be
taken into account.  Within thirty (30)
days after receipt of Tenant’s notice to renew, Landlord shall deliver to
Tenant written notice of the Prevailing Rental Rate.  If Tenant disagrees with Landlord’s
determination of the Prevailing Rental Rate, then Tenant may, but only within
10 business days after receipt of Landlord’s notice, require by written notice
to Landlord that the determination of the Prevailing Rental Rate be made by
brokers, taking into account the requirements of this Section 26; provided that
Tenant’s failure to deliver such notice within such 10 business day period
shall be deemed to be Tenant’s acceptance of Landlord’s determination of the
Prevailing Rental Rate.  If Tenant timely
delivers such notice, then, within 10 days after such delivery, each party
shall select one qualified commercial real estate broker with at least 10 years
experience in the leasing of similar buildings in the city or submarket in
which the Premises are located.  If
Landlord or Tenant fails to select its broker within such 10-day period, then
Landlord or Tenant may petition the then presiding judge of the Superior Court
of the State of California for Los Angeles, County to appoint such broker,
subject to the criteria set forth in this Section 26, or if he or she
refuses to act, either party may petition any judge having jurisdiction over
Landlord and Tenant to appoint such broker.  Each broker shall deliver its written determination
of the Prevailing Rental Rate, taking into account the requirements of this Section 26,
to the other broker within 20 days after such broker’s retention.  In the event the determinations of the two
brokers differ and, after good faith efforts over the succeeding 20 day period,
they cannot mutually agree, the brokers shall, within 10 days thereafter,
appoint a neutral third broker with the qualifications specified above and
deliver their respective determinations to such third broker.  If the two brokers fail to select the third
broker within such 10-day period, then Landlord or Tenant may petition the then
presiding judge of the Superior Court of the State of California, for Los Angeles
County to appoint such broker subject to the criteria set forth in this Section 26,
or if he or she refuses to act, either party may petition any judge having
jurisdiction over the Landlord and Tenant to appoint such broker.  Within 5 days after its appointment, the third
broker shall choose either the determination of Landlord’s broker or Tenant’s
broker and such choice of the third broker shall be final and binding on
Landlord and Tenant.  Each party shall
pay the costs of its real estate broker.  The parties shall equally share the costs of
any third broker.  Following the
determination of the Prevailing Rental Rate, Landlord and Tenant shall execute
an amendment to this Lease extending the Term on the same terms provided in
this Lease, except as follows:

 

1.             Basic Rent shall be adjusted to 95% of the
Prevailing Rental Rate; and

 

2.             Tenant shall have no further renewal option
unless expressly granted in this Lease.

 

Tenant’s
rights under this Section 26 shall terminate if (i) this Lease or
Tenant’s right to possession of the Premises is terminated, (ii) Tenant
assigns any of its interest in this Lease or sublets more than fifty percent
(50%) of the Premises, (iii) Tenant fails to timely exercise its option
under this Section 26, time being of the essence with respect to Tenant’s
exercise thereof, or (iv) Landlord determines, in its sole but reasonable
discretion, that Tenant is not financially capable of making rent payments
under this Lease.

 

27.          Right to Terminate.  Provided no Event of Default exists as of the
date of Tenant’s delivery of the “Termination Notice” (as defined below) and as
of the “Tenant Termination Date” (as defined below), Tenant shall have the one
time right to terminate this Lease effective as of February 28, 2012 (the “Tenant
Termination Date”), provided that (i) Landlord receives written notice
from Tenant on or before March 1, 2011 stating that Tenant elects to
terminate this Lease pursuant to the terms and conditions of this Section 27
(the “Termination Notice”), and (ii) concurrently with the delivery of the
Termination Notice, Landlord receives from Tenant the “Termination Fee” (as defined
below).  The “Termination Fee” shall be
an amount equal to $1,193,367.60 plus the unamortized portion as

 

24

 

of
the Termination Date of the Construction Allowance and leasing commissions paid
to Landlord’s broker and Tenant’s broker, amortized on a straight-line basis
over the Term of the Lease without interest.  The Termination Fee shall be consideration for
and a condition precedent to such early termination.  Provided that Tenant terminates this Lease
pursuant to the terms of this Section 27, then this Lease shall
automatically terminate and be of no further force or effect and Landlord and
Tenant shall be relieved of their respective obligations under this Lease as of
the Tenant Termination Date, except those obligations set forth in this Lease
which specifically survive the expiration or earlier termination of this Lease,
including, without limitation, the payment by Tenant of all amounts owed by
Tenant under this Lease, up to and including the Tenant Termination Date.  If Tenant fails to comply with the
requirements of this Section 27, including the failure to pay the “Termination
Fee”, which failure shall include but not be limited to Tenant’s check being
returned by the bank for any reason whatsoever, such failure shall serve to
nullify the terms and conditions of this provision, in which case this Lease
shall continue in full force and effect for the remainder of the Term.

 

25

 

LANDLORD AND TENANT
EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR
TENANT’S INTENDED COMMERCIAL PURPOSE, AND TENANT’S OBLIGATION TO PAY RENT
HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE
PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS HEREUNDER, AND, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, TENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT
ABATEMENT, DEMAND, SETOFF OR DEDUCTION, NOTWITHSTANDING ANY BREACH BY LANDLORD
OF ITS DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED.

 

This Lease is executed on
the respective dates set forth below, but for reference purposes, this Lease
shall be dated as of the date first above written.  If the execution date is left blank, this
Lease shall be deemed executed as of the date first written above.

 

	
  LANDLORD:

  	
  WHMNY
  REAL ESTATE LIMITED PARTNERSHIP, a

  
	
   

  	
  Delaware limited
  partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  WHMNY
  Gen-Par, Inc., a Delaware corporation, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Nancy M. Haag

  
	
   

  	
   

  	
  Name:

  	
  Nancy M. Haag

  
	
   

  	
   

  	
  Title:

  	
  Assistant Vice
  President

  
	
   

  	
   

  	
  Execution Date:

  	
  October 14, 2005

  
	
   

  	
   

  
	
  TENANT:

  	
  EARTHLINK,
  INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin M. Dotts

  
	
   

  	
  Name:

  	
  Kevin M. Dotts

  
	
   

  	
  Title:

  	
  Executive Vice
  President, Chief Financial Officer

  
	
   

  	
  Execution Date:

  	
  October 11, 2005

  
											

 

26Exhibit 10.1

 

October 17,
2005

 

 

Robert E.
Sulentic

6037 Lakehurst
Avenue

Dallas, Texas
75230

 

Re:          Amendment
to Employment Agreement

 

Dear Bob:

 

As you know, you and Trammell Crow Company (the “Company”, or “we”, or “us”)
are parties to that certain employment letter agreement, dated as of October 17,
2003, as supplemented by that certain letter delivered by us to you, dated as
of April 6, 2004 (the “Employment Agreement”),
which set forth the terms of your employment with us.  We and you now wish to amend and supplement
the Employment Agreement in certain respects as set forth in this letter
agreement (this “Amendment”).  We and you both acknowledge and agree that
this Amendment is being made for good and valuable consideration, the receipt
and sufficiency of which are also acknowledged. 
Each capitalized term used in this Amendment and not otherwise defined
herein will have the meaning given such term in the Employment Agreement.

 

1.             Amendment.

 

(a)           Section 1
of the Employment Agreement is hereby amended and restated to read in its
entirety as follows:

 

1.             Employment
Period.  Subject to the
terms and provisions of this Agreement, we agree to continue to employ you, and
you agree to continue to be employed by us, for a period (the “Employment
Period”) commencing on the date hereof and expiring December 31, 2007;
provided, that on December 31, 2007 and on each subsequent December 31,
this Agreement will automatically be extended for one additional year unless,
during the four month period
beginning March 1 and ending July 1 immediately prior to the next
scheduled extension, you or we will have given written notice (a “Non-Renewal
Notice”) that the Employment Period will not be extended (a “Non-Renewal”).

 

2.             Employment Agreement Otherwise Unchanged.  Except as specifically amended or
supplemented in this Amendment, the Employment Agreement will continue in full
force and effect in accordance with its terms.

 

 

3.             Counterparts.  This Amendment may be executed (including by
facsimile transmission) in any number of counterparts.

 

4.             Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE
TO PRINCIPLES OF CONFLICT OF LAWS OF TEXAS OR ANY OTHER JURISDICTION, AND,
WHERE APPLICABLE, THE LAWS OF THE UNITED STATES.

 

[SIGNATURE
PAGE FOLLOWS]

 

2

 

By signing and countersigning this Amendment in the appropriate space
set forth below, we and you have agreed to be bound by the terms and conditions
set forth herein, effective as of the date first written above.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  TRAMMELL CROW COMPANY,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J.
  Christopher Kirk

  
	
   

  	
  Name:

  	
  J.
  Christopher Kirk

  
	
   

  	
  Title:

  	
  Executive
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  Trammell
  Crow Company

  
	
   

  	
   

  	
  2001 Ross
  Avenue, Suite 3400

  
	
   

  	
   

  	
  Dallas,
  Texas 75201

  
	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
  Telephone:
  (214) 863-3000

  
	
   

  	
   

  	
  Fax: (214)
  863-3125

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED
  AND AGREED BY EXECUTIVE:

  	
   

  
	
   

  	
   

  
	
  /s/ Robert
  E. Sulentic

  	
   

  	
   

  
	
  Name: Robert
  E. Sulentic

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  6037 Lakehurst Avenue

  	
   

  
	
   

  	
  Dallas, Texas 75230

  	
   

  
	
   

  	
  Telephone: (214) 378-5449

  	
   

  
	
   

  	
  Fax: (214) 863-3125

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