Document:

Exhibit
10.6

 

UNITED
ONLINE, INC.

2004
MANAGEMENT BONUS PLAN

 

I.              PURPOSES OF THE PLAN

 

1.01                         The United Online, Inc. (“Company”) 2004
Management Bonus Plan (“Plan”) is established to promote the interests of the
Company by creating an incentive program to (i) attract and retain employees
who will strive for excellence, and (ii) motivate those individuals to set and
achieve above-average objectives by providing them with rewards for
contributions to the financial performance of the Company.

 

II.            ADMINISTRATION OF THE PLAN

 

2.01                         The Plan is hereby adopted by the Company’s
Compensation Committee of the Board of Directors (the “Committee”), and shall
be administered by the Committee pursuant to the powers provided to the
Committee by the Board of Directors of the Company.

 

2.02                         The interpretation and construction of the
Plan and the adoption of rules and regulations for administering the Plan shall
be made by the Committee.  Decisions of
the Committee shall be final and binding on all parties who have an interest in
the Plan.

 

III.           DETERMINATION OF PARTICIPANTS

 

3.01                         The following individuals will participate in
the Plan:  Mark R. Goldston, Charles S.
Hilliard, Frederic A. Randall, Jr., Brian Woods, Gerald J. Popek, Jon O.
Fetveit and Robert J. Taragan.  An
individual shall be eligible to participate in the Plan if employed by the
Company or any of its participating subsidiaries on December 31,
2004.  If an individual is not employed
by the Company or a participating subsidiary on such date, he will not eligible
to receive a bonus under the Plan. 
However, an individual who is on a leave of absence or whose employment
terminates and is then re-hired in the same fiscal year may remain eligible at
the discretion of the Committee, and the Committee may provide a pro rata
bonus.  In the event of termination of
an individual’s employment as a result of death or disability, the Committee
shall provide the individual or the individual’s estate with a pro rata bonus.

 

3.02                         For purposes of the Plan:

 

A.            An individual shall be considered an employee
for so long as such individual remains employed by the Company or one or more
subsidiary corporations.

 

B.            Each corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company shall be
considered to be a subsidiary of the Company, provided each such corporation
(other than the last corporation in the unbroken chain)

 

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owns,
at the time of determination, stock possessing more than fifty percent of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

 

IV.           BONUS AWARDS

 

4.01                         No eligible employee shall earn any portion
of a bonus award made hereunder for any fiscal year until December 31,
2004.

 

4.02                         The individual bonus awards payable to the
participants in the Plan for the 2004 Year shall be based upon the Company’s
success in achieving specified ADJUSTED OIBDA targets (that is, targets tied to
the Company’s operating income before 
depreciation and amortization expenses and certain other expenses)
determined by the Committee for that fiscal year (“ADJUSTED OIBDA
Targets”).  In determining whether the
Company has achieved the ADJUSTED OIBDA Targets, ADJUSTED OIBDA will be
determined consistent with the Company’s historical methodology for calculating
ADJUSTED OIBDA for financial reporting purposes; provided, however, (1)
ADJUSTED OIBDA shall be calculated before restructuring expenses, merger
related expenses, stock based compensation expenses and other expenses
associated with the relocation of the Company’s headquarters, (2) in
determining whether the Company has achieved an ADJUSTED OIBDA Target, any
bonus amounts which accrue under this Plan at that particular Target level
shall be included as an expense in computing 
ADJUSTED OIBDA up to and until the accrual amounts reach the amounts
that would entitle Mr. Goldston to 150% of his base salary and the other
participants 125% of their base salary, after which no additional amounts shall
be included as an expense in computing 
whether higher ADJUSTED OIBDA Target levels have been achieved, (3) any
adjustments to ADJUSTED OIBDA attributable to a change in accounting principles
shall be excluded and (4) all items of gain, loss or expense for such fiscal
year determined to be extraordinary or unusual in nature or infrequent in
occurrence, or related to the disposal of a segment of a business, shall be
excluded from ADJUSTED OIBDA.  In the
event the Company acquires other companies or businesses during the 2004 fiscal
year, the Committee shall use its discretion to determine the impact, if any,
such acquisitions should have on the ADJUSTED OIBDA Targets.  While the bonuses shall be granted if the
Company achieves the ADJUSTED OIBDA Targets, the Committee may use its
discretion to award bonuses based on criteria other than the ADJUSTED OIBDA
Targets if the Committee determines it to be appropriate based on executive
performance and other facts and circumstances, with the goal being to reward
performance based upon the Company’s objectives.

 

4.03                         The bonuses for shall be based on a
percentage of each individual’s base salary for fiscal 2003.  For Mark Goldston, he will receive a bonus
equal to 65%, 75%, 85%, 100%, 110%, 125%, 150%, 175% or 200% of base if the
Company achieves specified ADJUSTED OIBDA Targets as determined by the
Committee.  For the other eligible
participants, each will receive 50%, 60%, 70%, 80%, 90%, 100% or 125% of his
base if the Company achieves specified ADJUSTED OIBDA Targets as determined by
the Committee.

 

4.04                         Following completion of the bonus calculation
referenced above, the Committee shall issue a written report containing the
final calculation.

 

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V.            PAYMENT OF BONUS AWARDS

 

5.01                         Bonuses shall be paid no later than
March 1, 2005.  All payments under
the Plan shall be subject to the Company’s collection of all applicable
federal, state and local income and employment withholding taxes.

 

VI.           GENERAL PROVISIONS

 

6.01                         The Plan shall become effective when adopted
by the Compensation Committee.  The
Committee may at any time amend, suspend or terminate the Plan, provided such
action is effected by written resolution and does not adversely affect rights
and interests of Plan participants.

 

6.02                         No amounts awarded or accrued under this Plan
shall actually be funded, set aside or otherwise segregated prior to
payment.  The obligation to pay the
bonuses awarded hereunder shall at all times be an unfunded and unsecured
obligation of the Company.  Plan
participants shall have the status of general creditors and shall look solely
to the general assets of the Company for the payment of their bonus awards.

 

6.03                         No Plan participant shall have the right to
alienate, pledge or encumber his/her interest in this Plan, and such interest
shall not (to the extent permitted by law) be subject in any way to the claims
of the employee’s creditors or to attachment, execution or other process of
law.

 

6.04                         Neither the action of the Company in
establishing the Plan, nor any action taken under the Plan by the Committee,
nor any provision of the Plan, shall be construed so as to grant any person the
right to remain in the employ of the Company or its subsidiaries for any period
of specific duration.  Rather, each
employee will be employed “at-will,” which means that either such employee or
the Company may terminate the employment relationship at any time for any
reason, with or without cause, subject in each case to any employment agreement
between such person and the Company.

 

6.05                         This is the full and complete agreement
between the eligible employees and the Company with respect to incentive bonus
compensation for the 2004 fiscal year. This Plan does not supersede, but is
supplemental to, any provisions of any employment agreement to which any of the
employees eligible under this Plan may be party.  With respect to references to Annual Bonuses in the Employment
Agreements for Messrs. Goldston, Hilliard, Randall and Woods, for the purposes
of such Agreements the references to Annual Bonuses shall be deemed
(A) for the purposes of Involuntary Termination, the greater of (i) 100%
with respect to Mr. Goldston and 75% with respect to the other participants, of
their then current salary or (ii) the bonus received in the preceding year
(which, for the 2003 calendar year, shall be the bonus paid for the six month
period ended December 31, 2003 plus 50% of the bonus paid for the twelve
month period ended June 30, 2003) and (B) for the purposes of termination
without cause, 100% of then current salary for Mr. Goldston and 75% of then
current salary for the other participants.

 

3Exhibit
10.11

 

LNR
WARNER CENTER

 

OFFICE
LEASE

 

This Office Lease, which
includes the preceding Summary attached hereto and incorporated herein by this
reference (the Office Lease and Summary to be known sometimes collectively
hereafter as the “Lease”), dated
as of the date set forth in Section 1 of the Summary, is made by and
between LNR WARNER CENTER, LLC, a California limited liability company (“Landlord”), and NETZERO, INC., a Delaware
corporation (“Tenant”).

 

ARTICLE 1

 

REAL
PROPERTY/PROJECT, BUILDING AND PREMISES

 

1.1           Real
Property/Project, Building and Premises.

 

1.1.1        Premises.  Upon and
subject to the terms, covenants and conditions hereinafter set forth in this
Lease, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
the premises set forth in Section 6 of the Summary (the “Premises”), which Premises are located in
that certain “Building” commonly
known as “LNR Warner Center – Building H”,
with an address of 21301 Burbank Boulevard, Woodland Hills,
California.  The outline of the floor
plan of each floor of the Premises is set forth in Exhibits A-1,  A-2
and A-3, respectively, attached hereto. 
Subject to Landlord’s reasonable regulations, restrictions and
guidelines, Tenant’s rights to the Premises include Tenant’s right to use and
access the space within the ceilings, walls and floors of the Premises
(excluding limited areas reasonably designated by Landlord which may interfere
with any other tenant’s use or equipment therein) to install and service wire,
conduit and cable that serve Tenant’s equipment, provided such use and access
is in accordance with, and subject to, the other terms and provisions of this
Lease.  Concurrently with the mutual
execution and delivery of this Lease, Landlord shall deliver possession of the
entire Premises to Tenant for the purpose of enabling Tenant to commence
therein, subject to and in accordance with the terms of the Tenant Work Letter
attached hereto as Exhibit D (the “Tenant Work Letter”), the design and construction of the
Tenant Improvements (as defined in the Tenant Work Letter), and Landlord’s
failure to timely deliver the same shall be subject to the Landlord Delay
provisions of Section 4.6 of the Tenant Work Letter.

 

1.1.2        Building and Real Property/Project. 
The Building is part of “Phase III” of a multi-building office building
project currently owned by Landlord and other entities and known as “LNR Warner Center” and located on the
approximately 35-acre site at the northeast corner of Canoga Avenue and Burbank
Boulevard in Woodland Hills, California. 
Such office building project: 
(i) currently contains (A) the Building and the surface
parking areas surrounding the Building (the “Building H
Parking Facilities”); (B) a 5-level above-grade parking
structure located northeast of the Building whose address is 5790 Canoga
Avenue (the “Phase III Parking Structure”);
(C) five (5) other existing office buildings located thereon
(collectively, the “Other Existing Office
Buildings”), whose addresses are 5800 Canoga Avenue,
21261 Burbank Boulevard, 21281 Burbank Boulevard, 21271 Burbank Boulevard
and 5820 Canoga Avenue, (D) a 4 level above-grade parking structure whose
address is 5830 Canoga Boulevard (the “Phase
I Parking Structure”); (D) a retail food court building whose
address is 5870 Canoga Avenue (the “Food
Court Building”); and (E) related surface parking areas,
landscaping, driveways, plazas, walkways, courtyards, public and private
streets and other improvements and facilities surrounding and/or appurtenant to
the Other Existing Office Buildings and Food Court Building; and (ii) may
be expanded, in Landlord’s sole and absolute discretion and/or the discretion
of any other owners of LNR Warner Center, to include additional office and
other buildings, parking structures, parking facilities, landscaping,
driveways, plazas, walkways, courtyards, public and private streets and other
improvements and facilities; provided, however, that no such expansions shall
result in an Adverse Condition (as such term is defined in Section 1.1.4
below).  As used in this Lease, the
terms “Real Property” and “Project”, shall mean, collectively:  (1) the Building; (2) the Other
Existing Office Buildings and Food Court Building (collectively, the “Other Existing Buildings”); (3) any
outside plaza areas, walkways, driveways, courtyards, public and private
streets, transportation facilitation areas and other improvements and
facilities now or hereafter constructed surrounding and/or servicing the
Building and the Other Existing Buildings, including the Phase I Parking Structure,
the Building H Parking Facilities, the Phase III Parking Structure,
surface parking facilities and other parking structures now or hereafter
servicing the Building, the Other Existing Buildings and any other buildings
which may be constructed within LNR Warner Center (collectively, the “Parking Facilities”), which are designated
from time to time by Landlord (and/or any common area association formed by
Landlord or Landlord’s assignee for LNR Warner Center) as common areas (or
parking facilities, as the case may be) appurtenant

 

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to or servicing the
Building, the Other Existing Buildings and any such other buildings; provided,
however, that no such expansions shall result in an Adverse Condition;
(4) any additional buildings, improvements, facilities, parking areas and
structures and common areas which Landlord and/or any other owners of LNR
Warner Center (and/or any common area association formed by Landlord or
Landlord’s assignee for LNR Warner Center) may add thereto from time to time
within or as part of LNR Warner Center; provided, however, that no such
additions shall result in an Adverse Condition; and (5) the land upon
which any of the foregoing are situated. 
The site plan depicting the current configuration of the Real Property
and the remainder of proposed Phase III of LNR Warner Center (which site
plan and the buildings, parking facilities, common areas and other improvements
thereon may be revised by Landlord and/or any other owners of LNR Warner Center
from time to time so long as such revisions will not result in an Adverse
Condition) is set forth in Exhibit A-4 attached hereto.  Notwithstanding the foregoing or anything
contained in this Lease to the contrary: 
(x) Landlord has no obligation to expand or otherwise make any
improvements within the Project, including, without limitation, any of the
landscaping, outside plaza areas, walkways, driveways, courtyards, public and
private streets, transportation facilitation areas and other improvements and
facilities which may be depicted on Exhibit A-4 attached hereto,
other than Landlord’s obligations set forth in the Tenant Work Letter to
complete any items of the Base, Shell and Core of the Building not completed as
of the date of execution of this Lease; and (y) Landlord and/or any other
owners of LNR Warner Center shall have the right from time to time to include
or exclude any improvements or facilities within the Project, at such party’s
sole election provided such inclusions or exclusions will not result in an
Adverse Condition.  In addition,
although LNR Warner Center, and the “Real
Property” and “Project”,
are currently defined above and elsewhere in this Lease to include real
property and improvements (including the Building) owned by Landlord as well as
certain real property and improvements now or hereafter owned by other owners
(including any common area association formed for LNR Warner Center which now
or may hereafter own any common parking structures, surface parking areas and other
common areas within LNR Warner Center), and the provisions of Article 4
below contemplate a procedure for cost-sharing and allocation of Operating
Expenses, Tax Expenses and Utilities Costs with respect to the entire LNR
Warner Center:  (a) except as
otherwise expressly contained elsewhere in this Lease, Landlord shall have no
maintenance, repair, operation, management, leasing or other obligations or
responsibilities, and is making no representations, warranties or with respect
to any such real property and improvements not owned by Landlord or the costs
incurred in connection therewith (and all references in this Lease to “Real Property” and “Project” shall exclude such portions of the
real property and improvements not owned by Landlord for purposes of
determining such obligations, responsibilities, representations, warranties and
covenants, to the extent appropriate and consistent); provided, however,
Landlord shall use commercially reasonable efforts to enforce its rights under
the Underlying Documents (as defined in Section 5.1 below) to eliminate
any Adverse Condition of which Landlord is aware and resulting from the failure
by the common area association formed for the Underlying Documents to enforce
the Underlying Documents in accordance with its terms and/or the violation of
the Underlying Documents by such common area association and/or any other owner
subject to the Underlying Documents; and (b) to the extent any such other
owner of land and/or improvements in LNR Warner Center (other than any common
area association formed for LNR Warner Center which now or may hereafter own
any common parking structures, surface parking areas and other common areas
within LNR Warner Center) incurs maintenance, repair, operation, management,
employee and other costs which are attributable solely to such owner’s property
and/or the improvements thereon (and not properly allocable to the Building or
any other owner’s property as part of any shared common areas/facilities within
or serving LNR Warner Center or otherwise), the same shall not be included in
the general Operating Expenses, Tax Expenses and Utilities Costs payable by
Landlord or such other owners.

 

1.1.3        Tenant’s and Landlord’s Rights. 
Subject to the following provisions of this Section 1.1.3, Tenant is
hereby granted the right to the nonexclusive use by Tenant and Tenant’s
employees, agents, contractors and invitees, of (i) the common corridors
and hallways, stairwells, elevators, closets, electrical and telephone rooms,
restrooms and other public or common areas located within the Building
(excluding the roof, except  as
expressly set forth in Section 26.30 below), and (ii) the areas
located on the Real Property designated by Landlord (and/or any common area
association formed by Landlord or Landlord’s assignee for LNR Warner Center)
from time to time as common areas for the Building, including the Building H
Parking Facilities and the Phase III Parking Structure, but specifically
excluding (A) the Other Existing Buildings and the Phase I Parking
Structure, and (B) any other improvements located on and/or areas within
the Project (including surface parking areas) which are designated by the
owners thereof and/or any such common area association as exclusive or reserved
areas.  Notwithstanding the foregoing to
the contrary, Tenant’s use of such common areas (1) shall not damage or
interfere with the operation of the Building or any other portion of the
Project, and (2) shall be subject to (a) the approval of the City of
Los Angeles and all other applicable governmental authorities to the extent
required thereby, and the rights of any party under, and the provisions and
restrictions contained in, the Underlying Documents (as defined in
Section 5.1 below), and Tenant’s compliance with all applicable Laws (as
defined in Article 22 below) and the Underlying Documents, and
(b) such reasonable, non-discriminatory rules, regulations and
restrictions as Landlord may make from time to time (which shall be provided in
writing to Tenant); provided, however, any such rules, regulations and
restrictions made by Landlord shall not result in an Adverse Condition.  Landlord reserves the right from time to
time to use

 

2

 

any of the common areas
of the Real Property, and the roof, risers and conduits of the Building for
telecommunications and/or any other purposes, and to do any of the following,
as long as such acts are performed in accordance with all applicable Laws and
do not result in an Adverse Condition: 
(w) make any changes, additions, improvements, repairs and/or
replacements in or to the Real Property or any portion or elements thereof,
including, without limitation, (I) changes in the location, size, shape
and number of driveways, entrances, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas, walkways, public and private
streets and roads, plazas, courtyards, transportation facilitation areas and
common areas, and, subject to the limitations and Tenant’s rights set forth in
Article 24 below, parking spaces, parking structures and parking areas,
and (II) expanding or decreasing the size of the Real Property and any
common areas and other elements thereof, including adding or deleting buildings
thereon and therefrom (other than the Building); (x) close temporarily any
of the common areas while engaged in making repairs, improvements or
alterations to the Real Property; (y) form and/or modify any existing
common area association(s) under covenants, conditions and restrictions to own,
manage, operate, maintain, repair and/or replace all or any portion of the
landscaping, driveways, walkways, parking areas, public and private streets,
plazas, courtyards, transportation facilitation areas and/or other common areas
located outside of the Building, and, subject to Section 4.2.4 below,
include the common area assessments, fees and taxes charged by the
association(s) and the cost of maintaining, managing, administering and
operating the association(s), in Operating Expenses, Tax Expenses and/or Utilities
Costs (as applicable); and (z) perform such other acts and make such other
changes with respect to the Real Property as Landlord may, in the exercise of
reasonable and good faith business judgment, deem to be appropriate.

 

1.1.4        Adverse Condition.  As used
herein, an “Adverse Condition”
shall mean:  (i) a material adverse
interference with Tenant’s use of the Premises for the Permitted Use (as such
term is defined in Article 5 below); (ii) an unreasonable
interference with Tenant’s access to the Premises; (iii) a change in
character of the Building to something other than a first-class office
building; (iv) other than on a temporary basis (not to exceed one (1)
month or such longer period as is reasonably necessary due to a damage or destruction,
condemnation or other events of “Force Majeure,” as that term is defined in
Section 26.17 below), (A) a relocation of any of Tenant’s Reserved
Parking Passes from the locations specified therefor in Section 10 of the
Summary, or (B) a relocation of Tenant’s Unreserved Parking Structure
Passes from the Phase III Parking Structure; (v) a reduction in the number
of parking passes within the Parking Allotment (as defined in Section 24.1
below), other than during such period as is reasonably necessary due to a damage
or destruction, condemnation or other Force Majeure events; or (vi) an
event which increases Tenant’s monetary obligations under this Lease, except
(A) for increases in Operating Expenses, Tax Expenses or Utilities Costs
to the extent such increases are otherwise permitted in Article 4 below,
and/or (B) as imposed under and/or to comply with applicable Laws.  In the event temporary relocation of
Tenant’s parking passes is required in connection with the exercise of any of
Landlord’s rights set forth in this Article 1 and/or Section 24.4
below, Landlord shall, at no expense to Tenant, relocate such parking passes to
other Parking Facilities of the Project and/or parking facilities located
within a reasonable walking distance of the Project (such relocation obligation
shall not, however, apply in the event any damage or destruction, condemnation
or other Force Majeure event, although Landlord shall use commercially
reasonable efforts to make available to Tenant parking passes within other
areas of the Project’s Parking Facilities for those parking passes displaced
thereby during the period such displacement occurs).

 

1.2           Rentable and Usable
Square Feet.

 

1.2.1        Premises and Building.  The rentable
and usable square feet of the Premises are hereby stipulated to be as set forth
in Section 6 of the Summary and are not subject to remeasurement by
Landlord or Tenant.  The rentable square
feet of the Building is approximately 179,342 rentable square feet and is not
subject to remeasurement by Landlord or Tenant, except that Landlord shall have
the right to remeasure the Building from time to time in accordance with the
BOMA Standard (as defined in Section 1.2.2 below) to reflect actual
physical increases or decreases due to physical expansions or contractions in
the rentable area of the Building.

 

1.2.2        First Offer Space.  For purposes
hereof, the “usable square feet” and “rentable square feet” of any First Offer
Space leased by Tenant pursuant to Section 1.4 below shall be calculated
by Landlord pursuant to the Building Owners and Managers Association
International Standard Method for Measuring Floor Area in Office Building, ANSI
Z65.1-1996 (the “BOMA Standard”);
provided, however, that notwithstanding the foregoing to the contrary, the BOMA
Standard shall not include any area below the ground floor of the building in
which the First Offer Space is located, any areas outside the perimeter walls
of such building, any elevator shafts, or any base building stairwells.  The rentable and usable square feet of any
such First Offer Space leased by Tenant pursuant to Section 1.4 below are
subject to measurement and verification by Landlord’s planner/designer prior to
the applicable First Offer Commencement Date (as defined in Section 1.4
below) for such First Offer Space, and all such measurements and verifications
shall be made in accordance with the provisions of this Section 1.2.  Tenant’s architect may consult with
Landlord’s planner/designer regarding such measurements and

 

3

 

verifications; provided,
however, the determination of Landlord’s planner/designer shall be conclusive
and binding upon the parties unless Tenant objects to such determination by
written notice delivered to Landlord within sixty (60) days after the date
Landlord gives Tenant written notice of such determination.  If Tenant timely objects to any such
measurements and verifications, Tenant shall have the right, within such 60-day
period, to remeasure the applicable First Offer Space in accordance with the
BOMA Standard and the other terms of this Section 1.2.  If Tenant fails to timely elect to remeasure
and complete any such remeasurement within such 60-day period, then Landlord’s
final measurements shall be conclusive and binding on Landlord and Tenant.  If Tenant’s remeasurement(s) undertaken
within such 60-day period differs from Landlord’s measurement(s) and Tenant
notifies Landlord thereof within such 60-day period, the parties shall, within
thirty (30) days thereafter, attempt in good faith to resolve such differences,
but if the parties cannot resolve such differences within such 30-day period,
the final measurements of the applicable First Offer Space shall be resolved
pursuant to binding arbitration in accordance with Section 26.32 below.

 

1.2.3        Effect of Remeasurement.  In the event
that any measurement pursuant to the terms of this Section 1.2 determines
that the rentable square feet of the Building and/or the rentable or usable
square feet of the applicable First Offer Space shall be different from the
amounts thereof set forth in this Lease, Landlord shall modify all amounts,
percentages and figures appearing or referred to in this Lease to conform to
such corrected square footage amounts therefor (including, without limitation,
the amount of the Base Rent payable for such applicable First Offer Space, and
Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs).  Any such modifications shall be confirmed in
writing by Landlord to Tenant.

 

1.3           Condition of the
Premises.  Except as specifically
set forth in this Lease and in the Tenant Work Letter, (i) Landlord shall
not be obligated to provide or pay for any improvement work or services related
to the improvement of the Premises, the Building, the Other Existing Buildings
or the Real Property, and (ii) Landlord has made no representation or
warranty regarding the condition of the Premises, the Building, the Other
Existing Buildings or the Real Property.

 

1.4           Right of First Offer.  Landlord hereby grants to Tenant a
continuing right of first offer to lease up to one (1) full floor of space (the
“First Offer Space”) located
either (i) within the Building, or (ii) in the building which may be
constructed adjacent to the Building as part of Phase III of the Project,
as depicted on the site plan attached hereto as Exhibit A-4 (“Building G”) but only if and during
the period of time when both Building G and the Building are concurrently
owned by the same Landlord or Landlord Affiliate, as defined below (it being
agreed by Tenant that the obligations of Landlord set forth in this
Section 1.4 pertaining to Building G shall only be binding upon Landlord
when Landlord or any Landlord Affiliate, or any of their successors and
assigns, concurrently own both the Building and Building G).  As used herein, the term “Landlord Affiliate” shall mean any person
or entity which controls, is controlled by or is under common control with
Landlord.  Such right of first offer
shall be upon and subject to the terms and conditions set forth below in this Section 1.4.

 

1.4.1        Second Generation Space. 
Notwithstanding anything to the contrary contained in this
Section 1.4, (i) Tenant’s right of first offer shall only apply with
respect to First Offer Space located within the Building when such space becomes
(or will become) available for lease (as reasonably determined by Landlord)
after the expiration or sooner termination of Landlord’s lease of such space to
the tenant thereof existing as of the date of execution of this Lease, as such
existing lease may be extended (whether or not pursuant to formal extension or
renewal provisions in such existing lease), and (ii) Tenant’s right of
first offer with respect to any First Offer Space located in Building G shall
only apply after:  (A) the initial
leasing of such space to a third party; (B) such space becomes (or will
become) available for lease (as reasonably determined by Landlord) after the
expiration or sooner termination of such initial lease, as such initial lease
may be extended (whether or not pursuant to a formal extension or renewal
provision in such initial lease); and (C) no other tenant of space within
Building G desires to lease all or any portion of such space pursuant to
either (1) the exercise of a first offer, expansion or similar right
contained in such tenant’s initial lease, or (2) the lease by such tenant
(or its affiliate, successor or assignee) of any space (or portion thereof)
which was included in any expansion, first offer or similar right contained in
such tenant’s initial lease whether or not pursuant to the exercise of such
right, so long as the terms of such lease are agreed to by Landlord and such
party prior to the termination of such right contained in such initial lease
(herein, a “Superior Right Holder”).

 

1.4.2        Procedure for Offer.  With respect
to the first time Landlord receives a bona fide proposal from a third party
(which is other than (i) the existing tenant of the First Offer Space or its
affiliate, successor or assignee, or (ii) a Superior Right Holder with respect
to space located in Building G) to lease First Offer Space containing not
more than a full floor increment of space and which is available (or will
become available) for lease as described in Section 1.4 above, which
proposal Landlord would accept or submit a counter proposal thereto (such
third-party bona fide proposal which Landlord would accept, or the
counter-proposal which Landlord would submit to such third party in response
thereto, shall be referred to herein as the “Third
Party Offer”), then prior to the date that

 

4

 

Landlord accepts or
submits such Third Party Offer to such third-party, Landlord shall give Tenant
written notice (the “First Offer Notice”) specifying that the
First Offer Space or specified portion thereof identified in the First Offer
Notice is available for lease by Tenant pursuant to the provisions of this
Section 1.4.  If Landlord’s First
Offer Notice pertains to space containing less than a full floor, and Tenant
exercises its first offer right herein to lease such space so identified in
such First Offer Notice, then notwithstanding anything in this Section 1.4
to the contrary, any future right of Tenant to lease any First Offer Space
under this Section 1.4 shall only apply to the remaining space located on
such partial floor and no other space in the Building or Building G when
such space becomes (or will become) available for lease as provided
herein.  In addition, Landlord’s
obligation to deliver a First Offer Notice to Tenant shall not apply during (A) the
last year of the initial Lease Term unless Tenant has previously delivered to
Landlord the Exercise Notice extending the initial Lease Term pursuant to the
Extension Option Rider, or (B) the Option Term.

 

1.4.3        Lease Terms for First Offer Space. 
Any such First Offer Notice delivered by Landlord in accordance with the
provisions of Section 1.4.2 above shall set forth Landlord’s calculation
of the rentable and usable square feet of such First Offer Space, as determined
in accordance with the BOMA Standard set forth in Section 1.2 above, and
the following economic terms upon which Landlord would lease such First Offer
Space to Tenant (it being acknowledged and agreed to by the parties that all
other non-economic terms for Tenant’s lease of such First Offer Space shall be
upon the same non-economic terms as set forth in this Lease to the extent not
modified by or inconsistent with this Section 1.4):

 

(i)            the anticipated date upon which such First Offer Space
will be available for lease by Tenant following the expiration or termination
of Landlord’s then existing lease of such space, the build-out time for Tenant
to construct improvements and fixturize such First Offer Space following
Landlord’s delivery of such First Offer Space to Tenant (the “Construction Period”), which shall be
determined as part of the Fair Market Rental Rate for such First Offer Space,
and the anticipated commencement date therefor (with the actual commencement
date to be determined as set forth in Section 1.4.6 below);

 

(ii)           the total number of parking passes available for lease
by Tenant (and the number thereof that are must-rent and/or right-to-rent
parking passes) with respect to such First Offer Space, which total number of
available parking passes shall be not less than four (4) unreserved,
undesignated parking passes per 1,000 usable square feet of such First Offer
Space;

 

(iii)          the monthly parking rates payable for such parking
passes, which shall be at the prevailing parking rates charged by Landlord or
Landlord’s parking operator from time to time or such reduced or abated rates
(if applicable) as determined as part of the Fair Market Rental Rate for such
First Offer Space;

 

(iv)          the Base Rent payable for such First Offer Space (the
“First Offer Space Rent”), which
shall be equal to the Fair Market Rental Rate for such First Offer Space (as
defined in Section 2 of the Extension Option Rider attached hereto), as
initially determined by Landlord as set forth in Landlord’s First Offer Notice
(subject, however, to Tenant’s right to object thereto and cause the Base Rent
to be determined pursuant to the arbitration provisions as provided in the
Extension Option Rider);

 

(v)           the tenant improvement allowance, if any, for such
First Offer Space to help Tenant pay for the initial tenant improvements to be
constructed by Tenant for such First Offer Space as described in
Section 1.4.4 below (which amount shall be determined as part of the Fair
Market Rental Rate for such First Offer Space;

 

(vi)          the term of the lease for such First Offer Space,
which shall in all events be coterminous with the Lease Term for the original
Leased Premises, as it may be extended pursuant to the Extension Option Rider
attached hereto, except as otherwise expressly provided in the Extension Option
Rider regarding Tenant’s right to extend the Lease Term for less than the
entire Premises (provided, however, if there are less than thirty (30) months
remaining in the initial Lease Term as of the date Landlord delivers the
applicable First Offer Notice to Tenant, and Tenant has not previously
delivered its Exercise Notice to Landlord extending the initial Lease Term, the
lease term for such First Offer Space shall be for a period expiring upon the
later of (A) the last day of the initial Lease Term (subject to extension pursuant
to the Extension Option Rider), or (B) the last day of the initial lease
term for such First Offer Space set forth in the Third Party Offer for such
First Offer Space); and

 

(vii)         all other monetary and non-monetary concessions (if
any) to be provided by Landlord for such First Offer Space, which shall be
determined as part of the Fair Market Rental Rate for such First Offer Space.

 

5

 

1.4.4        Construction In First Offer Space. 
If Tenant leases any First Offer Space pursuant to the terms of this
Section 1.4:  (i) Tenant shall
take such First Offer Space in its “AS IS” condition as of the date of delivery
of such space by Landlord to Tenant (except that Landlord shall deliver to
Tenant the Base, Shell and Core of such First Offer Space and the floor upon
which such First Offer Space is located in the condition therefor set forth in
the Tenant Work Letter, as shall be modified if the First Offer Space is less
than a full floor to include finished common elevator lobby and corridor for
the floor upon which such First Offer Space is located and demising walls
separating such First Offer Space from the remaining space on such floor, and
as further modified if the First Offer Space is located in Building G to include
only standard Building G Base, Shell and Core items then applicable for such
First Offer Space and the floor upon which such First Offer Space is located);
(ii) the construction of improvements in such First Offer Space shall be
Tenant’s sole responsibility, with any such construction to comply with the
terms of Article 8 of this Lease (and not the provisions of the Tenant
Work Letter, which shall not be applicable to such First Offer Space, except
for Landlord’s obligations set forth in clause (i) hereinabove pertaining to
the Base, Shell and Core, if applicable); and (iii) except for Landlord’s
obligations set forth in clause (i) hereinabove pertaining to the Base, Shell
and Core, Landlord shall not be obligated to provide or pay for any improvements,
remodeling or refurbishment work or services related to the improvement,
remodeling or refurbishment of the First Offer Space; provided, however,
Landlord shall provide Tenant a tenant improvement allowance for the First
Offer Space leased by Tenant in the amount, if any, as determined as part of
the Fair Market Rental Rate as described in Section 1.4.3 above.

 

1.4.5        Tenant’s Procedure for Acceptance. 
If Tenant wishes to exercise Tenant’s right of first offer with respect
to any First Offer Space described in a First Offer Notice, then within
ten (10) business days of delivery of such First Offer Notice to Tenant,
Tenant shall deliver written notice to Landlord (“Tenant’s Election Notice”) pursuant to which Tenant shall
elect one of the following (which Tenant’s Election Notice must include current
financial statements of Tenant and United Online, Inc., a Delaware corporation
(“United Online”), certified as
accurate by an officer of each such entity and evidencing that the combined net
worth, computed in accordance with generally accepted accounting principles
(but excluding goodwill as an asset), of Tenant and United Online (including
any entities included within United Online’s consolidated financial reporting)
is at least equal to $100,000,000.00.

 

(i)            lease the entire First Offer Space identified in such
First Offer Notice upon the terms contained in such First Offer Notice;

 

(ii)           lease such entire First Offer Space identified in such
First Offer Notice upon the terms contained in such First Offer Notice, but
concurrently object in writing within Tenant’s Election Notice to Landlord’s
determination of the Fair Market Rental Rate for such First Offer Space, in
which event the Fair Market Rental Rate for such First Offer Space shall be
determined pursuant to the appraisal procedures set forth in Section 4 of
the Extension Option Rider attached hereto (failure by Tenant to timely object
to Landlord’s determination of the Fair Market Rental Rate shall be deemed
Tenant’s waiver of its objection right in this clause (ii)); or

 

(iii)          refuse to lease such First Offer Space identified in
such First Offer Notice, specifying that Tenant is not interested in exercising
its right of first offer for such First Offer Space at that time, in which
event Tenant’s right of first offer with respect to the First Offer Space
identified in the First Offer Notice shall terminate and be of no further force
or effect, and Landlord shall be free to lease the First Offer Space identified
in the First Offer Notice (or any portion thereof) to anyone to whom Landlord
desires on any terms Landlord desires; provided, however, if Landlord does not
enter into a lease or leases for the entire First Offer Space identified by
Landlord in such First Offer Notice within six (6) months after the date
Landlord first delivered such First Offer Notice to Tenant, then
(A) Landlord shall submit to Tenant a new First Offer Notice with respect
to any such unleased First Offer Space originally identified in Landlord’s
First Offer Notice prior to the first time after such 6-month period that
Landlord intends to accept from or submit to a third party a Third Party Offer
to lease all or any portion of such unleased First Offer Space, and (B) the
foregoing procedures in this Section 1.4.5 shall again apply following
Tenant’s receipt of such new First Offer Notice.

 

If Tenant does not
deliver Tenant’s Election Notice to Landlord electing one of the options in
clauses (i), (ii) or (iii) hereinabove within said ten (10) business day period
and include with such notice such financial statements evidencing the net worth
requirement set forth hereinabove, then Tenant shall be deemed to have elected
the option in clause (iii). 
Notwithstanding anything to the contrary contained in this
Section 1.4:  (1) Tenant must
elect to exercise its right of first offer herein with respect to the entire
First Offer Space identified in any First Offer Notice delivered by Landlord to
Tenant and may not elect to lease only a portion thereof; (2) once Tenant
has leased an entire full floor of First Offer Space pursuant to the provisions
of this Section 1.4, Tenant shall have no further rights to lease any
additional space under this Section 1.4; (3) if Tenant leases a
partial floor pursuant to the exercise of its first offer right, Tenant shall
have no further rights under this Section 1.4 to lease any other space
other than the remainder of such floor when and if such space becomes available
for lease as provided above in

 

6

 

this Section 1.4;
and (4) subject to and except as provided in clauses (2) and (3)
hereinabove, Tenant’s right of first offer to lease any First Offer Space not
previously identified in any First Offer Notice delivered by Landlord to Tenant
shall not terminate as a result of Tenant’s election or deemed election to
refuse to lease any other First Offer Space so identified in a First Offer
Notice at that time, and shall continue until the first time Landlord is about
to first accept or submit a Third Party Offer for such space to a third party
as provided above in this Section 1.4, in which case the foregoing
procedures of this Section 1.4 shall apply with respect to such
non-previously identified First Offer Space.

 

1.4.6        First Offer Space Term; First Offer Space Commencement
Date.  The lease term for any First Offer Space
(the “First Offer Space Term”)
leased by Tenant hereunder and the commencement of Tenant’s payment of the
First Offer Space Rent for such First Offer Space (the “First Offer Space Commencement Date”) shall
commence upon the earlier of (i) the date Tenant commences business
operations in such First Offer Space, or (ii) the last day of the
Construction Period for such First Offer Space, and shall expire as and when
provided in Section 1.4.3 above.

 

1.4.7        Amendment to Lease.  If Tenant
timely exercises Tenant’s right to lease any First Offer Space as set forth
herein, then, within thirty (30) days thereafter, Landlord and Tenant shall
execute an amendment to this Lease (a “First
Offer Space Amendment”) to provide for Tenant’s lease of the First
Offer Space upon the terms and conditions as set forth in this
Section 1.4.

 

1.4.8        Termination of Right of First Offer. 
The rights contained in this Section 1.4 are personal to the
original Tenant executing this Lease (the “Original
Tenant”) and any Affiliate (as such term is defined in
Section 14.6 below) to which Tenant’s entire interest in this Lease has
been assigned pursuant to Section 14.6, and may only be exercised by the
Original Tenant or such Affiliate assignee, as the case may be (but not by any
sublessee or other assignee or transferee of Tenant’s interest in the Lease) if
the Original Tenant, or such Affiliate assignee, as the case may be, has not
assigned this Lease, or subleased (other than subleases to Affiliates or
Business Affiliates pursuant to Sections 14.6 and 14.7 below) more than
thirty-four percent (34%) of the rentable square feet of the original Premises
at the time Tenant delivers Tenant’s Election Notice to Landlord.  At Landlord’s option, in addition to
Landlord’s other remedies set forth in this Lease, Tenant shall not have the
right to lease the applicable First Offer Space, as provided in this
Section 1.4, if, as of the date of the attempted exercise of such right of
first offer by Tenant, or as of the scheduled date of delivery of such First
Offer Space to Tenant, Tenant is in monetary or material non-monetary default
under this Lease after the expiration of any applicable notice and cure period.

 

ARTICLE 2

LEASE TERM

 

2.1           Lease Term.  The terms and provisions of this Lease shall
be effective as of the date of this Lease except for the provisions of this
Lease relating to the payment of Rent. 
The term of this Lease (the “Lease
Term”) shall be as set forth in Section 7.1 of the Summary and
shall commence on the date (the “Lease
Commencement Date”) set forth in Section 7.2 of the Summary
subject, however, to the terms of the Tenant Work Letter, and shall terminate
on the date (the “Lease Expiration Date”)
set forth in Section 7.3 of the Summary, unless this Lease is sooner
terminated as hereinafter provided, or extended pursuant to the Extension
Option Rider attached hereto.  For
purposes of this Lease, the term “Lease Year”
shall mean each consecutive twelve (12) month period during the Lease Term,
provided that the last Lease Year shall end on the Lease Expiration Date.

 

2.2           Beneficial Occupancy.  Tenant shall have the right to occupy and
commence business operations in all or any portions of the Premises at any time
after Landlord has delivered the Premises to Tenant but prior to the Lease
Commencement Date (the “Early Occupancy
Period”), provided that: 
(i) a temporary certificate of occupancy or its equivalent shall
have been issued by the appropriate governmental authorities for the Premises
permitting Tenant to legally occupy such portion of the Premises; and
(ii) during any such occupancy of and business operations within the
Premises by Tenant prior to the Lease Commencement Date, all of the terms and
conditions of this Lease shall apply (including, without limitation, Tenant’s
obligation to pay, pursuant to Sections 6.1.7 and 6.2 below, for the
cost of utilities consumed in connection with any Supplemental Equipment
located in or serving the Premises, and any over-standard utilities and services
provided to and/or consumed in the Premises) as though the Lease Commencement
Date had occurred, although the Lease Commencement Date shall not actually
occur until the date set forth in Section 7.2 of the Summary; provided,
however, during such Early Occupancy Period, Tenant shall not be obligated to
pay to Landlord any Base Rent, Operating Expenses, Tax Expenses or Utilities
Costs for the Premises or parking charges for the number of parking passes
within the Parking Allotment.

 

2.3           Confirmation of
Lease Dates Amendment. 
Within six (6) months following the Lease Commencement Date,
Landlord shall execute and deliver to Tenant an amendment in the form as set
forth

 

7

 

in Exhibit C,
attached hereto (the “Confirmation of Lease
Dates Amendment”), which Confirmation of Lease Dates Amendment
Tenant shall execute and return to Landlord within ten (10) business days after
receipt thereof; provided, however, that if said Confirmation of Lease Dates
Amendment is not factually correct, then Tenant shall make such changes as are
necessary to make the Confirmation of Lease Dates Amendment factually correct
and shall thereafter execute and return such Confirmation of Lease Dates
Amendment to Landlord within such ten (10) business day period and thereafter
the dates set forth on such Confirmation of Lease Dates Amendment shall be
conclusive and binding upon Tenant and Landlord, unless Landlord, within
fifteen (15) business days following receipt of Tenant’s changes, sends a
notice to Tenant rejecting Tenant’s changes, whereupon this procedure shall be
repeated until the parties either (i) mutually agree upon the contents of Exhibit C,
or (ii) the contents are determined by arbitration pursuant to
Section 26.32, below.  Failure of
Tenant to execute and deliver to Landlord within such 10-business day period
the Confirmation of Lease Dates Amendment submitted by Landlord within such
6-month period or Landlord to reject Tenant’s changes thereto within such
15-business day period, as applicable, shall constitute an acknowledgment by
Tenant or Landlord (as applicable) that the statements included in such
Confirmation of Lease Dates Amendment so submitted by Landlord or Tenant (as
applicable) are true and correct, without exception, and binding upon Landlord
and Tenant.

 

In the event Landlord
shall fail to send Tenant the Confirmation of Lease Dates Amendment within six
(6) months following the Lease Commencement Date, Tenant may execute and
deliver to Landlord the Confirmation of Lease Dates Amendment in the form as
set forth in Exhibit C, which Confirmation of Lease Dates Amendment
Landlord shall execute and return to Tenant within ten (10) business days after
receipt thereof by Landlord (provided that if said Confirmation of Lease Dates
Amendment submitted by Tenant is not factually correct, Landlord shall make
such changes thereto as are necessary to make such Confirmation of Lease Dates
Amendment factually correct, which revised Confirmation of Lease Dates
Amendment shall thereafter be subject to the procedure for finalization set
forth above in this Section 2.3). 
Failure of Landlord to execute and deliver to Tenant within such
10-business day period the confirmation of Lease Dates Amendment initially
submitted by Tenant shall constitute an acknowledgment by Landlord that the
statements included in such confirmation of Lease Dates Amendment so submitted
by Tenant are true and correct, without exception, and binding upon Landlord
and Tenant.

 

2.4           Option to Extend.  Tenant’s rights and obligations with respect
to extending the initial Lease Term are set forth in the Extension Option Rider
attached to this Lease.

 

ARTICLE 3

BASE RENT

 

3.1           Base Rent.  Tenant shall pay, without notice or demand,
to Landlord or Landlord’s agent at the management office of the Real Property,
or at such other place as Landlord may from time to time designate in writing,
in currency, by wire transfer or a check for currency which, at the time of
payment, is legal tender for private or public debts in the United States of
America, base rent (“Base Rent”)
as set forth in Section 8 of the Summary, payable in equal monthly
installments as set forth in Section 8 of the Summary in advance on or
before the first (1st) business day of each and every month
during the Lease Term, without any setoff or deduction except as otherwise
expressly provided in this Lease.  The
Base Rent for the first (1st) full month of the Lease Term shall be
paid by Tenant to Landlord at the time of Tenant’s execution of this
Lease.  If any rental payment date
(including the Lease Commencement Date) falls on a day of the month other than
the first day of such month or if any rental payment is for a period which is
shorter than one month, then the rental for any such fractional month shall be
a proportionate amount of a full calendar month’s rental based on the
proportion that the number of days in such fractional month bears to the number
of days in the calendar month during which such fractional month occurs.  All other payments or adjustments required
to be made under the terms of this Lease that require proration on a time basis
shall be prorated on the same basis.

 

3.2           Abatement of Base
Rent.  Notwithstanding anything to
the contrary contained herein, Landlord hereby agrees to abate Tenant’s
obligation to pay monthly Base Rent otherwise payable for (i) the
fourth (4th) and fifth (5th) floors of the
Premises for the second (2nd) through tenth (10th)
months of the initial Lease Term, and (ii) the Base Rent otherwise payable
for the second (2nd) through the thirteenth (13th)
months of the initial Lease Term for the third (3rd) floor of
the Premises (collectively, the “Abated Rent”);
provided, however, if as of the first (1st) day such applicable
month scheduled for abatement, Tenant is in monetary or material non-monetary
default under this Lease, the monthly Base Rent abatement for such applicable
month shall be suspended until such default is cured by Tenant (with the amount
of such suspended Abated Rent to be credited toward the next monthly
installment of Base Rent due under this Lease for the first month immediately
following such cure that Tenant is not in monetary or material non-monetary
default under this Lease).  During such
abatement periods, Tenant shall remain responsible for the payment of all of
its other monetary obligations under this Lease, including all amounts payable
under Article 4 below.

 

8

 

ARTICLE 4

ADDITIONAL RENT

 

4.1           Additional Rent.  In addition to paying the Base Rent
specified in Article 3 of this Lease, Tenant shall pay to Landlord as
additional rent the sum of the following: 
(i) ”Tenant’s Share”
(as such term is defined below) of the annual Operating Expenses allocated to
the Building pursuant to Section 4.3.4, which are in excess of the amount
of Operating Expenses allocated to the Building and applicable to the Expense
Base Year (subject, however, to the annual cap on Controllable Expenses in
Section 4.3.5 below); plus (ii) Tenant’s Share of the annual Tax
Expenses allocable to the Building pursuant to Section 4.3.4, which are in
excess of the amount of the Tax Expenses allocated to the Building and
applicable to the Tax Expense Base Year; plus (iii) Tenant’s Share of the
annual Utilities Costs allocated to the Building pursuant to Section 4.3.4
which are in excess of the amount of Utilities Costs allocated to the Building
and applicable to the Utilities Base Year. 
Such additional rent, together with any and all other amounts payable by
Tenant to Landlord pursuant to the terms of this Lease, shall be hereinafter
collectively referred to as the “Additional
Rent.”  The Base Rent and
Additional Rent are herein collectively referred to as the “Rent.” 
All amounts due under this Article 4 as Additional Rent shall be
payable for the same periods and in the same manner, time and place as the Base
Rent except as otherwise provided in this Lease.  Without limitation on other obligations of Tenant which shall
survive the expiration of the Lease Term, but subject to the limitations set
forth in Section 4.3.2 below, the obligations of Tenant to pay the
Additional Rent provided for in this Article 4, and Landlord’s obligation
to refund any overpayment by Tenant, shall survive the expiration of the Lease
Term for a period of two (2) years from the date of expiration or
termination of this Lease; provided, however, that any such payments made by
Tenant of any Additional Rent or any refund to Tenant by Landlord of any
overpayments of such Additional Rent shall not constitute a waiver by either
Tenant or Landlord, as the case may be, of any amount that Tenant or Landlord
(as the case may be) contend, now or in the future (subject to the limitations
set forth in this Lease or under applicable Laws) are in dispute.

 

4.2           Definitions.  As used in this Article 4, the
following terms shall have the meanings hereinafter set forth:

 

4.2.1        “Calendar Year”
shall mean each calendar year in which any portion of the Lease Term falls,
through and including the calendar year in which the Lease Term expires.

 

4.2.2        “Expense Base Year”
shall mean the year set forth in Section 9.1 of the Summary.

 

4.2.3        “Expense Year”
shall mean each Calendar Year.

 

4.2.4        “Operating Expenses”
shall mean all expenses, costs and amounts which Landlord shall pay during any
Expense Year because of or in connection with the management, maintenance,
repair, replacement or operation of the Real Property, all as determined in
accordance with sound real estate management practices consistently applied,
including, without limitation, any amounts paid for:  (i) the cost of operating, maintaining, repairing,
renovating and managing the utility systems, mechanical systems, sanitary and
storm drainage systems, and any escalator and/or elevator systems, and the cost
of supplies and equipment and maintenance and service contracts in connection
therewith; (ii) the cost of licenses, certificates, permits and
inspections and the cost of reasonably contesting the validity or applicability
of any governmental enactments which are reasonably anticipated to reduce
Operating Expenses, and the costs incurred in connection with the
implementation and operation (by Landlord or any common area association(s)
formed for LNR Warner Center) of any government mandated transportation demand
management program (including any such program required to be implemented for
the Project by the City of Los Angeles as a condition to the City’s approvals
of the development of the Project); (iii) subject to the restrictions in
Sections 4.2.4.2 and 4.3.6 below, the cost of insurance carried by
Landlord, in such amounts as Landlord may reasonably determine or as may be
required by this Lease; provided, however, to the extent Landlord elects to
provide insurance for unusual or expensive coverages or endorsements such as earthquake
and flood and the same is in addition to any insurance required to be
maintained by Landlord under this Lease, and such insurance is materially in
excess of the types or amounts of insurance carried by landlords of Comparable
Buildings (as defined below) for such unusual or expensive coverages or
endorsements, the incremental cost of such materially excess insurance shall
not be included in Operating Expenses; provided, further, however, that
Landlord’s insurance shall be deemed to have satisfied such Comparable
Buildings standard and the foregoing exclusion from Operating Expenses shall
not apply to the extent that other office buildings in Southern California
owned by Landlord or an entity affiliated with or related to Landlord or any of
Landlord’s members or submembers are covered by substantially similar insurance
coverage terms pertaining to such unusual or expensive coverages or
endorsements (e.g., coverage rate and deductible percentage(s) as carried by
Landlord); (iv) the cost of landscaping, relamping, and all supplies,
tools, equipment and materials used in the operation, repair and maintenance of
the Real Property; (v) the cost of parking area repair and

 

9

 

maintenance, including,
but not limited to, repainting, restriping, and cleaning; (vi) fees,
charges and other costs, including reasonable consulting fees, legal fees and
accounting fees, of all contractors engaged by Landlord or otherwise reasonably
incurred by Landlord in connection with the management, operation, maintenance
and repair of the Real Property; (vii) any management agreements,
including the cost of any management fee and the fair rental value of any
on-site management office space (not exceeding 2,500 rentable square feet) provided
thereunder, provided, however, (I) the management fee shall not exceed the
greater of (A) three and one-half percent (3.5%) of the gross
revenues (excluding unapplied security deposits and unearned prepaid rent) of
the Real Property, or (B) the management fees (charged on a percentage of
gross revenues basis) reasonably and customarily paid to independent third
party management companies by landlords of Comparable Buildings (the “Market Management Fee”), and (II) if
the percentage used in calculating the management fee included in Operating
Expenses during the Expense Base Year is less than the Market Management Fee
paid during the Expense Base Year, then the percentage used to calculate the
management fees included in Operating Expenses in any Expense Year subsequent
to the Expense Base Year shall not be increased above the percentage used to
calculate the management fees included in Operating Expenses during the Expense
Base Year, unless for each subsequent Expense Year that Landlord desires to
include such increased percentage, Landlord also increases the percentage used
to calculate the management fees included in Operating Expenses during the
Expense Base Year to the lesser of (x) such Market Management Fee
percentage, and (y) the percentage used to calculate the management fee
for the Operating Expenses in such subsequent Expense Year; (viii) wages,
salaries and other compensation and benefits of all persons engaged in the
operation, management, maintenance or security of the Real Property (that are
not above the level of Project manager or Project engineer), and employer’s
Social Security taxes, unemployment taxes or insurance, and any other taxes
which may be levied on such wages, salaries, compensation and benefits;
provided, that if any employees of Landlord provide services for more than one
project of Landlord, then a prorated portion of such employees’ wages, benefits
and taxes shall be included in Operating Expenses based on the portion of their
working time devoted to the Real Property; (ix) payments under any
easement, license, operating agreement, declaration, restrictive covenant,
underlying or ground lease (excluding rent), or instrument pertaining to the
sharing of costs by the Real Property or any portion thereof, including,
without limitation, any covenants, conditions or restrictions now or hereafter
recorded against or affecting the Real Property; (x) operation, repair and
maintenance of all “Systems and Equipment,”
as that term is defined in Section 4.2.5 of this Lease, and components
thereof; (xi) the cost of janitorial service, alarm and security service,
window cleaning, trash removal, maintenance of curbs and walkways, and repairs
to roofs; (xii) annual amortization (including interest on the unamortized
cost at the Amortization Interest Rate, as defined below) of the cost of
acquiring, or the rental expense of renting, personal property used in the
maintenance, operation and repair of the Real Property; and (xiii) annual
amortization (including interest on the unamortized cost at the Amortization
Interest Rate) of the cost of any capital alterations, capital replacements,
capital additions, capital repairs and capital improvements incurred in
connection with the Project (I) which are intended to reduce Operating
Expenses in connection with the management, maintenance, repair, replacement or
operation of the Real Property, but only to the extent of the cost savings
reasonably anticipated by Landlord (based upon sound documentation) to result
therefrom at the time of such expenditure to be incurred in connection
therewith, (II) made to the Real Property after the Lease Commencement
Date that are required under any governmental law or regulation (or amendment
thereof) not in effect on the Lease Commencement Date, (III) pertaining to
replacement of wall and floor coverings, ceiling tiles and fixtures in lobbies,
corridors, restrooms and other common or public areas or facilities, or
(IV) which are reasonably determined by Landlord to be reasonably required
to maintain the functional character of the Real Property as a first-class
office building project (except that in no event shall the amortized amount of
the cost which Landlord may include in Operating Expenses pursuant to this
Section 4.2.4(xiii)(IV): 
(A) exceed $100,000.00 in any particular Expense Year; or
(B) be attributable to the initial construction of any new office
buildings, retail buildings and/or parking structures within the Project).

 

All such costs described
in Section 4.2.4(xiii) above and the amortization of any other capital
expenditures under this Section 4.2.4 (including, without limitation,
Section 4.2.4(xii) above and Section 4.2.4.1(t) below) shall be
amortized over the useful life of the particular item in question as Landlord
shall reasonably determine in accordance with standard real estate management
and accounting practices consistently applied by Landlord and consistent with
standard real estate management and accounting practices used by landlords of
other first-class office buildings in the Warner Center area of Woodland Hills,
California (collectively, the “Comparable
Buildings”).  As used herein,
the “Amortization Interest Rate”
shall mean a rate equal to the floating commercial loan rate announced from
time to time by Bank of America, a national banking association, or its
successor, as its reference rate, plus one percent (1%) per annum.

 

If, during all or any
part of any Expense Year or the Expense Base Year, Landlord shall not furnish
any particular items of work or service (the cost of which, if performed by
Landlord, would be included in Operating Expenses) to a tenant (including
Tenant) who has undertaken to perform such item of work or service in lieu of
the performance thereof by Landlord, Operating Expenses shall be deemed to be
increased by an amount equal to the additional Operating Expenses which would
reasonably have been

 

10

 

incurred during such
period by Landlord if Landlord had at its own expense furnished such item of
work or service to such tenant.  In
addition, if the Building (and during the period of time when any other
buildings are fully constructed and ready for occupancy and are owned by
Landlord and included by Landlord within the Project) is (are) less than 95%
occupied during all or a portion of any Expense Year (including the Expense
Base Year), Landlord shall make an appropriate adjustment to the variable
components of Operating Expenses for such year or applicable portion thereof,
employing sound accounting and management principles, to determine the amount
of Operating Expenses that would have been paid had the Building (and any of
such other buildings, as applicable) been 95% occupied; and the amount so
determined shall be deemed to have been the amount of Operating Expenses for such
year, or applicable portion thereof.  In
determining such adjustment pursuant to the immediately preceding sentence, any
gross receipts taxes, management fees or other expenses that are tied to the
receipt of rental income shall be determined as if the applicable buildings
described above were 95% occupied during any Expense Year (including the
Expense Base Year) and all tenants were paying the full rental initially
payable under their respective leases (as opposed to half-rent or abated rent).

 

Subject to the provisions
of Section 4.3.4 below, Landlord shall have the right, from time to time,
to equitably allocate some or all of the Operating Expenses, Tax Expenses and
Utilities Costs (as defined below) among the Building, and the Other Existing Buildings
and/or among different tenants of the Project, and/or among different and
additional buildings of the Project, as and when such different and/or
additional buildings are constructed and added to (and/or excluded from) the
Project or otherwise (collectively, the “Cost
Pools”).  Such Cost Pools may
include, but shall not be limited to, the office space tenants and retail space
tenants (and if applicable, child care tenants or occupants) of the
Project.  Such Cost Pools may also
include allocation of certain Operating Expenses, Tax Expenses and Utilities
Costs within or under covenants, conditions and restrictions affecting the
Project.  In addition, Landlord shall
have the right from time to time, in its reasonable discretion, to include or
exclude existing or future buildings in the Project for purposes of determining
Operating Expenses, Tax Expenses and Utilities Costs and/or the provision of
various services and amenities thereto, including allocation of Operating
Expenses, Tax Expenses and Utilities Costs in any such Cost Pools.  The Operating Expenses, Tax Expenses and/or
Utilities Costs within each such Cost Pool shall be allocated and charged to
the tenants within such Cost Pool in an equitable manner over all Expense
Years.  In addition, in the event any
facilities, services or utilities used in connection with the Project are
provided from another building outside the Project owned or operated by
Landlord or vice versa, the costs incurred by Landlord in connection therewith
shall be allocated by Landlord to Operating Expenses, Tax Expenses and/or
Utilities Costs, as the case may be, on an equitable basis.

 

4.2.4.1     Notwithstanding the
foregoing, for purposes of this Lease, Operating Expenses (and to the extent
applicable, Utilities Costs) shall not include the following:

 

(a)           brokerage commissions,
space planning costs, finders’ fees, attorneys’ fees and other costs incurred
by Landlord in connection with leasing or attempting to lease space within the
Real Property;

 

(b)           costs, including
permit, license and inspection costs, incurred with respect to the installation
of tenant improvements made for any tenants in the Real Property or incurred in
renovating or otherwise improving, preparing, decorating, painting or
redecorating vacant space for tenants or other occupants of the Real Property.

 

(c)           interest, points, fees
and principal payments on any mortgages encumbering the Real Property, and
other debt costs, if any, except as specifically included in
Sections 4.2.4(xii) and (xiii) above and Section 4.2.4.1(t) below;

 

(d)           costs of correcting
defects in, or significant design error relating to, the initial design or
construction of the Building, the Parking Facilities or any other improvements
to the Real Property or equipment or materials used therewith;

 

(e)           advertising and
promotional expenditures;

 

(f)            costs of any items
(including, but not limited to, costs incurred by Landlord with respect to
goods, services and utilities sold and/or supplied to tenants and occupants of
the Real Property, and/or for the repair of damage to the Building for items
which are reimbursable under any contractor, manufacturer or supplier warranty)
to the extent Landlord receives reimbursement from insurance or condemnation
proceeds, or from a contractor, manufacturer, supplier or any other third party
pursuant to any warranty or otherwise or would have been reimbursed if Landlord
had carried the insurance Landlord is required to carry pursuant to this Lease
(other than reimbursement by tenants pursuant to the Operating Expenses pass-through
provisions of their leases); such proceeds shall be credited to Operating
Expenses in the year in which received;

 

11

 

(g)           expenses in connection
with services or other benefits which are not offered to Tenant or for which
Tenant is charged directly but which are provided to any other tenant or
occupant of the Real Property at no cost (or are separately reimbursed by such
other tenants);

 

(h)           attorneys’ fees and
other costs and expenses incurred in connection with negotiations or disputes
with present or prospective tenants or other occupants or prospective occupants
of the Real Property (including costs incurred due to violations by tenants of
the terms and conditions of their leases), or any other attorneys’ fees
incurred in connection with the Real Property (including, without limitation,
any financing, sale or syndication of the Real Property), except (A) as
specifically enumerated as an Operating Expense in this Lease and/or
(B) to the extent the expenditure of such attorneys’ fees generally
benefits all of the tenants of the Building and any other buildings in the
Project owned by Landlord;

 

(i)            the wages and benefits
of any employee who does not devote substantially all of his or her employed
time to the operation and management of the Building or Real Property unless
such wages and benefits are prorated to reflect time spent on operating and
managing the Building and Real Property vis-à-vis time spent on matters
unrelated to operating and managing the Building and Real Property;

 

(j)            compensation
(including benefits) of any employee of Landlord above the grade of Project
manager or Project engineer;

 

(k)           costs of additions,
alterations, repairs or improvements, equipment replacement and all other items
which under standard real estate management and accounting practices
consistently applied are properly classified as capital expenditures, except
those costs set forth in Sections 4.2.4(xii) and (xiii) above, and except
as provided in Section 4.2.4.1(t) below;

 

(l)            rentals and other
related expenses for leasing heating, ventilation and air conditioning (“HVAC”) systems, elevators, or other items
(except when needed in connection with normal repairs and maintenance of the
Building and/or Real Property and/or to an ameliorate an emergency condition in
the Building and/or Real Property) which if purchased, rather than rented,
would constitute a capital improvement not included in Operating Expenses
pursuant to this Lease;

 

(m)          costs and overhead and profit
increment paid to Landlord or to subsidiaries or affiliates of Landlord for
goods and/or services in or to the Real Property to the extent the same exceeds
typical costs and overhead and profit increment of such goods and/or services
rendered by qualified unaffiliated third parties on a competitive basis;

 

(n)           any costs for which
Landlord has been reimbursed (other than through the Operating Expenses
pass-through provisions of other tenants’ leases) or for which Landlord
receives a credit, refund or discount;

 

(o)           costs of signs (other
than building directories and signage for various equipment rooms and common
areas) in or on the Real Property or any buildings located on the Real Property
which identify the owner of the Real Property or other tenants’ signs;

 

(p)           interest, penalties,
late charges, liquidated damages or other costs arising out of Landlord’s
failure to make timely payment of any of its obligations under this Lease or
the Underlying Documents, including, without limitation, Landlord’s failure to
make timely payment of any item that is included in Operating Expenses, Tax
Expenses, or Utilities Costs, and any penalties or fines imposed upon Landlord
due to Landlord’s violation of any applicable Laws or the Underlying Documents;

 

(q)           reserves of any kind,
including replacement reserves for bad debt loss or lost rent (but Operating
Expenses may include reasonable reserves imposed upon the Real Property as part
of the assessments under any covenants, conditions and restrictions recorded
against the Real Property);

 

(r)            any costs expressly
excluded from Operating Expenses elsewhere in this Lease;

 

(s)           any ground lease
rental;

 

(t)            depreciation and
amortization, except as expressly provided in this Section 4.2.4, and
except on materials, tools, supplies and vendor-type equipment purchased by
Landlord to enable Landlord to supply services Landlord might otherwise
contract for with a third party, and when depreciation or amortization is
permitted or required, the item shall be amortized over its useful

 

12

 

life in the manner
described in Section 4.2.4 above, together with interest on the
unamortized costs at the Amortization Interest Rate;

 

(u)           costs (including,
without limitation, fines, penalties, interest, and costs of repairs,
replacements, alterations and/or improvements) incurred in bringing the Real
Property into compliance with building codes and other applicable Laws in
effect as of the Lease Commencement Date and as interpreted by applicable governmental
authorities as of such date, including, without limitation, any costs to
correct building code violations pertaining to the initial design or
construction of the Building, the Parking Facilities or any other improvements
to the Real Property, to the extent such violations exist as of the Lease
Commencement Date under any applicable building codes in effect and as
interpreted by applicable governmental authorities as of such date;

 

(v)           costs incurred by
Landlord due to the violation by Landlord of the terms and conditions of
(A) any lease of space within the Real Property and/or (B) any
Underlying Documents or ground leases pertaining to the Real Property;

 

(w)          Landlord’s general
corporate overhead and administrative expenses, except for the property
management fee permitted pursuant to the terms of Section 4.2.4 above;

 

(x)            costs of acquisition
of sculptures, painting and other objects of art;

 

(y)           costs incurred to
comply with applicable Laws with respect to cleanup, removal, investigation
and/or remediation (collectively, “Remediation
Costs”) of any Hazardous Materials (as such term is defined in
Article 5 below) in, on or under the Real Property and/or the Building to
the extent such Hazardous Materials: 
are (1) present in the soil or groundwater of the Project; (2) in
existence as of the Lease Commencement Date and in violation of applicable Laws
in effect as of the Lease Commencement Date, and were of such a nature that a
federal, state or municipal governmental or quasi-governmental authority, if it
had then had knowledge of the presence of such Hazardous Materials, in the
state and under the conditions that the same existed in the Building or on the
Real Property, would have then required removal, remediation or other action
with respect to such Hazardous Materials; and/or (3) introduced onto the
Real Property and/or Building after the Lease Commencement Date by Landlord or
any of Landlord’s agents, employees, contractors or tenants in violation of
applicable Laws in effect at the date of introduction, and were of such a
nature that a federal, state or municipal governmental or quasi-governmental
authority, if it had then had knowledge of the presence of such Hazardous
Materials, in the state and under the conditions that the same existed in the
Building or on the Real Property, would have then required removal, remediation
or other action with respect to such Hazardous Materials;

 

(z)            any Tax Expenses (and
Operating Expenses shall not include any Utilities Costs);

 

(aa)         any compensation paid to clerks,
attendants or other persons in commercial concessions operated by Landlord
(other than the Parking Facilities);

 

(bb)         costs arising out of the
operation, management, maintenance or repair of any retail premises in the
Project or any other retail areas operated by Landlord or its agents,
contractors or vendors to the extent such costs are uniquely attributable (and
separately identifiable) to such retail premises or areas (as opposed to
general office use tenancies) or are extraordinary, separately identifiable
expenses arising in connection therewith;

 

(cc)         costs for which Landlord
has been compensated by a management fee, to the extent that the inclusion of
such costs in Operating Expenses would result in a double charge to Tenant;

 

(dd)         costs arising from
Landlord’s charitable or political contributions;

 

(ee)         costs arising from any
voluntary special assessment on the Building or the Project by any transit
district authority or any other governmental entity having the authority to
impose such assessment, unless such costs are included in the Expense Base Year
or Utilities Base Year at the initial rate in effect for such assessments;

 

(ff)           costs associated with
the operation of the business of the partnership or entity which constitutes
Landlord as the same are distinguished from the costs of operation of the
Building and/or the Project, including partnership accounting and legal
matters, costs of defending any lawsuits with or claims by any mortgagee
(except as the actions of Tenant may be in issue), costs of

 

13

 

selling, syndicating,
financing, mortgaging or hypothecating any of Landlord’s interest in the
Building or the Project, costs of any disputes between Landlord and its
employees (if any) not engaged in Building and/or Project operation, disputes
of Landlord with Project management, or outside fees paid in connection with
disputes with other tenants (except to the extent the expenditure of such
outside fees generally benefit all tenants of the Building and any other
buildings in the Project owned by Landlord, and Landlord included such category
of expenses or similar types of expenses, if actually incurred, in the Expense
Base Year);

 

(gg)         costs of any “tap fees”
or any sewer or water connection fees for the benefit of any particular tenant
in the Building or the Project;

 

(hh)         any “validated” parking
for any entity;

 

(ii)           the cost of providing
any service directly to and paid directly by any tenant;

 

(jj)           rent for any office
space occupied by Building or Project management personnel to the extent the
size of such office space exceeds 2,500 rentable square feet or the rental rate
for such office space exceeds the fair market rental value of comparable-sized
office space occupied by management personnel of the Comparable Buildings;

 

(kk)         costs arising from the
gross negligence or willful misconduct of Landlord or the Landlord Parties, as
that term is defined in Section 10.1 of this Lease;

 

(ll)           any above-Building
standard cleanup, including construction and special events cleanup (other than
special events where Tenant is invited);

 

(mm)       costs incurred in
connection with the original construction and development of the Building or
Project;

 

(nn)         costs of flowers, gifts,
balloons, etc. provided to any prospective tenants, Tenant, other tenants, and
occupants of the Building, and entertainment, dining or travel expenses, except
to the extent customarily included in the operating expenses of Comparable
Buildings;

 

(oo)         costs of third party
non-tenant parties;

 

(pp)         material costs associated
with the operation, maintenance and/or repairs of any portions of the common
areas of the Project which are dedicated for the exclusive use of other tenants
of the Project, but only to the extent such costs are easily and readily
identifiable and separable without undue accounting or other costs to Landlord;
and

 

(qq)         penalties resulting from
Landlord’s non-compliance with the maximum allowable p.m. peak hour trips for
the Premises.

 

4.2.4.2     Landlord hereby agrees that
the cost of any new type or increased amount of insurance coverage (or
increased limits of insurance or decrease in the amount of deductibles) which
is obtained or effected by Landlord during any Expense Year after the Expense
Base Year (but is not obtained or effected during the Expense Base Year) shall
be added to the Operating Expenses for the Expense Base Year (but at the rate
which would have been in effect during the Expense Base Year or the rate in
effect during such subsequent Expense Year, whichever is lower) prior to the
calculation of Tenant’s Share of Operating Expenses for each such Expense Year
in which such change in insurance is obtained or effected.  In the event that any of Landlord’s
insurance premiums applicable to the Real Property shall decrease in any
Expense Year subsequent to the Expense Base Year (including, without
limitation, as a result of any decrease in the amount or type of coverage or
increase in deductibles), Operating Expenses attributable to the Expense Base
Year, shall, commencing the year of such decrease, but only as long as and to
the extent such decrease remains in effect, thereafter be reduced by the amount
of such decrease in the insurance premiums.

 

4.2.4.3     Landlord further agrees that
any costs incurred in any Expense Year after the Expense Base Year or Utilities
Base Year because of any added new type of discretionary services which were
readily available during the Expense Base Year or Utilities Base Year, as
applicable, and customarily provided by landlords of Comparable Buildings
during the Expense Base Year or Utilities Base Year, as applicable (but not by
Landlord), and not included in the Expense Base Year or Utilities Base Year, as
applicable shall be added to and included in the Expense Base Year or Utilities
Base Year, as applicable for purposes of determining the Excess payable for
such Expense Year in which such added new type of discretionary services are so
provided, as if such services were provided in the Expense Base Year or
Utilities Base Year, as applicable (but at the rate for such services which
would have been in

 

14

 

effect during the Expense
Base Year or Utilities Base Year, as applicable, or the rate in effect during
such subsequent Expense Year, whichever is lower); provided, however, the
foregoing provision shall not apply to the costs of:  (i) any capital additions, capital alterations, capital
repairs or capital improvements which shall be governed by the provisions of
Sections 4.2.4 (xii) and (xiii) and Section 4.2.4.1(t) above; or
(ii) security and/or parking control services required to operate the
Project as a first-class office building project.  In addition, if in the event and to the extent any portion of the
Project is covered by a warranty or service agreement which provides
warranty-type protection at any time during the Expense Base Year and/or
Utilities Base Year and is not covered by such warranty or such warranty-type
protection under such service agreement in a subsequent Expense Year to the
same extent, Operating Expenses for the Expense Base Year and/or Utilities
Costs for the Utilities Base Year shall be deemed increased by the amount
Landlord would have incurred during the applicable Base Year with respect to
the items or matters covered by the subject warranty or warranty-type
protection (net of the cost of the warranty or the service agreement included
in the applicable base year), had such warranty or such service agreement not
been in effect during the applicable Base Year.

 

4.2.4.4     Any refunds or discounts
actually received by Landlord for any category of Operating Expenses, Utilities
Costs and/or Tax Expenses shall reduce the Operating Expenses, Utilities Costs
and/or Tax Expenses, as applicable, in the applicable Expense Year pertaining
to such category of Operating Expenses, Utilities Costs and/or Tax Expenses, as
applicable.  Notwithstanding the
foregoing provisions of this Article 4 to the contrary, Landlord will not
collect or be entitled to collect Operating Expenses, Utilities Costs or Tax
Expenses from all of its tenants in an amount which is in excess of one hundred
percent (100%) of the Operating Expenses, Utilities Costs and Tax Expenses
actually paid or incurred by Landlord in connection with the operation of the
Building and the Real Property, and Landlord shall make no profit from the
collection of Operating Expenses, Utilities Costs and Tax Expenses.

 

4.2.5        “Systems and
Equipment” shall mean any plant, machinery, transformers, duct work,
cable, wires, and other equipment, facilities, and systems designed to supply
heat, ventilation, air conditioning and humidity or any other services or
utilities, or comprising or serving as any component or portion of the
electrical, gas, steam, plumbing, sprinkler, communications, alarm, security,
or fire/life safety systems or equipment, or any other mechanical, electrical,
electronic, computer or other systems or equipment which serve the Building in
whole or in part.

 

4.2.6        “Tax Expense Base
Year” shall mean the year set forth in Section 9.2 of the
Summary.

 

4.2.7        “Tax Expenses”
shall mean all federal, state, county, or local governmental or municipal
taxes, fees, charges or other impositions of every kind and nature, whether
general, special, ordinary or extraordinary, (including, without limitation,
real estate taxes, general and special assessments, transit taxes, leasehold
taxes or taxes based upon the receipt of rent, including gross receipts or
sales taxes applicable to the receipt of rent, unless required to be paid by
Tenant, personal property taxes imposed upon the fixtures, machinery,
equipment, apparatus, systems and equipment, appurtenances, furniture and other
personal property owned or leased by Landlord and used in connection with the
Real Property), which Landlord shall pay during any Expense Year (subject,
however, to the restrictions in Section 4.3.6 below) because of or in
connection with the ownership, leasing and operation of the Real Property or
Landlord’s interest therein (including any tax expenses, assessments and other
charges allocated to the Real Property under any declaration, restriction
covenant or other instrument pertaining to the sharing of costs by the Real
Property or any portion thereof, including any covenants, conditions or
restrictions now or hereafter recorded against or affecting the Real
Property).  For purposes of this Lease,
Tax Expenses for the Tax Expense Base Year and each Expense Year thereafter
shall be calculated as if the Building and the tenant improvements therein (at
a Building-standard amount) were fully constructed, and the Building and such
tenant improvements therein were fully assessed for real estate tax purposes;
and accordingly, during any Expense Year and during the portion of any Expense
Year occurring during the Tax Expense Base Year, Tax Expenses shall be deemed
to be increased appropriately.

 

4.2.7.1     Tax Expenses shall include,
without limitation:

 

(i)            Any tax on Landlord’s rent, right to rent or other
income from the Real Property or as against Landlord’s business of leasing any
of the Real Property;

 

(ii)           Any assessment, tax, fee, levy or charge in addition
to, or in substitution, partially or totally, of any assessment, tax, fee, levy
or charge previously included within the definition of real property tax, it
being acknowledged by Tenant and Landlord that Proposition 13 was adopted by
the voters of the State of California in the June 1978 election (“Proposition 13”) and that assessments,
taxes, fees, levies and charges may be imposed by governmental agencies for
such services as fire protection, street, sidewalk and road maintenance, refuse
removal and for other governmental

 

15

 

services formerly
provided without charge to property owners or occupants.  It is the intention of Tenant and Landlord
that all such new and increased assessments, taxes, fees, levies, and charges
and all similar assessments, taxes, fees, levies and charges be included within
the definition of Tax Expenses for purposes of this Lease;

 

(iii)          Any assessment, tax, fee, levy, or charge allocable to
or measured by the area of the Premises or the rent payable hereunder,
including, without limitation, any gross income tax upon or with respect to the
possession, leasing, operating, management, maintenance, alteration, repair,
use or occupancy by Tenant of the Premises, or any portion thereof; and

 

(iv)          Any assessment, tax, fee, levy or charge, upon this
transaction or any document to which Tenant is a party, creating or
transferring an interest or an estate in the Premises.

 

4.2.7.2     Landlord shall make such
reasonable efforts as Landlord shall in its reasonable discretion deem
reasonably necessary to minimize the amount of Tax Expenses, including
challenging (following reasonable written request therefor by Tenant or
otherwise) the amount of Tax Expenses with the applicable governmental
authority if Landlord reasonably determines a reduction in Tax Expenses is
likely to result therefrom.  Any
expenses incurred by Landlord in attempting to protest, reduce or minimize Tax
Expenses shall be included in Tax Expenses in the Expense Year such expenses
are paid but not in excess of the reduction in Tax Expenses achieved as a
result thereof.

 

4.2.7.3     Notwithstanding anything to
the contrary contained in this Section 4.2.7, there shall be excluded from
Tax Expenses:  (i) all excess
profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance
and succession taxes, estate taxes, federal and state income taxes, and other
taxes to the extent applicable to Landlord’s general or net income (as opposed
to rents, receipts or income attributable to operations at the Real Property);
(ii) any items included as Operating Expenses or Utilities Costs;
(iii) any items paid by Tenant under Section 4.4 of this Lease; (iv) Tax
Expenses attributable to the tenant improvements of other tenants’ or
occupants’ premises in the Real Property in excess of the Cut-Off Point, as
that term is defined in Section 4.4 below, but only to the extent such
taxes in excess of the Cut-Off Point are directly billed to and collected from
such tenants or occupants; (iv) penalties, interest and late charges
attributable to Landlord’s delinquent payment of any Tax Expenses; and
(vi) any real property taxes imposed with respect to any new office buildings,
retail buildings and/or parking structures constructed within the Project after
the date hereof, unless the initial real property taxes for such applicable
buildings and structures (calculated on a fully assessed and constructed basis
as described in Section 4.2.7 above) are included in the Tax Expenses for
the Tax Expense Base Year.

 

4.2.7.4     To the extent Landlord
obtains a refund, such tax refund shall be credited against Tax Expenses for
the Expense Year to which such refund is applicable and if as a result of such
refund as credit, Tenant overpaid Tax Expenses for such Expense Year, Tenant
shall be entitled to receive from Landlord a return of such overpayment, but
not in excess of the amount of Tax Expenses actually prepaid by Tenant prior to
the application of such refund/credit.

 

4.2.7.5     Special Proposition 13
Buy-Out.  Tenant acknowledges and
agrees that Tax Expenses payable by Tenant under this Article 4 include,
without limitation, any real estate taxes assessed upon or as a result of any
sale, transfer or other change in ownership of the Project or any portion
thereof (subject, however, to the provisions of Section 4.3.4 below),
including, without limitation, any Tax Expenses assessed or resulting from the
sale of the Improved Building H Property (as defined below).  Notwithstanding anything to the contrary
contained in this Lease, if the initial sale (or other change in ownership
which triggers reassessment of real estate taxes under Proposition 13) of
the Building and the parcel of land upon which the Building is located and
known as Lot 2 of Tract Map No. 52799-03 recorded in Book 1278, Pages
77679 of Maps in the Official Records of Los Angeles County (collectively, the
“Improved Building H Property”) is
consummated during the initial Lease Term for a purchase price in excess of the
Threshold Price, as defined below (such portion of the purchase price which
exceeds the Threshold Price shall be referred to herein as the “Excess Purchase Amount”), then upon the
closing date of such initial sale of the Improved Building H Property (the “Closing Date”), Landlord shall pay to
Tenant the Excess Reassessment Amount (as defined below).  As used herein, the term “Threshold Price” means $265.00 per rentable
square foot of the Building (i.e., $47,525,630.00, based upon
179,342 rentable square feet within the Building).  As used herein, the term “Excess
Reassessment Amount” means the product of multiplying
(i) Tenant’s Share in effect as of the Closing Date, calculated based upon
the rentable square feet of the Premises(but not including any First Offer
Space or other space in the Project leased by Tenant), by (ii) the present
value, as of the Closing Date, of the real estate taxes estimated to be payable
by Tenant pursuant to the terms of Proposition 13 during the Protection
Period (as defined below) and assessed upon and attributable solely to the
Excess Purchase Amount, calculated (A) based upon the real estate tax
percentage rate in effect with respect to the Improved Building H Property
upon the Closing Date, and (B) using a six percent (6%) discount rate
to determine such present value as of the Closing Date (with such present value
to be based upon the assumption that Tenant will pay such excess Tax Expenses
on an equal monthly basis during the

 

16

 

Protection Period).  The term “Excess
Reassessment Amount” shall not include any portion of the Tax
Expenses assessed against the Project or any portion which (1) is
attributable to the initial assessment of the value of the Project, or any
improvements within the Project (including the tenant improvements located in
the Building and the Other Existing Buildings), or (2) is attributable to
assessments which were pending immediately prior to the Closing Date and not
attributable to the initial sale of the Improved Building H Property, or
(3) is attributable to the annual inflationary increase of real estate
taxes.  As used herein, the “Protection Period” shall mean the period
commencing as of the later of January 1, 2006 or the Closing Date, and
continuing through and including the Lease Expiration Date of the initial Lease
Term.

 

4.2.7.5.1  Calculation of Excess
Reassessment Amount.  At least ten
(10) days prior to the Closing Date, Landlord shall provide Tenant with written
notice (“Landlord’s Calculation Notice”)
of Landlord’s calculation of the Excess Reassessment Amount pursuant to the
foregoing provisions of this Section 4.2.7.5, which calculation shall
include Landlord’s allocation, pursuant to Section 4.2.7.5.2 below, of the
purchase price for the Improved Building H Property if other portions of
the Project are concurrently sold to the same or affiliated buyer as described
in Section 4.2.7.5.2 below.  Such calculation
of the Excess Reassessment Amount shall be conclusive and binding upon Tenant
(without objection) unless Tenant notifies Landlord in writing of Tenant’s good
faith objection thereto within five (5) days after Tenant’s receipt of
Landlord’s Calculation Notice.  If
Tenant timely delivers such objection notice, then the parties shall attempt to
resolve the dispute prior to the Closing Date, failing which the calculation of
the Excess Reassessment Amount shall be determined by binding arbitration
pursuant to Section 26.32 below; however, such dispute and arbitration
proceedings shall not affect or delay the Closing Date, and if such dispute is
not resolved as of the Closing Date: 
(i) Landlord shall still pay to Tenant, upon the Closing Date, the
Excess Reassessment Amount as originally calculated by Landlord in Landlord’s
Calculation Notice subject to adjustment thereafter following resolution of
such dispute by mutual agreement of the parties or through such binding
arbitration; (ii) Landlord shall not distribute any additional monies
Tenant disputes that Landlord is required to pay over to Tenant pursuant to
this Section 4.2.7.5 until such dispute is so resolved; and
(iii) Landlord and Tenant shall each pay to the other party any amount
awarded to that party in any such arbitration proceeding.

 

4.2.7.5.2  No Adjustment; Landlord
Allocation.  There shall be no
adjustment, recalculation or reconciliation of the Excess Reassessment Amount
notwithstanding that the actual real estate taxes assessed against the Project
during the Protection Period as a result of the initial sale of the Improved
Building H Property is more or less than the Excess Reassessment Amount as
determined pursuant to the provisions of Section 4.2.7.5.1 above.  If the initial sale of the Improved Building
H Property during the initial Lease Term also concurrently includes other
portions of the Project to the same or affiliated buyer, the purchase price
allocable to the Improved Building H Property for purposes of determining
the Excess Purchase Amount (if any) shall be as so specified therefor in the
purchase agreement between Landlord and the buyer (if no such allocation is so
specified, Landlord shall make a fair, reasonable and equitable allocation
thereof); provided, however, if Tenant in good faith objects to such allocation
made in the purchase agreement or by Landlord (as the case may be) as not being
a fair, reasonable and equitable allocation, and notifies Landlord of such
objection within the five (5) day period following Tenant’s receipt of
Landlord’s Calculation Notice as provided in Section 4.2.7.5.1 above, then
such allocation shall be a fair, reasonable and equitable allocation as
determined pursuant to the dispute procedures set forth in
Section 4.2.7.5.1 above.

 

4.2.7.5.3  Example.  As an example of the calculation of the Excess
Reassessment Amount, assume: 
(i) the Closing Date for the initial sale of the Improved Building
H Property occurs on the last day of the fifth (5th) year of
the initial Lease Term, and thus the Protection Period would be the last five
(5) years of the initial Lease Term; (ii) the real estate tax percentage
rate in effect as of the Closing Date with respect to the Improved Building
H Property is 1.25%; and (iii) the purchase price for the Improved
Building H Property equals $51,112,470.00 (i.e., $285.00 per
rentable square foot of the Building). 
In such event, the Excess Reassessment Amount would equal  $120,809.87,
calculated as follows:  (A) the
Excess Purchase Amount would equal $3,586,840.00 (i.e., $20.00 per
rentable square foot of the Building, calculated by subtracting the $265.00 per
rentable square foot Threshold Price from the $285.00 per rentable square foot
purchase price); (B) the excess Tax Expenses assessed against the Improved
Building H Property as a result of such sale and attributable to the
Excess Purchase Amount during the Protection Period would equal a total of
$224,177.50 (i.e., .0125 tax percentage rate x $3,586,840.00 x 5 years);
(C) the present value as of the Closing Date of such excess Tax Expenses
would equal $194,228.09 using the 6% discount factor provided hereinabove; and
(D) the Excess Reassessment Amount payable by Landlord to Tenant upon the
Closing Date would equal $120,809.87 (i.e., $194,228.09 x Tenant’s Share
of 62.20%).

 

4.2.7.5.4  Excluded Transactions.  The foregoing provisions of this
Section 4.2.7.5 shall not apply to any sale or other change in ownership
of (i) any part of the Project which is other than the Improved Building
H Property, or (ii) the Improved Building H Property which

 

17

 

occurs after the initial
10-year Lease Term, or which is not the initial sale or change in ownership of
the Improved Building H Property.

 

4.2.7.5.5  Landlord Notice.  During the initial Lease Term, Landlord
shall endeavor to give Tenant thirty (30) days’ prior verbal or written
notice of Landlord’s intent to initially market the Building for sale to third
parties.  Tenant shall have no rights or
remedies against Landlord, Landlord shall have no liability to Tenant and there
shall be no effect on this Lease if Landlord fails to send or timely send such
notice to Tenant.

 

4.2.7.6     Notwithstanding anything to
the contrary contained in this Section 4.2.7, Tax Expenses for the Tax
Expense Base Year shall be initially calculated without regard to any
Proposition 8 reduction obtained for the Real Property during the Tax Expense
Base Year.  In addition, if in any
Expense Year subsequent to the Tax Expense Base Year (the “Tax Adjustment Year”), the amount of Tax
Expenses decreases below the amount of Tax Expenses for the Tax Expense Base
Year as a result of a Proposition 8 reduction, then for purposes of all
subsequent Expense Years, including the Expense Year in which such decrease in
Tax Expenses occurs, the Tax Expenses as initially calculated for the Tax
Expense Base Year shall be decreased by an amount equal to such decrease in Tax
Expenses in the Tax Adjustment Year. 
Conversely, if the Tax Expenses thereafter are decreased by a lesser
amount during any comparison year subsequent to the Tax Adjustment Year (the ““Tax Readjustment Year”) as a result of
Landlord’s failure to secure a Proposition 8 reduction which is greater than or
equal to the Proposition 8 reduction secured during the Tax Adjustment Year,
then for purposes of all subsequent Expense Years, including the Expense Year
in which such lesser decrease in Tax Expenses occurs, Landlord shall adjust the
Tax Expenses as initially calculated for the Tax Expense Base Year and decrease
such amount by an amount equal to the decrease in Tax Expenses during such Tax
Readjustment Year which resulted from Landlord’s failure to secure a
Proposition 8 reduction greater than or equal to the Proposition 8 reduction
secured during the Tax Adjustment Year. 
Landlord and Tenant acknowledge that this Section 4.2.7.6 is not
intended to in any way affect the inclusion in Tax Expenses of the statutory
two percent (2%) annual increase in Tax Expenses (as such statutory increase
may be modified by subsequent legislation).

 

4.2.8        “Tenant’s Share”
shall mean, subject to Section 1.2 above, the percentage set forth in
Section 9.4 of the Summary. 
Tenant’s Share was calculated by dividing the number of rentable square
feet of the Premises by the total rentable square feet in the Building.  In the event either the rentable square feet
of the Premises and/or the total rentable square feet of the Building is
changed due to either an expansion or contraction of the Premises or Building,
Tenant’s Share shall be appropriately adjusted in accordance with the BOMA
Standard in Section 1.2 above, and, as to the Expense Year in which such
change occurs, Tenant’s Share for such year shall be determined on the basis of
the number of days during such Expense Year that each such Tenant’s Share was
in effect.

 

4.2.9        “Utilities Base Year”
shall mean the year set forth in Section 9.3 of the Summary.

 

4.2.10      “Utilities Costs”
shall mean all actual charges for utilities for the Building and the Project
which Landlord shall pay during any Expense Year, including, but not limited
to, the costs of water, sewer and electricity, and the costs of HVAC and other
utilities (but excluding those charges for which tenants directly reimburse
Landlord or pay directly to the utility company) as well as related fees,
assessments and surcharges.  Utilities
Costs for any Expense Year, including the Utilities Base Year, shall be
calculated assuming the Building (and during the period of time when any of the
Other Existing Buildings and any other buildings are fully constructed and
ready for occupancy and are owned by Landlord and included by Landlord within
the Project), is (are) at least 95% occupied. 
If, during all or any part of any Expense Year or the Utilities Base
Year, Landlord shall not provide any utilities (the cost of which, if provided
by Landlord, would be included in Utilities Costs) to a tenant (including
Tenant) who has undertaken to provide same instead of Landlord, Utilities Costs
shall be deemed to be increased by an amount equal to the additional Utilities
Costs which would reasonably have been incurred during such period by Landlord
had the Building (and any such other buildings, as applicable) been ninety-five
percent (95%) occupied and/or if Landlord had at its own expense provided such
utilities to such tenant.  Utilities
Costs shall include any costs of utilities which are allocated to the Real
Property under any declaration, restrictive covenant, or other instrument
pertaining to the sharing of costs by the Real Property or any portion thereof,
including any covenants, conditions or restrictions now or hereafter recorded
against or affecting the Real Property. 
Notwithstanding the foregoing to the contrary, Utilities Costs shall not
include any penalties, interest or late charges attributable to Landlord’s
delinquent payment of any Utilities Costs and shall not include those items
listed in Section 4.2.4.1 to the extent applicable to Utilities
Costs.  In the event that Utilities
Costs shall decrease in any Expense Year subsequent to the Utilities Base Year,
Utilities Costs attributable to the Utilities Base Year, shall, commencing the
year of such decrease, but only as long as and to the extent such decrease
remains in effect, thereafter be reduced by the amount of such decrease in the
Utilities Costs.

 

18

 

4.3           Calculation and
Payment of Additional Rent.

 

4.3.1        Calculation of Excess.  Subject to
Section 4.3.5 below, if for any Expense Year ending or commencing within
the Lease Term, (i) Tenant’s Share of Operating Expenses allocated to the
Building pursuant to Section 4.3.4 below for such Expense Year exceeds
Tenant’s Share of Operating Expenses allocated to the Building for the Expense
Base Year, and/or (ii) Tenant’s Share of Tax Expenses allocated to the
Building pursuant to Section 4.3.4 below for such Expense Year exceeds
Tenant’s Share of Tax Expenses allocated to the Building for the Tax Expense
Base Year, and/or (iii) Tenant’s Share of Utilities Costs allocated to the
Building pursuant to Section 4.3.4 below for such Expense Year exceeds
Tenant’s Share of Utilities Costs allocated to the Building for the Utilities
Base Year, then Tenant shall pay to Landlord, in the manner set forth in
Section 4.3.2, below, and as additional rent, an amount equal to such
excess of the applicable Operating Expenses, Tax Expenses and/or Utilities
Costs (the “Excess”).  For any partial year within the Lease Term,
the Excess shall be calculated by comparing Tenant’s Share of Operating
Expenses, Tenant’s Share of Tax Expenses and/or Tenant’s Share of Utilities
Costs for such partial Expense Year, as applicable, to the comparable prorata
portion of Tenant’s Share of Operating Expenses, Tenant’s Share of Tax Expenses
and/or Tenant’s Share of Utilities Costs applicable to the Expense Base Year,
Tax Expense Base Year or Utilities Base Year, as the case may be.

 

4.3.2        Statement of Actual Operating Expenses, Tax Expenses
and Utilities Costs.  Following the end of each Expense Year,
Landlord shall give to Tenant a statement (the “Statement”) which shall state the amount of Operating
Expenses, Tax Expenses and Utilities Costs actually incurred or accrued for
that Expense Year (and with respect to the first Expense Year following the
Expense Base Year, the amount of Operating Expenses, Tax Expenses and Utilities
Costs actually incurred or accrued for the Expense Base Year, Tax Expense Base
Year and Utilities Base Year, as the case may be), and (ii) the amount, if
any, of any Excess for that Expense Year. 
Such Statement shall be itemized on a line item by line item basis,
showing the applicable Operating Expenses, Tax Expenses (and receipted Tax
Expense bills) and Utilities Costs for such Expense Year (and with respect to
the first Expense Year following the Expense Base Year, the applicable
Operating Expenses, Tax Expenses and receipted Tax Expense bills, if any, and
Utilities Costs for the Expense Base Year, the Tax Expense Base Year, and the
Utilities Base Year, as the case may be). 
Within thirty (30) days after Tenant’s receipt of the Statement for
such Expense Year, if an Excess is present, Tenant shall pay to Landlord the
full amount of the Excess for such Expense Year, less the amounts, if any,
actually paid by Tenant to Landlord with respect to such Expense Year as “Estimated Excess,” as that term is defined
in Section 4.3.3 below.  If any
Statement reflects that the amount of Estimated Excess paid by Tenant to
Landlord for such Expense Year is greater than the actual amount of the Excess
for such Expense Year, then Landlord shall remit such overpayment to Tenant within
thirty (30) days after such applicable Statement is delivered to
Tenant.  Even though the Lease Term has
expired and Tenant has vacated the Premises, if the Statement for the Expense
Year in which this Lease terminates reflects that Tenant’s payment to Landlord
of Estimated Excess for such Expense Year was greater than or less than the
actual amount of Excess for such last Expense Year, then within
thirty (30) days after Landlord’s delivery of such Statement to Tenant,
Landlord shall refund to Tenant any such overpayment, or Tenant shall pay to
Landlord any such underpayment, as the case may be.  Landlord shall endeavor in good faith to deliver the applicable
Statement to Tenant within one hundred twenty (120) days after the end of the
Expense Year in question, but the failure of Landlord to furnish such Statement
within such 120-day period shall not prejudice Landlord from enforcing its
rights under this Article 4 (provided that in the event that such failure
continues for a period of six (6) months following receipt of a notice from
Tenant demanding that Landlord deliver such Statement to Tenant, then Tenant
may elect to seek specific performance of the delivery of such Statement to
Tenant); provided, however, Landlord’s failure to provide Tenant with a
Statement for a particular Expense Year within two (2) years after the end of
the Expense Year in question, shall constitute a waiver of Landlord’s right to
collect any Excess payable for such Expense Year; provided further, however,
that such limitation on Landlord’s ability to collect any Excess as a result of
any late delivery of such Statement shall not preclude Landlord from modifying
any Statement once such Statement is timely delivered, as provided hereinabove,
to reflect any additional expenses levied by any governmental authority or by
any public utility companies (including, without limitation, as a result of any
new or supplemental tax bills issued by the applicable taxing authority), so
long as Landlord delivers such revised Statement to Tenant within two (2) years
after Landlord becomes aware of such errors or receives such new
information.  In the event that any such
revised Statement so delivered shows that an additional Excess is present, then
Tenant shall pay to Landlord, within thirty (30) days of receipt of the
revised Statement, the amount of the additional Excess.  If any such revised Statement reflects that
Tenant has overpaid Tenant’s Share of Operating Expenses, Tax Expenses and
Utilities Costs for such Expense Year, Landlord shall refund the overpayment to
Tenant within thirty (30) days after such applicable revised Statement is
delivered to Tenant.  The provisions of
this Section 4.3.2 shall survive the expiration or earlier termination of
the Lease Term for a period of two (2) years thereafter, but without derogating
from the 2-year limitation set forth hereinabove.

 

4.3.3        Statement of Estimated Operating Expenses, Tax
Expenses and Utilities Costs.  Prior to
that date which is thirty (30) days prior to the first day of a new
Expense Year, Landlord shall

 

19

 

endeavor to give Tenant a
yearly expense estimate statement (the “Estimate
Statement”) which shall set forth Landlord’s reasonable estimate
(the “Estimate”) of what the total
amount of Operating Expenses, Tax Expenses and Utilities Costs allocated to the
Building pursuant to Section 4.3.4 below for the new Expense Year shall be
and the estimated Excess (the “Estimated
Excess”), as calculated by comparing Tenant’s Share of Operating Expenses,
Tax Expenses and Utilities Costs allocated to the Building, which shall be
based upon the Estimate, to Tenant’s Share of Operating Expenses, Tax Expenses
and Utilities Costs allocated to the Building for the applicable Base Year.  Such Estimate Statement shall be itemized on
a line item by line item basis, showing the applicable estimated Operating
Expenses, Tax Expenses and Utilities Costs for such new Expense Year as well
as, and with respect to the first Expense Year after the Expense Base Year, the
estimated or actual, as applicable, Operating Expenses for the Expense Base
Year, the Tax Expenses for the Tax Expense Base Year and the Utilities Costs
for the Utilities Base Year.  The
failure of Landlord to timely furnish the Estimate Statement for any Expense
Year shall not preclude Landlord from enforcing its rights under this
Article 4; provided, however, that notwithstanding the anything to the
contrary contained in this Section 4.3.3, Tenant shall not be responsible
for Tenant’s Share of any Estimated Excess attributable to any Expense Year
first billed to Tenant more than two (2) years after the earlier of the
expiration of the applicable Expense Year or the Lease Expiration Date,
provided that in any event Tenant shall be responsible for Tenant’s Share of
Estimated Excess levied by any governmental authority or by any public utility
companies at any time following such Expense Year or the Lease Expiration Date,
as the case may be, which are attributable to any Expense Year (provided that
Landlord delivers Tenant a supplemental statement for such amounts within two
(2) years following Landlord’s receipt of the bill therefor).  Subject to Section 4.3.5 below, Tenant
shall pay to Landlord the Estimated Excess for each such Expense Year, in
monthly installments of one-twelfth (1/12) thereof on the first (1st)
business day of each calendar month during such Expense Year; provided,
however, if such Estimate Statement is delivered to Tenant after the start of
such new Expense Year, Tenant shall pay to Landlord within thirty (30) days
after the receipt of the Estimate Statement, a fraction of the Estimated Excess
for the then-current Expense Year (reduced by any amounts paid pursuant to the
last sentence of this Section 4.3.3). 
Such fraction shall have as its numerator the number of months which
have elapsed in such current Expense Year to the month of such payment, both
months inclusive, and shall have twelve (12) as its denominator.  If at any time (but not more often than one
time per Expense Year) Landlord determines in good faith that the Excess for an
Expense Year is projected to vary from the then Estimated Excess for such
Expense Year, Landlord may, not more than twice in any Expense Year, by notice
to Tenant, revise such Estimated Excess, and Tenant’s monthly installments for
the remainder of such Expense Year shall be adjusted so that by the end of such
Expense Year Tenant shall have paid to Landlord the revised Estimated Excess
for such Expense Year.  Until a new
Estimate Statement is furnished, Tenant shall pay monthly, with the monthly
Base Rent installments, an amount equal to one-twelfth (1/12) of the Estimated
Excess set forth in the previous Estimate Statement delivered by Landlord to
Tenant.

 

4.3.4        Allocation of Operating Expenses, Tax Expenses and
Utilities Costs to the Building.  The parties
acknowledge that the Building is part of a multi-building project consisting of
the Building, the Other Existing Buildings, and such other buildings as
Landlord and/or any other owners of land within the Project may elect to
construct and include as part of the Project from time to time (collectively,
the “Future Buildings”), and that
certain of the costs and expenses incurred in connection with the Real Property
(i.e., certain of the Operating Expenses, Tax Expenses and
Utilities Costs) shall be shared among the Building, the Other Existing
Buildings and such Future Buildings, but costs and expenses which are solely
attributable or exclusively pertaining to the Building, the Other Existing
Buildings and/or such Future Buildings, as applicable, shall be allocated
directly to the Building, Other Existing Buildings and/or such Future
Buildings, respectively.  Accordingly,
as set forth in Sections 4.1 and 4.2 above, but subject to the limitations
contained in this Section 4.3.4, Operating Expenses, Tax Expenses and
Utilities Costs are determined annually for the Real Property as a whole
(excluding, however, any such costs incurred solely by an owner of any Existing
Building or Other Building which is other than Landlord or a common area
association for LNR Warner Center and which do not pertain to shared common
costs for the shared common areas of the Project), and a portion of such
Operating Expenses, Tax Expenses and Utilities Costs, which portion shall be reasonably
determined by Landlord on an equitable basis (based upon sound real estate
management principles), shall be allocated to the Building (as opposed to the
Other Existing Buildings and any such Future Buildings), and such portion so
allocated, together with the costs and expenses solely attributable or
exclusively pertaining to the Building (which for purposes hereof shall
include, without limitation, any Tax Expenses attributable solely to the
Improved Building H Property), shall be the amount of Operating Expenses,
Tax Expenses and Utilities Costs payable with respect to the Building upon
which the applicable Tenant’s Share shall be calculated.  As examples of such allocation of Operating
Expenses, Tax Expenses and Utilities Costs: 
(i) with respect to Tax Expenses and Utilities Costs, it is
anticipated that Landlord and/or any other owners of the Other Existing
Buildings or Future Buildings (other than the parking structures to the extent
owned and/or managed by the common area association for LNR Warner Center for
common use by more than own owner) (A) will receive separate tax bills
which separately assess (1) the improvements component of Tax Expenses for
each such building, and (2) the real property component of Tax Expenses
for the separate parcel of land upon which such building is located if such
parcel is separately subdivided

 

20

 

to include only such
building, and/or (B) may receive separate utilities bills from the
utilities companies identifying the Utilities Costs for certain of the
utilities costs directly incurred by each such building (as measured by
separate meters installed for such building), and such separately assessed Tax
Expenses and separately metered Utilities Costs shall be calculated for and
allocated separately to each such applicable building (and if applicable, each
such separate parcel of land upon which such building is located); and
(ii) with respect to repairs and capital improvements to be made to any
particular office or retail building, the cost thereof shall be allocated
directly to the owners of such applicable buildings, and not included in
Operating Expenses for the Real Property as a whole or allocated to any other
owner or building.  In addition, in the
event that prior to execution of this Lease or at any time thereafter Landlord
has elected or subsequently elects, at its sole option, to subdivide into a
separate parcel or parcels of land certain portions of the Real Property,
including portions on which the Other Existing Buildings and/or the Future
Buildings are now or hereafter located and/or certain common area portions of
the Real Property (such as landscaping, public and private streets, driveways,
walkways, courtyards, plazas, transportation facilitation areas, accessways
and/or parking areas), and/or has separately conveyed or subsequently
separately conveys all or any of such parcels to another person or entity
(including to any common area association to own, operate and/or maintain
same), the Operating Expenses, Tax Expenses and Utilities Costs for such
separate parcels of land shall be aggregated (subject to the limitations
contained in the foregoing provisions of this Section 4.3.4) and then
reasonably allocated by Landlord to the Building, the Other Existing Buildings
and such Future Buildings on a reasonable and equitable basis (based upon sound
real estate management principles) as Landlord (and/or any applicable
covenants, conditions and restrictions for any such common area association)
shall provide from time to time.

 

4.3.5        Cap on Controllable Expenses. 
Notwithstanding anything to the contrary contained in this
Article 4, the aggregate Controllable Expenses (as hereinafter defined)
included in Operating Expenses in any Expense Year following the Expense Base
Year shall not increase by more than seven percent (7%) on an annual,
cumulative and compounded basis, over the actual aggregate Controllable
Expenses included in Operating Expenses for any preceding Expense Year.  For purposes of this Section 4.3.5, “Controllable Expenses” shall mean all
Operating Expenses except:  (i) any
and all assessments, including assessment districts and government-mandated
charges with respect to the Building or the Project, or any part thereof to the
extent not included in Tax Expenses; (ii) costs of insurance premiums for
insurance carried by Landlord with respect to the Project and/or the operation
thereof; (iii) costs of janitorial services and costs of utilities,
including, without limitation, electricity, water, HVAC and sewer charges,
utility surcharges and assessments and refuse removal to the extent not
included in Utilities Costs.  The
foregoing provisions of this Section 4.3.5 shall not apply to, and
Controllable Expenses shall not include, any Tax Expenses or Utilities Costs.

 

4.3.6        Payment in Installments.  All
assessments for Tax Expenses and premiums for insurance coverage which are not
specifically charged to Tenant because of what Tenant has done, which can be
paid by Landlord in installments without the imposition of fees, penalties or
interest, shall be paid by Landlord in the maximum number of installments that
are permitted by applicable Law without the imposition of fees, penalties or
interest and not included as Operating Expenses, Tax Expenses or Utilities
Costs except in the Expense Year in which the assessment or premium installment
is actually paid; provided, however, that if the prevailing practice in
Comparable Buildings is to pay such assessments or premiums on an earlier
basis, and Landlord pays on such earlier basis, such assessments or premiums
shall be included in Operating Expenses, Tax Expenses and Utilities Costs, as
the case may be, as paid by Landlord.

 

4.4           Taxes and Other
Charges for Which Tenant Is Directly Responsible.  Tenant shall reimburse Landlord within thirty (30) days
after demand for any and all taxes or assessments required to be paid by
Landlord (except to the extent included in Tax Expenses by Landlord), excluding
state, local and federal personal or corporate income taxes measured by the net
income of Landlord from all sources and estate and inheritance taxes, whether
or not now customary or within the contemplation of the parties hereto, when:

 

(i)            said taxes are measured by or reasonably
attributable to the cost or value of Tenant’s Property (as defined in
Section 15.2 below) located in the Premises or Project, or by the cost or
value of any leasehold improvements made in or to the Premises by or for
Tenant, to the extent the cost or value of such leasehold improvements exceeds
the amount per square foot which Landlord uses as a base value above which
Landlord charges other tenants of the Real Property for real estate taxes
attributable to the cost or value of leasehold improvements located in such
tenants’ premises (the “Cut-Off Point”).  To the extent that Landlord enforces the
terms of this Section 4.4 against Tenant, then Landlord shall not include
in Tax Expenses the taxes assessed against any other tenant improvements in the
Building or the Project to the extent such taxes relate to the value of such
tenant improvements in excess of the Cut-Off Point;

 

21

 

(ii)           said taxes are assessed upon or with
respect to the possession, leasing, operation, management, maintenance, alteration,
repair, use or occupancy by Tenant of the Premises or any portion of the Real
Property (including the Parking Facilities); or

 

(iii)          said taxes are assessed upon this
transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Premises.

 

4.5           Late Charges.  If any installment of Rent or any other sum
due from Tenant shall not be received by Landlord or Landlord’s designee within
five (5) business days after written notice from Landlord that said amount is
past due, then Tenant shall pay to Landlord a late charge equal to four percent
(4%) of the amount due; provided, however, that if Landlord has given Tenant
two (2) such delinquency notices in the preceding twelve (12) month
period, then the late charge shall be imposed for any subsequent delinquent
payment of Rent by Tenant, without requirement of any notice or cure
period.  The late charge shall be deemed
Additional Rent and the right to require it shall be in addition to all of
Landlord’s other rights and remedies hereunder or at law and shall not be
construed as liquidated damages or as limiting Landlord’s remedies in any
manner.  In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid
within five (5) business days after written notice from Landlord that said
amount is past due shall bear interest from the date due until paid at a rate
(the “Interest Rate”) equal to the
lower of (i) the then-current prime interest rate as such rate is
announced by The Wall Street Journal plus two (2) percentage points, or
(ii) the highest rate permitted by applicable law; provided, however, that
if Landlord has given Tenant two (2) such delinquency notices in the
preceding twelve (12) month period, then interest shall be imposed for any
subsequent delinquent payment of Rent by Tenant, without requirement of any
notice or cure period.

 

4.6           Books and Records.  Landlord shall maintain in a safe and
orderly manner books and records, or make available such books and records, in
Los Angeles and/or Orange Counties in accordance with sound accounting and
management practices consistently applied, reflecting the Operating Expenses,
Tax Expenses and Utilities Costs. 
Landlord shall maintain such books and records for the Operating
Expenses, Tax Expenses and Utilities Costs for each Expense Year for the
entirety of the period which ends three (3) years following Landlord’s delivery
to Tenant of each such Statement, except that Landlord shall maintain such
books and records with respect to each applicable Base Year during the entire
Lease Term plus two (2) years after the expiration or sooner termination of the
Lease Term.

 

4.7           Audit Rights.  In the event Tenant disputes the amount of
the Operating Expenses, Tax Expenses and Utilities Costs set forth in the
Statement for the particular Expense Year delivered by Landlord to Tenant
pursuant to Section 4.3.2 above (including, without limitation, the
applicable Base Years), then Tenant shall have the right, at Tenant’s cost, after
reasonable notice to Landlord, to have Tenant’s authorized employees (or the
Accountant, as such term is defined below) inspect, at Landlord’s office in Los
Angeles and/or Orange Counties during normal business hours, Landlord’s books,
records and supporting documents concerning the Operating Expenses, Tax
Expenses and Utilities Costs for such Expense Year set forth in such Statement;
provided, however, Tenant shall have no right to conduct such inspection, have
an audit performed by the Accountant as described below, or object to or
otherwise dispute the amount of the Operating Expenses, Tax Expenses and
Utilities Costs set forth in any such Statement unless Tenant notifies Landlord
of such objection and dispute, completes such inspection, and has the Accountant
commence and complete such audit within two (2) years and ninety (90) days
following Landlord’s delivery of the particular Statement in question (the “Review Period”); provided, further, that
notwithstanding any such timely objection, dispute, inspection, and/or audit,
and as a condition precedent to Tenant’s exercise of its right of objection,
dispute, inspection and/or audit as set forth in this Section 4.7, Tenant
shall not be permitted to withhold payment of, and Tenant shall timely pay to
Landlord, the full amounts as required by the provisions of this Article 4
in accordance with such Statement. 
However, such payment may be made under protest (but does not need to be
specifically designated as being made under protest) pending the outcome of any
audit which may be performed by the Accountant as described below.  In connection with any such inspection by
Tenant and/or audit performed by the Accountant as described below,
(i) Landlord and Tenant shall reasonably cooperate with each other so that
such inspection and/or audit can be performed pursuant to a mutually acceptable
schedule, in an expeditious manner and without undue interference with
Landlord’s operation and management of the Real Property, and
(ii) Landlord shall make available in such inspections and/or such audit
reasonable supporting documentation in Landlord’s possession relating to the
applicable Statement as Tenant may reasonably request.  If after such inspection of Landlord’s books
and records, Tenant still disputes the amount of the Operating Expenses, Tax
Expenses and/or Utilities Costs set forth in the Statement, Landlord and Tenant
shall meet and attempt in good faith to resolve the dispute.  If the parties are unable to resolve the
dispute, then Tenant shall have the right, within the Review Period, to cause
an independent certified public accountant (which is not paid on a commission
or contingency basis) selected by Tenant and reasonably approved by Landlord
(the “Accountant”) to complete an
audit of Landlord’s books and records to determine the proper amount of the
Operating Expenses, Tax Expenses and Utilities Costs incurred and amounts
payable by Tenant for the Expense Year which is the subject of such
Statement.  Such audit by the Accountant
shall be final and binding upon Landlord and Tenant.  If

 

22

 

Landlord and Tenant
cannot mutually agree as to the identity of the Accountant within
thirty (30) days after Tenant notifies Landlord that Tenant desires an
audit to be performed, then the Accountant shall be one of the “Big 4”
accounting firms (which is not paid on a commission or contingency basis and is
not representing or engaged by Tenant or Landlord in other matters, and has not
represented or been engaged by Tenant or Landlord for any matter for the 5-year
period preceding the audit), as selected by Tenant.  If such audit reveals that Landlord has over-charged Tenant, then
within thirty (30) days after the results of such audit are made available
to Landlord, Landlord shall reimburse to Tenant the amount of such over-charge,
together with interest on the amount of the over-charge at the Interest Rate
(as defined in Section 4.5 above). 
If the audit reveals that the Tenant was under-charged, then within
thirty (30) days after the results of such audit are made available to
Tenant, Tenant shall reimburse to Landlord the amount of such
under-charge.  Tenant agrees to pay the
cost of such audit unless it is subsequently determined that Landlord’s
original Statement which was the subject of such audit overstated Operating
Expenses, Tax Expenses and Utilities Costs by five percent (5%) or more of
the originally reported Operating Expenses, Tax Expenses and Utilities Costs
which was the subject of such audit, in which case all reasonable and
documented costs incurred by Tenant in connection with said audit (but not in
excess of the over-charge) shall be reimbursed by Landlord within
thirty (30) days after demand therefor. 
The payment by Tenant of any amounts pursuant to this Article 4 shall
not preclude Tenant from questioning, during the Review Period, the correctness
of the particular Statement in question provided by Landlord, but the failure
of Tenant to object thereto, conduct and complete its inspection and have the
Accountant conduct the audit as described above prior to the expiration of the
Review Period for such Statement shall be conclusively deemed Tenant’s approval
of the Statement in question and the amount of Operating Expenses, Tax Expenses
and Utilities Costs shown thereon.  If
following Tenant’s delivery to Landlord of a written request to make Landlord’s
books and records regarding the Operating Expenses, Tax Expenses and Utilities
Costs reasonably available to Tenant and/or the Accountant to conduct any such
inspection and/or audit described above in this Section 4.7, Landlord
fails to make Landlord’s books reasonably available for such purposes during
Landlord’s normal business hours, and such failure continues for one
(1) business day after Tenant notifies Landlord thereof, then the Review
Period shall be extended one (1) day for each such day that Tenant and/or
the Accountant, as the case may be, is so prevented from accessing such books
and records.  In connection with any inspection
and/or audit conducted by Tenant pursuant to this Section 4.7, Tenant
agrees to keep, and to cause all of Tenant’s employees and consultants and the
Accountant to keep, all of Landlord’s books and records and the audit, and all
information pertaining thereto and the results thereof, strictly confidential
(except if required by any court to disclose such information or if such
information is available from an inspection of public records), and in
connection therewith, Tenant shall cause such employees, consultants and the
Accountant to execute such commercially reasonable confidentiality agreements
as Landlord may require prior to conducting any such inspections and/or audits.

 

ARTICLE 5

USE OF PREMISES

 

5.1           Use.  Tenant shall use the Premises solely for
general office and administrative purposes (which uses may include, without
limitation, software development, software testing, repair of computer hardware
used on-site at the Premises, internal network management, a quality assurance
center, a data center [including for ISP Services] and a “clean room”), all in
accordance with the terms of this Lease and consistent with the character of
the Real Property as a first-class, multi-tenant office building project (the “Permitted Use”).  Tenant shall not use or permit the Premises to be used for any
other purpose or purposes whatsoever. 
Tenant further covenants and agrees that it shall not use, or suffer or
permit any person or persons to use, the Premises or any part thereof for any
use or purpose contrary to the provisions of Exhibit D, attached hereto,
or in violation of applicable Laws (as defined in Article 22 below).  Tenant shall comply with all recorded
covenants, conditions and restrictions, and the provisions of all ground or
underlying leases, now or hereafter affecting the Real Property (including,
without limitation, that certain Master Declaration of Covenants, Conditions,
Restrictions and Reservation of Easements For LNR Warner Center and Termination
of Former Declaration dated May 22, 2003 and recorded in the Official Records
of Los Angeles County on May 29, 2003 as Instrument No. 03 1519811, as may
be amended) (collectively, the (the “Underlying
Documents”), so long as any such Underlying Documents executed after
the date hereof do not create an Adverse Condition or materially derogate from
the rights of Tenant under this Lease; provided, further, that any such
Underlying Documents executed after the date hereof shall not be effective
against Tenant until Tenant has received a copy of the same.  In connection with Tenant’s compliance obligations
under any such Laws and/or such recorded covenants, conditions and
restrictions, Tenant agrees to: 
(i) develop an active recycling program to reduce solid waste, and
participate in any such recycling program developed by Landlord or any common area
association with or under in such covenants, conditions and restrictions,
and/or developed by any local municipalities or governmental agencies having
jurisdiction over the Real Property; (ii) use its best efforts to
cooperate in and comply with programs which may be undertaken by Landlord
independently, or in cooperation with local municipalities or governmental
agencies or other property owners of property within and/or in the vicinity of
LNR Warner Center, to reduce peak levels of commuter traffic; such

 

23

 

programs may include, but
shall not be limited to, carpools, vanpools and other ride sharing programs,
public and private transit, and flexible work hours; (iii) to the extent
any such traffic mitigation programs are deemed mandatory by such local
municipalities or government agencies, to comply with such programs (including
any programs implemented by Landlord or any common area association under any
covenants, conditions and restrictions recorded against the Real Property; and
(iv) in connection with Tenant’s obligations under clauses
(ii) and (iii) hereinabove, Tenant agrees to appoint one of its
employees to act as a liaison to the transportation coordinators in any
buildings in the Real Property occupied or leased by Tenant.

 

5.2           Hazardous Materials.

 

5.2.1        Definitions of Hazardous Materials and Environmental
Laws.  As used in this Lease, the term “Hazardous Materials” shall mean and include
any substance that is or contains petroleum, asbestos, polychlorinated
biphenyls, lead, or any other substance, material or waste which is now or is
hereafter classified or considered to be hazardous or toxic under any federal,
state or local law, rule, regulation or ordinance relating to pollution or the
protection or regulation of human health, natural resources or the environment
(collectively, “Environmental Laws”).

 

5.2.2        Tenant’s Covenants.  Tenant shall
not use or allow another person or entity to use any part of the Premises for
the storage, use, treatment, manufacture or sale of Hazardous Material.  Landlord acknowledges, however, that Tenant
will maintain products in the Premises which are incidental to the operation of
its general office use, including, without limitation, photocopy supplies,
secretarial supplies and limited janitorial supplies, which products contain
chemicals which are categorized as Hazardous Materials.  Landlord agrees that the use of such
products in the Premises in the manner in which such products are designed to
be used and in compliance with Environmental Laws shall not be a violation by
Tenant of this Article 5.

 

5.2.3        Pre-Existing Hazardous Materials. 
Tenant shall have no obligation to investigate or remediate any
Hazardous Materials located in or as part of the Base, Shell and Core as of the
Lease Commencement Date or in any areas of the Project located outside the
Premises that were not placed thereon or therein, or damaged or disturbed by
Tenant or any of Tenant’s agents, contractors, employees, licensees or
invitees.

 

5.2.4        Landlord’s Representations, Covenants and Indemnity. 
Landlord hereby represents and warrants to Tenant that, to Landlord’s
actual knowledge without duty of investigation or inquiry, as of the date of
execution of this Lease, the Improved Building H Property and other portions of
the Project currently owned by Landlord do not currently contain any Hazardous
Materials in violation of existing applicable Environmental Laws, except as
described in the Environmental Reports (as defined below), copies of which have
been delivered by Landlord to Tenant. 
Landlord further covenants that during the Lease Term, Landlord shall
comply with all Environmental Laws with respect to Landlord’s activities in and
around the Project, and in connection therewith, Landlord shall not cause any
Hazardous Materials to be introduced in, on or under the Project by Landlord,
its agents, employees or contractors in violation of Environmental Laws in
effect at the time of such introduction. 
As used in this Section 5.2.4, the term “Environmental Reports” collectively refers to the following
reports prepared with respect to the Project: 
(i) those certain two letters, each dated June 8, 1998 from
American Environmental Specialists, Co. to Mr. Kevin Read at Lennar Partners;
(ii) that certain Bulk Asbestos Survey dated August 22, 1997 prepared
by McLaren/Hart; (iii) that certain Phase I Environmental Assessment dated
August 22, 1997 prepared by McLaren/Hart; (iv) that certain
Phase I Environmental Site Assessment dated March 10, 2003 prepared
by Geomatrix Consultants, Inc.; and (v) that certain Phase II
Environmental Site Assessment (draft)  dated June 24, 2003 prepared
by Geomatrix Consultants, Inc.  In
addition, Landlord shall indemnify, defend and hold Tenant harmless from and
against, and Operating Expenses shall not include, the cost of remediation of
any Hazardous Materials to the extent (A) existing on those portions of the
Project owned by Landlord as of the date of execution of this Lease in
violation of applicable Environmental Laws at such time, and/or
(B) resulting from Landlord’s breach of its representations and/or
covenants set forth above in this Section 5.2.4.  Such indemnity shall survive the expiration or earlier
termination of this Lease.  For purposes
hereof, “costs of remediation” shall mean the costs associated with the
investigation, testing, monitoring, containment, removal, remediation, cleanup
and/or abatement of any release of any such Hazardous Materials described in
the immediately preceding sentence as necessary to comply with any applicable
Environmental Laws.

 

ARTICLE 6

SERVICES AND UTILITIES

 

6.1           Standard Tenant
Services.  Throughout the Lease
Term, Landlord shall manage and operate the Building in a first-class manner
consistent with the Comparable Buildings, and provide the

 

24

 

following services as
part of Operating Expenses and/or Utilities Costs on all days during the Lease
Term in a first-class manner consistent with the Comparable Buildings, unless
otherwise stated below.

 

6.1.1        Subject to all governmental rules, regulations and
guidelines applicable thereto, Landlord shall provide HVAC from the HVAC system
installed by Landlord as part of the Base, Shell and Core (the “Base Building HVAC System”) when necessary
for normal comfort for normal office use in the Premises during the Business
Hours (as defined below) so as to maintain average temperatures within the
Premises within the range of temperatures that are consistent with the design
specifications of the Base Building HVAC System set forth in Exhibit H
attached to this Lease, subject to Tenant’s obligation to install and maintain
appropriate equipment to distribute the HVAC throughout the Premises from the
Base Building HVAC System, and subject to extraordinary hot or cold weather
periods, unusual heat loads caused by Tenant’s use of the Premises, any use of
the Premises for other than general office use, brown-outs and/or other Force
Majeure events.  Landlord shall use
commercially reasonable efforts to cause the Base Building HVAC System to
materially perform in accordance with such design specifications (as determined
without regard to the Tenant Improvements or any alterations or Tenant’s
Property installed or to be installed by Tenant therein, and without regard to
distribution of the Base Building HVAC System to the Premises or the premises
of other tenants in the Building), subject to extraordinary hot or cold weather
periods, brown-outs, any use of the Premises for other general office use,
and/or other Force Majeure events.  As
used herein, “Business Hours”
shall mean 8:00 a.m. to 6:00 p.m. Monday through Friday, and
9:00 a.m. to 1:00 p.m. on Saturday, except for the date of
observation of New Year’s Day, Presidents’ Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day and any other local or national
holidays customarily recognized by landlords of Comparable Buildings
(collectively, the “Holidays”).

 

6.1.2        Landlord shall provide to the Premises adequate
electrical wiring and facilities and power for normal general office use
twenty-four (24) hours per day, seven (7) days per week, and consistent with
the Consumption Standard set forth in Section 6.2 below.  The current electrical capacity of the
Building is as set forth in the Base Building Plans (as defined in the Tenant
Work Letter).  Upon request, Landlord
shall replace lamps, starters and ballasts for Building standard lighting
fixtures (with Building standards to be determined based upon the standard
tenant improvement Specifications, as defined in the Tenant Work Letter, for
lighting fixtures in the Building), the cost of which shall be included in
Operating Expenses.  Tenant shall bear
the cost of replacement of all lamps, starters and ballasts for non-Building
standard lighting fixtures within the Premises.

 

6.1.3        Landlord shall provide in compliance with applicable
Laws for normal office use, twenty-four (24) hours per day, seven (7) days per
week, (i) city water from the regular building outlets for drinking, lavatory
and toilet purposes (with heated water for restroom sinks in the existing
restrooms of the Premises), and (ii) subject to the provisions of
Section 6.2 below, non-heated city water for use in kitchen and executive
washrooms and other eating areas and showers within the Premises.

 

6.1.4        Landlord shall provide (i) janitorial services
five (5) days per week, except the date of observation of the Holidays, in and
about the Premises, and (ii) exterior window washing services, all in
accordance with the janitorial and window washing specifications attached
hereto as Exhibit K (which are subject to change by Landlord
provided that the overall level of the janitorial and window washing services
provided by Landlord are not reduced below the level set forth in the
specifications attached hereto as Exhibit K).  Tenant shall, upon providing Landlord with
at least forty-five (45) days’ prior written notice, have the right to
(A) provide janitorial services which are in addition to the janitorial
services to be provided by Landlord as described hereinabove and/or
(B) other than exterior window washing services, provide all of the
janitorial services for the Premises described above in this Section 6.1.4
in lieu of Landlord providing same to Tenant (in which event Landlord shall
from and after the end of such 45-day period, no longer have such obligation to
provide such janitorial services), subject to the following conditions:  (1) all of Tenant’s personnel
performing such services shall perform same in a manner that will not
unreasonably interfere with the janitorial services provided by Landlord for
the Project, and shall abide by Landlord’s reasonable rules, regulations and
procedures in connection therewith; (2) all such services must be
performed in a first-class manner (in a manner comparable to the provision of
such services by the landlords of Comparable Buildings); and (3) all such
personnel of any third party vendors performing such janitorial services must
be reasonably approved by Landlord and shall not create labor disharmony at the
Project (and at Landlord’s request, all third party vendors providing such
services shall be union labor in compliance with the labor agreements affecting
the Project).  In addition, if Tenant
elects pursuant to clause (B) hereinabove to provide all of the janitorial
services for the Premises required to be provided by Landlord pursuant to this
Section 6.1.4, then, during the remainder of the Lease Term which occurs
after the expiration of the 45-day notice period pertaining to such election,
(x) the amount of monthly Base Rent otherwise payable by Tenant under this
Lease shall be reduced by $.07 per rentable square foot of the Premises per
month (and if such janitorial services are provided by Tenant during any free
Base Rent period set forth in Section 3.2 of this Lease, Landlord shall
pay to Tenant during the remainder of such free Base Rent Period the sum of
$.07 per rentable square foot of the Premises per month as reimbursement for
Tenant providing such janitorial services in lieu of

 

25

 

Landlord); and
(y) the cost and expense of providing such janitorial service to the
Premises and the premises of other tenants of the Building shall be excluded
from Operating Expenses for each Expense Year (or partial Expense Year)
occurring after such 45-day period (with a corresponding reduction in the
janitorial service cost component of Operating Expenses in the Expense Base
Year).

 

6.1.5        Landlord shall provide nonexclusive automatic
passenger elevator service at all times, twenty-four (24) hours per day, seven
(7) days per week.

 

6.1.6        Landlord shall provide twenty-four (24) hours per day,
every day of the year, Project security equipment personnel, procedures and
systems as determined by Landlord (the “Project
Security”).  Such security
personnel may or may not include, at Landlord’s discretion, on-site security
guards within the Building (except as expressly provided in
Section 6.1.6.1 below), but instead may include roving security guard(s) within
the Project, whose general duties shall be in accordance with the
specifications therefor attached hereto as Exhibit L-1 (which are
subject to change by Landlord from time to time provided that the overall level
of security services to be provided by such security personnel shall not be
below the level set forth in the specifications attached hereto as Exhibit L-1).  In addition, following reasonable prior
notice to Landlord and as part of the Project Security, Landlord shall have
reasonably available at night an access control person (who may be a “rover”)
to escort employees and invitees of Tenant from the Building to the Parking
Facilities, and such escort service shall be based on the reasonable
availability of such person (which Landlord shall use commercially reasonable
efforts to make such person reasonably available).

 

6.1.6.1     If requested by Tenant, in
addition to the Project Security, Landlord shall provide during the Lease Term,
additional security for the Building through (i) the installation of a
security desk and related telephone and telecommunications equipment therefor
(with specifications for such equipment provided by Tenant and reasonably
approved by Landlord) (collectively, the “Security
Desk”) in the ground floor lobby of the Building (the “Lobby”), and (ii) the provision of an
unarmed security guard to man the Security Desk 24 hours per day, 365 days per
year (the “Lobby Security”).  The Security Desk shall be installed in a
location within the Lobby, and shall be of such size, materials, finishes and
other specifications, as shall be designated by Landlord (but in any event
consistent with the quality of the existing improvements in the Lobby).  Tenant shall reimburse Landlord within
thirty (30) days after receipt of invoice, for the actual out-of-pocket costs
paid or incurred by Landlord (A) for the design and construction of the
Security Desk, and (B) in providing such security guard services, which
costs for (A) and (B) shall not exceed reasonably competitive rates therefor.  If prior to the first (1st)
anniversary of the Lease Commencement Date Tenant requests that Landlord
install the Security Desk, Tenant may pay for the costs of the design and
construction of the Security Desk out of the Tenant Improvement Allowance.  If Landlord notifies Tenant in writing prior
to the date which is one (1) year after the expiration or earlier
termination of this Lease that Landlord irrevocably commits to removing the
Security Desk by the expiration of such one (1) year period , then on or
before the date which is the later of (1) the expiration or earlier
termination of this Lease, or (2) thirty (30) days after Tenant’s
receipt of such notice, Tenant shall also pay to Landlord the reasonable costs
(as estimated by Landlord) of removing the Security Desk, repairing any damage
caused thereby and restoration of the Lobby to its condition existing prior to
the installation of the Security Desk. 
The security guard services for 
the Lobby Security shall include at a minimum the tasks and duties set forth
in Exhibit L-2 attached hereto.

 

6.1.6.2     Although Landlord agrees to
provide the security services and security personnel set forth in the foregoing
provisions of this Section 6.1.6, subject to Landlord’s indemnity in
Section 10.1.2 below, neither Landlord nor the “Landlord Parties,” as that
term is defined in Section 10.1 of this Lease, shall be liable for, and
Landlord and the Landlord Parties are hereby released from any responsibility
for any damage or injury either to person or property sustained by Tenant in
connection with or arising from any acts or omissions of such security
personnel; provided, however, if Tenant or any Tenant Parties suffer any damage
or injury as a result of the actions, inactions or negligence of the Lobby
Security personnel, Landlord shall assign to Tenant (on a non-exclusive basis)
Landlord’s rights under Landlord’s security contract with such Lobby Security
personnel (or the security company employing such personnel) to recover damages
therefor directly from such Lobby Security personnel (and such security
company, as applicable).  In addition,
if the Lobby Security personnel fail to materially perform the Lobby Security
services required pursuant to Section 6.1.6.1 above, and such failure is
not cured within a reasonable period of time after notice thereof from Tenant
to Landlord, Tenant shall have the right to require that Landlord replace such
personnel and/or security company with other qualified security personnel
and/or security company.  Landlord shall
include in its security contract with such Lobby Security personnel (or the
security company employing such personnel) a provision reasonably approved by
Tenant prior to Landlord entering into such contract making such Lobby Security
personnel (or the security company employing such personnel, as the case may
be) directly responsible to Tenant under such contract as a third party
beneficiary for any damage or injury suffered by Tenant as a result of the
actions, inactions or negligence of such Lobby Security personnel.

 

26

 

6.1.6.3     Subject to Tenant’s
compliance with and Landlord’s rights under the Tenant Work Letter and
Article 8 of this Lease, and subject to Landlord’s entry rights in
Article 23 below, Tenant shall be permitted to install, at Tenant’s sole
cost and expense, its own security system (and/or non-armed security personnel)
in the Premises, which security system may include security cameras within the
third (3rd) through fifth (5th) floor
stairwells facing the stairwell doors on such floors (and Tenant shall have the
right to use the third (3rd) through fifth (5th)
floor stairwells for access between such floors through a card-key access
system installed by Tenant as part of such security system); provided, however
that Tenant shall pay for any increased cost of maintenance, repairs and other
services necessitated by or resulting from such security system (and related
Alterations) and coordinate the installation and operation of such security
system (and related Alterations) with Landlord to assure that Tenant’s security
system (and related Alterations) are compatible with Landlord’s security
system; provided, further, that no Design Problem (as defined in
Section 8.1 below) exists.  In
connection with Tenant’s installation of Tenant’s security system, Tenant shall
provide to Landlord, commencing with the installation of Tenant’s security
system in the Premises, the telephone number(s) of an authorized representative
of Tenant to whom Landlord shall give reasonable prior notice (as reasonably
determined by Landlord under the circumstances, but in no event less than
forty-eight (48) hours’ prior written notice, unless in an emergency in which
Landlord believes that life, property, safety, or security is in jeopardy and/or
unless such entry is otherwise made in accordance with Article 23 below)
in the event Landlord must enter the Premises pursuant to Article 23
hereof, but in no event shall Landlord, following Landlord’s provision of such
reasonable notice to Tenant’s authorized representative, be obligated to delay
Landlord’s entry into the Premises or to monitor or otherwise operate Tenant’s
security system while inside the Premises. 
Landlord and Tenant acknowledge and agree that nothing contained in this
Section 6.1.6 shall be construed to limit the rights of Landlord under
Article 23 of this Lease.

 

6.1.7        Tenant shall have the right to (i) install and
maintain, at Tenant’s sole cost and expense, in the Premises and/or on the roof
of the Building, supplementary air conditioning units (including duct work and
other connections from the roof to the Premises, as applicable) for Tenant’s
computer data center room in the Premises (the “Data Center”) and any additional metering devices (including
“Emon Demon” meters) therefor (collectively, the “Supplemental HVAC Equipment”), and (ii) connect the Data
Center and the Supplemental HVAC Equipment to Landlord’s additional 750 kw
power capacity in the Building’s main electrical room located on the ground
floor of the Building (the “Additional Power
Source”) to provide electricity therefor and to install in such
locations within the Building as shall be designated by Landlord and maintain,
at Tenant’s sole cost and expense, additional electrical capacity and related
equipment therefor, including risers and/or wiring, for additional electrical
power to the Premises (including all necessary conduits, risers, wiring,
cables, and other connections from the Premises, Data Center and/or the
Supplemental HVAC Equipment to such Additional Power Source and additional
electrical capacity and related equipment, as applicable) and any additional
metering and sub-metering devices (including “Emon Demon” meters) therefor
(collectively, the “Supplemental Electrical
Equipment”), provided that: 
(A) such Supplemental HVAC and Supplemental Electrical Equipment
(collectively, the “Supplemental Equipment”)
shall not create a Design Problem (as defined in Section 8.1 below);
(B) Tenant obtains Landlord’s prior written approval to such Supplemental
Equipment and all plans and specifications therefor, which consent shall not be
unreasonably withheld, conditioned or delayed; (C) as a condition to
Landlord’s consent to the installation and use of any such Supplemental
Equipment, Landlord may require that the Supplemental Equipment not be
connected or tied to the Building’s Systems and Equipment (other than the
Additional Power Source); (D) in addition to performing the Landlord’s Roof
Work specified below, Landlord may elect to install all or any of such Supplemental
Equipment located on or affecting the roof of the Building pursuant to such
approved plans and specifications, in which event Tenant shall pay to Landlord
the cost thereof (which shall be reasonably consistent with competitive based
pricing) prior to such installation; and (E) with respect to any
Supplemental HVAC Equipment installed on the roof of the Building and the
condensers, duct work and other connecting equipment therefor (collectively,
the “Supplemental Roof HVAC Equipment”),
Tenant shall only be permitted to install such Supplemental Roof HVAC Equipment
if the same would not (only in a manner which would not) void any of Landlord’s
roof warranties.  The Supplemental HVAC
Equipment may include supplemental HVAC for 24-hour operation, 365 days per
year, and with respect to the roof of the Building may include HVAC equipment
capable of supplying up to 150 tons of additional HVAC capacity.  The Supplemental Electrical Equipment may
also include metering and submetering devices (including “Emon Demon” meters)
to measure all electricity consumed at the Premises (and not just the
electricity consumed from the Additional Power Service and/or any additional
electrical capacity which may be installed by Tenant as described hereinabove).  Tenant shall not be entitled to tap into the
chilled water system for the Building or to use any of the Building condensers
in connection with any Supplemental Equipment unless Tenant obtains Landlord’s
prior written consent, which consent Landlord may not unreasonably withhold,
condition or delay.  Landlord shall
perform the roof and wall penetration work required to connect the Supplemental
Roof HVAC Equipment to the Premises and provide pads and structural support for
the Supplemental Roof HVAC Equipment (collectively, the “Landlord’s Roof Work”), at Tenant’s cost,
which costs (collectively, the “Landlord’s
Roof Costs”) shall be reasonably consistent with competitive based
pricing and shall be paid for by Tenant within thirty (30) days after invoice,
and Tenant’s use of and access to the Supplemental Roof

 

27

 

HVAC Equipment (and the
other Supplemental Equipment) shall be in accordance with and subject to the
applicable provisions set forth in Section 26.30.  Tenant shall be solely responsible and shall
pay for the Actual Costs (as defined below) of and related to such Supplemental
Equipment, including, without limitation, the cost of installation, operation
and maintenance, electricity and other utilities consumed thereby (including
all electricity consumed from the Additional Power Source and Supplemental
Electrical Equipment), as determined by separate meters or sub-meters installed
as part of the Supplemental Equipment, increased wear and tear on existing
equipment and other similar charges, which costs shall be paid by Tenant to
Landlord within thirty (30) days of demand therefor.  To the extent such Supplemental Equipment is installed during the
construction of the initial Tenant Improvements pursuant to the Tenant Work
Letter, the Landlord’s Roof Costs (if applicable) and all other costs incurred
in connection with the design, acquisition and installation of the Supplemental
Equipment may be paid out of and deducted from the Tenant Improvement
Allowance.

 

6.1.8        Subject to all applicable Laws, and only during the
time the following is required to be provided by Landlord pursuant to
applicable Laws, Landlord shall make available for use by Tenant and Tenant’s
employees, twenty-four (24) hours per day, seven (7) days per week, on a
non-exclusive basis in common with Landlord and other tenants of the Building,
and at no additional charge to Tenant (except as part of Operating Expenses),
one (1) men’s and one (1) women’s locker room facilities (with
showers) in the Building, which use by Tenant and Tenant’s employees shall also
be subject to such reasonable and non-discriminatory rules and regulations
therefor as may be adopted by Landlord from time to time.

 

6.1.9        Landlord shall provide a commercially reasonable
system pursuant to which Tenant, in the event of an emergency, may promptly
contact the Building manager and Building engineer or their equivalent
twenty-four (24) hours a day seven (7) days a week (whether or not within the
Business Hours).

 

Notwithstanding
anything to the contrary contained in this Lease (including, without
limitation, Article 4 above and this Article 6), in addition to
Tenant’s rights set forth in Section 6.1.4 above, Tenant may, at any time
and from time to time, upon providing Landlord with at least thirty (30)
days’ prior written notice, elect to have any of Tenant’s employees (or third
party vendors reasonably approved by Landlord) perform all or some of the
following services for the Premises: 
day porter, handyman, non-Building Systems and Equipment engineer,
locksmith and the purchase and provision of materials and supplies for all or
any of the same; provided, however, that (i) all personnel performing such
services shall abide by Landlord’s reasonable rules, regulations and procedures
in connection therewith, (ii) such services shall be performed in a
first-class manner (in a manner comparable to the provision of such services by
the landlords of Comparable Buildings), (iii) such personnel of third party
vendors shall not create labor disharmony at the Project (and at Landlord’s
request, all third party vendors providing such services shall be union labor
in compliance with the labor agreements affecting the Project), and
(iv) to the extent any such services would otherwise have been performed
by Landlord as part of Operating Expenses and not as an additional service
pursuant to Section 6.4 below, from and after the date any such services
are so provided by Tenant in lieu of Landlord providing same, the cost and
expense of providing such services to the Premises and the premises of other
tenants in the Building shall be excluded from Operating Expenses for each
Expense Year (or partial Expense Year) thereafter with a corresponding
reduction in the cost component for such services contained in the Operating
Expenses for the Expense Base Year.

 

6.2           Overstandard Tenant
Use.  Tenant shall not, without
Landlord’s prior written consent (which consent may not be unreasonably
withheld, conditioned or delayed), (i) use heat-generating machines,
machines other than normal office machines, or equipment or lighting other than
building standard lights in the Premises, which may materially adversely affect
the temperature otherwise maintained by the air conditioning system, or
(ii) materially increase the water, including, without limitation, as a
result of the use of any kitchen areas and/or executive washrooms and/or
showers installed in the Premises 
(unless Tenant agrees to pay for such excess water) normally furnished for
the normal office use for the Premises by Landlord pursuant to the terms of
Section 6.1.3 above.  In addition,
except as expressly provided in Section 6.1.7 above with respect to
Tenant’s use of electricity from the Additional Power Source for Tenant’s Data
Center and the Supplemental HVAC Equipment, and use of electricity from any
other Supplemental Electrical Equipment installed by Tenant, Tenant shall not
use electricity in the Premises in excess of the capacity of the electricity
feeders and risers serving the Premises. 
If Tenant uses water in excess of the quantities to be provided by
Landlord for normal office use pursuant to Section 6.1.3 above, or if
Tenant’s consumption of electricity exceeds the Consumption Standard (as
defined below), then Tenant shall pay to Landlord, within thirty (30) days
after invoice (which invoice shall include a detailed description of the
applicable charges), the sum of: 
(A) the Actual Cost (as defined below) of such excess consumption
based upon utility rates paid by Landlord, plus a three and one-half percent
(3.5%) surcharge on such consumption costs to cover Landlord’s administrative
costs; plus (B) the Actual Cost of the installation, operation (but not
including utility charges to the extent separately metered to the Premises and
paid by Tenant), and maintenance of

 

28

 

equipment which is
installed in order to supply such excess consumption; plus (C) the cost of
the increased wear and tear and depreciation on existing equipment caused by
such excess consumption, as determined by Landlord in accordance with sound
real estate management practices consistently applied.

 

As used herein,
the “Consumption Standard” shall
mean five (5) watts per usable square foot of the Premises for connected
electrical load of 120/208 voltage power equipment and one (1) and
three-tenths (1.3) watts per usable square foot of the Premises for
connected electrical load for 277/480 voltage power equipment, calculated on an
average annualized basis for the Business Hours described in Section 6.1.1
above, which electricity consumption shall be: 
(1) defined without regard to (x) electricity consumed by or related to
the Supplemental Equipment (since Tenant is obligated to pay for all costs of
electricity used in connection therewith as provided in Section 6.1.7
above), and (y) electricity utilized by the Building’s base building equipment
such as the Base Building HVAC System and Building elevators; and (2)
applicable to the entirety of the Premises (and not applicable solely on a
floor-by-floor basis).

 

As used herein,
the “Actual Cost” shall mean the
actual out-of-pocket incremental extra costs to Landlord to provide any
additional services charged by utility companies and/or any other third party
providers, without mark-up for profit, overhead, depreciation or administrative
costs (except as otherwise expressly provided herein to the contrary).  To the extent the entire salary of any
individual personnel providing any additional services to Tenant pursuant to
this Section 6.2 or Section 6.4 below is included in Operating
Expenses, Actual Cost shall not include and Tenant shall not be required to pay
an additional amount above the administrative and/or surcharges specifically
set forth in this Lease for use of such personnel (except to the extent such
personnel is utilized by Tenant on an overtime basis).  Landlord may install devices to separately
meter any such excess use, and in such event Tenant shall pay to Landlord the
Actual Cost of such additional metering devices within thirty (30) days
after demand therefor if excess use is shown by such meters to be present.

 

In addition to the
foregoing, if Tenant desires to use HVAC in the Premises from other than the
Supplemental HVAC Equipment described in Section 6.1.7 above during hours
other than the Business Hours: 
(a) to the extent controls for such non-Business Hours HVAC are not
contained with the Premises, Tenant shall give Landlord such prior notice of
Tenant’s desired use thereof, as Landlord shall from time to time establish as
appropriate; provided that, at a minimum, Tenant shall be able to accomplish
such notice through telephonic dial-up and/or by contacting the Building’s
property manager; (b) Landlord shall supply such non-Business Hours HVAC
to Tenant at such hourly cost to Tenant as Landlord shall from time to time
establish; such hourly cost shall be determined on a per floor basis and shall
equal the sum of (I) the Actual Cost of the utilities consumed to provide
such non-Business Hours HVAC, plus a three and one-half percent (3.5%)
surcharge on such consumption costs to cover Landlord’s administrative costs,
plus (II) the actual cost of the increased wear and tear and depreciation
on equipment to provide such non-Business Hours HVAC (as determined by Landlord
in accordance with sound real estate management practices consistently applied,
but utilizing an 18-year useful life depreciation period), plus (III) the
Actual Cost of maintenance incurred in connection therewith; and
(c) Tenant shall pay such cost to Landlord as Additional Rent within
thirty (30) days after invoice (which invoice shall include a detailed
description of the applicable charges).

 

All electricity
and other utility charges to the extent paid directly by Tenant to Landlord
pursuant to this Section 6.2 shall be excluded from Operating Expenses and
Utilities Costs.

 

6.3           Interruption of Use.  Subject to Landlord’s indemnity of Tenant in
Section 10.1.2 below and subject to the abatement provisions in
Section 6.5 below, Tenant agrees that Landlord shall not be liable for
damages, by abatement of Rent or otherwise, for failure to furnish or delay in
furnishing any service (including telephone and telecommunication services), or
for any diminution in the quality or quantity thereof, when such failure or
delay or diminution is occasioned, in whole or in part, by repairs,
replacements or improvements (and Landlord agrees to perform any non-emergency
work during non-Business Hours unless otherwise approved by Tenant), by any
strike, lockout or other labor trouble, by inability to secure electricity,
gas, water, or other fuel at the Building or Real Property after reasonable
effort to do so, by any accident or casualty whatsoever, by act or default of
Tenant or other parties, or by any other cause; and such failures or delays or
diminution shall never be deemed to constitute an eviction or disturbance of
Tenant’s use and possession of the Premises (subject, however, to Landlord’s
covenant of quiet enjoyment in Article 20 below) or relieve Tenant from
paying Rent (except as provided in Section 6.5 below) or performing any of
its obligations under this Lease; provided, however, that Landlord shall use
commercially reasonable and diligent efforts to restore such service as soon as
commercially practicable to the extent the restoration of the same is not the
obligation of Tenant, the utility company or other third party.  Furthermore, except as expressly provided in
Section 10.1 below, Landlord shall not be liable under any circumstances
for a loss of, or injury to, property or for injury to, or interference with,
Tenant’s business, including, without limitation, loss of profits, however
occurring, through or in connection with or incidental to a failure to furnish
any of the services or utilities as set forth in this Article 6.

 

29

 

6.4           Additional Services.  Upon Tenant’s request, Landlord shall have
the right, but not the obligation, to provide any additional services which may
be required by Tenant, including, without limitation, locksmithing, lamp
replacement, additional janitorial service, and additional repairs and
maintenance, provided that Tenant shall pay to Landlord within thirty (30)
days after billing, the sum of the Actual Costs to Landlord of such additional
services, plus an administration fee equal to three and one-half percent (3.5%)
of such Actual Costs.  Charges for any
service for which Tenant is required to pay from time to time hereunder shall
be deemed Additional Rent hereunder, and shall be billed on a monthly basis.

 

6.5           Abatement of Rent
When Tenant Is Prevented From Using Premises.  In the event that Tenant is actually prevented from using, and
does not use, the Premises or any portion thereof, for the Eligibility Period
(as defined below) as a result of any of the following (each an “Abatement Event”) (i) any
construction, repair, maintenance or alteration performed by Landlord after the
Lease Commencement Date, (ii) any failure by Landlord to provide to the
Premises any of the essential utilities and services required to be provided in
Sections 6.1.1 or 6.1.2 above, (iii) any failure by Landlord to
provide access to the Premises or Parking Facilities, (iv) any failure by
Landlord to perform Landlord’s repair obligations under Section 7.2 below
prior to the expiration of the Outside Repair Period (as defined in
Section 7.3 below), (v) the presence of Hazardous Materials in, on or
around the Building, the Premises or the Real Property which were not caused or
introduced by Tenant or Tenant’s agents, employees, licensees or invitees, and
which Hazardous Materials pose a material and significant health risk to
occupants of the Premises as determined by applicable governmental authorities
pursuant to applicable Environmental Laws by written notice delivered to Landlord
and Tenant, or (vi) any entry onto the Premises by Landlord pursuant to
Article 23 below, then Tenant’s obligation to pay Base Rent and Tenant’s
Share of increases in Operating Expenses, Tax Expenses and Utilities Costs
shall be abated or reduced, as the case may be, from and after the first (1st)
day following the Eligibility Period and continuing until such time that Tenant
continues to be so prevented from using, and does not use, the Premises or a
portion thereof (the “Unusable Area”),
in the proportion that the rentable square feet of the portion of the Premises
that Tenant is prevented from using, and does not use, bears to the total
rentable square feet of the Premises. 
However, if less than all, but a substantial portion, of the Premises is
unfit for occupancy and the remainder of the Premises (other than Tenant’s
computer and data rooms) is not sufficient to allow Tenant to effectively
conduct its business therein as a result of an Abatement Event, and if Tenant
does not conduct its business from the Unusable Area affected by such Abatement
Event and such remaining portion (other than Tenant’s computer and data
rooms), then the Base Rent and Tenant’s Share of increases in Operating
Expenses, Tax Expenses and Utilities Costs for the entire Premises shall be
abated for such time after the expiration of the Eligibility Period that Tenant
continues to be so prevented from using, and does not use, the entire Premises
(other than Tenant’s computer and data rooms, which areas if used by Tenant
shall not be eligible for any such abatement during the period of such
use).  If, however, Tenant reoccupies
any portion of the Premises during such period, the Base Rent and Tenant’s
Share of increases in Operating Expenses, Tax Expenses and Utilities Costs
allocable to such reoccupied portion, based on the proportion that the rentable
square feet of such reoccupied portion of the Premises bears to the total
rentable square feet of the Premises, shall be payable by Tenant from the date
Tenant reoccupies such portion of the Premises.  If Tenant’s right to abatement occurs during a free rent period
which arises after the Lease Commencement Date, Tenant’s free rent period shall
be extended for the number of days that the abatement period overlapped the
free rent period (“Overlap Period”).  Landlord shall have the right to extend the
Lease Expiration Date for a period of time equal to the Overlap Period if
Landlord sends a Notice to Tenant of such election within thirty (30) days
following the end of the extended free rent period.

 

As used herein, the “Eligibility Period” shall mean five (5)
consecutive business days or fifteen (15) non-consecutive business days in any
twelve (12) consecutive month period (which fifteen (15) business day period
may be reduced to ten (10) non-consecutive business days in any twelve
(12) consecutive month period to the extent Landlord receives insurance
proceeds covering the rental loss for such shorter period).

 

In addition, during any
period following the Eligibility Period that Tenant is so prevented from using
and does not use the Unusable Area and is entitled to abatement of Rent as
provided hereinabove, Landlord shall pay to Tenant, to the extent covered by
insurance retained by Landlord as part of Operating Expenses, any incremental reasonable,
out-of-pocket expense that the Tenant incurs in temporarily relocating the
functions previously performed in the Unusable Area to a different
location.  For this purpose, an
incremental expense shall be any expense that the Tenant incurs in temporarily
relocating from the Unusable Area to a temporary location and then relocating
back to the Unusable Area (after such area has been made fit for Tenant’s
Permitted Use) that Tenant would not have had to incur but for such relocation.

 

Such right to abate Base
Rent and Tenant’s Share of increases in Operating Expenses, Tax Expenses and
Utilities Costs (and right to receive any such incremental out-of-pocket
temporary relocation expenses) shall be Tenant’s sole and exclusive remedy at
law or in equity for an Abatement

 

30

 

Event; provided, however,
that (A) nothing in this Section 6.5 shall impair Tenant’s rights
under Section 19.7 below, and (B) if Landlord has not cured such
Abatement Event within nine (9) months after receipt of notice from Tenant of
such Abatement Event, Tenant shall have the right to terminate this Lease
during the first ten (10) business days of each calendar month following the
end of such nine (9) month period until such time as Landlord has cured the
Abatement Event, which right may be exercised only by delivery of thirty (30)
days’ prior notice to Landlord (the “Abatement
Event Termination Notice”) during such ten (10) business-day period,
and shall be effective as of a date set forth in the Abatement Event
Termination Notice (the “Abatement Event
Termination Date”), which Abatement Event Termination Date shall not
be less than thirty (30) days, and not more than one hundred twenty (120) days
following the delivery of the Abatement Event Termination Notice.  Notwithstanding anything contained in this
Section 6.5 to the contrary, Tenant’s Abatement Event Termination Notice
shall be null and void (but only in connection with the first Abatement Event
Termination Notice sent by Tenant with respect to each separate Abatement
Event) if Landlord cures such Abatement Event within such thirty (30) day
period following receipt of such Abatement Event Termination Notice.  If Tenant’s right to abatement and/or
termination occurs because of a damage or destruction pursuant to
Article 11 or a taking pursuant to Article 13, then (1) the
Eligibility Period shall not be applicable, and (2) Tenant’s termination
right in this Section 6.5 shall not be applicable, as such abatement and
termination rights shall be governed by Articles 11 and 13, respectively,
and not this Section 6.5. 
Notwithstanding the foregoing, Tenant shall not have the right to
terminate this Lease pursuant to the terms of this Section 6.5, if, as of
the date of delivery by Tenant of the Abatement Event Termination Notice,
(x) the first trust deed holder of the Building (the “Bank”) has recorded a notice of default on
the Building or filed a notice evidencing a legal action by the Bank against
Landlord on the Building, and (y) the Bank diligently proceeds to gain
possession of the Premises and, to the extent Bank does gain possession of the
Premises, the Bank diligently proceeds to cure such Abatement Event. Except as
expressly provided in this Section 6.5, nothing contained herein shall be
interpreted to mean that Tenant is excused from paying Rent due hereunder.

 

6.6           Access to Premises
and Parking Passes.  Subject to all
of the terms and conditions of this Lease, including the Rules and Regulations
attached hereto as Exhibit D, and all applicable Laws, Tenant shall
have access to the Premises (and, subject to Article 24 below, the number
of parking passes within the Parking Allotment at the designated locations for
such parking passes specified therefor in Section 10.1 of the Summary with
respect to Tenant’s Reserved Parking Passes and Tenant’s Unreserved Parking
Structure Passes) twenty-four (24) hours per day, seven (7) days per week.

 

6.7           Telecommunications
and Internet Providers.  Subject to
Tenant’s compliance with all applicable Laws, Tenant shall be permitted, at its
sole cost and expense, to contract with any telecommunications and/or internet
provider(s) of its choice to provide telecommunications and/or internet service
to the Premises; provided, however, such telecommunications and/or internet
provider shall be subject to Landlord’s approval, which approval shall not be
unreasonably withheld or conditioned, and shall be granted or denied within
five (5) business days after Tenant’s request for approval is
delivered to Landlord.  At Tenant’s
expense, and subject to Tenant’s compliance with the provisions of
Section 26.30 below, (i) Landlord shall provide Tenant and/or such
approved telecommunications and/or internet provider(s) with non-exclusive
access to two (2) of the Building’s existing risers (which do not extend
from the Building’s MPOE) and exclusive access to the Building’s existing four
(4) 4” risers which extend from the Building’s MPOE to the roof for the purpose
of installing any wiring and cabling (including fiber optic wiring and cabling)
and equipment necessary to provide such telecommunications and/or internet
service, and (ii) shall reasonably cooperate with Tenant to allow such
providers to utilize Landlord’s existing easements and/or seeking new easements
reasonably approved by Landlord over adjacent properties for such purposes
consistent with the Underlying Documents; provided, however, any such access,
installation, operation, use and/or repair of any such equipment shall not
interfere with or adversely affect Landlord, other tenants of the Building or
Project, or the condition or operation of the Building, the Building’s Systems
and Equipment and/or the Project, and shall be subject to a mutually acceptable
access agreement to be entered into by Landlord, Tenant and such provider(s)
prior to any such access or installation.

 

ARTICLE 7

REPAIRS

 

7.1           Tenant’s Repairs.  Subject to and except for the items which
are Landlord’s repair obligations in Section 7.2 and subject to the
provisions of Articles 11 and 13 below, Tenant shall, at Tenant’s own
expense, keep the Premises and all portions thereof which were not constructed
or installed by or on behalf of Landlord as part of the Base, Shell and Core,
including all improvements, fixtures, equipment and furnishings in the Premises
(including, without limitation, all non-Base, Shell and Core systems and
equipment within the Premises, including all components and equipment and
systems providing distribution from the Base, Shell and Core systems and
equipment), in first-class order, condition and repair at all times during the
Lease Term, except for ordinary wear and tear and casualty

 

31

 

damage which is not
specifically made the responsibility of Tenant under this Lease.  In connection with such repair obligations,
Tenant shall, at Tenant’s own expense but subject to the prior approval of
Landlord to the extent required under Article 8 (which approval shall not
be unreasonably withheld, conditioned or delayed), and within any reasonable
period of time specified by Landlord, promptly and adequately repair all damage
to the Premises and replace or repair all damaged or broken fixtures and
appurtenances; provided however, if Tenant fails to make such repairs within
thirty (30) days after notice from Landlord and after Landlord has notified
Tenant of its intention to do so (or immediately in case of emergency and
without notice required from Landlord to Tenant), Landlord may, but need not,
make such repairs and replacements, and Tenant shall pay to Landlord, within
thirty (30) days after invoice, the actual, reasonable and documented
costs thereof, plus an administration fee equal to five percent (5%) of
such costs.  Landlord may, but shall not
be required to, enter the Premises (but except during emergencies, Landlord may
not enter Secured Areas, as defined in 23.2 of this Lease) at all reasonable
times, and upon at least one (1) business day’s prior notice to Tenant (or
without notice in case of emergency), to make such repairs, alterations,
improvements and additions to the Premises or to the Building or to any
equipment located in the Building as shall be necessary or desirable in
connection with the first-class management and operation standards for the
Building set forth herein, and/or as may be required for Landlord to comply
with the provisions of this Lease and/or as may be required by applicable Laws
and/or governmental or quasi-governmental authority or court order or
decree.  Landlord shall use commercially
reasonable efforts to minimize interference with Tenant’s use of and access to
the Premises during Landlord’s entry into the Premises to perform such work
pursuant to the foregoing provisions of this Section 7.1.

 

7.2           Landlord’s Repairs.  Anything contained in Section 7.1 above
to the contrary notwithstanding, and subject to Articles 11 and 13 below,
at all times during the Lease Term Landlord shall repair and maintain in first
class order, condition and repair and in a manner generally consistent with the
maintenance and repair standards of Comparable Buildings, the structural
portions of the Building (including, without limitation, foundations, exterior
walls, bearing walls, support beams, columns, shafts, elevator cabs and fire
stairwells), the exterior windows of the Building, the roof of the Building,
the Base, Shell and Core components of the Building (including the restrooms
originally installed as part of the Base, Shell and Core and the mechanical,
electrical and telephone closets), the Systems and Equipment of the Building or
Project located outside the Premises (and inside the Premises to the extent
part of the Base, Shell and Core), and the common areas of the Building (and
the common areas of the Real Property, including the Parking Facilities,
plazas, art work and sculptures, until such time as such repair and maintenance
obligations therefor are made the obligation of any common area association);
provided, however, to the extent such Landlord-required maintenance and repairs
are required to be performed as a result of the negligence or willful
misconduct or omission of any duty by Tenant, its agents, employees or
invitees, Tenant shall pay to Landlord as additional rent, the reasonable cost
of such maintenance and repairs (but only to the extent such cost is not covered
by Landlord’s insurance obtained pursuant to Section 10.2 of this
Lease).  Subject to Landlord’s indemnity
of Tenant in Section 10.1.2 below and subject to the abatement provisions
in Section 6.5 above, there shall be no abatement of Rent and no liability
of Landlord (including any liability for any injury to or interference with
Tenant’s business) arising from the making of or failure to make any repairs,
alterations or improvements in or to any portion of the Real Property, the
Building or the Premises or in or to fixtures, appurtenances and equipment
therein.  Subject to Section 7.3
below, 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.  Notwithstanding the foregoing
or anything in this Lease to the contrary, Tenant shall not be required to make
any repair to, modification of, or addition to the Base, Shell and Core of the
Building, and/or the Systems and Equipment of the Building and Project located
outside the Premises (and inside the Premises to the extent part of the Base,
Shell and Core), except and to the extent required because of (i) any
Alterations or Tenant Improvements installed by or on behalf of Tenant,
(ii) any specific act, omission or negligence of Tenant or Tenant’s
agents, contractors, employees or licensees that is not covered by insurance
obtained, or required to be obtained by, Landlord as part of Operating Expenses
and as to which the waiver of subrogation applies, and/or (iii) Tenant’s
specific manner of use of the Premises (as distinguished from general office
use).

 

7.3           Tenant’s Self-Help
Rights.  Notwithstanding anything to
the contrary set forth in this Article 7, if Tenant provides written
notice to Landlord of the need for repairs and/or maintenance which are
Landlord’s obligation to perform under the terms of this Lease, and Landlord
fails to undertake such repairs and/or maintenance within a reasonable period
of time, given the circumstances, after receipt of such notice, but in any
event not later than thirty (30) days after receipt of such notice (or such
longer time as is reasonably necessary if more than thirty (30) days are
reasonably required to complete such repairs and Landlord commences such
repairs within such 30-day period and thereafter diligently attempts to
complete same, provided that in cases of emergency involving imminent threat of
serious injury or damage to persons or property within the Premises or the
failure of any essential services which Landlord is required to provide to the
Premises pursuant to this Lease and which materially interferes with Tenant’s
operation of its business in the Premises, Landlord shall have only one (1)
business day after receipt of such notice or such later period of time as is
reasonably necessary to commence such

 

32

 

corrective action), then
Tenant may proceed to undertake such repairs and/or maintenance upon delivery
of an additional three (3) business days’ notice to Landlord that Tenant is
taking such required action.  If such
repairs and/or maintenance were required under the terms of this Lease to be
performed by Landlord and are not performed by Landlord prior to the expiration
of such 5-business day period (the “Outside
Repair Period”), then Tenant shall be entitled to reimbursement by
Landlord of Tenant’s actual, reasonable, and documented costs and expenses in
performing such maintenance and/or repairs. 
Such reimbursement shall be made within thirty (30) days after
Landlord’s receipt of invoice of such costs and expenses, and if Landlord fails
to so reimburse Tenant within such 30-day period, then Tenant shall be entitled
to offset against the Rent payable by Tenant under this Lease the amount of
such invoice together with interest thereon, at the Interest Rate, which shall
have accrued on the amount of such invoice during the period from and after
Tenant’s delivery of such invoice to Landlord through and including the earlier
of the date Landlord delivers the payment to Tenant or the date Tenant offsets
such amount against the Rent; provided, however, that notwithstanding the
foregoing to the contrary, if (i) Landlord delivers to Tenant prior to the
expiration of the Outside Repair Period described above, a written objection to
Tenant’s right to receive any such reimbursement based upon Landlord’s good
faith claim that such action did not have to be taken by Landlord pursuant to
the terms of this Lease, or (ii) Landlord delivers to Tenant, within
thirty (30) days after receipt of Tenant’s invoice, a written objection to the
payment of such invoice based upon Landlord’s good faith claim that such
charges are excessive (in which case, Landlord shall reimburse Tenant, within
such 30-day period, the amount Landlord contends would not be excessive), then
Tenant shall not be entitled to such reimbursement or offset against Rent, but
Tenant, as its sole remedy, may proceed to institute arbitration pursuant to Section 26.32
below to determine and collect the amount, if any, of such reimbursement.  In the event Tenant prevails in such
arbitration and receives a monetary arbitration award against Landlord, then
Landlord shall pay such arbitration award to Tenant within thirty (30) days of
date such arbitration award is issued. 
If such arbitration award is not so paid, then, notwithstanding any
contrary provision of this Lease, Tenant shall be entitled to offset against
the Rent payable under this Lease the amount of such monetary arbitration award
together with interest which shall have accrued on such monetary arbitration
award during the period from and after the day after the date such monetary
arbitration award was issued through and including the date that Tenant offsets
against the Rent the amount of such monetary arbitration award, at the Interest
Rate.  In the event Tenant undertakes
such repairs and/or maintenance, and such work will affect the Systems and
Equipment, any structural portions of the Building, any common areas of the
Real Property or other areas outside the Building and/or the exterior
appearance of the Building or Real Property (or any portion thereof), Tenant
shall use only those unrelated third party contractors used by Landlord in the
Building for such work unless such contractors are unwilling or unable to
perform such work at competitive prices, in which event Tenant may utilize the
services of any other qualified contractor which normally and regularly
performs similar work in Comparable Buildings. 
Tenant shall comply with the other terms and conditions of this Lease if
Tenant takes the required action, except that Tenant is not required to obtain
Landlord’s consent for such repairs.

 

ARTICLE 8

ADDITIONS AND ALTERATIONS

 

8.1           Landlord’s Consent
to Alterations.  Tenant may not make
any improvements, alterations, additions or changes to the Premises
(collectively, the “Alterations”)
without first procuring the prior written consent of Landlord to such
Alterations, which consent shall be requested by Tenant not less than
fifteen (15) business days prior to the commencement thereof.  Landlord shall notify Tenant of its approval
or disapproval of any such Alterations within fifteen (15) business days after
receipt of Tenant’s written request therefor; if Landlord fails to notify
Tenant of such approval or disapproval and such failure continues for five (5)
days after notice of such failure from Tenant, then Landlord shall be deemed to
have approved the Alterations so requested by Tenant.  Landlord shall not withhold its consent for any Alterations,
unless the making or installation of any Alteration would or may result in any
of the following (collectively, a “Design Problem”), in which event Landlord
may withhold its consent in its sole and absolute discretion:  (i) such Alteration would or may affect
the structural components of the Building or the Systems and Equipment;
(ii) such Alteration would or may affect any area, or can be seen from any
area, outside the Premises or the Building; (iii) such Alteration would
not comply with applicable Laws or any other provisions of this Lease; (iv)
such Alteration would or may unreasonably interfere with the normal and
customary business operations of other tenants of the Building or Project; (v)
such Alteration would or may cause permanent damage or injury to any portion of
the Project; or (vi) such Alteration would or may cause or create a dangerous
or hazardous condition.  Tenant shall
pay for all overhead, general conditions, fees and other costs and expenses of
the Alterations, and shall pay to Landlord a Landlord supervision fee of three
and one-half percent (3.5%) of the cost of the Alterations.  Notwithstanding anything to the contrary
contained in this Section 8.1, Tenant may make non-structural interior
alterations, additions or improvements to the interior of the Premises,
including, without limitation, installation of telephone, computer and
telecommunication lines and cables within the interior of the Premises
(collectively, the “Acceptable Changes”)
without Landlord’s consent, provided that: 
(A) Tenant delivers to Landlord written notice of such Acceptable
Changes at least ten (10) days prior to

 

33

 

the commencement thereof;
(B) the aggregate cost of all such Acceptable Changes during any
twelve (12) consecutive month period does not exceed Three Hundred
Thousand Dollars ($300,000.00); (C) such Acceptable Changes shall be
performed by or on behalf of Tenant in compliance with the other provisions of
this Article 8; (D) such Acceptable Changes do not require the
issuance of a building permit or other governmental approval; (E) such
Acceptable Changes would not result in a Design Problem; and (F) such
Acceptable Changes shall be performed by qualified contractors and
subcontractors which normally and regularly perform similar work in Comparable
Buildings.  The construction of the
initial improvements to the Premises shall be governed by the terms of the
Tenant Work Letter and not the terms of this Article 8.

 

8.2           Manner of
Construction.  Landlord may impose,
as a condition to all Alterations or repairs of the Premises or about the
Premises, such reasonable requirements consistent with the requirements of
landlords of Comparable Buildings (provided that the same shall in any event be
consistent with the terms and conditions of this Lease).  Tenant shall construct such Alterations and
perform such repairs: 
(i) utilizing for such purposes only contractors, materials,
mechanics and materialmen reasonably approved by Landlord, except that Landlord
may designate the contractors and subcontractors to perform all work affecting
the structural components of the Building or the Systems and Equipment provided
such contractors and subcontractors are unrelated to Landlord and agree to
perform such work at competitive prices in the market where the Premises are
located and are reasonably available; (ii) in conformance with any and all
applicable rules and regulations of any federal, state, county or municipal
code or ordinance and pursuant to a valid building permit, issued by the city
of Los Angeles; and (iii) in conformance with Landlord’s reasonable,
non-discriminatory construction rules and regulations.  Landlord’s approval of the plans,
specifications and working drawings for Tenant’s Alterations shall create no
responsibility or liability on the part of Landlord for their completeness,
design sufficiency, or compliance with all laws, rules and regulations of
governmental agencies or authorities. 
All work with respect to any Alterations must be done in a good and
workmanlike manner and diligently prosecuted to completion so that the Premises
shall at all times be a complete unit except during the period of work.  In performing the work of any such
Alterations, Tenant shall have the work performed in such manner so as not to
unreasonably obstruct access to the Building or Real Property or the common
areas for any other tenant of the Real Property, and so as not to obstruct the
business of Landlord or other tenants in the Real Property, or interfere with
the labor force working on the Real Property. 
In the event that Tenant makes any Alterations, Tenant agrees to carry
“Installation Risk” insurance in an amount reasonably approved by Landlord
covering the construction of such Alterations, and such other insurance as
Landlord may reasonably require, it being understood and agreed that all of
such Alterations shall be insured by Tenant pursuant to Article 10 of this
Lease immediately upon completion thereof. 
In addition, with respect to any Alterations to be made in the Building
which cost in excess of $300,000.00, Landlord may, in its discretion, require
Tenant to obtain a lien and completion bond, or, at Tenant’s option, some
alternate form of security reasonably satisfactory to Landlord, in an amount
reasonably sufficient to ensure the lien-free completion of such Alterations
and naming Landlord as a co-obligee. 
Upon completion of any Alterations, Tenant agrees to cause a Notice of
Completion to be recorded in the office of the Recorder of the county in which
the Real Property is located in accordance with Section 3093 of the Civil
Code of the State of California or any successor statute, and Tenant shall
deliver to the management office for the Real Property a reproducible copy of
the “as built” drawings of the Alterations. 
In the event Tenant fails to so record the Notice of Completion as
required pursuant to this Section 8.2, then such failure shall not, in and
of itself, constitute a default hereunder but Tenant shall indemnify, defend,
protect and hold harmless Landlord and the Landlord Parties from any and all
loss, cost, damage, expense and liability (including, without limitation, court
costs and reasonable attorneys’ fees) in connection with such failure by Tenant
to so record the Notice of Completion as required hereunder.

 

8.3           Landlord’s Property.  All Alterations, improvements and/or
fixtures (excluding Tenant’s Property) which may be installed or placed in or
about the Premises, from time to time, shall be at the sole cost of Tenant and
shall become the property of Landlord upon expiration of the Lease Term or
earlier termination of this Lease; provided, however:  (i) Tenant may not remove any Tenant Improvements or Alterations
(excluding Tenant’s Property) paid for by Landlord with Landlord’s own funds
and/or out of any tenant improvement allowances provided by Landlord (except
any such removal made in connection with Alterations approved by Landlord or
not required to be approved by Landlord); and (ii) Landlord may, by
written notice delivered to Tenant concurrently with Landlord’s approval of the
final working drawings for any Alterations (or for the initial Tenant
Improvements constructed for the Premises), identify those Alterations (or
initial Tenant Improvements for Tenant’s initial occupancy, as the case may be)
which Landlord will require Tenant to remove at the expiration or earlier
termination of this Lease; provided further, however, that Tenant shall in no
event be required to remove any such Alterations (or initial Tenant
Improvements, as the case may be) other than (A) any raised floors,
internal stairwells, vaults and other similar special use tenant improvements
(collectively, “Special Use Improvements”),
and/or (B) those other improvements or alterations which are of such
specialized nature or application that the same are not reasonably suited for
use by a successor occupant of the Premises, and the cost to demolish such
items exceeds the cost to demolish general office improvements.  If Landlord requires Tenant to remove any
such Alterations (or any such initial tenant improvements) which are
constructed for the Premises, Tenant, at its sole cost and expense, shall
remove the identified Alterations and

 

34

 

improvements on or before
the expiration or earlier termination of this Lease and repair any damage to
the Premises caused by such removal.  If
Tenant fails to complete such removal and/or to repair any damage caused by the
removal of any Alterations or improvements, Landlord may do so and may charge
the cost thereof to Tenant.

 

8.4           Equipment Leasing
and Financing.  Notwithstanding any
provision of this Lease to the contrary, Tenant may enter into leases for,
and/or grant security interests in, Tenant’s Property in the Premises pursuant
to commercially reasonable leases and/or security agreements, and Landlord
shall:  (i) subordinate any
landlord lien rights it may have in and to such items to the interest of the
lessors and lenders therein and, in the case of trade fixtures, waive any claim
that the same are part of the Real Property by virtue of being affixed thereto;
and (ii) permit the lessors and lenders under any such leases and security
agreements to remove the leased or encumbered property upon default by Tenant
under such leases and security agreements, so long as (A) such removal
work is performed on or prior to the expiration of this Lease, or within ten
(10) days following any early termination of this Lease (provided the lessors
and/or lenders agree to and shall pay to Landlord the Rent which would
otherwise have been payable to Tenant under this Lease, had this Lease not been
so terminated, during the portion of such 10-day period following any such
early termination utilized by such parties for such removal), and (B) each
such party repairs any damage to the Premises caused by such removal.

 

ARTICLE 9

COVENANT AGAINST LIENS

 

Tenant has no
authority or power to cause or permit any lien or encumbrance of any kind
whatsoever, whether created by act of Tenant, operation of law or otherwise, to
attach to or be placed upon the Real Property, Building or Premises, and any
and all liens and encumbrances created by Tenant shall attach to Tenant’s
interest only, subject, however, to the provisions of Article 14
below.  Landlord shall have the right at
all times to post and keep posted on the Premises any notice which it deems
necessary for protection from such liens. 
Tenant covenants and agrees not to suffer or permit any lien of
mechanics or materialmen or others to be placed against the Real Property, the
Building or the Premises with respect to work or services claimed to have been
performed for or materials claimed to have been furnished to Tenant or the
Premises (excluding any work performed by Landlord), and, in case of any such
lien attaching or notice of any lien, reserves the right to contest such lien,
provided that Tenant shall, at its sole cost and expense, provide a bond in
accordance with the California Civil Code, Section 3143.  If Tenant does not timely exercise its right
to contest such lien, Tenant covenants and agrees to cause it to be released
and removed of record (by payment, statutory bond or other lawful means) within
twenty (20) business days after Tenant has notice of such lien.  Notwithstanding anything to the contrary set
forth in this Lease, in the event that such lien is not released and removed of
record within such 20-business day period, then Landlord, at its sole option,
may immediately take all action necessary to release and remove such lien,
without any duty to investigate the validity thereof, and all reasonable sums,
costs and expenses, including reasonable attorneys’ fees and costs, incurred by
Landlord in connection with such lien shall be deemed Additional Rent under
this Lease and shall be paid by Landlord to Tenant within thirty (30) days
after written demand by Landlord.

 

ARTICLE 10

INSURANCE

 

10.1         Indemnification and
Waiver.

 

10.1.1      Subject to and except as expressly provided in
Section 10.1.2 below: 
(i) Tenant hereby assumes all risk of damage to property and injury
to persons, in or on the Premises from any cause whatsoever; (ii) Tenant
hereby agrees that, to the extent not prohibited by law, Landlord, and its
partners and subpartners, and their respective officers, agents, property
managers, employees, and independent contractors (collectively, “Landlord Parties”) shall not be liable for,
and are hereby released from any responsibility for, any damage to property or
injury to persons or resulting from the loss of use thereof, which damage or
injury is sustained by Tenant or by other persons claiming through Tenant; and
(iii) Tenant shall indemnify, defend, protect, and hold harmless the
Landlord Parties from any and all loss, cost, damage, expense and liability,
including, without limitation, court costs and reasonable attorneys’,
accountants’, appraisers’ and other professionals’ fees (collectively, “Claims”) incurred in connection with or
arising from any cause in or on the Premises (including, without limitation,
Tenant’s installation, placement and removal of Alterations, improvements,
fixtures and/or equipment in or on the Premises), and any negligence or willful
misconduct of Tenant or of any person claiming by, through or under Tenant, or
of the contractors, agents, employees or licensees of Tenant or any such
person, in, on or about the Premises, Building and Real Property; provided,
however, such indemnity shall not include any lost profit, loss of business or
other consequential damages.

 

35

 

10.1.2      Notwithstanding the provisions of Section 10.1.1
above to the contrary, the assumption of risk and release by Tenant set forth
in Sections 10.1.1 (i) and (ii) above, and Tenant’s indemnity of
Landlord in Section 10.1.1 (iii) above, shall not apply to:  (i) any Claims to the extent resulting
from the gross negligence or willful misconduct of Landlord or the Landlord
Parties and not insured or required to be insured by Tenant under this Lease
(collectively, the “Excluded Claims”);
or (ii) any loss of or damage to Landlord’s property to the extent
Landlord has waived such loss or damage pursuant to Section 10.4
below.  In addition, Landlord shall
indemnify, defend, protect and hold Tenant harmless from all such Excluded
Claims, except for (A) any loss or damage to Tenant’s property to the
extent Tenant has waived such loss or damage pursuant to Section 10.4
below, and (B) any lost profits, loss of business or other consequential
damages.

 

10.1.3      Tenant’s agreement to indemnify Landlord and
Landlord’s agreement to indemnify Tenant pursuant to the foregoing provisions
of this Section 10.1 are not intended to and shall not relieve any
insurance carrier of its obligations under policies required to be carried by Tenant
and Landlord pursuant to the provisions of this Lease, to the extent such
policies cover the matters subject to Tenant’s and Landlord’s indemnification
obligations; nor shall they supersede any inconsistent agreement of the parties
set forth in any other provision of this Lease.

 

10.1.4      The provisions of this Section 10.1 shall survive
the expiration or sooner termination of this Lease.

 

10.2         Landlord’s Insurance
and Tenant’s Compliance with Insurance Requirements.  Landlord shall, from and after the date hereof
until the expiration of the Lease Term, maintain in effect the following
insurance:  (i) physical damage
insurance (including a rental loss endorsement) providing coverage in the event
of fire, vandalism, malicious mischief and all other risks normally covered
under “special form” policies in the geographical area of the Building,
covering the Building (excluding, at Landlord’s option, the property required
to be insured by Tenant pursuant to Section 10.3 below) in an amount not
less than one hundred percent (100%) of the full replacement value (less
reasonable deductibles) of the Building, together with such other risks as
Landlord may from time to time determine (provided however, that Landlord shall
have the right, but not the obligation, to obtain earthquake and/or flood
insurance); and (ii) commercial general liability insurance including a
Commercial Broad Form Endorsement or the equivalent in the amount of at least
Five Million Dollars ($5,000,000.00), against claims of bodily injury, personal
injury or property damage arising out of Landlord’s operations, assumed
liabilities (including the liabilities assumed by Landlord under this Lease),
contractual liabilities, or use of the Building, common areas and Parking
Facilities.  Such insurance shall also
provide for rent continuation insurance equal to at least twelve (12)
months’ rent.  Such coverages may be
carried under blanket insurance policies. 
The insurers providing such insurance shall be licensed to do business
in the State of California and meet the criteria set forth in
Section 10.3.4(iii) below, and the policies of insurance with respect to
property loss or damage by fire or other casualty shall contain a waiver of
subrogation as provided in Section 10.4 below.

 

10.2.1      Landlord hereby represents to Tenant that, as of the
date of execution of this Lease, Landlord carries earthquake insurance for the
Building with a five percent (5%) deductible, for the full replacement cost of
the Building (the “Earthquake Coverage”).  In the event that Landlord shall elect at
any time after the date of execution of this Lease not to carry earthquake
insurance or to materially change either component of the Earthquake Coverage
from that maintained as of the date of execution of this Lease (any of which
Landlord shall have the right to do in Landlord’s sole and absolute
discretion), then not less than sixty (60) days prior to the termination of or
change in coverage, Landlord shall deliver notice thereof (the “Insurance
Reduction Notice”) to Tenant, in which event Tenant may, at Tenant’s sole
option and at Tenant’s sole cost and expense, elect to carry its own
supplemental earthquake insurance (but the same shall not affect Landlord’s
rights and/or obligation to carry any particular insurance pursuant to the terms
of this Lease).  To the extent that
Landlord shall deliver an Insurance Reduction Notice and shall thereafter elect
to materially change either component of the Earthquake Coverage for the
Building, Landlord shall deliver notice thereof to Tenant.

 

10.2.2      Tenant shall, at Tenant’s expense, comply as to the
Premises with all reasonable insurance company requirements pertaining to the
use of the Premises.  If Tenant’s
conduct or use of the Premises causes any increase in the premium for
Landlord’s insurance policies, then Tenant shall reimburse Landlord for any
such increase. Tenant, at Tenant’s expense, shall comply with all rules,
orders, regulations or requirements of the American Insurance Association
(formerly the National Board of Fire Underwriters) and with any similar body
where applicable due to Tenant’s Alterations or use of the Premises.

 

10.3         Tenant’s Insurance.  From and after the date (the “Insurance Start Date”) which is the earlier
of (i) the date Tenant enters any portion of the Premises to commence
occupancy thereof or perform any work under this Lease or install any of
Tenant’s Property therein or (ii) the Lease

 

36

 

Commencement Date, and
continuing thereafter throughout the Lease Term, Tenant shall maintain the
following coverages in the following amounts.

 

10.3.1      Commercial General Liability Insurance covering the
insured against claims of bodily injury, personal injury and property damage
arising out of Tenant’s operations, assumed liabilities or use of the Premises,
including a Broad Form Commercial General Liability endorsement covering the
insuring provisions of this Lease and the performance by Tenant of the
indemnity agreements set forth in Section 10.1 of this Lease, for limits of
liability not less than:

 

	
  Bodily Injury and
  Property Damage Liability

  	
   

  	
  $5,000,000.00 each
  occurrence

  $5,000,000.00 annual aggregate

  
	
   

  	
   

  	
   

  
	
  Personal Injury
  Liability

  	
   

  	
  $5,000,000.00 each
  occurrence

  $5,000,000.00 annual aggregate

  

 

10.3.2      Physical Damage Insurance covering (i) all office
furniture, trade fixtures, office equipment, merchandise and all other items of
Tenant’s property on the Premises installed by, for, or at the expense of
Tenant, (ii) the Tenant Improvements, including any Tenant Improvements
which Landlord permits to be installed above the ceiling of the Premises or
below the floor of the Premises, and (iii) all other improvements,
Alterations and additions to the Premises, including any improvements,
Alterations or additions installed at Tenant’s request above the ceiling of the
Premises or below the floor of the Premises. 
Such insurance shall be written on a “physical loss or damage” basis
under a “special form” policy, for the full replacement cost value new without
deduction for depreciation of the covered items and in amounts that meet any
co-insurance clauses of the policies of insurance and shall include a vandalism
and malicious mischief endorsement, and sprinkler leakage coverage.

 

10.3.3      Worker’s compensation insurance as required by law.

 

10.3.4      Business interruption, loss-of-income and extra
expense insurance in such amounts as will reimburse Tenant for direct or
indirect loss of earnings attributable to all perils commonly insured against
by prudent tenants or attributable to prevention of access to the Premises or
to the Building as a result of such perils.

 

10.3.5      Form of Policies.  The minimum
limits of policies of insurance required to be carried by Landlord and Tenant
under this Lease shall in no event limit the liability of Tenant or Landlord
under this Lease.  Tenant’s insurance
shall:  (i) name Landlord, and any
property manager and mortgagee of Landlord, as loss payees or additional
insureds, as their respective interests may appear (for the insurance to be
provided under Sections 10.3.1, 10.3.2(ii) and 10.3.2(iii) above, only);
(ii) specifically cover the liability assumed by Tenant under this Lease
to the extent insurable by a commercially reasonably available Commercial
General Liability Policy, including, but not limited to, Tenant’s obligations
under Section 10.1.1 of this Lease; (iii) be issued by an insurance
company having a rating of not less than A-VIII in Best’s Insurance Guide or
which is otherwise acceptable to Landlord and approved to do business in the
State of California; (iv) be primary insurance as to all claims thereunder
and provide that any insurance carried by Landlord is excess and is
non-contributing with any insurance requirement of Tenant; (v) provide
that said insurance shall not be canceled or coverage changed below the minimum
amounts required hereunder unless ten (10) days’ prior written notice shall
have been given to Landlord and any mortgagee or ground or underlying lessor of
Landlord, to the extent such names are furnished to Tenant; (vi) contain a
cross-liability endorsement or severability of interest clause reasonably
acceptable to Landlord; and (vii) include commercially reasonable
deductibles (which shall in no event exceed $100,000.00 for the insurance
required in Sections 10.3.2(ii) and (iii) above).  Tenant shall deliver certificates of such
policies to Landlord on or before the Insurance Start Date and at least fifteen
(15) days before the expiration dates thereof. 
In the event Tenant shall fail to procure such insurance, or to deliver
such policies or certificate within such time periods, Landlord may, at its
option after at least two (2) business days’ written notice to Tenant, procure
such policies for the account of Tenant, and the cost thereof shall be paid to
Landlord as Additional Rent within thirty (30) days after delivery to
Tenant of bills therefor.  At Tenant’s
option, Tenant may provide the coverages required under this Article 10
through blanket policies of insurance covering Tenant’s other properties so
long as the coverage required under this Lease with respect to the Premises and
Real Property is not reduced or impaired as a result thereof (including as a
result of any claims made or aggregate limits with respect to such other
properties).

 

10.4         Subrogation.  Landlord and Tenant agree to have their
respective insurance companies issuing property damage insurance waive any
rights of subrogation that such companies may have against Landlord or Tenant,
as the case may be.  Anything in this
Lease to the contrary notwithstanding (including the provisions of
Section 10.1 above), Landlord and Tenant hereby waive and release each
other of and from any and all rights of recovery, claims, actions or causes of
actions against each other, their respective agents, officers and employees, for
any loss or damage that may occur to the Premises,

 

37

 

Building or Real
Property, or personal property within the Building, regardless of cause or
origin, including the negligence of Landlord and Tenant and their respective
agents, officers and employees, but only to the extent the releasing party’s
loss or damage is covered under casualty insurance policies in effect at the
time of such loss or damage or would have been covered by the casualty
insurance required to be carried under Sections 10.2 and 10.3 above had
the releasing party complied with its applicable insurance obligations
thereunder.  Each party agrees to give
immediately to its respective insurance company which has issued policies of
insurance covering any risk of direct physical loss, written notice of the
terms of the mutual waivers contained in this Section 10.4, and to have
such insurance policies properly endorsed, if necessary, to prevent the
invalidation of said insurance coverage by reason of said waivers.

 

10.5         Additional Insurance
Obligations.  Tenant shall carry and
maintain, at Tenant’s sole cost and expense, increased amounts of the insurance
required to be carried by Tenant pursuant to this Article 10, and such
other reasonable types of insurance coverage and in such reasonable amounts
covering the Premises and Tenant’s operations therein, as may be reasonably
requested by Landlord; provided, however, that in no event shall
(i) Tenant receive notice of an increased amount or new type of insurance
more than one (1) time in any twelve (12) month period, and (ii) such
increased coverage be in excess of that required by landlords of Comparable
Buildings for tenants leasing comparable-sized space to Tenant in Comparable
Buildings.

 

10.6         Assignment of
Insurance Proceeds Upon Termination of Lease.  Notwithstanding anything to the contrary contained in this Lease,
in the event of any termination of this Lease pursuant to Articles 11 or 13
below:  (i) Tenant shall assign and
deliver to Landlord (or to any party designated by Landlord) all insurance
proceeds payable to Tenant under Tenant’s insurance required under Sections
10.3.2(ii) and (iii) of this Lease for the unamortized value of the Tenant
Improvement Allowance (“Landlord’s TI
Proceeds”), with such amortization to be calculated on a
straight-line basis throughout the initial Lease Term; and (ii) the remainder
of any insurance proceeds received by Tenant under Sections 10.3.2(ii) and
(iii) shall be retained by Tenant.

 

ARTICLE 11

DAMAGE AND DESTRUCTION

 

11.1         Repair of Damage to
Premises by Landlord.

 

11.1.1      To the extent Landlord does not have actual knowledge
of same, Tenant shall promptly notify Landlord after Tenant becomes aware of
any damage to the Premises resulting from fire or any other casualty.  If the Premises, the Building or any common
areas of the Building or Real Property serving or providing access to the
Premises shall be damaged by fire or other casualty, Landlord shall promptly
and diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord’s reasonable control, and subject to all other terms of
this Article 11, restore the Base, Shell, and Core of the Premises and
such common areas.  Such restoration
shall be to substantially the same condition of the Base, Shell, and Core of
the Premises and common areas prior to the casualty, except for modifications
required by zoning and building codes and other laws, or any other
modifications to the common areas deemed reasonably desirable by Landlord
provided access to the Premises, the Building H Parking Facilities and any
common restrooms serving the Premises shall not be materially impaired thereby
and such modifications do not modify the character of the Building as a
first-class office building.

 

11.1.2      Notwithstanding any other provision of this Lease,
upon the occurrence of any damage to the Premises, within ten (10) days after
notice (the “Landlord Repair Notice”)
to Tenant from Landlord, if this Lease is not terminated, Tenant shall assign
to Landlord (or to any party designated by Landlord) for the purpose of
re-constructing such damaged portion(s) of the Premises and shall put into a
third party escrow account reasonably acceptable to Landlord (which escrow
shall be jointly paid for by Landlord and Tenant) for distribution to Landlord
(or to any party designated by Landlord) on a progress payment basis upon
receipt of the appropriate conditional and/or unconditional lien releases, all
insurance proceeds payable to Tenant under Tenant’s insurance required under
Sections 10.3.2 (ii) and (iii) of this Lease which pertain to the repair
and restoration of the Tenant Improvements and Alterations, and Landlord shall
repair any injury or damage to the Tenant Improvements and Alterations installed
in the Premises and shall return such Tenant Improvements and Alterations to
their original condition; provided that (i) the cost of such repair by
Landlord of such Tenant Improvements and Alterations (based on competitive
pricing by all contractors and subcontractors and without any profit mark-up or
supervision fees to Landlord) exceeds the amount of insurance proceeds received
by Landlord from Tenant’s insurance carrier, the incremental cost differential
of such repairs shall be paid by Tenant to Landlord on a progress payment basis
during Landlord’s repair and replacement work (after exhaustion of insurance
proceeds), and (ii) Tenant’s insurance proceeds shall be disbursed for all
costs and expenses incurred by Landlord in connection with the repair of any such
damage to the Tenant Improvements and Alterations

 

38

 

pursuant to a
disbursement procedure mutually approved by Landlord and Tenant.  Subject to Section 10.6 above, as long
as the damaged Tenant Improvements and Alterations in the Premises are repaired
and/or restored, Tenant shall be entitled to retain any portion of the proceeds
of the insurance described in Sections 10.3.2 (ii) and (iii) in excess of
the cost of such repairs and/or restoration.

 

11.1.3      In connection with such repairs and replacements,
Tenant shall, prior to the commencement of construction, submit to Landlord,
for Landlord’s review and approval (which approval shall not be withheld unless
a Design Problem exists), all plans, specifications and working drawings
relating thereto, and Landlord shall select the contractors to perform such
improvement work pursuant to Landlord’s standard competitive bidding
procedures.  Landlord shall not be
liable for any inconvenience or annoyance to Tenant or its visitors, or injury
to Tenant’s business resulting in any way from such damage or the repair
thereof; provided however, that if such fire or other casualty shall have
damaged the Premises or common areas necessary to Tenant’s occupancy to such a
degree that Tenant is prevented from using, and does not use, all or any part
of the Premises as a result thereof, then Landlord shall allow Tenant a
proportionate abatement of Base Rent and Tenant’s Share of increases in
Operating Expenses, Tax Expenses and Utilities Costs during the time and to the
extent Tenant is so prevented from using and does not use the Premises as a
result thereof; provided, however, that if less than all, but a substantial
portion, of the Premises is unfit for occupancy and the remainder of the
Premises is not sufficient to allow Tenant to effectively conduct its business
therein, and if Tenant does not conduct its business from the portion of the
Premises so damaged and such remaining portion, then the Base Rent and Tenant’s
Share of increases in Operating Expenses, Tax Expenses and Utilities Costs for
the entire Premises shall be abated for such period that Tenant continues to be
so prevented from using, and does not use, the entire Premises.  Tenant’s abatement period shall continue
until Tenant has been given reasonably sufficient time and reasonably
sufficient access to the Premises and/or the Building to install its property,
furniture, fixtures and equipment to the extent the same shall have been
removed and/or damaged as a result of such damage or destruction, and to move
in over one (1) weekend.

 

11.1.4      Landlord shall use commercially reasonable efforts to
minimize any such inconvenience, annoyance or interference to Tenant resulting
from Landlord’s repair of any damage pursuant to this Section 11.1.

 

11.2         Landlord’s Option to
Repair.

 

11.2.1      Within forty-five (45) days after Landlord
becomes aware of such damage, Landlord shall notify Tenant in writing (“Landlord’s Damage Notice”) of the estimated
time, in the reasonable opinion of Landlord’s licensed contractor, required to
substantially complete the repairs of such damage (the “Estimated Repair Period”).  Notwithstanding the terms of
Section 11.1 of this Lease, Landlord may elect not to rebuild and/or
restore the Premises and/or the Building and instead terminate this Lease by
notifying Tenant in writing of such termination within forty-five (45)
days after Landlord becomes aware of such damage, but Landlord may so elect
only if the Building shall be damaged by fire or other casualty or cause,
whether or not the Premises are affected and one or more of the following
conditions is present:  (i) repairs
cannot in the reasonable opinion of Landlord’s licensed contractor, as set
forth in Landlord’s Damage Notice, reasonably be completed within nine (9)
months after the date Landlord becomes aware of such damage (when such repairs
are made without the payment of overtime or other premiums); or (ii) the
damage is not fully covered by Landlord’s insurance policies obtained or required
to be obtained by Landlord pursuant to Section 10.2 above, and the cost of
repairing such uninsured or underinsured damage, including deductibles, exceeds
the Threshold Amount (as defined below). 
As used herein, the “Threshold Amount”
shall mean $600,000.00.

 

11.2.2      If (i) Landlord does not elect to terminate this
Lease pursuant to Landlord’s termination right as provided above, (ii) the
damage constitutes a Tenant Damage Event (as defined below), and (iii) the
repair of such damage cannot, in the reasonable opinion of Landlord’s licensed
contractor, as set forth in Landlord’s Damage Notice, be completed within nine
(9) months after Landlord becomes aware of such damage, then Tenant may elect
to terminate this Lease by delivering written notice thereof to Landlord within
thirty (30) days after Tenant’s receipt of Landlord’s Damage Notice.  As used herein, a “Tenant Damage Event” shall mean damage to
all or any part of the Premises or any common areas of the Building providing
access to the Premises by fire or other casualty, which damage (A) is not
the result of the gross negligence or willful misconduct of Tenant or any of
Tenant’s employees, agents, contractors, licensees or invitees,
(B) substantially interferes with Tenant’s use of or access to the Premises
and (C) would entitle Tenant to an abatement of Base Rent and
Tenant’s Share of increases in Operating Expenses, Tax Expenses and Utilities
Costs, pursuant to Section 11.1 above. 
At any time, from time to time, after the date occurring sixty (60) days
after Landlord becomes aware of such damage, Tenant may request that Landlord
provide Tenant with a certificate from the licensed contractor set forth above
setting forth such contractor’s opinion of the date of substantial completion
of the repairs and Landlord shall respond to such request within ten (10)
business days thereafter.

 

39

 

11.2.3      In addition, in the event of a Tenant Damage Event,
and if neither Landlord nor Tenant has elected to terminate this Lease as
provided hereinabove, but Landlord fails to substantially complete the repair
and restoration of such Tenant Damage Event within the period (“Landlord’s Repair Period”) that is the
later of (i) nine (9) months after the date Landlord becomes aware of such
damage or (ii) sixty (60) days after the Estimated Repair Period plus, in
either case, the number of days of delay, if any, attributable to any Force
Majeure events (not to exceed sixty (60) days), plus the number of days of
delay, if any, as are attributable to the acts or omissions of Tenant or
Tenant’s employees, agents, contractors, licensees or invitees, then Tenant
shall have an additional right to terminate this Lease within fifteen (15) days
after the expiration of Landlord’s Repair Period and thereafter during the
first five (5) business days of each calendar month following the expiration of
Landlord’s Repair Period until such time as the repairs described on Landlord’s
Damage Notice are substantially complete, by written notice to Landlord (“Tenant’s Damage Termination Notice”),
effective as of a date set forth in Tenant’s Damage Termination Notice (the “Damage Termination Date”), which Damage
Termination Date shall not be less than five (5) business days nor more than
ninety (90) days following the expiration of Landlord’s Repair Period, or each
such calendar month following expiration of Landlord’s Repair Period, as the
case may be.  Notwithstanding the
foregoing, if Tenant delivers Tenant’s Damage Termination Notice to Landlord,
then Landlord shall have the right to suspend the effectiveness of Tenant’s
Damage Termination Notice for a period of thirty (30) days by delivering to
Tenant, within five (5) business days of Landlord’s receipt of Tenant’s Damage
Termination Notice, a certificate of Landlord’s contractor responsible for the
repair of the damage described on Landlord’s Damage Notice certifying that it
is such contractor’s good faith judgment that such repairs shall be
substantially completed within the next thirty (30) days.  If repairs described on Landlord’s Damage
Notice shall be substantially completed prior to the expiration of such thirty
(30) day period, then Tenant’s Damage Termination Notice shall be of no force
or effect, but if such repairs shall not be substantially completed within such
thirty (30) day period, then this Lease shall terminate upon the expiration of
such thirty (30) day period.

 

11.2.4      Further, in the event that the Premises or the
Building are destroyed or damaged to any substantial extent during the last
twelve (12) months of the Lease Term (except that, in the event that Tenant
shall have exercised its option to renew pursuant to the Extension Option Rider
attached to this Lease, such twelve (12) month period shall be the last twelve
(12) months of the Option Term), then notwithstanding anything contained in
this Article 11, Landlord shall have the option to terminate this Lease if
the repair of such damage is reasonably expected by Landlord to require more
than thirty (30) days to substantially complete, and to the extent such
destruction or damage constitutes a Tenant Damage Event and the repair of same
is reasonably expected by Landlord to require more than sixty (60) days to
substantially complete (or more than thirty (30) days to substantially complete
during the last six (6) months of the Lease Term), Tenant shall have the option
to terminate this Lease, by giving written termination notice to the other
party of the exercise of such option within thirty (30) days after the date
such party becomes aware of such damage or destruction.  If either Landlord or Tenant exercises any
of its options to terminate this Lease as provided above in this
Section 11.2:  (i) this Lease
shall cease and terminate as of the date set forth in such party’s termination
notice, which termination date shall be no less than thirty (30) days and
no more than one hundred twenty (120) days after such termination notice is
delivered to the other party; provided, however, that if the termination notice
is delivered as a result of a casualty damage occurring during the last twelve
(12) months of the Lease Term, such termination date shall be no less than
thirty (30) days and no more than forty-five (45) days after such
termination notice is delivered to such other party; and if Landlord is the
party delivering such termination notice at any time other than during the last
twelve (12) months of the Lease Term, Tenant shall have the right to extend the
termination date to a date which is one hundred twenty (120) days after such
termination notice is delivered to Tenant if Landlord selects a termination
date which is shorter than such one hundred twenty (120) day period;
(ii) Tenant shall pay the Base Rent and Additional Rent, properly
apportioned up to such date of termination subject to abatement as provided in
Section 11.1 above; and (iii) both parties hereto shall thereafter be
freed and discharged of all further obligations hereunder, except as provided
for in provisions of this Lease which by their terms survive the expiration or
earlier termination of the Lease Term.

 

11.3         Waiver of Statutory
Provisions.  The provisions of this
Lease, including this Article 11, 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, the Building or any other portion of the Real
Property, and any statute or regulation of the state in which the Real Property
is located, 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, the Building or any other portion of the Real Property.

 

40

 

ARTICLE 12

NONWAIVER

 

No waiver of any
provision of this Lease shall be implied by any failure of a party to enforce
any remedy on account of the violation of such provision, even if such
violation shall continue or be repeated subsequently, any waiver by a party of
any provision of this Lease may only be in writing, and no express waiver shall
affect any provision other than the one specified in such waiver and that one
only for the time and in the manner specifically stated.  No receipt of monies by Landlord from Tenant
after the termination of this Lease shall in any way alter the length of the
Lease Term or of Tenant’s right of possession hereunder or after the giving of
any notice shall reinstate, continue or extend the Lease Term or affect any
notice given Tenant prior to the receipt of such monies, it being agreed that
after the service of notice or the commencement of a suit or after final
judgment for possession of the Premises, Landlord may receive and collect any
Rent due, and the payment of said Rent shall not waive or affect said notice,
suit or judgment.  Tenant’s payment of
Rent after a default by Landlord shall not constitute a waiver by Tenant of any
such default by Landlord under this Lease.

 

ARTICLE 13

CONDEMNATION

 

13.1         Permanent Taking.  If all or any portion of the Premises, the
Building or the Real Property shall be taken by power of eminent domain or
condemned by any competent authority for any public or quasi-public use or
purpose, or if Landlord shall grant a deed or other instrument in lieu of such
taking by eminent domain or condemnation, Landlord shall have the option to
terminate this Lease upon ninety (90) days’ notice to Tenant, effective as of
the date possession is required to be surrendered to the taking authority;
provided, however, that (i) Landlord shall only have the right to
terminate this Lease as provided herein if Landlord terminates the leases of
all tenants in the Building similarly affected by the taking which leases
contain similar termination rights in favor of Landlord as provided herein, and
(ii) to the extent that the Premises are not adversely affected by such
taking and Landlord continues to operate the Building as an office building,
Landlord shall not terminate this Lease. 
If more than twenty-five percent (25%) of the rentable square feet of
the Premises is taken or if access to and/or use of more than twenty-five (25%)
of the Premises is substantially impaired, Tenant shall have the option to
terminate this Lease upon ninety (90) days’ notice to Landlord, which
termination shall be effective as of the date possession is required to be
surrendered to the taking authority. 
Landlord shall be entitled to receive the entire award or payment in
connection with any such taking, except that (A) Tenant shall have the
right to file any separate claim available to Tenant for any taking of Tenant’s
Property belonging to Tenant and removable by Tenant upon expiration of the
Lease Term pursuant to the terms of this Lease, for the unamortized cost of the
Tenant Improvements and Alterations (to the extent paid for by Tenant from
Tenant’s own funds and not from any improvement allowance provided by
Landlord), interruption of or damage to Tenant’s business, and for moving
expenses, so long as such claim is payable separately to Tenant, and
(B) Landlord and Tenant shall each be entitled to receive fifty
percent (50%) of the “bonus value” of the leasehold estate in connection
therewith, which bonus value shall be equal to the difference between the Rent
payable under this Lease and the sum established by the taking authority as the
award for compensation for the leasehold estate.  All Rent shall be apportioned as of the date of such termination,
or the date of such taking, whichever shall first occur.  If any part of the Premises shall be taken,
and this Lease shall not be so terminated, the Base Rent and Tenant’s Share of
increases in Operating Expenses, Tax Expenses and Utilities Costs shall be
equitably abated in proportion to the ratio that the rentable square feet of
the Premises which is taken bears to the total rentable square footage of the
Premises, and Landlord shall at its sole expense restore the Building in which
the remainder of the Premises are located to any architecturally complete and
functional condition; provided, however, that if less than all, but a
substantial portion, of the Premises is unfit for occupancy and the remainder
of the Premises is not sufficient to allow Tenant to effectively conduct its
business therein, and if Tenant does not conduct its business from the portion
of the Premises so damaged and such remaining portion, then the Base
Rent and Tenant’s Share of increases in Operating Expenses, Tax Expenses and
Utilities Costs for the entire Premises shall be abated for such period that
Tenant continues to be so prevented from using, and does not use the entire
Premises.  Tenant’s abatement period shall
continue until Tenant has been given reasonably sufficient time, and reasonably
sufficient access to the Premises, the Parking Facilities and/or the Building,
to install its property, furniture, fixtures, and equipment to the extent the
same shall have been removed and/or damaged as a result of such eminent domain
taking and to move in over one (1) weekend. 
Tenant hereby waives any and all rights it might otherwise have pursuant
to Section 1265.130 of the California Code of Civil Procedure.

 

13.2         Temporary Taking.  Notwithstanding anything to the contrary
contained in this Article 13, in the event of a temporary taking of all or
any portion of the Premises or access thereto for a period of nine (9)
months or less, then this Lease shall not terminate but the Base Rent and
Tenant’s Share of increases in Operating Expenses, Tax Expenses and Utilities
Costs shall be abated for the period of

 

41

 

such taking in proportion
to the ratio that the amount of rentable square feet of the Premises taken
bears to the total rentable square feet of the Premises; provided, however,
that if only a portion of the Premises is unfit for occupancy and the remainder
of the Premises is not sufficient to allow Tenant to effectively conduct its
business therein, and if Tenant does not conduct its business from such
remaining portion, then the Base Rent and Tenant’s Share of increases in
Operating Expenses, Tax Expenses and Utilities Costs for the entire Premises
shall be abated for the period of such taking. 
Landlord shall be entitled to receive the entire award made in
connection with any such temporary taking.

 

ARTICLE 14

ASSIGNMENT AND SUBLETTING

 

14.1         Transfers.  Except as provided in Sections 14.6 and
14.7 below and Section 8.4 above, Tenant shall not, without the prior
written consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed, assign, mortgage, pledge, hypothecate, encumber, or
permit any lien to attach to, or otherwise transfer, this Lease or any interest
hereunder, permit any assignment or other such foregoing transfer of this Lease
or any interest hereunder by operation of law, sublet the Premises or any part
thereof, or permit the use of the Premises by any persons other than Tenant and
its employees, agents, consultants and contractors (all of the foregoing are
hereinafter sometimes referred to collectively as “Transfers” and any person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a “Transferee”).  If Tenant shall desire Landlord’s consent to any Transfer, Tenant
shall notify Landlord in writing, which notice (the “Transfer Notice”) shall include (i) the proposed
effective date of the Transfer, which shall not be less than fifteen (15)
days after the date of delivery of the Transfer Notice, (ii) a description
of the portion of the Premises to be transferred (the “Subject Space”), (iii) all of the
material terms of the proposed Transfer and the consideration therefor,
including a calculation of the “Transfer
Premium,” as that term is defined in Section 14.3 below, in
connection with such Transfer, the name and address of the proposed Transferee,
and a copy of all existing and/or proposed documentation pertaining to the
proposed Transfer (but not any documentation relating solely to the sale (if
any) of Tenant’s or an Affiliate’s business to such Transferee), including all
existing operative documents to be executed to evidence such Transfer or the
agreements incidental or related to such Transfer, and (iv) current
financial statements of the proposed Transferee certified by an officer,
partner or owner thereof, and any other information reasonably required by
Landlord and identified in a written notice delivered to Tenant within five (5)
days after Landlord’s receipt of such financial statements which will enable
Landlord to determine the financial responsibility, character, and reputation
of the proposed Transferee, nature of such Transferee’s business and proposed
use of the Subject Space.  Except as
provided in Sections 14.6 and 14.7 below, any Transfer made without
Landlord’s prior written consent shall, at Landlord’s option, be null, void and
of no effect, and shall, at Landlord’s option, constitute a default by Tenant
under this Lease subject to applicable notice and cure periods.  Whether or not Landlord shall grant consent,
Tenant shall pay Landlord’s actual, documented and reasonable legal fees (not
to exceed $2,500.00 in any one instance) incurred by Landlord, within
thirty (30) days after written request by Landlord.

 

14.2         Landlord’s Consent.  Landlord shall not unreasonably withhold or
condition its consent to any proposed Transfer of the Subject Space to the
Transferee on the terms specified in the Transfer Notice.  Landlord shall notify Tenant of Landlord’s
consent or reasonable disapproval of any such Transfer within fifteen (15)
days after Landlord’s receipt of the Transfer Notice and all other information
required to be delivered by Tenant to Landlord in connection with such proposed
Transfer as set forth in Section 14.1 above.  In the event that Landlord fails to notify Tenant in writing of
such approval or disapproval within such fifteen (15) day period, and such
failure continues for an additional five (5) days after Tenant notifies
Landlord of such failure, then Landlord shall be deemed to have approved such
Transfer.  The parties hereby agree that
it shall be reasonable under this Lease and under any applicable law for
Landlord to withhold consent to any proposed Transfer where one or more of the
following apply, without limitation as to other reasonable grounds for
withholding consent:

 

14.2.1      The Transferee is of a character or reputation or
engaged in a business which is not consistent with the quality of the Building
or the Real Property as a first-class multi-tenant office building project;

 

14.2.2      The Transferee intends to use the Subject Space for
purposes which are not permitted under this Lease or which would violate an
exclusive use right of another tenant of the Project (in connection with this
Section 14.2.2 upon written request from Tenant, not more than
one (1) time in any six (6) month period, Landlord shall provide
Tenant a list of the then exclusive use rights of the then existing tenant(s)
of the Project, if any);

 

14.2.3      The Transferee is either a governmental agency or
instrumentality thereof (i) which is that of a foreign country, or
(ii) which is of a character or reputation, is engaged in a business, or
is of, or is associated with, a political orientation or faction, which is
materially inconsistent with the

 

42

 

quality of the Project,
or which would otherwise reasonably offend a landlord of a Comparable Building,
or (iii) which is capable of exercising the power of eminent domain or
condemnation, unless, and only to the extent, Landlord has leased space to, or
approved subleases with, comparable (in terms of use, security issues, express
or implied power of eminent domain, reputation, character and size of space
in  the Project) governmental agencies
or instrumentalities thereof;

 

14.2.4      The Transferee is not a party of reasonable financial
worth and/or financial stability in light of the responsibilities to be
undertaken in connection with the Transfer on the date consent is requested; or

 

14.2.5      Either the proposed Transferee, or any person or
entity which directly or indirectly, controls, is controlled by, or is under
common control with, the proposed Transferee, (i) occupies space in the
Building and/or any other portions of the Project owned by Landlord at the time
of the request for consent and Landlord in fact has sufficient space in the
Building and/or such other portions Project owned by Landlord meeting such
proposed transferee’s space requirements (provided, however, that this clause
(i) shall not apply to the existing tenant of space in the Building as of the
date of execution of this Lease), or (ii) is currently negotiating with
Landlord to lease space in the Building and/or any other portions of the Project
owned by Landlord at the time Tenant delivers to Landlord the Transfer Notice
and Landlord in fact has sufficient space in the Building and/or such other
portions Project owned by Landlord meeting such proposed transferee’s space
requirements.  For purposes hereof, the
term “negotiating” shall mean
either the exchange of letters of intent or lease proposals, or the preparation
and/or negotiation of lease documents; however, a 2-month lull in the exchange
of any such documents (including lease drafts) shall constitute cessation of
negotiations.

 

If Landlord consents to
any Transfer pursuant to the terms of this Section 14.2, Tenant may,
within six (6) months after Landlord’s consent, but not later than the
expiration of said six (6)-month period, enter into such Transfer of the
Premises or portion thereof, upon substantially the same terms and conditions
as are set forth in the Transfer Notice furnished by Tenant to Landlord
pursuant to Section 14.1 of this Lease, provided that if there are any changes
in the terms and conditions from those specified in the Transfer Notice such
that Landlord would initially have been entitled to refuse its consent to such
Transfer under this Section 14.2, Tenant shall again submit the Transfer
to Landlord for its approval and other action under this Article 14.

 

14.3         Transfer Premium.  Except as otherwise provided in
Sections 14.6 and 14.7 below, if Landlord consents to a Transfer, as a
condition thereto which the parties hereby agree is reasonable, Tenant shall
pay to Landlord fifty percent (50%) of any “Transfer Premium,” as that term is
defined in this Section 14.3, received by Tenant from such
Transferee.  “Transfer Premium” shall mean all rent, additional rent,
parking charges and other consideration received from such Transferee in excess
of the Rent, Additional Rent, parking charges and other consideration payable
by Tenant under this Lease on a per rentable square foot basis if less than all
of the Premises is transferred, after deducting the actual, reasonable and
documented expenses incurred by Tenant for the following (collectively, the “Subleasing Costs”):  (i) any changes, alterations and
improvements made to the Premises, and/or any tenant improvement allowance,
space planning allowance, moving allowance or other out-of-pocket monetary
concessions paid or provided by Tenant to the Transferee, in connection with
the Transfer; (ii) any brokerage commissions and advertising expenses in
connection with the Transfer; and (iii) reasonable legal fees incurred by
Tenant in negotiating the Transfer and obtaining Landlord’s consent thereto
(including Landlord’s attorneys’ fees); (iv) any costs to buy-out or
takeover the previous lease of a Transferee; and (v) the Rent paid to
Landlord by Tenant for all days that Tenant has vacated the Subject Space
following the later of (A) the date the Subject Space was first vacated by
Tenant, (B) the date Landlord receives a factually correct written notice
of Tenant’s intention to assign or sublet the Subject Space, and (C) the date Landlord
receives a factually correct written notice that the Subject Space has been
listed with an outside brokerage firm for marketing to third party tenants, up
to the effective date of the sublease or assignment covering said Subject
Space, or, if earlier, the date Tenant’s assignee or subtenant takes possession
of the Subject Space or Tenant ceases to list the Subject Space with an outside
brokerage firm for marketing to third party tenants.  The Transfer Premium shall not apply to any assignment or sublease
to an Affiliate or a sublease to a Business Affiliate pursuant to the
provisions of Sections 14.6 and 14.7 below.  “Transfer Premium” shall also include, but not be limited to, key
money and bonus money paid by Transferee to Tenant in connection with such
Transfer but not sales proceeds from the sale of Tenant or an Affiliate, and
any payment in excess of fair market value for services rendered by Tenant to
the Transferee or for assets, fixtures, inventory, equipment, or furniture
transferred by Tenant to Transferee in connection with such Transfer.  Under no circumstances shall Landlord be
paid any Transfer Premium until Tenant has recovered all Subleasing Costs for
such Transferred Space, it being understood that if in any year the gross
revenues, less the deductions set forth and included in Subleasing Costs, are
less than such Subleasing Costs, the amount of the excess Subleasing Costs
shall be carried over to the next year and then deducted from gross revenues
with the procedure repeated until a Transfer Premium is achieved.

 

43

 

14.4         Effect of Transfer.  If Landlord consents to a Transfer,
(i) the terms and conditions of this Lease shall in no way be deemed to
have been waived or modified, (ii) such consent shall not be deemed
consent to any further Transfer by either Tenant or a Transferee,
(iii) Tenant shall deliver to Landlord, promptly after execution, an
original executed copy of all documentation pertaining to the Transfer in form
reasonably acceptable to Landlord, (iv) Tenant shall furnish upon
Landlord’s request a complete statement, certified by an independent certified
public accountant or by an authorized officer of Tenant, setting forth in
detail the computation of any Transfer Premium Tenant has derived and shall
derive from such Transfer, and (v) no Transfer relating to this Lease or
agreement entered into with respect thereto, whether with or without Landlord’s
consent, shall relieve Tenant or any guarantor of this Lease from liability under
this Lease.  Landlord or its authorized
representatives shall have the right at all reasonable times and upon prior
reasonable notice to Tenant to audit the books, records and papers of Tenant
relating to any Transfer, and shall have the right to make copies thereof.  If the Transfer Premium respecting any
Transfer shall be found understated, Tenant shall, within thirty (30) days
after demand, pay the deficiency together with interest thereon at the Interest
Rate, and if found understated by more than five percent (5%),
Landlord’s cost of such audit.

 

14.5         Additional Transfers.  For purposes of this Lease, the term “Transfer” shall also include:  (i) if Tenant is a partnership
(including a limited liability partnership), the withdrawal or change, voluntary,
involuntary or by operation of law, of fifty percent (50%) or more of the
partners, or transfer of fifty percent (50%) or more of partnership interests,
within a twelve (12)-month period, or the dissolution of the partnership
without immediate reconstitution thereof; and (ii) if Tenant is a closely
held corporation or limited liability company (i.e., whose stock or
membership interests are not publicly held and not traded through an exchange
or over the counter), (A) the dissolution, merger, consolidation or other
reorganization of Tenant, (B) the sale or other transfer of more than an
aggregate of fifty percent (50%) of the voting shares or membership interests
of Tenant within a twelve (12)-month period (other than transfer of voting
shares or membership interests to immediate family members by reason of gift or
death) or (C) the sale, mortgage, hypothecation or pledge of more than an
aggregate of fifty percent (50%) of the value of the unencumbered assets of
Tenant within a twelve (12) month period. 
Notwithstanding the foregoing, to the extent that the Transfer is of a
type described in this Section 14.5, the terms and conditions of
Section 14.3 shall not apply with respect thereto.

 

14.6         Affiliated
Companies/Restructuring of Business Organization.  For purposes hereof an “Affiliate”
shall mean (i) United Online, (ii) Juno Online Services, Inc., a Delaware
corporation (“Juno”), (iii) a
parent or subsidiary of Tenant, United Online or Juno, (iv) any person or
entity which controls, is controlled by or is under common control with Tenant,
United Online or Juno, (v) any entity which purchases all or substantially
all of the assets (together with an assignment of this Lease) and/or stock of
Tenant, United Online or Juno, or (vi) any entity into which Tenant,
United Online or Juno is merged or consolidated.  Notwithstanding anything to the contrary contained in this Lease,
neither (A) the Transfer by Tenant to any Affiliate, nor (B) the
assignment or pledge of this Lease by Tenant to any solvent, nationally recognized
bank, national banking association or other financial institution having a long
term rating of A- or higher as rated by Standard & Poor’s (collectively,
the “Qualified Bank”), as
collateral for purposes of securing a loan from such Qualified Bank to Tenant
(hereinafter, a “Collateral Assignment”),
shall be subject to Landlord’s prior consent or the provisions of
Section 14.4 above, or Landlord’s right to receive any Transfer Premium
pursuant to Section 14.3, provided that:

 

14.6.1      any such Affiliate was not formed, and such Transfer
or Collateral Assignment was not entered into, as a subterfuge to
(i) avoid the obligations contained in this Article 14, or
(ii) adversely affect the ability of Tenant to satisfy its obligations
under this Lease or the ability of United Online to satisfy its obligations
under the Guaranty of Lease provided to Landlord pursuant to Section 26.31
below;

 

14.6.2      Tenant gives Landlord prior notice of any such
Transfer to the Affiliate, which notice shall include current financial
statements of Tenant and the Affiliate (and United Online, if applicable,
pursuant to Section 14.6.3(iii)(B) below) which Tenant reasonably believes
satisfies the net worth requirement in Section 14.6.3 below, and certified
as accurate by an officer thereof; provided, however, (i) no such
financial statements shall be required with respect to any such Transfer to
United Online or sublease of a portion of the Premises to Juno, and
(ii) with respect to any Transfer to any Affiliate which is other than United
Online, if as of the effective date of such Transfer, Tenant or any such
Affiliate is a subsidiary of United Online and do not maintain separate
financial statements, then the financial statements required to be delivered by
Tenant under this Section 14.6.2 shall be the consolidated financial
statement of United Online, Tenant and/or such Affiliate (as applicable);

 

14.6.3      Tenant and such Affiliate Transferee have as of the
effective date of any such Transfer (the “Effective
Transfer Date”) a net worth, in the aggregate, computed in
accordance with generally accepted accounting principles (but excluding
goodwill as an asset), which is sufficient to meet the obligations under such
Transfer (if the Transfer is a pledge of this Lease, such net worth test shall
only apply if this Lease is subsequently foreclosed upon or the security
interest in this Lease is perfected by the

 

44

 

pledgee); provided,
however, the provisions of this Section 14.6.3 shall not apply to
(i) any Collateral Assignment, or (ii) any Transfer to United Online
or any sublease of a portion of the Premises to Juno, or (iii) any other
Transfer to an Affiliate if, as of the Effective Transfer Date, United Online
(or its successor) is the Guarantor under the Guaranty of Lease and has a net
worth, computed in accordance with generally accepted accounting principles
(but excluding goodwill as an asset) at least equal to $100,000,000.00
(provided, however, if United Online [or its successor] fails to meet such net
worth test, Tenant may provide to Landlord prior to the Effective Transfer
Date, the Additional Letter of Credit, as defined below, as an alternative to
meeting such net worth test);

 

14.6.4      any such Transfer shall be subject and subordinate to
all of the terms and provisions of this Lease, and any assignee under an
assignment of this Lease (which for purposes hereof excludes any entity in a
transaction involving only the transfer of Tenant’s stock so long as Tenant
remains in effect after such stock transfer, but includes, without limitation,
the pledgee or Qualified Bank under the pledge or Collateral Assignment at the
time this Lease is foreclosed upon or the security interest in this Lease is
perfected by such pledgee or Qualified Bank) shall assume, in a written
document reasonably satisfactory to Landlord and delivered to Landlord within
ten (10) days after the effective date of such assignment (or foreclosure or
perfection, as the case may be), all the obligations of Tenant under this Lease;
and

 

14.6.5      Tenant shall remain fully liable for all obligations
to be performed by Tenant under this Lease.

 

“Control”, as used in this
Section 14.6, shall mean the possession, direct or indirect, of the power
or cause the direction of the management and policies of a person or entity, or
ownership of any sort, whether through the ownership of voting securities, by
contract or otherwise.  “Additional Letter of Credit”, as used in
this Section 14.6, shall mean an irrevocable and unconditional negotiable
standby letter of credit (1) in favor of Landlord, as beneficiary,
(2) maintained in effect for a period from the Effective Transfer Date
through the date which is one hundred twenty (120) days after the Lease
Expiration Date, as may be extended pursuant to the Extension Option Rider (the
“Additional LC Expiration Date”),
and (3) in an amount (the “Additional LC
Amount”) equal to the sum of $3,948,905.40 (the “Fixed LC Amount”), plus the Reducible LC
Amount.  For purposes hereof, the “Reducible LC Amount” shall mean the sum of
the unamortized portion of each of (x) the brokerage commissions paid or
incurred by Landlord in connection with this Lease (including any First Offer
Space leased by Tenant pursuant to Section 1.4 above, if applicable), plus
(y) the Tenant Improvement Allowance paid for or provided by Landlord for
the Premises pursuant to the Tenant Work Letter (and any tenant improvement
allowance paid or provided by Landlord for any First Offer Space leased by
Tenant pursuant to the Section 1.4 above, if applicable), plus
(z) the Abated Rent provided in Section 3.2 above (and any free or
abated rent provided by Landlord for any First Offer Space leased by Tenant
pursuant to the Section 1.4 above, if applicable).  The amounts set forth in clauses (x) through
(z) hereinabove shall be amortized on a straight-line basis over the initial
Lease Term with respect to the Premises (and the initial lease term with
respect to any First Offer Space leased by Tenant pursuant to Section 1.4
above, if applicable), and the unamortized portion thereof for purposes of
calculating the Reducible LC Amount shall be determined based upon the
unexpired portion of the initial Lease Term (or the initial lease term for the
First Offer Space, as the case may be) remaining as of the Effective Transfer
Date (hereinafter the “Remainder Period”).  The form of the Additional Letter of Credit
and the terms and provisions governing the same shall be in accordance with the
applicable provisions of the Letter of Credit Rider attached hereto (the “LC Rider”), with the following
modifications (which modifications shall also apply to Exhibit ”1”
to the LC Rider): (I) for purposes of this Section 14.6, only, all
references in the LC Rider to (a) the “Letter of Credit” shall mean the
“Additional Letter of Credit”, (b) the “Letter of Credit Amount” shall
mean the “Additional LC Amount”, and (c) the “LC Expiration Date” shall
mean the “Additional LC Expiration Date”; (II) the Bank issuing the
Additional Letter of Credit must be reasonably acceptable to Landlord and meet
the criteria set forth in the first sentence of Section 1 of the
LC Rider (such Bank may be Silicon Valley Bank if its meets such criteria
or is otherwise reasonably approved by Landlord); (III) the Fixed LC Amount
shall never be subject to reduction notwithstanding Section 8 of the LC
Rider to the contrary; and (IV) only the Reducible LC Amount shall be
decreased pursuant to Section 8 of the LC Rider, but each applicable
Reduction Date and reduction look-back date for such reduction, and the amount
of such reduction, shall be as set forth in the following schedule, which shall
replace the schedule set forth in Section 8 of the LC Rider:

 

	
  Reduction Look-Back Date

  	
   

  	
  Reduction
  Date

  	
   

  	
  Reduction
  Amount

  
	
  Each annual
  anniversary of the Effective Transfer Date

  	
   

  	
  The 45th
  day after the applicable reduction look-back date

  	
   

  	
  The original
  Reducible LC Amount divided by the number of years within the Remainder
  Period

  

 

14.7         Business Affiliates.  Notwithstanding anything to the contrary
contained in this Article 14, Tenant shall have the right, without being
subject to Landlord’s prior consent, or Landlord’s right to receive a Transfer
Premium pursuant to Section 14.3 above, but upon at least ten (10) days’
prior

 

45

 

written notice to
Landlord, to sublease, license or let or otherwise permit occupancy of, up to
an aggregate of ten percent (10%) of the Premises, to individuals, clients,
agents or independent contractors (each a “Business
Affiliate”) which sublease, license or occupancy agreement, as the
case may be, to a Business Affiliate shall be on and subject to all of the
following conditions:  (i) Tenant shall
either have a business relationship (relating to the primary business of Tenant
conducted in the Premises) with each such Business Affiliate or Tenant shall
have at least a twenty percent (20%) voting or equity interest in such Business
Affiliate; (ii) all such Business Affiliates shall be of a character and
reputation consistent with the quality of the Building and Project as a
first-class multi-tenant office building project; (iii) all such Business
Affiliates shall use the Premises in conformity with the all applicable
provisions of this Lease; (iv) no such Business Affiliate shall be a governmental
agency or instrumentality thereof described in Section 14.2.3 above which
would permit Landlord to refuse consent to Tenant’s proposed sublease, license
or occupancy agreement pursuant to Section 14.2.3 if such sublease,
license or occupancy agreement did not otherwise qualify under this
Section 14.7; (v) such sublease, license or occupancy agreement is
not a subterfuge by Tenant to avoid its obligations under this Article 14;
(vi) there shall be no separate demising walls or entrances to the space
which is the subject of such sublease, license or occupancy agreement; and
(vii) each such sublease, license and occupancy agreement shall be subject
to and subordinate to all of the terms and provisions of this Lease.  No such sublease, license or occupancy
agreement, as the case may be, shall relieve Tenant from any liability under
this Lease.

 

ARTICLE 15

SURRENDER OF PREMISES; OWNERSHIP

AND REMOVAL OF TRADE FIXTURES

 

15.1         Surrender of Premises.  No act or thing done by Landlord or any
agent or employee of Landlord during the Lease Term shall be deemed to
constitute an acceptance by Landlord of a surrender of the Premises unless such
intent is specifically acknowledged in a writing signed by Landlord.  The delivery of keys to the Premises to
Landlord or any agent or employee of Landlord shall not constitute a surrender
of the Premises or effect a termination of this Lease, whether or not the keys
are thereafter retained by Landlord, and notwithstanding such delivery Tenant
shall be entitled to the return of such keys at any reasonable time upon
request until this Lease shall have been terminated.  The voluntary or other surrender of this Lease by Tenant, whether
accepted by Landlord or not, or a mutual termination hereof, shall not work a
merger, and at the option of Landlord shall operate as an assignment to
Landlord of all subleases or subtenancies affecting the Premises.

 

15.2         Removal of Tenant’s
Property by Tenant.  All articles of
personal property and all business and trade fixtures, machinery and equipment
(including computer systems, UPS, communications, security, networking and
telecommunications equipment and viewing screens, a/v and video equipment,
built-in television sets and projection screens), generators, signs, furniture,
free standing (but not built-in) cabinet work, movable partitions and other
articles of personal property unique to Tenant’s operations and owned by Tenant
or any person claiming under Tenant or installed by Tenant at its expense in
the Premises, including the Supplemental Roof HVAC Equipment (collectively, “Tenant’s Property”), whether bolted or
otherwise, shall remain the property of Tenant, and may be removed by Tenant at
any time during the Lease Term, and if so removed by Tenant, Tenant shall, at
its own expense, promptly repair all damage to the Premises and Building
resulting from such removal.  Upon the
expiration of the Lease Term, or upon any earlier termination of this Lease,
Tenant shall, subject to the provisions of this Article 15, quit and
surrender possession of the Premises to Landlord in as good order and condition
as when Tenant took possession and as thereafter improved by Landlord and/or
Tenant, reasonable wear and tear and repairs, casualty damage and condemnation
damage which are specifically made the responsibility of Landlord hereunder
excepted.  Subject to the terms of
Section 8.3 above, upon such expiration or termination, Tenant shall,
without expense to Landlord, remove or cause to be removed from the Premises
all debris and rubbish, and all such items of Tenant’s Property installed or
placed in the Premises, and Tenant shall repair at its own expense all damage
to the Premises and Building resulting from such removal.

 

ARTICLE 16

HOLDING OVER

 

If Tenant holds over
after the expiration of the Lease Term hereof, with or without the express or
implied consent of Landlord, such tenancy shall be from month-to-month only,
and shall not constitute a renewal hereof or an extension for any further term,
and in such case Base Rent shall be payable at a monthly rate equal to:  (i) for the first (1st) two
(2) months of holdover, the greater of (A) one hundred twenty-five percent
(125%) of the Base Rent applicable during the last rental period of the Lease
Term under this

 

46

 

Lease, or (B) the
fair market rental rate for the Premises as of the commencement of such
holdover period; and (ii) after such two (2) months of holdover, the
greater of (A) one hundred fifty percent (150%) of the Base Rent
applicable during the last rental period of the Lease Term under this Lease
prior to such holdover, or (B) one hundred twenty-five percent (125%) of
the fair market rental rate for the Premises as of the commencement of such
holdover period.  Such month-to-month
tenancy shall be subject to every other term, covenant and agreement contained
herein.  Landlord hereby expressly
reserves the right to require Tenant to surrender possession of the Premises to
Landlord as provided in this Lease upon the expiration or other termination of
this Lease.  The provisions of this
Article 16 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, and such
indemnification by Tenant shall specifically include, without limitation, “Rental Loss Damages” which for purposes
hereof shall mean any claims made by any succeeding tenant founded upon such
failure to surrender, any lost profits to Landlord resulting therefrom, and any
liability or loss Landlord may reasonably expect to incur in connection with
the delay of the delivery of the Premises to the successor tenant; provided,
however, that notwithstanding the foregoing, Landlord shall not be entitled to
recover any such Rental Loss Damages from Tenant with respect to the first (1st)
month of such holdover.

 

ARTICLE 17

ESTOPPEL CERTIFICATES

 

Within fifteen (15)
business days following a request in writing by a party, the other party shall
execute and deliver to the requesting party an estoppel certificate, which
shall be substantially in the form of Exhibit E, attached hereto
(or such other commercially reasonable form as may be reasonably required by
any prospective mortgagee or purchaser of the Project, or any portion thereof,
if Landlord is the requesting party, or by any Transferee or proposed
Transferee or lender or buyer of Tenant if Tenant is the requesting party),
indicating therein any exceptions thereto that may exist at that time, and
shall also contain any other information reasonably requested by the requesting
party.  Appropriate modifications shall
be made to Exhibit E when Tenant is the party requesting the
estoppel certificate.  Failure of a
party to execute and deliver such estoppel certificate within such 15
business-day period, where such failure continues for an additional five (5)
days after a subsequent notice of such failure is delivered by the requesting
party to such party, shall constitute an acknowledgment by such party that
statements included in the estoppel certificate delivered to such party by the
requesting party made in connection with a proposed sale or financing by
Landlord, or proposed Transfer or sale by or loan to Tenant, as the case may
be, are true and correct, without exception.

 

ARTICLE 18

SUBORDINATION

 

18.1         Subordination.  Subject to Tenant’s receipt of an
appropriate subordination, non-disturbance and attornment agreement(s) as set
forth below in this Article 18, this Lease is subject and subordinate to
all present and future ground or underlying leases of the portion of the Real
Property upon which the Building is located and to the lien of any mortgages or
trust deeds, now or hereafter in force against the Building and such portion of
the Real Property, if any, and to all renewals, extensions, modifications,
consolidations and replacements thereof, and to all advances made or hereafter
to be made upon the security of such mortgages or trust deeds, unless the
holders of such mortgages or trust deeds, or the lessors under such ground
lease or underlying leases, require in writing that this Lease be superior
thereto.  Notwithstanding any contrary
provision of this Article 18, a condition precedent to the subordination
of this Lease to any future mortgage, deed of trust, ground or underlying lease
is that Landlord shall obtain for the benefit of Tenant a commercially
reasonable subordination, non-disturbance and attornment agreement from the
mortgagee, beneficiary or lessor under such future instrument (“Non-Disturbance Agreement”).  Such commercially reasonable Non-Disturbance
Agreement(s) shall include the obligation of any such successor ground lessor,
mortgage holder or lien holder (“Lien Holder”)
to recognize Tenant’s abatement, offset and other rights specifically set forth
in this Lease and recognize and agree that Lien Holder shall be bound by and
responsible for all obligations of Landlord with respect to the Letter of
Credit, to the extent the Letter of Credit has been assigned to the Lien
Holder.  Tenant covenants and agrees in
the event any proceedings are brought for the foreclosure of any such mortgage,
or if any ground or underlying lease is terminated, to attorn to the purchaser
upon any such foreclosure sale, or to the lessor of such ground or underlying
lease, as the case may be, if required to do so pursuant to any Non-Disturbance
Agreement executed by Tenant pursuant to this Article 18, and to recognize
such purchaser or lessor as the lessor under this Lease.  Tenant shall, within thirty (30) days
of request by Landlord, execute such further instruments or assurances as
Landlord may reasonably deem necessary to evidence or confirm the subordination
or superiority of this Lease to any such mortgages, trust deeds, ground leases
or underlying leases  in accordance with
the terms of this Article 18.

 

47

 

18.2         Existing Mortgage.  Landlord represents and warrants to Tenant
that as of the date of execution of this Lease, the Real Property is encumbered
by a deed of trust in favor of U.S. Bank National Association, a national
banking association (“Existing Lender”),
and there are no other deeds of trust or ground leases encumbering the Real
Property.  Prior to or concurrently with
the execution of this Lease, Landlord and Tenant shall execute and deliver to
the other party, and within one hundred eighty (180)  days after execution of this Lease Landlord shall cause the
Existing Lender to execute and deliver to the parties, a subordination,
non-disturbance and attornment agreement in the form of Exhibit G
attached hereto (the “Existing Lender SNDA”).  If Tenant does not receive a fully-executed
Existing Lender SNDA within such 180-day period, then as Tenant’s sole and
exclusive remedy therefor, Tenant shall receive a monthly abatement of Base
Rent otherwise payable by Tenant under this Lease in the amount of $10,000.00
per month for each month occurring after the expiration of such 180-day period
(pro-rated for any partial month) until the fully-executed Existing Lender SNDA
is received; such abatement shall be applied to the first Base Rent next due
and payable under this Lease.

 

ARTICLE 19

DEFAULTS; REMEDIES

 

19.1         Events of Default.  The occurrence of any of the following shall
constitute a default of this Lease by Tenant:

 

19.1.1      Any failure by Tenant to pay any Rent or any other
charge required to be paid under this Lease, or any part thereof, within five
(5) business days after written notice of delinquency; or

 

19.1.2      Any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for thirty (30) days after written
notice thereof from Landlord to Tenant; provided, however, that if the nature
of such default is such that the same cannot reasonably be cured within a
thirty (30) day period, Tenant shall not be deemed to be in default if it
diligently commences such cure within such period and thereafter diligently
proceeds to rectify and cure said default as soon as possible; any such notice
delivered by Landlord shall, at Landlord’s option, be in lieu of, and not in
addition to, any notice required under California Code of Civil Procedure
Section 1161 or any similar successor law.

 

19.2         Remedies Upon Default.  Upon the occurrence of any default by Tenant
pursuant to Section 19.1 above which remains uncured after expiration of
the applicable notice and cure period set forth in Section 19.1 above,
Landlord shall have, in addition to any other remedies available to Landlord at
law or in equity, the option to pursue any one or more of the following
remedies, each and all of which shall be cumulative and nonexclusive, without
any additional notice or demand whatsoever (except as required by applicable
Laws).

 

19.2.1      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:

 

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

 

(ii)           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

 

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

 

(iv)          Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant’s failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom; and

 

(v)           At Landlord’s election, such other amounts in addition
to or in lieu of the foregoing (to the extent not duplicative) as may be
permitted from time to time by applicable law.

 

48

 

The term “rent” as used
in this Section 19.2 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 Paragraphs 19.2.1(i) and (ii), above, the “worth at the time of
award” shall be computed by allowing interest at the Interest Rate (as defined
in Section 4.5 of this Lease).  As
used in Paragraph 19.2.1(iii) 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%).

 

19.2.2      Unless the Lease has been terminated, 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,
if Landlord does not elect to terminate this Lease on account of any default by
Tenant, 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.

 

19.2.3      Landlord may, but shall not be obligated to, make any
such payment or perform or otherwise cure any such obligation, provision,
covenant or condition on Tenant’s part to be observed or performed (and may
enter the Premises for such purposes). 
Any such actions undertaken by Landlord pursuant to the foregoing
provisions of this Section 19.2.3 shall not be deemed a waiver of
Landlord’s rights and remedies as a result of Tenant’s failure to perform and
shall not release Tenant from any of its obligations under this Lease.

 

19.3         Payment by Tenant.  Tenant shall pay to Landlord, within
thirty (30) days after delivery by Landlord to Tenant of statements
therefor, sums equal to expenditures reasonably made and obligations incurred
by Landlord in connection with Landlord’s performance or cure of any of
Tenant’s obligations pursuant to the provisions of Section 19.2.3
above.  Tenant’s obligations under this
Section 19.3 shall survive the expiration or sooner termination of the Lease
Term.

 

19.4         Sublessees of Tenant.  If Landlord elects to terminate this Lease
on account of any default by Tenant as set forth in this Article 19,
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.

 

19.5         Waiver of Default.  No waiver by Landlord or Tenant of any
violation or breach of any of the terms, provisions and covenants herein
contained shall be deemed or construed to constitute a waiver of any other or
later violation or breach of the same or any other of the terms, provisions,
and covenants herein contained. 
Forbearance by Landlord or Tenant in enforcement of one or more of the
remedies herein provided upon an event of default shall not be deemed or
construed to constitute a waiver of such default.  The acceptance of any Rent hereunder by Landlord following the
occurrence of any default, whether or not known to Landlord, shall not be
deemed a waiver of any such default, except only a default in the payment of
the Rent so accepted.  Nothing herein
shall be deemed to constitute a waiver of Tenant’s equitable right to redeem,
by order or judgment of any court, Tenant’s right of occupancy of the Premises
after any termination of this Lease.

 

19.6         Efforts to Relet.  For the purposes of this Article 19,
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. 
If Landlord elects to terminate this Lease pursuant to
Section 19.2.1 above following Tenant’s default, Landlord shall use
commercially reasonable efforts to mitigate its damages to the extent required
by applicable Laws.  The foregoing
enumeration is not exhaustive, but merely illustrative of acts which may be
performed by Landlord without terminating Tenant’s right to possession.

 

19.7         Landlord’s Default.  Notwithstanding anything to the contrary set
forth in this Lease, Landlord shall be in default in the performance of any
obligation required to be performed by Landlord pursuant to this Lease if (i)
in the event a failure by Landlord is with respect to the payment of money,
Landlord fails to pay such unpaid amounts within ten (10) business days of
notice from Tenant that the same was not paid when due, or (ii) in the
event a failure by Landlord is other than (i) above, Landlord fails to perform
such obligation within thirty (30) days after the receipt of notice from Tenant
specifying in detail Landlord’s failure to perform; provided, however, if the
nature of Landlord’s obligation is such that more than thirty (30) days are
reasonably required for its performance, then Landlord shall not be in default
under this Lease if Landlord commences such performance within such thirty (30)
day period and thereafter diligently pursues the same to completion.  Upon any such default by Landlord under this
Lease, Tenant may, except as otherwise specifically provided in this Lease to
the contrary, exercise any of

 

49

 

its rights provided at
law or in equity (provided, however, in no event shall Landlord be liable to
Tenant for lost profits, loss of business or other consequential damages).

 

ARTICLE 20

COVENANT OF QUIET ENJOYMENT

 

Landlord covenants that
Tenant, so long as Tenant is not in default under this Lease and any applicable
notice of such default has been delivered and any applicable cure period has
expired, shall, during the Lease Term, peaceably and quietly have, hold and
enjoy the Premises subject to the terms, covenants, conditions, provisions and
agreements hereof without interference by any persons lawfully claiming by or
through Landlord.  The foregoing
covenant is in lieu of any other covenant express or implied.

 

ARTICLE 21

SIGNS

 

21.1         Full Floor Tenants.  If any portion of the Premises above the
ground floor of the Building comprises an entire floor of the Building, Tenant,
at its sole cost and expense (which cost may be deducted from the Tenant
Improvement Allowance), may install identification signage (including Tenant’s
name and logo) anywhere on such full floor(s) of the Premises, including the
elevator lobby of such full floor(s), provided that such signs are not visible
from the exterior of the Building.

 

21.2         Multi-Tenant Floor
Tenants.  If the Premises are
located on the ground floor of the Building, or if Tenant occupies less than an
entire floor which is part of the Premises, Tenant’s (or Tenant’s assignee’s or
subtenants’) identifying signage on such floor shall:  (i) be located at the entrance to the Premises (which may be
located on the Premises’ entry doors); (ii) be provided by Landlord, at
Tenant’s sole cost and expense (which cost may be deducted from the Tenant
Improvement Allowance); (iii) comply with Landlord’s building standard
signage program; and (iv) be subject to Landlord’s prior approval, which
approval shall not be unreasonably withheld, conditioned or delayed.  In addition, if any portion of the Premises
is located on a multi-tenant floor above the ground floor, Landlord shall provide,
at Landlord’s expense, Building Standard directorial signage for such space in
the elevator lobby of such floor.

 

21.3         Building Directory.  Tenant shall be entitled, at Landlord’s
cost, to Tenant’s Share of the ground floor lobby directory located in the
ground floor lobby of the Building to list thereon Tenant’s name, Tenant’s
employees’ names, the names of any Affiliate to which Tenant’s interest in this
Lease or the Premises has been assigned or sublet pursuant to Section 14.6
above (and such Affiliate’s employees), and/or the names of any approved
Transferees and their employees.

 

21.4         Prohibited Signage and
Other Items.  Except as expressly
provided in this Article 21, Tenant may not install any signs, notices,
logos, pictures, names or advertisements on the exterior or roof of the
Building or the common areas of the Building or the Real Property or anywhere
which can be seen from outside the Premises. 
Any signs, window coverings, blinds or other items visible from the
exterior of the Premises or Building are subject to the prior approval of
Landlord, in its sole discretion.  Any
such signs, notices, logos, pictures, names, advertisements, window coverings,
blinds or other items visible from the exterior of the Premises or Buildings
which are installed and that have not been individually approved by Landlord
pursuant to this Article 21 or otherwise may be removed without notice by
Landlord at the sole expense of Tenant.

 

21.5         Tenant’s Exterior
Signage Rights.

 

21.5.1      Building Top Signs.  Subject to
the approval of all applicable governmental authorities, and compliance with
all applicable Laws, the Underlying Documents (including the signage guidelines
thereof) and all other recorded covenants, conditions and restrictions
affecting the Real Property (collectively, the “Signage Restrictions”), and the terms of this
Section 21.5, Tenant shall have the right to install, at Tenant’s cost,
one (1) identification sign on the top of the exterior of the Building at
each of two (2) of the three (3) available Building top locations
depicted on Exhibit I-1 attached hereto (as selected by Tenant),
for a total of two (2) Building top signs (collectively, the “Building Top Signs”).  Tenant may display only
one (1) name and accompanying logo on a Building Top Sign (which can
be a different name and accompanying logo than that placed on the other
Building Top Sign); such single name to be placed on a Building Top Sign shall
be any of “NetZero,” “United Online” or “Juno”, only (subject, however, to the
provisions of Section 21.5.5 below). 
Landlord agrees that (i) while Tenant retains its rights herein to
two (2) Building Top Signs, Landlord shall not permit more than
three (3) building top signs to be displayed on the Building at the same
time, and (ii) Landlord shall not permit any

 

50

 

other signs to be
displayed in the location selected by Tenant for the applicable Building Top
Sign while Tenant retains its right herein to such Building Top Sign.

 

21.5.2      Monument Signs.  Subject to
the Signage Restrictions and the terms of this Section 21.5, Tenant shall
have the non-exclusive right to install, at Tenant’s cost, one (1)
identification sign on each of the three (3) tenant identification
panels/slots on the multi-tenant shared signage monument located in front of
the Building (the “Building Monument”)
for a total of three (3) Tenant identification signs (collectively as
“Tenant’s Monument Signs”).  Each of the Tenant’s Monument Signs shall
(i) be located below the top tenant identification panel/slot on the
Building Monument, and (ii) display only one (1) name and
accompanying logo on each such tenant identification panel/slot (which can be a
different name and accompanying logo than that placed on the other tenant
identification panel/slots); such single name to be placed on a tenant
identification panel/slot shall be any of “NetZero,” “United Online” or “Juno”,
only, (subject, however, to the provisions of Section 21.5.5 below).  Notwithstanding the foregoing, but subject
to the Signage Restrictions and any existing restrictions contained in any
existing leases of the Building, Tenant may elect to have Tenant’s Monument
Sign be one (1) large sign displaying up to three (3) of any
such names and accompanying logos thereon within the same area contained within
the three (3) tenant identification panels/slots described hereinabove.

 

21.5.3      Specifications.  The
graphics, materials, color, design, lettering, lighting, size, specifications,
manner of affixing and exact location of the Building Top Signs and Tenant’s
Monument Signs (Tenant’s Monument Signs and the Building Top Signs are
sometimes collectively referred to herein as the “Exterior Signs”) shall be consistent with the signage program
for the Building and Project, as reasonably determined by Landlord, and subject
to Landlord’s reasonable approval which shall not be unreasonably withheld,
conditioned or delayed.  Landlord hereby
approves the proposed colors and name and logo configurations for the Exterior
Signs attached hereto as Exhibit I-2 (but all other specifications,
including size and spacing, for the Exterior Signs shall be subject to
Landlord’s approval as provided above). 
Landlord shall reasonably cooperate with Tenant in obtaining the necessary
governmental approvals and permits for the Exterior Signs.

 

21.5.4      Costs.  Tenant shall
pay for all costs and expenses related to the Exterior Signs and the Building
Monument, including, without limitation, costs of the design, acquisition,
construction, installation, maintenance, insurance, utilities, repair and
replacement thereof; provided, however: 
(i) Tenant shall not be obligated to pay for any of the costs of
the design, development, permitting, acquisition, construction, replacement
and/or installation of the Building Monument (other than such costs pertaining
to Tenant’s Monument Signs), and Tenant shall only pay a pro-rata portion of
all other costs with respect to the Building Monument (as reasonably determined
by Landlord or by any common area association formed for LNR Warner Center
which maintains the Building Monument) during the period that more than one
tenant has an identification sign thereon (although Tenant shall pay the full
amount of such costs as they pertain to Tenant’s Monument Signs thereon); and
(ii) the initial installation and acquisition costs for the Exterior Signs
may be paid out of the Tenant Improvement Allowance.  Tenant shall install and maintain the Exterior Signs in
compliance with all Laws and subject to the applicable provisions of Articles 7
and 8 above.

 

21.5.5      Transferability; Use by Affiliates. 
The rights to the Exterior Signs are personal to the Original Tenant and
may not be transferred by the Original Tenant or used by anyone else, except
that as set forth above in this Section 21.5, Tenant shall be permitted to
place the names and accompanying logos of United Online and/or Juno on the
Exterior Signs.  Notwithstanding the
foregoing to the contrary, (i) subject to the restrictions in
Sections 21.5.1 and 21.5.2 above limiting the number of names and
accompanying logos that may be placed on the Exterior Signs at any one time,
and (ii) provided that any name and/or logo change on the Exterior Signs
to reflect any name change of Tenant, United Online and/or Juno or the identity
of any Affiliate assignee or sublessee described below shall not be permitted
if they constitute Objectionable Names/Logos (as defined below), Tenant shall
have the right, at Tenant’s sole cost and expense, to:  (A) in the event Tenant, United Online
and/or Juno changes its company name, to change the names and accompanying
logos on the Exterior Signs to reflect such applicable company name change (but
without increasing the size of such signs as a result thereof);
(B) transfer Tenant’s rights to the Exterior Signs to an Affiliate of
Tenant in connection with Tenant’s assignment of its entire interest in this
Lease to such Affiliate pursuant to Section 14.6 above and change the name
on Tenant’s Exterior Sign(s) to reflect the name of such Affiliate assignee;
and (C) place the name and/or accompanying logo of any of Tenant’s
Affiliates in place of any of the names and accompanying logos of “NetZero, “
“United Online” and/or “Juno” on any of Tenant’s Exterior Signs (but without
increasing the size of such signs as a result thereof), but only during such
periods of time that such Affiliate occupies at least (1)thirty-three percent
(33%) of the rentable square feet of the original Premises under a sublease or
assignment entered into pursuant to Section 14.6 above, in order to use
one (1) of the Building Top Signs and one (1) of the Tenant’s
Monument Signs, and (2) sixty-six percent (66%) of the rentable square
feet of the original Premises under a sublease or assignment entered into
pursuant to Section 14.6 above in order to use two (2) or more of the
Exterior Signs.  As used herein, the
term “Objectionable Names/Logos”
shall mean any name or logo which: 
(1) relates to an entity which is

 

51

 

of a character or
reputation, or is associated with a political orientation or faction, which is
inconsistent with the quality of the Project as a first-class multi-tenant
office building project, or which would otherwise reasonably offend a landlord
of a Comparable Building; or (2) would violate any restrictions on signs
currently set forth in the Underlying Documents or in any existing lease at the
Project (which restrictions do not prohibit the names of internet service
providers, generally).

 

21.5.6      Loss of Signage Rights.  Notwithstanding
anything to the contrary set forth in this Section 21.5, if at any time
following the Lease Commencement Date, the Original Tenant, United Online, Juno
and/or any Affiliate assignee or sublessee(s) under an assignment or
sublease(s) entered into pursuant to Section 14.6 above fail collectively
to be in actual and physical possession of: 
(i) at least sixty-six percent (66%) of the rentable square feet of
the original Premises, Tenant shall thereafter have signage rights pursuant to
this Section 21.5 to only one (1) Building Top Sign and only
two (2) Tenant’s Monument Signs; or (ii) at least thirty-three
percent (33%) of the rentable square feet of the original Premises, Tenant
shall thereafter no longer have any rights to any of the Exterior Signs.

 

21.5.7      Insurance/Maintenance/Removal. 
Tenant shall be responsible for maintaining insurance on the Exterior
Signs as part of the insurance required to be carried by Tenant pursuant to
Section 10.3.2 above.  Should the
Exterior Signs require maintenance, repairs and/or replacement as determined in
Landlord’s reasonable judgment, Landlord shall have the right to provide
written notice thereof to Tenant and Tenant shall cause such repairs,
replacement and/or maintenance to be performed within ten (10) business days
after receipt of such notice from Landlord, at Tenant’s sole cost and expense;
provided, however, if such repairs, replacement and/or maintenance are
reasonably expected to require longer than ten (10) business days to perform,
Tenant shall commence such repairs, replacement and/or maintenance within such
ten (10) business day period and shall diligently prosecute such repairs,
replacement and maintenance to completion. 
Should Tenant fail to perform such maintenance, repairs and/or
replacement within the periods described in the immediately preceding sentence,
Landlord shall have the right to cause such work to be performed and to charge
Tenant as Additional Rent for the actual and reasonable costs of such
work.  Upon the expiration or earlier
termination of this Lease (or prior to such expiration or earlier termination,
upon Tenant’s loss of any of its rights to the Exterior Signs pursuant to
Section 21.5.6 above), Tenant shall, at Tenant’s sole cost and expense,
cause to be removed all such Exterior Signs (or those Exterior Signs to which
Tenant no longer has any rights, as the case may be), and Tenant shall repair
all damage occasioned thereby and restore the affected areas to their original
condition prior to the installation of such signage so required to be removed,
ordinary wear and tear and damage by casualty excepted.  If Tenant fails to timely remove such
signage and repair and restore the affected areas as provided in the
immediately preceding sentence, on five (5) business days’ notice to Tenant,
then Landlord may perform such work, and all reasonable out-of-pocket costs and
expenses incurred by Landlord in so performing such work shall be reimbursed by
Tenant to Landlord within thirty (30) days after Tenant’s receipt of
invoice therefor including interest at the Interest Rate.  The immediately preceding sentence shall
survive the expiration or earlier termination of this Lease.

 

ARTICLE 22

COMPLIANCE WITH LAWS

 

Tenant shall not do
anything or suffer anything to be done in or about the Premises or Buildings
which will in any way conflict with any federal, state or local laws, statutes,
ordinances or other governmental rules, regulations or requirements now in
force or which may hereafter be enacted or promulgated, including, without
limitation the Americans with Disabilities Act of 1990 and the Entitlements
defined in Section 1.1.4 above (collectively, the “Laws”). 
At its sole cost and expense, Tenant shall promptly comply with all such
Laws, including, without limitation, the making of any alterations and
improvements to the Premises. 
Notwithstanding the foregoing to the contrary, Landlord shall be
responsible for making all alterations and improvements required by applicable
Laws with respect to the items which are Landlord’s responsibility to repair
and maintain pursuant to Section 7.2 of this Lease; provided, however,
that Tenant shall reimburse Landlord, within thirty (30) days after invoice,
for the costs of any such improvements and alterations and other compliance
costs to the extent necessitated by or resulting from (i) any
Alterations or Tenant Improvements installed by or on behalf of Tenant,
(ii) the negligence or willful misconduct of Tenant or Tenant’s agents,
contractors, employees or licensees that is not covered by insurance obtained,
or required to be obtained by, Landlord as part of Operating Expenses and as to
which the waiver of subrogation applies, and/or (iii) Tenant’s specific
manner of use of the Premises (as distinguished from general office use).

 

ARTICLE 23

ENTRY BY LANDLORD

 

23.1         Entry by Landlord.  Subject to the terms of Section 23.2
below, Landlord reserves the right at all reasonable times and upon at least 48
hours’ advance written notice to Tenant (except no such

 

52

 

notice shall be required
in emergencies) to enter the Premises to: 
(i) inspect them; (ii) show the Premises to prospective
purchasers, or mortgagees, or to the ground or underlying lessors and, during
the last year of the Lease Term, to prospective tenants; (iii) post
reasonable and customary notices of nonresponsibility; and/or (iv) alter,
improve or repair the Premises or the Building if necessary to comply with
current building codes or other applicable Laws, or for structural alterations,
repairs or improvements to the Building which Landlord is required to perform
under this Lease.  Notwithstanding
anything to the contrary contained in this Article 23, but subject to
Section 23.2 below, Landlord may enter the Premises at any time to:  (A) perform regularly scheduled
services required of Landlord; and (B) subject to all applicable terms and
provisions of this Lease, perform any covenants of Tenant which Tenant fails to
perform.  Any such entries shall be
without the abatement of Rent (except as expressly provided in Section 6.5
above) and shall include the right to take such reasonable steps as required to
accomplish the stated purposes.  Subject
to Landlord’s indemnity of Tenant in Section 10.1.2 above, Tenant hereby
waives any claims for damages or for any injuries or inconvenience to or
interference with Tenant’s business, lost profits, any loss of occupancy or
quiet enjoyment of the Premises, and any other loss occasioned thereby.  For each of the above purposes, Landlord
shall at all times have a key with which to unlock all the doors in the
Premises, excluding Tenant’s vaults, safes and special security areas
designated in advance by Tenant.  In an
emergency, Landlord shall have the right to use any means that Landlord may
deem proper to open the doors in and to the Premises.  Any entry into the Premises in the manner hereinbefore described
shall not be deemed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an actual or constructive eviction of Tenant from any portion of
the Premises.

 

23.2         Secured Areas.  Notwithstanding anything to the contrary set
forth above, Tenant may designate certain areas of the Premises as “Secured Areas” should Tenant require such
areas for the purpose of securing certain valuable property or confidential
information.  Landlord may not enter
such Secured Areas except in the case of emergency or to comply with Landlord’s
obligations under this Lease, or in the event of a Landlord inspection, in
which case Landlord shall provide Tenant with two (2) business days’ prior
written notice of the specific date and time of such Landlord inspection.

 

23.3         Landlord’s Covenants.  Notwithstanding anything to the contrary set
forth above in this Article 23, Landlord agrees to (i) use commercially
reasonable efforts to minimize interference with Tenant’s Permitted Use of and
access to the Premises as a result of Landlord’s exercise of its entry rights
under this Article 23, and (ii) absent an emergency, or Landlord’s entry
to perform its obligations under this Lease, (A) conduct and
schedule Landlord’s entries after Business Hours, and (B) at Tenant’s
option, Landlord shall be accompanied by a representative of Tenant if such
representative is reasonably made available to Landlord.

 

ARTICLE 24

TENANT PARKING

 

24.1         Tenant’s Parking
Passes.  Throughout the Lease Term,
as may be extended, and during the Early Occupancy Period, Tenant shall have
the right to use the number and type (reserved and unreserved) of parking
passes set forth in Section 10.1 of the Summary (collectively, the “Parking Allotment”).  The Reserved Parking Passes within the
Parking Allotment shall be located in those Parking Facilities (and in those
exact locations) designated in Section 10.1 of the Summary, and the
Unreserved Parking Structure Passes within the Parking Allotment shall be
located in the unreserved parking areas of the Phase III Parking Structure as
set forth in Section 10.1 of the Summary. 
The remainder of Tenant’s unreserved parking passes within the Parking
Allotment shall be on a first-come, first-serve basis located in the
Phase III Parking Structure and/or in the unreserved parking areas of the
surface parking areas within the Project as may be designated by Landlord from
time to time (in Landlord’s sole discretion). All of Tenant’s parking passes
shall be available for parking by Tenant’s employees, and Tenant’s subtenants
and assignees (including Affiliates and Business Affiliates) pursuant to
subleases and assignments entered into in accordance with Article 14 above.  Notwithstanding anything to the contrary
contained in this Lease, Landlord hereby agrees that, unless otherwise required
or prohibited by the Underlying Documents, if Landlord ever restricts areas
within those unreserved parking areas located in the Phase III surface
parking areas depicted on Exhibit A-6 attached hereto (the “Restricted Phase III Surface Parking Area”)
for specific tenants of the Project or of a building or buildings to park in,
Landlord shall restrict such areas to the tenants of the Building (and, at
Landlord’s option, to the tenants of Building G and/or visitors of the
Project); the foregoing shall not, however, limit Landlord’s ability to provide
single reserved parking spaces within such surface parking areas to any tenants
of the Project or their visitors nor affect any of Landlord’s rights set forth
in Section 24.4 below.

 

24.2         Parking Charges.  During the initial Lease Term and Early
Occupancy Period, Tenant shall not be charged any parking charges for the use
of any of Tenant’s parking passes within the Parking Allotment.  During the Option Term (if exercised
pursuant to the Extension Option Rider), Tenant shall be charged for the use of
Tenant’s parking passes within the Parking Allotment at the prevailing parking
rates charged by Landlord and/or Landlord’s parking operator from time-to-time
for reserved and

 

53

 

unreserved parking
passes, as the case may be, in the applicable Parking Facilities where such
parking passes are so located, plus applicable parking taxes (which rates shall
not exceed the parking rates charged by owners of the Comparable Buildings for
reserved and unreserved parking in comparable structure, covered and/or surface
parking facilities, as applicable). 

 

24.3         Additional Parking
Passes.  In the event that at any
time during the Lease Term (as may be extended) and/or the Early Occupancy
Period Tenant needs additional parking passes for use by Tenant’s employees in
excess of the parking passes within the Parking Allotment, Tenant shall have
the right to rent from Landlord: 
(i)  up to an aggregate of twenty (20) additional unreserved,
undesignated parking passes, upon ninety (90) days’ prior written notice
to Landlord, in which event Tenant shall be obligated to rent such additional
unreserved parking passes so designated by Tenant in such notice (herein the “Additional Permanent Parking Passes”) from
and after the end of such 90-day notice period and continuing thereafter
throughout the Lease Term, as may be extended; and/or (ii) additional
unreserved undesignated parking passes (in addition to the parking passes
within the Parking Allotment and any additional Permanent Parking Passes rented
by Tenant pursuant to clause (i) hereinabove) on a month–to–month basis (herein
the “Additional Monthly Parking Passes”),
upon written request therefor delivered by Tenant to Landlord, subject,
however, to availability as determined by Landlord, and subject to termination
of any such month-to-month rental of any or all of such Additional Monthly
Parking Passes by either party upon at least thirty (30) days’ advance
notice delivered to the other party.  At
Tenant’s option, Tenant may lease Additional Monthly Parking Passes prior to
exercising its right to lease any Additional Permanent Parking Passes.  Tenant shall be charged for the use of all
of the Additional Permanent Parking Passes and Additional Monthly Parking
Passes rented by Tenant pursuant to this Section 24.3 at the prevailing
parking rates charged by Landlord and/or Landlord’s parking operator from
time-to-time for unreserved parking passes in the applicable Parking Facilities
where such additional unreserved parking passes are so located, plus applicable
parking taxes; provided, however, (A) such parking rates shall be fixed
during the first (1st) year of the initial Lease Term (whether
or not Tenant rents any such Additional Permanent Parking Passes or Additional
Monthly Parking Passes during such first (1st) year) at $65.00 per
additional unreserved parking pass per month, plus applicable parking taxes,
and (B) such monthly parking rate (exclusive of parking taxes) shall not
increase after such (1st) year by more than three percent (3%)
per year, calculated on a cumulative and compounded basis (whether or not
Tenant is then renting the Additional Permanent Parking Passes or Additional
Monthly Parking Passes). 

 

24.4         Limitations on
Tenant’s Parking Rights.  Tenant
shall abide, and use commercially reasonable efforts to cause its employees and
visitors who utilize the Parking Facilities (including the Building H
Parking Facilities and the Phase III Parking Structure) to abide, by the
Parking Rules and Regulations attached hereto as Exhibit F, as may
be reasonably and non-discriminatorily modified by Landlord from time to time,
the Underlying Documents and all other recorded covenants, conditions and
restrictions affecting the Building and/or the Real Property.  Subject to Landlord’s obligations set forth
in the last sentence of Sections 1.1.4 and 24.1 above, and provided the
following do not do not cause an Adverse Condition to arise, Landlord may
from time to time, without incurring any liability to Tenant and without any
abatement of Rent under this Lease (other than as expressly provided in
Section 6.5 above): 
(i) change the location, size, configuration, design, layout and
all other aspects of any of the Parking Facilities; and (ii) temporarily
(not to exceed 1-month) close-off or restrict access to any of the Parking
Facilities for purposes of permitting or facilitating any such construction,
alteration or improvements.  The parking
rights provided to Tenant pursuant to this Article 24 are provided solely
for use by Tenant’s own personnel and such rights may not be transferred,
assigned, subleased or otherwise alienated by Tenant without Landlord’s prior
approval, except in connection with an assignment of this Lease or sublease of
the Premises made in accordance with Article 14 above.  All visitor parking by Tenant’s visitors
shall be subject to availability, as reasonably determined by Landlord, parking
in such visitor parking areas as may be designated by Landlord from time to
time (which visitor parking rate is currently $1.00 per 20 minutes, with a
$10.00 maximum), and payment by such visitors of the prevailing visitor parking
rate charged by Landlord from time to time; provided, however, Tenant shall
have the right to purchase visitor parking validations from Landlord for use by
Tenant’s visitors (and not for resale) at a thirty percent (30%)
discount.

 

ARTICLE 25

SECURITY DEPOSIT

 

Concurrent with Tenant’s
execution of this Lease, Tenant shall deposit with Landlord a security deposit
(the “Security Deposit”) in the
amount set forth in Section 11 of the Summary.  The Security Deposit shall be held by Landlord as security for
the faithful performance by Tenant of all the terms, covenants, and conditions
of this Lease to be kept and performed by Tenant during the Lease Term.  If Tenant defaults after expiration of all
applicable notice and cure periods with respect to any provisions of this
Lease, including, but not limited to, the provisions relating to the payment of
Rent, Landlord may, but shall not be required to, use, apply or retain all or
any part of the Security Deposit for the payment of any Rent or any other sum
in default, or for the payment of any amount that Landlord may spend or become

 

54

 

obligated to spend by
reason of Tenant’s default, or to compensate Landlord for any other loss or
damage that Landlord may suffer by reason of Tenant’s default.  If any portion of the Security Deposit is so
used or applied, Tenant shall, within ten (10) business days after written
demand therefor, deposit cash with Landlord in an amount sufficient to restore
the Security Deposit to its original amount, and Tenant’s failure to do so
shall be a default under this Lease. 
The Security Deposit, or any balance thereof, shall be returned to
Tenant, or, at Landlord’s option, to the last assignee of Tenant’s interest
hereunder, within thirty (30) days following the expiration of the Lease
Term.  Tenant shall not be entitled to
any interest on the Security Deposit. 
Tenant hereby waives the provisions of Section 1950.7 of the
California Civil Code, and all other provisions of law, now or hereafter in
force, which provide that Landlord may claim from a security deposit only those
sums reasonably necessary to remedy defaults in the payment of rent, to repair
damage caused by Tenant or to clean the Premises, it being agreed that Landlord
may, in addition, claim those sums reasonably necessary to compensate Landlord
for any other loss or damage, foreseeable or unforeseeable, caused by the act
or omission of Tenant or any officer, employee, agent or invitee of Tenant.

 

ARTICLE 26

MISCELLANEOUS PROVISIONS

 

26.1         Terms.  The necessary grammatical changes required
to make the provisions hereof apply either to corporations or partnerships or
individuals, men or women, as the case may require, shall in all cases be
assumed as though in each case fully expressed.

 

26.2         Binding Effect.  Each of the provisions of this Lease shall
extend to and shall, as the case may require, bind or inure to the benefit not
only of Landlord and of Tenant, but also of their respective successors or
assigns, provided this clause shall not permit any assignment, sublease or
other transfer by Tenant contrary to the provisions of Article 14 of this
Lease.

 

26.3         No Air Rights.  No rights to any view or to light or air
over any property, whether belonging to Landlord or any other person, are
granted to Tenant by this Lease.  If at
any time any windows of the Premises are temporarily darkened or the light or
view therefrom is obstructed by reason of any repairs, improvements,
maintenance or cleaning in or about the Building, the same shall be without
liability to Landlord and without any reduction or diminution of Tenant’s
obligations under this Lease.

 

26.4         Modification of Lease.  Should any current or prospective mortgagee
or ground lessor for the Real Property require a modification or modifications
of this Lease, which modification or modifications will not result in an
Adverse Condition, or cause an increased cost or expense to Tenant or in any
other way materially and adversely change the rights and obligations of Tenant
hereunder, then and in such event, Tenant agrees that this Lease may be so
modified and agrees to execute whatever documents are required therefor and
deliver the same to Landlord within ten (10) business days following the
request therefor.  Landlord shall
reimburse to Tenant the actual, documented and reasonable attorneys’ fees
incurred by Tenant in reviewing such documents, not to exceed Seven Hundred
Fifty Dollars ($750.00).  Should
Landlord or any such prospective mortgagee or ground lessor require execution
of a short form of Lease for recording, containing, among other customary
provisions, the names of the parties, a description of the Premises and the
Lease Term, Tenant agrees to execute such short form of Lease and to deliver
the same to Landlord within fifteen (15) business days following the
request therefor, the recordation of which shall be at the sole cost and
expense of Landlord.

 

26.5         Transfer of Landlord’s
Interest.  Tenant acknowledges that
Landlord has the right to transfer all or any portion of its interest in the
Real Property, the Building and/or this Lease, and Tenant agrees that in the
event of any such transfer, Landlord shall be released from all liability under
this Lease arising after the effective date of such transfer and transfer of
the Letter of Credit (to the extent such liability relates to the interest  transferred) provided such obligations are
expressly assumed by the transferee, and Tenant agrees to look solely to such
transferee for the performance of Landlord’s obligations hereunder arising
after the date of transfer.  The
liability of any transferee of Landlord shall be limited to the interest of
such transferee in the Real Property and Building and any available insurance
and condemnation proceeds and such transferee shall be without personal
liability under this Lease, and Tenant hereby expressly waives and releases
such personal liability on behalf of itself and all persons claiming by,
through or under Tenant.  Tenant further
acknowledges that Landlord may assign its interest in this Lease to a mortgage
lender as additional security and agrees that such an assignment shall not
release Landlord from its obligations hereunder and that Tenant shall continue
to look to Landlord for the performance of its obligations hereunder.

 

26.6         Prohibition Against
Recording.  Except as provided in
Section 26.4 above, neither this Lease, nor any memorandum, affidavit or
other writing with respect thereto, shall be recorded by Tenant or by anyone
acting through, under or on behalf of Tenant.

 

55

 

26.7         Landlord’s Title.  Landlord’s title is and always shall be
paramount to the title of Tenant. 
Nothing herein contained shall empower Tenant to do any act which can,
shall or may encumber the title of Landlord beyond such encumbrances as are
created by this Lease.

 

26.8         Captions.  The captions of Articles and Sections are
for convenience only and shall not be deemed to limit, construe, affect or
alter the meaning of such Articles and Sections.

 

26.9         Relationship of
Parties.  Nothing contained in this
Lease shall be deemed or construed by the parties hereto or by any third party
to create the relationship of principal and agent, partnership, joint venturer
or any association between Landlord and Tenant, it being expressly understood
and agreed that neither the method of computation of Rent nor any act of the
parties hereto shall be deemed to create any relationship between Landlord and
Tenant other than the relationship of landlord and tenant.

 

26.10       Application of Payments.  Landlord shall have the right to apply
payments received from Tenant pursuant to this Lease, regardless of Tenant’s
designation of such payments, to satisfy any obligations of Tenant hereunder,
in such order and amounts as Landlord, in its sole discretion, may elect.

 

26.11       Time of Essence; Time
for Payment.  Time is of the essence
of this Lease and each of its provisions. 
Whenever in the Lease a payment is required to be made by one party to
the other, but a specific date for payment is not set forth or a specific
number of days within which payment is to be made is not set forth, or the
words “immediately,” “promptly,” and/or “on demand,” or their equivalent, are
used to specify when such payment is due, then such payment shall be due thirty
(30) days after the date that the party which is entitled to such payment sends
notice to the other party demanding such payment.

 

26.12       Partial Invalidity.  If any term, provision or condition
contained in this Lease shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term, provision or
condition to persons or circumstances other than those with respect to which it
is invalid or unenforceable, shall not be affected thereby, and each and every
other term, provision and condition of this Lease shall be valid and
enforceable to the fullest extent possible permitted by law.

 

26.13       No Warranty.  In executing and delivering this Lease,
neither Landlord nor Tenant has relied on any representation or any warranty or
any statement of the other party which is not set forth herein or in one or
more of the exhibits or riders attached hereto.

 

26.14       Landlord Exculpation.  It is expressly understood and agreed that
notwithstanding anything in this Lease to the contrary, and notwithstanding any
applicable law to the contrary, the liability of Landlord and the Landlord
Parties hereunder (including any successor landlord) and any recourse by Tenant
against Landlord or the Landlord Parties shall be limited solely and exclusively
to an amount which is equal to the interest of Landlord in the Building and the
other portions of the Real Property owned by Landlord and any available
insurance and condemnation proceeds, and neither Landlord, nor any of the
Landlord Parties shall have any personal liability therefor, and Tenant hereby
expressly waives and releases such personal liability on behalf of itself and
all persons claiming by, through or under Tenant.

 

26.15       Entire Agreement.  It is understood and acknowledged that there
are no oral agreements between the parties hereto affecting this Lease and this
Lease supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease.  This Lease (including the exhibits and
riders which are attached hereto and constitute an integral part of this Lease)
contains all of the terms, covenants, conditions, warranties and agreements of
the parties relating in any manner to the rental, use and occupancy of the
Premises, shall be considered to be the only agreement between the parties
hereto and their representatives and agents, and none of the terms, covenants,
conditions or provisions of this Lease can be modified, deleted or added to
except in writing signed by the parties hereto.  All negotiations and oral agreements acceptable to both parties
have been merged into and are included herein. 
There are no other representations or warranties between the parties,
and all reliance with respect to representations is based totally upon the
representations and agreements contained in this Lease.

 

26.16       Right to Lease.  Subject to Tenant’s right of first offer in
Section 1.4 above, and the provisions of Section 26.26 below,
Landlord reserves the absolute right to effect such other tenancies in the
Building, the Other Existing Buildings and/or any other portion of the Real
Property owned by Landlord as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Real
Property.  Tenant does not rely on the
fact, nor does Landlord represent, that any specific tenant or type or number
of tenants shall, during the Lease Term, occupy any space in the Real Property.

 

56

 

26.17       Force Majeure.  Any prevention, delay or stoppage due to
strikes, lockouts, labor disputes, rain or other inclement weather, acts of
God, inability to obtain services, labor, or materials or reasonable
substitutes therefor, governmental actions or inactions, including, without
limitation, any delays in obtaining permits or approvals from the applicable
governmental authorities, civil commotions, fire or other casualty, and other
causes beyond the reasonable control of the party obligated to perform, except
with respect to the obligations imposed on Tenant under the Tenant Work Letter
(unless and to the extent TI Force Majeure Delays extend the Lease Commencement
Date as specifically provided and subject to the restrictions contained in
Section 4.6 of the Tenant Work Letter) or with regard to Rent and other
charges to be paid by Tenant pursuant to this Lease, or monetary amounts
required to be paid by Landlord pursuant to this Lease (collectively, the “Force Majeure”), notwithstanding anything
to the contrary contained in this Lease, shall excuse the performance of such
party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party’s performance caused by a Force Majeure.

 

26.18       Notices.  All notices, demands, statements or
communications (collectively, “Notices”)
given or required to be given by either party to the other hereunder shall be
in writing, shall be sent by United States certified or registered mail,
postage prepaid, return receipt requested, or delivered personally or sent by
nationally recognized overnight courier (i) to Tenant at the appropriate
address set forth in Section 5 of the Summary, or to such other place as
Tenant may from time to time designate in a Notice to Landlord; or (ii) to
Landlord at the addresses set forth in Section 3 of the Summary, or to
such other firm or to such other place as Landlord may from time to time
designate in a Notice to Tenant.  Any
Notice will be deemed given (A) on the date delivered or rejected if it is
mailed as provided in this Section 26.18, or (B) upon the date personal
delivery is made or rejected, or (C) upon the date which is one (1)
business day after it is sent by nationally recognized overnight courier, as
the case may be.  If Tenant is notified
of the identity and address of Landlord’s mortgagee or ground or underlying
lessor, Tenant shall give to such mortgagee or ground or underlying lessor
written notice of any default by Landlord under the terms of this Lease by
registered or certified mail or nationally recognized overnight courier, and
such mortgagee or ground or underlying lessor shall be given a reasonable
opportunity to cure such default prior to Tenant’s exercising any remedy
available to Tenant.

 

26.19       Joint and Several.  If there is more than one Tenant, the
obligations imposed upon Tenant under this Lease shall be joint and several.

 

26.20       Authority.  Each party hereby represents and warrants to
the other party that the representing party is a duly formed and existing
corporation qualified to do business in the State of California and that the
representing party has full right and authority to execute and deliver this
Lease and that each person signing on behalf of the representing party is
authorized to do so.  Each party is making
the foregoing representations knowing that the other party will rely thereon.

 

26.21       Attorneys’ Fees Jury
Trial.  IF EITHER PARTY COMMENCES
LITIGATION AGAINST THE OTHER (OR ANY PARTY BRINGS A COUNTERCLAIM AGAINST THE
OTHER) IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
LEASE, INCLUDING, WITHOUT LIMITATION, THE RELATIONSHIP OF LANDLORD AND TENANT,
TENANT’S USE OR OCCUPANCY OF THE PREMISES, ANY CLAIM FOR INJURY OR DAMAGES,
AND/OR THE ENFORCEMENT OF ANY REMEDY UNDER OR IN CONNECTION WITH THIS LEASE
(INCLUDING ANY EMERGENCY OR STATUTORY REMEDY), THE PARTIES HERETO AGREE TO AND
HEREBY DO WAIVE ANY RIGHT TO A TRIAL BY JURY AND, IN THE EVENT OF ANY SUCH
COMMENCEMENT OF LITIGATION,  OR IN THE
EVENT OF THE COMMENCEMENT OF ANY ARBITRATION, THE PREVAILING PARTY SHALL BE
ENTITLED TO RECOVER FROM THE OTHER PARTY SUCH REASONABLE COSTS AND REASONABLE
ATTORNEYS’ FEES AS MAY HAVE BEEN INCURRED, INCLUDING ANY AND ALL COSTS INCURRED
IN ENFORCING, PERFECTING ANY JUDGMENT OR ARBITRATION AWARD.

 

26.22       Governing Law.  This Lease shall be construed and enforced
in accordance with the laws of the State of California.

 

26.23       Submission of Lease.  Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or an
option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.

 

26.24       Brokers.  Landlord and Tenant hereby warrant to each
other that they have had no dealings with any real estate broker or agent in
connection with the negotiation of this Lease, excepting only the real estate
brokers or agents specified in Section 12 of the Summary (the “Brokers”), and that they know of no other
real estate broker or agent who is entitled to a commission in connection with
this Lease.  Landlord shall pay the
Brokers a commission in connection with the execution of this Lease

 

57

 

pursuant to a separate
agreement between and/or among Landlord and the Brokers.  Each party agrees to indemnify and defend
the other party against and hold the other party harmless from any and all
claims, demands, losses, liabilities, lawsuits, judgments, and costs and
expenses (including without limitation reasonable attorneys’ fees) with respect
to any leasing commission or equivalent compensation alleged to be owing on
account of the indemnifying party’s dealings with any real estate broker or
agent other than the Brokers.  The terms
of this Section shall survive the expiration or earlier termination of
this Lease.

 

26.25       Independent Covenants.  This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary.  Tenant further agrees that if Landlord fails
to perform any of  its obligations set
forth in this Lease, Tenant shall not be entitled to make any repairs or
perform any acts hereunder at Landlord’s expense or to any setoff of the Rent
or other amounts owing hereunder against Landlord; provided, however, that the
foregoing shall in no way impair Tenant’s express rights as stated elsewhere in
this Lease; provided, further, however, that the foregoing shall also not
impair the right of Tenant to commence a separate action against Landlord for
any violation by Landlord of the provisions hereof so long as notice is first
given to Landlord and any holder of a mortgage or deed of trust covering the
Building, Real Property or any portion thereof, of whose address Tenant has
theretofore been notified, and an opportunity is granted to Landlord and such
holder to correct such violations as provided above.

 

26.26       Building Name and
Signage; Restrictions on Leasing. 
Landlord shall have the right at any time to change or designate the
name of the Building, any other buildings in the Real Property and/or the Real
Property, and to install, affix and maintain any and all signs on the exterior
of the Building, any other buildings in the Real Property and/or the Real Property
and in the interior of the Building. 
Notwithstanding the foregoing, Landlord agrees that during any period of
time that Tenant is not in monetary or material non-monetary default under this
Lease (after expiration of the applicable notice and cure period), Landlord
shall not:  (i) enter into a direct
lease for space within the Building (or Building G) with any tenant whose
primary business is an internet service provider (but such restriction shall
not pertain to any assignment or sublease by an existing tenant under any
existing lease within the Building); or (ii) name the Building (or Building G)
after, or provide signage on the Building or the Building Monument (or on
Building G or any monument sign in front of Building G) to, any entity whose
primary business is an internet service provider.  The foregoing restrictions and covenants of Landlord set forth in
clauses (i) and (ii) hereinabove shall terminate if at any time
(A) any applicable Laws prohibit such restrictions and covenants, and/or
(B) the Original Tenant has assigned this Lease or subleased more than
29,551 rentable square feet of the original Premises to any person or entity
other than to an Affiliate pursuant to Section 14.6 above, or the Original
Tenant (and any Affiliate assignees or sublessees under any assignments or
subleases entered in pursuant to Section 14.6 above) fail to be in actual
and physical possession of at least 82,000 rentable square feet of the original
Premises following the Lease Commencement Date, and/or (C) the primary business
of the Original Tenant (or any Affiliate assignee to which this Lease has been
assigned pursuant to Section 14.6 above) is not an internet service
provider.  In addition, the foregoing
restrictions and covenants pertaining to Building G shall only be binding upon
Landlord during the period of time when Landlord or any Landlord Affiliate, or
any of their successors and assigns, concurrently own both the Building and
Building G.

 

26.27       Transportation
Management.  In addition to Tenant’s
obligations set forth in Section 5.1 above, if required by law, Landlord
and Tenant shall fully comply with all present or future
governmentally-mandated programs intended to manage parking, transportation or
traffic in and around the Real Property, and in connection therewith, Tenant
shall take reasonable action for the transportation planning and management of
all employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other
transportation-related committees or entities.

 

26.28       Landlord’s Construction.  Tenant acknowledges that prior to and during
the Lease Term, Landlord (and/or any common area association) will be
completing construction and/or demolition work pertaining to various portions of
the Building and Real Property, including without limitation, landscaping and
tenant improvements for premises for other tenants and, at Landlord’s sole
election, such other buildings, parking structures and facilities,
improvements, landscaping and other facilities within or as part of the Project
as Landlord (and/or such common area association) shall from time to time
desire (collectively, the “Construction”).  In connection with such Construction,
Landlord (and/or any common area association) may, among other things, erect
scaffolding or other necessary structures in the Building, limit or eliminate
access to portions of the Real Property, including portions of the common
areas, access roads and parking facilities, or perform work in or around the Building
or Real Property, which work may create noise, dust or leave debris; provided,
however, Tenant shall always have reasonable access to the Premises and those
portions of the Parking Facilities designated for Tenant’s Reserved Parking
Passes and Tenant’s Unreserved Parking Structure Passes in Section 10.1 of
the Summary and/or otherwise designated from time to time by Landlord for
Tenant’s parking passes in accordance with Article 24 above.  Tenant hereby agrees that such Construction
and Landlord’s (and/or such common area association’s) actions in connection
with such Construction shall in no way constitute a constructive

 

58

 

eviction of Tenant nor
(except as provided in Section 6.5 above) entitle Tenant to any abatement
of Rent.  Landlord shall have no
responsibility or for any reason be liable to Tenant for any direct or indirect
injury to or interference with Tenant’s business arising from the Construction
(except as provided in Section 6.5 above), nor shall Tenant be entitled to
any compensation or damages from Landlord (except as provided in
Section 6.5 above) for loss of the use of the whole or any part of the
Premises or of Tenant’s Property or improvements resulting from the
Construction or Landlord’s (and/or such common area association’s) actions in
connection with such Construction, or for any inconvenience or annoyance
occasioned by such Construction or Landlord’s (and/or such common area
association’s) actions in connection with such Construction; provided, however,
that in performing any Construction (i) Landlord agrees to use
commercially reasonable efforts to minimize interference with Tenant’s use of
and access to the Premises (and those portions of the Parking Facilities
designated for Tenant’s Reserved Parking Passes and Tenant’s Unreserved Parking
Structure Passes in Section 10.1 of the Summary and/or otherwise
designated from time to time by Landlord for Tenants’ parking passes in
accordance with Article 24 above) as a result of such Construction,
(ii) Landlord shall perform such Construction in compliance with all
applicable Laws in effect as of any time such Construction is performed,
including, without limitation, all Environmental Laws, and (iii) Landlord
shall perform such construction in a manner that will not materially increase
Tenant’s monetary obligations under this Lease or otherwise materially
adversely affect Tenant’s rights under this Lease; and provided, further,
however, with respect to any such Construction performed by any common area
association, Landlord shall use commercially reasonable efforts to enforce its
rights under the applicable covenants, conditions and restrictions governing
such association to eliminate any Adverse Condition of which Landlord is aware
and resulting from any such Construction.

 

26.29       Emergency Generator.  Landlord hereby agrees that, subject to
Tenant’s compliance with all applicable Laws, the Underlying Documents and all
other recorded covenants, conditions and restrictions affecting the Real Property,
and subject to the approval of all applicable governmental authorities, Tenant
shall have the right, at Tenant’s sole cost and expense and subject to the
provisions of this Section 26.29 (but without any additional rent payable
to Landlord), to install one (1) 1000 kw back-up emergency generator (which may
include the Fuel Tank, as defined in Section 26.29.8 below, contained
therein) in the west side of the existing trash enclosure located outside the
Premises as depicted on Exhibit A-7 attached hereto (the area upon
which such generator shall be located shall be referred to herein as the “Generator Site”).  Such generator (including, if applicable, the Fuel Tank to be
installed therein) shall be of such size and specifications, and include such
platforms, fencing, enclosures, sheds and other related materials and
equipment, as shall be approved by Landlord prior to installation
(collectively, the “Emergency Generator”),
which approval may be granted or denied in Landlord’s sole and absolute discretion;
provided, however, if the size of the Emergency Generator does not exceed 23
feet long, by 16 feet wide, by 12 feet high, with not more than a 500
gallon, double walled steel, above-ground fuel tank contained therein, Landlord
hereby approves of the size of the Emergency Generator and Fuel Tank, and shall
not unreasonably withhold its approval with respect to the other specifications
of the Emergency Generator.  In
addition, Tenant shall have the right, subject to available capacity of the
Building, to install such connection equipment, such as conduits, cables,
risers, feeders and materials (collectively, the “Generator Connecting Equipment”) in the shafts, ducts,
conduits, chases, utility closets and other facilities of the Building as is
reasonably necessary to connect the Emergency Generator to the Premises and
Tenant’s other machinery and equipment therein, subject, however, to the
provisions of Section 26.29.2, below. 
Tenant shall also have the right of access, consistent with
Section 26.29.3, below, to the areas where the Emergency Generator and any
such Generator Connecting Equipment are located for the purposes of
maintaining, repairing, testing and replacing the same.

 

26.29.1    Generator Equipment.  The
installation of the Emergency Generator and related Generator Connecting
Equipment (hereby referred to together and/or separately as the “Generator Equipment”) shall be performed in
accordance with and subject to the provisions of this Section 26.29 and
Article 8 of this Lease (and the Tenant Work Letter if installed during
the construction of the Tenant Improvements), and the Generator Equipment shall
be deemed to be Tenant’s Property for all purposes of this Lease.  For the purposes of determining Tenant’s
obligations with respect to its use of the Generator Site and Generator
Equipment herein provided, the Generator Site shall be deemed to be a portion
of the Premises; consequently, all of the provisions of this Lease with respect
to Tenant’s obligations hereunder shall apply to the installation, use and
maintenance of the Generator Equipment, including without limitation,
provisions relating to compliance with requirements as to insurance, indemnity,
repairs and maintenance, and compliance with Laws.

 

26.29.2    Non-Exclusive Right.  It is
expressly understood that Landlord retains the right to grant third parties the
right to utilize any portion of the Project located outside the Premises not
utilized by Tenant as the Generator Site, provided in each event that Tenant
shall have reasonable access to and use of the Generator Equipment and
Generator Site.

 

26.29.3    Tenant’s Covenants.  Tenant shall
install, use, maintain and repair the Generator Equipment so as not to damage
or interfere with the operation of the Project or Building, any portion thereof,
including, without limitation, the Generator Site, the Systems and Equipment,
and any other

 

59

 

generators or power
sources or similar equipment located in or on the Building or Project; and
Tenant hereby agrees to indemnify, defend and hold Landlord and the Landlord
Parties harmless from and against any and all Claims (other than the Excluded
Claims) arising out of Tenant’s failure to comply with the provisions of this
Section 26.29.

 

26.29.4    Landlord’s Obligations.  Except as
specifically provided in this Section 26.29, Landlord shall not have any
obligations with respect to the Generator Site, the Generator Equipment or
compliance with any requirements relating thereto, nor shall Landlord be
responsible for any damage that may be caused to the Generator Equipment,
except to the extent caused by the gross negligence or willful misconduct of
Landlord and not insured or required to be insured by Tenant under this
Lease.  Landlord makes no representation
that the Generator Equipment will be able to supply sufficient power to the
Premises, and Tenant agrees that Landlord shall not be liable to Tenant
therefor.

 

26.29.5    Condition of Generator Site. 
Tenant shall accept the Generator Site in its “AS-IS” condition, without
any representations or warranties made by Landlord concerning same (including,
but not limited to, the purposes for which such areas are to be used by
Tenant), and Landlord shall have no obligation to contract or pay for any
improvements or other work in or for the Generator Site, and Tenant shall be
solely responsible, at its sole cost and expense, for preparing the Generator
Site for the installation of the Generator Equipment and for constructing any
improvements or performing any other work in such areas pursuant to and in
accordance with the provisions of this Section 26.29.  Tenant, at Tenant’s sole cost and expense,
shall maintain the Generator Equipment and install such enclosures, fencing and
other protective equipment on or about the Generator Equipment as Landlord may
reasonably determine.

 

26.29.6    Repairs.  Tenant shall
(i) be solely responsible for any damage caused as a result of the Generator
Equipment, (ii) promptly pay any tax, license or permit fees charged pursuant
to any requirements in connection with the installation, maintenance or use of
the Generator Equipment and comply with all precautions and safeguards
recommended by all governmental authorities, and (iii) subject to the waiver of
subrogation set forth in Section 10.4 above, make necessary repairs,
replacements to or maintenance of the Generator Equipment and Generator
Site.  Tenant shall have the work which
is Tenant’s obligation to perform under this Section 26.29 (including,
without limitation, all installation, modification and maintenance of the
Generator Equipment) performed promptly and diligently in a first-class,
workmanlike manner, by contractors and subcontractors reasonably approved by
Landlord.

 

26.29.7    Installation.  Tenant shall
install and operate the Generator Equipment in compliance with all applicable
Laws, the Underlying Documents and all other recorded covenants, conditions and
restrictions affecting the Real Property. 
Prior to the installation of the Generator Equipment, or the performance
of any modifications or changes thereto, Tenant shall comply with the
following:

 

(i)            Tenant shall submit to Landlord in writing all plans
for such installations, modifications or changes for Landlord’s approval, which
approval shall be granted or denied in Landlord’s sole and absolute discretion;
provided, however, if the size and weight of the Emergency Generator set forth
in such plans do not exceed the maximum size and weight specifications set
forth in Section 26.29 above, Landlord hereby approves of such size and
weight specifications and shall not unreasonably withhold its approval with
respect to the other specifications of the Emergency Generator set forth in
such plans;

 

(ii)           prior to commencement of any work, Tenant shall obtain
the required approvals of all federal, state and local governmental
authorities; Tenant shall promptly deliver to Landlord written proof to the
extent practical of compliance with all applicable Laws, the Underlying
Documents and all other recorded covenants, conditions and restrictions
affecting the Real Property in connection with any work related to the
Generator Equipment, including, but not limited to, a signed-off permit from
the City of Los Angeles;

 

(iii)          all of such work shall conform to Landlord’s design
specifications for the Project, Building and the Generator Site and Landlord’s
requirements, including, but not limited to, weight and loading requirements,
and shall not adversely affect the structural components of the Building or
interfere with any Systems and Equipment located in, upon or serving the
Project, Building or the Generator Site; and

 

(iv)          the Generator Equipment shall be clearly marked to
show Tenant’s name, address, telephone number and the name of the person to
contact in case of emergency.

 

26.29.8    Hazardous Materials.  Tenant shall
not use any Hazardous Materials in connection with the Generator Equipment,
except that Tenant may use diesel fuel stored in an above-ground, double walled
steel tank containing not more than 500 gallons (the “Fuel Tank”) and shall be

 

60

 

contained within the
Emergency Generator at the Generator Site (the exact location and size of which
Fuel Tank shall be approved by Landlord in accordance with the standards for
approval set forth above in this Section 26.29), as long as such fuel and
Fuel Tank are kept, maintained and used in accordance with all applicable Laws
and the highest safety standards for such use, and so long as such fuel is
always stored within the Fuel Tank and is not used or stored in any area
outside of the Emergency Generator. 
Tenant shall promptly, at Tenant’s expense, take all investigatory and
all remedial action required by applicable Laws and reasonably recommended by
Landlord, whether or not formally ordered or required by applicable Laws, for
the cleanup of any spill, release or other contamination of the Generator Site
and/or the Project to the extent caused or contributed to by Tenant’s use of
the Generator Equipment (including, without limitation, the fuel for the
Emergency Generator), or pertaining to or involving any such fuel or other
Hazardous Materials brought onto the Generator Site during the Lease Term by
Tenant or any of Tenant’s agents, employees, contractors, licensees or
invitees.  Tenant shall indemnify,
defend and hold Landlord and the Landlord Parties harmless from and against any
and all Claims (other than the Excluded Claims) arising out of or involving any
Hazardous Materials brought onto the Generator Site by or for Tenant in
connection with Tenant’s activities under this Section 26.29.  Tenant’s obligations shall include, but not
be limited to, the effects of any contamination or injury to person, property
or the environment created or suffered by Tenant or any of Tenant’s agents,
employees, licensees or invitees, and the cost of investigation, removal,
remediation, restoration and/or abatement, and shall survive the expiration or
termination of this Lease.

 

26.29.9    Security.  Physical
security of the Generator Site and the Generator Equipment is the sole
responsibility of Tenant, who shall bear the sole cost, expense and liability
of any security services, emergency alarm monitoring and other similar services
in connection therewith.  Subject to
Landlord’s indemnity of Tenant in Section 10.1.2 above, Landlord shall not
be liable to Tenant for any direct, indirect, consequential or other damages
arising out of or in connection with the physical security, or lack thereof, of
the Generator Site and/or Generator Equipment.

 

26.29.10  Testing.  The Generator
Equipment shall be routinely tested and inspected by a qualified contractor
selected by Tenant and reasonably approved by Landlord, at Tenant’s expense, in
accordance with testing and inspection service contracts reasonably approved by
Landlord.  Tenant will provide Landlord
with copies of certificates and other documentation related to the testing of
the Generator Equipment.  Testing hours
are restricted, however, to those specific hours reasonably set and determined
by Landlord from time to time.

 

26.29.11  Default.  If Tenant
fails to perform any of its obligations under this Section 26.29, and does
not correct such noncompliance within ten (10) business days after receipt of
notice thereof from Landlord or such longer period as may be reasonably necessary
to correct such noncompliance, so long as Tenant commences to correct such
noncompliance within such ten (10) business day period and thereafter proceeds
with due diligence to correct such noncompliance, then Tenant shall be deemed
in default under this Lease, notwithstanding any other notice or cure provided
in Article 19 or otherwise in this Lease, and in addition to all other
remedies Landlord may have under this Lease, Tenant shall, upon notice from
Landlord, immediately discontinue its use of that portion of the Generator
Equipment to which such noncompliance relates, and make such repairs and
restoration as required under Section 26.29.12 below with respect thereto.

 

26.29.12  Removal at End of Term.  Upon the
expiration of the Lease Term or upon any earlier termination of this Lease,
Tenant shall, subject to the reasonable control of and direction from Landlord,
remove the Generator Equipment, including, without limitation all electrical
switch gear, underground conduit and feeders, architectural enclosure and/or
modifications to the Generator Site, repair any damage caused thereby, and
restore the Generator Site and other facilities of the Building and Project to
their condition existing prior to the installation of the Generator Equipment.  Any and all removal of the Generator
Equipment shall be performed by certified and licensed contractors previously
approved in writing by Landlord (which approval shall not be unreasonably
withheld, conditioned or delayed) and in accordance with a previously approved
removal plan, in a workmanlike manner, without any interference, damage or
destruction to any other equipment, structures or operations at the Generator
Site, the Building or the Project and/or any equipment of other licensees or
tenants.  If Tenant fails to timely make
such removal and/or restoration, then Landlord may perform such work at
Tenant’s cost, which cost shall be immediately due and payable to Landlord upon
Tenant’s receipt of invoice therefor from Landlord.

 

26.29.13  Rights Personal.  Tenant’s
rights under this Section 26.29 are personal to the Original Tenant and
any assignee (including an Affiliate) to which Tenant’s entire interest in this
Lease has been assigned pursuant to Article 14 of this Lease, and may only
be exercised by the Original Tenant or such assignee, as the case may be and
shall only be utilized when the Original Tenant or such assignee, as the case
may be, is in actual and physical possession of any portion of the
Premises.  In addition, Tenant may
permit subtenants (including Affiliates) under subleases entered into by Tenant
pursuant to Article 14 above to tie their Subject Space into the Emergency
Generator.

 

61

 

26.30       Satellite Equipment;
Supplemental Roof HVAC Equipment; Connecting Equipment.  Subject to (i) the approval of all
applicable governmental agencies, (ii) Tenant’s compliance with all
applicable Laws and the provisions of this Section 26.30 and the other
provisions of this Lease, and (iii) the provisions, and Tenant’s
compliance with and obtaining all approvals required under, the Underlying
Documents and all other covenants, conditions and restrictions now or hereafter
recorded against or affecting the Real Property, Landlord hereby agrees that
Tenant shall have the non-exclusive right, at Tenant’s sole cost and expense
but without any obligation to pay Landlord any rent or license fees with
respect thereto, to:  (A) install
on the roof of the Building, in the locations depicted on Exhibit A-8
attached hereto (collectively, the “Satellite
Equipment Area”), the following telecommunications equipment
(collectively, the “Satellite Equipment”):  (x) one (1) satellite dish not
exceeding eighteen (18) inches in diameter; (y) one (1) satellite dish not
exceeding three (3) feet in diameter; ; and (z) four (4)
microwave antennae, each not exceeding ten (10) feet high and one (1) foot
wide (such microwave antennae described in this clause(z) shall not be used for
any transmissions and shall only be used to receive signals,  except
communications and transmissions from and to the signal carrier and between or
among employees of Tenant, United Online and Juno and their respective
Affiliates shall be permitted); (B) subject to the provisions of Section 6.1.7 above, install on
the roof of the Building, in the
location depicted on Exhibit A-9 attached hereto (the “Supplemental Roof HVAC Area”), the Supplemental Roof HVAC Equipment;
(C) subject to the provisions of Section 6.1.7 above, install in such locations as shall be reasonably designated by Landlord, the
other Supplemental Equipment described in Section 6.1.7 above; and
(D) subject to available capacity of the Building (and/or subject
to Tenant installing, at its sole cost and expense, and subject to Landlord’s
prior reasonable approval, additional riser(s) in the Building), to install
such connection equipment, such as conduits, cables, feeders and materials
(collectively, the “Connecting Equipment”) in the risers,
shafts, ducts, conduits, chases, utility closets and other facilities of the
Building as is reasonably necessary to (1) connect the Satellite
Equipment, Supplemental Roof HVAC Equipment and other Supplemental Equipment to
the Data Center and other portions of the Premises, and Tenant’s machinery and
equipment in the Premises, and (2) provide telecommunications and/or
internet service connections (including fiber optic cabling) to the Premises as described in Section 6.7 above
(including, installation in the
risers designated therein and in such other locations as shall be designated by
Landlord, the cabling and equipment necessary to provide such
service).  Subject to
Section 26.30.3 below and all of the terms and conditions of this Lease,
and subject to all applicable Laws and such reasonable rules and regulations as
Landlord may impose from time to time, Tenant shall also have the right of
access twenty-four (24) hours per day, seven (7) days per week to the areas
where any Satellite Equipment, Supplemental Roof HVAC Equipment, other
Supplemental Equipment and Connecting Equipment (all collectively referred to
herein as the “Special Equipment”)
are located for the purposes of maintaining, repairing, testing and replacing
the same; provided, however that, except in cases of emergencies, any such
access by Tenant must be accompanied by a representative of Landlord or
Landlord’s property manager free of charge (and Landlord shall make such
representative reasonably available to accompany Tenant during the normal
business hours of the Building).

 

26.30.1    Installation.  The
installation of the Special Equipment shall constitute alterations and shall be
performed in accordance with and subject to the provisions of Article 8 of
this Lease, (or the Tenant Work Letter if installed by Tenant during the
construction of the initial Tenant Improvements for the Premises) including,
without limitation, Tenant’s obligation to obtain Landlord’s prior consent to
the size and other specifications of the Special Equipment, and the Special
Equipment shall be treated for all purposes of this Lease as if the Special
Equipment were Tenant’s Property.  In no
event shall Tenant be permitted to void any warranties pertaining to the
Building in connection with the installation of the Special Equipment.  For the purposes of determining Landlord’s
and Tenant’s respective rights and obligations with respect to its use of the
roof as herein provided, the portions of the Satellite Equipment Area and
Supplemental Roof HVAC Area (and any other portions of the roof) where the
Special Equipment is actually located shall be deemed to be a portion of
Tenant’s Premises; consequently, all of the provisions of this Lease respecting
Tenant’s obligations hereunder shall apply to the installation, use and
maintenance of the such portions of the roof by Tenant (including, without
limitation, provisions relating to compliance with requirements as to
insurance, indemnity, repairs and maintenance), and all such provisions shall
also apply, to the extent appropriate, to the installation, use and maintenance
of the Special Equipment.  Except for
Landlord’s obligation to provide, at Tenant’s cost, the roof penetration work
for the Supplemental Roof HVAC Equipment pursuant to Section 6.1.7 above
and except as
provided in this Section 26.30, Landlord shall have no
obligation to make any changes, improvements or alterations to the areas where
any of the Special Equipment is located.

 

26.30.2    Non-Exclusive Right.  It is
expressly understood that Landlord retains the right to use and to grant to
third parties the right to use the portions of the roof and other areas of the
Building on which the Special Equipment is not located, provided that Tenant
shall have reasonable access to the Special Equipment, and Landlord and such
third parties shall not unreasonably interfere with Tenant’s use of the roof or
the Special Equipment.

 

26.30.3    Tenant’s Covenants.  Tenant shall
install, use, maintain and repair the Special Equipment so as not to
(i) cause damage to the Building or the Building’s Systems and Equipment,
and

 

62

 

(ii) or unreasonably
interfere with the operation of the Building, or the operation of the
businesses of other tenants, occupants or licensees of the Building or such
tenants’, occupants’ and licensees’ systems and equipment located in or on the
Building or Project.  In addition,
Tenant shall (A) be solely responsible for any damage caused as a result
of the Special Equipment, (B) promptly pay any tax, license or permit fees
charged pursuant to any requirements in connection with the installation,
maintenance or use of the Special Equipment and comply with all precautions and
safeguards recommended by all governmental authorities, and (C) make
necessary repairs, replacements or maintenance of the Special Equipment.  Further, Tenant, at Tenant’s sole cost and
expense, shall maintain such equipment and install such fencing and other
protective equipment on or about the Special Equipment as Landlord may
reasonably require.  Tenant shall
indemnify, defend and hold Landlord and the Landlord Parties harmless from and
against any and all Claims other than the Excluded Claims (as such terms are
defined in Section 10.1 above) arising out of Tenant’s failure to comply
with the provisions of this Section 26.30.

 

26.30.4    Landlord’s Obligations.  Except as
specifically set forth herein, Landlord shall not have any obligations with
respect to the Special Equipment or compliance with any requirements relating
thereto nor shall Landlord be responsible for any damage that may be caused to
the Special Equipment, except to the extent caused by the gross negligence or
willful misconduct of Landlord or the Landlord Parties and not insured or
required to be insured by Tenant under this Lease.  Landlord makes no representation that the Satellite Equipment,
telecommunications cabling and related Connecting Equipment will be able to
receive or transmit communication signals without interference or disturbance,
or that the Supplemental Roof HVAC Equipment will be able to supply sufficient
air conditioning to the Premises, and Tenant agrees that Landlord shall not be
liable to Tenant therefor.

 

26.30.5    Hazardous Materials/Inspections. 
Tenant shall not use any Hazardous Materials in connection with the
Special Equipment other than limited reasonable quantities of Hazardous
Materials reasonably necessary and customarily used for the operation of the
Special Equipment and used, stored and disposed of by Tenant in accordance with
all applicable Laws and the highest safety standards for such use, storage and
disposal.  Landlord shall have the
right, after providing Tenant with written notice, to conduct such tests and/or
inspections of the Special Equipment as Landlord may determine are reasonably
necessary from time to time to ensure that Tenant is complying with the terms
of this Section 26.30, and Tenant shall pay for the reasonable cost of
such tests.

 

26.30.6    Default.  If any of
the conditions set forth in this Section 26.30 are not complied with by
Tenant, then without limiting Landlord’s rights and remedies it may otherwise
have under this Lease, Tenant shall, upon written notice from Landlord, have
the option either to: 
(i) immediately discontinue its use of the particular items of the
Special Equipment which are non-compliant, remove the same, and make such
repairs and restoration as required under Section 26.30.7 below, or
(ii) correct such noncompliance within thirty (30) days after receipt of
notice or such longer period as may be reasonably necessary to correct such
noncompliance, so long as Tenant commences to correct such noncompliance within
such thirty (30) day period and thereafter proceeds with due diligence to
correct such noncompliance.  In the
event Tenant elects the option described in clause (ii) of the immediately
preceding sentence and Tenant fails to correct such noncompliance within the
applicable time period described in clause (ii), then Tenant shall immediately
discontinue its use of the particular items of the Special Equipment which are
non-compliant and remove the same.

 

26.30.7    Removal at End of Term.  Upon the
expiration or earlier termination of this Lease, Tenant shall, subject to the
reasonable control of and direction from Landlord, remove the Special
Equipment, repair any damage caused thereby, and restore the roof and other facilities
of the Building to their condition existing prior to the installation of the
Special Equipment.

 

26.30.8    Rights Personal. 
Notwithstanding the foregoing provisions of this Section 26.30 to
the contrary, Tenant’s rights under this Section 26.30:  (i) are personal to the Original Tenant
and any assignee (including any Affiliate) to which Tenant’s entire interest in
this Lease has been assigned pursuant to Article 14 of this Lease;
(ii) may only be exercised by the Original Tenant or such assignee and
shall only be utilized when the Original Tenant or such assignee is in actual
and physical possession of any portion of the Premises; and (iii) may not
be transferred to or used by any person or entity other than the Original
Tenant or such assignee, except that Tenant may permit subtenants (including
Affiliates) under subleases entered into by Tenant pursuant to Article 14
above to use the Special Equipment for their telecommunications, electricity
and/or HVAC needs in their Subject Space.

 

26.31       Guaranty.  Concurrently with Tenant’s execution of this
Lease, Tenant shall deliver to Landlord a Guaranty of Lease duly executed by
United Online, in the form of Exhibit J attached hereto.

 

26.32       Arbitration.  Notwithstanding anything in this Lease to
the contrary, the provisions of this Section 26.32 contain the sole and
exclusive method, means and procedure to resolve any and all disputes or
disagreements, including whether any particular matter constitutes, or with the
passage of time would constitute, a default by Tenant under this Lease, but
excluding:  (i) any determination
of Fair Market

 

63

 

Rental Rate (which shall
be determined as set forth in the Extension Option Rider); (ii) any
dispute concerning the amount of Operating Expenses, Tax Expenses and/or
Utilities Costs set forth in any Statement delivered by Landlord to Tenant
pursuant to Article 4 above (which dispute shall be subject to Tenant’s
audit rights as set forth in Section 4.7 above); (iii) all claims of
Landlord or Tenant which seek anything other than the enforcement of such
party’s rights under this Lease; (iv) all claims of Landlord or Tenant
which are primarily founded upon matters of fraud, willful misconduct, bad
faith or any other allegations of tortious action, and seek the award of
punitive or exemplary damages; (v) any action by Landlord in unlawful
detainer or to obtain possession of the Premises; or (vi) any injunctive
or other equitable relief sought by either party.  The parties hereby irrevocably waive any and all rights to the
contrary and shall at all times conduct themselves in strict, full, complete
and timely accordance with the provisions of this Section 26.32.  Any and all attempts to circumvent the
provisions of this Section 26.32 shall be absolutely null and void and of
no force or effect whatsoever.  As to
any matter submitted to arbitration to determine whether it would, with the
passage of time, constitute a default by Tenant or a default by Landlord under
this Lease (each, a “Default”),
such passage of time shall not commence to run until any such affirmative
determination, so long as it is simultaneously determined that the challenge of
such matter as a potential Default was made in good faith, except with respect
to the payment of money.  With respect
to the payment of money, such passage of time shall not commence to run only if
the party which is obligated to make the payment does in fact make the payment
to the other party.  Such payment can be
made “under protest,” which shall occur when such payment is accompanied by a
good-faith notice stating why the party has elected to make a payment under
protest.  Such protest will be deemed
waived unless the subject matter identified in the protest is submitted to
arbitration as set forth in the following:

 

26.32.1    Arbitration Panel.  Within
ninety (90) days after delivery of written notice (“Notice of Dispute”) of the
existence and nature of any dispute given by any party to the other party, and
unless otherwise provided herein in any specific instance, the parties shall
each:  (i) appoint one (1) lawyer
actively engaged in the licensed and full-time practice of law, specializing in
commercial real estate, in the County of Los Angeles for a continuous period
immediately preceding the date of delivery (“Dispute Date”) of the Notice
of Dispute of not less than ten (10) years, but who has at no time ever
represented or acted on behalf of any of the parties; and (ii) deliver
written notice of the identity of such lawyer and a copy of his or her written
acceptance of such appointment and acknowledgment of and agreement to be bound
by the time constraints and other provisions of this Section 26.32 (“Acceptance”)
to the other parties hereto.  The party
who selects the lawyer may not consult with such lawyer, directly or
indirectly, to determine the lawyer’s position on the issue which is the
subject of the dispute.  In the event
that any party fails to so act, such arbitrator shall be appointed pursuant to
the same procedure that is followed when agreement cannot be reached as to the
third arbitrator.  Within ten (10) days
after such appointment and notice, such lawyers shall appoint a third lawyer
(together with the first two (2) lawyers, “Arbitration Panel”) of the same
qualification and background and shall deliver written notice of the identity
of such lawyer and a copy of his or her written Acceptance of such appointment
to each of the parties.  In the event
that agreement cannot be reached on the appointment of a third lawyer within such
period, such appointment and notification shall be made as quickly as possible
by any court of competent jurisdiction, by any licensing authority, agency or
organization having jurisdiction over such lawyers, by any professional
association of lawyers in existence for not less than ten (10) years at the
time of such dispute or disagreement and the geographical membership boundaries
of which extend to the County of Los Angeles or by any arbitration association
or organization in existence for not less than ten (10) years at the time of
such dispute or disagreement and the geographical boundaries of which extend to
the County of Los Angeles, as determined by the party giving such Notice of
Dispute and simultaneously confirmed in writing delivered by such party to the
other party.  Any such court, authority,
agency, association or organization shall be entitled either to directly select
such third lawyer or to designate in writing, delivered to each of the parties,
an individual who shall do so.  In the
event of any subsequent vacancies or inabilities to perform among the
Arbitration Panel, the lawyer or lawyers involved shall be replaced in
accordance with the provisions of this Section 26.32 as if such
replacement was an initial appointment to be made under this Section 26.32
within the time constraints set forth in this Section 26.32, measured from
the date of notice of such vacancy or inability, to the person or persons
required to make such appointment, with all the attendant consequences of failure
to act timely if such appointed person is a party hereto.

 

26.32.2    Duty.  Consistent
with the provisions of this Section 26.32, the members of the Arbitration
Panel shall utilize their utmost skill and shall apply themselves diligently so
as to hear and decide, by majority vote, the outcome and resolution of any
dispute or disagreement submitted to the Arbitration Panel as promptly as
possible, but in any event on or before the expiration of thirty (30) days
after the appointment of the members of the Arbitration Panel.  None of the members of the Arbitration Panel
shall have any liability whatsoever for any acts or omissions performed or
omitted in good faith pursuant to the provisions of this Section 26.32.

 

26.32.3    Authority.  The
Arbitration Panel shall (i) enforce and interpret the rights and
obligations set forth in the Lease to the extent not prohibited by law,
(ii) fix and establish any and all rules

 

64

 

as it shall consider
appropriate in its sole and absolute discretion to govern the proceedings
before it, including any and all rules of discovery, procedure and/or evidence,
and (iii) make and issue any and all orders, final or otherwise, and any
and all awards, as a court of competent jurisdiction sitting at law or in
equity could make and issue, and as it shall consider appropriate in its sole
and absolute discretion, including the awarding of monetary damages (but shall
not award consequential damages to either party and shall not award punitive
damages), the awarding of reasonable attorneys’ fees and costs to the
prevailing party as determined by the Arbitration Panel and the issuance of
injunctive relief.  If the party against
whom the award is issued complies with the award, within the time period established
by the Arbitration Panel, then no Default will be deemed to have occurred,
unless the Default pertained to the non-payment of money by Tenant or Landlord,
and Tenant or Landlord failed to make such payment under protest.

 

26.32.4    Appeal.  The decision
of the Arbitration Panel shall be final and binding, may be confirmed and
entered by any court of competent jurisdiction at the request of any party and
may not be appealed to any court of competent jurisdiction or otherwise except
upon a claim of fraud on the part of the Arbitration Panel, or on the basis of
a mistake as to the applicable law.  The
Arbitration Panel shall retain jurisdiction over any dispute until its award
has been implemented, and judgment on any such award may be entered in any
court having appropriate jurisdiction.

 

26.32.5    Compensation.  Each member
of the Arbitration Panel shall be compensated for any and all services rendered
under this Section 26.32 at a rate of compensation equal to the sum of
(i) Four Hundred Dollars ($400.00) per hour and (ii) the sum of Ten
Dollars ($10.00) per hour multiplied by the number of full years of the expired
Term under the Lease, plus reimbursement for any and all expenses incurred in
connection with the rendering of such services, payable in full promptly upon
conclusion of the proceedings before the Arbitration Panel.  Such compensation and reimbursement shall be
borne by the nonprevailing party as determined by the Arbitration Panel in its
sole and absolute discretion.

 

26.33       Consent and Approvals.  Any time the consent or approval of Landlord
or Tenant is required under this Lease, such consent or approval shall not be
unreasonably withheld, conditioned or delayed, and whenever this Lease grants
Landlord or Tenant the right to take action, exercise discretion, establish
rules and regulations or make an allocation or other determination, Landlord
and Tenant shall act reasonably and in good faith.  Notwithstanding the foregoing: 
(i) Landlord shall be entitled to grant or withhold its consent or
approval or exercise its discretion in its sole and absolute discretion with
respect to the following matters, unless a different standard of consent or
approval therefor is expressly provided in this Lease, (A) matters which
could affect the common areas of the Real Property or the exterior appearance
of the Building or Real Property, (B) actions taken by Landlord pursuant
to Article 19 of this Lease, or (C) matters which could have an
adverse effect on the structural components or Systems and Equipment of the
Building; and (ii) Landlord and Tenant shall grant or withhold its consent
or exercise its discretion with respect to matters for which there is a
standard of consent or approval or discretion specifically set forth in this
Lease in accordance with such specific standards.

 

26.34       Calendar Days.  All references made in this Lease to the
word “days,” whether for Notices, schedules or other miscellaneous time limits,
shall at all times herein be deemed to mean calendar days, unless specifically
referenced as “business” or “working” days.

 

26.35       Survival of Provisions
Upon Termination of Lease.  Any
term, covenant or condition of this Lease which requires the performance of
obligations or forbearance of an act by either party hereto after the
termination of this Lease shall survive such termination of this Lease.  Such survival shall be to the extent
reasonably necessary to fulfill the intent thereof, or if specified, to the
extent of such specification, as same is reasonably necessary to perform the
obligations and/or forbearance of an act set forth in such term, covenant or
condition.  Notwithstanding the
foregoing, in the event a specific term, covenant or condition is expressly
provided for in such a clear fashion as to indicate that such performance of an
obligation or forbearance of an act is no longer required, then the specific
shall govern over this general provision of this Lease.

 

26.36       Tenant’s Special Offset
Right.  In the event Tenant obtains
a final non-appealable monetary judgment from a court of competent jurisdiction
against Landlord resulting from Landlord’s default under this Lease, and
Landlord fails to pay the amount of such monetary judgment to Tenant within
thirty (30) days after such judgment is entered against Landlord, and such
failure continues for an additional thirty (30) days after notice from Tenant
that Tenant intends to exercise its rights under this Section 26.36, then
Tenant may offset against the Rent next due and payable under this Lease, the
amount of such monetary judgment so entered against Landlord.

 

[SIGNATURE
BLOCK ON FOLLOWING PAGE]

 

65

 

IN WITNESS WHEREOF,
Landlord and Tenant have caused this Lease to be executed the day and date
first above written.

 

	
   

  	
  “Landlord”:

  
	
   

  	
   

  
	
   

  	
  LNR WARNER CENTER, LLC,

  
	
   

  	
  a California limited
  liability company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Lennar Rolling Ridge,
  Inc.,

  
	
   

  	
   

  	
  a California
  corporation

  
	
   

  	
   

  	
  Its:  Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David O. Teal

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  David O. Teal

  	
   

  
	
   

  	
   

  	
   

  	
  Its:  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  “Tenant”:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NETZERO, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Charles S. Hilliard

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  CharlesS. Hilliard

  	
   

  
	
   

  	
   

  	
   

  	
  Its:  EVP, Finance and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Mark R. Goldston

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  Mark R. Goldston

  	
   

  
	
   

  	
   

  	
   

  	
  Its:  Chairman, Chief Executive Officer and
  President

  
											

 

66

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