Document:

Exhibit
10.11

 

 

December 16,
1998

 

 

 

LEASE AGREEMENT BETWEEN

 

 

 

 

2855 E. COTTONWOOD
PARKWAY, L.C., as

 

Landlord

 

 

 

and

 

 

 

DISCOUNTSDIRECT,
as

 

Tenant

 

 

 

 

DATED
December 21, 1998

 

 

	
  PART I SUMMARY OF BASIC
  LEASE INFORMATION

  	
   

  
	
   

  	
   

  
	
  A

  	
  PREMISES
  (Lease Provisions, Paragraph 2):

  	
   

  
	
  B

  	
  LEASE
  TERM (Lease Provisions, Paragraph 3):

  	
   

  
	
  C

  	
  BASE
  RENT (Lease Provisions, Paragraph 5):

  	
   

  
	
  D

  	
  ADDITIONAL
  RENT (Lease Provisions, Paragraph 5.3):

  	
   

  
	
  E

  	
  SECURITY
  DEPOSIT (Glossary of Defined Terms):

  	
   

  
	
  F

  	
  PARKING
  CHARGE (Lease Provisions, Paragraph 5.5):

  	
   

  
	
  G

  	
  ADDRESSES
  FOR NOTICES (Lease Provisions, Paragraph 27.7):

  	
   

  
	
  H

  	
  TENANT IMPROVEMENTS:

  	
   

  
	
   

  	
   

  	
   

  
	
  PART II LEASE
  PROVISIONS 

  	
   

  
	
   

  	
   

  
	
  1.

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  PREMISES

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  TERM

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  USE

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  RENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Base Rent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
  No Other
  Adjustment of Base Rent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.3

  	
  Additional Rent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.4

  	
  Operating
  Expenses

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.5

  	
  Parking Charge

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.6

  	
  Payment of Rent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.7

  	
  Delinquent
  Payments and Handling Charge

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.8

  	
  Letter of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.9

  	
  Holding Over

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  CONSTRUCTION OF
  IMPROVEMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  General

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  Access
  by Tenant Prior to Commencement of Term

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.3

  	
  Commencement
  Date; Adjustments to Commencement Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  SERVICES TO BE
  FURNISHED BY LANDLORD

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  General

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  Keys and/or Access Cards

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.3

  	
  Tenant
  Identity, Signs and Other Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.4

  	
  Charges

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.5

  	
  Operating Hours

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  REPAIR
  AND MAINTENANCE

  	
   

  

 

 

2

 

	
   

  	
  8.1

  	
  By Landlord

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  By Tenant

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  TAXES ON TENANT’S
  PROPERTY

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  TRANSFER BY TENANT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  General

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.2

  	
  Conditions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.3

  	
  Liens

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.4

  	
  Assignments in
  Bankruptcy

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  ALTERATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  PROHIBITED USES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  General

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.2

  	
  Hazardous
  Materials

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.3

  	
  Overstandard Tenant Use

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  ACCESS BY LANDLORD

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  CONDEMNATION

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  CASUALTY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  15.1

  	
  General

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.2

  	
  Acts of Tenant

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  SUBORDINATION, NON–DISTURBANCE AND
  ATTORNMENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  16.1

  	
  General

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.2

  	
  Attornment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  INSURANCE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  17.1

  	
  General

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.2

  	
  Waiver
  of Subrogation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  TENANT’S INDEMNITY

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  THIRD
  PARTIES; ACTS OF FORCE MAJEURE; EXCULPATION

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  INTENTIONALLY LEFT BLANK

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  CONTROL OF COMMON AREAS

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  RIGHT TO RELOCATE

  	
   

  
	
   

  	
   

  	
   

  
	
  23.

  	
  QUIET ENJOYMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  24.

  	
  DEFAULT BY TENANT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  24.1

  	
  Events of Default

  	
   

  

 

 

3

 

	
   

  	
  24.2

  	
  Remedies
  of Landlord

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  24.3

  	
  Payment by Tenant

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  24.4

  	
  Reletting

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  24.5

  	
  Landlord’s
  Right to Pay or Perform

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  24.6

  	
  No Waiver; No
  Implied Surrender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
  DEFAULTS
  BY LANDLORD

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  RIGHT OF REENTRY

  	
   

  
	
   

  	
   

  	
   

  
	
  27.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  27.1

  	
  Independent
  Obligations; No Offset

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.2

  	
  Time of Essence

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.3

  	
  Applicable Law

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.4

  	
  Assignment by Landlord

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.5

  	
  Estoppel
  Certificates; Financial Statements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.6

  	
  Signs,
  Building Name and Building Address

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.7

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.8

  	
  Entire
  Agreement, Amendment and Binding Effect

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.9

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.10

  	
  Number
  and Gender, Captions and References

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.11

  	
  Attorneys’ Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.12

  	
  Brokers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.13

  	
  Interest on
  Tenant’s Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.14

  	
  Authority

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.15

  	
  Recording

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.16

  	
  Exhibits

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.17

  	
  Multiple Counterparts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.18

  	
  Survival of Indemnities

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27.19

  	
  Miscellaneous

  	
   

  

 

EXHIBITS

 

	
  Exhibit A:

  	
  Glossary of Defined Terms

  
	
  Exhibit B:

  	
  Description of Premises

  
	
  Exhibit C:

  	
  Building Rules and Regulations

  
	
  Exhibit D:

  	
  Intentionally Left Blank

  
	
  Exhibit D1:

  	
  Intentionally Left Blank

  
	
  Exhibit D2:

  	
  Intentionally Left Blank

  
	
  Exhibit E:

  	
  Legal Description of Land

  
	
  Exhibit F:

  	
  Intentionally Left Blank

  
	
  Exhibit G:

  	
  Acknowledgement of Lease Commencement
  Date

  
	
  Exhibit H:

  	
  Estoppel Certificate, Subordination,
  Non-Disturbance and Adornment Agreement

  
	
  Exhibit I:

  	
  Lease Guaranty

  

 

 

4

 

LEASE AGREEMENT

 

                THIS
LEASE AGREEMENT (the “Agreement”) is entered into as of the 21st day
of December, 1998, between 2855 E. COTTONWOOD PARKWAY, L.C. as Landlord,
and DISCOUNTSDIRECT, as Tenant.

 

PART I

SUMMARY
OF BASIC LEASE INFORMATION

 

                Each
reference in this Summary of Basic Lease Information to the Lease Provisions contained
in PART II shall be construed to incorporate all the terms provided in said
Lease Provisions, and reference in the Lease Provisions to the Summary
contained in this PART I shall be construed to incorporate the provisions of
this Summary.  In the event of any
conflict between the provisions of this Summary and the provisions in the
balance of the Lease, the latter shall control.  The basic terms of this Lease are as follows:

 

A.            PREMISES (Lease Provisions, Paragraph 2

 

1.             Premises
Location:  Suite 500, consisting of
approximately 6,370 square feet of Rentable Area (5,539 usable square feet),
located on the fifth floor of the Building (as outlined on the floor plan
attached to this Lease as Exhibit B), the street address of which is 2855
E. Cottonwood Parkway, as constructed on the Land which is further described on
Exhibit E hereto.  Tenant shall
lease the Premises as described above from December 15, 1998, through
August 31, 1999.  Beginning
September 1, 1999, and continuing throughout the remainder of the Lease
Term, the Premises (Suite 500) shall consist of approximately 12,507 square
feet of Rentable Area (10,876 usable square feet).

 

2.             Number
of Approximate Square Feet of Rentable Area in the Building: 
Approximately One Hundred Four Thousand Nine Hundred Seventy–Four
(104,974) square feet.

 

B.            LEASE TERM (Lease Provisions, Paragraph 3)

 

1.             Duration:  Five (5) years, Eleven (11) days.

 

2.             Lease
Commencement Date (Lease Provisions, Paragraph 6.3):  The earliest to occur of the following
events:  (a) the date of
Substantial Completion (as defined in the Work Letter Agreement) of the
Landlord’s Work, or (b) the date on which Landlord would have
substantially completed the Landlord’s Work and tendered possession of the
Premises to Tenant but for certain delays attributable to Tenant as provided in
Paragraph 6.3, or (c) the date on which Tenant takes possession of
the Premises.  Subject to the execution
and delivery of the Lease Agreement to Landlord by Tenant on or before
December 18, 1998, the Lease Commencement Date is scheduled to be
December 21, 1998.

 

3.             Lease
Expiration Date (Lease Provisions, Paragraph 3):  The last day of December, 2003, at 5:00 p.m., unless earlier
terminated as provided in this Lease.

 

C.            BASE RENT (Lease Provisions, Paragraph 5)

 

	
  Lease
  Year

  	
   

  	
  Monthly Base Rent

  	
   

  	
  Annual Base Rent

  	
   

  
	
  12/21/98 —
  12/31/98

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  l/l/99 — 4/30/99

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  72,000.00

  	
   

  
	
  5/l/99 — 8/31/99

  	
   

  	
  $

  	
  9,000.00

  	
   

  	
  $

  	
  108,000.00

  	
   

  
	
  9/l/99 —
  12/31/99

  	
   

  	
  $

  	
  23,190.00

  	
   

  	
  $

  	
  278,280.00

  	
   

  
	
  Year 2

  	
   

  	
  $

  	
  23,867.53

  	
   

  	
  $

  	
  286,410.30

  	
   

  
	
  Year 3

  	
   

  	
  $

  	
  24,544.99

  	
   

  	
  $

  	
  294,539.85

  	
   

  
	
  Year 4

  	
   

  	
  $

  	
  25,222.45

  	
   

  	
  $

  	
  302,669.40

  	
   

  
	
  Year 5

  	
   

  	
  $

  	
  25,899.91

  	
   

  	
  $

  	
  310,798.95

  	
   

  

 

 

5

 

D.            ADDITIONAL RENT (Lease Provisions, Paragraph 5.3)

 

1.             Base
Year (Lease Provisions, Paragraph 5.3.1): 
The Fiscal Year commencing January 1 through December 31,
1999.

 

2.             Tenant’s
Share (Lease Provisions, Paragraph 5.3.1):  Tenant’s Share for Tenant’s payment of Operating Expenses means
Five and 82/100 percent (5.82%) December 15, 1998, through August 31,
1999, and Eleven and 91/100 percent (11.91%) September 1, 1999, throughout
the remainder of the Lease Term.

 

E.             SECURITY DEPOSIT (Glossary of Defined Terms)

 

                Means
a Letter of Credit of Fifty Thousand and 00/100 Dollars ($50,000.00) to be
delivered to Landlord on or before February 17, 1999.  (See Lease Provisions, Paragraph 5.8.)

 

F.             PARKING CHARGE (Lease Provisions, Paragraph 5.5)

 

                Tenant
shall, December 15, 1998, through August 31, 1999, lease from
Landlord up to a total of twenty–one (21) automobile parking spaces, of
which total Tenant may elect to lease up to five (5) (assigned and covered
automobile parking spaces at an initial cost of Thirty and 00/100 Dollars
($30.00) per month per space.  Tenant
shall September 1, 1999, and throughout the remainder of the Term, lease
from Landlord up to a total of forty–four (44) automobile parking spaces,
of which total Tenant may elect to lease up to Eleven (11) assigned and covered
automobile parking spaces at an initial cost of Thirty and 00/100 Dollars
($30.00) per month per space.  The
remainder of the automobile parking spaces leased by Tenant which Tenant does
not elect to have assigned and covered shall be unassigned parking spaces at a
cost of Zero Dollars ($0.00) per month per space for the first five years of
the initial Term of the Lease.

 

G.            ADDRESSES FOR NOTICES (Lease Provisions,
Paragraph 27.7)

 

1.             Tenant’s
Address:

 

1.1           Before Lease Commencement Date:

 

Rob Brazell

6322 South 3000 East, Suite L201

Salt Lake City, UT 84124

 

1.2           After Lease Commencement Date:

 

Rob Brazell

2855 E. Cottonwood Parkway, Suite 500

Salt Lake City, UT 84121

 

2.             Landlord’s
Address:

 

2855 E. Cottonwood Parkway, L.C.

c/o John L. West

2855 E. Cottonwood Parkway, Suite 560

Salt Lake City, Utah 84121

 

3.             Address
of Landlord’s Lender or Mortgagee:

 

Teachers Insurance and Annuity

Association of America

730 Third Avenue

New York, NY 10017

 

H.            TENANT
IMPROVEMENTS

 

1.             Tenant
shall accept the Premises in an “as–is” condition with the following
exception:

 

 

6

 

                (a)           Prior to the Commencement Date Landlord shall construct a
demising wall that will divide Suites 500 into two suites (500 and 530 as shown
on Exhibit “B”).  On or before September 1, 1999,
Landlord shall remove said wall and restore Premises to its original condition
so tenant may occupy the entire Premises.

 

                Any
and all other Tenant Improvements shall be done at Tenant’s sole cost and
expense in accordance with the terms of the Lease Agreement.

 

 

7

 

PART II

LEASE
PROVISIONS

 

1.             DEFINITIONS.  The definitions of certain of the
capitalized terms used in this Lease are set forth in the Glossary of Defined
Terms attached as Exhibit A.

 

2.             PREMISES

 

                 Subject to the provisions of this Lease,
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the
premises described in the Summary of Basic Lease Information, Section “A”, as
outlined on the floor plan attached hereto as Exhibit B (the “Premises”).  In connection with such demise and subject to paragraph 21
herein, Landlord hereby grants to Tenant the nonexclusive right to use during
the Term, all Common Areas designed for the use of all tenants in the Building,
in common with all tenants in the Building and their invitees, for the purposes
for which the Common Areas are designed and in accordance with all Legal
Requirements.  Landlord, however, has
the sole discretion to determine the manner in which the Common Areas are
maintained and operated, and the use of the Common Areas shall be subject to
the Building Rules and Regulations. 
Tenant acknowledges that Landlord has made no representation or warranty
regarding the Building or Premises except as specifically stated in this
Lease.  By occupying the Premises,
Tenant accepts the Premises as being suitable for Tenant’s intended use of the
Premises.

 

3.             TERM.  The
provisions of this Lease shall be effective only as of the date this Lease is
executed by both Landlord and Tenant. 
The duration of the term of this Lease shall be for the period stated in
the Summary of Basic Lease Information, Section ”B,” commencing on the
Commencement Date set forth in paragraph 6.3 below, and expiring at 5:00
p.m. on the day stated in Section ”B” of the Summary of Basic Lease
Information, unless earlier terminated as provided herein (the “Term”).

 

4.             USE. 
Tenant shall occupy and use the Premises solely for lawful, general
business office purposes in strict compliance with the Building Rules and
Regulations from time to time in effect. 
Tenant shall, and Tenant agrees to cause its agents, servants,
employees, invitees and licensees to observe and comply fully and faithfully
with the Building Rules and Regulations attached hereto as Exhibit C, and
incorporated herein by this reference, or such modifications, rules and
regulations which may be hereafter adopted by Landlord for the care,
protection, cleanliness and operation of the Premises and Complex.  Tenant shall also comply with all Legal
Requirements and other restrictions on use of the Premises as provided in this
Lease, including, without limitation, paragraph 12 hereof.  The Landlord represents that the Premises
may be used for the permitted uses set forth herein.

 

5.             RENT

 

5.1           Base
Rent.  In consideration of Landlord’s leasing the
Premises to Tenant, Tenant shall pay to Landlord the base rent (“Base Rent”) at
the time(s) and in the manner stated in paragraph 5.6 below, as stated in
Section ”C” of the Summary of Basic Lease Information.

 

5.2           No Other Adjustment of Base Rent.  The stipulation of Rentable Area set forth
in paragraph 2 above and in the Summary of Basic Lease Information, shall
be conclusive and binding on the parties. 
Notwithstanding the foregoing, the Base Rent set forth in
paragraph 5.1 above and in the Summary of Basic Lease Information is a
negotiated amount and there shall be no adjustment to the Base Rent or
Additional Rent without the prior written consent of Landlord.  Tenant shall have no right to withhold,
deduct or offset any amount of the monthly Base Rent, Additional Rent or any
other sum due hereunder even if the actual rentable square footage or Rentable
Area of the Premises is less than set forth in paragraph 2 hereof.

 

5.3           Additional
Rent.  In addition to paying the Base Rent specified
in paragraph 5.1 above, Tenant shall pay as additional rent the Tenant’s
Share (as defined in subparagraph 5.3.1(b) below) of the Operating
Expenses (as defined in subparagraph 5.4 below) for each Fiscal Year, or
portion thereof, that are in excess of the amount of Operating Expenses
applicable to the Base Year (as defined in subparagraph 5.3.1(a)
below).  Said additional rent, together
with other amounts of any kind (other than Base Rent) payable by Tenant to
Landlord under 

 

 

8

 

the
terms of this Lease, shall be collectively referred to in this Lease as
“Additional Rent.”  Operating Expenses
which are normally and reasonably allocable to more than one Fiscal Year shall
be prorated and allocated over such period(s). 
All amounts due under this paragraph 5.3 as Additional Rent are
payable for the same periods and in the same manner, time and place as the Base
Rent as provided in paragraph 5.6 below. 
Without limitation on any other obligation of Tenant that may survive
the expiration of the Lease Term, Tenant’s obligations to pay the Additional
Rent provided for in this paragraph 5.3 shall survive the expiration of
the Lease Term.

 

5.3.1        Additional
Rent Definitions.  The following
definitions apply to this paragraph 5.4:

 

(a)           Base
Year.  “Base Year” means the Fiscal
Year commencing January 1 through December 31 of the year stated in
Section ”D” of the Summary of Basic Lease Information.

 

(b)           Tenant’s
Share.  “Tenant’s Share” for
Tenant’s payment of Operating Expenses means the percentage stated in
Section ”D” of the Summary of Basic Lease Information.  If the Premises or the Building is expanded
or reduced with the written consent of Landlord, the Tenant’s Share shall be
adjusted by written notice from Landlord to Tenant.

 

5.3.2        Calculation
and Payment of Additional Rent. 
Tenant’s Share of Operating Expenses for any Fiscal Year, or portion
thereof, shall be calculated and paid as follows:

 

(a)           Calculation
of Excess.  If Tenant’s Share of
Operating Expenses for any Fiscal Year, commencing with the Fiscal Year
immediately following the Base Year, exceeds Tenant’s Share of the amount of
Operating Expenses applicable to the Base Year, Tenant shall pay as Additional
Rent to Landlord an amount equal to that excess (the “Excess”) in the manner
stated in subparagraphs 5.3.2(b) and (c) below.

 

(b)           Statement
of Estimated Operating Expenses and Payment by Tenant.  On or before the last day of the Fiscal Year
in which the Lease Commencement Date occurs and for each Fiscal Year
thereafter, Landlord shall endeavor to deliver to Tenant an estimate statement
(the “Estimate Statement”) of Additional Rent to be due by Tenant for the
forthcoming Fiscal Year.  The Estimate
Statement will be based on good faith estimates, reasonably determined, and
will set forth in reasonable detail the calculation of estimated expenses and
Additional Rent.  Thereafter, unless
Landlord delivers to Tenant a revision of the Estimate Statement, Tenant shall
pay to Landlord monthly, coincident with Tenant’s payment of Base Rent, an
amount equal to the estimated Additional Rent set forth on the Estimate
Statement for such Fiscal Year divided by twelve (12) months.  From time to time during any Fiscal Year,
Landlord may estimate and re–estimate the Additional Rent to be due by
Tenant for that Fiscal Year and deliver a copy of the revised Estimate
Statement to Tenant.  Thereafter, the
monthly installments of Additional Rent payable by Tenant shall be
appropriately adjusted in accordance with the revised Estimate Statement so
that, by the end of any Fiscal Year, Tenant shall have paid all of the
Additional Rent as estimated by Landlord on the revised Estimate
Statement.  Landlord’s failure to
furnish the Estimate Statement for any Fiscal Year in a timely manner shall not
preclude Landlord from enforcing its rights to collect any Additional Rent.

 

(c)           Statement
of Actual Operating Expenses and Payment by Tenant.  Landlord shall endeavor to give to Tenant as
soon as available following the end of each Fiscal Year a statement (the
“Statement of Actual Operating Expenses”) stating the Operating Expenses
incurred or accrued for that preceding Fiscal Year and indicating the amount,
if any, of any Excess due to Landlord or overpayment by Tenant.  Landlord’s Statement of Actual Operating
Expenses will show in reasonable detail the amount and computation of Operating
Expenses for the applicable Fiscal Year, the amount of Tenant’s obligations
hereunder and application of Tenant’s estimated payments.  On receipt of the Statement of Actual
Operating Expenses for each Fiscal Year for which an Excess exists, Tenant
shall pay, with its next installment of Base Rent due, the full amount of the
Excess, less the estimated amounts (if any) paid during the Fiscal Year
pursuant to an Estimate Statement (as defined in subparagraph 5.3.2(b)
above).  In the event there is an
overpayment of Additional Rent set forth on a Statement of Actual Operating
Expenses for any Fiscal Year, the amount of overpayment shall be credited
against payments of Additional Rent as 

 

 

9

 

they
become due.  Landlord’s failure to
furnish the Statement of Actual Operating Expenses for any Fiscal Year in a
timely manner shall not prejudice Landlord from enforcing its rights
hereunder.  Even if the Lease Term is
expired and Tenant has vacated the Premises, if an Excess exists when final
determination is made of Tenant’s Share of the Operating Expenses for the
Fiscal Year in which the Lease terminates, Tenant shall immediately pay to
Landlord the amount calculated under this subparagraph (c).  Provisions of this subparagraph (c)
shall survive the expiration or earlier termination of the Lease Term.

 

5.4.          Operating
Expenses shall mean all
costs and expenses which Landlord pays or accrues by virtue of the ownership,
use, management, leasing, maintenance, service, operation, insurance or
condition of the Land and all improvements thereon, including, without
limitation, the Building and Parking Facility, during a particular Fiscal Year
or portion thereof as determined by Landlord or its accountant in accordance
with generally accepted accounting principles.

 

5.4.1        Examples.  “Operating Expenses” shall include, but
shall not be limited to, the following to the extent they relate to the Complex
or are chargeable to the Complex in connection with the operation and
maintenance of the Cottonwood Corporate Center generally:

 

(a)           all
Impositions and other governmental charges;

 

(b)           all
insurance premiums charged for policies obtained by Landlord, which may include
without limitation, at Landlord’s election, (i) fire and extended coverage
insurance, including earthquake, windstorm, hail, explosion, riot, strike,
civil commotion, aircraft, vehicle and smoke insurance, (ii) public
liability and property damage insurance, (iii) elevator insurance,
(iv) workers’ compensation insurance for the employees covered by clause
(h), (v) boiler, machinery, sprinkler, water damage, and legal liability
insurance, (vi) rental loss insurance, and (vii) such other insurance
as Landlord may elect to obtain;

 

(c)           all
deductible amounts incurred in any Fiscal Year relating to an insurable loss;

 

(d)           all
maintenance, repair, replacement, restoration and painting costs, including,
without limitation, the cost of operating, managing, maintaining and repairing
the following systems:  utility,
mechanical, sanitary, drainage, escalator and elevator;

 

(e)           all
janitorial, snow removal, custodial, cleaning, washing, landscaping, landscape
maintenance, access systems, trash removal, pest control costs and
environmental compliance costs;

 

(f)            all
security costs;

 

(g)           all
electrical, energy monitoring, water, water treatment, gas, sewer, telephone
and other utility and utility–related charges;

 

(h)           all
wages, salaries, salary burdens, employee benefits, payroll taxes, Social
Security and insurance for all persons engaged by Landlord or an Affiliate of
Landlord in connection with the Complex;

 

(i)            all
costs of leasing or purchasing supplies, tools, equipment and materials;

 

(j)            all
fees and assessments of the Cottonwood Corporate Center park applicable to the
Complex;

 

(k)           the
cost of licenses, certificates, permits and inspections;

 

(l)            the
cost of contesting the validity or applicability of any governmental enactments
that may affect the Operating Expenses;

 

(m)          the
costs incurred in connection with the implementation and operation of a
transportation system management program or similar program;

 

 

10

 

(n)           the
cost of Parking Facility maintenance, repair and restoration, including,
without limitation, resurfacing, repainting, restriping and cleaning;

 

(o)           all
fees and other charges paid under all maintenance and service agreements,
including but not limited to window cleaning, elevator and HVAC maintenance;

 

(p)           All
fees, charges, management fees (or amounts in lieu of such fees), consulting
fees, legal fees and accounting fees of all persons engaged by Landlord,
together with all other associated costs or other charges reasonably incurred
by Landlord in connection with the management office and the operation,
management, maintenance and repair of the Complex;

 

(q)           all
costs of monitoring services, including, without limitation, any monitoring or
control devices used by Landlord in regulating the Parking Facility;

 

(r)            amortization
of the cost of acquiring, financing and installing capital items which are
intended to reduce (or avoid increases in) operating expenses or which are
required by a governmental authority. 
Such costs shall be amortized over the reasonable life of the items in
accordance with generally accepted accounting principles, but not beyond the
reasonable life of the Building; and

 

(s)           any
other costs or expenses reasonably incurred by Landlord under this Lease which
are not otherwise reimbursed directly by Tenants.

 

5.4.2        Adjustments.  Operating Expenses shall be adjusted as
follows:

 

(a)           Exclusions.  “Operating Expenses” shall not include
(i) expenditures classified as capital expenditures for federal income tax
purposes except as set forth in clause 5.4.1(r), (ii) costs for which
Landlord is entitled to specific reimbursement by Tenant, by any other tenant
of the Building or by any other third party, (iii) allowances specified in
the Work Letter for expenses incurred by Landlord for improvements to the
Premises, (iv) leasing commissions, and all noncash expenses (including
depreciation), except for the amortized costs specified in clause 5.4.1(r),
(v) land or ground rent, if applicable, and (vi) debt service on any indebtedness
secured by the Complex (except debt service on indebtedness to purchase or pay
for items specified as permissible “Operating Expenses”).  Operating Expenses shall not exceed the
reasonable, customary and ordinary cost for such items.

 

(b)           Gross–Up
Adjustments.  If the occupancy of
the Building during any part of any Fiscal Year (including the Base Year) is
less than ninety–five percent (95%), Landlord shall make an appropriate
adjustment of the Operating Expenses for that Fiscal Year, as reasonably
determined by Landlord using sound accounting and management principles, to
determine the amount of Operating Expenses that would have been incurred had
the Building been ninety–five percent (95%) occupied.  This amount shall be considered to have been
the amount of Operating Expenses for that Fiscal Year.

 

5.4.3        Landlord’s
Books and Records.  If Tenant
disputes the amount of the Additional Rent due hereunder, Tenant may designate,
within thirty (30) days after receipt of the Statement of Actual Operating
Expenses, an independent public certified accountant or qualified third–party
management company to inspect Landlord’s records.  Tenant is not entitled to request that inspection, however, if
Tenant is then in default under this Lease. 
The accountant must be a member of a nationally recognized accounting
firm and must not charge a fee based on the amount of Additional Rent that the
accountant is able to save Tenant by the inspection.  Any inspection must be conducted in Landlord’s offices at a
reasonable time or times.  If, after
such an inspection, Tenant still disputes the Additional Rent, a certification
of the proper amount shall be made, at Tenant’s sole expense, by an independent
certified public accountant designated by Landlord.  That certification shall be final and conclusive.  If as a result of such audit and
certification, it is determined that Tenant was overcharged by more than seven
percent (7%) during any period covered by such audit and certification, then
Landlord will pay the costs and expenses of such audit.

 

5.5.          Parking
Charge.  Tenant shall throughout the Term, lease from
Landlord the number of unassigned and assigned automobile parking spaces, at
such prices per month, as stated in Section ”F” of the Summary of Basic
Lease Information.  Such monthly parking
charges shall be 

 

 

11

 

considered
Additional Rent and shall be due and payable without notice or demand, on or
before the first day of each calendar month. 
Landlord shall have the right from time to time during the Lease Term
and during each Extension Renewal Term (if applicable), to increase the monthly
parking charges for assigned parking spaces to the then prevailing market
rate.  From time to time after five (5)
years from the Commencement Date, the Landlord shall also have the right to
increase the monthly parking charges for unassigned parking spaces to the
prevailing market rate.  Landlord shall
also have the right to establish such reasonable rules and regulations as may
be deemed desirable, at Landlord’s reasonable discretion, for the proper and
efficient operation and maintenance of said Parking Facility.  Such rules and regulations may include,
without limitation, (i) restrictions in the hours during which the Parking
Facility shall be open for use, (ii) subject to the provisions of this
paragraph 5.5 above, the establishment of charges for parking therein, and
(iii) the use of parking gates, cards, permits and other control devices
to regulate the use of the parking areas. 
The rights of Tenant and its employees, customers, service suppliers and
invitees to use the Parking Facility shall, to the extent such rules and
regulations are not inconsistent with the other terms of this Lease, at all
times be subject to (a) Landlord’s right to establish rules and
regulations applicable to such use and to exclude any person therefrom who is
not authorized to use the same or who violates such rules and regulations;
(b) the rights of Landlord and other tenants in the Building to use the
same in common with Tenant; (c) other than with respect to Tenant’s
assigned parking spaces, the availability of parking spaces in said Parking
Facility; and (d) Landlord’s right to change the configuration of the
parking areas and any unassigned parking spaces as shall be determined at
Landlord’s reasonable discretion. 
Tenant agrees to limit its use of the Parking Facility to the number and
type of parking spaces specified in this paragraph above.  Notwithstanding the foregoing, nothing
contained herein shall be deemed to impose liability upon Landlord for personal
injury or theft, for damage to any motor vehicle, or for loss of property from
within any motor vehicle, which is suffered by Tenant or any of its employees,
customers, service suppliers or other invitees in connection with their use of
the Parking Facility.  Tenant
understands and agrees that, while the Parking Facility will be open to Tenant
on a 24–hour basis, other than spaces that are assigned for Tenant and
other tenants, all parking spaces in the parking area may be leased to members
of the general public between the hours of 6:30 p.m. through 7:00 a.m. Monday
through Saturday morning, after 1:30 p.m. on Saturday, and all day on Sunday.

 

5.6           Payment
of Rent.  Except as otherwise expressly provided in
this Lease, all Base Rent and Additional Rent shall be due in advance monthly
installments on the first day of each calendar month during the Term.  Rent shall be paid to Landlord at its
address recited in Section 27.7, or to such other person or at such other
address as Landlord may from time to time designate in writing.  Rent shall be paid without notice, demand,
abatement, deduction or offset in legal tender of the United States of America.  The Base Rent for the first full calendar
month of the Lease Term shall be paid upon execution by Tenant of this
Lease.  In addition, if the Term
commences or ends on other than the first or the last day of a calendar month,
the Base Rent for the partial month shall be prorated on the basis of the
number of days during the applicable month and paid on or before the Lease
Commencement Date.  If the Lease Term
commences or ends on other than the first or the last day of a Fiscal Year, the
Additional Rent for the partial Fiscal Year calculated as provided in
paragraph 5.3 above shall be prorated on the basis of the number of days
during the applicable Fiscal Year.  All
payments received by Landlord from Tenant shall be applied to the oldest
payment obligation owed by Tenant to Landlord. 
No designation by Tenant, either in a separate or on a check or money
order, shall modify this clause or have any force or effect.  The Rent to be paid by Tenant or any
Transferee hereunder shall not be based, in whole or in part, on the income or
profits derived from the lease, use or occupancy of the Premises.  In the event Landlord’s Mortgagee succeeds
to the Landlord’s interests under this Lease and determines that all or any
portion of the Rent payable hereunder is or may be deemed to be unrelated
business income within the meaning of the United States Internal Revenue Code
or regulations issued thereunder, Landlord’s Mortgagee may elect unilaterally
to amend the calculation of Rent such that none of the Rent payable under this
Lease will constitute unrelated business income; provided, however, that any
such amendment shall not increase Tenant’s payment obligations or other
liabilities, or reduce the obligations of Landlord, under this Lease.

 

5.7           Delinquent Payments and Handling Charge.  All Rent and other payments required of
Tenant hereunder shall bear interest from the date due until the date paid at
the rate of interest specified in Section 27.13.  In addition, if any Base Rent, Additional Rent or other payments
required of Tenant hereunder are not received by Landlord when due, Tenant
shall pay to Landlord a 

 

 

12

 

late
charge of five percent (5%) of the delinquent payment to reimburse Landlord for
its costs and inconvenience incurred as a consequence of Tenant’s delinquency
(other than interest, attorneys’ fees and costs).  Tenant shall pay this amount for each calendar month in which all
or any part of any delinquent payment remains delinquent after its due date.  The parties agree that this late charge
represents a reasonable estimate of the expenses that Landlord will incur
because of any late payment (other than interest, attorneys’ fees and
costs).  Landlord’s acceptance of any
late charge shall not constitute a waiver of Tenant’s default with respect to
the overdue amount or prevent Landlord from exercising any of the rights and
remedies available to Landlord under this Lease.  Tenant shall pay the late charge as Additional Rent with the next
installment of Additional Rent.  In no
event, however, shall the charges permitted under this Section 5.7 or
elsewhere in this Lease, to the extent the same are considered to be interest
under applicable law, exceed the maximum rate of interest allowable under
applicable law.  If any two noncash
payments made by Tenant are not paid by the bank or other institution on which
they are drawn, Landlord shall have the right, exercised by notice to Tenant,
to require that Tenant make all future payments by certified funds or cashier’s
check.

 

5.8           Letter
of Credit.  In addition to the foregoing, on or before
February 17, 1999, Tenant shall provide Landlord an irrevocable letter of
credit in the aggregate amount of $50,000 (“Letter of Credit”) in a form and
from a financial institution (the “Issuing Bank”) satisfactory to Landlord, in its
sole discretion, unconditionally payable to Landlord upon presentation as
security for the faithful performance by Tenant under this Lease.  At a minimum, the Letter of Credit shall be
valid for successive one year periods, automatically renewed on each anniversary
date of the Letter of Credit during the Term of this Lease unless, thirty (30)
days prior to any expiration date, Tenant and the Issuing Bank provide Landlord
with written notice, in the manner provided in Section 27.7 of this
Agreement, that the Letter of Credit will not be renewed for any reason.  Notwithstanding the foregoing, in the event
(i) Tenant fails to timely pay or perform any obligation under this Lease
or (ii) the Letter of Credit is not renewed at least thirty (30) days
prior to any annual or other expiration date during the Term of this Lease,
Landlord may, prior to, concurrently with, in addition to or subsequent to
exercising any other right or remedy, draw upon the Letter of Credit for the
payment of any monetary obligation due under this Lease, or to compensate
Landlord for any other expense, loss or damage which Landlord may incur by
reason of Tenant’s failure to fully perform its obligations hereunder.  The Letter of Credit is not a limitation on
Landlord’s damages or other rights under this Lease, and shall not be applied
by Tenant to the Rent for the last (or any) month of the Term, or to any other
amount due under this Lease.  If this
Lease is terminated due to any default of Tenant or if the Letter of Credit is
not renewed as provided herein, the Landlord shall be authorized and entitled
to draw on the Letter of Credit as partial or whole compensation, as the case
may be, for the costs and expenses incurred by Landlord in connection with this
Lease, and such action shall be in addition to any other damages or remedy to
which Landlord is otherwise entitled. 
Without in any way limiting the foregoing, Landlord may draw on the
Letter of Credit up to and including any expiration date, whether or not notice
has been provided to Landlord that the Letter of Credit will not be renewed.

 

5.9           Holding
Over.  Any holding over by Tenant in the possession
of the Premises, or any portion thereof, after the expiration of the Term, with
or without the consent of Landlord, shall require Tenant to pay one hundred
fifty percent (150%) of the Base Rent and Additional Rent herein specified for
the last month of the Term (prorated on a monthly basis), unless Landlord shall
specify a lesser amount for Rent in its sole discretion.  If Tenant holds over with Landlord’s
consent, such occupancy shall be deemed a month–to–month tenancy
and such tenancy shall otherwise be on the terms and conditions herein
specified in this Lease as far as applicable. 
Notwithstanding the foregoing provisions or the acceptance by Landlord
of any payment by Tenant, any holding over without Landlord’s consent shall
constitute a default by Tenant and shall entitle Landlord to pursue all
remedies provided in this Lease, or otherwise, and Tenant shall be liable for
any and all direct or consequential damages or losses of Landlord resulting
from Tenant’s holding over without Landlord’s consent.

 

6.             CONSTRUCTION OF IMPROVEMENTS.

 

6.1           General.  Subject to events of Force Majeure, Landlord
and Tenant agree that Landlord shall construct, install, furnish, perform and
supply the Tenant Improvements in 

 

 

13

 

 

accordance
with Paragraph H.1. of Summary of Basic Lease Information.  The Tenant Improvements shall meet or exceed
the Building Standard Tenant Improvements.

 

6.2           Access by Tenant Prior to Commencement of Term.  Provided that Tenant obtains and delivers to
Landlord the certificates or policies of insurance called for in
Section 17.1, Landlord, in its sole discretion, may permit Tenant and its
employees, agents, contractors and suppliers to enter the Premises before the
Lease Commencement Date (and such entry alone shall not constitute Tenant’s
taking possession of the Premises for the purpose of Section 6.3(c)
below), to perform certain work on the Premises on behalf of Tenant not
contrary to the provisions of the Work Letter Agreement.  Tenant and each other person or firm who or
which enters the Premises before the Commencement Date shall conduct itself so
as to not interfere with Landlord or other occupants of the Building.  Landlord may withdraw any permission granted
under this Section 6.2 upon twenty–four (24) hours’ notice to Tenant
if Landlord, in its sole discretion, determines that any such interference has
been or may be caused.  Any prior entry
shall be under all of the terms of this Lease (other than the obligation to pay
Base Rent and Additional Rent) and at Tenant’s sole risk.  Tenant hereby releases and agrees to
indemnify Landlord and Landlord’s contractors, agents, employees and
representatives from and against any and all personal injury, death or property
damage (including damage to any personal property which Tenant may bring into,
or any work which Tenant may perform in, the Premises) which may occur in or
about the Complex in connection with or as the result of said entry by Tenant
or its employees, agents, contractors and suppliers.

 

6.3           Commencement Date; Adjustments to Commencement Date.  For purposes of this Lease, the “Commencement Date” shall mean the
earliest to occur of the following events (the “Lease Commencement
Events”):  (a) the date of
Substantial Completion of the Landlord’s Work, or (b) the date on which
Landlord would have substantially completed the Landlord’s Work and tendered
possession of the Premises to Tenant but for (i) the delay or failure of
Tenant to furnish information, approvals or other matters required in the Work
Letter Agreement, (ii) Tenant’s request for changes in the Space Plan (as
defined in the Work Letter Agreement) from Building Standard Tenant
Improvements, or (iii) any other action or inaction of Tenant, or any
person or firm employed or retained by Tenant or (c) the date on which
Tenant takes possession of the Premises. 
The Lease Commencement Date is scheduled to be as stated in Section ”B”
of the Summary of Basic Lease Information. 
Upon the occurrence of the Commencement Date, the parties will execute
and deliver a certificate in the form of Exhibit G attached hereto stating
and acknowledging the Commencement Date. 
If by the scheduled Commencement Date specified in this paragraph there
is not Substantial Completion of the Tenant Improvements for any reason, and
such failure to substantially complete renders the Premises untenantable for
their intended purpose, all as reasonably determined by Landlord, or Landlord
is unable to tender possession of the Premises to Tenant, then the Landlord may
elect (in addition to all other remedies available to Landlord) to postpone the
Commencement Date until the earliest to occur of the Lease Commencement
Events.  Such postponement shall extend
the scheduled expiration of the Term for a number of days equal to the
postponement.  Whether or not Landlord
makes such an election and notwithstanding any provision in this Lease or any
exhibit to the contrary, the potential postponement of the payment of Base Rent
and Additional Rent shall be Tenant’s sole and exclusive remedy for Landlord’s
delay in completing the Landlord’s Work, the Tenant Improvements or tendering
possession of the Premises to Tenant.  The
Landlord shall not be subject to any liability, including, without limitation,
lost profits or incidental or consequential damages for any delay or inability
to deliver possession of the Premises to the Tenant.  Such a delay or failure shall not affect the validity of this
Lease or the obligations of the Tenant hereunder, other than the postponement
of the Lease Term.

 

7.             SERVICES TO BE FURNISHED BY LANDLORD.

 

7.1           General.  Subject to applicable Legal Requirements,
governmental standards for energy conservation, and Tenant’s performance of its
obligations hereunder, Landlord shall use all reasonable efforts to furnish the
following services:

 

(a)           HVAC
to the Premises during Building Operating Hours, at such temperatures and in
such amounts as are considered by Landlord to be suitable and standard [thus
excluding air conditioning or heating for electronic data processing or other
specialized equipment or specialized (nonstandard) Tenant requirements];

 

 

14

 

(b)           hot
and cold water at those points of supply common to all floors for lavatory and
drinking purposes only;

 

(c)           janitorial
service and periodic window washing in and about the Building and the Premises,
anticipated to be accomplished approximately every 3 or 4 months for outside
windows and every 2 or 3 months for inside windows;

 

(d)           elevator
service, if necessary, to provide access to and egress from the Premises;

 

(e)           electric
current during Building Operating Hours for normal office machines and other
machines of low electrical consumption (which shall exclude electric current
for electronic data processing equipment, lighting in excess of Building
Standard, or any other item of electrical equipment which singly consumes more
than 0.5 kilowatts per hour at rated capacity or requires a voltage other than
120 volts single phase); and

 

(f)            replacement
of fluorescent lamps in Building Standard light fixtures installed by Landlord
and of incandescent bulbs or fluorescent lamps in all public rest rooms, stairwells
and other Common Areas in the Building.

 

                If any of the services described above or elsewhere
in this Lease are interrupted, Landlord shall use reasonable diligence to
promptly restore the same; provided, however, if as a result of any
interruption of services the Premises will be uninhabitable or unusable by
Tenant for five (5) consecutive business days, then Base Rent shall be abated
to the extent to which such condition interferes with Tenant’s use of the
Premises commencing on the first day of such condition and continuing until
such condition is corrected.  However,
neither the interruption nor cessation of such services, nor the failure of
Landlord to restore same, shall render Landlord liable for damages to person or
property, or be construed as an eviction of Tenant, or work an abatement of
Rent or relieve Tenant from fulfilling any of its other obligations hereunder.

 

                If not previously installed, Landlord may cause an
electric and/or water meter(s) to be installed in the Premises of the Tenant in
order to measure the amount of electricity and/or water consumed for any such
use, and the cost of such meter(s) shall be paid promptly by Landlord.

 

                Certain security measures (both by electronic
equipment and personnel) may be provided by Landlord in connection with the
Building.  However, Tenant hereby
acknowledges that any such security is intended to be solely for the benefit of
the Landlord and protecting its property, and while certain incidental benefits
may accrue to the Tenant therefrom, any such security is not for the purpose of
protecting either the property of Tenant or the safety of its employees, agents
or invitees.  By providing any such
security, Landlord assumes no obligation to Tenant and shall have no liability
arising therefrom.

 

7.2           Keys and/or Access Cards.  Landlord shall furnish Tenant, at Landlord’s expense, with two
keys and access cards, and at Tenant’s expense with such additional keys and
access cards as Tenant may request, to unlock or allow access to the Building
and each corridor door entering the Premises. 
Tenant shall not install, or permit to be installed, any additional lock
on any door into or in the Premises or make, or permit to be made, any
duplicates of keys or access cards to the Premises without Landlord’s prior
consent.  Landlord shall be entitled at
all times to possession of a duplicate of all keys and access cards to all
doors to or inside of the Premises.  All
keys and access cards referred to in this Section 7.2 shall remain the
property of the Landlord.  Upon the
expiration or termination of the Term, Tenant shall surrender all such keys and
access cards to Landlord and shall deliver to Landlord the combination to all
locks on all safes, cabinets and vaults which will remain in the Premises.  Landlord shall be entitled to install,
operate and maintain a card reader and after-hours access card system, security
systems and other control devices in or about the Premises and the Complex
which regulate entry into the Building (or portions thereof) and monitor, by
closed circuit television or otherwise, all persons leaving or entering the
Complex, the Building and the Premises.

 

 

15

 

7.3           Tenant Identity, Signs and Other Matters.  Landlord shall provide and install, in
Building Standard graphics, letters or numerals identifying Tenant’s name and
suite number adjacent to Tenant’s entry door at one location per floor of the
Building occupied by Tenant.  Tenant’s
name, as set forth on the first page of this Lease, or as otherwise provided by
Tenant in writing upon execution of this Lease, shall also be placed in the
Building Directory located on the main level of the Building.  Any subsequent modification to the listing
of Tenant’s name in the Building Directory shall be at Tenant’s cost.  Without Landlord’s prior written consent, no
other signs, numerals, letters, graphics, symbols or marks identifying Tenant
shall be placed on the exterior, or in the interior if they are visible from
the exterior, of the Premises.

 

                Tenant shall not place or suffer to be placed on any
exterior door, wall or window of the Premises, on any part of the inside of the
Premises which is visible from outside of the Premises, or elsewhere on the
Complex, any sign, decoration, notice, logo, picture, lettering, attachment,
advertising matter or other thing of any kind, without first obtaining
Landlord’s prior written approval, which Landlord may, in its discretion, grant
or withhold.  Landlord may, at Tenant’s
cost, and without notice or liability to Tenant, enter the Premises and remove
any item erected in violation of this Section. 
Landlord may establish rules and regulations governing the size, type
and design of all such items and Tenant shall abide by such rules and
regulations.

 

7.4           Charges.  Tenant shall pay to Landlord monthly as
billed, as Additional Rent, such charges as may be separately metered or as
Landlord may compute for (a) any utility services utilized by Tenant for
computers, data processing equipment or other electrical equipment in excess of
that agreed to be furnished by Landlord pursuant to Section 7.1,
(b) lighting installed in the Premises in excess of Building Standard
lighting, (c) HVAC and other services in excess of that stated in
Section 7.1(a) or provided at times other than Building Operating Hours,
and (d) janitorial services required with respect to Above Standard Tenant
Improvements within the Premises.  If
Tenant wishes to use HVAC, electrical or other utility services to the Premises
during hours other than Building Operating Hours, Landlord shall supply such
HVAC, electrical and utility services at an hourly cost to Tenant of $17.50 per
suite, as adjusted from time to time by Landlord consistent with prevailing
market charges for such use.  Landlord
may utilize a lighting and utility occupancy sensor in order to automatically
determine and control use of HVAC, electrical and other utility services.  Landlord may elect to estimate the charges
to be paid by Tenant under this Section 7.4 and bill such charges to Tenant
monthly in advance, in which event Tenant shall promptly pay the estimated
charges.  When the actual charges are
determined by Landlord, an appropriate cash adjustment shall be made between
Landlord and Tenant to account for any underpayment or overpayment by Tenant.

 

7.5           Operating
Hours.  Subject to Building Rules and Regulations
and such security standards as Landlord may from time to time adopt, the
Building shall be open to the public during the Building Operating Hours and
the Premises shall be open to Tenant during hours other than Building Operating
Hours.

 

8.             REPAIR AND MAINTENANCE.

 

8.1           By
Landlord.  Landlord shall provide the services to the
Premises set forth in paragraph 7.1 above and shall maintain the Building
(excepting the Premises and portions of the Building leased by persons not
affiliated with Landlord) in a good and operable condition, making such repairs
and replacements as may be required to maintain the Building in such
condition.  This Section 8.1 shall
not apply to damage resulting from a Taking (as to which Section 14 shall
apply), or damage resulting from a casualty (as to which Section 15.1
shall apply), or to damage for which Tenant is otherwise responsible under this
Lease.  Tenant hereby waives and
releases any right it may have to make repairs to the Premises or Building at
Landlord’s expense under any law, statute, ordinance, rules and regulations now
or hereafter in effect in any jurisdiction in which the Building is located.

 

8.2           By
Tenant.  Tenant, at Tenant’s sole cost, shall
maintain the Premises and every part of the Premises (including, without
limitation, all floors, walls and ceilings and their coverings, doors and
locks, furnishings, trade fixtures, signage, leasehold improvements, equipment
and other personal property from time to time situated in or on the Premises)
in good order, 

 

 

16

 

condition
and repair, and in a clean, safe, operable, attractive and sanitary
condition.  Tenant will not commit or
allow to remain any waste or damage to any portion of the Premises.  Tenant shall repair or replace, subject to
Landlord’s direction and supervision, any damage to the Complex caused by
Tenant or Tenant’s agents, contractors or invitees.  If Tenant fails to make such repairs or replacements, Landlord
may make the same at Tenant’s cost. 
Such cost shall be payable to Landlord by Tenant on demand as Additional
Rent.  All contractors, workmen, artisans
and other persons which or whom Tenant proposes to retain to perform work in
the Premises (or the Complex, pursuant to the second sentence of this
Section 8.2) pursuant to this Section 8.2 or Section 11 shall be
approved by Landlord, in Landlord’s sole discretion, prior to the commencement
of any such work.

 

9.             TAXES ON TENANT’S PROPERTY.  Tenant shall be liable for and shall pay,
before they become delinquent, all taxes and assessments levied against any
personal property placed by Tenant in the Premises (even if same becomes a
fixture by operation of law or the property of Landlord by operation of this
Lease), including any additional Impositions which may be assessed, levied,
charged or imposed against Landlord or the Building by reason of non–Building
Standard Items in the Premises.  Tenant
may withhold payments of any taxes and assessments described in this
Section 9 so long as Tenant contests its obligation to pay in accordance
with applicable law and the nonpayment thereof does not pose a threat of loss
or seizure of the Building or any interest of Landlord therein.

 

10.           TRANSFER BY TENANT.

 

10.1         General.  Tenant shall not directly or indirectly,
voluntarily or by operation of law, sell, assign, encumber, pledge or otherwise
Transfer or hypothecate all or any part of the Premises or Tenant’s leasehold
estate hereunder, or permit the Premises to be occupied by anyone other than
Tenant or sublet the Premises or any portion thereof without Landlord’s prior
written consent in Landlord’s discretion (such consent not to be unreasonably
withheld), being obtained in each instance, subject to the terms and conditions
contained in this paragraph.  Any
attempted Transfer without such consent shall be void.  If Tenant desires to effect a Transfer, it
shall deliver to Landlord written notice thereof in advance of the date on
which Tenant proposes to make the Transfer, together with all of the terms of
the proposed Transfer and the identity of the proposed Transferee.  Upon request by Landlord, such notice shall
contain financial information concerning the proposed Transferee and other
reasonable information regarding the transaction which Landlord may
specify.  Landlord shall have thirty
(30) days following receipt of the notice and information within which to
notify Tenant in writing whether Landlord elects (a) to refuse to consent
to the Transfer and to terminate this Lease as to the space proposed to be
Transferred as of the date so specified by Tenant, in which event Tenant will
be relieved of all further obligations hereunder as to such space, (b) to
refuse to consent to the Transfer and to continue this Lease in full force as
to the entire Premises, or (c) to permit Tenant to effect the proposed
Transfer.  If Landlord fails to notify
Tenant of its election within said thirty (30) day period, Landlord shall be
deemed to have elected option (b). 
Notwithstanding the foregoing, if Landlord elects Option (a), Tenant may
rescind its request for consent or approval by giving written notice of such
rescission within five (5) days after receipt of notice of Landlord’s election
of option (a) and, in such event, Tenant’s request for consent or approval
will be withdrawn and Landlord’s election of option (a) will be void and
of no effect.  The consent by Landlord
to a particular Transfer shall not be deemed a consent to any other
Transfer.  If a Transfer occurs without
the prior written consent of Landlord as provided herein, Landlord may
nevertheless collect rent from the Transferee and apply the net amount
collected to the Rent payable hereunder, but such collection and application
shall not constitute a waiver of the provisions hereof or a release of Tenant
from the further performance of its obligations hereunder.

 

10.2         Conditions. 
The following conditions shall automatically apply to each Transfer,
without the necessity of same being stated or referred to in Landlord’s written
consent:

 

(a)           Tenant
shall execute, have acknowledged and deliver to Landlord, and cause the
Transferee to execute, have acknowledged and deliver to Landlord, an instrument
in form and substance acceptable to Landlord in which (i) the Transferee
adopts this Lease and agrees to perform, jointly and severally with Tenant, all
of the obligations of Tenant hereunder, as to the space Transferred to it,
including, without limitation, the prohibition against rent based on the income
or profits derived from the Premises (any purported lease to the contrary being

 

 

17

 

null and
void), (ii) the Transferee grants Landlord an express first and prior
security interest in its personal property brought into the transferred space
to secure its obligations to Landlord hereunder, (iii) Tenant subordinates
to Landlord’s statutory lien and security interest any liens, security
interests or other rights which Tenant may claim with respect to any property
of the Transferee, (iv) Tenant agrees with Landlord that, if the rent or
other consideration due by the Transferee exceeds the Rent for the transferred
space, then Tenant shall pay Landlord as Additional Rent hereunder all such
excess Rent and other consideration immediately upon Tenant’s receipt thereof,
(v) Tenant and the Transferee agree to provide to Landlord, at their
expense, direct access from a public corridor in the Building to the
transferred space, (vi) the Transferee agrees to use and occupy the
Transferred space solely for the purpose specified in Section 4 and
otherwise in strict accordance with this Lease, and (vii) Tenant
acknowledges that, notwithstanding the Transfer, Tenant remains directly and
primarily liable for the performance of all the obligations of Tenant hereunder
(including, without limitation, the obligation to pay all Rent), and Landlord
shall be permitted to enforce this Lease against Tenant or the Transferee, or
all of them, without prior demand upon or proceeding in any way against any
other persons; and

 

(b)           Tenant
shall deliver to Landlord a counterpart of all instruments relative to the
Transfer executed by all parties to such transaction (except Landlord).

 

(c)           If
Tenant requests Landlord to consent to a proposed Transfer, Tenant shall pay to
Landlord, whether or not consent is given, Landlord’s costs, including, without
limitation, reasonable attorneys’ fees incurred in connection with such
request.

 

10.3         Liens.  Without in any way limiting the generality
of the foregoing, Tenant shall not grant, place or suffer, or permit to be
granted, placed or suffered, against the Complex or any portion thereof, any
lien, security interest, pledge, conditional sale contract, claim, charge or
encumbrance (whether constitutional, statutory, contractual or otherwise) and,
if any of the aforesaid does arise or is asserted, Tenant will, promptly upon
demand by Landlord and at Tenant’s expense, cause the same to be released.

 

10.4         Assignments
in Bankruptcy.  If this Lease is assigned to any person or
entity pursuant to the provisions of the Bankruptcy Code, 11 U.S.C. § 101 et
seq. (the “Bankruptcy Code”), any and all monies or other consideration
payable or otherwise to be delivered in connection with such assignment shall
be paid or delivered to Landlord, shall be and remain the exclusive property of
Landlord and shall not constitute property of Tenant or of the Estate of Tenant
within the meaning of the Bankruptcy Code.

 

11.           ALTERATIONS.  Tenant shall not make (or permit to be made) any change, addition
or improvement to the Premises (including, without limitation, the attachment
of any fixture or equipment) unless such change, addition or improvement
(a) equals or exceeds the Building Standard and utilizes only new and
first–grade materials, (b) is in conformity with all Legal
Requirements, and is made after obtaining any required permits and licenses,
(c) is made with the prior written consent of Landlord, (d) is made
pursuant to plans and specifications approved in writing in advance by
Landlord, (e) is made after Tenant has provided to Landlord such
indemnification and/or bonds requested by Landlord, including, without
limitation, a performance and completion bond in such form and amount as may be
satisfactory to Landlord to protect against claims and liens for labor
performed and materials furnished, and to insure the completion of any change,
addition or improvement (f) is carried out by persons approved in writing
by Landlord who, if required by Landlord, deliver to Landlord before commencement
of their work proof of such insurance coverage as Landlord may require, with
Landlord named as an additional insured, and (g) is done only at such time
and in such manner as Landlord may reasonably specify.  All such alterations, improvements and
additions (including all articles attached to the floor, wall or ceiling of the
Premises) shall become the property of Landlord and shall, at Landlord’s
election, be (i) surrendered with the Premises as part thereof at the
termination or expiration of the Term, without any payment, reimbursement or
compensation therefor, or (ii) removed by Tenant, at Tenant’s expense,
with all damage caused by such removal repaired by Tenant.  Tenant may remove Tenant’s trade fixtures,
office supplies, movable office furniture and equipment not attached to the
Building, provided such removal is made prior to the expiration of the Term, no
uncured Event of Default has occurred and Tenant promptly repairs all damage
caused by such removal.  Tenant shall
indemnify, defend and hold harmless Landlord from and against all liens,
claims, damages, losses, liabilities and 

 

 

18

 

expenses,
including attorneys’ fees, which may arise out of, or be connected in any way
with, any such change, addition or improvement.  Within ten (10) days following the imposition of any lien
resulting from any such change, addition or improvement, Tenant shall cause
such lien to be released of record by payment of money or posting of a proper
bond.

 

12.           PROHIBITED USES.

 

12.1         General.  Tenant will not (a) use, occupy or
permit the use or occupancy of the Complex or Premises for any purpose or in
any manner which is or may be, directly or indirectly, violative of any Legal
Requirement, or contrary to Building Rules and Regulations, or dangerous to
life or property, or a public or private nuisance, or disrupt, obstruct or
unreasonably annoy the owners or any other tenant of the Building or adjacent
buildings, (b) keep or permit to be kept any substance in, or conduct or
permit to be conducted any operation from, the Premises which might emit
offensive odors or conditions into other portions of the Building, or make
undue noise or create undue vibrations, (c) commit or permit to remain any
waste to the Complex or Premises, (d) install or permit to remain any
improvements to the Complex or Premises, window coverings or other items (other
than window coverings which have first been approved by Landlord) which are
visible from the outside of the Premises, or exceed the structural loads of
floors or walls of the Building, or adversely affect the mechanical, plumbing
or electrical systems of the Building, or affect the structural integrity of
the Building in any way, (e) permit the occupancy of the Premises at any
time during the Lease Term to exceed one person (including visitors) per two
hundred (200) square feet Rentable Area of space in the Premises,
(f) violate any recorded covenants, conditions or restrictions that now or
later affect the Complex or Building, or (g) commit or permit to be
committed any action or circumstance in or about the Complex or Building which,
directly or indirectly, would or might justify any insurance carrier in
canceling or increasing the premium on the fire and extended coverage insurance
policy maintained by Landlord on the Complex or Building or contents, and if
any increase results from any act of Tenant, then Tenant shall pay such
increase promptly upon demand therefor by Landlord.

 

12.2         Hazardous
Materials.  Without limiting the foregoing, Tenant shall
not cause or permit any Hazardous Material (defined below) to be brought upon,
kept or used in or about the Premises or Complex by Tenant, its agents,
employees, contractors or invitees, without the prior written consent of
Landlord.  Notwithstanding the
foregoing, Tenant may use and store types and quantities of materials and
substances which may be or contain hazardous substances, provided that the same
are of the type and in the quantities customarily found or used in offices for
use of similar businesses, including packaging materials, commercial cleaning
fluids and photocopier fluids.  If
Tenant breaches the obligations stated in the preceding sentence, or if the
presence of Hazardous Materials on the Premises or Complex caused or permitted
by Tenant results in contamination of the Premises or Complex, or if
contamination of the Premises or Complex by Hazardous Material otherwise occurs
for which Tenant is legally liable to Landlord for damage resulting therefrom,
then Tenant shall indemnify, defend and hold Landlord harmless from any and all
claims, judgments, damages, penalties, fines, costs, liabilities or losses
(including, without limitation, diminution in value of the Premises or Complex,
damages for the loss or restriction on use of rentable or usable space or any
amenity of the Premises or Complex, damages arising from any adverse impact on
marketing of space in the Building, and sums paid in settlement of claims,
attorneys’ fees, consultant fees and expert fees) which arise during or after
the Lease Term as a result of such contamination.  This indemnification of Landlord includes, without limitation,
the obligation to reimburse Landlord for costs incurred in connection with any
cleanup, remedial, removal or restoration work required by any federal, state
or local governmental agency or political subdivision.  Without limiting the foregoing, if the
presence of any Hazardous Material in, on or about the Premises or Complex
caused by or permitted by Tenant results in any contamination of the Premises
or Complex, Tenant shall promptly take all actions at its sole expense as are
necessary to return the Premises or Complex to the condition existing prior to
the introduction of any Hazardous Material; provided, however, that Landlord’s
approval of such action shall first be obtained.  “Hazardous Material” shall mean, in the broadest sense, any
petroleum–based products, pesticides, paints, insolvents,
polychlorinated, biphenyl, lead, cyanide, DDT, acids, ammonium compounds and
other chemical products and any substance or material defined or designated as
a hazardous or toxic, or other similar term, by any federal, state or local
environmental statute, regulation or ordinance affecting the Premises or
Complex presently in effect or that may be promulgated in the future, as such
statutes, regulations and ordinances may be amended from time to time.  In addition, Tenant shall execute
affidavits, 

 

 

19

 

representations
and the like from time to time at Landlord’s request concerning Tenant’s best
knowledge and belief regarding the presence of hazardous substances or
materials on the Premises.  In all
events, Tenant shall indemnify Landlord in the manner elsewhere provided in
this Lease from any release of hazardous materials on the Premises occurring
while Tenant is in possession, or elsewhere if caused by Tenant or persons
acting under Tenant.  The within
covenants shall survive the expiration or earlier termination of the lease
term.

 

12.3         Overstandard
Tenant Use.  Tenant shall not, without Landlord’s prior
written consent, use heat–generating machines, other than standard
equipment or lighting, or machines other than normal fractional horsepower
office machines, in the Premises that may affect the temperature otherwise
maintained by the air conditioning system or increase the water normally
furnished to the Premises by Landlord.

 

13.           ACCESS BY LANDLORD.  Landlord, its employees, contractors, agents and representatives,
shall have the right (and Landlord, for itself and such persons and firms,
hereby reserves the right) to enter the Premises at all hours (a) to
inspect, clean, maintain, repair, replace or alter the Premises or the
Building, (b) to show the Premises to prospective purchasers (or, during
the last twelve (12) months of the Term, to prospective tenants), (c) to
determine whether Tenant is performing its obligations hereunder and, if it is
not, to perform same at Landlord’s option and Tenant’s expense, or (d) for
any other purpose deemed reasonable by Landlord.  In an emergency, Landlord (and such persons and firms) may use
any means to open any door into or in the Premises without any liability
therefor.  Entry into the Premises by
Landlord or any other person or firm named in the first sentence of this
Section 13 for any purpose permitted herein shall not constitute a
trespass or an eviction (constructive or otherwise), or entitle Tenant to any
abatement or reduction of Rent, or constitute grounds for any claim (and Tenant
hereby waives any claim) for damages for any injury to or interference with
Tenant’s business, for loss of occupancy or quiet enjoyment, or for
consequential damages.

 

14.           CONDEMNATION.  If all of the Complex is Taken, or if so much of the Complex is
Taken that, in Landlord’s opinion, the remainder cannot be restored to an
economically viable, quality office building, or if the awards payable to
Landlord as a result of any Taking are, in Landlord’s opinion, inadequate to
restore the remainder to an economically viable, quality office building,
Landlord may, at its election, exercisable by the giving of written notice to
Tenant within sixty (60) days after the date of the Taking, terminate this
Lease as of the date of the Taking or the date Tenant is deprived of possession
of the Premises (whichever is later). 
Tenant may, at its election, exercisable by giving sixty (60) days’
written notice to Landlord, terminate this Lease in the event a substantial
(greater than 50%) portion of the Premises is taken rendering the Premises inadequate
for its continued use and occupancy by Tenant. 
If this Lease is not terminated as a result of a Taking, Landlord shall
restore the Premises remaining after the Taking to a Building Standard
condition.  During the period of
restoration, Base Rent shall be abated to the extent the Premises are rendered
untenantable and, after the period of restoration, Base Rent and Tenant’s Share
shall be reduced in the proportion that the area of the Premises Taken or
otherwise rendered untenantable bears to the area of the Premises just prior to
the Taking.  If any portion of Base Rent
is abated under this Section 14, Landlord may elect to extend the
expiration date of the Term for the period of the abatement.  All awards, proceeds, compensation or other
payments from or with respect to any Taking of the Complex or any portion
thereof shall belong to Landlord, and Tenant hereby assigns to Landlord all of
its right, title, interest and claim to same. 
Whether or not this Lease is terminated as a consequence of a Taking,
all damages or compensation awarded for a partial or total Taking, including
any award for severance damage and any sums compensating for diminution in the
value of or deprivation of the leasehold estate under this Lease, shall be the
sole and exclusive property of Landlord. 
Tenant may assert a claim for and recover from the condemning authority,
but not from Landlord, such compensation as may be awarded on account of
Tenant’s moving and relocation expenses, and depreciation to and loss of
Tenant’s moveable personal property. 
Tenant shall have no claim against Landlord for the occurrence of any
Taking, or for the termination of this Lease or a reduction in the Premises as
a result of any Taking.

 

15.           CASUALTY.

 

15.1         General.  Tenant shall give prompt written notice to
Landlord of any casualty to the Complex of which Tenant is aware and any
casualty to the Premises.  If
(a) the Complex or 

 

 

20

 

the
Premises are totally destroyed, or (b) if the Complex or the Premises are
partially destroyed but in Landlord’s opinion they cannot be restored to an
economically viable, quality office building, or (c) if the insurance
proceeds payable to Landlord as a result of any casualty are, in Landlord’s
opinion, inadequate to restore the portion remaining to an economically viable,
quality office building, or (d) if the damage or destruction occurs within
twelve (12) months of the expiration of the Term, or (e) Landlord’s
Mortgagee requires insurance proceeds be applied to pay or reduce indebtedness
rather than repair the Premises, Landlord may, at its election exercisable by
the giving of written notice to Tenant within sixty (60) days after the
casualty, terminate this Lease as of the date of the casualty or the date Tenant
is deprived of possession of the Premises (whichever is later).  If this Lease is not terminated by Landlord
as a result of a casualty, Landlord shall (subject to Section 15.2)
restore the Premises to a Building Standard condition.  If restoration of the Premises to a Building
Standard Condition is not completed within a period of one hundred sixty (160)
days, Tenant may elect to terminate this Lease by providing written notice to
Landlord within thirty (30) days after expiration of the one hundred sixty
(160) day period.  If Tenant does not
elect to terminate within this 30–day period, Tenant shall be deemed to
have waived the option to terminate. 
During the period of restoration, Base Rent shall be abated to the
extent the Premises are rendered untenantable and, after the period of
restoration, Base Rent and Tenant’s Share shall be reduced in the proportion
that the area of the Premises remaining tenantable after the casualty bears to
the area of the Premises just prior to the casualty.  If any portion of Base Rent is abated under this
Section 15.1, Landlord may elect to extend the expiration date of the Term
for the period of the abatement.  Except
for abatement of Base Rent, if any, Tenant shall have no claim against Landlord
for any loss suffered by reason of any such damage, destruction, repair or
restoration, nor may Tenant terminate this Lease as the result of any statutory
provision in effect on or after the date of this Lease pertaining to the damage
and destruction of the Premises or the Building.  Landlord shall not be required to repair any damage or to make
any restoration or replacement of any furnishings, trade fixtures, leasehold
improvements, equipment, merchandise and other personal property installed in
the Premises by Tenant or at the direct or indirect expense of Tenant.

 

15.2         Acts
of Tenant.  Notwithstanding any provisions of this Lease
to the contrary, if the Premises or the Complex are damaged or destroyed as a
result of a casualty arising from the acts or omissions of Tenant or any of
Tenant’s officers, directors, shareholders, partners, employees, contractors,
agents, invitees or representatives, (a) Tenant’s obligation to pay Rent
and to perform its other obligations under this Lease shall not be abated,
reduced or altered in any manner, (b) Landlord shall not be obligated to
repair or restore the Premises or the Complex, and (c) subject to
Section 17.2, Tenant shall be obligated, at Tenant’s cost, to repair and
restore the Premises or the Complex to the condition they were in just prior to
the damage or destruction under the direction and supervision of, and to the
satisfaction of, Landlord and any Landlord’s Mortgagee.

 

16.           SUBORDINATION, NON–DISTURBANCE AND
ATTORNMENT.

 

16.1         General.  This Lease, Tenant’s leasehold estate created
hereby, and all of Tenant’s rights, titles and interests hereunder and in and
to the Premises are hereby made subject and subordinate to any Mortgage
presently existing or hereafter placed upon all or any portion of the Complex,
and to any and all renewals, extensions, modifications, consolidations and
replacements of any Mortgage and all advances made or hereafter to be made on
the security of any Mortgage. 
Notwithstanding the foregoing, Landlord and Landlord’s Mortgagee may, at
any time upon the giving of written notice to Tenant and without any
compensation or consideration being payable to Tenant, make this Lease, and the
aforesaid leasehold estate and rights, titles and interests, superior to any
Mortgage.  In order to confirm the
subordination (or, at the election of Landlord or Landlord’s Mortgagee, the
superiority of this Lease), upon the written request by Landlord or by
Landlord’s Mortgagee to Tenant, and within seven (7) days of the date of such
request, and without any compensation or consideration being payable to Tenant,
Tenant shall execute, have acknowledged and deliver a recordable instrument
substantially in the form of Exhibit H hereto confirming that this Lease,
Tenant’s leasehold estate in the Premises and all of Tenant’s rights, titles
and interests hereunder are subject and subordinate (or, at the election of
Landlord or Landlord’s Mortgagee, superior) to the Mortgage benefiting
Landlord’s Mortgagee.  Without limiting
the foregoing, upon request by Landlord’s Mortgagee, the Landlord and Tenant
shall execute such documents as Landlord’s Mortgagee deems necessary to effect
an amendment of this Lease.  Tenant’s
failure to execute and deliver such instrument(s) as required in this
Section 16 shall constitute a default under this Lease.

 

 

21

 

16.2         Attornment.  Upon the written request of any person or
party succeeding to the interest of Landlord under this Lease, Tenant shall
automatically become the tenant of and attorn to such successor in interest
without any change in any of the terms of this Lease.  No successor in interest shall be (a) bound by any payment
of Rent for more than one month in advance, except payments of security for the
performance by Tenant of Tenant’s obligations under this Lease, or
(b) subject to any offset, defense or damages arising out of a default or
any obligations of any preceding Landlord. 
Neither Landlord’s Mortgagee nor its successor in interest shall be
bound by any amendment of this Lease entered into after Tenant has been given
written notice of the name and address of Landlord’s Mortgagee and without the
written consent of Landlord’s Mortgagee or such successor in interest.  Any transferee or successor-in-interest shall
not be liable for any acts, omissions or defaults of Landlord that occurred
before the sale or conveyance, or the return of any security deposit except for
deposits actually paid to the successor or transferee.  Tenant agrees to give written notice of any
default by Landlord to the holder of any Mortgage.  Tenant further agrees that, before it exercises any rights or
remedies under the Lease, the holder of any Mortgage or other successor–
in–interest shall have the right, but not the obligation, to cure the
default within the same time, if any, given to Landlord to cure the default,
plus an additional thirty (30) days. 
The subordination, attornment and mortgagee protection clauses of this
Section 16 shall be self–operative and no further instruments of
subordination, attornment or mortgagee protection need be required by any
Landlord’s Mortgagee or successor in interest thereto.  Nevertheless, upon the written request
therefor and without any compensation or consideration being payable to Tenant,
Tenant agrees to execute, have acknowledged and deliver such instruments
substantially in the form of Exhibit H hereto to confirm the same.  Tenant shall from time to time, if so
requested by Landlord and if doing so will not materially and adversely affect
Tenant’s economic interests under this Lease, join with Landlord in amending
this Lease so as to meet the needs or requirements of any lender that is
considering making or that has made a loan secured by all or any portion of the
Complex.

 

17.           INSURANCE.

 

17.1         General.  Tenant shall obtain and maintain throughout
the Term the following policies of insurance:

 

(a)           commercial
general liability insurance with a combined single limit for bodily injury and
property damage of not less than One Million Dollars ($1,000,000) per
occurrence, including, without limitation, contractual liability coverage for
the performance by Tenant of the indemnity agreements set forth in
Section 18;

 

(b)           hazard
insurance with special causes of loss, including theft coverage, insuring
against fire, extended coverage risks, vandalism and malicious mischief, and
including boiler and sprinkler leakage coverage, in an amount equal to the full
replacement cost (without deduction for depreciation) of all furnishings, trade
fixtures, leasehold improvements, equipment, merchandise and other personal
property from time to time situated in or on the Premises;

 

(c)           workers’
compensation insurance satisfying Tenant’s obligations under the workers’
compensation laws of the State of Utah; and

 

(d)           such
other policy or policies of insurance as Landlord may reasonably require or as
Landlord is then requiring from one or more other tenants in the Building.

 

                Such
minimum limits shall in no event limit the liability of Tenant under this
Lease.  Such liability insurance shall
name Landlord, and any other person specified from time to time by Landlord, as
an additional insured; such property insurance shall name Landlord as a loss
payee as Landlord’s interests may appear; and both such liability and property
insurance shall be with companies acceptable to Landlord, having a rating of
not less than A:XII in the most recent issue of Best’s Key Rating Guide,
Property–Casualty.  All
liability policies maintained by Tenant shall contain a provision that Landlord
and any other additional insured, although named as an insured, shall
nevertheless be entitled to recover under such policies for any loss sustained
by Landlord and Landlord’s agents and employees as a result of the acts or
omissions of Tenant.  Tenant shall furnish
Landlord with certificates of coverage. 
No such policy shall be cancelable or subject to reduction of coverage
or other modification except after thirty (30) days’ prior written notice to
Landlord by the 

 

 

22

 

insurer. 
All such policies shall be written as primary policies, not contributing
with and not in excess of the coverage which Landlord may carry, and shall only
be subject to such deductibles as may be approved in writing in advance by
Landlord.  Tenant shall, at least ten
(10) days prior to the expiration of such policies, furnish Landlord with
renewals of, or binders for, such policies. 
Landlord and Tenant waive all rights to recover against each other,
against any other tenant or occupant of the Complex, and against the officers,
directors, shareholders, partners, joint venturers, employees, agents,
customers, invitees or business visitors of each other, or of any other tenant
or occupant of the Building, for any loss or damage arising from any cause
covered by any insurance carried by the waiving party, to the extent that such
loss or damage is actually covered. 
Tenant shall cause all other occupants of the Premises claiming by,
through or under Tenant to execute and deliver to Landlord a waiver of claims
similar to the waiver contained in this Section and to obtain such waiver of
subrogation rights endorsements.  Any
Landlord’s Mortgagee may, at Landlord’s option, be afforded coverage under any
policy required to be secured by Tenant under this Lease by use of a
mortgagee’s endorsement to the policy concerned.

 

17.2         Waiver
of Subrogation.  Landlord and Tenant hereby waive all claims,
rights of recovery and causes of action that either party or any party claiming
by, through or under such party may now or hereafter have by subrogation or
otherwise against the other party or against any of the other party’s officers,
directors, shareholders, partners or employees for any loss or damage that may
occur to the Complex, the Premises, Tenant’s improvements or any of the
contents of any of the foregoing by reason of fire or other casualty, or by
reason of any other cause except gross negligence or willful misconduct (thus
including simple negligence of the parties hereto or their officers, directors,
shareholders, partners or employees), that could have been insured against
under the terms of (a) in the case of Landlord, the standard fire and
extended coverage insurance policies available in the state where the Complex
is located at the time of the casualty, and (b) in the case of Tenant, the
fire and extended coverage insurance policies required to be obtained and
maintained under Section 17.1; provided, however, that the waiver set
forth in this Section 17.2 shall not apply to any deductibles on insurance
policies carried by Landlord or to any coinsurance penalty which Landlord might
sustain.  Landlord and Tenant shall
cause an endorsement to be issued to their respective insurance policies
recognizing this waiver of subrogation.

 

18.           TENANT’S INDEMNITY.  Subject to paragraph 17.2, Tenant agrees to indemnify,
defend and hold Landlord and its officers, directors, partners and employees
entirely harmless from and against all liabilities, losses, demands, actions,
expenses or claims, including reasonable attorneys’ fees and court costs, and
including consequential damages, for injury to or death of any person or for
damages to any property or for violation of law arising out of or in any manner
connected with (i) the use, occupancy or enjoyment of the Premises and
Complex by Tenant or Tenant’s agents, employees or contractors, or the clients
and other invitees of Tenant, (ii) any work, activity or other thing
allowed or suffered by Tenant or Tenant’s agents, employees or contractors to
be done in or about the Premises or Complex, (iii) any breach or default
in the performance of any obligation of Tenant under this Lease, and
(iv) any negligent or otherwise tortious act or failure to act by Tenant
or Tenant’s agents, employees or contractors on or about the Premises or
Complex.

 

19.           THIRD PARTIES; ACTS OF FORCE MAJEURE; EXCULPATION.  Landlord shall have no liability to Tenant,
or to Tenant’s officers, directors, shareholders, partners, employees, agents,
contractors or invitees, for bodily injury, death, property damage, business
interruption, loss of profits, loss of trade secrets or other direct or
consequential damages occasioned by (a) the acts or omissions of any other
tenant or such other tenant’s officers, directors, shareholders, partners,
employees, agents, contractors or other invitees within the Complex,
(b) Force Majeure, (c) vandalism, theft, burglary and other criminal
acts (other than those committed by Landlord and its employees), (d) water
leakage, or (e) the repair, replacement, maintenance, damage, destruction
or relocation of the Premises.  Except
to the extent an injury, loss, damage or destruction was proximately caused by
Landlord’s fraud, willful act or violation of law, Tenant waives all claims
against Landlord arising out of injury to or death of any person or loss of,
injury or damage to, or destruction of any property of Tenant.

 

20.           INTENTIONALLY LEFT BLANK.

 

21.           CONTROL OF COMMON AREAS.  Landlord shall have the exclusive control over the Common
Areas.  Landlord may, from time to time,
create different Common Areas, close or 

 

 

23

 

otherwise
modify the Common Areas, and modify the Building Rules and Regulations with
respect thereto.

 

22.           RIGHT TO RELOCATE.  Landlord retains the right and power, to be exercised reasonably
and at Landlord’s expense, to relocate Tenant within the Building to space
which is comparable in size to the Premises and is suited to Tenant’s use, and
all terms of this Lease shall apply to the new space with equal force.  Instances when the exercise of Landlord’s
right and power to relocate Tenant shall be deemed reasonable include, but
shall not be limited to, instances where Landlord desires to consolidate the
rentable area in the Building to provide Landlord’s services more efficiently,
or to provide contiguous vacant space for a prospective tenant.  Landlord shall not be liable to Tenant for
any claims arising in connection with a relocation permitted under this
Section 22.  The parties shall
execute an amendment to this Lease stating the relocation of the Premises.

 

23.           QUIET ENJOYMENT.  Provided Tenant has performed all its obligations under this
Lease, Tenant shall and may peaceably and quietly have, hold, occupy, use and
enjoy the Premises during the Term subject to the provisions of this Lease.  Landlord shall warrant and forever defend
Tenant’s right to occupancy of the Premises against the claims of any and all
persons whosoever lawfully claiming the same or any part thereof, by, through
or under Landlord, but not otherwise, subject to the provisions of this Lease.

 

24.           DEFAULT BY TENANT.

 

24.1         Events of Default.  Each of the following occurrences shall constitute an Event of
Default (herein so called):

 

(a)           the
failure of Tenant to pay Base Rent, Additional Rent or any other amount due
under this Lease as and when due hereunder and the continuance of such failure
for a period of five (5) days after written notice from Landlord to Tenant
specifying the failure; provided, however, after Landlord has given Tenant
written notice pursuant to this clause 24.1(a) on two separate occasions,
Landlord shall not be required to give Tenant any further notice under this
clause 24.1(a); provided, however, that the obligation of Tenant to pay a late
charge or interest pursuant to this Lease shall commence as of the due date of
the Rent or other monetary obligation and not on the expiration of any grace
period;

 

(b)           the
failure of Tenant to perform, comply with or observe any other agreement,
obligation or undertaking of Tenant, or any other term, condition or provision
in this Lease, and the continuance of such failure for a period of ten (10)
days after written notice from Landlord to Tenant specifying the failure;

 

(c)           the
abandonment of the Premises by Tenant or the failure of Tenant to occupy the
Premises or any significant portion thereof;

 

(d)           the
involuntary transfer by Tenant of Tenant’s interest in this Lease or the
voluntary attempt to or actual transfer of its interest in this Lease, without
Landlord’s prior written consent;

 

(e)           the
failure of Tenant to discharge any lien placed as a result of Tenant’s action
or inaction upon the Premises or Building as set forth hereunder;

 

(f)            the
occurrence of a Net Tenant Delay, as defined in the Work Letter Agreement, of
thirty (30) calendar days or more;

 

(g)           the
filing of a petition by or against Tenant (the term “Tenant” also meaning, for
the purpose of this clause 24.1(d), any guarantor of the named Tenant’s
obligations hereunder) (i) in any bankruptcy or other insolvency
proceeding, (ii) seeking any relief under the Bankruptcy Code or any
similar debtor relief law, (iii) for the appointment of a liquidator or
receiver for all or substantially all of Tenant’ s property or for Tenant’s
interest in this Lease, or (iv) to reorganize or modify Tenant’s capital
structure; and

 

 

24

 

(h)           the
admission by Tenant in writing that it cannot meet its obligations as they
become due or the making by Tenant of an assignment for the benefit of its
creditors.

 

24.2         Remedies of Landlord.  Upon any Event of Default, Landlord may, at Landlord’s option in
its sole discretion, and in addition to all other rights, remedies and
recourses afforded Landlord hereunder or by law or equity, do any one or more
of the following:

 

(a)           terminate
this Lease by the giving of written notice to Tenant; reenter the Premises,
with or without process of law; eject all parties in possession thereof;
repossess and enjoy the Premises and all Tenant Improvements; and recover from
Tenant all of the following: 
(i) all Rent and other amounts accrued hereunder to the date of
termination, (ii) all amounts due under Section 24.3, and
(iii) liquidated damages in an amount equal to (A) the total Rent
that Tenant would have been required to pay for the remainder of the Term
discounted to present value at the prime lending rate (or equivalent rate,
however denominated) in effect on the date of termination at the largest
national bank in the state where the Complex is located, minus (B) the then–present
fair rental value of the Premises for such period, similarly discounted, plus
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 would be likely to result therefrom, including, without
limitation, attorneys’ fees, brokers’ commissions or finder’s fees;

 

(b)           terminate
Tenant’s right to possession of the Premises without terminating this Lease by
the giving of written notice to Tenant, in which event Tenant shall pay to
Landlord (i) all Rent and other amounts accrued hereunder to the date of
termination of possession, (ii) all amounts due from time to time under
Section 24.3, and (iii) all Rent and other sums required hereunder to
be paid by Tenant during the remainder of the Term, diminished by any net sums
thereafter received by Landlord through reletting the Premises during said
period.  Reentry by Landlord in the
Premises will not affect the obligations of Tenant hereunder for the unexpired
Term.  Landlord may bring action against
Tenant to collect amounts due by Tenant on one or more occasions, without the
necessity of Landlord’s waiting until expiration of the Term.  If Landlord elects to proceed under this
Section 24.2(b), it may at any time elect to terminate this Lease pursuant
to Section 24.2(a);

 

(c)           without
notice, alter any and all locks and other security devices at the Premises
without being obligated to deliver new keys to the Premises, unless Tenant has
cured all Events of Default before Landlord has terminated this Lease under
Section 24.2(a) or has entered into a lease to relet all or a portion of
the Premises;

 

(d)           if
an Event of Default specified in Section 24.1(c) occurs, Landlord may
remove and store any property that remains on the Premises and, if Tenant does
not claim such property within ten (10) days after Landlord has delivered to
Tenant notice of such storage, Landlord may appropriate, sell, destroy or
otherwise dispose of the property in question without notice to Tenant or any
other person, and without any obligation to account for such property; and/or

 

(e)           for
all purposes set forth in this paragraph 24.2, Landlord is hereby
irrevocably appointed as agent for Tenant. 
No taking possession of the Premises by Landlord shall be construed as
Landlord’s acceptance of a surrender of the Premises by Tenant or an election
of Landlord to terminate this Lease unless written notice of such intention is
given to Tenant.  Notwithstanding any
leasing or subletting without termination of the Lease, Landlord may at any
time thereafter elect to terminate the Lease for Tenant’s previous breach.

 

24.3         Payment by Tenant.  Upon any Event of Default, Tenant shall also pay to Landlord all
costs and expenses incurred by Landlord, including court costs and reasonable
attorneys’ fees, in (a) retaking or otherwise obtaining possession of the
Premises, (b) removing and storing Tenant’s or any other occupant’s
property, (c) constructing the Tenant Improvements or otherwise incurred
in connection with the Tenant Improvement Allowance Items as defined in the
Work Letter Agreement, (d) repairing, restoring, altering, remodeling or
otherwise putting the Premises into condition acceptable to a new tenant or
tenants, (e) reletting all or any part of the Premises, (f) paying or
performing the underlying obligation which Tenant failed to pay or perform, 

 

 

25

 

and
(g) enforcing any of Landlord’s rights, remedies or recourses arising as a
consequence of the Event of Default.

 

24.4         Reletting.  Upon termination of this Lease or upon termination of Tenant’s
right to possession of the Premises, Landlord shall use reasonable efforts to
relet the Premises on such terms and conditions as Landlord in its sole
discretion may determine (including a term different than the Term, rental
concessions, and alterations to and improvements of the Premises); however,
Landlord shall not be obligated to relet the Premises before leasing other
portions of the Building.  Landlord
shall not be liable for, nor shall Tenant’s obligations hereunder be diminished
because of, Landlord’s failure to relet the Premises or collect rent due with
respect to such reletting.  If Landlord
relets the Premises, rent Landlord receives from such reletting shall be
applied to the payment of:  first, any
indebtedness from Tenant to Landlord other than Rent (if any); second, all
costs, including for maintenance and alterations, incurred by Landlord in
reletting; and third, Rent due and unpaid. 
In no event shall Tenant be entitled to the excess of any rent obtained
by reletting over the Rent herein reserved.

 

24.5         Landlord’s Right to Pay or Perform.  Upon an Event of Default, Landlord may, but
without obligation to do so and without thereby waiving or curing such Event of
Default, pay or perform the underlying obligation for the account of Tenant,
and enter the Premises and expend the Security Deposit and any other sums for
such purpose.

 

24.6         No Waiver; No Implied Surrender.  Provisions of this Lease may only be waived
by the party entitled to the benefit of the provision evidencing the waiver in
writing.  Thus, neither the acceptance
of Rent by Landlord following an Event of Default (whether known to Landlord or
not), nor any other custom or practice followed in connection with this Lease,
shall constitute a waiver by Landlord of such Event of Default or any other
Event of Default.  Further, the failure
by Landlord to complain of any action or inaction by Tenant, or to assert that
any action or inaction by Tenant constitutes (or would constitute, with the
giving of notice and the passage of time) an Event of Default, regardless of
how long such failure continues, shall not extinguish, waive or in any way
diminish the rights, remedies and recourses of Landlord with respect to such
action or inaction.  No waiver by
Landlord of any provision of this Lease or of any breach by Tenant of any
obligation of Tenant hereunder shall be deemed to be a waiver of any other
provision hereof, or of any subsequent breach by Tenant of the same or any
other provision hereof.  Landlord’s
consent to any act by Tenant requiring Landlord’s consent shall not be deemed
to render unnecessary the obtaining of Landlord’s consent to any subsequent act
of Tenant.  No act or omission by
Landlord (other than Landlord’s execution of a document acknowledging such
surrender) or Landlord’s agents, including the delivery of the keys to the
Premises, shall constitute an acceptance of a surrender of the Premises.

 

25.           DEFAULTS BY LANDLORD.  Landlord shall not be in default under this
Lease, and Tenant shall not be entitled to exercise any right, remedy or
recourse against Landlord or otherwise as a consequence of any alleged default
by Landlord under this Lease, unless Landlord fails to perform any of its
obligations hereunder and said failure continues for a period of thirty (30)
days after Tenant gives Landlord and (provided that Tenant shall have been
given the name and address of Landlord’s Mortgagee) Landlord’s Mortgagee
written notice thereof specifying, with reasonable particularity, the nature of
Landlord’s failure.  If, however, the
failure cannot reasonably be cured within the thirty (30) day period, Landlord
shall not be in default hereunder if Landlord or Landlord’s Mortgagee commences
to cure the failure within the thirty (30) days and thereafter pursues the
curing of same diligently to completion. 
If Tenant recovers a money judgment against Landlord for Landlord’s
default of its obligations hereunder or otherwise, the judgment shall be
limited to Tenant’s actual direct, but not consequential, damages therefor and
shall be satisfied only out of the interest of Landlord in the Complex as the
same may then be encumbered, and Landlord shall not otherwise be liable for any
deficiency.  In no event shall Tenant
have the right to levy execution against any property of Landlord other than
its interest in the Complex.  The
foregoing shall not limit any right that Tenant might have to obtain specific
performance of Landlord’s obligations hereunder.

 

26.           RIGHT OF REENTRY.  Upon the expiration or termination of the Term for whatever
cause, or upon the exercise by Landlord of its right to reenter the Premises
without terminating this Lease, Tenant shall immediately, quietly and peaceably
surrender to Landlord 

 

 

26

 

possession
of the Premises in “broom clean” and good order, condition and repair, except
only for ordinary wear and tear, damage by casualty not covered by
Section 15.2 and repairs to be made by Landlord pursuant to
Section 15.1.  If Tenant is in
default under this Lease, Landlord shall have a lien on such personal property,
trade fixtures and other property as set forth in Section 38–3–1,
et  seq., of the Utah Code Ann. (or any replacement
provision).  Landlord may require Tenant
to remove any personal property, trade fixtures, other property, alterations,
additions and improvements made to the Premises by Tenant or by Landlord for
Tenant, and to restore the Premises to their condition on the date of this
Lease.  All personal property, trade
fixtures and other property of Tenant not removed from the Premises on the
abandonment of the Premises or on the expiration of the Term or sooner
termination of this Lease for any cause shall conclusively be deemed to have
been abandoned and may be appropriated, sold, stored, destroyed or otherwise
disposed of by Landlord without notice to, and without any obligation to
account to, Tenant or any other person. 
Tenant shall pay to Landlord all expenses incurred in connection with
the disposition of such property in excess of any amount received by Landlord
from such disposition.  Tenant shall not
be released from Tenant’s obligations under this Lease in connection with
surrender of the Premises until Landlord has inspected the Premises and
delivered to Tenant a written release. 
While Tenant remains in possession of the Premises after such
expiration, termination or exercise by Landlord of its reentry right, Tenant
shall be deemed to be occupying the Premises as a tenant–at–sufferance,
subject to all of the obligations of Tenant under this Lease, except that the
daily Rent shall be one hundred fifty percent (150%) of the per–day Rent
in effect immediately before such expiration, termination or exercise by
Landlord.  No such holding over shall
extend the Term.  If Tenant fails to
surrender possession of the Premises in the condition herein required, Landlord
may, at Tenant’s expense, restore the Premises to such condition.

 

27.           MISCELLANEOUS.

 

27.1         Independent Obligations; No Offset.  The obligations of Tenant to pay Rent and to
perform the other undertakings of Tenant hereunder constitute independent
unconditional obligations to be performed at the times specified hereunder,
regardless of any breach or default by Landlord hereunder.  Tenant shall have no right, and Tenant
hereby waives and relinquishes all rights which Tenant might otherwise have, to
claim any nature of lien against the Complex or to withhold, deduct from or
offset against any Rent or other sums to be paid to Landlord by Tenant.

 

27.2         Time of Essence.  Time is of the essence with respect to each date or time
specified in this Lease by which an event is to occur.

 

27.3         Applicable Law.  This Lease shall be governed by, and construed in accordance
with, the laws of the State of Utah. 
All monetary and other obligations of Landlord and Tenant are
performable in the county where the Complex is located.

 

27.4         Assignment by Landlord.  Landlord shall have the right to assign without notice or
consent, in whole or in part, any or all of its rights, titles or interests in
and to the Complex or this Lease and, upon any such assignment, Landlord shall
be relieved of all unaccrued liabilities and obligations hereunder to the
extent of the interest so assigned.

 

27.5         Estoppel Certificates; Financial Statements.  From time to time at the request of Landlord
or Landlord’s Mortgagee, Tenant will within seven (7) calendar days, and
without compensation or consideration execute, have acknowledged and deliver a
certificate substantially in the form of Exhibit H hereto, setting forth
the following:  (a) a ratification
of this Lease; (b) the Commencement Date, expiration date and other Lease
information; (c) that this Lease is in full force and effect and has not
been assigned, modified, supplemented or amended (except by such writing as
shall be stated); (d) that all conditions under this Lease to be performed
by Landlord have been satisfied or, in the alternative, those claimed by Tenant
to be unsatisfied; (e) that no defenses or offsets exist against the
enforcement of this Lease by Landlord or, in the alternative, those claimed by
Tenant to exist; (f) whether within the knowledge of Tenant there are any
existing breaches or defaults by Landlord hereunder and, if so, stating the
defaults with reasonable particularity; (g) the amount of advance Rent, if
any (or none if such is the case), paid by Tenant; (h) the date to which
Rent has been paid; (i) the amount of the Security Deposit; and
(j) such other information as Landlord or Landlord’s Mortgagee may
request.  Landlord’s Mortgagee and
purchasers shall be entitled to rely on any estoppel certificate executed by
Tenant.  Tenant shall, 

 

 

27

 

within
twenty (20) calendar days after Landlord’s request, furnish to Landlord current
financial statements for Tenant, prepared in accordance with generally accepted
accounting principles consistently applied and certified by Tenant to be true
and correct.

 

27.6         Signs, Building Name and Building Address.  Landlord may, from time to time at its
discretion, place any and all signs anywhere in the Complex, and may change the
name and street address of the Complex. 
Tenant shall not, without Landlord’s prior written consent, use the name
of the Building for any purpose other than as the address of the business to be
conducted by Tenant from the Premises.

 

27.7         Notices.  All notices and other communications given pursuant to this Lease
shall be in writing and shall either be sent by overnight courier or mailed by
first class United States mail, postage prepaid, registered or certified with
return receipt requested, and addressed as set forth in Section ”G” of the
Basic Lease Information, or delivered in person to the intended addressee.  Notice sent by overnight courier shall
become effective one (1) business day after being sent.  Notice mailed in the aforesaid manner shall
become effective three (3) business days after deposit.  Notice given in any other manner, and any
notice given to Landlord, shall be effective only upon receipt by the intended
addressee.  Notwithstanding the
foregoing, after the Commencement Date, notice may also be given at the
following addresses:  (a) for
Landlord, at the Building Manager’s office in the Building, and (b) for
Tenant, the Premises.  Each party shall have
the continuing right to change its address for notice hereunder by the giving
of fifteen (15) days’ prior written notice to the other party in accordance
with this Section 27.7.

 

27.8         Entire Agreement, Amendment and Binding Effect.  This Lease constitutes the entire agreement
between Landlord and Tenant relating to the subject matter hereof, and all
prior agreements relative hereto which are not contained herein are
terminated.  This Lease may be amended
only by a written document duly executed by Landlord and Tenant (and, if a
Mortgage is then in effect, by the Landlord’s Mortgagee entitled to the
benefits thereof), and any alleged amendment which is not so documented shall
not be effective as to either party.  The
provisions of this Lease shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors and
assigns; provided, however, that this Section 27.8 shall not negate,
diminish or alter the restrictions on Transfers applicable to Tenant set forth
elsewhere in this Lease.

 

27.9         Severability.  This Lease is intended to be performed in accordance with and
only to the extent permitted by all Legal Requirements.  If any provision of this Lease or the
application thereof to any person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, but the extent of the invalidity or
unenforceability does not destroy the basis of the bargain between the parties
as contained herein, the remainder of this Lease and the application of such
provision to other persons or circumstances shall not be affected thereby, but
rather shall be enforced to the greatest extent permitted by law.

 

27.10       Number and Gender, Captions and References.  As the context of this Lease may require,
pronouns shall include natural persons and legal entities of every kind and
character, the singular number shall include the plural, and the neuter shall
include the masculine and the feminine gender. 
Section headings in this Lease are for convenience of reference only and
are not intended, to any extent and for any purpose, to limit or define any
section hereof.  Whenever the terms
“hereof,” “hereby,” “herein,” “hereunder” or words of similar import are used
in this Lease, they shall be construed as referring to this Lease in its
entirety rather than to a particular section or provision, unless the context
specifically indicates to the contrary. 
Any reference to a particular “Section” shall be construed as referring
to the indicated section of this Lease.

 

27.11       Attorneys’ Fees.  In the event either party commences a legal proceeding to enforce
any of the terms of this Lease, the prevailing party in such action shall have
the right to recover reasonable attorneys’ fees and costs from the other party,
to be fixed by the court in the same action. 
“Legal proceedings” includes appeals from a lower court judgment as well
as proceedings in the Federal Bankruptcy Court (“Bankruptcy Court”), whether or
not they are adversary proceedings or contested matters.  The “prevailing party” (i) as used in
the context of proceedings in the Bankruptcy Court means the prevailing party
in an adversary proceeding or contested matter, or any other actions taken by
the non–bankrupt party which are reasonably necessary to protect its rights

 

 

28

 

under
this Lease, and (ii) as used in the context of proceedings in any court
other than the Bankruptcy Court means the party that prevails in obtaining a
remedy or relief which most nearly reflects the remedy or relief which the
party sought.

 

27.12       Brokers.  Tenant and Landlord hereby warrant and represent unto the other
that it has not incurred or authorized any brokerage commission, finder’s fees
or similar payments in connection with this Lease, other than that which is due
pursuant to a separate written agreement between the Landlord and Landlord’s
agents and subagents.  Each party shall
defend, indemnify and hold the other harmless from and against any claim for
brokerage commission, finder’s fees or similar payment arising by virtue of
authorization of such party, or any Affiliate of such party, in connection with
this Lease.

 

27.13       Interest on Tenant’s Obligations.  Any amount due from Tenant to Landlord which
is not paid when due shall bear interest at the lesser of ten percent (10%) per
annum or the maximum rate allowed by law from the date such payment is due
until paid, but the payment of such interest shall not excuse or cure the
default in payment.

 

27.14       Authority.  Each person executing this Lease on behalf of Tenant personally
warrants and represents that (a) Tenant is a duly organized and existing
legal entity, in good standing in the State of Utah, (b) Tenant has full
right and authority to execute, deliver and perform this Lease, (c) this
Lease is binding upon and enforceable against Tenant in accordance with its
terms, (d) the person executing and delivering this Lease on behalf of
Tenant was duly authorized to do so, and (d) upon request of Landlord,
such person will deliver to Landlord satisfactory evidence of his or her
authority to execute this Lease on behalf of Tenant.

 

27.15       Recording.  Neither this Lease (including any Exhibit hereto) nor any
memorandum hereof shall be recorded without the prior written consent of
Landlord.

 

27.16       Exhibits.  All Exhibits and written addenda hereto are incorporated herein
for any and all purposes.

 

27.17       Multiple Counterparts.  This Lease may be executed in two or more counterparts, each of
which shall be an original, but all of which shall constitute but one
instrument.

 

27.18       Survival of Indemnities.  The indemnity obligations of Tenant contained in this Lease shall
survive the expiration or earlier termination of this Lease to and until the
last to occur of (a) the last day permitted by law for the bringing of any
claim or action with respect to which indemnification may be claimed, or
(b) the date on which any claim or action for which indemnification may be
claimed under such provision is fully and finally resolved and any compromise
thereof or judgment or award thereon is paid in full.  Payment shall not be a condition precedent to recovery upon any
indemnification provision contained herein.

 

27.19       Miscellaneous.  Any guaranty delivered in connection with this Lease is an
integral part of this Lease and constitutes consideration given to Landlord to
enter into this Lease.  No amendment to
this Lease shall be binding on Landlord or Tenant unless reduced to writing and
signed by both parties.  Each provision
to be performed by Tenant shall be construed to be both a covenant and a
condition.  Venue on any action arising
out of this Lease shall be proper only in the District Court of Salt Lake
County, State of Utah.  Landlord and
Tenant waive trial by jury in any action, proceeding or counterclaim brought by
either of them against the other on all matters arising out of this Lease or
the use and occupancy of the Premises. 
The submission of this Lease to Tenant is not an offer to lease the
Premises or an agreement by Landlord to reserve the Premises for Tenant.  Landlord shall not be bound to Tenant until
Tenant has duly executed and delivered duplicate original copies of this Lease
to Landlord and Landlord has duly executed and delivered one of those duplicate
original copies to Tenant.

 

 

29

 

EXECUTED as of the date and year above first written.

 

TENANT ACKNOWLEDGES THAT LANDLORD HAS MADE NO WARRANTIES TO TENANT,
EITHER EXPRESS OR IMPLIED, AND LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY
IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR TENANT’S INTENDED
COMMERCIAL PURPOSE.

 

	
  TENANT:

  	
  DISCOUNTSDIRECT

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rob Brazel

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:  

  	
  Rob Brazel

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:  

  	
  Chairman, CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:  

  	
  12-17-98

  
	
   

  	
   

  	
   

  
	
  LANDLORD:

  	
  2855 E. COTTONWOOD
  PARKWAY, L.C., a Utah limited liability company, by its following Managing
  Member

  
	
   

  	
   

  
	
   

  	
  COTTONWOOD CORPORATE
  CENTER, L.C., a Utah limited liability company, by its following member

  
	
   

  	
   

  
	
   

  	
  C&E HOLDINGS
  PARTNERSHIP, a Utah general partnership, by its Managing General Partner

  
	
   

  	
   

  
	
   

  	
  COTTONWOOD
  EQUITIES, LTD., a Texas limited partnership, by Cottonwood Realty Services,
  L.L.C., its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John L. West

  
	
   

  	
   

  	
  JOHN L. WEST, Managing
  Director

  

 

 

 

30

 

EXHIBIT A

 

GLOSSARY OF
DEFINED TERMS

 

a.                                       “Addendum” shall mean all the addenda,
exhibits and attachments, if any, attached to the Lease or to any exhibit to
the Lease.  All addenda are by
definition incorporated into the Lease Agreement.  Unless otherwise specifically provided, terms and phrases in any
Addendum shall have the meaning of such terms and phrases as provided in the
Lease Agreement and this Glossary of Defined Terms.

 

b.                                      “Affiliate” shall mean a person or party
who or which controls, is controlled by or is under common control with,
another person or party.

 

c.                                       “Building” shall mean that certain
office building and garage structure constructed on the Land, the street
address of which is 2855 E. Cottonwood Parkway, Salt Lake County, Utah.  The term “Building” shall include, without
limitation, all fixtures and appurtenances in and to the aforesaid structure,
including specifically but without limitation all above–grade walkways
and all electrical, mechanical, plumbing, security, elevator, boiler, HVAC,
telephone, water, gas, storm sewer, sanitary sewer and all other utility
systems and connections, all life support systems, sprinklers, smoke detection
and other fire protection systems, and all equipment, machinery, shafts, flues,
piping, wiring, ducts, duct work, panels, instrumentation and other
appurtenances relating thereto.

 

d.                                      “Building Operating Hours” shall mean
7:30 a.m. to 6:00 p.m. Monday through Friday, and Saturday 8:00 a.m. to 1:00
p.m., exclusive of Sundays and Holidays.

 

e.                                       “Building Rules and Regulations” shall
mean the rules and regulations governing the Complex promulgated by Landlord
from time to time.  The current Building
Rules and Regulations maintained by Landlord are attached as Exhibit C
hereto.

 

f.                                         “Building Standard”, when applied to an
item, shall mean such item as has been designated by Landlord (orally or in
writing) as generally applicable throughout the leased portions of the
Building, as more fully set forth on Exhibit D2 hereto.

 

g.                                      “Commencement Date” shall mean the date
of the commencement of the Term as determined pursuant to Section 6.3.

 

h.                                      “Common Areas” shall mean all areas and
facilities within the Complex which have been constructed and are being
maintained by Landlord for the common, general, nonexclusive use of all tenants
in the Building, as revised from time to time in Landlord’s discretion, and
shall include rest rooms, lobbies, corridors, service areas, elevators, stairs
and stairwells, the Parking Facility, driveways, loading areas, ramps, walkways
and landscaped areas.

 

i.                                          “Complex” shall mean the Land and all
improvements thereon, including the Building and the Parking Facility.

 

j.                                          “Fiscal Year” shall mean each fiscal
year (or portion thereof) as designated by Landlord, in which any portion of
the Lease Term falls, through and including the Fiscal Year in which the Lease
Term expires.  The Fiscal Year currently
commences on January 1; however, Landlord may change the Fiscal Year at
any time or times.

 

k.                                       “Force Majeure” shall mean the
occurrence of any event which hinders, prevents or delays the performance by
Landlord of any of its obligations hereunder and which is beyond the reasonable
control of Landlord.

 

l.                                          “Holidays” shall mean (a) New
Year’s Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day, (b) other days on which national or
state banks located in the state where the Complex is located must or may close
for ordinary operations, and (c) other days which are commonly observed as
Holidays by the majority of 

 

 

 

tenants of the
Building.  If the Holiday occurs on a
Saturday or Sunday, the Friday preceding or the Monday following may, at
Landlord’s discretion, be observed as a Holiday.

 

m.                                    “HVAC” shall mean the heating,
ventilation and air conditioning systems in the Building.

 

n.                                      “Impositions” shall mean (a) all
real estate, personal property, rental, water, sewer, transit, use, occupancy
and other taxes, assessments, charges, excises and levies (including any
interest, costs or penalties with respect thereto), general and special,
ordinary and extraordinary, foreseen and unforeseen, of any kind and nature
whatsoever which are assessed, levied, charged or imposed upon or with respect
to the Complex, or any portion thereof, or the sidewalks, streets or alleyways
adjacent thereto, or the ownership, use, occupancy or enjoyment thereof
(including but not limited to mortgage taxes and other taxes and assessments
passed on to Landlord by Landlord’s Mortgagee), and (b) all charges for
any easement, license, permit or agreement maintained for the benefit of the
Complex.  “Impositions” shall not
include income taxes, estate and inheritance taxes, excess profit taxes,
franchise taxes, taxes imposed on or measured by the income of Landlord from
the operation of the Complex, and taxes imposed on account of the transfer of
ownership of the Complex or the Land. 
If any or all of the Impositions shall be discontinued and, in
substitution therefor, taxes, assessments, charges, excises or impositions
shall be assessed, levied, charged or imposed wholly or partially on the Rents
received or payable hereunder (a “Substitute
Imposition”), then the Substitute Imposition shall be deemed to
be included within the term “Impositions.”

 

o.                                      “Land” shall mean the real property on
which the Building is constructed and which is further described in Exhibit E
hereto.

 

p.                                      “Landlord’s Consent or Landlord’s Approval”
as used in this Agreement, shall mean the prior written consent or written
approval of Landlord to the particular item or request.  Where provided in the Lease, the Landlord’s
consent or approval shall be determined in Landlord’s sole discretion, but
shall otherwise not be unreasonably withheld.

 

q.                                      “Landlord’s Mortgagee” shall mean the
mortgagee of any mortgage, the beneficiary of any deed of trust, the pledgee of
any pledge, the secured party of any security interest, the assignee of any
assignment and the transferee of any other instrument of transfer (including
the ground lessor of any ground lease on the Land) now or hereafter in
existence on all or any portion of the Complex, and their successors, assigns
and purchasers.  “Mortgage” shall mean any such mortgage,
deed of trust, pledge, security agreement, assignment or transfer instrument,
including all renewals, extensions and rearrangements thereof and of all debts
secured thereby.

 

r.                                         “Landlord’s Work” shall mean all
improvements, components, assemblies, installations, finish, labor, materials
and services that Landlord is required to furnish, install, perform, provide or
apply to the Premises as specified in the Work Letter Agreement.

 

s.                                       “Legal Requirements” shall mean any and
all (a) judicial decisions, orders, injunctions, writs, statutes, rulings,
rules, regulations, promulgations, directives, permits, certificates or
ordinances of any governmental authority in any way applicable to Tenant or the
Complex, including but not limited to the Building Rules and Regulations,
zoning, environmental and utility conservation matters, (b) requirements
imposed on Landlord by any Landlord’s Mortgagee, (c) insurance
requirements, and (d) other documents, instruments or agreements (written
or oral) relating to the Complex or to which the Complex may be bound or
encumbered.

 

t.                                         “Parking Facility” shall mean
(a) any parking garage and any other parking lot or facility adjacent to
or in the Complex servicing the Building, and (b) any parking area, open
or covered, leased by Landlord to service the Building.

 

u.                                      “Permitted Use” means lawful, general
business office purposes only, and no other purpose, in strict compliance with
the Building Rules and Regulations from time to time in effect and all other
Legal Requirements.

 

 

A-2

 

v.                                      “Premises” shall mean the area leased by
Tenant pursuant to this Lease as outlined on the floor plan drawing attached as
Exhibit B hereto and all other space added to the Premises pursuant
to the terms of this Lease.  The
Premises includes the space between the interior surface of the walls and the
top surface of the floor slab of the outlined area and the finished surface of
the ceiling immediately above.

 

w.                                    “Rent” shall mean Base Rent, Additional
Rent, the parking charge called for in Section 5.4 and all other amounts
provided for under this Lease to be paid by Tenant, whether as Additional Rent
or otherwise.  “Base Rent” shall mean the base rent
specified in Section 5.1 as adjusted in accordance with
Section 5.2.  “Base Rent Adjustment” shall mean the
increase in the annual Base Rent as set forth in Section 5.2.  “Additional
Rent” shall mean the additional rent specified in
Section 5.3.

 

x.                                        “Rentable Area” shall mean the Rentable
Area of the Premises and the Rentable Area of the Building as stated in
Section ”A” of the Summary of Basic Lease Information.

 

y.                                      “Security Deposit” means the amount
stated in Section ”E” of the Summary of Basic Lease Information.

 

z.                                        “Substantial Completion” shall mean the
completion of construction upon the Premises of the Tenant Improvements
pursuant to the approved Working Drawings, with the exception of any punch list
items and any tenant fixtures, work–stations, built–in furniture or
equipment to be installed by Tenant or under the supervision of Tenant.

 

aa.                                 “Taking” or “Taken” shall mean the actual or
constructive condemnation, or the actual or constructive acquisition by or
under threat of condemnation, eminent domain or similar proceeding, by or at
the direction of any governmental authority or agency.

 

bb.                               “Tenant’s Share” shall mean the
percentage of Operating Expenses to be paid by Tenant in accordance with the
provisions of the Lease.  “Tenant’s
Share” may be adjusted by Landlord from time to time to reflect adjustments to
the then–current Rentable Area of the Building or the Premises.  Landlord and Tenant stipulate that “Tenant’s
Share” shall initially mean the percentage stated in Section ”D” of the
Summary of Basic Lease Information.

 

cc.                                 “Transfer” shall mean (a) an
assignment (direct or indirect, absolute or conditional, by operation of law or
otherwise) by Tenant of all or any portion of Tenant’s interest in this Lease
or the leasehold estate created hereby, (b) a sublease of all or any
portion of the Premises, or (c) the grant or conveyance by Tenant of any
concession or license within the Premises. 
If Tenant is a corporation, then any transfer of this Lease by merger,
consolidation or dissolution, or by any change in ownership or power to vote a
majority of the voting stock (being the shares of stock regularly entitled to
vote for the election of directors) in Tenant outstanding at the time of execution
of this Lease shall constitute a Transfer. 
If Tenant is a partnership having one or more corporations as general
partners, the preceding sentence shall apply to each corporation as if the
corporation alone had been the Tenant hereunder.  If Tenant is a general or limited partnership, joint venture or
other form of association, the Transfer of a majority of the ownership
interests therein shall constitute a Transfer. 
“Transferee” shall
mean the assignee, sublessee, pledgee, concessionaire, licensee or other
transferee of all or any portion of Tenant’s interest in this Lease, the
leasehold estate created hereby or the Premises.

 

dd.                               “Work Letter Agreement” shall mean the
agreement, if any, attached as Exhibit D hereto between Landlord
and Tenant for the construction of improvements in the Premises.

 

 

A-3

 

EXHIBIT B

 

PREMISES

 

Attached floor plan of the Premises.

 

 

 

[GRAPHIC
OF PREMISES DISPLAYED HERE]

 

 

 

 

EXHIBIT C

 

RULES AND
REGULATIONS

 

Tenant shall comply with the
following Rules and Regulations. 
Landlord shall not be responsible to Tenant for the nonperformance of
any of these Rules and Regulations by Tenant, any other tenant, or any visitor,
licensee, agent, or other person or entity.

 

1.             Security;
Admission to Building.  Landlord may
from time to time adopt appropriate systems and procedures for the security or
safety of the Building, any persons occupying, using or entering the Building,
or any equipment, finishings or contents of the Building, and each tenant shall
comply with such systems and procedures. 
Landlord shall in no case be liable for damages for any error with
regard to the admission to or exclusion from the Building of any person.  In the event of an invasion, mob, riot,
public excitement or other commotion, Landlord reserves the right to prevent
access to the Building during the continuance of the same by closing of the
doors of the Building or any other reasonable method, for the safety of the
tenants and protection of the Building and property in the Building.

 

2.             Conduct
and Exclusion or Expulsion. 
Tenant’s employees, visitors, and licensees shall not loiter in or
interfere with the use of the Parking Facility or the Complex’s driveway or
parking areas, nor consume alcohol in the Common Areas of the Complex or the
Parking Facility.  The sidewalks, halls,
passages, exits, entrances, elevators, escalators, and stairways of the
Building will not be obstructed by any tenants or used by any of them for any
purpose other than for ingress to and egress from their respective
premises.  The halls, passages, exits,
entrances, elevators, escalators, and stairways are not for the general public,
and Landlord may control and prevent access to them by all persons whose
presence, in the reasonable judgment of Landlord, would be prejudicial to the
safety, character, reputation and interests of the Building and its
tenants.  In determining whether access
will be denied, Landlord may consider attire worn by a person and its
appropriateness for an office building, whether shoes are being worn, use of
profanity, either verbally or on clothing, actions of a person (including
without limitation spitting, verbal abusiveness, and the like), and such other
matters as Landlord may reasonably consider appropriate.

 

3.             Signs,
Notices and Decorations.  No sign,
placard, picture, decoration, name, advertisement or notice (collectively
“Material”) visible from the exterior of any tenant’s premises shall be
inscribed, painted, affixed or otherwise displayed by any tenant on any part of
the Building without the prior written consent of Landlord.  All approved signs or lettering will be
printed, painted, affixed or inscribed at the expense of the tenant desiring
such by a person approved by Landlord. 
Material visible from outside the Building will not be permitted.  Landlord may remove such Material without
any liability, and may charge the expense incurred by such removal to the
tenant in question.

 

4.             Curtains
and Decorations.  No awnings,
curtains, draperies, blinds, shutters, shades, screens, or other coverings,
hangings or decorations will be attached to, hung or placed in, or used in
connection with any window of the Building or the Premises without Landlord’s
prior written consent.

 

5.             Non–obstruction
of Light.  The sashes, sash doors,
skylights, windows, heating, ventilating, and air conditioning vents and doors
that reflect or admit light and air into the halls, passageways, tenant
premises, or other public places in the Building shall not be covered or obstructed
by any tenant, nor will any bottles, parcels or other articles or decorations
be placed on any window sills.

 

6.             Showcases.  No showcases or other articles will be put
in front of or affixed to any part of the exterior of the Building, nor placed
in the public halls, corridors or vestibules without the prior written consent
of Landlord.

 

7.             Cooking;
Use of Premises for Improper Purposes. 
No tenant will permit its Premises to be used for lodging or
sleeping.  No cooking will be done or
permitted by any tenant on its Premises, except in areas of the Premises which
are specially constructed for cooking as specifically provided in working
drawings approved by Landlord, so long as such use is in accordance with all 

 

 

 

applicable federal, state, and city laws,
codes, ordinances, rules and regulations. 
Microwave ovens and other Underwriters’ Laboratory (UL)–approved
equipment may be used in the Premises for heating food and brewing coffee, tea,
and similar beverages for employees and visitors.  The Premises shall not be used for the storage of merchandise or
for any improper, reasonably objectionable, or immoral purpose.

 

8.             Janitorial
Service.  No tenant will employ any
person or persons other than the cleaning service of Landlord for the purpose
of cleaning the premises, unless otherwise agreed by Landlord in writing.  If any tenant’s actions result in any
increased expense for any required cleaning, Landlord may assess such tenant
for such expenses.  Janitorial service
will not be furnished on nights to offices which are occupied after business
hours on those nights unless, by prior written agreement of Landlord, service
is extended to a later hour for specifically designated offices.

 

9.             Use
of Restrooms.  The toilets, urinals,
wash bowls and other plumbing fixtures will not be used for any purposes other
than those for which they were constructed, and no sweepings, rubbish, rags or
other foreign substances will be thrown in them.  All damages resulting from any misuse of the fixtures will be
borne by the tenant who, or whose servants, employees, agents, visitors or
licensees, have caused the damage.

 

10.           Defacement
of Premises or Building.  No tenant
will deface any part of the Premises or the Building.  Without the prior written consent of Landlord, no tenant will lay
linoleum or other similar floor covering so that it comes in direct contact
with the floor of such tenant’s premises. 
If linoleum or other similar floor covering is to be used, an
interlining of builder’s deadening felt will be first affixed to the floor by a
paste or other material soluble in water. 
The use of cement or other similar adhesive material is expressly
prohibited.  Except as permitted by
Landlord by prior written consent, Tenant shall not mark on, paint signs on,
cut, drill into, drive nails or screws into, or in any way deface the walls,
ceilings, partitions or floors of the Premises or of the Building, and any
defacement, damage or injury directly or indirectly caused by Tenant shall be
paid for by Tenant.  Pictures or
diplomas shall be hung on tacks or small nails; Tenant shall not use adhesive
hooks for such purposes.

 

11.           Locks;
Keys.  No tenant will alter, change,
replace or rekey any lock or install a new lock or a knocker on any door of the
Premises.  Landlord, its agent or
employee will retain a master key to all door locks on the Premises.  Any new door locks required by a tenant or
any change in keying of existing locks will be installed or changed by Landlord
following such tenant’s written request to Landlord and will be at such
tenant’s expense.  All new locks and
rekeyed locks will remain operable by Landlord’s master key.  Landlord will furnish to each tenant, free
of charge, two (2) keys to each door lock on its premises, and two (2) Building
access cards.  Landlord will have the
right to collect a reasonable charge for additional keys and cards requested by
any tenant.  Each tenant, upon
termination of its tenancy, will deliver to Landlord all keys and access cards
for the Premises and Building which have been furnished to such tenant.  Tenant shall keep the doors of the Premises
closed and securely locked when Tenant is not at the Premises.

 

12.           Furniture,
Freight and Equipment.  No
furniture, freight, packages, merchandise, or equipment of any kind may be
brought into the Building or carried up or down in the elevators, except
between those hours and in that specific elevator designated by Landlord or
otherwise upon consent of the Landlord, without prior notice to and consent of
Landlord.  Landlord may at any time restrict
the elevators and areas of the Building into which deliveries or messengers may
enter.  The elevator designated for
freight by Landlord will be available for use by all tenants in the Building
during the hours and pursuant to such procedures as Landlord may determine from
time to time.  The persons employed to
move Tenant’s equipment, material, furniture or other property in or out of the
Building must be acceptable to Landlord. 
A certificate or other verification of such insurance must be received and
approved by Landlord prior to the start of any moving operations.  Insurance must be sufficient, in Landlord’s
sole opinion, to cover all personal liability, theft or damage to the Building,
including without limitation floor coverings, doors, walls, elevators, stairs,
foliage and landscaping.  All moving
operations will be conducted at such times and in such a manner as Landlord may
direct, and all moving will take place during nonbusiness hours unless Landlord
otherwise agrees in writing.  The moving
tenant shall be responsible for the provision of Building security during all
moving operations, and shall be liable for all losses and damages sustained by
any party as a result of the failure to supply adequate security.  Landlord may prescribe the weight, size 

 

 

C-2

 

and position of all equipment, materials,
furniture or other property brought into the Building.  Heavy objects will, if considered necessary
by Landlord, stand on wood strips of such thickness as is necessary to
distribute the weight properly. 
Landlord will not be responsible for loss of or damage to any such
property from any cause, and all damage done to the Building by moving or
maintaining such property will be repaired at the expense of the moving
tenant.  Landlord may inspect all such
property to be brought into the Building and to exclude from the Building all
such property which violates any of these rules and regulations or the lease of
which these rules and regulations are a part. 
Supplies, goods, materials, packages, furniture and all other items of
every kind delivered to or taken from the Premises will be delivered or removed
through the entrance and route designated by Landlord.

 

13.           Inflammable
or Combustible Fluids or Materials; Noninterference of Others.  No tenant will use or keep in the Premises
or the Building any kerosene, gasoline, inflammable, combustible or explosive
fluid or material, or chemical substance other than limited quantities of them
reasonably necessary for the operation or maintenance of office equipment or
limited quantities of cleaning fluids and solvents required in the normal
operation of the Premises.  Without
Landlord’s prior written approval, no tenant will use any method of heating or
air conditioning other than that supplied by Landlord.  Tenant shall not waste electricity, water,
or air conditioning and shall cooperate fully with Landlord to insure the most
effective operation of the Building’s heating and air conditioning system.  No tenant will keep any firearms within the
Premises.  No tenant will use or keep,
or permit to be used or kept, any foul or noxious gas or substance in the
Premises, or permit or suffer the Premises to be occupied or used in any manner
offensive or objectionable to Landlord or other occupants of the Building by
reason of noise, odors or vibrations, nor interfere in any way with other
tenants or those having business in the Building.

 

14.           Address
of Building.  Landlord may, without
notice and without liability to any tenant, change the name and street address
of the Building.

 

15.           Use
of Building Name or Likeness. 
Landlord will have the right to prohibit any advertising by Tenant
mentioning the Building which, in Landlord’s reasonable opinion, tends to
impair the reputation of the Building or its desirability as a Building for
offices and, upon written notice from Landlord, Tenant will discontinue such
advertising.

 

16.           Animals,
Birds and Vehicles.  Tenant will not
bring any animals or birds into the Premises or Building, and will not permit
bicycles or other vehicles inside or on the sidewalks outside the Building,
except in areas designated from time to time by Landlord for such purposes.

 

17.           Off–Hour
Access.  All persons entering or
leaving the Building at any time other than the Building’s business hours shall
comply with such off–hour regulations as Landlord may establish and
modify from time to time.  Landlord may
limit or restrict access to the Building during such periods and shall not be
liable for any error with regard to the admission or exclusion of any person.

 

18.           Disposal
of Trash.  Each tenant will store
all its trash and garbage within its premises. 
No material will be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage without being
in violation of any law or ordinance governing such disposal.  All garbage and refuse disposal will be made
only through entryways and elevators provided for such purposes and at such
times as Landlord may designate.  No
furniture, appliances, equipment or flammable products of any type may be
disposed of in the Building trash receptacles.

 

19.           Disturbance
of Tenants.  Canvassing, peddling, soliciting
and distribution of handbills or any other written materials in the Building or
Parking Facility are prohibited, and each tenant will cooperate to prevent
same.

 

20.           Doors
to Public Corridors.  Each tenant
shall keep the doors of the Premises closed and locked, and shall shut off all
water faucets, water apparatus, and utilities before tenant or tenant’s
employees leave the Premises, so as to prevent waste or damage, and for any
default or carelessness in this regard Tenant shall be liable for all injuries
sustained by other tenants or occupants of the Building or Landlord.  On multiple–tenancy floors, all
tenants will keep the doors to the Building corridors closed at all times
except for ingress and egress.

 

 

C-3

 

21.           Concessions.  Tenant shall not grant any concessions,
licenses or permission for the sale or taking of orders for food or services or
merchandise in the Premises, install or permit the installation or use of any
machine or equipment for dispensing food or beverage in the Building, nor
permit the preparation, serving, distribution or delivery of food or beverages
in the Premises, without the prior written approval of Landlord and only in
compliance with arrangements prescribed by Landlord.  Only persons approved by Landlord shall be permitted to serve,
distribute or deliver food and beverage within the Building or to use the
public areas of the Building for that purpose.

 

22.           Telecommunication
and Other Wires.  Tenant may not
introduce Telecommunication wires or other wires into the Premises without
first obtaining Landlord’s approval of the method and location of such
introduction.

 

23.           Rules
Changes; Waivers.  Landlord reserves
the right at any time to change or rescind any one or more of these Rules and
Regulations or to make any additional reasonable Rules and Regulations that, in
Landlord’s judgment, may be necessary or helpful for the management, safety or
cleanliness of the Premises or Building; the preservation of good order; or the
convenience of occupants and tenants of the Building generally.  Landlord may waive any one or more of these
Rules and Regulations for the benefit of any particular tenant.  No waiver by Landlord shall be construed as
a waiver of those Rules and Regulations in favor of any other tenant, and no
waiver shall prevent Landlord from enforcing those Rules and Regulations
against a tenant or any other tenant in the future.  Tenant shall be considered to have read these Rules and
Regulations and to have agreed to abide by them as a condition of Tenant’s
occupancy of the Premises.

 

 

C-4

 

EXHIBIT D

 

INTENTIONALLY LEFT
BLANK

 

 

 

EXHIBIT D1

 

INTENTIONALLY LEFT
BLANK

 

 

 

EXHIBIT D2

 

INTENTIONALLY LEFT
BLANK

 

 

 

EXHIBIT E

 

LEGAL DESCRIPTION OF LAND

 

Beginning at a point which is North 0°08’51”
East along the Quarter Section line 908.56 feet, and North 89°04’36” East
740.83 feet, and North 55°02’48” East 206.85 feet from the West Quarter Corner
of Section 23, Township 2 South, Range 1 East, Salt Lake Base and Meridian; and
running thence North 34°55’16” West 67.93 feet to a point on the South Right–of–Way
line of I–215 and a point on a 2076.90 foot radius curve to the left the
chord of which bears North 62°36’26” East; thence Northeasterly along said
South line and curve through a central angle of 5°57’01” a distance of 215.69
feet; thence North 67°29’16” East along said South line 183.64 feet; thence
South 31°38’10” East 111.32 feet; thence South 70°30’09” East 57.70 feet;
thence South 34°39’50” East 284.29 feet; thence South 11°06’23” East 28.44
feet; thence South 42°36’15” East 63.15 feet; thence South 64°43’27” East 71.26
feet; thence South 32°54’51” West 100.16 feet to a point on a 210.00 foot
radius curve to the left the chord of which bears South 88°59’48” West; thence
Westerly along said curve through a central angle of 67°50’08” a distance of
248.63 feet; thence South 55°04’44” West 161.13 feet to a point of a 835.00
foot radius curve to the right the chord of which bears South 55°10’54” West;
thence Southwesterly along said curve through a central angle of 0°12’21” a
distance of 3.00 feet; thence North 34°55’16” West 499.58 feet to the point of
beginning.  Contains 234,930 square feet
or 5.3932 acres.

 

 

 

EXHIBIT F

 

INTENTIONALLY LEFT
BLANK

 

 

 

EXHIBIT G

 

ACKNOWLEDGMENT OF
LEASE COMMENCEMENT DATE

 

STATEMENT OF
CONFIRMATION AND

ACKNOWLEDGMENT OF
LEASE COMMENCEMENT DATE

 

In accordance with that
certain Lease Agreement between 2855 E. Cottonwood Parkway, L.C., as Landlord
and the undersigned, as Tenant (the “Lease”), the Tenant hereby confirms the
following:

 

1.             Construction of the Tenant Improvements is Substantially
Complete, and the Lease Term shall commence as of                                            ,
for a term of          years,                     months, and          days, ending on                                  .

 

2.             In accordance with the Lease, Base Rent shall begin to
accrue on                             , in
the amount of                                                  DOLLARS ($                        ).

	
  LANDLORD:

  	
   

  
	
   

  	
   

  
	
  2855 E. COTTONWOOD
  PARKWAY, L.C., a 

  Utah limited liability company, by its following 

  Managing Member

  
	
   

  
	
  COTTONWOOD CORPORATE
  CENTER,

  L.C., a Utah limited liability company, by its 

  following member

  
	
   

  
	
   

  	
  C&E HOLDINGS
  PARTNERSHIP, a Utah 

  general partnership, by its Managing 

  General Partner

  
	
   

  	
   

  
	
   

  	
  COTTONWOOD EQUITIES,
  LTD., a 

  Texas limited partnership, by Cottonwood 

  Realty Services, L.L.C., its general partner

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  JOHN L. WEST, Managing
  Director

  
	
   

  	
   

  
	
  TENANT:

  
	
   

  
	
  DISCOUNTSDIRECT

  
	
   

  
	
  By:

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  
			

 

 

 

EXHIBIT H

 

STATEMENT OF
TENANT IN RE: LEASE

[Tenant letterhead]

Teachers Insurance and
Annuity

Association of America

730 Third Avenue

New York, NY 10017

 

RE:                            TIAA
APPLICATION #UT00063

TIAA
MTGE. #000445900

Cottonwood
Corporate Center, Building 10

2855
East Cottonwood Parkway

Salt
Lake City, UT 84121

Suite
No. 500

 

Ladies and Gentlemen:

 

It is our understanding that
you have committed to place a mortgage upon the subject premises and as a
condition precedent thereof have required this certification of the
undersigned.

 

The undersigned, as Lessee,
under that certain Lease dated                       ,
19          , made with 2855 E. COTTONWOOD
PARKWAY, L.C., as Lessor, hereby ratifies said Lease and certifies that:

 

1.                                       The
“Commencement Date” of said Lease is                  ,
19          ; and

 

2.                                       the
undersigned is presently solvent and free from reorganization and/or bankruptcy
and is in occupancy, open, and conducting business with the public in the
premises; and

 

3.                                       the
operation and use of the premises do not involve the generation, treatment,
storage, disposal or release of a hazardous substance or a solid waste into the
environment other than to the extent necessary to conduct its ordinary course
of business in the premises and in accordance with all applicable environmental
laws, and that the premises are being operated in accordance with all
applicable environmental laws, zoning ordinances and building codes; and

 

4.                                       the
current base rental payable pursuant to the terms of said Lease is $                    per annum; and further, additional rental pursuant to said Lease
is payable as follows:                                                                                 ;
and

 

5.                                       said
Lease is in full force and effect and has not been assigned, modified,
supplemented or amended in any way (except by agreements(s) dated                            ), and neither party
thereto is in default thereunder; and

 

6.                                       the
Lease described above represents the entire agreement between the parties as to
the leasing of the premises; and

 

7.                                       the
term of said Lease expires on                                      ;
and

 

8.                                       all
conditions under said Lease to be performed by the Lessor have been satisfied,
including, without limitation, all co–tenancy requirements thereunder, if
any; and

 

9.                                       all
required contributions by Lessor to Lessee on account of Lessee’s improvements
have been received; and

 

 

 

10.                                 on
this date there are no existing defenses or offsets, claims or counterclaims
which the undersigned has against the enforcement of said Lease by the Lessor;
and

 

11.                                 no
rental has been paid in advance and no security (except the security deposit in
the amount of $                                   )
has been deposited with Lessor; and

 

12.                                 Lessee’s
floor area is                                            square feet (rentable); and

 

13.                                 The
most recent payment of current basic rental was for the payment due on                                         , and
all basic rental and additional rental payable pursuant to the terms of the
Lease have been paid up to said date; and

 

14.                                 the
undersigned acknowledges notice that Lessor’s interest under the Lease and the
rent and all other sums due thereunder will be assigned to you as part of the
security for a mortgage loan by you to Lessor. 
In the event that Teachers Insurance and Annuity Association of America,
as lender, notifies the undersigned of a default under the mortgage and demands
that the undersigned pay its rent and all other sums due under the Lease to
lender, Lessee agrees that it shall pay its rent and all such other sums to
lender.

 

 

Very truly yours,

 

 

DISCOUNTSDIRECT

 

	
   

  
	
  By:

  	
   

  
	
  Its:

  	
   

  
	
  Date:

  	
   

  

 

 

H-2

 

SUBORDINATION, NON–DISTURBANCE

AND ATTORNMENT AGREEMENT

 

THIS SUBORDINATION, NON–DISTURBANCE
AND ATTORNMENT AGREEMENT (this “Agreement”) is made by and between TEACHERS
INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, a New York corporation with
offices at 730 Third Avenue, New York, New York 10017 (“Lender”) and
DISCOUNTSDIRECT, a                                    with its principal place of business at                                                              (“Tenant”).

 

RECITALS

 

A.            Lender has made or is about to make a loan (together with
all advances and increases, the “Loan”) to 2855 E. COTTONWOOD PARKWAY, L.C., a
limited liability company (“Borrower”).

 

B.            Borrower, as Landlord, and Tenant have entered into a
lease dated                          , 19          , as amended by amendments dated                      , 19           (the “Lease”) which leased to Tenant Suite No.             (the “Leased Space”) located in the Property (defined below).

 

C.            The Loan is or will be secured by the Trust Deed,
Assignment of Leases and Rents, Fixture Filing Statement and Security Agreement
recorded or to be recorded in the official records of the County of Salt Lake,
State or Commonwealth of Utah (together with all advances, increases,
amendments or consolidations, the “Mortgage”) and the Assignment of Leases and
Rents recorded or to be recorded in such official records (together with all
amendments or consolidations, the “Assignment”), assigning to Lender the Lease
and all rent, additional rent and other sums payable by Tenant under the Lease
(the “Rent”).

 

D.            The Mortgage encumbers the real property, improvements
and fixtures located at 2855 East Cottonwood Parkway in the County of Salt
Lake, State or Commonwealth of Utah, and described on Exhibit ”A” (the
“Property”).

 

IN CONSIDERATION of the
mutual agreements contained in this Agreement, Lender and Tenant agree as
follows:

 

1.             The Lease and all of Tenant’s rights under the Lease are
and will remain subject and subordinate to the lien of the Mortgage and all of
Lender’s rights under the Mortgage and Tenant will not subordinate the Lease to
any other lien against the Property without Lender’s prior consent.

 

2.             This Agreement constitutes notice to Tenant of the
Mortgage and the Assignment and, upon receipt of notice from Lender, Tenant
will pay the Rent as and when due under the Lease to Lender and the payments
will be credited against the Rent due under the Lease.

 

3.             Tenant does not have and will not acquire any right or
option to purchase any portion of or interest in the Property.

 

4.             Tenant and Lender agree that if Lender exercises its
remedies under the Mortgage or the Assignment and if Tenant is not then in
default under this Agreement and if Tenant is not then in default beyond any
applicable grace and cure periods under the Lease:

 

(a)           Lender
will not name Tenant as a party to any judicial or non–judicial
foreclosure or other proceeding to enforce the Mortgage unless joinder is
required under applicable law but in such case Lender will not seek affirmative
relief against Tenant, the Lease will not be terminated and Tenant’s possession
of the Leased Space will not be disturbed;

 

(b)           If
Lender or any other entity (a “Successor Landlord”) acquires the Property
through foreclosure, by other proceeding to enforce the Mortgage or by deed–in–lieu
of foreclosure (a “Foreclosure”), Tenant’s possession of the Leased Space will
not be disturbed and the Lease will continue in full force and effect between
Successor Landlord and Tenant; and

 

(c)           If,
notwithstanding the foregoing, the Lease is terminated as a result of a
Foreclosure, a lease between Successor Landlord and Tenant will be deemed
created, with no further 

 

 

H-3

 

instrument required, on the same terms as the
Lease except that the term of the replacement lease will be the then unexpired
term of the Lease.  Successor Landlord
and Tenant will execute a replacement lease at the request of either.

 

5.             Upon Foreclosure, Tenant will recognize and attorn to
Successor Landlord as the landlord under the Lease for the balance of the
term.  Tenant’s attornment will be self–operative
with no further instrument required to effectuate the attornment except that at
Successor Landlord’s request, Tenant will execute instruments reasonably
satisfactory to Successor Landlord confirming the attornment.

 

6.             Successor Landlord will not be:

 

(a)           liable
for any act or omission of any prior landlord under the Lease occurring before
the date of the Foreclosure except for repair and maintenance obligations of a
continuing nature imposed on the landlord under the Lease;

 

(b)           required
to credit Tenant with any Rent paid more than one month in advance or for any
security deposit unless such Rent or security deposit has been received by
Successor Landlord;

 

(c)           bound
by any amendment, renewal or extension of the Lease that is inconsistent with
the terms of this Agreement or is not in writing and signed both by Tenant and
landlord;

 

(d)           bound
by any reduction of the Rent unless the reduction is in connection with an
extension or renewal of the Lease at prevailing market terms or was made with
Lender’s prior consent;

 

(e)           bound
by any reduction of the term(1) of the Lease or any termination, cancellation
or surrender of the Lease unless the reduction, termination, cancellation or
surrender occurred during the last 6 months of the term or was made with
Lender’s prior consent;

 

    (1)       For purposes of this subparagraph “the
term of the Lease” includes any renewal term after the right to renew has been
exercised.

 

 

(f)            bound
by any amendment, renewal or extension of the Lease entered into without
Lender’s prior consent if the Leased Space represents 50% or more of the net
rentable area of the building in which the Leased Space is located;

 

(g)           [Intentionally
deleted];

 

(h)           subject
to any credits, offsets, claims, counterclaims or defenses that Tenant may have
that arose prior to the date of the Foreclosure or liable for any damages
Tenant may suffer as a result of any misrepresentation, breach of warranty or
any act of or failure to act by any party other than Successor Landlord;

 

(i)            bound
by any obligation to make improvements to the Property, including the Leased
Space, to make any payment or give any credit or allowance to Tenant provided
for in the Lease or to pay any leasing commissions arising out of the Lease,
except that Successor Landlord will be:

 

(i)             bound by any such
obligations provided for in the Lender–approved form lease;

 

(ii)          bound by any such
obligations if the overall economic terms of the Lease (including the economic
terms of any renewal options) represented market terms for similar space in
properties comparable to the Property when the Lease was executed; and

 

 

H-4

 

(iii)       bound to comply with the
casualty and condemnation restoration provisions included in the Lease provided
that Successor Landlord receives the insurance or condemnation proceeds;

 

or;

 

(j)            liable
for obligations under the Lease with respect to any off–site property or
facilities for the use of Tenant (such as off–site leased space or
parking) unless Successor Landlord acquires in the Foreclosure the right, title
or interest to the off–site property.

 

7.             Lender will have the right, but not the obligation, to
cure any default by Borrower, as landlord, under the Lease.  Tenant will notify Lender of any default
that would entitle Tenant to terminate the Lease or abate the Rent and any
notice of termination of abatement will not be effective unless Tenant has so
notified Lender of the default and Lender has had a 30–day cure period
(or such longer period as may be necessary if the default is not susceptible to
cure within 30 days) commencing on the latest to occur of the date on which
(i) the cure period under the Lease expires; (ii) Lender receives the
notice required by this paragraph; and (iii) Successor Landlord obtains
possession of the Property if the default is not susceptible to cure without
possession.

 

8.             All notices, requests or consents required or permitted
to be given under this Agreement must be in writing and sent by certified mail,
return receipt requested or by nationally recognized overnight delivery service
providing evidence of the date of delivery, with all charges prepaid, addressed
to the appropriate party at the address set forth above.

 

9.             Any claim by Tenant against Successor Landlord under the
Lease or this Agreement will be satisfied solely out of Successor Landlord’s
interest in the Property and Tenant will not seek recovery against or out of
any other assets of Successor Landlord. 
Successor Landlord will have no liability or responsibility for any
obligations under the Lease that arise subsequent to any transfer of the
Property by Successor Landlord.

 

10.           This Agreement is governed by and will be construed in
accordance with the laws of the state or commonwealth in which the Property is
located.

 

11.           Lender and Tenant waive trial by jury in any proceeding
brought by, or counterclaim asserted by, Lender or Tenant relating to this
Agreement.

 

12.           If there is a conflict between the terms of the Lease and
this Agreement, the terms of this Agreement will prevail as between Successor
Landlord and Tenant.

 

13.           This Agreement binds and inures to the benefit of Lender
and Tenant and their respective successors, assigns, heirs, administrators,
executors, agents and representatives.

 

14.           This Agreement contains the entire agreement between
Lender and Tenant with respect to the subject matter of this Agreement, may be
executed in counterparts that together constitute a single document and may be
amended only by a writing signed by Lender and Tenant.

 

15.           Tenant certifies that: 
the Lease represents the entire agreement between the Landlord under the
Lease and Tenant regarding the Leased Space; the Lease is in full force and
effect; neither party is in default under the Lease beyond any applicable grace
and cure periods and no event has occurred which with the giving of notice or
passage of time would constitute a default under the Lease; Tenant has entered
into occupancy and is open and conducting business in the Leased Space; and all
conditions to be performed to date by the Landlord under the Lease have been
satisfied.

 

 

H-5

 

IN WITNESS WHEREOF, Lender
and Tenant have executed and delivered this Agreement as                                           ,
1998.

 

	
  LENDER:

  	
  TEACHERS INSURANCE AND
  ANNUITY 

  ASSOCIATION OF AMERICA, a New York corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TENANT:

  	
  DISCOUNTSDIRECT, a 

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

H-6

 

ACKNOWLEDGMENT

STATE OF                                            )

                                                                :ss.

COUNTY OF                                         )

 

On this the             day of                                     199         ,
before me personally appeared                                                         who acknowledged himself to be the                                    of                                                           ,
a corporation, and that he, as such                                                                  being authorized so to do, executed the foregoing instrument for
the purposes therein contained.

 

 

 

	
  NOTARY PUBLIC

  
	
   

  
	
  Residing at

  	
   

  

My Commission Expires:

 

STATE OF                                            )

                                                                :ss.

COUNTY OF                                         )

 

On this the             day of                                     199         ,
before me personally appeared                                                         who acknowledged himself to be the                                    of                                                           ,
a corporation, and that he, as such                                                                  being authorized so to do, executed the foregoing instrument for
the purposes therein contained.

 

 

 

	
  NOTARY PUBLIC

  
	
   

  
	
  Residing at

  	
   

  

My Commission Expires:

 

 

 

 

H-7

 

EXHIBIT ”A”

 

The following described real property is located in
Salt Lake County, Utah:

 

PARCEL 1
(“COTTONWOOD CORPORATE CENTER PARCEL 11”):

 

Beginning at a point which is North 0°08’51” East
along the Quarter Section line 908.56 feet, and North 89°04’36” East 740.83
feet, and North 55°02’48” East 206.85 feet from the West Quarter Corner of
Section 23, Township 2 South, Range 1 East, Salt Lake Base and Meridian; and
running thence North 34’5516” West 67.93 feet to a point on the South Right–of–Way
line of 1–215 and a point on a 2076.90 foot radius curve to the left the
chord of which bears North 62°36’26” East; thence Northeasterly along said
South line and curve through a central angle of 5 °57’01” a distance of 215.69
feet; thence North 67°29’16” East along said South line 183.64 feet; thence
South 31°38’10” East 111.32 feet; thence South 70°30’09” East 57.70 feet;
thence South 34°39’50” East 284.29 feet; thence South 11°06’23” East 28.44
feet; thence South 42°36’15” East 63.15 feet; thence South 64°43’27” East 71.26
feet; thence South 32°54’51” West 100.16 feet to a point on a 210.00 foot
radius curve to the left the chord of which bears South 88°59’48” West; thence
Westerly along said curve through a central angle of 67°50’08” a distance of
248.63 feet; thence South 55°04’44” West 161.13 feet to a point of a 835.00
foot radius curve to the right the chord of which bears South 55°10’54” West;
thence Southwesterly along said curve through a central angle of 0°12’21” a
distance of 3.00 feet; thence North 34°55’16” West 499.58 feet to the point of
beginning.  Contains 234,930 square feet
or 5.3932 acres.

 

PARCEL 2
(“COMMON ROADWAY”):

 

A perpetual, nonexclusive right–of–way and
easement for vehicular and pedestrian ingress and egress, appurtenant to PARCEL
1, as established by a Declaration of Easements, Covenants and Restrictions
recorded January 17, 1996, as Entry No. 6259074, in Book 7311, at page 821
of the official records of the Salt Lake County Recorder, as amended by a First
Amendment to Declaration of Easements, Covenants and Restrictions, recorded
July 3, 1996, as Entry No. 6398547, in Book 7437, at page 265 of the
official records of the Salt Lake County Recorder, over the following described
property:

 

BEGINNING at a point which is North 0°08’51” East
along the Section line 447.50 feet and South 89°49’13 “ East 50.00 feet from
the West Quarter Corner of Section 23, Township 2 South, Range 1 East, Salt
Lake Base and Meridian, and running thence North 0’08’51” East 71.00 feet;
thence South 89°49’13” East 669.22 feet; thence North 0°10’47” East 12.00 feet
to a point of a 787.50 foot radius curve to the left, the chord of which bears
North 72°37’45” East; thence Easterly along the arc of said curve and through a
central angle of 35°06’03” a distance of 482.44 feet to a point of tangency;
thence North 55°04’44” East 161.13 feet to a point of a 257.50 foot radius
curve to the right, the chord of which bears South 81°12’57” East; thence
Easterly along the arc of said curve and through a central angle of 87°24’39” a
distance of 392.84 feet to a point of tangency; thence South 37°30’37” East
388.28 feet to a point of a 282.50 foot radius curve to the left, the chord of
which bears South 57°30’40” East; thence Southeasterly along the arc of said
curve and through a central angle of 40°00’07” a distance of 197.23 feet to a
point of tangency; thence South 77°30’44” East 203.08 feet; thence South
35°38’28” East 52.78 feet to the West right–of–way line of 3000
East Street; thence South 12°27’22” West along said West line 71.77 feet;
thence North 77°30’44” West 147.86 feet to a point of a 693.16 foot radius
curve to the right, the chord of which bears North 71°09’19” West; thence
Northwesterly along the arc of curve and through a central angle of 13°28’28” a
distance of 163.01 feet to a point of a compound curve to the right, the radius
point of which is North 22°43’23” East 377.50 feet; thence Northwesterly along
the arc of said curve and through a central angle of 29°46’ a distance of
196.12 feet to a point of tangency; thence North 37°30’37” West 388.28 feet to
a point of a 162.50 foot radius curve to the left, the chord of which bears
North 81°12’57” West; thence Westerly along the arc of said curve and through a
central angle of 87°24’39” a distance of 247.91 feet to a point of tangency;
thence South 55°04’44” West 161.13 feet to a point of a 882.50 foot radius curve
to the right, the chord of which bears South 72°37’45” West; thence Westerly
along the arc of said curve and through a central angle of 35°06’03” a distance
of 540.64 feet to a point of tangency; thence North 89°49’13” West 441.91 feet;
thence North 0°10’47” East 12.00 feet; thence North 89°49’13” West 227.27 feet
to the point of BEGINNING.

 

 

H-8

 

EXHIBIT I

 

LEASE GUARANTY

 

                THIS
LEASE GUARANTY (the “Guaranty”) is made and given as of the                  day of                    ,
19          , by                                                          (the “Guarantors”) in favor of 2855 E.
Cottonwood Parkway, L.C. (the “Landlord”).

 

RECITALS:

 

A.            Landlord has on this date entered into that certain Lease
Agreement, dated                           ,
19           (the “Lease”), with                                                  (the “Tenant”) covering certain office space
located in an office building owned by Landlord, said office space being more
particularly described in the Lease.

 

B.            Guarantor(s) are the                                              (president, vice–president, secretary,
treasurer, shareholder, director, parent, subsidiary, related company, etc.) of
the Tenant, and are financially interested in the business of Tenant to be
conducted under the Lease.

 

C.            Landlord is willing to enter into the Lease only on the
precondition that the Guarantor(s) make and give this Guaranty.

 

WITNESSETH:

 

NOW, THEREFORE, in
consideration of the Recitals and to induce Landlord to enter into the Lease,
the Guarantor(s), for themselves and for their heirs, personal representatives,
successors and assigns, do hereby agree and covenant as follows:

 

24.           General
Guaranty.  Guarantor hereby
guarantees the full, prompt and complete payment by Tenant of each payment and
other charge due under the Lease and the performance of every obligation of
Tenant under the Lease (said payments and performances being collectively
referred to as the “Obligations”).  If
Tenant, or his heirs, personal representatives, successors or assigns, shall
default at any time during the term of this Guaranty in the performance of the
Obligations on Tenant’s part to be performed under the terms of the Lease,
Guarantor shall, on written demand of Landlord, perform such Obligations of
Tenant strictly in accordance with the terms and provisions of the Lease.

 

25.           Term.  This Guaranty shall remain and continue in
full force and effect for the duration of the term of the Lease and of every
renewal or extension thereof.  Landlord
may enforce the terms of this Guaranty after the expiration of the Lease or any
extensions or renewals thereof with respect to any breach or default which
occurred during the term of the Lease or any extensions or renewals
thereof.  The above notwithstanding,
this Guarantee may be withdrawn before the end of the Lease Term based upon
terms mutually agreeable to both Landlord and Tenant.

 

26.           Exhaustion
of Remedies.  Landlord and its successors
and assigns may proceed to exercise any right or remedy which it or they may
have under this Guaranty against Guarantor without pursuing or exhausting any
rights or remedies which it or they might have against the Tenant under the
Lease or with respect to any other security, guaranty, surety or
indemnification agreement for performance of the Obligations.

 

27.           Acceptance
of Lease Terms.  Guarantor hereby
assents to and accepts all of the terms of the Lease and hereby waives notice
of acceptance of this Guaranty and also presentment, demand, protest and notice
of dishonor of any and all of the Obligations, and promptness in commencing
suit against any party thereto or liable thereon and/or in giving any notice to
or making any claim or demand hereunder upon the Guarantor.  No action or omission of any kind on the
part of Landlord or any successor or assign which does not amount to a breach
or default by Landlord under the Lease shall in any event impair this Guaranty.

 

28.           Modifications.  Guarantor hereby consents and agrees that
Landlord or its successors and assigns may at any time or from time to time in
its discretion:  (a) extend or
change the time of 

 

 

 

performance
of all or any of the Obligations; and (b) settle or compromise with Tenant
any or all of the Obligations, all in such manner and upon such terms as
Landlord and its successors and assigns may deem proper, and without notice to
or further assent from Guarantor, it being hereby agreed that Guarantor shall
be and remain bound by the Guaranty, notwithstanding any such change,
settlement, compromise, sale, renewal or extension.

 

29.           Authority.  Guarantor hereby represents and warrants
that:  (a) it has full power, right
and authority to execute and deliver and to perform all obligations under this
Guaranty; (b) this Guaranty constitutes the legal, valid and binding
obligation of Guarantor, enforceable against each of them in accordance with
its terms; and (c) there are no pending or threatened actions or
proceedings before any court or administrative agency which may materially and
adversely affect the financial condition or operations of any Guarantor, except
as have been expressly disclosed to Landlord in writing.

 

30.           Notices.  All communications and notices to any
Guarantor shall be in writing and mailed registered or certified mail, return
receipt requested, telegraphed or delivered to such Guarantor or its successors
and assigns, addressed to them or it at the address set forth below their or
its name on the signature page hereof or at such other address as such party
shall hereafter supply to the other parties in the manner herein provided for
giving of notice.

 

31.           Miscellaneous
Representations.  Guarantor hereby
represents and agrees that this is a continuing Guaranty and (a) shall remain
in full force and effect and be binding upon each Guarantor notwithstanding any
bankruptcy, reorganization, liquidation, termination, dissolution, appointment
of a receiver, or insolvency of Tenant or any successor or assign of Tenant;
(b) shall be binding upon each Guarantor, jointly and severally;
(c) shall inure to the benefit of and be enforceable by Landlord and its
successors, personal representatives, assigns, etc.; (d) shall be deemed
to have been made under and shall be governed by the laws of the State of Utah
in all respects, including, without limitation, matters of construction,
validity, performance and (e) shall not be waived, altered, modified or
amended as to any of its terms or provisions, except in writing duly signed by
Landlord or its successors and assigns.

 

32.           Severability.  Any provisions of this Guaranty which may be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction.

 

33.           Indemnification.  Guarantor shall indemnify, pay and hold Landlord
harmless from and against all costs and expenses (including court costs and
reasonable attorneys’ fees) incurred by Landlord in any enforcement or
attempted enforcement of this Guaranty against Guarantor and its successors and
assigns, whether incurred with or without suit, or before or after judgment.

 

34.           Governing
Law.  The interpretation of this
Lease shall be governed by the laws of the State of Utah.  Guarantor hereby expressly and irrevocably
agrees that Landlord may bring any action or claim to enforce the provisions of
this Lease in the State of Utah, County of Salt Lake, and the Guarantor
irrevocably consents to personal jurisdiction in the State of Utah for the
purposes of any such action or claim. 
Guarantor further irrevocably consents to service of process in
accordance with the provisions of the laws of the State of Utah.  Nothing herein shall be deemed to preclude
or prevent Landlord from bringing any action or claim to enforce the provisions
of this Lease in any other appropriate place or forum.

 

	
  DATED this  17 day of   Dec., 1998.

  	
   

  
	
   

  	
   

  
	
  GUARANTORS:

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Rob Brazel

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
				

 

 

I-2EXHIBIT
10.14

 

Intellectual
Property Assignment Agreement

 

This Intellectual Property Assignment Agreement (“Agreement”)
is made and entered into as of February 28, 2002 (“Effective Date”), by and
between Overstock.com, Inc., a Utah corporation with offices at 6322 South,
3000 East, Suite 100, Salt Lake City, Utah 84121, its subsidiaries, affiliates,
successors and assigns (“Company”)
and Douglas Greene, an individual (“Developer”).

 

WHEREAS, prior to becoming an employee of Company and
during his employment at Company, Developer created the items set out in Schedule
A to this Agreement (“Technology”);
and

 

WHEREAS, Company and Developer entered into a License
Agreement dated as of February 5, 1999 in which Developer granted Company a
license to the Technology (the “Prior
Agreement”)

 

WHEREAS, Company and Developer agree to enter into
this Agreement in which Developer assigns to Company all of his right, title
and interest in the Technology; and

 

WHEREAS, both Company and Developer intend for this
Agreement to supersede all previous oral and written agreements, communications
and understandings between them regarding the Technology, including, but not
limited to the Prior Agreement; and

 

WHEREAS, in consideration for Developer’s agreement to
assign the Technology to the Company and to terminate the Prior Agreement, the
Company agrees to pay Developer $500;

 

NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and premises herein contained, the parties hereto agree as
follows:

 

1.     Assignment.  Developer
hereby irrevocably assigns to the Company all right, title and interest in and
to the Technology, including but not limited to the following: (i) all
precursors, portions and works in progress with respect thereto and all
technology, works of authorship, information, know-how, processes, methods
and/or techniques conceived of or incorporated into the Technology; (ii)
materials and tools relating to the Technology or to the development, support
or maintenance of the Technology; (iii) all copyrights, patents, trade secrets,
trademarks and all other intellectual property rights related to or embodied in
the Technology and (iv) all right to bring an action for past, present or
future infringements of the Technology by a third party.

2.     Termination of Prior Agreement.  Company and Developer hereby agree that the
Prior Agreement is terminated in its entirety as of the date of this Agreement.

3.     Consideration.  Company agrees to pay Developer $500 on the date of this Agreement and
such payment shall be the only consideration required of the Company with
respect to the subject matter of this Agreement.

 

 

4.     Further Assurances.  Developer agrees to assist the Company in
every way to evidence, record and perfect the Assignment of the Technology set
out in Section 1 of this Agreement and to apply for and obtain patents,
copyrights and other statutory or common law protections for the Technology in
any country and to enforce, maintain or defend such rights as necessary.  Specifically, Developer will execute all
documents the Company may require in applying for and in obtaining such
patents, copyrights and other statutory or common law protections.  If the Company is unable for any reason
whatsoever to secure the Developer’s signature to any document it is entitled
to under this Section 3, Developer hereby irrevocably designates and appoints
the Company and its duly authorized officers and agents, as his agents and
attorneys-in-fact with full power of substitution to act for and on his behalf
and instead of Developer, to execute and file any such document or documents
and to do all other lawfully permitted acts to further the purposes of the
foregoing with the same legal force and effect as if executed by Developer.

 

5.     Warranties.  Developer represents and warrants to the Company (i)
that he has the right to enter into this Agreement; (ii) that he alone owns all
right, title and interest to the Technology; (iii) that the Technology was
developed and created only by him; (iv) that he has not assigned, transferred,
licensed, pledged or otherwise encumbered the Technology or agreed to do so;
and (v) that the Technology does not violate, infringe or misappropriate any
third party’s rights.

 

6.     Governing Law.  This
Agreement will be governed by the laws of the State of Utah.

7.     Miscellaneous.  Both parties agree that this Agreement is
the complete and exclusive statement of the mutual understanding of the parties
and supersedes and cancels all previous written and oral agreements and
communications relating to the subject matter of this Agreement.

 

IN WITNESS WHEREOF, the parties have signed below to indicate their
acceptance of the terms of this Agreement.

 

 

	
  DEVELOPER

  	
   

  	
  COMPANY

  
	
   

  	
   

  	
   

  
	
  /s/  Douglas Greene

  	
   

  	
  Overstock.com, Inc.

  
	
  Douglas Greene

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jason
  Lindsey

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Jason Lindsey

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  

 

2

 

 

 

 

Schedule
A

Technology

 

 

Application Server
Technology (AST).

Multi-platform
internet software development facility and supporting middle level software, including,
without limitation, the following components: AST Development Module, AST
Enablement Module.   AST enables
software developers to easily create web-enabled applications which can be
hosted across numerous hardware platforms, including Windows 2000, Windows NT,
Linux, Unix, IBM AS400 and IBM MVS.  AST
supports development in C and C++.

 

 

3

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