OFFICE BUILDING LEASE

EXHIBIT 10.17

5720 PEACHTREE PARKWAY

5720 Peachtree Parkway

Norcross, Georgia 30092

OFFICE BUILDING LEASE

By and Between

WKK ATLANTA INVESTMENTS, L.P.,

a Georgia limited partnership,

as Landlord,

and

DIGITAL INSIGHT CORPORATION,

a Delaware corporation,

as Tenant

Table of Contents

 

 

INDEX OF MAJOR DEFINED TERMS

 

OFFICE BUILDING LEASE

THIS OFFICE BUILDING LEASE (the “Lease”), made this 6 day of May, 2005 (the “Effective Date”), is entered into by and between WKK ATLANTA INVESTMENTS, L.P., a Georgia limited partnership (the “Landlord”), and DIGITAL INSIGHT CORPORATION, a Delaware corporation (the “Tenant”).

FOR AND IN CONSIDERATION of the mutual covenants and conditions contained herein, the parties hereto do hereby agree as follows:

1. BASIC LEASE INFORMATION . Each use of the terms capitalized and defined in this Paragraph 1 shall be deemed to refer to, and shall have the respective meanings set forth in, this Paragraph 1.

1.1 Location .

1.1.1 Land. Those certain parcels of land more particularly described on Exhibit “A,” attached hereto and incorporated herein by this reference.

1.1.2 Building. The office building located on the Land located at 5720 Peachtree Parkway, Norcross, Georgia 30092.

1.1.3 Premises. The entire interior of the Building, except for Common Areas.

1.1.4 Project. The Land and all improvements thereon, including, without limitation, the Building and all Common Areas.

1.1.5 Rentable Area of Premises. 58,672 rentable square feet. The parties stipulate and agree that this square footage measurement is conclusive for all purposes of this Lease.

1.1.6 Common Areas. Those certain areas and facilities of the Building including any and all electrical and telephone rooms, mechanical rooms, janitorial areas and other similar facilities of the Building, as well as any and all grounds, parks, landscaped areas, outside sitting areas, sidewalks, walkways, pedestrian ways, parking areas and generally all other improvements located outside the Building and on the Land and designed for use in common by tenants, their employees, clients, customers, licensees and invitees.

1.2 Occupancy .

1.2.1 Term. Five (5) years and six (6) months, beginning on the Commencement Date and ending at 11:59 p.m. on the Lease Expiration Date, unless this Lease is sooner terminated as provided herein.

1.2.2 Commencement Date. July 1, 2005.

1.2.3 Lease Expiration Date. December 31, 2010.

1.2.4 Business Days or business days. Mondays through Fridays, exclusive of any Holidays observed by the Building. If any date on which payment, performance, consent, approval or other action is due by either party hereunder falls on a day other than a Business Day, such payment, performance, consent, approval or other action shall be deemed timely if made, given or taken on the next succeeding Business Day.

1.2.5 Holidays. New Year’s Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, the day following Thanksgiving Day, Christmas Day, and either the day preceding or the day following Christmas Day. Tenant acknowledges that this list of Holidays observed by the Building may be changed if other holidays are, in the future, observed by comparable buildings in the market area in which the Building is located.

 

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1.2.6 Normal Building Hours. Mondays through Fridays, inclusive, except for Holidays, from 8:00 A.M. to 6:00 P.M., and on Saturdays, if not a Holiday, from 8:00 A.M. to 1:00 P.M.

1.3 Rent .

1.3.1 Rent. The Base Rental, the Additional Rent and all other sums due from Tenant to Landlord hereunder.

1.3.2 Base Rental. The Base Rental shall be as follows:

 

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Provided that there does not exist an Event of Default under this Lease, Tenant shall be entitled to an abatement of Base Rental which would otherwise be due for the period from July 1, 2005, through December 31, 2005 (the “Rental Concession”). Notwithstanding the foregoing, Tenant shall be obligated to pay Additional Rent and all other charges due under this Lease for such period. If any Event of Default occurs, any portion of the Rental Concession which has not been used by Tenant as of the date of the occurrence of such Event of Default shall automatically terminate and become null and void. After the occurrence of any such Event of Default, Tenant shall no longer be entitled to any rent concession or abatement of rent described in this Paragraph, and Tenant shall thereafter pay all Base Rental when due under this Lease, without regard to the rent abatement provisions of this Lease.

1.3.3 Additional Rent. All sums other than Base Rental payable by Tenant to Landlord under this Lease, including Tenant’s Proportionate Share of increases in Operating Expenses and Taxes, late charges, overtime or excess service charges, damages, interest and other costs related to Tenant’s failure to perform any of its obligations under this Lease.

1.4 Base Expense Year . The fiscal period from July 1, 2005, through June 30, 2006.

1.5 Base Tax Year . The fiscal period from July 1, 2005, through June 30, 2006.

1.6 Base Operating Expenses . The Operating Expenses for the Base Expense Year.

1.7 Base Taxes . An amount equal to the Taxes payable for the Base Tax Year.

1.8 Tenant’s Proportionate Share . One hundred percent (100%).

1.9 Tenant’s Permitted Uses . Executive, administrative and general office purposes reasonable and customary for Comparable Buildings, including the operation of a data center to be used in connection with Tenant’s business (the “Data Center”), but specifically excluding any Prohibited Uses.

 

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1.10 Addresses .

1.10.1 Landlord’s Address for Notices:

WKK Atlanta Investments, L.P.

c/o Prudential Real Estate Investors

Two Ravinia Drive

Suite 400

Atlanta, Georgia 30346-2104

Attention: Director of Asset Management

1.10.2 Landlord’s Address for Payment:

WKK Atlanta Investments, L.P.

c/o PM Realty Group, L.P.

One Live Oak

3475 Lenox Road

Suite 450

Atlanta, Georgia 30326

1.10.3 Tenant’s Address for Notices:

Digital Insight Corporation

26025 Mureau Road

Calabasas, California 91302

Attention: Chief Financial Officer

with a copy to:

Digital Insight Corporation

26025 Mureau Road

Calabasas, California 91302

Attention: General Counsel

1.11 Broker(s) .

1.11.1 Landlord’s Broker. None.

1.11.2 Tenant’s Broker. The Staubach Company—Southeast, Inc., a Texas corporation.

1.12 Rules and Regulations . As set forth in Exhibit “D,” attached hereto and incorporated herein by this reference.

1.13 Miscellaneous Definitions .

1.13.1 Building Standard. The quantity and quality of equipment, machinery, materials, finishes and workmanship ordinarily associated from time to time with Comparable Buildings and such higher standards specified from time to time by Landlord for the Building, in its reasonable discretion. Landlord acknowledges that, to the best of its actual knowledge, all of the Leasehold Improvements existing in the Premises as of the Effective Date are Building Standard or higher.

1.13.2 Non-Building Standard. All equipment, machinery, materials, finishes and workmanship which deviate from Building Standard in terms of quantity or quality (or both).

1.13.3 Building Systems. The mechanical, electrical, plumbing, sanitary, sprinkler, heating, ventilation and air conditioning (“HVAC”), security, life-safety, elevator and other service systems or facilities of the Project, the Building and the Premises (excluding, however, Tenant’s supplemental HVAC systems, if any).

 

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1.13.4 Intentionally omitted.

1.13.5 Mortgage. A mortgage, deed of trust, deed to secure debt, ground lease or other security instrument encumbering the Premises, Building or Project held by a Mortgagee.

1.13.6 Mortgagee. Any mortgagee, trustee, grantee, ground lessor or other holder of a Mortgage.

1.13.7 Alterations. Any alterations, additions or other physical changes made by Tenant in or about the Premises.

1.13.8 Decorative Alterations. Any cosmetic Alterations such as painting, wall coverings and floor coverings made by Tenant in or about the Premises.

1.13.9 Specialty Improvements. Alterations which are not of a character ordinarily associated with Class “A” office space, such as kitchens, executive restrooms, safe deposit boxes, vaults, libraries or file rooms requiring reinforcement of floors, internal staircases, floor slab penetrations, conveyors, dumbwaiters and other Alterations of a similar character. Landlord hereby approves all Specialty Improvements existing in the Premises as of the Effective Date.

1.13.10 Tenant’s Property. Tenant’s movable fixtures and movable partitions, telephone and other equipment, computer systems, trade fixtures, inventory, furniture, furnishings and other items of personal property which are removable without material damage to the Premises or the Building.

1.13.11 Prohibited Uses: (a) offices of any agency or bureau of the United States or any State or political subdivision thereof, other than any federal United States government office in which seventy-five percent (75%) or more of the personnel who regularly work in such office are attorneys or federal judges; (b) offices or agencies of any foreign government or political subdivision thereof; (c) offices of any health care professionals or health care service organizations; (d) schools or other training facilities which are not ancillary to corporate, executive or professional office use (Landlord acknowledges that Tenant will conduct some training of its staff and customers in the Premises which training is ancillary to Tenant’s office use of the Premises); (e) retail or restaurant uses; (f) radio, television, wire, satellite and cable communications firms regulated by the FCC under the Communications Act of 1934 (e.g., radio and/or television stations); and (g) offices of any employment agency.

1.13.12 Legal Requirements. All present and future federal, state and local laws, orders, statutes, requirements and ordinances, all building, plumbing, electrical, fire and other codes and rules and regulations of governmental entities, and any laws of like import, which are applicable to the Premises, Building or Project, or the maintenance, use or occupation thereof, including, but not limited to, all Environmental Laws (as defined below) and the Americans with Disabilities Act (the “ADA”) and all regulations and orders promulgated pursuant to the ADA.

1.13.13 Environmental Laws. All present and future federal, state and local laws, orders, statutes, requirements and ordinances regulating, relating to or imposing liability (including, without limitation, strict liability) or standards of conduct concerning the protection of the environment or the keeping, use or disposition of “Hazardous Materials” (as defined below), substances or wastes, presently in effect or hereafter adopted, all amendments to any of them, and all rules and regulations issued pursuant to any of such laws or ordinances.

1.13.14 Hazardous Materials. Asbestos, polychlorinated biphenyls, oil, gasoline or other petroleum based liquids, any and all materials or substances deemed hazardous, toxic, pollutant, infectious or radioactive, or regulated by Environmental Laws, including, but not limited to, substances defined as hazardous under the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. §9601 et seq ., the Resource Conservation and Recovery Act, as amended, 42 U.S.C. §6901 et seq . (or any state counterpart to the foregoing statutes) or determined to present the unreasonable risk of injury to health or the environment under the Toxic Substances Control Act, as amended, 15 U.S.C. §2601 et seq .

 

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1.13.15 Prime Rate. The Prime Rate published in The Wall Street Journal from time to time (adjusted daily) as being the base rate on corporate loans at large U.S. money center commercial banks. If The Wall Street Journal ceases to publish such a Prime Rate, the Prime Rate shall be the per annum interest rate for bank prime loans (adjusted daily) published by the Board of Governors of the Federal Reserve System.

1.13.16 Leasehold Improvements. All existing improvements in the Premises as of the Commencement Date.

1.14 Other Definitions . Certain other terms are defined in the body of this Lease and are referenced in the Index of Major Defined Terms.

2. PREMISES AND TERM . Landlord hereby demises and leases the Premises to Tenant and Tenant hereby accepts and leases the Premises from Landlord for the Term. During the Term, Tenant shall have the right to use the Common Areas in accordance with this Lease and the Rules and Regulations.

3. DELIVERY OF POSSESSION OF THE PREMISES AND ACCEPTANCE .

3.1 Improvements . Landlord, at its sole cost and expense, will re-pave and re-stripe the parking facilities of the Building using Building Standard quality and quantities of materials and paint (the “Landlord’s Work”), the cost of which shall not be included in Operating Expenses. Landlord shall use commercially reasonable efforts to substantially complete the Landlord’s Work on or before the Commencement Date, subject to delays attributable to Force Majeure or the acts or omissions of Tenant, or Tenant’s agents, employees or contractors. Tenant acknowledges and agrees that Tenant is currently in possession of the Premises under the “Existing Sublease” (as hereinafter defined) and will continue to occupy the Premises while Landlord performs the Landlord’s Work. Tenant agrees to reasonably cooperate with Landlord to facilitate the substantial completion of the Landlord’s Work in an expeditious manner. Landlord shall use reasonable efforts to perform the Landlord’s Work with minimal disruption and interference to Tenant’s use of the Premises. Notwithstanding the foregoing, Tenant acknowledges that Landlord will perform the Landlord’s Work during Normal Building Hours. Landlord shall not be obligated to perform such work outside of Normal Building Hours. However, Landlord may, in its discretion, perform portions of such work outside of Normal Building Hours. Except for the Landlord’s Work and Landlord’s maintenance and repair obligations hereunder, Landlord shall have no obligation to make any improvements or modifications to the Premises. Neither Landlord nor Landlord’s agents have made any representations, warranties or promises with respect to the Project, the physical condition of the Building, the Land or the Premises, or any matter or thing affecting or related to the Premises, except as expressly set forth in this Lease.

3.2 Acceptance . Tenant has been and is currently in possession of the Premises under the Existing Sublease and has accepted the Premises under the Existing Sublease. Except as otherwise expressly set forth in this Lease (including, without limitation, Landlord’s obligations set forth in Paragraph 44 of this Lease), Tenant hereby accepts the Premises in its then-current, “as-is” condition as of the Commencement Date and, by remaining in possession of the Premises on the Commencement Date, shall be deemed to have agreed that the Premises are then in satisfactory order, repair and condition.

4. BASE RENTAL AND ADDITIONAL RENT .

4.1 Payment of Rent . Tenant shall pay to Landlord, without notice, demand, offset, deduction or counterclaim, in lawful money of the United States of America, at Landlord’s Address for Payment, or at such other place as Landlord shall designate in writing from time to time: (a) Base Rental, in equal monthly installments in advance on the first day of each calendar month during the Term; and (b) Additional Rent, at the times and in the amounts set forth in this Lease. Payment of the Rent shall begin on the Commencement Date, subject to the Rental Concession; provided, however, that if the Commencement Date falls on a date other than the first day of a calendar month or the Lease Expiration Date falls on a date other than the last day of a calendar month, the Rent due for such fractional month shall be prorated based on a thirty (30) day month.

 

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4.2 Late Fees and Interest . If Tenant fails to pay when due any installments of Rent, or any other amounts of money payable by Tenant to Landlord under this Lease, and such failure shall continue for a period of five (5) Business Days after Landlord gives Tenant written notice of such past due Rent or other payment, such past due amount shall: (a) be subject to a late fee equal to the greater of: (i) two percent (2%) of the amount past due; or (ii) One Hundred Dollars ($100.00), which late fee represents an agreed upon charge for the administrative expense suffered by Landlord as a result of such late payment and not payment for the use of money or a penalty; and (b) the amount past due (excluding late fees), shall bear simple interest from the date due until paid at a rate equal to the Prime Rate plus two percent (2%) per annum (the “Interest Rate”); and Tenant agrees to pay said late fee and interest immediately and without demand. However, if at the time such interest is sought to be imposed, the Interest Rate exceeds the maximum rate permitted under federal law or under the laws of the state in which the Premises are located, the Interest Rate shall be the maximum rate of interest then permitted by applicable law. Notwithstanding the foregoing, Landlord shall not be required to give Tenant written notice prior to imposing a late fee and/or interest charges at any time during any period of twelve (12) months in which Tenant has previously received two (2) such notices of Landlord’s intention to impose a late fee and/or interest charges. Should Tenant make a partial payment of past due amounts, the amount of such partial payment shall be applied first to late fees, second to accrued but unpaid interest at the Interest Rate and third to past due amounts in the order of their due dates, starting with the earliest date. The provision for such late charge shall be in addition to all of Landlord’s other rights and remedies hereunder or at law or in equity and shall not be construed as liquidated damages or as limiting Landlord’s remedies in any manner.

4.3 Operating Expenses . For the purposes of this Lease, the term “Operating Expenses” shall mean all expenses and disbursements of every kind (subject to the limitations set forth below) which Landlord incurs, pays or becomes obligated to pay in connection with the ownership, operation and maintenance of the Building and the Project, determined in accordance with generally accepted accounting principles consistently applied, including, but not limited to, the following:

4.3.1 Wages and salaries of all employees at or below the grade of Project Manager engaged in the operation, repair, replacement, maintenance and security of the Building, including taxes, insurance and benefits relating thereto, provided, however, that if any such employees work on several buildings, including the Building, the costs and expenses incurred in connection with such employees shall be allocated among such buildings by Landlord in accordance with reasonable and consistent criteria;

4.3.2 All supplies and materials used in the operation, maintenance, repair and replacement of the Building;

4.3.3 The annual cost of all capital improvements made to the Building which, although capital in nature, can reasonably be expected to reduce the normal operating costs of the Building, as well as all capital improvements made in order to comply with any law promulgated by any governmental authority which first becomes applicable to the Project (or applicable portion thereof) on or after the Effective Date, as amortized over the useful economic life of such improvements as determined by Landlord in its reasonable discretion (without regard to the period over which such improvements may be depreciated or amortized for federal income tax purposes) ; provided, however, that, with respect to capital improvements made primarily for the purpose of reducing Operating Expenses, the amount to be included in Operating Expenses in any calendar year shall be the lesser of: (a) the amortized amount determined in accordance with the foregoing, or (b) the actual or, if not reasonably obtainable, the reasonably-estimated, reduction in Operating Expenses resulting from the capital improvement during the same calendar year;

4.3.4 The cost of all electricity, water and other utilities (other than the cost of utilities directly reimbursed to Landlord through submeters or comparable devices, as opposed to utility costs included as a component of Operating Expenses);

4.3.5 The cost of any insurance or insurance related expense applicable to the Building and the Project and Landlord’s personal property used in connection therewith;

4.3.6 Cost of repairs, replacements and general maintenance of the interior and exterior of the Building and the Project (including, but not limited to, the roof, the foundation and the exterior walls;

 

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light bulbs and glass breakage; redecorating, repainting, recarpeting and other such work in any Common Areas; heating, ventilation and air conditioning equipment; plumbing and electrical equipment; elevators; trash removal; janitorial service; HVAC maintenance; grounds maintenance; window cleaning; parking areas and landscaping), whether performed by Landlord or pursuant to service or maintenance contracts with independent contractors;

4.3.7 Cost of service or maintenance contracts with independent contractors for the operation, maintenance, repair and replacement of the Building and the Project (including, without limitation, trash removal, janitorial service, pest control, HVAC maintenance, grounds maintenance, window cleaning and elevator maintenance);

4.3.8 A management fee, not to exceed four percent (4%) of the gross receipts paid to Landlord by all tenants of the Building, and other administrative expenses incurred for the general operation and management of the Project and the Building;

4.3.9 Legal and accounting fees and expenses;

4.3.10 Payments under any easement, license, operating agreement, declaration, restrictive covenant or instrument pertaining to the sharing of costs by the Building; and

4.3.11 Anything which could be classified as an operating expense under generally accepted accounting principles, consistently applied, but not specified or expressly set forth hereunder.

Notwithstanding the foregoing, there are specifically excluded from the definition of the term “Operating Expenses”: (a) costs of a capital nature, other than capital improvements described in Paragraph 4.3.3 and except for items which, though capital for accounting purposes, are properly considered maintenance and repair items, such as painting of Common Areas and the like; (b) interest, points, fees, amortization or other payments on loans to Landlord and costs incurred in obtaining such loans; (c) depreciation of the Building and the Project; (d) any deficiency in rent, additional rent or other charge under any space leased or subleased to or assumed, directly or indirectly, by Landlord; (e) expenses incurred in leasing or procuring tenants (including lease commissions, advertising expenses, space planning and expenses of renovating or otherwise preparing space for occupancy by tenants); (f) the cost of enforcing any leases and other expenses incurred in connection with negotiations or disputes with tenants, other occupants, or prospective tenants of the Project, including, without limitation, attorneys’ fees in connection with the negotiation and preparation of letters, deal memos, letters of intent, leases, subleases and/or assignments; (g) the general overhead and administrative expenses of Landlord; (h) any cost which would otherwise be an Operating Expense to the extent the same is reimbursable to Landlord by proceeds of insurance, condemnation award, refund, credit, warranty, service contract or otherwise; (i) advertising, marketing or promotional expenditures; (j) the cost of the acquisition or leasing of any artwork; (k) late fees, penalties, interest charges or similar costs incurred by Landlord; (l) costs associated with the operation of the business of the legal entity that constitutes Landlord as the same is separate and apart from the costs of the operation of the Project, including legal entity formation, internal accounting and legal matters; (m) costs of completing Landlord’s Work; (n) rentals for items (except when needed in connection with normal repairs and maintenance of permanent systems) which, if purchased rather than rented, would constitute a capital improvement and rentals and other related expenses incurred in leasing HVAC systems, elevators or other equipment ordinarily considered to be capital items, except for: (1) expenses in connection with making repairs on or keeping Building Systems in operation while repairs are being made; and (2) costs of equipment not affixed to the Building which is used in providing janitorial or similar services; (o) expenses in connection with services or other benefits which are not offered to Tenant or for which Tenant is charged directly but which are provided to another tenant or occupant of the Building; (p) costs incurred by Landlord due to the violation by Landlord or any tenant of the terms and conditions of any lease relating to the Project; (q) any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord; (r) advertising and promotional expenditures, and costs of signs in or on the Building identifying the owner of the Building or other tenants’ signs; (s) electric power costs for which any tenant directly contracts with the local public service company or for which any tenant is separately metered or sub-metered and pays Landlord directly (provided, however, that if any tenant in the Building contracts directly for electric power service or is separately metered or sub-metered during any portion of the relevant period, the total electric power costs for the Building shall be “grossed up” to reflect what those costs would have been had each tenant in the Building used the Building-Standard amount of electric power); (t) tax penalties, fines or interest incurred as a result of Landlord’s

 

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negligence, inability or unwillingness to make payments for any tax obligations related to the Project and/or file any income tax or informational returns when due; (u) costs arising from Landlord’s charitable or political contributions; (v) legal fees and other costs of disputes with any Mortgagee (except as the actions of Tenant may be in issue), Building management or other tenants or relating to the defense of Landlord’s title to, or interest in, the Project; (w) costs of any “tap fees” or any sewer or water connection fees for the benefit of any particular tenant in the Building; (x) costs of any flowers, gifts, balloons, etc. provided to any entity whatsoever, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents; (y) costs of any “tenant relations” parties, events or promotion not consented to by an authorized representative of Tenant in writing; (z) management fees and expenses in excess of the amounts set forth in Paragraph 4.3.8; (aa) the value or lost income to Landlord of any space in the Project which is utilized for an on-site management office; (bb) any accrued and unfunded pension or other benefits of any personnel of Landlord; (cc) any amount paid to any affiliate of Landlord to the extent such amount is in excess of the amount which would be paid in the absence of such relationship; (dd) the cost of any large-scale abatement of Hazardous Materials, if the presence of such Hazardous Materials in, on or about the Project was not caused by Tenant, its agents, employees, contractors, licensees, invitees or subtenants, and provided, however, that Operating Expenses may include the costs attributable to those actions taken by Landlord in connection with the ordinary operation and maintenance of the Project, including costs incurred in removing limited amounts of Hazardous Materials from the Project when such removal is directly related to such ordinary maintenance and operation; and (ee) any entertainment, dining or travel expenses of Landlord for any purpose. There shall be no duplication of costs or reimbursements and in no event shall Landlord collect from tenants of the Project more than one hundred percent (100%) of the costs actually incurred by Landlord in connection with Operating Expenses.

4.4 Adjustment of Base Operating Expenses . In the event that, after the Commencement Date, any service provided by Landlord is discontinued, and if the cost of such service was included in Operating Expenses, then, for the purpose of determining Tenant’s Proportionate Share of any increases in Operating Expenses over Base Operating Expenses with respect to periods from and after the date on which such service is discontinued, the Base Operating Expenses shall be adjusted to exclude the cost of such service. Landlord will also equitably adjust the Operating Expenses with respect to the Comparison Year in which any such service is discontinued. By way of explanation and clarification, but not by way of limitation, if Tenant exercises its right under Paragraph 8.1.3 of this Lease to contract separately and directly for the provision of cleaning and janitorial services to the portion of the Premises containing the Data Center, then, for the purpose of determining Tenant’s Proportionate Share of any increases in Operating Expenses over Base Operating Expenses with respect to periods from and after the date on which Landlord ceases to provide such service to the Data Center, the Base Operating Expenses shall be adjusted to exclude the cost during the Base Expense Year of providing cleaning and janitorial services to the portion of the Premises containing the Data Center.

4.5 Taxes . The term “Taxes” shall mean all taxes and assessments and governmental charges whether federal, state, county or municipal, and whether they be by taxing or management districts, community improvement districts, business improvement districts, transit districts or authorities presently taxing or by others, subsequently created or otherwise, and any other taxes and assessments attributable to the Building and the Project (or their operation), and any expenses, including fees and disbursements of attorneys, tax consultants, arbitrators, appraisers, experts and other witnesses, incurred by Landlord in contesting any taxes or assessments of all or any part of the Project. The term “Taxes” shall not include any gross income taxes, excess profit taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and succession taxes, estate taxes, state income taxes and other taxes to the extent applicable to Landlord’s income or profits. If the present method of taxation changes so that in lieu of the whole or any part of any Taxes levied on the Project or Building, there is levied on Landlord a capital tax directly on the rents received therefrom or a franchise tax, assessment, or charge based, in whole or in part, upon such rents for the Building, then all such taxes, assessments or charges, or the part thereof so based, shall be deemed to be included within the term “Taxes” for the purposes hereof. Taxes in Georgia are currently assessed and paid on a calendar year basis. However, Landlord and Tenant have agreed that the Base Tax Year and any subsequent Comparison Year will be the fiscal period from each July 1 through June 30 of the following calendar year. Therefore, for purposes of this Lease, Taxes for any particular July 1 through June 30 fiscal period shall include one-half (  ¹ / 2 ) of the annual amount of Taxes for each partial calendar year falling within such fiscal period. By way of illustration of the foregoing, the Taxes attributable to the Base Tax Year (i.e., the Base Taxes) shall equal one-half (  ¹ / 2 ) of the total Taxes for calendar year 2005, plus one-half (  ¹ / 2 ) of the total Taxes for calendar year 2006, irrespective of when such Taxes are actually due and payable.

 

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4.6 Comparison Year . The term “Comparison Year” shall mean: (a) with respect to Taxes, each twelve (12) month fiscal period (i.e., July 1 through June 30) commencing subsequent to the Base Tax Year; and (b) with respect to Operating Expenses, each twelve (12) month fiscal period (i.e., July 1 through June 30) commencing subsequent to the Base Expense Year.

4.7 Payment of Operating Expenses and Taxes . If in any Comparison Year, the Operating Expenses paid or incurred for such Comparison Year shall exceed the Base Operating Expenses, and/or the Taxes paid or incurred for such Comparison Year shall exceed the Base Taxes, Tenant shall pay as Additional Rent for each such Comparison Year, Tenant’s Proportionate Share of such excess as and when specified below. Notwithstanding anything to the contrary in this Lease or this Paragraph 4, Base Taxes and Base Operating Expenses shall be determined separately from one another and Tenant’s Proportionate Share of said excess for Operating Expenses shall be calculated and determined separately from Tenant’s Proportionate Share of said excess for Taxes.

4.8 Estimates of Operating Expenses and Taxes . Prior to the actual determination of the Operating Expenses and Taxes for the Comparison Year, Landlord may, if it so elects and at any time or from time to time during such Comparison Year, estimate the amount of such Operating Expenses and Taxes that will be paid or incurred in such year and Tenant’s Proportionate Share of any increases in Operating Expenses over Base Operating Expenses and increases in Taxes over Base Taxes with respect to such Comparison Year (taking into account the applicable cap pursuant to Paragraph 4.14 of this Lease). However, Landlord shall not modify its original estimate of Operating Expenses and Taxes for a particular Comparison Year more than two (2) times during such Comparison Year. If, in the reasonable estimation of Landlord, the Operating Expenses for the Comparison Year will exceed the Base Operating Expenses, and/or the Taxes for the Comparison Year will exceed the Base Taxes, Landlord may give Tenant written notice of the amount of such estimated excess and the amount of such excess that will be due each month from Tenant, together with, if requested by Tenant, reasonably detailed documentation supporting such estimate. In such event, Tenant shall, subsequent to receipt of such written notice, pay monthly Tenant’s Proportionate Share of such excess at the same time and in the same manner as Base Rental is due from Tenant hereunder. Landlord shall use commercially reasonable efforts to provide to Tenant its initial estimate of increases in Operating Expenses and Taxes for each Comparison Year on or before the first (1 ^st ) day of such Comparison Year.

4.9 Annual Reconciliation . An annual statement (the “Statement”) of Operating Expenses and Taxes for each Comparison Year, and of Tenant’s Proportionate Share of any increases in Operating Expenses over Base Operating Expenses and increases in Taxes over Base Taxes with respect to such Comparison Year (taking into account the applicable cap pursuant to Paragraph 4.14 of this Lease), shall be prepared by Landlord pursuant to generally accepted accounting principles, consistently applied, and shall be binding upon Tenant, except as set forth in Paragraph 4.11 below. Landlord shall endeavor to deliver the initial Statement for each Comparison Year within ninety (90) days after the last day of the Comparison Year to which such Statement relates. If the total amount Tenant actually paid for estimated increases in Operating Expenses over Base Operating Expenses and estimated increases in Taxes over Base Taxes is less than Tenant’s Proportionate Share of the actual increases, Tenant shall pay to Landlord as Additional Rent in one lump sum the difference between the total amount actually paid by Tenant for such Comparison Year and the amount Tenant should have paid pursuant to Paragraph 4.7 above; this lump sum payment shall be made within thirty (30) days after receipt of the Statement; or if the total amount Tenant actually paid for estimated increases in Operating Expenses over Base Operating Expenses and estimated increases in Taxes over Base Taxes is more than Tenant’s Proportionate Share of the actual increases, then Landlord shall, at its option: (a) credit such amount against the next monthly installment of Rent; or (b) remit the excess to Tenant within thirty (30) days after the issuance of the Statement. The failure of Landlord to timely furnish the Statement for any Comparison Year shall not preclude Landlord or Tenant from enforcing its rights under this Paragraph 4. In addition, Landlord shall have the right to modify any Statement after such Statement has been delivered to Tenant to correct any errors or reflect any new information received by Landlord with respect to Operating Expenses or Taxes shown on such Statement by delivery to Tenant of a revised statement (the “Revised Statement”), and if such Revised Statement shows an amount due from Tenant to Landlord, or a refund due from Landlord to Tenant, Tenant shall pay, or Landlord shall refund, such additional amount in accordance with this Paragraph 4.9.

 

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4.10 Prorations . If the Commencement Date is other than July 1 or if the Lease Expiration Date is other than June 30, Tenant’s Proportionate Share of any increase in Operating Expenses and Taxes for such fiscal year shall be prorated based upon a thirty (30) day month. Even if the Term has expired, and Tenant has vacated the Premises when the final determination is made of Tenant’s Proportionate Share of any increase in Operating Expenses and Taxes for the fiscal year in which this Lease expires, Tenant shall pay any increase due over the estimated amount paid and conversely any overpayment made shall be rebated by Landlord to Tenant, all as specified above. The provisions of Paragraph 4 shall survive the expiration or earlier termination of this Lease.

4.11 Audit . Tenant shall have the right to have Landlord’s books and records pertaining to Operating Expenses for the Base Expense Year and Taxes for the Base Tax Year, or Operating Expenses and Taxes for any Comparison Year during the Term of this Lease, reviewed, copied (provided Landlord is reimbursed for the cost of such copies) and audited (“Tenant’s Audit”), provided that: (a) such right shall not be exercised more than once during any calendar year; (b) if Tenant elects to conduct Tenant’s Audit, Tenant shall provide Landlord with written notice thereof (“Tenant’s Audit Notice”) no later than: (i) with respect to either the Base Expense Year or the Base Tax Year, six (6) months following Tenant’s receipt of the initial Statement for the first (1 ^st ) Comparison Year; or (ii) with respect to any Comparison Year, six (6) months following Tenant’s receipt of the Statement (or any Revised Statement) for the year to which Tenant’s Audit will apply; (c) Tenant shall have no right to conduct Tenant’s Audit if, either at the time of Tenant’s Audit Notice or at any time during Tenant’s Audit, an Event of Default exists under this Lease; (d) no subtenant shall have any right to conduct an audit and no assignee shall conduct an audit for any period during which such assignee was not in possession of the Premises; (e) conducting Tenant’s Audit shall not relieve Tenant from the obligation to pay Tenant’s Proportionate Share of increases in Operating Expenses and Taxes, as billed by Landlord, pending the outcome of such audit; (f) Tenant’s right to conduct such audit for the Base Expense Year, the Base Tax Year and any Comparison Year shall expire, with respect to the Base Expense Year and the Base Tax Year, six (6) months following Tenant’s receipt of the initial Statement for the first Comparison Year, and, with respect to any Comparison Year, six (6) months following Tenant’s receipt of the Statement (or any Revised Statement) for such year, and if Landlord has not received Tenant’s Audit Notice within the applicable period, Tenant shall have waived its right to conduct Tenant’s Audit for the Base Expense Year, the Base Tax Year or such Comparison Year, as the case may be; (g) Tenant’s Audit shall be conducted by an auditor whose compensation is not contingent upon the results of Tenant’s Audit or the amount of any refund received by Tenant, and who is not employed by or otherwise affiliated with Tenant, except to the extent that such auditor has been engaged by Tenant to conduct Tenant’s Audit; (h) Tenant’s Audit shall be conducted at Landlord’s office where the records of the year in question are maintained by Landlord (which shall be within the continental United States), during Landlord’s normal business hours; (i) Tenant’s Audit shall be completed within ninety (90) days after the date of Tenant’s Audit Notice, and a complete copy of the results thereof shall be delivered to Landlord within one hundred twenty (120) days after the date of Tenant’s Audit Notice; and (j) Tenant’s Audit shall be conducted at Tenant’s sole cost and expense. If Tenant’s Audit is completed and submitted to Landlord in accordance with the requirements of this Paragraph, and if Landlord and Tenant cannot mutually agree upon the results of Tenant’s Audit, either party shall have the right to pursue arbitration in accordance with the procedures set forth on Exhibit “B” attached hereto and by this reference made a part hereof. If such audit shall ultimately result in Landlord and Tenant agreeing (or the arbitration deciding) that Landlord has overstated the Operating Expenses and Taxes for the year audited and Landlord has not previously credited or reimbursed Tenant therefor, Landlord shall reimburse Tenant for any overpayment of Tenant’s Proportionate Share of such increases in Operating Expenses and Taxes. If such audit shall ultimately result in Landlord and Tenant agreeing (or the arbitration deciding) that Landlord has overstated the Operating Expenses and Taxes for the year audited by more than five percent (5%), Landlord shall also reimburse Tenant for Tenant’s actual, reasonable cost incurred in conducting Tenant’s Audit (not to exceed $5,000.00). Such reimbursements shall be made within thirty (30) days after Landlord’s receipt of documentation reasonably acceptable to Landlord reflecting the cost of Tenant’s Audit.

4.12 Returned Checks . Should Tenant present a check to Landlord that is returned by Tenant’s bank for any reason, Tenant agrees to pay a service charge not to exceed $25.00 or two percent (2%) of the face amount of the check, whichever is greater, plus an amount equal to any fee charged to Landlord as a result of the check being returned. No payment by Tenant or receipt by Landlord of a lesser amount than the monthly Rent herein stipulated shall be deemed to be other than a payment on account, nor shall any endorsement or statement on any check or any letter accompanying any check or payment of Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other remedy provided in this Lease.

 

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4.13 Acceptance of Payment . At all times when Landlord directs Tenant to pay Rent to a “lockbox” or other depository whereby checks issued in payment of Rent are initially cashed or deposited by a person or entity other than Landlord (albeit on Landlord’s authority) (collectively, a “Depository”), then Landlord shall not be deemed to have accepted such payment if (and only if) within ten (10) days after the Depository receives such payment, Landlord refunds (or attempts to refund) such payment to Tenant. For the purpose of determining whether or not Tenant has made any payment of Rent within the applicable time period required by this Lease, any such payment shall be deemed to have been received by Landlord on the date that such payment arrives at the Depository (if Landlord has then directed Tenant to pay Rent to such Depository); provided, however, that nothing contained in this sentence shall override the first sentence of this Paragraph 4.13 with respect to the determination of when Landlord has accepted a payment.

4.14 Cap on Controllable Operating Expenses . For the purpose of calculating Tenant’s Proportionate Share of increases in Operating Expenses, “Controllable Operating Expenses” (as hereinafter defined) for the first Comparison Year (i.e., the period from July 1, 2006, through June 30, 2007), and each Comparison Year thereafter, shall not increase by more than the lesser of: (a) the actual increase in Controllable Operating Expenses over the Controllable Operating Expenses for the preceding Comparison Year [or, with respect to the first (1 ^st ) Comparison Year, over the Controllable Operating Expenses for the Base Expense Year]; or (b) five percent (5%) over the amount of the Controllable Operating Expenses for the preceding Comparison Year [or, with respect to the first (1 ^st ) Comparison Year, over the amount of the Controllable Operating Expenses for the Base Expense Year]. As used herein, the term “Controllable Operating Expenses” means all Operating Expenses other than Taxes, insurance, utilities, management fees, costs subject to government regulation, such as minimum wages, and all costs incurred to comply with new or revised Legal Requirements. By way of illustration of the foregoing, with respect to the Comparison Year covering the period from July 1, 2006, through June 30, 2007, the Controllable Operating Expenses shall not exceed the amount determined by the following formula, when “X” equals the actual amount of the Controllable Operating Expenses for the Base Expense Year:

X times 1.05 = maximum amount of Controllable Operating Expenses with respect to the Comparison Year covering the period from July 1, 2006, through June 30, 2007.

Thus, if Controllable Operating Expenses for the Base Expense Year are $4.00 per rentable square foot, the maximum amount of Controllable Operating Expenses with respect to the Comparison Year covering the period from July 1, 2006, through June 30, 2007, would be $4.00 x 1.05 = $4.20 per rentable square foot.

5. INTENTIONALLY OMITTED .

6. USE OF PREMISES . Tenant shall use the Premises solely for Tenant’s Permitted Uses and Tenant shall not use or permit the use of the Premises, Building or Project for any other purpose or purposes whatsoever without the prior written consent of Landlord. Tenant shall not use the Premises for any Prohibited Uses or illegal purpose, or violate any Legal Requirements, or create or allow to exist any nuisance or trespass, or do any act in or about the Premises, or bring anything onto or in the Premises or the Building which will in any way increase the rate of insurance on the Premises or the Building, deface or injure the Premises or the Building or overload the floor of the Premises.

7. COMPLIANCE WITH LAWS .

7.1 Landlord’s Compliance . During the Term of this Lease, Landlord shall comply with (or cause to be complied with) all Legal Requirements which are not the obligation of Tenant to the extent non-compliance would impair Tenant’s use of the Premises for Tenant’s Permitted Uses. Landlord shall be responsible for making any modifications to the Project and Building, including the Common Areas, but excluding the Premises except as otherwise expressly set forth in this Lease, required pursuant to any Legal Requirements. Unless Tenant is responsible for such costs as set forth elsewhere in this Lease, the costs of compliance with Legal Requirements by Landlord and any modifications to the Project and/or the Building made by Landlord pursuant to the provisions of this Paragraph shall be at Landlord’s expense; however, all or portions of such expense may be included in Operating Expenses as set forth in this Lease.

 

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7.2 Tenant’s Compliance . Tenant shall comply with all Legal Requirements regarding the Premises and shall promptly comply with all governmental orders and directives for the correction, prevention and abatement of nuisances in, upon or connected with the Premises, all at Tenant’s sole expense. Tenant warrants that all Alterations and/or Leasehold Improvements made by Tenant or Tenant’s employees, agents or contractors, either prior to Tenant’s occupancy of the Premises, under the Existing Sublease or at any time during the Term of this Lease, will comply with all Legal Requirements. In addition, Tenant warrants that its use of the Premises will be in compliance with all Legal Requirements. During the Term of this Lease, Tenant shall, at Tenant’s sole cost and expense, be responsible for making any modifications to the Premises that may be required pursuant to any Legal Requirements. If, as a result of Tenant’s use of the Premises, or the making of any Alterations by Tenant, Landlord shall be required to make any additions, alterations or improvements to any part of the Project in order to comply with any Legal Requirements, Tenant shall reimburse Landlord upon demand for the costs incurred by Landlord to effect such compliance.

7.3 Mutual Indemnity . Landlord shall indemnify, defend and hold Tenant harmless from and against any claims, losses or causes of action to the extent arising out of Landlord’s failure to comply with the provisions of Paragraph 7.1 above. Tenant shall indemnify, defend and hold Landlord harmless from and against any claims, losses or causes of action to the extent arising out of Tenant’s failure to comply with the provisions of Paragraph 7.2 above. The indemnities set forth in this Paragraph shall survive the expiration or earlier termination of this Lease.

8. STANDARD SERVICES TO TENANT .

8.1 Services Provided . Landlord shall provide services, and operate and maintain the Project, in accordance with specifications and processes consistent with Comparable Buildings. However, Landlord shall not be obligated to provide any specific services other than the services specified in this Paragraph 8.1. Landlord shall provide, subject to Legal Requirements and limitations contained in any governmental controls now or hereafter imposed, or “Force Majeure” (as hereinafter defined) and subject to temporary cessation for reasonable necessity, the following services:

8.1.1 Heating and air-conditioning service when necessary within temperature ranges for normal office use during Normal Building Hours. If the level of occupancy of the Premises, or any machinery or equipment which generates abnormal heat, creates unusual demands on the air-conditioning or heating system serving the Premises, Landlord shall provide Tenant with written notice thereof. If Tenant does not, within thirty (30) days after receipt of such notice from Landlord, take such steps, at Tenant’s expense, as shall be necessary to cease such adverse effect on the air-conditioning or heating system, Landlord shall have the right to install supplemental air-conditioning or heating units in the Premises, and the reasonable, out-of-pocket costs actually incurred by Landlord with respect to such supplemental units (including the cost of acquisition, installation, operation, use and maintenance thereof) shall be paid by Tenant to Landlord in advance or on demand as Additional Rent.

8.1.2 Electric current for Building Standard tenant lighting and small business machinery only from electric circuits designated by Landlord for Tenant’s use. Landlord represents that, as of the Effective Date, the gross electrical capacity of the Building is twenty-three (23) watts per usable square foot of office space in the Premises. Such capacity includes both tenant loads and non-tenant loads (such as HVAC, Common Area lighting, etc.). Landlord shall not be required to furnish and Tenant shall not utilize electrical power for any equipment which has electrical consumption in excess of the electrical capacity available for Tenant loads. Tenant will not use any electrical equipment which in Landlord’s reasonable opinion will overload the wiring installations or interfere with the reasonable use thereof by other users in the Building. Landlord acknowledges that Tenant has installed a supplemental HVAC system which serves the Data Center. Based on historic consumption figures, Landlord agrees that such supplemental HVAC system does not utilize electrical power in excess of the electrical capacity available for Tenant loads in the Building. Tenant will not, without Landlord’s prior written consent in each instance, make any alteration or addition to the electrical system in the Premises or Building. If any additional circuitry or wiring is required by Tenant, and Landlord approves the installation of the same in writing, such work shall be performed at Tenant’s expense by Landlord’s electricians or under Landlord’s control and supervision, and Tenant shall pay Landlord the reasonable costs of such additional work as billed.

 

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8.1.3 General cleaning and janitorial service five (5) times per week, exclusive of Holidays, pursuant to the Cleaning Specifications attached hereto as Exhibit “E.” Landlord, however, expressly reserves the right to modify such Cleaning Specifications, provided that the quality and frequency remain substantially the same as those contemplated by Exhibit “E.” Notwithstanding the foregoing, Tenant shall have the right to contract separately and directly for the provision of cleaning and janitorial services to the portion of the Premises containing Tenant’s Data Center, provided that the quality and frequency of any such service contracted for by Tenant are at least equal to the level of cleaning and janitorial service contemplated by Exhibit “E.”

8.1.4 Reasonable quantities of cold water (and, where appropriate, hot water) in the core lavatories, toilets and water fountains. If Tenant requires water for any other purposes, Tenant shall pay the cost of bringing water to the Premises.

8.1.5 Landlord shall provide non-attended passenger elevator service to each floor of the Premises during Normal Building Hours and shall have at least one (1) elevator available at all times to provide Tenant with twenty-four hour access to all floors of the Premises seven (7) days per week. Landlord shall use reasonable efforts to ensure that all elevators in the Building are working during Normal Building Hours.

8.1.6 The Base Rental does not include any charge to Tenant for the furnishing of any HVAC to the Premises during any periods other than Normal Building Hours. If Tenant desires any such service at times other than during Normal Building Hours with respect to one or more of the HVAC zones within the Premises, Tenant shall deliver notice to Landlord requesting such service by the time prescribed in the Rules and Regulations; provided, however, that Landlord shall use reasonable efforts to arrange such service on such shorter notice as Tenant shall provide. If Landlord furnishes HVAC service at times other than during Normal Building Hours at the request of Tenant, Tenant shall reimburse Landlord for the reasonable, out-of-pocket costs actually incurred by Landlord in providing such HVAC service, including, without limitation, utility and labor costs.

8.1.7 Except in the case of an emergency, Tenant shall have access to and use of the Premises twenty-four (24) hours per day, seven (7) days per week, including Holidays.

8.2 Interruption of Services . In the event of any failure to furnish, or any stoppage of, the following specified services for a period in excess of five (5) consecutive Business Days, and if: (a) such failure to furnish or stoppage is caused by the negligence or willful misconduct of Landlord or by the failure of Landlord to commence and diligently pursue repairs for which Landlord is responsible under this Lease; (b) such interruption results in at least one (1) whole floor of the Building becoming untenantable; and (c) Tenant actually ceases to occupy at least one (1) whole floor of the Building as a result thereof, Tenant shall be entitled to a prorata abatement of Rent (as described below) which shall commence on the sixth (6th) Business Day (and shall not be retroactive) and shall continue for the remainder of the period of such failure to furnish or stoppage of such specified services. As used in the immediately preceding sentence, the specified services are: electricity, heating, ventilating and air conditioning, water and elevator service. Any abatement of Rent to which Tenant is entitled pursuant to this Paragraph 8.2 shall be in proportion to the aggregate rentable square footage of each whole floor of the Building which Tenant actually ceases to occupy as a result of a failure to furnish, or stoppage of, the specified services. In no event shall any portion of any floor of the Building which Tenant partially ceases to occupy be taken into account for purposes of determining the amount of any abatement of Rent to which Tenant is entitled pursuant to this Paragraph 8.2.

9. COMMUNICATIONS SERVICES . Tenant acknowledges and agrees that: (a) Landlord has made no warranty or representation to Tenant with respect to the availability of any communications services, or the quality, reliability or suitability thereof; (b) Landlord shall have no liability or responsibility for any failure or inadequacy of such services, any equipment or facilities used in the furnishing thereof, or any act or omission of the provider of any such services, or of its agents, employees, representatives, officers or contractors; (c) Landlord shall have no responsibility or liability for the installation, alteration, repair, maintenance, furnishing, operation, adjustment or removal of any such services, equipment or facilities; and (d) any contract or other agreement between Tenant and the provider of any such services shall be independent of this Lease, the obligations of Tenant hereunder and the rights of Landlord hereunder and, without limiting the foregoing, no default or failure of the provider of any such services with respect to any such services, equipment or facilities, or under any contract or agreement relating thereto, shall have any effect on this Lease, give to Tenant any offset or defense to the full and timely performance of its obligations hereunder, entitle Tenant to any abatement of Rent or any other payment required to be made by Tenant hereunder, constitute any actual or constructive eviction of Tenant or otherwise give rise to any other claim of any nature against Landlord.

 

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10. LIABILITY OF LANDLORD . Except to the extent resulting from the willful misconduct or gross negligence of Landlord, its agents, representatives, contractors, vendors, employees or invitees, Landlord shall not be liable to Tenant in any manner whatsoever for failure or delay in furnishing any service provided for in this Lease, and no such failure or delay to furnish any service or services by Landlord shall be an actual or constructive eviction of Tenant, nor shall any such event entitle Tenant to any compensation, abatement or diminution of Rent, relieve Tenant from any of its obligations under this Lease or the prompt and punctual performance of each and all of the covenants to be performed herein by Tenant, or impose any liability upon Landlord by reason of inconvenience to Tenant, or interruption of Tenant’s business, or otherwise, nor shall Landlord be liable to Tenant for damage to person or property caused by defects in the cooling, heating, electric, water, elevator or other apparatus or systems, or by water discharged from sprinkler systems, if any, in the Building, nor shall Landlord be liable to Tenant for the theft or loss of any property of Tenant whether from the Premises or any part of the Building or Project. Landlord agrees to make reasonable efforts to protect Tenant from interference or disturbance by third persons, including other tenants; however, Landlord shall not be liable for any such interference or disturbance, whether caused by another tenant or tenants or any other person, nor shall Tenant be relieved from any obligation under this Lease because of such interference or disturbance. Landlord may comply with voluntary controls or guidelines promulgated by any governmental entity relating to the use or conservation of energy, water, gas, light or electricity or the reduction of automobile or other emissions without creating any liability of Landlord to Tenant under this Lease, provided that the Premises are not thereby rendered untenantable. Notwithstanding any contrary provision herein, Landlord shall not be liable under any circumstances for injury or damage to, or interference with, Tenant’s business, including, but not limited to, loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use, in each case, however occurring.

11. REPAIRS .

11.1 Repairs by Landlord . Landlord shall repair and maintain the roof, foundation, floor slabs, masonry walls, columns, structural steel and other structural elements of the Building, the Building Systems and the Common Areas in good condition and repair consistent with the standards of Comparable Buildings in the market in which the Project is located, but taking into consideration the age of the Building, unless the condition requiring such maintenance is caused in part or in whole by the act, neglect, fault or omission of any duty by Tenant, its agents, servants, employees or invitees, in which case Tenant shall pay Landlord the reasonable cost of such maintenance or repairs. Additionally, Landlord shall repair and/or replace as necessary: (a) all lamps, starters and ballasts for Building Standard lighting fixtures within the Premises; and (b) any damage or injury of whatever nature done to the Premises by Landlord, its agents, representatives, contractors, vendors, employees or invitees, or resulting from a breach by Landlord of its obligations under this Lease. No compensation or claim or diminution of Rent will be allowed or paid by Landlord by reason of inconvenience, annoyance or injury to business, arising from the necessity of repairing the Premises or any portion of the Premises or Project, however the necessity may occur, as determined in the sole discretion of Landlord. Landlord shall have no obligation to replace or repair Tenant’s Property, and shall not be liable for any failure to make any repairs or to perform any maintenance required of Landlord hereunder, unless such failure shall persist for an unreasonable period of time after written notice of the need for such repairs or maintenance is given to Landlord by Tenant in accordance with the Notices provision of this Lease.

11.2 Repairs by Tenant . With the exception of those items set forth in this Lease that are required to be repaired by Landlord, Tenant shall, at its sole cost and expense, make all repairs which are reasonably necessary to keep the Premises (including, without limitation, any Specialty Improvements and any supplemental service systems or facilities of the Premises over and above the Building Systems), and any portion of the Building or Project under Tenant’s exclusive control, in good condition and repair, except for normal wear and tear, loss by fire or other casualty and Condemnation. Tenant further agrees that, except with respect to normal wear and tear, and loss by fire or other casualty (which is addressed in Paragraph 17 below), all damage or injury of whatever nature done to the Premises, the Building or the Project by Tenant or Tenant’s agents, representatives, contractors, vendors, employees or invitees, shall be repaired by Tenant at its sole cost and expense. In addition, Tenant shall bear the reasonable out-of-pocket cost of labor and materials for any replacement by Landlord of lamps, starters and ballasts for Non-Building Standard lighting fixtures installed within the Premises.

 

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12. LANDLORD’S RIGHT TO ENTER PREMISES .

12.1 Landlord’s Right to Enter to Make Repairs and Provide Services . Landlord and its agents, employees and independent contractors, or any lessor or Mortgagee or any other party designated by Landlord, and their respective agents, shall have the right to enter the Premises at any time in the event of an emergency (in such event of emergency, Landlord shall have the right to use any means that Landlord may deem proper to open the doors in and to the Premises), and at reasonable hours in all other cases to perform maintenance and make repairs, additions, alterations and improvements that are required by this Lease, to provide the services to be provided by Landlord under this Lease, to post notices of non-responsibility (where applicable) and to inspect the Premises to ascertain that Tenant is complying with all of its covenants and obligations hereunder. Landlord shall also have the right to enter the Premises at reasonable hours to install, maintain, repair and replace pipes, wires, cables, duct work, conduit and utility lines through hung ceiling space and column space within the Premises and to repair the Premises or alter, improve or repair the Building, or to make structural alterations, repairs or improvements to the Building or the Building Systems. During such time as work is being carried on in or about the Premises by Landlord, payments of Rent provided herein shall not abate and Tenant waives any claim or cause of action against Landlord for damages by reason of interruption of Tenant’s business or loss of profits therefrom because of the prosecution of any such work or any part thereof.

12.2 Landlord’s Right to Enter to Exhibit Premises . Landlord and its agents, employees and independent contractors, and any lessor or Mortgagee or any other party designated by Landlord, and their respective agents, shall have the right to enter the Premises at reasonable hours to exhibit the Premises to prospective purchasers, lenders or tenants, to a current or prospective Mortgagee, to ground or underlying lessors or insurers, and to their respective agents and representatives, or others; provided, however, that Landlord shall not exhibit the Premises to prospective tenants prior to the last nine (9) months of the Term. Landlord shall, except in case of an emergency, afford Tenant such prior oral notification of an entry into the Premises for the purpose of exhibiting the Premises to any such party described in this Paragraph 12.2 as shall be reasonably practicable under the circumstances.

12.3 Condition of Entry . Landlord shall provide Tenant with not less than 24 hours’ oral notice to the on-site office manager of Tenant prior to entering the Premises for any reason other than for the provision of routine janitorial and window cleaning services, in the case of emergencies or to show the Premises to any of the parties described in Paragraph 12.2 of this Lease [including, during the last nine (9) months of the Term, prospective tenants]. Landlord agrees to use reasonable efforts to minimize any interference with Tenant’s business caused by any entry pursuant to Paragraphs 12.1 or 12.2 above. Except in the case of emergencies, or in the event Landlord is required to make repairs, alterations, additions or improvements inside the Data Center pursuant to any Legal Requirements, as set forth in Paragraph 39.4.2 of this Lease, neither Landlord, nor Landlord’s agents, representatives, contractors, vendors, employees, invitees, lessors or Mortgagees shall have the right to enter the Data Center at any time for any purpose (whether pursuant to Paragraphs 12.1 or 12.2 above, or any other provision of this Lease, including those relating to the provision of services by Landlord). Except in the case of emergencies, Landlord hereby agrees not to enter the Data Center unless accompanied by an authorized employee or agent of Tenant. Unless Tenant vacates the Premises or ceases to use the Data Center, Tenant shall staff the Data Center with at least one (1) such authorized employee or agent twenty-four (24) hours per day, seven (7) days per week, including Holidays. In the event an emergency situation occurs which, in Landlord’s reasonable judgment, requires Landlord to enter the Data Center, and if Landlord is unable to obtain access to the Data Center from an authorized employee or agent of Tenant, Landlord shall have the right to use any means necessary to enter the Data Center (forcibly, if necessary) in order to address such emergency situation. Landlord shall have no liability, and Tenant hereby waives any and all rights of recovery, claims, actions or causes of action against Landlord, in connection with any such emergency entry into the Data Center under this Paragraph 12.3, as well as for any damage alleged to have resulted therefrom (including, without limitation, damage to any entrance, door or other portions of the Premises alleged to have been damaged as a result of such entry by Landlord). If Landlord exercises any right it has under this Lease to enter the Data Center without being accompanied by an authorized employee or agent of Tenant, Landlord shall inform Tenant of such entry, and of any activities conducted by Landlord in the Data Center during such entry, as soon as practicable.

 

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13. ALTERATIONS .

13.1 Tenant’s Alterations .

13.1.1 Tenant shall not make any Alterations, other than Decorative Alterations not visible from the exterior of the Premises, without Landlord’s prior consent, which consent shall not be unreasonably withheld, conditioned or delayed if such Alterations: (a) are non-structural and do not materially affect any Building Systems, other than the distribution of such Building Systems; (b) affect only the Premises, and are not visible from outside of the Premises; (c) do not affect the certificate of occupancy issued for the Building or the Premises; and (d) do not violate any Legal Requirements. If Landlord approves any such Alterations, Landlord shall be entitled to post and record appropriate notices of non-responsibility (where applicable). Tenant shall request Landlord’s consent to any Alterations not less than ten (10) days (or such additional time as may be necessary under applicable Legal Requirements to afford Landlord the opportunity of posting and recording appropriate notices of non-responsibility) prior to the commencement of work on such Alterations. Landlord may impose, as a condition of its consent to any and all Alterations, such reasonable requirements as Landlord may deem desirable, except that: (i) Tenant shall be allowed to competitively bid all construction work, including the general contractor work; (ii) Landlord shall not specify any sole-source contractors or subcontractors; and (iii) Tenant, and its vendors and contractors performing any Alterations, shall have, at no charge, complete and unrestricted access to and use of the Premises, the Building and all Common Areas, including, without limitation, the parking areas, loading docks, elevators, construction hoists staging areas, electrical service and other utilities (provided, however, that, to the extent the cost of any such electrical service or other utilities may be included in Operating Expenses, Tenant shall remain obligated to reimburse Landlord for such costs as a part of Tenant’s Proportionate Share of increases in Operating Expenses as set forth herein) during the performance of any such Alterations. If such Alterations will involve the use of Hazardous Materials or disturb any Hazardous Materials existing in the Premises, Tenant shall comply with Landlord’s reasonable rules and regulations concerning such Hazardous Materials.

13.1.2 Tenant shall give Landlord not less than ten (10) Business Days’ notice prior to performing any Decorative Alterations, which notice shall contain a description of such Decorative Alterations. Prior to making any other Alterations, Tenant, at its expense, shall: (a) submit to Landlord for its approval detailed plans and specifications (“Alteration Plans”) of such proposed Alterations (other than Decorative Alterations), and with respect to any Alterations affecting any of the Building Systems, evidence that the Alterations have been designed by, or reviewed and approved by, Landlord’s designated engineer for the affected Building Systems; (b) submit to Landlord for its approval a copy of a proposal or estimate from Tenant’s contractor indicating the cost of the proposed Alterations; (c) obtain all permits, approvals and certificates required under any Legal Requirements; and (d) furnish to Landlord duplicate original policies or certificates of worker’s compensation (covering all persons to be employed by Tenant, and Tenant’s contractors and subcontractors in connection with such Alterations) and commercial general liability insurance (including property damage coverage) and Builder’s Risk coverage (as described in Paragraph 13.1.3) all in such form, with such companies, for such periods and in such amounts as Landlord may reasonably require, naming Landlord, Landlord’s asset manager and property manager, any lessor and any Mortgagee as additional insureds. Landlord shall have ten (10) days after its receipt of all of the items and materials required to be submitted to Landlord pursuant to the immediately preceding sentence to make its decision as to whether or not such Alterations shall be approved (which decision shall be made in accordance with the terms of this Paragraph 13). If Landlord shall fail to notify Tenant of its decision in writing within such ten (10) day period, Landlord shall be deemed to have refused its consent to the applicable Alterations. Whenever Landlord provides any written notice to Tenant refusing to consent to any Alterations proposed by Tenant, such notice shall include a reasonably detailed explanation for such refusal. In addition, if Landlord is deemed to have refused to consent to any Alterations by reason of Landlord’s failure to notify Tenant in writing of its decision within the aforementioned ten (10) day period, Tenant may provide Landlord with written notice requesting an explanation for such refusal, and Landlord shall promptly thereafter provide to Tenant in writing a reasonably detailed explanation for such refusal.

13.1.3 In the event that Tenant makes any Alterations, prior to the commencement of such Alterations, Tenant shall provide Landlord with evidence that Tenant’s general contractor, if any, carries commercial general liability insurance (including property damage coverage), worker’s compensation insurance, and “Builder’s Risk” insurance in an amount reasonably approved by Landlord covering the construction of such Alterations, and such other insurance as Landlord may require.

 

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13.1.4 Tenant, at its expense, shall, as and when required, promptly obtain certificates of partial and final approval of such Alterations required under any Legal Requirements and shall furnish Landlord with copies thereof, together with “as-built” Alteration Plans for such Alterations.

13.2 Manner and Quality of Alterations . All Alterations shall be performed: (a) in a good and workmanlike manner and free from defects; (b) substantially in accordance with the Alteration Plans, and by contractors approved by Landlord (such approval not to be unreasonably withheld, conditioned or delayed); and (c) in compliance with all Legal Requirements, the terms of this Lease and all construction procedures and regulations then prescribed by Landlord. All materials and equipment shall be of a quality at least equal to the quality of the Leasehold Improvements, and no such materials or equipment shall be subject to any lien or other encumbrance.

13.3 Removal of Tenant’s Property . Tenant’s Property shall remain the property of Tenant and, subject to the provisions of Paragraph 22 hereof, Tenant may remove the same at any time on or before the Lease Expiration Date. On or prior to the Lease Expiration Date, Tenant shall, unless otherwise directed by Landlord, at Tenant’s expense: (a) remove any Specialty Improvements constructed after the Effective Date, unless Tenant receives written approval from Landlord at the time Landlord approves any such Specialty Improvements to surrender such Specialty Improvements with the Premises; and (b) close up any slab penetrations in the Premises. Tenant shall not be obligated to remove any Specialty Improvements which are part of the existing Leasehold Improvements as of the Effective Date. Tenant shall repair and restore, in a good and workmanlike manner, any damage to the Premises or the Building caused by Tenant’s removal of any Alterations or Tenant’s Property, or by the closing of any slab penetrations, and, upon default thereof, Tenant shall reimburse Landlord for Landlord’s reasonable, out-of-pocket cost of repairing and restoring such damage. Any Specialty Improvements and Tenant’s Property not so removed shall be deemed abandoned, notwithstanding that title to or a security interest in such personal property may be held by an individual or entity other than Tenant, and Landlord may remove and dispose of same in any manner it deems proper, in its sole discretion, and repair and restore any damage caused thereby, at Tenant’s cost and without accountability to Tenant. Tenant hereby waives and releases any claim against Landlord arising out of the removal or disposition of such Specialty Improvements and/or Tenant’s Property, and Tenant hereby agrees to indemnify and hold Landlord harmless from and against the claims of all third parties resulting from such removal, provided that such removal is performed by Landlord with due care. Except as set forth above in this Paragraph 13.3, Tenant may elect to either: (i) surrender any Alterations with the Premises; or (ii) remove, at it’s sole cost and expense, any Alterations and repair any damage to the Premises and/or the Building caused by such removal. If Tenant fails to repair any damage caused by the removal of any Alterations, Landlord may do so and may charge the cost thereof to Tenant. All Alterations which Tenant does not remove from the Premises shall become Landlord’s property upon expiration or earlier termination of this Lease. Tenant’s obligations under this Paragraph 13.3 shall survive the expiration or earlier termination of this Lease.

13.4 Tenant’s Costs . Notwithstanding the foregoing, Tenant shall not be obligated to pay any amount to Landlord as a fee for Landlord’s review of the Alteration Plans or the Alterations, or for Landlord’s supervision of the Alterations. Tenant shall not be obligated to pay any additional charge for electrical service or other utilities used in connection with any Alterations, provided, however, that Tenant shall be obligated to pay Tenant’s Proportionate Share of increases in Operating Expenses, which include, without limitation, the cost of electricity and other utilities, as set forth in this Lease.

13.5 Tenant’s Equipment . Tenant shall provide notice to Landlord prior to moving any heavy machinery, heavy equipment, freight, bulky matter or fixtures (collectively, “Equipment”) into or out of the Building and shall pay to Landlord any reasonable costs actually incurred by Landlord in connection therewith. If such Equipment requires special handling, Tenant agrees: (a) to employ only persons holding all necessary licenses to perform such work; and (b) all work performed in connection therewith shall comply with all applicable Legal Requirements.

13.6 Legal Compliance . The approval of Alteration Plans, and consent by Landlord to the making of any Alterations, do not constitute Landlord’s representation that such Alteration Plans or Alterations comply with any Legal Requirements. Landlord shall not be liable to Tenant or any other party in connection with Landlord’s approval of any Alteration Plans, or Landlord’s consent to Tenant’s performing any Alterations. In the event Tenant performs any Alterations in the Premises which require or give rise to governmentally required changes to any structural portions of the Building, Building Systems or equipment located in the internal core of the Building or the Common Areas, then Landlord shall make such changes at Tenant’s cost and expense.

 

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13.7 Voice and Data Cable . If required by Legal Requirements at the time of installation, all voice and data cable installed within the Premises or anywhere else within the Building on or after the Effective Date by or for Tenant shall be neatly tagged and identified with permanently marked, weather proof labels in each telephone closet through which cables pass, each antenna bracket, at the transmission line building entry point, at the interior wall feed-through or any other transmission line exit point, and at any transmitter combiner, duplexer or multifeed receive port, with Tenant’s or the applicable provider’s name (as the case may be), type of line, circuit number, floor where cable originates and terminates, and such other information as may be reasonably required by Landlord.

13.8 Floor Load . Tenant shall not place a load upon any floor of the Premises that exceeds the floor load per square foot which such floor was designed to carry or which is allowed by applicable building codes. Landlord reserves the right to reasonably designate the position of all Equipment which Tenant wishes to place within the Premises, and to place limitations on the weight thereof. However, Landlord hereby acknowledges that Tenant’s Property currently existing or installed in the Premises does not violate any weight limitations or applicable building codes.

14. LIENS . Tenant shall pay or cause to be paid all costs for work done or claimed to be done by or on behalf of Tenant, or caused to be done by or on behalf of Tenant, in or about the Premises of a character which will or may result in liens against Landlord’s interest in the Premises, the Building or the Project, or any part thereof, and Tenant will keep the same free and clear of all mechanics’ liens and other liens on account of work done or claimed to be done for or on behalf of Tenant or persons claiming under Tenant. Tenant hereby agrees to indemnify Landlord for, and defend and hold Landlord harmless from and against, all liability, loss, damages, costs or expenses, including reasonable attorneys’ fees, expenses and court costs incurred in connection with any claims of any nature whatsoever for work performed for, or materials or supplies furnished or claimed to be furnished to Tenant, including lien claims of contractors, laborers or materialmen. Should any such liens be filed or recorded against the Premises, the Building or the Project with respect to work performed or claimed to be performed for, or materials supplied to or on behalf of, Tenant, or should any action affecting the title thereto be commenced, Tenant shall cause such liens to be released of record within thirty (30) days after notice thereof. If Tenant desires to contest any such claim of lien, Tenant shall nonetheless cause such lien to be released of record by bonding off said lien of record or the posting of adequate security with a court of competent jurisdiction as may be provided by the mechanics’ lien statutes of the state in which the Project is located. If Tenant shall be delinquent in paying any charge for which such a mechanics’ lien or suit to foreclose such a lien has been recorded or filed and shall not have caused the lien to be released as aforesaid, Landlord may (but without being required to do so) pay such lien or claim and costs associated therewith, and the amount so paid, together with interest thereon at the Interest Rate from the date paid by Landlord until such sum is repaid by Tenant, together with reasonable attorneys’ fees, expenses and court costs incurred in connection therewith, shall be immediately due from Tenant to Landlord as Additional Rent.

15. ASSIGNMENT AND SUBLETTING .

15.1 Transfers .

15.1.1 Tenant shall not, without the prior written consent of Landlord, which consent shall be granted or denied in accordance with Paragraph 15.2 below, assign this Lease, permit any assignment of this Lease or any interest hereunder by operation of law or otherwise, sublet the Premises or any part thereof, or enter into any license or concession agreements or otherwise permit the occupancy or use of the Premises or any part thereof by any persons other than Tenant and its employees (all of the foregoing are hereinafter sometimes referred to collectively as “Transfers,” and individually as a “Transfer,” and any person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a “Transferee”). In addition, Tenant shall not, without the prior written consent of Landlord, which may be withheld for any reason or for no reason, in the sole and absolute discretion of Landlord, mortgage, pledge, hypothecate, encumber, or permit any lien to attach to this Lease or any interest hereunder.

 

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15.1.2 If Tenant desires Landlord’s consent to any Transfer, Tenant shall notify Landlord in writing, which notice (the “Transfer Notice”) shall include: (a) the proposed effective date of the Transfer, which shall not be less than thirty (30) days nor more than nine (9) months after the date of delivery of the Transfer Notice; (b) a description of the portion of the Premises to be transferred (the “Transfer Space”); (c) all of the terms of the proposed Transfer and the consideration therefor, including calculation of the “Transfer Premium” (as defined below), in connection with such Transfer, the name and address of the proposed Transferee and a copy of all existing executed and/or proposed documentation pertaining to the proposed Transfer, including all existing operative documents to be executed to evidence such Transfer or the agreements incidental or related to such Transfer, provided that Landlord shall have the right to require Tenant to utilize Landlord’s commercially reasonable standard consent documents in connection with the documentation of such Transfer; and (d) current financial statements of the proposed Transferee, certified by an officer, partner or owner thereof, business credit and personal references and history of the proposed Transferee and any other information required by Landlord which will enable Landlord to determine the financial responsibility, character and reputation of the proposed Transferee, the nature of such Transferee’s business and the proposed use of the Transfer Space.

15.1.3 Any Transfer, and any mortgage, pledge, hypothecation, encumbrance or attachment of a lien, made without Landlord’s prior written consent shall, at Landlord’s option, be null, void and of no effect, and shall, at Landlord’s option, constitute an Event of Default by Tenant under this Lease. Whether or not Landlord consents to any proposed Transfer, Tenant shall reimburse Landlord for any reasonable, out-of-pocket professional fees and expenses (including, without limitation, attorneys’, accountants’, architects’, engineers’ and consultants’ fees and expenses) actually incurred by Landlord in connection with the review of such proposed Transfer. If requested by Landlord, such fees shall be due and payable to Landlord prior to Landlord’s execution of a consent to the proposed Transfer.

15.2 Landlord’s Consent .

15.2.1 Landlord shall have fifteen (15) days after its receipt of the Transfer Notice and all other required and reasonably requested information within which to make its decision as to whether or not the Transfer shall be approved. Provided that no Event of Default under this Lease then exists, Landlord shall not unreasonably withhold, condition or delay its consent to any proposed Transfer of the Transfer Space to the Transferee on the terms specified in the Transfer Notice. If Landlord shall fail to notify Tenant of its decision in writing within such fifteen (15) day period, Landlord shall be deemed to have refused its consent to the Transfer. If Landlord is deemed to have refused to consent to such Transfer by reason of Landlord’s failure to notify Tenant in writing of its election within the aforementioned fifteen (15) day period, Tenant may provide Landlord with written notice of such failure to respond (the “Second Transfer Notice”), which, in order to be effective, must clearly, conspicuously and in bold type face set forth the following statement at the top of the first page of the Second Transfer Notice: “SECOND NOTICE! THE FAILURE OF LANDLORD TO RESPOND WITHIN FIVE (5) BUSINESS DAYS AFTER THE RECEIPT OF THIS SECOND NOTICE BY LANDLORD SHALL BE DEEMED TO BE A CONSENT TO THE PROPOSED TRANSFER.” If Landlord should fail to notify Tenant in writing of its election as to such Transfer within five (5) Business Days after receipt of such Second Transfer Notice, Landlord shall be deemed to have approved the proposed Transfer. Whenever Landlord provides any written notice to Tenant refusing to consent to any Transfer, such notice shall include a reasonably detailed explanation for such refusal.

15.2.2 Without limitation as to other reasonable grounds for withholding consent, the parties hereby agree that it shall be reasonable under this Lease and under any applicable law for Landlord to withhold consent to any proposed Transfer where one or more of the following apply:

15.2.2.1 Intentionally omitted;

15.2.2.2 The Transferee intends to use the Transfer Space for any use which is not included within Tenant’s Permitted Uses, or for any Prohibited Uses;

15.2.2.3 The Transferee is a federal, state or local government, or an agency or instrumentality thereof, or is entitled, directly or indirectly, to diplomatic or sovereign immunity, regardless of whether the Transferee agrees to waive such diplomatic or sovereign immunity [however, this Paragraph 15.2.2.3

 

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shall not apply to a Transferee which is an agency or instrumentality of the federal United States government which intends to operate, and actually does operate after such Transfer, an office in the Premises in which seventy-five percent (75%) or more of the personnel who regularly work in such office are attorneys or federal judges];

15.2.2.4 With respect to an assignment, the Transferee is not a party of reasonable financial worth and/or financial stability in light of the responsibilities to be undertaken in connection with the Transfer on the date consent is requested;

15.2.2.5 The proposed Transfer would violate restrictions imposed by any Mortgagee;

15.2.2.6 The terms of the proposed Transfer will allow the Transferee to exercise a right of renewal, right of expansion, right of first offer, right of first refusal (including, without limitation, the “Right of First Refusal,” as hereinafter defined) or other similar right held by Tenant (or will allow the Transferee to occupy space leased by Tenant pursuant to any such right);

15.2.2.7 Intentionally omitted;

15.2.2.8 The character of the business to be conducted or the proposed use of the Transfer Space by the Transferee shall violate any provision or restriction herein relating to the use or occupancy of the Premises;

15.2.2.9 The Transfer shall result in occupancy of the Premises by more than six (6) tenants and subtenants, including Tenant, but excluding any Tenant Affiliate occupying any portion of the Premises;

15.2.2.10 The proposed Transferee is not currently subject to, and refuses to appoint an agent for purposes of subjecting itself to, service of process in, or the jurisdiction of the courts of, the state in which the Project is located; or

15.2.2.11 An Event of Default exists under this Lease at the time of the Transfer Notice or at the effective date of the Transfer.

The foregoing shall in no way limit Landlord’s ability to withhold or delay its consent for any other reason which is reasonable under the circumstances.

15.3 Terms of Consent . If Landlord consents to any Transfer pursuant to the terms of this Paragraph 15, Tenant may, within nine (9) months after delivery of the Transfer Notice, but not later than the expiration of said nine (9) month period, enter into such Transfer of the Transfer Space to the approved Transferee upon substantially the same terms and conditions as are set forth in the Transfer Notice, provided that if there are any material changes in the terms and conditions from those specified in the Transfer Notice such that Landlord would initially have been entitled to refuse its consent to such Transfer, Tenant shall again submit the Transfer to Landlord for its approval and other action under this Paragraph 15.

15.4 Transfer Premium .

15.4.1 If Landlord consents to a Transfer, as a condition thereto (which the parties hereby agree is reasonable), Tenant shall pay to Landlord fifty percent (50%) of any “Transfer Premium” received by Tenant from such Transferee. Notwithstanding anything contained herein to the contrary, no Transfer Premium shall be payable by Tenant with respect to a Transfer to a Tenant Affiliate.

15.4.2 Except as set forth in Paragraph 43.2 of this Lease, “Transfer Premium” shall mean all rent, including additional rent, and other consideration payable by such Transferee, or any other entity or person related to, or affiliated with such Transferee, in connection with the Transfer or its occupancy of the Premises or any part thereof in excess of the Rent payable by Tenant under this Lease during the term of the Transfer, on a per

 

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rentable square foot basis if less than all of the Premises is transferred, after deducting the reasonable expenses incurred by Tenant for: (a) any changes, alterations and improvements to the Transfer Space in connection with the Transfer; (b) any commercially reasonable out-of-pocket concessions provided to the Transferee, including, without limitation, any free rent; (c) any commercially reasonable brokerage commissions in connection with the Transfer; and (d) any security and maintenance services rendered by Tenant to Transferee (but not in excess of the fair market value of such services). The Transfer Premium shall also include, but not be limited to, key money, bonus money or other cash consideration paid with respect to the Premises by Transferee, or any other entity or person related to, or affiliated with such Transferee, to Tenant in connection with such Transfer, and any payment in excess of fair market value for services rendered by Tenant to Transferee, or for assets, fixtures, inventory, equipment or furniture transferred by Tenant to Transferee in connection with such Transfer. Upon request by Landlord, Tenant shall provide to Landlord paid invoices and other documents and information reasonably satisfactory to Landlord evidencing any expenses incurred by Tenant pursuant to 15.4.2(a), 15.4.2(b) and 15.4.2(c) above.

15.4.3 In calculations of the rent (as it relates to the Transfer Premium calculated under this Paragraph 15.4), the rent paid during each annual period for the Transfer Space shall be computed after adjusting such rent to the actual effective rent to be paid, taking into consideration any and all leasehold concessions granted in connection therewith, including, but not limited to, any rent credit and tenant improvement allowance. For purposes of calculating any such effective rent, all such concessions shall be amortized without interest on a straight-line basis over the relevant term.

15.4.4 Any Transfer Premium due in connection with an assignment shall be paid to Landlord by Tenant as Additional Rent on the effective date of such assignment. Any Transfer Premium due in connection with a sublease shall be paid to Landlord by Tenant monthly as and when paid to Tenant by the Transferee, or any other entity or person related to, or affiliated with such Transferee.

15.4.5 If the Transfer Premium respecting any Transfer shall be found in any audit by Landlord, or otherwise, to have been understated, Tenant shall, within thirty (30) days after demand, pay the deficiency and, if the Transfer Premium was understated by more than five percent (5%), Landlord’s reasonable out-of-pocket costs of such audit. Any disagreement between Landlord and Tenant as to the amount of any Transfer Premium shall be resolved in an expedited arbitration proceeding which shall be conducted in accordance with the procedures set forth in Exhibit “G” attached hereto and by this reference made a part hereof.

15.5 Intentionally Omitted .

15.6 Effect of Transfer . If Landlord consents to a Transfer, all of the following shall apply:

15.6.1 Landlord’s consent shall be evidenced by execution of a commercially reasonable form of consent to assignment or consent to sublease, as the case may be, by Tenant, Transferee and Landlord.

15.6.2 The terms and conditions of this Lease shall in no way be deemed to have been waived or modified.

15.6.3 Landlord’s consent to such Transfer shall not be deemed consent to any further Transfer by either Tenant or Transferee.

15.6.4 Tenant shall deliver to Landlord, promptly after execution, an original executed copy of all documentation pertaining to the Transfer in form reasonably acceptable to Landlord.

15.6.5 In the case of an assignment, Transferee shall unconditionally assume in a written agreement for the benefit of Landlord, and shall be deemed to have assumed, this Lease, and shall be jointly and severally liable with Tenant for all payments and for the due performance of all terms, covenants and conditions herein contained which are required to be paid and performed by Tenant.

 

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15.6.6 Tenant shall furnish, upon Landlord’s request, but not more than once per calendar year with respect to any Transfer, a complete statement, certified by Tenant, setting forth in detail the computation of any Transfer Premium which Tenant has derived or expects to derive from such Transfer.

15.6.7 No Transfer relating to this Lease, or agreement entered into with respect thereto, whether with or without Landlord’s consent, shall relieve Tenant or any guarantor of this Lease from any liability under this Lease, including, without limitation, in connection with the Transfer Space.

15.6.8 No Transfer shall be effective unless: (a) any guarantor of this Lease, or of any of the obligations of Tenant hereunder, consents to such Transfer and agrees in writing with Landlord that such Transfer shall not affect such guarantor’s liability under its guaranty; and (b) any letter of credit required to be maintained by Tenant under this Lease is replaced or amended to reflect the Transfer, in a form reasonably satisfactory to Landlord.

15.6.9 With respect to a sublease, no such sublease shall be for a term ending later than one (1) day prior to the Lease Expiration Date.

15.6.10 No Transferee shall take possession of any part of the Premises until an executed counterpart of such sublease or assignment, as the case may be, has been delivered to Landlord and approved by Landlord.

15.6.11 If an Event of Default occurs prior to the effective date of such Transfer, then Landlord’s consent thereto, if previously granted, shall be immediately deemed revoked without further notice to Tenant, and if such Transfer would have been permitted without Landlord’s consent pursuant to Paragraph 15.9 below, such permission shall be void and without force and effect and, in either such case, any such Transfer shall constitute a further Event of Default hereunder.

15.6.12 Landlord or its authorized representatives shall have the right at all reasonable times to audit the books, records and papers of Tenant relating to any Transfer, and shall have the right to make copies thereof (provided Tenant is reimbursed for the cost of such copies), provided that: (a) such right shall not be exercised more than once during any calendar year with respect to any particular Transfer; (b) if Landlord elects to conduct such an audit, Landlord shall provide Tenant with written notice thereof (“Landlord’s Audit Notice”) no later than six (6) months after the expiration or earlier termination of the term of the applicable Transfer; (c) Landlord shall have no right to conduct such an audit if Landlord is in default under this Lease; (d) Landlord’s right to conduct such audit shall expire six (6) months after the expiration or earlier termination of the term of the applicable Transfer, and if Tenant has not received Landlord’s Audit Notice within the applicable period, Landlord shall have waived its right to conduct such an audit with respect to the applicable Transfer; (e) Landlord’s audit shall be conducted by an auditor whose compensation is not contingent upon the results of such audit or the amount of any Transfer Premium received by Landlord, and who is not employed by or otherwise affiliated with Landlord, except to the extent that such auditor has been engaged by Landlord to conduct such audit; (f) Landlord’s audit shall be conducted at Tenant’s office where the books, records and papers in question are maintained by Tenant (which shall be within the continental United States), during Tenant’s normal business hours; (g) Landlord’s audit shall be completed within ninety (90) days after the date of Landlord’s Audit Notice, and a complete copy of the results thereof shall be delivered to Tenant within one hundred twenty (120) days after the date of Landlord’s Audit Notice; and (h) Landlord’s audit shall be conducted at Landlord’s sole cost and expense (except as set forth in Paragraph 15.4.5 of this Lease).

15.6.13 Any Transfer which is a sublease shall be subject and subordinate to this Lease and to the matters to which this Lease is or shall be subordinate, and Tenant and each Transferee shall be deemed to have agreed that, upon the occurrence and during the continuation of an Event of Default hereunder, Tenant has hereby assigned to Landlord, and Landlord may, at its option, accept such assignment of, all right, title and interest of Tenant as sublandlord under such sublease, together with all modifications, extensions and renewals thereof then in effect, and such Transferee shall, at Landlord’s option, attorn to Landlord pursuant to the then executory provisions of such sublease, except that Landlord shall not be: (a) liable for any previous act or omission of Tenant under such sublease; (b) subject to any counterclaim, offset or defense not expressly provided in such sublease which theretofore accrued to such Transferee against Tenant; (c) bound either by any previous modification of such

 

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sublease not consented to by Landlord or by any prepayment of more than one month’s rent; (d) bound to return such Transferee’s security deposit, if any, except to the extent Landlord shall receive actual possession of such security deposit and such Transferee shall be entitled to the return of all or any portion of such security deposit under the terms of its sublease; or (e) obligated to make any payment to or on behalf of such Transferee, or to perform any work in the Transfer Space or the Building, or in any way to prepare the Transfer Space for occupancy, beyond Landlord’s obligations under this Lease. The provisions of this Paragraph 15.6.13 shall be self-operative, and no further instrument shall be required to give effect to this provision, provided that the Transferee shall execute and deliver to Landlord any instruments Landlord may reasonably request to evidence and confirm such subordination and attornment.

15.7 Additional Transfers . For purposes of this Lease, the term “Transfer” shall also include a single transaction or a series of transactions in which more than a fifty percent (50%) interest in Tenant, any guarantor of this Lease, or any Transferee (whether stock, partnership interest, interest in a limited liability company or otherwise) is transferred, diluted, reduced or otherwise affected with the result that the present holder or owners of Tenant, such guarantor, or such Transferee have less than a fifty percent (50%) interest in Tenant, such guarantor or such Transferee. The transfer of the outstanding capital stock of any corporate Tenant, guarantor or Transferee through the “over-the-counter” market or any recognized national securities exchange [other than by persons owning five percent (5%) or more of the voting stock of such corporation] shall not be included in the calculation of such fifty percent (50%) interest in (a) above.

15.8 No Waiver . No collection or acceptance of Rent by Landlord from any Transferee shall be deemed a waiver of any provision of this Paragraph 15 or the approval of any Transferee or a release of Tenant from any obligation under this Lease, whether theretofore or thereafter accruing. In no event shall Landlord’s enforcement of any provision of this Lease against any Transferee be deemed a waiver of Landlord’s right to enforce any term of this Lease against Tenant or any other person.

15.9 Assignment or Sublease to Tenant Affiliate .

15.9.1 Notwithstanding any other provision of this Paragraph 15, Tenant shall have the right, upon fifteen (15) days’ prior written notice to Landlord (the “Affiliate Transfer Notice”), to assign this Lease or sublet the Premises, without Landlord’s consent and without payment of any amount to Landlord, to an entity into which it is merged or by which it is acquired, or to an entity which acquires all or substantially all of the assets of Tenant as a going concern or to an entity that controls, is controlled by or is under common control with Tenant (in each case, a “Tenant Affiliate”), provided that:

15.9.1.1 In the case of a merger, consolidation, dissolution, sale or acquisition only, the tangible net worth of the Tenant Affiliate is equal to or greater than $500,000,000.00;

15.9.1.2 In the case of an assignment, the Tenant Affiliate shall unconditionally assume in a written agreement for the benefit of Landlord, and shall be deemed to have assumed, this Lease and shall be jointly and severally liable with Tenant for all payments and for the due performance of all terms, covenants and conditions herein contained which are required to be paid and performed by Tenant;

15.9.1.3 No assignment shall be binding upon Landlord unless such assignee shall deliver to Landlord an instrument containing a covenant of assumption by such assignee, but the failure or refusal of such assignee to execute the same shall not release either the assignor or such assignee from its liability as set forth herein effective upon the consummation of such assignment;

15.9.1.4 The Tenant Affiliate must be of a character and reputation, be engaged in a business and propose to use the Premises in a manner in keeping with Landlord’s then-current standards in such respect for tenancies in the Building, and the character of the business to be conducted and the proposed use of the Transfer Space by the Tenant Affiliate shall not: (a) violate any provision or restrictions herein relating to the use or occupancy of the Premises; or (b) increase the demand for parking spaces beyond those required by Tenant; and

 

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15.9.1.5 No Transfer to a Tenant Affiliate shall be effective unless any guarantor of this Lease, or of any of the obligations of Tenant hereunder, consents to such assignment or sublease and agrees in writing with Landlord that such Transfer shall not affect such guarantor’s liability under its guaranty.

15.9.2 Tenant shall provide, in the Affiliate Transfer Notice, a financial statement for the Tenant Affiliate, information which demonstrates that the proposed assignment or sublease meets the requirements of this Paragraph 15.9 and such other information as Landlord may reasonably require to assess compliance with these terms.

15.9.3 Notwithstanding the foregoing, such assignment or sublease must not have been entered into, in whole or in part, as a subterfuge to avoid the obligations and restrictions set forth in this Lease.

15.9.4 As used in this Paragraph 15.9, the term “control” means, with respect to a corporation, the right to exercise, directly or indirectly, fifty percent (50%) or more of the voting rights attributable to the shares of the controlled corporation and, with respect to any entity that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled entity.

15.9.5 No assignment or subletting permitted by this Paragraph 15.9 shall relieve Tenant of its primary liability under this Lease.

15.10 Listings in Building Directory . The listing of any name other than that of Tenant on the doors of the Premises, the Building directory or elsewhere shall not vest any right or interest in this Lease or in the Premises, nor be deemed to constitute Landlord’s consent to any Transfer or to the use or occupancy of the Premises by others. Any such listing shall constitute a privilege revocable in Landlord’s discretion by notice to Tenant.

15.11 Lease Disaffirmance or Rejection . If at any time after an assignment by Tenant, this Lease is not affirmed or is rejected in any bankruptcy proceeding or any similar proceeding, or upon a termination of this Lease due to any such proceeding, Tenant, upon request of Landlord given after such disaffirmance, rejection or termination (and actual notice thereof to Landlord in the event of a disaffirmance or rejection, or in the event of termination other than by act of Landlord), shall, unless prohibited from doing so pursuant to such bankruptcy or similar proceeding: (a) pay to Landlord all Rent and other charges due and owing by the assignee to Landlord under this Lease up to and through the date of such disaffirmance, rejection or termination; and (b) as “tenant,” enter into a new lease of the Premises with Landlord for a term commencing on the effective date of such disaffirmance, rejection or termination and ending on the Lease Expiration Date, at the same Rent and upon the then executory terms, covenants and conditions contained in this Lease, except that: (x) the rights of Tenant named herein under the new lease shall be subject to the possessory rights of the assignee under this Lease and the possessory rights of any persons claiming through or under such assignee, or by virtue of any statute or of any order of any court; (y) such new lease shall require all Events of Default existing under this Lease to be cured by Tenant with due diligence; and (z) such new lease shall require Tenant to pay all Rent which, had this Lease not been so disaffirmed, rejected or terminated, would have become due under the provisions of this Lease after the date of such disaffirmance, rejection or termination with respect to any period prior thereto. If Tenant defaults in its obligations to enter into such new lease for a period of ten (10) days after Landlord’s request, then, in addition to all other rights and remedies by reason of such default, either at law or in equity, Landlord shall have the same rights and remedies against Tenant named herein as if it had entered into such new lease and such new lease had thereafter been terminated as of the commencement date thereof by reason of Tenant’s default thereunder.

16. EMINENT DOMAIN .

16.1 Condemnation of Building . In the event the whole or substantially the whole of the Building or the Premises are taken or condemned by eminent domain or by any conveyance in lieu thereof (such taking, condemnation or conveyance in lieu thereof being hereinafter referred to as “Condemnation”), the Term shall cease and this Lease shall terminate on the earlier of the date the condemning authority takes possession or the date title vests in the condemning authority.

 

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16.2 Inability to Restore . In the event any portion of the Building shall be taken by Condemnation (whether or not such taking includes any portion of the Premises), which taking, in Landlord’s sole judgment, is such that the Building cannot be restored in an economically feasible manner for Tenant’s Permitted Uses, either party shall have the right, by written notice to the other, to terminate this Lease, effective as of the earlier of the date the condemning authority takes possession or the date title vests in the condemning authority (the “Date of Taking”). In addition, if more than twenty percent (20%) of the parking areas serving the Building are taken by Condemnation, Landlord shall, within ninety (90) days after the Date of Taking, provide notice to Tenant (the “Parking Restoration Notice”) of whether Landlord, in its sole judgment, will be able to replace the lost parking capacity. If Landlord is able to replace the lost parking capacity, the Parking Restoration Notice shall also state the date on which Landlord estimates such replacement of the lost parking capacity will be substantially completed. If the date set forth in the Parking Restoration Notice for substantial completion of the replacement of the lost parking capacity is more than twelve (12) months after the Date of Taking, or if Landlord is unable to replace the lost parking capacity, either party shall have the right, by written notice to the other, to terminate this Lease, effective as of the date specified in such written notice of termination (which effective termination date shall not be retroactive, unless mutually agreed by the parties). If neither party elects to terminate this Lease pursuant to this Paragraph 16.2, Landlord shall promptly replace the lost parking capacity, restore the Building as close as possible to its condition immediately prior to such Condemnation or both, as applicable.

16.3 Condemnation of Premises . In the event that a portion, but less than substantially the whole, of the Premises shall be taken by Condemnation, then this Lease shall be terminated as of the Date of Taking as to the portion of the Premises so taken, and, unless Landlord or Tenant exercises its option to terminate this Lease pursuant to Paragraph 16.2, or Tenant exercises its option to terminate this Lease pursuant to this Paragraph 16.3 or Paragraph 16.6 below, this Lease shall remain in full force and effect as to the remainder of the Premises. If: (a) greater than twenty-five percent (25%) of the then-current Rentable Area of Premises is taken by Condemnation; or (b) Tenant’s ability to access the Premises or the parking facilities of the Building is materially, permanently, adversely affected by a taking by Condemnation, then Tenant shall have the right, at Tenant’s option, exercisable by written notice from Tenant to Landlord, to terminate this Lease, effective as of the later of: (i) the date specified by Tenant in its written notice of termination from Tenant to Landlord; or (ii) the Date of Taking.

16.4 Apportionment of Rent . In the event of termination of this Lease pursuant to the provisions of Paragraph 16.1 or 16.2, the Rent shall be apportioned as of such date of termination; provided, however, that those provisions of this Lease which are designated to cover matters of termination and the period thereafter shall survive the termination hereof.

16.5 Award . All compensation awarded or paid upon a Condemnation of any portion of the Project shall belong to and be the property of Landlord without participation by Tenant. Nothing herein shall be construed, however, to preclude Tenant from prosecuting any claim directly against the condemning authority for moving expenses, loss of business, loss of good will, loss of improvements paid for by Tenant and damage to, and cost of removal of, Tenant’s Property; provided, however, that Tenant shall make no claim which shall diminish or adversely affect any award claimed or received by Landlord.

16.6 Project; Temporary Taking . If any portion of the Project other than the Building is taken by Condemnation (except as set forth in Paragraph 16.2 of this Lease with respect to the parking areas serving the Building), this Lease shall be and remain unaffected by such Condemnation, and Tenant shall continue to pay in full the Rent payable hereunder. In addition, if the temporary use or occupancy of the Premises shall be taken by Condemnation during the Term, this Lease shall be and remain unaffected by such Condemnation, and Tenant shall continue to pay in full the Rent payable hereunder, unless such temporary use or occupancy involves more than twenty percent (20%) of the Rentable Area of Premises and is anticipated to persist for a period in excess of twelve (12) months, in which case Tenant shall be permitted to terminate this Lease upon not less than ten (10) days’ prior written notice to Landlord. In the event of any such temporary taking for use or occupancy of all or any part of the Premises, Tenant shall be entitled to appear, claim, prove and receive the portion of the award for such taking that represents compensation for use or occupancy of the Premises during the Term, and Landlord shall be entit