California-San Jose-2720 Zanker Road Lease - NaviSite Inc. and CarrAmerica Realty Corp.
* * * * * * * * * * * * * * * * * * * *
Lease
VALLEY TECHNOLOGY CENTRE
* * * * * * * * * * * * * * * * * * * *
Between
NAVISITE, INC.
(Tenant)
and
CARRAMERICA REALTY CORPORATION
(Landlord)
<PAGE>
LEASE
THIS LEASE (the "Lease") is made as of April 30, 1999 (dated for reference
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purposes only) between CarrAmerica Realty Corporation, a Maryland corporation
(the "Landlord") and the Tenant as named in the Schedule below. The term
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"Project" means the seven buildings (the "Project Buildings") and other
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improvements commonly known as "Valley Technology Centre" located in San Jose,
California, as more particularly described in Exhibit A. The Project is being
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constructed in two Phases with Project Buildings 1, 2, 3, 4 and 5 being
collectively referred to herein as "Phase I", and Project Buildings 6 and 7
being collectively referred to as "Phase II". Construction on Phase II of the
Project has to be commenced. The "Premises" means that portion of the Project
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Buildings described in the Schedule and outlined on Exhibit A, attached hereto.
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The Project Buildings in which the Premises are located shall be collectively
referred to herein as the "Building" and the other Project Buildings shall be
--------
referred to as the "Other Buildings". The following schedule (the "Schedule")
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is an integral part of this Lease. Terms defined in this Schedule shall have
the same meaning throughout the Lease.
SCHEDULE
1. Tenant: NaviSite, Inc., a Delaware corporation
2. Premises: 2720 Zanker Road, San Jose, California (Project Building 2
as shown on Exhibit A)
3. Project: Valley Technology Centre
4. Rentable Square Feet of the Premises: 66,350
5. Tenant's Proportionate Share: 100% of the Building (based upon 66,350
rentable square feet in the Building); Initially 18.96% of the Project
(based upon a total of 350,000 rentable square feet in Phase I of the
Project), and upon completion of Phase II, 14.41% (based upon a total
of 460,590 rentable square feet in both Phases of the Project)
6. Lease Deposit: Prepaid Rent $116,112.50 and Security Deposit
$136,017.50
7. Permitted Use: Office, research and development of electronic
components and operation of a data center (including the diesel
holding tank, chillers and diesel generators reasonably necessary for
the operation thereof)
8. Tenant's Real Estate Broker for this Lease: Colliers Parrish
International, Inc. and CRF Partners, Inc.
9. Landlord's Real Estate Broker for this Lease: None.
10. Tenant Improvements: See the Tenant Improvement Agreement attached
hereto as Exhibit C
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<PAGE>
11. Commencement Date: The date which is twenty-two (22) weeks after the
full execution of this Lease, as indicated by the later dates set
forth on the signature hereof (the "Execution Date"), provided if
Tenant is unable to commence its business operations on such date
because the "Tenant Improvements" (as described in Exhibit C) have not
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been substantially completed as of such date, then the Commencement
Date shall be delayed until the date on which Tenant Improvements have
been substantially completed such that Tenant could commence its
business operations therein, provided further that in no event shall
the Commencement Date be later than the date which is twenty-four (24)
weeks after the Execution Date. Landlord and Tenant shall execute a
Commencement Date Confirmation in the form of Exhibit F, attached
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hereto which shall set forth both the Commencement Date and
Termination Date for this Lease.
12. Termination Date/Term: Seven (7) years with two (2) options to renew
for five (5) years each (See Section 31).
13. Parking Spaces: 225 unassigned spaces (less any spaces utilized by
Tenant for exterior improvements, such as the Generator and Chiller
Pads described in Section 6.E)
14. Guaranty: CMGI (See Section 21 and Exhibit G)
15. Base Rent:
<TABLE>
<CAPTION>
Period Annual Base Rent Monthly Base Rent
------ ---------------- -----------------
<S> <C> <C>
Commencement Date - Month 12: $1,393,350.00 $116,112.50
Months 13 - 24: $1,433,160.00 $119,430.00
Months 25 - 36: $1,472,970.00 $122,747.50
Months 37 - 48: $1,512,780.00 $126,065.00
Months 49 - 60: $1,552,590.00 $129,382.50
Months 61 - 72: $1,592,400.00 $132,700.00
Months 73 - 84: $1,632,210.00 $136,017.50
</TABLE>
Exhibit A: Site Plan of Premises/Project
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Exhibit B: Rules and Regulations
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Exhibit C: Tenant Improvement Exhibit
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Exhibit C-1: Landlord's Tenant Improvement Guidelines
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<PAGE>
Exhibit D: Mortgages Affecting the Property
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Exhibit E: Landlord's Signage Standards
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Exhibit F: Commencement Date Confirmation
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Exhibit G: Form of Guaranty of Lease
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<PAGE>
1. LEASE AGREEMENT. On the terms stated in this Lease, Landlord leases
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the Premises to Tenant, and Tenant leases the Premises from Landlord, for the
Term beginning on the Commencement Date and ending on the Termination Date
unless extended or sooner terminated pursuant to this Lease.
A. Commencement Date. The commencement date ("Commencement Date")
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for this Lease is the date set forth in item 11 of the Schedule. Tenant
acknowledges and agrees that the Commencement Date shall not be dependent upon
the completion of the Tenant Improvements, except as provided in Item 11 of the
Schedule. When the Commencement Date is established, Landlord shall prepare and
Landlord and Tenant shall execute a Commencement Date Confirmation in the form
of Exhibit F attached hereto, which shall set forth both the Commencement Date
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and Termination Date for this Lease.
B. Termination Date. The Termination Date ("Termination Date") of
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this Lease shall be the date set forth in the Commencement Date Confirmation.
2. RENT
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Types of Rent. Tenant shall pay the following Rent in the form of a check
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or wire transfer pursuant to instructions to follow under separate cover from
the Landlord:
(1) Base Rent in monthly installments in advance, the first monthly
---------
installment payable concurrently with the execution of this Lease and
thereafter on or before the first day of each month of the Term in the
amount set forth on the Schedule.
(2) Operating Cost Share Rent in an amount equal to the Tenant's
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Proportionate Share of the Operating Costs for the applicable fiscal
year of the Lease, paid monthly in advance in an estimated amount.
Definitions of Operating Costs and Tenant's Proportionate Share, and
the method for billing and payment of Operating Cost Share Rent are
set forth in Sections 2B, 2C and 2D.
(3) Tax Share Rent in an amount equal to the Tenant's Proportionate
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Share of the Taxes for the applicable fiscal year of this Lease, paid
monthly in advance in an estimated amount. A definition of Taxes and
the method for billing and payment of Tax Share Rent are set forth in
Sections 2B, 2C and 2D.
(4) Additional Rent in the amount of all costs, expenses,
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liabilities, and amounts which Tenant is required to pay under this
Lease, excluding Base Rent, Operating Cost Share Rent, and Tax Share
Rent, but including any interest for late payment of any item of Rent.
(5) Rent as used in this Lease means Base Rent, Operating Cost Share
----
Rent, Tax Share Rent and Additional Rent. Tenant's agreement to pay
Rent is an independent covenant, with no right of setoff, deduction or
counterclaim of any kind.
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<PAGE>
B. Payment of Operating Cost Share Rent and Tax Share Rent.
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(1) Payment of Estimated Operating Cost Share Rent and Tax
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Share Rent. Landlord shall estimate the Operating Costs and Taxes
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of the Project by April 1 of each fiscal year, or as soon as
reasonably possible thereafter. Landlord may revise these estimates
whenever it obtains more accurate information, such as the final real
estate tax assessment or tax rate for the Project. Within twenty (20)
days after receiving the original or revised estimate from Landlord,
Tenant shall pay Landlord one-twelfth (1/12th) of Tenant's
Proportionate Share of this estimate, multiplied by the number of
months that have elapsed in the applicable fiscal year to the date of
such payment including the current month, minus payments previously
made by Tenant for the months elapsed. On the first day of each month
thereafter, Tenant shall pay Landlord one-twelfth (1/12th) of Tenant's
Proportionate Share of this estimate, until a new estimate becomes
applicable.
(2) Correction of Operating Cost Share Rent. Landlord shall
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deliver to Tenant a report for the previous fiscal year (the
"Operating Cost Report") by May 15 of each year, or as soon as
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reasonably possible thereafter, setting forth (a) the actual Operating
Costs incurred, (b) the amount of Operating Cost Share Rent due from
Tenant, and (c) the amount of Operating Cost Share Rent paid by
Tenant. Within twenty (20) days after such delivery, Tenant shall pay
to Landlord the amount due minus the amount paid. If the amount paid
exceeds the amount due, Landlord shall apply the excess to Tenant's
payments of Operating Cost Share Rent next coming due.
(3) Correction of Tax Share Rent. Landlord shall deliver
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to Tenant a report for the previous fiscal year (the "Tax Report") by
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May 15 of each year, or as soon as reasonably possible thereafter,
setting forth (a) the actual Taxes, (b) the amount of Tax Share Rent
due from Tenant, and (c) the amount of Tax Share Rent paid by Tenant.
Within twenty (20) days after such delivery, Tenant shall pay to
Landlord the amount due from Tenant minus the amount paid by Tenant.
If the amount paid exceeds the amount due, Landlord shall apply any
excess as a credit against Tenant's payments of Tax Share Rent next
coming due.
C. Definitions
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(1) Included Operating Costs. "Operating Costs" means any
------------------------ ---------------
expenses, costs and disbursements of any kind other than Taxes, paid
or incurred by Landlord in connection with the management,
maintenance, operation, insurance (including the related deductibles,
provided that, at Tenant's option, any deductibles relating to
property damage shall be amortized as an Included Capital Item in the
manner described below), repair and other related activities in
connection with any part of the Project and of the personal property,
fixtures, machinery, equipment, systems and apparatus used in
connection therewith, including the cost of providing those services
required to be furnished by Landlord under this Lease and a reasonable
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<PAGE>
management fee equal to three percent (3%). Operating Costs shall
also include the costs of any capital improvements which are
reasonably intended to reduce Operating Costs or improve safety, and
those made to keep the Project in compliance with governmental
requirements applicable from time to time or to replace existing
capital improvements, facilities and equipment within the Building or
the common areas of the Project, such as the roof membrane, parking
and landscape areas (collectively, "Included Capital Items");
----------------------
provided, that the costs of any Included Capital Item shall be
amortized by Landlord, together with an amount equal to interest at
ten percent (10%) per annum, over the estimated useful life of such
item and such amortized costs are only included in Operating Costs for
that portion of the useful life of the Included Capital Item which
falls within the Term, unless the cost of the Included Capital Item is
less than Ten Thousand Dollars ($10,000) in which case it shall be
expensed in the year in which it was incurred.
If the Project contains more than one building, then Operating
Costs shall include (i) all Operating Costs fairly allocable to the
Building, and (ii) a proportionate share (based on the gross rentable
area of the Building as a percentage of the gross rentable area of all
of the Buildings in the Project) of all Operating Costs which relate
to the Project in general and are not fairly allocable to any one
building in the Project.
(2) Excluded Operating Costs. Operating Costs shall
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not include:
(a) costs of alterations of tenant premises;
(b) costs of capital improvements other than Included
Capital Items;
(c) interest and principal payments on mortgages or any
other debt costs, or rental payments on any ground
lease of the Project;
(d) real estate brokers' leasing commissions;
(e) legal fees, space planner fees and advertising expenses
incurred with regard to leasing the Building or
portions thereof;
(f) any cost or expenditure for which Landlord is
reimbursed, by insurance proceeds or otherwise, other
than by Operating Cost Share Rent;
(g) depreciation (except on any Included Capital Items);
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<PAGE>
(h) franchise or income taxes imposed upon Landlord, except
to the extent imposed in lieu of all or any part of
Taxes;
(i) costs of initial construction of the Building Shell, as
defined in Section 3.A (including, without limitation,
the costs of repairing all punch list items), and costs
of correcting defects in construction of the Building
Shell (as opposed to the cost of normal repair,
maintenance and replacement expected with the
construction materials and equipment installed in the
Building in light of their specifications);
(j) legal and auditing fees which are for the benefit of
Landlord such as collecting delinquent rents, preparing
tax returns and other financial statements, and audits
other than those incurred in connection with the
preparation of reports required pursuant to Section 2B
above;
(k) that portion of any wages, salaries, benefits and
bonuses (if any) of any employee which is incurred for
services not related directly to the management,
maintenance, operation and repair of the Building; and
(l) fines, penalties and interest.
(3) Taxes. "Taxes" means any and all taxes,
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assessments and charges of any kind, general or special, ordinary or
extraordinary, levied against the Project, which Landlord shall pay or
become obligated to pay in connection with the ownership, leasing,
renting, management, use, occupancy, control or operation of the
Project or of the personal property, fixtures, machinery, equipment,
systems and apparatus used in connection therewith. Taxes shall
include real estate taxes, personal property taxes, sewer rents, water
rents, special or general assessments, transit taxes, ad valorem
taxes, and any tax levied on the rents hereunder or the interest of
Landlord under this Lease (the "Rent Tax"). Taxes shall also include
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all reasonable fees and other reasonable costs and expenses paid by
Landlord in reviewing any tax and in seeking a refund or reduction of
any Taxes, whether or not the Landlord is ultimately successful.
Taxes shall also include any assessments or fees paid to any business
park owners association, or similar entity, which are imposed against
the Project pursuant to any Covenants, Conditions and Restrictions
("CC&R's") recorded now or in the future against the Land and any
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installments of principal and interest required to pay any existing or
future general or special assessments for public improvements,
services or benefits, and any increases resulting from reassessments
imposed in connection with any change in ownership or new
construction. Landlord agrees that any new CC&R's (or future
modifications to existing CC&R's) shall not materially and adversely
affect Tenant's rights hereunder, or materially increase Tenant's
financial obligations hereunder.
7
<PAGE>
If the Project contains more than one building, then Taxes shall include
(i) all Taxes fairly allocable to the Building, and (ii) a proportionate share
(based on the gross rentable area of the Building as a percentage of the gross
rentable area of all of the Buildings in the Project) of all Taxes which relate
to the Project in general and are not fairly allocable to any one building in
the Project.
For any year, the amount to be included in Taxes (a) from taxes or
assessments payable in installments, shall be the amount of the installments
(with any interest) due and payable during such year, and (b) from all other
Taxes, shall at Landlord's election be the amount accrued, assessed, or
Otherwise imposed for such year or the amount due and payable in such year. Any
refund or other adjustment to any Taxes by the taxing authority shall apply
during the year in which the adjustment is made. If there is a reduction in any
Taxes with respect to any year in which Tenant has paid Tax Share Rent
hereunder, and Landlord receives a tax refund or reimbursement as a result
thereof, Landlord shall first deduct therefrom the reasonable expenses incurred
by Landlord in obtaining such refund or reimbursement, and then refund to Tenant
(or at Landlord's election apply against Tenant's other payment obligation
hereunder) Tenant's Proportionate Share of the remaining balance of such tax
refund or reimbursement. Taxes shall not include any net income (except Rent
Tax), capital, stock, succession, transfer, franchise, gift, estate or
inheritance tax, except to the extent that such tax shall be imposed in lieu of
any portion of Taxes.
(4) Lease Year. "Lease Year" means each consecutive twelve-
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month period beginning with the Commencement Date, except that if the
Commencement Date is not the first day of a calendar month, then the first Lease
Year shall be the period from the Commencement Date through the final day of the
twelve months after the first day of the following month, and each subsequent
Lease Year shall be the twelve months following the prior Lease Year.
(5) Fiscal Year. "Fiscal Year" means the calendar year, except
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that the first Fiscal Year and the last Fiscal Year of the Term may be a partial
calendar year.
D. Computation of Base Rent and Rent Adjustments.
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(1) Prorations. If this Lease begins on a day other than the
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first day of a month, the Base Rent, Operating Cost Share Rent and Tax Share
Rent shall be prorated for such partial month based on the actual number of days
in such month. If this Lease begins on a day other than the first day, or ends
on a day other than the last day, of the Fiscal Year, Operating Cost Share Rent
and Tax Share Rent shall be prorated for the applicable Fiscal Year.
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<PAGE>
(2) Default Interest. Any sum due from Tenant to Landlord not
----------------
paid when due shall bear interest from the date due until paid at the lesser of
twelve percent (12%) per annum or the maximum rate permitted by law.
(3) Rent Adjustments. The square footage of the Premises,
----------------
Building, and other Project Buildings, as set forth in the Schedule are
conclusively deemed to be the actual square footage thereof, without regard to
any subsequent remeasurement of the Premises, Building or other Project
Buildings. Notwithstanding the foregoing, Tenant's Proportionate Share as set
forth in Item 5 of the Schedule shall be adjusted (and this Lease amended)
accordingly in the event there is: (i) a material expansion to the Building or
any of the other Project Buildings (i.e., the square footage of such additional
space shall be added to the square footage of such Building as set forth in
Exhibit A); and/or (ii) the actual square footage of the Phase II Buildings
following their completion materially differs from the square footage of such
Phase II Buildings as set forth in Exhibit A. If any Operating Cost paid in one
Fiscal Year relates to more than one Fiscal Year, Landlord may proportionately
allocate such Operating Cost among the related Fiscal Years.
(4) Books and Records. Landlord shall maintain books and
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records reflecting the Operating Costs and Taxes in accordance with sound
accounting and management practices. Tenant and its certified public accountant
shall have the right to inspect Landlord's records at Landlord's applicable
local office or other location designated by Landlord upon at least seventy-two
(72) hours' prior notice during normal business hours during the one hundred
twenty (120) days following the respective delivery of the Operating Cost Report
or the Tax Report. The results of any such inspection shall be kept strictly
confidential by Tenant and its agents, and Tenant and its certified public
accountant must agree, in their contract for such services, to such
confidentiality restrictions and shall specifically agree that the results shall
not be made available to any other tenant of the Project. Unless Tenant sends to
Landlord any written exception to either such report within said one hundred
twenty (120) period, such report shall be deemed final and accepted by Tenant.
Tenant shall pay the amount shown on both reports in the manner prescribed in
this Lease, whether or not Tenant takes any such written exception, without any
prejudice to such exception. If Tenant makes a timely exception, Landlord shall
cause its independent certified public accountant to issue a final and
conclusive resolution of Tenant's exception within thirty (30) days of
Landlord's receipt of Tenant's exception. Tenant shall pay the cost of such
certification unless Landlord's original determination of annual Operating Costs
and Taxes in the aggregate overstated the amounts thereof by more than five
percent (5%), in which event Landlord shall pay the cost of certification.
(5) Miscellaneous. So long as Tenant is in default of any
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obligation under this Lease beyond the expiration of any applicable notice,
grace and cure periods, Tenant shall not be entitled to any refund of any amount
from Landlord. If this Lease is terminated for any reason prior to the annual
determination of
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<PAGE>
Operating Cost Share Rent or Tax Share Rent, either party shall pay the full
amount due to the other within twenty (20) days after Landlord's notice to
Tenant of the amount when it is determined. Landlord may commingle any payments
made with respect to Operating Cost Share Rent or Tax Share Rent, without
payment of interest.
3. CONDITION OF BUILDING SHELL/PREMISES AND POSSESSION.
----------------------------------------------------
A. Condition of Building Shell/Premises. The "Building Shell"
------------------------------------
shall mean the building structure, exterior walls, exterior glass, floor slab,
roof (including the roof membrane), parking lot, parking lot lighting, and
landscaping for the Project and the base for the monument sign. The Building
Shell shall include bringing phone, gas, electric, plumbing, fire and water
service to the Building (i.e., stubbed but not distributed), installing the main
fire sprinkler trunks (i.e., installed but not distributed or "dropped"), and
the pull section for electrical power. Landlord shall be responsible for all
costs associated with the construction of the Building Shell, including the
design and permitting costs associated with the Building Shell and costs
associated with bringing the Building Shell into compliance with the Americans
with Disabilities Act of 1990 and other architectural access laws, rules and
regulations. The Building Shell does not include any elevators, stairs, HVAC,
roof screens or thermal insulation. In the event of any conflict between the
plans for the Building Shell or the "Tenant Improvement Plans" (as defined in
the Tenant Improvement Agreement, attached hereto as Exhibit C) and the
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definition of "Building Shell" contained herein, the parties agree that the
definitions contained in this Lease shall control. Any improvements which do
not constitute part of the "Building Shell" shall be deemed to be part of the
"Tenant Improvements" to be constructed by Tenant in accordance with the Tenant
Improvement Agreement. Tenant hereby acknowledges that it has inspected and
approved the Building Shell and related exterior improvements in the condition
which existed as of the date on which this Lease is executed by Tenant, except
for any "latent defects" (i.e., any defects in the construction of the Building
Shell which are not readily apparent from a visual inspection and walk-through
of the Building) which are noted by Tenant within the twelve month period
immediately following the Execution Date. Tenant shall cause the Tenant
Improvements to be completed within the Premises at Tenant's sole cost in
accordance with the terms and conditions of the Tenant Improvement Agreement,
subject only to the "Tenant Improvement Allowance", as defined therein. Except
as set forth in this Section 3.A, Landlord is leasing the Premises to Tenant "as
is", without any representations or warranties of any kind and without any
obligation to perform any other alterations or improvements to the Building
Shell or the Premises, except that Landlord agrees to promptly correct and/or
repair any latent defects relating to the Building Shell which are timely noted
by Tenant.
B. Tenant's Possession. Tenant's taking possession of any portion
--------------------
of the Building shall be conclusive evidence that the Building Shell and
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<PAGE>
Premises were in good order, repair and condition, except for the latent defects
relating to the Building Shell which were timely noted by Tenant in accordance
with Section 3.A. Following the Execution Date, Tenant shall have the right to
take possession of the Premises or any portion thereof prior to the Commencement
Date for purposes of constructing the Tenant Improvements in accordance with
Tenant Improvement Agreement attached hereto as Exhibit C; provided, however,
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that all terms of this Lease shall apply to such pre-Term possession except for
the payment of Rent and other amounts due hereunder. Landlord agrees to make all
manufacturers' and other warranties and guarantees for the newly constructed
Tenant Improvements, the roof and any mechanical, electrical, plumbing, HVAC and
other systems serving the Premises available to Tenant within ten (10) days of
Tenant's request, and to the extent applicable, Landlord shall cooperate with
Tenant so that Tenant shall have the benefit of such warranties and guarantees.
4. SERVICES AND UTILITIES. Tenant shall promptly pay, as the same become
-----------------------
due, all charges for water, gas, electricity, telephone, sewer service, waste
pick-up and any other utilities, materials and services furnished directly to or
used by Tenant on or about the Premises during the term, including without
limitation, (i) meter, use and/or connection fees, hook-up fees, or standby fees
(excluding any connection fees or hook-up fees which relate to making the
existing electrical, gas, water and sewer service available to the Premises as
of the Commencement Date), and (ii) penalties for discontinued interrupted
service. If any utility service is not separately metered to the Premises, then
Tenant shall pay its pro rata share of the cost of such utility service with all
others served by the service not separately metered. However, if Landlord
reasonably determines that Tenant is using a disproportionate amount of any
utility service, then Landlord at its sole election may (i) periodically charge
Tenant, as Additional Rent, a sum equal to Landlord's reasonable estimate of the
cost of Tenant's excess use of such utility service, or (ii) install, at
Tenant's expense, a separate meter to measure the utility service supplied to
the Premises. Any interruption or cessation of utilities resulting from any
causes, including any entry for repairs pursuant to this lease, and any
renovation, redecoration or rehabilitation of any area of the Project shall not
render Landlord liable for damages to either person or property or for
interruption or loss to Tenant's business, nor be construed as an eviction of
Tenant, nor work an abatement of any portion of Rent, nor relieve Tenant from
fulfillment of any covenant or agreement hereof; provided, however, in the event
that an interruption of the Project services causes the Premises to be
untenantable for the permitted uses hereunder (including the operation of the
Data Center) for a period of at least ten (10) consecutive days and such
interruption was caused by the negligence or willful acts or omissions of
Landlord or its agents, employees or contractors, then monthly Rent shall be
proportionally abated thereafter for such untenantable portion of the Premises.
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<PAGE>
5. ALTERATIONS.
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A. Landlord's Consent and Conditions. Tenant shall not make any
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improvements or alterations to the Premises or Building (the "Work") that affect
the structural components of the Building or which have a building permit value
of more than $50,000, without in each instance submitting plans and
specifications for the Work to Landlord and obtaining Landlord's prior written
consent, which shall not be unreasonably withheld or delayed. The parties agree
that the Tenant Improvement work described in Exhibit C shall be governed by the
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Tenant Improvement Agreement, and shall not constitute Work for purposes of this
Section. Tenant shall pay Landlord's reasonable and actual costs incurred for
the review of all of the plans and all other items submitted by Tenant.
Landlord will be deemed to be acting reasonably in withholding its consent for
any Work which (a) adversely impacts the base structural components or systems
of the Building, (b) adversely impacts any other tenant's premises, or (c) is
visible from outside the Premises and in the reasonable judgment of Landlord,
appears unsightly therefrom.
Tenant shall pay for the cost of all Work, including the cost of any and
all approvals, permits, fees and other charges which may be required as a
condition of performing such Work. Upon completion all Work shall become the
property of Landlord, except for Tenant's furnishings, moveable equipment and
personal property and trade fixtures (including all of the aforementioned items
located in Tenant's Data Center) and for items which Landlord requires Tenant to
remove at Tenant's cost at the termination of the Lease pursuant to Section 5E.
The following requirements shall apply to all Work:
(1) Prior to commencement, Tenant shall furnish to Landlord
building permits and certificates of insurance reasonably satisfactory to
Landlord.
(2) Tenant shall perform all Work so as to maintain peace and
harmony among other contractors serving the Project and shall avoid unreasonable
interference with other work to be performed or services to be rendered in the
Project.
(3) The Work shall be performed in a good and workmanlike
manner, meeting the standard for construction and quality of materials in the
Building, and shall comply with all applicable insurance requirements and all
applicable governmental laws, ordinances and regulations ("Governmental
------------
Requirements").
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(4) Tenant shall perform all Work so as to minimize or prevent
disruption to other tenants, and Tenant shall comply with all reasonable
requests of Landlord in response to complaints from other tenants.
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<PAGE>
(5) Tenant shall perform all Work in compliance with any
reasonable "Policies, Rules and Procedures for Construction Projects" which may
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be in effect at the time the Work is performed. The foregoing Policies, Rules
and Procedures for Construction Projects shall not apply to the construction of
the Tenant Improvements.
(6) Tenant shall permit Landlord to supervise and observe all
Work. Landlord may charge Tenant for the actual out-of-pocket costs incurred by
Landlord if Landlord deems it reasonably necessary to hire an outside consultant
to supervise and observe Tenant's Work (e.g., a structural engineer to review an
supervise any Work which may affect the structural components of the Building or
roof).
(7) Upon completion, Tenant shall furnish Landlord with
contractor's affidavits and full and final statutory waivers of liens, as-built
plans and specifications, and receipted bills covering all labor and materials,
and all other close-out documentation related to the Work, including any other
information required under any reasonable "Policies, Rules and Procedures for
----------------------------------
Construction Projects" which may be in effect at such time.
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B. Damage to Systems. If any part of the mechanical, electrical or
------------------
other systems in the Premises (e.g., HVAC, life safety or automatic fire
extinguisher/sprinkler system) shall be damaged by Tenant or its employees,
agents, contractors, subcontractors or invitees, during the performance of the
Work, Tenant shall notify Landlord of such damage and promptly cause the
necessary repairs to be made with contractors reasonably acceptable to Landlord,
provided if Tenant fails to cause such damage to be repaired within the ten (10)
day period following the occurrence of such damage (or, if the nature of such
damage is such that more than ten (10) days is required to complete the repair,
then if Tenant fails to commence such repairs within such ten (10) day period
and thereafter diligently prosecute such repair to completion), then Landlord
may elect to commence (or complete) such repairs at Tenant's expense. There
shall be no abatement of Rent during such period of repair, whether such repairs
are performed by Tenant or Landlord. Landlord may also at any reasonable time
make any repairs or alterations which Landlord deems reasonably necessary for
the safety or protection of the Project, or which Landlord is required to make
by any court or pursuant to any Governmental Requirement. The cost of any
repairs made by Landlord on account of Tenant's default beyond the expiration of
any applicable notice and cure periods, or on account of the misuse or neglect
by Tenant or its invitees, contractors or agents anywhere in the Project, shall
become Additional Rent payable by Tenant on demand and in no event later than
within twenty (20) days of Tenant's receipt of Landlord's invoice for the same.
C. No Liens. Tenant has no authority to cause or permit any lien or
---------
encumbrance of any kind to affect Landlord's interest in the Project; any such
lien or encumbrance shall attach to Tenant's interest only. If any mechanic's
lien shall
13
<PAGE>
be filed or claim of lien made for work or materials furnished to Tenant, then
Tenant shall at its expense within twenty (20) days thereafter either discharge
or contest the lien or claim. If Tenant contests the lien or claim, then Tenant
shall (i) within such twenty (20) day period, provide Landlord adequate security
for the lien or claim, (ii) contest the lien or claim in good faith by
appropriate proceedings that operate to stay its enforcement, and (iii) pay
promptly any final adverse judgment entered in any such proceeding. If Tenant
does not comply with these requirements, Landlord may discharge the lien or
claim, and the amount paid, as well as reasonable attorney's fees and other
reasonable expenses incurred by Landlord, shall become Additional Rent payable
by Tenant on demand and in no event later than within twenty (20) days of
Tenant's receipt of Landlord's invoice for the same.
D. Ownership of Improvements. Upon request by Tenant, at the time
--------------------------
Landlord approves Tenant's proposal for any Work (as defined in this Section 5)
or Tenant's plans for the Tenant Improvements (as defined in Exhibit C),
Landlord shall also state whether or not any of the proposed improvements will
have to be removed upon the termination of this Lease. Unless otherwise
indicated by Landlord in accordance with the preceding sentence, all Work,
partitions, hardware, equipment, machinery and all other improvements and all
fixtures constructed in the Premises by Tenant, shall (i) become Landlord's
property upon installation without compensation to Tenant, unless Landlord
consents otherwise in writing, and (ii) at Landlord's option, Landlord may elect
(provided that such election is made and Tenant is informed of such election at
least thirty (30) days prior to the termination of this Lease or the termination
of Tenant's possession) that such items either (a) be surrendered to Landlord
with the Premises at the termination of the Lease or of Tenant's right to
possession, or (b) be removed in accordance with Subsection 5E below.
Notwithstanding the foregoing, Tenant's furnishings, moveable equipment, other
personal property and trade fixtures (including all of the items located
Tenant's Data Center) shall remain Tenant's property throughout the Term and
shall be removed by Tenant upon the termination of this Lease or of Tenant's
right to possession. Unless Landlord agrees otherwise in writing, Tenant shall
not remove any HVAC equipment (except for the chillers and cooling equipment
specifically installed for and which exclusively serves the Data Center), light
fixtures or any portion of the drop ceiling without Landlord's prior written
consent, which Landlord may withhold in its sole and absolute discretion.
E. Removal Upon Termination. Upon the termination of this Lease or
-------------------------
Tenant's right of possession, Tenant shall remove from the Premises and Project
its trade fixtures, furniture, moveable equipment and other personal property
(including all of the aforementioned items located in Tenant's Data Center), any
improvements which Landlord elects pursuant to Section 5D shall be removed by
Tenant, and (unless otherwise agreed to in writing by Landlord) any improvements
to any portion of the Project other than the interior of the Premises. Tenant
shall repair all damage caused by the installation or removal of the foregoing
items. If
14
<PAGE>
Tenant does not remove such property on or prior to the termination of this
Lease or the termination of Tenant's possession, then Tenant shall be
conclusively presumed to have, at Landlord's election, either (i) conveyed such
property to Landlord without compensation or (ii) abandoned such property, and
Landlord may dispose of or store any part thereof in any reasonable manner at
Tenant's sole cost, without waiving Landlord's right to claim from Tenant all
reasonable expenses arising out of Tenant's failure to remove the property, and
without liability to Tenant or any other person. Landlord shall have no duty to
be a bailee of any such personal property. If Landlord elects abandonment,
Tenant shall pay to Landlord, upon demand, any reasonable expenses incurred for
disposition. Landlord agrees and acknowledges that Tenant shall have no
obligation to remove any typical and customary office improvements from the
Premises upon the expiration or earlier termination of this Lease.
6. USE OF PREMISES.
----------------
A. Limitation on Use. Tenant shall use the Premises only for the
------------------
Permitted Use stated in the Schedule. Tenant shall not allow any use of the
Premises which will negatively affect the cost of coverage of Landlord's
insurance on the Project. Except for the substances which may be contained in
Tenant's fire suppression system and the diesel holding tank, Tenant shall not
allow any inflammable or explosive liquids or materials to be kept on the
Premises. Tenant shall not allow any use of the Premises which would cause the
value or utility of any part of the Premises to diminish or would materially and
adversely affect other tenants' use and enjoyment of their space in the Project
or with the operation of the Project by Landlord. Tenant shall not permit any
nuisance or waste to occur on the Project or upon the Premises, or allow any
offensive noise or odor in or around the Project. At the end of each business
day, or more frequently if necessary, Tenant shall deposit all garbage and other
trash (excluding any inflammable, explosive and/or hazardous materials) in trash
bins or containers approved by Landlord in locations designated by Landlord from
time to time. If any governmental authority shall deem the Premises to be a
"place of public accommodation" under the Americans with Disabilities Act or any
other comparable law as a result of Tenant's use, Tenant shall either modify its
use to cause such authority to rescind its designation or be responsible for any
alterations, structural or otherwise, required to be made to the Building or the
Premises under such laws.
B. Signs. Tenant shall not place on any portion of the Premises any
------
sign, placard, lettering, banner, displays or other advertising or communicative
material which is visible from the exterior of the Building without the prior
written approval of Landlord. Subject to Landlord's prior approval (which
approval shall not be unreasonably withheld or delayed) and the other
requirements of this Section, Tenant shall be entitled, at its sole cost, to
place its name on the entrance to the door to the Premises, on the crown of the
Building, and on the existing street monument sign base. Any approved signs
shall strictly conform to all Governmental Restrictions, any CC&R's recorded
against the Project, and any sign criteria which
15
<PAGE>
may be established by Landlord and in effect at the time, and shall be installed
(and removed upon the Termination Date) at Tenant's expense. Tenant, at its sole
cost, shall maintain such signs in good condition and repair, including the
repair of any damage caused to the Building or Project upon Tenant's removal of
such signs. Landlord current Signage Standards are attached hereto as Exhibit E.
---------
C. Parking. Tenant, its contractors, agents, employees and invitees
--------
shall have the non-exclusive right to park in the Project's parking facilities
in common with other tenants of the Project upon terms and conditions, as may
from time to time be established by Landlord. Notwithstanding the foregoing,
Tenant shall have the right to designate up to twenty (20) of the parking spaces
located near the front entrance of the Building as Tenant's "Visitor Parking",
provided that these spaces shall count against the total number of parking
stalls to be provided by Landlord for Tenant's use as set forth in the Schedule.
Tenant agrees not to overburden the parking facilities (i.e., use more than the
----
number of parking stalls indicated on the Schedule) and agrees to cooperate with
Landlord and other tenants in the Project in the use of the parking facilities.
Landlord reserves the right in its reasonable discretion to determine whether
the parking facilities are becoming crowded and to allocate and assign parking
spaces among Tenant and the other tenants in the Project so long as such
assigned spaces are reasonably proximate to the Premises. Landlord shall have
the right to charge Tenant the portion that is allocable to Tenant (based on its
Proportionate Share of the total parking spaces) of any charges (e.g., fees or
----
taxes) imposed by the Regional Air Quality Control Board or other governmental
or quasi-governmental agency in connection with the parking facilities (e.g., in
----
connection with operation or use of the parking facilities). Landlord shall not
be liable to Tenant, nor shall this Lease be affected, if any parking is
impaired by moratorium, initiative, referendum, law, ordinance, regulation or
order passed, issued or made by any governmental or quasi-governmental body.
D. Prohibition Against Use of Roof and Structure of Building.
-----------------------------------------------------------
Tenant shall be prohibited from using any all or any portion of the roof of the
Building or any portion of the structure of the Building during the Term of this
Lease (or any extensions thereof) for any purposes (including without limitation
for the installation, maintenance and repair of a satellite dish and/or other
telecommunications equipment), without the prior written consent of Landlord,
which consent Landlord may withhold in its sole and absolute discretion. Any
use of the roof or the structure of the Building for satellite dish or antennae
purposes shall be pursuant to the terms of a separate license agreement and not
this Lease. Nothing herein shall limit Landlord's rights under Section 11.N, or
require Landlord to obtain Tenant's consent prior to exercising such rights.
Notwithstanding the foregoing, Tenant may at its sole cost install,
maintain, and from time to time replace an antennea or satellite dish
(collectively, the "Dish Equipment") on the roof of the Building, provided that
--------------
(A) Tenant shall obtain Landlord's prior written approval, which shall not be
unreasonably withheld, of the
16
<PAGE>
proposed size, weight, location and aesthetic impact of the Dish Equipment and
the method for fastening the Dish Equipment to the Building; (B) Tenant will at
its sole cost comply with (i) all Governmental Requirements, (ii) Landlord's
reasonable requirements from time to time (including the requirement to relocate
such Dish Equipment), and (iii) the conditions of any bond or warranty
maintained by Landlord on the roof, (C) the Dish Equipment shall not materially
interfere, electronically or otherwise, with the equipment, facilities, use or
operations of Landlord or of any licensees or tenants of Landlord, and (D) the
Dish Equipment shall be for Tenant's own use (i.e., Tenant shall not permit
unrelated third parties to install or maintain Dish Equipment on the roof of the
Building). Landlord may supervise any roof penetration. Tenant shall repair any
damage to the Building caused by Tenant's installation, maintenance,
replacement, use or removal of the Dish Equipment. The Dish Equipment shall
remain the property of Tenant, shall be solely insured by Tenant, and Tenant may
remove the Dish Equipment at its cost at any time during the Term. Tenant shall
remove the Dish at its cost upon expiration or termination of the Lease.
However, in connection with the Dish Equipment installation or removal, Tenant
shall not remove any of the HVAC equipment on the roof without Landlord's prior
written consent, which Landlord may withhold in its sole and absolute
discretion. Tenant shall protect, defend, indemnify and hold harmless Landlord
from and against claims, damages, liabilities, costs and expenses of every kind
and nature, including attorneys' fees, incurred by or asserted against Landlord
arising out of Tenant's installation, maintenance, replacement, use or removal
of the Dish Equipment. Landlord shall use commercially reasonable efforts to
ensure that no new Dish Equipment is installed (whether by Landlord or other
third parties) on the roof of the Building or the Other Project Buildings to the
extent such Dish Equipment will materially and adversely affect Tenant's use of
its pre-existing Dish Equipment.
E. Pads for Diesel Holding Tank, Generators and Chillers. Subject
-----------------------------------------------------
to all of the provisions of Section 5 above (or, if applicable, the Tenant
Improvement Agreement), Landlord agrees that Tenant may use a portion of the
Project common area for the installation of generator and chiller pads and the
diesel generators and chillers, the number, location and type of which shall be
depicted in the plans for the Work (or, if applicable, the Tenant Improvement
Plans described in Exhibit C), provided that the number of parking spaces set
---------
forth in the Schedule for Tenant's use shall be reduced by any of the Project's
parking spaces which are utilized for such diesel holding tank, generator and
chiller pads.
F. Data Center. Landlord and Tenant agree that Tenant shall have
-----------
sole and exclusive rights to access Tenant's Data Center, provided that Landlord
(a) may (but shall have no obligation) to enter the Data Center in the event of
an emergency, (b) shall have no repair, maintain, alteration or other
obligations whatsoever with respect to the Data Center and that Tenant shall
assume full responsibility for the same, and (c) shall have no right to obtain
keys or pass cards
17
<PAGE>
for access to or entry into the Data Center. Tenant shall maintain the Data
Center in good order and repair. Tenant's use of the Data Center shall comply
with all applicable Governmental Requirements as well as the requirements under
this Lease. Landlord agrees that all of Tenant's furnishings, moveable
equipment, other personal property and trade fixtures located in the Data Center
shall at all times remain the property of Tenant.
7. GOVERNMENTAL REQUIREMENTS AND BUILDING RULES.
---------------------------------------------
Tenant shall comply with all Governmental Requirements applying to its use,
maintenance and repair of the Premises. Tenant shall also comply with all
reasonable rules for the Project which may be established and amended from time
to time by Landlord and which shall not materially and adversely interfere with
Tenant's use and occupancy of the Building. The present rules and regulations
are contained in Exhibit B. Failure by another tenant to comply with the rules
---------
or failure by Landlord to enforce them shall not relieve Tenant of its
obligation to comply with the rules or make Landlord responsible to Tenant in
any way. Landlord shall use reasonable efforts to apply the rules and
regulations uniformly with respect to Tenant and any other tenants in the
Project under leases containing rules and regulations similar to this Lease.
8. REPAIR AND MAINTENANCE.
-----------------------
A. Landlord's Obligations. Landlord shall keep in good order,
----------------------
condition and repair (i) the structural parts of the Building, which structural
parts include only the foundation and subflooring of the Building and the
structural condition of the roof and the exterior walls of the Building (but
excluding the interior surfaces of exterior walls and exterior and interior of
all windows, doors, ceiling and plate glass which shall be maintained and
repaired by Tenant), (ii) the roof membrane, and (iii) the common areas of the
Project. For purposes of this Lease, the common areas of the Project shall mean
those areas outside of the Buildings which are for the benefit of all of the
tenants in the Project (e.g., the landscape and parking areas, lighting,
sidewalks), driveways and the utility pipes, conduits and lines which run from
the street to each Building and between each of the Buildings). The costs
incurred by Landlord (or, if applicable, by Tenant) to perform the foregoing
obligations to the extent they are deemed "Operating Costs" (as defined in
---------------
Section 2C) shall be passed through to Tenant and any other tenants in the
Project, except that any damage to any of the foregoing caused by the negligence
or willful acts or omissions of Tenant or of Tenant's agents, employees or
invitees, or by reason of the failure of Tenant to perform or comply with any
terms of this Lease, or caused by Tenant or Tenant's agents, employees or
contractors during the performance of any Work shall be repaired by Tenant, at
Tenant's expense, with contractors reasonably approved by Landlord, or at
Landlord's option, by Landlord, at Tenant's expense. It is an express condition
precedent to all obligations of Landlord to repair and maintain that Tenant
shall have notified Landlord of the need for such repairs or maintenance.
18
<PAGE>
Tenant waives the provisions of Sections 1941 and 1942 of the California Civil
Code and any similar or successor law regarding Tenant's right to make repairs
and deduct the expenses of such repairs from the Rent due under this Lease.
Notwithstanding the foregoing, in the event Tenant notifies Landlord in writing
of an item needing immediate repair and there is no dispute concerning the need
for such repair, the scope of the repair or that Landlord is the party
responsible for such repair, then (A) in the event of an emergency repair (e.g.,
roof leakage or other repairs which adversely and materially affect Tenant's
ability to conduct its normal business operations within the Premises), Landlord
shall commence and complete such repair within the five (5) day period following
Landlord's receipt of Tenant's repair notice, unless the nature of the repair is
such that more than five (5) days is required to complete such repair in which
case Landlord shall commence the repair within such five (5) day period and
thereafter diligently prosecute the same to completion, or (b) in the event of
any other type of repair, Landlord shall commence and complete such repair
within the thirty (30) day period following Landlord's receipt of Tenant's
repair notice, unless the nature of the repair is such that more than thirty
(30) days is required to complete such repair in which case Landlord shall
commence the repair within such thirty (30) day period and thereafter diligently
prosecute the same to completion. In the event Landlord fails to dispute or
commence the repair within such thirty (30) day period, then Tenant shall have
the right, but not the obligation, to cause the repair of such item and to
submit an invoice to Landlord for the reasonable out-of-pocket costs incurred by
Tenant for the same (including reasonable supporting documentation for the
same), and Landlord shall pay such amount to Tenant within thirty (30) days of
receipt of Tenant's invoice and related documentation for such work.
B. Tenant's Obligations. Tenant shall at all times and at its own
--------------------
expense clean, keep and maintain in good order, condition and repair every part
of the Premises (including Tenant's fixtures and personal property) which is not
within Landlord's obligation pursuant to Section 8A. Tenant's repair and
maintenance obligations shall include, all plumbing and sewage facilities within
the Premises, fixtures, interior walls and ceiling, floors, windows (including
the repairing, resealing, cleaning and replacing of both interior and exterior
windows), doors, entrances, plate glass, showcases, skylights, all electrical
facilities and equipment, including lighting fixtures, lamps, fans and any
exhaust equipment and systems, electrical motors and all other appliances and
equipment of every kind and nature located in, upon or about the Premises.
Tenant agrees and acknowledges that Landlord's responsibility for the utility
pipes and lines which service the Building is limited to bringing such utilities
to the Building and that Tenant shall be responsible for all costs associated
with the distribution and maintenance of such utility pipes and lines within the
Building. Tenant shall also be responsible for all pest control within the
Premises, and for all trash removal and disposal for the Premises. Tenant shall
obtain HVAC systems preventive maintenance contracts with quarterly service in
accordance with manufacturer recommendations, which shall be
19
<PAGE>
subject to the reasonable prior written approval of Landlord and paid for by
Tenant, and which shall provide for and include replacement of filters, oiling
and lubricating of machinery, parts replacement, adjustment of drive belts, oil
changes and other preventive maintenance, including annual maintenance of duct
work, interior unit drains and caulking at sheet metal, and recaulking of jacks
and vents on an as needed basis. Tenant shall have the benefit of all warranties
available to Landlord regarding the equipment in such HVAC systems. In the event
Tenant fails to perform such maintenance and repairs within the time periods
specified herein, and such failure continues for a period of thirty (30) days
following Tenant's receipt of Landlord's written notice regarding the same, then
Landlord may elect (but shall have no obligation) to perform all such repairs
and maintenance itself, at Tenant's expense, including, without limitation, to
the Building's mechanical, electrical or other systems in the Premises (e.g.,
HVAC, life safety and automatic fire extinguisher/sprinkler systems), except
that Landlord shall not make any repairs in the Data Center without Tenant's
prior written consent.
9. WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE.
---------------------------------------------
A. Waiver of Claims. To the extent permitted by law, Tenant waives
----------------
any claims it may have against Landlord or its officers, directors, employees or
agents for business interruption or damage to property sustained by Tenant as
the result of any act or omission of Landlord, its agents or employees. To the
extent permitted by law, Landlord waives any claims it may have against Tenant
or its officers, directors, employees or agents for loss of rents (other than
Rent) or damage to property sustained by Landlord as the result of any act or
omission of Tenant, its agents or employees.
B. Indemnification. Tenant shall indemnify, defend and hold
---------------
harmless Landlord and its officers, directors, employees and agents against any
claim by any third party for injury to any person or damage to or loss of any
property occurring in or around the Project and arising from the use of the
Premises or from any other act or omission or negligence of Tenant, its
employees, agents or invitees, or Tenant's breach of its obligations hereunder.
Tenant's obligations under this section shall survive the termination of this
Lease.
Landlord shall indemnify, defend and hold harmless Tenant and its officers,
directors, employees and agents against any claim by any third party for injury
or damage to person or the Premises to the extent caused by the gross negligence
or intentional misconduct of Landlord or any of Landlord's employees or agents,
or Landlord's breach of its obligations hereunder. Landlord's obligations under
this section shall survive the termination of this Lease.
C. Tenant's Insurance. Tenant shall maintain insurance as follows,
------------------
with such other terms, coverages and insurers, as Landlord shall reasonably
require from time to time:
20
<PAGE>
(1) Commercial general liability insurance, with (a) contractual
liability including the indemnification provisions contained in this Lease, (b)
a severability of interest endorsement, (c) limits of not less than Two Million
Dollars ($2,000,000) combined single limit per occurrence and not less than Two
Million Dollars ($2,000,000) in the aggregate for bodily injury, sickness or
death, and property damage, and umbrella coverage of not less than Five Million
Dollars ($5,000,000).
(2) Property Insurance against "All Risks" of physical loss
---------
covering the replacement cost of all improvements, fixtures and personal
property and business interruption. Tenant waives all rights of subrogation,
and Tenant's property insurance shall include a waiver of subrogation in favor
of Landlord.
(3) Workers' compensation or similar insurance in form and
amounts required by law, and Employer's Liability with not less than the
following limits:
Each Accident $500,000
Disease -- Policy Limit $500,000
Disease -- Each Employee $500,000
Such insurance shall contain a waiver of subrogation provision in favor of
Landlord and its agents.
Tenant's insurance shall be primary and not contributory to that carried by
Landlord, its agents, or mortgagee. Landlord, and if any, Landlord's building
manager or agent, mortgagee and ground lessor shall be named as additional
insureds as respects to insurance required of the Tenant in Section 9C(1). The
company or companies writing any insurance which Tenant is required to maintain
under this Lease, as well as the form of such insurance, shall at all times be
subject to Landlord's approval, and any such company shall be licensed to do
business in the state in which the Building is located. Such insurance
companies shall have a A.M. Best rating of A VI or better.
(4) Tenant shall cause any contractor of Tenant performing work
on the Premises to maintain insurance as follows, with such other terms,
coverages and insurers, as Landlord shall reasonably require from time to time:
(a) Commercial General Liability Insurance, including contractor's
liability coverage, contractual liability coverage, completed
operations coverage, broad form property damage endorsement, and
contractor's protective liability coverage, to afford protection
with limits, for each occurrence, of not less than One Million
Dollars
21
<PAGE>
($1,000,000) with respect to personal injury, death or property
damage.
(b) Workers' compensation or similar insurance in form and amounts
required by law, and Employer's Liability with not less than the
following limits:
Each Accident $500,000
Disease -- Policy Limit $500,000
Disease -- Each Employee $500,000
Such insurance shall contain a waiver of subrogation provision in favor of
Landlord and its agents.
Tenant's contractor's insurance shall be primary and not contributory to
that carried by Tenant, Landlord, their agents or mortgagees. Tenant and
Landlord, and if any, Landlord's building manager or agent, mortgagee or ground
lessor shall be named as additional insured on Tenant's contractor's insurance
policies.
D. Insurance Certificates. Tenant shall deliver to Landlord
----------------------
certificates evidencing all required insurance no later than five (5) days prior
to the Commencement Date and each renewal date. Each certificate will provide
for thirty (30) days prior written notice of cancellation to Landlord and
Tenant.
E. Landlord's Insurance. Landlord shall maintain "All-Risk"
--------------------
property insurance at replacement cost, including loss of rents, on the
Building, and commercial general liability insurance policies covering the
common areas of the Project, each with such terms, coverages and conditions as
are normally carried by reasonably prudent owners of properties similar to the
Project. With respect to property insurance, Landlord and Tenant mutually waive
all rights of subrogation, and the respective "All-Risk" coverage property
--------
insurance policies carried by Landlord and Tenant shall contain enforceable
waiver of subrogation endorsements.
10. FIRE AND OTHER CASUALTY.
------------------------
A. Termination. If a fire or other casualty causes substantial
-----------
damage to the Building or the Premises, and sufficient insurance proceeds will
be available to Landlord (or would have been available to Landlord had Landlord
maintained the insurance required to be maintained by Landlord hereunder) to
cover the cost of any restoration to the Building and the Premises to its
condition as of the Commencement Date, Landlord shall engage a registered
architect to certify within one (1) month of the casualty to both Landlord and
Tenant the amount of time needed to restore the Building and the Premises to
tenantability, using standard working methods without the payment of overtime
and other premiums. If the time
22
<PAGE>
needed exceeds six (6) months from the beginning of the restoration, or two (2)
months therefrom if the restoration would begin during the last twelve (12)
months of the Lease, either Landlord or Tenant may terminate this Lease by
notice to the other party within ten (10) days after the notifying party's
receipt of the architect's certificate. If sufficient insurance proceeds will
not be available to Landlord (or would have been available to Landlord had
Landlord maintained the insurance required to be maintained by Landlord
hereunder) to cover the cost of any restoration to the Building or the Premises
to its condition as of the Commencement Date, Landlord may terminate this Lease
by written notice to Tenant within thirty (30) days of the date of the fire or
other casualty. Any termination pursuant to this Section 10A shall be effective
thirty (30) days from the date of such termination notice and Rent shall be paid
by Tenant to that date, with an abatement for any portion of the Premises which
has been untenantable (i.e., Tenant cannot use the Premises for the permitted
uses hereunder) after the casualty.
B. Restoration. If a casualty causes damage to the Building or the
-----------
Premises but this Lease is not terminated for any reason, then subject to the
rights of any mortgagees or ground lessors, Landlord shall obtain the applicable
insurance proceeds and diligently restore the Building and the Premises, subject
to current Governmental Requirements, provided Landlord's obligation, should it
elect or be obligated to repair or rebuild, shall be limited (i) if only the
Building Shell is damaged as a result of such casualty, to the repair and
restoration of the Building Shell, or (ii) if both the Building Shell and
interior improvements within the Premises are damaged or destroyed, to the
repair of the Building Shell and the construction of those improvements which
are typical for a generic general office use (the "Base Improvements").
Notwithstanding the foregoing, Tenant shall, at Tenant's sole expense, be
responsible for replacing or fully repairing its damaged improvements (including
any Tenant Improvements in excess of the Base Improvements (including the Data
Center, diesel holding tank, chillers and generators, Dish Equipment), as well
as Tenant's personal property and fixtures. All such repairs, restoration and
rebuilding shall be performed by Landlord and Tenant as applicable, in a good
workmanlike manner and in accordance with all Governmental Requirements, using
new materials of equal or greater quality than those used for the initial
construction of the Building Shell or the other exterior or interior
improvements to the Building made by either party prior to the casualty. Except
to the extent that the casualty was caused by the negligence or intentional
misconduct of Tenant, its agents or employees, Rent otherwise payably hereunder
shall be abated on a per diem basis during the period that Landlord causes its
repair and restoration work to be completed, provided that Tenant's obligation
to pay Rent hereunder shall resume upon Landlord's completion of its repair and
restoration work notwithstanding the fact that Tenant may not have completed its
repair and restoration work as of such resumption. Tenant shall not be entitled
to any compensation or damages from Landlord for loss of the use of the
Premises, damage to Tenant's personal property and trade fixtures or any
inconvenience occasioned by such damage, repair or
23
<PAGE>
restoration. Tenant hereby waives the provisions of Section 1932, Subdivision 2,
and Section 1933, Subdivision 4, of the California Civil Code, and the
provisions of any similar law hereinafter enacted.
11. EMINENT DOMAIN. If a part of the Project is taken by eminent domain
--------------
or deed in lieu thereof which is so substantial that the Premises cannot
reasonably be used by Tenant for the operation of its business in Tenant's
reasonable judgment, then either party may terminate this Lease effective as of
the date of the taking. Rent shall abate from the date of the taking in
proportion to any part of the Premises taken. The entire award for a taking of
any kind shall be paid to Landlord, and Tenant shall have no right to share in
the award; provided, however, that nothing contained herein shall be deemed to
give Landlord any interest in or require Tenant to assign to Landlord any
separate award made to Tenant for the taking of Tenant's personal property and
trade fixtures, or its relocation costs. All obligations accrued to the date of
the taking shall be performed by the party liable to perform said obligations as
set forth herein. Nothing herein shall prevent Tenant from pursuing a separate
award for its trade fixtures, over building-standard Tenant Improvements
(including the Data Center) and moving expenses in connection with the taking,
but only if such recovery does not reduce the award payable to Landlord.
12. RIGHTS RESERVED TO LANDLORD. Landlord may exercise at any time any of
---------------------------
the following rights respecting the operation of the Project without liability
to Tenant of any kind:
A. Name. To change the name of all or any of the Buildings or the
----
Project, or the street address of the Buildings or the suite number(s) of the
Premises, so long as Landlord's exercise of the same is done in a reasonable
manner and with reasonable advance notice to Tenant regarding the same, and in
the case of any change to the Building address, so long as Landlord reimburses
Tenant for the reasonable costs associated with preparing new business cards,
letterhead stationery and other directly related out-of-pocket costs associated
with such change, unless such address change was mandated by applicable
governmental authorities.
B. Signs. To install, modify and/or maintain any signs on the
-----
exterior of the Buildings or on the Project, and to approve at its sole but
reasonable discretion, prior to installation, any of Tenant's signs in the
Premises visible from the common areas or the exterior of the Building.
C. Window Treatments. To approve, at its sole but reasonable
-----------------
discretion, prior to installation, any shades, blinds, ventilators or window
treatments of any kind, as well as any lighting within the Premises that may be
visible from the exterior of the Building or any interior common area.
Notwithstanding the foregoing, Landlord agrees and acknowledges that Tenant may
block out the windows to the Data Center with interior window coverings,
provided that such materials are reasonably acceptable to Landlord.
24
<PAGE>
D. Intentionally deleted.
E. Access. To have access to the Premises (excluding the
------
Data Center) with twenty four hour prior notice (except in the case of
an emergency in which case Landlord shall have the right to immediate
access) to inspect the Premises, and to perform its obligations, or
make repairs, alterations, additions or improvements, as permitted by
this Lease; provided Landlord shall (i) use commercially reasonable
efforts to avoid any interference with Tenant's business operation,
and (ii) comply with any reasonable security measures which Tenant may
implement from time to time (which may include the right to have any
visitors accompanied by Tenant's personnel and restrictions against
entering the Data Center).
F. Preparation for Reoccupancy. To decorate, remodel,
---------------------------
repair, alter or otherwise prepare the Premises for reoccupancy at any
time after Tenant abandons the Premises (as defined in Section 13.E),
without relieving Tenant of any obligation to pay Rent.
G. Heavy Articles. To approve the weight, size, placement
--------------
and time and manner of movement within the Building of any safe,
central filing system or other heavy article of Tenant's property.
Tenant shall move its property entirely at its own risk.
H. Show Premises. Subject to Section 12.E above, to show
-------------
the Premises to prospective purchasers, tenants, brokers, lenders,
mortgagees, investors, rating agencies or others at any reasonable
time, provided that (i) Landlord gives prior notice to Tenant and does
not materially interfere with Tenant?s use of the Premises, and (ii)
no prospective tenants may be shown the Premises until the last six
(6) months of the Term.
I. Intentionally omitted.
J. Use of Lockbox. To designate a lockbox collection
--------------
agent for collections of amounts due Landlord. In that case, the date
of payment of Rent or other sums shall be the date of the agent's
receipt of such payment or the date of actual collection if payment is
made in the form of a negotiable instrument thereafter dishonored upon
presentment. However, Landlord may reject any payment for all purposes
as of the date of receipt or actual collection by mailing to Tenant
within a reasonable time period following receipt or collection a
check equal to the amount sent by Tenant.
K. Repairs and Alterations. Subject to Section 12.E, to
-----------------------
make repairs or alterations to the common areas of the Project
(including any nearby building, land, street, alley or way) and in
doing so to transport any required material through the common areas
of the Project, to temporarily close or partition off certain
25
<PAGE>
portions of the common areas, or to temporarily suspend services or
use of common areas of the Project (e.g., as may be necessary in the
event the parking areas are resurfaced). Landlord shall use
commercially reasonable efforts to minimize any inconvenience to
Tenant and the other tenants in the Project, but shall not be
obligated to perform such repairs or alterations during non-business
hours unless Tenant so requests, in which case Tenant shall pay as
Additional Rent hereunder any additional costs incurred by Landlord as
a result of performing such work during non-business hours (e.g.,
Tenant would be responsible for any difference between the normal and
overtime or weekend rates).
L. Landlord's Agents. If Tenant is in default under this
-----------------
Lease beyond any applicable grace, notice and cure period, possession
of Tenant's funds or negotiation of Tenant's negotiable instrument by
any of Landlord's agents shall not waive any breach by Tenant or any
remedies of Landlord under this Lease.
M. Intentionally deleted.
N. Use of Roof. Subject to Section 6.D, to permit Landlord
-----------
(or any entity selected by Landlord) to access the roof to perform its
maintenance and repair obligations hereunder, as well as to inspect
the roof and any Dish Equipment installed thereon by Tenant, provided
that such access, maintenance and repair does not unreasonably and
adversely interfere with Tenant's use of the Premises.
O. Other Actions. To take any other action which Landlord
-------------
deems reasonably necessary in connection with the operation,
maintenance or preservation of the Building and the Project.
13. TENANT'S DEFAULT. ANY OF THE FOLLOWING SHALL CONSTITUTE A
----------------
DEFAULT BY TENANT:
A. Rent Default. Tenant fails to pay any Rent within five
------------
(5) business days of receipt of Landlord's written notice for the
same, provided that such notice shall be in lieu of and not in
addition to any notice required to be given Tenant under applicable
law prior to Landlord's commencement of an unlawful detainer action or
similar eviction proceeding against Tenant;
B. Assignment/Sublease or Hazardous Substances Default.
---------------------------------------------------
Tenant defaults in its obligations under Section 18 Assignment and
Sublease or Section 29 Hazardous Substances;
C. Other Performance Default. Tenant fails to perform any
-------------------------
other obligation to Landlord under this Lease, and this failure
continues for twenty (20) days after written notice from Landlord,
except that if Tenant begins to cure its failure within the twenty
(20) day period but cannot reasonably complete its cure within such
period, then, so long as Tenant continues to diligently prosecute such
26
<PAGE>
cure, the twenty (20) day period shall be extended for so long as
Landlord may, in its sole but reasonable discretion, deem necessary to
complete the cure;
D. Credit Default. One of the following credit defaults
--------------
occurs:
(1) Tenant commences any proceeding under any law
relating to bankruptcy, insolvency, reorganization or relief of debts,
or seeks appointment of a receiver, trustee, custodian or other
similar official for the Tenant or for any substantial part of its
property, or any such proceeding is commenced against Tenant and
either remains undismissed for a period of thirty (30) days or results
in the entry of an order for relief against Tenant which is not fully
stayed within seven (7) days after entry;
(2) Tenant becomes insolvent or bankrupt, does not
generally pay its debts as they become due, or admits in writing its
inability to pay its debts, or makes a general assignment for the
benefit of creditors;
(3) Any third party obtains a levy or attachment under
process of law against Tenant's leasehold interest.
E. Vacation or Abandonment Default. Tenant vacates or
-------------------------------
abandons the Premises and is not paying all Rent when due and
performing all of Tenant's other material obligations under this
Lease, which material obligations include, without limitation,
Tenant's maintenance of the HVAC system in strict accordance with the
terms and conditions set forth herein.
14. LANDLORD REMEDIES. UPON A DEFAULT (BEYOND ANY EXPIRATION OF
-----------------
APPLICABLE NOTICE, GRACE AND CURE PERIODS GRANTED HEREUNDER), LANDLORD
SHALL HAVE THE FOLLOWING REMEDIES, IN ADDITION TO ALL OTHER RIGHTS AND
REMEDIES PROVIDED BY LAW OR OTHERWISE PROVIDED IN THIS LEASE, TO WHICH
LANDLORD MAY RESORT CUMULATIVELY OR IN THE ALTERNATIVE:
A. Termination of Lease or Possession. If Tenant defaults
----------------------------------
(after expiration of any applicable notice and cure periods expressly
granted hereunder), Landlord may elect by written notice to Tenant
either to terminate this Lease or to terminate Tenant's possession of
the Premises without terminating this Lease. In either case, Tenant
shall immediately vacate the Premises and deliver possession to
Landlord, and Landlord may repossess the Premises and may, at Tenant's
sole cost, remove any of Tenant's signs and any of its other property,
without relinquishing its right to receive Rent or any other right
against Tenant. In the latter case, this Lease shall continue in full
force and effect as long as Landlord does not terminate this Lease,
and Landlord shall have the right to collect Rent when due.
27
<PAGE>
B. Possession Termination Damages. If Landlord elects to
------------------------------
terminate Tenant's possession without terminating this Lease and
Landlord takes possession of the Premises itself, then Landlord may
relet for Tenant's account all or any portion of the Premises for such
rent, length of time and other terms as Landlord in its sole
discretion shall determine, without any obligation to do so prior to
renting other vacant areas in the Building. Tenant shall be liable
immediately to Landlord for all reasonable costs Landlord incurs in
reletting the Premises or any part thereof, including, without
limitation, broker's commissions, expenses of cleaning and
redecorating the Premises required by the reletting and like costs.
Tenant shall pay to Landlord the Rent and other sums due under this
Lease on the date the Rent is due, less the rent and other sums
received by Landlord from any releasing of the Premises. No act by
Landlord other than giving written notice to Tenant shall terminate
this Lease. Acts of maintenance, efforts to relet the Premises or the
appointment of a receiver on Landlord's initiative to protect
Landlord's interest under this Lease shall not constitute a
termination of Tenant's right to possession.
C. Lease Termination Damages. If Landlord elects to
-------------------------
terminate this Lease, then this Lease shall terminate on the date for
termination set forth in such notice. Tenant shall immediately vacate
the Premises and deliver possession to Landlord, and Landlord may
repossess the Premises and may, at Tenant's sole cost, remove any of
Tenant's signs and any of its other property in a reasonable manner,
without relinquishing its right to receive Rent or any other right
against Tenant. On termination, Landlord has the right to recover
from Tenant as damages:
(1) The worth at the time of award of unpaid Rent and
other sums due and payable which had been earned at the time of
termination; plus
(2) The worth at the time of award of the amount by
which the unpaid Rent and other sums due and payable which after
termination until the time of award exceeds the amount of such Rent
loss that Tenant proves could have been reasonably avoided; plus
(3) The worth at the time of award of the amount by
which the unpaid Rent and other sums due and payable for the balance
of the Term after the time of award exceeds the amount of such Rent
loss that Tenant proves could be reasonably avoided; plus
(4) Any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to
perform Tenant's obligations under this Lease, or which, in the
ordinary course of things, would be likely to result therefrom,
including, without limitation, any costs or expenses incurred by
Landlord: (i) in retaking possession of the Premises; (ii) in
maintaining, repairing, preserving, restoring, replacing, cleaning,
altering or rehabilitating the Premises or any portion thereof,
including such acts for reletting to a new tenant or
28
<PAGE>
tenants; (iii) for leasing commissions; or (iv) for any other costs
necessary or appropriate to relet the Premises; plus
(5) At Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time
to time by the laws of the State of California.
The "worth at the time of award" of the amounts referred to in
Sections 14C(1) and 14C(2) is computed by allowing interest at the
maximum rate permitted by law on the unpaid rent and other sums due
and payable from the termination date through the date of award. The
"worth at the time of award" of the amount referred to in Section
14C(3) is computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus
one percent (1%). Tenant waives redemption or relief from forfeiture
under California Code of Civil Procedure Sections 1174 and 1179, or
under any other present or future law, in the event Tenant is evicted
or Landlord takes possession of the Premises by reason of any default
of Tenant hereunder.
D. Landlord's Remedies Cumulative. All of Landlord's
------------------------------
remedies under this Lease shall be in addition to all other remedies
Landlord may have at law or in equity including without limitation,
the remedy described in California Civil Code Section 1951.4 (i.e.,
Landlord may continue the Lease in effect after Tenant's breach and
abandonment and recover as rent as it becomes due if Tenant has the
right to sublet or assign the Lease, subject to reasonable
limitations). Waiver by Landlord of any breach of any obligation by
Tenant shall be effective only if it is in writing, and shall not be
deemed a waiver of any other breach, or any subsequent breach of the
same obligation. Landlord's acceptance of payment by Tenant shall not
constitute a waiver of any breach by Tenant, and if the acceptance
occurs after Landlord's notice to Tenant, or termination of the Lease
or of Tenant's right to possession, the acceptance shall not affect
such notice or termination. Acceptance of payment by Landlord after
commencement of a legal proceeding or final judgment shall not affect
such proceeding or judgment. Landlord may advance such monies and
take such other actions for Tenant's account as reasonably may be
required to cure or mitigate any default by Tenant. Tenant shall
immediately reimburse Landlord for any such advance, and such sums
shall bear interest at the default interest rate until paid.
E. WAIVER OF TRIAL BY JURY. EACH PARTY WAIVES TRIAL BY
-----------------------
JURY IN THE EVENT OF ANY LEGAL PROCEEDING BROUGHT BY THE OTHER IN
CONNECTION WITH THIS LEASE. EACH PARTY SHALL BRING ANY ACTION AGAINST
THE OTHER IN CONNECTION WITH THIS LEASE IN A FEDERAL OR STATE COURT
LOCATED IN CALIFORNIA, CONSENTS TO THE JURISDICTION OF SUCH COURTS,
AND WAIVES ANY RIGHT TO HAVE ANY PROCEEDING TRANSFERRED FROM
29
<PAGE>
SUCH COURTS ON THE GROUND OF IMPROPER VENUE OR INCONVENIENT FORUM.
15. SURRENDER. Upon the expiration or earlier termination of
---------
this Lease for any reason, Tenant shall surrender the Premises to
Landlord in its condition existing as of the Commencement Date, normal
wear and tear and damage by fire or other casualty or condemnation
excepted, with all interior walls cleaned and repaired, if marked or
damaged, all carpets vacuumed (but not shampooed), all broken, marred
or nonconforming acoustical ceiling tiles replaced, all windows
washed, the plumbing and electrical systems and lighting in good order
and repair, including replacement of any burned out or broken light
bulb or ballasts, the HVAC equipment serviced and repaired by a
reputable and licensed service firm acceptable to Landlord, and all
tiled (but not concrete) floors cleaned, all to the reasonable
satisfaction of Landlord. Tenant shall remove from the Premises all
Tenant?s trade fixtures and personal property as required herein, and
those alterations required to be removed pursuant to Section 5.E., and
restore the Premises to its condition prior to their installation. If
Tenant fails to remove any alterations and/or Tenant's trade fixtures,
personal property, and such failure continues after the termination of
this Lease, Landlord may retain or dispose of such property and all
rights of Tenant with respect to it shall cease, or Landlord may place
all or any portion of such property in public storage for Tenant's
account. Tenant shall be liable to Landlord for the reasonable costs
of removal of any such alterations and Tenant's personal property and
the reasonable storage and transportation costs of the same, and the
reasonable cost of repairing and restoring the Premises, together with
interest at the interest rate from the date of expenditure by
Landlord. If the Premises are not so surrendered at the termination of
this Lease, Tenant shall indemnify Landlord against all loss or
liability, including attorneys' fees and costs, resulting from delay
by Tenant in so surrendering the Premises, unless such delay is solely
caused by Landlord's actions.
16. HOLDOVER. Tenant shall have no right to holdover possession
--------
of the Premises after the expiration or termination of this Lease
without Landlord's prior written consent which Landlord may withhold
in its sole and absolute discretion. If, however, Tenant retains
possession of any part of the Premises after the term, Tenant shall
become a Tenant at sufferance only, for the entire Premises upon all
of the terms of this Lease as might be applicable to such tenancy,
except that Tenant shall pay all of the base rent, operating cost
share rent and tax share rent at one hundred fifty percent (150%) the
rate in effect immediately prior to such holdover, computed on a
monthly basis for each full or partial month Tenant remains in
possession. In addition, if Tenant remains in possession of the
Premises after the expiration or termination of this Lease without
Landlord's prior written consent (or remains in possession beyond the
period to which Landlord consented), Tenant shall also pay Landlord
for all of Landlord's direct and consequential damages resulting from
Tenant's holdover. No acceptance of rent or other payments by Landlord
under
30
<PAGE>
these holdover provisions shall operate as a waiver of Landlord's
right to regain possession or any other of Landlord's remedies.
17. SUBORDINATION TO GROUND LEASES AND MORTGAGES.
---------------------------------------------
A. Subordination. This Lease shall be subordinate to any
-------------
present or future ground lease or mortgage respecting the Project, and
any amendments to such ground lease or mortgage, at the election of
the ground lessor or mortgagee as the case may be, effected by notice
to Tenant in the manner provided in this Lease, provided that any such
subordination shall be documented in a subordination and non-
disturbance agreement providing that so long as Tenant is not in
default under this Lease after the expiration of any applicable notice
and cure periods, Tenant may remain in possession of the Premises
under the terms of this Lease, even if the ground lessor should
terminate the ground lease or if the mortgagee or its successor should
acquire Landlord's title to the Project. Within ten (10) days of
receipt of such a subordination and non-disturbance agreement from
Landlord or ground lessor or mortgagee, Tenant shall execute and
deliver at least three (3) executed originals of the same to the
requesting party. Tenant shall be solely responsible for all costs
(including reasonable attorneys' fees) incurred by Tenant and Landlord
to obtain, negotiate and execute such subordination and non-
disturbance agreement. Any mortgagee has the right, at its sole
option, to subordinate its mortgage to the terms of this Lease,
without notice to, nor the consent of, Tenant.
B. Termination of Ground Lease or Foreclosure of Mortgage.
------------------------------------------------------
If any ground lease is terminated or mortgage foreclosed or deed in
lieu of foreclosure given and the ground lessor, mortgagee, or
purchaser at a foreclosure sale shall thereby become the owner of the
Project, Tenant shall attorn to such ground lessor or mortgagee or
purchaser upon Tenant's receipt of written request therefrom without
any deduction or setoff by Tenant, and this Lease shall continue in
effect as a direct lease between Tenant and such ground lessor,
mortgagee or purchaser. The ground lessor or mortgagee or purchaser
shall be liable as Landlord only during the time such ground lessor or
mortgagee or purchaser is the owner of the Project. At the request of
Landlord, ground lessor or mortgagee, Tenant shall execute and deliver
within ten (10) days of the request any document furnished by the
requesting party to evidence Tenant's agreement to attorn.
C. Security Deposit. Any ground lessor or mortgagee shall
----------------
be responsible for the return of any security deposit by Tenant only
to the extent any security deposit is received by such ground lessor
or mortgagee. Landlord agrees to transfer the Security Deposit to such
ground lessor or mortgagee upon the termination of any ground lease or
mortgage foreclosure (or deed in lieu of foreclosure).
31
<PAGE>
D. Notice and Right to Cure. The Project is subject to
------------------------
any ground lease and mortgage identified with name and address of
ground lessor or mortgagee in Exhibit D to this Lease (as the same may
---------
be amended from time to time by written notice to Tenant). Tenant
agrees to send by registered or certified mail to any ground lessor or
mortgagee identified either in such Exhibit or in any later written
notice from Landlord to Tenant a copy of any notice of default sent by
Tenant to Landlord. If Landlord fails to cure such default within the
required time period under this Lease, but ground lessor or mortgagee
begins to cure within ten (10) days after such period and proceeds
diligently to complete such cure, then ground lessor or mortgagee
shall have such additional time as is necessary to complete such cure,
including any time necessary to obtain possession if possession is
necessary to cure, and Tenant shall not begin to enforce its remedies
so long as the cure is being diligently pursued, provided in no event
shall the cure exceed a period of sixty (60) days.
E. Definitions. As used in this Section 17, "mortgage"
-----------
shall include "trust deed" and "deed of trust", and "mortgagee" shall
include "trustee", "beneficiary" and the mortgagee of any ground
lessee, and "ground lessor," "mortgagee," and "purchaser at a
foreclosure sale" shall include, in each case, all of its successors
and assigns, however remote.
18. ASSIGNMENT AND SUBLEASE.
-----------------------
A. In General. Tenant shall not, without the prior consent
----------
of Landlord in each case, (i) make or allow any assignment or
transfer, by operation of law or otherwise, of any part of Tenant's
interest in this Lease, (ii) grant or allow any lien or encumbrance,
by operation of law or otherwise, upon any part of Tenant's interest
in this Lease, (iii) sublet any part of the Premises, or (iv) permit
anyone other than Tenant and its employees to occupy any part of the
Premises. Tenant shall remain primarily liable for all of its
obligations under this Lease, notwithstanding any assignment or
transfer. No consent granted by Landlord shall be deemed to be a
consent to any subsequent assignment or transfer, lien or encumbrance,
sublease or occupancy. Tenant shall pay all of Landlord's attorneys'
fees and other expenses incurred in connection with any consent
requested by Tenant or in reviewing any proposed assignment or
subletting. Any assignment or transfer, grant of lien or encumbrance,
or sublease or occupancy without Landlord's prior written consent
shall be void. Except in the case of a Permitted Transfer (as defined
below), if Tenant shall assign this Lease or sublet the Premises in
its entirety, any rights of Tenant to renew this Lease, extend the
Term or to lease additional space in the Project shall be extinguished
thereby and will not be transferred to the assignee or subtenant, all
such rights being personal to the Tenant named herein, except in the
case of a sublet Landlord agrees that Tenant may exercise any
extension rights as to the portion of the Premises then occupied by
Tenant subject to the terms and conditions in Section 31.
Notwithstanding the foregoing, if no default on the part of Tenant has
occurred
32
<PAGE>
and is continuing (after notice and expiration of applicable cure
periods), Tenant may, without Landlord's prior written consent, assign
this Lease or sublet any portion of the Premises (hereinafter
collectively referred to as a "Permitted Transfer") to one of the
following (hereinafter a "Permitted Transferee"): (i) a parent or
subsidiary of Tenant, or an entity under common control with Tenant,
(ii) an entity into which Tenant is merged or consolidated, (iii) an
entity which acquires substantially all of Tenant's stock or assets
(collectively, any entity described in (i), (ii) and (iii) is deemed a
"Tenant Affiliate"), if Tenant (a) notifies Landlord at least ten (10)
business days prior to the Permitted Transfer, (b) in the case of an
assignment of this Lease, provides Landlord with information
satisfactory to Landlord to determine that the net worth of the
proposed assignee (or successor entity) is equal to or greater than
the net worth of Tenant immediately prior to such assignment, and (c)
furnishes Landlord with a written document executed by such proposed
assignee or sublessee in which such entity agrees to unconditionally
assume all of Tenant's obligations under this Lease. In the event all
of the foregoing requirements for a Permitted Transfer are satisfied,
except that the Permitted Transferee's net worth is not equal to or
greater than the net worth of Tenant immediately prior to such
transfer, Landlord agrees that such transfer will nonetheless be
deemed a Permitted Transfer for purposes hereof if Tenant (or the
Permitted Transferee) supplies Landlord with new Letter of Credit
meeting the requirements set forth in Section 21 (the "New Letter of
Credit"), which will replace the then existing Letter of Credit under
Section 21, except that the amount drawable by Landlord under the New
Letter of Credit shall at all times for the remainder of the Term be
equal to $2,388,660.00, and shall not be reduced in the manner
contemplated in Section 21. No Permitted Transfer shall release Tenant
from any of its obligations hereunder, nor result in any change in the
permitted "uses" of the Premises.
B. Landlord's Consent. Landlord will not unreasonably
------------------
withhold its consent to any proposed assignment or subletting. It
shall be reasonable for Landlord to withhold its consent to any
assignment or sublease if (i) Tenant is in default under this Lease
(beyond any applicable notice, grace and cure periods expressly
provided hereunder), (ii) the proposed assignee or sublessee is a
tenant in the Project or an affiliate of such a tenant or an entity
with which Landlord is engaged in active negotiations, (iii) the
financial responsibility, nature of business, and character of the
proposed assignee or subtenant are not all reasonably satisfactory to
Landlord, (iv) in the reasonable judgment of Landlord the purpose for
which the assignee or subtenant intends to use the Premises (or a
portion thereof) is not in keeping with Landlord's standards for the
Building or are in violation of the terms of this Lease or any other
leases in the Project, or (v) the proposed assignee or subtenant is a
government entity. The foregoing shall not exclude any other
reasonable basis for Landlord to withhold its consent.
33
<PAGE>
C. Procedure. Tenant shall notify Landlord of any proposed
---------
assignment or sublease at least thirty (30) days prior to its proposed
effective date, except in the case of a Permitted Transfer in which
case Tenant shall provide such notice to Landlord at least ten (10)
business days prior to the effective date of such Permitted Transfer.
The notice shall include the name and address of the proposed assignee
or subtenant, its corporate affiliates in the case of a corporation
and its partners in a case of a partnership, an execution copy of the
proposed assignment or sublease agreement, and sufficient information
to permit Landlord to determine the financial responsibility and
character of the proposed assignee or subtenant. As a condition to any
effective assignment of this Lease, the proposed assignee shall
execute and deliver in a form satisfactory to Landlord at least
fifteen (15) days prior to the effective date of the assignment, an
assumption of all of the obligations of Tenant under this Lease. As a
condition to any effective sublease, the proposed subtenant shall
execute and deliver in a form satisfactory to Landlord at least
fifteen (15) days prior to the effective date of the sublease, an
agreement to comply with all of Tenant's obligations under this Lease,
and at Landlord's option, an agreement (except for the economic
obligations which subtenant will undertake directly to Tenant) to
attorn to Landlord under the terms of the sublease in the event this
Lease terminates before the sublease expires.
D. Change of Management or Ownership. Any transfer of the
---------------------------------
direct or indirect power to affect the management or policies of
Tenant or direct or indirect change in 25% or more of the ownership
interest in Tenant shall constitute an assignment of this Lease,
provided that in no event shall any transfer of the direct or indirect
power to affect the management or policies of Tenant or direct or
indirect change in any ownership interest in Tenant constitute an
assignment of this Lease, so long as Tenant is a public corporation
whose stock is transferred on a nationally recognized stock exchange.
E. Excess Payments. If Tenant shall assign this Lease or
---------------
sublet any part of the Premises for consideration in excess of the
pro-rata portion of Rent applicable to the space subject to the
assignment or sublet, then Tenant shall pay to Landlord, as Additional
Rent, 50% of any such excess immediately upon receipt; provided that
prior to sharing such excess rent with Landlord, Tenant may first
reimburse itself for the reasonable attorneys' fees, tenant
improvements costs and broker's commissions incurred by Tenant in
connection with such assignment or sublet.
F. Recapture. Intentionally omitted.
---------
19. CONVEYANCE BY LANDLORD. If Landlord shall at any time
----------------------
transfer its interest in the Project or this Lease, Landlord shall
promptly deliver to its transferee any then remaining amount of the
Security Deposit (including the Letter of Credit), provided that
Landlord shall not be responsible for causing the Letter of Credit to
be reissued naming such transferee as the new beneficiary
34
<PAGE>
thereunder). Landlord shall be released of any obligations occurring
after such transfer, except the obligation to return to Tenant any
remaining amount of the Security Deposit (including the Letter of
Credit) which is not delivered to and received by its transferee, and
Tenant shall look solely to Landlord's successors for performance of
such obligations. This Lease shall not be affected by any such
transfer.
20. ESTOPPEL CERTIFICATE. Each party shall, within twenty (20)
--------------------
days of receiving a request from the other party, execute, acknowledge
in recordable form, and deliver to the other party or its designee a
certificate stating, subject to a specific statement of any applicable
exceptions, that the Lease as amended to date is in full force and
effect, that the Tenant is paying Rent and other charges on a current
basis, and that to the best of the knowledge of the certifying party,
the other party has committed no uncured defaults and has no offsets
or claims. The certifying party may also be required to state the date
of commencement of payment of Rent, the Commencement Date, the
Termination Date, the Base Rent, the current Operating Cost Share Rent
and Tax Share Rent estimates, the status of any improvements required
to be completed by Landlord, the amount of any security deposit, and
such other matters as may be reasonably requested. Failure to deliver
such statement within the time required shall be conclusive evidence
against the non-certifying party that this Lease, with any amendments
identified by the requesting party, is in full force and effect, that
there are no uncured defaults by the requesting party, that not more
than one month's Rent has been paid in advance, that the non-
certifying party has not paid any security deposit, and that the non-
certifying party has no claims or offsets against the requesting
party.
21. LEASE DEPOSIT. Tenant shall deposit with Landlord on the
-------------
date Tenant executes and delivers this Lease to Landlord the cash sums
set forth in the Schedule for both Prepaid Rent and Security Deposit
(collectively, the "Lease Deposit"). In addition to the Lease Deposit,
-------------
Tenant shall provide Landlord with a Guaranty of Lease in the form
attached hereto as Exhibit G, executed by Tenant's parent company,
---------
CMGI (the "CMGI Guaranty"), at the time Tenant delivers this Lease
(and the Lease Deposit) to Landlord. After Tenant becomes a public
company (i.e., its stock is traded on a nationally recognized stock
market, such as the NYSE or NASDAQ), Landlord agrees to return the
Security Deposit to Tenant and release CMGI from its obligations under
the CMGI Guaranty (and to return the same to Tenant), within fifteen
(15) days of Landlord's receipt of a Letter of Credit in the amount of
$2,388,660.00, provided that the Letter of Credit shall (i) be in the
form of an unconditional and irrevocable letter of credit which is
reasonably acceptable to Landlord, (ii) name Landlord as a
beneficiary, (iii) expressly allow Landlord to draw upon it (including
partial withdrawals) at any time from time to time by delivering to
the issuer and Tenant written certification that Landlord is entitled
to draw thereunder as a result of Tenant's default
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<PAGE>
hereunder (after expiration of any applicable notice, grace and cure
periods), (iv) be drawable on an FDIC-insured financial institution
satisfactory to Landlord, (v) be redeemable in the state of California
in one of the nine counties comprises the San Francisco-Oakland-San
Jose area (the "Bay Area"), (vi) allow partial draws, and (vii) be
transferable to any successor to Landlord's interest in this Lease at
no cost to Landlord, provided that only the first transfer of the
Letter of Credit by Landlord during the Term shall be at no cost to
Landlord. Landlord further agrees that if Tenant becomes a public
company and provides a Letter of Credit to Landlord which meets the
foregoing criteria, that the amount of the Letter of Credit shall be
reduced on the 12 month anniversary of the date of the issuance of
such Letter of Credit, and on each 12 month anniversary thereafter, by
the "Annual Reduction Amount" (as defined below), provided that Tenant
is not then in default in the performance of any of its obligations
(beyond any applicable notice, grace or cure period expressly provided
for herein). The "Annual Reduction Amount" shall be calculated as of
the date the Letter of Credit is issued and it shall be equal to the
initial amount of the Letter of Credit (i.e., $2,388,660) divided by
the number of 12 month periods remaining in the Lease Term (ignoring
any partial 12 month periods). For example, if the Letter of Credit is
issued when there are between 72 and 83 months remaining in the Lease
Term, then there would be 6 of the 12 month periods remaining in the
Lease Term and the Annual Reduction Amount would be $2,388,660/6 or
$398,110. Thus, in this example, assuming all of the other conditions
are satisfied, the amount of the Letter of Credit would be reduced by
$398,110 on each 12 month anniversary of the date on which the Letter
of Credit was issued. Notwithstanding the foregoing, if Tenant does
not provide Landlord with a substitute Letter of Credit complying with
all of the requirements hereof at least thirty (30) days before the
stated expiration date of the current Letter of Credit, then Landlord
shall have the right to draw upon the current Letter of Credit and
hold the funds drawn as part of the Security Deposit. In the event
Landlord notifies Tenant in writing that the bank which issued the
Letter of Credit has become financially unacceptable (e.g., the bank
is under investigation by governmental authorities, has filed
bankruptcy or reorganization proceedings, or has closed two or more of
its branches in the Bay Area), then Tenant shall have forty five (45)
days to provide Landlord with a substitute Letter of Credit complying
with all of the requirements hereof. During any period in which the
foregoing Letter of Credit is furnished, the cash portion of the
Security Deposit and the Letter of Credit shall be collectively
referred to herein as the "Security Deposit".
The Prepaid Rent shall be applied by Landlord against the
first full month's Base Rent payment obligation hereunder. The
Security Deposit shall be held by Landlord during the Term as security
for the performance of all of Tenant's obligations hereunder and any
remaining portion thereof shall be returned to Tenant at the end of
the Term in accordance with the terms of this Lease. If Tenant
defaults under this Lease (beyond the expiration of any
36
<PAGE>
applicable notice and cure periods), Landlord may apply all or any
part of the Security Deposit for the payment of any Rent or other sum
in default, the repair of any damage to the Premises caused by Tenant
or the payment of any other amount which Landlord may spend or become
obligated to spend by reason of Tenant's default or to compensate
Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default to the full extent permitted by law.
Landlord agrees to provide Tenant with written notice following
Landlord's application of any portion of the Security Deposit. Tenant
hereby waives any restriction on the use or application of the
Security Deposit by Landlord as set forth in California Civil Code
Section 1950.7. To the extent any portion of the Security Deposit is
used, Tenant shall within thirty (30) days after demand from Landlord
restore the deposit to its full amount. Landlord may keep the Security
Deposit in its general funds and shall not be required to pay interest
to Tenant on the deposit amount. If Tenant shall perform all of its
obligations under this Lease and return the Premises to Landlord at
the end of the Term in accordance with the terms of this Lease,
Landlord shall return all of the remaining Security Deposit to Tenant
within thirty (30) days after the end of the Term. The Security
Deposit shall not serve as an advance payment of Rent or a measure of
Landlord's damages for any default under this Lease.
If Landlord transfers its interest in the Project or this Lease,
Landlord shall transfer any remaining portion of the Security Deposit
(and, if applicable, the Letter of Credit) to its transferee and
provide Tenant with reasonable evidence of such transfer. Upon such
transfer, Landlord shall have no further obligation to return the
Security Deposit and the Letter of Credit to Tenant, and Tenant's
right to the return of the Security Deposit and Letter of Credit shall
apply solely against Landlord's transferee.
22. FORCE MAJEURE. Neither party shall not be in default under
-------------
this Lease to the extent they are unable to perform any of its
obligations on account of any prevention, delay, stoppage due to
strikes, lockouts, inclement weather, labor disputes, inability to
obtain labor, materials, fuels, energy or reasonable substitutes
therefor, governmental restrictions, regulations, controls, actions or
inaction, civil commotion, fire or other acts of God, national
emergency, or any other cause of any kind beyond the reasonable
control of such party (except financial inability) (collectively
"Force Majeure").
-------------
23. TENANT'S PERSONAL PROPERTY AND TRADE FIXTURES.
---------------------------------------------
Intentionally omitted.
24. NOTICES. All notices, consents, approvals and similar
-------
communications to be given by one party to the other under this Lease,
shall be given in writing, mailed or personally delivered as follows:
37
<PAGE>
A. Landlord. To Landlord as follows:
--------
CarrAmerica Realty Corporation
1810 Gateway Drive, Suite 150
San Mateo, California 94404
Attn: Market Officer
with a copy to:
CarrAmerica Realty Corporation
1850 K Street, N.W., Suite 500
Washington, D.C. 20006
Attn: Lease Administration
or to such other person at such other address as Landlord may designate by
notice to Tenant.
B. Tenant. To Tenant as follows:
------
NaviSite, Inc.
c/o: CMGI
100 Brickstone Square
Andover, MA 01810
Attn: William Williams, Esq.
For default notices only, also to:
Palmer & Dodge LLP
One Beacon Street
Boston, MA 02108
Attn: Thomas G. Schnorr, Esq.
or to such other person at such other address as Tenant may designate by
notice to Landlord.
Mailed notices shall be sent by United States certified or registered mail,
or by a reputable national overnight courier service, postage prepaid. Mailed
notices shall be deemed to have been given on the earlier of actual delivery or
three (3) business days after posting in the United States mail in the case of
registered or certified mail, and one business day in the case of overnight
courier.
25. QUIET POSSESSION. So long as Tenant shall perform all of its
----------------
obligations under this Lease, Tenant shall enjoy peaceful and quiet possession
of the Premises against any party claiming through the Landlord, subject to all
of the terms of this Lease.
38
<PAGE>
26. REAL ESTATE BROKER. Tenant represents to Landlord that Tenant has not
------------------
dealt with any real estate broker with respect to this Lease except for any
broker(s) listed in the Schedule, and no other broker is in any way entitled to
any broker's fee or other payment in connection with this Lease. Landlord
represents to Tenant that Landlord has not dealt with any real estate broker
with respect to this Lease except for any broker(s) listed in the Schedule, and
no other broker is in any way entitled to any broker's fee or other payment in
connection with this Lease. Each party shall indemnify and defend the other
party against any claims by any other broker or third party for any payment of
any kind in connection with this Lease to the extent that such claims arise out
of the idemnifying party's relationship with such other broker or third party.
27. MISCELLANEOUS.
--------------
A. Successors and Assigns. Subject to the limits on Tenant's
----------------------
assignment contained in Section 18, the provisions of this Lease shall be
binding upon and inure to the benefit of all successors and assigns of Landlord
and Tenant.
B. Date Payments Are Due. Except for payments to be made by Tenant
---------------------
under this Lease which are due upon demand or which are due in advance (such as
Base Rent), Tenant shall pay to Landlord any amount for which Landlord renders a
statement of account within ten (10) days of Tenant's receipt of Landlord's
statement.
C. Meaning of "Landlord," "Re-Entry," "including" and "Affiliate".
-------------------------------------------------------------
The term "Landlord" means only the owner of the Project and the lessor's
--------
interest in this Lease from time to time. The words "re-entry" and "re-enter"
are not restricted to their technical legal meaning. The words "including" and
similar words shall mean "without limitation." The word "affiliate" shall mean a
person or entity controlling, controlled by or under common control with the
applicable entity. "Control" shall mean the power directly or indirectly, by
-------
contract or otherwise, to direct the management and policies of the applicable
entity.
D. Time of the Essence. Time is of the essence of each provision of
-------------------
this Lease.
E. No Option. This document shall not be effective for any purpose
---------
until it has been executed and delivered by both parties; execution and delivery
by one party shall not create any option or other right in the other party.
F. Severability. The unenforceability of any provision of this
------------
Lease shall not affect any other provision.
G. Governing Law. This Lease shall be governed in all respects by
-------------
the laws of the state in which the Project is located, without regard to the
principles of conflicts of laws.
H. Lease Modification. Tenant agrees to modify this Lease in any
------------------
way requested by a mortgagee which does not cause increased expense to Tenant or
otherwise materially adversely affect Tenant's interests under this Lease.
39
<PAGE>
I. No Oral Modification. No modification of this Lease shall be
--------------------
effective unless it is a written modification signed by both parties.
J. Landlord's Right to Cure. If Landlord breaches any of its
------------------------
obligations under this Lease, Tenant shall notify Landlord in writing in the
manner described in Section 8.A, and shall take no action respecting such breach
so long as Landlord promptly (and in no event later than 30 days following
receipt of Tenant's notice) begins to cure the breach and diligently pursues
such cure to its completion. Landlord may cure any default by Tenant beyond the
expiration of any applicable notice, grace and cure periods; any expenses
incurred shall become Additional Rent due from Tenant on demand by Landlord.
K. Captions. The captions used in this Lease shall have no effect
--------
on the construction of this Lease.
L. Authority. Landlord and Tenant each represents to the other that
---------
it has full power and authority to execute and perform this Lease.
M. Landlord's Enforcement of Remedies. Landlord may enforce any of
----------------------------------
its remedies under this Lease either in its own name or through an agent.
N. Entire Agreement. This Lease, together with all Appendices,
----------------
constitutes the entire agreement between the parties. No representations or
agreements of any kind have been made by either party which are not contained in
this Lease.
O. Landlord's Title. Landlord's title shall always be paramount to
----------------
the interest of the Tenant, and nothing in this Lease shall empower Tenant to do
anything which might in any way impair Landlord's title.
P. Light and Air Rights. Landlord does not grant in this Lease any
--------------------
rights to light and air in connection with Project.
Q. Singular and Plural. Wherever appropriate in this Lease, a
-------------------
singular term shall be construed to mean the plural where necessary, and a
plural term the singular. For example, if at any time two parties shall
constitute Landlord or Tenant, then the relevant term shall refer to both
parties together.
R. No Recording by Tenant. Tenant shall not record in any public
----------------------
records any memorandum or any portion of this Lease.
S. Exclusivity. Landlord does not grant to Tenant in this Lease any
-----------
exclusive right except the right to occupy its Premises.
T. No Construction Against Drafting Party. The rule of construction
--------------------------------------
that ambiguities are resolved against the drafting party shall not apply to this
Lease.
40
<PAGE>
U. Survival. All obligations of Landlord and Tenant under this
--------
Lease shall survive the termination of this Lease.
V. Rent Not Based on Income. No Rent or other payment in respect of
------------------------
the Premises shall be based in any way upon net income or profits from the
Premises. Tenant may not enter into or permit any sublease or license or other
agreement in connection with the Premises which provides for a rental or other
payment based on net income or profit.
W. Building Manager and Service Providers. Landlord may perform any
--------------------------------------
of its obligations under this Lease through its employees or third parties hired
by the Landlord.
X. Late Charge and Interest on Late Payments. Without limiting the
-----------------------------------------
provisions of Section 13A, if Tenant fails to pay any installment of Rent or
other charge to be paid by Tenant pursuant to this Lease within ten (10)
business days after the same becomes due and payable, then Tenant shall pay a
late charge equal to the greater of five percent (5%) of the amount of such
payment or $250. In addition, interest shall be paid by Tenant to Landlord on
any late payments of Rent from the date due until paid at the rate provided in
Section 2D(2). Such late charge and interest shall constitute Additional Rent
due and payable by Tenant to Landlord upon the date of payment of the delinquent
payment referenced above.
Y. Tenant's Financial Statements. Within ten (10) days after
-----------------------------
Landlord's written request therefor, Tenant shall deliver to Landlord the
current financial statements of Tenant, and financial statements of the two (2)
years prior to the current financial statements year, with an opinion of a
certified public accountant, including a balance sheet and profit and loss
statement for the most recent prior year, all prepared in accordance with
generally accepted accounting principles consistently applied.
Z. Attorneys' Fees. In any arbitration, quasi-judicial or
---------------
administrative proceedings or any action in any court of competent jurisdiction,
brought by either party to enforce any covenant or any of such party's rights or
remedies under this covenant or any of such party's rights or remedies under
this Lease, including any action for declaratory relief, or any action to
collect any payments required under this Lease or to quiet title against the
other party, the prevailing party shall be entitled to the reasonable attorneys'
fees and all costs, expenses and disbursements in connection with such action,
including the costs of reasonable investigation, preparation and professional or
expert consultation, incurred by the prevailing party which sums may be included
in any judgment or decree entered in such action in favor of the prevailing
party. Whenever a party hereto is obligated to pay the attorneys' fees incurred
by another party, such obligation shall be limited to reasonable attorneys'
fees.
28. UNRELATED BUSINESS INCOME. If Landlord is advised by its counsel at
-------------------------
any time that any part of the payments by Tenant to Landlord under this Lease
may be characterized as unrelated business income under the United States
Internal Revenue Code and its regulations, then Tenant shall enter into any
reasonable amendment proposed by Landlord to avoid such income, so long as the
amendment does not require Tenant to make higher payments
41
<PAGE>
or accept fewer services from Landlord, than this Lease provides, or materially
and adversely affect Tenant's interest under this Lease.
29. HAZARDOUS SUBSTANCES.
---------------------
A. Prohibition Against Hazardous Substances. Tenant shall not cause
----------------------------------------
or permit any Hazardous Substances to be brought upon, produced, stored, used,
discharged or disposed of in or near the Project unless Landlord has consented
to such storage or use in its sole discretion. Landlord hereby consents to the
use and storage of (i) those Hazardous Substances which may be contained in the
fire suppression system utilized in connection with the Data Center, and (ii)
the diesel which shall be stored only in the diesel holding tanks and used
solely in connection with the operation of the backup generator for the Data
Center to be located outside the Building, (collectively, the "Approved
Hazardous Substances"), subject to the terms and conditions set forth herein.
Any handling, transportation, storage, treatment, disposal or use of any
Approved Hazardous Substances in or about the Project by Tenant, its agents,
employees, contractors or invitees shall strictly comply with all applicable
Governmental Requirements. Tenant shall obtain Landlord's prior written consent
before making any changes to the Approved Hazardous Substances. Tenant shall
indemnify, defend and hold Landlord harmless from and against any liabilities,
losses, claims, damages, penalties, fines, reasonable attorneys' fees and court
costs, reasonable remediation costs, reasonable investigation costs and any
other reasonable expenses which result from or arise out of the use, storage,
treatment, transportation, release, or disposal of any Hazardous Substances on
or about the Project by Tenant, its agents, employees, contractors or invitees.
If any lender or governmental agency shall require testing for Hazardous
Substances in the Premises, Tenant shall pay for such testing, provided that
such testing is required as a result of Tenant's (or its agent's, employee's,
contractor's or invitees') activities in or about the Premises.
B. "Hazardous Substances". means any hazardous or toxic
--------------------
substances, materials or waste which are or become regulated by any local
government authority, the state in which the Project is located or the United
States government, including those substances described in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq., the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6901 et seq., any other applicable federal, state or
local law, and the regulations adopted under these laws.
C. Prior Contamination. If Tenant can demonstrate to the reasonable
-------------------
satisfaction of Landlord that a release of Hazardous Substances occurred on the
Premises prior to the date on which Tenant took possession of the Premises and
that such release was not the result of the activities of Tenant or its
employees, agents, subtenants, licensees, contractors, subcontractors or
invitees ("Prior Contamination"), then Landlord agrees that it shall not seek to
recover from Tenant (either directly or as part of the Included Operating Costs)
any costs incurred by Landlord in connection with such Prior Contamination
(including any investigation, remediation and disposal costs associated
therewith).
42
<PAGE>
30. EXCULPATION. Landlord shall have no personal liability under this
-----------
Lease; its liability shall be limited to its interest in the Building and shall
not extend to any other property or assets of the Landlord. In no event shall
any officer, director, employee, agent, shareholder, partner, member or
beneficiary of Landlord be personally liable for any of Landlord's obligations
hereunder.
31. OPTION TO EXTEND. Subject to the terms and conditions set forth
----------------
below, Tenant may at its option extend the Term of this Lease for two (2)
successive periods of five (5) years each. Each such period is called a "Renewal
-------
Term". Each Renewal Term shall be upon the same terms contained in this Lease,
----
except that (i) Landlord shall have no obligation to provide Tenant with any
Tenant Improvement Allowance in connection with such Renewal Terms, (ii) the
Base Rent during the Renewal Term shall be calculated as set forth below, and
(iii) any reference in the Lease to the "Term" of the Lease shall be deemed to
include any Renewal Term and apply thereto, unless it is expressly provided
otherwise. Tenant shall have no additional extension options.
A. The Base Rent during a Renewal Term shall be the greater of (i)
the Base Rent applicable to the last month prior to the applicable Renewal Term,
or (ii) the Market Rate (defined hereinafter) for such space for a term
commencing on the first day of the Renewal Term. "Market Rate" shall mean the
-----------
then prevailing market rate for a comparable term commencing on the first day of
the Renewal Term for comparable space in the Building and other first class
office buildings of comparable age with similar projects in the vicinity of the
Building.
B. To exercise any option, Tenant must deliver a binding notice to
Landlord not sooner than twelve (12) months nor later than six (6) months prior
to the expiration of the initial Term of this Lease, or the then applicable
Renewal Term, as the case may be. Thereafter, the Market Rate for the particular
Renewal Term shall be calculated pursuant to Subsection C below and Landlord
shall inform Tenant of the Market Rate. Such calculations shall be final and
shall not be recalculated at the actual commencement of such Renewal Term.
Tenant agrees and acknowledges that Landlord, in its sole and absolute
discretion and as a condition precedent to Tenant's exercising of either of its
options to extend the Term, may require that Tenant deposit with Landlord a
letter of credit (in addition to the Letter of Credit provided under Section 21)
in an amount which is reasonably satisfactory to Landlord in its sole
discretion. However, Landlord shall not require an additional letter of credit
(and instead shall only require that Tenant deposit with Landlord cash in an
amount equal to the difference between the cash portion of the Security Deposit
then held by Landlord and the amount of Base Rent payable during the last month
of such Renewal Term) if both of the following are satisfied: (i) Tenant has not
been in material default in the performance of any of its obligations (beyond
any applicable notice, grace and cure period expressly provided hereunder) on
more than three (3) occassions during the original Term, and (ii) Landlord is
not required to provide any tenant improvements or allowances in connection with
Tenant's exercising of such extension option. If Tenant fails to timely give its
notice of exercise, Tenant will be deemed to have waived its option to extend.
C. Market Rate shall be determined as follows:
43
<PAGE>
(1) If Tenant provides Landlord with its binding notice of
exercise pursuant to Subsection B above, then prior to the commencement date of
such Renewal Term Landlord and Tenant shall commence negotiations to agree upon
the Market Rate. If Landlord and Tenant are unable to reach agreement within
twenty-one (21) days of Landlord's receipt of Tenant's notice of exercise, then
the Market Rate shall be determined in accordance with Section C(2) below.
(2) If Landlord and Tenant are unable to reach agreement on the
Market Rate within said twenty-one (21) day period, then within the next seven
(7) days, Landlord and Tenant shall each simultaneously submit to the other in a
sealed envelope its good faith estimate of the Market Rate. If the higher of
such estimates is not more than one hundred five percent (105%) of the lower,
then the Market Rate shall be the average of the two. Otherwise, the dispute
shall be resolved by arbitration in accordance with Section C(3) below.
(3) Within seven (7) days after the exchange of estimates, the
parties shall select as an arbitrator an independent MAI appraiser with at least
five (5) years of experience in appraising office space in the metropolitan area
in which the Project is located (a "Qualified Appraiser"). If the parties cannot
-------------------
agree on a Qualified Appraiser, then within a second period of seven (7) days,
each shall select a Qualified Appraiser and within ten (10) days thereafter the
two appointed Qualified Appraisers shall select a third Qualified Appraiser and
the third Qualified Appraiser shall be the sole arbitrator. If one party shall
fail to select a Qualified Appraiser within the second seven (7) day period,
then the Qualified Appraiser chosen by the other party shall be the sole
arbitrator.
D. Within twenty-one (21) days after submission of the matter to the
arbitrator, the arbitrator shall determine the Market Rate by choosing whichever
of the estimates submitted by Landlord and Tenant the arbitrator judges to be
more accurate. The arbitrator shall notify Landlord and Tenant of its decision,
which shall be final and binding. If the arbitrator believes that expert advice
would materially assist him, the arbitrator may retain one or more qualified
persons to provide expert advice. The fees of the arbitrator and the expenses of
the arbitration proceeding, including the fees of any expert witnesses retained
by the arbitrator, shall be paid by the party whose estimate is not selected.
Each party shall pay the fees of its respective counsel and the fees of any
witness called by that party.
E. Tenant's option to extend is personal to Tenant, is limited to
that portion of the Premises which Tenant occupies at the time such option is
exercised, and may not be exercised or assigned, voluntarily or involuntarily,
by or to any person or entity other than Tenant or a Permitted Transferee,
without Landlord's prior written consent, which Landlord may withhold in its
sole and absolute discretion. Tenant's option to extend this Lease is subject to
the conditions that: (i) on the date that Tenant delivers its binding notice
exercising an option to extend, Tenant is not in default under this Lease after
the expiration of any applicable notice, grace and cure periods which may be
provided herein, and (ii) Tenant shall not have assigned the Lease.
44
<PAGE>
32. Tenant's First Right to Negotiate Re Potential Expansion Space.
--------------------------------------------------------------
Landlord hereby informs Tenant that Landlord may have the right to expand the
size of the Building (or one or more of the other Project Buildings) by
approximately 20,000 rentable square feet (the "Potential Expansion Space").
Landlord hereby grants Tenant the first right to negotiate with Landlord as to
the Potential Expansion Space on the terms and conditions set forth in this
Section 32. Landlord shall not expand the size of any Project Buildings without
first notifying Tenant of its intent to do so ("Landlord's Expansion Notice").
At any time prior to Tenant's receipt of Landlord's Expansion Notice, Tenant may
notify Landlord of Tenant's interest in the Potential Expansion Space ("Tenant's
Expansion Notice") Upon Landlord's receipt of Tenant's Expansion Notice,
Landlord shall promptly prepare and deliver Landlord's Expansion Notice to
Tenant. Landlord's Expansion Notice shall be prepared in good faith and include
the material business terms and conditions upon which Landlord would process
such application, construct such Potential Expansion Space and lease such space
to Tenant. Tenant shall have five (5) days following its receipt of Landlord's
Expansion Notice to respond in writing to Landlord as to whether or not Tenant
is interested in seeking the necessary approvals from the City of San Jose for
the Potential Expansion Space on the terms set forth in Landlord's Expansion
Notice. Tenant's failure to respond within such five (5) day period shall be
deemed to be Tenant's election to pass on the Potential Expansion Space. If
Tenant notifies Landlord within such five (5) day period that it is interested
in such Potential Expansion Space, Landlord and Tenant shall process an
application for such Potential Expansion Space with the City of San Jose on the
terms and conditions which are contained in Landlord's Expansion Notice (or on
those terms and conditions that mutually acceptable to both parties at such
time). If the parties are unable to agree on such terms and conditions within
the thirty (30) day period immediately following Landlord's receipt of Tenant's
notice stating that Tenant is interested in the Potential Expansion Space, then
Tenant shall be deemed to have passed on the Potential Expansion Space and
Landlord shall be free to process an application to expand another Project
Building to utilize the Potential Expansion Space, unless Tenant elects, at its
sole cost and expense, to process such application (provided that Landlord's
approval of the applicable plans is obtained prior to the submission of any such
application), and assuming the necessary approvals are obtained and that such
approvals are reasonably acceptable to both Landlord and Tenant, construct such
Potential Expansion Space as an addition to the Building (subject to the
provisions of Section 5 hereof) and pay for all permits, licenses and fees
associated therewith. In the event Tenant elects to perform the construction of
the Potential Expansion Space as described in the preceding sentence, Landlord
agrees that (i) it shall cooperate (at no cost to Landlord), as may be necessary
as the owner of the Project, with the processing of such application, and (ii)
that during the initial Term of this Lease (but not during any extension period)
that Landlord would not charge any Base Rent for such Expansion Space; provided
that Tenant would be responsible for all utility costs and other Operating Costs
and Taxes relating to the Expansion Space. Upon completion of the construction
of such Expansion Space, Landlord and Tenant shall enter into an amendment of
this Lease to modify the description of the Premises and Tenant's Proportionate
Share hereunder to include the Expansion Space. Tenant agrees and acknowledges
that such Expansion Space improvements shall become Landlord's property upon
completion thereof and that all warranties obtained in connection with such
construction shall be assigned to Landlord upon receipt thereof by Tenant.
Tenant understands that any application submitted to the City of San Jose for
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<PAGE>
permission to construct the Potentail Expansion Space as an addition to the
Building, is subject to discretionary approval by the City of San Jose, and
Tenant agrees and acknowledges that Landlord shall have no liability to Tenant
whatsoever if the City of San Jose, and Tenant agrees and acknowledges that
Landlord shall have no liability to Tenant whatsoever if the City of San Jose:
(i) denies the application for such Potential Expansion Space, (ii) approves the
application but allows an expansion of less than 20,000 rentable square feet, or
(iii) approves the application but imposes conditions in connection therewith
which are unacceptable to Landlord or Tenant (e.g., allows the expansion but
requires Landlord to dedicate land or construct certain offsite improvements,
such as a new traffic signal, as a condition of such approval). Tenant's first
right of negotiation for the Potential Expansion Space is personal to Tenant and
may not be exercised or assigned (except pursuant to a Permitted Transfer),
voluntarily or involuntarily, by or to any person or entity other than Tenant or
a Permitted Transferee, without Landlord's prior written consent, which Landlord
may withhold in its sole and absolute discretion. Tenant may only exercise the
right granted in this Section 32 if: (i) on the date that Tenant delivers
Tenant's Expansion Notice to Landlord regarding its interest in the Potential
Expansion Space, Tenant is not in default under this Lease after the expiration
of any applicable notice, grace and cure periods which may be provided herein,
and (ii) Tenant shall not have assigned the Lease (except pursuant to a
Permitted Transfer).
33. Tenant's First Right to Negotiate Re Building 7 in Phase II. Landlord
-----------------------------------------------------------
hereby grants Tenant the first right to negotiate with Landlord on the 55,295
rentable square feet of space located in Building 7 in Phase II of the Project
(the "First Negotiation Space") on the following terms and conditions. When the
First Negotiation Space becomes available, Landlord shall deliver written notice
to Tenant informing Tenant of the availability of such space ("Landlord's First
Negotiation Space Notice"). Landlord's First Negotiation Space Notice shall
contain the material business terms (e.g. rent, term and lease deposit
requirements) on which Landlord would agree to Lease the First Negotiation Space
to Tenant. Tenant shall have five (5) days following its receipt of Landlord's
First Negotiation Space Notice to respond in writing to Landlord as to whether
or not Tenant is interested in leasing the First Negotiation Space on the terms
set forth in Landlord's First Negotiation Space Notice. Tenant's failure to
respond within such five (5) day period shall be deemed to be Tenant's election
to pass on the First Negotiation Space. If Tenant timely notifies Landlord in
writing of its desire to lease the First Negotiation Space on the terms set
forth in Landlord's First Negotiation Space Notice, then Landlord and Tenant
agree to execute an amendment to this Lease to incorporate the First Negotiation
Space and those terms set forth in Landlord's First Negotiation Space Notice (or
such other terms which may be agreed to by Landlord and Tenant at that time). In
the event Landlord and Tenant are unable to agree in writing on the terms for
the lease of the First Negotiation Space within the five (5) day period
following Tenant's receipt of Landlord's First Negotiation Space Notice (or in
the event Tenant passes on such space, or is deemed to have passed on such
space), then Landlord shall be free to market the First Negotiation Space to any
third parties without any liability to Tenant. Landlord and Tenant agree to
negotiate in good faith taking into consideration the rental rates of similar
projects in the geographic area of the Project (including the rent, operating
costs, and all other monetary payments that Landlord could obtain for the
Expansion Space from a third party desiring to lease such space). For purposes
of the foregoing, it should be
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assumed that the First Negotiation Space will be used for the highest and best
use allowed under the Lease. Tenant's first right of negotiation for the First
Negotiation Space is personal to Tenant and may not be exercised or assigned
(except pursuant to a Permitted Transfer), voluntarily or involuntarily, by or
to any person or entity other than Tenant or a Permitted Transferee, without
Landlord's prior written consent, which Landlord may withhold in its sole and
absolute discretion. Tenant may only exercise the right of first negotiation
granted in this Section 33 if: (i) on the date that Tenant delivers its notice
regarding its interest in the First Negotiation Space, Tenant is not in default
under this Lease after the expiration of any applicable notice, grace and cure
periods which may be provided herein, and (ii) Tenant shall not have assigned
the Lease (except pursuant to a Permitted Transfer).
IN WITNESS WHEREOF, the parties hereto have executed this Lease.
LANDLORD TENANT
CARRAMERICA REALTY
CORPORATION, a Maryland corporation NAVISITE, INC.,
a Delaware corporation
By: /s/ Philip L. Hawkins By: /s/ Kenneth W. Hale
-------------------------- ------------------------
Print Name: Philip L. Hawkins Print Name: Kenneth W. Hale
-------------------------- ------------------------
Print Title: Chief Operating Officer Print Title: CFO
-------------------------- ------------------------
Date: 5/25/99
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EXHIBIT A
PLAN OF THE PREMISES/PROJECT
<TABLE>
<CAPTION>
Phase I Phase II Total
------- -------- -----
<S> <C> <C> <C>
Site Area: 21.3 Acres 7.25 Acres 28.55 Acres
Parking: 1,155 Spaces 450 Spaces 1,605 Spaces
35 HC Spaces 9 HC Spaces 44 HC Spaces
------------ ----------- ------------
1,190 Total 459 Total 1,649 Spaces
Total Building Area: 350,000 sq ft 110,590 sq ft 460,590 sq ft
Area Coverage:
Building 37.7% 26.5%
Parking 34.3% 49.4%
Landscaping 28.0% 24.1%
FAR 35.0% 35.0%
</TABLE>
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EXHIBIT B
RULES AND REGULATIONS
1. Tenant shall not place anything, or allow anything to be placed
near the glass of any window, door, partition or wall which may, in Landlord's
reasonable judgment, appear unsightly from outside of the Project.
2. The Project directory, if any, shall be used by Landlord to display
names and locations of tenants in the Project. No tenant shall use or make any
changes to such directories without Landlord's prior written consent, which
consent shall not be unreasonably withheld or delayed.
3. The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by Tenant or used by Tenant for any purposes
other than for ingress to and egress from the Premises, unless Tenant is the
sole occupant of the Building. Tenant shall lend its full cooperation to keep
such areas free from all obstruction and in a clean and sightly condition and
shall move all supplies, furniture and equipment as soon as possible following
receipt directly to the Premises and move all such items and waste being taken
from the Premises (other than waste customarily removed by employees of the
Building) directly to the shipping platform at or about the time arranged for
removal therefrom. Tenant shall not permit its employees or invitees to access
the roof of the Building, except for those employees or contractors who must
access the roof to install, maintain or remove the Dish Equipment or to perform
other obligations under this Lease.
4. The toilet rooms, urinals, wash bowls and other apparatuses shall
not be used for any purposes other than that for which they were constructed,
and no foreign substance of any kind whatsoever shall be thrown therein, and to
the extent caused by Tenant or its employees or invitees, the expense of any
breakage, stoppage or damage resulting from the violation of this rule shall be
borne by Tenant.
5. Tenant shall not cause any unnecessary janitorial labor or services
by reason of Tenant's carelessness or indifference in the preservation of good
order and cleanliness.
6. Tenant shall not install or operate any refrigerating, heating or
air conditioning apparatus, or carry on any mechanical business without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed; use the Premises for housing, lodging or sleeping purposes;
or permit preparation or warming of food in the Premises (warming of coffee and
individual meals with employees and guests excepted). Tenant shall not occupy or
use the Premises or permit the Premises to be occupied or used for any purpose,
act or thing which is in violation of any Governmental Requirement or which may
be dangerous to persons or property.
7. Except for the Approved Hazardous Substances List, Tenant shall not
bring upon, use or keep in the Premises or the Project any kerosene, gasoline or
inflammable or combustible
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fluid or material, or any other articles deemed hazardous to persons or
property, or use any method of heating or air conditioning other than that
supplied by Landlord.
8. Landlord shall, in its reasonable discretion, direct electricians
as to where and how telephone and other wires are to be introduced. No boring or
cutting for wires is to be allowed without the consent of Landlord, which
consent shall not be unreasonably withheld or delayed. The location of
telephones, call boxes and other office equipment affixed to the Premises shall
be subject to the approval of Landlord, which consent shall not be unreasonably
withheld or delayed.
9. Upon termination of the lease, Tenant shall deliver to Landlord all
keys and passes for offices, rooms, parking lot and toilet rooms.
10. Tenant shall not install linoleum, tile, carpet or other floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except as approved by Landlord which consent shall not be unreasonably
withheld or delayed.
11. Without the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed, Tenant shall not use the name of the
Project or any picture of the Project in connection with, or in promoting or
advertising the business of, Tenant, except Tenant may use the address of the
Project as the address of its business.
12. Tenant assumes full responsibility for protecting the Premises
from theft, robbery and pilferage, which may arise from a cause other than
Landlord's negligence or willful misconduct, which includes keeping doors locked
and other means of entry to the Premises closed and secured.
13. Peddlers, solicitors and beggars shall be reported to the office
of the Project or as Landlord otherwise reasonably requests.
14. Tenant shall not advertise the business, profession or activities
of Tenant conducted in the Project in any manner which violates the letter or
spirit of any code of ethics adopted by any recognized association or
organization pertaining to such business, profession or activities.
15. No bicycle (except in those areas which may be designated for
bicycles by Landlord) or other vehicle and no animals or pets shall be allowed
in the Premises, halls, freight docks, or any other parts of the Building except
that blind persons may be accompanied by "seeing eye" dogs. Tenant shall not
make or permit any unreasonable noise, vibration or odor to emanate from the
Premises, or do anything therein tending to create, or maintain, a nuisance, or
do any act tending to injure the reputation of the Building or disturb the other
tenants in the Project.
16. Tenant shall not do or permit the manufacture, sale, purchase, use
or gift of any fermented, intoxicating or alcoholic beverages without obtaining
written consent of Landlord.
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17. Tenant shall not unreasonably disturb the quiet enjoyment of any
other tenant.
18. Following the lapsing of Tenant's extension rights under the
Lease, Landlord may place and keep on the exterior of the Building signs
advertising the Premises for Rent during the last six (6) months of the Term.
19. Except as may be contained in plans approved by Landlord, no
equipment, mechanical ventilators, awnings, special shades or other forms of
window covering shall be permitted either inside or outside the windows of the
Premises without the prior written consent of Landlord, which consent shall not
be unreasonably withheld or delayed, and then only at the expense and risk of
Tenant, and they shall be of such shape, color, material, quality, design and
make as may be approved by Landlord, which approval shall not be unreasonably
withheld or delayed.
20. Tenant shall not during the term of this Lease canvas or solicit
other tenants of the Building for any purpose.
21. Except as provided in Section 6.D of the Lease, Tenant shall not
install or operate any phonograph, musical or sound-producing instrument or
device, radio receiver or transmitter, TV receiver or transmitter, or similar
device in the Building or Project Common Areas, nor install or operate any
antenna, aerial, wires or other equipment inside or outside the Building, nor
operate any electrical device from which may emanate electrical waves which may
interfere with or impair radio or television broadcasting or reception from or
in the Building or elsewhere, without in each instance the prior written
approval of Landlord, which consent shall not be unreasonably withheld or
delayed. The use thereof, if permitted, shall be subject to control by Landlord
to the end that others shall not be unreasonably disturbed.
22. Tenant shall promptly remove all rubbish and waste from the
Premises.
23. Tenant shall not exhibit, sell or offer for sale, Rent or exchange
in the Premises or at the Project any article, thing or service, except those
ordinarily embraced within the use of the Premises specified in Section 6 of
this Lease, without the prior written consent of Landlord which consent shall
not be unreasonably withheld or delayed.
24. Tenant shall not overload any floors in the Premises or any public
corridors or elevators in the Building.
25. Tenant shall not do any painting on the exterior of the Building,
or mark, paint, cut or drill into, drive nails or screws into, or in any way
deface any part of the exterior of the Building or which is a structural
component of the Building, outside or inside, without the prior written consent
of Landlord, which consent shall not be unreasonably withheld or delayed.
26. Whenever Landlord's consent, approval or satisfaction is required
under these Rules, then unless otherwise stated, any such consent, approval or
satisfaction must be obtained in advance, such consent or approval may be
granted or withheld in Landlord's sole discretion, and Landlord's satisfaction
shall be determined in its sole judgment.
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27. Tenant and its employees shall cooperate in all fire drills
conducted by Landlord in the Building.
4
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EXHIBIT C
TENANT IMPROVEMENT AGREEMENT
This Tenant Improvement Agreement ("Agreement") is an integral part of the Lease
("Lease") relating to certain Premises described in the Lease. Capitalized terms
used in this Agreement not otherwise defined herein shall have the meaning given
such terms in the Lease. Landlord and Tenant agree as follows with respect to
the Tenant Improvements, if any, to be installed in the Premises:
1. INITIAL TENANT IMPROVEMENTS.
(a) Plans. Tenant shall cause to be performed the improvements
-----
(the "Tenant Improvements") in and about the Premises in accordance with plans
-------------------
and specifications prepared by Tenant and approved by Landlord (the "Plans"),
-----
which approvals shall not be unreasonably withheld. Tenant shall cause the Plans
to be prepared, at Tenant's cost, by a registered professional architect and
mechanical and electrical engineer(s). Such engineer(s) shall be approved, in
advance, by the Landlord. The Plans (including any changes thereto) shall be
prepared in accordance with Landlord's Tenant Improvements Guidelines attached
hereto as Exhibit C-1. Tenant shall furnish the initial draft of the Plans to
-----------
Landlord for Landlord's review and approval. After receipt of the initial Plans,
Landlord shall promptly either provide comments to such Plans or approve the
same. If Landlord provides Tenant with comments to the initial draft of the
Plans, Tenant shall provide revised Plans to Landlord incorporating Landlord's
comments within one week after receipt of Landlord's comments. Promptly
following Landlord's receipt of such revised Plans, Landlord shall either
provide comments to such revised Plans or approve such Plans. The process
described above shall be repeated, if necessary, until the Plans have been
finally approved by Landlord. Tenant hereby agrees that the Plans for the Tenant
Improvements shall comply with all applicable Governmental Requirements.
Landlord's approval of the Plans shall be solely for the purposes of authorizing
construction of the Tenant Improvements, and shall not be deemed to be an
approval of the technical merits of the Plans nor a verification that such
Tenant Improvements and/or the Plans comply with applicable Governmental
Requirements. Tenant shall be solely responsible for ensuring that the Tenant
Improvements are designed and constructed in accordance with all applicable
Governmental Requirements.
(b) Construction by Tenant. Tenant shall be solely responsible
----------------------
for the construction of the Tenant Improvements in and about the Premises.
Tenant shall construct the Tenant Improvements in accordance with the approved
Plans and in accordance with all rules, regulations, codes, statutes, ordinances
and laws of all government and quasi-governmental authorities and in a good and
workman-like manner. Landlord's sole obligation with respect to the Tenant
Improvements shall be to provide the Tenant Improvement Allowance (as described
below), and Landlord shall have no responsibility whatsoever for the
construction of the Tenant Improvements. The Tenant Improvements also shall be
constructed with new materials of good quality and with adequately trained and
supervised labor using currently approved methods of their particular trade.
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(c) Contractor. Prior to commencement of construction, Tenant
----------
shall select a general contractor which is reasonably acceptable to Landlord
("Contractor") to construct the Tenant Improvements. The Contractor shall be
licensed by the State of California and bondable. The construction contract
("Construction Contract") for the Tenant Improvements shall be between Tenant
(not Landlord) and Contractor.
(d) Construction Process. Tenant shall not commence the
--------------------
construction of any Tenant Improvements until after Landlord and Tenant have
agreed on the approved Plans and selection of the Contractor. Thereafter, Tenant
shall be responsible for completing the construction of the Tenant Improvements
in accordance with the approved Plans.
(e) Insurance. Prior to Contractor's entry onto the Premises to
---------
commence construction of the Tenant Improvements, Tenant shall furnish Landlord
with sufficient evidence that Tenant and Contractor are carrying worker's
compensation insurance and general liability insurance in amounts and in the
manner described in Section 9 of the Lease.
(f) Compliance. The Tenant Improvements and all materials
----------
incorporated therein shall comply with the approved Plans, as may be revised
from time to time pursuant to the terms of this Agreement, and shall be free
from all design, material and workmanship defects. Tenant and Contractor shall
comply with all applicable laws, regulations, permits and other approvals
applicable to construction of the Tenant Improvements.
(g) Liens. Tenant shall defend and indemnify Landlord and hold
-----
it harmless from any and all claims, losses, demands, judgments, settlements,
costs and expenses, including reasonable attorneys' fees, resulting from any act
or omission of Tenant or anyone claiming by, through, or under Tenant, in
connection with construction of the Tenant Improvements, for any mechanics' lien
or other lien filed against the Premises or the Building or against other
property of Landlord (whether or not the lien is valid or enforceable). Tenant
shall, at its own expense, (i) cause any such liens to be discharged of record,
or (ii) cause to be recorded a bond in compliance with CC Section 3143, within a
reasonable time, not to exceed thirty (30) days, after the later of (a) Tenant's
actual notice of the lien or (b) the date of filing.
(h) Indemnity. Tenant shall indemnify, defend (with counsel
---------
reasonably satisfactory to Landlord) and hold Landlord harmless from and against
any and all suits, claims, actions, loss, cost or expense (including claims for
workers' compensation, attorneys' fees and costs) based on personal injury or
property damage caused in, or contract claims (including, but not limited to
claims for breach of warranty) arising from, construction of the Tenant's
Improvements, except to the extent caused by Landlord's acts or omissions.
Tenant shall repair or replace any portion of the Building or item of Landlord's
equipment or any of Landlord's real or personal property damaged, lost or
destroyed in construction of the Tenant Improvements, except to the extent the
damage, loss or destruction is the result of Landlord's acts or omissions.
Notwithstanding the foregoing, in the event Tenant fails to complete such repair
or replacement work within ten (10) days following Tenant's receipt of
Landlord's written notice therefor (or if
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the nature of such work is such that more than ten (10) days is required, then
in the event Tenant fails to commence such work within such ten (10) days and
thereafter diligently prosecute such work to completion to the reasonable
satisfaction of Landlord), then Landlord may (but shall have no obligation to)
cause such work to be performed and/or completed at Tenant's sole cost and
expense.
(i) Management Fee. Tenant agrees and acknowledges that Tenant
--------------
shall pay Landlord a management fee ("Management Fee") in connection with
Landlord's review of the Plans and the construction of the Tenant Improvements.
The Management Fee shall be equal to three percent (3%) of the Tenant
Improvement costs; provided in no event shall such the amount of the Management
Fee paid to Landlord exceed Twenty-Nine Thousand Dollars ($29,000). Tenant
agrees that Landlord shall receive a prorata portion of the Management Fee with
each disbursement from the Tenant Improvement Allowance (i.e., three percent
(3%) of each invoice submitted by Tenant to Landlord for the Tenant Improvement
costs shall be paid to Landlord out of the Tenant Improvement Allowance as its
Management Fee up to the maximum Management Fee (i.e. Twenty-Nine Thousand
Dollars ($29,000)).
(j) Notices. Tenant shall notify Landlord at least ten (5)
-------
business days prior to the commencement of construction of any Tenant
Improvements and permit Landlord to post on the Premises such notices of
nonresponsibility, and such other notices to other tenants in the Project, as
Landlord may deem reasonable under the circumstances.
2. CHANGE ORDERS. Tenant shall not make any change to the approved
Plans without Landlord's prior approval, which approval shall not be
unreasonably withheld; provided, however, that Landlord may withhold its consent
if such requested change would affect the structural components or exterior
appearance of the Building. Landlord shall promptly approve or disapprove any
change requests following Landlord's receipt of a proposed change request. If
Landlord does not approve of the plans and specifications for the change order
request, Landlord shall advise Tenant of the revisions required. Tenant shall
revise and redeliver the plans and specifications to Landlord within five (5)
business days of Landlord's advice or Tenant shall be deemed to have abandoned
its request for such change order request. Tenant shall pay for all preparations
and revisions of plans and specifications, and the construction of all change
order requests, subject to Tenant Improvement Allowance. All approved change
order requests to the approved Plans shall be in writing and shall be signed by
both Landlord and Tenant prior to the change being made. Notwithstanding
Landlord's approval of any changes to the approved Plans, the dollar amount of
the Tenant Improvement Allowance shall not be increased.
2. TENANT IMPROVEMENT ALLOWANCE. Landlord shall contribute an amount
up to $1,327,000.00 ($20.00 per square foot) ("Tenant Improvement Allowance")
----------------------------
toward the costs incurred for the Tenant Improvements and Change Orders relating
to the construction of the Tenant Improvements, in accordance with and subject
to the following provisions. Not sooner than the date on which the Tenant
Improvements work within the Premises has been commenced, Tenant may submit
invoices to Landlord for payment out of the Tenant Improvement Allowance to
reimburse Tenant for Tenant Improvements costs incurred for work
3
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actually performed within or about the Premises. Following Landlord's receipt of
such invoices, Landlord shall within thirty (30) days thereafter pay Tenant for
the amount requested in such invoice; provided in no event shall Landlord be
obligated to pay Tenant more than the maximum amount of the Tenant Improvement
Allowance. Any expenses incurred by Tenant for the Tenant Improvement work in
excess of the Tenant Improvement Allowance shall be at Tenant's sole cost and
expense. Landlord shall have no obligation to disburse any portion of the Tenant
Improvement Allowance which has not be requested by Tenant pursuant to the terms
hereof on or before the sixtieth (60th) day after the Commencement Date, and any
portion of the Tenant Improvement Allowance still held by Landlord after such
date shall be deemed forfeited by Tenant and shall not be applied against
Tenant's other payment obligations under the Lease.
3. COMMENCEMENT DATE DELAY. Except as set forth in item 11 in the
Schedule to the Lease, the Commencement Date shall not be dependent upon the
completion or substantial completion of Tenant Improvements. Landlord agrees to
provide all approvals (or the reasons for not granting such approvals) to Tenant
within a reasonable time period which shall exceed five (5) business days of
Landlord's receipt of Tenant's written request therefor (provided that such
request is accompanied by all applicable documents, plans or other information
reasonably necessary for Landlord to render such decision), unless the nature of
such request is such that more time will be required to properly review such
request in which case Landlord shall inform Tenant of this fact during such five
(5) business day period (such as may be the case if Landlord has to engage a
structural engineer or other specialist to review Tenant's request). Landlord's
failure to provide its response within the foregoing time frame shall be deemed
a "Landlord Delay" for purposes of this Agreement. If Tenant fails (despite
Tenant's due diligence and best efforts) to substantially complete the Tenant
Improvements (i.e., the Tenant Improvements are sufficiently complete so that a
temporary certificate of occupancy can be issued) on or before the Commencement
Date, then Landlord agrees that the Commencement Date shall be delayed for each
day of such delay in the substantial completion of the Tenant Improvements which
Tenant can prove is solely attributable to Landlord Delay.
4. AS-BUILTS. Upon completion of construction of the Tenant
Improvements, Tenant shall deliver to Landlord "as-built" drawings for the
completed Tenant Improvements.
5. ACCESS BY TENANT PRIOR TO COMMENCEMENT OF TERM. Tenant and the
Contractor and their agents shall be allowed to enter the Premises prior to the
Commencement Date to construct the Tenant Improvements therein, conditioned upon
Tenant's:
(a) working in harmony with Landlord and Landlord's agents,
contractors, workmen, mechanics and suppliers and with other tenants and
occupants of the Project;
(b) complying with any other reasonable rules and regulations
which Landlord may impose in connection with the construction of the Tenant
Improvements.
6. MISCELLANEOUS. Terms used in this Exhibit C shall have the meanings
assigned to them in the Lease. The terms of this Exhibit C are subject to the
terms of the Lease
4
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and all of the covenants, obligations, promises, terms and conditions of
Landlord and Tenant which are contained in the Lease shall apply during the term
of this Agreement (notwithstanding the fact that the Commencement Date has yet
to occur).
5
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EXHIBIT C-1
TENANT IMPROVEMENT GUIDELINES
<TABLE>
<CAPTION>
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High Technology Workplace
Tenant Improvements Design Specifications
CarrAmerica
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Building Element Comments
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<S> <C>
1. General Tenant Improvements Specifications The following Tenant Improvement Design Specifications are applicable
to the review and approval of Tenant Improvement (TI) designs
submitted to Carr America by Tenants or prospective Tenants
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a. Application To be effective, these Tenant Improvement Design Specifications
should be reviewed with the Tenant and incorporated into the Lease.
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b. Review and approval Tenant Improvements drawings shall be reviewed at the end of TI
Schematic Design, and also when Final TI Construction Documents are
completed. Written comments are to be provided to the Tenant and to
the TI designer at each stage. CarrAmerica comments shall be
incorporated into the TI designs prior to the commencement of TI
construction. An approved set of TI Construction Documents will be
retained by CarrAmerica. Where "design-build" specifications are
used, CarrAmerica shall review and approve all design build plans and
specifications provided by the design-build contractor prior to
construction.
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c. Inspection and Acceptance TI specifications shall include a requirement that the Tenant and TI
Contractor cooperate with CarrAmerica in the review and acceptance of
the TI as follows:
1. TI construction will be reviewed by a CarrAmerica representative
at intervals appropriate to the course of the work and the size of
the TI project, preferably in the company of the TI designer.
2. When TI work is substantially complete, a CarrAmerica
representative will accompany the TI designer on a walk-through of
the work to ensure the completion of the TI work in accordance with
the approved designs.
3. CarrAmerica will receive a copy of a Certificate of Substantial
Completion provided by the TI designer, with correction list items
noted.
4. A CarrAmerica Representative will follow up with the Tenant on the
completion of correction list items.
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d. Project Record Drawing, warranties and instructions TI Plans and specifications will include a requirement that the TI
Contractor maintain a set of record drawings showing all changes made
to the design during the course of construction. A copy of the TI
Project Record Drawings will be delivered to CarrAmerica when TI work
is completed. Copies of warranties and instructions for all HVAC
equipment shall be delivered to CarrAmerica.
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</TABLE>
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<TABLE>
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<S> <C>
e. Code compliance Construction by Tenant must comply with all codes, ordinances and
regulations applying to the TI design and construction. The tenant
must provide a copy of the Certificate of Occupancy and/or inspection
sign-offs prior to occupying the TI's.
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f. Modifications to building shell and exterior Changes to the building shell and any exterior tenant improvements
(equipment pads, enclosures, etc.) are subject to CarrAmerica's
express written approval. Tenants are responsible for obtaining all
required public works, building and planning approvals for such
changes, copies of which shall be provided to CarrAmerica.
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2. Core Area Tenant Improvements
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a. General Core Area improvements by Tenants should comprehensively integrate
stairs, elevators and elevator equipment rooms, lobbies, restrooms,
shafts and other core elements to maximize the overall efficiency of
the buildings for current and future uses, to provide maximum
flexibility for future TI reconfigurations, and to support the
overall economic value of the building.
Shafts, stairs and other core elements should be consolidated as
much as possible.
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b. Efficiency Targets TI core designs should achieve a rentable-to-gross-area ratio of 96%
and, where applicable, a multi-tenant floor factor of 112%.
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c. Electrical closets Locate near exterior door. Minimize bus duct run to transformer.
Provide sufficient space for capacity expansion for manufacturing,
labs, clean rooms, and other common high-technology uses.
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d. Restrooms Core area restroom configurations should prevent direct sightline
access from lobbies, but should be readily accessible and easy to
find. The following specifications apply to the design of restrooms.
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i. Partitions Wall/floor mounted heavy-duty metal toilet partitions with honeycomb
core and factory baked enamel finish.
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ii. Fixtures Wall-mounted wc's with heavy-duty flushometer valves. Reinforced
saddles and heavy-duty flushometer valves for wall-mounted urinals.
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iii. Sinks and counters Bottom-set sinks in corian or equivalent countertops; provide 4"
backsplash where counters meet walls.
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iv. Faucets One sink nearest towel dispenser to provide "paddle" handicapped
accessible faucet handles. Other sinks to have spring-loaded
automatic-closing hot and cold water faucets.
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v. Accessories Fully recessed Bobrick stainless restroom accessories or equal.
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vi. Hose bibb and floor drain Provide a floor drain and hose bib with security handle at each
restroom mounted at 18" AFF.
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vii. Janitors closet Provide a janitor's closet integrated with the plan of each pair of restrooms to
include:
Mop sink with hot and cold water.
Sealed concrete floor.
Ceramic tile wainscot surrounding mopsink; all other walls 5/8" greenboard
with two coats of mildew-resistant semi-gloss plaint over one coat of primer.
Built-in storage.
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viii. Finishes and construction See Section 3 for additional specifications on restroom wall, floor and ceiling
construction and finishes.
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e. Corridors Corridors should provide for efficient traffic flow and long-term flexibility, and
should conform to the following specifications:
1. Walls, ceilings, flooring, and lighting as noted under general improvements
specifications in Section 3.
2. Provide cleaning outlets at maximum 20' o.c.
3. Corridors in or near loading and service areas should provide a fire-treated
5/8" finish-painted plywood wainscot below a 2x6 finished bump rail at 36"
AFF.
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f. Drinking fountains and coolers Locate close to lobby in a semi-recessed alcove; provide handicapped accessible
units where required by code.
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g. Elevators and elevator machine rooms
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i. Number and type Provide a minimum of one pre-engineered hydraulic elevator per two-story building.
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ii. Elevator lobby Minimum lobby clearance in front of elevator shall be 10 ft.; 12 ft. preferred.
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iii. Elevator pit Elevator pit should be treated with ironite or similar water-resistant barrier.
Provide a pit access ladder.
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iv. Cab Cab finishes should be very durable and easy to clean.
Cab should be equipped with a security phone and all code-mandated handicapped
access devices.
Provide at least one elevator with minimum 4'-0" door width and 8'-0" ceiling
height with heavy-duty back and side rails and pad hooks for furniture and
freight.
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v. Elevator shaft and equipment rooms Elevator shafts and equipment rooms shall be enclosed with full height walls, two
layers of 5/8" GWB mounted on acoustical clips each side with fiberglass batt
sound insulation in all walls, sealed acoustically at wall tops and bottoms.
The elevator equipment room should be located on ground floor for ease of
maintenance access. Elevator equipment room doors shall have sound seals. Provide
containment curb or tray around hydraulic pump assembly to control fluid leaks.
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h. Telephone equipment rooms Provide amble ventilation, and space for additional backboards and equipment
cabinets for a full range of telecommunications support services; locate telephone
equipment rooms near communications conduit building entry points, and near
exterior of building shell to simplify installation of future additional
ventilation/cooling.
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i. Loading, materials handling, and high 2x6 bump rails, 4'-0" high 5/8" fire-treated plywood wainscot, and
traffic areas 12 ga corner guards to 48" AFF on all outside corners in loading
and materials handling areas.
Heavy-duty full-welded door frames (no knock-down frames), heavy-
duty hinges, and 24" high kick plates on all doors in loading,
materials handling and high traffic areas.
Door frames shall be secured to 16 ga. jamb studs which are
continuous from floor to floor.
See Section III for wall, floor and ceiling construction and
finishes.
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3. General Specifications, Interior Improvements
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a. Flooring and base, general Carpet is the preferred floor finish in offices and corridors.
Other finishes will be considered.
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i. Lobby floors Lobby floors: Daltile glazed pavers 8" x 8" or equal or better.
Upgraded stone products, if selected, should be selected for
durability and ease of maintenance as well as appearance.
Wood floors in lobbies are discouraged.
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ii. Restroom floors and base Thinset, dryset ceramic tile floor and 4" base throughout
restrooms: 2" square Daltile, price Code 3 or equal or better, all
installed with moisture barrier or Laticrete, and installed to meet
Ceramic Tile Institute specifications.
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iii. Carpet and base Minimum 32 oz. looped pile direct glue down. Base Armstrong or
Burke.
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iv. Sheet vinyl Armstrong Classic Corlon, or equal or better.
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v. Vinyl composition tile Vinyl Composition Tile (VCT) where installed: Armstrong Premium
Excelon or equal or better.
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vi. Exposed concrete floors Any exposed concrete floors shall receive a sealer.
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vii. Transition strips Provide hardwood or stone transition strips between tile and
adjacent flooring materials.
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b. Wall construction and finishes, general General: All walls to be constructed from 5/8" GWB over 3 5/8" 25
ga metal studs at 16" oc. Metal studs shall extend to structure
above as necessary to prevent lateral deformation of wall. Walls
shall not depend on ceiling grid for stiffness. All GWB shall be
finished to USG standards or better.
Except where noted below, walls shall be skip-trowelled and
textured with minimum one prime and two finish coats of flat
latex paint.
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i. Lobby walls Lobbies: consider upgrading lobby wall finishes to tile, stone, or
other superior and durable material.
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ii. Restroom walls Restrooms: All wet areas shall receive full-height 4" square semi-
gloss finish Daltile, Price Group 3 or equal or better. Other
restrooms walls shall receive vinyl wallcovering or two coats of
mildew-resistant latex paint over one coat of primer.
All restrooms walls shall receive 5/8" greenboard in lieu of
standard GWB.
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iii. Loading, materials handling, and high traffic 5/8" GWB on 16ga metal studs at 16" oc.; walls shall extend to
area walls structure above. walls Loading areas may be fire taped only. See
additional requirements under Section 2.i.
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iv. Exposed columns All exposed columns shall be cleaned, primed, and receive two coats
of semi-gloss enamel.
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c. Ceilings, general: Ceiling shall be 2'-0" x 2' x 0" suspension system by Armstrong with
24" x 24" x 5/8" "Cortega" tegular edge ceiling panels, or equal or
better, except where noted below. Monolithic ceiling grids in all
office and lab areas are required.
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i. Lobby ceilings Lobby ceilings: 5/8" GWB on 20 ga metal studs at 12" o.c. at minimum
12 ft. AFF; one prime and two finish coats flat latex. Architectural
expression in lobby ceilings is encouraged.
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ii. Restroom ceilings Restroom ceilings: 5/8" GWB on 20 ga metal studs at 12" o.c. at
minimum 9'-0" AFF w/two coats mildew-resistant semi-gloss latex over
one coat primer.
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iii. Loading and service areas Loading and service areas: space may be open to structure above if
desired.
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iv. Open ceilings in offices Where ceilings in offices are left open to structure for design
reasons, entire underside of structure shall be cleaned and painted
with two coats of semi-gloss latex over one coat primer.
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d. Lighting, general: 2' x 4' three-tube high-efficiency flourescent fixtures with
electronic ballasts and 18-cell parabolic lenses, except where noted
below; use compact flourescent downlights where accent lighting is
desired.
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i. Lobby lighting Maximize use of compact flourescent downlights where light fixtures
are visible. Consider use of indirect lighting and architectural
lighting to enhance appearance of lobbies.
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ii. Restroom lighting Above counters and sinks: 12" x 4'12" x 8' two-tube flourescents with
eggcrate grilles. Provide recessed compact flourescent downlights
elsewhere in restrooms.
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iii. Loading, materials handling, and high-traffic Chain-hung industrial fixtures where open ceilings are permitted,
areas otherwise apply general specification.
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iv. f. Window coverings Exterior windows to receive 1" horizontal mini-blinds by Levolor or
equal, color selected by building shell designer. Interior windows,
where desired, to receive 1" horizontal mini-blinds by Levolor or
equal, color selected by TI designer.
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g. Interior cabinets and millwork All interior cabinets, countertops and other millwork shall be
finished with plastic laminate, or equal or better. Where upgraded
millwork in wood, stone or other materials is desired, materials and
finishes shall conform to the highest industry standards.
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d. Doors, frames and hardware
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1. Doors 3'-0" x 9'x0" x 1-3/4" solid core wood with paint grade wood veneer
finish.
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2. Frames Anodized or baked enamel frames with mitered and welded corners (no
knockdown frames).
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3. Locksets and latchsets Heavy duty commercial Schlage "D" series or equal latchsets and
locksets with Schlage "Sparta" satin chromium lever style handles, or
equal or better. Doors in lobby areas, major conference rooms and
other public areas shall have Heavy Duty mortise type Schlage "L"
series latchsets and locksets with satin chromium Schlage "03" or
"17" style lever handles, or equal or better.
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4. Hinges Heavy duty ball-bearing hinges to match hardware.
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4. Heating, Ventilating and Air Conditioning Systems
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a. General Description Tenant shall design and install a complete variable air volume (VAV)
heating, ventilating and air conditioning (HVAC) system in accordance
with the following design specifications for all office, core area
and general use areas. Where tenant requires specialized HVAC designs
to support specialized manufacturing, labs or other uses, tenant
shall provide design criteria and performance specifications for the
systems with the schematic design submittal.
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b. General specifications standards All TI designs and installations shall conform to the latest
applicable editions of the following standards:
AMCA - Air Movement and Control Association
ANSI - American National Standards Institute
ARI - American Refrigeration Institute
ASTM - American Society for Testing and Materials
ASHRAE - American Society of Heating, Refrigeration and Air
Conditioning Engineers
ASME - American Society of Mechanical Engineers
AABC - Associated Air Balance Council
SMACNA - Sheet Metal and Air Conditioning Contractors National
Association
All applicable Plumbing, Mechanical, Electrical and Building Codes
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c. Review, approval, inspection, acceptance, and In additional to those submittals and procedures identified in
record drawings. Section 1.b., c., and d. above, the Tenant shall provide the
following:
1. One complete set of detailed operating and maintenance
instructions and spare parts list
2. Domestic water chlorinating certificates
3. One complete set of warranties and guarantees
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d. Air balancing Final air balancing and report shall be contracted and furnished by
CarrAmerica at tenant's expense.
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e. HVAC Design Capacities The systems shall be designed to provide for a minimum of 350 gsf/ton
of capacity. 300 gsf/ton is preferred. Higher capacities may be
applicable to specialized applications where identified by the
Tenant.
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f. Materials and Equipment Furnish and install McQuay RoofPak Singlezone Heating and Cooling Units Model
RDT or equal or better, specifically designed for rooftop applications.
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i. Cabinet insulation Each unit cabinet shall be fully insulated with min. 1", 3/4 lb. neoprene
coated glass fiber.
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ii. Cabinet finishes Phosphatized baked enamel meeting ASTM B117 for salt-spray resistance.
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iii. Access doors 17 ga. galv. steel with staggered engagement latches.
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iv. Frame and base 8 ga. and 13 ga. (900B) galvanized steel, Formed recess in base shall seat on
gasketed roof curb.
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v. Return air plenum Units shall include a 100% return air plenum allowing air to enter from the
bottom or back of the unit.
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vi. Outside air hood Units shall include a 100% outside air hood and draw-through filter section.
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vii. Dampers Units shall include McQuay UltraSeal low-leak dampers with two position actuator,
including outside air economizer damper with 0-100% capacity, of modulating
spring return type with adjustable comparative enthalpy control.
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viii. Draw-through filter section Units shall include an integrated filter rack and 12" American Air Filter Varical
Stnd 900, Class 1 filters.
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ix. Fan Assemblies All fans shall be statically, dynamically balanced at the factory, and include
200,000 hr. greasable ball bearings,and shall be mounted on rubber-in-shear or
spring isolators with seismic restraints.
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x. Fan Motors All fan motors shall be heavy duty 1800 rpm with adjustable belt tension and 150%
service factor.
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xi. Variable Frequency Drives Variable Frequency Drive Inverters with bypass contactors shall be provided for
supply and return fans.
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xii. Cooling coils .0060" copper tubes w/HI-F rippled and corrugated fins, interlaced two-circuit,
multi-row design, five rows, 12 fins/inch; include stainless steel positively
sloped drip pan with drain connector extending through unit base.
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xiii. Smoke detectors Ionization type in supply and return air openings.
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xiv. Condensing section Heavy duty Copeland Discus reciprocating semi-hermetic compressors on resilient
isolators. Multi-row 3/8" o.d. high-efficiency rifled copper condenser coils.
Heavy duty direct-drive condenser fan/motor assemblies with stainless steel blades
and three-phase non-reversing motors; each refrigeration circuit shall include
sight glass, filter drier, and 15 degree liquid subcooling circuit.
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xv. Refrigeration control Two refrigeration circuits per unit, including liquid line solenoid valve, oil
pressure switch, high pressure switch, low pressure switch, compressor control
circuit switch, and pumpdown switch. A McQuay Speedtrol fan speed control shall
provide for refrigeration circuit operation at ambient temperatures down to 20
degrees.
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xvi. Microprocessor Control System Each unit shall have a complete McQuay Microtech 800/802c Microprocessor Control
System or equal, including temperature and pressure sensors, input/output board,
main processor board, displays, keyboards, and staging boards as required, all
factory mounted and tested, including the following features:
1. A stand alone DDC controller
2. LED complete system status board
3. Optically isolated input/output design
4. Surge protection
5. RS 232 port PC connection
6. Built-in programmable time schedule with non-volatile memory
7. Time schedule readable from Network Master Panel or Remote Monitoring Panel
8. Space sensors for constant volume or VAV applications
9. Input/Output functions and user interactions equal to or better than McQuay
Microtech software
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xvii. Gas heater Stainless steel primary combustion chamber, headers, primary and secondary tubes.
section Modulating forced draft natural gas burners with pre-purge timing, flame
supervision, combustion air proving switch, and spark ignition. Gas train shall
include redundant shutoff valves, pressure regulator, shutoff cock, pilot gas
valve, pilot pressure regulator, and pilot shutoff cock.
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xviii. Other required 48" blank access sections at draw-through and blow-through locations. Fused
features disconnect switch for each unit. Service lights at supply and return section with
switch and 20A 110v outlet. Phase failure protection. Ground fault protection.
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g. Roof curbs Insulated pre-manufactured one-piece 12ga stainless steel custom-built roof
curbs. Curbs shall:
1. Provide for complete perimeter support of the unit.
2. Be custom made for the roof slope, and shall provide level installation of
the unit without shims or other means of leveling the unit.
3. Include integral crickets and curb-top drips.
4. Include gaskets for weatherproof joint between curb and unit.
5. Provide for minimum of 12" separation between unit frame and roof.
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h. Air distribution
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i. Sound attenuators Provide sound attenuators to IAC recommendations
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ii. Ducts, general Spiral wound or oval galvanized sheet metal ducts to meet SMACNA standards using
companion-flanged joints with gaskets. Weld all medium pressure fittings. Where
necessary use rectangular sheet metal ducts with following SMACNA guage/pressure
recommendations.
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iii. Splitter dampers Not permitted.
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iv. Flex duct and connections: Ducts upstream of VAV units shall be hard-piped; downstream of VAV units
shall be acoustical alumaflex 6'-0" maximum length.
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v. Fire and smoke dampers 100% free area, UL listed with clearly marked door access to fusible links.
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vi. Ductwork joint tape "Hardcast"
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vii. Insulated duct All ducts located in non-conditioned spaces shall be insulated and shall be
wrapped with a vapor barrier.
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viii. Diffusers, registers and grilles Neck velocities maximum 600 fpm. Outlet duct to terminals sized to 500 cfm
maximum. Supply diffusers in ceilings shall be perforated face with
adjustable cores. Return grilles shall be hex code face. Locate dampers well
away from diffusers to minimize noise. Linear and other architectural
diffusers shall be used in lobby ceilings and other public spaces.
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5. Plumbing
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a. Codes and regulations Comply with the National Plumbing Code, and all applicable local codes and
regulations. Where in conflict, the code requiring the higher-quality or more
complete installation shall govern.
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b. Piping Use black iron or copper pipe where applicable. PVC or ABS pipe is not
permitted, even if allowed by code.
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c. Labs and hazardous materials areas In labs or other facilities where hazardous materials are used, provide
CarrAmerica with copies of approved OSHA and EPA disposal procedures. Use of
sanitary waste lines for disposal is not permitted.
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d. Plumbing hardware All restroom and other core area plumbing hardware shall be Kohler or equal
or better. All toilets and urinals shall have automatic shut-off valves.
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e. Plumbing fixtures All restroom and other core area plumbing fixtures shall be as follows:
Water closet: American Standard Afwall Wall Mounted Toilet #2477.016
Urinal: American Standard Wall Allbrook Wall Mounted Urinal #6541.132
Lavatory: American Standard Ovalyn Under Counter Lavatory #0470.039
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f. Cleanouts Provide cleanouts at a maximum of 30'-0" o.c. in all waste lines.
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g. Pipe compound Use Teflon pipe dope only. Lead solder is not permitted.
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6. Electrical
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a. Codes and regulations Comply with the latest edition of the National Electric Code, and all other
applicable codes and regulations. Where in conflict, the code requiring the
higher-quality or more complete installation shall govern.
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b. Conductors, conduit, fittings All conductors shall be copper. No aluminum conductors are permitted, even if
allowed by code. All conductors shall be in rigid steel conduit or Electrical
Metallic Tubing (EMT) where permitted by code. All boxes and fittings shall
be galvanized steel. No plastic boxes or fittings are permitted, even if
allowed by code.
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c. Light fixture ballasts All flourescent light fixtures shall have electronic T-8 ballasts. No
ballasts containing PCB's are permitted.
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7. Fire protection
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a. Codes and regulations All fire sprinkler installations shall comply with NFPA13, with Factory
Mutual (FM) requirements, and with all other applicable local codes and
regulations.
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b. Drawings and calculations Prior to installation of fire sprinklers, provide CarrAmerica with complete
sets of sprinkler shop drawings, including calculations, for review by
CarrAmerica's FM representative. Do not proceed with installation without FM
approval.
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c. Sprinkler heads Lobbies: Concealed heads with cover plates painted to match ceiling.
Offices: Flush chrome heads, or semi-recessed with two-piece escutcheons to
match ceiling. Open ceilings where permitted: Exposed heads.
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d. Fire alarm systems Tenant-installed fire alarm systems shall have automatic dailers to call in
to a central station monitor.
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8. Fixtures, furnishings and equipment Provide high-quality durable lobby furnishings planters and entrance mats in
lobby spaces compatible with the lobby architectural design. Multiple-
building TI projects should provide a consistent approach to fixtures and
furnishing in all lobbies.
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EXHIBIT D
MORTGAGES CURRENTLY AFFECTING THE PROJECT
[To be determined prior to Execution]
1
<PAGE>
EXHIBIT E
LANDLORD'S SIGNAGE STANDARDS
Attached you will find the signage standards for the following sign type:
Exterior (Permanent) Page #
Entrance Identification 1
Primary Directional 2
Secondary Directional 3
Primary Tenant Identification 4
Building Address 5
Building Entry Logo Application 6
Driveway Entrance/Welcome 7
Miscellaneous 8
Exterior (Temporary)
Site/Leasing Sign 9
Interior (Permanent)
Elevator (Corporate Identification) 10
Directory Identification 11
Room Identification 12
Tenant Plaque 13
Suite Identification 14
Suite Directional 15
Reception Area Sign 16
[Diagrams relating to Signage standards]
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EXHIBIT G
GUARANTY
FOR VALUE RECEIVED, and as an inducement to CarrAmerica Realty Corporation
("Landlord") to enter into a certain lease dated as of April 30, 1999, as it may
hereafter be further amended, the "Lease") with NaviSite, Inc., a Delaware
corporation Tenant"), the undersigned ("Guarantor"), CMGI, a Delaware
corporation, whose address is 100 Brickstone Square, Andover, MA 01810,
unconditionally and irrevocably undertakes and guarantees to Landlord, its
successors and assigns, the payment and performance of all obligations of Tenant
under the Lease (the "Liabilities"), including the full payment, when due, of
all rent, including without limitation, Base Rent, Operating Cost Share Rent,
Tax Share Rent and Additional Rent. This Guaranty is absolute, independent and
continuing under all circumstances, and is a guaranty of payment and
performance, not of collection, subject to termination in accordance with
Section 5(i) below.
1. REPRESENTATIONS. Guarantor hereby represents and warrants to Landlord
that:
(a) the financial statements of Guarantor furnished to Landlord in
connection with this Guaranty (i) are true and correct in all material respects,
(ii) have been prepared in accordance with generally accepted accounting
principles consistently applied, and (iii) present fairly the financial
condition of Guarantor as of the respective dates thereof, and that no material
adverse change has occurred in the financial condition of Guarantor since such
dates;
(b) Guarantor has no knowledge of any material fact concerning Tenant
or its financial condition which has not been disclosed to Landlord and might
adversely affect Landlord's decision to enter into the Lease;
(c) Guarantor is not in default under any agreement, the effect of
which could materially adversely affect performance of its obligations under
this Guaranty; and
(d) There are no actions, suits or proceedings pending or, to the best
of its knowledge, threatened against the Guarantor before any court or any other
governmental authority of any kind which could materially adversely affect
performance of its obligations under this Guaranty.
2. WAIVERS. Guarantor hereby expressly waives, to the maximum extent
permitted by law, all defenses available to a guarantor or surety, whether the
waiver is specifically herein enumerated or not, including, without limitation,
the following:
(a) any notice of nonpayment, nonperformance or nonobservance, or
proof of notice or demand and all other notices and demands otherwise required
by law which the undersigned may lawfully waive;
(b) all diligence in collection of any of the Liabilities or any
obligation hereunder;
(c) the benefit of all appraisement, valuation, marshalling,
forbearance, stay,
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extension, redemption, homestead, exemption and moratorium laws now or hereafter
in effect;
(d) any rights against Tenant arising because of Guarantor's payment
of any Liabilities, by way of subrogation of the rights of Landlord or
otherwise;
(e) any obligation Landlord may have to disclose to Guarantor any
facts Landlord now or hereafter may know or have reasonably available to it
regarding Tenant or its financial condition;
(f) all defenses of suretyship;
(g) any defense based on the negligence of Landlord in administering
the Lease, or taking or failing to take any action in connection therewith;
(h) any statute of limitations affecting the enforcement of this
Guaranty of Lease; and
(i) any right of set-off or compensation against amounts due under
this Guaranty of Lease.
3. COVENANTS AND AGREEMENTS. Subject to Section 5(i) below, Guarantor
covenants and agrees that:
(a) in the event of a default by Tenant under the Lease, Landlord may
proceed against Guarantor before, after or simultaneously with proceeding
against Tenant;
(b) this Guaranty shall be absolute and unconditional and shall not be
terminated, affected or impaired in any manner by reason of: (i) Landlord's
assertion against Tenant of any of the rights or remedies reserved to Landlord
under the Lease; (ii) the release of Tenant from any of the Liabilities by
operation of law or otherwise; (iii) the commencement of summary or other
proceedings against Tenant; (iv) Landlord's failure to enforce any of its rights
against Tenant; (v) the granting by Landlord of any extensions of time to
Tenant; (vi) any amendment, addition, assignment, sublease, transfer, renewal,
extension or other modification of the Lease, whether or not Guarantor shall
have knowledge or have been notified of or agreed or consented thereto; (vii)
the cessation of Tenant's liability for any cause whatsoever; or (viii) any
disability or defense of any kind now existing of Guarantor with respect to any
provision of this Guaranty;
(c) Guarantor shall be bound by all the provisions, terms, conditions,
restrictions and limitations contained in the Lease which are to be observed or
performed by Tenant thereunder, the same as if Guarantor were named as the
tenant therein;
(d) Guarantor shall not sell, lease, transfer, convey or assign any of
its assets if such action will have a material adverse effect on Guarantor's
business or financial condition.
(e) If at any time any part of any payment previously applied by
Landlord to
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any of the Liabilities is rescinded or returned by Landlord for any reason,
including the insolvency, bankruptcy or reorganization of Tenant, such
Liabilities shall be deemed to have continued in existence to the extent that
such payment is rescinded or returned, and this Guaranty shall be reinstated as
to such Liabilities;
(f) Guarantor hereby subordinates, and shall cause any entity which
Guarantor directly or indirectly controls to subordinate, any claims or liens of
Guarantor or such affiliate against Tenant of any kind to all of the
Liabilities; and
(g) If the Lease is disaffirmed by a Trustee in Bankruptcy for Tenant,
Guarantor shall, at the election of Landlord, either assume the Lease and
perform all of the covenants, terms and conditions of Tenant thereunder, or
enter into a new lease for the remaining Term, which said new lease shall be in
form and substance identical to the Lease.
4. MISCELLANEOUS.
(a) Landlord's failure to insist in any one or more instances upon
strict performance or observance of any of the terms of the Lease or to exercise
any rights therein shall not be construed to be a waiver for the future of such
term or right but the same shall remain in full force and effect.
(b) If Landlord takes action to enforce this Guaranty, Guarantor shall
pay to Landlord upon demand all costs, including reasonable attorneys' fees,
incurred by Landlord in connection therewith, together with interest thereon
computed at the rate of 12% per annum from the date paid by Landlord until the
date repaid in full.
(c) All of Guarantor's obligations hereunder shall be binding upon
Guarantor's successors and assigns. For purposes of this Guaranty, the word
"Tenant" shall also include the successors and assigns of Tenant. Each immediate
and successive assignee or transferee of any interest in any of the Liabilities
and this Guaranty shall, to the extent of such interest, be entitled to the
benefits of this Guaranty.
(d) This Guaranty shall be construed in accordance with the laws of
the State of California. Guarantor irrevocably (i) agrees that any suit, action
or other legal proceeding relating to this Guaranty may be brought only in the
Superior Court of Santa Clara County or in the State Court of California, at
Landlord's option; (ii) consents to the jurisdiction of each such court in any
such suit, action or proceeding; (iii) waives any objection which Guarantor may
have to the laying of venue in any such suit, action or proceeding in either
such court; and (iv) agrees to join Landlord in any petition for removal to
either such court. Guarantor hereby irrevocably appoints _______________________
its authorized agent ("Agent") in the State of California to accept on its
behalf service of process for purposes of any such suit, action or proceeding.
Landlord may obtain personal jurisdiction and perfect service of process through
the Agent or by any other means now or hereafter permitted by applicable law.
(e) GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHTS THAT GUARANTOR MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING
IN ANY WAY IN CONNECTION WITH THIS GUARANTY, OR ANY OTHER STATEMENTS OR
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ACTIONS OF LANDLORD. GUARANTOR ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT FOR LANDLORD TO ENTER INTO THE LEASE.
(f) The undersigned agrees to execute and deliver to Landlord, from
time to time, upon five (5) days notice from Landlord, a certificate addressed
to Landlord, any mortgagee or prospective mortgagee, or any prospective
purchaser, certifying (i) that this Guaranty of Lease is unmodified and in full
force and effect and (ii) to such other matters as Landlord may reasonably
request. The undersigned further agrees that upon request by Landlord from time
to time, the undersigned shall furnish Landlord, within five (5) days of receipt
of such request, with a copy of the undersigned's financial statements, in form
and substance reasonably satisfactory to Landlord, reflecting the undersigned's
current financial condition. The undersigned represents and warrants that all
financial statements, records and information furnished by the undersigned to
Landlord in connection with this Guaranty of Lease are true, correct and
complete in all respects.
(g) If any provision of this Guaranty of Lease or the application
thereof to any person or circumstance shall, for any reason and to any extent,
be invalid or unenforceable, the remainder of this Guaranty of Lease and the
application of that provision to other provisions or circumstances shall not be
affected but rather shall be enforced to the fullest extent permitted by law.
(h) All capitalized terms used in this Guaranty shall have the same
meanings as are given to such terms in the Lease, unless otherwise specifically
defined in this Guaranty.
(i) Within fifteen (15) days of the later of (a) Landlord?s receipt of
evidence reasonably satisfactory to Landlord that Tenant has become a public
company (i.e., its stock is traded on a nationally recognized stock market, such
as the NYSE or NASDAQ), and (b) Landlord receipt of a Letter of Credit (meeting
the requirements set forth below) in the amount of $2,388,660.00, Landlord
agrees that it shall deliver this Guaranty to Tenant and that this Guaranty (and
Guarantor?s obligations hereunder) shall terminate upon Tenant?s receipt
thereof. The Letter of Credit shall (i) be in the form of an unconditional and
irrevocable letter of credit which is reasonably acceptable to Landlord, (ii)
name Landlord as a beneficiary, (iii) expressly allow Landlord to draw upon it
(including partial withdrawals) at any time from time to time by delivering to
the issuer and Tenant written certification that Landlord is entitled to draw
thereunder as a result of Tenant?s default under the Lease (after expiration of
any applicable notice, grace and cure periods granted thereunder), (iv) be
drawable on an FDIC-insured financial institution satisfactory to Landlord, (v)
be redeemable in the state of California in one of the nine counties comprises
the San Francisco-Oakland-San Jose area (the "Bay Area"), (vi) allow partial
draws, and (vii) be transferable to any successor to Landlord?s interest in this
Lease at no cost to Landlord, provided that only the first transfer of the
Letter of Credit by Landlord during the term of the Lease shall be at no cost to
Landlord.
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IN WITNESS WHEREOF, this Guaranty is executed as of May ___, 1999.
GUARANTOR
CMGI,
a Delaware corporation
By:____________________________
Name:__________________________
Title:_________________________
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