Texas-Irving-Waterway Tower Lease - Pembroke Real Estate Inc. and Scient Corp.
Lease between Scient and Pembroke Real Estate, Inc. dated May 1, 1999
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TABLE OF CONTENTS
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Page
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DEFINITIONS AND BASIC PROVISIONS.............................. 1
LEASE GRANT................................................... 1
TERM.......................................................... 1
Term........................................................ 1
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RENT.......................................................... 1
(a) Payment............................................. 1
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(b) Consumer Price Index Increases to Basic Rental...... 1
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(c) Electrical Costs.................................... 1
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(d) Annual Cost Statement............................... 1
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(e) Adjustments to Electrical Costs..................... 1
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DELINQUENT PAYMENT; HANDLING CHARGES.......................... 2
SECURITY DEPOSIT.............................................. 2
LANDLORD'S OBLIGATIONS........................................ 2
(a) Services............................................ 2
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(b) Excess Utility Use.................................. 3
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(c) Discontinuance...................................... 3
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(d) Restoration of Services............................. 4
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(e) Abatement........................................... 4
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(f) Restoration Costs................................... 4
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IMPROVEMENTS; ALTERATIONS; REPAIRS; MAINTENANCE............... 5
(a) Improvements; Alterations........................... 5
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(b) Repairs; Maintenance................................ 6
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(c) Performance of Work................................. 6
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(d) Mechanic's Liens.................................... 6
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USE........................................................... 6
ASSIGNMENT AND SUBLETTING..................................... 7
(a) Transfers; Consent.................................. 7
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(b) Cancellation........................................ 8
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(c) Additional Compensation............................. 8
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(d) Transfer Restrictions............................... 8
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(e) Bankruptcy Provisions............................... 9
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(f) Withholding of Consent.............................. 10
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(g) Transfer Without Landlord Consent................... 11
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(h) Miscellaneous....................................... 12
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INSURANCE; WAIVERS; SUBROGATION; INDEMNITY.................... 12
(a) Insurance........................................... 12
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(b) Waiver of Negligence Claims No Subrogation.......... 13
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(c) Indemnity........................................... 14
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(d) Miscellaneous....................................... 14
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(e) Landlord Indemnity.................................. 14
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SUBORDINATION ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE...... 15
(a) Subordination....................................... 15
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(b) Attornment.......................................... 15
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(c) Notice to Landlord's Mortgagee....................... 15
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(d) Non-Disturbance Agreement from Current Landlord's
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Mortgagee........................................... 15
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RULES AND REGULATIONS......................................... 16
CONDEMNATION.................................................. 16
(a) Taking - Landlord's and Tenant's Rights............. 16
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(b) Taking - Landlord's Rights.......................... 16
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(c) Award............................................... 16
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FIRE OR OTHER CASUALTY........................................ 10
(a) Repair Estimate..................................... 16
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(b) Landlord's and Tenant's Rights...................... 16
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(c) Landlord's Rights................................... 17
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(d) Repair Obligation................................... 17
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TAXES......................................................... 17
EVENTS OF DEFAULT............................................. 18
REMEDIES...................................................... 18
PAYMENT BY TENANT; NON-WAIVER................................. 19
(a) Payment by Tenant................................... 19
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(b) No Waiver........................................... 19
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LANDLORD'S LIEN............................................... 19
SURRENDER OF PREMISES......................................... 19
HOLDING OVER.................................................. 20
CERTAIN RIGHTS RESERVED BY LANDLORD........................... 20
SUBSTITUTION SPACE............................................ 21
MISCELLANEOUS................................................. 22
(a) Landlord Transfer................................... 22
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(b) Landlord's Liability................................ 22
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(c) Force Majeure....................................... 22
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(d) Brokerage........................................... 22
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(e) Estoppel Certificates............................... 23
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(f) Notices............................................. 23
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(g) Separability; Gender and Number..................... 23
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(h) Amendments; and Binding Effect...................... 23
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(i) Quiet Enjoyment..................................... 23
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(j) Joint and Several Liability......................... 23
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(k) Captions............................................ 24
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(1) No Merger........................................... 24
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(m) Landlord Consent.................................... 24
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(n) No Offer............................................ 24
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(o) Exhibits............................................ 24
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(p) Entire Agreement.................................... 24
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(q) Governing Law....................................... 25
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(r) Financial Reports................................... 25
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(s) Abandonment......................................... 25
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(t) Signs............................................... 26
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SPECIAL PROVISIONS............................................ 26
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LEASE
THIS LEASE AGREEMENT (this "Lease") is entered into as of May 1, 1999,
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between PEMBROKE REAL ESTATE, INC. ("Landlord"), and SCIENT CORPORATION, a
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California corporation ("Tenant").
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DEFINITIONS AND 1. The definitions and basic provisions set forth in
BASIC PROVISIONS the foregoing Basic Lease Information (the "Basic Lease
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Information") executed by Landlord and Tenant
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contemporaneously herewith are incorporated herein by
reference for all purposes.
LEASE GRANT 2. Subject to the terms of this Lease, Landlord
leases to Tenant, and Tenant leases from Landlord, the
Premises.
TERM 3. Term. Possession of the Initial Premises during
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the Term shall be as follows:
RSF Floor Monthly Rental Rate Term
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5,000-10,000* 3rd Free 5/1/99-6/30/99
11,422 3rd Free 7/1/99-12/31/99
11,423 3rd $23.50 + E 7/1/99-12/31/99
22,845 3rd $23.50 + E 1/1/00-12/31/04
*Location on the 3rd floor of the Building and actual rentable square feet
to be determined at a later date.
RENT 4. (a) Payment. Tenant shall timely pay to Landlord
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the Basic Rental and all additional sums to be paid by
Tenant to Landlord under this Lease, including the amounts
set forth in Exhibit C, without deduction or set off, at
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Landlord's Address (or such other address as Landlord may
from time to time designate in writing to Tenant). Basic
Rental, adjusted as herein provided, shall be payable
monthly in advance. The third monthly installment of Basic
Rental shall be payable contemporaneously with the execution
of this Lease; thereafter, monthly installments of Basic
Rental shall be due on the first day of the fourth full
calendar month of the Term and continuing on the first day
of each succeeding calendar month during the Term. Basic
Rental for any fractional month at the beginning of the Term
shall be prorated based on 1/365ths of the current annual
Basic Rental for each day of the partial month this Lease is
in effect, and shall be due on the Commencement Date.
(b) Consumer Price Index Increases to Basic
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Rental. Intentionally deleted.
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(c) Electrical Costs. Tenant shall pay to Landlord
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an amount equal to the product of (1) the cost of all
electricity used by the Building ("Electrical Costs"),
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multiplied by (2) Tenant's Proportionate Share. Such amount
shall be payable monthly based on Landlord's estimate of the
amount due for each month, and shall be due on the
Commencement Date and on the first day of each calendar
month thereafter unless Landlord has theretofore furnished
Tenant with information indicating the amount due, in which
event such amount shall be due within thirty (30) days after
Landlord has delivered to Tenant an invoice therefor.
Landlord reserves the right to change the manner in which
electricity at the Building is metered.
(d) Annual Cost Statement. By April 1 of each
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calendar year, or as soon thereafter as practicable,
Landlord shall furnish to Tenant a statement of Landlord's
actual Electrical Costs (the "Annual Cost Statement") for
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the previous year adjusted as provided in Section 4.(e). If
the Annual Cost Statement reveals that Tenant paid more for
Electrical Costs than Tenant's Proportionate Share of
Electrical Costs in the year for which such statement was
prepared, then Landlord shall reimburse or credit Tenant for
such excess within 30 days after delivery of the Annual Cost
Statement in question; likewise, if Tenant paid less than
Tenant's Proportionate Share of Electrical Costs, then
Tenant shall pay Landlord such deficiency within 30 days
after delivery of the Annual Cost Statement in question.
(e) Adjustments to Electrical Costs. With respect
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to any calendar year or partial calendar year in which the
Building is not occupied to the extent of 100% of the
rentable area thereof, the Electrical Costs for such period
shall, for the purposes hereof, be increased to the amount
which would have been
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incurred had the Building been occupied to the extent of
100% of the rentable area thereof, and Tenant shall
thereafter pay to Landlord an amount equal to the product of
(1) such amount of Electrical Costs, multiplied by (2)
Tenant's Proportionate Share.
DELINQUENT 5. All payments required of Tenant hereunder shall
PAYMENT bear interest from the date due until paid at the maximum
HANDLING CHARGES lawful rate in effect at the time such payment was due or
sum was advanced, or if there is no ascertainable maximum
lawful rate then in effect, at a rate of five percent (5%)
in excess of the floating prime or base rate of interest
established from time to time for responsible commercial
borrowers by a national bank selected by Landlord. Landlord
hereby notifies Tenant that for purposes of TEX. REV. CIV.
STAT. ANN. Art. 5069-1.04, as it may from time to time be
amended, the "applicable rate ceiling" shall be the
"indicated rate" ceiling; provided, however, that, to the
extent permitted by applicable law, Landlord reserves the
right to change the "applicable rate ceiling" from time to
time by further notice and disclosure to Tenant. Tenant
agrees that such interest is to compensate Landlord for
Tenant's use of Landlord's money after the applicable
payment was due. Additionally, Tenant shall pay to Landlord
as additional rent hereunder a late charge equal to 10% of
the delinquent payment; provided, however, Tenant shall have
no obligation to pay such late charge in connection with the
first payment of Rent (including, without limitation, Basic
Rental) due during any twelve (12) month period which is not
paid by Tenant on the date such payment was due but is paid
on or before the fifth (5th) day after such payment was due.
The parties hereto acknowledge and agree that (i) such late
charge represents a fair and reasonable estimate of the
costs Landlord will incur in processing any delinquent
payment by Tenant, (ii) such late charge shall be paid to
Landlord as liquidated damages for each payment not made by
Tenant as and when due under this Lease, and (iii) the
payment of such late charge is to compensate Landlord for
its cost and inconvenience incurred as a consequence of
Tenant's delinquency and for the additional administrative
expense incurred by Landlord or its managing agent in
handling and processing delinquent payments. In no event,
however, shall the charges permitted under this Section 5 or
elsewhere in this Lease, to the extent the same are
considered to be interest under applicable law, exceed the
maximum lawful rate of interest.
SECURITY DEPOSIT 6. Contemporaneously with the execution of this
Lease, Tenant shall pay to Landlord, in immediately
available funds, the Security Deposit, which shall be held
by Landlord without liability for interest and as security
for the performance by Tenant of its obligations under this
Lease. The Security Deposit is not an advance payment of
Rent or a measure or limit of Landlord's damages upon an
Event of Default (defined below). Landlord may, from time to
time and without prejudice to any other remedy, use all or a
part of the Security Deposit to perform any obligation which
Tenant was obligated, but failed, to perform hereunder and
such failure has continued for a period of time equal to or
greater than five (5) days after Tenant's receipt of written
notice of its failure to perform any such obligation.
Following any such application of the Security Deposit,
Tenant shall pay to Landlord on demand the amount so applied
in order to restore the Security Deposit to its original
amount. Within a reasonable time after the Term ends,
provided Tenant has performed all of its obligations
hereunder, Landlord shall return to Tenant the balance of
the Security Deposit not applied to satisfy Tenant's
obligations. If Landlord transfers its interest in the
Premises, then Landlord may assign and deliver the Security
Deposit to the transferee and Landlord thereafter shall have
no further liability for the return of the Security Deposit.
LANDLOARD'S 7. (a) Services. Provided no Event of Default exists
OBLIGATIONS --------
and subject to any event beyond the reasonable control of
Landlord (including, without limitation, the events
described in Section 25.(c) below), Landlord will furnish to
Tenant (1) water (hot and cold) at those points of supply
provided for general use of tenants of the Building; (2)
heating, ventilation, and air-conditioning ("HVAC") as
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appropriate and at such times as Landlord normally furnishes
these services to all tenants of the Building, and at such
temperatures and in such amounts as are reasonably
considered by Landlord to be standard; (3)janitorial service
to the Premises on weekdays other than holidays for
Building-standard installations (Landlord reserves the right
to bill Tenant separately for extra janitorial service
required for non-standard installations) and such window
washing as may from time to time in Landlord's judgment be
reasonably required; (4) elevators for ingress and egress to
the floor on which the Premises are located,
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in common with other tenants, provided that Landlord may
reasonably limit the number of elevators to be in operation
at times other than during customary business hours and on
holidays; (5) replacement of Building-standard light bulbs
and fluorescent tubes, provided that Landlord's standard
charge for such bulbs and tubes shall be paid by Tenant; and
(6) electrical current during normal business hours other
than for computers, electronic data processing equipment,
special lighting, equipment that requires more than 110
volts, or other equipment whose electrical energy
consumption exceeds normal office usage. Landlord shall
maintain the common areas of the Building in reasonably good
order and condition, except for damage occasioned by Tenant,
or its employees, agents or invitees. If Tenant desires any
of the services specified in this Section 7.(a) at any time
other than times herein designated (other than HVAC service
which is governed by the immediately following sentence),
such services shall be supplied to Tenant upon the written
request of Tenant delivered to Landlord before 3:00 p.m. on
the business day preceding such extra usage, and Tenant
shall, within thirty (30) days after Tenant's receipt of an
invoice therefor, pay to Landlord the cost of such services
together with an overhead charge equal to ten percent (10%)
of the actual cost of any such service. If Tenant desires
any HVAC service at any time other than the times herein
designated, such HVAC service shall be supplied to Tenant
upon the written request of Tenant delivered to Landlord
before 3:00 p.m. on the business day preceding such extra
usage, and Tenant shall, within thirty (30) days after
Tenant's receipt of an invoice therefor, pay to Landlord the
Initial After-Hours HVAC Charge, which Initial After-Hours
HVAC Charge is subject to change by Landlord if electrical
rates are increased by any provider of electricity or if
Landlord's costs to provide this service otherwise increase
after the Commencement Date.
(b) Excess Utility Use. Landlord shall use
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reasonable efforts to furnish electrical current for
computers, electronic data processing equipment, special
lighting, equipment that requires more than 110 volts, or
other equipment whose electrical energy consumption exceeds
normal office usage through the then-existing feeders and
risers serving the Building and the Premises, and Tenant
shall pay to Landlord the cost of such service within thirty
(30) days after Landlord has delivered to Tenant an invoice
therefor. Landlord may determine the amount of such
additional consumption and potential consumption by either
or both: (1) a survey of standard or average tenant usage of
electricity in the Building performed by a reputable
consultant selected by Landlord and paid for by Tenant; or
(2) a separate meter in the Premises installed, maintained,
and read by Landlord, at Tenant's expense. Tenant shall not
install any electrical equipment requiring special wiring or
requiring voltage in excess of 110 volts or otherwise
exceeding Building capacity unless approved in advance by
Landlord. The use of electricity in the Premises shall not
exceed the capacity of existing feeders and risers to or
wiring in the Premises. Any risers or wiring required to
meet Tenant's excess electrical requirements shall, upon
Tenant's written request, be installed by Landlord, at
Tenant's cost, if, in Landlord's sole and absolute judgment,
the same are necessary and shall not cause permanent damage
or injury to the Building or the Premises, cause or create a
dangerous or hazardous condition, entail excessive or
unreasonable alterations, repairs, or expenses, or interfere
with or disturb other tenants of the Building. If Tenant
uses machines or equipment (other than general office
machines and personal computers, but excluding computer
rooms and electronic data processing equipment) in the
Premises which affect the temperature otherwise maintained
by the air conditioning system or otherwise overload any
utility, Landlord may install supplemental air conditioning
units or other supplemental equipment in the Premises, and
the cost thereof, including the cost of installation,
operation, use, and maintenance, shall be paid by Tenant to
Landlord within thirty (30) days after Landlord has
delivered to Tenant an invoice therefor.
(c) Discontinuance. Landlord's obligation to
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furnish services under Section 7.(a) shall be subject to the
rules and regulations of the supplier of such services and
governmental rules and regulations. Landlord may, upon not
less than 60-days' prior written notice to Tenant,
discontinue any such service to the Premises, provided
Landlord first arranges for a direct connection thereof
through the supplier of such service. Tenant shall, however,
be responsible for contracting with the supplier of such
service and for paying all deposits for, and costs relating
to, such service.
(d) Restoration of Services. Except as expressly
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provided
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below, Landlord shall not be liable for, and Tenant shall
not be entitled to, any damages or termination right or any
abatement or reduction of rental by reason of Landlord's
failure to furnish any of the services (collectively, the
"Landlord Services") to be furnished by Landlord as provided
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above, nor shall such failure constitute a constructive
eviction of Tenant or breach of any implied warranty or
relieve Tenant from any obligation hereunder, whether such
failure is caused by accident, breakage, repairs, energy
shortages or restrictions, strikes, lockouts or other labor
disturbances or labor disputes of any character, riots,
civil disturbances or by any other cause, similar or
dissimilar, beyond the control of Landlord. Except as may be
limited by law, Landlord shall not be liable under any
circumstances for loss of or injury to property, however
occurring, through or in connection with or incidental to
failure to furnish any of the Landlord Services, nor shall
Landlord be responsible for any act or omission or
commission on the part of the person or persons employed to
furnish any of the Landlord Services. Notwithstanding
anything to the contrary contained in this Lease, Tenant
agrees that Landlord shall not be liable for, and Tenant
shall not be entitled to, any damages or any abatement or
reduction of rental by reason of Landlord's failure to
supply any of the Landlord Services during any period when
Landlord uses commercially reasonable efforts to supply such
services or the cause of such failure is beyond the control
of Landlord. After receiving notice of any interruption of
any of the Landlord Services, Landlord shall use
commercially reasonable efforts to restore any interrupted
or unavailable Landlord Services.
(e) Abatement. Subject to the provisions of the
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preceding Section 7.(d), if a stoppage of any of the
Landlord Services causes a material portion of the Premises
to become untenantable by Tenant for more than ten (10)
consecutive business days after Tenant gives Landlord
written notice of such stoppage, then and in that event,
Tenant, as its sole and exclusive remedy therefor, shall be
entitled to a pro-rata abatement of Rent as to such
untenantable portion of the Premises commencing on the
eleventh (11th) consecutive business day that the same are
untenantable and continuing until the restoration of such
services. Notwithstanding the foregoing, however, Tenant
shall not be entitled to any abatement of Rent due to
untenantability (a) caused by an act or omission of Tenant
or any of Tenant's employees, agents, contractors, visitors
or licensees, or (b) where the stoppage of the Landlord
Services in question is caused by (1) fire or other casualty
in which case Section 15 shall apply, or (2) condemnation or
taking in which case Section 14 shall apply.
(f) Restoration Costs. If a stoppage (other than
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any stoppage caused by an act or omission of Tenant or any
of Tenant's employees, agents, contractors, visitors or
licensees, any stoppage caused by fire or other casualty or
condemnation or taking, or any cause beyond the control of
Landlord) of any of the Landlord Services causes a material
portion of the Premises to become untenantable by Tenant for
more than thirty (30) consecutive days after Tenant gives
Landlord written notice of such stoppage, Tenant may
commence to restore the applicable Landlord Services unless
Landlord has begun taking action(s) to restore the
applicable Landlord Services and Landlord is continuing to
pursue the same with commercially reasonable diligence. All
actual third-party costs reasonably incurred by Tenant in
connection with restoring the applicable Landlord Services
("Restoration Costs") shall, if not disputed by Landlord and
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submitted to arbitration as provided below, be paid to
Tenant by Landlord within thirty (30) days following
Landlord's receipt of a written demand therefor together
with written evidence acceptable to Landlord of the amount
of such Restoration Costs. If Landlord disputes Landlord's
obligation to pay all or any portion of the Restoration
Costs set forth in any such written demand, Landlord may
dispute such costs and defer any payment of the same by
giving Tenant written notice thereof (a "Services Failure
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Dispute Notice") within ten (10) business days after
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Landlord's receipt of Tenant's written demand, and Landlord
and Tenant shall thereafter proceed to diligently and in
good faith attempt to resolve such dispute and, if the
parties are unable to resolve the same within sixty (60)
days after Tenant's receipt of the applicable Services
Failure Dispute Notice, such dispute shall be submitted for
resolution by binding arbitration in accordance with the
terms, conditions and provisions of the Exhibit K attached
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to this Lease. If Landlord does not so dispute Tenant's
claim for Restoration Costs and does not pay the same within
such thirty (30) day period, Tenant may offset such
Restoration Costs against up to twenty-five percent (25%) of
the next due installment(s) of Basic Rental until such time
as the full amount of such Restoration Costs has been
reimbursed unless the amount of such Restoration
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Costs is equal to or greater than the entire amount of Basic
Rental due and payable for the six (6) calendar months
following the date on which such stoppage initially
occurred, in which case only that amount of such Restoration
Costs may be offset against such percentage of the next due
installment(s) of Basic Rental until such time as that
amount of the applicable Restoration Costs has been
reimbursed; provided, however, in no event shall such cap on
the amount of Restoration Costs to be offset against Basic
Rental relieve Landlord from its obligation to pay the
remaining amount of such non-disputed and/or arbitrated
Restoration Costs.
IMPROVEMENTS; 8. (a) Improvements Alterations. Improvements to the
ALTERATIONS; ------------------------
REPAIRS; Premises shall be installed at the expense of Tenant only in
MAINTENANCE accordance with plans and specifications which have been
previously submitted to and approved in writing by Landlord.
After the initial Tenant improvements are made (including,
without limitation, any leasehold improvements made in
connection with expansions by Tenant pursuant to the Exhibit
G attached hereto), no alterations or physical additions in
or to the Premises which individually cost more than
$5,000.00 or, together with the cost of all alterations or
physical additions made during the immediately preceding 12
month period, cost more than $10,000.00 in the aggregate may
be made without Landlord's prior written consent, which
consent will not be unreasonably withheld or delayed;
provided, however, that Landlord will be able to withhold
its consent, in its sole and absolute discretion, with
respect to any alterations or physical additions in or to
the Premises, regardless of cost, which (A) are made to or
affect (1)the structural components of the Building, or (2)
the systems of the Building, or (B) are visible from the
exterior of the Building. If requested in writing at the
time of Tenant's request for Landlord's written consent to
any proposed alterations or physical additions in or to the
Premises, Landlord will, if Landlord's consent to the same
is given, notify Tenant in writing whether Landlord will
require that Tenant remove such alterations or physical
additions at the expiration or earlier termination of this
Lease. Tenant shall not paint or install lighting or
decorations, signs, window or door lettering, or advertising
media of any type on or about the Premises without the prior
written consent of Landlord. All alterations, additions, or
improvements (whether temporary or permanent in character,
and including without limitation all air-conditioning
equipment and all other equipment that is in any manner
connected to the Building's plumbing system) made in or upon
the Premises, either by Landlord or Tenant, shall be
Landlord's property at the end of the Term and shall remain
on the Premises without compensation to Tenant. Approval by
Landlord of any of Tenant's drawings and plans and
specifications prepared in connection with any improvements
in the Premises shall not constitute a representation or
warranty of Landlord as to the adequacy or sufficiency of
such drawings, plans and specifications, or the improvements
to which they relate, for any use, purpose, or condition,
but such approval shall merely be the consent of Landlord as
required hereunder. Notwithstanding anything in this Lease
to the contrary, Tenant shall be responsible for the cost of
all work required to comply with the retrofit requirements
of any Disability Laws (as hereinafter defined) (including,
without limitation; the Americans with Disabilities Act of
1990, and all rules, regulations, and guidelines promulgated
thereunder, as the same may be amended from time to time)
necessitated by any installations, additions, or alterations
made in or to the Premises at the request of or by Tenant or
by Tenant's or any Permitted Transferee's (as defined in
Section 25.(s) below) use of the Premises (other than
retrofit work whose cost has been particularly identified as
being payable by Landlord in an instrument signed by
Landlord and Tenant), regardless of whether such cost is
incurred in connection with retrofit work required in the
Premises (including the Work described in Exhibit D) or in
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other areas of the Building. All changes, alterations or
modifications (other than changes, alterations or
modifications required [1] as a result of Tenant's or any
Permitted Transferee's particular use of all or any portion
of the Premises, and/or [2] to cause the Premises to comply
with all applicable Disability Laws which Tenant has agreed
to do in this Section 8), if any, necessary to make portions
of the Building (other than the Premises) comply with all
applicable Laws (including, without limitation, Disability
Laws) shall be the responsibility of Landlord; provided,
however, if such changes, alterations or modifications are
required as a result of Tenant's or any Permitted
Transferee's use of the Premises or any changes, alterations
or modifications made to the Premises by or on behalf of
Tenant, then the same shall be made by Landlord at the sole
cost and expense of Tenant. Landlord shall have the right to
delay making any of the changes, alterations and/or
modifications referred to in the immediately preceding
sentence while Landlord is contesting in good faith the
action or actions being taken by any
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governmental authority in connection therewith. As used
in this Lease, the term "Disability Laws" shall mean the
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provisions of (i) Tex. Rev. Civ. Stat. Ann. art. 9102, as
amended, (ii) the Americans With Disabilities Act of 1990,
42 U.S.C. (S)(S)12101-12213, as amended, and (iii) any other
similar public accommodation Laws (as hereinafter defined).
As used herein, the term "Laws" shall mean all laws,
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Statutes, ordinances, resolutions, rules, codes,
regulations, restrictions (including, without limitation,
restrictive covenants or deed restrictions), policies,
orders, determinations or requirements from time to time in
existence of any governmental authority.
(b) Repairs; Maintenance. Tenant shall maintain
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the Premises in a clean, safe, operable, attractive
condition, and shall not permit or allow to remain any waste
or damage to any portion of the Premises. Tenant shall
repair or replace, subject to Landlord's direction and
supervision, any damage to the Building caused by Tenant or
Tenant's agents, contractors, or invitees. If Tenant fails
to make such repairs or replacements within 30 days after
the occurrence of such damage, then Landlord may make the
same at Tenant's cost. In lieu of having Tenant repair any
such damage outside of the Premises, Landlord may repair
such damage at Tenant's cost. The cost of any repair or
replacement work performed by Landlord under this Section 8
shall be paid by Tenant to Landlord within ten (10) days
after Landlord has delivered to Tenant an invoice therefor.
(c) Performance of Work. All work described in
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this Section 8 shall be performed only by Landlord or by
contractors and subcontractors approved in writing by
Landlord. Landlord acknowledges that Equis Corporation is
involved in the management of the Work (as defined in the
Exhibit D attached to this Lease). Tenant shall cause all
contractors and subcontractors to procure and maintain
insurance coverage against such risks, in such amounts, and
with such companies as Landlord may reasonably require, and
to procure payment and performance bonds reasonably
satisfactory to Landlord covering the cost of the work. All
such work shall be performed in accordance with all legal
requirements and in a good and workmanlike manner so as not
to damage the Premises, the primary structure or structural
qualities of the Building, or plumbing, electrical lines, or
other utility transmission facility. All such work which may
affect the HVAC system, electrical system, or plumbing must
be approved by the Building's engineer of record.
(d) Mechanic's Liens. Tenant shall not permit any
----------------
mechanic's liens to be filed against the Premises or the
Building for any work performed, materials furnished, or
obligation incurred by or at the request of Tenant. If such
a lien is filed, then Tenant shall, within ten (10) business
days after Landlord has delivered notice of the filing to
Tenant, either pay the amount of the lien or diligently
contest such lien and deliver to Landlord a bond or other
security reasonably satisfactory to Landlord. If Tenant
fails to timely take either such action, then Landlord may
pay the lien claim without inquiry as to the validity
thereof, and any amounts so paid, including expenses and
interest, shall be paid by Tenant to Landlord within ten
(10) days after Landlord has delivered to Tenant an invoice
therefor.
USE 9. Tenant shall continuously occupy and use the
Premises only for the Permitted Use and shall comply with
all Laws relating to the use, condition, and occupancy of
the Premises. The Premises shall not be used for any use
which is disreputable, creates extraordinary fire hazards or
results in an increased rate of insurance on the Building or
its contents or the storage of any hazardous materials or
substances, or is otherwise in violation of any of the terms
and provisions of this Lease. Landlord acknowledges and
agrees that the business of Tenant as indicated on the S-1
filed with the Securities and Exchange Commission is not
disreputable. If, because of Tenant's acts, the rate of
insurance on the Building or its contents increases, then
such acts shall be an Event of Default, Tenant shall pay to
Landlord the amount of such increase within five (5)
business days after Tenant's receipt of written demand for
such amount, and acceptance of such payment shall not
constitute a waiver of any of Landlord's other rights.
Tenant shall conduct its business and control its agents,
employees, and invitees in such a manner as not to create
any nuisance or interfere with other tenants or Landlord in
its management of the Building. The Premises shall not be
occupied by more than one (1) person per one hundred
seventy-five (175) net rentable square feet contained in the
Premises (with the understanding that Tenant may provide
working areas/stations at a ratio of one per 145 net
rentable square feet in the
6
<PAGE>
Premises), and (ii) Tenant shall not conduct its business
within the Premises for more than fourteen (14) consecutive
hours during any business day (an insubstantial number of
employees working more than 14 consecutive hours during any
business day shall not constitute the conduct of Tenant's
business within the Premises for more than 14 consecutive
hours during such business day).
ASSIGNMENT AND 10. (a) Transfers Consent. Tenant shall not, without
SUBLETTING -----------------
the prior written consent of Landlord (which consent will
not be unreasonably withheld or delayed), (1) assign,
transfer, or encumber this Lease or any estate or interest
herein, whether directly or by operation of law, (2) permit
any other entity to become Tenant hereunder by merger,
consolidation, or other reorganization, (3) if Tenant is an
entity other than a corporation whose stock is publicly
traded, permit the transfer of an ownership interest in
Tenant so as to result in a change in the current control of
Tenant, (4) sublet any portion of the Premises, (5) grant
any license, concession, or other right of occupancy of any
portion of the Premises, or (6) permit the use of the
Premises by any parties other than Tenant (any of the events
listed in Sections 10.(a)(1) through 10.(a)(6) being a
"Transfer"). If Tenant requests Landlord's consent to a
--------
Transfer, then Tenant shall provide Landlord with (A) a
written description of all terms and conditions of the
proposed Transfer (including, without limitation, the
proposed use of the Premises to be affected by such
Transfer), (B) copies of the proposed Transfer
documentation, (C) the following information about the
proposed transferee: name and address; reasonably
satisfactory information about its business and business
history; its proposed use of the Premises; banking,
financial, and other credit information; and general
references sufficient to enable Landlord to determine the
proposed transferee's creditworthiness and character, and
(D) such other information as Landlord may reasonably
request in writing within ten (10) days after its receipt of
the information described in clauses (A), (B) and (C) of
this paragraph. If Landlord fails to respond to any written
request by or on behalf of Tenant for Landlord's consent to
any Transfer within thirty (30) days of Landlord's receipt
of such written request and all of the information and
materials required by the immediately preceding sentence,
the request shall be deemed to have been denied by Landlord.
Tenant shall reimburse Landlord for its reasonable
attorneys' fees and other expenses reasonably incurred in
connection with considering any request for its consent to a
Transfer. If Landlord consents to a proposed Transfer, then
(i) Tenant agrees specifically to pay over to Landlord, as
Rent, all sums provided to be paid under the terms and
conditions of such Transfer which are in excess of the
amounts otherwise required to be paid by Tenant to Landlord
pursuant to this Lease, and (ii) the proposed transferee
shall deliver to Landlord a written agreement whereby it
expressly assumes the Tenant's obligations hereunder;
provided, however, that any sublessee of less than all of
the space in the Premises shall be liable only for
obligations under this Lease that are properly allocable to
the space subject to the applicable Transfer (excluding,
however, any obligation to pay Basic Rental and Tenant's
share of Excess, Tax Excess and DCURD Excess due hereunder
but including Tenant's share of Electrical Costs due
hereunder that are properly allocable to the space subject
to such Transfer). Landlord's consent to a Transfer shall
not release Tenant from performing its obligations under
this Lease, but rather Tenant and its transferee shall be
jointly and severally liable therefor. Landlord's consent to
any Transfer shall not waive Landlord's rights as to any
subsequent Transfers. If an Event of Default occurs while
the Premises or any part thereof are subject to a Transfer,
then Landlord, in addition to its other remedies, may
collect directly from such transferee all rents becoming due
to Tenant and apply such rents against Rent. Tenant
authorizes its transferees to make payments of rent directly
to Landlord upon receipt of notice from Landlord to do so.
If Tenant elects to assign this Lease or sublease all or any
portion of the Premises, Tenant may advertise the same
provided that Tenant has obtained the prior written consent
of Landlord to the form and content of any such advertising.
Tenant agrees that in the event Landlord withholds its
consent to any Transfer contrary to the provisions of this
Section 10, Tenant's sole remedy shall be to seek an
injunction in equity to compel performance by Landlord to
give its consent and Tenant expressly waives any right to
damages in the event of such withholding by Landlord of its
consent.
(b) Cancellation. Landlord may, within 30 days
------------
after submission of Tenant's written request for Landlord's
consent to a Transfer of the entire Premises or a portion of
the Premises for a term that ends within the last twelve
(12) months of the Term of this Lease, and all of the
information and
7
<PAGE>
materials required by this Section 10, cancel this Lease
(or, as to a subletting or assignment, cancel as to the
portion of the Premises proposed to be sublet or assigned)
as of the date the proposed Transfer was to be effective. If
Landlord cancels this Lease as to any portion of the
Premises, then this Lease shall cease for such portion of
the Premises and Tenant shall pay to Landlord all Rent
accrued through the cancellation date relating to the
portion of the Premises covered by the proposed Transfer and
all brokerage commissions paid or payable by Landlord in
connection with this Lease that are allocable to such
portion of the Premises. No Rent shall accrue after such
cancellation date for the portion of the Premises cancelled.
Thereafter, Landlord may lease such portion of the Premises
to the prospective transferee (or to any other person)
without liability to Tenant.
(c) Additional Compensation. Prior to the
-----------------------
occurrence and other than during the continuance of an Event
of Default, Tenant shall pay to Landlord, immediately upon
receipt thereof, 50% of all compensation received by Tenant
for a Transfer that exceeds the Basic Rental and Tenant's
share of Electrical Costs, Excess, Tax Excess and DCURD
Excess allocable to the portion of the Premises covered
thereby (100% of such compensation is herein referred to as
the "Transfer Profits"); provided, however, that to the
----------------
extent any cash payment with respect to a Transfer (or any
other proceeds of such Transfer once the same have been
converted to cash) is paid to Landlord, Tenant shall receive
a dollar-for-dollar credit towards the Rent due hereunder
which is allocable to the portion of the Premises covered by
such Transfer and Landlord shall retain the amount, if any,
of such cash payment (or any other proceeds of such
Transfer) that exceeds the Basic Rental and Tenant's share
of Electrical Costs due hereunder which is allocable to the
portion of the Premises covered by such Transfer.
Notwithstanding the foregoing, after the occurrence and
during the continuance of an Event of Default, Tenant shall
pay to Landlord, immediately upon receipt thereof, 100% of
all Transfer Profits. Tenant hereby assigns to Landlord any
and all rights it might have or ever acquire in any cash or
other proceeds of any Transfer (whether or not such Transfer
was consented to by Landlord) subject, however, to Tenant's
conditional right to receive 50% of the Transfer Profits as
provided above. This covenant and assignment shall run with
the Land and shall bind Tenant and Tenant's heirs,
executors, administrators, personal representatives,
successors and assigns. Any assignee or purchaser of
Tenant's interest in this Lease or any sublessee of all or
any portion of the Premises (each such assignee, purchaser
or sublessee is herein sometimes referred to as a
"Transferee"), by occupying the Premises or any portion(s)
----------
thereof and/or assuming Tenant's obligations hereunder,
shall assume liability to Landlord for all amounts paid to
persons other than Landlord by such Transferee in connection
with any such assignment or sale of Tenant's interest in
this Lease or subletting of all or any portion of the
Premises.
(d) Transfer Restrictions. Tenant agrees not to
---------------------
(i) sublease any space in the Building to or from another
tenant of the Building or any Affiliate of such tenant, or
(ii) accept or make any assignment of a lease of any space
in the Building to or from another tenant of the Building or
any Affiliate of such tenant, without the written consent of
Landlord first had and obtained (which Landlord may grant or
deny in its sole discretion notwithstanding anything to the
contrary contained in this Lease). Landlord agrees not to
unreasonably withhold its consent to a request by Tenant to
sublease all or any portion of the Premises to or from
another tenant of the Building if Landlord does not then
have space Available For Rent (as hereinafter defined) in
the Building that is Comparable in Size (as hereinafter
defined) to either (1) the Premises or the applicable
portion thereof to be sublet, or (2) the space to be
subleased by Tenant from another tenant of the Building. For
the purposes of this Section 10, space in the Building shall
be considered "Available For Rent" if (A) the applicable
------------------
space is not then leased by a tenant and is not then subject
to any expansion options, rights of first offer or other
options or rights of other tenants or other third parties
(or is subject to any of the foregoing, but the party owning
the same has waived, been deemed to have waived, or failed
to timely exercise the same with respect to the leasing of
the applicable space by Landlord within the consent period
identified in Section 10.(a) above), or (B) if the
applicable space is then leased and the applicable tenant's
lease expires, or shall terminate effective as of a date
which is, 4 months or less from the date on which it is
being determined whether the applicable space is Available
For Rent and such space is not then subject to any expansion
options, rights of first offer or other options or rights of
other tenants or other third parties (or is subject to any
of the foregoing, but the party owning the same has waived,
8
<PAGE>
been deemed to have waived, or failed to timely exercise the
same with respect to the leasing of the applicable space by
Landlord within the consent period identified in Section
10.(a) above), and space in the Building shall be considered
"Comparable in Size" if it is between 75% and 125% of the
------------------
amount of net rentable square feet of space being compared
to such space (by way of example only, if Tenant is
proposing to sublease 10,000 net rentable square feet of
space of the Premises, then any space containing at least
7,500 net rentable square feet of space and not more than
12,500 net rentable square feet of space would be considered
Comparable in Size). For the purposes of this Lease, the
term "Affiliate" shall mean a person or entity directly or
---------
indirectly, through one or more intermediaries, controlling,
controlled by or under common control with the party in
question. The term "control", as used in this Section 10,
-------
means, with respect to an entity that is a corporation, the
right to the exercise, directly or indirectly, of more than
50% of the voting rights attributable to the shares of the
controlled corporation and, with respect to an entity that
is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of
the management or policies of the controlled entity. In
determining whether a person or entity is an Affiliate of an
individual, the aggregate voting rights or interests in
other entities which are held by members of such
individual's immediate family members or by trusts for the
benefit of such individual's immediate family members shall
be attributed to such individual.
(e) Bankruptcy Provisions. Tenant (or any
---------------------
Transferee), Tenant (or any Transferee) as debtor-in-
possession, and any trustee or receiver of Tenant's (or any
Transferee's) assets (each, whether as to Tenant or any
Transferee, a "Tenant's Representative") shall have no
-------- --------------
greater rights to assume or assign this Lease or any
interest in this Lease, or to sublease all or any portion of
the Premises, than the rights provided to Tenant in this
Section 10 except to the extent Landlord shall be required
to permit such assumption, assignment or subletting by the
provisions of any Applicable Bankruptcy Law (as hereinafter
defined). Without limiting the generality of the foregoing,
if, pursuant to Applicable Bankruptcy Law, a Tenant's
Representative is permitted to assign this Lease in
disregard of the restrictions contained in this Section 10
(or if this Lease shall be assumed by a trustee or receiver
of Tenant or any Transferee), then the right of any Tenant's
Representative to assume or assign this Lease or to sublease
any of the Premises shall be subject to the following
conditions: (1) such Applicable Bankruptcy Law shall provide
to such Tenant's Representative a right of assumption of
this Lease which Tenant's Representative shall have timely
exercised and such Tenant's Representative or proposed
assignee shall have fully cured any default of Tenant (or
any Transferee) under this Lease; (2) such Tenant's
Representative or proposed assignee, as applicable, shall
have deposited with Landlord, as security for the timely
payment of Rent, cash security in an amount equal to the sum
of (i) the amount of the Security Deposit, if any, required
to be deposited with Landlord by the initial Tenant named in
this Lease, and (ii) one year's Basic Rental and Tenant's
share of Electrical Costs, Excess, Tax Excess and DCURD
Excess then reserved hereunder for the calendar year
preceding the year in which such assignment is intended to
become effective, which deposit shall be held by Landlord,
without interest, for the balance of the Term of this Lease
as security for the full and faithful performance of all of
the obligations under this Lease on the part of Tenant yet
to be performed; (3) such Tenant's Representative or
proposed assignee, as applicable, shall have provided
adequate assurance of the future performance of the
obligations of Tenant (or any Transferee) under this Lease
including, without limitation, the source of payment of Rent
and performance of all other obligations under this Lease
(which adequate assurance shall include, without limitation,
demonstration to the satisfaction of Landlord that [a] in
the case of an assumption of this Lease, Tenant's
Representative has and will continue to have sufficient
unencumbered assets after the payment of all secured
obligations and administrative expenses to assure Landlord
that Tenant's Representative will have sufficient funds to
fulfill the obligations of Tenant under this Lease, or [b]
in the case of an assignment of this Lease, such assignee
shall have a net worth, exclusive of good will and computed
in accordance with generally accepted accounting principles,
equal to the greater of (y) at least ten (10) times the sum
of all monthly installments of Basic Rental due under this
Lease during the initial Term hereof, or (z) the net worth
of the initial Tenant named in this Lease on the Lease Date,
which net worth shall be evidenced by current financial
statements of the proposed assignee, audited by an
independent certified public accountant reasonably
acceptable to Landlord); (4) the use of the Premises shall
be in accordance with the requirements of this Lease
9
<PAGE>
and, further, shall in no way diminish the reputation of the
Building as a first-class office building or impose any
additional burden upon the Building or increase the services
which Landlord would be required by this Lease to provide;
(5) the assumption or any contemplated assignment of this
Lease or subleasing of any portion of the Premises, as
applicable, shall not breach any provision in any other
lease Of space in the Building or any mortgage, financing
agreement or other agreement by which Landlord is bound; and
(6) Landlord shall have, or would have had absent the
Applicable Bankruptcy Law, no right under this Section 10 to
refuse consent to the proposed assignment or subletting by
reason of the identity or nature of the proposed assignee or
sublessee or the proposed use of the Premises to be affected
by such assignment or subletting. If all defaults are not
cured and such adequate assurance is not provided within
sixty (60) days after there has been an order for relief
under Applicable Bankruptcy Law, then (A) this Lease shall
be deemed rejected, (B) Tenant or any other person in
possession shall vacate the Premises, and (C) Landlord shall
be entitled to retain any Rent due hereunder, together with
any security deposit previously received from Tenant, and
shall have no further liability to Tenant or any person
claiming by, through or under Tenant or any trustee. If
Tenant assigns this Lease to any party and such party or its
successors or representatives causes a termination or
rejection of this Lease pursuant to Applicable Bankruptcy
Law, then, notwithstanding any such termination or
rejection, Tenant shall remain fully liable for the
performance of all covenants, agreements, terms, provisions
and conditions contained in this Lease as though the
termination or rejection never occurred and shall, without
in any way limiting the foregoing, in writing reinstate and
ratify the terms of this Lease as the same existed
immediately prior to the termination or rejection. As used
herein, the term "Applicable Bankruptcy Law" shall mean any
-------------------------
law, whether federal or state, relating to bankruptcy,
insolvency, reorganization, liquidation, winding-up or
composition or adjustment of, or relief from, debts.
Notwithstanding anything contained in this Lease to the
contrary, (i) all amounts payable by Tenant to or for the
benefit of Landlord under this Lease, whether or not
expressly denominated as Rent, shall constitute rent for the
purposes of Section 502(b)(7) of the United States
Bankruptcy Code, and (ii) this is a contract under which
applicable Law excuses Landlord from accepting performance
from (or rendering performance to) any person or entity
other than Tenant within the meaning of Sections 365(c) and
365(e)(2) of the United States Bankruptcy Code.
(f) Withholding of Consent. For the purposes of
----------------------
this Section 10, Landlord shall be deemed to have reasonably
withheld its consent to a Transfer if the refusal is based
on any one or more of the following: (1) Tenant's failure to
satisfy its obligations in the second and fourth sentences
of the Section 10.(a) above; (2) Landlord, in its sole
discretion reasonably exercised, has determined that one or
more of the reputation, business, proposed use of the
Premises, and/or the financial responsibility of and by the
proposed transferee is not satisfactory to Landlord (for the
purposes of this Lease, Landlord shall be conclusively
deemed to have reasonably exercised its discretion to
withhold its consent to an assignment or subletting to a
person or entity that either [a] is not of the character,
quality or financial strength of a tenant to whom Landlord
would generally lease space in the Building, or [b] is
similar in reputation, business, proposed use of space in
the Building and/or financial responsibility to either [i] a
prospective tenant of space in the Building to whom Landlord
elected not to lease such space, or [ii] a proposed assignee
or sublessee whose proposed assignment or subletting was not
consented to by Landlord); (3) at the time thereof an Event
of Default has occurred and is continuing or an event has
occurred and is continuing which with the giving of notice
or the passage of time, or both, would constitute an Event
of Default; (4) the proposed assignee or sublessee is an
existing tenant of the Building or Landlord reasonably
believes that the proposed assignee or sublessee is an
Affiliate (as defined in Section 10.(e) below) of an
existing tenant of the Building and Landlord then has space
Available For Rent in the Building that is Comparable in
Size to the Premises or the applicable portion thereof to be
sublet; (5) the portion(s) of the Premises subject to the
proposed Transfer will, in Landlord's sole discretion
reasonably exercised, cause the Premises to be excessively
and/or unacceptably "chopped-up"; (6) a lessor under any
Primary Lease (as defined in Section 12.(a) below) or the
holder of any Mortgage (as defined in Section 12.(a) below)
has objected to the proposed Transfer and Landlord has not
requested that such lessor or holder make such an objection;
(7) without limiting clause (4) of this paragraph, the
proposed Transfer conflicts in any manner with this Lease
(including, but not limited to, the use permitted by Section
9 above or any requirements or restrictions related
thereto); (8) the fact
10
<PAGE>
that the proposed assignee or sublessee is a governmental or
telemarketing entity or any other high-density user; (9) the
proposed assignee's or sublessee's primary business is
prohibited by a non-compete or similar provision of another
lease of space at the Building; (10) the proposed assignee
or sublessee is a competitor or Affiliate of Landlord; (11)
the proposed assignee or sublessee is then, or has within
twelve months immediately preceding Tenant's written request
for Landlord's consent to such Transfer been, a person or
entity with whom Landlord is dealing or has dealt regarding
the possibility of leasing space in the Building and
Landlord then has space Available For Rent in the Building
that is Comparable in Size to the Premises or the applicable
portion thereof to be sublet; or (12) the fact that the
instrument effecting the proposed Transfer is not in form
and content reasonably satisfactory to Landlord.
(g) Transfer Without Landlord Consent.
---------------------------------
Notwithstanding anything to the contrary set forth above,
Tenant may assign this Lease in its entirety or sublease all
or any portion of the Premises without the prior written
consent of Landlord to (1) any partnership, corporation or
other business entity into or with which Tenant shall be
merged, converted or consolidated in accordance with
applicable statutory provisions governing merger, conversion
or consolidation of the applicable business entity, or (2) a
partnership, corporation or other business entity which is a
direct successor to Tenant owning all or substantially all
of Tenant's business and assets provided that, in connection
with any assignment or subletting described in clauses (1)
and (2) of this Section 10.(g), (A) Tenant shall have
notified Landlord in writing prior to such assignment or
subletting, (B) at the time thereof, no Event of Default has
occurred and is continuing and no event has occurred and is
continuing which with the giving of notice or the passage of
time, or both, would constitute an Event of Default, (C) the
proposed transferee shall deliver to Landlord a written
agreement whereby it expressly assumes all of the Tenant's
obligations under this Lease; provided, however, that any
sublessee of less than all of the space in the Premises
shall be liable only for obligations under this Lease that
are properly allocable to the space subject to the
applicable Transfer (excluding, however, any obligation to
pay Rent due hereunder), (D) the proposed assignee or
sublessee shall not be an existing tenant of the Building or
an Affiliate of such tenant, (E) Tenant shall have agreed
specifically to pay over to Landlord, as additional rent,
all sums provided to be paid under the terms and conditions
of such assignment or sublease which are in excess of the
amounts otherwise required to be paid by Tenant to Landlord
pursuant to this Lease with respect to the portion of the
Premises covered by such Transfer, (F) Tenant shall have
reimbursed Landlord for all costs and expenses reasonably
incurred by Landlord (including, without limitation,
reasonable attorneys' fees) in connection with such
assignment and/or subletting, and (G) in the case of a
Transfer described in clauses (1) and (2) of this paragraph,
Tenant shall have provided Landlord with evidence reasonably
acceptable to Landlord that the proposed assignee/sublessee
has a demonstrable net worth not less than the net worth of
Tenant as of the date of such assignment or subletting. Any
assignment or subletting permitted without Landlord's prior
written consent as provided above (a "Permitted Transfer
------------------
Without Landlord Consent") shall not release Tenant from any
------------------------
of its obligations (including, without limitation, its
obligation to pay Rent) under this Lease. For the purposes
of this Section 10.(g), the term "Tenant" shall also mean a
permitted assignee or sublessee of the initial Tenant named
in this Lease.
(h) Miscellaneous. Landlord's consent to a
-------------
Transfer shall not release Tenant from performing its
obligations under this Lease, but rather Tenant and its
Transferee shall be jointly and severally liable therefor;
provided, however, that any sublessee of less than all of
the space in the Premises shall be liable only for
obligations under this Lease that are properly allocable to
the space subject to the applicable Transfer (excluding,
however, any obligation to pay Basic Rental and Tenant's
share of Excess, Tax Excess and DCURD Excess due hereunder
but including Tenant's share of Electrical Costs due
hereunder that are properly allocable to the space subject
to such Transfer). Landlord's consent to any Transfer shall
not waive Landlord's rights as to any subsequent Transfers.
If an Event of Default occurs while the Premises or any part
thereof are subject to a Transfer, then Landlord, in
addition to its other rights and/or remedies, may collect
directly from such Transferee all rents becoming due to
Tenant and apply such rents against all Rent due hereunder
(including, without limitation, all Basic Rental and
Tenant's share of Electrical Costs, Excess, Tax Excess and
DCURD Excess due hereunder). Tenant authorizes its
Transferees to make payments of
11
<PAGE>
rent directly to Landlord upon receipt of notice from
Landlord to do so. Without limiting Landlord's consent
rights and as a condition to obtaining Landlord's consent to
any proposed Transfer, (i) each sublessee must confirm in
writing that its sublease is subject and subordinate to this
Lease, and (ii) each Transferee shall agree to cause the
Premises to comply at all times with all applicable Laws
(including, without limitation, all Disability Laws
applicable to such Transferee's particular use of, or
activities or business operations conducted within, the
applicable portion(s) of the Premises or any specific
handicaps that such Transferee's employees, officers or
directors might have). Except as expressly provided in this
Lease to the contrary, no assignee or sublessee of the
Premises or any portion thereof shall have the right to
assign or sublet the Premises or any portion thereof. In the
event that, following an assignment or subletting permitted
by this Section 10, this Lease or the rights and obligations
of Tenant hereunder are terminated for any reason, Landlord
may, at its sole option, deem this Lease to be thereafter a
direct lease to the assignee or sublessee of Tenant covering
such assignee's or sublessee's premises.
INSURANCE; 11. (a) Insurance. Tenant shall at its expense procure
WAIVERS; ---------
SUBROGATION; and maintain throughout the Term the following insurance
INDEMNITY policies' (1) commercial general liability insurance in
amounts of not less than a combined single limit of
$5,000,000 (the "Initial Liability Insurance Amount"),
----------------------------------
insuring Tenant, Landlord and all other Landlord Parties (as
hereinafter defined) against all liability for injury to or
death of a person or persons or damage to property arising
from the use and occupancy of the Premises (this insurance
coverage shall include broad form property damage liability
and shall contain an exception to any pollution exclusion
which insures damage or injury arising out of heat, smoke or
fumes from a hostile fire), (2) contractual liability
insurance coverage sufficient to cover Tenant's indemnity
obligations hereunder, (3) Special Form (formerly referred
to as "All Risk") insurance (no exclusions shall be
permitted with respect to vandalism, malicious mischief,
theft and sprinkler leakage) covering the full value of
Tenant's property and improvements, and other property
(including property of others), in the Premises (in the
event there is a dispute as to the amount that comprises
full value of such property and improvements, the decision
of Landlord shall be conclusive, and evidence of this
insurance shall be provided on ACORD Form 27), (4) workers'
compensation insurance in the statutory limits and
employer's liability insurance (no "alternative" form of
coverage shall be acceptable) in an amount of not less than
$1,000,000.00 bodily injury by accident, each accident,
$1,000,000.00 bodily injury by disease, policy limit, and
$1,000,000.00 bodily injury by disease, each employee, each
(and any commercial umbrella applicable thereto) containing
a waiver of subrogation endorsement using endorsement form
WC 429394 (i.e., a waiver of subrogation endorsement) or
such other endorsement form as may be reasonably required by
Landlord, and such endorsements shall be in favor of all
Landlord Parties, (5) business income and extra expense
insurance (formerly known as "business interruption
insurance") in such amounts as will reimburse Tenant for
direct or indirect loss of earnings attributable to all
perils commonly insured against by prudent tenants or
attributable to prevention of access to the Premises or to
the Building as a result of such perils, but in no event
shall such coverage be for less than twelve (12) months of
income and expenses, (6) business automobile liability
insurance covering owned, non-owned and hired vehicles in an
amount of not less than $1,000,000 combined single limit for
bodily injury and property damage should Landlord deem such
insurance to be necessary, and (7) any other and further
insurance as Tenant, Landlord or any Landlord's Mortgagee
may require from time to time in form, amounts and for
insurance risks against which a prudent tenant would protect
itself. Not more frequently than every five (5) years, if,
in the opinion of Landlord's risk management group, the
amount of liability insurance at that time maintained by
Tenant as required by this Lease (i.e., commercial general
liability, employer's liability and/or business automobile
liability insurance) is not adequate, Landlord shall notify
Tenant of Landlord's risk management group's recommended
increase of the same and Tenant shall increase the
applicable liability insurance coverage to such recommended
amount. As used herein, the term "Landlord Parties" shall
----------------
mean (i) Landlord, (ii) any Landlord's Mortgagee, (iii) the
Building manager and any other parties which Landlord shall
deem necessary, (iv) Landlord's, Landlord's Mortgagee's and
the Building manager's respective shareholders, members,
partners and Affiliates, and (v) any directors, officers,
employees, agents or contractors of such persons or
entities. Tenant's insurance shall provide primary coverage
to Landlord when any policy issued to Landlord provides
duplicate or similar coverage, and in such
12
<PAGE>
circumstance Landlord's policy will be excess over Tenant's
policy. All property insurance policies written on behalf of
Tenant shall name all Landlord Parties as a loss payee as
their respective interests may appear, and shall contain (or
be endorsed to provide) a waiver of any subrogation rights
which Tenant's insurers may have against Landlord Parties
and against those for whom Landlord Parties are, at law,
responsible whether any such damage is caused by the act,
omission or fault of any Landlord Parties or by those for
whom any Landlord Parties are, at law, responsible. Tenant's
liability insurance shall (1) be written on an occurrence
basis on either Insurance Services Office ("ISO") form CG
---
0001 1092 or CG 0001 0695, (2) contain standard commercial
general liability "other insurance" wording, unmodified in
any way that would make it excess over or contributory with
an additional insured's own commercial general liability
insurance coverage, and (3) be primary and noncontributory
to any other insurance carried by Landlord or any other
Landlord Parties. All commercial general liability insurance
maintained by Tenant as required by this Lease (and any
commercial umbrella applicable thereto) shall be endorsed
using ISO form CG 2404 1093 (i.e., a waiver of subrogation
endorsement) and ISO form CG 2026 1185, and both such
endorsements shall be unmodified and shall be in favor of
all Landlord Parties. No deductible or self-insured
retention in excess of $10,000.00 shall apply to any
liability insurance of Tenant without the prior written
consent of Landlord. All policies shall be taken out with
insurers acceptable to Landlord, licensed in the State of
Texas and with a rating of (i) "A-" "XII" or better as set
forth in the most current issue of Best's Key Rating Guide,
and/or (ii) "A-" or better as set forth in the most current
issue of Standard & Poor Insurance Solvency Review. Tenant
agrees that certificates of insurance (or, if required by
Landlord or any Landlord's Mortgagee, certified copies of
each such insurance policy), in form and content acceptable
to Landlord, will be delivered to Landlord as soon as
practicable after the placing of the required insurance, but
in no event later than five (5) days prior to which Tenant
takes possession of all or any part of the Premises. All
policies shall indicate that at least thirty (30) days prior
written notice shall be delivered to Landlord and any
Landlord's Mortgagee by the insurer prior to termination,
cancellation or change of such insurance. Copies of
endorsements must be attached to all certificates delivered
by Tenant to Landlord as required by this Lease and Landlord
Parties must be identified, as applicable, as the
"additional insured" or "beneficiary" on such certificates.
Landlord must be notified in writing immediately by Tenant
of claims against Tenant that might cause a reduction below
seventy-five percent (75%) of any aggregate limit of any
insurance policy maintained by Tenant as required by this
Lease. Any deductible selected by Tenant shall be the sole
responsibility of Tenant.
(b) Waiver of Negligence Claims No Subrogation.
------------------------------------------
Landlord shall not be liable to Tenant or those claiming by,
through, or under Tenant for any injury to or death of any
person or persons or the damage to or theft, destruction,
loss, or loss of use of any property or inconvenience (a
"Loss") caused by casualty, theft, fire, third parties, or
----
any other matter (including Losses arising through repair or
alteration of any part of the Building, or failure to make
repairs, or from any other cause), regardless of whether the
negligence of any party caused such Loss in whole or in
part. Landlord and Tenant each waives any claim it might
have against the other for any damage to or theft,
destruction, loss, or loss of use of any property, to the
extent the same is insured against under any insurance
policy that covers the Building, the Premises, Landlord's or
Tenant's fixtures, personal property, leasehold
improvements, or business, or, in the case of Tenant's
waiver, is required to be insured against under the terms
hereof, regardless of whether the negligence or fault of the
other party caused such loss; however, Landlord's waiver
shall not include any deductible amounts on insurance
policies carried by Landlord or apply to any coinsurance
penalty which Landlord might sustain. Each party shall cause
its insurance carrier to endorse all applicable policies
waiving the carrier's rights of recovery under subrogation
or otherwise against the other party.
(c) Indemnity. Subject to Section 11.(b), Tenant
---------
shall defend, indemnify, and hold harmless Landlord and its
agents from and against all claims, demands, liabilities,
causes of action, suits, judgments, and expenses (including
attorneys' fees) for any Loss arising from any occurrence on
the Premises or from Tenant's failure to perform its
obligations under this Lease (other than a Loss arising from
the sole or gross negligence of Landlord or its agents),
even though caused or alleged to be caused by the joint,
comparative, or concurrent negligence or fault of Landlord
or its agents, and even though any such claim, cause of
13
<PAGE>
action, or suit is based upon or alleged to be based upon
the strict liability of Landlord or its agents. THIS
INDEMNITY PROVISION IS INTENDED TO INDEMNIFY LANDLORD AND
ITS AGENTS AGAINST THE CONSEQUENCES OF THEIR OWN NEGLIGENCE
OR FAULT AS PROVIDED ABOVE WHEN LANDLORD OR ITS AGENTS ARE
JOINTLY, COMPARATIVELY, OR CONCURRENTLY NEGLIGENT WITH
TENANT. This indemnity provision shall survive termination
or expiration of this Lease.
(d) Miscellaneous. If Tenant or any contractor of
-------------
Tenant performs any work on any portion or portions of the
Premises, prior to the commencement of any such work, Tenant
shall deliver to Landlord certificates issued by insurance
companies licensed to do business in the State of Texas, in
form and content acceptable to Landlord, evidencing that
commercial general liability, workers' compensation,
employer's liability, automobile liability and other
insurance as required by Landlord and any Landlord's
Mortgagee, in amounts and with companies reasonably
satisfactory to Landlord, are in force and effect and
maintained by all contractors and subcontractors engaged by
Tenant or any contractor of Tenant to perform such work, and
name all Landlord Parties as additional insureds. Tenant
agrees that in the event of damage or destruction to the
leasehold improvements in the Premises covered by insurance
required to be taken out by Tenant pursuant to this Section,
Tenant will use the proceeds of such insurance for the
purpose of repairing or restoring such leasehold
improvements. In the event of (1) damage or destruction to
the Building entitling Landlord or Tenant to terminate this
Lease pursuant to Section 15 below, and (2) a termination of
this Lease pursuant to such Section, then (i) if the
Premises have also been damaged, Tenant will pay to Landlord
all of Tenant's insurance proceeds relating to the leasehold
improvements in the Premises, and (ii) if the Premises have
not been damaged, Tenant will deliver to Landlord, in
accordance with the provisions of this Lease, possession of
the Premises together with all leasehold improvements
located therein except as otherwise expressly provided in
this Lease.
(e) Landlord Indemnity. Landlord shall be liable
------------------
for, and shall indemnify, defend, protect and hold Tenant
and Tenant's partners and their respective officers,
directors, employees, agents, successors and assigns
(collectively, the "Tenant Indemnitees") harmless from and
------------------
against, any and all claims, demands, actions, damages
(excluding, however, consequential or special damages),
losses, liabilities, judgments, costs and expenses
(including, without limitation, attorneys' fees and court
costs) (each a "Claim" and collectively the "Claims"), to
----- ------
the extent (i) arising or resulting from the sole or gross
negligence or willful misconduct of Landlord or any Landlord
Indemnitees, and (ii) not covered or required to be covered
by Tenant's insurance described in Section 11.(a) above;
provided, however, such indemnification by Landlord shall
not include Claims waived by Tenant in Section 11.(b) above
and any Claim to the extent caused by or resulting from the
negligence, gross negligence or willful misconduct of Tenant
or its assignees, sublessees, officers, directors,
employees, agents, servants, contractors, customers or
invitees.
SUBORDINATION 12. (a) Subordination. This Lease shall be
ATTORNMENT; -------------
NOTICE TO Subordinate to any deed of trust, mortgage, or other
LANDLORD'S security instrument (a "Mortgage"), or any ground lease,
MORTGAGEE --------
master lease, or primary lease (a "Primary Lease"), that now
------- -----
or hereafter covers all or any part of the Premises (the
mortgagee under any Mortgage or the lessor under any Primary
Lease is referred to herein as "Landlord's Mortgagee");
---------- ---------
provided, however, that the foregoing subordination in
respect of any Primary Lease or Mortgage placed on the
Building after the Lease Date shall not become effective
until and unless the lessor under such Primary Lease or the
holder of such Mortgage delivers to Tenant a non-disturbance
agreement (a "Non-Disturbance Agreement") which provides
-------------------------
that if Tenant is not then in default under, or in breach of
any provision of, this Lease, Landlord's Mortgagee will not
disturb Tenant's right of occupancy of the Premises (i.e.,
Tenant's quiet enjoyment rights as more particularly
provided in Section 25(i) below) in the event of a
foreclosure of any such Mortgage or a termination of any
such Primary Lease (a Non-Disturbance Agreement may also
include Tenant's agreement to attorn as set forth below and
will contain such other provisions as Landlord's Mortgagee
shall require in connection therewith). Although the
subordination in the immediately preceding sentence shall be
self-operating, Tenant, or its successors in interest,
shall, upon Landlord's request, execute and deliver upon
14
<PAGE>
demand any and all Non-Disturbance Agreements delivered to
Tenant subordinating this Lease to such Primary Lease or
Mortgage. Tenant also agrees that any Landlord's Mortgagee
may elect (which election shall be revocable) to have this
Lease superior to its Primary Lease or the lien of its
Mortgage and, in the event of such election and upon
notification by such Landlord's Mortgagee to Tenant to that
effect, this Lease shall be deemed superior to the said
Primary Lease or Mortgage, whether this Lease is dated prior
to or subsequent to the date of such Primary Lease or
Mortgage. Although the subordination in the immediately
preceding sentence shall be self-operating, Tenant, or its
successors in interest, shall, upon Landlord's request,
execute and deliver upon the demand of Landlord any and all
instruments desired by Landlord, subordinating, in the
manner reasonably requested by Landlord, any such Primary
Lease or Mortgage to this Lease. If Tenant fails to execute
and deliver to Landlord any Non-Disturbance Agreement or any
such subordination instrument delivered to Tenant for
Tenant's execution within ten (10) business days after
Tenant's receipt of the same, then (1) such failure shall
constitute an Event of Default until such time as the
applicable instrument has been executed by Tenant and
delivered to Landlord, (2) Tenant shall be deemed to have
agreed to all of the terms and provisions of such Non-
Disturbance Agreement or such subordination instrument, and
(3) Tenant shall thereafter be estopped from disclaiming any
of the obligations, benefits and burdens set forth therein
including, without limitation, (i) the subordination of this
Lease to any Mortgage, Primary Lease or similar instruments,
(ii) any non-disturbance rights provided to Tenant therein,
and (iii) any attornment agreements of Tenant set forth
therein. Landlord is hereby irrevocably appointed and
authorized as agent and attorney-in-fact of Tenant, coupled
with an interest, to execute all such Non-Disturbance
Agreements and subordination instruments in the event Tenant
fails to execute said instruments within ten (10) business
days after Tenant's receipt of the same.
(b) Attornment. Tenant shall attorn to any party
----------
succeeding to Landlord's interest in the Premises, whether
by purchase, foreclosure, deed in lieu of foreclosure, power
of sale, termination of lease, or otherwise, upon such
party's request, and shall execute such agreements
confirming such attornment as such party may reasonably
request.
(c) Notice to Landlord's Mortgagee. Tenant shall
------------------------------
not seek to enforce any remedy it may have for any default
on the part of the Landlord without first giving written
notice by certified mail, return receipt requested,
specifying the default in reasonable detail, to any
Landlord's Mortgagee whose address has been given to Tenant,
and affording such Landlord's Mortgagee a reasonable
opportunity to perform Landlord's obligations hereunder.
(d) Non-Disturbance Agreement from Current
--------------------------------------
Landlord's Mortgagee. Landlord shall use its reasonably best
--------------------
efforts to obtain a Non-Disturbance Agreement from the
Landlord's Mortgagee whose Mortgage currently covers the
Building. Upon the delivery to Tenant of multiple originals
of a Non-Disturbance Agreement executed by such Landlord's
Mortgagee and the other party or parties thereto (other than
Tenant), Tenant shall, within ten (10) days after Tenant's
receipt of the same, execute each of the same and return all
but one of such originals to Landlord at Landlord's address
for notices set forth in this Lease.
RULES AND 13. Tenant shall comply with the rules and regulations
REGULATIONS of the Building which are attached hereto as Exhibit B.
---------
Landlord may, from time to time, change such rules and
regulations for the safety, care, or cleanliness of the
Building and related facilities, provided that such changes
are applicable to all tenants of the Building and will not
unreasonably interfere with Tenant's use of the Premises.
Tenant shall be responsible for the compliance with such
rules and regulations by its employees, agents, and
invitees.
CONDEMNATION 14. (a) Taking - Landlord's and Tenant's Rights. If
-------- ------------------------------
any part of the Building is taken by right of eminent domain
or conveyed in lieu thereof (a "Taking"), and such Taking
------
prevents Tenant from conducting its business in the Premises
in a manner reasonably comparable to that conducted
immediately before such Taking, then Landlord may, at its
expense, relocate Tenant to office space reasonably
comparable to the Premises, provided that Landlord notifies
Tenant of its intention to do so within 30 days after the
Taking. Such relocation may be for a portion of the
remaining Term or the entire Term. Landlord shall complete
any such relocation within 180 days after Landlord has
notified Tenant
15
<PAGE>
of its intention to relocate Tenant. If Landlord does not
elect to relocate Tenant following such Taking, then Tenant
may terminate this Lease as of the date of such Taking by
giving written notice to Landlord within 60 days after the
Taking, and Rent shall be apportioned as of the date of such
Taking. If Landlord does not relocate Tenant and Tenant does
not terminate this Lease, then Rent shall be abated on a
reasonable basis as to that portion of the Premises rendered
untenantable by the Taking.
(b) Taking - Landlord's Rights. If any material
--------------------------
portion, but less than all, of the Building becomes subject
to a Taking, or if Landlord is required to pay any of the
proceeds received for a Taking to Landlord's Mortgagee, then
this Lease, at the option of Landlord, exercised by written
notice to Tenant within 30 days after such Taking, shall
terminate and Rent shall be apportioned as of the date of
such Taking. If Landlord does not so terminate this Lease
and does not elect to relocate Tenant, then this Lease will
continue, but if any portion of the Premises has been taken,
Basic Rental shall abate as provided in the last sentence of
Section 14.(a).
(c) Award. If any Taking occurs, then Landlord
-----
shall receive the entire award or other compensation for the
Land, the Building, and other improvements taken, and Tenant
may separately pursue a claim against the condemnor for the
value of Tenant's personal property which Tenant is entitled
to remove under this Lease, moving costs, loss of business,
and other claims it may have.
FIRE OR OTHER 15. (a) Repair Estimate. If the Premises or the
CASUALTY ---------------
Building are damaged by fire or other casualty (a
"Casualty"), Landlord shall, within 60 days after such
--------
Casualty, deliver to Tenant a good faith estimate (the
"Damage Notice") of the time needed to repair the damage
-------------
caused by such Casualty.
(b) Landlord's and Tenant's Rights. In the event
------------------------------
the Premises or the Building are damaged by a Casualty and
the insurance proceeds have been made available therefor by
the holder or holders of any Mortgages or the lessor under
any Primary Lease, the damage shall be repaired by and at
the expense of Landlord to the extent of such insurance
proceeds available therefor, provided such repairs can, in
Landlord's sole opinion, be made within one hundred twenty
(120) days after the occurrence of such damage without the
payment of overtime or other premiums. Until such repairs
are completed, Rent shall be abated effective as of the date
of such fire or other casualty in proportion to the part of
the Premises which is unusable by Tenant in the conduct of
its business. If repairs cannot, in Landlord's sole opinion,
be made within one hundred twenty (120) days after the
occurrence of such damage without the payment of overtime or
other premiums, Landlord may, at its option, make them
within a reasonable time, and in such event, this Lease
shall continue in effect and Rent shall be abated in the
manner provided in the immediately preceding sentence. In
the case of repairs which, in Landlord's opinion, cannot be
made within such one hundred twenty (120) day period, or in
the event that sufficient insurance proceeds for repairs are
not available to Landlord, Landlord shall notify Tenant
within sixty (60) days of the date of occurrence of such
damage as to whether or not Landlord will make such repairs.
If Landlord elects not to make such repairs which cannot be
made within such one hundred twenty (120) day period, or for
which sufficient insurance proceeds are not available to
Landlord, then either party may, by written notice to the
other, terminate this Lease as of the date of the occurrence
of such damage, and Landlord shall have no liability to
Tenant for failure to make such repairs except for abatement
of Rent. If such repairs are indicated in the applicable
Damage Notice as repairs requiring more than 270 days to be
completed and Landlord elects to make such repairs, Tenant
shall have the right to terminate this Lease by giving
Landlord written notice thereof within 10 days after
Tenant's receipt of the Damage Notice. If such repairs are
indicated in the applicable Damage Notice as repairs
requiring 270 days or less to be completed, and if such
repairs have not been completed such that Landlord has, on
or before the 270th day after the occurrence of such
Casualty, delivered possession of the Premises to Tenant
repaired as required by this Lease, then Tenant shall have
the right to terminate this Lease effective as of the 30th
day after Landlord's receipt of written notice of such
termination; provided, however, that any such termination
shall be of no force and effect if Landlord delivers
possession of the Premises to Tenant repaired as required by
this Lease prior to the expiration of such 30 day period. If
such repairs are indicated in the applicable Damage Notice
as repairs
16
<PAGE>
requiring more than 270 days to be completed and Tenant does
not terminate this Lease as provided hereby, Tenant shall
have no termination right in the event such repairs are not
completed by the 270th day after the occurrence of such
Casualty or by the estimated repair completion date set
forth in the applicable Damage Notice. Except as provided in
this Section 15.(b), there shall be no abatement of Rent and
no liability of Landlord by reason of any injury to or
interference with Tenant's business or property arising from
the making of any repairs, alterations or improvements in or
to any portion of the Building and/or the Premises, or in or
to fixtures, appurtenances and equipment located therein,
and, in any event, there shall be no liability of Landlord
should repairs require more than one hundred twenty (120)
days for completion. Notwithstanding anything to the
contrary contained herein, if (i) the Premises are damaged
by a Casualty during the last 9 months of the Term and
Tenant has not exercised an extension option available to it
pursuant to the Exhibit F attached to this Lease, and (ii)
the time to repair the damage caused by such Casualty set
forth in the applicable Damage Notice is more than 30 days,
then Tenant shall have the right to terminate this Lease
effective as of the date of such damage by giving Landlord
written notice thereof within 10 business days after
Tenant's receipt of the applicable Damage Notice.
(c) Landlord's Rights. If a Casualty damages a
-----------------
material portion of the Building, and Landlord makes a good
faith determination that restoring the Premises would be
uneconomical, or if Landlord is required to pay any
insurance proceeds arising out of the Casualty to Landlord's
Mortgagee, then Landlord may terminate this Lease by giving
written notice of its election to terminate within 30 days
after the Damage Notice has been delivered to Tenant, and
Basic Rental hereunder shall be abated as of the date of the
Casualty.
(d) Repair Obligation. If neither party elects to
-----------------
terminate this Lease following a Casualty, then Landlord
shall, within a reasonable time after such Casualty,
commence to repair the Building and the Premises and shall
proceed with reasonable diligence to restore the Building
and Premises to substantially the same condition as they
existed immediately before such Casualty; however, Landlord
shall not be required to repair or replace any part of the
furniture, equipment, fixtures, and other improvements which
may have been placed by, or at the request of, Tenant or
other occupants in the Building or the Premises, and
Landlord's obligation to repair or restore the Building or
Premises shall be limited to the extent of the insurance
proceeds actually received by Landlord for the Casualty in
question.
TAXES 16. Tenant shall be liable for all taxes levied or
assessed against personal property, furniture, or fixtures
placed by Tenant in the Premises. If any taxes for which
Tenant is liable are levied or assessed against Landlord or
Landlord's property and Landlord elects to pay the same, or
if the assessed value of Landlord's property is increased by
inclusion of such personal property, furniture or fixtures
and Landlord elects to pay the taxes based on such increase,
then Tenant shall pay to Landlord, within thirty (30) days
after Tenant's receipt of written demand therefor, that part
of such taxes for which Tenant is primarily liable
hereunder.
EVENTS OF DEFAULT 17. Each of the following occurrences shall constitute
an "Event of Default":
-------- -------
(a) Tenant's failure to pay Rent, or any other
sums due from Tenant to Landlord under the Lease (or any
other lease executed by Tenant for space in the Building),
which failure continues for three (3) days after Tenant
receives written notice specifying that the applicable
payment was not made when such payment was due;
(b) except for a failure covered by subsection
17.(a) above or subsection 17.(f) below, Tenant's failure to
perform, comply with, or observe any other agreement or
obligation of Tenant under this Lease (or any other lease
executed by Tenant for space in the Building) where such
failure continues for ten (10) days after written notice to
Tenant (or, in the case of an emergency, as soon as
practicable after receipt of written or telephonic notice
thereof to Tenant), provided, however, that if such failure
(other than an emergency situation as indicated above) is
curable but cannot by its nature be cured within said ten
(10) day period, Tenant shall not be in default hereunder so
long as Tenant commences curative action within such ten
(10) day period and diligently and continuously pursues the
curative action so as to fully and completely cure the
failure within
17
<PAGE>
sixty (60) days after such written notice of default, but in
any event prior to the time such failure would result in a
violation of applicable Laws or a default by Landlord under
any Mortgage or Primary Lease;
(c) the filing of a petition by or against Tenant
(the term "Tenant" shall include, for the purpose of this
Section 17.(c), any guarantor of the Tenant's obligations
hereunder) (1) in any bankruptcy or other insolvency
proceeding; (2) seeking any relief under any state or
federal debtor relief law; (3) for the appointment of a
liquidator or receiver for all or substantially all of
Tenant's property or for Tenant's interest in this Lease; or
(4) for the reorganization or modification of Tenant's
capital structure;
(d) Tenant shall desert, vacate (as defined in
Section 25.(s) below) or fail to occupy at least fifty
percent (50%) of the Premises for a period of twelve (12)
consecutive months;
(e) the admission by Tenant that it cannot meet
its obligations as they become due or the making by Tenant
of an assignment for the benefit of its creditors; and
(f) notwithstanding Section 17.(a) and 17.(b)
above, the third failure (and any subsequent failure) in any
twelve (12) month period of Tenant to perform, comply with,
or observe any agreement or obligation of Tenant under this
Lease (or any other lease executed by Tenant for space in
the Building), no notice being required for any third such
failure and any subsequent failures.
REMEDIES 18. Upon any Event of Default, Landlord may, in
addition to all other rights and remedies afforded Landlord
hereunder or by law or equity, take any of the following
actions:
(a) Terminate this Lease by giving Tenant written
notice thereof, in which event, Tenant shall pay to Landlord
the sum of (1) all Rent accrued hereunder through the date
of termination, (2) all amounts due under Section 19.(a),
and (3) an amount equal to (A) the total Rent that Tenant
would have been required to pay for the remainder of the
Term discounted to present value at a per annum rate equal
to the "Prime Rate" as published on the date this Lease is
terminated by The Wall Street Journal, Southwest Edition, in
its listing of "Money Rates", minus (B) the then present
fair rental value of the Premises for such period, similarly
discounted; or
(b) Terminate Tenant's right to possession of the
Premises without terminating this Lease by giving written
notice thereof to Tenant, in which event Tenant shall pay to
Landlord (1) all Rent and other amounts accrued hereunder to
the date of termination of possession, (2) all amounts due
from time to time under Section 19.(a), and (3) all Rent and
other sums required hereunder to be paid by Tenant during
the remainder of the Term, diminished by any net sums
thereafter received by Landlord through reletting the
Premises during such period. Landlord shall use reasonable
efforts to relet the Premises on such terms and conditions
as Landlord in its sole discretion may determine (including
a term different from the Term, rental concessions, and
alterations to, and improvement of, the Premises); however,
Landlord shall not be obligated to relet the Premises before
leasing other portions of the Building. Landlord shall not
be liable for, nor shall Tenant's obligations hereunder be
diminished because of, Landlord's failure to relet the
Premises or to collect rent due for such reletting. To the
extent Landlord is obligated under Texas law to mitigate its
damages following a default by Tenant under this Lease,
Landlord may satisfy such obligation by retaining a real
estate broker (such broker can be the same as the broker
that is leasing the other space in the Building which is
available for rent) and acknowledging that all portions of
the Premises as available for lease; provided, however, in
no event shall Landlord be obligated to lease all or any
portion(s) of the Premises unless there is/are no other
comparable space/spaces available for lease at the Building
or any other property owned by Landlord or any Affiliate of
Landlord within the City of Irving/Las Colinas. Tenant shall
not be entitled to the excess of any consideration obtained
by reletting over the Rent due hereunder. Reentry by
Landlord in the Premises shall not affect Tenant's
obligations hereunder for the unexpired Term; rather,
Landlord may, from time to time, bring action against Tenant
to collect amounts due by Tenant, without the necessity of
Landlord's waiting until the expiration of the Term. Unless
Landlord delivers written notice to Tenant expressly stating
that it has elected to terminate this Lease, all actions
18
<PAGE>
taken by Landlord to exclude or dispossess Tenant of the
Premises shall be deemed to be taken under this Section
18.(b). If Landlord elects to proceed under this Section
18.(b), it may at any time elect to terminate this Lease
under Section 18.(a).
Additionally, without notice, Landlord may, as
permitted by the Texas Property Code, alter locks or other
security devices at the Premises to deprive Tenant of access
thereto, and Landlord shall not be required to provide a new
key or right of access to Tenant.
PAYMENT BY 19. (a) Payment by Tenant. Upon any default by
TENANT; NON- -----------------
WAIVER Tenant, Tenant shall pay to Landlord all costs incurred by
Landlord (including court costs and reasonable attorneys'
fees and expenses) in (1) obtaining possession of the
Premises, (2) removing and storing Tenant's or any other
occupant's property, (3) repairing, restoring, altering,
remodeling, or otherwise putting the Premises into condition
acceptable to a new tenant, (4) if Tenant is dispossessed of
the Premises and this Lease is not terminated, reletting all
or any part of the Premises (including brokerage
commissions, cost of tenant finish work, and other costs
incidental to such reletting), (5) performing Tenant's
obligations which Tenant failed to perform, and (6)
enforcing, or advising Landlord of, its rights, remedies,
and recourses arising out of the Event of Default.
(b) No Waiver. Landlord's acceptance of Rent
---------
following an Event of Default shall not waive Landlord's
rights regarding such Event of Default. No waiver by
Landlord of any violation or breach of any of the terms
contained herein shall waive Landlord's rights regarding any
future violation of such term or violation of any other
term.
LANDLORD'S LIEN 20. Intentionally deleted.
SURRENDER OF 21. No act by Landlord shall be deemed an acceptance
PREMISES of a surrender of the Premises, and no agreement to accept a
surrender of the Premises shall be valid unless the same is
made in writing and signed by Landlord. At the expiration or
termination of this Lease, Tenant shall deliver to Landlord
the Premises with all improvements located thereon (other
than those improvements which Landlord has requested in
writing that Tenant remove subject to Section 8 above) in
good repair and condition, reasonable wear and tear and
condemnation and fire or other casualty damage not caused by
Tenant (as to which Sections 14 and 15 shall control)
excepted, and shall deliver to Landlord all keys to the
Premises. Provided that Tenant has performed all of its
obligations hereunder, Tenant may remove all unattached
trade fixtures, furniture, and personal property placed in
the Premises by Tenant (but Tenant shall not remove any such
item which was paid for, in whole or in part, by Landlord
unless Landlord has requested in writing that Tenant remove
the same as contemplated by the immediately following
sentence). Additionally, Tenant shall, at Tenant's sole cost
and expense and within thirty (30) days after Tenant's
receipt of Landlord's written request for such removal,
remove such alterations, additions, improvements, trade
fixtures, equipment, wiring, and furniture as Landlord may
request in writing. Tenant shall reasonably repair all
damage caused by such removal. All items not so removed
shall be deemed to have been abandoned by Tenant and may be
appropriated, sold, stored, destroyed, or otherwise disposed
of by Landlord without notice to Tenant and without any
obligation to account for such items. The provisions of this
Section 21 shall survive the end of the Term.
HOLDING OVER 22. If Tenant fails to vacate the Premises at the end
of the Term, then Tenant shall be a tenant at will and, in
addition to all other damages (both consequential as well as
direct) and remedies to which Landlord may be entitled for
such holding over, Tenant shall pay, in addition to the
other Rent, a daily Basic Rental equal to the greater of (a)
150% of the daily Basic Rental payable during the last month
of the Term, or (b) the prevailing rental rate in the
Building for similar space. The provisions of this paragraph
shall not in any way exclude Landlord's right of re-entry or
any other right under this Lease.
CERTAIN RIGHTS 23. Provided that the exercise of such rights does not
RESERVED BY unreasonably interfere with Tenant's occupancy of the
LANDLORD Premises, Landlord shall have the following rights:
(a) to decorate and to make inspections, repairs,
alterations, additions, changes, or improvements, whether
structural or otherwise, in and
19
<PAGE>
about the Building, or any part thereof; for such purposes,
to enter upon the Premises and, during the continuance of
any such work, to temporarily close doors, entryways, public
space, and corridors in the Building; to interrupt or
temporarily suspend Building services and facilities; and to
change the arrangement and location of entrances or
passageways, doors, and doorways, corridors, elevators,
stairs, restrooms, or other public parts of the Building;
(b) to take such reasonable measures as Landlord
deems advisable for the security of the Building and its
occupants, including without limitation searching all
persons entering or leaving the Building; evacuating the
Building for cause, suspected cause, or for drill purposes;
temporarily denying access to the Building; and closing the
Building after normal business hours and on Saturdays,
Sundays, and holidays, subject, however, to (i) Tenant's
right to enter when the Building is closed after normal
business hours under such reasonable regulations as Landlord
may prescribe from time to time which may include by way of
example, but not of limitation, that persons entering or
leaving the Building, whether or not during normal business
hours, identify themselves to a security officer by
registration or otherwise and that such persons establish
their right to enter or leave the Building, and (ii)
Tenant's right, in the event Tenant leases two (2) or more
full floors of the Building pursuant to one or more of the
expansion rights set forth in the Exhibit G attached hereto
and after delivering to Landlord a written request to have
the following access rights, to enter the fire escape
stairwell of the Building for the sole purpose of gaining
access to another full floor occupied by Tenant, which right
is contingent upon Tenant paying to Landlord, prior to the
commencement of the necessary work, all costs incurred or to
be incurred by Landlord in connection with providing Tenant
with this access right within the Building including,
without limitation, all expenses incurred or to be incurred
to provide for restriction(s) to access to other floors of
the Building as well as restriction(s) to access to Tenant-
occupied floors;
(c) to change the name by which the Building is
designated; and
(d) to enter the Premises at all reasonable hours
(and, in the event of an emergency, at any time) for the
purpose of examining or inspecting the same, to supply
janitorial services and any other services to be provided by
Landlord to Tenant hereunder, to show the same to
prospective purchasers, lenders, or tenants, to make such
alterations, repairs, improvements or additions, whether
structural or otherwise, to the Premises or to the Building
as Landlord may deem necessary or desirable, and to enforce
any of Landlord's rights provided in this Lease. Landlord
may enter by means of a master key without liability to
Tenant except for any failure to exercise due care for
Tenant's property and without affecting this Lease.
SUBSTITUTION 24. (a) From time to time during the Term, Landlord
SPACE may substitute for the Premises other space that has an area
at least equal to that of the Premises (or for a portion of
the Premises if all portions of the Premises are not
contiguous and as long as the Substitution Space [as
hereinafter defined] has an area equal to or greater than
that of the portion of the Premises being substituted) and
is located in the Building (the "Substitution Space"). The
------------ -----
Substitution Space may contain a portion of the former
Premises. Notwithstanding anything to the contrary contained
in this Section 24.(a), (1) Landlord shall have no right to
relocate the Premises (or any portion(s) thereof) during any
period of time in which Tenant has any of the expansion
rights or preferential rights to lease other space in the
Building as provided in the Exhibit G attached to this
---------
Lease, (2) Landlord shall have no right to substitute other
space in the Building for an entire floor of the Building
occupied by Tenant unless the Substitution Space is also an
entire floor of the Building, (3) except as provided in
subpart (4) below, if Tenant occupies space on two or more
entire contiguous floors of the Building and Landlord is
electing to relocate one or more of such entire floors, the
Substitution Space must consist of the same number of
contiguous floors as are being relocated by Landlord or, if
only one of such entire floors of the Building is being
relocated, the Substitution Space must be contiguous to and
above or below another full floor of the Building then
occupied by Tenant which is not being relocated, and (4) if
Tenant occupies all of the 2nd and 3rd floors of the
Building or all of the 2nd, 3rd, and 4th floors of the
Building, Landlord shall have no right to relocate the
Premises (or any portion(s) thereof) located on such floors
during the period of such occupancy by Tenant.
(b) If Landlord exercises such right by giving
Tenant notice
20
<PAGE>
thereof (a "Substitution Notice") at least 60 days before
------------ ------
the effective date of such substitution, then (1) the
description of the Premises shall be modified accordingly;
and (2) all of the terms and conditions of this Lease shall
apply to the Substitution Space and the remaining portions
of the Premises, if any, except that if the then unexpired
balance of the Term shall be less than eighteen (18) months
but not less than nine (9) months, then the Term shall be
extended so that the Term shall expire on the last day of
the eighteenth (18th) month following the Substitution
Effective Date (defined below). Each Substitution Notice
must identify the portion(s) of the Premises to be affected
by the applicable substitution. Subject to adjustment as
provided in the immediately following sentence, the
effective date of such substitution (the "Substitution
------------
Effective Date.") shall be either (i) the date specified in
--------------
the applicable Substitution Notice, or (ii) if Landlord is
required to perform tenant finish work to the Substitution
Space under Section 24.(c) below, the date on which Landlord
tenders possession of the Substitution Space to Tenant with
such tenant finish work substantially completed. However, if
Landlord is delayed in performing such tenant finish work by
actions or inaction of Tenant or its officers, employees,
architects, consultants, contractors, workmen, mechanics,
engineers, space planners or any other agents or
representatives of Tenant (whether due to any requested
changes to the plans and specifications for such work by
Tenant or otherwise), then the Substitution Effective Date
shall not be extended and Tenant shall pay Rent for the
Substitution Space beginning on the date specified in the
applicable Substitution Notice.
(c) Tenant may either accept possession of the
Substitution Space in its "as is" condition as of the
Substitution Effective Date or require Landlord to alter the
Substitution Space in such a manner so as to cause such
Substitution Space (including, without limitation, the
leasehold improvements therein) to be in a condition
comparable to the condition, as of the date of the
Substitution Notice, of the portion(s) of the Premises being
substituted. Tenant shall deliver to Landlord written notice
of its election within ten (10) business days after the
applicable Substitution Notice has been delivered to Tenant.
If Tenant fails to timely deliver notice of its election or
if an Event of Default exists at the time of any such
election, then Tenant shall be deemed to have elected to
accept possession of the Substitution Space in its "as is"
condition. If Tenant timely elects to require Landlord to
alter the Substitution Space as provided by this Section,
then (1) Landlord shall alter the Substitution Space in such
a manner so as to cause such Substitution Space (including,
without limitation, the leasehold improvements therein) to
be in a condition comparable to the condition, as of the
date of the Substitution Notice, of the portion(s) of the
Premises being substituted, and (2) Tenant shall continue to
occupy the Premises (upon all of the terms of this Lease)
until the Substitution Effective Date.
(d) Tenant shall, on the date Landlord tenders
possession of the Substitution Space to Tenant (with the
tenant improvements, if any are required by this Section,
substantially completed), (i) move its business operations
from the Premises (or the applicable portion(s) of the
Premises if a partial substitution is permitted hereby) into
the Substitution Space, and (ii) surrender possession of the
Premises (or the substituted portion(s) thereof, if
applicable) in accordance with Section 21 above. If Tenant
occupies the Premises (or the substituted portion(s)
thereof, if applicable) after the date Landlord tenders
possession of the Substitution Space to Tenant (with the
tenant improvements, if any are required by this Section,
substantially completed), Tenant's occupancy of the Premises
shall be a tenancy at will and, without limiting all other
rights and remedies available to Landlord (including,
without limitation, the filing of a forcible detainer suit),
Tenant shall pay Basic Rental for the Premises (or the
substituted portion(s) thereof, if applicable) as provided
in Section 22 and all other Rent due therefor until such
occupancy ends, and such amounts shall be in addition to the
Rent due for the Substitution Space.
(e) If Landlord exercises its substitution right,
then Landlord shall, at Landlord's sole cost and expense,
move Tenant's furniture, equipment, supplies and telephone
equipment from the Premises (or applicable portion(s)
thereof) to the Substitution Space. Landlord shall also
reimburse Tenant for reprinting Tenant's stationery of the
same quality and quantity of Tenant's stationery supply on
hand immediately prior to Landlord's notice to Tenant of the
exercise of this relocation right. If the Substitution Space
contains more square footage than the Premises being
relocated, and if such relocated Premises were carpeted,
Landlord shall supply and install an equal amount of
carpeting of the
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<PAGE>
same or equivalent quality and color.
MISCELLANEOUS 25. (a) Landlord Transfer. Landlord may transfer, in
-------- --------
whole or in part, the Building and any of its rights under
this Lease. If Landlord assigns its rights under this Lease,
then Landlord shall thereby be released from any further
obligations hereunder, subject to Section 6.
(b) Landlord's Liability. The liability of
---------- ---------
Landlord to Tenant for any default by Landlord under the
terms of this Lease shall be limited to Tenant's actual
direct, but not consequential, damages therefor and shall be
recoverable from the interest of Landlord in the Building
and the Land, and Landlord shall not be personally liable
for any deficiency except for the return of the Security
Deposit if Landlord is not released from its liability to
return the same as provided in Section 6 above. This section
shall not be deemed to limit or deny any remedies which
Tenant may have in the event of default by Landlord
hereunder which do not involve the personal liability of
Landlord.
(c) Force Majeure. Other than for Tenant's
-------------
monetary obligations under this Lease and obligations which
can be cured by the payment of money (e.g., maintaining
insurance), whenever a period of time is herein prescribed
for action to be taken by either party hereto, such party
shall not be liable or responsible for, and there shall be
excluded from the computation for any such period of time,
any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental laws, regulations, or
restrictions, or any other causes of any kind whatsoever
which are beyond the control of such party.
(d) Brokerage. Landlord and Tenant each warrant to
---------
the other that it has not dealt with any broker or agent in
connection with the negotiation or execution of this Lease
other than Landlord's Broker and Tenant's Broker. Tenant and
Landlord shall each indemnify the other against all costs,
expenses, attorneys' fees, and other liability for
commissions or other compensation claimed by any broker or
agent claiming the same by, through, or under the
indemnifying party.
(e) Estoppel Certificates. From time to time,
-------- ------------
Tenant shall furnish to any party designated by Landlord,
within ten (10) business days after Landlord has made a
request therefor, a certificate signed by Tenant confirming
and containing such factual certifications and
representations as to this Lease as Landlord may reasonably
request. It is expressly understood and agreed that any such
certificate may be relied upon by any prospective purchaser
or encumbrancer of all or any portion of the Land or by any
other person to whom it is delivered. Tenant's failure to
deliver such certificate within such time shall be
conclusive upon Tenant that this Lease is in full force and
effect, without modification except as may be represented by
Landlord, that there are no uncured defaults in Landlord's
performance and that not more than one (1) months' Rent has
been paid in advance. If Tenant fails to execute and deliver
to Landlord any certificate required by this Section which
has been delivered to Tenant for Tenant's execution within
ten (10) business days after Tenant's receipt of the same,
such failure shall constitute an Event of Default hereunder
until such time as the required certificate has been
delivered to Landlord. Landlord is hereby irrevocably
appointed and authorized as agent and attorney-in-fact of
Tenant, coupled with an interest, to execute all
certificates required by this Section in the event Tenant
fails to execute said certificates Within such ten (10)
business day period.
(f) Notices. All notices and other communications
-------
given pursuant to this Lease shall be in writing and shall
be (1) mailed by first class, United States Mail, postage
prepaid, certified, with return receipt requested, and
addressed to the parties hereto at the address specified in
the Basic Lease Information, (2) hand delivered to the
intended address, or (3) sent by prepaid telegram, cable,
facsimile transmission, or telex followed by a confirmatory
letter. Notice sent by certified mail, postage prepaid,
shall be effective three business days after being deposited
in the United States Mail; all other notices shall be
effective upon delivery to the address of the addressee. The
parties hereto may change their addresses by giving notice
thereof to the other in conformity with this provision.
(g) Separability Gender and Number. If any clause
------------------------------
or provision of this Lease is illegal, invalid, or
unenforceable under present or future
22
<PAGE>
Laws, then the remainder of this Lease shall not be affected
thereby and in lieu of such clause or provision, there shall
be added as a part of this Lease a clause or provision as
similar in terms to such illegal, invalid, or unenforceable
clause or provision as may be possible and be legal, valid,
and enforceable. Singular words shall connote the plural
number as well as the singular and vice versa, and the
masculine shall include the feminine and the neuter
(h) Amendments and Binding Effect. This Lease may
-----------------------------
not be amended except by instrument in writing signed by
Landlord and Tenant. No provision of this Lease shall be
deemed to have been waived by Landlord unless such waiver is
in writing signed by Landlord, and no custom or practice
which may evolve between the parties in the administration
of the terms hereof shall waive or diminish the right of
Landlord to insist upon the performance by Tenant in strict
accordance with the terms hereof. The terms and conditions
contained in this Lease shall inure to the benefit of and be
binding upon the parties hereto, and upon their respective
successors in interest and legal representatives, except as
otherwise herein expressly provided. This Lease is for the
sole benefit of Landlord and Tenant, and, other than
Landlord's Mortgagee, no third party shall be deemed a third
party beneficiary hereof.
(i) Quiet Enjoyment. Provided Tenant has performed
---------------
all of the terms and conditions of this Lease to be
performed by Tenant, Tenant shall peaceably and quietly hold
and enjoy the Premises for the Term, without hindrance from
Landlord or any party claiming by, through, or under
Landlord, subject to the terms and conditions of this Lease.
(j) Joint and Several Liability. If there is more
---------------------------
than one Tenant, then the obligations hereunder imposed upon
Tenant shall be joint and several. If there is a guarantor
of Tenant's obligations hereunder, then the obligations
hereunder imposed upon Tenant shall be the joint and several
obligations of Tenant and such guarantor, and Landlord need
not first proceed against Tenant before proceeding against
such guarantor nor shall any such guarantor be released from
its guaranty for any reason whatsoever.
(k) Captions. The captions contained in this Lease
--------
are for convenience of reference only, and do not limit or
enlarge the terms and conditions of this Lease.
(1) No Merger. There shall be no merger of the
---------
leasehold estate hereby created with the fee estate in the
Premises or any part thereof if the same person acquires or
holds, directly or indirectly, this Lease or any interest in
this Lease and the fee estate in the leasehold Premises or
any interest in such fee estate.
(m) Landlord Consent. Except as expressly set
----------------
forth to the contrary in this Lease, any time Landlord's
consent is required for Tenant to take (or fail to take) any
action (including without limitation, any assignment of this
Lease or subletting of all or any portion of the Premises),
Landlord may withhold such consent in Landlord's sole and
absolute discretion.
(n) No Offer. The submission of this Lease to
--------
Tenant shall not be construed as an offer, nor shall Tenant
have any rights under this Lease unless Landlord executes a
copy of this Lease and delivers it to Tenant.
23
<PAGE>
(o) Exhibits. All exhibits and attachments
--------
attached hereto are incorporated herein by this reference.
Exhibit A - Outline of the Initial Premises
Exhibit A-1 - Outline of 2nd Floor Expansion Premises
Exhibit A - Outline of 4th Floor Expansion Premises
Exhibit B - Building Rules and Regulations
Exhibit C - Operating Expense and Tax Escalator
Exhibit D - Tenant Finish Work: Allowance
Exhibit E - Parking
Exhibit F - Extension Options
Exhibit G - Expansion Options
Exhibit G-1 - First 2nd Floor Expansion Option Provisions
Exhibit G-2 - Second 2nd Floor Expansion Option Provisions
Exhibit G-3 - First Right of First Opportunity for the 4th Floor
Expansion Premises
Exhibit G-4 - First Right of First Opportunity for the 2nd Floor
Expansion Premises
Exhibit G-5 - First Expansion Option for the 4th Floor
Expansion Premises
Exhibit G-6 - 2nd Right of First Opportunity Provisions for the
4th Floor Expansion Premises
Exhibit G-7 - Right of First Opportunity Provisions for the
"To Be Determined" Premises
Exhibit H - DTPA Waiver
Exhibit I - Confidentiality
Exhibit J - Letter of Credit Provisions
Exhibit J-1 - Extra Construction Allowance Letter of Credit
Provisions
Exhibit K - Arbitration Provisions Rider
Rider A - Form of Initial Letter of Credit and Extra
Construction Allowance LC
(p) Entire Agreement. This Lease constitutes the
----------------
entire agreement between Landlord and Tenant regarding the
subject matter hereof and supersedes all oral statements and
prior writings relating thereto. Except for those set forth
in this Lease, no representations, warranties, or agreements
have been made by Landlord or Tenant to the other with
respect to this Lease or the obligations of Landlord or
Tenant in connection therewith.
(q) Governing Law. This Lease and the rights and
-------------
obligations of the parties hereto shall be interpreted,
construed, and enforced in accordance with the laws of the
State of Texas.
(r) Financial Reports. Within ten (10) business
-----------------
days after Tenant's receipt of Landlord's written request
for the same, Tenant will deliver to Landlord an annual
report or similar audited statement of Tenant's financial
condition for Tenant's preceding fiscal year and such other
financial information with respect to Tenant as Landlord may
from time to time reasonably request. Except as hereinafter
provided, Landlord covenants and agrees to keep such
financial information of Tenant (and any financial
information of guarantors, if any, of this Lease) strictly
confidential and not disclose the same except as follows:
(a) to the extent disclosure of some or all of such
financial information may be required by any Law or court
order; (b) in connection with any financing sought by
Landlord; (c) in connection with attempts by Landlord to
sell all or any portion of its interest in the Land and/or
the Building; and (d) to persons who "need to know" such as
Landlord's officers, directors, employees, attorneys,
accountants, advisors, consultants, financiers, partners,
investors, or current or prospective lenders. If this Lease
is guaranteed by other individuals, companies or
institutions, Tenant agrees to concurrently deliver to
Landlord an annual report or similar audited financial
statement, as applicable (and any other financial
information reasonably required by Landlord), of each such
guarantor.
(s) Abandonment. Neither Tenant nor any Permitted
-----------
Sublessee (as hereinafter defined) or Permitted Assignee (as
hereinafter defined) shall vacate (as hereinafter defined),
abandon or surrender all or any portion of the Premises at
any time during the Term. If Tenant (or, as applicable, any
Permitted Sublessee or Permitted Assignee) shall vacate or
fail to occupy at least fifty percent (50%) of
24
<PAGE>
the Premises for a period of twelve (12) consecutive months,
Landlord may, at its option, terminate this Lease with
respect to any portion(s) of the Premises to the extent such
portion(s) has/have been vacated (as hereinafter defined) or
is/are no longer occupied. Such partial termination of this
Lease shall be done by delivering written notice of such
termination to Tenant (or, as applicable, such Permitted
Sublessee or Permitted Assignee) prior to the date, if any,
on which Tenant re-occupies and/or is deemed to have no
longer vacated the applicable portion(s) of the Premises,
and such written notice of termination shall specify the
date or dates on which such termination shall be effective;
provided, however, Tenant shall have the right, within ten
(10) days after its receipt of such written termination
notice, to re-occupy at least 50% of the Premises in which
case Landlord's termination notice shall be of no force or
effect. Tenant shall have the burden of proving that, within
such ten (10) day period, Tenant has no longer vacated
and/or is then occupying at least 50% of the Premises.
Notwithstanding anything to the contrary contained in this
Lease, Tenant may, in connection with any Permitted
Transfer, vacate and abandon all or any portion of the
Premises for a period of time not to exceed fifteen (15)
days. As used herein, the term "Permitted Transfer" shall
------------------
mean (1) any Transfer after Tenant's receipt of Landlord's
prior written consent thereto, and (2) any Permitted
Transfer Without Landlord Consent, and the term "Permitted
---------
Transferee" shall mean any sublessee or assignee in
----------
connection with a Permitted Transfer. As used herein, the
term "Permitted Sublessee" shall mean either (A) a sublessee
-------------------
in connection with a subletting of all or any portion of the
Premises after Tenant's receipt of Landlord's prior written
consent thereto, or (B) a sublessee in connection with a
Permitted Transfer Without Landlord Consent (as defined in
Section 10.(g) above), and the term "Permitted Assignee"
------------------
shall mean either (y) an assignee in connection with an
assignment of all or any portion of Tenant's interest in the
Lease after Tenant's receipt of Landlord's prior written
consent thereto, or (z) an assignee in connection with a
Permitted Transfer without Landlord Consent (as defined in
Section 10.(g) above). After the expiration of the above-
described ten (10) day period, Landlord may re-enter the
Premises or such vacated or unoccupied portion or portions
thereof that in total exceed fifty percent (50%) of the
Premises for purposes of marketing the same and making the
same ready for a new tenant at any time after being vacated
or no longer occupied, but Landlord shall in no event be
deemed to have terminated this Lease (either in its entirety
or as to the applicable vacated or unoccupied portion or
portions of the Premises) by taking any such actions. If
Landlord terminates this Lease as to less than the entire
Premises in accordance with this Section 25.(s) (i.e., after
the expiration of the above-referenced 10 day period),
Landlord and Tenant (or, as applicable, such Permitted
Assignee) shall, within fifteen (15) days thereafter,
execute an amendment to this Lease evidencing such partial
termination and such other amendments to this Lease as are
necessary (including, without limitation, the applicable
decrease in Basic Rental and Tenant's Proportionate Share
and Tenant's or such Permitted Assignee's agreement to pay
to Landlord an amount equal to the lesser of [i] 50% of the
costs and expenses incurred by Landlord in connection with
the construction of any demising wall between the remaining
Premises and the recaptured portion(s) of the Premises, and
[ii] the sum of all Basic Rental and Additional Rental
attributable to the recaptured portion(s) of the Premises
for the period beginning on the date of recapture until the
scheduled expiration date of the Lease, such payment to be
made within 15 days after the applicable party's receipt of
written invoice(s) evidencing such costs and expenses). If
Tenant (or any Permitted Sublessee or Permitted Assignee)
shall (a) after January 1, 2000, vacate or fail to occupy
the entire Premises or at least fifty percent (50%) of the
Premises for a period of twelve (12) consecutive months and
the foregoing continue after the expiration of the above-
described 10 day period, (b) surrender (whether at the end
of the Term or otherwise) the entire Premises or all or any
substantial portion thereof, or (c) be dispossessed by
process of law, or otherwise, of all or any portion or
portions of the Premises, then any personal property
belonging to Tenant or such Permitted Sublessee or Permitted
Assignee and left in any such vacated or unoccupied portion
or portions of the Premises shall, at Landlord's option, be
deemed abandoned. Such personal property may be
appropriated, sold, stored, destroyed, or otherwise disposed
of by Landlord without notice to Tenant or such Permitted
Sublessee or Permitted Assignee, as applicable, and without
any obligation to account for such property. As used herein,
the terms "vacate" and "vacated" shall mean to conduct,
during the normal business hours of the Building, Tenant's
(or any Permitted Sublessee's or Permitted Assignee's)
activities within any portion(s) of the Premises such that
the applicable portion(s) of the Premises is/are being
occupied by less than one (1)
25
<PAGE>
person per one thousand (1000) net rentable square feet
contained therein. The provisions of this Section 25.(s)
shall survive the expiration or earlier termination of this
Lease.
(t) Signs. Except as otherwise permitted by this
-----
Section 25.(0, Tenant shall not install, paint, display,
inscribe, place or affix any sign, picture, advertisement,
notice, lettering or direction on any part of the outside of
the Building or in the interior of the Premises or other
portion of the Building which is visible from the outside of
the Building. Landlord will prescribe a uniform pattern of
identification signs for Tenant to be placed on the outside
of the Premises and in the directory of tenants of the
Building located in the lobby thereof and, other than such
identification signs, Tenant shall not install, paint,
display, inscribe, place or affix, or otherwise attach, any
sign, picture, advertisement, notice, lettering or direction
on the outside of the Premises for exterior view without the
prior written consent of Landlord. Any sign, picture,
advertisement, notice, lettering or direction installed,
painted, displayed, inscribed, placed, affixed or otherwise
attached on the outside of the Premises or on any part of
the outside of the Building by Tenant without the prior
written consent of Landlord may be removed by Landlord at
Tenant's expense. If Landlord installs a multi-tenant
monument sign outside of the Building on the Land, at such
time(s) as Tenant occupies 45,690 rentable square feet or
more of space in the Building, Landlord shall, at Landlord's
sole cost and expense and to the extent permitted by the
City of Irving, the Las Colinas Association and any other
governmental authority with jurisdiction over the Land, the
Building and/or such signage, identify Tenant on such multi-
tenant monument sign. The location on such monument sign of
Tenant's identification listing shall be determined by
Landlord in Landlord's sole and absolute discretion.
Additionally, such identification listing shall be composed
of the same sign materials as is then found on such monument
sign. The foregoing shall in no way be deemed an agreement
by, or an obligation of, Landlord to install any such multi-
tenant monument sign.
SPECIAL PROVISIONS 26. Letter of Credit. Contemporaneously with its
----------------
delivery of executed originals of this Lease, Tenant shall
deliver to Landlord the Initial Letter of Credit (as defined
in the Exhibit J attached hereto)
---------
LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES
ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL PURPOSE, AND TENANT'S OBLIGATION
TO PAY RENT HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE
PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS HEREUNDER, AND, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, TENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT
ABATEMENT, SETOFF, DEDUCTION, NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS
DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
26
<PAGE>
DATED as of the date first written above.
LANDLORD:
PEMBROKE REAL ESTATE, INC.
By: /s/ Richard Backer
-------------------------
Name: Richard Backer
-----------------------
Title: Sr. Vice President
----------------------
TENANT:
SCIENT CORPORATION, a California corporation
By: /s/ [illegible signature]
-------------------------
Name:
-----------------------
Title:
----------------------
27
<PAGE>
EXHIBIT A
Outline of the Initial Premises
-------------------------------
A-1
<PAGE>
#EXHIBIT A-1
Outline of the 2nd Floor Expansion Premises
-------------------------------------------
A-1-1
<PAGE>
EXHIBIT A-2
-----------
Outline of the 4th Floor Expansion Premises
-------------------------------------------
A-2-1
<PAGE>
EXHIBIT B
BUILDING RULES AND REGULATIONS
------------------------------
The following rules and regulations shall apply to the Premises, the
Building, the parking garage associated therewith, the Land and the
appurtenances thereto:
1. Sidewalks, doorways, vestibules, halls, stairways, and other similar
areas shall not be obstructed by tenants or used by any tenant for purposes
other than ingress and egress to and from their respective leased premises and
for going from one to another part of the Building.
2. Plumbing, fixtures and appliances shall be used only for the purposes
for which designed, and no sweepings, rubbish, rags or other unsuitable material
shall be thrown or deposited therein. Damage resulting to any such fixtures or
appliances from misuse by a tenant or its agents, employees or invitees, shall
be paid by such tenant.
3. No signs, advertisements or notices shall be painted or affixed on or
to any windows or doors or other part of the Building without the prior written
consent of Landlord. No nails, hooks or screws shall be driven or inserted in
any part of the Building except by Building maintenance personnel. No curtains
or other window treatments shall be placed between the glass and the Building
standard window treatments.
4. Landlord shall provide and maintain an alphabetical directory for all
tenants in the main lobby of the Building.
5. Landlord shall provide all door locks in each tenant's leased premises,
at the cost of such tenant, and no tenant shall place any additional door locks
in its leased premises without Landlord's prior written consent. Landlord shall
furnish to each tenant a reasonable number of keys to such tenant's leased
premises, at such tenant's cost, and no tenant shall make a duplicate thereof.
6. Movement in or out of the Building of furniture or office equipment, or
dispatch or receipt by tenants of any bulky material, merchandise or materials
which require use of elevators or stairways, or movement through the Building
entrances or lobby shall be conducted under Landlord's supervision at such times
and in such a manner as Landlord may reasonably require. Each tenant assumes all
risks of and shall be liable for all damage to articles moved and injury to
persons or public engaged or not engaged in such movement, including equipment,
property and personnel of Landlord if damaged or injured as a result of acts in
connection with carrying out this service for such tenant.
7. Landlord may prescribe weight limitations and determine the locations
for safes and other heavy equipment or items, which shall in all cases be placed
in the Building so as to distribute weight in a manner acceptable to Landlord
which may include the use of such supporting devices as Landlord may require.
All damages to the Building caused by the installation or removal of any
property of a tenant, or done by a tenant's property while in the Building,
shall be repaired at the expense of such tenant.
8. Corridor doors, when not in use, shall be kept closed. Nothing shall be
swept or thrown into the corridors, halls, elevator shafts or stairways. No
birds or animals shall be brought into or kept in, on or about any tenant's
leased premises. No portion of any tenant's leased premises shall at any time be
used or occupied as sleeping or lodging quarters.
9. Tenant shall cooperate with Landlord's employees in keeping its leased
premises neat and clean. Tenants shall not employ any person for the purpose of
such cleaning other than the Building's cleaning and maintenance personnel.
10. To ensure orderly operation of the Building, no ice, mineral or other
water, towels, newspapers, etc. shall be delivered to any leased area except by
persons approved by Landlord.
11. Tenant shall not make or permit any improper, objectionable or
unpleasant noises or odors in the Building or otherwise interfere in any way
with other tenants or persons having business with them.
12. No machinery of any kind (other than normal office equipment) shall be
operated by any tenant on its leased area without Landlord's prior written
consent, nor shall any tenant use or keep in the Building any flammable or
explosive fluid or substance.
13. Landlord will not be responsible for lost or stolen personal property,
money or jewelry from tenant's leased premises or public or common areas
regardless of whether such loss occurs when the area is locked against entry or
not.
14. No vending or dispensing machines of any kind may be maintained in any
leased premises without the prior written permission of Landlord.
B-1
<PAGE>
15. All mail chutes located in the Building shall be available for use by
Landlord and all tenants of the Building according to the rules of the United
States Postal Service.
B-2
<PAGE>
EXHIBIT C
OPERATING EXPENSE AND TAX ESCALATOR
-----------------------------------
1. Tenant shall pay an amount (per each rentable square foot in the
Premises) equal to the excess ("Excess") from time to time of actual Basic Cost
------
(as hereinafter defined) per rentable square foot in the Building over the
actual Basic Cost per rentable square foot in the Building paid or incurred for
calendar year 1999 (the "Expense Stop"). Landlord may collect such amount in a
------------
lump sum, to be due within 30 days after Landlord furnishes to Tenant the Annual
Cost Statement. Alternatively, Landlord may make a good faith estimate of the
Excess to be due by Tenant for any calendar year or part thereof during the
Term, and, unless Landlord delivers to Tenant a revision of the estimated
Excess, Tenant shall pay to Landlord, on January l, 2000 and on the first day of
each calendar month thereafter, an amount equal to the estimated Excess for such
calendar year or part thereof divided by the number of months in such calendar
year during the Term. If Landlord thereafter fails to give Tenant notice of the
monthly estimated payments of Excess for a new calendar year, Tenant shall
continue making monthly estimated payments in accordance with the estimate for
the previous calendar year until a new estimated monthly payment amount is
provided to Tenant. From time to time during any calendar year, Landlord may
estimate and re-estimate the Excess to be due by Tenant for that calendar year
and deliver a copy of the estimate or re-estimate to Tenant. Thereafter, the
monthly installments of Excess payable by Tenant shall be appropriately adjusted
in accordance with the estimations so that, by the end of the calendar year in
question, Tenant shall have paid all of the Excess as estimated by Landlord. Any
amounts paid based on such an estimate shall be subject to adjustment pursuant
to Paragraph 3 of this Exhibit when actual Basic Cost is available for each
calendar year.
2. For the purposes of this Exhibit and the foregoing Lease, the term
"Basic Cost" shall mean all expenses and disbursements of every kind (subject to
-----------
the limitations set forth below) which Landlord incurs, pays or becomes
obligated to pay in connection with the ownership, operation, and maintenance of
the Building (including the associated parking facilities), determined in
accordance with generally accepted federal income tax basis accounting
principles consistently applied, including but not limited to the following:
(a) Wages and salaries (including management fees) of all employees
engaged in the operation, repair, replacement, maintenance, and security of the
Building, including taxes, insurance and benefits relating thereto;
(b) All supplies and materials used in the operation, maintenance,
repair, replacement, and security of the Building;
(c) Annual cost of (i) all capital improvements made to the Building
which are minor in nature (i.e., cost less than $10,000.00), and (ii) all
capital improvements which, although capital in nature, can reasonably be
expected to reduce the Basic Cost, as well as all capital improvements made in
order to comply with any applicable Laws or to prevent the interruption of any
Landlord Services, as amortized over the useful economic life of such
improvements as determined by Landlord in its reasonable discretion (without
regard to the period over which such improvements may be depreciated or
amortized for federal income tax purposes);
(d) Cost of all utilities, other than the cost of utilities actually
reimbursed to Landlord by the Building's tenants (including Tenant under Section
7.(b) of this Lease);
(e) Cost of any insurance or insurance related expense applicable to
the Building and Landlord's personal property used in connection therewith;
(f) Cost of repairs, replacements, and general maintenance of the
Building, other than repair, replacement, and general maintenance of the roof,
foundation and exterior walls of the Building;
(g) Cost of service or maintenance contracts with independent
contractors for the operation, maintenance, repair, replacement, or security of
the Building (including, without limitation, alarm service, window cleaning, and
elevator maintenance); and
(h) [Intentionally deleted].
There are specifically excluded from the definition of the term "Basic Cost"
costs (1) for capital improvements made to the Building, other than capital
improvements described in subparagraph 2.(c) of this Exhibit and except for
items which, though capital for accounting purposes, are properly considered
maintenance and repair items, such as painting of common areas, replacement of
carpet in elevator lobbies, and the like; (2) for repair, replacements and
general maintenance paid by proceeds of insurance or by Tenant or other third
parties, and alterations attributable solely to tenants of the Building other
than Tenant; (3) for interest, amortization or other payments on loans to
Landlord; (4) for depreciation of the Building; (5) for leasing commissions; (6)
for legal expenses, other than those incurred for the general benefit of the
Building's tenants (e.g., tax disputes); (7) for renovating or otherwise
improving space for occupants of the Building or vacant space in the Building;
(8) for correcting defects in the construction of the Building; (9) for overtime
or other expenses of Landlord in curing
C-1
<PAGE>
defaults or performing work expressly provided in this Lease to be borne at
Landlord's expense; and (10) for federal income taxes imposed on or measured by
the income of Landlord from the operation of the Building.
3. The Annual Cost Statement shall include a statement of Landlord's
actual Basic Cost for the previous year adjusted as provided in Paragraph 4 of
this Exhibit. If the Annual Cost Statement reveals that Tenant paid more for
Basic Cost than the actual Excess in the year for which such statement was
prepared, then Landlord shall credit or reimburse Tenant for such excess within
30 days after delivery of the Annual Cost Statement; likewise, if Tenant paid
less than the actual Excess, then Tenant shall pay Landlord such deficiency
within 30 days after delivery of the Annual Cost Statement.
4. With respect to any calendar year or partial calendar year in which
the Building is not occupied to the extent of 95% of the rentable area thereof,
the Basic Cost for such period shall, for the purposes hereof, be increased to
the amount which would have been incurred had the Building been occupied to the
extent of 95% of the rentable area thereof.
5. Tenant shall pay an amount (per each rentable square foot in the
Premises) equal to the excess ("Tax Excess") from time to time of actual Taxes
(as hereinafter defined) per rentable square foot in the Building over the
actual Taxes per rentable square foot in the Building paid or incurred for
calendar year 1999 (the "Tax Expense Stop"). Landlord may collect such amount in
----------------
a lump sum, to be due within 30 days after Landlord furnishes to Tenant the
Annual Cost Statement. Alternatively, Landlord may make a good faith estimate of
the Tax Excess to be due by Tenant for any calendar year or part thereof during
the Term, and, unless Landlord delivers to Tenant a revision of the estimated
Tax Excess, Tenant shall pay to Landlord, on January 1, 2000 and on the first
day of each calendar month thereafter, an amount equal to the estimated Tax
Excess for such calendar year or part thereof divided by the number of months in
such calendar year during the Term. If Landlord thereafter fails to give Tenant
notice of the monthly estimated payments of Excess for a new calendar year,
Tenant shall continue making monthly estimated payments in accordance with the
estimate for the previous calendar year until a new estimated monthly payment
amount is provided to Tenant. From time to time during any calendar year,
Landlord may estimate and re-estimate the Tax Excess to be due by Tenant for
that calendar year and deliver a copy of the estimate or re-estimate to Tenant.
Thereafter, the monthly installments of Tax Excess payable by Tenant shall be
appropriately adjusted in accordance with the estimations so that, by the end of
the calendar year in question, Tenant shall have paid all of the Tax Excess as
estimated by Landlord. For the purposes of this Exhibit and the foregoing Lease,
the term "Taxes" shall mean all taxes and assessments and governmental charges
-----
whether federal, state, county or municipal, and whether they be by taxing or
management districts or authorities presently taxing or by others, subsequently
created or otherwise, and any other taxes and assessments attributable to the
Building (or its operation), and the grounds, parking areas, driveways, and
alleys around the Building including, without limitation, real estate taxes,
personal property taxes, sewer rents, water rents, general or special
assessments, and duties or levies charged or levied upon or assessed against the
Building and/or the Land or any portion thereof and personal property, transit
taxes, all costs and expenses (including legal fees and court costs) incurred,
charged, and/or assessed against Landlord, for the evaluation, protest or
reduction of property taxes or assessments in connection with the Building
and/or the Land, or any tax or excise on rent or any other tax (however
described) on account of rental received for use and occupancy of any or all of
the Building, whether any such taxes are imposed by the United States of
America, the State of Texas, the County of Dallas, or any local governmental
municipality, authority or agency or any political subdivision of any thereof,
but excluding, however, (i) federal and state taxes on income, and (ii) net
amounts paid to the Dallas County Utility & Reclamation District (such amounts
are herein collectively referred to as "DCURD Taxes") which are due as provided
-----------
below; provided, however, if the present method of taxation changes so that in
lieu of the whole or any part of any Taxes levied on the Land and/or the
Building, there is levied on Landlord a capital tax directly on the rents
received therefrom or a franchise tax, assessment, or charge based, in whole or
in part, upon such rents for the Building, then all such taxes, assessments, or
charges, or the part thereof so based, shall be deemed to be included within the
term "Taxes" for the purposes hereof.
6. Tenant shall pay an amount (per each rentable square foot in the
Premises) equal to the excess (the "DCURD Excess") from time to time of (a)
------------
actual DCURD Taxes per net rentable square foot in the Building over (b) the
actual DCURD Taxes per rentable square foot in the Building paid or incurred for
calendar year 1999 (the "DCURD Expense Stop"); provided, however, that during
------------------
the initial Term only and only with respect to (1) the Initial Premises, (2) the
2nd Floor Expansion Premises (as defined in the Exhibit G attached to this
Lease) if Tenant has exercised the First Expansion Option (as defined in Exhibit
G) by July 1, 2000, and (3) the 4th Floor Expansion Premises (as defined in the
Exhibit G attached to this Lease) if Tenant has exercised the Fourth Floor
Expansion Option (as defined in Exhibit G) by January 1, 2001, the amount of
actual DCURD Taxes to be used in subparts (a) and (b) of this Paragraph 6 for
the purpose of calculating the DCURD Excess shall not exceed the amount (on a
per net rentable square foot in the Building basis) of DCURD Taxes assessed
based on a DCURD tax rate of $3.00 per $100.00 of property value. By way of
example only:
(a) If the Waterway Tower DCURD tax bill for 1999 is $330,000.00, then
such amount would be Tenant's DCURD Expense Stop.
C-2
<PAGE>
(b) If the DCURD tax rate per $100.00 of value increases to $2.75 per
$100.00 of value in 2000 causing the DCURD Taxes in 2000 to increase to
$340,000.00, and assuming that Tenant is then only leasing the Initial
Premise, then Tenant would pay its proportionate share of the $10,000.00
increase, resulting in a DCURD Excess payment in 2000 that is equal to the
following amount:
22,845/221,941 = 10.293% x $10,000.00 = $1,029.30
(c) However, if the DCURD tax rate per $100.00 of value increases to
$3.25 per $100.00 of value in 2000 causing the DCURD Taxes in 2000 to
increase to $360,000.00, and again assuming that Tenant is then only
leasing the Initial Premises, then Tenant would pay its proportionate share
of such increase, up to the $3.00 per $100.00 cap amount, as follows:
DCURD Expense Stop: $330,000.00
DCURD Taxes @ $3.00 cap on tax rate: $350,000.00
DCURD Taxes @actual $3.25 tax rate: $360,000.00
(A) $350,000.00 - $330,000.00 = $20,000.00
(B) $360,000.00 - $350,000.00 = $10,000.00
Result:
-------
(1) Tenant's Proportionate Share = 10.293% x $20,000 (A)=
$2,058.00.
(2) Landlord excludes the tax of $10,000 (B) for Tenant's
escalation purposes.
PLEASE NOTE THAT THE NUMBERS SET FORTH ABOVE ARE NOT ESTIMATES OR
ACTUALS OF THE DCURD TAXES, BUT ARE INSTEAD "PLUG" NUMBERS IN AN
EFFORT TO SHOW THE MECHANICS OF THE "CAP" BEING PROVIDED TO TENANT AS
PROVIDED HEREBY.
7. With respect to any period of time after the initial Term of this
Lease (i.e., any renewal terms in the event Tenant exercises one or more of the
extension options set forth in Exhibit F), Landlord shall provide a new "cap" on
the amount of DCURD Taxes used to calculate the DCURD Excess payable with
respect to the portion(s) of the Premises that the $3.00 DCURD tax rate cap
applied; provided, however, in no event shall such "cap" be less than the "cap"
applicable to such DCURD Taxes with respect to the Initial Premises and, if
applicable, the 2nd Floor Expansion Premises and the 4th Floor Expansion
Premises (such cap to be in effect during any renewal terms is referred to as
the "DCURD Taxes Cap"). Landlord shall also provide a new "cap" on the amount of
---------------
DCURD Taxes used to calculate the DCURD Excess payable with respect to the 2nd
Floor Expansion Premises in the event that Tenant expands into such premises
pursuant to the Second Expansion Option (as defined in Exhibit G), and this
"cap" will also not be less than the "cap" applicable to DCURD Taxes with
respect to the Initial Premises and, if applicable, the 4th Floor Expansion
Premises.
8. Landlord may collect the DCURD Excess in a lump sum, to be due within
30 days after Landlord furnishes to Tenant the Annual Cost Statement.
Alternatively, Landlord may make a good faith estimate of the DCURD Excess to be
due by Tenant for any calendar year or part thereof during the Term, and, unless
Landlord delivers to Tenant a revision of the estimated DCURD Excess, Tenant
shall pay to Landlord, on January 1, 2000 and on the first day of each calendar
month thereafter, an amount equal to the estimated DCURD Excess for such
calendar year or part thereof divided by the number of months in such calendar
year during the Term. If Landlord thereafter fails to give Tenant notice of the
monthly estimated payments of Excess for a new calendar year, Tenant shall
continue making monthly estimated payments in accordance with the estimate for
the previous calendar year until a new estimated monthly payment amount is
provided to Tenant. From time to time during any calendar year, Landlord may
estimate and re-estimate the DCURD Excess to be due by Tenant for that calendar
year and deliver a copy of the estimate or re-estimate to Tenant. Thereafter,
the monthly installments of DCURD Excess payable by Tenant shall be
appropriately adjusted in accordance with the estimations so that, by the end of
the calendar year in question, Tenant shall have paid all of the DCURD Excess as
estimated by Landlord.
C-3
<PAGE>
EXHIBIT D
TENANT FINISH-WORK: ALLOWANCE
-----------------------------
1. If the Premises have heretofore been occupied by any prior tenant,
then except as set forth in this Exhibit, Tenant accepts the Premises in their
"as is" condition on the date that this Lease is entered into.
2. On or before June 15, 1999, Tenant shall provide to Landlord for its
approval final working drawings, prepared by an architect that has been approved
by Landlord (which approval shall not be unreasonably withheld or delayed), of
all improvements that Tenant proposes to install in the Initial Premises; such
working drawings shall include the partition layout, ceiling plan, electrical
outlets and switches, telephone outlets, drawings for any modifications to the
mechanical and plumbing systems of the Building, and detailed plans and
specifications for the construction of the improvements called for under this
Exhibit in accordance with all applicable Laws. Further, if any of Tenant's
proposed construction work will affect the Building's HVAC, electrical,
mechanical, or plumbing systems, then the working drawings pertaining thereto
shall be prepared by the Building's engineer of record, whom Tenant shall at its
cost engage for such purpose. Landlord's approval of such working drawings shall
not be unreasonably withheld, provided that (a) they comply with all applicable
Laws, (b) such working drawings are sufficiently detailed to allow construction
of the improvements in a good and workmanlike manner, and (c) the improvements
depicted thereon conform to the rules and regulations promulgated from time to
time by the Landlord for the construction of tenant improvements (a copy of
which has been delivered to Tenant). As used herein, "Working Drawings" shall
----------------
mean the final working drawings approved by Landlord, as amended from time to
time by any approved changes thereto, and "Work" shall mean all improvements to
----
be constructed in accordance with and as indicated on the Working Drawings.
Approval by Landlord of the Working Drawings shall not be a representation or
warranty of Landlord that such drawings are adequate for any use, purpose, or
condition, or that such drawings comply with any applicable law or code, but
shall merely be the consent of Landlord to the performance of the Work. Tenant
shall, at Landlord's request, sign the Working Drawings to evidence its review
and approval thereof. All changes in the Work must receive the prior written
approval of Landlord, and in the event of any such approved change Tenant shall,
upon completion of the Work, furnish Landlord with an accurate, reproducible
"as-built" plan (e.g., sepia) of the improvements as constructed, which plan
shall be incorporated into this Lease by this reference for all purposes.
3. The Work shall be performed only by contractors and subcontractors
approved in writing by Landlord, which approval shall not be unreasonably
withheld. All contractors and subcontractors shall be required to procure and
maintain (a) insurance against such risks, in such amounts, and with such
companies as Landlord may reasonably require and (b) payment and performance
bonds covering the cost of the Work and otherwise reasonably satisfactory to
Landlord. Certificates of such insurance, with paid receipts therefor, and
copies of such bonds must be received by Landlord before the Work is commenced.
The Work shall be performed (i) in a good and workmanlike manner that is free of
defects and is in strict conformance with the Working Drawings, (ii) in such a
manner and at such times as to maintain harmonious labor relations and not to
interfere with or delay Landlord's other contractors, the operation of the
Building, and the occupancy thereof by other tenants, and (iii) in such a manner
so that, upon its Substantial Completion, Tenant will be able to occupy the
applicable portion(s) of the Premises. All contractors and subcontractors shall
contact Landlord and schedule time periods during which they may use Building
facilities in connection with the Work (e.g., elevators, excess electricity,
etc.).
4. Landlord shall cooperate with Tenant and Equis Corporation to cause
the Work to be commenced as soon as practicable after Landlord's approval of the
Working Drawings and to be substantially completed on or before the target date
of January 1, 2000. Tenant agrees to similarly cooperate with Landlord and its
managing agent during and in connection with the construction of the Work
(including, without limitation, moving out of the applicable non-finished-out
portions of the Initial Premises into the finished-out portions of the Initial
Premises as the Work in such finished-out portions of the Initial Premises is
substantially completed and such portions become available for occupancy by
Tenant) to cause the Work to be substantially completed on or before the target
date of January 1, 2000.
5. Tenant shall bear the entire cost of performing the Work (including,
without limitation, the Construction Fees [as defined in Paragraph 7 below],
costs in connection with the design of the Work and preparation of the Working
Drawings, costs of construction labor and materials, electrical usage during
construction, additional janitorial services, general tenant signage, related
taxes and insurance costs, all of which costs are herein collectively called the
"Total Construction Costs") in excess of the Construction Allowance (hereinafter
-------------------
defined), the Space Plan Allowance (hereinafter defined) and the Plan Revisions
Allowance (hereinafter defined). Upon approval of the Working Drawings and
selection of a contractor, Tenant shall promptly (a) execute a work order
agreement prepared by Landlord which identifies such drawings, itemizes the
Total Construction Costs and sets forth the Construction Allowance, the Space
Plan Allowance and the Plan Revisions Allowance, and (b) if applicable, pay to
Landlord the amount by which the estimated Total Construction Costs exceed the
Construction Allowance, the Space Plan Allowance and the Plan Revisions
Allowance (such excess is herein referred to as the "Estimated Construction
----------------------
Excess"). Once the Work has been Substantially Completed and before Tenant
occupies the applicable portion of the Initial Premises, Tenant
D-1
<PAGE>
shall pay to Landlord an amount equal to the Total Construction Costs (as
adjusted for any approved changes to the Work), less (1) the amount of the
payments already made by Tenant pursuant to this Paragraph 5, (2) the amount of
the Construction Allowance, the Space Plan Allowance and the Plan Revisions
Allowance, and (3) the cost reasonably estimated by Landlord for completing all
punch-list items; finally, upon completion of the punch-list items, Tenant shall
pay to Landlord the costs incurred in completing the same.
6. Landlord shall provide to Tenant a construction allowance (the
"Construction Allowance") equal to the lesser of (a) $15.00 per rentable square
----------------------
foot in the Premises, or (b) the Total Construction Costs, as adjusted for any
approved changes to the Work; provided, however, because Equis Corporation is
managing the performance of the Work, Tenant shall, not become entitled to full
credit for the Construction Allowance, the Space Plan Allowance and the Plan
Revisions Allowance until the Work has been Substantially Completed and Tenant
has caused to be delivered to Landlord (1) all invoices from contractors,
subcontractors, and suppliers evidencing the cost of performing the Work,
together with lien waivers from such parties, (2) a certificate of occupancy
from the appropriate governmental authority, if applicable to the Work, or
evidence of governmental inspection and approval of the Work, and (3) evidence
reasonably satisfactory to Landlord of the amount of costs, if any, incurred by
Tenant in connection with the preparation of the Working Drawings and any
revisions to the Working Drawings after the preparation of the initial plans
approved by Landlord (i.e., evidence needed in connection with determining the
amount of credit to be provided Tenant utilizing the Space Plan Allowance and
the Plan Revisions Allowance). Notwithstanding anything to the contrary
contained in this Exhibit, if the Total Construction Costs are less than
$342,675.00 and Tenant has become entitled to a credit of more than $296,985.00
(i.e., $13.00 per rentable square foot in the Initial Premises) toward the
construction of standard building improvements utilizing the Construction
Allowance (the difference between $342,675.00 and the amount of the Construction
Allowance utilized by Tenant in excess of $296,985.00 is herein referred to as
the "Available Unused Allowance"), Tenant shall have the right, after the Work
--------------------------
has been Substantially Completed and Tenant has begun to occupy all of the
Initial Premises, to direct Landlord in writing to apply the amount of the
Available Unused Allowance as a credit against the next due installment(s) of
Basic Rental due under this Lease until such time as the full amount of the
Available Unused Allowance has been credited against such installment(s).
7. The $15.00 per rentable square foot amount provided above may be
increased by up to $10.00 per rentable square foot at Tenant's written request
therefor; provided, however, Basic Rental shall then be increased as provided in
the following sentence based on the actual amount of extra construction
allowance (the "Extra Construction Allowance") provided to Tenant by Landlord
----------------------------
after Landlord's receipt of Tenant's written request therefor. In the event
Landlord provides Tenant with all or any of the Extra Construction Allowance,
Basic Rental shall be increased by the amount which is necessary to fully
amortize the actual amount of the Extra Construction Allowance provided to
Tenant using a sixty (60) month term and a ten percent (10%) per annum interest
rate factor. By way of example only, if the actual amount of the Extra
Construction Allowance provided to Tenant was $45,690.00 (i.e., $2.00 per
rentable square foot in the Premises), then the monthly Basic Rental due under
this Lease for the Initial Premises would be increased by $970.78, thus
increasing the Basic Rental payable for the Initial Premises to $45,708.91.
Except as expressly provided in this Exhibit to the contrary, any Extra
Construction Allowance not used for the Work by January 1, 2000 shall be
forfeited and may not be used for any other purposes except as expressly
provided in this Exhibit to the contrary. Prior to the date on which Landlord
has notified Tenant that Landlord anticipates the construction of the Work to
commence, Tenant shall deposit with Landlord an irrevocable letter of credit
(such required letter of credit is referred to a the "Extra Construction
----- ------------
Allowance LC") in an amount equal to the amount, as reasonably estimated by
------------
Landlord, equal to the Extra Construction Allowance to be provided to Tenant by
Landlord based on Landlord's review of the Working Drawings and the bid or bids
for the construction of the Work (the date on which Landlord receives such
irrevocable letter of credit is referred to as the "Extra Construction Allowance
----------------------------
LC Delivery. Date"). Landlord shall, at least ten (10) days prior to the date on
----------- ----
which Landlord anticipates the construction of the Work to commence, notify
Tenant in writing of the required initial amount of the Extra Construction
Allowance LC. The rights and obligations of the parties with respect to this
letter of credit shall be governed by the Exhibit J-1 attached to the Lease.
8. Landlord or its Affiliate or agent shall supervise the Work, make
disbursements required to be made to the contractor, and act as a liaison
between the contractor and Tenant and coordinate the relationship between the
Work, the Building, and the Building's systems. In consideration for Landlord's
construction supervision services, Tenant shall pay to Landlord a construction
supervision fee equal to three percent (3%) of the Total Construction Costs (the
"LaSalle Fee"). Tenant's project manager, Equis Corporation, is managing the
-----------
performance of the Work and will participate in the coordination, bidding and
management of all phases of the construction thereof. In consideration of such
services, Tenant shall pay Equis Corporation a construction management fee equal
to five percent (5%) of the Total Construction Costs (the "Equis Fee"). The
---------
supervision and management fees described above are herein referred to as the
"Construction Fees"). Notwithstanding the foregoing, the LaSalle Fee and the
------------------
Equis Fee shall each be reduced by an amount equal to 50% of the costs of the
Work attributable to modifications to the Initial Premises necessary to cause
the same to comply with applicable Disability Laws (as defined in Section 8.(a)
of the Lease) including, without limitation, the Americans With Disabilities Act
of 1990 (such costs are herein referred to as the "ADA Compliance Costs"). If
--------------------
the amount of the ADA Compliance Costs exceeds the amount of the Construction
Fees, Jones Lang LaSalle Management Services, Inc. and Equis Corporation shall
each pay to Tenant, within thirty (30) days after the
D-2
<PAGE>
Work has been Substantially Completed and Tenant has begun to occupy all of the
Initial Premises, an amount equal to 50% of such excess amount; provided,
however, in lieu of paying Tenant its 50% share of such excess amount, Equis
Corporation may elect pursuant to its written brokerage commission agreement
with Landlord to reduce its brokerage commission payable by Landlord in an
amount equal to its 50% share of such excess amount. If, and only if, Equis
Corporation so reduces its brokerage commission payable by Landlord, then
Landlord shall pay to Tenant an amount equal to such reduction in the brokerage
commission.
9. To the extent not inconsistent with this Exhibit, Section 8.(a) of
this Lease shall govern the performance of the Work and the Landlord's and
Tenant's respective rights and obligations regarding the improvements installed
pursuant thereto.
10. In addition to the Construction Allowance, Landlord shall provide to
Tenant (i) an allowance (the "Space Plan Allowance") equal to $1,599.15 (i.e.,
--------------------
$0.07 per rentable square feet of space in the Initial Premises) to be used to
pay for costs incurred in connection with the preparation of the Working
Drawings, and (ii) an allowance (the "Plan Revisions Allowance") equal to
------------------------
$685.35 (i.e., $0.03 per rentable square feet of space in the Initial Premises)
to be used to pay for costs incurred in connection with any revisions to the
Working Drawings after the preparation of the initial plans approved by
Landlord.
D-3
<PAGE>
EXHIBIT E
PARKING
-------
Except as otherwise provided to the contrary in this Exhibit E, Tenant
shall be permitted to use ninety-one (91) undesignated vehicular parking spaces
(collectively, the "Initial Garage Parking Spaces") in the parking garage
-----------------------------
associated with the Building (the "Waterway Parking Garage") during the initial
-----------------------
Term at such rates and subject to such terms, conditions and regulations as are
from time to time charged or applicable to patrons of the Waterway Parking
Garage including, without limitation, the right of Landlord to periodically
confirm the number of assigned parking cards and the identity of the persons to
whom such cards have been assigned, the right of Landlord to charge Tenant for
all parking cards provided to Tenant (other than parking cards for the Initial
Garage Parking Spaces) at a current rate of $18.00 per card, and the right to
confirm that Tenant's employees are not using the non-employee designated
visitor parking areas and, if such employees are using such non-employee
designated parking areas, Landlord shall have the right to enforce established
Building parking policies and regulations. Such parking has been allocated by
Landlord in the Waterway Parking Garage on a first come - first served basis in
an amount equal to one non-reserved and non-exclusive space per 250 net rentable
square feet of the Premises (the "Initial Parking Ratio"). All of the Initial
---------------------
Garage Parking Spaces will be undesignated and unreserved parking spaces
(collectively, the "Unreserved Spaces"). Subject to availability and provided
-----------------
that no Event of Default has occurred and is continuing and no event has
occurred and is continuing which with the passage of time or the giving of
notice, or both, would constitute an Event of Default, Tenant shall have the
right during the initial Term to convert up to eight percent (8%) of the
Unreserved Spaces in the Waterway Parking Garage to reserved parking spaces by
giving Landlord written notice thereof and paying the monthly parking charges
required hereby (such converted Unreserved Spaces are herein collectively
referred to as the "Reserved Spaces"). Tenant shall pay $20.00 (plus all
---------------
applicable taxes) per month per space for each of the Unreserved Spaces. Tenant
shall pay $75.00 (plus all applicable taxes) per month per space for each of the
Reserved Spaces. If, for any reason, Landlord fails or is unable to provide, or
Tenant is not permitted to use, all or any portion of the parking spaces to
which it is entitled hereunder, then Tenant's obligation to pay for such spaces
shall be abated for so long as Tenant does not have the use thereof; this
abatement shall be in full settlement of all claims that Tenant might otherwise
have against Landlord because of Landlord's failure or inability to provide
Tenant with such parking spaces. If Tenant sublets any portion of the Premises
or assigns any of its interest in this Lease, then, if applicable, the parking
spaces allocated to Tenant pursuant to this Exhibit (including, without
limitation, any Unreserved Other Spaces [as hereinafter defined]) shall be
reduced from the number of spaces based on the Initial Parking Ratio to a number
of parking spaces equal to the number of spaces to be allocated to Tenant based
on the Building standard ratio of parking space per rentable square foot as
established by Landlord at the time of such assignment or subletting for non-
reserved and reserved spaces (and, if applicable, with the number of Unreserved
Spaces and Unreserved Other Spaces being adjusted to reflect a ratio comparable
to the ratio of Unreserved Spaces to Unreserved Other Spaces at the time of such
decrease). At such time as the net rentable square foot of floor area of the
Premises increases or decreases, the number of parking spaces allocated to
Tenant pursuant to this Exhibit shall be increased or decreased, as applicable,
based on a ratio of one (1) parking space per two hundred fifty (250) net
rentable square feet of space within the Premises (and, if applicable, with the
number of Unreserved Spaces and Unreserved Other Spaces being adjusted to
reflect a ratio comparable to the ratio of Unreserved Spaces to Unreserved Other
Spaces at the time of such increase or decrease in the net rentable square foot
of floor area of the Premises). All parking is subject to space availability and
Landlord shall designate the location of all reserved parking spaces.
During the initial Term and any renewals thereof, Landlord shall have the
right from time to time to re-allocate the number of Unreserved Spaces based on
the following ratios (each based on the number of net rentable square feet of
space in the Premises):
3.1 per 1,000 in the Waterway Parking Garage and 0.9 per 1,000 at another
location or locations designated by Landlord which is/are in close
proximity to the Building (each an "Other Parking Area" and collectively
------------------
the "Other Parking Areas").
-------------------
In connection with any such re-allocation, Landlord must grant to Tenant a
non-exclusive license (subject to revocation only upon a termination of this
Lease or a termination of Tenant's right of possession of the Premises or upon
any reduction in the number of Unreserved Other Spaces as provided in this
Exhibit) to use an equal number of undesignated and unreserved parking spaces in
the Other Parking Areas (each an "Unreserved Other Space" and collectively the
---------- -----------
"Unreserved Other Spaces"). Landlord shall exercise this right by giving Tenant
-----------------------
written notice thereof (a "Re-Allocation Notice"). Each Re-Allocation Notice
--------------------
shall indicate the number of Unreserved Spaces to be relocated to the Other
Parking Area or Other Parking Areas. Any reduction of the number of Unreserved
Spaces (and the effective date of Tenant's non-exclusive license to use the
comparable number of Unreserved Other Spaces) shall be effective on the first
day of the first full calendar month following the date of Tenant's receipt of
the applicable Re-Allocation Notice. Tenant shall pay to Landlord all required
parking fees (plus all applicable taxes) for the Unreserved Other Spaces
(Landlord shall attempt to secure a parking rate for the Unreserved Other Spaces
that is similar to the rate payable for the Unreserved Spaces) and stop paying
the parking fee for re-allocated Unreserved Spaces at the Waterway Parking
Garage. Upon Tenant's return to Landlord's property manager of the parking
card(s) for any
E-1
<PAGE>
Unreserved Spaces "recaptured" by Landlord as provided in this Exhibit, Landlord
shall provide, at Tenant's sole cost and expense, a like number of parking
card(s) for each of the Unreserved Other Spaces that will be replacing such re-
allocated Unreserved Spaces. Parking in the Other Parking Areas shall be subject
to such terms, conditions and regulations as are from time to time applicable to
persons parking in the Other Parking Areas. All parking in the Other Parking
Areas is subject to space availability.
During the initial Term and any renewals thereof, Landlord shall have the
right from time to time to relocate one or more of Unreserved Other Spaces from
the applicable Other Parking Area(s) to the Waterway Parking Garage by giving
Tenant written notice thereof (a "Relocation Notice"). Each Relocation Notice
-----------------
shall indicate the number of Unreserved Other Spaces to be relocated to the
Waterway Parking Garage. Any relocation of one or more of the Unreserved Other
Spaces shall be effective on the first day of the first full calendar month
following the date of Tenant's receipt of the applicable Relocation Notice.
After such effective date, Tenant shall pay to Landlord $20.00 (plus all
applicable taxes) per month per space for each of such relocated Unreserved
Other Spaces. Tenant shall no longer pay the previously payable parking fee for
the relocated Unreserved Other Spaces until such time, if any, as Landlord
relocates the same back to the applicable Other Parking Area(s). Upon Tenant's
return to Landlord's property manager of the parking card(s) for any Unreserved
Other Spaces relocated by Landlord as provided in this Exhibit, Landlord shall
provide, at Landlord's sole cost and expense, a like number of parking card(s)
for each such space.
E-2
<PAGE>
EXHIBIT F
EXTENSION OPTIONS
-----------------
Provided that Tenant is occupying at least 22,845 net rentable square feet
of space in the Building at the time of such election and, at such time, no
Event of Default has occurred and is continuing and no event has occurred and is
continuing which with the giving of notice or the passage of time, or both,
would constitute an Event of Default, Tenant may renew this Lease for two (2)
additional periods of five (5) years each on the same terms provided in this
Lease (except as set forth below), by delivering written notice of the exercise
thereof to Landlord not later than nine (9) months before the expiration of the
Term or, if applicable, the expiration of the first renewal thereof. On or
before the commencement date of the extended Term in question, Landlord and
Tenant shall execute an amendment to this Lease (a "Lease Amendment") extending
---------------
the Term on the same terms provided in this Lease, except as follows:
(a) The Basic Rental payable for each month during each such extended
Term shall be the prevailing fair market rental rate and terms for renewals
in the Building (or, if no such renewals have taken place at the Building
within a reasonable period of time prior to the date on which such
prevailing fair market rental rate is being determined by Landlord, the
rate and terms for renewals at comparable buildings in the Las Colinas
Urban Center) at the commencement of such extended Term, for space of
equivalent quality, size, utility and location, with the length of the
extended Term and the credit standing and financial condition of Tenant to
be taken into account;
(b) Tenant shall have no further renewal options unless expressly
granted by Landlord in writing;
(c) The portion(s) of the Premises subject to a $3.00 DCURD tax rate
cap shall be subject to the DCURD Taxes Cap (as defined in the Exhibit C
attached to this Lease); and
(d) Landlord shall lease to Tenant the Premises in their then-current
condition, and Landlord shall not provide to Tenant any allowances (e.g.,
moving allowance, construction allowance, and the like) or other tenant
inducements.
Tenant's rights under this Exhibit shall terminate if (i) this Lease or
Tenant's right to possession of all or any portion of the Premises is
terminated, (ii) Tenant assigns any of its interest in this Lease or sublets any
portion of the Premises (other than any Permitted Transfer Without Landlord
Consent), or (iii) Tenant fails to timely exercise its option under this
Exhibit, time being of the essence with respect to Tenant's exercise thereof.
F-1
<PAGE>
EXHIBIT G
This Exhibit G (this "Exhibit") is attached to that certain Lease (the
-------
"Lease") by and between PEMBROKE REAL ESTATE, INC., as landlord, and SCIENT
------
CORPORATION, a California corporation, as tenant. Any capitalized term not
defined in this Exhibit shall have the meaning assigned to it in the Lease.
EXPANSION OPTIONS
-----------------
(A) First 2nd Floor Expansion Right.
--------------------------------
1. Date of Exercise. Provided that Tenant is occupying at least
----------------
22,845 net rentable square feet of space on the 3rd floor of the Building at the
time of such election and, at such time, no Event of Default has occurred and is
continuing and no event has occurred and is continuing which with the giving of
notice or the passage of time, or both, would constitute an Event of Default,
Tenant may lease all of the rentable square feet of space on the 2nd floor of
the Building (approximately 22,833 rentable square feet of space) (the "2nd
---
Floor Expansion Premises") by delivering to Landlord, on or before July 1, 2000,
------------------------
written notice of Tenant's election to include such space in the Premises (such
written notice is herein referred to as the "First Expansion Election Notice"
-------------------------------
and the foregoing expansion option is referred to as the "First Expansion
---------------
Option"). The 2nd Floor Expansion Premises is more particularly depicted on the
Exhibit A-1 attached to the Lease. If requested in a writing received by
Landlord from Tenant at least 30 days prior to July 1, 2000 (the "First
-----
Expansion Notice of Intent"), and provided that Tenant satisfies the
--------------------------
requirements set forth in this subparagraph, Landlord shall, not less than ten
(10) days prior to July 1, 2000, notify Tenant in writing (the "First Expansion
---------------
Option Notice") of the following: (1) the Fair Market Rental Rate (as defined in
-------------
the Exhibit G-1 attached to the Lease); (2) the 2nd Floor Finish-Out Allowance
(as defined in Exhibit G-l); (3) the amount of the First Expansion LC (as
defined below); and (4) the date that Landlord anticipates will be the 2nd Floor
Premises Delivery Date (as defined in Exhibit G-l). In the First Expansion
Notice of Intent, Tenant shall indicate the date on which Tenant would like to
add the 2nd Floor Expansion Premises to the Initial Premises (such date to in no
event be later than January 1, 2001). Contemporaneously with Tenant's delivery
of the First Expansion Notice of Intent, Tenant shall deliver to Landlord (i)
the most recent annual report or similar audited statement of Tenant's financial
condition for the preceding fiscal year, and (ii) Tenant's most recent quarterly
financial statement (audited, as applicable) and the most recent year-to-date
statement of Tenant's operations and financial condition. Within five (5)
business days after Tenant's receipt of Landlord's written request for the same,
Tenant shall deliver to Landlord such other information with respect to Tenant
that Landlord may from time to time reasonably request in writing from Tenant
after Landlord's receipt of the First Expansion Notice of Intent. If Tenant does
not satisfy the requirements of the two (2) immediately preceding sentences,
Landlord shall have no obligation to deliver the First Expansion Option Notice
to Tenant as provided hereby. If Tenant exercises the First Expansion Option on
or before July 1, 2000, then the expansion rights provisions set forth in the
Exhibit G-1 attached to the Lease shall apply to Tenant's expansion into the 2nd
Floor Expansion Premises.
2. Rental Rate. If Tenant expands into the 2nd Floor Expansion
-----------
Premises pursuant to this subparagraph (A), Basic Rental for the 2nd Floor
Expansion Premises shall be payable on and after the 2nd Floor Premises Delivery
Date (as defined in the Exhibit G-1 attached to the Lease) and shall be equal to
the Fair Market Rental Rate (as defined in Exhibit G-1).
3. Term. If Tenant expands into the 2nd Floor Expansion Premises
----
pursuant to this subparagraph (A), the term of the leasing of the 2nd Floor
Expansion Premises will be a minimum of five (5) years unless Landlord and
Tenant otherwise agree in writing to a longer term and the existing Term shall
be extended so that it becomes coterminous with the term of the leasing of the
2nd Floor Expansion Premises.
4. Tenant Improvements and Letter of Credit Provisions. If Tenant
---------------------------------------------------
expands into the 2nd Floor Expansion Premises pursuant to this subparagraph (A),
then (i) Landlord will provide to Tenant a tenant improvement allowance which
Landlord, in its sole discretion reasonably exercised, determines is appropriate
taking into account the Fair Market Rental Rate, the condition of the 2nd Floor
Expansion Premises at the time of Tenant's exercise of the First Expansion
Option and the financial condition of Tenant at such time, and (ii) Landlord may
require that Tenant deposit with Landlord at the time of the execution of the
applicable lease amendment an irrevocable letter of credit, in form and content
acceptable to Landlord, which Landlord, in its sole discretion reasonably
exercised, determines is appropriate based on Landlord's review of the credit
standing and financial condition of Tenant at the time of the expansion and the
total costs to be incurred by Landlord (and that are ultimately incurred by
Landlord) in connection with the expansion (the "First Expansion LC") may
------------------
include, without limitation, all brokerage commissions and all costs and
expenses (hard and soft) related to the design and construction (including the
management thereof) of leasehold alterations and improvements performed in
connection therewith.
5. Space Delivery. If Landlord cannot deliver possession of the 2nd
--------------
Floor Expansion Premises to Tenant by January 1,2001, then Landlord will have
the right, as more particularly provided in the Exhibit G-1 attached to the
Lease, to deliver possession of the 2nd Floor Expansion Premises to Tenant on a
later date without being in default under the Lease.
G-1
<PAGE>
(B) Second 2nd Floor Expansion Right.
--------------------------------
1. Date of Exercise. If Tenant has not exercised the First Expansion
----------------
Option on or before July 1, 2000 and provided that Tenant is occupying at least
22,845 net rentable square feet of space on the 3rd floor of the Building at the
time of such election and, at such time, no Event of Default has occurred and is
continuing and no event has occurred and is continuing which with the giving of
notice or the passage of time, or both, would constitute an Event of Default,
Tenant may lease all of the 2nd Floor Expansion Premises by delivering to
Landlord, on or before January 1,2001, written notice of Tenant's election to
include such space in the Premises (such written notice is herein referred to as
the "Second Expansion Election Notice" and the foregoing expansion option is
--------------------------------
referred to as the "Second Expansion Option"), If requested in a writing
-----------------------
received by Landlord from Tenant at least 30 days prior to January 1, 2001 (the
"Second Expansion Notice of Intent"), and provided that Tenant satisfies the
---------------------------------
requirements set forth in this subparagraph, Landlord shall, not less than ten
(10) days prior to January 1, 2001, notify Tenant in writing (the "Second
------
Expansion Option Notice") of the following: (1) the Fair Market Rental Rate (as
-----------------------
defined in the Exhibit G-2 attached to the Lease); (2) the Second 2nd Floor
Finish-Out Allowance (as defined in Exhibit G-2); (3) the amount of the Second
Expansion LC (as defined below); and (4) the date that Landlord anticipates will
be the 2nd Floor Premises Delivery Date (as defined in Exhibit G-2). In the
Second Expansion Notice of Intent, Tenant shall indicate the date on which
Tenant would like to add the 2nd Floor Expansion Premises to the Initial
Premises (such date to in no event be later than July 1, 2001).
Contemporaneously with Tenant's delivery of the Second Expansion Notice of
Intent, Tenant shall deliver to Landlord (i) the most recent annual report or
similar audited statement of Tenant's financial condition for the preceding
fiscal year, and (ii) Tenant's most recent quarterly financial statement
(audited, as applicable) and the most recent year-to-date statement of Tenant's
operations and financial condition. Within five (5) business days after Tenant's
receipt of Landlord's written request for the same, Tenant shall deliver to
Landlord such other information with respect to Tenant that Landlord may from
time to time reasonably request in writing from Tenant after Landlord's receipt
of the Second Expansion Notice of Intent. If Tenant does not satisfy the
requirements of the two (2) immediately preceding sentences, Landlord shall have
no obligation to deliver the Second Expansion Option Notice to Tenant as
provided hereby. If Tenant exercises the Second Expansion Option on or before
January 1, 2001, then the expansion rights provisions set forth in the Exhibit
G-2 attached to the Lease shall apply to Tenant's expansion into the 2nd Floor
Expansion Premises.
2. Rental Rate. If Tenant expands into the 2nd Floor Expansion
-----------
Premises pursuant to this subparagraph (B), Basic Rental for the 2nd Floor
Expansion Premises shall be payable on and after the 2nd Floor Premises Delivery
Date (as defined in the Exhibit G-2 attached to the Lease) and shall be equal to
the Fair Market Rental Rate (as defined in Exhibit G-2).
3 Term. If Tenant expands into the 2nd Floor Expansion Premises
----
pursuant to this subparagraph (B), the term of the leasing of the 2nd Floor
Expansion Premises will be a minimum of five (5) years unless Landlord and
Tenant otherwise agree in writing to a longer term and the existing Term shall
be extended so that it becomes coterminous with the term of the leasing of the
2nd Floor Expansion Premises.
4. Tenant Improvements and Letter of Credit Provisions. If Tenant
---------------------------------------------------
expands into the 2nd Floor Expansion Premises pursuant to this subparagraph (B),
then (i) Landlord will provide to Tenant a tenant improvement allowance which
Landlord, in its sole discretion reasonably exercised, determines is appropriate
taking into account the Fair Market Rental Rate, the condition of the 2nd Floor
Expansion Premises at the time of Tenant's exercise of the Second Expansion
Option and the financial condition of Tenant at such time, and (ii) Landlord may
require that Tenant deposit with Landlord at the time of the execution of the
applicable lease amendment an irrevocable letter of credit, in form and content
acceptable to Landlord, which Landlord, in its sole discretion reasonably
exercised, determines is appropriate based on Landlord's review of the credit
standing and financial condition of Tenant at the time of the expansion and the
total costs to be incurred by Landlord (and that are ultimately incurred by
Landlord) in connection with the expansion (the "Second Expansion LC") may
-----------------
include, without limitation, all brokerage commissions and all costs and
expenses (hard and soft) related to the design and construction (including the
management thereof) of leasehold alterations and improvements performed in
connection therewith.
5. Space Delivery. If Landlord cannot deliver possession of the 2nd
--------------
Floor Expansion Premises to Tenant by July 1, 2001, then Landlord will have the
right, as more particularly provided in the Exhibit G-2 attached to the Lease,
to deliver possession of the 2nd Floor Expansion Premises to Tenant on a later
date without being in default under the Lease.
(B-1) First ROFO for the 4th Floor Expansion Premises.
------------------------------------------------
1. Conditions Precedent to Tenant Obtaining this ROFO. If Tenant has
--------------------------------------------------
failed to exercise the First Expansion Option on or before July 1, 2000 and
provided that Tenant is occupying at least 22,845 net rentable square feet of
space on the 3rd floor of the Building at the time of such election and at such
time no Event of Default has occurred and is continuing and no event has
occurred and is continuing which with the giving of notice or the passage of
time, or both, would constitute an Event of Default, Tenant shall have a right
of first opportunity to lease (the "First 4th Floor ROFO") all of the 4th Floor
--------------------
Expansion Premises (as defined
G-2
<PAGE>
in subparagraph (D). 1 below), which First 4th Floor ROFO shall be on the terms
and conditions set forth in the Exhibit G-3 attached to the Lease.
2. Rental Rate. If Tenant expands into the 4th Floor Expansion
-----------
Premises pursuant to this subparagraph (B-l), Basic Rental for the 4th Floor
Expansion Premises shall be payable on and after the First 4th Floor ROFO
Delivery Date (as defined in the Exhibit G-3 attached to the Lease) and shall be
in the amount determined pursuant to Exhibit G-3.
3. Term. If Tenant expands into the 4th Floor Expansion Premises
----
pursuant to this subparagraph (B-l), the term of the leasing of the 4th Floor
Expansion Premises will be a minimum of five (5) years unless Landlord and
Tenant otherwise agree in writing to a longer term and the existing Term shall
be extended so that it becomes coterminous with the term of the leasing of the
4th Floor Expansion Premises.
4. Tenant Improvements and Letter of Credit Provisions. If the Offer
---------------------------------------------------
Notice (as defined in Exhibit G-3) provides for the furnishing by Landlord of
any allowances or other tenant inducements (collectively, the "First 4th Floor
---------------
ROFO Allowance"), then (i) Landlord will provide to Tenant the First 4th Floor
--------------
ROFO Allowance, and (ii) Landlord may require that Tenant deposit with Landlord
at the time of the execution of the applicable lease amendment an irrevocable
letter of credit, in form and content acceptable to Landlord, which Landlord, in
its sole discretion reasonably exercised, determines is appropriate based on
Landlord's review of the credit standing and financial condition of Tenant on
the date of the Offer Notice and the total costs to be incurred by Landlord (and
that are ultimately incurred by Landlord) in connection with an expansion
pursuant to this subparagraph (B-1) and the Exhibit G-3 attached to the Lease
(the "First 4th Floor ROFO LC") may include, without limitation, all brokerage
-----------------------
commissions and all costs and expenses (hard and soft) related to the design and
construction (including the management thereof) of leasehold alterations and
improvements performed in connection therewith.
(C) First ROFO for the 2nd Floor Expansion Premises.
-----------------------------------------------
1. Conditions Precedent to Tenant Obtaining this ROFO. If Tenant has
--------------------------------------------------
failed to timely exercise both the First Expansion Option and the Second
Expansion Option and provided that Tenant is occupying at least 22,845 net
rentable square feet of space on the 3rd floor of the Building at the time of
such election and at such time no Event of Default has occurred and is
continuing and no event has occurred and is continuing which with the giving of
notice or the passage of time, or both, would constitute an Event of Default,
Tenant shall have a right of first opportunity to lease (the "2nd Floor ROFO")
--------------
all of the 2nd Floor Expansion Premises, which 2nd Floor ROFO shall be on the
terms and conditions set forth in the Exhibit G-4 attached to the Lease.
2. Rental Rate. If Tenant expands into the 2nd Floor Expansion
-----------
Premises pursuant to this subparagraph (C), Basic Rental for the 2nd Floor
Expansion Premises shall be payable on and after the 2nd Floor ROFO Delivery
Date (as defined in the Exhibit G-4 attached to the Lease) and shall be in the
amount determined pursuant to Exhibit G-4.
3. Term. If Tenant expands into the 2nd Floor Expansion Premises
----
pursuant to this subparagraph (C), the term of the leasing of the 2nd Floor
Expansion Premises will be a minimum of five (5) years unless Landlord and
Tenant otherwise agree in writing to a longer term and the existing Term shall
be extended so that it becomes coterminous with the term of the leasing of the
2nd Floor Expansion Premises.
4. Tenant Improvements and Letter of Credit Provisions. If the Offer
---------------------------------------------------
Notice (as defined in Exhibit G-4) provides for the furnishing by Landlord of
any allowances or other tenant inducements (collectively, the "2nd Floor ROFO
--------------
Allowance"), then (i) Landlord will provide to Tenant the 2nd Floor ROFO
---------
Allowance, and (ii) Landlord may require that Tenant deposit with Landlord at
the time of the execution of the applicable lease amendment an irrevocable
letter of credit, in form and content acceptable to Landlord, which Landlord, in
its sole discretion reasonably exercised, determines is appropriate based on
Landlord's review of the credit standing and financial condition of Tenant on
the date of the Offer Notice and the total costs to be incurred by Landlord (and
that are ultimately incurred by Landlord) in connection with an expansion
pursuant to this subparagraph (C) and the Exhibit G-4 attached to the Lease (the
"2nd Floor ROFO LC") may include, without limitation, all brokerage commissions
-----------------
and all costs and expenses (hard and soft) related to the design and
construction (including the management thereof) of leasehold alterations and
improvements performed in connection therewith.
(D) First 4th Floor Expansion Right.
--------------------------------
1. Date of Exercise. If Tenant has exercised the First Expansion
----------------
Option on or before July 1, 2000 and provided that Tenant is occupying at least
45,678 net rentable square feet of space on the 2nd and 3rd floors of the
Building at the time of such election and, at such time, no Event of Default has
occurred and is continuing and no event has occurred and is continuing which
with the giving of notice or the passage of time, or both, would constitute an
Event of Default, Tenant may lease all of the rentable square feet of space on
the 4th floor of the Building (approximately 18,103 rentable square feet of
space) (the "4th Floor Expansion
-------------------
G-3
<PAGE>
Premises") by delivering to Landlord, on or before January 1, 2001, written
--------
notice of Tenant's election to include such space in the Premises (such written
notice is herein referred to as the "Election Notice" and the foregoing
---------------
expansion option is referred to as the "Fourth Floor Expansion Option"). The 4th
-----------------------------
Floor Expansion Premises is more particularly depicted on the Exhibit A-2
attached to the Lease. If requested in a writing received by Landlord from
Tenant at least 30 days prior to January 1, 2001 (the "4th Floor Expansion
-------------------
Notice of Intent"), and provided that Tenant satisfies the requirements set
----------------
forth in this subparagraph, Landlord shall, not less than ten (10) days prior to
January 1,2001, notify Tenant in writing (the "4th Floor Expansion Option
--------------------------
Notice") of the following: (1) the Fair Market Rental Rate (as defined in the
------
Exhibit G-5 attached to the Lease); (2) the 4th Floor Finish-Out Allowance (as
defined in Exhibit G-5); (3) the amount of the 4th Floor Expansion LC (as
defined below); and (4) the date that Landlord anticipates will be the 4th Floor
Premises Delivery Date (as defined in Exhibit G-5). In the 4th Floor Expansion
Notice of Intent, Tenant shall indicate the date on which Tenant would like to
add the 4th Floor Expansion Premises to the Initial Premises (such date to in no
event be later than July 1, 2001). Contemporaneously with Tenant's delivery of
the 4th Floor Expansion Notice of Intent, Tenant shall deliver to Landlord (i)
the most recent annual report or similar audited statement of Tenant's financial
condition for the preceding fiscal year, and (ii) Tenant's most recent quarterly
financial statement (audited, as applicable) and the most recent year-to-date
statement of Tenant's operations and financial condition. Within five (5)
business days after Tenant's receipt of Landlord's written request for the same,
Tenant shall deliver to Landlord such other information with respect to Tenant
that Landlord may from time to time reasonably request in writing from Tenant
after Landlord's receipt of the 4th Floor Expansion Notice of Intent. If Tenant
does not satisfy the requirements of the two (2) immediately preceding
sentences, Landlord shall have no obligation to deliver the 4th Floor Expansion
Option Notice to Tenant as provided hereby. If Tenant exercises the Fourth Floor
Expansion Option on or before January 1, 2001, then the expansion rights
provisions set forth in the Exhibit G-5 attached to the Lease shall apply to
Tenant's expansion into the 4th Floor Expansion Premises.
2. Rental Rate. If Tenant expands into the 4th Floor Expansion
-----------
Premises pursuant to this subparagraph (D), Basic Rental for the 4th Floor
Expansion Premises shall be payable on and after the 4th Floor Premises Delivery
Date (as defined in the Exhibit G-5 attached to the Lease) and shall be equal to
the Fair Market Rental Rate (as defined in Exhibit G-5).
3. Term. If Tenant expands into the 4th Floor Expansion Premises
----
pursuant to this subparagraph (D), the term of the leasing of the 4th Floor
Expansion Premises will be a minimum of five (5) years unless Landlord and
Tenant otherwise agree in writing to a longer term and the existing Term shall
be extended so that it becomes coterminous with the term of the leasing of the
4th Floor Expansion Premises.
4. Tenant Improvements and Letter of Credit Provisions. If Tenant
---------------------------------------------------
expands into the 4th Floor Expansion Premises pursuant to this subparagraph (D),
then (i) Landlord will provide to Tenant a tenant improvement allowance which
Landlord, in its sole discretion reasonably exercised, determines is appropriate
taking into account the Fair Market Rental Rate, the condition of the 4th Floor
Expansion Premises at the time of Tenant's exercise of the Fourth Floor
Expansion Option and the financial condition of Tenant at such time, and (ii)
Landlord may require that Tenant deposit with Landlord at the time of the
execution of the applicable lease amendment an irrevocable letter of credit, in
form and content acceptable to Landlord, which Landlord, in its sole discretion
reasonably exercised, determines is appropriate based on Landlord's review of
the credit standing and financial condition of Tenant at the time of the
expansion and the total costs to be incurred by Landlord (and that are
ultimately incurred by Landlord) in connection with the expansion (the "4th
---
Floor Expansion LC") may include, without limitation, all brokerage commissions
------------------
and all costs and expenses (hard and soft) related to the design and
construction (including the management thereof) of leasehold alterations and
improvements performed in connection therewith.
5. Space Delivery. If Landlord cannot deliver possession of the 4th
--------------
Floor Expansion Premises to Tenant by July 1, 2001, then Landlord will have the
right, as more particularly provided in the Exhibit G-5 attached to the Lease,
to deliver possession of the 4th Floor Expansion Premises to Tenant on a later
date without being in default under the Lease.
(E) Second ROFO for the 4th Floor Expansion Premises.
-------------------------------------------------
1. Conditions Precedent to Tenant Obtaining this ROFO. If Tenant has
--------------------------------------------------
exercised the First Expansion Option on or before July 1, 2000 but has failed to
exercise the Fourth Floor Expansion Option on or before January 1, 2001, and
provided that Tenant is occupying at least 45,678 net rentable square feet of
space on the 2nd and 3rd floors of the Building at the time of such election and
at such time no Event of Default has occurred and is continuing and no event has
occurred and is continuing which with the giving of notice or the passage of
time, or both, would constitute an Event of Default, Tenant shall have a right
of first opportunity to lease (the "Second 4th Floor ROFO") all of the 4th Floor
---------------------
Expansion Premises, which Second 4th Floor ROFO shall be on the terms and
conditions set forth in the Exhibit G-6 attached to the Lease.
2. Rental Rate. If Tenant expands into the 4th Floor Expansion
-----------
Premises pursuant to this subparagraph (E), Basic Rental for the 4th Floor
Expansion Premises shall be payable on and after the 4th Floor
G-4
<PAGE>
ROFO Delivery Date (as defined in the Exhibit G-6 attached to the Lease) and
shall be in the amount determined pursuant to Exhibit G-6.
3. Term. If Tenant expands into the 4th Floor Expansion Premises
----
pursuant to this subparagraph (E), the term of the leasing of the 4th Floor
Expansion Premises will be a minimum of five (5) years unless Landlord and
Tenant otherwise agree in writing to a longer term and the existing Term shall
be extended so that it becomes coterminous with the term of the leasing of the
4th Floor Expansion Premises.
4. Tenant Improvements and Letter of Credit Provisions. If the Offer
---------------------------------------------------
Notice (as defined in Exhibit G-6) provides for the furnishing by Landlord of
any allowances or other tenant inducements (collectively, the "Second 4th Floor
----------------
ROFO Allowance"), then (i) Landlord will provide to Tenant the Second 4th Floor
--------------
ROFO Allowance, and (ii) Landlord may require that Tenant deposit with Landlord
at the time of the execution of the applicable lease amendment an irrevocable
letter of credit, in form and content acceptable to Landlord, which Landlord, in
its sole discretion reasonably exercised, determines is appropriate based on
Landlord's review of the credit standing and financial condition of Tenant on
the date of the Offer Notice and the total costs to be incurred by Landlord (and
that are ultimately incurred by Landlord) in connection with an expansion
pursuant to this subparagraph (E) and the Exhibit G-6 attached to the Lease (the
"Second 4th Floor ROFO LC") may include, without limitation, all brokerage
------------------------
commissions and all costs and expenses (hard and soft) related to the design and
construction (including the management thereof) of leasehold alterations and
improvements performed in connection therewith.
(F) Temporary Expansion Space after 4 Month Delay in Delivering Expansion
---------------------------------------------------------------------
Space. With respect to expansions pursuant to subparagraphs (A), (B) and (D)
-----
above (and the exhibits attached to the Lease which are related thereto), if
Landlord is unable to deliver possession of the applicable expansion premises by
the date that is four (4) months after the target commencement date, Landlord
will make available for lease by Tenant up to 20,000 rsf of contiguous temporary
expansion space, subject to availability, located in the Building, which
temporary expansion space will be leased by Tenant at fair market rental rates
on an "as is" basis on the terms more particularly set forth in the applicable
exhibit attached to the Lease. Tenant shall vacate such temporary expansion
space within five (5) business days after possession of the applicable expansion
space has been delivered to Tenant.
(G) ROFO on a "To Be Determined" Vacant Floor. If Tenant has timely
---------- ---------------- -------------
exercised both the First Expansion Option and the Fourth Floor Expansion Option
and provided that Tenant is occupying at least 63,781 net rentable square feet
of space on the 2nd, 3rd and 4th floors of the Building at the time of such
election and at such time no Event of Default has occurred and is continuing and
no event has occurred and is continuing which with the giving of notice or the
passage of time, or both, would constitute an Event of Default, Tenant shall
have a right of first opportunity to lease (the "Additional Space ROFO") all of
---------------------
any vacant full floor of the Building that Landlord identifies in the Offer
Notice (as defined in the Exhibit G-7 attached to the Lease) (such vacant full
floor identified in the Offer Notice is herein referred to as the "Additional
----------
Space"), which Additional Space ROFO shall be on the terms and conditions set
-----
forth in the Exhibit G-7 attached to the Lease. If the Offer Notice (as defined
in Exhibit G-7) provides for the furnishing by Landlord of any allowances or
other tenant inducements (collectively, the "Additional Space Allowance"), then
--------------------------
(i) Landlord will provide to Tenant the Additional Space Allowance, and (ii)
Landlord may require that Tenant deposit with Landlord at the time of the
execution of the applicable lease amendment an irrevocable letter of credit, in
form and content acceptable to Landlord, which Landlord, in its sole discretion
reasonably exercised, determines is appropriate based on Landlord's review of
the credit standing and financial condition of Tenant on the date of the Offer
Notice and the total costs to be incurred by Landlord (and that are ultimately
incurred by Landlord) in connection with an expansion pursuant to this
subparagraph (G) and the Exhibit G-7 attached to the Lease (the "Additional
----------
Space LC") may include, without limitation, all brokerage commissions and all
--------
costs and expenses (hard and soft) related to the design and construction
(including the management thereof) of leasehold alterations and improvements
performed in connection therewith.
(H) Termination of Expansion Rights. Tenant's rights under this Exhibit
-------------------------------
(and the exhibits attached to the Lease which are related thereto) shall
terminate if (a) the Lease or Tenant's right to possession of all or any portion
of the Premises is terminated, or (b) Tenant assigns any of its interest in the
Lease or sublets any portion of the Premises (other than any Permitted Transfer
Without Landlord Consent).
G-5
<PAGE>
EXHIBIT G-1
This Exhibit G-1 (this "Exhibit") is attached to that certain Lease (the
-------
"Lease") by and between PEMBROKE REAL ESTATE, INC., as landlord, and SCIENT
-----
CORPORATION, a California corporation, as tenant. Any capitalized term not
defined in this Exhibit shall have the meaning assigned to it in the Lease
(including, without limitation, the Exhibit G attached thereto). The capitalized
terms which are defined in this Exhibit shall have the meanings assigned to them
herein in this Exhibit only and, if such terms are used in any other exhibits
attached to the Lease, such terms shall in such exhibits have the meanings given
to them therein. Tenant's rights under this Exhibit are conditioned upon
Tenant's satisfaction of the applicable requirements and conditions precedent
thereto contained in the Exhibit G attached to the Lease.
FIRST 2ND FLOOR EXPANSION OPTION PROVISIONS
-------------------------------------------
1. Effect of a Timely Exercise of the First Expansion Option. If Tenant
---------------------------------------------------------
exercises the First Expansion Option on or before July 1, 2000, then (a)
possession of the 2nd Floor Expansion Premises shall be delivered to Tenant on
the earlier of January 1, 2001 or the date on which Tenant occupies the 2nd
Floor Expansion Premises with Landlord's prior written consent (subject to
adjustment as provided below in this Exhibit, the date on which possession of
the 2nd Floor Expansion Premises is delivered to Tenant after the exercise of
the First Expansion Option is herein referred to as the "2nd Floor Premises
------------------
Delivery Date"), and (b) Tenant and Landlord shall, within fifteen (15) days
-------------
after Landlord's receipt of the First Expansion Election Notice, execute an
amendment to the Lease (the "Lease Amendment") reflecting the following: (i)
---------------
that, if Landlord cannot acquire possession of all or any portion of the 2nd
Floor Expansion Premises before January 1, 2001 and deliver the same to Tenant
by such date, then (1) Tenant's obligation to pay increased Basic Rental,
Excess, Tax Excess and DCURD Excess as provided in the Lease Amendment shall be
waived until Landlord delivers possession of the applicable portions of the 2nd
Floor Expansion Premises at which time an appropriate increase in Tenant's
Proportionate Share, Basic Rental, Excess, Tax Excess and DCURD Excess will
occur, (2) Landlord shall not be in default under the Lease as a result of such
failure to deliver possession of all or any portion of the 2nd Floor Expansion
Premises to Tenant on or before January 1, 2001 or be liable for damages
therefor, (3) Tenant shall accept possession of the respective portions of the
2nd Floor Expansion Premises when Landlord tenders possession thereof to Tenant,
and (4) if the 2nd Floor Premises Delivery Date has not occurred by May 1, 2001,
Landlord shall lease the Alternative Premises (as defined in Paragraph 2 below)
to Tenant "as is" on the terms and conditions that are applicable thereto in
this Exhibit; (ii) that Tenant shall, within 90 days after the date of the
execution of the Lease Amendment, deliver to Landlord for its approval final
working drawings, prepared by an architect that has been approved by Landlord
(which approval shall not be unreasonably withheld or delayed), of all
improvements that Tenant proposes to install in the 2nd Floor Expansion Premises
(such working drawings shall include the partition layout, ceiling plan,
electrical outlets and switches, telephone outlets, drawings for any
modifications to the mechanical and plumbing systems of the Building, and
detailed plans and specifications for the construction of the improvements
called for under the Lease Amendment in accordance with all applicable Laws);
(iii) the terms and conditions pursuant to which Tenant will deliver, and
Landlord will hold, the First Expansion LC, which terms and conditions shall be
the same (subject to applicable changes in dates and amount) as set forth in the
Exhibit J-1 attached to the Lease (the amount of the First Expansion LC may
include, without limitation, all brokerage commissions and all costs and
expenses [hard and soft] related to the design and construction [including the
management thereof] of leasehold alterations and improvements performed in
connection with the leasing of the 2nd Floor Expansion Premises to Tenant
pursuant to this Exhibit); and (iv) that the 2nd Floor Expansion Premises is to
be added to the Premises and will be leased by Tenant on the same terms as the
Lease except as follows:
(a) the number of rentable square feet in the Premises shall increase
by the number of rentable square feet in the 2nd Floor Expansion Premises,
and Tenant's Proportionate Share shall be adjusted accordingly, effective
as of the 2nd Floor Premises Delivery Date;
(b) Basic Rental for the 2nd Floor Expansion Premises shall be payable
on and after the 2nd Floor Premises Delivery Date and shall be equal to the
prevailing fair market rental rate in the Building on the 2nd Floor
Premises Delivery Date for space of equivalent quality, size, utility and
location, with the length of the term, the amount of the 2nd Floor Finish-
Out Allowance (as hereinafter defined) and credit standing and financial
condition of Tenant to be taken into account (the "Fair Market
-----------
Rental Rate");
-----------
(c) Landlord shall not provide to Tenant any allowances (e.g., moving
allowance, construction allowance, and the like) or other tenant
inducements other than a tenant improvement allowance (the "2nd Floor
---------
Finish-Out Allowance") which Landlord, in its sole discretion reasonably
--------------------
exercised, determines is appropriate taking into account the Fair Market
Rental Rate and the condition of, and leasehold improvements located in,
the 2nd Floor Expansion Premises, and such allowance shall be provided to
Tenant in the same manner as the Construction Allowance is provided to
Tenant pursuant to the Exhibit D attached to the Lease (i.e., as a credit
to costs incurred in connection with the construction of leasehold
improvements to the 2nd Floor Expansion Premises);
G-1-1
<PAGE>
(d) the construction of any leasehold improvements to the 2nd Floor
Expansion Premises will be done pursuant to the terms and conditions set
forth in the Exhibit D attached to the Lease (with applicable revisions to
reflect the fact that the 2nd Floor Expansion Premises, not the Premises,
are being finished-out after the date of Tenant's timely exercise of the
First Expansion Option) plus the addition of Landlord's standard lease
language regarding what constitutes a tenant delay and the effect thereof;
(e) the number of rentable square feet in the Premises shall, if
applicable, increase by the number of rentable square feet in the
Alternative Premises, and Tenant's Proportionate Share shall be adjusted
accordingly, effective as of the Alternative Premises Delivery Date (as
defined in Paragraph 2 below);
(f) Basic Rental for the Alternative Premises shall be payable on and
after the Alternative Premises Delivery Date until the 2nd Floor Premises
Delivery Date and shall be equal to the Fair Market Rental Rate;
(g) possession of the Alternative Premises shall be delivered to
Tenant in an "as is" condition and Tenant shall vacate and re-deliver
possession of the Alternative Premises to Landlord within five (5) business
days after the 2nd Floor Premises Delivery Date;
(h) Landlord shall not provide to Tenant any allowances (e.g., moving
allowance, construction allowance, and the like) or other tenant
inducements with respect to the Alternative Premises; and
(i) the Scheduled Expiration Date shall be modified and extended to
the date that is the last day of the sixtieth (60th) full calendar month
after the 2nd Floor Premises Delivery Date unless a longer term is agreed
to in writing by Landlord and Tenant.
2. Alternative Premises Definitions and Provisions. As used herein, the
-----------------------------------------------
term "Alternative Premises" shall mean the up to 20,000 contiguous rentable
--------------------
square feet of space in the Building which is Available For Rent (as hereinafter
defined) that Landlord identifies in a written notice (the "Alternative
-----------
Premises Notice") delivered to Tenant on or before May 1,2001 in the event
---------------
Landlord reasonably believes that the 2nd Floor Premises Delivery Date will not
occur by such date. Landlord shall choose the portion(s) of the Available For
Rent space in the Building to be used for the Alternative Premises and identify
the same in the Alternative Premises Notice; provided, however, in no event
shall the space identified in the Alternative Premises Notice exceed 20,000
rentable square feet. Landlord shall also identify in the Alternative Premises
Notice the date or dates, as applicable, on which possession of the Alternative
Premises will be delivered to Tenant; provided, however, in no event shall the
earliest date of such delivery take place before the fourteenth (14th) day after
the date of Tenant's receipt of the Alternative Premises Notice. As used herein,
the term "Available For Rent" shall mean any vacant space in the Building that
------------------
is not then leased by a tenant and is not then subject to any expansion options,
rights of first offer or other options or rights of other tenants or other third
parties. As used herein, the term "Alternative Premises Delivery Date" shall
----------------------------------
mean the date on which possession of all or any portion of the Alternative
Premises has been delivered by Landlord to Tenant.
3. Termination of Tenant's Expansion Rights. Tenant's rights pursuant to
----------------------------------------
Paragraph 1 of this Exhibit and subparagraph (A) of the Exhibit G attached to
the Lease shall terminate if Tenant fails to timely exercise the First Expansion
Option, time being of the essence with respect to Tenant's exercise thereof.
G-1-2
<PAGE>
EXHIBIT G-2
This Exhibit G-2 (this "Exhibit") is attached to that certain Lease (the
-------
"Lease") by and between PEMBROKE REAL ESTATE, INC., as landlord, and SCIENT
-----
CORPORATION, a California corporation, as tenant. Any capitalized term not
defined in this Exhibit shall have the meaning assigned to it in the Lease
(including, without limitation, the Exhibit G attached thereto). The capitalized
terms which are defined in this Exhibit shall have the meanings assigned to them
herein in this Exhibit only and, if such terms are used in any other exhibits
attached to the Lease, such terms shall in such exhibits have the meanings given
to them therein. Tenant's rights under this Exhibit are conditioned upon
Tenant's satisfaction of the applicable requirements and conditions precedent
thereto contained in the Exhibit G attached to the Lease.
SECOND 2ND FLOOR EXPANSION OPTION PROVISIONS
--------------------------------------------
1. Effect of a Timely Exercise of the Second Expansion Option. If
----------------------------------------------------------
Tenant exercises the Second Expansion Option on or before January 1, 2001, then
(a) possession of the 2nd Floor Expansion Premises shall be delivered to Tenant
on the earlier of July 1, 2001 or the date on which Tenant occupies the 2nd
Floor Expansion Premises with Landlord's prior written consent (subject to
adjustment as provided below in this Exhibit, the date on which possession of
the 2nd Floor Expansion Premises is delivered to Tenant after the exercise of
the Second Expansion Option is herein referred to as the "2nd Floor Premises
------------------
Delivery Date"), and (b) Tenant and Landlord shall, within fifteen (15) days
-------------
after Landlord's receipt of the Second Expansion Election Notice, execute an
amendment to the Lease (the "Second Expansion Lease Amendment") reflecting the
--------------------------------
following: (i) that, if Landlord cannot acquire possession of all or any portion
of the 2nd Floor Expansion Premises before July 1, 2001 and deliver the same to
Tenant by such date, then (1) Tenant's obligation to pay increased Basic Rental,
Excess, Tax Excess and DCURD Excess as provided in the Second Expansion Lease
Amendment shall be waived until Landlord delivers possession of the applicable
portions of the 2nd Floor Expansion Premises at which time an appropriate
increase in Tenant's Proportionate Share, Basic Rental, Excess, Tax Excess and
DCURD Excess will occur, (2) Landlord shall not be in default under the Lease as
a result of such failure to deliver possession of all or any portion of the 2nd
Floor Expansion Premises to Tenant on or before July 1, 2001 or be liable for
damages therefor, (3) Tenant shall accept possession of the respective portions
of the 2nd Floor Expansion Premises when Landlord tenders possession thereof to
Tenant, (4) the new "cap" on the amount of DCURD Taxes payable with respect to
the 2nd Floor Expansion Premises as provided in Paragraph 7 of the Exhibit C
attached to the Lease; and (5) if the 2nd Floor Premises Delivery Date has not
occurred by November 1, 2001, Landlord shall lease the Alternative Premises (as
hereinafter defined) to Tenant "as is" on the terms and conditions that are
applicable thereto in this Exhibit; (ii) that Tenant shall, within 90 days after
the date of the execution of the Lease Amendment, deliver to Landlord for its
approval final working drawings, prepared by an architect that has been approved
by Landlord (which approval shall not be unreasonably withheld or delayed), of
all improvements that Tenant proposes to install in the 2nd Floor Expansion
Premises (such working drawings shall include the partition layout, ceiling
plan, electrical outlets and switches, telephone outlets, drawings for any
modifications to the mechanical and plumbing systems of the Building, and
detailed plans and specifications for the construction of the improvements
called for under the Lease Amendment in accordance with all applicable Laws);
(iii) the terms and conditions pursuant to which Tenant will deliver, and
Landlord will hold, the Second Expansion LC, which terms and conditions shall be
the same (subject to applicable changes in dates and amount) as set forth in the
Exhibit J-1 attached to the Lease (the amount of the Second Expansion LC may
include, without limitation, all brokerage commissions and all costs and
expenses [hard and soft] related to the design and construction [including the
management thereof] of leasehold alterations and improvements performed in
connection with the leasing of the 2nd Floor Expansion Premises to Tenant
pursuant to this Exhibit); and (iv) that the 2nd Floor Expansion Premises is to
be added to the Premises and will be leased by Tenant on the same terms as the
Lease except as follows:
(a) the number of rentable square feet in the Premises shall increase
by the number of rentable square feet in the 2nd Floor Expansion Premises,
and Tenant's Proportionate Share shall be adjusted accordingly, effective
as of the 2nd Floor Premises Delivery Date;
(b) Basic Rental for the 2nd Floor Expansion Premises shall be payable
on and after the 2nd Floor Premises Delivery Date and shall be equal to the
prevailing fair market rental rate in the Building on the 2nd Floor
Premises Delivery Date for space of equivalent quality, size, utility and
location, with the length of the term, the amount of the Second 2nd Floor
Finish-Out Allowance (as hereinafter defined) and credit standing and
financial condition of Tenant to be taken into account (the "Fair Market
-----------
Rental Rate");
-----------
(c) Landlord shall not provide to Tenant any allowances (e.g., moving
allowance, construction allowance, and the like) or other tenant
inducements other than a tenant improvement allowance (the "Second 2nd
----------
Floor Finish-Out Allowance") which Landlord, in its sole discretion
--------------------------
reasonably exercised, determines is appropriate taking into account the
Fair Market Rental Rate and the condition of, and leasehold improvements
located in, the 2nd Floor Expansion Premises, and such allowance shall be
provided to Tenant in the same manner as the Construction Allowance is
provided to Tenant pursuant to the Exhibit D attached to the Lease (i.e.,
as a credit to costs incurred in connection with the construction of
leasehold improvements to the 2nd Floor Expansion Premises);
G-2-1
<PAGE>
(d) the construction of any leasehold improvements to the 2nd Floor
Expansion Premises will be done pursuant to the terms and conditions set
forth in the Exhibit D attached to the Lease (with applicable revisions to
reflect the fact that the 2nd Floor Expansion Premises, not the Premises,
are being finished-out after the date of Tenant's timely exercise of the
Second Expansion Option) plus the addition of Landlord's standard lease
language regarding what constitutes a tenant delay and the effect thereof;
(e) the number of rentable square feet in the Premises shall, if
applicable, increase by the number of rentable square feet in the
Alternative Premises, and Tenant's Proportionate Share shall be adjusted
accordingly, effective as of the Alternative Premises Delivery Date (as
defined in Paragraph 2 below);
(f) Basic Rental for the Alternative Premises shall be payable on and
after the Alternative Premises Delivery Date until the 2nd Floor Premises
Delivery Date and shall be equal to the Fair Market Rental Rate;
(g) possession of the Alternative Premises shall be delivered to
Tenant in an "as is" condition and Tenant shall vacate and re-deliver
possession of the Alternative Premises to Landlord within five (5) business
days after the 2nd Floor Premises Delivery Date;
(h) Landlord shall not provide to Tenant any allowances (e.g., moving
allowance, construction allowance, and the like) or other tenant
inducements with respect to the Alternative Premises; and
(i) the Scheduled Expiration Date shall be modified and extended to
the date that is the last day of the sixtieth (60th) full calendar month
after the 2nd Floor Premises Delivery Date unless a longer term is agreed
to in writing by Landlord and Tenant.
2. Alternative Premises Definitions and Provisions. As used herein, the
-----------------------------------------------
term "Alternative Premises" shall mean the up to 20,000 contiguous rentable
--------------------
square feet of space in the Building which is Available For Rent (as hereinafter
defined) that Landlord identifies in a written notice (the "Alternative
-----------
Premises Notice") delivered to Tenant on or before November 1, 2001 in the event
---------------
Landlord reasonably believes that the 2nd Floor Premises Delivery Date will not
occur by such date. Landlord shall choose the portion(s) of the Available For
Rent space in the Building to be used for the Alternative Premises and identify
the same in the Alternative Premises Notice; provided, however, in no event
shall the space identified in the Alternative Premises Notice exceed 20,000
rentable square feet. Landlord shall also identify in the Alternative Premises
Notice the date or dates, as applicable, on which possession of the Alternative
Premises will be delivered to Tenant; provided, however, in no event shall the
earliest date of such delivery take place before the fourteenth (14th) day after
the date of Tenant's receipt of the Alternative Premises Notice. As used herein,
the term "Available For Rent" shall mean any vacant space in the Building that
------------------
is not then leased by a tenant and is not then subject to any expansion options,
rights of first offer or other options or rights of other tenants or other third
parties. As used herein, the term "Alternative Premises Delivery Date" shall
----------------------------------
mean the date on which possession of all or any portion of the Alternative
Premises has been delivered by Landlord to Tenant.
3. Termination of Tenant's Expansion Rights. Tenant's rights pursuant to
----------------------------------------
Paragraph 1 of this Exhibit and subparagraph (B) of the Exhibit G attached to
the Lease shall terminate if Tenant fails to timely exercise the Second
Expansion Option, time being of the essence with respect to Tenant's exercise
thereof.
G-2-2
<PAGE>
EXHIBIT G-3
This Exhibit G-3 (this "Exhibit") is attached to that certain Lease (the
-------
"Lease") by and between PEMBROKE REAL ESTATE, INC., as landlord, and SCIENT
-----
CORPORATION, a California corporation, as tenant. Any capitalized term not
defined in this Exhibit shall have the meaning assigned to it in the Lease
(including, without limitation, the Exhibit G attached thereto). The capitalized
terms which are defined in this Exhibit shall have the meanings assigned to them
herein in this Exhibit only and, if such terms are used in any other exhibits
attached to the Lease, such terms shall in such exhibits have the meanings given
to them therein. Tenant's rights under this Exhibit are conditioned upon
Tenant's satisfaction of the applicable requirements and conditions precedent
thereto contained in the Exhibit G attached to the Lease.
FIRST RIGHT OF FIRST OPPORTUNITY FOR THE 4TH FLOOR EXPANSION PREMISES
---------------------------------------------------------------------
1. Offer to Tenant of Right to Lease the 4th Floor Expansion Premises.
------------------------------------------------------------------
Once the 4th Floor Expansion Premises have become Available For Lease (as
defined in Paragraph 3 below), if Landlord has a bona fide prospect (the
"Prospect") for all or any portion(s) of the 4th Floor Expansion Premises,
--------
Landlord shall offer in writing (the "Offer Notice") to lease to Tenant all of
------------
the 4th Floor Expansion Premises (regardless of the amount of space offered to
the Prospect) on the same terms and conditions as offered to the Prospect except
as otherwise provided in this Exhibit. The Offer Notice shall specify the rent
to be paid for the 4th Floor Expansion Premises (regardless of the amount of
space offered to the Prospect), the other basic terms and conditions offered to
the Prospect (other than the length of the term offered to the Prospect), and
the date or dates, as applicable, on which the 4th Floor Expansion Premises
shall be included in the Premises (such date or dates is/are herein referred to
as the "Proposed Occupancy Date(s)"). Tenant shall notify Landlord in writing
--------------------------
within five (5) business days after Tenant's receipt of the Offer Notice whether
Tenant elects to lease the entire 4th Floor Expansion Premises on the Proposed
Occupancy Date(s) at the rental rate set forth in the Offer Notice (such written
notice is herein referred to as the "Election Notice"). Contemporaneously with
---------------
Tenant's delivery of the Election Notice, Tenant shall deliver to Landlord (i)
the most recent annual report or similar audited statement of Tenant's financial
condition for the preceding fiscal year, and (ii) Tenant's most recent quarterly
financial statement (audited, as applicable) and a year-to-date statement of
Tenant's operations and financial condition. Within five (5) business days after
Tenant's receipt of Landlord's written request for the same, Tenant shall
deliver to Landlord such other information with respect to Tenant that Landlord
may from time to time reasonably request in writing from Tenant after Landlord's
receipt of the Election Notice.
2. Effect of a Timely Acceptance of the First 4th Floor ROFO. If Tenant
---------------------------------------------------------
timely elects to lease the 4th Floor Expansion Premises by timely delivering to
Landlord the Election Notice, Landlord and Tenant shall, within 30 days after
Landlord's receipt of the Election Notice, execute an amendment to the Lease
(the "Lease Amendment") reflecting the following: (i) the fact that the 4th
---------------
Floor Expansion Premises is to be included in the Premises on the Proposed
Occupancy Date(s) and will be leased by Tenant on the same terms as the Lease
except that (a) the rentable area of the Premises shall be increased by the
rentable area of the 4th Floor Expansion Premises (and Tenant's Proportionate
Share shall be increased accordingly), (b) the Basic Rental shall be increased
by the amount specified for such space in the Offer Notice once possession of
the 4th Floor Expansion Premises is delivered by Landlord to Tenant (the date
possession of the 4th Floor Expansion Premises is delivered to Tenant after the
exercise of the First 4th Floor ROFO is herein referred to as the "First 4th
---------
Floor ROFO Delivery Date"), (c) the Excess, Tax Excess and DCURD Excess payable
------------------------
by Tenant shall be increased accordingly once possession of the 4th Floor
Expansion Premises is delivered by Landlord to Tenant, (d) the 4th Floor
Expansion Premises shall be accepted by Tenant in its "as is" condition and
Landlord shall not be obligated to provide Tenant with any leasehold
improvements, allowances (e.g., any moving allowance, construction allowance,
and the like) or other tenant inducements in connection therewith other than
those specified in the Offer Notice, (e) the Scheduled Expiration Date shall be
modified and extended to the date that is the last day of the sixtieth (60th)
full calendar month after the First 4th Floor ROFO Delivery Date unless a longer
term is agreed to in writing by Landlord and Tenant, and (f) other matters set
forth in the Lease which are inconsistent with the terms of the Offer Notice
shall be modified accordingly; (ii) that, if Landlord cannot acquire possession
of all or any portion of the 4th Floor Expansion Premises before the applicable
Proposed Occupancy Date(s) and deliver the same to Tenant by such date(s), then
(1) Tenant's obligation to pay increased Basic Rental, Excess, Tax Excess and
DCURD Excess for the 4th Floor Expansion Premises as provided in the Lease
Amendment shall be waived until Landlord delivers possession of the applicable
portions of the 4th Floor Expansion Premises (at which time an appropriate
increase in Tenant's Proportionate Share, Basic Rental, Excess, Tax Excess and
DCURD Excess will occur), (2) Landlord shall not be in default under the Lease
as a result of such failure to deliver possession of all or any portion of the
4th Floor Expansion Premises to Tenant on or before the applicable Proposed
Occupancy Date(s) or be liable for damages therefor, and (3) Tenant shall accept
possession of the respective portions of the 4th Floor Expansion Premises when
Landlord tenders possession thereof to Tenant; (iii) the terms and conditions
pursuant to which Tenant will deliver, and Landlord will hold, the First 4th
Floor ROFO LC, which terms and conditions shall be the same (subject to
applicable changes in dates and amount) as set forth in the Exhibit J-1 attached
to the Lease (the amount of the First 4th Floor ROFO LC may include, without
limitation, all brokerage commissions and all costs and expenses [hard and soft]
related to the design and construction [including the management thereof] of
leasehold alterations and improvements performed in connection with the leasing
of the 4th Floor Expansion Premises to Tenant pursuant to this Exhibit); and
(iv) such other amendments to the Lease as are necessary. If Tenant fails or is
unable to
G-3-1
<PAGE>
timely exercise the First 4th Floor ROFO, then such right shall lapse, time
being of the essence with respect to the exercise thereof, and Landlord may
thereafter lease all or any portion of the 4th Floor Expansion Premises to third
parties on such terms as Landlord may elect and free of any rights of Tenant
thereto. Tenant acknowledges and agrees that the First 4th Floor ROFO is a one-
time right and that if Tenant fails or is unable to timely exercise this right,
Tenant shall have no further rights pursuant to this Exhibit in and to the 4th
Floor Expansion Premises regardless of whether Landlord leases all or any
portion of such premises to the Prospect.
3. Available For Lease. For the purposes of this Exhibit, the 4th Floor
-------------------
Expansion Premises shall be considered "Available For Lease" if (A) the 4th
-------------------
Floor Expansion Premises is not then leased by a tenant and is not then subject
to any expansion options, rights of first offer or other options or rights of
other tenants or other third parties (or is subject to any of the foregoing, but
the party owning the same has waived, been deemed to have waived, or failed to
timely exercise the same with respect to the leasing of the applicable space to
Tenant pursuant to this Exhibit), or (B) if the 4th Floor Expansion Premises is
then leased and the applicable tenant's lease expires, or shall terminate
effective as of a date which is, less than 6 months from the date on which it is
being determined whether all or any portion of the 4th Floor Expansion Premises
is Available For Lease and such 4th Floor Expansion Premises is not then subject
to any expansion options, rights of first offer or other options or rights of
other tenants or other third parties (or is subject to any of the foregoing, but
the party owning the same has waived, been deemed to have waived, or failed to
timely exercise the same with respect to the leasing of the applicable space to
Tenant pursuant to this Exhibit).
4. Termination of Tenant's Expansion Rights. Tenant's rights pursuant to
----------------------------------------
Paragraphs 1 and 2 of this Exhibit and subparagraph (B-l) of the Exhibit G
attached to the Lease shall terminate if Tenant fails to timely exercise either
the First 4th Floor ROFO or the Second Expansion Option, time being of the
essence with respect to Tenant's exercise thereof.
G-3-2
<PAGE>
EXHIBIT G-4
This Exhibit G-4 (this "Exhibit") is attached to that certain Lease (the
-------
"Lease") by and between PEMBROKE REAL ESTATE, INC., as landlord, and SCIENT
-----
CORPORATION, a California corporation, as tenant. Any capitalized term not
defined in this Exhibit shall have the meaning assigned to it in the Lease
(including, without limitation, the Exhibit G attached thereto). The capitalized
terms which are defined in this Exhibit shall have the meanings assigned to them
herein in this Exhibit only and, if such terms are used in any other exhibits
attached to the Lease, such terms shall in such exhibits have the meanings given
to them therein. Tenant's rights under this Exhibit are conditioned upon
Tenant's satisfaction of the applicable requirements and conditions precedent
thereto contained in the Exhibit G attached to the Lease.
FIRST RIGHT OF FIRST OPPORTUNITY FOR THE 2ND FLOOR EXPANSION PREMISES
---------------------------------------------------------------------
1. Offer to Tenant of Right to Lease the 2nd Floor Expansion Premises.
------------------------------------------------------------------
Once the 2nd Floor Expansion Premises has become Available For Lease (as defined
in Paragraph 3 below), if Landlord has a bona fide prospect (the "Prospect") for
--------
all or any portion(s) of the 2nd Floor Expansion Premises, Landlord shall offer
in writing (the "Offer Notice") to lease to Tenant all of the 2nd Floor
------------
Expansion Premises (regardless of the amount of space offered to the Prospect)
on the same terms and conditions as offered to the Prospect except as otherwise
provided in this Exhibit. The Offer Notice shall specify the rent to be paid for
the 2nd Floor Expansion Premises (regardless of the amount of space offered to
the Prospect), the other basic terms and conditions offered to the Prospect
(other than the length of the term offered to the Prospect), and the date or
dates, as applicable, on which the 2nd Floor Expansion Premises shall be
included in the Premises (such date or dates is/are herein referred to as the
"Proposed Occupancy Date(s)"). Tenant shall notify Landlord in writing within
---------------------------
five (5) business days after Tenant's receipt of the Offer Notice whether Tenant
elects to lease the entire 2nd Floor Expansion Premises on the Proposed
Occupancy Date(s) at the rental rate set forth in the Offer Notice (such written
notice is herein referred to as the "Election Notice"). Contemporaneously with
---------------
Tenant's delivery of the Election Notice, Tenant shall deliver to Landlord (i)
the most recent annual report or similar audited statement of Tenant's financial
condition for the preceding fiscal year, and (ii) Tenant's most recent quarterly
financial statement (audited, as applicable) and a year-to-date statement of
Tenant's operations and financial condition. Within five (5) business days after
Tenant's receipt of Landlord's written request for the same, Tenant shall
deliver to Landlord such other information with respect to Tenant that Landlord
may from time to time reasonably request in writing from Tenant after Landlord's
receipt of the Election Notice.
2. Effect of a Timely Acceptance of the Offer Notice. If Tenant timely
-------------------------------------------------
elects to lease the 2nd Floor Expansion Premises by timely delivering to
Landlord the Election Notice, Landlord and Tenant shall, within 30 days after
Landlord's receipt of the Election Notice, execute an amendment to the Lease
(the "Lease Amendment") reflecting the following: (i) the fact that the 2nd
---------------
Floor Expansion Premises is to be included in the Premises on the Proposed
Occupancy Date(s) and will be leased by Tenant on the same terms as the Lease
except that (a) the rentable area of the Premises shall be increased by the
rentable area of the 2nd Floor Expansion Premises (and Tenant's Proportionate
Share shall be increased accordingly), (b) the Basic Rental shall be increased
by the amount specified for such space in the Offer Notice once possession of
the 2nd Floor Expansion Premises is delivered by Landlord to Tenant (the date
possession of the 2nd Floor Expansion Premises is delivered to Tenant after the
exercise of the 2nd Floor ROFO is herein referred to as the "2nd Floor
---------
ROFO Delivery Date"), (c) the Excess, Tax Excess and DCURD Excess payable by
------------------
Tenant shall be increased accordingly once possession of the 2nd Floor Expansion
Premises is delivered by Landlord to Tenant, (d) the 2nd Floor Expansion
Premises shall be accepted by Tenant in its "as is" condition and Landlord shall
not be obligated to provide Tenant with any leasehold improvements, allowances
(e.g., any moving allowance, construction allowance, and the like) or other
tenant inducements in connection therewith other than those specified in the
Offer Notice, (e) the Scheduled Expiration Date shall be modified and extended
to the date that is the last day of the sixtieth (60th) full calendar month
after the 2nd Floor ROFO Delivery Date unless a longer term is agreed to in
writing by Landlord and Tenant, and (f) other matters set forth in the Lease
which are inconsistent with the terms of the Offer Notice shall be modified
accordingly; (ii) that, if Landlord cannot acquire possession of all or any
portion of the 2nd Floor Expansion Premises before the applicable Proposed
Occupancy Date(s) and deliver the same to Tenant by such date(s), then (1)
Tenant's obligation to pay increased Basic Rental, Excess, Tax Excess and DCURD
Excess for the 2nd Floor Expansion Premises as provided in the Lease Amendment
shall be waived until Landlord delivers possession of the applicable portions of
the 2nd Floor Expansion Premises (at which time an appropriate increase in
Tenant's Proportionate Share, Basic Rental, Excess, Tax Excess and DCURD Excess
will occur), (2) Landlord shall not be in default under the Lease as a result of
such failure to deliver possession of all or any portion of the 2nd Floor
Expansion Premises to Tenant on or before the applicable Proposed Occupancy
Date(s) or be liable for damages therefor, and (3) Tenant shall accept
possession of the respective portions of the 2nd Floor Expansion Premises when
Landlord tenders possession thereof to Tenant; (iii) the terms and conditions
pursuant to which Tenant will deliver, and Landlord will hold, the 2nd Floor
ROFO LC, which terms and conditions shall be the same (subject to applicable
changes in dates and amount) as set forth in the Exhibit J-1 attached to the
Lease (the amount of the 2nd Floor ROFO LC may include, without limitation, all
brokerage commissions and all costs and expenses [hard and soft] related to the
design and construction [including the management thereof] of leasehold
alterations and improvements performed in connection with the leasing of the 2nd
Floor Expansion Premises to Tenant pursuant to this Exhibit); and (iv) such
other amendments to the Lease as are necessary. If Tenant fails or is unable to
timely
G-4-1
<PAGE>
exercise the 2nd Floor ROFO, then such right shall lapse, time being of the
essence with respect to the exercise thereof, and Landlord may thereafter lease
all or any portion of the 2nd Floor Expansion Premises to third parties on such
terms as Landlord may elect and free of any rights of Tenant thereto. Tenant
acknowledges and agrees that the 2nd Floor ROFO is a one-time right and that if
Tenant fails or is unable to timely exercise this right, Tenant shall have no
further rights pursuant to this Exhibit in and to the 2nd Floor Expansion
Premises regardless of whether Landlord leases all or any portion of such
premises to the Prospect.
3. Available For Lease. For the purposes of this Exhibit, the 2nd Floor
-------------------
Expansion Premises shall be considered "Available For Lease" if (A) the 2nd
-------------------
Floor Expansion Premises is not then leased by a tenant and is not then subject
to any expansion options, rights of first offer or other options or rights of
other tenants or other third parties (or is subject to any of the foregoing, but
the party owning the same has waived, been deemed to have waived, or failed to
timely exercise the same with respect to the leasing of the applicable space to
Tenant pursuant to this Exhibit), or (B) if the 2nd Floor Expansion Premises is
then leased and the applicable tenant's lease expires, or shall terminate
effective as of a date which is, less than 6 months from the date on which it is
being determined whether all or any portion of the 2nd Floor Expansion Premises
is Available For Lease and such 2nd Floor Expansion Premises is not then subject
to any expansion options, rights of first offer or other options or rights of
other tenants or other third parties (or is subject to any of the foregoing, but
the party owning the same has waived, been deemed to have waived, or failed to
timely exercise the same with respect to the leasing of the applicable space to
Tenant pursuant to this Exhibit).
4. Termination of Tenant's Expansion Rights. Tenant's rights pursuant to
----------------------------------------
Paragraphs 1 and 2 of this Exhibit and subparagraph (C) of the Exhibit G
attached to the Lease shall terminate if Tenant fails to timely exercise the 2nd
Floor ROFO, time being of the essence with respect to Tenant's exercise thereof
G-4-2
<PAGE>
EXHIBIT G-5
This Exhibit G-5 (this "Exhibit") is attached to that certain Lease (the
-------
"Lease") by and between PEMBROKE REAL ESTATE, INC., as landlord, and SCIENT
-----
CORPORATION, a California corporation, as tenant. Any capitalized term not
defined in this Exhibit shall have the meaning assigned to it in the Lease
(including, without limitation, the Exhibit G attached thereto). The capitalized
terms which are defined in this Exhibit shall have the meanings assigned to them
herein in this Exhibit only and, if such terms are used in any other exhibits
attached to the Lease, such terms shall in such exhibits have the meanings given
to them therein. Tenant's rights under this Exhibit are conditioned upon
Tenant's satisfaction of the applicable requirements and conditions precedent
thereto contained in the Exhibit G attached to the Lease.
FIRST EXPANSION OPTION FOR THE 4TH FLOOR EXPANSION PREMISES
-----------------------------------------------------------
1. Effect of a Timely Exercise of the Fourth Floor Expansion Option.
----------------------------------------------------------------
If Tenant exercises the Fourth Floor Expansion Option on or before January
1,2001, then (a) possession of the 4th Floor Expansion Premises shall be
delivered to Tenant on the earlier of July 1, 2001 or the date on which Tenant
occupies the 4th Floor Expansion Premises with Landlord's prior written consent
(subject to adjustment as provided below in this Exhibit, the date on which
possession of the 4th Floor Expansion Premises is delivered to Tenant after the
exercise of the Fourth Floor Expansion Option is herein referred to as the "4th
---
Floor Premises Delivery Date"), and (b) Tenant and Landlord shall, within
----------------------------
fifteen (15) days after Landlord's receipt of the Election Notice, execute an
amendment to the Lease (the "Lease Amendment") reflecting the following: (i)
---------------
that, if Landlord cannot acquire possession of all or any portion of the 4th
Floor Expansion Premises before July 1, 2001 and deliver the same to Tenant by
such date, then (1) Tenant's obligation to pay increased Basic Rental, Excess,
Tax Excess and DCURD Excess as provided in the Lease Amendment shall be waived
until Landlord delivers possession of the applicable portions of the 4th Floor
Expansion Premises at which time an appropriate increase in Tenant's
Proportionate Share, Basic Rental, Excess, Tax Excess and DCURD Excess will
occur, (2) Landlord shall not be in default under the Lease as a result of such
failure to deliver possession of all or any portion of the 4th Floor Expansion
Premises to Tenant on or before July 1, 2001 or be liable for damages therefor,
(3) Tenant shall accept possession of the respective portions of the 4th Floor
Expansion Premises when Landlord tenders possession thereof to Tenant, and (4)
if the 4th Floor Premises Delivery Date has not occurred by November 1, 2001,
Landlord shall lease the Alternative Premises (as defined in Paragraph 2 below)
to Tenant "as is" on the terms and conditions that are applicable thereto in
this Exhibit; (ii) that Tenant shall, within 90 days after the date of the
execution of the Lease Amendment, deliver to Landlord for its approval final
working drawings, prepared by an architect that has been approved by Landlord
(which approval shall not be unreasonably withheld or delayed), of all
improvements that Tenant proposes to install in the 4th Floor Expansion Premises
(such working drawings shall include the partition layout, ceiling plan,
electrical outlets and switches, telephone outlets, drawings for any
modifications to the mechanical and plumbing systems of the Building, and
detailed plans and specifications for the construction of the improvements
called for under the Lease Amendment in accordance with all applicable Laws);
(iii) the terms and conditions pursuant to which Tenant will deliver, and
Landlord will hold, the 4th Floor Expansion LC, which terms and conditions shall
be the same (subject to applicable changes in dates and amount) as set forth in
the Exhibit J-1 attached to the Lease (the amount of the 4th Floor Expansion LC
may include, without limitation, all brokerage commissions and all costs and
expenses [hard and soft] related to the design and construction [including the
management thereof] of leasehold alterations and improvements performed in
connection with the leasing of the 4th Floor Expansion Premises to Tenant
pursuant to this Exhibit); and (iv) that the 4th Floor Expansion Premises is to
be added to the Premises and will be leased by Tenant on the same terms as the
Lease except as follows:
(a) the number of rentable square feet in the Premises shall increase
by the number of rentable square feet in the 4th Floor Expansion Premises,
and Tenant's Proportionate Share shall be adjusted accordingly, effective
as of the 4th Floor Premises Delivery Date;
(b) Basic Rental for the 4th Floor Expansion Premises shall be payable
on and after the 4th Floor Premises Delivery Date and shall be equal to the
prevailing fair market rental rate in the Building on the 4th Floor
Premises Delivery Date for space of equivalent quality, size, utility and
location, with the length of the term, the amount of the 4th Floor Finish-
Out Allowance (as hereinafter defined) and credit standing and financial
condition of Tenant to be taken into account (the "Fair Market Rental
------------------
Rate");
----
(c) Landlord shall not provide to Tenant any allowances (e.g., moving
allowance, construction allowance, and the like) or other tenant
inducements other than a tenant improvement allowance (the "4th Floor
---------
Finish-Out Allowance") which Landlord, in its sole discretion reasonably
--------------------
exercised, determines is appropriate taking into account the Fair Market
Rental Rate and the condition of, and leasehold improvements located in,
the 4th Floor Expansion Premises, and such allowance shall be provided to
Tenant in the same manner as the Construction Allowance is provided to
Tenant pursuant to the Exhibit D attached to the Lease (i.e., as a credit
to costs incurred in connection with the construction of leasehold
improvements to the 4th Floor Expansion Premises);
G-5-1
<PAGE>
(d) the construction of any leasehold improvements to the 4th Floor
Expansion Premises will be done pursuant to the terms and conditions set
forth in the Exhibit D attached to the Lease (with applicable revisions to
reflect the fact that the 4th Floor Expansion Premises, not the Premises,
are being finished-out after the date of Tenant's timely exercise of the
Fourth Floor Expansion Option) plus the addition of Landlord's standard
lease language regarding what constitutes a tenant delay and the effect
thereof;
(e) the number of rentable square feet in the Premises shall, if
applicable, increase by the number of rentable square feet in the
Alternative Premises, and Tenant's Proportionate Share shall be adjusted
accordingly, effective as of the Alternative Premises Delivery Date (as
defined in Paragraph 2 below);
(f) Basic Rental for the Alternative Premises shall be payable on and
after the Alternative Premises Delivery Date until the 4th Floor Premises
Delivery Date and shall be equal to the Fair Market Rental Rate;
(g) possession of the Alternative Premises shall be delivered to
Tenant in an "as is" condition and Tenant shall vacate and re-deliver
possession of the Alternative Premises to Landlord within five (5) business
days after the 4th Floor Premises Delivery Date;
(h) Landlord shall not provide to Tenant any allowances (e.g., moving
allowance, construction allowance, and the like) or other tenant
inducements with respect to the Alternative Premises; and
(i) the Scheduled Expiration Date shall be modified and extended to
the date that is the last day of the sixtieth (60th) full calendar month
after the 4th Floor Premises Delivery Date unless a longer term is agreed
to in writing by Landlord and Tenant.
2. Alternative Premises Definitions and Provisions. As used in this
-----------------------------------------------
Exhibit, the term "Alternative Premises" shall mean the up to 20,000 contiguous
--------------------
rentable square feet of space in the Building which is Available For Rent (as
hereinafter defined) that Landlord identifies in a written notice (the
"Alternative Premises Notice") delivered to Tenant on or before July 1,2001 in
---------------------------
the event Landlord reasonably believes that the 4th Floor Premises Delivery Date
will not occur by such date. Landlord shall choose the portion(s) of the
Available For Rent space in the Building to be used for the Alternative Premises
and identify the same in the Alternative Premises Notice; provided, however, in
no event shall the space identified in the Alternative Premises Notice exceed
20,000 rentable square feet. Landlord shall also identify in the Alternative
Premises Notice the date or dates, as applicable, on which possession of the
Alternative Premises will be delivered to Tenant; provided, however, in no event
shall the earliest date of such delivery take place before the fourteenth (14th)
day after the date of Tenant's receipt of the Alternative Premises Notice. As
used herein, the term "Available For Rent" shall mean any vacant space in the
------------------
Building that is not then leased by a tenant and is not then subject to any
expansion options, rights of first offer or other options or rights of other
tenants or other third parties. As used herein, the term "Alternative Premises
--------------------
Delivery Date" shall mean the date on which possession of all or any portion
-------------
of the Alternative Premises has been delivered by Landlord to Tenant.
3. Termination of Tenant's Expansion Rights. Tenant's rights pursuant to
----------------------------------------
Paragraph 1 of this Exhibit and subparagraph (D) of the Exhibit G attached to
the Lease shall terminate if Tenant fails to timely exercise the Fourth Floor
Expansion Option, time being of the essence with respect to Tenant's exercise
thereof.
G-5-2
<PAGE>
EXHIBIT G-6
This Exhibit G-6 (this "Exhibit") is attached to that certain Lease (the
-------
"Lease") by and between PEMBROKE REAL ESTATE, INC., as landlord, and SCIENT
-----
CORPORATION, a California corporation, as tenant. Any capitalized term not
defined in this Exhibit shall have the meaning assigned to it in the Lease
(including, without limitation, the Exhibit G attached thereto). The capitalized
terms which are defined in this Exhibit shall have the meanings assigned to them
herein in this Exhibit only and, if such terms are used in any other exhibits
attached to the Lease, such terms shall in such exhibits have the meanings given
to them therein. Tenant's rights under this Exhibit are conditioned upon
Tenant's satisfaction of the applicable requirements and conditions precedent
thereto contained in the Exhibit G attached to the Lease.
2ND RIGHT OF FIRST OPPORTUNITY PROVISIONS FOR THE 4TH FLOOR EXPANSION PREMISES
------------------------------------------------------------------------------
1. Offer to Tenant of Right to Lease the 4th Floor Expansion Premises.
------------------------------------------------------------------
Once the 4th Floor Expansion Premises have become Available For Lease (as
defined in Paragraph 3 below), if Landlord has a bona fide prospect (the
"Prospect") for all or any portion(s) of the 4th Floor Expansion Premises,
--------
Landlord shall offer in writing (the "Offer Notice") to lease to Tenant all of
the 4th Floor Expansion Premises (regardless of the amount of space offered to
the Prospect) on the same terms and conditions as offered to the Prospect except
as otherwise provided in this Exhibit. The Offer Notice shall specify the rent
to be paid for the 4th Floor Expansion Premises (regardless of the amount of
space offered to the Prospect), the other basic terms and conditions offered to
the Prospect (other than the length of the term offered to the Prospect), and
the date or dates, as applicable, on which the 4th Floor Expansion Premises
shall be included in the Premises (such date or dates is/are herein referred to
as the "Proposed Occupancy Date(s)"). Tenant shall notify Landlord in writing
-------------------------
within five (5) business days after Tenant's receipt of the Offer Notice whether
Tenant elects to lease the entire 4th Floor Expansion Premises on the Proposed
Occupancy Date(s) at the rental rate set forth in the Offer Notice (such written
notice is herein referred to as the "Election Notice"). Contemporaneously with
---------------
Tenant's delivery of the Election Notice, Tenant shall deliver to Landlord (i)
the most recent annual report or similar audited statement of Tenant's financial
condition for the preceding fiscal year, and (ii) Tenant's most recent quarterly
financial statement (audited, as applicable) and a year-to-date statement of
Tenant's operations and financial condition. Within five (5) business days after
Tenant's receipt of Landlord's written request for the same, Tenant shall
deliver to Landlord such other information with respect to Tenant that Landlord
may from time to time reasonably request in writing from Tenant after Landlord's
receipt of the Election Notice.
2. Effect of a Timely Acceptance of the Second 4th Floor ROFO. If Tenant
----------------------------------------------------------
timely elects to lease the 4th Floor Expansion Premises by timely delivering to
Landlord the Election Notice, Landlord and Tenant shall, within 30 days after
Landlord's receipt of the Election Notice, execute an amendment to the Lease
(the "Lease Amendment") reflecting the following: (i) the fact that the 4th
---------------
Floor Expansion Premises is to be included in the Premises on the Proposed
Occupancy Date(s) and will be leased by Tenant on the same terms as the Lease
except that (a) the rentable area of the Premises shall be increased by the
rentable area of the 4th Floor Expansion Premises (and Tenant's Proportionate
Share shall be increased accordingly), (b) the Basic Rental shall be increased
by the amount specified for such space in the Offer Notice once possession of
the 4th Floor Expansion Premises is delivered by Landlord to Tenant (the date
possession of the 4th Floor Expansion Premises is delivered to Tenant after the
exercise of the Second 4th Floor ROFO is herein referred to as the "4th Floor
---------
ROFO Delivery Date"), (c) the Excess, Tax Excess and DCURD Excess payable by
------------------
Tenant shall be increased accordingly once possession of the 4th Floor Expansion
Premises is delivered by Landlord to Tenant, (d) the 4th Floor Expansion
Premises shall be accepted by Tenant in its "as is" condition and Landlord shall
not be obligated to provide Tenant with any leasehold improvements, allowances
(e.g., any moving allowance, construction allowance, and the like) or other
tenant inducements in connection therewith other than those specified in the
Offer Notice, (e) the Scheduled Expiration Date shall be modified and extended
to the date that is the last day of the sixtieth (60th) full calendar month
after the Second 4th Floor ROFO Delivery Date unless a longer term is agreed to
in writing by Landlord and Tenant, and (f) other matters set forth in the Lease
which are inconsistent with the terms of the Offer Notice shall be modified
accordingly; (ii) that, if Landlord cannot acquire possession of all or any
portion of the 4th Floor Expansion Premises before the applicable Proposed
Occupancy Date(s) and deliver the same to Tenant by such date(s), then (1)
Tenant's obligation to pay increased Basic Rental, Excess, Tax Excess and DCURD
Excess for the 4th Floor Expansion Premises as provided in the Lease Amendment
shall be waived until Landlord delivers possession of the applicable portions of
the 4th Floor Expansion Premises (at which time an appropriate increase in
Tenant's Proportionate Share, Basic Rental, Excess, Tax Excess and DCURD Excess
will occur), (2) Landlord shall not be in default under the Lease as a result of
such failure to deliver possession of all or any portion of the 4th Floor
Expansion Premises to Tenant on or before the applicable Proposed Occupancy
Date(s) or be liable for damages therefor, and (3) Tenant shall accept
possession of the respective portions of the 4th Floor Expansion Premises when
Landlord tenders possession thereof to Tenant; (iii) the terms and conditions
pursuant to which Tenant will deliver, and Landlord will hold, the Second 4th
Floor ROFO LC, which terms and conditions shall be the same (subject to
applicable changes in dates and amount) as set forth in the Exhibit J-1 attached
to the Lease (the amount of the Second 4th Floor ROFO LC may include, without
limitation, all brokerage commissions and all costs and expenses [hard and soft]
related to the design and construction [including the management thereof] of
leasehold alterations and improvements performed in connection with the leasing
of the 4th Floor Expansion Premises to Tenant pursuant to this Exhibit); and
(iv) such other amendments to the Lease as are necessary. If Tenant fails or is
unable to
G-6-1
<PAGE>
timely exercise the Second 4th Floor ROFO, then such right shall lapse, time
being of the essence with respect to the exercise thereof, and Landlord may
thereafter lease all or any portion of the 4th Floor Expansion Premises to third
parties on such terms as Landlord may elect and free of any rights of Tenant
thereto. Tenant acknowledges and agrees that the Second 4th Floor ROFO is a one-
time right and that if Tenant fails or is unable to timely exercise this right,
Tenant shall have no further rights pursuant to this Exhibit in and to the 4th
Floor Expansion Premises regardless of whether Landlord leases all or any
portion of such premises to the Prospect.
3. Available For Lease. For the purposes of this Exhibit, the 4th Floor
-------------------
Expansion Premises shall be considered "Available For Lease" if (A) the 4th
-------------------
Floor Expansion Premises is not then leased by a tenant and is not then subject
to any expansion options, rights of first offer or other options or rights of
other tenants or other third parties (or is subject to any of the foregoing, but
the party owning the same has waived, been deemed to have waived, or failed to
timely exercise the same with respect to the leasing of the applicable space to
Tenant pursuant to this Exhibit), or (B) if the 4th Floor Expansion Premises is
then leased and the applicable tenant's lease expires, or shall terminate
effective as of a date which is, less than 6 months from the date on which it is
being determined whether all or any portion of the 4th Floor Expansion Premises
is Available For Lease and such 4th Floor Expansion Premises is not then subject
to any expansion options, rights of first offer or other options or rights of
other tenants or other third parties (or is subject to any of the foregoing, but
the party owning the same has waived, been deemed to have waived, or failed to
timely exercise the same with respect to the leasing of the applicable space to
Tenant pursuant to this Exhibit).
4. Termination of Tenant's Expansion Rights. Tenant's rights pursuant to
----------------------------------------
Paragraphs 1 and 2 of this Exhibit and subparagraph (E) of the Exhibit G
attached to the Lease shall terminate if Tenant fails to timely exercise the
Second 4th Floor ROFO, time being of the essence with respect to Tenant's
exercise thereof.
G-6-2
<PAGE>
EXHIBIT G-7
This Exhibit G-7 (this "Exhibit") is attached to that certain Lease (the
-------
"Lease") by and between PEMBROKE REAL ESTATE, INC., as landlord, and SCIENT
-----
CORPORATION, a California corporation, as tenant. Any capitalized term not
defined in this Exhibit shall have the meaning assigned to it in the Lease
(including, without limitation, the Exhibit G attached thereto). The capitalized
terms which are defined in this Exhibit shall have the meanings assigned to them
herein in this Exhibit only and, if such terms are used in any other exhibits
attached to the Lease, such terms shall in such exhibits have the meanings given
to them therein. Tenant's rights under this Exhibit are conditioned upon
Tenant's satisfaction of the applicable requirements and conditions precedent
thereto contained in the Exhibit G attached to the Lease.
RIGHT OF FIRST OPPORTUNITY PROVISIONS FOR THE "TO BE DETERMINED" PREMISES
-------------------------------------------------------------------------
1. Offer to Tenant of Right to Lease the Additional Space. Once the
------------------------------------------------------
Additional Space has become Available For Lease (as defined in Paragraph 3
below), if Landlord has a bona fide prospect (the "Prospect") for all or any
--------
portion(s) of the Additional Space, Landlord shall offer in writing (the "Offer
-----
Notice") to lease to Tenant all of the Additional Space (regardless of the
------
amount of space offered to the Prospect) on the same terms and conditions as
offered to the Prospect except as otherwise provided in this Exhibit. The Offer
Notice shall specify the rent to be paid for the Additional Space (regardless of
the amount of space offered to the Prospect), the other terms and conditions
offered to the Prospect (other than the length of the term offered to the
Prospect), and the date or dates, as applicable, on which the Additional Space
shall be included in the Premises (such date or dates is/are herein referred to
as the "Proposed Occupancy Date(s)"). Tenant shall notify Landlord in writing
--------------------------
within five (5) business days after Tenant's receipt of the Offer Notice whether
Tenant elects to lease the entire Additional Space on the Proposed Occupancy
Date(s) at the rental rate set forth in the Offer Notice (such written notice is
herein referred to as the "Election Notice"). Contemporaneously with Tenant's
---------------
delivery of the Election Notice, Tenant shall deliver to Landlord (i) the most
recent annual report or similar audited statement of Tenant's financial
condition for the preceding fiscal year, and (ii) Tenant's most recent quarterly
financial statement (audited, as applicable) and a year-to-date statement of
Tenant's operations and financial condition. Within five (5) business days after
Tenant's receipt of Landlord's written request for the same, Tenant shall
deliver to Landlord such other information with respect to Tenant that Landlord
may from time to time reasonably request in writing from Tenant after Landlord's
receipt of the Election Notice.
2. Effect of a Timely Acceptance of the Offer Notice. If Tenant timely
-------------------------------------------------
elects to lease the Additional Space by timely delivering to Landlord the
Election Notice, Landlord and Tenant shall, within 30 days after Landlord's
receipt of the Election Notice, execute an amendment to this Lease (the "Lease
-----
Amendment") reflecting the following: (i) the fact that the Additional Space is
---------
to be included in the Premises on the Proposed Occupancy Date(s) and will be
leased by Tenant on the same terms as the Lease except that (a) the rentable
area of the Premises shall be increased by the rentable area of the Additional
Space (and Tenant's Proportionate Share shall be increased accordingly), (b) the
Basic Rental shall be increased by the amount specified for such space in the
Offer Notice once possession of the Additional Space is delivered by Landlord to
Tenant (the date possession of the Additional Space is delivered to Tenant after
the exercise of the Additional Space ROFO is herein referred to as the
"Additional Space Delivery Date"), (c) the Excess, Tax Excess and DCURD Excess
-------------------------------
payable by Tenant shall be increased accordingly once possession of the
Additional Space is delivered by Landlord to Tenant, (d) the Additional Space
shall be accepted by Tenant in its "as is" condition and Landlord shall not be
obligated to provide Tenant with any leasehold improvements, allowances (e.g.,
any moving allowance, construction allowance, and the like) or other tenant
inducements in connection therewith other than those specified in the Offer
Notice, (e) the Scheduled Expiration Date shall be modified and extended to the
date that is the last day of the sixtieth (60th) full calendar month after the
Additional Space Delivery Date unless a longer term is agreed to in writing by
Landlord, and (f) other matters set forth in the Lease which are inconsistent
with the terms of the Offer Notice shall be modified accordingly; (ii) that, if
Landlord cannot acquire possession of all or any portion of the Additional Space
before the applicable Proposed Occupancy Date(s) and deliver the same to Tenant
by such date(s), then (1) Tenant's obligation to pay increased Basic Rental,
Excess, Tax Excess and DCURD Excess for the Additional Space as provided in the
Lease Amendment shall be waived until Landlord delivers possession of the
applicable portions of the Additional Space (at which time an appropriate
increase in Tenant's Proportionate Share, Basic Rental, Excess, Tax Excess and
DCURD Excess will occur), (2) Landlord shall not be in default under the Lease
as a result of such failure to deliver possession of all or any portion of the
Additional Space to Tenant on or before the applicable Proposed Occupancy
Date(s) or be liable for damages therefor, and (3) Tenant shall accept
possession of the respective portions of the Additional Space when Landlord
tenders possession thereof to Tenant; (iii) the terms and conditions pursuant to
which Tenant will deliver, and Landlord will hold, the Additional Space LC,
which terms and conditions shall be the same (subject to applicable changes in
dates and amount) as set forth in the Exhibit J-1 attached to the Lease (the
amount of the Additional Space LC may include, without limitation, all brokerage
commissions and all costs and expenses [hard and soft] related to the design and
construction [including the management thereof] of leasehold alterations and
improvements performed in connection with the leasing of the Additional Space to
Tenant pursuant to this Exhibit); and (iv) such other amendments to the Lease as
are necessary. If Tenant fails or is unable to timely exercise the Additional
Space ROFO, then such right shall lapse, time being of the essence with respect
to the exercise thereof, and Landlord may thereafter lease all or any portion of
the Additional Space to third parties on such terms as Landlord may elect and
free of any rights of
G-7-1
<PAGE>
Tenant thereto. Tenant acknowledges and agrees that the Additional Space ROFO is
a one-time right and that if Tenant fails or is unable to timely exercise this
right, Tenant shall have no further rights pursuant to this Exhibit in and to
the Additional Space regardless of whether Landlord leases all or any portion of
such premises to the Prospect.
3. Available For Lease. For the purposes of this Exhibit, the Additional
-------------------
Space shall be considered "Available For Lease" if (A) the Additional Space is
-------------------
not then leased by a tenant and is not then subject to any expansion options,
rights of first offer or other options or rights of other tenants or other third
parties (or is subject to any of the foregoing, but the party owning the same
has waived, been deemed to have waived, or failed to timely exercise the same
with respect to the leasing of the applicable space to Tenant pursuant to this
Exhibit), or (B) if the Additional Space is then leased and the applicable
tenant's lease expires, or has been terminated effective as of a date which is,
less than 6 months from the date on which it is being determined whether all or
any portion of the Additional Space is Available For Lease and such Additional
Space is not then subject to any expansion options, rights of first offer or
other options or rights of other tenants or other third parties (or is subject
to any of the foregoing, but the party owning the same has waived, been deemed
to have waived, or failed to timely exercise the same with respect to the
leasing of the applicable space to Tenant pursuant to this Exhibit).
4. Termination of Tenant's Expansion Rights. Tenant's rights pursuant to
----------------------------------------
Paragraphs 1 and 2 of this Exhibit and subparagraph (G) of the Exhibit G
attached to the Lease shall terminate on the earlier to occur of the following:
(1) March 30, 2001; or (2) the date on which (a) the Lease or Tenant's right to
possession of all or any portion of the Premises is terminated, or (b) Tenant
assigns any of its interest in the Lease or sublets any portion of the Premises
(other than any Permitted Transfer Without Landlord Consent).
G-7-2
<PAGE>
EXHIBIT H
WAIVER OF RIGHTS UNDER THE
DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT
---------------------------------------------------
Pursuant to, and to the extent permitted by Section 17.42 of the Texas
Deceptive Trade Practices -Consumer Protection Act (Tex. Bus. & Com. Code Ann.
(S) 17.41, et. seq.), Landlord and Tenant hereby agree that the Texas Deceptive
Trade Practices - Consumer Protection Act is waived and shall have no
applicability to this Lease, except that such waiver shall not apply to Section
17.555 of such Act.
H-1
<PAGE>
EXHIBIT I
CONFIDENTIALITY
---------------
Tenant acknowledges and agrees that the rental rates and other terms of
this Lease must be held confidential and may not be disclosed by Tenant to any
person or entity, without in each case Landlord's prior written consent. If
Tenant or its partners, agents, employees, officers, directors, attorneys or
other representatives (with the exception of Tenant, the foregoing persons or
entities are herein collectively referred to as the "Tenant Related Parties")
----------------------
violate this provision, Landlord shall be entitled to seek any and all relief
available at law or equity including, without limitation, the right to seek an
injunction prohibiting such violation. Tenant further agrees to pay on demand to
Landlord an amount equal to all of Landlord's lost profits, opportunity costs
and other damages resulting from Tenant's or any of the Tenant Related Parties'
disclosure of such confidential information in violation of this Exhibit I.
Notwithstanding the foregoing, Tenant may disclose the terms of this Lease to
its accountants and other financial representatives as long as such
representatives agree in writing to hold any information concerning this Lease
in confidence. Tenant will remain responsible for any violation by such
representatives. Tenant and the Tenant Related Parties shall additionally have
the right to disclose the terms and conditions of this Lease as follows: (a) to
the extent disclosure of some or all of such terms, conditions or provisions may
be required by law; (b) the financial terms of this Lease to the extent that the
disclosure of the same is required in connection with any financing sought by
Tenant; and (c) in connection with the enforcement of Tenant's rights hereunder.
The covenants of Tenant in this Exhibit I have been given by Tenant as a
material inducement to Landlord to lease the Premises to Tenant.
I-1
<PAGE>
EXHIBIT J
This Exhibit J (this "Exhibit") is attached to that certain Lease (the
-------
"Lease") by and between PEMBROKE REAL ESTATE, INC., as landlord, and SCIENT
-----
CORPORATION, a California corporation, as tenant. Any capitalized term not
defined in this Exhibit shall have the meaning assigned to it in the Lease. The
capitalized terms which are defined in this Exhibit shall have the meanings
assigned to them herein in this Exhibit only and, if such terms are used in any
other exhibits attached to the Lease, such terms shall in such exhibits have the
meanings given to them therein.
LETTER OF CREDIT PROVISIONS
---------------------------
1. Contemporaneously with its execution of the Lease, Tenant shall deliver
to Landlord an irrevocable letter of credit (the "Initial Letter of Credit") in
------------------------
the amount of $528,162.52, in substantially the form set forth in the Rider A
attached to the Lease and otherwise in form and content acceptable to Landlord.
The Initial Letter of Credit and any other Letter of Credit (as hereinafter
defined) shall be issued by a Dallas, Texas branch office of either (i) Bank of
America, or (ii) another financial institution acceptable to Landlord for the
benefit of Landlord or its successors or assigns. As used herein, the term
"Letter of Credit" shall mean the applicable irrevocable letter of credit
----------------
(including, without limitation, the Initial Letter of Credit) delivered to
Landlord by Tenant as required or permitted by this Exhibit, each of which shall
be in substantially the form set forth in the Rider A attached to the Lease and
otherwise in form and content and by an issuer acceptable to Landlord and,
except with respect to the Initial Letter of Credit, shall, except as otherwise
provided in Paragraph 4 below, be in an amount equal to the amount of the Total
Leasing Costs (as hereinafter defined) less all theretofore accrued Annual
Reductions (as defined in Paragraph 3 below). As used in this Exhibit, the term
"Total Leasing Costs" shall mean all costs and expenses actually incurred by
-------------------
Landlord in connection with the leasing and finish-out of all of the Initial
Premises, which costs and expenses shall include, without limitation, the
following: (1) all costs and expenses (hard and soft) actually incurred by
Landlord to satisfy its obligations set forth in the Exhibit D attached to the
Lease and to otherwise finish-out the Initial Premises for Tenant; (2) any costs
and/or expenses incurred by or on behalf of Tenant for which Tenant is
reimbursed using any tenant improvement allowance(s) provided by Landlord to
Tenant; (3) any and all fees and expenses related to space planning,
architectural design and the preparation of plans and specifications for tenant
improvements and other work performed in connection with the finish-out of the
Initial Premises; and (4) compensation paid to brokers representing Landlord and
brokers representing Tenant in connection with the leasing of the Initial
Premises.
2. The Initial Letter of Credit and any replacement Letter of Credit
delivered to Landlord pursuant to this Exhibit shall have an expiration date not
earlier than one (1) year after the issuance date of the Initial Letter of
Credit or such replacement Letter of Credit. On or before the thirtieth (30th)
day prior to the expiration date of any Letter of Credit, Tenant shall deliver
to Landlord a replacement Letter of Credit in the form, content and amount
required or permitted by this Exhibit and, upon Landlord's receipt of such
replacement Letter of Credit, Landlord shall deliver to Tenant the Letter of
Credit then held by Landlord. Additionally, after Tenant's delivery of the
Initial Letter of Credit and within ten (10) business days after Tenant's
receipt of written notice from Landlord or any agent or attorney of Landlord of
the amount of the Total Leasing Costs, Tenant shall, from time to time, deliver
to Landlord a replacement Letter of Credit in the amount of such Total Leasing
Costs (less any Annual Reduction [as defined in Paragraph 3 below] or IPO
Reduction [as defined in Paragraph 4 below], if any, theretofore available to
Tenant) and otherwise in form and content and by an issuer required by this
Exhibit. Contemporaneously with the delivery to Landlord of the replacement
Letter of Credit required by the immediately preceding sentence, Landlord shall
deliver to Tenant the Letter of Credit then held by Landlord.
3. Except as otherwise provided in Paragraph 4 below, upon the expiration
of the First Letter of Credit Period (as hereinafter defined) and each and every
Letter of Credit Year (as hereinafter defined) thereafter and provided that at
the time of such expiration no Event of Default has occurred and is continuing
or any event which with the giving of notice or the passage of time, or both,
would constitute an Event of Default, Tenant shall be entitled to a reduction in
the amount of the Letter of Credit required hereby (each such reduction being
herein called an "Annual Reduction" and all such reductions being herein
----------------
collectively called "Annual Reductions") equal to twenty percent (20%) of the
-----------------
amount of the Letter of Credit then held by Landlord; provided, however,
notwithstanding anything to the contrary contained in this Exhibit, in no event
shall the amount of the Letter of Credit ever be reduced to less than
$178,952.00. As used herein, the term "First Letter of Credit Period" shall mean
-----------------------------
the period of time beginning on May 1, 1999 and ending on December 31, 2000, and
the term "Letter of Credit Year" shall mean each 12 calendar month period
---------------------
following the expiration of the First Letter of Credit Period. By way of example
only, if, upon the expiration of the First Letter of Credit Period, neither (i)
an Event of Default, nor (ii) any event which with the giving of notice or the
passage of time, or both, would constitute an Event of Default, had occurred and
been continuing on such expiration date, Tenant would be entitled to a reduction
of $105,632.50 (i.e., 20% of the amount of the Initial Letter of Credit).
Provided that at the time of such delivery no Event of Default has occurred and
is continuing or any event which with the giving of notice or the passage of
time, or both, would constitute an Event of Default, Tenant shall have the right
at any time to deliver to Landlord a replacement Letter of Credit in the amount
required by this Exhibit (i.e., the amount of the Total Leasing Costs less all
theretofore accrued Annual Reductions) and otherwise satisfying the requirements
of this Exhibit. Contemporaneously with the delivery to Landlord of the
J-1
<PAGE>
replacement Letter of Credit permitted by the immediately preceding sentence,
Landlord shall deliver to Tenant the Letter of Credit then being held by
Landlord.
4. On the later to occur of (i) the last day of the first full calendar
quarter following the date of the initial public offering of Tenant's stock, or
(ii) December 31, 1999 (such later date is herein referred to as the "IPO
---
Reduction Date"), and provided that on the IPO Reduction Date (1) Tenant has
--------------
raised at least $50,700,000.00 in its initial public offering of stock (with
this amount less underwriting discounts and commissions to be used for working
capital), (2) no Event of Default has occurred and is continuing or any event
which with the giving of notice or the passage of time, or both, would
constitute an Event of Default, and (3) Tenant is a publicly-held company in
good standing with the United States Securities and Exchange Commission with its
stock being publicly traded on the New York Stock Exchange, the American Stock
Exchange or the NASDAQ, Tenant shall be entitled to a reduction (the "IPO
---
Reduction") in the amount of the Letter of Credit required hereby as follows:
---------
The amount of the Letter of Credit shall be reduced to $178,952.00 for the Term
of the Lease.
5. The failure of Tenant to deliver any replacement Letter of Credit
required by this Exhibit on or before the date required hereby shall constitute
an Event of Default until such time as the applicable replacement Letter of
Credit required by this Exhibit is delivered to Landlord, and Landlord shall
thereafter have the right to draft upon the Letter of Credit then held by
Landlord to obtain funds in the amount of all of the amount of the Letter of
Credit then held by Landlord (or, if Landlord shall, in its sole and absolute
discretion, elect to draft upon the Letter of Credit to obtain less than all of
the amount of the Letter of Credit then held by Landlord, Landlord may draft
upon such Letter of Credit in such amount). To obtain drafts upon any Letter of
Credit, Landlord must merely (i) present the Letter of Credit, (ii) submit a
written draft indicating the amount to be obtained by Landlord, and (iii)
deliver to the issuer of the Letter of Credit a statement that Tenant is in
default under the Lease. Upon the expiration of the Term (such date is herein
referred to as the "Letter of Credit Return Date"), and provided that no Event
----------------------------
of Default has occurred and is continuing or any event which with the giving of
notice or the passage of time, or both, could constitute an Event of Default,
Landlord shall (or, if the Letter of Credit Return Date occurs prior to the
expiration of the initial Term, on the first business day after Landlord' s
receipt of Tenant's written request for the return of the applicable Letter of
Credit) return the Letter of Credit then held by Landlord to Tenant (or, if
requested in writing by Tenant, to the issuer thereof).
6. Neither the Letter of Credit itself nor the funds available to Landlord
pursuant to the Letter of Credit shall be considered an advance payment of
rental or a measure of Landlord's damages in case of default by Tenant. After
the occurrence and during the continuance of any Event of Default, Landlord may,
but shall not be required to, from time to time, without prejudice to any other
remedy Landlord might have, draft upon the Letter of Credit to obtain funds in
the amount of all of the amount of the Letter of Credit then held by Landlord
(or, if Landlord shall, in its sole and absolute discretion, elect to draft upon
the Letter of Credit to obtain less than all of the amount of the Letter of
Credit then held by Landlord, Landlord may draft upon such Letter of Credit in
such amount). The funds obtained by Landlord pursuant to any draft upon the
Letter of Credit shall be used, applied or retained by Landlord, in such order
as Landlord in its sole and absolute discretion shall elect, for any of the
following: (i) for the payment of Basic Rental or any other sum due and payable,
or to be deposited, by Tenant pursuant to the Lease; (ii) for the payment of any
other amount which Landlord may spend or become obligated to spend by reason of
Tenant's default; (iii) to compensate Landlord for any other loss or damage
which Landlord may suffer by reason of Tenant's default including, without
limitation, costs and attorneys' fees incurred by Landlord in connection with
Landlord's recovery of possession of the Premises (including, without
limitation, any expenses incurred by or on behalf of Landlord to remove any
abandoned property from the Premises and to otherwise satisfy Tenant's delivery
of possession obligations set forth in the Lease); and/or (iv) to reimburse
Landlord for all of the unamortized Total Leasing Costs using a sixty (60) month
term and a 10% per annum interest rate factor.
7. The IPO Reduction and all other terms and provisions set forth in this
Exhibit will not apply to any letters of credit (other than the Initial Letter
of Credit and all Letters of Credit given in replacement of the Initial Letter
of Credit) heretofore delivered to Landlord by Tenant in connection with the
leasing of space in the Building other than the Initial Premises.
J-2
<PAGE>
EXHIBIT J-1
This Exhibit J-1 (this "Exhibit") is attached to that certain Lease (the
-------
"Lease") by and between PEMBROKE REAL ESTATE, INC., as landlord, and SCIENT
-----
CORPORATION, a California corporation, as tenant. Any capitalized term not
defined in this Exhibit shall have the meaning assigned to it in the Lease
(including, without limitation, the Exhibit D attached thereto). The capitalized
terms which are defined in this Exhibit shall have the meanings assigned to them
herein in this Exhibit only and, if such terms are used in any other exhibits
attached to the Lease, such terms shall in such exhibits have the meanings given
to them therein. The rights and obligations of Landlord and Tenant set forth in
this Exhibit shall exist and be in force and effect provided that Tenant is
obligated pursuant to the Exhibit D attached to the Lease to deliver to Landlord
the Extra Construction Allowance LC (as defined in Exhibit D).
EXTRA CONSTRUCTION ALLOWANCE LETTER OF CREDIT PROVISIONS
--------------------------------------------------------
1. On or before the delivery date set forth in Exhibit D, Tenant shall
deliver the Extra Construction Allowance LC to Landlord. The Extra Construction
Allowance LC shall be in substantially the form set forth in the Rider A
attached to the Lease and otherwise in form and content acceptable to Landlord.
The Extra Construction Allowance LC and any other Letter of Credit (as
hereinafter defined) shall be issued by a Dallas, Texas branch office of either
(i) Bank of America, or (ii) another financial institution acceptable to
Landlord for the benefit of Landlord or its successors or assigns. As used
herein, the term "Letter of Credit" shall mean the applicable irrevocable letter
----------------
of credit (including, without limitation, the Extra Construction Allowance LC)
delivered to Landlord by Tenant as required or permitted by this Exhibit, each
of which shall be in substantially the form set forth in the Rider A attached to
the Lease and otherwise in form and content and by an issuer acceptable to
Landlord and, except with respect to the Extra Construction Allowance LC, shall
be in an amount equal to the amount of the Extra Construction Allowance (as
defined in Exhibit D) less all theretofore accrued Annual Reductions (as defined
in Paragraph 3 below).
2. The Extra Construction Allowance LC and any replacement Letter of
Credit delivered to Landlord pursuant to this Exhibit shall have an expiration
date not earlier than one (1) year after the issuance date of the Extra
Construction Allowance LC or such replacement Letter of Credit. On or before the
thirtieth (30th) day prior to the expiration date of any Letter of Credit,
Tenant shall deliver to Landlord a replacement Letter of Credit in the form,
content and amount required or permitted by this Exhibit and, upon Landlord's
receipt of such replacement Letter of Credit, Landlord shall deliver to Tenant
the Letter of Credit then held by Landlord. Additionally, after Tenant's
delivery of the Extra Construction Allowance LC and within ten (10) business
days after Tenant's receipt of written notice from Landlord or any agent or
attorney of Landlord of the amount of the Extra Construction Allowance, Tenant
shall, from time to time, deliver to Landlord a replacement Letter of Credit in
the amount of such Extra Construction Allowance (less any Annual Reduction [as
defined in Paragraph 3 below], if any, theretofore available to Tenant) and
otherwise in form and content and by an issuer required by this Exhibit.
Contemporaneously with the delivery to Landlord of the replacement Letter of
Credit required by the immediately preceding sentence, Landlord shall deliver to
Tenant the Letter of Credit then held by Landlord.
3. Upon the expiration of the First Extra Letter of Credit Period (as
hereinafter defined) and each and every Letter of Credit Year (as hereinafter
defined) thereafter and provided that at the time of such expiration no Event of
Default has occurred and is continuing or any event which with the giving of
notice or the passage of time, or both, would constitute an Event of Default,
Tenant shall be entitled to a reduction in the amount of the Letter of Credit
required hereby (each such reduction being herein called an "Annual Reduction"
----------------
and all such reductions being herein collectively called "Annual Reductions")
-----------------
equal to an amount based on an amortization of the amount of the Extra
Construction Allowance at 10% on an annual basis compounded monthly. As used
herein, the term "First Extra Letter of Credit Period" shall mean the period of
-----------------------------------
time beginning on May 1, 1999 and ending on December 31, 2000, and the term
"Letter of Credit Year" shall mean each 12 calendar month period following the
---------------------
expiration of the First Extra Letter of Credit Period. By way of example only,
if, (1)the amount of the Extra Construction Allowance was $45,690.00, and
(2)upon the expiration of the First Extra Letter of Credit Period, neither (i)
an Event of Default, nor (ii) any event which with the giving of notice or the
passage of time, or both, would constitute an Event of Default, had occurred and
been continuing on such expiration date, Tenant would be entitled to a reduction
of $6,626.64 (i.e., the amortized amount of the Extra Construction Allowance on
the date of the expiration of the First Extra Letter of Credit Period based a 60
month term and a 10% per annum interest rate factor). Provided that at the time
of such delivery no Event of Default has occurred and is continuing or any event
which with the giving of notice or the passage of time, or both, would
constitute an Event of Default, Tenant shall have the right at any time to
deliver to Landlord a replacement Letter of Credit in the amount required by
this Exhibit (i.e., the amount of the Extra Construction Allowance less all
theretofore accrued Annual Reductions) and otherwise satisfying the requirements
of this Exhibit. Contemporaneously with the delivery to Landlord of the
replacement Letter of Credit permitted by the immediately preceding sentence,
Landlord shall deliver to Tenant the Letter of Credit then being held by
Landlord.
4. The failure of Tenant to deliver any replacement Letter of Credit
required by this Exhibit on or before the date required hereby shall constitute
an Event of Default until such time as the applicable
J-1-1
<PAGE>
replacement Letter of Credit required by this Exhibit is delivered to Landlord,
and Landlord shall thereafter have the right to draft upon the Letter of Credit
then held by Landlord to obtain funds in the amount of all of the amount of the
Letter of Credit then held by Landlord (or, if Landlord shall, in its sole and
absolute discretion, elect to draft upon the Letter of Credit to obtain less
than all of the amount of the Letter of Credit then held by Landlord, Landlord
may draft upon such Letter of Credit in such amount). To obtain drafts upon any
Letter of Credit, Landlord must merely (i) present the Letter of Credit, (ii)
submit a written draft indicating the amount to be obtained by Landlord, and
(iii) deliver to the issuer of the Letter of Credit a statement that Tenant is
in default under the Lease. Upon the expiration of the Term (such date is herein
referred to as the "Letter of Credit Return Date"), and provided that no Event
----------------------------
of Default has occurred and is continuing or any event which with the giving of
notice or the passage of time, or both, could constitute an Event of Default,
Landlord shall (or, if the Letter of Credit Return Date occurs prior to the
expiration of the initial Term, on the first business day after Landlord's
receipt of Tenant' s written request for the return of the applicable Letter of
Credit) return the Letter of Credit then held by Landlord to Tenant (or, if
requested in writing by Tenant, to the issuer thereof).
5. Neither the Letter of Credit itself nor the funds available to Landlord
pursuant to the Letter of Credit shall be considered an advance payment of
rental or a measure of Landlord's damages in case of default by Tenant. After
the occurrence and during the continuance of any Event of Default, Landlord may,
but shall not be required to, from time to time, without prejudice to any other
remedy Landlord might have, draft upon the Letter of Credit to obtain funds in
the amount of all of the amount of the Letter of Credit then held by Landlord
(or, if Landlord shall, in its sole and absolute discretion, elect to draft upon
the Letter of Credit to obtain less than all of the amount of the Letter of
Credit then held by Landlord, Landlord may draft upon such Letter of Credit in
such amount). The funds obtained by Landlord pursuant to any draft upon the
Letter of Credit shall be used, applied or retained by Landlord, in such order
as Landlord in its sole and absolute discretion shall elect, for any of the
following: (i) for the payment of Basic Rental or any other sum due and payable,
or to be deposited, by Tenant pursuant to the Lease; (ii) for the payment of any
other amount which Landlord may spend or become obligated to spend by reason of
Tenant's default; (iii) to compensate Landlord for any other loss or damage
which Landlord may suffer by reason of Tenant's default including, without
limitation, costs and attorneys' fees incurred by Landlord in connection with
Landlord's recovery of possession of the Premises (including, without
limitation, any expenses incurred by or on behalf of Landlord to remove any
abandoned property from the Premises and to otherwise satisfy Tenant's delivery
of possession obligations set forth in the Lease); and/or (iv) to reimburse
Landlord for all of the unamortized Extra Construction Allowance using a sixty
(60) month term and a 10% per annum interest rate factor.
J-1-2
<PAGE>
EXHIBIT K
This Exhibit K (this "Exhibit") is attached to that certain Lease (the
-------
"Lease") by and between PEMBROKE REAL ESTATE, INC., as landlord, and SCIENT
-----
CORPORATION, a California corporation, as tenant. Any capitalized term not
defined in this Exhibit shall have the meaning assigned to it in the Lease.
ARBITRATION PROVISIONS
----------------------
The disputes or disagreements which in Section 7.(0 of the Lease are
specifically identified as a dispute or disagreement to be submitted for
resolution by binding arbitration (herein referred to as "Disputes Subject
----------------
to Arbitration") shall be settled by arbitration administered by the American
--------------
Arbitration Association (the "AAA") under its Commercial Arbitration Rules (the
---
"Rules"), and judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof. Landlord and Tenant agree as follows:
(1) all Disputes Subject to Arbitration which are not resolved by such parties
within the time period set forth in Section 7.(f) of the Lease shall be
submitted to arbitration (using three arbitrators selected as provided below)
administered by the AAA under the Rules; and (2) both Landlord and Tenant will
abide by and perform any award rendered by the arbitrators.
In the event of a need for the submission of any Disputes Subject to
Arbitration to arbitration, the initiating party shall (1) give written notice
to the other party of its intention to arbitrate, which notice must contain a
statement setting forth the nature of the dispute, the amount involved, if any,
the remedy sought, and the hearing locale requested, and (2) file at any
regional office of the AAA three copies of such written notice, three copies of
the applicable arbitration provisions of the Lease, and the appropriate filing
fee as provided by the Rules. Within fifteen (15) days after the non-initiating
party has received notice of such filing, Landlord and Tenant each may appoint
one arbitrator by identifying such appointed arbitrator in a written notice
delivered to the other party and filing such written notice at the appropriate
regional office of the AAA within such fifteen (15) day period. If either
Landlord or Tenant fail to so appoint an arbitrator, the AAA shall, as provided
in the Rules, appoint the arbitrator to have been selected by such party or
parties and the third arbitrator. The arbitration proceedings shall thereafter
take place as provided by the Rules. As provided in the Lease, the unsuccessful
party in the arbitration proceedings shall promptly pay to the successful party
all costs and expenses (including, without limitation, court costs and
attorneys' fees) incurred therein; provided, however, Landlord and Tenant shall
each be responsible for 50% of (i) all filing fees related to such arbitration
proceedings, and (ii) all fees payable to one or more of the arbitrators.
K-1
<PAGE>
RIDER A
This Rider A (this "Rider") is attached to that certain Lease (the "Lease")
----- -----
by and between PEMBROKE REAL ESTATE, INC., as landlord, and SCIENT CORPORATION,
a California corporation, as tenant.
FORM OF INITIAL LETTER OF CREDIT AND EXTRA CONSTRUCTION ALLOWANCE LC
--------------------------------------------------------------------
[To come]
Rider A-1
<PAGE>
RIDER A
This Rider A (this "Rider") is attached to that certain Lease (the "Lease")
----- -----
by and between PEMBROKE REAL ESTATE, INC., as landlord, and SCIENT CORPORATION,
a California corporation, as tenant.
FORM OF INITIAL LETTER OF CREDIT AND EXTRA CONSTRUCTION ALLOWANCE LC
--------------------------------------------------------------------
[To come]
Rider A-1
<PAGE>
BASIC LEASE INFORMATION
Lease Date: May 1, 1999
Tenant: Scient Corporation, a California corporation
Tenant's Address: 444 Market Street, 28th Floor, San Francisco,
California 94111
Contact: Jeff Van Zanten (Telephone Number: 415/733-8200)
Landlord: Pembroke Real Estate, Inc.
Landlord's Address: c/o Doug Lanois
82 Devonshire Street
Mail Zone R27B
Boston, Massachusetts 02109-3614
Contact: Jones Lang LaSalle Management Services, Inc. (Telephone
No: 972/584-7272)
Premises: Suite No. [300] in the office building (the "Building")
--------
currently known as Waterway Tower and located on the
land (the "Land") described as abstract No. 1452-1,
----
Irving, Dallas County, Texas, which Suite consists of
all of the 3rd floor premises (the "Initial Premises")
----------------
outlined on the plan attached as Exhibit A to this
Lease (as hereinafter defined). As used in this Lease,
the term "Premises" shall mean the Initial Premises
--------
together with any other space in the Building hereafter
leased to Tenant pursuant to the terms and provisions
of this Lease and the Exhibits attached hereto. The
street address of the Building is 433 East Las Colinas
Boulevard, Irving, Texas 75039. The portions of the
Premises to be occupied by Tenant during the Term (as
hereinafter defined), and the periods of time of such
occupancy, are more particularly set forth in this
Lease.
Term: Commencing on May 1, 1999 (the "Commencement Date"),
-----------------
and ending at 5:00 p.m. on December 31, 2004, subject
to adjustment and earlier termination as provided in
this Lease and the Exhibits attached hereto (the
"Term"). The possession of the Initial Premises shall
be as follows:
RSF Floor Rental Rate Term
--------------- ----- ----------- ---------------
5,000-10,000* 3rd Free 5/1/99-6/30/99
11,422 3rd Free 7/1/99-12/31/99
11,423 3rd $23.50 + E 7/1/99-12/31/99
22,845 3rd $23.50 + E 1/1/00-12/31/04
*Location on the 3rd floor of the Building and actual
rentable square feet to be determined at a later date.
Basic Rental: RSF Floor Monthly Basic Rental Term
------------- ----- -------------------- ---------------
5,000-10,000* 3rd Free 5/1/99-6/30/99
11,422 3rd Free 7/1/99-12/31/99
11,423 3rd $22,370.04 7/1/99-12/31/99
22,845 3rd $44,738.13 1/1/00-12/31/04
*Location on the 3rd floor of the Building and actual
rentable square feet to be determined at a later date.
Security Deposit: $44,738.13
Rent: Basic Rental, Tenant's Proportionate Share of
Electrical Costs, Tenant's share of Excess (as defined
in the Exhibit C attached hereto), Tax Excess (as
---------
defined in Exhibit C) and DCURD Excess (as defined in
---------
Exhibit C), and all other sums that Tenant may owe to
---------
Landlord under this Lease.
Permitted Use: Continuous use and occupancy for general offices and
related purposes and for no other purpose without the
prior written consent of Landlord
Tenant's Proportionate Initially 10.29%, which is the percentage obtained by
dividing (a) the 22,845