EXHIBIT 10.28
COMMERCIAL LEASE AGREEMENT
BETWEEN
CB Parkway Business Center VI, Ltd., Landlord
AND
Digital Island, Inc., Tenant
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LEASE AGREEMENT
This Lease Agreement (this "Lease") is entered into by CB Parkway Business
Center VI, Ltd. ("Landlord"), and Digital Island, Inc. ("Tenant").
1. PREMISES, TERM, AND INITIAL IMPROVEMENTS.
(a) Landlord leases to Tenant, and Tenant leases from Landlord, the space
depicted on the floor plan attached as Exhibit A-I (the "Premises"), which is
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the entire area of the building (the "Building") located on the real property
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described on Exhibit A (the "Land"), which such Land is located within
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International Business Park (the "Park") as outlined on the master plan attached
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to the Lease as Exhibit A-3 subject to the terms and conditions in this Lease.
In addition to the Premises, Landlord leases to Tenant, and Tenant leases from
Landlord the two equipment yards as referenced on the site plan attached hereto
as Exhibit A-2 (the "Equipment Yard Area"). Tenant's "Proportionate Share" is
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100%. The Proportionate Share shall be adjusted if the size of the Premises or
the Building (including the addition of new buildings on the Land) changes.
Landlord estimates that the Premises will contain approximately 101,174 rentable
square feet as measured in accordance with the BOMA Standard (as defined below).
Prior to the Commencement Date (as defined below), Tenant shall have the right
to cause the Premises to be measured in accordance with the most recent American
National Standard Method of Measuring Area in Office Buildings of the Building
Owners and Managers Association International's Standard Method of Measuring
Floor Area in Office Buildings (including the Question and Answer section) (the
"BOMA Standard"). Such measurement shall be calculated and confirmed by
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Landlord's architect as reasonably confirmed by Tenant's architect. The
determination of the rentable square footage of the Premises by such company
shall be binding upon the parties hereto and the Monthly Base Rent set forth in
Section 2(a) hereof shall be adjusted to reflect such determination.
(b) The Lease term shall be approximately 148 months, commencing on the
Commencement Date and ending at 5:00 p.m. local time on the last day of the
148th full calendar month following the Commencement Date (defined below),
subject to adjustment and earlier termination as provided in this Lease (the
"Term"), which defined term shall include all renewals and extensions of the
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Term). As used herein, (the "Commencement Date") means January 26, 2001.
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(c) Landlord shall construct, in a good and workmanlike manner and in
compliance with all applicable laws, the Building and the Premises (and the
parking and landscape areas relating thereto) as described on Exhibit D- I
attached hereto (the "Building Shell"). Landlord shall use commercially
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reasonable efforts to Substantially Complete (as hereinafter defined) the
Building Shell and deliver the Premises and Equipment Yard Area pursuant to the
schedule attached hereto as Exhibit F. If the Building Shell is not delivered
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Substantially Complete to Tenant on or before [December 31, 2000] (the
"Termination Date"), Tenant may terminate this Lease thereafter upon
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written notice to Landlord and the failure of Landlord to deliver the Building
Shell Substantially Complete to Tenant with thirty (30) days after delivery of
such notice. The Termination Date shall be extended for each day of delay in
Substantial Completion of the Building Shell caused by the negligence or willful
misconduct of Tenant or any delays caused by the increase in load capacity to
the second floor. The term ("Substantially Complete") means complete except for
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minor items of repair or adjustment of the type commonly found on an architect's
punch list and which would not materially impact Tenant's construction of the
Tenant Work (as defined in Section 1(d) below). Notwithstanding anything to the
contrary in this Lease, if the Building Shell has not been delivered to Tenant
Substantially Complete on or before the Termination Date, Tenant shall have the
right to exercise (a) any and all self-help remedies available to it (including,
without limitation, the right to construct the Building Shell at reasonable
costs) and (b) any offset rights.
(d) Promptly following the delivery of the Building Shell, Tenant shall
construct, in a good and workmanlike manner and in compliance with all
applicable Laws, the improvements to the Premises, the Building and the
Equipment Yard Area in accordance with the Working Drawings (as defined in
Exhibit D) (the "Tenant Work").
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2. BASE RENT AND ADDITIONAL RENT.
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(a) Tenant shall pay to Landlord ("Base Rent"), in advance, without demand,
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deduction or set off except as specifically provided in this Lease, equal to the
following amounts for the following periods of time:
Months Annual Rate per RSF Monthly Base Rent
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1 through 4 $ 0.00 $ 0.00
5 through 76 $17.50 $150,208.33
77 through 148 $20.13 $172,782.50
The first monthly installment of Base Rent shall be due on the date hereof;
thereafter, monthly installments of Base Rent shall be due on the first day of
each calendar month following the Commencement Date. If the Term begins on a day
other than the first day of a month or ends on a day other than the last day of
a month, the Base Rent and additional rent under Section 2(b) for such partial
month shall be prorated.
(b) Tenant shall pay, as additional rent its Proportionate Share of all
reasonable costs incurred in owning, operating, managing, and maintaining the
Land and Building and the facilities and services provided for the common use of
Tenant and any other tenants of the Building (collectively, "Operating
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Expenses"), including the following items: (1) Taxes (defined below) and the
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reasonable and actual cost of any tax consultant employed to assist Landlord in
determining the fair tax valuation of the Building and Land (2) the cost of all
utilities used in the Building which are not billed separately to or paid
directly by a tenant of the Building for above Building standard utility
consumption; (3) the cost of insurance in commercially reasonable amounts and
types; (4) the cost of repairs, replacement, management fees (capped at 2.5% of
Base Rent as defined in Section 2(f)) and expenses, landscape maintenance and
replacement, security service (if provided), sewer service (if provided), and
trash service (if provided); (5) the cost of dues, assessments, and other
charges applicable to the Land payable to any property or community owner
association under restrictive covenants or deed restrictions to which the
Premises are subject; (6) maintenance of the Building's fire sprinkler system;
(7) alterations, additions, and improvements made by Landlord to comply with Law
(defined below) but not to the extent such Laws were in effect on the
Commencement Date to the extent the Building Shell failed to comply with the
same as of such date; and (8) the cost of termite control. Additional rent under
this Section 2(b) shall be payable by Tenant to Landlord in monthly installments
equal to 1/12 of Landlord's estimate of Tenant's Proportionate Share of annual
Operating Expenses. The initial monthly payments are based upon Landlord's
estimate of the Operating Expenses for the year in question, and shall be
increased or decreased annually to reflect the projected actual Operating
Expenses for that year. Within 90 days after each calendar year or as soon
thereafter as is reasonably practicable, but in no event later than 180 days
after the end of such calendar year, Landlord shall deliver to Tenant a
statement setting forth the actual Operating Expenses for such year. If Tenant's
total payments in respect of Operating Expenses for any year are less than
Tenant's Proportionate Share of Operating Expenses for that year, Tenant shall
pay the difference to Landlord within 30 days after Landlord's request therefor;
if such payments are more than Tenant's Proportionate Share of Operating
Expenses, Landlord shall retain such excess and credit it against Tenant's
future payments of Operating Expenses next coming due, or if the Lease has
terminated, shall reimburse such excess to Tenant upon delivery of the statement
of Operating Expenses. Operating Expenses shall not include the following: (A)
any costs for interest, points, amortization, or other payments on loans to
Landlord; (B) expenses incurred in leasing or procuring tenants including
marketing expenses, commissions and attorneys' fees; (C) legal expenses other
than those incurred for the general benefit of the Building's tenants; (D)
allowances, concessions, and other costs of renovating or otherwise improving
space for occupants of the Building or vacant space in the Building; (E)
federal, state and local income taxes imposed on Landlord or measured by the
income of Landlord from the operation of the Building; (F) rents under ground
leases; (G) costs incurred in selling, syndicating, financing, mortgaging, or
hypothecating any of Landlord's interests in the Building or the Land; (H)
capital expenditures; (I) costs of environmental remediation of contamination
not caused by Tenant, its agents or employees, including the remediation of any
soils, ground water or the removal of any pre-existing underground storage tanks
from the Land; (J) fines and penalties assessed by a court or governmental
agency; (K) cost of sculptures, paintings or any other objects of fine art; (L)
costs or expenses of services or supplies provided by Landlord or any person or
entity affiliated with Landlord to the extent of such costs or expenses are in
excess of those that would be generally charged by non-affiliated parties in
arm's length transactions; (M) the cost of constructing the Building Shell; (M)
the cost of correcting defects in construction of the Building Shell, including
the failure of such construction to comply with laws; (N) the cost of any items
for which Landlord is reimbursed by insurance, warranties or third parties; and
(O) compensation, salaries, benefits and taxes payable to or on behalf of
officers, directors or employees of Landlord or in excess of the Buildings pro
rata share of
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Landlord's senior property manager and on site staff salaries, allocated based
on square footage managed. There shall be no duplication of costs for
reimbursements in calculating Operating Expenses. The estimated amounts of the
initial monthly Base Rent and Tenant's Proportionate Share of Operating Expenses
(and the part thereof attributable to Taxes) are as follows:
Base Rent (Section 2(a)) $147,545.42
Operating Expenses, excluding Taxes (Section 2(b)) $ 15,850.59
Taxes (Sections 2(b) and 3(a)) $ 10,117.40
Total initial monthly payment $173,531.41
The first monthly installment of additional rent under this Section 2(b) shall
be due on the date hereof; thereafter, monthly installments of such additional
rent shall be due on the first day of each calendar month following the
Commencement Date.
(c) If during any calendar year, the Building is less than 100% occupied,
then, for purposes of calculating Tenant's Proportionate Share of Operating
Expenses for that year, the Operating Expenses that fluctuate with Building
occupancy shall be grossed-up" to the amount which, in Landlord's reasonable
estimation, they would have been had the Building been 100% occupied for that
entire year.
(d) If any payment required of Tenant under this Lease is not paid within
five (5) days of the date due, Landlord may charge Tenant a fee equal to 5% of
the delinquent payment to reimburse Landlord for its cost and inconvenience
incurred as a consequence of Tenant's delinquency. Notwithstanding the
foregoing, with respect to the first late payment during any calendar year
during the Term, Tenant shall not be required to pay such late fee unless such
failure continues for a period of three (3) business days after written notice
of such failure is delivered by Landlord to Tenant.
(e) Tenant shall have the right to review and audit Landlord's books and
records pertaining to Operating Expenses for a period of one (1) year following
the delivery by Landlord of the statement of Operating Expenses. Landlord shall
cooperate in good faith with Tenant and the accountant conducting such audit.
Such accountant shall be from a nationally or regionally recognized accounting
firm. If the results of such audit show that the actual Operating Expenses are
more than 5% less than shown in Landlord's statement, the cost of such audit
shall be paid for by Landlord; otherwise, the cost of the audit shall be paid
for by Tenant. Promptly following the parties receipt of the audit, the parties
shall make such appropriate payments or reimbursements, as the case may be, to
each other, as are determined to be owing pursuant to such audit.
(f) All payments and reimbursements required to be made by Tenant under
this Lease shall constitute ("Rent") (herein so called) and shall be payable
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without demand, deduction or set off, except as otherwise specifically
provided in this Lease.
3. TAXES.
(a) Landlord shall pay all taxes, assessments and governmental charges
whether federal, state, county, or municipal and whether they are imposed by
taxing or management districts or authorities presently existing or hereafter
created (collectively, "Taxes") that accrue against the Premises, the Land and
the Building. If, during the Term, there is levied, assessed or imposed on
Landlord a capital levy or other tax directly on the Rent or a e tax,
assessment, levy or charge measured by or based, in whole or in part, upon Rent,
then all such taxes, assessments, levies or charges or the part thereof so
measured or based, shall be included within the term ("Taxes"). If the Building
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is occupied by more than one tenant and the cost of any improvements constructed
in the Premises is disproportionately higher than the cost of improvements
constructed in the premises of other tenants of the Building, then Landlord may
require that Tenant pay the amount of Taxes attributable to such improvements in
addition to its Proportionate Share of other Taxes. In the event Landlord
appeals, Tenant waives all rights to protest or appeal the appraised value of
the Building or Land and all rights to receive notices of reappraisement as set
forth in Sections 41.413 and 42.015 of the Texas Tax Code. Notwithstanding the
foregoing, upon written request by Tenant, Landlord shall provide copies of
notices of reappraisement to Tenant. After such written request and in the event
Landlord elects not to protest or appeal the appraised value of the Building or
Land, Landlord shall timely notify Tenant of its
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election and grant Tenant the right to protest or appeal the appraised value of
the Building or Land, provided that Landlord's interest in the Building, Land
and Park is adequately protected.
(b) Tenant shall before delinquency pay all taxes levied or assessed
against any personal property, fixtures or alterations placed in the Premises or
Equipment Yard Area and upon the request of Landlord, deliver to Landlord
receipts from the applicable taxing authority or other evidence acceptable to
Landlord to verify that such taxes have been paid. If any such taxes are levied
or assessed against Landlord or Landlord's property and Landlord pays them or
the assessed value of Landlord's property is increased thereby and Landlord pays
the increased taxes, then Tenant shall pay to Landlord such taxes within ten
business days after Landlord's request therefor.
4. LANDLORD'S MAINTENANCE.
(a) Landlord's maintenance obligations are limited to the replacement of
the Building's roof and maintenance of the foundation and the exterior walls
(collectively, the "Buildings Structure") however, Landlord shall not be
responsible for any such work until Tenant delivers to Landlord written notice
of the need therefor or for alterations to the Building's Structure required by
Law because of Tenant's particular use of the Premises or Equipment Yard Area
(which alterations shall be performed by Tenant). The Building's Structure does
not include windows or components thereof (including caulking, flashing, etc.),
glass or plate glass, doors, special Store fronts, the Equipment Yard Area or
office entries, all of which shall be maintained by Tenant. Landlord shall also
be responsible for repairing all defects in the construction of the Building
Shell and for all repairs or alterations required to cause the same to comply
with Laws applicable at the time the Building Shell was constructed. Landlord's
liability for any defects, repairs, replacement or maintenance for which
Landlord is responsible hereunder shall be limited to the cost of performing
such work.
(b) Additionally, Landlord shall, at Tenant's expense, maintain the parking
areas, driveways, alleys, landscaping and grounds surrounding the Premises
excluding the Equipment Yard Area in a clean and sanitary condition, consistent
with the operation of a first-class office building, including prompt
maintenance, repairs and replacements of (1) the exterior of the Building
(including painting), (2) sprinkler systems and sewage lines, (3) skylights, and
(4) any other items normally associated with the foregoing. Tenant shall
promptly notify Landlord of any work required to be performed under this Section
4(b), and Landlord shall not be responsible for performing such work until
Tenant delivers to Landlord such notice. All costs in performing the work
described in this Section 4(b) shall be included in Operating Expenses, subject
to the limitations on capital expenditures set forth in Section 2(b).
5. TENANT'S MAINTENANCE AND REPAIR OBLIGATIONS.
(a) Tenant shall maintain all parts of the Premises and Equipment Yard Area
(except for maintenance work which Landlord is expressly responsible for under
Section 4 in a good condition and promptly make all necessary repairs and
replacements to the Premises and Equipment Yard Area. Subject to Section 11(b),
Tenant shall repair and pay for any damage caused by a Tenant Party (defined
below) or caused by Tenant's default hereunder.
(b) Tenant shall maintain the hot water equipment and the heating, air
condition, and ventilation equipment, Equipment (defined below) and system (the
"HVAC System") in good repair and condition and in accordance with Law and with
such equipment manufacturers' suggested operation/maintenance service program;
such obligation shall include replacement of all equipment necessary to maintain
such equipment and system in good working order. Within ten days after the
Commencement Date, Tenant shall enter into regularly scheduled preventive
maintenance/service contracts for such equipment, each in compliance with
Landlord's reasonable specifications and otherwise in form and substance and
with a contractor reasonably acceptable to Landlord, and deliver copies thereof
to Landlord. At least 14 days before the end of the Term, Tenant shall deliver
to Landlord a certificate from an engineer reasonably acceptable to Landlord
certifying that the hot water equipment and the HVAC System are then in good
repair and working order. Notwithstanding the foregoing, at the end of the Term,
Tenant shall have the right to remove all equipment, fixtures and personal
property located at the Premises or Equipment Yard Area paid for by Tenant,
subject to the provisions of Section 16(a) and 16(b).
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(c) Except for termite control, Tenant shall be responsible for all pest
control in the Premises and Equipment Yard Area and control of pests migrating
from the Premises and Equipment Yard Area to other portions of the Building. If
requested by Landlord, Tenant shall enter into a regularly scheduled
preventative pest control contract with a contractor reasonably acceptable to
Landlord.
6. ALTERATIONS.
Except for Tenant's Work and non-structural alterations the cost of which
do not exceed $75,000 in any twelve-month period, Tenant shall not make any
alterations, additions or improvements to the Premises without the prior written
consent of Landlord, which consent shall not be unreasonably withheld or
delayed. Landlord shall not be required to notify Tenant of whether it consents
to any alteration, addition or improvements until it (a) has received plans and
specifications therefor which are sufficiently detailed to allow construction of
the work depicted thereon to be performed in a good and workmanlike manner, and
(b) has had a reasonable opportunity to review them. If Landlord does not
approve or disapprove of such request within ten (10) business days after
Tenant's request, Landlord shall be deemed to have approved such request. Any
disapproval by Landlord shall set forth in detail the reasons for such
disapproval. If the alteration, addition or improvement will affect the
Building's Structure, HVAC System, or mechanical, electrical, or plumbing
systems, then the plans and specifications therefor must be prepared by a
licensed engineer reasonably acceptable to Landlord. Landlord's approval of any
plans and specifications shall not be a representation that the plans or the
work depicted thereon will comply with Law or be adequate for any purpose, but
shall merely be Landlord's consent to performance of the work. Upon completion
of any alteration, addition, or improvement, Tenant shall deliver to Landlord
accurate, reproducible as-built plans therefor. Without Landlord's consent,
Tenant may erect shelves, bins, machinery and trade fixtures provided that such
items (1) do not alter the basic character of the Premises or the Building; (2)
do not overload or damage the same; and (3) may be removed without damage to the
Premises unless Tenant elects to repair such damage. Unless Landlord specifies
in writing otherwise, all alterations, additions, and improvements shall be
Landlord's property when installed in the Premises; provided that all equipment
(including all data center equipment) installed by Tenant at the Premises or the
Equipment Yard Area shall be the property of Tenant. All work performed by a
Tenant Party in the Premises or the Equipment Yard Area (including that relating
to the installations, repair, replacement, or removal of any item) shall be
performed in accordance with Law and with Landlord's reasonable specifications
and requirements, ("Technical Standards") in a good and workmanlike manner, and
so as not to damage or alter the Building's Structure or the Premises.
Notwithstanding anything contractual in this Section 6 to the contrary, Landlord
acknowledges that from time to time during the Term Tenant shall need to make
modifications, additions, replacements and repairs to the HVAC System chillers
,generators and other equipment installed by Tenant at the Premises or the
Equipment Yard Area and that Tenant shall not be required to obtain Landlord's
consent with respect to such equipment work. However, Landlord shall have the
right to change the Technical Standards from time to time without the consent of
Tenant if any such change is determined by Landlord as necessary (a) to comply
with Laws, or (b) for the safety or care of all or any portion of the Building
or Park. If any new Law shall require that Tenant modify or revise the then
existing installation, operation or maintenance of the Equipment Yard Area,
Tenant shall make such modifications or revisions within a reasonable time
thereafter at Tenant's sole cost and expense. Additionally, the access to, and
installation, maintenance and operation of, the Equipment Yard Area must at all
times be in strict compliance with all Laws.
7. SIGNS. [intentionally deleted. See Paragraph 29.]
8. UTILITIES. Tenant shall obtain and pay directly to the utility provider for
all water, gas, electricity, heat, telephone, sewer, sprinkler charges and other
fuel, utilities and services used at the Premises and the Equipment Yard Area,
together with any taxes, penalties, surcharges, maintenance charges, and the
like related thereto. The times and methods of fuel delivery for the Equipment
Yard shall be arranged by Tenant subject to the Landlord's prior written
approval, which approval shall not be unreasonably withheld, so as to minimize
interference with Landlord's operation of the Building and Park and other
tenants' use of their leased premises. Landlord shall not be liable for any
interruption or failure of utility service to the Premises, except to the extent
arising out of Landlord's negligence or willful misconduct.
9. INSURANCE. Tenant shall maintain (a) workers' compensation insurance (with a
waiver of subrogation endorsement reasonably acceptable to Landlord) and
commercial general liability insurance (with contractual liability endorsement),
including personal injury and property damage in the amount of $5,000,000 per
occurrence and in the aggregate combined single limit for personal injuries and
death of persons and property damage occurring
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in or about the Premises or Equipment Yard Area, (b) fire and extended coverage
insurance covering (1) the replacement cost of all alterations, additions,
partitions and improvements installed in the Premises and Equipment Yard Area
and paid for by Tenant, and (2) the replacement cost of all of Tenant's personal
property in the Premises and Equipment Yard Area. The commercial general
liability insurance and fire insurance shall (A) name Landlord, Landlord's
agents, and their respective Affiliates (defined below), as additional insureds
(and as loss payees on the fire and extended coverage insurance to the extent it
covers alterations to the Premises, but not with respect to any equipment or
fixtures installed at the Premises or in the Equipment Yard Area by Tenant), (B)
be issued by an insurance company reasonably acceptable to Landlord, (C) provide
that such insurance may not be cancelled unless 30-days' prior written notice is
first given to Landlord, (D) be delivered to Landlord by Tenant before the
Commencement Date and at least 15 days before each renewal thereof, and (E)
provide primary coverage to Landlord when any policy issued to Landlord is
similar or duplicate in coverage, in which case Landlord's policy shall be
excess over Tenant's policies. Tenant shall have the right to satisfy the
foregoing insurance requirements pursuant to so-called "umbrella" or "blanket"
insurance coverage. Landlord shall maintain fire and extended coverage insurance
covering the replacement cost of the Building and other improvements located on
the Land, excluding those improvements that Tenant is required to insure as
provided above.
10. CASUALTY DAMAGE.
(a) Tenant shall promptly give written notice to Landlord of any material
damage to the Premises or the Building. If the Premises or the Building are
totally destroyed by an insured peril, or so damaged by an insured peril that,
in Landlord's reasonable estimation, rebuilding or repairs cannot be
substantially completed within 365 days after the date of Landlord's actual
knowledge of such damage, then either Landlord or (if a Tenant Party did not
cause such damage) Tenant may terminate this Lease by delivering to the other
written notice thereof within 30 days after receipt of Landlord's Estimate (as
hereinafter defined), in which case, the Rent shall be abated during the
unexpired portion of this Lease, effective upon the date such damage occurred.
Landlord shall notify Tenant of its estimate as to the number of days it will
take to substantially complete rebuilding or repairs within 30 days of the date
of Landlord's actual knowledge of such damage ("Landlord's Estimate"). Time is
of the essence with respect to the delivery of such notices.
(b) Subject to Section 10(c), if this Lease is not terminated under Section
10(a), then Landlord shall restore the Premises to substantially its previous
condition, except that Landlord shall not be required to rebuild, repair or
replace any part of the partitions, fixtures, additions and other improvements
or personal property required to be covered by Tenant's insurance under Section
9 but rather such work shall be repaired by Tenant and Tenant shall be entitled
to use all insurance proceeds provided pursuant to insurance policies maintained
by Tenant for such work. If the Premises are untenantable for Tenant's business
purposes, in whole or in part, during the period beginning on the date such
damage occurred and ending on the date of substantial completion of Landlord's
repair or restoration work and any repairs and restoration work done by Tenant
(the "Repair Period"), then the Rent for such period shall be reduced to such
extent as may be fair and reasonable under the circumstances and the Term shall
be extended by the number of days in the Repair Period.
(c) If the Premises are destroyed or substantially damaged by any peril not
covered by the insurance maintained by Landlord (or required to be maintained by
Landlord hereunder) or any Landlord's Mortgagee (defined below) requires that
insurance proceeds be applied to the indebtedness secured by its Mortgage
(defined below) or to the Primary Lease (defined below) obligations, Landlord
may terminate this Lease by delivering written notice of termination to Tenant
within 30 days after such destruction or damage or such requirement is nlade
known by any such Landlord's Mortgagee, as applicable, whereupon all rights and
obligations hereunder shall cease and terminate, except for any liabilities of
Tenant which accrued before this Lease is terminated. Notwithstanding the
foregoing, Tenant shall be entitled to all insurance proceeds payable on account
of any alterations, improvements, fixtures, equipment and personal property at
the Premises, the Equipment Yard Area, the Building or the Land paid for by
Tenant.
11. LIABILITY, INDEMNIFICATION WAIVER OF SUBROGATION AND NEGLIGENCE.
(a) Waiver of Claims; No Subrogation. Neither Landlord nor Tenant shall
have any liability to the other for any damage or injury to the property of
Landlord or Tenant, including the Building and tenant
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improvements in the Premises or Equipment Yard Area, arising from or caused by
any cause customarily insured against under a standard fire and extended
coverage casualty insurance policy, even if caused by the negligence of
Landlord, Tenant, or their shareholders, partners, officers and employees, and
no insurer shall have any rights of subrogation with respect to the foregoing.
Landlord shall not be liable or responsible to Tenant for any loss or damage to
any property or person occasioned by theft, fire, casualty, vandalism, acts of
God, public enemy, injunction, riot, strike; inability to procure materials,
insurrection, war, court order, requisition or order of governmental body or
authority, or for any other causes beyond Landlord's control. All goods,
property or personal effects stored or placed by Tenant in or about the Building
or Equipment Yard Area shall be at the sole risk of Tenant.
(b) Indemnity. Each party shall indemnify and hold harmless the other from
and against any and all claims, demands, liabilities, causes of action, suits,
judgments and expenses (including attorneys' fees) arising from or for injury to
third persons or damage to property owned by third persons and caused by the
negligence or intentional torts of the indemnifying party.
(c) TENANT AGREES TO PROTECT, DEFEND, INDEMNIFY AND HOLD HARMLESS LANDLORD,
LANDLORD'S AFFILIATES AND PARTNERS, AND THE PARTNERS, SHAREHOLDERS, OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS OF LANDLORD, ITS AFFILIATES AND PARTNERS (any
and all of the foregoing sometimes referred to as an "indemnified party"), FROM
AND AGAINST ANY AND ALL CLAIMS OF THIRD PARTIES (INCLUDING THOSE RELATING TO THE
NEGLIGENCE OF LANDLORD AND/OR AN INDEMNIFIED PARTY) AND ALL COSTS, EXPENSES AND
LIABILITIES (INCLUDING ATTORNEYS' FEES AND COSTS OF SUIT) INCURRED IN CONNECTION
WITH THE EXISTENCE OR USE OF THE EQUIPMENT YARD AREA, INCLUDING ANY ACTION OR
PROCEEDING ARISING FROM OR IN CONNECTION WITH THE EXISTENCE OR USE OF THE
EQUIPMENT YARD AREA (EVEN TO THE EXTENT CAUSED BY AN INDEMNIFIED PARTY'S
NEGLIGENCE), EXCEPT TO THE EXTENT THAT SUCH CLAIMS ARISE BY REASON OF THE
WILLFUL MISCONDUCT, FRAUD, BAD FAITH OR GROSS NEGLIGENCE OF LANDLORD AND/OR AN
INDEMNIFIED PARTY. IN THE EVENT THAT A CLAIM IS PARTLY THE RESULT OF THE WILLFUL
MISCONDUCT, FRAUD, BAD FAITH, OR GROSS NEGLIGENCE BY LANDLORD AND/OR AN
INDEMNIFIED PARTY DESCRIBED IN THE PRECEDING SENTENCE, AND ALSO PARTLY THE
RESULT OF THE ACT OR OMISSION OF TENANT AND/OR A THIRD PARTY, THE FOREGOING
EXCEPTION SHALL APPLY ONLY TO THAT PORTION OF THE LOSS OR DAMAGE ATTRIBUTABLE TO
SUCH WILLFUL MISCONDUCT, FRAUD, BAD FAITH, OR GROSS NEGLIGENCE BY LANDLORD
AND/OR AN INDEMNIFIED PARTY. AS TO ANY MATTER TO WHICH AN INDEMNIFIED PARTY IS
INDEMNIFIED BY TENANT, TENANT ALSO RELEASES EACH INDEMNIFIED PARTY FROM ANY
CAUSE OF ACTION OR CLAIM BY TENANT AGAINST SUCH INDEMNIFIED PARTY WITH RESPECT
THERETO.
i. The provisions of this Paragraph 11.(c) shall not be limited by
the term of this Lease and shall survive the expiration or termination of this
Lease for any reason for a claim relating to Tenant's occupancy which is made or
a cost, expense or liability which is incurred prior to four (4) years following
such termination or expiration.
ii. Nothing contained in this Paragraph 11.(c) shall prevent Tenant or
the indemnified party from seeking recovery under the insurance described or
referred to in Paragraph 9. Accordingly, Landlord and Tenant agree: (i) an
indemnified party shall seek recovery on the indemnity contained in this
Paragraph 11.(c) only to the extent the claim, cost, expense or liability is not
paid by the insurance described in ▇▇▇▇▇▇▇▇▇ ▇, (▇▇) the fact that Tenant makes
a payment to an indemnified party shall not prevent Tenant from having the
benefit of any applicable insurance coverage, and (iii) nothing shall prevent
Tenant from seeking to recover any sums payable by it under this Paragraph 11
(C) from a third party other than an indemnified party.
12. USE.
(a) Tenant may use the Premises and Equipment Yard Area for the
installation, operations and maintenance of telecommunications equipment, for
transmissions facilities and for a data center, including without limitation,
customer collocation and related equipment and for office uses. Tenant shall not
use the Premises or
7
Equipment Yard Area to receive, store or handle any product, material or
merchandise that is explosive or highly inflammable or hazardous, except for
Permitted Materials. Tenant shall be solely responsible for complying with all
Laws applicable to its particular use and occupancy of the Premises and
Equipment Yard Area. Tenant shall not permit any objectionable or unpleasant
odors, smoke, dust, gas, light, noise or vibrations to emanate from the Premises
or Equipment Yard Area; nor take any other action that would constitute a
nuisance or would disturb, unreasonably interfere with, or endanger Landlord or
any other person; nor permit the Premises or Equipment Yard Area to be used for
any purpose or in any manner which will cause any of the rates for any insurance
carried by Landlord or any other occupant of the Building or surrounding
buildings to be increased or in such a manner as will affect, or cause a
cancellation of, any such insurance policy; provided, however, if Tenant's use
of the Premises or Equipment Yard Area results in an increase only in the amount
of insurance premiums (and not the cancellation thereof), Tenant may continue
such use provided Tenant pays to Landlord within ten (10) business days the cost
of such increases. In all events, Tenant shall not engage in any activity which
is not in keeping with the first class standards of the Building or surrounding
buildings. Tenant shall comply with and shall cause its employees, agents and
contractors to comply with all Laws. Additionally, Tenant specifically
represents, warrants, covenants and agrees that (1) at no time during the term
hereof shall any fuel, emissions or other substances used in connection with or
emitted by the Equipment Yard Area leak, penetrate or contaminate the ground,
water or air on or about the Land other than the emissions into the air which
(A) result from the operation of a generator which is in good working order
(without defect or disrepair) and (B) are in compliance with Laws, and (2) in no
event shall the installation, maintenance or operation of the backup generators
materially interfere with any of the systems of the Building, Park or with any
other tenants use of its leased premises. . Notwithstanding anything contained
in this Section 12 to the contrary, Landlord understands that Tenant will be
maintaining and using significant equipment in the Equipment Yard Area,
including emergency and back-up generators and chillers and that, when in use,
such equipment will generate noise and vibrations, and that, as long as the same
is reasonable given the nature of such equipment, Tenant shall have the tight to
use the same as necessary. Tenant specifically warrants, represents, covenants
and agrees that the backup generator system shall be used solely for the
generation of emergency power in the event of and only for the duration of a
power outage, interruption, or material diminishment in the quality or quantity
of electrical service to the Premises and any ancillary uses related thereto;
provided, however, that Tenant may perform required testing, refueling and
weekly maintenance (each of which shall be scheduled in accordance with a
schedule agreed to by Landlord and Tenant (each acting in good faith) to
minimize any interference with the operation of the Building and surrounding
buildings, or with any other tenant's use of its lease premises, and in no event
happen from 700 a.m. to 7:00 p.m. Monday through Friday or 7:00 a.m. to 1:00
p.m. on Saturdays.
(b) Tenant and its employees and invitees shall have the non-exclusive
right to use, in common with others, any parking areas associated with the
Premises which Landlord has designated for such use, subject to (1) such
reasonable rules and regulations as Landlord may promulgate from time to time
and (2) rights of ingress and egress of other tenants and their employees,
agents and invitees. Landlord shall not be responsible for enforcing Tenant's
parking rights against third parties.
13. INSPECTION.
Upon one (1) business day prior written notice (except that no such notice
shall be necessary in the event of an emergency), Landlord and Landlord's agents
and representatives may enter the Premises or the Equipment Yard Area during
business hours to inspect the Premises or the backup generators at Landlord's
cost; make technical measurements or tests related to the backup generators at
Landlord's cost (such measurements or tests will require Landlord to provide
three (3) business days prior written notice); to assure Tenant's compliance
with the terms and provisions of this Lease and with all Laws; to make such
repairs as may be required or permitted to be made by Landlord under this Lease;
to perform any unperformed obligations of Tenant hereunder which Tenant has not
performed or commenced diligently to perform within fifteen (15) days after
written notice from Landlord that such obligations are required to be performed
by Tenant under the Lease; and to show the Premises to prospective purchasers,
mortgagees ,ground lessors, and (during the last 12 months of the Term) tenants;
provided that, at all times (except in the case of emergency) Landlord and its
agents or representatives shall exercise reasonable efforts not to unreasonably
interfere with Tenant's use of the Premises and Equipment Yard area and be
accompanied by a representative of Tenant. If, pursuant to Landlord's inspection
rights under this Paragraph 13, written reports are prepared, Landlord agrees
to furnish to Tenant copies of such written reports; provided, however, Landlord
shall be under no obligation to prepare such written reports. During the last 12
months of the Term, Landlord may erect a sign on the Premises indicating that
the Premises are available. Except at the end of Term, Tenant shall notify
Landlord in writing of its intention to vacate the Premises at least 60 days
before Tenant
8
will vacate the Premises; such notice shall specify the date on which Tenant
intends to vacate the Premises (the "Vacation Date"). At least 30 days before
the Vacation Date or expiration of the Term, Landlord shall arrange to meet with
Tenant for a joint inspection of the Premises. After such inspection, Landlord
shall prepare a list of items that Tenant must perform before the Vacation Date
if the same are required under this Lease. If Tenant fails to agree to such
inspection, then Landlord may conduct such inspection on its own. If Tenant
fails to perform such work before the Vacation Date, then Landlord may perform
such work at Tenant's cost. Tenant shall pay all costs incurred by Landlord in
performing such work within ten days after Landlord's request therefor.
14. ASSIGNMENT AND SUBLETTING.
(a) Tenant shall not, without the prior written consent of Landlord, which
consent shall not be unreasonably withhold or delayed, (1) advertise that any
portion of the Premises is available for lease or cause or allow any such
advertisement, (2) assign, transfer, or encumber this Lease or any estate or
interest herein, whether directly or by operation of law, (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 or the
Equipment Yard Area, (5) grant any license or other right of occupancy of any
portion of the Premises or Equipment Yard Area, or (6) permit the use of the
Premises or Equipment Yard Area by any parties other than Tenant or Tenant's
Parties (any of the events listed in Sections 14(a)(l) through 14(a)(6) being a
"Transfer"). If Tenant requests Landlord's consent to a Transfer, then Tenant
shall provide Landlord with a written description of all terms and conditions of
the proposed Transfer, copies of the proposed documentation, and 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. Tenant shall reimburse Landlord for
its reasonable attorneys' fees and other expenses incurred in connection with
considering any request for its consent to a Transfer not to exceed $1,000.00.
If Landlord consents to a proposed Transfer, then the proposed transferee shall
deliver to Landlord a written agreement whereby it expressly assumes the
Tenant's obligations hereunder (however, any transferee 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 Transfer, and only to the
extent of the Rent it has agreed to pay Tenant therefor). 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 Equipment Yard Area 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
Tenant's Rent obligations. Tenant authorizes its transferees to make payments of
Rent directly to Landlord upon receipt of notice from Landlord to do so after an
Event of Default. Notwithstanding anything contained in this Section 14 to the
contrary, Tenant shall have the right to assign this Lease or sublet the
Premises without Landlord's consent to (i) any entity that controls, is
controlled by or is under common ownership with Tenant with a net worth that is
equal to or greater than Tenant at the time of such refinement; and (ii) any
entity with a net worth that is equal to or greater than Tenant at the time of
such assignment acquiring the business of Tenant pursuant to an asset or stock
transaction, merger or consolidation. In addition, entering into collocation
agreements shall not constitute a Transfer pursuant to this Lease nor require
Landlord's consent.
(b) In the event Tenant desires to sublease all or substantially all of the
Premises for all or substantially all the remainder of the Term to an entity who
will use the Premises only for traditional office uses, then Tenant shall pay to
Landlord as received 50% of all consideration received by Tenant under any such
sublease, which is in excess of the Rents payable by Tenant under this Lease as
applicable to the portion of the Premises sublet, less all out-of-pocket
expenses incurred by Tenant in connection with such Transfer, including
attorney's fees, brokerage commissions, tenant improvement costs and allowances.
Tenant shall hold such amounts in trust for Landlord and pay them to Landlord
within ten days after receipt.
15. CONDEMNATION.
If more than 25% of the Premises, or any of the Equipment Yard Area, or any
portion thereof is taken for any public or quasi-public use by right of eminent
domain or private purchase in lieu thereof (a "Taking"), and the Taking prevents
or materially interferes with the use of the remainder of the Premises for the
purpose for which they were leased to Tenant. Tenant may terminate this Lease by
delivering to the other written
9
notice thereof within 30 days after the Taking, in which case Rent shall be
abated during the unexpired portion of the Term, effective on the date of such
Taking. If (a) less than 25% of the Premises (other than the Equipment Yard
Area) are subject to a Taking or (b) more than 25% of the Premises (other than
the Equipment Yard Area) are subject to a Taking, but the Taking does not
prevent or materially interfere with the use of the remainder of the Premises
for the purpose for which they were leased to Tenant, then neither party may
terminate this Lease, but the Rent payable during the unexpired portion of the
Term shall be reduced to such extent as may be fair and reasonable under the
circumstances All compensation awarded for any Taking shall be the property of
Landlord and Tenant assigns any interest it may have in any such award to
Landlord; however, Landlord shall have no interest in any award made to Tenant
for loss of business or goodwill or for the taking of Tenant's equipment,
personal property or trade fixtures.
16. SURRENDER OF PREMISES, HOLDING OVER.
(a) No act by Landlord shall be an acceptance of a surrender of the
Premises, and no agreement to accept a surrender of the Premises and Equipment
Yard Area shall be valid unless it is in writing and signed by Landlord. At the
end of the Term or the termination of Tenant's right to possess the Premises and
Equipment Yard Area, Tenant shall (1) deliver to Landlord the Premises with all
improvements located thereon in reasonably good repair and condition, reasonable
wear and tear (subject however to Tenant's maintenance obligations) and damage
due to casualty and condemnation excepted, and with the HVAC System and hot
water equipment, light and light fixtures (including ballasts), and overhead
doors and related equipment in reasonably good working order, (2) deliver to
Landlord all keys to the Premises, and (3) remove all signage placed on the
Premises, the Building, or the Land by or at Tenant's request. All fixtures,
alterations, additions, and improvements (whether temporary or permanent)
including raised flooring and transformers, shall be Landlord's property and
shall remain on the Premises or Equipment Yard Area except as provided in the
next two sentences and in 16(b) below. Tenant may renovate all trade fixtures,
furniture, equipment and personal property placed in the Premises and the
Equipment Yard Area by Tenant (but Tenant shall not remove any such item which
was paid for, in whole or in part, by Landlord) provided that Tenant shall
repair any damage caused by such removal. Additionally, Tenant shall restore the
Building and associated parking area to the original Building Shell condition
(except for the office area) as Landlord may request, provided such request is
made within three (3) months prior to the termination of the Lease. All items
not so removed shall, at the option of Landlord, be deemed 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 and Tenant shall pay for the costs incurred by Landlord in connection
therewith. Any such disposition shall not be considered a strict foreclosure or
other exercise of Landlord's rights in respect of the security interest granted
under Section 16(a). All work required of Tenant under Sections 16(a) and 16(b)
shall be coordinated with Landlord and be done in a good and workmanlike manner,
in accordance with all Laws, and so as not to damage the Building or
unreasonably interfere with other tenants' use of their premises. Tenant shall,
at its expense, repair all damage caused by any work performed by Tenant under
Sections 16(a) and 16(b).
(b) In accordance with the notice provision in Section 16(a), Tenant shall
be obligated at Landlord's request to remove any or all equipment from the
Equipment Yard Area and from any other portions of the Building or surrounding
buildings affected thereby and to restore the Equipment Yard Area and such
portions of the Building or Park to the condition that existed immediately prior
to the installation of the Equipment, normal wear and tear excepted. Upon the
expiration or earlier termination of this Lease, Landlord shall have the right
to re-enter and resume possession of the Equipment and the remaining Equipment.
If Tenant fails to so remove the Equipment as requested by Landlord, prior to
thirty (30) days after the expiration or earlier termination of this Lease,
Landlord may have the same removed and any resulting damage repaired at Tenant's
cost and expense and in such event the Equipment will become the property of
Landlord automatically and may be disposed of by Landlord in its sole
discretion, without any right of reimbursement therefor to Tenant. Tenant's
obligations under this Paragraph 16 shall survive the expiration or early
termination of this Lease.
(c) If Tenant fail to vacate the Premises at the end of the Term, then
Tenant shall be a Tenant at will and Tenant shall pay, in addition to the other
rent due hereunder, a daily base rental equal to 150% of the daily Base Rent
payable during the last month of the Term, even if Landlord consents to such
holdover, unless Landlord agrees otherwise in writing. Additionally, Tenant
shall defend, indemnify, and hold harmless Landlord from any damage, liability
and expense (including reasonable attorneys' fees and expenses) incurred because
of such holding over. No
10
payments of money by Tenant to Landlord after the Term shall reinstate, continue
or extend the Term, and no extension of this Term shall be valid unless it is in
writing and signed by Landlord and Tenant.
17. QUIET ENJOYMENT. Provided Tenant has fully performed its obligations under
this Lease, Tenant shall peaceably and quietly hold and enjoy the Premises and
Equipment Yard Area for the Term, without hindrance from Landlord or any party
claiming by, through, or under Landlord, but not otherwise.
18. EVENTS OF DEFAULT. Each of the following events shall constitute an "Event
of Default" under this Lease:
(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), when due , and such failure continues for ten (10) days
after written notice thereof is received by Tenant from Landlord; however,
if Landlord has given Tenant such notice twice during the preceding twelve
month period for failure to timely pay any regularly scheduled installments
of Rent, then Landlord's obligation to give written notice with respect to
regularly scheduled installments of Rent shall not apply until twelve
months has passed since the last such notice was given, and in the interim,
failure to pay any regularly scheduled installments of Rent on the date due
shall be an Event of Default without Landlord having first given such
notice;
(b) The filing of a petition by or against Tenant or any guarantor of
Tenant's obligations hereunder (I) in any bankruptcy or other insolvency
proceeding; (2) seeking any relief under any debtor relief Law; (3) for the
appointment of a liquidator, receiver, trustee, custodian, or similar
official for all or substantially all of Tenant's property or for Tenant's
interest in this Lease; or (4) for reorganization or modification of
Tenant's capital structure (however, if any such petition is filed against
Tenant, then the filing of such petition shall not constitute an Event of
Default, unless it is not dismissed within 60 days after the filing
thereof).
(c) Tenant fails to continuously operate its business at the Premises for
the permitted use set forth herein without prior written notice to
Landlord.
(d) Tenant fails to discharge or bond over any lien placed upon the
Premises in violation of Section 22 within ten days after any such lien or
encumbrance is filed against the Premises or Equipment Yard Area.
(e) Tenant fails to comply with any term, provision or covenant of this
Lease (other than those previously listed in this Section 18), and such
failure continues for 20 30 days after written notice thereof to Tenant;
provided that if such failure is not reasonably capable of being cured
within such 30-day period, Tenant shall have such additional time to cure
such failure as may reasonably be required, provided Tenant commences such
cure within the initial 30-day period and diligently pursues such cure to
completion.
19. REMEDIES.
(a) Upon any Event of Default, Landlord may, in addition to all other
rights and remedies afforded Landlord hereunder or by Law, take any of the
following actions:
(1) Terminate this Lease by giving Tenant written notice thereof, in
which event, Tenant shall pay to Landlord the sum of (A) all Rent accrued
hereunder through the date of termination, (B) all amounts due under Section
19(b), and (C) an amount equal to (i) 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 rate of interest set forth for 26-week U.S.
governmental bills sold at a discount from face value in units of $10,000 to
$1,000,000 as published on the date this Lease is terminated by The Wall Street
Journal, Southwest Edition, in its listing of 'Money Rates" under the heading
"Treasury Bills" (or, if no such rate is published, the "Discount Rate" as
published on such date under the "Money Rates" listing), minus (ii) the then
present fair rental value of the Premises for such period, similarly discounted;
or
11
(2) Terminate Tenant's right to possess the Premises and Equipment
Yard Area without terminating this Lease by giving written notice thereof to
Tenant, in which event Tenant shall pay to Landlord (A) all Rent and other
amounts accrued hereunder to the date of termination of possession, (B) all
amounts due from time to time under Section 19(b), and (C) 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 reasonable discretion,
may determine (including a term different than 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
or Park of which the Building is a part. 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. 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 or Equipment
Yard Area 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 taken
by Landlord to exclude or dispossess Tenant of the Premises and Equipment Yard
Area shall be deemed to be taken tinder this Section 19(a)(2). if Landlord
elects to proceed under this Section 19(a)(2), it may at any time elect to
terminate this Lease under Section 19(a)(1). Additionally, without notice
Landlord may alter locks or other security devices at the Premises or Equipment
Yard Area to deprive Tenant of access thereto, and Landlord shall not be
required to provide a new key or right of access to Tenant.
(b) 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 and Equipment Yard Area, (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.
Landlord's acceptance of Rent following an Event of Default shall not waive
Landlord's rights regarding such Event of Default. Landlord's receipt of Rent
with knowledge of any default by Tenant here tinder shall not be a waiver of
such default, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless set forth in writing and signed by Landlord. 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. If Landlord repossesses the Premises or
Equipment Yard Area pursuant to the authority herein granted, then Landlord
shall have the right to (A) keep in place and use or (B) remove and store, at
Tenant's expense, all of the furniture, fixtures, equipment and other property
in the Premises and Equipment Yard Area, including that which is owned by or
leased to Tenant at all times before any foreclosure thereon by Landlord or
repossession thereof by any lessor thereof or third ▇▇▇▇▇ having a lien thereon.
Landlord may relinquish possession of all or any portion of such furniture,
fixtures, equipment and other property to any person (a "Claimant") who presents
to Landlord a copy of any instrument represented by Claimant to have been
executed by Tenant (or any predecessor of Tenant) granting Claimant the right
tinder various circumstances to take possession of such furniture, fixtures,
equipment or other property, without the necessity on the part of Landlord to
inquire into the authenticity or legality of the instrument. Landlord may, at
its option and without prejudice to or waiver of any rights it may have, escort
Tenant to the Premises to retrieve any personal belongings of Tenant and/or its
employees The rights of Landlord herein stated are in addition to any and all
other rights that Landlord has or may hereafter have at law or in equity, and
Tenant agrees that the rights herein granted Landlord are commercially
reasonable.
20. LANDLORD'S DEFAULT. If Landlord fails to pet-form any of its obligations
hereunder within 30 days after written notice from Tenant specifying such
failure, Tenant's exclusive remedy shall be an action for damages . Unless
Landlord fails to so cure such default after such notice, Tenant shall not have
any remedy or cause of action by reason thereof. Liability of Landlord to Tenant
for any default by Landlord, shall be limited to actual, direct, but not
consequential, damages therefor and shall be recoverable only from the interest
of Landlord in the Building and the Land, and neither Landlord nor Landlord's
owners shall have any personal liability therefor. Tenant hereby waives its
statutory lien under Section 91.004 of the Texas Property Code.
12
21. MORTGAGES.
(a) Attached hereto as Exhibit "H" is Landlord's Mortgagee form. This
Lease shall be subordinate to any deed of trust, mortgage or other security
instrument (a "Mortgagee"), and any ground lease, master lease, or primary lease
(a "Primary Lease") that now or hereafter covers any portion of the Premises
(the mortgagee under any Mortgage or the lessor under any Primary Lease is
referred to herein as "Landlord's Mortgagee"), and to increases, renewals,
modifications, consolidations, replacements, and extensions thereof. However,
any Landlord's Mortgagee may elect to subordinate its Mortgage or Primary Lease
(as the case may be) to this Lease by delivering written notice thereof to
Tenant. Subject to Tenant's receipt of a commercially reasonable non-disturbance
agreement from Landlord's Mortgagee, the provisions of this Section 21 shall be
self-operative, and no further instrument shall be required to effect such
subordination; however, Tenant shall from time to time within ten business days
after request therefor, execute any instruments that may be reasonably required
by any Landlord's Mortgagee to evidence the subordination of this Lease to any
such Mortgage or Primary Lease.
(b) 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, provided such party assumes the obligations of Landlord
under this Lease. Tenant shall not seek to enforce any remedy it may have for
any default on the part of 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.
(c) Notwithstanding any such attornment or subordination of a Mortgage or
Primary Lease to this Lease, the Landlord's Mortgagee shall not be liable for
any acts of any previous landlord, shall not be obligated to install the
Building Shell, and shall not be bound by any amendment to which it did not
consent in writing nor any payment of Rent made more than one month in advance.
22. ENCUMBRANCES. Tenant has no authority, express or implied, to create or
place any lien or encumbrance of any kind or nature whatsoever upon, or in any
manner to bind Landlord's property or the interest of Landlord in the Premises
or Equipment Yard Area or to charge the Rent for any claim in favor of any
person dealing with Tenant, including those who may furnish materials or perform
labor for any construction or repairs. Tenant shall pay or cause to be paid all
sums due for any labor performed or materials furnished in connection with any
work performed on the Premises by or at the request of Tenant. As soon as Tenant
is made aware, Tenant shall give Landlord immediate written notice of the
placing of any lien or encumbrance against the Premises.
23. MISCELLANEOUS.
(a) Words of any gender used in this Lease shall include any other gender,
and words in the singular shall include the plural, unless the context otherwise
requires. The captions inserted in this Lease are for convenience only and in no
way affect the interpretation of this Lease. The following terms shall have the
following meanings: "Laws" shall mean all federal, state, and local laws, rules,
and regulations; all court orders, governmental directives, and governmental
orders; and all restrictive covenants affecting the Property, and "Law" shall
mean any of the foregoing; "affiliate" shall mean any person or entity which,
directly or indirectly, controls, is controlled by, or is under common control
with the party in question; "Tenant Party" shall include Tenant, any assignees
claiming by, through, or under Tenant, any subtenants claiming by, through, or
under Tenant, and any of their respective agents, contractors, employees,
invitees and parties to any collocation agreements with Tenant; and "including"
shall mean including, without limitation. The normal rule of construction that
any ambiguities he resolved against the drafting party shall not apply to the
interpretation of this Lease or any exhibits or amendments hereto.
(b) Landlord may transfer and assign, in whole or in part, its rights and
obligations in the Building and property that are the subject to this Lease to a
party assuming the same, in which case Landlord shall have no further liability
hereunder for obligations accruing from and after such assignment. Each party
shall furnish to the other,
13
promptly upon demand, a corporate resolution, proof of due authorization by
partners, or other appropriate documentation evidencing the due authorization of
such party to enter into this Lease.
(c) Whenever a period of time is herein prescribed for action to be taken
by Landlord or Tenant hereunder, other than an action involving the payment of
money, neither party shall 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 beyond the control of Landlord or Tenant, as
the case may be.
(d) Tenant shall, from time to Lime, within tea business days after
request of Landlord, deliver to Landlord, or Landlord's designee, [a certificate
of occupancy for the Premises,] financial statements for itself, and an estoppel
certificate stating that this Lease is in full effect, the date to which Rent
has been paid, the unexpired Term and such other factual matters pertaining to
this Lease as may be reasonably requested by Landlord. Tenant's obligation to
furnish the above-described items in a timely fashion is a material inducement
for Landlord's execution of this Lease. Within 10 business days of Tenant's
request, Landlord shall deliver to Tenant an estoppel stating such factual
matters as may be reasonably requested by Tenant.
(e) This Lease constitutes the entire agreement of the Landlord and Tenant
with respect to the subject matter of this Lease, and contains all of the
covenants and agreements of Landlord and Tenant with respect thereto. Landlord
and Tenant each acknowledge that no representations, inducements, promises or
agreements, oral or written, have been made by Landlord or Tenant, or anyone
acting on behalf of Landlord or Tenant, which are not contained herein, and any
prior agreements, promises, negotiations, or representations not expressly set
forth in this Lease are of no effect. This Lease may not be altered, changed or
amended except by an instrument in writing signed by both parties hereto.
(f) All obligations of Tenant hereunder not fully performed by the end of
the Term shall survive, including, without limitation, all payment obligations
with respect to Taxes and insurance and all obligations concerning the condition
and repair of the Premises. Tenant shall also, prior to vacating the Premises,
pay to Landlord the amount, as estimated by Landlord, of Tenant's obligation
hereunder for Operating Expenses for the year in which the Term ends. All such
amounts shall be used and held by Landlord for payment of such obligations of
Tenant hereunder, with Tenant being liable for any additional costs therefore
upon demand by Landlord or with any excess to be returned to Tenant after all
such obligations have been determined and satisfied as the case may be.
(g) If any provision of this Lease is illegal, invalid or unenforceable,
then the remainder of this Lease shall not be affected thereby, and in lieu of
each such provision, there shall be added, as a part of this Lease, a provision
as similar in terms to such illegal, invalid or unenforceable clause or
provision as may be possible and be legal, valid and enforceable.
(h) All references in this Lease to "the date hereof" or similar
references shall be deemed to refer to the last date, in point of time, on which
all parties hereto have executed this Lease.
(i) Landlord and Tenant each warrant to the other that it has not dealt
with any broker or agent in connection with this Lease other than The Staubach
Company and ▇▇▇▇▇▇▇▇ ▇▇▇▇ Company and Landlord shall be responsible for payment
of a commission to such brokers. Tenant and Landlord shall each indemnify the
other against all costs, attorneys' fees, and other liabilities for commissions
or other compensation claimed by any other broker or agent claiming the same by,
through, or under the indemnifying party.
(j) If and when included within the term "Tenant," as used in this
instrument, there is more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of a notice
specifying an individual at a specific address within the continental United
States for the receipt of notices and payments to Tenant. All parties included
within the terms "Landlord" and "Tenant," respectively, shall be bound by
notices given in accordance with the provisions of Section 24 to the same effect
as if each had received such notice.
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(k) The terms and conditions of this Lease are confidential and neither
party hereto shall disclose the terms of this Lease to any third party except as
may be required by law or to enforce its rights hereunder, or except to its
attorneys, accountants, employees, lenders or prospective purchasers.
(l) Tenant shall pay interest on all past-due Rent from the date due until
paid at prime rate + 2% per annum. In no event, however, shall the charges
permitted under this Section 23(1) or elsewhere in this Lease, to the extent
they are considered to be interest under applicable Law, exceed the maximum
lawful rate of interest.
24. NOTICES. Each provision of this instrument or of any applicable Laws and
other requirements with reference to the sending, mailing or delivering of
notice or the making of any payment hereunder shall be deemed to be complied
with when and if the following steps are taken:
(a) All Rent shall be payable to Landlord at the address for Landlord set
forth below or at such other address as Landlord may specify from time to time
by written notice delivered in accordance herewith. Tenant's obligation to pay
Rent shall not be deemed satisfied until such Rent has been actually received by
Landlord.
(b) All payments required to be made by Landlord to Tenant hereunder shall
be payable to Tenant at the address set forth below, or at such other address
within the continental United States as Tenant may specify from time to time by
written notice delivered in accordance herewith.
(c) Any written notice or document required or permitted to be delivered
hereunder shall be deemed to be delivered upon the earlier to occur of (1)
tender of delivery (in the case of a hand-delivered notice), (2) deposit in the
United States Mail, postage prepaid, Certified Mail, or (3) receipt by facsimile
transmission, in each case, addressed to the parties hereto at the respective
addresses set Out below, or at such other address as they have theretofore
specified by written notice delivered in accordance herewith. If Landlord has
attempted to deliver notice to Tenant at Tenant's address reflected on
Landlord's books but such notice was returned or acceptance thereof was refused,
then Landlord may post such notice in or on the Premises, which notice shall be
deemed delivered to Tenant upon the posting thereof. Notices to Tenant shall
state "Attention: Real Estate and Legal Department" thereon, and copies of
notices of default to Tenant shall also be sent to ▇▇▇▇▇▇, Rice et al., ▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
25. HAZARDOUS WASTE. The term "Hazardous Substances," as used in this Lease
shall mean pollutants, contaminants, toxic or hazardous wastes, or any other
substances, the removal of which is required or the use of which is restricted,
prohibited or penalized by any "Environmental Law," which term shall mean any
Law relating to health, pollution, or protection of the environment. Tenant
hereby agrees that (a) no activity will be conducted on the Premises that will
produce any Hazardous Substances, except for such activities that are part of
the ordinary course of Tenant's business activities (the "Permitted Activities")
provided such Permitted Activities are conducted in accordance with all
Environmental Laws and have been approved in advance in writing by Landlord
(Tenant's current use of the Premises as a data center and offices, together
with the use of the Equipment Yard Area, are hereby approved by Landlord); (b)
the Premises will not be used in any manner for the storage of any Hazardous
Substances except for storage of such materials that are used in the ordinary
course of Tenant's business (the "Permitted Materials") provided such Permitted
Materials are properly stored in a manner and location satisfying all
Environmental Laws and approved in advance in writing by Landlord; (c) no
portion of the Premises will be used as a landfill or a dump; (d) Tenant will
not install any underground tanks of any type, except as contemplated in the
Tenant Work; (e) Tenant will not allow any surface or subsurface conditions to
exist or come into existence that constitute, or with the passage of time may
constitute a public or private nuisance; and (f) Tenant will not permit any
Hazardous Substances to be brought onto the Premises, except for the Permitted
Materials, and if so brought or found located thereon, the same shall be
immediately removed by Tenant, with proper disposal, and all required cleanup
procedures shall be diligently undertaken pursuant to all Environmental Laws. If
at any time during or after the Term, the Premises are contaminated by any
Hazardous Substances caused by any Tenant Party, Tenant shall defend, indemnify
and hold Landlord harmless from all claims, demands, actions, liabilities,
costs, expenses, damages and obligations of any nature arising from or as a
result of the use of the Premises by Tenant. Tenant will maintain on the
Premises a list of all materials stored at the Premises for which a material
safety data sheet (an "MSDS") was issued by the producers or manufacturers
thereof, together with copies of the MSDS's for such
15
materials, and shall deliver such list and MSDS copies to Landlord upon
Landlord's request therefor. Tenant shall remove all Permitted Materials from
the Premises in a manner reasonably acceptable to Landlord before Tenant's right
to possess the Premises ends. Upon not less than five (5) business days prior
written notice, Landlord may enter the Premises and conduct environmental
inspections and tests therein as it may require from time to time, provided that
Landlord shall use reasonable efforts to minimize the interference with Tenant's
business. Such inspections and tests shall be conducted at Landlord's expense,
unless they reveal the presence of Hazardous Substances (other than Permitted
Materials) or that Tenant has not complied with the requirements set forth in
this Section 25 in which case Tenant shall reimburse Landlord for the cost
thereof within ten business days after Landlord's request therefor. Landlord
represents and warrants that, as of the date it delivers the Building Shell,
there shall be no Hazardous Substances located on or about the Building or the
Land. Landlord shall defend, indemnify and hold Tenant harmless from all claims,
demands, actions, liabilities, costs, expenses, damages and obligations of any
nature arising from or as a result of the existence of any Hazardous Substances
on or about the Building or the land, which existed thereof prior to the date
Landlord delivered the Building Shell to Tenant. Landlord will provide Tenant
with a copy of the Phase I Environmental Site Assessment report dated December
31, 1997. To Landlord's current, actual knowledge, except as may be reflected in
the above referenced Phase I Environmental Site Assessment report, as of the
execution date of this Lease, no Hazardous Substances are located in, on, or
under the Land, Building, or Premises in violation of Environmental Law.
26. LANDLORD'S WAIVER. Landlord waives all liens or other rights (whether
common law, statutory or otherwise) with respect to the equipment, personal
property and fixtures of Tenant located or to be located at the Premises and/or
the Equipment Yard Area and agrees to execute a landlord's consent and waiver
with respect to any such property in a form reasonably requested by Tenant
within ten business (10) days of Tenant's request therefore.
27. NO OFFER. The submission of this Lease to Tenant shall not be construed as
an offer to enter into this Lease. Tenant shall have no rights under this Lease
or in or to the Premises, unless and until Landlord has executed a copy of this
Lease and delivered it to Tenant.
28. ABATEMENT OF BASE RENT. Base Rent shall be abated during the first four (4)
months of the Term. Commencing with the fifth (5th) month of the Term, Tenant
shall make Base Rent payments as otherwise provided in the Lease.
Notwithstanding such abatement of Base Rent (a) all other sums due under the
Lease, including Tenant's share of Taxes and Operating Expenses, shall be
payable as provided in the Lease, and (b) any increases in Base Rent set forth
in the Lease shall occur on the dates scheduled therefore.
29. SIGNS. Provided that the installation and maintenance thereof complies with
all Laws, and Tenant has received all approvals, consents, and permits required
by Law therefore, Tenant may install and maintain up to one sign on the facade
of the Building and may install signs bearing Tenant's name and/or logo on the
exterior doors of the Building and one sign installed on the parapet of the
Building (each, a "Sign" and collectively, the "Signs"), provided that, in each
case, the Sign's design, color scheme, location, material composition, and
method of installation are approved by Landlord (which approval shall not be
unreasonably withheld or delayed), are in compliance with the Signage Guidelines
attached hereto as Exhibit C. Tenant shall maintain such Signs (except for the
monument sign described below) in a good, clean, and safe condition, and method
of installation approved with all Laws. Tenant shall repair all damage caused by
the installation, use, maintenance, and removal of the Sign (except for the
monument sign described below) and, upon their removal, restore the Building
where such signs were located to its condition immediately before the
installation thereof (ordinary wear and tear excepted). Within 30 days after the
earlier of (a) termination of Tenant's right to possess the Premises or (b) the
end of the Term, Tenant shall remove the Signs (except for the monument sign
described below) and perform all restoration work as provided above. If Tenant
fails to do so within such 30-day period, Landlord may, without compensation to
Tenant, perform such work and dispose of the Signs (except for the monument sign
described below) in any manner it deems appropriate or deem such signs abandoned
and, after removing Tenant's logo there from, use such Signs; Tenant shall pay
to Landlord all actual, out-of-pocket costs incurred in connection therewith
within 30 days after Landlord's request therefore. It is the intention of the
parties that Tenant bear all risks relating to the installation, use,
maintenance, operation, and removal of the Signs (except for the monument sign
described below); therefore, Tenant shall defend, indemnify, and hold harmless
Landlord, its agents, and their respective Affiliates from all losses, claims,
costs, and liabilities arising in connection with or relating to the
installation, maintenance, use, operation, and removal of the Sign (except for
the monument sign described below), including, without limitation,
16
that arising from Landlord's negligence (other than its sole or gross
negligence). The rights granted to Tenant under this Section 29 are personal to
Digital Island, Inc., may not be assigned to any party without Landlord's
express prior written consent specifically consenting to the assignment of
Tenant's signage rights under this Section 29 which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, such rights may be
assigned or transferred, (i) to an assignee or sublessor approved by Landlord
pursuant to Section 14 hereof, or (ii) pursuant to a Transfer, assignment or
sublease for which consent is not required hereunder. In addition to the
foregoing, Landlord shall, at its sole cost and expense, construct and maintain
a monument sign outside of the Building at a mutually agreed upon location which
shall contain Tenant's name at the top thereof. Landlord shall not name or grant
any signage rights at the Building to any other entity.
30. EXTENSION OPTIONS. Provided no Event of Default exists, Tenant may renew
this Lease for three (3) 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 eighteen (18) months
before the expiration of the Term in question. On or before the commencement
date of the extended Term in question, Landlord and Tenant shall execute an
amendment to this Lease extending the Term on the same terms provided in this
Lease, except as follows:
(a) The Base Rent payable for each month during each such extended Term
shall be the fair market rental rate (the "Fair Market Rental Rate") for the
Premises, taking into consideration all relevant factors for comparable leases
in comparable premises, including, without limitation, the term, rent, rental
concessions, allowances, and commissions payable with respect to such leases;
the condition, age, quality, location, utility, efficiency and size of such
comparable premises; and the credit standing of the tenants under such
comparable leases;
(b) Tenant shall have no further renewal options (other than those set
forth herein) unless expressly granted by Landlord in writing; and
(c) 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 lessee inducements,
unless any such allowances were included when determining the Fair Market Rental
Rate.
Within 30 days after receipt of Tenant's written notice to renew, Landlord
shall deliver to Tenant written notice of the Fair Market Rental Rate and shall
advise Tenant of the required adjustment to Base Rent, if any, and the other
terms and conditions offered. Tenant shall, within ten business days after
receipt of Landlord's notice, notify Landlord in writing whether Tenant accepts
or rejects Landlord's determination of the Fair Market Rental Rate. If Tenant
rejects Landlord's determination of the Fair Market Rental Rate and timely
notifies Landlord thereof, Tenant may, in its notice to Landlord, require that
the determination of the Fair Market Rental Rate be made by brokers. In such
event, within ten days thereafter, each party shall select a qualified
commercial real estate broker with at least ten years experience in appraising
property and buildings in the city or submarket in which the Premises are
located, which broker shall not have been engaged by such party for any matter
during the prior three years. The two brokers shall give their opinion of
prevailing rental rates within 20 days after their retention. In the event the
opinions of the two brokers differ and, after good faith efforts over the
succeeding 20 day period, they cannot mutually agree, the brokers shall
immediately and jointly appoint a third broker with the qualifications specified
above. This third broker shall promptly (within five days) choose either the
determination of Landlord's broker or Tenant's broker and such choice of this
third broker shall be final and binding on Landlord and Tenant. Each party shall
pay its own costs for its real estate broker. Following the determination of the
Fair Market Rental Rate by the brokers, the parties, shall equally share the
costs of any third broker. The parties shall promptly execute an amendment as
set forth above. If Tenant fails to timely notify Landlord in writing that
Tenant accepts or rejects Landlord's determination of the Fair Market Rental
Rate, time being of the essence with respect thereto, Tenant's rights under this
Section 30 shall terminate and Tenant shall have no right to renew this Lease.
Tenant's rights under this Section 30 shall terminate if(l) this Lease or
Tenant's right to possession of the Premises is terminated, or (2) Tenant fails
to timely exercise its option under this Section 30, time being of the essence
with respect to Tenant's exercise thereof.
17
31. EQUIPMENT YARD. Tenant shall have the right to install such equipment as it
deems necessary in the Equipment Yard Area in a location mutually agreed to by
Tenant and Landlord by June 30, 2000, including without limitation up to five
back-up generators, four or more air cooled chillers, up to three underground
storage tanks of up to 20,000 gallons each, transformers, transfer switches and
other equipment, collectively defined as ("Equipment") as specified on Exhibit
B-1 and the Plans. Landlord shall design and construct the screen walls around
such Equipment Yard Area, with the cost of the concrete walls to be paid by
Tenant. Any design features which add to the cost of constructing the screen
walls shall be paid for by Landlord.
32. SATELLITE DISH. Provided that Tenant complies with the terms of this
Section 32, Tenant may, at its risk and expense, install satellite dishes and
antennae and related wiring (collectively, the "Satellite Dish") on the roof of
the Building at a location approved by Landlord pursuant to the installation
standards reasonably required by Landlord. Tenant hereby acknowledges that the
Satellite Dish will be exclusively used by Tenant in conjunction with Tenant's
permitted use, and shall not be used for the purpose of generating revenue
directly from such operation of the Satellite Dish. Tenant further acknowledges
that any operation of the Satellite Dish for the purpose of generating revenue
shall require Landlord's prior written consent, which consent will be evidenced
by a separate written document (the "Landlord's Antenna Site Agreement") between
Landlord and Tenant. Before installing the Satellite Dish, Tenant shall submit
to Landlord for its approval (which approval shall not be unreasonably withheld
or delayed) plans and specifications which (a) specify in reasonable detail the
design, location, size, and frequency of the Satellite Dish and (b) are
sufficiently detailed to allow for the installation of the Satellite Dish in a
good and workmanlike manner reasonably screened as Landlord may require from
view from the ground level and in accordance with all Laws. If Landlord fails to
approve or disapprove such plans within 10 days of receipt thereof, Landlord
shall be deemed to have approved the same. If Landlord approves of such plans,
Tenant shall install (in a good and workmanlike manner), maintain and use the
Satellite Dish in accordance with all Laws and shall obtain all permits required
for the installation and operation thereof; copies of all such installation
permits and (if possible) the operating permits must be submitted to Landlord
before Tenant begins to install the Satellite Dish. Tenant shall thereafter
maintain all permits necessary for the maintenance and operation of the
Satellite Dish while it is on the Building and operate and maintain the
Satellite Dish in such a manner so as not to unreasonably interfere with any
other satellite, antennae, or other transmission facility on the Building's roof
or in the Building. To the extent Tenant's Satellite Dish does interfere with
any other satellite antenna installed prior to Tenant's Satellite Dish, or other
transmission facility on the Building's roof or in the Building, upon notice of
such interference Tenant shall eliminate the interference or remove the
Satellite Dish. Landlord may require that Tenant screen the Satellite Dish with
a parapet wall or other screening device reasonably acceptable to Landlord.
Tenant shall maintain the Satellite Dish and the screening therefore in good
repair and condition. Tenant may only use the Satellite Dish in connection with
Tenant's business. Except in connection with Tenant's business, Tenant shall not
allow any third party to use such equipment, whether by sublease, license,
occupancy agreement or otherwise. Tenant shall, at its risk and expense, remove
the Satellite Dish, within five days after the occurrence of any of the
following events: (1) the termination of Tenant's right to possess the Premises;
(2) the termination of the Lease; (3) the expiration of the Term; or (4)
Tenant's abandoning the Premises. If Tenant fails to do so, Landlord may remove
the Satellite Dish and store or dispose of it in any manner Landlord deems
appropriate without liability to Tenant; Tenant shall reimburse Landlord for all
costs incurred by Landlord in connection therewith within ten business days
after Landlord's request therefore. Tenant shall repair any damage to the
Building caused by or relating to the Satellite Dish, including that which is
caused by its installation, maintenance, use, or removal. It is the intention of
the parties that Tenant bear all risks relating to the installation, use,
maintenance, operation, and removal of the Satellite Dish; therefore, Tenant
shall defend, indemnify, and hold harmless Landlord, its agents, and their
respective affiliates from all losses, claims, costs, and liabilities arising in
connection with or relating to the installation, maintenance, use, operation,
and removal of the Satellite Dish, including, without limitation, that arising
from Landlord's negligence (other than its sole or gross negligence or willful
misconduct). Neither Landlord nor any other party shall have the right to
install satellite dishes or antennae on the roof of the Building. Landlord shall
not access the roof of the Building without Tenant's prior written consent,
which shall not be unreasonably withheld or delayed.
33. PARKING SPACES. Landlord shall provide Tenant with unreserved, uncovered
self-parking spaces based on a maximum of one parking space per 400 rentable
square feet in the Premises within the Project's surface parking lot (the
"Parking Area") for the use by Tenant's employees, agents and invitees. Tenant
may label and designate, following Landlord's reasonable approval with respect
thereto and at Tenant's expense, up to a maximum of ten percent of the spaces as
reserved spaces in the area adjacent to the Premises reasonably acceptable to
Landlord.
18
Subject to the terms of this Lease, the Parking Area shall be available for use
24 hours a day, every day of the year during the Term. Landlord shall keep and
maintain the Parking Area in a clean and neat condition and illuminated during
all hours of darkness. In the event that Tenant elects to change the use of the
Premises to predominantly office use, Tenant shall be entitle to 3.3 parking
spaces per 1,000 rentable square feet of the Premises.
34. RIGHT OF FIRST REFUSAL. Tenant shall have a continuous, ongoing and
irrevocable First Right of Lease and Right of First Refusal for up to
approximately 100,000 square feet of available space in Phase VII of
International Business Park, subject only to the existing rights of any existing
tenants.
Landlord shall provide Tenant thirty (30) days notice of its intention to
commence construction drawings for Phase VII of International Business Park.
Should Tenant elect to lease Phase VII, Landlord shall provide the same shell
condition as provided for Phase VI. Should Tenant elect not to lease building
prior to commencement of construction drawings, Landlord may proceed with
construction of the base building pursuant to Landlord's plans and
specifications.
For any space leased in accordance with the Right of First Refusal, Tenant
will match the terms of any bonafide offer received by Landlord. However, any
expansion space leased by Tenant pursuant to the Right of First Refusal during
the first two years of the Lease term shall be for a term that is coterminous
with the existing lease at the same rental rate as the existing lease, and any
tenant improvement or other allowances shall be prorated based on the length of
lease term remaining.
Any space leased in accordance with the Right of First Refusal after month
24 shall be at the Market Rate. Market Rate shall be defined as what an arm's
length, non-expansion, non-renewal, non-equity tenant would pay for space of
comparable size, quality, utility, and location, taking into account the length
of the term and all allowances and concessions being offered in the market. In
the event Landlord and Tenant cannot agree on Market Rate, an arbitration
process will be employed to determine Market Rate.
35. NO WARRANTIES. TENANT ACKNOWLEDGES THAT (I) THE BUILDING AND IMPROVEMENTS
TO BE CONSTRUCTED BY LANDLORD ON THE LAND PURSUANT TO EXHIBIT B ARE SUITABLE FOR
THE PURPOSE FOR WHICH THE PREMISES ARE LEASED AND LANDLORD HAS MADE NO WARRANTY,
REPRESENTATION, COVENANT, OR AGREEMENT WITH RESPECT TO THE MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE OF THE PREMISES, (2) NO REPRESENTATIONS AS TO
THE REPAIR OF THE PREMISES, NOR PROMISES TO ALTER, REMODEL OR IMPROVE THE
PREMISES HAVE BEEN MADE BY LANDLORD (UNLESS AND EXCEPT AS MAY BE SET FORTH IN
EXHIBIT D-l ATTACHED TO THIS LEASE, OR AS IS OTHERWISE EXPRESSLY SET FORTH IN
THIS LEASE), AND (3) THERE ARE NO REPRESENTATIONS OR WARRANTIES, EXPRESSED,
IMPLIED OR STATUTORY, EXCEPT AS SPECIFICALLY SET FORTH IN THIS LEASE
Executed by Tenant on June 29, 2000
TENANT: DIGITAL ISLAND, INC
By: /s/
-----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. S________
Title: Vice President
Address: ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Executed by Landlord on July 5, 2000.
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LANDLORD: CB PARKWAY BUSINESS CENTER VI, LTD.
By: I5BCO, Incorporation, its general partner
By: /s/
-----------------------------------------------
Name: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------------------
Title: President
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
20