Exhibit 10.2

LEASE AGREEMENT

BETWEEN

RIVER PLACE CORPORATE PARK, LP

AS LANDLORD, AND

SHORETEL, INC.

AS TENANT,

COVERING APPROXIMATELY 10,683 RENTABLE SQUARE FEET

OF THE BUILDING KNOWN AS

RIVER PLACE CORPORATE PARK, BUILDING IV

LOCATED AT

6500 RIVER PLACE BLVD.

AUSTIN, TRAVIS COUNTY, TEXAS

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TABLE OF CONTENTS

 

SECTION 1. DEFINITIONS AND BASIC PROVISIONS

     1   

SECTION 2. LEASE GRANT

     1   

SECTION 3. TERM

     1   

SECTION 4. RENT

     2   

(a) Payment

     2   

(b) Consumer Price Index Increases to Basic Rental

     2   

(c) Basic Costs

     3   

(d) Annual Cost Statement

     3   

(e) Adjustments to Basic Costs

     3   

SECTION 5. DELINQUENT PAYMENT; HANDLING CHARGES

     3   

SECTION 6. SECURITY DEPOSIT

     3   

SECTION 7. LANDLORD’S OBLIGATIONS

     4   

(a) Services

     4   

(b) Excess Utility Use

     4   

(c) Discontinuance

     5   

(c) Restoration of Services; Abatement

     5   

SECTION 8. IMPROVEMENTS AND REPAIRS

     5   

(a) Improvements; Alterations

     5   

(b) Repairs; Maintenance

     6   

(c) Performance of Work

     6   

(d) Mechanic’s Liens

     6   

SECTION 9. PERMITTED AND PROHIBITED USES

     7   

SECTION 10. ASSIGNMENT AND SUBLETTING

     7   

(a) Transfers; Consent

     7   

(b) Cancellation

     8   

(c) Additional Compensation

     8   

SECTION 11. INSURANCE; WAIVERS; SUBROGATION; INDEMNITY

     8   

(b) Landlord Insurance

     9   

(c) Waiver of Negligence Claims; No Subrogation

     9   

(d) Indemnity

     9   

SECTION 12. SUBORDINATION ATTORNMENT; NOTICE TO LANDLORD’S
MORTGAGEE

     10   

(a) Subordination

     10   

(b) Attornment

     10   

(c) Notice to Landlord’s Mortgagee

     10   

SECTION 13. RULES AND REGULATIONS

     10   

SECTION 14. CONDEMNATION

     10   

(a) Taking - Landlord’s and Tenant’s Rights

     10   

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(b) Taking - Landlord’s Rights

     10   

(c) Award

     11   

SECTION 15. FIRE OR OTHER CASUALTY

     11   

(a) Repair Estimate

     11   

(b) Landlord's and Tenant's Rights

     11   

(c) Landlord's Rights

     11   

(d) Repair Obligation

     11   

SECTION 16. TAXES

     11   

SECTION 17. EVENTS OF DEFAULT

     12   

SECTION 18. REMEDIES

     12   

SECTION 19. PAYMENT BY TENANT; NON-WAIVER

     13   

(a) Payment by Tenant

     13   

(b) No Waiver

     13   

SECTION 20. SURRENDER OF PREMISES

     13   

SECTION 21. HOLDING OVER

     14   

SECTION 22. CERTAIN RIGHTS RESERVED BY LANDLORD

     14   

SECTION 23. SUBSTITUTION SPACE

     15   

SECTION 24. MISCELLANEOUS

     15   

(a) Landlord Transfer

     15   

(b) Landlord's Liability

     15   

(c) Force Majeure

     15   

(d) Brokerage

     15   

(e) Estoppel Certificates and Financial Information

     15   

(f) Notices

     15   

(g) Severability

     15   

(h) Amendments; and Binding Effect

     16   

(i) Quiet Enjoyment

     16   

(j) Joint and Several Liability

     16   

(k) Captions

     16   

(l) No Merger

     16   

(m) No Offer

     16   

(n) Exhibits

     16   

(o) Entire Agreement

     16   

(p) Dates of Performance

     17   

1.1

     17   

(q) Non-Disclosure

     17   

(r) Time of the Essence

     17   

(s) Waiver of Jury Trial

     17   

(t) Attorney’s Fees

     17   

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SECTION 25. HAZARDOUS SUBSTANCES

     17   

SECTION 26. BUILDING AMENITIES

     18   

EXHIBITS TO THIS LEASE

 

Exhibit A

  

- Outline of Premises

Exhibit B

  

- Building Rules and Regulation

Exhibit C

  

- Basic Costs

Exhibit D

  

- Tenant Finish-Work

Exhibit E

  

- Parking

Exhibit F

  

- Commencement Date Memorandum

Exhibit G

  

- Option to Extend

Exhibit H

  

- Right of First Offer

Exhibit I

  

- Expansion Option

Exhibit J

  

- Signage, Roof Rights, and Backup Generator

Exhibit K

  

- Location of Backup Generator

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BASIC LEASE INFORMATION

 

Lease Date:

  

June 30, 2008

Tenant:

  

Shoretel, Inc.

Tenant’s Address:

  

960 Stewart Drive, Sunnyvale, California 94085

Tenant Contact:

  

TBD by Tenant

Tenant Telephone:

  

(408) 331-3600

Tenant’s Broker:

  

Staubach Company, to be paid by Landlord.

Landlord:

  

River Place Corporate Park, LP

Landlord’s Address:

  

901 Mopac Expressway

Building One, Suite 200

Austin, Texas 78746

Landlord Contact:

  

Aspen Growth Properties, Inc., attn: Property Manager for Landlord

Landlord Telephone:

  

512-732-9922

Landlord’s Broker:

  

Not Applicable

Building:

  

The building commonly known as “River Place Corporate Park, Building IV”,
located at 6500 River Place Blvd., Austin, Texas 78730 which contains 87,228 of
rentable square feet.

Premises:

  

Suite No. 200 and 202 containing approximately 10,683 rentable square feet
(“RSF”) on the second floor of the Building. The Premises are outlined on the
plan attached to the Lease as Exhibit A. The RSF comprising the Premises are
computed based on the usable square feet within the Premises plus Tenant’s
proportionate share of the Common Areas. The RSF shall initially be 10,683 RSF.

 

Tenant shall occupy Suite 202 consisting of approximately 1,201 RSF once the
current tenant vacates the space and upon five (5) days following the
substantial completion of Tenant Improvements in Suite 202, which date is
estimated to be December 31, 2008. The current tenant’s lease expires on October
31, 2008.

 

Tenant shall be permitted to occupy Suite 203 consisting of approximately 4,070
SF beginning as of the date of full execution of this Lease, on a temporary
basis until Suite 200 is ready for occupancy, which shall be five (5) days
following the substantial completion of Tenant Improvements in Suite 200. Tenant
shall not be required to pay any Basic Costs or Base Rent in connection with
Suite 203 during Tenant’s occupancy of Suite 203.

Landlord shall have no right to relocate the Premises during the Term of this
Lease, as renewed and extended, if applicable.

Project:

  

River Place Corporate Park Office Buildings, consisting of Buildings I through
VII, associated parking structures and common area, with an address of 6500
River Place Blvd., Austin, Texas 78730.

ASPEN GROWTH PROPERTIES – NET LEASE

 

         LEASE SUMMARY PAGE 1   

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Term:

  

The Commencement Date (as herein defined), shall be two (2) separate dates and
shall be determined as follows: Forty two (42) months, commencing no earlier
than (i) five (5) calendar days following substantial completion of the Tenant
Improvements in Suite 200, which date is estimated to be September 1, 2008; and
(ii) five (5) days following the substantial completion of Tenant Improvements
in Suite 202, which date is estimated to be December 31, 2008 (collectively
referred to herein as the “Commencement Date”), as each may be extended pursuant
to paragraph 4, of Exhibit “D” (“Tenant-Finish Work”), and ending at (a) 5:00
p.m., February 28, 2012 for Suite 200; and (ii) 5:00 p.m. February 28, 2012 for
Suite 202, which dates are subject to adjustment and earlier termination as
provided in this Lease. Notwithstanding the foregoing, if Landlord does not
deliver the Premises to Tenant on or before November 1, 2008, Tenant shall have
the right to terminate this Lease.

Base Rent:

  

Upon the Commencement Date, Base Rent shall be the following:

 

Period

  

Per RSF

  

Monthly Rent

  

Annual Rent

Months 1 - 6

  

$0.00

  

$0.00

  

$0.00

Months 7 – 18

  

$18.50

  

$16,469.63

  

$197,635.50

Months 19 – 30

  

$19.00

  

$16,914.75

  

$202,977.00

Months 31 - 42

  

$19.50

  

$17,359.88

  

$208,318.50

 

  

•      All Basic Costs for Months 1 – 6 of the Term, beginning as of the
Commencement Date specific to Suite 200 and Suite 202, as applicable, shall be
abated.

Security Deposit:

  

$26,787.63

Rent:

  

Base Rent, Tenant’s Proportionate Share of Basic Costs and all other sums that
Tenant may owe to Landlord under the Lease.

Permitted Use:

  

General office, training, engineering, software testing labs and all other uses
permitted under the Project’s zoning and uses incidental thereto.

Tenant’s

Proportionate Share:

  

12.25 %, which is the percentage obtained by dividing (a) 10,683 the RSF in the
Premises by (b) the 87,228 RSF in the Building, provided that Landlord and
Tenant acknowledge that Tenant’s Proportionate Share shall be adjusted as
additional completed RSF are added to or subtracted to the Building.

Tenant’s Estimated

Proportionate Share

of Basic Costs:

  

Costs of $10.59 per RSF ($9,427.75 per month).

Initial

Liability Insurance

Amount

  

$3,000,000.00

Tenant

Improvement

Allowance:

  

$11.50 per RSF ($122,854.50)

 

Tenant may, in Tenant’s sole discretion, amortize any additional elected Tenant
Improvement Allowance (as used, the “Elected TI”) up to $5.00 per rentable
square foot at 10% interest over the first three (3) calendar years of the Term.
The Tenant Improvement Allowance and Elected TI may be used for any and all
costs associated with the Premises including, but not limited to: building
standard and non-building standard

ASPEN GROWTH PROPERTIES – NET LEASE

 

         LEASE SUMMARY PAGE 2   

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improvements, architectural and engineering services, permitting, and
construction management fees, moving expenses, security network setup, telephone
equipment and installation, signage, furniture and furniture set up, all cabling
costs and consultant fees.

Building’s

Proportionate Share:

  

The percentage obtained by dividing (a) the 87,228 RSF contained within the
Building by (b) 586,499 RSF contained within the Project; provided that Landlord
and Tenant acknowledge that the Building’s Proportionate Share shall be adjusted
as additional completed rentable square feet are added to or subtracted from the
Project. Currently, the Building’s Proportionate Share equals 14.87%.

The foregoing Basic Lease Information is incorporated into and made a part of
the Lease identified above. All terms set forth in the left column are defined
terms used in this Lease and having the meaning set forth in the corresponding
right column. If any conflict exists between any Basic Lease Information and the
Lease, then the Lease shall control.

 

LANDLORD: River Place Corporate Park, LP

 

       a Texas limited partnership

 

by: ASPEN GROWTH PROPERTIES, INC., its General Partner

 

By:

  /s/ Mark McAllister  

Name:

 

Mark McAllister

 

Its:

 

President

TENANT:

   

Shoretel, Inc.

 

By:

 

                /s/ John W. Combs

 

Name:

 

                John W. Combs

 

Its:

 

                CEO

ASPEN GROWTH PROPERTIES – NET LEASE

 

         LEASE SUMMARY PAGE 3   

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LEASE

THIS LEASE AGREEMENT (this “Lease”) is entered into as of June 30, 2008, between
River Place Corporate Park, L.P., a Texas limited partnership (“Landlord”), and
Shoretel, Inc. (“Tenant”).

 

SECTION 1.
DEFINITIONS

AND BASIC
PROVISIONS

  

1. The definitions and basic provisions set forth in the Basic Lease Information
(the “Basic Lease Information”) executed by Landlord and Tenant
contemporaneously herewith are incorporated herein by reference for all
purposes.

SECTION 2.

LEASE GRANT

  

2. Subject to the terms of this Lease, Landlord leases to Tenant, and Tenant
leases from Landlord, the Premises.

SECTION 3.

TERM

  

3. (a) Term Defined. The Term of this Lease begins on the Commencement Date and
ends on the date shown in the Basic Lease Information. If the Commencement Date
is not the first day of a calendar month, then the Term shall be extended by the
time between the Commencement Date and the first day of the next month. Either
at Landlord’s request prior to Tenant’s taking possession of the Premises, or no
later than 10 days after receipt of request therefore following the Commencement
Date, Landlord and Tenant shall execute a Commencement Date Memorandum in the
form attached hereto as Exhibit F.

 

(b) No Liability if Term Delayed. If this Lease is executed before the Premises
become vacant or otherwise available and ready for occupancy by Tenant, or if
any present occupant of the Premises holds over and Landlord cannot acquire
possession of the Premises before the Commencement Date, then (i) Tenant’s
obligation to pay Rent hereunder shall be waived until Landlord tenders
possession of the Premises to Tenant which date shall be no later than November
1, 2008 or Tenant may terminate this Lease, (ii) the Term shall be extended by
the time between the scheduled Commencement Date and the date on which Landlord
tenders possession of the Premises to Tenant (which date will then be defined as
the Commencement Date), (iii) Landlord shall not be in default hereunder or be
liable for damages therefore, and (iv) Tenant shall accept possession of the
Premises when Landlord tenders possession thereof to Tenant.

 

(c) Condition of the Premises. Prior to the Commencement Date, Landlord will
construct the tenant improvements in accordance with the terms of Exhibit “D”,
Tenant Finish-Work, attached hereto. By occupying the Premises, Tenant shall be
deemed to have accepted the Premises in their AS-IS condition as of the date of
such occupancy, subject to the performance of punch-list items that remain to be
performed by Landlord, if any. Tenant shall execute and deliver to Landlord,
either before the end of any Landlord and Tenant inspection of the Premises on
the Commencement Date, or if not done at that time within ten days after
Landlord has requested same, a letter on Landlord’s standard form confirming (1)
the Commencement Date, (2) that Tenant has accepted the Premises, and (3) that
Landlord has performed all of its obligations with respect to the Premises
(except for punch-list items specified in such letter). Notwithstanding the
foregoing, Landlord hereby warrants and represents to Tenant that the Premises,
the Building and the common areas are in compliance with all laws, rules,
regulations and ordinances, including, without limitation, all environmental
laws and the Americans with Disabilities Act of 1990 (ADA) and that Landlord
shall be responsible thereafter for any legal requirements applicable to the
Building and all common areas.

 

ASPEN GROWTH PROPERTIES – NET LEASE

         1   

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Subsequent to Tenant’s acceptance of the Premises, Tenant shall be responsible
for the cost of all work required to comply with the retrofit requirements of
the Americans with Disabilities Act of 1990, and all rules, regulations, and
guidelines promulgated thereunder, as the same may be amended from time to time,
necessitated by any installations, additions, or alterations made in or to the
Premises at the request of or by Tenant or by Tenant’s use of the Premises
(other than retrofit work whose cost has been particularly identified as being
payable by Landlord in an instrument signed by Landlord and Tenant), regardless
of whether such cost is incurred in connection with retrofit work required in
the Premises.

SECTION 4.

RENT

  

4. (a) Payment. Tenant shall timely pay to Landlord the Base Rent and all
additional sums to be paid by Tenant to Landlord under this Lease, including
Tenant’s Proportionate Share of Basic Costs as set forth in subsection (c)
below, without notice or demand and without deduction or set off, at Landlord’s
Address (or such other address as Landlord may from time to time designate in
writing to Tenant). Base Rent, adjusted as herein provided, shall be payable
monthly in advance. The first monthly installment of Base Rent (which for
purposes herein is the seventh (7th) month of the Term) shall be payable
contemporaneously with the execution of this Lease; thereafter, monthly
installments of Base Rent shall be due on the first day of the eighth (8th) full
calendar month of the Term and continuing on the first day of each succeeding
calendar month during the Term. Base Rent for any fractional month at the
beginning of the Term shall be prorated based on 1/365 of the current annual
Base Rent for each day of the partial month this Lease is in effect, and shall
be due on the Commencement Date.

 

(b) Increase to Base Rent. The monthly Base Rent shall increase once at the end
of each Lease Year as shown in the section entitled “Base Rent” in the Basic
Lease Information. A Lease Year means a period of twelve (12) consecutive
calendar months; provided, however, that the first Lease Year shall commence on
the Commencement Date and expire on the last day of the twelfth (12th) full
calendar month following the Commencement Date.

 

Tenant shall not be responsible for increases in operating in excess of six
percent (6%) per year on a cumulative basis, exclusive of those expenses
categorized as not within the control of the Landlord “Non-Controllable
Expenses”. For purposes of this provision, Non-Controllable Expenses shall be
defined as taxes, utilities, insurance, and expenses that increase as a result
of minimum wage rate increases. In addition, management fees shall be capped not
to exceed four percent (4%) of the annual rental income received. Landlord
agrees to protect any substantial tax increases.

 

Landlord shall keep books and records which shall, for the purpose of verifying
the Common Areas Expenses, which books and records shall be subject to
examination by Tenant and Tenant’s accountants at reasonable times during
business hours and in a manner which does not unreasonably interfere with the
conduct of Landlord’s business. Any such examination for any calendar year shall
be conducted within three (3) months following Landlord’s delivery to Tenant of
the statement of actual Basic costs, and shall be limited to the calendar year
for which such statement of actual Basic Costs was furnished. The examination
shall be conducted by an accountant licensed in the State of Texas, and the
compensation paid to such accountant shall not be based on the results of the
examination or a reduction in Tenant’s obligation to pay Basic Costs. If the
examination of Landlord’s statement of actual Basic Costs shows that actual
Basic Costs have been understated, Tenant shall pay to Landlord the difference
between the amount actually paid by Tenant to Landlord for the prior calendar
year, and the amount that the examination shows should have been paid by Tenant
to Landlord. If the examination of Landlord’s statement of actual Basic costs
shows that actual Basic costs have been overstated, Landlord shall have thirty
(30) days to conduct its own

 

ASPEN GROWTH PROPERTIES – NET LEASE

         2   

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examination to confirm Tenant’s accountant’s results, or in the alternative
shall pay (on in Landlord’s discretion, credit against Rent next due) to Tenant
the amount which Tenant’s examination has shown to have been overpaid by Tenant.
All examinations of Landlord’s books and records shall be solely at Tenant’s
expense; provided, however, if following landlord’s review Landlord’s statement
of actual Basic Costs is shown to have been overstated by five percent (5%) or
more, Landlord shall promptly reimburse Tenant for Tenant’s reasonable expenses
of such examination.

 

(c) Basic Costs. On a monthly basis, Tenant shall pay to Landlord an amount
equal to one twelfth (1/12th) of the product of (1) Landlord’s annual Basic
Costs (as described on Exhibit C), multiplied by (2) Tenant’s Proportionate
Share. Tenant shall pay to Landlord, on the Commencement Date and on the first
day of each calendar month thereafter, an amount equal to Tenant’s Estimated
Proportionate Share of Basic Costs for the ensuing month. From time to time
during any calendar year, Landlord may estimate and re-estimate the
Proportionate Share of Basic Costs to be due by Tenant for that calendar year
and deliver a copy of the estimate or re-estimate to Tenant. Thereafter, the
monthly installments of estimated Basic Costs payable by Tenant shall be
appropriately adjusted in accordance with the estimations so that, by the end of
the calendar year in question, Tenant shall have paid all of its Proportionate
Share of Basic Costs as estimated by Landlord. It is understood that the
“estimated” cost is subject to revision based on the actual operating costs of
the Building and Project.

 

(d) Annual Cost Statement. By April 1 of each calendar year, or as soon
thereafter as practicable, Landlord shall furnish to Tenant a statement of
Landlord’s actual Basic Costs (the “Annual Cost Statement”) for the previous
year adjusted as provided in Section 4.(e). Such Annual Cost Statement shall
contain the information used by Landlord to prepare its standard accounting
documents required to compute Landlord’s cost, plus Landlord’s calculation in
determining Tenant’s Proportionate Share. If the Annual Cost Statement reveals
that Tenant paid more for Basic Costs than Tenant’s Proportionate Share of Basic
Costs in the year for which such statement was prepared, then Landlord shall, at
its option, reimburse or credit Tenant for such excess within 30 days after
delivery of the Annual Cost Statement in question; likewise, if Tenant paid less
than Tenant’s Proportionate Share of Basic Costs, then Tenant shall pay Landlord
such deficiency within 30 days after delivery of the Annual Cost Statement in
question.

 

(e) Adjustments to Basic Costs. With respect to any calendar year or partial
calendar year in which the Building is not occupied to the extent of 95% of the
rentable area thereof, the Basic Costs for such period shall, for the purposes
hereof, be increased to the amount which would have been incurred had the
Building been occupied to the extent of 95% of the rentable area thereof.

SECTION 5.
DELINQUENT
PAYMENT;
HANDLING
CHARGES

  

5. In the event any Rent has not been paid within five (5) days following the
date such payment is due, Landlord may charge Tenant a late fee equal to ten
percent (10%) of the delinquent payment to reimburse Landlord for its cost and
inconvenience incurred as a consequence of Tenant’s delinquency; provided,
however, that Tenant shall be afforded one (1) late payments of Rent in any
given year during the Term, as renewed and extended, before Landlord may take
action. In addition, if any Rent has not been paid within ten (10) days
following the date such payment is due, any such delinquent Rent shall bear
interest from the date due until paid at the rate of ten percent per annum. In
no event, however, shall the charges permitted under this Section 5 or elsewhere
in this Lease, to the extent the same are considered to be interest under
applicable law, exceed the maximum lawful rate of interest.

SECTION 6.
SECURITY

  

6. Contemporaneously with the full execution of this Lease, Tenant shall pay to
Landlord, in immediately available funds, the Security Deposit, which shall be
held by Landlord without liability for interest and as security for the
performance by Tenant of its obligations

 

ASPEN GROWTH PROPERTIES – NET LEASE

         3   

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DEPOSIT

  

under this Lease. The Security Deposit is not an advance payment of Rent or a
measure or limit of Landlord’s damages upon an Event of Default (defined in
Section 17). Landlord may, from time to time and without prejudice to any other
remedy, use all or a part of the Security Deposit to perform any obligation
which Tenant was obligated, but failed, to perform hereunder. Following any such
application of the Security Deposit, Tenant shall pay to Landlord on demand the
amount so applied in order to restore the Security Deposit to its original
amount and if Tenant fails to do so within thirty (30) days of such demand, it
shall constitute an Event of Default. Within a reasonable time after the Term
ends, which shall not exceed thirty (30) days after Tenant has provided Landlord
with written notice of Tenant’s forwarding address, Landlord shall return to
Tenant the balance of the Security Deposit not applied to satisfy Tenant’s
obligations with a written description and itemization of any deductions. If
Landlord transfers its interest in the Premises, then Landlord shall assign the
Security Deposit to the transferee and Landlord thereafter shall have no further
liability for the return of the Security Deposit.

SECTION 7.
LANDLORD’S
OBLIGATIONS

  

7. (a) Services. Landlord shall furnish to Tenant (1) water (hot and cold) at
those points of supply provided for general use of tenants of the Building; (2)
heated and refrigerated air conditioning as appropriate, during normal business
hours, and at such temperatures and in such amounts as are reasonably considered
by Landlord to be standard; (3) janitorial service to the Premises on weekdays
other than holidays for Building-standard installations (Landlord reserves the
right to bill Tenant separately for extra janitorial service required for
non-standard installations) and such window washing as may from time to time in
Landlord’s judgment be reasonably required; (4) elevator(s) for ingress and
egress to the floor on which the Premises are located, in common with other
tenants, provided that Landlord may reasonably limit the number of elevators to
be in operation at times other than during normal business hours and on
holidays; (5) replacement of Building-standard light bulbs and fluorescent
tubes; and (6) electrical current during normal business hours at a power
capacity of 4 watts per rentable space foot for lighting and outlets (“Normal
Usage”). Landlord shall maintain the common areas of the Building in reasonably
good order and condition, except for damage occasioned by Tenant, or its
employees, agents or invitees. If Tenant desires any of the services specified
in this Section 7 (a) at any time other than times herein designated, such
services shall be supplied to Tenant upon the written request of Tenant
delivered to Landlord before 3:00 p.m. on the business day preceding such extra
usage, and Tenant shall pay to Landlord the cost of such services (at the
approximate hourly rate charged to other tenants in the Building which is
currently $35 per hour per floor) within ten (10) days after Landlord has
delivered to Tenant an invoice therefore. As used herein, the term “normal
business hours” shall mean from 7:00 a.m. to 7:00 p.m. Monday through Friday and
from 8:00 a.m. to 1:00 p.m. on Saturdays, except for the following holidays (or
the day observed in lieu thereof by national banks): New Year’s Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
(collectively, the “Holidays”).

 

(b) Excess Utility Use. Landlord shall use reasonable efforts to furnish
electrical current for special lighting, computers and other equipment whose
electrical energy consumption exceeds Normal Usage through the then-existing
feeders and risers serving the Building and the Premises (not to exceed,
however, 6.5 watts per rentable square foot), and Tenant shall pay to Landlord
the cost of such service within ten days after Landlord has delivered to Tenant
an invoice therefore. Landlord may determine the amount of such additional
consumption and potential consumption by either or both: (1) a survey of
standard or average tenant usage of electricity in the Building performed by a
reputable consultant selected by Landlord and paid for by Tenant; or (2) a
separate meter in the Premises installed, maintained, and read by Landlord, all
at Tenant’s expense. Tenant shall not install any electrical equipment requiring
special wiring or requiring electrical current in excess of Normal Usage unless
approved in advance by Landlord in its reasonable discretion, unless such
installations are contained in any construction drawings previously approved by
Landlord in connection with the construction of the Landlord Work. The use of
electricity

 

ASPEN GROWTH PROPERTIES – NET LEASE

         4   

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in the Premises shall not exceed the capacity of existing feeders and risers to
or wiring in the Premises. Any risers or wiring required to meet Tenant’s excess
electrical requirements shall, upon Tenant’s written request, be installed by
Landlord, at Tenant’s cost, if, in Landlord’s sole and absolute judgment, the
same are necessary and shall not cause permanent damage or injury to the
Building or the Premises, cause or create a dangerous or hazardous condition,
entail excessive or unreasonable alterations, repairs, or expenses, or interfere
with or disturb other tenants of the Building. If Tenant uses machines or
equipment (other than general office machines, personal computers and electronic
data processing equipment) in the Premises which affect the temperature
otherwise maintained by the air conditioning system or otherwise overload any
utility, Landlord may install supplemental air conditioning units or other
supplemental equipment in the Premises, and the cost thereof, including the cost
of installation, operation, use, and maintenance, shall be paid by Tenant to
Landlord within ten days after Landlord has delivered to Tenant an invoice
therefore.

 

(c) Discontinuance. Landlord’s obligation to furnish services under Section 7
shall be subject to the rules and regulations of the supplier of such services
and governmental rules and regulations. Landlord may, upon not less than
30-days’ prior written notice to Tenant, discontinue any such service to the
Premises, provided Landlord first arranges for a direct connection thereof
through the supplier of such service. Tenant shall, however, be responsible for
contracting with the supplier of such service and for paying all deposits for,
and costs relating to such service.

 

(d) Restoration of Services; Abatement. Landlord shall use reasonable efforts to
restore any service that becomes unavailable; however, such unavailability shall
not (i) render Landlord liable for any damages caused thereby, (ii) be a
constructive eviction of Tenant, (iii) constitute a breach of any express or
implied warranty, or, except as provided in the next sentence, or (iv) entitle
Tenant to any abatement of Tenant’s obligations hereunder. However, if Tenant is
prevented from making reasonable use of the Premises, including, without
limitation, because the HVAC system is not working, for more than thirty (30)
consecutive days (or five (5) consecutive business days if the reason for such
unavailability is within the reasonable control of Landlord) because of the
unavailability of any such service, Tenant shall, as its exclusive remedy
therefore, be entitled to a reasonable abatement of Rent for each consecutive
day (after such thirty (30) day or five (5) business day period, as applicable)
that Tenant is so prevented from making reasonable use of the Premises.

SECTION 8.
IMPROVEMENTS
AND REPAIRS

  

8. (a) Improvements; Alterations. Other than improvements to be paid for by
Landlord in connection with the Landlord Work, improvements to the Premises
shall be installed at the expense of Tenant only in accordance with plans and
specifications which have been previously submitted to and approved in writing
by Landlord. After the initial Tenant improvements are made, no alterations or
physical additions in or to the Premises may be made without Landlord’s prior
written consent, such consent not to be unreasonably withheld, conditioned or
delayed and provided that Landlord’s consent shall not be necessary for any
proposed Tenant improvement that does not exceed [Ten Thousand and No/100
Dollars ($10,000)] and does not affect the Building’s structure, electrical or
HVAC systems. Tenant shall not paint or install lighting or decorations, signs,
window or door lettering, or advertising media of any type on or about the
Premises without the prior written consent of Landlord, such consent not to be
unreasonably withheld, conditioned or delayed. All alterations, additions, or
improvements (whether temporary or permanent in character, and including without
limitation all air-conditioning equipment (currently there is a supplemental
HVAC unit in the server room) and all other equipment that is in any manner
connected to the Building’s plumbing system) made in or upon the Premises,
either by Landlord or Tenant, shall be Landlord’s property at the end of the
Term and shall remain on the Premises without compensation to Tenant. Approval
by Landlord of any of Tenant’s drawings and plans and specifications prepared in
connection with any improvements in the

 

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Premises shall not constitute a representation or warranty of Landlord as to the
adequacy or sufficiency of such drawings, plans and specifications, or the
improvements to which they relate, for any use, purpose, or condition, but such
approval shall merely be the consent of Landlord as required hereunder.
Subsequent to Tenant’s acceptance of the Premises, Tenant shall be responsible
for the cost of all work required to comply with the retrofit requirements of
the Americans with Disabilities Act of 1990, and all rules, regulations, and
guidelines promulgated thereunder, as the same may be amended from time to time,
necessitated by any installations, additions, or alterations made in or to the
Premises at the request of or by Tenant or by Tenant’s use of the Premises
(other than retrofit work whose cost has been particularly identified as being
payable by Landlord in an instrument signed by Landlord and Tenant), regardless
of whether such cost is incurred in connection with retrofit work required in
the Premises (including the Work described in Exhibit D) or in other areas of
the Building.

 

(b). Repairs; Maintenance. Tenant shall maintain the Premises in a clean, safe,
operable attractive condition, and shall not permit or allow to remain any
waste, Molds (as defined herein), or damage to any portion of the Premises.
Tenant shall repair or replace, subject to Landlord’s direction and supervision,
any damage to the Building caused by Tenant or Tenant’s agents, contractors, or
invitees. If Tenant fails to make such repairs or replacements within thirty
(30) days after the occurrence of such damage, then Landlord may, after delivery
of written notice to Tenant, make the same at Tenant’s cost. In lieu of having
Tenant repair any such damage outside of the Premises, Landlord may repair such
damage at Tenant’s cost. The cost of any repair or replacement work performed by
Landlord under this Section 8 shall be paid by Tenant to Landlord within twenty
(20) days after Landlord has delivered to Tenant an invoice therefore. In no
event shall Landlord have any obligation or liability to Tenant or any others
for the existence of molds, fungi, bacteria, mildew, and other similar matters
(collectively referred to hereafter as “Molds”), if the cause of the Molds is
due to Tenant’s own conduct, acts or omissions, including the failure to perform
any of Tenant’s obligations under the Lease.

 

(c). Performance of Work. All work described in this Section 8 shall be
performed only by Landlord or by contractors and subcontractors reasonably
approved in writing by Landlord. Tenant shall cause all contractors and
subcontractors to procure and maintain insurance coverage against risks, in such
amounts, and with such companies as Landlord may reasonably require, and to
procure payment and performance bonds reasonably satisfactory to Landlord
covering the cost of the work. All such work shall be performed in accordance
with all legal requirements and in a good and workmanlike manner so as not to
damage the Premises, the primary structure or structural qualities of the
Building, or plumbing, electrical lines, or other utility transmission facility.
All such work which may affect the HVAC, electrical system, or plumbing must be
approved by the Building’s engineer of record.

 

(d). Mechanic’s Liens. Tenant has no authority, express or implied, to create,
permit or place any lien or encumbrance of any kind or nature whatsoever upon,
or in any manner to bind, the interest of Landlord or Tenant in the Premises.
Tenant acknowledges and agrees that in connection with all Improvements or
Alterations to the Premises, i) Tenant does not act as Landlord’s agent; ii) the
Improvements or Alterations are done solely for the benefit of Tenant; and iii)
the Improvements or Alterations do not “enrich” Landlord because they are
specific to the needs of Tenant and therefore have little or no intrinsic value
to Landlord. Other than for any and all loss, cost or expense based on or
arising out of Landlord’s initial construction of the Building and in connection
with the Landlord Work on the Premises. Tenant will save and hold Landlord
harmless from any and all loss, cost or expense, including without limitation
attorneys’ fees, based on or arising out of asserted claims or liens against the
leasehold estate or against the right, title and interest of the Landlord in the
Premises or under the terms of this Lease. Subsequent to the completion of the
Landlord Work in the Premises, Tenant shall not permit any mechanic’s liens to
be filed against the Premises or

 

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the Building for any work performed, materials furnished or obligation incurred
by or at the request of Tenant. If any such a lien or encumbrance is filed, then
Tenant shall, within fifteen (15) days after Landlord has delivered notice of
the filing to Tenant, either pay the amount of the lien or diligently contest
such lien and deliver to Landlord a bond or other security reasonably
satisfactory to Landlord. If Tenant fails to timely take either such action,
then Landlord may pay the lien claim without inquiry as to the validity thereof,
and any amounts so paid, including expenses and interest, shall be paid by
Tenant to Landlord within ten days after Landlord has delivered to Tenant an
invoice therefore.

SECTION 9.
PERMITTED AND
PROHIBITED

USES

  

9. Permitted and Prohibited Uses. Tenant shall use the Premises only for the
Permitted Use and shall comply with all laws, orders, rules, and regulations
relating to the use, condition, and occupancy of the Premises, the Building, the
parking areas and all common areas. The Premises shall not be used for any use
other than the Permitted Use. The Premises shall not be used for a use which is
disreputable, illegal or immoral; creates extraordinary fire hazards; results in
a nuisance to other tenants; induces vibrations, noise, odors or blight
noticeable by the public or other tenants; results in an increased rate of
insurance on the Building or its contents or the storage of any hazardous
materials or substances. If, because of Tenant’s acts or omissions, the rate of
insurance on the Building or its contents increases, Tenant shall pay to
Landlord the amount of such increase on demand, and acceptance of such payment
shall not constitute a waiver of any of Landlord’s other rights. Tenant shall
conduct its business and control its agents, employees, and invitees in such a
manner as not to create any nuisance or interfere with other tenants or Landlord
in its management of the Building. The total number of persons constituting
Tenant and Tenant’s employees and agents that are using the Premises on a daily
basis shall not exceed five (5) persons for every 1,000 square feet of rentable
space or part thereof.

SECTION 10.
ASSIGNMENT

AND

SUBLETTING

  

10. (a) Transfers; Consent. Tenant shall not, without the prior written consent
of Landlord (which Landlord shall not unreasonably withhold, condition or
delay), (1) assign, transfer, or encumber this Lease or any estate or interest
herein, whether directly or by operation of law, (2) permit any other entity to
become Tenant hereunder by merger, consolidation, or other reorganization;
provided that in the event an entity with an equal to or greater net worth than
Tenant desires to merge with Tenant, Landlord’s consent shall not be required,
(3) if Tenant is an entity other than a corporation whose stock is publicly
traded, permit the transfer of an ownership interest in Tenant so as to result
in a change in the current control of Tenant, (4) sublet any portion of the
Premises, (5) grant any license, concession, or other right of occupancy of any
portion of the Premises, or (6) permit the use of the Premises by any parties
other than Tenant (any of the events listed in Sections 10.(a)(1) through
10.(a)(6) being a “Transfer”). If Tenant requests Landlord’s consent to a
Transfer, then Tenant shall provide Landlord with a written description of all
terms and conditions of the proposed Transfer, copies of the proposed
documentation (including but not limited to any assignments or sub-leases, but
specifically excluding any sales agreements), 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; current banking, financial, and other credit information; and general
references sufficient to enable Landlord to reasonably determine the proposed
transferee’s creditworthiness and character. In order to defray Landlord’s costs
associated with a proposed transfer Tenant shall pay the sum of $1,000.00 to
Landlord at the time of such request. 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.
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 therefore. Landlord’s consent to any Transfer shall
not waive Landlord’s rights to object to or deny any subsequent Transfers. If an
Event of Default occurs while the Premises or any part thereof are subject to a
Transfer, then Landlord, in addition to its other remedies, may collect directly
from such transferee all rents becoming due to Tenant and apply such rents
against Rent. Tenant authorizes its transferees to make

 

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payments of rent directly to Landlord upon receipt of notice from Landlord to do
so. Landlord hereby acknowledges that Landlord shall not have the right of
recapture in connection with any Transfer as provided in this Section 10(a).

 

(b) Subletting. Notwithstanding the foregoing as set forth in Section 10(a),
Tenant shall have the right to sublet or license all or a portion of the
Premises to any Tenant related entity, subsidiary or successor of Tenant
(“Affiliate”) without obtaining Landlord’s consent but upon providing written
notice to Landlord, so long as Affiliate has equal or better credit than Tenant.
If Affiliate does not have equal or better credit than Tenant, Tenant shall
remain liable pursuant to this Lease. Landlord hereby acknowledges that Landlord
shall not have the right of recapture in connection with any Transfer as
provided in this Section 10(b).

 

(c) Additional Compensation. Tenant shall pay to Landlord, immediately upon
receipt thereof, one-half (1/2) of all compensation received by Tenant for a
Transfer (other than to an Affiliate) that exceeds the aggregate Base Rent and
Tenant’s share of Basic Costs allocable to the portion of the Premises covered
thereby, less any costs of subleasing, tenant improvements, fees, commissions,
moving costs, down time, any other related expenses and any other concessions
reasonably required to induce a Subtenant. Landlord hereby acknowledges that
this Section 10(c) does not apply to any Transfer to an Affiliate as set forth
in Section 10(b) above, and that Landlord shall have no right to receive any
such compensation from Tenant in connection with a Transfer to an Affiliate.

SECTION 11.
INSURANCE;
WAIVERS;
SUBROGATION;
INDEMNITY

  

11. (a) Tenant Insurance. Tenant shall at its expense procure and maintain
throughout the Term the following insurance policies: (1) comprehensive general
liability insurance (“CGL”), and, if necessary, commercial umbrella insurance,
in amounts of not less than a combined single limit of $3,000,000 (the “Initial
Liability Insurance Amount”), insuring Tenant, Landlord, Landlord’s agents and
their respective affiliates against all liability for injury to or death of a
person or persons or damage to property arising from the use and occupancy of
the Premises, (2) insurance covering the full value of Tenant’s property and
improvements, and other property (including property of others), in the
Premises, and (3) workman’s compensation insurance required under Texas law,
containing a waiver of subrogation endorsement reasonably acceptable to
Landlord. The CGL shall include coverage of a minimum of $1 million for bodily
injury by accident or $1 million each employee for bodily injury by disease for
each employee. If the CGL contains a general aggregate limit, it shall apply
separately to the Premises. Such CGL shall be written on ISO occurrence form CG
00 01 01 96 (or a substitute form providing equivalent coverage) and shall cover
liability arising from premises, operations, independent contractors,
products-completed operations, personal injury and advertising injury, and
liability assumed under an insured contract. Landlord shall be included as an
insured under the CGL, using ISO additional insured endorsement CG 20 11 or a
substitute providing equivalent coverage, and under the commercial umbrella, if
any. This insurance shall apply as primary insurance with respect to any other
insurance or self-insurance programs afforded to Landlord. There shall be no
endorsement or modification of the CGL to make it excess over other available
insurance; alternatively, if the CGL states that it is excess or pro rata, the
policy shall be endorsed to be primary with respect to the additional insured.

 

The Initial Liability Insurance Amount shall be increased every two (2) years in
the event the Consumer Price Index (“CPI Index”) has increased more than ten
(10) percent over the base CPI Index in effect at the beginning of such 2 year
period, to the insurable amount offered by the insurance company that is closest
but higher than the Initial Liability Insurance Amount, times the CPI Index
increase plus 100. All such insurance policies shall be in form, and issued by
companies, reasonably satisfactory to Landlord. The term “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. By requiring insurance
herein, Landlord does not represent that coverage and limits will necessarily be

 

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adequate to protect Tenant, and as such coverage and limits shall not be deemed
as a limitation of Tenant’s liability under the indemnities granted to Landlord
in this Lease. Tenant may, at its option, purchase business income, business
interruption, extra expense or similar coverage as part of this CGL, and in no
event shall Landlord be liable for any business interruption or other
consequential loss sustained by Tenant, whether or not it is insured, even if
such loss is caused by the negligence of Landlord, its employees, officers,
directors or agents but not for any gross negligence or willful misconduct of
Landlord, its employees, officers, directors or agents. Tenant may, at its
option, purchase insurance to cover its personal property. In no event shall
Landlord be liable for any damage to or loss of personal property sustained by
Tenant, whether or not it is insured, even if such loss is caused by the
negligence of Landlord, its employees, officers, directors or agents.

 

(b) Landlord Insurance Landlord shall maintain, without cost to Tenant (except
as otherwise provided in Basic Costs), with an insurer(s) holding a Best’s
Rating of B+ or higher with a Financial Size of Class IX or higher, and
reasonably acceptable to Tenant:

 

(i) ISO Simplified Commercial General Liability Insurance. The limits of
liability of such insurance shall be an amount not less than Three Million and
00/100 Dollars ($3,000,000.00) per occurrence, Bodily Injury including death and
Three Million and 00/100 Dollars ($3,000,000) per occurrence, Property Damage
Liability or Three Million and 00/100 Dollars ($3,000,000) combined single limit
for Bodily Injury and Property Damage Liability; and

 

(ii) Property insurance on the Building, the Premises and the common areas
insuring ninety percent (90%) of the full replacement value thereof (less
foundations). The policy shall not include a deductible in excess of One Hundred
Thousand Dollars ($100,000), and shall include, but not be limited to, fire and
extended coverage perils. The policy will contain appropriate endorsements
waiving the insurer’s right of subrogation against Tenant.

 

(c) Waiver of Negligence Claims; No Subrogation. Landlord shall not be liable to
Tenant or those claiming by, through, or under Tenant for any injury to or death
of any person or persons or the damage to or theft, destruction, loss, or loss
of use of any property or inconvenience (a “Loss”) caused by casualty, theft,
fire, third parties, or any other matter (including Losses arising through
repair or alteration of any part of the Building, or failure to make repairs, or
from any other cause), unless the result of gross negligence of any party caused
such Loss in whole or in part. Landlord and Tenant each waives any claim it
might have against the other for any damage to or theft, destruction, loss, or
loss of use of any property, to the extent the same is insured or required to be
insured against under any insurance policy that covers the Building, the
Premises, Landlord’s or Tenant’s fixtures, personal property, leasehold
improvements, or business, unless caused by the gross negligence of such party.
Each party shall cause its insurance carrier to endorse all applicable policies
waiving the carrier’s rights of recovery under subrogation or otherwise against
the other party.

 

(d) Indemnity. Subject to Section 11.(c), Tenant shall defend, indemnify, and
hold harmless Landlord and its agents from and against all claims, demands,
liabilities, causes of action, suits, judgments, and expenses (including
attorneys’ fees) for any Loss arising from any occurrence on the Premises or
from Tenant’s failure to perform its obligations under this Lease (other than a
Loss arising from the sole or gross negligence or willful misconduct of Landlord
or its agents), even though caused or alleged to be caused by the joint,
comparative, or concurrent negligence or fault of Landlord or its agents, and
even though any such claim, cause of action, or suit is based upon or alleged to
be based upon the strict liability of Landlord or its agents. This indemnity
provision is intended to indemnify Landlord and its agents against the
consequences of their own negligence or fault as provided above when Landlord or
its agents are jointly, comparatively, or concurrently

 

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negligent with Tenant. This indemnity provision shall survive termination or
expiration of this Lease.

SECTION 12.
SUBORDINATION
ATTORNMENT;
NOTICE TO
LANDLORD’S
MORTGAGEE

  

12. (a) Subordination. So long as Tenant has received a fully executed
Subordination Nondisturbance and Attornment Agreement in a form acceptable to
Tenant, then this Lease shall be subordinate to any deed of trust, mortgage, or
other security instrument (a “Mortgage”), or any ground lease, master lease, or
primary lease (a “Primary Lease”), that now or hereafter covers all or any part
of the Premises (the mortgagee under any Mortgage or the Lessor under any
Primary Lease is referred to herein as “Landlord’s Mortgagee”).

 

(b) Attornment. Tenant shall attorn to any party succeeding to Landlord’s
interest in the Premises, whether by purchase, foreclosure, deed in lieu of
foreclosure, power of sale, termination of lease, or otherwise, upon such
party’s request, and shall execute such agreements confirming such attornment as
such party may reasonably request.

 

(c) Notice to Landlord’s Mortgagee. Tenant shall not seek to enforce any remedy
it may have for any default on the part of the Landlord without first giving
written notice by certified mail, return receipt requested, specifying the
default in reasonable detail, to any Landlord’s Mortgagee whose address has been
given to Tenant, and affording such Landlord’s Mortgagee a reasonable
opportunity to perform Landlord’s obligations hereunder.

 

(d) Landlord will request the Lender to provide Tenant a Non Disturbance
Agreement.

SECTION 13.
RULES AND
REGULATIONS

  

13. Tenant shall comply with the rules and regulations of the Building which are
attached hereto as Exhibit B, and all parking rules and regulations that are
attached hereto as Exhibit E. Landlord may, from time to time, change such rules
and regulations for the safety, care, or cleanliness of the Building and related
facilities, provided that such changes are reasonable, applicable to all
similarly situated tenants of the Building and will not unreasonably interfere
with Tenant’s Permitted Use of the Premises. Tenant shall be responsible for the
compliance with such rules and regulations by its employees, agents, and
invitees, and with any subsequent rules and regulations as Landlord at any time
or times hereafter may make and communicate in writing to Tenant, provided,
however, that in case of any conflict or inconsistency between the provisions of
this Lease and any of the Rules and Regulations as originally promulgated or as
changed, the provisions of this Lease shall control.

SECTION 14.
CONDEMNATION

  

14. (a) Taking - Landlord’s and Tenant’s Rights. If any part of the Building is
taken by right of eminent domain or conveyed in lieu thereof (a “Taking”), and
such Taking prevents Tenant from conducting its business in the Premises in a
manner reasonably comparable to that conducted immediately before such Taking,
then Landlord may, at its expense, relocate Tenant to office space reasonably
comparable to the Premises, provided that Landlord notifies Tenant of its
intention to do so prior to the effective date of the Taking. Such relocation
may be for no longer than ninety (90) days, and, in the event the relocation of
Tenant is greater than ninety (90) days, then Tenant shall have the option to
terminate this Lease. Landlord shall complete any such relocation within ten
(10) days after Landlord has notified Tenant of its intention to relocate
Tenant. If Landlord does not elect to relocate Tenant following such Taking,
then Tenant may terminate this Lease as of the date of such Taking by giving
written notice to Landlord within sixty (60) days after the Taking, and Rent
shall be apportioned as of the date of such Taking. If Landlord does not
relocate Tenant and Tenant does not terminate this Lease, then Rent shall be
adjusted on a reasonable basis as to that portion of the Premises rendered
untenable by the Taking.

 

(b) Taking - Landlord’s and Tenant’s Rights. If any material portion, but less
than all, of the Building becomes subject to a Taking, or if Landlord is
required to pay any of the proceeds received for a Taking to Landlord’s
Mortgagee, then this Lease, at the option of

 

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either party, exercised by written notice to the other party within thirty (30)
days after such Taking, shall terminate and Rent shall be apportioned as of the
date of such Taking. If either party does not so terminate this Lease, then this
Lease will continue, but if any portion of the Premises has been taken, Base
Rent shall adjust as provided in the last sentence of Section 14.(a).

 

(c) Award. If any Taking occurs, then Landlord shall receive the entire award or
other compensation for the Land, the Building, and other improvements taken. Any
value or award separately attributed to the leasehold shall belong to Tenant. In
addition, Tenant may separately pursue a claim against the condemnor only for
the value of Tenant’s personal property which Tenant is entitled to remove under
this Lease, moving costs and loss of business.

SECTION 15.
FIRE OR OTHER
CASUALTY

  

15. (a) Repair Estimate. If the Premises or the Building are damaged by fire or
other casualty (a “Casualty”), Landlord shall, within thirty (30) days after
such Casualty, deliver to Tenant a good faith estimate (the “Damage Notice”) of
the time needed to repair the damage caused by such Casualty.

 

(b) Landlord’s and Tenant’s Rights. If a material portion of the Premises or the
Building is damaged by Casualty such that Tenant is prevented from conducting
its business in the Premises in a manner reasonably comparable to that conducted
immediately before such Casualty and Landlord estimates that the damage caused
thereby cannot be repaired within 180 days after the commencement of repair,
then Tenant may terminate this Lease by delivering written notice to Landlord of
its election to terminate within thirty (30) days after the Damage Notice has
been delivered to Tenant. If Tenant does not terminate this Lease, then (subject
to Landlord’s rights under Section 15.(c)), Landlord shall repair the Building
or the Premises, as the case may be, as provided below, and Rent for the portion
of the Premises rendered untenable by the damage shall be adjusted on a
reasonable basis from the date of damage until the completion of the repair,
unless Tenant caused such damage, in which case, Tenant shall continue to pay
Rent without abatement.

 

(c) Landlord’s and Tenant’s Rights. If a Casualty damages a material portion of
the Building, and Landlord makes a good faith determination that restoring the
Premises would be uneconomical, or if Landlord is required to pay any insurance
proceeds arising out of the Casualty to Landlord’s Mortgagee, then either party
may terminate this Lease by giving written notice of its election to terminate
within thirty (30) days after the Damage Notice has been delivered to Tenant,
and Base Rent hereunder shall be abated as of the date of the Casualty.
Notwithstanding the foregoing, should such damage occur within the last twelve
months of the Term, as renewed and extended, if applicable, Tenant shall have
the right in Tenant’s sole discretion, to terminate this Lease.

 

(d) Repair Obligation. If neither party elects to terminate this Lease following
a Casualty, then Landlord shall, within a reasonable time after such Casualty,
commence to repair the Building and the Premises and shall proceed with
reasonable diligence to restore the Building and Premises to substantially the
same condition as they existed immediately before such Casualty; however,
Landlord shall not be required to repair or replace any part of the furniture,
equipment, fixtures, and other improvements which may have been placed by, or at
the request of, Tenant or other occupants in the Building or the Premises, and
Landlord’s obligation to repair or restore the Building or Premises shall be
limited to the extent of the insurance proceeds actually received by Landlord
for the Casualty in question.

SECTION 16.
TAXES

  

16. Tenant shall be liable for all taxes levied or assessed against personal
property, furniture, or fixtures placed by Tenant in the Premises. If any taxes
for which Tenant is liable are levied or assessed against Landlord or Landlord’s
property and Landlord elects to pay the same, or if the assessed value of
Landlord’s property is increased by inclusion of such personal property,
furniture or fixtures and Landlord elects to pay the taxes based on

 

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such increase, then Tenant shall pay to Landlord, as additional Rent and upon
demand, that part of such taxes for which Tenant is primarily liable hereunder.

SECTION 17.
EVENTS OF
DEFAULT

  

17. Each of the following occurrences shall constitute an “Event of Default”:

 

(a) Tenant’s failure to pay Rent, or any other sums due from Tenant to Landlord
under the Lease when due, and such failure to pay is not cured within three (3)
business days of the date written notice of such event is received by Tenant
(provided Tenant shall not be entitled to more than one (1) such notice during
any calendar year;

 

(b) Tenant’s failure to perform, comply with, or observe any agreement or
obligation of Tenant under this Lease (other than a payment obligation) on or
before the twentieth (20th) day following written notice of such failure;
provided, however, that in the event Tenant is undertaking reasonable efforts to
cure such default, there will be no Event of Default so long as Tenant is
diligently working to cure same;

 

(c) the filing of a petition by or against Tenant (the term “Tenant” shall
include, for the purpose of this Section 17.(c), any guarantor of the Tenant’s
obligations hereunder) (1) in any bankruptcy or other insolvency proceeding; (2)
seeking any relief under any state or federal debtor relief law; (3) for the
appointment of a liquidator or receiver for all or substantially all of Tenant’s
property or for Tenant’s interest in this Lease; or (4) for the reorganization
or modification of Tenant’s capital structure; provided that Tenant shall have
sixty (60) days following the commencement of an involuntary proceeding to have
such proceeding dismissed before such proceeding shall constitute an Event of
Default;

 

(d) the admission by Tenant that it cannot meet its obligations as they become
due, the making of any transfer in fraud of creditors, or the making by Tenant
of an assignment for the benefit of its creditors or a determination in the
reasonable judgment of Landlord that Tenant has become insolvent by any
definition stated under Chapter 24 of the Texas Property Code or any successor
statute; and

 

(e) If Landlord shall fail to fulfill any covenant or provision of this Lease on
its part to be performed and fail to remedy such failure within thirty (30) days
after Tenant shall have given Landlord written notice of such failure, then the
same shall be an Event of Default by Landlord and Tenant shall have all rights,
powers and remedies available at law or equity.

SECTION 18.
REMEDIES

  

18. Upon any Event of Default, Landlord may, without further notice or demand,
in addition to all other rights and remedies afforded Landlord hereunder or by
law or equity, take any of the following actions:

 

(a) Terminate this Lease, in which event, Tenant shall pay to Landlord the sum
of (1) all Rent accrued hereunder through the date of termination, (2) all
amounts due under Section 19.(a), and (3) an amount equal to (A) the total Rent
that Tenant would have been required to pay for the remainder of the Term
discounted to present value at a per annum rate equal to the “Prime Rate” as
published on the date this Lease is terminated by The Wall Street Journal,
Southwest Edition, in its listing of “Money Rates”, minus (B) the then present
fair rental value of the Premises for such period, similarly discounted; or

 

(b) Terminate Tenant’s right to possession of the Premises without terminating
this Lease, in which event Tenant shall pay to Landlord (1) all Rent and other
amounts accrued hereunder to the date of termination of possession, (2) all
amounts due from time to time under Section 19.(a), and (3) all Rent and other
sums required hereunder to be paid by Tenant during the remainder of the Term,
diminished by any net sums thereafter received by Landlord through reletting the
Premises during such period. Landlord shall use reasonable efforts to relet the
Premises. Landlord and Tenant agree that compliance with

 

ASPEN GROWTH PROPERTIES – NET LEASE

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the following shall constitute reasonable efforts:

 

i) Landlord may relet the Premises on such market terms and conditions as
Landlord in its sole discretion may determine (including a term different from
the Term, rental concessions, and alterations to, and improvement of, the
Premises);

 

ii) however, Landlord shall not be obligated to relet the Premises before
leasing other portions of similar size and nature of the Premises and other
parts of the Building.

 

Landlord shall not be liable for, nor shall Tenant’s obligations hereunder be
diminished because of, Landlord’s failure to relet the Premises or to collect
rent due for such reletting. Tenant shall not be entitled to the excess of any
consideration obtained by reletting over the Rent due hereunder. Reentry by
Landlord in the Premises shall not affect Tenant’s obligations hereunder for the
unexpired Term; rather, Landlord may, from time to time, bring action against
Tenant to collect amounts due by Tenant, without the necessity of Landlord’s
waiting until the expiration of the Term. Unless Landlord delivers written
notice to Tenant expressly stating that it has elected to terminate this Lease,
all actions taken by Landlord to exclude or dispossess Tenant of the Premises
shall be deemed to be taken under this Section 18.(b). If Landlord elects to
proceed under this Section 18.(b), it may at any time elect to terminate this
Lease under Section 18.(a).

 

(c) Change the door locks to the Premises and exclude Tenant from the Premises.
In the event Landlord shall, for the purpose of collecting Rent, or reentering
or regaining possession of the Premises, change the lock(s) to the Premises,
Landlord shall not be obligated to provide Tenant with the new key(s) to the
Premises or provide Tenant with access to the Premises until and unless Tenant
shall have first cured all outstanding defaults [but if Landlord has theretofore
formally terminated this Lease or Tenant’s right of possession of the Premises,
or if the default(s) is/are not subject to cure (such as, but without
limitation, Tenant’s assignment or subletting, change of Permissible Use or
change of trade name without Landlord’s consent, or Tenant’s early desertion,
vacation or abandonment of the Premises), the Landlord shall not be obligated to
provide the new key(s) to Tenant under any circumstances.

SECTION 19.
PAYMENT BY
TENANT;
NON-WAIVER

  

19. (a) Payment by Tenant. Upon any Event of Default, Tenant shall pay to
Landlord all costs incurred by Landlord (including court costs and reasonable
attorneys’ fees and expenses) in (1) obtaining possession of the Premises, (2)
removing, storing and/or selling Tenant’s or any other occupant’s property, (3)
repairing, restoring, altering, remodeling, or otherwise putting the Premises
into condition acceptable to a new tenant, (4) if Tenant is dispossessed of the
Premises and this Lease is not terminated, reletting all or any part of the
Premises (including brokerage commissions, cost of tenant finish work, and other
costs incidental to such reletting), (5) performing Tenant’s obligations which
Tenant failed to perform, and (6) enforcing, or advising Landlord of, its
rights, remedies, and recourses arising out of the Event of Default.

 

(b) No Waiver. Landlord’s acceptance of all or a portion of Rent following an
Event of Default shall not waive Landlord’s rights regarding such Event of
Default. No waiver by Landlord of any violation or breach of any of the terms
contained herein shall waive Landlord’s rights regarding any future violation of
such term or violation of any other term.

SECTION 20.
SURRENDER OF
PREMISES

  

20. No act by Landlord shall be deemed an acceptance or a surrender of the
Premises, and no agreement to accept a surrender of the Premises shall be valid
unless the same is made in writing and signed by Landlord. At the expiration or
termination of this Lease, Tenant shall deliver to Landlord the Premises with
all improvements located thereon in good repair and condition, reasonable wear
and tear (and condemnation and fire or other casualty damage

 

ASPEN GROWTH PROPERTIES – NET LEASE

         13   

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not caused by Tenant, as to which Sections 14 and 15 shall control) excepted,
and shall deliver to Landlord all keys to the Premises. Provided that Tenant has
performed all of its obligations hereunder, Tenant may remove all unattached
trade fixtures, furniture, and personal property placed in the Premises by
Tenant (but Tenant shall not remove any such item which was paid for, in whole
or in part, by Landlord) and any other items previously identified by Tenant in
writing. Additionally, Tenant shall remove such alterations, additions,
improvements, trade fixtures, equipment, wiring, and furniture that is installed
or placed in the Premises by Tenant as Landlord may reasonably request and which
Landlord shall identify to Tenant in writing upon its approval of Tenant’s
alterations, additions, improvements, trade fixtures, equipment, wiring and
furniture which is to be installed or placed in the Premises by Tenant. Tenant
shall repair all damage caused by Tenant’s removal of such items. All items not
so removed shall be deemed to have been abandoned by Tenant and may be
appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant and without any obligation to account for or to pay for
such items. The provisions of this Section 20 shall survive the end of the Term.

SECTION 21.
HOLDING OVER

  

21. If Tenant fails to vacate the Premises at the end of the Term, then Tenant
shall be a tenant at will and, in addition to all other damages and remedies to
which Landlord may be entitled for such holding over, Tenant shall pay, in
addition to the other Rent, a daily Base Rent equal to one hundred fifty percent
(150%) of the daily Base Rent payable during the last month of the Term. In
addition, in the event of such holding over, Tenant shall be liable for and
shall indemnify Landlord for all costs, losses, awards, or judgments (or
reasonable negotiated settlement amount if any claim results in a settlement
prior to any judgment award) due to Landlord’s inability to deliver the Premises
to a successor tenant due to Tenant’s holding over. Nothing contained herein
shall be deemed consent to holding over by Tenant.

SECTION 22.
CERTAIN RIGHTS
RESERVED BY
LANDLORD

  

22. Provided that the exercise of such rights does not unreasonably interfere
with Tenant’s occupancy of the Premises, Landlord shall have the following
rights:

 

(a) to decorate and to make inspections, repairs, alterations, additions,
changes, or improvements, whether structural or otherwise, in and about the
Building or Project (all references to Building herein include the Project), or
any part thereof; for such purposes, to enter upon the Premises upon reasonable
notice to Tenant and, during the continuance of any such work, to temporarily
close doors, entryways, public space, and corridors in the Building; to
interrupt or temporarily suspend Building services and facilities; and to change
the arrangement and location of entrances or passageways, doors, and doorways,
corridors, elevators, stairs, restrooms, or other public parts of the Building;

 

(b) to take such reasonable measures as Landlord deems advisable for the
security of the Building and its occupants, including without limitation
searching all persons entering or leaving the Building; evacuating the Building
for cause, suspected cause, or for drill purposes; temporarily denying access to
the Building; and closing the Building after normal business hours and on
Saturdays, Sundays, and holidays, subject, however, to Tenant’s right to enter
when the Building is closed after normal business hours under such reasonable
regulations as Landlord may prescribe from time to time which may include by way
of example, but not of limitation, that persons entering or leaving the
Building, whether or not during normal business hours, identify themselves to a
security officer by registration or otherwise and that such persons establish
their right to enter or leave the Building;

 

(c) to change the name by which the Building is designated; and

 

(d) to enter the Premises at all reasonable hours and upon giving Tenant
reasonable notice (except in the case of any emergency) to show the Premises to
existing or prospective purchasers, or lenders and to prospective tenants, no
earlier than one hundred eighty (180) days prior to the then expiring Term, as
renewed or extended.

 

ASPEN GROWTH PROPERTIES – NET LEASE

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SECTION 23.

SUBSTITUTION

SPACE

  

Intentionally Deleted.

SECTION 24.

MISCELLANEOUS

  

24. (a) Landlord Transfer. Landlord may transfer, in whole or in part, the
Building and any of its rights under this Lease. If Landlord assigns its rights
under this Lease and the assignee assumes all of Landlord’s liabilities under
the Lease and arising following such transfer, including, without limitation,
the obligations arising in connection with the Security Deposit, then Landlord
shall thereby be released from any obligations under this Lease following such
transfer.

 

(b) Landlord’s Liability. The liability of Landlord to Tenant for any default by
Landlord under the terms of this Lease shall be limited to Tenant’s actual
direct, but not special, incidental, or consequential, damages therefore, and
shall only be recoverable from the interest of Landlord in the Building and the
Land, and Landlord shall not be personally liable for any deficiency.

 

(c) Force Majeure. Other than for Tenant’s monetary obligations under this Lease
and obligations which can be cured by the payment of money (e.g., maintaining
insurance), whenever a period of time is herein prescribed for action to be
taken by either party hereto, such party shall not be liable or responsible for,
and there shall be excluded from the computation for any such period of time,
any delays due to strikes, riots, acts of God, shortages of labor or materials,
war, governmental laws, regulations, delay or restrictions, or any other causes
of any kind whatsoever which are beyond the control of such party.

 

(d) Brokers. Landlord and Tenant each warrant to the other that it has not dealt
with any broker or agent in connection with the negotiation or execution of this
Lease, except for Tenant’s Broker, as may be shown in the Basic Lease
Information. Tenant’s Broker shall be paid by the party named next to the name
of the Broker as shown in the Basic Lease Information. Except as specifically
set forth in this subsection (d), Tenant and Landlord shall each indemnify the
other against all costs, expenses, attorneys’ fees, and other liability for
commissions or other compensation claimed by any broker or agent claiming the
same by, through, or under the indemnifying party.

 

(e) Estoppel Certificates and Financial Information. From time to time, Tenant
shall furnish to any party designated by Landlord, within ten (10) days after
Landlord has made a request therefore, a certificate signed by Tenant confirming
and containing such factual certifications and representations as to this Lease
as Landlord or Landlord’s Mortgagee may reasonably request.

 

(f) Notices. All notices and other communications given pursuant to this Lease
shall be in writing and shall be (1) mailed by first class, United States Mail,
postage prepaid, certified, with return receipt requested, and addressed to the
parties hereto at the address specified in the Basic Lease Information, (2) hand
delivered or delivered by overnight delivery service to the intended address or
(3) delivered by facsimile copy transmission. Notice sent by certified mail,
postage prepaid, shall be effective three (3) business days after being
deposited in the United States Mail; all other notices shall be effective upon
delivery to the address of the addressee. The parties hereto may change their
addresses by giving notice thereof to the other in conformity with this
provision.

 

(g) Severability. If any clause or provision of this Lease is illegal, invalid,
or unenforceable under present or future laws, then the remainder of this Lease
shall not be affected thereby and in lieu of such clause or provision, there
shall be added as a part of this Lease a clause or provision as similar in terms
to such illegal, invalid, or unenforceable clause or provision as may be
possible and be legal, valid, and enforceable.

 

ASPEN GROWTH PROPERTIES – NET LEASE

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(h) Amendments: and Binding Effect. This Lease may not be amended except by
instrument in writing signed by Landlord and Tenant. No provision of this Lease
shall be deemed to have been waived by Landlord or Tenant unless such waiver is
in writing signed by such party, and no custom or practice which may evolve
between the parties in the administration of the terms hereof shall waive or
diminish the right of Landlord or Tenant to insist upon the performance by the
other party in strict accordance with the terms hereof. The terms and conditions
contained in this Lease shall inure to the benefit of and be binding upon the
parties hereto, and upon their respective successors in interest and legal
representatives, except as otherwise herein expressly provided. This Lease is
for the sole benefit of Landlord and Tenant, and, other than Landlord’s
Mortgagee, no third party shall be deemed a third party beneficiary hereof.

 

(i) Quiet Enjoyment. So long as there is no uncured Event of Default, Tenant
shall peaceably and quietly hold and enjoy the Premises for the Term, without
hindrance from Landlord or any party claiming by, through, or under Landlord,
subject to the terms and conditions of this Lease.

 

(j) Joint and Several Liability. If there is more than one Tenant, then the
obligations hereunder imposed upon Tenant shall be joint and several. If there
is a guarantor of Tenant’s obligations hereunder, then the obligations hereunder
imposed upon Tenant shall be the joint and several obligations of Tenant and
such guarantor, and Landlord need not first proceed against Tenant before
proceeding against such guarantor nor shall any such guarantor be released from
its guaranty for any reason whatsoever.

 

(k) Captions. The captions contained in this Lease are for conveniences of
reference only, and do not limit or enlarge the terms and conditions of this
Lease.

 

(l) No Merger. There shall be no merger of the leasehold estate hereby created
with the fee estate in the Premises or any part thereof if the same person
acquires or holds, directly or indirectly, this Lease or any interest in this
Lease and the fee estate in the leasehold Premises or any interest in such
estate.

 

(m) No Offer. The submission of this Lease to Tenant shall not be construed as
an offer, nor shall either party have any right under this Lease unless mutual
execution of this Lease by Landlord and Tenant. Neither the prospective Landlord
nor the prospective Tenant shall have any obligation to negotiate the terms of a
possible lease and may withdraw from negotiations at any time for any reason or
for no reason, without liability to the other party.

 

(n) Exhibits. All exhibits and attachments hereto are incorporated herein by
this reference.

 

Exhibit A

  

- Outline of Premises

Exhibit B

  

- Building Rules and Regulation

Exhibit C

  

- Basic Costs

Exhibit D

  

- Tenant Finish-Work

Exhibit E

  

- Parking

Exhibit F

  

- Commencement Date Memorandum

Exhibit G

  

- Right of First Offer

Exhibit H

  

- Expansion Option

Exhibit I

  

- Signage, Roof Rights, and Backup Generator

 

  

(o) Entire Agreement. This Lease constitutes the entire agreement between
Landlord and Tenant regarding the subject matter hereof and supersedes all oral
statements and prior writings relating thereto. Except for those set forth in
this Lease, no representations, warranties, or agreements have been made by
Landlord or Tenant to the other with respect to this Lease or the obligations of
Landlord or Tenant in connection therewith.

 

ASPEN GROWTH PROPERTIES – NET LEASE

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(p) Dates of Performance. In the event that any date for performance by either
party of any obligation hereunder required to be performed by such party falls
on a Saturday, Sunday, nationally established holiday or state established
holiday in the state where the Premises are located, the time for performance of
such obligation shall be deemed extended until the next business day following
such date.

 

(q) Non-Disclosure. Landlord and Tenant agree that the terms of this Lease are
confidential and constitute proprietary information of the parties hereto. Each
of the parties hereto agrees that such party, and its respective partners,
officers, directors, and attorneys, shall not disclose (including by press
release, internet article, or other such publicity of any kind to the public or
press) the terms and conditions of this Lease to any other person without the
prior written consent of the other party hereto except pursuant to an order of a
court of competent jurisdiction; provided, however, that either party may
disclose the terms hereof to its lenders or prospective lenders or its
respective accountants who audit its respective financial statements or prepare
its respective tax returns, to any prospective transferee of all or any portions
of their respective interests hereunder (including a prospective assignee or
subtenant of Tenant), to any governmental entity, agency or person to whom
disclosure is required by applicable law, regulation or duty of diligent inquiry
and in connection with any action brought to enforce the terms of this Lease, on
account of the breach or alleged breach hereof or to seek a judicial
determination of the rights or obligations of the parties hereunder. Landlord
and Tenant shall jointly agree to the terms of a press release pertaining to
Tenant’s job fair to be held on August 24, 2008.

 

(r) Time of the Essence. Time is of the essence in this Lease and each and every
term, condition and provision hereof.

 

(s) Waiver of Jury Trial. The parties hereto desire and intend that any disputes
arising between them with respect to or in connection with this Lease be subject
to expeditious resolution in a court trial without a jury. Therefore, the
parties hereto each hereby waive the right to trial by jury of any cause of
action, claim, counterclaim or cross-complaint in any action, proceeding or
other hearing brought by any of the parties hereto against any other of the
parties hereto on any matter whatsoever arising out of or in any way connected
with this Lease or the matters contemplated thereby or any claim of injury or
damage or the enforcement of any remedy under any law, statute or regulation,
emergency or otherwise, now or hereafter in effect.

 

(t) Attorney’s Fees. In the event either party files suit or is required to
appear before a court of competent jurisdiction, to enforce any rights such
party may have under the Lease, to request a court to interpret any provisions
of this Lease, or to seek a declaration of such party’s rights under this Lease
or the existence of a violation or default under this Lease, the party
prevailing in such action (the “Prevailing Party”) shall be entitled, in
addition to any remedy or damages awarded to the Prevailing Party, the
Prevailing Party’s costs of court, out of pocket expenses, and attorneys’ fees.
Attorneys’ fees shall include attorneys’ fees on any appeal, bankruptcy matters,
costs of collection, and in addition a party entitled to attorneys’ fees shall
be entitled to all other reasonable costs for investigating such action, taking
depositions and the discovery, travel, expert’s fees, and all other necessary
costs incurred in such litigation. The term prevailing party as used herein
shall mean the party who obtains substantially the relief sought.

SECTION 25.

HAZARDOUS

SUBSTANCES

  

25. 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

 

ASPEN GROWTH PROPERTIES – NET LEASE

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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; (b). the Premises will not be used in
any manner for the storage of any Hazardous Substances except for any temporary
storage of incidental amounts 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; (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; (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; (f). Tenant will not permit any Hazardous Substances to be
brought onto the Premises, except for the Permitted Materials, and if any
Hazardous Substances other than Permitted Materials are 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; and (g). Tenant shall remove all Permitted Materials
from the Premises in a manner acceptable to Landlord before Tenant’s right to
possess the Premises is terminated. If at any time during or after the Term, the
Premises are found to be so contaminated or subject to such conditions due to
Tenant’s actions, 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, including Landlord’s reasonable legal fees and costs incurred, except
for any conditions or contamination caused by Landlord. The foregoing indemnity
shall survive termination or expiration of this Lease. Unless expressly
identified on an addendum to this Lease and except for ordinary office and
cleaning products used in accordance with all Environmental Laws, as of the date
hereof there are no “Permitted Activities” or “Permitted Materials” for purposes
of the foregoing provision and none shall exist unless and until approved in
writing by the Landlord. Landlord may enter the Premises and conduct
environmental inspections and tests therein as it may reasonably 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 those placed in the Premises by
Landlord) 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 days after Landlord’s request therefore.

SECTION 26.

BUILDING

AMENITIES

  

26. Building Amenities. The Building’s amenities shall include, but not be
limited to, the full service deli and the fitness center with locker room
facilities with showers. In the event the full service deli serving the Building
and Project closes, Landlord will use reasonable efforts to find another Tenant
providing food services of comparable quality in the Building and Project.

DATED as of the date first written above.

LANDLORD: River Place Corporate Park, LP

                  a Texas limited partnership

 

ASPEN GROWTH PROPERTIES – NET LEASE

         18   

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by: ASPEN GROWTH PROPERTIES, INC., its General Partner

 

By:

 

                /s/ Mark McAllister

 

Name:

 

Mark McAllister

 

Its:

 

President

TENANT:

   

Shoretel, Inc.

 

By:

 

                /s/ John W. Combs

 

Name:

 

                John W. Combs

 

Its:

 

                CEO

 

ASPEN GROWTH PROPERTIES – NET LEASE

         19   

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EXHIBIT A

OUTLINE OF PREMISES

LOGO [g145814g23g50.jpg]

 

ASPEN GROWTH PROPERTIES – NET LEASE

           

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EXHIBIT B

BUILDING RULES AND REGULATIONS

The following rules and regulations shall apply to the Premises, the Building,
the Project, the parking area associated therewith, the land and the
appurtenances thereto:

 

1.

Sidewalks, doorways, vestibules, halls, stairways, and other similar areas shall
not be obstructed by tenants or used by any tenant for purposes other than
ingress and egress to and from their respective leased premises and for going
from one to another part of the Building.

 

2.

Plumbing, fixtures and appliances shall be used only for the purposes for which
designed, and no sweepings, rubbish, rags or other unsuitable material shall be
thrown or deposited therein. Damage resulting to any such fixtures or appliances
from misuse by a tenant or its agents, employees or invitees, shall be paid by
such tenant.

 

3.

Except as otherwise set forth in this Lease, no signs, advertisements or notices
shall be painted or affixed on or to any windows or doors or other part of the
Building without the prior written consent of Landlord, which consent shall not
be unreasonably conditioned or delayed. No curtains or other window treatments
shall be placed between the glass and the Building standard window treatments.

 

4.

At Landlord’s cost, Landlord shall provide and maintain an alphabetical
directory for all tenants in the main lobby of the Building, and shall provide
for the placement of Tenant’s name on the main entrance to the Premises. Tenant
shall not erect any signs, plaques or names other than as provided for by
Landlord.

 

5.

Landlord shall provide all door locks in each tenant’s leased premises, at the
cost of such tenant, and no tenant shall place any additional door locks in its
leased premises without Landlord’s prior written consent. Landlord shall furnish
to each tenant a reasonable number of keys to such tenant’s leased premises, at
such tenant’s cost, and no tenant shall make a duplicate thereof. Tenant has the
right to install a card key system that is acceptable to Landlord.

 

6.

Movement in or out of the Building of furniture or office equipment, or dispatch
or receipt by tenants of any bulky material, merchandise or materials which
require use of elevators or stairways, or movement through the Building
entrances or lobby shall be conducted under Landlord’s supervision at such times
and in such a manner as Landlord may reasonably require. Each tenant assumes all
risks of and shall be liable for all damage to articles moved and injury to
persons or public engaged or not engaged in such movement, including equipment,
property and personnel of Landlord if damaged or injured as a result of acts in
connection with carrying out this service for such tenant.

 

7.

Landlord may prescribe weight limitations and determine the locations for safes,
filing cabinets, and other heavy equipment or items, which shall in all cases be
placed in the Building so as to distribute weight in a manner acceptable to
Landlord which may include the use of such supporting devices as Landlord may
require. All damages to the Building caused by the installation or removal of
any property of a tenant, or done by a tenant’s property while in the Building,
shall be repaired at the expense of such tenant.

 

8.

Corridor doors, when not in use, shall be kept closed. Nothing shall be swept or
thrown into the corridors, halls, elevator shafts or stairways. Except for use
by a handicapped or special needs individual, no birds or animals shall be
brought into or kept in, on or about any tenant’s leased premises. No portion of
any tenant’s leased premises shall at any time be used or occupied as sleeping
or lodging quarters.

 

9.

Tenant shall cooperate with Landlord’s employees in keeping its leased premises
neat and clean. Tenants shall not employ any person for the purpose of such
cleaning other than the Building’s cleaning and maintenance personnel.

 

10.

Except as set forth in this Lease, to ensure orderly operation of the Building,
no ice, mineral or other water, towels, newspapers, etc. shall be delivered to
any leased area except by persons and to a location approved by Landlord.

 

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         B-1   

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11.

Tenant shall not make or permit any improper, objectionable or unpleasant noises
or odors in the Building or otherwise interfere in any way with other tenants or
persons having business with them.

 

12.

No machinery of any kind (other than normal office equipment) shall be operated
by any tenant on its leased area without Landlord’s prior written consent, nor
shall any tenant use or keep in the Building any flammable or explosive fluid or
substance.

 

13.

Landlord will not be responsible for lost or stolen personal property, money or
jewelry from tenant’s leased premises or public or common areas regardless of
whether such loss occurs when the area is locked against entry or not.

 

13.

Except for machines used exclusively by Tenant’s employees, no vending or
dispensing machines of any kind may be maintained in any leased premises without
the prior written permission of Landlord.

 

14.

All mail chutes located in the Building shall be available for use by Landlord
and all tenants of the Building according to the rules of the United States
Postal Service.

 

15.

Tenant shall use reasonable efforts to turn off all lighting and equipment when
Tenant is not using the Premises, except for such equipment that is normally
operated on a full time basis such as fax machines, refrigerators, computer
servers, etcetera.

 

16.

Tenant shall not prepare any foodstuffs or operate any food equipment or stoves
other than is typical in an office kitchenette such as coffee machines,
microwave oven, and the like. In no event shall any cooking equipment having an
open flame be operated in the Premises.

 

17.

Tenant shall not use any electronic equipment that causes any electronic
interference with standard office equipment used by Landlord or any other
tenant. Tenant shall not install any electronic equipment such as antennas,
reception dishes, telephone, microwave or other similar transmission dishes, or
their progeny, outside of the Premises or on the sides or top of the Building.

These rules may be amended or supplemented as reasonably determined by Landlord
and as long as such amendment or supplement is equally applied to all similarly
situated tenants in the Building and in the Project.

[end of Exhibit B]

 

ASPEN GROWTH PROPERTIES – NET LEASE

         B-2   

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EXHIBIT C

BASIC COSTS

The term “Basic Cost” shall mean all expenses and disbursements of every kind
(subject to the limitations set forth below) which Landlord incurs, pays or
becomes obligated to pay in connection with the ownership, operation, and
maintenance of (i) the Building, (ii) the parking structure appurtenant to the
Building and all parking areas servicing the Building, and (iii) all common
areas owned by Landlord that are appurtenant to the Building (collectively
“Improvements”), determined in accordance with generally accepted accounting
principles consistently applied, including but not limited to the following:

 

1.

To the extent directly attributable to the Building, wages and salaries
(including management fees or fees paid to an independent management company) of
all employees engaged in the operation, repair, replacement, maintenance, and
security of the Improvements, including taxes, insurance and benefits relating
thereto;

 

2.

All supplies and materials used in the operation, maintenance, repair,
replacement, and security of the Improvements;

 

3.

Annual cost of all capital improvements made to the Improvements which although
capital in nature can reasonably be expected to reduce the normal operating
costs of the Improvements, as well as all capital improvements made in order to
comply with any law hereafter promulgated by any governmental authority, as
amortized over the useful economic life of such improvements as determined by
Landlord in its reasonable discretion (without regard to the period over which
such improvements may be depreciated or amortized for federal income tax
purposes);

 

4.

Actual cost of all utilities for the Improvements, other than the cost of
utilities actually reimbursed to Landlord by the Building’s tenants (including
Tenant under Section 7.(b) of this Lease);

 

5.

Actual cost of any insurance or insurance related expense applicable to the
Improvements and Landlord’s personal property used in connection therewith;

 

6.

Actual cost of repairs, replacements, and general maintenance of the
Improvements; and

 

7.

Cost of service or maintenance contracts with independent contractors for the
operation, maintenance, repair, replacement, or security of the Improvements
(including, without limitation, alarm service, window cleaning, and elevator
maintenance).

 

8.

Cost of providing maintenance, utilities and cleaning services to any tenant
premises to the extent same are not separately reimbursed by any such tenant and
to the further extent the recipient tenant thereof is paying its pro-rata share
of Basic Costs.

 

9.

The Building’s Proportionate Share of Taxes (described below).

 

10.

The Building’s Proportionate Share of all expenses and disbursements of every
kind (subject to the limitations set forth below), and not accounted for as part
of the definition of Basic Cost pursuant to 1. through 8. above, which Landlord
incurs, pays or becomes obligated to pay in connection with the ownership,
operation and maintenance of the common areas of the Project (including the
associated parking facilities to the extent not already accounted for, driveways
and landscaped areas), determined in accordance with generally accepted
accounting principles consistently applied, including but not limited to the
following:

 

 

a.

Annual cost of all capital improvements made to the common areas which although
capital in nature can reasonably be expected to reduce the normal operating
costs of the Project, as well as all capital improvements made in order to
comply with any law hereafter promulgated by any governmental authority, as
amortized over the useful economic life of such improvements as determined by
Landlord in its reasonable discretion (without regard to the period over which
such improvements may be depreciated or amortized for federal income tax
purposes);

 

ASPEN GROWTH PROPERTIES – NET LEASE

         C-1   

--------------------------------------------------------------------------------

 

b.

Cost of all utilities for the common areas of the Project (including, without
limitation, landscape irrigation and parking lot lighting), other than the costs
of utilities actually reimbursed to Landlord by the tenants of the Project;

 

 

c.

Cost of any insurance or insurance related expense applicable to the common
areas of the Project and Landlord’s personal property used in connection
therewith;

 

 

d.

Cost of repairs, replacements and general maintenance of the common areas of the
Project; and

 

 

e.

Cost of service or maintenance contracts with independent contractors for the
operation, maintenance, repair and replacement of the common area improvements.

As used herein the term “Taxes” shall mean all taxes and assessments and
governmental charges whether federal, state, county or municipal and whether
they be by taxing or management districts or authorities presently taxing or by
others, subsequently created or otherwise, and any other taxes and assessments
attributable to the Project (or its operation), including the buildings and the
grounds, parking areas, driveways and alleys around the buildings, excluding,
however, (A) any interest or penalties; (B) any capital levy, estate,
succession, inheritance, transfer, sales, use or franchise taxes, or any income,
profits, or revenue tax, assessment or charge imposed upon the rent received as
such by Landlord under this Lease.

Notwithstanding subsection (B) of the previous paragraph, the tax imposed
pursuant to the 2006 amendments to the Texas Tax Code, Chapter 171, and all
subsequent legislation altering, amending, or modifying such amendments,
pertaining to certain franchise, margin, revenue, or income taxes, imposed on
any entity pursuant to such legislation, and any assessments or charges or part
thereof so based, shall be deemed to be included within the term “Taxes” and
shall not be excluded by subsection (B) of the previous paragraph. If at any
time during the Term of this Lease the present method of taxation shall be
further changed by the taxing authorities, so that the whole or any part of the
taxes, assessments or governmental charges shall be discontinued or reduced, and
that as a substitute thereof or in lieu of or in addition thereto taxes,
assessments and governmental charges shall be levied, assessed, or imposed,
wholly or partially, on (or shall be calculated with reference to rents received
from the Project or rents reserved herein or the income of Landlord received
directly from the Project), then such substituted, additional or increased
taxes, assessments and governmental charges, to the extent so levied, assessed
or imposed, shall be deemed to be included within the definition of Taxes.
Notwithstanding anything to the contrary in this Exhibit C or elsewhere in this
Lease, the tax, if any, imposed pursuant to Texas Tax Code, Chapter 171, as it
may be amended, and any substituted tax set forth in the preceding sentence,
shall be calculated, throughout the term of this Lease, including any
extensions, as if the Project is the sole asset of any nature owned by Landlord.

There are specifically excluded from the definition of the term “Basic Cost”:

 

(i)

costs for capital improvements made to the Building or Project, other than
capital improvements described in subparagraphs 3. and 10. above of this
Exhibit, and except for items which, though capital for accounting purposes, are
properly considered maintenance and repair items, such as painting of common
areas, replacement of carpet in elevator lobbies, and the like;

(ii)

executives’ salaries above the grade of building manager;

(iii)

costs for repair, replacements and general maintenance paid by proceeds of
insurance or by Tenant or other third parties, and alterations attributable
solely to tenants of the Building other than Tenant; for interest, amortization
or other payments on loans to Landlord;

(iv)

depreciation of the Improvements;

(v)

leasing commissions;

(vi)

legal expenses, other than those incurred for the general benefit of the
Building’s tenants (e.g., real estate tax disputes);

(vii)

repairs or replacements incurred by reason of fire or other casualty or
condemnation to the extent Landlord is compensated therefore;

(viii)

renovating or otherwise improving space for occupants of the Building or
non-Common Area vacant space in the Building;

 

ASPEN GROWTH PROPERTIES – NET LEASE

         C-2   

--------------------------------------------------------------------------------

(ix)

expenses of Landlord in curing defaults or performing work expressly provided in
this Lease to be borne at Landlord’s expense;

(x)

federal income taxes imposed on or measured by the income of Landlord from the
operation of the Improvements;

(xi)

debt service, refinancing costs and mortgage interest and amortization payments;

(xii)

expenses incurred by Landlord to resolve disputes, enforce or negotiate lease
terms with prospective or existing tenants or in connection with any financing,
sale or syndication of the Improvements; and

(xiii)

Landlord’s general corporate overhead and administrative expenses except if it
is solely for the Improvements.

[end of Exhibit C]

 

ASPEN GROWTH PROPERTIES – NET LEASE

         C-3   

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EXHIBIT D

TENANT FINISH-WORK

(ALTERNATE FORM IF TENANT OBTAINS A TI ALLOWANCE)

1.         Tenant Improvement Allowance. Landlord shall provide Tenant an
allowance for tenant improvements to the Premises in an amount not to exceed the
LESSER OF (i) the tenant improvement allowance specified in the Basic Lease
Information, or (ii) the total cost of construction of the tenant improvements.

2.         Plans and Drawings. On or before July 1, 2008 (the “Space Plan
Deadline”), Tenant shall submit to Landlord, Tenant’s approved space plan for
the Premises (the “Space Plan”). On or before August 1, 2008 (the “Working
Drawing Deadline”), which date shall be extended by one (1) day for each day of
Tenant’s Delay (defined below), Landlord shall deliver to Tenant for Tenant’s
approval working drawings consisting of a floor plan, reflected ceiling plan,
interior elevations, electrical plan, door schedule and finish schedule for the
Premises (the “Working Drawings”), which Working Drawings shall be consistent
with the Space Plan. Tenant shall approve or disapprove the Working Drawings
within ten (10) business days after delivery of the Working Drawings to Tenant,
which approval shall not be unreasonably withheld. Tenant shall have the right
to disapprove the Working Drawings only to the extent the Working Drawings are
inconsistent with the Space Plan. If Tenant disapproves the Working Drawings,
Tenant shall return the Working Drawings to Landlord with Tenant’s specific
requested changes noted thereon. Landlord shall promptly revise and resubmit the
Working Drawings to Tenant and Tenant shall approve such revised Working
Drawings within six (6) business days after receipt. Landlord shall be obligated
to revise the Working Drawings only to the extent the Working Drawings are
inconsistent with the Space Plan. The Working Drawings as finally approved by
Tenant are referred to as the “Final Plans”, and the improvements to the
Premises shown in the Final Plans are sometimes referred to herein as the
“Landlord Work”. Landlord shall obtain all permits and approvals, and shall
construct or modify the improvements to the Premises in accordance with the
Final Plans, in a good and workmanlike manner, and charge the Tenant Improvement
Allowance for an amount equal to the costs incurred by Landlord in constructing
the improvements, including, without limitation, Landlord’s actual cost of the
work performed and materials provided, architectural fees, engineering fees,
mechanical costs, structural costs, electrical costs, permit fees, out-of-pocket
expenses, and any increased costs incurred by Landlord as a result of any
changes to the Final Plans requested by Tenant or any Tenant’s Delay
(collectively, “Construction Costs”). Tenant shall pay or reimburse Landlord
within twenty (20) days after Landlord’s request for any Construction Costs in
excess of the Tenant Improvement Allowance incurred by Landlord in constructing
the improvements in accordance with the Final Plans.

Tenant may, in Tenant’s sole discretion, amortize any additional elected Tenant
Improvement Allowance (as used, the “Elected TI”) up to $5.00 per rentable
square foot at 10% interest over the first three (3) calendar years of the Term.
The Tenant Improvement Allowance and Elected TI may be used for any and all
costs associated with the Premises including, but not limited to: building
standard and non-building standard improvements, architectural and engineering
services, permitting, and construction management fees, moving expenses,
security network setup, telephone equipment and installation, signage, furniture
and furniture set up, all cabling costs and consultant fees.

3.         Tenant’s Delay. For purposes hereof, a “Tenant’s Delay” shall include
the following: (i) Tenant’s failure to submit the Space Plan or approve the
Working Drawings within the periods specified in Section 2. above, (ii) Tenant’s
changes to the Space Plan or the Final Plans after Tenant’s initial approval
thereof, (iii) any failure by Tenant to pay Construction Costs in excess of the
Tenant Improvement Allowance, (iv) any work performed by Tenant in the Premises,
or (v) any other material delay to the extent requested or caused by Tenant.

4.         Substantial Completion. The terms “Substantial Completion” or
“Substantially Complete” mean that the Landlord Work has been completed in
accordance with the Final Plans, and the Premises may be legally occupied by
Tenant, even though minor details, adjustments or punch list items that do not
materially interfere with Tenant’s use or occupancy of the Premises for normal
business operations may remain to be completed.

5.         Early Access. Tenant shall have access to the Premises (coordinating
with the contractor) upon execution of this Lease provided that Tenant does not
interfere with the construction of its improvements, in order to install
cabling, security system, furniture, fixtures and equipment.

--------------------------------------------------------------------------------

EXHIBIT E

PARKING

1.         Landlord shall provide to Tenant at no cost, and so long as there is
no Event of Default, with five (5) parking spaces per one thousand
(1,000) rentable square feet, or the amount of fifty three (53) undesignated
vehicular parking spaces (including visitor and handicap) for the Premises, as
contracted or expanded, if applicable, in the unreserved parking area associated
with the Building during the Term, as extended, if applicable, subject to such
terms, conditions and regulations as are from time to time applicable to patrons
of the Parking Facilities.

In addition, Landlord shall furnish to Tenant zero (0) reserved parking spaces
in the covered parking garage.

2.         Tenant shall at all times comply with all Laws respecting the use of
the Parking Facilities. Landlord reserves the right to adopt, modify, and
enforce reasonable rules and regulations governing the use of the Parking
Facilities or the Property, from time to time, including any key-card, sticker,
or other identification or entrance systems and hours of operations. Landlord
may refuse to permit any person who violates such rules and regulations to park
in the Parking Facilities, and any violation of the rules and regulations shall
subject the automobile in question to removal from the Parking Facilities.

3.         Unless specified to the contrary above, the parking spaces shall be
provided on an unreserved, “first-come, first-served” basis. Tenant acknowledges
that Landlord has arranged or may arrange for the Parking Facilities to be
operated by an independent contractor, un-affiliated with Landlord. In such
event, Tenant acknowledges that Landlord shall have no liability for claims
arising through acts or omissions of such independent contractor. Landlord shall
have no liability whatsoever for any damage to vehicles or any other items
located in or about the Parking Facilities, and in all events, Tenant agrees to
seek recovery from its insurance carrier and to require Tenant’s employees to
seek recovery from their respective insurance carriers for payment of any
property damage sustained in connection with any use of the Parking Facilities.

4.         No portion of the parking areas may be used for any purpose other
than the temporary parking of street-legal automobiles, except that no oversize
vehicles, trailers or campers may be parked. There shall be no vehicular
maintenance, washing, cleaning, detailing, or similar activities performed in
the parking area. All vehicles shall be parked within the lines of a parking
space and all vehicles shall obey all directional and restrictive signs placed
in the parking areas.

5.         Landlord has the right to impose parking fees or parking restrictions
(i.e., car pool parking limitations) if any governmental authority requires
same. In the event parking fees are imposed as allowed herein, Tenant may offer
parking validation in a form determined by Landlord. If parking fees are
imposed, the payee of such fees shall pay to Landlord all state taxes assessed
against such parking fees pursuant to Title 2. of the Texas Tax Code. Landlord
reserves the right to assign specific parking spaces, and to reserve parking
spaces for visitors, small cars, handicapped persons and for other tenants,
guests of tenants or other parties, with assigned and/or reserved spaces. Such
reserved spaces may be relocated as determined by Landlord from time to time,
and Tenant and persons designated by Tenant hereunder shall not park in any such
assigned or reserved parking spaces. Landlord also reserves the right to close
all or any portion of the Parking Facilities, at its discretion or if required
by casualty, strike, condemnation, repair, alteration, act of God, Laws, or
other reason beyond Landlord’s reasonable control; provided, however, that
except for matters beyond Landlord’s reasonable control, any such closure shall
be temporary in nature.

[end of Exhibit E]

 

ASPEN GROWTH PROPERTIES – NET LEASE

           

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EXHIBIT F

Commencement Date Memorandum

 

Re:

Office Lease dated ______________, 2008 (the “Lease”) between
____________________, L.P. (“Landlord”) and
__________________________________________(“Tenant”) for the Premises described
below. Unless otherwise specified, all capitalized terms used herein shall have
the same meanings as in the Lease.

Landlord and Tenant agree that:

The Premises subject to the Lease are
__________________________________________________________________________.

The rentable square feet are ______________.

Tenant has accepted possession of the Premises. The Premises are usable by
Tenant as intended, and Tenant acknowledges that both the Building and the
Premises are satisfactory in all respects.

The Commencement Date of the Lease is ___________________.

The Expiration Date of the Lease is the last day of __________________.

Tenant’s Address at the Premises after the Commencement Date is:

name:    _____________________________________________

attention:    ______________________________

street:    _____________________________________

city/state/zip:    ________________________

telephone: (512)    ______________________

The terms and conditions of the Lease constitute the complete final agreement of
Landlord and Tenant and are ratified and acknowledged to be unchanged and in
full force and effect.

EXECUTED as of ________________, 2008.

 

LANDLORD: River Place Corporate Park, LP

a Texas limited partnership

        by:

 

ASPEN GROWTH PROPERTIES,
INC., its General Partner

 

        By:

   

        Name:

 

Mark McAllister

        Its:

 

President

 

TENANT: Shoretel, Inc.

        By:

   

        Name:

   

        Its:

   

 

ASPEN GROWTH PROPERTIES – NET LEASE

           

--------------------------------------------------------------------------------

EXHIBIT G

OPTION TO EXTEND

[ADDENDUM TO LEASE – OPTION TO EXTEND THE TERM]

Provided no Event of Default exists beyond any applicable cure periods at the
time of such election, Tenant may renew the Lease for one (1) additional period
of three (3) years on the same terms provided in the Lease (except as set forth
below), by delivering written notice of the exercise thereof to Landlord not
later than two hundred seventy (270) days and not before three hundred sixty
(360) days prior to the expiration of the primary Term or an extended Term as
the Term may have been extended by the previous exercise of Tenant’s option to
extend the Term. Any notices given prior to said 360 day period or following
said 270 day period shall be void and without force and effect. No later than
thirty (30) days following the date Tenant has provided written notice of the
exercise of its option to extend the Term, Landlord and Tenant shall execute an
amendment to this Lease extending the Term on the same terms provided in this
Lease, except as follows:

1.         Base Rent for the Premises (on a per square foot basis) in effect at
the expiration of the then current term of the Lease shall be increased or
decreased to reflect the current fair market rental for comparable space in the
Building and in other similar buildings in the Northwest Austin Class A rental
market as of the date the renewal term is to commence, taking into account the
specific provisions of the Lease which will remain constant, the location and
quality of the Building, all concessions which are being offered to renewal
tenants, the creditworthiness of Tenant, the size and location of the space and
any annual increases to Base Rent renewal period (collectively, the “Market
Rate”). Upon receiving notice of Tenant’s intent to extend the Term of the
Lease, Landlord shall promptly notify Tenant in writing of its determination of
the Market Rate, which shall be no later than ten (10) business days after
receipt of Tenant’s written request therefor.

2.         If within fifteen (15) days following Tenant’s notice to Landlord,
Tenant and Landlord are unable to agree on a mutually acceptable Market Rate,
then Tenant shall have the option within five (5) days following the end of such
fifteen (15) day period to (1) revoke its election to extend the term of this
Lease, or (2) to request binding arbitration. In the event that Tenant shall
revoke its notice to extend the term of this Lease, the Lease shall expire per
its terms. In the event that Tenant shall elect the binding arbitration, then
Landlord and Tenant shall, within ten (10) days thereafter, each designate a
qualified real estate professional with a minimum of ten (10) years binding
arbitration experience in office lease market rental arbitration. The two
(2) such appointees shall within five (5) days thereafter, designate a third
real estate professional having substantially similar qualifications and the
parties shall submit to binding arbitration within thirty (30) days thereafter.

3.         Tenant reserves the right to revoke its exercise of the renewal
option within five (5) days of Landlord’s determination of the Market Rate for
such renewal term, in which case the Lease shall expire per its terms.

4.         Except as specifically set forth above, Tenant shall have no further
renewal options unless expressly granted by Landlord in writing;

5.         Landlord shall lease to Tenant and Tenant shall accept the Premises
“As-Is” and in its then-current condition;

6.         Upon the extension of the Term pursuant to this Addendum to Lease,
the term “Lease Term” or “Term” as used in this Lease shall thereafter include
the extended Term and the expiration date of the Lease shall be the expiration
date of the extended Term; and

7.         Tenant’s rights under this Addendum shall terminate if (a) this Lease
or Tenant’s right to possession of the Premises is terminated or (b) Tenant
fails to timely exercise its option under this Exhibit, time being of the
essence with respect to Tenant’s exercise thereof.

 

           

--------------------------------------------------------------------------------

LANDLORD: River Place Corporate Park, LP

                        a Texas limited partnership

        by:

 

ASPEN GROWTH PROPERTIES,
INC., its General Partner

 

        By:

   

        Name:

 

Mark McAllister

        Its:

 

President

 

TENANT: Shoretel, Inc.

        By:

   

        Name:

   

        Its:

   

 

         2   

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EXHIBIT H

RIGHT OF FIRST OFFER

A. Right of First Offer. Prior to leasing all or any part of the space commonly
known as Suites 201 and 203 (consisting of approximately 4,070 and 12,984 square
feet of net rentable area, as applicable, and hereinafter referred to as the
“Reserved Area”), Landlord shall provide Tenant with written notice (the “New
Availability Notice”) of the portion of the Reserved Area which Landlord is
willing to lease (the “New Expansion Area”) and the Base Rent and other lease
terms for which Landlord is willing to lease the New Expansion Area. If Tenant,
within ten (10) business days after receipt of the New Availability Notice
indicates in writing its agreement to lease the New Expansion Area on the terms
and conditions set forth in the New Availability Notice, the New Expansion Area
shall be included within the Premises and leased to Tenant pursuant to the terms
and conditions of the New Availability Notice and otherwise on the terms and
conditions of the Lease; provided, however, that (i) the Base Rent for the New
Expansion Area shall be as set forth in the New Availability Notice,
(ii) Tenant’s Share of Operating Expenses shall be adjusted to reflect the
addition of the New Expansion Area, (iii) any Tenant Construction Allowance
shall be as set forth in the New Availability Notice, and (iv) the Expiration
Date for the New Expansion Area shall be the Expiration Date set forth in the
Lease, which shall include any additional terms, if any. If Tenant does not
indicate, within such ten (10) business days after receipt of the New
Availability Notice, its agreement to lease the New Expansion Area, Landlord
thereafter shall have the right to lease the New Expansion Area to any third
party upon the same terms that were offered to Tenant in the New Availability
Notice. The right of first offer set forth herein is available to Tenant on a
continual basis until the Expiration Date.

B. Preparation and Execution of Amendment to Lease. If Tenant exercises its
rights to lease the additional space as set forth above, Landlord shall
immediately prepare, and the parties shall thereafter execute an amendment to
the Lease stating the addition of the Reserved Area or New Expansion Area to the
Premises and incorporating the terms and conditions as set forth, respectively,
in A. above or in the New Availability Notice. If Tenant does not indicate,
within fifteen (15) days after receipt of the New Availability Notice, its
agreement to lease the New Expansion Area, Landlord thereafter shall have the
right to lease the New Expansion Area to any third party. The right of first
offer set forth herein is available to Tenant on a continual basis until the
Expiration Date (but not any extensions or renewals thereof).

C. Right of First Offer Personal to Tenant. Tenant’s rights specified in this
Exhibit H are personal to the named Tenant set forth in the signature page of
this Lease or an Affiliate and may not be assigned to or exercised by any other
person or entity. Tenant’s right to exercise its right of first offer is subject
to no breach or default by Tenant occurring under this Lease and continuing
beyond any applicable notice and cure period, and Landlord’s review and
reasonable approval of Tenant’s current financials upon Tenant’s exercise of its
right of first offer. If Tenant fails to timely exercise its rights under this
Exhibit G in accordance with the terms and conditions set forth herein,
including strict adherence to all time requirements set forth above, such rights
shall be of no further force or effect.

 

         3   

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EXHIBIT I

EXPANSION OPTION

A. Expansion Option. Prior to leasing all or any part of the space commonly
known as Suite 205 (consisting of approximately 3,048 square feet of net
rentable area, and hereinafter referred to as the “Expansion Option Reserved
Area”), Tenant shall have an option to expand into Suite 205 by providing
Landlord notice of Tenant’s intent to exercise said option on or before
January 1, 2010.

The Base Rent rate for the Expansion Option Reserved Area shall be the same
rental rate as Tenant is paying on the initial Premises at the time of the
commencement of the expansion and the expiration date for the Expansion Option
Reserved Area shall be coterminous with the initial Premises. Landlord shall
provide a tenant improvement allowance in the amount of $6.75 per square foot
for the Expansion Option Reserved Area. The commencement date shall be upon
substantial completion of the tenant improvements, which is estimated to be
June 1, 2010, but shall occur on or before November 1, 2010.

B. Preparation and Execution of Amendment to Lease. If Tenant exercises its
rights to lease the Expansion Option Reserved Area, Landlord shall immediately
prepare, and the parties shall thereafter execute an amendment to the Lease
stating the addition of the Expansion Option Reserved Area to the Premises and
incorporating the terms and conditions as set forth, respectively, in Section A.
above.

C. Right of First Offer Personal to Tenant. Tenant’s rights specified in this
Exhibit I are personal to the named Tenant set forth in the signature page of
this Lease or an Affiliate and may not be assigned to or exercised by any other
person or entity. Tenant’s right to exercise this expansion option is subject to
no breach or default by Tenant occurring under this Lease and continuing beyond
any applicable notice and cure period and Landlord’s review and reasonable
approval of Tenant’s current financials upon Tenant’s exercise of this expansion
option. If Tenant fails to timely exercise its rights under this Exhibit H in
accordance with the terms and conditions set forth herein, including strict
adherence to all time requirements set forth above, such rights shall be of no
further force or effect.

LOGO [g145814g58w77.jpg]

 

         4   

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EXHIBIT J

SIGNAGE, ROOF RIGHTS, BACKUP GENERATORS AND DELIVERY TO PREMISES

1.         Tenant shall be entitled to (i) one (1) sign on each of the entrance
doors (collectively, the “Door Sign”) to the Premises and (ii) one (1) band
(“Tenant’s Band Sign”) on the Building monument sign at a mutually agreeable
location. All costs associated with (i) placing the lettering of the Door Sign
on the entrance to the Premises and (ii) the fabrication, installation,
permitting and maintaining of Tenant’s Band Sign shall be the responsibility of
Tenant and may be part of the Tenant Improvement Allowance. The location, size
and design of the Door Sign and Tenant’s Band Sign must be approved by Landlord
in its reasonable discretion, not to be unreasonably withheld, conditioned or
delayed prior to installation.

2.         Landlord shall approve the installation of Tenant’s HVAC,
telecommunications and satellite equipment in a mutually acceptable location on
the roof of the Building. Prior to installation, Landlord shall consent to the
equipment and location of such equipment, such consent not to be unreasonably
withheld or delayed. Tenant shall require periodic roof access to inspect and
service its equipment on the roof with one (1) business day prior written notice
to Landlord and escorted by property management.

3.         Tenant shall require one or more UPS/Backup Generators on the
property and shall provide specification as to such generators to Landlord prior
to execution of this Lease. The exact location of such generators, as more
particularly described on Exhibit J attached hereto and incorporated herein, and
the screening of such generators shall be reasonably approved by Landlord prior
to installation thereof. The cost of such installation and screening shall be
paid by Tenant.

4.         Tenant shall be allowed to have sodas, water and other snack related
items for the snack area in the Premises delivered to the Premises during
business hours.

 

         5   

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EXHIBIT K

LOCATION OF BACKUP GENERATORS

 

         6   

--------------------------------------------------------------------------------

FIRST AMENDMENT TO LEASE AGREEMENT

THIS FIRST AMENDMENT TO LEASE AGREEMENT (this “Amendment”) is made and entered
into as of the 16th day of September, 2009 (the “Effective Date”), by and
between MLIC ASSET HOLDINGS LLC, a Delaware limited liability company
(“Landlord”), and SHORETEL, INC., a Delaware corporation (“Tenant”).

RECITALS

A.         Landlord or its predecessor in interest and Tenant entered into a
certain Lease Agreement dated as of June 30, 2008 (the “Lease”) demising Suites
200 and 202 consisting of 10,683 rentable square feet (the “Premises”) in the
office building (the “Building”) located on the land commonly known as River
Place Corporate Park, Building IV, Austin, Texas 78730, for a term expiring on
February 29, 2012.

B.         Landlord and Tenant desire to amend the Lease to, among other things,
add Suite 203 to the Premises covered by the Lease, all upon the terms and
conditions set forth below.

NOW, THEREFORE, in consideration of the above recitations (which are hereby
acknowledged by the parties to be true and correct) and of the Premises and the
mutual covenants and agreements herein contained, the Lease is hereby amended as
follows:

1.         Defined Terms. All capitalized terms not specifically defined herein
shall have the same meaning as set forth in the Lease.

2.         Expansion Area. On the “Expansion Commencement Date” (as defined in
Exhibit B hereto) Landlord shall be deemed to have delivered possession to
Tenant of certain additional space in the Building known as Suite 203,
consisting of six thousand four hundred five (6,405) rentable square feet, as
shown on Exhibit A attached hereto and made a part hereof and referred to as the
“Expansion Area.” Notwithstanding the foregoing, in the event that Landlord does
not deliver possession of the Expansion Area to Tenant on or before February 15,
2010, subject only to force majeure, governmental and Tenant delay, Tenant shall
have the right to terminate this Amendment, at which time this Amendment shall
be void ab initio. From and after the Expansion Commencement Date, and through
the remainder of the term of this Lease, the Expansion Area shall be added to
and become a part of the “Premises” governed by the Lease, as amended hereby,
thereby increasing the area of the Premises by six thousand four hundred five
(6,405) rentable square feet for a total of seventeen thousand eighty-eight
(17,088) rentable square feet. The following provisions shall apply solely to
the Expansion Area.

(a) In addition to the Base Rent due Landlord as set forth in the “Base Rent”
section in the Basic Lease Information of the Lease, the following sums shall be
added to and be deemed to be additional Base Rent commencing on the Expansion
Commencement Date for the Expansion Area:

 

         7   

--------------------------------------------------------------------------------

Period from/to

  Monthly Rent   Annual Rent   Rate/SF of Rentable Area
(for Illustration purposes only)

Expansion Commencement Date through 2/28/2010

 

$9,874.38

 

$118,492.56

 

$18.50

3/1/2010 – 2/28/2011

 

$10,141.25

 

$121,695.00

 

$19.00

3/1/2011 – 2/29/2012

 

$10,408.13

 

$124,897.56

 

$19.50

In the event the Base Rent due under this Amendment commences on a day other
than the first (1st) day of a calendar month, the monthly installment of Base
Rent for the Expansion Area for such month shall be prorated.

(b) Landlord shall have no obligation to make improvements, decorations,
repairs, alterations, or additions to the Expansion Area, except as set forth on
Exhibit B attached hereto and incorporated herein (the “Work Letter”) which sets
forth the terms upon which Landlord shall cause improvements to be made to the
Expansion Area.

(c) Effective on the Expansion Commencement Date, all charges payable under the
Lease which are predicated upon the rentable area of the Premises, shall be
determined by using the rental area of the Premises as expanded to include the
Expansion Area [a total of seventeen thousand eighty-eight (17,088) rentable
square feet]. Accordingly, from and after the Expansion Commencement Date,
Tenant’s Proportionate Share set forth in the Basic Lease Information of the
Lease is and shall be amended hereby to be nineteen and fifty-nine hundredths
percent (19.59%). If the Expansion Commencement Date is other than the first
(1st) day of a calendar year, Tenant’s Proportionate Share shall be increased
only for that portion of the then calendar year commencing on the Expansion
Commencement Date.

3.         Parking. As of the Expansion Commencement Date, the first sentence in
Exhibit E, Parking, of the Lease is hereby deleted and replaced with the
following:

Landlord shall provide to Tenant at no cost, and so long as there is no Event of
Default, with five (5) parking spaces per one thousand (1,000) rentable square
feet, or the amount of eighty-five (85) undesignated vehicular parking spaces
(including visitor and handicap) for the Premises, as contracted or expanded, if
applicable, in the unreserved parking area associated with the Building during
the Term, as extended, if applicable, subject to such terms, conditions and
regulations as are from time to time applicable to patrons of the Parking
Facilities.

4.         Landlord’s Liability. Section 24(b) of the Lease is hereby deleted
and replaced with the following:

Tenant agrees, on its behalf and on behalf of its successors and assigns, that
any liability or obligation under this Amendment shall only be enforced against
Landlord’s interest in the Property up to a maximum of Five Million Dollars
($5,000,000.00), and in no event against any other assets of the Landlord, or
Landlord’s officers or directors.

 

         8   

--------------------------------------------------------------------------------

5.         Brokers Fee and Commission. Tenant represents that, except for CB
Richard Ellis, Inc. and Jones Lang LaSalle Brokerage LLC (“JLL”), Tenant has not
procured or engaged any real estate broker, sales person, or finder in
connection with this Amendment, and no such person initiated or participated in
the negotiation of this Amendment, or showed the Expansion Area to Tenant.
Tenant hereby agrees to indemnify, protect, defend and hold Landlord and the
Indemnitees, harmless from and against any and all liabilities and claims for
commissions and fees arising out of a breach of the foregoing representation.
Other than CB Richard Ellis, Inc., Landlord has not procured or engaged any real
estate broker, sales person or finder in connection with this Amendment.
Landlord agrees to indemnify, protect and hold Tenant harmless from and against
any and all liabilities and claims for commissions arising out of a breach of
the foregoing representation.

6.         Tenant Right of Offset. Tenant shall have a right of offset against
Monthly Rent for the Expansion Area to the extent the Construction Allowance is
not paid by Landlord in accordance with the terms of the Work Letter. In
addition, Tenant shall have a right of offset against Monthly Rent for the
Expansion Area to the extent Landlord does not pay CBRE and such payment is
required by the terms of Landlord’s commission agreement with CBRE and Tenant
actually pays JLL a commission for this Amendment.

7.         Estoppel. Both Landlord and Tenant hereby confirm and ratify the
Lease as amended and hereby acknowledge, to each of their respective knowledge,
that neither party is in default under the Lease as of the Effective Date.

8.         Entire Agreement; Amendment. This Amendment, the Lease, and all
exhibits, schedules, riders and addenda to each, constitute the full and
complete agreement and understanding between the parties hereto and shall
supersede all prior communications, representations, understandings or
agreements, if any, whether oral or written, concerning the subject matter
contained in this Amendment and the Lease, as so amended, and no provision of
the Lease as so amended may be modified, amended, waived or discharged, in whole
or in part, except by a written instrument executed by all of the parties
hereto.

9.         Authority. Each party represents and warrants to the other that it
has full authority and power to enter into and perform its obligations under
this Amendment, that the person executing this Amendment is fully empowered to
do so, and that no consent or authorization is necessary from any third party.

10.         Counterparts. This Amendment may be executed in duplicates or
counterparts, or both, and such duplicates or counterparts together shall
constitute but one and the same instrument. Each duplicate and counterpart shall
be equally admissible in evidence, and each original shall fully bind each party
who has executed it.

11.         Continuation. Expect as expressly modified herein, the Lease
continues in full force and effect with respect to the Premises. In the event of
any conflict between the Lease and this Amendment, this Amendment shall control.

 

         9   

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Landlord and Tenant have caused this document to be executed
as of the Effective Date.

 

LANDLORD:

   

TENANT:

MLIC ASSET HOLDINGS LLC, a

   

SHORETEL, INC., a Delaware

Delaware limited liability company

   

corporation

By: Transmountain Land & Livestock Company,
a Montana corporation,

   

By:

 

/s/ John W. Combs

   

Its:

 

            CEO            

     

            its Manager

     

            By:

 

/s/ Kurt W. Day

       

Kurt W. Day

       

Vice President

     

 

         10   

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EXHIBIT A

PLAN OF EXPANSION AREA

 

         Exhibit A   

--------------------------------------------------------------------------------

EXHIBIT B

WORKLETTER

1.         Space Plan. Landlord has prepared or shall prepare a space plan of
the Expansion Area depicting the construction work which is to be performed in
order to prepare the Expansion Area for Tenant’s use and occupancy (the
“Expansion Work”). All of the Expansion Work shall be performed for Tenant by
Landlord, at Tenant’s expense (subject to the Construction Allowance as provided
in Section 3 below), and the cost of the Expansion Work shall be additional Rent
under this Lease. Landlord shall cause to be constructed in a good and
workmanlike manner all of the Expansion Work in the Expansion Area(subject to
adjustment as hereinafter provided).

2.         Expansion Working Drawings. Landlord shall cause to be prepared the
final architectural, mechanical (including heating, ventilating and air
conditioning), electrical, plumbing, structural plans and specifications (the
“Expansion Working Drawings”) necessary to complete the work depicted on the
space plan approved by Tenant on or before September 23, 2009.

Landlord shall submit the finished Expansion Working Drawings to Tenant on or
before September 23, 2009. If, within ten (10) days after receipt of the
Expansion Working Drawings from Landlord, Tenant fails to initial, and, if
Tenant has any corrections thereon, to make such corrections on the Expansion
Working Drawings, and return the Expansion Working Drawings to Landlord, the
Expansion Working Drawings shall be deemed approved by Tenant, and Landlord may
proceed to complete the Expansion Work in accordance with the Expansion Working
Drawings.

3.         Construction Allowance. Landlord and Tenant hereby agree that
Landlord shall provide Tenant with an allowance of up to $15.00 per rentable
square foot of the Expansion Area (the “Construction Allowance”), to be applied
to the cost of the design and construction of the Expansion Work . All costs and
expenses in connection with the Expansion Work shall be (i) competitively bid to
a minimum of three (3) general contractors and/or three (3) subcontractors, as
applicable, with Tenant having the right to review and approve such bids within
three (3) days and (ii) an amount not to exceed available funds from the
Construction Allowance shall be paid directly and timely by Landlord to the
contractors and/or sub-contractors, as applicable. All costs and expenses in
excess of the Construction Allowance, which have been approved in advance by
Tenant in Tenant’s sole discretion, shall be paid for by Tenant within thirty
(30) days of Tenant’s approval of such excess costs and expenses. Any unused
portion of the Construction Allowance up to and not to exceed $5.00 per rentable
square foot of the Expansion Area may be, in Tenant’s sole discretion, used:
(i) as a credit to Base Rent first due; (ii) by Tenant for furniture, fixture
and equipment or (iii) by Tenant for the cost of the Expansion Working Drawings.

Landlord or its affiliate shall supervise the Expansion Work, make disbursements
required to be made to the contractor, act as a liaison between the contractor
and Tenant and coordinate the relationship between the Expansion Work, the
Building, and the Building’s

 

           

--------------------------------------------------------------------------------

systems. In consideration for CBRE’s construction supervision services, Tenant
shall pay to CBRE a construction supervision fee equal to five percent (5%) of
the hard construction costs. Landlord will make every effort to complete the
Expansion Work on or before October 23, 2009.

4.         Information Submission. To the extent not shown on the Expansion
Working Drawings, Tenant shall supply Landlord with all information concerning
Tenant’s requirements with respect to the construction of the Expansion Area
within a reasonable time of receiving the request from Landlord. In the event
Tenant fails to supply the necessary information within a reasonable time of
receiving the request from Landlord, Landlord may (but shall not be required to)
complete the Expansion Area solely on the information available to Landlord.

5.         Tenant’s Entry Prior to Expansion Commencement Date. Landlord may
permit Tenant and/or its agents or laborers to enter the Expansion Area at
Tenant’s sole risk prior to the Expansion Commencement Date, in order to perform
various work through Tenant’s own contractors as Tenant may desire, at the same
time that Landlord’s contractors are working in the Expansion Area. The
foregoing license to enter prior to the Expansion Commencement Date, however, is
conditioned upon Tenant’s labor not interfering with Landlord’s contractors or
with any other tenant or its labor. If at any time such entry shall cause
disharmony, interference or union disputes of any nature whatsoever, or if
Landlord shall, in Landlord’s sole judgment, determine that such entry, such
work or the continuance thereof shall interfere with, hamper or prevent Landlord
from proceeding with the completion of the Building or the Expansion Area at the
earliest possible date, this license may be withdrawn by Landlord effective
immediately upon written notice to Tenant. Such entry shall be deemed to be
under and subject to all of the terms, covenants and conditions of the Lease and
Tenant shall comply with all of the provisions of the Lease which are the
obligations or covenants of Tenant, other than the obligation to pay Rent,
except as provided in this Work Letter. In the event that Tenant, its agents or
laborers incur any charges from Landlord, including but not limited to charges
for use of construction or hoisting equipment on the Property, then such charges
shall be an obligation of Tenant and shall constitute Rent due under the Lease.
Tenant’s entry into the Expansion Area solely for the purposes of this paragraph
shall not be deemed to be occupancy of the Expansion Area.

6.         Possession. Landlord has not agreed or represented that the Expansion
Area will be complete or ready for occupancy on any specific date; provided
that, Landlord shall use its best efforts to complete the Expansion Work on or
before December 1, 2009. For purposes hereof, the “Expansion Commencement Date”
shall be the date which is fifteen (15) days after the date the Expansion Area
is complete and ready for occupancy. The Expansion Area shall not be deemed
incomplete or not ready for occupancy if only insubstantial details of
construction, decoration or mechanical adjustments remain to be done. The
determination of Landlord’s architect or the interior space planner for the
Building shall be final and conclusive as to whether the Expansion Area is
complete and ready for occupancy.

7.         Punch List. Landlord shall notify Tenant in writing that the
Expansion Commencement Date has occurred, which shall not be a date prior to the
date that a certificate of occupancy is issued and other required governmental
approvals are received. No later than ten (10) days after the Expansion
Commencement Date Tenant shall submit to the Landlord a list of unfinished
details of Landlord’s work (the “Punch List”). If Tenant shall fail to execute
and

 

   Exhibit A         

--------------------------------------------------------------------------------

deliver to Landlord the Punch List within said ten (10) day period, Tenant shall
be deemed to have accepted the Expansion Area “as is”. At the request of
Landlord from time to time thereafter, Tenant shall, upon completion of items
previously listed on the Punch List, promptly furnish to Landlord a revised
Punch List acknowledging completion of said items. In addition, Landlord shall
ensure that all of the Expansion Work completed with respect to the Expansion
Area satisfies any and all governmental requirements and laws.

8.         Landlord’s Entry After Substantial Completion. At any time after the
Expansion Commencement Date, Landlord may enter the Expansion Area to complete
the Punch List items, and such entry by Landlord, its agents, servants,
employees or contractors for such purpose shall not constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of Rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Landlord or its agents; provided that
Landlord shall not interfere with Tenant’s conduct of business in the Premises,
which shall include the Expansion Area.

 

         Exhibit A   

--------------------------------------------------------------------------------

SECOND AMENDMENT TO LEASE AGREEMENT

THIS SECOND AMENDMENT TO LEASE AGREEMENT (this “Amendment”) is made and entered
into as of the             day of December, 2009 (the “Effective Date”), by and
between MLIC ASSET HOLDINGS LLC, a Delaware limited liability company
(“Landlord”), and SHORETEL, INC., a Delaware corporation (“Tenant”).

RECITALS

A.         Landlord or its predecessor in interest and Tenant entered into a
certain Lease Agreement dated as of June 30, 2008, as amended by that certain
First Amendment to Lease Agreement dated as of September 16, 2009 (collectively,
and as modified, amended or extended from time to time, the “Lease”) demising
Suites 200, 202 and 203 consisting of 17,088 rentable square feet (the
“Premises”) in the office building (the “Building”) located on the land commonly
known as River Place Corporate Park, Building IV, Austin, Texas 78730, for a
term expiring on February 29, 2012.

B.         Landlord and Tenant desire to, among other things, amend the Lease to
add Suites 201 and 205 to the Premises covered by the Lease, all upon the terms
and conditions set forth below.

NOW, THEREFORE, in consideration of the above recitations (which are hereby
acknowledged by the parties to be true and correct) and of the Premises and the
mutual covenants and agreements herein contained, the Lease is hereby amended as
follows:

1.         Defined Terms. All capitalized terms not specifically defined herein
shall have the same meaning as set forth in the Lease.

2.         Expansion Area. On February 1, 2010 (the “Expansion Commencement Date
– Suite 205”) Landlord shall deliver possession to Tenant of certain additional
space in the Building known as Suite 205, consisting of three thousand
forty-eight (3,048) rentable square feet as shown on Exhibit A – 1 attached
hereto and made a part hereof and referred to as the “Expansion Area – Suite
205.” On April 1, 2010 (the “Expansion Commencement Date – Suite 201”) Landlord
shall deliver possession to Tenant of certain additional space in the Building
known as Suite 201, consisting of ten thousand nine hundred ninety-nine
(10,999) rentable square feet as shown on Exhibit A – 2 attached hereto and made
a part hereof and referred to as the “Expansion Area – Suite 201” (Expansion
Area – Suite 205 and Expansion Area – Suite 201 are collectively referred to as
the “Expansion Area”). In addition, Landlord hereby grants Tenant early access
to the Expansion Area in accordance with Section 5 of the Work Letter (as
defined herein) attached hereto as Exhibit B.

Provided that this Amendment has not been terminated by Tenant as set forth
herein, from and after the Expansion Commencement Date – Suite 205, and through
the remainder of the term of this Lease, the Expansion Area – Suite 205 shall be
added to and become a part of the “Premises” governed by the Lease, as amended
hereby, thereby increasing the area of the Premises from seventeen thousand
eighty eight (17,088) rentable square feet to twenty thousand one hundred
thirty-six (20,136) rentable square feet.

In addition, and provided that this Amendment has not been terminated by Tenant
as set forth herein, from and after the Expansion Commencement Date – Suite 201,
and through the remainder of the term of this Lease, the Expansion Area – Suite
201 shall be added to and become a part of the “Premises” governed by the Lease,
as amended hereby, thereby increasing the area of the Premises from twenty
thousand one hundred thirty-six (20,136) rentable square feet to thirty-one
thousand one hundred thirty-five (31,135) rentable square feet.

 

         Exhibit A   

--------------------------------------------------------------------------------

Notwithstanding the two immediately preceding paragraphs of this Section 2,
Landlord and Tenant agree that the Base Rent, all charges payable under the
Lease which are predicated upon the rentable area of the Premises and the
rentable square footage of Expansion Area – Suite 205 and/or Expansion Area –
Suite 201 (by which the Base Rent and aforementioned charges are determined) may
be adjusted, as necessary, based upon Tenant’s measurement of Expansion Area –
Suite 205 and/or Expansion Area – Suite 201, conducted in accordance with BOMA
standards, prior to the Expansion Commencement Date – Suite 205 and the
Expansion Date – Suite 201, as applicable.

3.         Rent, the Expansion Area and Other Charges. The following provisions
of this Section 3 shall apply solely to Expansion Area – Suite 205 and Expansion
Area – Suite 201:

(a) Tenant agrees to pay Base Rent for the Expansion Area as follows commencing
first on the Expansion Commencement Date – Suite 205 and second on the Expansion
Commencement Date – Suite 201:

Expansion Area – Suite 205:

 

 

Period from/to

 

 

Monthly Rent    

 

 

 

Annual Rent    

 

 

 

Rate/SF of Rentable Area    

 

2/1/2010 – Suite 205 -
5/31/2010

 

$4,699.00

 

$56,388.00

 

$18.50

6/1/2010 – 5/31/2011

 

$4,826.00

 

$57,912.00

 

$19.00

6/1/2011 – 2/29/2012

 

$4,953.00

 

$59,436.00

 

$19.50

Expansion Area – Suite 201:

 

Period from/to

 

Monthly Rent    

 

Annual Rent    

 

Rate/SF of Rentable Area    

4/1/2010 – 5/31/2010

 

$16,956.79

 

$203,481.50

 

$18.50

6/1/2010 – 5/31/2011

 

$17,415.08

 

$208,981.00

 

$19.00

3/1/2011 – 2/29/2012

 

$17,873.38

 

$214,480.50

 

$19.50

(b) Landlord shall have no obligation to make improvements, decorations,
repairs, alterations, or additions to the Expansion Area, except as set forth on
Exhibit B attached hereto and incorporated herein (the “Work Letter”) which sets
forth the terms upon which Landlord shall cause improvements to be made to the
Expansion Area.

(c) Subject to Section 2 of this Amendment, effective on the Expansion
Commencement Date – Suite 205, all charges payable under the Lease which are
predicated upon the rentable area of the Premises, shall be determined by using
the rental area of the Premises, as expanded hereby, to include the Expansion
Area – Suite 205 [a total of twenty thousand one hundred thirty-six
(20,136) rentable square feet]. Accordingly, from and after the Expansion
Commencement Date – Suite 205, Tenant’s Proportionate Share set forth in the
Basic Lease Information of the Lease is and shall be amended hereby

 

         Exhibit A   

--------------------------------------------------------------------------------

to be twenty-three and eight hundredths of one percent (23.08%). Tenant’s
Proportionate Share for 2010 shall be increased only for that portion of the
then calendar year commencing on the Expansion Commencement Date – Suite 205 and
not for the entire calendar year.

(d) Subject to Section 2 of this Amendment, effective on the Expansion
Commencement Date – Suite 201, all charges payable under the Lease which are
predicated upon the rentable area of the Premises, shall be determined by using
the rental area of the Premises, as expanded hereby, to include the Expansion
Area – Suite 201 [a total of thirty-one thousand one hundred thirty-five
(31,135) rentable square feet]. Accordingly, from and after the Expansion
Commencement Date – Suite 201, Tenant’s Proportionate Share set forth in the
Basic Lease Information of the Lease is and shall be amended hereby to be
thirty-five and sixty-nine hundredths of one percent (35.69%). Tenant’s
Proportionate Share for 2010 shall be additionally increased only for that
portion of the then calendar year commencing on the Expansion Commencement Date
– Suite 201 and not for the entire calendar year.

4.         Security Deposit. Upon Landlord’s delivery of Expansion Area - Suite
201 to Tenant as set forth in Section 5 of the Work Letter, Tenant shall deliver
the amount of $35,831.56 to Landlord to be included in the Security Deposit of
$26,787.63 for a total amount of $62,619.19.

5.         Renewal Option. Exhibit G to the Lease entitled “Option to Extend” is
hereby amended to read as follows:

a.         Tenant shall have the one (1) time right to extend the existing Term
of the Lease (the “Renewal Option”) for one (1) additional period consisting of
five (5) years (the “Renewal Period”) commencing on the expiration of the
existing Term (i.e., February 29, 2012); provided, however, that the Lease, as
amended hereby, is in full force and effect, and there is no Event of Default at
the time the Renewal Option is exercised or at the commencement of the Renewal
Period.

b.         The Renewal Option shall be exercised by Tenant, if at all, by
delivery of written notice to Landlord (the “Renewal Notice”) on or before the
date which is six (6) months prior to the expiration of the Term. If Tenant
fails to timely deliver the Renewal Notice as set forth herein, Tenant shall
have waived the Renewal Option and shall have no further right to extend the
existing Term.

c.         Landlord’s and Tenant’s rights and obligations during the Renewal
Period shall be upon the same terms and conditions as are contained in the
Lease, as amended hereby, except as otherwise specifically set forth below:

(i) The annual Base Rent (described below) during the Renewal Period shall be at
the rate per annum per square foot of rentable area in the Premises, equal to
ninety-five percent (95%) of a fair market rate for comparable space in the
Building and in other buildings in the Northwest Austin Class A rental market as
of the date the renewal term is to commence, taking into account the tenant
improvement allowance, the specific provisions of the Lease that will remain
constant, the location and quality of the Building, all concessions which are
being offered renewal tenants and the size and location of the space
(collectively, the “Market Rental Rate”).

(ii) Landlord shall promptly notify Tenant in writing of its determination of
the Market Rental Rate (“Landlord’s Notice”), which shall be no later than
twenty (20) business days after its receipt of the Renewal Notice. On or before
the date which is the twentieth (20th) business day following Tenant’s receipt
of Landlord’s Notice (the “Objection Period”), Tenant

 

         Exhibit A   

--------------------------------------------------------------------------------

may, at Tenant’s option, either (i) accept, in writing, the Market Rental Rate
set forth in Landlord’s Notice or (ii) object to Landlord’s proposed Market
Rental Rate and propose, in writing, an alternative Market Rental Rate for the
Renewal Period (“Tenant’s Objection”). If Tenant delivers Tenant’s Objection and
Tenant and Landlord are unable to agree on a mutually acceptable Market Rental
Rate, then Tenant, within five (5) business days following the delivery of
Tenant’s Objection to Landlord, shall have the option of either (x) revoking its
election to extend the Term of the Lease for the Renewal Period or
(y) requesting binding arbitration. In the event Tenant shall revoke its notice
to extend the Term of the Lease, the Lease shall expire per its terms.

(iii) In the event Tenant requests the binding arbitration, the Market Rental
Rate shall be determined as follows:

(a)         Not later than thirty (30) calendar days following the delivery of
Tenant’s Objection to Landlord, Landlord and Tenant shall each appoint one
(1) arbitrator who shall, by profession, be a real estate appraiser (with the
professional designation of M.A.I., or, if M.A.I. ceases to exist, a comparable
designation from an equivalent professional appraisal organization) who shall
have been active in (i) appraisals of commercial properties in the Austin, Texas
market area and (ii) office lease market rental arbitration, throughout the ten
(10) year period immediately preceding the date of such appointment by either
Landlord or Tenant and who shall not have previously been employed by either
Landlord or Tenant. The determination of the arbitrators shall be limited solely
to the issue of whether Landlord’s or Tenant’s submitted Market Rental Rate for
the Premises is the closest to the Market Rental Rate for the Premises as
determined by the arbitrators, taking into account all relevant elements as
determined by the arbitrators, and whichever amount is closest to the amount
determined by the arbitrators shall be the final Market Rental Rate.

(b)         The two (2) arbitrators so appointed shall, on or before the tenth
(10th) calendar day following the appointment of the last appointed arbitrator,
agree upon and appoint a third (3rd) arbitrator with the same qualifications as
set forth in Section 5 (iii)(a) above.

(c)         The three (3) arbitrators shall, on or before the thirtieth
(30) calendar day following the appointment of the third arbitrator, deliver a
decision in writing to Landlord and Tenant stating the determined Market Rental
Rate.

(d)         The decision of the majority of the three (3) arbitrators shall be
binding upon Landlord and Tenant and judgment upon such decision may be entered
in by any court having jurisdiction over Landlord and Tenant.

(e)         If the two (2) arbitrators fail to timely appoint a third
(3rd) arbitrator, both arbitrators shall be promptly dismissed and Landlord and
Tenant shall, on or before the thirtieth (30th) calendar day following such
dismissal, each select and appoint one (1) new arbitrator possessing the
qualifications described in Section 5(iii)(a) above. Such new arbitrators shall
promptly follow the procedures outlined in Section 5(iii)(b) and (c).

(f)         Notwithstanding the foregoing, if either Landlord or Tenant fails to
timely appoint an arbitrator and such failure to appoint an arbitrator is not
cured on or before the tenth (10th) calendar day following receipt by such
failing party of written demand to do so by the other party (which other party
shall have appointed its arbitrator prior to sending such written demand), then
the arbitrator appointed by the party sending such demand shall, acting alone,
reach a decision on the applicable Market Rental Rate and notify Landlord and
Tenant in writing thereof at which time such arbitrator’s decision will be
binding on Landlord and Tenant.

 

         Exhibit A   

--------------------------------------------------------------------------------

(g)         Notwithstanding the time periods set forth in Section 5(b)(ii)
above, Tenant hereby reserves the right to revoke its exercise of the Renewal
Option on or before the fifth (5th) business day following Tenant’s receipt of
Landlord’s Notice, in which case the Lease shall expire per its terms.

(h)         The cost of arbitration shall be paid by Landlord if the Market
Rental Rate set forth in Tenant’s Objection is selected and shall be paid by
Tenant if the Market Rental Rate set forth in Landlord’s Notice is selected.

(iv) Tenant shall have no further right to extend the Term and no right to any
abatement of Base Rent or Tenant’s Percentage Share of Operating Expenses during
the Renewal Period.

6.         Right of First Refusal. Exhibit H to the Lease entitled “Right of
First Offer” is hereby amended to read as follows:

(a)         On the condition that (i) a bona fide offer to lease is for a term
which extends no later than the Term of the Lease (including the Renewal Period,
if any) and (ii) Tenant continues to lease the entire Premises, as amended
hereby, during the term of the bona fide offer to lease, Tenant shall have an
on-going right of first refusal (the “Right of First Refusal”) to lease all or
any part of the twenty six thousand six hundred ninety eight (28,698) rentable
square feet on the third (3rd) floor of the Building (such portion being
referred to as the “Third Floor Space”). After Landlord notifies Tenant in
writing of a bona fide offer from a prospective tenant (the “Offer”) to lease
all or any part of the Third Floor Space, Tenant shall have five (5) business
days (the “Acceptance Period”) to exercise its right hereunder by delivering
written notice to Landlord. If Tenant fails to notify Landlord of its election
on or before the expiration of the Acceptance Period, Tenant shall be deemed to
have waived the Right of First Refusal with respect to the Third Floor Space. If
Landlord desires to lease the Right of First Refusal space on terms that are
five percent (5%) more favorable to a third party from those contained in the
bona fide offer declined by Tenant, Landlord shall first offer the space on such
different terms (the “Revised Offer”) to Tenant and Tenant shall then have an
additional five (5) business day period (the “Additional Acceptance Period”) to
exercise its right hereunder by delivering written notice to Landlord. If Tenant
fails to notify Landlord of its election on or before the expiration of the
Additional Acceptance Period, Tenant shall be deemed to have waived the Right of
First Refusal with respect to the Third Floor Space.

(b)         Upon any exercise by Tenant of the Right of First Refusal, Landlord
and Tenant shall immediately execute an amendment to the Lease in substantially
the form of this Amendment stating the addition of the Third Floor Space to the
Premises and incorporating the terms and conditions as set forth in the Offer or
the Revised Offer, as applicable. If Tenant exercises the Right of First
Refusal, Landlord will deliver such space ten (10) calendar days after the later
to occur of: (i) the date upon which the leasehold improvements to be
constructed in the Third Floor Space have been substantially completed in
accordance with the construction drawings for such leasehold improvements or
(ii) the issuance of a certificate of occupancy or other occupancy permit, if
required by applicable law, for the Third Floor Space; provided however that
such delivery shall occur on or before the date which is six (6) calendar months
prior to the expiration of the Term, as extended, if applicable.

(c)         Tenant may not exercise its rights under this Section 6 if an Event
of Default exists beyond any applicable cure period. Tenant’s rights under this
Section 6 shall terminate if the Lease, as amended hereby, or Tenant’s right to
possession of the Premises is terminated. Tenant’s rights specified in this
Section 6 are personal to the named Tenant set forth in the signature page of
this Amendment or an Affiliate, and may not be assigned to or exercised by any
other person or entity.

 

         Exhibit A   

--------------------------------------------------------------------------------

(d)         Notwithstanding anything to the contrary contained herein, the Right
of First Refusal is only valid if Tenant continues to lease the entire Premises,
as amended hereby, through or beyond the last day of the term of the Offer or
the Revised Offer, as applicable.

7.         Brokers Fee and Commission. Tenant represents that, except for CB
Richard Ellis, Inc. (“CBRE”) and Jones Lang LaSalle Brokerage LLC (“JLL”),
Tenant has not procured or engaged any real estate broker, sales person, or
finder in connection with this Amendment, and no such person initiated or
participated in the negotiation of this Amendment, or showed the Expansion Area
to Tenant. Tenant hereby agrees to indemnify, protect, defend and hold Landlord
and the Indemnitees, harmless from and against any and all liabilities and
claims for commissions and fees arising out of a breach of the foregoing
representation. Other than CB Richard Ellis, Inc., Landlord has not procured or
engaged any real estate broker, sales person or finder in connection with this
Amendment. Landlord agrees to indemnify, protect and hold Tenant harmless from
and against any and all liabilities and claims for commissions arising out of a
breach of the foregoing representation. Notwithstanding the foregoing, Landlord
has agreed that per a separate agreement between Landlord and JLL, Landlord
shall pay JLL a leasing commission in the amount of four percent (4%) of the
gross full service Rent for the Expansion Area.

8.         Tenant Right of Offset. Tenant shall have a right of offset against
Monthly Rent for the Expansion Area to the extent the Construction Allowance is
not paid by Landlord in accordance with the terms of the Work Letter. In
addition, Tenant shall have a right of offset against Monthly Rent for the
Expansion Area to the extent Landlord does not pay CBRE and/or JLL and such
payment is required by the terms of Landlord’s commission agreement with CBRE
and/or JLL and Tenant actually pays CBRE and/or JLL a commission for this
Amendment.

9.         Estoppel. Both Landlord and Tenant hereby confirm and ratify the
Lease as amended and hereby acknowledge, to each of their respective knowledge,
that neither party is in default under the Lease as of the Effective Date. In
addition, Landlord represents and warrants to Tenant that Tenant that Landlord
is not aware of any fact or circumstance that would prohibit Tenant from timely
occupying the Expansion Area.

10.         Entire Agreement & Amendment. This Amendment, the Lease, and all
exhibits, schedules, riders and addenda to each, constitute the full and
complete agreement and understanding between the parties hereto and shall
supersede all prior communications, representations, understandings or
agreements, if any, whether oral or written, concerning the subject matter
contained in this Amendment and the Lease, as so amended, and no provision of
the Lease as so amended may be modified, amended, waived or discharged, in whole
or in part, except by a written instrument executed by all of the parties
hereto.

11.         Authority. Each party represents and warrants to the other that it
has full authority and power to enter into and perform its obligations under
this Amendment, that the person executing this Amendment is fully empowered to
do so, and that no consent or authorization is necessary from any third party.

12.         Counterparts. This Amendment may be executed in duplicates or
counterparts, or both, and such duplicates or counterparts together shall
constitute but one and the same instrument. Each duplicate and counterpart shall
be equally admissible in evidence, and each original shall fully bind each party
who has executed it.

 

         Exhibit A   

--------------------------------------------------------------------------------

13.         Continuation. Expect as expressly modified herein, the Lease
continues in full force and effect with respect to the Premises. In the event of
any conflict between the Lease and this Amendment, this Amendment shall control.

14.         Lobby and Security. Prior to the last to occur of (i) the Expansion
Commencement Date – 205 or (ii) the Expansion Commencement Date – 201, Tenant
shall have, at no cost to Tenant, the right to use a portion of the Common Area
located in front of the elevator in the Expansion Area, as more particularly
described on Exhibit C attached hereto and incorporated herein, for Tenant’s
lobby (the “Lobby”). Landlord agrees to provide all elevator security necessary
for Tenant and Tenant’s agents and contractors to access the Lobby during the
Term of the Lease, as amended hereby.

[Signature Page Follows]

 

         Exhibit A   

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Landlord and Tenant have caused this document to be executed
as of the Effective Date.

 

   

LANDLORD:

     

TENANT:

         

MLIC ASSET HOLDINGS LLC, a Delaware limited
liability company

   

SHORETEL, INC., a Delaware corporation

         

By: Transmountain Land & Livestock Company, a Montana
corporation, its Manager

   

By:        /s/ Pedro Rump

          

By:             

   

Its:_ VP Engineering & Operations

   

        Kurt W. Day

         

        Vice President

       

 

         Exhibit A   

--------------------------------------------------------------------------------

EXHIBIT A – 1

PLAN OF EXPANSION AREA – SUITE 205

[To be attached]

 

Exhibit A

--------------------------------------------------------------------------------

EXHIBIT A – 2

PLAN OF EXPANSION AREA – SUITE 201

[To be attached]

 

Exhibit A

--------------------------------------------------------------------------------

EXHIBIT B

WORK LETTER

1.         Space Plan and Expansion Work. Tenant has prepared or shall prepare a
space plan of the Expansion Area depicting the construction work (the “Expansion
Work”) which is to be performed in order to prepare the Expansion Area for
Tenant’s use and occupancy. All of the Expansion Work shall be performed by
Tenant, at Tenant’s expense (subject to the Construction Allowance as provided
in Section 3 below), and the cost of the Expansion Work up to the Construction
Allowance shall be additional Rent under the Lease.

Landlord and Tenant hereby acknowledge and agree that they have mutually agreed
upon a list of three (3) general contractors as follows: (i) Dimensions
Contracting; (ii) Fore Construction and (iii) DAJ Construction (collectively,
the “Contractors”). In addition, the parties hereto agree that on or before the
tenth (10th) calendar date following the Effective Date of this Amendment,
Tenant will deliver a “Fee and General Conditions Bid as to the General
Contractor” (the “Bid”) to each of the Contractors. Within two (2) business
following receipt of all of the Contractors’ responses to the Bid (“Contractor
Response” and collectively the “Contractor Responses”), Landlord and Tenant
shall review each Contractor Response and mutually agree on a general contractor
based on the Contactor Responses. In addition, Tenant hereby agrees to use
(x) Landlord’s designated MEP engineer, which is “HMG & Associates,” (y) “JLL
Project and Development Services” (the “Project Manager”) for the management of
the design and construction of the Expansion Work and (z) “The Architect’s
Office” for the interior design of the Expansion Area.

Tenant shall cause the Expansion Work to be constructed in a good and
workmanlike manner in the Expansion Area (subject to adjustment as hereinafter
provided). In addition, Landlord agrees to cooperate with Tenant to the extent
necessary for Tenant to obtain any certificates of occupancy.

2.         Expansion Working Drawings. Tenant shall cause to be prepared the
final architectural, mechanical (including heating, ventilating and air
conditioning), electrical, plumbing, structural plans and specifications
(collectively, the “Expansion Working Drawings”) necessary to complete the
Expansion Work. Tenant shall submit the Expansion Working Drawings to Landlord
upon their completion, at which time Landlord shall, on or before the fifth
(5th) calendar day following its receipt of the Expansion Working Drawings (the
“Review Period”), advise Tenant whether the Expansion Working Drawings are
acceptable or unacceptable to Landlord in Landlord’s reasonable discretion. If
Landlord has concluded that the Expansion Working Drawings are unacceptable,
Landlord shall provide notice to Tenant in writing detailing the reasons why the
Expansion Working Drawings are unacceptable. If Landlord fails to advise Tenant
in writing on or before the expiration of the Review Period, then the Expansion
Working Drawings shall be deemed approved by Landlord, and Tenant may proceed to
complete the Expansion Work in accordance with the Expansion Working Drawings.

3.         Construction Allowance. Landlord and Tenant hereby agree that
Landlord shall provide Tenant with an allowance in the amount of Twelve and
No/100 Dollars ($12.00) per rentable square foot of the Expansion Area (the
“Construction Allowance”), to be applied to the cost of the design and
construction of the Expansion Work and for costs associated with
telecommunication networking, furniture installation, moving and all hard and
soft costs of construction, including, but not limited to, any project
management fees. Notwithstanding the immediately preceding sentence, a portion
of the Construction Allowance up to but not exceeding the amount of Five and
No/100 Dollars ($5.00) per rentable square foot may be used by Tenant for the
costs of networking, furniture installation, moving and soft costs. An amount
not to exceed available funds from the Construction Allowance shall be paid
directly and timely by Landlord to the contractors and/or sub-contractors, as
applicable, but in any event, Landlord shall make at least one (1) payment per
month to the contractors and/or sub-contractors, as applicable, and such payment
shall be made on or before the thirtieth (30th) calendar day following
Landlord’s receipt of such expenses. All costs and expenses in excess of the
Construction Allowance, which have been approved in advance by Tenant in
Tenant’s sole discretion, shall be paid for by Tenant within thirty (30) days of
Tenant’s approval of such excess costs and expenses. Any unused portion of the

 

Exhibit B – Page 1 of 3

--------------------------------------------------------------------------------

Construction Allowance up to and not to exceed $5.00 per rentable square foot of
the Expansion Area may be, in Tenant’s sole discretion, used: (i) as a credit to
Base Rent due; (ii) by Tenant for furniture, fixtures and equipment or (iii) by
Tenant for the cost of the Expansion Working Drawings.

Landlord or its affiliate shall cooperate and work closely with the Project
Manager to (i) supervise the Expansion Work on behalf of Landlord, (ii) make
disbursements required to be made to the contractor, (iii) act as a liaison
between the contractor and Tenant and (iv) coordinate the relationship between
the Expansion Work, the Building, and the Building’s systems. The parties hereto
agree that there will be no construction supervision fee payable to Landlord or
CBRE by Tenant in connection with the Expansion Work.

4.         Information Submission. To the extent not shown on the Expansion
Working Drawings, Tenant shall supply Landlord with all information concerning
Tenant’s requirements with respect to the construction of the Expansion Area
within a reasonable time of receiving the request from Landlord.

5.         Tenant’s Entry Prior to Expansion Commencement Date. Landlord shall
permit Tenant and/or its agents or laborers to enter the (i) Expansion Area –
Suite 205 at Tenant’s sole risk upon the Effective Date of this Amendment and
(ii) Expansion Area - Suite 201 at Tenant’s sole risk on the fifth
(5th) business day following the Effective Date of this Amendment (the “Final
Delivery Date”), in order for Tenant to perform the Expansion Work in the
Expansion Area. In the event that Landlord does not provide access to the
Expansion Area- Suite 205 to Tenant on or before December 15, 2009, subject only
to force majeure, governmental and Tenant delay, Tenant shall have the right to
terminate this Amendment in writing on or before 5:00 P.M. Central Standard
Time, December 21, 2009, at which time this Amendment shall be void ab initio.
In the event that Landlord does not provide access to the Expansion Area—Suite
201 to Tenant by the fifth (5th) business day following the Final Delivery Date
(the “201 Termination Date”), subject only to force majeure, governmental and
Tenant delay, Tenant shall have the right to terminate this Amendment in writing
on or before 5:00 P.M. Central Standard Time on the fifth (5th) business day
following the 201 Termination Date, at which time this Amendment shall be void
ab initio.

Such entry prior to Expansion Commencement Date – Suite 205 and Expansion
Commencement Date – Suite 201 shall be deemed to be under and subject to all of
the terms, covenants and conditions of the Lease, as amended hereby, and Tenant
shall comply with all of the provisions of the Lease, as amended hereby, which
are the obligations or covenants of Tenant, other than the obligation to pay
Rent and except as provided in this Work Letter. In the event that Tenant, its
agents or laborers incur any third party charges from Landlord, including but
not limited to charges for use of construction or hoisting equipment on the
Premises, then such charges shall be an obligation of Tenant and shall
constitute Rent due under the Lease to the extent such amount exceeds the
Construction Allowance. Tenant’s entry into the Expansion Area solely for the
purposes of this Section 5 shall not be deemed to be occupancy of the Expansion
Area.

 

Exhibit B – Page 2 of 3

--------------------------------------------------------------------------------

EXHIBIT C

LOBBY AREA

[To be attached]

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 3

        

--------------------------------------------------------------------------------

THIRD AMENDMENT TO LEASE AGREEMENT

THIS THIRD AMENDMENT TO LEASE AGREEMENT (this “Amendment”) is made and entered
into effective as of December 10, 2010 (the “Effective Date”), by and between
MLIC ASSET HOLDINGS LLC, a Delaware limited liability company (“Landlord”), and
SHORETEL, INC., a Delaware corporation (“Tenant”).

W I T N E S S E T H :

WHEREAS, Landlord or its predecessor in interest and Tenant have entered into a
certain Lease Agreement dated as of June 30, 2008 (the “Lease Agreement”), as
amended by that certain First Amendment to Lease Agreement dated as of
September 16, 2009 (the “First Amendment”) and as amended by that Second
Amendment dated December of 2009 (the “Second Amendment”) (the Lease Agreement,
First Amendment, the Second Amendment and this Amendment are referred to herein
collectively as the “Lease”) demising Suites 200, 201, 202, 203 and 205
consisting of 31,135 rentable square feet (the “Premises”) in the office
building (the “Building”) located on the land commonly known as River Place
Corporate Park, Building IV, Austin, Texas 78730.

WHEREAS, the Lease by its terms shall expire on February 29, 2012, and the
parties desire to amend and extend the Lease, all on the terms and conditions
hereinafter set forth.

WHEREAS, Landlord and Tenant desire to, among other things, amend the Lease to
add a portion of Suite 300 to the Premises covered by the Lease, all upon the
terms and conditions set forth below.

A G R E E M E N T :

NOW, THEREFORE, for and in consideration of the above and foregoing premises and
the mutual covenants and agreements set forth hereinbelow, together with other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by each of the parties hereto, Landlord and Tenant do hereby agree
that the Lease shall be and is hereby amended as follows:

1.         Defined Terms. All capitalized terms not specifically defined herein
shall have the same meaning as set forth in the Lease.

2.         Expansion Area. Subject to delivery by Landlord as provided in
Section 6 of this Amendment, Tenant shall take possession of certain additional
space in the Building consisting of a portion of Suite 300 (“Suite 300”) of
approximately sixteen thousand six hundred forty two (16,642) rentable square
feet as shown on Exhibit A attached hereto and made a part hereof and referred
to herein as “Expansion Area – Suite 300” on the date which is one hundred
twenty (120) calendar days immediately following the Effective Date of this
Amendment, which date is currently estimated to be April 1, 2011 (the “Expansion
Commencement Date – Suite 300”), subject to Force Majeure and Landlord Delay (as
such terms are defined below).

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 4

        

--------------------------------------------------------------------------------

Notwithstanding the foregoing, the Expansion Commencement Date – Suite 300 shall
be extended by one (1) day for (i) each day of Landlord’s Delay and (ii) each
day of Force Majeure. For purposes hereof, a “Landlord’s Delay” shall mean
(i) any stoppage of work arising from Landlord’s failure to pay the Project
Manager, contractors and/or subcontractors, as applicable, from the Construction
Allowance; provided, however, that such time frame shall not commence until the
thirty first (31st) calendar day following Landlord’s receipt of expenses in
connection with any of such payments since Landlord has thirty (30) calendar
days to make such payments and (ii) any time during which any Second Additional
Plans Review Period (as defined in the Work Letter (the “Work Letter”) attached
hereto and incorporated herein as Exhibit B) is in effect. In addition and for
purposes hereof, the term “Force Majeure” shall mean that Tenant shall not be
liable or responsible for, and there shall be excluded from the computation for
any such period of time, any delays due to strikes, riots, acts of God,
shortages of labor or materials, war, governmental laws, regulations, delay or
restrictions, provided that Tenant gives notice of any such delays in order for
both Landlord and Tenant to keep track of any extension of time to the Expansion
Commencement Date – Suite 300.

In addition, upon the Effective Date of this Amendment (the “Early Access
Date”), Landlord hereby grants Tenant early access to Expansion Area – Suite 300
in accordance with Section 6 of this Amendment and Section 5 of the Work Letter.

From and after the Expansion Commencement Date – Suite 300, and through the
remainder of the term of this Lease as extended pursuant to Section 3 of this
Amendment, Expansion Area – Suite 300 shall be added to and become a part of the
“Premises” governed by the Lease, as amended hereby, thereby increasing the area
of the Premises from thirty one thousand one hundred thirty-five
(31,135) rentable square feet to forty seven thousand seven hundred seventy –
seven (47,777) rentable square feet.

3.         First Renewal Term. On the Expansion Commencement Date – Suite 300,
the Term of the Lease for the Premises and Expansion Area – Suite 300 shall be
extended from such date which is estimated to be no later than April 1, 2011
(subject to Force Majeure and Landlord Delay) and continue with respect to the
entire Premises (including Expansion Area – Suite 300) for a minimum of seven
(7) years, expiring at 11:59 p.m. on March 31, 2018, unless earlier terminated
as provided in the Lease (the “First Renewal Term”). Section 5 of the Second
Amendment shall be deleted in its entirety and of no further force or effect.

Notwithstanding anything herein to the contrary, the Expansion Commencement Date
– Suite 300 shall be the date which is the earlier to occur of (i) one hundred
twenty (120) days following the Early Access Date subject to Force Majeure and
Landlord Delay or (ii) the date Tenant first occupies all or part of the
Premises for the conduct of business.

Within thirty (30) days following the occurrence of the Expansion Commencement
Date – Suite 300, Landlord and Tenant shall enter into an agreement in the form
attached hereto as Rider 1 confirming the Expansion Commencement Date-Suite 300
and the expiration of the First Renewal Term based upon the terms and provisions
of this Amendment.

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 5

        

--------------------------------------------------------------------------------

4.         Base Rent. Any Base Rent schedules for the Premises set forth in the
original Lease, the First Amendment and the Second Amendment with respect to the
First Renewal Term are hereby deleted in their entirety.

1.         From and after the Expansion Commencement Date – Suite 300, the Base
Rent payable by Tenant to Landlord during the First Renewal Term shall be as
follows:

 

Period from/to

   Monthly   Rate/SF of Rentable
Area    Annual

Expansion Commencement Date-Suite 300 through a period not to exceed eleven
(11) months

  

$0.00*

 

Free of Base Rent
and Tenant’s
Proportionate
Share of Basic
Costs

  

$0.00*

From any days remaining in March, 2012 (should the period above not include all
calendar days of March, 2012) through March 31, 2012

  

$63,702.66

 

$16.00

  

$764,432.00

April 1, 2012 - March 31, 2013

  

$65,693.37

 

$16.50

  

$788.320.44

April 1, 2013 - March 31, 2014

  

$67,684.08

 

$17.00

  

$812,208.96

April 1, 2014 - March 31, 2015

  

$69.674.79

 

$17.50

  

$836,097.48

April 1, 2015 - March 31, 2016

  

$71,665.50

 

$18.00

  

$859,986.00

April 1, 2016 - March 31, 2017

  

$73,656.21

 

$18.50

  

$883,874.52

April 1, 2017 - March 31, 2018

  

$75,646.92

 

$19.00

  

$907,763.04

Notwithstanding anything to the contrary contained in this Amendment, so long as
no Event of Default exists beyond any applicable cure period under the terms and
conditions of the Lease as of the date any monthly Base Rent would otherwise be
due and owing from the Expansion Commencement Date-Suite 300 for a period of
eleven (11) months of the First Renewal Term (collectively, the “Rent Abatement
Month(s)” and each a “Rent Abatement Month”), Tenant shall be entitled to a
credit (i) against monthly Base Rent in the amount of Sixty Three Thousand Seven
Hundred Two and 66/100 Dollars ($63,702.66) per month for each Rent Abatement
Month and (ii) in the amount of the monthly payment of Tenant’s Proportionate
Share of Basic Costs due and owing for each Rent Abatement Month. Said credits
shall be used solely to offset monthly Base Rent and Tenant’s Proportionate
Share of Basic Costs during each Rent Abatement Month and in no circumstances
shall Tenant be paid any amounts pursuant to this paragraph.

In the event Tenant has received written notice of an Event of Default and
Tenant has not taken measures to cure such Event of Default within any
applicable cure period under the terms and conditions of the Lease on the day
any installment of monthly Base Rent and Tenant’s Proportionate Share of Basic
Costs is due during any Rent Abatement Month, then, in such event, the rent
abatements as set forth above shall no longer be in effect and Tenant shall be
obligated, during the period of such uncured Event of Default, to pay the full
monthly Base Rent and Tenant’s Proportionate Share of Basic Costs.

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 6

        

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In the event of termination of the Lease as a result of an Event of Default of
Tenant under the terms and conditions of the Lease, Tenant shall pay to Landlord
an amount equal to the full amount of any free rent utilized by Tenant prior to
the termination of the Lease in addition to any other amounts recoverable by
Landlord pursuant to the terms of the Lease.

Except as may be otherwise expressly set forth herein, all other obligations of
Tenant under the Lease applicable to the Premises shall be applicable to
Tenant’s use and occupancy of the Premises during the First Renewal Term and all
such obligations are incorporated herein and made applicable to the Premises
during the First Renewal Term.

5.         Tenant’s Proportionate Share. From and after the Expansion
Commencement Date – Suite 300, Tenant’s Proportionate Share set forth in the
Basic Lease Information of the Lease is and shall be amended hereby to be 54.77
percent. Tenant’s Proportionate Share is calculated as follows: the rental area
of the Premises (as expanded hereby to include Expansion Area – Suite 300),
which is forty seven thousand seven hundred seventy-seven (47,777) rentable
square feet), divided by the total rentable square feet of the Building, which
is eighty seven thousand two hundred twenty eight (87,228), equals .5477 or
54.77 percent.

6.         Delivery and Condition of Premises. Landlord shall deliver exclusive
access to the Expansion Area – Suite 300 to Tenant upon the Early Access Date
and Expansion Area – Suite 300 shall be delivered to Tenant in “broom swept”
condition with all building systems connected to Expansion Area – Suite 300,
including, without limitation, HVAC, in good working condition.

As of the Early Access Date, Tenant shall be responsible for the cost of all
work required to comply with the retrofit requirements of the Americans with
Disabilities Act of 1990, and all rules, regulations, and guidelines promulgated
thereunder, as the same may be amended from time to time, necessitated by any
installations, additions, or alterations made in or to the Premises at the
request of or by Tenant or by Tenant’s use of the Premises and with respect to
the Corridor and the Vestibule Corridor (as such terms are defined herein)
(other than retrofit work whose cost has been particularly identified as being
payable by Landlord in an instrument signed by Landlord and Tenant), regardless
of whether such cost is incurred in connection with retrofit work required in
the Premises.

In addition, and as of the Effective Date of this Amendment, Landlord hereby
warrants and represents to Tenant that the Premises, the Building and the common
areas are in compliance with all laws, rules, regulations and ordinances,
including, without limitation, all environmental laws and the Americans with
Disabilities Act of 1990 (ADA) and that Landlord shall be responsible thereafter
for any legal requirements applicable to the Building and all common areas.

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 7

        

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7.         Tenant Insurance. The phrase “ISO occurrence form CG 00 01 01 96 (or
a substitute form providing equivalent coverage)” in the twelfth sentence of
Section 11(a) of the Lease is hereby deleted and replaced with “comprehensive
general liability in a form reasonably acceptable to Landlord.” The words, “and
Property Manager” shall be added as an additional insured party in the first
sentence of Section 11.(a)(1) of the Lease regarding the CGL. Landlord
acknowledges that the current insurance coverage is acceptable to Landlord.

8.         Renewal Option. The following replaces any previous renewal options
as provided in the Lease:

(a)         Tenant shall have the right to extend the existing Term of the Lease
(the “Renewal Option”) for two (2) consecutive three (3) year periods (each, a
“Renewal Period”) commencing on the expiration of the First Renewal Term (i.e.,
February 28, 2018) or the subsequent Renewal Period, as the case may be;
provided, however, that the Lease, as amended hereby, is in full force and
effect, and there is no Event of Default at the time the Renewal Option is
exercised or at the commencement of the Renewal Period.

(b)         The Renewal Option shall be exercised by Tenant, if at all, by
delivery of written notice to Landlord (the “Renewal Notice”) on or before the
date which is no less than nine (9) months but not more than twelve (12) months
prior to the expiration of the Term, as extended, if applicable. If Tenant fails
to timely deliver the respective Renewal Notice as set forth herein, Tenant
shall have waived the Renewal Option and shall have no further right to extend
such Term.

(c)         Landlord’s and Tenant’s rights and obligations during the Renewal
Period shall be upon the same terms and conditions as are contained in the
Lease, as amended hereby, except as otherwise specifically set forth below:

(i)         The annual Base Rent (described below) during the applicable Renewal
Period shall be at the rate per annum per square foot of rentable area in the
Premises, equal to ninety-five percent (95%) of a fair market rate for
comparable space in the Building and in other buildings in the Northwest Austin
Class A rental market as of the date the applicable Renewal Period is to
commence, taking into account, among other things, the Construction Allowance,
the specific provisions of the Lease that will remain constant, the location and
quality of the Building, all concessions which are being offered renewal tenants
and the size and location of the space (collectively, the “Market Rental Rate”).

(ii)         Landlord shall promptly notify Tenant in writing of its
determination of the Market Rental Rate (“Landlord’s Notice”), which shall be no
later than ten (10) business days after its receipt of the Renewal Notice. On or
before the date which is the tenth (10th) business day following Tenant’s
receipt of Landlord’s Notice (the “Objection Period”), Tenant may, at Tenant’s
option, either (i) accept, in writing, the Market Rental Rate set forth in
Landlord’s Notice or (ii) object to Landlord’s proposed Market Rental Rate and
propose, in writing, an alternative Market Rental Rate for the Renewal Period
(“Tenant’s Objection”). If Tenant delivers Tenant’s Objection and Tenant

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 8

  

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and Landlord are unable to agree on a mutually acceptable Market Rental Rate,
then Tenant, within ten (10) business days following the delivery of Tenant’s
Objection to Landlord, shall have the option of either (x) revoking its election
to extend the Term of the Lease for the Renewal Period or (y) requesting binding
arbitration. In the event Tenant shall revoke its notice to extend the Term of
the Lease, the Lease shall expire per its terms.

(iii)         In the event Tenant requests the binding arbitration, the Market
Rental Rate shall be determined by binding arbitration, as follows:

(d)         Not later than fifteen (15) business days following the delivery of
Tenant’s Objection to Landlord, Landlord and Tenant shall each appoint one
(1) arbitrator who shall, by profession, be a real estate appraiser (with the
professional designation of M.A.I., or, if M.A.I. ceases to exist, a comparable
designation from an equivalent professional appraisal organization) who shall
have been active in (i) appraisals of commercial properties in the Austin, Texas
market area and (ii) office lease market rental arbitration, throughout the ten
(10) year period immediately preceding the date of such appointment by either
Landlord or Tenant and who shall not have previously been employed by either
Landlord or Tenant. The determination of the arbitrators shall be limited solely
to the issue of whether Landlord’s or Tenant’s submitted Market Rental Rate for
the Premises is the closest to the Market Rental Rate for the Premises as
determined by the arbitrators, taking into account all relevant elements as
determined by the arbitrators, and whichever amount is closest to the amount
determined by the arbitrators shall be the final Market Rental Rate.

(e)         The two (2) arbitrators so appointed shall, on or before the seventh
(7th) calendar day following the appointment of the last appointed arbitrator,
agree upon and appoint a third (3rd) arbitrator with the same qualifications as
set forth in Subsection (d) above.

(f)         The three (3) arbitrators shall, on or before the twentieth
(20) calendar day following the appointment of the third arbitrator, deliver a
decision in writing to Landlord and Tenant stating the determined Market Rental
Rate.

(g)         The decision of the majority of the three (3) arbitrators shall be
binding upon Landlord and Tenant and judgment upon such decision may be entered
in by any court having jurisdiction over Landlord and Tenant.

(h)         If the two (2) arbitrators fail to timely appoint a third
(3rd) arbitrator, both arbitrators shall be promptly dismissed and Landlord and
Tenant shall, on or before the twentieth (20th) calendar day following such
dismissal, each select and appoint one (1) new arbitrator possessing the
qualifications described in Subsection (d) above. Such new arbitrators shall
promptly follow the procedures outlined in this Section 8.

(i)         Notwithstanding the foregoing, if either Landlord or Tenant fails to
timely appoint an arbitrator and such failure to appoint an arbitrator is not
cured on or before the fifth (5th) business day following receipt by such
failing party of written demand to do so by the other party (which other party
shall have appointed its arbitrator prior to sending such written demand), then
the arbitrator appointed by the party sending such demand shall, acting alone,
reach a decision on the applicable Market Rental Rate and notify Landlord and
Tenant in writing thereof at which time such arbitrator’s decision will be
binding on Landlord and Tenant.

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 9

        

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(j)         The cost of arbitration shall be paid by Landlord if the Market
Rental Rate set forth in Tenant’s Objection is selected and shall be paid by
Tenant if the Market Rental Rate set forth in Landlord’s Notice is selected.

9.         Expansion Options. Subject to the terms and conditions set forth in
this Amendment, Tenant shall have two (2) options (collectively, the “Expansion
Options” and each an “Expansion Option”) to lease the additional space
(“Expansion Space A” or “Expansion Space B,” collectively, the “Additional
Space”) as follows:

(a)         In the event that Tenant notifies Landlord in writing, that it
desires to lease the remaining portion of vacant space on the third (3rd) floor
of the Building which is contiguous to the Premises as shown on the floor plan
attached hereto and incorporated herein as Schedule 1 and/or up to approximately
eight thousand (8,000) to eight thousand four hundred (8,400) contiguous
rentable square feet on the first (1st) floor of the Building (the “Expansion
Space A”), Landlord and Tenant agree that Tenant shall have the right (the
“Expansion Option A”) to lease all or a portion of Expansion Space A on the
terms and conditions set forth herein. To exercise the Expansion Option A,
Tenant shall notify Landlord in writing (“Tenant’s Expansion Notice A”) on or
before ninety (90) days prior to the projected commencement date of such
expansion (but in no event later than April 1, 2012). The terms and conditions
for Expansion Space A shall be the same as the terms of this Amendment,
including the Work Letter, with respect to Expansion Space – Suite 300 with the
exception that (i) any Construction Allowance and rental abatement shall be
prorated based upon the numerator being the remaining number of months in the
First Renewal Term and the denominator being the total number of months in the
First Renewal Term and (ii) Landlord will allow Tenant to have a minimum of
ninety (90) days to complete its tenant improvements on Expansion Space A. The
Expansion Space A shall be added to and become part of the Premises for all
purposes of the Lease and shall be subject to all of the terms and conditions
contained in the Lease, subject to the provisions of this Amendment.

(b)         In the event that Tenant notifies Landlord in writing between
July 1, 2012 and April 1, 2013 only, that it desires to lease an additional
fifteen thousand (15,000) to twenty thousand (20,000) rentable square feet
located in the Project (the “Expansion Space B”), Landlord and Tenant agree that
Tenant shall have the right (the “Expansion Option B”) to lease the Expansion
Space B on the terms and conditions set forth herein. Landlord shall use
reasonable commercial efforts to determine the exact location and building in
the Project for Expansion Space B and/or whether Expansion Space B shall be in
multiple locations to comprise the total rentable square feet that Tenant wishes
to expand its Premises. Landlord shall use its commercially reasonable best
efforts to provide Tenant with Expansion Space B that is as close to the
Premises as possible. To exercise the Expansion Option B, Tenant shall notify
Landlord in writing (“Tenant’s Expansion Notice B”) on or before ninety
(90) days prior to the projected commencement date of such expansion (but in no
event later than April 1, 2013). The terms and conditions for Expansion Space B
shall be the same as the terms of this Amendment, including the Work Letter,
with respect to Expansion Space – Suite 300 with the exception that (i) any
Construction Allowance and rental abatement shall be prorated based upon the
numerator being the remaining number of months in the First Renewal Term and the
denominator being the total

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 10

        

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number of months in the First Renewal Term and (ii) Landlord will allow Tenant
to have a minimum of ninety (90) days to complete its tenant improvements on
Expansion Space B. The Expansion Space B shall be added to and become part of
the Premises for all purposes of the Lease and shall be subject to all of the
terms and conditions contained in the Lease, subject to the provisions of this
Amendment. Tenant’s expansion option with respect to Expansion Space B is
contingent upon Tenant fully exercising Expansion Option A for a minimum of the
remaining vacant space on the third (3rd) floor of the Building.

(c)         Notwithstanding Sections 10(a) and (b) above, the following
paragraph sets forth various other third party lease rights as to the Additional
Space in existence prior to the date of this Amendment: NONE.

(d)         It is a condition to Tenant’s exercise of the Expansion Options that
(i) at the time of delivery of Tenant’s Expansion Notice A or B, as applicable,
and at the time of the commencement of the Term with respect to the Expansion
Space A or B, as the case may be, there shall not then exist an Event of Default
by Tenant under this Lease which has not been cured within any applicable cure
or grace period, (ii) the Lease has not been assigned and no space in the
Premises has been sublet, and (iii) Tenant is occupying the Premises for the
conduct of business as set forth in the Lease. Any termination of this Lease or
termination of Tenant’s right of possession shall terminate all of Tenant’s
rights to any Expansion Option. Any Expansion Option may be exercised only by
and is personal to Tenant and Tenant’s Affiliates and may not be exercised by or
for the benefit of any other party.

(e)         Within thirty (30) days after delivery of Tenant’s Expansion Notice
A or B, as applicable, Landlord shall prepare an amendment to this Lease, which
amendment shall incorporate and add such Expansion Space A or B, as the case may
be, to the Premises and include any other changes as are necessary to the
computation of the monthly Base Rent and the calculation of Tenant’s
Proportionate Share. Landlord and Tenant shall use good faith efforts to
negotiate and execute such amendment within sixty (60) calendar days after
Tenant’s receipt of the first draft of the amendment. Such Expansion Space A or
B, as the case may be, shall be leased for the Term upon the terms and
conditions provided for in this Lease, except for such changes as set forth in
the amendment described above. If Tenant does not execute and deliver the
amendment to this Lease to Landlord on or before the sixtieth (60th) calendar
day following Tenant’s receipt thereof, neither Landlord nor Tenant shall have
any obligation to the other under this Section.

10.         Right of First Refusal. Section 6 to the Second Amendment entitled
“Right of First Refusal” is hereby deleted and replaced with the following:

(a)         Upon the expiration of the Expansion Options (as defined herein) as
set forth in Section 10 of this Amendment and on the condition that (i) a bona
fide offer to lease is for a term which extends no later than the Term of the
Lease (including the Renewal Period, if any) and (ii) Tenant continues to lease
the entire Premises, as amended hereby, during the term of the bona fide offer
to lease, Tenant shall have an on-going right of first refusal (the “Right of
First Refusal”) to lease all or any part of any available space of the Building
(such portion being referred to as the “ROFR Space”). After Landlord notifies
Tenant in writing of a bona fide offer from a prospective tenant (the “Offer”)
to lease all or any part of the ROFR Space, Tenant shall

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 11

        

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have ten (10) days (the “Acceptance Period”) to exercise its right hereunder by
delivering written notice to Landlord. If Tenant fails to notify Landlord of its
election on or before the expiration of the Acceptance Period, Tenant shall be
deemed to have waived the Right of First Refusal with respect to the ROFR Space.
If Landlord desires to lease the ROFR Space on terms that are at least equal to
or more favorable to a third party by five percent (5%) or more from those
contained in the bona fide offer declined by Tenant, Landlord shall first offer
the space on such different terms (the “Revised Offer”) to Tenant and Tenant
shall then have an additional ten (10) day period (the “Additional Acceptance
Period”) to exercise its right hereunder by delivering written notice to
Landlord. If Tenant fails to notify Landlord of its election on or before the
expiration of the Additional Acceptance Period, Tenant shall be deemed to have
waived the Right of First Refusal with respect to the ROFR Space.

(b)         Upon any exercise by Tenant of the Right of First Refusal, Landlord
and Tenant shall immediately execute an amendment to the Lease in substantially
the form of this Amendment, including the Work Letter, stating the addition of
the ROFR Space to the Premises and incorporating the terms and conditions as set
forth in the Offer or the Revised Offer, as applicable. If Tenant exercises the
Right of First Refusal, Landlord will deliver such space to Tenant ten
(10) calendar days after either: (i) the date upon which the leasehold
improvements to be constructed in the ROFR Space have been substantially
completed in accordance with the construction drawings for such leasehold
improvements or (ii) the issuance of a certificate of occupancy or other
occupancy permit, if required by applicable law, for the ROFR; provided however
that such delivery shall occur on or before the date which is six (6) calendar
months prior to the expiration of the Term, as extended, if applicable.

(c)         Tenant may not exercise its rights under this Section 10 if an Event
of Default exists beyond any applicable cure period. Tenant’s rights under this
Section 10 shall terminate if the Lease, as amended hereby, or Tenant’s right to
possession of the Premises is terminated. Tenant’s rights specified in this
Section 10 are personal to the named Tenant set forth in the signature page of
this Amendment or an Affiliate, and may not be assigned to or exercised by any
other person or entity.

(d)         Notwithstanding anything to the contrary contained herein, the Right
of First Refusal is only valid if Tenant continues to lease the entire Premises,
as amended hereby, through or beyond the last day of the term of the Offer or
the Revised Offer, as applicable.

11.         Termination Option.     Landlord hereby grants to Tenant a one
(1) time option (“Termination Option”) to terminate this Lease effective at the
end of the sixtieth (60th) calendar month following the Expansion Commencement
Date – Suite 300 (the “Termination Effective Date”) subject to the following
provisions.

(a)         Termination Notice. The Termination Option shall be exercisable by
Tenant by written notice (“Termination Notice”) to Landlord of Tenant’s election
to exercise the Termination Option, such notice to be received by Landlord no
later than twelve (12) calendar months prior to the Termination Effective Date.
If Tenant fails to deliver to Landlord the Termination Notice on or before said
date, the Termination Option shall lapse and Tenant shall have no further right
to terminate this Lease. Effective on the date the Termination Notice is
received by Landlord, all options granted pursuant to Section 9 (captioned Right
of First Refusal) and Section 8 (captioned Renewal Option) shall be deemed
waived and of no further force or effect.

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 12

        

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(b)         In consideration of Landlord’s agreement to allow the termination of
this Lease as set forth above, Tenant shall pay to Landlord the amount of EIGHT
HUNDRED FOUR THOUSAND EIGHT HUNDRED EIGHTY FOUR AND 34/100 DOLLARS ($804,884.34)
as a termination fee (the “Termination Fee”).

The Termination Fee shall be paid by Tenant to Landlord contemporaneously with
the Termination Notice. The Termination Fee shall be liquidated damages and not
be deemed to be a penalty. If the Termination Fee is not timely paid by Tenant
to Landlord, the Termination Option shall lapse and Tenant shall have no right
to terminate this Lease as provided herein.

(c)         Survival of Obligations. In the event Tenant has satisfied the
provisions of subsection (a) and (b) above, then, as of the Termination
Effective Date, all obligations of the parties shall cease and terminate in the
same manner as upon expiration of the Term; provided, however, that Tenant shall
remain liable hereunder for all obligations and liabilities which accrue under
the Lease through the Termination Effective Date, including, without limitation,
Tenant’s obligation to pay Monthly Base Rent and Tenant’s Proportionate Share of
Basic Costs and Taxes. Any such amounts not due and payable prior to the
Termination Effective Date, but which relate to the period prior to the
Termination Effective Date, shall be paid by Tenant to Landlord within thirty
(30) days of Tenant’s receipt of an invoice therefor from Landlord.

(d)         No Default. Tenant may exercise the Termination Option, and any
attempted exercise thereof shall be effective, only if at the time of Tenant’s
exercise of the Termination Option and on the Termination Effective Date
(i) this Lease is in full force and effect and (ii) no Event of Default by
Tenant exists pursuant to any term or condition of this Lease.

(e)         Not Transferable. Tenant hereby acknowledges and agrees that the
Termination Option contained in this Section shall be deemed to be personal to
Tenant and its Affiliates and if Tenant subleases, assigns or otherwise
transfers any interest hereunder prior to the exercise of the Termination
Option, such option shall be deemed to be null, void and of no further force or
effect.

12.         Signage. Landlord, at Landlord’s expense, will provide Building
standard suite signage for the exterior of Tenant’s main entrance to the
Premises, and on the Building directory as well as standard monument signage at
the main entrance to the Building. Landlord shall be responsible for the cost of
construction of the monument signage.

As long as Tenant leases a minimum of 41,135 rentable square feet in the Project
(the “Minimum Requirement”) and is not in default under the terms of the Lease
beyond any applicable cure periods, Tenant may have the right to install
exclusive top-Building exterior, back-lit signage (the “Exterior Signage”) at
two (2) mutually agreeable locations to both Landlord and Tenant subject to the
terms of this Section 12. The design, color and size shall be

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 13

        

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subject to the prior written approval of Landlord, not to be unreasonably
withheld or delayed, and any applicable governmental authorities. The Exterior
Signage shall be consistent and in keeping with the standards of buildings of
comparable size and location and of comparable first class office buildings in
Austin, Texas at the time in question. The Exterior Signage (i) must comply with
all Laws (as hereinafter defined), including zoning Laws and building codes;
(ii) shall be installed in a good and workman-like manner; (iii) costs,
including, the costs of all permits, fabrication, maintenance, insurance and
other costs associated with the Exterior Signage will be the sole responsibility
of Tenant; and (iv) if, after the Exterior Signage is installed, Tenant falls
below the Minimum Anchor Requirement, at Landlord’s reasonable election, Tenant
shall remove the Exterior Signage on or before the expiration of earlier
termination of the Term and (v) upon any removal of the Exterior Signage, Tenant
shall repair all damage to the Building resulting from such removal.

The term “Laws” shall mean all laws, ordinances, statutes, codes, ordinances,
rules, regulations, other requirements, orders, rulings or decisions adopted or
made by any governmental body, agency, department or judicial authority having
jurisdiction over the Project, the Premises or Tenant’s activities at the
Premises and any covenants, conditions or restrictions of record which affect
the Project.

13.         Controllable Operating Expenses. The following paragraphs shall
replace the second paragraph of Section 4(b) of the Lease:

Notwithstanding anything herein to the contrary, Landlord and Tenant agree that
for purposes of calculating Tenant’s Proportionate Share of Basic Costs,
Tenant’s Proportionate Share of Basic Costs for calendar year 2011 only shall
not exceed Ten and 42/100 Dollars ($10.42) per rentable square foot (“2011
Expense Stop”).

For calendar years 2012 and thereafter, Tenant shall not be responsible for
increases in Controllable Expenses (defined below) in excess of six percent
(6%) per year on a non-cumulative, non-compounding basis over the Controllable
Expenses for the preceding year, provided that year 2012 will be based on the
2011 Expense Stop.

In addition, management fees shall be capped not to exceed five percent (5%) of
the annual rental income received. Landlord agrees to protect any substantial
tax increases.

All Basic Costs which are categorized as not within the control of the Landlord
shall be deemed “Non-Controllable Expenses,” which shall include, but not be
limited to taxes, utilities (to the extent not contractually set), insurance,
and expenses that increase as a result of minimum wage rate increases.

All Basic Costs which are within the control of Landlord and are not
Non-Controllable Expenses shall be deemed “Controllable Expenses.”

In addition, and as set forth in Section 4 of this Amendment, Tenant shall not
be responsible for Tenant’s Proportionate Share of Basic Costs during the Rent
Abatement Months.

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 14

        

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14.         Parking. As of the Expansion Commencement Date – Suite 300,
Section 3 of the First Amendment relating to Parking is hereby deleted and
replaced with the following:

Landlord shall provide to Tenant at no cost, and so long as there is no Event of
Default, with five (5) parking spaces per one thousand (1,000) rentable square
feet (including visitor and handicap) for the Premises, as contracted or
expanded, if applicable, in the parking areas associated with the Building
during the Term, as extended, if applicable, subject to such terms, conditions
and regulations as are from time to time applicable to patrons of the Parking
Facilities. All of such parking spaces shall be undesignated spaces in the
unreserved parking area associated with the Building with the exception of five
(5) covered, reserved spaces (collectively, the “Parking Spaces”). The Parking
Spaces will be free of charge for the entire Term, as extended, if applicable.

15.         Landlord’s Notice Address. Landlord’s notice address as set forth in
the Basic Lease Information of the Lease is hereby deleted and replaced with the
following:

MLIC Asset Holdings LLC

c/o CB Richard Ellis, Inc.

6500 River Place Blvd. Building IV, Suite 106

Austin, Texas 78730

with a copy to the following:

MLIC Asset Holdings LLC

P.O. Box 2346

Morristown, New Jersey 07962

with an additional copy to the following:

MLIC Asset Holdings LLC

c/o Metropolitan Life Insurance Company

Two Lincoln Centre

5420 LBJ Freeway, Suite 1310

Dallas, TX 75240

Attn:     Director, Real Estate Investments

16.         Deleted Provisions. Effective as of Expansion Commencement Date –
Suite 300, the following provisions and Exhibits to the Lease are hereby
deleted: Exhibit I – Expansion Option; Exhibit D – Tenant Finish Work, Section 5
to the Second Amendment (Renewal Option) and Section 6 to the Second Amendment
(Right of First Refusal).

17.         OFAC. Landlord advises Tenant hereby that the purpose of this
Section is to provide to Landlord information and assurances to enable Landlord
to comply with the law relating to OFAC.

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 15

        

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Tenant hereby represents, warrants and covenants to Landlord, either that
(i) Tenant is regulated by the SEC, FINRA or the Federal Reserve (a “Regulated
Entity”) or (ii) neither Tenant nor any person or entity that directly or
indirectly (a) controls Tenant or (b) has an ownership interest in Tenant of
twenty – five percent (25%) or more, appears on the list of Specially Designated
Nationals and Blocked Persons (“OFAC List”) published by the Office of Foreign
Assets Control (“OFAC”) of the U.S. Department of the Treasury.

If, in connection with this Amendment, there is one or more Guarantors of
Tenant’s obligations under the Lease as amended by this Amendment, then Tenant
further represents, warrants and covenants either that (i) any such Guarantor is
a Regulated Entity or (ii) neither Guarantor nor any person or entity that
directly or indirectly (a) controls such Guarantor or (b) has an ownership
interest in such Guarantor of twenty – five percent (25%) or more, appears on
the OFAC List.

Tenant covenants, during the term of the Lease, to provide to Landlord
information reasonably requested by Landlord including without limitation,
organizational structural charts and organizational documents which Landlord may
deem to be necessary (“Tenant OFAC Information”) in order for Landlord to
confirm Tenant’s continuing compliance with the provisions of this Section.
Tenant represents and warrants that the Tenant OFAC Information it has provided
or to be provided to Landlord or Landlord’s broker in connection with the
execution of this Amendment is true and complete.

18.         Brokers Fee and Commission. Tenant and Landlord represent to each
other that, except for CB Richard Ellis, Inc. (“CBRE”) and Jones Lang
LaSalle-Brokerage, Inc., Tenant nor Landlord has dealt with any real estate
broker, sales person, or finder in connection with this Amendment, and no such
person initiated or participated in the negotiation of this Amendment, or showed
the Premises to Tenant. Tenant hereby agrees to indemnify, protect, defend and
hold Landlord and its agents, harmless from and against any and all liabilities
and claims for commissions and fees arising out of a breach of the foregoing
representation. Landlord hereby agrees to indemnify, protect, defend and hold
Tenant and its agents, harmless from and against any and all liabilities and
claims for commissions and fees arising out of a breach of the foregoing
representation.

19.         UPS/Backup Generator. Tenant may be permitted to have one (1) or two
(2) UPS/Backup Generators placed on the Project provided that the following
terms and conditions are satisfied: (i) the location and size of each generator
is subject to reasonable approval of Landlord; (ii) use is subject to rules and
regulations as reasonably approved by Landlord; (iii) Tenant providing Landlord
with complete design drawings of each generator; and (iv) Tenant providing
evidence to Landlord upon Landlord’s reasonable request that such generators and
any substance used in connection with the maintenance or use complies with all
Laws.

 

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20.         Roof Rights/HVAC. Tenant shall be permitted to install (i) an
additional HVAC system and any related components (collectively, “Additional
HVAC”) to service Expansion Area – Suite 300 at a mutually agreeable location on
the roof of the Building and (ii) a supplemental telecommunications antenna and
related components, such as cables and lines required to secure such antenna to
the roof (collectively, “Additional Antenna Equipment”), at a mutually agreeable
location on the roof of the Building, provided the following terms and
conditions are satisfied:

(i) Upon Tenant’s decision to install either an Additional HVAC and/or
Additional Antenna Equipment (collectively referred to as the “Installation”),
Tenant shall submit its plans (the “Roof Plans”) to Landlord, which plans shall
include, but not be limited to, a mutually agreeable roof access plan, at which
time Landlord shall, on or before the tenth (10th) business day following its
receipt of the Roof Plans (the “Plan Review Period”), advise Tenant whether the
Roof Plans are acceptable or unacceptable to Landlord in Landlord’s reasonable
discretion. If Landlord has concluded that the Roof Plans are unacceptable,
Landlord shall provide notice to Tenant in writing detailing the reasons why the
Roof Plans are unacceptable. If Landlord fails to advise Tenant in writing on or
before the expiration of the Plan Review Period, Tenant shall provide Landlord a
second notice (the “Second Notice”) stating, among other things, the following
in bold lettering: “THAT FAILURE TO RESPOND TO THIS SECOND NOTICE SHALL BE
DEEMED APPROVAL OF THE ROOF PLANS.” If Landlord fails to advise Tenant in
writing on or before the expiration of five (5) business days from Landlord’s
receipt of the Second Notice, then the Roof Plans shall be deemed approved by
Landlord, and Tenant may proceed to complete the Installation in accordance with
the Roof Plans.

(ii) Upon Landlord’s approval of the Roof Plans as set forth in Section 20(i)
and subject to the reasonable supervision of Landlord, Landlord hereby grants to
Tenant, pursuant to the terms of this Section 20 and without any additional
documentation, a non-exclusive license to enter into and upon the roof and/or
other areas required to be entered into in order to install the Additional HVAC
and/or the Additional Antenna Equipment for the period of time required to
install such Additional HVAC and/or Additional Antenna Equipment. In addition,
upon Tenant giving Landlord twenty-four (24) hours prior written notice,
Landlord hereby grants Tenant, pursuant to the terms of this Section 20 and
without any additional documentation, a non-exclusive license, subject to
Landlord’s reasonable supervision, to enter into and upon the roof and/or other
areas required to be entered into in order to inspect, maintain, repair and
replace the Additional HVAC and the Additional Antenna Equipment, at Tenant’s
sole cost and expense, which license shall be during the Term of this Lease only
and shall be conditioned upon Tenant not being in default under this Lease
beyond any applicable cure periods.

(iii) The Additional HVAC and Additional Antennae Equipment must be shielded
from public view in a manner reasonably acceptable to Landlord and shall not
interfere with any of the Building’s systems or their maintenance, nor interfere
with any

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 17

        

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other antennae or HVAC system, if any, previously installed by any other
existing tenant in the Project as of the date of Tenant’s installation of its
Additional HVAC and/or Additional Antenna Equipment; provided, however, if after
Tenant installs its Additional HVAC and Additional Antennae Equipment and Tenant
decides to relocate such Additional HVAC and/or Additional Antennae Equipment,
then at the time of such relocation, Tenant’s relocated Additional HVAC and/or
Additional Antennae Equipment may not interfere with any other HVAC system or
antennae previously installed by another existing tenant in the Project as of
the date of Tenant’s relocation. All switchgear and other equipment related to
the Additional HVAC and Additional Antennae Equipment but not of integral part
thereto shall be located on the Premises and all plans for such installation are
subject to Landlord’s approval, which approval shall not be unreasonably
withheld or delayed.

(iv) The appearance of the Additional HVAC and Additional Antennae Equipment and
any related components located on the roof shall be consistent with standards
for comparable buildings in the Project, be shielded from view, not interfere
with building systems or their maintenance, will not interfere with any other
HVAC system or antennae installed by any other tenant in the Project.

(v) The specifications of the Additional HVAC must be reasonably approved by
Landlord, including, but not limited to, any weight bearing limitations, any
size limitations, any waterproofing requirements or other reasonable limitations
by Landlord. Tenant shall bear all costs and expenses related to the
installation, maintenance and operation of such Additional HVAC throughout the
Term of the Lease. In addition, and as a result of such Additional HVAC, Tenant
shall pay Landlord throughout the Term of the Lease, at rates fixed by Landlord
for all tenants in the Building, charges for all utilities furnished to the
Premises or to the roof or any other location of the Additional HVAC, including
expenses for the installation of any utility lines, meter and fixtures, if
necessary in Landlord’s reasonable judgment.

(vi) Any installation on the roof shall be subject to Landlord’s approval, which
shall not be unreasonably withheld or delayed.

(vii) Tenant shall, at its own expense, obtain and maintain any licenses or
permits which may be required as to Additional HVAC and the Additional Antenna
Equipment. TENANT SHALL INDEMNIFY LANDLORD FOR ALL CLAIMS RELATED TO THE
INSTALLATION, MAINTENANCE, REPAIR, USE OR REMOVAL OF THE ADDITIONAL HVAC AND THE
ADDITIONAL ANTENNA EQUIPMENT. THE INDEMNITY SET FORTH IN THIS SECTION 20(VII)
SHALL SURVIVE THE TERMINATION OF THIS LEASE WITH RESPECT TO ANY CLAIMS OR
LIABILITY ACCRUING OR ARISING PRIOR TO THE TERMINATION OF THIS LEASE.

(viii) During the Term of the Lease, Tenant shall be responsible for (i) the
cost of repair of any damage to the roof or the Building resulting from Tenant’s
such use of the roof, including any damage resulting from the elements or water
damage resulting from roof leaks, and (ii) causing any repairs resulting from
Tenant’s such use of the roof.

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 18

        

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In addition, the parties hereto agree that upon Tenant’s surrendering of the
Premises due to termination or expiration of the Lease, Tenant shall have the
right to remove the Additional HVAC and/or the Additional Antenna Equipment from
the Premises and Tenant shall repair all damage caused by Tenant’s removal of
such items.

21.         Compliance with Laws. Notwithstanding anything herein to the
contrary, in any circumstance in which Tenant is taking a portion of a suite
such as in the case of an expansion option or right of first refusal as set
forth herein, and there is any installation or removal of a demising wall in
order to expand into a portion or remainder of space in a suite, such
installation and/or removal shall be at Tenant’s sole cost and expenses and
shall be in compliance with all applicable governmental laws, codes, rules, and
regulations.

22.         Demising Wall and Corridor/Vestibule. Tenant shall (1) construct a
new wall and/or modify the existing wall to create a demising wall in the
location shown on Exhibit A (the “Demising Wall”) to separate Expansion
Space-Suite 300 from the remainder of the original Suite 300 in the Building;
(2) make related modifications of the heating, ventilating and air conditioning
system, sprinkler system, electrical system, lighting system, water system and
any other applicable system to the extent necessary in order to separate
Expansion Space –Suite 300 from the remaining area of the original Suite 300 in
the Building and (3) paint, patch or touch up the ceiling, affected walls or
floor covering to the extent necessary as a result of the construction described
in this Section 22. The costs for such work related to the Demising Wall shall
be at Tenant’s cost and expense and such costs may be paid out of a portion of
the Construction Allowance.

In addition, Tenant shall install a corridor (the “Corridor”) in the location as
shown on Exhibit A and a vestibule corridor (the “Vestibule Corridor”) in the
location as shown on Exhibit A at Landlord’s sole cost and expense, which amount
shall (i) not exceed Thirty Six Thousand and No/100 Dollars ($36,000.00) (the
“Corridor Amount”) and (ii) be reimbursed to Tenant as set forth in this
paragraph. Upon execution of this Amendment, Tenant shall submit appropriate
documentation relating to the construction of the Corridor and the Vestibule
Corridor to Landlord for reimbursement of all costs in connection with the
construction and installation of the Corridor and the Vestibule Corridor up to
the Corridor Amount, and such reimbursement shall be made by Landlord to Tenant
on or before the fifteenth (15th) calendar following Landlord’s receipt of such
documentation.

23.         Estoppel. Both Landlord and Tenant hereby confirm and ratify the
Lease as amended and hereby acknowledge, to each of their respective knowledge,
that neither party is in default under the Lease as of the Effective Date. In
addition, Landlord represents and warrants to Tenant that Tenant that Landlord
is not aware of any fact or circumstance that would prohibit Tenant from timely
occupying Expansion Area – Suite 300.

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 19

        

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24.         Entire Agreement; Amendment. This Amendment taken together with the
Lease, together with all exhibits, schedules, riders and addenda to each,
constitutes the full and complete agreement and understanding between the
parties hereto and shall supersede all prior communications, representations,
understandings or agreements, if any, whether oral or written, concerning the
subject matter contained in this Amendment and the Lease, as so amended, and no
provision of the Lease as so amended may be modified, amended, waived or
discharged, in whole or in part, except by a written instrument executed by all
of the parties hereto.

25.         Authority. Each party represents and warrants to the other that it
has full authority and power to enter into and perform its obligations under
this Amendment, that the person executing this Amendment is fully empowered to
do so, and that no consent or authorization is necessary from any third party.

26.         Counterparts. This Amendment may be executed in duplicates or
counterparts, or both, and such duplicates or counterparts together shall
constitute but one and the same instrument. Each duplicate and counterpart shall
be equally admissible in evidence, and each original shall fully bind each party
who has executed it.

27.         Continuation. Expect as expressly modified herein, the Lease
continues in full force and effect with respect to the Premises. In the event of
any conflict between the Lease and this Amendment, the Amendment shall control.

28.         HVAC System and Use. Tenant shall have access to the Premises, as
amended hereby, seven (7) days per week and twenty four (24) hours per day.
Landlord shall supply HVAC service during normal business hours which shall be
7:00 A.M. to 6 P.M., Monday through Friday, and 8:00 A.M. to 1 P.M. on
Saturdays, except for holidays. Any additional expense for use of the HVAC after
hours shall be at Landlord’s actual cost, which cost shall not exceed Thirty
Five and No/Dollars ($35.00) per hour per floor during the First Renewal Term.

[Signature Page Follows]

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 20

        

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IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to be
executed as of the Effective Date.

 

LANDLORD:

   

TENANT:

MLIC ASSET HOLDINGS LLC, a Delaware

limited liability company

   

SHORETEL, INC., a Delaware corporation

By:

 

Transmountain Land & Livestock

Company, a Montana corporation,

   

By:

 

            /s/ Mike Healy            

 

 

its Manager

 

   

Name: Mike Healy

Its: CFO

 

By:

 

            /s/ Kurt W. Day            

       

        Kurt W. Day

       

        Vice President

     

 

THIRD AMENDMENT TO LEASE AGREEMENT – Page 21

        

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EXHIBIT A

EXPANSION AREA- SUITE 300

LOGO [g145814g67y51.jpg]

 

Exhibit A

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EXHIBIT B

WORK LETTER

1.         Space Plan and Expansion Work. Tenant has prepared or shall prepare a
space plan of Expansion Area – Suite 300 (the “Plan”) depicting the construction
work (the “Expansion Work”) which is to be performed in order to prepare
Expansion Area – Suite 300 for Tenant’s use and occupancy. All of the Expansion
Work shall be performed by Tenant, at Tenant’s expense (subject to the
Construction Allowance as provided in Section 3 below).

Landlord and Tenant hereby acknowledge and agree that they have mutually agreed
upon a list of three (3) general contractors as follows: (i) Dimensions
Contracting; (ii) IE2; (iii) SpawMaxwell and (iv) Sabre Commercial
(collectively, the “Contractors”). In addition, the parties hereto agree that on
or before the tenth (10th) calendar date following the Effective Date of this
Amendment, Tenant will deliver a “Fee and General Conditions Bid as to the
General Contractor” (the “Bid”) to each of the Contractors. Within five
(5) business following receipt of all of the Contractors’ responses to the Bid
(“Contractor Response” and collectively the “Contractor Responses”), Tenant
shall review each Contractor Response and select a general contractor based on
the Contactor Responses. In addition, Landlord and Tenant hereby acknowledge
that Tenant shall use (x) “HMG & Associates” as the MEP engineer, (y) “JLL
Project and Development Services” (the “Project Manager”) for the management of
the design and construction of the Expansion Work and (z) “AO3” for the interior
design of Expansion Area - Suite 300.

Tenant shall cause the Expansion Work to be constructed in a good and
workmanlike manner in Expansion Area - Suite 300 (subject to adjustment as
hereinafter provided). In addition, Landlord agrees to cooperate with Tenant to
the extent necessary for Tenant to obtain any certificates of occupancy.

Tenant shall have the sole responsibility for compliance of the space plan and
the Expansion Work within the Premises with all Laws, including the Americans
with Disabilities Act of 1990 (42 U.S.C. §12101 et seq.) and regulations and
guidelines promulgated thereunder, as all of the same may be amended and
supplemented from time to time (collectively referred to herein as the “ADA”).
In addition, and as to the Premises only, Tenant shall be responsible for
requirements under Title I of the ADA relating to Tenant’s employees. The
approval of the Plans or calculations included therein by Landlord shall not
constitute an indication, representation or certification by Landlord that the
Plans or calculations therein are in compliance with the Laws.

2.         Expansion Working Drawings. Tenant shall cause to be prepared the
final architectural, mechanical (including heating, ventilating and air
conditioning), electrical, plumbing, structural plans and specifications
(collectively, the “Expansion Working Drawings”) necessary to complete the
Expansion Work. Tenant shall submit the Expansion Working Drawings to Landlord
upon their completion, at which time Landlord shall, on or before the fifth
(5th) business day following its receipt of the Expansion Working Drawings (the
“Review Period”), advise Tenant whether the Expansion Working Drawings are
acceptable or unacceptable to Landlord in Landlord’s reasonable discretion. If
Landlord has concluded that the Expansion Working Drawings are unacceptable,
Landlord shall provide notice to Tenant in

 

Exhibit B-1

--------------------------------------------------------------------------------

writing detailing the reasons why the Expansion Working Drawings are
unacceptable. If Landlord fails to advise Tenant in writing on or before the
expiration of the Review Period, then the Expansion Working Drawings shall be
deemed approved by Landlord, and Tenant may proceed to complete the Expansion
Work in accordance with the Expansion Working Drawings.

Should any additional Expansion Working Drawings or any type of additional or
revised plans (collectively, the “Additional Plans”) be submitted to Landlord
during Tenant’s construction of the Expansion Work, Tenant shall submit the
Additional Plans to Landlord upon their completion, at which time Landlord
shall, on or before the fifth (5th) business day following its receipt of the
Additional Plans (the “Additional Plans Review Period”), advise Tenant whether
the Additional Plans are acceptable or unacceptable to Landlord in Landlord’s
reasonable discretion. If Landlord has concluded that the Additional Plans are
unacceptable, Landlord shall provide notice to Tenant in writing detailing the
reasons why the Additional Plans are unacceptable. If Landlord fails to advise
Tenant in writing on or before the expiration of the Additional Plans Review
Period, Tenant shall provide Landlord a second notice (the “Second Plans
Notice”) stating, among other things, the following in bold lettering: “THAT
FAILURE TO RESPOND TO THIS SECOND NOTICE SHALL BE DEEMED APPROVAL OF THE
ADDITIONAL PLANS.” If Landlord fails to advise Tenant in writing on or before
the expiration of the second (2nd) business day following Landlord’s receipt of
the Second Plans Notice (the “Second Additional Plans Review Period”), then the
Additional Plans shall be deemed approved by Landlord, and Tenant may proceed to
complete the Expansion Work in accordance with the Additional Plans.

3.         Construction Allowance. Landlord and Tenant hereby agree that
Landlord shall provide Tenant with an allowance in the amount of Seven and
No/100 Dollars ($7.00) per rentable square foot of the Premises and Thirty Four
and No/100 Dollars ($34.00) per rentable square foot of Expansion Area - Suite
300 (collectively, the “Construction Allowance”), to be applied to, among other
things, (i) the cost of the design and construction of the Expansion Work,
(ii) management fees, (iii) the cost of the Plans, (iv) the cost of the
Expansion Working Drawings and (v) the costs associated with updating the lobby
of Expansion Area - Suite 300 (the “Lobby”), which costs shall include, but not
be limited to, re-painting and re-carpeting the Lobby. Notwithstanding the
immediately preceding sentence, a portion of the Construction Allowance up to
but not exceeding the amount of Five and No/100 Dollars ($5.00) per rentable
square foot may be used by Tenant for the costs of networking, furniture
installation and soft costs or toward the payment of Base Rent due. An amount
not to exceed available funds from the Construction Allowance shall be paid
directly and timely by Landlord to the Project Manager, contractors and/or
sub-contractors, as applicable, but in any event, Landlord shall make at least
one (1) payment per month to the contractors and/or sub-contractors, as
applicable, and such payment shall be made on or before the thirtieth
(30th) calendar day following Landlord’s receipt of such expenses. All costs and
expenses in excess of the Construction Allowance, which have been approved in
advance by Tenant in Tenant’s sole discretion, shall be paid for by Tenant
within thirty (30) days of Tenant’s approval of such excess costs and expenses.

The Construction Allowance shall be interchangeable between the Premises and the
Expansion Premises – Suite 300. Tenant shall be permitted to utilize the
Construction Allowance for reimbursement of Tenant’s out of pocket costs on
previous tenant improvement

 

Exhibit B-2

--------------------------------------------------------------------------------

projects in the Premises. Upon execution of this Amendment, Tenant shall submit
appropriate documentation for said reimbursement to Landlord, and such
reimbursement shall be made by Landlord to Tenant on or before the fifteenth
(15th) calendar following Landlord’s receipt of such documentation.

Landlord or its affiliate shall cooperate and work closely with the Project
Manager to (i) supervise the Expansion Work on behalf of Landlord, (ii) make
disbursements required to be made to the contractor, (iii) act as a liaison
between the contractor and Tenant and (iv) coordinate the relationship between
the Expansion Work, the Building, and the Building’s systems. The parties hereto
agree that there will be no construction supervision fee payable to Landlord or
CBRE by Tenant in connection with the Expansion Work.

Any alteration (included but not limited to creating a multi tenant corridor) on
the third (3rd) floor of the Building to convert the third floor from a single
to multi tenant floor, if applicable, shall be paid for by the Construction
Allowance.

In event Tenant does not utilize the services of the Project Manager and elects
to manage the Expansion Work itself, Landlord or its agent shall be paid a
supervision or overhead fee for its role in reviewing and approving the design
and construction of the Expansion Work in the amount of one percent (1%) of the
Construction Allowance for the Expansion Premises – Suite 300.

In addition to the Construction Allowance, (i) Landlord agrees to pay up to $.15
per rentable square foot of the Expansion Premises – Suite 300 to Tenant’s
architect for a preliminary test fit which shall not be deducted from the
Construction Allowance and (ii) Landlord shall provide Tenant with a moving
allowance in the amount of Two and No/100 Dollars ($2.00) per rentable square
foot of the Expansion Premises – Suite 300.

4.         Information Submission. To the extent not shown on the Expansion
Working Drawings and the Additional Plans, as applicable, Tenant shall supply
Landlord with all information concerning Tenant’s requirements with respect to
the construction of Expansion Area - Suite 300 as reasonably requested by
Landlord and within a reasonable time of receiving the request from Landlord. In
the event Tenant fails to supply the necessary information within a reasonable
time of receiving the request from Landlord, Landlord may prohibit the
commencement and/or completion of the Expansion Work until such information has
been provided and reasonably approved by Landlord within the time frames as set
forth in Section 2 above, which may include the Second Additional Plans Review
Period, as applicable.

5.         Tenant’s Entry Prior to Expansion Commencement Date – Suite 300. Upon
the Effective Date of this Amendment, Landlord shall (i) deliver Expansion Area
- Suite 300 to Tenant in accordance with Section 6 of this Amendment and
(ii) permit Tenant and/or its agents or laborers, at Tenant’s sole risk, to
enter Expansion Area - Suite 300 in order for Tenant to perform the Expansion
Work in Expansion Area - Suite 300 and to construct the Corridor and the
Vestibule Corridor.

 

Exhibit B-3

--------------------------------------------------------------------------------

Such entry prior to Expansion Commencement Date – Suite 300 shall be deemed to
be under and subject to all of the terms, covenants and conditions of the Lease,
as amended hereby, and Tenant shall comply with all of the provisions of the
Lease, as amended hereby, which are the obligations or covenants of Tenant,
other than the obligation to pay Rent and except as provided in this Work
Letter. In the event that Tenant, its agents or laborers incur any third party
charges from Landlord in connection with the Expansion Work, including but not
limited to charges for use of construction or hoisting equipment on the
Premises, then such charges shall be an obligation of Tenant and shall
constitute Rent due under the Lease to the extent such amount when added to the
cost of the design and construction of the Expansion Work exceeds the
Construction Allowance; provided, however, that if such costs are in connection
with the construction of the Corridor and the Vestibule Corridor, then Landlord
shall pay all such costs and expenses up to the Corridor Amount. Tenant’s entry
into Expansion Area - Suite 300 solely for the purposes set forth in this
Section 5 shall not be deemed to be occupancy of Expansion Area - Suite 300.

 

Exhibit B-4

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SCHEDULE 1

THIRD FLOOR

LOGO [g145814g77a72.jpg]

 

Schedule 1

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RIDER 1

EXPANSION COMMENCEMENT DATE AGREEMENT

MLIC ASSET HOLDINGS LLC, a Delaware limited liability company (“Landlord”) and
SHORETEL, INC., a Delaware corporation, have entered into a certain Third
Amendment to Lease Agreement dated             , 2010 (the “Third Amendment”).

W I T N E S S E T H:

WHEREAS, Landlord and Tenant wish to confirm and memorialize the Expansion
Commencement Date – Suite 300 and expiration date of the First Renewal Term as
provided for in Section 3 of the Third Amendment.

NOW, THEREFORE, in consideration of these presents and the mutual covenants
hereby contained in the Lease, including the Third Amendment, Landlord and
Tenant agree as follows:

 

 

1.

Unless otherwise defined herein, all capitalized terms shall have the same
meaning ascribed to them in the Third Amendment.

 

 

2.

The Expansion Commencement Date- Suite 300 of the Third Amendment is
            , 2011.

 

 

3.

The expiration date of the First Renewal Term is March 31, 2018.

 

 

4.

Tenant hereby confirms the following:

 

 

(a)

Tenant has accepted possession of Expansion Area – Suite 300 pursuant to the
terms and provisions of the Third Amendment and the Lease;

 

 

(b)

the Premises is 47,777 rentable square feet; and

 

 

(c)

the Lease, including the Third Amendment, is in full force and effect.

5.         Except as expressly modified hereby, all terms and provisions of the
Lease, including the Third Amendment, are hereby ratified, republished and
revived and shall remain in full force and effect and binding on the parties
hereto.

--------------------------------------------------------------------------------

6.         The Lease, including the Third Amendment, and this Expansion
Commencement Date Agreement (this “Agreement”) contain all of the terms,
covenants, conditions and agreements between the Landlord and the Tenant
relating to the subject matter herein. No prior other agreements or
understandings pertaining to such matters are valid or of any force and effect.

IN WITNESS WHEREOF, Landlord and Tenant have caused their respective names to be
subscribed to this Agreement and the execution and delivery of this Agreement
has been duly authorized by the parties.

 

LANDLORD:

   

TENANT:

MLIC ASSET HOLDINGS LLC, a Delaware

limited liability company

   

SHORETEL, INC., a Delaware corporation

By:

 

Transmountain Land & Livestock Company, a Montana

corporation,

its Manager

   

By:

           

Name: 

     

    By:

       

Its:

       

        Kurt W. Day

         

        Vice President

     

 

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