Exhibit 10.23

FIFTH AMENDMENT TO LEASE

THIS FIFTH AMENDMENT TO LEASE (this “Amendment”) is entered into by and between
WCOT/HILL SAN CLEMENTE, LP, a Delaware limited partnership (“Landlord”), as
successor-in-interest to 3900 San Clemente, L.P. (“Original Landlord”) and
BAZAARVOICE, INC., a Delaware corporation (“Tenant”).

WHEREAS, Original Landlord and Tenant entered into that certain Office Lease
Agreement dated as of July 15, 2009 (the “Lease Agreement”) pursuant to which
Tenant leased from Landlord certain space in that building known as 3900 San
Clemente, and located at 3900 N. Capital of Texas Highway, Austin, Texas 78746
(the “Building”), as more particularly described therein;

WHEREAS, the Lease Agreement has been amended by that certain Acceptance of
Premises Memorandum dated October 21, 2009, that certain First Amendment to
Lease Agreement dated as of January 19, 2010, that certain Second Amendment to
Lease dated as of February 8, 2010, that certain Third Amendment to Lease dated
as of March 30, 2010, that certain Acceptance of Premises Memorandum for
Suite 250 dated May 12, 2010, that certain Fourth Amendment to Lease (the
“Fourth Amendment”) dated as of May 11, 2011, and that certain Acceptance of
Premises Memorandum for Suite 260 dated August 30, 2011 (the Lease Agreement, as
amended, the “Lease”), whereby Tenant currently leases from Landlord
approximately 94,086 square feet of Agreed Rentable Area (the “Current
Premises”) consisting of the areas known as (i) Suites 250 and 300 on the second
(2nd) and third (3rd) floors of the Building, collectively containing
approximately 76,804 square feet of Agreed Rentable Area (collectively, “Suites
250 and 300”) and (ii) Suite 260 located on the second (2nd) floor of the
Building, containing approximately 17,282 square feet of Agreed Rentable Area
(“Suite 260”);

WHEREAS, Tenant desires to lease additional space in the Building containing
approximately 19,282 square feet of Agreed Rentable Area (the “Third Expansion
Space”), consisting of approximately 11,874 square feet of Agreed Rentable Area
located on the fourth (4th) floor of the Building and approximately 7,408 square
feet of Agreed Rentable Area on the first (1st) floor of the Building, all as
shown on Exhibit A attached hereto;

WHEREAS, the Term of the Lease is currently scheduled to expire on January 31,
2015 with respect to Suites 250 and 300 and on October 31, 2015 with respect to
Suite 260, and Tenant desires to extend the Term of the Lease with respect to
the entire Premises, including Suites 250 and 300, Suite 260, and the Third
Expansion Space, to expire coterminously on December 31, 2015;

WHEREAS, subject to the terms and conditions set forth below, Landlord has
agreed to lease the Third Expansion Space to Tenant and to extend the Term as
set forth herein; and

WHEREAS, Landlord and Tenant desire to amend the Lease to reflect their
agreements as to the terms and conditions governing Tenant’s lease of the Third
Expansion Space and the extension of the Term of the Lease.

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NOW, THEREFORE, in consideration of the premises and the mutual covenants
between the parties herein contained, Landlord and Tenant hereby agree as
follows:

1. Premises.

(a) Effective as of the Third Expansion Date (hereinafter defined), Landlord
shall lease the Third Expansion Space to Tenant and Tenant shall lease the Third
Expansion Space from Landlord, and the Premises, as defined in the Lease, shall
mean, collectively, the Current Premises and the Third Expansion Space.
Accordingly, effective as of the Third Expansion Date, the “Agreed Rentable
Area”, as defined in Item 2 of the Basic Lease Provisions, shall be amended to
mean 113,368 square feet. The Third Expansion Space shall be subject to all the
terms and conditions of the Lease except as expressly modified herein and except
that Tenant shall not be entitled to receive any allowances or free rent in
connection with the Third Expansion Space granted with respect to the Current
Premises unless such concessions are expressly provided for herein with respect
to the Third Expansion Space.

(b) As used herein, the “Third Expansion Date” shall mean the earlier to occur
of (i) June 1, 2012 or (ii) the date of Substantial Completion with respect to
the Third Expansion Space, which date of Substantial Completion shall be subject
to adjustment for any Tenant Delays (as defined and determined in accordance
with the terms of the Work Letter attached hereto as Exhibit B) and delivery of
possession of the Third Expansion Space in vacant, broom clean condition. Upon
Substantial Completion of the Third Expansion Space, Landlord and Tenant shall
execute an Acceptance of Premises Memorandum in substantially the form of
Exhibit E attached to the Lease. If Tenant occupies any portion of the Third
Expansion Space, other than for the purposes of installing Tenant’s property as
described in Section 1(c) below, without executing the Acceptance of Premises
Memorandum, Tenant shall be deemed to have accepted such Third Expansion Space
for all purposes, subject to the terms of the Lease and this Amendment as
otherwise applicable to the Premises (e.g., Tenant’s express rights to object to
defects). Effective as of the Third Expansion Date, Exhibit A attached hereto
shall be added to and incorporated into Exhibit A to the Lease.

(c) Tenant shall have the right to access the Third Expansion Space
approximately two (2) weeks prior to Substantial Completion of the Tenant’s
Improvements (as defined in Exhibit B attached hereto) in the Third Expansion
Space for the sole purpose of installing furniture, trade fixtures,
telecommunications or other personal property of Tenant and otherwise preparing
the Third Expansion Space for occupancy, provided that Tenant coordinates such
access with Landlord’s general contractor and does not materially interfere with
the construction of the Tenant’s Improvements. Such access shall be subject to
all of the terms and conditions of the Lease, and except for the cost of above
Building standard services requested by Tenant in writing (e.g. after hours
HVAC), Tenant shall not be required to pay Rent or other remuneration with
respect to the Third Expansion Space for the period of time prior to the Third
Expansion Date during which Tenant performs such work in the Third Expansion
Space.

2. Term. The Term of the Lease with respect to the entire Premises, including
the Current Premises and the Third Expansion Space, is hereby extended to expire
on December 31, 2015, unless sooner terminated in accordance with the terms of
the Lease, and the “Expiration Date”, as defined in the Lease, is hereby amended
to mean December 31, 2015.

 

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3. Basic Rent.

(a) Commencing on the Third Expansion Date, in addition to the Basic Rent
payable with respect to the Current Premises, Tenant shall pay Basic Rent for
the Third Expansion Space as follows:

 

Rental Period

   Rate Per Square
Foot of Agreed
Rentable Area    Basic
Annual Rent    Basic
Monthly Rent

06/01/12 — 05/31/13

   $20.50    $395,280.96    $32,940.08

06/01/13 — 05/31/14

   $21.00    $404,922.00    $33,743.50

06/01/14 —12/31/15

   $21.50    $414,563.04    $34,546.92

Landlord and Tenant acknowledge that the foregoing schedule of Basic Rent for
the Third Expansion Space is based on the assumption that the Third Expansion
Date will occur on June 1, 2012. If the actual Third Expansion Date is a date
earlier than June 1, 2012, then the 06/01/12 date in the foregoing schedule
shall be amended automatically to the actual Third Expansion Date; however, none
of the other dates in such schedule shall be amended. Further, if the actual
Third Expansion Date is earlier than June 1, 2012, then notwithstanding the
foregoing amendment of the 06/01/12 date, Tenant shall not be required to pay
Basic Rent or Additional Rent with respect to the Third Expansion Space for the
period commencing on the Third Expansion Date and ending on the earlier of
(i) 30 days after the Third Expansion Date and (ii) May 31, 2012.

(b) Commencing February 1, 2015, in addition to the Basic Rent payable for the
Third Expansion Space and Suite 260, Tenant shall pay Basic Rent for Suites 250
and 300 as follows:

 

Rental Period

   Rate Per Square
Foot of Agreed
Rentable Area      Basic
Annual Rent      Basic
Monthly Rent  

02/01/15 — 12/31/15

   $ 21.50       $ 1,651,286.04       $ 137,607.17   

(c) Commencing November 1, 2015, in addition to the Basic Rent payable for the
Third Expansion Space and Suites 250 and 300, Tenant shall pay Basic Rent for
Suite 260 as follows:

 

Rental Period

   Rate Per Square
Foot of Agreed
Rentable Area      Basic
Annual Rent      Basic
Monthly Rent  

11/01/15 — 12/31/15

   $ 21.50       $ 371,562.96       $ 30,963.58   

(d) All such Basic Rent shall be payable in accordance with the terms of the
Lease, as amended hereby.

 

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4. Tenant’s Pro Rata Share Percentage. Commencing on the Third Expansion Date,
Tenant shall pay Additional Rent with respect to the Third Expansion Space in
accordance with the terms of the Lease, as amended hereby. Accordingly,
effective as of the Third Expansion Date, “Tenant’s Pro Rata Share Percentage”,
as defined in Item 4 of the Basic Lease Provisions, shall be amended to mean
45.1403%.

5. Acceptance of Third Expansion Space. Tenant acknowledges that Tenant has
inspected the Third Expansion Space and, except for latent defects discovered
and reported to Landlord by Tenant within 180 days after the Third Expansion
Date and subject to Landlord’s completion of its obligations under the Work
Letter attached hereto as Exhibit B, Tenant hereby accepts the Third Expansion
Space (including the suitability of the Third Expansion Space for the Permitted
Use) for all purposes. By taking possession of the Third Expansion Space, Tenant
shall be deemed to have accepted the Third Expansion Space and agreed that the
Third Expansion Space is in good order and satisfactory condition, with no
representation or warranty by Landlord as to the condition of the Third
Expansion Space or the Building or suitability thereof for Tenant’s use, except
as otherwise expressly set forth in the Lease. EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH IN THE LEASE, NO WARRANTIES, EXPRESS OR IMPLIED, ARE MADE REGARDING THE
CONDITION OR SUITABILITY OF THE THIRD EXPANSION SPACE ON THE THIRD EXPANSION
DATE. FURTHER, TO THE EXTENT PERMITTED BY LAW, TENANT WAIVES ANY IMPLIED
WARRANTY OF SUITABILITY OR OTHER IMPLIED WARRANTIES THAT LANDLORD WILL MAINTAIN
OR REPAIR THE THIRD EXPANSION SPACE OR ITS APPURTENANCES EXCEPT AS MAY BE
CLEARLY AND EXPRESSLY PROVIDED IN THE LEASE.

6. Renewal Option. Rider 1 to the Lease and Exhibits C and D to the Fourth
Amendment are hereby deleted in their entireties. As Tenant’s sole renewal
option under the Lease, as amended hereby, Tenant shall have the option to renew
the Term of the Lease, with respect to the entire Premises (as expanded by this
Amendment) only, in accordance with the terms of Exhibit C attached hereto.

7. Deletion of Termination Option. Rider 4 to the Lease is hereby deleted in its
entirety and shall have no further force or effect. Tenant shall have no
Termination Option under the Lease, as amended hereby.

8. Security Deposit. In addition to the Security Deposit and 260 Security
Deposit currently required under the Lease, Tenant shall pay to Landlord
contemporaneously with its execution and delivery of this Amendment the amount
of $518,277.00 (the “Third Expansion Space Security Deposit”), which will be
held as security for Tenant’s performance of the terms of the Lease, as amended
hereby. The Third Expansion Space Security Deposit shall be subject to all the
terms of the Lease applicable to the Security Deposit, including those allowing
the Security Deposit to provided in the form of a letter of credit (references
to the Third Expansion Space Security Deposit shall also include references to
the letter of credit that Tenant may deliver in lieu of the cash Third Expansion
Space Security Deposit); provided that the Third Expansion Space Security
Deposit shall not be subject to reduction as set forth in the last paragraph of
Article 3 of the Lease or the second paragraph of Section 8 of the Fourth
Amendment with respect to the Security Deposit and the 260 Security Deposit,
respectively. For example, if the Third Expansion Space Security Deposit is
provided through an increase in the existing Letter of Credit and Tenant is
entitled to reduce the Letter of Credit as of the last day of

 

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the forty-eighth (48th) Lease Month of the Term as provided in the last
paragraph of Article 3 of the Lease, then the amount of such Letter of Credit
would reduce to $1,576,277 (i.e. $300,000 for the reduced existing Security
Deposit, plus $758,000 for the original 260 Security Deposit, plus $518,277.00
for the original Third Expansion Space Security Deposit).

Notwithstanding anything herein to the contrary, provided Tenant is not in
default under the Lease as defined in Section 13.1 of the Lease and with respect
to defaults for which Tenant has a notice and cure period, no notice of default
has been given as of the effective date of the reduction of the Third Expansion
Space Security Deposit, Tenant shall have the right to reduce the amount of the
Third Expansion Space Security Deposit to $214,000.00 effective upon the
occurrence of both of the following: (i) the last day of the thirty-sixth
(36th) full calendar month following the Third Expansion Date and (ii) the date
upon which Tenant’s audited financial statements shall reflect Tenant having
(x) a tangible net worth (as determined in accordance with generally accepted
accounting principles) of at least $100,000,000, and (y) cash and cash
equivalents in an amount of not less than $50,000,000. In the event Tenant is in
default under the Lease as defined in Section 13.1 or with respect to any
defaults for which Tenant has a notice and cure period, a default notice has
been given to Tenant, as of the effective date of the reduction, if any, of the
Third Expansion Space Security Deposit, the same shall not reduce and Tenant
shall maintain the Third Expansion Space Security Deposit in place without
reduction. In the event Tenant is maintaining a cash Third Expansion Space
Security Deposit (i.e., if Tenant has not elected to provide a letter of credit
in lieu thereof) at the time of a reduction of the Third Expansion Space
Security Deposit as described above, then the excess Third Expansion Space
Security Deposit then held by Landlord shall be returned to Tenant within thirty
(30) days after Landlord’s receipt of Tenant’s written request therefor, after
deducting any amounts then payable by Tenant. From and after the date Tenant is
entitled to a reduction of the Third Expansion Space Security Deposit as set
forth above, Landlord shall not be entitled to draw under the letter of credit
evidencing the Third Expansion Space Security Deposit more than the reduced
amount, even if the existing letter of credit held by Landlord has a face amount
greater than such reduced amount.

9. Parking. Tenant’s parking rights with respect to the Current Premises shall
continue in accordance with the terms of the Lease. In addition, commencing on
the Third Expansion Date and continuing so long as the Lease, as amended hereby,
remains in effect with respect to the Third Expansion Space, Tenant or persons
designated by Tenant shall have the right (but not the obligation) to rent, at
no additional charge during the Term (as extended by this Amendment), (i) on an
unreserved and non-exclusive basis sixty-nine (69) parking spaces in or on the
roof of the Garage, and (ii) on a reserved basis eight (8) parking spaces in
locations designated by Landlord in or on the roof of the Garage.
Notwithstanding anything contained in the Lease, except as set forth in the
preceding sentence, Tenant shall not be entitled to any additional parking
spaces in connection with the addition of the Third Expansion Space to the
Premises under the Lease. Tenant’s use of such additional spaces shall be
governed by the terms of the Lease, except as otherwise provided herein.

10. Expansion Options. Rider 3 to the Lease, as amended by Section 10 of the
Fourth Amendment, and Exhibit E to the Fourth Amendment, are hereby deleted in
their entireties. Tenant shall have a right of first offer with respect to all
available space in the Building, upon the terms and conditions set forth in
Exhibit D attached hereto.

 

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11. Sublease from Houston International Insurance Group, Ltd.

(a) Landlord and Houston International Insurance Group, Ltd., as successor by
merger to Southwest Insurance Partners, Inc. (“Prospective Sublessor”) are
parties to that certain Office Lease Agreement dated February 9, 2009 (the
“Suite 200 Lease”) whereby Prospective Sublessor currently leases from Landlord
approximately 7,510 square feet of Agreed Rentable Area known as Suite 200 on
the second (2nd) floor of the Building (“Suite 200”). The Suite 200 Lease will
expire by its terms on December 31, 2014. Tenant has advised Landlord that
Tenant is in negotiations with Prospective Sublessor to sublease the entire
Southwest Premises from Prospective Sublessor for the remainder of the term of
the Suite 200 Lease (the “Proposed Sublease”). Under the terms of the Suite 200
Lease, Landlord’s consent is required for Prospective Sublessor to enter into
the Proposed Sublease. Landlord hereby consents to the Proposed Sublease;
further provided, however, that (a) Landlord shall not be obligated to release
Prospective Sublessor from its obligations under the Suite 200 Lease (except as
provided in Section 11(c) below), and (b) the Proposed Sublease shall be subject
to all of the terms and provisions of the Suite 200 Lease, except that Riders 1,
2, 3, 4, and 5 to the Suite 200 Lease shall not apply to Tenant as the sublessee
under the Proposed Sublease.

(b) If, with Landlord’s consent, Tenant enters into the Proposed Sublease, then
upon the expiration or earlier termination of the Suite 200 Lease and the
Proposed Sublease, Tenant shall have the right to expand the Premises under this
Lease to include Suite 200 (the “Sublease Conversion Right”) by giving written
notice thereof to Landlord no later than December 31, 2013 in the event of the
natural expiration of the Suite 200 Lease, or within three (3) business days of
Tenant’s receipt of written notice from Landlord of any earlier termination of
the Suite 200 Lease. If Tenant properly exercises the Sublease Conversion Right,
then effective January 1, 2015 (if the Suite 200 Lease is not terminated prior
to its scheduled expiration date) or the day after the earlier termination of
the Suite 200 Lease, if applicable, Suite 200 shall be considered a part of the
Premises, and all of the terms and conditions of the Lease, as amended hereby,
shall apply to Suite 200, including the Expiration Date, except that (i) no
allowances or concessions granted to Tenant in connection with the Premises
shall apply to Suite 200, it being agreed that Landlord shall not be obligated
to perform any leasehold improvement work in Suite 200, and Suite 200 shall be
accepted by Tenant in its condition and as-built configuration existing on
January 1, 2015, and (ii) Tenant shall pay Basic Rent for Suite 200 for the
period from January 1, 2015 (or such earlier date as Suite 200 is considered
part of the Premises) through December 31, 2015 at the annual rate of $21.50 per
square foot of Agreed Rentable Area in Suite 200.

(c) If Tenant exercises its Sublease Conversion Right, Landlord and Tenant will
enter into an amendment to the Lease reflecting (i) the addition of Suite 200 to
the Premises, (ii) the increase in Basic Annual Rent and Additional Rent payable
under this Lease, (iii) the increase in Tenant’s Pro Rata Share Percentage
(calculated with the increase in the total Agreed Rentable Area based upon the
Agreed Rentable Area of Suite 200), (iv) Landlord’s express waiver of any
obligation of Prospective Sublessor or Tenant to remove any Installations (as
defined in the Suite 200 Lease) upon the expiration or earlier termination of
the Suite 200 Lease, and Landlord’s express waiver of any obligation of Tenant
to remove any Installations (as defined in the Suite 200 Lease) existing as of
the commencement of the Proposed Sublease other than data and phone cabling upon
the expiration or earlier termination of the Lease, as amended

 

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hereby, and (v) such other amendments as are necessary to fully effectuate the
provisions of this Section 11; provided however, Tenant’s lease of Suite 200 on
the terms set forth herein shall be effective notwithstanding the parties’
failure to enter into such Lease amendment.

12. Brokers. Tenant warrants that it has had no dealings with any real estate
broker or agent in connection with the negotiation of this Amendment other than
The Aleshire Company (“Tenant’s Broker”) and HPI Real Estate and Investments
(“Landlord’s Broker”), and that it knows of no other real estate brokers or
agents who are or might be entitled to a commission in connection with this
Amendment. Landlord agrees to pay a commission to Tenant’s Broker and to
Landlord’s Broker pursuant to separate written agreements between Landlord and
such brokers. Tenant agrees to indemnify and hold Landlord harmless from and
against any liability or claim arising in respect to any brokers or agents
claiming a commission by, through, or under Tenant in connection with this
Amendment other than Tenant’s Broker. Landlord agrees to indemnify and hold
Tenant harmless from and against any liability or claim arising in respect to
any brokers or agents claiming a commission by, through, or under Landlord in
connection with this Amendment.

13. Defined Terms. Except as defined differently herein, all capitalized terms
used in this Amendment shall have the meanings ascribed to them under the Lease.

14. Authority. Tenant represents to Landlord as follows: (i) Tenant is a duly
formed and validly existing corporation under the laws of the State of Delaware,
(ii) Tenant has and is qualified to do business in Texas, (iii) Tenant has the
full right and authority to enter into this Amendment, and (iv) each person
signing on behalf of Tenant was and continues to be authorized to do so.

15. Exhibit. Each exhibit attached hereto is made a part hereof for all
purposes.

16. Ratification of Lease. Except as amended hereby, the Lease shall remain in
full force and effect in accordance with its terms and is hereby ratified. In
the event of a conflict between the Lease and this Amendment, this Amendment
shall control.

17. Entire Agreement. This Amendment, together with the Lease, contains all of
the agreements of the parties hereto with respect to any matter covered or
mentioned in this Amendment or the Lease, and no prior agreement, understanding
or representation pertaining to any such matter shall be effective for any
purpose.

18. Successors and Assigns. The terms and provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

19. Severability. A determination that any provision of this Amendment is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision hereof and any determination that the application of any
provision of this Amendment to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to any other persons or circumstances.

20. Governing Law. This Amendment shall be governed by the laws of the State of
Texas.

 

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21. Submission of Amendment Not Offer. The submission by Landlord to Tenant of
this Amendment for Tenant’s consideration shall have no binding force or effect,
shall not constitute an option, and shall not confer any rights upon Tenant or
impose any obligations upon Landlord irrespective of any reliance thereon,
change of position or partial performance. This Amendment is effective and
binding on Landlord only upon the execution and delivery of this Amendment by
Landlord and Tenant.

22. Lease Not a Construction Contract. Landlord and Tenant acknowledge and agree
that the Lease, as amended hereby, including all exhibits a part thereof, is not
a construction contract or an agreement collateral to or affecting a
construction contract.

Signature Page to Follow.

 

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IN WITNESS WHEREOF, the parties have executed this Amendment as of this 27th day
of February.

 

    LANDLORD    

WCOT/HILL SAN CLEMENTE, LP,

a Delaware limited partnership

    By:  

HPI Real Estate Management, Inc.,

a Texas corporation, its authorized agent

Approved:      

        /s/ Richard Paddock

    By:  

/s/ Richard E. Anderson

Richard Paddock     Name: Richard E. Anderson     Title: President     TENANT  
 

BAZAARVOICE, INC.,

a Delaware corporation

    By:  

/s/ Stephen Collins

    Name: Stephen Collins     Title: CFO

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EXHIBIT A

FLOOR PLAN FOR THIRD EXPANSION SPACE

 

LOGO [g362121g08q89.jpg]

 

A-1

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LOGO [g362121g28u49.jpg]

 

A-2

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EXHIBIT B

WORK LETTER

1. Plans.

1.1 Space Plan. Within twenty (20) business days after the date of this
Amendment, Tenant shall deliver to Landlord a space plan for the Third Expansion
Space prepared by Tenant’s space planner, at Tenant’s expense (subject to
reimbursement through the Finish Allowance). Landlord will approve or disapprove
in writing the space plan within three (3) business days after receipt from
Tenant and if disapproved, Landlord shall provide Tenant and Tenant’s space
planner with specific reasons for disapproval. If Landlord fails to approve or
disapprove the space plan on or before the end of such three (3) business day
period, Landlord shall be deemed to have approved the last submitted space plan.
Landlord will not disapprove any element of the space plan that is generally
consistent with the improvements and finishes in the Current Premises. The
foregoing process shall be repeated until Landlord has approved (which shall
include deemed approval) the space plan (such space plan, when approved by
Landlord and Tenant, is herein referred to as the “Space Plan”). Landlord shall
not unreasonably withhold its approval of the Space Plan.

1.2 Compliance With Disability Acts. Tenant shall provide Tenant’s space planner
and/or architect as applicable, with all information needed to cause the
construction of Tenant’s Improvements to be completed such that Tenant, the
Third Expansion Space and Tenant’s Improvements (as constructed) will be in
compliance with the Disability Acts. Tenant shall indemnify and hold harmless
Landlord from and against any and all claims, liabilities and expenses
(including, without limitation, reasonable attorney’s fees and expenses)
incurred by or asserted against Landlord by reason of or in connection with any
violation of the Disability Acts by Tenant and/or Tenant’s Improvements or the
Third Expansion Space not being in compliance with the Disability Acts, except
with respect to any non-compliance of the Third Expansion Space existing on the
date of this Amendment. The foregoing indemnity shall not include any claims,
liabilities or expenses (including reasonable attorneys’ fees and expenses)
arising out of the negligence, gross negligence or willful misconduct of
Landlord or Landlord’s employees, agents or contractors.

1.3 Construction Plans. Within sixty (60) days after written approval (or deemed
approval) of the Space Plan by Landlord and Tenant, a licensed architect and MEP
engineer selected by Tenant and reasonably acceptable to Landlord, at Tenant’s
expense (subject to reimbursement through the Finish Allowance), will prepare
construction plans (such construction plans, when approved in writing (or deemed
approved) by Landlord and Tenant, and all changes and amendments thereto agreed
to by Landlord and Tenant in writing, are herein called the “Construction
Plans”) for all of Tenant’s improvements requested pursuant to the Space Plan
(all improvements required by the Construction Plans are herein called “Tenant’s
Improvements”), including complete detail and finish drawings for partitions,
doors, reflected ceiling, telephone outlets, electrical switches and outlets and
Building standard heating, ventilation and air conditioning equipment and
controls. Within five (5) business days after construction plans are delivered
to Landlord, Landlord shall approve (which approval shall not

 

B-1

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be unreasonably withheld) or disapprove same in writing and if disapproved,
Landlord shall provide Tenant and Tenant’s architect specific reasons for
disapproval. If Landlord disapproves of the submitted construction plans, Tenant
shall cause Tenant’s architect to revise the construction plans to incorporate
Landlord’s comments and re-submit the revised construction plans to Landlord
within five (5) business days after Landlord’s notice of disapproval. Within
three (3) business days after the revised construction plans are delivered to
Landlord, Landlord shall approve (which approval shall not be unreasonably
withheld) or disapprove same in writing and if disapproved, Landlord shall
provide Tenant and Tenant’s architect specific reasons for disapproval. The
foregoing process shall continue until the construction plans are approved by
Landlord; provided that if Landlord fails to respond in the five (5) or any
three (3) business day period, as applicable, Landlord shall be deemed to have
approved the last submitted construction plans. If the construction plans are
not approved in writing (or deemed approved) by both Tenant and Landlord on or
before April 30, 2012 for any reason whatsoever, then each day after April 30,
2012 that the construction plans are not approved (or deemed approved) by
Landlord and Tenant shall constitute one (1) day of Tenant Delay. Landlord
hereby agrees that Landlord shall not be entitled to disapprove construction
plans except for the following reasons: (i) the construction plans do not
conform to applicable laws, rules and regulations, (ii) the construction plans
or specifications will not accommodate Building standard heating, cooling,
mechanical, electrical or plumbing improvements, (iii) the construction plans or
specifications do not conform to the Space Plan, or (iv) the work required by
the construction plans affects the exterior of the Third Expansion Space or the
Building.

1.4 Changes to Approved Plans. If any re-drawing or re-drafting of either the
Space Plan or the Construction Plans is necessitated by Tenant’s written,
requested changes (all of which shall be subject to approval by Landlord (which
approval shall not be unreasonably withheld or delayed) and, if applicable, the
Texas Department of Licensing & Regulation and any other governmental agency or
authority to which the plans and specifications are required to be submitted),
the expense of any such re-drawing or re-drafting required in connection
therewith and the expense of any work and improvements necessitated by such
re-drawing or re-drafting will be charged to Tenant (subject to reimbursement
from the Finish Allowance). Landlord shall not have the right to make changes to
the Construction Plans without Tenant’s approval, which approval shall not be
unreasonably withheld or delayed.

1.5 Coordination of Planners and Designers. If Tenant shall arrange for interior
design services, whether with Landlord’s space planner or any other planner or
designer, it shall be Tenant’s responsibility to cause necessary coordination of
its agents’ efforts with Landlord’s agents to ensure that no delays are caused
to either the planning or construction of the Tenant’s Improvements, and
Landlord agrees to reasonably cooperate with Tenant in such regard.

1.6 Contract Selection Process. Promptly following the completion of the
Construction Plans, Landlord shall competitively bid the construction of the
Tenant’s Improvements to at least three (3) qualified general contractors
approved by Landlord, one of which may be selected by Tenant (subject to
Landlord’s reasonable approval). The contractor submitting the lowest qualified
bid to perform the total construction project associated with Tenant’s
Improvements shall be selected, unless otherwise agreed in writing by Landlord
and Tenant. Notwithstanding Tenant’s right to approve the general contractor,
the general contractor is the contractor only of Landlord and Tenant shall have
no liability to the general contractor with respect to the construction
contract.

 

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2. Construction and Costs of Tenant’s Improvements.

2.1 Construction Obligation and Finish Allowance.

(a) Landlord agrees to construct Tenant’s Improvements, at Tenant’s cost and
expense; provided, however, that Landlord shall provide Tenant with an allowance
of up to Twenty-Nine and No/100 Dollars ($29.00) per square foot of Agreed
Rentable Area of the Third Expansion Space (the “Finish Allowance”), which
allowance shall be disbursed by Landlord, from time to time, but in no event
more than monthly, for payment of (i) the contract sum required to be paid to
the general contractor engaged to construct Tenant’s Improvements, which
contract sum shall include without limitation, any costs incurred by such
general contractor to comply with the construction requirements applicable to
the Building (the “Contract Sum”), (ii) payment of the Construction Management
Fee (hereinafter defined), (iii) the fees of the preparer of the Space Plan and
the Construction Plans, (iv) the construction management fee payable to Tenant’s
construction manager in a amount not to exceed One and No/100 Dollar ($1.00) per
Agreed Rentable Area of the Third Expansion Space, and (v) such other costs
related to the leasehold improvements (such as equipment, appliances and
furnishings) as Landlord specifically approves in writing, it being understood
that Landlord shall have no obligation whatsoever to fund any portion of the
Finish Allowance for such other costs, except as otherwise expressly provided
herein. In consideration of Landlord administering the construction of Tenant’s
Improvements, Landlord will deduct from the Finish Allowance a fee equal to
three percent (3%) of the Contract Sum to construct Tenant’s Improvements (the
“Construction Management Fee”) (the foregoing costs are collectively referred to
as the “Permitted Costs”). In the event any portion of the Finish Allowance
remains unexpended after payment of all costs and expenses in connection with
the Tenant’s Improvements, up to Three and No/100 Dollars ($3.00) per square
foot of Agreed Rentable Area in the Third Expansion Space of such remaining
amount (the “Permitted Additional Cost Allowance”) may be used for (i) the
purchase and installation of telephone and data cabling and (ii) the purchase
and installation of Tenant’s furniture, fixtures and equipment (such costs,
“Permitted Additional Costs”). Following the Third Expansion Date, Landlord will
reimburse Tenant for the Permitted Additional Costs (to the extent of any
remaining Permitted Additional Cost Allowance) within thirty (30) days after
Landlord’s receipt of invoices therefor. Any portion of the Finish Allowance,
including any Permitted Additional Cost Allowance, that remains unexpended after
payment of all costs and expenses in connection with the Tenant’s Improvements
and the Permitted Additional Costs, may be used for alterations performed by
Tenant in any portion of the Premises in accordance with the terms of Sections
6.303 and 6.304 of the Lease. Any portion of the Finish Allowance, including any
Permitted Additional Cost Allowance, that is not requested to be disbursed by
Tenant on the date that is six (6) months after the Third Expansion Date shall
be the sole property of Landlord, and Tenant shall not be entitled to any
credit, payment or abatement on account thereof. Notwithstanding anything to the
contrary in this Exhibit B, the Suite 260 Finish Allowance shall be applied to
pay the Permitted Costs prior to the Finish Allowance, and the Finish Allowance
shall be used only after the Suite 260 Finish Allowance has been fully
exhausted.

 

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Further, notwithstanding anything to the contrary in Exhibit B attached to the
Fourth Amendment, to the extent any of the Finish Allowance, as defined in
Exhibit B to the Fourth Amendment (herein referred to as the “Suite 260 Finish
Allowance”), remains unexpended after payment of all Permitted Costs (as defined
in Exhibit B to the Fourth Amendment) with respect to Suite 260 and all
Permitted Additional Costs (as defined in Exhibit B to the Fourth Amendment)
with respect to Suite 260, such unexpended portion of the Suite 260 Finish
Allowance may be used for alterations performed by Tenant in any portion of the
Premises in accordance with the terms of Sections 6.303 and 6.304 of the Lease;
provided any Suite 260 Finish Allowance not requested to be disbursed by Tenant
by the date that is six (6) months after the Third Expansion Date shall be the
sole property of Landlord, and Tenant shall not be entitled to any credit,
payment or abatement on account thereof.

(b) Title to any fixtures (excluding, without limitation, all items paid for
with the Permitted Additional Costs Allowance, personally, movable equipment,
furniture and computers) installed in the Third Expansion Space and purchased
with any portion of the Finish Allowance shall pass to Landlord upon payment of
the invoice cost thereof and Tenant shall not remove any such fixtures
(excluding, without limitation all items paid for with the Permitted Additional
Costs Allowance, personally, movable equipment, furniture and computers) from
the Third Expansion Space without Landlord’s express, prior written consent or
unless requested by Landlord in connection with the expiration or earlier
termination of the Lease.

(c) Landlord shall obtain a customary one (1) year warranty from the contractor
performing the Tenant’s Improvements, and shall assign such warranty on a
nonexclusive basis to Tenant with respect to any portion of the Tenant’s
Improvements in the Third Expansion Space that Tenant is responsible to
maintain.

2.2 Excess Costs. If the Permitted Costs exceeds the Finish Allowance, then
Tenant shall pay all such excess costs (“Excess Costs”), provided, however,
Landlord will, prior to the commencement of construction of Tenant’s
Improvements, advise Tenant of the sum of the Contract Sum and the Construction
Management Fee (the “Cost Estimate”). Tenant shall have five (5) business days
from and after the receipt of such advice within which to approve or disapprove
the Contract Sum and Cost Estimate. If Tenant fails to approve same by the
expiration of the fifth such business day, then Tenant shall be deemed to have
approved the Proposed Contract Sum and Cost Estimate. If Tenant disapproves the
Contract Sum and Cost Estimate within such five (5) business day period, then
Tenant shall either reduce the scope of Tenant’s Improvements such that the
Contract Sum and Construction Management Fee do not exceed the Finish Allowance
or, at Tenant’s option, Landlord shall obtain two (2) additional bids, provided
that each day beyond such five (5) business day period and until the rebid is
accepted by Tenant shall constitute a Tenant Delay hereunder. The foregoing
process shall continue until a Contract Sum and Cost Estimate are accepted or
deemed accepted by Tenant. Landlord and Tenant must approve (or be deemed to
have approved) the Contract Sum for the construction of Tenant’s Improvements in
writing prior to the commencement of construction.

2.3 Liens Arising from Excess Costs. Tenant agrees to keep the Third Expansion
Space free from any liens arising out of nonpayment of Excess Costs. In the
event that any such lien is filed and Tenant, within ten (10) days following
Tenant’s receipt of written notice of such filing fails to cause same to be
released of record by payment or posting of a

 

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proper bond, Landlord shall have, in addition to all other remedies provided
herein and by law, the right, but not the obligation, to cause the same to be
released by such means as it in its sole discretion deems proper, including
payment of or defense against the claim giving rise to such lien. All sums paid
by Landlord in connection therewith shall constitute Rent under the Lease and a
demand obligation of Tenant to Landlord and such obligation shall bear interest
at the rate provided for in Section 15.10 of the Supplemental Lease Provisions
from the date of payment by Landlord until the date paid by Tenant.

2.4 Construction Deposit. Tenant shall remit to Landlord an amount (the
“Prepayment”) equal to fifty percent (50%) of the projected Excess Costs, if
any, within five (5) working days after commencement of construction by
Landlord. On or prior to the Third Expansion Date, Tenant shall deliver to
Landlord the actual Excess Costs, minus the Prepayment previously paid. Failure
by Tenant to timely tender to Landlord the full Prepayment shall permit Landlord
to stop all work until the Prepayment is received. All sums due Landlord under
this Section 2.4 shall be considered Rent under the terms of the Lease and
nonpayment beyond the applicable notice and cure period shall constitute a
default under the Lease and entitle Landlord to any and all remedies specified
in the Lease.

3. Delays. Delays in the completion of construction of Tenant’s Improvements or
in obtaining a certificate of occupancy, if required by the applicable
governmental authority, caused by the act or omission of Tenant, Tenant’s
Contractors (hereinafter defined) or any person, firm or corporation employed by
Tenant or Tenant’s Contractors shall constitute “Tenant Delays”. Landlord agrees
to use reasonable efforts to promptly notify Tenant of any events causing Tenant
Delays of which Landlord has actual knowledge. In the event that Substantial
Completion of the Tenant’s Improvements with respect to the Third Expansion
Space is delayed as a result of any Tenant Delays, then for purposes of
determining the Third Expansion Date, the date of Substantial Completion shall
be deemed to be the day that the Tenant’s Improvements would have been
Substantially Complete absent any such Tenant Delays. The adjustment of the
Third Expansion Date shall be Tenant’s sole and exclusive remedy for any delay
in the Substantial Completion of the Tenant’s Improvements.

4. Substantial Completion and Punch List. The terms “Substantial Completion” and
“Substantially Complete,” as applicable, shall mean when Tenant’s Improvements
are sufficiently completed in accordance with the Construction Plans so that
Landlord can obtain a temporary or permanent certificate of occupancy for the
Third Expansion Space and Tenant can reasonably use the Third Expansion Space
for the Permitted Use (as described in Item 10 of the Basic Lease Provisions).
When Landlord reasonably considers Tenant’s Improvements to be Substantially
Complete, Landlord will notify Tenant and within five (5) business days
thereafter, Landlord’s representative and Tenant’s representative shall conduct
a walk-through of the Third Expansion Space and identify any necessary touch-up
work, repairs and minor completion items as are necessary for final completion
of Tenant’s Improvements. Neither Landlord’s representative nor Tenant’s
representative shall unreasonably withhold his agreement on punch list items.
Landlord will use reasonable efforts to cause the contractor to complete all
punch list items within thirty (30) days after agreement thereon.

 

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5. Tenant’s Contractors. If Tenant should desire to enter the Third Expansion
Space or authorize its agent to do so prior to the Third Expansion Date, to
perform approved work not requested of the Landlord, Landlord shall permit such
entry if:

(a) Tenant shall use only such contractors which Landlord shall approve, which
approval shall not be unreasonably withheld or delayed, and Landlord shall have
approved the plans to be utilized by Tenant, which approval will not be
unreasonably withheld or delayed; and

(b) Tenant, its contractors, workmen, mechanics, engineers, space planners or
such others as may enter the Third Expansion Space (collectively, “Tenant’s
Contractors”), work in harmony with and do not in any way disturb or interfere
with Landlord’s space planners, architects, engineers, contractors, workmen,
mechanics or other agents or independent contractors in the performance of their
work (collectively, “Landlord’s Contractors”), it being understood and agreed
that if entry of Tenant or Tenant’s Contractors has caused or is causing a
material disturbance to Landlord or Landlord’s Contractors, and such disturbance
is not abated within one (1) day following Tenant’s receipt of notice of the
specific conduct causing such disturbance, then Landlord may, with prior written
notice, refuse admittance to Tenant or Tenant’s Contractors causing such
disturbance; and

(c) Tenant (notwithstanding the first sentence of subsection 7.201 of the
Supplemental Lease Provisions), Tenant’s Contractors and other agents shall
provide Landlord sufficient evidence that each is covered under such Worker’s
Compensation, public liability and property damage insurance as Landlord may
reasonably request for its protection.

Landlord shall not be liable for any injury, loss or damage to any of Tenant’s
installations or decorations made prior to the Third Expansion Date and not
installed by Landlord. Tenant shall indemnify and hold harmless Landlord and
Landlord’s Contractors from and against any and all costs, expenses, claims,
liabilities and causes of action arising out of or in connection with work
performed in the Third Expansion Space by or on behalf of Tenant (but excluding
work performed by Landlord or Landlord’s Contractors). Landlord is not
responsible for the function and maintenance of Tenant’s Improvements which are
different than Landlord’s standard improvements at the Property or improvements,
equipment, cabinets or fixtures not installed by Landlord. Such entry by Tenant
and Tenant’s Contractors pursuant to this Section 5 shall be deemed to be under
all of the terms, covenants, provisions and conditions of the Lease except the
covenant to pay Rent.

6. Construction Representatives. Landlord’s and Tenant’s representatives for
coordination of construction and approval of change orders will be as follows,
provided that either party may change its representative upon written notice to
the other:

 

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  LANDLORD’S REPRESENTATIVE:  

NAME

   Curt Whitlatch  

ADDRESS

   HPI Real Estate, Inc.      3600 North Capital of Texas Highway      Building
B, Suite 250 Austin, TX 78746  

PHONE

   (512) 835-4455  

TENANT’S REPRESENTATIVE:

 

NAME

   Kathy Smith Willman  

ADDRESS

   3900 N. Capital of Texas Hwy.,      Building F Suite 300      Austin, Texas
78746  

PHONE

   (512) 732-9990  

With a copy of notices delivered in connection with this Work Letter to:

 

NAME

   Tony Proctor  

ADDRESS

   LML Group LLC      12700 Hill Country Blvd., S-100 Bee Cave, TX 78738  

PHONE

   (512) 944-6464 Mobile      (512) 857-0325 Fax

7. Building Shell. Notwithstanding anything to the contrary contained herein,
Landlord shall be solely responsible (and no part of such work shall be charged
as part of the Finish Allowance) and Tenant shall not be obligated to pay for
the costs associated with providing the Building shell, which shall include, but
not be limited to, the following work:

(a) Building standard ceiling grid and tiles stocked on the floor.

(b) Fire sprinklers, configured to a minimum standard layout of one sprinkler
head per 225 useable square feet, or other configuration to be compliant with
building code at that time.

(c) HVAC systems, configured to minimum Building standard requirements which are
existing and operational, including high and medium pressure ducts. Perimeter
VAV boxes only will be installed with thermostats.

(d) Electrical panels both high and low voltage, with available circuit space in
a ratio commensurate with the area of the floor (full) to be occupied by the
Tenant, are existing and operational. Electrical capacity shall be 4 watts per
usable square foot on each floor net of all Building systems with an additional
3 watts per useable square foot available for Tenant’s use.

(e) Window treatments are installed throughout.

(f) Common areas (elevator lobbies and restrooms) are finished and clean.

 

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In addition, notwithstanding anything to the contrary contained herein, Landlord
shall be solely responsible (and no part of such work shall be charged as part
of the Finish Allowance) for and Tenant shall not be obligation to pay for the
following: (a) costs for improvements which are not shown on or described in the
Construction Plans unless otherwise approved by Tenant; (b) costs incurred due
to the presence of Hazardous Materials in the Third Expansion Space or the
surrounding area; (c) attorneys’ fees incurred in connection with negotiation of
construction contracts, and attorneys’ fees, experts’ fees and other costs in
connection with disputes with third parties; (d) interest and other costs of
financing construction costs and any costs for construction bonds or similar
surety instruments; (e) penalties and late charges attributable to Landlord’s
failure to pay construction costs; (f) offsite management or other general
overhead costs incurred by Landlord; or (g) construction management, profit and
overhead charges of Landlord in excess of Construction Management Fee.

 

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EXHIBIT C

RENEWAL OPTION

1. If, and only if, on the Expiration Date and the date Tenant notifies Landlord
of its intention to renew the Term of the Lease, (i) Tenant is not in default
under the Lease, as amended hereby (beyond the expiration of any applicable
notice and cure period), (ii) Tenant then occupies and the Premises then consist
of at least Suites 250 and 300, Suite 260, and the Third Expansion Space,
(iii) the Lease, as amended, is in full force and effect, and (iv) Tenant’s
financial condition has not materially and adversely changed from the financial
condition of Tenant existing on the date of this Amendment as evidenced by
financial statements delivered to Landlord at such time, then Tenant, but not
any assignee or subtenant of Tenant (other than an assignee pursuant to a
Permitted Transfer), shall have and may exercise an option to renew the Lease
with respect to the entire Premises only, for two (2) additional terms of five
(5) years each (each, a “Renewal Term”) upon the same terms and conditions
contained in the Lease, as amended hereby, with the exceptions that (x) the
Lease shall not be further available for renewal after the second Renewal Term,
(y) the rental for the Premises during each Renewal Term shall be the “Renewal
Rental Rate,” and (z) Tenant shall not be entitled to receive any allowances
provided with respect to the initial lease of the Premises or during the first
Renewal Term, as applicable. The Renewal Rental Rate is hereby defined to mean
the then prevailing rents (including, without limitation, those similar to the
Basic Annual Rent and Additional Rent) payable by renewal tenants having a
credit standing substantially similar to that of Tenant, for properties of
equivalent quality, size, utility and location as the Premises, located within
the area described below and leased for a term approximately equal to the
applicable Renewal Term. The Renewal Rental Rate will take into consideration
the tenant inducements offered in the renewal transactions considered by
Landlord in determining the Renewal Rental Rate.

2. If Tenant desires to renew the Lease, Tenant must notify Landlord in writing
of its intention to renew on or before the date which is at twelve (12) months
but no more than eighteen (18) months prior to the Expiration Date or the
expiration date of the first Renewal Term, as applicable. Landlord shall, within
the next thirty (30) days, notify Tenant in writing of Landlord’s determination
of the applicable Renewal Rental Rate and Tenant shall, within the next thirty
(30) days following receipt of Landlord’s determination of the Renewal Rental
Rate, notify Landlord in writing of Tenant’s acceptance or rejection of
Landlord’s determination of the applicable Renewal Rental Rate. If Tenant timely
notifies Landlord of Tenant’s acceptance of Landlord’s determination of the
Renewal Rental Rate, the Term shall be extended as provided herein and Landlord
and Tenant shall enter into an amendment to the Lease to reflect the extension
of the Term and changes in Rent in accordance with this Exhibit, provided
however, Tenant’s lease of the Premises on the terms set forth herein shall be
effective notwithstanding the parties’ failure to enter into such Lease
amendment. If (x) Tenant timely notifies Landlord in writing of Tenant’s
rejection of Landlord’s determination of the Renewal Rental Rate or (y) Tenant
does not notify Landlord in writing of Tenant’s acceptance or rejection of
Landlord’s determination of the Renewal Rental Rate within such thirty (30) day
period, the Term shall end on the Expiration Date or expiration date of the
first Renewal Term, as applicable, and Landlord shall have no further
obligations or liability hereunder. Notwithstanding the foregoing, if Landlord
and Tenant are unable to agree upon the Renewal Rental Rate for the Premises
within

 

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thirty (30) days after the date Tenant notifies Landlord of Tenant’s rejection
of Landlord’s determination of the Renewal Rental Rate, Tenant, by written
notice to Landlord (the “Arbitration Notice”) within ten (10) days after the
expiration of such thirty (30) day period, shall have the right to have the
Renewal Rental Rate determined in accordance with the arbitration procedures
described in Section 3 below. If Landlord and Tenant are unable to agree upon
the Renewal Rental Rate for the Premises within the thirty (30) day period
described and Tenant fails to timely exercise its right to arbitrate, Tenant’s
renewal option set forth in this Exhibit shall be deemed to be null and void and
of no further force and effect.

3. If Tenant provides Landlord with an Arbitration Notice, Landlord and Tenant,
within ten (10) days after the date of the Arbitration Notice, shall each
simultaneously submit to the other, in a sealed envelope, its good faith
estimate of the Renewal Rental Rate for the Premises during the applicable
Renewal Tenn (collectively referred to as the “Estimates”) and shall each select
a broker (hereinafter, a “broker”) to determine which of the two Estimates most
closely reflects the Renewal Rental Rate for the Premises during the applicable
Renewal Term. Each broker so selected shall be (i) a licensed commercial real
estate broker in the State of Texas and (ii) have not less than ten (10) years’
experience in the field of commercial real estate brokerage for buildings
similar to the Building in the Austin, Texas area. Upon selection, Landlord’s
and Tenant’s brokers shall work together in good faith to agree upon which of
the two Estimates most closely reflects the Renewal Rental Rate for the
Premises. The Estimate chosen by such brokers shall be binding on both Landlord
and Tenant as the rental rate for the Premises during the applicable Renewal
Term. If either Landlord or Tenant fails to appoint a broker within the ten
(10) day period referred to above, the broker appointed by the other party shall
be the sole broker for the purposes hereof. If the two brokers cannot agree upon
which of the two Estimates most closely reflects the Renewal Rental Rate within
thirty (30) days after their appointment, then, within ten (10) days after the
expiration of such thirty (30) day period, the two brokers shall select a third
broker meeting the aforementioned criteria. Once the third broker (i.e.
arbitrator) has been selected as provided for above, then, as soon thereafter as
practicable but in any case within fourteen (14) days, the arbitrator shall make
his determination of which of the two Estimates most closely reflects the
Renewal Rental Rate and such Estimate shall be binding on both Landlord and
Tenant as the rental rate for the Premises. The parties shall share equally in
the costs of the arbitrator. Any fees of any appraiser, counsel or experts
engaged directly by Landlord or Tenant shall be borne by the party retaining
such appraiser, counsel or expert.

4. If the Renewal Rental Rate has not been determined by the commencement date
of the applicable Renewal Term, Tenant shall pay Basic Rent for the Premises
upon the terms and conditions in effect during the last month of the immediately
preceding Term for the Premises until such time as the Renewal Rental Rate has
been determined. Upon such determination, the Basic Rent for the Premises shall
be retroactively adjusted to the commencement of the applicable Renewal Term. If
such adjustment results in an underpayment of Basic Rent by Tenant, Tenant shall
pay Landlord the amount of such underpayment within thirty (30) days after the
determination thereof. If such adjustment results in an overpayment of Basic
Rent by Tenant, Landlord shall credit such overpayment against the next
installment of Basic Rent due under the Lease and, to the extent necessary, any
subsequent installments, until the entire amount of such overpayment has been
credited against Basic Rent.

 

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5. If Tenant is entitled to and properly delivers the Arbitration Notice, the
Lease shall be extended with respect to the Premises as provided herein and
Landlord and Tenant shall enter into an amendment to the Lease to reflect the
extension of the Term and changes in Rent in accordance with this Exhibit,
provided however, Tenant’s lease of the Premises on the terms set forth herein
shall be effective notwithstanding the parties’ failure to enter into such
amendment.

6. The renewal rights of Tenant hereunder shall not be severable from the Lease,
nor may such rights be assigned or otherwise conveyed in connection with any
permitted assignment of the Lease, except in connection with a Permitted
Transfer. Landlord’s consent to any assignment of the Lease shall not be
construed as allowing an assignment of such rights to any assignee. In the event
an assignee pursuant to a Permitted Transfer exercises the renewal rights set
forth herein, Tenant shall remain liable under the Lease for all of the
obligations of the tenant hereunder during the applicable Renewal Term, whether
or not Tenant has consented to or is notified of such renewal and Landlord shall
have no obligation to obtain the consent of Tenant or to notify Tenant of such
renewal.

7. The market area with respect to which the Renewal Rental Rate will be
determined is the southwest Austin office submarket.

 

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EXHIBIT D

RIGHT OF FIRST OFFER

A. Tenant shall have a right of first offer (the “Right of First Offer”) on all
space in the Building (the “Offering Space”). Tenant’s Right of First Offer
shall be exercised as follows: (i) with respect to existing tenants leasing the
Offering Space as of the date of this Amendment: if (x) Landlord has not entered
into an amendment to extend the existing tenants’ lease with respect to the
Offering Space (or any portion thereof) prior to the expiration of such tenants’
renewal option(s) and the existing tenant does not exercise its renewal option,
then within five (5) days after the expiration of the applicable existing
tenants’ renewal option exercise date; and (ii) with respect to any future
tenant leasing the Offering Space in accordance with the terms of this Exhibit D
after Tenant has failed to exercise the Right of First Offer with respect to
such space: if (x) Landlord has not entered into an amendment to extend the such
future tenants’ lease with respect to the Offering Space (or any portion
thereof) prior to the expiration of such future tenants’ renewal option(s) and
the such future tenant does not exercise its renewal option, then within five
(5) days after the expiration of the applicable future tenants’ renewal option
exercise date, Landlord shall advise Tenant (the “Advice”) of the terms under
which Landlord is prepared to lease the Offering Space to Tenant, which terms
shall reflect the Prevailing Market (hereinafter defined) rate and terms for
such Offering Space as reasonably determined by Landlord, or (y) if any of the
Offering Space becomes available for lease to a party other than (I) the tenant
or its successors or assigns under a lease in effect on the date of this
Amendment, or (II) the future tenant or its successors assigns under a lease
that is executed in accordance with the terms of this Exhibit D after Tenant has
failed to exercise the Right of First Offer with respect to such space (by early
termination or otherwise), then, within five (5) days after such Offering Spaces
becomes available for lease, Landlord shall deliver an Advice to Tenant setting
forth terms under which Landlord is prepared to lease the Offering Space to
Tenant, which terms shall reflect the Prevailing Market rate and terms for such
Offering Space as reasonably determined by Landlord. Tenant may lease the entire
(but not a portion of) the Offering Space described in the Advice under such
terms, by providing Landlord with written notice of exercise (the “Notice of
Exercise”) within ten (10) days after the date of the Advice, except that Tenant
shall have no such right and Landlord need not provide Tenant with an Advice if:

(i) Tenant is in default under this Lease beyond any applicable cure periods at
the time that Landlord would otherwise deliver the Advice; or

(ii) more than twenty percent (20%) of the Premises is sublet at the time
Landlord would otherwise deliver the Advice (other than pursuant to a Permitted
Transfer); or

(iii) the Lease has been assigned prior to the date Landlord would otherwise
deliver the Advice (other than pursuant to a Permitted Transfer); or

(iv) Tenant is not occupying the at least eight percent (80%) of the Premises on
the date Landlord would otherwise deliver the Advice; or

 

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(v) Tenant’s financial condition has not materially and adversely changed from
the financial condition as of the date of this Amendment as evidenced by
Tenant’s financial statements as of the month ending prior to the date of
Tenant’s receipt of an Advice.

B. The term for the Offering Space shall commence upon the commencement date
stated in the Advice and thereupon such Offering Space shall be considered a
part of the Premises, provided that all of the terms stated in the Advice
including the termination date, shall govern Tenant’s leasing of the Offering
Space and only to the extent that they do not conflict with the Advice, the
terms and conditions of the Lease shall apply to the Offering Space, provided
that any options to renew, terminate or expand set forth in this Lease, as
amended hereby, shall not apply to the Offering Space, and only the options set
forth in the Advice, if any, shall be applicable to the Offering Space. Tenant
shall pay Rent for the Offering Space in accordance with the terms and
conditions of the Advice.

C. The Offering Space leased by Tenant hereunder shall be accepted by Tenant in
its condition and as-built configuration existing on the earlier of the date
Tenant takes possession of such Offering Space or the date the term for such
Offering Space commences, unless the Advice specifies work to be performed by
Landlord in such Offering Space, in which case Landlord shall perform such work
in such Offering Space. If Landlord is delayed delivering possession of such
Offering Space due to the holdover or unlawful possession of such space by any
party, Landlord shall use reasonable efforts to obtain possession of the space,
and the commencement of the term for such Offering Space shall be postponed
until the date Landlord delivers possession of such Offering Space to Tenant
free from occupancy by any party.

D. The rights of Tenant hereunder with respect to the Offering Space shall
terminate on the earliest to occur of (i) the expiration of the Term of the
Lease, as extended by this Amendment; provided that in the event Tenant
exercises the renewal options set forth in Exhibit C to this Amendment, Tenant’s
rights hereunder shall continue through the applicable Renewal Term;
(ii) Tenant’s failure to exercise its Right of First Offer within the ten
(10) day period provided in Section A above; and (iii) the date Landlord would
have provided Tenant an Advice if Tenant had not been in violation of one or
more of the conditions set forth in Section A above. Notwithstanding the
foregoing, if (x) Tenant was entitled to exercise its Right of First Offer, but
failed to provide Landlord with a Notice of Exercise within the ten (10) day
period provided in Section A above, and (y) Landlord does not enter into a lease
for all or any portion of the Offering Space with a third party within a period
of six (6) months following the date of the Advice, Tenant shall once again have
a Right of First Offer with respect to such Offering Space in accordance with
the terms of this Exhibit. In addition, Tenant shall once again have the Right
of First Offer with respect to such Offering Space in accordance with the terms
of this Exhibit if, within such six (6) month period, Landlord proposes to lease
all or any portion of the Offering Space to a third party tenant on terms that
are substantially different than those set forth in the Advice. For purposes
hereof, the terms offered to a third party shall be deemed to be substantially
the same as those set forth in the Advice as long as there is no more than a
five percent (5%) reduction in the “bottom line” cost per rentable square foot
of the Offering Space to the third party when compared with the “bottom line”
cost per rentable square foot under the Advice, considering all of the economic
terms of the both deals, respectively, including, without limitation, the length
of term, the net rent, any tax or expense escalation or other financial
escalation and any financial concessions. In addition, if Landlord does enter
into a lease for the Offering Space during the Lease Term, Tenant shall have a
Right of First Offer on such Offering Space, subject to the terms hereof.

 

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E. If Tenant exercises its rights hereunder with respect to the Offering Space,
Landlord and Tenant will enter into an amendment to the Lease reflecting (i) the
addition of the Offering Space to the Premises, (ii) the increase in Basic
Annual Rent and Additional Rent payable under this Lease calculated based on the
terms set forth in the Advice, (iii) the increase in Tenant’s Pro Rata Share
Percentage (calculated with the increase in the total Agreed Rentable Area based
upon the Agreed Rentable Area of the applicable Offering Space), (iv) the term
of the Lease with respect to the Offering Space, and (v) such other amendments
as are necessary to fully effectuate the provisions of this Exhibit; provided
however, Tenant’s lease of the Offering Space on the terms set forth herein
shall be effective notwithstanding the parties’ failure to enter into such Lease
amendment.

F. For purposes of this Right of First Offer Exhibit, “Prevailing Market” rate
shall mean the prevailing rents (including, without limitation, those similar to
the Basic Annual Rent and Additional Rent) payable by new and renewal tenants
having a credit standing substantially similar to that of Tenant, for properties
of equivalent quality, size, utility and location as the Offering Space, located
within the southwest Austin office submarket. The determination of Prevailing
Market shall take into account any material economic differences between the
terms of this Lease and any comparison lease, such as rent abatements,
construction costs and other concessions and the manner, if any, in which the
Landlord under any such lease is reimbursed for operating expenses and taxes.
The determination of the Prevailing Market rate shall also take into
consideration any reasonably anticipated changes in the Prevailing Market rate
from the time such Prevailing Market rate is being determined and the time such
Prevailing Market rate will become effective under the Lease, as amended hereby.

Notwithstanding anything herein to the contrary, Tenant’s Right of First Offer
is subject and subordinate to (i) the expansion rights (whether such rights are
designated as a right of first offer, right of first refusal or expansion
option) of any tenant of the Building existing on the date hereof, and (ii) the
renewal or extension rights of any tenant leasing all or any portion of the
Offering Space after the date hereof.

 

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