EXHIBIT 10.43

 

OFFICE LEASE

 

BETWEEN

 

TRANSWESTERN GREAT LAKES, L.P., AS LANDLORD

 

AND

 

SYNPLICITY, INC., AS TENANT

 

LISLE EXECUTIVE CENTER

 

3030 WARRENVILLE ROAD, LISLE, ILLINOIS

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TABLE OF CONTENTS

 

          PAGE

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1.

   DEFINITIONS    1

2.

   LEASE GRANT/POSSESSION    4

3.

   USE    4

4.

   RENT    4

5.

   SECURITY DEPOSIT    5

6.

   SERVICES TO BE FURNISHED BY LANDLORD    5

7.

   LEASEHOLD IMPROVEMENTS; TENANT’S PROPERTY    6

8.

   SIGNAGE AND PARKING    7

9.

   MAINTENANCE, REPAIRS AND ALTERATIONS    7

10.

   USE OF ELECTRICAL SERVICES BY TENANT    8

11.

   ASSIGNMENT AND SUBLETTING    9

12.

   MECHANIC’S LIENS    10

13.

   INSURANCE    10

14.

   INDEMNITY    12

15.

   DAMAGES FROM CERTAIN CAUSES    12

16.

   CASUALTY DAMAGE    13

17.

   CONDEMNATION    13

18.

   EVENTS OF DEFAULT    13

19.

   REMEDIES    14

20.

   NO WAIVER    17

21.

   PEACEFUL ENJOYMENT    17

22.

   SUBSTITUTION    17

23.

   HOLDING OVER    17

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          PAGE

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24.

   SUBORDINATION TO MORTGAGE; ESTOPPEL CERTIFICATE    18

25.

   NOTICE    18

26.

   SURRENDER OF PREMISES    18

27.

   RIGHTS RESERVED TO LANDLORD    19

28.

   MISCELLANEOUS.    19

29.

   NO OFFER    21

30.

   ENTIRE AGREEMENT    21

31.

   LIMITATION OF LIABILITY    21

 

EXHIBIT A-OUTLINE AND LOCATION OF PREMISES

    

EXHIBIT B-RULES AND REGULATIONS

    

EXHIBIT C-PAYMENT OF BASIC COSTS

    

EXHIBIT D-WORK LETTER

    

 

ii

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OFFICE LEASE

 

This Office Lease (the “Lease”) is made and entered into on the 20th day of May,
2005, between TRANSWESTERN GREAT LAKES, L.P., a Delaware limited partnership
(“Landlord”), and SYNPLICITY, INC., a California corporation (“Tenant”).

 

W I T N E S S E T H:

 

1. Definitions. The following are definitions of some of the defined terms used
in this Lease. The definition of other defined terms are found throughout this
Lease.

 

A. “Building” shall mean the office building at 3030 Warrenville Road, Lisle,
Illinois, currently known as Lisle Executive Center.

 

B. “Base Rent”: Base Rent shall be paid according to the following schedule,
subject to the provisions of Section 4 hereof. For the purposes of this Section
1B, “Lease Year” shall mean the twelve (12) month period commencing on the
Commencement Date, and on each anniversary of the Commencement Date (or portion
thereof ending on the Expiration Date).

 

PERIOD

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   ANNUAL BASE RENT

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MONTHLY INSTALLMENTS

OF BASE RENT

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7/1/05 – 8/31/05

   $ 0.00    $ 0.00

9/1/05 – 8/31/06

   $ 24,198.75    $ 2,016.56

9/1/06 – 8/31/07

   $ 24,924.71    $ 2,077.06

9/1/07 – 8/31/08

   $ 25,672.45    $ 2,139.37

 

As provided above, Tenant shall be entitled to free Base Rent and Additional
Rent during the first two months of the Lease Term (the “Abated Rent”).

 

The Base Rent and Additional Rent due for the first month during the Lease Term
(hereinafter defined) shall be paid by Tenant to Landlord contemporaneously with
Tenant’s execution hereof.

 

C. “Additional Rent” shall mean Tenant’s Pro Rata Share of Basic Costs
(hereinafter defined) and Tenant’s Pro Rata Share of Taxes (hereinafter defined)
and any other sums (exclusive of Base Rent) that are required to be paid to
Landlord by Tenant hereunder, which sums are deemed to be Additional Rent under
this Lease.

 

D. “Basic Costs” is defined in Exhibit C attached hereto.

 

E. “Taxes” is defined in Exhibit C attached hereto.

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F. “Security Deposit” shall mean the sum of Two Thousand Sixteen and 56/100
Dollars ($2,016.56). The Security Deposit shall be paid by Tenant to Landlord
contemporaneously with Tenant’s execution hereof.

 

G. “Lease Term” shall mean a period of Thirty Eight (38) months commencing on
July 1, 2005 (the “Commencement Date”) and, unless sooner terminated as provided
herein, end on August 31, 2008 (the “Expiration Date”).

 

H. “Premises” shall mean the office space located within the Building and
outlined on Exhibit A to this Lease, and commonly referred to as Suite 110. If
the Premises include one or more floors in their entirety, all corridors and
restroom facilities located on such full floor(s) shall be considered part of
the Premises.

 

I. “Rentable Area in the Premises” shall mean 1,195 square feet.

 

J. “Rentable Area in the Building” shall mean 150,036 square feet.

 

K. “Tenant’s Pro Rata Share” shall mean Zero and 80/100 percent (0.80%).

 

L. “Permitted Use” shall mean general office use and no other use or purpose.

 

M. “Base Year” shall mean 2005.

 

N. “Guarantor(s)” Intentionally omitted.

 

O. “Broker” shall mean Transwestern Commercial Services.

 

P. “Business Day(s)” shall mean Mondays through Fridays exclusive of the normal
business holidays.

 

Q. “Common Areas” shall mean those areas located within the Building or on the
Property designated by Landlord, from time to time, for the common use or
benefit of tenants generally and/or the public.

 

R. “Default Rate” shall mean the lower of (i) fifteen percent per annum, or (ii)
the highest rate of interest from time-to-time permitted under applicable
federal and state law.

 

S. “Normal Business Hours” for the Building shall mean 8:00 a.m. to 6:00 p.m.
Mondays through Fridays, and 8:00 a.m. to 1:00 p.m. on Saturdays, exclusive of
holidays.

 

T. “Property” shall mean the Building and the parcel(s) of land on which it is
located, other improvements located on such land, adjacent parcels of land that
Landlord operates jointly with the Building, and other buildings and
improvements located on such adjacent parcels of land.

 

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U. “Notice Addresses” shall mean the following addresses for Tenant and
Landlord, respectively:

 

Tenant:

 

Synplicity, Inc.

600 West California Avenue

Sunnyvale, California 94086

Attn: Douglas S. Miller, Sr. Vice President Finance, CFO

 

Invoices, to the above address, Attn: Accounts Payable

 

Landlord:

 

Transwestern Commercial Services

387 Shuman Blvd., Suite 200W

Naperville, IL 60563

Attn: Property Manager

 

with a copy to:

 

Transwestern Investment Company

150 North Wacker Drive, Suite 800

Chicago, IL 60606

Attn: Owner’s Representative

 

and to:

 

Drane, Freyer and Lapins

150 North Wacker Drive, 8th Floor

Chicago, IL 60606

Attn: Wendy Freyer, Esq.

 

Payments of Rent only shall be made payable to the order of:

 

Transwestern Lisle Executive Center

 

at the following address:

 

Transwestern Commercial Services

387 Shuman Blvd., Suite 200W

Naperville, IL 60563

Attn: Property Manager

 

or such other name and address as Landlord shall, from time to time, designate.

 

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2. Lease Grant/Possession.

 

A. Subject to and upon the terms herein set forth, Landlord leases to Tenant and
Tenant leases from Landlord the Premises on an “as is” basis (except as
otherwise expressly set forth herein), together with the right, in common with
others, to use the Common Areas. By taking possession of the Premises, Tenant is
deemed to have accepted the Premises and agreed that the Premises is in good
order and satisfactory condition, with no representation or warranty by Landlord
as to the condition of the Premises or the Building or suitability thereof for
Tenant’s use.

 

B. If Tenant, with Landlord’s prior written approval, takes possession of the
Premises prior to the Commencement Date for the sole purpose of performing any
improvements therein or installing furniture, equipment or other personal
property of Tenant, such possession shall be subject to all of the terms and
conditions of this Lease, except that Tenant shall not be required to pay Rent
with respect to the period of time prior to the Commencement Date during which
Tenant performs such work. Nothing herein shall be construed as granting Tenant
the right to take possession of the Premises prior to the Commencement Date,
whether for construction, fixturing or any other purpose, without the prior
written consent of Landlord.

 

3. Use. The Premises shall be used for the Permitted Use and for no other
purpose. Tenant agrees not to use or permit the use of the Premises for any
purpose which is illegal or dangerous, which creates a nuisance or which would
increase the cost of insurance coverage with respect to the Building. Tenant
will conduct its business and control its agents, servants, employees,
customers, licensees, and invitees in such a manner as not to interfere with or
disturb other tenants or Landlord in the management of the Property. Tenant will
maintain the Premises in a clean and healthful condition, and comply with all
laws, ordinances, orders, rules and regulations of any governmental entity with
reference to the use, condition, configuration or occupancy of the Premises.
Tenant shall not, and shall not allow its employees, agents, contractors or
invitees, to bring into the Building or the Premises any dangerous or hazardous
materials, except for customary office and cleaning supplies, provided Tenant
uses, stores and disposes of the same in compliance with all applicable law.
Tenant, at its expense, will comply with the rules and regulations of the
Building attached hereto as Exhibit B and such other rules and regulations
adopted and altered by Landlord from time-to-time and will cause all of its
agents, employees, invitees and visitors to do so. All such changes to rules and
regulations will be reasonable and shall be sent by Landlord to Tenant in
writing. In the event of a conflict between the rules and regulations and the
terms of this Lease, the terms of this Lease shall control. Landlord shall not
knowingly enforce the rules and regulations against Tenant in a discriminatory
manner. Except as otherwise provided in this Lease, Tenant shall have access to
the Premises on a 24-hour per day, 7-day per week basis, subject to Building
rules and regulations.

 

4. Rent.

 

A. Tenant covenants to pay to Landlord during the Lease Term, without any setoff
or deduction except as otherwise expressly provided herein, the full amount of
all Base Rent and Additional Rent (except that no such Base Rent or Additional
Rent shall be due prior to September 1, 2005) due hereunder and the full amount
of all such other sums

 

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of money as shall become due under this Lease, all of which hereinafter may be
collectively called “Rent.” In addition, Tenant shall pay, as Additional Rent,
all rent, sales and use taxes or other similar taxes, if any, levied or imposed
by any city, state, county or other governmental body having authority, such
payments to be in addition to all other payments required to be paid to Landlord
by Tenant under this Lease. Such payments shall be paid concurrently with the
payments of the Rent on which the tax is based. Base Rent and Additional Rent
for each calendar year or portion thereof during the Lease Term, shall be due
and payable in advance in monthly installments on the first day of each calendar
month during the Lease Term, without demand. If the Lease Term commences on a
day other than the first day of a month or terminates on a day other than the
last day of a month, then the installments of Base Rent and Additional Rent for
such month or months shall be prorated, based on the number of days in such
month. All amounts received by Landlord from Tenant hereunder shall be applied
first to the earliest accrued and unpaid Rent then outstanding. Tenant’s
covenant to pay Rent shall be independent of every other covenant set forth in
this Lease.

 

B. If Tenant fails to pay any installment of Base Rent and Additional Rent or
any other item of Rent when due and payable hereunder, a “Late Charge” equal to
five percent (5%) of such unpaid amount will be due and payable immediately by
Tenant to Landlord, provided, Tenant shall be entitled to a grace period of
three (3) days with respect to the first two (2) late payments in any calendar
year.

 

C. The Additional Rent payable hereunder shall be adjusted from time-to-time in
accordance with the provisions of Exhibit C attached hereto.

 

5. Security Deposit. The Security Deposit shall be held by Landlord without
liability for interest and as security for the performance by Tenant of Tenant’s
covenants and obligations under this Lease, it being expressly understood that
the Security Deposit shall not be considered an advance payment of Rent or a
measure of Tenant’s liability for damages in case of default by Tenant. Landlord
shall not be required to keep the Security Deposit separate from its other
accounts, shall have no fiduciary responsibilities or trust obligations
whatsoever with regard to the Security Deposit. Landlord may, from time-to-time,
without prejudice to any other remedy and without waiving such default, use the
Security Deposit to the extent necessary to cure or attempt to cure, in whole or
in part, any default of Tenant hereunder. Following any such application of the
Security Deposit, Tenant shall pay to Landlord within five (5) days after demand
the amount so applied in order to restore the Security Deposit to its original
amount. If Tenant is not in default at the termination of this Lease, the
balance of the Security Deposit remaining after any such application shall be
returned by Landlord to Tenant within sixty (60) days thereafter. If Landlord
transfers its interest in the Premises during the Lease Term, Landlord shall
assign the Security Deposit to the transferee and thereafter shall have no
further liability for the return of such Security Deposit.

 

6. Services to be Furnished by Landlord.

 

A. Landlord shall furnish the following services: (i) heating and air
conditioning during Normal Business Hours to provide a temperature condition
required, in Landlord’s reasonable judgment, for comfortable occupancy of the
Premises under normal

 

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business operations; (ii) water for drinking, and, subject to Landlord’s
approval, water at Tenant’s expense for any private restrooms and office kitchen
requested by Tenant; (iii) janitorial service in the Premises and Common Areas
on Business Days; (iv) electricity to the Premises for general office use, in
accordance with and subject to the terms and conditions of Section 10 of this
Lease; and (v) passenger elevator service, 24 hours a day, 7 days a week; and
freight elevator service on Business Days, upon request of Tenant and subject to
scheduling and charges by Landlord.

 

B. If Tenant requests any other utilities or building services in addition to
those identified in Section 6A, or any of the above utilities or building
services in frequency, scope, quality or quantities substantially greater than
the standards set by Landlord for the Building, then Landlord shall use
reasonable efforts to attempt to furnish Tenant with such additional utilities
or building services. Landlord may impose a reasonable charge for such
additional utilities or building services, which shall be paid monthly by Tenant
as Additional Rent on the same day that the monthly installment of Base Rent is
due. The charge for after hours HVAC service is currently $50.00 per hour, and
is subject to change from time to time.

 

C. Except as otherwise expressly provided herein, the failure by Landlord to any
extent to furnish, or the interruption or termination of utilities and Building
services identified in Section 6A in whole or in part, resulting from adherence
to laws, regulations and administrative orders, wear, use, repairs,
improvements, alterations or any causes shall not render Landlord liable in any
respect nor be construed as an actual or constructive eviction of Tenant, nor
give rise to an abatement of Rent, nor relieve Tenant from the obligation to
fulfill any covenant or agreement hereof.

 

D. Notwithstanding anything to the contrary contained in this Section 6, if: (i)
Landlord ceases to furnish any service in the Building for a period in excess of
five (5) consecutive Business Days after Tenant notifies Landlord of such
cessation; (ii) such cessation does not arise as a result of an act or omission
of Tenant; (iii) such cessation is not caused by a fire or other casualty (in
which case Section 16 shall control); (iv) the restoration of such service is
reasonably within the control of Landlord; and (v) as a result of such
cessation, the Premises or a material portion thereof, is rendered untenantable
and Tenant in fact ceases to use the Premises, or material portion thereof, then
Tenant, as its sole remedy, shall be entitled to receive an abatement of Base
Rent payable hereunder during the period beginning on the sixth (6th)
consecutive Business Day of such cessation and ending on the day when the
service in question has been restored. In the event the entire Premises has not
been rendered untenantable by the cessation in service, the amount of abatement
that Tenant is entitled to receive shall be prorated based upon the percentage
of the Premises so rendered untenantable and not used by Tenant.

 

7. Leasehold Improvements; Tenant’s Property. All fixtures, equipment,
improvements and appurtenances attached to, or built into, the Premises at the
commencement of or during the Lease Term, whether or not by, or at the expense
of, Tenant (“Leasehold Improvements”), shall be and remain a part of the
Premises; shall be the property of Landlord; and shall not be removed by Tenant
except as expressly provided herein. All unattached and moveable partitions,
trade fixtures, moveable equipment or furniture located in the Premises and

 

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acquired by or for the account of Tenant, without expense to Landlord, which can
be removed without structural damage to the Building or Premises, and all
personalty brought into the Premises by Tenant (“Tenant’s Property”) shall be
owned and insured by Tenant. Landlord may, nonetheless, at any time prior to, or
within one (1) month after, the expiration or earlier termination of this Lease
or Tenant’s right to possession of the Premises, require Tenant to remove any
Leasehold Improvements (the “Required Removables”) at Tenant’s sole cost. Upon
the termination of the Lease Term or the sooner termination of Tenant’s right to
possession of the Premises, Tenant shall remove Tenant’s Property, all
electronic, phone and data cabling exclusively serving the Premises (whether
such cabling is located within or outside of the Premises), and all Required
Removables. Tenant shall, at its sole cost and expense, repair any damage caused
by such removal and perform such other work as is reasonably necessary to
restore the Premises to a “move in” condition. If Tenant fails to remove any of
the foregoing items or to perform any required repairs and restoration, (i)
Landlord, at Tenant’s sole cost and expense, may remove the same (and repair any
damage occasioned thereby) and dispose thereof or deliver such items to any
other place of business of Tenant, or warehouse the same, and Tenant shall pay
the cost of such removal, repair, delivery, or warehousing of such items within
five (5) days after demand from Landlord, and (ii) such failure shall be deemed
a holding over by Tenant under Section 23 hereof until such failure is rectified
by Tenant or Landlord.

 

8. Signage and Parking. Landlord will install, at Landlord’s expense, Building
standard suite signage identifying Tenant, and a directory strip identifying
Tenant on the lobby Building directory. Tenant shall not install any signage
visible from the exterior of the Premises; all signage shall be in the standard
graphics for the Building and no others shall be used or permitted without
Landlord’s prior written consent. Tenant, and its employees, guests and
invitees, shall have the non-exclusive right to use up to five (5) parking
spaces per one thousand (1,000) rentable square feet of space in the Premises in
the surface parking spaces (except the reserved or designated parking spaces) on
the Property. In addition, Landlord will make available to Tenant two (2)
underground parking spaces at no charge during the Lease Term. All parking
spaces are assigned and security access cards are required to enter the
underground parking area. Landlord shall have no responsibility to Tenant to
monitor the use of such parking spaces or to cause the removal of unauthorized
vehicles parked therein. Tenant shall be responsible for enforcing its
employee’s compliance with all rules and regulations applicable to parking.

 

9. Maintenance, Repairs and Alterations.

 

A. Except to the extent such obligations are imposed upon Landlord hereunder,
Tenant shall, at its sole cost and expense, maintain the Premises in good order,
condition and repair throughout the entire Lease Term, ordinary wear and tear
excepted. Tenant agrees to keep the areas visible from outside the Premises in a
neat, clean and attractive condition at all times. Tenant shall, within thirty
(30) days after Landlord’s written demand therefor, reimburse Landlord for the
cost of all repairs, replacements and alterations (collectively, “Repairs”) in
and to the Premises, Building and Property and the facilities and systems
thereof, plus an administration charge of ten percent of such cost, the need for
which Repairs arises out of (1) Tenant’s use or occupancy of the Premises, (2)
the installation, removal, use or operation of Tenant’s Property or Required
Removables, (3) the moving of Tenant’s Property and Required Removables into or
out of the Building, (4) any Alterations (hereinafter defined) or other work
performed by Landlord pursuant to

 

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the Work Letter (subject to any construction allowance), or (5) the act,
omission, misuse or negligence of Tenant, its agents, contractors, employees or
invitees.

 

B. Tenant shall not make or allow to be made any alterations, additions or
improvements to the Premises (collectively, “Alterations”), without first
obtaining the written consent of Landlord. Prior to commencing any Alterations
and as a condition to obtaining Landlord’s consent, Tenant shall deliver to
Landlord plans and specifications acceptable to Landlord; names and addresses of
contractors reasonably acceptable to Landlord; copies of contracts; necessary
permits and approvals; evidence of contractor’s and subcontractor’s insurance in
accordance with Section 13 hereof; and a payment bond or other security, all in
form and amount satisfactory to Landlord. Tenant shall be responsible for
insuring that all such persons procure and maintain insurance coverage against
such risks, in such amounts and with such companies as Landlord may reasonably
require. All Alterations shall be constructed in a good and workmanlike manner
using Building standard materials or other new materials of equal or greater
quality. Landlord, to the extent reasonably necessary to avoid any disruption to
the tenants and occupants of the Building, shall have the right to designate the
time when any Alterations may be performed and to otherwise designate reasonable
rules, regulations and procedures for the performance of work in the Building.
Upon completion of the Alterations, Tenant shall deliver to Landlord “as-built”
plans, contractor’s affidavits and full and final waivers of lien and receipted
bills covering all labor and materials. All Alterations shall comply with the
insurance requirements and with applicable codes, ordinances, laws and
regulations. Tenant shall reimburse Landlord upon demand for all reasonable
sums, if any, expended by Landlord for third party examination of the
architectural, mechanical, electrical and plumbing plans for any Alterations. In
addition, if Landlord so requests, Landlord shall be entitled to oversee the
construction of any Alterations that may affect the structure of the Building or
any of the mechanical, electrical, plumbing or life safety systems of the
Building. If Landlord elects to oversee such work, Landlord shall be entitled to
receive a fee for such oversight in an amount equal to ten percent (10%) of the
cost of such Alterations. Landlord’s approval of Tenant’s plans and
specifications for any Alterations performed for or on behalf of Tenant shall
not be deemed to be a representation by Landlord that such plans and
specifications comply with applicable insurance requirements, building codes,
ordinances, laws or regulations or that the Alterations constructed in
accordance with such plans and specifications will be adequate for Tenant’s use.

 

10. Use of Electrical Services by Tenant. All electricity used by Tenant in the
Premises shall be paid for by Tenant by a separate charge or charges billed by
the utility company providing electrical service and payable by Tenant directly
to such utilities company. Landlord shall have the right at any time and from
time-to-time during the Lease Term to contract for electricity service from such
providers of such services as Landlord shall elect (each being an “Electric
Service Provider”). Tenant shall cooperate with Landlord, and the applicable
Electric Service Provider, at all times and, as reasonably necessary, shall
allow Landlord and such Electric Service Provider reasonable access to the
Building’s electric lines, feeders, risers, wiring, and any other machinery
within the Premises. Tenant’s use of electrical services furnished by Landlord
shall not exceed in voltage, rated capacity, or overall load that which is
standard for the Building. In the event Tenant shall request that it be allowed
to consume electrical services in excess of Building standard, Landlord may
refuse to consent to such usage or may consent upon such

 

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conditions as Landlord reasonably elects, and all such additional usage shall be
paid for by Tenant as Additional Rent. Landlord, at any time during the Lease
Term, shall have the right to separately meter electrical usage for the Premises
or to measure electrical usage by survey or any other method that Landlord, in
its reasonable judgment, deems appropriate.

 

11. Assignment and Subletting.

 

A. Except in connection with a Permitted Transfer (defined in Section 11E
below), Tenant shall not assign, sublease, transfer or encumber any interest in
this Lease or allow any third party to use any portion of the Premises
(collectively or individually, a “Transfer”) without the prior written consent
of Landlord, which consent shall not be unreasonably withheld. Without
limitation, it is agreed that Landlord’s consent shall not be considered
unreasonably withheld if: (1) the proposed transferee’s financial condition is
not adequate for the obligations such transferee is assuming in connection with
the proposed Transfer; (2) the transferee’s business or reputation is not
suitable for the Building considering the business and reputation of the other
tenants and the Building’s prestige, or would result in a violation of another
tenant’s rights under its lease at the Building; (3) the transferee is a
governmental agency or occupant of the Building; (4) Tenant is in default beyond
any applicable notice and cure period; (5) any portion of the Building or the
Premises would likely become subject to additional or different laws as a
consequence of the proposed Transfer; or (6) Landlord or its leasing agent has
received a proposal from or made a proposal to the proposed transferee to lease
space in the Building within six (6) months prior to Tenant’s delivery of
written notice of the proposed Transfer to Landlord. Any attempted Transfer in
violation of this Section 11, shall, exercisable in Landlord’s sole and absolute
discretion, be void. Consent by Landlord to one or more Transfers shall not
operate as a waiver of Landlord’s rights to approve any subsequent Transfers. If
Landlord withholds its consent to any Transfer contrary to the provisions of
this Section 11, Tenant’s sole remedy shall be to seek an injunction in equity
to compel performance by Landlord to give its consent and Tenant expressly
waives any right to damages in the event of such withholding by Landlord of its
consent. In no event shall any Transfer or Permitted Transfer release or relieve
Tenant from any obligation under this Lease or any liability hereunder.

 

B. If Tenant requests Landlord’s consent to a Transfer, Tenant shall submit to
Landlord (i) financial statements for the proposed transferee, (ii) a copy of
the proposed assignment or sublease, and (iii) such other information as
Landlord may reasonably request. After Landlord’s receipt of the required
information and documentation, Landlord shall either: (1) consent or reasonably
refuse consent to the Transfer in writing; (2) in the event of a proposed
assignment of this Lease, terminate this Lease effective the first to occur of
ninety (90) days following written notice of such termination or the date that
the proposed Transfer would have come into effect; and (3) in the event of a
proposed subletting, terminate this Lease with respect to the portion of the
Premises which Tenant proposes to sublease effective the first to occur of
ninety (90) days following written notice of such termination or the date the
proposed Transfer would have come into effect. Tenant shall pay Landlord a
review fee of $1,000.00 for Landlord’s review of any Permitted Transfer or
proposed Transfer. In addition, Tenant shall reimburse Landlord for its actual
reasonable costs and expenses (including, without limitation, reasonable
attorney’s fees)

 

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incurred by Landlord in connection with Landlord’s review of such proposed
Transfer or Permitted Transfer.

 

D. Except as provided below with respect to a Permitted Transfer, if Tenant is a
corporation, limited liability company, partnership or similar entity, and the
person, persons or entity which owns or controls a majority of the voting
interests at the time changes for any reason (including but not limited to a
merger, consolidation or reorganization), such change of ownership or control
shall constitute a Transfer. The foregoing shall not apply so long as Tenant is
an entity whose outstanding stock is listed on a nationally recognized security
exchange, or if at least eighty percent (80%) of its voting stock is owned by
another entity, the voting stock of which is so listed.

 

E. Tenant may assign its entire interest under this Lease or sublet the Premises
(i) to any entity controlling or controlled by or under common control with
Tenant or (ii) to any successor to Tenant by purchase, merger, consolidation or
reorganization (hereinafter, collectively, referred to as “Permitted Transfer”)
without the consent of Landlord, provided: (1) Tenant is not in default under
this Lease; (2) if such proposed transferee is a successor to Tenant by
purchase, said proposed transferee shall acquire all or substantially all of the
stock or assets of Tenant’s business or, if such proposed transferee is a
successor to Tenant by merger, consolidation or reorganization, the continuing
or surviving entity shall own all or substantially all of the assets of Tenant;
(3) with respect to a Permitted Transfer to a proposed transferee described in
clause (ii), such proposed transferee shall have a net worth which is at least
equal to the greater of Tenant’s net worth at the date of this Lease or Tenant’s
net worth as of the day prior to the proposed purchase, merger, consolidation or
reorganization as evidenced to Landlord’s reasonable satisfaction; and (4)
Tenant shall give Landlord written notice at least thirty (30) days prior to the
effective date of the proposed purchase, merger, consolidation or
reorganization.

 

12. Mechanic’s Liens. Tenant will not permit any mechanic’s liens or other liens
to be placed upon the Property. If a lien is attached to the Property, then, in
addition to any other right or remedy of Landlord, Landlord may, but shall not
be obligated to, discharge the same. Any amount paid by Landlord for any of the
aforesaid purposes including, but not limited to, reasonable attorneys’ fees,
shall be paid by Tenant to Landlord within thirty (30) days after demand as
Additional Rent. Tenant shall within ten (10) days of receiving such notice of
lien or claim have such lien or claim released of record. Tenant’s failure to
comply with the provisions of the foregoing sentence shall be deemed an Event of
Default entitling Landlord to exercise all of its remedies therefor without the
requirement of any additional notice or cure period.

 

13. Insurance.

 

A. Landlord shall, at all times during the Lease Term, procure and maintain: (i)
policies of insurance covering loss or damage to the Property in an amount equal
to the full

 

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replacement cost of the Building, including leasehold improvements in the
Premises, which shall provide protection against loss by fire and other all-risk
casualties including earthquake and flood and such other property insurance as
may be required by Landlord’s mortgagee or as otherwise desired by Landlord, and
(ii) commercial general liability insurance applicable to the Building and the
Common Areas, providing a minimum limit of $3,000,000.00 per occurrence.

 

B. Tenant shall procure and maintain, at its expense, (i) all-risk (special
form) property insurance in an amount equal to the full replacement cost of
Tenant’s Property located in the Premises; (ii) a policy or policies of general
liability and umbrella or excess liability insurance applying to Tenant’s
operations and use of the Premises, providing a minimum limit of $3,000,000.00
per occurrence and in the aggregate, naming Landlord and Landlord’s Building
manager as additional insureds, (iii) automobile liability insurance covering
owned, non-owned and hired vehicles in an amount not less than a combined single
limit of $1,000,000.00 per accident, and (iv) workers’ compensation insurance in
accordance with the laws of the State in which the Property is located and
employer’s liability insurance in an amount not less than $1,000,000.00 each
accident, $1,000,000.00 disease-each employee and policy limit, with the
insurance policies required under this clause (iv) to be endorsed to waive the
insurance carriers’ right of subrogation. Tenant shall maintain the foregoing
insurance coverages in effect commencing on the earlier to occur of the
Commencement Date and the date Tenant takes possession of the Premises, and
continuing to the end of the Lease Term.

 

C. The insurance requirements set forth in this Section 13 are independent of
the waiver, indemnification, and other obligations under this Lease and will not
be construed or interpreted in any way to restrict, limit or modify the waiver,
indemnification and other obligations or to in any way limit any party’s
liability under this Lease. In addition to the requirements set forth in
Sections 13 and 14, the insurance required of Tenant under this Lease must be
issued by an insurance company with a rating of no less than A-VIII in the
current Best’s Insurance Guide or that is otherwise acceptable to Landlord, and
admitted to engage in the business of insurance in the state in which the
Building is located; be primary insurance for all claims under it and provide
that any insurance carried by Landlord, Landlord’s Building manager, and
Landlord’s lenders is strictly excess, secondary and noncontributing with any
insurance carried by Tenant; and provide that insurance may not be cancelled,
nonrenewed or the subject of change in coverage of available limits of coverage,
except upon thirty (30) days’ prior written notice to Landlord and Landlord’s
lenders. Tenant will deliver to Landlord a legally enforceable certificate of
insurance on all policies procured by Tenant in compliance with Tenant’s
obligations under this Lease on or before the date Tenant first occupies any
portion of the Premises, at least ten (10) days before the expiration date of
any policy and upon the renewal of any policy. Landlord shall have the right to
approve all deductibles and self-insured retentions under Tenant’s policies,
which approval shall not be unreasonably withheld, conditioned or delayed.

 

D. Neither Landlord nor Tenant shall be liable (by way of subrogation or
otherwise) to the other party (or to any insurance company insuring the other
party) for any loss or damage to any of the property of Landlord or Tenant, as
the case may be, with

 

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respect to their respective property, the Building, the Property or the Premises
or any addition or improvements thereto, or any contents therein, to the extent
covered by insurance carried or required to be carried by a party hereto even
though such loss might have been occasioned by the negligence or willful acts or
omissions of the Landlord or Tenant or their respective employees, agents,
contractors or invitees. Landlord and Tenant shall give each insurance company
which issues policies of insurance, with respect to the items covered by this
waiver, written notice of the terms of this mutual waiver, and shall have such
insurance policies properly endorsed, if necessary, to prevent the invalidation
of any of the coverage provided by such insurance policies by reason of such
mutual waiver. For the purpose of the foregoing waiver, the amount of any
deductible applicable to any loss or damage shall be deemed covered by, and
recoverable by the insured under the insurance policy to which such deductible
relates.

 

14. Indemnity. To the extent not expressly prohibited by law, Landlord and
Tenant each (in either case, the “Indemnitor”) agree to hold harmless and
indemnify the other and the other’s agents, partners, shareholders, members,
officers, directors, beneficiaries and employees (collectively, the
“Indemnitees”) from any losses, damages, judgments, claims, expenses, costs and
liabilities imposed upon or incurred by or asserted against the Indemnitees,
including without limitation reasonable attorneys’ fees and expenses, for death
or injury to, or damage to property of, third parties, other than the
Indemnitees, that may arise from the negligence or willful misconduct of
Indemnitor or any of Indemnitor’s agents, members, partners or employees. Such
third parties shall not be deemed third party beneficiaries of this Lease. If
any action, suit or proceeding is brought against any of the Indemnitees by
reason of the negligence or willful misconduct of Indemnitor or any of
Indemnitor’s agents, members, partners or employees, then Indemnitor will, at
Indemnitor’s expense and at the option of said Indemnitees, by counsel
reasonably approved by said Indemnitees, resist and defend such action, suit or
proceeding. In addition, to the extent not expressly prohibited by law, Tenant
agrees to hold harmless and indemnify Landlord and Landlord’s Indemnitees from
any losses, damages, judgments, claims, expenses, costs and liabilities imposed
upon or incurred by or asserted against Landlord or Landlord’s Indemnitees,
including reasonable attorneys’ fees and expenses, for death or injury to, or
damage to property of, third parties (other than Landlord’s Indemnitees) that
may arise from any act or occurrence in the Premises, except to the extent
caused by the negligence or willful misconduct of Landlord or Landlord’s
Indemnitees.

 

15. Damages from Certain Causes. To the extent not expressly prohibited by law,
Landlord shall not be liable to Tenant or Tenant’s employees, contractors,
agents, invitees or customers, for any injury to person or damage to property
sustained by Tenant or any such party or any other person claiming through
Tenant resulting from any accident or occurrence in the Premises or any other
portion of the Building caused by the Premises or any other portion of the
Building becoming out of repair or by defect in or failure of equipment, pipes,
or wiring, or by broken glass, or by the backing up of drains, or by gas, water,
steam, electricity, or oil leaking, escaping or flowing into the Premises
(except where due to Landlord’s grossly negligent or willful failure to make
repairs required to be made pursuant to other provisions of this Lease, after
the expiration of a reasonable time after written notice to Landlord of the need
for such repairs), nor shall Landlord be liable to Tenant for any loss or damage
that may be occasioned by or through the acts or omissions of other tenants of
the Building or of any other persons whomsoever, including,

 

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but not limited to riot, strike, insurrection, war, court order, requisition,
order of any governmental body or authority, acts of God, fire or theft.

 

16. Casualty Damage. If the Premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall give prompt written notice thereof to
Landlord. In case the Building shall be so damaged that substantial alteration
or reconstruction of the Building shall, in Landlord’s sole opinion, be required
(whether or not the Premises shall have been damaged by such casualty) or in the
event there is less than two (2) years of the Lease Term remaining or in the
event Landlord’s mortgagee should require that the insurance proceeds payable as
a result of a casualty be applied to the payment of the mortgage debt or in the
event of any material uninsured loss to the Building, Landlord may, at its
option, terminate this Lease by notifying Tenant in writing of such termination
within ninety (90) days after the date of such casualty. If Landlord does not
thus elect to terminate this Lease, Landlord shall commence and proceed with
reasonable diligence to restore the Building, and the improvements located
within the Premises to substantially the same condition in which it was
immediately prior to the happening of the casualty. Notwithstanding the
foregoing, Landlord’s obligation to restore the Building, and the improvements
located within the Premises shall not require Landlord to expend for such repair
and restoration work more than the insurance proceeds actually received by
Landlord as a result of the casualty. When the repairs described in the
preceding two sentences have been completed by Landlord, Tenant shall complete
the restoration of all furniture, fixtures and equipment which are necessary to
permit Tenant’s reoccupancy of the Premises. Landlord shall not be liable for
any inconvenience or annoyance to Tenant or injury to the business of Tenant
resulting in any way from such damage or the repair thereof, except that Rent
shall be abated from the date of the damage or destruction for any portion of
the Premises that is unusable by Tenant, which abatement shall be in the same
proportion that the Rentable Area of the Premises which is unusable by Tenant
bears to the total Rentable Area of the Premises; provided that Tenant shall not
be entitled to any abatement of Rent if the damage or destruction within the
Premises is restored within five (5) Business Days after Landlord’s receipt of
written notice from Tenant of the occurrence of the damage or destruction.

 

17. Condemnation. If the whole or any substantial part of the Premises or if the
Building or any portion thereof which would leave the remainder of the Building
unsuitable for use comparable to its use on the Commencement Date, or if the
land on which the Building is located or any material portion thereof, shall be
taken or condemned for any public or quasi-public use under governmental law,
ordinance or regulation, or by right of eminent domain, or by private purchase
in lieu thereof, then Landlord may, at its option, terminate this Lease and Rent
shall be abated during the unexpired portion of this Lease, effective when the
physical taking of said Premises or said portion of the Building or land shall
occur. If this Lease is not terminated, the Rent for any portion of the Premises
so taken or condemned shall be abated during the unexpired Lease Term effective
when the physical taking of said portion of the Premises shall occur. All
compensation awarded for any taking or condemnation, or sale proceeds in lieu
thereof, shall be the property of Landlord, and Tenant shall have no claim
thereto, the same being hereby expressly waived by Tenant, except for any
portions of such award or proceeds which are specifically allocated by the
condemning or purchasing party for the taking of or damage to trade fixtures of
Tenant and moving costs, which Tenant specifically reserves to itself.

 

18. Events of Default. The following events shall be deemed to be “Events of
Default” under this Lease: (i) Tenant fails to pay any Rent when due; provided
that the first (1st)

 

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such failure during any consecutive twelve (12) month period during the Term
shall not be an Event of Default if Tenant pays the amount due within five (5)
days after Tenant’s receipt of written notice from Landlord that such payment
was not made when due; (ii) Tenant fails to perform any other provision of this
Lease not described in this Section 18, and such failure is not cured within
thirty (30) days (or immediately if the failure involves a hazardous condition)
after notice from Landlord, however, other than with respect to a hazardous
condition, if Tenant’s failure to comply cannot reasonably be cured within
thirty (30) days, Tenant shall be allowed additional time (not to exceed thirty
(30) additional days) as is reasonably necessary to cure the failure so long as
Tenant begins the cure within thirty (30) days and diligently pursues the cure
to completion; (iii) Tenant fails to observe or perform any of the covenants
with respect to (a) assignment and subletting as set forth in Section 11, (b)
mechanic’s liens as set forth in Section 12, (c) insurance as set forth in
Section 13 or (d) delivering subordination agreements or estoppel certificates
as set forth in Section 24; (iv) the leasehold interest of Tenant is levied upon
or attached under process of law; (v) Tenant or any guarantor of this Lease dies
or dissolves; (vi) Tenant abandons or vacates the Premises; or (vii) any
voluntary or involuntary proceedings are filed by or against Tenant or any
guarantor of this Lease under any bankruptcy, insolvency or similar laws and, in
the case of any involuntary proceedings, are not dismissed within sixty (60)
days after filing.

 

19. Remedies.

 

A. Upon the occurrence of any Event of Default, Landlord shall have the
following rights and remedies, in addition to those allowed by law or equity,
any one or more of which may be exercised without further notice to or demand
upon Tenant and which may be pursued successively or cumulatively as Landlord
may elect:

 

  (1) Landlord may re-enter the Premises and attempt to cure any default of
Tenant, in which event Tenant shall, upon demand, reimburse Landlord as
Additional Rent for all reasonable costs and expenses which Landlord incurs to
cure such default;

 

  (2) Landlord may terminate this Lease by giving to Tenant notice of Landlord’s
election to do so, in which event the Lease Term shall end, and all right, title
and interest of Tenant hereunder shall expire, on the date stated in such
notice;

 

  (3) Landlord may terminate the right of Tenant to possession of the Premises
without terminating this Lease by giving notice to Tenant that Tenant’s right to
possession shall end on the date stated in such notice, whereupon the right of
Tenant to possession of the Premises or any part thereof shall cease on the date
stated in such notice; and

 

  (4) Landlord may enforce the provisions of this Lease by a suit or suits in
equity or at law for the specific performance of any covenant or agreement
contained herein, or for the enforcement of any other appropriate legal or
equitable remedy, including recovery of all moneys due or to become due from
Tenant under any of the provisions of this Lease.

 

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Landlord shall not be required to serve Tenant with any notices or demands as a
prerequisite to its exercise of any of its rights or remedies under this Lease,
other than those notices and demands specifically required under this Lease.
TENANT EXPRESSLY WAIVES THE SERVICE OF ANY STATUTORY DEMAND OR NOTICE WHICH IS A
PREREQUISITE TO LANDLORD’S COMMENCEMENT OF EVICTION PROCEEDINGS AGAINST TENANT,
INCLUDING THE DEMANDS AND NOTICES SPECIFIED IN ANY APPLICABLE STATE STATUTE OR
CASE LAW. TENANT WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LAWSUIT BROUGHT BY
LANDLORD TO RECOVER POSSESSION OF THE PREMISES FOLLOWING LANDLORD’S TERMINATION
OF THIS LEASE OR THE RIGHT OF TENANT TO POSSESSION OF THE PREMISES PURSUANT TO
THE TERMS OF THIS LEASE AND ON ANY CLAIM FOR DELINQUENT RENT WHICH LANDLORD MAY
JOIN IN ITS LAWSUIT TO RECOVER POSSESSION.

 

B. If Landlord exercises either of the remedies provided in Sections 19A(2) or
19A(3), Tenant shall surrender possession and vacate the Premises and
immediately deliver possession thereof to Landlord, and Landlord may re-enter
and take complete and peaceful possession of the Premises, with process of law,
and Landlord may remove all occupants and property therefrom, using such force
as may be necessary to the extent allowed by law, without being deemed guilty in
any manner of trespass, eviction or forcible entry and detainer and without
relinquishing Landlord’s right to Rent or any other right given to Landlord
hereunder or by operation of law.

 

C. If Landlord terminates the right of Tenant to possession of the Premises
without terminating this Lease, Landlord shall have the right to immediate
recovery of all amounts then due hereunder. Such termination of possession shall
not release Tenant, in whole or in part, from Tenant’s obligation to pay Rent
hereunder for the full Lease Term, and Landlord shall have the right, from time
to time, to recover from Tenant, and Tenant shall remain liable for, all Rent
accruing as it becomes due under this Lease during the period from the date of
such notice of termination of possession to the stated end of the Lease Term. In
any such case, Landlord shall make reasonable efforts, in accordance with
Section 19E hereof, to relet the Premises. In attempting to relet the Premises,
Landlord may make repairs, alterations and additions in or to the Premises and
redecorate the same to the extent reasonably deemed by Landlord necessary or
desirable, and Tenant upon demand shall pay the reasonable cost of all of the
foregoing together with Landlord’s reasonable expenses of reletting. The rents
from any such reletting shall be applied first to the payment of the expenses of
reentry, redecoration, repair and alterations and the expenses of reletting
(including reasonable attorneys’ fees and brokers’ fees and commissions) and
second to the payment of Rent herein provided to be paid by Tenant. Any excess
or residue shall operate only as an offsetting credit against the amount of Rent
due and owing as the same thereafter becomes due and payable hereunder.

 

D. If this Lease is terminated by Landlord, Landlord shall be entitled to
recover from Tenant all Rent accrued and unpaid for the period up to and
including such termination date, as well as all other additional sums payable by
Tenant, or for which Tenant is liable or for which Tenant has agreed to
indemnify Landlord, which may be then owing and unpaid, and all reasonable costs
and expenses, including court costs and

 

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reasonable attorneys’ fees incurred by Landlord in the enforcement of its rights
and remedies hereunder. In addition, Landlord shall be entitled to recover as
damages for loss of the bargain and not as a penalty (1) the unamortized portion
of any concessions offered by Landlord to Tenant in connection with this Lease,
including without limitation Landlord’s contribution to the cost of tenant
improvements, if any, installed by either Landlord or Tenant pursuant to this
Lease or any work letter in connection with this Lease, (2) the aggregate sum
which at the time of such termination represents the excess, if any, of the
present value of the aggregate Rent which would have been payable after the
termination date had this Lease not been terminated, including, without
limitation, the amount projected by Landlord to represent Additional Rent for
the remainder of the Lease Term, over the then present value of the then
aggregate fair rent value of the Premises for the balance of the Lease Term,
such present worth to be computed in each case on the basis of a ten percent
(10%) per annum discount from the respective dates upon which such Rent would
have been payable hereunder had this Lease not been terminated, and (3) any
damages in addition thereto, including without limitation reasonable attorneys’
fees and court costs, which Landlord sustains as a result of the breach of any
of the covenants of this Lease other than for the payment of Rent.

 

E. Landlord shall use commercially reasonable efforts to mitigate any damages
resulting from an Event of Default by Tenant under this Lease. Landlord’s
obligation to mitigate damages after an Event of Default by Tenant under this
Lease shall be satisfied in full if Landlord undertakes to lease the Premises to
another tenant (a “Substitute Tenant”) in accordance with the following
criteria: (1) Landlord shall have no obligation to solicit or entertain
negotiations with any other prospective tenants for the Premises until Landlord
obtains full and complete possession of the Premises including, without
limitation, the final and unappealable legal right to relet the Premises free of
any claim of Tenant; (2) Landlord shall not be obligated to lease or show the
Premises, on a priority basis, or offer the Premises to a prospective tenant
when other premises in the Building suitable for that prospective tenant’s use
are (or soon will be) available; (3) Landlord shall not be obligated to lease
the Premises to a Substitute Tenant for a rent less than the current fair market
rent then prevailing for similar uses in comparable buildings in the same market
area as the Building, nor shall Landlord be obligated to enter into a new lease
under other terms and conditions that are unacceptable to Landlord under
Landlord’s then current leasing policies for comparable space in the Building;
(4) Landlord shall not be obligated to enter into a lease with a Substitute
Tenant whose use would: (i) violate any restriction, covenant, or requirement
contained in the lease of another tenant of the Building; (ii) adversely affect
the reputation of the Building; or (iii) be incompatible with the operation of
the Building; and (5) Landlord shall not be obligated to enter into a lease with
any proposed Substitute Tenant which does not have, in Landlord’s reasonable
opinion, sufficient financial resources to operate the Premises in a first class
manner and to fulfill all of the obligations in connection with the lease
thereof as and when the same become due.

 

F. The receipt by Landlord of less than the full Rent due shall not be construed
to be other than a payment on account of Rent then due, nor shall any statement
on Tenant’s check or any letter accompanying Tenant’s check be deemed an accord
and satisfaction, and Landlord may accept such payment without prejudice to
Landlord’s right to recover the balance of the Rent due or to pursue any other
remedies provided in this Lease. The

 

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acceptance by Landlord of Rent hereunder shall not be construed to be a waiver
of any breach by Tenant of any term, covenant or condition of this Lease. No act
or omission by Landlord or its employees or agents during the Lease Term shall
be deemed an acceptance of a surrender of the Premises, and no agreement to
accept such a surrender shall be valid unless in writing and signed by Landlord.

 

G. To the extent allowed by law, all installments of Rent not paid when due
shall bear interest at the Default Rate from the date due until paid. In the
event of any litigation between Tenant and Landlord to enforce or interpret any
provision of this Lease or to enforce any right of either party hereto, the
unsuccessful party to such litigation shall pay to the successful party all
costs and expenses, including reasonable attorney’s fees, incurred therein.

 

20. No Waiver. Failure of either party to declare any default immediately upon
its occurrence, or delay in taking any action in connection with an event of
default, shall not constitute a waiver of such default, nor shall it constitute
an estoppel against the non-defaulting party, but the non-defaulting party shall
have the right to declare the default at any time and take such action as is
lawful or authorized under this Lease. Failure by the non-defaulting party to
enforce its rights with respect to any one default shall not constitute a waiver
of its rights with respect to any subsequent default.

 

21. Peaceful Enjoyment. Tenant shall, and may peacefully have, hold, and enjoy
the Premises, subject to the other terms hereof, provided that Tenant pays the
Rent and other sums herein recited to be paid by Tenant and timely performs all
of Tenant’s covenants and agreements herein contained.

 

22. Substitution. Landlord at its sole discretion shall be entitled to cause
Tenant to relocate from the Premises to a comparably-sized space, of comparable
design and tenant improvements (the “Relocation Space”) within the Building or
adjacent buildings within the same Property at any time upon sixty (60) days’
prior written notice to Tenant. The reasonable costs actually incurred in
connection with the buildout of the Relocation Space and the physical relocation
of Tenant to the Relocation Space shall be at the expense of Landlord. Such a
relocation shall not terminate or otherwise affect or modify this Lease except
that from and after the date of such relocation, “Premises” shall refer to the
Relocation Space into which Tenant has been moved, rather than the original
Premises as herein defined and the Base Rent shall be adjusted so that
immediately following such relocation the Base Rent for the Relocation Space on
a per square foot of rentable area basis shall be the same as the Base Rent
immediately prior to such relocation for the original Premises on a per square
foot of rentable area basis. Tenant’s Pro Rata Share shall also be adjusted in
accordance with the formula set forth in this Lease.

 

23. Holding Over. If Tenant continues to occupy the Premises after the
expiration or other termination of this Lease or the termination of Tenant’s
right of possession, such occupancy shall be that of a tenancy at sufferance.
Tenant shall, throughout the entire holdover period, be subject to all the terms
and provisions of this Lease and shall pay for its use and occupancy an amount
(on a per month basis without reduction for any partial months during any such
holdover) equal to one hundred fifty percent (150%) of the Base Rent and
Additional Rent due under this Lease for the last full month of the term hereof
during the first thirty (30) days of such holdover,

 

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and two hundred percent (200%) of such Base Rent and Additional Rent thereafter
during such holdover. No holding over by Tenant or payments of money by Tenant
to Landlord after the expiration of the Lease Term shall be construed to extend
the Lease Term or prevent Landlord from recovery of immediate possession of the
Premises by summary proceedings or otherwise. Tenant shall also be liable to
Landlord for all direct and consequential damages which Landlord may suffer by
reason of any holding over by Tenant.

 

24. Subordination to Mortgage; Estoppel Certificate. Tenant accepts this Lease
subject and subordinate to any ground lease, mortgage, deed of trust or other
lien presently existing or hereafter arising upon the Premises, or upon the
Building or the Property and to any renewals, modifications, refinancings and
extensions thereof, but Tenant agrees that any such mortgagee shall have the
right at any time to subordinate such mortgage, deed of trust or other lien to
this Lease on such terms and subject to such conditions as such mortgagee may
deem appropriate in its discretion. The provisions of the foregoing sentence
shall be self-operative and no further instrument of subordination shall be
required. However, Landlord is hereby irrevocably vested with full power and
authority to subordinate this Lease to any mortgage, deed of trust or other lien
now existing or hereafter placed upon the Premises, or the Building or the
Property and Tenant agrees within ten (10) days after written demand to execute
such further instruments subordinating this Lease or attorning to the holder of
any such liens as Landlord may request. If Tenant fails to execute any
subordination or other agreement required by this Section promptly as requested,
Tenant hereby irrevocably constitutes Landlord as its attorney-in-fact to
execute such instrument in Tenant’s name, place and stead, it being agreed that
such power is coupled with an interest in Landlord and is accordingly
irrevocable. In addition, if Tenant fails to deliver any subordination or other
agreement required by this Section within three (3) business days after receipt
of a second request from Landlord, then Tenant shall pay Landlord, as additional
rent, a $100 per day penalty from the end of the three business-day period until
the date such documents are signed and received by Landlord. Tenant agrees that
it shall from time-to-time furnish within ten (10) days after so requested by
Landlord, a certificate signed by Tenant certifying as to such matters as may be
reasonably requested by Landlord. Any such certificate may be relied upon by any
ground lessor, prospective purchaser, secured party, mortgagee or any
beneficiary under any mortgage, deed of trust on the Building or the Property or
any part thereof or interest of Landlord therein.

 

25. Notice. Any notice required or permitted to be given under this Lease or by
law shall be deemed to have been given if it is written and delivered in person
or mailed by Registered or Certified mail, postage prepaid, or sent by a
nationally recognized overnight delivery service to the party who is to receive
such notice at the address specified in Section 1 of this Lease (and, if no
address is listed for Tenant, notices to Tenant shall be delivered to the
Premises). When so mailed, the notice shall be deemed to have been given two (2)
Business Days after the date it was mailed. When sent by overnight delivery
service, the notice shall be deemed to have been given on the next Business Day
after deposit with such overnight delivery service. The address specified in
Section 1 of this Lease may be changed from time to time by giving written
notice thereof to the other party. Notices required hereunder by Landlord may be
given by Landlord’s agent or attorney.

 

26. Surrender of Premises. Upon the termination of the Lease Term, or upon any
termination of Tenant’s right to possession of the Premises, Tenant will at once
surrender possession of the Premises to Landlord in good condition and repair,
ordinary wear and tear

 

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excepted. Tenant shall surrender to Landlord all keys to the Premises and make
known to Landlord the combination of all combination locks which Tenant is
required to leave on the Premises.

 

27. Rights Reserved to Landlord. Landlord reserves the following rights,
exercisable without notice, except as provided herein, and without liability to
Tenant for damage or injury to property, person or business and without
affecting an eviction or disturbance of Tenant’s use or possession or giving
rise to any claim for setoff or abatement of Rent or affecting any of Tenant’s
obligations under this Lease: (1) upon thirty (30) days’ prior notice to change
the name or street address of the Building; (2) to install and maintain signs on
the exterior and interior of the Building; (3) to designate and approve window
coverings to present a uniform exterior appearance; (4) to retain at all times
and to use in appropriate instances, pass keys to all door locks within and to
the Premises; (5) to approve the weight, size, or location of heavy equipment,
or articles within the Premises; (6) to change the arrangement and location of
entrances of passageways, doors and doorways, corridors, elevators, stairs,
toilets and public parts of the Building or Property; (7) to regulate access to
telephone, electrical and other utility closets in the Building and to require
use of designated contractors for any work involving access to the same; (8) if
Tenant has vacated the Premises during the last six (6) months of the Lease
Term, to perform additions, alterations and improvements to the Premises in
connection with a reletting or anticipated reletting thereof without being
responsible or liable for the value or preservation of any then existing
improvements to the Premises and without effectuating a surrender or entitling
Tenant to any abatement of Rent; (9) to grant to anyone the exclusive right to
conduct any business or undertaking in the Building provided Landlord’s exercise
of its rights under this clause (9), shall not be deemed to prohibit Tenant from
the operation of its business in the Premises; (10) to enter the Premises to
inspect the same or to show the Premises to prospective purchasers, mortgagees,
tenants (during the last twelve months of the Lease Term) or insurers, or to
clean or make repairs, alterations or additions thereto, provided that, except
for any entry in an emergency situation or to provide normal cleaning and
janitorial service, Landlord shall provide Tenant with reasonable prior notice
of any entry into the Premises; and (11) to temporarily close the Premises or
the Building to perform repairs, alterations or additions in the Premises or the
Building. In exercising its rights under this Section 27, Landlord shall make
commercially reasonable efforts to avoid unreasonably interfering with Tenant’s
business operations in the Premises.

 

28. Miscellaneous.

 

A. If any term or provision of this Lease, or the application thereof, shall, to
any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision, shall not be affected thereby, and each
term and provision of this Lease shall be valid and enforced to the fullest
extent permitted by law.

 

B. Tenant agrees not to record this Lease or any short form or memorandum
hereof.

 

C. This Lease and the rights and obligations of the parties hereto shall be
interpreted, construed, and enforced in accordance with the laws of the state in
which the Building is located.

 

19

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D. The term “Force Majeure” shall mean strikes, riots, acts of God, shortages of
labor or materials, war, acts of terrorism, governmental laws, regulations or
restrictions, or any other cause whatsoever beyond the control of Landlord or
Tenant, as the case may be. Whenever a period of time is herein prescribed for
the taking of any action by Landlord or Tenant (other than the payment of Rent
and all other such sums of money as shall become due hereunder), such party
shall not be liable or responsible for, and there shall be excluded from the
computation of such period of time, any delays due to events of Force Majeure.

 

E. Except as expressly otherwise herein provided, with respect to all required
acts of Tenant, time is of the essence of this Lease.

 

F. Landlord shall have the right to transfer and assign, in whole or in part,
all of its rights and obligations hereunder and in the Building and Property
referred to herein, and in such event and upon such transfer Landlord shall be
released from any further obligations hereunder, and Tenant agrees to look
solely to such successor in interest of Landlord for the performance of such
obligations.

 

G. Tenant hereby represents to Landlord that it has dealt directly with and only
with the Broker as a broker in connection with this Lease. Landlord and Tenant
hereby indemnify and hold each other harmless against any loss, claim, expense
or liability with respect to any commissions or brokerage fees claimed by any
broker or finder other than the Broker on account of the execution and/or
renewal of this Lease due to any action of the indemnifying party.

 

H. If there is more than one Tenant, or if Tenant as such is comprised of more
than one person or entity, the obligations hereunder imposed upon Tenant shall
be joint and several obligations of all such parties. All notices, payments, and
agreements given or made by, with or to any one of such persons or entities
shall be deemed to have been given or made by, with or to all of them.

 

I. Tenant acknowledges that the financial capability of Tenant to perform its
obligations hereunder is material to Landlord and that Landlord would not enter
into this Lease but for its belief, based on its review of Tenant’s financial
statements, that Tenant is capable of performing such financial obligations.
Tenant hereby represents, warrants and certifies to Landlord that its financial
statements previously furnished to Landlord were at the time given true and
correct in all material respects and that there have been no material subsequent
changes thereto as of the date of this Lease. In the event of a proposed sale or
other transfer, financing or refinancing by Landlord of the Building, where the
proposed lender or purchaser requests tenant financial statements, within ten
(10) days after Landlord’s request, Tenant shall deliver to Landlord the most
current year-end financial statements of Tenant and any guarantor of this Lease.

 

J. Notwithstanding anything to the contrary contained in this Lease, the
expiration of the Lease Term, whether by lapse of time or otherwise, shall not
relieve Tenant from Tenant’s obligations accruing prior to the expiration of the
Lease Term, and such obligations shall survive any such expiration or other
termination of the Lease Term.

 

20

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K. Landlord and Tenant understand, agree and acknowledge that (i) this Lease has
been freely negotiated by both parties; and (ii) in any controversy, dispute or
contest over the meaning, interpretation, validity, or enforceability of this
Lease or any of its terms or conditions, there shall be no inference,
presumption, or conclusion drawn whatsoever against either party by virtue of
that party having drafted this Lease or any portion thereof.

 

L. The headings and titles to the paragraphs of this Lease are for convenience
only and shall have no affect upon the construction or interpretation of any
part hereof. The term “including” shall be deemed to mean “including without
limitation”.

 

M. Tenant certifies that (i) it is not acting, directly or indirectly, for or on
behalf of any person, group, entity or nation named by any Executive Order or
the United States Treasury Department as a terrorist, “Specifically Designated
National and Blocked Person,” or other banned or blocked person, entity, nation
pursuant to any law, order, rule, or regulation that is enforced or administered
by the Office of Foreign Assets Control; and (ii) it is not engaged in this
transaction, directly or indirectly, on behalf of or instigating or facilitating
this transaction, directly or indirectly, on behalf of, any such person, group,
entity or nation. Tenant hereby agrees to defend, indemnify, and hold harmless
Landlord from and against any and all claims, damages, losses, risks,
liabilities, and expenses (including attorney’s fees and costs) arising from or
related to any breach of the foregoing certification.

 

29. No Offer. Landlord has delivered a copy of this Lease to Tenant for Tenant’s
review only, and the delivery hereof does not constitute an offer to Tenant or
an option. This Lease shall not be effective until an original of this Lease
executed by both Landlord and Tenant and an original Guaranty, if applicable,
executed by each Guarantor is delivered to and accepted by Landlord, and this
Lease has been approved by Landlord’s mortgagee, if required.

 

30. Entire Agreement. This Lease, including the Exhibits attached hereto,
constitutes the entire agreement between the parties hereto with respect to the
subject matter of this Lease and supersedes all prior agreements and
understandings between the parties related to the Premises, including all lease
proposals, letters of intent and similar documents. Tenant expressly
acknowledges and agrees that Landlord has not made and is not making, and
Tenant, in executing and delivering this Lease, is not relying upon, any
warranties, representations, promises or statements, except to the extent that
the same are expressly set forth in this Lease. This Lease may be modified only
by a written agreement signed by Landlord and Tenant. Landlord and Tenant
expressly agree that there are and shall be no implied warranties of
merchantability, habitability, suitability, fitness for a particular purpose or
of any other kind arising out of this Lease, all of which are hereby waived by
Tenant, and that there are no warranties which extend beyond those expressly set
forth in this Lease.

 

31. Limitation of Liability. Any liability of Landlord under this Lease shall be
limited solely to its interest in the Property, and in no event shall any
personal liability be asserted against Landlord, its members, or their
respective members, partners, shareholders, officers, directors, agents or
employees, in connection with this Lease nor shall any recourse be had to any
other property or assets of Landlord, its members, or their respective members,
partners, shareholders, officers, directors, agents or employees. In no event
shall Landlord be liable for consequential or

 

21

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punitive damages as a result of a breach or default under or otherwise in
connection with this Lease.

 

[SIGNATURE PAGE FOLLOWS]

 

22

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day
and year first above written.

 

LANDLORD:   TENANT:

TRANSWESTERN GREAT LAKES, L.P.,

a Delaware limited partnership

 

SYNPLICITY, INC., a

California corporation

By:  

Transwestern Great Lakes GP,

L.L.C., a Maryland limited

liability company, its general

partner

 

By:

 

 

/s/ Douglas S. Miller

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

        Name:   Douglas S. Miller         Title:   Sr. Vice President Finance,
CFO By:  

Transwestern Investment

Company, L.L.C., its authorized

agent

        By:  

/s/ Andrew J. Hess

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

        Name:   Andrew J. Hess         Title:   Vice President        
WITNESS/ATTEST   WITNESS/ATTEST By:  

/s/ Suzanne E. Gollan

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

  By:  

/s/ Penny Miller

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

Name:   Suzanne E. Gollan   Name:   Penny Miller Title:   Administrative Assoc.
  Title:   Corporate Services Manager

 

23

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EXHIBIT A

 

OUTLINE AND LOCATION OF PREMISES

 

LOGO [g36765imge001.jpg]

 

Lisle Executive Center

3030 Warrenville Road

Lisle, Illinois

 

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EXHIBIT B

 

RULES AND REGULATIONS

 

The following rules and regulations shall apply, where applicable, to the
Premises, the Building, the parking areas associated therewith (if any), the
Property and the appurtenances thereto:

 

1. Sidewalks, entrances, passageways, courts, corridors, vestibules, halls,
elevators and stairways in and about the Building shall not be obstructed nor
shall objects be placed against glass partitions, doors or windows which would
be unsightly from the Building’s corridors or from the exterior of the Building.

 

2. Plumbing, fixtures and appliances shall be used for only the purpose for
which they were designed and no foreign substance of any kind whatsoever shall
be thrown or placed therein. Damage resulting to any such fixtures or appliances
from misuse by Tenant or its agents, employees or invitees, shall be paid for by
Tenant and Landlord shall not in any case be responsible therefor.

 

3. Any sign, lettering, picture, notice or advertisement installed within the
Premises which is visible from the public corridors within the Building shall be
installed in such manner, and be of such character and style, as Landlord shall
approve, in writing in its reasonable discretion. No sign, lettering, picture,
notice or advertisement shall be placed on any outside window or door or in a
position to be visible from outside the Building. No nails, hooks or screws
(except for customary artwork or wall hangings) shall be driven or inserted into
any part of the Premises or Building except by Building maintenance personnel,
nor shall any part of the Building be defaced or damaged by Tenant.

 

4. Tenant shall not place any additional lock or locks on any door in the
Premises or Building without Landlord’s prior written consent. A reasonable
number of keys to the locks on the doors in the Premises shall be furnished by
Landlord to Tenant at the cost of Tenant, and Tenant shall not have any
duplicate keys made. All keys and passes shall be returned to Landlord at the
expiration or earlier termination of the Lease.

 

5. Tenant shall refer all contractors, contractors’ representatives and
installation technicians to Landlord for Landlord’s supervision, approval and
control before the performance of any contractual services. This provision shall
apply to all work performed in the Building including, but not limited to
installation of telephones, telegraph equipment, electrical devices and
attachments, doors, entranceways, and any and all installations of every nature
affecting floors, walls, woodwork, window trim, ceilings, equipment and any
other physical portion of the Building. Tenant shall not waste electricity,
water or air conditioning. All controls shall be adjusted only by Building
personnel.

 

6. Movement in or out of the Building of furniture or office equipment, or
dispatch or receipt by Tenant of any merchandise or materials which require the
use of elevators, stairways, lobby areas, or loading dock areas, shall be
restricted to hours designated by Landlord. Tenant must seek Landlord’s prior
approval by providing in writing a detailed listing of such activity. If
approved by Landlord, such activity shall be under the supervision of Landlord
and performed in the manner stated by Landlord. Landlord may prohibit any
article, equipment or

 

B-1

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any other item from being brought into the Building. Tenant is to assume all
risk for damage to articles moved and injury to persons resulting from such
activity. If any equipment, property and/or personnel of Landlord or of any
other tenant is damaged or injured as a result of or in connection with such
activity, Tenant shall be solely liable for any and all damage or loss resulting
therefrom.

 

7. All corridor doors, when not in use, shall remain closed. Tenant shall cause
all doors to the Premises to be closed and securely locked before leaving the
Building at the end of the day.

 

8. Tenant shall keep all electrical and mechanical apparatus owned by Tenant
free of vibration, noise and airwaves which may be transmitted beyond the
Premises.

 

9. Canvassing, soliciting and peddling in or about the Building or Property is
prohibited. Tenant shall cooperate and use its best efforts to prevent the same.

 

10. Tenant shall not use the Premises in any manner which would overload the
standard heating, ventilating or air conditioning systems of the Building.

 

11. Tenant shall not utilize any equipment or apparatus in such manner as to
create any magnetic fields or waves which adversely affect or interfere with the
operation of any systems or equipment in the Building or Property.

 

12. Bicycles and other vehicles are not permitted inside or on the walkways
outside the Building, except in those areas specifically designated by Landlord
for such purposes.

 

13. Tenant shall not operate or permit to be operated within the Premises any
coin or token operated vending machine or similar device (including, without
limitation, telephones, lockers, toilets, scales, amusements devices and
machines for sale of beverages, foods, candy, cigarettes or other goods), except
for those vending machines or similar devices which are for the sole and
exclusive use of Tenant’s employees, and then only if such operation does not
violate the lease of any other tenant in the Building.

 

14. Tenant shall utilize the termite and pest extermination service designated
by Landlord to control termites and pests in the Premises. Except as included in
Basic Costs, Tenant shall bear the cost and expense of such extermination
services.

 

15. Tenant shall not open or permit to be opened any window in the Premises.
This provision shall not be construed as limiting access of Tenant to any
balcony adjoining the Premises.

 

16. To the extent permitted by law, Tenant shall not permit picketing or other
union activity involving its employees or agents in the Building or on the
Property, except in those locations and subject to time and other constraints as
to which Landlord may give its prior written consent, which consent may be
withheld in Landlord’ sole discretion.

 

17. Tenant shall comply with all applicable laws, ordinances, governmental
orders or regulations and applicable orders or directions from any public office
or body having

 

B-2

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jurisdiction, with respect to the Premises, the Building, the Property and their
respective use or occupancy thereof. Tenant shall not make or permit any use of
the Premises, the Building or the Property, respectively, which is directly or
indirectly forbidden by law, ordinance, governmental regulation or order, or
direction of applicable public authority, or which may be dangerous to person or
property.

 

18. Tenant shall not use or occupy the Premises in any manner or for any purpose
which would injure the reputation or impair the present or future value of the
Premises, the Building or the Property; without limiting the foregoing, Tenant
shall not use or permit the Premises or any portion thereof to be used for
lodging, sleeping or for any illegal purpose.

 

19. All deliveries to or from the Premises shall be made only at times, in the
areas and through the entrances and exits designated for such purposes by
Landlord. Tenant shall not permit the process of receiving deliveries to or from
the Premises outside of said areas or in a manner which may interfere with the
use by any other tenant of its premises or any Common Areas, any pedestrian use
of such area, or any use which is inconsistent with good business practice.

 

20. Tenant shall carry out Tenant’s permitted repair, maintenance, alterations,
and improvements in the Premises only during times agreed to in advance by
Landlord and in a manner which will not interfere with the rights of other
tenants in the Building.

 

21. Landlord may from time to time adopt appropriate systems and procedures for
the security or safety of the Building, its occupants, entry and use, or its
contents. Tenant, Tenant’s agents, employees, contractors, guests and invitees
shall comply with Landlord’s reasonable requirements thereto.

 

22. Landlord shall have the right to prohibit the use of the name of the
Building or any other publicity by Tenant that in Landlord’s opinion may tend to
impair the reputation of the Building or its desirability for Landlord or its
other tenants. Upon written notice from Landlord, Tenant will refrain from
and/or discontinue such publicity immediately.

 

23. Neither Tenant nor any of its employees, agents, contractors, invitees or
customers shall smoke in any area designated by Landlord (whether through the
posting of a “no smoking” sign or otherwise) as a “no smoking” area. In no event
shall Tenant or any of its employees, agents, contractors, invitees or customers
smoke in the hallways or bathrooms of the Building or at the entrances to the
Building. Landlord reserves the right to designate, from time to time,
additional areas of the Building and the Property as “no smoking” areas and to
designate the entire Building and the Property as a “no smoking” area.

 

[END OF EXHIBIT B]

 

B-3

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EXHIBIT C

 

PAYMENT OF BASIC COSTS

 

A. During each calendar year, or portion thereof, falling within the Lease Term,
Tenant shall pay to Landlord as Additional Rent hereunder Tenant’s Pro Rata
Share of the amount by which (a) Basic Costs (as defined below) for the
applicable calendar year exceeds Basic Costs for the Base Year, and (b) Taxes
(as defined below) for the applicable calendar year exceeds Taxes for the Base
Year. Prior to the Commencement Date, or as soon as practical thereafter, and
prior to January 1 of each calendar year during the Lease Term, or as soon as
practical thereafter, Landlord shall make a good faith estimate of Basic Costs
and Taxes for the applicable full or partial calendar year and Tenant’s Pro Rata
Shares thereof. On or before the first day of each month during such calendar
year, Tenant shall pay Landlord, as Additional Rent, a monthly installment equal
to one-twelfth of Tenant’s Pro Rata Share of (1) Landlord’s estimate of the
amount by which Basic Costs for such calendar year will exceed Basic Costs for
the Base Year, and (2) Landlord’s estimate of the amount by which Taxes for such
calendar year will exceed Taxes for the Base Year. Landlord shall have the right
from time to time during any such calendar year to reasonably revise the
estimate of Basic Costs and Taxes for such year and provide Tenant with a
revised statement therefor (provided, however, Landlord agrees that Landlord
shall not issue a revised statement more than twice in any calendar year for
Basic Costs and twice in any calendar year for Taxes), and thereafter the amount
Tenant shall pay each month shall be based upon such revised estimate. If
Landlord does not provide Tenant with an estimate of the Basic Costs and/or
Taxes by January 1 of any calendar year, Tenant shall continue to pay a monthly
installment based on the previous year’s estimate until such time as Landlord
provides Tenant with an estimate of Basic Costs and/or Taxes for the current
year. Upon receipt of such current year’s estimate, an adjustment shall be made
for any month during the current year with respect to which Tenant paid monthly
installments of Additional Rent based on the previous year’s estimate. Tenant
shall pay Landlord for any underpayment within thirty (30) days after Landlord’s
written demand. Any overpayment of Additional Rent shall, at Landlord’s option,
be refunded to Tenant or credited against the installments of Additional Rent
next coming due under the Lease. Any amount paid by Tenant based on any estimate
shall be subject to adjustment pursuant to Paragraph B below when actual Basic
Costs or actual Taxes, as applicable, are determined.

 

B. As soon as is practical following the end of each calendar year during the
Lease Term, Landlord shall furnish to Tenant a statement of Landlord’s actual
Basic Costs and Taxes for the previous calendar year. If for any calendar year
the Additional Rent collected for the prior year, as a result of Landlord’s
estimate of Basic Costs or Taxes, is in excess of Tenant’s Pro Rata Share of the
amount by which Basic Costs or Taxes, as applicable, for such prior year exceeds
Basic Costs or Taxes for the Base Year, then Landlord shall refund to Tenant any
overpayment (or at Landlord’s option apply such amount against Additional Rent
due or to become due hereunder). Likewise, Tenant shall pay to Landlord, on
demand, any underpayment with respect to the prior year whether or not the Lease
has terminated prior to receipt by Tenant of a statement for such underpayment,
it being understood that this clause shall survive the expiration of the Lease.

 

C-1

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C. “Basic Costs” shall mean all reasonable direct and indirect costs, expenses
paid and disbursements of every kind (subject to the limitations set forth
below), which Landlord incurs, pays or becomes obligated to pay in each calendar
year in connection with operating, maintaining, repairing, owning and managing
the Building and the Property. Basic Costs shall include, without limitation,
insurance premiums and deductibles, and the amortized cost of capital
improvements made to the Building or the Property which are (i) primarily for
the purpose of reducing operating expense costs or otherwise improving the
operating efficiency of the Property or Building; or (ii) required to comply
with any laws, rules or regulations of any governmental authority or a
requirement of Landlord’s insurance carrier; or (iii) primarily for the purpose
of improving security at the Property or the Building. The cost of such capital
improvements shall be amortized over the useful life thereof, as reasonably
determined by Landlord, and shall, at Landlord’s option, include interest at a
rate that is reasonably equivalent to the interest rate that Landlord would be
required to pay to finance the cost of the capital improvement in question as of
the date such capital improvement is performed.

 

D. Basic Costs shall not include the following: (i) costs of alterations of
tenant spaces (including all tenant improvements to such spaces); (ii) costs of
capital improvements, except as provided in Paragraph C above; (iii)
depreciation, interest and principal payments on mortgages, and other debt
costs, if any; (iv) real estate brokers’ leasing commissions or compensation and
advertising and other marketing expenses; (v) costs or other services or work
performed for the singular benefit of another tenant or occupant (other than for
Common Areas); (vi) legal, space planning, construction, and other expenses
incurred in procuring tenants for the Building or renewing or amending leases
with existing tenants or occupants of the Building; (vii) costs of advertising
and public relations and promotional costs and attorneys’ fees associated with
the leasing of the Building; (viii) any expense for which Landlord actually
receives reimbursement from insurance, condemnation awards, other tenants,
(other than through the payment of additional rent under such tenants’ leases)
or any other source; (ix) costs incurred in connection with the sale, financing,
refinancing, mortgaging, or other change of ownership of the Building; (x)
rental under any ground or underlying lease or leases; and (xi) Taxes.

 

E. “Taxes” shall mean (i) all real estate taxes and assessments on the Property,
the Building or the Premises, and taxes and assessments levied in substitution
or supplementation in whole or in part of such taxes, (ii) all personal property
taxes for the Building’s personal property, including license expenses, (iii)
all taxes imposed on services of Landlord’s agents and employees, (iv) all
sales, use or other tax, excluding state and/or federal income tax now or
hereafter imposed by any governmental authority upon rent received by Landlord,
(v) all other taxes, fees or assessments now or hereafter levied by any
governmental authority on the Property, the Building or its contents or on the
operation and use thereof (except as relate to specific tenants), and (vi) all
reasonable costs and fees incurred in connection with seeking reductions in or
refunds in Taxes including, without limitation, any costs incurred by Landlord
to challenge the tax valuation of the Building or Property, but excluding income
taxes. Estimates of real estate taxes and assessments for any calendar year
during the Lease Term shall be determined based on Landlord’s good faith
estimate of the real estate taxes and assessments. Taxes and assessments
hereunder are those paid or payable for such calendar year, as opposed to the
real estate taxes and assessments accrued with respect to such calendar year.

 

C-2

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F. If the Building and the other buildings Landlord operates in conjunction
therewith, if any, are not at least ninety-five percent (95%) occupied, in the
aggregate, during any calendar year of the Lease Term or if Landlord is not
supplying services to at least ninety-five percent (95%) of the Rentable Area of
the Building and such other buildings, if any, at any time during any calendar
year of the Lease Term, actual Basic Costs and Taxes for purposes hereof shall,
at Landlord’s option, be determined as if the Building and such other buildings
had been ninety-five percent (95%) occupied and Landlord had been supplying
services to ninety-five percent (95%) of the Rentable Area of the Building and
such other buildings during such year. If Basic Costs and Taxes for any calendar
year during the Lease Term are determined as provided in the foregoing sentence,
Basic Costs and Taxes for the Base Year shall also be determined as if the
Building and such other buildings, if any, had been ninety-five percent (95%)
occupied and Landlord had been supplying services to ninety-five percent (95%)
of the Rentable Area of the Building and such other buildings.

 

G. Tenant shall have the right to inspect, at reasonable times and in a
reasonable manner, during the thirty (30) day period following the delivery of
Landlord’s statement of the actual amount of Basic Costs, such of Landlord’s
books of account and records as pertain to and contain information concerning
such Basic Costs and Taxes in order to verify the amounts thereof. Tenant agrees
that any information obtained during an inspection by Tenant of Landlord’s books
of account and records shall be kept in confidence by Tenant and its agents and
employees and shall not be disclosed to any other parties, except to Tenant’s
attorneys, accountants and other consultants. Any parties retained by Tenant to
inspect Landlord’s books of account and records shall not be compensated on a
contingency fee basis. If Tenant shall not dispute any item or items included in
the determination of Basic Costs or Taxes for a particular Lease Year by
delivering a written notice to Landlord generally describing in reasonable
detail the basis of such dispute within sixty (60) days after the statement for
such year was delivered to it, Tenant shall be deemed to have approved such
statement. During the pendency of any dispute over Basic Costs or Taxes, Tenant
shall pay, under protest and without prejudice, Tenant’s Pro Rata Share of Basic
Costs and Taxes as calculated by Landlord.

 

[END OF EXHIBIT C]

 

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EXHIBIT D

 

WORK LETTER

 

(Landlord’s Work is a short list of Work to be completed)

 

1. Landlord shall perform the following improvements to the Premises (the
“Worklist”), so long as no default shall occur under the Lease: (i) paint all
existing painted walls in the Premises using Tenant’s choice of Building
standard paint and colors; (ii) remove the existing carpeting and install new
carpet, using Tenant’s choice of Building standard carpet and colors; and (iii)
perform all other work in the Premises as may be required to bring the Premises
in compliance with all applicable Village building codes. The improvements to be
performed by Landlord in accordance with the Worklist are hereinafter referred
to as “Landlord’s Work.” Landlord shall enter into a direct contract for
Landlord’s Work with a general contractor selected by Landlord. In addition,
Landlord shall have the right to select and approve of any subcontractors used
in connection with Landlord’s Work.

 

2. If Tenant shall request any changes to Landlord’s Work (“Change Orders”) that
are approved by Landlord, Landlord shall have any necessary revisions to the
plans for Landlord’s Work prepared at Tenant’s sole cost and expense, and Tenant
shall reimburse Landlord upon demand for the cost of preparing any such
revisions. In addition, Landlord shall notify Tenant in writing of Landlord’s
estimate of the cost of completing the work set forth in the Change Orders
(“Excess Cost”). Landlord reserves the right to require Tenant to pay to
Landlord the amount of the estimated Excess Cost before continuing with
Landlord’s Work, and any delay in the completion of Landlord’s Work due to a
delay by Tenant in making such payment shall be deemed a Delay (as hereinafter
defined). If Tenant fails to pay the amount so demanded by Landlord within two
(2) Business Days after such demand, Landlord reserves the right to withdraw its
approval of the applicable Change Order and to proceed with Landlord’s Work
without regard to any changes encompassed by such Change Order. Furthermore, if
upon completion of Landlord’s Work, Landlord determines that the Excess Cost in
connection with Change Orders exceeds the amount of Excess Cost theretofore paid
by Tenant to Landlord, Tenant shall, within two (2) Business Days after
Landlord’s demand, pay the balance of the Excess Cost to Landlord. Any delay in
the completion of Landlord’s Work caused by Change Orders shall be deemed a
Delay.

 

3. If Landlord shall be delayed in substantially completing Landlord’s Work as a
result of the occurrence of any of the following (a “Delay”).

 

  (a) Tenant’s failure to furnish information in accordance with this Work
Letter or to respond to any request by Landlord for any approval or information
within any time period prescribed, or if no time period is prescribed, then
within two (2) Business Days of such request; or

 

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  (b) Tenant’s request for materials, finishes or installations that have long
lead times after having first been informed by Landlord that such materials,
finishes or installations will cause a Delay; or

 

  (c) Changes in any plans and specifications requested by Tenant; or

 

  (d) The performance or nonperformance by a person or entity employed by or on
behalf of Tenant in the completion of any work in the Premises (all such work
and such persons or entities being subject to prior approval of Landlord); or

 

  (e) Any request by Tenant that Landlord delay the completion of any component
of Landlord’s Work; or

 

  (f) Any breach or default by Tenant in the performance of Tenant’s obligations
under this Lease; or

 

  (g) Tenant’s failure to pay any amounts as and when due under this Work
Letter; or

 

  (h) Any delay resulting from Tenant’s having taken possession of the Premises
for any reason prior to substantial completion of Landlord’s Work; or

 

  (i) Any other delay chargeable to Tenant, its agents, employees or independent
contractors;

 

then Tenant shall be responsible for all costs resulting from such delay.
Landlord’s Work shall be deemed to be substantially completed on the date that
Landlord’s Work has been performed (or would have been performed absent any
Delay), other than any details of construction, mechanical adjustment or any
other matter, the noncompletion of which does not materially interfere with
Tenant’s use of the Premises. Promptly after the substantial completion,
Landlord and Tenant shall identify any minor incomplete items of Landlord’s Work
as reasonably determined by Landlord and Tenant (the “Punchlist Items”), which
Punchlist Items Landlord shall promptly remedy.

 

4. This Work Letter shall not be deemed applicable to any additional space added
to the original Premises at any time or from time to time, whether by any
options under the Lease or otherwise, or to any portion of the original Premises
or any additions to the Premises in the event of a renewal or extension of the
original Lease Term, whether by any options under the Lease or otherwise, unless
expressly so provided in the Lease or any written amendment or supplement to the
Lease. All capitalized terms used in this Work Letter but not defined herein
shall have the same meanings ascribed to such terms in the Lease.

 

5. Tenant shall perform all work (other than Landlord’s Work) in accordance with
the terms of this Work Letter as required to put the Premises in a condition to
permit the conduct of Tenant’s business therein and in accordance with the
requirements of this Lease. When Landlord’s Work has proceeded to the point
where the work to be performed by Tenant and the installation of Tenant’s trade
fixtures, furniture and equipment in the Premises (collectively “Tenant’s Work”)
can, in the opinion of Landlord, be commenced in

 

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accordance with good construction practice, then Tenant shall have the right to
occupy the Premises for the purpose of performing Tenant’s Work so far as its
occupancy is not inconsistent with Landlord’s Work or any work to be done in the
Building by Landlord, subject to all the terms and conditions of this Lease
(including in particular Section 9B), except that the payment of Rent by Tenant
shall not commence until the Commencement Date. Tenant acknowledges that entry
onto the Premises when the Landlord’s Work is not substantially complete entails
a risk of personal injury, death, or damage, destruction, loss or
misappropriation of property. To the extent not expressly prohibited by law,
Tenant hereby assumes all such risks for entry onto the Premises, and agrees to
defend and hold harmless Landlord (its agents, contractors, and employees)
against all costs and expenses, including reasonable attorneys’ fees in
connection therewith, arising out of any personal injury, death, or damage,
destruction, loss or misappropriation of property related to entry onto the
Premises by Tenant or its agents, employees, contractors, invitees or subtenants
prior to such time as the Landlord’s Work is substantially complete, except to
the extent such costs or expenses arise out of the negligence or willful
misconduct of Landlord, its employees, agents or representatives (it being
expressly understood that for purposes of this Lease, Landlord’s contractors,
subcontractors and their employees shall not be considered employees, agents or
representatives of Landlord). Tenant shall be solely responsible to determine at
the site all dimensions of the Premises and the Building which affect any work
to be performed by Tenant hereunder. The installation of Tenant’s furniture,
fixtures, equipment and personalty into the Premises shall be the sole
responsibility of Tenant, and any costs associated therewith shall be borne by
Tenant. Neither review nor approval by Landlord of any plans or specifications
for Tenant’s Work or any other work to be performed by Tenant shall constitute a
representation or warranty by Landlord that any of such plans or specifications
either (i) are complete or suitable for their intended purpose, or (ii) comply
with applicable laws, ordinances, codes and regulations.

 

[END OF EXHIBIT D]

 

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