Exhibit 10.16

OFFICE LEASE

THE WATER GARDEN

WATER GARDEN REALTY HOLDING LLC,

a Delaware limited liability company,

as Landlord,

and

CORNERSTONE ONDEMAND, INC.,

a Delaware corporation,

as Tenant

THE WATER GARDEN

Cornerstone OnDemand, Inc.

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THE WATER GARDEN

SUMMARY OF BASIC LEASE INFORMATION

The undersigned hereby agree to the following terms of this Summary of Basic
Lease Information (the “Summary”). This Summary is hereby incorporated into and
made a part of the attached Office Lease (the “Office Lease”) which pertains to
the “Project,” as that term is defined in the Office Lease, commonly known as
“The Water Garden” located in Santa Monica, California. This Summary and the
Office Lease are collectively referred to herein as the “Lease”. Each reference
in the Office Lease to any term of this Summary shall have the meaning set forth
in this Summary for such term. In the event of a conflict between the terms of
this Summary and the Office Lease, the terms of the Office Lease shall prevail.
Any capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the Office Lease.

 

TERMS OF LEASE

(References are to the Office Lease)

  

DESCRIPTION

1.      Date:

   November 29, 2011

2.      Landlord:

   WATER GARDEN REALTY HOLDING LLC, a Delaware limited liability company

3.      Tenant:

  

CORNERSTONE ONDEMAND, INC.,

a Delaware corporation

4.      Premises (Article 1).

  

4.1    Building Address:

  

The Water Garden

1601 Cloverfield Boulevard

Santa Monica, California 90404

4.2    Premises:

   Approximately 53,072 rentable square feet of space consisting of (i) 24,948
rentable square feet of space located on the 6th floor of the South tower of the
Building, commonly known as “Suite 600S”, and (ii) 28,124 rentable square feet
of space located on the 5th floor of the South tower of the Building commonly
known as “Suite 500S”, as further set forth in Exhibit “A” to the Office Lease.

5.      Lease Term (Article 2).

  

5.1    Length of Term:

   Eighty-six (86) months, subject to Tenant’s rights to renew under Section 2.2
of the Office Lease.

5.2    Lease Commencement Date:

   December 1, 2011.

5.3    Lease Expiration Date:

   January 31, 2019.

5.4    Renewal Terms

   Two (2) options to renew the Lease Term for a period of five (5) years each.

6.      Base Rent:

  

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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Period

Following Lease

Commencement Date*

   Annual Base Rent    Monthly
Installment of
Base Rent   

Monthly Rental Rate per

Rentable Square Foot

(rounded)

Months 1 – 12

   $2,451,926.40    $204,327.20    $3.85

Months 13 – 24

   $2,525,802.60    $210,483.55    $3.966

Months 25 – 36

   $2,601,589.44    $216,799.12    $4.085

Months 37 – 48

   $2,679,923.76    $223,326.98    $4.208

Months 49 – 60

   $2,760,168.60    $230,014.05    $4.334

Months 61 – 72

   $2,842,960.92    $236,913.41    $4.464

Months 73 – 84

   $2,928,300.72    $244,025.06    $4.598

Months 85 – 86

   NA    $251,348.99    $4.736

 

* Tenant shall not be obligated to pay a portion of the Base Rent otherwise due
for the months and under the terms and conditions set forth in Section 3.2 of
the Lease.

 

7.      Additional Rent (Article 4).

  

7.1    Base Year:

   Calendar year 2012.

7.2    Tenant’s Share:

   16.16%.

8.      Security (Article 21):

   $1,000,000 letter of credit (as more fully set forth in Article 21).

9.      Parking Passes (Article 28):

   Up to one hundred eighty-six (186) parking passes, upon the terms and
conditions of Article 28.

10.    Broker(s) (Section 29.18):

  

CBRE

1620 26th Street

Suite 1015 North

Santa Monica, California 90404

 

and

 

Cresa Partners

11726 San Vicente Boulevard, Suite 500

Los Angeles, California 90049

11.    Address of Tenant (Section 29.13):

  

1601 Cloverfield Boulevard, Suite 600S

Santa Monica, California 90404

Attention: General Counsel

12.    Rentable Area of the Building

(Section4.2.6):

   328,343 rentable square feet.

[Signature page follows]

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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The foregoing terms of this Summary are hereby agreed to by Landlord and Tenant.

 

“Landlord”: WATER GARDEN REALTY HOLDING LLC, a Delaware limited liability
company By:  

Commingled Pension Trust Fund (Strategic

Property) of JPMorgan Chase Bank, N.A.,

a Member

  By:  

JPMorgan Chase Bank, N.A.,

as Trustee

    By:  

 

     

    Karen Wilbrecht

    Executive Director

    Date Signed:  

 

 

“Tenant”: CORNERSTONE ONDEMAND, INC., a Delaware corporation By:  

 

  Its:  

 

  Date Signed:  

 

By:  

 

  Its:  

 

  Date Signed:  

 

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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TABLE OF CONTENTS

 

          Page  

ARTICLE 1

  

PREMISES, BUILDING, PROJECT, AND COMMON AREAS

     1   

ARTICLE 2

  

LEASE TERM

     6    ARTICLE 3   

BASE RENT

     9    ARTICLE 4   

ADDITIONAL RENT

     10    ARTICLE 5   

USE OF PREMISES

     17    ARTICLE 6   

SERVICES AND UTILITIES

     17   

ARTICLE 7

  

REPAIRS

     21    ARTICLE 8   

ADDITIONS AND ALTERATIONS

     21    ARTICLE 9   

COVENANT AGAINST LIENS

     23    ARTICLE 10   

INSURANCE

     23    ARTICLE 11   

DAMAGE AND DESTRUCTION

     26    ARTICLE 12   

NONWAIVER

     28    ARTICLE 13   

CONDEMNATION

     29    ARTICLE 14   

ASSIGNMENT AND SUBLETTING

     29   

ARTICLE 15

   SURRENDER OF PREMISES; REMOVAL OF TRADE FIXTURES      32    ARTICLE 16   

HOLDING OVER

     33    ARTICLE 17   

ESTOPPEL CERTIFICATES

     33    ARTICLE 18   

SUBORDINATION

     33    ARTICLE 19   

DEFAULTS; REMEDIES

     34    ARTICLE 20   

ATTORNEYS’ FEES

     36    ARTICLE 21   

SECURITY

     36    ARTICLE 22   

INTENTIONALLY DELETED

     38    ARTICLE 23   

SIGNS

     38    ARTICLE 24   

COMPLIANCE WITH LAW

     39    ARTICLE 25   

LATE CHARGES

     40    ARTICLE 26   

LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT

     40    ARTICLE 27   

ENTRY BY LANDLORD

     40    ARTICLE 28   

TENANT PARKING

     41    ARTICLE 29   

MISCELLANEOUS PROVISIONS

     42   

EXHIBITS

 

“A”

                       OUTLINE OF PREMISES

“B”

                       FORM OF NOTICE OF LEASE TERM DATES

“C”

                       RULES AND REGULATIONS

“D”

                       FORM OF TENANT’S ESTOPPEL CERTIFICATE

“E”

                       TENANT WORK LETTER

“F”

                       EXISTING 10% PLANS REFERENCED IN SECTION 29.25 OF THE
LEASE

“G”

                       FORM OF LETTER OF CREDIT

“H”

                       AVAILABLE SPACE EXCLUSIONS AS OF THE LEASE DATE

“I”

                       FORM OF ROOFTOP LICENSE AGREEMENT (ANTENNA)

 

THE WATER GARDEN

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“J”

   FORM OF ROOFTOP LICENSE AGREEMENT (SUPPLEMENTAL HVAC EQUIPMENT)

“K”

   MONUMENT SIGNAGE

[Remainder of Page Intentionally Left Blank]

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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THE WATER GARDEN

OFFICE LEASE

This Office Lease, which includes the preceding Summary of Basic Lease
Information (the “Summary”) attached hereto and incorporated herein by this
reference (the Office Lease and Summary are sometimes collectively referred to
herein as the “Lease”), dated as of the date set forth in Section 1 of the
Summary is made by and between WATER GARDEN REALTY HOLDING LLC, a Delaware
limited liability company (“Landlord”), and CORNERSTONE ONDEMAND, INC., a
Delaware corporation (“Tenant”).

ARTICLE 1

PREMISES, BUILDING, PROJECT, AND COMMON AREAS

1.1 Premises, Building, Project and Common Areas.

1.1.1 The Premises. Upon and subject to the terms hereinafter set forth in this
Lease, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
the premises set forth in Section 4.2 of the Summary (the “Premises”), which
Premises are located in the “Building,” as that term is defined in
Section 1.1.2. The outline of the Premises is set forth in Exhibit “A” attached
hereto.

1.1.2 The Building and The Project. The Premises are a part of the building set
forth in Section 4.1 of the Summary (the “Building”) located in Santa Monica,
California. The Building is part of an office project known as Phase II of “The
Water Garden” which contains another office building (the “Adjacent Building”).
The term “Project,” as used in this Lease, shall mean (i) the Building, the
Adjacent Building, and the “Common Areas”, as that term is defined in
Section 1.1.3, (ii) the land (which is improved with landscaping, subterranean
parking facilities and other improvements) upon which the Building, the Adjacent
Building, and the Common Areas are located, and (iii) at Landlord’s discretion,
any additional real property, areas, buildings or other improvements added
thereto pursuant to the terms of Section 1.1.4.

1.1.3 Common Areas. Tenant shall have the non-exclusive right to use in common
with other tenants in the Project, and subject to the rules and regulations
referred to in Article 5, those portions of the Project which are provided, from
time to time, for use in common by Landlord, Tenant and any other tenants of the
Project, whether or not those areas are open to the general public (such areas,
together with such other portions of the Project designated by Landlord, in its
discretion, including certain areas designated for the exclusive use of certain
tenants, or to be shared by Landlord and certain tenants, such as balconies
abutting tenants’ premises, are collectively referred to herein as the “Common
Areas”). The Common Areas shall consist of the “Project Common Areas” and the
“Building Common Areas”. The term “Project Common Areas”, as used in this Lease,
shall mean the portion of the Project designated as such by Landlord. “Building
Common Areas”, as used in this Lease, shall mean the portions of the Common
Areas located within the Building designated as such by Landlord. The manner in
which the Common Areas are maintained and operated shall be at the sole
discretion of Landlord, provided that Landlord shall maintain and operate the
same in a manner consistent with that of other first-class, mid-rise office
buildings (including the office buildings constructed adjacent to the Project as
“Phase I” of The Water Garden, hereafter referred to as “Phase I”) in the Santa
Monica, California area, which are comparable in terms of size, quality of
construction, appearance, and services and amenities (the “Comparable
Buildings”). Landlord agrees that it will cause the Building and the Project to
be operated and managed in a first-class manner consistent with that of a
reasonably prudent building manager of Comparable Buildings.

1.1.4 Landlord’s Use and Operation of the Building, Project, and Common Areas.
Landlord reserves the right from time to time without notice to Tenant (i) to
close temporarily any of the Common Areas; (ii) to make changes to the Common
Areas, including, without limitation, changes in the location, size, shape and
number of street entrances, driveways, ramps, entrances, exits, passages,
stairways and other ingress and egress, direction of traffic, landscaped areas,
loading and unloading areas, and walkways; (iii) to expand the Building or the
Adjacent Building; (iv) to add additional buildings and improvements to the
Common Areas; (v) to designate land outside the Project to be part of the
Project, and in

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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connection with the improvement of such land to add additional buildings and
common areas to the Project; provided that Tenant shall not be responsible for
any costs associated with the acquisition of such land, and provided, further,
that notwithstanding anything to the contrary contained in this Lease, the
Project shall not be expanded to include more than the land located in Santa
Monica, California, which has Olympic Boulevard as its southern boundary,
Cloverfield Boulevard as its western boundary, Colorado Avenue as its northern
boundary, and 26th Street as its eastern boundary; (vi) to use the Common Areas
while engaged in making additional improvements, repairs or alterations to the
Project or to any adjacent land, or any portion thereof; and (vii) to do and
perform such other acts and make such other changes in, to or with respect to
the Project, Common Areas and Building or the expansion thereof as Landlord may,
in the exercise of sound business judgment, deem to be appropriate. Landlord
shall not exercise any rights under this Section 1.1.4 if such exercise would
unreasonably interfere with Tenant’s use of or access to the Premises or parking
rights or materially increase the obligations or decrease the rights of Tenant
under the Lease or reduce the quality of the Building or Project or materially
adversely affect the Premises. In exercising its rights under this
Section 1.1.4, Landlord shall use commercially reasonable efforts to minimize
any interference with Tenant’s operations in the Premises.

1.2 Rentable Square Feet of Premises, Building, and Project. For purposes of
this Lease, “rentable square feet” shall be calculated pursuant to Standard
Method for Measuring Floor Area in Office Buildings, ANSI Z65.1 - 1996 (“BOMA”),
provided that the rentable square footage of the Building and the other
buildings in the Project shall include all of (and the rentable square footage
of the Premises, therefore, shall include a portion of) (i) the Building Common
Areas and (ii) the occupied space of the portion of the Project dedicated to the
service of the Project. Landlord and Tenant stipulate that the Premises and
Building contain the rentable square footage set forth in Sections 4.2 and 12 of
the Summary.

1.3 Delivery and Condition of the Premises. Tenant currently occupies Suite 600S
and a portion of Suite 500S (collectively, the “Subleased Space”) pursuant to
subleases which are scheduled to expire on November 30, 2011 (the “Subleases”).
By December 1, 2011, Landlord shall deliver the remainder of Suite 500S that is
not part of the Subleased Space (the “New Space”) to Tenant for Tenant’s
construction of improvements therein in accordance with the Tenant Work Letter
attached hereto as Exhibit “E” (the “Tenant Work Letter”). Tenant shall accept
the Premises in their as-is condition, and except as specifically set forth in
this Lease and in the Tenant Work Letter, Landlord shall not be obligated to
provide or pay for any improvement work or services related to the improvement
of the Premises. Tenant also acknowledges that Landlord has made no
representation or warranty regarding the condition of the Premises or the
Project except as specifically set forth in this Lease and the Tenant Work
Letter. Landlord shall deliver possession of the New Space to Tenant in vacant,
broom clean condition, with all Building Systems located outside the New Space
and serving the New Space in good working order, and in compliance with all
Applicable Laws for general office use and normal occupancy density; Building
Systems located within the New Space will be delivered in good working order at
the time of delivery for the existing configuration of the New Space
(collectively, the “New Space Delivery Condition”). Landlord will not require or
permit Sapient to remove the wires and cabling or other leasehold improvements
from the existing server room in the New Space, and Tenant shall accept such
wires, cabling and leasehold improvements in their “as-is” condition, provided
that Tenant shall not be obligated to remove same upon the expiration or earlier
termination of this Lease. Tenant may enter into an agreement to purchase
certain furniture, fixtures and equipment in the New Space from Sapient. Any
such agreement shall be strictly between Tenant and Sapient, and Landlord shall
have no liability with respect thereto.

1.4 Balconies. The balconies, if any, adjacent to and accessible from the
Premises shall be common areas and shall not be a part of the rentable square
footage of the Premises; provided, however, that Tenant shall have an exclusive
license at no additional expense (with other tenants whose premises are adjacent
to and accessible from such balconies) to use any such balconies in a manner
consistent with a first-class office complex containing balconies, on the terms
and conditions set forth herein and subject to all limitations and restrictions
on use of the Premises in this Lease. Tenant shall not make any improvements to
the balconies. Tenant shall seek Landlord’s advance written consent to all
proposed furniture, fixtures, plants or other items of any kind whatsoever which
Tenant desires to affix or to place on the balconies. Landlord may withhold its
consent to Tenant’s proposed furniture, fixtures, plants or other items in
Landlord’s sole discretion, including without limitation, on wholly aesthetic
grounds (e.g., as to size, color

 

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or design). Without limiting the generality of the foregoing, any umbrellas on
the balconies must be white or green. Landlord hereby approves of the furniture
that Tenant currently has on the balcony of the Building. Tenant shall not be
permitted to display any graphics, signs or insignias or the like on the
balconies. Subject to Section 1.1.4, Landlord shall have the right to make any
improvements to the balconies or display any graphics, plants or other items
from the balconies which it desires in its reasonable discretion in connection
with overall Project graphics or improvements. Tenant, in conjunction with other
tenant users, shall clean, maintain and repair the balconies as a result of
their use by Tenant or any party accessing the balconies through Tenant in a
manner consistent with the Premises. Tenant shall permit Landlord and its agents
access to the balconies at reasonable times for cleaning, general maintenance
and plant maintenance.

1.5 Option to Expand.

1.5.1 Option. Provided that Tenant is not in Default (as defined in
Section 19.1) hereunder on either the Election Date (as defined in
Section 1.5.2) or the Expansion Delivery Date (as defined in Section 1.5.2),
Tenant shall have the option (the “Expansion Option”) to lease, upon the terms
and conditions of this Section 1.5, the Fifteen Thousand Five Hundred
Sixty-Eight (15,568) rentable square feet on the fourth (4th) floor of the South
tower of the Building which, as of the date of this Lease, is leased to Sapient
(the “Expansion Space”). Landlord shall have no liability to Tenant for any
damages resulting from any delay in delivering possession of the Expansion Space
to Tenant if said delay is caused by the holding over of Sapient in the
Expansion Space; provided, however, that Landlord shall take all action
reasonably necessary, including required legal proceedings, to secure possession
of the Expansion Space as soon as possible after the expiration of Sapient’s
lease thereof on November 30, 2012. If Landlord is unable to deliver the
Expansion Space to Tenant within two (2) weeks after the Anticipated Expansion
Delivery Date (as hereinafter defined), Landlord will use commercially
reasonable efforts to provide Tenant with temporary space in “as-is” condition,
elsewhere in the Project (the “Temporary Space”), with rentable square footage
approximately similar to the rentable square footage of the Expansion Space, for
Tenant to use and occupy until Landlord delivers the Expansion Space to Tenant.
Other than Tenant’s installation of cabling and wiring in the Temporary Space,
which shall be conducted in accordance with Section 29.28 below, Tenant shall
not make any alterations or modifications to the Temporary Space. Tenant shall
not sublease any of the Temporary Space. Tenant shall pay monthly Base Rent for
the Temporary Space in the amount of $3.00 per rentable square foot of the
Temporary Space per month, payable in the manner set forth in Section 3.1 below,
commencing on the date Landlord delivers the Temporary Space to Tenant and
ending when Tenant vacates and surrenders the Temporary Space to Landlord
(prorated for partial months). Tenant shall not be obligated to pay Additional
Rent for Project Expenses for the Temporary Space; however, Tenant shall pay for
all over-standard services provided to the Temporary Space at Tenant’s request
(including, without limitation, After-Hours HVAC). Tenant shall vacate and
surrender the Temporary Space to Landlord within five (5) days of Landlord’s
delivery of the Expansion Space to Tenant. In the event that Landlord has not
provided the Expansion Space to Tenant within ninety (90) days after the
Anticipated Expansion Delivery Date, Landlord will reimburse Tenant for Tenant’s
actual reasonable costs incurred for moving into the Temporary Space, and
Tenant’s actual reasonable cost of installing and removing Tenant’s
telecommunications wiring and cabling pertaining to the Temporary Space, within
thirty (30) days of receipt of reasonably detailed invoices therefor. Except as
particularly set forth herein, the terms of this Lease shall govern Tenant’s use
and occupancy of the Temporary Space unless clearly inconsistent with this
Section 1.5.1.

1.5.2 Exercise. The option described above shall be exercised by Tenant by
written notice to Landlord given no later than May 31, 2012 (the “Election
Date”). If Tenant timely gives such notice, Landlord shall deliver possession of
the Expansion Space to Tenant on or about December 1, 2012 (the “Anticipated
Expansion Delivery Date”), it being acknowledged that Sapient must vacate and
surrender the Expansion Space before Landlord can deliver same to Tenant. The
commencement date of the lease term with respect to the Expansion Space shall be
the date (the “Expansion Commencement Date”) which is ninety (90) days after
Landlord’s delivery of the Expansion Space to Tenant in the Expansion Space
Delivery Condition, and the lease term with respect to the Expansion Space shall
end concurrently with the expiration of the Lease Term as to the Premises
initially leased hereunder, as the Lease Term may be extended by Section 2.2
below, unless sooner terminated pursuant hereto. The Expansion Space shall be
leased to Tenant in its then existing “as-is” condition and state of

 

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improvement and Landlord shall have no obligation to make any improvements,
repairs or alterations thereof; provided, however, that (i) Landlord shall
deliver possession of the Expansion Space to Tenant in vacant, broom clean
condition, with all Building Systems located outside the Expansion Space and
serving the Expansion Space in good working order, and in compliance with all
Applicable Laws for general office use and normal occupancy density,
(ii) Building Systems located within the Expansion Space will be delivered in
good working order at the time of delivery for the existing configuration of the
Expansion Space, and (iii) the Expansion Space will be delivered in
substantially the same configuration and condition as on the date hereof,
reasonable wear and tear excepted (collectively, the “Expansion Space Delivery
Condition”). On the Expansion Commencement Date, the number of parking passes to
which Tenant is entitled under Section 9 of the Lease Summary shall be increased
pro rata based on the square footage of the Expansion Space.

1.5.3 Rent and Other Terms.

(a) The Base Rent for the Expansion Space shall initially be Sixty Thousand One
Hundred Twelve and 66/100 Dollars ($60,112.66) per month (equivalent to $3.966
per rentable square foot of the Expansion Space). The Base Rent for the
Expansion Space shall increase during the Lease Term on the same dates as, and
to the same rate per rentable square foot as, the Base Rent for the initial
Premises as set forth in Section 6 of the Lease Summary. Tenant shall pay
Additional Rent for the Expansion Space commencing on the Expansion Commencement
Date in accordance with the provisions of Article 4 of this Lease (including,
without limitation, the Base Year set forth in Section 7.1 of the Lease
Summary).

(b) Section 3.2 of this Lease shall be inapplicable to the Expansion Space.
Tenant shall not be obligated to pay forty point six percent (40.6%) of the Base
Rent for the Expansion Space for months one (1) through eight (8), seventeen
(17), eighteen (18), twenty-six (26), twenty-seven (27), thirty-seven (37) and
thirty-eight (38) following the Expansion Commencement Date. Tenant shall be and
remain obligated during each of such months to pay the remaining fifty-nine
point four percent (59.4%) of the Base Rent for the Expansion Space and all
Additional Rent otherwise due hereunder, including, without limitation, pursuant
to Article 4 below. If a Default has occurred and is continuing at a time when
Tenant would otherwise be entitled to Base Rent abatement hereunder, Tenant
shall not be entitled to such abatement; provided, however, that if this Lease
is not terminated due to the Default and Tenant cures the Default, Landlord
shall apply any Base Rent abatement held in abeyance during the continuance of
any such Default to the next monthly Base Rent installment(s) due after the cure
of such Default.

(c) Landlord shall provide a Tenant Improvement Allowance with respect to the
Expansion Space in the amount of Three Hundred Seventy Thousand One Hundred
Thirty-Three and 94/100 Dollars ($370,133.94) (equivalent to $24.42 per rentable
square foot of the Expansion Space, which amount was calculated by multiplying
(i) $30.00, by (ii) a fraction, the numerator of which is the number of months
remaining in the initial Lease Term after the anticipated Expansion Commencement
Date of March 1, 2013 (70) and the denominator of which is the total number of
months in the initial Lease Term (86)). The terms and conditions of the Tenant
Work Letter shall govern Tenant’s construction of its Tenant Improvements in the
Expansion Space and use of the Tenant Improvement Allowance therefor, and the
Tenant Improvement Allowance pertaining to the Expansion Space shall be
disbursed in the manner provided in Sections 2.2.2(a), (c) and (d) of the Tenant
Work Letter as if the Tenant Improvement Allowance for the Expansion Space were
the “Initial Allowance Amount” referenced therein.

1.5.4 Part of Premises. As of the date of Landlord’s delivery of the Expansion
Space to Tenant in the Expansion Delivery Condition, the Expansion Space shall
be part of the Premises and, except as specifically set forth in this
Section 1.5, the Expansion Space shall be leased upon the same terms and
conditions as the Premises initially leased hereunder. Tenant’s acceptance of
the Expansion Space shall not be deemed a waiver of Tenant’s right to have the
Expansion Space Delivery Condition satisfied, at Landlord’s cost, provided that
Tenant notifies Landlord in writing of any alleged failures of the Expansion
Space Delivery Condition, in reasonable detail, within thirty (30) days of
Landlord’s delivery of the Expansion Space. Tenant’s failure to timely provide
such written notice shall be deemed to mean that the Expansion Space Delivery
Condition has been fully satisfied. Tenant shall not be obligated to pay Base
Rent or Tenant’s Share of Project Expenses with respect to the Expansion Space
until

 

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the Expansion Commencement Date. Promptly after Tenant’s notice of election to
lease the Expansion Space, Tenant and Landlord shall execute an appropriate
Lease amendment reflecting the addition of the Expansion Space to the Premises.

1.5.5 Personal Right. Tenant’s right to lease Expansion Space as set forth in
this Section 1.5 is personal to Cornerstone OnDemand, Inc. (“Original Tenant”)
and may not be assigned, transferred or conveyed to any party, except in
connection with an assignment of this Lease in its entirety to (i) a Related
Transferee or (ii) a Transferee that is an assignee of all of Tenant’s rights
under this Lease that is consented to by Landlord, as provided in Article 14
below.

1.6 Right of First Offer.

1.6.1 Proposal to Lease. Subject to the terms and conditions of this
Section 1.6, and provided Tenant is not then in Default under this Lease, Tenant
shall have a continuous right of first offer to lease any and all space in the
South tower of the Building, should such space become available for lease (the
“Available Space”) during the Lease Term, as set forth herein. For purposes of
this Section 1.6, Available Space shall not include (i) space for which leases
in effect on the date hereof, which currently contain renewal or extension
rights, are being renewed or extended (provided that such leases need not be
extended or renewed per the terms of the extension/renewal rights set forth in
the leases), a schedule of which space is contained in Exhibit “H” attached
hereto, (ii) space which is the subject of options to expand or rights of first
offer granted to any other person or tenant, which rights are in existence on
the date hereof, a schedule of which space is contained in Exhibit “H” attached
hereto, or (iii) space for which the remaining Lease Term, as it may have been
renewed, would be less than eighteen (18) months (unless Tenant exercises its
right of first offer hereunder simultaneously with a Renewal Option); provided
that if Landlord intends to lease the Available Space to a third party for a
term of less than eighteen (18) months, Tenant shall be entitled to lease such
Available Space in accordance with the provisions hereof for such shorter term,
or the remainder of the Lease Term (as it may be renewed) whichever is longer.
Furthermore, Available Space shall exclude Suite 200S (which is currently leased
to Pfizer), but only to the extent that Landlord enters into a direct lease of
such space to Summit Entertainment, which is the current subtenant of the space.
If a space does not qualify as Available Space due to the renewal or extension
of an existing lease for such space, or due to the exercise of an existing
option or right to lease such space by another person or tenant as set forth
above, then such space may subsequently qualify as Available Space if, during
the Lease Term, the existing lease for such space, or the lease of such space
pursuant to an option or right held by another person or tenant, expires and the
tenant thereunder does not extend or renew such lease, or if such lease
terminates prior to its expiration date. The Expansion Space shall not be
considered Available Space hereunder except as follows: if Tenant fails to
exercise the Expansion Option by the Election Date, Sapient shall have from
June 1, 2012 until June 30, 2012 to notify Landlord of Sapient’s intent to renew
its lease of the Expansion Space. If Sapient does not timely exercise such
renewal option, the Expansion Space shall be subject to Tenant’s right of first
offer hereunder effective July 1, 2012. If Sapient timely exercises its renewal
option, the Expansion Space shall be subject to Tenant’s right of first offer
upon the sooner of December 1, 2014 and any earlier termination of such lease.
Except for Sapient’s option to renew as described in this Section 1.6.1,
Landlord shall not grant Sapient any extension or renewal rights with respect to
the Expansion Space.

(a) Prior to entering into a lease of Available Space with a third party,
Landlord shall first give Tenant a notice (the “Offer Notice”), offering to
lease such Available Space to Tenant on the following terms and conditions:
(A) the term of the Lease as to such Available Space shall commence as provided
in the Offer Notice and shall continue until the end of the Lease Term as to the
balance of the Premises (as it may be renewed in accordance with this Lease);
(B) the Offer Notice shall specify the Available Space in question, and shall
state the rentable square footage thereof, the anticipated commencement date,
the delivery condition, and Landlord’s estimate of the Fair Market Rental Rate
(as defined in Section 2.3 below) for the Available Space (with any tenant
concessions set forth in such Offer Notice offered to Tenant adjusted pro-rata
to reflect the Lease Term as to such Available Space and taking into
consideration the terms of this Lease, including Article 4); (C) Tenant shall
pay Additional Rent for such Available Space in accordance with the provisions
of Article 4 (as may be modified by the terms of the Offer Notice which may
include, without limitation, a new Base Year for the Available Space), and
(D) such Available Space shall be added to the Premises for all other purposes
of this Lease and all of the other terms and conditions of this Lease shall
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Available Space that is leased by Tenant, other than as set forth in the Offer
Notice. Notwithstanding anything to the contrary contained herein, the term of
the Lease for the Available Space which Tenant may elect to lease hereunder (and
the then remaining balance of the Lease Term for the Premises as it may have
been renewed) shall not be less than eighteen (18) months (unless Tenant
exercises its right of first offer hereunder simultaneously with a Renewal
Option) or such shorter term as is permitted under Subparagraph 1.6.1(iii)
above.

(b) If Tenant does not accept the Available Space offered by Landlord within
five (5) business days after receipt of such Offer Notice (such acceptance the
“Acceptance Notice”), then Landlord shall be free to lease such space to any
other person or entity and Tenant shall not have any rights under this
Section 1.6 with respect to such Available Space for a period of one hundred
eighty (180) days after expiration of said five (5) business day period;
provided that if the net effective rent payable by such other person or entity
would be less than ninety percent (90%) of the net effective rent specified in
the Offer Notice, then Landlord must re-offer the Available Space to Tenant
prior to proceeding with such third-party lease.

(c) If Tenant timely accepts the Available Space offered by Landlord, Tenant
shall lease the same from Landlord on the terms and conditions described in
Section 1.6.1(a), provided that in the event that Tenant disputes Landlord’s
estimate of the Fair Market Rental Rate set forth in the Offer Notice,
concurrently with Tenant’s delivery of its Acceptance Notice, Tenant may elect
that the Fair Market Rental Rate be determined by arbitration; provided that
Landlord and Tenant, ten (10) days after the date on which Tenant elects
arbitration, shall first commence good faith discussions to endeavor to agree
upon the applicable Fair Market Rental Rate. In the event that Landlord and
Tenant do not agree upon such rate within twenty (20) days after the expiration
of said ten (10) day period, on the twenty-fifth (25th) day after the expiration
of said ten (10) day period, Landlord and Tenant shall proceed in accordance
with Section 2.2.2(b) below.

(d) Promptly after the determination of the Fair Market Rental Rate for the
Available Space, Tenant and Landlord shall execute an appropriate Lease
amendment reflecting the addition of the Available Space to the Premises.

1.6.2 Personal Right. Tenant’s right to lease Available Space as set forth in
this Section 1.6 is personal to Original Tenant and may not be assigned,
transferred or conveyed to any party, except in connection with an assignment of
this Lease in its entirety to (i) a Related Transferee or (ii) a Transferee that
is an assignee of all of Tenant’s rights under this Lease that is consented to
by Landlord, as provided in Article 14 below.

ARTICLE 2

LEASE TERM

2.1 Lease Term; Lease Commencement Date. The terms and provisions of this Lease
shall be effective as of the date of this Lease; provided, however, that, with
respect to the Subleased Space, the Subleases shall govern Tenant’s rights and
obligations regarding use and occupancy of the Subleased Space until the
expiration or earlier termination of the Subleases. The term of this Lease (the
“Lease Term”) with respect to the Premises described in Section 4.2 of the
Summary shall be as set forth in Section 5.1 of the Summary, shall commence on
December 1, 2011 (the “Lease Commencement Date”), and shall terminate on
January 31, 2019 (the “Lease Expiration Date”) unless this Lease is sooner
terminated or the Lease Term is renewed as hereinafter provided (provided that
the New Space shall not become part of the Premises under this Lease until the
New Space is actually delivered to Tenant). At any time during the Lease Term,
Landlord may deliver to Tenant a notice (the “Notice of Lease Term Dates”) in
substantially the form as set forth in Exhibit “B” attached hereto, which notice
Tenant shall execute and return to Landlord within twenty (20) days of receipt
thereof, and thereafter the dates set forth on such notice shall be conclusive
and binding upon Tenant. If Landlord fails to deliver the New Space in the New
Space Delivery Condition on or before the date set forth in Section 1.3, Tenant
shall have the right to notify Landlord thereof in writing within three (3) days
of Landlord’s delivery of the New Space including specific details as to why the
New Space Delivery Condition was not satisfied. If Tenant timely gives such
notice and there was, in fact, a failure of the New Space Delivery Condition,
then Tenant’s obligation to pay Base Rent for the New Space shall be postponed
one (1) day for each day that the New Space Delivery Condition is not satisfied.
Tenant’s failure to timely give such notice shall constitute a waiver of any
Base Rent postponement under this Section 2.1. Tenant’s acceptance of the New
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deemed a waiver of Tenant’s right to have the New Space Delivery Condition
satisfied, at Landlord’s cost, provided that Tenant notifies Landlord in writing
of any alleged failures of the New Space Delivery Condition, in reasonable
detail, within thirty (30) days of Landlord’s delivery of the New Space.
Tenant’s failure to timely provide such written notice shall be deemed to mean
that the New Space Delivery Condition has been fully satisfied. Notwithstanding
anything to the contrary in this Lease, if either of the Subleases terminates
prior to the Lease Commencement Date as a result of a termination of the
applicable master lease, such Sublease shall continue as a direct lease between
Landlord, as sublessor, and Tenant, as sublessee, until the Lease Commencement
Date; provided, however, that (i) Landlord shall not be (A) liable for any
prepayment of more than one month’s rent or any security deposit paid by Tenant
to Sapient (unless actually received by Landlord), (B) liable for any previous
act or omission of Sapient under the Subleases or for any other defaults of
Sapient under the Subleases, (C) subject to any defenses or offsets previously
accrued which Tenant may have against Sapient or (D) bound by any changes or
modifications hereafter made to the Subleases without the written consent of
Landlord; and, (ii) if Sapient’s lease terminated as a result of a casualty or
condemnation, such casualty or condemnation shall be deemed to have occurred
during the Lease Term for purposes of termination rights under this Lease.
Landlord hereby agrees that Tenant’s continued occupancy of the Subleased Space
from and after the Lease Commencement Date shall be considered pursuant to this
Lease and not as a holdover under the Subleases or underlying master lease.
Landlord and Tenant acknowledge and agree that Landlord will not require Sapient
to remove anything from the Subleased Space which was existing at the time of
delivery, restore the Subleased Space or otherwise make any changes or
modifications to the Subleased Space.

2.2 Renewal Terms.

2.2.1 Provided Tenant is not in Default under this Lease as of the date of
exercise or the commencement of a renewal term (“Renewal Term Commencement
Date(s)”), Tenant shall have the option to renew this Lease (“Renewal
Option(s)”) for two (2) successive periods of five (5) years each (“Renewal
Term(s)”), exercisable by giving written notice thereof (“Renewal Notice”) to
Landlord of its exercise of a Renewal Option at least twelve (12) months prior
to the expiration of the initial Lease Term as to the first Renewal Option and
at least twelve (12) months prior to the expiration of the first Renewal Term as
to the second Renewal Option. Each Renewal Option shall be exercised by Tenant,
if at all, for a minimum of one (1) full floor and a maximum of all the then
entire Premises (herein, the “Renewal Premises”); provided that (i) if the
Premises consists of one or more full floors plus one or more partial floors,
Tenant must renew for at least one (1) full floor in order to renew for any
partial floors, and (ii) any portion of the Premises for which the Renewal
Option is not exercised must be in a leaseable configuration and suitable for
normal renting purposes in conformity with all applicable building and safety
codes. Tenant shall designate the size and location of the Renewal Premises,
within the foregoing parameters, in its Renewal Notice, and Tenant’s failure to
do so shall be deemed exercise of the Renewal Option as to the entire Premises
then leased to Tenant. If any physical separation or separation of any of the
life-safety, mechanical, electrical, plumbing, heating, ventilating and air
conditioning systems of the Building (collectively, the “Building Systems”) is
required in order to separately demise the Renewal Premises from the remainder
of the Premises for which the Renewal Option was not exercised, Tenant shall be
responsible for the cost of such demising.

2.2.2 The Base Rent payable hereunder for the Premises during each Renewal Term
shall be adjusted to the then-prevailing Fair Market Rental Rate (as defined in
Section 2.3).

(a) Landlord shall give Tenant written notice of Landlord’s determination of the
Fair Market Rental Rate for the applicable Renewal Term (“Landlord’s Statement”)
within thirty (30) days after Landlord’s receipt of the Renewal Notice;
provided, however, that Landlord shall not be obligated to deliver Landlord’s
Statement earlier than twelve (12) months prior to the expiration of the
then-current Lease Term. Within fifteen (15) business days after Tenant’s
receipt of Landlord’s Statement (“Tenant’s Review Period”), Tenant shall give
Landlord written notice of its election to either (a) accept the Fair Market
Rental Rate set forth in Landlord’s Statement or (b) reject Landlord’s Statement
and request that the Fair Market Rental Rate be determined by arbitration
pursuant to Section 2.2.2(b); provided, however, that prior to submitting the
matter to arbitration as herein provided, the parties shall first attempt in
good faith to resolve their differences in the determination of the Fair Market
Rental Rate for a period of thirty (30) days following Landlord’s receipt of
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Landlord’s Statement. If Tenant fails to give Landlord notice of its acceptance
or rejection of Landlord’s Statement by the expiration of Tenant’s Review
Period, then such failure shall be deemed to be Tenant’s rejection of the Fair
Market Rental Rate set forth in Landlord’s Statement.

(b) If Tenant gives Landlord notice that it elects arbitration of the Fair
Market Rental Rate and Landlord and Tenant have not been able to agree upon the
Fair Market Rental Rate within the time period provided in Section 1.6.1(c) or
2.2.2(a), as applicable, Landlord and Tenant shall, within the time period
provided in Section 1.6.1(c) or 2.2.2(a), as applicable, each simultaneously
submit to the other in writing its good faith estimate of the Fair Market Rental
Rate (“Good Faith Estimate”). If the higher of said estimates is not more than
one hundred and three percent (103%) of the lower of such estimates, the Fair
Market Rental Rate in question shall be deemed to be the average of the
submitted rates. If otherwise, then the rate shall be set by arbitration to be
held in Santa Monica, California in accordance with the Real Estate Valuation
Arbitration Rules of the American Arbitration Association, except that the
arbitration shall be conducted by a single arbitrator selected as follows.
Within five (5) business days after the simultaneous submittal by Landlord and
Tenant of their respective Good Faith Estimates, each shall designate a
recognized and independent real estate expert or broker who shall have at least
ten (10) years experience in the valuation of rental properties similar to and
in the vicinity of the Project. The two individuals so designated shall, within
ten (10) business days after the last of them is designated, appoint a third
independent expert or broker possessing the aforesaid qualifications to be the
single arbitrator, and if they are unable to do so, then the selection shall be
made by an arbitrator selected at random by the American Arbitration Association
under the Commercial Rules of Arbitration (which arbitrator shall be a real
estate lawyer practicing in the greater Los Angeles area with at least ten
(10) years of experience in the field of office leasing). The third arbitrator
so selected shall, alone, pick one of the two Good Faith Estimates, being the
Good Faith Estimate that is closer to the Fair Market Rental Rate as determined
by the arbitrator using the definition set forth in Section 2.3. The parties
agree to be bound by the decision of the arbitrator, which shall be final and
non-appealable, and shall share equally the costs of arbitration, and judgment
upon the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.

2.2.3 During each Renewal Term, Tenant shall pay Additional Rent in accordance
with the provisions of Article 4, but the Base Year (as defined below) for the
Renewal Term shall be determined as part of the determination of the Fair Market
Rental Rate.

2.2.4 The Renewal Options set forth in this Section 2.2 are personal to Original
Tenant and may not be assigned, transferred or conveyed to any party, except in
connection with an assignment of this Lease in its entirety to (i) a Related
Transferee or (ii) a Transferee that is an assignee of all of Tenant’s rights
under this Lease that is consented to by Landlord, as provided in Article 14
below, and may be exercised only if Original Tenant and/or such Related
Transferee or approved assignee is in possession of at least one (1) full floor
of the Building without sublease or assignment to any other person or entity.

2.3 Fair Market Rental Rate. The phrase “Fair Market Rental Rate” shall mean the
fair market value annual rental rate that a tenant would pay and a landlord
would accept in an arm’s length transaction, for delivery on or about the
applicable delivery or effective date, for comparable non-renewal, non-expansion
space, for a comparable use in the Building and in Comparable Buildings
(“Comparable Transactions”). In any determination of Comparable Transactions,
appropriate consideration shall be given to (i) annual rental rates per rentable
square foot, the standard of measurement by which the rentable square footage is
measured, the ratio of rentable square feet to usable square feet, (ii) the type
of escalation clauses (including without limitation, operating costs, real
estate tax allowances or base year and rental adjustments), (iii) rental
abatement or free rent concessions, if any, (iv) brokerage commissions, (v) the
length of the term, (vi) the size and location of the premises being leased,
(vii) building standard work letters and/or tenant improvement allowances, if
any (taking into account the existing condition of the Premises or the Available
Space, as applicable, but expressly excluding giving any consideration to
alterations installed in the Premises at Tenant’s expense) (viii) the extent of
services provided to the leased premises and the extent and type of parking
rights granted the tenant, (ix) the date as of which the Fair Market Rental Rate
is to become effective, and (x) other generally applicable terms and conditions
of tenancy for such Comparable Transactions. The intent is that Tenant will
obtain the same rent and other economic benefits that Landlord would otherwise
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and receive the same economic payments and concessions that Landlord would
otherwise make, and receive in Comparable Transactions.

ARTICLE 3

BASE RENT

3.1 Base Rent. Subject to Section 3.2, Tenant shall pay, without notice or
demand except as otherwise expressly provided herein, to Landlord or Landlord’s
agent at the management office of the Project, or at such other place as
Landlord may from time to time designate in writing, in currency or a check for
currency which, at the time of payment, is legal tender for private or public
debts in the United States of America, base rent (“Base Rent”) as set forth in
Section 6 of the Summary, payable in equal monthly installments as set forth in
Section 6 of the Summary in advance on or before the first day of each and every
month during the Lease Term commencing on the Lease Commencement Date, without
any setoff or deduction whatsoever except as otherwise expressly provided
herein. The Base Rent for the first full month of the Lease Term during which
Base Rent is payable shall be paid at the time of Tenant’s execution of this
Lease. If any Rent payment date (including the Lease Commencement Date) falls on
a day of the month other than the first day of such month or if any payment of
Rent is for a period which is shorter than one month, the Rent for any
fractional month shall accrue on a daily basis for the period from the date such
payment is due to the end of such calendar month or to the end of the Lease Term
(if sooner) at a rate per day which is equal to 1/365 of the Rent. All other
payments or adjustments required to be made under the terms of this Lease that
require proration on a time basis shall be prorated on the same basis. All
payments received by Landlord from Tenant shall be applied, if Landlord elects
in its sole discretion, to the oldest payment obligation owed by Tenant to
Landlord, and no designation by Tenant, either in a separate writing or on a
check or money order, shall modify this clause or have any force or effect.

3.2 Base Rent Abatement and Credit.

3.2.1 Abatement. Tenant shall not be obligated to pay one-half (1/2) of the Base
Rent for the Premises initially leased hereunder for months seventeen (17),
eighteen (18), twenty-six (26), twenty-seven (27), thirty-seven (37) and
thirty-eight (38) of the initial Lease Term. Tenant shall be and remain
obligated during each of such months to pay the remaining one-half (1/2) of the
Base Rent and all Additional Rent otherwise due hereunder, including, without
limitation, pursuant to Article 4 below.

3.2.2 Rent Credit. Tenant shall be entitled to the following dollar credits
(“Rent Credit”) against Base Rent during the initial Lease Term (i.e., the Base
Rent otherwise payable under Section 3.1 shall be reduced by the following
amounts):

 

Months 1 – 6    $146,677.30 per month Months 7 – 8    $124,420.45 per month
Months 9 – 10    $66,770.55 per month Months 11 – 12    $44,513.70 per month
Month 13    $45,854.89 Months 14 – 16    $22,927.45 per month

Notwithstanding the foregoing provisions of this Section 3.2, if a Default has
occurred and is continuing at a time when Tenant would otherwise be entitled to
Base Rent abatement or a Rent Credit under this Section 3.2, Tenant shall not be
entitled to such abatement or Rent Credit, and Landlord shall not be obligated
to provide such abatement or Rent Credit; it being agreed, however, that if this
Lease is not terminated due to the Default and Tenant cures the Default,
Landlord shall apply any Base Rent abatement or Rent Credit held in abeyance
during the continuance of any such Default to the next monthly Base Rent
installment(s) due after the cure of such Default.

 

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ARTICLE 4

ADDITIONAL RENT

4.1 General Terms. As set forth in this Article 4, in addition to paying the
Base Rent specified in Article 3, Tenant shall pay “Tenant’s Share” of the
annual “Project Expenses,” as those terms are defined in Sections 4.2.6 and
4.2.4, respectively, equitably allocated to the tenants of the Building pursuant
to the terms of Section 4.3.1, to the extent such Project Expenses allocated to
the tenants of the Building are in excess of such Project Expenses applicable to
the “Base Year,” as that term is defined in Section 4.2.1. Such payments by
Tenant, together with any and all other amounts payable by Tenant to Landlord
pursuant to the terms of this Lease, are hereinafter collectively referred to as
the “Additional Rent”, and the Base Rent and the Additional Rent are sometimes
herein collectively referred to as “Rent.” All amounts due under this Article 4
as Additional Rent shall be payable for the same periods and in the same manner
as the Base Rent subject to the terms hereof. Without limitation on other
obligations of Tenant which survive the expiration of the Lease Term, the
obligations of Tenant to pay the Additional Rent provided for in this Article 4
shall survive the expiration of the Lease Term.

4.2 Definitions. As used in this Article 4, the following terms shall have the
meanings hereinafter set forth:

4.2.1 “Base Year” shall mean the period set forth in Section 7.1 of the Summary.

4.2.2 “Expense Year” shall mean each calendar year in which any portion of the
Lease Term falls, through and including the calendar year in which the Lease
Term expires.

4.2.3 “Operating Expenses” shall mean all expenses, costs and amounts of every
kind and nature incurred in connection with the management, maintenance, repair,
replacement, restoration or operation of the Project, including, without
limitation, any amounts paid or incurred for (i) the cost of supplying all
utilities, the cost of operating, maintaining, repairing, renovating, complying
with conservation measures in connection with, and managing the utility systems,
mechanical systems, sanitary and storm drainage systems, and elevator systems,
and the cost of supplies and equipment, maintenance, and service contracts in
connection therewith; (ii) the cost of licenses, certificates, permits and
inspections and the reasonable cost of contesting the validity or applicability
of any governmental enactments which may affect Operating Expenses, but not
costs incurred in connection with the implementation and operation of a
transportation system management program or a municipal or public shuttle
service or parking program resulting from Landlord’s future development
activities; (iii) the cost of all insurance which is customary for the
Comparable Buildings and is carried in connection with the Project, or any
portion thereof; (iv) the cost of landscaping, relamping, and all supplies,
tools, equipment and materials used in the operation, repair and maintenance of
the Project, or any portion thereof; (v) the cost of parking area repair,
restoration, and maintenance, including, but not limited to, resurfacing,
repainting, restriping, and cleaning; (vi) fees, charges and other costs,
including consulting fees, legal fees and accounting fees, of all contractors
and consultants; (vii) payments under any equipment rental agreements or
management agreements (including the reasonable and customary cost of any
management fee and the fair rental value of the property manager’s office, not
to exceed the rentable square footage of such office included in the Base Year);
(viii) wages, salaries and other compensation and benefits of all persons
engaged in the operation, maintenance, management, or security of the Project,
or any portion thereof, including employer’s Social Security taxes, unemployment
taxes or insurance, and any other taxes which may be levied on such wages,
salaries, compensation and benefits; (ix) payments under any easement, license,
operating agreement, declaration, restrictive covenant, or instrument pertaining
to the sharing of costs by the Project, or any portion thereof; (x) the cost of
operation, repair, maintenance and replacement of all systems and equipment
which serve the Project in whole or part; (xi) the cost of janitorial services,
alarm and security service, window cleaning, trash removal, replacement of wall
and floor coverings, ceiling tiles and fixtures in lobbies, corridors, restrooms
and other common or public areas or facilities, maintenance and replacement of
curbs and walkways, repair to roofs and re-roofing; (xii) the cost of any
capital improvements made to the Project which are intended as a labor-saving
device or to effect other economies in the operation or maintenance of the
Project, or any portion thereof, or made to all or any portion of the Project,
or any portion thereof, after the Lease Commencement Date that are required
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applicable to the Project as of the Lease Commencement Date; provided, however,
the same shall be amortized (including interest on the unamortized cost) over
the shorter of (A) the useful life, or (B) the cost recovery period (i.e., the
anticipated period to recover the full cost of such capital item from cost
savings achieved by such capital item), of the relevant capital item as
reasonably determined by Landlord’s accountants in accordance with generally
accepted accounting and management practices, consistently applied; and
(xiii) the cost of operations, maintenance, repairs, and other expenditures
(whether capital or non-capital in nature) with respect to the “Child Care
Facilities,” as that term is defined in Section 29.9, and their lease at the
Project. Notwithstanding the foregoing, for purposes of this Lease, Operating
Expenses shall not, however, include:

(a) costs, including marketing costs, legal fees, space planners’ fees,
advertising and promotional expenses, and brokerage fees incurred in connection
with the original construction or development, or original or future leasing of
the Project, and costs, including permit, license and inspection costs, incurred
with respect to the installation of tenant improvements made for new tenants
initially occupying space in the Project or incurred in renovating or otherwise
improving, decorating, painting or redecorating vacant space for tenants or
other occupants of the Project (excluding, however, such costs relating to any
common areas of the Project or parking facilities, but Operating Expenses shall
not include the cost of future upgrades to the Building Common Areas to
accommodate new tenants);

(b) except as set forth in subpart (xii) of the first paragraph of this
Section 4.2.3, depreciation, interest and principal payments on mortgages and
other debt costs, if any, penalties and interest, costs of capital repairs and
alterations to the Project, costs of any capital improvements to the Project
(except as contemplated in clause (xii) above) or, if capital in nature, the
costs of new equipment;

(c) costs for which the Landlord is reimbursed (or entitled to reimbursement) by
any tenant or occupant of the Project or by insurance by its carrier or any
tenant’s carrier or by anyone else, and electric power costs for which any
tenant directly contracts with the local public service company;

(d) any bad debt loss, rent loss, or reserves;

(e) costs associated with the operation of the business of the partnership or
entity which constitutes the Landlord, as the same are distinguished from the
costs of operation of the Project (which shall specifically include, but not be
limited to, accounting costs associated with the operation of the Project).
Costs associated with the operation of the business of the partnership or entity
which constitutes the Landlord include costs of partnership accounting and legal
matters, costs of defending any lawsuits with any mortgagee (except as the
actions of the Tenant may be in issue), costs of selling, syndicating,
financing, mortgaging or hypothecating any of the Landlord’s interest in the
Project, and costs incurred in connection with any disputes between Landlord and
its employees, between Landlord and Project management, or between Landlord and
other tenants or occupants, and Landlord’s general corporate overhead and
general and administrative expenses;

(f) the wages and benefits of any employee who does not devote substantially all
of his or her employed time to the Project unless such wages and benefits are
prorated to reflect time spent on operating and managing the Project vis-a-vis
time spent on matters unrelated to operating and managing the Project; provided,
that in no event shall Operating Expenses for purposes of this Lease include
wages and/or benefits attributable to personnel above the level of Project
manager;

(g) amount paid as ground rental for the Project by the Landlord;

(h) except for a Project management fee to the extent allowed pursuant to
item (m), below, overhead and profit increment paid to the Landlord or to
subsidiaries or affiliates of the Landlord for services in the Project to the
extent the same exceeds the costs of such services rendered by qualified,
first-class unaffiliated third parties on a competitive basis;

(i) any compensation paid to clerks, attendants or other persons in commercial
concessions operated by the Landlord, provided that any compensation paid to any
concierge at the Project shall be includable as an Operating Expense;

 

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(j) rentals and other related expenses incurred in leasing air conditioning
systems, elevators or other equipment which if purchased the cost of which would
be excluded from Operating Expenses as a capital cost, except equipment not
affixed to the Project which is used in providing janitorial or similar services
and, further excepting from this exclusion such equipment rented or leased to
remedy or ameliorate an emergency condition in the Project not caused by
Landlord;

(k) all items and services for which Tenant or any other tenant in the Project
reimburses Landlord or which Landlord provides selectively to one or more
tenants (other than Tenant) without reimbursement;

(l) costs, other than those incurred in ordinary maintenance and repair, for
sculpture, paintings or other objects of art;

(m) fees payable by Landlord for management of the Project in excess of three
and one-half percent (3.5%) (the “Management Fee Cap”) of Landlord’s gross
rental revenues (but excluding the cost of after-hours services or utilities)
from the Project for any calendar year or portion thereof;

(n) any costs expressly excluded from Operating Expenses elsewhere in this
Lease;

(o) rent for any office space occupied by Project management personnel to the
extent the size of such office space exceeds the rentable square footage of such
space included in the Base Year or the rental rate exceeds the fair market
rental value of office space occupied by management personnel of Comparable
Buildings;

(p) costs arising from the negligence or willful misconduct of Landlord or its
agents, employees, vendors, contractors, or providers of materials or services;

(q) costs incurred to comply with laws relating to the removal of Hazardous
Material (as defined in Section 29.23) which was in existence in the Building or
on the Project prior to the date of this Lease, and costs incurred to remove,
remedy, contain, or treat Hazardous Material brought into the Building or onto
the Project after the date hereof by Landlord or its agents or contractors or
any other tenant of the Project in violation of Environmental Laws;

(r) costs arising from Landlord’s charitable or political contributions;

(s) advertising and promotional expenditures (whether for existing tenants or in
order to attract new tenants), and costs of acquisition and maintenance of signs
in or on the Building to identify the owner of the Building or other tenants;

(t) marketing costs, including leasing commissions, attorneys’ fees (in
connection with the negotiation and preparation of letters, deal memos, letters
of intent, leases, subleases and/or assignments), space planning costs, and
other costs and expenses incurred in connection with the lease, sublease and/or
assignment negotiations and transactions with present or prospective tenants or
other occupants of the Building;

(u) costs, including permit, license and inspection costs, incurred with respect
to the installation of tenants’ or other occupants’ improvements made for
tenants or other occupants in the Building or Project or incurred in renovating
or otherwise improving, decorating, painting or redecorating vacant space for
tenants or other occupants of the Building or Project;

(v) expenses in connection with services or other benefits for which Tenant is
charged directly;

(w) costs incurred by Landlord due to the violation by Landlord or any tenant of
the terms and conditions of any lease of space in the Project or any other
agreement;

(x) costs for services normally provided by a property manager where Operating
Expenses already include a management fee to such property manager;

 

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(y) costs arising from any construction defects in the Project or from latent
defects in the shell and core of the Building or any tenant improvements, or
repair thereof;

(z) costs (including in connection therewith all attorneys’ fees and costs of
settlements, judgments and payments in lieu thereof) arising from claims,
disputes or potential disputes in connection with potential or actual claims,
litigation or arbitration pertaining to Landlord and/or the Project;

(aa) the cost of electric power for which any tenant directly contracts with the
local public utility company or for which any tenant is separately metered or
submetered and pays Landlord directly, provided, however, that if any tenant in
the Building contracts directly for electric power service or is separately
metered or submetered during any portion of the relevant period, the total
electric power costs for the Building shall be “grossed up” to reflect what
those costs would have been had each tenant in the Building used the Building
standard amount of electric power;

(bb) the cost of making any repairs, replacements or modifications to the
Building or the Project that are required by any federal, state, and local laws,
ordinances, rules and regulations, court orders, governmental directives,
governmental orders and interpretations of the foregoing (“Applicable Laws”) in
effect as of, and as interpreted and enforced by governmental authority having
jurisdiction or responsibility for such law as of, the date of this Lease,
including without limitation the Americans with Disabilities Act (the “ADA”) and
any similar state or local law; and

(cc) the costs of repair of an uninsured casualty (or the deductible portion of
an insured casualty) to the Building to the extent such costs, when amortized
over the useful life of such repair determined in accordance with generally
accepted accounting and management practices, exceed Two Dollars ($2.00) per
rentable square foot of the Premises, per annum.

If the Project is not fully occupied during all or a portion of any Expense Year
(including the Base Year), Landlord shall make an appropriate adjustment to the
variable components of Operating Expenses for such year employing sound
accounting and management principles, to determine the amount of Operating
Expenses that would have been paid had the Project been fully occupied; and the
amount so determined shall be deemed to have been the amount of Operating
Expenses for such year.

4.2.4 “Project Expenses” shall mean the sum of “Operating Expenses” and “Tax
Expenses”.

4.2.5 “Tax Expenses” shall mean all federal, state, county, or local
governmental or municipal taxes, fees, charges or other impositions of every
kind and nature, whether general, special, ordinary or extraordinary (including,
without limitation, real estate taxes, general and special assessments, transit
taxes, leasehold taxes or taxes based upon the receipt of rent, including gross
receipts or sales taxes applicable to the receipt of rent, unless required to be
paid by Tenant, personal property taxes imposed upon the fixtures, machinery,
equipment, apparatus, systems and equipment, appurtenances, furniture and other
personal property used in connection with all or any portion of the Project),
which shall be paid during any Expense Year (without regard to any different
fiscal year used by such governmental or municipal authority) because of or in
connection with the ownership, leasing and operation of the Project, or any
portion thereof.

(a) Tax Expenses shall include, without limitation:

(i) Any assessment, tax, fee, levy or charge in addition to, or in substitution,
partially or totally, of any assessment, tax, fee, levy or charge previously
included within the definition of real property tax, it being acknowledged by
Tenant and Landlord that Proposition 13 was adopted by the voters of the State
of California in the June 1978 election (“Proposition 13”) and that assessments,
taxes, fees, levies and charges may be imposed by governmental agencies for such
services as fire protection, street, sidewalk and road maintenance, refuse
removal and for other governmental services formerly provided without charge to
property owners or occupants, and, in further recognition of the decrease in the
level and quality of governmental services and amenities as a result of
Proposition 13, Tax Expenses

 

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shall also include any governmental or private assessments or the Project’s
contribution towards a governmental or private cost-sharing agreement for the
purpose of augmenting or improving the quality of services and amenities
normally provided by governmental agencies, provided that Tax Expenses allocable
to any such private assessment or private cost-sharing agreement were included
in the Base Year (or the Base Year is adjusted therefor). It is the intention of
Tenant and Landlord that all such new and increased assessments, taxes, fees,
levies, and charges and all similar assessments, taxes, fees, levies and charges
be included within the definition of Tax Expenses for the purposes of this
Lease;

(ii) Any assessment, tax, fee, levy, or charge allocable to or measured by the
area of the Premises or the Rent payable hereunder, including, without
limitation, any gross income tax with respect to the receipt of such rent, or
upon or with respect to the possession, leasing, operating, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or
any portion thereof;

(iii) Any assessment, tax, fee, levy or charge, upon this transaction or any
document to which Tenant is a party, creating or transferring an interest or an
estate in the Premises; and

(iv) Any possessory taxes charged or levied in lieu of real estate taxes.

(b) Any reasonable expenses incurred in attempting to protest, reduce or
minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such
expenses are paid.

(c) Subject to clause (e) below, tax refunds shall be credited against Tax
Expenses and refunded to Tenant regardless of when received, based on the
Expense Year to which the refund is applicable, provided that in no event shall
the amount to be refunded to Tenant for any such Expense Year exceed the total
amount paid by Tenant as Additional Rent under this Article 4 for such Expense
Year.

(d) The amount of Tax Expenses for the Base Year attributable to the valuation
of the Project, inclusive of tenant improvements, shall be known as “Base
Taxes.” If, in any comparison Expense Year subsequent to the Base Year, the
amount of Tax Expenses decreases, Tenant shall not be entitled to apply any such
decrease in Tax Expenses against Tenant’s Share of any increase in Operating
Expenses in such comparison Expense Year or any subsequent comparison Expense
Year.

(e) Notwithstanding anything to the contrary set forth in this Lease, the amount
of Tax Expenses for the Base Year shall be calculated based on a fully completed
Project.

(f) Notwithstanding anything to the contrary contained in this Section 4.2.5,
Tax Expenses shall exclude the following:

(i) any excess profits taxes, franchise taxes, gift taxes, transfer, recording,
capital stock taxes, inheritance and succession taxes, estate taxes, federal,
state and local income taxes, and other taxes to the extent applicable to
Landlord’s general or net income (as opposed to rents or receipts attributable
to the operation of the Project), or documentary transfer taxes;

(ii) taxes on tenant improvements in any other space in the Project based upon
an assessed valuation level in excess of the assessed valuation level for which
Tenant is individually responsible under this Lease;

(iii) taxes imposed on land and improvements other than the Project;

(iv) penalties or interest resulting from late or incomplete payments; and

(v) taxes levied on Landlord’s rental income, unless such tax or assessment is
imposed in lieu of real property taxes.

 

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4.2.6 “Tenant’s Share” shall mean the percentage set forth in Section 7.2 of the
Summary. Tenant’s Share was calculated by multiplying the number of rentable
square feet of the Premises by 100, and dividing the product by the total
rentable square feet in the Building.

4.3 Allocation and Calculation of Project Expenses.

4.3.1 Allocation of Project Expenses to Tenants of the Building. Project
Expenses (i.e., Operating Expenses and Tax Expenses) are determined annually for
the Project as a whole. Since the Building is only one of the buildings which
constitute the Project, Project Expenses shall be allocated by Landlord, in its
reasonable discretion, to both the tenants of the Building and the tenants of
the other buildings in the Project. The portion of Project Expenses allocated to
the tenants of the Building shall consist of (i) all Project Expenses
attributable solely to the Building and (ii) an equitable portion of Project
Expenses attributable to the Project as a whole and not attributable solely to
the Building, the Adjacent Building or to any other building of the Project.
Additionally, in allocating Project Expenses to the tenants of the Project,
Landlord shall equitably allocate (based on use of the Project area or services
in question only) some or all of the Project Expenses allocable to tenants of
the Project among different tenants of the Project (the “Cost Pools”). Such Cost
Pools shall include the office space tenants of the Project and the retail space
tenants of the Project.

4.3.2 Calculation of Project Expenses. Notwithstanding anything to the contrary
set forth in this Article 4, when calculating the Project Expenses for the Base
Year, such Project Expenses shall not include any increase in Tax Expenses
attributable to special assessments, charges, costs, or fees, or due to
modifications or changes in governmental laws or regulations, including but not
limited to the institution of a split tax roll, and Operating Expenses for the
Base Year shall exclude market-wide increases due to extraordinary
circumstances, including, but not limited to, boycotts and strikes, and utility
rate increases due to extraordinary circumstances including, but not limited to,
conservation surcharges, boycotts, embargoes or other shortages, so long as
future Tax Expenses and Operating Expenses after the Base Year do not include
any such items.

4.3.3 Payment in Installments. To the extent permitted by Applicable Laws,
Landlord shall have the option to either pay assessments for Tax Expenses in
installments or in one lump sum payment; provided, however, that for purposes of
calculating Tax Expenses under this Lease, it shall be deemed that Landlord paid
the assessments over the maximum number of installments permitted by Applicable
Laws, and Tax Expenses shall include any and all interest that would have been
charged thereon.

4.4 Calculation and Payment of Additional Rent.

4.4.1 Calculation of Excess. For every Expense Year ending or commencing within
the Lease Term, Tenant shall pay to Landlord, in the manner set forth in
Section 4.4.2, and as Additional Rent, an amount equal to Tenant’s Share of
Project Expenses for such Expense Year in excess of Tenant’s Share of Project
Expenses for the Base Year.

4.4.2 Statement of Actual Project Expenses and Payment by Tenant. Landlord shall
give to Tenant on or before the first day of April following the end of each
Expense Year, a statement (the “Statement”) which shall state the Project
Expenses incurred or accrued for such preceding Expense Year and the amount
thereof allocated to the tenants of the Building, and which shall indicate the
amount, if any, of Tenant’s Share of Project Expenses in excess of Tenant’s
Share of Project Expenses for the Base Year. Upon receipt of the Statement for
each Expense Year ending during the Lease Term, Tenant shall pay, with its next
installment of Base Rent due that is at least thirty (30) days after Landlord’s
delivery of the Statement, the full amount of Tenant’s Share of Project Expenses
for such Expense Year in excess of Tenant’s Share of Project Expenses for the
Base Year, less the amounts, if any, paid during such Expense Year as “Estimated
Additional Rent,” as that term is defined in Section 4.4.3. If the amount of
Tenant’s Share of Project Expenses for such Expense Year in excess of Tenant’s
Share of Project Expenses for the Base Year is less than the amount paid by
Tenant as Estimated Additional Rent during the applicable period of the Expense
Year (but not including any period of the Expense Year which occurs after the
Lease has terminated), Landlord shall pay the difference to Tenant together with
the applicable Statement, even if the Lease has terminated or expired. The
failure of Landlord to timely furnish the Statement for any Expense Year shall
not prejudice Landlord or Tenant from enforcing its rights under this Article 4;
provided, however, that, notwithstanding

 

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anything to the contrary in this Lease, Tenant shall not be obligated to pay for
any Project Expenses incurred in a particular Expense Year submitted to Tenant
for payment thereof after the end of the thirty-sixth (36th) calendar month
following such Expense Year. Even though the Lease Term has expired and Tenant
has vacated the Premises, when the final determination is made of Tenant’s Share
of Project Expenses allocated to the tenants of the Building for the Expense
Year in which this Lease terminates, if Tenant’s Share of Project Expenses for
such Expense Year is in excess of Tenant’s Share of Project Expenses for the
Base Year, then Tenant shall within thirty (30) days of billing pay to Landlord
an amount as calculated pursuant to the provisions of Section 4.4.1. The
provisions of this Section 4.4.2 shall survive the expiration or earlier
termination of the Lease Term.

4.4.3 Statement of Estimated Project Expenses. In addition, Landlord shall give
Tenant a yearly expense estimate statement (the “Estimate Statement”) which
shall set forth Landlord’s reasonable estimate (the “Estimate”) of what the
total amount of Project Expenses for the then-current Expense Year shall be, the
amount thereof to be allocated to the tenants of the Building, and the estimated
amount of Tenant’s Share of Project Expenses in excess of Tenant’s Share of the
Project Expenses for the Base Year (the “Estimated Additional Rent”). The
failure of Landlord to timely furnish the Estimate Statement for any Expense
Year shall not preclude Landlord from enforcing its rights to collect any
Estimated Additional Rent under this Article 4. If, pursuant to the Estimate
Statement, Estimated Additional Rent is calculated for the then-current Expense
Year, Tenant shall pay, with its next installment of Base Rent due, a fraction
of the Estimated Additional Rent for the then-current Expense Year (reduced by
any amounts paid pursuant to the last sentence of this Section 4.4.3). Such
fraction shall have as its numerator the number of months which have elapsed in
such current Expense Year, including the month of such payment, and twelve
(12) as its denominator. Until a new Estimate Statement is furnished (which
Landlord shall have the right to deliver to Tenant at any time), Tenant shall
pay monthly, with the monthly Base Rent installments, an amount equal to
one-twelfth (1/12) of the total Estimated Additional Rent set forth in the
previous Estimate Statement delivered by Landlord to Tenant.

4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible. Tenant
shall pay directly, or reimburse Landlord upon demand, for any and all of the
following taxes required to be paid by Landlord (excluding state, local and
federal personal or corporate income taxes):

4.5.1 taxes measured by or reasonably attributable to the cost or value of
Tenant’s equipment, furniture, fixtures and other personal property located in
the Premises, or by the cost or value of any leasehold improvements made in or
to the Premises by or for Tenant, to the extent the cost or value of such
leasehold improvements exceeds the cost or value of a building standard
build-out (which is deemed to be $40.00 per rentable square foot) regardless of
whether title to such improvements shall be vested in Tenant or Landlord,
provided that this subparagraph 4.5.1 shall be interpreted and applied to
determine Tenant’s obligation hereunder as though all tenant leases for the
Building had the same provision;

4.5.2 except to the extent included in Tax Expenses, taxes assessed upon or with
respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises or any portion of
the Project (including the Project parking facility); or

4.5.3 taxes assessed upon this transaction or any document to which Tenant is a
party creating or transferring an interest or an estate in the Premises.

4.6 Tenant’s Audit Rights. If Tenant wishes to dispute an amount shown on the
annual Statement of Project Expenses, Tenant must commence such audit in
accordance with this Section 4.6 within twenty-four (24) months after Tenant’s
receipt of the annual Statement (“Review Period”). Tenant must give Landlord
notice of any such audit at least 30 days prior to commencing such audit. Tenant
may only conduct one audit per Expense Year. If Tenant does not commence an
audit within such Review Period, Tenant shall have waived its right to audit
such annual Statement. No audit may be conducted while Tenant is in Default
under this Lease. Any audit by Tenant hereunder must be conducted by a
nationally or regionally recognized independent certified public accountant
designated by Tenant, with such firm to be paid on an hourly and not on a
contingent fee basis Tenant’s auditors may conduct a reasonable and specifically
defined audit of Landlord’s books and records concerning the Operating Expenses
of the Project reflected on the annual Statement, provided that Tenant causes
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diligently pursue such audit to completion as quickly as reasonably possible and
provided, further, that Tenant and such accountant shall, and shall each use
their commercially reasonable efforts to cause their respective agents and
employees to, maintain all information contained in Landlord’s books and records
in strict confidence. Landlord agrees to make available to Tenant’s auditors, at
Landlord’s office in the Building, the books and records relevant to the audit
for review and copying, but such books and records may not be removed from
Landlord’s offices. Tenant shall bear all costs of such audit, including
Landlord’s actual copying costs and personnel costs, if any, incurred in
connection with such audit (provided that, prior to incurring any personnel
costs in connection with such audit, Landlord shall advise Tenant of Landlord’s
anticipated personnel costs so that Tenant may, at Tenant’s option, modify
Tenant’s activities with regard to such audit in order to preclude the need for
Landlord to incur such personnel costs), except that if the audit (as conducted
and certified by the auditor) shows an aggregate overstatement of Project
Expenses of five percent (5%) or more, and Landlord’s auditors concur in such
findings (or, in the absence of such concurrence, such overstatement is
confirmed by binding arbitration between the parties conducted in Santa Monica
California by the American Arbitration Association under the Commercial
Arbitration Rules, using a single arbitrator selected by the parties pursuant to
such rules, or by such other dispute resolution mechanism to which the parties
may mutually agree in writing), then Landlord shall bear all costs of the audit
(and, if applicable, the arbitration or other dispute resolution mechanism). If
the arbitration or other dispute resolution mechanism selected by the parties
confirms that the Project Expenses were not overstated by five percent (5%) or
more, then Tenant shall bear the cost of the audit and such arbitration or other
dispute resolution mechanism. If the agreed or confirmed audit shows an
underpayment of Project Expenses by Tenant, Tenant shall pay to Landlord, within
thirty (30) days after the audit is agreed to or confirmed, the amount owed to
Landlord, and, if the agreed or confirmed audit shows an overpayment of Project
Expenses by Tenant, Landlord shall reimburse Tenant for such overpayment within
thirty (30) days after the audit is agreed to or confirmed. In addition to the
other rights of Tenant set forth in this Section 4.6, Tenant shall have the
right within twenty-four (24) months after Tenant’s receipt of an annual
Statement, without conducting an audit, to meet with Landlord’s representatives
to discuss items on such Statement and to obtain from Landlord information
reasonably requested by Tenant in support of the amounts shown on such
Statement.

ARTICLE 5

USE OF PREMISES

Tenant shall use the Premises solely for general office purposes, including
software development, consistent with the character of the Project as a
first-class office building project, and lawful uses ancillary to general office
use, and Tenant shall not use or permit the Premises to be used for any other
purpose or purposes whatsoever without the prior written consent of Landlord,
which may be withheld in Landlord’s sole discretion. Tenant further covenants
and agrees that Tenant shall not use, or suffer or permit any person or persons
to use, the Premises or any part thereof for any use or purpose contrary to the
provisions of the Rules and Regulations set forth in Exhibit “C”, attached
hereto, or in violation of Applicable Laws. Tenant’s use of the Project common
areas and Project parking garage shall comply with all recorded covenants,
conditions and restrictions currently of record with respect to the Project.
Tenant shall not use or allow another person or entity to use any part of the
Premises for the storage, use, treatment, manufacture or sale of “Hazardous
Material”, as that term is defined in Section 29.23, and subject to the
exceptions provided for in said section.

ARTICLE 6

SERVICES AND UTILITIES

6.1 Standard Tenant Services. Landlord shall provide the following services on
all days (unless otherwise stated below) during the Lease Term.

6.1.1 Subject to all governmental rules, regulations and guidelines applicable
thereto, Landlord shall provide heating, ventilation and air conditioning
(“HVAC”) in the Premises when necessary for normal comfort for normal office use
and normal occupancy density as determined by Landlord, from Monday through
Friday, during the period from 8 A.M. to 6 P.M. and on Saturday during the
period from 9 A.M. to 1 P.M., except for the date of observation of national and
state holidays (including, without limitation, New Year’s Day, Independence Day,
Labor Day, Memorial Day, Thanksgiving Day and Christmas Day) (collectively, the
“Holidays”).

 

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6.1.2 Landlord shall provide adequate electrical wiring and facilities and power
for normal general office use as determined by Landlord; provided, however,
Landlord confirms that it shall furnish to the Premises 24 hours per day, 7 days
per week (except for emergencies and periodic repairs), subject to the terms of
this Lease, an average of four (4) watts of 120 volts electric current
(connected load) per rentable square foot of the Premises (exclusive of electric
current for building standard HVAC) and one (1) watt of 277 volts electric
current per rentable square foot of the Premises for lighting. Tenant shall be
entitled to draw additional electric power, up to Tenant’s pro rata share (based
on the ratio of the rentable square footage of the Premises to the rentable
square footage of the Building) of the Building’s electrical capacity, so long
as Tenant provides, at Tenant’s sole cost and expense, the transformers, panel
boards, electric circuits, breakers and power meters for such additional
electrical load. Tenant shall bear the cost of replacement of “above Building
standard” lamps, starters and ballasts for lighting fixtures within the
Premises.

6.1.3 Landlord shall provide reasonable amounts of city water (both cold and
tepid) to the Building core on the floor of the Building on which the Premises
are located for drinking, lavatory and toilet purposes. Tenant shall be
responsible for the costs of all distribution of water from the Building core on
the floor to any new drinking fountains or new lavatory facilities not presently
located in the space, or otherwise provided in the Premises.

6.1.4 Landlord, as an Operating Expense, shall provide janitorial services
Monday through Friday, commencing after 6:00 P.M., except the date of
observation of the Holidays, in and about the Premises and window washing
services in a manner consistent with the Comparable Buildings. Landlord may
impose a reasonable charge on Tenant for providing any additional or unusual
janitorial or cleaning services to Tenant or the Premises which are required
because of the nature or hours of Tenant’s business operations, Tenant’s
non-Building standard Tenant Improvements (as such term is defined in the Tenant
Work Letter attached hereto as Exhibit “E”), and/or the security procedures
imposed on the janitorial contractor providing such services for the Premises,
provided that Tenant receives advance notice of such unusual cleaning (except in
cases of emergency).

6.1.5 Subject to the other provisions of this Lease, Tenant shall have (a) the
right to access the Premises, Building, and Project and subterranean parking
facility twenty-four (24) hours per day, seven (7) days per week, 365 days per
year; and (b) elevator service to the Premises floor(s) twenty-four (24) hours
per day, seven (7) days per week, in each case as may be controlled by an access
card or similar security access device, and subject, however, to Landlord’s
right to control access to the Project, the Building, the subterranean parking
facility or the Premises in the case of emergencies or to impose reasonable
security measures in response to security concerns involving the Project or any
portion thereof. Landlord shall provide non-exclusive freight elevator service
during the hours of operation set forth in Section 6.1.1 above at no charge to
Tenant. Landlord shall provide or cause to be provided access control, security
and supervision substantially consistent with the Comparable Buildings. Although
Landlord agrees to arrange for such access control and security, neither
Landlord nor any Landlord Parties (as defined in Section 10.1 hereof) shall be
liable for, and Landlord and the Landlord Parties are hereby released from, any
responsibility for any damage either to person or property sustained by Tenant
or any of its employees, invitees or contractors, incurred in connection with or
arising from any acts or omissions of Landlord’s security contractor, except to
the extent caused by the negligence or willful misconduct of Landlord or any
Landlord Party or Landlord’s default under this Lease. Tenant shall have the
right to install, at Tenant’s expense, a separate security access control system
(which may be a card-key security system) in the Premises, so long as such
security system is compatible with the Building’s card-key access control system
which controls access to the parking areas, Building entry and elevator access.
The security system installed by Tenant in the Premises shall be subject to
Landlord’s prior written approval of the type of system and its installation,
which approval Landlord will not unreasonably withhold so long as such system
meets the foregoing compatibility requirement.

6.2 Overstandard Tenant Use.

(a) Tenant shall not, without Landlord’s prior written consent, which shall not
be unreasonably withheld, conditioned or delayed (but may be withheld in
Landlord’s discretion if Tenant’s proposed use would materially and adversely
affect any of the Building Systems, would materially and adversely affect access
to or safety of any premises in the Building, or would materially and adversely
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Tenant agrees to pay for Landlord’s costs of mitigating any such material and
adverse effect, as reasonably determined by Landlord), use heat-generating
machines, machines other than normal fractional horsepower office machines, or
equipment or lighting other than Building standard lights in the Premises, which
may affect the temperature otherwise maintained by the air conditioning system
or increase the water normally furnished for the Premises by Landlord pursuant
to the terms of Section 6.1. If such consent is given, Landlord shall have the
right to install supplementary air conditioning units or other facilities in the
Premises, including supplementary or additional metering devices, and the cost
thereof, including the cost of installation, operation and maintenance,
increased wear and tear on existing equipment and other similar charges, shall
be paid by Tenant to Landlord upon billing by Landlord. If Tenant uses water,
electricity, heat or air conditioning in excess of that supplied by Landlord
pursuant to Section 6.1, Tenant shall pay to Landlord, upon billing, the cost of
such excess consumption, the cost of the installation, operation, and
maintenance of equipment which is installed in order to supply such excess
consumption, and the cost of the increased wear and tear on existing equipment
caused by such excess consumption; and Landlord may install devices to
separately meter any increased use and in such event Tenant shall pay the
increased cost directly to Landlord, on demand, including the cost of such
additional metering devices. Amounts payable by Tenant to Landlord for such use
of additional utilities shall be deemed Additional Rent hereunder and shall be
billed on a monthly basis.

(b) Without limiting the generality of the foregoing, Tenant shall have the
right, subject to compliance with Article 8 and subject to Landlord’s reasonable
approval with respect to capacity and specifications, to install and use
supplemental air conditioning units in the Premises, and Tenant shall be solely
responsible for all costs and expenses thereof, including the cost of
installation, operation and maintenance of such units. The Building does not
have chilled water available for Tenant’s supplemental air conditioning units.
Tenant shall have the right to utilize the Building’s condenser water to serve
Tenant’s supplemental air conditioning units by connecting to the Building’s
condenser water cooling tower on the roof, provided that Tenant shall pay the
following charges in connection therewith as Additional Rent hereunder within
thirty (30) days of Landlord’s billing therefor: a $750 per ton one-time
connection fee; a per month operating charge for Tenant’s use of the cooling
tower (currently $29.84 per ton per month); the cost of any electrical
consumption associated with Tenant’s connection to the cooling tower (currently
billed at $0.15 per kilowatt hour); and the cost of installation of a submeter
to monitor such electricity usage by Tenant. Landlord may require Tenant, at
Tenant’s sole cost and expense, to remove any such supplemental air conditioning
units upon the expiration or earlier termination of this Lease and repair any
damage to the Premises and the Project caused by such removal, provided that
Landlord shall only have the right to require such removal and restoration if
Landlord notifies Tenant in writing at the time of plan approval that removal
will be required.

(c) Subject to availability of space, Tenant shall have the right to install, at
Tenant’s sole cost and expense, air cooled condenser unit(s) on the roof of the
Building (referred to herein as the “Additional HVAC Equipment”) to support
Tenant’s supplemental air units in the Premises. Tenant shall pay Landlord five
hundred dollars ($500) per month as rental for the rooftop space; provided that
Landlord makes no representation or warranty that there is space available on
the roof for any Additional HVAC Equipment. In the event that the Additional
HVAC Equipment will be located on the roof, Tenant and Landlord shall enter into
a rooftop license agreement in the form attached hereto as Exhibit “J”. The
Additional HVAC Equipment shall comply with applicable insurance regulations and
applicable laws, shall not cause permanent damage or injury to the Building,
Building Systems, Base, Shell and Core or the Premises, shall not create a
dangerous or hazardous condition nor interfere with or disturb other tenants in
the Building, and shall be consistent with a first-class office building. Tenant
shall be responsible for all costs related to the Additional HVAC Equipment and
installation thereof, including without limitation, costs of any modification to
the Base, Shell and Core, Building Systems and Building Structure and costs of
subsequent maintenance in connection therewith. Landlord may separately meter
the utilities supplied to such Additional HVAC Equipment and in such event
Tenant shall pay the cost thereof directly to Landlord, within thirty (30) days
of billing therefor, including the cost of such additional metering devices.
Amounts payable by Tenant to Landlord pursuant to this Section 6.2(c) shall be
deemed Additional Rent hereunder and shall be billed on a monthly basis. At
Landlord’s option, Landlord may require Tenant, at Tenant’s sole cost and
expense, to remove the Additional HVAC Equipment upon the expiration or earlier
termination of this Lease and repair any damage to the rooftop and any other
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of the Project caused by such removal, provided that Landlord shall only have
the right to require such removal and restoration if Landlord notifies Tenant in
writing at the time of plan approval that removal will be required.

6.3 After-Hours HVAC. Tenant shall have the ability to activate the HVAC system
for service to the Premises twenty-four (24) hours per day, seven (7) days per
week, 365 days per year (except for emergencies and for periodic repairs) which
includes, without limitation, during all hours for which Landlord is not
obligated to supply such HVAC utilities pursuant to the terms of Section 6.1
(“After-Hours HVAC”). All After-Hours HVAC service shall be provided to Tenant
by Landlord, at Tenant’s expense, at the prevailing rate charged at the Building
therefor from time to time (which is currently $85.00 per floor per hour);
provided that if Tenant is separately charged for After-Hours HVAC in no event
shall any charges related to providing After-Hours HVAC be included in Operating
Expenses. Amounts payable by Tenant to Landlord for such use of After-Hours HVAC
services shall be deemed Additional Rent hereunder and shall be billed on a
monthly basis. Notwithstanding anything to the contrary contained herein, Tenant
shall not be obligated to pay for a total of 1,720 hours of After Hours HVAC
provided to the Premises initially leased hereunder during the initial Lease
Term (the “Free HVAC”). The Free HVAC may be allocated to the initial Premises
as desired by Tenant over the course of the initial Lease Term, until exhausted.

6.4 Interruption of Use. Except as otherwise expressly provided in this Lease,
Tenant agrees that Landlord shall not be liable for damages, by abatement of
Rent or otherwise, for failure to furnish or delay in furnishing any service
(including telephone and telecommunication services), or for any diminution in
the quality or quantity thereof, when such failure or delay or diminution is
occasioned, in whole or in part, by repairs, replacements, or improvements, by
any strike, lockout or other labor trouble, by inability to secure electricity,
gas, water, or other fuel at the Building or Project after reasonable effort to
do so, by any accident or casualty whatsoever, by act or default of Tenant or
other parties, or by any other cause beyond Landlord’s reasonable control; and
such failures or delays or diminution shall never be deemed to constitute an
eviction or disturbance of Tenant’s use and possession of the Premises or
relieve Tenant from paying Rent or performing any of its obligations under this
Lease. Furthermore, except as otherwise expressly provided in this Lease,
Landlord shall not be liable under any circumstances for a loss of, or injury
to, property or for injury to, or interference with, Tenant’s business,
including, without limitation, loss of profits, however occurring, through or in
connection with or incidental to a failure to furnish any of the services or
utilities as set forth in this Article 6, including, but not limited to, a
failure to provide telecommunications, including telephone risers. Landlord may
comply with voluntary controls or guidelines promulgated by any governmental
entity relating to the use or conservation of energy, water, gas, light or
electricity or the reduction of automobile or other emissions without creating
any liability of Landlord to Tenant under this Lease, provided that the Premises
are not thereby rendered untenantable and such compliance does not materially
interfere with Tenant’s use of the Premises.

6.5 Rent Abatement. If Landlord fails to provide any of the services required to
be provided by Landlord under Section 6.1 or to perform the obligations required
of Landlord under the terms of this Lease and such failure causes all or a
portion of the Premises to be untenantable and unusable by Tenant and such
failure relates to the non-functioning of the heat, ventilation, and air
conditioning system in the Premises, the electricity in the Premises, the
non-functioning of the elevator or any other service essential to Tenant’s use
and occupancy of the Premises, or a failure to provide access to the Premises,
Tenant shall give Landlord notice (the “Initial Notice”), specifying such
failure (the “Landlord Failure”). If Landlord has not cured such Landlord
Failure and reinstated such services within three (3) business days after the
receipt of the Initial Notice (the “Eligibility Period”), Tenant may deliver an
additional notice to Landlord (the “Additional Notice”), specifying such
Landlord Failure and Tenant’s intention to abate the payment of Rent under this
Lease. If Landlord does not cure such Landlord Failure and reinstate such
services within two (2) business days of receipt of the Additional Notice,
Tenant may, upon written notice to Landlord, immediately abate Rent payable
under this Lease for that portion of the Premises rendered untenantable and not
used by Tenant, for the period beginning on the date of the Initial Notice to
the earlier of the date Landlord cures such Landlord Failure or the date Tenant
recommences the use of such portion of the Premises. Except as provided in this
Section 6.4, nothing contained herein shall be interpreted to mean that Tenant
is excused from paying Rent due hereunder.

 

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ARTICLE 7

REPAIRS

Tenant shall, at Tenant’s own expense, keep or cause to be kept the Premises,
including all improvements, fixtures and furnishings therein, in good order,
repair and condition at all times during the Lease Term. In addition, Tenant
shall, at Tenant’s own expense, but under the supervision and subject to the
prior approval of Landlord, and within any reasonable period of time specified
by Landlord, promptly and adequately repair all damage to the Premises and
replace or repair all damaged, broken, or worn fixtures and appurtenances in the
Premises. Notwithstanding the foregoing, subject to the cost allocations
therefor elsewhere in this Lease, Landlord shall be responsible for repairs,
maintenance and improvements to the exterior walls, foundation, structure and
roof of the Building, the structural portions of the floors of the Building, the
common areas, and the Building Systems, except to the extent that such repairs
are required due to the negligence or willful misconduct of Tenant; provided,
however, that if such repairs are due to the negligence of Tenant, Landlord
shall nevertheless make such repairs at Tenant’s expense, subject to
Section 10.5. Landlord may, but shall not be required to, enter the Premises at
all reasonable times to make such repairs, alterations, improvements or
additions to the Premises or to the Project or to any equipment located in the
Project as Landlord shall desire or deem necessary or as Landlord may be
required to do by governmental or quasi-governmental authority or court order or
decree, provided that, except in the case of an emergency, Landlord shall give
Tenant at least 24 hours prior written notice of any such entry into the
Premises, and Landlord shall undertake such work in a diligent manner which
minimizes any interference with Tenant’s use or occupancy of the Premises to the
greatest extent practicable. Tenant hereby waives and releases its right to make
repairs at Landlord’s expense under Sections 1941 and 1942 of the California
Civil Code or under any similar law, statute, or ordinance now or hereafter in
effect.

ARTICLE 8

ADDITIONS AND ALTERATIONS

8.1 Landlord’s Consent to Alterations. Except as hereinafter provided in this
Section 8.1, Tenant may not make any improvements, alterations, additions or
changes to the Premises (collectively, the “Alterations”) without first
procuring the prior written consent of Landlord to such Alterations, which
consent shall be requested by Tenant not less than ten (10) business days prior
to the desired date of commencement thereof and which consent will not be
unreasonably withheld, conditioned or delayed; provided however, that Landlord’s
consent shall not be required for Alterations which are strictly cosmetic in
nature, such as paint and carpet, so long as Tenant provides Landlord with at
least two (2) business days’ prior written notice of such cosmetic Alterations.
With respect to Alterations for which Landlord’s consent is required, Landlord
may withhold its consent in its sole discretion with respect to any proposed
Alteration which would create a Design Problem. As used in this Lease, a “Design
Problem” means that the proposed Alteration (a) will have an adverse effect on
the structural integrity of the Building; (b) is not in compliance with
Applicable Laws; (c) would have an adverse effect on the Building Systems;
(d) would affect the exterior appearance of the Building; (e) does not comply
with the Construction Rules, Requirements, Specifications, Design Criteria and
Building Standards (as defined in the Tenant Work Letter); (f) would cause
unreasonable interference with the normal and customary office operations of any
other tenant in the Building, or (g) is presented to Landlord with incomplete,
missing or inaccurate information. Landlord’s consent shall not be required for
Alterations which do not create a Design Problem and cost less than $75,000 per
project, so long as Tenant provides Landlord with at least ten (10) business
days’ prior written notice of such desired Alterations (cosmetic Alterations
require only two (2) business day’s prior notice, as set forth above). With
respect to Alterations for which Landlord’s consent is required, Landlord agrees
to provide its consent or a written explanation of its withholding of consent
within ten (10) business days of Landlord’s receipt of Tenant’s notice of
proposed Alterations, together with such other materials as are reasonably
necessary for Landlord’s analysis of the proposed Alterations. Landlord shall
reasonably cooperate with Tenant in Tenant’s obtaining all necessary permits for
Alterations in compliance with this Article 8. The construction of the initial
Tenant Improvements in the Premises shall be governed by the terms of the Tenant
Work Letter and not the terms of this Article 8.

8.2 Manner of Construction. Landlord may impose, as a condition of its consent
to any and all Alterations or repairs of the Premises or about the Premises,
such requirements as Landlord, in its reasonable discretion, may deem desirable,
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requirement (i) that Tenant utilize for such purposes only contractors,
mechanics and materialmen (collectively, “contractors”), materials, space
planners, architects and engineers reasonably approved by Landlord, and/or
(ii) that Tenant shall, at Tenant’s expense, remove any portion of such
Alterations which are not customary office use in nature (such as stairwells or
private restrooms) (“Above Standard Installations”) if required by Landlord upon
the expiration or any early termination of the Lease Term (provided that
Landlord shall notify Tenant of such removal requirement in writing at the time
of Landlord’s consent to such Above Standard Installations). All contractors
working on the Alterations must be union contractors, subject to the following:
service providers, architects, engineers and consultants who do not perform any
physical construction work do not have to be union. General contractors do not
have to be union, with the condition that they do not perform any construction
work in-house and have on-site only a superintendent and a laborer for clean-up.
Furniture installers must belong to the carpenter’s union, and all trades
(subcontractors) must be union; provided, however, that Tenant may use non-union
labor for the following trades: demolition, glazing, flooring and cabling, but
in the case of labor disruption or the threat of a disruption as determined by
Landlord in its sole discretion, Tenant shall immediately cease using such
non-union labor and switch to union-labor. Tenant shall immediately cease using
any contractor that Landlord determines is not suitable for the Project, whether
because of quality of the work or because of any potential or actual adverse
impact of such contractor on the Project or on the labor relations between
Landlord and any trade unions (including picketing or otherwise disrupting
tenants or operations at the Project). Tenant shall construct such Alterations
and perform such repairs in conformance with any and all applicable federal,
state, county or municipal laws, rules and regulations and pursuant to a valid
building permit, issued by the City of Santa Monica, all in conformance with
Landlord’s Construction Rules and Regulations provided to Tenant by Landlord.
All work with respect to any Alterations must be done in a good and workmanlike
manner and diligently prosecuted to completion to the end that the Premises
shall at all times be a complete unit except during the period of work. In
performing any such Alterations, Tenant shall have the work performed in such
manner so as not to obstruct access to the Project or any portion thereof, by
any other tenant of the Project, and so as not to obstruct the business of
Landlord or other tenants in the Project, or interfere with the labor force
working in the Project. In addition to Tenant’s obligations under Article 9,
upon completion of any Alterations, Tenant agrees to cause a Notice of
Completion to be recorded in the office of the Recorder of the County of Los
Angeles in accordance with Section 3093 of the Civil Code of the State of
California or any successor statute, and Tenant shall deliver to the Project
management office a reproducible copy of the “as built” drawings of the
Alterations as to any Alterations for which Landlord’s consent was required.

8.3 Payment for Improvements. In the event Tenant orders any Alterations or
repair work directly from Landlord, the charges for such work shall be deemed
Additional Rent under this Lease, payable within thirty (30) days of billing
therefor, either periodically during construction or upon the substantial
completion of such work, at Landlord’s option. Upon completion of such work,
Tenant shall deliver to Landlord evidence of payment, contractors’ affidavits
and full and final waivers of all liens for labor, services or materials. Tenant
shall pay to Landlord an agreed-upon percentage of the cost of such work
sufficient to compensate Landlord for all overhead, general conditions, fees and
other costs and expenses arising from Landlord’s involvement with such work,
which amount payable to Landlord shall not exceed Ten Thousand Dollars
($10,000).

8.4 Construction Insurance. In the event that Tenant makes any Alterations,
Tenant agrees that either it or its general contractor will carry “Builder’s All
Risk” insurance in an amount approved by Landlord covering the construction of
such Alterations, and such other insurance as Landlord may require, it being
understood and agreed that all of such Alterations shall be insured by Tenant
pursuant to Article 10 immediately upon completion thereof.

8.5 Landlord’s Property. All Alterations, improvements, fixtures and/or
equipment which may be installed or placed in or about the Premises, and all
signs installed in, on or about the Premises, from time to time, shall be at the
sole cost of Tenant and shall be and become the property of Landlord, except
that Tenant may remove any Alterations, improvements, fixtures and/or equipment
which Tenant can substantiate to Landlord have not been paid for with any Tenant
improvement allowance funds provided to Tenant by Landlord, provided Tenant
repairs any damage to the Premises and Building caused by such removal.
Furthermore, if Landlord, as a condition to Landlord’s consent to any Above
Standard Installations, required that Tenant remove any such Above Standard
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Lease Term (provided that Landlord notified Tenant of such removal requirement
at the time of Landlord’s consent), Landlord may require Tenant, at Tenant’s
expense, to remove such Above Standard Installations and to repair any damage to
the Premises and Building caused by such removal. If Tenant fails to complete
such removal and/or to repair any damage caused by the removal of such Above
Standard Installations, Landlord may do so and may charge the cost thereof to
Tenant. The removal and restoration requirements with respect to the
supplemental air conditioning units and Additional HVAC Equipment are set forth
in Section 6.2 above.

8.6 Tenant’s Property. Tenant’s trade fixtures, furniture, equipment and other
personal property in the Premises (“Tenant’s Property”) shall at all times be
and remain Tenant’s property. Notwithstanding anything to the contrary in this
Lease, Tenant may from time to time remove Tenant’s Property from the Premises,
provided that Tenant repairs all damage caused by such removal, and Landlord
shall have no lien or other interest in any item of Tenant’s Property.

ARTICLE 9

COVENANT AGAINST LIENS

Tenant has no authority or power to cause or permit any lien or encumbrance of
any kind whatsoever, whether created by act of Tenant, operation of law or
otherwise, to attach to or be placed upon the Project or Premises, and any and
all liens and encumbrances created by Tenant shall attach to Tenant’s interest
only. Landlord shall have the right at all times to post and keep posted on the
Premises any notice which it deems necessary for protection from such liens.
Tenant covenants and agrees not to suffer or permit any lien of mechanics or
material men or others to be placed against the Project, the Building or the
Premises, or any portion thereof, with respect to work or services claimed to
have been performed for or materials claimed to have been furnished to Tenant or
the Premises, and, in case of any such lien attaching or notice of any lien,
Tenant covenants and agrees to cause it to be immediately released and removed
of record. Notwithstanding anything to the contrary set forth in this Lease, in
the event that such lien is not released and removed on or before the date
occurring ten (10) days after notice of such lien is delivered by Landlord to
Tenant, Landlord, at its sole option, may immediately take all action necessary
to release and remove such lien, without any duty to investigate the validity
thereof, and all sums, costs and expenses, including reasonable attorneys’ fees
and costs, incurred by Landlord in connection with such lien shall be deemed
Additional Rent under this Lease and shall immediately be due and payable by
Tenant.

ARTICLE 10

INSURANCE

10.1 Indemnification and Waiver.

10.1.1 To the extent not prohibited by law, and except as expressly set forth
otherwise, Landlord, its members and their respective partners, subpartners,
officers, agents, servants and employees (collectively, “Landlord Parties”)
shall not be liable for, any damage either to person or property or resulting
from the loss of use thereof, which damage is sustained by Tenant. Tenant shall
indemnify, defend, protect, and hold harmless the Landlord Parties from any and
all loss, cost, damage, expense and liability (including without limitation
court costs and reasonable attorneys’ fees) incurred in connection with or
arising from Tenant’s use or alteration of the Premises or the conduct of its
business therefrom or from any activity performed in or about the Premises, the
Building or any part of the Project by Tenant or its agents, invitees or
licensees, provided that the terms of the foregoing indemnity shall not apply to
the negligence or willful misconduct of any Landlord Party or the breach by
Landlord of its obligations under this Lease, and Landlord shall indemnify and
hold Tenant and Tenant Parties harmless from any loss, cost, damage, expense and
liability (including without limitation court costs and reasonable attorneys’
fees) arising from such negligence or willful misconduct or breach.
Notwithstanding anything to the contrary contained in this Lease, nothing in
this Lease shall impose any obligations on Tenant or Landlord to be responsible
or liable for, and each hereby releases the other from all liability for,
consequential damages, other than those consequential damages incurred by
Landlord in connection with a holdover of the Premises by Tenant after the
expiration or earlier termination of this Lease, provided that Landlord has
provided Tenant with written notice stating that Landlord is negotiating or has
executed a new lease for the Premises and/or that a new tenant for the Premises
requires access to or is prepared to move into the Premises. Landlord agrees to
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Landlord pursuant to the foregoing and Tenant shall have the right, but not the
obligation, to defend Landlord against any such liabilities with counsel
reasonably satisfactory to Landlord. Notwithstanding anything in this Lease to
the contrary, (i) Landlord shall not be released or indemnified from any breach
of Landlord’s representations or obligations under this Lease or the Tenant Work
Letter and (ii) Landlord shall not be released or indemnified from any losses,
damages, liabilities, claims, attorneys’ fees, costs and expenses arising from
the negligence or willful misconduct of Landlord or its agents, contractors,
licensees or invitees, or Landlord’s violation of any law, order or regulation.
The provisions of this Section 10.1 shall survive the expiration or sooner
termination of this Lease with respect to any claims or liability occurring
prior to such expiration or termination.

10.1.2 Notwithstanding anything to the contrary set forth in this Lease, because
Tenant compensates Landlord for insurance obtained by Landlord as part of
Tenant’s Share of Operating Expenses, and because of the existence of the
waivers of subrogation set forth in Section 10.5, Tenant shall be relieved of
its indemnity obligation only with respect to any liabilities for Landlord’s
property damage, even if such damage results from the negligent acts, omissions,
or willful misconduct of Tenant or those of its agents, contractors, servants,
employees or licensees, to the extent such liabilities are due to a risk covered
by insurance of the type required to be carried by Landlord and paid for in part
by Tenant as part of Operating Expenses. Similarly, since Tenant is required to
carry insurance pursuant to Section 10.3 to cover its personal property within
the Premises, Landlord shall be relieved of its indemnity obligation with
respect to any liabilities arising in connection with any of Tenant’s personal
property within the Premises, to the extent such liabilities are due to a risk
covered by insurance of the type required to be carried by Tenant pursuant to
Section 10.3, even if resulting from the negligent acts, omissions or willful
misconduct of Landlord or those of its agents, contractors, servants, employees
or licensees. The parties’ agreement to indemnify and hold each other harmless
pursuant to this Article 10 is not intended to and shall not relieve any
insurance carrier of its obligations under policies carried by Landlord of
Tenant, respectively, to the extent that such policies cover the result of such
acts, omissions or willful misconduct. If either party fails to carry insurance
required to be carried by it pursuant to this Lease, such failure shall
automatically be deemed to be a covenant and agreement by Landlord or Tenant,
respectively, to self-insure to the full extent of such required coverage, with
full waiver of subrogation.

10.2 Tenant’s Compliance with Fire and Casualty Insurance. Tenant shall, at
Tenant’s expense, comply with all insurance company requirements pertaining to
the use of the Premises. If Tenant’s conduct or use of the Premises for other
than general office uses consistent with a first class office building causes
any increase in the premium for such insurance policies then Tenant shall
reimburse Landlord for any such increase. Subject to Article 24, Tenant, at
Tenant’s expense, shall comply with all rules, orders, regulations or
requirements of the American Insurance Association (formerly the National Board
of Fire Underwriters) and with any similar body.

10.3 Tenant’s Insurance. Tenant shall, at its own cost, procure and maintain in
effect the following coverages in the following amounts at all times during the
Lease Term (and prior to the Lease Commencement Date with respect to any use or
activity of Tenant hereunder at the Project).

10.3.1 Commercial General Liability Insurance covering the insured against
claims of bodily injury, personal injury and property damage arising out of
Tenant’s operations, assumed liabilities or use of the Premises, including a
Broad Form endorsement covering the insuring provisions of this Lease and the
performance by Tenant of the indemnity agreements set forth in Section 10.1, for
limits of liability not less than:

 

Bodily Injury and

Property Damage Liability

   $3,000,000 each occurrence    $3,000,000 annual aggregate

Personal Injury Liability

   $3,000,000 each occurrence    $3,000,000 annual aggregate    0% Insured’s
participation

10.3.2 Physical Damage Insurance covering (i) all office furniture, trade
fixtures, office equipment, merchandise and all other items of Tenant’s property
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by, for, or at the expense of Tenant, (ii) the Tenant Improvements and any other
improvements which exist in the Premises as of the Lease Commencement Date
(excluding the Building Systems and the “Base Building,” as that term is defined
herein below), and (iii) all other improvements, alterations and additions to
the Premises made by or on behalf of Tenant. The term “Base Building,” for
purposes of this Lease, shall mean the structural portions of the Building, and
the public restrooms and the Building Systems and equipment located in the
internal core of the Building on the floor or floors on which the Premises are
located. Such insurance shall be provide physical loss or damage protection
against any peril included within the classification “all risk coverage” or
“causes of loss – special form”, for the full replacement cost value new without
deduction for depreciation of the covered items and in amounts that meet any
co-insurance clauses of the policies of insurance and shall include a vandalism
and malicious mischief endorsement, sprinkler leakage coverage and earthquake
sprinkler leakage coverage. Such insurance shall provide equivalent or greater
coverage than that provided by ISO Form CP 10 30. The proceeds of such insurance
(other than for trade fixtures, merchandise and other personal property of
Tenant), so long as this Lease is in effect, shall be used for the repair or
replacement of the Tenant Improvements and Alterations so insured to the extent
necessary to put the Premises in a usable condition generally consistent with
the quality of such improvements prior to the loss or casualty giving rise to
the repair or replacement. Upon a casualty giving rise to the termination of
this Lease, the proceeds of insurance shall be paid to Landlord and Tenant, as
their interests appear in the insured property. The full replacement value of
the items to be insured under this Section 10.3.2 shall be determined by Tenant
and acknowledged by the company issuing the insurance policy by the issuance of
an agreed amount endorsement to the policy at the time the policy is initially
obtained, and shall be increased from time to time in order to maintain the
replacement value coverage.

10.3.3 Workers’ Compensation Insurance in form and with limits in accordance
with the laws of the State of California, including Occupational Disease
Insurance, and Voluntary Compensation Insurance, and Employer’s Liability
Insurance with limits not less than One Million Dollars ($1,000,000) per
occurrence; per employee for disease; and in the aggregate for disease.

10.3.4 Loss of income or business interruption insurance in such amounts as will
reimburse Tenant for direct and indirect loss of earnings attributable to all
perils commonly insured against by prudent tenants or attributable to prevention
of access to the Premises or to the Building as a result of such perils.

10.4 Form of Policies. The minimum limits of policies of insurance required of
Tenant under this Lease shall in no event limit the liability of Tenant under
this Lease. Such insurance shall (i) provide that Landlord and CBRE (and any
future lender or lenders designated by Landlord to Tenant) are each an
additional insured as to the insurance described in Section 10.3.1 above;
(ii) be written on an “occurrence” basis and have a deductible which does not
exceed the deductible amount(s) maintained by similarly situated tenants in
other Comparable Buildings; (iii) be issued by an insurance company having a
rating of not less than A-VIII in Best’s Insurance Guide or which is otherwise
acceptable to Landlord and licensed to do business in the State of California;
(iv) be primary insurance as to all claims thereunder and provide that any
insurance carried by Landlord is excess and is non-contributing with any
insurance requirement of Tenant; (v) provide that said insurance shall not be
canceled or coverage materially adversely changed unless thirty (30) days’ prior
written notice shall have been given to Landlord and any mortgagee of Landlord;
and (vi) contain a cross-liability endorsement or severability of interest
clause acceptable to Landlord. Tenant shall deliver said policy or policies or
certificates thereof to Landlord concurrently with Tenant’s execution of this
Lease with respect to the New Space (and, with respect to the Subleased Space,
promptly upon the termination or earlier expiration of the Subleases) and at
least thirty (30) days before the expiration dates thereof. Each certificate of
insurance shall name Landlord as the certificate holder. Tenant shall either
provide Landlord with a blanket additional insured endorsement which evidences
the fact that each of the parties named above is covered as an additional
insured on the Commercial General Liability Insurance policy required under
Section 10.3.1 or originals of the endorsements to the Commercial General
Liability Insurance policy providing equivalent or greater coverage than that
provided by ISO Form CG 20 10 11 85 (form B), which include the following exact
wording:

It is agreed that Water Garden Realty Holding LLC and CBRE, and their respective
members, managers, partners, officers, directors, affiliates, agents, employees,
successors

 

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and assigns are additional insureds. The coverage under this policy is primary
insurance with respect to liability arising out of the ownership, maintenance or
use of the premises leased to [Tenant].

Such endorsements must be separate from certificates of insurance. Unless Tenant
provides Landlord with a blanket additional insured endorsement which evidences
the fact that each of the parties listed above is covered as an additional
insured on the CGL policy required above, it is not acceptable to have the
above-referenced language typed or written on the certificates of insurance in
lieu of providing Landlord with the required endorsements. Each certificate of
insurance and endorsement required hereunder must have an original signature.
Rubber stamped signatures will not be accepted. Should Tenant at any time fail
to provide the insurance required by this Lease, or should such insurance be
cancelled, Landlord shall have the right (after giving Tenant five (5) days
notice, with opportunity to cure such failure or cancellation), but not the
duty, to procure the same and Tenant shall pay the cost thereof as Additional
Rent within ten days after Landlord’s demand.

10.5 Waiver of Subrogation. Landlord and Tenant agree to have their respective
insurance companies issuing property damage insurance waive any rights of
subrogation that such companies may have against Landlord or Tenant, as the case
may be. If required, Landlord and Tenant shall provide their respective
insurance companies with notice of such waiver and pay any additional premium to
the extent necessary for such waiver to be valid. Notwithstanding anything to
the contrary set forth in this Lease, Landlord and Tenant hereby waive any right
that either may have against the other on account of any direct or consequential
loss or damage to their respective property to the extent such loss or damage is
due to a risk insured under policies of insurance for fire and “all risk”
coverage or “causes of loss – special form” coverage, theft, or other similar
insurance maintained or required to be maintained by the waiving party, whether
or not such damage or loss is attributable to the negligence of either party or
their agents, invitees, contractors or employees. All of Landlord’s and Tenant’s
repair and indemnity obligations under this Lease shall be subject to the waiver
contained in this paragraph.

10.6 Additional Insurance Obligations. Upon at least 30 days prior written
notice from Landlord, which notice may not be given more than once in any
twenty-four (24) month period during the Lease Term, Tenant shall carry and
maintain during the balance of the Lease Term, at Tenant’s sole cost and
expense, increased amounts of the insurance required to be carried by Tenant
pursuant to this Article 10, and such other reasonable types of insurance
coverage and in such reasonable amounts covering the Premises and Tenant’s
operations therein, as may be reasonably requested by Landlord, but in no event
in excess of the amounts and types of insurance then being required to be
maintained by companies in a similar type of industry as Tenant, by owners and
managers of the Comparable Buildings.

10.7 Landlord’s Insurance. Throughout the Lease Term, Landlord shall procure and
maintain in force (subject to reimbursement for the cost thereof as an Operating
Expense in accordance with Article 4) (a) physical damage insurance of the type
commonly referred to as an “all risk of physical loss” or “causes of loss –
special form” policy, including fire and extended coverage, vandalism and
malicious mischief, sprinkler leakage and water damage covering the Building
(including, without limitation, all Building Systems), and (b) commercial
general liability insurance insuring the Project against such risks and hazards
as are customarily insured against in coverage and in relative amount, in
Landlord’s reasonable judgment, by others similarly situated and operating
Comparable Buildings, but in no event less than Three Million Dollars
($3,000,000) per occurrence and general aggregate, combined single limit, for
injuries to non-employees and property damage.

ARTICLE 11

DAMAGE AND DESTRUCTION

11.1 Repair of Damage by Landlord. Tenant shall promptly notify Landlord of any
damage to the Premises resulting from fire or any other casualty. If the
Premises, Base Building or any Common Areas serving or providing access to the
Premises shall be damaged by fire or other casualty, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord’s reasonable control, and subject to all other terms of
this Article 11, restore the Premises, Base Building and such Common Areas,
provided that Tenant has assigned to and diligently transfers to Landlord all
insurance proceeds relating to the insurance required under Section 10.3.2
(other than for Tenant’s Property) and has paid to

 

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Landlord all deductibles applicable under such policies, except that if such
amount is greater than $500,000, Tenant may deposit such amount into escrow with
a title company or other institutional escrow holder acceptable to Landlord with
irrevocable instructions that such amount be paid to Landlord for repair costs
on a pro rata basis as repairs progress. Subject to the foregoing
qualifications, such restoration shall be to substantially the same condition of
the Premises, Base Building and the Common Areas prior to the casualty, except
for modifications required by zoning and building codes and other laws or by the
holder of a mortgage on the Building or Project or, provided such modifications
do no not unreasonably interfere with Tenant’s use of or access to the Premises
or parking rights or materially increase the obligations or decrease the rights
of Tenant under this Lease or reduce the quality of the Building or Project, any
other modifications to the Base Building or the Common Areas reasonably deemed
desirable by Landlord. Tenant may, at Tenant’s sole cost and expense, repair any
injury or damage to Tenant’s Property, in accordance with Article 8 above.
Landlord shall not be liable for any inconvenience or annoyance to Tenant or its
visitors, or injury to Tenant’s business resulting in any way from such damage
or the repair of the Premises, Base Building or the Common Areas; provided,
however, that if Tenant has assigned and transferred to Landlord the insurance
proceeds and paid the deductible(s) referenced in the second sentence of this
Section 11.1, and if such fire or other casualty shall have damaged the
Premises, Base Building or Common Areas necessary to Tenant’s occupancy of the
Premises, Landlord shall allow Tenant a proportionate abatement of Rent during
the time and to the extent the Premises are unfit for occupancy for the purposes
permitted under this Lease as the sole result of the damage to the Premises,
Base Building or the Common Areas, and not occupied by Tenant as a result
thereof.

11.2 Landlord’s Option to Repair. Landlord shall give Tenant written notice (the
“Repair Notice”) stating the estimated length of time that will be required to
repair casualty damage as soon as reasonably possible after such damage, but in
no event later than thirty (30) days following the date Landlord first has
knowledge of the damage. Notwithstanding the terms of Section 11.1, if the
Building or a Material Project Portion (as hereinafter defined) suffers major
and material damage, Landlord may elect not to rebuild and/or restore the
Premises, Building and/or Material Project Portion; and instead terminate this
Lease by notifying Tenant in writing of such termination within sixty (60) days
after the date Landlord first has knowledge of the damage, such notice to
include a termination date giving Tenant ninety (90) days to vacate the
Premises, but Landlord may so elect only if the Building or a Material Project
Portion is majorly, materially damaged by fire or other casualty or cause,
whether or not the Premises are affected, and one or more of the following
conditions is present: (i) repairs to be made by Landlord cannot reasonably be
completed within two hundred ten (210) days after the date Landlord first has
knowledge of the damage (when such repairs are made without the payment of
overtime or other premiums); or (ii) the damage which is required to be repaired
by Landlord is not fully covered, except for deductible amounts, by Landlord’s
insurance policies (provided such shortfall of insurance proceeds is at least
Two Million Dollars ($2,000,000); provided, however, that if Landlord does not
elect to terminate this Lease pursuant to Landlord’s termination right as
provided above, and the repairs cannot, in the reasonable opinion of Landlord,
be completed within two hundred ten (210) days after the date Landlord first has
knowledge of the damage (which such repairs are made without the payment of
overtime or other premium), Tenant may elect, no earlier than sixty (60) days
after the date Landlord first has knowledge of the damage and not later than
ninety (90) days after the date Landlord first has knowledge of the damage, to
terminate this Lease by written notice to Landlord effective as of the date
specified in the notice, which date shall not be less than thirty (30) days nor
more than sixty (60) days after the date such notice is given by Tenant.
Furthermore, if neither Landlord nor Tenant has terminated this Lease, and the
repairs are not actually completed within such 210-day period, Tenant shall have
the right to terminate this Lease during the first five (5) business days of
each calendar month following the end of such period until such time as the
repairs are complete, by notice to Landlord (the “Damage Termination Notice”),
effective as of a date set forth in the Damage Termination Notice (the “Damage
Termination Date”), which Damage Termination Date shall not be less than ten
(10) business days following the end of each such month. Notwithstanding the
foregoing, if Tenant delivers a Damage Termination Notice to Landlord, then
Landlord shall have the right to suspend the occurrence of the Damage
Termination Date for a period ending thirty (30) days after the

 

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Damage Termination Date set forth in the Damage Termination Notice by delivering
to Tenant, within five (5) business days of Landlord’s receipt of the Damage
Termination Notice, a certificate of Landlord’s contractor responsible for the
repair of the damage certifying that it is such contractor’s good faith judgment
that the repairs shall be substantially completed within thirty (30) days after
the Damage Termination Date. If repairs shall be substantially completed prior
to the expiration of such thirty-day period, then the Damage Termination Notice
shall be of no force or effect, but if the repairs shall not be substantially
completed within such thirty-day period, then this Lease shall terminate upon
the expiration of such thirty-day period. At any time, from time to time, after
the date occurring sixty (60) days after the date of the damage, Tenant may
request that Landlord inform Tenant of Landlord’s reasonable opinion of the date
of completion of the repairs and Landlord shall respond to such request within
five (5) business days. Landlord shall not terminate this Lease pursuant to this
Article 11 in an arbitrary or discriminatory manner. As used herein and in
Article 13, “Material Project Portion” means the Project parking facility or
portions of the Common Areas which are substantially significant and necessary
for Building operation.

11.3 Waiver of Statutory Provisions. The provisions of this Lease, including
this Article 11, constitute an express agreement between Landlord and Tenant
with respect to any and all damage to, or destruction of, all or any part of the
Premises, the Building or the Project, and any statute or regulation of the
State of California, including, without limitation, Sections 1932(2) and 1933(4)
of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building or the Project.

11.4 Damage Near End of Term

11.4.1 If, during the last year of the Lease Term (as the same may have been
extended), the Premises, access thereto within the Project or Building Systems
serving the Premises suffer damage so that the Premises are rendered
untenantable and the repair of the Premises cannot, in the reasonable opinion of
Landlord, be completed within fifty percent (50%) of the remaining portion of
the Lease Term at the time Landlord first has knowledge of the damage, Tenant
shall have the option to terminate this Lease (“Tenant’s Third Termination
Option”). If Landlord determines that all or a portion of the Premises cannot be
repaired within such period, Tenant shall have thirty (30) days from Tenant’s
receipt of the Repair Notice to exercise Tenant’s Third Termination Option by
written notice to Landlord. If Tenant exercises Tenant’s Third Termination
Option, this Lease shall terminate, as of a date not less than thirty (30) days
nor more than sixty (60) days after Tenant’s notice to Landlord of the exercise
of Tenant’s Third Termination Option.

11.4.2 In addition to Landlord’s rights under Section 11.2, if, during the last
year of the Lease Term (as the same may have been extended), the Premises,
access thereto within the Project or Building Systems serving the Premises
suffer damage so that the Premises are rendered untenantable and the repair of
the Premises cannot, in the reasonable opinion of Landlord be completed within
fifty percent (50%) of the remaining portion of the Lease Term at the time of
the damage, Landlord shall have the option, to be exercised by written notice to
Tenant within thirty (30) days after Landlord’s delivery of the Repair Notice,
either (i) to make such repairs within a reasonable time, in which event this
Lease shall continue in full force and effect or (ii) to terminate this Lease as
of a date not less than thirty (30) days nor more than sixty (60) days after
Landlord’s notice to Tenant to terminate this Lease.

ARTICLE 12

NONWAIVER

No waiver of any provision of this Lease shall be implied by any failure of
Landlord or Tenant to enforce any remedy on account of the violation of such
provision, even if such violation shall continue or be repeated subsequently,
and any waiver by Landlord or Tenant, as the case may be, of any provision of
this Lease may only be in writing. Additionally, no express waiver shall affect
any provision other than the one specified in such waiver and then only for the
time and in the manner specifically stated. No receipt of monies by Landlord
from Tenant after the termination of this Lease shall in any way alter the
length of the Lease Term or of Tenant’s right of possession hereunder, or after
the giving of any notice shall reinstate, continue or extend the Lease Term or
affect any notice given Tenant prior to the receipt of such monies, it being
agreed that after the service of notice or the commencement of a suit, or after
final judgment for possession of the Premises, Landlord may receive and collect
any Rent due, and the payment of said Rent shall not waive or affect said
notice, suit or judgment.

 

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ARTICLE 13

CONDEMNATION

If the whole or any material part of the Premises, Building or Material Project
Portion shall be taken by power of eminent domain or condemned by any competent
authority for any public or quasi-public use or purpose, or if Landlord shall
grant a deed or other instrument in lieu of such taking by eminent domain or
condemnation, Landlord shall have the option to terminate this Lease upon ninety
(90) days’ notice, provided such notice is given no later than one hundred
eighty (180) days after the date of such taking, condemnation, reconfiguration,
vacation, deed or other instrument. If more than twenty-five percent (25%) of
the rentable square feet of the Premises is taken, or if access to the Premises
or Tenant’s parking rights are substantially impaired, Tenant shall have the
option to terminate this Lease upon ninety (90) days’ notice, provided such
notice is given no later than one hundred eighty (180) days after the date of
such taking. Landlord shall be entitled to the entire award or payment in
connection therewith, except that Tenant shall have the right to file any
separate claim available to Tenant for any taking of Tenant’s personal property
and fixtures belonging to Tenant and removable by Tenant upon expiration of the
Lease Term pursuant to the terms of this Lease, and for moving expenses, so long
as such claim is payable separately to Tenant. All Rent shall be apportioned as
of the date of such termination, or the date of such taking, whichever shall
first occur. If any part of the Premises shall be taken, and this Lease shall
not be so terminated, the Rent shall be proportionately abated. Tenant hereby
waives any and all rights it might otherwise have pursuant to Section 1265.130
of The California Code of Civil Procedure. If this Lease is terminated as
provided above, Tenant, in addition to relocation costs, shall be entitled to a
share of Landlord’s award equal to the unamortized cost of the Tenant
Improvements paid for by Tenant in excess of the Tenant Improvement Allowance.

ARTICLE 14

ASSIGNMENT AND SUBLETTING

14.1 Transfers. Tenant shall not, without the prior written consent of Landlord,
assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach
to, or otherwise transfer, this Lease or any interest hereunder, permit any
assignment, or other transfer of this Lease or any interest hereunder by
operation of law, sublet the Premises or any part thereof, or permit the use of
the Premises by any persons other than Tenant and its employees (for purposes
hereof, “employees” shall include independent contractors, consultants, and
partners performing services for Tenant at the Premises without the payment of
rent to Tenant and not occupying the Premises pursuant to a sublease or in
separately demised space) (all of the foregoing are hereinafter sometimes
referred to collectively as “Transfers” and any person to whom any Transfer is
made or sought to be made is hereinafter sometimes referred to as a
“Transferee”), except for Transfers allowed pursuant to Section 14.7. If Tenant
desires Landlord’s consent to any Transfer, Tenant shall notify Landlord in
writing, which notice (the “Transfer Notice”) shall include (i) the proposed
effective date of the Transfer, which shall not be less than ten (10) business
days nor more than two hundred seventy (270) days after the date of delivery of
the Transfer Notice, (ii) a description of the portion of the Premises to be
transferred (the “Subject Space”), (iii) all of the material terms of the
proposed Transfer and the consideration therefor (including calculation of the
“Transfer Premium”, as that term is defined in Section 14.3, in connection with
such Transfer), the name and address of the proposed Transferee, and a copy of
all existing executed and/or proposed documentation pertaining to the proposed
Transfer, including all existing operative documents to be executed to evidence
such Transfer or the agreements incidental or related to such Transfer, and
(iv) current financial statements of the proposed Transferee certified by an
officer, partner or owner thereof, and any other information reasonably required
by Landlord to determine the financial responsibility, character, and reputation
of the proposed Transferee, the nature of such Transferee’s business and
proposed use of the Subject Space, and such other information as Landlord may
reasonably require. Any Transfer made without Landlord’s prior written consent
shall, at Landlord’s option, be null, void and of no effect, and shall, at
Landlord’s option, constitute a default by Tenant under this Lease. Whether or
not Landlord consents to any proposed Transfer, Tenant shall pay Landlord’s
reasonable review and processing fees, as well as any reasonable legal fees
incurred by Landlord, within thirty (30) days after written request by Landlord,
not to exceed in the aggregate $2,500 per consent request.

14.2 Landlord’s Consent. Landlord shall not unreasonably withhold its consent to
any proposed Transfer of the Subject Space to the Transferee on the terms
specified in theTransfer

 

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Notice. Landlord shall approve or disapprove of a proposed Transfer within ten
(10) business days after Landlord’s receipt of the applicable Transfer Notice.
Without limitation as to other reasonable grounds for withholding consent, the
parties hereby agree that it shall be reasonable under this Lease and under any
applicable law for Landlord to withhold consent to any proposed Transfer where
one or more of the following apply:

14.2.1 The Transferee is of a character or reputation or engaged in a business
which is not consistent with the quality of the Building or the Project;

14.2.2 The Transferee is either a governmental agency or instrumentality
thereof, unless Landlord then leases space to a government agency or
instrumentality thereof (other than leases by Landlord to a foreign consulate or
a trade office);

14.2.3 The Transferee is not a party of reasonable financial worth and/or
financial stability in light of the responsibilities involved under the Lease or
sublease, as applicable, on the date consent is requested; provided, however,
(i) for any sublease(s) covering up to an aggregate of 20,000 square feet of the
Premises which are in effect at the same time, Landlord shall not withhold its
consent to such sublease(s) based on the financial credit or financial stability
of the Transferee, and (ii) for any sublease(s) covering more than an aggregate
of 20,000 square feet of the Premises at any one time, Landlord will reasonably
consider the financial worth and/or financial stability of the Transferee in
conjunction with the financial worth of Tenant at the time, provided that
Tenant’s financial strength shall be taken into account in determining whether
there exists sufficient financial strength to support future performance under
this Lease;

14.2.4 The proposed Transfer would cause a violation of another lease for space
in the Project, or would give an occupant of the Project a right to cancel its
lease;

14.2.5 The terms of the proposed Transfer will allow the Transferee to exercise
a right of renewal, right of expansion, or other similar right held by Tenant;
or

14.2.6 Either the proposed Transferee, or any person or entity which directly or
indirectly, controls, is controlled by, or is under common control with, the
proposed Transferee, (i) occupies space in the Adjacent Building or Phase I at
the time of the request for such consent, or (ii) is actively negotiating with
Landlord to lease space in the Adjacent Building or Phase I at such time,
provided in either such case that Landlord or the owner of Phase I then has
available space for lease in the Adjacent Building or Phase I which is suitable
for the needs of such proposed Transferee in terms of size and location. As used
in this Section 14.2.6, “actively negotiating” shall mean that there has been at
least a written lease proposal and a written response thereto (other than an
outright rejection), with at least one of said writings occurring in the three
(3)-month period immediately preceding the Transfer Notice. It is expressly
agreed that this Section 14.2.6 shall be inapplicable to occupants of the
Building (i.e., Landlord will not withhold its consent to a Transfer request
solely on the basis that the proposed Transferee or any person or entity which
directly or indirectly, controls, is controlled by, or is under common control
with, the proposed Transferee, is an occupant of the Building).

If Landlord consents to any Transfer pursuant to the terms of this Section 14.2
(and does not exercise any recapture rights Landlord may have under
Section 14.4), Tenant may within six (6) months after Landlord’s consent, but
not later than the expiration of said six-month period, enter into such Transfer
of the Premises or portion thereof, upon substantially the same terms and
conditions as are set forth in the Transfer Notice furnished by Tenant to
Landlord pursuant to Section 14.1, provided that if there are any material
changes in the terms and conditions from those specified in the Transfer Notice
(i) such that Landlord would initially have been entitled to refuse its consent
to such Transfer under this Section 14.2, or (ii) which would cause the proposed
Transfer to be materially more favorable to the Transferee than the terms set
forth in Tenant’s original Transfer Notice, Tenant shall again submit the
Transfer to Landlord for its approval and other action under this Article 14
(including Landlord’s right of recapture, if any, under Section 14.4).
Notwithstanding anything to the contrary in this Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld or delayed
its consent under this Section 14.2 or otherwise has breached or acted
unreasonably under this Article 14, their sole remedies shall be declaratory
judgment, an injunction for the relief sought or monetary damages (but never
consequential damages), and Tenant hereby waives all other remedies on its

 

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own behalf and, to the extent permitted under all Applicable Laws, on behalf of
the proposed Transferee.

14.3 Transfer Premium. If Landlord consents to a Transfer, as a condition
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any “Transfer Premium” received by Tenant from
such Transferee, except that Tenant may retain one hundred percent (100%) of any
Transfer Premium received in connection with Tenant’s subleasing of up to an
aggregate of fifteen percent (15%) of the rentable square footage of the
Premises. “Transfer Premium” shall mean all rent, additional rent or other
consideration payable by such Transferee in excess of the Rent and Additional
Rent payable by Tenant under this Lease on a per rentable square foot basis if
less than all of the Premises is transferred and after recovery by Tenant of
(a) the actual brokers’ commissions paid by Tenant, not to exceed commissions
for similar transactions; (b) tenant improvement costs incurred by Tenant to
effect such Transfer; (c) other economic concessions (allowances, moving
expenses, etc.); (d) reasonable, actual advertising costs and legal fees;
(e) any other reasonable, customary costs actually paid or incurred in assigning
or subletting the transferred space or in negotiating or effectuating the
assignment or sublease; and (f) reasonable attorneys’ fees; and (g) the Base
Rent and Additional Rent pursuant to Article 4 paid by Tenant to Landlord with
respect to the Transfer Space during the period such space is vacant and not
used for business office operations and prior to the date the assignee or
subtenant commences to pay rent to Tenant for such space, provided no such
“vacancy cost” shall be recognized to the extent attributable to the period
occurring prior to the date Tenant has vacated such Transfer Space and executed
a brokerage listing agreement with an independent third party broker for the
Transfer Space and delivered the Transfer Notice to Landlord. “Transfer Premium”
shall also include, but not be limited to, key money and bonus money paid by
Transferee to Tenant in connection with such Transfer, and any payment in excess
of fair market value for services rendered by Tenant to Transferee or for
assets, fixtures, inventory, equipment, or furniture transferred by Tenant to
Transferee in connection with such Transfer.

14.4 Landlord’s Option as to Subject Space. Notwithstanding anything to the
contrary contained in this Article 14, in the event Tenant contemplates a
Transfer of the entire Premises for the entire remaining Lease Term, Tenant
shall give Landlord notice (the “Intention to Transfer Notice”) of such
contemplated Transfer (whether or not the contemplated Transferee or the terms
of such contemplated Transfer have been determined). The Intention to Transfer
Notice shall specify the contemplated date of commencement of the Contemplated
Transfer (the “Contemplated Effective Date”). Landlord shall have the option, by
giving written notice to Tenant within ten (10) business days after receipt of
any Intention to Transfer Notice, to recapture the Premises. In the event such
option is exercised by Landlord, this Lease shall be canceled and terminated as
of the Contemplated Effective Date. If Landlord declines, or fails to timely
elect to recapture the Premises under this Section 14.4, then, subject to the
other terms of this Article 14, for a period of nine (9) months (the “Nine Month
Period”) commencing on the last day of such ten (10) business day period,
Landlord shall not have any right to recapture the Premises during the Nine
Month Period, provided that any such Transfer shall be subject to the remaining
terms of this Article 14. If such a Transfer is not so consummated within the
Nine Month Period, Tenant shall again be required to submit a new Intention to
Transfer Notice to Landlord with respect any contemplated Transfer of the entire
Premises for the entire remaining Lease Term, as provided above in this
Section 14.4. The Transfer Notice described in Section 14.1 above may, at
Tenant’s election, also constitute the Intention to Transfer Notice, if (i) the
notice so specifies, and (ii) the notice contains all of the information
required for an Intention to Transfer Notice.

14.5 Effect of Transfer. In the event of a Transfer, (i) the terms and
conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) Landlord’s consent to a Transfer shall not be deemed consent to
any further Transfer by either Tenant or a Transferee, (iii) Tenant shall
deliver to Landlord, promptly after execution, an executed copy of all
documentation pertaining to the Transfer in form reasonably acceptable to
Landlord, and (iv) Tenant shall furnish upon Landlord’s request a complete
statement, certified by an independent certified public accountant, or Tenant’s
chief financial officer, setting forth in detail the computation of any Transfer
Premium Tenant has derived and shall derive from such Transfer. No Transfer,
whether with or without Landlord’s consent, shall relieve Tenant or any
guarantor of this Lease from liability under this Lease.

 

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14.6 Additional Transfers. Subject to Section 14.7 below, for purposes of this
Lease, the term “Transfer” shall also include (i) if Tenant is a partnership,
the withdrawal or change, voluntary, involuntary or by operation of law, of
fifty percent (50%) or more of the partners, or transfer of fifty percent
(50%) or more of partnership interests, within a twelve (12)-month period, or
the dissolution of the partnership without immediate reconstitution thereof, and
(ii) if Tenant is a closely held corporation (i.e., whose stock is not publicly
held and not traded through an exchange or over the counter), (A) the
dissolution, merger, consolidation or other reorganization of Tenant or, (B) the
sale or other transfer of more than an aggregate of fifty percent (50%) of the
voting shares of Tenant (other than to immediate family members by reason of
gift or death) within a twelve (12)-month period, or (C) the sale, mortgage,
hypothecation or pledge of more than an aggregate of fifty percent (50%) of the
value of the unencumbered assets of Tenant within a twelve (12)-month period.

14.7 Related Transferees. Notwithstanding anything to the contrary contained in
this Article 14, a Transfer of all or a portion of the Premises to (i) an entity
controlling, controlled by or under common control with Original Tenant, or
(ii) a successor entity (whether by merger, consolidation or otherwise) which
after such transaction directly or indirectly owns all or substantially all of
Original Tenant’s assets or shares (each a “Related Transferee”) shall not
require Landlord’s consent or payment of any amount to Landlord, provided that
(a) Tenant notifies Landlord of any such Transfer prior to such Transfer, unless
Tenant is legally prohibited from such prior disclosure, in which case Tenant
shall provide such notice as soon as possible, but in no event more than three
(3) business days, after such Transfer, (b) Tenant promptly supplies Landlord
with any documents or information reasonably requested by Landlord regarding
such Transfer and the Related Transferee, which Landlord shall maintain in
confidence to the extent such information is not otherwise available to the
public, except for disclosures thereof as required by law, or as necessary to
Landlord’s counsel, accountants, lenders and advisers in connection with the
operation and management of the Project and the analysis of the Transfer,
(c) such Transfer is not a subterfuge by Tenant to avoid its obligations under
this Lease, and (d) the Letter of Credit, or a substitute or replacement Letter
of Credit acceptable to Landlord, remains in full force and effect in compliance
with Article 21 and Tenant is not in Default under this Lease (after notice and
lapse of applicable cure periods). “Control,” as used in this Section 14.7,
shall mean with respect to a corporation, the right to exercise, directly or
indirectly, more than fifty percent (50%) of the voting rights attributable to
the shares of the controlled corporation and, with respect to a person or entity
that is not a corporation, the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of the controlled
person or entity.

ARTICLE 15

SURRENDER OF PREMISES; REMOVAL OF TRADE FIXTURES

15.1 Surrender of Premises. No act or thing done by Landlord or any agent or
employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in a writing signed by Landlord. The delivery of keys
to the Premises to Landlord or any agent or employee of Landlord shall not
constitute a surrender of the Premises or effect a termination of this Lease,
whether or not the keys are thereafter retained by Landlord, and notwithstanding
such delivery Tenant shall be entitled to the return of such keys at any
reasonable time upon request until this Lease shall have been properly
terminated. The voluntary or other surrender of this Lease by Tenant, whether
accepted by Landlord or not, or a mutual termination hereof, shall not work a
merger, and at the option of Landlord shall operate as an assignment to Landlord
of all subleases or subtenancies affecting the Premises.

15.2 Removal of Trade Fixtures; Title to Tenant Improvements. Upon the
expiration of the Lease Term, or upon any earlier termination of this Lease,
Tenant shall, subject to the provisions of this Article 15, quit and surrender
possession of the Premises to Landlord in as good order and condition as when
Tenant took possession and as thereafter improved by Landlord and/or Tenant,
reasonable wear and tear, damage from casualty (subject to Tenant’s insurance
obligations and the provisions of Article 11) and repairs which are specifically
made the responsibility of Landlord hereunder excepted. Upon such expiration or
termination, Tenant shall, unless specified otherwise in writing by Landlord,
without expense to Landlord, remove or cause to be removed from the Premises all
debris and rubbish, and such items of furniture, equipment, free-standing
cabinet work, and other articles of personal property owned by Tenant or
installed or placed by Tenant at its expense in the Premises, and such similar
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other persons claiming under Tenant, as Landlord may, in its sole discretion,
require to be removed, and Tenant shall repair at its own expense all damage to
the Premises and Building resulting from such removal. Tenant shall not be
required to remove any Tenant Improvements or Alterations (except as provided in
Sections 8.2 and 8.5 regarding Above Standard Installations, and except for the
Additional HVAC Equipment and supplemental air conditioning units), and all
Tenant Improvements and Alterations remaining in the Premises on the expiration
or earlier termination of this Lease shall be the property of Landlord and
Landlord shall have the right to use, transfer or demolish the same without any
payment or obligation to Tenant.

ARTICLE 16

HOLDING OVER

If Tenant holds over after the expiration of the Lease Term hereof, with or
without the express or implied consent of Landlord, such tenancy shall be at
sufferance only, and shall not constitute a renewal hereof or an extension for
any further term, and in such case Base Rent shall be payable at a monthly rate
equal to one hundred fifty percent (150%) the Base Rent applicable during the
last rental period under this Lease, prorated based on the actual number of
holdover days. Such month-to-month tenancy shall be subject to every other
applicable term, covenant and agreement contained herein. Nothing contained in
this Article 16 shall be construed as consent by Landlord to any holding over by
Tenant, and Landlord expressly reserves the right to require Tenant to surrender
possession of the Premises to Landlord as provided in this Lease upon the
expiration or other termination of this Lease. The provisions of this Article 16
shall not be deemed to limit or constitute a waiver of any other rights or
remedies of Landlord provided herein or at law. If Tenant fails to surrender the
Premises upon the termination or expiration of this Lease, in addition to any
other liabilities to Landlord accruing therefrom, Tenant shall protect, defend,
indemnify and hold Landlord harmless from all loss, costs (including reasonable
attorneys’ fees) and liability resulting from such failure, including, without
limiting the generality of the foregoing, any claims made by any succeeding
tenant founded upon such failure to surrender (excluding such tenant’s lost
profits) and any lost profits to Landlord resulting therefrom, but only if the
holdover continues beyond thirty (30) days and Landlord has notified Tenant of
the existence of the new lease.

ARTICLE 17

ESTOPPEL CERTIFICATES

Within ten (10) business days following a request in writing by Landlord, Tenant
shall execute and deliver to Landlord an estoppel certificate, which, as
submitted by Landlord, shall be substantially in the form of Exhibit “D”,
attached hereto (or such other form as may be reasonably required by any
prospective mortgagee or purchaser of the Project, or any portion thereof),
indicating therein any exceptions thereto that may exist at that time, and shall
also contain any other information reasonably requested by Landlord or
Landlord’s mortgagee or prospective mortgagee. Tenant shall execute and deliver
whatever other instruments may be reasonably required for such purposes. Failure
of Tenant to timely execute and deliver such estoppel certificate or other
instruments shall constitute an acceptance of the Premises and an acknowledgment
by Tenant that statements included in the estoppel certificate are true and
correct, without exception.

ARTICLE 18

SUBORDINATION

This Lease shall be subject and subordinate to all future ground or underlying
leases of the Building or Project and to the lien of any first mortgage or trust
deed, now or hereafter in force against the Building or Project, if any, and to
all renewals, extensions, modifications, consolidations and replacements
thereof, and to all advances made or hereafter to be made upon the security of
such mortgages or trust deeds, unless the holders of such mortgages or trust
deeds, or the lessors under such ground lease or underlying leases, require in
writing that this Lease be superior thereto. Tenant covenants and agrees in the
event any proceedings are brought for the foreclosure of any such mortgage or
deed in lieu thereof, to attorn, without any deductions or set-offs whatsoever,
to the purchaser or any successors thereto upon any such foreclosure sale or
deed in lieu thereof if so requested to do so by such purchaser, and to
recognize such purchaser as the lessor under this Lease. Tenant shall, within
ten (10) days of request by Landlord, execute such further instruments or
assurances as Landlord may reasonably deem necessary to evidence or confirm the
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ground leases or underlying leases. Tenant waives the provisions of any current
or future statute, rule or law which may give or purport to give Tenant any
right or election to terminate or otherwise adversely affect this Lease and the
obligations hereunder in the event of any foreclosure proceeding or sale. There
is currently no deed of trust encumbering the Project or any portion thereof.
Notwithstanding anything to the contrary in this Article 18, with respect to any
mortgage or deed of trust hereafter executed affecting the Project or any
portion thereof, this Lease shall be subordinated thereto only if the holder of
the mortgage/deed of trust enters into a commercially reasonable subordination,
non-disturbance and attornment agreement with Tenant which subordinates this
Lease and provides for such mortgagee’s recognition of this Lease and for the
agreement by Tenant and such holder to attorn one to the other upon the terms
hereof.

ARTICLE 19

DEFAULTS; REMEDIES

19.1 Defaults. The occurrence of any of the following shall constitute a
“Default” of this Lease by Tenant:

19.1.1 Any failure by Tenant to pay any Rent or any other charge required to be
paid under this Lease, or any part thereof, when due, which failure continues
for five (5) days after written notice thereof to Tenant, which notice shall not
be in lieu of and shall be in addition to the notice required under California
Code of Civil Procedure Section 1161; or

19.1.2 Any failure of Tenant to provide an estoppel certificate within the time
period required by Article 17, which failure continues for more than five
(5) business days after an additional written notice of such violation to
Tenant; or

19.1.3 Any violation of the provisions of Article 5 that continues for more than
forty-eight (48) hours after written notice of such violation to Tenant; or

19.1.4 Any violation of the provisions of Article 8 that continues for more than
forty-eight (48) hours after written notice of such violation to Tenant;
provided, however, if the nature of the violation does not materially
(i) adversely affect Building Systems or the Building structure, (ii) adversely
affect access to or safety of any premises in the Building, or (iii) adversely
affect the quiet enjoyment of any other tenant in the Project, then, if such
default cannot reasonably be cured within such forty-eight (48) hour period,
Landlord shall not be entitled to exercise its remedies under Section 19.2 if
within such forty-eight (48) hour period Tenant shall commence to cure the
Default and thereafter diligently prosecute the same to completion within ten
(10) days, provided that Tenant shall otherwise be liable to Landlord for such
non-performance; or

19.1.5 Any failure by Tenant to observe or perform any other provision, covenant
or condition of this Lease to be observed or performed by Tenant where such
failure continues for thirty (30) days after written notice thereof from
Landlord to Tenant, unless the nature of the Default is such that it cannot be
cured within such thirty (30) day period, in which case Tenant shall not be
deemed to be in Default if Tenant diligently commences such cure within such
period and thereafter diligently proceeds to cure as soon as possible; or

19.1.6 Abandonment of the Premises by Tenant; or

19.1.7 To the extent permitted by law, a general assignment by Tenant or any
guarantor of the Lease for the benefit of creditors, or the filing by or against
Tenant or any guarantor of any proceeding under an insolvency or bankruptcy law,
unless in the case of a proceeding filed against Tenant or any guarantor the
same is dismissed within sixty (60) days, or the appointment of a trustee or
receiver to take possession of all or substantially all of the assets of Tenant
or any guarantor, unless possession is restored to Tenant or such guarantor
within thirty (30) days, or any execution or other judicially authorized seizure
of all or substantially all of Tenant’s assets located upon the Premises or of
Tenant’s interest in this Lease, unless such seizure is discharged within thirty
(30) days; or

19.1.8 The hypothecation or assignment of this Lease or subletting of the
Premises, or attempts at such actions, in violation of Article 14 hereof, unless
such hypothecation or assignment of this Lease or subletting of the Premises is
fully unwound within fifteen (15) days after demand by Landlord; or

 

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19.1.9 Any recovery of rent paid by Tenant, by the debtor or bankruptcy trustee
as a preference payment in the event of the filing by or against Tenant of any
proceeding under bankruptcy law; or

19.1.10 Any failure by Tenant to provide Landlord with a renewed LC (as defined
in Article 21) or a substitute LC in form reasonably acceptable to Landlord at
least thirty (30) days prior to the expiration of the then existing LC;
provided, however, that if Landlord has elected (which election shall be at
Landlord’s sole discretion), as a result of such failure, to draw down the LC
and apply, use and retain the proceeds thereof in accordance with Section 21.3,
Tenant shall not be in Default hereunder unless Landlord demands a renewed or
replacement LC meeting the requirements of Article 21 (in which case Landlord
will return any Excess Security to Tenant upon receipt of the proper LC) and
Tenant fails to do so within five (5) days after Landlord’s demand.

19.2 Remedies Upon Default. Upon the occurrence of any Default by Tenant,
Landlord shall have, in addition to any other remedies available to Landlord at
law or in equity, the option to pursue any one or more of the following
remedies, each and all of which shall be cumulative and nonexclusive, without
any notice or demand whatsoever.

19.2.1 Terminate this Lease, in which event Tenant shall immediately surrender
the Premises to Landlord, and if Tenant fails to do so, Landlord may, without
prejudice to any other remedy which it may have for possession or arrearages in
rent, enter upon and take possession of the Premises and expel or remove Tenant
and any other person who may be occupying the Premises or any part thereof,
without being liable for prosecution or any claim or damages therefor; and
Landlord may recover from Tenant the following:

(i) The worth at the time of award of any unpaid rent which has been earned at
the time of such termination; plus

(ii) The worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided; plus

(iii) The worth at the time of award of the amount by which the unpaid rent for
the balance of the Lease Term after the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; plus

(iv) Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, specifically including but not limited to, to the extent permitted by
Applicable Laws, brokerage commissions and advertising expenses incurred,
expenses of remodeling the Premises or any portion thereof for a new tenant,
whether for the same or a different use, and any special concessions made to
obtain a new tenant; and

(v) At Landlord’s election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable law.

The term “rent” as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others. As used in Paragraphs 19.2.1(i)
and (ii), the “worth at the time of award” shall be computed by allowing
interest at the rate set forth in Article 25, but in no case greater than the
maximum amount of such interest permitted by law. As used in
Paragraph 19.2.1(iii), the “worth at the time of award” shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).

19.2.2 Landlord shall have the remedy described in California Civil Code
Section 1951.4 (lessor may continue lease in effect after lessee’s breach and
abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all Rent as it becomes due.

 

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19.3 Sublessees of Tenant. If Landlord elects to terminate this Lease on account
of any Default by Tenant as set forth in this Article 19, Landlord shall have
the right to terminate any and all subleases, licenses, concessions or other
consensual arrangements for possession entered into by Tenant and affecting the
Premises or may, in Landlord’s sole discretion, succeed to Tenant’s interest in
such subleases, licenses, concessions or arrangements. In the event of
Landlord’s election to succeed to Tenant’s interest in any such subleases,
licenses, concessions or arrangements, Tenant shall, as of the date of notice by
Landlord of such election, have no further right to or interest in the rent or
other consideration receivable thereunder.

19.4 Defaults by Landlord. Landlord shall be in default in the performance of
any obligation required to be performed by Landlord under this Lease if Landlord
has failed to perform such obligation within thirty (30) days after the receipt
of notice thereof from Tenant (unless Tenant is legally barred from giving
Landlord such notice); provided, however, that if the nature of such default is
such that the same cannot reasonably be cured within such thirty (30) day
period, Landlord shall not be deemed to be in default if Landlord or such lender
shall within such period commence such cure and thereafter diligently prosecute
the same to completion. Upon any such default by Landlord, Tenant may exercise
any of its rights provided at law or in equity, but nothing herein shall be
deemed to give Tenant the contractual right to terminate this Lease (or waive
any right of termination which Tenant may otherwise have, at law or in equity)
or, except to the extent expressly permitted under Section 6.5 of this Lease, to
offset against rent or other sums due pursuant to this Lease.

ARTICLE 20

ATTORNEYS’ FEES

If either party commences litigation against the other for the specific
performance of this Lease, for damages for the breach hereof or otherwise for
enforcement of any remedy hereunder, the parties hereto agree to and hereby do
waive any right to a trial by jury and, in the event of any such commencement of
litigation, the prevailing party shall be entitled to recover from the other
party such costs and reasonable attorneys’ fees as may have been incurred.

ARTICLE 21

SECURITY

21.1 Letter of Credit. On or before the Lease Commencement Date, Tenant shall
deliver to Landlord an unconditional, irrevocable letter of credit (“LC”) in the
original amount of One Million Dollars ($1,000,000) (the “LC Stated Amount”).
The LC shall be issued by a national money center bank reasonably acceptable to
Landlord with an office in Los Angeles County that will accept draws on the LC
(provided that notwithstanding the foregoing, Landlord approves Silicon Valley
Bank as the issuer of the LC), and shall be in the form attached hereto as
Exhibit “G”. Tenant shall pay all expenses, points and/or fees incurred in
obtaining and renewing the LC. The LC shall be effective from the date of
delivery thereof through the date which is one hundred (100) days after the
expiration of the Lease Term (the “LC Expiration Date”). The LC may be
re-issued, renewed or replaced for annual periods, provided that the LC Stated
Amount is not reduced except as expressly provided below. Each reissue, renewal
or replacement LC shall be in the form attached hereto as Exhibit “G”, and shall
be subject to Landlord’s prior written approval. The LC Stated Amount shall be
reduced by One Hundred Forty-Two Thousand Five Hundred Eighty-Seven Dollars
($142,587) on the first (1st) anniversary of the Commencement Date and on each
subsequent anniversary of the Commencement Date (herein, each a “Reduction
Date”), subject to the provisions of Subparagraphs (1) and (2) immediately
below.

(1) Notwithstanding any contrary provision hereof, if a Default has occurred and
is continuing on a Reduction Date, or if a default would exist and be continuing
on a Reduction Date but Landlord is barred by Applicable Law from sending a
notice of default to Tenant with respect thereto, or if Tenant is in default
under this Lease and Tenant has received notice thereof as required by this
Lease, but failed to cure such default within the time period permitted under
this Lease or such lesser time as may remain before a Reduction Date, then the
LC Stated Amount shall not be reduced on such Reduction Date (but, if based upon
a default, shall be reduced upon the curing of such default, subject, however,
to Landlord’s draw on the LC as permitted hereunder in connection with a
default).

 

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(2) As of the date hereof, the publicly reported number of Tenant’s outstanding
shares multiplied by the trading price of Tenant’s shares as reported on the
NASDAQ (referred to herein as “Tenant’s Market Cap”) is over Six Hundred Fifty
Million Dollars ($650,000,000). If, at any time during the Lease Term, Tenant’s
Market Cap falls below Three Hundred Million Dollars ($300,000,000), then there
shall be no reductions of the LC Amount unless and until Tenant’s Market Cap is
restored to Three Hundred Million Dollars ($300,000,000) or more.

21.2 Failure to Reissue, Renew or Replace. If the bank that issues the LC fails
to extend the expiration date thereof through the LC Expiration Date, and/or if
Landlord receives a notice of non-renewal from such bank (as described in the
LC), then Tenant shall provide Landlord with a substitute LC. If Tenant fails to
provide Landlord with a substitute LC in a form reasonably acceptable to
Landlord at least thirty (30) days prior to the expiration of the then existing
LC, Landlord shall be entitled, at Landlord’s sole and absolute discretion, to
(i) draw down the full amount of the LC and apply, use and retain the proceeds
thereof in accordance with Section 21.3, and/or (ii) notify Tenant that Landlord
requires a renewed or replacement LC meeting the requirements of Article 21 (in
which case Landlord will return any Excess Security to Tenant upon receipt of
the proper LC), and if Tenant fails to provide such renewed or replacement LC
within five (5) days Landlord’s demand, Tenant shall be in Default under this
Lease.

21.3 Application of LC and LC Account. Any amount of the LC which is drawn upon
by Landlord, but not used or applied by Landlord shall be held by Landlord in an
account (the “LC Account”) as security for the full and faithful performance of
each of the terms hereof by Tenant, subject to use and application as set forth
below. If a default beyond applicable notice and cure periods shall occur and be
continuing with respect to any provision of this Lease, including, but not
limited to, the provisions relating to the payment of rent, or a default would
exist under the Lease but Landlord is barred by applicable law from sending a
notice of default to Tenant with respect thereto, or in the event the LC is not
renewed or reissued at least thirty (30) days prior to the expiration of the
then existing LC, Landlord may, but shall not be required to, draw upon all or
any part of the LC and/or LC Account or use, retain or apply all or any part of
the proceeds thereof for the payment of any rent or any other sum in default, to
repair damages caused by Tenant, to clean the Premises, or for the payment of
any other amount which Landlord may spend or become obligated to spend by reason
of Tenant’s default or to compensate Landlord for loss or damage which Landlord
may suffer by reason of Tenant’s default, including without limitation any other
loss, liability, expense and damages that may accrue upon Tenant’s default or
the act or omission of Tenant or any officer, employee, agent or invitee of
Tenant, and costs and attorneys’ fees incurred by Landlord to recover possession
of the Premises upon a default by Tenant hereunder. The use, application,
retention or draw of the LC and/or LC Account, or any portion thereof, by
Landlord shall not (i) constitute the cure of any default by Tenant or the
waiver of such default, (ii) prevent Landlord from exercising any other remedies
provided for under this Lease or by law, it being intended that Landlord shall
not first be required to proceed against the LC and/or LC Account, or
(iii) operate as a limitation on the amount of any recovery to which Landlord
may otherwise be entitled. If any portion of the LC and/or LC Account is so
drawn upon, or any part of the proceeds thereof is used or applied, Tenant
shall, within five (5) days after written demand therefor, either increase the
LC by, or provide a new LC in, such amount, or deposit cash with Landlord in an
amount equal to the draw upon the LC and/or the amount of the LC Account that
was used or applied (so that the combined amount of the remaining sums available
to be drawn upon the LC and the LC Account balance equals the LC Stated Amount),
and Tenant’s failure to do so shall be a default under this Lease. The LC
Account may be commingled with other funds of Landlord, shall be held in
Landlord’s name, and Tenant shall not be entitled to any interest or earnings
thereon. Notwithstanding any contrary provision herein, in the event that the
total amount of the LC outstanding plus any amount remaining in the LC Account
exceeds the LC Stated Amount (“Excess Security”), then Landlord shall return the
amount of the Excess Security to Tenant upon Tenant’s request to the extent that
such amount is available in the LC Account. Notwithstanding the foregoing, if
Landlord draws upon the LC for a reason other than Tenant’s failure to timely
renew or replace the LC, Landlord shall only draw upon the LC to the extent
Landlord reasonably, in good faith, believes is required for the purposes set
forth in the second sentence of this Section 21.3. In the event that Landlord
draws upon the LC due to Tenant’s failure to timely renew or replace the LC,
Tenant shall at any time thereafter be entitled to provide Landlord with, and
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replacement LC that satisfies the requirements hereunder, at which time Landlord
shall return the unapplied cash proceeds of the original LC drawn by Landlord.

21.4 Waiver. Tenant hereby waives the provisions of Section 1950.7 of the
California Civil Code, and all similar or successor provisions of law, now or
hereafter in force regarding the purposes for which security deposits may be
used and when security deposits must be returned, and Landlord and Tenant hereby
acknowledge that their entire agreement with respect to the LC and the LC
Account is set forth herein.

21.5 Expiration of LC. Unless a default would exist under this Lease but
Landlord is barred by applicable law from sending a notice of default to Tenant
with respect thereto, within ten (10) days following the LC Expiration Date,
Landlord shall return any LC previously delivered by Tenant and any balance
remaining in the LC Account after use and application in accordance with this
Section 21, to Tenant (or, at Landlord’s option, to the last assignee, if any,
of Tenant’s interest hereunder), and Tenant shall have no further obligation to
provide the LC.

21.6 Landlord’s Transfer. Tenant acknowledges that Landlord has the right to
transfer or mortgage its interest in the Building or Project and in this Lease,
and Tenant agrees that in the event of any such transfer or mortgage, Landlord
shall have the right to transfer or assign the LC and/or the LC Account to the
transferee or mortgagee. Upon such transfer or assignment of the LC and/or LC
Account, Landlord shall be deemed released by Tenant from all liability or
obligation for the return of the LC and LC Account, as applicable, and Tenant
shall look solely to such transferee or mortgagee for the return thereof. If
Landlord transfers or assigns the LC and Tenant fails to cause the bank that
issued the LC to accept such transfer or assignment, such failure shall be a
default hereunder.

21.7 Bank Obligation. Tenant acknowledges and agrees that the LC is a separate
and independent obligation of the issuing bank to Landlord and that Tenant is
not a third party beneficiary of such obligation, and that Landlord’s right to
draw upon the LC for the full amount due and owing thereunder shall not be, in
any way, restricted, impaired, altered or limited by virtue of any provision of
the United States Bankruptcy Code, including without limitation,
Section 502(b)(6) thereof.

ARTICLE 22

INTENTIONALLY DELETED

ARTICLE 23

SIGNS

23.1 General. For any floor that is leased entirely by Tenant, subject to
Landlord’s prior reasonable written approval, and provided all signs are in
keeping with the first class quality and design of the Building and Project,
Tenant, at its sole expense, may install identification signage in the elevator
lobby of such floor, and on or adjacent to the entry doors to the Premises,
provided that such signage shall not be visible from the exterior of the
Building. For any floor leased by Tenant that is a multi-tenant floor, Tenant
shall have the right to have Landlord install identifying signage on or adjacent
to Tenant’s entry doors, which signage shall be provided by Landlord, at
Tenant’s cost, and such signage shall be the same design and format as used by
Landlord for other multi-tenant floors in the Building and shall comply with
Landlord’s Building standard signage program. Any signs, notices, logos,
pictures, names or advertisements which are installed and that have not been
separately approved by Landlord may be removed without notice by Landlord at the
sole expense of Tenant. Tenant may not install any signs on the exterior or roof
of the Project or the Common Areas, nor may Tenant install any signs in its
windows, lighted or otherwise. Any signs, window coverings, or blinds (even if
the same are located behind the Landlord-approved window coverings for the
Building), or other items visible from the exterior of the Premises or Building,
shall be subject to the prior approval of Landlord, in its sole discretion.

23.2 Building Directory. Tenant shall have the right, at Tenant’s cost, to
designate names to be displayed under Tenant’s entry in the Building directory
located in the lobby of the Building at a rate of two (2) names per each one
thousand (1,000) rentable square feet of the Premises.

 

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23.3 Monument Signage.

23.3.1 During the Lease Term, subject to Tenant’s obtaining all necessary
governmental approvals and permits and subject to the provisions of this
Section 23.3, Tenant shall have the right, at its option and at its sole cost
and expense, to install and maintain one (1) identification sign strip
containing its name and/or logo on the existing Building monument sign
(“Monument Sign”) as depicted on Exhibit “K” attached hereto. Tenant’s signage
right on the Monument Sign is non-exclusive

23.3.2 Landlord shall have the right to replace, refurbish, redesign or relocate
the Monument Sign from time to time (in which case each reference herein to the
Monument Sign shall be deemed to refer to such replacement or relocated monument
sign), subject to City approval, so long as Landlord does not materially
adversely change the visibility, size or location of Tenant’s signage provided
by the existing Monument Sign. All aspects of Tenant’s identification signage on
the Monument Sign shall be (a) consistent with Landlord’s Building standard
monument signage program, (b) subject to Landlord’s prior written approval, not
to be unreasonably withheld or delayed, and (c) in compliance with City and all
other applicable governmental rules and regulations. Tenant shall be
responsible, at its sole cost and expense, for the installation, maintenance and
repair of Tenant’s identification sign on the Monument Sign and Landlord shall
be responsible, subject to the provisions of Article 4, for the maintenance and
repair of the Monument Sign itself. Upon the expiration or earlier termination
hereof (as an obligation which shall expressly survive such expiration or
termination), or termination of Tenant’s rights to maintain its signage on the
Monument Sign, Tenant shall, at its sole cost and expense, remove Tenant’s
identification signage thereon and repair any damage resulting therefrom,
restoring such Monument Sign to its original blank condition. Tenant’s rights to
signage on the Monument Sign under this Section 23.3 are personal to Original
Tenant, and such rights shall not be assigned to any other entity or person,
other than a Related Transferee, without Landlord’s consent, which Landlord may
withhold in its sole good faith discretion. Notwithstanding the foregoing,
Tenant shall retain its rights to monument signage under this Section 23.3 only
so long as (i) this Lease has not been terminated, and (ii) Tenant occupies for
the conduct of business at least one (1) full floor of the Building; if Tenant
fails to occupy for the conduct of business at least one (1) full floor of the
Building, then Landlord may require Tenant to remove its signage from the
Monument Sign by giving Tenant at least thirty (30) days notice, and if Tenant
fails to complete such removal within such thirty (30) day period, Landlord may
remove such Monument Sign on behalf of Tenant and Tenant shall reimburse
Landlord for the actual cost thereof within thirty (30) days after Landlord’s
invoice therefor is submitted to Tenant.

ARTICLE 24

COMPLIANCE WITH LAW

Tenant shall not do anything or knowingly permit anything to be done in or about
the Premises which will in any way conflict with any Applicable Laws now in
force or which may hereafter be enacted or promulgated. At its sole cost and
expense, Tenant shall promptly comply with all such governmental measures
applicable to the Premises, other than the making of structural changes to the
Building or changes to the Building Systems. Should any standard or regulation
now or hereafter be imposed on Landlord or Tenant by a state, federal or local
governmental body charged with the establishment, regulation and enforcement of
occupational, health or safety standards for employers, employees, landlords or
tenants, then Tenant agrees, at its sole cost and expense, to comply promptly
with such standards or regulations. The judgment of any court of competent
jurisdiction or the admission of Tenant in any judicial action, regardless of
whether Landlord is a party thereto, that Tenant has violated any of said
governmental measures, shall be conclusive of that fact as between Landlord and
Tenant. Notwithstanding anything to the contrary in this Lease, Landlord, and
not Tenant, shall be responsible for making changes to the Building structure,
Building Systems and the Common Areas of the Building in order to comply with
Applicable Laws and the allocation of the cost of any such changes by Landlord
shall be governed by Article 4, provided that if such changes are required only
as a result of Tenant’s particular use, occupancy, improvement, repair or
alteration of the Premises (as opposed to use and occupancy for normal or
customary office purposes by tenants generally), Landlord shall notify Tenant of
the changes required and the reasonable cost thereof and, if Tenant continues to
require the particular use, occupancy, improvement, repair or alteration which
gives rise to such changes, Landlord shall make such changes at Tenant’s cost.

 

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ARTICLE 25

LATE CHARGES

If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord’s designee within five (5) business days after
said amount is due, then Tenant shall pay to Landlord a late charge equal to
five percent (5%) of the overdue amount plus any attorneys’ fees incurred by
Landlord by reason of Tenant’s failure to pay Rent and/or other charges when due
hereunder (provided that no late charge or interest shall be imposed with
respect to the first occurrence of such a delinquency in any twelve (12)-month
period if Tenant cures such first delinquency within five (5) days of written
notice from Landlord thereof). The late charge shall be deemed Additional Rent
and the right to require it shall be in addition to all of Landlord’s other
rights and remedies hereunder or at law and shall not be construed as liquidated
damages or as limiting Landlord’s remedies in any manner. In addition to the
late charge described above, any Rent or other amounts owing hereunder which are
not paid within five (5) days after the date they are due shall bear interest
from the date when due until paid at a rate per annum equal to the lesser of
(i) ten percent (10%) per annum or (ii) the highest rate permitted by applicable
law.

ARTICLE 26

LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT

26.1 Landlord’s Cure. All covenants and agreements to be kept or performed by
Tenant under this Lease shall be performed by Tenant at Tenant’s sole cost and
expense (unless expressly stated otherwise in this Lease) and without any
reduction of Rent otherwise payable under the terms of this Lease. If Tenant
shall fail to perform any of its obligations under this Lease, within a
reasonable time after such performance is required by the terms of this Lease,
Landlord may, but shall not be obligated to, after reasonable prior notice to
Tenant (except in the case of an emergency), make any such payment or perform
any such act on Tenant’s part without waiving its rights based upon any Default
of Tenant and without releasing Tenant from any obligations hereunder.

26.2 Tenant’s Reimbursement. Except as may be specifically provided to the
contrary in this Lease, Tenant shall pay to Landlord, within fifteen (15) days
after delivery by Landlord to Tenant of statements therefor: (i) sums equal to
expenditures reasonably made and obligations incurred by Landlord in connection
with the remedying by Landlord of Tenant’s defaults pursuant to the provisions
of Section 26.1; (ii) sums equal to all losses, costs, liabilities, damages and
expenses referred to in Article 10; and (iii) sums equal to all expenditures
made and obligations incurred by Landlord in collecting or attempting to collect
the Rent or in enforcing or attempting to enforce any rights of Landlord under
this Lease or pursuant to law, including, without limitation, all legal fees and
other amounts so expended. Tenant’s obligations under this Section 26.2 shall
survive the expiration or sooner termination of the Lease Term.

ARTICLE 27

ENTRY BY LANDLORD

Landlord reserves the right at all reasonable times and upon reasonable notice
to Tenant (which shall be no less than one (1) business day in advance, except
in the case of an emergency) to enter the Premises to (i) inspect them;
(ii) show the Premises to prospective purchasers, mortgagees or (during the last
twelve (12) months of the Lease Term) tenants, or to the ground or underlying
lessors; (iii) post notices of non-responsibility; or (iv) alter, improve or
repair the Premises or the Building if necessary to comply with current building
codes or other Applicable Laws, or for structural alterations, repairs or
improvements to the Building. Notwithstanding anything to the contrary contained
in this Article 27, Landlord may enter the Premises at any time to (A) perform
services required of Landlord; (B) take possession due to any breach of this
Lease in the manner provided herein; and (C) perform any covenants of Tenant
which Tenant fails to perform after any applicable notice and cure period.
Landlord may make any such entries without the abatement of Rent and may take
such reasonable steps as required to accomplish the stated purposes. Subject to
the other provisions of this Lease, Tenant hereby waives any claims for damages
or for any injuries or inconvenience to or interference with Tenant’s business,
lost profits, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned thereby. For each of the above purposes, Landlord shall at
all times have a key with which to unlock all the doors in the Premises,
excluding Tenant’s vaults, safes and special security areas designated in
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Article 27, Landlord shall use commercially reasonable efforts to minimize any
interference with Tenant’s operations in the Premises. In an emergency, Landlord
shall have the right to use any means that Landlord may deem proper to open the
doors in and to the Premises. Any entry into the Premises by Landlord in the
manner hereinbefore described shall not be deemed to be a forcible or unlawful
entry into, or a detainer of, the Premises, or an actual or constructive
eviction of Tenant from any portion of the Premises.

ARTICLE 28

TENANT PARKING

28.1 Tenant’s Parking Privileges. Commencing on the Lease Commencement Date,
Tenant shall have the right, but not the obligation, to rent up to one hundred
eighty-six (186) parking passes (“Tenant’s Maximum Passes”) for parking in the
Project parking facility. From time to time during the Lease Term, on at least
thirty (30) days’ prior written notice to Landlord, but no more frequently than
quarterly, Tenant may increase or decrease the number of parking passes rented
hereunder up to the amount of Tenant’s Maximum Passes. At Tenant’s election, up
to fifteen (15) of the Maximum Passes may pertain to reserved parking spaces,
three (3) of which shall be directly adjacent to the freight elevator on the P1
level of the parking facility, and the remainder of which shall be on the P2
level and/or the P3 level. At least thirty (30) days prior to the Lease
Commencement Date, Tenant shall give Landlord written notice of the exact number
of reserved and unreserved parking passes, within the parameters set forth
above, that Tenant elects to rent as of the Lease Commencement Date. In the
event Tenant requires parking passes in addition to Tenant’s Maximum Passes and
the same are available and not required by Landlord in connection with its
leasing and parking programs for the Project, Landlord shall provide the same to
Tenant on a month-to-month basis for the period such passes are and remain
available, at the rent and on the terms and conditions set forth in this Article
28.

28.2 Parking Rates. The parking passes rented by Tenant hereunder shall be
rented at the rate posted for such parking passes from time to time in the
Project, plus City of Santa Monica Parking Taxes. Notwithstanding the foregoing,
provided Tenant is paying rent for at least one hundred sixty (160) parking
passes pertaining to unreserved parking passes, Tenant shall be entitled to a
discount from the Project’s posted rates with respect to a total of one hundred
(100) of Tenant’s parking passes pertaining to unreserved parking on the P-2 and
P-3 levels of the parking facility (the “Discounted Passes”) as follows (the
“Discount”): a forty percent (40%) discount for months 1 – 12 of the initial
Lease Term; a thirty percent (30%) discount for months 13 – 24 of the initial
Lease Term; and a twenty-five percent (25%) discount for months 25 – 36 of the
initial Lease Term. Tenant’s right to receive the Discount will be determined,
and any such Discount will be applied, on a retroactive basis based on the
number of parking passes actually rented by Tenant for the prior month. For
example, if in the third (3rd) month of the Lease Term Tenant pays rent for one
hundred sixty (160) or more unreserved parking passes, the parking rent for the
Discounted Passes for the fourth (4th) month of the Lease Term shall be
discounted by the then-applicable Discount; however, if in the fourth
(4th) month of the Lease Term Tenant pays rent for only one hundred fifty
(150) unreserved parking passes, then the parking rent for the Discounted Passes
for the fifth (5th) month of the Lease Term shall not be discounted, etc. The
Discount shall not apply to any City of Santa Monica Parking Taxes. Tenant shall
not be entitled to any Discount during any period that Tenant is in Default
under this Lease. After the 36th month of the initial Lease Term, the Discount
shall no longer apply and all passes rented by Tenant shall be rented at the
rate posted for such parking passes from time to time in the Project, plus City
of Santa Monica Parking Taxes. The Project’s posted parking rates and increases
thereto shall be consistent with Comparable Buildings. The prevailing parking
rates (including City of Santa Monica parking taxes) for parking passes are
currently: $175.00 per month for unreserved parking on the P2 or P3 level of the
Project’s subterranean parking facility, $200.00 per month for unreserved
parking on the P1 level, $290.00 per month for reserved parking on the P1 level,
and $240.00 per month for reserved parking on the P2 or P3 level.

28.3 Additional Parking Terms and Conditions. At any time during the Lease Term,
Landlord shall have the right to convert up to 80% of the unreserved parking
passes rented by Tenant (and other tenants on a non-discriminatory basis) to
passes to be used in valet-assisted tandem parking spaces. Landlord shall have
the right at any time and from time to time during the Lease Term to use valet
assisted parking in all or part of the parking areas. Tenant’s continued right
to use the parking passes is conditioned upon Tenant abiding by all reasonable
rules and regulations which are prescribed from time to time for the orderly
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the Project parking facility and upon Tenant’s cooperation in using commercially
reasonable efforts to ensure that Tenant’s employees and visitors also comply
with such reasonable rules and regulations. Landlord specifically reserves the
right to change the size, configuration, design, layout and all other aspects of
the Project parking facility at any time, provided that such changes shall not
materially adversely affect the parking rights of Tenant. Tenant acknowledges
and agrees that Landlord may, without incurring any liability to Tenant and
without any abatement of Rent under this Lease, from time to time, close-off or
restrict access to the Project parking facility for purposes of permitting or
facilitating any such construction, alteration or improvements; provided,
however, that if Tenant is prevented from using any of its parking passes,
parking pass rent for any such passes shall be abated for the period of time
such passes are unusable. Landlord may delegate its responsibilities hereunder
to a parking operator in which case such parking operator shall have all the
rights of control attributed hereby to the Landlord.

28.4 Use of Parking Passes. The parking passes rented by Tenant pursuant to this
Article 28 are provided to Tenant solely for use by Tenant’s own personnel
(including independent contractors, consultants or partners providing services
to Tenant at the Premises, provided that such parties are not paying any fee to
Tenant for the use of such passes) and, on a pro rata basis, for the personnel
of any Related Transferee or any permitted Transferee under Article 14 and such
passes may not be otherwise transferred, assigned, subleased or otherwise
alienated by Tenant without Landlord’s prior approval.

28.5 Tenant’s Clients and Visitors. Subject to reasonable rules and regulations
for the Building parking facility, including, without limitation, temporary
rules and regulations for the purpose of increased security, implemented by
Landlord or Landlord’s parking operator, Tenant’s clients and visitors may park
in the subterranean Building parking facility at any time, twenty-four hours per
day; provided, however, that after 10:00 p.m. each day, the parking attendants
are no longer available and visitors and clients must possess a validation to
exit the parking facility. From time to time after the Lease Commencement Date,
Tenant may purchase parking validation booklets at Landlord’s prevailing
Building rate for validation booklets. Tenant shall surrender any unused
validation booklets (or portions thereof) upon the Lease termination.

ARTICLE 29

MISCELLANEOUS PROVISIONS

29.1 Binding Effect. Subject to all other provisions of this Lease, each of the
provisions of this Lease shall extend to and shall, as the case may require,
bind or inure to the benefit not only of Landlord and of Tenant, but also of
their respective successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary to the provisions of Article 14.

29.2 Modification of Lease. Should any current or prospective mortgagee or
ground lessor for the Building or Project require a modification or
modifications of this Lease, which modification or modifications will not cause
an increased cost or expense to Tenant or in any other way adversely change the
rights and obligations of Tenant hereunder or Tenant’s use of the Premises or
access or parking rights, then and in such event, Tenant agrees that this Lease
may be so modified and agrees to execute whatever documents are reasonably
required therefor and to deliver the same to Landlord within ten (10) days
following a request therefor.

29.3 Transfer of Landlord’s Interest. Tenant acknowledges that Landlord has the
right to transfer all or any portion of its interest in the Project or Building
and in this Lease, and Tenant agrees that in the event of any such transfer,
Landlord shall automatically be released from all liability under this Lease
first arising from and after the date of transfer and Tenant agrees to look
solely to such transferee for the performance of Landlord’s obligations
hereunder after the date of transfer, provided that such transferee has assumed
Landlord’s obligations hereunder. Tenant further acknowledges that Landlord may
assign its interest in this Lease to the holder of any mortgage or deed of trust
as additional security, but agrees that an assignment shall not release Landlord
from its obligations hereunder and Tenant shall continue to look to Landlord for
the performance of its obligations hereunder.

29.4 Prohibition Against Recording. Except as provided in Section 29.2, neither
this Lease, nor any memorandum, affidavit or other writing with respect thereto,
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Tenant or by anyone acting through, under or on behalf of Tenant, and the
recording thereof in violation of this provision shall make this Lease null and
void at Landlord’s election.

29.5 Captions. The captions of Articles and Sections are for convenience only
and shall not be deemed to limit, construe, affect or alter the meaning of such
Articles and Sections.

29.6 Time of Essence. Time is of the essence of this Lease and each of its
provisions.

29.7 Partial Invalidity. If any term, provision or condition contained in this
Lease shall, to any extent, be invalid or unenforceable, the remainder of this
Lease, or the application of such term, provision or condition to persons or
circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.

29.8 No Warranty. In executing and delivering this Lease, Tenant has not relied
on any representations, including, but not limited to, any representation as to
the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto.

29.9 Child Care Facilities. Tenant acknowledges that any child care facilities
located in the Project or in Phase I (the “Child Care Facilities”) which are
available to Tenant and Tenant’s employees are provided by a third party (the
“Child Care Provider”) which is leasing space in the Project or in Phase I, and
not by Landlord or the owner of Phase I. If Tenant or its employees choose to
use the Child Care Facilities, Tenant acknowledges that Tenant and Tenant’s
employees are not relying upon any investigation which Landlord or the owner of
Phase I may have conducted concerning the Child Care Provider or any warranties
or representation with respect thereto, it being the sole responsibility of
Tenant and the individual user of the Child Care Facilities to conduct any and
all investigations of the Child Care Facilities prior to making use thereof.
Accordingly, Landlord and the owner of Phase I shall have no responsibility with
respect to the quality of care provided by the Child Care Facilities, or for any
acts or omissions of the Child Care Provider. Furthermore, Tenant, for Tenant
and for Tenant’s employees, hereby agrees that Landlord and the owner of
Phase I, and their respective members, partners, subpartners, officers, agents,
servants, employees, and independent contractors shall not be liable for, and
are hereby released from any responsibility for any loss, cost, damage, expense
or liability, either to person or property, arising from the use of the Child
Care Facilities by Tenant or Tenant’s employees. Tenant hereby covenants that
Tenant shall inform all of Tenant’s employees of the provisions of this
Section 29.9 prior to such employees’ use of the Child Care Facilities.

29.10 Entire Agreement. It is understood and acknowledged that there are no oral
agreements between the parties hereto affecting this Lease and this Lease
supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease and
any side letter or separate agreement executed by Landlord and Tenant in
connection with this Lease and dated of even date herewith, contain all of the
terms, covenants, conditions, warranties and agreements of the parties relating
in any manner to the rental, use and occupancy of the Premises and shall be
considered to be the only agreements between the parties hereto and their
representatives and agents. None of the terms, covenants, conditions or
provisions of this Lease can be modified, deleted or added to except in writing
signed by the parties hereto.

29.11 Right to Lease. Landlord reserves the absolute right to effect such other
tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
Project. Tenant does not rely on the fact, nor does Landlord represent, that any
specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.

29.12 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God, inability to obtain services, labor, or materials
or reasonable substitutes therefor, governmental actions, civil commotions, acts
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other causes beyond the reasonable control of the party obligated to perform
(but specifically excluding any delay caused by such party’s negligence), except
with respect to the obligations imposed with regard to Rent and other charges to
be paid by Tenant or amounts to be paid by Landlord pursuant to this Lease
(collectively, the “Force Majeure”), notwithstanding anything to the contrary
contained in this Lease, shall excuse the performance of such party for a period
equal to any such prevention, delay or stoppage and, therefore, if this Lease
specifies a time period for performance of an obligation of either party, that
time period shall be extended by the period of any delay in such party’s
performance caused by a Force Majeure; provided, however, the same shall not
delay Tenant’s termination rights or rent abatement rights.

29.13 Notices. All notices, demands, statements, designations, approvals or
other communications (collectively, “Notices”) given or required to be given by
either party to the other hereunder shall be in writing, shall be sent by United
States certified or registered mail, postage prepaid, return receipt requested,
by nationally recognized courier service, or delivered personally (i) to Tenant
at the appropriate address set forth in Section 11 of the Summary, or to such
other place as Tenant may from time to time designate in a Notice to Landlord;
or (ii) to Landlord at the following addresses, or to such other firm or to such
other place as Landlord may from time to time designate in a Notice to Tenant:

J.P. Morgan Investment Management, Inc.

2029 Century Park East, Suite 4150

Los Angeles, California 90067

Attention: Karen Wilbrecht, Executive Director

and

CBRE

1620 26th Street, Suite 1015

Santa Monica, California 90404

Attention: Building Manager

With a copy to:

Gilchrist & Rutter Professional Corporation

1299 Ocean Avenue, Suite 900

Santa Monica, California 90401

Attention: Diane J. Hvolka, Esq.

Any Notice will be deemed given three (3) business days after it is mailed as
provided in this Section 29.13 or upon the date personal delivery is made or
upon the date of delivery by nationally recognized courier service. If Tenant is
notified of the identity and address of the holder of any deed of trust or
ground or underlying lessor, Tenant shall give to such mortgagee or ground or
underlying lessor written notice of any default by Landlord under the terms of
this Lease by registered or certified mail or by delivery by nationally
recognized courier service, and such mortgagee or ground or underlying lessor
shall be given a reasonable opportunity to cure such default (as more fully set
forth in the SNDA) prior to Tenant’s exercising any remedy available to Tenant.

29.14 Joint and Several. If there is more than one Tenant, the obligations
imposed upon Tenant under this Lease shall be joint and several.

29.15 Authority. Concurrently with or prior to Tenant’s execution of this Lease,
Tenant shall provide Landlord with a certified resolution evidencing that Tenant
has full right and authority to execute and deliver this Lease and that each
person signing on behalf of Tenant is authorized to do so.

29.16 Governing Law. This Lease shall be construed and enforced in accordance
with the laws of the State of California.

29.17 Submission of Lease. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or an option for lease,
and it is not effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant.

 

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29.18 Brokers. Landlord and Tenant hereby warrant to each other that they have
had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 10 of the Summary (the “Brokers”), whose commissions shall
be the responsibility of Landlord pursuant to a separate written agreement, and
that they know of no other real estate broker or agent who is entitled to a
commission in connection with this Lease. Each party agrees to indemnify and
defend the other party against and hold the other party harmless from any and
all claims, demands, losses, liabilities, lawsuits, judgments, and costs and
expenses (including without limitation reasonable attorneys’ fees) with respect
to any leasing commission or equivalent compensation alleged to be owing on
account of any dealings with any real estate broker or agent, other than the
Brokers, occurring by, through, or under the indemnifying party.

29.19 Independent Covenants. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord’s expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord (except as otherwise expressly set forth in this
Lease); provided, however, that the foregoing shall in no way impair the right
of Tenant to commence a separate action against Landlord for any violation by
Landlord of the provisions hereof so long as notice is first given to Landlord
and any holder of a mortgage or deed of trust covering the Building or Project
or any portion thereof, whose address has theretofore been given to Tenant, and
an opportunity is granted to Landlord and such holder to correct such violations
as provided above.

29.20 Project or Building Name and Signage. Landlord shall have the right at any
time to change the name of the Project or Building and to install, affix and
maintain any and all signs on the exterior and on the interior of the Project or
Building as Landlord may, in Landlord’s sole discretion, desire. Tenant shall
not use the name of the Project or Building or use pictures or illustrations of
the Project or Building in advertising or other publicity, without the prior
written consent of Landlord.

29.21 Transportation Management. To the extent required by Applicable Law or the
currently existing development agreement for the Project, Tenant shall fully
comply with all present or future programs intended to manage parking,
transportation or traffic in and around the Project or Building, and in
connection therewith, Tenant shall take responsible action for the
transportation planning and management of all employees located at the Premises
by working directly with Landlord, any governmental transportation management
organization or any other transportation-related committees or entities. Such
programs shall apply to the Project and generally to the tenants of the Project
as reasonably appropriate and applicable and on a generally nondiscriminatory
basis, and may include, without limitation: (i) restrictions on the number of
peak-hour vehicle trips generated by Tenant (but only if such restrictions are
required by Applicable Laws); (ii) increased vehicle occupancy (but only to the
extent required by Applicable Law); (iii) implementation of an in-house
ridesharing program and an employee transportation coordinator; (iv) working
with employees and any Project, Building or area-wide ridesharing program
manager; (v) instituting employer-sponsored incentives (financial or in-kind) to
encourage employees to rideshare; and (vi) utilizing flexible work shifts for
employees (but only to the extent required by Applicable Law), provided that
Landlord shall use reasonable efforts to minimize adverse impacts on Tenant’s
parking rights hereunder to the extent reasonably practical.

29.22 No Discrimination. Landlord and Tenant covenant, each by and for itself,
its heirs, executors, administrators and assigns, and all persons claiming under
or through Tenant or Landlord, respectively, and this Lease is made and accepted
upon and subject to the following conditions: that there shall be no
discrimination against or segregation of any person or group of persons, on
account of race, color, creed, sex, religion, marital status, ancestry or
national origin in the leasing, subleasing, transferring, use, or enjoyment of
the Premises, nor shall either party itself, or any person claiming under or
through Tenant or Landlord, as the case may be, establish or permit such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy, of tenants, lessees, sublessees,
subtenants or vendees in the Premises.

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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29.23 Hazardous Material. As used herein, the term “Hazardous Material” means
any hazardous or toxic substance, material or waste which is or becomes
regulated by, or is dealt with in, any local governmental authority, the State
of California or the United States Government, but excluding such substances as
are typically and customarily found in other first class office buildings in
small and lawful quantities for office and janitorial supplies, reprographic
equipment and Building Systems. Tenant acknowledges that Landlord may incur
costs (A) for complying with laws, codes, regulations or ordinances relating to
Hazardous Material (“Environmental Laws”), or (B) otherwise in connection with
Hazardous Material including, without limitation, the following: (i) Hazardous
Material present in soil or ground water; (ii) Hazardous Material that migrates,
flows, percolates, diffuses or in any way moves onto or under the Project;
(iii) Hazardous Material present on or under the Project as a result of any
discharge, dumping or spilling (whether accidental or otherwise) on the Project
by other tenants of the Project or their agents, employees, contractors or
invitees, or by others; and (iv) material which becomes Hazardous Material due
to a change in Environmental Laws. Tenant agrees that the costs incurred by
Landlord with respect to, or in connection with, the Project for complying with
Environmental Laws shall be an Operating Expense, unless the cost of such
compliance, as between Landlord and Tenant, (A) is made the responsibility of
Tenant under this Lease, in which case such cost shall be borne by Tenant, or
(B) is prohibited from being passed through as an Operating Expense pursuant to
Section 4.2.3(q) or otherwise, in which case such cost shall be borne by
Landlord (or directly by other tenants of the Project or third parties, as
applicable) and not as an Operating Expense. To the extent any such cost that
was allocated as an Operating Expense relating to Hazardous Material is
subsequently recovered or reimbursed through insurance, or recovery from
responsible third parties, or other action, Tenant shall be entitled to a
proportionate share of such Operating Expense paid by Tenant to which such
recovery or reimbursement relates.

Landlord represents and warrants to Tenant that to the best of Landlord’s
knowledge, the Project and all improvements therein have been and will be
constructed without the use of asbestos or any other Hazardous Material (as
defined below) known to be hazardous at the time of its installation, and, to
the best of Landlord’s knowledge, no Hazardous Material currently affects the
Project in a materially adverse manner. For purposes of this Section 29.23, the
term “to the best of Landlord’s knowledge” means the present, actual knowledge
of persons directly employed by Landlord or by its property manager.

29.24 Development of the Project.

29.24.1 Subdivision. Tenant acknowledges that the Project has been subdivided.
Landlord reserves the right to further subdivide all or a portion of the
buildings and Common Areas in the Project. Tenant agrees to execute and deliver,
upon demand by Landlord and in the form reasonably requested by Landlord, any
additional documents needed to conform this Lease to the circumstances resulting
from a subdivision and any all maps in connection therewith, so long as the same
do not unreasonably interfere with Tenant’s use of the Premises or parking or
access rights or increase Tenant’s obligations or decrease Tenant’s rights under
this Lease. Notwithstanding anything to the contrary set forth in this Lease,
the separate ownership of any buildings and/or Common Areas of the Project by an
entity other than Landlord shall not affect the calculation of Project Expenses
or Tenant’s payment of Tenant’s Share of Project Expenses.

29.24.2 The Other Improvements. If portions of the Project or property adjacent
to the Project (collectively, the “Other Improvements”) are owned by an entity
other than Landlord, then so long as the Building, Project and Tenant are not
materially adversely affected, and so long as the same do not unreasonably
interfere with Tenant’s use of the Premises or parking or access rights or
increase Tenant’s obligations or decrease Tenant’s rights under this Lease,
Landlord, at its option, may enter into an agreement with the owner or owners of
any of the Other Improvements to provide (i) for reciprocal rights of access,
use and/or enjoyment of the Project and the Other Improvements, (ii) for the
common management, operation, maintenance, improvement and/or repair of all or
any portion of the Project and all or any portion of the Other Improvements,
(iii) for the allocation of a portion of the Project Expenses to the Other
Improvements and the allocation of a portion of the operating expenses and taxes
for the Other Improvements to the Project, (iv) for the use or improvement of
the Other Improvements and/or the Project in connection with the improvement,
construction, and/or excavation of the Other Improvements and/or the Project,
and (v) for any other matter which Landlord deems reasonably necessary. Nothing
contained herein shall be deemed or construed

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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to limit or otherwise affect Landlord’s right to sell all or any portion of the
Project or any other of Landlord’s rights described in this Lease.

29.24.3 Construction of Project and Other Improvements. Tenant acknowledges that
portions of the Project and/or the Other Improvements may be under construction
following Tenant’s occupancy of the Premises, and that such construction may
result in levels of noise, dust, obstruction of access, etc. which are in excess
of that present in a fully constructed project, so long as the same do not
unreasonably interfere with Tenant’s use of the Premises or Tenant’s parking or
access rights.

29.25 ERISA Matters.

29.25.1 Tenant acknowledges that it has been advised that one of the constituent
shareholders, partners and/or members of Landlord is a collective investment
fund (the “Fund”) which holds the assets of one or more employee benefit plans
or retirement arrangements which are subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and/or
Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) (each
a “Plan”), and with respect to which JPMorgan Chase Bank (“JPMCB”) is the
Trustee and that, as a result, Landlord may be prohibited by law from engaging
in certain transactions.

29.25.2 Landlord hereby represents and warrants to Tenant that, as of the date
hereof, the only Plans whose assets are invested in the Fund which, together
with the interests of any other Plans maintained by the same employer or
employee organization, represent a collective interest in the Fund in excess of
ten percent (10%) of the total interests in the Fund (each, a “10% Plan”) are
referenced in Exhibit “F” attached hereto (collectively, the “Existing 10%
Plans”).

29.25.3 Tenant represents and warrants that as of the date hereof, and at all
times while it is Tenant under this Lease, one of the following statements is,
and will continue to be, true; (1) Tenant is not a “party in interest” (as
defined in Section 3(14) of ERISA) or a “disqualified person” (as defined on
Section 4975 of the Code)(each a “Party in Interest”) with respect to the
Existing 10% Plans or, (2) if Tenant is a Party in Interest, that:

(a) neither Tenant nor its “affiliate” (as defined in Section V(c) of
PTCE 84-14, “Affiliate”) has, or during the immediately preceding one (1) year
has, exercised the authority to either: (i) appoint or terminate JPMCB as the
qualified professional asset manager (as defined in Section V(a) of PTCE 84-14,
“QPAM”) of any of the assets of the Existing 10% Plan with respect to which
Tenant or its Affiliate is a Party in Interest; or (ii) negotiate the terms of
the management agreement with JPMCB, including renewals or modifications
thereof, on behalf of the Existing 10% Plan; and

(b) neither Tenant nor any entity controlling or controlled by Tenant owns a
five percent (5%) or more interest (within the meaning of PTCE 84-14, “5%
Interest”) in J.P. Morgan Chase & Co.

29.25.4 In the event that Landlord or the Fund notifies Tenant in writing that a
Plan other than the Existing 10% Plans may become a 10% Plan, Tenant will,
within 10 days of such notification, inform the Fund in writing as to whether it
can make the same representations which it made in Section 29.25.3 with respect
to such prospective 10% Plan. Thereafter, if based on such representations made
by Tenant such Plan becomes a 10% Plan, Tenant represents and warrants that, at
all times during the period Tenant is a tenant under this Lease, one of the
statements set forth in Section 29.25.3 will be true with respect to such 10%
Plan.

29.25.5 In the event that Tenant becomes aware that any statement in
Section 29.25.3 is no longer true with respect to a 10% Plan, Tenant will
immediately notify Landlord, and Tenant will cooperate with Landlord and/or the
Fund in its efforts to take whatever action is necessary under ERISA to rectify
the situation.

29.26 Landlord Exculpation. It is expressly understood and agreed that
notwithstanding anything in this Lease to the contrary, and notwithstanding any
applicable law to the contrary, the liability of Landlord hereunder (including
any successor landlord hereunder) and any

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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recourse by Tenant against Landlord shall be limited solely and exclusively to
the amount of the interest of Landlord in and to the Project, including any
proceeds from the sale or transfer thereof or insurance and condemnation
proceeds in connection therewith. None of the Landlord Parties shall have any
personal liability therefor, and Tenant hereby expressly waives and releases
such personal liability on behalf of itself and all persons claiming by, through
or under Tenant. The limitations of liability contained in this Section 29.26
shall inure to the benefit of Landlord’s and the Landlord Parties’ present and
future partners, beneficiaries, officers, directors, trustees, shareholders,
agents and employees, and their respective partners, heirs, successors and
assigns. Under no circumstances shall any present or future partner or member of
Landlord (if Landlord is a partnership or a limited liability company), or
trustee or beneficiary (if Landlord or any partner of Landlord is a trust), have
any liability for the performance of Landlord’s obligations under this Lease.
Notwithstanding any contrary provision herein, neither Landlord nor the Landlord
Parties shall be liable under any circumstances for injury or damage to, or
interference with, Tenant’s business, including but not limited to, loss of
profits, loss of rents or other revenues, loss of business opportunity, loss of
goodwill or loss of use, in each case, however occurring.

29.27 Covenant of Quiet Enjoyment. Subject to paying all Rent hereunder and
performing each of the other covenants, agreements and conditions of this Lease
required to be performed by Tenant within applicable notice and cure periods,
Tenant shall lawfully and quietly hold, occupy and enjoy the Premises during the
Lease Term without hindrance or molestation of anyone lawfully claiming by,
through or under Landlord, subject, however, to the provisions of this Lease and
to any underlying mortgage (to the extent that this Lease is subordinate or made
subordinate thereto, and subject to the terms of any non-disturbance agreement
regarding this Lease to which Tenant is a party).

29.28 Communications and Computer Lines. Tenant may install, maintain, replace,
remove or use any communications or computer wires and cables serving the
Premises (collectively, the “Lines”), provided that (i) Tenant shall obtain
Landlord’s prior written consent, use an experienced and qualified contractor
approved in writing by Landlord, and comply with all of the other provisions of
Articles 7 and 8, (ii) an acceptable number of spare Lines and space for
additional Lines shall be maintained for existing and future occupants of the
Project, as determined in Landlord’s reasonable opinion, (iii) the Lines
therefor (including riser cables) shall be appropriately insulated to prevent
excessive electromagnetic fields or radiation, shall be surrounded by a
protective conduit reasonably acceptable to Landlord, and shall be identified in
accordance with the “Identification Requirements,” as that term is set forth
hereinbelow, (iv) any new or existing Lines servicing the Premises shall comply
with all applicable governmental laws and regulations, (v) as a condition to
permitting the installation of new Lines, Landlord may require that Tenant
remove existing Lines located in or serving the Premises which were installed by
or on behalf of Tenant and are no longer being utilized by Tenant, and repair
any damage in connection with such removal, (vi) Tenant shall, notwithstanding
anything to the contrary set forth in this Lease, remove all Lines installed by
or on behalf of Tenant, and repair any damage in connection with such removal,
upon the termination or earlier expiration of this Lease (and if Tenant fails to
complete such removal and/or to repair any damage caused by the removal of such
Lines, Landlord may do so and may charge the cost thereof to Tenant), and
(vii) Tenant shall pay all costs in connection therewith. All Lines shall be
clearly marked with adhesive plastic labels (or plastic tags attached to such
Lines with wire) to show Tenant’s name, suite number, telephone number and the
name of the person to contact in the case of an emergency (A) every four
(4) feet outside the Premises (specifically including, but not limited to, the
electrical room risers and other Common Areas), and (B) at the Lines’
termination point(s) (collectively, the “Identification Requirements”). Landlord
reserves the right to require that Tenant remove any Lines located in or serving
the Premises which were installed by or on behalf of Tenant in violation of
these provisions, or which are at any time in violation of any laws or represent
a dangerous or potentially dangerous condition.

29.29 Rooftop License. During the Lease Term, Tenant shall have the right to
install and use one satellite dish antenna of up to twenty-four (24) inches in
diameter (or the diameter of a standard DirectTV dish) on the Building’s roof,
provided that the area of the roof used by Tenant shall not exceed Tenant’s pro
rata share of available rooftop space, and shall be in a location on the roof
reasonably designated by Landlord. If Landlord approves the installation of any
such antenna by Tenant and if Tenant elects to install such antenna, Landlord
and Tenant shall first execute and deliver a Rooftop License Agreement in the
form attached hereto as

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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Exhibit “I”, which shall require that Tenant pay rent for the use of such
rooftop area in the amount of Five Hundred Dollars ($500.00) per month.

29.30 Consents; Good Faith.

29.30.1 Any time this Lease requires a consent or approval of Landlord or
Tenant, unless another standard is expressly set forth in this Lease, such
consent or approval shall not be unreasonably withheld or delayed; provided,
however, that nothing in this Paragraph 29.30.1 shall require Landlord to
consent to (i) any use of the Premises for purposes other than those permitted
in Article 5, (ii) any Alterations or Tenant Improvements which would adversely
affect the Building Systems, Building structure, any other Building occupant, or
exterior of the Building, or (iii) any proposed Transfer under this Lease to
which Landlord is not otherwise required to consent under Article 14.

29.30.2 Whenever this Lease grants Landlord or Tenant a right to take action,
exercise discretion, or make an allocation, judgment or other determination
(collectively, an “Act”), Landlord or Tenant shall act reasonably and in good
faith, and shall not take any action which might result in the frustration of
the reasonable expectations of a sophisticated landlord and a sophisticated
tenant concerning the benefits to be enjoyed under this Lease, provided,
however, that:

(a) Wherever this Lease elsewhere provides another standard which specifically
defines or limits Landlord’s or Tenant’s discretion with respect to any Act,
such other standard and not this Paragraph 29.30.2 shall then control as to such
Act;

(b) Except for an obligation to act in good faith, this Paragraph 29.30.2 shall
not apply to an election by Landlord to terminate the Lease under Sections 11.2
or 11.4 or Article 13 (but only if Landlord strictly complies with the
parameters for termination set forth in those Sections);

(c) This Paragraph 29.30.2 shall not apply to an act taken by Landlord pursuant
to Article 19 of this Lease; and

(d) Nothing contained in this Paragraph 29.30.2 shall be deemed to limit the
discretion of Landlord or Tenant with respect to any matter (including, without
limitation, a proposal to amend or otherwise modify the Lease) which is not
otherwise within the contemplation of the Lease.

[Signature page follows]

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed
the day and date first above written.

 

“Landlord”:

WATER GARDEN REALTY HOLDING LLC,

a Delaware limited liability company

By:   Commingled Pension Trust Fund (Strategic Property) of JPMorgan Chase Bank,
N.A., a Member   By:   JPMorgan Chase Bank, N.A., as Trustee     By:  

/s/ Karen Wilbrecht

      Karen Wilbrecht       Executive Director   Date Signed:   “Tenant”:  

CORNERSTONE ONDEMAND, INC.,

a Delaware corporation

  By:  

/s/ Adam L. Miller

    Its:  

Adam L. Miller

    Date Signed:  

November 30, 2011

  By:  

/s/ Perry A. Wallack

    Its:  

Perry A. Wallack

    Date Signed  

November 30, 2011

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

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EXHIBIT “A”

THE WATER GARDEN

OUTLINE OF PREMISES

LOGO [g284832img001.jpg]

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

A-1

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LOGO [g284832img002.jpg]

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

A-2

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EXHIBIT “B”

THE WATER GARDEN

NOTICE OF LEASE TERM DATES

 

  To:  

 

     

 

     

 

     

 

   

 

Re:

Office Lease dated November     , 2011, between WATER GARDEN REALTY HOLDING LLC,
a Delaware limited liability company (“Landlord”), and CORNERSTONE ONDEMAND,
INC., a Delaware corporation (“Tenant”) concerning premises on the 5th and 6th
floors in the office building located at 1601 Cloverfield Blvd., Santa Monica,
California.

Gentlemen:

In accordance with the referenced Office Lease (the “Lease”), we wish to advise
you and/or confirm as follows:

1. The substantial completion of the Premises has occurred, and the Lease Term
shall commence on or has commenced on December 1, 2011 for a term of eighty-six
(86) months ending on January 31, 2019.

2. [                    , 20    is the first day that you opened to the public
for business.]

3. Rent commenced to accrue on             , in the amount of             .

4. If the Lease Commencement Date is other than the first day of the month, the
first billing will contain a pro rata adjustment. Each billing thereafter, with
the exception of the final billing, shall be for the full amount of the monthly
installment as provided for in the Lease.

5. Your rent checks should be made payable to             at             .

6. The rentable square footage of the Premises is 53,072 rentable square feet.

7. Tenant’s Share is 16.16%.

Pursuant to the terms of Article 2 of your Lease, you are required to return an
executed copy of this Notice to             within twenty (20) business days
following your receipt hereof, and thereafter the statements set forth herein
shall be conclusive and binding upon you. Your failure to timely execute and
return this Notice shall constitute your acknowledgment that the statements
included herein are true and correct, without exception.

 

“Landlord”: WATER GARDEN REALTY HOLDING LLC, a Delaware limited liability
company By:   Commingled Pension Trust Fund (Strategic Property) of JPMorgan
Chase Bank, N.A., a Member   By:  

JPMorgan Chase Bank, N.A.,

as Trustee

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

B-1

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By:  

 

  Karen Wilbrecht     Executive Director   Date Signed:  

 

 

Agreed to and Accepted as

of            , 20    .

 

“Tenant”:

CORNERSTONE ONDEMAND, INC.,

a Delaware corporation

By:

 

 

Its:  

 

By:

 

 

Its:

 

 

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

B-2

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EXHIBIT “C”

THE WATER GARDEN

RULES AND REGULATIONS

Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project.

1. Tenant shall not alter any lock or install any new or additional locks or
bolts on any doors or windows of the Premises without obtaining Landlord’s prior
written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Two keys will be furnished by Landlord for the Premises, and
any additional keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord.

2. All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises.

3. Landlord reserves the right to close and keep locked all entrance and exit
doors of the Building during such hours as are customary for comparable
buildings in the greater Los Angeles area. Tenant, its employees and agents must
be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register. Access to the Building may be refused unless the
person seeking access has proper identification or has a previously arranged
pass for access to the Building. The Landlord and his agents shall in no case be
liable for damages for any error with regard to the admission to or exclusion
from the Building of any person. In case of invasion, mob, riot, public
excitement, or other commotion, Landlord reserves the right to prevent access to
the Building or the Project during the continuance thereof by any means it deems
appropriate for the safety and protection of life and property.

4. No furniture, freight or equipment of any kind shall be brought into the
Building without prior notice to Landlord. All moving activity into or out of
the Building shall be scheduled with Landlord and done only at such time and in
such manner as Landlord designates. No service deliveries (other than messenger
services) will be allowed between hours of 4:00 p.m. to 6:00 p.m., Monday
through Friday. Landlord shall have the right to prescribe the weight, size and
position of all safes and other heavy property brought into the Building and
also the times and manner of moving the same in and out of the Building. Safes
and other heavy objects shall, if considered necessary by Landlord, stand on
supports of such thickness as is necessary to properly distribute the weight.
Landlord will not be responsible for loss of or damage to any such safe or
property in any case. Any damage to any part of the Building, its contents,
occupants or visitors by moving or maintaining any such safe or other property
shall be the sole responsibility and expense of Tenant.

5. No furniture, packages, supplies, equipment or merchandise will be received
in the Building or carried up or down in the elevators, except between such
hours and in such specific elevator as shall be designated by Landlord.

6. Any requests of Tenant shall be directed to the management office for the
Project or at such office location designated by Landlord. Employees of Landlord
shall not perform any work or do anything outside their regular duties unless
under special instructions from Landlord.

7. Tenant shall not disturb, solicit, or canvass any occupant of the Project and
shall cooperate with Landlord and its agents to prevent such activities.

8. The toilet rooms, urinals, wash bowls and other apparatus shall not be used
for any purpose other than that for which they were constructed, and no foreign
substance of any kind whatsoever shall be thrown therein. The expense of any
breakage, stoppage or damage resulting from the violation of this rule shall be
borne by the tenant who, or whose employees or agents, shall have caused it.

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

C-1

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9. Tenant shall not overload the floor of the Premises, nor mark, drive nails or
screws, or drill into the partitions, woodwork or plaster or in any way deface
the Premises or any part thereof without Landlord’s consent first had and
obtained except in connection with the hanging of artwork or other standard
office-type decoration, as well as customary bulletin boards, white boards and
the like.

10. Except for vending machines intended for the sole use of Tenant’s employees
and invitees, no vending machines other than fractional horsepower office
machines shall be installed, maintained or operated upon the Premises without
the written consent of Landlord.

11. Tenant shall not use or keep in or on the Premises, the Building, or the
Project any kerosene, gasoline or other inflammable or combustible fluid or
material.

12. Tenant shall not without the prior written consent of Landlord use any
method of heating or air conditioning other than that supplied by Landlord.

13. Tenant shall not use, keep or permit to be used or kept, any foul or noxious
gas or substance in or on the Premises, or permit or allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Project by reason of noise, odors, or vibrations, or interfere
in any way with other tenants or those having business therein.

14. Tenant shall not bring into or keep within the Project, the Building or the
Premises any animals, birds, bicycles or other vehicles.

15. No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters’ laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state and city laws, codes, ordinances, rules and
regulations.

16. Landlord will approve where and how telephone and telegraph wires are to be
introduced to the Premises. No boring or cutting for wires shall be allowed
without the consent of Landlord. The location of telephone, call boxes and other
office equipment affixed to the Premises shall be subject to the approval of
Landlord.

17. Landlord reserves the right to exclude or expel from the Project any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.

18. Tenant, its employees and agents shall not loiter in the entrances or
corridors, nor in any way obstruct the sidewalks, lobby, halls, stairways or
elevators, and shall use them only as a means of ingress and egress for the
Premises.

19. Tenant shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Landlord to ensure the most effective operation of the
Building’s heating and air conditioning system, and shall refrain from
attempting to adjust any controls.

20. Tenant shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in Santa Monica,
California without violation of any law or ordinance governing such disposal.
All trash, garbage and refuse disposal shall be made only through entry-ways and
elevators provided for such purposes at such times as Landlord shall designate.

21. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.

22. Tenant shall assume any and all responsibility for protecting the Premises
from theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.

23. No awnings or other projection shall be attached to the outside walls of the
Building without the prior written consent of Landlord. No curtains, blinds,
shades or screens shall be

 

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attached to or hung in, or used in connection with, any window or door of the
Premises without the prior written consent of Landlord. All electrical ceiling
fixtures hung in offices or spaces along the perimeter of the Building must be
fluorescent and/or of a quality, type, design and bulb color approved by
Landlord. Tenant shall abide by Landlord’s regulations concerning the opening
and closing of window coverings which are attached to the windows in the
Premises, if any, which have a view of any interior portion of the Building or
Building Common Areas.

24. The sashes, sash doors, skylights, windows, and doors that reflect or admit
light and air into the halls, passageways or other public places in the Building
shall not be covered or obstructed by Tenant, nor shall any bottles, parcels or
other articles be placed on the windowsills.

25. Tenant must comply with the State of California “No-Smoking” law set forth
in California Labor Code Section 6404.5, and any local “No-Smoking” ordinance
which may be in effect from time to time and which is not superseded by such
state law.

Landlord reserves the right at any time to change or rescind any one or more of
these Rules and Regulations, or to make such other and further reasonable Rules
and Regulations as in Landlord’s judgment may from time to time be necessary for
the management, safety, care and cleanliness of the Premises, Building, the
Common Areas and the Project, and for the preservation of good order therein, as
well as for the convenience of other occupants and tenants therein provided that
Landlord shall first give Tenant a copy of any such revised Rules and
Regulations prior to enforcing the same against Tenant. Notwithstanding the
foregoing, Tenant shall not be required to comply with any new rule or
regulation unless the same applies non-discriminatorily to all occupants of the
Building, does not unreasonably interfere with Tenant’s use of the Premises or
Tenant’s parking rights and does not materially increase the obligations or
decrease the rights of Tenant under this Lease. Tenant shall be deemed to have
read these Rules and Regulations and to have agreed to abide by them as a
condition of its occupancy of the Premises. Landlord may waive any one or more
of these Rules and Regulations for the benefit of any particular tenants, but no
such waiver by Landlord shall be construed as a waiver of such Rules and
Regulations in favor of any other tenant, nor prevent Landlord from thereafter
enforcing any such Rules or Regulations against any or all tenants of the
Project. Landlord shall not enforce the Rules and Regulations against Tenant on
a discriminatory basis.

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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EXHIBIT “D”

THE WATER GARDEN

FORM OF TENANT’S ESTOPPEL CERTIFICATE

The undersigned as Tenant under that certain Office Lease (the “Lease”) made and
entered into as of November     , 2011 by and between WATER GARDEN REALTY
HOLDING, as Landlord, and the undersigned as Tenant, for Premises on the 5th and
6th floors of the office building located at 1601 Cloverfield Boulevard, Santa
Monica, California, certifies as follows:

1. Attached hereto as Exhibit “A” is a true and correct copy of the Lease and
all amendments and modifications thereto. The documents contained in Exhibit “A”
represent the entire agreement between the parties as to the Premises.

2. The undersigned currently occupies the Premises described in the Lease.

3. The Lease Term commenced on            , 20            , and the Lease Term
expires on                     .

4. Base Rent became payable on             , 20            

5. The Lease is in full force and effect and has not been modified, supplemented
or amended in any way except as provided in Exhibit “A”.

6. Tenant has not transferred, assigned, or sublet any portion of the Premises
nor entered into any license or concession agreements with respect thereto
except as follows:                         .

7. All monthly installments of Base Rent, all Additional Rent and all monthly
installments of estimated Additional Rent have been paid when due through
                . The current monthly installment of Base Rent is
$                .

8. To Tenant’s actual knowledge, without inquiry, all conditions to be performed
by Landlord necessary to the enforceability of the Lease have been satisfied and
Landlord is not in default thereunder.

9. No rental has been paid more than thirty (30) days in advance and no security
has been deposited with Landlord except as provided in the Lease.

10. The Letter of Credit provided by                 Bank in favor of Landlord
is in full force and effect and the amount available to be drawn thereunder is
$                .

11. As of the date hereof, to Tenant’s actual knowledge, without inquiry, there
are no existing defenses or offsets that the undersigned has against Landlord
nor have any events occurred that with the passage of time or the giving of
notice, or both, would constitute a default on the part of Landlord under the
Lease.

12. The undersigned acknowledges that this Estoppel Certificate may be delivered
to Landlord or to a prospective mortgagee, or a prospective purchaser, and
acknowledges that said prospective mortgagee or prospective purchaser will be
relying upon the statements contained herein in making the loan or acquiring the
property of which the Premises are a part and that receipt by it of this
certificate is a condition of making of such loan or acquisition of such
property.

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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Executed at                 on the                 day of                 ,
20        .

 

“Tenant”: CORNERSTONE ONDEMAND, INC.,a Delaware corporation By:  

 

  Its:  

 

By:  

 

  Its:  

 

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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EXHIBIT “E”

THE WATER GARDEN

This Tenant Work Letter shall set forth the terms and conditions relating to the
construction of the Tenant Improvements (as defined below) in the Premises. This
Tenant Work Letter is essentially organized chronologically and addresses the
issues of the construction of the Premises, in sequence, as such issues will
arise during the actual construction of the Premises. All capitalized terms used
but not defined herein shall have the meanings given such terms in the Lease.
All references in this Tenant Work Letter to Articles or Sections of “the Lease”
shall mean the relevant portion of Articles 1 through 29 of the Lease to which
this Tenant Work Letter is attached as Exhibit “E” and of which this Tenant Work
Letter forms a part, and all references in this Tenant Work Letter to Sections
of “this Tenant Work Letter” shall mean the relevant portion of Sections 1
through 5 of this Tenant Work Letter.

ARTICLE 1

BASE BUILDING

The base, shell, and core of the Building, including the floors on which the
Premises are located (the “Base, Shell, and Core”) have been constructed. Tenant
currently occupies the Subleased Space pursuant to the Subleases.
Notwithstanding the terms and conditions of the Subleases, Tenant must comply
with the terms and conditions of this Tenant Work Letter with respect to all
improvements initially constructed in the Subleased Space after the date of the
Lease. Within five (5) days after the mutual execution of the Lease, Landlord
shall deliver the New Space to Tenant. Tenant hereby accepts the Base, Shell and
Core and the Premises “AS IS” in their existing condition as of the date of the
Lease, without any modification or alteration by Landlord, provided that
(A) Landlord shall be responsible for such modification or alteration which is
required in order for the Project to comply with Applicable Laws (including the
Americans with Disabilities Act of 1990, as amended (“ADA”)) in effect on the
date of the Lease, as such laws are currently interpreted and enforced, and
(B) Landlord shall deliver the New Space in the New Space Delivery Condition.
Notwithstanding the foregoing, Tenant, as part of the Tenant Improvements (as
defined below) shall be responsible for performing the following (collectively,
the “HVAC Upgrade Work”) in areas where the existing ceiling is opened up for
Tenant Improvements or where existing VAVs are exposed: (i) upgrade the existing
VAVs with DDC controls; (ii) clean the existing exterior zone VAV heating coils,
and (iii) install Griswold circuit setter valves with T & P connections and
drain valves on reheat coils to exterior VAV zones (if not already existing).
Tenant shall, prior to performance of the HVAC Upgrade Work, submit to Landlord,
for its reasonable approval, an itemized cost breakdown with quantities and unit
prices for the HVAC Upgrade Work. Upon completion of the HVAC Upgrade Work,
provided that Landlord receives the items required by Subparagraphs (i),
(ii) and (iii) of Section 2.2.2(a) with respect to the HVAC Upgrade Work,
Landlord will reimburse Tenant for Tenant’s actual, out-of-pocket costs of the
performance of the HVAC Upgrade Work as defined herein. Such reimbursement shall
be separate from the Tenant Improvement Allowance and not deducted therefrom.
Notwithstanding anything to the contrary herein, in connection with Tenant’s
installation of the Tenant Improvements, Landlord shall be solely responsible
for all costs required to bring the Project outside the Premises into compliance
with Applicable Laws to the extent required for occupancy of the Premises for
general office use, or related to the presence of Hazardous Materials not
introduced by Tenant or its agents, employees or contractors.

ARTICLE 2

TENANT IMPROVEMENTS; TENANT IMPROVEMENT ALLOWANCE

2.1 Tenant Improvement Allowance. Tenant shall be entitled to a one-time tenant
improvement allowance (the “Tenant Improvement Allowance”) in the amount of One
Million Five Hundred Ninety-Two Thousand and One Hundred Sixty and 00/100
Dollars ($1,592,160.00) (which is equal to Thirty Dollars ($30.00) per rentable
square foot of the Premises), to be used solely for the costs relating to the
design, engineering, permitting, management and construction of Tenant’s initial
improvements which are permanently affixed to the Premises (the “Tenant
Improvements”) and for the “Soft Costs” defined below. In no event shall
Landlord be obligated to make disbursements of its own funds pursuant to this
Tenant Work Letter in a total amount which exceeds the Tenant Improvement
Allowance.

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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2.2 Payment of Tenant Improvement Allowance.

2.2.1 Tenant Improvement Allowance Items. Except as otherwise set forth in this
Tenant Work Letter, the Tenant Improvement Allowance shall be disbursed by
Landlord only for the following items and costs (collectively, the “Tenant
Improvement Allowance Items”), provided that no more than twenty percent
(20.0%) of the Tenant Improvement Allowance may be disbursed for “Soft Costs”
(as defined below):

(a) Plan check, permit and license fees relating to construction of the Tenant
Improvements;

(b) The cost of construction of the Tenant Improvements, including, without
limitation, testing and inspection costs, freight elevator usage and trash
removal costs, and Contractor’s Fees, general conditions charges and
construction management fees;

(c) The cost of any changes in the Base, Shell and Core work when such changes
are required by the Construction Drawings, such cost to include all direct
architectural and/or engineering fees and expenses incurred in connection
therewith;

(d) The cost of any changes to the Construction Drawings or Tenant Improvements
required by City of Santa Monica Building Code (the “Building Code”);

(e) Sales and use taxes and Title 24 fees;

(f) The Coordination Fee;

(g) All other costs reasonably approved by Landlord in connection with the
construction of the Tenant Improvements; and

(h) The following costs (each a “Soft Cost” and, collectively, the “Soft
Costs”):

(i) Costs of purchasing and installing telecommunications and data cabling;

(ii) Architectural and engineering design fees; and

(iii) Costs for purchasing and installing workstations.

2.2.2 Disbursement of Tenant Improvement Allowance.

(a) Initial Allowance Amount. With respect to fifty percent (50%) of the Tenant
Improvement Allowance (i.e., Seven Hundred Ninety-Six Thousand Eighty Dollars
($796,080)) (referred to herein as the “Initial Allowance Amount”) on or before
the twentieth (20th) day (the “Submittal Date”) of each calendar month during
the construction of the Tenant Improvements (or such other date as Landlord may
designate), Tenant shall, if Tenant desires disbursements of the Initial
Allowance Amount at such time, deliver to Landlord: (i) a request for payment of
the “Contractor,” as that term is defined in Section 4.1.1 of this Tenant Work
Letter, approved by Tenant, in a commercially reasonable form to be provided by
Landlord, showing the schedule, by trade, of percentage of completion of the
Tenant Improvements in the Premises, detailing the portion of the work completed
and the portion not completed, and demonstrating that the relationship between
the cost of the work completed and the cost of the work to be completed complies
with the terms of the “Construction Budget,” as that term is defined in
Section 4.2.1 of this Tenant Work Letter, as such Construction Budget may be
updated from time to time; (ii) invoices from all of “Tenant’s Agents”, as that
term is defined in Section 4.1.2 of this Tenant Work Letter, for labor rendered
and materials delivered to the Premises; (iii) in connection with reimbursement
payments to Tenant, executed unconditional lien releases, and in connection with
payments that are not reimbursements, executed conditional lien releases, in
each case from all of Tenant’s Agents and in compliance with the appropriate
provisions, as reasonably determined by Landlord, of California Civil Code
Section 3262(d); and (iv) all other information reasonably requested by
Landlord. As between Landlord and Tenant, Tenant’s request for payment shall be
deemed Tenant’s acceptance and approval of the work furnished and/or the
materials supplied as set forth in Tenant’s payment request. On or before the
date occurring thirty (30) days after the Submittal Date (but in no event prior
to January 1, 2012), and assuming Landlord receives all of the information
described in items (i) through (iv), above, Landlord shall deliver a check to
Contractor made payable to

 

 

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Contractor, or a check to Tenant payable to Tenant if Tenant is requesting
reimbursements for previous amounts paid by Tenant to its Agents, in payment of
the lesser of: (A) the amounts so requested by Tenant, as set forth in this
Section 2.2.2(a), above, and (B) the balance of any remaining available portion
of the Initial Allowance Amount, provided that Landlord does not reasonably
dispute any request for payment based on non-compliance of any work with the
“Approved Working Drawings”, as that term is defined in Section 3.4 below, or
due to any substandard work, or for any other reason. Landlord’s payment of such
amounts shall not be deemed Landlord’s approval or acceptance of the work
furnished or materials supplied as set forth in Tenant’s payment request. In no
event will Landlord be obligated to disburse any of the Initial Allowance Amount
prior to January 1, 2012.

(b) Later Allowance Amount. Landlord shall disburse the remaining fifty percent
(50%) of the Tenant Improvement Allowance (i.e., Seven Hundred Ninety-Six
Thousand Eighty Dollars ($796,080)) (referred to herein as the “Later Allowance
Amount”) monthly commencing on July 1, 2012, provided that Tenant complies with
the requirements of Section 2.2.2(a) (and for purposes thereof, references in
Section 2.2.2(a) to the Initial Allowance Amount shall be deemed to refer to the
Later Allowance Amount; provided that in no event will Landlord be obligated to
disburse any of the Later Allowance Amount prior to July 1, 2012).

(c) Final Retention. Subject to the provisions of this Tenant Work Letter,
Landlord shall have the right to withhold payment of ten percent (10%) of the
Later Allowance Amount until (i) the construction of the Premises is completed,
(ii) Tenant delivers to Landlord properly executed unconditional final lien
releases from all of Tenant’s Agents in compliance with California Civil Code
Section 3262(d)(4), (iii) Landlord has reasonably determined that no substandard
work exists which adversely affects the Building structure, Building Systems,
the curtain wall of the Building, the exterior appearance of the Building, or
any other tenant’s use of such other tenant’s leased premises in the Building,
and (iv) Tenant delivers to Landlord a record set of Approved Working Drawings
(as defined below) showing all changes to the Approved Working Drawings made
during construction, and the items described in the “Close-out Requirements”
document included in the Construction Rules, Requirements, Specifications,
Design Criteria and Building Standards (as hereinafter defined). The withholding
of the 10% hereunder will not be applied to each draw request submitted by
Tenant for the Later Allowance Amount; rather the10% will be withheld “on the
back end” until Tenant has satisfied the requirements set forth herein.

(d) Other Terms. Landlord shall only be obligated to make disbursements from the
Tenant Improvement Allowance to the extent costs are incurred by Tenant for
Tenant Improvement Allowance Items. All Tenant Improvement Allowance Items for
which the Tenant Improvement Allowance has been made available shall be deemed
Landlord’s property under the terms of Section 8.5 of the Lease, except that
Tenant shall be the owner of moveable trade fixtures. Landlord shall be under no
obligation to make any disbursement of the Initial Allowance Amount or the Later
Allowance Amount after December 31, 2012.

2.2.3 Tenant Offset Right. If Landlord breaches its obligation relating to the
payment of the Tenant Improvement Allowance as set forth in this Section 2 and
does not cure any such breach within thirty (30) days after notice thereof by
Tenant, and provided Tenant is obligated to and does pay to third parties any
amount which was required to be paid by the Tenant Improvement Allowance, then
Tenant shall have the right to offset any such amount paid by Tenant to such
third parties against the Rent next falling due after the date of such payment.
Any such offset made by Tenant shall be credited against Landlord’s obligations
with respect to the Tenant Improvement Allowance.

2.2.4 Termination Prior to Disbursement of Allowance. Notwithstanding anything
to the contrary set forth herein or in the Lease, if the Lease terminates prior
to December 31, 2012 due to Landlord’s exercise of its termination right under
Articles 11 or 13 thereof and (i) all or a portion of the Tenant Improvement
Allowance remains undisbursed (herein, the “Undisbursed Allowance”), (ii) Tenant
has incurred expenses for Tenant Improvement Costs and complied with the
requirements of Section 2.2.2(a) above (and, with respect to the final 10% of
the Later Allowance Amount, Section 2.2.2(c) above), such that Tenant would have
been entitled to receive the Undisbursed Allowance but for Landlord’s
termination of the Lease, (iii) Tenant has carried the insurance required to be
carried by Tenant hereunder and under the Lease, and (iv) Tenant’s insurance
does not fully reimburse Tenant for the cost of its Tenant Improvements, then
Landlord will pay Tenant for the Tenant Improvement costs not reimbursed by
Tenant’s insurance, up to the amount of the Undisbursed Allowance, within thirty
(30) days after termination of this Lease.

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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ARTICLE 3

CONSTRUCTION DRAWINGS

3.1 Selection of Architect/Construction Drawings. Tenant shall retain a licensed
competent, reputable architect, experienced in high-end office space design (the
“Architect”), as architect/space planner for the construction of the Tenant
Improvements to prepare the Construction Drawings. It is not required that
Tenant obtain Landlord’s consent to Tenant’s selection of the Architect.
Landlord acknowledges that Tenant has retained S.K.I.N. Inc. as the Architect.
If necessary due to the nature of the Tenant Improvements, Tenant shall retain
the engineering consultants designated by Landlord (the “Engineers”), provided
Tenant is not obligated to pay more for their services than market rates, to
prepare all plans and engineering working drawings relating to the structural,
mechanical, electrical, plumbing, HVAC, life safety, and sprinkler work in the
Premises, which work is not part of the Base, Shell and Core work, if any,
required of Landlord hereunder. The plans and drawings to be prepared by
Architect and the Engineers hereunder shall be known, collectively, as the
“Construction Drawings”. Landlord’s review of the Construction Drawings as set
forth in this Article 3 shall be for its own purpose and shall not imply
Landlord’s review of the same, or obligate Landlord to review the same for
quality, design, Building Code compliance or other like matters. Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or its
space planner, architect, engineers and consultants, and notwithstanding any
advice or assistance which may be rendered to Tenant by Landlord or Landlord’s
space planner, architect, engineers, and consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings, and Tenant’s
waiver and indemnity set forth in Section 10.1 of the Lease shall, without
limitation, specifically apply to the Construction Drawings. Furthermore, Tenant
and Architect shall verify, in the field, the dimensions and conditions as shown
on the relevant portions of the Construction Drawings, and Tenant and Architect
shall be solely responsible for the same, and Landlord shall have no
responsibility in connection therewith.

3.2 Final Space Plan. Tenant shall supply Landlord with two (2) copies signed by
Tenant of its final space plan for the Premises (the “Final Space Plan”) for
Landlord’s reasonable approval. The Final Space Plan shall include a layout and
designation of all offices, rooms and other partitioning, the configuration of
workstations (if any) and their intended use. Landlord shall advise Tenant, with
reasonable specificity, within five (5) business days after Landlord’s receipt
of the Final Space Plan, if Landlord reasonably determines that a Design Problem
(as defined in Section 8.1 of the Lease) exists in connection with the same in
any respect. If Landlord fails to advise Tenant of any Design Problem within
said five (5) business day period, then Landlord shall be deemed to have
approved such Final Space Plan. Tenant shall promptly cause the Final Space Plan
to be revised to reflect Landlord’s comments before any architectural working
drawings or engineering drawings are commenced. Notwithstanding anything to the
contrary herein or in the Lease, Tenant is not obligated to plan or construct
any Tenant Improvements (it being acknowledged and agreed, however, that Tenant
will not be entitled to any Initial Allowance Amount or Later Allowance Amount
after December 31, 2012). If no time period herein is stated for Landlord to
respond to a request, provide a required consent, or take other action, Landlord
shall be required to respond within a five (5) business day period and
Landlord’s failure to do so shall be deemed a consent and/or waiver of such
requirement.

3.3 Final Working Drawings. After the approval and final correction of the Final
Space Plan, Tenant shall promptly cause the Architect and the Engineers to
complete the architectural and engineering drawings for the Premises, and cause
Architect to compile a fully coordinated set of architectural, structural,
mechanical, electrical and plumbing working drawings in a form which is complete
to allow subcontractors to bid on the work and to obtain all applicable permits
(collectively, the “Final Working Drawings”) and Tenant shall submit the same to
Landlord for Landlord’s reasonable approval. Tenant shall supply Landlord with
two (2) copies signed by Tenant of such Final Working Drawings. Landlord shall
advise Tenant, with reasonable specificity, within ten (10) days after
Landlord’s receipt of the Final Working Drawings if Landlord reasonably
determines that a Design Problem exists in connection with the same in any
respect. If Landlord fails to advise Tenant of the same within said ten (10) day
period, then Landlord shall be deemed to have approved such Final Working
Drawings. If Tenant is so advised, Tenant shall immediately revise the Final
Working Drawings in accordance with such review and any disapproval or
identification of a Design Problem by Landlord.

3.4 Approved Working Drawings. The Final Working Drawings shall be approved
(which approval shall not be unreasonably withheld or delayed) by Landlord (the
“Approved

 

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Working Drawings”) prior to the commencement of construction of the Premises by
Tenant. After approval by Landlord of the Final Working Drawings, Tenant shall
submit the same to the City of Santa Monica for all applicable building permits.
Tenant hereby agrees that neither Landlord nor Landlord’s consultants shall be
responsible for obtaining any building permit or certificate of occupancy for
the Premises and that obtaining the same shall be Tenant’s responsibility;
provided, however, that Landlord shall cooperate with Tenant in executing permit
applications and performing other ministerial acts reasonably necessary to
enable Tenant to obtain any such permit or certificate of occupancy. No changes,
modifications or alterations in the Approved Working Drawings may be made
without the prior written consent of Landlord, which consent may not be
unreasonably withheld or delayed.

3.5 Construction Rules, Requirements, Specifications, Design Criteria and
Building Standards. Landlord has established construction rules, regulations,
requirements and procedures, and specifications, design criteria and Building
standards which Tenant, the Architect and all the other Tenant’s Agents (as
defined in Paragraph 4.1(b) below) must comply with in designing and
constructing the Tenant Improvements in the Premises (collectively, the
“Construction Rules, Requirements, Specifications, Design Criteria and Building
Standards”).

ARTICLE 4

CONSTRUCTION OF THE TENANT IMPROVEMENTS

4.1 Tenant’s Selection of Contractor.

4.1.1 The Contractor. Tenant shall hire a licensed, competent, reputable general
contractor, experienced in high-end office space construction in Santa Monica,
who is reasonably approved in writing by Landlord (the “Contractor”), as
contractor for the construction of the Tenant Improvements. Tenant may
competitively bid among general contractors approved by Landlord in selecting
the Contractor. It is not required that Tenant obtain Landlord’s consent to
Tenant’s selection of the Contractor.

4.1.2 Tenant’s Agents. All subcontractors (including all fire sprinkler
tradesmen), laborers, materialmen, and suppliers used by Tenant (such
subcontractors, laborers, materialmen, and suppliers, and the Contractor, the
Architect, and all other contractors, engineers and consultants retained by the
Tenant to be known collectively as “Tenant’s Agents”) must be licensed,
competent, reputable, and experienced in high-end office space construction in
Santa Monica; provided that, in any event, Tenant must contract with Landlord’s
base building subcontractors for any mechanical, electrical, plumbing, fire
sprinkler, life-safety, roofing, or heating, ventilation, and air-conditioning
work in the Premises so long as Tenant or its Contractor is not required to pay
such subcontractors more than market rates. Tenant’s Agents must be union
contractors, subject to the following: service providers, architects, engineers
and consultants who do not perform any physical construction work do not have to
be union. General contractors do not have to be union, with the condition that
they do not perform any construction work in-house and have on-site only a
superintendent and a laborer for clean-up. Furniture installers must belong to
the carpenter’s union, and all trades (subcontractors) must be union; provided,
however, that Tenant may use non-union labor for the following trades:
demolition, glazing, flooring and cabling, but in the case of labor disruption
or the threat of a disruption as determined by Landlord in its sole discretion,
Tenant shall immediately cease using such non-union labor and switch to
union-labor. Tenant shall immediately cease using any of Tenant’s Agents that
Landlord determines are not suitable for the Project, whether because of quality
of the work or because of any potential or actual adverse impact of such
contractor on the Project or on the labor relations between Landlord and any
trade unions (including picketing or otherwise disrupting tenants or operations
at the Project).

4.2 Construction of Tenant Improvements by Tenant’s Agents.

4.2.1 Construction Contract; Cost Budget. Within (5) five days after Tenant’s
execution of the construction contract with Contractor (the “Contract”), and
prior to the commencement of the construction of the Tenant Improvements, Tenant
shall submit the Contract to Landlord for its records. Prior to the commencement
of the construction of the Tenant Improvements, and after Tenant has accepted
all bids for the Tenant Improvements, Tenant shall provide Landlord with (i) a
detailed breakdown, by trade, for all of Tenant’s Agents, of the final costs to
be incurred or which have been incurred in connection with the design and
construction of the Tenant Improvements to be performed by or at the direction
of Tenant or the Contractor (which costs form a basis for the amount of the
Contract) (the “Final Costs”) and (ii) a construction budget

 

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(the “Construction Budget”), the amount of which Construction Budget shall be
equal to (1) the Final Costs plus (2) the other costs of design and construction
of the Premises (to the extent not already included in the Final Costs), which
costs shall include, but not be limited to, the costs of the Architect’s and
Engineers’ fees and the Coordination Fee.

4.2.2 Tenant’s Agents.

(a) Landlord’s General Conditions for Tenant’s Agents and Tenant Improvement
Work. Tenant’s and Tenant’s Agent’s construction of the Tenant Improvements
shall comply with the following: (i) the Tenant Improvements shall be
constructed in strict accordance with the Approved Working Drawings; (ii) Tenant
and Tenant’s Agents shall not, in any material way, interfere with, obstruct, or
delay any other work in the Building; (iii) Tenant’s Agents shall submit
schedules of all work relating to the Tenant’s Improvements to Contractor and
Contractor shall, within five (5) business days of receipt thereof, inform
Tenant’s Agents of any changes which are necessary thereto, and Tenant’s Agents
shall adhere to such corrected schedule; and (iv) Tenant and Tenant’s Agents
shall abide by all reasonable rules made by Landlord’s Building contractor or
Landlord’s Building manager and as described in the Construction Rules,
Requirements, Specifications, Design Criteria and Building Standards with
respect to the use of freight, loading dock and service elevators, storage of
materials, coordination of work with the contractors of other tenants, and any
other matter in connection with this Tenant Work Letter, including, without
limitation, the construction of the Tenant Improvements. To the extent there is
any conflict between the terms and provisions of the Lease or this Tenant Work
Letter, on the one hand, and the terms and provisions of the Construction Rules,
Requirements, Specifications, Design Criteria and Building Standards, on the
other hand, the terms and provisions of the Lease or this Tenant Work Letter, as
applicable, shall control.

(b) Coordination Fee. Tenant shall pay a coordination fee (the “Coordination
Fee”) to Landlord in an amount equal to one percent (1%) of the lesser of
(i) the Tenant Improvement Allowance and (ii) the Final Costs, which
Coordination Fee shall be for services relating to the coordination of the
construction of the Tenant Improvements.

(c) Indemnity. Tenant’s indemnity of Landlord as set forth in Section 10.1 of
the Lease shall also apply with respect to any and all costs, losses, damages,
injuries and liabilities related in any way to any act or omission of Tenant or
Tenant’s Agents, or anyone directly or indirectly employed by any of them, or in
connection with Tenant’s non-payment of any amount arising out of the Tenant
Improvements (unless such failure to pay by Tenant is a result of Landlord’s
failure to disburse the Tenant Improvement Allowance in the manner required
under this Tenant Work Letter). Such indemnity by Tenant, as set forth in
Section 10.1 of the Lease, shall also apply with respect to any and all costs,
losses, damages, injuries and liabilities related in any way to Landlord’s
performance of any ministerial acts reasonably necessary to enable Tenant to
obtain any building permit or certificate of occupancy for the Premises, except
to the extent due to Landlord’s negligence, willful misconduct or default under
the Lease.

(d) Requirements of Tenant’s Agents. Each of Tenant’s Agents shall guarantee to
Tenant and for the benefit of Landlord that the portion of the Tenant
Improvements for which it is responsible shall be free from any defects in
workmanship and materials for a period of not less than one (1) year from the
date of completion thereof. Each of Tenant’s Agents shall be responsible for the
replacement or repair, without additional charge, of all work done or furnished
in accordance with its contract that shall become defective within one (1) year
after the completion of the work performed by such contractor or subcontractors.
The correction of such work shall include, without additional charge, all
additional expenses and damages incurred in connection with such removal or
replacement of all or any part of the Tenant Improvements, and/or the Building
and/or common areas that may be damaged or disturbed thereby. All such
warranties or guarantees as to materials or workmanship of or with respect to
the Tenant Improvements shall be contained in the Contract or subcontract and
shall be written such that such guarantees or warranties shall inure to the
benefit of both Landlord and Tenant, as their respective interests may appear,
and can be directly enforced by either. Tenant covenants to give to Landlord any
assignment or other assurances which may be necessary to effect such right of
direct enforcement upon termination of this Lease.

(e) Insurance Requirements.

(i) General Coverages. All of Tenant’s Agents shall carry (i) worker’s
compensation insurance with statutory limits covering all of their respective

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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employees, (ii) employer’s liability insurance of $1,000,000 for each block (ie,
“Each Accident”, Disease-Policy Limit”, “Disease-Each Employee”), (iii) Broad
Form Commercial General Liability insurance with a combined single limit of
coverage of $2,000,000 for the minor trade subcontractors, and a combined single
limit of coverage of $3,000,000 for the Contractor and major trade
subcontractors and all of the other Tenant’s Agents; (iv) automobile liability
insurance for all owned, non-owned and hired vehicles in the amount of
$1,000,000; and (v) Professional Liability and Errors and Omissions coverage in
the amount of $1,000,000 for Tenant’s Agents involved with design or
engineering. All of Tenant’s Agent’s employees at the Project shall be bonded
for $1,000,000. The policies shall insure Landlord, CBRE and Tenant, as their
interests may appear, as well as the Contractor and subcontractors. CBRE, at the
office of the Building, shall be the certificate holder.

(ii) Special Coverages. Tenant shall carry “Builder’s All Risk” insurance in an
amount approved by Landlord covering the construction of the Tenant
Improvements, and such other insurance as Landlord may require, it being
understood and agreed that the Tenant Improvements shall be insured by Tenant
pursuant to Article 10 of the Lease immediately upon completion thereof. Such
insurance shall be in amounts and shall include such extended coverage
endorsements as may be reasonably required by Landlord.

(iii) General Terms. Original Certificates for all insurance carried pursuant to
this Section 4.2.2(e) must be delivered to Landlord before the commencement of
construction of the Tenant Improvements and before the Contractor’s equipment is
moved onto the site. All such policies of insurance must contain a provision
that the company writing said policy will give Landlord thirty (30) days prior
written notice of any cancellation or lapse of the effective date or any
reduction in the amounts of such insurance. In the event that the Tenant
Improvements are damaged by any cause during the course of the construction
thereof, Tenant shall immediately repair the same at Tenant’s sole cost and
expense. Tenant’s Agents shall maintain all of the foregoing insurance coverage
in force until the Tenant Improvements are fully completed and accepted by
Landlord, except for any Products and Completed Operations Coverage insurance
required by Landlord, which is to be maintained for three (3) years following
completion of the work and acceptance by Landlord and Tenant. All property
insurance maintained by Tenant’s Agents shall preclude subrogation claims by the
insurer against anyone insured thereunder. Such insurance shall provide that it
is primary insurance as respects the owner and that any other insurance
maintained by owner is excess and noncontributing with the insurance required
hereunder. The requirements for the foregoing insurance shall not derogate from
the provisions for indemnification of Landlord by Tenant under Section 4.2.2(c)
of this Tenant Work Letter.

4.2.3 Governmental Compliance. The Tenant Improvements shall comply in all
respects with the following: (i) the Building Code and other state, federal,
city or quasi-governmental laws, codes, ordinances and regulations, as each may
apply according to the rulings of the controlling public official, agent or
other person; (ii) applicable standards of the American Insurance Association
(formerly, the National Board of Fire Underwriters) and the National Electrical
Code; and (iii) building material manufacturer’s specifications.

4.2.4 Inspection by Landlord. Landlord shall have the right to inspect the
Tenant Improvements at all times, provided however, that Landlord’s failure to
inspect the Tenant Improvements shall in no event constitute a waiver of any of
Landlord’s rights hereunder nor shall Landlord’s inspection of the Tenant
Improvements constitute Landlord’s approval of the same. Should Landlord
reasonably disapprove any portion of the Tenant Improvements, Landlord shall
notify Tenant in writing of such disapproval and shall specify the items
disapproved. Any material defects or deviations in, and/or reasonable
disapproval by Landlord of, the Tenant Improvements shall be rectified by Tenant
at no expense to Landlord, provided however, that in the event Landlord
determines that a defect or deviation exists or disapproves of any matter in
connection with any portion of the Tenant Improvements and such defect,
deviation or matter is likely to adversely affect the Building Systems, the
structure or exterior appearance of the Building or any other tenant’s use of
such other tenant’s leased premises, Landlord may, take such action as Landlord
reasonably deems necessary, at Tenant’s expense and without incurring any
liability on Landlord’s part, to correct any such defect, deviation and/or
matter, including, without limitation, causing the cessation of performance of
the construction of the Tenant Improvements until such time as the defect,
deviation and/or matter is corrected to Landlord’s satisfaction.

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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4.2.5 Meetings. Commencing upon the execution of the Lease, Tenant shall hold
weekly meetings at a time mutually agreed upon by Landlord and Tenant, with the
Architect and the Contractor regarding the progress of the preparation of
Construction Drawings and the construction of the Tenant Improvements, which
meetings shall be held at a location mutually agreed upon by Landlord and
Tenant. Landlord and/or its agents shall have the right to attend all such
meetings, and, upon Landlord’s reasonable request, certain of Tenant’s Agents
shall attend such meetings. In addition, minutes shall be taken at all such
meetings, and a copy of such minutes shall be promptly delivered to Landlord.
One such meeting each month shall include the review of Contractor’s current
request for payment.

4.3 Notice of Completion; Copy of “As Built” Plans. Within five (5) days after
completion of construction of the Tenant Improvements, Tenant shall cause a
Notice of Completion to be recorded in the office of the Recorder of the County
of Los Angeles in accordance with Section 3093 of the Civil Code of the State of
California or any successor statute, and shall furnish a copy thereof to
Landlord upon such recordation. If Tenant fails to do so, Landlord may execute
and file the same on behalf of Tenant as Tenant’s agent for such purpose, at
Tenant’s sole cost and expense. Within thirty (30) days after the substantial
completion of construction of the Tenant Improvements, Tenant shall deliver to
Landlord as-built drawings and the items described in the “Close-out
Requirements” document included in the Landlord’s Construction Rules,
Requirements, Specifications, Design Criteria and Building Standards.

ARTICLE 5

MISCELLANEOUS

5.1 Tenant’s Representative. Tenant has designated Perry Wallack as its sole
representative with respect to the matters set forth in this Tenant Work Letter,
who, until further notice to Landlord, shall have full authority and
responsibility to act on behalf of the Tenant as required in this Tenant Work
Letter.

5.2 Landlord’s Representative. Landlord has designated Jeff Bertwell as its sole
representative with respect to the matters set forth in this Tenant Work Letter,
who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.

5.3 Time of the Essence in This Tenant Work Letter. Unless otherwise indicated,
all references in this Tenant Work Letter to a “number of days” shall mean and
refer to calendar days. If any item requiring approval is timely disapproved by
Landlord, the procedure for preparation of the document and approval thereof
shall be repeated until the document is approved by Landlord.

5.4 Tenant’s Lease Default. Notwithstanding any provision to the contrary
contained in the Lease, if an event of default as described in Section 19.1 of
the Lease or default by Tenant under this Tenant Work Letter has occurred at any
time and is not cured after notice and within the applicable cure period (or if
no cure period is provided, then within a reasonable period), then, in addition
to all other rights and remedies granted to Landlord pursuant to the Lease,
Landlord shall have the right to withhold payment of all or any portion of the
Tenant Improvement Allowance, and all other obligations of Landlord under the
terms of this Tenant Work Letter shall be suspended until such time as such
default is cured pursuant to the terms of the Lease.

5.5 Services and Utilities. During the construction of the Tenant Improvements
in the Premises, Landlord shall, subject to the reasonable requirements of
existing tenants in the Building, provide to Tenant and Tenant’s Agents the
non-exclusive use of Landlord’s freight elevators and loading docks as may be
reasonably required to enable Tenant’s Agents to construct the Tenant
Improvements during Building hours in accordance with the Construction Rules,
Requirements, Specifications, Design Criteria and Building Standards, and, to
the extent Building Systems therefor remain intact during construction,
electricity, water and HVAC during Building hours (collectively, the
“Services”), all of which shall be provided without deduction from the Tenant
Improvement Allowance or other charge to Tenant. The Final Costs shall include
the cost of Services (at Landlord’s actual out-of-pocket cost) utilized in the
prosecution of the Tenant Improvements outside of Building hours, or which are
required by Tenant and used by Tenant on an exclusive basis; provided that the
parties stipulate that the charge for use of the freight elevator outside of
Building hours shall be $25.00 per hour with a four (4) hour minimum. Tenant’s
Agents shall also be provided with parking (to the extent available) free of
charge during the construction of the Tenant Improvements. Notwithstanding
anything to the contrary set forth herein, nothing in this Section 5.5

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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shall limit or modify Tenant’s obligations under the Subleases (or the
obligations of the sublandlord thereunder to Landlord) with respect to the
Subleased Space for the period prior to the Lease Commencement Date.

5.6 Early Access. Tenant shall have the right to access the New Space
immediately upon delivery thereof by Landlord for purposes of planning the
Tenant Improvements; Tenant may commence construction of the Tenant Improvements
after obtaining any required permits from the City of Santa Monica and subject
to the terms of this Tenant Work Letter and the terms of Construction Rules,
Requirements, Specifications, Design Criteria and Building Standards. Such early
access shall be subject to all of the terms of the Lease and this Tenant Work
Letter, except the obligation to pay Base Rent and Additional Rent for Project
Expenses.

SECTION 6

RENT COMMENCEMENT

6.1 Rent Commencement. Except as set forth in this Article 6, Tenant’s
obligation to pay Base Rent for the Premises shall commence on the Lease
Commencement Date as provided in the Lease.

6.2 Definitions.

(a) The term “Landlord Delay” shall mean a delay in the Substantial Completion
(as defined below) of the Tenant Improvements due to the following acts or
omissions of Landlord, its agents or contractors: (1) delay in Landlord’s
response beyond the time periods provided herein with respect to authorizations
or approvals, except where this Tenant Work Letter provides for a deemed
approval by Landlord when Landlord fails to respond within the specified time
period; (2) delay attributable to the interference of Landlord, its agents or
contractors with the design of the Tenant Improvements, or the failure or
refusal of any such party, after the date the Premises are delivered to Tenant,
to permit Tenant, its agents or contractors, reasonable access during normal
business hours to the Building or any Building facilities or services, including
freight elevators, passenger elevators, and loading docks, which access and use
are required for the orderly and continuous performance of the work necessary
for Tenant to complete the Tenant Improvements (except that access to passenger
elevators is subject to the normal operation of the Building and access thereto
by the other tenants of the Building); or (3) delay by Landlord in administering
and paying when due the Tenant Improvement Allowance.

(b) The term “Force Majeure Delay” shall mean a delay in the Substantial
Completion of the Tenant Improvements due to governmental strike, natural
disaster or war.

(c) “Substantial Completion” of the Premises shall occur upon the later to occur
of (i) permitted occupancy of New Space by the City of Santa Monica and
(ii) completion of construction of the Tenant Improvements in the Premises
pursuant to the Approved Working Drawings, with the exception of any punch list
items and any tenant fixtures, work-stations, built-in furniture, or equipment
to be installed by Tenant in the Premises pursuant to the terms of this Tenant
Work Letter or to be installed under the supervision of Contractor.

6.3 Effect of Delays. Tenant’s obligation to commence paying Base Rent shall be
postponed by one (1) day for each day of Landlord Delay and non-concurrent Force
Majeure Delay, subject to this Section 6.3. No Landlord Delay or Force Majeure
Delay shall be deemed to have occurred unless and until Tenant has provided
written notice to Landlord specifying the action, inaction or event that Tenant
contends constitutes a Landlord Delay or Force Majeure Delay. If such action,
inaction or event is not cured or terminated within one (1) business day after
receipt of such notice, then a Landlord Delay or Force Majeure Delay, as
applicable, shall be deemed to have occurred commencing as of the date such
notice is received and continuing for the number of days that the Substantial
Completion of the Premises was, in fact, delayed, as a result of such action, in
action or event. Landlord Delays and Force Majeure Delays shall be recognized
hereunder only to the extent the same are not concurrent with any other Landlord
Delay or Force Majeure Delay which is effective hereunder. For example, if there
are ten (10) days of Landlord Delays and four (4) days of Force Majeure Delays
which occur during the same ten (10) day period of such Landlord Delays, then
the date of Base Rent commencement would be extended by only ten (10) days; on
the other hand, if such Landlord Delays and Force Majeure Delays did not occur
during the same period, the date of Base Rent commencement would be extended by
fourteen (14) days. Notwithstanding anything to the contrary set forth herein,
the maximum amount of Force Majeure Delay recognized

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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hereunder shall be one hundred eighty (180) days (i.e., the date of Base Rent
commencement may not be postponed by more than one hundred eighty (180) days of
Force Majeure Delay).

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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EXHIBIT “F”

THE WATER GARDEN

EXISTING 10% PLANS REFERENCED IN

SECTION 29.25 OF THE LEASE

None.

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

F-1

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EXHIBIT “G”

THE WATER GARDEN

FORM OF LETTER OF CREDIT

BENEFICIARY:

WATER GARDEN REALTY HOLDING LLC

1620 26TH STREET, SUITE 1015N

SANTA MONICA, CA 90404

AS “LANDLORD”

APPLICANT:

CORNERSTONE ONDEMAND, INC.

1601 CLOVERFIELD BLVD., SUITE 620

SANTA MONICA, CA 90404

AS “TENANT”

AMOUNT: US$1,000,000.00 ONE MILLION AND NO/100 US DOLLARS)

EXPIRATION DATE:                     (TBD – ONE YEAR FROM L/C ISSUANCE)

LOCATION: SANTA CLARA, CALIFORNIA

LADIES AND GENTLEMEN:

WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO.
SVBSF            IN FAVOR OF WATER GARDEN REALTY HOLDING LLC, A DELAWARE LIMITED
LIABILITY COMPANY (“BENEFICIARY”). THIS LETTER OF CREDIT IS AVAILABLE BY SIGHT
PAYMENT WITH OURSELVES ONLY AGAINST PRESENTATION AT THE BANK’S OFFICE (AS
DEFINED BELOW) OF THE FOLLOWING DOCUMENTS:

 

  1. THE ORIGINAL OF THIS LETTER OF CREDIT AND ALL AMENDMENT(S), IF ANY EXCEPT
WITH RESPECT TO DEMANDS FOR PAYMENT BY FACSIMILE TRANSMISSION IN ACCORDANCE WITH
THE TERMS BELOW.

 

  2. YOUR SIGHT DRAFT, IN WHOLE OR IN PART DRAWN ON US IN THE FORM ATTACHED
HERETO AS EXHIBIT “A”.

 

  3. A DATED STATEMENT PURPORTEDLY SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE
BENEFICIARY, FOLLOWED BY HIS/HER PRINTED NAME AND DESIGNATED TITLE, STATING ANY
OF THE FOLLOWING WITH INSTRUCTIONS IN BRACKETS THEREIN COMPLIED WITH:

 

  (A.)

”BENEFICIARY IS ENTITLED TO MAKE A DRAW ON LETTER OF CREDIT NO.
SVBSF00            IN THE AMOUNT OF $            UNDER THE PROVISIONS OF THE
LEASE DATED AS OF             , 2011 BETWEEN WATER GARDEN REALTY HOLDING LLC AND
TENANT WITH RESPECT TO PREMISES IN THE BUILDING LOCATED AT 1601 CLOVERFIELD
BOULEVARD, SANTA MONICA, CALIFORNIA (THE “LEASE”) AND THAT (1) A DEFAULT BY
TENANT HAS OCCURRED UNDER

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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  THE LEASE BEYOND APPLICABLE NOTICE AND CURE PERIODS, OR IN LIEU OF ITEM
(1) ABOVE, (2) A DEFAULT WOULD EXIST UNDER THE LEASE BUT LANDLORD IS BARRED BY
APPLICABLE LAW FROM SENDING A NOTICE OF DEFAULT TO TENANT WITH RESPECT THERETO.”

OR

 

  (B.) “BENEFICIARY HAS RECEIVED A NOTICE FROM SILICON VALLEY BANK THAT ITS
IRREVOCABLE LETTER OF CREDIT NUMBER SVBSF            WILL NOT BE EXTENDED AND
APPLICANT HAS FAILED TO PROVIDE A REPLACEMENT LETTER OF CREDIT SATISFACTORY TO
BENEFICIARY WITHIN THIRTY (30) DAYS PRIOR TO THE CURRENT EXPIRATION DATE.”

THE LEASE MENTIONED ABOVE IS FOR IDENTIFICATION PURPOSES ONLY AND IT IS NOT
INTENDED THAT SAID LEASE BE INCORPORATED HEREIN OR FORM PART OF THIS LETTER OF
CREDIT.

PARTIAL AND MULTIPLE DRAWINGS ARE ALLOWED.

SUBJECT TO THE PROVISIONS BELOW PERMITTING FACSIMILE TRANSMISSION. THIS LETTER
OF CREDIT MUST ACCOMPANY ANY DRAWINGS HEREUNDER FOR ENDORSEMENT OF THE DRAWING
AMOUNT AND WILL BE RETURNED TO BENEFICIARY UNLESS IT IS FULLY UTILIZED.

THIS LETTER OF CREDIT EXPIRES AT OUR OFFICE ON             , BUT SHALL BE
AUTOMATICALLY EXTENDED FOR AN ADDITIONAL PERIOD OF ONE YEAR, WITHOUT AMENDMENT,
FROM THE PRESENT OR EACH FUTURE EXPIRATION DATE UNLESS AT LEAST SIXTY (60) DAYS
PRIOR TO THE THEN CURRENT EXPIRATION DATE WE SEND YOU A NOTICE BY REGISTERED
MAIL/OVERNIGHT COURIER SERVICE AT THE ABOVE ADDRESS (OR SUCH OTHER ADDRESS AS
BENEFICIARY MAY FROM TIME TO TIME DESIGNATE IN A NOTICE DELIVERED TO SILICON
VALLEY BANK AT THE BANK’S OFFICE) THAT THIS LETTER OF CREDIT WILL NOT BE
EXTENDED BEYOND THE THEN-CURRENT EXPIRATION DATE. BUT IN ANY EVENT THIS LETTER
OF CREDIT WILL NOT BE EXTENDED BEYOND MAY 10, 2019 WHICH SHALL BE THE FINAL
EXPIRATION DATE OF THIS LETTER OF CREDIT.

THE DATE THIS LETTER OF CREDIT EXPIRES IN ACCORDANCE WITH THE ABOVE PROVISION IS
THE “FINAL EXPIRATION DATE”. UPON THE OCCURRENCE OF THE FINAL EXPIRATION DATE
THIS LETTER OF CREDIT SHALL FULLY AND FINALLY EXPIRE AND NO PRESENTATIONS MADE
UNDER THIS LETTER OF CREDIT AFTER SUCH DATE WILL BE HONORED.

THIS LETTER OF CREDIT IS TRANSFERABLE ONE OR MORE TIMES BY THE ISSUING BANK,

AT THE REQUEST OF THE BENEFICIARY, BUT IN EACH INSTANCE TO A SINGLE BENEFICIARY
AND ONLY IN ITS ENTIRETY UP TO THE THEN AVAILABLE AMOUNT IN FAVOR OF ANY
NOMINATED TRANSFEREE ASSUMING SUCH TRANSFER TO SUCH TRANSFEREE WOULD BE IN
COMPLIANCE WITH THEN APPLICABLE LAW AND REGULATIONS, INCLUDING BUT NOT LIMITED
TO THE REGULATIONS OF THE U.S. DEPARTMENT OF TREASURY AND U.S. DEPARTMENT OF
COMMERCE. AT THE TIME OF TRANSFER, THE ORIGINAL LETTER OF CREDIT

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

G-2

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AND ORIGINAL AMENDMENT(S), IF ANY, MUST BE SURRENDERED TO US TOGETHER WITH OUR
LETTER OF TRANSFER DOCUMENTATION (IN THE FORM OF EXHIBIT “B” ATTACHED HERETO)
AND OUR TRANSFER FEE OF  1/4 OF 1% OF THE TRANSFER AMOUNT (MINIMUM $250.00). THE
CORRECTNESS OF THE SIGNATURE AND TITLE OF THE PERSON SIGNING THE TRANSFER FORM
MUST BE VERIFIED BY BENEFICIARY’S BANK. ANY TRANSFER OF THIS LETTER OF CREDIT
MAY NOT CHANGE THE PLACE OF EXPIRATION OF THE LETTER OF CREDIT FROM OUR
ABOVE-SPECIFIED OFFICE. EACH TRANSFER SHALL BE EVIDENCED BY OUR ENDORSEMENT ON
THE REVERSE OF THE ORIGINAL LETTER OF CREDIT AND WE SHALL FORWARD THE ORIGINAL
LETTER OF CREDIT AND ORIGINAL AMENDMENT(S), IF ANY, TO THE TRANSFEREE.

DRAFT(S) AND DOCUMENTS MUST INDICATE THE NUMBER OF THIS LETTER OF CREDIT.

ALL DEMANDS FOR PAYMENT SHALL BE MADE EITHER IN PERSON OR BY OVERNIGHT COURIER,
BY MAIL BY PRESENTATION OF THE ORIGINAL APPROPRIATE DOCUMENTS DURING REGULAR
BUSINESS HOURS (“PRESENTATION”), ON A BUSINESS DAY AT OUR OFFICE (THE “BANK’S
OFFICE”) AT: SILICON VALLEY BANK, 3003 TASMAN DRIVE, SANTA CLARA, CA 95054,
ATTENTION: STANDBY LETTER OF CREDIT NEGOTIATION SECTION OR BY FACSIMILE
TRANSMISSION OF THE ORIGINAL APPROPRIATE DOCUMENTS PRIOR TO 10:00 A.M.
CALIFORNIA TIME (“PRESENTATION”) , ON A BUSINESS DAY AT OUR OFFICE (THE “BANK’S
OFFICE”) AT: (408) 654-6211 OR (408) 496-2418 AND SIMULTANEOUSLY UNDER TELEPHONE
ADVICE TO: (408) 654-6274 OR (408) 654-7127), ATTENTION: STANDBY LETTER OF
CREDIT NEGOTIATION SECTION.

IN CASE DEMAND FOR PAYMENT HEREUNDER IS PRESENTED BY FACSIMILE TRANSMISSION,
PRESENTATION OF THE ORIGINAL OF SUCH DEMAND FOR PAYMENT IS NOT REQUIRED.

WE HEREBY ENGAGE WITH YOU THAT DRAFT(S) DRAWN AND/OR DOCUMENTS PRESENTED UNDER
AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT SHALL
BE DULY HONORED UPON PRESENTATION TO SILICON VALLEY BANK, IF PRESENTED ON OR
BEFORE THE CURRENT EXPIRATION DATE OF THIS LETTER OF CREDIT.

PAYMENT AGAINST CONFORMING PRESENTATIONS HEREUNDER PRESENTED PRIOR TO 10:00 A.M.
CALIFORNIA TIME SHALL BE MADE BY BANK DURING NORMAL BUSINESS HOURS OF THE BANK’S
OFFICE WITHIN TWO (2) BUSINESS DAYS AFTER PRESENTATION.

IF ANY INSTRUCTIONS ACCOMPANYING A DRAWING UNDER THIS LETTER OF CREDIT REQUEST
THAT PAYMENT IS TO BE MADE BY TRANSFER TO YOUR ACCOUNT WITH ANOTHER BANK, WE
WILL ONLY EFFECT SUCH PAYMENT BY FED WIRE TO A U.S. REGULATED BANK, AND WE
AND/OR SUCH OTHER BANK MAY RELY ON AN ACCOUNT NUMBER SPECIFIED IN SUCH
INSTRUCTIONS EVEN IF THE NUMBER IDENTIFIES A PERSON OR ENTITY DIFFERENT FROM THE
INTENDED PAYEE.

EXCEPT SO FAR AS OTHERWISE EXPRESSLY STATED HEREIN, THIS LETTER OF CREDIT IS
SUBJECT TO THE INTERNATIONAL STANDBY PRACTICE ISP98, INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 590.

 

SILICON VALLEY BANK,    

 

   

 

(FOR BANK USE ONLY)     (FOR BANK USE ONLY)

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

G-3

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EXHIBIT “A”

SIGHT DRAFT/BILL OF EXCHANGE

 

DATE:                

 

REF. NO.             

AT SIGHT OF THIS BILL OF EXCHANGE

PAY TO THE ORDER OF                                             

 US$                                 

        U.S.DOLLARS

“DRAWN UNDER SILICON VALLEY BANK, SANTA CLARA, CALIFORNIA, IRREVOCABLE STANDBY
LETTER OF CREDIT NUMBER NO. SVBSF            DATED             , 20    ”

 

TO:    SILICON VALLEY BANK          

 

       

        3003 TASMAN DRIVE

        SANTA CLARA, CA 95054

   [INSERT NAME OF BENEFICIARY]      

 

     

Authorized Signature

 

GUIDELINES TO PREPARE THE SIGHT DRAFT OR BILL OF EXCHANGE:

 

1. DATE             INSERT ISSUANCE DATE OF DRAFT OR BILL OF EXCHANGE.

 

2. REF. NO.     INSERT YOUR REFERENCE NUMBER IF ANY.

 

3. PAY TO THE ORDER OF:     INSERT NAME OF BENEFICIARY

 

4. US$             INSERT AMOUNT OF DRAWING IN NUMERALS/FIGURES.

 

5. U.S. DOLLARS             INSERT AMOUNT OF DRAWING IN WORDS.

 

6. LETTER OF CREDIT NUMBER INSERT THE LAST DIGITS OF OUR STANDBY L/C NUMBER THAT
PERTAINS TO THE DRAWING.

 

7. DATED             INSERT THE ISSUANCE DATE OF OUR STANDBY L/C.

NOTE: BENEFICIARY SHOULD ENDORSE THE BACK OF THE SIGHT DRAFT OR BILL OF EXCHANGE
AS YOU WOULD A CHECK (THIS MAY BE DONE VIA FACSIMILE AS PERMITTED BY THE STANDBY
L/C).

IF YOU NEED FURTHER ASSISTANCE IN COMPLETING THIS SIGHT DRAFT OR BILL OF
EXCHANGE, PLEASE CALL OUR L/C PAYMENT SECTION AND ASK FOR: JOHN DOSSANTOS AT
(408) 654-6274 OR ENRICO NICOLAS AT (408) 654-7127 OR EVELIO BARAIRO AT
(408) 654-3035 .

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

G-80

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EXHIBIT “B”

DATE:

 

TO:   SILICON VALLEY BANK       3003 TASMAN DRIVE   RE:   IRREVOCABLE STANDBY
LETTER OF CREDIT   SANTA CLARA, CA 95054     NO.                             
                        ISSUED BY   ATTN:   INTERNATIONAL DIVISION.     SILICON
VALLEY BANK, SANTA CLARA     STANDBY LETTERS OF CREDIT     L/C AMOUNT:

GENTLEMEN:

FOR VALUE RECEIVED, THE UNDERSIGNED BENEFICIARY HEREBY IRREVOCABLY TRANSFERS TO:

(NAME OF TRANSFEREE)

(ADDRESS)

ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY TO DRAW UNDER THE ABOVE LETTER OF
CREDIT UP TO ITS AVAILABLE AMOUNT AS SHOWN ABOVE AS OF THE DATE OF THIS
TRANSFER.

BY THIS TRANSFER, ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY IN SUCH LETTER OF
CREDIT ARE TRANSFERRED TO THE TRANSFEREE. TRANSFEREE SHALL HAVE THE SOLE RIGHTS
AS BENEFICIARY THEREOF, INCLUDING SOLE RIGHTS RELATING TO ANY AMENDMENTS,
WHETHER INCREASES OR EXTENSIONS OR OTHER AMENDMENTS, AND WHETHER NOW EXISTING OR
HEREAFTER MADE. ALL AMENDMENTS ARE TO BE ADVISED DIRECT TO THE TRANSFEREE
WITHOUT NECESSITY OF ANY CONSENT OF OR NOTICE TO THE UNDERSIGNED BENEFICIARY.

THE ORIGINAL OF SUCH LETTER OF CREDIT IS RETURNED HEREWITH, AND WE ASK YOU TO
ENDORSE THE TRANSFER ON THE REVERSE THEREOF, AND FORWARD IT DIRECTLY TO THE
TRANSFEREE WITH YOUR CUSTOMARY NOTICE OF TRANSFER.

 

SINCERELY,     SIGNATURE AUTHENTICATED  

 

    The name(s), title(s), and signature(s) conform to that/those on file with
us for the company and the signature(s) is/are authorized to execute this
instrument. We further confirm that the company has been identified applying the
appropriate due diligence and enhanced due diligence as required by BSA and all
its subsequent amendments. (BENEFICIARY’S NAME)    

 

    (SIGNATURE OF BENEFICIARY)    

 

    (NAME AND TITLE)        

 

    (Name of Bank)    

 

    (Address of Bank)    

 

    (City, State, ZIP Code)    

 

    (Authorized Name and Title)    

 

    (Authorized Signature)    

 

   

(Telephone number)

 

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

G-1

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EXHIBIT “H”

THE WATER GARDEN

“AVAILABLE SPACE” EXCLUSIONS

AS OF THE LEASE DATE

LOGO [g284832img003.jpg]

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

H-1

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EXHIBIT “I”

THE WATER GARDEN

FORM OF ROOFTOP AREA LICENSE AGREEMENT (ANTENNA)

This ROOFTOP AREA LICENSE AGREEMENT (this “Agreement”) is entered into as of
            , 20     by and between WATER GARDEN REALTY HOLDING LLC, a Delaware
limited liability company (“Landlord”), and CORNERSTONE ONDEMAND, INC., a
Delaware corporation (“Tenant”).

R E C I T A L S :

This Agreement is made with regard to the following facts:

A. Landlord and Tenant are parties to that certain Office Lease dated as of
November     , 2011 (the “Lease”), for Premises in an office complex located in
Santa Monica, California, commonly known as Phase II of The Water Garden.
Capitalized terms not otherwise defined herein have the meanings set forth in
the Lease.

B. In connection with the Lease, Tenant desires to use an area located on the
roof of the Building for the purpose of constructing, installing, operating,
repairing, replacing (subject to Section 3 of this Agreement) and maintaining
one satellite/telecommunications dish up to twenty-four (24) inches in diameter
(or the diameter of a standard DirectTV dish) as described in Schedule 1
attached hereto (the “Antenna”). Landlord has agreed to permit Tenant to use
those areas and to construct, install, operate, repair, replace, and maintain
the Antenna at Tenant’s sole cost and expense.

A G R E E M E N T :

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

1. License of Rooftop Area.

1.1 Designation. Landlord has designated an area on the roof of the Building as
shown on Exhibit “A” attached hereto (the “Rooftop Area”) that Tenant may use
for the purpose of constructing, installing, operating, repairing, replacing
(subject to Section 3 of this Agreement), and maintaining the Antenna.

1.2 Notice of Exercise. Tenant may exercise its right to use the Rooftop Area
upon five (5) business days’ prior written notice delivered to Landlord (the
“Notice of Exercise”). The terms of this Agreement shall be effective upon the
date of this Agreement and shall continue in effect until the expiration or
earlier termination of this Agreement as set forth in Section 1.3.

1.3 License to use the Rooftop Area; Term; Exclusive Use. Five (5) business days
following the delivery of the Notice of Exercise, Tenant’s license to use the
Rooftop Area to construct, install, operate, repair, replace (subject to
Section 3 of this Agreement) and maintain the Antenna shall commence and shall
continue until the earlier of (i) the expiration or earlier termination of the
initial term of the Lease, (ii) any termination of this Agreement required by
law, governmental authority or quasi-governmental authority, or (iii) the
effective date set forth in a written notice from Tenant to Landlord electing to
terminate this Agreement (which such effective date must be at least thirty
(30) days after the date of such written notice). Subject to the rights of
Landlord to maintain, operate and repair the Building, Tenant shall have the
exclusive right to use the Rooftop Area. Landlord shall have the right to use,
and to grant to third parties the right to use, the Building riser system, and
portions of the roof of the Building, other than the Rooftop Area.

1.4 Access to Antenna. During the term of this Agreement, Tenant, its agents,
employees and contractors, will have the right of access to the Antenna and the
Rooftop Area, upon at least one (1) business day’s prior written notice to
Landlord. In the event of an emergency, Tenant shall notify Landlord of such
emergency and, thereafter, Landlord shall use its commercially reasonable
efforts to respond to the access needs of Tenant.

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

I-1

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1.5 Ownership and Removal of Antenna. The Antenna shall at all times remain the
property of Tenant. Tenant shall have the right to remove the Antenna, or any
part thereof, at any reasonable time upon at least three (3) days’ prior written
notice to Landlord; provided that in the event of an emergency, Landlord shall
use its commercially reasonable efforts to allow Tenant to remove such Antenna
upon less notice. On or before the expiration or earlier termination of this
Agreement, Tenant will remove, at its own cost and expense, the Antenna and all
related facilities on the Rooftop Area (specifically including, but not limited
to, any fencing and barriers securing the Antenna, and any connections installed
by or on behalf of Tenant), and return the Rooftop Area to its condition
existing prior to Tenant’s installation of the Antenna (except for normal wear
and tear). If Tenant fails to complete such removal or fails to repair any
damage caused by such removal, Landlord may complete such removal and repair
such damage and charge the cost thereof to Tenant, which amounts shall be
immediately payable by Tenant.

1.6 Leaks. Without limiting any other provision of this Agreement, Tenant hereby
agrees that it shall be solely responsible for, and in accordance with the
provisions of Section 5 agrees to indemnify, defend, protect, and hold Landlord
and the “Landlord Parties” (as that term is defined in Article 10 of the Lease)
harmless from, any leaks which occur in the roof or roof membrane at or adjacent
to the Rooftop Area caused by the installation, maintenance or removal of the
Antenna by Tenant.

2. Rent. From and after the date of the Notice of Exercise through the initial
Lease Term under the Lease or the earlier termination of this Agreement, Tenant
shall pay for the use of the Rooftop Area a base rent of $500 per month, in
advance in immediately available funds. In addition to the base rent, Tenant
shall pay, as Additional Rent, all actual out of pocket costs incurred by
Landlord solely for Tenant’s use of Building utilities in connection with the
Antenna, including, without limitation, the cost of any electricity, water, gas,
or other utilities or services to the Rooftop Area and any new metering that may
be necessary to account therefor. In conjunction therewith, Tenant will be
billed monthly for electricity consumption in accordance with Section 6.2 of the
Lease. In addition, Tenant shall directly pay for all costs in connection with
the construction, installation, operation, maintenance, repair, replacement, and
insurance of the Antenna.

3. Installation, Maintenance and Operation of Antenna.

3.1 Approvals and Permits. During the term of this Agreement and subject to the
terms of Section 3.2, below, Tenant may install and operate the Antenna (and
install all equipment ancillary to and necessary for the operation of the
Antenna) in the Rooftop Area, in the location as indicated on Schedule 1 for the
Antenna, provided that: (a) Tenant has obtained Landlord’s prior written
approval, which approval shall be in Landlord’s reasonable discretion, of the
plans and specifications for the Antenna and all working drawings for the
installation of the Antenna, (b) Tenant has obtained all required permits and
governmental or quasi-governmental approvals (including satisfying any
applicable Federal Communications Commission and Federal Aviation Administration
requirements) to install and operate the Antenna, and (c) Tenant complies with
all applicable governmental and quasi-governmental laws, regulations and
building codes in connection with the Rooftop Area and the Antenna. Landlord
shall have the right to condition its approval of the Antenna proposed to be
installed by Tenant on Tenant, among other things, erecting fencing or other
barriers to secure such device. With regard to Tenant obtaining all required
permits and approvals set forth in Section 3.1(b) above, Landlord shall
reasonably cooperate, at Tenant’s sole cost, with Tenant; provided, however,
that Landlord shall not be responsible for any such approvals. Once Landlord has
given its requisite approval, Tenant may not materially alter or modify the
working drawings, or the actual installation of the Antenna without Landlord’s
prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed.

3.2 Compatibility with Building Systems and Operations. The Antenna shall be
compatible with the Building systems and equipment and the antennae and other
telecommunications devices of Landlord and other tenants located in the Project,
and shall not impair window washing or the use of chiller units, the cooling
tower, the emergency generator, elevators, machine rooms, helipads, ventilation
shafts, if any, or any other parts of the Building. If the installation,
maintenance, repair, operation or removal of the Antenna requires any changes or
modifications to any structural systems or components of the Building or any of
the

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

I-2

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Building’s systems or equipment, Landlord shall have the right to either
(i) perform such changes or modifications and Tenant shall pay for the actual
costs thereof upon demand or (ii) require Tenant to perform such changes or
modifications at Tenant’s sole cost and expense. If required by Landlord, in its
reasonable discretion, or any governmental agency or authority, Tenant shall
fully secure the Rooftop Area with suitable fencing or other required enclosures
(including enclosures that shield the visibility of the Rooftop without
impairing their operation and maintenance), subject to the terms of Section 3.1,
above. Landlord shall have the right to post notices of non-responsibility in
connection with any work performed by Tenant or its agents or contractors in
connection with this Agreement. The terms and conditions of Articles 8 and 9 of
the Lease shall specifically be applicable in connection with any work performed
by Tenant or its agents or contractors in connection with the Antenna or this
Agreement.

4. Use of Rooftop Area. Tenant shall have the right to use the Building
electricity located on the roof of the Building for the operation of the Antenna
and ancillary equipment installed by Tenant. Tenant will not store any materials
in the Rooftop Area. Tenant will use the Rooftop Area solely for the Antenna and
ancillary equipment and to run all necessary cabling and wires to the Antenna
(through conduits or in areas designated by Landlord).and not for any other
purpose. Landlord and its agents may enter and inspect the Rooftop Area at any
time upon reasonable prior notice to Tenant. Concurrently with Tenant’s
installation of any locks for the Rooftop Area, Tenant will deliver to Landlord
a key for any such lock. Tenant will not interfere with the mechanical,
electrical, heating, ventilation and air conditioning, or plumbing systems of
the Building or the operation, reception, or transmission of any other
satellite, microwave, or other broadcasting or receiving devices that are, or
will be, located on the roof of, or in, the Building.

5. Indemnification and Insurance. Tenant agrees and acknowledges that it shall
use the Rooftop Area at its sole risk, and Tenant absolves and fully releases
Landlord and Landlord Parties, from (i) any and all cost, loss, damage, expense,
liability, and cause of action, whether foreseeable or not, arising from any
cause, that Tenant may suffer to its personal property located in the Rooftop
Area, or (ii) that Tenant or Tenant’s officers, agents, employees, or
independent contractors Landlord or the Landlord Parties may suffer as a direct
or indirect consequence of Tenant’s use of the Rooftop Area, the Antenna or
access areas to the Rooftop Area, or (iii) any other cost, loss, damage,
expense, liability, or cause of action arising from or related to this
Agreement, excluding that caused by the negligence or willful misconduct of
Landlord or the Landlord Parties or Landlord’s default under the Lease. In
addition, Tenant agrees to indemnify, defend, protect, and hold Landlord and the
Landlord Parties harmless from and against any loss, cost, damage, liability,
expense, claim, action or cause of action of any third party (including, but not
limited to, reasonable attorneys’ fees and costs, and, if Landlord requires the
removal of the Antenna at the end of the term of this Agreement, any leaks in
the roof or roof membrane following Tenant’s removal of the Antenna and any
other rooftop equipment), whether foreseeable or not, resulting as a direct or
indirect consequence of Tenant’s use of the Rooftop Area, the Antenna or access
areas to the Rooftop Area, except when such cost, loss, damage, expense, or
liability is due to the negligence or willful misconduct of Landlord or
Landlord’s default under the Lease. In addition, Tenant will procure and
maintain, at Tenant’s sole expense, insurance in connection with the Rooftop
Area, the Antenna and the obligations assumed by Tenant under this Agreement, in
the same amounts and with the same types of coverage as required to be procured
by Tenant under the Lease.

6. Defaults. If Tenant fails to cure the breach of any of the covenants set
forth in this Agreement within ten (10) business days following notice from
Landlord, Landlord shall have the right to terminate this Agreement upon written
notice to Tenant. In addition, at the option of Landlord, breach of any of the
covenants under this Agreement by Tenant beyond the above-referenced notice and
cure period will also constitute a Default by Tenant under the Lease, and a
Default by Tenant under the Lease (beyond applicable notice and cure periods)
will also constitute a Default by Tenant under this Agreement (in which event
Landlord may terminate this Agreement upon notice to Tenant).

7. Notices. Any notice required or permitted to be given under this Agreement by
Tenant or Landlord will be given under the terms of Section 29.13 of the Lease.

8. Incorporation of Lease Provisions. All applicable provisions of the Lease
apply to Tenant’s payment of amounts pursuant to this Agreement, and the use of
the Rooftop Area in

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

I-3

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the same manner as those provisions apply to the Premises and are incorporated
into this Agreement by this reference as though fully set forth in this
Agreement. In the event of any conflicts between the provisions of this
Agreement and the Lease, in connection with the interpretation of this Agreement
only, the provisions of this Agreement shall govern.

9. No Warranty. Landlord has made no warranty or representation that the Antenna
is permitted by law and Tenant assumes all liability and risk in obtaining all
permits and approvals necessary for the installation and use of the Antenna.
Landlord does not warrant or guaranty that Tenant will receive unobstructed
transmission or reception to or from the Antenna and Tenant assumes the
liability for the transmission and reception to and from the Antenna.

10. Assignment. Notwithstanding any contrary provision set forth in this
Agreement, this Agreement, and Tenant’s rights contained herein, may not be
transferred or assigned to any other person or entity, and no person or entity
other than Tenant and its employees shall be entitled to use the Antenna or the
Rooftop Area; provided however, the rights hereunder may be transferred or
assigned to a Related Transferee or any other permitted Transferee under
Article 14 of the Lease in conjunction with an assignment or sublease of all of
the Premises for all or substantially all of the remainder of the term of the
Lease.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

LANDLORD: WATER GARDEN REALTY HOLDING LLC, a Delaware limited liability company
By:   Commingled Pension Trust Fund (Strategic  

Property) of JPMorgan Chase Bank, N.A.,

a Member

  By:  

JPMorgan Chase Bank, N.A.,

as Trustee

    By:  

 

     

Karen Wilbrecht

Executive Director

  Date Signed:                                                                  
                        “Tenant”:

CORNERSTONE ON DEMAND, INC.,

a Delaware corporation

By:

 

 

Its:  

 

Date Signed:  

 

 

 

By:  

 

Its:  

 

Date Signed:  

 

 

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

I-4

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SCHEDULE 1

ANTENNAE

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

Schedule 1-1

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

EXHIBIT “A”

ROOFTOP AREA

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

EXHIBIT “J”

THE WATER GARDEN

FORM OF ROOFTOP AREA LICENSE AGREEMENT

(SUPPLEMENTAL HVAC EQUIPMENT)

This ROOFTOP AREA LICENSE AGREEMENT (this “Agreement”) is entered into as of
            , 20    by and between WATER GARDEN REALTY HOLDING LLC, a Delaware
limited liability company (“Landlord”), and CORNERSTONE ONDEMAND, INC., a
Delaware corporation (“Tenant”).

R E C I T A L S :

This Agreement is made with regard to the following facts:

A. Landlord and Tenant are parties to that certain Office Lease dated as of
November             , 2011 (the “Lease”), for Premises in an office complex
located in Santa Monica, California, commonly known as Phase II of The Water
Garden. Capitalized terms not otherwise defined herein have the meanings set
forth in the Lease.

B. In connection with the Lease, Tenant desires to use an area located on the
roof of the Building for the purpose of constructing, installing, operating,
repairing, replacing (subject to Section 3 of this Agreement) and maintaining
condensing units, the exhaust fans and all the horizontal/vertical riser pipes
and conduits connecting the condensing units and exhaust fans to the Premises,
as depicted on Schedule 1 attached hereto (collectively, the “Equipment”).
Landlord has agreed to permit Tenant to use those areas and to construct,
install, operate, repair, replace, and maintain the Equipment at Tenant’s sole
cost and expense.

A G R E E M E N T :

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

1. License of Rooftop Area.

1.1 Designation. Landlord has designated an area on the roof of the Building as
shown on Exhibit “A” attached hereto (the “Rooftop Area”) that Tenant may use
for the purpose of constructing, installing, operating, repairing, replacing
(subject to Section 3 of this Agreement), and maintaining the Equipment.

1.2 Notice of Exercise. Tenant may exercise its right to use the Rooftop Area
upon five (5) business days’ prior written notice delivered to Landlord (the
“Notice of Exercise”). The terms of this Agreement shall be effective upon the
date of this Agreement and shall continue in effect until the expiration or
earlier termination of this Agreement as set forth in Section 1.3.

1.3 License to use the Rooftop Area; Term; Exclusive Use. Five (5) business days
following the delivery of the Notice of Exercise, Tenant’s license to use the
Rooftop Area to construct, install, operate, repair, replace (subject to
Section 3 of this Agreement) and maintain the Equipment shall commence and shall
continue until the earlier of (i) the expiration or earlier termination of the
initial term of the Lease, (ii) any termination of this Agreement required by
law, governmental authority or quasi-governmental authority, or (iii) the
effective date set forth in a written notice from Tenant to Landlord electing to
terminate this Agreement (which such effective date must be at least thirty
(30) days after the date of such written notice). Subject to the rights of
Landlord to maintain, operate and repair the Building, Tenant shall have the
exclusive right to use the Rooftop Area. Landlord shall have the right to use,
and to grant to third parties the right to use, the Building riser system, and
portions of the roof of the Building, other than the Rooftop Area.

1.4 Access to Equipment. During the term of this Agreement, Tenant, its agents,
employees and contractors, will have the right of access to the Equipment and
the Rooftop Area, upon at least one (1) business day’s prior written notice to
Landlord. In the event of an emergency, Tenant shall notify Landlord of such
emergency and, thereafter, Landlord shall use its commercially reasonable
efforts to respond to the access needs of Tenant.

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

J-1

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1.5 Ownership and Removal of Equipment. The Equipment shall at all times remain
the property of Tenant. Tenant shall have the right to remove the Equipment, or
any part thereof, at any reasonable time upon at least three (3) days’ prior
written notice to Landlord; provided that in the event of an emergency, Landlord
shall use its commercially reasonable efforts to allow Tenant to remove such
Equipment upon less notice. On or before the expiration or earlier termination
of this Agreement, Tenant will remove, at its own cost and expense, the
Equipment and all related facilities on the Rooftop Area (specifically
including, but not limited to, any fencing and barriers securing the Equipment,
and any connections installed by or on behalf of Tenant), and return the Rooftop
Area to its condition existing prior to Tenant’s installation of the Equipment
(except for normal wear and tear). If Tenant fails to complete such removal or
fails to repair any damage caused by such removal, Landlord may complete such
removal and repair such damage and charge the cost thereof to Tenant, which
amounts shall be immediately payable by Tenant.

1.6 Leaks. Without limiting any other provision of this Agreement, Tenant hereby
agrees that it shall be solely responsible for, and in accordance with the
provisions of Section 5 agrees to indemnify, defend, protect, and hold Landlord
and the “Landlord Parties” (as that term is defined in Article 10 of the Lease)
harmless from, any leaks which occur in the roof or roof membrane at or adjacent
to the Rooftop Area caused by the installation, maintenance or removal of the
Equipment by Tenant.

2. Rent. From and after the date of the Notice of Exercise through the initial
Lease Term under the Lease or the earlier termination of this Agreement, Tenant
shall pay for the use of the Rooftop Area a base rent (the “Base Rent”) of $500
per month in advance in immediately available funds. In addition to Base Rent,
Tenant shall pay, as Additional Rent, all actual out of pocket costs incurred by
Landlord solely for Tenant’s use of Building utilities in connection with the
Equipment, including, without limitation, the cost of any electricity, water,
gas, or other utilities or services to the Rooftop Area and any new metering
that may be necessary to account therefor. In conjunction therewith, Tenant will
be billed monthly for electricity consumption in accordance with the Lease. In
addition, Tenant shall directly pay for all costs in connection with the
construction, installation, operation, maintenance, repair, replacement, and
insurance of the Equipment.

3. Installation, Maintenance and Operation of Equipment.

3.1 Approvals and Permits. During the term of this Agreement and subject to the
terms of Section 3.2, below, Tenant may install and operate the Equipment (and
install all equipment ancillary to and necessary for the operation of the
Equipment) in the Rooftop Area, in the location as indicated on Schedule 1 for
the Equipment, provided that: (a) Tenant has obtained Landlord’s prior written
approval, which approval shall be in Landlord’s reasonable discretion, of the
plans and specifications for the Equipment and all working drawings for the
installation of the Equipment, (b) Tenant has obtained all required permits and
governmental or quasi-governmental approvals (including satisfying any
applicable Federal Communications Commission and Federal Aviation Administration
requirements) to install and operate the Equipment, and (c) Tenant complies with
all applicable governmental and quasi-governmental laws, regulations and
building codes in connection with the Rooftop Area and the Equipment. Landlord
shall have the right to condition its approval of the Equipment proposed to be
installed by Tenant on Tenant, among other things, erecting fencing or other
barriers to secure such device. With regard to Tenant obtaining all required
permits and approvals set forth in Section 3.1(b) above, Landlord shall
reasonably cooperate, at Tenant’s sole cost, with Tenant; provided, however,
that Landlord shall not be responsible for any such approvals. Once Landlord has
given its requisite approval, Tenant may not materially alter or modify the
working drawings, or the actual installation of the Equipment without Landlord’s
prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed.

3.2 Compatibility with Building Systems and Operations. The Equipment shall be
compatible with the Building systems and equipment and the antennae and other
telecommunications devices of Landlord and other tenants located in the Project,
and shall not impair window washing or the use of chiller units, the cooling
tower, the emergency generator, elevators, machine rooms, helipads, ventilation
shafts, if any, or any other parts of the Building. If the installation,
maintenance, repair, operation or removal of the Equipment requires any changes
or modifications to any structural systems or components of the Building or any
of the Building’s systems or equipment, Landlord shall have the right to either
(i) perform such changes or modifications and Tenant shall pay for the actual
costs thereof upon demand or (ii) require Tenant to perform such changes or
modifications at Tenant’s sole cost and expense. If required by Landlord,

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

J-2

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

in its reasonable discretion, or any governmental agency or authority, Tenant
shall fully secure the Rooftop Area with suitable fencing or other required
enclosures (including enclosures that shield the visibility of the Rooftop
without impairing their operation and maintenance), subject to the terms of
Section 3.1, above. Landlord shall have the right to post notices of
non-responsibility in connection with any work performed by Tenant or its agents
or contractors in connection with this Agreement. The terms and conditions of
Articles 8 and 9 of the Lease shall specifically be applicable in connection
with any work performed by Tenant or its agents or contractors in connection
with the Equipment or this Agreement.

4. Use of Rooftop Area. Tenant shall have the right to use the Building
electricity located on the roof of the Building for the operation of the
Equipment and ancillary equipment installed by Tenant. Tenant will not store any
materials in the Rooftop Area. Tenant will use the Rooftop Area solely for the
Equipment and ancillary equipment and to run all necessary cabling and wires to
the Equipment (through conduits or in areas designated by Landlord) and not for
any other purpose. Landlord and its agents may enter and inspect the Rooftop
Area at any time upon reasonable prior notice to Tenant. Concurrently with
Tenant’s installation of any locks for the Rooftop Area, Tenant will deliver to
Landlord a key for any such lock. Tenant will not interfere with the mechanical,
electrical, heating, ventilation and air conditioning, or plumbing systems of
the Building or the operation, reception, or transmission of any other
satellite, microwave, or other broadcasting or receiving devices that are, or
will be, located on the roof of, or in, the Building.

5. Indemnification and Insurance. Tenant agrees and acknowledges that it shall
use the Rooftop Area at its sole risk, and Tenant absolves and fully releases
Landlord and Landlord Parties, from (i) any and all cost, loss, damage, expense,
liability, and cause of action, whether foreseeable or not, arising from any
cause, that Tenant may suffer to its personal property located in the Rooftop
Area, or (ii) that Tenant or Tenant’s officers, agents, employees, or
independent contractors Landlord or the Landlord Parties may suffer as a direct
or indirect consequence of Tenant’s use of the Rooftop Area, the Equipment or
access areas to the Rooftop Area, or (iii) any other cost, loss, damage,
expense, liability, or cause of action arising from or related to this
Agreement, excluding that caused by the negligence or willful misconduct of
Landlord or the Landlord Parties or Landlord’s default under the Lease. In
addition, Tenant agrees to indemnify, defend, protect, and hold Landlord and the
Landlord Parties harmless from and against any loss, cost, damage, liability,
expense, claim, action or cause of action of any third party (including, but not
limited to, reasonable attorneys’ fees and costs, and, if Landlord requires the
removal of the Equipment at the end of the term of this Agreement, any leaks in
the roof or roof membrane following Tenant’s removal of the Equipment and any
other rooftop equipment), whether foreseeable or not, resulting as a direct or
indirect consequence of Tenant’s use of the Rooftop Area, the Equipment or
access areas to the Rooftop Area, except when such cost, loss, damage, expense,
or liability is due to the negligence or willful misconduct of Landlord or
Landlord’s default under the Lease. In addition, Tenant will procure and
maintain, at Tenant’s sole expense, insurance in connection with the Rooftop
Area, the Equipment and the obligations assumed by Tenant under this Agreement,
in the same amounts and with the same types of coverage as required to be
procured by Tenant under the Lease.

6. Defaults. If Tenant fails to cure the breach of any of the covenants set
forth in this Agreement within ten (10) business days following notice from
Landlord, Landlord shall have the right to terminate this Agreement upon written
notice to Tenant. In addition, at the option of Landlord, breach of any of the
covenants under this Agreement by Tenant beyond the above-referenced notice and
cure period will also constitute a Default by Tenant under the Lease, and a
Default by Tenant under the Lease (beyond applicable notice and cure periods)
will also constitute a Default by Tenant under this Agreement (in which event
Landlord may terminate this Agreement upon notice to Tenant).

7. Notices. Any notice required or permitted to be given under this Agreement by
Tenant or Landlord will be given under the terms of Section 29.13 of the Lease.

8. Incorporation of Lease Provisions. All applicable provisions of the Lease
apply to Tenant’s payment of amounts pursuant to this Agreement, and the use of
the Rooftop Area in the same manner as those provisions apply to the Premises
and are incorporated into this Agreement by this reference as though fully set
forth in this Agreement. In the event of any conflicts between the provisions of
this Agreement and the Lease, in connection with the interpretation of this
Agreement only, the provisions of this Agreement shall govern.

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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9. No Warranty. Landlord has made no warranty or representation that the
Equipment is permitted by law and Tenant assumes all liability and risk in
obtaining all permits and approvals necessary for the installation and use of
the Equipment. Landlord does not warrant or guaranty that Tenant will receive
unobstructed transmission or reception to or from the Equipment and Tenant
assumes the liability for the transmission and reception to and from the
Equipment.

10. Assignment. Notwithstanding any contrary provision set forth in this
Agreement, this Agreement, and Tenant’s rights contained herein, may not be
transferred or assigned to any other person or entity, and no person or entity
other than Tenant and its employees shall be entitled to use the Equipment or
the Rooftop Area; provided however, the rights hereunder may be transferred or
assigned to a Related Transferee or any other permitted Transferee under
Article 14 of the Lease in conjunction with an assignment or sublease of all of
the Premises for all or substantially all of the remainder of the term of the
Lease.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

“Landlord”: WATER GARDEN REALTY HOLDING LLC, a Delaware limited liability
company By:   Commingled Pension Trust Fund (Strategic Property) of JPMorgan
Chase Bank, N.A., a Member   By:  

JPMorgan Chase Bank, N.A.,

as Trustee

    By:  

 

      Karen Wilbrecht       Executive Director

 

“Tenant”:

CORNERSTONE ON DEMAND, INC.,

a Delaware corporation

By:

 

 

Its:

 

 

Date Signed:

 

 

By:

 

 

Its:  

 

Date Signed:

 

 

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

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SCHEDULE 1

EQUIPMENT

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

J-5

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EXHIBIT “A”

ROOFTOP AREA

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

J-6

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EXHIBIT “K”

THE WATER GARDEN

MONUMENT SIGNAGE

LOGO [g284832img004.jpg]

 

THE WATER GARDEN

Cornerstone OnDemand, Inc.

 

K-1