exv10w3



 




Exhibit 10.3



OFFICE AND INDUSTRIAL/COMMERCIAL LEASE




THIS OFFICE AND INDUSTRIAL/COMMERCIAL LEASE (“Lease”) is entered into as of June ___, 2005, by and
between Stafford Office Park DST, a Delaware statutory trust (“Landlord”), and INPUT-OUTPUT, INC.,
a Delaware corporation (“Tenant”).



1. BASIC LEASE TERMS. For purposes of this Lease, the following terms have the following
definitions and meanings:



(a) Landlord: Stafford Office Park DST, a Delaware statutory trust



(b) Landlord’s Address (For Notices): c/o Titan Real Estate Investment Group, Inc., 12121 Wilshire
Blvd., Suite 200, Los Angeles, California 90025 or such other place as Landlord may from time to
time designate by written notice to Tenant.



(c) Tenant: INPUT-OUTPUT, INC., a Delaware corporation.



(d) Tenant’s Address (For Notices): INPUT-OUTPUT, INC., 12300 Parc Crest Drive, Stafford, Texas
77477, or such other place as Tenant may from time to time designate by written notice to Landlord.



(e) Intentionally Deleted



(f) Intentionally Deleted



(g) Premises: The real property located at 12300 Parc Crest Drive (“Building Two”), and 12400
Parc Crest Drive (“Building Three”), Stafford, Fort Bend County, Texas, located on that certain
property described in Exhibit A-1 (the “Property”) as shown on the site plan attached hereto as
Exhibit “A” (the “Development”), together with all buildings, improvements and facilities, now or
subsequently located on the Property from time to time, including, without limitation, Building
Two and Building Three containing approximately 189,566 rentable square feet (collectively, the
“Premises”). Building Two contains approximately 79,566 rental square feet and Building Three
contains approximately 110,000 rentable square feet.



(h) Intentionally omitted.



(i) Term: Twelve (12) Lease Years.



(j) Commencement Date: June ___, 2005.



     Expiration Date: June 30, 2017.



(k) Monthly Base Rent: The Monthly Base Rent will be as set forth below, with each “Lease Year”
being the period beginning on the Commencement Date (or the anniversary thereof) and ending on the
day preceding the next anniversary of the Commencement Date and the Monthly Base Rent being the
amount calculated by multiplying the applicable yearly Rental Rate by 189,566 square feet and
dividing by twelve, as set forth in the table below:



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	Year 1
	 	$8.89/RSF/Year	 	$	140,361.29
	 
	 	 	 	 	 	 	 
	Year 2
	 	$9.13/RSF/Year	 	$	144,247.40
	 
	 	 	 	 	 	 	 
	Year 3
	 	$9.38/RSF/Year	 	$	148,250.08
	 
	 	 	 	 	 	 	 
	Year 4
	 	$9.65/RSF/Year	 	$	152,372.85
	 
	 	 	 	 	 	 	 
	Year 5
	 	$9.91/RSF/Year	 	$	156,619.30
	 
	 	 	 	 	 	 	 
	Year 6
	 	$10.19/RSF/Year	 	$	160,993.14
	 
	 	 	 	 	 	 	 
	Year 7
	 	$10.48/RSF/Year	 	$	165,498.20
	 
	 	 	 	 	 	 	 
	Year 8
	 	$10.77/RSF/Year	 	$	170,138.41
	 
	 	 	 	 	 	 	 
	Year 9
	 	$11.07/RSF/Year	 	$	174,917.63
	 
	 	 	 	 	 	 	 
	Year 10
	 	$11.38/RSF/Year	 	$	179,840.63
	 
	 	 	 	 	 	 	 
	Year 11
	 	$11.71/RSF/Year	 	$	184,911.11
	 
	 	 	 	 	 	 	 
	Year 12
	 	$12.04/RSF/Year	 	$	190,133.71






	 	 	 
	Renewal Term (if any): Year 13

through Expiration Date

	 	Fair Market Value Rental (as hereinafter
defined) as determined 
pursuant to Paragraph 3.1(b) of this Lease






(l) Security Deposit: No Security Deposit at lease signing subject to conditions and
adjustments as set forth in Paragraph 7 below.



(m) Tenant Improvements: None. Tenant agrees to accept the Buildings “AS IS, WHERE IS, AND WITH
ALL FAULTS” as further provided in Paragraph 4 below.



(n) Tenant Improvement Allowance: None.



(o) Permitted Use: General office, light manufacturing and incidental uses, and assembly and any
other legal use allowed under current City zoning or other applicable law, as same may be amended
from time to time.



(p) Intentionally Deleted



(q) Broker(s): Studley, Inc., representing Tenant



(r) Intentionally Deleted



(s) Interest Rate: Shall mean four percent (4%) in excess of the prime lending or reference rate
of Bank of America, N.A., or any successor bank in effect on the twenty-fifth (25th) day
of the calendar month immediately prior to the event giving rise to the Interest Rate imposition;
provided, however, the Interest Rate will in no event exceed the maximum interest rate permitted to
be charged by applicable law.



(t) Exhibits: A through D, inclusive, which Exhibits are attached to this Lease and incorporated
herein by this reference.



This Paragraph 1 represents a summary of the basic terms and definitions of this Lease. In the
event of any inconsistency between the terms contained in this Paragraph 1 and any specific
provision of this Lease, the terms of the more specific provision shall prevail.



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2. PREMISES.




(a) Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
Premises.



(b) Mutual Covenants. Landlord and Tenant agree that the letting and hiring of the Premises is
upon and subject to the terms, covenants and conditions contained in this Lease and each party
covenants as a material part of the consideration for this Lease to keep and perform their
respective obligations under this Lease.



3.0 TERM. Initial Term. The term of this Lease will be for the period designated in Subparagraph
1(i), commencing on the Commencement Date, and ending on the Expiration Date (“Initial Term”).
Each consecutive twelve (12) month period of the Term of this Lease, commencing on the Commencement
Date, will be referred to herein as a “Lease Year”; provided, however, that if the Commencement
Date is not the first day of a calendar month, then the first Lease Year shall begin on the
Commencement Date and shall end on the last day of the calendar month in which the first
anniversary of the Commencement Date occurs.



3.1. OPTION TERM.




(a) Option Right. Landlord hereby grants the originally named Tenant herein (or any affiliate to
which this Lease has been assigned pursuant to Paragraph 24(c) above (a “Permitted Assignee”)), up
to four (4) consecutive dependant options to extend the Initial Term for a total period of twenty
(20) years (the “Option Term”) with respect to the entire Premises, which option(s) shall be
exercisable only by written notice delivered by Tenant to Landlord as provided below, and provided
further that, as of the date of delivery of such notice, Tenant is not in default under this Lease
beyond any applicable cure period. Each such option may be exercised at Tenant’s election for
either a five (5) or ten (10) year period (“Option Term Period”), provided, however, that the total
Option Term exercised may not exceed twenty (20) years. Upon the proper exercise of such option to
extend, and provided that, as of the end of the Initial Term or exercised portion of the Option
Term, Tenant is not in default under this Lease beyond any applicable cure period, the Term, as it
applies to the Premises, shall be extended for a period of five (5) or ten (10) years, at the
election of Tenant, at the monthly base rent and on the other terms set forth in Paragraph 3.1(b)
below. The rights contained in this Paragraph 3.1 shall be personal to Tenant or a Permitted
Assignee. Any renewal event outside exercise of one of the four (4) options (i.e. a renewal
negotiated outside an option) shall be considered use of an option and will reduce the number of
options remaining but will not eliminate Tenant’s rights to future renewal options.



(b) Option Rent. The monthly base rent payable by Tenant during the Option Term (the “Option
Rent”) shall be equal to 95% of the rent that a willing tenant and a willing landlord would agree
to in arm’s length, bona fide negotiation for a new lease of direct space that is comparable in
size, location and quality to the Premises, for a comparable term, which comparable space is
located in other comparable buildings in the southwest sub market area of Houston, TX and taking
into consideration all other relevant terms and conditions of any comparable leasing transactions,
including, without limitation: (i) location, quality and age of the building; (ii) use and size of
the space in question; (iii) extent of leasehold improvement allowances; (iv) the amount of any
abatement of rental or other charges; (v) parking charges or inclusion of same in rental; (vi)
lease takeovers/assumptions; (vii) relocation, refurbishment and repainting allowances; (viii) any
and all other concessions or inducements; (ix) extent of services provided or to be provided,
including maintenance and repair obligations; (x) distinction between “gross” and “net” lease; (xi)
base year or dollar amount for escalation purposes (both operating costs and ad valorem/real
estate); (xii) any other adjustments (including by way of indexes) to base rental; (xiii) credit
standing and financial stature of the tenant; and (xiv) length of term (the “Fair Market Value
Rental” or “FMVR”). All other terms and conditions of this Lease shall apply throughout the Option
Term.



(c) Exercise of Option. The option contained in this Paragraph 3.1 shall be exercised by Tenant,
if at all, and only in the following manner: (i) Tenant shall deliver written notice to Landlord
no less than nine (9) months prior to the expiration of the Initial Term or Option Term Period as
exercised, stating that



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Tenant is exercising its option and as to what portion of the Premises such
renewal shall apply; (ii) Landlord, after receipt of Tenant’s notice, shall deliver notice (the
“Option Rent Notice”) to Tenant not more than one (1) month after receipt of the notice to extend,
setting forth Landlord’s proposed Option Rent; and (iii) if Tenant wishes to object to the Option
Rent, Tenant shall, on or before the date occurring one (1) month after receipt of the Option Rent
Notice deliver written notice thereof to Landlord, in which case the parties shall follow the
procedure, and the Option Rent shall be determined, as set forth in Paragraph 3.1(d) below.



(d) Determination of Option Rent. In the event Tenant timely and appropriately objects to the
Option Rent proposed by Landlord, Landlord and Tenant shall attempt to agree upon the Option Rent
using their best good-faith efforts. If Landlord and Tenant fail to reach agreement within ten
(10) business days following Tenant’s objection to the Option Rent, (the “Outside Agreement Date”),
then each party shall make a separate determination of the Option Rent, as the case may be, within
five (5) business days, and such determinations shall be submitted to arbitration in accordance
with Subparagraphs (i) through (vii) below.



(i) Landlord and Tenant shall each appoint one arbitrator who shall by profession be a licensed
real estate brokers who shall have been active over the five (5) year period ending on the date of
such appointment in the leasing of commercial office and industrial properties in Houston, Texas.
The determination of the arbitrators shall be limited solely to the issue area of whether
Landlord’s or Tenant’s submitted Option Rent, is the closest to the actual Option Rent as
determined by the arbitrators, taking into account the requirements of Paragraph 3.1(b) above.
Each such arbitrator shall be appointed within fifteen (15) business days after the applicable
Outside Agreement Date.



(ii) The two arbitrators so appointed shall within ten (10) business days of the date of the
appointment of the last appointed arbitrator agree upon and appoint a third arbitrator who shall be
qualified under the same criteria set forth hereinabove for qualification of the initial two
arbitrators.



(iii) The three arbitrators shall within thirty (30) days of the appointment of the third
arbitrator reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted
Option Rent, and shall notify Landlord and Tenant thereof.



(iv) The decision of the majority of the three arbitrators shall be binding upon Landlord and
Tenant.



(v) If either Landlord or Tenant fails to appoint an arbitrator within fifteen (15) business days
after the applicable Outside Agreement Date, the arbitrator appointed by one of them shall reach a
decision, notify Landlord and Tenant thereof, and such arbitrator’s decision shall be binding upon
Landlord and Tenant.



(vi) If the two arbitrators fail to agree upon and appoint a third arbitrator, or both parties fail
to appoint an arbitrator, then the appointment of the third arbitrator or any arbitrator shall be
dismissed and the matter to be decided shall be forthwith submitted to arbitration under the
provisions of the American Arbitration Association, but subject to the instruction set forth in
this Paragraph 3.1(d).



(vii) The cost of arbitration (including, without limitation, reasonable attorneys’ fees) shall be
paid by the non-prevailing party.



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(e) Partial Renewal. Tenant will have the right under this Paragraph 3 to exercise the Option Term
for all of the Premises or for Building Two or Building Three as Tenant in its sole discretion may
elect. In the event Tenant elects to exercise the Option Term for either Building Two or Building Three, the
Option Rent shall be determined as provided for in this paragraph 3 but shall be 100% or FMVR, and
all remaining dependent options shall apply only to that portion of the Premises subject to the
exercised Option Term.



4. POSSESSION.




(a) Delivery of Possession. Landlord and Tenant acknowledge that Tenant is in possession of the
Premises as of the date hereof pursuant to the terms of lease between Tenant and NL VENTURES III
STAFFORD, L.P., a Texas limited partnership, Landlord’s predecessor in interest with respect to the
Premises. Landlord and Tenant acknowledge and agree that Tenant shall remain in possession of the
Premises and that the existing lease between Tenant and NL VENTURES III STAFFORD, L.P. shall
terminate concurrently with the Commencement Date of this Lease which shall occur at such time as
Landlord completes its acquisition of the Premises.



(b) Condition of Premises. By taking possession of the Premises, Tenant will be deemed to have
accepted the Premises in its “as is” “where is” and “with all faults” condition on the date of
delivery of possession and to have acknowledged that neither Landlord nor any agent of Landlord has
made any representation or warranty with respect to the Premises or any portions thereof or with
respect to the suitability of same for the conduct of Tenant’s business. THIS LEASE IS EXPRESSLY
ENTERED INTO WITHOUT ANY REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY AND
LANDLORD IS TRANSFERRING POSSESSION OF THE PREMISES AS IS, WHERE IS, AND WITH ALL FAULTS, AND
WITHOUT REPRESENTATIONS OR WARRANTY (ALL OF WHICH LANDLORD HEREBY DISCLAIMS) AS TO FITNESS FOR ANY
PARTICULAR PURPOSE, MERCHANTABILITY, DESIGN, QUALITY, LAYOUT, FOOTAGE, PHYSICAL CONDITION,
OPERATION, COMPLIANCE WITH SPECIFICATIONS, ABSENCE OF LATENT DEFECTS, OR COMPLIANCE WITH LAWS AND
REGULATIONS (INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO HEALTH, SAFETY AND THE ENVIRONMENT)
OR ANY OTHER MATTER AFFECTING OR RELATED TO THE PROPERTY. TENANT HEREBY FURTHER ACKNOWLEDGES THAT
LANDLORD HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES
AS TO WATER, SOIL OR GEOLOGY OF THE PREMISES. WITHOUT LIMITING THE FOREGOING, LANDLORD DOES NOT
AND HAS NOT MADE ANY REPRESENTATION OR WARRANTY REGARDING THE PRESENCE OR ABSENCE OF ANY HAZARDOUS
MATERIALS (as defined in Paragraph 7(c) below) ON, UNDER OR ABOUT THE PREMISES OR THE COMPLIANCE OR
NON-COMPLIANCE OF THE PREMISES WITH THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND
LIABILITY ACT, THE SUPERFUND AMENDMENT AND REAUTHORIZATION ACT, THE RESOURCE CONSERVATION RECOVERY
ACT, THE FEDERAL WATER POLLUTION CONTROL ACT, THE FEDERAL INSECTICIDE, RODENTICIDE AND FUNGICIDE
ACT, THE CLEAN WATER ACT, THE CLEAN AIR ACT, ANY SO-CALLED FEDERAL, STATE OR LOCAL “SUPERFUND” OR
“SUPERLIEN” STATUTE, OR ANY OTHER STATUTE, LAW, ORDINANCE, CODE, RULE, REGULATION, ORDER OR DECREE
REGULATING, RELATING TO OR IMPOSING LIABILITY (INCLUDING STRICT LIABILITY) OR STANDARDS OF CONDUCT
CONCERNING ANY HAZARDOUS MATERIALS (collectively, the “Environmental Laws”). TENANT HEREBY
FURTHER ACKNOWLEDGES AND AGREES THAT IT IS RELYING SOLELY UPON ITS CURRENT POSSESSION, INSPECTION,
EXAMINATION, AND EVALUATION OF THE PREMISES.



5. RENT.




(a) Monthly Base Rent. Tenant agrees to pay Landlord the Monthly Base Rent (as set forth in
paragraph 1(k) above) for the Premises (subject to adjustment as hereinafter provided) in advance
on the first day of each calendar month during the Term without prior notice or demand, except that
Tenant agrees to pay the Monthly Base Rent for the first month of the Term directly to Landlord
concurrently with Tenant’s delivery of the executed Lease to Landlord. If the Term of this Lease
commences or ends on a day other than the first day of a calendar month, then the rent for such
period will be prorated in the



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proportion that the number of days this Lease is in effect during
such period bears to the number of days in such month. All rent must be paid to Landlord, without any deduction or offset, in lawful money
of the United States of America, at the address designated by Landlord or to such other person or
at such other place as Landlord may from time to time designate in writing.



(b) Additional Rent. All amounts and charges to be paid by Tenant hereunder, including, without
limitation, payments for Operating Expenses, insurance, and repairs for which Tenant is responsible
pursuant to Subparagraph 14(b) below, will be considered additional rent for purposes of this
Lease, and the word “rent” as used in this Lease will include all such additional rent unless the
context specifically or clearly implies that only Monthly Base Rent is intended.



(c) Late Payments. Late payments of Monthly Base Rent and/or any item of additional rent (with the
exception of direct payments for landscaping and janitorial services) will be subject to interest
and a late charge as provided in Subparagraph 22(f) below.



6. REAL PROPERTY TAXES.




(a) Real Property Taxes. Tenant shall pay all real property taxes on the Premises during the term
of this Lease. Tenant agrees to pay to Landlord one twelfth (1/12th) of the total
annual real property taxes due on a monthly basis concurrently with the payment of Monthly Base
Rent. Failure of Tenant to pay said real property taxes as and when herein specified shall, in
addition to all other rights and remedies of Landlord hereunder, subject Tenant to any fine,
penalty, interest, or cost which Landlord may incur as a result thereof. Tenant shall, within
thirty (30) days after demand, reimburse Landlord for any such fine, penalty, interest, or cost
paid by Landlord, together with interest thereon at the Interest Rate.



(b) Definition of “Real Property Tax.” “Real property tax” means; (i) any fee, license fee,
license tax, business license fee, commercial rental tax, levy, charge, assessment, penalty or tax
imposed by any taxing authority against the Premises; (ii) any tax or charge for fire protection,
streets, sidewalks, road maintenance, refuse or other services provided to the Premises by any
governmental agency; (iii) any tax imposed upon this transaction or based upon a re-assessment of
the Premises due to a change of ownership, as defined by applicable law, or other transfer of all
or part of Landlord’s interest in the Premises ; and (iv) any charge or fee replacing any tax
previously included within the definition of real property tax, or in substitution of or in lieu of
an increase in real property taxes. “Real property tax” does not, however, include Landlord’s
federal or state income, franchise, inheritance or estate taxes or any other taxes applicable to
Landlord’s general or net income.



(c) Impounds for Real Property Taxes. If Tenant is more than ten (10) days late in the payment of
real property taxes more than two (2) times during the initial Term of this Lease, Tenant shall pay
Landlord a sum equal to one-twelfth (1/12) of the estimated annual real property taxes payable by
Tenant under this Lease, together with each payment of Monthly Base Rent. Landlord shall hold such
payments in a non-interest bearing impound account, and Landlord shall use such funds to pay the
real property taxes on the Premises to the taxing authority entitled thereto at least fifteen (15)
days prior to the delinquency date established by the taxing authority. If unknown, Landlord shall
reasonably estimate the amount of real property taxes when due. Tenant shall pay any deficiency of
funds in the impound account to Landlord upon written request. Landlord shall refund any excess to
Tenant once the actual amount of the real property taxes is known. If Tenant defaults under this
Lease, Landlord may apply any funds in the impound account to any obligation then due under this
Lease.



(d) Right to Contest. Tenant will have the exclusive right throughout the Term (including any
extensions) to contest the assessed valuation of the Premises by all appropriate proceedings, and
to settle or compromise any such proceedings initiated by Tenant, all at Tenant’s sole cost and
expense. Any tax savings shall inure solely to the benefit of Tenant.



7. SECURITY DEPOSIT. Tenant will not be required to deposit with Landlord any Security Deposit
provided that Tenant demonstrates by way of audited financial statements that it maintains a
Tangible Net Worth (“TNW”) (defined in accordance with Generally Accepted Accounting Principles
consistently



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applied) of Fifty Million Dollars ($50,000,000) and a Current Ratio (“CR”) (defined as the ratio of
current assets to current liabilities) of 1.5. If during the term of this Lease either of these
conditions is not satisfied, Tenant shall deposit a Security Deposit with Landlord in an amount
equal to six (6) times the then applicable monthly rent. The Security Deposit will be returned
after Tenant satisfies the TNW and CR conditions for four (4) consecutive quarters. Any Security
Deposit will be held by Landlord in an interest-bearing account as security for the full and
faithful performance by Tenant of all of the terms, covenants, and conditions of this Lease to be
kept and performed by Tenant during the Term hereof. If the Security Deposit, if any, has not been
returned prior to the expiration of the Lease Term, and Tenant fully and faithfully performs its
obligations under this Lease including, without limitation, surrendering the Premises upon the
expiration or sooner termination of this Lease in compliance with Subparagraph 11(a) below, the
Security Deposit (and interest earned thereon) or any balance thereof will be returned to Tenant
(or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder) within thirty (30)
days following the expiration of the Lease Term or as required under applicable law, provided that
Landlord may retain the Security Deposit (and interest earned thereon) until such time as any
outstanding rent or additional rent amount has been determined and paid in full. The Security
Deposit (and interest earned thereon) is not, and may not be construed by Tenant to constitute,
rent for the last month or any portion thereof. If Tenant defaults with respect to any provisions
of this Lease including, but not limited to, the provisions relating to the payment of rent or
additional rent, Landlord may (but will not be required to) use, apply or retain all or any part of
the Security Deposit (and interest earned thereon) for the payment of any rent or any other sum in
default, 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 any loss or damage which Landlord
may suffer by reason of Tenant’s default. If any portion of the Security Deposit is so used or
applied, Tenant agrees, within ten (10) business days after Landlord’s written demand therefor, to
deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original
amount and Tenant’s failure to do so shall constitute a default under this Lease. Should Landlord
sell its interest in the Premises during the Term hereof and deposit with the purchaser thereof the
then unappropriated Security Deposit (and interest earned thereon), Landlord will be discharged
from any further liability with respect to such Security Deposit.



8. USE.




(a) Tenant’s Use of the Premises. The Premises may be used for the use or uses set forth in
Subparagraph 1(o) only, and Tenant will not use or permit the Premises to be used for any other
purpose without the prior written consent of Landlord, which consent Landlord may withhold in its
sole and absolute discretion.



(b) Compliance. At Tenant’s sole cost and expense, Tenant agrees to procure, maintain and hold
available for Landlord’s inspection, all governmental licenses and permits required, if any, for
the proper and lawful conduct of Tenant’s business from the Premises Tenant will be responsible
for compliance of its use and occupancy of the Premises, and any alterations to the Premises, at
Tenant’s sole cost and expense, with (i) any and all laws, statutes, zoning restrictions,
ordinances, rules, regulations, orders and rulings now or hereafter in force and any requirements
of any insurer, insurance authority or duly constituted public authority having jurisdiction over
the Premises now or hereafter in force, (ii) the requirements of the Board of Fire Underwriters and
any other similar body, (iii) the Certificate of Occupancy issued for the Buildings, and (iv) any
recorded covenants, conditions and restrictions and similar regulatory agreements, if any, which
affect the use, occupation or alteration of the Buildings or the Premises. Tenant agrees to comply
with the Rules and Regulations referenced in Paragraph 28 below. Tenant agrees not to allow the
Premises to be used for any unlawful or unreasonably objectionable purpose. Tenant agrees not to
cause, maintain or permit any nuisance or waste in, on, under or about the Premises.
Notwithstanding anything contained in this Lease to the contrary, all transferable development
rights related in any way to that portion of the Property owned by Landlord are and will remain
vested in Landlord, and Tenant hereby waives any rights thereto.



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(c) Hazardous Materials.




Except for (i) ordinary and general office supplies typically used in the ordinary course of
business, such as copier toner, liquid paper, glue, ink and common household cleaning materials
(some or all of which may constitute “Hazardous Materials” as defined in this Lease), in ordinary
quantities, (ii) those Hazardous Materials that are necessary for Tenant’s business, provided that
such usage and storage is only to the extent of the quantities as reasonably necessary in the
ordinary course of Tenant’s business, Tenant agrees not to cause or permit any Hazardous Materials
to be brought upon, stored, used, handled, generated, released or disposed of on, in, under or
about any portion of the Premises by Tenant, its agents, employees, subtenants, assignees,
licensees, contractors or invitees (collectively, “Tenant’s Parties”), without the prior written
consent of Landlord, which consent Landlord may withhold in its sole and absolute discretion. Upon
the expiration or earlier termination of this Lease, Tenant agrees to promptly remove from the
Premises, at its sole cost and expense, any and all Hazardous Materials, including any equipment or
systems containing Hazardous Materials which are installed, brought upon, stored, used, generated
or released upon, in, under or about the Premises or any portion thereof by Tenant or any of
Tenant’s Parties. Landlord reserves the right, during the last one hundred eighty (180) days of
the Term, to have an experienced and qualified environmental consultant perform an environmental
inspection of the Premises to determine the existence of any Hazardous Materials for which Tenant
is responsible for their removal. If Landlord’s inspection reveals or confirms the existence of
any such Hazardous Materials (except for Hazardous Materials that have been previously approved by
Landlord in writing and such Hazardous Materials have been used, handled, stored and disposed of in
accordance with all applicable Environmental Laws), or if Landlord has reasonable cause to believe
that any such Hazardous Materials are likely to exist at the Premises, then Tenant shall be
responsible for the cost of such inspection; in all other instances, Landlord shall be responsible
for the cost of such inspection. To the fullest extent permitted by law, Tenant agrees to promptly
indemnify, protect, defend and hold harmless Landlord and Landlord’s members, managers, partners,
officers, directors, employees, agents, successors and assigns (collectively, “Landlord Indemnified
Parties”) and lenders from and against any and all claims, damages, judgments, suits, causes of
action, losses, liabilities, penalties, fines, expenses and costs (including, without limitation,
clean-up, removal, remediation and restoration costs, sums paid in settlement of claims, attorneys’
fees, consultant fees and expert fees and court costs) which arise or result from the presence of
Hazardous Materials on, in, under or about the Premises and which are caused or permitted by Tenant
or any of Tenant’s Parties. Tenant agrees to promptly notify Landlord of any release of Hazardous
Materials at the Premises which Tenant becomes aware of during the Term of this Lease, whether
caused by Tenant or any other persons or entities. In the event of any release of Hazardous
Materials caused or permitted by Tenant or any of Tenant’s Parties, Landlord shall have the right,
but not the obligation, to cause Tenant to immediately take all steps Landlord deems reasonably
necessary or appropriate to remediate such release and prevent any similar future release to the
reasonable satisfaction of Landlord and Landlord’s mortgagee(s). As used in this Lease, the term
“Hazardous Materials” shall mean and include any chemical, substance, material, controlled
substance, object, condition, waste, living organism or combination thereof, whether solid,
semi-solid, liquid or gaseous, which is or may be hazardous to human health or safety or to the
environment due to its radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity,
carcinogenicity, mutagenicity, phytotoxicity, infectiousness or other harmful or potentially
harmful properties or effects, including, without limitation, tobacco smoke, petroleum and
petroleum products, asbestos, radon, polychlorinated biphenyls (PCBs), refrigerants (including
those substances defined in the Environmental Protection Agency’s “Refrigerant Recycling Rule,” as
amended from time to time) and all of those chemicals, substances, materials, controlled
substances, objects, conditions, wastes, living organisms or combinations thereof which are now or
become in the future listed, defined or regulated in any manner by any Environmental Law based
upon, directly or indirectly, such properties or effects. As used herein, “Environmental Laws”
means any and all federal, state or local environmental, health and/or safety-related laws,
regulations, standards, decisions of courts, ordinances, rules, codes, orders, decrees, directives,
guidelines, permits or permit conditions, currently existing and as amended, enacted, issued or
adopted in the future which are or become applicable to Tenant, the Premises. The provisions of
this Subparagraph 8(c) shall survive the expiration or earlier termination of this Lease.



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(d) Tenant shall have the right to self-manage the Premises on behalf of Tenant at Tenant’s sole
cost and expense. Tenant’s right to manage the Premises as set forth above shall be exclusive and
Landlord will have no right to manage the Premises, either directly or through a third-party
property manager or asset manager. However, notwithstanding the foregoing, Landlord shall at all
times have the right to inspect the Premises as set forth in paragraph 16, below.



9. NOTICES. Any notice required or permitted to be given hereunder must be in writing and may be
given by personal delivery (including delivery by overnight courier or an express mailing service)
or by mail, if sent by registered or certified mail. Notices to Tenant shall be sufficient if
delivered to Tenant at the addresses designated in Subparagraph 1(d) and notices to Landlord shall
be sufficient if delivered to Landlord at the address designated in Subparagraph 1(b). Either
party may specify a different address for notice purposes by written notice to the other.



10. BROKERS. The parties acknowledge that the broker(s) who were retained by the parties in
connection with this Lease are stated in Subparagraph 1(q). Each party represents and warrants to
the other, that, to its knowledge, no other broker, agent or finder (a) negotiated or was
instrumental in negotiating or consummating this Lease on its behalf, and (b) is or might be
entitled to a commission or compensation in connection with this Lease. LANDLORD AND TENANT EACH
AGREE TO PROMPTLY INDEMNIFY PROTECT, DEFEND AND HOLD HARMLESS THE OTHER FROM AND AGAINST ANY AND
ALL CLAIMS, DAMAGES, JUDGMENTS, SUITS, CAUSES OF ACTION, LOSSES, LIABILITIES, PENALTIES, FINES,
EXPENSES, AND COSTS (INCLUDING ATTORNEYS’ FEES AND COURT COSTS) RESULTING FROM ANY BREACH BY THE
INDEMNIFYING PARTY. THE FOREGOING MUTUAL INDEMNITY SHALL SURVIVE THE EXPIRATION OR EARLIER
TERMINATION OF THIS LEASE. LANDLORD SHALL BE RESPONSIBLE FOR PAYMENT OF A COMMISSION TO BROKER PER
THE TERMS OF A SEPARATE AGREEMENT BETWEEN LANDLORD AND BROKER.



11. SURRENDER; HOLDING OVER.




(a) Surrender. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation
thereof, shall not constitute a merger, and shall, at the option of Landlord, operate as an
assignment to Landlord of any or all subleases or subtenancies. Upon the expiration or earlier
termination of this Lease, Tenant agrees to peaceably surrender the Premises to Landlord broom
clean and, in the case of all warehouse floors, scrubbed clean (to remove all oil, grease and other
debris to the extent practicable) and in a state of good order, repair and condition, ordinary wear
and tear and casualty damage (if this Lease is terminated as a result thereof pursuant to Paragraph
20) excepted, with all of Tenant’s personal property and Structural Alterations (as defined in
Paragraph 13) removed from the Premises to the extent required under Paragraph 13 and all damage
caused by such removal repaired as required by Paragraph 13. If any wiring and/or cabling is not
removed from the Premises upon expiration of this lease then such wiring and/or cabling shall
become the property of Landlord (without payment by Landlord). The delivery of keys to any
employee of Landlord or to Landlord’s agent or any employee thereof alone will not be sufficient to
constitute a termination of this Lease or a surrender of the Premises.



(b) Holding Over. Tenant will not be permitted to hold over possession of the Premises after the
expiration or earlier termination of the Term without the express written consent of Landlord,
which consent Landlord may withhold in its sole and absolute discretion. If Tenant holds over
after the expiration or earlier termination of the Term, Landlord may, at its option, treat Tenant
as a tenant at sufferance only, and such continued occupancy by Tenant shall be subject to all of
the terms, covenants and conditions of this Lease, so far as applicable, except that the Monthly
Base Rent for any such holdover period shall be equal to one hundred fifty percent (150%) of the
Monthly Base Rent in effect under this Lease immediately prior to such holdover.. Acceptance by
Landlord of rent after such expiration or earlier termination will not result in a renewal of this
Lease. The foregoing provisions of this Paragraph 11 are in addition to and do not affect
Landlord’s right of re-entry or any rights of Landlord under this Lease or as otherwise provided by
law. If Tenant fails to surrender the Premises upon the expiration of this Lease in accordance
with the terms of this Paragraph 11 despite demand to do so by Landlord, Tenant agrees to promptly
indemnify, protect, defend and hold Landlord harmless from all
claims, damages, judgments, suits, causes of action, losses, liabilities, penalties, fines,
expenses and



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costs (including attorneys’ fees and costs), including, without limitation, costs and
expenses incurred by Landlord in returning the Premises to the condition in which Tenant was to
surrender it and claims made by any succeeding tenant founded solely on or resulting solely from
Tenant’s failure to surrender the Premises. The provisions of this Subparagraph 11(b) will survive
the expiration or earlier termination of this Lease.



12. TAXES ON TENANT’S PROPERTY. Tenant agrees to pay before delinquency, all taxes and assessments
(real and personal) levied against (a) any personal property or trade fixtures placed by Tenant in
or about the Premises (including any increase in the assessed value of the Premises based upon the
value of any such personal property or trade fixtures); (b) any Tenant Improvements or Alterations
in the Premises (whether installed and/or paid for by Landlord or Tenant) to the extent such items
are assessed at a valuation higher than the valuation at which tenant improvements conforming to
Landlord’s building standard tenant improvements are assessed, (c) any franchise, sales or rent
tax, and (d) any taxes imposed or levied against Tenant due to any sub-tenancies or assignment of
the Lease (or any part thereof). If any such taxes or assessments based upon items in (a), (b),
(c) or (d) above, are levied against Landlord or Landlord’s property, Landlord may, after written
notice to Tenant (and under proper protest if requested by Tenant) pay such taxes and assessments,
in which event Tenant agrees to reimburse Landlord all amounts paid by Landlord within ten (10)
business days after demand by Landlord; provided, however, Tenant, at its sole cost and expense,
will have the right, with Landlord’s cooperation, to bring suit in any court of competent
jurisdiction to recover the amount of any such taxes and assessments so paid under protest.



13. ALTERATIONS. Subject to and upon the terms and conditions set forth below, Tenant may, at its
sole cost and expense, make non-structural alterations, additions, improvements and decorations to
the Premises as well as any repairs under Paragraph 14 below (collectively, “Alterations”) without
Landlord’s approval, provided such Alterations (i) do not affect the outside appearance, character
or use of the Buildings, (ii) do not materially adversely affect the structure, equipment, services
or systems of the Buildings or Development, (iii) in the reasonable opinion of Landlord, do not
materially adversely affect the value of the Buildings, (iv) violate any occupancy certificate
applicable to the Buildings or the Development, or (v) cost less than Two Hundred Fifty Thousand
Dollars ($250,000).



(a) Intentionally Deleted.




(b) Landlord’s Notice. Before proceeding with any Alterations, Tenant must first deliver to
Landlord written notice and a copy of any final plans, specifications and working drawings for any
such Alterations if required for such work (i.e. carpeting work does not require drawings) at least
ten (10) business days prior to commencement of the work thereof, and (B) comply with the other
conditions of this Paragraph 13, including, without limitation, conforming to Landlord’s rules,
regulations and insurance requirements which govern contractors. Landlord’s review of plans,
specifications and/or working drawings for Alterations will not create any responsibility or
liability on the part of Landlord for their completeness, design sufficiency, or compliance with
applicable permits, laws, rules and regulations of governmental agencies or authorities. If the
Alteration is structural or does not comply with 13 (i)-(v) above (a “Structural Alteration”),
Landlord will have the right to approve such Structural Alteration, such approval not to be
unreasonably withheld, delayed or conditioned. Landlord will notify Tenant in writing of (i) any
objections to a proposed Structural Alteration within twenty (20) business days following receipt
of Tenant’s notice, which objections will provide sufficient detail and specifics of Landlord’s
objections to allow Tenant to review the plans, specifications and working drawings to eliminate
Landlord’s objections, If Landlord fails to provide notice of any objections within such twenty
(20) business day period, then Tenant shall provide Landlord a second written notice. If Landlord
fails to provide notice of any objections within ten (10) business day from receipt of the second
notice, then Landlord will be deemed to have approved the proposed Structural Alteration and Tenant
will be entitled to proceed with same without further consent from Landlord.



(c) Contractors. Tenant may select architects, engineers contractors, subcontractors and other
consultants of Tenant’s choice to perform any Alterations or Structural Alterations provided same
are properly licensed. Before proceeding with any Alterations or Structural Alterations,
Tenant’s contractors



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must obtain and maintain, on behalf of Tenant and at Tenant’s sole cost and
expense: (i) all necessary governmental permits and approvals for the commencement and completion
of such Alterations or Structural Alterations; and (ii) if reasonably requested by Landlord, a
completion and lien indemnity or payment performance bond, or other surety, reasonably satisfactory
to Landlord for such Structural Alterations. Throughout the performance of any Alterations or
Structural Alterations, Tenant agrees to obtain, or cause its contractors to obtain, workers
compensation insurance and general liability insurance in compliance with the provisions of
Paragraph 19 of this Lease.



(d) Manner of Performance. All Alterations and Structural Alterations must be performed: (i) in
accordance with the approved plans, specifications and working drawings; (ii) in a lien-free and
first-class and workmanlike manner; and (iii) in compliance with all applicable permits, laws,
statutes, ordinances, rules, regulations, orders and rulings now or hereafter in effect and imposed
by any governmental agencies and authorities which assert jurisdiction.



(e) Ownership. Any tenant improvements, including, without limitation, all affixed sinks,
dishwashers, microwave ovens and other fixtures, and all Alterations and Structural Alterations
will become the property of Landlord and will remain upon and be surrendered with the Premises at
the end of the Term of this Lease; provided, however, Landlord may, by written notice delivered to
Tenant at least ninety (90) days before the end of the Term, identify those Structural Alterations
which Landlord will require Tenant to remove at the end of the Term of this Lease, provided that at
the time Landlord approves the Structural Alterations, Landlord has reserved the right to require
Tenant to remove such Structural Alterations.. If Landlord requires Tenant to remove any
Structural Alterations, Tenant, at its sole cost and expense, agrees to remove the identified
Structural Alterations on or before the expiration or earlier termination of this Lease and repair
any damage to the Premises caused by such removal (or, at Landlord’s option, Tenant agrees to pay
to Landlord all of Landlord’s costs of such removal and repair).



(f) Plan Review. Tenant agrees to pay Landlord, as additional rent, the reasonable costs of
professional services and costs for general conditions of Landlord’s third party consultants if
utilized by Landlord (but not Landlord’s “in-house” personnel) for review of all plans,
specifications and working drawings for any Alterations, within ten (10) business days after
Tenant’s receipt of invoices either from Landlord or such consultants.



(g) Personal Property. All articles of personal property owned by Tenant or installed by Tenant at
its expense in the Premises (including Tenant’s business and trade fixtures, furniture, movable
partitions and equipment) will be and remain the property of Tenant, and must be removed by Tenant
from the Premises, at Tenant’s sole cost and expense, on or before the expiration or earlier
termination of this Lease. Tenant agrees to repair any damage caused by such removal at its cost
on or before the expiration or earlier termination of this Lease.



(h) Removal of Alterations. If Tenant fails to remove by the expiration or earlier termination of
this Lease all of its personal property, or any Structural Alterations properly identified by
Landlord for removal, Landlord may, (without liability to Tenant for loss thereof) treat such
personal property and/or Structural Alterations as abandoned and, at Tenant’s sole cost and
expense, and in addition to Landlord’s other rights and remedies under this Lease, at law or in
equity: (a) remove and store such items; and/or (b) upon ten (10) business days prior notice to
Tenant, sell, discard or otherwise dispose of all or any such items at private or public sale for
such price as Landlord may obtain or by other commercially reasonable means. Tenant shall be
liable for all costs of disposition of Tenant’s abandoned property plus a surcharge of five percent
(5%) and Landlord shall have no liability to Tenant with respect to any such abandoned property.
Landlord agrees to apply the proceeds of any sale of any such property (except the five percent
surcharge) to any amounts due to Landlord under this Lease from Tenant (including Landlord’s
reasonable attorneys’ fees and other costs incurred in the removal, storage and/or sale of such
items), with any remainder to be paid to Tenant.



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14. REPAIRS AND MAINTENANCE.




(a) Tenant’s Obligations. Tenant agrees to keep, maintain and preserve the Premises (excluding the
structural portions of the Buildings as set forth in Paragraph 14(c) below) in good condition and
repair and, when and if needed, at Tenant’s sole cost and expense, to make all repairs to the
Premises and every part thereof. Tenant shall enter into and maintain in effect preventive
maintenance or service contracts with respect to (i) HVAC equipment, (ii) boiler, and pressure
vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke detection, (iv)
landscaping and irrigation systems, (v) parking areas, driveways and sidewalks, (vi) roof surface
and membrane, (vii) window cleaning, (viii) clarifiers, and (ix) any other equipment, if reasonably
required by Landlord. All such service contracts shall be subject to Landlord’s prior written
approval not to be unreasonably withheld. Tenant shall perform its obligations under this
Paragraph 14(a) with diligence and consistent with good building management. Tenant agrees to cause
any mechanics’ liens or other liens arising as a result of work performed by Tenant or at Tenant’s
direction to be eliminated as provided in Paragraph 15 below. Landlord has no obligation to alter,
remodel, improve, repair, decorate or paint any portion of the Premises.



(b) Tenant’s Failure to Repair or Maintain. If Tenant refuses or neglects to repair and maintain
the Premises as required hereunder to the reasonable satisfaction of Landlord, Landlord, at any
time following ten (10) business days from the date on which Landlord makes a written demand on
Tenant to effect such repair and maintenance, may enter upon the Premises and make such repairs
and/or maintenance, and upon completion thereof, Tenant agrees to pay to Landlord as additional
rent, Landlord’s reasonable costs for making such repairs within ten (10) business days of receipt
from Landlord of a written itemized bill therefor. Any amounts not reimbursed by Tenant within
such ten (10) business day period will bear interest at the Interest Rate until paid by Tenant.



(c) Landlord’s Obligations. Landlord covenants and agrees, at its expense without reimbursement or
contribution by Tenant, to keep, maintain and replace, as necessary, the foundations, structural
systems including, without limitation, the roof structure (excluding the roof membrane), and
load-bearing walls, floor slabs and , exterior walls in good condition and repair unless any of the
foregoing is damaged due to Tenant’s negligence or misuse. Throughout the performance of any
maintenance or repair work performed by or for Landlord under this Paragraph 14(c), Landlord agrees
to obtain, or cause its contractors to obtain, workers compensation insurance and general liability
insurance in compliance with the provisions of Paragraph 19 of this Lease.



15. LIENS. Tenant agrees not to permit any mechanic’s, materialmen’s or other liens to be filed
against all or any part of the Premises, nor against Tenant’s leasehold interest in the Premises,
by reason of or in connection with any repairs, alterations, improvements or other work contracted
for or undertaken by Tenant or any other act or omission of Tenant or Tenant’s agents, employees,
contractors, licensees or invitees. At Landlord’s request, Tenant agrees to provide Landlord with
enforceable, conditional and final lien releases (or other evidence reasonably requested by
Landlord to demonstrate protection from liens) from all persons furnishing labor and/or materials
at the Premises. Landlord will have the right at all reasonable times to post on the Premises and
record any notices of non-responsibility which it deems necessary for protection from such liens.
If any such liens are filed, Tenant will, at its sole cost, promptly cause such liens to be
released of record or bonded so that it no longer affects title to the Premises. If Tenant fails
to cause any such liens to be so released or bonded within thirty (30) business days after filing
thereof, such failure will be deemed a material breach by Tenant under this Lease without the
benefit of any additional notice or cure period described in Paragraph 22 below, and Landlord may,
without waiving its rights and remedies based on such breach, and without releasing Tenant from any
of its obligations, cause such liens to be released by any means it shall deem proper, including
payment in satisfaction of the claims giving rise to such liens. Tenant agrees to pay to Landlord
within ten (10) business days after receipt of invoice from Landlord, any sum paid by Landlord to
remove such liens, together with interest at the Interest Rate from the date of such payment by
Landlord.



16. ENTRY BY LANDLORD. Landlord and its employees and agents will at all times have the right to
enter the Premises to inspect the same, to show the Premises to prospective purchasers or (during
the last 12 months of the Lease Term only, provided Tenant has not exercised its renewal option)
tenants, to



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post notices of nonresponsibility, and/or to repair the Premises as permitted or
required by this Lease. In exercising such entry rights, Landlord will endeavor to minimize, as
reasonably practicable, the interference with Tenant’s business, and will provide Tenant with
reasonable advance notice of any such entry (except in emergency situations). Landlord may, in
order to carry out such purposes, erect scaffolding and other necessary structures where reasonably
required by the character of the work to be performed. Landlord will have the right to use any and
all means which Landlord may reasonably deem proper to open said doors in an emergency in order to
obtain entry to the Premises. Any entry to the Premises obtained by Landlord by any of said means,
or otherwise, will not be construed or deemed to be a forcible or unlawful entry into the Premises,
or an eviction of Tenant from the Premises.



17. UTILITIES AND SERVICES. Tenant shall arrange and pay for all water, gas, heat, sewer services,
light, power, trash disposal and other utilities and services supplied to the Premises together
with any taxes thereon. Tenant shall arrange and pay for janitorial services and any telephone and
other telecommunications services provided to the Premises. Landlord will not be liable to Tenant
for any failure to furnish any of the foregoing utilities and services to the Premises for any
cause whatsoever. In addition, in the event of any stoppage or interruption of services or
utilities, Tenant shall not be entitled to any abatement or reduction of rent, no eviction of
Tenant will result from such failure and Tenant will not be relieved from the performance of any
covenant or agreement in this Lease because of such failure. In the event of any failure, stoppage
or interruption thereof, Tenant agrees to diligently attempt to resume service promptly.



18. ASSUMPTION OF RISK AND INDEMNIFICATION.




(a) Assumption of Risk. Tenant, as a material part of the consideration to Landlord, hereby agrees
that neither Landlord nor any Landlord Indemnified Parties (as defined in Subparagraph 8(c) above)
will be liable to Tenant for, and Tenant expressly assumes the risk of and waives any and all
claims it may have against Landlord or any Landlord Indemnified Parties with respect to, (i) any
and all damage to property or injury to persons in, upon or about the Buildings or the Premises
resulting from any act or omission (except for the negligent or intentionally wrongful act or
omission) of Landlord or any Landlord Indemnified Parties, (ii) any such damage caused by other
persons in or about the Buildings or the Premises, or caused by quasi-public work, (iii) any loss
of or damage to property by theft or otherwise, or (iv) any injury or damage to persons or property
resulting from any casualty, explosion, falling plaster or other masonry or glass, steam, gas,
electricity, water or rain which may leak from any part of the Buildings or any other portion of
the Premises or from the pipes, appliances or plumbing works therein or from the roof, street or
subsurface or from any other place, or resulting from dampness. Notwithstanding anything to the
contrary contained in this Lease, neither Landlord nor any Landlord Indemnified Parties will be
liable for consequential damages arising out of any loss of the use of the Premises or any
equipment or facilities therein by Tenant or any Tenant Parties or for interference with light or
other incorporeal hereditaments. Tenant agrees to give prompt notice to Landlord in case of fire
or accidents at the Premises, or of defects in the Building or in the fixtures or equipment.



(b) Indemnification. SUBJECT TO THE PROVISIONS OF PARAGRAPH 19(E), TENANT WILL BE LIABLE FOR, AND
AGREES, TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TO PROMPTLY INDEMNIFY, PROTECT,
DEFEND AND HOLD HARMLESS LANDLORD AND ALL LANDLORD INDEMNIFIED PARTIES, FROM AND AGAINST, ANY AND
ALL CLAIMS, DAMAGES, JUDGMENTS, SUITS, CAUSES OF ACTION, LOSSES, LIABILITIES, PENALTIES, FINES,
EXPENSES AND COSTS, INCLUDING ATTORNEYS’ FEES AND COURT COSTS (COLLECTIVELY, “INDEMNIFIED CLAIMS”),
ARISING OR RESULTING FROM (I) ANY ACT OR OMISSION OF TENANT OR ANY TENANT PARTIES (AS DEFINED IN
SUBPARAGRAPH 8(C) ABOVE); (II) THE USE OF THE PREMISES AND CONDUCT OF TENANT’S BUSINESS BY TENANT
OR ANY TENANT PARTIES, OR ANY OTHER ACTIVITY, WORK OR THING DONE, PERMITTED OR SUFFERED BY TENANT
OR ANY TENANT PARTIES, IN OR ABOUT THE PREMISES; AND/OR (III) ANY DEFAULT BY TENANT OF ANY
OBLIGATIONS ON TENANT’S PART TO BE PERFORMED UNDER THE TERMS OF THIS LEASE IN CASE ANY ACTION OR
PROCEEDING IS BROUGHT AGAINST LANDLORD OR ANY LANDLORD INDEMNIFIED PARTIES BY REASON OF ANY SUCH INDEMNIFIED
CLAIMS, TENANT, UPON NOTICE FROM LANDLORD, AGREES TO PROMPTLY DEFEND THE SAME AT TENANT’S



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SOLE COST AND EXPENSE BY COUNSEL APPROVED
IN WRITING BY LANDLORD, WHICH APPROVAL LANDLORD WILL NOT UNREASONABLY WITHHOLD.



SUBJECT TO THE PROVISIONS OF PARAGRAPH 19(E), LANDLORD HEREBY AGREES TO INDEMNIFY, PROTECT, AND
DEFEND TENANT, ITS OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, SUCCESSORS, AND ASSIGNS
(“TENANT INDEMNIFICATION PARTIES”) AND HOLD THEM HARMLESS FROM ANY AND ALL INDEMNIFIED CLAIMS
ASSERTED AGAINST TENANT BY A THIRD PARTY AND CAUSED BY THE (I) NEGLIGENCE OR WILLFUL MISCONDUCT OF
LANDLORD, IT’S EMPLOYEES OR AGENTS AND/OR (II) ANY DEFAULT BY LANDLORD OF ANY OBLIGATIONS ON
LANDLORD’S PART TO BE PERFORMED UNDER THE TERMS OF THIS LEASE IN CASE ANY ACTION OR PROCEEDING IS
BROUGHT AGAINST TENANT OR ANY TENANT INDEMNIFICATION PARTIES BY REASON OF ANY SUCH INDEMNIFIED
CLAIMS, LANDLORD, UPON NOTICE FROM TENANT, AGREES TO PROMPTLY DEFEND THE SAME AT LANDLORD’S SOLE
COST AND EXPENSE BY COUNSEL APPROVED IN WRITING BY TENANT, WHICH APPROVAL TENANT WILL NOT
UNREASONABLY WITHHOLD.



(c) Survival; No Release of Insurers. The indemnification obligations under Subparagraph 18(b)
will survive the expiration or earlier termination of this Lease. Tenant’s covenants, agreements
and indemnification obligation in Subparagraphs 18(a) and 18(b) above, are not intended to and will
not relieve any insurance carrier of its obligations under policies required to be carried by
Tenant pursuant to the provisions of this Lease.



19. INSURANCE.




(a) Tenant’s Insurance. On or before the Commencement Date, and continuing throughout the entire
Term hereof and any other period of occupancy, Tenant agrees to keep in full force and effect, at
its sole cost and expense, the following insurance:



(i) Intentionally Deleted.



(ii) One (1) year insurance coverage for loss of income and extra expenses in such amounts as will
reimburse Landlord for any direct Monthly Base Rent and Additional Rent attributable to any such
perils including prevention of access to the Building or any other portion of the Premises as a
result of any such perils. Such insurance shall name Landlord and its lender as loss payees solely
with respect to Monthly Base Rent and Additional Rent. These limits may be provided by primary
insurance or by primary and Excess/Umbrella Liability insurance combined.



(iii) Commercial General Liability Insurance or Comprehensive General Liability Insurance (on an
occurrence form) insuring bodily injury, personal injury and property damage including the
following divisions and extensions of coverage: Premises and Operations; Owners and Contractors
protective; blanket contractual liability (including coverage for Tenant’s indemnity obligations
under this Lease); products and completed operations; and liquor liability (if Tenant serves
alcohol on the Premises). Such insurance must have the following minimum limits of liability:
bodily injury, personal injury and property damage $5,000,000 each occurrence, $10,000,000 in the
aggregate, provided that if liability coverage is provided by a Commercial General Liability policy
the general aggregate limit shall apply separately and in total to this location only (per location
general aggregate), and provided further, such minimum limits of liability may be adjusted from
year to year to reflect increases in coverages as recommended by Landlord’s insurance carrier as
being prudent and commercially reasonable.



(iv) Comprehensive Automobile Liability insuring bodily injury and property damage arising from all
owned, non-owned and hired vehicles, if any, with minimum limits of liability of $1,000,000 per
accident.



(v) Worker’s Compensation as required by the laws of the State.



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(vi) Any other form or forms of insurance as Tenant or Landlord or any mortgagees of Landlord may
reasonably require from time to time in form, in amounts, and for insurance risks against which, a
prudent tenant would protect itself, but only to the extent coverage for such risks and amounts are
available in the insurance market at commercially acceptable rates. Landlord makes no
representation that the limits of liability required to be carried by Tenant under the terms of
this Lease are adequate to protect Tenant’s interests and Tenant should obtain such additional
insurance or increased liability limits as Tenant deems appropriate.



(b) Property Insurance. On or before the Commencement Date, and continuing throughout the entire
Term hereof and any other period of occupancy, Tenant agrees to keep in full force and effect, at
its sole cost and expense, Special Form (fka All Risk) insurance, including fire and extended
coverage, sprinkler leakage (including earthquake sprinkler leakage), vandalism, malicious
mischief, earthquake and flood coverage upon property of every description and kind located on the
Premises, including, without limitation, furniture, equipment and any other personal property, any
Tenant Improvements, Alterations and the Building in an amount not less then the full replacement
cost thereof. In the event that there shall be a dispute as to the amount which comprises full
replacement cost, the decision of Landlord or the mortgagees of Landlord shall be presumptive.



(c) Supplemental Tenant Insurance Requirements.




(i) All policies must be in a form reasonably satisfactory to Landlord, issued by an insurer
admitted to do business in the State, and have deductibles no greater than Fifty Thousand Dollars
($50,000).



(ii) All policies must be issued by insurers with a policyholder rating of “A” and a financial
rating of “X” in the most recent version of Best’s Key Rating Guide.



(iii) All policies must contain a requirement to notify Landlord (and Landlord’s partners, members
and property manager and any mortgagees or ground lessors of Landlord who are named as additional
insureds, if any) in writing not less than thirty (30) days prior to any material change, reduction
in coverage, cancellation or other termination thereof. Tenant agrees to deliver to Landlord, as
soon as practicable after placing the required insurance, but in any event within the time frame
specified in Subparagraph 19(a) above, certificate(s) of insurance evidencing the existence of such
insurance and Tenant’s compliance with the provisions of this Paragraph 19. Tenant agrees to cause
certificates to be delivered to Landlord not less than thirty (30) days prior to the expiration of
any such policy or policies. If any such initial or certificates are not furnished within the
time(s) specified herein, and such failure is not rectified within ten (10) days following written
notice thereof to Tenant, then Tenant will be deemed to be in material default under this Lease
without the benefit of any additional notice or cure period provided in Subparagraph 22(a)(iii)
below, and Landlord will have the right, but not the obligation, to procure such insurance as
Landlord deems necessary to protect Landlord’s interests at Tenant’s expense. If Landlord obtains
any insurance that is the responsibility of Tenant under this Paragraph 19, Landlord agrees to
deliver to Tenant a written statement setting forth the cost of any such insurance and showing in
reasonable detail the manner in which it has been computed and Tenant agrees to promptly reimburse
Landlord for such costs as additional rent.



(iv) General Liability and Automobile Liability policies under Subparagraphs 19(a)(iii) and (iv)
and the Special Form insurance policy under Subparagraph 19(b) must name Landlord and Landlord’s
partners, members and property manager (and at Landlord’s request, Landlord’s mortgagees and ground
lessors of which Tenant has been informed in writing) as additional insureds/loss payees (as
applicable) and must also contain a provision that the insurance afforded by such policy is primary
insurance and any insurance carried by Landlord and Landlord’s property manager or Landlord’s
mortgagees or ground lessors, if any, will be excess over and non-contributing with Tenant’s
insurance.



(d) Waiver of Subrogation. Landlord’s and Tenant’s property insurance shall each contain a clause
whereby the insurer waives all rights of recovery by way of subrogation against the other party.
Tenant shall also obtain and furnish evidence to Landlord of the waiver by Tenant’s worker’s
compensation insurance carrier of all rights of recovery by way of subrogation against Landlord.



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(e) Landlord’s Insurance. Landlord shall maintain a general E & O insurance policy providing not
less than $1,000,000 per occurrence, $2,000,000 in the aggregate coverage, and shall require all
third parties entering the Premises on Landlord’s behalf to carry similar insurance coverage.



20. DAMAGE OR DESTRUCTION.




(a) Casualty. In case of damage to or destruction of the Premises, whether or not by a risk
required to be covered by insurance as set forth in Paragraph 19 of this Lease, this Lease shall
not terminate and Tenant shall promptly restore, rebuild, replace or repair (hereinafter referred
to as “Restore” or “Restoration”) the Premises to substantially the same condition as existed
immediately prior to such damage or destruction if, in the good faith estimate of a mutually
acceptable architect or contractor, such Restoration can be substantially completed within 180 days
from the occurrence of the damage or destruction. Such Restoration shall be commenced promptly and
shall thereafter be prosecuted with due diligence. Notwithstanding the foregoing, however, in the
case of damage to or destruction of the Premises the Restoration of which cannot be substantially
completed within 180 days from the occurrence or if the damage or destruction occurs during the
last twelve (12) months of the Term that will render the Premises inaccessible or unusable for
purposes of conducting Tenant’s business for a period of ninety (90) days or more, Tenant may elect
to terminate this Lease by giving Landlord written notice of such election within thirty (30) days
following the casualty, in which event Tenant shall have no obligation to Restore the Premises;
provided, however, Tenant shall, at its cost, clear the Premises of debris and return the same to a
safe and clean condition, and deliver any insurance proceeds (other than those for payable for
damages to Tenant’s personal property or business interruption or Tenant’s costs to clear the
Premises) to Landlord and/or Landlord’s mortgagee in accordance with Subparagraph 20(e) below. If
Tenant elects to terminate this Lease in accordance with this paragraph, this Lease shall terminate
thirty (30) days following the date Landlord receives Tenant’s written notice of such election (the
"Termination Date”) upon the payment by Tenant of all rent and all other sums then due and payable
under this Lease to and including the Termination Date. Said termination shall not release Tenant
nor Landlord from the obligations and liabilities of either under this Lease, actual or contingent,
which have accrued on or prior to the Termination Date.



(b) Reconstruction and Repair Requirements. Tenant shall obtain Landlord’s prior approval of all
plans for Restoration work performed by Tenant, which approval shall not be unreasonably withheld
or delayed. Such Restoration work shall be performed in accordance with Paragraph 13 (and for
purposes of such Paragraph 13, the Restoration work shall be treated as Structural Alterations).



(c) No Rent Abatement During Reconstruction. There shall be no rent abatement during Restoration
of the Premises or during that period after any casualty and prior to commencement of Restoration.



(d) Adjustment of Loss and Disbursement of Insurance Proceeds upon Restoration. Except for
Restoration that is reasonably expected to cost less than Fifty Thousand Dollars ($50,000),
Landlord shall have the right to adjust the loss with the insurance company(ies) and all proceeds
of the insurance policies maintained pursuant to Subparagraph 19(b) above (“Proceeds”) shall be
deposited with a depository acceptable to Landlord and Tenant (the “Depository”). If the Proceeds
are insufficient to cover the anticipated cost of Restoration, Tenant shall deposit with the
Depository prior to the commencement of Restoration funds in the amount of such deficiency. The
Depository shall disburse the Proceeds and Tenant’s funds, if applicable, during the course of
Restoration in accordance with customary construction disbursements, including a ten percent (10%)
retention. If, after the Restoration has been completed in accordance with the terms of this
Lease, there are remaining funds held by the Depository, then such funds (after first deducting
from such funds the fees and expenses of the
Depository) shall be delivered to Tenant. If there are not sufficient funds remaining to pay for
the Depository’s fees and expenses, Tenant shall be responsible for the payment of same.



(e) Disbursement of Insurance Proceeds upon Termination. Upon any termination of this Lease under
the provisions of this Paragraph 20, all proceeds from insurance policies maintained under
Subparagraph 19(b) (other than proceeds attributable to Tenant’s personal property or business



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interruption) shall be disbursed and paid to Landlord and/or Landlord’s mortgagee, less such
amounts that are used by Tenant in clearing any debris from the Premises and returning the Premises
to a safe and clean condition as required by this Paragraph 20.



(f) Waiver of Termination. The agreements contained in this Paragraph 20 provide a material part
of the consideration for this Lease and in bargaining for and obtaining its rights under this
Paragraph 20, Tenant waives any right to terminate this Lease under applicable law.



21. EMINENT DOMAIN.




(a) Total or Partial Taking. In case any of the Buildings, or such part of the Premises as shall
materially and substantially interfere with Tenant’s ability to conduct its business upon the
Premises, shall be taken for any public or quasi-public purpose by any lawful power or authority by
exercise of the right of appropriation, condemnation or eminent domain, or sold to prevent such
taking, Tenant shall have the right to terminate this Lease effective as of the date possession is
required to be surrendered to said authority. Tenant shall not assert any claim against Landlord
for any compensation because of such taking, and Landlord shall be entitled to receive the entire
amount of any award without deduction for any estate or interest of Tenant; provided, however, in
the event of such a taking, Tenant shall be entitled to pursue a separate award for losses incurred
by Tenant, including such portion of the award as shall be attributable to goodwill and for damage
to, or the cost of removal of, Tenant’s personal property and the value of Tenant’s leasehold
estate. In the event this Lease is not terminated following a taking, Landlord shall be entitled
to the entire amount of the award without deduction for any estate or interest of Tenant, Landlord
shall restore the Premises to substantially their same condition prior to such partial taking to
the extent of any award proceeds received by Landlord, and a fair and equitable abatement shall be
made to Tenant for the Monthly Base Rent corresponding to the time during which, and to the part of
the Premises of which, Tenant shall be so deprived on account of such taking and restoration. If
the award proceeds from the taking are insufficient to restore the Premises as required by the
preceding sentence and Landlord does not provide its own funds to so restore the Premises, and if
as a result thereof Tenant’s ability to use the Premises as contemplated by this Lease is
materially and substantially impaired, then Tenant may elect to terminate this Lease by giving
Landlord written notice thereof; provided, however, Landlord may rescind such termination by giving
Tenant written notice within ten (10) business days following Landlord’s receipt of such
termination notice from Tenant that Landlord will provide the necessary funds to so restore the
Premises.



(b) Temporary Taking. In the event of taking of the Premises or any part thereof for temporary
use, (i) this Lease will remain unaffected thereby and rent shall not abate and (ii) Tenant shall
be entitled to receive for itself such portion or portions of any award made for such use with
respect to the period of the taking which is within the Lease Term. For purpose of this
Subparagraph 21(b), a temporary taking shall be defined as a taking for a period of one (1) year or
less.



22. DEFAULTS AND REMEDIES.




(a) Defaults. The occurrence of any one or more of the following events will be deemed an Event of
Default by Tenant:



(i) The failure by Tenant to make any payment of rent or additional rent or any other payment
required to be made by Tenant hereunder within three (3) business days after such payment becomes
due (provided that the first two (2) occurrences of such a delinquency in any twelve (12) month
period shall be a default only if Tenant fails to cure each of such delinquencies within five (5) days
after written notice from Landlord thereof).



(ii) The failure by Tenant to observe or perform any of the express or implied covenants or
provisions of this Lease to be observed or performed by Tenant, other than as specified in
Subparagraph 22(a)(i) or (ii) above, where such failure continues (where no other period of time is
expressly provided) for a period of thirty (30) days after written notice thereof from Landlord to
Tenant. The provisions of any such notice will be in lieu of, and not in addition to, any notice
required under applicable law. If the nature of Tenant’s



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default is such that more than thirty
(30) days are reasonably required for its cure, then Tenant will not be deemed to be in default if
Tenant diligently commences such cure within such thirty (30) day period and thereafter diligently
prosecutes such cure to completion.



(iii) (A) The making by Tenant of any general assignment for the benefit of creditors; (B) the
filing by or against Tenant of a petition to have Tenant adjudged a bankrupt or a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days); (C) the appointment
of a trustee or receiver to take possession of substantially all of Tenant’s assets located at the
Premises or of Tenant’s interest in this Lease, where possession is not restored to Tenant within
thirty (30) days; or (D) the attachment, execution or other judicial seizure of substantially all
of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease where such seizure
is not discharged within thirty (30) days.



(b) Landlord’s Remedies; Termination. In the event of any Event of Default by Tenant, in addition
to any other remedies available to Landlord at law or in equity under applicable law, Landlord will
have the immediate right and option to terminate this Lease and all rights of Tenant hereunder. If
Landlord elects to terminate this Lease then, to the extent permitted under applicable law,
Landlord may recover from Tenant (i) The worth at the time of award of any unpaid rent which had
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 rent 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
Term after the time of award exceeds the amount of such rent loss that Tenant proves could be
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, results therefrom including, but not limited to:
reasonable attorneys’ fees and costs; brokers’ commissions; the costs of refurbishment,
alterations, renovation and repair of the Premises, and removal (including the repair of any damage
caused by such removal) and storage (or disposal) of Tenant’s personal property, equipment,
fixtures, Alterations, the Tenant Improvements and any other items which Tenant is required under
this Lease to remove but does not remove, as well as the unamortized value of any free rent,
reduced rent, free parking, reduced rate parking and any Tenant Improvement Allowance or other
costs or economic concessions provided, paid, granted or incurred by Landlord pursuant to this
Lease. The unamortized value of such concessions shall be determined by taking the total value of
such concessions and multiplying such value by a fraction, the numerator of which is the number of
months of the Lease Term not yet elapsed as of the date on which the Lease is terminated, and the
denominator of which is the total number of months of the Lease Term. As used in Subparagraphs
22(b)(i) and (ii) above, the “worth at the time of award” is computed by allowing interest at the
Interest Rate. As used in Subparagraph 22(b)(iii) above, the “worth at the time of award” is
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%).



(c) Landlord’s Remedies; Re-Entry Rights. In the event of any Event of Default by Tenant, in
addition to any other remedies available to Landlord under this Lease, at law or in equity,
Landlord will also have the right, with or without terminating this Lease, to re-enter the Premises
and remove all persons and property from the Premises; such property may be removed and stored in a
public warehouse or elsewhere and/or disposed of at the sole cost and expense of and for the
account of Tenant in accordance with the provisions of Subparagraph 13(h) of this Lease or any
other procedures permitted by applicable law. No re-entry or taking possession of the Premises by
Landlord pursuant to this Subparagraph 22(c) will be construed as an election to terminate this Lease unless a written
notice of such intention is given to Tenant or unless the termination thereof is decreed by a court
of competent jurisdiction.



(d) Landlord’s Remedies; Re-Letting. In the event following an Event of Default Landlord elects to
re-enter the Premises or takes possession of the Premises pursuant to legal proceeding or pursuant
to any notice provided by law, then if Landlord does not elect to terminate this Lease, Landlord
will use reasonably good-faith efforts to relet the Premises or any part thereof on terms and
conditions as



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Landlord in its sole and absolute discretion may deem advisable with the right to
make alterations and repairs to the Premises in connection with such reletting. If Landlord is
able to relet the Premises or any portion thereof, then rents received by Landlord from such
reletting will be applied: first, to the payment of any indebtedness other than rent due hereunder
from Tenant to Landlord; second, to the payment of any cost of such reletting; third, to the
payment of the cost of any alterations and repairs to the Premises incurred in connection with such
reletting; fourth, to the payment of rent due and unpaid hereunder and the residue, if any, will be
held by Landlord and applied to payment of future rent as the same may become due and payable
hereunder. Should that portion of such rents received from such reletting during any month, which
is applied to the payment of rent hereunder, be less than the rent payable during that month by
Tenant hereunder, then Tenant agrees to pay such deficiency to Landlord immediately upon demand
therefor by Landlord. Such deficiency will be calculated and paid monthly.



(e) Landlord’s Remedies; Performance for Tenant. All covenants and agreements to be performed by
Tenant under any of the terms of this Lease are to be performed by Tenant at Tenant’s sole cost and
expense and without any abatement of rent. If Tenant fails to pay any sum of money owed to any
party other than Landlord, for which it is liable under this Lease, or if Tenant fails to perform
any other act on its part to be performed hereunder, and such failure continues for ten (10) days
after notice thereof by Landlord, Landlord may, without waiving or releasing Tenant from its
obligations, but shall not be obligated to, make any such payment or perform any such other act to
be made or performed by Tenant. Tenant agrees to reimburse Landlord upon demand for all sums so
paid by Landlord and all necessary incidental costs, together with interest thereon at the Interest
Rate, from the date of such payment by Landlord until reimbursed by Tenant. This remedy shall be
in addition to any other right or remedy of Landlord set forth in this Paragraph 22.



(f) Late Payment. If Tenant fails to pay any installment of rent within five (5) days of when due
or if Tenant fails to make any other payment for which Tenant is obligated under this Lease within
five (5) days of when due and such failure continues for three (3) business days following written
notice thereof to Tenant, then such late amount will accrue interest at the Interest Rate and
Tenant agrees to pay Landlord as additional rent such interest on such amount from the date such
amount becomes due until such amount is paid. In addition, Tenant agrees to pay to Landlord
concurrently with such late payment amount, as additional rent, a late charge equal to five percent
(5%) of the amount due to compensate Landlord for the extra costs Landlord will incur as a result
of such late payment. The parties agree that (i) it would be impractical and extremely difficult
to fix the actual damage Landlord will suffer in the event of Tenant’s late payment, (ii) such
interest and late charge represents a fair and reasonable estimate of the detriment that Landlord
will suffer by reason of late payment by Tenant, and (iii) the payment of interest and late charges
are distinct and separate in that the payment of interest is to compensate Landlord for the use of
Landlord’s money by Tenant, while the payment of late charges is to compensate Landlord for
Landlord’s processing, administrative and other costs incurred by Landlord as a result of Tenant’s
delinquent payments. Acceptance of any such interest and late charge will not constitute a waiver
of the Tenant’s default with respect to the overdue amount, or prevent Landlord from exercising any
of the other rights and remedies available to Landlord.



(g) Rights and Remedies Cumulative. All rights, options and remedies of Landlord contained in this
Lease will be construed and held to be cumulative, and no one of them will be exclusive of the
other, and Landlord shall have the right to pursue any one or all of such remedies or any other
remedy or relief which may be provided by law or in equity, whether or not stated in this Lease.
Nothing in this Paragraph 22 will be deemed to limit or otherwise affect Tenant’s indemnification of Landlord pursuant to any
provision of this Lease.



23. LANDLORD’S DEFAULT. Landlord will not be in default in the performance of any obligation
required to be performed by Landlord under this Lease unless Landlord fails to perform such
obligation within thirty (30) days after the receipt of written notice from Tenant specifying in
detail Landlord’s failure to perform; provided however, that if the nature of Landlord’s obligation
is such that more than thirty (30) days are required for performance, then Landlord will not be
deemed in default if it commences such performance within such thirty (30) day period and
thereafter diligently pursues the same to completion and provided further that if Landlord’s
failure to perform any of its obligations under Paragraph 14(c)



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creates or results in an emergency
condition that in Tenant’s good faith judgment (i) poses a material risk of personal injury or
death, or of damage to Tenant’s property, or (ii) materially interferes with Tenant’s use and
enjoyment of the Premises, then Tenant may take commercially reasonable action to perform
Landlord’s obligations, and Landlord shall, after notice and opportunity to inspect, reimburse
Tenant for all such reasonable costs within thirty (30) days. Upon any default by Landlord, Tenant
may exercise any of its rights provided at law or in equity, subject to the limitations on
liability set forth in Paragraph 35 of this Lease.



24. ASSIGNMENT AND SUBLETTING.




(a) Restriction on Transfer. Except as expressly provided in this Paragraph 24, Tenant will not,
either voluntarily or by operation of law, assign or encumber this Lease or any interest herein or
sublet the Premises or any part thereof, or permit the use or occupancy of the Premises by any
party other than Tenant and it’s consultants and business partners (any such assignment,
encumbrance, sublease or the like will sometimes be referred to as a “Transfer”), without the prior
written consent of Landlord, which consent Landlord will not unreasonably withheld or delay. All
Transfers shall expire no later than the expiration of the Initial Term or Option Term, as and if
exercised.



(b) Corporate and Partnership Transfers. For purposes of this Paragraph 24, if Tenant is a
corporation, partnership or other entity, any transfer, assignment, encumbrance or hypothecation of
thirty-five percent (35%) or more (individually or in the aggregate) of any stock or other
ownership interest in such entity, and/or any transfer, assignment, hypothecation or encumbrance of
any controlling ownership or voting interest in such entity, will be deemed a Transfer and will be
subject to all of the restrictions and provisions contained in this Paragraph 24. Notwithstanding
the foregoing, the immediately preceding sentence will not apply to any transfers of stock of
Tenant if Tenant is a publicly-held corporation or partnership and such stock is transferred
publicly over a recognized security exchange or over-the-counter market.



(c) Permitted Controlled Transfers. Notwithstanding the provisions of this Paragraph 24 to the
contrary, Tenant may assign this Lease or sublet the Premises or any portion thereof (“Permitted
Transfer”), without Landlord’s consent and without extending any sublease termination option to
Landlord, to any parent, subsidiary or affiliate corporation which controls, is controlled by or is
under common control with Tenant, or to any corporation resulting from a merger or consolidation
with Tenant, or to any person or entity which acquires all the assets of Tenant’s business as a
going concern, provided that: (i) at least twenty (20) days prior to such assignment or sublease,
Tenant delivers to Landlord the financial statements and other financial and background information
of the assignee or sublessee described in Subparagraph 24(d) below (except in the event of a merger
or consolidation involving one or more publicly-held corporations or partnerships, in which event
no such disclosure will be required until after the public announcement of such merger or
consolidation; (ii) if an assignment, the assignee assumes, in full, the obligations of Tenant
under this Lease (or if a sublease, the sublessee of a portion of the Premises or Term assumes, in
full, the obligations of Tenant with respect to such portion); (iii) the tangible net worth of the
assignee or sublessee as of the time of the proposed assignment or sublease is not less than Fifty
Million Dollars ($50,000,000); (iv) Tenant remains fully liable under this Lease; and (v) the use
of the Premises under Paragraph 8 remains unchanged.



(d) Transfer Notice. If Tenant desires to effect a Transfer, then at least thirty (30) days prior
to the date when Tenant desires the Transfer to be effective (the “Transfer Date”), Tenant agrees
to give Landlord a notice (the “Transfer Notice”), stating the name, address and business of the
proposed assignee, sublessee or other transferee (sometimes referred to hereinafter as
“Transferee”), reasonable information (including references) concerning the character, ownership,
and financial condition of the proposed Transferee, the Transfer Date, any ownership or commercial
relationship between Tenant and the proposed Transferee, and the consideration and all other
material terms and conditions of the proposed Transfer, all in such detail as Landlord may
reasonably require. If Landlord reasonably requests additional detail, the Transfer Notice will
not be deemed to have been received until Landlord receives such additional detail, and Landlord
may withhold consent to any Transfer until such information is provided to it.



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(e) Landlord’s Options. Within fifteen (15) days of Landlord’s receipt of any Transfer Notice, and
any additional information requested by Landlord concerning the proposed Transferee’s financial
responsibility, Landlord will elect to do one of the following (i) consent to the proposed Transfer
or (ii) refuse such consent, which refusal shall be on reasonable grounds including, without
limitation, those set forth in Subparagraph 24(f) below. If Landlord does not respond to a
Transfer Notice within such fifteen (15) day period, Tenant shall provide Landlord with a second
Transfer Notice. If Landlord does not respond to the second Transfer Notice within fifteen (15)
days, Landlord shall be deemed to consent to such Transfer.



(f) Reasonable Disapproval. Landlord and Tenant hereby acknowledge that Landlord’s disapproval of
any proposed Transfer pursuant to Subparagraph 24(e) will be deemed reasonably withheld if based
upon any reasonable factor, including, without limitation, any or all of the following factors:
(i) the use of the Premises by the Transferee (A) is not permitted by the use provisions in
Paragraph 8 hereof, or (B) otherwise poses a risk of increased liability to Landlord; (ii) the
Transferee does not have the financial capability to fulfill the obligations imposed by the
Transfer and this Lease; or (iii) the Transferee poses a business or other economic risk which
Landlord reasonably deems unacceptable.



(g) Additional Conditions. A condition to Landlord’s consent to any Transfer of this Lease will be
the delivery to Landlord of a true copy of the fully executed instrument of assignment, sublease,
transfer or hypothecation, and, in the case of an assignment, the delivery to Landlord of an
agreement executed by the Transferee in form and substance reasonably satisfactory to Landlord,
whereby the Transferee assumes and agrees to be bound by all of the terms and provisions of this
Lease and to perform all of the obligations of Tenant hereunder. As a condition for granting its
consent to any assignment or sublease, Landlord may require that the assignee or sublessee remit
directly to Landlord on a monthly basis, all monies due to Tenant by said assignee or sublessee.
As a condition to Landlord’s consent to any sublease, such sublease must provide that it is subject
and subordinate to this Lease and to all mortgages; that Landlord may enforce the provisions of the
sublease, including collection of rent; that in the event of termination of this Lease for any
reason, including without limitation a voluntary surrender by Tenant, or in the event of any
reentry or repossession of the Premises by Landlord, Landlord may, at its option, either (i)
terminate the sublease, or (ii) take over all of the right, title and interest of Tenant, as
sublessor, under such sublease, in which case such sublessee will attorn to Landlord, but that
nevertheless Landlord will not (1) be liable for any previous act or omission of Tenant under such
sublease, (2) be subject to any defense or offset previously accrued in favor of the sublessee
against Tenant, or (3) be bound by any previous modification of any sublease made without
Landlord’s written consent, or by any previous prepayment by sublessee of more than one month’s
rent.



(h) Excess Rent. If Landlord consents to any assignment of this Lease, and the assignee has agreed
to pay Tenant as consideration for the assignment any amount in excess of the rent payable
hereunder for the remainder of the Lease Term, then Tenant agrees to pay to Landlord, as additional
rent, fifty percent (50%) of such excess as and when such sums and other consideration are due and
payable by the assignee to or for the benefit of Tenant (or, if Landlord so requires, and without
any release of Tenant’s liability for the same, Tenant agrees to instruct the assignee to pay such
sums and other consideration directly to Landlord). If for any sublease, Tenant receives rent or other
consideration, either initially or over the term of the sublease, in excess of the rent fairly
allocable to the portion of the Premises which is subleased based on square footage, Tenant shall
retain all of the excess of each such payment of rent or other consideration received by Tenant.
Notwithstanding the preceding, Tenant’s sub-lease with Colibrys shall be excluded from the
requirements of this paragraph.



(i) No Release. No Transfer or subletting will release Tenant of Tenant’s obligations under
this Lease or alter the primary liability of Tenant to pay the rent and to perform all other
obligations to be performed by Tenant hereunder. Landlord may require that any Transferee remit
directly to Landlord on a monthly basis, all monies due Tenant by said Transferee, in which event
Landlord agrees to promptly notify Tenant of such requirement. However, the acceptance of rent by
Landlord from any other person will not be deemed to be a waiver by Landlord of any provision
hereof. Consent by Landlord to one Transfer will not be deemed consent to any subsequent Transfer.
In the event of default by any



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Transferee of Tenant or any successor of Tenant in the performance
of any of the terms hereof, Landlord may proceed directly against Tenant without the necessity of
exhausting remedies against such Transferee or successor. Landlord may consent to subsequent
assignments of this Lease or sublettings or amendments or modifications to this Lease with
assignees of Tenant, without notifying Tenant, or any successor of Tenant, and without obtaining
its or their consent thereto and any such actions will not relieve Tenant of liability under this
Lease.



(J) Administrative and Attorneys’ Fees. If Tenant effects a Transfer or requests the consent of
Landlord to any Transfer (whether or not such Transfer is consummated), then, upon demand, Tenant
agrees to pay Landlord all third party, out-of-pocket costs and expenses, including but not limited
to reasonable attorneys’ and paralegal fees incurred by Landlord in connection with such Transfer
or request for consent. Acceptance of the cost and/or expense reimbursement will in no event
obligate Landlord to consent to any proposed Transfer.



25. SUBORDINATION. Without the necessity of any additional document being executed by Tenant for
the purpose of effecting a subordination, and at the election of Landlord or any mortgagee or
beneficiary with a deed of trust encumbering the Premises, or any lessor of a ground or underlying
lease with respect to the Premises, this Lease will be subject and subordinate at all times to:
(i) all ground leases or underlying leases which may now exist or hereafter be executed affecting
the Premises; and (ii) the lien of any mortgage or deed of trust which may now exist or hereafter
be executed for which the Premises or any leases thereof, or Landlord’s interest and estate in any
of said items, is specified as security; provided, however, that the subordination of this Lease to
any mortgage or deed of trust or any ground or underlying lease is subject to Tenant’s receipt of a
commercially reasonable non-disturbance agreement from the holder of such mortgage or deed of trust
or such ground or underlying lease in which such holder agrees not to disturb Tenant’s possession
of the Premises so long as no Tenant Event of Default has occurred and is continuing under this
Lease. Notwithstanding the foregoing, Landlord reserves the right to subordinate any such ground
leases or underlying leases or any such liens to this Lease. If any such ground lease or
underlying lease terminates for any reason or any such mortgage or deed of trust is foreclosed or a
conveyance in lieu of foreclosure is made for any reason, at the election of Landlord’s successor
in interest, Tenant agrees to attorn to and become the tenant of such successor in which event
Tenant’s right to possession of the Premises will not be disturbed as long as Tenant is not in
default under this Lease. Tenant hereby waives its rights under any law which gives or purports to
give Tenant any right to terminate or otherwise adversely affect this Lease and the obligations of
Tenant hereunder in the event of any such foreclosure proceeding or sale. Tenant covenants and
agrees to execute and deliver, upon demand by Landlord and in the form reasonably required by
Landlord, any additional documents evidencing the priority or subordination of this Lease and
Tenant’s attornment agreement with respect to any such ground lease or underlying leases or the
lien of any such mortgage or deed of trust. If Tenant fails to sign and return any such documents
or engage in reasonable, good faith negotiations on the terms and conditions of such documents
within ten (10) business days of receipt, Tenant will be in default hereunder.



26. ESTOPPEL CERTIFICATE.




(a) Tenant’s Obligations. Within ten (10) days following any written request which Landlord may
make from time to time, Tenant agrees to execute and deliver to Landlord a statement, in a form
substantially similar to the form of Exhibit “C” attached hereto or as may reasonably be required
by Landlord’s lender, certifying: (i) the date of commencement of this Lease; (ii) the fact that
this Lease is unmodified and in full force and effect (or, if there have been modifications, that
this Lease is in full force and effect, and stating the date and nature of such modifications);
(iii) the date to which the rent and other sums payable under this Lease have been paid; (iv) that
there are no current defaults under this Lease by either Landlord or Tenant except as specified in
Tenant’s statement; and (v) such other factual matters pertaining to this lease as are described in
Exhibit C or are otherwise reasonably requested by Landlord. Landlord and Tenant intend that any
statement delivered pursuant to this Paragraph 26 may be relied upon by any mortgagee, beneficiary,
purchaser or prospective purchaser of the Premises or any interest therein.



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(b) Tenant’s Failure to Deliver. Tenant’s failure to deliver such statement within such time will
be conclusive upon Tenant (i) that this Lease is in full force and effect, without modification
except as may be represented by Landlord, (ii) that there are no uncured defaults in Landlord’s
performance, and (iii) that not more than one (1) month’s rent has been paid in advance. Without
limiting the foregoing, if Tenant fails to deliver any such statement within such ten (10) business
day period, Landlord may deliver to Tenant an additional request for such statement and Tenant’s
failure to deliver such statement to Landlord within five (5) business days after delivery of such
additional request will constitute a default under this Lease. Tenant agrees to indemnify and
protect Landlord from and against any and all claims, damages, losses, liabilities and expenses
(including attorneys’ fees and costs) attributable to any failure by Tenant to timely deliver any
such estoppel certificate to Landlord as required by this Paragraph 26.



27. SECURITY MEASURES. Tenant hereby acknowledges that Landlord shall have no obligation to
provide guard service or other security measures for the benefit of the Premises. Tenant hereby
assumes all responsibility for the protection of Tenant and its agents, employees, contractors,
invitees and guests, and the property thereof, from acts of third parties, including keeping doors
locked and other means of entry to the Building closed, whether or not Landlord, at its option,
elects to provide security protection for the Premises or any portion thereof. Tenant further
assumes the risk that any safety and security devices, services and programs which Landlord elects,
in its sole discretion, to provide may not be effective, or may malfunction or be circumvented by
an unauthorized third party, and Tenant shall, in addition to its other insurance obligations under
this Lease, obtain its own insurance coverage to the extent Tenant desires protection against
losses related to such occurrences. Tenant shall cooperate in any reasonable safety or security
program developed by Landlord or required by law.



28. RULES AND REGULATIONS. Tenant agrees to faithfully observe and comply with the “Rules and
Regulations,” a copy of which is attached hereto and incorporated herein by this reference as
Exhibit “D”, and all reasonable and nondiscriminatory modifications thereof and additions
thereto from time to time put into effect by Landlord



29. MODIFICATION AND CURE RIGHTS OF LANDLORD’S MORTGAGEES AND LESSORS.




(a) Modifications. If, in connection with Landlord’s obtaining or entering into any financing or
ground lease for any portion of the Premises, the lender or ground lessor requests modifications to
this Lease, Tenant, within ten (10) business days after request therefor, agrees to execute an
amendment to this Lease incorporating such modifications, provided such modifications are
reasonable and do not increase the obligations of Tenant under this Lease or adversely affect the
leasehold estate created by this Lease.



(b) Cure Rights. In the event of any default on the part of Landlord, Tenant will give notice by
registered or certified mail to any beneficiary of a deed of trust or mortgage covering the
Premises or ground lessor of Landlord whose address has been furnished in writing to Tenant, and
Tenant agrees to offer such beneficiary, mortgagee or ground lessor a reasonable opportunity to cure the default
(including with respect to any such beneficiary or mortgagee, time to obtain possession of the
Premises, subject to this Lease and Tenant’s rights hereunder, by power of sale or a judicial
foreclosure, if such should prove necessary to effect a cure).



30. DEFINITION OF LANDLORD. The term “Landlord,” as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, means and includes only the owner or owners, at
the time in question, of the fee title of the Premises or the lessees under any ground lease, if
any. In the event of any transfer, assignment or other conveyance or transfers of any such title
(other than a transfer for security purposes only), Landlord herein named (and in case of any
subsequent transfers or conveyances, the then grantor) will be automatically relieved from and
after the date of such transfer, assignment or conveyance of all liability as respects the
performance of any covenants or obligations on the part of Landlord contained in this Lease
thereafter to be performed, so long as the transferee assumes in writing all such covenants and
obligations of Landlord arising after the date of such transfer. Landlord and Landlord’s
transferees and assignees have the absolute right to transfer all or any portion of their
respective title and interest in the Premises and/or this Lease without the consent of Tenant, and



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such transfer or subsequent transfer will not be deemed a violation on Landlord’s part of any of
the terms and conditions of this Lease.



31. WAIVER. The waiver by either party of any breach of any term, covenant or condition herein
contained will not be deemed to be a waiver of any subsequent breach of the same or any other term,
covenant or condition herein contained, nor will any custom or practice which may develop between
the parties in the administration of the terms hereof be deemed a waiver of or in any way affect
the right of either party to insist upon performance in strict accordance with said terms. The
subsequent acceptance of rent or any other payment hereunder by Landlord will not be deemed to be a
waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other
than the failure of Tenant to pay the particular rent so accepted, regardless of Landlord’s
knowledge of such preceding breach at the time of acceptance of such rent. No acceptance by
Landlord of a lesser sum than the basic rent and additional rent or other sum then due will be
deemed to be other than on account of the earliest installment of such rent or other amount due,
nor will any endorsement or statement on any check or any letter accompanying any check be deemed
an accord and satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord’s right to recover the balance of such installment or other amount or pursue any other
remedy provided in this Lease. The consent or approval of Landlord to or of any act by Tenant
requiring Landlord’s consent or approval will not be deemed to waive or render unnecessary
Landlord’s consent or approval to or of any subsequent similar acts by Tenant.



32. PARKING. Tenant and Tenant’s Authorized User’s shall have the exclusive right to use the
parking area at no additional charge. Tenant and Tenant’s Authorized Users shall comply with all
rules and regulations regarding parking set forth in Exhibit “D” attached hereto and Tenant agrees
to cause its employees, subtenants, assignees, contractors, suppliers, customers and invitees to
comply with such rules and regulations. Landlord reserves the right from time to time to modify
and/or adopt such other reasonable and non-discriminatory rules and regulations for the parking
area as it deems reasonably necessary for the use of the parking area.



33. INTENTIONALLY DELETED.




34. SIGNS. The size, design, color and other physical aspects of any and all exterior sign(s)
installed by Tenant during the Lease Term will be subject to (i) any covenants, conditions or
restrictions governing the Premises, and (ii) any applicable municipal or governmental permits,
approvals, guidelines and restrictions (including, without limitation, any guidelines issued or
restrictions imposed by the City). Tenant will be solely responsible for all costs for
installation, maintenance, repair and removal of any Tenant identification sign(s). If Tenant
fails to remove Tenant’s sign(s) upon termination of this Lease and repair any damage caused by
such removal, Landlord may do so at Tenant’s sole cost and expense.



35. LIMITATION ON LIABILITY. In consideration of the benefits accruing hereunder, Tenant on behalf
of itself and all successors and assigns of Tenant covenants and agrees that, in the event of any
actual or alleged failure, breach or default hereunder by Landlord: (a) Tenant’s recourse against
Landlord for monetary damages will be limited to Landlord’s interest in the Premises including,
subject to the prior rights of any Mortgagee, Landlord’s interest in the rents of the Premises and
any insurance proceeds payable to Landlord; (b) Except as may be necessary to secure jurisdiction
of the partnership or company, no partner or member of Landlord shall be sued or named as a party
in any suit or action and no service of process shall be made against any partner or member of
Landlord; (c) No partner or member of Landlord shall be required to answer or otherwise plead to
any service of process; (d) No judgment will be taken against any partner or member of Landlord and
any judgment taken against any partner or member of Landlord may be vacated and set aside at any
time after the fact; (e) No writ of execution will be levied against the assets of any partner or
member of Landlord; (f) The obligations under this Lease do not constitute personal obligations of
the individual members, partners, directors, officers or shareholders of Landlord, and Tenant shall
not seek recourse against the individual members, partners, directors, officers or shareholders of
Landlord or any of their personal assets for satisfaction of any liability in respect to this
Lease; and (g) These covenants and agreements are enforceable both by Landlord and also by any
partner or member of Landlord.



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36. FINANCIAL STATEMENTS. Provided Tenant is and remains a public corporation and its financials
are timely filed and therefore available online, Landlord shall obtain same as necessary online.
However, in the event Tenant is no longer a public company or it fails to timely file its financial
statements as required of a public company, Tenant, at any time during the Term of this Lease upon
ten (10) business days prior written notice from Landlord, agrees to provide Landlord with a
current financial statement for Tenant and any guarantors of Tenant and financial statements for
the two (2) years prior to the current financial statement year for Tenant and any guarantors of
Tenant. Such statements are to be prepared in accordance with generally accepted accounting
principles and, if such is the normal practice of Tenant, audited by an independent certified
public accountant except when Landlord’s demand is based on Tenant’s failure to timely file in
which case the statements may be reviewed provided disclosing reviewed statements does not violate
any law applicable to Tenant, in which case Tenant may provide internal financial statements.
Landlord agrees to keep the information in Tenant’s financial statements confidential and not to
such disclose such information to any person or entity, except to any actual or prospective
purchasers of the Premises, any actual or prospective lenders on the Premises, any actual or
prospective investors in Landlord, and to the respective accountants, attorneys and advisors of
Landlord and of each of the foregoing parties, and except as may be required by law or by court
order.



37. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that upon Tenant paying the rent
required under this Lease and paying all other charges and performing all of the covenants and
provisions on Tenant’s part to be observed and performed under this Lease, Tenant may peaceably and
quietly have, hold and enjoy the Premises in accordance with this Lease without hindrance or
molestation by Landlord or its employees or agents or by any third party claiming superior title to
Landlord.



38. MISCELLANEOUS.




(a) Conflict of Laws. This Lease shall be governed by and construed solely pursuant to the laws of
the State, without giving effect to choice of law principles thereunder.



(b) Successors and Assigns. Except as otherwise provided in this Lease, all of the covenants,
conditions and provisions of this Lease shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, personal representatives, successors and assigns.



(c) Professional Fees and Costs. If either Landlord or Tenant should bring suit against the other
with respect to this Lease, then all costs and expenses, including without limitation, actual
professional fees and costs such as appraisers’, accountants’ and attorneys’ fees and costs,
incurred by the party which prevails in such action, whether by final judgment or out of court
settlement, shall be paid by the other party, which obligation on the part of the other party shall
be deemed to have accrued on the date of
the commencement of such action and shall be enforceable whether or not the action is prosecuted to
judgment. As used herein, attorneys’ fees and costs shall include, without limitation, attorneys’
fees, costs and expenses incurred in connection with any (i) post judgment motions; (ii) contempt
proceedings; (iii) garnishment, levy, and debtor and third party examination; (iv) discovery; and
(v) bankruptcy litigation.



(d) Terms and Headings. The words “Landlord” and “Tenant” as used herein shall include the plural
as well as the singular. Words used in any gender include other genders. The paragraph headings
of this Lease are not a part of this Lease and shall have no effect upon the construction or
interpretation of any part hereof.



(e) Time. Time is of the essence with respect to the performance of every provision of this Lease
in which time of performance is a factor.



(f) Prior Agreement; Amendments. This Lease constitutes and is intended by the parties to be a
final, complete and exclusive statement of their entire agreement with respect to the subject
matter of this Lease. This Lease supersedes any and all prior and contemporaneous agreements and
understandings of any kind relating to the subject matter of this Lease. There are no other
agreements, understandings, representations, warranties, or statements, either oral or in written
form, concerning the subject matter of



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this Lease. No alteration, modification, amendment or interpretation of this Lease shall be binding on the parties unless contained in a writing which is
signed by both parties.



(g) Separability. The provisions of this Lease shall be considered separable such that if any
provision or part of this Lease is ever held to be invalid, void or illegal under any law or
ruling, all remaining provisions of this Lease shall remain in full force and effect to the maximum
extent permitted by law.



(h) Recording. Tenant shall have the right but not the obligation to record a memorandum of
lease in a recordable form setting forth the interest of the parties, the description of the
leasehold interest, the term of the lease including any options and other matters mutually
agreeable. It is agreed that the memorandum of lease shall contain no information or
representation concerning the Rent or other financial obligations or conditions of the Lease. If
the disclosure of any such financial information is required in order to record the memorandum of
lease, then neither Landlord nor Tenant shall have the right to record such a memorandum. The
memorandum of lease shall be prepared by and the costs of recordation shall be paid by the party
requesting the recordation thereof.



(i) Counterparts. This Lease may be executed in one or more counterparts, each of which shall
constitute an original and all of which shall be one and the same agreement.



(j) Press Release. Tenant shall not issue any publicity or press release concerning this Lease
without the prior written approval of Landlord, such approval not to be unreasonably witheld.



(k) Non-Discrimination. Tenant acknowledges and agrees that there shall be no discrimination
against, or segregation of, any person, group of persons, or entity on the basis of race, color,
creed, religion, age, sex, marital status, national origin, or ancestry in the leasing, subleasing,
transferring, assignment, occupancy, tenure, use, or enjoyment of the Premises, or any portion
thereof.





	39.	 	EXECUTION OF LEASE.




(a) Joint and Several Obligations. If more than one person executes this Lease as Tenant, their
execution of this Lease will constitute their covenant and agreement that (i) each of them is
jointly and severally liable for the keeping, observing and performing of all of the terms,
covenants, conditions, provisions and agreements of this Lease to be kept, observed and performed
by Tenant, and (ii) the term “Tenant” as used in this Lease means and includes each of them jointly
and severally. The act of or notice from, or notice or refund to, or the signature of any one or
more of them, with respect to the tenancy of this Lease, including, but not limited to, any
renewal, extension, expiration, termination or modification of this Lease, will be binding upon
each and all of the persons executing this Lease as Tenant with the same force and effect as if
each and all of them had so acted or so given or received such notice or refund or so signed.



(b) Tenant as Corporation or Partnership. If Tenant executes this Lease as a corporation or
partnership, then Tenant and the persons executing this Lease on behalf of Tenant represent and
warrant that such entity is duly qualified and in good standing to do business in Texas and that
the individuals executing this Lease on Tenant’s behalf are duly authorized to execute and deliver
this Lease on its behalf, and in the case of a corporation, in accordance with a duly adopted
resolution of the board of directors of Tenant, a copy of which is to be delivered to Landlord on
execution hereof, if requested by Landlord, and in accordance with the by-laws of Tenant, and, in
the case of a partnership, in accordance with the partnership agreement and the most current
amendments thereto, if any, copies of which are to be delivered to Landlord on execution hereof, if
requested by Landlord, and that this Lease is binding upon Tenant in accordance with its terms.



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



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IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed by their duly authorized
representatives as of the date first above written.




	 	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	 	 	LANDLORD:
	 
	 	 	 	 	 	 	 	 	 	 
	INPUT-OUTPUT, INC.,

a Delaware corporation	 	Stafford Office Park DST, a Delaware
Statutory Trust, by Stafford Office Park
Sponsor, LLC, a Delaware limited liability
company, its discretionary trustee
	By: /s/ J. Michael Kirksey	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	Print Name:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Print Title: EVP and CFO	 	By:	 	/s/ Kevin P. Kaseff
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 Kevin P. Kaseff
	 

	 	 	 	 	 	Title:
	 Manager
	 
	 	 	 	 	 	 	 	 	 	 
	By: 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	Print Name:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Print Title:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 





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EXHIBIT A




SITE PLAN




[To be supplied]




TENANT’S INITIALS                      LANDLORD’S INITIALS                     




EXHIBIT “A”

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EXHIBIT B




INTENTIONALLY OMITTED




TENANT’S INITIALS                      LANDLORD’S INITIALS                     




EXHIBIT “B”

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EXHIBIT C




ESTOPPEL CERTIFICATE




     This TENANT ESTOPPEL CERTIFICATE is executed as of the Estoppel Execution Date by Tenant, who
is the current tenant or lessee under that certain written lease agreement (“Lease”) dated as of
the Lease Date by and between Original Landlord and Original Tenant for the lease of the Premises.



	 	 	 
	Definitions:
	 	 
	Estoppel Execution Date:

	 	                                        ,                      200_
	 
	 	 
	Lease Date:

	 	                                        
	 
	 	 
	Tenant:

	 	                                        
	 
	 	 
	Landlord:

	 	                                        
	 
	 	 
	Premises:

	 	                                        
	 
	 	 
	Monthly Base Rental:

	 	                                        
	 
	 	 
	Security Deposit:

	 	$
	 
	 	 
	Advance Rent:

	 	$
	 
	 	 
	Lease Term (incl. Option
	 	 
	Periods Exercised):

	 	                                        
	 
	 	 
	Commencement Date:

	 	                                        
	 
	 	 
	Expiration Date:

	 	                                        
	 
	 	 
	 
	 	 
	Unexercised Option Periods:

	 	                                        
	 
	 	 
	Current Rent Date:

	 	                                        
	 
	 	 
	Tenant’s Address for Notices:

	 	                                        
	 
	 	 
	 

	 	                                        
	 
	 	 
	 

	 	                                        






          Tenant represents, warrants, certifies and states to                                                             , a
                                        , and its successors, assignees, and lenders (collectively, “                     ”), each of the
following:



1. A true and correct copy of the Lease and all amendments thereto is attached hereto as Exhibit
“A” incorporated herein by this reference. The Lease is presently in full force and effect and has
not been amended, supplemented, modified or otherwise changed, except pursuant to the written
amendments attached in Exhibit “A” attached hereto.



2. All space and improvements leased by Tenant pursuant to the Lease have been completed and
furnished in accordance with the provisions of the Lease, and Tenant has accepted, taken possession
of, and is currently occupying, the Premises.




TENANT’S INITIALS                      LANDLORD’S INITIALS                     




EXHIBIT “C”

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3. Landlord has satisfied all commitments made to induce Tenant to enter in the Lease, and to the
best of Tenant’s knowledge, Landlord is not in any respect in default in the performance by
Landlord of its obligations under the Lease.



4. Tenant is not in any respect in material default or breach of the Lease and has not assigned,
sublet, transferred or hypothecated its interest under the Lease, except as shown on Exhibit “B”
attached hereto and incorporated herein by this reference.



5. The Lease Term commenced on the Commencement Date and expires on the Expiration Date.



6. The Lease provides for no extensions or renewals beyond the Lease Term except the Unexercised
Option Periods. Tenant has not exercised any of the Unexercised Option Periods. Tenant has no
option or preferential right to purchase or lease all or any part of the Premises nor any right,
title or interest with respect to the Premises other than as a tenant or lessee under the Lease.



7. Tenant has no right to cancel the Lease prior to the Expiration Date.



8. Tenant has paid the Monthly Base Rent and all other monetary obligations under the Lease through
the Current Rent Date.



9. There is no period of free rent, rental abatement or reduction, except the Free Rent Periods.
Landlord has not given or conceded to Tenant any other concessions, abatements or compromises, free
rent, rental abatement or reduction with respect to the rental obligations under the Lease.



10. If the Lease requires a security deposit, Tenant has deposited an amount equal to the Security
Deposit with Landlord. No person or entity has guaranteed any portion of Tenant’s obligations
under the Lease.



11. There are no offsets or credits against any rentals payable or which have been paid under the
Lease, and Tenant has made no payment to Landlord as a security deposit or advance or prepaid
rental except any Security Deposit and any Advance Rent and payments made not earlier than thirty
(30) days prior to the date upon which such payment is due.



12. Tenant’s current address for receipt of notices, elections, demands or other communications
under the Lease is Tenant’s Address for Notices.



13. Tenant has received no notice of any sale, transfer, pledge, assignment, or hypothecation of
the Lease, or the rentals owed thereunder, by Landlord.




     Tenant makes this statement for the benefit and protection of                                          and its
successors, assigns, and lenders, with the understanding that each or all of said parties intends
to and may rely on this statement in making a determination about purchasing or financing certain
real property, which real property includes the Premises.



     IN WITNESS WHEREOF, Tenant executes this Tenant Estoppel Certificate as of the Estoppel
Execution Date.



     



	 	 	 	 	 
	 

	 	TENANT:
	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Its:	 	 
	 

	 	 	 	 





TENANT’S INITIALS                      LANDLORD’S INITIALS                     




EXHIBIT
“C”

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EXHIBIT D




RULES AND REGULATIONS




EXHIBIT “D”

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