Document:

exv10w20

 

Exhibit 10.20

LEASE AGREEMENT BETWEEN

2855 E. COTTONWOOD PARKWAY, L.C., as

Landlord

and

ADS ALLIANCE DATA SYSTEMS, INC., as

Tenant

DATED ______________________________

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	PART I SUMMARY OF BASIC LEASE INFORMATION	 	 	1	 
	A.	 	PREMISES (Lease Provisions, Paragraph 2)	 	 	1	 
	B.	 	LEASE TERM (Lease Provisions, Paragraph 3)	 	 	1	 
	C.	 	BASE RENT (Lease Provisions, Paragraph 5)	 	 	1	 
	D.	 	ADDITIONAL RENT (Lease Provisions, Paragraph 5.3)	 	 	2	 
	E.	 	SECURITY DEPOSIT (Glossary of Defined Terms)	 	 	2	 
	F.	 	PARKING CHARGE (Lease Provisions, Paragraph 5.5)	 	 	2	 
	G.	 	ADDRESSES FOR NOTICES (Lease Provisions, Paragraph 27.7)	 	 	2	 
	H.	 	TENANT IMPROVEMENTS
AND SPACE PLAN (Work Letter Agreement)	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	PART II LEASE PROVISIONS	 	 	3	 
	1.
	 	DEFINITIONS	 	 	 	 	3	 
	2.
	 	PREMISES	 	 	 	 	3	 
	3.
	 	TERM	 	 	 	 	3	 
	4.
	 	USE	 	 	 	 	3	 
	5.
	 	RENT	 	 	 	 	4	 
	 
	 	5.1	 	Base Rent	 	 	4	 
	 
	 	5.2	 	No Other Adjustment of Base Rent	 	 	4	 
	 
	 	5.3	 	Additional Rent	 	 	4	 
	 
	 	5.4	 	Operating Expenses	 	 	5	 
	 
	 	5.5	 	Parking Charge	 	 	7	 
	 
	 	5.6	 	Payment of Rent	 	 	8	 
	 
	 	5.7	 	Delinquent Payments and Handling Charge	 	 	8	 
	 
	 	5.8	 	Security Deposit	 	 	8	 
	 
	 	5.9	 	Holding Over	 	 	9	 
	6.	 	CONSTRUCTION OF IMPROVEMENTS	 	 	9	 
	 
	 	6.1	 	General	 	 	9	 
	 
	 	6.2	 	Access by Tenant Prior to Commencement of Term	 	 	9	 
	 
	 	6.3	 	Commencement Date; Adjustments to Commencement Date	 	 	10	 
	7.	 	SERVICES TO BE FURNISHED BY LANDLORD	 	 	10	 
	 
	 	7.1	 	General	 	 	10	 
	 
	 	7.2	 	Keys and/or Access Cards	 	 	11	 
	 
	 	7.3	 	Tenant Identity, Signs and Other Matters	 	 	11	 
	 
	 	7.4	 	Charges	 	 	11	 
	 
	 	7.5	 	Operating Hours	 	 	12	 
	8.	 	REPAIR AND MAINTENANCE	 	 	12	 
	 
	 	8.1	 	By Landlord	 	 	12	 
	 
	 	8.2	 	By Tenant	 	 	12	 
	9.	 	TAXES ON TENANT’S PROPERTY	 	 	12	 
	10.	 	TRANSFER BY TENANT	 	 	12	 
	 
	 	10.1	 	General	 	 	12	 
	 
	 	10.2	 	Conditions	 	 	13	 
	 
	 	10.3	 	Liens	 	 	13	 
	 
	 	10.4	 	Assignments in Bankruptcy	 	 	14	 
	11.	 	ALTERATIONS	 	 	14	 
	12.	 	PROHIBITED USES	 	 	14	 
	 
	 	12.1	 	General	 	 	14	 
	 
	 	12.2	 	Hazardous Materials	 	 	14	 
	 
	 	12.3	 	Overstandard Tenant Use	 	 	15	 
	13.	 	ACCESS BY LANDLORD	 	 	15	 
	14.	 	CONDEMNATION	 	 	15	 
	15.	 	CASUALTY	 	 	16	 
	 
	 	15.1	 	General	 	 	16	 
	 
	 	15.2	 	Acts of Tenant	 	 	16	 
	 
	 	15.3	 	Last Year of Term	 	 	16	 
	16.	 	SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT	 	 	17	 
	 
	 	16.1	 	General	 	 	17	 
	 
	 	16.2	 	Attornment	 	 	17	 
	17.	 	INSURANCE	 	 	17	 
	 
	 	17.1	 	General	 	 	17	 
	 
	 	17.2	 	Waiver of Subrogation	 	 	18	 

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	 	 	 	 	 	 	Page	 
	 
	 	17.3	 	Landlord’s Insurance	 	 	18	 
	18.	 	INDEMNITY	 	 	19	 
	19.	 	THIRD PARTIES; ACTS OF FORCE MAJEURE; EXCULPATION	 	 	19	 
	20.	 	SECURITY INTEREST	 	 	19	 
	21.	 	CONTROL OF COMMON AREAS	 	 	19	 
	22.	 	RIGHT TO RELOCATE	 	 	20	 
	23.	 	QUIET ENJOYMENT	 	 	20	 
	24.	 	DEFAULT BY TENANT	 	 	20	 
	 
	 	24.1	 	Events of Default	 	 	20	 
	 
	 	24.2	 	Remedies of Landlord	 	 	20	 
	 
	 	24.3	 	Payment by Tenant	 	 	21	 
	 
	 	24.4	 	Reletting	 	 	21	 
	 
	 	24.5	 	Landlord’s Right to Pay or Perform	 	 	22	 
	 
	 	24.6	 	No Waiver; No Implied Surrender	 	 	22	 
	25.	 	DEFAULTS BY LANDLORD	 	 	22	 
	26.	 	RIGHT OF REENTRY	 	 	22	 
	27.	 	MISCELLANEOUS	 	 	23	 
	 
	 	27.1	 	Independent Obligations; No Offset	 	 	23	 
	 
	 	27.2	 	Time of Essence	 	 	23	 
	 
	 	27.3	 	Applicable Law	 	 	23	 
	 
	 	27.4	 	Assignment by Landlord	 	 	23	 
	 
	 	27.5	 	Estoppel Certificates; Financial Statements	 	 	23	 
	 
	 	27.6	 	Signs, Building Name and Building Address	 	 	23	 
	 
	 	27.7	 	Notices	 	 	23	 
	 
	 	27.8	 	Entire Agreement, Amendment and Binding Effect	 	 	23	 
	 
	 	27.9	 	Severability	 	 	24	 
	 
	 	27.10	 	Number and Gender, Captions and References	 	 	24	 
	 
	 	27.11	 	Attorneys’ Fees	 	 	24	 
	 
	 	27.12	 	Brokers	 	 	24	 
	 
	 	27.13	 	Interest on Tenant's Obligations	 	 	24	 
	 
	 	27.14	 	Authority	 	 	24	 
	 
	 	27.15	 	Recording	 	 	24	 
	 
	 	27.16	 	Exhibits	 	 	24	 
	 
	 	27.17	 	Multiple Counterparts	 	 	25	 
	 
	 	27.18	 	Survival of Indemnities	 	 	25	 
	 
	 	27.19	 	Non-Merger.	 	 	25	 
	 
	 	27.20	 	Miscellaneous	 	 	25	 

ii

 

	 	 	 
	EXHIBITS	 	 
	 
	Exhibit A:

	 	Glossary of Defined Terms
	Exhibit B:

	 	Description of Premises/Approved Space Plan
	Exhibit C:

	 	Building Rules and Regulations
	Exhibit D:

	 	Work Letter Agreement
	Exhibit D1:

	 	Intentionally Left Blank
	Exhibit D2:

	 	Building Standard Tenant Improvements
	Exhibit E:

	 	Legal Description of Land
	Exhibit F:

	 	Lease Extension Addendum
	Exhibit G:

	 	Acknowledgment of Lease Commencement Date
	Exhibit H:

	 	Estoppel Certificate, Subordination, Non-Disturbance and Attornment Agreement

iii

 

LEASE AGREEMENT

     THIS LEASE AGREEMENT (the “Lease”) is entered into as of the ___day of ___,
2002, between 2855 E. COTTONWOOD PARKWAY, L.C. as Landlord, and ADS ALLIANCE DATA SYSTEMS,
INC., as Tenant.

PART I

SUMMARY OF BASIC LEASE INFORMATION

     Each reference in this Summary of Basic Lease Information to the Lease Provisions contained in
PART II shall be construed to incorporate all the terms provided in said Lease Provisions, and
reference in the Lease Provisions to the Summary contained in this PART I shall be construed to
incorporate the provisions of this Summary. In the event of any conflict between the provisions of
this Summary and the provisions in the balance of the Lease, the latter shall control. The basic
terms of this Lease are as follows:

	A.	 	PREMISES (Lease Provisions,
Paragraph 2):

     1. Premises Location: Suite 100, consisting of approximately 3,445 square feet of
Rentable Area (2,995 usable square feet), located on the 1st floor of the Building (as outlined on
the floor plan attached to this Lease as Exhibit B), the street address of which is 2855 E.
Cottonwood Parkway, as constructed on the Land which is further described on Exhibit E hereto.

     2. Number of Approximate Square Feet of Rentable Area in the Building measured consistently
throughout the Building: Approximately One Hundred Four Thousand Nine Hundred Seventy-Four
(104,974) square feet.

	A.	 	LEASE TERM (Lease Provisions, Paragraph 3):

     1. Duration: Seven (7) years.

     2. Lease Commencement Date (Lease Provisions, Paragraph 6.3): The earliest to occur of the
following events: (a) the date of Substantial Completion (as defined in the Work Letter Agreement)
of the Tenant Improvements, or (b) the date on which Landlord would have substantially completed
the Tenant Improvements and tendered possession of the Premises to Tenant but for certain delays
attributable to Tenant as provided in Paragraph 6.3, or (c) the date on which Tenant takes
possession of the Premises. The Lease Commencement Date is scheduled to be September 15, 2002.

     3. Lease Expiration Date (Lease Provisions, Paragraph 3): The last day of the calendar month,
which includes the day immediately prior to the fifth (5th) anniversary of the Lease Commencement
Date, unless further extended or earlier terminated as provided in this Lease.

A. BASE RENT (Lease Provisions, Paragraph 5) :

	 	 	 	 	 
	Lease Year	 	Monthly Base Rent	 	Annual Base Rent
	Year 1

9/15/02 — 1/15/03
	 	$0.00
	 	$0.00
	 	 	 	 	 
	Year 1

1/16/03 — 9/30/03
	 	$5,454.58
	 	$65,455.00
	 	 	 	 	 
	Year 2

10/1/03 — 9/30/04
	 	$5,598.13
	 	$67,177.50

 

 

	 	 	 	 	 
	Lease Year	 	Monthly Base Rent	 	Annual Base Rent
	Year 3

10/1/04 — 9/30/05
	 	$5,741.67
	 	$68,900.00
	 	 	 	 	 
	Year 4

10/1/05 — 9/30/06
	 	$5,885.21
	 	$70,622.50
	 	 	 	 	 
	Year 5

10/1/06 — 9/30/07
	 	$6,028.75
	 	$72,345.00
	 	 	 	 	 
	Year 6

10/1/07 — 9/30/08
	 	$6,172.29
	 	$74,067.50
	 	 	 	 	 
	Year 7

10/1/08 — 9/30/09
	 	$6,315.83
	 	$75,790.00

	A.	 	ADDITIONAL RENT (Lease Provisions, Paragraph 5.3):

     1. Base Year (Lease Provisions, Paragraph 5.3.1): The Fiscal Year commencing January 1 through
December 31, 2002.

     2. Tenant’s Share (Lease Provisions, Paragraph 5.3.1): Tenant’s Share for Tenant’s payment of
Operating Expenses means Three and 28/100 percent (3.28%).

	A.	 	SECURITY DEPOSIT (Glossary of Defined Terms):

     Means FIVE THOUSAND FOUR HUNDRED FIFTY-FOUR AND 58/100 Dollars ($5,454.58).

	A.	 	PARKING CHARGE (Lease Provisions, Paragraph 5.5):

     Tenant shall throughout the Term, lease from Landlord up to a total of twelve (12) automobile
parking spaces, of which total Tenant may elect to lease up to three (3) assigned and covered
automobile parking spaces at an initial cost of Thirty-five and 00/100 Dollars ($35.00) per month
per space. The remainder of the automobile parking spaces leased by Tenant which Tenant does not
elect to have assigned and covered shall be unassigned parking spaces at a cost of Zero Dollars
($0.00) per month per space for the initial Term of the Lease.

	A.	 	ADDRESSES FOR NOTICES (Lease Provisions, Paragraph 27.7):

	 	1.	 	Tenant’s Address:

	 	(a)	 	Before Lease Commencement Date:

ADS Alliance Data Systems, Inc.

17655 Waterview Parkway

Dallas, TX 75252

Attention: John Clyne

	 	(b)	 	After Lease Commencement Date:

ADS Alliance Data Systems, Inc.

2855 E. Cottonwood Parkway, Suite 100

Salt Lake City, Utah 84121

 

 

	 	2.	 	Landlord’s Address:

2855 E. Cottonwood Parkway, L.C.

c/o John L. West

2855 E. Cottonwood Parkway, Suite 560

Salt Lake City, Utah 84121

	 	3.	 	Address of Landlord’s Lender or Mortgagee:

Teachers Insurance and Annuity

   Association of America

730 Third Avenue

New York, NY 10017

	A.	 	TENANT IMPROVEMENTS AND SPACE PLAN (Work Letter Agreement):

     Landlord shall construct and install the Tenant Improvements, as shown on the approved Space
Plan attached as Exhibit “B”, at Landlord’s cost for Tenant’s occupancy on a turn-key basis in
accordance with the Lease and the Work Letter Agreement.

 

 

PART II

LEASE PROVISIONS

     1. DEFINITIONS . The definitions of certain of the capitalized terms used
in this Lease are set forth in the Glossary of Defined Terms attached as Exhibit A.

     2. PREMISES. Subject to the provisions of this Lease, Landlord hereby leases
to Tenant, and Tenant hereby leases from Landlord, the premises described in the Summary of Basic
Lease Information, Section “A”, as outlined on the approved Space Plan attached hereto as Exhibit B
(the “Premises”). In connection with such demise and subject to paragraph 21 herein,
Landlord hereby grants to Tenant the nonexclusive right to use during the Term, all Common Areas
designed for the use of all tenants in the Building, in common with all tenants in the Building and
their invitees, for the purposes for which the Common Areas are designed and in accordance with all
Legal Requirements. Landlord, however, has the sole discretion to determine the manner in which
the Common Areas are maintained and operated, and the use of the Common Areas shall be subject to
the Building Rules and Regulations. Tenant acknowledges that Landlord has made no representation
or warranty regarding the Building or Premises except as specifically stated in this Lease. By
occupying the Premises, Tenant accepts the Premises as being suitable for Tenant’s intended use of
the Premises. Landlord represents that, to the best of its knowledge, upon occupancy, the Building
will be in compliance with the Americans with Disabilities Act of 1990. Landlord further
represents that, to the best of its knowledge, the Building is in compliance with all Legal
Requirements.

     3. TERM. The provisions of this Lease shall be effective only as of the date this
Lease is executed by both Landlord and Tenant. The duration of the term of this Lease shall be for
the period stated in the Summary of Basic Lease Information, Section “B,” commencing on the
Commencement Date set forth in paragraph 6.3 below, and expiring at 5:00 p.m. on the day stated in
Section “B” of the Summary of Basic Lease Information, unless earlier terminated as provided herein
(the “Term”).

          3.1 Tenant’s Right to Terminate Lease. Tenant shall have the right to terminate this
Lease as of the end of the sixtieth (60th) calendar month after the Lease Commencement
Date (the “Early Termination Date”) in the manner provided in this paragraph 3.1 below if, and only
if, Tenant fulfills all of the following conditions:

               (a) Tenant sends or delivers to Landlord a written notice signed by Tenant
exercising
this right to terminate as of the Early Termination Date, and Landlord receives the notice,
no earlier than forty-eight (48) months after the Lease Commencement Date and no later than
fifty-two (52) months after the Lease Commencement Date.

               (b) No later than fifty-two (52) months after the Lease Commencement Date, and
in
addition to all Rent and Additional Rent payable hereunder, Tenant pays to Landlord, and
Landlord receives from Tenant, the additional sum of $37,033.74, in the form of a cashier’s
check.

4

 

               (c) Tenant vacates the entire Premises no earlier than fifty-four (54) months
after the
Lease Commencement Date and no later than sixty (60) months after the Lease Commencement
Date.

               (d) Regardless of the date Tenant vacates the Premises, Tenant is not in default of
any
provision of this Lease including, without limitation, the payment of all Rent and
Additional Rent, when Tenant vacates the Premises and through and including the Early
Termination Date.

               Upon the occurrence of the Commencement Date, the parties will execute and deliver
a
certificate in the form of Exhibit G attached hereto acknowledging the rights of Tenant
described in this Section 3.1 above. Time is of the essence in the fulfillment of the
foregoing conditions. If Tenant fails to fulfill any of the foregoing conditions, Tenant’s
right to terminate shall automatically and irrevocably cease. Except as set forth in this
Section or as otherwise expressly provided in this Lease, Tenant shall have no right to
terminate the Lease before the Lease Expiration Date.

     4. USE. Tenant shall occupy and use the Premises solely for lawful, general
business office purposes in compliance with the Building Rules and Regulations from time to time in
effect. Tenant shall, and Tenant agrees to use commercially reasonable efforts to cause its
agents, servants, employees, invitees and licensees to observe and comply fully and faithfully with
the Building Rules and Regulations attached hereto as Exhibit C, and incorporated herein by this
reference, or such reasonable modifications, rules and regulations which may be hereafter adopted
by Landlord for the care, protection, cleanliness and operation of the Premises and Complex.
Tenant shall also comply with all Legal Requirements and other restrictions on use of the Premises
as provided in this Lease, including, without limitation, paragraph 12 hereof. The Landlord
represents that the Premises are properly zoned for the permitted uses set forth herein.

     5. RENT.

          5.1 Base Rent. In consideration of Landlord’s leasing the Premises to
Tenant, Tenant shall pay to Landlord the base rent (“Base Rent”) at the time(s) and in the
manner stated in paragraph 5.6 below, as stated in Section “C” of the Summary of Basic Lease
Information.

          5.2 No Other Adjustment of Base Rent. The
Rentable Area of the Premises is subject to a joint verification, at the election of either
party, by Tenant and Landlord’s property manager within fifteen (15) calendar days of the
date of approval by both Tenant and Landlord of the Space Plan. In the event it is
determined at the time of such verification that the Rentable Area of the Premises is
different from that stated in the Summary of Basic Lease Information, Section “A”, all Rent
that is based on that incorrect amount shall be modified in accordance with that
determination. If that determination is made, it shall be confirmed in writing by Landlord
to Tenant and shall be conclusive and binding upon the parties. If neither party elects to
have the joint verification within the specified time, the stipulation of Rentable Area set
forth in paragraph 2 above and in the Summary of Basic Lease
Information, shall be conclusive and binding on the parties. Notwithstanding the
foregoing,

5

 

the Base Rent set forth in paragraph 5.1 above and in the Summary of Basic Lease
Information is a negotiated amount and there shall be no adjustment to the Base Rent or
Additional Rent without the prior written consent of Landlord. Tenant shall have no right
to withhold, deduct or offset any amount of the monthly Base Rent, Additional Rent or any
other sum due hereunder even if the actual rentable square footage or Rentable Area of the
Premises is less than set forth in paragraph 2 hereof.

          5.3 Additional Rent. In addition to paying the Base Rent
specified in paragraph 5.1 above, Tenant shall pay as additional rent the Tenant’s Share (as
defined in subparagraph 5.3.1(b) below) of the Operating Expenses (as defined in
subparagraph 5.4 below) for each Fiscal Year, or portion thereof, that are in excess of the
amount of Operating Expenses applicable to the Base Year (as defined in subparagraph
5.3.1(a) below). Said additional rent, together with other amounts of any kind (other than
Base Rent) payable by Tenant to Landlord under the terms of this Lease, shall be
collectively referred to in this Lease as “Additional Rent.” Operating Expenses which are
normally and reasonably allocable to more than one Fiscal Year shall be prorated and
allocated over such period(s). All amounts due under this paragraph 5.3 as Additional Rent
are payable for the same periods and in the same manner, time and place as the Base Rent as
provided in paragraph 5.6 below. Without limitation on any other obligation of Tenant that
may survive the expiration of the Lease Term, Tenant’s obligations to pay the Additional
Rent provided for in this paragraph 5.3 shall survive the expiration of the Term.

          5.3.1 Additional Rent Definitions. The following definitions apply to this
paragraph 5.4:

               (a) Base Year. “Base Year” means the Fiscal Year commencing
January 1
through December 31 of the year stated in Section “D” of the Summary of Basic Lease
Information.

               (b) Tenant’s Share. “Tenant’s Share” for Tenant’s
payment of Operating
Expenses means the percentage stated in Section “D” of the Summary of Basic Lease
Information. If the Premises or the Building is expanded or reduced with the
written consent of Landlord, the Tenant’s Share shall be adjusted by written notice
from Landlord to Tenant.

          5.3.2 Calculation and Payment of Additional Rent. Tenant’s Share of Operating
Expenses for any Fiscal Year, or portion thereof, shall be calculated and paid as follows:

               (a) Calculation of Excess. If Tenant’s Share of Operating Expenses for
any Fiscal Year, commencing with the Fiscal Year immediately following the Base
Year, exceeds Tenant’s Share of the amount of Operating Expenses applicable to the
Base Year, Tenant shall pay as Additional Rent to Landlord an amount equal to that
excess (the “Excess”) in the manner stated in subparagraphs 5.3.2(b) and (c) below.

               (b) Statement of Estimated Operating Expenses and Payment by
Tenant. On or before the last day of the Fiscal Year in

6

 

which the Lease Commencement Date occurs and for each Fiscal Year thereafter,
Landlord shall endeavor to deliver to Tenant an estimate statement (the “Estimate
Statement”) of Additional Rent to be due by Tenant for the forthcoming Fiscal Year.
The Estimate Statement will be based on good faith estimates, reasonably determined,
and will set forth in reasonable detail the calculation of estimated expenses and
Additional Rent. Thereafter, unless Landlord delivers to Tenant a revision of the
Estimate Statement, Tenant shall pay to Landlord monthly, coincident with Tenant’s
payment of Base Rent, an amount equal to the estimated Additional Rent set forth on
the Estimate Statement for such Fiscal Year divided by twelve (12) months. On no
more than two occasions during any Fiscal Year, Landlord may estimate and
re-estimate the Additional Rent to be due by Tenant for that Fiscal Year and deliver
a copy of the revised Estimate Statement to Tenant. The revised Estimate Statement
will be based on good faith estimates, reasonably determined, and will set forth in
reasonable detail the calculation of estimated expenses and Additional Rent.
Thereafter, the monthly installments of Additional Rent payable by Tenant shall be
appropriately adjusted in accordance with the revised Estimate Statement so that, by
the end of any Fiscal Year, Tenant shall have paid all of the Additional Rent as
estimated by Landlord on the revised Estimate Statement. Landlord’s failure to
furnish the Estimate Statement for any Fiscal Year in a timely manner shall not
preclude Landlord from enforcing its rights to collect any Additional Rent.

               (c) Statement of Actual Operating Expenses and Payment by Tenant.
Landlord shall endeavor to give to Tenant as soon as available following the end of
each Fiscal Year, but in no event later than November 1, a statement (the “Statement
of Actual Operating Expenses”) stating the Operating Expenses incurred or accrued
for that preceding Fiscal Year and indicating the amount, if any, of any Excess due
to Landlord or overpayment by Tenant. Landlord’s Statement of Actual Operating
Expenses will show in reasonable detail the amount and computation of Operating
Expenses for the applicable Fiscal Year, a statement as to any Operating Expense
which is not final and the amount of Tenant’s obligations hereunder and application
of Tenant’s estimated payments. Except for Operating Expense items identified by
Landlord as not being final or adjustments to Operating Expense items not reasonably
foreseeable by Landlord, no adjustment will be made by Landlord to the Statement of
Actual Operating Expenses for any Fiscal Year subsequent to November 1 following the
end of the Fiscal Year to which the Statement of Actual Operating Expenses relates.
On receipt of the Statement of Actual Operating Expenses for each Fiscal Year for
which an Excess exists, Tenant shall pay, with its next installment of Base Rent
due, the full amount of the Excess, less the estimated amounts (if any) paid during
the Fiscal Year pursuant to an Estimate Statement (as defined in subparagraph
5.3.2(b) above). In the event there is an overpayment of Additional Rent set forth
on a Statement of Actual Operating Expenses for any Fiscal Year, the amount of
overpayment shall be credited against payments of Additional Rent as they become
due. If it is determined that there is an overpayment of Additional Rent by Tenant
for any fiscal year after the expiration of the term of this

7

 

Lease, such overpayment
shall be promptly refunded to Tenant. Landlord’s failure to furnish the
Statement of Actual Operating Expenses for any Fiscal Year in a timely manner shall
not prejudice Landlord from enforcing its rights hereunder. Even if the Term is
expired and Tenant has vacated the Premises, if an Excess exists when final
determination is made of Tenant’s Share of the Operating Expenses for the Fiscal
Year in which the Lease terminates, Tenant shall promptly pay to Landlord the amount
calculated under this subparagraph (c). Provisions of this subparagraph (c) shall
survive the expiration or earlier termination of the Term.

          5.4
Operating Expenses. shall mean all costs and expenses
which Landlord pays or accrues by virtue of the ownership, use, management, leasing,
maintenance, service, operation, insurance or condition of the Land and all improvements
thereon, including, without limitation, the Building and Parking Facility, during a
particular Fiscal Year or portion thereof as determined by Landlord or its accountant in
accordance with generally accepted accounting principles which shall be consistently
applied, subject to the exclusions contained in Section 5.4.2(a) below.

          5.4.1 Examples. “Operating Expenses” shall include, but shall not be limited
to, the following to the extent they relate to the Complex or are chargeable to the Complex
in connection with the operation and maintenance of the Cottonwood Corporate Center
generally:

               (a) all Impositions and other governmental charges;

               (b) all insurance premiums charged for policies obtained by Landlord for
the Land, Building and Parking Facility, which may include without limitation, at
Landlord’s election, (i) fire and extended coverage insurance, including earthquake,
windstorm, hail, explosion, riot, strike, civil commotion, aircraft, vehicle and
smoke insurance, (ii) public liability and property damage insurance, (iii) elevator
insurance, (iv) workers’ compensation insurance for the employees covered by clause
(h), (v) boiler, machinery, sprinkler, water damage, and legal liability insurance,
(vi) rental loss insurance, and (vii) such other insurance as Landlord considers
reasonably necessary in the operation of the Complex;

               (c) all deductible amounts incurred in any Fiscal Year relating to an insurable
loss;

               (d) all maintenance, repair, replacement, restoration and painting costs,
including, without limitation, the cost of operating, managing, maintaining and
repairing the following systems: utility, mechanical, sanitary, drainage, escalator
and elevator;

               (e) all janitorial, snow removal, custodial, cleaning, washing, landscaping,
landscape maintenance, access systems, trash removal and pest control costs;

               (f) all security costs;

8

 

               (g) all electrical, energy monitoring, water, water treatment, gas, sewer,
telephone and other utility and utility-related charges;

               (h) all wages, salaries, salary burdens, employee benefits, payroll taxes,
Social Security and insurance for all persons engaged by Landlord or an Affiliate of
Landlord in connection with the Complex;

               (i) all costs of leasing or purchasing supplies, tools, equipment and
materials;

               (j) all fees and assessments of the Cottonwood Corporate Center park applicable
to the Complex;

               (k) the cost of licenses, certificates, permits and inspections;

               (l) the cost of contesting the validity or applicability of any governmental
enactments that may affect the Operating Expenses;

               (m) the cost of Parking Facility maintenance, repair and restoration,
including, without limitation, resurfacing, repainting, restriping and cleaning;

               (n) all fees and other charges paid under all maintenance and service
agreements, including but not limited to window cleaning, elevator and HVAC
maintenance;

               (o) All reasonable and customary fees, charges, management fees (or amounts in
lieu of such fees), consulting fees, legal fees and accounting fees of all persons
engaged by Landlord (exclusive of legal fees with respect to disputes with
individual tenants, negotiations of tenant leases, or with respect to ownership
rather than operation of the Complex), together with all other associated costs or
other charges reasonably incurred by Landlord in connection with the management
office and the operation, management, maintenance and repair of the Complex;

               (p) all costs of monitoring services, including, without limitation, any
monitoring or control devices used by Landlord in regulating the Parking Facility;

               (q) amortization of the cost of acquiring, financing and installing capital
items which are intended to reduce (or avoid increases in) operating expenses or
which are required by a governmental authority subsequent to the Commencement Date
of this Lease. Such costs shall be amortized over the reasonable life of the items
in accordance with generally accepted accounting principles and consistently
applied, but not beyond the reasonable life of the Building; and

               (r) any other costs or expenses reasonably incurred by Landlord under this
Lease which are not otherwise reimbursed directly by Tenants.

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          5.4.2 Adjustments. Operating Expenses shall be adjusted as follows:

               (a) Exclusions. “Operating Expenses” shall not include (i)
expenditures classified as capital expenditures for federal income tax purposes
except as set forth in clause 5.4.1(r), (ii) costs for which Landlord is entitled to
specific reimbursement by Tenant, by any other tenant of the Building or by any
other third party, (iii) allowances or other amounts specified in the Work Letter
for expenses incurred by Landlord for improvements to the Premises, (iv) leasing
commissions, and all noncash expenses (including depreciation), except for the
amortized costs specified in clause 5.4.1(r), (v) land or ground rent, if
applicable, and (vi) debt service on any indebtedness secured by the Complex (except
debt service on indebtedness to purchase or pay for items specified as permissible
“Operating Expenses”), (vii) the excess cost of any work or service performed for or
facilities furnished to any tenant of the Building to a substantially greater extent
or in a manner materially more favorable to such tenant than that performed for or
furnished to Tenant hereunder; (viii) sums which constitute insured repairs or other
work necessitated by fire or other casualty; (ix) sums incurred for the alteration
or renovation of vacant or vacated space in the Building; (x) expenditures paid to a
related corporation, entity or persons which are in excess of the amount which would
be paid in the absence of such relationship; (xi) expenditures resulting from the
relocation or moving of tenants in the Building to another location within the
Building; (xii) depreciation costs; and (xiii) any income, franchise or corporate
tax, any leasehold taxes on other tenants’ personal property, sales, capital levy,
capital stock, excess profits, transfer, revenue, or any other tax, assessment or
charge upon or measured by rent payable to Landlord. Operating Expenses shall not
exceed the reasonable, customary and ordinary cost for such items. There shall be
no duplication of costs or reimbursements.

               (b) Gross-Up Adjustments. If the occupancy of the Building during any
part of any Fiscal Year (including the Base Year) is less than ninety-five percent
(95%), Landlord shall make an appropriate adjustment of the Operating Expenses for
that Fiscal Year, as reasonably determined by Landlord using sound accounting and
management principles, to determine the amount of Operating Expenses that would have
been incurred had the Building been ninety-five percent (95%) occupied. This amount
shall be considered to have been the amount of Operating Expenses for that Fiscal
Year.

          5.4.3 Landlord’s Books and Records. If Tenant disputes the amount of the
Additional Rent due hereunder, Tenant may designate, within sixty (60) days after receipt of
the Statement of Actual Operating Expenses, an independent certified public accountant or
qualified third-party management company to inspect Landlord’s records. Tenant is not
entitled to request that inspection, however, if Tenant is then in default under this Lease.
The accountant must be a member of a nationally recognized accounting firm and must not
charge a fee based on the amount of Additional Rent that the accountant is able to save
Tenant by the inspection. Any inspection must be conducted in Landlord’s offices at

10

 

a reasonable time or times. If, after such an inspection, Tenant still
disputes the Additional Rent, Landlord and Tenant shall each designate an independent
certified public accountant, which shall in turn jointly select a third independent
certified public accountant (the “Third CPA”). A certification of the proper amount shall
be made, at Tenant’s sole expense, by the Third CPA. That certification shall be final and
conclusive. If as a result of such audit and certification, it is determined that Tenant
was overcharged by more than six percent (6%) during any period covered by such audit and
certification, then Landlord will pay the costs and expenses of such audit.

          5.5 Parking Charge. Tenant shall throughout the Term,
lease from Landlord the number of unassigned and assigned automobile parking spaces, at such
prices per month, as stated in Section “F” of the Summary of Basic Lease Information. Such
monthly parking charges shall be considered Additional Rent and shall be due and payable
without notice or demand, on or before the first day of each calendar month. Landlord shall
have the right from time to time during the Term and during each Extension Renewal Term (if
applicable), to increase the monthly parking charges for assigned parking spaces to the then
prevailing market rate. From time to time after seven (7) years from the Commencement Date,
the Landlord shall also have the right to increase the monthly parking charges for
unassigned parking spaces to the prevailing market rate. Landlord shall also have the right
to establish such reasonable rules and regulations as may be deemed desirable, at Landlord’s
reasonable discretion, for the proper and efficient operation and maintenance of said
Parking Facility. Such rules and regulations may include, without limitation, (i)
restrictions in the hours during which the Parking Facility shall be open for use, (ii)
subject to the provisions of this paragraph 5.5 above, the establishment of charges for
parking therein, and (iii) the use of parking gates, cards, permits and other control
devices to regulate the use of the parking areas. The rights of Tenant and its employees,
customers, service suppliers and invitees to use the Parking Facility shall, to the extent
such rules and regulations are not inconsistent with the other terms of this Lease, at all
times be subject to (a) Landlord’s right to establish reasonable rules and regulations
applicable to such use and to exclude any person therefrom who is not authorized to use the
same or who violates such rules and regulations; (b) the rights of Landlord and other
tenants in the Building to use the same in common with Tenant; (c) other than with respect
to Tenant’s assigned parking spaces, the availability of parking spaces in said Parking
Facility; and (d) Landlord’s right to change the configuration of the parking areas and any
unassigned parking spaces as shall be determined at Landlord’s reasonable discretion.
Tenant agrees to limit its use of the Parking Facility to the number and type of parking
spaces specified in this paragraph above. Notwithstanding the foregoing, nothing contained
herein shall be deemed to impose liability upon Landlord for personal injury or theft, for
damage to any motor vehicle, or for loss of property from within any motor vehicle, which is
suffered by Tenant or any of its employees, customers, service suppliers or other invitees
in connection with their use of the Parking Facility. Tenant understands and agrees that,
while the Parking Facility will be open to Tenant on a 24-hour basis, other than spaces that
are leased to Tenant and other tenants, all parking spaces in the parking area may be leased
to members of the general public between the hours of 6:30 p.m. through 7:00 a.m.

11

 

Monday
through Saturday morning, after 1:30 p.m. on Saturday, and all day on Sunday.

          5.6 Payment of Rent. Except as otherwise expressly provided in
this Lease, all Base Rent and Additional Rent shall be due in advance monthly installments
on the first day of each calendar month during the Term. Rent shall be paid to Landlord at
its address recited in Section 27.7, or to such other person or at such other address in the
United States as Landlord may from time to time designate in writing. Rent shall be paid
without notice, demand, abatement, deduction or offset in legal tender of the United States
of America. The Base Rent for the first full calendar month of the Term shall be paid upon
execution by Tenant of this Lease. In addition, if the Term commences or ends on other than
the first or the last day of a calendar month, the Base Rent for the partial month shall be
prorated on the basis of the number of days during the applicable month and paid on or
before the Lease Commencement Date. If the Term commences or ends on other than the first
or the last day of a Fiscal Year, the Additional Rent for the partial Fiscal Year calculated
as provided in paragraph 5.3 above shall be prorated on the basis of the number of days
during the applicable Fiscal Year. All payments received by Landlord from Tenant shall be
applied to the oldest payment obligation owed by Tenant to Landlord. No designation by
Tenant, either in a separate writing or on a check or money order, shall modify this clause
or have any force or effect. The Rent to be paid by Tenant or any Transferee hereunder
shall not be based, in whole or in part, on the income or profits derived from the lease,
use or occupancy of the Premises. In the event Landlord’s Mortgagee succeeds to the
Landlord’s interests under this Lease and determines that all or any portion of the Rent
payable hereunder is or may be deemed to be unrelated business income within the meaning of
the United States Internal Revenue Code or regulations issued thereunder, Landlord’s
Mortgagee may elect unilaterally to amend the calculation of Rent such that none of the Rent
payable under this Lease will constitute unrelated business income; provided, however, that
any such amendment shall not increase Tenant’s payment obligations or other liabilities, or
reduce the obligations of Landlord, under this Lease.

          5.7 Delinquent Payments and Handling Charge. All Base Rent and Additional Rent hereunder shall bear
interest from the date
due until the date paid at the rate of interest specified in Section 27.13. In addition, if
any Base Rent, Additional Rent or other payments required of Tenant hereunder are not
received by Landlord when due on more than one (1) occasion in any Lease Year, Tenant shall
pay to Landlord a late charge of three percent (3%) of the delinquent payment to reimburse
Landlord for its costs and inconvenience incurred as a consequence of Tenant’s delinquency
(other than interest, attorneys’ fees and costs). The parties agree that this late charge
represents a reasonable estimate of the expenses that Landlord will incur because of any
late payment (other than interest, attorneys’ fees and costs). Landlord’s acceptance of any
late charge shall not constitute a waiver of Tenant’s default with respect to the overdue
amount or prevent Landlord from exercising any of the rights and remedies available to
Landlord under this Lease. Tenant shall pay the late charge as Additional Rent with the
next installment of Additional Rent. In no event, however, shall the charges permitted
under this Section 5.7 or elsewhere in this Lease, to the extent the same are considered to
be interest under applicable law, exceed the maximum rate

12

 

of interest allowable under applicable law. If any two noncash payments made by
Tenant are not paid by the bank or other institution on which they are drawn, Landlord shall
have the right, exercised by notice to Tenant, to require that Tenant make all future
payments by certified funds or cashier’s check.

          5.8 Security Deposit. On or before the date of this
Lease, Tenant shall deposit with Landlord the Security Deposit, stated in Section “E” of the
Basic Lease Information, as security for the faithful performance by Tenant under this
Lease. The Security Deposit shall be returned (without interest) to Tenant after the
expiration of the Term, or sooner termination of this Lease and delivery of possession of
the Premises to Landlord in accordance with Section 26 if, at such time, Tenant is not in
default under this Lease. If Landlord’s interest in this Lease is conveyed, transferred or
assigned, Landlord shall transfer or credit the Security Deposit to Landlord’s successor in
interest, and Landlord shall be released from any liability for the return of the Security
Deposit. Landlord may intermingle the Security Deposit with Landlord’s own funds, and shall
not be deemed to be a trustee of the Security Deposit. If, during the Term, Tenant fails to
timely pay or perform any obligation under this Lease, Landlord may, prior to, concurrently
with or subsequent to exercising any other right or remedy, use, apply or retain all or any
part of the Security Deposit for the payment of any monetary obligation due under this
Lease, or to compensate Landlord for any other expense, loss or damage which Landlord may
incur by reason of Tenant’s failure, including any damage or deficiency in the reletting of
the Premises. If, during the Term, all or any portion of the Security Deposit is so used,
applied or retained, Tenant shall promptly deposit with Landlord cash in an amount
sufficient to restore the Security Deposit to the original amount. Landlord may withhold
the Security Deposit after the expiration of the Term or sooner termination of this Lease
until Tenant has paid in full Tenant’s Operating Expenses for the Fiscal Year in which such
expiration or sooner termination occurs and all other amounts payable under this Lease. The
Security Deposit is not a limitation on Landlord’s damages or other rights under this Lease,
a payment of liquidated damages or prepaid Rent, and shall not be applied by Tenant to the
Rent for the last (or any) month of the Term, or to any other amount due under this Lease.
If this Lease is terminated due to any default of Tenant, any portion of the Security
Deposit remaining at the time of such termination shall immediately inure to the benefit of
Landlord as partial compensation for the costs and expenses incurred by Landlord in
connection with this Lease, and shall be in addition to any other damages to which Landlord
is otherwise entitled.

          5.9 Holding Over. Any holding over by Tenant in the possession of
the Premises, or any portion thereof, after the expiration of the Term, with or without the
consent of Landlord, shall require Tenant to pay one hundred fifty percent (150%) of the
Base Rent and Additional Rent herein specified for the last month of the Term (prorated on a
monthly basis), unless Landlord shall specify a lesser amount for Rent in its sole
discretion. If Tenant holds over with Landlord’s consent, such occupancy shall be deemed a
month-to-month tenancy and such tenancy shall otherwise be on the terms and conditions
herein specified in this Lease as far as applicable. Notwithstanding the foregoing
provisions or the acceptance by Landlord of any payment by Tenant, any holding over without
Landlord’s consent
shall constitute a default by Tenant and shall entitle Landlord to pursue all remedies
provided in this Lease, or

13

 

otherwise, and Tenant shall be liable for any and all direct or
consequential damages or losses of Landlord resulting from Tenant’s holding over without
Landlord’s consent.

     6. CONSTRUCTION OF IMPROVEMENTS.

          6.1 General. Subject to events of Force Majeure, Landlord and Tenant
agree that Landlord shall, at Landlord’s cost, construct, install, furnish, perform and
supply the Tenant Improvements in accordance with the parties’ respective payment and other
obligations as specified in the Work Letter Agreement (“Work Letter Agreement”) attached
hereto as Exhibit D and incorporated herein by this reference. The Tenant Improvements
shall meet or exceed the Building Standard Tenant Improvements as specified in the Work
Letter Agreement

          6.2 Access by Tenant Prior to Commencement of Term. Provided that Tenant obtains and delivers to
Landlord the
certificates or policies of insurance called for in Section 17.1, Landlord, in its sole
discretion, may permit Tenant and its employees, agents, contractors and suppliers to enter
the Premises before the Lease Commencement Date (and such entry alone shall not constitute
Tenant’s taking possession of the Premises for the purpose of Section 6.3(c) below), to
perform certain work on the Premises on behalf of Tenant not contrary to the provisions of
the Work Letter Agreement. Tenant and each other person or firm who or which enters the
Premises before the Commencement Date shall conduct itself so as to not interfere with
Landlord or other occupants of the Building. Landlord may withdraw any permission granted
under this Section 6.2 upon twenty-four (24) hours’ notice to Tenant if Landlord, in its
sole discretion, determines that any such interference has been or may be caused. Any prior
entry shall be under all of the terms of this Lease (other than the obligation to pay Base
Rent and Additional Rent) and at Tenant’s sole risk. Tenant hereby releases and agrees to
indemnify Landlord and Landlord’s contractors, agents, employees and representatives from
and against any and all personal injury, death or property damage (including damage to any
personal property which Tenant may bring into, or any work which Tenant may perform in, the
Premises) which may occur in or about the Complex in connection with or as the result of
said entry by Tenant or its employees, agents, contractors and suppliers.

          6.3 Commencement Date; Adjustments to Commencement Date. For purposes of this Lease, the
“Commencement
Date” shall mean the earliest to occur of the following events (the “Lease Commencement
Events”): (a) the date of Substantial Completion of the Tenant Improvements, or (b) the
date on which Landlord would have substantially completed the Tenant Improvements and
tendered possession of the Premises to Tenant but for (i) the delay or failure of Tenant to
furnish information, approvals or other matters required in the Work Letter Agreement, (ii)
Tenant’s request for changes in the Space Plan (as defined in the Work Letter Agreement)
after execution of this
Lease, or (iii) any other action or inaction of Tenant, or any person or firm employed
or retained by Tenant, or (c) the date on which Tenant takes possession of the Premises.
Subject to events of Force Majeure and the provisions of this paragraph 6.3, the
Commencement Date is scheduled to be as stated in Section “B” of the Summary of Basic Lease
Information. Upon the occurrence of the Commencement Date, the

14

 

parties will execute and
deliver a certificate in the form of Exhibit G attached hereto stating and acknowledging the
Commencement Date. If by the scheduled Commencement Date specified in this paragraph there
is not Substantial Completion of the Tenant Improvements for any reason, and such failure to
substantially complete renders the Premises untenantable for their intended purpose, all as
reasonably determined by Landlord, or Landlord is unable to tender possession of the
Premises to Tenant, then the Landlord may elect (in addition to all other remedies available
to Landlord) to postpone the Commencement Date until the earliest to occur of the Lease
Commencement Events. Such postponement shall extend the scheduled expiration of the Term
for a number of days equal to the postponement. Whether or not Landlord makes such an
election and notwithstanding any provision in this Lease or any exhibit to the contrary, the
potential postponement of the payment of Base Rent and Additional Rent shall be Tenant’s
sole and exclusive remedy for Landlord’s delay in completing the Tenant Improvements, or
tendering possession of the Premises to Tenant. The Landlord shall not be subject to any
liability, including, without limitation, lost profits or incidental or consequential
damages for any delay or inability to deliver possession of the Premises to the Tenant.
Such a delay or failure shall not affect the validity of this Lease or the obligations of
the Tenant hereunder, other than the postponement of the Term.

     7. SERVICES TO BE FURNISHED BY LANDLORD.

          7.1 General. Subject to applicable Legal Requirements, governmental
standards for energy conservation, and Tenant’s performance of its obligations hereunder,
Landlord shall use its best commercially reasonable efforts to furnish the following
services:

               (a) Subject to the charges provided in Section 7.4 below, HVAC to the Premises
during Building Operating Hours, at such temperatures and in such amounts as are
reasonably suitable and standard [thus excluding air conditioning or heating for
electronic data processing or other specialized equipment or specialized
(nonstandard) Tenant requirements];

               (b) hot and cold water at those points of supply common to all floors for
lavatory and drinking purposes only;

               (c) janitorial service five (5) days per week;

               (d) periodic window washing in and about the Building and the Premises,
anticipated to be accomplished approximately every 3 or 4 months for outside windows
and every 2 or 3 months for inside windows;

               (e) elevator service, if necessary, to provide access to and egress from the
Premises twenty-four hours per day, seven days per week;

               (f) electric current sufficient for lighting the Premises and electric current
twenty-four hours per day, seven days per week for normal office machines and other
machines of low electrical consumption of not more than six (6) watts per square
foot of Rentable Area of the Premises available for Tenant’s use;

15

 

               (g) replacement of fluorescent lamps in Building Standard light fixtures
installed by Landlord and of incandescent bulbs or fluorescent lamps in all public
rest rooms, stairwells and other Common Areas in the Building; and

               (h) facilities for Tenant’s loading, unloading, delivery and pick-up
activities.

          If any of the services described above or elsewhere in this Lease are interrupted,
Landlord shall promptly restore the same; provided, however, if as a result of any
interruption of services the Premises will be uninhabitable or unusable by Tenant for five
(5) consecutive business days, then Base Rent and Additional Rent shall be abated to the
extent to which such condition interferes with Tenant’s use of the Premises commencing on
the first day of such condition and continuing until such condition is corrected. However,
neither the interruption nor cessation of such services, nor the failure of Landlord to
restore same, shall render Landlord liable for damages to person or property, or be
construed as an eviction of Tenant, or relieve Tenant from fulfilling any of its other
obligations hereunder.

          If not previously installed, Landlord may cause an electric and/or water meter(s) to be
installed in the Premises of the Tenant in order to measure the amount of electricity and/or
water consumed for any such use, and the cost of such meter(s) shall be paid promptly by
Tenant.

          Certain security measures (both by electronic equipment and personnel) may be provided
by Landlord in connection with the Building. However, Tenant hereby acknowledges that any
such security is intended to be solely for the benefit of the Landlord and protecting its
property, and while certain incidental benefits may accrue to the Tenant therefrom, any such
security is not for the purpose of protecting either the property of Tenant or the safety of
its employees, agents or invitees. By providing any such security, Landlord assumes no
obligation to Tenant and shall have no liability arising therefrom.

          7.2 Keys and/or Access Cards . Landlord shall furnish
Tenant, at Landlord’s expense, with up to twelve (12) keys and access cards, and at Tenant’s
expense with such additional keys and access cards as Tenant may request, to unlock or allow
access to the Building and each corridor door entering the Premises. Tenant shall not
install, or permit to be installed, any additional lock on any door into or in the Premises
or make, or permit to be made, any duplicates of keys or access cards to the Premises
without Landlord’s prior consent. Landlord shall be entitled at all times to possession of
a duplicate of all keys and access cards to all doors to or inside of the Premises. All
keys and access cards referred
to in this Section 7.2 shall remain the property of the Landlord. Upon the expiration
or termination of the Term, Tenant shall surrender all such keys and access cards to
Landlord and shall deliver to Landlord the combination to all locks on all safes, cabinets
and vaults which will remain in the Premises. Landlord shall be entitled to install,
operate and maintain a card reader and after-hours access card system, security systems and
other control devices in or about the Premises and the Complex which regulate entry into the
Building (or portions thereof) and

16

 

monitor, by closed circuit television or otherwise, all
persons leaving or entering the Complex, the Building and the Premises.

          7.3 Tenant Identity, Signs and Other Matters . Landlord shall at Landlord’s cost provide and
install, in Building Standard
graphics, letters or numerals identifying Tenant’s name and suite number adjacent to
Tenant’s entry door at one location per floor of the Building occupied by Tenant. Tenant’s
name, as set forth on the first page of this Lease, or as otherwise provided by Tenant in
writing upon execution of this Lease, shall also be placed in the Building Directory located
on the main level of the Building. Any subsequent modification to the listing of Tenant’s
name in the Building Directory shall be at Tenant’s cost. Unless required by law, without
Landlord’s prior written consent, no other signs, numerals, letters, graphics, symbols or
marks identifying Tenant shall be placed on the exterior, or in the interior if they are
visible from the exterior, of the Premises.

          Unless required by law, Tenant shall not place or suffer to be placed on any exterior
door, wall or window of the Premises, on any part of the inside of the Premises which is
visible from outside of the Premises, or elsewhere on the Complex, any sign, decoration,
notice, logo, picture, lettering, attachment, advertising matter or other thing of any kind,
without first obtaining Landlord’s prior written approval, which Landlord may, in its
discretion, grant or withhold. Landlord may, at Tenant’s cost, and without notice or
liability to Tenant, enter the Premises and remove any item erected in violation of this
Section. Landlord may establish rules and regulations governing the size, type and design
of all such items and Tenant shall abide by such rules and regulations.

          7.4 Charges. Tenant shall pay to Landlord monthly as billed, as
Additional Rent, such charges as may be separately metered or as Landlord may compute for
(a) any utility services utilized by Tenant for computers, data processing equipment or
other electrical equipment in excess of that agreed to be furnished by Landlord pursuant to
Section 7.1, (b) lighting installed in the Premises in excess of Building Standard lighting,
(c) HVAC and other services in excess of that stated in Section 7.1(a) or provided at times
other than Building Operating Hours, and (d) janitorial services required with respect to
Above Standard Tenant Improvements within the Premises. If Tenant wishes to use HVAC or
electrical services to the Premises during hours other than Building Operating Hours,
Landlord shall supply such HVAC, electrical and utility services at an hourly cost to Tenant
of $18.50 per suite, as adjusted from time to time by Landlord consistent with prevailing
market charges for such use. Landlord may utilize a lighting and utility occupancy sensor
in order to automatically determine and control use of HVAC, electrical and other utility
services. Landlord may elect to estimate the charges to be paid by Tenant under this
Section 7.4 and bill such charges to Tenant monthly in advance, in which event Tenant
shall promptly pay the estimated charges. When the actual charges are determined by
Landlord, an appropriate cash adjustment shall be made between Landlord and Tenant to
account for any underpayment or overpayment by Tenant.

          7.5 Operating Hours. Subject to Building Rules and Regulations
and such security standards as Landlord may from time to time adopt, the Building shall be
open to the public during the Building Operating

17

 

Hours and the Premises shall be open to
Tenant during hours other than Building Operating Hours.

     8. REPAIR AND MAINTENANCE .

          8.1 By Landlord. Landlord shall provide the services to the
Premises set forth in paragraph 7.1 above and shall maintain the Building (excepting the
Premises and portions of the Building leased by persons not affiliated with Landlord) in a
good, clean and operable condition, making such repairs and replacements as may be required
to provide such services to the premises and to maintain the Building in such condition.
This Section 8.1 shall not apply to damage resulting from a Taking (as to which Section 14
shall apply), or damage resulting from a casualty (as to which Section 15.1 shall apply), or
to damage caused by the negligence or willful misconduct of Tenant or its agents,
contractors, invitees and licensees for which Tenant is otherwise responsible under this
Lease. Tenant hereby waives and releases any right it may have to make repairs to the
Premises or Building at Landlord’s expense under any law, statute, ordinance, rules and
regulations now or hereafter in effect in any jurisdiction in which the Building is located.

          8.2 By Tenant. Tenant, at Tenant’s sole cost, shall maintain the
nonstructural components of the Premises and every part of the Premises (including, without
limitation, all floors, walls and ceilings and their coverings, doors and locks,
furnishings, trade fixtures, signage, leasehold improvements, equipment and other personal
property from time to time situated in or on the Premises) in good order, condition and
repair, and in a clean, safe, operable, neat and sanitary condition. Tenant will not commit
or allow to remain any waste or damage to any portion of the Premises. Tenant shall repair
or replace, subject to Landlord’s direction and supervision, any damage to the Complex
caused by Tenant or Tenant’s agents, contractors or invitees. If Tenant fails to make such
repairs or replacements, Landlord may make the same at Tenant’s cost. Such cost shall be
payable to Landlord by Tenant on demand as Additional Rent. All contractors, workmen,
artisans and other persons which or whom Tenant proposes to retain to perform work in the
Premises (or the Complex) pursuant to this Section 8.2 or Section 11 shall be approved by
Landlord, in Landlord’s reasonable discretion, prior to the commencement of any such work.

     9. TAXES ON TENANT’S PROPERTY. Tenant shall be liable for
and shall pay, before they become delinquent, all taxes and assessments levied against any personal
property placed by Tenant in the Premises,
including any additional Impositions which may be assessed, levied, charged or imposed against
Landlord or the Building by reason of non-Building Standard Items in the Premises. Tenant may
withhold payments of any taxes and assessments described in this Section 9 so long as Tenant
contests its obligation to pay in accordance with applicable law and the nonpayment thereof does
not pose a threat of loss or seizure of the Building or any interest of Landlord therein.

     10. TRANSFER BY TENANT.

          10.1
General. Except as specifically provided in this Section
10.1 below, Tenant shall not directly or indirectly, voluntarily or by operation of law,
sell, assign, encumber, pledge or otherwise Transfer or hypothecate all or any part of the
Premises or Tenant’s leasehold estate

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hereunder, or permit the Premises to be occupied by
anyone other than Tenant or sublet the Premises or any portion thereof without Landlord’s
prior written consent in Landlord’s discretion (such consent not to be unreasonably
withheld, conditioned or delayed), being obtained in each instance, subject to the terms and
conditions contained in this paragraph. Notwithstanding the foregoing, but without waiving
any other requirement for a Transfer as contained in this Section 10, Tenant shall have the
right, without the prior consent of Landlord, to assign the Lease or sublet the whole or any
part of the Premises to a corporation or entity (a “Related Entity”) which: (i) is Tenant’s
parent organization, or (ii) is a wholly-owned subsidiary of Tenant or Tenant’s parent
organization, or (iii) is an organization of which Tenant or Tenant’s parent owns in excess
of fifty percent (50%) of the outstanding capital stock or has in excess of fifty percent
(50%) ownership or control interest, or (iv) is the result of a consolidation, merger or
reorganization with Tenant and/or Tenant’s parent organization, or (v) is the Transferee of
substantially all of Tenant’s assets. Except as provided above, any attempted Transfer
without Landlord’s consent shall be void. If Tenant desires to effect a Transfer, it shall
deliver to Landlord written notice thereof in advance of the date on which Tenant proposes
to make the Transfer, together with all of the terms of the proposed Transfer and the
identity of the proposed Transferee. Upon request by Landlord, such notice shall contain
financial information concerning the proposed Transferee and other reasonable information
regarding the transaction which Landlord may specify. Landlord shall have thirty (30) days
following receipt of the notice and information within which to notify Tenant in writing
whether Landlord elects (a) to refuse to consent to the Transfer and to continue this Lease
in full force, or (b) to consent to the proposed Transfer. If Landlord fails to notify
Tenant of its election within said thirty (30) day period, Landlord shall be deemed to have
elected option (a). The consent by Landlord to a particular Transfer shall not be deemed a
consent to any other Transfer. If a Transfer occurs without the prior written consent of
Landlord as provided herein, Landlord may nevertheless collect rent from the Transferee and
apply the net amount collected to the Rent payable hereunder, but such collection and
application shall not constitute a waiver of the provisions hereof or a release of Tenant
from the further performance of its obligations hereunder.

          10.2 Conditions. The following conditions shall automatically apply
to each Transfer, without the
necessity of same being stated or referred to in Landlord’s written consent:

               (a) Tenant shall execute, have acknowledged and deliver to Landlord, and cause
the Transferee to execute, have acknowledged and deliver to Landlord, an instrument
in form and substance acceptable to Landlord in which (i) the Transferee adopts this
Lease and agrees to perform, jointly and severally with Tenant, all of the
obligations of Tenant hereunder, as to the space Transferred to it, including,
without limitation, the prohibition against rent based on the income or profits
derived from the Premises (any purported lease to the contrary being null and void),
(ii) the Transferee grants Landlord an express first and prior security interest in
its personal property brought into the transferred space to secure its obligations
to Landlord hereunder, (iii) Tenant subordinates to Landlord’s statutory lien and
security interest any liens, security interests or other rights which Tenant may
claim with respect to any property

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of the Transferee, (iv) Tenant agrees with
Landlord that, if the rent or other consideration due by the Transferee exceeds the
Rent for the transferred space, then Tenant shall pay Landlord as Additional Rent
hereunder ninety percent (90%) of all such excess Rent and other consideration, net
of reasonable leasing commissions and tenant improvement costs directly required in
connection with such Transfer actually paid by Tenant, promptly upon Tenant’s
receipt thereof, (v) Tenant and the Transferee agree to provide to Landlord, at
their expense, direct access from a public corridor in the Building to the
transferred space, (vi) the Transferee agrees to use and occupy the Transferred
space solely for the purpose specified in Section 4 and otherwise in accordance with
this Lease, and (vii) Tenant acknowledges that, notwithstanding the Transfer, Tenant
remains primarily liable for the performance of all the obligations of Tenant
hereunder (including, without limitation, the obligation to pay all Rent), and
Landlord shall be permitted to enforce this Lease against Tenant or the Transferee,
or all of them, without prior demand upon or proceeding in any way against any other
persons; and

               (b) Tenant shall deliver to Landlord a counterpart of all instruments relative
to the Transfer executed by all parties to such transaction (except Landlord).

               (c) If Landlord to consents to a proposed Transfer, Tenant shall pay to
Landlord, Landlord’s reasonable costs, including, without limitation, reasonable
attorneys’ fees, incurred in connection with such proposal.

          10.3 Liens. Without in any way limiting the generality of the foregoing,
Tenant shall not grant, place or suffer, or permit to be granted, placed or suffered,
against the Complex or any portion thereof, any lien, security interest, pledge, conditional
sale contract, claim, charge or encumbrance (whether constitutional, statutory, contractual
or otherwise) and, if any of the aforesaid does arise or is asserted, Tenant will, upon
thirty (30) days notice of the filing of any such lien and at Tenant’s expense, cause the
same to be released of record by payment of money or posting of a proper bond.

          10.4 Assignments in Bankruptcy. If this Lease is
assigned to any person or entity pursuant to the provisions of the Bankruptcy Code, 11
U.S.C. § 101 et seq. (the “Bankruptcy Code”), any and all monies or other
consideration payable or otherwise to be delivered in connection with such assignment shall
be paid or delivered to Landlord, shall be and remain the exclusive property of Landlord and
shall not constitute property of Tenant or of the Estate of Tenant within the meaning of the
Bankruptcy Code.

     11. ALTERATIONS. Tenant shall not make (or permit to be made) any
alteration to the Premises (including, without limitation, the attachment of any fixture or
equipment) unless such alteration (a) equals or exceeds the Building Standard and utilizes only new
and first-grade materials, (b) is in conformity with all Legal Requirements, and is made after
obtaining any required permits and licenses, (c) is made with the prior written consent of Landlord
not to be unreasonably withheld, conditioned or delayed, (d) is made pursuant to plans and
specifications approved in writing in advance by Landlord, (e) is made after

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Tenant has provided to
Landlord such reasonable indemnification and/or bonds requested by Landlord, including, without
limitation, a performance and completion bond in such form and amount as may be satisfactory to
Landlord to protect against claims and liens for labor performed and materials furnished, and to
insure the completion of any alteration, (f) is carried out by persons approved in writing by
Landlord who, if required by Landlord, deliver to Landlord before commencement of their work proof
of such insurance coverage as Landlord may require, with Landlord named as an additional insured,
and (g) is done only at such time and in such manner as to not disturb the Landlord or other
tenants in the Building. All such alterations, improvements and additions (including all articles
attached to the floor, wall or ceiling of the Premises) shall become the property of Landlord and
shall, at Landlord’s election, be (i) surrendered with the Premises as part thereof at the
termination or expiration of the Term, without any payment, reimbursement or compensation therefor,
or (ii) removed by Tenant, at Tenant’s expense, with all damage caused by such removal repaired by
Tenant. Tenant may remove Tenant’s trade fixtures, office supplies, movable office furniture and
equipment not attached to the Building, provided such removal is made prior to the expiration of
the Term, no uncured Event of Default has occurred and Tenant promptly repairs all damage caused by
such removal. Tenant shall indemnify, defend and hold harmless Landlord from and against all
liens, claims, damages, losses, liabilities and expenses, including attorneys’ fees, which may
arise out of, or be connected in any way with, any such change, addition or improvement. Within
twenty (20) days following the imposition of any lien resulting from any such change, addition or
improvement, Tenant shall cause such lien to be released of record by payment of money or posting
of a proper bond.

     12. PROHIBITED USES.

          12.1 General. Tenant will not (a) use, occupy or permit the use or
occupancy of the Complex or Premises for any purpose or in any manner which is violative of
any Legal Requirement, or contrary to Building Rules and Regulations, or dangerous to life
or property, or a public or private nuisance, or disrupt, obstruct or unreasonably annoy the
owners or any other tenant of the Building or adjacent buildings, (b) keep or permit to be
kept any
substance in, or conduct or permit to be conducted any operation from, the Premises
which emits offensive odors or conditions into other portions of the Building, or makes
undue noise or creates undue vibrations, (c) commit or permit to remain any waste to the
Complex or Premises, (d) install or permit to remain any improvements to the Complex or
Premises, window coverings or other items (other than window coverings which have first been
approved by Landlord) which are visible from the outside of the Premises, or exceed the
structural loads of floors or walls of the Building, or adversely affect the mechanical,
plumbing or electrical systems of the Building, or affect the structural integrity of the
Building in any way, (e) permit the occupancy of the Premises at any time during the Term to
exceed one person (including visitors) per two hundred (200) square feet Rentable Area of
space in the Premises, (f) violate any recorded covenants, conditions or restrictions that
affect the Complex or Building, or (g) commit or permit to be committed any action or
circumstance in or about the Complex or Building which would justify any insurance carrier
in cancelling or increasing the premium on the fire and extended coverage insurance policy
maintained by Landlord on the Complex or Building or contents, and if any increase results
from any act of Tenant, then Tenant shall pay such increase promptly upon demand therefor by
Landlord. Landlord

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represents that any certificate of occupancy issued with respect to the
premises shall allow use for general business office purposes.

          12.2 Hazardous Materials. Without limiting the
foregoing, Tenant shall not cause or permit any Hazardous Material (defined below) to be
brought upon, kept or used in or about the Premises or Complex by Tenant, its agents,
employees, contractors or invitees, in violation of law, without the prior written consent
of Landlord. Notwithstanding the foregoing, Tenant may use and store types and quantities
of materials and substances which may be or contain hazardous substances, provided that the
same are of the type and in the quantities customarily found or used in offices for use of
similar businesses, including without limitation packaging materials, commercial cleaning
fluids, paint and photocopier fluids. If Tenant breaches the obligations stated in the
preceding sentence, or if the presence of Hazardous Materials on the Premises or Complex
caused or permitted by Tenant results in illlegal contamination of the Premises or Complex,
or if illegal contamination of the Premises or Complex by Hazardous Material otherwise
occurs for which Tenant is legally liable to Landlord for damage resulting therefrom, then
Tenant shall indemnify, defend and hold Landlord harmless from any and all claims,
judgments, damages, penalties, fines, costs, liabilities or losses (including, without
limitation, diminution in value of the Premises or Complex, damages for the loss or
restriction on use of rentable or usable space or any amenity of the Premises or Complex,
damages arising from any adverse impact on marketing of space in the Building, and sums paid
in settlement of claims, attorneys’ fees, consultant fees and expert fees) which arise
during or after the Term as a result of such illegal contamination. This indemnification of
Landlord includes, without limitation, the obligation to reimburse Landlord for costs
incurred in connection with any cleanup, remedial, removal or restoration work required by
any federal, state or local governmental agency or political subdivision. Without limiting
the foregoing, if the presence of any Hazardous Material in, on or about the Premises or
Complex caused by or permitted by Tenant results in any illegal contamination of the
Premises or Complex, Tenant shall promptly take all actions at its sole
expense as are necessary to return the Premises or Complex to the condition existing
prior to the introduction of any Hazardous Material; provided, however, that Landlord’s
approval of such action shall first be obtained. “Hazardous Material” shall mean, in the
broadest sense, any petroleum-based products, pesticides, paints, insolvents,
polychlorinated, biphenyl, lead, cyanide, DDT, acids, ammonium compounds and other chemical
products and any substance or material defined or designated as a hazardous or toxic, or
other similar term, by any federal, state or local environmental statute, regulation or
ordinance affecting the Premises or Complex presently in effect or that may be promulgated
in the future, as such statutes, regulations and ordinances may be amended from time to
time. In addition, Tenant shall execute affidavits, representations and the like from time
to time at Landlord’s request concerning Tenant’s best knowledge and belief regarding the
presence of hazardous substances or materials on the Premises. In all events, Tenant shall
indemnify Landlord in the manner elsewhere provided in this Lease from any release of
hazardous materials on the Premises to the extent caused by, or resulting from the acts of,
Tenant or Tenant’s employees, directors, partners, shareholders, contractors, agents,
invitees or representatives occurring while Tenant is in possession, or elsewhere if caused
by Tenant or

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persons acting under Tenant. The within covenants shall survive the expiration
or earlier termination of the lease term.

          12.3 Overstandard Tenant Use. Tenant shall not, without
Landlord’s prior written consent, use heat-generating machines, other than standard
equipment or lighting, or machines other than normal fractional horsepower office machines,
in the Premises that may affect the temperature otherwise maintained by the air conditioning
system or increase the water normally furnished to the Premises by Landlord.

     13. ACCESS BY LANDLORD. Upon reasonable prior notice (except in
case of emergency or to perform janitorial services), Landlord, its employees, contractors, agents
and representatives, shall have the right (and Landlord, for itself and such persons and firms,
hereby reserves the right) to enter the Premises at reasonable hours (except in case of emergency
or to perform janitorial service) (a) to inspect, clean, maintain, repair, replace or alter the
Premises or the Building, (b) to show the Premises to prospective purchasers (or, during the last
twelve (12) months of the Term, to prospective tenants), (c) to determine whether Tenant is
performing its obligations hereunder, or (d) for any other purpose deemed reasonable by Landlord.
In an emergency, Landlord (and such persons and firms) may use any means to open any door into or
in the Premises without any liability therefor. Landlord shall use reasonable efforts to minimize
interference with Tenant’s use of the Premises. Entry into the Premises by Landlord or any other
person or firm named in the first sentence of this Section 13 for any purpose permitted herein
shall not constitute a trespass or an eviction (constructive or otherwise), or entitle Tenant to
any abatement or reduction of Rent, or constitute grounds for any claim (and Tenant hereby waives
any claim) against Landlord for damages for any injury to or interference with Tenant’s business,
for loss of occupancy or quiet enjoyment, or for consequential damages.

     14. CONDEMNATION. If all of the Complex is Taken, or if so much of
the Complex is Taken that, in Landlord’s opinion, the remainder cannot be restored to an
economically
viable, quality office building, or if the awards payable to Landlord as a result of any
Taking are, in Landlord’s opinion, inadequate to restore the remainder to an economically viable,
quality office building, Landlord may, at its election, exercisable by the giving of written notice
to Tenant within sixty (60) days after the date of the Taking, terminate this Lease as of the date
of the Taking or the date Tenant is deprived of possession of the Premises (whichever is later) and
Rent shall be apportioned as of the date of such termintion. Tenant may, at its election,
exercisable by giving sixty (60) days’ written notice to Landlord, terminate this Lease in the
event a substantial (greater than 50%) portion of the Premises is taken rendering the Premises
inadequate for its continued use and occupancy by Tenant. If this Lease is not terminated as a
result of a Taking, Landlord shall restore the Premises remaining after the Taking to a Building
Standard condition. During the period of restoration, Base Rent shall be abated to the extent the
Premises are rendered untenantable and, after the period of restoration, Base Rent and Tenant’s
Share shall be reduced in the proportion that the area of the Premises Taken or otherwise rendered
untenantable bears to the area of the Premises just prior to the Taking. All awards, proceeds,
compensation or other payments from or with respect to any Taking of the Complex or any portion
thereof shall belong to Landlord, and Tenant hereby assigns to Landlord all of its right, title,
interest and claim to same. Whether or not this Lease is terminated as a consequence of a Taking,
all damages or compensation awarded for a partial or total Taking, including any award for

23

 

severance damage and any sums compensating for diminution in the value of or deprivation of the
leasehold estate under this Lease, shall be the sole and exclusive property of Landlord. Tenant
may assert a claim for and recover from the condemning authority, but not from Landlord, such
compensation as may be awarded on account of Tenant’s loss of business, loss of goodwill, moving
and relocation expenses, and depreciation to and loss of Tenant’s moveable personal property.
Tenant shall have no claim against Landlord for the occurrence of any Taking, or for the
termination of this Lease or a reduction in the Premises as a result of any Taking.

     15. CASUALTY.

          15.1 General. Tenant shall give prompt written notice to Landlord of
any casualty to the Complex of which Tenant is aware and any casualty to the Premises. If
(a) the Complex or the Premises are totally destroyed, or (b) if the Complex or the Premises
are partially destroyed but in Landlord’s opinion they cannot be restored to an economically
viable, quality office building, or (c) if the insurance proceeds payable to Landlord as a
result of any casualty are, in Landlord’s opinion, inadequate to restore the portion
remaining to an economically viable, quality office building, or (d) if the damage or
destruction occurs within twelve (12) months of the expiration of the Term, or (e)
Landlord’s Mortgagee requires insurance proceeds be applied to pay or reduce indebtedness
rather than repair the Premises, Landlord may, at its election exercisable by the giving of
written notice to Tenant within sixty (60) days after the casualty, terminate this Lease as
of the date of the casualty or the date Tenant is deprived of possession of the Premises
(whichever is later). If this Lease is not terminated by Landlord as a result of a
casualty, Landlord shall (subject to Section 15.2) restore the Premises to a Building
Standard condition. If restoration of the Premises to a Building Standard Condition is not
completed, or estimated by Landlord or its agents to not be completed, within a period of
one hundred twenty (120) days, Tenant may elect to terminate this Lease by providing written
notice to Landlord within thirty (30) days after expiration of the one hundred twenty (120)
day period, or, as applicable, within thirty (30) days after receipt by Tenant of a
written estimate from Landlord of a time in excess of one hundred twenty (120) days to
complete the restoration. If Tenant does not elect to terminate within this 30-day period,
Tenant shall be deemed to have waived the option to terminate. During the period of
restoration, Base Rent and Additional Rent shall be abated to the extent the Premises are
rendered untenantable and, after the period of restoration, Base Rent and Tenant’s Share
shall be reduced in the proportion that the area of the Premises remaining tenantable after
the casualty bears to the area of the Premises just prior to the casualty. Except for
abatement of Base Rent and Additional Rent, if any, Tenant shall have no claim against
Landlord for any loss suffered by reason of any such damage, destruction, repair or
restoration. Landlord shall not be required to repair any damage or to make any restoration
or replacement of any furnishings, trade fixtures, leasehold improvements, equipment,
merchandise and other personal property installed in the Premises by Tenant or at the direct
or indirect expense of Tenant. If Landlord is required by this Lease or any Landlord
Mortgagee to repair, or if Landlord undertakes to repair, Landlord shall use commercially
reasonable efforts to have such repairs made promptly and in a manner which will not
unreasonably interfere with Tenant’s occupancy.

24

 

     15.2 Acts of Tenant. Notwithstanding any provisions of this
Lease to the contrary, if the Premises or the Complex are damaged or destroyed as a result
of a casualty arising from the acts or omissions of Tenant, or any of Tenant’s officers,
directors, shareholders, partners, employees, contractors, agents, invitees or
representatives, (a) Tenant’s obligation to pay Rent and to perform its other obligations
under this Lease shall not be abated, reduced or altered in any manner, (b) Landlord shall
not be obligated to repair or restore the Premises or the Complex, and (c) subject to
Section 17.2, Tenant shall be obligated, at Tenant’s cost, to repair and restore the
Premises or the Complex to the condition they were in just prior to the damage or
destruction under the direction and supervision of, and to the satisfaction of, Landlord and
any Landlord’s Mortgagee.

     15.3 Last Year of Term. If the Building or the
Premises or any portion thereof is destroyed by fire or other causes at any time during the
last twelve (12) months of the Term, then either Tenant or Landlord shall have the right, at
the option of either party, to terminate this Lease by giving written notice to the other
within sixty (60) days after the date of such destruction.

16. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT.

     16.1 General. This Lease, Tenant’s leasehold estate created hereby, and
all of Tenant’s rights, titles and interests hereunder and in and to the Premises are hereby
made subject and subordinate to any Mortgage presently existing or hereafter placed upon all
or any portion of the Complex, and to any and all renewals, extensions, modifications,
consolidations and replacements of any Mortgage and all advances made or hereafter to be
made on the security of any Mortgage. Notwithstanding the foregoing, Landlord and
Landlord’s Mortgagee may, at any time upon the giving of written notice
to Tenant and without any compensation or consideration being payable to Tenant, make
this Lease, and the aforesaid leasehold estate and rights, titles and interests, superior to
any Mortgage. In order to confirm the subordination (or, at the election of Landlord or
Landlord’s Mortgagee, the superiority of this Lease), upon the written request by Landlord
or by Landlord’s Mortgagee to Tenant, and within ten (10) days of the date of such request,
and without any compensation or consideration being payable to Tenant, Tenant shall execute,
have acknowledged and deliver a recordable instrument substantially in the form of Exhibit H
hereto (which shall include non-disturbance provisions substantially as set forth therein
confirming that this Lease, Tenant’s leasehold estate in the Premises and all of Tenant’s
rights, titles and interests hereunder are subject and subordinate (or, at the election of
Landlord or Landlord’s Mortgagee, superior) to the Mortgage benefiting Landlord’s Mortgagee.
Without limiting the foregoing, upon request by Landlord’s Mortgagee, the Landlord and
Tenant shall execute such documents as Landlord’s Mortgagee deems necessary to effect an
amendment of this Lease. Tenant’s failure to execute and deliver such instrument(s) as
required in this Section 16 shall constitute a default under this Lease.

     16.2 Attornment. Upon the written request of any person or party
succeeding to the interest of Landlord under this Lease, Tenant shall automatically become
the tenant of and attorn to such successor in interest without any change in any of the
terms of this Lease. No

25

 

successor in interest shall be (a) bound by any payment of Rent for
more than one month in advance, except payments of security for the performance by Tenant of
Tenant’s obligations under this Lease, or (b) subject to any offset, defense or damages
arising out of a default or any obligations of any preceding Landlord. Neither Landlord’s
Mortgagee nor its successor in interest shall be bound by any amendment of this Lease
entered into after Tenant has been given written notice of the name and address of
Landlord’s Mortgagee and without the written consent of Landlord’s Mortgagee or such
successor in interest, not to be unreasonably withheld or delayed. Any transferee or
successor-in-interest shall not be liable for any acts, omissions or defaults of Landlord
that occurred before the sale or conveyance, or the return of any security deposit except
for deposits actually paid to the successor or transferee. Tenant agrees to give written
notice of any default by Landlord to the holder of any Mortgage. Tenant further agrees
that, before it exercises any rights or remedies under the Lease, other than Rent abatement
as expressly provided herein, the holder of any Mortgage or other successor-in-interest
shall have the right, but not the obligation, to cure the default within the same time, if
any, given to Landlord to cure the default, plus an additional thirty (30) days. The
subordination, attornment and mortgagee protection clauses of this Section 16 shall be
self-operative and no further instruments of subordination, attornment or mortgagee
protection need be required by any Landlord’s Mortgagee or successor in interest thereto.
Nevertheless, upon the written request therefor and without any compensation or
consideration being payable to Tenant, Tenant agrees to execute, have acknowledged and
deliver such instruments substantially in the form of Exhibit H hereto to confirm the same.
Tenant shall from time to time, if so requested by Landlord and if doing so will not
materially and adversely affect Tenant’s economic interests under this Lease, join with
Landlord in amending this Lease so as to meet the needs or requirements of any lender that
is considering making or that has made a loan secured by all or any portion of the Complex.

17. INSURANCE.

     17.1 General. Tenant shall obtain and maintain throughout the Term the
following policies of insurance:

     (a) commercial general liability insurance with a combined single limit for
bodily injury and property damage of not less than One Million Dollars ($1,000,000)
per occurrence, including, without limitation, contractual liability coverage for
the performance by Tenant of the indemnity agreements set forth in Section 18;

     (b) hazard insurance with special causes of loss, including theft
coverage, insuring against fire, extended coverage risks, vandalism and malicious
mischief, and including boiler and sprinkler leakage coverage, in an amount equal to
the full replacement cost (without deduction for depreciation) of all furnishings,
trade fixtures, leasehold improvements, equipment, merchandise and other personal
property from time to time situated in or on the Premises;

26

 

     (c) workers’ compensation insurance satisfying Tenant’s obligations under the
workers’ compensation laws of the State of Utah; and

     (d) such other policy or policies of insurance as Landlord may reasonably
require or as Landlord is then generally requiring from other tenants in the
Building.

Such minimum limits shall in no event limit the liability of Tenant under this Lease. Such
liability insurance shall name Landlord, and all mortgagees and lessors of Landlord of which
Tenant has been notified, as an additional insureds; such property insurance shall name
Landlord as a loss payee as Landlord’s interests may appear; and both such liability and
property insurance shall be with companies acceptable to Landlord, having a rating of not
less than A:XII in the most recent issue of Best’s Key Rating Guide,
Property-Casualty. All liability policies maintained by Tenant shall contain a
provision that Landlord and any other additional insured, although named as an insured,
shall nevertheless be entitled to recover under such policies for any loss sustained by
Landlord and Landlord’s agents and employees as a result of the acts or omissions of Tenant.
Tenant shall furnish Landlord with certificates of coverage. No such policy shall be
cancelable or subject to reduction of coverage or other modification except after thirty
(30) days’ prior written notice to Landlord by the insurer. All such policies shall be
written as primary policies, not contributing with and not in excess of the coverage which
Landlord may carry, and shall only be subject to such deductibles as may be approved in
writing in advance by Landlord. Tenant shall, at least fifteen (15) days prior to the
expiration of such policies, furnish Landlord with renewals of, or binders for, such
policies. Landlord and Tenant waive all rights to recover against each other, against any
other tenant or occupant of the Complex, and against the officers, directors, shareholders,
partners, joint venturers, employees, agents, customers, invitees or business visitors of
each other, or of any
other tenant or occupant of the Building, for any loss or damage arising from any cause
covered by any insurance carried by the waiving party, to the extent that such loss or
damage is actually covered. Tenant shall cause all other occupants of the Premises claiming
by, through or under Tenant to execute and deliver to Landlord a waiver of claims similar to
the waiver contained in this Section and to obtain such waiver of subrogation rights
endorsements. Any Landlord’s Mortgagee may, at Landlord’s option, be afforded coverage
under any policy required to be secured by Tenant under this Lease by use of a mortgagee’s
endorsement to the policy concerned.

     17.2 Waiver of Subrogation. Landlord and Tenant hereby
waive all claims, rights of recovery and causes of action that either party or any party
claiming by, through or under such party may now or hereafter have by subrogation or
otherwise against the other party or against any of the other party’s officers, directors,
shareholders, partners or employees for any loss or damage that may occur to the Complex,
the Premises, Tenant’s improvements or any of the contents of any of the foregoing by reason
of fire or other casualty, or by reason of any other cause except gross negligence or
willful misconduct (thus including simple negligence of the parties hereto or their
officers, directors, shareholders, partners or employees), that could have been insured
against under the terms of (a) in the case of Landlord, the standard fire

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and extended
coverage insurance policies available in the state where the Complex is located at the time
of the casualty, and (b) in the case of Tenant, the fire and extended coverage insurance
policies required to be obtained and maintained under Section 17.1; provided, however, that
the waiver set forth in this Section 17.2 shall not apply to any deductibles on insurance
policies carried by Landlord or to any coinsurance penalty which Landlord might sustain.
Landlord and Tenant shall cause an endorsement to be issued to their respective insurance
policies recognizing this waiver of subrogation.

     17.3 Landlord’s Insurance. Landlord shall obtain and
maintain throughout the Term the following policies of insurance:

     (a) All-risk property damage insurance on the Building, Building Improvements
and personal property owned by Landlord in the amount of the full replacement values
thereof, as the values may exist from time to time; and

     (b) General liability insurance covering Landlord’s operations and the
Building with combined single limits of not less than $1,000,000 per occurrence for
bodily injury and property damage; and

     (c) All policies shall be issued by reasonable insurance companies authorized
to do business in the state in which the Premises are located.

     18. INDEMNITY. Subject to paragraph 17.2, and except to the extent caused by
the gross negligence or willful misconduct of Landlord, its employees, agents, representatives or
contractors, Tenant agrees to indemnify, defend and hold Landlord and its officers, directors,
partners and employees harmless from and against all
liabilities, losses, demands, actions, expenses or claims, including reasonable attorneys’
fees and court costs, for injury to or death of any person or for damages to any property or for
violation of law arising out of or in any manner connected with (i) the use, occupancy or enjoyment
of the Premises and Complex by Tenant or Tenant’s agents, employees or contractors, or the clients
and other invitees of Tenant, (ii) any breach or default in the performance of any obligation of
Tenant under this Lease, and (iii) any negligent or otherwise tortious act or failure to act by
Tenant or Tenant’s agents, employees or contractors on or about the Premises or Complex.

          Subject to paragraph 17.2 above and paragraph 19 below, and except to the extent caused by the
gross negligence or willful misconduct of Tenant, its employees, representatives or contractors,
Landlord agrees to indemnify, defend and hold Tenant and its officers, directors, partners and
employees harmless from and against all liabilities, losses, demands, actions, expenses or claims,
including reasonable attorneys’ fees and court costs for injury to or death of any person or for
damages to any property which arises solely from the fraud, gross negligence, or willful misconduct
of Landlord in connection with the use of the Premises and Complex by Landlord or Landlord’s
agents, employees or contractors and the performance of its obligations hereunder.

     19. THIRD PARTIES; ACTS OF FORCE MAJEURE; EXCULPATION. Except to the extent caused by the gross negligence or willful misconduct of
Landlord, its employees, representatives or contractors, Landlord shall have no liability to

28

 

Tenant, or to Tenant’s officers, directors, shareholders, partners, employees, agents, contractors
or invitees, for bodily injury, death, property damage, business interruption, loss of profits,
loss of trade secrets or other direct or consequential damages occasioned by (a) the acts or
omissions of any other tenant or such other tenant’s officers, directors, shareholders, partners,
employees, agents, contractors or other invitees within the Complex, (b) Force Majeure (as defined
below), (c) vandalism, theft, burglary and other criminal acts (other than those committed by
Landlord and its employees), (d) water leakage, or (e) the repair, replacement, maintenance,
damage, destruction or relocation of the Premises. Except to the extent an injury, loss, damage or
destruction was proximately caused by Landlord’s fraud, willful act or violation of law, Tenant
waives all claims against Landlord arising out of injury to or death of any person or loss of,
injury or damage to, or destruction of any property of Tenant. Unless otherwise specifically
provided in this Lease, the remedies of Tenant for breach of this Lease by Landlord shall be
limited to abatement of Rent and/or termination of this Lease in the manner set forth herein.
Whenever the period of time is herein prescribed for action to be taken by Landlord or Tenant,
Landlord or Tenant shall not be liable or responsible for, and there shall be excluded from the
computation for any such period of time, any delays due to Force Majeure, which term shall include
strikes, riots, acts of God, shortages of labor or materials, war, acts or threats of terrorism,
governmental approvals, laws, regulations, or restrictions, or any other cause of any kind
whatsoever which is beyond the reasonable control of Landlord or Tenant. Notwithstanding the
foregoing, Force Majeure shall not excuse or delay Tenant’s obligation to pay Rent or Additional
Rent.

     20. SECURITY INTEREST. As security for Tenant’s payment of Rent and
performance of all of its other obligations under this Lease, Tenant hereby grants to Landlord a
security interest in all property of Tenant now or hereafter placed in the
Premises. Landlord, as secured party, shall be entitled to all of the rights, remedies and
recourses afforded to a secured party under the Utah Uniform Commercial Code, which rights,
remedies and recourses shall be cumulative of all other rights, remedies, recourses, liens and
security interests afforded Landlord by law, equity or this Lease. Contemporaneously with the
execution of this Lease, Tenant shall execute and deliver, as debtor, promptly upon request and
without any compensation or consideration being payable to Tenant, such additional financing
statement or statements as Landlord may request. However, Landlord may at any time file a copy of
this Lease as a financing statement.

     21. CONTROL OF COMMON AREAS. Landlord shall have the
exclusive control over the Common Areas. Landlord may, from time to time, create different Common
Areas, close or otherwise modify the Common Areas, and reasonably modify the Building Rules and
Regulations with respect thereto; provided, however, that the use by Tenant of the Building and
Premises shall not be materially adversely impacted.

     22. RIGHT TO RELOCATE. Landlord retains the right and power, to be
exercised reasonably and at Landlord’s expense, upon sixty (60) days written notice, to relocate
Tenant within the Cottonwood Corporate Center to space which is comparable in size to the Premises
and is adequate for and suited to Tenant’s use, and all terms of this Lease shall apply to the new
space with equal force. Instances when the exercise of Landlord’s right and power to relocate
Tenant shall be deemed reasonable include, but shall not be limited to, instances where Landlord
desires to consolidate the rentable area in the Building to provide Landlord’s services more
efficiently, or to provide contiguous

29

 

vacant space for a prospective tenant. Except as set forth
above, Landlord shall not be liable to Tenant for any claims arising in connection with a
relocation permitted under this Section 22. The parties shall execute an amendment to this Lease
stating the relocation of the Premises.

     23. QUIET ENJOYMENT. Provided Tenant has performed all its obligations
under this Lease, Tenant shall and may peaceably and quietly have, hold, occupy, use and enjoy the
Premises during the Term subject to the provisions of this Lease. Landlord shall warrant and
forever defend Tenant’s right to occupancy of the Premises against the claims of any and all
persons whosoever lawfully claiming the same or any part thereof, by, through or under Landlord,
but not otherwise, subject to the provisions of this Lease.

     24. DEFAULT BY TENANT.

     24.1 Events of Default. Each of the following occurrences
shall constitute an Event of Default (herein so called):

     (a) the failure of Tenant to pay Base Rent or Additional Rent as and when due
hereunder and the continuance of such failure for a period of five (5) days after
written notice from Landlord to Tenant specifying the failure; provided, however,
after Landlord has given Tenant written notice pursuant to this clause 24.1(a) on
two separate occasions, Landlord shall not be required to give Tenant any further
notice under this clause 24.1(a);
provided, however, that the obligation of Tenant to pay a late charge or
interest pursuant to this Lease shall commence as of the due date of the Rent or
other monetary obligation and not on the expiration of any grace period;

     (b) the failure of Tenant to perform, comply with or observe any other material
agreement, obligation or undertaking of Tenant, or any other term, condition or
provision in this Lease, and the continuance of such failure for a period of thirty
(30) days after written notice from Landlord to Tenant specifying the failure, or,
if reasonably required, such longer period (not to exceed 120 days) so long as
Tenant timely and diligently commences and continues to completion the required
cure;

     (c) the involuntary transfer by Tenant of Tenant’s interest in this Lease or
other than specifically permitted pursuant to Section 10 hereof, the voluntary
attempt to or actual transfer of its interest in this Lease, without Landlord’s
prior written consent;

     (d) the failure of Tenant to discharge any lien placed as a result of Tenant’s
action or inaction upon the Premises or Building as set forth hereunder;

     (e) the occurrence of a Net Tenant Delay, as defined in the Work Letter
Agreement, of thirty (30) calendar days or more;

     (f) the filing of a petition by or against Tenant (the term “Tenant” also
meaning, for the purpose of this clause 24.1(d), any guarantor of the named Tenant’s
obligations hereunder) (i) in any bankruptcy or other insolvency proceeding, (ii)
seeking any relief under the Bankruptcy Code or any similar debtor relief law, (iii)
for

30

 

the appointment of a liquidator or receiver for all or substantially all of
Tenant’s property or for Tenant’s interest in this Lease, or (iv) to reorganize or
modify Tenant’s capital structure; and

     (g) the admission by Tenant in writing that it cannot meet its obligations as
they become due or the making by Tenant of an assignment for the benefit of its
creditors.

     24.2 Remedies of Landlord. Upon any Event of Default,
Landlord may, at Landlord’s option in its sole discretion, and in addition to all other
rights, remedies and recourses afforded Landlord hereunder or by law or equity, do any one
or more of the following:

     (a) terminate this Lease by the giving of written notice to Tenant; reenter the
Premises, with or without process of law; eject all parties in possession thereof;
repossess and enjoy the Premises and all Tenant Improvements; and recover from
Tenant all of the following: (i) all Rent and other amounts accrued hereunder to
the date of termination, (ii) all amounts due under Section 24.3, and (iii)
liquidated damages in an amount equal to (A) the total Rent that Tenant would have
been required to pay for the remainder of the Term discounted to present value at
the prime lending rate (or equivalent rate, however denominated) in effect on the
date of termination at the largest national bank in the state where the Complex is
located, minus (B) the then-present fair
rental value of the Premises for such period, similarly discounted, plus 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
would be likely to result therefrom, including, without limitation, attorneys’ fees,
brokers’ commissions or finder’s fees;

     (b) terminate Tenant’s right to possession of the Premises without terminating
this Lease by the giving of written notice to Tenant, in which event Tenant shall
pay to Landlord (i) all Rent and other amounts accrued hereunder to the date of
termination of possession, (ii) all amounts due from time to time under Section
24.3, and (iii) all Rent and other sums required hereunder to be paid by Tenant
during the remainder of the Term, diminished by any net sums thereafter received by
Landlord through reletting the Premises during said period. Reentry by Landlord in
the Premises will not affect the obligations of Tenant hereunder for the unexpired
Term. Landlord may bring action against Tenant to collect amounts due by Tenant on
one or more occasions, without the necessity of Landlord’s waiting until expiration
of the Term. If Landlord elects to proceed under this Section 24.2(b), it may at
any time elect to terminate this Lease pursuant to Section 24.2(a);

     (c) alter any and all locks and other security devices at the Premises without
being obligated to deliver new keys to the Premises, unless Tenant has cured all
Events of Default before Landlord has terminated this Lease under Section 24.2(a) or
has entered into a lease to relet all or a portion of the Premises;

     (d) if an Event of Default specified in Section 24.1(c) occurs, Landlord may
remove and store any property that remains

31

 

on the Premises and, if Tenant does not
claim such property within thirty (30) days after Landlord has delivered to Tenant
notice of such storage, Landlord may appropriate, sell, destroy or otherwise dispose
of the property in question without notice to Tenant or any other person, and
without any obligation to account for such property; and/or

     (e) no taking possession of the Premises by Landlord shall be construed as
Landlord’s acceptance of a surrender of the Premises by Tenant or an election of
Landlord to terminate this Lease unless written notice of such intention is given to
Tenant. Notwithstanding any leasing or subletting without termination of the Lease,
Landlord may at any time thereafter elect to terminate the Lease for Tenant’s
previous breach.

     24.3 Payment by Tenant. Upon any Event of Default, Tenant
shall also pay to Landlord all costs and expenses reasonably incurred by Landlord, including
court costs and reasonable attorneys’ fees, in (a) retaking or otherwise obtaining
possession of the Premises, (b) removing and storing Tenant’s property, (c) constructing the
Tenant Improvements as defined in the Work Letter Agreement, (d) repairing, restoring,
altering, remodeling or otherwise putting the Premises into condition acceptable to a new
tenant or tenants, not to exceed Building Standard Tenant Improvements, (e) reletting all or
any part of the Premises, (f) paying or
performing the underlying obligation which Tenant failed to pay or perform, and (g)
enforcing any of Landlord’s rights, remedies or recourses arising as a consequence of the
Event of Default.

     24.4 Reletting. Upon termination of this Lease or upon
termination of Tenant’s right to possession of the Premises, Landlord shall use commercially
reasonable efforts to relet the Premises on such terms and conditions as Landlord in its
sole discretion may determine (including a term different than the Term, rental concessions,
and alterations to and improvements of the Premises); however, Landlord shall not be
obligated to relet the Premises before leasing other portions of the Building. Landlord
shall not be liable for, nor shall Tenant’s obligations hereunder be diminished because of,
Landlord’s failure to relet the Premises or collect rent due with respect to such reletting.
If Landlord relets the Premises, rent Landlord receives from such reletting shall be
applied to the payment of: first, any indebtedness from Tenant to Landlord other than Rent
(if any); second, all costs, including for maintenance and alterations, reasonably incurred
by Landlord in reletting; and third, Rent due and unpaid. In no event shall Tenant be
entitled to the excess of any rent obtained by reletting over the Rent herein reserved.

     24.5 Landlord’s Right to Pay or Perform.
Upon an Event of Default, Landlord may, but without obligation to do so and without thereby
waiving or curing such Event of Default, pay or perform the underlying obligation for the
account of Tenant, and enter the Premises and expend the Security Deposit and any other sums
for such purpose.

     24.6 No Waiver; No Implied Surrender.
Provisions of this Lease may only be waived by the party entitled to the benefit of the
provision evidencing the waiver in writing. Thus, neither the acceptance of Rent by
Landlord following an Event of Default (whether known to Landlord or

32

 

not), nor any other
custom or practice followed in connection with this Lease, shall constitute a waiver by
Landlord of such Event of Default or any other Event of Default. Further, the failure by
Landlord to complain of any action or inaction by Tenant, or to assert that any action or
inaction by Tenant constitutes (or would constitute, with the giving of notice and the
passage of time) an Event of Default, regardless of how long such failure continues, shall
not extinguish, waive or in any way diminish the rights, remedies and recourses of Landlord
with respect to such action or inaction. No waiver by Landlord of any provision of this
Lease or of any breach by Tenant of any obligation of Tenant hereunder shall be deemed to be
a waiver of any other provision hereof, or of any subsequent breach by Tenant of the same or
any other provision hereof. Landlord’s consent to any act by Tenant requiring Landlord’s
consent shall not be deemed to render unnecessary the obtaining of Landlord’s consent to any
subsequent act of Tenant. No act or omission by Landlord (other than Landlord’s execution
of a document acknowledging such surrender) or Landlord’s agents, including the delivery of
the keys to the Premises, shall constitute an acceptance of a surrender of the Premises.

     25. DEFAULTS BY LANDLORD. Landlord shall not be in default under
this Lease, and Tenant shall not be entitled to exercise any right, remedy or recourse against
Landlord or otherwise as a consequence of any alleged default by Landlord under this Lease, unless
Landlord fails to perform any of its obligations hereunder and said failure continues for a period
of thirty (30) days after Tenant gives Landlord and (provided that Tenant shall have been given the
name and address of Landlord’s Mortgagee) Landlord’s Mortgagee written notice thereof specifying,
with reasonable particularity, the nature of Landlord’s failure. If, however, the failure cannot
reasonably be cured within the thirty (30) day period, Landlord shall not be in default hereunder
if Landlord or Landlord’s Mortgagee commences to cure the failure within the thirty (30) days and
thereafter pursues the curing of same diligently to completion. If Tenant recovers a money
judgment against Landlord for Landlord’s default of its obligations hereunder or otherwise, the
judgment shall be limited to Tenant’s actual direct, but not consequential, damages therefor and
shall be satisfied only out of the interest of Landlord in the Complex as the same may then be
encumbered, and Landlord shall not otherwise be liable for any deficiency. In no event shall
Tenant have the right to levy execution against any property of Landlord other than its interest in
the Complex. The foregoing shall not limit any right that Tenant might have to obtain specific
performance of Landlord’s obligations hereunder.

     26. RIGHT OF REENTRY. Upon the expiration or termination of the Term
for whatever cause, or upon the exercise by Landlord of its right to reenter the Premises without
terminating this Lease, Tenant shall immediately, quietly and peaceably surrender to Landlord
possession of the Premises and all Tenant Improvements in “broom clean” and good order, condition
and repair, except only for ordinary wear and tear, damage by casualty not covered by Section 15.2
and repairs to be made by Landlord pursuant to Section 15.1. If Tenant is in default under this
Lease, Landlord shall have a lien on such personal property, trade fixtures and other property as
set forth in Section 38-3-1, et seq., of the Utah Code Ann. (or any replacement
provision). Landlord may require Tenant to remove any personal property, trade fixtures, other
property, alterations, additions and improvements made to the Premises by Tenant or by Landlord for
Tenant, and to restore the Premises to their condition on the date of this Lease. All personal
property, trade fixtures and other property of Tenant not removed from the Premises on the
abandonment of the

33

 

Premises or on the expiration of the Term or sooner termination of this Lease
for any cause shall conclusively be deemed to have been abandoned and may be appropriated, sold,
stored, destroyed or otherwise disposed of by Landlord without notice to, and without any
obligation to account to, Tenant or any other person. While Tenant remains in possession of the
Premises after such expiration, termination or exercise by Landlord of its reentry right, Tenant
shall be deemed to be occupying the Premises as a tenant-at-sufferance, subject to all of the
obligations of Tenant under this Lease, except that the Rent shall be one hundred fifty percent
(150%) of the Rent in effect immediately before such expiration, termination or exercise by
Landlord. No such holding over shall extend the Term. If Tenant fails to surrender possession of
the Premises in the condition herein required, Landlord may, at Tenant’s expense, restore the
Premises to such condition.

     27. MISCELLANEOUS.

     27.1 Independent Obligations; No Offset. The
obligations of Tenant to pay Rent and to perform the other undertakings of Tenant hereunder
constitute independent unconditional
obligations to be performed at the times specified hereunder, regardless of any breach
or default by Landlord hereunder. Tenant shall have no right, and Tenant hereby waives and
relinquishes all rights which Tenant might otherwise have, to claim any nature of lien
against the Complex or to withhold, deduct from or offset against any Rent or other sums to
be paid to Landlord by Tenant.

     27.2
Time of Essence. Time is of the essence with respect to
each date or time specified in this Lease by which an event is to occur.

     27.3 Applicable Law. This Lease shall be governed by, and
construed in accordance with, the laws of the State of Utah. All monetary and other
obligations of Landlord and Tenant are performable in the county where the Complex is
located.

     27.4 Assignment by Landlord. Landlord shall have the
right to assign without notice or consent, in whole or in part, any or all of its rights,
titles or interests in and to the Complex or this Lease and, upon any such assignment,
Landlord shall be relieved of all unaccrued liabilities and obligations hereunder to the
extent of the interest so assigned arising after the date of such transfer.

     27.5 Estoppel Certificates; Financial Statements. From time to time at the request of Landlord or Landlord’s Mortgagee,
Tenant will within seven (7) calendar days, and without compensation or consideration
execute, have acknowledged and deliver a certificate substantially in the form of Exhibit H
hereto, setting forth the following: (a) a ratification of this Lease; (b) the Commencement
Date, expiration date and other Lease information; (c) that this Lease is in full force and
effect and has not been assigned, modified, supplemented or amended (except by such writing
as shall be stated); (d) that all conditions under this Lease to be performed by Landlord
have been satisfied or, in the alternative, those claimed by Tenant to be unsatisfied; (e)
that no defenses or offsets exist against the enforcement of this Lease by Landlord or, in
the alternative, those claimed by Tenant to exist; (f) whether within the knowledge of
Tenant there are any existing breaches or defaults by Landlord hereunder and, if so, stating
the defaults with

34

 

reasonable particularity; (g) the amount of advance Rent, if any (or none
if such is the case), paid by Tenant; (h) the date to which Rent has been paid; (i) the
amount of the Security Deposit; and (j) such other information as Landlord or Landlord’s
Mortgagee may reasonably request. Landlord’s Mortgagee and purchasers shall be entitled to
rely on any estoppel certificate executed by Tenant. Tenant shall, within twenty (20)
calendar days after Landlord’s request, furnish to Landlord current financial statements for
Tenant, prepared in accordance with generally accepted accounting principles consistently
applied and certified by Tenant to be true and correct.

     27.6 Signs, Building Name and Building Address. Landlord may, from time to time at its discretion, place any and all signs
anywhere in the Complex, and may change the name and street address of the Complex. Tenant
shall not, without Landlord’s prior written consent, use the name of the Building for any purpose other
than as the address of the business to be conducted by Tenant from the Premises.

     27.7 Notices. All notices and other communications given pursuant to
this Lease shall be in writing and shall either be sent by overnight courier or mailed by
first class United States mail, postage prepaid, registered or certified with return receipt
requested, and addressed as set forth in Section “G” of the Basic Lease Information, or
delivered in person to the intended addressee. Notice sent by overnight courier shall
become effective one (1) business day after being sent. Notice mailed in the aforesaid
manner shall become effective five (5) business days after deposit. Notice given in any
other manner shall be effective only upon receipt by the intended addressee. Each party
shall have the continuing right to change its address for notice hereunder by the giving of
fifteen (15) days’ prior written notice to the other party in accordance with this Section
27.7.

     27.8 Entire Agreement, Amendment and Binding Effect. This Lease, including all exhibits attached hereto,
constitutes the entire agreement between Landlord and Tenant relating to the subject matter
hereof, and all prior agreements relative hereto which are not contained herein are
terminated. This Lease may be amended only by a written document duly executed by Landlord
and Tenant (and, if a Mortgage is then in effect, by the Landlord’s Mortgagee entitled to
the benefits thereof), and any alleged amendment which is not so documented shall not be
effective as to any party. The provisions of this Lease shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors, administrators, successors and
permitted assigns; provided, however, that this Section 27.8 shall not negate, diminish or
alter the restrictions on Transfers applicable to Tenant set forth elsewhere in this Lease.

     27.9 Severability. This Lease is intended to be performed in
accordance with and only to the extent permitted by all Legal Requirements. If any
provision of this Lease or the application thereof to any person or circumstance shall, for
any reason and to any extent, be invalid or unenforceable, but the extent of the invalidity
or unenforceability does not destroy the basis of the bargain between the parties as
contained herein, the remainder of this Lease and the application of such provision to other
persons or circumstances shall not

35

 

be affected thereby, but rather shall be enforced to the
greatest extent permitted by law.

     27.10 Number and Gender, Captions and References. As the context of this Lease may require, pronouns shall include natural
persons and legal entities of every kind and character, the singular number shall include
the plural, and the neuter shall include the masculine and the feminine gender. Section
headings in this Lease are for convenience of reference only and are not intended, to any
extent and for any purpose, to limit or define any section hereof. Whenever the terms
“hereof,” “hereby,” “herein,” “hereunder” or words of similar import are used in this Lease,
they shall be construed as referring to this Lease in its entirety rather than to a
particular section or provision, unless the context specifically indicates to
the contrary. Any reference to a particular “Section” shall be construed as referring
to the indicated section of this Lease.

     27.11 Attorneys’ Fees. In the event either party commences a
legal proceeding to enforce any of the terms of this Lease, the prevailing party in such
action shall have the right to recover reasonable attorneys’ fees and costs from the other
party, to be fixed by the court in the same action. “Legal proceedings” includes appeals
from a lower court judgment as well as proceedings in the Federal Bankruptcy Court
(“Bankruptcy Court”), whether or not they are adversary proceedings or contested matters.
The “prevailing party” (i) as used in the context of proceedings in the Bankruptcy Court
means the prevailing party in an adversary proceeding or contested matter, or any other
actions taken by the non-bankrupt party which are reasonably necessary to protect its rights
under this Lease, and (ii) as used in the context of proceedings in any court other than the
Bankruptcy Court means the party that prevails in obtaining a remedy or relief which most
nearly reflects the remedy or relief which the party sought.

     27.12 Brokers. Excepting only brokers and agents of Cottonwood Realty
Services, representing Landlord, no independent or other broker or agent has been used by
either Landlord or Tenant in connection with the leasing transaction contemplated hereby.
Tenant and Landlord hereby warrant and represent unto the other that it has not incurred or
authorized any brokerage commission, finder’s fees or similar payments in connection with
this Lease, other than as provided in this paragraph 27.12 above and that which is due
pursuant to a separate written agreement between the Landlord and Landlord’s agents and
subagents. Each party shall defend, indemnify and hold the other harmless from and against
any claim for brokerage commission, finder’s fees or similar payment arising by virtue of
authorization of such party, or any Affiliate of such party, in connection with this Lease.
The parties hereto acknowledge that Gregory M. Gunn, the project listing agent, has a
financial interest in this and other buildings within the Cottonwood Corporate Center.

     27.13 Interest on Tenant’s Obligations. Any
amount of Rent or Additional Rent due from Tenant to Landlord which is not paid when due
shall bear interest at the lesser of ten percent (10%) per annum or the maximum rate allowed
by law from the date such payment is due until paid, but the payment of such interest shall
not excuse or cure the default in payment.

36

 

     27.14 Authority. Each person executing this Lease on behalf of a
party warrants and represents that (a) such party is a duly organized and existing legal
entity, in good standing in the State of Utah, (b) such party has full right and authority
to execute, deliver and perform this Lease, (c) this Lease is binding upon and enforceable
against such party in accordance with its terms, (d) the person executing and delivering
this Lease on behalf of such party was duly authorized to do so, and (e) upon request of the
other party, such person will deliver to the other party satisfactory evidence of his or her
authority to execute this Lease on behalf of such party.

     27.15 Recording. Neither this Lease (including any Exhibit hereto)
nor any memorandum hereof shall be recorded without the prior written consent of Landlord.

     27.16 Exhibits. All Exhibits and written addenda hereto are
incorporated herein for any and all purposes.

     27.17 Multiple Counterparts. This Lease may be
executed in two or more counterparts, each of which shall be an original, but all of which
shall constitute but one instrument.

     27.18 Survival of Indemnities. The indemnity
obligations contained in this Lease shall survive the expiration or earlier termination of
this Lease to and until the last to occur of (a) the last day permitted by law for the
bringing of any claim or action with respect to which indemnification may be claimed, or (b)
the date on which any claim or action for which indemnification may be claimed under such
provision is fully and finally resolved and any compromise thereof or judgment or award
thereon is paid in full. Payment shall not be a condition precedent to recovery upon any
indemnification provision contained herein.

     27.19 Non-Merger. There shall be no merger of this Lease
with any ground leasehold interest or the fee estate in the Complex or any part thereof by
reason of the fact that the same person may acquire or hold, directly or indirectly, this
Lease or any interest in this Lease as well as any ground leasehold interest or fee estate
in the Complex or any interest in such fee estate.

     27.20 Miscellaneous. No amendment to this Lease shall be binding
on Landlord or Tenant unless reduced to writing and signed by both parties. Each provision
to be performed by Tenant shall be construed to be both a covenant and a condition. Venue
on any action arising out of this Lease shall be proper only in the District Court of Salt
Lake County, State of Utah. Landlord and Tenant waive trial by jury in any action,
proceeding or counterclaim brought by either of them against the other on all matters
arising out of this Lease or the use and occupancy of the Premises. The submission of this
Lease to Tenant is not an offer to lease the Premises or an agreement by Landlord to reserve
the Premises for Tenant. Landlord shall not be bound to Tenant until Tenant has duly
executed and delivered duplicate original copies of this Lease to Landlord and Landlord has
duly executed and delivered one of those duplicate original copies to Tenant.

     EXECUTED as of the date and year above first written.

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TENANT ACKNOWLEDGES THAT LANDLORD HAS MADE NO WARRANTIES TO TENANT, EXCEPT AS HEREIN EXPRESSLY SET
FORTH, AND LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES ARE
SUITABLE FOR TENANT’S INTENDED COMMERCIAL PURPOSE.

	 	 	 	 	 	 	 	 	 
	 	 	TENANT:	 	ADS ALLIANCE DATA SYSTEMS, INC., a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	Date:	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	2855 E. COTTONWOOD PARKWAY, L.C., a Utah limited liability
company, by its following Managing Member,
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	COTTONWOOD CORPORATE CENTER, L.C., a Utah limited
liability company
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	JOHN L. WEST, Manager

38

 

EXHIBIT A

GLOSSARY OF DEFINED TERMS

	a.	 	“Addendum” shall mean all the addenda, exhibits and attachments, if any, attached
to the Lease or to any Exhibit to the Lease. All addenda are by definition incorporated into
the Lease. Unless otherwise specifically provided, terms and phrases in any Addendum shall
have the meaning of such terms and phrases as provided in the Lease and this Glossary of
Defined Terms.
	 
	b.	 	“Affiliate” shall mean a person or party who or which controls, is controlled by or
is under common control with, another person or party.
	 
	c.	 	“Building” shall mean that certain office building and garage structure constructed
on the Land, the street address of which is 2855 E. Cottonwood Parkway, Salt Lake County,
Utah. The term “Building” shall include, without limitation, all fixtures and appurtenances in
and to the aforesaid structure, including specifically but without limitation all above-grade
walkways and all electrical, mechanical, plumbing, security, elevator, boiler, HVAC,
telephone, water, gas, storm sewer, sanitary sewer and all other utility systems and
connections, all life support systems, sprinklers, smoke detection and other fire protection
systems, and all equipment, machinery, shafts, flues, piping, wiring, ducts, duct work,
panels, instrumentation and other appurtenances relating thereto.
	 
	d.	 	“Building Operating Hours” shall mean 7:30 a.m. to 6:00 p.m. Monday through Friday,
and Saturday 8:00 a.m. to 1:00 p.m., exclusive of Sundays and Holidays.
	 
	e.	 	“Building Rules and Regulations” shall mean the rules and regulations governing the
Complex promulgated by Landlord from time to time. The current Building Rules and Regulations
maintained by Landlord are attached as Exhibit C hereto.
	 
	f.	 	“Building Standard”, when applied to an item, shall mean such item as has been
designated by Landlord (orally or in writing) as generally applicable throughout the leased
portions of the Building, as more fully set forth on Exhibit D2 hereto.
	 
	g.	 	“Commencement Date” shall mean the date of the commencement of the Term as determined
pursuant to Section 6.3.
	 
	h.	 	“Common Areas” shall mean all areas and facilities within the Complex which have been
constructed and are being maintained by Landlord for the common, general, nonexclusive use of
all tenants in the Building, as revised from time to time in Landlord’s discretion, and shall
include rest rooms, lobbies, corridors, service areas, elevators, stairs and stairwells, the
Parking Facility, driveways, loading areas, ramps, walkways and landscaped areas.
	 
	i.	 	“Complex” shall mean the Land and all improvements thereon, including the Building,
the Parking Facility, and all Common Areas.
	 
	j.	 	“Fiscal Year” shall mean each fiscal year (or portion thereof) as designated by
Landlord, in which any portion of the Term falls, through

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	 	 	and including the Fiscal Year in which the Term expires. The Fiscal Year currently
commences on January 1; however, Landlord may change the Fiscal Year at any time or times.
	 
	k.	 	“Holidays” shall mean (a) New Year’s Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day, (b) other days on which national or state banks located in
the state where the Complex is located must or may close for ordinary operations, and (c)
other days which are commonly observed as Holidays by the majority of tenants of the Building.
If the Holiday occurs on a Saturday or Sunday, the Friday preceding or the Monday following
may, at Landlord’s discretion, be observed as a Holiday.
	 
	l.	 	“HVAC” shall mean the heating, ventilation and air conditioning systems in the
Building.
	 
	m.	 	“Impositions” shall mean (a) all real estate, personal property, rental, water,
sewer, transit, use, occupancy and other taxes, assessments, charges, excises and levies
(including any interest, costs or penalties with respect thereto), general and special,
ordinary and extraordinary, foreseen and unforeseen, of any kind and nature whatsoever which
are assessed, levied, charged or imposed upon or with respect to the Complex, or any portion
thereof, or the sidewalks, streets or alleyways adjacent thereto, or the ownership, use,
occupancy or enjoyment thereof (including but not limited to mortgage taxes and other taxes
and assessments passed on to Landlord by Landlord’s Mortgagee), and (b) all charges for any
easement, license, permit or agreement maintained for the benefit of the Complex.
“Impositions” shall not include income taxes, estate and inheritance taxes, excess profit
taxes, franchise taxes, corporation taxes, taxes imposed on or measured by the income of
Landlord from the operation of the Complex, taxes imposed on account of the transfer of
ownership of the Complex or the Land and personal property taxes of Tenant or other tenants in
the Complex. If any or all of the Impositions shall be discontinued and, in substitution
therefor, taxes, assessments, charges, excises or impositions shall be assessed, levied,
charged or imposed wholly or partially on the Rents received or payable hereunder (a
“Substitute Imposition”), then the Substitute Imposition shall be deemed to be
included within the term “Impositions.”
	 
	n.	 	“Land” shall mean the real property on which the Building is constructed and which is
further described in Exhibit E hereto.
	 
	o.	 	“Landlord’s Consent or Landlord’s Approval” as used in this Agreement, shall mean the
prior written consent or written approval of Landlord to the particular item or request.
Unless otherwise provided in this Lease, the Landlord’s consent or approval shall be
determined in Landlord’s reasonable discretion and shall not be unreasonably withheld.
	 
	p.	 	“Landlord’s Mortgagee” shall mean the mortgagee of any mortgage, the beneficiary of
any deed of trust, the pledgee of any pledge, the secured party of any security interest, the
assignee of any assignment and the transferee of any other instrument of transfer (including
the ground lessor of any ground lease on the Land) now or hereafter in existence on all or any
portion of the Complex, and their successors, assigns and purchasers. “Mortgage”
shall mean any such mortgage, deed of trust, pledge, security agreement, assignment or
transfer instrument, including

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	 	 	all renewals, extensions and rearrangements thereof and of all debts secured thereby.
	 
	q.	 	“Landlord’s Work” shall mean all improvements, components, assemblies, installations,
finish, labor, materials and services that Landlord is required to furnish, install, perform,
provide or apply to the Premises as specified in the Work Letter Agreement.
	 
	r.	 	“Legal Requirements” shall mean any and all (a) judicial decisions, orders,
injunctions, writs, statutes, rulings, rules, regulations, promulgations, directives, permits,
certificates or ordinances of any governmental authority in any way applicable to Tenant,
Landlord or the Complex, including but not limited to the Building Rules and Regulations,
zoning, environmental and utility conservation matters, (b) requirements imposed on Landlord
by any Landlord’s Mortgagee, (c) insurance requirements, and (d) other documents, instruments
or agreements relating to the Complex or to which the Complex may be bound or encumbered.
	 
	s.	 	“Parking Facility” shall mean (a) any parking garage and any other parking lot or
facility adjacent to or in the Complex servicing the Building, and (b) any parking area, open
or covered, leased by Landlord to service the Building.
	 
	t.	 	“Permitted Use” means lawful, general business office purposes only, and no other
purpose, in compliance with the Building Rules and Regulations from time to time in effect and
all other Legal Requirements.
	 
	u.	 	“Premises” shall mean the area leased by Tenant pursuant to this Lease as outlined on
the floor plan drawing attached as Exhibit B hereto and all other space added to the
Premises pursuant to the terms of this Lease. The Premises includes the space between the
interior surface of the walls and the top surface of the floor slab of the outlined area and
the finished surface of the ceiling immediately above.
	 
	v.	 	“Rent” shall mean Base Rent, Additional Rent, the parking charge called for in
Section 5.4 and all other amounts provided for under this Lease to be paid by Tenant, whether
as Additional Rent, if any, or otherwise. “Base Rent” shall mean the base rent
specified in Section 5.1 as adjusted in accordance with Section 5.2. “Base Rent
Adjustment” shall mean the increase in the annual Base Rent as set forth in Section 5.2.
“Additional Rent” shall mean the additional rent specified in Section 5.3.
	 
	w.	 	“Rentable Area” shall mean the Rentable Area of the Premises and the Rentable Area of
the Building as stated in Section “A” of the Summary of Basic Lease Information.
	 
	x.	 	“Security Deposit” means the amount stated in Section “E” of the Summary of Basic
Lease Information.
	 
	y.	 	“Substantial Completion” shall mean the completion of construction upon the Premises
of the Tenant Improvements pursuant to the approved Working Drawings, with the exception of
any punch list items and any tenant fixtures, work-stations, built-in furniture or equipment
to be installed by Tenant or under the supervision of Tenant and the issuance

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	 	 	of a certificate
of occupancy or other instrument allowing lawful occupancy of the Premises.
	 
	z.	 	“Taking” or “Taken” shall mean the actual or constructive condemnation, or
the actual or constructive acquisition by or under threat of condemnation, eminent domain or
similar proceeding, by or at the direction of any governmental authority or agency.
	 
	aa.	 	“Tenant Improvements” shall mean the Tenant Improvements as specified
in the Work Letter Agreement.
	 
	bb.	 	“Tenant’s Share” shall mean the percentage of Operating Expenses to be
paid by Tenant in accordance with the provisions of the Lease.
“Tenant’s Share” may be adjusted by Landlord upon notice to Tenant
from time to time to reflect adjustments to the then-current Rentable
Area of the Building or the Premises. Landlord and Tenant stipulate
that “Tenant’s Share” shall initially mean the percentage stated in
Section “D” of the Summary of Basic Lease Information.
	 
	cc.	 	“Transfer” shall mean (a) an assignment (direct or indirect, absolute
or conditional, by operation of law or otherwise) by Tenant of all or
any portion of Tenant’s interest in this Lease or the leasehold estate
created hereby, (b) a sublease of all or any portion of the Premises,
or (c) the grant or conveyance by Tenant of any concession or license
within the Premises. If Tenant is a corporation, then any transfer of
this Lease by merger, consolidation or dissolution, or by any change
in ownership or power to vote a majority of the voting stock (being
the shares of stock regularly entitled to vote for the election of
directors) in Tenant outstanding at the time of execution of this
Lease shall constitute a Transfer. If Tenant is a partnership having
one or more corporations as general partners, the preceding sentence
shall apply to each corporation as if the corporation alone had been
the Tenant hereunder. If Tenant is a general or limited partnership,
joint venture or other form of association, the Transfer of a majority
of the ownership interests therein shall constitute a Transfer.
“Transferee” shall mean the assignee, sublessee, pledgee,
concessionaire, licensee or other transferee of all or any portion of
Tenant’s interest in this Lease, the leasehold estate created hereby
or the Premises.
	 
	dd.	 	 “Work Letter Agreement” shall mean the agreement attached as Exhibit D
hereto between Landlord and Tenant for the construction of
improvements in the Premises.

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EXHIBIT B

PREMISES / APPROVED SPACE PLAN

Attach floor plan of the Premises.

B-1

 

EXHIBIT C

RULES AND REGULATIONS

     Tenant shall comply with the following Rules and Regulations. Landlord shall not be
responsible to Tenant for the nonperformance of any of these Rules and Regulations by Tenant, any
other tenant, or any visitor, licensee, agent, or other person or entity.

     1. Security; Admission to Building. Landlord may from time to time adopt appropriate
systems and procedures for the security or safety of the Building, any persons occupying, using or
entering the Building, or any equipment, finishings or contents of the Building, and each tenant
shall comply with such systems and procedures. Landlord shall in no case be liable for damages for
any error with regard to the admission to or exclusion from the Building of any person. In the
event of an invasion, mob, riot, public excitement or other commotion, Landlord reserves the right
to prevent access to the Building during the continuance of the same by closing of the doors of the
Building or any other reasonable method, for the safety of the tenants and protection of the
Building and property in the Building.

     2. Conduct and Exclusion or Expulsion. Tenant’s employees, visitors, and licensees
shall not loiter in or interfere with the use of the Parking Facility or the Complex’s driveway or
parking areas, nor consume alcohol in the Common Areas of the Complex or the Parking Facility. The
sidewalks, halls, passages, exits, entrances, elevators, escalators, and stairways of the Building
will not be obstructed by any tenants or used by any of them for any purpose other than for ingress
to and egress from their respective premises. The halls, passages, exits, entrances, elevators,
escalators, and stairways are not for the general public, and Landlord may control and prevent
access to them by all persons whose presence, in the reasonable judgment of Landlord, would be
prejudicial to the safety, character, reputation and interests of the Building and its tenants. In
determining whether access will be denied, Landlord may consider attire worn by a person and its
appropriateness for an office building, whether shoes are being worn, use of profanity, either
verbally or on clothing, actions of a person (including without limitation spitting, verbal
abusiveness, and the like), and such other matters as Landlord may reasonably consider appropriate.

     3. Signs, Notices and Decorations. No sign, placard, picture, decoration, name,
advertisement or notice (collectively “Material”) visible from the exterior of any tenant’s
premises shall be inscribed, painted, affixed or otherwise displayed by any tenant on any part of
the Building without the prior written consent of Landlord. All approved signs or lettering will
be printed, painted, affixed or inscribed at the expense of the tenant desiring such by a person
approved by Landlord. Material visible from outside the Building will not be permitted. Landlord
may remove such Material without any liability, and may charge the expense incurred by such removal
to the tenant in question. Directories will be placed by Landlord, at no additional expense to
Tenant, in the lobby of the Building.

     4. Curtains and Decorations. No awnings, curtains, draperies, blinds, shutters,
shades, screens, or other coverings, hangings or decorations will be attached to, hung or placed
in, or used in connection with any window of the Building or the Premises without Landlord’s prior
written consent.

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     5. Non-obstruction of Light. The sashes, sash doors, skylights, windows, heating,
ventilating, and air conditioning vents and doors that reflect or admit light and air into the
halls, passageways, tenant premises, or other public places in the Building shall not be covered or
obstructed by any tenant, nor will any bottles, parcels or other articles or decorations be placed
on any window sills.

     6. Showcases. No showcases or other articles will be put in front of or affixed to
any part of the exterior of the Building, nor placed in the public halls, corridors or vestibules
without the prior written consent of Landlord.

     7. Cooking; Use of Premises for Improper Purposes. No tenant will permit its Premises
to be used for lodging or sleeping. No cooking will be done or permitted by any tenant on its
Premises, except in areas of the Premises which are specially constructed for cooking as
specifically provided in working drawings approved by Landlord, so long as such use is in
accordance with all applicable federal, state, and city laws, codes, ordinances, rules and
regulations. Notwithstanding the foregoing, microwave ovens and other Underwriters’ Laboratory
(UL)–approved equipment may be used in the Premises for heating food and brewing coffee, tea, and
similar beverages for employees and visitors. The Premises shall not be used for the storage of
merchandise or for any improper, reasonably objectionable, or immoral purpose.

     8. Janitorial Service. No tenant will employ any person or persons other than
the cleaning service of Landlord for the purpose of cleaning the premises, unless otherwise agreed
by Landlord in writing. If any tenant’s actions result in any increased expense for any required
cleaning, Landlord may assess such tenant for such expenses. Janitorial service will not be
furnished on nights to offices which are occupied after business hours on those nights unless, by
prior written agreement of Landlord, service is extended to a later hour for specifically
designated offices.

     9. Use of Restrooms. The toilets, urinals, wash bowls and other plumbing fixtures
will not be used for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags or other foreign substances will be thrown in them. All damages resulting
from any misuse of the fixtures will be borne by the tenant who, or whose servants, employees,
agents, visitors or licensees, have caused the damage.

     10. Defacement of Premises or Building. No tenant will deface any part of the
Premises or the Building. Without the prior written consent of Landlord, no tenant will lay
linoleum or other similar floor covering so that it comes in direct contact with the floor of such
tenant’s premises. If linoleum or other similar floor covering is to be used, an interlining of
builder’s deadening felt will be first affixed to the floor by a paste or other material soluble in
water. The use of cement or other similar adhesive material is expressly prohibited. Except as
permitted by Landlord by prior written consent, Tenant shall not mark on, paint signs on, cut,
drill into, drive nails or screws into, or in any way deface the walls, ceilings, partitions or
floors of the Premises or of the Building, and any defacement, damage or injury directly or
indirectly caused by Tenant shall be paid for by Tenant. Pictures or diplomas shall be hung on
tacks or small nails; Tenant shall not use adhesive hooks for such purposes.

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     11. Carpet. In those portions of the Premises where carpet has been provided directly
or indirectly by Landlord, Tenant will at its own expense install and maintain pads to protect the
carpet under all furniture having casters other than carpet casters.

     12. Locks; Keys. No tenant will alter, change, replace or rekey any lock or install a
new lock or a knocker on any door of the Premises. Landlord, its agent or employee will retain a
master key to all door locks on the Premises. Any new door locks required by a tenant or any
change in keying of existing locks will be installed or changed by Landlord following such tenant’s
written request to Landlord and will be at such tenant’s expense. All new locks and rekeyed locks
will remain operable by Landlord’s master key. Landlord will furnish to each tenant, free of
charge, the number of keys and Building access cards stated in Section 7.2 of the Lease. Landlord
will have the right to collect a reasonable charge for additional keys and cards requested by any
tenant. Each tenant, upon termination of its tenancy, will deliver to Landlord all keys and access
cards for the Premises and Building which have been furnished to such tenant. Tenant shall keep
the doors of the Premises closed and securely locked when Tenant is not at the Premises.

     11. Furniture, Freight and Equipment. No furniture, freight, large packages, or
equipment may be brought into the Building or carried up or down in the elevators, except between
those hours and in that specific elevator designated by Landlord or otherwise upon consent of the
Landlord, without prior notice to and consent of Landlord. Landlord may at any time restrict the
elevators and areas of the Building into which deliveries or messengers may enter. The elevator
designated for freight by Landlord will be available for use by all tenants in the Building during
the hours and pursuant to such procedures as Landlord may determine from time to time. The persons
employed to move Tenant’s equipment, material, furniture or other property in or out of the
Building must be acceptable to Landlord; such persons must be a locally recognized professional
mover whose primary business is the performing of relocation services, and must be bonded and fully
insured. A certificate or other verification of such insurance must be received and approved by
Landlord prior to the start of any moving operations. Insurance must be sufficient, in Landlord’s
sole opinion, to cover all personal liability, theft or damage to the Building, including without
limitation floor coverings, doors, walls, elevators, stairs, foliage and landscaping. All moving
operations will be conducted at such times and in such a manner as Landlord may direct, and all
moving will take place during nonbusiness hours unless Landlord otherwise agrees in writing. The
moving tenant shall be responsible for the provision of Building security during all moving
operations, and shall be liable for all losses and damages sustained by any party as a result of
the failure to supply adequate security. Landlord may prescribe the weight, size and position of
all equipment, materials, furniture or other property brought into the Building. Heavy objects
will, if considered necessary by Landlord, stand on wood strips of such thickness as is necessary
to distribute the weight properly. Landlord will not be responsible for loss of or damage to any
such property from any cause, and all damage done to the Building by moving or maintaining such
property will be repaired at the expense of the moving tenant. Landlord may inspect all such
property to be brought into the Building and to exclude from the Building all such property which
violates any of these rules and regulations or the lease of which these rules and regulations are a
part. Furniture and other items as reasonably determined by Landlord delivered to or taken from
the Premises will be delivered or removed through the entrance and route designated by Landlord.

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     12. Inflammable or Combustible Fluids or Materials; Noninterference of Others.
No tenant will use or keep in the Premises or the Building any kerosene, gasoline, inflammable,
combustible or explosive fluid or material, or chemical substance other than limited quantities of
them reasonably necessary for the operation or maintenance of office equipment or limited
quantities of cleaning fluids and solvents required in the normal operation of the Premises.
Without Landlord’s prior written approval, no tenant will use any method of heating or air
conditioning other than that supplied by Landlord. Tenant shall not waste electricity, water, or
air conditioning and shall cooperate fully with Landlord to insure the most effective operation of
the Building’s heating and air conditioning system. No tenant will keep any firearms within the
Premises. No tenant will use or keep, or permit to be used or kept, any foul or noxious gas or
substance in the Premises, or permit or suffer the Premises to be occupied or used in any manner
offensive or objectionable to Landlord or other occupants of the Building by reason of noise, odors
or vibrations, nor interfere in any material way with other tenants or those having business in the
Building.

     13. Address of Building. Landlord may, upon sixty (60) days prior written notice, and
without liability to any tenant, change the name and street address of the Building.

     14. Use of Building Name or Likeness. Landlord will have the right to prohibit any
advertising by Tenant mentioning the Building which, in Landlord’s reasonable opinion, tends to
impair the reputation of the Building or its desirability as a Building for offices and, upon
written notice from Landlord, Tenant will discontinue such advertising.

     15. Animals, Birds and Vehicles. Tenant will not bring any animals or birds into the
Premises or Building, and will not permit bicycles or other vehicles inside or on the sidewalks
outside the Building, except in areas designated from time to time by Landlord for such purposes or
except as required by law.

     16. Off-Hour Access. All persons entering or leaving the Building at any time other
than the Building’s business hours shall comply with such off-hour regulations as Landlord may
establish and modify from time to time. Landlord may limit or restrict access to the Building
during such periods and shall not be liable for any error with regard to the admission or exclusion
of any person.

     17. Disposal of Trash. Each tenant will store all its trash and garbage within its
premises. No material will be placed in the trash boxes or receptacles if such material is of such
nature that it may not be disposed of in the ordinary and customary manner of removing and
disposing of trash and garbage without being in violation of any law or ordinance governing such
disposal. All garbage and refuse disposal will be made only through entryways and elevators
provided for such purposes and at such times as Landlord may designate. No furniture, appliances,
equipment or flammable products of any type may be disposed of in the Building trash receptacles.

     18. Disturbance of Tenants. Canvassing, peddling, soliciting and distribution of
handbills or any other written materials in the Building or Parking Facility are prohibited, and
each tenant will cooperate to prevent same.

     19. Doors to Public Corridors. Each tenant shall keep the doors of the Premises
closed and locked, and shall shut off all water faucets, water

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apparatus, and utilities before
tenant or tenant’s employees leave the Premises,
so as to prevent waste or damage, and for any default or carelessness in this regard Tenant
shall be liable for all injuries sustained by other tenants or occupants of the Building or
Landlord. On multiple-tenancy floors, all tenants will keep the doors to the Building corridors
closed at all times except for ingress and egress.

     20. Concessions. Tenant shall not grant any concessions, licenses or permission for
the sale or taking of orders for food or services or merchandise in the Premises, install or permit
the installation or use of any machine or equipment for dispensing food or beverage in the
Building, nor permit the preparation, serving, distribution or delivery of food or beverages in the
Premises, without the prior written approval of Landlord and only in compliance with arrangements
prescribed by Landlord; provided, however, Tenant shall be allowed reasonable equipment for
dispensing coffee/beverage services, candy/snacks and a microwave oven. Only persons approved by
Landlord shall be permitted to serve, distribute or deliver food and beverage within the Building
or to use the public areas of the Building for that purpose.

     21. Telecommunication and Other Wires. Tenant may not introduce telecommunication
wires or other wires into the Premises without first obtaining Landlord’s approval of the method
and location of such introduction.

     22. Rules Changes; Waivers. Landlord reserves the right at any time to
reasonably change or rescind any one or more of these Rules and Regulations or to make any
additional reasonable Rules and Regulations that, in Landlord’s judgment, may be necessary or
helpful for the management, safety or cleanliness of the Premises or Building; the preservation of
good order; or the convenience of occupants and tenants of the Building generally. Landlord may
waive any one or more of these Rules and Regulations for the benefit of any particular tenant. No
waiver by Landlord shall be construed as a waiver of those Rules and Regulations in favor of any
other tenant, and no waiver shall prevent Landlord from enforcing those Rules and Regulations
against a tenant or any other tenant in the future. Tenant shall be considered to have read these
Rules and Regulations and to have agreed to abide by them as a condition of Tenant’s occupancy of
the Premises.

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EXHIBIT D

WORK LETTER AGREEMENT

     This Work Letter Agreement is attached to and made a part of the Lease. All terms used in
this Work Letter Agreement which have been defined in the Lease have the same meaning as set forth
in the Lease. This Work Letter Agreement shall set forth the terms and conditions relating to the
construction of Tenant Improvements in the Premises.

I. Landlord and Tenant Construction Obligations

     A. Space Plan Preparation. Landlord and Tenant hereby acknowledge that they have
mutually approved a detailed space plan (“Space Plan”) containing all information of this Work
Letter Agreement for all tenant improvements (“Tenant Improvements”) in the Premises.

     B. Preparation of Working Drawings. Upon final approval of the Space Plan and
estimated Tenant Improvement costs, Landlord shall direct the architect or space planner engaged
by Landlord to prepare the plans and specifications for the Tenant Improvements (the “Space
Planner”) to prepare working drawings (“Working Drawings”) based on the approved Space Plan. When
prepared, the Working Drawings consistent with the Space Plan shall be delivered by the Space
Planner to the Tenant for approval. If the Tenant fails to deliver the Working Drawings, together
with its written approval thereof, to the Landlord within ten (10) calendar days after delivery of
the Working Drawings by the Space Planner to Tenant, then each day of delay in delivery of the
approved Working Drawings shall constitute one day of Tenant Delay.

     C. Installation of Tenant Improvements. Upon approval of the Working Drawings,
whether by written approval of Tenant or failure to deliver such written approval within the time
set forth above, Landlord or Landlord’s designee shall install the Tenant Improvements in the
Premises in accordance with the Lease Agreement and this Work Letter Agreement and the Working
Drawings based upon the approved Space Plan. In the event that Tenant requests any Tenant
Improvements in the Working Drawings which are in excess of, or inconsistent with, the approved
Space Plan or the Building Standard Improvements as set forth in Exhibit D-2 attached hereto and
incorporated herein by this reference (the “Above Standard Tenant Improvements”), the excess of
time required to complete the Premises for occupancy without Above Standard Tenant Improvements
over the time which would have been required to complete the Premises for occupancy without Above
Standard Tenant Improvements shall constitute Tenant Delay. At the commencement of any Tenant
Delay, Landlord shall provide written notice to Tenant of the estimated period of Tenant Delay and
any associated costs resulting from any Above Standard Tenant Improvements. Other than any Above
Standard Tenant Improvements of which Tenant has received written notice from Landlord, the Tenant
Improvements shall be installed and constructed at Landlord’s cost for Tenant’s occupancy on a
turn-key basis in accordance with the Lease and this Work Letter Agreement (“Landlord’s Work”).
Landlord’s Work will be performed in a good workmanlike manner, will be adequate to deliver
possession of the Premises substantially completed for Tenant’s use and occupancy without
additional cost to Tenant except as provided in this Work Letter Agreement. Landlord’s Work will
include, without limitation, installation of electricity, water, sanitary sewer, life-safety and
fire-

D-1

 

safety systems, heating, ventilation and air conditioning and other utility or building
service systems and connections into the Premises and all meters, panels, conduits, outlets,
wiring, piping, duct work or other means of distribution of such services within the Premises in
sufficient capacity to substantially meet Tenant’s requirements in the Lease; and compliance with
all Legal Requirements applicable to the construction and completion of the Premises. Landlord
will promptly notify Tenant of any delay in the onstruction and completion of the Premises
(“Landlord Delay”). No claims relating to delays will be made for any delay occurring prior to
Tenant’s execution of the Lease. Changes in Landlord’s Work will be authorized only by mutual
written agreement between the parties setting forth any additional cost and expense and additional
time required to complete the Premises as a result thereof. If any change in the Space Plan or
Working Drawings may cause a delay in completion of the Premises, Landlord will notify Tenant and
such change shall be performed only if the parties agree in writing to extend the date for
completion of the Premises by the number of days of such anticipated delay and extend the date set
forth for Rent commencement as a result thereof.

     D. Change Orders. In the event that Tenant desires to change the Tenant
Improvements as provided in the approved Working Drawings, Tenant shall deliver notice of the same
to Landlord, setting forth in detail the changes Tenant desires to make (the “Tenant Changes”).
Landlord may disapprove of said Tenant Changes in the event that Landlord, in its sole discretion,
determines that the changes would constitute design problems for the Premises or Building. In the
event that Landlord approves of the proposed Tenant Changes, Landlord shall provide Tenant with an
itemized list setting forth the costs and the period of Tenant Delay necessitated by the Tenant
Changes. Thereafter, the Tenant shall, within five (5) calendar days of receipt of Landlord’s
approval, deliver written notice to Landlord stating whether or not Tenant elects to cause Landlord
to make such Tenant Changes. Tenant shall bear the full costs for any and all such changes in the
Tenant Improvements and any delays associated with such changes shall constitute Tenant Delay.

     E. Net Tenant Delay. Net Tenant Delay shall mean the total number of days of Tenant
Delay minus the total number of days of Landlord Delay. If the Premises are not ready for
occupancy on or before the scheduled date specified in paragraph 6 of this Lease, and there exists
Net Tenant Delay, then, notwithstanding anything to the contrary set forth in the Lease or this
Work Letter Agreement, and regardless of the actual date of the Substantial Completion of the
Premises, the Lease Commencement Date of the Lease shall be deemed to be the date the Lease
Commencement Date would have occurred without the Net Tenant Delay. In such event, Tenant shall
pay to Landlord a sum equal to one day’s Rent (including Base Rent and all other charges provided
for in the Lease) multiplied by the Net Tenant Delay. Said sum shall be paid by Tenant within
seven (7) calendar days of receipt of invoice.

     F. Warranties and Guaranties. Landlord hereby assigns to Tenant all warranties and
guaranties by the Space Planner relating to the Working Drawings and by the contractor who
constructs the Tenant Improvements relating to the Tenant Improvements and, in consideration
therefor, Tenant hereby waives and releases Landlord from all loss, damages, delays and claims
relating to, or arising out of (i) the design, code compliance, quality, omissions or errors and
other like matters contained in the Working Drawings, and (ii) the construction of the Tenant
Improvements, including, without limitation, lost profits and all incidental or consequential
damages.

II. Tenant Space Plan Must Contain, as a Minimum, the Following Information:

D-2

 

	 	A.	 	Floor plan showing:

	 	1.	 	Partitions: indicate location and type of all partitions.
	 
	 	2.	 	Doors: indicate location, swing and type of all doors. Also indicate
hardware.
	 
	 	3.	 	Standard Electrical Items: indicate the location of all building
standard electrical items listed herein (wall-mounted 110 volt duplex outlets,
single-pole light switches and building standard light fixtures).
	 
	 	4.	 	Standard Telephone Outlets: indicate the location of all building
standard telephone wall outlets, as listed herein.
	 
	 	5.	 	“Above Standard” Electrical Items: indicate the location and type of
all “above standard” electrical items, including lighting.
	 
	 	6.	 	Special Electrical Equipment and Requirements: indicate the location
and type of equipment that will have special requirements and indicate the
location and type of special electrical equipment to be purchased.
	 
	 	7.	 	Telephone and Data Equipment Location: indicate location of telephone
equipment room, if any.
	 
	 	8.	 	Glass Items: indicate location, dimensions and type of glass
partitions, windows and doors. Include details if not building standard.
	 
	 	9.	 	Heavy Items: indicate location, dimensions, weight per square foot and
description of any heavy equipment or filing system exceeding fifty (50) pounds
per square foot live load.
	 
	 	10.	 	Special HVAC Requirements: Indicate location and specific requirements
for any special and/or concentrated heating and/or air conditioning
requirements beyond that provided by the building HVAC system and/or
distribution network.
	 
	 	11.	 	Floor Covering: indicate location, type and color of all floor
covering.
	 
	 	12.	 	Wall Covering: indicate location, type and color of all wall
coverings.
	 
	 	13.	 	Paint: indicate location, type and color of paint finishes.
	 
	 	14.	 	Millwork: indicate location, type and basic dimensions of all
cabinets, shelving and other millwork items.
	 
	 	15.	 	Plumbing: indicate location and type of all plumbing items.
	 
	 	16.	 	Appliances: indicate location, type, dimensions and special
requirements of all appliances.
	 
	 	17.	 	Critical Dimensions: indicate all critical dimensions necessary for
construction.
	 
	 	18.	 	Fire Sprinkler Requirements: indicate location and type of all fire
sprinkling and/or special fire suppression requirements.
	 
	 	19.	 	Ceiling System and Finishes: indicate location, type and color of all
ceiling finishes and/or systems.
	 
	 	20.	 	Security Requirements: indicate the location, type and special
requirements for any security system and/or requirements.
	 
	 	21.	 	Furniture System Requirements: indicate all interfacing requirements
with furniture systems (i.e., electrical, telephone, data, anchoring, etc.).

III. Other Provisions.

     A. Substantial Completion. For purposes of this Lease, “Substantial
Completion” of the Premises shall occur upon the completion of construction of the Tenant
Improvements in the Premises

D-3

 

 pursuant
to the approved Working Drawings, with the exception of any punch list items and any tenant fixtures,
work-stations, built-in furniture, or equipment to be installed by Tenant under the supervision of
Landlord.

     B. Time of the Essence. Unless otherwise indicated, all references herein
to “number of days” shall mean and refer to calendar days. In all instances where Tenant is
required to approve or deliver an item, if no written notice of approval is given or the item is
not delivered within the stated time period, at Landlord’s sole option, at the end of such period
the item shall automatically be deemed approved or delivered by Tenant and the next succeeding time
period shall commence.

     C. Tenant’s Lease Default. Notwithstanding any provision to the contrary
contained in the Lease or this Work Letter Agreement, if an event of default has occurred as set
forth in the Lease or in this Work Letter Agreement at any time on or before the Substantial
Completion of the Premises, then, (i) in addition to all other rights and remedies granted to
Landlord pursuant to the Lease, Landlord shall have the right to cease the construction of the
Premises (in which case, Tenant shall be responsible for any delay in the Substantial Completion of
the Premises caused by such work stoppage), (ii) all other obligations of Landlord under the terms
of this Work Letter Agreement shall be forgiven until such time as such default is cured pursuant
to the terms of the Lease, and (iii) Landlord shall have the right to recover from Tenant the costs
incurred for the Tenant Improvements.

     D. Construction of Certain Improvements. The construction of certain Tenant
Improvement items specified below shall be completed in accordance with the following provisions:

	 	 	 	 	 	 	 	 	 
	 

	 	 	1.	 	 	“Above Standard”

Electrical Items:
	 	Tenant shall advise Landlord of locations and types of all
“above standard” electrical items, including lighting.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	2.	 	 	Special Electrical
Equipment and
Requirements:
	 	Tenant shall advise Landlord of locations and types of all
special electrical equipment.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	3.	 	 	Appliances:
	 	Tenant shall advise Landlord of locations, types,
dimensions and special requirements of all appliances.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	4.	 	 	Telephone and Data
Equipment Location:
	 	Tenant shall advise Landlord of location of
telephone equipment room, if any.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	5.	 	 	Heavy Items:
	 	Tenant shall advise Landlord of location, dimensions,
weight per square foot and description of heavy equipment or filing systems
exceeding 50 pounds/SF live load.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	6.	 	 	Millwork:
	 	Tenant shall advise Landlord of location, type and basic
dimensions of all cabinets, shelving and other millwork items. Standard
Plastic Laminate Specifications: Countertops: Wilsonart #1573-60.
Cabinets: Pionite #AT301-S.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	7.	 	 	Plumbing:
	 	Tenant shall advise Landlord of location and type of all
plumbing fixtures. Standard Sink Specification: Kohler, stainless #K-3287-H
with stainless faucet #K-15176.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	8.	 	 	Special HVAC:
	 	Tenant shall advise Landlord of special HVAC
requirements.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	9.	 	 	Critical Dimensions:
	 	Tenant shall advise Landlord of all critical
dimensions necessary for construction.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	10.	 	 	Security Requirements:
	 	Tenant shall advise Landlord of the location,
type and any special requirements.

D-4

 

	 	 	 	 	 	 	 	 	 
	 

	 	 	11.	 	 	Furniture Systems:
	 	Tenant shall advise Landlord of all interfacing
requirements between furniture and systems for electrical, telephones, data,
anchoring, etc.

D-5

 

EXHIBIT D1

INTENTIONALLY LEFT BLANK

D1 - 1

 

EXHIBIT D2

BUILDING STANDARD TENANT IMPROVEMENTS

IV. The “Building Standard Tenant Improvements” (herein so called) are the following:

	 	 	 	 	 
	 

	 	A. Flooring:
	 	Grade and quality of carpeting to be selected by Landlord, with color
to be selected by Tenant from those offered by Landlord.
	 
	 	 	 	 
	 

	 	 	 	Standard Specification: Shaw Troubador 36, Shaw Shoal Creek II 36, or
Shaw Resolution 29.
	 
	 	 	 	 
	 

	 	 	 	Standard Specification for VCT flooring: Armstrong Premium Excelon,
Style: Canvas
	 
	 	 	 	 
	 

	 	B. Base:
	 	Carpet base to match carpeting selected by Tenant.
	 
	 	 	 	 
	 

	 	 	 	Grade and quality of rubber base, when applicable, to be selected by
Landlord.
	 
	 	 	 	 
	 

	 	 	 	Standard Specification: Johnsonite,
4" rubber base.
	 
	 	 	 	 
	 

	 	C. Partitions:
	 	Demising Walls: 3-5/8" metal
studs on 24" centers, blanket sound
insulation, 5/8" gypsum board on one side. Studs and one layer of gypsum board extend
to bottom of steel deck on floor above.
	 
	 	 	 	 
	 

	 	 	 	Interior Walls: 3-5/8" metal
studs on 24" centers, 5/8" gypsum board
on each side. Walls to be ceiling height and braced as per code
requirements.
	 
	 	 	 	 
	 

	 	 	 	All walls to be finished with tape, texture and paint.
	 
	 	 	 	 
	 

	 	 	 	Standard Paint Specification: Kwal-Howells 2800 Series, Eggshell
finish or Kwal-Howells 2300 Series, Semi-Gloss.
	 
	 	 	 	 
	 

	 	D. Doors/Side Lights:
	 	3'-0" x 8'-0" solid
core interior doors, 3'-0" x 8'-10"
exterior solid core flush wood doors with select white birch rotary cut veneer. Stain
to be selected from finish standards. Door frames are hollow metal. Glass
manufactured as per code requirements, with hollow metal frames. Standard hardware is
Schlage, 626 series in brushed chrome.
	 
	 	 	 	 
	 

	 	E. Ceiling:
	 	Armstrong RH90 Fireguard Tegular
Lay-In, 24" x 24" for use with 15/16"
exposed tee grid.
	 
	 	 	 	 
	 

	 	F. Electrical Outlets:
	 	Standard 110v duplex wall outlets.
	 
	 	 	 	 
	 

	 	G. Light Switches:
	 	Single pole switches.
	 
	 	 	 	 
	 

	 	H. Lighting Occupancy
Sensor:
	 	Automatic lighting control device-Uneco conserver series.
	 
	 	 	 	 
	 

	 	I. Light Fixtures:
	 	2' x 4', (3) lamp, 18-cell parabolic, recessed ceiling fixture.
Grade and quality of fixture selected by Landlord.
	 
	 	 	 	 
	 

	 	J. Fire Sprinkler
Requirements:
	 	Design build per Landlord, except special requirements, of which the
Tenant shall advise the Landlord.
	 
	 	 	 	 
	 

	 	K. Window Coverings:
	 	Mechoshade vertical roller shades.

D2 - 1

 

EXHIBIT E

LEGAL DESCRIPTION OF LAND

Beginning at a point which is North 0°08'51" East along the Quarter Section line 908.56 feet,
and North 89°04'36" East 740.83 feet, and North 55°02'48" East 206.85 feet from the
West Quarter Corner of Section 23, Township 2 South, Range 1 East, Salt Lake Base and Meridian; and
running thence North 34°55'16" West 67.93 feet to a point on the South Right-of-Way line of
I-215 and a point on a 2076.90 foot radius curve to the left the chord of which bears North
62°36'26" East; thence Northeasterly along said South line and curve through a central angle
of 5°57'01" a distance of 215.69 feet; thence North 67°29'16" East along said South
line 183.64 feet; thence South 31°38'10" East 111.32 feet; thence South 70°30'09" East
57.70 feet; thence South 34°39'50" East 284.29 feet; thence South 11°06'23" East 28.44
feet; thence South 42°36'15" East 63.15 feet; thence South 64°43'27" East 71.26 feet;
thence South 32°54'51" West 100.16 feet to a point on a 210.00 foot radius curve to the left
the chord of which bears South 88°59'48" West; thence Westerly along said curve through a
central angle of 67°50'08" a distance of 248.63 feet; thence South 55°04'44" West
161.13 feet to a point of a 835.00 foot radius curve to the right the chord of which bears South
55°10'54" West; thence Southwesterly along said curve through a central angle of
0°12'21" a distance of 3.00 feet; thence North 34°55'16" West 499.58 feet to the point
of beginning. Contains 234,930 square feet or 5.3932 acres.

E-1

 

EXHIBIT F

LEASE EXTENSION ADDENDUM

     THIS LEASE EXTENSION ADDENDUM (“Addendum”) is entered into as of ___, 2002, between
Landlord and Tenant (as those terms are defined in that certain Lease Agreement between Landlord
and Tenant, dated ___, 20___(the “Lease”). Subject to the provisions of the Lease,
Landlord hereby grants to Tenant the option (“Extension Option”) to extend the term of the Lease
for two (2) successive extension terms of five (5) years each in accordance with the provisions set
forth in this Addendum (an “Extension Renewal Term”). If the Term of the Lease is so extended,
such extension shall be on the same terms and conditions as are applicable during the initial Term
as set forth in the Lease, except that the Base Rent during the Extension Renewal Term shall be at
the “Prevailing Rental Rate” which shall mean the rental rate determined for the most comparable
office space located in the Complex as of the date of the Extension Notice (defined below) and
taking into account all relevant factors including, without limitation, any applicable tenant
improvement allowance, Base Year and expense then in effect, but in no event less than the Rent
under the Lease as of the date of the Extension Notice.

     1. Exercise. If Tenant desires to exercise an Extension Option, it shall send
notice thereof (an “Extension Notice”) to Landlord no more than three hundred (300) nor less than
two hundred seventy (270) calendar days prior to the expiration of the Term or Extension Renewal
Term of the Lease then in effect. Landlord and Tenant shall endeavor in good faith to determine
the Prevailing Rental Rate within thirty (30) calendar days after Landlord’s receipt of Tenant’s
Extension Notice. If they cannot agree within thirty (30) calendar days, each shall appoint an
appraiser who shall arrive at an estimate of the Prevailing Rental Rate within thirty (30) calendar
days. If such estimates are within five percent (5%) of each other, the average of the two shall
be the new Base Rent for the Extension Renewal Term. If the estimates are more than five percent
(5%) apart, each appraiser shall select a third appraiser within five (5) calendar days or, if they
fail to do so, Landlord shall select a third appraiser. The third appraiser shall prepare an
estimate of the Prevailing Rental Rate as provided above within thirty (30) calendar days and the
two closest of the three estimates shall be averaged to determine the new Base Rent for the new
Extension Renewal Term. No later than one hundred fifty (150) calendar days prior to the
expiration of the Term then in effect, Landlord and Tenant shall execute an amendment to the Lease
(an “Extension Amendment”) stating the new Base Rent and expiration date of the Lease Term. If
such an Extension Amendment is not fully executed for any reason as provided above, the Term shall
not be extended and all Extension Option(s) hereunder shall terminate. Notwithstanding the
foregoing, Tenant shall not be entitled to extend this Lease if an uncured Event of Default has
occurred under any term or provision contained in the Lease or a condition exists which with the
passage of time or the giving of notice, or both, would constitute an Event of Default pursuant to
the Lease as of the date of exercise of this Extension Option. The rights contained in this
Addendum shall be personal to the originally named Tenant and may be exercised only by the
originally named Tenant and any Related Entity (and not any other assignee, sublessee or other
Transferee of Tenant’s interest in this Lease) and only if the originally named Tenant or Related
Entity occupies the entire Premises as of the date it exercises the Extension Option in accordance
with the terms of this Addendum. If Tenant properly exercises the Extension Option and is not in
default under this Lease at the end of the initial Term of the Lease, the Term, as it applies to
the entire Premises then leased by Tenant, shall be extended for the Extension Renewal Term and the
Base Year shall be included among the factors considered in determining the Prevailing Rental Rate.

F-1

 

     2. Other Provisions. If Tenant fails to deliver a timely Extension Notice, Tenant
shall be considered to have elected not to exercise the Extension Option. Any termination of the
Lease during the initial or applicable Term or Extension Renewal Term shall terminate all renewal
or lease extension rights hereunder. The extension rights of Tenant hereunder shall not be
severable from the Lease, nor may such rights be assigned or otherwise conveyed in connection with
any permitted assignment of the Lease. During any Extension Renewal Term (a) no rent abatement or
other concession, if any, applicable to the initial Term or preceding Extension Renewal Term shall
apply to the Extension Renewal Term, and (b) all leasehold improvements within the Premises shall
be provided in their then-existing condition (on an “as-is” basis) at the time the Extension
Renewal Term commences.

F-2

 

     
           DATED this              
       day of       
              
                    ,
20                    .

	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 
	 	 	2855 E. COTTONWOOD PARKWAY, L.C., a Utah
limited liability company, by its following
Managing Member,
	 
	 	 	 	 	 	 
	 	 	COTTONWOOD CORPORATE CENTER, L.C., a Utah
limited liability company
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	JOHN L. WEST, Manager
	 
	 	 	 	 	 	 
	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 
	 	 	ADS ALLIANCE DATA SYSTEMS, INC., a Delaware
corporation
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 
	 

	 	 	 	Title:
	 	 
	 

	 	 	 	 	 	 

F-3

 

EXHIBIT G

ACKNOWLEDGMENT OF LEASE COMMENCEMENT DATE

STATEMENT OF CONFIRMATION AND

ACKNOWLEDGMENT OF LEASE COMMENCEMENT DATE

     In accordance with that certain Lease Agreement between 2855 E. COTTONWOOD PARKWAY, L.C., as
Landlord and the undersigned, as Tenant (the “Lease”), the Tenant hereby confirms the following:

     1. Construction of the Tenant Improvements is Substantially Complete, and the Term shall
commence as of
                                        
, for a term of                      years,
                     months, and
                    
days, ending on ___, subject to the early termination provisions contained in
paragraph 3.1 of the Lease.

     2. In accordance with the Lease, Base Rent shall begin to accrue on
                    , in the
amount of
                                        
 DOLLARS ($                    ).

	 	 	 	 	 	 	 
	 	 	 	 	     LANDLORD:
	 
	 	 	 	 	 	 
	 	 	2855 E. COTTONWOOD PARKWAY, L.C., a Utah limited
liability company, by its following Managing Member,
	 
	 	 	 	 	 	 
	 	 	 	 	COTTONWOOD CORPORATE CENTER, L.C., a Utah limited
liability company
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	JOHN L. WEST, Manager
	 
	 	 	 	 	 	 
	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 
	 	 	ADS ALLIANCE DATA SYSTEMS, INC., a Delaware
corporation
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 

  G-1

 

EXHIBIT H

STATEMENT OF TENANT IN RE: LEASE

[Tenant letterhead]

Teachers Insurance and Annuity

     Association of America

730 Third Avenue

New York, NY 10017

	 	 	 
	RE:

	 	TIAA APPLICATION #UT00063
	 

	 	TIAA MTGE. #000445900
	 

	 	Cottonwood Corporate Center, Building 11
	 

	 	2855 East Cottonwood Parkway
	 

	 	Salt Lake City, UT 84121
	 

	 	Suite No. 100

Ladies and Gentlemen:

          It is our understanding that you have committed to place a mortgage upon the subject premises
and as a condition precedent thereof have required this certification of the undersigned.

          The undersigned, as Lessee, under that certain Lease dated
                    , 20___, made with 2855 E.
COTTONWOOD PARKWAY, L.C., as Lessor, hereby ratifies said Lease and certifies that:

	 	1.	 	The “Commencement Date” of said Lease is
                                        
, 20                    ; and
	 
	 	2.	 	the undersigned is presently solvent and free from reorganization and/or
bankruptcy and is in occupancy, open, and conducting business with the public in the
premises; and
	 
	 	3.	 	the operation and use of the premises do not involve the generation, treatment,
storage, disposal or release of a hazardous substance or a solid waste into the
environment other than to the extent necessary to conduct its ordinary course of
business in the premises and in accordance with all applicable environmental laws, and
that the premises are being operated in accordance with all applicable environmental
laws, zoning ordinances and building codes; and
	 
	 	4.	 	the current base rental payable pursuant to the terms of said Lease is $                     
per annum; and further, additional rental pursuant to said Lease is payable
as follows:
                                        
                                       &n
bsp; ; and
	 
	 	5.	 	said Lease is in full force and effect and has not been assigned, modified,
supplemented or amended in any way (except by agreements(s) dated                     ), and neither party
thereto is in default thereunder; and
	 
	 	6.	 	the Lease described above represents the entire agreement between the parties
as to the leasing of the premises; and
	 
	 	7.	 	the term of said Lease expires on
                                        
; and
	 
	 	8.	 	all conditions under said Lease to be performed by the Lessor have been
satisfied, including, without limitation, all co-tenancy requirements thereunder, if
any; and
	 
	 	9.	 	all required contributions by Lessor to Lessee on account of Lessee’s
improvements have been received; and
	 
	 	10.	 	on this date there are no existing defenses or offsets, claims or counterclaims
which the undersigned has against the enforcement of said Lease by the Lessor; and

H-1

 

	 	11.	 	no rental has been paid in advance and no security (except the security deposit
in the amount of $ _______) has been deposited with Lessor; and
	 
	 	12.	 	Lessee’s floor area is _______ square feet (rentable); and
	 
	 	13.	 	The most recent payment of current base rental was for the payment due on _______, and all base rental and additional rental payable pursuant to the terms
of the Lease have been paid up to said date; and
	 
	 	14.	 	the undersigned acknowledges notice that Lessor’s interest under the Lease and
the rent and all other sums due thereunder will be assigned to you as part of the
security for a mortgage loan by you to Lessor. In the event that Teachers Insurance
and Annuity Association of America, as lender, notifies the undersigned of a default
under the mortgage and demands that the undersigned pay its rent and all other sums due
under the Lease to lender, Lessee agrees that it shall pay its rent and all such other
sums to lender.

Very truly yours,

ADS ALLIANCE DATA SYSTEMS, INC.

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Its:
	 	 	 	 
	 

	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 

H-2

 

SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

     THIS SUBORDINTION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”) is made by and
between TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, a New York corporation with offices
at 730 third Avenue, New York, New York 10017 (“Lender”), and ADS ALLIANCE DATA SYSTEMS, INC., a
Delaware corporation, with its principal place of business at 17655 Waterview Parkway, Dallas,
Texas 75252 (“Tenant”).

RECITALS

     A. Lender has made or is about to make a loan (together with all advances and increases,
the “Loan”) to 2855 E. COTTONWOOD PARKWAY, L.C., a limited liability company (“Borrower”).

     B. Borrower, as Landlord, and Tenant have entered into a lease dated
                     , 20___, as
amended by amendments dated                     , 20___(the “Lease”) which leased to Tenant Suite No.
___(the “Leased
Space”) located in the Property (defined below).

     C. The Loan is or will be secured by the Trust Deed, Assignment of Leases and Rents, Fixture
Filing Statement and Security Agreement recorded or to be recorded in the official records of the
County of Salt Lake, State or Commonwealth of Utah (together with all advances, increases,
amendments or consolidations, the “Mortgage”) and the Assignment of Leases and Rents recorded or to
be recorded in such official records (together with all amendments or consolidations, the
“Assignment”), assigning to Lender the Lease and all rent, additional rent and other sums payable
by Tenant under the Lease (the “Rent”).

     D. The Mortgage encumbers the real property, improvements and fixtures located at 2855 East
Cottonwood Parkway in the County of Salt Lake, State or Commonwealth of Utah, and described on
Exhibit “A” (the “Property”).

     IN CONSIDERATION of the mutual agreements contained in this Agreement, Lender and Tenant agree
as follows:

     1. The Lease and all of Tenant’s rights under the Lease are and will remain subject and
subordinate to the lien of the Mortgage and all of Lender’s rights under the Mortgage and Tenant
will not subordinate the Lease to any other lien against the Property without Lender’s prior
consent.

     2. This Agreement constitutes notice to Tenant of the Mortgage and the Assignment and, upon
receipt of notice from Lender, Tenant will pay the Rent as and when due under the Lease to Lender
and the payments will be credited against the Rent due under the Lease.

     3. Tenant does not have and will not acquire any right or option to purchase any portion of or
interest in the Property.

     4. Tenant and Lender agree that if Lender exercises its remedies under the Mortgage or the
Assignment and if Tenant is not then in default under this Agreement and if Tenant is not then in
default beyond any applicable grace and cure periods under the Lease:

          (a) Lender will not name Tenant as a party to any judicial or non-judicial foreclosure or
other proceeding to enforce the Mortgage unless joinder is required under applicable law but in
such case Lender will not seek affirmative relief against Tenant, the Lease will not be terminated
and Tenant’s possession of the Leased Space will not be disturbed;

          (b) If Lender or any other entity (a “Successor Landlord”) acquires the Property through
foreclosure, by other proceeding to enforce the Mortgage or by deed-in-lieu of foreclosure (a
“Foreclosure”), Tenant’s possession of the Leased Space will not be disturbed and the Lease will
continue in full force and effect between Successor Landlord and Tenant; and

          (c) If, notwithstanding the foregoing, the Lease is terminated as a result of a Foreclosure, a
lease between Successor Landlord and Tenant will be deemed created, with no further instrument
required, on the same terms as the Lease except that the term of the replacement lease will be the
then unexpired term of the Lease. Successor Landlord and Tenant will execute a replacement lease
at the request of either.

     5. Upon Foreclosure, Tenant will recognize and attorn to Successor Landlord as the
landlord under the Lease for the balance of the term. Tenant’s attornment will be self-operative
with no further instrument required to effectuate the attornment except that at Successor
Landlord’s request, Tenant will execute instruments reasonably satisfactory to Successor Landlord confirming the attornment.

H-3

 

     6. Successor Landlord will not be:

          (a) liable for any act or omission of any prior landlord under the Lease occurring before the
date of the Foreclosure except for repair and maintenance obligations of a continuing nature
imposed on the landlord under the Lease;

          (b) required to credit Tenant with any Rent paid more than one month in advance or for any
security deposit unless such Rent or security deposit has been received by Successor Landlord;

          (c) bound by any amendment, renewal or extension of the Lease that is inconsistent with the
terms of this Agreement or is not in writing and signed both by Tenant and landlord;

          (d) bound by any reduction of the Rent unless the reduction is in connection with an extension
or renewal of the Lease at prevailing market terms or was made with Lender’s prior consent;

          (e) bound by any reduction of the term1 of the Lease or any
termination,
cancellation or surrender of the Lease unless the reduction, termination, cancellation or surrender
occurred during the last 6 months of the term or was made with Lender’s prior consent;

          (f) bound by any amendment, renewal or extension of the Lease entered into without Lender’s
prior consent if the Leased Space represents 50% or more of the net rentable area of the building
in which the Leased Space is located;

          (g) [Intentionally deleted];

          (h) subject to any credits, offsets, claims, counterclaims or defenses that Tenant may have
that arose prior to the date of the Foreclosure or liable for any damages Tenant may suffer as a
result of any misrepresentation, breach of warranty or any act of or failure to act by any party
other than Successor Landlord;

          (i) bound by any obligation to make improvements to the Property, including the Leased Space,
to make any payment or give any credit or allowance to Tenant provided for in the Lease or to pay
any leasing commissions arising out of the Lease, except that Successor Landlord will be:

(i) bound by any such obligations provided for in the Lender-approved form
lease;

(ii) bound by any such obligations if the overall economic terms of the
Lease (including the economic terms of any renewal options) represented
market terms for similar space in properties comparable to the Property when
the Lease was executed; and

(iii) bound to comply with the casualty and condemnation restoration
provisions included in the Lease provided that Successor Landlord receives
the insurance or condemnation proceeds;

or;

          (j) liable for obligations under the Lease with respect to any off-site property or facilities
for the use of Tenant (such as off-site leased space or parking) unless Successor Landlord acquires
in the Foreclosure the right, title or interest to the off-site property.

     7. Lender will have the right, but not the obligation, to cure any default by Borrower,
as landlord, under the Lease. Tenant will notify Lender of any default that would entitle Tenant
to terminate the Lease or abate the Rent and any notice of termination or abatement will not be
effective unless Tenant has so notified Lender of the default and Lender has had a 30-day cure
period (or such longer period as may be necessary if the default is not susceptible to cure within
30 days) commencing on the latest to occur of the date on which (I) the cure period under the Lease
expires; (ii) Lender receives the notice required by this paragraph; and (iii) Successor Landlord
obtains possession of the Property if the default is not susceptible to cure without possession.

 

			
	1	 	For purposes of this subparagraph “the
term of the Lease” includes any renewal term after the right to renew has
been exercised.

H-4

 

     8. All notices, requests or consents required or permitted to be given under this Agreement
must be in writing and sent by certified mail, return receipt requested or by nationally recognized
overnight delivery service providing evidence of the date of delivery, with all charges prepaid,
addressed to the appropriate party at the address set forth above.

     9. Any claim by Tenant against Successor Landlord under the Lease or this Agreement will be
satisfied solely out of Successor Landlord’s interest in the Property and Tenant will not seek
recovery against or out of any other assets of Successor Landlord. Successor Landlord will have no
liability or responsibility for any obligations under the Lease that arise subsequent to any
transfer of the Property by Successor Landlord.

     10. This Agreement is governed by and will be construed in accordance with the laws of the
state or commonwealth in which the Property is located.

     11. Lender and Tenant waive trial by jury in any proceeding brought by, or counterclaim
asserted by, Lender or Tenant relating to this Agreement.

     12. If there is a conflict between the terms of the Lease and this Agreement, the terms of
this Agreement will prevail as between Successor Landlord and Tenant.

     13. This Agreement binds and inures to the benefit of Lender and Tenant and their respective
successors, assigns, heirs, administrators, executors, agents and representatives.

     14. This Agreement contains the entire agreement between Lender and Tenant with respect to the
subject matter of this Agreement, may be executed in counterparts that together constitute a single
document and may be amended only by a writing signed by Lender and Tenant.

     15. Tenant certifies that: the Lease represents the entire agreement between the Landlord
under the Lease and Tenant regarding the Leased Space; the Lease is in full force and effect;
neither party is in default under the Lease beyond any applicable grace and cure periods and no
event has occurred which with the giving of notice or passage of time would constitute a default
under the Lease; Tenant has entered into occupancy and is open and conducting business in the
Leased Space; and all conditions to be performed to date by the Landlord under the Lease have been
satisfied.

     IN WITNESS WHEREOF, Lender and Tenant have executed and delivered this Agreement as
                                        
, 20___.

	 	 	 	 	 	 	 
	LENDER:	 	TEACHERS INSURANCE AND ANNUITY
	 	 	ASSOCIATION OF AMERICA, a New York
	 	 	corporation
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	TENANT:	 	ADS ALLIANCE DATA SYSTEMS, INC., a Delaware
	 	 	corporation
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

ACKNOWLEDGMENT

	 	 	 	 	 	 	 	 	 
	STATE OF

	 	 	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	:	 	 	ss.
	COUNTY OF

	 	 	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	 

     On this the                      day of
                    , 20___, before me personally appeared
                                        
                     who acknowledged himself to be the
                                        
                                       &n
bsp;

H-5

 

                    
of                                       &nbs
p;                    , a corporation, and that he, as
such                                       &n
bsp; being authorized so to do, executed the foregoing instrument for the purposes therein
contained.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	NOTARY PUBLIC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Residing at	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	My Commission Expires:
	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	STATE OF

	 	 	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	:	 	 	ss.
	COUNTY OF

	 	 	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	 

     On this the                      day of
                    , 20___, before me personally appeared
                                        
                                       &n
bsp; who acknowledged himself to be the
                                        
                                       &n
bsp; of
                                        
                    
                    , a corporation, and that he, as such
                                        
                     being authorized so to do, executed the foregoing instrument
for the purposes therein contained.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	NOTARY PUBLIC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Residing at	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	My Commission Expires:
	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

H-6

 

EXHIBIT “A”

The following described real property is located in Salt Lake County, Utah:

PARCEL 1 (“COTTONWOOD CORPORATE CENTER PARCEL 11”):

Beginning at a point which is North 0°08'51" East along the Quarter Section line
908.56 feet, and North 89°04'36" East 740.83 feet, and North 55°02'48" East
206.85 feet from the West Quarter Corner of Section 23, Township 2 South, Range 1 East, Salt
Lake Base and Meridian; and running thence North 34°55'16" West 67.93 feet to a point
on the South Right-of-Way line of I-215 and a point on a 2076.90 foot radius curve to the
left the chord of which bears North 62°36'26" East; thence Northeasterly along said
South line and curve through a central angle of 5°57'01" a distance of 215.69 feet;
thence North 67°29'16" East along said South line 183.64 feet; thence South
31°38'10" East 111.32 feet; thence South 70°30'09" East 57.70 feet; thence South
34°39'50" East 284.29 feet; thence South 11°06'23" East 28.44 feet; thence South
42°36'15" East 63.15 feet; thence South 64°43'27" East 71.26 feet; thence South
32°54'51" West 100.16 feet to a point on a 210.00 foot radius curve to the left the
chord of which bears South 88°59'48" West; thence Westerly along said curve through a
central angle of 67°50'08" a distance of 248.63 feet; thence South 55°04'44"
West 161.13 feet to a point of a 835.00 foot radius curve to the right the chord of which
bears South 55°10'54" West; thence Southwesterly along said curve through a central
angle of 0°12'21" a distance of 3.00 feet; thence North 34°55'16" West 499.58
feet to the point of beginning. Contains 234,930 square feet or 5.3932 acres.

PARCEL 2 (“COMMON ROADWAY”):

A perpetual, nonexclusive right-of-way and easement for vehicular and pedestrian ingress and
egress, appurtenant to PARCEL 1, as established by a Declaration of Easements, Covenants and
Restrictions recorded January 17, 1996, as Entry No. 6259074, in Book 7311, at page 821 of
the official records of the Salt Lake County Recorder, as amended by a First Amendment to
Declaration of Easements, Covenants and Restrictions, recorded July 3, 1996, as Entry No.
6398547, in Book 7437, at page 265 of the official records of the Salt Lake County Recorder,
over the following described property:

BEGINNING at a point which is North 0°08'51" East along the Section line 447.50 feet
and South 89°49'13" East 50.00 feet from the West Quarter Corner of Section 23,
Township 2 South, Range 1 East, Salt Lake Base and Meridian, and running thence North
0°08'51" East 71.00 feet; thence South 89°49'13" East 669.22 feet; thence North
0°10'47" East 12.00 feet to a point of a 787.50 foot radius curve to the left, the
chord of which bears North 72°37'45" East; thence Easterly along the arc of said curve
and through a central angle of 35°06'03" a distance of 482.44 feet to a point of
tangency; thence North 55°04'44" East 161.13 feet to a point of a 257.50 foot radius
curve to the right, the chord of which bears South 81°12'57" East; thence Easterly
along the arc of said curve and through a central angle of 87°24'39" a distance of
392.84 feet to a point of tangency; thence South 37°30'37" East 388.28 feet to a point
of a 282.50 foot radius curve to the left, the chord of which bears South 57°30'40"
East; thence Southeasterly along the arc of said curve and through a central angle of
40°00'07" a distance of 197.23 feet to a point of tangency; thence South
77°30'44" East 203.08 feet; thence South 35°38'28" East 52.78 feet to the West
right-of-way line of 3000 East Street; thence South 12°27'22" West along said West
line 71.77 feet; thence North 77°30'44" West 147.86 feet to a point of a 693.16 foot
radius curve to the right, the chord of which bears North 71°09'19" West; thence
Northwesterly along the arc of curve and through a central angle of 13°28'28" a
distance of 163.01 feet to a point of a compound curve to the right, the radius point of
which is North 22°43'23" East 377.50 feet; thence Northwesterly along the arc of said
curve and through a central angle of 29°46' a distance of 196.12 feet to a point of
tangency; thence North 37°30'37" West 388.28 feet to a point of a 162.50 foot radius
curve to the left, the chord of which bears North 81°12'57" West; thence Westerly
along the arc of said curve and through a central angle of 87°24'39" a distance of
247.91 feet to a point of tangency; thence South 55°04'44" West 161.13 feet to a point
of a 882.50 foot radius curve to the right, the chord of which bears South 72°37'45"
West; thence Westerly along the arc of said curve and through a central angle of
35°06'03" a distance of 540.64 feet to a point of tangency; thence North
89°49'13" West 441.91 feet; thence
 North 0°10'47" East 12.00 feet; thence North
89°49'13" West 227.27 feet to the point of BEGINNING.

H-7exv10w21

 

Exhibit 10.21

MORGUARD REAL ESTATE INVESTMENT TRUST

 

Landlord

- and -

ALLIANCE DATA L.P.

by its general partner ENLOGIX INC.

 

Tenant

- and -

ALLIANCE DATA SYSTEMS CORP.

 

Indemnifier

 

LEASE OF OFFICE SPACE

MULTI-TENANT OFFICE PROJECT

 

	 	 	 	 	 
	 

	 	LEASED PREMISES:
	 	200 Yorkland Boulevard
	 

	 	 	 	Suites 1000 and 1100
	 

	 	 	 	Toronto, Ontario
	 

	 	 	 	M2J 5C1

 MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)

 

 

I N D E X

	 	 	 	 	 	 	 
	SECTION	 	 	 	PAGE	 
	 	 	 
	 	 	 	 
	 	 	Term Sheet
	 	 	1	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 1.00 - DEFINITIONS
	 	 	 	 
	 	 	 
	 	 	 	 
	1.01	 	Definitions
	 	 	3	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 2.00 - GRANT OF LEASE AND GENERAL COVENANTS
	 	 	 	 
	 	 	 
	 	 	 	 
	2.01	 	Grant
	 	 	3	 
	2.02	 	Landlord’s General Covenants
	 	 	3	 
	2.03	 	Tenant’s General Covenants
	 	 	3	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 3.00 - TERM AND POSSESSION
	 	 	 	 
	 	 	 
	 	 	 	 
	3.01	 	Term
	 	 	4	 
	3.02	 	Acceptance of Leased Premises
	 	 	4	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 4.00 - RENT
	 	 	 	 
	 	 	 
	 	 	 	 
	4.01	 	Rent
	 	 	4	 
	4.02	 	Intent
	 	 	4	 
	4.03	 	Payment of Rent – General
	 	 	4	 
	4.04	 	Partial Month
	 	 	4	 
	4.05	 	Payment of Tenant’s Occupancy Costs
	 	 	4	 
	4.06	 	Resolution of Disputes
	 	 	6	 
	4.07	 	Area Determination
	 	 	6	 
	4.08	 	Vacancy
	 	 	6	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 5.00 – USE AND OCCUPATION
	 	 	 	 
	 	 	 
	 	 	 	 
	5.01	 	Use of Leased Premises
	 	 	6	 
	5.02	 	Compliance with Laws
	 	 	7	 
	5.03	 	Prohibited Uses
	 	 	7	 
	5.04	 	Common Elements
	 	 	7	 
	5.05	 	Hazardous Use
	 	 	8	 
	5.06	 	Tenant’s Security Interest
	 	 	8	 
	5.07	 	Rules and Regulations
	 	 	8	 
	5.08	 	Permitted Signs
	 	 	8	 
	5.09	 	Prohibited Signs
	 	 	8	 
	5.10	 	Window Coverings
	 	 	8	 
	5.11	 	Parking
	 	 	8	 
	5.12	 	Authorization of Enquiries
	 	 	9	 
	5.13	 	Records
	 	 	9	 
	5.14	 	Overloading
	 	 	9	 
	5.15	 	Telecommunications
	 	 	9	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 6.00 - SERVICES, MAINTENANCE, REPAIR AND ALTERATIONS
BY LANDLORD
	 	 	 	 
	 	 	 
	 	 	 	 
	6.01	 	Operation of Project
	 	 	10	 
	6.02	 	Building Services and Facilities
	 	 	10	 
	6.03	 	Maintenance, Repair and Replacement
	 	 	10	 
	6.04	 	Alterations / Renovations by Landlord
	 	 	11	 
	6.05	 	Access by Landlord
	 	 	12	 
	6.06	 	Energy Conservation
	 	 	12	 
	6.07	 	Supervision and Extended Services
	 	 	12	 
	6.08	 	Landlord’s Work
	 	 	12	 
	6.09	 	Control by Landlord
	 	 	12	 

	 	 	 	 	 	 	 
	MORGUARD
February 2005 - Net Office, Multi-Tenant (General
Application)	 	 	 	Index-1

 

 

	 	 	 	 	 	 	 
	SECTION	 	 	 	PAGE	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 7.00 - PAYMENT FOR SERVICES AND MAINTENANCE, REPAIR AND
ALTERATIONS BY TENANT
	 	 	 	 
	 	 	 
	 	 	 	 
	7.01	 	Utilities
	 	 	12	 
	7.02	 	Lights
	 	 	13	 
	7.03	 	Heating, Ventilation and Air Conditioning
	 	 	13	 
	7.04	 	Alterations by Tenant
	 	 	13	 
	7.05	 	Tenant’s Trade Fixtures and Personal Property
	 	 	14	 
	7.06	 	Maintenance and Repair
	 	 	14	 
	7.07	 	Inspection
	 	 	14	 
	7.08	 	Failure to Maintain
	 	 	14	 
	7.09	 	Liens
	 	 	15	 
	7.10	 	Roof
	 	 	15	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 8.00 - TAXES
	 	 	 	 
	 	 	 
	 	 	 	 
	8.01	 	Taxes Payable by Landlord
	 	 	15	 
	8.02	 	Taxes Payable by Tenant
	 	 	15	 
	8.03	 	Tax Increases Attributable to Tenant
	 	 	16	 
	8.04	 	GST
	 	 	16	 
	8.05	 	Landlord’s Election
	 	 	16	 
	8.06	 	Right to Contest
	 	 	16	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 9.00 - INSURANCE, LIABILITY AND ENVIRONMENTAL
	 	 	 	 
	 	 	 
	 	 	 	 
	9.01	 	Landlord’s Insurance
	 	 	16	 
	9.02	 	Tenant’s Insurance
	 	 	17	 
	9.03	 	Placement of Tenant’s Insurance by Landlord
	 	 	18	 
	9.04	 	Limitation of Landlord’s Liability
	 	 	18	 
	9.05	 	Environmental Issues
	 	 	18	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 10.00 - DAMAGE AND DESTRUCTION
	 	 	 	 
	 	 	 
	 	 	 	 
	10.01	 	Limited Damage to Leased Premises, Access or Services
	 	 	19	 
	10.02	 	Major Damage to Leased Premises
	 	 	20	 
	10.03	 	Damage to Building
	 	 	20	 
	10.04	 	No Abatement
	 	 	20	 
	10.05	 	Notify Landlord
	 	 	20	 
	10.06	 	Expropriation
	 	 	20	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 11.00 - DEFAULT
	 	 	 	 
	 	 	 
	 	 	 	 
	11.01	 	Arrears
	 	 	21	 
	11.02	 	Costs of Enforcement
	 	 	21	 
	11.03	 	Performance of Tenant’s Obligations
	 	 	21	 
	11.04	 	Remedies on Default
	 	 	21	 
	11.05	 	Availability of Remedies
	 	 	22	 
	11.06	 	Waiver
	 	 	22	 
	11.07	 	Waiver of Exemption and Redemption
	 	 	23	 
	11.08	 	Companies’ Creditors Arrangement Act
	 	 	23	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 12.00 - ASSIGNMENT, SUBLETTING AND OTHER TRANSFERS
	 	 	 	 
	 	 	 
	 	 	 	 
	12.01	 	Request for Consent
	 	 	23	 
	12.02	 	Basis for Consent
	 	 	23	 
	12.03	 	Terms and Conditions Relating to Consents
	 	 	24	 
	12.04	 	Subsequent Transfers
	 	 	24	 
	12.05	 	Profit Rents upon Transfers
	 	 	24	 
	12.06	 	Advertising
	 	 	24	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 13.00 - TRANSFERS BY LANDLORD
	 	 	 	 
	 	 	 
	 	 	 	 
	13.01	 	Sale, Conveyance and Assignment
	 	 	25	 
	13.02	 	Effect of Transfer
	 	 	25	 
	13.03	 	Subordination
	 	 	25	 
	13.04	 	Attornment
	 	 	25	 
	13.05	 	Effect of Attornment
	 	 	25	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 14.00 - SURRENDER
	 	 	 	 
	 	 	 
	 	 	 	 
	14.01	 	Possession and Restoration
	 	 	25	 

	 	 	 	 	 	 	 
	MORGUARD
February 2005 - Net Office, Multi-Tenant (General
Application)	 	 	 	Index-3

 

 

	 	 	 	 	 	 	 
	SECTION	 	 	 	PAGE	 
	14.02	 	Tenant’s Trade Fixtures and Personal Property
	 	 	26	 
	14.03	 	Overholding
	 	 	26	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE 15.00 - GENERAL
	 	 	 	 
	 	 	 
	 	 	 	 
	15.01	 	Estoppel Certificates
	 	 	26	 
	15.02	 	Entire Agreement
	 	 	26	 
	15.03	 	Registration of Notice of Lease
	 	 	26	 
	15.04	 	Project Name and Trademarks
	 	 	27	 
	15.05	 	“For Lease” Signs
	 	 	27	 
	15.06	 	Unavoidable Delays
	 	 	27	 
	15.07	 	Limitation of Recourse
	 	 	27	 
	15.08	 	Notice
	 	 	27	 
	15.09	 	Delegation of Authority
	 	 	28	 
	15.10	 	Relationship of Parties
	 	 	28	 
	15.11	 	Governing Law
	 	 	28	 
	15.12	 	Amendment or Modification
	 	 	28	 
	15.13	 	Legal and Administration Costs
	 	 	28	 
	15.14	 	Construction
	 	 	28	 
	15.15	 	Captions and Headings
	 	 	28	 
	15.16	 	Interpretation
	 	 	28	 
	15.17	 	Time of the Essence
	 	 	28	 
	15.18	 	Successors and Assigns
	 	 	28	 
	15.19	 	Counterparts
	 	 	28	 
	15.20	 	Further Schedules
	 	 	28	 
	15.21	 	Independent Legal Advice
	 	 	28	 
	15.22	 	No Offer
	 	 	29	 
	15.23	 	Survival of Covenants and Indemnities
	 	 	29	 
	15.24	 	Exculpatory Provisions
	 	 	29	 
	15.25	 	Brokerage Commissions
	 	 	29	 
	15.26	 	Covenants to be Performed at Landlord’s Option
	 	 	29	 
	15.27	 	Radiation
	 	 	29	 

SCHEDULES

	 	 	 	 	 
	Schedule A

	 	-
	 	Plan Showing Leased Premises
	 
	 	 	 	 
	Schedule A1

	 	-
	 	Legal Description of Land
	 
	 	 	 	 
	Schedule A2

	 	-
	 	Additional Leased Premises
	 
	 	 	 	 
	Schedule B

	 	-
	 	Definitions
	 
	 	 	 	 
	Schedule C

	 	-
	 	Rules and Regulations
	 
	 	 	 	 
	Schedule D

	 	-
	 	Landlord’s Work
	 
	 	 	 	 
	Schedule E

	 	-
	 	Additional Covenants, Agreements and Conditions (if any)
	 
	 	 	 	 
	Schedule F

	 	-
	 	Form of Indemnity Agreement (if applicable)
	 
	 	 	 	 
	Schedule G

	 	-
	 	Security Interest – Remedies on Default
	 
	 	 	 	 
	Schedule H

	 	-
	 	Contents of Leased Premises
	 
	 	 	 	 
	Schedule J

	 	-
	 	Telecommunications Facilities

	 	 	 	 	 	 	 
	MORGUARD
February 2005 - Net Office, Multi-Tenant (General
Application)	 	 	 	Index-3

 

 

PAGE 1 OF TERM SHEET — FORMING PART OF LEASE OF OFFICE SPACE — MULTI-TENANT

	 	 	 	 	 	 	 	 	 	 	 	 	 
	1.	 	(a)	 	LANDLORD: MORGUARD REAL ESTATE INVESTMENT TRUST	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	ADDRESS:
	 	55 City Centre Drive	 	 	 	 	 	 
	 

	 	 	 	 	 	Suite 800	 	 	 	 	 	 
	 

	 	 	 	 	 	Mississauga, ON L5B 1M3	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	c/o Morguard Investments Limited	 	TELEPHONE:	 	 	905.281.3800	 
	 

	 	 	 	 	 	 	 	FAX NUMBER:
	 	 	905.281.4826	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Attention: Vice-President, Property Management, Office/Industrial, Eastern Canada
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	(b)	 	LANDLORD’S HEAD OFFICE:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	c/o Morguard Investments Limited	 	TELEPHONE:	 	 	905.281.3800	 
	 	 	 	 	800 – 55 City Centre Drive	 	FAX NUMBER	 	 	905.281.1800	 
	 	 	 	 	Mississauga, ON L5B 1M3	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Attention: President	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	(c)	 	Landlord’s “Environmental Contact”: Operations Manager	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	(d)	 	The Landlord covenants, warrants and represents to the Tenant that Morguard Realty Holdings Inc. holds registered title to the Project as nominee of the Landlord.
	 	 	 	 	 

	2.	 	TENANT (legal name): ALLIANCE DATA L.P. by its general partner, ENLOGIX INC.

	 	 	 	 	 
	 

	 	ADDRESS:
	 	TELEPHONE: 416-496-5299
	 

	 	200 Yorkland Boulevard	 	 
	 

	 	Suite 1000 and 1100	 	 
	 

	 	Toronto, ON M2J 5C1	 	 
	 
	 	 	 	 
	 

	 	Attention: Peter Hazelwood	 	 
	 
	 	 	 	 
	 

	 	TENANT’S HEAD OFFICE:	 	 
	 
	 	 	 	 
	 

	 	Same as above.	 	 

	3.	 	PROJECT NAME: 200 Yorkland Boulevard

	 
	 	 	MUNICIPAL ADDRESS OF PROJECT: 200 Yorkland Boulevard, Toronto, Ontario

	4.	 	LEASED PREMISES:
	 
	 	 	
Attached as Schedule A to this Lease is a plan of the Project showing the Leased Premises by
hatching. The Leased Premises are comprised of the 10th and 11th
floors of the Building and are designated as unit(s) 1000 and 1100.

	5.	 	RENTABLE AREA OF LEASED PREMISES:
	 
	 	 	The Rentable Area of the Leased Premises has been calculated by the Landlord’s architect or
surveyor in accordance with the BOMA ANSI standards ANSI Z65.1-1980, reaffirmed 1989 (the
“BOMA Standard”), and is deemed, for the purposes of this Lease, to be 27,599 square feet
for the Term and any extension and renewal periods.

	 	 	 	 	 	 	 
	6.

	 	(a)
	 	SECURITY DEPOSIT:
	 	$NIL
	 
	 	 	 	 	 	 
	 

	 	(b)
	 	OTHER DEPOSIT:
	 	$NIL

	 	 	 	 	 
	 	 	Initials
	 	 	Landlord	 	Tenant
	 
	 	 	 	 

	 	 	 	 	 	 	 
	MORGUARD
February 2005 - Net Office, Multi-Tenant (General
Application)	 	 	 	Page 1

 

 

PAGE 2 OF TERM SHEET — FORMING PART OF LEASE OF OFFICE SPACE — MULTI-TENANT

	 	 	 	 	 
	7.

	 	TERM:
	 	7 years, 0 months, 0 days.
	 
	 	 	 	 
	 

	 	(a)
	 	FIRST DAY OF TERM: January 1, 2006
	 
	 	 	 	 
	 

	 	(b)
	 	LAST DAY OF TERM: December 31, 2012

	8.	 	BASIC RENT:

From: January 1, 2006 to December 31, 2008 $331,188.00 per annum $27,599.00 per mo.
calculated at a rate of $12.00 per square foot per annum of the Rentable Area of the Leased
Premises

From: January 1, 2009 to December 31, 2010 $344,987.52 per annum $28,748.96 per mo. calculated
at a rate of $12.50 per square foot per annum of the Rentable Area of the Leased Premises.

From: January 1, 2011 to December 31, 2012 $386,386.00 per annum $32,198.83 per mo. calculated
at a rate of $14.00 per square foot per annum of the Rentable Area of the Leased Premises.

	9.	 	USE OF LEASED PREMISES:

The Leased Premises may be used and occupied for the purpose of general business offices
including, without limitation, for the business of providing processing, transaction and
marketing services, and as a call centre, and any other use permitted by the applicable
by-laws covering the Leased Premises, and first approved by the Landlord and for no other
purpose. The Leased Premises shall not be used for any use prohibited by Article 5.00 or
Section 9.05. The Tenant’s use in the Leased Premises as a call centre shall be limited to
the extent that the number of employees shall be the lesser of 100 employees per floor and
that number of employees per floor as determined by any governmental building or fire
regulations.

	 	 	 	 	 	 	 
	10.

	 	ENVIRONMENTAL ISSUES:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	LEASE SECTION 9.05:
	 	Applies þ
	 	Does not apply o
	 
	 	 	 	 	 	 
	 

	 	RIDER 1 (SECTION 9.05):
	 	Applies o
	 	Does not apply þ
	 
	 	 	 	 	 	 
	11.	 	INDEMNIFIER: ALLIANCE DATA SYSTEMS CORP.	 	 
	 

	 	 	 	TELEPHONE: (972) 348-4442	 	 
	 

	 	ADDRESS:	 	 	 	 
	 

	 	17655 Waterview Parkway	 	 	 	 
	 

	 	Dallas, Texas 75252	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Attention: General Counsel	 	 	 	 

Additional Covenants, Agreements and Conditions (if any) listed here are more particularly set out
in Schedule E.

	 	1.	 	AREA MEASUREMENT
	 
	 	2.	 	LEASEHOLD IMPROVEMENT ALLOWANCE
	 
	 	3.	 	TENANT’S WORK
	 
	 	4.	 	WORKING DRAWINGS
	 
	 	5.	 	PERMITS AND APPROVALS
	 
	 	6.	 	RIGHT TO ASSIGN OR SUBLET
	 
	 	7.	 	ROOF MOUNTED COMMUNICATION EQUIPMENT
	 
	 	8.	 	SIGNAGE
	 
	 	9.	 	RESTORATION

	 	 	 	 	 
	 	 	Initials
	 	 	Landlord	 	Tenant
	 
	 	 	 	 

	 	 	 	 	 	 	 
	MORGUARD
February 2005 - Net Office, Multi-Tenant (General
Application)	 	 	 	Page 2

 

 

PAGE 3 OF TERM SHEET — FORMING PART OF LEASE OF OFFICE SPACE — MULTI-TENANT

	 	10.	 	OPTION TO EXTEND
	 
	 	11.	 	OPTION TO EXPAND
	 
	 	12.	 	PARKING
	 
	 	13.	 	SALE AND DEMOLITION
	 
	 	14.	 	NO REQUIREMENT TO OCCUPY
	 
	 	15.	 	NON-DISTURBANCE AGREEMENT
	 
	 	16.	 	ENVIRONMENTAL
	 
	 	17.	 	CASH INDUCEMENT
	 
	 	18.	 	ACTING REASONABLY
	 
	 	19.	 	2005 OPERATING COST ESTIMATE
	 
	 	20.	 	GERMANE POLLUTANTS

	 	 	 	 	 
	 	 	Initials
	 	 	Landlord	 	Tenant
	 
	 	 	 	 

	 	 	 	 	 	 	 
	MORGUARD
February 2005 - Net Office, Multi-Tenant (General
Application)	 	 	 	Page 3

 

 

LEASE OF OFFICE SPACE

MULTI-TENANT OFFICE BUILDING

THIS LEASE is made as of the 19th day of December, 2005.

BETWEEN:

MORGUARD REAL ESTATE INVESTMENT TRUST

(the “Landlord”)

AND:

ALLIANCE DATA L.P. 

a limited partnership organized under the laws of the Province of Alberta, by its
general partner ENLOGIX INC., a company incorporated under the laws of Canada

(the “Tenant”)

AND:

ALLIANCE
DATA SYSTEMS CORP.

a company incorporated under the laws of the State of Delaware, one of the
United States of America

(the “Indemnifier”)

IN CONSIDERATION of the mutual covenants contained herein, the parties hereby agree as follows:

ARTICLE 1.00 — DEFINITIONS

1.01 Definitions — In this Lease the terms defined in Schedule B shall have the meanings
designated therein respectively.

ARTICLE 2.00 — GRANT OF LEASE AND GENERAL COVENANTS

2.01 Grant — The Landlord hereby leases to the Tenant and the Tenant hereby leases from the
Landlord the Leased Premises, to have and to hold during the Term, subject to the terms and
conditions of this Lease.

2.02 Landlord’s General Covenants — The Landlord covenants with the Tenant:

	(a)	 	subject to the provisions of this Lease, for quiet enjoyment of the Leased Premises so long
as the Tenant shall observe and perform all of the covenants and obligations of the Tenant
herein; and
	 
	(b)	 	to observe and perform all the covenants and obligations of the Landlord herein.

2.03 Tenant’s General Covenants — The Tenant covenants with the Landlord:

	(a)	 	to pay Rent without any deduction, abatement or set-off whatsoever except as is otherwise
provided for in this Lease; and
	 
	(b)	 	to observe and perform all the covenants and obligations of the Tenant herein.

	MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)	Page 3

 

 

ARTICLE 3.00 — TERM AND POSSESSION

3.01 Term — The Term of this Lease shall begin on the Commencement Date and end on the date
set out in Item 7(b) of the Term Sheet unless terminated earlier as provided in this Lease.

3.02 Acceptance of Leased Premises — Taking possession of all or any portion of the Leased
Premises by the Tenant shall be conclusive evidence as against the Tenant that the Leased Premises
or such portion thereof and the Common Elements are in satisfactory condition on the date of taking
possession, subject only to latent defects and to deficiencies (if any) listed in writing in a
notice delivered by the Tenant to the Landlord not more than 10 days after the date of taking
possession and further subject to completion by the Landlord of the Landlord’s Work set out in this
Lease and the Landlord’s maintenance, repair and replacement obligations specifically set out in
this Lease.

ARTICLE 4.00 — RENT

4.01 Rent — The Tenant shall pay to the Landlord as Rent for the Leased Premises the
aggregate of:

	(a)	 	Basic Rent in respect of each year of the Term, payable in advance and without notice or
demand in monthly instalments as set out in Item 8 of the Term Sheet commencing on the
Commencement Date and on the first day of each calendar month thereafter during the Term;
	 
	(b)	 	the Tenant’s Proportionate Share of Operating Costs and the Tenant’s Proportionate Share of
Taxes, during the Term, in each case payable in monthly instalments at the times and in the
manner provided in Section 4.06; and
	 
	(c)	 	all amounts (other than payments under Subsections 4.01 (a) and (b)) payable by the Tenant to
the Landlord under this Lease, at the times and in the manner provided in this Lease or, if
not so provided, as reasonably required by the Landlord.

4.02 Intent — It is the stated purpose and intent of the Landlord and the Tenant that this
Lease and the Rent shall be fully net to the Landlord, except as is otherwise provided for in this
Lease.

4.03 Payment of Rent — General — All amounts payable by the Tenant to the Landlord pursuant
to this Lease shall be deemed to be Rent and shall be payable and recoverable as Rent in the manner
herein provided and the Landlord shall have all rights against the Tenant for default in any such
payment as in the case of arrears of Rent. Rent shall be paid to the Landlord in lawful money of
Canada, without deduction, abatement or set-off except as is otherwise provided for in this Lease,
at the local address of the Landlord set out in Item 1 of the Term Sheet or to such other Person or
such other address as the Landlord may from time to time designate in writing. The Tenant’s
obligation to pay Rent and the Landlord’s obligation to refund any overpayments of Rent shall
survive the expiration or earlier termination of this Lease. Any Rent or other sum received or
accepted by the Landlord and paid by anyone other than the Tenant, on behalf of the Tenant, shall
not release or in any way affect the covenants of the Tenant set out in this Lease and shall not be
deemed to constitute or evidence the Landlord’s consent to a Transfer under Article 12.00. Any
Rent or other sum received by the Landlord from or for the account of the Tenant while the Tenant
is in default under this Lease may be applied at the Landlord’s option to the satisfaction in whole
or in part of any of the obligations of the Tenant then due under this Lease in such manner as the
Landlord sees fit regardless of any designation or instruction of the Tenant to the contrary.

4.04 Partial Month — If the Commencement Date is a day other than the first day of a
calendar month, or if the Term ends on any day other than the last day of a calendar month, Rent
for the fractions of a month at the beginning and at the end of the Term shall be adjusted pro rata
on a per diem basis.

4.05 Payment of Tenant’s Occupancy Costs

(1) Estimate and Payment

	(a)	 	The Landlord shall deliver to the Tenant a written estimate or a written revised estimate of:
(i) the Tenant’s Proportionate Share of Operating Costs for each Fiscal Year; and (ii) the
Tenant’s Proportionate Share of Taxes for each Fiscal Year. The Tenant shall pay to the
Landlord the amount so estimated in equal monthly instalments (except as otherwise required in
this Section 4.06 with respect to Taxes) in advance over that Fiscal Year simultaneously with
the Tenant’s payments on account of Basic Rent. If the Landlord does
not deliver to the Tenant such an estimate, the Tenant shall continue to pay the Tenant’s
Proportionate Share of Operating Costs and the Tenant’s Proportionate Share of Taxes

	MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)	Page 4

 

 

	 	 	based
on the last such estimate delivered by the Landlord until a further estimate is delivered by
the Landlord and the next payment on account of the Tenant’s Operating Costs or Taxes shall
be adjusted to take into account any over or under payment in the preceding instalments paid
in the Fiscal Year to which the estimate or revised estimate relates. Notwithstanding the
foregoing, as soon as bills for all or any portion of amounts included in Operating Costs
and Taxes as so estimated are received, the Landlord may bill the Tenant for the Tenant’s
Proportionate Share thereof and the Tenant shall pay the Landlord such amounts so billed
(less all amounts previously paid on account by the Tenant on the basis of the Landlord’s
estimate as aforesaid) as Rent within 5 days following demand therefor.
	 
	(b)	 	Within 120 days after the date in each calendar year when the final instalment of Property
Taxes is due in respect of commercial properties generally in the municipality in which the
Project is located (the “Final Payment Date”), the Landlord shall deliver a statement (the
“Tax Statement”) to the Tenant that: (i) specifies the Tenant’s Proportionate Share of Taxes
for the Property Tax Year; and (ii) sets out the total (the “Prepayment Total”) of amounts
payable under this Subsection 4.06(1)(b) that have been paid by the Tenant between the Final
Payment Date in the previous Property Tax Year and the Final Payment Date of the current
Property Tax Year. If requested by the Tenant, the Landlord will provide the Tenant with
access to its tax assessments and tax bills for the purposes of determining the amount of
Taxes for the relevant Property Tax Year. If the Prepayment Total, less any amounts that were
previously credited to the Tenant, and any amounts paid for arrears in respect of previous
Property Tax Years, (the “Net Prepayment Total”) is less than the Tenant’s Proportionate Share
of Taxes specified in the Tax Statement, the Tenant shall pay the deficiency with the next
monthly payment of Basic Rent. If the Net Prepayment Total exceeds the Tenant’s Proportionate
Share of Taxes specified in the Tax Statement, the Landlord shall, unless the Tenant is then
in default under this Lease, notice of which has been delivered to the Tenant, credit the
excess to the Tenant on account of the next succeeding payments of the Tenant’s Occupancy
Costs. The Landlord may estimate Taxes for the Property Tax Year following the then current
Property Tax Year and the Tenant shall continue after the Final Payment Date to make monthly
payments in advance, in amounts determined by the Landlord, for periods determined by the
Landlord. The monthly payments paid by the Tenant after the Final Payment Date shall be
credited against the Tenant’s Proportionate Share of Taxes for the subsequent Property Tax
Year.
	 
	(c)	 	Any portion of the Tenant’s Proportionate Share of Taxes accrued with respect to the Term or
any part thereof paid by the Landlord prior to the Commencement Date shall be reimbursed by
the Tenant to the Landlord on the Commencement Date or on demand thereafter. Subject to
Sections 8.03 and 8.05, the Tenant shall pay the Tenant’s Proportionate Share of any Taxes or
the Landlord’s reasonable estimate thereof monthly in advance in the same manner as for
payment of the Tenant’s Proportionate Share of Operating Costs.
	 
	 	 	Notwithstanding the foregoing, the Landlord shall always have the right:

(i) to revise the amount of instalments on account of Taxes payable by the Tenant to an
amount that allows the Landlord to collect all Taxes payable by the Tenant by the final due
date of Taxes for the calendar year; and/or

(ii) to schedule and require payment by the Tenant of instalments on account of Taxes
payable by the Tenant such that by the final due date of Property Taxes for any calendar
year, the Tenant shall have paid to the Landlord the full amount of Taxes payable by the
Tenant for such calendar year.

(2) Annual Statement and Adjustment - The Landlord shall deliver to the Tenant within 120 days
after the end of each Fiscal Year prepared by or for the Landlord, a written statement of its
auditors (who shall be a firm of independent chartered accountants), setting out in reasonable
detail the amount of the Tenant’s Proportionate Share of Operating Costs for such Fiscal Year. If
requested by the Tenant, the Landlord shall provide the Tenant with access to its financial records
for the purpose of determining the amount of Operating Costs payable by the Tenant for the relevant
Fiscal Year. If the total of monthly instalments of the Tenant’s Proportionate Share of Operating
Costs actually paid by the Tenant to the Landlord during that Fiscal Year differs from the amount
of the Tenant’s Proportionate Share of Operating Costs payable for that Fiscal Year under
Subsection 4.01(b), the Tenant shall pay to the Landlord or, if the Tenant is not in default notice
of which has been delivered to the Tenant, the Landlord shall credit to the Tenant on account of
the next succeeding payments of the Tenant’s Operating Costs and Taxes, as the case may be, the
difference, without interest, within 30 days after the date of delivery of the statement.

(3) Disputes - If the Tenant disputes the Landlord’s auditors’ statement setting out Operating
Costs or the Tax Statement for any Fiscal Year or Property Tax Year, as the case may be, the Tenant
shall provide notice thereof in writing to the Landlord within 180 days of delivery of the
applicable statement in respect of that Fiscal Year or Property Tax Year, as the case may be.
Notwithstanding delivery of such notice, the Tenant shall continue to pay Rent in accordance with

	MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)	Page 5

 

 

the terms of this Lease. In the event of a dispute, the determination of the Tenant’s
Proportionate Share of Operating Costs or the Tenant’s Proportionate Share of Taxes as made by the
Landlord’s auditors shall be conclusive and binding upon both the Landlord and the Tenant unless
manifest error is demonstrated. All costs of obtaining such determination shall be included in
Operating Costs; provided that if the Landlord’s auditors confirm the Landlord’s calculations
within a variance of 3%, the Tenant shall be solely responsible for the entire cost of such
determination and shall pay such costs to the Landlord forthwith upon demand. If the Tenant and
any one or more of the other tenants in the Project are responsible to pay such costs, the Tenant
shall be jointly and severally liable with such other tenant or tenants.

4.06 Resolution of Disputes — In the event of any disagreement as to the amount or
propriety of any amount included in Operating Costs, a certificate of the external auditor of the
Landlord, acting reasonably, shall be conclusive as to the amount of Operating Costs for any period
to which such certificate relates unless manifest error is demonstrated.

4.07 Area Determination — The Landlord and the Tenant agree that the Rentable Area of the
Leased Premises has been measured by the Landlord’s architect or surveyor in accordance with the
BOMA Standard and is deemed for the purposes of this Lease to be 27,599 square feet for the Term
and any extension and renewal periods thereof and that the Tenant shall be required to pay Rent
based on this area. The Landlord may from time to time, as it deems necessary, cause the Rentable
Area of the Leased Premises and the Total Rentable Area of the Building or any part thereof to be
recalculated or remeasured and the cost thereof except for the Leased Premises shall be included in
Operating Costs (except as otherwise provided in this Section 4.08 and in Section 1 of Schedule E
of this Lease). Upon any such recalculation or remeasurement, Rent (including without limitation
Basic Rent) shall be adjusted accordingly. If any calculation or determination by the Landlord of
the Rentable Area of any premises (including the Leased Premises) is disputed or called into
question by the Tenant, it shall be calculated or determined by the Landlord’s independent and duly
qualified architect or surveyor from time to time appointed for that purpose, whose certificate
shall be conclusive and binding upon the parties hereto unless manifest error is demonstrated. The
cost of such calculation or determination shall subject to Section 1 of Schedule E of this Lease be
included in Operating Costs; provided that if the Tenant disputes the Landlord’s calculation or
determination and the calculation or determination by the Landlord’s architect or surveyor agrees
with the Landlord’s calculation or determination within a 2% variance, the Tenant shall pay the
full cost of such calculation or determination forthwith upon demand. If the Tenant and any one or
more of the other tenants in the Project are responsible to pay such costs, the Tenant shall be
jointly and severally liable with such other tenant or tenants.

If any error shall be found in the calculation of the Rentable Area of the Leased Premises or in
the calculation of the Tenant’s Proportionate Share, Rent (including without limitation Basic Rent)
shall be adjusted for the Fiscal Year in which the error is discovered and for the Fiscal Year
preceding the Fiscal Year in which the error was discovered, if any, and thereafter, but not for
any prior period.

Notwithstanding the foregoing, so long as the Leased Premises comprise full floors in the Building,
the Landlord shall not be entitled to recalculate or remeasure the Rentable Area of same in
accordance with this Section 4.08.

4.08 Vacancy — If any part of the Building available for leasing is not occupied, the
Landlord shall have the right, in respect of amounts forming part of Operating Costs which vary
proportionately with occupancy, to include in Operating Costs a larger amount of costs, which
larger amount shall be based on a reasonable estimate of the actual cost which would have been
incurred if the unoccupied parts of the Building available for leasing were occupied, it being
intended hereby that the Landlord shall obtain, to the extent reasonably possible, full
reimbursement of Operating Costs attributable to or in respect of occupied premises, and not that:
(i) the Tenant shall subsidize Operating Costs incurred by the Landlord attributable to or in
respect of vacant premises; or (ii) the Landlord shall recover more than actual Operating Costs.

ARTICLE 5.00 — USE AND OCCUPATION

5.01 Use of Leased Premises — The Tenant may use and occupy the Leased Premises only for
the purposes set out in Item 9 of the Term Sheet and shall not use or permit the Leased Premises or
any part thereof to be used or occupied for any other purpose or business except as otherwise
expressly permitted under this Lease or by any Person other than the Tenant except as otherwise
provided for in Article 12.00. The Tenant shall be responsible for obtaining at its expense all
necessary approvals, licences and permits, including but not limited to zoning, development,
building, occupancy and business approvals, licences and permits, for its intended use of the
Leased Premises and shall submit all applications for such approvals, licences and permits to the
Landlord for its consent (which consent, may not be unreasonably withheld by the Landlord) prior to
making application. Notwithstanding the Landlord’s consent to an application, the Tenant shall
indemnify and defend the Landlord and hold it harmless from and against any and all Claims incurred
or suffered by the Landlord directly or indirectly arising out of the Tenant’s application for

	MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)	Page 6

 

 

such
approvals, licences or permits or the resulting approvals, licences and permits with respect to the
use, intended or otherwise, of the Leased Premises whether such Claims are in respect of the Leased
Premises or in respect of the Building or the Project. The Landlord makes no representation
whether or not necessary approvals can be obtained for the Tenant’s use or intended use. The
Landlord makes no representation or warranty, express or implied, that the present or future use of
the Leased Premises, if such use is anything other than office use, is legally fit for the intended
use, or complies with any law, by-law or regulation governing the use of the Leased Premises.

5.02 Compliance with Laws — The Tenant shall promptly and at its own cost comply with all
present and future laws, regulations and orders relating to, and obtain and maintain in force all
approvals, permits, licences and registrations required for, any of the following:

	(a)	 	the occupation or use of and the conduct of any business in or from the Leased Premises;
	 
	(b)	 	the condition of the Leasehold Improvements, fixtures, furniture and equipment installed
therein;
	 
	(c)	 	Pollutants and the protection of the environment so far as those laws, regulations and orders
or any of them relate to the Leased Premises; and
	 
	(d)	 	the making by the Tenant of any repairs, changes or improvements in or to the Leased
Premises;

and the Tenant shall immediately give written notice to the Landlord of the occurrence of any event
in the Leased Premises constituting an offence thereunder or being in breach thereof and if the
Tenant shall, either alone or with others, cause the happening of any such event, the Tenant shall
immediately give the Landlord notice to that effect and thereafter give the Landlord from time to
time written notice of the extent and nature of the Tenant’s compliance with the foregoing
provisions of this Section.

The Tenant agrees that if the Landlord determines in its sole discretion that the Landlord, its
property, its reputation or the Leased Premises or any one or more of the foregoing is placed in
any jeopardy, as determined by the Landlord, by the requirements for any work required to ensure
compliance with the foregoing provisions of this Section 5.02, or the Tenant is unable to fulfil
its obligations under this Section, the Landlord may itself undertake such work or any part thereof
at the cost and expense of the Tenant.

The Tenant shall, at its own expense, remedy any damage to the Leased Premises caused by such event
or work or by the performance of the Tenant’s obligations under this Section.

If alterations or improvements to the Leasehold Improvements or to the Leased Premises are
necessary to comply with any of the foregoing provisions of this Section or with the requirements
of insurance carriers, the Tenant shall forthwith complete such work, complying always with the
applicable provisions of this Lease, to the extent that it can be done within the Leased Premises
and in any event shall pay the entire cost of alterations and improvements so required.

Notwithstanding anything contained herein to the contrary, the Landlord shall be responsible at its
sole cost and expense and to the complete exoneration of the Tenant for remedying any work done by
it in the Leased Premises during the Term, which has not been done in compliance with the
requirements of any applicable laws, regulations or orders applicable to any such work. In
addition, the Landlord shall be responsible at its sole cost and expense to make all repairs and
replacements to the Leased Premises which are required as a result of any present or future laws,
regulations or orders which are of a general application as opposed to a result of the specific use
of the Leased Premises by the Tenant.

5.03 Prohibited Uses — The Tenant shall not commit, cause or permit any nuisance in or
about or any damage to the Leased Premises or any part thereof, the Building, the Project or any of
the Leasehold Improvements or goods or fixtures therein, any overloading of the floors of the
Leased Premises or any use or manner of use causing annoyance to other tenants or occupants of the
Project. Without limiting the generality of the foregoing, the Tenant shall not use or permit the
use of any portion of the Leased Premises for any dangerous, illegal, noxious, odorous or offensive
trade, business or occurrence. The Tenant shall keep the Leased Premises free of debris,
Pollutants and anything of a dangerous, noxious, odorous or offensive nature or which could create
a fire hazard
(through undue load on electrical circuits or otherwise) or vibration, heat, odour or noise
detectable outside the Leased Premises in the sole discretion of the Landlord. The Tenant shall
not use equipment in the Leased Premises in a manner that results in its being seen or heard
outside the Leased Premises. The Landlord acknowledges and agrees that the permitted use of the
Leased Premises set out in Item 9 of the Term Sheet shall be deemed not to constitute a default by
the Tenant under the provisions of this Section 5.03.

5.04 Common Elements — The Tenant and its employees and invitees shall be entitled to use,
in common with others entitled thereto, for purposes for which they are intended 24 hours a day, 7

	MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)	Page 7

 

 

days a week, the Common Elements. The Tenant and its employees and invitees shall not obstruct the
Common Elements or use the Common Elements other than for their intended purposes and then only in
accordance with the rules and regulations set by the Landlord from time to time.

5.05 Hazardous Use — The Tenant shall not do, omit to do or permit to be done anything
other than the permitted use of the Leased Premises as set out in Item 9 of the Term Sheet which
will cause or may have the effect of causing the cost of the Landlord’s insurance in respect of the
Project or any part thereof to be increased at any time during the Term or any policy of insurance
on or relating to the Project to be subject to cancellation. Without waiving or limiting the
foregoing prohibition, the Landlord may demand and the Tenant shall pay to the Landlord upon
demand, the amount of any increase in the cost of insurance caused by anything so done or omitted
or permitted to be done other than the permitted use of the Leased Premises as set out in Item 9 of
the Term Sheet. The Tenant shall forthwith upon the Landlord’s request comply with the
requirements of the Landlord’s insurers, cease any activity complained of other than the permitted
use of the Leased Premises as set out in Item 9 of the Term Sheet and make good any circumstance
which has caused any increase in insurance premiums or the cancellation or threatened cancellation
of any insurance policy. In determining the amount of increased premiums for which the Tenant is
responsible, a schedule or statement issued by the Person who computes the insurance rates for the
Landlord showing the components of the rate shall be conclusive evidence of the items that make up
the rate unless manifest error is demonstrated. If any policy of insurance in respect of the
Project or any part thereof is cancelled or becomes subject to cancellation by reason of anything
so done or omitted or permitted to be done, other than the permitted use of the Leased Premises as
set out in Item 9 of the Term Sheet and in the event comparable replacement insurance is not
available, the Landlord may without prior notice terminate this Lease and re-enter the Leased
Premises.

5.06 Tenant’s Security Interest — The Tenant shall not, without the Landlord’s prior
written consent, create a security interest in Leasehold Improvements installed by the Tenant or
the Landlord in the Leased Premises.

5.07 Rules and Regulations — The Tenant shall observe and cause its employees, servants,
agents, invitees, customers, subtenants, licensees and others over whom the Tenant can reasonably
be expected to exercise control to observe the rules and regulations attached as Schedule C hereto
and such further and other reasonable rules and regulations and amendments and additions thereto as
may be made by the Landlord and notified to the Tenant by mailing a copy thereof to the Tenant or
by posting same in a conspicuous place in the Building. All such rules and regulations now or
hereafter in force shall be read as forming part of this Lease; provided that if there is a
conflict between the rules and regulations and this Lease, the terms of this Lease shall prevail.
The Landlord shall not be responsible to the Tenant for the non-observance of any rule or
regulation or the terms of any lease or agreement to lease by any other tenant of the Project.
Such rules and regulations as amended shall not be promulgated or enforced in an arbitrary or
discriminatory manner as against the Tenant.

5.08 Permitted Signs — Subject to Section 8 of Schedule E of this Lease, the Tenant shall
use only such identification signs as are prescribed by the Landlord from time to time and as
comply with all applicable by-laws, regulations and codes as to size, location, arrangement, type
of lettering, colour, appearance and design for uniform use by office tenants in the Building.
Such signs shall contain only the name under which the Tenant carries on business.

5.09 Prohibited Signs — Except with the prior written consent of the Landlord, which
consent may not be unreasonably withheld or delayed, or as provided in Section 5.08 and subject to
Section 8 of Schedule E of this Lease, the Tenant shall not paint, display, inscribe, place or
affix any sign, symbol, notice, advertisement, display or direction of any kind anywhere outside
the Leased Premises or on the interior of any glass, windows or doors or elsewhere within the
Leased Premises so as to be visible from the outside of the Leased Premises.

5.10 Window Coverings — Without the prior written consent of the Landlord, the Tenant shall
not install any blinds, drapes, curtains or any other window coverings in the Leased Premises and
shall not remove, add to or change the blinds, drapes, curtains or other window coverings installed
by the Landlord from time to time. The Tenant shall keep all window coverings open or closed at
various times as the Landlord may from time to time direct by the rules and regulations or
otherwise.

5.11 Parking — Any Parking Facilities provided by the Landlord shall at all times be
subject to the exclusive control and management of the Landlord or those whom the Landlord may
designate from time to time. Subject to Section 12 of Schedule E of this Lease, the Landlord shall
have the right from time to time to establish, modify and enforce reasonable rules and regulations
with respect to any Parking Facilities and shall have the right from time to time:

	(a)	 	to expand, reduce, or change the area, level, location and arrangement of the Parking
Facilities and to construct any Parking Facilities;
	 
	(b)	 	to enforce parking charges with appropriate provisions for free parking ticket validating by
tenants of the Building;

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	(c)	 	to temporarily close all or any portion of the Parking Facilities to such extent as may, in
the Landlord’s opinion, be legally sufficient to prevent a dedication thereof or the accrual
of rights to any Person or the public;
	 
	(d)	 	to temporarily obstruct or close off all or any part of the Parking Facilities for the
purpose of maintenance or repair; and
	 
	(e)	 	to do and perform such other acts in and to the Parking Facilities as, in the judgment of the
Landlord, shall be advisable with a view to the improvement of the convenience of and use of
the Building by tenants, their employees and invitees.

The Landlord will operate and maintain the Parking Facilities in such manner as the Landlord in its
sole discretion shall determine from time to time, but in any event, in a manner as would a prudent
owner of a similar building, of similar age, use and class in the area in which the Building is
located and in accordance with all applicable governmental laws including, without limitation,
Environmental Laws, by-laws and regulations. Without limiting the scope of such discretion, the
Landlord shall have the sole right to employ all personnel and make all rules and regulations
pertaining to and necessary for the proper operation and maintenance of the Parking Facilities.
The Tenant shall participate in any free parking or other ticket validation system established by
the Landlord and abide by all rules and regulations pertaining thereto and the Tenant shall pay to
the Landlord monthly, together with payments on account of Basic Rent, all parking charges
attributable to the Tenant as evidenced by parking tickets validated by the Tenant in accordance
with any system established by the Landlord.

5.12 Authorization of Enquiries — The Tenant hereby authorizes the Landlord to make
enquiries from time to time of any government or municipality or governmental or municipal agency
with respect to the Tenant’s compliance with any and all laws and regulations pertaining to the
Tenant or the business conducted in the Leased Premises including, without limitation, laws and
regulations pertaining to Pollutants and the protection of the environment; and the Tenant
covenants and agrees that the Tenant shall from time to time provide to the Landlord such written
authorization as the Landlord may reasonably require in order to facilitate the obtaining of such
information.

5.13 Records — The Tenant shall keep on the Leased Premises or at the Tenant’s head office
complete records as required by Environmental Laws of all goods stored on, or processed,
manufactured, packaged or used in any process in the Leased Premises by the Tenant and by any other
occupant of the Leased Premises or any part thereof. The Landlord may examine such records upon
reasonable notice to the Tenant and the Tenant shall provide extracts from or copies thereof
relating to environmental matters only all as required by the Landlord from time to time. This
requirement to maintain such records shall survive the expiry or earlier termination of the Term
for the period required by Environmental Laws.

5.14 Overloading — The Tenant shall not install or permit the installation of equipment or
storage of items that, in the opinion of the Landlord’s independent and duly qualified engineer,
overloads the capacity of any utility or of any electrical or mechanical facility in the Project or
which may exceed the load-bearing capacity of the floors of the Project. If damage is caused to
the Leased Premises or to the Project as a result of any installation in contravention of this
Section, the Tenant shall repair the damage or, at the Landlord’s option, pay to the Landlord on
demand the cost of repairing the damage incurred by the Landlord.

5.15 Telecommunications

(1) The Tenant may utilize a telecommunication service provider of its choice with the Landlord’s
prior written consent, which consent shall not be unreasonably withheld, subject to the provisions
of this Lease, including but not limited to the following:

	(a)	 	prior to commencing any work in the Project, the service provider shall execute and deliver
the Landlord’s standard form of licence agreement, which shall include a provision for the
Landlord to receive compensation for the use of the space for the service provider’s equipment
and materials;
	 
	(b)	 	the Landlord shall incur no expense or liability whatsoever with respect to any aspect of the
provision of telecommunication services, including without limitation, the cost of
installation, service, materials, repairs, maintenance, removal, interruption or loss of
telecommunication service;
	 
	(c)	 	the Landlord must first reasonably determine that there is sufficient space in the risers of
the Building for the installation of the service provider’s wiring and cross connect; and
	 
	(d)	 	the Tenant hereby releases the Landlord from all Claims incurred by the Tenant, caused by or
arising out of, either directly or indirectly, any acts or omissions by the service provider
or the Tenant or those for whom either of them is responsible at law with respect to such
telecommunication services.

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(2) The Tenant shall be responsible for the costs associated with the supply and installation of
telephone, computer and other communication equipment and systems and related wiring within the
Leased Premises to the boundary of the Leased Premises for hook up or other integration with
telephone and other communication equipment and systems of a telephone or other communication
service provider, which equipment and systems of the service provider are located or are to be
located in the Building pursuant to the Landlord’s standard form of licence agreement and, subject
to the provisions of Section 14.01, for the removal of same.

(3) The Landlord shall supply space in risers in the Building and space on floor(s) of the Building
in which the Leased Premises are located, the location of which shall be designated by the Landlord
in its discretion, to telecommunication service providers who have entered into the Landlord’s
standard form of licence agreement for the purpose, without any cost or expense to the Landlord
therefor, of permitting installation in such risers and on such floor(s) of telephone and other
communication services and systems (including data cable patch panels) to the Leased Premises at a
point designated by the Landlord.

(4) The Landlord shall have the right to assume control of wiring, cables and other
telecommunication equipment in the Building and may designate them as part of the Common Elements.

ARTICLE 6.00 SERVICES, MAINTENANCE, REPAIR AND ALTERATIONS BY LANDLORD

6.01 Operation of Project — During the Term the Landlord shall operate, maintain and repair
the Project in accordance with all applicable governmental laws including, without limitation,
Environmental Laws, bylaws and regulations and as would a prudent owner of a similar building, of
similar age, use and class in the area in which the Building is located, and shall provide the
Services set out in this Article 6.00; provided that the Landlord shall not be responsible for
operating, maintaining, repairing or replacing any systems, facilities or equipment to the extent
that the operation, maintenance, repair or replacement thereof are specifically stated in this
Lease to be the responsibility of the Tenant.

6.02 Building Services and Facilities — The Landlord shall provide:

	(a)	 	washrooms accessible to the Leased Premises for the use of the Tenant, its employees and
invitees in common with other persons entitled thereto;
	 
	(b)	 	domestic running water to the building standard washrooms in the Leased Premises, if any, and
to washrooms available for the Tenant’s use in common with others entitled thereto;
	 
	(c)	 	access to and egress from the Leased Premises for use by the Tenant, its employees and
invitees in common with other persons entitled thereto, provided that the Landlord may
restrict access for security purposes or require that all persons seeking access produce
identification;
	 
	(d)	 	heating, ventilation and air conditioning to the Building, including the Leased Premises, to
a level sufficient to maintain therein conditions of reasonable temperature and comfort
provided that, unless otherwise agreed by the parties, a full standard of interior climate
control shall only be maintained during those hours and on those days established from time to
time by the Landlord as being operating periods for the Building which operating periods
currently are 7:00 a.m. to 6:00 p.m. Monday to Friday (except statutory and public holidays),
having reasonable regard to energy conservation;
	 
	(e)	 	lighting and electrical power to the Common Elements as reasonably required;
	 
	(f)	 	electrical power to the Leased Premises for lighting and for standard office equipment
capable of operating from the voltage circuits available and then standard for the Building;
	 
	(g)	 	janitorial services to the Leased Premises and Common Elements to a standard consistent from
time to time with similar buildings, of similar age, use and class, in the area in which the
Building is located;
	 
	(h)	 	a directory board located in the Common Elements providing identification of the tenants in
the Building in such manner and containing such information as the Landlord may determine; and
	 
	(i)	 	subject to Section 5.15, appropriate ducts for bringing telephone services to the Leased
Premises.

6.03
Maintenance, Repair and Replacement — Subject to the provisions of Article 10.00, the
Landlord shall operate, maintain, repair and replace the systems, facilities and equipment
necessary

	MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)	Page 10

 

 

for the proper operation of the Project and for provision of the Landlord’s Services set
out in Section 6.02 (except as may be installed by or be the property of the Tenant) all in
accordance with all applicable governmental laws including, without limitation, Environmental Laws,
by-laws, and regulations, and in a manner as would a prudent owner of a similar building, of
similar age, use and class in the area in which the Building is located and shall maintain and
repair the foundations, structure and roof of the Building and repair damage to the Building which
the Landlord is obligated to insure against under Article 9.00 all in accordance with all
applicable governmental laws including, without limitation, Environmental Laws, by-laws, and
regulations and in a manner as would a prudent owner of a similar building, of similar age, use and
class in the area in which the Building is located, provided that:

	(a)	 	if and so long as all or part of the systems, facilities and equipment in the Project or the
supply of utilities to the Project are destroyed, damaged or interrupted, the Landlord shall
have a reasonable time within which to complete any necessary repair or replacement and,
during that time, shall only be required to maintain such Services as are reasonably possible
in the circumstances;
	 
	(b)	 	the Landlord may upon reasonable prior notice to the Tenant temporarily discontinue such
Services or any of them at such times as may reasonably be necessary;
	 
	(c)	 	the Landlord shall use reasonable diligence in carrying out its obligations under this
Section 6.03, but shall not be liable under any circumstances for any consequential damages,
whether direct or indirect, to any Person or property resulting from any failure to do so;
	 
	(d)	 	no reduction or discontinuance of Services under this Section 6.03 shall be construed as a
breach of the Landlord’s covenant for quiet enjoyment or as an eviction of the Tenant or,
except as specifically provided otherwise in this Lease, release the Tenant from any
obligation under this Lease;
	 
	(e)	 	the Landlord shall not be liable under any circumstances for any damage caused by
interruption or failure of any satellite, telecommunications system, utility, wiring, elevator
or escalator;
	 
	(f)	 	the Landlord shall have no responsibility for any inadequacy of performance of any systems
within the Leased Premises if the Leased Premises or the use thereof depart from the design
criteria for such systems as established by the Landlord for the Building as previously
provided to the Tenant; and
	 
	(g)	 	nothing contained herein shall derogate from the provisions of Article 10.00.

6.04 Alterations / Renovations by Landlord — During the Term or any renewal or extension
thereof, it is understood and agreed that, if the Landlord intends to make changes, additions or
improvements to or renovate the Project or any part thereof, of which the Leased Premises form a
part (the “Renovation Work”), notwithstanding anything contained in this Lease to the contrary, the
Landlord, its servants, agents, contractors and representatives may proceed with the Renovation
Work without further consent or approval of the Tenant and the Tenant hereby irrevocably grants to
the Landlord its consent to the carrying out of the Renovation Work; provided that the Renovation
Work shall not materially interfere with or adversely affect access to and egress from the Leased
Premises, and the business of the Tenant carried on in the Leased Premises. The Landlord shall
proceed expeditiously with completion of the Renovation Work and to the extent reasonably possible
in the circumstances shall attempt to minimize any material interference with the vista of the
Tenant’s exterior signage referred to in Section 8 of Schedule E of this Lease in the course of
completing same. It is specifically understood and agreed that there shall be no compensation paid
to the Tenant nor shall there be any abatement of Rent in connection with the Renovation Work. In
exercising its rights pursuant to this Section 6.04, the Landlord shall be entitled to:

	(a)	 	enter the Leased Premises from time to time to make changes or additions to the structure,
systems, facilities and equipment in the Leased Premises where necessary to serve the Leased
Premises or other parts of the Building;
	 
	(b)	 	limit from time to time as may be necessary by reason of the Renovation Work, ingress to and
egress from the Leased Premises and/or the Project;
	 
	(c)	 	change, add to, diminish, demolish, dedicate for public purposes part or parts of, improve or
alter any part of the Project not in or forming part of the Leased Premises; and
	 
	(d)	 	change, add to, diminish, improve or alter the location and extent of the Common Elements.

The Landlord agrees to use commercially reasonable efforts to give to the Tenant reasonable prior
notice of its intention to proceed with the Renovation Work and the Tenant shall cooperate with the
Landlord in order to allow the Renovation Work to be completed as expeditiously as possible. It is
specifically agreed by the Landlord and the Tenant that the Landlord shall not, by reason of

	MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)	Page 11

 

 

exercising its rights pursuant to this Section 6.04, be in default or be deemed to be in default of
any covenant or proviso contained in this Lease or at law. The Landlord shall at its sole cost and
expense repair any damage done to the Leased Premises or its contents as a result of the exercise
of any of its rights pursuant to this Section 6.04.

6.05 Access by Landlord — The Tenant shall permit the Landlord to enter the Leased Premises
at any time in case of an emergency or a health related issue, either real or perceived, and
otherwise during normal business hours where such entry will not unreasonably disturb or interfere
with the Tenant’s use of the Leased Premises or operation of its business, to: (i) examine, inspect
and show the Leased Premises for purposes of leasing, sale or financing; (ii) provide Services or
make repairs, replacements, changes or alterations as provided for in this Lease; or (iii) take
such steps as the Landlord may deem necessary for the safety, improvement or preservation of the
Leased Premises or the Project. The Tenant shall cooperate with the Landlord in any such showing
of the Leased Premises. The Landlord shall, whenever possible, consult with or give reasonable
prior notice to the Tenant prior to entry but no such entry shall constitute an eviction or a
breach of the Landlord’s covenant for quiet enjoyment or entitle the Tenant to any abatement of
Rent. In the exercise of its rights pursuant to this Section 6.05, the Landlord shall not
materially interfere with or adversely affect access to and egress from the Leased Premises and the
business of the Tenant carried on in the Leased Premises and shall repair at its sole cost and
expense any damage done to the Leased Premises or its contents as a result of the exercise by it of
any of its rights pursuant to this Section 6.05.

6.06 Energy Conservation — The Landlord shall be deemed to have observed and performed its
obligations under this Lease, including those relating to the provision of utilities and Services,
if in so doing it acts in accordance with a directive, policy or request of an authority having
jurisdiction in the field of energy conservation, security or environmental matters.

6.07 Supervision and Extended Services — The Landlord, if it shall from time to time so
elect, shall have the right to supervise the moving of furniture or equipment of the Tenant and (in
addition to supervising the Tenant’s work as provided for in this Lease) to supervise the making of
repairs conducted within the Leased Premises and the exclusive right to supervise or make
deliveries to the Leased Premises. In addition, and by arrangement with the Tenant, the Landlord
may provide extended cleaning or other services to the Tenant in addition to those normally
supplied and referred to in this Lease. In each case, the Landlord’s costs and expenses incurred
with respect thereto together with a reasonable administration fee with respect to the items
provided to the Tenant at its request shall except as is otherwise provided for in Section 3 of
Schedule E of this Lease be paid to the Landlord by the Tenant from time to time promptly upon
receipt of invoices from the Landlord.

6.08 Landlord’s Work — The Tenant agrees that it has entered into this Lease on the express
understanding that, unless otherwise specifically provided in Schedule D or Schedule E, the Leased
Premises are being leased “as is” and that the Landlord’s work in respect of the Leased Premises is
limited to the scope delineated as Landlord’s work in Schedule D. Provided it is understood and
agreed that the Leasehold Improvements in place as of the Commencement Date shall remain for the
use of the Tenant, all other improvements to the Leased Premises shall be performed at the sole
expense of the Tenant in accordance with the terms of this Lease including, but not limited to,
Section 7.04.

6.09 Control by Landlord — The Tenant agrees that the Landlord shall have control of the
Project and, without limiting the generality of anything contained elsewhere in this Lease, the
Landlord may make such use of the Common Elements and permit others to make such use of the Common
Elements as the Landlord acting reasonably may from time to time determine subject, in the case of
use by others, to such terms and conditions and for such consideration as the Landlord acting
reasonably determine, provided that such uses do not materially adversely affect access to and
egress from the Leased Premises and the business of the Tenant carried on in the Leased Premises and
the Landlord may temporarily close all or any part or parts of the Project to such extent as may,
in the opinion of the Landlord or any Consultants engaged by the Landlord in that regard, be
legally sufficient to prevent a dedication thereof or the accrual of rights therein to any Person
or the public.

ARTICLE 7.00 — PAYMENT FOR SERVICES AND MAINTENANCE, REPAIR AND ALTERATIONS BY TENANT

7.01 Utilities — In addition to the payment of the Tenant’s Occupancy Costs and
notwithstanding Sections 6.01 and 6.02, the Tenant shall be responsible for the cost of all
utilities including electricity supplied to the Leased Premises. The Tenant shall not, without the
prior written approval of the Landlord, install or cause to be installed in the Leased Premises any
equipment that will require additional utility usage or any telecommunications lines and/or
conduits which approval may be arbitrarily withheld in the event any such equipment will require
additional utility usage or any telecommunication lines and/or conduits in excess of that normally
required for office premises and/or would involve the diminution of the Landlord’s ability to lease
other premises in the Building. If, with the Landlord’s approval, such additional equipment is
installed, the Tenant shall be solely responsible for such excess utility usage. If utilities are
supplied to the Tenant through a meter

	MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)	Page 12

 

 

common to other tenants in the Project (there being no
obligation on the Landlord to install separate meters), the Landlord shall pay the cost of the
utilities and apportion the cost pro rata among the tenants supplied through the common meter,
based on all relevant factors including, but not limited to, the hours of use, number and types of
lights and electrical equipment and the proportion of each tenant’s Rentable Area to the Rentable
Area of all tenants to which the common meter relates. Upon receipt of the Landlord’s statement of
apportionment, the Tenant shall promptly reimburse the Landlord for all amounts apportioned to the
Tenant by the Landlord; provided that the Landlord may elect by notice to the Tenant to estimate
the amount which will be apportioned to the Tenant and require the Tenant to pay that amount in
monthly instalments in advance simultaneously with the Tenant’s payments of Basic Rent.
Notwithstanding the foregoing, and whether the Leased Premises are separately metered or not, the
Landlord may purchase in bulk from the utility supplier the aggregate utility requirements of the
Project at the applicable rates determined by a single meter on the Project and may, in billing the
Tenant for its share of such utility, apply a scale of rates not greater than the current scale of
rates at which the Tenant would from time to time be purchasing the whole of its utilities required
and consumed in respect of the Leased Premises if the Tenant were purchasing directly from the
utility supplier. The Landlord shall upon the Landlord’s or Tenant’s request install a separate
check meter or meters in the Leased Premises at the Landlord’s expense.

In addition to the payments to the Landlord required by this Article 7.00, the Tenant shall pay all
rates, charges, costs and expenses as may be assessed or levied by any supplier of utilities to the
Tenant other than those supplied by the Landlord.

7.02 Lights — In addition to the payment of the Tenant’s Occupancy Costs and
notwithstanding Sections 6.01 and 6.02, except to the extent the same is included in Operating
Costs, the Tenant shall pay to the Landlord monthly in advance, with its payments of Basic Rent, a
reasonable amount as determined by the Landlord in respect of replacement of building standard
fluorescent tubes, light bulbs and ballasts in the Leased Premises on a periodic basis or as
required from time to time and the costs of cleaning, maintaining and servicing of the electrical
light fixtures in the Leased Premises.

7.03 Heating, Ventilation and Air Conditioning — In addition to the payment of the Tenant’s
Occupancy Costs and notwithstanding Sections 6.01 and 6.02, the Tenant shall be responsible for the
cost of all heating, ventilation and air conditioning provided at the Tenant’s request to the
Leased Premises or any part thereof at times outside of the times required to be provided by the
Landlord under Section 6.02(d). The Landlord shall at least once in each Fiscal Year deliver to
the Tenant a statement in writing and in reasonable detail setting out the cost to the Tenant for
the provision of such excess heating, ventilating and air conditioning for the Leased Premises,
which cost shall be charged by the Landlord to the Tenant, at the same rate as it charges from time
to time to other tenants in the Building for the provision of such excess heating, ventilation and
air conditioning to their respective premises and the Tenant shall promptly reimburse the Landlord
for the amount shown in the statement as attributable to the Leased Premises.

7.04 Alterations by Tenant — The Tenant may from time to time at its own expense make
changes, additions and improvements to the Leased Premises to better adapt the same to its
business, provided that any change, addition or improvement shall:

	(a)	 	comply with the requirements of the Landlord’s insurers and any governmental or municipal
authority having jurisdiction;
	 
	(b)	 	be made only if, prior to preparation of any plans and specifications and prior to
commencement of any work in the Leased Premises, including, without limiting the generality of
the foregoing, any demolition, construction or alterations, the Tenant has determined through
testing at its own cost and expense what Pollutants, if any, are present in the Leased
Premises and, if the Tenant fails to do so, the Tenant acknowledges and agrees that it shall
indemnify and hold harmless the Landlord from and against any and all Claims growing or
arising out of the Tenant’s failure to do so;
	 
	(c)	 	if the cost of such improvements are less than $25,000.00 (increased by 3% compounded
annually on each anniversary date of the Commencement Date) and do not affect the Leased
Premises structurally, the Tenant may proceed with the improvements without the Landlord’s
prior written approval. If the cost of such improvements exceed $25,000.00 as such amount may
be increased as aforesaid, the Tenant may proceed with the improvements only after detailed
plans and specifications therefor have been submitted to the Landlord and received the prior
written approval of the Landlord, all at the expense of the Tenant, and should the Landlord
provide its written approval, such approval shall not be deemed to mean that the proposed
changes, additions or improvements comply with any existing or future municipal by-laws or any
other applicable laws, by-laws, codes or requirements. All costs incurred with respect to
such approval shall be at the expense of the Tenant. Any changes, additions and/or
improvements affecting the Building’s electrical, mechanical and/or structural components
shall only be performed by contractors selected by the Landlord (the “Landlord’s
Contractors”). A list of the Landlord’s Contractors is available upon request;

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	(d)	 	equal or exceed the then current standard for the Building;
	 
	(e)	 	be carried out in a good and workmanlike manner and, subject to Subsection 7.04(c), only by
Persons selected by the Tenant and approved in writing by the Landlord who shall, if required
by the Landlord, deliver to the Landlord before commencement of the work, performance and
payment bonds as well as proof of workers’ compensation and public liability and property
damage insurance coverage, with the Landlord and the Landlord’s Agent and nominee (if any)
named as additional insureds, in amounts, with companies and in a form reasonably satisfactory
to the Landlord, which shall remain in effect during the entire period in which the work will
be carried out; and
	 
	(f)	 	be made only after the Tenant has provided to the Landlord evidence of all requisite permits
and licences and any other information reasonably required by the Landlord.

Upon completion of such change, addition or improvement, the Tenant shall provide to the Landlord
as-built drawings and/or a CAD disk of same in a format useable by the Landlord, together with
evidence satisfactory to the Landlord of a final inspection of such change, addition or improvement
(including inspection of mechanical and electrical systems where applicable) by the authority which
issued the permit or licence for same.

7.05 Tenant’s Trade Fixtures and Personal Property — The Tenant may install in the Leased
Premises its usual trade fixtures and personal property in a proper manner; provided that no
installation or repair shall interfere with or damage the mechanical or electrical systems or the
structure of the Building. If the Tenant is not then in default hereunder, notice of which has
been delivered to the Tenant, the trade fixtures and personal property installed in the Leased
Premises by the Tenant may be removed by the Tenant from time to time in the ordinary course of the
Tenant’s business or in the course of reconstruction, renovation or alteration of the Leased
Premises by the Tenant, or in the event the Tenant vacates all or any portion of the Leased
Premises, and provided that the Tenant promptly repairs at its own expense any damage to the Leased
Premises and the Building resulting from the installation and removal and provided further that in
the event of removal of trade fixtures, except at the expiration or earlier termination of the
Term, the Tenant shall unless such trade fixtures have become obsolete or are no longer required
for the Tenant’s business operations in the Leased Premises, promptly replace such trade fixtures
with trade fixtures of equal or greater quality and value, subject to the provisions of Section
14.01.

7.06 Maintenance and Repair — Except to the extent that the Landlord is specifically
responsible therefor under this Lease with the further exception of reasonable wear and tear, the
Tenant, at its cost, shall maintain, repair and replace the interior of the Leased Premises, all
Leasehold Improvements and all apparatus therein in good order and condition, and in compliance
with the requirements of all authorities having jurisdiction, including without limitation:

	(a)	 	keeping the Leased Premises and the immediate surrounding area in a clean and tidy condition
and free of debris and garbage;
	 
	(b)	 	cleaning and maintaining window coverings and carpets at reasonable intervals as reasonably
required by the Landlord;
	 
	(c)	 	making repairs and replacements as needed to the interior of the Leased Premises including,
without limitation, to internal and external glass within or on the exterior of the Leased
Premises (with the exception of glass comprising the curtain wall), doors, hardware,
partitions, walls, fixtures, lighting and plumbing fixtures, wiring, piping, ceilings, floors
and thresholds in the Leased Premises; and
	 
	(d)	 	keeping the Leased Premises in such condition as to comply with the requirements of any
authority having jurisdiction.

7.07 Inspection — The Landlord and its Consultants may from time to time enter upon the
Leased Premises:

	(a)	 	to inspect the Leased Premises and its condition; and
	 
	(b)	 	to inspect any work being done by the Tenant both during the course of such work and
following completion thereof.

If the Landlord or the Landlord’s Agent shall determine that the work being done by the Tenant is
in breach of this Lease or fails to comply with the requirements of this Lease in any respect, the
Tenant shall forthwith remedy such breach or failure to comply and shall desist from continuing the
same. The Tenant shall, at its own cost, make good any deficiency in such work and remedy any
failure to comply with the requirements of this Lease.

7.08 Failure to Maintain — If the Tenant fails to perform any obligation under this Article
7.00, or commence and diligently proceed to perform such obligation, then on not less than 5 days’
written

	MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)	Page 14

 

 

notice to the Tenant, the Landlord may enter the Leased Premises and perform the obligation
without liability to the Tenant for any loss or damage thereby incurred. The Tenant shall promptly
after receiving the Landlord’s invoice therefor reimburse the Landlord for all costs incurred by
the Landlord in performing the obligation plus 15% of the costs for overhead and supervision.

7.09 Liens — The Tenant shall:

	(a)	 	pay promptly when due all costs for work done or caused to be done or goods affixed by the
Tenant in the Leased Premises which could result in any lien or encumbrance on the Landlord’s
interest in the Project or any part thereof, or the filing or registration of any security
interest or notice thereof;
	 
	(b)	 	keep the title to the Project, including every part thereof and the Leasehold Improvements,
free and clear of any lien, encumbrance or security interest or notice thereof; and
	 
	(c)	 	indemnify and hold harmless the Landlord against any Claims arising out of the supply of
goods, materials, services or labour for the work.

The Tenant shall immediately notify the Landlord of any lien, encumbrance, claim of lien, security
interest, or notice thereof or other action of which it has, or reasonably should have, knowledge
and which affects the title to the Project or any part thereof and, shall cause the same to be
removed within 5 Business Days (or such additional time as the Landlord may consent to in writing),
failing which the Landlord may take such action as the Landlord deems necessary to remove same and
the entire cost thereof shall immediately become due and payable by the Tenant to the Landlord.
The Tenant shall not affix or cause to be affixed to the Project any goods acquired under
conditional sale or with respect to which any lien, encumbrance or security interest exists. The
Landlord may from time to time post such notices in such places on the Leased Premises as the
Landlord considers advisable to prevent or limit the creation of any liens upon the Project or any
part thereof. Notwithstanding anything contained in this Section 7.09 or in Article 12.00 of this
Lease to the contrary, any security agreement entered into by the Tenant with a lender shall not
require the Landlord’s consent and shall not be considered to be a Transfer or to cause a default
of any of the Tenant’s obligations under this Lease including, without limitation, any of the
Tenant’s obligations under this Section 7.09.

7.10 Roof — Subject to Section 7 of Schedule E of this Lease and Schedule J of this Lease,
the Tenant shall not be entitled to install upon the roof of the Building any equipment except as
consented to in writing by the Landlord, which consent may not be unreasonably withheld, but if
given shall be subject to whatever conditions the Landlord, acting reasonably, deems necessary in
the circumstances.

ARTICLE 8.00 — TAXES

8.01 Taxes Payable by Landlord — The Landlord covenants and agrees to pay all Taxes
assessed against the Landlord or the Project on account of its ownership when due (except for
Business Taxes payable directly to the taxing authority by the Tenant under Subsection 8.02(b) and
similar taxes levied or assessed separately from Taxes and payable directly to the taxing authority
by other tenants or occupants of the Project) and subject to the provisions hereinafter contained
in this Article 8.00. Provided however, that the Landlord may defer payment of any such Taxes or
defer compliance with any statute, law, by-law, regulation or ordinance in connection with the levy
of such Taxes in each case to the fullest extent permitted by law as long as it shall diligently
prosecute any contest or appeal of such Taxes.

8.02 Taxes Payable by Tenant — The Tenant shall pay promptly when due, without duplication,
all Taxes upon or on account of the following:

	(a)	 	to the Landlord, the Tenant’s Proportionate Share of Taxes. Notwithstanding the foregoing,
the Tenant’s Proportionate Share of Taxes so determined may be adjusted by the Landlord,
acting reasonably and equitably to the extent necessary, to ensure that the Tenant’s
Proportionate Share of Taxes is the same as it would have been following application of any
special provision of real property tax related legislation applicable to this Lease; and
	 
	(b)	 	to the taxing authority or to the Landlord at the Landlord’s direction, any Taxes imposed or
assessed against or in respect of the personal property and Leasehold Improvements of the
Tenant in the Leased Premises or in respect of any business operations carried on or in
respect of the use or occupancy thereof by the Tenant or by any subtenant or licensee, if
levied or assessed separately from Taxes upon the remainder of the Land and Building and
referred to herein as “Business Taxes”.

The Tenant agrees to provide to the Landlord within 3 days of receipt thereof, an original or
duplicate copy of any separate bill for Taxes. The Tenant shall deliver promptly, upon request of
the Landlord, receipts for all such payments and will furnish such other information as the
Landlord may require.

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8.03 Tax Increases Attributable to Tenant — If any Taxes in respect of the Leased Premises
or Project are greater than they otherwise would have been by reason of the constitution or
ownership of the Tenant, the use of the Leased Premises by the Tenant, the school support of the
Tenant or any other reason peculiar to the Tenant, the portion of such Taxes in each year
attributable to such reason, as determined by the Landlord, shall be paid by the Tenant to the
Landlord within 15 days of demand therefor which demand shall be accompanied with reasonable
particulars of any such additional Taxes and the reasons same are attributable to the Tenant, and
in addition to Property Taxes and other Taxes otherwise payable by the Tenant under this Lease.

8.04 GST — The Tenant shall pay to the Landlord the amount of all GST accruing due with
respect to Rent at the time the Rent is due and payable to the Landlord under this Lease. The
Tenant’s obligation to pay GST under this Section shall not be limited or precluded by any
limitation contained in this Lease upon the Landlord’s right to recover or receive payment from the
Tenant of taxes upon the Landlord’s income or profits or otherwise.

8.05 Landlord’s Election — Notwithstanding anything contained in this Lease to the
contrary, in the event that any Taxes are separately imposed, levied, assessed or charged by the
appropriate authority for or in respect of the Leased Premises, the Tenant shall pay in lieu of its
Proportionate Share of Taxes, the amount of such Taxes separately imposed, levied, assessed or
charged by the appropriate authority for or in respect of the Leased Premises as part of the
Tenant’s Occupancy Costs.

8.06 Right to Contest — Each of the Landlord and the Tenant (provided the Tenant is legally
entitled to do so) shall have the right to contest in good faith the validity or amount of any
Taxes which, in the case of the Landlord, the Landlord is responsible to pay under this Article
8.00 and which, in the case of the Tenant, the Tenant is responsible to pay under Subsection
8.02(b) and for which it is separately assessed or Section 8.05. Notwithstanding anything to the
contrary herein, the Tenant may, upon prior written notice to the Landlord, defer payment of any
amount payable by it pursuant to Subsection 8.02(b) for which it is separately assessed or Section
8.05, to the extent permitted by law; provided that no contest by the Tenant shall involve the
possibility of forfeiture, sale or disturbance of the Landlord’s interest in the Leased Premises or
the imposition of any penalty or interest, charge or lien and that, upon the final determination of
any contest by the Tenant, the Tenant shall immediately pay and satisfy the amount found to be due,
together with any costs, penalties and interest. If, as a result of any contest by the Tenant, any
tax, rate, levy, assessment, fee or other charge is increased, the Tenant shall be responsible for
the full amount of such increase in respect of the period to which the contest relates and to any
subsequent tax periods which commence during the Term.

The Tenant shall not contest any amount payable by it under Subsection 8.02(a) but may contest any
amount payable by it under Subsection 8.02(b) or Section 8.05 or appeal any assessment therefor
subject to complying with the following:

	(a)	 	the Tenant shall deliver to the Landlord any notices of appeal or other like instrument and
obtain the Landlord’s consent thereto, which consent shall not be unreasonably withheld,
before filing the same;
	 
	(b)	 	the Tenant shall deliver whatever security the Landlord reasonably requires;
	 
	(c)	 	the Tenant shall promptly and diligently prosecute the contest or appeal at its sole expense;
and
	 
	(d)	 	the Tenant shall keep the Landlord fully informed thereof.

ARTICLE 9.00 — INSURANCE, LIABILITY AND ENVIRONMENTAL

9.01 Landlord’s Insurance — During the Term, the Landlord shall place insurance coverage on
and with respect to the Project excluding the area(s) to be insured by the Tenant as set out in
Section 9.02, which coverage shall include the following:

	(a)	 	all risks insurance for the full reconstruction value of the Project, excluding Leasehold
Improvements, as determined by the Landlord;
	 
	(b)	 	as an extension to the insurance maintained pursuant to Subsection 9.01(a), insurance on the
rental income derived by the Landlord from the Project on a gross rental income form with a
period of indemnity of not less than the period as estimated by the Landlord from time to time
which would be required to rebuild and, if necessary, to re-tenant the Project in the event of
the complete destruction thereof;
	 
	(c)	 	boiler and machinery insurance, including repair or replacement and rental income coverage,
if applicable;

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	(d)	 	plate glass insurance (not including plate glass fronting or within the Leased Premises) if
deemed appropriate by the Landlord;
	 
	(e)	 	commercial general liability insurance; and
	 
	(f)	 	such other insurance which is or may become customary or reasonable for owners of projects
similar to the Project to carry in respect of loss of, or damage to, the Project or liability
arising therefrom.

The insurance referred to in this Section shall be carried in amounts determined reasonably by the
Landlord. The insurance shall be written in the name of the Landlord with loss payable to the
Landlord and to any mortgagee (including any trustee under a deed of trust and mortgage) of the
Project from time to time. The policies of insurance referred to in Subsections 9.01(a), (b), (c),
(d) and (e) shall contain a waiver of the insurer’s right of subrogation as against the Tenant.
The Landlord hereby waives its right of recovery against the Tenant, its employees and those for
whom the Tenant is in law responsible with respect to all Claims required to be insured against by
the Landlord hereunder.

In addition, the Landlord hereby waives its right of recovery against the Tenant, its employees and
those for whom the Tenant is in law responsible with respect to all Claims for which the Landlord
otherwise maintains insurance for the premiums for which are included in whole or in part in
Operating Costs and in respect of which the Tenant is not insured or required to be insured
pursuant to Section 9.02(g) of this Lease. The Landlord covenants, warrants and represents that as
of the date of this Lease it is carrying terrorism insurance on both its property and liability
insurance policies. The Landlord further acknowledges and agrees that notwithstanding anything
contained in this Lease to the contrary, the Tenant is not required during the Fixturing Period or
the Term to carry property or liability terrorism insurance under this Lease including, without
limitation, pursuant to the provisions of Subsection 9.02(g) of this Lease.

Notwithstanding any contribution by the Tenant to insurance premiums as provided for in this Lease,
no insurable interest is conferred upon the Tenant under policies carried by the Landlord. Except
as specifically provided in this Lease, the Landlord shall in no way be accountable to the Tenant
regarding the use of the insurance proceeds arising from any Claims.

9.02 Tenant’s Insurance — At its own expense the Tenant shall take out and thereafter
maintain in force at all times during the Term and at all times when the Tenant is in possession of
the Leased Premises insurance policies as follows:

	(a)	 	all risks insurance on Leasehold Improvements and on all other property of every description,
nature and kind owned by the Tenant or for which the Tenant is legally liable, which is
installed, located or situate within the Leased Premises or elsewhere in the Project,
including without limitation, all inventory or stock-in-trade in an amount not less than the
full replacement cost thereof without deduction for depreciation; such insurance shall be
subject to a replacement cost endorsement and shall include a stated amount co-insurance
clause and a breach of conditions clause;
	 
	(b)	 	commercial general liability insurance to respond to any and all incidents occurring in the
Leased Premises in the minimum amount of $3,000,000.00 per occurrence including the following
extensions: owners and contractors protective; hostile fire endorsement; products and
completed operations; personal injury; occurrence basis property damage; blanket contractual
and non-owned automobile liability; such insurance shall include the Landlord and the
Landlord’s Agent and nominee (if any) as additional insureds, and shall protect and indemnify
the Landlord and the Landlord’s Agent and nominee (if any) in respect of all Claims, including
Claims by the Tenant, as if the Landlord and the Landlord’s Agent and nominee (if any) were
separately insured; such insurance shall include cross liability and severability of interest
clauses;
	 
	(c)	 	boiler and machinery or equipment breakdown insurance, including repair or replacement
endorsement, in an amount satisfactory to the Landlord and providing coverage with respect to
all objects introduced into the Leased Premises by or on behalf of the Tenant or otherwise
constituting Leasehold Improvements;
	 
	(d)	 	plate glass insurance on all internal and external glass within or fronting the Leased
Premises; however, notwithstanding the foregoing, the Tenant may elect to self-insure for the
insurance described in this Subsection 9.02(d);
	 
	(e)	 	business interruption insurance on the profit form providing all risks coverage with a period
of indemnity of not less than 12 months and subject to a stated amount co-insurance clause.
The Tenant, or a Permitted Transferee, may elect to self-insure for the insurance described in
this Subsection 9.02(e);

	MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)	Page 17

 

 

	(f)	 	any other form of insurance in such amounts and against such risks as the Landlord may from
time to time reasonably require provided such other forms of insurance are standard types of
insurance usually maintained by tenants in the real estate industry in similar office
buildings as the Building.

The Tenant acknowledges and agrees that it shall be solely responsible for insuring the Leasehold
Improvements, its equipment and stock and any other property owned or brought into the Leased
Premises by the Tenant whether affixed to the Building or not.

The insurance policies referred to in this Section shall be subject to such higher limits as the
Tenant, or the Landlord acting reasonably, or any mortgagee of the Landlord’s interest in the
Project may require from time to time. The policies of insurance referred to in Subsections
9.02(a), (b), (c), (d), (e), (f) and (g) shall contain a waiver of the insurer’s right of
subrogation as against the Landlord. The Tenant hereby waives its right of recovery against the
Landlord, its employees and those for whom the Landlord is in law responsible with respect to all
Claims required to be insured against by the Tenant hereunder. Any and all deductibles in the
Tenant’s insurance policies shall be borne solely by the Tenant and shall not be recovered or
attempted to be recovered from the Landlord. In addition, all such policies shall be
non-contributing with, and will apply only as primary and not excess to, any insurance proceeds
available to the Landlord.

The Tenant shall provide to the Landlord at the commencement of the Term and at least 30 days prior
to the renewal of all insurance referred to in this Section 9.02, and promptly at any time upon
request, a certificate of insurance evidencing the insurance coverage maintained by the Tenant in
accordance with this Section 9.02. The delivery to the Landlord of a certificate of insurance or
any review thereof by or on behalf of the Landlord shall not limit the obligation of the Tenant to
provide and maintain insurance pursuant to this Section 9.02 or derogate from the Landlord’s rights
if the Tenant shall fail to fully insure.

All policies shall provide that the insurance shall not be cancelled or changed to the prejudice of
the Landlord without at least 30 days’ prior written notice given by the insurer to the Landlord.
All policies of insurance shall be placed with a company licensed to sell commercial insurance in
Canada.

The Tenant acknowledges and agrees that, if it fails to obtain and maintain in force any of the
insurance policies set out in this Section 9.02, then the Tenant shall indemnify and hold harmless
the Landlord in respect of any losses arising therefrom.

9.03 Placement of Tenant’s Insurance by Landlord — If the Tenant fails to place or maintain
all or any of the insurance coverage referred to in Section 9.02, the Landlord may, at its option,
place all or any part of such insurance in the name of or on behalf of the Tenant and the Tenant
shall pay to the Landlord upon demand all costs incurred by the Landlord in so doing including,
without limitation, the premium or premiums for such insurance together with the Landlord’s
administrative fee of 15% of such premium.

9.04 Limitation of Landlord’s Liability — The Landlord, the Landlord’s Agent, their
employees and any Person for whom any of them are in law responsible shall not be liable under any
circumstances for any damage caused by anything done or omitted to be done by any other tenant of
the Project or any Person for whom such tenant is in law responsible.

9.05 Environmental Issues

(1) Landlord’s Requirements - The Tenant shall not bring into or allow to be present in the Leased
Premises or the Project any Pollutants except such as are disclosed in Schedule H hereto. If the
Tenant shall bring, create, discharge or release upon, in or from the Project, including the Leased
Premises, any Pollutants, whether or not disclosed in Schedule H and whether during the Term of
this Lease or any prior lease by the Tenant, then such Pollutants shall be and remain the sole
property of the Tenant and the Tenant shall promptly remove same at its sole cost at the expiration
or sooner termination of the Term or sooner if required by the Landlord.

(2) Governmental Requirements - If, during the Term or any renewal or extension of this Lease or at
any time thereafter, any governmental authority shall require the clean-up of any Pollutants:

	(a)	 	held in, discharged in or from, released from, abandoned in, or placed upon the Leased
Premises or the Project by the Tenant or its employees or those for whom it is in law
responsible; or
	 
	(b)	 	released or disposed of by the Tenant or its employees or those for whom it is in law
responsible;

whether during the Tenant’s occupancy of the Leased Premises or any other premises in the Project
pursuant to this Lease or any prior lease by the Tenant of the Leased Premises or any other

	MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)	Page 18

 

 

premises in the Project, then the Tenant shall, at its own expense, carry out all required work,
including preparing all necessary studies, plans and approvals and providing all bonds and other
security required by any governmental authority or required by the Landlord and shall provide full
information with respect to all such work to the Landlord; provided that the Landlord may, at its
option, perform any such work at the Tenant’s sole cost and expense, payable on demand as
additional Rent.

(3) Environmental Covenants - In addition to and without restricting any other obligations or
covenants herein, the Tenant covenants that it will:

	(a)	 	comply in all respects with all Environmental Laws relating to the Leased Premises or the use
of the Leased Premises;
	 
	(b)	 	promptly notify the Landlord in writing of any notice by any governmental authority alleging
a possible violation of or with respect to any other matter involving any Environmental Laws
relating to operations in the Leased Premises or relating to any Person for whom it is in law
responsible or any notice from any other party concerning any release or alleged release of
any Pollutants; and
	 
	(c)	 	permit the Landlord upon prior notice to the Tenant to:

	 	(i)	 	enter and inspect the Leased Premises and the operations conducted therein;
	 
	 	(ii)	 	conduct tests and environmental assessments or appraisals;
	 
	 	(iii)	 	remove samples from the Leased Premises; and
	 
	 	(iv)	 	examine and make copies of any documents or records relating to the Leased Premises and
interview the Tenant’s employees as necessary; and

	(d)	 	promptly notify the Landlord of the existence of any Pollutants in the Project.

In the exercise of its rights pursuant to Subsection (3)(c) of this Section 9.05, the Landlord
shall use reasonable efforts to not materially interfere with or materially adversely affect access
to and egress from the Leased Premises and the business of the Tenant carried on in the Leased
Premises and shall repair at its sole cost and expense all damage caused to the Leased Premises or
its contents as a result of the exercise of any such rights.

(4) Environmental Indemnification - The Tenant shall, during the Term and at all times thereafter,
indemnify and hold the Landlord harmless from and against any and all losses, damages, penalties,
fines, costs, fees and expenses (including legal fees on a solicitor and client or substantial
indemnity basis and Consultants’ fees and expenses) resulting from:

	(a)	 	any breach of or non-compliance with the environmental obligations and covenants of the
Tenant as set out in this Lease; and
	 
	(b)	 	any legal or administrative action commenced by, or claim made or notice from, any third
party, including, without limitation, any governmental authority, to or against the Landlord
and pursuant to or under any Environmental Laws or concerning a release or alleged release of
Pollutants at the Project into the environment to the extent in each instance caused by the
Tenant or its employees or those for whom it is in law responsible.

(5) Environmental Indemnification (Landlord) - The Landlord shall, during the Term and at all times
thereafter, indemnify and hold the Tenant harmless from and against any and all losses, damages,
penalties, fines, costs, fees and expenses (including legal fees on a solicitor and client or
substantial indemnity basis and Consultants’ fees and expense) resulting from:

	(a)	 	any breach of or non-compliance with the environmental obligations and covenants of
the Landlord as set out in this Lease; and
	 
	(b)	 	any legal or administrative action commenced by, or claim made or notice from, any third
party, including, without limitation, any governmental authority, to or against the Tenant and
pursuant to or under any Environmental Laws or concerning a release or alleged release of
Pollutants at the Project into the environment to the extent in each instance caused by the
Landlord or its employees or those for whom it is in law responsible.

ARTICLE 10.00 — DAMAGE AND DESTRUCTION

10.01 Limited Damage to Leased Premises, Access or Services — If during the Term, the
Leased Premises or any part thereof, or other portions of the Building providing access or Services
essential to the Leased Premises, shall be destroyed or damaged by any hazard the Landlord, if

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permitted by law to do so, shall proceed with reasonable diligence to rebuild and restore or repair
the Leased Premises or comparable premises or such access routes or Service systems, as the case
may be, in conformance with current laws.The covenants of the Tenant to repair shall not include
any repairs of damage required to be made by the Landlord under this Section 10.01. For greater
certainty, it is understood and agreed that, upon substantial completion of the Landlord’s work,
the Tenant shall repair or restore the Leased Premises as required by Section 7.06. Rent payable
by the Tenant shall abate from the date of such damage or destruction to the date which is the
91st day following substantial completion of the Landlord’s work as determined by the
Landlord’s independent and duly qualified architect or engineer or restoration of access or
Services, as the case may be. If less than all of the Leased Premises is destroyed or damaged as
contemplated in this Section 10.01, Rent payable by the Tenant shall abate from the date of such
damage or destruction to the date which is the 31st day following substantial
completion of the Landlord’s work in the same proportion as the Rentable Area of the Leased
Premises so damaged or destroyed is of the total Rentable Area of the Leased Premises.

10.02 Major Damage to Leased Premises — Notwithstanding any other right of termination
contained herein, if the Leased Premises shall be damaged or destroyed by any hazard, and if in the
opinion of the Landlord’s architect or engineer, given within 30 Business Days of the happening of
said damage or destruction, said damage or destruction is to the extent that the Leased Premises
shall be incapable of being rebuilt or repaired or restored with reasonable diligence within 6
months after the occurrence of such damage or destruction, then the Landlord or the Tenant may, at
its option, terminate this Lease by notice in writing to the other. If such notice is given by the
Landlord or the Tenant under this Section 10.02, then this Lease shall terminate on the date of
such notice and the Tenant shall immediately surrender the Leased Premises and all interest therein
to the Landlord and Rent shall be apportioned and shall be payable by the Tenant only to the date
of such damage or destruction and the Landlord may thereafter re-enter and repossess the Leased
Premises. For greater certainty, it is understood and agreed that if this Lease is not terminated
as aforesaid, upon substantial completion of the Landlord’s work, the Tenant shall repair or
restore the Leased Premises as required by Section 7.06.

10.03 Damage to Building — Notwithstanding anything to the contrary contained in this Lease
or that the Leased Premises may not be affected, if in the reasonable opinion or determination of
the Landlord’s independent and duly qualified architect or engineer, rendered within 30 Business
Days of the happening of damage or destruction, the Building shall be damaged or destroyed to the
extent that any one or more of the following conditions exist:

	(a)	 	the Building must be totally or partially demolished, whether or not to be reconstructed in
whole or in part;
	 
	(b)	 	the Building shall be incapable of being rebuilt or repaired or restored with reasonable
diligence within 6 months after the occurrence of such damage or destruction;
	 
	(c)	 	more than 35% of the Total Rentable Area of the Building is damaged or destroyed; or
	 
	(d)	 	any or all of the heating, ventilating, air conditioning, electrical, mechanical or elevator
systems in the Building are damaged or destroyed as reasonably determined by the Landlord’s
architect or engineer and cannot be repaired or rebuilt or restored with reasonable diligence
within 6 months after the occurrence of such damage or destruction;

then the Landlord may at its sole option terminate this Lease by notice in writing to the Tenant.
If notice is given by the Landlord under this Section 10.03, then this Lease shall terminate from
the date of such notice and the Tenant shall immediately surrender the Leased Premises and all
interest therein to the Landlord and Rent shall be apportioned and shall be payable by the Tenant
only to the date of such notice and the Landlord may thereafter re-enter and repossess the Leased
Premises. If the Building is damaged to the extent described in this Section 10.03 and the
Landlord does not terminate this Lease, the Landlord will, rebuild or repair the Building to base
building standards, but the rebuilt or repaired Building may be different in configuration and
design from that comprising the Project prior to the damage or destruction.

10.04 No Abatement — Except as specifically provided in this Article 10.00, there shall be
no abatement of Rent and the Landlord shall have no liability to the Tenant by reason of any injury
to, loss of or interference with the Tenant’s business or property arising directly or indirectly
from fire or other casualty, howsoever caused, or from the making of any repairs resulting
therefrom or to any portion of the Building or the Leased Premises.

10.05 Notify Landlord — The Tenant shall immediately notify the Landlord or its
representative in the Project in case of fire or any accident or material defect in the Project,
the Leased Premises or any systems thereof of which it becomes aware and, as well, of any matter or
condition which may cause injury or damage to the Project or any person or property located
therein.

10.06 Expropriation — In the event of Expropriation of all or part of the Leased Premises
and/or the Building, neither the Landlord nor the Tenant shall have a claim against the other for
the shortening

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of the Term, nor the reduction or alteration of the Leased Premises or the Building.
The Landlord and the Tenant shall each look only to the Expropriating authority for compensation.
The Landlord and the Tenant agree to cooperate with one another so that each is able to obtain the
maximum compensation from the Expropriating authority as may be permitted in law in relating to
their respective interests in the Leased Premises and the Building. Nothing herein contained shall
be deemed or construed to prevent the Landlord or the Tenant from enforcing and prosecuting a claim
for the value of their respective interests in any Expropriation proceedings. However, to the
extent that a part of the Project other than the Leased Premises is Expropriated, the full proceeds
paid or awarded therefor will belong solely to the Landlord and the Tenant will assign to the
Landlord any rights it might have or acquire in respect of such proceeds or awards and will execute
those documents that the Landlord reasonably requires in order to give effect to this intention.

Where used in this Section 10.06 “Expropriation” means expropriated by a governmental or municipal
authority, or transferred, conveyed or dedicated in contemplation of a threatened expropriation and
“Expropriated” and “Expropriating” have corresponding meanings.

ARTICLE 11.00 — DEFAULT

11.01 Arrears — The Tenant shall pay monthly to the Landlord interest at a rate per annum
of Prime Rate plus 5% upon all Rent required to be paid hereunder from the due date for payment
thereof until the same is fully paid and satisfied.

In addition to the interest charges, in order to cover the extra expense involved in handling
delinquent payments, the Tenant, at the Landlord’s sole option, shall pay to the Landlord a charge
of $100.00 (the “Late Charge”) when any instalment of Rent is received by the Landlord after the
relevant due date thereof.

In addition, if any cheque presented to the Landlord by the Tenant representing payment of Rent is
not honoured by the Tenant’s bank or such cheque is returned to the Landlord indicating that there
are not sufficient funds in the Tenant’s account to honour such cheque, the Tenant shall pay to the
Landlord a charge of $50.00 for the first such occurrence during the Term, $150.00 for the second
such occurrence during the Term and $250.00 for each such subsequent occurrence during the Term
(the “NSF Charge”). It is hereby understood and agreed that the Late Charge and the NSF Charge is
charged as Rent and not as a penalty or interest, for the purpose of defraying the Landlord’s
expenses incident to the processing of such overdue payments and that such Late Charge or NSF
Charge is due and payable on and from the day immediately following the due date of such overdue
payment or, if no due date is specified in this Lease, then on the 10th day following
demand for same by the Landlord.

11.02 Costs of Enforcement — The Tenant shall indemnify the Landlord against all costs and
charges (including legal fees on a solicitor and client or substantial indemnity basis and the
Landlord’s reasonable administration charges) reasonably incurred either during or after the Term
in enforcing payment of Rent hereunder and in obtaining possession of the Leased Premises after
default of the Tenant or upon expiration or earlier termination of this Lease or in enforcing any
covenant, proviso or agreement of the Tenant herein contained or in determining the Landlord’s
rights or the Tenant’s obligations under this Lease or both. All such costs and charges shall be
paid by the Tenant to the Landlord forthwith upon demand.

11.03 Performance of Tenant’s Obligations — All covenants and agreements to be performed by
the Tenant under any of the terms of this Lease shall be performed by the Tenant, at the Tenant’s
sole cost and expense, and without any abatement of Rent except as is otherwise provided for in
this Lease. If the Tenant fails to perform any act to be performed by it hereunder then, in the
event of an emergency, either real or perceived, or if the failure continues for 10 days following
notice thereof, the Landlord may (but shall not be obligated to) perform the act without waiving or
releasing the Tenant from any of its obligations relative thereto, but having commenced to do so
may cease to do so without completing performance thereof. All sums paid and costs incurred by the
Landlord in so performing the act, plus 20% of the cost for overhead and supervision together with
interest thereon at the rate set out in Section 11.01 from the date payment was made or such cost
was incurred by the Landlord, shall be payable by the Tenant to the Landlord on demand.

11.04 Remedies on Default — Upon the happening of an Event of Default the Landlord may, at
its option, and in addition to and without prejudice to all rights and remedies of the Landlord
available to it either by any other provision of this Lease or by statute or the general law,
exercise any one or more of the following remedies:

	(a)	 	be entitled to the full amount of the current month’s and the next ensuing 3 months’
instalments of Rent which shall immediately become due and payable and the Landlord may
immediately distrain for the same, together with any arrears then unpaid;
	 
	(b)	 	without notice or any form of legal process, forthwith re-let or sublet the Leased Premises
or any part or parts thereof for whatever term or terms and at whatever rent and upon whatever

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other terms, covenants and conditions the Landlord considers advisable including, without
limitation, the payment or granting of inducements all on behalf of the Tenant; and on each
such re-letting or subletting the rent received by the Landlord therefrom will be applied
first to reimburse the Landlord for any such inducements and for any expenses, capital or
otherwise, incurred by the Landlord in making the Leased Premises ready for re-letting or
subletting; and secondly to the payment of any costs and expenses of re-letting or subletting
including brokerage fees and legal fees on a solicitor and client or substantial indemnity
basis; and third to the payment of Rent; and the residue, if any, will be held by the Landlord
and applied to payment of Rent as it becomes due and payable. If rent received from
re-letting or subletting during any month is less than Rent to be paid during that month
hereunder, the Tenant will pay the deficiency which will be calculated and paid monthly on or
before the first day of every month; and no re-letting or subletting of the Leased Premises by
the Landlord or entry by the Landlord or its agents upon the Leased Premises for the purpose
of re-letting or subletting or other act of the Landlord relating thereto including, without
limitation, changing or permitting a subtenant to change locks, will be construed as an
election on its part to terminate this Lease unless a written notice of termination is given
to the Tenant; and if the Landlord elects to re-let or sublet the Leased Premises without
terminating, it may afterwards elect to terminate this Lease at any time by reason of any
Event of Default then existing;

	(c)	 	seize and sell such goods, chattels and equipment of the Tenant as are in the Leased Premises
and the Landlord may, but shall not be obligated to, apply the proceeds thereof to all Rent to
which the Landlord is then entitled under this Lease. Any such sale may be effected by public
auction, private sale or otherwise, and either in bulk or by individual item, or partly by one
means and partly by another, all as the Landlord in its sole discretion may decide;
	 
	(d)	 	terminate this Lease by leaving upon the Leased Premises notice in writing of the
termination, and such termination shall be without prejudice to the Landlord’s right to
damages; it being agreed that the Tenant shall pay to the Landlord on demand as damages the
loss of income of the Landlord to be derived from this Lease and the Leased Premises for the
unexpired portion of the Term had it not been terminated; or
	 
	(e)	 	re-enter into and upon the Leased Premises or any part thereof in the name of the whole and
repossess and enjoy the same as of the Landlord’s former estate, anything herein contained to
the contrary notwithstanding;

and the Tenant shall pay to the Landlord forthwith upon demand all expenses of the Landlord in
re-entering, terminating, re-letting, collecting sums due or payable by the Tenant or realizing
upon assets seized or otherwise exercising its rights and remedies under this Section 11.04
including tenant inducements, leasing commissions, legal fees on a solicitor and client or
substantial indemnity basis and all disbursements and the expense of keeping the Leased Premises in
good order, repairing the same and preparing the same for re-letting.

In addition, and without limiting the generality of the foregoing provisions of this Section 11.04,
upon the happening of an Event of Default, and as a consequence thereof this Lease is terminated in
accordance with such provisions, the Landlord shall have no further liability to pay to the Tenant
or any third party any amount on account or in respect of a refund of any Security Deposit, prepaid
Rent or prepaid Taxes or any tenant inducement, leasehold improvement allowance, lease takeover or
lease subsidy or any other concession or inducement otherwise provided to the Tenant under or with
respect to this Lease, and any Rent free period otherwise provided to the Tenant hereunder shall be
null and void and of no further force or effect and Rent shall be payable in full hereunder without
regard to any such Rent free period.

11.05 Availability of Remedies — The Landlord may from time to time resort to any or all of
the rights and remedies available to it upon the occurrence of an Event of Default either by any
provision of this Lease or by statute or the general law, all of which rights and remedies are
intended to be cumulative and not alternative, and the express provisions herein as to certain
rights and remedies are not to be interpreted as excluding any other or additional rights or
remedies available to the Landlord by statute or the general law.

11.06 Waiver — If the Landlord or the Tenant shall overlook, excuse, condone or suffer any
default, breach or non-observance by the other of any obligation hereunder, this shall not operate
as a waiver of the obligation in respect of any continuing or subsequent default, breach or
non-observance and no such waiver shall be implied but shall only be effective if expressed in
writing.

The Landlord’s acceptance of Rent after a default is not a waiver of any preceding default under
this Lease even if the Landlord knows of the preceding default at the time of acceptance of the
Rent. No term, covenant or condition of this Lease shall be considered to have been waived by the
Landlord or the Tenant unless the waiver is in writing. Except as is otherwise provided for in
this Lease, the Tenant waives any statutory or other rights in respect of abatement, set-off or
compensation in its favour that may exist or come into existence hereafter with respect to Rent.

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11.07 Waiver of Exemption and Redemption — Notwithstanding anything contained in any
statute now or hereafter in force limiting the right of distress, none of the Tenant’s goods or
chattels in the Leased Premises at any time during the Term shall be exempt from levy by distress
for Rent in arrears, and this agreement of the Tenant in this Section may be pleaded as an estoppel
against the Tenant. Notwithstanding the foregoing, the Landlord shall not be entitled to effect a
distress against computer software, computer disks, CD-ROMs, computer programs and tapes, client
and customer property (including, without limitation, computer hardware and software), as well as
the servers in any offices in the Leased Premises and any data in the hard drives of any computers
on the Leased Premises, nor against the books, records, accounts, files, correspondence and
documents found upon the Leased Premises or any part thereof including, without limitation, all
proprietary and confidential information and the Landlord hereby waives any right, statutory or
otherwise, to levy a distress in that regard.

11.08 Companies’ Creditors Arrangement Act — By virtue of its interest in this Lease, the
importance of the Tenant continuing to carry on business in the Leased Premises in accordance with
this Lease, and the Landlord’s entitlement to damages where this Lease is terminated by reason of
an Event of Default, the Landlord does and will (despite any changes in circumstances of the Tenant
or its business) constitute a separate class or category of creditor in any plan of arrangement or
other proposal submitted by or on behalf of the Tenant under the Companies’ Creditors Arrangement
Act (Canada) or any similar legislation for bankrupt or insolvent debtors.

ARTICLE 12.00 — ASSIGNMENT, SUBLETTING AND OTHER TRANSFERS

12.01 Request for Consent — The Tenant shall not effect a Transfer of this Lease or of all
or part of the Leased Premises without the prior consent in writing of the Landlord, which consent
shall not, provided no Event of Default has occurred, be unreasonably withheld or delayed.
Provided that the Tenant shall, at the time the Tenant shall request the consent of the Landlord,
deliver to the Landlord such information in writing (herein called the “required information”) as
the Landlord may reasonably require respecting the proposed Transferee including, without
limitation, the name, address, nature of business, financial responsibility and standing of such
proposed Transferee.

12.02 Basis for Consent — Notwithstanding anything in the Landlord and Tenant Act, the
Commercial Tenancies Act or any other statute or law and without limiting the grounds upon which a
consent may be refused, the Landlord will not be deemed to be unreasonable in refusing consent
when:

	(a)	 	the giving of such consent would place the Landlord in breach of any other tenant’s lease in
the Project or the proposed use by the Transferee (if same is other than for general office
purposes) is not substantially the same as that of the Tenant;
	 
	(b)	 	such consent is requested for a mortgage, charge, debenture (secured by floating charge or
otherwise) or other encumbrance of, or in respect of, this Lease or the Leased Premises or any
part of them;
	 
	(c)	 	the Transferee, in the opinion of the Landlord: (i) does not have a history of successful
business operation in the business to be conducted in the Leased Premises; (ii) does not have
a good credit rating or a substantial net worth; or (iii) there is a history of default under
other leases by the Transferee or by companies or partnerships that the Transferee was a
principal shareholder of or a partner in at the time of the default;
	 
	(d)	 	in the case of a Transfer to a subtenant of less than the entire Leased Premises, if such
would result in a configuration which: (i) would require access to be provided through space
leased or held for lease to another tenant or improvements to be made outside of the Leased
Premises; or (ii) would, in the sole opinion of the Landlord, be unreasonable to attempt to
re-lease to a third party provided that this Subsection 12.02(f) shall not apply so long as
the portion of the Leased Premises to be sublet is located on a full floor leased by the
Tenant;
	 
	(e)	 	the required information received from the Tenant or the proposed Transferee is not
sufficient in the Landlord’s opinion to enable the Landlord to make a determination concerning
the matters set out above; or
	 
	(f)	 	the use of the Leased Premises by the proposed Transferee if same be other than that
permitted pursuant to Item 9 of the Term Sheet, in the Landlord’s opinion arrived at in good
faith, could result in excessive use of the systems or Services in the Project, be
inconsistent with the image and standards of the Project or expose the occupants of the
Project to risk of harm, damage or interference with their use and enjoyment thereof, or
reduce the value of the Project.

The Landlord shall not be liable for any claims, actions, damages, liabilities, losses or expenses
of the Tenant or any proposed Transferee arising out of the Landlord’s unreasonably withholding its

	MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)	Page 23

 

 

consent to any Transfer and the Tenant’s only recourse will be to bring an application for a
declaration that the Landlord must grant its consent to the Transfer.

In no event shall any Transfer to which the Landlord may have consented release or relieve the
Tenant or any Indemnifier from its obligations fully to perform all the terms, covenants and
conditions of this Lease, the Indemnity Agreement or any remaining unexercised renewals or
extensions of this Lease or the Term on its part to be performed and, in any event, the Tenant
shall be liable for the Landlord’s costs incurred in connection with the Tenant’s request for
consent as set out in Subsection 12.03(g).

12.03 Terms and Conditions Relating to Consents — The following terms and conditions apply
in respect of a consent given by the Landlord to a Transfer:

	(a)	 	the consent by the Landlord is not a waiver of the requirement for consent to subsequent
Transfers, and no Transfer shall relieve the Tenant of its obligations under this Lease,
unless specifically so provided in writing;
	 
	(b)	 	no acceptance by the Landlord of Rent or other payments by a Transferee is: (i) a waiver of
the requirement for the Landlord to consent in writing to the Transfer; (ii) the acceptance of
the Transferee as tenant or subtenant; or (iii) a release of the Tenant or Indemnifier from
its obligations under this Lease or any Indemnity Agreement;
	 
	(c)	 	the Landlord may apply amounts collected from the Transferee to any unpaid Rent;
	 
	(d)	 	the Transferor, unless the Transferee is a subtenant of the Tenant, will retain no rights
under this Lease in respect of obligations to be performed by the Landlord or in respect of
the use or occupation of the Leased Premises after the Transfer and will execute an Indemnity
Agreement on the Landlord’s standard form in respect of obligations to be performed after the
Transfer by the Transferee;
	 
	(e)	 	the Transferee shall, when required by the Landlord, jointly and severally with the Tenant,
enter into an agreement directly with the Landlord agreeing that the Transferee will be bound
from and after the effective date of the Transfer by all the terms of this Lease as it relates
to the portion of the Leased Premises which is the subject matter of the Transfer (except for
any Transferee who is not an assignee of this Lease which need only covenant and agree to pay
the minimum rent and additional rent set out in its occupancy agreement as opposed to the Rent
set out in this Lease as it relates to the portion of the Leased Premises which is the subject
matter of the Transfer) and the Tenant will not be released nor relieved from its obligations
under this Lease including, without limitation, the obligation to pay Rent;
	 
	(f)	 	in the event that this Lease is disaffirmed, disclaimed or terminated by any trustee in
bankruptcy of a Transferee, the original Tenant named in this Lease shall be deemed, upon
notice by the Landlord given within 30 days of such disaffirmation, disclaimer or termination
to have entered into a lease with the Landlord containing the same terms and conditions as in
this Lease, with the exception of the Term of such Lease which shall expire on the date on
which this Lease would have ended save for such disaffirmation, disclaimer or termination; and
	 
	(g)	 	any documents relating to a Transfer or the Landlord’s consent will be prepared by the
Landlord or its solicitors and a reasonable administration charge of at least $250.00 and the
greater of: (i) a reasonable document preparation fee of at least $450.00; or (ii) those legal
fees on a solicitor and client or substantial indemnity basis incurred by the Landlord will be
paid to the Landlord by the Tenant on demand.

12.04 Subsequent Transfers — The Landlord’s consent to a Transfer shall not be deemed to be
consent to any subsequent Transfer, whether or not so stated.

12.05 Profit Rents upon Transfers — In the event of any Transfer by the Tenant by virtue of
which the Tenant receives a rent which is directly referable to the Tenant’s interest in this Lease
in the form of cash, goods or services from the Transferee which is greater than the Rent payable
hereunder to the Landlord, the Tenant shall pay any such excess to the Landlord (after deducting
the Tenant’s costs on account of real estate commissions, the value of not more than a 3 month
rent-free period, inducements and improvement allowances granted to the Transferee and all other
reasonable direct costs incurred by the Tenant to effect the Transfer) in addition to all Rent
payable under this Lease and such excess rent shall be deemed to be further Rent payable hereunder.

12.06 Advertising — The Tenant shall not advertise the Leased Premises or any part
thereof as being available for leasing or this Lease as being available for transfer in any medium
and will not cause or permit any such advertisement, unless the Landlord has permitted the Tenant
to do so in writing and has given written approval of the wording of such advertisement, which
permission and approval may not be unreasonably withheld.

	MORGUARD February 2005 - Net Office, Multi-Tenant (General Application)	Page 24

 

 

The Tenant shall pay all costs associated with the granting and perfection of mortgages, charges
and security interests granted pursuant to this Lease upon any Transfer.

ARTICLE 13.00 — TRANSFERS BY LANDLORD

13.01 Sale, Conveyance and Assignment — Nothing in this Lease shall restrict the right of
the Landlord to sell, convey, assign, pledge or otherwise deal with the Project, subject (except as
provided in Section 13.03) only to the rights of the Tenant under this Lease.

13.02 Effect of Transfer — A sale, conveyance or assignment of the Project by the Landlord
shall operate to release the Landlord from liability from and after the effective date thereof in
respect of all of the covenants, terms and conditions of this Lease, express or implied, except as
they may relate to the period prior to the effective date, and the Tenant shall thereafter look
solely to the Landlord’s successor in interest.

13.03 Subordination — Subject to Section 13.04, this Lease, at the option of any mortgagee,
trustee or chargee, is and shall be subject and subordinate in all respects to any and all
mortgages (including deeds of trust and mortgage) now or hereafter registered against title to the
Building or Land and all advances thereunder, past, present and future and to all renewals,
modifications, consolidations, replacements and extensions thereof, so long as the holder(s) of any
such mortgage(s), deed(s) of trust or charge(s) first provides the Tenant with its standard form of
non-disturbance agreement which shall provide that, so long as the Tenant is not in default of a
material covenant under this Lease, it shall be entitled to remain undisturbed in its possession of
the Leased Premises, subject to the terms, covenants and conditions of this Lease. Subject to
being first provided with such a non-disturbance agreement, the Tenant agrees to execute promptly
and in any event within 10 days after request therefor by the Landlord or the mortgagee or trustee
under any such mortgage or deed of trust and mortgage an instrument of subordination as may be
requested.

13.04 Attornment — The Tenant agrees, whenever requested by any mortgagee, trustee or
chargee (in this Section 13.04 and in Section 13.05 called the “Mortgagee”) taking title to the
Project by reason of foreclosure or other proceedings for enforcement of any mortgage or deed of
trust, or by delivery of a deed in lieu of such foreclosure or other proceeding, to attorn to such
Mortgagee as a tenant under all of the terms of this Lease. The Tenant agrees to execute promptly
and in any event within 10 days after a request by any Mortgagee an instrument of attornment as may
be required by it.

13.05 Effect of Attornment — Upon attornment pursuant to Section 13.04, this Lease shall
continue in full force and effect as a direct lease between the Mortgagee and the Tenant, upon all
of the same terms, conditions and covenants as are set forth in this Lease except that, after
attornment, the Mortgagee and its successors in title shall not be:

	(a)	 	liable for any act or omission of the Landlord;
	 
	(b)	 	subject to any offset or defence which the Tenant might have against the Landlord; or
	 
	(c)	 	bound by any prepayment by the Tenant of more than 1 month’s instalment of Rent unless the
prepayment shall have been approved in writing by the Mortgagee or by any predecessor of the
Mortgagee’s former interest as mortgagee of the Project.

ARTICLE 14.00 — SURRENDER

14.01 Possession and Restoration

(1) Upon the expiration or other termination of the Term, the Tenant shall immediately quit and
surrender possession of the Leased Premises and all Leasehold Improvements in substantially the
condition in which the Tenant is required to maintain the Leased Premises pursuant to this Lease,
excepting only reasonable wear and tear, damage covered by the insurance required to be maintained
by the Landlord pursuant to Section 9.01 of this Lease or otherwise maintained by the Landlord and
the Landlord’s maintenance, repair and replacement obligations under this Lease, and the Tenant
shall deliver to the Landlord the keys, mechanical or otherwise, and combinations, if any, to the
locks in the Leased Premises and entries thereto. In addition, the Landlord shall have the right,
at its sole option upon expiration or other termination of the Term, to require that the Tenant
remove or cause to be removed at the Tenant’s cost all or any part of any wiring, cables, risers or
similar installations appurtenant thereto installed by the Tenant or on the Tenant’s behalf in the
risers of the Building (the “Wiring”) and to restore the risers and other parts of the Project
affected by the installation or removal of the Wiring to their condition existing prior to the
installation of the Wiring (the “Wire Restoration Work”). Notwithstanding the foregoing, the
Landlord may, at its sole option,

	 	 	 
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	 	Page 25

 

 

perform the Wire Restoration Work at the Tenant’s sole cost and expense. Upon surrender, all
right, title, and interest of the Tenant in the Leased Premises and all Leasehold Improvements
located therein and in all Wiring shall cease.

(2) If the Landlord elects to perform the said removal and restoration work and/or the Wire
Restoration Work, 90 days (or as soon after such date as is reasonably possible) prior to the
expiration of the Term the Landlord may inspect the Leased Premises to determine the extent of the
Wire Restoration Work and upon receipt of the Landlord’s estimate of the costs thereof (the
“restoration cost”) the Tenant shall provide to the Landlord, by certified cheque, the restoration
cost.

14.02 Tenant’s Trade Fixtures and Personal Property — After the expiration or other
termination of the Term or in the event of the abandonment of the Leased Premises by the Tenant,
all of the Tenant’s trade fixtures and personal property remaining in the Leased Premises shall be
deemed conclusively to have been abandoned by the Tenant and may be appropriated, sold, destroyed
or otherwise disposed of by the Landlord without notice or obligation to compensate the Tenant or
to account therefor, and the Tenant shall pay to the Landlord upon written demand all of the costs
incurred by the Landlord in connection therewith.

14.03 Overholding — If the Tenant remains in the Leased Premises or any part thereof after
the expiration or other termination of the Term:

	(a)	 	without the consent of the Landlord, no yearly or other periodic tenancy shall be created and
the Tenant shall be deemed, notwithstanding any statutory provision or legal assumption to the
contrary, to be occupying the Leased Premises as a tenant at will of the Landlord, which
tenancy may be terminated at any time by the Landlord without the necessity of any prior
notice to the Tenant, but the Tenant shall be bound by the terms and provisions of this Lease
except any options thereby granted to the Tenant and except the Basic Rent which shall be
twice the greater of: (i) the rate provided for herein for the final year of the Term; and
(ii) the market rate for similar premises as determined by the Landlord at the time of such
overholding, and subject to such additional obligations and conditions as the Landlord may
impose by notice to the Tenant; or

	(b)	 	with the consent of the Landlord and agreement as to the Rent payable, the tenancy shall be
month-to-month at the Rent agreed and otherwise on the terms and conditions of this Lease, but
without any option to renew or for a new lease.

The Landlord may recover possession of the Leased Premises during any period with respect to which
the Tenant has prepaid the amount payable under Subsection 14.03(a).

The Tenant shall promptly indemnify and hold harmless the Landlord from and against all Claims
against the Landlord as a result of the Tenant remaining in possession of all or any part of the
Leased Premises after the expiry of the Term without the consent of the Landlord (including,
without limitation, any compensation to any new tenant or tenants which the Landlord may elect to
pay whether to offset the cost of overtime work or otherwise).

ARTICLE 15.00 — GENERAL

15.01 Estoppel Certificates — The Tenant shall whenever requested by the Landlord, a
prospective purchaser or any mortgagee (including any trustee under a deed of trust and mortgage)
promptly, and in any event within 10 days after request, execute and deliver to the Landlord or to
any party or parties designated by the Landlord a certificate in writing as to the then status of
this Lease, including as to whether it is in full force and effect, is modified or unmodified,
confirming the Rent payable hereunder and each element hereof and the then state of the accounts
between the Landlord and the Tenant, the existence or non-existence of defaults and any other
matters pertaining to this Lease in respect of which the Landlord shall request a certificate, and
provide such other information as may reasonably be required. The party or parties to whom such
certificates are addressed may rely upon them.

15.02 Entire Agreement — There is no promise, warranty, representation, undertaking,
covenant or understanding by or binding upon the Landlord except such as are expressly set forth in
this Lease and this Lease, including the Term Sheet and schedules hereto, contains the entire
agreement between the parties hereto.

15.03
Registration of Notice of Lease — The Tenant acknowledges the confidential
nature of this Lease and agrees with the Landlord not to register this Lease. However, if the
Tenant wishes to register a caveat or notice of this Lease, the Tenant shall prepare and execute at
the sole expense of the Tenant, an acknowledgement, caveat or short form of lease sufficient for
such purpose in such form as will preserve the confidentiality of the Rent and other financial
terms of this Lease and submit same to the Landlord for approval, which approval shall not be
unreasonably withheld, and execution prior to registering same; provided that, if there is a
conflict between the provisions of such notice or short form of lease and this Lease, the

	 	 	 
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provisions of this Lease shall govern. The Tenant shall discharge any such registration upon the
expiry or earlier termination of this Lease.

15.04 Project Name and Trademarks — The Tenant shall not refer to the Project or
Building by any name other than that designated from time to time by the Landlord and the Tenant
shall use the name of the Building for the business address of the Tenant, but for no other
purpose. Compliance with this Section shall be at the sole cost and expense of the Tenant and the
Tenant shall have no claim against the Landlord for any costs or expenses incurred by the Tenant,
whether direct or indirect, in complying with this Section.

15.05 “For Lease” Signs — The Landlord shall have the right during the last 12 months of
the Term to place upon the Leased Premises a notice of reasonable dimensions stating that the
Leased Premises are “for lease” and the Tenant shall not obscure or remove such notice or permit
the same to be obscured or removed.

15.06 Unavoidable Delays — If the Landlord or the Tenant (the “delayed party”) shall be
delayed, hindered or prevented in or from the performance of any of its covenants under this Lease
by any cause not within the control of the delayed party, as determined by the Landlord acting
reasonably (excluding lack of finances of the delayed party), the performance of the covenant shall
be excused for the period during which performance is rendered impossible and the time for
performance thereof shall be extended accordingly, but this shall not excuse the Tenant from the
prompt payment of Rent or from the performance of any of its other obligations under this Lease not
related to such cause.

15.07 Limitation of Recourse — The Tenant acknowledges that, notwithstanding any other
provision contained in this Lease, the obligations of and rights against the Landlord under this
Lease shall be performed, satisfied and paid only out of and enforced against, and recourse
hereunder shall be had only after judgment and only against, the right, title and interest of the
Landlord from time to time in, and the Landlord’s revenue derived from, the Project including
without limitation, the rents and other sums received or receivable from the Project and any
consideration received or receivable by the Landlord from the sale, transfer, or conveyance of all
or any part of the Landlord’s interest in the Project, property insurance and rental income
insurance paid or available to the Landlord. No obligation of the Landlord hereunder or in respect
hereof is personally binding upon, nor shall any resort or recourse be had, judgment issued or
execution or other process levied against, the Landlord (except to the extent necessary for
enforcement under the first sentence of this Section 15.09 and only for that purpose), or against
any other assets or revenues of the Landlord.

If the Landlord is, or this Lease is assigned by the Landlord to, a real estate investment trust
(“REIT”), the parties acknowledge and agree that the obligations of the REIT hereunder and under
all documents delivered pursuant hereto (and all documents to which this document may be pursuant)
or which give effect to, or amend or supplement, the terms of this Lease are not personally binding
upon any trustee thereof, any registered or beneficial holder of units (a “Unitholder”) or any
annuitant under a plan of which a Unitholder acts as a trustee or carrier, or any officers,
employees or agents of the REIT and resort shall not be had to, nor shall recourse or satisfaction
be sought from, any of the foregoing or the private property of any of the foregoing, and the
obligations of and rights against the REIT under this Lease shall be enforced against and recourse
hereunder shall be had only after judgment and only against, the right, title and interest of the
REIT from time to time in, and from the REIT’s revenue derived from the Project including without
limitation, the rents and other sums received or receivable from the Project and any consideration
received and receivable by the REIT from the sale, transfer, or conveyance of all or any part of
the REIT’s interest in the Project, property insurance and rental income insurance paid or
available to the REIT.

15.08 Notice — Any notice required or contemplated by any provision of this Lease shall be
given in writing and delivered either: (i) personally; or (ii) by prepaid courier service; and if
to the Landlord at the Landlord’s local office as specified in Item 1(a) of the Term Sheet, with a
copy to the Landlord’s head office address as specified in Item 1(b) of the Term Sheet and if to
the Tenant at the Leased Premises (whether or not the Tenant has departed from, vacated or
abandoned the same), together with a copy to the Indemnifier at the address specified in Item 11 of
the Term Sheet. Notwithstanding the provision of any statute or law relating thereto, service by
means of electronic mail of any notice required to be given in writing by either party hereto
pursuant to this Lease shall not constitute good and effective service.

Any notice shall be considered to have been given or made: (i) if delivered personally or by
prepaid courier, on the day of delivery. Either party may from time to time by notice in writing
to the other designate another address or addresses in Canada as the address to which notices are
to be sent.

If two or more Persons are named as, or bound to perform the obligations of, the Tenant hereunder,
notice given as herein provided to any one of the Persons constituting the Tenant or so bound shall
be deemed to be notice simultaneously to all Persons constituting the Tenant and to all Persons so
bound. Any notice given to the Indemnifier or the Tenant shall be deemed to have been given
simultaneously to the other of them and to all Persons bound by their obligations hereunder.

	 	 	 
	MORGUARD February 2005 — Net Office, Multi-Tenant (General Application)

	 	Page 27

 

 

15.09 Delegation of Authority — The Landlord’s Agent may act on behalf of the Landlord in
any manner provided for herein. The Tenant acknowledges that, if this Lease has been executed for
and on behalf of, in the name of and with the authority of the Landlord by the Landlord’s Agent,
the covenants and agreements of the Landlord are obligations of the Landlord and its successors and
assigns only and are not obligations personal to or enforceable against the Landlord’s Agent in its
own right. The Landlord’s Agent hereby covenants, warrants and represents to the Tenant that it
has the authority to bind the Landlord under this Lease.

15.10 Relationship of Parties — Nothing contained in this Lease shall create any
relationship between the parties hereto other than that of landlord and tenant and, if applicable,
indemnifier.

15.11 Governing Law — This Lease shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the laws of the province in which the Project is
situated and the laws of Canada applicable therein and shall be subject to the exclusive
jurisdiction of the courts of the province in which the Project is situated.

15.12 Amendment or Modification — No amendment, modification or supplement to this Lease
shall be valid or binding unless set out in writing and executed by the Landlord and the Tenant
with the same degree of formality as the execution of this Lease.

15.13 Legal and Administration Costs — The Tenant shall indemnify the Landlord against all
legal fees on a solicitor and client or substantial indemnity basis and disbursements incurred by
the Landlord or by the Landlord’s Agent in connection with the negotiation, preparation and
execution of any amendment, assignment, cancellation, approval or consent requested by the Tenant
in connection with this Lease, including the Landlord’s reasonable administration charges. All
such costs and charges shall be paid by the Tenant to the Landlord forthwith upon demand.

15.14 Construction — All of the provisions of this Lease are to be construed as covenants
and agreements. If any provision of this Lease is illegal or unenforceable, it shall be considered
separate and severable from the remaining provisions of this Lease, which shall remain in force and
be binding as though the provision had never been included. Any language or wording in this Lease
which has been struck out shall be deemed not to have ever been included herein and shall not be
considered in construing or interpreting any other provision of this Lease, nor shall there be any
implication that by the deletion of any language or wording, the parties hereto intended to state
the opposite of the struck out language or wording.

15.15 Captions and Headings — The captions and headings contained in this Lease are for
convenience of reference only and are not intended to limit, enlarge or otherwise affect the
interpretation of the Articles, Sections or parts hereof to which they apply.

15.16 Interpretation — In this Lease, “herein”, “hereof”, “hereunder”, “hereafter” and
similar expressions refer to this Lease and not to any particular Article, Section or other portion
thereof unless there is something in the subject matter or context inconsistent therewith.
Wherever necessary or appropriate in this Lease, the plural shall be interpreted as singular, the
masculine gender as feminine or neuter and vice versa; and when there are two or more parties bound
by the Tenant’s covenants herein contained, their obligations shall be joint and several. If the
Tenant is a partnership (other than a limited partnership), each Person who is presently a member
of such partnership and each Person who becomes a member of any successor partnership shall be and
continue to be liable jointly and severally for the performance of the obligations of this Lease,
whether or not such Person ceases to be a member of such partnership or successor partnership and
after the partnership ceases to exist.

15.17 Time of the Essence — Time shall be of the essence hereof and no extension or
variation of this Lease shall operate as a waiver of this provision.

15.18 Successors and Assigns — Subject to specific provisions contained in this Lease to
the contrary, this Lease shall enure to the benefit of and be binding upon the successors and
assigns of the Landlord and the heirs, executors and administrators and the permitted successors
and assigns of the Tenant.

15.19 Counterparts — This Lease may be executed in counterparts and the counterparts
together shall constitute an original.

15.20 Further Schedules — Any additional covenants, agreements and conditions forming part
of this Lease will be attached as Schedule E and the Landlord and the Tenant agrees with the other
to comply with the provisions of Schedule E. If an Indemnifier is a party hereto, the form of
Indemnity Agreement to be executed by the Indemnifier and the Landlord as a separate agreement will
be attached as Schedule F.

15.21 Independent Legal Advice — The Tenant and the Indemnifier each acknowledge that the
Landlord hereby advises each of the Tenant and the Indemnifier to obtain advice from independent
legal counsel prior to signing this Lease and/or the Indemnity Agreement. The Tenant and the

	 	 	 
	MORGUARD February 2005 — Net Office, Multi-Tenant (General Application)

	 	Page 28

 

 

Indemnifier further acknowledge that any information provided by the Landlord is not to be
construed as legal, tax or any other expert advice and the Tenant and the Indemnifier are cautioned
not to rely on any such information without seeking legal, tax or other expert advice.

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

15.22 No Offer — The Landlord will not be deemed to have made an offer to the Tenant by
furnishing an unexecuted copy of this Lease with particulars inserted. Notwithstanding that a
Security Deposit or payment of advance Rent is received by the Landlord when this Lease is received
by the Landlord for execution, no contractual or other right will exist between the Landlord and
the Tenant with respect to the Leased Premises until the Landlord, the Tenant and the Indemnifier,
if any, have executed and delivered this Lease and any required Indemnity Agreement.

15.23 Survival of Covenants and Indemnities — All obligations of the Landlord and the
Tenant which arise during the Term pursuant to this Lease and which have not been satisfied at the
end of the Term and all indemnities of the Landlord and the Tenant contained in this Lease shall
survive the expiration or other termination of this Lease.

15.24 Exculpatory Provisions — In all provisions of this Lease containing a release,
indemnity or other exculpatory language in favour of the Landlord or the Tenant, reference to the
Landlord or the Tenant includes reference also to the Landlord’s Agent and nominee (if any) and the
Tenant’s agent and nominee (if any) and any Person for whom any one or more of them is in law
responsible and the directors, officers and employees of the Landlord, the Landlord’s Agent and
nominee (if any) and the Tenant’s agent and nominee (if any) and any Person for whom they are in
law responsible (including the agents of any of them) while acting in the ordinary course of their
employment (collectively the “Released Persons”), it being understood and agreed that, for the
purposes of this Section 15.24, the Landlord or the Tenant are deemed to be acting as the agent or
trustee on behalf of and for the benefit of the Released Persons solely to the extent necessary for
the Released Persons to take the benefit of this Section 15.24.

15.25 Brokerage Commissions — The Tenant covenants that no act of the Tenant has given rise
nor shall give rise to any Claims against the Landlord for any brokerage commission, finder’s fee
or similar fee in respect of this Lease. The Tenant hereby indemnifies and agrees to hold the
Landlord harmless from any Claims for such commission or fees with respect to this Lease except any
which were directly contracted for by the Landlord. The Landlord hereby acknowledges that it is
solely responsible for and will pay all brokerage fees payable to Avison Young Commercial Real
Estate (Ontario) Inc. in respect of this lease transaction. The Landlord acknowledges and agrees
that the fee of Avison Young Commercial Real Estate (Ontario) Inc. has previously been agreed to in
writing between Avison Young Commercial Real Estate (Ontario) Inc. and Morguard Investments
Limited, as agent of the Landlord.

15.26 Covenants to be Performed at Landlord’s Option — Where any provision in this Lease
gives the Landlord the option of having the Landlord or the Tenant perform the covenants set out in
such provision, the Tenant shall perform such covenants unless the Tenant is otherwise directed by
way of written notice from the Landlord.

15.27 Radiation — Only if the Landlord believes on reasonable grounds that radiation is or
has been used or created by the Tenant or any Person permitted by the Tenant to be in the Leased
Premises shall this Section 15.27 apply to the Tenant.

	 	 	 
	MORGUARD February 2005 — Net Office, Multi-Tenant (General Application)

	 	Page 29

 

 

The Tenant agrees, if so requested by the Landlord, to conduct at its own expense a survey by an
accredited firm of consultants acceptable to the Landlord to determine the level of radiation in
the Leased Premises, and if such levels are in excess of those allowable under Environmental Laws
and set by the applicable regulatory authorities governing radiation, the Tenant agrees, at its own
cost and expense and on terms and conditions approved by the Landlord, to reduce the level of
radiation to a level allowable under Environmental Laws and set by such applicable regulatory
authorities.

IN WITNESS WHEREOF the parties hereto have executed this Lease as of the date first set forth
above.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	LANDLORD:
	 	 	 	 	 	 	MORGUARD REAL ESTATE INVESTMENT TRUST by its
	 	 	 	 	 	 	agent MORGUARD INVESTMENTS LIMITED
	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name: John Borrelli
	 

	 	 	 	 	 	 	 	Title: Authorized Signatory
      c/s
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name: Tullio Capulli
	 

	 	 	 	 	 	 	 	Title: Authorized Signatory
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	We have authority to bind the corporation
which has authority to bind the Trust
	 
	WITNESS to signature of Tenant:	 	 	 	TENANT:
	 	 	 	 	 	 	ALLIANCE DATA L.P. by its general partner ENLOGIX INC.
	 
	signature:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	print name:

	 	 	 	 	 	 	 	Title:
                                         c/s
	 

	 	 	 	 	 	 	 	 
	 
	address:

	 	 

	 	 	 	By:	 	 
	 

	 	 

	 	 	 	 	 	Name:
	 

	 	 	 	 	 	 	 	Title:
	 

	 	 	 	 	 	 	 	 
	occupation:	 	 	 	 	 	I/We have authority to bind the corporation which has authority to bind the partnership
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	WITNESS to signature of Indemnifier:	 	 	 	INDEMNIFIER:
	 	 	 	 	 	 	ALLIANCE DATA SYSTEMS, CORP.
	 
	 	 	 	 	 	 	 	 
	signature:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	print name:

	 	 	 	 	 	 	 	Title:                     
                     c/s
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	address:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 

	 	 

	 	 	 	 	 	Title:
	occupation:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	I/We have authority to bind the corporation

	 	 	 
	MORGUARD February 2005 — Net Office, Multi-Tenant (General Application)

	 	Page 30

 

 

SCHEDULE A

PLAN SHOWING LEASED PREMISES

	 	 	 
	MORGUARD February 2005 — Net Office, Multi-Tenant (General Application)

	 	Page A-1

 

 

SCHEDULE A1

LEGAL DESCRIPTION OF LAND

ALL AND SINGULAR that certain parcel or tract of land and premises situate, lying and being in the
City of North York, in the Municipality of Metropolitan Toronto and being composed of part of
Blocks G and H, Registered Plan 7612 York, in the said City of Toronto designated as Part 1 on Plan
66R-21792.

Confirmed by Plan BA-1802, registered as Instrument No. 788457 North York.

The said land is registered in the Land Registry Office for the Land Titles Division of
Metropolitan Toronto as P.I.N. 10085-0187 (LT).

Municipally known as 200 Yorkland Boulevard, North York, Ontario .

	 	 	 
	MORGUARD February 2005 — Net Office, Multi-Tenant (General Application)

	 	Page A1-1

 

 

SCHEDULE A2

ADDITIONAL LEASED PREMISES

	 	 	 
	MORGUARD February 2005 — Net Office, Multi-Tenant (General Application)

	 	Page A2-1

 

 

SCHEDULE B

DEFINITIONS

“Article”, “Item”, “Schedule”, “Section” and “Subsection” mean the specified article, item,
schedule, section or subsection, as the case may be, of this Lease.

“Basic Rent” means the amount set out in Item 8 of the Term Sheet payable by the Tenant to the
Landlord in respect of each year of the Term.

“Bio-Medical Waste” shall mean and include the following:

	(a)	(i)	 	surgical waste including all materials discarded from surgical procedures, including but
not limited to, disposable gowns, soiled dressings, sponges, casts, lavage tubes, drainage
sets, underpads and surgical gloves;
	 
	 	(ii)	 	pathological waste including all human tissues and anatomical parts which emanate from
surgery, obstetrical procedures, autopsy and laboratory;
	 
	 	(iii)	 	biological waste including blood and blood products, excretions, exudates, secretions,
suctionings and other body fluids including solid/liquid waste from renal dialysis;
	 
	 	(iv)	 	isolation waste including all waste emanating from the care or treatment of a patient
on any type of isolation or precaution except reverse (protective) isolation;
	 
	 	(v)	 	cultures and stocks of etiologic agents and associated biologicals including, without
limitation, specimen cultures, cultures and stocks of etiologic agents, wastes from
production of biologicals and serums, and discarded live and attenuated vaccines;
	 
	 	(vi)	 	laboratory waste which has come in contact with pathogenic organisms, including but not
limited to, culture dishes, devices used to transfer, inoculate and mix cultures, paper and
cloth which has come in contact with specimens or cultures;
	 
	 	(vii)	 	animal carcasses exposed to pathogens in research, their bedding and other waste from
such animals;
	 
	 	(viii)	 	sharps, including any discarded article that may cause punctures or cuts, including
but not limited to, needles, IV tubing with needles attached, scalpel blades, glassware, and
syringes that have been removed from their original sterile containers; and
	 
	 	(ix)	 	any other wastes identified as infectious or similar wastes in any other applicable
federal, provincial or municipal laws, regulations and guidelines; and

	(b)	 	“Chemotherapy Waste” (also known as antineoplastic or cytotoxic waste) means and includes
discarded items, including but not limited to, masks, gloves, gowns, empty IV tubing bags,
vials, syringes and other contaminated materials which have been contaminated by
chemotherapeutic drugs or antineoplastic agents; and
	 
	(c)	 	any waste defined as bio-medical waste under any applicable law or regulation.

“Building” means the buildings, structures and improvements from time to time during the Term
erected in, upon or under the Land municipally identified in Item 3 of the Term Sheet and all
alterations and additions thereto and replacements thereof.

“Business Day” means any day which is not a Saturday, Sunday or a statutory holiday observed in the
province in which the Project is situated.

“Capital Tax” means the applicable amount of any tax or taxes including but not limited to Large
Corporations Tax payable based upon or computed by reference to the paid-up capital or place of
business of the Landlord as determined for the purposes of such tax or taxes; provided that for the
purposes hereof, the “applicable amount” of such tax or taxes shall mean the amount thereof that
would be payable if the Project were the only establishment of the Landlord in the jurisdiction of
the taxing authority or if any other establishment of the Landlord therein were located outside
that jurisdiction.

“Claims” means claims, losses, actions, suits, proceedings, causes of action, demands, damages
(direct, indirect, consequential or otherwise), judgments, executions, liabilities,
responsibilities, costs, charges, payments and expenses including, without limitation, any
professional, consultant and legal fees on a solicitor and client or substantial indemnity basis
and any associated disbursements.

“Collateral” has the meaning ascribed in Section 15.25.

	 	 	 
	MORGUARD February 2005 — Net Office, Multi-Tenant (General Application)

	 	Page B-1

 

 

“Commencement Date” means the first day of the Term as specified in Item 7(a) of the Term Sheet.

“Common Elements” means the areas, facilities, utilities, improvements, equipment and installations
(collectively, “elements”) in the Project that, from time to time, are not intended to be leased to
tenants of the Project (including, without limitation, elements within rentable premises that are
intended for the benefit of tenants of the Project and their invitees and employees) or are
designated from time to time as Common Elements by the Landlord and includes access roads,
driveways and parking areas and facilities.

“Consultants” means any reference in this Lease to the Landlord’s accountant, auditor, architect,
surveyor or other consultant shall be deemed to be such independent and duly qualified consultant
appointed by the Landlord in its absolute discretion for the purposes of this Lease or of any
provision hereof; and they will act in accordance with this Lease and the principles and standards
of their professions. In determining any cost allocation the Landlord may rely on, and the parties
shall be bound by, the decision or determination of the Landlord’s Consultants, absent manifest
error.

“Environmental Laws” shall include any domestic and foreign federal, provincial, municipal or local
laws, statutes, regulations, ordinances, guidelines, policies, judge made laws or common laws and
any orders of a court or governmental authority, relating in any way to the natural or human
environment (including land, surface water, groundwater, and real, personal, moveable and
immoveable property), public or occupational health and safety, and the manufacture, importation,
handling, use, reuse, recycling, transportation, storage, disposal, elimination and treatment of a
substance, hazardous or otherwise.

“Event of Default” means any of the following events:

	(a)	 	all or any part of the Rent hereby reserved is not paid within 5 Business Days of written
notice of when due;
	 
	(b)	 	the Term or any substantial portion of goods, merchandise, stock in trade, chattels or
equipment of the Tenant or any Indemnifier is or are seized or taken in execution or in
attachment or if a creditor takes possession thereof and such seizure, taking or taking
possession is not bona fide defended or set aside within 10 days thereof;
	 
	(c)	 	the Tenant or any Indemnifier takes any steps in furtherance of or suffers any order to be
made for its winding-up (other than in connection with a bona fide reorganization) or other
termination of its corporate existence or becomes insolvent or commits an act of bankruptcy or
becomes bankrupt or takes the benefit of any statute that may be in force for bankrupt or
insolvent debtors or becomes involved in voluntary (other than in connection with a bona fide
reorganization) or involuntary winding-up proceedings or if a receiver or receiver/manager
shall be appointed for all or any part of the business, property, affairs or revenues of the
Tenant or such Indemnifier and any such order, proceedings or appointment is not bona fide
defended or set aside within 10 days thereof;
	 
	(d)	 	the Tenant abandons the Leased Premises;
	 
	(e)	 	a report or statement required from the Tenant under this Lease is materially false or
misleading except if it results from or due to clerical or demonstrable error or as a result
of the fraud or negligence of: (i) an employee of the Tenant; or (ii) the Person or an
employee of the Person preparing any such report or statement;
	 
	(f)	 	any policy of insurance taken out by either the Landlord or the Tenant with respect to the
Project shall be cancelled by reason of any act or omission of the Tenant other than its use
of the Leased Premises for the purposes permitted pursuant to Item 9 of the Term Sheet;
	 
	(g)	 	the Tenant enters into a Transfer except in compliance with the provisions of this Lease; or
	 
	(h)	 	the Tenant or any Indemnifier fails to observe, perform and keep each and every covenant,
agreement, provision, stipulation and condition herein contained to be observed, performed and
kept by the Tenant or the Indemnifier, including observance and performance of the rules and
regulations, (other than payment of Rent) and persists in the failure after 15 days’ written
notice by the Landlord requiring the Tenant to remedy, correct, desist or comply (or if any
breach would reasonably require more than 15 days to rectify, unless the Tenant commences
rectification within the 15 day notice period and thereafter promptly, effectively and
continuously proceeds with the rectification of the breach).

“Expropriated”, “Expropriating” and “Expropriation” have the meanings ascribed in Section 10.06.

	 	 	 
	MORGUARD February 2005 — Net Office, Multi-Tenant (General Application)

	 	Page B-2

 

 

“Fiscal Year” means a period, from time to time determined by the Landlord, all or part of which
falls within the Term, at the end of which the Landlord’s accounts in respect of the Project are
balanced for auditing or bookkeeping purposes. Such period shall be 12 months except when the
Landlord designates a new date upon which the fiscal year shall end.

“GST” means goods and services tax, being that tax payable pursuant to Parts VIII and IX of the
Excise Tax Act, as amended and re-enacted from time to time, and other like taxes levied from time
to time and includes any blended sales tax which combines GST and provincial sales tax.

“Indemnifier” means the Person, if any, so identified in the Term Sheet and who has signed this
Lease as Indemnifier.

“Indemnity Agreement” means the agreement attached as Schedule F.

“Land” means those lands legally described in Schedule A1 as same may be expanded or contracted
from time to time.

“Landlord’s Agent” means the Person retained by the Landlord from time to time to operate or manage
the Project which, as of the date of this Lease, is Morguard Investments Limited.

“Lease” means this lease, the Term Sheet, and all Schedules attached hereto which are referred to
in this lease and every properly executed instrument which by its terms amends, modifies or
supplements this lease.

“Leased Premises” means those premises in the Building which are described and identified in Item 4
of the Term Sheet and which are marked in a distinguishing manner on the plan attached as Schedule
A.

“Leasehold Improvements” means:

	(a)	 	all improvements, fixtures, installations, alterations and additions from time to time made,
erected or installed to or in the Leased Premises, in addition to, beyond or replacing the
base building standards, including all partitions however affixed (including moveable and
demountable partitions), millwork and affixed wall units, internal stairways, doors, hardware,
light fixtures, carpeting and other applied floor finishes, and heating, ventilating and air
conditioning equipment and other building services not forming part of the Landlord’s base
building equipment and services; and

	(b)	 	alterations, improvements and equipment made or installed for the exclusive benefit of the
Tenant elsewhere in the Project;

in either case whether or not installed by or on behalf of the Tenant and whether or not installed
during the Term including, without limitation, all fixtures (except trade fixtures, furniture and
equipment) in the Leased Premises.

“Mortgagee” has the meaning ascribed in Section 13.04.

“Operating Costs” means in respect of any Fiscal Year the total of all actual and bona fide costs,
expenses and amounts, incurred or accrued in that Fiscal Year for or with respect to ownership,
management, operation, maintenance, repair, upkeep, insurance, supervision, reasonable decoration,
cleaning and upgrading of the Project to maintain same in substantially the same condition which
exists at the Commencement Date and the determination and allocation of such costs, expenses and
amounts, whether incurred or accrued by or on behalf of the Landlord or by or on behalf of the
Landlord’s Agent including, without limitation and without duplication and profit:

A. Inclusions — if provided by the Landlord (subject to certain exclusions and deductions
as hereinafter set out):

	(a)	 	the cost of providing and maintaining security, landscaping, gardening and snow and refuse
removal;
	 
	(b)	 	the cost of heating, air conditioning and ventilating the Building and investigating and
remedying air quality and moisture issues and issues related thereto, if any;
	 
	(c)	 	the cost of providing hot and cold or tempered water, electricity (including lighting) and
all other utilities to the Common Elements (excluding, for greater certainty, premises leased
or intended to be leased to tenants of the Project);
	 
	(d)	 	the cost of providing janitor, window cleaning and general cleaning services including
supplies to all parts of the Project including all premises leased to tenants of the Project;

	 	 	 
	MORGUARD February 2005 — Net Office, Multi-Tenant (General Application)

	 	Page B-3

 

 

	(e)	 	the cost of replacement of building standard fluorescent tubes, light bulbs and ballasts in
the Leased Premises and the costs of cleaning, maintaining and servicing of the electrical
light fixtures in the Leased Premises if not separately invoiced pursuant to Section 7.02;
	 
	(f)	 	the cost of all insurance taken out and maintained by the Landlord under Article 9.00 and the
cost of any deductible amount paid by the Landlord in connection with a claim under its
insurance;
	 
	(g)	 	the rental or lease cost of all rented or leased equipment acquired for the operation or
maintenance of the Project;
	 
	(h)	 	accounting costs incurred in connection with the Project including computations required for
the imposition of charges to tenants and audit fees incurred for the determination of any
costs hereunder;
	 
	(i)	 	the cost of all equipment acquired for operation or maintenance of the Project if expensed
fully in the Fiscal Year in which such equipment is acquired in accordance with generally
accepted accounting principles;
	 
	(j)	 	if expensed fully in the Fiscal Year in which the expense is incurred in accordance with
generally accepted accounting principles, the cost of any improvement, replacement, repair or
alteration whether with respect to buildings, improvements, equipment, fixtures or otherwise
and whether on-site or off-site which, in the opinion of the Landlord, is necessary to reduce
or limit increases in Operating Costs or is required by the Landlord’s insurance carriers or
by any changes subsequent to the Commencement Date in the laws, rules, regulations or orders
of any governmental authority having jurisdiction, including those necessary to comply with
energy conservation, pollution and environmental control standards and the costs of any
procedures required with respect thereto;
	 
	(k)	 	if expensed fully in the Fiscal Year in which the expense is incurred in accordance with
generally accepted accounting principles, the cost of repairs and replacements to or in
respect of the Project including those resulting from normal wear and tear and otherwise and
including those necessary with respect to the window coverings, decorations, elevators and
escalators (if any), roof or any Parking Facilities;
	 
	(l)	 	if expensed fully in the Fiscal Year in which the expense is incurred in accordance with
generally accepted accounting principles, the cost of repairs, replacements and improvements
to systems in the Project including, without limitation, the heating, ventilating, air
conditioning and energy-saving and security systems and devices;
	 
	(m)	 	at the Landlord’s election (such election to be evidenced by the method of calculating
Operating Costs for each Fiscal Year), either amortization, in an amount determined by the
Landlord’s accountant in accordance with generally accepted accounting principles, of the cost
(whether incurred before or during the Term and whether or not incurred by the party
constituting the Landlord at any time or its predecessor in title or interest) of any repair,
replacement, reasonable decoration or improvement of the Project not included within Operating
Costs for the Fiscal Year in which the expenditure was incurred in accordance with subsections
(i), (j), (l) and (m) above and of all equipment required for the operation and maintenance of
the Project not included within Operating Costs for the Fiscal Year in which the expenditure
occurred in accordance with Subsections (i), (j), (l) and (m) above, or depreciation in an
amount determined by the Landlord’s accountant based on the cost (whether incurred before or
during the Term and whether or not incurred by the party constituting the Landlord at any time
or its predecessor in title or interest) of any of those items which are capital in nature as
determined in accordance with generally accepted accounting principles together with, in each
case, an amount equal to interest at the Prime Rate plus 1.5% per annum on the undepreciated
or unamortized amount thereof;
	 
	(n)	 	the amount of all salaries, wages and fringe benefits customarily paid to or for the benefit
of employees and others engaged either full-time or part-time in the operation or maintenance
of the Project provided that to the extent such personnel are not engaged full time to perform
such operations, then only such portion of their salaries, wages and fringe benefits as are
attributable to such performance, but in any event excluding corporate office personnel, save
for corporate office staff to the extent such staff are providing accounting, computer and
other similar service functions for the Building;
	 
	(o)	 	amounts paid for service contracts with independent contractors;
	 
	(p)	 	the cost of energy audits, conservation studies and other measures taken to conserve energy
or reduce costs or liability;
	 
	(q)	 	the cost of renting, operating and maintaining Project signs and providing directional
signage;

	 	 	 
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	 	Page B-4

 

 

	(r)	 	all other expenses of every nature incurred in connection with the maintenance and operation
of the Project;
	 
	(s)	 	the cost of direct supervision attributable to any of the above;
	 
	(t)	 	the fair rental value of space not to exceed 1,000 square feet in the Building which would
otherwise be rentable occupied by the Landlord, its manager or personnel in connection with
the Services; and
	 
	(u)	 	any Capital Tax imposed upon the Landlord; provided that if the Capital Tax payable by the
Landlord in this connection is for a period not coinciding with the Fiscal Year, the amount of
the Capital Tax included in Operating Costs in each Fiscal Year shall be that amount payable
by the Landlord accruing during the Fiscal Year, provided that so long as the Landlord is not
required to pay Capital Tax, the Tenant shall not be required to pay Capital Tax;

plus a management fee equal to that amount paid to the Landlord’s Agent in respect of management of
the Project or any part thereof or the Landlord’s reasonable charges in lieu thereof if the
Landlord elects to self manage the Project or any part thereof, which management fee in either case
shall be in keeping with the industry standard.

B. Exclusions — Operating Costs shall exclude, without duplication and without limiting the
generality of the foregoing:

(a) the cost of arranging financing and any and all interest on debt and the capital retirement
of debt of the Landlord;

(b) major structural repairs;

(c) costs determined by the Landlord from time to time to be fairly allocable to the correction
of construction faults or maladjustments in operating equipment, but only to the extent that
such costs are recovered from the contractor or others responsible;

(d) any ground rent payable by the Landlord in respect of a lease of the Land or part thereof;
and

(e) tenant improvement allowances, advertising, legal expenses, inducements, leasing commissions
and leasing costs in connection with the leasing of the Building;

(f) any amount payable due to the Landlord’s non-compliance with any law, bylaw, regulation or
act;

(g) any cost or penalty incurred as a result of the Landlord’s default respecting its obligations
in respect of any mortgage or other obligations affecting the Building or the Lands;

(h) capital costs that are for the upgrading, improving, or repairing the structure of the
Building, including but not limited to, the roof structure, load bearing walls, windows, floor
slabs and masonry walls, the columns of the ceilings, the foundation, the exterior walls of
the Building, and the exterior parking structure;

(i) the cost of investigating, testing, monitoring, removing, enclosing, encapsulating or abating
any Pollutants which are in or about the Project or any part thereof or which have entered the
environment from the Project but for greater certainty, this shall not exclude the Tenant from
complying with its obligations pursuant to Section 9.05 of this Lease;

(j) all amounts which would otherwise be included in Operating Costs and are recovered or
recoverable by the Landlord from third parties;

(k) bad debts and any costs incurred in the collection of such bad debts, including legal costs
associated with the same;

(l) all costs and expenses which are otherwise expressed as the Landlord’s responsibility under
this Lease;

(m) the amount of GST paid or payable by the Landlord on the purchase of goods and services
included in Operating Costs which may be available to the Landlord as a credit in determining
the Landlord’s net tax liability or refund on account of GST;

(n) Taxes and amounts excluded from the definition of Taxes; and

(o) costs of repairing damage or destruction arising from a peril or cause insured against by the
Landlord or required to be insured against by the Landlord.

	 	 	 
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C. Deductions — There shall be deducted from Operating Costs:

	(a)	 	the proceeds of insurance recovered by the Landlord applicable to damage, the cost of repair
of which was included in the calculation of Operating Costs paid by the Tenant; and
	 
	(b)	 	amounts recovered or recoverable as a result of direct charges to the Tenant and other
tenants to the extent that the cost thereof was included in the calculation of Operating
Costs.

“Parking Facilities” means that part of the Project containing parking facilities with vehicular
access thereto including, without limitation, parking spaces, ramps, circulation space, vehicular
entrances and exits, the structural elements thereof and services, facilities and systems contained
in or servicing such parking facilities.

“Person” means an individual, partnership, firm, corporate entity, trust, government or any
department or agency thereof or any combination of them.

“Pollutants” means any substance which is regulated by or which would be considered a contaminant,
pollutant, waste or deleterious or hazardous substance under Environmental Laws, or which is or may
be hazardous to persons or property or detrimentally affect property value and includes, without
limiting in any way the generality of the foregoing:

	(a)	 	radioactive materials;
	 
	(b)	 	explosives;
	 
	(c)	 	any substance that, if added to any air, land and/or water, would degrade or alter or form
part of a process of degradation or alteration of the quality of that air, land and/or water,
to the extent that it is detrimental to its use by human beings or by any animal or plant;
	 
	(d)	 	any solid, liquid, gas, microorganism, mould, sound, vibration, ray, heat, radiation, odour
or combinations of any of them that is likely to alter the quality of the environment
(including air, land and water) in any way or the presence of which in the environment is
prohibited by regulation or is likely to affect the life, health, safety, welfare or comfort
of human beings or animals or to cause damage to or otherwise impair the quality of soil,
vegetation, wildlife or property;
	 
	(e)	 	toxic substances;
	 
	(f)	 	substances declared to be hazardous or toxic under any law or regulation now or hereafter
enacted or promulgated by any governmental or municipal authority having jurisdiction over the
Landlord, the Tenant, the Leased Premises or the Project of which the Leased Premises form a
part;
	 
	(g)	 	any substance, the use or transportation of which or the release of which into the
environment is prohibited, regulated, controlled or licensed under Environmental Laws;
	 
	(h)	 	anything contaminated by any Pollutants; and
	 
	(i)	 	Bio-Medical Waste.

“Prime Rate” means the rate of interest per annum established from time to time by The Bank of Nova
Scotia (or such other bank being one of the 5 largest Canadian chartered banks measured by assets
as the Landlord may designate from time to time) at its head office in Toronto, Ontario as the
reference rate of interest to determine interest rates it will charge on Canadian dollar loans to
its Canadian customers and which it refers to as its “prime rate”.

“Project” means the Land and Building and includes, without limitation, all Common Elements.

“Property Tax Year” means the 12 month period set by the municipal taxing authorities as the period
for and over which Property Taxes and, where applicable, business taxes are assessed, charged and
payable by the owner or occupant of the Project or Leased Premises respectively, whether on a
calendar or fiscal year or any other basis.

“Property Taxes” means all taxes, rates, levies, duties and assessments whatsoever whether
municipal, school, provincial, parliamentary or otherwise levied, charged, imposed or assessed
against the Project or upon the Landlord in respect thereof or from time to time levied, charged,
imposed or assessed in the future in lieu thereof or in addition thereto, including, without
limitation, those levied, charged, imposed or assessed for education, school and local improvements
and all business taxes, if any, from time to time payable by the Landlord or levied against the
Landlord on account of its ownership of, or interest in, or the operation of the Project; and all
costs and expenses incurred by the Landlord in good faith in contesting, resisting or appealing any
such taxes, rates, duties, levies or assessments including, without limitation, legal fees on a
solicitor and client or

	 	 	 
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substantial indemnity basis and other professional fees and interest and penalties on deferred
payments incurred as a result of an appeal, but excluding income or profits taxes upon the income
of the Landlord. If any portion of the Project is assessed or taxed other than at the prevailing
commercial assessment rates and mill rates due to the occupancy of any tenants or the nature of any
tenant’s operation, then the amount of such taxes, rates, levies, duties or assessments shall be
adjusted to be an amount equal to the amount which would have been incurred had such portion of the
Project been assessed and taxed at the prevailing commercial assessment rates and mill rates
throughout the entire period for which the calculation is being made. Any tax levied on commercial
property or other like tax based on the area or use of the Project or the Leased Premises or any
tax on rent imposed in lieu of the foregoing taxes are included herein. Property Taxes shall not
include any Business Taxes payable by the Tenant pursuant to Section 8.02 and any similar Taxes
levied or assessed separately against other rentable premises in the Project; the Landlord’s
corporate, inheritance, estate, succession and excess profits taxes and any other tax, rate, levy,
duty or assessment of a personal nature; and any penalties or carrying charges relating to the late
payment by the Landlord of any Property Tax or any instalments thereof excepting any charges
incurred as a result of an appeal.

“Rent” means the aggregate of all amounts payable by the Tenant to the Landlord under this Lease.
Provided that any and all amounts so payable which are collectible by the Landlord as agent of a
taxing authority and which are Taxes imposed by that authority on the Tenant are included in Rent
so as to determine the Landlord’s rights and remedies in the case of delay or failure to pay the
same notwithstanding that the same do not accrue to the Landlord as rent hereunder.

“Rentable Area” means the area of the Leased Premises, the Building or any part thereof as
determined by the Landlord and which may be adjusted from time to time to give effect to any
structural or functional change and any change in the leasing pattern in the Building, and which
shall be calculated in accordance with the BOMA ANSI standards specified in Item 5 of the Term
Sheet (except to the extent altered by this definition) as follows:

“Security Deposit” has the meaning ascribed in Section 4.02.

“Security Interest” has the meaning ascribed in Section 15.25.

“Service(s)” means those activities, personnel, facilities, systems and supplies required for the
complete reasonable decoration, repair, administration, replacement, maintenance, improvement and
operation of the Project.

“Taxes” means comprehensively all various classes and types of taxes, rates, levies, fees, duties,
charges and assessments from whatever source arising and levied, rated, imposed, assessed,
conferred or chargeable against the Project, the Leased Premises or in respect of the occupancy and
activity carried on therein or on account of the Landlord’s ownership of or interest in the Project
or on account of rents payable with respect therefor and includes Property Taxes, business taxes or
any like tax or other amount levied or assessed in lieu of, in addition to, or in substitution
therefor, whether or not similar to or of the foregoing character and whether or not in existence
on the date hereof, and all costs and expenses incurred by the Landlord in good faith in
contesting, resisting or appealing any such taxes, rates, duties, levies or assessments including,
without limitation, legal fees on a solicitor and client or substantial indemnity basis and other
professional fees and interest and penalties on deferred payments, but excluding income or profits
taxes upon the income of the Landlord, the Landlord’s corporate, inheritance, estate, succession
and excess profits taxes and any other tax, rate, levy, duty or assessment of a personal nature;
and any penalties or carrying charges relating to the late payment by the Landlord of any Tax or
any instalments thereof excepting any charges incurred as a result of an appeal.

“Tenant’s Occupancy Costs” means for each Fiscal Year the Tenant’s Proportionate Share of the
Operating Costs and the Tenant’s Proportionate Share of Taxes, in each case for that Fiscal Year.

“Tenant’s Proportionate Share” means that proportion that the Rentable Area of the Leased Premises
bears to the Total Rentable Area of the Building.

“Term” means the period of time set out in Item 7 of the Term Sheet unless sooner terminated.

“Term Sheet” means the pages identified as Term Sheet attached to this Lease; and all information
and particulars contained therein shall form part of this Lease.

“Total Rentable Area of the Building” means the total Rentable Area of the Building located at or
above grade level.

“Transfer” means:

	(a)	 	an assignment, sublease, licensing or other disposition by the Tenant of this Lease or any
interest therein or any interest in the Leased Premises (whether or not by operation of law)
or in a partnership that is the Tenant under this Lease, or a mortgage or charge (floating or

	 	 	 
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	 	 	otherwise) or other encumbrance of or upon this Lease by the Tenant, except a Transfer that
occurs on the death of the Transferor;
	 
	(b)	 	a parting with or sharing of possession of all or part of the Leased Premises; and
	 
	(c)	 	a transfer or issue by sale, assignment, bequest, inheritance, operation of law or other
disposition, or by subscription, of all or part of the corporate shares of the Tenant which
results in a change in the effective voting control of the Tenant (unless the Tenant is a
corporation whose shares are traded on a stock exchange in Canada or the United States of
America or is a subsidiary of such a corporation).

“Transferor” and “Transferee” have meanings corresponding to the definition of “Transfer”. In the
case of a Transfer described in item (c) of the definition of Transfer, the Transferor is the
Person that has or would have effective voting control before the Transfer and the Transferee is
the Person that
has or would have effective voting control after the Transfer. The singular and plural forms of
defined words and phrases shall have corresponding meanings.

	 	 	 
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SCHEDULE C

RULES AND REGULATIONS

	1.	 	Definition — In these rules and regulations, “Tenant” includes the employees,
servants, agents, invitees, subtenants and licensees of the Tenant and others over whom the
Tenant can reasonably be expected to exercise its control.
	 
	2.	 	Common Elements — The Landlord reserves the right to regulate the use of the Common
Elements by the Tenant and by persons making deliveries to the Tenant.
	 
	3.	 	Smoking — Smoking is not permitted in the Common Elements, except as may be otherwise
designated. The Landlord shall have the right, in its sole discretion, to determine whether
any designated smoking area shall be established, and the size and location of any such area.
	 
	4.	 	Obstructions — The sidewalks, driveways, entrances, vestibules, passages, corridors,
halls, elevators and stairways shall not be encumbered or obstructed by the Tenant or be used
by it for any purpose other than for entrance to and exit from the Leased Premises.
	 
	5.	 	Deliveries — The Tenant shall not permit the parking of delivery vehicles so as to
interfere with the use of any driveway, walkway, parking area or other Common Elements. The
Tenant shall ensure that deliveries of materials and supplies to the Leased Premises are made
through such entrances, elevators and corridors and at such times as may from time to time be
designated by the Landlord and shall promptly pay or cause to be paid to the Landlord the cost
of repairing any damage in or to the Building caused by any person making such deliveries.
The Landlord reserves the right to remove at the expense and risk of the owner any vehicle not
using designated “vehicle standing” areas.
	 
	6.	 	Security — The Landlord may from time to time adopt appropriate systems and
procedures for the security and safety of the Building including restricting access during
non-business hours and the Tenant shall comply with the Landlord’s reasonable requirements
relating thereto.
	 
	7.	 	Locks — No additional locks or bolts of any kind shall be placed by the Tenant upon
any of the doors or windows of the Leased Premises, nor shall any changes whatsoever be made
to existing locks or the mechanics thereof except by the Landlord at its option. The Tenant
shall not permit any duplicate keys to be made, but additional keys as reasonably required
shall be supplied by the Landlord when requested by the Tenant in writing and at the Tenant’s
expense. Upon termination of this Lease, the Tenant shall surrender to the Landlord all keys
to the Leased Premises and any other parts of the Building together with any parking passes or
other devices permitting entry.
	 
	8.	 	Antennae — The Tenant shall not mount or place an antenna or aerial of any nature on
the exterior of the Leased Premises or Building except as otherwise provided in Schedule E and
Schedule J of this Lease.
	 
	9.	 	Garbage — The handling and disposal of garbage shall comply with arrangements
prescribed by the Landlord from time to time. No disproportionate or abnormal quantity of
waste material shall be allowed to accumulate in the Leased Premises and the cost of removal
or clearing of quantities in excess of such normally provided service may be charged to the
Tenant.
	 
	10.	 	Repairs, Alterations and Improvements — The Tenant shall carry out repairs,
maintenance, alterations and improvements in the Leased Premises only during times agreed to
in advance by the Landlord and in a manner which will not materially interfere with the rights
of other tenants in the Building.
	 
	11.	 	Maintenance — The Tenant shall provide adequate facilities and means to prevent the
soiling of walls, floors and carpets in and abutting the Leased Premises whether by shoes,
overshoes, any acts or omissions of the Tenant or otherwise.
	 
	12.	 	Installations and Wiring — The Tenant shall not mark, paint, drill into or in any way
deface the walls, ceilings, partitions, floors or other parts of the Leased Premises and the
Building except with the prior written consent of the Landlord and as it may direct. If the
Tenant desires electrical or communications connections, the Landlord reserves the right to
direct qualified persons as to where and how the wires should be introduced, and without such
directions, no boring or cutting for wires will be permitted. No gas pipe or electric wire
will be permitted which has not been ordered or authorized in writing by the Landlord.
	 
	13.	 	Heating, Air Conditioning and Plumbing Systems — The Tenant shall not attempt
any repairs, alterations or modifications to the heating, air conditioning or plumbing
systems.

	 	 	 
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	14.	 	Water Fixtures — The Tenant shall not use the plumbing facilities for any other
purpose than that for which they are constructed, and no foreign substance of any kind shall
be thrown therein, and the Tenant shall pay the cost of any breakage, stoppage or damage
resulting from a violation of this provision.
	 
	15.	 	Personal Use of Leased Premises — The Leased Premises shall not be used for
residential, lodging or sleeping purposes or for the storage of personal effects or property
not required for business purposes as permitted under this Lease.
	 
	16.	 	Solicitations — The Landlord reserves the right to restrict or prohibit canvassing,
soliciting or peddling in the Building.
	 
	17.	 	Heavy Articles — The Tenant shall not, in the Leased Premises or the Building, bring
in, take out, position, construct, install or move anything liable to injure or destroy any
part of the Building including, without limiting the generality of the foregoing, any safe,
business machinery or other heavy machinery or equipment without the prior written consent of
the Landlord, such consent not to be unreasonably withheld. In giving such consent, the
Landlord shall have the right, acting reasonably, to prescribe the permitted weight and the
position thereof, and the use and design of planks, skids or platforms required to distribute
the weight thereof. All damage done to the Building by moving or using any such heavy
equipment or machinery shall be repaired at the expense of the Tenant. The moving of all
heavy equipment or other machinery shall occur only by prior arrangement with the Landlord.
	 
	18.	 	Bicycles, Animals — The Tenant shall not bring any animals, except for guide dogs,
into the Building and shall not permit bicycles or other vehicles inside or on the sidewalks
outside the Building except in areas designated from time to time by the Landlord for such
purposes.
	 
	19.	 	Furniture and Equipment — The Tenant shall ensure that furniture, equipment and
fixtures being moved into or out of the Leased Premises are moved through such entrances,
elevators and corridors and at such times as may from time to time be designated by the
Landlord and shall promptly pay or cause to be paid to the Landlord the cost of repairing any
damage in the Building caused thereby.
	 
	20.	 	Heating / Cooling — The Tenant shall not use any means of heating or cooling the
Leased Premises other than that provided by or specifically otherwise permitted in writing by
the Landlord.
	 
	21.	 	Undue Electrical Loads, Heat, Vibration — No material or equipment which could cause
undue loads on electrical circuits or undue vibration, heat or noise shall be brought into the
Building or used therein by or on behalf of the Tenant and no machinery or tools of any kind
shall be affixed to or used in the Leased Premises without the prior written consent of the
Landlord.
	 
	22.	 	Fire Regulations — No Tenant shall do or permit anything to be done in the Leased
Premises or bring or keep anything therein which will in any way increase the risk of fire, or
obstruct or interfere with the rights of other tenants, or violate or act at variance with the
laws relating to fires or with the regulations of the fire department or the board of health.
The Tenant shall cooperate in any fire drills and shall participate in all fire prevention or
safety programs designated by the Landlord.
	 
	23.	 	Flammable Materials — No flammable oils or other flammable, dangerous or explosive
materials shall be kept or permitted to be kept in the Leased Premises except in compliance
with all applicable laws, by-laws and regulations pertaining to same.
	 
	24.	 	Food and Beverages — Only persons approved from time to time by the Landlord may
prepare, solicit orders for, sell, serve or distribute foods or beverages in the Building or
use the elevators, corridors or other Common Elements for any such purpose. The Tenant shall
not permit in the Leased Premises the use of equipment for the preparation, serving, sale,
distribution or dispensing of food and beverages except with the prior written consent of the
Landlord and in accordance with arrangements approved by the Landlord. Notwithstanding the
foregoing, the Tenant shall be permitted microwave ovens, kettles and the like in the Leased
Premises for the exclusive use of the Tenant’s employees and invitees.
	 
	25.	 	Janitorial Services — The Tenant shall not use or engage any person or persons other
than the janitor or janitorial contractor of the Landlord for the purpose of any cleaning of
the Leased Premises, except with the prior written consent of the Landlord.
	 
	26.	 	Dangerous or Immoral Activities — The Tenant shall not make any use of the Leased
Premises which could result in risk or injury to any person, nor shall the Leased Premises be
used for any immoral or criminal purpose.

	 	 	 
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Application)

	 	Page C - 2

 

 

	27.	 	Proper Conduct — The Tenant shall not perform any acts or carry on any practice which
may damage the Common Elements or be a nuisance to any other tenant in the Project.
	 
	28.	 	Additional Rules and Regulations – Subject to Section 5.07 of this Lease, the
Landlord shall have the right to make such other and further reasonable rules and regulations
as in its sole judgment may from time to time be necessary or of benefit for the safety, care,
cleanliness and appearance of the Project and for the preservation of good order therein.

	 	 	 
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Application)

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SCHEDULE D

LANDLORD’S WORK

The Landlord shall complete the Landlord’s Work within 30 days of receipt of this Lease

signed by
the Tenant in a form acceptable to the Landlord, (the “Access Date”) to permit the Tenant to carry
out the construction of its work (the “Tenant’s Work”), for the installation of the Tenant’s trade
fixtures, and equipment.

The Landlord hereby understands and agrees that it shall complete the Landlord’s Work to the

Leased
Premises on or before the Access Date, at its sole cost and expense which work shall include the
following:

	(a)	 	Ensure all mechanical, electrical and life safety systems, including HVAC systems serving the
Leased Premises are in good working order, and meet or exceed all governmental authorities
having jurisdiction;
	 
	(b)	 	Repair or replace any damaged or broken light fixtures located in the Leased Premises;
	 
	(c)	 	Repair or replace any damaged office window blinds on all exterior windows in the Leased
Premises;
	 
	(d)	 	Replace any damaged or stained ceiling tiles, with new or like new ceiling tiles of the same
style;
	 
	(e)	 	If required by the Landlord, the Landlord to provide meter(s) for the Tenant’s hydro
consumption in the Leased Premises.

It is understood and agreed that the Landlord shall complete all Landlord’s Work outlined herein in
a good and workmanlike manner, and shall comply with all municipal and provincial by-laws having
jurisdiction over the provision of such work in the Leased Premises.

The Landlord shall be responsible at its sole cost and expense to promptly remedy any and all
defects in the Landlord’s Work which arise during the first year of the Term. In addition, the
Landlord shall enforce for the benefit of the Tenant and at no cost to the Tenant, all guarantees
and warranties received by it with respect to the Landlord’s Work, or alternatively, at the request
of the Tenant, assign same to the Tenant.

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	Initials
	 
	 	 	 	 	 	 	 	 
	 

	 	 	Landlord
	 	 	Tenant	 
	 	 	 	 	 	 	 	 

	 	 	 
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Application)

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SCHEDULE E

ADDITIONAL COVENANTS, AGREEMENTS AND CONDITIONS (if any)

In the event of any inconsistency between the provisions of this Schedule E and the balance of this
Lease, the provisions of this Schedule E shall prevail.

	1.	 	AREA MEASUREMENT

The Rentable Area of the Leased Premises shall be measured and certified by the

Landlord’s
architect or surveyor on or before the Commencement Date in accordance with BOMA ANSI
standards ANSI Z65.1-1980, reaffirmed 1989, and the Rent shall be adjusted in accordance
with the certified Rentable Area of the Leased Premises. The Landlord, at its cost, will,
within 20 Business Days of the Commencement Date, provide to the Tenant with a certificate
of measurement from its architect or surveyor as to the Rentable Area of the Leased Premises
and the parties agree to be bound thereby. The Landlord and the Tenant acknowledge and
agree that this Section 1 has been complied with as of the date of execution of this Lease
with the Rentable Area of the Leased Premises being 27,599 square feet as set out in Section
4.08 of this Lease.

	2.	 	LEASEHOLD IMPROVEMENT ALLOWANCE

	 	(a)	 	It is understood and agreed that the Landlord shall pay to the Tenant a
leasehold improvement allowance being the sum of $11.50 per square foot multiplied by
the Rentable Area of the Leased Premises, together with GST thereon, (the “Leasehold
Improvement Allowance”). The Tenant shall use the Leasehold Improvement Allowance to
pay the cost of Tenant’s Work in the Leased Premises. Should there be any unused
portion of the Leasehold Improvement Allowance, then, up to a maximum of 10% of the
Leasehold Improvement Allowance, shall be credited against Rent next becoming due, with
the balance payable in accordance with (d) below.
	 
	 	(b)	 	Notwithstanding the provisions of the foregoing, and so long as this Lease has
been executed, in a form acceptable to the Landlord, and delivered by the Tenant to the
Landlord, the Landlord shall, no more than on 3 occasions, allow the Tenant to draw
portions of the Leasehold Improvement Allowance, of up to 75% of the Leasehold
Improvement Allowance, which shall correspond to not less than the percentage of
Tenant’s Work completed at the time of the request as confirmed by the Landlord or its
representative, acting reasonably, and each draw shall be payable within 5 Business
Days following the date of the Tenant’s written request for such draw, subject to
construction lien holdback, which shall be no more than 10% in the aggregate of the
said Leasehold Improvement Allowance.
	 
	 	(c)	 	The payment of each progress draw shall be subject to the Tenant not being in
default under this Lease with the Landlord, and subject to the delivery of the
following to the Landlord:

	 	(i)	 	receipted and paid invoices for the costs of Tenant’s Work
incurred to date of such advance;
	 
	 	(ii)	 	the Tenant satisfying the Landlord that the value of the
construction materials and labour is commensurate with the amounts invoiced;
	 
	 	(iii)	 	statutory declaration of the Tenant’s general contractor
certifying the level of work which has been completed in respect to the current
progress draw;
	 
	 	(iv)	 	a draw request from the Tenant to the Landlord, including
therewith the Tenant’s GST registration number; and
	 
	 	(v)	 	there are no outstanding construction liens, in respect to the
Tenant’s Work, against the Building.

	 	(d)	 	In addition to the foregoing provisions the final advance of the Leasehold
Improvement Allowance for the Leased Premises shall be payable upon the following
conditions:

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
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	 	 	Tenant	 
	 	 	 	 	 	 	 	 

	 	 	 
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	 	(i)	 	the delivery to the Landlord of proof of payment of the
worker’s compensation assessment for all the Tenant’s contractors and
subcontractors;
	 
	 	(ii)	 	the completion of the Tenant’s Work and trade fixtures;
	 
	 	(iii)	 	the delivery to the Landlord of a statutory declaration from
the Tenant’s general contractor stating that there are no construction liens
registered or outstanding affecting the Leased Premises in respect to the
Tenant’s Work, and that all accounts for work, services or materials have been
paid in full with respect to the Tenant’s Work; and
	 
	 	(iv)	 	delivery to the Landlord of a statutory declaration from the
Tenant stating that at least 90% of the amount of the Leasehold Improvement
Allowance has been expended for the cost of the Tenant’s Work in the Leased
Premises.

	 	(e)	 	If the Landlord fails to pay any instalment(s) of the Leasehold Improvement
Allowance to the Tenant when otherwise due to the Tenant, and same remains unpaid for a
period of 10 days following notice from the Tenant thereof, then the Tenant may set-off
any such unpaid instalment(s) together with interest thereon at a rate of 6% per annum
from the Rent next coming due until set-off has been satisfied in full.

	3.	 	TENANT’S WORK

The Tenant shall be responsible for the installation and cost of all its internal
partitions, fixtures, electrical wiring, telecommunication cabling and plumbing costs,
together with the cost of any modifications to the ceiling, light or heating ventilation and
air-conditioning systems in the Leased Premises, as required by the Tenant’s occupancy,
excluding any Landlord’s Work provided for herein (the “Tenant’s Work).

The Tenant shall also be responsible for the cost of installing any special equipment
required by its occupancy, including telephones, facsimile machines or any other special
communications equipment. The Tenant’s Work shall be completed in a good and workmanlike
manner and subject to the prior written approval of the Tenant’s plans by the Landlord,
acting reasonably, as detailed and provided for in Section 4 of this Schedule E.

The Landlord shall provide any “Tenant Improvement Manual(s)” outlining

the rules and
regulations for the construction of the Tenant’s improvements in the Leased Premises and
work reasonably with the Tenant with respect to the coordination of the completion of the
Landlord’s Work and the completion of the Tenant’s Work.

The Landlord shall bear the cost of all the Landlord’s plan reviews and approvals

of the
Tenant’s Leasehold Improvements to the Leased Premises, and the Tenant shall not be
responsible for any charges for other security, management, supervision, or hoisting charges
or other special costs, during the construction of the Tenant’s Work or the Landlord’s Work,
and prior to the Commencement Date.

	4.	 	WORKING DRAWINGS

The Tenant shall submit to the Landlord working drawings of its proposed improvements

to the
Leased Premises, such drawings must be approved by the Landlord prior to the commencement of
any such work, provided that such work shall be done by qualified and licensed contractors
or subcontractors of whom the Landlord shall have approved in writing, such approvals not to
be unreasonably withheld or delayed.

	5.	 	PERMITS AND APPROVALS

It is the Tenant’s responsibility to secure all the necessary building permits and

approvals
required by the City of Toronto for all its Tenant’s Work. Such permits much be secured and
copies provided to the Landlord before any work shall commence in the Leased Premises.

	6.	 	RIGHT TO ASSIGN OR SUBLET

Notwithstanding anything contained in Article 12:00 of this Lease to the contrary,

the
Tenant shall have the right to assign, sublet or part with possession of the whole or a
portion of the Leased Premises to:

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
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	 	 	Landlord
	 	 	Tenant	 
	 	 	 	 	 	 	 	 

	 	 	 
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	 	(i)	 	an affiliate of the general partner of the Tenant or the Tenant (if the Tenant
is or becomes a corporation);
	 
	 	(ii)	 	any entity which controls, is controlled by or is under common control with the
general partner of the Tenant or Tenant (if the Tenant is or becomes a corporation);
	 
	 	(iii)	 	any entity which owns the majority of the units of the Tenant; or
	 
	 	(iv)	 	the purchaser of all or substantially all of the Tenant’s business,

without the consent of the Landlord, but with notice to the Landlord, provided the Tenant

is
not released from this Lease and is not in default.

A merger or amalgamation of the Tenant with another corporation will not be an

assignment,
sublease or parting of possession that requires the consent of the Landlord. All of the
entities referred to in subsections (i) to (iv) inclusive above are hereafter referred to
individually and collectively as a “Permitted Transferee”.

	7.	 	ROOF MOUNTED COMMUNICATION EQUIPMENT

The Tenant shall have the non-exclusive right, exercisable at its option, risk and expense
to place communication equipment on the roof of the Building, for its own use, substantially
in accordance with Schedule J. The Landlord shall first approve the size and location and
method of installation of the communication equipment, such approval not to be unreasonably
withheld or delayed. The Tenant shall be responsible to repair and restore any damage
caused to the Building and roof by installation, use or removal of such equipment.

	8.	 	SIGNAGE

The Landlord shall permit the Tenant to install and maintain, on a non-exclusive basis, its
name and corporate identification on the Building’s podium signage located in front of the
main entrance of the Building, at the Tenant’s cost. The size, design and location of the
Tenant’s signage shall be in accordance with the Tenant’s specifications and shall be
subject to the Landlord’s approval, not to be unreasonably withheld or delayed.

Together with the existing rights of other tenants in the Building, from and after December
1, 2006, and throughout the Term, and any extension or renewal thereof, the Landlord shall
make available to the Tenant non-exclusive signage on the top of the Building. The size,
design and location of the Tenant’s signage shall be in accordance with the Tenant’s
specifications and shall be subject to the Landlord’s approval, not to be unreasonably
withheld or delayed. The Tenant shall be responsible for the cost to install, and remove
its signage and shall make good any damage done to the Building as a result of the
installation of the Tenant’s signage on the Building, at the expiration or other termination
of this Lease. Any and all of the foregoing signage (podium or Building) shall be subject
to any applicable governmental regulations and approvals.

	9.	 	RESTORATION

The Tenant shall not be responsible for the restoration of the Leased Premises or the
removal of any Leasehold Improvements in the Leased Premises at the expiry or earlier
termination of this Lease.

	10.	 	OPTION TO EXTEND

So long as the Tenant is Alliance Data L.P.. or a Permitted Transferee, and the Tenant is
not then in default, after notice of default has been provided and time to remedy such
default has passed, at the notice date or commencement date of the extension of any
covenants, conditions and agreements herein reserved and contained and on the part of the
Tenant to be paid and performed, the Landlord will, upon the Tenant’s request in writing,
given at least 6 months and not more than 12 months prior to the expiration of the original
Term, grant to the Tenant an option to extend this Lease, on the same terms and conditions,
for a further 5 years save and except that there shall be no further rights to extend and
save and except that Basic Rent during such extension period shall be mutually agree upon
between the parties at least 4 months prior to the expiry of the original Term.

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
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	 	 	Tenant	 
	 	 	 	 	 	 	 	 

	 	 	 
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Application)

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In the event that the parties are unable to agree on the Basic Rent payable by the
Tenant during such extension at least 4 months prior to the expiration of the original Term
of this Lease, then it shall be determined at least 30 days prior to the expiration of the
original Term by 3 accredited real estate brokers (the “Three Experts”), which experts shall
be familiar with rental rates for premises of similar use in the area of the Leased
Premises, one of whom shall be appointed by the Landlord (the “Landlord’s Expert”) and all
costs associated with the Landlord’s Expert shall be the sole responsibility of the
Landlord, and one expert shall be appointed by the Tenant (the “Tenant’s Expert”) and all
costs associated with the Tenant’s Expert shall be the sole responsibility of the Tenant.
The appointment of the third expert (the “Third Expert”) shall be agreed upon by the
Landlord’s Expert and the Tenant’s Expert, both acting reasonably, and 50% of costs
attributable to the Third Expert shall be borne by the Landlord and the remaining 50% of
costs attributable to the Third Expert shall be borne by the Tenant. Together the Three
Experts, acting reasonably, shall make the final determination of the Basic Rent payable by
the Tenant during such extension and, should the Three Experts be unable to agree among
themselves on the determination, the opinion of the majority, being 2 of the Three Experts,
shall be final and binding on the Landlord and the Tenant.

	11.	 	OPTION TO EXPAND

During the period from and after December 15, 2005 up to and including

June 30, 2006,
the Tenant shall have the option to lease the area hatched on Schedule A2 (the “Additional
Leased Premises”) upon a minimum of 3 months prior notice in writing to that effect (the
“Expansion Option”). Should the Tenant exercise its Expansion Option, the lease of such
space shall be under the terms and conditions of this Lease, save and except for the
Leasehold Improvement Allowance, which shall be $10.00 plus GST per rentable square foot of
the Rentable Area of the Additional Leased Premises.

	12.	 	PARKING

The Tenant shall have the right, and the Landlord shall make available to the Tenant, 75
unreserved and 8 reserved parking spaces located in the parking garage of the Building
throughout the Term, and any renewal or extension thereof, at an initial charge of $35.00
per month per space, and thereafter at such monthly rates per parking space as determined by
the Landlord from time to time. Such rental shall be payable by the Tenant to the Landlord
on the first day of each month of the Term. Partial months’ rent owing shall be calculated
and paid on a pro rated basis. It is further understood that this right shall be
transferable to any permitted transferee of the Tenant. In addition, the Tenant shall,
subject to availability from time to time have the right to use up to 17 additional parking
spaces located in the parking garage of the Building on a month to month basis terminable by
either party on 30 days notice at an initial charge of $35.00 per month per space and
thereafter at such monthly rate per parking space as determined by the Landlord from time to
time. Such rental shall be payable by the Tenant to the Landlord on the first day of each
month of the Term.

	13.	 	SALE AND DEMOLITION

The Landlord shall not have the right of early termination in the event of any sale,
redevelopment, renovation or demolition of the Building.

	14.	 	NO REQUIREMENT TO OCCUPY

During the Term, the Tenant shall be permitted to vacate the Leased Premises, but may

not
abandon the Leased Premises. Should the Tenant vacate the Leased Premises, it shall
maintain all its financial obligations, as if it were in occupancy. The Tenant shall have
the right to resume occupancy of the Leased Premises at anytime without notice to the
Landlord.

	15.	 	NON DISTURBANCE AGREEMENT

Upon execution of this Lease, the Landlord shall use reasonable commercial effort, at the
Tenant’s cost, which cost shall not exceed $1,000.00 to obtain a non-disturbance agreement
in writing from any existing mortgagee, trustee for bondholders, land lessor or other Person
who has an interest in the Building or the Lands on which it is situated. Such
non-disturbance agreement shall be on a standard form of any such mortgagee, trustee for
bondholders, land lessor, or other Person and shall provide that, provided the Tenant is not

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
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	 	 	Landlord
	 	 	Tenant	 
	 	 	 	 	 	 	 	 

	 	 	 
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then in default of a material covenant, the Tenant shall be entitled to remain undisturbed
in the possession of the Leased Premises, subject to the terms and conditions of this Lease.

In addition, the Tenant shall not postpone or subordinate this Lease with the Landlord to
any mortgagee, trustee for bondholders, land lessor or other Person acquiring an interest in
the Building, unless a non-disturbance agreement on the standard form of any such mortgagee,
trustee for bondholder, land lessor or other Person is provided.

	16.	 	ENVIRONMENTAL

The Landlord represents, based on the best of its knowledge, information and belief, that

as
at December 15, 2005, the Land and the Building comply in all material respects with all
applicable Environmental Laws and that neither the Land nor the Building are subject to any
judicial or administrative proceedings alleging the violation of any Environmental Laws.
The Landlord has no knowledge of the existence, or the release into the environment, of any
Pollutants in excess of amounts permissible under applicable Environmental Laws, and no
existing tenant as at December 15, 2005, to the best of the Landlord’s knowledge,
information and belief, generates, transports, treats or disposes of any Pollutants
(“Pollutants” as defined in the Lease), in excess of amounts permissible under applicable
Environmental Laws. The Landlord is not aware of the existence of any Pollutants in or on
the ground of the Land, or in the Building, which is in excess of amounts permissible under
applicable Environmental Laws.

	17.	 	CASH INDUCEMENT

As an inducement for the Tenant to enter into this Lease, so long as the Tenant is not in
default herein, the Landlord shall pay to the Tenant a cash inducement in the amounts and on
the dates set out below:

	 	 	 
	Date of payment	 	Amount of payment
	March 31, 2006
	 	$102,247.77 plus GST
	June 30, 2006
	 	$102,247.77 plus GST
	September 30, 2006
	 	$102,247.77 plus GST
	November 30, 2006
	 	$68,165.18 plus GST

If the Landlord fails to pay any instalments of this cash inducement to the Tenant, when
otherwise due to the Tenant, and same remains unpaid for a period of 10 Business Days
following notice from the Tenant thereof, then the Tenant may set-off such unpaid
instalment(s) together with interest thereon at a rate of 6 percent per annum from the Rent
next coming due until set-off in full.

	18.	 	ACTING REASONABLY

Unless otherwise specifically provided in this Lease and with the exception of any
provision of Article 11.00: (a) any allocation of any cost, charge or expense which is to be
determined by the Landlord under this Lease shall be done on a reasonable and equitable
basis; (b) whenever in this Lease the Landlord’s consent, permission or approval is
required, such consent, permission or approval shall not be unreasonably withheld or
delayed; and (c) in exercising any of its rights under this Lease, the Landlord shall act
reasonably and as a prudent owner of a similar Building having regard to size, age and
location.

	19.	 	2005 OPERATING COST ESTIMATE

The Operating Costs for the Landlord’s calendar year 2005 were estimated to be

$15.62 per
rentable square foot and composed of the following estimate:

	 	 	 
	Taxes: $7.23 per rentable square foot per annum
	Operating Costs:
	 	$7.95 per rentable square foot per annum
	Utilities:
	 	$1.44 per rentable square foot per annum
	 
	 	$15.62 per rentable square foot per annum plus GST

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	Initials
	 
	 	 	 	 	 	 	 	 
	 

	 	 	Landlord
	 	 	Tenant	 
	 	 	 	 	 	 	 	 

	 	 	 
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	20.	 	GERMANE POLLUTANTS

Notwithstanding the provisions of Sections 5.01, 5.03 and 9.05 of this Lease and,

so long as
the Tenant is Alliance Data L.P. , a Permitted Transferee or an assignee of this Lease which
has been approved by the Landlord, and no part of the Leased Premises has been subleased
then, providing any Pollutants brought into the Leased Premises are strictly germane to the
business operations of the Tenant as described in Item 9 of the Term Sheet and Section 5.01
of this Lease and providing further that such germane Pollutants are standard, with regard
to the type and amount, in the industry in which the Tenant conducts its business and are
necessary or beneficial to conduct the business operations of the Tenant described in Item 9
of the Term Sheet and Section 5.01 of this Lease (“Germane Pollutants”), the Tenant shall
not be required to obtain the prior written approval of the Landlord to bring into the
Leased Premises Germane Pollutants nor to notify the Landlord of the existence of Germane
Pollutants in the Leased Premises.

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	Initials
	 
	 	 	 	 	 	 	 	 
	 

	 	 	Landlord
	 	 	Tenant	 
	 	 	 	 	 	 	 	 

	 	 	 
	MORGUARD February 2005 — Net Office, Multi-Tenant (General

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SCHEDULE F

FORM OF INDEMNITY AGREEMENT (if applicable)

	 	 	 
	MORGUARD February 2005 — Net Office, Multi-Tenant (General

Application)

	 	Page F - 1

 

 

INDEMNITY AGREEMENT

THIS AGREEMENT made the 19th

day of December, 2005.

BETWEEN:

ALLIANCE DATA SYSTEMS CORP.

     (the “Indemnifier”)

OF THE FIRST

PART               

AND:

MORGUARD REAL ESTATE INVESTMENT TRUST

     (the “Landlord”)

OF THE SECOND

PART               

1.       FOR VALUE RECEIVED and in consideration of and

as an inducement to the Landlord entering into
the lease dated the 19th day of December, 2005, and made between the Landlord and
Alliance Data L.P. by its general partner Enlogix Inc. as Tenant of certain premises located in the
Landlord’s building or complex known as 200 Yorkland Boulevard, Suites 1000 and 1100, in the City
of Toronto, in the Province of Ontario (the “Lease”), which premises are more particularly
described in the Lease (the “Leased Premises”), the Indemnifier covenants and agrees with the
Landlord that the Indemnifier will:

	(a)	 	make due and punctual payment during the term of the Lease and any extension or renewal
thereof, if any, exercised by Alliance Data L.P. or a Permitted Transferee of Alliance Data
L.P. of the type described in Section 6 of Schedule E of the Lease (hereinafter referred to as
the “Indemnification Period”) but subject to earlier termination pursuant to Subsection 3(d)
hereof of all amounts expressed to be payable under the Lease during the Indemnification
Period whether as Rent or otherwise;
	 
	(b)	 	observe and perform during the Indemnification Period all covenants and agreements in the
Lease contained on the part of the Tenant to be observed and performed during the
Indemnification Period; and
	 
	(c)	 	indemnify and hold harmless the Landlord from any and all loss, costs or damages arising out
of any failure to pay any of the said amounts and/or any failure to observe and perform any of
the said covenants and agreements.

2.      This Agreement and the obligations of the Indemnifier

hereunder shall not be terminated or
impaired by reason of the granting by the Landlord of any indulgences to the Tenant or the
assertion by the Landlord against the Tenant of any of the Landlord’s rights or remedies under the
Lease or by the release of the Tenant from any of the Tenant’s obligations under the Lease by
operation of law or otherwise, whether or not the Indemnifier has received notice of same. The
Indemnifier waives all suretyship defence and waives notice of any default by the Tenant in the
payment of any amounts expressed to be payable under the Lease or in the observance and performance
of any of the covenants and agreements therein contained. The obligations of the Indemnifier
shall:

	(a)	 	continue until all of the said amounts accruing during the Indemnification Period as same may
be earlier terminated pursuant to Subsection 3(d) hereof have been paid and all of the said
covenants and agreements have been observed and performed or until the Landlord shall have
delivered to the Indemnifier an instrument in writing discharging the Indemnifier from the
Indemnifier’s obligations hereunder;
	 
	(b)	 	be independent of the obligations of the Tenant and be construed for all purposes as if the
Indemnifier were a primary obligor and not merely a surety for the obligations of the Tenant
under the Lease; and
	 
	(c)	 	be unaffected by any failure of the Landlord to enforce any of the covenants and
agreements in the Lease.

			
	 
	MORGUARD February 2005
— Indemnity Agreement
	 	Page 1

 

 

3.      The Indemnifier further acknowledges and agrees that

the Landlord shall be entitled, without
prior notice or demand and without affecting the obligations of the Indemnifier hereunder, to:

	(a)	 	change the time or manner of payment of any amounts expressed to be payable under the Lease;
	 
	(b)	 	modify or supplement any of the covenants and agreements in the Lease provided that the
Indemnifier shall not be bound by such modifications or supplements made without its consent;
	 
	(c)	 	grant extensions of time, indulgences, releases or discharges in respect of the payment of
any amounts or the observance and performance of any covenants and agreements;
	 
	(d)	 	extend or renew the Lease pursuant to the extension or renewal provisions therein contained,
if any provided that the Indemnifier shall not be bound by any such extension or renewal which
extends beyond the Indemnification Period;
	 
	(e)	 	assign the Lease or the benefit of any amounts expressed to be payable thereunder;
	 
	(f)	 	consent to an assignment of the Lease by the Tenant or to a sublease by the Tenant of all or
any part of the Leased Premises. In the event of an assignment that requires the Landlord’s
consent as described in Article 12.00 of the Lease, notwithstanding anything in this agreement
to the contrary, the Indemnifier will be released from its obligations herein with respect to
the period commencing from and after the effective date of such assignment if the consent of
the Landlord is given to the assignment.
	 
	(g)	 	consent to changes in the Leased Premises and to any lease of additional space by way of
amendment to the Lease provided that the Indemnifier shall not be bound by such modifications
or supplements made without its consent;;
	 
	(h)	 	assign this Agreement in whole or in part; and
	 
	(i)	 	take or require security from the Tenant.

4.       The liability

of the Indemnifier under this Indemnity Agreement is primary and absolute and, in
the event of a default under the Lease, the Indemnifier waives any right to require the Landlord
to:

	(a)	 	proceed against the Tenant or pursue any rights and remedies with respect to the Lease;
	 
	(b)	 	proceed against or exhaust any security of the Tenant held by the Landlord; or
	 
	(c)	 	pursue any other remedy whatsoever in the Landlord’s power before proceeding against the
Indemnifier under this Agreement.

	The Landlord shall have the right to enforce this Agreement regardless of the release or discharge
of the Tenant by the Landlord or by others or by operation of law.

5.       The Landlord’s delay or failure to insist upon the

strict performance or observance of any
obligation of the Tenant under the Lease or to exercise any right or remedy available under the
Lease or at law or in equity or to give the Indemnifier notice of default by the Tenant shall not
be construed to be a waiver of the Landlord’s right to insist upon such strict performance or
observance or to exercise any such right or remedy. Receipt by the Landlord of rent or other
payment with knowledge of a breach of any term or condition of the Lease shall not be construed to
be a waiver of such breach.

6.      The liability of the Indemnifier hereunder shall not be

deemed to have been waived, released,
discharged, impaired, affected or limited by: (i) the release or discharge of the Tenant in any
receivership, bankruptcy, winding-up or other creditors’ proceedings; (ii) the impairment,
limitation or modification of the liability of the Tenant or the estate of the Tenant in bankruptcy
or of any remedy for the enforcement of the Tenant’s said liability under the Lease, resulting from
the operation of any present or future provision of any bankruptcy laws or other statutes or from
the decision in any court; (iii) the rejection, repudiation, disaffirmance or disclaimer of the
Lease in any such proceedings; (iv) any disability or other defence of the Tenant; or (v) the
cessation, from any cause whatsoever, of the liability of the Tenant. The liability of the
Indemnifier shall not be affected by any repossession of the Leased Premises by the Landlord
provided, however, that the net payments received by the Landlord after deducting all costs and
expenses of repossession and/or reletting the same shall be credited from time to time by the Landlord to the account of the
Indemnifier and the Indemnifier shall pay any balance owing to the Landlord from time to time
immediately upon ascertainment.

			
	 
	MORGUARD February 2005
—  Indemnity Agreement
	 	Page 2

 

 

7. In the event of either the termination of the Lease (except by a surrender of the Lease
by the Tenant accepted in writing by the Landlord) or a repudiation or disclaimer of the Lease
pursuant to any statute, then in either case at the sole option of the Landlord exercisable at any
time within 6 months of such termination, repudiation or disclaimer, as the case may be, the
Indemnifier agrees to execute and deliver or cause its nominee to execute and deliver (in which
event the Indemnifier shall enter into an Indemnity Agreement on a similar form with respect to its
nominee’s obligations under such new lease) a new lease of the Leased Premises between the Landlord
and the Indemnifier as tenant for a term equal to the residue of the Indemnification Period of the
Lease remaining unexpired at the time of such termination, repudiation or disclaimer. Such new
lease shall contain the same covenants, obligations, agreements, terms and conditions in all
respects (including the proviso for re-entry) as are contained in the Lease, save for the term
which shall be as aforesaid.

8. No action or proceeding brought or instituted under this Agreement and no recovery in pursuance
thereof shall be a bar or defence to any further action or proceeding which may be brought under
this Agreement by reason of any further default under the Lease.

9. Any notice required or permitted hereunder shall be given in writing and delivered either: (i)
personally or (ii) by prepaid courier service:

to the Landlord at the Landlord’s head office:

MORGUARD REAL ESTATE INVESTMENT TRUST

c/o Morguard Investments Limited

800 — 55 City Centre Drive

Mississauga, ON L5B 1M3

Attention: President

Facsimile Number: 905.281.1800

with a copy to the Landlord’s manager as follows:

MORGUARD REAL ESTATE INVESTMENT TRUST

c/o Morguard Investments Limited

800 — 55 City Centre Drive

Mississauga, ON L5B 1M3

Attention:      Vice President, Property Management, Office/Industrial, Eastern Canada

Facsimile Number: 905.281.4826

and to the Indemnifier at:

ALLIANCE DATA SYSTEMS CORP.

17655 Waterview Parkway

Dallax, TX 75252

Attention:           General Counsel

Notwithstanding the provision of any statute or law relating thereto, service by means of
electronic mail of any notice required to be given in writing by either party hereto pursuant to
this Agreement shall not constitute good and effective service.

Any notice shall be considered to have been given or made if delivered personally or by prepaid
courier, on the day of delivery. Either party may from time to time by notice in writing to the
other designate another address or addresses in Canada as the address to which notices are to be
sent.

10. This Agreement shall be construed in accordance with the laws of the province in which the
Leased Premises are located and the laws of Canada applicable therein.

11. All the terms of this Agreement shall extend to and be binding upon the Indemnifier, its heirs,
executors, administrators and assigns, or successors and assigns, as the case may be, and shall
enure to the benefit of and may be enforced by the Landlord, its successors and assigns, including
the holder of any mortgage to which the Lease is subject and subordinate. If there is more than
one Indemnifier or the Indemnifier is a male or female person or corporation, this Agreement shall
be read with all grammatical changes appropriate by reason thereof, and all covenants, liabilities
and obligations shall be joint and several.

12. This Indemnity Agreement is irrevocable and may not be changed, affected, discharged or
terminated other than by an agreement in writing signed by the Indemnifier and the Landlord.
Neither this Indemnity Agreement nor any rights or obligations of the Indemnifier may be assigned
by the Indemnifier without the prior written consent of the Landlord.

			
	 	 	 
	MORGUARD
February 2005-Indemnity Agreement
	 	Page 3

 

 

13. The Indemnifier acknowledges that the Landlord hereby advises the Indemnifier to obtain advice
from independent legal counsel prior to signing this Indemnity Agreement. The Indemnifier further
acknowledges that any information provided by the Landlord is not to be construed as legal, tax or
any other expert advice and the Indemnifier is cautioned not to rely on any such information
without seeking legal, tax or other expert advice.

14. The Indemnifier shall pay all costs and expenses paid or incurred by the Landlord in enforcing
either the Lease or this Agreement, including court costs and legal fees on a solicitor and client
or substantial indemnity basis, whether legal counsel is employed or retained by the Landlord.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first set
forth above.

SIGNED, SEALED AND DELIVERED

	 	 	 	 	 	 	 	 	 	 	 
	WITNESS to
signature of Indemnifier:	 	 	 	INDEMNIFIER:	 	 
	 	 	 	 	 	 	ALLIANCE DATA SYSTEMS CORP.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	signature:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:	 	 
	print name:

	 	 	 	 	 	 	 	Title:                               c/s	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	address:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	Title:	 	 
	 
	 	 
	 	 	 	 	 	 	 	 
	occupation:	 	 	 	 	 	I/We have authority to bind the Corporation	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	LANDLORD:	 	 
	 	 	 	 	 	 	MORGUARD REAL ESTATE INVESTMENT TRUST by its
	 	 	 	 	 	 	agent MORGUARD INVESTMENTS LIMITED	 	 
	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	Title:                                c/s	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	We have authority to bind the Corporation
	 	 	 	 	 	 	which has authority to bind the Trust

			
	MORGUARD
February 2005-Indemnity Agreement
	 	Page 4

 

 

SCHEDULE G

SECURITY INTEREST — REMEDIES ON DEFAULT

INTENTIONALLY DELETED

			
	 
	MORGUARD February 2005-Net
Office, Multi-Tenant (General Application)
	 	Page G-1

 

 

SCHEDULE H

CONTENTS OF LEASED PREMISES

The following Schedule H is referred to in Section 9.05, Environmental Issues, in this Lease.

All contents and materials, other than standard office furnishings and supplies, stored in the
Leased Premises are as follows:

(please include, in detail, all materials, Pollutants, including but not limited to, chemicals
and related items that are used and/or stored in the Leased Premises) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	Initials
	 
	 	 	 	 	 	 	 	 
	 

	 	 	Landloard
	 	 	Tenant	 
	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 

			
	 	 	 
	MORGUARD February 2005-Net
Office, Multi-Tenant (General Application)
	 	Page H-1

 

 

SCHEDULE J

TELECOMMUNICATIONS FACILITIES

1. Prerequisites — The Tenant’s rights set out in this Schedule (the “Licence”) are subject
to the following conditions:

(a) the Tenant must not be in default under this Lease notice of which has been delivered to the
Tenant and has remained uncured beyond the relevant grace period provided for in this Lease
for the remedying of same;

(b) the Tenant must be in occupation of substantially the whole of the Leased Premises and
must use the Leased Premises solely for the purposes stipulated in this Lease;

(c) the Tenant must pay the fees and perform the obligations stipulated in this Schedule; and

(d) the Lease must remain in full force and effect.

2. Telecommunication Facilities  — Those of the facilities which are listed below and have
the initials of the respective representatives of the Tenant and the Landlord within the brackets
preceding them are referred to in this Schedule as the “Telecom Facilities”.

	(a)	 	þ Rooftop antenna(s) — [insert permitted number] 1 with the
characteristics outlined on Exhibit A attached to this Schedule J;

3. Requirements and Conditions — The Tenant may install and operate the Telecom Facilities
subject to strict adherence by the Tenant to the requirements and conditions stipulated in this
Schedule. The requirements and conditions are as follows:

	(a)	 	Location — The size, configuration and location of the area or areas in which the
Telecom Facilities are situated from time to time (the “Licensed Areas”) are all subject to
the Landlord’s prior written approval and are subject to reconfiguration and relocation from
time to time at the Tenant’s expense on prior reasonable written notice from the Landlord.
The Landlord will not exercise this right to reconfigure or relocate the Licensed Areas except
on a bona fide basis and in circumstances where:

	(i)	 	it is necessary or advisable in conjunction with alterations that are made or
to be made in connection with the Building, the Land or the Common Elements;
	 
	(ii)	 	where the Telecom Facilities or components of the Telecom Facilities have become
surplus;
	 
	(iii)	 	where operating efficiencies, cost savings or other enhancements in respect of the
Common Elements or other components of the Building require it; or
	 
	(iv)	 	where the operation of the Telecom Facilities or any components of them interfere with
the use or operation of other parts of the Building, other equipment (regardless of its
nature) within the Building or in any nearby buildings or properties or with other users or
occupants of the Building or the Land.

	(b)	 	Term — The term during which the Tenant is entitled to keep the Telecom Facilities
and use them within the Licensed Areas is coincident with the term of this Lease and any
renewals or extensions of the Term.

	(c)	 	Plans and Specifications — The Telecom Facilities must not be installed until
detailed plans, specifications and working drawings prepared in accordance with the best
engineering standards have been prepared by the Tenant and reviewed (at the Tenant’s expense)
by the Landlord or the Landlord’s Consultants and approved in writing. The Landlord, in
reviewing and approving the plans, specifications and working drawings for the Telecom
Facilities, will be entitled to take into consideration the aesthetics of the Building and any
safety, operating and other factors which it considers reasonable. The Tenant shall provide
to the Landlord, within 30 days after installation of the Telecom Facilities, detailed
as-built drawings prepared by a professional, qualified engineer, confirming installation in
accordance with the approved plans, specifications and working

			
	 	 	 
	MORGUARD February 2005-Net
Office, Multi-Tenant (General Application)
	 	Page J-1

 

 

drawings. No alteration of any component of the Telecom Facilities will be permitted
without the Landlord’s prior written consent. All costs and expenses incurred by the
Landlord in reviewing plans and specifications in connection with any alterations will also
be paid by the Tenant. An administration fee of 10% will be added to all amounts payable by
the Tenant under this Subsection.

	(d)	 	Standards of Construction — All construction will be completed in accordance with all
provisions of the Lease, in particular Article 7.00 thereof, and in a good and workmanlike
manner, in accordance with all governmental requirements and the best engineering standards,
and will be in full compliance with all requirements and conditions pertaining to building
permits, user permits and operating permits. All work will be performed and all design and
operation will be consistent with the requirements of all occupational health and safety
legislation, safety codes and Environmental Laws. Before commencing any work in connection
with the Telecom Facilities, the Tenant shall provide particulars to the Landlord concerning
all proposed contractors and subcontractors and no contractor or subcontractor to which the
Landlord acting reasonably objects will be permitted to do any part of the work. The Tenant
will ensure that no construction lien or other lien relating to any part of the work involved
in installation, maintenance or repair of the Telecom Facilities will remain outstanding
longer than 5 days after the Landlord gives written notice to the Tenant requiring removal of
the claim, notice of claim or registration.
	 
	 	 	Each component of the Telecom Facilities will be clearly labelled by or on behalf of the
Tenant in accordance with the Landlord’s requirements in that regard.
	 
	 	 	All work will be completed in accordance with any reasonable directions or requirements
imposed by the Landlord or the Landlord’s agent and, should the Landlord require it, any
work affecting the Building’s basic systems, structure, aesthetics, exterior or roof will be
completed under the supervision of a representative of the Landlord or, at the Landlord’s
option, by a contractor designated by the Landlord. The Tenant will pay any reasonable
costs of supervision which the Landlord incurs in this regard.

	(e)	 	Removal, Restoration and Acquisition Rights — The Landlord may require the Tenant to
remove all or any component of the Telecom Facilities at the expiry or earlier termination of
this Lease or upon termination of the Tenant’s rights under this Schedule and the Tenant will
complete the removal and will restore all damage to the Building and the Land caused by the
installation or removal of the Telecom Facilities or any component thereof within a time frame
specified by the Landlord (which will be reasonable), all at the Tenant’s cost.
Alternatively, where the Tenant’s right to continue to use the Telecom Facilities has been
terminated, the Landlord may require that components such as cable, conduit or any portions
that are not easily removable or that may be useful to the Landlord be left in place and that
title thereto be transferred to the Landlord (without payment of any compensation) free and
clear of all encumbrances.
	 
	(f)	 	Third Party Providers — Should the Tenant require dark fibre, cable, conduit or other
facilities or components to be installed in conjunction with the Telecom Facilities by any
third party or made available to the Tenant by a third party such as, by way of example, but
without limitation, a supplier of electrical power, the third party will be required to enter
into a form of agreement satisfactory to the Landlord dealing with the installation, operation
and use of the improvements or facilities to be installed by that third party.
	 
	 	 	No component of the Telecom Facilities may be owned, encumbered or otherwise charged or
liened in favour of any third party whether by means of personal property security
registration, mortgage, charge or a claim of ownership under the Personal Property Security
Act (or similar legislation) or otherwise.

	(g)	 	Use — The Telecom Facilities shall be used solely to provide or facilitate the
provision of telecommunication services to or by the Tenant and may not be used to provide
telecommunication services to any third party in the Building or on the Land. The benefit of
the licence under this Schedule is not transferable by the Tenant in whole or in part except
in conjunction with a Transfer under the Lease.

	(h)	 	Standards of Operation — All aspects of the use and operation of the Telecom
Facilities will be strictly in accordance with all applicable governmental requirements and
regulations. In particular, without limiting the general nature of this requirement, the
Tenant will ensure that the guidelines set out in Safety Code 6 of Health Canada and Industry
Canada (or any successor or replacement legislation or guidelines) are fully

			
	 	 	 
	MORGUARD February 2005-Net
Office, Multi-Tenant (General Application)
	 	Page J-2

 

 

complied with in connection with radio frequency emission levels and the Tenant will provide
to the Landlord whatever evidence the Landlord reasonably requests from time to time
including, without limitation, a report by a qualified engineer confirming that any antennae
included in the Telecom Facilities do not either by themselves or in conjunction with any
other existing antennae that might be situated on the roof of the Building or elsewhere on
the Land exceed recommended radio frequency emission levels. The Tenant will also ensure
that there is no interference by any of the Telecom Facilities with the operation of any
equipment or facilities in the Building or on the Land and, should the Landlord believe that
this requirement is not being complied with, the Tenant will be required to provide whatever
evidence (including engineer’s reports) the Landlord may reasonably require to confirm
compliance by the Tenant. If the Tenant fails to ensure that this interference does not
occur, the Landlord may cut off power to the Telecom Facilities and may require the
immediate removal of the Telecom Facilities or those parts of the Telecom Facilities that
the Landlord determines are responsible for the interference. The Tenant will not alter any
part of the Telecom Facilities or the manner in which any part of the Telecom Facilities is
used without the Landlord’s consent. The Tenant will not use any of the Telecom Facilities
for any purpose other than as specified above and in particular will not use any antenna or
any other component as a sign, sign base or for advertising.

	(i)	 	Acknowledgments, Representations and Warranties — The Tenant acknowledges that it has
received no representation or warranty from the Landlord in connection with any aspect of the
Building or the Land in relation to the Telecom Facilities, that the Tenant has satisfied
itself concerning all aspects of the Building and the Land, all site conditions and all other
information pertinent to the installation, use and operation of the Telecom Facilities. No
review or approval of any plans, specifications or drawings or other information submitted to
the Landlord by the Tenant will be considered as a representation, acknowledgment,
confirmation or inference that the Landlord has assumed or acknowledged any responsibility in
connection with any aspect of the Telecom Facilities, their design, installation, use or
operation, or as a waiver of the Landlord’s rights under this Schedule.

	(j)	 	Maintenance, Repairs and Replacement — The Tenant will at all times maintain the
Telecom Facilities in first-class condition and repair and will ensure that the Telecom
Facilities operate at all times properly and in accordance with all governmental requirements.
The Tenant will provide to the Landlord from time to time whatever evidence the Landlord
reasonably requests to ensure that this requirement is satisfied. In connection with any
installations situated on the roof or the exterior of the Building and comprising part of the
Telecom Facilities, the Tenant will be required to prepare periodic inspections at its cost,
at intervals reasonably specified by the Landlord in connection with all fasteners, hooks,
hardware, metal, flashings, penetrations, core sleeve and other components to ensure that they
are all in first-class condition and to complete promptly any repairs, remediation or
modifications that may be required in connection with them so as to ensure that the Telecom
Facilities and the Building are not, as a consequence of the Telecom Facilities, in less than
first-class condition.

	(k)	 	Costs and Expenses — The Tenant will be responsible for payment to the Landlord, on
demand, of all invoices submitted by the Landlord to the Tenant in respect of administration,
costs of operation in connection with the Building, the Land and the Common Elements incurred
by the Landlord and associated with the installation, operation and use of the Telecom
Facilities. The Tenant will also pay all utilities consumed or reasonably attributable to the
operation of the Telecom Facilities, all Property Taxes and other Taxes associated with or
reasonably allocable to the Telecom Facilities (as determined by the Landlord acting
reasonably), and all costs of altering, relocating or otherwise adapting components of the
Building or the Common Elements and facilities associated with the installation, use and
operation of the Telecom Facilities.

	(l)	 	Fees — In consideration of the licence granted to the Tenant under this Schedule, the
Tenant will pay to the Landlord an annual fee of $NIL (the “Fee”) payable in equal monthly
instalments in advance, together with applicable GST. The Fee will be considered as Rent
under this Lease.

	(m)	 	Default — Any default with respect to any provision of this Schedule by the Tenant
shall be an Event of Default under the Lease and shall entitle the Landlord to all enforcement
provisions contained in the Lease.

			
	 	 	 
	MORGUARD February 2005-Net
Office, Multi-Tenant (General Application)
	 	Page J-3

 

 

	(n)	 	No Property Rights — The Tenant acknowledges that the rights granted under this
Schedule confer no property right, leasehold interest or easement in connection with any of
the Telecom Facilities or the Licensed Areas. The Tenant’s rights under this Schedule are
subordinate to the rights of all lenders, mortgagees, secured creditors and any Person
claiming by or through them.

	(o)	 	Insurance — The provisions in the Lease pertaining to insurance apply to the Telecom
Facilities, as well as the use, and operation of those Telecom Facilities and all liabilities
associated with the installation, use and operation of the Telecom Facilities. In recognition
of the increased risk to the Landlord associated with the Telecom Facilities, the Tenant
agrees to increase the liability limits under its comprehensive general liability policies to
$5,000,000.00 per occurrence.

	(p)	 	Release — The Tenant releases the Landlord in respect of all liability, Claims, loss,
damage and expense which the Tenant might suffer for any reason whatsoever in connection with
damage to, interruption of, or interference with, the Telecom Facilities regardless of any
negligence, gross negligence, wilful act or other wrongful act which is alleged to, or is in
fact established to, have taken place on the part of the Landlord.

	(q)	 	Indemnity — Unless caused by or to the extent contributed by the act, fault or
negligence of the Landlord or those for whom it is in law responsible, the Tenant hereby
indemnifies the Landlord from and against all liability, Claims, loss, damage and expense
arising in any way in connection with the installation, use, operation or otherwise in
connection with the Telecom Facilities, this Schedule, and from and against all liability,
Claims, loss, damage and expense which the Landlord might suffer as a result of any breach by
the Tenant of its obligations under this Schedule.

			
	 	 	 
	MORGUARD February 2005-Net
Office, Multi-Tenant (General Application)
	 	Page J-4

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