Document:

exv10w1

 

EXHIBIT 10.1

EXECUTION VERSION

OFFICE LEASE AGREEMENT

BY AND BETWEEN

RFP LINCOLN GREENSPOINT, LLC, AS LANDLORD

AND

EXTERRAN ENERGY SOLUTIONS, L.P., AS TENANT

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	I
	 	 	 	 	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.1	 	Leased Premises	 	 	1	 
	 
	 	1.2	 	Term	 	 	1	 
	 
	 	1.3	 	Use	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	II
	 	 	 	 	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.1	 	Rental Payments	 	 	2	 
	 
	 	2.2	 	Base Rental	 	 	2	 
	 
	 	2.3	 	Additional Rental	 	 	3	 
	 
	 	2.4	 	Operating Expenses	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	III
	 	 	 	 	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.1	 	Services	 	 	8	 
	 
	 	3.2	 	Keys and Locks	 	 	13	 
	 
	 	3.3	 	Signage, Graphics and Building Directory	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	IV
	 	 	 	 	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.1	 	Care of the Leased Premises	 	 	13	 
	 
	 	4.2	 	Entry for Repairs and Inspection	 	 	13	 
	 
	 	4.3	 	No Nuisance	 	 	13	 
	 
	 	4.4	 	Laws and Regulations	 	 	13	 
	 
	 	4.5	 	Legal Use and Violations of Insurance Coverage	 	 	13	 
	 
	 	4.6	 	Compliance With Laws	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	V
	 	 	 	 	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.1	 	Leasehold Improvements	 	 	14	 
	 
	 	5.2	 	Repairs by Landlord	 	 	16	 
	 
	 	5.3	 	Landlord Work	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	VI
	 	 	 	 	 	 	17	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.1	 	Condemnation	 	 	17	 
	 
	 	6.2	 	Damages from Certain Causes	 	 	17	 
	 
	 	6.3	 	Fire or Other Casualty	 	 	17	 
	 
	 	6.4	 	Landlord's Insurance	 	 	18	 
	 
	 	6.5	 	Tenant's Insurance	 	 	19	 
	 
	 	6.6	 	Hold Harmless	 	 	20	 
	 
	 	6.7	 	WAIVER OF SUBROGATION RIGHTS	 	 	20	 
	 
	 	6.8	 	Self-Insurance	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	VII
	 	 	 	 	 	 	21	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.1	 	No Lien for Rent	 	 	21	 
	 
	 	7.2	 	Default by Tenant	 	 	21	 
	 
	 	7.3	 	Non-Waiver	 	 	24	 
	 
	 	7.4	 	Holding Over	 	 	24	 
	 
	 	7.5	 	Attorneys' Fees	 	 	24	 

(i)

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	VIII
	 	 	 	 	 	 	24	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.1	 	Assignment or Sublease by Tenant	 	 	24	 
	 
	 	8.2	 	Assignment by Landlord	 	 	26	 
	 
	 	8.3	 	Peaceful Enjoyment	 	 	26	 
	 
	 	8.4	 	Limitation of Landlord's Liability	 	 	26	 
	 
	 	8.5	 	Limitation of Tenant's Liability	 	 	26	 
	 
	 	8.6	 	Environmental Matters	 	 	27	 
	 
	 	8.7	 	Consequential Damages	 	 	27	 
	 
	 	8.8	 	Landlord Restrictions	 	 	28	 
	 
	 	8.9	 	Other Appurtenances	 	 	29	 
	 
	 	8.10	 	Special Tenant Improvements	 	 	29	 
	 
	 	8.11	 	Telecommunications Provider	 	 	29	 
	 
	 	8.12	 	Utility Provider	 	 	29	 
	 
	 	 	 	 	 	 	 	 
	IX
	 	 	 	 	 	 	29	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.1	 	Notices	 	 	29	 
	 
	 	9.2	 	Miscellaneous	 	 	31	 
	 
	 	9.3	 	Landlord's Mortgagee	 	 	32	 
	 
	 	9.4	 	Estoppel Certificate or Three-Party Agreement	 	 	32	 
	 
	 	9.5	 	Tenant Financial Information	 	 	32	 
	 
	 	9.6	 	Brokers	 	 	33	 
	 
	 	9.7	 	Entire Agreement, Representations, Etc	 	 	33	 
	 
	 	9.8	 	Waiver of Consumer Right Under DTPA	 	 	33	 
	 
	 	9.9	 	Waiver of Rights Under Section 93.012 of the Texas Property Code	 	 	33	 

EXHIBITS AND SCHEDULES

Exhibit A — Land

Exhibit B — Floor Plans

Exhibit C — Air Conditioning and Heating Services

Exhibit D — Leasehold Improvements

Exhibit E — Building Mounted Signage Specs

Exhibit F — Renewal Option

Exhibit G — Sublessee Non-Disturbance Agreement

Exhibit H — Parking

Exhibit I — Form of Subordination, Non-Disturbance and Attornment Agreement

Schedule 3.3 — Signage

Schedule 4.6 — Condition Surveys

Schedule 5.3 — Landlord’s Repairs

(ii)

 

OFFICE LEASE AGREEMENT

     THIS OFFICE LEASE AGREEMENT (the “Lease”) is made and entered into as of the ___day of
August, 2007, by and between RFP Lincoln Greenspoint, LLC, a Massachusetts limited liability
company (“Landlord”), and Exterran Energy Solutions, L.P., a Delaware limited partnership
(successor by name change to Hanover Compression Limited Partnership) (“Tenant”).

WITNESSETH:

I

     1.1 Leased Premises.

     1.1.1 Definition of Leased Premises. Subject to and upon the terms, provisions and conditions
hereinafter set forth, and each in consideration of the duties, covenants and obligations of the
other hereunder, Landlord does hereby lease to Tenant and Tenant does hereby lease from Landlord
the Project (defined below) including approximately 147,135 square feet of Net Rentable Area (as
defined below) representing the entire building known as 16666 Northchase (“Northchase Building”)
and approximately 87,611 square feet of Net Rentable Area (as defined below) representing the
entire building known as 263 N. Sam Houston Parkway (“263 Building”) (the Northchase Building and
the 263 Building being collectively referred to as the “Building” or “Buildings”), and situated on
the real property described on Exhibit A attached to this Lease (the “Land”). The Building,
together with the Land, the parking garage (“Garage”) located on the Land between the 16666
Northchase Building and the 263 Building, all other improvements situated on the Land and directly
benefiting the Building shall collectively be referred to herein as the “Project.” The portion of
the Project currently containing usable office space is hereinafter called the “Leased Premises”
and is shown on the floor plan(s) contained in Exhibit B. Landlord acknowledges and agrees that
Tenant shall have the right to utilize all available storage space in the Buildings, and all
available Building riser space for the installation of cabling, wiring, conduit, piping, or any
other equipment and/or appurtenance to serve the Leased Premises.

     1.1.2 Net Rentable Area. "Net Rentable Area” refers to the square footage area or areas within
the Building determined by a recent remeasurement by Landlord.

     1.1.3 Amount of Net Rentable Area. Landlord and Tenant hereby agree that the Net Rentable
Area of the Leased Premises is Two Hundred Thirty-Four Thousand Seven Hundred Forty-Six (234,746)
square feet and Landlord and Tenant each agree to be bound by said calculation.

     1.2 Term. Subject to and upon the terms and conditions set forth herein, the term of this
Lease (the “Term”) shall commence upon full execution of the Lease by both parties (the
"Commencement Date”). Tenant acknowledges that Landlord shall not be required to deliver the
Leased Premises until the 31st day after the Commencement Date (“Delivery Date”);
provided, however, Tenant (its agents, employees, contractors and consultants) may enter the
Project at all reasonable times following the Commencement Date for all purposes necessary for
planning of the Initial Tenant Work and performing inspections and surveys at the Project. Tenant
will commence payment of Base Rental and Tenant’s Forecasted Additional Rent (as hereinafter
defined) on March 1, 2008 (referred to herein as the “Rent Commencement Date”). The Term shall
expire on February 28, 2018.

 

 

     1.3 Use. The Leased Premises shall be used and occupied by Tenant (and its assignees and
subtenants) solely for general office purposes including, without limitation, employee training
centers, employee lunch rooms, work-out facilities, kitchen facilities (including vending machines
for Tenant’s exclusive use), and for other legally permitted uses consistent with the character of
Class “A” and Class “B” office buildings in the Greenspoint area of Houston, Texas.

II

     2.1 Rental Payments.

     2.1.1 Payment. Commencing on the Rent Commencement Date and continuing thereafter throughout
the Term, Tenant shall pay the Base Rental as described in Section 2.2 and Tenant’s Forecast
Additional Rental. (The Base Rental, Tenant’s Forecast Additional Rental, Tenant’s Additional
Rental, and all other amounts payable to Landlord hereunder are sometimes hereinafter collectively
referred to as “Rent”). The Base Rental together with Tenant’s Forecast Additional Rental shall be
due and payable in equal monthly installments as provided below on the first day of each calendar
month during the Term commencing on the Rent Commencement Date, and Tenant shall so pay the Base
Rental and Tenant’s Forecast Additional Rental to Landlord at Landlord’s address (or such other
address as may be designated by Landlord from time to time) monthly in advance. Notwithstanding
anything stated herein to the contrary, prior to the Rent Commencement Date, Tenant shall have no
obligation to pay any Rent whatsoever.

     2.1.2 Proration. If the Rent Commencement Date is other than the first day of a calendar
month or if this Lease terminates on a day other than the last day of a calendar month, then the
Rent for such month or months shall be prorated and, in the case of the first month, Rent is due,
paid in advance. The payment for such prorated month shall be calculated by multiplying the Rent
by a fraction, the numerator of which shall be the number of days of the Term occurring during said
commencement or termination month, as the case may be, and the denominator of which shall be three
hundred sixty-five (365).

     2.1.3 No Offset. Except as expressly provided in this Lease, Tenant shall pay all Rent that
becomes payable by Tenant to Landlord under this Lease at the times and in the manner provided in
this Lease without demand, set-off or counterclaim. All Rent owed by Tenant to Landlord under this
Lease shall bear interest from the date that is ten (10) days after it is due until paid at the
lesser of (i) two percent (2%) above the per annum “base rate” (or if the “base rate” is
discontinued, the rate announced as that being charged to the most credit worthy commercial
borrowers for ninety (90) day unsecured loans) announced by Citibank, N.A., its successors and
assigns (or, if such bank is no longer in existence or publishing such rates, an equivalent bank as
reasonably determined by Landlord) from time to time, or (ii) the maximum lawful contract rate per
annum.

     2.2 Base Rental. Throughout the Term, Tenant shall pay an annual base rental (the “Base
Rental") equal to the Base Rate set forth below. The “Base Rental” is as follows:

	 	 	 
	Rental Period	 	Base Rate
	Months 1-60
	 	$2,758,265.52
	 
	 	($229,855.46 monthly)
	 
	 	 
	Months 61-120
	 	$2,922,587.76
	 
	 	($243,548.98 monthly)

2

 

     2.3 Additional Rental.

     2.3.1 Tenant’s Forecast Additional Rental. Commencing with the calendar year in which the
Rent Commencement Date occurs, and continuing thereafter for each calendar year during the Term,
Landlord shall present to Tenant prior to the beginning of said calendar year (or for the calendar
year in which the Term commences, prior to the Rent Commencement Date) a statement of Landlord’s
reasonable estimate of Tenant’s Additional Rental (“Tenant’s Forecast Additional Rental”) for such
calendar year (or portion thereof) which shall be based upon a detailed budget approved annually by
Tenant or Tenant’s representative (“Operating Expense Budget”) in accordance with the procedures
set forth in Section 3.1.4.

     2.3.2 Operating Expenses Amount. “Tenant’s Additional Rental” means for each calendar year
the Operating Expense Amount (as defined below) for such year. “Operating Expenses Amount” means
an amount equal to (i) plus (ii), where:

	 	(i)	 	equals the amount of Operating Expenses (as defined below) for such year; and
	 
	 	(ii)	 	equals a management fee contribution equal to not greater than three percent
(3%) of the sum of the Base Rental and Tenant’s Additional Rental payable hereunder
during such year for the Leased Premises.

     2.3.3 Statement to Tenant. Within one hundred fifty (150) days, or as soon thereafter as
practical, after the end of each calendar year during the Term and after the termination of this
Lease (Landlord and Tenant agreeing that the provisions of this Section 2.3.3 shall survive the
termination of this Lease), Landlord shall provide Tenant a statement showing the actual Operating
Expenses for said calendar year compared against the Operating Expense Budget and a statement
prepared by Landlord comparing Tenant’s Forecast Additional Rental with Tenant’s Additional Rental.
If Tenant’s Forecast Additional Rental exceeds Tenant’s Additional Rental for said calendar year,
Landlord shall refund to Tenant the excess paid by Tenant within thirty (30) days after providing
Tenant the statement. If Tenant’s Additional Rental exceeds Tenant’s Forecast Additional Rental
for said calendar year, Tenant shall pay to Landlord within thirty (30) days of receipt of the
statement an amount equal to such difference.

     2.4 Operating Expenses.

     2.4.1 Definition. “Operating Expenses” means all actual expenses, actual costs and
disbursements of every kind and nature relating to or incurred or paid in connection with the
operation of the Project, computed on an accrual basis and determined in accordance with generally
accepted accounting principles consistently applied, including but not limited to, the following:

	 	(i)	 	wages and salaries of all persons which are engaged in the operation,
maintenance or access control or security of the Project, including all taxes,
insurance, and benefits relating thereto;
	 
	 	(ii)	 	the cost of all supplies, tools, equipment, and materials used in the operation
and maintenance of the Project or security for the Project;
	 
	 	(iii)	 	the actual cost of all utilities for the Project, including but not limited
to, the cost of water and power for heating, lighting, air conditioning, and
ventilating the Project excluding any “mark-up” overhead or other costs in excess of
the amount billed by the applicable provider;

3

 

	 	(iv)	 	the cost of all maintenance and service agreements for the Project and the
equipment therein in existence as of the Commencement Date and entered into in
accordance with Section 3.1.4, including but not limited to, access control, window
cleaning, elevator maintenance, janitorial service, and security services;
	 
	 	(v)	 	the cost of repairs and general maintenance, excluding (a) repairs and general
maintenance paid by proceeds of insurance, by Tenant or by other third parties, and (b)
alterations attributable solely to Tenant;
	 
	 	(vi)	 	amortization of the cost of capital investment items that are installed for the
purpose of reducing Operating Expenses or complying with governmental requirements
enacted after the date of this Lease;
	 
	 	(vii)	 	the cost of casualty and liability insurance applicable to the Project and
Landlord’s personal property used in connection therewith and the cost of deductibles
paid on claims made by Landlord;
	 
	 	(viii)	 	all taxes, assessments, and governmental charges attributable to the Project and paid
by Landlord, whether federal, state, county, or municipal and whether imposed by taxing
districts or authorities presently taxing the Project or by others subsequently created
or otherwise, excluding, however, (a) taxes, assessments and charges on any tenant
improvements in excess of Building standard, and (b) federal and state taxes on income,
death taxes, franchise taxes, and any taxes imposed or measured on or by the income of
Landlord from the operation of the Project or imposed in connection with any change of
ownership of the Project; provided, however, that if at any time during the Term, the
present method of taxation or assessment shall be so changed that the whole or any part
of the taxes, assessments, levies, impositions or charges now levied, assessed or
imposed on real estate and the improvements thereof shall be changed and as a
substitute therefore, or in lieu of an addition thereto, taxes, assessments, levies,
impositions, or charges shall be levied, assessed, or imposed wholly or partially as a
capital levy or otherwise on the rents received from the Project or the Rent reserved
herein or the revenue of the Landlord or any part thereof, then such substitute or
additional taxes, assessments, levies, impositions or charges, to the extent so levied,
assessed, or imposed, shall be deemed to be included within the Operating Expenses to
the extent that such substitute or additional tax would be payable if the Project were
the only property of the Landlord subject to such tax if Landlord can reasonably
demonstrate that such tax is in substitution of ad valorem taxes and only to the extent
ad valorem taxes attributed to the Project are reduced;
	 
	 	(ix)	 	all landscape maintenance costs for the Project; and
	 
	 	(x)	 	any lease payments made by Landlord for any equipment used in the operation,
maintenance or security of the Project (provided that if such equipment is not used
exclusively at the Project, then such lease payments included as an Operating Expense
shall be equitably allocated among all such projects where such equipment is used such
that only the equitably allocated portion of such lease expenses is included as an
Operating Expense hereunder), excluding, however, any part of such lease payments that
constitutes capital expenditures under generally accepted accounting principles, except
as provided in clause (vi) of this Section 2.4.1.

4

 

     2.4.2 Exclusions. Notwithstanding anything to the contrary contained in the Lease, the
following items shall be excluded from the calculation of Operating Expenses:

	 	(i)	 	Corporate Overhead. All costs associated with the operation of the business of
the entity which constitutes “Landlord” or “Landlord’s managing agent” (as
distinguished from the costs of the operations of the Project), including but not
limited to, Landlord’s or Landlord’s managing agent’s general corporate overhead and
general administrative expenses, legal, risk management, and corporate and/or
partnership accounting and legal costs, mortgages, debt costs or other financing
charges, asset management fees, administrative fees, any costs that would normally be
considered included in a management fee (e.g., property accounting charges, local area
network and wide area network charges, travel expenses for company meetings or
training, etc.), placement/recruiting fees/costs for employees whether they are
assigned to the Project or not, employee training programs, real estate licenses and
other industry certifications, health/sports club dues, employee parking and
transportation charges, tickets to special events, costs of any business licenses
regardless if such costs are considered a form of real estate tax, costs of bringing
and defending any lawsuits, costs of selling, syndicating, financing, mortgaging or
hypothecating any of Landlord’s interests in the Project, bad debt loss, rent loss or
any reserves thereof, and costs incurred in connection with any disputes between
Landlord and/or Landlord’s management agent and their employees and providers of goods
and services to the Project;
	 
	 	(ii)	 	Executive / Unrelated / Off-site Salaries. Wages, salaries, fees, fringe
benefits, and any other form of compensation paid to any executive employee of Landlord
and/or Landlord’s managing agent above the grade of “Building Manager” as such term is
commonly understood in the property management industry, provided, however, all wages,
salaries and other compensation otherwise allowed to be included in Operating Expenses
shall also exclude any portion of such costs related to any employee’s time devoted to
other efforts unrelated to the maintenance and operation of the Project;
	 
	 	(iii)	 	Competitively Bid. Any amount paid by Landlord or Landlord’s managing agent
to a subsidiary or affiliate of Landlord or Landlord’s managing agent, or to any party
as a result of a non-competitive selection process, for management or other services to
the Project, or for supplies or other materials, to the extent the cost of such
services, supplies, or materials exceed the cost that would have been paid had the
services, supplies or materials been provided by parties unaffiliated with the Landlord
or Landlord’s managing agent on a competitive basis and are consistent with those
incurred by similar buildings in the same metropolitan area in which the Project is
located unless Tenant has specifically approved the terms and conditions of such
contract;
	 
	 	(iv)	 	Ground Lease. Any rental payments and related costs pursuant to any ground
lease of land underlying all or any portion of the Project, and any costs related to
any reciprocal easement agreement, and/or covenant, condition and restriction
agreement;
	 
	 	(v)	 	Office & Parking Charges. Any office rental and any parking charges, either
actual or not, for the Landlord’s and/or Landlord’s managing agent’s management,
engineering, maintenance, security, parking or other vendor personnel, it being agreed
that such personnel shall be entitled to park in the Garage for no cost and shall not
pay rental for occupancy of any portion of the Project utilized in connection with
providing management services required pursuant to Section 3.1(xiv);

5

 

	 	(vi)	 	Building Defects. Any costs incurred in connection with the original design or
construction of the Project or any major changes to same, including but not limited to,
additions or deletions of floors, renovations of the common areas (except as otherwise
expressly permitted under this Lease), correction of defects in design and/or
construction of the Project including defective equipment;
	 
	 	(vii)	 	Capital. All costs of a capital nature, including but not limited to, capital
improvements, capital repairs, capital equipment, and capital tools, all as determined
in accordance with generally accepted accounting principles, consistently applied, and
sound management practices, except (i) any capital improvement made to the Building
which actually reduces Operating Expenses, amortized on a straight-line basis,
including interest at the lesser of the interest rate actually paid by Landlord or
seven percent (7.0%) per annum, over the improvement’s useful life in accordance with
generally accepted accounting principles, provided, however, the annual amortization
shall not exceed the annual amount of Operating Expenses actually saved as a result of
such capital improvement, or (ii) capital expenditures required by government
regulation or law enacted after the Commencement Date, the amount of such costs to be
amortized on a straight-line basis, with interest at the lesser of the interest rate
actually paid by Landlord or seven percent (7.0%) per annum, over the asset’s useful
life in accordance with generally accepted accounting principles to the extent such
costs are equal to or in excess of $100,000 in any calendar year (amounts less then
$100,000 shall be fully includible in Operating Expenses for the current year);
	 
	 	(viii)	 	Other Capital. Rentals and other related expenses incurred in leasing air
conditioning systems, elevators or other equipment, the cost of which if purchased
would be excluded from Operating Expenses as a capital cost, excepting from this
exclusion equipment not affixed to the Project which is used in providing janitorial or
similar services and, further excepting from this exclusion such equipment rented or
leased to remedy or ameliorate an emergency condition in the Project;
	 
	 	(ix)	 	Building Codes/ADA. Any cost incurred in connection with upgrading the Project
to comply with insurance requirements, life safety codes, ordinances, statutes, or
other laws in effect prior to the Commencement Date, including, without limitation, the
Applicable Laws (as hereinafter defined), including penalties or damages incurred as a
result of non-compliance;
	 
	 	(x)	 	Hazardous Material. Any cost or expense related to monitoring, testing,
removal, cleaning, abatement or remediation of any Hazardous Materials (as hereinafter
defined), including toxic mold, in or about the Project or real property, and
including, without limitation, hazardous substances in the ground water or soil other
than caused by Tenant;
	 
	 	(xi)	 	Other Taxes. Landlord’s gross receipts taxes for the Project, personal and
corporate income taxes, inheritance and estate taxes, other business taxes and
assessments, franchise, gift and transfer taxes, and all other real estate taxes, in
all cases to the extent such taxes relate to a period payable or assessed outside the
term of the Lease;
	 
	 	(xii)	 	Advertising/Promotion/Gifts. All advertising and promotional costs including
any form of entertainment expenses, dining expenses, any costs relating to tenant or
vendor relation programs including flowers, gifts, luncheons, parties, and other social
events but excluding any cost associated with life safety information services, unless
specifically instructed by Tenant to incur such costs;

6

 

	 	(xiii)	 	Special Assessment. Special assessments or special taxes initiated as a means of
financing improvements to the Project and the surrounding areas thereof;
	 
	 	(xiv)	 	Fines & Penalties. Any fines, costs, late charges, liquidated damages,
penalties, tax penalties or related interest charges, imposed on Landlord or Landlord’s
managing agent;
	 
	 	(xv)	 	Contributions/Dues/Subscriptions. Any costs, fees, dues, contributions or
similar expenses for political, charitable, industry association or similar
organizations, as well as the cost of any newspaper, magazine, trade or other
subscriptions, excepting the Project’s annual membership dues in the local Building
Owners and Managers Association;
	 
	 	(xvi)	 	Art. Costs, other than those incurred in ordinary maintenance and repair, for
sculptures, paintings, fountains or other objects of art or the display of such items;
	 
	 	(xvii)	 	Insurance. Costs incurred by Landlord for the repair of damage to the Project caused
by fire, windstorm, earthquake or other casualty, condemnation or eminent domain to
include terrorism or environmental other than commercially reasonable deductibles (as
requested from time-to-time by Tenant, subject to approval by Landlord’s mortgagee)
initially not to exceed $10,000 per occurrence ($50,000 with respect to earthquake,
flood and terrorism);
	 
	 	(xviii)	 	Other Insurance. Any increase in the cost of Landlord’s insurance caused by a
specific use by Landlord;
	 
	 	(xix)	 	Reserves. Any reserves of any kind.

     2.4.3 Landlord and Tenant agree that the provisions of Sections 2.4.1 and 2.4.2 hereof shall
be modified to the extent Landlord and Tenant expressly agree in writing otherwise to share the
cost of a specific item in connection with the annual approval of the budget pursuant to Section
3.1.4 hereof.

     2.4.4 Audit.

	 	(i)	 	The payment by Tenant of any of Tenant’s Additional Rental or other Rent
charged to Tenant hereunder pursuant to this Lease shall not preclude Tenant from
questioning the accuracy of any statement provided by Landlord provided such question
is submitted within the applicable time limits set forth in this Lease.
	 
	 	(ii)	 	Landlord shall provide to Tenant in substantial detail each year the
calculations performed to determine Tenant’s Operating Expenses Amount for the Project
in accordance with the applicable provisions of this Lease. Landlord shall show the
total Operating Expenses by account for the Project and all adjustments corresponding
to the requirements as set forth herein. Landlord shall also provide in reasonable
detail its calculation of Tenant’s Additional Rental or other Rent charged to Tenant
hereunder.
	 
	 	(iii)	 	Provided Tenant is not in default under the terms of this Lease (including the
payment by Tenant of Tenant’s Additional Rental within the time period specified in
Section 2.3.3) and subject to this paragraph, Tenant, at its sole expense, shall have
the right once per calendar year during the Term to employ a certified public
accountant (on an hourly not a contingent fee arrangement) to audit Landlord’s books
and records, relating to Tenant’s Additional Rental as well as other Rent payable by
Tenant pursuant to this Lease to ensure that Landlord is complying with the applicable
Lease provisions. This audit must

7

 

	 	 	 	take place on a mutually agreeable date during reasonable business hours at
Landlord’s office at the address stated above and only after Tenant has given
Landlord at least ten (10) business days prior written notice of the date and time
Tenant desires to commence such audit. Landlord agrees to maintain all applicable
records until the expiration of Tenant’s rights to audit said records. If Tenant
elects to exercise this right, Tenant must do so within twelve (12) months after the
date Landlord delivers to Tenant the statements described in Section 2.3.3 or Tenant
shall be deemed to have accepted the amount of Tenant’s Additional Rental or other
Rent charged to Tenant hereunder as presented by Landlord. If Tenant elects to
audit Landlord’s books and records, Landlord shall have the right to deliver to
Tenant an audit of the Operating Expenses for the immediately preceding calendar
year prepared by an accounting firm of national prominence. If Tenant elects to
proceed with such audit, and such audit reflects a difference from Landlord’s
calculation of the amount of Tenant’s Additional Rental or other Rent charged to
Tenant hereunder, the parties will attempt to reconcile their respective
calculations. If such audit indicates that there has been an overstatement in
Landlord’s calculation of the amount of Tenant’s Additional Rental or other Rent
charged to Tenant hereunder, Landlord shall, within ten (10) days after its receipt
of such audit, refund any excess payment of Tenant’s Additional Rental or other
Rent charged to Tenant hereunder to Tenant. If in fact there has been an
overstatement in Landlord’s calculation of the amount of Tenant’s Additional Rental
or other Rent charged to Tenant hereunder of $50,000 or more, then in addition to
refunding any excess payments of Tenant’s Additional Rental or other Rent charged to
Tenant hereunder made by Tenant, Landlord shall reimburse Tenant for the reasonable
costs and expenses incurred by Tenant in causing such audit to be performed
specifically excluding any costs based on a contingent fee arrangement. If in fact
there has been an understatement in Landlord’s calculation of the amount of Tenant’s
Additional Rental or other Rent charged to Tenant hereunder, Tenant shall pay the
amount of the understatement to Landlord. In the event an audit reveals the
overstatement or understatement of Landlord’s calculation of the amount of Tenant’s
Additional Rental or other Rent charged to Tenant hereunder, Landlord or Tenant as
applicable, may request the audit of the item or items giving rise to such error for
the two (2) calendar years preceding the year which is the subject of the audit. In
addition to the foregoing, if any audit by Landlord or its agents indicates that the
amount of Tenant’s Additional Rental or other Rent charged to Tenant hereunder paid
for any calendar year was greater than the amount of Tenant’s Additional Rental or
other Rent charged to Tenant hereunder charged by Landlord, Landlord shall refund
any excess payment of Tenant’s Additional Rental or other Rent charged to Tenant
hereunder within ten (10) days after its receipt of such audit.

III

     3.1 Services.

     3.1.1 Description. Landlord shall operate and maintain the Project in accordance with the
standards customarily followed in the operation and maintenance of Class “A” projects in the
Greenspoint area of Houston, Texas (“Comparable Projects”), and shall furnish to Tenant and the
Project during the Term:

	 	(i)	 	domestic water and sewer at all points of supply for the Project;
	 
	 	(ii)	 	central heat and air conditioning in season, subject to curtailment as required
by governmental laws, rules, or regulations, in such amounts as are necessary for
reasonable

8

 

	 	 	 	comfort under load conditions which do not exceed occupancy of one person per 275
square feet of Net Rentable Area in the Leased Premises and based on the power
provided in accordance with this Section 3 and are otherwise customary for
Comparable Projects, all as more particularly described on Exhibit C;

	 	(iii)	 	electric lighting service for the Project in the manner and to the extent
deemed by Tenant to be appropriate;
	 
	 	(iv)	 	janitorial service on a five (5) day week basis (exclusive of Holidays, as
defined in Exhibit C) in accordance with the janitorial specifications promulgated by
Tenant from time-to-time but in any event consistent with Comparable Projects;
	 
	 	(v)	 	subject to Section 6.6 below, equipment and personnel to limit access to the
Project including, without limitation, security personnel to escort Tenant’s and
employees to their cars after normal business hours. Tenant shall have the right to
designate the provider of such security services and the scope and quantity of such
services;
	 
	 	(vi)	 	sufficient electrical capacity is located at the core of each floor of the
Leased Premises to operate typewriters, personal computers, calculating machines,
copiers, fax machines and other machines of low electrical consumption (120/208 volts,
single phase) and equipment of high voltage electrical consumption (277/480 volt) to
the extent that the total design load of electrical voltage within the Leased Premises
does not exceed an average of 6.5 watts per square foot of Net Rentable Area (such
electrical design load to be hereinafter referred to as the “Building Standard Rated
Electrical Design Load”), such Building Standard Rate Electrical Design Load to be
allocated between low electrical voltage and high electrical voltage as Tenant may
determine. In addition to the foregoing, Landlord agrees that the high voltage
(277/480 volt) power available in the Building standard bus duct at each floor on which
the Leased Premises are located will have a total (i.e., inclusive of the
above-described Building Standard Rated Electrical Design Load) capacity available to
Tenant of at least 1.5 watts per square foot of Rentable Area contained on such floor.
Tenant may install such additional equipment (at Tenant’s sole cost, including the cost
to design, install, maintain and replace the additional electrical equipment (including
the meters), but subject to possible reimbursement pursuant to Exhibit D if part of the
Initial Tenant Work), provided such installation is compatible with the existing
Building systems and will not be burdensome to the Building or to Landlord, in
Landlord’s reasonable opinion, and Tenant shall pay during the Term all actual
operating costs related to such additional equipment (including, without limitation,
the cost of electricity, water or other services consumed through, or in connection
with, the additional electrical equipment). The method of design and installation of
any additional electrical equipment (including any related meter) required by Tenant
shall be subject to the prior written approval of Landlord not to be unreasonably
withheld, conditioned or delayed and, if performed other than as a part of the Initial
Tenant Work, shall be performed by Landlord at Tenant’s sole cost and shall be subject
to Landlord’s management fee or administrative fee, as applicable, pursuant to Section
5.1.2.
	 
	 	(vii)	 	all Building standard fluorescent bulb, ballast, incandescent, and other
replacement in all areas of the Project;
	 
	 	(viii)	 	passenger elevator service to the Leased Premises twenty-four (24) hours per day
(subject to after-hours maintenance services, provided no more than one (1) passenger
elevator in

9

 

	 	 	 	each Building at a time shall be taken out of service for maintenance and repair) in
accordance with the Industry Standards listed in the Barbre Consulting, Inc. report
dated July 10, 2007;

	 	(ix)	 	fully code compliant life safety system and applicable backbone wiring in the
risers of the Building capable of receiving Tenant provided strobes, speakers and
horns;
	 
	 	(x)	 	periodic pest control or extermination services consistent with Comparable
Projects or as otherwise required by Tenant;
	 
	 	(xi)	 	window washing services consistent with Comparable Projects and as otherwise
required by Tenant;
	 
	 	(xii)	 	routine maintenance and electrical lighting service for the Project consistent
with Comparable Projects;
	 
	 	(xiii)	 	maintenance and repairs as detailed in Section 5.2 hereof including all such repairs
and replacements as may be required to maintain the Project in a condition comparable
to Comparable Projects;
	 
	 	(xiv)	 	management of the Building by a property management firm, including, at
Tenant’s sole discretion, an on-site property manager for the Project (in which case
Tenant shall provide an appropriate on-site office for such manager at no cost), Monday
through Friday from 8:00 a.m. to 5:00 p.m., exclusive of Holidays. Tenant hereby
approves of LPC Commercial Services, Inc. (“LPC”) as the property management company
for the Project. Any other property management company shall require Tenant’s prior
written approval unless such company has at least 5,000,000 square feet of net rentable
area under management located in Class “A” multi tenant office buildings. Any
individual employed by the property management firm, LPC, or otherwise, as manager of
the Project must have at least five years experience in the management of office
buildings of at least 150,000 rentable square feet and otherwise shall be subject to
Tenant’s prior written approval which may be withheld if Tenant reasonably determines
that such individual cannot provide professional and competent management of the
Project; and
	 
	 	(xv)	 	any other services and amenities reasonably requested by Tenant (the cost of
which shall be reimbursable pursuant to Section 2.4 hereof).

     3.1.2 Service Modifications. Tenant shall have the right to take over the responsibility of
providing any of the services listed in this Section 3.1 upon no less than sixty (60) days prior
written notice, provided Tenant shall continue to provide such services at or above the
requirements of the Lease, as determined by Landlord in its reasonable discretion. Following such
sixty (60) day period, Tenant shall be relieved of any obligation to pay (or reimburse Landlord
pursuant to Section 2.4 hereof) for such services.

     3.1.3 Reasonable Efforts to Provide Utilities. To the extent the services described in
Section 3.1.1 require electricity, gas, and water supplied by public utilities, Landlord’s
covenants thereunder shall only impose on Landlord the obligation to use diligent efforts to cause
the applicable public utilities to furnish the same.

10

 

	 	3.1.4	 	Operating Expense Budget Approval and Service Meetings.
	 
	 	(i)	 	Prior to October 1, 2007 and prior to September 15th of each
calendar year thereafter, Landlord will prepare and submit a proposed Operating Expense
Budget for the coming calendar year for review and approval by the Tenant. Tenant
shall either approve or object to specific items in such proposed Operating Budget
within forty-five (45) days (or thirty (30) days regarding the initial budget submitted
October 1, 2007) of receipt thereof. If Tenant does not either approve or object
within such time period, Landlord shall give Tenant a second written notice and if
Tenant does not respond within ten (10) days thereafter, the proposed Operating Expense
Budget shall be deemed approved. Upon receipt of any objections from Tenant, Landlord
and Tenant shall meet to resolve any issues and Landlord and Tenant agree to work in
good faith to resolve such matters consistent with the terms of this Lease. In the
event Tenant and Landlord are not able to agree upon an approved Operating Expense
Budget, Landlord shall be entitled to continue to operate under the existing Operating
Expense Budget, adjusted for actual cost increases, until Tenant and Landlord are able
to agree upon an Operating Expense Budget. Landlord agrees to work with Tenant or
Tenant’s representative on an ongoing basis regarding development and implementation of
the Operating Expense Budget and to reasonably implement changes to the Operating
Expense Budget reasonably requested by Tenant. As a part of the budget approval
process, at Tenant’s request, Landlord and Tenant will review all existing service
contracts and determine which, if any need to be changed, provided Landlord shall not
be required to terminate any contract that involves the payment of any termination fees
unless Tenant agrees such fees shall be a part of Operating Expenses; provided,
however, following the Commencement Date, unless specifically authorized by Tenant to
do so, Landlord shall not enter into any service or utility contracts which cannot be
terminated, without cost, upon sixty (60) days notice.
	 
	 	(ii)	 	From time to time during the term of this Lease, but not less frequently than
monthly, representatives of Tenant and Landlord shall meet to review the services being
performed with respect to the Project. At these meetings, Tenant shall document
service interruptions, point out deficiencies in Landlord’s services and suggest ways
of improving such services. Landlord shall apprise Tenant of current developments in
services, including any changes in contractors or procedures and shall fully inform
Tenant of planned preventive maintenance shut-downs and the like. Landlord and Tenant
shall use these meetings to the end that the Leased Premises is provided with services
acceptable to Tenant in a fashion acceptable to Tenant without undue friction between
Landlord and Tenant and in a spirit of mutual cooperation. Other informal meetings
shall be held from time to time upon request of Landlord’s or Tenant’s representatives
to correct service difficulties or procedures as they arise or as may be necessary to
facilitate communication between Landlord and Tenant.

     3.1.5 Interruption of Services. Except as provided in this Section 3.1.5, if any of the
services described in Section 3.1.1 or any of the machinery or equipment in the Project should
cease to function properly, break down or be intentionally turned off for testing or maintenance
purposes, Tenant shall have no claim for abatement or reduction of Rent or damages, nor shall
Tenant be relieved of its obligations under this Lease, nor shall such condition be construed as an
eviction of Tenant; provided, however, upon such failure or cessation, Landlord shall exercise all
efforts which a reasonably prudent landlord would be expected to exercise under the circumstances
to remove the cause of the failure or cessation and restore the service promptly.

11

 

     3.1.6 Abatement. Notwithstanding anything stated herein to the contrary, in the event of a
failure of Landlord to provide those services as described in Sections 3.1.1. (i), (ii), (iii),
(vi), and (viii) or if Tenant is unable to utilize fifty percent (50%) or more of the parking
spaces (collectively, “Failure of Services” or, individually, a “Failure of Service”) and the event
is not the subject of the provisions of Section VI; and such condition(s) exist(s) for three (3)
consecutive business days after Tenant provides written notice of the condition to Landlord, then
all Rent shall abate proportionately to the extent the Leased Premises are rendered Untenantable
(as defined in Section 6.3.5 below) until the day the Failure of Service has been restored by
Landlord to the condition required pursuant to the terms of this Lease. For example, if 46,949
square feet of Net Rentable Area is rendered Untenantable in excess of three (3) consecutive
business days, twenty percent (20%) of all Base Rental and Additional Rental shall be abated until
such interruption is restored pursuant to the terms hereof. Additionally, in the event of a
Failure of Service related to Tenant’s inability to utilize fifty percent (50%) or more of the
Parking Spaces at the Project (“Parking Failure of Service”), commencing on the fourth
(4th) business day of such Parking Failure of Service, Landlord shall reimburse Tenant
for all reasonable costs and expenses related to obtaining alternate parking and providing
transportation and security from such alternate parking area to the Project until the Parking
Failure of Service has been restored. The abatement shall commence upon the expiration of the
three (3) business day period and continue until the day the Failure of Service has been restored
by Landlord to the condition required pursuant to the terms of this Lease; provided, however, if
the condition continues for sixty (60) days, Tenant shall have the additional rights to either (i)
terminate this Lease upon fifteen (15) days written notice to Landlord which notice may only be
given after the expiration of the sixty (60) day period and before the expiration of an additional
three (3) month period, in which event Tenant will be relieved of all obligations arising after
such date hereunder or (ii) elect to restore such services by taking any reasonable and necessary
means and, if not reimbursed within thirty (30) days after written demand for payment of such
costs, including reasonable documentation thereof, offset all reasonable amounts necessary to cure
such Failure of Services against Rent. In consideration of the terms of this Section 3.1.6, Tenant
waives all rights Tenant may have at law or in equity to abate Rent or terminate this Lease based
on a Failure of Services (but excluding matters subject to Section VI).

     3.1.7 Restoration of Services by Tenant. Independent of Tenant’s other rights in Section
3.1.6, if, at any time, all or any a Failure of Services continues for one hundred twenty (120)
consecutive hours following receipt of a notice by Landlord and Tenant reasonably determines that
Landlord is not using commercially reasonable efforts to remove the cause thereof and to restore
the facility, utility and/or service as soon as possible to the levels existing prior to such
interruption, cessation or reduction, Tenant shall have the right, if curable by Tenant, to cure
such failure or breakdown for Landlord’s account and at Landlord’s expense, in which event Landlord
shall reimburse Tenant for all reasonable out-of-pocket costs incurred by Tenant in connection
therewith within ten (10) days after invoice therefor from Tenant, or, at Tenant’s election, any
amount required to be paid by Landlord to Tenant may be set off against Rent due and owing by
Tenant under this Lease.

     3.1.8 Elevator Outages. To the extent any elevator in the Northchase Building is out of
service for any reason (other than regularly scheduled maintenance or to complete the elevator
modernization program described below) for a period in excess of forty-eight (48) hours (“Grace
Period”), Tenant shall automatically receive a $500 per day credit against the next installment of
Base Rent until such time as such elevator is in operation for twenty-four (24) consecutive hours;
provided, however, in the event any elevator is out of service for seven (7) days (in the
aggregate, whether consecutively or otherwise) during a calendar year, the Grace Period shall no
longer be applicable in such calendar year and the rent credit shall immediately accrue upon a
service outage described above. In the event Landlord completes a comprehensive industry standard
elevator modernization program regarding the Nortchchase Building reasonably approved by Tenant,
the rent credit provisions contained in this Section 3.1.8 shall automatically terminate.

12

 

     3.2 Keys and Locks. Tenant, at Tenant’s sole cost and expense, shall have the right to
install, change, replace and control the use of, entry locks or access devices to the Project and
locks within the Leased Premises. Tenant shall provide Landlord with a copy of any such lock or
access device allowing entry to the Project, and upon termination of this Lease, shall furnish
Landlord keys to any locks on doors and the combination for all safes, safe cabinets and vault
doors, if any, in the Project.

     3.3 Signage, Graphics and Building Directory. Subject to all applicable governmental
approvals and the approval of the Greenspoint Property Owner’s Association (“ARC”), Tenant, at
Tenant’s sole cost and expense shall be entitled to exclusive identity and signage rights to the
Project, including, without limitation, (1) building top lighted signage (“Top Signage”), (2)
exclusive monument signage, and (3) signage in the Building. Tenant shall be entitled to exclusive
use of the Building Directories serving the Buildings. Such exterior signage shall be subject to
the criteria promulgated from time to time by the ARC, the current version being attached hereto as
Exhibit E and the additional requirements set forth on Exhibit E. Landlord shall have the right to
approve the design of the Top Signage (except for the design shown on Schedule 3.3 hereof which is
hereby approved), such approval not to be unreasonably withheld, delayed or conditioned.

IV

     4.1 Care of the Leased Premises. Tenant shall not commit or allow to be committed any waste
or damage to any portion of the Leased Premises or the Project, and at the termination of this
Lease, by lapse of time or otherwise, Tenant shall deliver up the Leased Premises to Landlord in as
good condition as existed on the date of possession by Tenant, ordinary wear and tear, permitted
alterations, casualty and repairs and maintenance which are the obligation of Landlord pursuant to
this Lease excepted. Upon such termination of this Lease, Landlord shall have the right to reenter
and resume possession of the Leased Premises.

     4.2 Entry for Repairs and Inspection. Upon reasonable notice to Tenant, Landlord and its
contractors, agents, or representatives shall have the right to enter into and upon any part of the
Leased Premises upon reasonable prior notice and accompanied by a representative of Tenant, at all
reasonable hours to inspect, maintain or clean the same, make repairs, alterations or additions
thereto, show the same to prospective purchasers, prospective lenders and such purchasers’ and
lenders’ consultants, and to prospective tenants, but only during the last 12 months of the Term to
prospective tenants, or for any other purpose, as Landlord may reasonably deem necessary or
desirable, and Tenant shall not be entitled to any abatement or reduction of Rent by reason
thereof. In exercising this right, Landlord agrees to use reasonable efforts not to interfere with
the conduct of Tenant’s business in the Leased Premises.

     4.3 No Nuisance. Tenant shall conduct its business and control its agents, contractors, and
employees in such manner so as not to create any nuisance or interfere with, annoy or disturb any
other tenant or Landlord in its operation of the Project.

     4.4 Laws and Regulations. Tenant and Landlord shall comply with, and Tenant and Landlord
shall cause its agents, contractors, and employees to comply with, all laws, ordinances, orders,
rules and regulations (state, federal, municipal and other agencies or bodies having any
jurisdiction thereof) relating to the use, condition or occupancy of the Leased Premises or the
conduct of Tenant’s or Landlord’s, as applicable, business therein.

     4.5 Legal Use and Violations of Insurance Coverage. Tenant shall not occupy or use the Leased
Premises, or permit any portion of the Leased Premises to be occupied or used, for any business or
purpose which is unlawful, disreputable or deemed to be hazardous on account of fire or other
hazards.

13

 

     4.6 Compliance With Laws. Notwithstanding anything to the contrary contained in the Lease,
Landlord represents that to its knowledge that as of the Commencement Date, subject to the
Condition Surveys for the Buildings (defined on Schedule 4.6) (“Condition Surveys”), the Project
complies in all material respects with all applicable laws, ordinances, statutes, regulations,
orders, rules and restrictions relating thereto including, without limitation, the Americans with
Disabilities Act of 1990, as amended, and the Clean Air Act Amendments of 1990 and the Texas
Accessibility Standards (the “Applicable Laws”), and that the existing uses thereof do not
currently violate the provisions of any Applicable Laws relating thereto. Tenant hereby represents
to its knowledge that, except as disclosed on the Condition Surveys and information provided by
Landlord and Landlord’s agents, it is not aware of any material compliance violations of Applicable
Laws related to the Project. Landlord shall maintain and operate the Building in accordance with
all Applicable Laws. Landlord shall be solely responsible for the payment of any funds needed to
correct or change any system or structural element of the Building so as to comply with all
Applicable Laws, and if Tenant demonstrates that any portion of the Project was in violation of
Applicable Laws as of the Commencement Date, Tenant shall have no obligation to pay for or
reimburse Landlord for the cost to cause such portion of the Project to be compliant with
Applicable Laws either directly or as an Operating Expense. Additionally, Landlord hereby
indemnifies Tenant and agrees to defend and hold Tenant harmless from and against any and all
obligations, liabilities, claims, suits, debts, accounts, liens or encumbrances, and all costs and
expenses, including reasonable attorneys’ fees relating thereto, that Tenant may suffer or incur
and that result from any breach of any representation made by Landlord above. Should the Building
not be in compliance with the Applicable Laws due to a change in such laws becoming effective after
the Effective Date, Landlord shall make any changes or alterations required to so comply at
Landlord’s cost and expense, such amounts to be included as Operating Expenses; however, to the
extent such costs are properly classified as capital in nature, they shall be amortized as
otherwise provided in Section 2.4 of this Lease.

V

     5.1 Leasehold Improvements.

     5.1.1 As-Is. Tenant agrees that, except as set forth herein, it will accept the Leased
Premises in the “As-Is Condition” (defined below) on the Rent Commencement Date without recourse to
Landlord, subject to the terms of this Lease. After the Delivery Date, Tenant along with its
employees, suppliers, contractors, subcontractors and agents, shall be permitted to enter the
Buildings at any time for all purposes, including, without limitation, planning, commencing and
completing the construction and installation of the initial improvements in the Leased Premises
(the “Initial Construction”). On the Delivery Date, Landlord hereby agrees to tender the Project
in a “broom-clean” condition, free and clear of all personal property (including, without
limitation, all of the previous occupant’s equipment, furniture, and files) other than (i) all
furniture currently existing in all conference rooms and video conference rooms in the Building,
(ii) the back-up generators and supplementary air conditioning units currently existing at the
Project (i.e., the UPS systems, Liebert Units, and III Exterior Air Conditioning Equipment), (iii)
all furniture and equipment, including all racks and terminations but excluding all servers and
phone systems, existing in all Data Centers and IDF Closets in the Building, and (iv) all security
and access control equipment (including cameras) at the Project (collectively, “Retained
Personalty”). Following the Delivery Date, Landlord shall provide to Tenant and Tenant shall
accept a Bill of Sale transferring all right, title, and interest in the Retained Personalty for no
additional consideration in its current As-Is condition without warranty. Additionally, the
Buildings shall be tendered to Tenant on or before February 28, 2008 with completely operational
HVAC certified in good working order by the Landlord, a one to one relationship of return air to
supply air assuming a return air velocity of no greater than 1,000 feet per minute through all
return air openings, compliance with outside air and air quality based on ASHRAE 62-89, life safety
strobe lights in all restrooms and public areas, electrical supply and plumbing systems capable of
supplying Tenant with the services identified in

14

 

Section 3 of this Lease, and with all existing base building improvements free of all building
code violations including City, State, Federal, and all other Authorities having jurisdiction (the
“As-Is Condition”). Should the base building areas, structural and core elements, above-ceiling
improvements related to the existence of penetrations, non-plenum cables and PVC, and other
elements requiring building and fire code compliance not be delivered to Tenant on the Delivery
Date in accordance with the provisions of this Section 5.1.1, Landlord agrees to perform necessary
work to provide the “As-Is Condition” as soon as reasonably possible but in no event later than
February 28, 2008 at its sole cost and expense without charge to Tenant or to any Allowances of
Tenant (and such costs shall not be included as Operating Expenses); provided, however, Landlord
shall not be obligated to replace any items that Tenant has indicated pursuant to the Tenant Space
Plan (defined below), and the Tenant Working Drawings (defined below) will be replaced as part of
the Initial Tenant Work. If Landlord fails to perform the necessary work to provide the “As-Is
Condition” or the Landlord Work (defined in Section 5.3 below) on or before February 28, 2008,
Tenant may perform such work on Landlord’s behalf and Landlord shall reimburse Tenant (which
reimbursement may be effected through the withholding of or offsetting against Rent) for all
reasonable sums expended in performing such work and/or Tenant may pursue all other remedies at law
or in equity to which Tenant may be entitled. Nothing in this Section 5.1.1 shall be deemed or
interpreted to modify or release Landlord regarding any of its responsibilities to maintain and
repair the Project in accordance with this Lease. Landlord acknowledges that it is possible that
in order to obtain certain permits or other authorizations related to the commencement and
prosecution of the Initial Tenant Work, a portion of the work required to be completed by Landlord
to provide the “As-Is Condition” or as part of the Landlord Work may need to be completed prior to
February 28, 2008. Upon Tenant’s reasonable request, Landlord agrees to complete the work
described in the previous sentence on an accelerated basis in order to facilitate Tenant’s timely
completion of the Initial Tenant Improvements.

     5.1.2 Alterations. Tenant shall have the right to make alterations or physical additions
(including fixtures) to the Leased Premises subject to the following limitations: (i) such
alterations and additions will not impair the structural integrity of the Building, (ii) such
alterations and additions will not affect the mechanical, electrical and plumbing systems of the
Leased Premises so that they will bear a load in excess of that for which they were originally
designed, (iii) such alterations and additions shall be accomplished in a good and workmanlike
manner and in accordance with all applicable governmental requirements, (iv) Tenant obtains all
applicable governmental permits and approvals required in connection with such alterations or
additions; (v) Tenant shall deliver “as-built” plans in a CADD format for any alterations to
Landlord promptly after completion and (vi) Landlord’s approval shall be obtained, not to be
unreasonably withheld, conditioned or delayed, for any project with a cost of greater than
$150,000, provided, however if Landlord has not responded to Tenant’s request for approval within
seven (7) business days following its receipt of said request, Landlord will be deemed to have
approved such request. If Tenant, in its sole discretion, elects to engage Landlord to provide
construction management services related to any Tenant alterations in the Project, Tenant shall pay
Landlord a fee equal to ten percent (10%) of the cost to cover overhead if the work is less then
$20,000 and five percent (5%) of such cost if the work is $20,000 or more. If Tenant does not
elect to engage Landlord to provide construction management services related to any alterations in
the Project, Tenant shall be required to pay Landlord an administrative fee of one and one-half
percent (1.5%) of the cost of such alterations for Landlord’s review and oversight of the
alterations.

     5.1.3 Property of Landlord and Tenant’s Removable Property. All trade fixtures, appliances,
furniture, removable equipment, movable walls and wall systems (including without limitation,
movable partitions), furnishings, secretarial stations, movable library shelving, movable kitchen
equipment, exercise equipment and other property of Tenant that can be removed from the Leased
Premises without causing material damage to such property or to the Leased Premises or the Building
(“Tenant’s Removable Property”) shall remain the property of Tenant at all times during the Lease
Term and may be removed at any time during the Term; provided, that (i) Tenant shall remove all of

15

 

Tenant’s Removable Property on or prior to the expiration of this Lease and (ii) Tenant shall
bear the cost of any such removal performed by Tenant and of repairing any material damage to the
Leased Premises caused by any such removal. Any alterations, physical additions or improvements
other than Tenant’s Removable Property, when made to the Leased Premises by Tenant, shall at once
become the property of Landlord and shall be surrendered to Landlord upon the termination of this
Lease by lapse of time or otherwise. Notwithstanding anything stated herein to the contrary,
Tenant shall not be obligated to remove any alterations, physical additions or improvements made to
the Leased Premises except to the extent Tenant installs Unusual Facilities in the Building, at
Landlord’s option and on reasonable advance notice Tenant, shall be obligated to remove such
Unusual Facilities upon the expiration or termination of the Term. The term “Unusual Facilities”
means floor penetrations (i.e., where the cut is entirely through the slab) installed after the
Commencement Date (except for risers or similar penetrations (not exceeding five inches (5”) in
diameter) in mechanical rooms or similar areas), or other alterations, improvements or furniture
installed by Tenant following the installation of the Initial Tenant Work which would not be
customarily found in Comparable Projects (e.g., fish tanks, vertical mail systems). Raised floors
for computer rooms and the like (not to exceed 5000 square feet of Net Rentable Area) shall not
constitute Unusual Facilities.

     5.1.4 Taxes. Tenant shall be responsible for ad valorem taxes on its personal property and on
the value of the leasehold improvements in the Leased Premises to the extent that the same exceed
the allowances stated in Exhibit D (and if the taxing authorities do not separately assess Tenant’s
leasehold improvements, Landlord may make a reasonable allocation of the ad valorem taxes assessed
on the Project to give effect to this Section 5.1.4). Subject to reimbursement as an Operating
Expense, Landlord, unless otherwise directed by Tenant, shall protest all taxes, assessments, and
other charges set forth in Section 2.4.1(viii) on an annual basis using a tax consultant approved
by Tenant, such approval not to be unreasonably withheld, conditioned or delayed.

     5.2 Repairs by Landlord. Landlord shall, at its sole cost and expense, but subject to
reimbursement pursuant to Section 2.4, keep and maintain in good working order and repair, and
shall make such improvements, repairs or replacements as are necessary or appropriate to the
Project and the Leased Premises, including, without limitation, the walls, roof, foundation, all
structural components and elements of the Project, lobbies, stairs, elevators (including without
limitation, cabs and doors), corridors and corridor walls and wall treatments, carpeting,
restrooms, roofs, plateglass, parking areas, paved areas, walkways and drives, landscaping,
improvements, and all facilities, systems and equipment relating to the furnishing of services
(including mechanical, electrical, water, heating, ventilating and air conditioning, life safety
and elevators) required to be provided by Landlord pursuant to this Lease, all at such times, in
such manner and to such extent as is reasonably necessary or appropriate to maintain the Project in
good order and condition consistent with Comparable Projects. Landlord shall not charge to Tenant
any profit, overhead or supervision fee, or general condition costs (whether for review and
approval of plans and specifications, improvements, alterations, additions, renovations and/or
refurbishments or any services, except as expressly provided in this Lease).

     5.3 Landlord Work. Landlord, at its sole cost and expense and not subject to reimbursement as
Operating Expenses or otherwise, hereby agrees to complete all work listed on Schedule 5.3 in a
good and workmanlike manner on or prior to February 28, 2008 (or as otherwise indicated on Schedule
5.3 and subject to the last sentence of Section 5.1.1 above) (“Landlord Work”).

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VI

     6.1 Condemnation.

     6.1.1 Option to Terminate. If (i) either any portion or the entirety of the Northchase
Building or (ii) the entirety or more than twenty-five percent (25%) of the Net Rentable Area of
the 263 Building shall be taken or condemned for any public purpose, then, in either case, this
Lease shall, at the option of either party, cease and terminate as of the date of such taking or
condemnation. Each party shall notify the other of its election to terminate within thirty (30)
days after receipt of notice of such taking or condemnation. If only a portion of the Leased
Premises shall be so taken so as not to render the remainder Untenantable (as defined below), this
Lease shall continue in full force and effect but all Rent shall abate with respect to the portion
so taken.

     6.1.2 Distribution of Proceeds. All proceeds from any taking or condemnation affecting the
Leased Premises shall be distributed as follows:

	 	(i)	 	first, to any mortgagee(s) to the extent of any loan(s) secured by the
mortgage(s) held by such mortgagee(s);
	 
	 	(ii)	 	second, to Landlord until it receives the fair market value of the portion of
the Project so taken;
	 
	 	(iii)	 	third, to Tenant until it receives the fair market value of its unamortized
improvements and personal property taken; and
	 
	 	(iv)	 	fourth, the remainder of the award shall be paid to Landlord.

     6.2 Damages from Certain Causes. Neither Landlord nor any mortgagee(s) shall be liable or
responsible to Tenant, its agents, contractors, customers, employees, invitees, licensees, servants
or visitors for any loss or damage to any property or person occasioned by theft, fire, act of God,
public enemy, injunction, riot, strike, insurrection, war, court order, requisition or order of
governmental body or authority or any cause beyond Landlord’s control or for any damage or
inconvenience which may arise through repair or alteration of any part of the Project unless
covered by insurance required to be carried by Sections 6.4 or 6.5 below.

     6.3 Fire or Other Casualty.

     6.3.1 Notice. In the event of a fire or other casualty in the Leased Premises, Tenant shall
give notice thereof to Landlord as soon as reasonably possible.

     6.3.2 Restoration Estimate. Within forty-five (45) days following any damage or destruction
to the Project or the Leased Premises, Landlord shall obtain from a responsible contractor selected
by Landlord, an estimate (the “Restoration Estimate”) of the time required to complete the
applicable restoration or rebuilding. If Landlord fails to obtain the Restoration Estimate within
said forty-five (45) day period, Tenant may obtain the Restoration Estimate from a responsible
contractor selected by Tenant.

     6.3.3 Obligation to Rebuild. Subject to the rights of Landlord and Tenant to terminate this
Lease as set forth in Section 6.3.4 below, Landlord shall commence and prosecute any repair work
promptly and with reasonable diligence necessary to rebuild the applicable portion of the Project
to the condition that existed immediately prior to such damage or destruction. If Landlord is
obligated, or elects, to make repairs or rebuild the Project pursuant to the terms of this Section
6.3, and Landlord does

17

 

not cause the construction schedule to return to the schedule necessary to achieve completion
by the date indicated in the Restoration Estimate within thirty (30) days following written notice
from Landlord, Tenant shall have the right to terminate the Lease by giving written notice at any
time prior to completion of the restoration.

     6.3.4 Landlord and Tenant Termination Rights. Landlord and Tenant shall each have the right
to terminate this Lease if the Project is damaged or destroyed from any cause and such damage or
destruction is of such magnitude or extent as to render fifty percent (50%) or more of the Net
Rentable Area of the Leased Premises Untenantable (i.e., 117,373 square feet of Net Rentable Area
in the Building or more), and the Restoration Estimate provides that the repair or restoration of
the entire Leased Premises with Building standard improvements and the Garage cannot reasonably be
completed within three hundred sixty-five (365) days following the commencement thereof; provided
however, the rights of termination granted under this sentence shall be available to Landlord only
if the following conditions are also satisfied: the damage or destruction occurs during the last
two (2) years of this Lease and there is no Renewal Option then remaining, or if there is a
remaining Renewal Option, Tenant does not exercise the same by written notice to Landlord delivered
within thirty (30) days following receipt of Landlord’s termination notice, which renewal notice
shall include the same information as contained in a renewal notice delivered pursuant to Exhibit F
hereto. Additionally, if the Project is damaged or destroyed from any cause and such damage or
destruction is of such magnitude or extent as to render ten percent (10%) or more but less than
fifty percent (50%) of the Net Rentable Area of the Leased Premises Untenantable (i.e., 23,475
square feet of Net Rentable Area in the Building or more), and the Restoration Estimate provides
that the repair or restoration of the entire Leased Premises with Building standard improvements
cannot reasonably be completed within one hundred eighty (180) days following the commencement
thereof, Tenant may terminate the Lease. In the event either Landlord or Tenant elect to terminate
this Lease based upon the provisions of this Section 6.3.4, such party must make such election and
notify the other party of such election within thirty (30) days following the date Tenant receives
the Restoration Estimate from Landlord; otherwise, such party shall be deemed to have elected not
to terminate this Lease as a result of such damage or destruction. In the event this Lease is
terminated by either party pursuant to this Section 6.3.4, Tenant shall vacate the Leased Premises
as soon as reasonably practicable, but in no event later than one hundred twenty (120) days
following the election by either party to terminate this Lease, Tenant shall pay all Rent owed up
to the time of such damage or destruction, and Tenant shall pay a pro rata share of Rent on those
portions of the Leased Premises occupied (or deemed occupied) by Tenant and are Untenantable
following such damage or destruction from the date of such damage or destruction until Tenant
vacates such portion or portions, as the case may be, of the Leased Premises.

     6.3.5 Rental Abatement Following Casualty. Unless this Lease is terminated as provided in
Section 6.3.4 hereof, this Lease shall continue in effect following a fire or other casualty on the
same terms and conditions set forth herein except that the Rent provided for herein shall abate as
to the portion of the Project rendered Untenantable until such time as the Project (or portion
thereof) are no longer Untenantable. As used herein, “Untenantable” means the condition whereby
Tenant’s use of the relevant portion of the Leased Premises for normal business purposes is
materially interfered with or interrupted, and includes any time when, as a result of services that
are required to be provided by Landlord not being provided by Landlord, (i) either of Tenant’s
telephone or computer systems is not functioning such that the telephone or computer systems in
such portion of the Leased Premises can reasonably be utilized for normal business purposes or (ii)
Tenant does not have access to such portion of the Leased Premises through the Project.

     6.4 Landlord’s Insurance. Landlord shall maintain the following insurance in full force and
effect during the continuance of this Lease:

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     6.4.1 Landlord shall maintain special form (formerly known as “all-risk”) property insurance
on the Project insuring against all perils customarily insured against by owners of Comparable
Projects, including flood, hurricane, and windstorm coverage, in amounts sufficient to provide
coverage for the Full Insurable Value of the Building. The policy or policies for such insurance
shall have a replacement cost endorsement or similar provision. “Full Insurable Value” shall mean
actual replacement value of the Building with all Building leasehold improvements existing as of
the Delivery Date (the “Building Standard Leasehold Improvements”), but exclusive of the cost of
(i) excavation, foundations, and footings below the surface of the ground or below the lowest
basement level, and (ii) the leasehold improvements made by Tenant. Such Full Insurable Value
shall be confirmed from time to time at the request of Tenant.

     6.4.2 Landlord shall maintain comprehensive boiler and machinery insurance to the limit of not
less than $10,000,000 with respect to any one accident or occurrence on all boilers, pressure
vessels, electrical systems, mechanical systems, air conditioning and refrigeration systems.

     6.4.3 Landlord shall maintain commercial general liability insurance and excess liability
(umbrella) insurance, including either (i) blanket contractual liability coverage or (ii)
contractual liability coverage specifically applying to the insurable provisions of this Lease in
either case, with combined single limits of not less than $3,000,000 for primary and excess
coverage combined with respect to bodily injury or death to any number of persons in any one
accident or occurrence and with respect to property damage in any one accident or occurrence and in
the aggregate.

     6.4.4 Landlord shall maintain insurance associated with rental loss for a period of at least
twelve (12) months.

     Each of the insurance policies referred to in this Section shall be issued by solvent insurance
carriers authorized to do business in the State of Texas and having ratings of Best’s Insurance
Guide, A-/VIII and/or Standard & Poor Insurance Solvency Review A-, or better and provide (if such
provision is obtainable) that it shall not be cancelled or its coverage materially changed without
at least thirty (30) days prior notice to Landlord and Tenant. In addition, each liability
insurance policy referred to in this Section shall name Tenant as an additional insured. Each
property insurance policy referred to in this Section shall contain waiver of subrogation
provisions pursuant to which the insurer waives all express and implied rights of subrogation
against Tenant if required to make the Landlord’s contractual waiver of claims and subrogation in
Section 6.7 binding on the Landlord’s insurer. Landlord shall furnish to Tenant certificates
(Acord 27, 28, or 29, as applicable) of each of the insurance policies referred to in this Section
promptly after obtaining such insurance.

     6.5 Tenant’s Insurance. Tenant shall maintain in full force and effect during the continuance
of this Lease special form (formerly known as “all-risk”) property insurance insuring against all
perils, including flood, on all of its personal property, including removable trade fixtures,
located in the Project and on all leasehold improvements within the Project to the extent of the
replacement cost thereof, such coverage to be for an amount sufficient to satisfy any co-insurance
requirements, but not less than the full replacement cost of such insured items, with commercially
reasonable deductibles. In addition, Tenant shall maintain commercial general liability insurance
and excess liability (umbrella) insurance, including either (i) blanket contractual liability
coverage or (ii) contractual liability coverage specifically relating to the insurable provisions
of this Lease, in either case with combined single limits of not less than $3,000,000 for primary
and excess coverage combined with respect to bodily injury or death to any number of persons in any
one accident or occurrence and with respect to property damage in any one accident or occurrence
and in the aggregate occurring in connection with Tenant’s use or occupancy of the Project and
containing provisions for the severability of interests. Each of the insurance policies referred
to in this Section shall be issued by solvent insurance carriers authorized to do business in the

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State of Texas and having ratings of Best’s Insurance Guide, A-/VIII and/or Standard & Poor
Insurance Solvency Review A-, or better, provide that it shall not be cancelled without at least
thirty (30) days prior notice to Landlord and Tenant. In addition, each liability insurance policy
referred to in this Section shall name Landlord as an additional insured. Each property insurance
policy referred to in this Section shall contain waiver of subrogation provisions pursuant to which
the insurer waives all express and implied rights of subrogation against Landlord if required to
make Tenant’s contractual waiver of claims and subrogation in Section 6.7 binding on Tenant’s
insurer. Tenant shall deliver certificates (Acord 27, 28, or 29, as applicable) of such insurance
at the inception of this Lease and within twenty (20) days after any request therefor.

     6.6 Hold Harmless. Tenant shall not be liable to Landlord or to Landlord’s agents,
contractors, customers, employees, invitees, licensees, servants or visitors (collectively,
"Landlord Related Party”) for any damage to person or property caused by any act, omission or
neglect of Landlord, its agents, contractors, customers, employees, invitees, licensees, servants
or visitors and Landlord agrees to, subject to Section 6.7, indemnify, defend, and hold Tenant
harmless from all Losses (as defined in Section 8.6.2) resulting from such damage. Neither
Landlord nor any mortgagee(s) shall be liable to Tenant, its agents, contractors, customers,
employees, invitees, licensees, servants or visitors for any damage to person or property caused by
any act, omission or neglect of Tenant, its agents, contractors, customers, employees, invitees,
licensees, servants or visitors and Tenant agrees to, subject to Section 6.7, indemnify, defend,
and hold Landlord and any mortgagee(s) harmless from all Losses resulting from any such damage.
Notwithstanding anything contained in this Lease to the contrary, the provisions of this Section
6.6 shall survive the termination of this Lease. If the obligation or liability of Landlord, as
set forth in any other part of this Lease, are less than or contradictory of this indemnity clause,
the provisions of this clause shall be deemed and construed to be modified by such other parts.
This indemnity shall not be deemed or construed to make Landlord liable for any matter that Tenant
is obligated to do or omit by this Lease, by law, an obligation to a third party, or otherwise. The
liability of Tenant to indemnify Landlord, as hereinabove set forth, shall not apply to the extent
Landlord shall be effectively protected by insurance required to be carried by Landlord under this
Lease provided Landlord has a valid claim against such insurer therefor. If the obligation or
liability of Tenant, as set forth in any other part of this Lease, are less than or contradictory
of this indemnity clause, the provisions of this clause shall be deemed and construed to be
modified by such other parts. This indemnity shall not be deemed or construed to make Tenant
liable for any matter that Landlord is obligated to do or omit by this Lease, by law, an obligation
to a third party, or otherwise.

     6.7 WAIVER OF SUBROGATION RIGHTS. ANYTHING IN THIS LEASE TO THE CONTRARY NOTWITHSTANDING,
LANDLORD AND TENANT HEREBY WAIVE ANY AND ALL RIGHTS OF RECOVERY, CLAIM, ACTION OR CAUSE OF ACTION
AGAINST THE OTHER, ITS AGENTS, EMPLOYEES, OFFICERS, PARTNERS, SERVANTS OR SHAREHOLDERS FOR ANY LOSS
OR DAMAGE THAT MAY OCCUR TO THE LEASED PREMISES OR THE PROJECT, OR ANY IMPROVEMENTS THERETO, OR ANY
PERSONAL PROPERTY OF SUCH PARTY THEREIN BY REASON OF FIRE, THE ELEMENTS OR ANY OTHER CAUSE WHICH IS
REQUIRED TO BE INSURED AGAINST UNDER THE TERMS OF THE FIRE AND EXTENDED COVERAGE INSURANCE POLICIES
AND ANY OTHER POLICIES OBTAINED PURSUANT TO THIS LEASE, REGARDLESS OF CAUSE OR ORIGIN, INCLUDING
NEGLIGENCE OF THE OTHER PARTY HERETO, ITS AGENTS, EMPLOYEES, OFFICERS, PARTNERS, SERVANTS OR
SHAREHOLDERS AND EACH PARTY COVENANTS THAT NO INSURER SHALL HOLD ANY RIGHT OF SUBROGATION AGAINST
SUCH OTHER PARTY.

     6.8 Self-Insurance. Notwithstanding the foregoing provisions, Tenant may elect to self-insure
or retain any portion or all of Tenant’s insurance obligations which are listed in this Lease,
subject

20

 

to Tenant maintaining a financial net worth of at least $500,000,000 during such
self-insurance election and providing reasonable evidence thereof as may be requested by Landlord
from time to time.

VII

     7.1 No Lien for Rent. Landlord hereby waives any and all rights it may have to a contractual
or statutory lien or security interest on any property of Tenant. Landlord hereby agrees to
execute confirmations of its waiver of such liens to the holder or prospective holder of any lien
against any of Tenant’s property placed in the Leased Premises.

     7.2 Default by Tenant.

     7.2.1 Events of Default. The occurrence of any one or more of the following events shall
constitute an “Event of Default” under this Lease:

	 	(i)	 	the failure by Tenant to pay when due any sum of money to be paid by Tenant
under this Lease, such failure continuing for a period of ten (10) days after written
notice thereof from Landlord to Tenant, provided such notice shall only be required
once in any twelve (12) month period and thereafter no notice shall be required;
	 
	 	(ii)	 	the failure by Tenant to comply with or perform any of the other terms,
provisions, covenants or conditions which Tenant is required to observe and to perform
and the continuation of such failure or non-performance for a period of thirty (30)
days after notice thereof has been given by Landlord to Tenant plus such additional
period of time as may be reasonable with respect to non-monetary defaults which cannot
by their very nature be cured within thirty (30) days so long as the curing of the
default is continuously and diligently prosecuted by Tenant;
	 
	 	(iii)	 	if Tenant is dissolved, liquidates or otherwise ceases to exist, subject to
Tenant’s assignment rights pursuant to Sections 8.1.1(ii) or 8.1.3 hereof;
	 
	 	(iv)	 	a general assignment by Tenant for the benefit of creditors;
	 
	 	(v)	 	the filing of any voluntary petition in bankruptcy by Tenant or the filing of
an involuntary petition by Tenant’s creditors, which involuntary petition remains
undischarged or unstayed for a period of sixty (60) days, provided, that in the event
that under applicable law the trustee in bankruptcy or Tenant has the right to affirm
this Lease and continue to perform the obligations of Tenant hereunder, such trustee or
Tenant shall, in such time period as may be permitted by the bankruptcy court having
jurisdiction, cure all defaults of Tenant hereunder outstanding as of the date of the
affirmance of this Lease and provide to Landlord such adequate assurances as may be
necessary to ensure Landlord of the continued performance of Tenant’s obligations under
this Lease;
	 
	 	(vi)	 	the admission by Tenant in writing of its inability to pay its debts as they
become due, the filing by Tenant of a petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any present
or future statute, law or regulation, the filing by Tenant of an answer admitting or
failing timely to contest a material allegation of a petition filed against Tenant in
any such proceeding or, if within sixty (60) days after the commencement of any
proceeding against Tenant seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or

21

 

	 	 	 	similar relief under any present or future statute, law or regulation, such
proceeding shall not have been dismissed;
	 
	 	(vii)	 	the attachment, execution or other judicial seizure of all or substantially
all of Tenant’s assets or the Leased Premises, if such attachment or other seizure
remains undismissed or undischarged for a period of ten (10) business days after the
levy thereof; and
	 
	 	(viii)	 	the employment of a receiver to take possession of substantially all of Tenant’s
assets or the Leased Premises, if such receivership remains undissolved for a period of
ten (10) business days after creation thereof.

     7.2.2 Termination. If Tenant defaults under this Lease, Landlord may (i) terminate this
Lease, or (ii) terminate Tenant’s right of possession to the Leased Premises without terminating
this Lease. In addition to these remedies, Landlord shall continue to have all of the rights and
remedies provided Landlord at law or in equity.

     7.2.3 Surrender of Possession. Upon any termination of this Lease, whether by lapse of time
or otherwise, or upon any termination of Tenant’s right of possession without termination of this
Lease, Tenant shall surrender possession and vacate the Leased Premises immediately, and deliver
possession thereof to Landlord. If Tenant fails to surrender possession and vacate the Leased
Premises, Landlord shall have full and free license to enter into and upon the Leased Premises with
or without process of law for the purpose of repossessing the Leased Premises, expelling or
removing Tenant and any others who may be occupying or within the Leased Premises, removing any and
all property therefrom and changing all door locks of the Leased Premises. Landlord may take these
actions without being deemed in any manner guilty of trespass, eviction or forcible entry or
detainer and without incurring any liability for any damage resulting therefrom, including any
liability arising under Section 93.002 of the Texas Property Code, as amended (“TPC”), and without
relinquishing Landlord’s right to Rent or any other right given to Landlord hereunder or by
operation of law; Tenant hereby waiving any right to claim damage for such reentry and expulsion,
including any rights granted to Tenant by Section 93.002 of the TPC.

     7.2.4 Benefit of the Bargain. If Landlord elects to terminate this Lease or terminate
Tenant’s right of possession to the Leased Premises without terminating this Lease, there shall
immediately become due and payable the amount by which:

	 	(i)	 	the present value [determined using a discount rate of ten percent (10%) per
annum] of the total Rent and other benefits which would have accrued to Landlord under
this Lease for the remainder of the Term if the terms and provisions of this Lease had
been fully complied with by Tenant, exceeds
	 
	 	(ii)	 	the total fair market rental value [determined using a discount rate of ten
percent (10%) per annum] of the Leased Premises for the balance of the Term (it being
the agreement of both parties hereto that Landlord shall receive the benefit of its
bargain).

For purposes of this Section 7.2.4, the fair market rental value of the Leased Premises shall be
the prevailing market base rental rate (similarly defined) for similar space in similar office
buildings in the Greenspoint area of Houston, Texas for a lease term equal to the remaining Term
(without regard to any renewal options). In addition, there shall be recoverable from Tenant:

	 	(i)	 	if Landlord elects to restore the Leased Premises to a Building standard
condition, normal wear and tear excepted, the cost to do so;

22

 

	 	(ii)	 	all accrued, unpaid sums due under this Lease, plus interest at the rate set
forth in Section 2.1.3 for past due sums up to the date of termination;
	 
	 	(iii)	 	Landlord’s cost of recovering possession of the Leased Premises; and
	 
	 	(iv)	 	any other sum of money or damages owed by Tenant to Landlord.

     7.2.5 Right to Relet. If Landlord elects to terminate Tenant’s right to possession of the
Leased Premises without terminating this Lease, but elects not to pursue the remedies set forth in
Section 7.2.4, Tenant shall continue to be liable for all Rent and Landlord shall make reasonable
efforts to relet the Leased Premises, or any part thereof, to a substitute tenant or tenants, for a
period of time equal to or lesser or greater than the remainder of the Term on market terms and
conditions Landlord, at Landlord’s sole discretion, deems advisable. Tenant shall be given a
credit against the Rent due from Tenant to Landlord during the remainder of the Term in the net
amount of rent received from the new tenant; however, the net amount of rent received from the new
tenant shall first be applied to:

	 	(i)	 	the costs incurred by Landlord in reletting the Leased Premises (including,
without limitation, all brokerage fees, legal fees, advertising costs and the like and,
if Landlord restores the Leased Premises to Building standard condition, normal wear
and tear excepted, the cost to do so);
	 
	 	(ii)	 	the accrued and unpaid sums, plus interest and late charges if in arrears, due
under the terms of this Lease;
	 
	 	(iii)	 	Landlord’s cost of recovering possession of the Leased Premises; and
	 
	 	(iv)	 	the cost of storing any of Tenant’s property left on the Leased Premises after
reentry.

     Notwithstanding any such reletting without termination of this Lease, Landlord may at any time
thereafter elect to exercise its rights under Section 7.2.4 for such previous breach.
Notwithstanding any provision in this Section 7.2.5 to the contrary, upon the default of any
substitute tenant or upon the expiration of the lease term of such substitute tenant before the
expiration of the Term, Landlord may, at Landlord’s election, either relet to still another
substitute tenant or exercise its rights under Section 7.2.4.

     7.2.6 Storage of Property. Any and all property which may be removed from the Leased Premises
by Landlord pursuant to the authority of this Lease or of law, to which Tenant is or may be
entitled, may be handled, removed and stored, as the case may be, by or at the direction of
Landlord at the risk, cost and expense of Tenant, and Landlord shall in no event be responsible for
the value, preservation or safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and
all reasonable expenses incurred in such removal and all reasonable storage charges against such
property so long as the same shall be in Landlord’s possession or under Landlord’s control. Any
such property of Tenant not retaken by Tenant from storage within thirty (30) days after removal
from the Leased Premises shall, at Landlord’s option, be deemed conveyed by Tenant to Landlord
under this Lease as by a bill of sale without further payment or credit by Landlord to Tenant.

     7.2.7 Default by Landlord. If Landlord fails to comply with any term, provision, covenant, or
condition of this Lease, and such failure remains unremedied for thirty (30) days following written
notice thereof from Tenant to Landlord, Tenant may pursue all remedies at law or in equity to which
Tenant may be entitled. Additionally, if Landlord fails to pay any amount payable by Landlord to
Tenant hereunder and such failure to pay continues and remains unremedied for a period of thirty
(30) days after written notice thereof given by Tenant to Landlord and/or its mortgagee then,
Tenant may deliver a second notice

23

 

to Landlord, and if such default shall continue uncured by Landlord and/or its mortgagee for
an additional fifteen (15) days after the delivery of such second notice, Tenant shall have the
right to offset such amount against Rent. No notice to Landlord under this Section 7.2.7 shall be
effective until a copy thereof is delivered to each Landlord mortgagee for which Tenant has
received a notice address in writing from Landlord or its mortgagee. The rights of Tenant pursuant
to this Section 7.2.7 shall be subject to the express provisions of Section 3.1.6 of this Lease
providing for remedies different from, or in exclusion of, the remedies above-described. Tenant
specifically agrees that the cure of any default by any Landlord mortgagee shall be deemed a cure
by Landlord under this Lease.

     7.3 Non-Waiver. Neither acceptance of Rent by Landlord nor failure by Landlord or Tenant to
declare any default by the other party immediately upon occurrence thereof, or delay in taking any
action in connection therewith, shall waive such default, but Landlord or Tenant may declare any
such default at any time and take such action as might be lawful or authorized hereunder, either at
law or in equity. Waiver by Landlord or Tenant of any right for any default by Tenant shall not
constitute a waiver of any right for either a subsequent default of the same obligation or any
other default. Receipt by Landlord of Tenant’s keys to the Leased Premises shall not constitute an
acceptance of surrender of the Leased Premises.

     7.4 Holding Over. If Tenant holds over after expiration or termination of this Lease without
the written consent of Landlord, Tenant shall pay as rent for the Leased Premises one hundred fifty
percent (150%) of the amount of Rent (including all Base Rental and Tenant’s Additional Rental then
payable as described in Sections 2.2 and 2.3) for the entire holdover period calculated and
prorated on a daily basis. No holding over by Tenant after the Term shall be construed to extend
this Lease. In the event of any unauthorized holding over for more than five (5) business days,
Tenant shall indemnify Landlord (i) against all claims for damages by any other tenant to whom
Landlord may have leased all or any part of the Leased Premises effective upon the termination of
this Lease, and (ii) for all other actual losses, costs, and expenses, including reasonable
attorneys’ fees, incurred by reason of such holding over.

     7.5 Attorneys’ Fees. If either party defaults in the performance of any of the terms,
agreements or conditions contained in this Lease and the other party places the enforcement of this
Lease, or any part thereof, or the collection of any Rent due or to become due hereunder or
recovery of the possession of the Leased Premises, in the hands of an attorney who files suit upon
the same and should such non-defaulting party prevail in such suit, the defaulting party agrees to
pay the other party’s reasonable attorneys’ fees.

VIII

     8.1 Assignment or Sublease by Tenant.

     8.1.1 Except as hereinafter expressly provided, if Tenant desires to assign this Lease or
sublet the Leased Premises or any part thereof (subletting, for the purposes hereof, includes the
granting of concessions or licenses for the occupancy thereof), Tenant may do so, subject to the
following:

	 	(i)	 	At the time of any such assignment or subletting, this Lease is in full force
and effect and there is no Event of Default by Tenant then in existence;
	 
	 	(ii)	 	Except as set forth in Section 8.1.2 below, Tenant shall notify Landlord of its
desire to assign or sublet to the proposed assignee or sublessee at least ten (10)
business days in advance of the assignment or subletting (which notification shall
consist of the identity of any such assignee or sublessee and the location and area of
the Leased Premises affected by any such assignment or subletting) and provide Landlord
with a copy of the proposed

24

 

	 	 	 	sublease or assignment not less than five (5) business days in advance. Within five
(5) business days after receipt of Tenant’s notice of its intent to sublease or
assign, Landlord shall give Tenant written notice of Landlord’s election (A) to
consent to the proposed transaction, or (B) not to consent to the proposed
transaction, in which event this Lease shall continue in full force or effect. If
Landlord fails to timely make such election, then Landlord will be deemed to have
elected option (A);
	 
	 	(iii)	 	Landlord shall only be permitted to withhold its consent to a proposed
assignment or subletting if Landlord reasonably determines (and notifies Tenant within
the above time period) that (a) the business or activities to be conducted at the
Leased Premises by the proposed assignee or sublessee would violate the terms of this
Lease, including without limitation, Section 1.3, (b) the operations of the proposed
assignee or subtenant would create a density level in excess of four (4) people per one
thousand (1000) square feet of Net Rentable Area in the applicable portion of the
Building, or (c) the proposed assignee or sublessee is a governmental entity;
	 
	 	(iv)	 	Any assignment of this Lease by Tenant shall only be of the entirety of this
Lease;
	 
	 	(v)	 	Any such assignment shall entitle the assignee to, and shall be subject to, all
the terms, covenants and conditions of this Lease, and any assignee must assume in such
assignment all the rights and obligations of the assignor hereunder; and including
without limitation, any renewal rights, parking rights, Building identity and signage
rights, and all other rights and appurtenances provided for hereunder.

     8.1.2 Landlord and Tenant shall share fifty percent (50%) of the excess amount paid by the
assignee or subtenant, after deduction of Rent, Tenant’s actual costs and expenses incurred in
connection with such assignment or sublease, including reasonable brokerage costs, reasonable
tenant finish costs, which costs and expenses shall be amortized over the term of the assignment or
sublease to determine such excess.

     8.1.3 Notwithstanding anything stated herein to the contrary, Tenant shall at all times during
the Term have the right, without having to obtain Landlord’s prior approval therefor, to assign
this Lease or to sublease all or any portion of the Leased Premises to (i) any Affiliate (defined
below) of Tenant, any successor entities or persons by virtue of merger, consolidation,
liquidation, reorganization or other operation of law; (ii) to the purchaser (or an Affiliate of
the purchaser) of all or substantially all assets of Tenant, (iii) any partnership or joint venture
in which Tenant or an Affiliate of Tenant is a partner or a joint venturer that actively
participates in the business thereof; and (iv) any entity occupying space in the Leased Premises
principally for the purpose of providing services to Tenant or its Affiliates; provided, however,
that no such assignment or subletting may be made if the assignee’s or sublessee’s proposed use of
the Leased Premises violates the use or other provisions of this Lease. As used in this Lease, the
term “Affiliate” shall mean any person or entity controlling, controlled by or under common control
with Tenant or Landlord, as applicable. “Control” as used herein means the power, directly or
indirectly, to direct or cause the direction of the everyday management and policies of the
controlled person or entity. The ownership, directly or indirectly, of at least fifty-one percent
(51%) of the voting securities of, or the possession of the right to vote in the ordinary direction
of its affairs at least fifty-one percent (51%) of the voting interest in, any person or entity
shall be presumed to constitute such control.

     8.1.4 Upon the approval or deemed approval of any sublease pursuant to this Section 8.1 for
the entirety of the Northchase Building or the 263 Building to a subtenant with a net worth of at
least $1,000,000,000, Landlord hereby agrees to execute a non-disturbance agreement in
substantially the form attached hereto as Exhibit G (“NDA”). Any sublease for which an NDA is
requested shall (i) have a

25

 

term that expires no later than the Term (including all Renewal Options), (ii) shall not
expand any of Landlord’s obligations under this Lease, (iii) be subject to all terms and conditions
of this Lease, and (iv) in the event the Lease is terminated prior to the expiration of the
sublease, shall not permit the subtenant, following said termination, to renew the sublease with
respect to any portion of Leased Premises which is less than the entire Leased Premises.

     8.1.5 No assignment or subletting by Tenant shall relieve Tenant of any obligation under this
Lease without Landlord’s prior written consent, which consent may be granted or withheld in
Landlord’s sole and unfettered discretion. Any attempted assignment or sublease by Tenant in
violation of the terms of this Section 8.1 shall be void even if rent is accepted by Landlord from
such assignee or sublessee. Consent by Landlord to the extent required hereunder to a particular
assignment or sublease shall not be deemed to be consent by Landlord to any other or subsequent
assignment or sublease.

     8.1.6 No collection or receipt of Rent by Landlord shall be deemed either (i) the acceptance
of the applicable assignee or sublessee as Tenant, or (ii) a waiver on the part of Landlord, or a
release of Tenant from the further performance of its obligations hereunder. Within ten (10) days
after the occurrence of any sublease or assignment with respect to which Tenant is not required to
obtain Landlord’s consent, Tenant shall deliver to Landlord written notice of such sublease or
assignment and copies of any executed assignments and subleases. In the event of a default by any
assignee or sublessee of Tenant or any successor of Tenant in the performance of any of the
obligations of the tenant under this Lease and the failure of such party to cure such default after
its receipt of any required notice thereof and the expiration of any applicable cure period,
Landlord may proceed directly against Tenant without the necessity of exhausting remedies against
such assignee or sublessee or successor.

     8.2 Assignment by Landlord. Landlord shall have the right to transfer and assign, in whole or
in part, all its rights and obligations hereunder and in the Project and all other property
referred to herein, and in such event and upon such transfer and the express assumption by such
transferee of the obligations of Landlord hereunder in a writing delivered to and for the benefit
of Tenant (any such transferee to have the benefit of, and be subject to, the provisions of
Sections 8.3 and 8.4) no further liability or obligation shall thereafter accrue against Landlord
hereunder.

     8.3 Peaceful Enjoyment. Landlord covenants that Tenant shall and may peacefully have, hold
and enjoy the Project subject to the other terms hereof, provided that Tenant pays the Rent and
other sums herein recited to be paid by Tenant and performs all of Tenant’s covenants and
agreements herein contained. It is understood and agreed that this covenant and any and all other
covenants of Landlord contained in this Lease shall be binding upon Landlord and its successors
only with respect to breaches occurring from the date of its and their respective acquisition of
the Landlord’s interest hereunder until a transferee has expressly assumed the obligations of such
transferor hereunder in a writing delivered to and for the benefit of Tenant.

     8.4 Limitation of Landlord’s Liability. Tenant shall look solely to Landlord’s interest in
the Project for the recovery of any judgment against Landlord for a breach of this Lease, it being
agreed that neither Landlord (and its partners, officers, directors and shareholders) nor any
mortgagee shall ever be personally liable for any such judgment. The provision contained in the
foregoing sentences are not intended to, and shall not, limit any right that Tenant might otherwise
have to (i) obtain injunctive relief against Landlord or Landlord’s successors in interest, or (ii)
any suit or action in connection with enforcement or collection of amounts which may become owing
or payable under or on account of insurance maintained by Landlord.

     8.5 Limitation of Tenant’s Liability. Landlord acknowledges and agrees that under no
circumstances shall any partner, member, shareholder, director, or officer of Tenant (individual or

26

 

otherwise) have personal liability for or with respect to any of the obligations of Tenant
under this Lease or any renewals, modifications or extensions thereof, whether Tenant remains a
registered limited liability partnership, becomes a general partnership or otherwise.

     8.6 Environmental Matters.

     8.6.1 Definitions. For purposes of this Lease, “Hazardous Materials” shall mean any chemical,
substance, material or waste or component thereof which is now or hereafter listed, defined or
regulated as a hazardous or toxic chemical, substance, material or waste or component thereof by
any federal, state or local governing or regulatory body having jurisdiction, or which would
trigger any employee or community “right-to-know” requirements adopted by any such body, or for
which any such body has adopted any requirements for the preparation or distribution of a Material
Safety data sheet. For purposes of this Lease, “Environmental Law” shall mean any Federal, State,
or local statute, law, ordinance, code, rule, regulation, order, or decree regulating, relating to,
or imposing liability or standards of conduct concerning, any Hazardous Material, including,
without limitation CERCLA, 42 USC 9601, et seq. and RECRA; 42 USC 6901, et seq.

     8.6.2 Landlord Obligations; Indemnity. Landlord hereby represents to Tenant that (i) Landlord
has not knowingly used or knowingly permitted the Project to be used in violation of any
Environmental Laws and (ii) to Landlord’s knowledge, the Project does not contain Hazardous
Materials in violation of any applicable Environmental Laws. In addition, Landlord shall not
knowingly use or knowingly permit the use of any Hazardous Materials in violation of applicable
Environmental Laws in the development, construction, operation, maintenance or use of the Project.
Landlord shall indemnify, defend and hold Tenant harmless, from and against all claims, liens,
losses, damages and expenses, including without limitation attorneys’ fees and court costs
(collectively, “Losses"), arising out of, directly or indirectly, a breach of Landlord’s
representations or obligations set forth in this Section 8.6. In addition to and without limiting
the foregoing, in the event any Hazardous Materials are discovered at or in the Project or the
Leased Premises in violation of any applicable Environmental Laws, and the presence of the same was
not caused solely by Tenant, Landlord agrees to undertake, at Landlord’s sole cost and expense (not
subject to reimbursement as an Operating Expense), all reasonable actions necessary to effect
compliance with such applicable Environmental Laws relating thereto, subject to Tenant’s
obligations pursuant to the last sentence of Section 8.6.3 below.

     8.6.3 Tenant Obligations; Indemnity. Tenant hereby represents to Landlord that Tenant shall
not knowingly use or knowingly permit the use of any Hazardous Materials in violation of applicable
Environmental Laws in the development, construction, operation, maintenance or use of the Project
by Tenant. Tenant shall indemnify, defend and hold Landlord, harmless, from and against all Losses
arising out of, directly or indirectly, a breach of Tenant’s representations or obligations set
forth in this Section 8.6. In the event any Hazardous Materials are discovered in the Leased
Premises in violation of any applicable Environmental Laws and the presence of the same was caused,
in whole or in part, by Tenant, Tenant agrees to undertake, at Tenant’s cost in proportion to the
level of Tenant’s responsibility for the presence of such Hazardous Materials all reasonable
actions necessary to effect compliance with such applicable Environmental Laws relating thereto.

     8.7 Consequential Damages. Notwithstanding anything stated herein to the contrary, without
affecting the rights of either party to recover actual, direct damages, under no circumstances
shall the other party be liable for consequential, incidental, indirect, punitive, exemplary or
special damages or lost profits (collectively, “Consequential Damages”) resulting from any cause
whatsoever, whether arising in contract, warranty, tort (including negligence), strict liability,
indemnity or otherwise. It is expressly agreed that no failure by either party to fulfill any
condition hereof shall constitute a failure of

27

 

essential purpose entitling the other party to Consequential Damages. The provisions of the
previous sentence shall expressly survive the termination of the Lease.

     8.8 Landlord Restrictions. Notwithstanding anything stated herein to the contrary, Landlord
hereby acknowledges that Tenant is leasing the entirety of the Project, subject only to the 200
Space Grant (defined below) and the 53 Space Grant (defined below). During the Term Landlord shall
not, except consistent with providing the services required by Section 3.1 of this Lease and/or in
accordance with the approved Operating Expense Budget: (i) enter into any agreement or permit any
other user to use or occupy any portion of the Project, including, without limitation, any
undeveloped portion of the Project, unless consented to by Tenant, such consent to be in Tenant’s
sole discretion, (ii) temporarily or permanently change the location of, close, block or otherwise
alter any entrances, corridors, doorways or walkways leading to or providing access to the
Building, Garage or any other portion of the Project, except to the extent required by law, or as
consented to by Tenant, such consent to be in Tenant’s reasonable discretion, or (iii) change,
improve, remodel, add additional floors to or otherwise alter or change the configuration of any
portion of the Project, unless consented to by Tenant, such consent to be in Tenant’s sole
discretion. Tenant hereby acknowledges that, according to information provided by the Landlord,
(i) Landlord has granted the former tenant of the Project the right to use no more than 200 parking
spaces in the Garage (“200 Space Grant”) until February 15, 2008 (“200 Space Expiration Date”) and
(ii) no more than fifty-three (53) parking spaces located at the Project are subject to previous
rights granted to the owner of the 7.807 acre tract adjacent to the north boundary of the Project
pursuant to that certain First Amendment to Easement Agreement by and between KERR-McGEE Oil and
Gas Corporation and BBV Northchase L.P. dated as of July 5, 2002 filed under Clerk’s File Number
V968770, Film Code 554-54-8214 of the Official Public Records of Harris County, Texas (“53 Space
Grant”) until no later than October 20, 2008 (being 240 days following the termination of the
existing lease at the Building plus five (5) days for notice receipt purposes) (“53 Space
Expiration Date”). Landlord shall use its best efforts to terminate the rights pursuant to the 53
Space Grant as soon as practicable and agrees to send such notice pursuant to the First Amendment
to Easement Agreement referenced above within five (5) days following the Commencement Date hereof
and agrees to use its best efforts to obtain the acknowledgment from the beneficiary of the 53
Space Grant that it has no further rights to the 53 Space Grant. In the event that the rights
pursuant to the 53 Space Grant are not terminated on or before the 53 Space Expiration Date, and
the beneficiary of the 53 Space Grant asserts rights to park thereunder, Tenant shall automatically
receive a $500 per day credit against the next installment of Base Rent for each day a party, other
than an Authorized Occupant (defined below), following notice to Landlord and the expiration of
forty-eight (48) hours following said notice, actually parks on the Project pursuant to the 53
Space Grant. As used herein, “Authorized Occupant” shall mean Tenant or its officers, partners,
agents, contractors, customers, employees, invitees, licensees, servants or visitors).
Additionally, Landlord agrees to indemnify, defend and hold harmless Tenant, its agents,
contractors, customers, employees, invitees, licensees, servants or visitors from all Losses
resulting from the use of Project or any portion thereof by (i) any party pursuant to the 200 Space
Grant, (ii) any party pursuant to the 53 Space Grant, and (iii) any other entity or person (other
than an Authorized Occupant) who exercises rights or purported rights pursuant to a claim that it
has been granted said rights by Landlord or a predecessor-in-title to Landlord (i.e., such entity
or person claims a right to park pursuant to an alleged agreement as opposed to a trespasser with
no claim to a right to park in such spaces). Landlord hereby covenants and agrees that, without
Tenant’s prior written consent which may be withheld in its sole discretion, Landlord shall not
pursue any efforts that would permit the Helistop located at the Project be used or operated as a
helistop or otherwise permit the Helistop to be licensed or otherwise approved for operations by
any authority pursuant to Applicable Laws, helipad or any other use related thereto pursuant to the
Helistop Use Agreement dated May 5, 1989 filed under Clerk’s File Number M149385 of the Official
Public Records of Harris County, Texas or otherwise. Landlord agrees that it will not extend the
200 Space Grant beyond the 200 Space Expiration Date.

28

 

     8.9 Other Appurtenances. Notwithstanding anything stated herein to the contrary, Tenant shall
have the right to use the Building telephone closets, storage areas, shafts, flues, vents, vertical
pipe shafts, vertical ducts and/or conduits between the Leased Premises and other parts of the
Project, and the riser space that is located on and between the floors of the Leased Premises, for
the installation and maintenance of conduits, sleeving, cables, ducts, flues, pipes and other
devices, supplementary HVAC and other facilities reasonably consistent with Tenant’s use of the
Leased Premises and other portions of the Project, at no additional rental to Tenant. All Tenant
work shall comply with all applicable local building codes.

     8.10 Special Tenant Improvements. Subject in all cases to the provisions of Section 5.1.2,
Tenant shall have the right to incorporate special tenant improvements (in the way of improvements
and/or upgrades) into the Project and the Leased Premises, including but not limited to,
interconnecting stairwells (subject to applicable code and with the obligation to remove or restore
unless pursuant to Section 5.1.3 Landlord has agreed otherwise), facilities for computers, back-up
generators, separate, self-contained air conditioning systems (including rooftop equipment for
same), conference and meeting room facilities, dining rooms and lunchrooms (including kitchens in
support thereof), exercise/health, day care, training and medical facilities, vertical mail system,
telephone equipment rooms, fiber optics, high-ceiling areas, other special facilities incidental to
Tenant’s office operations, provided same shall be compatible with Landlord’s base building systems
and access control equipment (including, without limitation, parking gates, operators, traffic
control arms, automated gate operators, electronic locks, and card readers) to control access to
and from the Project, including, without limitation, the Garage, Building and surface parking
areas). Such special improvements shall be furnished and installed at Tenant’s sole cost and
expense.

     8.11 Telecommunications Provider. During the Term, Landlord hereby agrees to provide, at no
cost, any telecommunication provider selected by Tenant, reasonable access to the Building and
hereby grants such providers access and the use of the Building shafts, conduits, risers and other
interfloor connections for the installation of cabling and other equipment, at no cost.

     8.12 Utility Provider. Tenant acknowledges that Landlord has an existing utility contract
with a term of April 30, 2009 (“Existing Utility Contract”). In the event Tenant elects to
exercise the following rights, Tenant shall be responsible for any termination fees or costs of
Landlord with respect to Landlord’s Existing Utility Contract. Upon sixty (60) days prior written
notice to Landlord, Tenant shall have the right to enter into a direct contract with any provider
or supplier of electricity to serve the entire Project. In such event, following such sixty (60)
day period, Tenant shall not be obligated to pay any amounts attributable to the supply of
electricity pursuant to the Operating Expenses to the extent such direct contract pays all
electrical expenses of the Project.

IX

     9.1 Notices. All notices, demands, requests, consents and approvals which may or are required
to be given by either party to the other under this Lease shall be in writing and shall be deemed
given, delivered and received either (a) when hand delivered (including delivery by a delivery
service providing a receipt therefor) or when received pursuant to any delivery by telex, telefax,
telecopier, telegram or overnight mail service, or (b) the third (3rd) business day following the
date deposited in the United States mail, certified or registered, postage prepaid, in either case
addressed as follows:

29

 

     (a) If to Tenant:

Exterran Energy Solutions, L.P.

12001 North Houston Rosslyn Road

Houston, Texas 77086

Attention: Director of Real Estate

Facsimile: (281) 854-3067

     and to:

Bracewell & Giuliani LLP

711 Louisiana Street, Suite 2300

Houston, Texas 77002

Attention: Aaron P. Roffwarg

Facsimile: (713) 221-2184

     and to:

The Staubach Company

One Riverway, Suite 2500

Houston, TX 77056

Attention: Dan Bellow, President

Facsimile: (713) 888-4040

     (b) If to Landlord:

RFP Lincoln Greenspoint LLC

c/o Lincoln Property Company

263 N. Sam Houston Parkway E.

Suite 110

Houston, Texas 77060

Facsimile: (281) 873-2234

     With a copy to:

Gardere Wynne Sewell LLP

1000 Louisiana, Suite 3400

Houston, Texas 77002-5007

Attention: Robert W. Bramlette

Facsimile: (713) 276-6718

     And:

LPC – DC

101 Constitution Ave, NW

Suite 600 East

Washington, DC 20001

Attention: Frank Cofer

Facsimile: (202) 898-5787

          and (202) 898-2001

30

 

     For Rental Payment:

RFP Lincoln Greenspoint LLC

c/o Lincoln Property Company

263 N. Sam Houston Parkway E.

Suite 110

Houston, Texas 77060

Facsimile: (281) 873-2234

Either party may, from time to time, change the address at which such written notices, exercises of
options or elections, communications, requests, or other documents or demands are to be delivered,
by giving the other party written notice of such changed address.

     9.2 Miscellaneous.

     9.2.1 Successors and Assigns. This Lease shall be binding upon and inure to the benefit of
the successors and assigns of Landlord and shall be binding upon and inure to the benefit of
Tenant, its successors and its permitted assigns.

     9.2.2 Gender, Plurals. The pronouns of any gender shall include the other gender and either
the singular or the plural shall include the other.

     9.2.3 Remedies Cumulative. All rights and remedies of Landlord under this Lease shall be
cumulative and none shall exclude any other rights or remedies allowed by law; and this Lease is
declared to be a Texas contract and all of the terms thereof shall be construed according to the
laws of the State of Texas, without regard to the conflicts of laws principles of such State that
would require the application of the laws of a jurisdiction other than such State.

     9.2.4 Amendments. This Lease may not be altered, changed or amended, except by an instrument
in writing executed by all parties hereto. Further, the terms and provisions of this Lease shall
not be construed against or in favor of a party hereto merely because such party is the “Landlord”
or the “Tenant” hereunder or such party or its counsel is the draftsman of this Lease.

     9.2.5 Exhibits. The terms and provisions of Exhibits A through I, inclusive, attached hereto
are hereby made a part hereof for all purposes.

     9.2.6 Authorization. Each party represents and warrants that all consents or approvals
required of third parties (including but not limited to, its Board of Directors or partners) for
the execution, delivery and performance of this Lease have been obtained and that each party has
the right and authority to enter into and perform its covenants contained in this Lease.

     9.2.7 Reasonable Efforts. Whenever in this Lease there is imposed upon either party the
obligation to use its best efforts, reasonable efforts or diligence, such party shall be required
to do so only to the extent the same is economically feasible and otherwise will not impose upon
such party excessive financial or other burdens.

     9.2.8 Invalidity. If any term or provision of this Lease, or the application thereof to any
person or circumstance, shall to any extent be invalid or unenforceable, the remainder of this
Lease, or the application of such provision to persons or circumstances other than those as to
which it is invalid or

31

 

unenforceable, shall not be affected thereby, and each provision of this Lease shall be valid
and shall be enforceable to the extent permitted by law.

     9.2.9 Days. All references to days in this Lease and any exhibits or riders hereto mean
calendar days, not working or business days, unless otherwise stated.

     9.2.10 Captions. Captions and headings herein are for Landlord’s and Tenant’s convenience
only and neither limit nor amplify the provisions of this Lease.

     9.2.11 Time of Essence. Time is of the essence of this Lease.

     9.3 Landlord’s Mortgagee.

     9.3.1 Subordination. This Lease shall be subject and subordinate to all mortgages, deeds of
trust and related security instruments which may now or hereafter encumber the Project and to all
renewals, modifications, consolidations, replacements and extensions thereof and to each advance
made or hereafter to be made thereunder provided Tenant has received from the holder thereof an
agreement that Tenant will not be disturbed in its possession of the Leased Premises, or have its
rights under the Lease modified or terminated, except pursuant to the terms of this Lease, in
substantially the form attached hereto as Exhibit I. In the event of the enforcement by the
trustee or the beneficiary under any such mortgage or deed of trust of the remedies provided for by
law or by any such mortgage or deed of trust, Tenant will, upon request of any person or party
succeeding to the interest of said trustee or beneficiary as a result of such enforcement (and
subject to the aforesaid recognition of Tenant’s rights under the Lease), automatically become the
tenant of, and attorn to, such successor in interest without change in the terms or provisions of
this Lease; provided, however, that such successor in interest shall not be bound by:

	 	(i)	 	any payment of Rent for more than one month in advance except prepayments in
the nature of security for the performance by Tenant of its obligations under this
Lease; or
	 
	 	(ii)	 	any amendment or modification of this Lease made without the written consent of
such trustee or such beneficiary or such successor in interest. Upon request by such
successor in interest, Tenant shall execute and deliver an instrument or instruments
confirming the attornment herein provided for.

     9.4 Estoppel Certificate or Three-Party Agreement. At either party’s request, the other party
will execute within ten (10) business days of receipt, either an estoppel certificate or a
three-party agreement among Landlord, Tenant and any third party dealing with Landlord or Tenant
certifying to such facts (if true) and agreeing to such notice provisions and other matters as such
third party may reasonably require in connection with the business dealings of Landlord or Tenant
and such third party.

     9.5 Tenant Financial Information.

     9.5.1 Public Financial Statements. (i) Within thirty (30) days after the same is required to
be filed with the SEC or any successor agency (but in any event within ninety (90) days of the end
of each fiscal year of Exterran Holdings, Inc.), a copy of each annual report and any amendment to
a report filed with the SEC or any successor agency pursuant to Section 13 or 15(d) of the Exchange
Act (currently Form 10-K), as the same may be amended from time to time, and (ii) within thirty
(30) days after the same is required to be filed with the SEC or any successor agency (but in any
event within sixty (60) days after the end of each of the first three fiscal quarters of the
Tenant), a copy of each quarterly report and any amendment to any quarterly report filed with the
SEC or any successor agency pursuant to Section 13

32

 

or 15(d) of the Exchange Act (currently Form 10-Q), as the same may be amended, from time to
time; provided, however, that the Tenant shall be deemed to have furnished the information required
by this Section 9.5.1 if the Tenant shall have timely made the same available on “EDGAR” and/or on
its home page on the worldwide web (at the date of this Agreement located at
http://www.exterran.com); provided, further, however, that if the Landlord is unable to access
“EDGAR” or the Landlord’s home page on the worldwide web, the Tenant agrees to provide the Landlord
with paper copies of the information required to be furnished pursuant to this Section 9.5.1
promptly following notice from the Landlord; and

     9.5.2 Consolidating Financials. Upon Landlord’s written request, within the time period
required for the delivery of the financial statements required by Section 9.5.1, the Tenant shall
deliver consolidating income statement and balance sheet with respect to the Tenant (irrespective
of whether or not Tenant is required to make the public filings described in Section 9.5.1 above).

     9.6 Brokers. Landlord shall pay all brokerage fees and commissions earned by The Staubach
Company (“Agent”) pursuant to the separate agreement between Landlord and Agent with respect to the
same. Landlord and Tenant represent each to the other that there is no other broker or agent
involved in this transaction for which the other party would be responsible to pay a fee or
commission. Except for the payment to be made by Landlord to the Agent, each party shall indemnify
and hold the other harmless against any party claiming under the indemnifying party for any fee or
commission, including, without limitation, reasonable attorneys’ fees and court costs in connection
with this Lease based upon a claim that it dealt with the indemnifying party.

     9.7 Entire Agreement, Representations, Etc. This Lease contains the entire agreement of the
parties pertaining to the subject matter hereof and supersedes all other prior and contemporaneous
agreements and understandings, both oral and written, of the parties in connection therewith. No
other written or oral promises or representations have been made and none have been relied upon,
and none shall be binding. Landlord’s agents do not and will not have authority to (a) make
exceptions, changes or amendments to this Lease or factual representations not expressly contained
in this Lease, (b) waive any right, requirement, or provision of this Lease, or (c) release Tenant
from all or part of this Lease, unless such action is in writing. Tenant will make no claim on
account of any representation whatsoever, whether made by a renting agent, broker, officer or other
representative of Landlord or which may be contained in any circular, prospectus or advertisement
relating to the Leased Premises or the Project, or otherwise, unless the same is specifically set
forth in this Lease. The parties executing this Lease expressly warrant and represent that, before
executing this Lease, said parties have fully informed themselves of its terms, contents,
conditions and effects, that in executing this Lease, the parties hereto have had the benefit of
advice of attorneys of their own choosing, and that no promise or representation of any kind has
been made to any parties hereto or anyone acting for any parties hereto, except as is expressly
stated in this Lease. The parties executing this Lease have relied solely and completely upon
their own judgment and the advice of their own attorneys in entering into this Lease.

     9.8 Waiver of Consumer Right Under DTPA. As a material consideration for Landlord’s entering
into this Lease, Tenant acknowledges and agrees as follows:

     TENANT HEREBY WAIVES ITS RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT,
SECTION 17.41 ET SEQ., TEXAS BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS
AND PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY OF ITS OWN SELECTION, TENANT VOLUNTARILY
CONSENT TO THIS WAIVER.

     9.9 Waiver of Rights Under Section 93.012 of the Texas Property Code. Landlord and Tenant are
knowledgeable and experienced in commercial transactions and hereby agree that the

33

 

provisions of this Lease for determining charges, amounts, Additional Rent payable by Tenant
(including, without limitation, payments under Section 2.3 and 2.4 of this Lease) are commercially
reasonable and valid even though such methods may not state a precise mathematical formula for
determining such charges. ACCORDINGLY, TENANT VOLUNTARILY AND KNOWINGLY WAIVES ALL RIGHTS AND
BENEFITS OF TENANT UNDER SECTION 93.012 OF THE TEXAS PROPERTY CODE AS SUCH SECTION NOW EXISTS OR AS
MAY BE HEREAFTER AMENDED OR SUCCEEDED.

[End of page]

34

 

     The
parties hereto have executed this Lease as of the 24 th day of August, 2007. This Lease may
be executed in multiple counterparts, all of which when taken together shall constitute one and the
same instrument.

	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 
	 	 	RFP Lincoln Greenspoint, LLC,	 	 
	 	 	a Massachusetts limited liability company,	 	 
	 	 	Lincoln — Greenspoint LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Lincoln Non-Member Manager, Inc.,	 	 
	 

	 	 	 	a Texas corporation, its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ W. Frank Cofer	 	 
	 

	 	 	 	 	 	 
	 	 	Name: W. Frank Cofer	 	 
	 	 	Title:   Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 
	 	 	EXTERRAN ENERGY SOLUTIONS, L.P., 

a Delaware
limited partnership	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Hanover Compression General Holdings LLC,

a Delaware limited liability company,

its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By: /s/ Stephen A. Snider                                             	 	 
	 

	 	 	 	       Stephen A. Snider	 	 
	 

	 	 	 	       President	 	 

[Signature Page to Office Lease Agreement]

 

EXHIBIT A

LAND

TRACT I — FEE SIMPLE

BEING a 3.125 acre tract of land in the Pierce Sullivan Survey, Abstract No. 749, City of Houston,
Harris County, Texas, being all of a 3.125 acre tract of land described in a deed filed for record
under Harris County Clerk’s File Number S840337, same being all of that same 3.1248 acre tract
described in a deed recorded under Harris County Clerk’s File No. M149382, which is out of a 9.7257
acre tract described in a deed recorded under the Harris County Clerk’s File No. F908820, which is
part of Restricted Reserve “H” as shown on the plat of Greenspoint Subdivision, Section One
recorded in Volume 258, Page 83 of the Harris County Map Records, said 3.125 acre tract being more
particularly described by metes and bounds as follows:

COMMENCING at a 5/8-inch iron rod found in the northerly right-of-way line of Sam Houston Parkway,
also know as Beltway 8 and as North Belt, for the most easterly cut-back corner on the northeast
corner of the intersection of Sam Houston Parkway with Northchase Drive;

THENCE N 37° 22' 25" W, 14.28 feet along a cut-back line to a 5/8-inch iron rod found for a
cut-back corner in the easterly right-of-way line of Northchase Drive;

THENCE in a northerly direction 337.23 feet along the easterly right-of-way line of Northchase
Drive (100 feet of R.O.W.), along the westerly boundary of said Reserve “H”, along the westerly
line of a 4.435 acre tract described in a deed recorded under the Harris County Clerk’s File No.
S840337 and the following arc of a curve to the left having a radius of 850.00, a central angle of
22° 43' 54" and a chord which bears N 04° 38' 49" W, 335.02 feet to a 5/8-inch iron rod found for
the northwest corner of said 4.435 acre tract and the POINT OF BEGINNING of the tract described
herein;

THENCE in a northerly direction, 205.73 feet along the easterly right-of-way of Northchase Drive,
along the westerly boundary of said Reserve “H”, along the westerly boundary of said 3.125 acre
tract and following the arc of a curve to the left having a radius of 850.00 feet, a central angle
13°52'03" and a chord which bears N 22°56'51" W, 205.23 feet to a 5/8-inch iron rod found for
corner;

THENCE N 42° 24' 44" E, 103.22 feet along the northwesterly line of said 3.125 acre tract to a
1/2-inch iron rod found for corner;

THENCE N 87° 24' 44" E, 245.37 feet along a northerly line of said 3.125 acre tract to a 1/2-inch
iron rod found for corner;

THENCE N 02° 35' 16" W, 5.61 feet along a westerly line of said 3.125 acre tract to a 1/2-inch iron
rod found for corner;

THENCE N 87° 24' 44" E, 242.67 feet along a northerly line of said 3.125 acre tract to a 1/2-inch
iron rod found for corner in the west line of a 6.886 acre tract described in a deed recorded under
the Harris County Clerk’s File No. R211967;

THENCE S 02° 35' 16" E, a total distance of 246.00 feet along the east line of said Reserve “H”,
along the east line of said 3.125 acre tract, along the west line of said 6.886 acre tract, along
the west line of a

A-1

 

0.1090 acre tract described in a quit claim deed recorded under Harris County Clerk’s File No.
F841668 and along the west line of Reserve “C” as shown on the plat of Greenbriar Place recorded in
Volume 292, Page 62 of the Harris County Map Records, passing at a distance of 57.10 feet to a
5/8-inch iron rod found for the southwest corner of said 6.886 acre tract, same being the northwest
corner of Reserve “D” of said Greenbriar Place, continuing along the east line of said 0.6306 acre
tract to a 5/8-inch iron rod found for the northeast corner of said 4.4353 acre tract;

THENCE S 87° 24' 44" W, 150.00 feet along a common line of said 4.4353 acre tract and said 3.125
acre tract to an “X” found on concrete for corner;

THENCE S 02° 35' 16" E, 25.00 feet along a common line of said 4.4353 acre tract and said 3.125
acre tract to a “X” found on concrete for corner;

THENCE S 87° 24' 44" W, 339.62 feet along a common line of said 4.4353 acre tract and said 3.125 to
the POINT OF BEGINNING and containing 3.125 acres of land.

TRACT II

Non-exclusive easements as contained in Easement Agreement dated May 5, 1989, filed May 8, 1989, by
and between Basil Georges and Two Greenspoint Place Limited Partnership under Clerk’s File No.
M149383 and amended under Clerk’s File No. V968770, both of the Real Property Records of Harris
County, Texas.

TRACT III

Being a 4.435 acre tract of land in the Pierce Sullivan Survey, Abstract No. 749, Harris County,
Texas, being all of that same 4.435 acre tract of land described in a deed filed for record under
Harris County Clerk’s File Number S840337, same being all of a called 4.4353 acre tract described
in a deed recorded under the Harris County Clerk’s File No. F284097 which is part of Restricted
Reserve “H” as shown on the plat of Greenspoint Subdivision, Section One recorded in Volume 258,
Page 83 of the Harris County Map Records, said 4.435 acre tract being more particularly described
by metes and bounds as follows:

BEGINNING at a 5/8-inch iron rod found in the Northerly right-of-way line of Sam Houston Parkway,
also known as Beltway 8 and as North Belt, for the most easterly cut-back corner on the northeast
corner of the intersection of Sam Houston Parkway with Northchase Drive;

THENCE N 37° 22' 25" W, 14.28 feet along a cut-back line to a 5/8-inch iron rod set for a cut-back
corner in the easterly right-of-way line of Northchase Drive;

THENCE in a northerly direction, 337.23 feet along the easterly right-of-way line of Northchase
Drive, along the westerly boundary of said Reserve “H”, along the westerly line of said 4.4353 acre
tract and following the arc of a curve to the left having a radius of 850.00 feet, a central angle
of 22° 43' 54" and a chord which bears N 04° 38' 49" W, 335.03 feet to a 5/8-inch iron rod found
for the northwest corner of said 4.435 acre tract, same being the southwest corner of a 3.125 acre
tract described in deed recorded under Harris County Clerk’s File No. S840337;

A-2

 

THENCE 87° 24' 44" E, 339.62 feet along a southerly line of said 3.125 acre tract and along a north
line of said 4.4353 acre tract to an “X” found in concrete for corner;

THENCE N
02° 35' 16" W, 25.00 feet along an easterly line of said 3.125 acre tract and along a
westerly line of said 4.435 acre tract to a 5/8-inch iron rod found for corner;

THENCE N 87° 24' 44" E, 150.00 feet along a southerly line of said 3.125 acre tract and along a
northerly line of said 4.435 acre tract to a 5/8-inch iron rod found in the east line of said
Reserve “H” for the northeast corner of said 4.435 acre tract and being in the west line of Reserve
“D” of Greenbrier Place of which a plat is recorded in Volume 292, Page 63 of the Harris County Map
Records and being in the west line of a 0.1090 acre tract described in a quit claim deed recorded
under the Harris County Clerk’s File No. F841668;

THENCE S 02° 35' 16" E, 490.00 feet along the east line of said Reserve “H”, along the west line of
said Reserve “D” and along the west line of said 0.1090 acre tract to a 5/8-inch iron rod found for
the southeast corner of said 4.435 acre tract, for the common south corner of said Reserve “H” and
said Reserve “D”, and being in the northerly right-of-way line of Sam Houston Parkway;

THENCE N 72° 16' 25" W, 102.85 feet along the northerly right-of-way line of Sam Houston Parkway
(as described in a deed recorded in Volume 6706, Page 75 of the Harris County Deed Records) and
along the southerly line of said Reserve “H” to a 5/8-inch iron rod set for the point of curvature
of a curve to the left;

THENCE in a westerly direction 381.54 feet continuing along the northerly right-of-way line of Sam
Houston Parkway, along the southerly boundary of said Reserve “H” and following the arc of said
curve to the left having a radius of 4002.11 feet, a central angle of 05° 27' 44" and a chord which
bears N 79° 00' 17" W, 381.39 feet to the POINT OF BEGINNING and containing 4.435 acres of land.

AND BEING the same property shown on those certain surveys prepared by Brown & Gay Engineers, Inc.,
certified by Paul A. Jurica, Jr. and Alan M. McLain, Job Nos. LPC02-T1 and LPC02, dated 12/1997,
last revised December 22, 2006 and January 11, 2007, respectively.

A-3

 

EXHIBIT B

FLOOR PLANS

[See Attached]

B-1

 

EXHIBIT B

B-2

 

EXHIBIT B

B-3

 

EXHIBIT B

B-4

 

EXHIBIT B

B-5

 

EXHIBIT B

B-6

 

EXHIBIT B

B-7

 

EXHIBIT B

B-8

 

EXHIBIT B

B-9

 

EXHIBIT B

B-10

 

EXHIBIT C

AIR CONDITIONING AND HEATING SERVICES

     Subject to the provisions of Section 3.1.1 (ii), Landlord will furnish Building standard air
conditioning and heating between 7 a.m. and 6 p.m. from Monday through Friday and between 8 a.m.
and 12 o’clock noon on Saturdays (the “Building Hours”), all exclusive of Holidays (as defined
below), all without charge to Tenant. Upon request of Tenant, made in accordance with the rules
and regulations for the Building, Landlord will furnish air conditioning and heating at other times
(that is, at times other than the Building Hours) in which event, except as set forth herein or in
the Lease, Tenant shall pay the cost of furnishing such services as set forth herein and in the
Lease as a portion of Operating Expenses. Landlord agrees to maintain the condition of the Leased
Premises during the above-described hours between 71 degrees and 75 degrees at less than 55%
relative humidity.

     The following dates shall constitute “Holidays” as said term is used in this Lease:

	 	1.	 	New Year’s Day
	 
	 	2.	 	Good Friday
	 
	 	3.	 	Memorial Day
	 
	 	4.	 	Independence Day
	 
	 	5.	 	Labor Day
	 
	 	6.	 	Thanksgiving Day
	 
	 	7.	 	Friday following Thanksgiving Day
	 
	 	8.	 	Christmas Day
	 
	 	9.	 	Any other holiday recognized and taken by Tenant

     If, in the case of any holiday set forth in 1 through 8 above, a different day shall be
observed other than the day set forth above, then that day which constitutes the day observed by
national banks in Houston, Texas on account of such holiday shall constitute the holiday under this
Lease.

     Notwithstanding anything contained in this Exhibit C, Tenant will have the right to change the
Building Hours and Holidays at its sole discretion. Any increases in costs to provide services
over and beyond what is described above will be paid by Tenant as a portion of Operating Expenses,
and, likewise, any reduction in costs will reduce Operating Expenses. In the event Tenant elects to
increase the Building Hours in all or any portion of the Building (which Tenant may elect to do in
its sole discretion) above 72 hours per week, Landlord may, upon written notice to Tenant, include
an additional charge as a part of Operating Expenses of $.625 per hour per applicable air handler
in the portion of the 263 Building being operated in excess of 72 hours per week and $1.25 per hour
per air handler in the portion of the Northchase Building being operated in excess of 72 hours per
week to represent unusual use of the capital systems of the Project.

C-1

 

EXHIBIT D

LEASEHOLD IMPROVEMENTS

     The provisions of this Exhibit D shall apply only to work to be done to the Leased Premises
pursuant to this Exhibit D.

     All alterations and physical additions related to the Initial Tenant Work to the Leased
Premises shall be done at Tenant’s sole cost and expense, except as specifically provided in
Article IV of this Exhibit D, and are herein called “Initial Tenant Work”. Capitalized terms used
herein that are not defined herein shall have the same meaning given to such terms in the Lease.

ARTICLE I. LANDLORD AND TENANT PRE-CONSTRUCTION OBLIGATIONS

	1.	 	Tenant Space Plan. If Tenant desires to undertake Initial Tenant Work, Tenant will deliver
to Landlord a detailed space plan containing the information described in Article V of this
Exhibit D together with other relevant information and written instructions relating thereto
(said space plan and other information and instructions being herein called the “Tenant Space
Plan”).

	2.	 	Landlord Review. Landlord will review the Tenant Space Plan to confirm that the Initial
Tenant Work contemplated thereby will not impair the structural, mechanical, electrical or
plumbing integrity of the Project. Landlord shall either approve or disapprove the Tenant
Space Plan within five (5) business days after the date Landlord receives the Tenant Space
Plan. If Landlord does not approve the Tenant Space Plan, Landlord will inform Tenant in
writing of its objections and Tenant will revise the same and deliver a corrected version to
Landlord for its approval within five (5) business days after the date Tenant receives
Landlord’s disapproval notice. The approval and revision process for the revised Tenant Space
Plan shall be the same as described in the previous two sentences. Failure of Landlord to
respond to Tenant within said five (5) business day period shall be deemed to be Landlord’s
approval of said submittal.

	3.	 	Tenant Working Drawings. After the Tenant Space Plan has been approved by Landlord, Tenant
shall cause working drawings (the “Tenant Working Drawings”) of the Initial Tenant Work to be
prepared and shall deliver the same to Landlord for its approval. The Tenant Working Drawings
shall consist of complete sets of plans and specifications, including detailed architectural,
structural, mechanical, electrical and plumbing plans for the Initial Tenant Work. The Tenant
Working Drawings shall be substantially consistent with the Tenant Space Plan without any
material changes. The Tenant Working Drawings shall be prepared at Tenant’s expense by
architects and engineers selected by Tenant and reasonably approved by Landlord. The approval
process for the Tenant Working Drawings shall be identical to the approval process for the
Tenant Space Plan described in paragraph 2 of this Article I.

ARTICLE II. SELECTION OF A CONTRACTOR AND CONSTRUCTION OF INITIAL TENANT WORK

	1.	 	Bid Letting. Tenant shall promptly submit the approved Tenant Working Drawings to one or
more of the contractor(s) on Schedule 1 of this Exhibit D selected by Tenant (the “Tenant
Contractor(s)”) for pricing. Within ten (10) days of the date Tenant submits the bid
proposals to the contractor(s), Tenant shall review the bid proposals and construction
schedules received by such date.

D-1

 

	2.	 	Selection of Bid. Tenant agrees to notify Landlord promptly of Tenant’s selection of
Tenant’s Contractor.

	3.	 	Tenant Contractor — Construction Coordination.

	 	(a)	 	Tenant Contractor shall (and its contract shall so provide):

	 	(i)	 	Comply with all additional rules and regulations relating to
construction activities in or on the Project as may be reasonably promulgated
from time to time by Landlord or its agents;
	 
	 	(ii)	 	maintain such insurance in force and effect as may be
reasonably requested by Landlord (attached hereto as Schedule 2) or as required
by applicable law ; and
	 
	 	(iii)	 	be responsible for reaching an agreement with Landlord and its
agents as to the terms and conditions for all contractor items relating to the
conducting of its work, including but not limited to, those matters relating to
use of elevators, systems interfacing, use of temporary utilities, storage of
materials, access to the Leased Premises and the Project and the return of
Building standard as well as other reusable materials.

	 	(b)	 	Landlord shall have the right to reasonably approve the mechanical, electrical,
plumbing, drywall, life safety, and sprinkler subcontractors and engineers to be used
by the Tenant Contractor.
	 
	 	(c)	 	As a condition precedent to Landlord permitting the Tenant Contractor to
commence the Initial Tenant Work, Tenant and the Tenant Contractor shall deliver to
Landlord such assurances or instruments as may be reasonably requested by Landlord to
evidence the Tenant Contractor’s and its subcontractor’s compliance or agreement to
comply with the provisions of this paragraph 3.

	4.	 	Tenant Contractor — Hold Harmless. Tenant shall indemnify and hold harmless Landlord, its
agents, contractors (including Landlord’s Contractor) and any mortgagee of Landlord from and
against any and all losses, damages, costs (including costs of suit and attorneys’ fees),
liabilities or causes of action for injury to, or death of, any person, for damage to any
property and (to the extent Landlord has made payments for Landlord’s Contribution in
accordance with the provisions of Exhibit D, Article IV) for mechanic’s, materialmen’s or
other liens or claims arising out of or in connection with the work done by Tenant Contractor
(and Tenant Contractor’s subcontractors and sub-subcontractors) under its contract with
Tenant.

	5.	 	Tenant Contractor — Mechanic’s and Materialmen’s Liens. Tenant shall require Tenant
Contractor to notify in writing all materialmen, contractors, artisans, mechanics, laborers
and other parties hereafter contracting with Tenant for the furnishing of any labor, services,
materials, supplies or equipment with respect to any portion of the Leased Premises that they
must look solely to Tenant for payment for same and shall simultaneously send copies of all
such notifications to Landlord for its review. Should any mechanic’s or other liens be filed
against any portion of the Project, including the Leased Premises, by reason of Tenant’s or
Tenant Contractor’s acts or omissions or because of a claim against Tenant or Tenant
Contractor, Tenant shall inform Landlord of such lien immediately and (to the extent Landlord
has made payments for Landlord’s Contribution in accordance with the provisions of Exhibit D,
Article IV) cause the same to be canceled or discharged of record by bond or otherwise within
twenty (20) days after

D-2

 

	 	 	receipt of notice by Tenant. If Tenant fails to cancel or discharge the lien within said
twenty (20) day period, and Landlord has made payments for Landlord’s Contribution relative
to the costs associated with such lien in accordance with the provisions of Exhibit D,
Article IV, Landlord may, at its sole option, cancel or discharge the same and upon
Landlord’s demand, Tenant shall promptly reimburse Landlord for all costs (including
attorneys’ fees) incurred in canceling or discharging such liens. To the extent Landlord
has failed to make payments of Landlord’s Contribution in accordance with the provisions of
Exhibit D, Article IV, all liens resulting from such failure shall be the responsibility of
Landlord to discharge and Landlord shall be responsible for project related delays and
damages that result from such failure to make payments.

	6.	 	Payment of Landlord. Tenant shall pay to Landlord all amounts payable by Tenant pursuant to
this Exhibit D within thirty (30) days after Tenant’s receipt from Landlord of an invoice and
supporting documentation therefor. Statements or invoices may be rendered by Landlord during
the progress of the Initial Tenant Work so as to enable Tenant to pay the Building Contractor,
subject to the terms of Article IV, without advancing Landlord’s funds to pay the cost of
Initial Tenant Work.

	7.	 	Default. The failure by Tenant to comply with the provisions of paragraphs 4, 5, or 6 of
this Article II shall, after the passage of the applicable notice and cure period, constitute
a default by Tenant under terms of Section 7.2 of the Lease and Landlord shall have the
benefit of all remedies provided for in the Lease.

	8.	 	Change Orders. Tenant may authorize changes in the Initial Tenant Work; provided that any
changes must meet the criteria set forth in Article I of this Exhibit D. Tenant shall also be
responsible for any delays or additional costs caused by such change orders.

	9.	 	As-Built Plans. Upon completion of the Initial Tenant Work, Tenant shall deliver to Landlord
a copy of the as-built plans and specifications for the Initial Tenant Work within thirty (30)
days of completing the same. Upon receipt, Landlord will transfer such plans to Landlord’s
Master Plans at Tenant’s expense.

ARTICLE III. LEASED PREMISES DELIVERY

	1.	 	Asbestos Survey. Landlord has, at its sole cost and expense, performed a limited Asbestos
Survey prior to or upon Lease Execution and deliver a copy of such Survey to Tenant within ten
(10) days of Lease Execution. Landlord shall, at its sole cost and expense, remove any
Hazardous Substances within the Leased Premises prior to delivery of the space for
installations or construction, with respect to Tenant performed work.

	2.	 	Mold Survey. During the life of the Lease, Landlord shall be responsible for the cost and
expense of removal of Toxic Mold and mildew, including repair to sheetrock, ceilings, etc.,
occurring in the building or Leased Premises resulting from water and/or moisture
infiltration: 1) through the roof, exterior walls or exterior glass, or 2) from the portion of
the sprinkler system, plumbing or HVAC system not installed by Tenant, and all such costs and
expenses shall not be reimbursable to Landlord through Operating Expenses or otherwise.
During the life of the Lease, Tenant shall be responsible for the cost and expense of removal
of Toxic Mold and mildew, including repair to sheetrock, ceilings, etc., occurring in the
Leased Premises resulting from water and/or moisture infiltration: 1) caused by Tenant’s
modification to the roof, exterior walls or exterior glass, or 2) from plumbing work,
sprinkler system work and HVAC system work installed by Tenant.

D-3

 

	3.	 	Initial Construction. The following provisions shall apply during construction of the
Initial Tenant Work: (a) no charges shall be borne by Tenant (prior to the Rent Commencement
Date) or any contractors for electricity; water; heating; ventilation, air conditioning
(including after-hours) and at all times following the Commencement Date, Landlord shall
provide access to the Project and the services listed in Sections 3.1.1(i), (ii), (iii), (vi),
and (viii) at reasonable levels sufficient for Tenant and its contractors to perform the
Initial Tenant Work with air conditioning at comfortable levels; use of elevators; chilled
water; or any metered computer floor utilities during construction; (b) contractors shall be
allowed to place a forty cubic-yard dumpster in the truck dock area during construction, but
such dumpster placement shall not interfere with daily deliveries and truck dock use by
Landlord; (c) contractors shall be allowed the dedicated use elevators during the construction
period, provided such elevator interiors are protected in a manner reasonably satisfactory to
Landlord, (d) there shall be no charge for contractor or subcontractor parking and such
parking shall at all times be in areas within the Project in areas designated by Landlord; and
(e) there shall be no charge for after-hours contractor or subcontractor access. Throughout
the weekend in which Tenant moves into the Leased Premises, Landlord shall provide HVAC
services to the Leased Premises at no charge to Tenant.

ARTICLE IV. MONETARY MATTERS

	1.	 	Landlord’s Contribution. Tenant shall be responsible for all costs and expenses incurred in
connection with the Initial Tenant Work, including those costs and expenses associated with
the preparation of architectural and engineering plans. However, Landlord shall pay for the
Initial Tenant Work as follows (“Landlord’s Contribution”): Landlord shall extend to Tenant
an allowance of $25.00 per square foot of Net Rentable Area contained within the Leased
Premises. Said Landlord’s Contribution is to be used for leasehold improvements,
architectural and engineering fees, including cabling for data and telecommunications and/or
construction management fees, signage, security, audio/visual equipment and up to $3.00 per
foot for relocation costs and furniture purchases. A construction management fee shall be
payable to Landlord in the amount of one and one-half percent (11/2%). Tenant may employ its
own construction management representative at Tenant’s sole cost and expense. All portions of
the Landlord’s Contribution other than payments to Tenant Contractor shall be paid by Landlord
to Tenant, or at Tenant’s election, to Tenant’s vendors within twenty (20) days after
submission by Tenant to Landlord of an invoice, together with supporting documentation
therefor.

	2.	 	Payment of Tenant Contractor. Landlord shall pay all billed costs as construction progresses
in accordance with item 1 above. However, in no event shall Landlord be required to pay to
Tenant Contractor an amount in the aggregate greater than Landlord’s Contribution.

ARTICLE V. MINIMUM INFORMATION REQUIRED OF TENANT WORKING DRAWINGS

     Tenant shall provide to Landlord a Tenant Working Drawings that contains architectural,
mechanical, electrical and plumbing plans prepared and stamped by a licensed architect or engineer,
as the case may be, indicating:

	 	1.	 	Location and type of all partitions.
	 
	 	2.	 	Location and types of all doors indicating hardware and providing a keying schedule.
	 
	 	3.	 	Location and type of glass partitions, windows, doors and framing.
	 
	 	4.	 	Location of telephone equipment room accompanied by a signed approval of the
telephone company.
	 
	 	5.	 	Critical dimensions necessary for construction.

D-4

 

	 	6.	 	Location, circuit number and specifications of all electrical devices, outlets,
switches, telephone outlets, etc.
	 
	 	7.	 	Location and type of all lighting and access control systems.
	 
	 	8.	 	Location and type of equipment that will require special electrical
requirements. Provide manufacturers’ specifications for use and operation.
	 
	 	9.	 	A load analysis of all electrical devices.
	 
	 	10.	 	Location, weight per square foot and description of any exceptionally heavy
equipment or filing system exceeding 50 psf live load.
	 
	 	11.	 	Location, type and specifications of the HVAC distribution systems and controls.
	 
	 	12.	 	Requirements for special air conditioning or ventilation.
	 
	 	13.	 	Type and color of floor covering.
	 
	 	14.	 	Location, type and color of wall covering.
	 
	 	15.	 	Location, type and color of paint and/or finishes.
	 
	 	16.	 	Location and type of plumbing, including special sprinklering requirements.
	 
	 	17.	 	Location and type of kitchen equipment.

Details Showing:

	 	1.	 	All millwork with verified dimensions and dimensions of all equipment to be
built-in.
	 
	 	2.	 	Corridor entrances.
	 
	 	3.	 	Bracing or support of special walls, glass partitions, etc., if desired. If
not included with the Tenant Working Drawings, the Building architect will design, at
Tenant’s expense, all support or bracing required.

D-5

 

SCHEDULE 1

TO EXHIBIT D

APPROVED CONTRACTORS

DE Harvey Builders

Spaw Maxwell

JE Dunn

Schedule 1 to Exhibit D

 

 

SCHEDULE 2

TO EXHIBIT D

INSURANCE REQUIREMENTS

VENDOR CERTIFICATE OF INSURANCE REQUIREMENTS

16666 Northchase and 263 N. Sam Houston Pkwy

     All vendors, at their cost and expense, shall provide and maintain the following insurance coverage
while working at 16666 Northchase and 263 Sam Houston Parkway Buildings managed by Lincoln Property
Company. Therefore, please arrange to have your insurance company provide us with a
Certificate of Insurance with the following coverage amounts and required Landlord
information as shown below:

	A.	 	Worker’s Compensation
	 
	 	 	Worker’s Compensation and Employers’ Liability Insurance which shall fully comply with the
statutory requirements of all state laws as well as federal laws which may be applicable.
Employers’ Liability limit shall be $500,000 per accident for bodily injury and $500,000 per
employee/aggregate for disease. Tenant Contractor and its underwriter shall waive subrogation
against Landlord and Tenant.
	 
	B.	 	General Liability
	 
	 	 	Commercial General Liability Insurance with a minimum combined single limit of liability of
$1,000,000 per occurrence and $2,000,000 aggregate for bodily injury and/or death and/or
property damage and/or personal injury. This coverage shall be written on an occurrence basis
and shall include products/completed operations coverage, to be maintained for three (3) years
following completion and acceptance of Tenant Contractor’s work and shall also include Broad
Form Contractual liability specifically covering this Lease.
	 
	C.	 	Automobile Liability
	 
	 	 	Business Automobile Liability Insurance covering all owned, hired, and non-owned vehicles and
equipment used by Tenant Contractor with a minimum combined single limit of liability of
$1,000,000 for injury and/or death and/or property damage.
	 
	D.	 	Excess Liability Coverage
	 
	 	 	Excess coverage with respect to (A) employers’ liability only, (B) and (C) above with a minimum
combined single limit of $5,000,000.
	 
	E.	 	Fidelity Bond
	 
	 	 	Tenant Contractor shall maintain Fidelity Bond or comprehensive crime insurance coverage for the
dishonest acts of its employees in a minimum amount of $1,000,000. Landlord and Tenant shall be
named as “Loss Payees, As Their Interests May Appear”, on this Fidelity Bond or comprehensive
crime insurance policy.

Schedule 2 to Exhibit D

 

 

	F.	 	Errors and Omissions Insurance
	 
	 	 	Any Tenant Contractor providing professional services shall maintain Errors and Omissions
insurance covering any damages due to errors and omissions of the Tenant Contractor in a minimum
amount of $2,000,000. Such coverage will not be required to be project specific unless Manager
deems project specific coverage to be advisable and obtains Landlord’s approval to require such
coverage.
	 
	G.	 	Other Coverage
	 
	 	 	Landlord reserves the right to require, upon Landlord’s request, certain other types of
coverage, including but not limited to, payment bonds, performance bonds, or other insurance or
bonds as Landlord deems appropriate.

	•	 	As Certificate Holder:

LPC Commercial Services, Inc., as agent for

RFP Lincoln Greenspoint, LLC

263 N. Sam Houston Pkwy., Suite 110

Houston, Texas 77060

	•	 	As Additional Insured:

LPC Commercial Services, Inc., as agent for

RFP Lincoln Greenspoint, LLC

263 N. Sam Houston Pkwy., Suite 110

Houston, Texas 77060

Schedule 2 to Exhibit D

 

 

EXHIBIT E

BUILDING MOUNTED SIGNAGE SPECS

     Freestanding non-retail, office buildings located within 600’ of the Sam Houston Tollway with
a height of forty-eight feet (48’) or greater shall have the option of wall mounted identification
for a building occupant. The size of the signage shall not exceed the lesser of (a) forty-eight
inches (48”) in height and thirty linear feet (30’) in length from right to left (provided the
total length of the sign does not exceed twenty-five percent (25%) of the total horizontal
dimension of the building) or (b) one percent (1%) of the total square footage of the façade that
the sign will be attached to. Size must also be aesthetically proportional to the building size as
determined at the sole discretion of the ARC (as defined in Section 3.3). Such façade must face
the Sam Houston Tollway. Preferred placement of logos is on a monument sign, but may be allowed on
the building facade. Logo size must be proportional and color compatible to the building and is
subject to approval by the ARC. No vision glass is to be obstructed by any signage or logos.

     Painted acrylic, back-lit letters, or individually mounted channel letters, with or without
interior neon tube illumination and only made with non-ferrous metal, is allowable. Channel
letters must have Plexiglas facings a minimum of 3/16 inch thick. Color of Plexiglas is subject to
approval by the ARC; color of return to match building. Exposed fluorescent or neon lighting,
fastenings and wiring are not permitted.

     No lettering shall be mounted above the building line. A complete wall elevation, including
dimensions, material and mounting specifications and color samples, must be approved by the ARC
prior to fabrication and installation of any graphics.

     The building owner agrees that any wall mounted identification mounted on the building shall
be maintained in good repair and working condition at all times and shall be promptly removed when
the tenant vacates the building.

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EXHIBIT F

RENEWAL OPTION

     Landlord agrees that as long as Tenant is not in monetary default under the terms of the Lease
beyond any applicable notice and cure period, Tenant shall have the option to renew the Term of
this Lease for either a renewal term of ten (10) years or a renewal term of five (5) years, at
Tenant’s option (“Renewal Term”), to commence at the expiration of the initial Term of the Lease
and to expire on the fifth (5th) anniversary or tenth (10th) anniversary thereof, as applicable.
In the event Tenant elects to renew for a term of five (5) years, Tenant shall have the right to
renew this Lease for additional five (5) years at the end of the initial renewal Term of this
Lease. Tenant shall exercise its option to renew the Term of the Lease by delivering written notice
of such election specifying whether Tenant elects to renew the term of the Lease for five (5) years
or ten (10) years, to Landlord at least twelve (12) months prior to the expiration of the initial
Term. Except as set forth in the next paragraph, Tenant’s exercise of such option shall be
irrevocable. Any such renewal shall be upon the same terms and conditions of the Lease as it may
have been amended, except (a) the Base Rental during the Renewal Term shall be at the prevailing
Market Base Rental Rate at the beginning of the applicable Renewal Term, and (b) the exercise of
any renewal option if at all, shall be as to all of the Leased Premises, and there shall be no
right to exercise a renewal option for less than all of the Leased Premises. Notwithstanding
anything contained in this Exhibit F to the contrary, all rights provided to Tenant in this Lease,
including but not limited to, renewal rights, signage rights and other similar rights are
assignable to any assignee.

     As used in this Lease, the term “Market Base Rental Rate” shall mean the rate charged for
space of comparable size and condition in comparable class buildings in the Greenspoint Area, for
the date such determination is being made, taking into consideration (but not limited to) the
location, quality and age of
the building, term of length of lease, floor level, parking charges and/or concessions,
quality and condition of leasehold improvements to be provided (in addition to, but not including,
those contained within the Leased Premises at the time of determination), rental abatements, lease
takeover/assumptions, moving expenses, construction allowances and other concessions, extent of
service to be provided, distinction between “gross” and “net” lease, base year or amount allowed by
Landlord for payment of building operating expenses (expense stop) the absence of any lost rental
period if the term of the Lease is renewed, creditworthiness and size in terms of total square
footage leased, the time the particular rental rate under consideration became or is to become
effective, and any other relevant term or condition.

     Upon Landlord’s receipt of written notification from Tenant of Tenant’s exercise of its
Renewal Term option, Landlord shall deliver to Tenant Landlord’s interpretation of the then
prevailing Market Base Rental Rate for the Leased Premises for the Renewal Term. Should Tenant and
Landlord be unable to mutually agree upon the Market Base Rental Rate for the Leased Premises for
the Renewal Term within sixty (60) days after Tenant’s receipt of Landlord’s interpretation of the
Market Base Rental Rate, then Tenant shall have the right to either (i) rescind the exercise of the
Renewal Term Option, in which event the Lease shall terminate at the end of the initial Term, or
(ii) request that the Market Base Rental Rate for the Leased Premises for the Renewal Term be
determined pursuant to the procedure set forth in the following paragraph.

     Landlord and Tenant shall promptly attempt to agree upon an arbitrator meeting the
qualifications hereinafter set forth (the “Arbitrator”). The Arbitrator selected shall be a
licensed real estate broker, with not less than ten (10) years experience in negotiating office
leases in the Houston Suburban Office Market who shall not be with a firm or personally represent
exclusively either tenants or landlords. As a condition to selection, the Arbitrator must also
have negotiated at least one (1) major office lease (50,000 square feet or more) in the location of
Houston Suburban Office Market during the twelve (12) months

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preceding his or her selection as the
Arbitrator. The Arbitrator selected shall determine the Market Base Rental Rate by selecting
Landlord’s or Tenant’s proposed rental rate, whichever in the Arbitrator’s judgment most closely
resembles the prevailing Market Base Rental Rate. If Landlord and Tenant are unable to agree upon
the Arbitrator within fifteen (15) days after submission of the determination to arbitration, then
the Arbitrator shall be selected by the managing officer of the local office of the American
Arbitration Association, but if such officer fails to act within ten (10) days, then the Arbitrator
shall be selected by the Chief Judge of the United States District Court for the Southern District
of Texas, Houston Division, acting in such judge’s individual, and not judicial, capacity. The
determination of the Arbitrator shall be final and binding on Landlord and Tenant. Until the
Market Base Rental Rate has been finally determined, Tenant shall pay Base Rental based upon
Landlord’s good faith determination thereof, and an appropriate refund shall be made to or by
Tenant within ten (10) days after a final determination of the Market Base Rental Rate is made.
The fees and expenses of the Arbitrator and all other expenses, if any, incurred in connection with
arbitration of the Market Base Rental Rate shall be borne equally by Landlord and Tenant.

F-2

 

EXHIBIT G

SUBLESSEE NON-DISTURBANCE AGREEMENT

NON-DISTURBANCE AGREEMENT

BETWEEN

                                         (FEE OWNER)

AND SUBTENANT

     THIS
AGREEMENT (the “Agreement”) made the ___ day of                     . 200_,
between                     , hereinafter referred to as “Prime Landlord,” and
                    ,                      a                      having an office at                  
    hereinafter
referred to as “Subtenant,”

WITNESSETH:

     WHEREAS, Prime Landlord is the owner of leased premises located at
                    , Houston, Texas, more particularly shown on the Site Plan attached as
Exhibit A (“Leased Premises”) which Leased Premises are subject to a certain lease
(hereinafter referred to as the “Prime Lease”) dated
______ ___, 200___ made to
                    , as Tenant, hereinafter sometimes referred to as “Sublessor”; and

     Sublessor, as lessor, and Subtenant, as lessee, are about to enter into a sublease of
part of said Leased Premises, a copy of which is attached hereto as Exhibit B, hereinafter
referred to as the “Sublease”; and

     The parties hereto desire to assure Subtenant’s possession of the Leased Premises to be
sublet under the said sublease upon the terms and conditions therein mentioned, irrespective
of a termination of the Prime Lease;

     NOW, THEREFORE, in consideration of the covenants hereinafter set forth, the parties
hereto hereby covenant and agree as follows:

     1. Prime Landlord consents to the execution and delivery of the Sublease in the form
annexed as Exhibit B.

     2. (A) If the current term of the Prime Lease, or any renewal thereof, shall terminate
before the expiration of the term of the Sublease, as the Sublease may be renewed in
accordance with the terms thereof, for any reason other than condemnation, fire or other
damage, the Sublease, if then in existence, shall continue as a lease between Prime Landlord
as lessor, and Subtenant, as lessee, with the same force and effect as if Prime Landlord, as
lessor, and Subtenant, as lessee, had entered into a lease as of the date of the termination
of the Prime Lease, containing the same terms, covenants and conditions as those contained
in the Prime Lease (other than the description of the subleased premises which shall mean
the premises leased pursuant to the Sublease), including the rights of renewal thereof, for
a term equal to the unexpired term of the Sublease.

     (B) The rights under this paragraph 2 shall inure to the benefit of only the Subtenant
herein named and shall not pass to any assignee of the Sublease or any other party.

G-1

 

     (C) Any option which shall be or become vested in Subtenant to cancel the Sublease,
because of default of Prime Tenant, shall be ineffective unless Subtenant shall give Prime
Landlord notice thereof, and Prime Landlord shall fail to cure such default within the time
and in the manner Prime Tenant would have been authorized to do had Prime Tenant
simultaneously received such notice. The provisions of this paragraph shall apply to any
default occurring before or after the lease goes into effect.

     3. From and after such termination of the Prime Lease:

     (A) Subtenant will attorn to Prime Landlord, and Prime Landlord will accept such
attornment.

     (B) Prime Landlord will have the same remedies by entry, action or otherwise for the
nonperformance of any agreement contained in the Sublease for the recovery of rent, for the
commission of any waste or for any cause of forfeiture which Sublessor had or would have had
if the Prime Lease had not been terminated.

     (C) From and after the time of such attornment, Subtenant shall have the same remedies
against Prime Landlord for the breach of an agreement contained in the Sublease that
Subtenant might have had against Sublessor if the Prime Lease had not been terminated,
except that Prime Landlord shall not be (i) liable for any act or omission of Sublessor,
(ii) subject to any offsets or defenses which Subtenant might have against Sublessor, or
(iii) bound by any rent or additional rent which Subtenant might have paid in advance to
Sublessor.

     4. Neither Subtenant nor its successors or assigns shall enter into any agreement which
shall modify, surrender or merge the Sublease. Any agreement made in contravention to
the provisions of this paragraph 4 shall be of no force or effect as to Prime Landlord.

     5. The term “Prime Landlord” as used in this agreement means only the owner for the
time being of the aforementioned Leased Premises, so that in the event of any sale or other
transfer of an interest therein, Prime Landlord shall be and thereby is entirely freed and
relieved of all covenants and obligations of the Prime Landlord hereunder. The provisions of
this agreement, however, shall run with the land and bind any subsequent owner of the Leased
Premises.

     6. All notices, demands, requests, consents and approvals which may or are required to
be given by either party to the other under this Sublease shall be in writing and shall be
deemed given, delivered and received either (a) when hand delivered (including delivery by a
delivery service providing a receipt therefor) or when received pursuant to any delivery by
telex, telefax, telecopier, telegram or overnight mail service, or (b) the third (3rd)
business day following the date deposited in the United States mail, certified or
registered, postage prepaid, in either case addressed as follows:

G-2

 

	 	(a)	 	If to Sublessor:

	 	 	 

	 
	 	 	 

	 
	 	 	 

With a copy to:

	 	 	 

	 
	 	 	 

	 
	 	 	 

	 	(b)	 	If to Sublessee:

	 	 	 

	 
	 	 	 

	 
	 	 	 

With a copy to:

	 	 	 

	 
	 	 	 

	 
	 	 	 

	 	(c)	 	If to Prime Landlord:

	 	 	 

	 
	 	 	 

	 
	 	 	 

With a copy to:

	 	 	 

	 
	 	 	 

	 
	 	 	 

     Each party may designate such other parties or addresses to which such notices may be
sent by providing notice of the same in writing to the other, effective fifteen (15) days
from the date such party or address change notice is given in accordance with this Section.

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     IN WITNESS WHEREOF, the parties hereto have duly executed this agreement the day and
year first above written.

	 	 	 	 	 	 	 
	 	 	PRIME LANDLORD:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SUBTENANT:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 
	THE STATE OF TEXAS

	 	§
	 	 
	 

	 	§	 	 
	COUNTY OF HARRIS

	 	§	 	 

     This
instrument was acknowledged before me on
                    , 200___ by ______,                      of                     , a
                    , on behalf of said                     .

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Notary Public in and for the State of Texas	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	(SEAL)	 	My commission expires:                                                        	 	 

	 	 	 	 	 
	THE STATE OF TEXAS

	 	§
	 	 
	 

	 	§	 	 
	COUNTY OF HARRIS

	 	§	 	 

     This
instrument was acknowledged before me on                     , 200___ by
                    ,                      of                     , a
                    , on behalf of said                     .

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Notary Public in and for the State of Texas	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	(SEAL)	 	My commission expires:                                                        	 	 

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     The undersigned hereby consents to the execution and delivery of the foregoing
instrument and agrees that neither the execution of the same nor anything done pursuant to
the provisions thereof shall be deemed or taken to modify the Prime Lease therein referred
to.

	 	 	 	 	 	 	 
	 	 	SUBLESSOR:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	Dated:                     , 200___

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 
	THE STATE OF TEXAS

	 	§
	 

	 	§
	COUNTY OF HARRIS

	 	§

     This
instrument was acknowledged before me on                     , 200___ by
                    ,                      of                     , a
                    , on behalf of said                     .

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Notary Public in and for the State of Texas	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	(SEAL)	 	My commission expires:                                                        	 	 

G-5

 

EXHIBIT H

PARKING

     Landlord hereby agrees to make available to Tenant and Tenant shall be entitled to use the
entire parking garage located on the land and all surface parking, at no additional charge except
as hereinafter provided (subject to the 53 Space Grant, as defined in Section 8.8 of the Lease).
Tenant shall have the right, in Tenant’s discretion, to designate reserved parking in locations to
be determined by Tenant. Tenant may elect to construct carports for the surface parking spaces or
may, with notice given on or before ninety (90) days prior to the date Tenant requests such
construction of said carports to commence, require Landlord to construct such carport parking (not
to exceed 125 spaces), provided such written notice is given prior to March 1, 2009. After that
date, Tenant shall continue to have the right to construct the carports at Tenant’s expense. In
the event Tenant elects to require Landlord to construct the carport, Tenant shall pay Landlord
$15.00 per month per carport space. Such payments shall be a part of the Rent as such term is
defined herein and shall be due and payable concurrently with Base Rental.

H-1

 

EXHIBIT I

FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

SUBORDINATION, NONDISTURBANCE

AND ATTORNMENT AGREEMENT

     THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”),
dated as of
                                        
                    , 2007 by and between WEBSTER BANK, NATIONAL
ASSOCIATION, a national banking association having an office and place of business at 175 Federal
Street, Suite 507, Boston, Massachusetts 02110 (“Mortgagee”), and
                    , a                     
 having an office and mailing address at                      ___(“Tenant”), and
                     (“Landlord”).

WITNESSETH:

     WHEREAS,
Tenant has entered into a certain lease dated                     , [as amended by                     
dated
                 ] (such lease, [as so amended,] being hereinafter referred to as the “
Lease”),
with Landlord, covering premises (the “Demised Premises”) located in                     ,
                    , being [a portion of]
the real property described in Schedule A attached hereto and made a part hereof (such real
property, together with the improvements thereon, being hereinafter referred to as the
“Mortgaged Property”); and

     WHEREAS, Mortgagee has made or is about to make a mortgage loan (the “Loan”) to
Landlord in the amount of $         , which Loan is, or will be, evidenced by a certain promissory note to
be dated on or about the date of funding of the Loan in the principal
amount of $              (as
presently in effect and as the same may be amended or restated from time to time and together with
any notes given in substitution or replacement thereof, the “Note”), and secured by, among
other things, a certain [deed of trust] [mortgage deed, security agreement, assignment of rents and
leases and fixture filing] to be dated on or about the date of funding of the Loan and intended to
be recorded in the land records in and for          ,             ,on the date of and prior to the recording hereof, encumbering the Mortgaged Property (as
amended, restated or supplemented from time to time, the “Mortgage”), and an assignment of
leases and rents to be dated on or about the date of the funding of the Loan and intended to be
recorded in the Land Records, on the date of and prior to the recording hereof (as amended,
restated or supplemented from time to time, the “Assignment of Leases”), assigning all of
Landlord’s interest in and to the leases and rents accruing or arising from the Mortgaged Property;
and

     WHEREAS, Mortgagee, Tenant and Landlord desire to set forth their agreement to the matters set
forth below;

     NOW, THEREFORE, consideration of the foregoing, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as follows:

     1. The Lease is and shall be subject and subordinate to the Mortgage and to all rights of
Mortgagee thereunder, and to all renewals, modifications, consolidations, amendments, increases,
replacements and extensions thereof.

I-1

 

     2. If the interest of Landlord in and to the Demised Premises, or the interest of any
subsequent owner of the Demised Premises, shall be transferred by reason of a foreclosure of the
Mortgage, a conveyance in lieu of such foreclosure, or other proceedings to enforce the Mortgage,
Tenant shall attorn to Mortgagee and recognize Mortgagee as its landlord for the unexpired balance
(and any extension or renewals, if exercised) of the term of the Lease. As used herein, the term
“Mortgagee” shall include Mortgagee named above, together with any person that is a
purchaser or transferee in foreclosure or conveyance in lieu of foreclosure and the successors,
heirs, executors and assigns of any such person. Notwithstanding the foregoing, if the Lease shall
be terminated as a matter of law as a result of any such proceedings, Tenant shall attorn to and
recognize Mortgagee as its landlord for a term equal to the unexpired balance (and any extension or
renewals, if exercised) of the term of such terminated Lease under the terms and conditions of the
Lease.

     3. In the event of any foreclosure of the Mortgage, Mortgagee will not terminate the Lease,
nor name or join 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 Mortgagee
will not seek affirmative relief against Tenant, nor disturb the right of possession of Tenant to
the Demised Premises and the Lease will continue in full force and effect between Mortgagee and
Tenant, so long as Tenant is not in default under any of the terms, covenants or conditions of the
Lease.

     4. If Mortgagee succeeds to the interest of Landlord or any successor to Landlord, Mortgagee
shall not be:

     (a) liable for any act, omission, warranty or representation of any prior landlord
(including, but not limited to, Landlord) in connection with or arising out of the Lease
occurring before the date of a foreclosure except for repair and maintenance obligations of
continuing nature imposed on the landlord under the Lease; provided, however, that any
Mortgagee shall be liable and responsible for the performance of all covenants and
obligations of Landlord under the
Lease accruing from and after the date that it takes title to the property; provided,
however, if after succeeding to Landlord’s interest under the Lease any Mortgagee fails or
refuses to perform or complete any improvements or installations which Landlord would have
been obligated to perform under the Lease or complete or fails or refuses to make any loan
or contribution towards improvements or installations which are required to be made by
Landlord under the Lease, Tenant shall be entitled to exercise any and all remedies provided
to Tenant by the Lease for a failure by Landlord to perform or complete any such initial
improvements or installations or to make such loan or contribution;

     (b) liable for the return of any security deposits held pursuant to the Lease, except
to the extent any such security deposits are transferred to Mortgagee;

     (c) subject to any offsets (except those offsets provided for in the Lease) or defenses
which Tenant might have against any prior landlord (including, but not limited to, Landlord)
that arose prior to the date of a foreclosure;

     (d) bound by any rent or additional rent which Tenant might have paid for more than the
then current month to any prior landlord (including, but not limited to, Landlord) unless
such rent has been received by Mortgagee; or

     (e) 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;
provided, however, Tenant shall have the right to amend the Lease without Mortgagee’s
consent

I-2

 

to the extent such amendment does not decrease the rent or other material
obligations of Tenant or revise or place additional material obligations or duties on the
Landlord under the Lease;

     In no event shall Mortgagee have any personal liability as successor to Landlord and Tenant shall
look only to the estate and property of Mortgagee in and to the Mortgaged Property (and any net
proceeds of the sale thereof or rentals received therefrom) for the satisfaction of Tenant’s
remedies for the collection of a judgment (or other judicial process) requiring the payment of
money in the event of any default by Mortgagee as landlord under the Lease, and no other property
or assets of Mortgagee shall be subject to levy, execution or other enforcement procedure for the
satisfaction of Tenant’s remedies under or with respect to the Lease.

     5. Tenant acknowledges having been notified that Landlord’s interest in and to the Lease has
been assigned to Mortgagee pursuant to the Assignment of Leases and Rents and that Landlord has
been granted the license to collect all rent and other amounts payable under the Lease
(collectively, “Rent”), provided no Event of Default exists under, and as defined in, the
Mortgage. Tenant further acknowledges that if an Event of Default shall exist, Mortgagee has the
right, power and authority to direct Tenant to make payment of all Rent directly to Mortgagee or
its agents and agrees that upon such direction Tenant shall make such payment of Rent to Mortgagee
or its agents in accordance with the written direction of Mortgagee and the payments will be
credited against the Rent due under the Lease. Landlord shall indemnify, defend (with counsel
reasonably acceptable to Tenant) and hold Tenant harmless from any loss, cost, expense or claim
incurred by Tenant in connection with its compliance with this provision. Landlord waives any
right, claim or demand it may have against Tenant by reason of such direct payment to Mortgagee and
agrees that such direct payment to Mortgagee shall discharge all obligations of Tenant to make such
payment to Landlord. Until further notice from Mortgagee, however, Tenant will continue to make
all payments under the Lease to Landlord and otherwise look solely to Landlord for the performance
of the lessor’s obligations under the Lease.

     6. So long as the Mortgage is in effect, Tenant will not, without Mortgagee’s prior written
consent, subordinate the Lease to any other lien against the Mortgaged Property. Tenant will allow
Mortgagee’s employees and representatives to inspect the Demised Premises from time to time upon
reasonable advance notice.

     7. Tenant agrees to send a copy of all notices, requests or consents under the Lease
(including notices of default) in writing, by certified mail, return receipt requested or by
nationally recognized overnight delivery service providing evidence of the date of delivery, with
all charges prepaid to Mortgagee at:

WEBSTER BANK, NATIONAL ASSOCIATION

175 Federal Street, Suite 507

Boston, Massachusetts 02110

Attention: Eric J. Gilliland

     8. Tenant shall afford Mortgagee the same opportunity provided to Landlord under the Lease to
cure any defaults of Landlord under the Lease, and upon request by Mortgagee from time to time
shall provide Mortgagee with an estoppel certificate covering such matters as Mortgagee shall
reasonably request. Mortgagee’s cure of Landlord’s default shall not be considered an assumption
by Mortgagee of Landlord’s other obligations under the Lease. If Mortgagee or any successor or
assign becomes obligated to perform as landlord under the Lease, Mortgagee or such successor or
assign will be released from such Lease obligations when such person or entity assigns, sells or
otherwise transfers its interest in the Premises or the Property.

I-3

 

     9. This Agreement shall inure to the benefit of, and be binding upon, Tenant, Landlord,
Mortgagee and their respective successors, assigns, heirs, administrators, executors, agents and
representatives.

     10. This Agreement contains the entire agreement between Mortgagee and Tenant with respect to
the subject matter of this Agreement, may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute and be construed as one and
the same instrument and may be amended only by a writing signed by Mortgagee and Tenant.

     11. Nothing contained in this Agreement shall affect Tenant’s express contractual rights of
offset and abatement set forth in the Lease, which rights shall survive any foreclosure (or other
transfer) and remain in full force and effect.

     12. Mortgagee shall make casualty insurance and condemnation proceeds available to Landlord
for restoration in accordance with the provisions of the Lease.

[Remainder of page intentionally left blank; signature page follows.]

I-4

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first
above written.

	 	 	 	 	 	 	 
	 	 	MORTGAGEE:	 	 
	Signed, Sealed and Delivered
	 	 	 	 	 	 
	in the Presence of	 	WEBSTER BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	By: Eric J. Gilliland, Vice President	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

I-5

 

	 	 	 
	COMMONWEALTH OF MASSACHUSETTS
	 	)
	 
	 	) ss:
	COUNTY OF                     
	 	)

     On this                      day of                     , 2007, before me
personally appeared                     ,                      of              
       , a             
, to me known to be the person who executed the foregoing instrument, and he
thereupon duly acknowledged to me that he executed the same to be his free act and deed on behalf
of such                     .

	 	 	 	 	 
	 	 	 
	 	 	Name:
	 

	 	 	 	 
	 

	 	Notary Public	 	 

					
	 

	 	My Commission Expires:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	[SEAL]	 	 

	 	 	 
	COMMONWEALTH OF MASSACHUSETTS
	 	)
	 
	 	) ss: Boston                               , 2007
	COUNTY OF                     
	 	)

     On this                      day of                     , 2007, personally appeared
Eric J. Gilliland, Vice President of WEBSTER BANK, NATIONAL ASSOCIATION, signer of the foregoing
instrument and acknowledged the same to be his free act and deed as such officer and the free act
and deed of said bank, before me this day.

	 	 	 	 	 
	 	 	 
	 	 	Name:
	 

	 	 	 	 
	 

	 	Notary Public	 	 

					
	 

	 	My Commission Expires:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	[SEAL]	 	 

I-6

 

SCHEDULE A

Legal Description

I-7

 

 

SCHEDULE 3.3

SIGNAGE

[SEE ATTACHED]

Schedule 3.3

 

 

SCHEDULE 3.3

SIGNAGE

On exterior building signage the logo should be used without the tagline. While signage
guidelines for new buildings will need to be addressed and approved on a case-by-case basis as
local restrictions and building codes vary, In general, please try to follow these examples.
Provide the sign vendor one of the logos (usually a vector file, which are in the .ai file format
on the CD and at ray.Exterran.com) from which to work.

Retrofitting existing signage present a variety of challenges since the shape of the new logo is in
different proportion to the old ones. Follow the parameters closely and check with Corporate
Communications if there are any configurations for which you need help confoming to the guidelines.
Do not breakapart and separate, alter the proportion or add any elements to the trademark.

Signage

How should the logo be used on our signs?

Common Types of Signs

Cut out letters and elements

This style of signage is a wall sign that is mounted to the
exterior of the building. They come in a variety of styles, some
with the elements backlit. Signage companies can match the paint
color on these fabricated letter to the Exterran PMS colors,
Example rendering of this type of sign in figure
Œ

Box or cabinet signs

These are the most common and ecomonical lighted signs.
Vinyl or painted letters and elements are adhered to an acrylic
panel and placed on the face of a lightbox frame, sometimes
incorporating 3-D elements. In some retrofit situations, you may
want to add a 3-D element for the sweeping “x” that breaks
outside of the cabinet frame to make the best use of the
proportions of an existing cabinet rather than replacing the
cabinet, as in figure �

Flat vinyl letters or painted signs

These are flat, one- or two-sided signs in painted wood,
plastic, metal or other materials. They may be unlighted or
lighted with external fixtures. See figure
Ž

Monument signs

Monument signs appear at the roadside usually marking the
front of the facility’s property or driveway entrance. They come
in a variety of materials (stucco, stone, metal, painted
materials). You may choose to use the logo to match its PMS
colors or in monochromatic scheme depending on the material. For
etched glass, stainless steel or engraved stone, use the FAX.ai
file (an all black logo in vector format). Submit your sign
company rendering to ensure it maintains the consistency of the
corporate standards. (An example is provided in figure
�.)

Pole signs

This type of signage marks the location from a street or
highway and is placed high on a pole for easy visibility. The
most common versions of this sign are a cabinet sign or flat sign
mounted to the pole.

Schedule 3.3

 

 

SCHEDULE 4.6

CONDITION SURVEYS

16666 Northchase Drive

	1.	 	Roof Condition Report dated August 7, 2007, prepared by Michael Hardin & Associates, Inc.
	 
	2.	 	Skin/Skylights report dated August 7, 2007, prepared by Restoration Services, Inc.
	 
	3.	 	Indoor Air Quality report dated August 8, 2007, prepared by Envirotest
	 
	4.	 	ADA-TAS Observations dated August 7, 2007, prepared by Caton Consulting, Inc.
	 
	5.	 	Elevator Survey Information dated August 9, 2007, prepared by ThyssenKrupp Elevator
	 
	6.	 	Electrical Survey dated August 10, 2007, prepared by E3 Electrical Company
	 
	7.	 	HVAC Assessment Survey dated August 9, 2007, prepared by The MLN Service Company

263 N. Sam Houston Parkway E.

	1.	 	Roof Condition Report dated August 7, 2007, prepared by Michael Hardin & Associates, Inc.
	 
	2.	 	Skin/Skylights report dated August 7, 2007, prepared by Restoration Services, Inc.
	 
	3.	 	Indoor Air Quality report dated August 8, 2007, prepared by Envirotest
	 
	4.	 	ADA-TAS Observations dated August 7, 2007, prepared by Caton Consulting, Inc.
	 
	5.	 	Elevator Survey Information dated August 9, 2007, prepared by ThyssenKrupp Elevator
	 
	6.	 	Electrical Survey dated August 10, 2007, prepared by E3 Electrical Company
	 
	7.	 	HVAC Assessment Survey dated August 10, 2007, prepared by The MLN Service Company

Schedule 4.6

 

 

SCHEDULE 5.3

LANDLORD’S REPAIRS

16666 NORTHCHASE DRIVE

Roof

	 	•	 	Repair open seam lap near north roof drain.
	 
	 	•	 	Replace glazing sealants in the glass skylight.
	 
	 	•	 	Replace pitch pan at one tie back penetration.
	 
	 	•	 	Clean and install new pourable sealant at water pipe pitch pan.
	 
	 	•	 	Install roof protection pad and splash pan at a penthouse roof downspout discharge.

Skin/Skylights

	 	•	 	Replace neoprene wedges at ground level gasket.

ADA-TAS Code Compliance (if required by a Government Authority whether before or after March 1,
2008)

	 	•	 	Comply with TAS 4.3.2 – There is no accessible route of travel from the sidewalk at the
street to the building.
	 
	 	•	 	Comply with TAS 4.14.2 – The north entrance of the building is not accessible to the
handicapped. This entrance appears to be the primary entrance for individuals that are not
employees (the public). A sign directs handicapped individuals the use the entrance in
back. The accessible entrance at the back of the building is through the parking garage or
through the loading area. There are no handicap parking stalls at the north entrance, so
it may be acceptable for the entrance to be from the garage. It is not acceptable for the
accessible entrance to be through the loading area.
	 
	 	•	 	Comply with TAS 4.9.4(2) – The handrails do not have level extensions at the bottom of
the exterior or interior stairs. The handrails are required to extend the distance of one
tread (sloped) plus 12 inches (level). This does not apply to the handrails typically
found in the center (or “in” side) of multi-story exit stairs, but does apply to ALL
continuous handrails typically found on the wall (or “out” side) side of ANY stair.
	 
	 	•	 	Comply with TAS 4.13.6 – The entrance door to training Room A does not have 18” clear on
the strike side of the jamb.
	 
	 	•	 	TAS 4.1.3(8)(a)(ii) – Exit Stairs A exits through the building lobby. Stair B exits
directly to the exterior, but there is no ramp at that exit. Thus, there is only one
accessible exit (the ramp located at the entrance from the garage) but two are required.

Schedule 5.3 — Page 1

 

 

Elevators

	 	•	 	Perform all repairs and punch list items on the Barbre Consulting, Inc report dated July
10, 2007.
	 
	 	•	 	Perform work necessary to achieve Satisfactory rating of all categories of operation
listed on the Barbre Consulting, Inc report dated July 10, 2007.
	 
	 	•	 	Perform work necessary to cause the Measured Performance of all cars to comply with
Industry Standards as listed on the Barbre Consulting, Inc report dated July 10, 2007.
	 
	 	•	 	Replace old ropes on car 2.

Electrical

	 	•	 	On the section of buss duct that is running from the power company transformer to the
tap box, remove the buss duct covers, remove the rust, paint the covers, check and clean
the buss bars and reinstall the covers using new bolts. Install a new sheet metal cover
with sides over the buss duct for additional protection. Inspect the buss duct every 6
months for signs of rust.
	 
	 	•	 	Interior Equipment

	 	o	 	Main switch needs to be cleaned.
	 
	 	o	 	Tighten and torque wire connections.
	 
	 	o	 	Test ground fault switch.

	 	•	 	Resolve code issue with 800 amp disconnect feeding a bank of capacitors.

HVAC

	 	•	 	Inspect and repair all A/C units to fully Operational Condition
	 
	 	•	 	Third party mutually agreeable to Landlord and Tenant certify the reliability of the
centrifugal chillers once all repairs are completed.

263 N. SAM HOUSTON PARKWAY E.

Skin/Skylights

	 	•	 	Seal around the scuppers and seal laps in metal coping.
	 
	 	•	 	Re-caulk the brick control joints and steel shelf angles.
	 
	 	•	 	Re-caulk leaks on the skylights in the middle roof

ADA-TAS Code Compliance (if required by a Government Authority whether before or after March 1,
2008)

	 	•	 	Comply with TAS 4.3.2 – There is no accessible route of travel from the sidewalk at the
street to the building.
	 
	 	•	 	Comply with TAS 4.6.4 – The stalls on the South and East of the building do not have the
Van-accessible sign.
	 
	 	•	 	Comply with TAS 4.6.3 and TAS 4.3.2 (5) – A stall on the North side of the building
closest the Northeast entrance is marked as being handicap parking stall. There is no curb
ramp specifically for this stall, so the person is required to wheel or walk in the traffic
lane to be able to get to the accessible route of travel. Simply removing the sign may
resolve this issue.

Schedule 5.3 — Page 2

 

 

Elevators

	 	•	 	Perform all repairs and punch list items on the Barbre Consulting Inc report dated July
9, 2007.
	 
	 	•	 	Perform work necessary to achieve Satisfactory rating of all categories of operation
listed on the Barbre Consulting Inc report dated July 9, 2007.
	 
	 	•	 	Perform work necessary to cause the Measured Performance of all cars to comply with
Industry Standards as listed on the Barbre Consulting Inc report dated July 9, 2007.

Electrical

	 	•	 	First floor electrical /switch room

	 	o	 	Main switch needs to be cleaned.
	 
	 	o	 	Tighten and torque wire connections.
	 
	 	o	 	Test ground fault switch.

	 	•	 	First floor electrical room next to Northchase St. entrance

	 	o	 	Replace Federal Pacific with new.

HVAC

	 	•	 	Inspect and repair all A/C units to fully Operational Condition

Schedule 5.3 — Page 3exv4w1

 

Exhibit 4.1

 

 

PEOPLESUPPORT, INC.

Shareholder Rights Plan

 

SHAREHOLDER RIGHTS AGREEMENT,

by and between

PeopleSupport, Inc., a Delaware corporation,

and

Computershare Trust Company, N.A., as Rights Agent

 

AUGUST 28, 2007

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 1.	 	Definitions
	 	 	1	 
	Section 2.	 	Appointment of Rights Agent
	 	 	6	 
	Section 3.	 	Issuance of Right Certificates
	 	 	6	 
	Section 4.	 	Form of Right Certificates
	 	 	8	 
	Section 5.	 	Countersignature and Registration
	 	 	9	 
	Section 6.	 	Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates
	 	 	9	 
	Section 7.	 	Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	10	 
	Section 8.	 	Cancellation and Destruction of Right Certificates
	 	 	12	 
	Section 9.	 	Availability of Preferred Shares
	 	 	12	 
	Section 10.	 	Record Date for Securities Issued Upon Exercise
	 	 	13	 
	Section 11.	 	Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights
	 	 	14	 
	Section 12.	 	Certificate of Adjusted Purchase Price or Number of Shares
	 	 	19	 
	Section 13.	 	Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	20	 
	Section 14.	 	Fractional Rights and Fractional Shares
	 	 	20	 
	Section 15.	 	Rights of Action
	 	 	21	 
	Section 16.	 	Agreement of Right Holders
	 	 	21	 
	Section 17.	 	Right Certificate Holder Not Deemed a Stockholder
	 	 	22	 
	Section 18.	 	Concerning the Rights Agent
	 	 	22	 
	Section 19.	 	Merger or Consolidation or Change of Name of Rights Agent
	 	 	23	 
	Section 20.	 	Duties of Rights Agent
	 	 	23	 
	Section 21.	 	Change of Rights Agent
	 	 	25	 
	Section 22.	 	Issuance of New Right Certificates
	 	 	26	 
	Section 23.	 	Redemption and Termination
	 	 	26	 
	Section 24.	 	Exchange
	 	 	27	 
	Section 25.	 	Notice of Certain Events
	 	 	28	 
	Section 26.	 	Notices
	 	 	29	 
	Section 27.	 	Supplements and Amendments
	 	 	29	 
	Section 28.	 	Determination and Actions by the Board of Directors, Etc.
	 	 	30	 
	Section 29.	 	Successors
	 	 	30	 
	Section 30.	 	Benefits of this Agreement
	 	 	30	 
	Section 31.	 	Severability
	 	 	30	 
	Section 32.	 	Governing Law
	 	 	31	 
	Section 33.	 	Counterparts
	 	 	31	 
	Section 34.	 	Construction
	 	 	31	 
	 	 	 
	 	 	 	 
	EXHIBIT A	 	Form of Certificate of Designations
	 	 	 	 
	EXHIBIT B	 	Form of Right Certificate
	 	 	 	 
	EXHIBIT C	 	Summary of Rights to Purchase Preferred Shares
	 	 	 	 

-i- 

 

SHAREHOLDER RIGHTS AGREEMENT

     THIS SHAREHOLDER RIGHTS AGREEMENT, made and entered into as of August 28, 2007, is by and
between PeopleSupport, Inc., a Delaware corporation (together with its successors hereunder, the
“Corporation”), and Computershare Trust Company, N.A., as rights agent (together with its permitted
successors in such capacity, the “Rights Agent”).

R E C I T A L S

     WHEREAS, the Board of Directors of the Corporation (the “Board”) has authorized and declared a
dividend distribution of a certain preferred share purchase right (a “Right”) for each Common Share
(as hereinafter defined) of the Corporation outstanding at the Close of Business on September 7,
2007 (the “Record Date”), such dividend distribution to occur at the Close of Business on the
Record Date;

     WHEREAS, the Board has authorized and directed the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions hereof) with respect to each Common Share that
shall become outstanding (whether originally issued or delivered from the Corporation’s treasury)
between the Record Date and the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date (as such terms are hereinafter defined); and

     WHEREAS, the Board has determined that each Right represents the right to purchase
one—hundredth of a Preferred Share (as hereinafter defined), upon the terms and subject to the
conditions herein set forth.

A G R E E M E N T

     NOW, THEREFORE, in consideration of the foregoing premises and the representations,
warranties, covenants and agreements set forth herein, and other good and valuable consideration,
the receipt and sufficiency are hereby expressly acknowledged, the parties hereto and the holders
from time to time of Rights, intending to be legally bound, hereby agree as follows:

          Section 1. Definitions. Unless otherwise expressly provided herein, the following terms,
whenever used in this Agreement, shall have the meanings ascribed to them below or in the
referenced sections of this Agreement:

               (a) “Acquiring Person” shall mean any Person (other than an Exempt Person) who or which,
together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of the
Trigger Percentage or more of the Common Shares then outstanding. Notwithstanding the foregoing,
no Person shall become an “Acquiring Person” as the result of an acquisition of Common Shares by
the Corporation which, by reducing the number of Common Shares outstanding, increases the
proportionate number of Common Shares beneficially owned by such Person to the Trigger Percentage
or more of the Common Shares then outstanding; provided, however, that, if a Person shall become
the Beneficial Owner of the Trigger Percentage or more of the Common Shares then outstanding by
reason of share purchases by the Corporation and shall, after such share purchases by the
Corporation, become the Beneficial Owner of any additional Common Shares, then such Person shall be
deemed to be an “Acquiring Person”. Notwithstanding
the foregoing, no Person who on the date hereof is the Beneficial
Owner of the Trigger Percentage or more of the Common Shares
currently outstanding shall be deemed to be an “Acquiring
Person,” unless and until such Person becomes the Beneficial
Owner of any additional Common Shares after the date hereof. Notwithstanding the foregoing, if the Board determines in good
faith that a Person who would otherwise be an Acquiring Person (but for the operation of this
sentence) as defined pursuant to the foregoing provisions of this Section 1(a), has become such
inadvertently, and such Person divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an Acquiring Person, as defined pursuant to the
foregoing provisions of this Section 1(a), then such Person shall not be, and shall be deemed never to have been, an Acquiring Person for any
purposes of this

-1-

 

Agreement. Notwithstanding the foregoing, a Person who (A) within eight calendar
days after such Person would otherwise have become an Acquiring Person (but for the operation of
this sentence) notifies the Board in writing that such Person or its Associates or Affiliates
acquired Beneficial Ownership of the acquired Common Shares without any intention of changing or
influencing control of the Corporation, (B) the Board determines within ten days in good faith that
such acquisition was inadvertent (including because such Person was unaware that it had obtained
Beneficial Ownership of the Trigger Percentage or more of the Common Shares then outstanding, or
the consequences thereof under this Agreement) and that such Person does not intend to change or
influence control of the Corporation, and (C) as promptly as reasonably practicable after so
notifying the Board, and in any event within fifteen calendar days (or such longer period as
determined by the Board in good faith to be reasonably necessary to facilitate an orderly
divestment), such Person divests itself of sufficient Common Shares so that such Person is no
longer is the Beneficial Owner of the Trigger Percentage or more of the Common Shares then
outstanding, shall be deemed for all purposes hereof never to have been an Acquiring Person as a
result of such acquisition (and except as provided in this sentence any Person who becomes an
Acquiring Person shall forever remain an Acquiring Person for all purposes hereof).

               (b) “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General
Rules and Regulations promulgated under the Exchange Act as in effect on the date of this
Agreement.

               (c) “Agreement” shall mean this Shareholder Rights Agreement, as amended, supplemented,
restated or otherwise modified from time to time.

               (d) “Arrangement” shall mean any oral or written agreement, plan, arrangement or
understanding.

               (e) “Articles” shall mean the Corporation’s Amended and Restated Certificate of Incorporation,
as the same may be amended, restated, supplemented, corrected or otherwise modified and in effect
from time to time.

               (f) “Associate” shall have the meaning ascribed to such term in Rule 12b-2 of the General
Rules and Regulations promulgated under the Exchange Act as in effect on the date of this
Agreement.

               (g) “Available Common Shares” shall mean the total Common Shares authorized by the Articles,
less the Common Shares (i) issued and outstanding, or (ii) reserved for issuance for purposes other
than upon exercise of the Rights.

               (h) A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “Beneficially
Own” and have “Beneficial Ownership” of any securities:

               (i) which such Person or any of such Person’s Affiliates or Associates beneficially
owns, directly or indirectly;

               (ii) which such Person or any of such Person’s Affiliates or Associates has, directly
or indirectly,

               (A) the right to acquire beneficial ownership of (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
Arrangement (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of securities
until the

-2-

 

expiration of forty calendar days after the date of acquisition of such
securities), or upon the exercise of conversion, exchange or other rights (other
than the Rights), warrants or options, or otherwise; provided, however, that a
Person shall not be deemed to beneficially own securities (x) tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are accepted for purchase or
exchange, (y) issuable upon the exercise of Rights from at any time prior to the
occurrence of a Triggering Event, or (z) issuable upon the exercise of Rights from
and after the occurrence of a Triggering Event which Rights were acquired by such
Person or any of such Person’s Affiliates or Associates prior to the Distribution
Date or pursuant to Section 22(b) or pursuant to Section 11(a) in connection with
an adjustment made with respect to any Rights described in this clause (z); or

          (B) the right to vote or dispose of, or has “beneficial ownership” of (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations promulgated
under the Exchange Act as in effect on the date of this Agreement), including
pursuant to any Arrangement; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to Beneficially Own, any security if the Arrangement to
vote such security (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and regulations promulgated under the
Exchange Act, and (2) is not also then reportable on Schedule 13D under the Exchange
Act (or any comparable or successor report); or

               (iii) which are beneficially owned, directly or indirectly, by any other Person with
which such Person or any of such Person’s Affiliates or Associates has any Arrangement
(other than customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities until the expiration of forty
calendar days after the date of acquisition of such securities) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy or consent described in
clause (1) of the proviso to Section 1(h)(ii)(B)) or disposing of such securities of the
Corporation (with a joint filing of a Schedule 13D under the Exchange Act, or any comparable
or successor report, being conclusive evidence of the existence of such an Arrangement).

          Notwithstanding anything in this Section 1(h) to the contrary, the phrase “then outstanding,”
when used with reference to a Person’s Beneficial Ownership of securities of the Corporation, shall
mean the number of such securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such Person would be deemed to
Beneficially Own hereunder.

          (i) “Board” shall have the meaning set forth in the recitals hereto.

          (j) “Business Day” shall mean a day other than a Saturday, a Sunday or a day on which banking
institutions located in the State of California are authorized or obligated by law or executive
order to close.

          (k) “Close of Business” shall mean (i) with respect to any Business Day, 5:00 P.M., California
time, on such day, or (ii) otherwise, 5:00 P.M., California time, on the next succeeding Business
Day.

-3-

 

               (l) “Common Shares” shall mean (i) with respect to the Corporation (for so long as it is a
corporation), the voting shares of common stock, par value $0.001 per share of the Corporation or,
in the event of a split, subdivision, combination, consolidation or reclassification with respect
to such shares of common stock, the shares of common stock resulting from such split, subdivision,
combination, consolidation or reclassification, and (ii) with respect to any other Person, the
capital stock, equity securities or other equity interests, as applicable, with the greatest voting
power in, or having the greatest power or right to control or direct the management, as applicable,
of such Person or, if such other Person is a Subsidiary of another Person, the Person or Persons
which ultimately control such first-mentioned Person. Unless the context requires otherwise, any
reference to Common Shares shall be deemed to be a reference to the Common Shares of the
Corporation.

               (m) “Corporation” shall, subject to Section 13, have the meaning set forth in the preamble
hereto.

               (n) “Current Market Price” shall mean, with respect to any Security, the current market price
thereof determined in accordance with Section 11(d).

               (o) “Distribution Date” shall mean the Close of Business on the tenth Business Day (or such
later date as may be determined by action of the Board prior to such time as any Person becomes an
Acquiring Person) after the earlier to occur of (i) the Shares Acquisition Date, and (ii) the date
of the commencement by any Person (other than an Exempt Person) of, or of the first public
announcement or disclosure of the intention of any Person (other than an Exempt Person) to commence
(which intention to commence remains in effect for five Business Days after such announcement), a
tender or exchange offer (other than a Permitted Offer) the consummation of which would result in
any Person becoming an Acquiring Person (including, in the case of both clause (i) and (ii) next
preceding, any such date which is after the date of this Agreement and prior to the Record Date);
provided, however, that if a tender or exchange offer is terminated prior to the occurrence of a
Distribution Date, then no Distribution Date shall occur as a result of such tender or exchange
offer.

               (p) “Equivalent Preferred Shares” shall have the meaning set forth in Section 11(b).

               (q) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and as in effect
on the date hereof.

               (r) “Exchange Ratio” shall have the meaning set forth in Section 24(a).

               (s) “Exempt Person” shall mean (i) the Corporation, (ii) any Subsidiary of the Corporation,
(iii) any employee benefit plan (as defined in Rule 405 promulgated under the Securities Act) of
the Corporation or of any Subsidiary of the Corporation, or (iv) any Person holding Common Shares
for or pursuant to the terms of any plan described in clause (iii).

               (t) “Final Expiration Date” shall mean August 27, 2017.

               (u) “Initial Purchase Price” shall mean $65.00.

               (v) “Interested Person” shall mean (i) any Acquiring Person, (ii) any Affiliate or Associate
of any Acquiring Person, (iii) any other Person in which any Interested Person described in clause
(i) or (ii) has a direct or indirect interest, or (iv) any other Person acting directly or
indirectly on behalf of or in concert with any Interested Person described in clause (i), (ii) or
(iii).

-4-

 

               (w) “Issuable Securities” shall mean (i) before a Triggering Event, Preferred Shares, and (ii)
thereafter, Preferred Shares, Preferred Stock Equivalents or other debt or equity securities or
equivalents of the Corporation for which a Right may be exercised.

               (x) “Issuable Shares” shall mean (i) before a Triggering Event, Preferred Shares, and (ii)
thereafter, Preferred Shares, Preferred Stock Equivalents or other shares of capital stock of the
Corporation for which a Right may be exercised.

               (y) “Nasdaq” shall mean the NASDAQ Stock Market, LLC.

               (z) “Permitted Acquisition” shall mean the acquisition of Common Shares (i) directly from the
Corporation, including by way of a dividend or distribution paid or made by the Corporation on the
Common Shares or Preferred Shares or pursuant to a split, subdivision or reclassification of the
Common Shares, or (ii) pursuant to a Permitted Offer.

               (aa) “Permitted Offer” shall mean a tender or exchange offer which is for all outstanding
Common Shares at a price and on terms determined, prior to the purchase of shares under such tender
or exchange offer, by at least a majority of the members of the Board who are not officers of the
Corporation and who are not Interested Persons or nominees, agents or representatives of an
Interested Person, to be adequate (taking into account all factors that such directors deem
relevant, including prices that could reasonably be achieved if the Corporation or its assets were
sold on an orderly basis designed to realize maximum value) and otherwise in the best interests of
the Corporation and its shareholders (other than the Person or any Affiliate or Associate thereof
on whose basis the offer is being made) taking into account all factors that such directors may
deem relevant.

               (bb) “Person” shall mean any individual, firm, corporation, limited liability company, general
or limited partnership, company, firm, business trust, association, joint venture, bank, trust or
other legally recognized entity, whether domestic or foreign, and shall include any successor (by
merger or otherwise) of such Person.

               (cc) “Preferred Shares” shall mean shares of Series A Junior Participating Preferred Stock,
par value $0.001 per share of the Corporation having the rights and preferences set forth in the
Form of Certificate of Designations attached to this Agreement as Exhibit A.

               (dd) “Purchase Price” shall have the meaning set forth in Section 4.

               (ee) “Record Date” shall have the meaning set forth in the recitals hereto.

               (ff) “Redemption Date” shall have the meaning set forth in Section 7(a).

               (gg) “Redemption Price” shall mean of $0.001 per Right, as such amount may be appropriately
adjusted to reflect any Common Share dividend or any split, subdivision, combination, consolidation
or reclassification of Common Shares after the date hereof.

               (hh) “Right” shall have the meaning set forth in the recitals hereto.

               (ii) “Right Certificate” shall have the meaning set forth in Section 3(a).

               (jj) “Rights Agent” shall have the meaning set forth in the preamble hereto.

               (kk) “Section 11(a)(ii) Event” shall have the meaning set forth in Section 11(a)(ii).

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               (ll) “Section 13 Event” shall mean any event specified in clause (x), (y) or (z) of Section
13.

               (mm) “Securities Act” shall mean the Securities Act of 1933, as amended and as in effect on
the date hereof.

               (nn) “Security” shall have the meaning set forth in Section 11(d)(i).

               (oo) “Shares Acquisition Date” shall mean the first date of public announcement or disclosure
(which, for purposes of this definition, shall include a report filed pursuant to Section 13(d) of
the Exchange Act) by the Corporation or an Acquiring Person that a Person has become an Acquiring
Person ; provided, however, that if such Person is determined not to have become an Acquiring
Person pursuant to the last sentence of Section 1(a), any Shares Acquisition Date resulting
therefrom (but for the operation of this proviso) shall be deemed not to have occurred.

               (pp) “Subsidiary” shall mean, with respect to any Person, any corporation or other Person of
which a majority of the Common Shares is owned or controlled, directly or indirectly, by such first
referenced Person, or which is otherwise controlled by such first referenced Person.

               (qq) “Summary of Rights” shall have the meaning set forth in Section 3(b).

               (rr) “then outstanding”, when used with reference to a Person’s Beneficial Ownership of
securities of the Corporation, shall have the meaning set forth in Section 1(a).

               (ss) “Trading Day” shall mean a day on which the principal national securities exchange on
which the Security is listed or admitted to trading is open for the transaction of business, or, if
the Security is not listed or admitted to trading on any national securities exchange, a Business
Day.

               (tt) “Trigger
Percentage” shall mean 10%.

               (uu) “Triggering Event” shall mean a Section 11(a)(ii) Event or a Section 13 Event

          Section 2. Appointment of Rights Agent. The Corporation hereby appoints the Rights Agent
to act as agent for the Corporation and the holders of the Rights (who, in accordance with Section
3, shall, prior to the Distribution Date, also be the holders of the Common Shares) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Corporation may from time to time appoint such co-Rights Agents as it may deem necessary or
desirable.

          Section 3. Issuance of Right Certificates.

               (a) Until the Distribution Date, (x) the Rights will be evidenced (subject to the provisions
of Section 3(b)) by the certificates evidencing Common Shares (or, in the case of uncertificated
Common Shares, by the book-entry account that evidences record ownership of such Common Shares)
registered in the names of the holders thereof (which certificates, if any, shall, until the
Distribution Date, also be deemed to be Right Certificates) and not by separate certificates, and
(y) the Rights shall be transferable only in connection with the transfer of, and shall
automatically be transferred with, the underlying Common Shares (including in the case of a
transfer to the Corporation). As soon as practicable after a Distribution Date, the Corporation shall prepare and execute, the Rights
Agent shall countersign, and the Corporation shall send or cause to be sent (and the Rights Agent
shall, if requested, send) by first-class, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address of such holder shown on
the records of the Corporation,

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one or more “Right Certificates” in substantially the form of
Exhibit B (each, a “Right Certificate”), evidencing one Right (subject to adjustment as provided
herein) for each Common Share so held. As of and after the Distribution Date, the Rights shall be
evidenced solely by such Right Certificates. The Company shall promptly notify the Rights Agent in
writing upon the occurrence of the Distribution Date and, if such notification is given orally, the
Company shall confirm same in writing on or prior to the Business Day next following. Until such
notice is received by the Rights Agent, the Rights Agent may presume conclusively for all purposes
that the Distribution Date has not occurred.

               (b) As promptly as practicable following the Record Date, the Corporation shall send or cause
to be sent a copy of a “Summary of Rights to Purchase Common Shares”, in substantially the form of
Exhibit B (the “Summary of Rights”), by first-class, postage-prepaid mail, to each record holder of
Common Shares (other than any Acquiring Person or any of its Associates and Affiliates) as of the
Close of Business on the Record Date, at the address of such holder shown on the records of the
Corporation. With respect to certificates representing Common Shares outstanding as of the Record
Date, until the Distribution Date, the Rights will be represented by such certificates registered
in the names of the holders thereof together with a copy of the Summary of Rights and the
registered holders of the Common Shares shall also be the registered holders of the associated
Rights. With respect to uncertificated Common Shares of the Company outstanding as of the Record
Date, until the Distribution Date, the Rights will be evidenced by the book-entry account that
evidences record ownership of such Common Shares in the names of the holders thereof together with
a copy of the Summary of Rights maintained by the Company. Until the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration Date), the transfer of any certificate (or,
in the case of uncertificated Common Shares, a transfer recorded in the book-entry accounts that
evidence record ownership of such Common Shares) representing Common Shares outstanding on the
Record Date, with or without a copy of the Summary of Rights, shall also constitute the transfer of
the Rights associated with such Common Shares.

               (c) Rights shall be issued in respect of all Common Shares that are issued (whether originally
or from the Corporation’s treasury, including reacquired Common Shares referred to in the last
sentence of Section 3(d)) (i) after the Record Date but prior to the earlier of the Distribution
Date, the Redemption Date and the Final Expiration Date, and (ii) after the Distribution Date, as
provided in Section 22(b).

               (d) Until the earlier of the Redemption Date and the Final Expiration Date, certificates
representing Common Shares which are also deemed to be certificates representing Rights pursuant to
Section 3(a) shall, commencing as soon as reasonably practicable after the date hereof, bear the
following legend:

This certificate also represents and entitles the holder hereof to
certain rights (the “Rights”) as set forth in that certain
Shareholder Rights Agreement, made and entered into as of August 28,
2007 (as amended, supplemented or otherwise modified from time to
time, the “Rights Agreement”), by and between PeopleSupport, Inc., a
Delaware corporation (the “Corporation”), and Computershare Trust
Company, N.A., as Rights Agent (together with its successors in such
capacity, the “Rights Agent”), the terms of which, as in effect from
time to time, are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of the
Corporation. Under certain circumstances, as set forth in the Rights Agreement, the Rights may
be redeemed, or will be represented by separate certificates and
will no longer be represented by this certificate. The Corporation
will mail to the holder of this certificate a copy of the Rights
Agreement, as in effect

-7-

 

on the date of its mailing, without charge
after receipt of a written request therefor.

Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any holder who is, was or becomes an
Acquiring Person or an Affiliate or Associate thereof (as each of
such terms is defined in the Rights Agreement) and certain related
persons, whether currently held by or on behalf of such holder or by
any subsequent holder, will become null and void. The Rights shall
not be exercisable by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the
exercise by such holder, of the Rights in such jurisdiction shall
not have been obtained or be obtainable.

With respect to such certificates containing the foregoing legends, until the Distribution Date,
the Rights associated with the Common Shares evidenced by such certificates shall be evidenced by
such certificates alone, and the transfer of any Common Shares evidenced by such certificate shall
also constitute the transfer of the Rights associated with such Common Shares. In the event that
the Corporation purchases or acquires any Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Shares shall be deemed cancelled and
retired so that the Corporation shall not be entitled to exercise any Rights associated with the
Common Shares which are no longer outstanding.

     Section 4. Form of Right Certificates.

               (a) The Right Certificates (and the “Form of Election to Purchase” and the “Form of
Assignment”, with associated Certificates, to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the Corporation may deem
appropriate and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any applicable rule or regulation made pursuant
thereto or with any applicable rule or regulation of any stock exchange, trading market or
automated quotation system on which the Rights may from time to time be listed, traded or quoted,
or to conform to usage. Subject to the provisions of Section 11 and Section 22, the Right
Certificates shall initially entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth therein at the price per one
one-hundredths of a Preferred Share set forth therein (such price per share, as adjusted from time
to time as provided herein, the “Purchase Price”), but the number of such one one-hundredths of a
Preferred Share and the Purchase Price shall be subject to adjustment as provided herein.

               (b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22 which evidences
Rights which are null and void pursuant to Section 7(f) or Section 23 and any Rights Certificate
issued pursuant to Section 6 or Section 11 upon transfer, exchange, replacement or adjustment of
any other Rights Certificate referred to in this sentence, shall contain (to the extent feasible)
the following legend:

The Rights represented by this Rights Certificate are or were
Beneficially Owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement).

-8-

 

Accordingly, this Rights
Certificate and the Rights otherwise evidenced hereby are null and
void. 

The terms and provisions of Section 7(f) shall have full force and effect irrespective of whether
the foregoing legend is contained on any such Rights Certificate.

          Section 5. Countersignature and Registration. The Right Certificates shall be executed on
behalf of the Corporation by its Chairman of the Board, its Chief Executive Officer, its President,
any of its Vice Presidents or its Treasurer, either manually or by facsimile signature, shall have
affixed thereto the Corporation’s seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Corporation, either manually or by facsimile signature.
The Right Certificates shall be manually countersigned by the Rights Agent and shall not be valid
for any purpose unless countersigned. In case any officer of the Corporation who shall have signed
any of the Right Certificates shall cease to be such officer of the Corporation before
countersignature by the Rights Agent and issuance and delivery by the Corporation, such Right
Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by
the Corporation with the same force and effect as though the individual who signed such Right
Certificates had not ceased to be such officer of the Corporation; and any Right Certificate may be
signed on behalf of the Corporation by any individual who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Corporation to sign such Right
Certificate, although at the date of the execution of this Agreement any such individual was not
such an officer.

     Following the Distribution Date and upon the receipt of necessary information, the Rights
Agent shall keep or cause to be kept, at its office designated for such purposes, books or
electronic records for registration and transfer of the Right Certificates issued hereunder. Such
books or electronic records shall show the names and addresses of the respective holders of the
Right Certificates, the certificate number and number of Rights evidenced on its face by each of
the Right Certificates and the date of each of the Right Certificates.

          Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates.

               (a) Subject to the provisions of Section 4(b), Section 6(c), Section 7(f), Section 11(a)(ii)
and Section 14, at any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the earlier of the Redemption Date or the Final Expiration Date, and
following receipt in writing by the Rights Agent of notice to that effect, any Right Certificates
(other than Right Certificates representing Rights that have become null and void pursuant to
Section 7(f) or that have been exchanged pursuant to Section 24) may be transferred, split up,
combined or exchanged for one or more other Right Certificates entitling the registered holder to
purchase a like number of one one-hundredths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange one or more Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent designated for such
purpose. Thereupon the Rights Agent shall countersign and deliver to Person entitled thereto one or more Right Certificates, as the case may be, as so
requested. Neither the Rights Agent nor the Corporation shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have duly and properly completed and duly executed the “Form of Assignment”
and related certificate set forth on the reverse side of such Right Certificates and shall have
provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Corporation or the Rights Agent shall reasonably
request. Thereupon the Rights Agent shall, subject to Section 4(b),

-9-

 

Section 6(c), Section 7(f),
Section 11(a)(ii) and Section 14, countersign and deliver to the Person entitled thereto one or
more Right Certificates as so requested. The Corporation may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates. The Rights Agent shall have no duty or
obligation to take any action under this Agreement which requires the payment by a Rights holder of
applicable taxes and governmental charges unless and until the Rights Agent is satisfied that all
such taxes and charges have been paid.

               (b) Upon receipt by the Corporation and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the
Corporation’s or Rights Agent’s request, reimbursement to the Corporation and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation
of the Right Certificate if mutilated, the Corporation will make and deliver a new Right
Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.

               (c) If any Rights Certificate to be issued under this Agreement represents any Rights which
are null and void pursuant to Section 7(f), the Rights Agent shall (i) if all of such Rights are so
null and void, not issue such Rights Certificate, and (ii) otherwise, issue such Rights Certificate
representing only the Rights which are not so null and void.

          Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.

               (a) The registered holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein), in whole or in part, at any time after the Distribution
Date, upon surrender of the Right Certificate, duly and properly completed and with the “Form of
Election To Purchase” and related certificate set forth on the reverse side of such Right
Certificate duly executed, to the Rights Agent at the office of the Rights Agent designated for
such purpose, together with payment of (A) the aggregate Purchase Price for each one one-hundredth
of a Preferred Share as to which the Rights are exercised, and (B) an amount equal to any
applicable taxes or governmental charge required to be paid by the holder of such Rights
Certificate; at or prior to the earliest of (i) the Close of Business on the Final Expiration Date,
(ii) the time at which the Rights are redeemed as provided in Section 23 (the “Redemption Date”),
and (iii) the time at which such Rights are exchanged as provided in Section 24.

               (b) The Purchase Price for each one one-hundredth of a Preferred Share purchasable pursuant to
the exercise of a Right shall initially be the Initial Purchase Price, and shall be subject to
adjustment from time to time as provided in Section 11 or Section 13, and shall be payable in
lawful money of the United States of America in accordance with Section 7(c).

               (c) Upon receipt of a Right Certificate representing exercisable Rights, duly and properly
completed and with the “Form of Election To Purchase” and related certificate set forth on the reverse side thereof duly executed, accompanied by payment by certified check, cashier’s check
or money order payable to the order of the Corporation of (A) the aggregate Purchase Price for each
one one-hundredth of a Preferred Share as to which the Rights are exercised, and (B) an amount
equal to any applicable taxes or governmental charge required to be paid by the holder of such
Rights Certificate; the Rights Agent shall, subject to Section 20(k), thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares certificates evidencing the number of
Preferred Shares to be purchased (and the Corporation hereby irrevocably authorizes any such
transfer agent to comply with all such requests), or (B) if the Corporation, in its sole
discretion, shall have elected to deposit the Preferred Shares issuable upon exercise of the Rights
hereunder into a depositary, requisition from the depositary agent depositary

-10-

 

receipts representing
such number of one one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be deposited by the
transfer agent of the Preferred Shares with such depositary agent) (and the Corporation hereby
directs such transfer agent to comply with such request); (ii) when appropriate, requisition from
the Corporation the amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14; (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated by such holder; and (iv)
when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.

               (d) In the case of an exercise by a holder of the rights provided by Section 11(a)(ii), the
Rights Agent shall return such Rights Certificate to the registered holder thereof after
imprinting, stamping or otherwise indicating thereon that the rights evidenced by such Rights
Certificate no longer include the rights provided by Section 11(a)(ii), and if less than all the
Rights evidenced by such Rights Certificate were so exercised, the Rights Agent shall indicate on
the Rights Certificate the number of Rights evidenced thereby which continue to include the rights
provided by Section 11(a)(ii).

               (e) In case the registered holder of any Right Certificate shall exercise less than all the
Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as may be designed by
such holder, or to such holder’s duly authorized assigns, subject to the provisions of Section 14.

               (f) Notwithstanding anything in this Agreement to the contrary, from and after the occurrence
of a Section 11(a)(ii) Event, any Rights that are Beneficially Owned by (i) an Acquiring Person (or
any Affiliate or Associate thereof), (ii) a transferee of any Acquiring Person (or any Affiliate or
Associate thereof) who becomes a transferee after such occurrence, or (iii) a transferee of an
Acquiring Person (or any Affiliate or Associate thereof) who becomes a transferee prior to or
concurrently with such occurrence and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person (or any Affiliate or Associate
thereof) to holders of equity interests in such Acquiring Person (or such Affiliate or Associate
thereof) or to any Person with whom such Acquiring Person (or such Affiliate or Associate thereof)
has any continuing Arrangement regarding the transferred Rights, or (B) a transfer which the Board
has determined is part of an Arrangement which has as a primary purpose or effect the avoidance of
this Section 7(f), and subsequent transferees of such Persons; shall become null and void without
any further action and no holder of such Rights shall have any rights whatsoever with respect to
such Rights under any provision of this Agreement, the Rights Certificate or otherwise. The
Corporation shall use all reasonable efforts to insure that the provisions of Section 4(b), Section
6(c) and this Section 7(f) are complied with, but shall have no liability to any holder of Rights
Certificates or other Person as a result of its failure to make any determinations with respect to
an Acquiring Person or its Affiliates, Associates, transferees or other related Persons. From and
after the occurrence of a Section 11(a)(ii) Event, (A) any Person becomes an Acquiring Person, to
the extent provided in Section 6(c) and the last sentence of this Section 7(f), no Right
Certificate shall be issued pursuant to Section 3 or Section 6 that evidences Rights that are or have become, or upon
issuance would become, void pursuant to the provisions of this Section 7(f), (B) any Right
Certificate delivered to the Rights Agent that in whole or in part evidences Rights that are or
have become void pursuant to the provisions of this Section 7(f) shall be canceled in whole or such
part, and (C) any Right Certificate delivered to the Rights Agent for transfer in whole or in part
to any Person whose Rights would upon issuance be void without further action pursuant to the first
sentence of this Section 7(f) shall be cancelled in whole or such part upon written direction of
the Corporation.

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               (g) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Corporation shall be obligated to undertake any action with respect to a registered holder of
any Right Certificate upon the occurrence of any purported assignment or exercise as set forth in
this Section 7 unless such registered holder shall, in addition to having complied with the
requirements of Section 7(a), have (i) duly and properly completed and executed the certificate
contained in the “Form of Assignment” or “Form of Election to Purchase”, as the case may be, set
forth on the reverse side of the Rights Certificate surrendered for such assignment or exercise, as
the case may be, and (ii) provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Corporation or Rights Agent
shall reasonably request.

          Section 8. Cancellation and Destruction of Right Certificates. All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Corporation or to any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any
of the provisions of this Agreement. The Corporation shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Corporation otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Right Certificates, or such other evidence of cancellation
or destruction as shall be permitted by applicable law, to the Corporation, or shall, at the
written request of the Corporation, destroy such cancelled Right Certificates, and, in such case,
shall deliver a certificate of destruction thereof to the Corporation.

          Section 9. Availability of Preferred Shares

               (a) The Corporation covenants and agrees that it shall reserve and keep available out of its
authorized and unissued Preferred Shares, or any Preferred Shares held in its treasury, the number
of Preferred Shares that will be sufficient to permit the exercise in full of all outstanding
Rights in accordance with Section 7. The Corporation covenants and agrees that, after the
occurrence of a Section 11(a)(ii) Event and until such time as the right to exercise Rights under
Section 11(a)(ii) expires, it shall, to the extent reasonably practicable, reserve and keep
available out of its authorized and unissued Common Shares, or any Common Shares held in its
treasury, a sufficient number of Common Shares (or other securities) that will be sufficient to
permit the exercise in full of all outstanding Rights pursuant to Section 11(a)(ii).

               (b) So long as the Preferred Shares (and, following a Trigger Event, Common Shares and
Issuable Securities) issuable and deliverable upon the exercise of the Rights may be listed,
admitted to trade or quoted on any national securities exchange, trading market or automated
quotation system, the Corporation shall use all reasonable efforts to cause all Preferred Shares
(and, following a Trigger Event, Common Shares and Issuable Securities) reserved for such issuance
to be listed, traded or quoted on such exchange, market or quotation system upon official notice of
issuance upon such exercise.

               (c) The Corporation covenants and agrees that it will take all such action as may be necessary
to ensure that all Preferred Shares (and, following a Trigger Event, Common Shares and Issuable
Securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates
for such Preferred Shares (or, following a Trigger Event, Common Shares and other shares
constituting Issuable Securities), subject to payment of the Purchase Price, be duly and validly
authorized and issued and fully paid and nonassessable shares.

               (d) The Corporation covenants and agrees that, except as set forth in Section 6 and this
Section 9(d), it shall pay when due and payable any and all federal and state transfer taxes and
governmental charges which may be payable in respect of the issuance or delivery of the Right

-12-

 

Certificates or of any Preferred Shares (or, after a Section 11(a)(ii) Event, Common Shares or
Issuable Securities) upon the exercise of Rights. The Corporation shall not, however, be required
to pay any transfer tax or governmental charge which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates
or depositary receipts for the Preferred Shares (or, after a Section 11(a)(ii) Event, Common Shares
or Issuable Securities) in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise, or to issue or to deliver any certificates
or depositary receipts for Preferred Shares (or, after a Section 11(a)(ii) Event, Common Shares or
Issuable Securities) upon the exercise of any Rights until any such tax or charge shall have been
paid (any such tax or charge being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Corporation’s reasonable satisfaction that no
such tax or charge is due.

               (e) If then necessary to permit the issuance of the Common Shares or other securities issuable
upon exercise of the Rights, the Corporation shall use all reasonable efforts to (i) file, as soon
as practicable following the earliest date after the first occurrence of a Trigger Event in which
the consideration to be delivered by the Corporation upon exercise of the Rights has been
determined in accordance with this Agreement, a registration statement under the Securities Act,
and a qualification under any applicable state securities or “blue sky” laws (to the extent
exemptions therefrom are unavailable), with respect to the Common Shares or other securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such registration
statement and any qualifications to become effective as soon as practicable after such filing, and
(iii) cause such registration statement and any qualifications to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act and the rules and
regulations promulgated thereunder) until the date as of which the Rights are no longer exercisable
for such securities. The Corporation will also take such action as may be appropriate under, or to
ensure compliance with, the securities or “blue sky” laws of the various states in connection with
the exercisability of the Rights.

               (f) The Corporation may temporarily suspend, for a period of time not to exceed ninety days
after the date set forth in clause (i) of the first sentence of Section 9(e) (the “Cut-Off Date”),
the exercisability of the Rights in order to prepare and file a registration statement and permit
it to become effective. In addition, if the Corporation shall determine that a registration
statement is required following the Distribution Date, the Corporation may temporarily suspend the
exercisability of the Rights until such time as a registration statement has been declared
effective or the Corporation stops using its reasonable best efforts to have such registration
statement declared effective, but in any event not later than the Cut-Off Date. Upon any
suspension of the exercisability of the Rights referred to in this Section 9(f), the Corporation
shall issue a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the suspension is no longer
in effect. The Corporation shall promptly provide the Rights Agent with copies of such
announcements. Any suspension permitted by this Section 9(f) shall automatically terminate and end
immediately prior to the occurrence of a Section 13 Event. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable for securities (1) to the extent
held by a holder in any jurisdiction where the requisite qualification to the issuance to such holder, or the exercise by such
holder, of the Rights in such jurisdiction shall not have been obtained or be obtainable, (2) the
exercise of the Rights shall not be permitted under applicable law, or (3) a registration statement
covering the Common Shares or other securities for which such Rights shall be exercisable shall not
have been declared effective, unless the holder provides evidence reasonably satisfactory to the
Corporation that an exemption to such registration is available under the Securities Act and
applicable state securities and “blue sky” laws with respect to such holder’s exercise of its
Rights.

          Section 10. Record Date for Securities Issued Upon Exercise. Each Person in whose name any
certificate evidencing Preferred Shares is issued upon the exercise of Rights shall for all

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purposes be deemed to have become the holder of record of the Preferred Shares evidenced thereby
on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and all applicable transfer taxes
and governmental charges) was made; provided, however, that, if the date of such surrender and
payment is a date upon which the applicable transfer books of the Corporation are closed, such
Person shall be deemed to have become the record holder of such securities on, and such certificate
shall be dated, the next succeeding Business Day on which the applicable transfer books of the
Corporation are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a holder of shares for which the Rights shall be
exercisable, including the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings
of the Corporation, except as expressly provided herein.

          Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights.
The Purchase Price, the number of Preferred Shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this Section 11.

               (a) (i) In the event the Corporation shall at any time after the date of this Agreement
(A) declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide
the outstanding Preferred Shares, including by means of a stock split, (C) combine or
consolidate the outstanding Preferred Shares into a smaller number of Preferred Shares,
including by way of a reverse stock split, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such reclassification in connection
with a consolidation or merger in which the Corporation is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and Section 7(g); then the
Purchase Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination, consolidation or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, had such Right been
exercised immediately prior to such time and at a time when the Preferred Shares transfer
books of the Corporation were open, such holder would have received upon such exercise and
would have been entitled to receive by virtue of such dividend, subdivision, combination,
consolidation or reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Corporation issuable upon exercise of one Right. The
adjustment provided for in the next preceding sentence shall be made successively whenever
such a dividend is declared or paid or such a subdivision, combination, consolidation or
reclassification is effected. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii).

               (ii) Subject to Section 24, in the event any Person becomes an Acquiring Person (the
first occurrence of such event, a “Section 11(a)(ii) Event”), each holder of a Right shall
thereafter have a right to receive, upon exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable, in accordance with the terms of this Agreement and in
lieu (in both cases) of Preferred Shares, such number of Common Shares as shall equal the
quotient of (A) the product of the then current Purchase Price times the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable divided by (B) 50%
of the then Current Market Price per Common Share for which a Right is exercisable on the
date of the occurrence of such event. In the event that any Person shall become an
Acquiring Person and the Rights shall then be

-14-

 

outstanding, the Corporation shall not take
any action which would eliminate or diminish the benefits intended to be afforded by the
Rights.

               (iii) In the event that the number of Available Common Shares is insufficient to permit
the exercise in full of the Rights in accordance with Section 11(a)(ii), the Corporation
shall take all such action as may be necessary to authorize additional Common Shares for
issuance upon exercise of the Rights. In the event the Corporation shall, after good faith
effort, be unable to take all such action as may be necessary to authorize such additional
Common Shares, the Corporation shall substitute, for each Common Share that would otherwise
be issuable upon exercise of a Right, a number of Preferred Shares or fraction thereof such
that the current per share market price of one Preferred Share multiplied by such number or
fraction is equal to the current per share market price of one Common Share as of the date
of issuance of such Preferred Shares or fraction thereof.

               (b) In case the Corporation shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Preferred Shares, or shares
having the same rights, privileges and preferences as the Preferred Shares (“Equivalent Preferred
Shares”), or securities convertible into Preferred Shares or Equivalent Preferred Shares at a price
per Preferred Share or Equivalent Preferred Share (or having a conversion price per share, if a
security convertible into Preferred Shares or Equivalent Preferred Shares) less than the Current
Market Price of a Preferred Share on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall equal the sum of (i) the number of
Preferred Shares and Equivalent Preferred Shares outstanding on such record date, plus (ii) the
number of Preferred Shares and Equivalent Preferred Shares underlying securities outstanding on
such record date which are convertible into Preferred Shares or Equivalent Preferred Shares, plus
(iii) the number of Preferred Shares which the aggregate offering price of the total number of
Preferred Shares and Equivalent Preferred Shares so to be offered (or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase at such Current
Market Price, and the denominator of which shall equal the sum of (x) the number of Preferred
Shares and Equivalent Preferred Shares outstanding on such record date, plus (y) the number of
Preferred Shares and Equivalent Preferred Shares underlying securities outstanding on such record
date which are convertible into Preferred Shares or Equivalent Preferred Shares, plus (z) the
number of additional Preferred Shares and Equivalent Preferred Shares to be offered for
subscription or purchase (or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of capital stock of the
Corporation issuable upon exercise of one Right. In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and holders of the Rights. Preferred Shares owned by or held for the account of the
Corporation shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed; and, in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been fixed.

               (c) In case the Corporation shall fix a record date for the making of a dividend or
distribution to all holders of the Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the Corporation is the continuing or surviving
corporation) of evidences of indebtedness, cash (other than a regular quarterly or other periodic
cash dividend out of the earnings or retained earnings of the Corporation), assets (other than a
dividend payable in Preferred

-15-

 

Shares, but including any dividend payable in shares of capital stock
other than Preferred Shares) or subscription rights or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the
numerator of which equals the Current Market Price per Preferred Share on such record date, less
the fair market value (as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and
holders of the Rights) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one Preferred Share, and the
denominator of which equals such Current Market Price; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Corporation to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed; and, in the event that
such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.

               (d) (i) Subject to Section 11(d)(iii), for the purpose of any computation hereunder,
the current market price of any security (a “Security” for the purpose of this Section
11(d)(i)) on any date of determination shall be deemed to be the arithmetic mean of the
daily closing prices per share of such Security for the 30 consecutive Trading Days
immediately preceding but not including such date, provided, however, that, in the event
that the Current Market Price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or distribution on such
Security payable in shares of such Security or securities convertible into such shares
(other than, in the case of the Preferred Shares, the Rights), or (B) any split,
subdivision, consolidation, combination or reclassification of such Security but prior to
the expiration of the requisite 30 Trading Day period, as set forth above, after the
ex-dividend date for such dividend or distribution, or the record date for such split,
subdivision, consolidation, combination or reclassification, then, and in each such case,
the Current Market Price shall be appropriately adjusted to take into account ex-dividend
trading.

               (ii) The closing price of a Security on a given date of determination shall be
determined in the following order of preference (unless the Board reasonably determines that
a different order would yield more accurate results): (i) if such Security is listed or
admitted to trading on a national securities exchange or trading market, the last sale
price, regular way, or, in case no such sale takes place on such date, the arithmetic mean
of the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system for such securities exchange or trading
market, (ii) if such Security is quoted on a national automated quotation system or in the
over-the-counter market, the last quoted price or, if not so quoted, the arithmetic mean of
the high bid and low asked prices, as reported by Nasdaq or such other system then in use, (iii) if one or more professional market-makers is making a
market in such Security on such date, the arithmetic mean of the closing bid and asked
prices as furnished by such a professional market-maker selected by the Board, or (iv)
otherwise, the fair value of the Security at the Close of Business on such date as
determined in good faith by the Board (which determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and holders of the
Rights).

               (iii) For the purpose of any computation hereunder, the Current Market Price of the
Preferred Shares shall be determined in accordance with the method set forth in Section
11(d)(i). If the Preferred Shares are not publicly traded, the Current Market Price of the
Preferred Shares shall be conclusively deemed to be the Current Market Price of the Common
Shares as determined pursuant to Section 11(d)(i) (appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date hereof),
multiplied by one one-hundred. If

-16-

 

neither the Common Shares nor the Preferred Shares are
publicly held or so listed or traded, the Current Market Price of Preferred Shares shall
mean the fair value per share as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent.

               (e) Anything herein to the contrary notwithstanding, no adjustment to the Purchase Price shall
be required unless such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are
not required to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the
nearest one one-millionth of a Preferred Share or one ten-thousandth of any other share or
security, as the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier of (i) three years
from the date of the transaction which requires such adjustment, and (ii) the date of the
expiration of the right to exercise any Rights.

               (f) If, as a result of an adjustment made pursuant to Section 11(a) or Section 13, the holder
of any Right thereafter exercised shall become entitled to receive any shares of capital stock of
the Corporation other than Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred
Shares contained in Section 11(a) through Section 11(c), inclusive, Section 11(g) through Section
11(k), inclusive, Section 11(m) and the provisions of Section 7, Section 9, Section 10, Section 13
and Section 14 with respect to the Preferred Shares shall apply mutatis mutandis to any such other
shares.

               (g) All Rights originally issued by the Corporation subsequent to any adjustment made to the
Purchase Price hereunder shall constitute the right to purchase, at the adjusted Purchase Price,
the number of one one-hundredths of a Preferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.

               (h) Unless the Corporation shall have exercised its election as provided in Section 11(i),
upon each adjustment of the Purchase Price as a result of the calculations made in Section 11(b)
and Section 11(c), each Right outstanding immediately prior to the making of such adjustment shall
thereafter constitute the right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a Preferred Share equal to the quotient of (A) the product of (x) the number of
one one-hundredths of a share covered by a Right immediately prior to this adjustment, times (y)
the Purchase Price in effect immediately prior to such adjustment of the Purchase Price, divided by
(B) the Purchase Price in effect immediately after such adjustment of the Purchase Price.

               (i) The Corporation may elect, on or after the date of any adjustment of the Purchase Price,
to adjust the number of Rights in substitution for any adjustment to the number of one
one-hundredths of a Preferred Share purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment to the number of Rights shall be exercisable for the number of
one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Corporation shall make a public announcement and notify the Rights Agent
of its election to adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights

-17-

 

pursuant to this
Section 11(i), the Corporation shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14, the additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Corporation, shall cause to be distributed to such holders of
record in substitution and replacement for the Right Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Corporation, new Right
Certificates evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed may, at the Corporation’s option, bear an
adjusted Purchase Price, and shall be issued, executed and countersigned in the manner provided for
herein, and shall be registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.

               (j) Irrespective of any adjustment or change to the Purchase Price or to the number of one
one-hundredths of a Preferred Share issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the Purchase Price and the
number of one one-hundredths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.

               (k) Before taking any action that would cause an adjustment reducing the Purchase Price below
one one-hundredth of the then par value, if any, of the Preferred Shares issuable upon exercise of
the Rights, the Corporation shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and legally issue fully paid and
nonassessable Preferred Shares or other securities at such adjusted Purchase Price.

               (l) In any case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Corporation may elect to
defer (in which case the Corporation shall promptly notify the Rights Agent of such deferment)
until the occurrence of such event the issuance to the holder of any Right exercised after such
record date of the Preferred Shares and Issuable Securities, if any, issuable upon such exercise
over and above the Preferred Shares and other capital stock or securities of the Corporation, if
any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Corporation shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder’s right to receive such additional Issuable
Securities upon the occurrence of the event requiring such adjustment.

               (m) Anything in this Section 11 to the contrary notwithstanding, the Corporation shall be
entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that the Board shall in good faith determine to
be advisable in order that any (i) consolidation or subdivision of the Preferred Shares, (ii)
issuance wholly for cash of any Preferred Shares at less than the Current Market Price, (iii)
issuance wholly for cash of any Preferred Shares or debt or equity securities which by their terms
are convertible into or exchangeable for Preferred Shares, (iv) stock dividends on Preferred Shares payable in Preferred Shares, or
(v) issuance of rights, options or warrants referred to in this Section 11(b); hereafter made by
the Corporation to holders of its Preferred Shares shall not be taxable to such shareholders.

               (n) The Corporation covenants and agrees that it shall not, at any time after a Section
11(a)(ii) Event, (i) consolidate with any other Person (other than a Subsidiary of the Corporation
in a transaction which does not violate Section 11(o)), (ii) merge with or into any other Person
(other than a Subsidiary of the Corporation in a transaction which does not violate Section 11(o)),
or (iii) sell or transfer (or permit any of its Subsidiaries to sell or transfer), in one
transaction or a series of related transactions, assets or earning power aggregating 50% or more of
the assets or earning power of the Corporation and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Corporation or any of its Subsidiaries in one transaction or a
series of related transactions each of which, and all of which considered together, does not
violate Section 11(o))), if (x) at the time of or immediately

-18-

 

after such consolidation, merger,
sale or transfer there are any charter or by-law provisions or any rights, warrants or other
instruments or securities outstanding or agreements in effect or other actions taken, which would
materially diminish or otherwise eliminate the benefits intended to be afforded by the Rights
(other than Rights which are null and void pursuant to Section 7(f)), or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the shareholders of
the Person who constitutes, or would constitute, the “Principal Party” for purposes of Section
13(a) shall have received a distribution of Rights previously owned by such Person or any of its
Affiliates and Associates. The Corporation shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Corporation and such other Person shall have executed and
delivered to the Rights Agent a supplemental agreement evidencing compliance with this Section
11(n).

               (o) The Corporation covenants and agrees that, after the earlier of a Shares Acquisition Date
and the Distribution Date, it will not, except as permitted by Section 23, Section 24 or Section
27, take (or permit any of its Subsidiaries to take) any action the purpose of which is, or if at
the time such action is taken it is reasonably foreseeable that the effect of such action would be,
materially to diminish or otherwise eliminate the benefits intended to be afforded by the Rights
(other than Rights which are null and void pursuant to Section 7(f)).

               (p) In the event the Corporation shall, at any time after the date of this Agreement and prior
to the Distribution Date, (A) declare a dividend on the Common Shares payable in Common Shares, (B)
subdivide the outstanding Common Shares, including by means of a stock split, (C) combine or
consolidate the outstanding Common Shares into a smaller number of Common Shares, including by way
of a reverse stock split, or (D) issue any shares of its capital stock in a reclassification of the
Common Shares (including any such reclassification in connection with a consolidation or merger in
which the Corporation is the continuing or surviving corporation), except as otherwise provided in
this Section 11(a) and Section 7(g); then (A) the number of one one-hundredths of a Preferred Share
purchasable after such event upon proper exercise of each Right shall equal the product of (x) the
number of one one-hundredths of a Preferred Share so purchasable immediately prior to such event,
times (y) the quotient of (i) the number of Common Shares outstanding immediately before such
event, divided by (ii) the number of Common Shares outstanding immediately after such event, and
(B) each Common Share outstanding immediately after such event shall have issued with respect to it
that number of Rights which each Common Share outstanding immediately prior to such event had
issued with respect to it; provided, however, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of the shares of capital stock
of the Corporation issuable upon exercise of one Right. The adjustment provided for in the next
preceding sentence shall be made successively whenever such a dividend is declared or paid or such
a subdivision, combination, consolidation or reclassification is effected.

          Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made or any event affecting the Rights or their exercisability (including an event
which causes Rights to become null and void) occurs as provided in Section 11 or Section 13, the
Corporation shall promptly (i) prepare a certificate setting forth such adjustment and a brief
statement of the computations and facts accounting for such adjustment or describing such event, as
the case may be, (ii) file with the Rights Agent and, each transfer agent for the Common Shares or
the Preferred Shares a copy of such certificate, and (iii) if such adjustment occurs at any time
after the Distribution Date, mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25. Notwithstanding the foregoing sentence, the failure of the Corporation
to make such certification or give such notice shall not affect the validity of such adjustment or
the force or effect of the requirement for such adjustment. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment or statement contained therein
and shall have no duty or liability with respect to and shall not

-19-

 

be deemed to have knowledge of
such adjustment or event unless and until it shall have received such certificate.

          Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. In the
event, directly or indirectly, at any time at or following a Section 11(a)(ii) Event, (x) the
Corporation shall consolidate with, or merge with and into, any other Person, (y) any Person shall
consolidate with the Corporation, or merge with and into the Corporation and the Corporation shall
be the continuing or surviving corporation of such merger and, in connection with such merger, all
or part of the Common Shares shall be changed into or exchanged for stock or other securities of
any other Person (or the Corporation) or cash or any other property, or (z) the Corporation shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one or more transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Corporation and its Subsidiaries (taken as a whole) to any other Person other
than the Corporation or one or more of its wholly-owned Subsidiaries; then, and in each such case,
proper provision shall be made so that (i) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise thereof at a price equal to
the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu
of Preferred Shares, such number of Common Shares of such other Person (including the Corporation
as successor thereto or as the surviving corporation) as shall equal the quotient of (A) the
product of (x) the then current Purchase Price, times (y) the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable, divided by (B) 50% of the then Current
Market Price per Common Share of such other Person on the date of consummation of the applicable
Section 13 Event; (ii) the issuer of such Common Shares shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of the Corporation
pursuant to this Agreement; (iii) the term “Corporation” shall thereafter be deemed to refer to
such issuer; and (iv) such issuer shall take such steps (including the reservation of a sufficient
number of its Common Shares in accordance with Section 9) in connection with such consummation as
may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the Common Shares of the Corporation thereafter deliverable upon
the exercise of the Rights. The Corporation shall not consummate any Section 13 Event unless,
prior thereto, the Corporation and such issuer shall have executed and delivered to the Rights
Agent a supplemental agreement so providing. The Corporation shall not enter into any transaction
of the kind referred to in this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or arrangements which, as a
result of the consummation of such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or other transfers.

          Section 14. Fractional Rights and Fractional Shares.

               (a) The Corporation shall not be required to issue fractions of Rights or, except prior to the
Distribution Date as provided in Section 11(i), to distribute Right Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered
holders of the Right Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the Current Market Value per whole Right.

               (b) The Corporation shall not be required to issue fractions of Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share) or units of
Issuable Shares upon exercise of the Rights or to distribute certificates which evidence fractional
Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a
Preferred Share) or fractions of Issuable Shares. Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at the election of the Corporation, be
evidenced by depositary receipts, pursuant to

-20-

 

an appropriate agreement between the Corporation and
a depositary selected by it; provided, that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares represented by such depositary receipts. In
lieu of fractional Preferred Shares that are not integral multiples of one one-hundredth of a
Preferred Share or in lieu of fractional shares or units of Issuable Shares, the Corporation shall
pay to the registered holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the Current Market Value of one Preferred
Share or Issuable Share, as the case may be, for the Trading Day immediately prior to the date of
such exercise; provided that for purposes of this Section 14(b), if any Common Stock Equivalents
are not publicly traded, the Closing Price of such Common Stock Equivalent shall equal the Closing
Price of a Common Share.

               (c) The holder of a Right, by the acceptance of the Right, expressly waives such holder’s
right to receive any fractional Rights or any fractional shares or units upon exercise of a Right
(except as provided above).

               (d) Whenever a payment for fractional Rights or fractional Preferred Shares or fractional
shares or units of Issuable Shares is to be made as provided in this Section 14, the Corporation
shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth in
reasonable detail the facts related to such payment and the prices and formulas utilized in
calculating such payments, and (ii) provide sufficient monies to the Rights Agent in the form of
fully collected funds to make such payments. The Rights Agent shall be fully protected in relying
upon such a certificate and shall have no duty with respect to, and shall not be deemed to have
knowledge of, any payment for fractional Rights or fractional shares or units under this Agreement
relating to the payment of fractional Rights or fractional shares or units unless and until the
Rights Agent shall have received such a certificate and sufficient monies.

          Section 15. Rights of Action. All rights of action in respect of this Agreement, excepting
the rights of action vested in the Rights Agent under Section 18, are vested in the respective
registered holders of the Right Certificates (and, prior to the Distribution Date, the registered
holders of the certificates evidencing the associated Common Shares (the “Common Share Holders”));
and any registered holder of any Right Certificate (or, prior to the Distribution Date, the Common
Shares Holders), without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of any other Common Share Holder), may, in such holder’s own behalf and for such holder’s own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Corporation to enforce, or
otherwise act in respect of, such holder’s right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law for any breach by
the Corporation of this Agreement, and shall be entitled to specific performance of the obligations
by the Corporation under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.

          Section 16. Agreement of Right Holders. Every holder of a Right, by accepting the same,
consents and agrees with the Corporation and the Rights Agent and with every other holder of a
Right that:

               (a) prior to the Distribution Date, the Rights will be transferable only in connection with
the transfer of the Common Shares;

-21-

 

               (b) after the Distribution Date, the Right Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the office of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and with appropriate
forms and certificates properly completed and duly executed;

               (c) subject to Section 6(a) and Section 7(g), the Corporation and the Rights Agent may deem
and treat the Person in whose name a Right Certificate (or, prior to the Distribution Date, a
certificate evidencing the associated Common Shares) is registered as the absolute owner thereof
and of the Rights evidenced thereby, notwithstanding any notations of ownership or writing on the
Right Certificate (or, prior to the Distribution Date, the certificate evidencing the associated
Common Shares) made by anyone other than the Corporation or the Rights Agent, for all purposes
whatsoever, and neither the Corporation nor the Rights Agent, subject to the last sentence of
Section 7(f), shall be affected by any notice to the contrary; and

               (d) notwithstanding anything in this Agreement to the contrary, neither the Corporation nor
the Rights Agent shall have any liability to any holder or Beneficial Owner of a Right, or any
other Person, as a result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a
court of competent jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, that the Corporation shall use its reasonable efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.

          Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any
Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of the Preferred Shares, any Issuable Security or any Substituted Value or any other
securities of the Corporation which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right Certificate be construed
to confer upon the holder or Beneficial Owners of any Right Certificate, as such, any of the rights
of a stockholder of the Corporation or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting stockholders (except
as provided in Section 25), or to receive dividends or other distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.

          Section 18. Concerning the Rights Agent.

               (a) The Corporation agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder, and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The Corporation also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending against any claim
of liability in the premises. The provisions of this Section 18 and of Section 20 shall survive
the exercise or expiration of the Rights, the resignation or removal of the Rights Agent and the
termination of this Agreement.

               (b) The Rights Agent shall be protected and shall incur no liability for, or in respect of any
action taken, suffered or omitted by it in connection with, its administration of this Agreement in

-22-

 

reliance upon any Right Certificate or certificate evidencing the Preferred Shares or Common Shares
or other securities of the Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper
or document believed by it to be genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper Persons, or otherwise upon the advice of counsel as set forth in
Section 20.

          Section 19. Merger or Consolidation or Change of Name of Rights Agent.

               (a) Any Person into which the Rights Agent may be merged or with which it may be consolidated,
or any Person resulting from any merger or consolidation to which the Rights Agent shall be a
party, or any Person succeeding to the stock transfer business of the Rights Agent, shall be the
successor to the Rights Agent under this Agreement (and shall become the Rights Agent for all
purposes hereof) without the execution or filing of any paper or any further act on the part of any
of the parties hereto; provided, that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and, in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right Certificates in the name of
either the predecessor Rights Agent or the successor Rights Agent; and, in all such cases, such
Right Certificates shall have the full force and effect provided in the Right Certificates and in
this Agreement.

               (b) In case at any time the name of the Rights Agent shall be changed and at such time any of
the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Right Certificates so countersigned; and, in
case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior name or in its changed name; and, in
all such cases, such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.

          Section 20. Duties of Rights Agent. The Rights Agent undertakes to perform only the duties
and obligations expressly imposed by this Agreement (and no implied duties or obligations) upon the
following terms and conditions, by all of which the Corporation and the holders of Right
Certificates, by their acceptance thereof, shall be bound:

               (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the
Corporation), and the opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken, suffered or omitted by it in good faith and
in accordance with such opinion.

               (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter (including the identity of any Acquiring Person
and the determination of the Closing Price or Current Market Price any Security) be proved or
established by the Corporation prior to taking, suffering or omitting to take any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the
Treasurer or the Secretary of the Corporation and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken, suffered or
omitted to be taken in good faith by it under the provisions of this Agreement in reliance upon
such certificate.

-23-

 

               (c) The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or
willful misconduct. Anything to the contrary notwithstanding, in no event shall the Rights Agent
be liable for special, punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised
of the likelihood of such loss or damage.

               (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Right Certificates or be required to verify the same
(in each case, except its countersignature thereon), but all such statements and recitals are and
shall be deemed to have been made by the Corporation only.

               (e) The Rights Agent shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the Corporation of any
covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including the Rights becoming void
pursuant to Section 7(f)) or any adjustment required under the provisions of Section 11 or Section
13 or responsible for the manner, method or amount of any such adjustment, or the ascertaining of
the existence of facts that would require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt by the Rights Agent of a
certificate furnished pursuant to Section 12 describing such change or adjustment, upon which the
Rights Agent may rely); nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares or Issuable Securities to
be issued pursuant to this Agreement or any Right Certificate or as to whether any Preferred Shares
or Issuable Securities will, when issued, be duly authorized, validly issued, fully paid and
nonassessable.

               (f) The Corporation agrees that it will perform, execute, acknowledge and deliver or cause to
be performed, executed, acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.

               (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Secretary or the Treasurer of the
Corporation, and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken, suffered or omitted to be taken by it in
good faith in accordance with instructions of any such officer or for any delay in acting while
waiting for those instructions. Any application by the Rights Agent for written instructions from
the Corporation may, at the option of the Rights Agent, set forth in writing any action proposed to
be taken, suffered or omitted to be taken by the Rights Agent under this Agreement and the date on
or after which such action shall be taken or suffered or such omission shall be effective. The
Rights Agent shall not be liable for any action taken or suffered by, or omission of, the Rights
Agent in accordance with a proposal included in any such application on or after the date specified
in such application (which date shall not be less than five Business Days after the date any
officer of the Corporation actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such action (or the effective
date in the case of an omission), the Rights Agent shall have received written instructions in
response to such application reasonably specifying the action to be taken, suffered or omitted.

               (h) The Rights Agent and any shareholder, affiliate, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities of the Corporation or

-24-

 

become financially interested in any transaction in which the Corporation may be interested, or
contract with or lend money to the Corporation, or otherwise act as fully and freely as though it
were not the Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Corporation or for any other Person.

               (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Corporation resulting from any such act,
default, neglect or misconduct, provided, that reasonable care was exercised in the selection and
continued employment thereof.

               (j) No provision of this Agreement shall require the Rights Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not reasonably assured
to it.

               (k) If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate set forth in the “Form of Assignment” or “Form of Election to Purchase”,
as the case may be, has either not been properly completed or executed or indicates an affirmative
response to clause 1 or 2 thereof, the Rights Agent shall not take any further action with respect
to such requested exercise or transfer without first consulting with, and receiving written
direction from, the Corporation.

          Section 21. Change of Rights Agent. The Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days’
notice in writing mailed to the Corporation and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by
first-class mail. The Corporation may remove the Rights Agent upon 30 days’ notice in writing,
mailed to the Rights Agent and to each transfer agent of the Common Shares or Preferred Shares (or,
after a Trigger Event, any applicable transfer agent, indenture trustee or similar agent in respect
of Issuable Securities) by registered or certified mail, and to the holders of the Right
Certificates by first class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Corporation shall appoint a successor to the Rights
Agent. If the Corporation shall fail to make such appointment within a period of 60 days after
giving notice of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by a registered holder of a Right
Certificate (who, for such notice to be effective, must submit its Rights Certificate therewith for
inspection by the Corporation), then the registered holder of any Right Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent. Any Person to
qualify as a successor Rights Agent hereunder, whether appointed by the Corporation or by such a
court, shall (A) (i) be organized and doing business under the laws of the United States or any
State thereof, (ii) be in good standing under the laws of its jurisdiction of incorporation,
formation or organization, (iii) be authorized under such laws to exercise corporate trust or stock
transfer powers and subject to supervision or examination by federal or state authority, and (B)
have, or have an Affiliate which has, at the time of its appointment as Rights Agent a combined
capital and surplus of at least $50 million. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed and shall become the Rights Agent for all
purposes hereof; but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of
any such appointment, the Corporation shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the

-25-

 

Common Shares or Preferred Shares (and, after a Trigger
Event, any applicable transfer agent, indenture trustee or similar agent in respect of Issuable
Securities), and mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

          Section 22. Issuance of New Right Certificates. (a) Notwithstanding any of the provisions
of this Agreement or of the Rights to the contrary, the Corporation may, at its option, issue new
Right Certificates evidencing Rights in such form as may be approved by the Board to reflect any
adjustment or change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement.

               (b) In addition, in connection with the issuance or sale of Common Shares following the
Distribution Date and prior to the earlier of the Redemption Date and the Final Expiration Date,
the Corporation, subject to Section 7(f), (i) shall with respect to Common Shares so issued or sold
pursuant to the exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities (other than the Rights), notes or debentures issued
by the Corporation, and (ii) may, in any other case, if deemed necessary or appropriate by the
Board; issue Rights Certificates evidencing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (A) the Corporation shall not be obligated to issue
any such Rights Certificates if, and to the extent that, the Corporation shall be advised by
counsel that such issuance would create a significant risk of material adverse tax consequences to
the Corporation or the Person to whom such Rights Certificate would be issued, (B) no Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof, and (C)
the Corporation shall not issue any Rights in connection with any Common Shares issued or sold upon
the exercise of any Rights.

          Section 23. Redemption and Termination.

               (a) The Board may, at its option, at any time prior to the occurrence of a Section 11(a)(ii)
Event, redeem all but not less than all the then outstanding Rights at the Redemption Price. The
redemption of the Rights by the Board may be made effective at such time, on such basis and with
such conditions as the Board, in its sole discretion, may establish. The Corporation shall
promptly file a certificate with the Rights Agent setting forth the Board action, including the
relevant terms and conditions, effecting the redemption.

               (b) In any redemption pursuant to this Section 23, the Corporation may, at its option, pay the
Redemption Price in Common Shares (based on the Current Market Price of a Common Share at the time
of redemption and subject to Section 14), cash or other consideration deemed appropriate by the
Board; provided that if the Corporation elects to pay the Redemption Price in Common Shares, the
Corporation shall not be required to issue any fractional Common Shares and the number of Common
Shares issuable to each holder of Rights shall be rounded down to the next whole share.

               (c) Immediately upon the action of the Board ordering the redemption of the Rights pursuant to
Section 23(a), and without any further action and without any notice, the right to exercise the
Rights shall terminate and the only right thereafter of the holders of Rights shall be to receive
the applicable Redemption Price. The Corporation shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any defect in, any such notice shall
not affect the validity of such redemption. Within 10 days after such action of the Board, the
Corporation shall mail a notice of redemption to all the holders of the then outstanding Rights at
their last addresses as they appear upon the

-26-

 

registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common Shares, with a copy
to the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of redemption shall state
the method by which the payment of the Redemption Price will be made. Neither the Corporation nor
any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any
time in any manner other than (i) the manner specifically set forth in this Section 23 or in
Section 24, or (ii) in connection with the purchase of Common Shares prior to the Distribution
Date.

          Section 24. Exchange.

               (a) Subject to the applicable laws, rules and regulations, and subject to Section 24(d), the
Corporation may, at its option, by action of the Board, at any time after the occurrence of a
Section 11(a)(ii) Event but prior to the occurrence of an Exchange Termination Event (as defined
below), exchange all or part of the then outstanding and exercisable Rights (other than Rights
which have become null and void pursuant to Section 7(f)) for Common Shares at an exchange ratio of
one Common Share per Right, as appropriately adjusted to reflect any adjustment in the number of
Rights pursuant to Section 11(i) and to reflect any Common Share dividend or a split, subdivision,
combination, consolidation or reclassification of the Common Shares (such exchange ratio, as so
adjusted, being hereinafter referred to as the “Exchange Ratio”). Such an exchange of the Rights
may be made effective at such time, on such basis and with such conditions as the Board in its sole
discretion may establish. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which are null and
void pursuant to Section 7(f)) held by each holder of Rights. The Corporation shall promptly file
a certificate with the Rights Agent setting forth the Board action, including the relevant terms
and conditions, effecting the redemption. For purposes of this Section 24(a), an “Exchange
Termination Event” shall mean (i) the acquisition by any Acquiring Person, together with all its
Affiliates and Associates, of Beneficial Ownership of 50% or more of the Common Shares then
outstanding, (ii) a Section 13 Event, or (iii) the Final Expiration Date.

               (b) In any exchange pursuant to this Section 24, the Corporation may, at its option,
substitute shares having the same rights, privileges and preferences as the Common Shares
(“Equivalent Common Shares”), including a number of Preferred Shares or fraction thereof such that
the Current Market Price per Preferred Share multiplied by such number or fraction is equal to the
Current Market Price of one Common Share as of the date of issuance of such Preferred Shares or
fraction thereof, for some or all of the Common Shares exchangeable for Rights, at the initial rate
of one Equivalent Common Share for each Common Share, as appropriately adjusted to reflect relative
adjustments in the economic and voting rights of the Equivalent Common Shares pursuant to the terms
thereof, so that the fraction of an Equivalent Common Share delivered in lieu of each Common Share
shall have the same economic and voting rights as one Common Share.

               (c) Immediately upon the date for exchange and satisfaction of other conditions, if any, set
forth (or determined in the manner specified) in the action of the Board effecting the exchange of
any Rights pursuant to Section 24(a), and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares or Equivalent Common Shares, as the case
may be, equal to the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Corporation shall promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the legality or validity of such
exchange. Within ten days after such effective date for exchange, the Corporation promptly shall
mail a notice of any such exchange to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent, with a copy to the Rights
Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of

-27-

 

exchange shall state the method by which
the exchange of the Common Shares for Rights will be effected, and, in the event of any partial
exchange, the number of Rights which will be exchanged.

               (d) In the event that there shall be insufficient Available Common Shares and available
Equivalent Common Shares to permit any exchange of Rights as contemplated in accordance with this
Section 24, the Corporation shall use its reasonable best efforts take all such action as may be
necessary to authorize additional Common Shares or Equivalent Common Shares for issuance upon
exchange of the Rights. In the event the Corporation shall, after good faith effort, be unable to
take all such action as may be necessary to authorize such additional Common Shares, the
Corporation shall substitute, for each Common Share that would otherwise be issuable upon exchange
of a Right, a number of Preferred Shares or fraction thereof such that the Current Market Price per
Preferred Share multiplied by such number or fraction is equal to the Current Market Price of one
Common Share as of the date of issuance of such Preferred Shares or fraction thereof.

               (e) The Corporation shall not be required to issue fractions of Common Shares or Equivalent
Common Shares (other than Preferred Shares) or to distribute certificates which evidence such
fractional shares. In lieu thereof, the Corporation may at its option pay to the registered
holders of the Right Certificates with regard to which such fractional shares would otherwise be
issuable an amount in cash equal to the same fraction of the Current Market Value of such a share
for the Trading Day immediately prior to the date of exchange pursuant to this Section 24.

          Section 25. Notice of Certain Events.

               (a) In case the Corporation shall, at any time after the Distribution Date, propose (i) to pay
any dividend payable in stock of any class to the holders of the Preferred Shares or to make any
other distribution to the holders of the Preferred Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of the Preferred Shares rights or warrants to subscribe for
or to purchase any additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of the Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred Shares), (iv) to
effect any consolidation or merger into or with any Person (other than a Subsidiary of the
Corporation in one transaction or a series of transactions each of which does not violate Section
11(o)), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Corporation and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Corporation or any of its Subsidiaries in one transaction or a series of
transactions each of which does not violate Section 11(o)), (v) to effect the liquidation,
dissolution or winding up of the Corporation, or (vi) to declare or pay any dividend payable in
Common Shares on the Common Shares or to effect a split, subdivision, combination or consolidation
of the Common Shares (by reclassification or otherwise than by payment of dividends in Common
Shares); then, in each such case, the Corporation shall to the extent feasible give to the holders
of the then outstanding Rights at their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares, with a copy to the Rights Agent, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend, or distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of participation therein by
the holders of the Common Shares or Preferred Shares, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or (ii) next preceding at
least 20 days prior to the record date for determining holders of the Preferred Shares for purposes
of such action, and, in the case of any such other action, at least 20 days prior to the date of
the taking of such proposed action or the date of participation therein by the holders of the
Common Shares or Preferred Shares, whichever shall be the earlier.

-28-

 

               (b) In case of the occurrence of a Trigger Event, then (i) the Corporation shall, as soon as
practicable thereafter, give to the Rights Agent and to each holder of a Right Certificate, in
accordance with Section 26, a notice of the occurrence thereof, which notice shall describe such
event and the consequences of such event to holders of Rights under Section 11(a)(ii) or Section
13, as the case may be, and (ii) to the extent appropriate, references in Section 25(a) to
Preferred Shares or Common Shares shall thereafter also be deemed to refer to any other applicable
class of Issuable Shares and other securities of the Corporation and the Principal Party, as the
case may be.

          Section 26. Notices.

               (a) Notices, demands or other communications authorized or required by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to or on the
Corporation shall be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed or, in the case of notices, demands or other communications from the Rights Agent, by
facsimile (effective upon confirmation of receipt), as follows:

PeopleSupport, Inc.

1100 Glendon Avenue, Suite 1250

Los Angeles, CA 90024

Attention: Corporate Counsel

Facsimile No.:(310) 824-6355

               (b) Subject to the provisions of Section 21, any notices, demands or other communications
authorized or required by this Agreement to be given or made by the Corporation or by the holder of
any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, or by reputable overnight courier, addressed or, in the case of
notices, demands or other communications from the Corporation, by facsimile (effective upon
confirmation of receipt), as follows:

Computershare Trust Company, N.A.

350 Indiana Street, Suite 800

Golden CO 80401

Attn: Corporate Actions

Facsimile No.: (303)-262-0609

               (c) Notices, demands or other communications authorized or required by this Agreement to be
given or made by the Corporation or the Rights Agent to the holder of any Right Certificate (or, if
prior to the Distribution Date, to the holder of any certificates representing Common Shares) shall
be sufficiently given or made if sent by first-class mail, postage prepaid, or by reputable
overnight courier, addressed to such holder at the address of such holder as shown on the registry
books of the Rights Agent (or, if prior to the Distribution Date, of the transfer agent of the
Common Shares or the Corporation, as applicable).

               (d) The Corporation may changes its address for notices by notice to the Rights Agent, and the
Rights Agent may changes its address for notices by notice to the Corporation and, after any
Distribution Date, to each holder of any Rights Certificate.

          Section 27. Supplements and Amendments.

               (a) Prior to the Distribution Date, the Corporation may, subject to Section 27(a), supplement
or amend any provision of this Agreement without the approval of any holders of certificates

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representing Common Shares. From and after the Distribution Date, the Corporation may, subject to
Section 27(a), supplement or amend this Agreement without the approval of any holders of Rights
Certificates (i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein, (iii) subject to
the proviso to this sentence, to shorten or lengthen any time period hereunder, or (iv) to change
or supplement the provisions hereunder in any manner which the Corporation may deem necessary or
desirable and which shall not adversely affect the interests of the holders of Rights Certificates
(other than the interests of any Acquiring Persons and their respective Affiliates and Associates);
provided, however, that this Agreement may not be so supplemented or amended to lengthen any time
period pursuant to clause (iii) next preceding unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and the benefits to, the holders of Rights.

               (b) For purposes of this Section 27, prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders of Common Shares.

               (c) If the Corporation delivers a certificate from an appropriate officer of the Corporation
stating that a proposed supplement or amendment is in compliance with Section 27(a), and such
supplement or amendment does not adversely affect the rights or obligations of the Rights Agent
under Section 18 or Section 20, the Rights Agent shall execute such supplement or amendment;
provided that any such amendment or supplement shall become effective immediately upon the
execution thereof by the Corporation, whether or not also executed by the Rights Agent.

          Section 28. Determination and Actions by the Board of Directors, Etc. The Board shall have
the exclusive power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board or the Corporation, or as may be necessary or advisable in
the administration of this Agreement, including the right and power to (i) interpret the provisions
of this Agreement, and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including whether or not to redeem the Rights or to amend or
supplement this Agreement, and whether any proposed amendment or supplement adversely affects the
interests of the holders of Rights Certificates). All such actions, calculations, interpretations
and determinations (including, for purposes of clause (ii) next succeeding, all omissions with
respect to the foregoing) which are done or made by the Board in good faith, shall (x) be final,
conclusive and binding on the Corporation, the Rights Agent, the holders and Beneficial Owners of
the Rights and all other Persons, and (y) not subject the Board to any liability to the holders of
the Rights Certificates.

          Section 29. Successors. All the covenants and provisions of this Agreement by or for the
benefit of the Corporation or the Rights Agent shall bind and inure to the benefit of their
respective permitted successors and assigns hereunder.

          Section 30. Benefits of this Agreement. Nothing in this Agreement shall be construed to
give to any Person other than the Corporation, the Rights Agent and the registered holders of the
Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Corporation, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Shares).

          Section 31. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

-30-

 

          Section 32. Governing Law. This Agreement, each Right and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the laws of such State applicable to
contracts negotiated, executed and to be performed entirely within such State.

          Section 33. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.

          Section 34. Construction. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:

               (a) the words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of
similar import refer to this Agreement as a whole and not to any particular Article, Section or
other subdivision;

               (b) references in this Agreement to designated “Articles,” “Sections” and other subdivisions,
or to designated “Exhibits”, “Schedules” or “Appendices”, are to the designated Articles, Sections
and other subdivisions of, or the designated Exhibits, Schedules or Appendices to, this Agreement;

               (c) references to any Person includes such Person’s successors and assigns but, if applicable,
only if such successors and assigns are not prohibited by this Agreement, and reference to a Person
in a particular capacity excludes such Person in any other capacity or individually;

               (d) references to a “holder” of any shares or securities shall refer to the registered holder
thereof, as shown upon the registry of the Rights Agent, applicable transfer agent or the
Corporation, as the case may be;

               (e) calculations of the number of Preferred Shares, Common Shares or other securities
outstanding at any particular time, including for purposes of determining the particular percentage
of such outstanding Preferred Shares, Common Shares or any other securities of which any Person is
the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i)
promulgated under the Exchange Act, as in effect on the date of this Agreement;

               (f) reference to any federal, state, local, or foreign law means such law as amended,
modified, restated, supplemented, codified, replaced or reenacted, in whole or in part, and in
effect from time to time, including rules and regulations promulgated thereunder, and reference to
any section or other provision of any such law means that provision of such law from time to time
in effect and constituting the substantive amendment, modification, restatement, supplementation,
codification, replacement or reenactment of such section or other provision;

               (g) references to any agreement (including this Agreement), instrument, document, arrangement
or understanding means such agreement, instrument, document, arrangement or understanding as
amended, restated, supplemented or otherwise modified and in effect from time to time, and shall be
deemed to refer as well to the preamble and recitals and all addenda, annexes, appendices,
exhibits, schedules and other attachments thereto;

               (h) with respect to the determination of any period of time, “from” means “from and including”
and “to” means “to but excluding”;

-31-

 

               (i) the words “include,” “includes,” and “including” shall be deemed to be followed by
“without limitation”;

               (j) the term “or” shall not be exclusive;

               (k) pronouns in masculine, feminine, and neuter genders shall be construed to include any
other gender;

               (l) words in the singular form shall be construed to include the plural and vice versa, unless
the context otherwise requires; and

               (m) whenever the singular number is used, if required by the context, the same shall include
the plural, and vice versa.

[ THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK ]

-32-

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
attested, all as of the day and year first above written.

	 	 	 	 	 
	 	PEOPLESUPPORT, INC.

 	 
	 	By:  	/s/
Lance Rosenzweig	 
	 	 	Name:  	Lance Rosenzweig 	 
	 	 	Title:  	President, Chief Executive Officer and

Chairman of the Board of Directors 	 
	 
	 	COMPUTERSHARE TRUST COMPANY, N.A., as 

Rights Agent

 	 
	 	By:  	/s/
Kellie Gwinn	 
	 	 	Name:  	Kellie Gwinn	 
	 	 	Title:  	Vice President	 

 

 

	 	 	 	 	 

EXHIBIT A

FORM OF

CERTIFICATE OF DESIGNATIONS OF

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK OF

PEOPLESUPPORT, INC.

(Pursuant to Section 151 of the Delaware General Corporation Law)

     PeopleSupport, Inc., a corporation organized and existing under the General Corporation Law of
the State of Delaware (hereinafter called the “Corporation”), hereby certifies that, as required by
Section 151 of the General Corporation Law, the following resolution was duly adopted on August 27
2007, by the Board of Directors of the Corporation by unanimous written consent in lieu of a
meeting pursuant to Section 141(f) of the General Corporation Law.

     RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of
this Corporation (the “Board”) in accordance with the provisions of the Certificate of
Incorporation, the Board hereby creates a series of preferred stock, par value $0.001 per share, of
the Corporation (the “Preferred Stock”), and hereby states the designation and number of shares,
and fixes the relative rights, preferences, and limitations thereof as follows:

Series A Junior Participating Preferred Stock:

          Section 1. Designation and Amount. The shares of such series shall be designated as
“Series A Junior Participating Preferred Stock” (the “Series A Preferred Stock”) and the number of
shares constituting the Series A Preferred Stock shall be 250,000. Such number of shares may be
increased or decreased by resolution of the Board; provided, that no decrease shall reduce the
number of shares of Series A Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.

          Section 2. Dividends and Distributions.

               (a) Subject to the rights of the holders of any shares of any series of Preferred Stock (or
any similar stock) ranking prior and superior to the Series A Preferred Stock with respect to
dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of
common stock, par value $0.001 per share (the “Common Stock”), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if declared by the Board out of funds
legally available for the purpose, quarterly dividends payable in cash on the last day of January,
April, July and October in each year (each such date being referred to herein as a “Dividend
Payment Date”), commencing on the first Dividend Payment Date after the first issuance of a share
or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00, or (b) subject to the provision for adjustment hereinafter
set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other distributions,
other than a dividend payable in shares of Common Stock, declared on the Common Stock since the
immediately preceding Dividend Payment Date or, with respect to the first Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series A Preferred Stock. In
the event the Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of

A-1

 

Common Stock) into a greater or lesser number of shares of Common Stock; then in each
such case the amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which equals the number of shares of Common
Stock outstanding immediately after such event and the denominator of which equals the number of
shares of Common Stock that were outstanding immediately prior to such event.

               (b) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock
as provided in Section 2(a) immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the period between any
Dividend Payment Date and the next subsequent Dividend Payment Date, a dividend of $1.00 per share
on the Series A Preferred Stock shall nevertheless be payable, when, as and if declared, on such
subsequent Dividend Payment Date.

               (c) Dividends shall begin to accrue and be cumulative, whether or not earned or declared, on
outstanding shares of Series A Preferred Stock from the Dividend Payment Date next preceding the
date of issue of such shares, unless the date of issue of such shares is prior to the record date
for the first Dividend Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a Dividend Payment Date or is
a date after the record date for the determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and before such Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares
at the time outstanding. The Board may fix a record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to the date fixed for the
payment thereof.

          Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall have the
following voting rights:

               (a) Subject to the provision for adjustment hereinafter set forth, each share of Series A
Preferred Stock shall entitle the holder thereof to 100 votes on all matters upon which the holders
of the Common Stock of the Corporation are entitled to vote. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction, the numerator of which
equals the number of shares of Common Stock outstanding immediately after such event and the
denominator of which equals the number of shares of Common Stock that were outstanding immediately
prior to such event.

               (b) Except as otherwise provided herein, in any other Certificate of Designations creating a
series of preferred stock of the Corporation or any similar stock, and except as otherwise required by law, the holders of shares of Series A Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general voting rights shall
vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

A-2

 

               (c) Except as set forth herein, or as otherwise provided by law, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any
corporate action.

          Section 4. Certain Restrictions.

               (a) Whenever quarterly dividends or other dividends or distributions payable on the Series A
Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not earned or declared, on shares of Series A
Preferred Stock outstanding shall have been paid in full, the Corporation shall not:

               (i) declare or pay dividends, or make any other distributions, on any shares of stock
ranking junior (as to dividends) to the Series A Preferred Stock;

               (ii) declare or pay dividends, or make any other distributions, on any shares of stock
ranking on a parity (as to dividends) with the Series A Preferred Stock, except dividends
paid ratably on the Series A Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which the holders of all
such shares are then entitled;

               (iii) redeem or purchase or otherwise acquire for consideration shares of any stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock, provided, that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in exchange for shares of any
stock of the Corporation ranking junior (as to dividends and upon dissolution, liquidation
or winding up; or rights, warrants or options to acquire such junior stock) to the Series A
Preferred Stock; or

               (iv) redeem or purchase or otherwise acquire for consideration any shares of Series A
Preferred Stock, or any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as determined by the
Board) to all holders of such shares upon such terms as the Board, after consideration of
the respective annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.

               (b) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation
could, under Section 4(a), purchase or otherwise acquire such shares at such time and in such
manner.

          Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of preferred stock to be created by resolution or resolutions of
the Board, subject to any conditions and restrictions on issuance set forth herein, in the
Articles, or in any other certificate of designations.

          Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or
winding up of the Corporation, no distribution shall be made (A) to the holders of the Common Stock
or of shares of any other stock of the Corporation ranking junior, upon liquidation,

A-3

 

dissolution or
winding up, to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not earned or declared, to the date of such
payment; provided that the holders of shares of Series A Preferred Stock shall be entitled to
receive an aggregate amount per share, subject to the provision for adjustment hereinafter set
forth, equal to 100 times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (B) to the holders of shares of stock ranking on a parity upon liquidation,
dissolution or winding up with the Series A Preferred Stock, except distributions made ratably on
the Series A Preferred Stock and all such parity stock in proportion to the total amounts to which
the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (A) of the sentence next preceding
shall be adjusted by multiplying such amount by a fraction, the numerator of which equals the
number of shares of Common Stock outstanding immediately after such event and the denominator of
which equals the number of shares of Common Stock that were outstanding immediately prior to such
event.

          Section 7. Consolidation, Merger, Etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash or any other property, then in any
such case each share of Series A Preferred Stock shall at the same time be similarly exchanged for
or changed into an amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which equals the number of shares of Common Stock
outstanding immediately after such event and the denominator of which equals the number of shares
of Common Stock that were outstanding immediately prior to such event.

          Section 8. No Redemption. The shares of Series A Preferred Stock shall not be redeemable
from any holder.

          Section 9. Rank. The Series A Preferred Stock shall rank, with respect to the payment of
dividends and the distribution of assets upon liquidation, dissolution or winding up of the
Corporation, junior to all other series of preferred stock outstanding and senior to the Common
Stock.

          Section 10. Amendment. The Articles shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single
class, in addition to such other vote as may be required by the Delaware General Corporation Law.

A-4

 

          Section 11. Fractional Shares. Shares of Series A Preferred Stock may be issued in
fractions of a share that shall entitle the holder, in proportion to such holder’s fractional
shares, to exercise voting rights, receive dividends, participate in distributions and to have the
benefit of all other rights of holders of Series A Preferred Stock.

     IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation
by its Chairman of the Board this 28th day of August, 2007

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 

Lance Rosenzweig
	 	 
	 

	 	Chairman of the Board	 	 

A-5

 

EXHIBIT B

FORM OF RIGHT CERTIFICATE

CERTIFICATE NO. R-RIGHTS

Not exercisable after August 27, 2017, or earlier if redemption or exchange occurs. The Rights
evidenced hereby are subject to redemption at any time at $0.001 per Right and to exchange, in each
case on the terms set forth in the Shareholder Rights Agreement.

Under certain circumstances set forth in the Shareholder Rights Agreement, Rights issued to, or
held by, any holder who is, was or becomes an Acquiring Person or an Affiliate or Associate thereof
(as each of such terms is defined in the Shareholder Rights Agreement) and certain related persons,
whether currently held by or on behalf of such holder or by any subsequent holder, shall become
null and void. The Rights shall not be exercisable by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the exercise by such holder, of the
rights in such jurisdiction shall not have been obtained or be obtainable.

RIGHT CERTIFICATE

PEOPLESUPPORT, INC.

     This Right Certificate certifies that                                         , or registered assigns, is
the registered holder of the number of Rights set forth above, each of which entitles the holder
thereof, subject to the terms, provisions and conditions of that certain Shareholder Rights
Agreement, made and entered into as of August 28, 2007 (as amended, supplemented or otherwise
modified from time to time, the “Agreement”), by and between PeopleSupport, Inc., a Delaware
corporation (together with its successors, the “Corporation”), and Computershare Trust Company,
N.A., as rights agent (together with its successors in such capacity under the Agreement, the
“Rights Agent”), to purchase from the Corporation at any time after the Distribution Date (as such
term is defined in the Agreement) and prior to 5:00 P.M., California time, on August 27, 2017 at
the office of the Rights Agent designated for such purpose, one one-hundredth of a fully paid,
non-assessable share of Series A Junior Participating Preferred Stock, par value $0.001 per share
of the Corporation (the “Preferred Shares”), at a purchase price of $65.00 in cash per one
one-hundredth of a Preferred Share (as adjusted in accordance with the Agreement, the “Purchase
Price”), upon presentation and surrender of this Right Certificate with the Form of Election to
Purchase and related Certificate properly completed and duly executed. The number of Rights
evidenced by this Right Certificate (and the number of one one-hundredths of a Preferred Share
which may be initially purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of September 7, 2007 based on the Preferred
Shares as constituted at such date.

     Capitalized terms used but not defined in this Right Certificate shall have the respective
meanings ascribed to such terms in the Agreement.

     From and after the occurrence of a Section 11(a)(ii) Event, any Rights represented by this
Right Certificate that are Beneficially Owned by (i) an Acquiring Person (or any Affiliate or
Associate thereof), (ii) a transferee of any Acquiring Person (or any Affiliate or Associate
thereof) who becomes a transferee after the Section 11(a)(ii) Event, or (iii) a transferee of an
Acquiring Person (or any Affiliate or Associate thereof) who becomes a transferee prior to or
concurrently with the Section 11(a)(ii) Event and receives

B-1

 

such Rights under certain circumstances specified in the Rights Agreement; shall become null
and void without any further action and no holder hereof shall have any rights whatsoever with
respect to such Rights under any provision of the Agreement, this Right Certificate or otherwise.

     As provided in the Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share or other debt or equity securities, cash or assets (Substituted Value) which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events, including Trigger Events.

     This Right Certificate is subject to all of the terms, provisions and conditions of the
Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent,
the Corporation and the holders of the Right Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under the specific circumstances set
forth in the Rights Agreement. Copies of the Agreement are on file at the principal executive
offices of the Corporation and the offices of the Rights Agent.

     This Right Certificate, with or without other Right Certificates, upon surrender at the office
of the Rights Agent designated for such purpose, may be exchanged for one or more other Right
Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares or Substituted Value as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to purchase, other
than Rights which are null and void as aforesaid. If this Right Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender hereof one or more other Right
Certificates for the number of whole Rights not exercised.

     Subject to the terms and conditions of the Agreement, the Corporation may redeem the Rights
represented by this Right Certificate at a redemption price of $0.001 per Right (subject
to adjustment as provided in the Agreement), payable either in Common Shares or other
consideration, valued as provided in the Rights Agreement, or in cash.

     Subject to the terms and conditions of the Agreement, the Corporation may exchange any or all
of the Rights represented by this Right Certificate for shares of the Corporation’s Common Stock,
par value $0.001 per share (“Common Shares”), (or Equivalent Common Shares, including Preferred
Shares) at an exchange ratio of one Common Share (or an appropriate number of Equivalent Common
Shares) per Right (subject to adjustment as provided in the Rights Agreement).

     No fractional Preferred Shares or Equivalent Common Shares will be issued upon the exercise of
any Rights evidenced hereby (other than fractions of Preferred Shares which are integral multiples
of one one-hundredth of a Preferred Share, which may, at the election of the Corporation, be
evidenced by depositary receipts), but, in lieu thereof, a cash payment will be made, as provided
in the Agreement.

     No holder of this Right Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the Preferred Shares or any other Issuable Securities or other
securities of the Corporation, nor shall anything contained in the Agreement or herein be construed
to confer upon the holder hereof, as such, any of the rights of a stockholder of the Corporation or
any right to vote for the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the Agreement), or to
receive dividends or other distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised
as provided in the Agreement.

B-2

 

     This Right Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Rights Agent.

     WITNESS the facsimile signature of the proper officers of the Corporation and its corporate
seal. Dated as of September 7, 2007.

	 	 	 	 	 
	Attest: 	PEOPLESUPPORT, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	Attest: 	COMPUTERSHARE TRUST COMPANY, N.A., as Rights Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

B-3

 

	 	 	 	 	 

Form of Reverse Side of Right Certificate

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Right Certificate.)

     FOR VALUE RECEIVED                                          hereby sells, assigns and transfers unto               
                                              
(please print name and address of transferee)                                          this
Right Certificate, together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint                                          Attorney, to transfer the within Right Certificate
on the books of the within-named Corporation, with full power of substitution.

Dated:                                         ,                     

	 	 	 	 	 
	 

	 	 

Signature
	 	 

Signature Medallion Guaranteed:

     Signature must be medallion guaranteed by a financial institution (commercial bank,
stockbroker, savings and loan, credit union or trust company) that is a participant in the
Securities Transfer Agents Medallion Program, pursuant to Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended.

CERTIFICATE

     The undersigned hereby certifies by checking the appropriate boxes that:

     (1) the Rights evidenced by this Right Certificate o is or o is not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring Person (or an Affiliate or
Associate thereof) (as such terms are defined in the Agreement), and

     (2) after due inquiry and to the best knowledge of the undersigned, the undersigned o did or o
did not acquire the Rights evidenced by this Right Certificate from any Person who is, was or
subsequently became an Acquiring Person (or an Affiliate or Associate thereof).

Dated:                                          ,                     

	 	 	 	 	 
	 

	 	 

Signature
	 	 

B-4

 

NOTICE

     The signature on the foregoing Form of Assignment and Certificate must conform to the name as
written upon the face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.

     In the event the Certificate set forth above in the Form of Assignment is not properly
completed or the Form or Certificate are not duly executed, the Corporation and the Rights Agent
will deem the Beneficial Owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person (or an Affiliate or Associate thereof) and such Assignment will not be honored.

B-5

 

Form of Reverse Side of Right Certificate — continued

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise

Rights represented by the Right Certificate.)

			
	To:	 	PeopleSupport, Inc.

     The undersigned hereby irrevocably elects to exercise                                          Rights
represented by this Right Certificate and other Issuable Securities to purchase the Preferred
Shares issuable upon the exercise of such Rights and requests that certificates evidencing such
shares or other securities be issued in the name of:

Please insert social security or other identifying number

 

(Please print name and address)

 

If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new
Right Certificate for the balance remaining of such Rights shall be registered in the name of and
delivered to:

Please insert social security or other identifying number

 

(Please print name and address)

 

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

Signature
	 	 

Signature Medallion Guaranteed:

     Signature must be medallion guaranteed by a financial institution (commercial bank,
stockbroker, savings and loan, credit union or trust company) that is a participant in the
Securities Transfer Agents Medallion Program, pursuant to Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended..

B-6

 

CERTIFICATE

     The undersigned hereby certifies by checking the appropriate boxes that:

     (1) the Rights evidenced by this Right Certificate o is or o is not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring Person (or an Affiliate or
Associate thereof) (as such terms are defined in the Agreement), and

     (2) after due inquiry and to the best knowledge of the undersigned, the undersigned o did or
o did not acquire the Rights evidenced by this Right Certificate from any Person who is, was or
subsequently became an Acquiring Person (or an Affiliate or Associate thereof).

Dated:                                         ,                     

	 	 	 	 	 
	 

	 	 

Signature
	 	 

NOTICE

     The signature on the foregoing Form of Election to Purchase and Certificate must conform to
the name as written upon the face of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.

     In the event the Certificate set forth above in the Form of Election to Purchase is not
properly completed or the Form or Certificate are not duly executed, the Corporation and the Rights
Agent will deem the Beneficial Owner of the Rights evidenced by this Right Certificate to be an
Acquiring Person (or an Affiliate or Associate thereof) and such Election to Purchase will not be
honored.

 

B-7

 

EXHIBIT C

SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES

     On August 27, 2007, the Board of Directors (the “Board”) of PeopleSupport, Inc., a Delaware
corporation (the “Corporation”), declared a dividend distribution of one preferred stock purchase
right (a “Right”) for each outstanding share of the Corporation’s voting shares of common stock,
par value $0.001 per share (the “Common Stock”), to shareholders of record at the close of business
on September 7, 2007 (the “Record Date”), and with respect to shares of Common Stock (“Common
Shares”) issued thereafter until the Distribution Date (as defined below) and, in certain
circumstances (described below), with respect to Common Shares issued after the Distribution Date.
Except as set forth below, each Right, when it becomes exercisable, entitles the registered holder
to purchase from the Corporation one one-hundredth of a Preferred Share, at a per-share purchase
price of $65.00 in cash, subject to adjustment (as so adjusted, the “Purchase Price”). The
description and terms of the Rights are as set forth in that certain Shareholder Rights Agreement,
made and entered into as of August 28, 2007 (as amended, supplemented or otherwise modified from
time to time, the “Rights Agreement”), by and between the Corporation and Computershare Trust
Company, N.A., as rights agent (together with its permitted successors in such capacity, the
“Rights Agent”).

     Initially, the Rights will attach to all Common Stock certificates evidencing shares then
outstanding, and no separate certificates evidencing Rights will be distributed. The Rights will
separate from the Common Stock and a “Distribution Date” will occur ten days (or such longer time
as the Board may determine) following the earlier to occur of (i) a public announcement or
disclosure that a person or group of affiliated or associated persons (an “Acquiring Person”),
other than certain exempt persons, has acquired, or obtained the right to acquire, beneficial
ownership of 10% or more of the outstanding shares of the Corporation’s Common Stock (the “Stock
Acquisition Date”), except pursuant to a Permitted Acquisition (as defined below), or (ii) the
commencement of, or announcement of an intention to make, by any person other than an exempt
person, a tender offer or exchange offer (other than a Permitted Offer) which upon consummation
would result in a person or group beneficially owning 10% or more of the outstanding shares of the
Corporation’s Common Stock.

     A “Permitted Offer” is a tender or exchange offer which is for all outstanding Common Shares
at a price and on terms which a majority of certain members of the Board determines to be adequate
and in the best interests of the Corporation and its shareholders (excluding the interests of such
Acquiring Person and its affiliates and associates).

     A “Permitted Acquisition” is the acquisition of Common Shares directly from the Corporation,
including by way of a dividend or distribution on the Common Shares, or pursuant to a Permitted
Offer.

     Until the Distribution Date (or earlier redemption or expiration of the Rights), (i) the
Rights will be represented by the Common Stock certificates and will be transferred with and only
with such Common Stock certificates, (ii) new Common Stock certificates issued after the Record
Date upon transfer or new issuance of Common Shares will contain a notation incorporating the
Rights Agreement by reference, and (iii) the surrender for transfer of any certificates
representing Common Stock outstanding, even without such notation, will also constitute the
transfer of the Rights associated with the Common Stock represented by such certificate.

     The Rights are not exercisable until the Distribution Date and will expire at the close of
business on August 27, 2017, unless earlier redeemed or exchanged by the Corporation as described
below.

 

 

     As soon as practicable after the Distribution Date, separate certificates evidencing the
Rights (“Right Certificates”) will be mailed to holders of record of the Common Shares as of the
close of business on the Distribution Date (other than to any Acquiring Person or any associate or
affiliate thereof), and thereafter such separate Right Certificates alone will evidence the Rights.
Except as otherwise determined by the Corporation and except in connection with Common Shares
issued after the Distribution Date upon the exercise of employee stock options, under other
employee stock benefit plans, or upon the exercise, conversion or exchange of warrants or
convertible securities (other than Rights), only Common Shares issued prior to the Distribution
Date will be issued with Rights.

     In the event any Person becomes an Acquiring Person, except pursuant to a Permitted Offer,
also known as a “Section 11(a)(ii) Event”, each holder of a Right will thereafter have the right to
receive, upon exercise, that number of Common Shares (or, in certain circumstances, other shares,
equity or debt securities, cash or other assets of the Corporation) which equals the Purchase Price
of the Right divided by one-half of the Current Market Price (as defined in the Rights Agreement)
of a Common Share at the date of the occurrence of the event. Notwithstanding any of the
foregoing, all Rights that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by an Acquiring Person (or an Affiliate or Associate thereof) would be
null and void.

     In the event that, at any time following a Section 11(a)(ii) Event, (i) the Corporation merges
or combines into or with any Acquiring Person, or any of its Affiliates, Associates or other
related persons, or any other person if all shareholders of the Corporation are not treated alike,
other than certain restructurings not resulting in any change of control of the Corporation, or
(ii) 50% or more of the Corporation’s assets or earning power is sold or transferred in one or a
series of related transactions, each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to receive, upon exercise at the initial
exercise price of the Right, as adjusted except as a result of a Section 11(a)(ii) Event, that
number of shares of common stock of the acquiring company which equals such exercise price divided
by one-half of the current market price (as defined in the Rights Agreement) of such common stock
at the date of the occurrence of the event. The events set forth in this paragraph and in the
preceding two paragraphs are referred to as the “Triggering Events”.

     The Corporation may at any time redeem the Rights in whole but not in part, at a redemption
price of $0.001 (as adjusted) per Right (payable in cash, Common Shares or other consideration
deemed appropriate by the Board). Immediately upon effectiveness of the redemption of the Rights,
the Rights will terminate and the only right of the holders of Rights will be to receive the
redemption price of the $0.001  (as adjusted) per Right.

     After the occurrence of a Section 11(a)(ii) Event, the Corporation may at any time exchange
the Rights (other than Rights owned by an Acquiring Person, which would have become void), in whole
or pro rata in part, at an exchange ratio of one Common Share, or one-third of an Equivalent Common
Shares (as defined in the Rights Agreement), per Right (subject to adjustment). Immediately upon
effectiveness of the exchange of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the appropriate number of Common Shares or Equivalent Common
Shares per Right.

     The Purchase Price payable, and the number of Preferred Shares, Common Shares or other
securities or property issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a dividend of Common Shares on, or a split,
subdivision, combination, consolidation or reclassification of, the Common Shares, (ii) if holders
of the Common Shares are granted certain rights, options or warrants to subscribe for or purchase
Common Shares at, or securities convertible into Common Shares or Equivalent Common Shares with a
conversion price, less than the then-current market price of the Common Shares, or (iii) upon the
distribution to holders of the Common

 

 

Shares of evidences of indebtedness, cash (excluding regular quarterly cash dividends), assets
or of subscription rights or warrants (other than those referred to above).

     With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments amount to at least 1% of the Purchase Price. No fractional Common Shares will be issued
and, in lieu thereof, an adjustment in cash will be made based on the market price of the Common
Shares on the last trading date prior to the date of exercise.

     All of the provisions of the Rights Agreement may be amended by the Board prior to the
Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board in order to cure any ambiguity, defect or inconsistency, to make changes which
do not adversely affect the interests of holders of Rights (excluding the interests of any
Acquiring Person and its affiliates and associates), or, subject to certain limitations, to shorten
or lengthen any time period under the Rights Agreement.

     Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder
of the Corporation, including the right to vote or to receive dividends. While the distribution of
the Rights will not be taxable to shareholders or to the Corporation, shareholders may, depending
upon the circumstances, recognize taxable income in the event that the Rights become exercisable
for Common Shares (or other consideration) of the Corporation or for shares of common stock of the
acquiring company as set forth above.

     A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an exhibit to the Corporation’s Current Report on Form 8-K filed on August 29, 2007. A copy of the
Rights Agreement is available free of charge from the Corporation. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.

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