Document:

Exhibit
10.12

EMPLOYMENT
AGREEMENT

        THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made by and between BIDZ.COM, Inc.,
a Delaware corporation (the “Company”), and Claudia Y. Liu (“Employee”), and is
entered as of February 21, 2007 (the “Start Date”).

WITNESSETH:

        WHEREAS,
the Company and Employee wish to ensure that the Company will receive the
benefit of Employee’s loyalty and service;

        WHEREAS,
in order to help ensure that the Company receives the benefit of Employee’s
loyalty and service, the parties desire to enter into this formal Employment
Agreement to provide Employee with appropriate compensation arrangements;

        WHEREAS,
the Company desires by this writing to set forth the employment relationship of
Employee with the Company, and Employee is willing to enter into such
employment relationship on the terms and conditions set forth herein;

        NOW
THEREFORE, for consideration, the value, sufficiency, and receipt of which are
hereby acknowledged, the parties hereto agree as follows.

        1.    Employment.

        (a)    Position.    The
Company hereby employs Employee, and Employee agrees to be employed by the
Company, commencing on the Start Date and continuing during the term (as
defined in Section 2 below). Employee shall hold the position of Chief
Operating Officer of the Company and such other positions as the Board of
Directors of the Company (the “Board”) may designate. Employee’s duties and
responsibilities hereunder shall include (a) providing senior executive management
services as the Company may designate through its Board consistent with the
position of Chief Operating Officer, and (b) such other duties and
responsibilities as are assigned to Employee from time to time by the Board and
accepted by Employee. Employee shall report to the Chief Executive Officer of
the Company.

        (b)    Performance of Duties.    Except
as otherwise provided herein or hereafter agreed upon in writing, Employee
shall devote reasonable attention and time during usual business hours to the
performance of her duties hereunder and shall, except as provided herein,
render his services solely and exclusively for the Company during the
employment term and agrees to serve the Company diligently, in good faith, and
to the best of her abilities. Without limitation of the foregoing, without the
Board’s prior approval, the Employee will refrain from

serving on other boards or engaging in other similar
activities that the Board determines will interfere with the performance of the
Employee’s responsibilities hereunder.

        2.    Term.    The
initial term of this Agreement shall be three years from the Start Date (the “Initial Term”);
provided, however, that the term of this Agreement shall be automatically
extended (as extended, the “Employment Term”)
for one year on the expiration of the Initial Term and on each anniversary
thereof unless either the Company or the Employee shall have given written
notice to the other not less than ninety (90) days prior thereto that the
term of this Agreement shall not be so extended; and provided, further, that,
notwithstanding any such notice by the Company given after a Change in Control
(as defined below) not to extend the term of this Agreement, the term of this
Agreement shall not expire prior to the expiration of the then current term of
this Agreement.

        3.    Base
Salary.    The Company shall pay Employee
during the term of this Agreement a base salary at the rate of $200,000 per
annum or such larger amount as the Board may from time to time determine
(hereinafter referred to as the “Base Salary”). Such Base Salary shall be
payable no less frequently than monthly during the year in accordance with the
Company’s customary payroll practices applicable to its executives. Employee
agrees that the Company may deduct and withhold from the payments to be made to
Employee hereunder amounts required to be deducted and withheld by the Company
under the provisions of any statute, law, regulation, or ordinance heretofore
or hereafter enacted.

        4.    Benefits.    Employee
shall be eligible to participate in all stock option, stock bonus, incentive
compensation, retirement, savings, fringe benefit, disability insurance, group
health and group life, vacation, and similar health and benefit plans maintained
by the Company in accordance with the terms and conditions thereof on a basis
which is no less favorable than that applicable to employees of the Company who
are similarly situated to Employee. No additional compensation provided under
any of such plans shall be deemed to modify or otherwise affect the terms of
this Agreement or any of Employee’s entitlements hereunder, unless such
modification is explicitly required herein or by any of such plans.

        5.    Vacation
and Sick Leave.    At such reasonable times
as the Board shall in its discretion permit, Employee shall be entitled,
without loss of pay, to absent herself voluntarily from the performance of his
employment under this Agreement, provided that:

        (a)   Employee
shall be entitled to annual vacation in accordance with the policies as
periodically established by the Board for similarly situated executives of the
Company.

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        (b)   The
Board shall be entitled to grant to Employee a leave or leaves of absence with
or without pay at such time or times and upon such terms and conditions as the
Board in its discretion may determine.

        (c)   Employee
shall be entitled to sick leave (without loss of pay) in accordance with the
Company’s policies as in effect from time to time.

        6.    Expenses.    Employee
shall be entitled to reimbursement for reasonable expenses necessary for the
performance of his duties hereunder or for promoting, pursuing, or otherwise
furthering the business or interests of the Company. All claims for expenses
shall be reasonable and made on the basis of statements thereof (together with
vouchers or other documents evidencing such expenses) furnished by Employee to
the Company at monthly or more frequent intervals and in accordance with the
Company’s expense reimbursement policy and standard procedures as they exist
from time to time.

        7.    Termination.

        (a)   Employee’s
employment hereunder may be terminated under the following circumstances:

        (1)    Death.    Employee’s
employment by the Company shall automatically terminate upon Employee’s death.

        (2)    Disability.    The
Company may terminate Employee’s employment after having established Employee’s
Disability. For purposes of this Agreement, “Disability” means a physical or mental
infirmity which impairs Employee’s ability to substantially perform her duties
under this Agreement which continues for a period of at least one hundred
eighty (180) consecutive days. Employee shall be entitled to the
compensation and benefits provided for under this Agreement for any period
during the term of this Agreement and prior to the establishment of Employee’s
Disability during which Employee’s ability to substantially perform his duties
under this Agreement is impaired due to a physical or mental infirmity.
Notwithstanding anything contained in this Agreement to the contrary, until the
Termination Date specified in a Notice of Termination (as each term is
hereinafter defined) relating to Employee’s Disability, Employee shall be
entitled to return to his position with the Company as set forth in this
Agreement in which event no Disability of Employee will be deemed to have
occurred.

        (3)    Cause.    The
Company may terminate Employee’s employment for Cause. A termination for “Cause” is a
termination evidenced by a resolution adopted in good faith by two-thirds (2/3) of the Board that Employee—

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        (i)    has
habitually neglected her duties with the Company (other than a failure
resulting from Employee’s incapacity due to physical or mental illness), or
materially breached any of the provisions of this Agreement, which failure or
breach continued for a period of at least thirty (30) days after a written
notice of demand for substantial performance or other correction has been
delivered to Employee specifying the manner in which Employee has failed to
substantially perform,

        (ii)   engaged
in conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise, or

        (iii)  has
been convicted or entered a plea of nolo
contendere in the case of any misdemeanor involving moral turpitude,
or has been indicted or convicted of an act which is defined as a felony under
federal or state law;

provided,
however, that no termination of Employee’s employment shall be for Cause as set
forth in clause (ii) above until (x) there shall have been delivered
to Employee a copy of a written notice setting forth that Employee was guilty
of the conduct set forth in clause (ii), and specifying the particulars
thereof in detail, and (y) Employee shall have been provided an
opportunity to be heard by the Board (with the assistance of Employee’s counsel
if Employee so desires). No act, nor failure to act, on Employee’s part, shall
be considered “willful” unless he has acted or failed to act, with an absence
of good faith and without a reasonable belief that his action or failure to act
was in the best interest of the Company. Notwithstanding anything contained in
this Agreement to the contrary, no failure to perform by Employee after Notice
of Termination is given by Employee shall constitute Cause for purposes of this
Agreement.

        (4)    Without Cause.    The
Company shall have the right and option, exercisable by giving written notice
to Employee, to terminate Employee’s employment by the Company without Cause
and for any reason or for no reason. This right is not limited or restricted
by, and shall supersede, any policy of the Company requiring or favoring
continued employment of its executives during satisfactory performance, any
seniority system or any procedure governing the manner in which the Company’s
discretion is to be exercised. No exercise by the Company of this termination
right shall, under any circumstances, be deemed to constitute (i) a breach
by the Company of any term of this Agreement, express or implied (including
without limitation a breach of any implied covenant of good faith and fair
dealing), (ii) a wrongful discharge of Employee or a wrongful termination
of Employee’s employment by the Company, (iii) a wrongful deprivation by
the Company of Employee’s corporate office (or authority, opportunities or
other benefits relating thereto) or (iv) the breach by the Company of any
other duty or obligation, express or implied, which the Company may owe to Employee
pursuant to

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any principle or provision of law (whether contract or
tort); provided, however, that notwithstanding the foregoing, a breach by the
Company of its payment obligations pursuant to Section 8 shall be deemed
to be a breach of this Agreement.

        The
failure or refusal of the Company to renew or extend the Initial Term or
Employment Term, as the case may be, shall not constitute a termination of
Employee’s employment by the Company without Cause under this Agreement.

        (5)    Good Reason.    Employee
may terminate his employment for Good Reason. For purposes of this Agreement, “Good Reason” shall
mean the occurrence of any of the events or conditions described in subsections
(i) through (vii) below:

        (i)    a
change in Employee’s status, title, position or responsibilities (including
reporting responsibilities) which does not represent a promotion from his
status, title, position or responsibilities; the assignment to Employee of any
duties or responsibilities which, in Employee’s reasonable judgment, are
inconsistent with Employee’s then status, title, position or responsibilities;
or any removal of Employee from or failure to reappoint or reelect him to any
of such positions, except in connection with the termination of his employment
for Disability, Cause, as a result of his death or by Employee other than for
Good Reason;

        (ii)   a
reduction in Employee’s Base Salary;

        (iii)  the
Company’s requiring Employee to be based at any place outside a 30-mile radius
from Culver City, California, except for reasonably required travel on the
Company’s business which is not materially greater than Employee’s then travel
requirements;

        (iv)  the
failure by the Company to (A) continue in effect any material compensation
or benefit plan in which Employee was participating at the time of a Change in
Control, or (B) provide Employee with compensation and benefits at least
equal (in terms of benefit levels and/or reward opportunities) to those
provided for under each other employee benefit plan, program and practice as in
effect immediately prior to the Change in Control (or as in effect following
the Change in Control, if greater);

        (v)   any
material breach by the Company of any material provision of this Agreement; and

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        (vi)  any
purported termination of Employee’s employment for Cause by the Company which
does not comply with the terms of Section 7(a)(3) of this Agreement.

        Employee’s
right to terminate her employment pursuant to this Section 7(a) shall not
be affected by her incapacity due to physical or mental illness. “Good Reason”
shall not include acts not taken in bad faith which are cured by the Company in
all respects not later than thirty (30) days from the date of receipt by
the Company of a Notice of Termination from Employee.

        (6)    Voluntary Termination.    Employee
may voluntarily terminate her employment hereunder at any time.

        (b)   For
purposes of this Agreement, a “Change in Control” shall mean any of the following:

        (1)   an
acquisition (other than directly from the Company in the case of voting
securities of the Company) of any voting securities (the “Voting Securities”)
of the Company by any “Person”
(as the term person is used for purposes of Section 13(d) or 14(d) of the
Exchange Act) immediately after which such Person has “Beneficial Ownership”
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
more than fifty percent (50%) of the then outstanding shares of common stock
(the “Shares”)
of the Company. For purposes of this Agreement, in determining whether a Change
in Control has occurred pursuant to this Section 7(b)(1), Shares or Voting
Securities which are acquired in a “Non-Control Acquisition” (as hereinafter
defined) shall not constitute an acquisition which would cause a Change in
Control. A “Non-Control
Acquisition” shall mean an acquisition by (i) an employee
benefit plan (or a trust forming a part thereof) sponsored or maintained by
(A) the Company or (B) any corporation or other Person of which a
majority of its voting power or its voting equity securities or equity interest
is owned, directly or indirectly, by the Company (for purposes of this
definition, a “Company
Subsidiary”) or (ii) the Company, any Company Subsidiary,
or any of their affiliates, (iii) any underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) any Person
in connection with a “Non-Control Transaction” (as hereinafter defined);

        (2)   The
consummation of:

        (i)    a
merger, consolidation or reorganization with or into the Company in which
securities of the Company are issued (a “Merger”), unless such Merger is a “Non-Control
Transaction.” A “Non-Control
Transaction” shall mean a Merger where:

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        (A)  the
stockholders of the Company immediately before such Merger own directly or
indirectly immediately following such Merger at least fifty percent (50%) of
the combined voting power of the outstanding voting securities of (x) the
corporation resulting from such Merger (the “Surviving Corporation”), if the
Surviving Corporation has no Parent immediately following such Merger, or
(y) the ultimate Parent of the Surviving Corporation, if there are one or
more Parents of the Surviving Corporation immediately following such Merger.
For purposes of this Agreement, “Parent” shall mean an entity that owns,
directly or indirectly, more than fifty percent (50%) of the then-outstanding
Shares of the Company or the combined voting power of the then-outstanding
Voting Securities of the Company; and

        (B)  the
members of the “Incumbent Board” (as defined below) immediately prior to the
execution of the agreement providing for such Merger, constitute at least a
majority of the members of the board of directors of (x) the Surviving
Corporation, if the Surviving Corporation has no Parent immediately following
such Merger, or (y) the ultimate Parent of the Surviving Corporation, if
there are one or more Parents of the Surviving Corporation immediately
following such Merger;

        (ii)   a
complete liquidation or dissolution of the Company or a Parent, as the case may
be; or

        (iii)  the
sale or other disposition of all or substantially all of the assets of the
Company or a Parent, as the case may be, to any Person (other than a transfer
to a Company Subsidiary or Parent Subsidiary or under conditions that would
constitute a Non-Control Transaction (with the disposition of assets being
regarded as a Merger for this purpose), or any other distribution to the
stockholders of the Company or a Parent of the stock of a Company Subsidiary or
a Parent Subsidiary or any other assets; or

        (3)   the
individuals who, at the Start Date, are members of the Board (the “Incumbent Board”)
cease for any reason to constitute a majority of the members of the Board or,
following a Merger which results in a Parent, the board of directors of the
ultimate Parent; provided, however, that if the appointment or election, or
nomination for election by the Company’s stockholders, of any new director was
approved by a vote of at least two-thirds (2/3)
of the Incumbent Board, such new director shall, for purposes of this
Agreement, be considered as a member of the Incumbent

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Board; provided further, however, that no individual
shall be considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or threatened “Election Contest” (as
described in Rule 14a-11 promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board (a “Proxy Contest”) including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest.

        Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
any Person (the “Subject
Person”) acquired Beneficial Ownership of more than the
permitted amount of the then-outstanding Shares or Voting Securities of the
Company or a Parent as a result of the acquisition by the Company or by a
Parent of its Shares or Voting Securities which, by reducing the number of
Shares or Voting Securities then outstanding, increases the proportional number
of shares Beneficially Owned by the Subject Person; provided, however, that, if
a Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of Shares or Voting Securities by the Company, and
after such share acquisition by the Company or by such Parent, the Subject
Person becomes the Beneficial Owner of any additional Shares or Voting
Securities which increases the percentage of the then-outstanding Shares or
Voting Securities of the Company or of such Parent Beneficially Owned by the
Subject Person, then a Change in Control shall occur.

        (c)    Notice of Termination.    Any
purported termination by the Company or by Employee shall be communicated by
written Notice of Termination to the other. For purposes of this Agreement, a “Notice
of Termination” shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination
of Employee’s employment under the provision so indicated. For purposes of this
Agreement, no such purported termination of employment shall be effective
without such Notice of Termination.

        (d)    Termination Date.    “Termination Date”
shall mean in the case of Employee’s death, his date of death, or in all other
cases, the date specified in the Notice of Termination subject to the
following:

        (1)   if
Employee’s employment is terminated by the Company for Cause or due to
Disability, or voluntarily by Employee (other than for Good Reason), the date
specified in the Notice of Termination shall be at least thirty (30) days
from the date the Notice of Termination is given to or by Employee, provided
that in the case of Disability, Employee shall not have returned to the
full-time performance of his duties during such period of at least thirty
(30) days; and

        (2)   if
Employee’s employment is terminated for Good Reason or without Cause, the date
specified in the Notice of Termination shall not be 

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more than sixty (60) days, and shall not be less
than thirty (30) days, from the date the Notice of Termination is given to
or by the Company.

        8.    Compensation
Upon Termination.    Upon termination of
Employee’s employment during the term of this Agreement (including any
extensions thereof), Employee shall be entitled to the following benefits:

        (a)    Cause, Disability, Death or
Voluntary Termination (Other Than for Good Reason).    If
Employee’s employment is terminated by the Company for Cause or Disability or
by Employee (other than for Good Reason), or by reason of Employee’s death, the
Company shall pay Employee all amounts earned or accrued hereunder through the
Termination Date but not paid as of the Termination Date, including
(1) Base Salary, (2) reimbursement for any and all monies advanced or
expenses incurred in connection with Employee’s employment for reasonable and
necessary expenses incurred by Employee on behalf of the Company for the period
ending on the Termination Date, (3) vacation pay, (4) any bonuses or
incentive Compensation earned and payable as of the Termination Date, and
(5) any previous compensation which Employee has previously deferred
(including any interest earned or credited thereon) (collectively, “Accrued Compensation”).
Employee’s entitlement to any other compensation or benefits shall be
determined in accordance with the Company’s employee benefit plans and other
applicable programs and practices then in effect.

        (b)    Without Cause or for Good
Reason.    If Employee’s employment by the
Company shall be terminated by the Company other than for Cause, death or
Disability, or by Employee for Good Reason, then Employee shall be entitled to
the benefits provided below:

        (i)    the
Company shall pay Employee all Accrued Compensation;

        (ii)   the
Company shall pay Employee as severance pay and in lieu of any further salary
for periods subsequent to the Termination Date, a single payment in cash equal,
in total, to one and one-half (1 1⁄2) times the Employee’s Base Salary at the
highest rate in effect at any time within the ninety (90) day period
ending on the date the Notice of Termination is given (or if Employee’s
employment is terminated after a Change in Control, Employee’s Base Salary
immediately prior to the Change in Control, if greater); and.

        (iii)  during
the [twenty four (24) month] period following the Termination Date, the
Company shall at its expense continue on behalf of Employee and his dependents
and beneficiaries the life insurance, disability, medical, dental and
hospitalization benefits which are, from time to time during such twenty
four-month period being provided to employees of the Company generally. The
Company’s obligation hereunder with respect to the foregoing benefits shall be
limited to the

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extent that Employee obtains any such benefits pursuant
to a subsequent employer’s benefit plans, in which case the Company may reduce
the coverage of any benefits it is required to provide Employee hereunder as
long as the aggregate coverage of the combined benefit plans is no less
favorable to Employee, in terms of amounts and deductibles and costs to her,
than the coverage required to be provided hereunder. This subsection
(iii) shall not be interpreted so as to limit any benefits to which
Employee or his dependents may be entitled under any of the Company’s employee
benefit plans, programs or practices following Employee’s termination of
employment, including without limitation, retiree medical and life insurance
benefits.

        (c)   Payment.  The amounts
provided for in Sections 8(a) and 8(b)(i) and (ii) shall be paid
within five (5) days after Employee’s Termination Date.

        [(d)   Offsets.  The amount
of any payment provided for in this Agreement shall be offset or reduced by the
amount of any compensation or benefits provided to Employee in any subsequent
employment.]

        (e)    Acceleration of Vesting.    If
Employee’s employment is terminated by the Company following a Change in
Control, all then unvested restricted stock and stock options shall vest as of
the date Employee’s Termination Date.

        9.    Employee
Covenants.

        (a)    Non-Solicit.    Employee
will not, directly or indirectly (whether for compensation or otherwise), alone
or in concert with others, for the Non-Solicit Period (defined below),
(a) solicit for employment any employee of the Company or any person who
was an employee of the Company during any part of the two (2) year period
preceding Employee’s termination or otherwise encourage any employee to leave
the Company’s employ, or (b) solicit any client or customer of the Company
or any client or customer which was a client or customer of the Company during
any part of the two (2) year period preceding Employee’s termination. The “Non-Solicit Period”
means the term of this Agreement plus one (1) year from the end thereof.

        (b)    Non-Compete.    During
the term of the Agreement, Employee will not, directly or indirectly (whether
for compensation or otherwise), alone or in concert with others, own, manage,
operate, join, control, or participate in the ownership, management, operation,
or control of, or furnish any capital to, or be connected in any manner with
(whether alone or as a partner, officer, director, employee, agent or
shareholder), or provide any advice or services as a consultant for, any business
which competes with the Company’s business or that of any subsidiary,
partnership, corporation, joint venture, or other similar entity of which the
Company is a shareholder, partner, or member as such business may be conducted
from time to time. Notwithstanding the foregoing, Employee may be a

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passive
investor in a business which competes with the Company’s business, provided
Employee’s equity holding does not exceed 2% of such business.

        (c)    Proprietary Information.    The
Company possesses and will continue to possess information that has been
created, discovered, or developed, or has otherwise become known to the Company
(including without limitation information created, discovered, developed, or
made known by or to Employee during the period of or arising out of his
employment by the Company), or in which property rights have been assigned or
otherwise conveyed to the Company, which information has commercial value in
the business in which the Company is engaged (all of the aforementioned
information is hereinafter called “Proprietary Information”; by way of
illustration, but not limitation, Proprietary Information includes trade
secrets, processes, formulae, data and know-how, improvements, inventions,
manufacturing and other techniques, marketing plans, strategies, forecasts, and
customer lists). All Proprietary Information will be the sole property of the
Company and its assigns, and the Company and its assigns will be the sole owner
of all patents and other rights in connection therewith. Employee hereby
assigns to the Company any rights she may have or acquire in all Proprietary
Information. At all times, both during her employment by the Company and after
its termination, Employee shall keep in confidence and trust all Proprietary
Information, and she shall not use or disclose any Proprietary Information or
anything relating to it, for any commercial purpose or otherwise, without the
written consent of the Company, except as may be (i) reasonably necessary
or appropriate in the ordinary course of performing her duties as an employee
of the Company, (ii) known generally to the public (or than as a result of
disclosure by Employee in violation of this Section 9(c)), or
(iii) legally required. In furtherance of the foregoing agreements,
Employee agrees to execute and deliver simultaneously herewith a Proprietary
Information and Inventions Agreement in the form attached hereto as
Exhibit A. The Company is permitted to notify any future employer of
Employee of Employee’s covenants set forth in this Section 9.

        10.    Settlement
of Claims.    The Company’s obligation to
make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the Company may have against Employee or others.

        11.    Non-exclusivity
of Rights.    Nothing in this Agreement
shall prevent or limit Employee’s continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its subsidiaries and for which Employee may qualify, nor shall anything
herein limit or reduce such rights as Employee may have under any other
agreements with the Company or any of its subsidiaries. Amounts which are
vested benefits or which Employee is otherwise entitled to receive under any
plan or program of the Company or any of its subsidiaries shall be payable in
accordance with such plan or program, except as explicitly modified by this
Agreement.

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        12.    Arbitration.

        (a)    Procedure.    Any
controversy or claim arising out of or relating to this Agreement, or the
breach thereof, will be settled by arbitration in accordance with the
Commercial Rules of the American Arbitration Association (“AAA”), and those
provisions of the AAA Employment Arbitration Rules determined by the
arbitrators as necessary under applicable law. The arbitration will be binding
and judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof. For controversies or claims involving
employment matters only, there will be one (1) arbitrator mutually
selected by the parties within ten (10) business days from the date of
notification made to one of the parties of the other party’s request for
arbitration. If the parties fail to agree upon an arbitrator within such ten
(10) days, the AAA will promptly appoint the arbitrator in accordance with
its rules. For all other controversies or claims, there will be three
(3) arbitrators, one arbitrator selected by the Company and one arbitrator
selected by Employee, which arbitrators will then jointly select the third
arbitrator. If any party fails to nominate an arbitrator within thirty
(30) days from the date of notification made to it of a party’s request
for arbitration, then the AAA will appoint the arbitrator in accordance with
its rules. The place of the arbitration will be Los Angeles, California. All
arbitrators will have at least ten (10) years experience in commercial or
employment-related transactions. The arbitration will commence within sixty
(60) days after appointment of the arbitrators and will continue
uninterrupted, unless otherwise suspended by the arbitrators for good cause,
for not longer than one hundred twenty (120) days (including without
limitation any discovery permitted by the arbitrators). The arbitrators will,
within such one hundred twenty (120) day period, render a written decision
with findings of fact and conclusions of law and deliver such decision to the
parties.

        (b)    Judicial Relief.    Notwithstanding
Section 12(a), nothing contained in this Agreement will prevent or be
construed to prevent any party from seeking a temporary restraining order,
preliminary injunction, other form of interim, provisional, or temporary
equitable relief, or the enforcement of any award delivered pursuant to
Section 12(a) in any court of competent jurisdiction.

        13.    Fees and
Expenses.    The Company and Employee shall
each pay their respective legal fees and related expenses (including the costs
of experts, evidence and counsel) incurred as a result of (i) Employee’s
termination of employment (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination of employment),
(ii) Employee’s hearing before the Board as contemplated in
Section 7(a)(3) of this Agreement, or (iii) Employee’s seeking to
obtain or enforce any right or benefit provided by this Agreement or by any
other plan or arrangement maintained by the Company under which Employee is or
may be entitled to receive benefits.

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        14.    Survival.    In
the event that Employee’s employment by the Company is terminated pursuant to
the provisions set forth under Section 7 hereof or otherwise, this
Agreement shall then also terminate; provided, however, that the rights and
obligations set forth under Sections 8, 9, 12 and 13 of this Agreement shall
survive until such rights and obligations are fully satisfied in accordance
with the terms set forth herein.

        15.    Miscellaneous.

        (a)    Amendment; Waiver.    This
Agreement may not be amended or otherwise modified or its provisions waived
except by an instrument in writing signed, in the case of an amendment or
modification, by all parties hereto and, in the case of waiver, by the party
sought to be charged. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time.

        (b)    Severability.    In
the event that any one or more of the provisions of this Agreement are held to
be invalid, illegal, or unenforceable by a court of competent jurisdiction in a
jurisdiction, such invalidity, illegality, or unenforceability in such
jurisdiction will not affect any of the other provisions hereof, which will
nevertheless remain in full force and effect, and this Agreement will be
construed as if such invalid, illegal, or unenforceable provision had never
been contained herein, and such determination will have no effect on this
Agreement in any other jurisdiction.

        (c)    Successors and Assigns.

        (1)    Company.    This
Agreement shall be binding upon and shall inure to the benefit of the Company,
its successors and assigns and the Company shall require any successor or
assign to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession or assignment had taken place. The term “the Company” as
used herein shall include such successors and assigns. The term “successors and
assigns” as used herein shall mean a corporation or other entity acquiring all
or substantially all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.

        (2)    Employee.    Neither
this Agreement nor any right or interest hereunder shall be assignable or
transferable by Employee, his beneficiaries or legal representatives, except by
will or by the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by Employee’s legal personal representative.

 13
 

        (d)    Third Party Beneficiaries.    This
Agreement is for the sole benefit of the parties hereto and their respective
successors-in-interest and permitted assigns. No other person is entitled to
rely upon or receive any benefit from this Agreement.

        (e)    Entire Agreement.    This
Agreement, the Proprietary Information and Inventions Agreement, and the other
documents and certificates delivered pursuant to the terms hereof, constitute
the entire agreement of the parties hereto in respect of the transactions
contemplated herein. There are no restrictions, promises, representations,
warranties, covenants, or undertakings, other than those expressly set forth or
referred to herein. This Agreement supersedes all prior discussions,
negotiations, correspondence, agreements, and understandings between the
parties with respect to the transactions contemplated herein.

        (f)    Notice.    For
the purposes of this Agreement, notices and all other communications provided
for in the Agreement (including the Notice of Termination) shall be in writing
and shall be deemed to have been duly given when personally delivered or sent
by certified mail, return receipt requested, postage prepaid, addressed to the
respective addresses last given by each party to the other, provided that all
notices to the Company shall be directed to the attention of the Board with a
copy to the Secretary of the Company. All notices and communications shall be
deemed to have been received on the date of delivery thereof or on the third
business day after the mailing thereof, except that notice of change of address
shall be effective only upon receipt.

        (g)    Counterparts.    This
Agreement may be executed in two or more counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.

        (h)    Captions.    The
headings of the sections of this Agreement are inserted for convenience of
reference only, do not constitute a part hereof, and do not affect in any way
the meaning, interpretation, or enforcement of this Agreement.

        (i)    Governing Law.    This
Agreement and the rights and obligations of the parties hereunder will be
governed by, and construed and interpreted in accordance with, the laws of the
State of California without giving effect to the choice of law provisions
thereof. Solely for the purposes relating to seeking equitable relief set forth
in Section 12 hereof, each party submits to the non-exclusive jurisdiction
of the federal or state courts located in California with respect to any claim
or matter arising under this Agreement.

[Signature
Page Follows]

 14
 

        IN WITNESS WHEREOF, the Company has caused
this Agreement to be executed by its duly authorized officer and Employee has
executed this Agreement as of the Start Date. 

	
  

  	
   

  	
  BIDZ.COM, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  By:

  	
  /s/ David Zinberg

  	
   

  
	
   

  	
   

  	
   

  	
  David Zinberg

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Lawrence
  Kong

  	
   

  	
   

  	
   

  
	
  Lawrence Kong

  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EMPLOYEE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Claudia C.
  Liu

  	
   

  	
   

  	
   

  
	
  Claudia C. Liu

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 15
 

EXHIBIT
A

PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT

(“AGREEMENT”)

        A.    I
recognize that BIDZ.com, Inc. (the “Company”), a Delaware corporation, is
engaged in a continuous program of research, development, and production
respecting its present and future business.

        B.    I
understand that as part of my employment by the Company I am expected to make
new contributions and inventions of value to the Company;

        C.    I
understand that my employment creates a relationship of confidence and trust
between me and the Company with respect to any information (i) applicable
to the business of the Company or (ii) applicable to the business of any
client or customer of the Company which may be made known to me by the Company
or by a client or customer of the Company, or learned by me during the period
of my employment;

        D.    I
understand that the Company possesses and will continue to possess information
that has been created, discovered, or developed, or has otherwise become known
to the Company (including without limitation information created, discovered,
developed, or made known by or to me during the period of or arising out of my
employment by the Company), or in which property rights have been assigned or
otherwise conveyed to the Company, which information has commercial value in
the business in which the Company is engaged (all of the aforementioned
information is hereinafter called “Proprietary Information”; by way of illustration,
but not limitation, Proprietary Information includes trade secrets, processes,
formulae, data and know-how, improvements, inventions, manufacturing and other
techniques, marketing plans, strategies, forecasts, and customer lists); and

        E.    I
understand that, as used herein, the period of my employment includes any time
in which I may be retained by the Company as an employee or as a consultant.

        In
consideration of my employment and the compensation received by me from the
Company from time to time, I hereby represent and agree as follows.

        1.     Prior
to entering the employ of the Company, I have terminated employment with one or
more prior employers. I represent that my performance of all the terms of this
Agreement and as an employee of the Company does not and will not breach any
agreement to keep in confidence proprietary information acquired by me in
confidence or in trust prior to my employment by the Company. I have not
entered into, and I agree that I shall not enter into, any agreement either
written or oral in conflict herewith.

 16
 

        2.     I
understand, as part of the consideration for the offer of employment extended
to me by the Company and of my employment or continued employment by the
Company, that I have not brought and shall not bring with me to the Company or
use in the performance of my responsibilities at the Company any materials or
documents of a former employer which are not generally available to the public,
unless I have obtained written authorization from the former employer for their
possession and use. Accordingly, I advise the Company that the only materials
or documents of a former employer which are not generally available to the
public that I have brought or shall bring to the Company or have used or shall
use in my employment are identified on Attachment I hereto, and, as to each
such item, I represent that I have obtained prior to the effective date of my
employment with the Company written authorization for their possession and use
in my employment with the Company. I also understand that, in my employment
with the Company, I am not to breach any obligation of confidentiality that I
have to former employers, and I agree that I shall fulfill all such obligations
during my employment with the Company.

        3.     I
agree to indemnify and hold harmless the Company, its stockholders, directors,
officers, employees, and agents against any and all liabilities and expenses,
including amounts paid in settlement, incurred by any of them in connection
with any claim by any of my prior employers that the termination of my
employment with such employer, my employment by the Company, or use of any
skills and knowledge by the Company is a violation of contract or law.

        4.     All
Proprietary Information will be the sole property of the Company and its
assigns, and the Company and its assigns will be the sole owner of all patents
and other rights in connection therewith. I hereby assign to the Company any
rights I may have or acquire in all Proprietary Information. At all times, both
during my employment by the Company and after its termination, I shall keep in
confidence and trust all Proprietary Information, and I shall not use or
disclose any Proprietary Information or anything relating to it without the
written consent of the Company, except as may be (i) reasonably necessary
or appropriate in the ordinary course of performing my duties as an employee of
the Company, (ii) known generally to the public (or than as a result of
disclosure by me in violation of this Section 4), or (iii) legally
required.

        5.     In
the event of the termination of my employment by me or by the Company for any
reason or no reason, I shall deliver to the Company all documents and data of
any nature pertaining to my work with the Company and I shall not take with me
any documents or data of any description or any reproduction of any description
containing or pertaining to any Proprietary Information.

        6.     I
shall promptly disclose to the Company, or any persons designated by it, all
improvements, inventions, formulae, processes, techniques, know-how, and data,
whether or not patentable, made or conceived or reduced to practice or learned
by me, either alone or jointly with others, during the period of my employment
which are related to or useful in the business of the Company, or result from
tasks assigned me by the Company, or result from use of premises owned, leased,
or contracted for by the Company (all said

 17
 

improvements, inventions, formulae, processes,
techniques, know-how, and data will be collectively hereinafter called “Inventions”).

        7.     I
agree that all Inventions will be the sole property of the Company and its
assigns, and the Company and its assigns will be the sole owner of all patents
and other rights in connection therewith. I hereby assign to the Company any
rights I may have or acquire in all Inventions. I further agree as to all
Inventions to assist the Company in every proper way (but at the Company’s
expense) to obtain and from time to time enforce patents on Inventions in any
and all countries, and to that end I shall execute all documents for use in
applying for and obtaining such patents thereon and enforcing same, as the
Company may desire, together with any assignments thereof to the Company or
persons designated by it. My obligation to assist the Company in obtaining and
enforcing patents for Inventions in any and all countries will continue beyond
the termination of my employment, but the Company will compensate me at a
reasonable rate after such termination for time actually spent by me at the
Company’s request on such assistance.

        I
understand that, in accordance with Section 2872 of the California Labor
Code, the assignment provisions in this paragraph 7 do not apply to
inventions for which no equipment, supplies, facility, or trade secret
information of the Company was used, which were developed entirely on my own
time, and (i) which do not relate (a) to the business of the Company
or (b) to the Company’s actual or demonstrably anticipated research or
development or (ii) which do not result from any work performed by me for
the Company.

        8.     I
have identified on Attachment II hereto all inventions or improvements relevant
to the subject matter of my employment by the Company which have been made or
conceived or first reduced to practice by me alone or jointly with others prior
to my engagement by the Company which I desire to remove from the operation of
this Agreement; and I covenant that such list is complete. If there is no such
list on Attachment II, I represent that I have made no such inventions and
improvements at the time of signing this Agreement.

        9.     I
agree that in addition to any other rights and remedies available to the
Company for any breach by me of my obligations hereunder, the Company will be
entitled to enforcement of my obligations hereunder by court injunction.

        10.   If
any provision of this Agreement is declared invalid, illegal or unenforceable,
such provision shall be severed and all remaining provisions will continue in
full force and effect.

        11.   This
Agreement will become effective as of the commencement of my employment with
the Company.

        12.   This
Agreement is binding upon me, my heirs, executors, assigns and administrators
and shall inure to the benefit of the Company, its successors and assigns.

 18
 

        13.   This
Agreement will be governed in all respects by the laws of the State of
California. 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
  February 21,
  2007

  	
   

  	
   

  	
  /s/ Claudia C. Liu

  	
   

  
	
  Dated:

  	
   

  	
  Claudia C. Liu

  

 

ACCEPTED AND AGREED TO:

BIDZ.com, Inc.,

a Delaware corporation 

	
  By:

  	
  /s/ David Zinberg

  	
   

  
	
   

  	
  David Zinberg

  
	
   

  	
  Chief Executive Officer

  

 

 19
 

ATTACHMENT
I

Materials
or Documents of Former Employer

Not Generally Available to Public

 20
 

ATTACHMENT
II

Inventions
or Improvements Made Prior

to Engagement by Company

 21Exhibit
10.24

SUMMARY
OF BASIC LEASE TERMS

1.                             Tenant: 
SpectraLink Corporation

(a)                         Tenant’s entity and jurisdiction: a Delaware
corporation

(b)                        Tenant’s federal taxpayer identification
number:  84-1141188

2.                             Building:

(a)                         Address: 
6175 Longbow Drive, Boulder, Colorado 80301

(b)                        Type: 
Multi-Tenant Warehouse

(c)                         Approx. total rentable area:  52,624 square feet

3.                             Premises:

(a)                         The entire first floor and a portion of the
second floor

(b)                        Approx. Rentable Area:  36,125 square feet ±

4.                             Lease Term:

(a)                         Initial Term: 
6 Years, 3 Months (i.e., 75 months total)

(b)                        Commencement Date:  January 1, 2006, or the first day of the
month following such date as the Premises are ready for occupancy

(c)                         Expiration Date: 
the last day of the 75th month following the Commencement Date

5.                             Base Rent:

(a)                         Rent Commencement Date:  the first day of the 19th month
following the Commencement Date

(b)                        Monthly Rent: 
$13,546.88/month first 12 months ($4.50/sf NNN), with annual increases
by the greater of 3% or CPI Escalator, but no greater than 5%, pursuant to the
following estimated schedule (based on 3% increase assumption):

	
  Months

  	
   

  	
  Annual Base Rent

  	
   

  	
  Monthly Rent

  
	
  Months 1-12

  	
   

  	
  $4.50

  	
   

  	
  Abated

  
	
  Months 13-18

  	
   

  	
  $4.64

  	
   

  	
  Abated

  
	
  Months 19-24

  	
   

  	
  $4.64

  	
   

  	
  $13,968.33

  
	
  Months 25-36

  	
   

  	
  $4.78

  	
   

  	
  $14,389.79

  
	
  Months 37-48

  	
   

  	
  $4.92

  	
   

  	
  $14,811.25

  
	
  Months 49-60

  	
   

  	
  $5.07

  	
   

  	
  $15,262.81

  
	
  Months 61-72

  	
   

  	
  $5.22

  	
   

  	
  $15,714.38

  
	
  Months 73-75

  	
   

  	
  $5.38

  	
   

  	
  $16,196.04

  

**             Tenant
shall pay to Landlord three months’ Base Rent (based upon the 3% estimated rate
for Months 19-21) in the amount of $41,904.99, within three business days after
execution of this Lease.  Such amount
shall be applied by Landlord to Monthly Rent due in Months 19, 20 and 21.

6.                             Additional Rent:

(a)                         Tenant’s Pro Rata Share for Additional Rent:       68.65% (36,125sf/52,624sf)

(b)                        Estimated Additional
Rent:       $8,278.65/month ($2.75/sf)

7.                             Security Deposit Amount:  $13,546.88

 i
 

8.                             Place for Payments: Longbarrel Property Limited Partnership

3946
Promontory Court

Boulder, CO 80304

9.                             Place for Notices:

Landlord:

	
  Longbarrel Property Limited
  Partnership

  	
   

  	
  with a copy to:

  	
   

  	
  Packard and Dierking, LLC

  
	
  3946 Promontory
  Court

  	
   

  	
   

  	
   

  	
  2595 Canyon Blvd., Suite 200

  
	
  Boulder, CO
  80304

  	
   

  	
   

  	
   

  	
  Boulder, CO 80302

  
	
   

  	
   

  	
   

  	
   

  	
  Attn: Bruce D.
  Dierking, Esq.

  

 

Tenant:

SpectraLink
Corporation

5755 Central Avenue

Boulder, CO 80301

Attn:  VP & General Counsel

10.                                 Permitted Use(s) by Tenant:  Manufacturing, warehouse and accessory
offices.

11.                                 Broker(s):               Landlord’s
Broker:  Paul Kresge, The Colorado Group

                                                                                Tenant’s
Broker:  Paul Whiteside/Russ Lee,
NewOption Partners, LLC

12.                                 Utilities:         To
be contracted for and paid directly by Tenant so long as Tenant is the only tenant
in the Building.  In the

                                                                        event
the Building becomes multi-tenant, Landlord shall take over any utilities that
are not separately metered,

                                                                        and
the costs therefor shall be included in Common Facilities Charges.

13.                                 Janitorial:       To
be contracted for and paid directly by Tenant with respect to the
Premises.  Any common area janitorial to

                                                                        be
provided by Landlord and the costs therefor included in Common Facilities
Charges.

14.                                 Tenant Finish: 
To be completed in accordance with the Work Letter attached hereto as Exhibit
D

 

 ii

 

LEASE

This Lease is made this         
day of September, 2005, between LONGBARREL PROPERTY LIMITED PARTNERSHIP, a
Colorado limited partnership (“Landlord”), whose address is 3946 Promontory
Court, Boulder, Colorado 80304, and SPECTRALINK CORPORATION, a Delaware
corporation (“Tenant”), whose current address is 5755 Central Avenue, Boulder,
Colorado 80301.

ARTICLE
1

GENERAL

1.1   Consideration.  Landlord enters into this Lease in
consideration of the payment by Tenant of the Rents herein reserved and the
keeping, observance and performance by Tenant of the covenants and agreements
of Tenant herein contained.

1.2   Exhibits and Addenda to
Lease.  The Attachments and Exhibits
listed below shall be attached to this Lease and be deemed incorporated in this
Lease by this reference.  In the event of
any inconsistency or conflict between such Attachments and Exhibits and the
terms and provisions of this Lease, the terms and provisions of the Attachments
and Exhibits shall control.  The
Attachments and Exhibits to this Lease are:

	
  Summary of Basic Lease Terms 

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Legal Description of Land

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  Location of Premises

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  Notice of Non-Liability for Mechanics’ Liens

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  Work Letter

  	
   

  	
   

  	
   

  	
   

  

 

ARTICLE
2

DEFINITIONS; DEMISE OF PREMISES

2.1   Demise.  Subject to the provisions, covenants and
agreements herein contained, Landlord hereby leases and demises to Tenant, and
Tenant hereby leases from Landlord, the Premises as hereinafter defined, for
the Lease Term as hereinafter defined, subject to existing covenants,
conditions, restrictions, easements and encumbrances affecting the same.

2.2   Premises.  The “Premises” shall mean the space to be
occupied by Tenant as depicted on Exhibit B attached hereto.  The Premises are within the Building that is
located on the Land, as the terms “Building” and “Land” are hereinafter
defined.

2.3   Square Footage and
Address.  The Premises contains
approximately the rentable floor area set forth in the Summary of Basic Lease
Terms.  The address of the Premises is
the address set forth in the Summary of Basic Lease Terms.

2.4   Land.  “Land” shall mean the parcel of real property
more particularly described in Exhibit A attached hereto, as the
same may be replatted, resubdivided or adjusted from time to time by Landlord
in its sole discretion.

2.5   Building.  “Building” shall mean the building or
buildings constructed on the Land, as the same may be expanded, remodeled,
reconstructed or otherwise modified from time to time by Landlord in its sole 

discretion, currently containing approximately the
number of square feet of interior floor area set forth on the Summary of Basic
Lease Terms.  If there is more than one
building constructed on the Land, the term “Building” shall mean collectively
all buildings constructed upon the Land.

2.6   Improvements.  “Improvements” shall mean the Building, the
Parking Area as hereinafter defined, and all other fixtures and improvements on
the land, including landscaping thereon.

2.7   Property.  “Property” shall mean the Land, the Building
and the Improvements and any fixtures and personal property used in operation
and maintenance of the Land, Building and Improvements other than fixtures and
personal property of Tenant and other users of space in the Building.

2.8   Common Facilities.  “Common Facilities” shall mean all of the
Property except (a) the Premises, and (b) the other premises in the Building
leased or held for lease to other tenants that are not intended to be used in
common by Tenant and other tenants, if any. 
Common Facilities shall include, without limitation, the Parking Area
and any walks, driveways, and, if applicable, lobby areas, halls, stairs,
elevators, utility rooms and janitorial closets designed for common use of
Tenant and other users of space in the Building.

2.9   Parking Area.  “Parking Area” shall mean that portion of the
Land that is or is to be paved and otherwise improved or designated unimproved
land for the parking of motor vehicles.

2.10 Use of Common Facilities
and Parking Area.  Tenant is hereby
granted the non-exclusive right and license to use, in common with others
entitled to such use, the Common Facilities, as they from time to time exist,
subject to the rights of Landlord reserved herein.  Tenant shall not interfere, at any time, with
the rights of Landlord and others entitled to use any part of the Common
Facilities, and shall not store, either permanently or temporarily, any
materials, supplies or equipment on the Common Facilities. Landlord shall have
the right, at any time, to change, reduce or otherwise alter the Common
Facilities, in its sole discretion and without compensation to Tenant;
provided, however, Landlord shall provide reasonable parking in the Parking
Areas in accordance with this Section 2.10, loading areas and access to the
Premises to Tenant.  Tenant shall not
have the right to sublease or grant any rights to third parties to use the
Parking Area.  Landlord shall not be
responsible for any injuries to any person nor any damage to any automobile,
vehicle or other property that occurs in or about the Parking Area, unless such
injuries or damage are caused by or are due to the gross negligence or willful
misconduct of Landlord or Landlord’s agents.

2.11 Covenant of Quiet
Enjoyment.  Landlord covenants and
agrees that, provided Tenant is not in default and keeps, observes and performs
the covenants and agreements of Tenant contained in this Lease, Tenant shall
have quiet and peaceable possession of the Premises and such possession shall
not be disturbed or interfered with by Landlord or by any person claiming by,
through or under Landlord.

2.12 Condition of Premises.  Tenant covenants and agrees that, upon taking
possession of the Premises, Tenant shall be deemed to have accepted the
Premises “as is” and Tenant shall be deemed to have waived any warranty of
condition or habitability, suitability for occupancy, use or habitation,
fitness for a particular purpose or merchantability, express or implied,
relating to the Premises.

 2
 

ARTICLE 3

TERM OF LEASE

3.1   Lease Term.  “Lease Term” and “Term” shall mean the period
of time specified in the Summary of Basic Lease Terms commencing at midnight on
the Commencement Date as specified in the Summary of Basic Lease Terms and
expiring at midnight on the Expiration Date, as specified in the Summary of
Basic Lease Terms.

3.2   Early Occupancy or Entry.  In the event Landlord permits Tenant or its
agents or contractors to occupy or enter the Premises for any reason prior to
the Commencement Date, Tenant shall be subject to all terms and provisions
hereof.

ARTICLE
4

RENT AND OTHER AMOUNTS PAYABLE

4.1   Base Rent.  Tenant covenants and agrees to pay to
Landlord, without offset, deduction or abatement, Base Rent for the full Lease
Term in the amounts specified as Base Rent in the Summary of Basic Lease Terms
(“Base Rent”).

The amount of Base Rent shall
be increased annually by the greater of (a) three percent (3%) or (b) the “CPI
Escalator” (defined below), but no greater than five percent (5%), on each
anniversary of the Commencement Date during the Term.  As used herein and in the Summary of Basic
Lease Terms, the term “CPI Escalator” shall refer to the following formula:

The increase in the United States Department of Labor,
Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers
(Denver-Boulder, Colorado area, 1982-1984 = 100) (“CPI”) between (i) the most
recently published CPI prior to the date which is three months prior to the
relevant anniversary date of the Lease (the “Comparison Date”) and (ii) the
most recently published CPI prior to the date which is one year prior to the
Comparison Date.

Under
no circumstances will the Base Rent be reduced. 
Landlord shall notify Tenant of the amount of each increase in Base Rent
by written notice.  If the Base Rent is
increased by the CPI Escalator, such notice shall include the CPI for the
Comparison Date and for the date that is one year prior to the Comparison Date.  If the format or components of the CPI are
materially changed, Landlord shall substitute an index which is published by
the Bureau of Labor Statistics or a similar agency and which is most nearly
equivalent to the CPI on the Commencement Date.

In
the event Landlord has not given Tenant a written statement setting forth the
amount of the increase in Base Rent for a given year by the applicable
anniversary of the Commencement Date, Tenant shall continue to pay Base Rent in
the same amount applicable during the prior year until such time as Landlord
has provided Tenant with such written statement.  Within 10 days after Landlord provides such
written statement, Tenant shall pay to Landlord the aggregate amount of
additional Base Rent owed from the anniversary date based upon the increase in
Base Rent applicable for such year.

4.2   Monthly Rent.  Base Rent shall be payable monthly in
advance, without notice, in equal installments, together with installments of
Additional Rent, in the amounts specified in the Summary of Basic Lease Terms (“Monthly
Rent”).  Three monthly installments in
the total amount of $41,904.99 shall be due and payable
on the date hereof and a monthly installment shall be due and payable on or
before the 

 3
 

first day of the 22nd calendar month succeeding the Commencement
Date as provided in the Summary of Basic Lease Terms during the Term, except
that the rental payment for any fractional calendar month at the commencement
or end of the Lease Term shall be prorated based on a 30-day month.  All other amounts due and payable by Tenant
hereunder shall be payable as of the Commencement Date, unless otherwise
provided herein.

4.3   Place of Payments.  Base Rent and all other sums payable by
Tenant to Landlord under this Lease shall be paid to Landlord at the place for
payments specified in the Summary of Basic Lease Terms, or such other place as
Landlord may, from time to time, designate in writing.

4.4   Lease a Net Lease and
Rent Absolute.  It is the intent of the
parties that the Base Rent provided in this Lease shall be a net payment to
Landlord; that, except as otherwise expressly provided herein, the Lease shall
continue for the full Lease Term notwithstanding any occurrence preventing or
restricting use and occupancy of the Premises, including any damage or
destruction affecting the Premises, and any action by governmental authority
relating to or affecting the Premises; that the Base Rent shall be absolutely
payable without offset, reduction or abatement for any cause except as
otherwise specifically provided in this Lease; that Landlord shall not bear any
costs or expenses relating to the Premises or provide any services or do any
act in connection with the Premises except as otherwise specifically provided
in this Lease; and that Tenant shall pay, in addition to Base Rent, Additional
Rent to cover costs and expenses relating to the Premises, the Common
Facilities and the Property, all as hereinafter provided.

4.5   Additional Rent.  As of the Commencement Date, Tenant covenants
and agrees to pay, as Additional Rent, all costs and expenses relating to the
Premises including utilities, maintenance and repair thereof; Tenant’s Pro Rata
Share of all operating costs and operating expenses relating to the Common
facilities, including but not limited to the repair and maintenance thereto
described in Section 7.2 hereof; Tenant’s Pro Rata Share of all Taxes and
Assessments and costs and expenses of Casualty Insurance; all costs and
expenses of Liability Insurance and Other Insurance; and all other costs and
expenses that Tenant is obligated to pay under this Lease.

4.6   Tenant’s Pro Rata Share.  “Tenant’s Pro Rata Share” shall mean the
percentage set forth in the Summary of Basic Lease Terms as Tenant’s Pro Rata
Share, which is the percentage derived by dividing the approximate rentable
floor area of the Premises, as set forth in the Summary of Basic Lease Terms,
by the approximate rentable floor area within the Building, as set forth in the
Summary of Basic Lease Terms.  The
percentage set forth in the Summary of Basic Lease Terms shall be conclusive
and not subject to adjustment for remeasurement of the area of the Premises or
the Building.  Landlord may modify Tenant’s
Pro Rata Share from time to time based upon any increase or reduction in the
rentable floor area of the Building or of the Premises.

4.7   Monthly Deposits for
Taxes, Insurance and Common Facilities Charges.  Tenant will pay to Landlord, monthly in
advance, without notice, on or before the first day of each month of the Term,
amounts as hereinafter specified, for payment of Tenant’s Pro Rata Share of
Taxes and Assessments (defined in Section 5.1), “Casualty Insurance” (defined
in Section 6.1), Landlord liability insurance, if applicable (defined in
Section 6.2),  “Common Facilities Charges”
(defined in Section 7.2), and any other charges payable with respect to the Property
hereunder as Additional Rent (collectively “Monthly Deposits”) and, if the
Monthly Deposits are insufficient to pay Tenant’s Pro Rata Share of the actual
cost of such items, Tenant will pay to Landlord, within 10 days after written
demand by Landlord, such amounts as are necessary to provide Landlord with
sufficient funds to pay Tenant’s Pro Rata Share of the same.  The Monthly Deposits shall each be equal to
Tenant’s Pro Rata Share of 1/12 of the amounts, as reasonably estimated and re-estimated
from time to time by Landlord, of the annual Taxes and Assessments, annual 

 4
 

Casualty Insurance premiums, annual Landlord liability
insurance premiums, and annual Common Facilities Charges payable with respect
to the Property.  The initial Monthly
Deposit shall be subject to adjustment as herein provided.  To the extent the Monthly Deposits exceed
Tenant’s Pro Rata Share of the actual cost of such items, the excess amount
shall, at Landlord’s option, except as may be otherwise provided by law, either
be paid to Tenant or credited against future Monthly Deposits or against Base
Rent, Additional Rent or other amounts payable by Tenant under this Lease.   If Tenant so requests in writing within 30
days after the date of Landlord’s annual reconciliation of Monthly Deposits,
Landlord shall furnish Tenant with a copy of invoices or receipts for Taxes,
Insurance and Common Facilities Charges. 
The amounts of such taxes, insurance premiums and expenses payable by
Tenant for the years in which the Lease Term commences and expires shall be
subject to the provisions hereinafter contained in this Lease for proration of
such amounts in such years.  Prior to the
dates on which payment is due for such items, Landlord shall make payment of
the same, to the extent funds from Monthly Deposits are available therefor.
Except for Landlord’s obligation to make payments out of funds available from
Monthly Deposits, the making of Monthly Deposits by Tenant shall not limit or
alter Tenant’s obligation to pay taxes and assessments and to maintain
insurance as elsewhere provided in this Lease.

4.8   Security Deposit.  Upon execution of this Lease by Tenant,
Tenant shall deposit with Landlord the amount specified as a security deposit
in the Summary of Basic Lease Terms (“Security Deposit”).  Landlord shall (i) retain and apply the
Security Deposit to the extent necessary, to pay and cover any loss, cost,
damage or expense, including attorneys’ fees, sustained by Landlord by reason
of the failure of Tenant to comply with any provision, covenant or agreement of
Tenant contained in this Lease.  To the
extent not necessary to cover such loss, cost, damage or expense, the Security
Deposit, without any interest thereon, shall be returned to Tenant within 60
days after expiration of the Lease Term or as may be otherwise provided by law;
provided, however, that Landlord may
also deduct any amount from the Security Deposit Landlord estimates may be
required to cover any shortfall in Additional Rent deposits made by Tenant in
the final year of the Lease until such time as Landlord has completed its
annual Additional Rent reconciliation for such year.  The Security Deposit shall not be considered
as an advance payment of rent or as a measure of the loss, cost, damage or
expense that is or may be sustained by Landlord.  In the event all or any portion of the
Security Deposit is applied by Landlord to pay any such loss, cost, damage or
expense, Tenant shall, from time to time, promptly upon demand, deposit with
Landlord such amounts as may be necessary to replenish the Security Deposit to
its original amount.

4.9   General Provisions as to
Security Deposit.  Landlord shall not
be required to hold the Security Deposit in an escrow or trust deposit account,
and Landlord may commingle the Security Deposit with Landlord’s own funds.  Landlord shall not be obligated to pay
interest to Tenant on account of the Security Deposit.  In the event of a transfer by Landlord of
Landlord’s interest in the Premises, Landlord or the property manager of
Landlord may deliver the Security Deposit to the transferee of Landlord’s
interest and Landlord and such property manager shall thereupon be discharged
from any further liability to Tenant with respect to such Security
Deposit.  In the event of a transfer by
Tenant of Tenant’s interest in the Premises, Landlord shall be entitled to
return the Security Deposit to Tenant’s successor in interest and Landlord
shall thereupon be discharged from any further liability with respect to the
Security Deposit.

4.10 Rent Regulations.  If the Base Rent or any other amounts to be
paid by the Tenant to the Landlord hereunder is or becomes at any time subject
to regulation by law, then the rent or other amounts to be so paid shall be the
maximum rental or other amounts permitted by said laws, but in no event in
excess of the rent or other amounts provided for or determined in accordance
with the applicable provisions of this Lease.

 5
 

ARTICLE 5

TAXES AND ASSESSMENTS

5.1   Covenant to Pay Taxes and Assessments.  Tenant covenants and
agrees to pay, as Additional Rent, Tenant’s Pro Rata Share of Taxes and
Assessments, as hereinafter defined, which accrue during or are attributable to
the Lease Term.  “Taxes and Assessments”
shall mean all taxes, assessments or other impositions, general or special,
ordinary or extraordinary, or every kind or nature, which may be levied,
assessed or imposed upon or with respect to the Property or any part thereof,
or upon any building, improvements or personal property at any time situated
thereon.

5.2   Proration
at Commencement and Expiration of Term. 
Taxes and Assessments shall be prorated between Landlord and Tenant for
the year in which the Lease Term commences and for the year in which the Lease
Term expires as of, respectively, the Commencement Date and the Expiration
Date, except as herein provided. 
Additionally, for the year in which the Lease Term expires, Tenant shall
be liable without proration for the full amount of Taxes and Assessments
relating to any improvements, fixtures, equipment or personal property which
Tenant is required to remove or in fact removes as of the expiration of the
Lease Term.  Proration of Taxes and
Assessments shall be made on the basis of actual Taxes and Assessments.  Tenant’s Pro Rata Share of Taxes and
Assessments for the years in which the Lease Term commences and expires shall
be paid and deposited with the Landlord through Monthly Deposits as hereinabove
provided, but, in the event actual Taxes and Assessments for either year are
greater or less than as estimated for purposes of Monthly Deposits, appropriate
adjustment and payment shall be made between the parties, at the time the
actual Taxes and are known, as may be necessary to accomplish proration, as
hereinafter provided, and such obligation shall survive the termination or
expiration of this Lease.

5.3   Special
Assessments.  If any Taxes or
Assessments are payable in installments over a period of years, Tenant shall be
responsible only for installments for periods during the Lease Term with
proration, as above provided, of any installment payable prior to or after
expiration of the Lease Term.

5.4   New
or Additional Taxes.  Tenant’s
obligation to pay Tenant’s Pro Rata Share of Taxes and Assessments shall
include any Taxes and Assessments of a nature not presently in effect but which
may hereafter be levied, assessed or imposed upon Landlord or upon the Property
if such tax shall be based upon or arise out of the ownership, use or operation
of or the rents received from the Property, other than income taxes or estate
taxes of Landlord.  For the purposes of
computing Tenant’s liability for such new type of tax or assessment, the
Property shall be deemed the only Property of Landlord.

5.5   Landlord’s Sole Right
to Contest Taxes.  Landlord shall have the sole
right to contest any Taxes or Assessments. 
Landlord shall pay to or credit Tenant with Tenant’s Pro Rata Share of
any abatement, reduction or recovery of any Taxes and Assessments attributable
to the Lease Term less Tenant’s Pro Rata Share of all costs and expenses
incurred by Landlord, including reasonable attorneys’ fees, in connection with
the pursuit of such abatement, reduction or recovery.

ARTICLE 6

INSURANCE

6.1   Casualty
Insurance.  Landlord covenants and
agrees to obtain and keep in full force and effect during the Lease Term,
Casualty Insurance as hereinafter defined. 
“Casualty Insurance” shall mean property insurance including “all risk”
coverage with respect to the Property, in an amount equal to the full
replacement cost thereof, with coinsurance clauses of no less than ninety percent
(90%), and with coverage, at Landlord’s option, by endorsement or otherwise,
for all risks, vandalism and malicious mischief, sprinkler 

 6
 

leakage, boilers and rental loss and with a deductible
in the amount for each occurrence as Landlord, in its sole discretion, may
determine from time to time.  Casualty
Insurance obtained by Landlord need not name Tenant as an insured party and
may, at Landlord’s option, name any mortgagee or holder of a deed of trust as
an insured party as its interest may appear.  Tenant covenants and agrees to pay, as
Additional Rent, its Pro Rata Share of the cost of Casualty Insurance obtained
by Landlord, and to pay, as Additional Rent, its Pro Rata Share of the cost of
any deductible under such Casualty Insurance. 
Tenant shall be responsible for obtaining, at Tenant’s option, cost and
expense, insurance coverage for personal property and leasehold improvements of
Tenant and for business interruption of Tenant.

6.2   Liability
Insurance.  Tenant covenants and
agrees to obtain and keep in full force and effect during the Lease Term, and
to pay the premiums and costs of, Liability Insurance as herein defined.  “Liability Insurance” shall mean commercial
general liability insurance covering public liability for claims for bodily
injury, personal injury, and property damage with respect to the ownership, use
and operation of the Premises and the Common Facilities, with limits of not
less than two million dollars ($2,000,000.00) combined single limit of
liability, with endorsements for assumed contractual liability with respect to
the liabilities assumed by Tenant under this Lease, and with no deductible,
retention or self-insurance provision contained therein, unless otherwise
approved in writing by Landlord. 
Landlord may also obtain and keep in full force and effect during the
Lease Term liability insurance covering public liability with respect to the
ownership, use and operation of the Property. 
Tenant covenants and agrees to pay Tenant’s Pro Rata Share of the
premiums and costs of such liability insurance as Additional Rent hereunder.

6.3   Other
Insurance.  Tenant covenants and
agrees to obtain and keep in full force and effect during the Lease Term, and
to pay the premiums and costs of, any other types of insurance relating to the
Property or Tenant’s occupancy, use and operation of the Premises that Landlord
or any mortgagee or holder of a deed of trust on the Property may hereafter
reasonably require.  Tenant shall cause
such other insurance to be in effect within 30 days after receipt of written
notice from Landlord.

6.4   General
Provisions Respecting Insurance. 
Except as otherwise approved in writing by Landlord, all insurance
obtained by Tenant shall be on forms and with insurers selected or approved by
Landlord, which approval shall not be unreasonably withheld; shall name
Landlord, Landlord’s manager(s) and agent(s), and the holder of any mortgage or
deed of trust encumbering the Property as insured parties, as their interests
may appear; shall contain a waiver of rights of subrogation as among Tenant,
Landlord and the holder of any such mortgage or deed of trust; shall provide
coverage on an occurrence basis; and shall provide, by certificate of insurance
or otherwise, that the insurance coverage shall not be canceled or altered
except upon 30 days’ prior written notice to Landlord and the holder of any
such mortgage or deed of trust. 
Certificates of insurance obtained by Tenant shall be delivered to
Landlord who may deposit the same with the holder of any such first mortgage or
deed of trust.  Upon written request,
Tenant agrees to provide Landlord with copies of all policies of insurance
obtained by Tenant hereunder.

6.5   Cooperation in the
Event of Loss.  Landlord and Tenant shall
cooperate with each other in the collection of any insurance proceeds that may
be payable in the event of any loss, including the execution and delivery of
any proof of loss or other actions required to effect recovery.

ARTICLE
7

UTILITY, OPERATING, MAINTENANCE AND REPAIR EXPENSES

7.1   Utility Charges.  Tenant covenants and agrees, if possible, to
contract directly with appropriate utility service providers in Tenant’s own
name and to pay directly for, all charges for water, sewage, disposal, storm
drainage fees, gas, electricity, light, heat, power, telephone or other utility
services used,

 

 7

 

rendered or supplied to or for the Premises.  If any such utility charges are not
separately metered or billable to the Premises, then Landlord shall have the
right to apportion utility charges based upon Landlord’s estimation of relative
use of such utilities, and such apportionment shall be final and binding upon
Tenant.  Tenant shall pay to Landlord the
apportioned amount of such utilities as Additional Rent.

7.2   Common Facilities
Charges.  Tenant covenants and agrees to pay, as
Additional Rent, Tenant’s Pro Rata Share of all costs and expenses of
operating, repairing, maintaining and upkeep of the Common Facilities (“Common
Facilities Charges”) including, without limitation, upkeep and replanting of
grass, trees, shrubs and landscaping; removal of dirt, debris, obstructions and
litter from Parking Areas, landscaped areas, sidewalks and driveways; repairs,
resurfacing, resealing, restriping, sweeping and snow removal from the Parking
Areas, sidewalks and driveways; upkeep and maintenance of sprinkler systems;
building signs; stairways; roofs; heating, ventilation and air conditioning
systems; utilities for the Common Facilities; fire protection systems and
sprinkler systems; exterior painting; water and sewage disposal systems; storm
drainage systems; supplies, personnel, and the cost of any rental of equipment
in implementing such services; charges for professional management of the
Property and Common Facilities, including wages, salaries, benefits and payroll
taxes paid by Landlord with respect to its employees for providing such
services; all alterations, additions, improvements and other changes made to
the Improvements in order to conform to changes subsequent to the date of this
Lease in any laws, ordinances, rules, regulations or orders of any applicable
governmental authority, subject to amortization of such costs at a market rate
of interest over the useful life thereof, as determined by Landlord’s
accountants; and personal property taxes, licenses and permits.  Landlord may cause any or all of such
services to be provided by employees of Landlord or by independent
contractor(s) and subcontractor(s). 
Tenant shall pay to Landlord, monthly in advance, without notice, on or
before the first day of each month of the Term, the estimated monthly charge for
the Common Facilities, as determined and redetermined from time to time by
Landlord.  The initial monthly charge for
Common Facilities is set forth in the Summary of Basic Lease Terms attached
hereto. If the total monthly charges paid by Tenant are less than the Tenant’s
Pro Rata Share of the actual charges for Common Facilities, Tenant shall pay
the difference to Landlord within 10 days after demand by Landlord.  If Tenant’s Pro Rata Share of such actual
charges is less than the total monthly charges paid by Tenant, the difference
shall, at Landlord’s option, except as may be otherwise required by law, either
be paid to Tenant or credited against future monthly charges on the next
applicable invoice for Base Rent, Additional Rent or other amounts payable by
Tenant under this Lease.

7.3   Tenant’s Maintenance
Obligation.  Tenant, at its sole cost
and expense, will maintain, repair, replace and keep the Premises and all
improvements, fixtures and personal property thereon in good, safe and sanitary
condition, order and repair and in accordance with all applicable laws,
ordinances, orders, rules and regulations of governmental authorities having
jurisdiction.  Tenant will perform or
contract for and promptly pay for trash and garbage disposal, janitorial and
cleaning services, security services, interior painting, interior window
washing, replacement of damaged or broken glass and other breakable materials,
replacement of interior light bulbs and light fixtures in or serving the
Premises.  All costs of maintenance and
repairs to be performed by Tenant shall be considered and paid by Tenant as
Additional Rent hereunder in the event Landlord agrees to or must perform or
pay for such Tenant obligations.  All
maintenance and repairs to be performed by Tenant shall be done promptly, in a
good and workmanlike fashion, and without diminishing the original quality of
the Premises or the Property.

7.4   Landlord’s Maintenance
Obligation.  Landlord shall be responsible
for and shall bear the costs and expenses of replacement of, or extraordinary
maintenance and repairs to, foundations, exterior walls, structural elements of
the Building, and pipes for water and sewer. 
Landlord shall maintain and repair the Common Facilities (including, but
not limited to, roofs, HVAC systems, mechanical systems, elevator 

 8
 

systems and landscaping), and Tenant shall pay its Pro
Rata Share of all costs and expenses with respect thereto, pursuant to Section
7.2 above.

ARTICLE 8

OTHER COVENANTS OF TENANT

8.1   Limitation on Use by Tenant.  Tenant covenants and agrees to use the
Premises only for the use or uses set forth as Permitted Uses by Tenant in the
Summary of Basic Lease Terms and for no other purposes, except with the prior
written consent of Landlord.  Landlord
has made no investigation of and makes no representations or warranties
whatsoever regarding the permissibility of Tenant’s Permitted Uses under
applicable zoning or land use laws, rules, regulations or approvals.

8.2   Compliance with Laws.  Tenant covenants and agrees that at all times
during the Lease Term, Tenant’s use of the Premises shall be in compliance with
all zoning, land use and other applicable laws, rules and regulations with
respect thereto, and that nothing shall be done or kept on the Premises in
violation of any law, ordinance, order, rule or regulation of any governmental
authority having jurisdiction, and that the Premises shall be used, kept and
maintained in compliance with any such law, ordinance, order, rule or
regulation and with the certificate of occupancy issued for the Building and/or
the Premises.

8.3   Compliance with Insurance
Requirements.  Tenant covenants and
agrees that nothing shall be done or kept on the Premises that might impair or
increase the cost of insurance maintained with respect to the Premises or the
Property, which might increase the insured risks or which might result in
cancellation of any such insurance.

8.4   No Waste or Impairment of
Value.  Tenant covenants and agrees
that nothing shall be done or kept on the Premises or the Property that might
impair the value of the Premises or the Property, or constitute excessive wear
and tear or waste.

8.5   No Overloading.  Tenant covenants and agrees that nothing
shall be done or kept on the Premises or the Building and that no improvements,
changes, alterations, additions, maintenance or repairs shall be made to the
Premises that would impair the structural soundness of the Building,
Improvements or Parking Area, result in an overload of electrical lines serving
the Building or cause excessive tripping of circuit breakers, interfere with
any telephone lines or equipment or any other electric or electronic equipment
in the Building or on any adjacent or nearby property, place excessive demands
on or exceed the capacity of the water lines or sewer lines servicing the
Building, or in any other way overload any portion of the Property or
Improvements or any equipment or facilities servicing the same.  In the event of violations hereof, Tenant
covenants and agrees to immediately remedy the violation at Tenant’s expense
and in compliance with all requirements of governmental authorities and
insurance underwriters.  Landlord shall
include a corresponding similar provision in all leases for space in the
Building, and will use commercially reasonable efforts to obtain compliance
therewith from other tenants in the Building.

8.6   No Nuisance, Noxious or
Offensive Activity.  Tenant covenants
and agrees that no noxious or offensive activity shall be carried on upon the
Premises or the Property nor shall anything be done or kept on the Premises or
the Property which may be or become a public or private nuisance or which may
cause embarrassment, disturbance or annoyance to others in the Building or on
adjacent or nearby property.

8.7   No Annoying Lights,
Sounds or Odors.  Tenant covenants
and agrees that no light shall be emitted from the Premises that is
unreasonably bright or causes unreasonable glare; no sound shall be 

 9
 

emitted from the Premises that is unreasonably loud or
annoying; and no odor shall be emitted from the Premises that is or might be
noxious or offensive to others in the Building or on adjacent or nearby
property.

8.8   No Unsightliness.  Tenant covenants and agrees that no
unsightliness shall be permitted on the Premises or the Property that is
visible from any adjacent or nearby property. 
Without limiting the generality of the foregoing, all unsightly
conditions, equipment, objects and conditions shall be kept enclosed within the
Premises; no refuse, scrap, debris, garbage, trash, bulk materials or waste shall
be kept, stored or allowed to accumulate on the Premises or the Property except
as may be enclosed within the Premises; all pipes, wires, poles, antennas and
other facilities for utilities or the transmission or reception of audio or
visual signals or electricity shall be kept and maintained underground or
enclosed within the Premises or appropriately screened from view; and no
temporary structure shall be placed or permitted on the Premises or the
Property without the prior written consent of Landlord.

8.9   No Animals.  Tenant covenants and agrees that no animals
shall be permitted or kept on the Premises or the Property; provided, however, that nothing herein shall be construed as
prohibiting qualified service animals that may not be legally excluded from the
Premises or Property pursuant to the Americans with Disabilities Act or any
similar law, rule or regulation applicable to the Property.

8.10 Restriction on Signs and
Exterior Lighting.  Tenant covenants
and agrees that no signs or advertising devices of any nature shall be erected
or maintained by Tenant on the Premises or the Property and no exterior
lighting shall be permitted on the Premises or the Property except as approved
in writing by Landlord, such approval not to be unreasonably withheld.  So long as Tenant leases more than one-half
the square footage of the Building, Tenant shall have equal or greater signage
rights in comparison to those granted to other tenants in the Building.

8.11 No Violation of Covenants.  Tenant covenants and agrees not to commit,
suffer or permit any violation of any covenant, condition or restriction
affecting the Premises or the Property.

8.12 Restriction on Changes and
Alterations.  Tenant covenants and
agrees not to improve, change, alter, add to, remove or demolish any
improvements on the Premises (“Changes”) without the prior written consent of
Landlord which consent shall not be unreasonably withheld, and unless Tenant
complies with all conditions which may be imposed by Landlord, in its sole
discretion, in connection with such consent; and unless Tenant pays to Landlord
the reasonable costs and expenses of Landlord for architectural, engineering,
legal or other consultants which may be reasonably incurred by Landlord in
determining whether to approve any such Changes.  Landlord’s consent to any Changes and the
conditions imposed in connection therewith shall be subject to all requirements
and restrictions of any holder of a mortgage or deed of trust encumbering the
Property.  If such consent is given, no
such Changes shall be permitted unless (i) Tenant shall have procured and paid
for all necessary permits and authorizations from any governmental authorities
having jurisdiction; (ii) such Changes will not reduce the value of the
Property, and will not affect or impair existing insurance on the Property; and
(iii) Tenant, at Tenant’s sole cost and expense, shall maintain or cause to be
maintained workmen’s compensation insurance covering all persons employed in
connection with the work and obtains liability insurance covering any loss or
damage to persons or property arising in connection with any such Changes and
such other insurance or bonds as Landlord may reasonably require.  Tenant covenants and agrees that any such
Changes approved by Landlord shall be completed with due diligence and in a
good and workmanlike fashion and in compliance with all conditions imposed by
Landlord and all applicable permits, authorizations, laws, ordinances, orders,
rules and regulations of governmental authorities having jurisdiction and that
the costs and expenses with respect to such Changes shall be paid promptly when
due and that the Changes shall be accomplished free of liens of mechanics and
materialmen.  Tenant covenants and agrees
that all such Changes, except trade

 10
 

fixtures, shall become the property of the Landlord at
the expiration of the Lease Term or, if Landlord so requests, Tenant shall, at
or prior to expiration of the Lease Term and at its sole cost and expense,
remove such Changes and restore the Premises to the condition that existed
prior to making such Changes.  However,
if Landlord agrees to any Changes in writing and does not  require removal and restoration of such
Changes as a condition to its approval in such writing, Tenant will not be
required to remove (or pay for the removal of) such Changes.  In addition, Tenant need not obtain the prior
approval of Landlord for Changes that: (i) cost less than $2,500.00, (ii) are
non-structural, (iii) do not affect major Building systems, and (iv) are not
visible from the exterior of the Premises.

8.13 No Mechanic’s Liens.  Tenant covenants and agrees not to permit or
suffer, and to cause to be removed and released, any mechanics’, materialmen’s
or other lien on account of supplies, machinery, tools, equipment, labor or material
furnished or used in connection with the construction, alteration, improvement,
addition to or repair of the Premises by, through or under Tenant.  At least 30 days prior to any Changes, Tenant
shall provide written notice to Landlord of the date of commencement of any
Changes.  Prior to the commencement of
any Changes, Tenant shall post in conspicuous locations and maintain on the
Premises and Building Notices of Owner’s Non-Liability in the form attached
hereto as Exhibit C or in such other form as Landlord may from time to
time require in writing.  Tenant shall
have the right to contest, in good faith and with reasonable diligence, the
validity of any such lien or claimed lien, provided that Tenant shall give to
Landlord such security as may be reasonably requested by Landlord to insure the
payment of any amounts claimed, including interest and costs, and to prevent
any sale, foreclosure or forfeiture of any interest in the Property on account
of any such lien, including, without limitation, bonding, escrow or endorsement
of the title insurance policy of Landlord and any holder of a mortgage or deed
of trust encumbering the Property.  If
Tenant so contests, then on final determination of the lien or claim for lien,
Tenant shall immediately pay any judgment rendered, with interest and costs,
and will cause the lien to be released and any judgment satisfied.

8.14 No Other Encumbrances.  Tenant covenants and agrees not to obtain any
financing secured by Tenant’s interest in the Premises and not to encumber the
Premises or Landlord’s or Tenant’s interest therein, without the prior written
consent of Landlord, and to keep the Premises free from all liens and
encumbrances except liens and encumbrances existing upon the Commencement Date
of the Lease Term or liens and encumbrances created by Landlord.

8.15 Subordination to Landlord
Mortgages.  Tenant covenants and
agrees that this Lease and Tenant’s interest in the Premises shall be junior
and subordinate to any mortgage or deed of trust now or hereafter encumbering
the Property.  In the event of a
foreclosure of any such mortgage or deed of trust, Tenant shall attorn to the
party acquiring title to the Property as the result of such foreclosure.  No act or further agreement by Tenant shall
be necessary to establish the subordination of this Lease to any such mortgage
or deed of trust, which is self-executing, but Tenant covenants and agrees,
upon request to Landlord, to execute such documents as may be necessary or
appropriate to confirm and establish this Lease as subordinate to any such
mortgage or deed of trust in accordance with the foregoing provisions.  Alternatively, Tenant covenants and agrees
that, at the option of any mortgagee or beneficiary under a deed of trust,
Tenant shall execute documents as may be necessary to establish this Lease and
Tenant’s interest in the Premises as superior to any such mortgage or deed of
trust.  If Tenant fails to execute any
documents required to be executed by Tenant under the provisions hereof, Tenant
hereby makes, constitutes and irrevocably appoints Landlord as Tenant’s
attorney in fact and in Tenant’s name, place and stead to execute any such
document.

8.16 Assignment or Subletting.  Tenant covenants and agrees not to make or
permit a Transfer by Tenant, as hereinafter defined, without Landlord’s prior
written consent, which consent shall not be 

 11
 

unreasonably withheld or delayed.  A Transfer by Tenant shall include an
assignment of this Lease, a sublease of all or any part of the Premises, any
transfer of fifty percent (50%) or more of the voting stock or interests of
Tenant, or any assignment, sublease, license, franchise, transfer, mortgage,
pledge or encumbrance of all or any part of Tenant’s interest under this Lease
or in the Premises, by operation of law or otherwise, or the use or occupancy
of all or any part of the Premises by anyone other than Tenant.  Any such Transfer by Tenant without Landlord’s
written consent shall be void and shall constitute a default under this
Lease.  In the event Landlord consents to
any Transfer by Tenant, Tenant shall not be relieved of its obligations under
this Lease and Tenant shall remain liable under this Lease, to the same extent
as though no Transfer by Tenant had been made, unless specifically provided to
the contrary in Landlord’s prior written consent.  The acceptance of rent by Landlord from any
person other than Tenant shall not be deemed to be a waiver by Landlord of the
provisions of this Section or of any other provision of this Lease and any
consent by Landlord to Transfer by Tenant shall not be deemed a consent to any
subsequent Transfer by Tenant.  In giving
or withholding its consent to a proposed Transfer by Tenant, Landlord shall be
entitled to consider any reasonable factor, including but not limited to the
following: (a) financial strength and credit history of the proposed
subtenant/assignee; (b) business reputation of the proposed subtenant/assignee;
(c) proposed use of the Premises by the proposed subtenant/assignee; (d)
managerial and operational skills of the proposed subtenant/assignee; and (e)
compatibility of the proposed subtenant/assignee with other tenants of the
Building.

Notwithstanding
the foregoing, Landlord shall, at Landlord’s option, have the right, in lieu of
consenting to a Transfer by Tenant, to terminate this Lease as to the portion
of the Premises that is subject to the proposed Transfer by Tenant and to enter
into a new lease with the proposed transferee and receive directly from the
proposed transferee the consideration agreed to be given by such transferee to
Tenant for the Transfer by Tenant. 
Alternatively, at the request of Landlord, Tenant shall pay over to
Landlord fifty percent (50%) of all sums received by Tenant in excess of the
rent payable by Tenant hereunder which is attributable on an equally allocable
square foot basis, to the subletting of all or any portion of the Premises so
subleased.

8.17 Annual Financial
Statements.  Landlord acknowledges
that Tenant is a publicly traded company and that it may obtain Tenant’s
financial statements on the United States Securities and Exchange Commission
website.  In the event that Tenant goes
private or Tenant’s financial statements otherwise become unavailable to the
general public, then Tenant covenants and agrees to furnish to Landlord thereafter,
within 15 days after Landlord’s written request, copies of Tenant’s most recent
year-end financial statements.  Tenant
agrees that Landlord may deliver any such financial statements to any existing
or prospective mortgagee or purchaser of the Property.  The financial statements shall include a
balance sheet as of the end of, and a statement of profit and loss for, the
preceding fiscal year of Tenant and, if regularly prepared by Tenant, a
statement of sources and use of funds for the preceding fiscal year of Tenant.

8.18 Payment of Income and
Other Taxes.  Tenant covenants and
agrees to pay promptly when due all personal property taxes on personal
property of Tenant on the Premises and all federal, state and local income
taxes, sales taxes, use taxes, Social Security taxes, unemployment taxes and
taxes withheld from wages or salaries paid to Tenant’s employees, the
nonpayment of which might give rise to a lien on the Premises or Tenant’s
interest therein, and to furnish, if requested by Landlord, evidence of such
payments.

8.19 Estoppel Certificates.  Tenant covenants and agrees to execute,
acknowledge and deliver to Landlord, upon Landlord’s written request, a written
Estoppel Certificate certifying that this Lease is unmodified (or, if modified,
stating the modifications) and in full force and effect; stating the dates to
which Base Rent has been paid, stating the amount of the Security Deposit held
by Landlord; stating the amount of the Monthly Deposits held by Landlord for
the then tax and insurance year; and stating whether or not 

 12
 

Landlord is in default under this Lease (and, if so,
specifying the nature of the default); and stating such other matters
concerning this Lease as Landlord may reasonably request.  Tenant agrees that such statement may be
delivered to and relied upon by any existing or prospective mortgagee or
purchaser of the Property.  Tenant agrees
that a failure to deliver such a statement within ten (10) days after written
request from Landlord shall be conclusive upon Tenant that this Lease is in
full force and effect without modification except as may be represented by
Landlord; that there are no uncured defaults by Landlord under this Lease; and
that any representation by Landlord with respect to Base Rent, the Security
Deposit and Monthly Deposits is true. In the event Tenant requests any changes
or revisions to any such Estoppel Certificate, Tenant shall pay to Landlord,
within 10 days after demand by Landlord, the reasonable costs and expenses of
Landlord in connection the negotiation, drafting and revision of such Estoppel
Certificate, including attorneys’ fees.

8.20 Landlord Right to Inspect
and Show Premises and to Install “For Sale” Signs.  Tenant covenants and agrees that Landlord and
the authorized representatives of Landlord shall have the right to enter the
Premises at any reasonable time upon prior notice, provided that the frequency
is reasonable, for the purposes of inspecting, repairing or maintaining the
same or performing any obligations of Tenant which Tenant has failed to perform
hereunder or for the purposes of showing the Premises to any existing or
prospective mortgagee, purchaser or lessee of the Property or the
Premises.  Tenant covenants and agrees
that Landlord may at any time and from time to time place on the Property or
the Premises a sign advertising the Property or the Premises for sale or for
lease.

8.21 Landlord Right to
Renovate, Expand or Modify Building. 
Tenant covenants and agrees that Landlord shall have the right to
renovate, expand, reconstruct or otherwise modify the Building and/or Common
Facilities at any time, in Landlord’s sole discretion; provided,
however, that no such renovation, expansion, reconstruction or other
modification shall permanently and materially interfere with Tenant’s right to
the quiet use and enjoyment of the Premises according to the terms of this
Lease.  In the event any renovation,
expansion, reconstruction or other modification of the Building or Common
Facilities by Landlord causes a temporary material interference with Tenant’s
use and enjoyment of the Premises, then during the period of such interference,
there shall be an abatement of Base Rent and Additional Rent proportionate to
the extent of the space and period of time that Tenant is unable to use and
enjoy the Premises.

8.22 [intentionally omitted]

8.23 Landlord Title to
Fixtures, Improvements and Equipment. 
Tenant covenants and agrees that all fixtures and improvements on the
Premises and all equipment and personal property relating to the use and
operation of the Premises (as distinguished from operations incident to the
business of Tenant), including all plumbing, heating, lighting, electrical and
air conditioning fixtures and equipment, whether or not attached to or affixed
to the Premises, and whether now or hereafter located upon the Premises, shall
be and remain the property of the Landlord upon expiration of the Lease Term.

8.24 Removal of Tenant’s
Equipment.  Tenant covenants and
agrees to remove, at or prior to the expiration of the Lease Term, all of
Tenant’s Equipment, as hereinafter defined. 
“Tenant’s Equipment” shall mean all equipment, apparatus, machinery,
signs, furniture, furnishings and personal property used in the operation of
the business of Tenant (as distinguished from the use and operation of the
Premises).  If such removal shall injure
or damage the Premises, Tenant covenants and agrees, at its sole cost and
expense, at or prior to the expiration of 

 13
 

the Lease Term, to repair such injury and damage in
good and workmanlike fashion and to place the Premises in the same condition as
the Premises would have been if such Tenant’s Equipment had not been
installed.  If Tenant fails to remove any
Tenant’s Equipment by the expiration of the Lease Term, Landlord may, at its
option, keep and retain any such Tenant’s Equipment or dispose of the same and
retain any proceeds therefrom, and Landlord shall be entitled to recover from
Tenant any costs or expenses of Landlord in removing the same and in restoring
the Premises in excess of the actual proceeds, if any, received by Landlord
from disposition thereof.  Tenant
releases and discharges Landlord from any and all claims and liabilities of any
kind arising out of Landlord’s disposition of Tenant’s Equipment.

8.25 Tenant Indemnification of
Landlord.  Tenant covenants and
agrees to protect, indemnify, defend and hold harmless Landlord from and
against all liability, obligations, claims, damages, penalties, causes of
action, costs and expenses, including attorneys’ fees, imposed upon, incurred
by or asserted against Landlord by reason of: (a) any accident, injury to or
death of any person or loss of or damage to any property occurring on or about
the Premises or Common Facilities; (b) any act or omission of Tenant or Tenant’s
officers, employees, agents, guests or invitees, or of anyone claiming by,
through or under Tenant; (c) any use which may be made of, or condition
existing upon, the Premises or Common Facilities; (d) any improvements,
fixtures or equipment upon the Premises or Common Facilities; (e) any failure
on the part of Tenant to perform or comply with any of the provisions,
covenants or agreements of Tenant contained in this Lease; (f) any violation of
any law, ordinance, order, rule or regulation of governmental authorities
having jurisdiction by Tenant or Tenant’s officers, employees, agents, guests
or invitees or by anyone claiming by, through or under Tenant; and (g) any
repairs, maintenance of Changes to the Premises made or caused to be made by,
through or under Tenant.  Tenant further
covenants and agrees that, in case any action, suit or proceeding is brought
against Landlord by reason of any of the foregoing, Tenant will, at Tenant’s
sole cost and expense, pay all costs and expenses to defend Landlord in any
such action, suit or proceeding with counsel of Landlord’s choosing.

8.26 Liability of Landlord.  Landlord shall be liable to Tenant for
Landlord’s gross negligence and willful misconduct.  Tenant waives and releases any claims Tenant
may have against Landlord or Landlord’s officers, agents or employees for loss,
damage or injury to person or property sustained by Tenant or Tenant’s
officers, agents, employees, guests, invitees or anyone claiming by, through or
under Tenant resulting from any cause whatsoever other than gross negligence or
willful misconduct.  Notwithstanding
anything to the contrary contained in this Lease, Landlord, its beneficiaries,
successors and assigns, shall not be personally liable with respect to any of
the terms, covenants and conditions of this Lease, and Tenant shall look solely
to the equity of Landlord in the Property in the event of any default or
liability of Landlord under this Lease, such exculpation of liability to be
absolute and without any exception whatsoever.

8.27 Release upon Transfer by
Landlord.  In the event of a transfer
by Landlord of the Property or of Landlord’s interest as Landlord under this
Lease, Landlord’s successor or assignee shall take subject to and be bound by
this Lease and, in such event, Tenant covenants and agrees that Landlord shall
be released from all obligations of Landlord under this Lease, except
obligations which arose and matured prior to such transfer by Landlord; that
Tenant shall thereafter look solely to Landlord’s successor or assign for
satisfaction of the obligations of Landlord under this Lease; and that, upon
demand by Landlord or Landlord’s successor or assign, Tenant shall attorn to
such successor or assign.

8.28 Rules and Regulations.  Tenant shall observe and comply with rules
and regulations that may be reasonably promulgated and amended from time to
time by Landlord by providing written notice thereof to Tenant.  Landlord shall not be responsible to Tenant
for the failure of any other tenant of the Building to observe or comply with
any of the rules or regulations, but Landlord shall make reasonable efforts to
enforce the rules and regulations (if any) for the benefit of all tenants of
the Building.

8.29 Monitoring Equipment.  Should equipment for monitoring fire
systems and/or security systems be deemed necessary by Tenant or be required
for the Premises by federal, state, or local 

 14

 

governing agencies because of Tenant’s equipment, the
nature of Tenant’s business, or Tenant’s modification of the Premises, Tenant
shall be responsible for installation of such monitoring system, for any
required building permits, monthly monitoring fees, and any fines, penalties or
other charges for false alarms.  Should
such monitoring systems be otherwise required by federal, state or local governing
agencies, or deemed by Landlord to be advisable for the operation of the
Building, Landlord shall be responsible for installation of such monitoring
systems, and all costs and expenses relating thereto shall be included as
Common Facilities Charges.

ARTICLE 9

ENVIRONMENTAL MATTERS

9.1   Definitions.

9.1.1   Hazardous Material.  Hazardous Material means any substance:

9.1.1.1     that is or becomes
defined as a “hazardous material,” “hazardous waste,” “hazardous substance,” “regulated
substance,” “pollutant” or “contaminant” under any federal, state or local
statute, regulation, rule or ordinance or amendments thereto including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. § 9601 et seq.) and the Resource Conservation and
Recovery Act (42 U.S.C. § 6901 et seq.); or

9.1.1.2     that is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic, or otherwise hazardous and is or becomes regulated by any
governmental authority, agency, department, commission, board, agency or
instrumentality of the United States, the State of Colorado or any political
subdivision thereof; or

9.1.1.3     the presence of which
on the premises causes or threatens to cause a nuisance upon the premises or to
adjacent properties or poses or threatens to pose a hazard to the health or
safety of persons on or about the premises; or

9.1.1.4     that contains gasoline,
diesel fuel or other petroleum hydrocarbons; or

9.1.1.5     that contains polychlor­inated
bipheynols (PCBs), asbestos or urea formaldehyde foam insulation; or

9.1.1.6     that contains or
constitutes radon gas.

9.1.2   Environmental
Requirements.  Environmental Require­ments
means all applicable present and future statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, approvals, plans, authorizations,
concessions, franchises, and similar items, of all governmental agencies,
departments, commis­sions, boards, bureaus, or instrumentalities of the United
States, states and political subdivisions thereof and all appli­cable judicial,
administrative, and regulatory decrees, judgments, and orders relating to the
protection of human health or the environment.

9.1.3   Environmental
Damages.  Environmental Damages means
all claims, judgments, damages, losses, penalties, fines, liabilities
(including strict liability), encumbrances, liens, costs, and expenses of investigation
and defense of any claim, whether or not such claim is ultimately defeated, and
of any good faith settlement or judgment, of whatever kind or nature, contin­gent
or otherwise, matured or unmatured, foreseeable or unfore­see­able, including
without limitation reasonable attorneys’ fees and 

 15
 

disbursements and consultants’ and witnesses’ fees,
any of which are in­curred at any time as a result of the existence of
Hazardous Material upon, about, beneath the premises or migrating or
threatening to migrate to or from the premises, or the existence of a violation
of Environmental Requirements pertaining to the premises.

9.2   Tenant’s Obligation to
Indemnify, Defend and Hold Harmless. 
Tenant, its successors, assigns and guarantors, agree to indemnify, defend,
reimburse and hold harmless the following persons from and against any and all
Environ­mental Damages arising from
activities of Tenant or its employees, agents, contractors, subcontractors, or
guests, licensees, or invitees which (1) result in the presence of
Hazardous Materials upon, about or beneath the Premises or migrating to or from
the Premises, or (2) result in the violation of any Environmental Requirements
pertaining to the Premises and the activities thereon:

9.2.1        Landlord;

9.2.2        any other person who
acquires an interest in the premises in any manner, including but not limited
to purchase at a foreclosure sale or otherwise; and

9.2.3        the directors,
officers, shareholders, employees, partners, agents, contractors,
subcontractors, experts, licensees, affiliates, lessees, mortgagees, trustees,
heirs, devisees, successors, assigns, guests and invitees of such persons.

This obligation shall include, but not be limited to,
the burden and expense of investigating and defending all claims, suits and
administrative proceedings (with counsel reasonably approved by the indemnified
parties), including attorneys’ fees and expert witness and consulting fees,
even if such claims, suits or proceed­ings are groundless, false or fraudulent,
and conducting all negotiations of any description, and paying and discharging,
when and as the same become due, any and all judgments, penalties or other sums
due against such indemnified persons, and all such expenses incurred in
enforcing the obligation to indemnify.  Tenant,
at its sole expense, may employ additional counsel of its choice to associate
with counsel representing the indemnified parties.

9.3   Tenant’s Obligation to
Remediate.  Notwithstanding the
obligation of Tenant to indem­nify Landlord pursuant to this agreement, Tenant
shall, upon demand of Landlord, and at its sole cost and expense, promptly take
all actions to remediate the Premises, Building, and Land which are reasonably
necessary to mitigate Environmental Damages or to allow full economic use of the
Building and Land, or are required by Environmental Requirements, which
remediation is necessitated by the (a) introduction of a Hazardous Material
upon, about or beneath the Premises or (b) a violation of Environmental
Requirements, either of which is caused
by the actions of Tenant, its employees, agents, contractors, subcontractors,
guests, invitees or licensees. 
Tenant shall promptly provide to Landlord copies of testing results and
reports that are generated in connection with the above activities, and copies
of any corre­spondence with any governmental entity related to such activities.

9.4   Notification.  If Tenant shall become aware of or receive
notice or other communication concerning any actual, alleged, suspected or
threatened violation of Environmental Requirements, or liability of Tenant for
Environmental Damages in connection with the Premises or past or present
activities of any person thereon, or that any representation set forth in this
agreement is not or is no longer accurate, then Tenant shall deliver to
Landlord, within ten days of the receipt of such notice or communication by
Landlord, a written description of said violation, liability, correcting
information, or actual or threatened event or condition, together with copies
of any such notice or communication. 
Receipt of such notice shall 

 16
 

not be deemed to create any obligation on the part of
Landlord to defend or otherwise respond to any such notification or
communication.

9.5   Negative Covenants.

9.5.1        No Hazardous
Material on Premises.  Except in
strict compliance with all Environmental Requirements, Tenant shall not cause,
permit or suffer any Hazardous Material to be brought upon, treated, kept,
stored, disposed of, discharged, released, produced, manufactured, generated,
refined or used upon, about or beneath the Premises by Tenant, its agents,
employees, contractors, subcontractors, guests, licensees or invitees, or any
other person.  Tenant shall deliver to
Landlord copies of all documents that Tenant provides to any governmental body
in connection with compliance with Environmental Requirements with respect to
the premises, such delivery to be contemporaneous with provision of the
documents to the govern­mental agency.

9.5.2        No Violations of
Environmental Requirements.  Tenant shall
not cause, permit or suffer the existence or the commission by Tenant, its
agents, employees, contractors, subcontractors or guests, licensees or
invitees, or by any other person of a violation of any Environ­mental
Requirements upon, about or beneath the Premises or any portion of the Building
or Land.

9.6   Landlord’s Right to
Inspect and to Audit Tenant’s Records. 
Landlord shall have the right in its sole and absolute discretion, but
not the duty, to enter and conduct an inspection of the Premises and to inspect
and audit Tenant’s records concerning Hazardous Materials at any reasonable
time upon at least 24 hours’ notice to determine whether Tenant is complying
with the terms of the Lease, including but not limited to the compliance of the
Premises and the activities thereon with Environmental Requirements and the
existence of Environmental Damages. 
Tenant hereby grants to Landlord the right to enter the Premises and to
perform such tests on the Premises as are reasonably necessary in the opinion
of Landlord to assist in such audits and investigations.  Landlord shall use reasonable efforts to
minimize interference with the business of Tenant by such tests inspections and
audits, but Landlord shall not be liable for any interference caused thereby.

9.7   Landlord’s Right to
Remediate.  Should Tenant fail to
perform or observe any of its obligations or agreements pertaining to Hazardous
Materials or Environmental Requirements, then Landlord shall have the right,
but not the duty, without limitation upon any of the rights of Landlord
pursuant to this Lease, to enter the Premises personally or through its agents,
consultants or contractors and perform the same.  Tenant agrees to indemnify Landlord for the
costs thereof and liabilities therefrom as set forth in Section 9.2.

9.8   Landlord’s Obligation to
Indemnify.  Landlord represents and warrants that, to its
current, actual knowledge, there is and has been no presence or release of any
Hazardous Materials not commonly found in commercial offices, or any violation
of any Environmental Requirements on or about the Property.  Landlord will indemnify, defend, release and
hold Tenant harmless from any and all Environmental Damages that arise as a
result of or in connection with a breach of the foregoing Landlord representation
and warranty.

9.9   Survival of Environmental
Obligations.  The obligations of
Landlord and Tenant as set forth in this Article 9 and all of its sections
shall survive expiration or termination of this Lease.

 17
 

ARTICLE 10

DAMAGE OR DESTRUCTION

10.1 Damage to Premises.  If any portion of the Premises shall be
damaged or destroyed by fire or other casualty, Tenant shall give prompt
written notice thereof to Landlord (“Tenant’s Notice of Damage”).

10.2 Options to Terminate if
Damage to Premises is Substantial. 
Upon receipt of Tenant’s Notice of Damage, Landlord shall promptly
proceed to determine the nature and extent of the damage or destruction and to
estimate the time necessary to repair or restore the Premises.  As soon as reasonably possible, Landlord
shall give written notice to Tenant stating Landlord’s estimate of the time
necessary to repair or restore the Premises (“Landlord’s Notice of Repair Time”).  If Landlord reasonably estimates that repair
or restoration of the Premises cannot be completed within 240 days from the
time of Landlord’s Notice of Repair Time, Landlord and Tenant shall each have
the option to terminate this Lease.  If,
however, the damage or destruction was caused by the act or omission of Tenant
or Tenant’s officers, employees, agents, guests or invitees or of anyone
claiming by, through or under Tenant, Landlord shall have the option to
terminate this Lease if Landlord reasonably estimates that the repair or
restoration cannot reasonably be completed within 240 days from the time of
Tenant’s Notice of Damage, but Tenant shall not have the option to terminate
this Lease.  Any option granted hereunder
shall be exercised by written notice to the other party given within 10 days
after Landlord’s Notice of Repair Time. 
If either Landlord or Tenant exercises its option to terminate this
Lease, the Lease Term shall expire immediately upon the notice by either
Landlord or Tenant exercising such party’s option to terminate this Lease.  Following termination of this Lease under the
provisions hereof, Landlord shall refund to Tenant such amounts of Base Rent
and Additional Rent theretofore paid by Tenant as may be applicable to the
period subsequent to the time of Tenant’s Notice of Damage less the reasonable
value of any use or occupation of the Premises by Tenant subsequent to the time
of Tenant’s Notice of Damage.

10.3 Damage to Building.  If the Building shall be damaged or destroyed
by fire or other casualty (whether or not the Premises are affected) to the
extent of fifty percent (50%) or more of the replacement value of the Building,
and within 30 days after the happening of such damage Landlord shall decide not
to reconstruct or rebuild the Building, then upon written notice to Tenant
within such 30 days, this Lease shall terminate and Landlord shall refund to
Tenant such amounts of Base Rent and Additional Rent paid by Tenant for the
period after such damage less the reasonable value of any use or occupation of
the Premises by Tenant during such period.

10.4 Obligations to Repair and
Restore.  If repair and restoration
of the Premises can be completed within the period specified in Section 10.2,
in Landlord’s reasonable estimation, or if neither Landlord nor Tenant
terminate this Lease as provided in Sections 10.2 or 10.3, this Lease shall
continue in full force and effect and Landlord shall proceed forthwith to cause
the Premises to be repaired and restored with reasonable diligence and there
shall be abatement of Base Rent and Additional Rent proportionate to the extent
of the space and period of time that Tenant is unable to use and enjoy the
Premises.  Landlord may, at its option,
require Tenant to arrange for and supervise the repair and restoration of the
Premises, in which case Landlord shall furnish Tenant with the insurance
proceeds for such repair and restoration at the time or times such funds are
needed, provided such proceeds are sufficient to cover the costs of repair or
restoration.

10.5 Application of Insurance
Proceeds.  The proceeds of any
Casualty Insurance maintained on the Premises, other than casualty insurance
maintained by Tenant on fixtures and personal property of Tenant, shall be paid
to and become the property of Landlord, subject to any obligation of Landlord
to cause the Premises to be repaired and restored and further subject to any
rights of a holder of a mortgage or deed of trust encumbering the Property to
such proceeds.  Landlord’s obligation to
repair and restore the Premises 

 18
 

as provided in this Article is limited to the repair
and restoration that can be accomplished with the proceeds of any Casualty
Insurance maintained on the Premises. 
The amount of any such insurance proceeds is subject to any right of a
holder of a mortgage or deed of trust encumbering the Property to apply such
proceeds to its secured debt.

ARTICLE 11

CONDEMNATION

11.1 Taking.  A “Taking” shall mean the taking of all or
any portion of the Premises as a result of the exercise of the power of eminent
domain or condemnation for public or quasi-public use or the sale of all or part
of the Premises under the threat of condemnation.  A “Substantial Taking” shall mean a Taking of
twenty-five percent (25%) or more of the area (in square feet) of either the
Premises or the Building.  An “Insubstantial
Taking” shall mean a Taking that does not constitute a Substantial Taking.

11.2 Termination on Substantial
Taking.  If there is a Substantial
Taking with respect to the Premises or the Building, the Lease Term shall
expire on the date of vesting of title pursuant to such Taking. In the event of
termination of this Lease under the provisions hereof, Landlord shall refund to
Tenant such amounts of Base Rent and Additional Rent theretofore paid by Tenant
as may be applicable to the period subsequent to the time of termination of
this Lease.

11.3 Restoration on
Insubstantial Taking.  In the event
of an Insubstantial Taking, this Lease shall continue in full force and effect,
Landlord shall proceed forthwith to cause the Premises, less such Taking, to be
restored as near as may be to the original condition thereof and there shall be
abatement of Base Rent and Additional Rent proportionate to the extent of the
space so taken.  Landlord may, at its
option, require Tenant to arrange for and handle the restoration of the
Premises, in which case Landlord shall furnish Tenant with sufficient funds for
such restoration at the time or times such funds are needed.

11.4 Right to Award.  The total award, compensation, damages or
consideration received or receivable as a result of a Taking (“Award”) shall be
paid to and be the property of Landlord, including, without limitation, any
part of the Award made as compensation for diminution of the value of the
leasehold or the fee of the Premises. 
Tenant hereby assigns to Landlord, all of Tenant’s right, title and interest
in and to any such Award.  Tenant
covenants and agrees to execute, immediately upon demand by Landlord, such
documents as may be necessary to facilitate collection by Landlord of any such
Award.  Notwithstanding Landlord’s right
to the entire Award, Tenant shall be entitled to any separate award, if any,
for the loss of Tenant’s personal property or the loss of Tenant’s business and
profits.

ARTICLE 12

DEFAULTS BY TENANT

12.1 Defaults Generally.  Each of the following shall constitute a “Default
by Tenant” under this Lease.

12.2 Failure to Pay Rent or
Other Amounts.  A Default by Tenant
shall exist if Tenant fails to pay Base Rent, Additional Rent, Monthly Deposits
or any other amounts payable by Tenant under the terms of this Lease within
five days after written notice thereof.

12.3 Violation of Lease Terms.  A Default by Tenant shall exist if Tenant
breaches or fails to comply with any agreement, term, covenant or condition in
this Lease applicable to Tenant, and Tenant does not cure such breach or failure
within 30 days after notice thereof by Landlord to Tenant, or, if such breach
or failure to comply cannot be reasonably cured within such 30-day period, if
Tenant shall not in good faith commence to cure such breach 

 19
 

or failure to comply with such 30-day period or shall
not diligently proceed therewith to completion with 60 days following the
occurrence of the breach or failure.

12.4 Nonoccupancy of Premises.  A Default by Tenant shall exist if Tenant
shall fail to occupy and use the Premises within 30 days after the Commencement
Date or shall leave the Premises continuously unoccupied and shall vacate and
abandon the Premises, unless prior arrangements with Landlord are made.

12.5 Transfer of Interest
Without Consent.  A Default by Tenant
shall exist if Tenant’s interest under this Lease or in the Premises shall be
transferred to or pass to or devolve upon any other party without Landlord’s
prior written consent.

12.6 Execution and Attachment
Against.  A Default by Tenant shall
exist if Tenant’s interest under this Lease or in the Premises shall be taken
upon execution or by other process of law directed against Tenant, or shall be
subject to any attachment at the instance of any creditor or claimant against
Tenant and said attachment shall not be discharged or disposed of within 30
days after the levy thereof.

12.7 Bankruptcy or Related
Proceedings.  A Default by Tenant
shall exist if Tenant shall file a petition in bankruptcy or insolvency or for
reorganization or arrangement under the bankruptcy laws of the United States or
under any similar act of any state, or shall voluntarily take advantage of any
such law or act by answer or otherwise, or shall be dissolved or shall make an
assignment for the benefit of creditors or if involuntary proceedings under any
such bankruptcy or insolvency law or for the dissolution of Tenant shall be
instituted against Tenant or a receiver or trustee shall be appointed for the
Premises or for all or substantially all of the property of Tenant, and such
proceedings shall not be dismissed or such receivership or trustee-ship vacated
within 60 days after such institution or appointment.

ARTICLE 13

LANDLORD’S REMEDIES

13.1 Remedies Generally.  Upon the occurrence of any Default by Tenant,
Landlord shall have the right, at Landlord’s election, then or at anytime
thereafter, to exercise any one or more of the following remedies.

13.2 Cure by Landlord.  In the event of a Default by Tenant, Landlord
may, at Landlord’s option, but without obligation to do so, and without
releasing Tenant from any obligations under this Lease, make any payment or
take any action as Landlord may deem necessary or desirable to cure any such
Default by Tenant in such manner and to such extent as Landlord may deem
necessary or desirable.  Landlord may do
so without demand on, or written notice to, Tenant and without giving Tenant
any opportunity to cure such Default by Tenant. 
Tenant covenants and agrees to pay to Landlord, within 10 days after
demand, all advances, costs and expenses of Landlord in connection with the
making of any such payment or the taking of any such action, including
reasonable attorneys’ fees, together with interest as hereinafter provided from
the day of payment of any such advances, costs and expenses by Landlord.  Action taken by Landlord may include
commencing, appearing in, defending or otherwise participating in any action or
proceedings and paying, purchasing, contesting or compromising any claim,
right, encumbrance, charge or lien with respect to the Premises which Landlord,
in its discretion, may deem necessary or desirable to protect its interest in
the Premises and under this Lease.

13.3 Termination of Lease and
Damages.  In the event of a Default
by Tenant, Landlord may terminate this Lease, effective at such time as may be
specified by written notice to Tenant, and demand 

 20
 

(and, if such demand is refused, recover) possession
of the Premises from Tenant.  Tenant
shall remain liable to Landlord for damages in an amount equal to the Base
Rent, Additional Rent and other sums which would have been owing by Tenant
hereunder for the balance of the term, had this Lease not been terminated, less
the net proceeds, if any, of reletting of the Premises by Landlord subsequent
to such termination, after deducting all Landlord’s expenses in connection with
such recovery of possession or reletting. 
Landlord shall be entitled to collect and receive such damages from
Tenant on the days on which the Base Rent, Additional Rent and other amounts
would have been payable if this Lease had not been terminated.  Alternatively, at the option of Landlord,
Landlord shall be entitled to recover forthwith from Tenant, as damages for
loss of the bargain and not as a penalty, an aggregate sum which, at the time
of such termination of this Lease, represents the excess, if any, of (a) the
aggregate of the Base Rent, Additional Rent and all other sums payable by
Tenant hereunder that would have accrued for the balance of the Lease Term,
over (b) the aggregate rental value of the Premises for the balance of the
Lease Term, both discounted to present worth at the then applicable federal
rate.

13.4 Repossession and Reletting.  In the event of Default by Tenant, Landlord
may reenter and take possession of the Premises or any part thereof, without
demand or notice, and repossess the same and expel Tenant and any party
claiming by, under or through Tenant, and remove the effects of both, without
breach of the peace, without being liable for prosecution on account thereof or
being deemed guilty of any manner of trespass, and without prejudice to any
remedies for arrears of rent or right to bring any proceeding for breach of
covenants or conditions.  No such reentry
or taking possession of the Premises by Landlord shall be construed as an
election by Landlord to terminate this Lease unless a written notice of such
intention is given to Tenant.  No notice
from Landlord hereunder or under a forcible entry and detainer statute or
similar law shall constitute an election by Landlord to terminate this Lease
unless such notice specifically so states. 
Landlord reserves the right, following any reentry or reletting, to
exercise its right to terminate this Lease by giving Tenant such written
notice, in which event the Lease will terminate as specified in said
notice.  After recovering possession of
the Premises, Landlord may, from time to time, but shall not be obligated to,
relet the Premises, or any part thereof, for the account of Tenant, for such
term or terms and on such conditions and upon such other terms as Landlord, in its
uncontrolled discretion, may determine. 
Landlord may make such repairs, alterations or improvements as Landlord
may consider appropriate to accomplish such reletting, and Tenant shall
reimburse Landlord upon demand for all costs and expenses, including brokers’
commissions and attorneys’ fees, which Landlord may incur in connection with
such reletting.  Landlord may collect and
receive the rents for such reletting but Landlord shall in no way be
responsible or liable for any failure to relet the Premises, or any part
thereof, or for any failure to collect any rent due upon such reletting.  Notwithstanding Landlord’s recovery of
possession of the Premises, Tenant shall continue to pay on the dates herein
specified, the Base Rent, Additional Rent and other amounts which would be
payable hereunder if such repossession had not occurred.  Upon the expiration or earlier termination of
this Lease, Landlord shall refund to Tenant any amount, without interest, by
which the amounts paid by Tenant, when added to the net amount, if any,
recovered by Landlord through any reletting of the Premises, exceeds the
amounts payable by Tenant under this Lease. 
If, in connection with any reletting, the new lease term extends beyond
the existing term, or the premises covered thereby include other premises not
part of the Premises, a fair apportionment of the rent received from such
reletting and the expenses incurred in connection therewith will be made in
determining the net amount recovered from such reletting.

13.5 [intentionally omitted]

13.6 Suits by Landlord.  Actions or suits for the recovery of amounts
and damages payable under this Lease may be brought by Landlord from time to
time, at Landlord’s election, and Landlord shall not be required to await the
date upon which the Lease Term would have expired to bring any such action or
suit.

 

 21

 

13.7 Recovery of Landlord
Enforcement Costs.  All costs and
expenses incurred by Landlord in connection with collecting any amounts and
damages owing by Tenant pursuant to the provisions of this Lease or to enforce
any provision of this Lease, including reasonable attorneys’ fees, whether or
not any action is commenced by Landlord, shall be paid by Tenant to Landlord
upon demand.

13.8 Administrative Late Charge.  Other remedies for nonpayment of rent
notwithstanding, if the monthly rental payment is not received by Landlord on
or before the fifth day of the month for which the rent is due, or if any other
payment due Landlord by Tenant is not received by Landlord on or before the
last day of the month next following the month in which Tenant was invoiced, an
Administrative Late Charge of five percent (5%) of such past due amount shall
be come due and payable in addition to such amounts owed under this Lease to
help defray the additional cost to Landlord for processing such late payments.

13.9 Interest on Past-Due
Payments and Advances.  Tenant
covenants and agrees to pay to Landlord interest on demand at the rate of
fifteen percent (15%) per annum, compounded on a monthly basis, on the amount
of any Monthly Rent, Monthly Deposit or other charges not paid when due, from
the date due and payable, and on the amount of any payment made by Landlord
required to have been made by Tenant under this Lease and on the amount of any
costs and expenses, including reasonable attorneys’ fees, paid by Landlord in
connection with the taking of any action to cure any Default by Tenant, from
the date of making any such payment or the advancement of such costs and
expenses by Landlord.

13.10   Landlord’s Bankruptcy Remedies.  Nothing contained in this Lease shall limit
or prejudice the right of Landlord to prove and obtain as liquidated damages in
any bankruptcy, insolvency, receivership, reorganization or dissolution
proceeding, an amount equal to the maximum allowable by any statute or rule of
law governing such proceeding in effect at the time when such damages are to be
proved, whether or not such amount be greater, equal or less than the amounts
recoverable, either as damages or rent, under this Lease.

13.11   Remedies Cumulative. 
Exercise of any of the remedies of Landlord under this Lease shall not
prevent the concurrent or subsequent exercise of any other remedy provided for
in this Lease or otherwise available to Landlord at law or in equity.

ARTICLE 14

SURRENDER AND HOLDING OVER

14.1 Surrender upon Lease.  Upon the expiration or earlier termination of
this Lease, or on the date specified in any demand for possession by Landlord
after any Default by Tenant, Tenant covenants and agrees to surrender possession
of the Premises to Landlord broom clean, with all lighting, doors, and
electrical and mechanical systems (including, without limitation, all HVAC
facilities) in good working order and condition, all walls in clean condition
and holes or punctures in the walls repaired, and otherwise in the same
condition as when Tenant first occupied the Premises, ordinary wear and tear
excepted.

14.2 Holding Over.  If Tenant shall hold over after the
expiration of the Lease Term, without written agreement providing otherwise,
Tenant shall be deemed to be a tenant at sufferance, at a monthly rental,
payable in advance, equal to one hundred fifty percent (150%) the Monthly
Rental due during the last month of the Lease Term, and Tenant shall be bound
by all of the other terms, covenants and agreements of this Lease.  Nothing contained herein shall be construed
to give Tenant the right to hold over at any time, and Landlord may exercise
any and all remedies at law or in equity to recover possession of the Premises,
as well as any damages incurred by Landlord, due to Tenant’s failure to vacate
the Premises and deliver possession to Landlord as herein provided.

 22
 

ARTICLE 15

TENANT RIGHT OF FIRST REFUSAL

15.1 Right of First Refusal.  Landlord hereby grants to Tenant, for a
period of six (6) months commencing on the Commencement Date (the “ROFR
Period”), a right of first refusal with respect to leasable space in the
Building contiguous to the Premises (collectively, the “First Refusal Space”).  Tenant’s right of first refusal shall be on
the terms and conditions set forth in this Article.

15.2 Procedure for ROFR Notice.  Landlord shall notify Tenant (the “ROFR
Notice”) from time to time during the ROFR Period when Landlord receives an
offer acceptable to Landlord for lease of the First Refusal Space.  The ROFR Notice shall describe the space
applicable in the offer and the proposed term, as well as the proposed economic
terms included in such offer (the “Economic Terms”).

15.3 Procedure for Acceptance.  If Tenant wishes to exercise Tenant’s
right of first refusal with respect to the space described in the ROFR Notice,
then within five (5) calendar days after delivery of the ROFR Notice to Tenant,
Tenant shall deliver notice to Landlord of Tenant’s intention to exercise its
right of first refusal with respect to the entire space described in the ROFR
Notice. If concurrently with Tenant’s exercise of the first refusal right,
Tenant notifies Landlord that it does not accept the Economic Terms set forth
in the ROFR Notice, Landlord and Tenant shall, for a period of twenty-one (21)
calendar days after Tenant’s exercise, negotiate in good faith to reach
agreement as to such Economic Terms.  If
Tenant does not so notify Landlord that it does not accept the Economic Terms
set forth in the ROFR Notice concurrently with Tenant’s exercise of the first
refusal right, the Economic Terms shall be as set forth in the ROFR Notice. In
addition, if Tenant does not exercise its right of first refusal within the
five (5) calendar-day period, or, if Tenant exercises its first refusal right
but timely objects to Landlord’s determination of the Economic Terms and if
Landlord and Tenant are unable to reach agreement on such Economic Terms within
said twenty-one (21) calendar-day period, then Landlord shall be free to lease
the space described in the ROFR Notice to the tenant that delivered the
original offer, and Tenant’s right of first refusal shall terminate as to the
space described in the ROFR Notice. Notwithstanding anything to the contrary
contained herein, Tenant must elect to exercise its right of first refusal, if
at all, with respect to all of the space identified in an ROFR Notice, and
Tenant may not elect to lease only a portion thereof.

15.4 Lease of
First Refusal Space.  If Tenant timely exercises Tenant’s
right to lease the space described in the ROFR Notice as set forth herein,
Landlord and Tenant shall execute, within fifteen (15) days after such
exercise, an amendment adding such First Refusal Space to this Lease upon the
same non-economic terms and conditions as applicable to the Premises and the
Economic Terms as provided in this Article.

15.5 No Defaults.  The rights contained in this Article
are personal to Tenant, and may only be exercised by Tenant (and not any other
assignee, sublessee or other transferee of the Tenant’s interest in this Lease)
Tenant shall not have the right to lease First Refusal Space as provided in
this Article if, as of the date of the ROFR Notice, or, at Landlord’s option,
as of the scheduled date of delivery of such First Refusal Space to Tenant, a
Default by Tenant exists under this Lease (and has not been cured within any
applicable grace or cure period provided herein).

 23
 

ARTICLE 16

TENANT RIGHT OF FIRST OFFER

16.1 Right of First Offer.  Upon the expiration of the Right of First
Refusal set forth in Article 15, Landlord hereby grants to Tenant a right of
first offer with respect to leasable space in the Building contiguous to the
Premises (collectively, the “First Offer Space”).  Notwithstanding the foregoing: (a) such first
offer right of Tenant shall commence only following the expiration or earlier
termination of (i) any existing lease pertaining to the First Offer Space, and
(ii) as to any First Offer Space that is vacant as of the date of this Lease,
the first lease pertaining to any portion of such First Offer Space entered
into by Landlord after the date of this Lease (collectively, the “Superior
Leases”), including any renewal or extension of such existing or future lease,
whether or not such renewal or extension is pursuant to an express written
provision in such lease, or whether any such renewal or extension is
consummated pursuant to a lease amendment or a new lease; and (b) such first
offer right shall be subordinate and secondary to all rights of expansion, first
refusal, first offer or similar rights granted to (1) the tenants of the
Superior Leases, and (2) any other tenant of the Building or Property under a
lease existing as of the date hereof (the rights described in items (a) and (b)
above to be known collectively as “Superior Rights”).  Tenant’s right of first offer shall be on the
terms and conditions set forth in this Article.

16.2 Procedure for Offer.  Landlord shall notify Tenant (the “First
Offer Notice”) from time to time when Landlord determines that Landlord shall
commence the marketing of any First Offer Space because such space shall be or
become available for lease to third parties, where no holder of a Superior
Right desires to lease such space. The First Offer Notice shall describe the
space so offered to Tenant and shall set forth Landlord’s proposed economic
terms and conditions applicable to Tenant’s lease of such space, including the
proposed term (collectively, the “Economic Terms”). Notwithstanding the
foregoing, Landlord’s obligation to deliver the First Offer Notice shall not
apply during the last six months of the Term.

16.3 Procedure for Acceptance.  If Tenant wishes to exercise Tenant’s
right of first offer with respect to the space described in the First Offer
Notice, then within five (5) calendar days after delivery of the First Offer
Notice to Tenant, Tenant shall deliver notice to Landlord of Tenant’s intention
to exercise its right of first offer with respect to the entire space described
in the First Offer Notice. If concurrently with Tenant’s exercise of the first
offer right, Tenant notifies Landlord that it does not accept the Economic
Terms set forth in the First Offer Notice, Landlord and Tenant shall, for a
period of 21 calendar days after Tenant’s exercise, negotiate in good faith to
reach agreement as to such Economic Terms. 
If Tenant does not so notify Landlord that it does not accept the
Economic Terms set forth in the First Offer Notice concurrently with Tenant’s
exercise of the first offer right, the Economic Terms shall be as set forth in
the First Offer Notice. In addition, if Tenant does not exercise its right of
first offer within the five (5) calendar-day period, or, if Tenant exercises
its first offer right but timely objects to Landlord’s determination of the Economic
Terms and if Landlord and Tenant are unable to reach agreement on such Economic
Terms within said 21 calendar-day period, then Landlord shall be free to lease
the space described in the First Offer Notice to anyone to whom Landlord
desires and Tenant’s right of first offer shall terminate as to the space
described in the First Offer Notice. Notwithstanding anything to the contrary
contained herein, Tenant must elect to exercise its right of first offer, if at
all, with respect to all of the space offered by Landlord to Tenant at any
particular time, and Tenant may not elect to lease only a portion thereof.

16.4 Lease of First Offer Space.  If Tenant timely exercises Tenant’s
right to lease the space described in the First Offer Notice as set forth herein,
Landlord and Tenant shall execute, within fifteen (15) days after such
exercise, an amendment adding such First Offer Space to this Lease upon the
same 

 24
 

non-economic terms and conditions as applicable to the
Premises and the Economic Terms as provided in this Article.

16.5 No Defaults.  The rights contained in this Article
are personal to Tenant, and may only be exercised by Tenant (and not any other
assignee, sublessee or other transferee of the Tenant’s interest in this Lease)
Tenant shall not have the right to lease First Offer Space as provided in this
Article if, as of the date of the First Offer Notice, or, at Landlord’s option,
as of the scheduled date of delivery of such First Offer Space to Tenant, a
Default by Tenant exists under this Lease (and has not been cured within any
applicable grace or cure period provided herein).

ARTICLE 17

MISCELLANEOUS

17.1 No Implied Waiver.  No failure by Landlord to insist upon the
strict performance of any term, covenant or agreement contained in this Lease,
no failure by Landlord to exercise any right or remedy under this Lease, and no
acceptance of full or partial payment during the continuance of any Default by
Tenant, shall constitute a waiver of any such term, covenant or agreement, or a
waiver of any such right or remedy, or a waiver of any such Default by Tenant.

17.2 Survival of Provisions.  Notwithstanding any termination of this
Lease, the same shall continue in force and effect as to any provisions hereof
which require observance or performance by Landlord or Tenant subsequent to
termination.

17.3 Covenants Independent.  This Lease shall be construed as if the
Covenants herein between Landlord and Tenant are independent, and not
dependent, and Tenant shall not be entitled to any offset against Landlord if
Landlord fails to perform its obligations under this Lease.

17.4 Covenants as Conditions.  Each provision of this Lease performable by
Tenant shall be deemed both a covenant and a condition.

17.5 Tenant’s Remedies.  Tenant may bring a separate action against
Landlord for any claim Tenant may have against Landlord under this Lease,
provided Tenant shall first give written notice thereof to Landlord and shall
afford Landlord a reasonable opportunity to cure any such default.  In addition, Tenant shall send notice of such
default by certified or registered mail, postage prepaid, to the holder of any
mortgage or deed of trust covering the Premises, the Property or any portion
thereof of whose address Tenant has been notified in writing, and shall afford
such holder a reasonable opportunity to cure any default on Landlord’s
behalf.  In no event will Landlord be
responsible for any incidental, consequential or special damages incurred by
Tenant, including, but not limited to, loss of profits or interruption of business
as a result of any default by Landlord hereunder.

17.6 Binding Effect.  This Lease shall extend to and be binding
upon the heirs, executors, legal representatives, successors and assigns of the
respective parties hereto.  The terms,
covenants, agreements and conditions in this Lease shall be construed as
covenants running with the Land.

17.7 Short Form Lease.  This Lease shall not be recorded, but Tenant
agrees, at the request of Landlord, to execute a short form lease for
recording, containing the names of the parties, a description of the Premises
and the Lease Term.

 25
 

17.8 Notices and Demands.  All notices, demands or billings under this
Lease shall be in writing, signed by the party giving the same and shall be
deemed properly given and received when actually given and received or three
business days after mailing, if sent by registered or certified United States
mail, postage prepaid, addressed to the party to receive the notice at the
address set forth for such party in the first paragraph of this Lease or at
such other address as either party may notify the other of in writing.  Any notice by Tenant to Landlord shall not be
effective until a copy thereof shall have been received by or transmitted in
the same manner to Landlord’s counsel at the address set forth in the Summary
of Basic Lease Terms or such other address as Landlord may from time to time
notify Tenant in writing.

17.9 Force Majeure. In
the event that Landlord shall be delayed or hindered in, or prevented from, the
performance of any act required hereunder by reason of strikes, lock-outs,
labor troubles, inability to procure materials, the inability to obtain
building inspections, approvals, or permits, stop work orders, the inability to
obtain a certificate of occupancy, failure of power or unavailability of
utilities, riots, insurrection, war or other reason of like nature not the
fault of Landlord, or not within its reasonable control, the performance of
such acts shall be excused for the period of delay, and the period for the performance
of any such act shall be extended for a period equivalent to the period of such
delay (including extension of both the commencement and expiration dates of
this Lease); provided, however, that if Tenant is not in any way responsible
for the delay and does not have use or occupancy of the Premises during the
period of delay, the rent and other charges payable hereunder shall be abated
for such period of delay.

17.10       Time of the Essence.  Time is of the essence under this Lease, and
all provisions herein relating thereto shall be strictly construed.

17.11       Captions for
Convenience.  The headings and
captions hereof are for convenience only and shall not be considered in
interpreting the provisions hereof.

17.12       Severability.  If any provision of this Lease shall be held
invalid or unenforceable, the remainder of this Lease shall not be affected
thereby, and there shall be deemed substituted for the affected provision a
valid and enforceable provision as similar as possible to the affected
provision.

17.13       Governing Law and
Venue.  This Lease shall be
interpreted and enforced according to the laws of the State of Colorado.  Any action or proceeding arising out of this
Lease, its modification or termination, or the performance or breach of either
party hereto, shall be brought exclusively in courts of the state and county in
which the Property is located.  The
parties agree that such courts are a convenient forum and waive any right to
alter or change venue, including removal. 
THE PARTIES IRREVOCABLY WAIVER ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR PERTAINING IN ANY WAY TO THIS LEASE.

17.14       Entire
Agreement/Further Assurances.  This
Lease and any exhibits and addenda referred to herein, constitute the final and
complete expression of the parties’ agreement with respect to the Premises and
Tenant’s occupancy thereof.  Each party
agrees that it has not relied upon or regarded as binding any prior agreements,
negotiations, representations or understandings, whether oral or written,
except as expressly set forth herein. The parties agree that if there should be
any clerical or typographical errors in this Lease, the Summary of Basic Lease
Terms, any exhibit or addendum hereto, the party requested to do so will use
its reasonable, good faith efforts to execute such corrective instruments or do
all things necessary or appropriate to correct such errors.  Further, the parties agree that if it becomes
necessary or desirable to execute further instruments or to make other
assurances, the party requested to do so will use its reasonable, 

 26
 

good faith efforts to provide such executed
instruments or do all things reasonably necessary or appropriate to carry out
this Lease.

17.15       No Oral Amendment
or Modifications.  No amendment or
modification of this Lease, and no approvals, consents or waivers by Landlord
under this Lease, shall be valid and binding unless in writing and executed by
the party to be bound.

17.16       Real Estate Brokers.  Tenant covenants to pay, hold harmless and
indemnify the Landlord from and against any and all cost, expense or liability
for any compensation, commissions, charges or claims by any broker or other
agent with respect to this Lease or the negotiation thereof other than the
broker(s) listed as the Broker(s), if any, on the Summary of Basic Lease Terms.

17.17       Relationship of
Landlord and Tenant.  Nothing
contained herein shall be deemed or construed as creating the relationship of
principal and agent or of partnership, or of joint venture by the parties
hereto, it being understood and agreed that no provision contained in this
Lease nor any acts of the parties hereto shall be deemed to create any
relationship other than the relationship of Landlord and Tenant.

17.18       Authority of Tenant.  Each individual executing this Lease on
behalf of Tenant represents and warrants that he or she is duly authorized to
deliver this Lease on behalf of Tenant and that this Lease is binding upon
Tenant in accordance with its terms.

*            *            *

 27
 

IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
executed the day and year first written above.

LANDLORD:

LONGBARREL PROPERTY LIMITED

PARTNERSHIP

By:              IRONWOOD INTERNATIONAL, LTD.

Its:               General Partner

	
  By:

  	
   

  	
   

  
	
   

  	
  Robert Gall, President

  	
   

  

 

TENANT:

SPECTRALINK CORPORATION

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 28

 

EXHIBIT A

LEGAL
DESCRIPTION OF LAND

PARCEL A:

LOT 2, LONGBOW PARK, COUNT OF BOULDER, STATE
OF COLORADO, THE PLAT OF WHICH WAS RECORDED FEBRUARY 7, 1973 IN PLAN FILE P-4,
F-2, NO. 22.

PARCEL B:

THE RIGHT TO CROSS SITES AS THE SAME ARE
DEFINED AND DESCRIBED IN THE DECLARATION OF THE PROTECTIVE COVENANTS FOR
LONGBOW PARK RECORDED APRIL 24, 1973 ON FILM 815 AS RECEPTION NO. 63447.

PARCEL C:

DRAINAGE EASEMENTS AS SHOWN ON THE RECORDED
SUBDIVISION PLAT OF LONGBOW PARK, COUNTY OF BOULDER, STATE OF COLORADO, RECORDED
FEBRUARY 7, 1973 IN PLAN FILE P-4, F-2, NO. 22, AS A BENEFIT TO SUBJECT
PROPERTY ESTABLISHED IN THE COVENANT CONCERNING MAINTENANCE OF DRAINAGE
FACILITIES IN LONGBOW PARK RECORDED APRIL 23, 1973 ON FILM 815 AS RECEPTION NO.
63689 AND MAY 16, 1974 ON FILM 853 AS RECEPTION NO. 103029.

EXHIBIT B

LOCATION OF
PREMISES WITHIN BUILDING

[Attached]

EXHIBIT C

NOTICE OF
NON-LIABILITY FOR MECHANICS’ LIENS

Pursuant to C.R.S. § 38-22-105,
LONGBARREL PROPERTY LIMITED PARTNERSHIP, the owner of these premises, located
at 6175 Longbow Drive, Boulder, Colorado, hereby gives notice to all persons
performing labor or furnishing skill, materials, machinery, or other fixtures
in connection with any construction, alteration, removal, addition, repair or
other improvement on or to these premises, that the owner shall not be liable
therefor and the interests of said owner shall not be subject to any lien for
the same.

 

 

EXHIBIT D

WORK LETTER

This Work Letter (“Work Letter”)
shall be part of that certain Lease, dated                         ,
2005 (“Lease”), between LONGBARREL PROPERTY LIMITED PARTNERSHIP, a Colorado
limited partnership (“Landlord”), whose address is 3946 Promontory Court,
Boulder, Colorado 80304, and SPECTRALINK CORPORATION, a Delaware corporation (“Tenant”),
whose principal address is 6175 Longbow Drive, Colorado 80301.  All capitalized terms used but not otherwise
defined in this Work Letter shall have the meanings ascribed such terms in the
Lease.

1.            Tenant Improvements.   Tenant shall complete
build-out of the Premises for Tenant’s desired use and for improvement of the
Property (the “Tenant Improvements”). 
Tenant shall construct the Tenant Improvements in accordance with the
terms of this Work Letter and shall obtain the building permit and all other
permits, licenses and inspections necessary for the proper execution and
completion of the Tenant Improvements. 
All Tenant Improvements shall be completed in accordance with the terms
of this Work Letter, all permits and approvals and all applicable laws, rules
and regulations and in a good and workmanlike manner.  All Tenant Improvements shall become a part
of the Premises and shall become the property of Landlord at the expiration or
termination of the Lease.

2.             Delivery
of Premises.  Landlord shall deliver,
on or promptly after mutual execution of the Lease, the Premises to Tenant
clean and free of debris in its as-is condition.

3.            Approval of Plans and Specifications.  Tenant’s architect/engineer shall prepare
plans and specifications (stamped by the architect/engineer) for Tenant
Improvements to be completed in the Premises (the “Plans and Specifications”).  The Plans and Specifications shall (i) be
compatible with the design, construction and equipment of the Building, (ii)
comply with all applicable laws, rules and regulations, (iii) be capable of
logical measurement and construction, (iv) contain all such information as may
be required for the construction of the Tenant Improvements, and (v) contain
all partition locations, plumbing locations, air conditioning system and duct
work, special air conditioning or venting requirements, reflected ceiling
plans, office equipment locations and special security systems.  All costs of preparation, review and
approval, including review and approval by Landlord, Landlord’s architect
and/or Landlord’s engineer, shall be borne by Tenant.  Within ten (10) business days after receipt
by Landlord of the Plans and Specifications, Landlord (i) shall give its
written approval thereto or (ii) if Landlord reasonably disapproves of the work
reflected in the Plans and Specifications, Landlord shall request other
revisions or modifications therein. 
Within five (5) business days following receipt by Landlord of such
revisions or modifications, Landlord shall give its written approval thereto or
shall request other revisions or modifications therein (but relating only to
the extent Tenant has failed to comply with Landlord’s earlier requests).  The procedure set forth in the two preceding
sentences shall be implemented repeatedly until Landlord has given its written
approval of the Plans and Specifications (hereinafter referred to as the “Approved
Plans and Specifications”).  Changes to
the Approved Plans and Specifications shall be made only upon prior written
approval of Landlord and shall be at Tenant’s sole cost and expense.  Delivery of all plans and drawings referred
to in this Section shall be by messenger service or personal hand delivery,
unless otherwise agreed by Landlord and Tenant.

4.             Tenant’s Contractor.  Tenant’s contractor and all subcontractors
shall be approved in writing by Landlord. 
Tenant shall contract directly for the Tenant Improvements to be
completed in accordance with the Approved Plans and Specifications.  Tenant’s contractor shall bill Tenant and
Tenant shall be solely responsible for paying all costs for the Tenant
Improvements as set forth on the Approved 

Plans and Specifications.  Tenant and Tenant’s contractor will be
required to adhere to the requirements set forth in this Work Letter in
connection with performance of the Tenant Improvements.  All Tenant Improvements shall: (i) be
performed pursuant to written contracts with workmen and mechanics, which shall
be acceptable to Landlord; (ii) comply with all reasonable restrictions and
requirements as Landlord may impose with respect to the Tenant Improvements;
(iii) conform to the standards of the Building; (iv) be done in a safe and
lawful manner in compliance with applicable laws, governmental regulations and
requirements; and (v) be done so as not to interfere with any other tenants in
the Building.

5.             Cost Estimate Creation.  Tenant shall obtain and provide to Landlord a
cost estimate (the “Cost Estimate”) from the contractor used by Tenant for
construction of the Tenant Improvements. 
The Cost Estimate shall be based on the Approved Plans and
Specifications and shall include contractor’s overhead, profits and all fees.
If Landlord disputes the estimate (or any portion of it), Tenant shall provide
adequate substantiation of the disputed amount(s). Landlord shall have three
(3) business days after receipt of each Cost Estimate (and adequate
substantiation for any disputed amount) to approve or disapprove it.

6.             Project Schedule. Tenant shall obtain a
construction schedule (the “Construction Schedule”) from the contractor for the
construction of Tenant Improvements. Such Construction Schedule shall be
attached hereto and become a part hereof.

7.            Change Orders.  In the event that Tenant requests any changes
to the Approved Plans and Specifications (each a “Tenant Change Order”),
Landlord shall not unreasonably withhold its consent to any such changes,
provided the changes do not create a design problem.  Upon Landlord’s approval of a Tenant Change
Order, the parties shall execute a written Change Order specifying the change
in the Tenant Improvements.  The
additional cost, if any, related to any Tenant Change Order shall be paid by
Tenant.

8.             Mechanic’s Liens.  Tenant and Tenant’s contractor shall
indemnify Landlord from any mechanic’s or materialmen’s lien against Landlord’s
interest in the Property.  If a lien is
filed, Tenant or Tenant’s contractor shall, at Landlord’s option:  (i) remove the lien by paying it in full,
(ii) furnish Landlord a bond sufficient to discharge the lien, or (iii) deposit
in an escrow approved by Landlord 150% of the amount of such lien.  In the event Tenant or Tenant’s contractor
shall fail to remove the lien, provide a bond or cash escrow, Tenant shall
immediately be in default under the Lease without the necessity of further
notice from Landlord and Landlord shall be entitled to take such action at law,
in equity or under the Lease as Landlord deems appropriate and Tenant shall be
responsible for all monies Landlord may pay in discharging any lien including
all costs and reasonable attorneys’ fees incurred by Landlord in settling,
defending against, appealing or in any manner dealing with the lien.

9.             Insurance.  Prior to commencing the Tenant Improvements,
Tenant will deliver the following to Landlord in form and amount reasonably
satisfactory to Landlord: (a) demolition (if applicable) and payment and
performance bonds, (b) builder’s “all risk” insurance in an amount at least equal
to the replacement value of the Building (excluding the Land, foundation,
grading costs and excavation costs), (c) evidence that Tenant and each of
Tenant’s contractors have current liability insurance insuring against
construction related risks, in at least the form, amounts and coverages
required of Tenant under Article 6 of the Lease, (d) worker’s compensation
insurance and proof thereof, and (e) copies of all applicable contracts and
necessary permits and licenses. The insurance policies described in clauses (b)
and (c) of this section must name Landlord, Landlord’s lender (if any) and the
Property manager (if any) as additional insureds.

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10.          Payment of Tenant Improvements.

A.   Landlord
agrees to pay up to a maximum amount of $100,000.00 (the “Allowance”) to Tenant
for completion of the Tenant Improvements. 
The first $50,000.00 of such Allowance shall be paid on the date the
Landlord provides written approval of the Plans and Specifications and the Cost
Estimate; provided, however, Landlord’s payment of the Allowance shall not
become due until Tenant submits to Landlord (i) proof of insurance as required
in Paragraph 9 of this Work Letter; and (ii) confirmation that Tenant has
posted in conspicuous locations and is maintaining on the Premises and Building
Notices of Owner’s Non-Liability in the form attached to the Lease as Exhibit C or in such other form as
Landlord may require.

B.   In addition to the Landlord’s rights and remedies provided in
Article 13 of the Lease, in the event of early termination of the Lease
resulting from a Default by Tenant, Tenant shall pay to Landlord upon such
termination all unrecovered (i) costs and
expenses of leasing commissions and lease incentive costs and expenses incurred
by Landlord in connection with the Lease, and (ii) Allowance costs, all of which have been amortized over the
term of the Lease at an interest rate of 8% per annum.

C.   The remaining balance of the Allowance shall be paid on the date
the Tenant Improvements have been completed in accordance with the Approved
Plans and Specifications and the provisions of this Work Letter.  Landlord’s payment of the remaining balance
of the Allowance shall not become due until Tenant submits to Landlord: (i) an
affidavit that all payrolls, bills for materials and any equipment and other
indebtedness connected with the Tenant Improvements for which Landlord or its
property might in any way be responsible, have been paid or otherwise
satisfied; (ii) a certificate by Landlord’s architect that the work is
complete; (iii) all certificates necessary for occupancy of the Premises issued
by the appropriate governmental authority permitting use of the Premises in
accordance with the Approved Plans and Specifications; and (iv) other data
establishing the final cost of the Tenant Improvements, payment or satisfaction
of all Tenant’s construction obligations such as receipts, releases and waivers
of liens arising out of the Tenant Improvements to the extent and in such form
as may be designated by Landlord.

D.   Any
cost of the Tenant Improvements in excess of the Allowance shall be paid by
Tenant as and when due.

E.   If Tenant elects, and Landlord agrees, to have Landlord’s
contractor perform all or any portion of the Tenant Improvements, the Allowance
(or the portions thereof applicable to the work performed by Landlord, as
applicable) shall be paid by Landlord to Landlord’s contractor or others
entitled to payment in accordance with Landlord’s standard disbursement
procedures upon receipt of documentation as Landlord may reasonably require
including, without limitation, lien waivers and architect’s certificates.  To the extent that the cost of the Tenant
Improvements exceeds the Allowance, Tenant shall pay all such amounts within
ten (10) calendar days after billing therefore from Landlord.  Partial billing may be made periodically as
the work progresses.  Landlord will
charge a 6% fee on the total cost of the work performed by Landlord for
construction management, which shall be deducted from the Allowance.

F.   All
costs attributable to design and construction of the Tenant Improvements
including, but not limited to, services, fees and expenses of Landlord’s
architect or engineers, costs of permits and licenses required for completion
of the Tenant Improvements, labor, material, fees and expenses of Landlord’s
contractor, if any, in completing the Tenant Improvements shall be paid from
the Allowance (as applicable).  To the
extent that such costs exceed the Allowance, Tenant shall pay all such 

 3
 

amounts within ten (10) calendar days after receipt of
billing therefor from Landlord or as and when due if billed directly to
Tenant.  Partial billing may be made
periodically as the work progresses.

11.           Cooperation; Approvals Not to be
Unreasonably Withheld.  Landlord and
Tenant shall cooperate with each other reasonably and in good faith to complete
the Tenant Improvements as contemplated herein. 
All approvals provided for herein to be given by Landlord or Tenant
shall not be unreasonably withheld, conditioned or delayed.  When work, services, consents or approvals
are to be provided by or on behalf of Landlord, the term “Landlord” shall
include Landlord’s agents, contractors, employees and affiliates.

12.           Tenant’s Representative.  Tenant has designated its Executive Vice
President of Operations, John Kelley, as the sole representative of Tenant with
respect to all approvals, consents and other matters set forth in this Work
Letter.  Tenant represents and warrants that
such representative shall have full authority and responsibility to act on
behalf of Tenant as required in this Work Letter.  Tenant shall have the right, by written
notice to Landlord, to change its designated representative.

Dated this         
day of September, 2005.

LANDLORD:

LONGBARREL PROPERTY LIMITED

PARTNERSHIP

By:              IRONWOOD INTERNATIONAL, LTD.

Its:               General Partner

	
  By:

  	
   

  	
   

  
	
   

  	
  Robert Gall, President

  	
   

  

 

TENANT:

SPECTRALINK CORPORATION

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 4

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