Document:

QuickLinks
 -- Click here to rapidly navigate through this document
  

Exhibit 10.11  

 
 

EMPLOYMENT AGREEMENT    
  

        This Employment Agreement ("Agreement") is made and entered into as of this 23rd day of March 2001, to become effective on the Commencement
Date (defined below) by and between eSoft, Inc., a Delaware corporation (the "Company"), and Jason Rollings, an individual person (the
"Executive"). 

 
 

RECITALS    
  

        WHEREAS, the Company desires to continue to employ the Executive to provide personal services to the Company in
exchange for certain compensation and benefits. 

        WHEREAS, the Executive desires to be employed by the Company and provide personal services to the Company in return for certain
compensation and benefits set forth in this Agreement. 

        WHEREAS, the Executive acknowledges that during the course of the Executive's employment the Executive will receive or be exposed to
certain confidential information and trade secrets (collectively referred to as "Confidential Information") of the Company. The Executive also acknowledges that this Confidential Information is among
the Company's most important assets and that the value of this Confidential Information would be diminished or extinguished by disclosure. 

        NOW, THEREFORE, in consideration of the mutual promises contained herein, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows: 

1.    EMPLOYMENT BY THE COMPANY.  

	1.1.
	The
Company hereby employs the Executive and the Executive hereby accepts continued employment with the Company in the capacity of Vice President of
Operations, beginning March 1, 2001("Commencement Date").

	1.2.
	Executive
shall serve in an executive capacity and shall perform such duties as are customarily associated with his then current titles, consistent with the Bylaws of the Company and
as required by the Company's President, and shall primarily report to the President of the Company.

	1.3.
	The
employment relationship between the parties shall also be governed by the general employment policies and practices of the Company, including those relating to protection of
confidential information and assignment of inventions, except that when the terms of this Agreement differ from or are in conflict with the Company's general employment policies or practices, this
Agreement shall control.

	1.4.
	The
Company and Executive each acknowledge that either party has the right to terminate Executive's employment with the Company at any time for any reason whatsoever, with or without
Cause (as defined below) or with or without advance notice. This at-will employment relationship cannot be changed except in a writing signed by both Executive and the President. 

2.    COMPENSATION  

	2.1.
	Salary. The Executive shall receive, for services to be rendered under this Agreement, abase salary ("Base Salary") equal to $10,000
per month. Such Base Salary shall commence as of the Commencement Date, and shall be payable consistent with the Company's payroll policies. Executive's Base Salary shall be reviewed at least
annually, and in the President's sole discretion, may be increased at any time. 

Page 1

 

	2.2.
	Bonus. The Executive shall be eligible to receive a performance bonus based upon mutually agreed company and department performance
criteria for each fiscal quarter of the Company completed during the term of this Agreement. The target bonus pay shall be set forth in the quarterly incentive bonus plan document to be mutually
determined by the Executive and the President on a quarterly basis. The payment of the Executive's incentive pay shall be made as soon as practicable but no later than sixty (60) days following
the end of the quarter, provided that the Executive is still employed by the Company at the end of the quarter for which the bonus is calculated or earned.

	2.3.
	Benefits. The Executive shall be eligible to participate in such insurance programs (health, disability or life) or such other health,
dental, retirement or similar employee benefits programs as the Board may approve, on a basis comparable to that available to other officers and executive employees of the Company. The Executive shall
be entitled paid time off in accordance with the Company's Employee Policies. The value of any accrued by unused and unforfeited vacation time shall be paid in cash to the Executive upon termination
of Executive's employment for any reason.

	2.4.
	Reimbursement of Expenses. The Company shall reimburse the Executive in a timely manner for all reasonable
out-of-pocket expenses incurred by the Executive in connection with the performance of Executive's duties under this Agreement, provided that the Executive presents to the
Company an itemized accounting of such expenses including reasonable supporting data and follows the Company's travel policies. 

3.    TERMINATION.  

	3.1.
	Termination. Executive and the Company each acknowledge that either party has the right to terminate Executive's employment with the
Company at any time for any reason whatsoever, with or without cause or advance notice pursuant to the following.

	3.2.
	Termination by the Company without Cause. The Company may, by delivering thirty (30) days' prior written notice to the
Executive, terminate the Executive's employment at any time without Cause (as hereinafter defined). In the event of termination without Cause, the Executive shall be entitled to receive Executive's
then current salary and benefits, payable in semi-monthly installments, for greater of six (6) months or that number of months which equals the number of years that have elapsed
from October 12, 1997 until the date of Executive's termination, provided that Executive executes a release of claims against the Company similar to the release attached hereto as  Exhibit A.

	3.3.
	Voluntary Resignation by Executive. Executive may voluntarily terminate employment with the Company at any time with or without
notice, and with or without reason by delivering thirty (30) days' prior written notice to the Company. In the event that Executive voluntarily terminates his employment, Executive's salary
shall cease on the termination date and Executive will not be entitled to
severance pay, pay in lieu of notice or any other such compensation other than payment of accrued salary and vacation and other benefits as expressly required in such event by applicable law or the
terms of applicable benefit plans. All stock options shall cease vesting as of the date of termination.

	3.4.
	Termination by the Company for Cause. The Company may terminate the Executive's employment for Cause immediately upon written notice
stating the basis for such termination. If the Company terminates Executive's employment for Cause (as defined below), Executive's salary shall cease on the date of termination and Executive shall not
be entitled to severance pay, pay in lieu of notice or any other compensation other than payment of accrued salary and vacation and such other benefits as expressly required in such event by
applicable law or the 

Page 2

 

terms
of applicable benefit plans. All stock options shall cease vesting as of the date of termination. 

	3.5.
	Cause. For the purposes of this Agreement, "Cause" shall mean the occurrence of one or more of the following: (i) the material
violation of any of the terms and conditions of this Agreement or any written agreements the Executive may from time to time have with the Company; (ii) inattention to or the continued failure
of the Executive to perform substantially the Executive's duties with the Company or one of their affiliates (other than any such failure resulting from incapacity due to physical or mental illness or
injury), after a written demand for substantial performance is delivered to the Executive by the President which specifically identifies the manner in which the President believes that the Executive
has not substantially performed the Executive's duties, or (iii) engaging in activities or conduct injurious to the reputation of the Company or its affiliates including, without limitation,
engaging in immoral acts which become public information or repeatedly conveying to one person, or conveying to an assembled public group, negative information concerning the Company or its
affiliates; (iv) commission of an act of dishonesty, including, but not limited to, misappropriation of funds or any property of the Company; or (v) commission by the Executive of an act
which constitutes a misdemeanor (involving an act of moral turpitude) or a felony. Executive's physical or mental disability or death shall not constitute Cause hereunder.

	3.6.
	Termination by the Executive for Good Reason. The Executive may terminate employment for Good Reason immediately upon written notice
stating the basis for such termination, provided Executive gives notice within 90 days following the occurrence of a "Good Reason" event. For the purposes of this Agreement, "Good Reason" means
the occurrence of one or more of the following events: (i) Executive is asked to relocate to a work site that would increase Executive's one-way commute distance by more than 50
miles from Executive's residence in the greater Denver-Boulder metropolitan area and Executive elects not to accept such relocation opportunity; (ii) material breach of this Agreement by
Company that is not cured within thirty (30 days written notice of such breach by Company; or (iii) a material reduction (any reduction that exceeds 10% of salary) in Executive's
compensation without the Executive's consent. In the event of termination with Good Reason, the Executive shall be entitled to receive Executive's then current salary and benefits, payable in
semi-monthly installments, for greater of six (6) months or that number of months which equals the number of years that have elapsed from October 12, 1997 until the date of
Executive's termination, provided that Executive executes a release of claims against the Company similar to the release attached hereto as  Exhibit A.

	3.7.
	Termination Following Change in Control. If, within twelve (12) months following a Change of Control (defined below),
(i) Executive's employment with the Company is terminated without Cause (a "Change of Control Termination"), Executive shall be entitled to receive the following in exchange for executing a
release of claims against the Company similar to the release attached hereto as Exhibit A:

	3.7.1.
	Executive's
then current salary and benefits, payable in semi-monthly installments and less standard withholdings and deductions, for
greater of six (6) months or that number of months which equals the number of years that have elapsed from October 12, 1997 until the date of Executive's termination.

	3.7.2.
	Change of Control. For the purposes of this Agreement, Change of Control shall mean the happening of
any one of the following events: (1) a dissolution, liquidation or sale of substantially all of the assets of the Company; (2) a merger or consolidation in which the Company is not the
surviving corporation; or (3) a reverse merger in which the Company is the surviving corporation but the shares of the Common Stock outstanding 

Page 3

 

immediately
preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, or (4) the acquisition by any person, entity
or group within the meaning of Section 13(d) or 14(d)(2) of the Exchange Act, or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or
maintained by the Company or any parent or subsidiary corporation of the Company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act,
or comparable successor rule) of securities of the Company representing at least thirty percent (30%) of the combined voting power entitled to vote in the election of directors. 

	3.8.
	Termination for Illness, Disability or Incapacity of Executive. Executive's employment with the Company will be terminated in the
event of any illness, disability or other incapacity that renders Executive physically or mentally unable regularly to perform Executive's duties hereunder for a period in excess of one hundred twenty
(120) consecutive days or more than one hundred eighty (180) days in any consecutive twelve (12) month period, subject to applicable law. The determination regarding whether
Executive is physically or mentally unable regularly to perform Executive's duties shall be made by the President. Executive's inability to be physically present on the Company's premises shall not
constitute a presumption that Executive is unable to perform such duties. All stock options shall cease vesting as of the date of termination.

	3.9.
	Termination on Executive's Death. In the event of the death of the Executive, except with respect to any benefits that have accrued
and have not been paid to the Executive hereunder, the provisions of this Agreement shall terminate immediately. The Executive's estate shall have the right to receive payment of accrued salary and
vacation due to the Executive as of and to the date of Executive's death, an additional amount equal to one-twelfth (1/12th) of the Executive's annual compensation then in effect, and such
other benefits as expressly required in such event by applicable law or the terms of applicable benefit plans. All stock options shall cease vesting as of the date of termination. 

4.    PARACHUTE PAYMENT.  

	4.1.
	Parachute Payment Cutback. If any payment or benefit Executive would receive from the Company ("Total Payment") would
(i) constitute a "parachute payment" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) but for this sentence, be subject
to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then such Total Payment shall be reduced to an amount which results in no portion of the Total Payment being subject to
the excise tax. If a reduction in payments or benefits constituting "parachute payments" is necessary, such reduction shall occur in the following order unless Employee elects in writing a different
order (provided, however, that such election shall be subject to Company approval): reduction of the Severance Payment; cancellation or reduction of the
accelerated vesting of the Stock Option. Unless the Company and Employee otherwise agree in writing, any determination required shall be made in writing by the Company's independent public accountants
(the "Accountants"), whose determination shall be conclusive and binding upon Employee and the Company for all purposes. For purposes of making the calculations, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of sections 280G and 4999 of the Code. The Company and
Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make such a determination. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations contemplated by this paragraph 4(b). 

Page 4

 

5.    COVENANT NOT TO COMPETE.  

	5.1.
	During
the continuance of the Executive's employment hereunder and for a period of twelve (12) months after termination of the Executive's employment hereunder the Executive
shall not engage in any business which competes with the Company or its affiliates anywhere in the United States or Canada during the Executive's employment hereunder or at the time of termination.

	5.2.
	The
Executive shall not, for a period of twelve (12) months after termination of the Executive's employment hereunder, interfere with the Company's business by soliciting,
attempting to solicit, inducing, or otherwise causing any employee of the Company to terminate his or her employment in order to become an employee, consultant, or independent contractor to or for the
Executive or any other person or entities. Executive agrees that this restriction is reasonably necessary to protect the Company's legitimate business interest in its substantial relationships with
employees, consultants, and independent contractors and its valuable confidential business information.

	5.3.
	Should
the terms of this Section 4 of this Agreement conflict with the terms of Executive's Confidentiality Agreement, the broader provision of the two agreements shall
control. 

6.    TRADE SECRETS AND CONFIDENTIAL INFORMATION.  

	6.1.
	Agreement. Executive agrees to execute and abide by eSoft's Confidentiality Agreement ("Confidentiality Agreement"), attached hereto
as Exhibit B. If Executive fails to execute the Confidentiality Agreement, Executive's commencement of employment with the Company shall
constitute acceptance of all the terms and provisions in the Confidentiality Agreement.

	6.2.
	Remedies. Executive's duties under the Confidentiality Agreement shall survive termination of his employment with the Company.
Executive acknowledges that a remedy at law for any breach or threatened breach by him of the provisions of the Confidentiality Agreement would be inadequate, and he therefore agrees that the Company
shall be entitled to injunctive relief in case of any such breach or threatened breach. 

7.    OUTSIDE ACTIVITIES.  

	7.1.
	Except
with the prior written consent of the President, Executive will not during the term of this Agreement undertake or engage in any other employment, occupation or business
enterprise, other than ones in which Executive is a passive investor. Executive may engage in civic and not-for-profit activities and may, upon notice to the President, serve
as a member of Boards of Directors of companies not deemed to be engaged in competition with the Company so long as such activities do not materially interfere with the performance of his duties
hereunder.

	7.2.
	Except
as permitted by Section 6.3, Executive agrees not to acquire, assume, or participate in (directly or indirectly) any position, investment or interest known by him to be
adverse or antagonistic to the Company, its business, or its prospects, financial or otherwise.

	7.3.
	During
the term of his employment by the Company, except on behalf of the Company, Executive will not have any direct or indirect business connection or interest, in any capacity
whatsoever, with any other person or entity known by him to compete directly with the Company, throughout the world, in
any line of business engaged in (or planned to be engaged in) by the Company. Nothing in this paragraph shall bar Executive from owning securities of any competitor corporation as a passive investor,
so long as his aggregate direct holdings in any one such corporation shall not constitute more than 1% of the voting stock of that corporation. 

Page 5

 

8.    GENERAL PROVISIONS.  

	8.1.
	Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of (i) personal
delivery (including delivery by fax or overnight courier) or (ii) the third day after mailing by first-class mail, to the Company at its primary office location and to Executive at his address
as then listed in the Company's payroll records. Notices shall be provided to the Company at eSoft, Inc., to the attention of the President, at 295 Interlocken Blvd, #500, Broomfield, Colorado
80021, and to the Executive, at 1164 Hillside Lane, Louisville, Colorado, 80027. Notification addresses may be changed with written notice.

	8.2.
	Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be invalid, illegal, or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity,
illegality, or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed and construed in such jurisdiction so as to render it enforceable
under applicable law insofar as possible consistent with the intent of the parties.

	8.3.
	Injunctive Relief. The Executive agrees that any violation by Executive of the provisions contained in Sections 5 and/or 6 are likely
to cause irreparable damage to the Company, and therefore Executive agrees that if there is a breach or threatened breach by the Executive of the provisions of said sections, the Company shall be
entitled to pursue an injunction restraining the Executive from such breach, and Executive will make no objection to the form of relief sought. Nothing herein shall be construed as prohibiting the
Company from pursuing any other available remedies for such breach or threatened breach.

	8.4.
	Waiver. If either party should waive any breach of any provisions of this Agreement, that party shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of this Agreement.

	8.5.
	Complete Agreement. This Agreement, together with Exhibit A and  Exhibit B, constitute the entire agreement between Executive and the Company and it is the complete, final, and exclusive embodiment of their
agreement with regard to this subject matter and supersedes all prior letter agreements and understandings between the parties. It is entered into without reliance on any promise or representation
other than those expressly contained herein, and it cannot be modified or amended except in a writing signed by both the Executive and the President.

	8.6.
	Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same Agreement.

	8.7.
	Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof or
be deemed to affect the meaning thereof.

	8.8.
	Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the
Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any duties hereunder and may not assign any rights hereunder without the
written consent of the Company, which shall not be withheld unreasonably.

	8.9.
	Non-Publication. The parties mutually agree not to disclose publicly the terms of this Agreement except to the extent that
disclosure is mandated by applicable law or such disclosure is to the parties' respective attorneys, accountants, other advisors, and immediate family. 

Page 6

 

	8.10.
	Agreement Controls. In the event of a conflict between the text of the Agreement and any summary,
description or other information regarding the Agreement, the text of the Agreement shall control.

	8.11.
	Attorneys' Fees. If either party hereto brings any action to enforce his or its rights hereunder, each
party in any such action shall be responsible for his or its costs and attorneys fees incurred in connection with such action.

	8.12.
	Taxes. Executive agrees to be responsible for the payment of any taxes due on any and all compensation,
stock option, or benefit provided by the Company pursuant to this Agreement. Executive agrees to indemnify the Company and hold the Company harmless from any and all claims or penalties asserted
against the Company for any failure to pay taxes due on any compensation, stock option, or
benefit provided by the Company pursuant to this Agreement. Executive expressly acknowledges that the Company has not made, nor herein makes, any representation about the tax consequences of any
consideration provided by the Company to Executive pursuant to this Agreement.

	8.13.
	Governing Law: Personal Jurisdiction and Venue. This Agreement and all disputes relating to this
Agreement shall be governed in all respects by the laws of the State of Colorado as such laws are applied to agreements between Colorado residents entered into and performed entirely in Colorado. The
Parties acknowledge that this Agreement constitutes the minimum contacts to establish personal jurisdiction in Colorado and agree to Colorado court's exercise of personal jurisdiction. The Parties
further agree that any disputes relating to this Agreement shall be brought in courts located in the State of Colorado.

	8.14.
	Right to Work. As required by law, this offer of employment is subject to satisfactory proof of
Executive's right to work in the United States. 

 
 

SIGNATURES    
  

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

	

 	
 	

THE COMPANY:
	

 	
 	

By: /s/  JEFFREY FINN      
 Name: Jeffrey Finn

Title: Chief Executive Officer
	

 	
 	

THE EXECUTIVE:
	

 	
 	

By: /s/  JASON ROLLINGS      
 Jason Rollings

Page 7

 
 
 

EXHIBIT A
  RELEASE    
  

In
consideration of the severance that I will receive under the attached agreement, I hereby release, acquit and forever discharge eSoft, Inc. and its officers, directors, agents, servants,
employees, attorneys, shareholders, successors, assigns, parents, subsidiaries and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys' fees,
damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of or in any way
related to agreements, events, acts or conduct at any time prior to and including the date I sign this Release, including but not limited to: all such claims and demands directly or indirectly arising
out of or in any way connected with my employment with the Company or the termination of that employment; claims or demands related to salary, bonuses, commissions, profit sharing, stock, stock
options, or any other equity or ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements, severance pay, or any other form of compensation; claims pursuant to any
federal, state or local law, statute, or cause of action including, but not limited to, the federal Civil Rights Act of 1964, as amended; the federal Americans with Disabilities Act of 1990; the
federal Age Discrimination in Employment Act ("ADEA"), as amended; the California Fair Employment and Housing Act, as amended; tort law; contract law; wrongful discharge; discrimination; harassment;
fraud; defamation; emotional distress; and breach of the implied covenant of good faith and fair dealing. 

If I am forty years of age or older at the time I execute this Release, the following provisions of this paragraph shall apply: I acknowledge that I am
knowingly and voluntarily waiving and releasing any rights I may have under the ADEA, and that the consideration given for the waiver and release in the preceding paragraph hereof is in addition to
anything of value to which I was already entitled. I further acknowledge that I have been advised by this writing that: (a) my waiver and release do not apply to any rights or claims that may
arise after the execution date of this Agreement; (b) I have been advised hereby that I should consult with an attorney prior to executing this Agreement (although I may voluntarily choose not
to do so); (c) I have twenty-one (21) days to consider this Agreement (although I may choose to voluntarily execute this Agreement earlier); (d) I have seven
(7) days following the execution of this Agreement by the parties to revoke the Agreement; (e) this Agreement will not be effective until the date upon which the revocation period has
expired, which shall be the eighth day after this Agreement is executed by me. 

	

 	
 	
AGREED:
	

 	
 	

By:

	

 	
 	

Date:

Page 8

 
 
 

EXHIBIT B
  
    eSoft, Inc.
  5335 Sterling Drive, Suite C
  Boulder, Colorado 80301
  
    EMPLOYEE CONFIDENTIALITY AGREEMENT

        THIS
AGREEMENT is between eSoft, Inc. (the "Company") and Jason Rollings an individual residing at 1164
Hillside Lane, Louisville, CO 80027 (the "Employee"), based on the following circumstances: 

        A.    The
Company owns and is developing several proprietary software products and services which are and will be maintained as trade secrets and unpublished copyrighted
materials (the "Company's products"). 

        B.    The
Employee is employed as a Vice President of Operations for the Company, and will be given complete access to and
substantial assistance from the Company's staff in understanding many of the Company's products and plans, including many of the Company's trade secrets and other confidential information. 

        C.    The
Company's products are developed at substantial expense and give the Company an advantage over its competitors, but only so long as they remain the secret and
proprietary information of the Company. 

        D.    The
Employee agreed to enter into this Agreement as a condition to his/her employment by the Company, understands that he/she will not be given access to confidential
information concerning the Company's products and plans until he/she enters into this Agreement and acknowledges that this Agreement is reasonable and necessary for the protection of the Company's
trade secrets and other
secret and confidential information, the protection of which allows the Company to continue in business and to continue to employ the Employee. 

THE
COMPANY AND THE EMPLOYEE agree to the following: 

        1.    Proprietary Rights of the Company. The Employee may participate in the development of the Company's products, marketing
materials, and/or business plans due to his/her involvement in the creative process with the Company's technical, development, marketing and/or management staff, and, to the extent of the Employee's
participation and contribution, all resulting products and product enhancements, marketing and/or business plan materials shall be deemed to be made for him, free from any claim or right of the
Employee. The Employee shall promptly inform the Company of any product or literature, or any component of either or both of them, in the development or creation of which he/she participated and shall
cooperate with the Company, even after the termination of his/her employment by the Company, in securing the product or literature as the Company's sole property, the Employee's cooperation shall be
without further compensation, although the Company shall reimburse the Employee for any reasonable, documented out-of-pocket expenses incurred by the Employee in so
cooperating. 

        2.    Confidentiality. The Employee acknowledges that all confidential information, as defined in this Agreement is made
available in the strictest confidence solely for the benefit and purposes of the Company and that unauthorized disclosure of confidential information would harm the Company's interests. Accordingly,
the Employee agrees that during his/her employment by the Company he/she will not directly or indirectly, use for himself or to the detriment of the Company or disclose to any party, other than as
directed or authorized by any officer of the Company, any confidential information. At the termination of the Employee's employment by the Company, the Employee shall promptly deliver all records and
copies of confidential information to the Company. 

Page 9

 

3.    Competitive Activity.

        a.    As an Employee of Another. The Employee agrees that during his/her employment by the Company he/she shall not engage in a
competitive business as an employee of or otherwise on behalf of any person, firm, partnership, corporation or other entity. 

        b.    As an Owner or Otherwise. The Employee agrees that during his/her employment by the Company he/she shall not engage,
directly or indirectly, in a competitive business as an owner, officer, partner, joint venture, principal or otherwise for himself. 

4.    Definitions.

        a.    Competitive Business. As used in this Agreement, "competitive business" means any business or enterprise engaged in the
business of providing any product or service then or historically provided by the Company, including, but not limited to, computer software or systems for LAN or WAN connectivity to the Internet
within the geographical areas of the United States, including Alaska and Hawaii, Puerto Rico, and Canada, as well as within the geographical area of any other country, territory or sovereignty in
which the Company has a presence by virtue of having established a dealership for its products at the time under consideration. 

        b.    Confidential Information. As used in this Agreement, the term "confidential information" means all of the following,
whether now or later existing, concerning the business, products, programs and activities of the Company: (a) financial and pricing information, including, but not limited to budgets, budget
projections and plant information, (b) customer account lists, (c) prospective customers identified by the Company, (d) internal customer data, (e) creations, including but
not limited to, computer code and programming materials, (f) any corporate strategy or plan, including, but not limited to, pricing, marketing, manufacturing and data processing plans and
strategies, and (g) any information marked or otherwise identified by the Company as confidential, including information identified as confidential in any published Company policy. 

        c.    Creation. As used in this Agreement, the term "creation" means any: (a) computer program or code,
(b) arithmetic, logarithmic, analog, digital or other formula, (c) product, marketing or business plan composition, writing or work, writings, and compositions of words, numbers or
analogs, including any combination of them, (d) any other computer programming material in any form or medium or expression, and (e) computer hardware structures and configurations,
which concerns or relates to any present or prospective, product, program or activity of the Company. 

        d.    Prospective Customer. As used in this Agreement, the phrase "prospective customer of the Company" means any person or firm
directly solicited by the Company, other than through general advertising, within the six (6) month period prior to the date under consideration. 

        5.    Purpose. The Employee acknowledges that the protective provisions of this Agreement are necessary for the Company to
maintain its competitive position and to preserve its trade secrets and proprietary information from becoming public knowledge when it is the intent of both the Employee and the
Company that the Company's trade secrets, proprietary information and other confidential information remain the sole and exclusive property of the Company. 

        6.    Remedies; Enforcement. The Company's remedies for any breach of this Agreement are in addition to any other rights of
remedies it may have against the Employee arising from his/her fiduciary duties as an employee of the Company. The Employee acknowledges that any violation of the terms of tins Agreement would
naturally result in irreparable harm to the Company and agrees that a violation of the obligations respecting confidentiality, solicitation and competition will entitle the Company to enjoin the
Employee's conduct and seek an accounting of profits realized by the Employee, in addition to any other remedies that may be available to the Company. The Company shall be entitled to recover 

Page 10

 

all of its costs, including its reasonable attorney's fees, in enforcing its rights and remedies under this Agreement. 

        7.    Policies. In addition to other Company policies, the Employee agrees to act in accordance with all Company policies and
procedures concerning confidential information and employee cooperation in protecting and securing Company property. 

        8.    Employment. The Employee acknowledges that entering into this Agreement is a condition of employment with the Company.
This Agreement gives the Employee no greater or lessor rights to continued employment with the Company than the Employee. otherwise has and shall remain in effect after the Employee's employment with
the Company terminates, regardless of the reason, or lack of reason, for that termination. 

        9.    Severability. The provisions of this Agreement are severable and to the extent any provision is found unenforceable, the
remaining provisions of tins Agreement shall be enforced as if the unenforceable provision were omitted. 

        10.  Law. This Agreement is to be governed by Colorado law. 

        DATED
this 5th day of January, 1998 

	
EMPLOYEE:	
 	

COMPANY:
	
 	
 	

eSoft, Inc.
	

/s/  JASON ROLLINGS      
 Jason Rollings	
 	

By: /s/  REGIS A. FRANK      
 President

Page 11

QuickLinks

EMPLOYMENT AGREEMENT

RECITALS

SIGNATURES

EXHIBIT A RELEASE

EXHIBIT B eSoft, Inc. 5335 Sterling Drive, Suite C Boulder, Colorado 80301 EMPLOYEE CONFIDENTIALITY AGREEMENTQuickLinks
 -- Click here to rapidly navigate through this document
   Exhibit 10.25  

OFFICE LEASE

BETWEEN

NEW ALLIANCE PROPERTIES, INC.
  a Delaware corporation  

"LANDLORD"  

 AND  

 ESOFT, INC.
  a Delaware corporation  

TENANT
  FOR SPACE AT

THE BUILDING KNOWN AS
 295 INTERLOCKEN BOULEVARD  

Dated: February 17; 1999  

2

 
 

TABLE OF CONTENTS
  
    OFFICE LEASE    
  

	 
	 	 
	 	 
	 	Page

	1.	 	PREMISES: BUILDING: BUILDING COMPLEX; COMMON AREAS	 	3
	2.	 	LEASE TERM	 	3
	3.	 	RENT; SECURITY DEPOSIT	 	3
	 	 	A.	 	Base Rent	 	3
	 	 	B.	 	Security Deposit	 	3
	4.	 	TENANT FINISH AND ACCEPTANCE OF THE PREMISES	 	4
	 	 	A.	 	Landlord's Work	 	4
	 	 	B.	 	Postponement of Lease Commencement Date	 	4
	 	 	C.	 	Acceptance of Premises	 	4
	 	 	D.	 	Partial Months; Lease Commencement Certificate	 	4
	5.	 	OPERATING EXPENSES	 	4
	 	 	A.	 	Definitions Regarding Operating Expenses	 	4
	 	 	B.	 	Payment of Operating Expenses	 	6
	 	 	C.	 	Partial Years	 	7
	 	 	D.	 	Survival of Tenant's Obligation	 	7
	 	 	E.	 	Tenant's Right to Question Operating Expenses	 	7
	 	 	F.	 	Operating Expense Adjustments	 	7
	6.	 	TENANT'S EXPENSES	 	8
	7.	 	SERVICES	 	8
	 	 	A.	 	Landlord's Services	 	8
	 	 	B.	 	Additional Services to Tenant	 	8
	 	 	C.	 	Interruption of Services	 	8
	 	 	D.	 	Notice to Landlord	 	8
	 	 	E.	 	Year 2000 Compliance	 	8
	8.	 	QUIET ENJOYMENT	 	8
	9.	 	USE AND OCCUPANCY	 	8
	10.	 	MAINTENANCE AND REPAIRS	 	9
	 	 	A.	 	Landlord's Obligations	 	9
	 	 	B.	 	Tenant's Obligations	 	9
	11.	 	ALTERATIONS AND ADDITIONS	 	9
	 	 	A.	 	Alterations by Tenant	 	9
	 	 	B.	 	Ownership and Removal of Alterations	 	0
	 	 	C.	 	Landlord's ADA Alterations	 	11
	12.	 	ENTRY BY LANDLORD	 	11
	13.	 	MECHANICS LIENS	 	11
	14.	 	SUBLETTING AND ASSIGNMENT	 	11
	 	 	A.	 	Tenant's Right	 	11
	 	 	B.	 	Other Restrictions: What Constitutes an Assignment	 	12
	 	 	C.	 	Certain Subleases	 	12

  

	 
	 	 
	 	 
	 	Page

	15.	 	DAMAGE TO PROPERTY: CLAIMS	 	12
	 	 	A.	 	Landlord Plot Liable	 	12
	 	 	B.	 	Tenant's Indemnity	 	12
	16.	 	INSURANCE	 	13
	 	 	A.	 	Landlord's Insurance	 	13
	 	 	B.	 	Tenant's Insurance	 	13
	 	 	C.	 	Waiver of Claims and Subrogation	 	13
	17.	 	DAMAGE OR DESTRUCTION TO BUILDING	 	13
	 	 	A.	 	Repair of Damage	 	13
	 	 	B.	 	Termination of Lease	 	14
	18.	 	CONDEMNATION	 	14
	19.	 	ESTOPPEL CERTIFICATE	 	14
	 	 	A.	 	Duty to Provide	 	14
	 	 	B.	 	Tenant's Failure to Deliver	 	14
	20.	 	DEFAULT BY TENANT	 	15
	 	 	A.	 	Event of Default	 	15
	 	 	B.	 	Remedies of Landlord	 	15
	 	 	C.	 	Late Charges and Interest	 	17
	 	 	D.	 	Mitigation	 	17
	 	 	E.	 	No Waiver	 	17
	 	 	F.	 	Landlord's Lien	 	17
	21.	 	SUBORDINATION AND ATTORNMENT	 	17
	 	 	A.	 	General	 	18
	 	 	B.	 	Lease Modifications	 	18
	22.	 	SURRENDER AND HOLDING OVER	 	18
	 	 	A.	 	Surrender	 	18
	 	 	B.	 	Property Not Removed	 	18
	 	 	C.	 	Holding Over	 	18
	23.	 	LANDLORD-DEFAULT	 	19
	24.	 	NOTICE	 	19
	25.	 	RULES AND REGULATIONS	 	19
	26.	 	PARKING	 	19
	27.	 	RIGHT TO RELOCATE TENANT	 	19

ii

 

	28.	 	MISCELLANEOUS	 	19
	 	 	A.	 	Limitation—Landlord's Liability	 	19
	 	 	B.	 	No Merger	 	20
	 	 	C.	 	Landlord's Use of Common Areas	 	20
	 	 	D.	 	Covenants are Independent	 	20
	 	 	E.	 	Severability	 	20
	 	 	F.	 	Captions and Terms	 	20
	 	 	G.	 	Binding Effect: Governing Law	 	20
	 	 	H.	 	Tenant's Authority	 	20
	 	 	I.	 	Joint and Several	 	20
	 	 	J.	 	Acts Binding Landlord	 	20
	 	 	K.	 	Change in Light or View	 	20
	 	 	L.	 	No Other Agreements; Amendments	 	21
	 	 	M.	 	Brokers	 	21
	 	 	N.	 	Recordation	 	21
	 	 	O.	 	Execution Required	 	21
	 	 	P.	 	Attorney's Fees	 	21
	 	 	Q.	 	Time of Essence; Effective Dates	 	21
	29.	 	RIGHT OF FIRST OFFER	 	21
	 	 	A.	 	Exercise	 	21
	 	 	B.	 	No Default	 	22
	30.	 	OPTION TO EXTEND	 	22
	 	 	A.	 	Exercise of Option	 	22
	 	 	B.	 	Rent Determination	 	22
	 	 	C.	 	Appraiser Defined	 	23
	 	 	D.	 	Market Rate Defined	 	23
	 	 	E.	 	Expiration of Options	 	24

Exhibits:  

EXHIBIT
A—Floor Plan of Leased Premises

EXHIBIT B—Legal Description of Building

EXHIBIT C—Tenant Improvement Agreement (Work Letter)

EXHIBIT D—Rules and Regulations

EXHIBIT E—Lease Commencement Certificate 

iii

 
 

OFFICE LEASE
  
    PART I
  
    BASIC LEASE TERM SHEET    
  

	BUILDING:	 	295 Interlocken Boulevard, Broomfield, Colorado 80021
	

LEASE DATE:	
 	

February 17, 1999	

 	

 
	

LANDLORD:	
 	

New Alliance Properties, Inc., Delaware corporation

12800 Whitewater Drive, Suite 170

Minnetonka, MN 55343
	

TENANT:	
 	

Esoft, Inc., a Delaware corporation	

 
	

 	
 	

Address:	

295 Interlocken Boulevard, Suite 500

Broomfield, CO 80021

Attn: Jay Rollings	

 
	

BUILDING MANAGER:	

La Salle Partners Management, Inc.

950 17th Street

Suite 2000

Denver, Colorado 80202	

 
	

LANDLORD'S BROKER:	

Cushman Realty Corporation	

 
	

TENANT'S BROKER:	

The Staubach Company	

 
	

PREMISES:	
 	

 	

Suite Number: 500

295 Interlocken Boulevard

Broomfield, Colorado 80021

Tenant's Rentable Area: 13,618 RSF Premises
	

LEASE TERM:	
 	

Lease Commencement Date:    The earlier to occur of: (a) the date the Premises are Ready for Tenant (as defined below); or (b) March 17, 1999 (subject to Section 4.13 below)
	

 	
 	

Rent Commencement Date: June 1, 1999	

 
	

 	
 	

Lease Expiration Date: May 31, 2004	

 
	

 	
 	

Lease Term: Commencement Date to Expiration Date (i.e., approximately 5 years, plus 3 months)

BASE
RENT: Payable in monthly installments as follows: 

	Period
 
	 	Monthly
	 	Per Sq. Ft.
	 	Periods

	Commencement Date-5/31/99	 	$	14,185.42	*	$	12.50	*	 	Not determinable
	6/l/99-2/29/00	 	$	14,185.42	 	$	12.50	 	$	127,668.78
	3/1/00-2/28/01	 	$	14,469.13	 	$	12.75	 	$	173,629.56
	3/1/01-2/28/02	 	$	14,752.83	 	$	13.00	 	$	177,033.96
	3/1/02-2/28/03	 	$	15,320.25	 	$	13.50	 	$	183,843.00
	3/1/03-5/31/04	 	$	15,603.96	 	$	13.75	 	$	234,059.40

*See
Paragraph 3A below. 

TENANT'S
PRO RATA SHARE: 21.28% 

  

SECURITY DEPOSIT: $15,000.00 

PARKING
SPACES: Number of Parking Spaces: 54 surface parking spaces (i.e., 4 spaces per 1,000 rentable square feet leased) at no cost to Tenant. Tenant, at its own cost and expense, may identify up to
25 of said 54 parking spaces as Tenant's reserved parking spaces, subject to prior approval by Landlord of the location and method of identifying said reserved parking spaces, as well as, all required
approvals of any governing authority and the Interlocken Architectural Committee. Tenant shall be responsible for all costs and expenses associated with the identification of the parking spaces
reserved for Tenant, including maintenance of any reserved parking signs or stripping once approved as hereinbefore provided. 

OPTIONS:
See Paragraphs 29-30 below 

GUARANTOR:
Not applicable 

THIS
BASIC LEASE TERM SHEET, together with the General Provisions in Part II and any Exhibits as Part III, all constitute the entire lease between Tenant and Landlord for the Leased
Premises, made and entered into as of the Lease Date. 

 
 

PART II
  GENERAL PROVISIONS    
  

        1.    PREMISES; BUILDING; BUILDING COMPLEX: COMMON AREAS.    In consideration of the payment of the Rent and the
performance of Landlord and Tenant's obligations under the Lease, Landlord hereby leases to Tenant and Tenant leases from Landlord the premises as described on the Basic Lease Term Sheet and as
depicted on Exhibit A (the "Premises") located in the building on the land described on  Exhibit B (the "Building"), together with a non-exclusive
right to use all common areas designated by Landlord for
non-exclusive use of the tenants of the Building. The Building, real property, landscaped and parking areas, drives and related easements, common areas, and appurtenances are
hereinafter collectively sometimes called the "Building Complex" whether all or a part of it. The "Common Areas" include the Building entrances, walkways, driveways to the Building, stairways, common
lobbies and corridors, electrical and telephone rooms, and other areas designated from time-to-time by Landlord for the use of all tenants of the Building. 

        All
entry of the Premises or Building Complex during construction under the Work Letter (defined in Paragraph 4) by Tenant its employees, architects, agents or representatives
shall be at Tenant's sole risk, and Tenant shall indemnify and hold Landlord and its employees, partners, contractors, and Building Manager harmless from and against any and all injuries, death,
damages, loss, claims, suits and liability arising out of any such inspection, except to the extent caused by the gross negligence or willful misconduct of Landlord, its agents or employees. Tenant
shall not prior to the Lease Commencement Date enter on the Premises or permit others to do so. 

        2.    LEASE TERM.    The term of the Lease shall commence at 12:01 a.m. on the Lease Commencement Date and
shall terminate at 12:00 midnight on the Lease Expiration Date, as specified on the Basic Lease Term Sheet (the "Primary Lease Term"). The Primary Lease Term, as it may be extended, is referred to as
the "Lease Term." 

        3.    RENT; SECURITY DEPOSIT.    

        A.    Base Rent.    Tenant shall pay to Landlord base rent for the Premises ("Base Rent") as specified on the Basic
Lease Term Sheet during the Primary Lease Term. All installments of Base Rent shall be payable in advance, on the first day of each calendar month during the Lease Term, except that the first monthly
installment of Base Rent shall be due and payable upon execution of this Lease by Tenant. All Base Rent and Additional Rent (as hereinafter defined), (collectively, "Rent") shall be paid without
notice, demand, deduction, offset, or abatement (except as otherwise expressly provided in 

2

 

this Lease), at Landlord's address or at such other place as Landlord from time-to-time designates in writing. In no event will the total Rent to be paid by Tenant during any
Lease Year ever be less than the Base Rent plus Tenant's Pro Rata Share of Operating Expenses under Paragraph 5. Notwithstanding anything to the contrary, Tenant may occupy the Premises and
defer payment of Base Rent and Tenant's Pro Rata Share of Operating Expenses for a period commencing on the Commencement Date and terminating May 31, 1999 (the "Deferred Rent Period"). Rents
payable hereunder are allocable to, and will be accrued by the parties during, their fiscal periods in which the same is actually paid. No portion of the Base Rent paid by Tenant during periods after
the expiration of the Deferred Rent Period will be allocated to such Deferred Rent Period, nor is such Rent intended to be allocable to the Deferred Rent Period. If at any time during the Term, an
Event of Default occurs, Tenant owes Landlord, in addition to all other amounts, Base Rent and Tenant's Pro Rata Share of Operating Expenses deferred pursuant to this Paragraph during the Deferred
Rent Period. Tenant, however, has no obligation to pay the deferred amounts if no Event of Default occurs prior to the expiration of the Term. 

        B.    Security Deposit.    It is agreed that Tenant, concurrently with the execution of this Lease, shall deposit with
Landlord, and shall keep an deposit at all times during the Lease Term, the security deposit specified on the Base Lease Term Sheet (the "Security Deposit") as security for the payment by Tenant of
the Rent and for the faithful performance of all other provisions of this Lease which are to be performed by Tenant. If, at any time during the Lease Term, Tenant shall be in default in the
performance of any provision of this Lease, Landlord shall have the right, but shall not be obligated, to use the Security Deposit, or so much as necessary, in payment of any Rent or in performance of
Tenant's other obligations under this Lease, and in payment of any damages incurred by the Landlord by reason of Tenant's defaults, which shall not waive or cure any such default. In that event,
Tenant shall, on written notice of Landlord, forthwith remit to Landlord a sufficient amount in cash to restore the Security Deposit to its original amount. The Security Deposit which has not been so
utilized, shall be refunded to Tenant, without interest, within 60 days after the termination of this Lease upon full performance of this Lease by Tenant and vacation and surrender of the
Premises by Tenant as required by this Lease. Landlord shall not be obligated to hold the Security Deposit in a segregated account and Tenant shall be entitled to no interest on it. Landlord may
deliver the Security Deposit to or credit the Security Deposit to the purchase price paid by any purchaser of Landlord's interest in the Premises, and thereupon Landlord shall be discharged from
further liability with respect to the Security Deposit. If a Mortgagee (as hereinafter defined) succeeds to Landlord's interest by foreclosure or deed in lieu, Tenant shall have no claim against
Mortgagee unless Mortgagee actually received the Security Deposit from Landlord. Tenant's obligations under this Lease exceed the amount of the Security Deposit, Tenant shall remain liable for the
balance of its obligations. 

        4.    TENANT FINISH AND ACCEPTANCE OF THE PREMISES.    

        A.    Landlord's Work.    Other than as set forth in the Work Letter, Landlord shall have no obligations for any
remodeling or other work in the Premises, and Tenant shall accept the Premises in their "as-is" condition on the date the Premises is Ready for Tenant. 

        B.    Postponement of Lease Commencement Date.    If the Premises are not Ready for Tenant on or before
March 17, 1999 because a prior tenant fails to vacate, the Lease Commencement Date shall be postponed until the earlier of: (i) the date the Premises are Ready for Tenant; or
(ii) the date Tenant takes occupancy of any of the Premises, on which date all of the provisions of this Lease shall take effect; provided, however, that the Rent Commencement Date and the
Lease Expiration Date shall each be delayed by the same number of days that the Lease Commencement Date is delayed beyond March 17, 1999. If the Premises are not Ready for Tenant on or before
March 17, 1999, the postponement of Tenant's obligation to pay Rent shall be in full settlement of all claims which Tenant might otherwise have by reason of the Premises not being Ready for
Tenant on or before March 17, 1999. "Ready for Tenant" shall mean the date the Premises is delivered to Tenant. 

3

 

        C.    Acceptance of Premises.    Taking possession of the Premises by Tenant shall be conclusive evidence that the
Premises are Ready for Tenant. 

        D.    Partial Months: Lease Commencement Certificate.    If the Lease Commencement Date does not begin on the first
day of a month, Tenant shall pay proportionate Rent in advance for the partial month and the partial month shall be considered part of the first Lease Year (as defined in subparagraph 5.A). In the
event the Lease Commencement Date is delayed, the Lease Expiration Date shall be extended so that the Primary Lease Term will continue for the full period set forth in the Basic Lease Term Sheet. At
the request of either party, Landlord and Tenant shall execute a Lease Commencement Certificate, the form of which is attached hereto as Exhibit E, setting forth among other things the Lease
Commencement Date and the Lease Expiration Date. 

        5.    OPERATING EXPENSES.    

        A.    Definitions Regarding Operating Expenses.    The following terms have the following meanings with respect to
their use in this Lease: 

        (1)  "Building
Rentable Area" means 63,995, which is the total rentable square footage of the Building. If there is a significant change in the Building Rentable Area as a
result of an addition to the Building, partial destruction, modification to building design, or similar cause which causes a reduction or increase thereto on a permanent basis, Landlord shall make
such adjustments in the computations as shall be necessary to provide for any such change. 

        (2)  "Tenant's
Pro Rata Share" means the percentage specified on the Basic Lease Term Sheet. In the event Tenant, at any time during the Lease Term, leases additional space
in the Building, Tenant's Pro Rata Share shall be recomputed by dividing the total rentable square footage of space then being leased by Tenant (including any additional space) by the Building
Rentable Area, and the resulting percentage figure shall become Tenant's Pro Rata Share. 

        (3)  "Lease
Year" means each calendar year during the Lease Term, except that the first Lease Year shall begin on the Lease Commencement Date and end on December 31 of
that year, and the last Lease Year shall begin on January 1 of the calendar year in which this Lease expires or is terminated and end on the date it expires or terminates. If the first or last
Lease Year is less than 12 months, Operating Expenses for these years shall be prorated. 

        (4)  "Operating
Expenses" means all operating expenses of any kind or nature as reasonably determined by Landlord and which are incurred in connection with the ownership,
operation and maintenance of the Building Complex. Operating Expenses shall include, but not be limited to: 

        (a)  All
real property taxes and assessments levied against the Building Complex by any governmental or quasi-governmental authority, including any taxes, assessments,
reassessments, surcharges, imposition, or
under any covenants, declarations, easements or restrictions, or other service, tax or other fees of a nature now in effect or which shall hereafter be levied on the Building Complex as a result of
the use, ownership or operation of the Building Complex or for any other reason, whether in lieu of or in addition to, any current real estate taxes and assessments; provided, however, in no event
shall the terms "taxes" or "assessments include any federal or state income taxes levied or assessed on Landlord, unless those taxes are a substitute for real property taxes (collectively referred to
as "Taxes"). Expenses incurred by Landlord for tax consultants and in contesting the amount or validity of any Taxes shall be included in such computations. "Assessments" shall include general and
special assessments, license tax, business license fee, business license tax, commercial rental tax, levy, charge penalty or tax, imposed by any authority having the direct power to tax, including any
city, county, state or federal government, or any school, agricultural, lighting, water, drainage or other improvement or special district, against the Premises, the Building or Building Complex or
any legal or equitable interest of Landlord 

4

 

therein. For the purposes of this Lease, any special assessments shall be deemed payable in such number of installments as is permitted by law, whether or not actually so paid; 

        (b)  To
the extent applicable, costs of cleaning (such as exterior window cleaning) and other supplies, tools, materials and equipment used in connection with the Common
Areas; 

        (c)  To
the extent applicable, costs incurred in connection with obtaining and providing energy for the Building Complex, including costs of propane, butane, natural gas,
steam, electricity, solar energy and fuel oils, coal or any other energy sources as well as costs for heating, ventilation, and air conditioning services ("HVAC"), exclusive of electrical power for
individual tenant spaces and associated rooftop HVAC units, which shall be separately metered to each tenant; 

        (d)  Costs
of water and sanitary, storm drainage and natural gas services for the Building Complex; 

        (e)  Costs
of security services (if any) and janitorial services (if any) for the Common Areas; 

        (f)    Costs
of maintenance, repairs, alterations, improvements and replacements, including materials, labor, equipment and maintenance contracts; and 

        (g)  Costs
of maintenance and replacement of landscaping; and costs of maintenance, repair, resurfacing, striping and repairing parking areas and Common Areas, including
trash, ice and snow removal; 

        (h)  Insurance
premiums in connection with the insurance carried by Landlord in accordance with Paragraph 16, including fire and all-risk coverage,
together with loss of rent endorsement; the part of any claim required to be paid under the deductible portion of any insurance policy carried by Landlord in
connection with the Building Complex; public liability insurance and any other insurance carried by Landlord on the Building Complex; 

        (i)    Labor
costs, including wages and other payments, costs to Landlord of workmen's compensation and disability insurance, payroll taxes, fringe benefits, pension; 

        (j)    Professional
building management fees and costs of Building management space occupied by the Building Manager or its agents; provided, that such professional building
management fees shall be comparable to management fees paid by landlords to property managers for comparable buildings in the greater Metropolitan Denver market, from time to time; 

        (k)  Legal,
accounting, inspection, and consultation fees (including fees charged by consultants retained by Landlord for services that are designed to produce a reduction in
Operating Expenses or to reasonably improve the operation, maintenance or state of repair of the Building Complex) incurred in the ordinary course of operating the Building Complex; and a general
overhead and administrative charge equal to 2% percent of all Operating Costs. 

        (l)    The
costs of capital improvements and structural repairs and replacements made in or to the Building Complex or the cost of any machinery or equipment installed in the
Building Complex in order to conform to any applicable laws, ordinances, rules, regulations or orders of any governmental or quasi-governmental authority having jurisdiction over the Building Complex
("Required Capital Improvement"); the costs of any capital improvements and structural repairs and replacements designed primarily to reduce Operating Expenses ("Cost Savings Improvements"); and a
reasonable annual reserve for all other capital improvements and structural repairs and replacements reasonably necessary to permit Landlord to maintain the Building Complex. The expenditures for Cost
Savings Improvements shall be limited in any year to the amount of the resulting reduction of Operating Expenses; 

        (m)  Any
assessments, special assessments or other fees or charges levied or imposed an the Building Complex by the Interlocken Owners Association; and 

5

 

        (n)  Any
other expense which under generally accepted real estate standards for the metropolitan area where the Building is located would be considered Operating Expenses. 

        (5)  "Operating
Expenses" shall not include (i) costs of work, including painting and decorating and tenant improvement work, which Landlord performs for any tenant in
the Building which is not for the
benefit of all or most tenants of the Building; (ii) costs of repairs or other work occasioned by fire, windstorm or other insured casualty to the extent of insurance proceeds received by
Landlord; (iii) leasing commissions, advertising expenses, and other costs incurred in leasing space in the Building; (iv) costs of repairs or rebuilding necessitated by condemnation;
(v) any interest on borrowed money or debt amortization on Landlord's mortgages on the Building, except as specifically set forth above; (vi) depreciation on the Building; or
(vii) costs for janitorial services, utilities or maintenance performed or paid for by tenants for their individual premises. 

        B.    Payment of Operating Expenses.    It is hereby agreed that, subject to the provisions of Paragraph 3A
above pertaining to the Deferred Rent Period, commencing with the first Lease Year and continuing each month thereafter through the Lease Term, Tenant shall pay to Landlord as Additional Rent at the
same time as Base Rent is paid an amount equal to 1/12 of Landlord's estimate of Tenant's Pro Rata Share of the Operating Expenses for the particular Lease Year. Landlord shall deliver
to Tenant, as soon as practicable following the end of any Lease Year, an estimate of the Operating Expenses for the new Lease Year (the "Budget Sheet"). Until receipt of the Budget Sheet, Tenant
shall continue to pay its current monthly Tenant's Pro Rata Share of Operating Expenses based upon the estimate for the preceding Lease Year. If the Budget Sheet reflects an estimate of Tenant's Pro
Rata Share of Operating Expenses for the new Lease Year greater than the amount actually paid to the date of receipt of the Budget Sheet for the new Lease Year, Tenant shall pay such amount to
Landlord within 30 days of receipt of the Budget Sheet. Upon receipt of the Budget Sheet, Tenant shall thereafter pay the amount of its monthly Tenant's Pro Rata Share of the Operating Expenses
as set forth in the Budget Sheet. As soon as practicable following the end of any Lease Year, but not later than May 1, Landlord shall submit to Tenant a statement in reasonable detail
describing the computations of the Operating Expenses setting forth the exact amount of Tenant's Pro Rata Share of the Operating Expenses for the Lease Year just completed, and the difference, if any,
between the actual Tenant's Pro Rata Share of the increase in Operating Expenses for the Lease Year just completed and the estimated amount of Tenant's Pro Rata Share of the Operating Expenses for
such Lease Year (the "Statement"). Notwithstanding the foregoing, Landlord's failure to deliver the Statement to Tenant on or before May 1 shall not be a waiver of Landlord's rights under this
Paragraph. If the actual Tenant's Pro Rata Share of the Operating Expenses for the period covered by the Statement is higher than the estimated Tenant's Pro Rata Share of the Operating Expenses which
Tenant previously paid during the Lease Year just completed, Tenant shall pay to Landlord the difference within 30 days following receipt of the Statement from Landlord. If the actual Tenant's
Pro Rata Share of the Operating Expenses for the period covered by the Statement is less than the estimated Tenant's Pro Rata Share of the Operating Expenses which Tenant previously paid during the
Lease Year just completed, Landlord shall credit the excess against any sums then owing or next becoming due from Tenant under this Lease. In no event will Rent be less than Base Rent. In the event
the Building is not fully occupied during any particular Lease Year, Landlord shall adjust those Operating Expenses which are affected by the occupancy rates for the particular Lease Year, or part of
it, as the case may be, to reflect an occupancy of 100% percent of the Building Rentable Area. 

        C.    Partial Years.    If the Lease Term covers a period of less than a full calendar year during the first or last a
Years, Tenant's Pro Rata Share of the Operating Expenses for the partial year shall be calculated by proportionately reducing Operating Expenses to reflect the number of months in that year. 

        D.    Survival of Tenant's Obligation.    Landlord's and Tenant's responsibilities with respect to the Operating
Expenses survive the expiration or termination of this Lease and Landlord shall have the 

6

 

right to retain the Security Deposit, or so much thereof as it deems necessary, to secure Tenant's obligations attributable to the Lease Year in which this Lease terminates. 

        E.    Tenant's Right to Question Operating Expenses.    If Tenant questions the amount of Operating Expenses as shown
by the Statement, Tenant shall notify Landlord within 30 days after receipt of the Statement. If Tenant does not give Landlord notice within that time period, Tenant shall have waived its right
to dispute the Statement. If Tenant timely gives notice, it shall have 90 days after giving notice to hire, at Tenant's sole expense, an accredited member of the Colorado Society of CPA's
("Tenant's Accountants"), to examine Landlord's books and records for the purpose of verifying the accuracy of the Statement. If Tenant's Accountants determine that an error has been made, notice
describing the error in reasonable detail must be given to Landlord during that 90-day period, or the right to question the Statement shall be waived; and if such a notice is given,
Landlord and Tenant shall endeavor to agree upon the matter within the following 30 days. All information disclosed to Tenant or Tenant's Accountants in connection with any such review shall be
kept confidential by Tenant and Tenant's Accountants and shall not be disclosed or used by Tenant or Tenant's Accountants for any reason other than to verify information set forth in the Statement. If
it is determined that an error has been made adverse to Tenant of 5% or more of the total Operating Expenses, Landlord shall pay all of the costs and expenses associated with such review.
Notwithstanding the pendency of any dispute over any particular Statement, Tenant shall continue to pay Landlord the amount of the adjusted monthly installments of Additional Rent based upon the
Statement until the dispute is resolved. Delay by Landlord in submitting any Statement for any Lease Year shall not affect the provisions of this Paragraph or constitute a waiver of Landlord's rights
as set forth herein for that or any subsequent Lease Year. 

        F.    Operating Expense Adjustments.    Notwithstanding anything in this Lease to the contrary, if any lease entered
into by Landlord with any tenant in the Building is on a "pure net" basis, or provides for a different basis of computation for any Operating Expenses with respect to its leased premises, then, to the
extent that Landlord determines that an adjustment should be made in making the computations of Operating Expenses under this Lease, Landlord may modify the computation of Building Rentable Area and
Operating Expenses for any Lease Year in order to eliminate or otherwise modify any such expenses which are paid for in whole or in part by that tenant. Furthermore, Landlord shall also be permitted
to make such adjustments and modifications to the provisions of this Paragraph as shall be reasonably necessary to achieve the intent of this Lease or the intention of the parties hereto. 

        6.    TENANT'S EXPENSES.    Notwithstanding anything contained in this Lease to the contrary, Tenant shall be
responsible, at Tenant's sole cost and expense, to arrange and pay for the janitorial services for the Premises and to arrange and pay directly to the electrical service provider for all costs of all
electrical services associated with the operation and occupancy of the Premises, such as lighting and electrical outlets and the HVAC serving the premises. As more specifically provided in the Work
Letter attached hereto as Exhibit C, Tenant shall be responsible for the installation of a separate utility meters for purposes of segregating
the electrical power supply to the Premises. Said separate meters to include the segregation of power supply necessary to operate the HVAC system for the Premises. 

        7.    SERVICES.    

        A.    Landlord's Services.    Subject to the provisions of subparagraph 7D, Landlord in accordance with standards
established by Landlord from time to time for the Building, agrees: (1) to furnish running water for use in Common Area lavatories and drinking fountains, if any; and (2) to provide
limited janitorial services for the Building (including window washing of the outside of exterior windows as may, in the judgment of Landlord, be reasonably required). 

        B.    Additional Services to Tenant.    If Tenant requires other services in addition to those required to be provided
to all other tenants of the Building, Tenant shall pay for those services monthly as Additional Rent. In addition, Tenant shall pay as Additional Rent monthly with Base Rent any and all 

7

 

charges for utility services supplied and materials furnished directly to the Premises. It is also understood and agreed that Tenant shall pay the cost of replacing light bulbs and/or tubes and
ballast used in all lighting in the Premises. 

        C.    Interruption of Services.    Landlord may discontinue, reduce, or curtail the Landlord's Services at such times
as it may be necessary by reason of accident, repairs, alterations, improvements, strikes, lockouts, riots, acts of God, application of Laws (as hereinafter defined) or due to any other happening
beyond the control of Landlord. In the event of any interruption, reduction, or discontinuance of Landlord's services Landlord shall, if possible, give advance notice to Tenant, but Landlord shall not
be liable for damages to Tenant or any other party as a result thereof nor shall the occurrence of any such event in any way be construed as an eviction of Tenant, cause or permit an abatement,
reduction or set off of Rent, or operate to release Tenant from any of Tenant's obligations under this Lease. 

        D.    Notice to Landlord.    Tenant shall promptly notify Landlord or the Building Manager of any interruption in the
Building services or of any defects in the Building or Building systems of which Tenant becomes aware and of which Landlord is not aware, including defects in pipes, electric wiring, and HVAC
equipment. In addition, Tenant shall provide Landlord with prompt notification of any matter or condition of which it becomes aware which may cause injury or damage to the Building, the Building
Complex, or to any person or property. 

        E.    Year 2000 Compliance.    Landlord shall be responsible, at its sole cost and expense, for taking all measures
necessary to ensure that all Building systems components which are owned and maintained by Landlord will accurately process date and/or time data relating to the year 2000. 

        8.    QUIET ENJOYMENT.    Subject to the provisions of this Lease, all Laws and any mortgage, easement, covenants,
reservations or other encumbrances on the Building Complex, Landlord agrees to warrant and defend Tenant in the quiet enjoyment and possession of the Premises during the Lease Term
against any person claiming under Landlord, so long as Tenant complies with its obligations to pay Rent and performs all of its other obligations under this Lease. 

        9.    USE AND OCCUPANCY.    The Premises shall be used and occupied as business offices and for light assembly and
light shipping/receiving for the operation of Tenant's business (the "Permitted Use") and for no other purpose, and Tenant shall use it in a careful, safe, and proper manner, and pay on demand for any
damage, including repair of damage, to the Building Complex caused by the use, act or neglect by Tenant, Tenant's agents or employees, or any other person entering upon the Premises under express or
implied invitation of Tenant. Tenant shall at its sole cost, comply with all applicable federal, state, city, quasi-governmental and utility provider laws, statutes, ordinances, orders, codes, rules,
regulations, zoning restrictions, covenants and restrictions now or hereafter in effect, including the Americans With Disabilities Act ("ADA") and all environmental laws (collectively referred to as
"Laws") applicable to Tenant's use, occupancy or alteration of the Premises, and Tenant shall obtain all permits or licenses required for its business conducted at the Premises. Tenant shall not
commit waste or permit waste to be committed or cause or permit any unpleasant odor or noise or other nuisance in or from the Premises or on the Building Complex. Tenant shall not use the Premises for
any use that causes an increase in rates or cancellation of any insurance policy covering the Building Complex. Tenant shall not store, keep, use, sell, dispose of or offer for sale in, upon or from
the Premises or the Building Complex any article or substance prohibited by any insurance policy covering the Building Complex or the Premises nor shall Tenant keep, store, produce, dispose of or
release on, in or from the Premises or the Building Complex (or allow others to do so) any substance which may be deemed an infectious waste, hazardous waste, hazardous or toxic material, or hazardous
substance under any Laws (collectively called "Hazardous Materials") except customary office and cleaning supplies stored and used in accordance with Laws. Tenant represents and warrants to Landlord
that it shall not bring onto or allow other to bring any Hazardous Materials onto the Building Complex, and that it has received no notice or complaint from any governmental authority or third party
that the business it intends to 

8

 

operate in the Premises or that any property or materials it intends to keep or allow on the Building Complex or in the Promises is a Hazardous Material or violates any Laws. Tenant shall give prompt
notice to Landlord of any such notice or complaint it has received or does receive in the future. Tenant shall pay when due any taxes assessed with respect to Tenant's use or occupancy of the Premises
and Tenant's Property (as defined in Paragraph 11) and any Alterations made by Tenant. Landlord acknowledges that Landlord has received no written notices, complaints or orders of violation or
noncompliance with any Law (including the ADA) and no federal, state or local environmental investigation is pending or, to the best of Landlord knowledge, has been threatened against Landlord with
regard to the Building Complex, and the Building Complex has not been used by Landlord nor, to the best of Landlord's knowledge, has the Building Complex ever been used to manufacture, process,
distribute, use, treat, store, dispose of, handle or transport any Hazardous Substances in any quantity or manner that violates or gives rise to liability under any Law, except customary office and
cleaning supplies. Tenant acknowledges that Tenant has inspected the Premises and accepts the Premises. Operating Expenses shall not include costs associated with causing the Common Areas of the
Building Complex to comply with the ADA as it is interpreted and regulated on the date hereof. 

        10.    MAINTENANCE AND REPAIRS.    

        A.    Landlord's Obligations.    Landlord shall, subject to reimbursement as part of Operating Expenses, to the extent
deemed reasonably necessary by Landlord for operations of the Building Complex, repair and maintain: the structural portions of the Building, plumbing, air conditioning (including rooftop HVAC units),
heating and electrical systems installed or furnished by Landlord, the Building roof, the curtain wall, including all glass connections at the perimeter of the Building, all exterior doors, including
any exterior plate glass within the Building, Building telephone and electrical closets owned or operated by Landlord, Building telephone and electrical closets, the Common Areas of the Building
Complex, landscaping, and interior portions and Building systems of the Building above and below grade which are not within space leased to Tenant or other tenants in the Building. Landlord shall have
no obligation to make improvements to or to repair or maintain the Premises during the Lease Term. 

        B.    Tenant's Obligations.    Tenant, at Tenant's sole cost and expense, except for services furnished by Landlord
pursuant to Paragraph 7 and Landlord's obligations under Paragraph 1 OA, shall maintain, in good order, condition, repair, and appearance anything below the ceiling of the Premises,
including the interior surfaces of the ceilings (if damaged or discolored due in whole or in part to the act, neglect, omission or fault of Tenant), windows, walls and floors, all doors, interior
glass partitions or glass surfaces (not exterior windows) and pipes, electrical wiring, switches, fixtures and other special items exclusively serving the Premises, subject to the provisions of
Paragraph 10(A) and 15. In the event Tenant fails to maintain the Premises as required by this Paragraph, Landlord shall give Tenant notice to do such acts as are required by this Paragraph. If
within a reasonable time not to exceed 30 days following Landlord's notice, Tenant fails to perform its obligations under this Paragraph, or if those obligations cannot reasonably be completed
within 30 days, fails to promptly commence such work and diligently pursue it to completion within a reasonable time not to exceed 90 days, then Landlord shall have the right, but shall
not be required, to do such acts and expend such funds at the expense of Tenant as are reasonably required to perform those obligations, without curing Tenant's default. The funds so expended plus 20%
of such amounts as an overhead/ administrative charge shall be due and payable by Tenant within 10 days after receipt of Landlord's invoice. Landlord shall have no liability to Tenant for any
damage, inconvenience or interference with the use of the Premises by Tenant as a result of performing or not performing any such obligations. 

        11.    ALTERATIONS AND ADDITIONS    

        A.    Alterations by Tenant.    Except as expressly provided in the Work Letter, Tenant shall make no alterations,
additions or improvements to the Premises or the Building Complex (the "Alterations"), 

9

 

including the installation of equipment or machinery which requires modifications to existing electrical outlets or increases Tenant's usage of electricity beyond the standard electrical usage design
for the Premises without obtaining the prior written consent of Landlord. Tenant shall submit any such request to Landlord, which shall not be unreasonably withheld or delayed, at least 30 days
prior to the commencement of the Alterations. Landlord may impose, as a condition to its consent, and at Tenant's sole cost, such requirements as Landlord may deem necessary in its judgment, including
the manner in which the Alterations are done, the material to be used, the times during which the work is to be accomplished, approval of all plans and specifications, and the procurement of all
licenses and permits. Landlord shall approve, which approval shall not be unreasonably withheld, Tenant's choice of architect and contractor by whom the work is to be performed. Landlord shall be
entitled to or to require Tenant to post notices on and about the Premises with respect to Landlord's non-liability for the
Alterations and Tenant shall not permit those notices to be defaced or removed. Tenant further agrees not to connect any apparatus, machinery or device to the Building systems, including electric
wires, water pipes, fire, safety, heating and mechanical systems, without the prior written consent of Landlord. Alterations which Tenant is permitted to make shall be performed in a good and
workmanlike manner and in compliance with this Lease. 

        All
Alterations, including partitions (except demountable wall systems installed by Tenant and not those existing in the Premises on the date hereof), paneling, carpeting, drapes or
other window coverings, and light fixtures (but not including movable office furniture, telephone equipment and cabling), are deemed a part of the real estate and the property of Landlord and remain
upon and be surrendered with the Premises at the end of the Term, whether by lapse of time or otherwise, unless Landlord notifies Tenant either M at the time such Alterations are installed that it
elects to have Tenant remove all or part of such Alterations at the end of the Term or (ii) in the case of telephone and data cabling within 30 days following the expiration of the Lease
that it elects to have Tenant remove such cabling,, and in either such event, Tenant shall at Tenant's expense promptly remove the Alterations specified and restore the Premises to its prior
condition, reasonable wear and tear excepted. 

        If
Landlord permits any Alterations, then prior to the commencement of those Alterations, Tenant shall deliver to Landlord certificates (and copies of the policies if requested by
Landlord) issued by insurance companies qualified to do business in the state where the Premises are located evidencing that workmen's compensation, public liability insurance and property damage
insurance, builder's risk coverage (if applicable) all in amounts, with companies and on forms satisfactory to Landlord, are in force and maintained by all such contractors and subcontractors engaged
by Tenant to perform the work. All such policies shall name Landlord as an additional insured and shall provide that they may not be canceled or modified without 30 days' prior notice to
Landlord. 

        Tenant,
at its sole cost and expense, shall cause any permitted Alterations to be performed in compliance with all applicable requirements of insurance policies, Laws, and governmental
bodies having jurisdiction, in such manner as not to interfere with other tenants or interfere with, delay, or impose any additional expense upon Landlord in the construction, maintenance or operation
of the Building Complex, and so as to maintain harmonious labor relations in the Building and to not disturb other tenants' use of their premises or interfere with Landlord's operation of the Building
Complex. In addition, Tenant, at its sole cost and expense, shall be responsible for the acquisition of auxiliary aids, required under the ADA, including all Alterations required: (i) as a
result of Tenant, or any subtenant, assignee or concessionaire, being a Public Accommodation (as defined in the ADA); (ii) as a result of the Premises being a Commercial Facility (as defined in
the ADA); (iii) as a result of any leasehold improvements made to the Premises by or on behalf of Tenant, or any subtenant, assignee or concessionaire (whether or not Landlord's consent to such
leasehold improvements was obtained); or (iv) as a result of the employment by Tenant, or any subtenant, assignee or concessionaire, of any individual with a disability. 

10

 

        B.    Ownership and Removal of Alterations.    All Alterations, whether made by Landlord or Tenant, including all
counters, screens, grilles, cabinetry work, partitions, paneling, carpeting, drapes or other window coverings and light fixtures (but not including Tenant's Property, as defined below), shall be
deemed a part of the real estate and the property of Landlord and shall remain upon and be surrendered with the Premises without disturbance or injury, at the end of the Lease Term, unless Landlord,
by notice given to Tenant no later than 15 days after the end of the Lease Term or Tenant's possession, shall elect to have Tenant remove all or any of the Alterations, and in that event,
Tenant shall promptly remove those Alterations. Any such removal, whether required or permitted by Landlord, shall be at Tenant's sole cost and expense, and Tenant shall restore and repair any damage
caused by the removal. All movable partitions, machines and equipment which are installed in the Premises by or for Tenant, without expense to Landlord, which can be removed without damage to or
defacement of the Building or the Premises, and all unattached furniture, furnishings and other articles of personal property owned by Tenant and located in the Premises (all of which are herein
called "Tenant's Property") shall be and remain the property of Tenant and may be removed by it at any time during the Lease Term, subject to the provisions of this Lease. However, if any of Tenant's
Property is removed, Tenant shall repair or pay the cost of repairing any damage to the Building Complex or the Promises resulting from the removal. 

        C.    Landlord's ADA Alterations.    Landlord shall, subject to reimbursement as part of Operating Expenses, be
responsible for any alterations, modifications or improvements to any Common Areas of the Building Complex which are required by the ADA. 

        12.    ENTRY BY LANDLORD.    Landlord, the Building Manager and their employees, contractors and agents shall have the
right to enter the Promises at all reasonable times after advance notice to Tenant (except in the case of an emergency) for the purpose of inspecting it, to supply any services to be provided by
Landlord, to show it to prospective purchasers, investors or Mortgagees, to make such alterations, repairs, maintenance, improvements or additions to the Premises or to the Building as Landlord may
deem necessary or desirable, and during the last 180 days of the Lease Term or after an Event of Default to show it to prospective tenants. Landlord may for these purposes, if Tenant is not
present, enter the Premises by means of a master key. Any such entry shall not entitle Tenant to an abatement of Rent or any other claim against Landlord, except for Landlord's gross negligence or
willful misconduct. 

        13.    MECHANICS LIENS.    Tenant has no right or authority to impose or permit any lien or claim against the
Premises, the Building, the Building Complex or its interest in or under this Lease. Tenant shall pay all costs for work done by or for Tenant in the Premises (including work performed by Landlord or
its contractor at Tenant's request following the commencement of the Primary Lease Term) and Tenant will keep the Premises and the Building Complex free and clear of all mechanics' and other liens on
account of work done by or for Tenant or persons claiming under it, excluding any Tenant Finish Work performed by Landlord pursuant to the Work Letter. Tenant agrees to indemnify, defend, and save
Landlord harmless of and from all liability, loss, damage, costs, or expenses, including attorneys' fees, on account of any claims of any nature whatsoever for work performed or for materials or
supplies furnished to Tenant or persons claiming under Tenant. Should any such claims be made or liens be recorded against the Premises, the Building or the Building Complex or should any action
affecting the title thereto be commenced as a result of any such work, Tenant shall cause the claim to be satisfied before being recorded, or if the claim or lien is recorded to be removed of record
within five days after recording. If Tenant desires to contest any claim or lien, Tenant shall give notice to Landlord of Tenant's intent to contest it and, within five days after the recording of any
such liens, Tenant shall
either furnish to Landlord adequate security satisfactory to Landlord of at least 150% of the amount of the claim, plus estimated costs and interest or bond over any lien under CRS
38-22-131 and as soon as possible thereby have the lien against the Premises, Building and Building Complex discharged and released in full. If a final judgment establishing
the validity or existence of any lien for 

11

 

any amount is entered, Tenant shall immediately pay and satisfy it. If Tenant fails to pay any amount in the time periods provided herein, Landlord may (but without being required to do so) pay such
lien or claim and any costs, and the amount so paid, plus 20% of such amounts as an overhead/administration charge, together with reasonable attorneys' fees incurred in connection therewith, shall be
immediately due from Tenant to Landlord. 

        14.    SUBLETTING AND ASSIGNMENT.    

        A.    Tenant's Right.    Tenant cannot assign this Lease or sublet all or any part of the Premises without the prior
written consent of Landlord, not to be unreasonably withheld or delayed. If Tenant wants to assign this Lease or sublet all or a portion of the Premises, Tenant shall first notify Landlord in writing
of the name of the proposed assignee or sub-tenant and the proposed use of the Premises, and provide such financial and other information as Landlord may reasonably require about the
proposed assignee or subtenant. It shall not be unreasonable for Landlord to withhold its consent to a proposed assignment or sublease for any reason, including, if (i) the financial
responsibility, or business of the proposed assignee or subtenant is unacceptable to Landlord; (ii) the intended use of the Premises by the proposed assignee or subtenant either (a) is
not substantially similar to the use of the Premises authorized by the provisions of this Lease or (b) violates any Laws or requires modifications to the Premises or the Building Complex to
comply with Laws; (iii) if the proposed assignee or subtenant is a present or former tenant of the Building, or (iv) the rent to be paid by the proposed assignee or sublessee is no less
than 90% of the Rent paid by Tenant for that space or is less than 90% of the rental rate then being offered by Landlord for similar space in the Building. Tenant shall have no right to assign this
Lease or sublet any part of the Premises if a notice of default has been delivered by Landlord to Tenant, which default has not been cured, or if an Event of Default exists under this Lease, either at
the time of Tenant's request for Landlord's consent to an assignment or sublease or at the time the assignment or sublease is scheduled to commence. 

        B.    Other Restrictions.    What Constitutes an Assignment. Any
assignment or subletting consented to by Landlord shall be in writing in a form acceptable to Landlord. This Lease cannot be assigned or sublet by operation of law. Any transfer of this Lease by a
sale of all or substantially all of Tenant's assets, merger, consolidation liquidation, or change in ownership of or power to vote the majority of outstanding stock of Tenant or, if Tenant is a
partnership, any withdrawal, replacement, or substitution of any partner or partners, either general or limited, whether as the result of a single or series of transactions, shall constitute an
assignment for purposes of this Paragraph. Any assignment or subletting shall not affect the liability of the Tenant under this Lease or release Tenant from its obligations. Consent by Landlord to any
assignment or sublease shall not relieve the Tenant from the requirement of obtaining the prior written consent of Landlord to any subsequent assignment or subletting and Landlord's consent to one
assignment or subletting shall not waive Landlord's right to refuse to consent to a subsequent request. If Landlord consents to Tenant's request to assign this Lease or sublet all or a portion of the
Premises, Tenant shall pay Landlord, at the time consent is given, in consideration for Landlord's written consent to the assignment or sublease, an amount equal to $500 as
a subletting/assignment fee. In addition, Tenant or Tenant's assignee or sublessee shall be solely responsible for all costs incurred in altering the Premises to conform to Laws due to any change in
the intended use of the Premises. If Tenant collects any rent or other amounts from an assignee or subtenant in excess of the Rent for any monthly period, Tenant shall pay Landlord 50% of the excess
"monthly (after first deducting Tenant's cumulative reasonable costs related to the Transfer, including tenant finish costs, commissions, or other reasonable costs), as and when received; and after a
default by Tenant under this Lease, Landlord shall have the right to collect any Rent directly from any subtenant (or from any assignee from which is it not already collecting directly). 

        C.    Certain Subleases.    Notwithstanding the above, if Tenant requests Landlord's consent to sublet 25% or more of
the Premises, Landlord may refuse to grant consent in its sole discretion and may terminate this Lease as to that portion of the Premises; provided, however, if Landlord does not 

12

 

consent and elects to terminate the Lease as to that portion, Tenant may within 15 days after notice from Landlord to this effect withdraw Tenant's request for consent. If Landlord elects to
terminate under this Paragraph, it shall be effective on the date designated in a notice from Landlord. 

        15.    DAMAGE TO PROPERTY; CLAIMS.    

        A.    Landlord Not Liable.    Neither Landlord nor the Building Manager or their employees or agents shall have any
liability for, and Tenant shall neither hold nor attempt to hold Landlord the Building Manager and their employees and agents liable for any injury or damage, either proximate or remote, occurring
through or caused by fire, water, steam, or any repairs, alterations, injury, accident, or any other cause to or within the Premises, to Tenant's Property or other personal property of Tenant or
others kept in the Premises or stored in other parts of the Building and/or Common Areas, or for property of Tenant or others entrusted to employees of the Building, or for loss of property by theft
or otherwise (including loss or damage in the parking areas) whether by reason of the negligence or default of Landlord, other occupants or any other person or otherwise, and the keeping or storing of
all property of Tenant in the Building, Common Areas and/or Premises shall be at the sole risk of Tenant, unless caused by the gross negligence or willful misconduct of Landlord. 

        B.    Tenant's Indemnity.    Subject to provisions of Paragraph 16C, Tenant hereby agrees to indemnify, defend,
and save Landlord and Building Manager harmless of and from all actions, suits, fines, penalties, liability, loss, damages, costs, or expenses, including reasonable attorneys' fees, resulting from
Tenant's use or occupancy of the Premises, or on account of injuries to the person or property of Tenant or any third party, including any other tenant in the Building Complex or to any other person
rightfully in the Building Complex for any purpose whatsoever, where the injuries are caused by the negligence, acts or misconduct of the Tenant, Tenant's agents, servants or employees, or of any
other person entering upon the Premises under express or implied invitation of Tenant, or resulting from any breach of this Lease by Tenant. 

        16.    INSURANCE.    

        A.    Landlord's Insurance.    Landlord agrees to carry and maintain commercial general liability insurance against
personal injury, including death and property damage, in or about the Building Complex (excluding Tenant's Property), in such amounts as Landlord deems appropriate. Landlord shall maintain casualty
insurance for the Building Complex, the shell and core of the Building and the Premises (other than the insurance Tenant is required to carry on the Premises) in such amounts, from such companies, and
on such terms and conditions, including insurance for loss of Rent, as Landlord deems appropriate from time to time. 

        B.    Tenant's Insurance.    Tenant shall, at its own cost, at all times during the Lease Term, procure and maintain
workmen's compensation insurance in the maximum statutory amount and Employers Liability insurance in the amount of $500,000, each covering all persons employed by Tenant, insurance coverage at least
as broad as ISO Special Form Coverage against risks of direct physical loss or damage (commonly known as "all risk") for the full replacement cost of Tenant's Property and the contents of the Premises
including damage due to water leakage, in an amount equal to their full replacement cost, and commercial general liability insurance, including coverage for bodily injury, property damage, personal
injury (employee and contractual liability exclusions deleted), products and completed operations, contractual liability, owner's protective liability, and broad form property damage with the
following limits of liability: $2,000,000.00 each occurrence combined single limit for bodily injury, property damage and personal injury; $2,000,000.00 aggregate for bodily injury and property damage
for products and completed operations. All such insurance shall be procured from a responsible insurance company or companies authorized to do business in the State where the Premises are located,
with general policyholder's ratings of not less than AA + and a financial rating of not less than "XI" in the most current available Best's Insurance Reports, and shall be otherwise
satisfactory to Landlord. All such policies (except workmen's compensation) shall name Landlord and Building 

13

 

Manager as additional insureds, and shall provide they cannot be canceled or altered except upon 30 days prior written notice to Landlord. All insurance maintained by Tenant shall be primary
to any insurance carried by Landlord. If Tenant obtains any general liability insurance policy on a claims-made basis, Tenant shall provide continuous liability coverage for claims arising
during the entire Lease Term, regardless of when the claims are made, either by obtaining an endorsement providing for an unlimited extended reporting period in the event any such policy is canceled
or not renewed for any reason whatsoever or by obtaining new coverage with a retroactive date the same as or earlier than the expiration date of the canceled or expired policy. Tenant shall provide
certificate(s), and if requested copies of the policies, of such insurance to Landlord upon commencement of the Lease Term and at least 30 days prior to their renewal date and such
certificate(s) and policies shall name Landlord and Building Manager as additional insureds, in addition to the other requirements herein. The limits of Tenant's insurance shall not, under any
circumstances, limit the liability of Tenant under this Lease. 

        C.    Waiver of Claims and Subrogation.    Each party hereby waives and releases the other party and its respective
officers, directors, partners, members, agents, representatives and employees, from any claim (including a claim for negligence) which it might otherwise have against the other party for loss, damage
or destruction to its real and personal property (including the Building, Building Complex, Premises and Tenant's Property) or for loss of business arising out of or related to the use and occupancy
of the Premises occurring during the Lease Term which is insured or capable of being
insured against under insurance required under this Paragraph. Tenant also waives all such rights of recovery against the Building Manager. Each party shall notify its insurance carrier of this waiver
provision and obtain an appropriate waiver of subrogation provision in its policies. 

        17.    DAMAGE OR DESTRUCTION TO BUILDING.    

        A.    Repair of Damage.    In the event that the Premises or the Building is damaged by fire or other insured casualty
and insurance proceeds have been made available to Landlord to repair the damage by the insurer and any Mortgagees, the damage shall be repaired by and at the expense of Landlord to the extent of the
insurance proceeds, provided that the Premises can be made fit for occupancy, in Landlord's reasonable opinion, within 180 days after the occurrence of the damage without the payment of
overtime or other premiums. Until the repairs and restoration are completed, Rent shall be abated to the extent of any recovery by Landlord under its loss of rent insurance related to the Premises in
proportion to the part of the Premises which is unusable by Tenant in the conduct of its business as the result of the casualty, as may be reasonably determined by Landlord (but there shall be no
abatement of Rent by reason of any portion of the Premises being unusable for a period of five days or less or as set forth below). Landlord agrees to notify Tenant within 60 days after the
casualty if it estimates that it will be unable to repair and restore the Premises within 180 days, which will state the approximate length of time Landlord estimates will be required to
complete the repairs and restoration, in which event Landlord in its notice or Tenant in a notice given to Landlord within 15 days thereafter may terminate this Lease effective 30 days
from the date of such notice (the "Termination Date"). However, Tenant may not terminate this Lease or receive an abatement of Rent, as above stated, if the damage to the Premises or the Building is
in whole or in part the result of the act, omission, fault or negligence of Tenant, its agents, contractors, employees, licensees or invitees. In the event this Lease is terminated, Tenant shall pay
Rent until the Termination Date and shall forthwith surrender the Premises in accordance with Paragraph 22A. If Tenant fails so to surrender the Premises, Landlord may reenter and take
possession of the Premises and remove Tenant and the property and Alterations Tenant is required to remove under Paragraph 11, at Tenant's expense. Except as provided in this Paragraph, there
shall be no abatement of rent and no liability of Landlord by reason of any damage to or interference with Tenant's business or property arising from the casualty or the making of any such repairs,
alterations or improvements in or to the Building Complex or Premises. Tenant understands that Landlord will not carry insurance of any kind on Tenant's Property, or any Alterations installed in the
Premises by or on behalf of Tenant, and that Landlord shall not be obligated to repair 

14

 

any damage or replace any of Tenant's Property or any such Alterations, which shall be Tenant's responsibility. 

        B.    Termination of Lease.    In addition to the reason stated in subparagraph A above, if the Building or Building
Complex is substantially damaged, to the extent that Landlord, in its reasonable judgment, determines that it would be uneconomical to reconstruct or repair the damage (although the Premises may not
be affected, or if affected, can be repaired within 180 days) and Landlord, within 60 days after the damage, decides not to reconstruct or repair the damage, then notwithstanding
anything contained herein to the contrary, upon notice to that effect given to Tenant within that 60-day period, Tenant shall pay Rent, properly apportioned up to date of such termination,
this Lease shall terminate on the date provided in Landlord's notice of termination, and both parties shall be released and discharged from all further obligations hereunder (except those obligations
which expressly survive termination of the Lease
Term). A total destruction of the Building or the Building Complex shall automatically terminate this Lease as of the date of the destruction. 

        18.    CONDEMNATION.    If the entire Premises or substantially all of the Premises or any portion of the Building
Complex which shall render the Premises untenantable shall be taken by eminent domain or by condemnation or shall be conveyed in lieu of any such taking, then this Lease, at the option of either
Landlord or Tenant exercised by either party giving notice to the other of such termination within 30 days after such taking or conveyance, shall as of the date Tenant is dispossessed of the
Premises terminate and the Rent shall be apportioned as of that date; and Tenant shall surrender the Premises as required in this Lease to Landlord and Landlord may reenter and take possession of the
Premises on that date. In the event less than all of the Premises shall be taken by that proceeding, Landlord shall promptly repair the Premises as nearly as possible to its condition immediately
prior to the taking, unless Landlord elects not to reconstruct or rebuild for the same reasons provided in Paragraph 17B. In the event of any such taking or conveyance, Landlord shall receive
the entire award or consideration for the portion of the Building or Building Complex so taken. 

        19.    ESTOPPEL CERTIFICATE.    

        A.    Duty to Provide.    Tenant agrees at any time and from time to time on or before five days after written request
by Landlord, to execute, acknowledge and deliver to Landlord an estoppel certificate certifying (i) that this Lease is unmodified and in full force and effect (or if there have been
modifications, that it is in full force and effect as modified, and stating the modifications), (ii) that there have been no defaults by Landlord (to the best of Tenant's knowledge) or by
Tenant (or, if there have been defaults, describing the default), (iii) the date to which Rent and other charges have been paid in advance, if any, (iv) that Tenant claims no present
charge, lien, claim or offset against Rent, (v) that Rent is not prepaid for more than one month in advance, and (vi) such other matters as may be reasonably required by Landlord, any
Mortgages or prospective Mortgagee, or any potential purchaser of the Building. It is intended that any such statement delivered pursuant to this Paragraph may be relied upon by any prospective
purchaser of all or any portion of Landlord's interest, or by any Mortgagee or prospective Mortgagee. 

        B.    Tenant's Failure to Deliver.    Tenant acknowledges that it may be difficult, if not impossible, for Landlord to
sell or finance the Building without such an estoppel certificate from Tenant, and that Landlord would not enter into this Lease without Tenant's agreement to provide such an estoppel certificate.
Tenant's failure to deliver the estoppel certificate in the time and manner provided herein shall constitute an Event of Default. In addition, Tenant agrees to pay any damages incurred by Landlord as
a result of Tenant's failure (including costs or damages resulting from a lost sale or financing) which a court with proper jurisdiction determines to be appropriate. In addition, in the event that
Tenant does not execute and deliver the statement required by this Paragraph, Tenant hereby grants to Landlord a power of attorney coupled with an interest to act as Tenant's attorney in fact for the
purpose of executing and delivering the estoppel certificate required by this Paragraph. 

15

 

        20.    DEFAULT BY TENANT.    

        A.    Event of Default. Each one of the following events is referred to as an "Event of Default": 

        (1)  Any
failure by Tenant to pay Rent on the due date unless the failure is cured within 5 business days after notice by Landlord; however, Tenant is not entitled to more
than two notices of delinquent payments of Rent during any calendar year and, if thereafter during that calendar year any Rent is not paid when due, an Event of Default shall automatically occur; 

        (2)  If
Tenant's interest in this Lease or in the Premises, or if all or a substantial part of Tenant's Property, is seized or taken by process of law or otherwise and is not
released within 15 days; 

        (3)  Commencement
by or against Tenant of a proceeding under any provision of federal or state law relating to insolvency, bankruptcy, or reorganization ("Bankruptcy
Proceeding"), unless dismissed within 60 days after commencement; the insolvency of Tenant or execution by Tenant of an assignment for the general benefit of creditors; the convening by Tenant
of a meeting of its creditors or any significant class thereof for purposes of effecting a moratorium upon or extension or composition of its debts; or the failure of Tenant generally to pay its debts
as they mature; 

        (4)  If
a guarantor of this Lease, if any, or a general partner or member of Tenant (if Tenant is a partnership, venture or company), becomes a debtor under any Bankruptcy
Proceeding, or becomes subject to receivership or trusteeship proceedings, whether voluntary or involuntary; unless a substitute guarantor, acceptable to Landlord in light of the responsibilities of
Tenant under this Lease, is provided to Landlord within 15 days; 

        (5)  [Intentionally
Deleted] 

        (6)  If
Tenant fails to take possession of the Premises within 30 days after it is Ready for Tenant; 

        (7)  If
Tenant ceases for more than 30 days, for reasons other than those specifically permitted in this Lease, to conduct continually its normal business operations
in the Premises from the Lease Commencement Date throughout the Lease Term; 

        (8)  If
Tenant fails to perform or breaches any of the other agreements, terms, covenants or conditions hereof on Tenant's part to be performed (other than the obligation to
pay Rent or any other charges payable hereunder), and that default continues for a period of 15 days after notice by Landlord to Tenant; provided, however, that if Tenant cannot reasonably cure
the default within 15 days, Tenant shall not be in default if it commences to cure the default within that 15 days and diligently pursues it to completion within a reasonable period of
time, not to exceed 60 days. 

        B.    Remedies of Landlord. If any one or more Event of Default occurs, Landlord shall have the right at Landlord's election,
then or at any time thereafter, in addition to its other rights and remedies under this Lease or any Laws, to do any one or more of the following: 

        (1)  (a)
Without demand or notice except as required by Laws, to enter and retake possession of the Premises or any part of it and expel Tenant and those claiming through or
under Tenant and remove the effects of both or either, without being guilty of trespass and without prejudice to any remedies for unpaid of Rent or other breach of this Lease. If Landlord elects to
enter and retake possession pursuant to legal proceedings or pursuant to any notice provided for by Laws, Landlord may, from time to time, without terminating this Lease, relet the Premises or any
part of it, in Landlord's or Tenant's name but for the account 

16

 

of Tenant, for such periods (which may be greater or less than the period which would otherwise have constituted the balance of the Lease Term) and on such conditions and upon such other terms (which
may include, among other terms, leasing and brokerage fees, concessions of free rent and alteration and repair of the Premises) as Landlord, in its sale discretion, may determine, and Landlord shall
be entitled to collect all the rents from the reletting. Landlord shall in no way be responsible or liable for any failure to relet the Premises or any part of it, or for any failure to collect any
rent due upon reletting. No such entry or repossession or notice by Landlord shall be construed as an election on Landlord's part to terminate this Lease, unless written notice of termination is given
to Tenant. Landlord reserves the right following any such entry and/or reletting to exercise its right to terminate this Lease by giving Tenant notice, in which event the Lease will terminate as
specified in that notice. 

        (b)  If
Landlord takes possession of the Premises without terminating this Lease, Tenant shall pay to Landlord (i) the Rent and other sums payable under this Lease,
less (ii) the net proceeds, if any, of any reletting of the Premises after deducting all of Landlord's expenses incurred in connection with the reletting, including all repossession costs,
leasing and brokerage fees, concessions, attorneys' fees, expenses of employees, alteration and repair costs ("Reletting Expenses"). If, in connection with any reletting, the new lease term extends
beyond the Lease Term or the premises covered thereby include other premises not part of the Premises, a fair apportionment of the Rent received from the reletting and the Reletting Expenses will be
made in determining the net proceeds received from the reletting. In determining the net proceeds, any rent concessions will be apportioned over the term of the new lease. Tenant shall pay the amount
due under this Paragraph to Landlord monthly on the days on which Rent is due under this Lease. 

        (2)  To
give Tenant notice of termination of this Lease on the date specified in that notice, and on that date Tenant's right to possession of the Premises shall cease and
this Lease shall terminate except as to
Tenant's liability as provided below. In the event this Lease is terminated pursuant to the provisions of this subparagraph), Tenant shall remain liable to Landlord for damages in an amount equal to
the Rent and other amounts which would have been owing by Tenant for the balance of the Lease Term had this Lease not terminated, less the not proceeds, if any, from reletting of the Premises by
Landlord subsequent to termination, after deducting the Reletting Expenses. Landlord shall be entitled to collect such damages from Tenant monthly on the days on which Rent would have been payable if
this Lease had not been terminated. Alternatively, if this Lease is terminated, Landlord at its option may recover immediately from Tenant as damages for loss of the bargain and not as a penalty an
amount equal to the worth at the time of termination of the excess, if any, of the Rent payable under this Lease for the balance of the Lease Term over the then Reasonable Rental Value of the Premises
for the same period. "Reasonable Rental Value" shall be the amount of rent Landlord can obtain for the remaining balance of the Lease Term, taking into account a reasonable period for reletting, after
deducting all estimated Reletting Expenses. 

        (3)  Advance
such monies, and take such other action, for Tenant's account as reasonably may be required to perform Tenant's obligation or to mitigate any default or Event of
Default, but no such advance or action shall cure the default or Event of Default. Tenant agrees to reimburse Landlord for any such advances, as Additional Rent, upon demand from Landlord. Any such
advance, and any cost or expense so incurred, shall bear interest at the rate of 11/2% per month, compounded monthly, until paid by Tenant. 

        (4)  Suits
for the recovery of Rent and damages may be brought by Landlord, from time to time, at Landlord's election, and nothing herein shall be deemed to require Landlord
to wait until each installment is due or until the expiration of the Lease Term. Each right and remedy provided 

17

 

for in this Lease shall be cumulative and in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or equity or otherwise, including, but not limited
to, suits for injunctive relief and specific performance. The exercise or beginning of the exercise by Landlord of any one or more rights or remedies shall not preclude the simultaneous or later
exercise by Landlord of other rights or remedies. All costs incurred by Landlord in connection with collecting Rent or other amounts and damages owing by Tenant or to enforce any provision of this
Lease, shall also be recoverable by Landlord from Tenant. 

        (5)  No
failure by Landlord to insist upon the strict performance of any agreement, term, covenant or condition hereof or to exercise any right or remedy, and no acceptance
of full or partial Rent during the continuance of any such breach shall constitute a waiver of any such breach or agreement, term, covenant, or condition, except by written instrument executed by
Landlord or relieve Tenant from the obligation to make the full payment as and when due. No waiver shall affect or alter this Lease, and each and every agreement, term, covenant, and condition hereof
shall continue in full force and effect with respect to any other then existing or subsequent breach. 

        (6)  Nothing
contained in this Lease shall limit or prejudice the right of Landlord to obtain as liquidated damages in any bankruptcy or similar proceeding the maximum amount
allowed by Law at the time such damages are proven, whether or not the amount is greater, equal to, or less than the amounts
recoverable, either as damages or Rent, referred to in any of the preceding provisions of this Paragraph. 

        C.    Late Charges and Interest.    

        (1)  Rent
or other amounts owed by Tenant which are not received by Landlord by the 5th day after the date they are due shall be subject to a late charge of 5% of the amount
due. Additionally, if Rent is not received by Landlord within 15 days after it is due (or after notice of default, if notice is required), the amount due shall be subject to an additional 5%
late charge. Rent and all other monetary obligations under this Lease not-received by Landlord when due shall also bear interest at the rate of 2% per month, compounded monthly, from the
date due until fully received by Landlord. Tenant acknowledges that late payments will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which would be impossible or
extremely difficult to ascertain. Those costs include processing and accounting charges, interest and late charges imposed by Mortgagees, and other general and administrative expenses. Tenant agrees
that the late charges and interest contemplated by this Paragraph represent a fair and reasonable estimate of the costs which Landlord will incur as a result of any such late payments by Tenant.
Acceptance of late charges and interest by Landlord shall not constitute a waiver of Tenant's default with respect to any overdue amount, or prevent Landlord from exercising any other rights or
remedies under this Lease. 

        (2)  If
Landlord does not receive any payment of Rent on or before the dates set forth in this Lease on more than three occasions in any Lease Year, then in addition to the
late charges provided for in subparagraph (1) above, Tenant shall pay a habitual late charge of 5% for every payment received by Landlord after the first day of each subsequent month, until all
payments of Rent have been received by Landlord on or before the first day of every subsequent month for at least 6 consecutive months. 

        D.    Mitigation.    Notwithstanding anything to the contrary contained elsewhere in this Lease, if Landlord
terminates Tenant's right of possession without terminating this Lease, Landlord shall use reasonable efforts to relet the Premises so as to mitigate its damages pursuant to this Paragraph, provided,
however, that so long as Landlord uses such reasonable efforts Landlord shall in no way be responsible or liable for any failure to relet the Premises, or any part of it, or for any failure to collect
any Rent due upon any such reletting; and Landlord shall not be required to spend its own funds, to 

18

 

give priority (or even equal opportunity) to the Promises over other rental space owned by Landlord or its affiliates or to compromise in any way the terms, uses or credit worthiness of a tenant upon
or to which it would customarily lease space such as the Premises; and Landlord shall be entitled, in its sole discretion, to seek a single tenant for the entire Premises, even though it may take a
substantially longer period to obtain such a tenant and its efforts may be unsuccessful; and this requirement shall not affect in any way Tenant's obligation to obtain Landlord's consent as under
Paragraph 14. 

        E.    No Waiver.    No payments of Rent or money by Tenant to Landlord after notice of termination or after
termination of this Lease, in any manner, shall reinstate, continue, or extend the term of this Lease or
affect any notice given to Tenant prior to the payment, it being agreed that after the service of notice of termination or the commencement of a suit or other final judgment granting Landlord
possession of the Premises, Landlord may receive and collect any sums of Rent due or an other sums of money, whether as Rent or otherwise, and exercise Landlord's rights and remedies hereunder, and
shall not waive any default or notice or in any manner affect any pending suit or judgment. 

        F.    Landlord's Lien.    [Intentionally Deleted] 

        21.    SUBORDINATION AND ATTORNMENT.    

        A.    General. This Lease, and all rights of Tenant under it, at Landlord's option shall be subordinate to any ground leases,
deeds of trust, mortgages and security agreements, including leasehold mortgages and building loan agreements, now or hereafter placed upon the Building or the Building Complex (including all advances
made thereunder), and to all amendments, renewals, replacements and extensions thereof (collectively, "Mortgage"), but only if and when any Lessor or Mortgagee (as defined below) executes and delivers
to Tenant a non-disturbance and attornment agreement reasonably acceptable to Landlord, Tenant and the Lessor or Mortgagee, under which, among other provisions which may be included
(1) Tenant agrees to recognize and attom to the Lessor or Mortgagee if it becomes the Landlord under this Lease, and (2) the Lessor or Mortgagee (on behalf of itself and its successors
and assigns in interest) agrees to recognize Tenant's rights under this Lease as long as Tenant is not in default under this Lease, notwithstanding defaults under any such ground lease or Mortgage or
foreclosure, receivership or sale thereunder. If any holder of a Mortgage ("Mortgagee") or the lessor of any ground lease ("Lessor".) elects to have this Lease made superior to the lien of its
Mortgage and gives notice to Tenant, this Lease will be deemed prior to that Mortgage, whether this Lease is dated prior or subsequent to the date of that Mortgage. In confirmation of this
non-disturbance and attornment, subordination or superior position, as the case may be, Tenant shall promptly execute and deliver to Landlord (or such other party so designated by
Landlord) at Tenant's own cost and expense, within 10 days after request from Landlord any instruments as may be reasonably required for this purpose by Mortgagee or Lessor, in recordable form
if requested. If Tenant fails to do so within that 10-day period, Tenant shall be in default under this Lease, and Tenant hereby irrevocably grants to Landlord a power of attorney coupled
with an interest to act as Tenant's attorney-in-fact for the purposes of executing whatever documents are necessary to evidence such subordination or superior position. Tenant
agrees to attorns to all successor owners of the Building, whether such ownership is acquired by sale, foreclosure of a Mortgage, or otherwise. 

        B.    Lease Modifications.    If, in connection with the procurement, continuation or renewal of any financing for the
Building or the Building Complex, the Mortgagee requests reasonable modifications of this Lease, Tenant will not unreasonably withhold its consent, provided the modifications does not adversely affect
any rights of Tenant under this Lease or decrease the obligations of Landlord under this Lease. 

19

 

        22.    SURRENDER AND HOLDING OVER.    

        A.    Surrender.    Upon the expiration or termination of this Lease or termination of Tenant's right of possession,
Tenant shall promptly surrender the Premises to Landlord broom clean, in good order and condition, ordinary wear and tear and loss by fire or other insured casualty excepted (except as otherwise
provided in Paragraphs 16 and 17), and Tenant shall remove Tenant's Property and the Alterations and other property as required under Paragraph 11. If Tenant fails to vacate the Premises on a
timely basis as required, Tenant shall be liable to Landlord for all costs incurred by Landlord as a result of that failure, including, but not limited to, any amounts required to be paid to third
parties who were to have occupied the Premises. 

        B.    Property Not Removed.    All Tenant's Property not removed from the Premises upon the termination of this Lease
or of Tenant's right of possession for any cause whatsoever shall conclusively be deemed to have been abandoned and may be appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant or any other person and without obligation to account therefor, Tenant shall pay Landlord all expenses incurred in so doing. 

        C.    Holding Over.    If, after the termination of this Lease or of Tenant's right of possession, Tenant remains in
possession of the Premises and continues to pay Rent, and Landlord consents to the possession and accepts the Rent, without any written agreement, the holding over shall be deemed a tenancy from
month-to-month, under all the provisions of this Lease, but at a monthly Rent equivalent to 150% of the monthly installments of Rent paid by Tenant immediately prior to the
termination or the current market rental rate for the Premises, whichever is greater. If, after the termination of this Lease or of Tenant's right of possession, Tenant remains in possession without
Landlord's consent, Landlord will suffer damages, the amount of which will be difficult to determine; therefore, Tenant shall pay to Landlord as liquidated damages an amount equal to 200% of the Rent
calculated on a per them basis, applicable under the Lease in the month immediately prior to the termination. All such Rent shall be payable in advance on the same day of each month. The
month-to-month tenancy may be terminated by either party upon 10 days' notice prior to the end of any such monthly period. Nothing contained herein shall be construed as
obligating Landlord to accept any Rent tendered by Tenant after any such termination or as obligating Landlord to consent to any holding over, or as relieving Tenant of its liability under this Lease. 

        23.    LANDLORD DEFAULT.    In the event of an alleged default on the part of Landlord under this Lease, Tenant shall
give notice to Landlord and shall afford Landlord a reasonable opportunity to cure the default. Notice to Landlord of any such alleged default shall be ineffective unless notice is simultaneously
delivered to any Mortgagee as hereafter provided. Tenant agrees to give all Mortgagees, by certified mail, return receipt requested, a copy of any notice of default served upon Landlord, provided that
prior to such notice Tenant has been notified, in writing (by way of notice of Assignment of Rents and Leases, or otherwise), of the address of such Mortgagee. Tenant further agrees that if Landlord
shall have failed to cure the default within the time provided, then the Mortgagee shall have an additional 30 days following a second notice from Tenant within which to cure the default. If
the default cannot be cured within that time, Mortgagee shall have such additional time as may be necessary provided that within the 30 days, Mortgagee has commenced and is diligently pursuing
the remedies necessary to cure such default (including, but not limited to, commencement of foreclosure
proceedings, if necessary, to effect its cure). Tenant may be entitled to equitable relief and actual damages, but not consequential or punitive damages, incurred by Tenant as a result of any default
by Landlord, but shall not be entitled to any abatement of or offset against Rent until it receives a final judgment authorizing it to do so. 

        24.    NOTICE.    All notices, demands or statements required or permitted to be given to Landlord shall be in writing
and shall be deemed duly served when deposited in the United States mail, postage prepaid, certified or registered, return receipt requested, addressed to Landlord at Landlord's address 

20

 

shown on the Basic Lease Term Sheet or at the most recent address of which Landlord has notified Tenant in writing. All notices, demands or statements required or permitted to be given to Tenant
shall be in writing and shall be deemed duly served when delivered to any officer or agent of Tenant (or a partner or member of Tenant if Tenant is a partnership or other entity or to Tenant
individually if Tenant is a sole proprietor) or manager of Tenant whose office is in the Building, or when deposited in the United States mail, postage prepaid, certified or registered, return receipt
requested, addressed to Tenant at the Premises, or, prior to Tenant's taking possession of the Premises, to the address known to Landlord as Tenant's principal office address. Either party shall have
the right to designate in writing, served as above provided, a different address to which notice is to be delivered. This Paragraph shall not prohibit notice from being given as provided in
Rule 4 of Colorado Rules of Civil Procedure, as amended from time to time. 

        25.    RULES AND REGULATIONS.    The rules and regulations attached as  Exhibit D are deemed a part of this Lease, and Tenant
agrees that Tenant and its employees, agents or any others permitted by Tenant to occupy or
enter the Premises shall at all times abide by those rules and regulations. Tenant agrees that Landlord may change the rules and regulations for the Premises and the Building Complex from time to time
(including the addition of rules and regulations regarding parking), and Tenant agrees to abide by them upon receipt of notice of the change. 

        26.    PARKING.    Tenant shall have the right to use only the number of parking spaces indicated on the Basic Lease
Term Sheet and any use of additional parking spaces by Tenant may be deemed by Landlord as a default under this Lease. All vehicles parked in the parking spaces are at the sole risk of Tenant,
Tenant's agents and invitees and Landlord shall have no liability for loss or damage. 

        27.    RIGHT TO RELOCATE TENANT.    [Intentionally Deleted] 

        28.    MISCELLANEOUS.    

        A.    Limitation of Landlord's Liability.    The term "Landlord" as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall mean and include only the owner or owners of the Building at the time in question and, in the event of any transfer or transfers of the title
thereto,
Landlord herein named (and in the case of any subsequent transfers or conveyances, the then grantor) shall be automatically released, from and after the date of the transfer or conveyance, of all
liability as respects the performance of any covenants or obligations on the part of Landlord thereafter to be performed, provided that the Security Deposit then held by Landlord or the then grantor
at the time of the transfer shall be delivered to or credited to the purchase price paid by the grantee. Notwithstanding anything to the contrary contained herein, Landlord's liability under this
Lease shall be limited to Landlord's interest in the Building Complex, and Tenant shall not and cannot seek any recovery or deficiency against any other assets or against any partners, lenders,
officers, directors, or employees of Landlord or against the Building Manager. 

        B.    No Merger.    The termination of this Lease shall not be a merger, and such termination shall, at the option of
Landlord, either terminate all subleases and subtenancies or operate as an assignment to Landlord of any or all such subleases or subtenancies. 

        C.    Landlord's Use of Common Areas.    Tenant agrees that Landlord has the right to use the Common Areas for the
general benefit of the Building Complex, including for the purposes of completing or making repairs or alterations in any portion of the Building. Landlord may use the Building Complex, the Common
Areas and one or more of the street entrances to the Building Complex as may be necessary in Landlord's judgment to complete any such work or for other purposes in connection with Landlord's
management or operation of the Building Complex. 

        D.    Covenants are Independent.    This Lease shall be construed as though the covenants between Landlord and Tenant
are independent and not dependent, and subject to Paragraph 23, Tenant shall 

21

 

not be entitled to any set off of the Rent or other amounts owing hereunder against Landlord if Landlord fails to perform its obligations 

        E.    Severability.    If any provision of this Lease is held by a court of competent jurisdiction to be illegal,
invalid, or unenforceable under any Laws, it is the intention of the parties that the remainder of this Lease shall not be affected and that the illegal, invalid, or unenforceable provision be
replaced by a provision (or construed to be) as similar in terms as possible and be legal, valid, and enforceable. 

        F.    Captions and Terms.    The caption of each Paragraph is added as a matter of convenience only and shall have no
effect on the construction of any provision or provisions of this Lease. The words "include" and "including" when used in this Lease are intended in their illustrative sense, not as a limitation, and
the terms that follow such words are illustrative and not exclusive. References to "provisions" of this Lease refers to all of the provisions, terms, conditions, covenants and agreements in this
Lease. The words "shall" and "will" have the same meaning. 

        G.    Binding Effect: Governing Law.    Subject to Paragraphs 14 and 29A, this Lease shall inure to the benefit of,
and be binding upon, Landlord and Tenant and their respective heirs, administrators, successors and assigns. This Lease is subject to and shall be construed in accordance with Colorado law. 

        H.    Tenant's Authority.    Tenant and the party executing this Lease on behalf of Tenant represent to Landlord that
they are authorized to do so by requisite action of Tenant and that this Lease is binding on Tenant, and agree, upon request, to deliver to Landlord a resolution or similar document or opinion of
counsel to that effect. 

        I.    Joint and Several.    If there are more than one entity or person which are the Tenant under this Lease, the
obligations imposed upon Tenant under this Lease shall be joint and several. 

        J.    Acts Binding Landlord.    No act or thing done by Landlord or Landlord's agents during the term, including any
agreement to accept the surrender of the Premises or to amend or modify this Lease, shall be binding on Landlord, unless in writing and signed by a person authorized to bind Landlord. The delivery of
keys to Landlord, or Landlord's agents, employees, or officers shall not operate as a termination of this Lease or a surrender of the Premises. No payment by Tenant or receipt by Landlord of a lesser
amount than the full monthly Rent and all other amounts owing, as herein stipulated, shall be deemed to be other than on account of the earliest due Rent or other amounts, nor shall any endorsement or
statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction. Landlord may accept any such check or payment without prejudice to Landlord's right
to recover the balance owed or to pursue any other remedy available to Landlord. 

        K.    Change in Light or View.    Tenant agrees that no diminution of light, air, or view by any structure that may
hereafter be erected (whether or not by Landlord) shall entitle Tenant to any reduction of Rent or other charges under this Lease, result in any liability of Landlord to Tenant, or in any way affect
this Lease or Tenant's obligations under it. 

        L.    No Other Agreements; Amendments.    Tenant acknowledges and agrees that it has not relied upon any statements,
representations, agreements, or warranties by Landlord, its agents or employees, except those expressed in this Lease and that no amendment or modification of this Lease shall be valid or binding
unless in writing and executed by the parties hereto in the same manner as the execution of this Lease, and that this Lease incorporates all prior discussions and agreements. 

        M.    Brokers.    Tenant represents and warrants to Landlord that no broker or agent negotiated or was instrumental in
the negotiation or consummation of this Lease, except Landlord's Broker and any Tenant's Broker specified in the Basic Lease Term Sheet. Tenant agrees to indemnify and hold Landlord harmless from and
against any loss, expense, cost or liability incurred by Landlord as a result 

22

 

of a claim by any other broker or finder, whether or not meritorious, claiming through Tenant. Tenant acknowledges Landlord is not liable for any representations by Landlord's Broker or Tenant's
Broker regarding the Premises, the Building, the Building Complex or this Lease. 

        N.    Recordation.    Tenant shall not record or permit to be recorded this Lease or any memorandum of it; and any
such recording shall be an Event of Default. 

        O.    Execution Required.    Submission of this Lease or any letter regarding it for examination or signature by
Tenant shall not grant to Tenant an option or right to lease the Premises; and this Lease shall not be effective as a lease or otherwise binding on either party until execution and delivery by both
Landlord and Tenant. 

        P.    Attorney's Fees.    If either party brings an action to enforce any provision of this Lease, the prevailing
party shall be entitled to recover its reasonable attorney's fees, as determined by the court. 

        Q.    Time of Essence; Effective Dates.    Time is of the essence herein and, unless waived by Landlord (which it
shall have the right, but not the obligation, to so do), this Lease is contingent upon execution and delivery by Tenant to Landlord no later than 5:00 p.m. on February    , 1999
without any changes which are not approved by Landlord. This Lease shall become effective only upon execution by Landlord and delivery of a fully-executed copy of this Lease to Tenant. 

        29.    RIGHT OF FIRST OFFER.    Subject to the renewal options and expansion options granted in written leases entered
into with the initial tenants first occupying space in the Building, whether entered into before or after the date of this Lease, if during the initial Term, Landlord shall receive a written bona fide
offer ("Offer"), satisfactory to Landlord in its sole discretion, to lease approximately 17,567 rentable square feet adjacent to the Premises in the Building as depicted on
Exhibit A-1 attached hereto (the "Offer Space"), Landlord agrees to offer to Tenant, by notice ("Offer Notice"), the one-time right to lease the Offer Space upon the
same terms and conditions set forth in the Offer and, at Tenant's election, Tenant may elect to lease such same on the same terms and conditions set forth in the Offer, as adjusted to reflect the
number of months remaining in the initial Term. It is expressly understood and agreed that if the Offer is for more than the 17,567 rentable square feet depicted on Exhibit A-1 the
term Offer Space shall include such additional square footage and Tenant's rights hereunder shall only be available to Tenant for the entire Offer Space as set forth in the Offer. 

        A.    Exercise.    Provided this Lease shall then be in full force and effect and Tenant shall not be in default
hereunder beyond any applicable notice and grace period, Tenant may exercise its right to lease the Offer Space by written notice to Landlord within 5 days after the date of the Offer Notice,
the time of the giving of such notice to be of the essence of this Paragraph, in which event Landlord and Tenant shall enter into a amendment of this Lease, reasonably acceptable to Landlord, to
incorporate the terms and conditions set forth in the Offer. In the event that Tenant fails to accept the offer contained in Landlord's Notice within such 5-day period or fails to execute
an Amendment modifying this Lease to incorporate the terms and conditions contained in the Offer within 5 days after such Amendment has
been delivered to Tenant, Tenant shall be deemed to have waived its rights under this Paragraph to lease the Offer Space, Landlord shall have the absolute right to lease the Offer Space to any other
person or entity on any same terms and conditions, and Tenant shall have no further rights with respect to the Offer Space. Notwithstanding Tenant's acceptance of the Offer pursuant to the terms of
this Paragraph, Landlord shall not be obligated to deliver possession of the Offer Space to Tenant if, prior to delivery of possession of the Offer Space, Tenant shall be in Default hereunder beyond
any applicable notice and grace period, in which event the rights of Tenant hereunder shall terminate and be of no further force or effect. 

        B.    No Default.    The option herein granted shall continue only so long as there have been no uncured Defaults
hereunder by Tenant and only so long as there are at least 36 months remaining on the initial Term as of the Offer Space Commencement Date. In the event of an assignment of the 

23

 

Lease or a subletting (other than an assignment to or subletting of the entire Promises by a Related Corporation) or vacation of more than 25% of the Premises (other than an assignment to or
subletting of the entire Premises by a Related Corporation), Tenant's rights under this Section are null and void. Further, this right granted in this Section is personal to Tenant, is not assignable
(other than to a Related Corporation assignee) and may not be exercised by any sublessee or assignee of Tenant (other than to a Related Corporation assignee or sublessee of the entire Premises),
regardless of whether the sublessee or assignee has been approved by Landlord. 

        30.    OPTION TO EXTEND.    As additional consideration for the covenants of Tenant hereunder, Landlord hereby grants
Tenant an option (the "Option") to extend the term of the Lease for one (1) term of five (5) years (the "Option Term"). The Option shall apply to all space contained in the Premises at
the time and shall be an the following terms and conditions: 

        A.    Exercise of Option.    Written notice of Tenant's exercising an Option ("Notice") shall be given to Landlord no
earlier than 12 months and no less than 9 months prior to the expiration of the then current Term and, upon the giving of such Notice, this Lease and the Term shall be extended with the
same force and effect as if the Option Term had originally been included in the Term and the Expiration Date shall thereupon be deemed to be the last day of the Option Term. Tenant's right to exercise
an Option shall be conditioned on there being no uncured Event of Default under the Lease at the time of exercise of the Option or at the time of the commencement of the Option Term. 

        B.    Rent Determination.    The Option granted hereunder shall be upon the terms and conditions contained in the
Lease except (i) rights of first offer or abilities to request expansion space shall not be applicable, (ii) no Landlord's contributions, tenant allowances or similar concessions shall
be applicable, (iii) no leasing commissions shall be payable by Landlord, (iv) the Base Year for Option Term shall be the last year of the initial Lease Term, and (v) the Rent to
be paid by Tenant to Landlord during the Option shall be the then Market Rate, as hereinafter defined. Subject to said caveat, Rent for the Option Term shall be determined as follows: 

        (1)  Within
14 days of Landlord's receipt of the Option Notice, Landlord shall notify Tenant in writing ("Landlord's Notice") of the proposed Market Rate, and the
resulting Rent, applicable to the Option ("Landlord's Rent Rate"). Tenant shall, within 14 days following receipt of Landlord's Notice, notify Landlord in writing of the acceptance or rejection
of the Landlord's Rent Rate set forth therein. If Tenant fails to respond to Landlord's Notice within such 14-day period, Tenant shall be deemed to have accepted Landlord's Rent Rate. If
Tenant rejects Landlord's Rent Rate, Tenant's rejection notice shall state Tenant's estimate of the Market Rate, and the resulting Rent, applicable to the Option ("Tenant's Rent Rate"). Landlord
shall, within 14 days following receipt of notice of Tenant's Rent Rate, notify Tenant of its acceptance of the Tenant's Rent Rate. If Landlord fails to respond within such 14-day
period, Landlord shall be deemed to have rejected Tenant's Rent Rate. Landlord and Tenant shall act in good faith in estimating and proposing their respective determinations of the Market Rate. 

        (2)  If
Landlord rejects Tenant's Rent Rate, the parties shall thereafter attempt to negotiate the Rent in good faith. If, however, the parties have not agreed on the Rent
within 40 days after the date of the Option Notice, the Rent for the renewal term in question shall be determined as set forth below: 

        (a)  Within
60 days after delivery by Tenant of the Option Notice, Landlord and Tenant shall each appoint an Appraiser, as hereinafter defined. The two Appraisers
shall meet promptly and attempt to determine the Market Rate for the renewal term in question. The determination made by the two Appraisers, if they agree, shall be the Market Rate. If the amounts
determined by the two Appraisers vary by less than 5%, then the average of the two values shall be the Market Rate. 

24

 

        (b)  If
the Market Rate is not established pursuant to sub-paragraph (a) within 10 days following their appointment, the two Appraisers shall
immediately select a third Appraiser. If they are unable to agree on a third Appraiser within 5 days, then they shall each select the names of two willing persons qualified to be Appraisers
hereunder and from the four persons so named, one name shall be drawn by lot by a representative of Tenant in the presence of a representative of Landlord, and the person whose name is so drawn shall
be the third Appraiser. If either of the first two Appraisers fails to select the names of two willing, qualified Appraisers so that a third Appraiser can be selected by lot, as aforesaid, the third
Appraiser shall be selected by lot from the two Appraisers which were selected by the other Appraiser for the drawing. The three Appraisers so selected shall confer and immediately proceed to
determine the Market Rate for the renewal term in question. If the three Appraisers fail to agree on such Market Rate within 10 days after the selection of the third Appraiser, the average of
the two determinations of Market Rate which are closest to each other shall be the Market Rate for the renewal term in question. 

        (c)  The
Appraisers selected hereunder shall deliver a signed written report of their appraisal, or the average of the two closer appraisals, as the case may be, to Tenant
and Landlord. The fee of the Appraiser initially selected by Tenant shall be paid by Tenant, the fee of the Appraiser initially selected by Landlord shall be paid by Landlord, and the fee of any third
Appraiser and any expenses reasonably incident to the appraisal (except attorneys' fees, which shall be borne by the party incurring the same) shall be shared equally by Tenant and Landlord. Any
vacancy in the office of the Appraiser appointed
by Tenant shall be filled by Tenant, any vacancy in the office of the Appraiser appointed by Landlord shall be filled by Landlord, and any vacancy in the office of the third Appraiser shall be filled
by the first two Appraisers in the manner specified above for the selection of a third Appraiser. 

        (d)  If
appraisal proceedings are initiated as provided above in order to determine the Market Rate which is applicable to the term of the Option, the decision and award of
the Appraisers as to such Market Rate shall be final, conclusive, and binding on the parties, absent settlement by agreement of the parties prior to the rendering by the Appraisers of any such
decision and award and, further, as provided above, the Rent will be the Market Rate for the applicable renewal term; provided, however, that notwithstanding the determination of Market Rent, in no
event shall the Rent be less than the Rent payable in the last year of the Term or, if applicable, the last year of the First Option. 

        (e)  If
Rent is not finally determined prior to the commencement of the term of the Option, Tenant shall pay Rent in the amount of the Rent theretofore in effect under this
Lease until the final determination of the Rent for the renewal term in question occurs as provided above. If the final determination of such Rent is different from the amount paid by Tenant, Tenant
shall promptly pay to Landlord any deficiency in Rent or Landlord shall promptly pay to Tenant any overpayment of Rent from the commencement of the term of the Option until such final determination.
If appraisal proceedings are initiated, as provided above, neither Landlord nor Tenant shall disclose its initial proposal for Market Rate to any of the Appraisers. 

        C.    Appraiser Defined.    "Appraiser," used herein, shall mean a person (A) who is impartial, (B) who
has at least ten years' experience as a real estate broker in the office building leasing market for the Northwest/Interlocken Denver, Colorado area, (C) who is a senior employee of a
nationally or regionally recognized brokerage firm who has not acted as the primary representative on such broker's firm's account for either Landlord or Tenant in the previous three years, and
(D) who is a Colorado 

25

 

licensed real estate broker in good standing and is a member of the Society of Industrial and Office Realtors, or a successor or similar organization of recognized national standing. 

        D.    Market Rate Defined.    "Market Rate" shall mean the annual rental rates then being charged in the Building and
in the Northwest/Interlocken Denver, Colorado area for space comparable to the space for which the Market Rate is being determined, taking into consideration (i) use, location and floor level
within the applicable building, (ii) the location, quality and age of the building, (iii) the definition of rentable area or net rentable area, as the case may be, with respect to which
such rental rates are computed, (iv) leasehold improvements allowances provided, but assume the space has been previously built out and the leasing of the space is on an "as is" basis,
(v) rental concessions offered with respect to such other space (such as abatements, lease assumptions or takeovers and moving expenses), (vi) the date the particular rate under
consideration became effective, (vii) the term of the lease under consideration, (viii) the fact that no brokers' commissions will be payable by Landlord in connection with the Option,
(ix) the extent of services provided thereunder, (x) applicable distinctions between "gross" leases and "net" leases, (xi) the credit rating or worthiness of the Tenant under this
Lease, (xii) any other adjustments (including by way of indexes) to rental, (xiii) availability, nature and quality of parking, and (xiv) any other relevant term or condition in
making such evaluation. 

        E.    Expiration of Options.    After failure to exercise the Option above described, there shall be no further rights
on the part of Tenant to extend the term of the Lease. 

	 	 	"Landlord"
	

 	
 	

NEW ALLIANCE PROPERTIES, INC.,

a Delaware corporation
	

 	
 	

By:	
 	

/s/  SIGNATURE ILLEGIBLE      
As its: Chief Financial Officer

	

 	
 	
Tenant
	

 	
 	

ESOFT, INC.,

a Delaware corporation
	

 	
 	

By:	
 	

/s/  JEFFREY L. FINN      
As its: CEO

Attest:

By:

      

Title:

        

26

[Diagram of 295 Interlocken leased space] 

LEGAL
DESCRIPTION

FILE NO. 1080364

PAGE 1 of 1 

 
 

"EXHIBIT B"    
  

PARCEL
1:

LOT 2,

BLOCK 1,

REPLAT OF INTERLOCKEN FILING NO. 1,

COUNTY OF BOULDER,

STATE OF COLORADO. 

PARCEL
2: 

NON-EXCLUSIVE
EASMENTS CREATED BY MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR INTERLOCKEN FILED AT RECEPTION NO. 599882 ON JANUARY 20, 1984 AND AMENDED AND
RESTATED MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR INTERLOCKEN FILED AT RECEPTION NO. 1025034, ON JANUARY 24, 1990, AS AMENDED, 

COUNTY
OF BOULDER,

STATE OF COLORADO. 

  

 
 

EXHIBIT C
  WORK LETTER    
  

        This is the Work Letter referred to in and specifically made a part of the Lease to which this Work Letter is annexed, covering the Premises, as more particularly
described in the Lease. 

        Landlord
and Tenant agree as follows: 

        1.    DEFINED TERMS.    The following capitalized terms shall have the meaning set forth below and, unless provided to
the contrary herein, the remaining capitalized terms set forth herein shall have the meaning set forth in the Lease: 

	 	Landlord's Representative:	 	John Chambers
	 	

Tenant's Representative:	
 	

Jay Rollings
	 	

Tenant's Architect:	
 	

W.E. Kieding
	 	

Landlord's Contribution:	
 	

$54,472.00, with at least $27,236.00 to be used for the planning and constructing of the Tenant Improvements and the remainder to be used at Tenant's discretion.

2.
TENANT IMPROVEMENTS. The "Tenant Improvements" shall mean the interior walls, partitions, doors, door hardware, wall coverings, wall base, counters,
lighting fixtures, retrofit of existing Premises lighting, electrical and telephone wiring, removal of all telecommunications cabling throughout the
Premises, cabling for computers, telecommunications and fiber optics, metering and outlets, ceilings, floor and window coverings, fire sprinklers system, Tenant signage, security system, and other
items of general applicability that Tenant desires to be installed in the interior of the Premises or on the exterior of the Premises or Buildings. Tenant shall also be responsible for installing
separate meters to measure the amount of Tenant's electrical consumption within the Premises such that the Premises shall be separately metered and Tenant shall pay directly to the applicable utility
company all utility costs for the Premises and the HVAC serving the Premises. All costs and expenses associated with such meters (such as, but not limited to, installation and preparation of plans and
specifications), shall be paid initially by Tenant. Landlord shall reimburse Tenant for 50% of such actual costs ("Landlord's Meter Contribution") upon receipt of paid invoices, as hereinafter
provided. 

3.
DRAWINGS. Subject to the provisions of this Work Letter pertaining to Landlord's payment of the Landlord's Contribution, Tenant shall engage and pay
for the services of an Architect, which Architect shall be subject to Landlord's reasonable approval, to prepare a space layout, working drawings and specifications for all Tenant Improvements,
including the location of any Tenant Improvements located outside of the Premises. Tenant shall devote such time in consultation with the Tenant's Architect as shall be necessary to enable the
Tenant's Architect to develop complete and detailed architectural, mechanical and engineering drawings and specifications for the construction of the Tenant Improvements, showing thereon all Tenant
Improvements, including all materials and specifications ("Drawings"). Tenant hereby acknowledges and agrees that it will endeavor, through the exercise of its Architect's and other consultants best
professional judgment and skills, to have the Drawings comply with all applicable laws, including the Americans with Disabilities Act (as currently interpreted), and other ordinances, orders, rules,
regulations and requirements of ail governmental authorities having jurisdiction thereof. 

4.
LANDLORD'S APPROVAL. On or before the applicable Time Limit set forth below, Tenant shall submit to Landlord complete and final Drawings for the
Tenant Improvements in the form of two sets of Drawings and a computer disk thereof. The Drawings shall be subject to the approval of Landlord, 

C-1

 

which approval shall not be unreasonably withheld or delayed. If Landlord should disapprove such Drawings, Landlord shall specify to Tenant the reasons for its disapproval and Tenant shall cause the
same to be revised to meet the Landlord and Tenant's mutual reasonable satisfaction and shall resubmit the same to Landlord, as so revised, on or before the applicable Time Limit set forth in
Section 8 below. 

5.
CONSTRUCTION OF TENANT IMPROVEMENTS. It is understood and agreed by the parties that, as hereinafter set forth, the Tenant has elected to retain the
General Contractor and arrange for the construction and installation of the Tenant improvements itself in a good and workmanlike manner (Tenant's Work"). All Tenant's Work shall be of a quality and
standard equivalent to the standards for construction set for the Buildings. On or before the Time Limit applicable set forth below, Tenant shall submit to Landlord the names of the General Contractor
and the electrical, ventilation, plumbing and heating subcontractors (hereinafter "Major Subcontractors") for Landlord's approval, which approval shall not be unreasonably withheld or delayed. If
Landlord shall reject the General Contractor, any Major Subcontractor Landlord shall advise Tenant of the reason(s) in writing and Tenant shall submit another selection to Landlord. Along with
Tenant's notice, tenant shall notify Landlord of its estimate of the total costs of the Tenant's Work. 

6.
TENANT'S CONSTRUCTION OF THE TENANT IMPROVEMENTS. Subject to the provisions of this Work Letter pertaining to Landlord's payment of Landlord's
Contribution and Landlord's Meter Contribution, Tenant shall promptly pay any and all costs and expenses in connection with or arising out of the performance of the Tenant's Work within seven
(7) business days of Tenant's receipt of its draw pursuant to its Draw Request, as hereinafter provided in Section 8 below and shall furnish to Landlord evidence of such payment upon
request. Landlord shall post and serve notices of non-liability in accordance with C.R.S. § 38-22-105(2). In the event any lien is filed against the
Buildings, Building Complex or any portion thereof or against Tenant's leasehold interest therein, the provisions of the Lease regarding Tenant's removal of mechanic's liens shall apply. 

        6.1  Tenant
shall indemnify, defend (with counsel reasonably satisfactory to Landlord and tenant) and hold Landlord harmless from and against any and all suits, claims,
actions, loss, cost or expense (including claims for workers' compensation, attorneys' fees and costs) based on personal injury or property damage caused in, or contract claims (including, but not
limited to claims for breach of warranty) arising from the construction of the Tenant's Work. Tenant shall repair or replace (or, at Landlord's election, reimburse Landlord for the cost of repairing
or replacing) any portion of the Buildings or item of Landlord's equipment or any of Landlord's real or personal property damaged, lost or destroyed in the construction of the Tenant's Work. 

        6.2  The
General Contractor employed by Tenant and any subcontractors thereof shall be (i) duly licensed in the state in which the Premises are located, and
(ii) except as otherwise approved herein or pursuant to Section 6 above, subject to Landlord's prior written approval, which approval shall not be unreasonably withheld or delayed. On or
before fifteen (15) days, prior to the commencement of any construction activity in the Premises, tenant and Tenant's contractors shall obtain and provide Landlord with certificates evidencing
Workers' Compensation, public liability and property damage insurance in amounts and forms compiling with the insurance requirements of the Lease and with companies satisfactory to Landlord. If
Landlord should disapprove such insurance, Landlord shall specify to Tenant the reasons for its disapproval within five (5) business days after delivery of such certificates. Tenant's agreement
with its contractors shall require such contractors to provide daily clean up of the construction areas to the extent such clean up is necessitated by the construction of the Tenant Work, and to take
reasonable steps to minimize interference with other tenant's use and occupancy of the Buildings. Nothing contained herein shall make or constitute Tenant as the agent of Landlord. Tenant and Tenant's
contractors shall comply with any other Building rules, regulations or reasonable requirements that Landlord may impose. 

C-2

 

        6.3  Landlord
will permit entry of such contractors into the Premises for the purpose of performing such work or after the date Landlord has approved the Drawings. Landlord
agrees to supply temporary power, material staging area, dock space, space for Tenant's dumpsters, and access in and out of the Building during the entire construction period at no cost to Tenant and
subject to reasonable rules established by Landlord. After hours construction activities by tenant shall require reimbursement to Landlord for its costs for after hours supervision. Further, all
construction activities shall be conducted so as to use reasonable efforts to minimize interference with the use and occupancy of the Building by
the tenants thereof. Such entry shall be deemed to be under all the terms, covenants, provisions and conditions of the Lease. 

        6.4  All
materials, work, installations, equipment and decorations of any nature whatsoever brought on or installed in the Premises pursuant to the provisions of this Work
Letter before the commencement of the Term or throughout the Term shall be at Tenant's risk, and neither Landlord or any party acting on Landlord's behalf shall be responsible for any damage thereto
or loss or destruction thereof due to any reason or cause whatsoever, excluding by reason of Landlord or such other party's gross negligence or willful or criminal misconduct. 

        6.5  Landlord
shall not be entitled to receive a construction management fee or its review consultants fee. 

7.
LANDLORD'S CONTRIBUTIONS. Landlord shall contribute to the costs and expenses of all consultant costs for the planning and design of Tenant's Work,
including all permits, licenses and construction fees and constructing the Tenant Work in an amount not to exceed Landlord's Contribution ("Tenant's Costs"). If the final tenant's Costs are less than
the Landlord's Contribution, Tenant will receive the unused portion thereof (up to a maximum of $27,236.00) as a direct payment from Landlord, which tenant may use to pay for furniture, moving
expenses, telephone equipment, rent credits or other items, at Tenant's discretion ("Other Expenses"). Further, upon Tenant's installation of a separate meter in the Premises, Landlord shall
contribute the Landlord's Meter Contribution towards the actual costs thereof. Hereinafter the term "Landlord's Contribution" shall mean the Landlord's Meter and the Landlord's Contribution. Provided
this Lease is in full force and effect and Tenant is not in default hereunder beyond any applicable notice and grace period, Landlord shall pay Landlord's Contribution to Tenant as follows: 

        (1)  No
more frequently than once every thirty (30) days following the Commencement Date, Tenant may request in writing a draw, payable to joint check to tenant and/or
Tenant's Contractor and/or any applicable subcontractor ("Joint Check") against the Landlord's Contribution which request shall include (a) receipted invoices (or such other proof of payment as
Landlord shall reasonably require) showing payment thereof, (b) a written statement from Tenant's Architect or General Contractor that the Tenant's Work described on any such invoices has been
completed in accordance with the Drawings, and (c) all required AIA forms, supporting final lien waivers and releases executed by the General Contractor and all subcontractors employed in
connection with such portion of the Tenant's Work (collectively the "Draw Request"). Within ten (10) business days following Landlord's receipt and approval of the Draw Request, Landlord shall
pay the amount of such draw, less ten percent (10%) of the draw amount thereof; and 

        (2)  After
the Tenant's Work is Substantially Complete (as defined in Section 10 hereof), tenant may submit to Landlord a request in writing for the balance of
Landlord's Contribution which request shall include: (a) record "as-built" drawings showing all of Tenant's Work as actually constructed, (b) a detailed breakdown of Tenant's
final and total construction costs, together with receipted invoices showing payment thereof in accordance with previous Draw Requests, (c) a certified, written statement from Tenant's
Architect that all of the Tenant's Work has been completed in accordance with the Drawings,
(d) all required AIA forms, supporting final lien waivers, and releases executed by the Architect, General Contractor and all subcontractors and 

C-3

 

suppliers in connection with Tenant's Work, and (e) a copy of a certificate of occupancy or amended certificate of occupancy required with respect to the Premises, together with all licenses,
certificates, permits and other government authorizations necessary in connection with Tenant's Work and the operation of Tenant's business from the Premises ("Final Draw Request"). Upon Landlord's
receipt and approval of the Final Draw Request, Landlord shall pay the balance of Landlord's Contribution less the Review Costs by Joint Check, if requested by tenant. Payment by Landlord shall be
made within five (5) business days, unless Landlord notifies Tenant, in writing, of its rejection (and the reasons therefore) of any or all of the Final Draw Request and, if so, upon reasonable
satisfaction of such objections, Landlord shall pay any remaining sums within five (5) business days. Further, to the extent Landlord does not so reject any portion of said Final Draw Request,
Landlord shall timely pay such acceptable portion of the Final Draw Request. 

8.  TIME LIMITS. The following maximum time limits and period shall be allowed for the indicated matters: 

	Action
 
	 	Time Limit
 

	 	• Tenant notifies Landlord of its selection of an Architect.	 	On or before 5 days after the date of this Lease.
	 	• Tenant submits Drawings to Landlord for review and approval.	 	On or before 30 days after the date of this Lease.
	 	• Landlord notifies Tenant and Tenant's Architect of its approval of its approval of the Drawings with any required changes in detail.	 	On or before 7 days after the date of Landlord's of the Drawings.
	 	• Tenant notifies Landlord of its selection of its General Contractor and Major Subcontractors.	 	On or before 30 days after the date of this Lease.
	 	• Landlord approves/disapproves Tenant's General Contractor and/or Major Subcontractors	 	On or before 7 days after the date of Landlord's receipt of Tenant's new notification.
	 	• If applicable, Landlord and Tenant mutually approve the General Contractor and all Major Subcontractors.	 	On or before 3 days after the date of Landlord's receipt of Tenant's new notification.
	 	• If applicable, Landlord and Tenant mutually approve the final revised Drawings.	 	On or before 3 days after the date of Landlord's receipt of revised Drawings.
	 	• Tenant submits Drawings for building permit.	 	On or after the date Tenant and Landlord mutually approve the final, revised Drawings.
	 	• Tenant commences construction of the Tenant's Work.	 	After providing copies of the building permit to Landlord.

        8.1  Except
as may be otherwise specifically provided for herein, in all instances where either Tenant's or Landlord's approval is required, if no written notice of
disapproval is given within the applicable Time Limit, at the end of such period the applicable party shall be deemed to have given its approval and the next succeeding time period shall commence. Any
delay in any of the foregoing dates (including any "re-do", continuation or abatement of any item due to Tenant's or Landlord's disapproval thereof) shall automatically delay all
subsequent deadlines by a like amount of time. 

9.
SUBSTANTIAL COMPLETION. Tenant's Work shall be deemed "Substantially Complete" when the General Contractor has finished all work called for by the
Drawings and contract documents and the Premises is ready to be used and occupied by Tenant, even though minor items may remain to be installed, finished or corrected. The date the Tenant's Work is
Substantially Complete shall be deemed the "Substantial Completion Date." Tenant shall cause the General Contractor to diligently complete any items of work no completed when the Premises are
Substantially Complete. In the event of any 

C-4

 

dispute as to Substantial Completion of the Tenant's Work, the Statement of the Tenant's Architect shall be conclusive. Substantial Completion shall have occurred notwithstanding punch list items. 

10.  CHANGES. Tenant may request reasonable changes in the Drawings; provided, however, that (a) no change shall be made to the Drawings without
Landlord's Representative's prior written approval, which approval shall not be unreasonably withheld or delayed; (b) no such request shall effect any structural change in the Buildings or
otherwise render the Premises or Buildings in violation of applicable laws; (c) Tenant shall pay any additional costs required to implement such change, including, without limitation, loss of
rents, architecture and other consultant fees, increases in construction costs and other charges payable caused (to the extent they are not covered by the Landlord's Contribution); and (d) such
requests shall constitute an agreement by tenant to any delay in completion caused by Landlord's reviewing, processing and implementing such change. If Tenant requests or causes any change, addition
or deletion to the Premises to be necessary after approval of the Drawing, a request for the change shall be submitted to Landlord's Representative, accompanied by revised plans prepared by the
Tenant's Architect, all at the Tenant's sole expense (to the extent not covered by Landlord's Contribution). Tenant acknowledges that neither the Tenant's Architect nor any contractor engaged by
Tenant is Landlord's agent and neither entity has authority to enter into agreements on Landlord's behalf or otherwise bind Landlord. 

11.
TENANT'S REPRESENTATIVE. Tenant has designated the Tenant's Representative as its sole representative with respect to the matters set forth in this
Work Letter, who shall have full authority and responsibility to act on behalf of the Tenant as required in this Work Letter. Tenant shall not change the Tenant's Representative without notice to
Landlord. 

12.  LANDLORD'S REPRESENTATIVE. Landlord has designated Landlord's Representative as its sole representative with respect to the matters set forth in
this Work Letter, who shall have full authority and responsibility to act on behalf of Landlord as required in this Work Letter. Landlord shall not change Landlord's Representative without notice to
Tenant. 

13.
NO REPRESENTATIONS OR WARRANTIES. Notwithstanding anything to the contrary contained in the Lease or herein, Landlord's participation in the
preparation of the Drawings, the cost estimates for the Tenant's Work and the construction of the Tenant's Work shall not constitute any representation or warranty, express or implied, that
(i) the Drawings are in conformity with applicable governmental codes, regulations or rules or (ii) that the Tenant's Work, if built in accordance with the Drawings, will be suitable for
Tenant's intended purpose. Tenant acknowledges and agrees that the Tenant's Work are intended for use by Tenant and the specification and design requirements for such improvements are not within the
special knowledge or experience of Landlord. Landlord's obligations shall be to review the Drawings; and any additional cost or expense required for the modification thereof to more adequately meet
Tenant's use, whether during or after construction thereof, shall be borne entirely by Tenant. 

C-5

 

14.  INCORPORATION. This Work Letter and all schedules attached hereto are incorporated in the Lease; and all of the terms and provisions of the Lease
are incorporated herein by this reference. 

	 	 	"Landlord"
	

 	
 	

NEW ALLIANCE PROPERTIES, INC.,

a Delaware corporation
	

 	
 	

By:	
 	

/s/  SIGNATURE ILLEGIBLE      
As its: Chief Financial Officer

	

 	
 	

Tenant
	

 	
 	

ESOFT, INC.,

a Delaware corporation
	

 	
 	

By:	
 	

/s/  JEFFREY J. FINN      
As its: CEO

C-6

  

 
 

EXHIBIT D
  RULES AND REGULATIONS    
  

        It is further agreed that the following rules and regulations shall be and are hereby made a part of this Lease and Tenant agrees that Tenant's employees and
agents or any others permitted by Tenant to occupy or enter the Premises will at all times abide by these rules and regulations as they may be amended or supplemented from time to time. Capitalized
terms have the same meaning as used in the Lease, unless otherwise indicated. 

	(1)
	The
sidewalks, entries, passages, corridors, and stairways of the Building Complex shall not be obstructed or locked or used for smoking, storage or loitering by Tenant or Tenant's
agents or employees or used for any purpose other than ingress and egress to and from the Premises.

	(2)
	Furniture,
equipment, or supplies will be moved in or out of the Building only through access ways designated by Landlord and then only during such hours and in such manner as may be
prescribed by Landlord. The Landlord shall have the right to approve or disapprove the movers or moving company employed by Tenant and Tenant shall cause the movers to use only the loading facilities
and access ways designated by Landlord. In the event Tenant's movers damage any part of the Building, Tenant shall forthwith pay to Landlord the amount required to repair that damage.

	(3)
	No
safe or article, the weight of which may, in the opinion of Landlord, constitute a hazard or damage to the Building or the Building's equipment, shall be moved into the Premises.
Safes and other equipment, the weight of which is not excessive, shall be moved into, from, or about the Building only during such hours and in such manner as shall be prescribed by Landlord and
landlord shall have the right to designate the location of such articles in the Premises.

	(4)
	No
sign, advertisement or notice shall be inscribed, painted, or affixed on any part of the inside or outside of the Building (including windows) unless of such color, size, and style
and in such place upon or in the Building as shall be first designated by Landlord in writing but there shall be no obligation or duty on Landlord to allow any sign, advertisement or notice to be
inscribed, painted, or affixed on any part of the inside or outside of the building other than the Building standard approved Tenant signs. No furniture shall be placed in front of the Building or in
any lobby or corridor of the building (whether included wholly within the Premises, or otherwise), without the prior written consent of
Landlord. Landlord shall have the right to remove all non permitted signs and furniture, without notice to Tenant, at the expense of Tenant.

	(5)
	Tenant
shall not do or permit anything to be done in the Premises or bring or keep anything therein which would in any way increase the rate of fire insurance on the Building,
constitute a nuisance or waste, obstruct or interfere with the rights of other tenants or in any way injure or annoy them, or conflict, with the laws relating to fire or with any regulations of the
fire department, fire insurance underwriters, or with any insurance policy upon the Building or any part thereof, or conflict with any of the rules or ordinances of the Department of Health of the
City and County where the Building is located.

	(6)
	The
janitor of the building may at all times keep a passkey and other agents of Landlord shall at all times be allowed admittance to the Premises.

	(7)
	Water
closets and other water fixtures shall not be used for any purpose other than that for which they were intended and any damage resulting to them from misuse on the part of
Tenant or Tenant's agents or employees shall be paid for by Tenant. No person shall waste water by tying back or wedging the faucets or in any other manner.

	(8)
	Except
for handicapped assistance dogs, no animals shall be allowed in the offices, hails, and corridors in the Building. No person shall disturb the. occupants of the Building or
adjoining 

D-1

 

buildings
or premises by the use of any radio, sound equipment, or musical instrument or by the making of loud or improper noises. 

	(9)
	Bicycles
shall be permitted in the Building so long as they are stored in designated areas such as a storage room.

	(10)
	Tenant
shall not allow anything to be placed on the outside of the building, nor shall anything be thrown by Tenant or Tenant's agents or employees out of the windows or doors or
down the corridors, or ventilating ducts of the Building. Tenant, except in case of fire or other emergency, shall not open any outside window. Tenant must at its own expense dispose of crates, boxes,
or similar large items of refuse which will not fit into office waste paper baskets. In no event shall Tenant set any such items in the corridors or other areas of the Building.

	(11)
	No
additional lock or locks shall be placed by Tenant on any door in the Building, unless written consent of Landlord shall first have been obtained. Two keys to the Premises and the
toilet rooms, if locked by Landlord, will be furnished by Landlord and neither Tenant nor Tenant's agents or employees
shall have any duplicate keys made. Landlord shall supply Tenant with such additional keys as Tenant may require at Tenant's sole cost and expense. At the termination of this tenancy, Tenant shall
promptly return to Landlord all keys to offices, toilet rooms, or vaults.

	(12)
	No
window shades, blinds, screens, draperies, or other window coverings will be attached or detached by Tenant without Landlord's prior written consent. Tenant agrees to abide by
Landlord's rules with respect to maintaining uniform curtains, draperies and linings, or blinds at all windows and hallways.

	(13)
	If
any Tenant desires telegraphic, telephonic, or other electric connections, Landlord or Landlord's agents will direct the electricians as to where and how the wires may be
introduced. Without such directions, no boring or cutting for wires will be permitted. Any such installation and connection shall be made at Tenant's expense.

	(14)
	Tenant
shall not install or operate any steam or gas engine or boiler or carry on any mechanical business in the Premises. The use of oil, gas, or inflammable liquids for heating,
lighting, or any other purpose is expressly prohibited. Explosives or other articles deemed extra hazardous shall not be brought into the Building.

	(15)
	Any
painting or decorating, as may be agreed to be done by and at the expense of Landlord, shall be done during regular weekday working hours. Should Tenant desire such work on
Saturdays, Sundays, Legal Holidays, or outside of regular working hours, Tenant shall pay for the extra cost thereof.

	(16)
	Except
as permitted by Landlord, Tenant shall not mark upon, paint signs upon, cut drill into, drive nails or screws into, or in any way deface the walls, ceilings, partitions, or
floors of the Premises or of the Building and any defacement, damage, or injury caused by Tenant or Tenant's agents or employees shall be paid for by Tenant.

	(17)
	Smoking
is prohibited in the Building, including all tenants' premises, inside lobbies, bathrooms, and other Common Areas and public areas of the Building Complex and is restricted
in all outside plaza areas of the Building Complex to specific locations designated by Landlord as smoking areas, if any.

	(18)
	Tenant
shall be entitled to two sets of keys to the Premises. In the event Tenant needs any additional keys, such keys must be requested from Landlord. Tenant shall pay to Landlord
the actual cost of making such additional keys. Landlord reserves the right to refuse admittance to the Building at any time other than during Ordinary Business Hours, to any person not producing a
key to the Premises and/or a pass issued by Landlord. In case of fire, invasion, riot, public excitement or other commotion, Landlord also reserves the right to prevent access to the Building 

D-2

 

while
it continues. Landlord shall in no case be liable for damages for the admission or exclusion of any person to or from the Building. 

	(19)
	No
canvassing, soliciting, distribution of hand bills or other written material, or peddling shall be permitted in the Building on the Building Complex, and Tenant shall cooperate
with Landlord in prevention and elimination of same. 

D-3

 
 

FIRST AMENDMENT TO OFFICE LEASE    
  

        THIS FIRST AMENDMENT TO OFFICE LEASE, dated as of December 22, 1999 (the "Amendment"), is entered into by and between NEW ALLIANCE PROPERTIES, INC.,
a Delaware corporation ("Landlord") and ESOFT, INC., a Delaware corporation ("Tenant"). 

 
 

Recitals:    
  

        A.    Landlord's
predecessor in interest and Tenant entered into a written lease agreement, dated February 17, 1999 (the "Lease"). Initially capitalized terms not
otherwise defined herein have the same meaning as in the Lease. 

        B.    Landlord
and Tenant desire to amend the Lease in the manner and form hereinafter set forth. 

        NOW,
THEREFORE, for good and valuable consideration, Landlord and Tenant hereby agree as follows: 

        1.    The
rentable square footage of the Premises is increased to approximately 20,425 rentable square feet by the addition of approximately 6,807 rentable square feet located
in Suite 300 (the "Additional Space"), as outlined on the diagram, attached hereto as Exhibit A and made a part hereof by reference for the term
of the Lease on the following basis: 

        A.    Tenant's
right to occupy the Additional Space and its obligation to pay Base Rent and Tenant's Pro Rata Share of excess Operating Expenses for the Additional Space
commence the earlier of February 1, 2000 or tenant occupancy (the "Additional Space Commencement Date") and terminates with the term of the Lease. 

        B.    As
of the Additional Space Commencement Date, any reference to "Premises" in the Lease includes the Additional Space as a part of the Premises and Tenant's occupancy
thereof is subject to all terms of the Lease except as otherwise specifically herein provided. 

        2.    Commencing
on the Additional Space Commencement Date, Tenant will pay Base Rent for the Additional Space, which is in addition to the Base Rent payable by Tenant for the
existing Premises, in accordance with the Lease in the following amounts: 

	Period
	 	Monthly Base Rent
	 	Per Sq. Ft. Rate

	Additional Space Commencement Date-1/31/01	 	$	7,374.25	 	$	13.00
	2/1/01-1/31/02	 	$	7,657.88	 	$	13.50
	2/1/02-1/31/03	 	$	7,941.50	 	$	14.00
	2/1/03-1/31/04	 	$	8,225.13	 	$	14.50
	2/l/04-5/31/04	 	$	8,508.75	 	$	15.00

        3.    Commencing
on the Additional Space Commencement Date, Tenant will pay Tenant's Pro Rata Share of excess Operating Expenses attributable to the Additional Space in
accordance with the Lease, thereby increasing Tenant's Pro Rata Share for the Premises (the Premises including the Additional Space) for periods commencing on or after the Additional Space
Commencement Date to 31.92%. 

        4.    Landlord
agrees to perform certain tenant improvement work in the Additional Space (the "Tenant Work"). The Tenant Work will be completed and paid for in accordance with
and subject to the terms and provisions of the Work Letter, attached hereto as Exhibit B. Other than the Finish Work described on  Exhibit B, Landlord has no obligation for improving the Additional Space and Tenant accepts the Additional Space in its "as is" condition for the
term of the Lease. 

        5.    Commencing
on the Additional Space Commencement Date, Tenant has the right to use 27 additional surface parking spaces in accordance with and subject to the Lease for
such spaces. 

 

        6.    Tenant
hereby represents and warrants to Landlord that it has not engaged any broker in connection with the negotiation and/or execution of this Amendment except The
Staubach Company ("Tenant's Broker"). Tenant has no knowledge of any other broker's involvement in this transaction except Cushman and Wakefield ("Cushman") which has acted as Landlord's leasing
agent. Tenant will indemnify Landlord and Cushman against any claim or expense (including, without limitation, attorneys' fees) paid or incurred by Landlord or Cushman as a result of any claim for
commissions or fees by any broker, finder, or agent, other than Tenant's Broker, whether or not meritorious, employed by Tenant or claiming by, through or under Tenant. Tenant acknowledges that
Landlord is not liable for any representations by Cushman or Tenant's Broker regarding the Premises, Building, Building Complex or this Amendment. 

        7.    If
there is any conflict between the terms of this Amendment and the terms of the Lease, the terms of this Amendment govern. The Lease as hereby amended is in full force
and effect, is hereby ratified and affirmed by the parties, and is binding upon the parties in accordance with its terms. 

        8.    Time
is of the essence herein. 

        IN
WITNESS WHEREOF, the parties have executed this Amendment as of the day and year first above written and is effective upon delivery of a fully executed copy to Tenant. 

	ESOFT, Inc., a Delaware corporation	 	NEW ALLIANCE PROPERTIES, INC.,

A Delaware corporation
	

By: /s/  JASON ROLLINS      
Print Name: Jason Rollins
Print Title: VP Operations
	
 	

By: /s/  SIGNATURE ILLEGIBLE      
As its: Chief Financial Officer

	

ATTEST:	
 	

"Landlord"
	

By:
Print Name:
Print Title:
	
 	

 
	

"Tenant"

	
 	

 

2

EXHIBIT A

ADDITIONAL SPACE  

EXHIBIT B

WORK LETTER  

        This is the Work Letter referred to in and specifically made a part of the Amendment to which this Work Letter is annexed, covering the Additional Space, as more
particularly described in this Amendment. 

        Landlord
and Tenant agree as follows: 

        1.    DEFINED TERMS. The following capitalized terms shall have the meaning set forth below and, unless provided to the contrary
herein, the remaining capitalized terms set forth herein shall have the meaning set forth in the Lease: 

	Landlord's Representative:	 	John Chambers
	

Tenant's Representative:	
 	

Jay Rollings
	

Tenant's Architect:	
 	

W. E. Kieding
	

Landlord's Contribution:	
 	

$34,035.00

The consideration may be used entirely at tenant's discretion, including, but not limited to, improvements to premises, re-cabling, rent abatement, or cash.

        2.    TENANT IMPROVEMENTS. The "Tenant Improvements" shall mean the interior walls, partitions, doors, door hardware, wall
coverings, wall base, counters, lighting fixtures, retrofit of existing Additional Space lighting, electrical and telephone wiring, removal of all telecommunications cabling throughout the Additional
Space, cabling for computers, telecommunications and fiber optics, metering and outlets, ceilings, floor and window coverings, fire sprinklers system, Tenant signage, security system, and other items
of general applicability that Tenant desires to be installed in the interior of the Additional Space or on the exterior of the Additional Space or Buildings. Landlord has installed and paid for a
separate meter to measure the amount of Tenant's electrical consumption within the Additional Space such that the Additional Space shall be separately metered and Tenant shall pay directly to the
applicable utility company all utility costs for the Additional Space and the HVAC serving the Additional Space. 

        3.    DRAWINGS. Subject to the provisions of this Work Letter pertaining to Landlord's payment of the Landlord's Contribution,
Tenant shall engage and pay for the services of an Architect, which Architect shall be subject to Landlord's reasonable approval, to prepare a space layout, working drawings and specifications for all
Tenant Improvements, including the location of any Tenant Improvements located outside of the Additional Space. Tenant shall devote such time in consultation with the Tenant's Architect as shall be
necessary to enable the Tenant's Architect to develop complete and detailed architectural, mechanical and engineering drawings and specifications for the construction of the Tenant Improvements,
showing thereon all Tenant Improvements, including all materials and specifications ("Drawings"). Tenant hereby acknowledges and agrees that it will endeavor, through the exercise of its Architect's
and other consultants best professional judgment and skills, to have the Drawings comply with all applicable laws, including the Americans with Disabilities Act (as currently interpreted), and other
ordinances, orders, rules, regulations and requirements of all governmental authorities having jurisdiction thereof. 

        4.    LANDLORD'S APPROVAL. On or before the applicable Time Limit set forth below, Tenant shall submit to Landlord complete and
final Drawings for the Tenant Improvements in the form of two sets of Drawings and a computer disk thereof. The Drawings shall be subject to the approval of Landlord, which approval shall not be
unreasonably withheld. If Landlord should disapprove such Drawings, Landlord shall specify to Tenant the reasons for its disapproval and Tenant shall cause the same to be revised to meet the Landlord
and Tenant's mutual satisfaction and shall resubmit the same to Landlord, as so revised, on or before the applicable Time Limit set forth in Section 8 below. 

 

        5.    CONSTRUCTION OF TENANT IMPROVEMENTS. It is understood and agreed by the parties that, as hereinafter set forth, the Tenant
has elected to retain a General Contractor and arrange for the
construction and installation of the Tenant Improvements itself in a good and workmanlike manner ("Tenant's Work"). All Tenant's Work shall be of a quality and standard equivalent to the standards for
construction set for the Building. On or before the Time Limit applicable set forth below, Tenant shall submit to Landlord the names of the General Contractor and the electrical, ventilation, plumbing
and heating subcontractors (hereinafter "Major Subcontractors") for Landlord's approval, which approval shall not be unreasonably withheld. If Landlord shall reject the General Contractor, any Major
Subcontractor Landlord shall advise Tenant of the reason(s) in writing and, Tenant shall submit another selection to Landlord. Along with Tenant's notice, Tenant shall notify Landlord of its estimate
of the total costs for the Tenant's Work. 

        6.    TENANT'S CONSTRUCTION OF THE TENANT IMPROVEMENTS. Subject to the provisions of this Work Letter pertaining to Landlord's
payment of Landlord's Contribution and Landlord's Meter Contribution, Tenant shall promptly pay any and all costs and expenses in connection with or arising out of the performance of the Tenant's Work
within seven (7) business days of Tenant's receipt of its draw pursuant to its Draw Request, as hereinafter provided in Section 8 below and shall furnish to Landlord evidence of such
payment upon request. Landlord shall post and serve notices of non-liability in accordance with C.R.S. § 38-22-105(2). In the event any lien is filed
against the Buildings, Building Complex or any portion thereof or against Tenant's leasehold interest therein, the provisions of the Lease regarding Tenant's removal of mechanic's liens shall apply. 

        6.1  Tenant
shall indemnify, defend (with counsel reasonably satisfactory to Landlord and Tenant) and hold Landlord harmless from and against any and all suits, claims,
actions, loss, cost or expense (including claims for workers' compensation, attorneys' fees and costs) based on personal injury or property damage caused in, or contract claims (including, but not
limited to claims for breach of warranty) arising from the construction of the Tenant's Work. Tenant shall repair or replace (or, at Landlord's election, reimburse Landlord for the cost of repairing
or replacing) any portion of the Buildings or item of Landlord's equipment or any of Landlord's real or personal property damaged, lost or destroyed in the construction of the Tenant's Work. 

        6.2  The
General Contractor employed by Tenant and any subcontractors thereof shall be (i) duly licensed in the state in which the Additional Space are located, and
(ii) except as otherwise approved herein or pursuant to Section 6 above, subject to Landlord's prior written approval, which approval shall not be unreasonably withheld or delayed. On or
before fifteen (15) days, prior to the commencement of any construction activity in the Additional Space, Tenant and Tenant's contractors shall obtain and provide Landlord with certificates
evidencing Workers' Compensation, public liability and property damage insurance in amounts and forms complying with the insurance requirements of the Lease and with companies satisfactory to
Landlord. If Landlord should disapprove such insurance, Landlord shall specify to Tenant the reasons for its disapproval within five (5) business days after delivery of such certificates.
Tenant's agreement with its contractors shall require such contractors to provide daily clean up of the construction areas to the extent such clean up is necessitated by the construction of the Tenant
Work, and to take reasonable steps to minimize interference with other tenant's use and occupancy of the Building. Nothing contained herein shall make or constitute Tenant as the agent of Landlord.
Tenant and Tenant's contractors shall comply with any other Building rules, regulations or reasonable requirements that Landlord may impose. 

        6.3  Landlord
will permit entry of such contractors into the Additional Space for the purpose of performing such work or after the date Landlord has approved the Drawings.
Landlord agrees to supply temporary power, material staging area, dock space, space for Tenant's dumpsters, and access in and out of the Building during the entire construction period at no cost to
Tenant and subject to reasonable rules established by Landlord. After hours construction activities by Tenant shall require reimbursement to Landlord for its costs for after hours supervision.
Further, all construction activities 

2

 

shall be conducted so as to use reasonable efforts to minimize interference with the use and occupancy of the Building by the tenants thereof. Such entry shall be deemed to be under all the terms,
covenants, provisions and conditions of the Lease. 

        6.4  All
materials, work, installations, equipment and decorations of any nature whatsoever brought on or installed in the Additional Space pursuant to the provisions of this
Work Letter before the commencement of the Term or throughout the Term shall be at Tenant's risk, and neither Landlord nor any party acting on Landlord's behalf shall be responsible for any damage
thereto or loss or destruction thereof due to any reason or cause whatsoever, excluding by reason of Landlord or such other party's gross negligence or willful or criminal misconduct. 

        6.5  Landlord
shall be entitled to receive a review consultant's fee for review of architectural and engineer working drawings. Such amount shall equal the amount billed by
architect and engineer to Landlord, but in no event shall equal greater than 3% of the total construction costs. 

        7.    LANDLORD'S CONTRIBUTIONS. Landlord shall contribute to the costs and expenses of all consultant costs for the planning and
design of Tenant's Work, including all permits, licenses and construction fees and constructing the Tenant Work in an amount not to exceed Landlord's Contribution ("Tenant's Costs"). Provided this
Lease is in full force and effect and Tenant is not in default hereunder beyond any applicable notice and grace period, Landlord shall pay Landlord's Contribution to Tenant as follows: 

        (1)  No
more frequently than once every thirty (30) days following the Commencement Date, Tenant may request in writing a draw, payable to joint check to Tenant and/or
Tenant's Contractor and/or any applicable subcontractor ("Joint Check") against the Landlord's Contribution which request shall include (a) receipted invoices (or such other proof of payment as
Landlord shall reasonably require) showing payment thereof, (b) a written statement from Tenant's Architect or General Contractor that the Tenant's Work described on any such invoices has been
completed in accordance with the Drawings, and (c) all required AIA forms, supporting final lien waivers and releases executed by the General Contractor and all subcontractors employed in
connection with such portion of the Tenant's Work (collectively the "Draw Request"). Within ten (10) business days following Landlord's receipt and approval of the Draw Request, Landlord shall
pay the amount of such draw, less ten percent (10%) thereof; and 

        (2)  After
the Tenant's Work is Substantially Complete (as defined in Section 10 hereof), Tenant may submit to Landlord a request in writing for the balance of
Landlord's Contribution which request shall include: (a) record "as-built" drawings showing all of Tenant's Work as actually constructed, (b) a detailed breakdown of Tenant's
final and total construction costs, together with receipted invoices showing payment thereof in accordance with previous Draw Requests, (c) a certified, written statement from Tenant's
Architect that all of the Tenant's Work has been completed in accordance with the Drawings, (d) all required AIA forms, supporting final lien waivers, and releases executed by the Architect,
General Contractor and all subcontractors and suppliers in connection with Tenant's Work, and (e) a copy of a certificate of occupancy or amended certificate of occupancy required with respect
to the Additional Space, together with all licenses, certificates, permits and other government authorizations necessary in connection with Tenant's Work and the operation of Tenant's business from
the Additional Space ("Final Draw Request"). Upon Landlord's receipt and approval of the Final Draw Request, Landlord shall pay the balance of Landlord's Contribution less the Review Costs by Joint
Check, if requested by Tenant. Landlord shall pay said full remaining amount of the Landlord's contribution whether or not the final actual costs in the Tenant Work and the meter installation are less
than Landlord's contribution. Payment by Landlord shall be made within five (5) business days, unless Landlord notifies Tenant, in writing, of its rejection (and the reasons therefor) of any or
all of the Final Draw Request and, if so, upon reasonable satisfaction of such objections, Landlord shall pay any 

3

 

remaining sums within five (5) business days. Further, to the extent Landlord does not so reject any portion of said Final Draw Request, Landlord shall timely pay such acceptable portion of
the Final Draw Request. 

        8.    TIME LIMITS. The following maximum time limits and periods shall be allowed for the indicated matters: 

	

Action	
 	

Time Limit
	

•    Tenant notifies Landlord of its selection of an Architect.	
 	

On or before 5 days after the date of this Amendment.
	

•    Tenant submits Drawings to Landlord for review and approval.	
 	

On or before 20 days after the date of this Amendment.
	

•    Landlord notifies Tenant and Tenant's Architect of its approval of the Drawings with any required changes in detail.	
 	

On or before 7 days after the date of Landlord's receipt of the Drawings.
	

•    Tenant notifies Landlord of its selection of its General Contractor and Major Subcontractors.	
 	

On or before 30 days after the date of this Amendment.
	

•    Landlord approves/disapproves Tenant's General Contractor and/or Major Subcontractors	
 	

On or before 7 days after the date of Landlord's receipt of tenant's new notification.
	

•    If applicable, Landlord and Tenant mutually approve the General Contractor and all Major Subcontractors.	
 	

On or before 3 days after the date of Landlord's receipt of Tenant's new notification.
	

•    If applicable, Landlord and Tenant mutually approve the final revised drawings	
 	

On or before 3 days after the date of Landlord's receipt of revised Drawings.
	

•    Tenant submits Drawings for building permit.	
 	

On or after the date Tenant and Landlord mutually approve the final, revised Drawings.
	

•    Tenant commences construction of the Tenant's Work.	
 	

After providing copies of the building permit to Landlord.

        8.1  Except
as may be otherwise specifically provided for herein, in all instances where either Tenant's or Landlord's approval is required, if no written notice of
disapproval is given within the applicable Time Limit, at the end of such period the applicable party shall be deemed to have given its approval and the next succeeding time period shall commence. Any
delay in any of the foregoing dates (including any "re-do," continuation or abatement of any item due to Tenant's or Landlord's disapproval thereof) shall automatically delay all
subsequent deadlines by a like amount of time. 

        9.    SUBSTANTIAL COMPLETION. Tenant's Work shall be deemed "Substantially Complete" when the General Contractor has finished
all work called for by the Drawings and contract documents and the Additional Space is ready to be used and occupied by Tenant, even though minor items may remain to be installed, finished or
corrected. The date the Tenant's Work is Substantially Complete shall be deemed the "Substantial Completion Date." Tenant shall cause the General Contractor to diligently complete any items of work
not completed when the Additional Space are Substantially Complete. In the event of any dispute as to Substantial Completion of the Tenant's Work, the Statement of the Tenant's Architect shall be
conclusive. Substantial Completion shall have occurred notwithstanding punch list items. 

        10.  CHANGES. Tenant may request reasonable changes in the Drawings; provided, however, that (a) no change shall be
made to the Drawings without Landlord's Representative's prior written 

4

 

approval, which approval shall not be unreasonably withheld or delayed; (b) no such request shall effect any structural change in the Buildings or otherwise render the Additional Space or
Buildings in violation of applicable laws; (c) Tenant shall pay any additional costs required to implement such change, including, without limitation, loss of rents, architecture and other
consultant fees, increases in construction costs and other charges payable caused (to the extent they are not covered by the Landlord's Contribution); and (d) such requests shall constitute an
agreement by Tenant to any delay in completion caused by Landlord's reviewing, processing and implementing such change. If Tenant requests or causes any change, addition or deletion to the Additional
Space to be necessary after approval of the Drawing, a request for the change shall be submitted to Landlord's Representative, accompanied by revised plans prepared by the Tenant's Architect, all at
Tenant's sole expense (to the extent not covered by Landlord's Contribution). Tenant acknowledges that neither the Tenant's Architect nor any contractor engaged by Tenant is Landlord's agent and
neither entity has authority to enter into agreements on Landlord's behalf or otherwise bind Landlord. 

        11.  TENANT'S REPRESENTATIVE. Tenant has designated the Tenant's Representative as its sole representative with respect to the
matters set forth in this Work Letter, who shall have full authority and responsibility to act on behalf of the Tenant as required in this Work Letter. Tenant shall not change the Tenant's
Representative without notice to Landlord. 

        12.  LANDLORD'S REPRESENTATIVE. Landlord has designated Landlord's Representative as its sole representative with respect to
the matters set forth in this Work Letter, who shall have full authority and responsibility to act on behalf of Landlord as required in this Work Letter. Landlord shall not change Landlord's
Representative without notice to Tenant. 

        13.  NO REPRESENTATIONS OR WARRANTIES. Notwithstanding anything to the contrary contained in the Lease or herein, Landlord's
participation in the preparation of the Drawings, the cost estimates for the Tenant's Work and the construction of the Tenant's Work shall not constitute any representation or warranty, express or
implied, that (i) the Drawings are in conformity with applicable governmental codes, regulations or rules or (ii) that the Tenant's Work, if built in accordance with the Drawings, will
be suitable for Tenant's intended purpose. Tenant acknowledges and agrees that the Tenant's Work are intended for use by Tenant and the specification and design requirements for such improvements are
not within the special knowledge or experience of Landlord. Landlord's obligations shall be to review the Drawings; and any additional cost or expense required for the modification thereof to more
adequately meet Tenant's use, whether during or after construction thereof, shall be borne entirely by Tenant. 

5

 

        14.  INCORPORATION. This Work Letter and all schedules attached hereto are incorporated in this Amendment; and all of the
terms and provisions of the Lease are incorporated herein by this reference. 

	 	 	"Landlord"
	

 	
 	

NEW ALLIANCE PROPERTIES, INC., a Delaware corporation
	

 	
 	

By: /s/  SIGNATURE ILLEGIBLE      
As its: Chief Financial Officer

	

 	
 	
Tenant
	

 	
 	

ESOFT, INC., a Delaware corporation
	

 	
 	

By: /s/  JASON ROLLINS      
As its: V.P. Operations

6

	 	 	Re	 	295 Interlocken Boulevard

Broomfield, Colorado

 
 

SECOND AMENDMENT TO LEASE    
  

	THE STATE OF COLORADO	 	§	 	 
	 	 	§	 	KNOW ALL MEN BY THESE PRESENTS:
	COUNTY OF BOULDER	 	§	 	 

        THIS
SECOND AMENDMENT TO LEASE (this "Amendment") has been executed effective (but not necessarily on) as of the 31st day of December,
2000, by OLYMPIA PROPERTIES, L.L.C., a Washington limited liability company ("Landlord") and E-SOFT, INC., a Delaware corporation
("Tenant"). 

 
 

R E C I T A L S    
  

        A.    New
Alliance Properties, Inc. ("Prior Landlord") and Tenant have heretofore executed that certain Office Lease (the
"Original Lease"), dated as of February 17, 1999, as amended by First Amendment to Office Lease, dated as of December 22, 1999, pursuant
to which Tenant leased approximately 20,425 rentable square feet of area comprised of approximately 6,807 rentable square feet in Suite 300 (the "Suite 300
Area") and approximately 13,618 rentable square feet in Suite 400 (the "Suite 400 Area") (collectively, the "Original
Premises"), in the building located at 295 Interlocken Boulevard, Broomfield, Colorado (the "Building"); the Original Lease, as so amended, being
referred to as the "Lease." Unless otherwise provided herein, capitalized words and phrases shall have the same meanings as those set forth in the
Lease. 

        B.    Landlord
has acquired the Building and succeeded to all of Prior Landlord's interest under the Lease. 

        C.    Landlord
and Tenant desire to execute this Amendment in order to evidence their agreement to (i) reconfigure the Original Premises; and (ii) make, certain
other amendments to the Lease, all as more particularly set forth in this Amendment. 

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

 
 

ARTICLE 1
  
    CERTAIN AMENDMENTS    
  

        SECTION
1.01    Reconfiguration of Premises.    Subject to the contingencies, terms and conditions set forth in this
Amendment, the Lease shall be amended to reflect that the Original Premises are hereby (a) reduced, effective February 28, 2001, by the total square footage contained in the Suite 300
Area in the Building and (b) expanded, effective January 1, 2001, by approximately 10,318 rentable square feet (the "Expansion Premises")
located in Suite 400 of the Building, all as outlined and identified on the cross-hatched floor plan attached hereto as Exhibit A (the Original
Premises, as so reconfigured, being referred to as the "Premises"). As of: (1) January 1, 2001, the Premises will be amended to contain
approximately 30,743 rentable square feet in the Building and (2) February, 28, 2001, the Premises will be amended to contain approximately 23,936 rentable square feet of space in the Building,
consisting of the 13,618 rentable square feet of space in the Suite 400 Area and the 10,318 rentable square feet of space in the Expansion Premises. Tenant shall simultaneously herewith remit to
Landlord an additional Security Deposit in the amount of $14,000.00. Notwithstanding anything in the Lease to the contrary, upon expiration or earlier termination of the Lease, Tenant shall be liable
for removing all furniture and equipment and other personal property that remain in the Expansion Premises from any prior tenant, Landlord making no representations or warranties as to any contents or
the condition thereof. Tenant represents to Landlord that Tenant is entering into a separate 

 

agreement with the prior tenant regarding such property and Landlord shall have no liability or obligation with respect thereto. 

        SECTION
1.02    Termination.    Subject to the contingencies, terms and conditions set forth in this Amendment,
Landlord and Tenant acknowledge that the Lease will terminate on February 28, 2001, as to the Suite 300 Area only, provided Tenant pays to Landlord all rental amounts due and owing under the
Lease with respect thereto through and including February 28, 2001, in accordance with the Lease, with all payments being due on or before February 28, 2001. Notwithstanding the
foregoing, Tenant will remain liable for all obligations and amounts due and owing to Landlord under the Lease accruing prior to February 28, 2001, even if such obligations and amounts are not
determinable until after February 28, 2001. 

        SECTION
1.03    Surrender of Suite 300 Area.    As of February 28, 2001, Tenant shall have vacated and
abandoned the Suite 300 Area and removed all office equipment and supplies, furniture and other personal property, each to the extent owned by Tenant and located within, and readily removable from the
Suite 300 Area. As of February 28, 2001, Tenant shall deliver the Suite 300 Area to Landlord in broom-clean condition and as required by Section 22 of the Original Lease. Tenant shall
have no further right to the Suite 300 Area or possession of the Suite 300 Area (i.e., Landlord may re-lease the Suite 300 Area to another occupant and commence improvements). Tenant
hereby releases and forever discharges Landlord and its respective officers, directors, agents and affiliates from any and all losses, costs, claims or liabilities owed to such party, whether under
the Lease relating to the Suite 300 Area, including any claims for relocation costs, lost profits and any and all consequential, punitive and other damages suffered or otherwise incurred by Tenant, if
any. 

        SECTION
1.04    Lease Term.    The Lease Term for the Premises, as reconfigured hereby, shall remain a3 set forth in
the Lease and shall expire May 31, 2004, subject to adjustment and earlier termination as provided in the Lease. Except as set forth on  Exhibit B attached hereto, Tenant shall have no further
renewal extension or expansion options or rights of first refusal offer or opportunity as
to any other promises in the Building, all of such rights being hereby deleted. 

        SECTION
1.05    Base Rent.    The Base Rent for the Suite 400 Area and Suite 300 Area during the Lease Term shall
remain as set forth in the Original Lease through and including January 31, 2001. Thereafter, Tenant shall pay Base Rent for the Suite 400 Area in accordance with the Original Lease. From
January 1, 2001, the Base Rent for the Expansion Premises throughout the Lease Term shall be as follows: 

	Period:
 
	 	Annual Base Rent per R.S.F.:*
	 	Monthly Base Rent:*

	Months 01-12	 	$	14.00	 	$	12,037.67
	Months 13-24	 	$	14.50	 	$	12,467.58
	Months 25-36	 	$	15.00	 	$	12,897.50
	Months 37-41	 	$	16.00	 	$	13,757.33

*
The Base Rent set forth above is a triple-net rate. The Base Rent shall be due and payable in equal monthly installments, each such monthly installment due and payable on the first day
of each calendar month, in advance, without demand and without setoff or deduction whatsoever. 

        SECTION
1.06    Operating Expenses.    Commencing on the Effective Date, Tenant will pay Tenant's Pro Rata Share of
Operating Expenses attributable to the entire Premises, as hereby reconfigured, on a triple net basis. As of January 1, 2001, Tenant's Pro Rata Share of Operating Expenses shall be amended to
be 48.04% (i.e., 30,743 rentable square feet in the Premises divided by 63,995 rentable square feet in the Building). As of February 28, 2001, Tenant's Pro Rata Share of Operating Expenses
shall be amended to be 37.40% (i.e., 23,936 rentable square feet in the Premises divided by 63,995 rentable square feet in the Building. 

2

 

        SECTION
1.07    Commissions.    Landlord and Tenant warrant to the other that it has not dealt with any broker or
agent in connection with the negotiation or execution of this Amendment except Colliers Bennett & Kahnweiler, Inc. (by separate agreement between Landlord and Colliers Bennett &
Kahnweiler, Inc., the "Colliers Agreement") (hereafter, "Brokers"), which Landlord shall be
liable for paying to Colliers Bennett & Kahnweiler, Inc, the amount set forth in the Colliers Agreement. Landlord and Tenant hereby indemnify each other from the payment of any commissions owed
to any broker (including Brokers, in excess of the amount set forth above) with respect to this Amendment resulting from the acts of such party, but not otherwise. 

        SECTION
1.08    AS IS.    Tenant accepts the Promises "as is" "where is" without representation or warranty, without
any obligation to alter, remodel, improve, repair or decorate any part of the Premises. 

        SECTION
1.09    Contingency.    Tenant acknowledges there is currently an existing tenant (the
"Existing Tenant") occupying the Expansion Premises under an existing lease (the "Existing Lease"). This
Amendment is contingent upon Landlord entering into a termination agreement of the Existing Lease with the Existing Tenant on terms and conditions acceptable to Landlord, in Landlord's sole
discretion. If this contingency is not satisfied on or before January 31, 2001, Landlord may terminate this Amendment upon prior written notice to Tenant and this Amendment shall be deemed null
and void and neither party will have any further obligation to the other under this Amendment. 

        SECTION
1.10.    Additions to Lease.    The following sections are hereby added to the Original Lease: 

    A    Landlord's Liability.    The liability of Landlord to Tenant for any default by Landlord under the terms of the
Lease shall be limited to Tenant's actual direct, but not consequential, damages therefor and shall be recoverable from the interest of Landlord in the Building and the land, and Landlord shall not be
personally liable for any deficiency. 

    B    WAIVER OF JURY TRIAL.    LANDLORD AND TENANT WAIVE ANY RIGHT TO TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO. 

    C    Force Majeure.    Other than for Tenant's monetary obligations under the Lease and obligations which can be cured
by the payment of money (e.g., maintaining insurance), whenever a period of time is herein prescribed for action to be taken by either party hereto, such party shall not be liable or responsible for,
and there shall be excluded from the computation for any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, governmental laws, regulations or
restrictions, or any other causes of any kind whatsoever which are beyond the control of such party. 

        SECTION
1.11.    Further amendments.    The Lease shall be and hereby is further amended wherever necessary, even
though not specifically referred to herein, in order to give effect to the terms of this Amendment. The last sentence of Section 9 of the Original Lease is hereby deleted in its entirety.
Sections 29 and 30 of the Original Lease are hereby deleted in their entirety. Notwithstanding anything in the Lease to the contrary: (a) Tenant, at its sole expense, shall comply with all laws
(including, without limitation, laws regarding access for handicapped or disabled persons), ordinances and regulations, and all declarations, covenants and restrictions applicable to Tenant's use or
occupation of
the Premises, and with all governmental orders and directives of public officers which impose any duty or restriction with respect to the use or occupation of the Premises and (b) Landlord
shall only be required to use commercially reasonable efforts to obtain a non-disturbance agreement on Tenant's behalf. 

3

 
 
 

ARTICLE 2
  
    MISCELLANEOUS    
  

        SECTION 2.01    Ratification.    The Lease, as amended hereby, is hereby ratified, confirmed
and deemed in full force and affect in accordance with its terms. Each party represents to the other that such party (a) is currently unaware of any default by the other party under the Lease;
and (b) has full power and authority to execute and deliver this Amendment and this Amendment represents a valid and binding obligation of such party enforceable in accordance with its terms. 

        SECTION
2.02    Notices.    All notices to be delivered to Landlord under the Lease or otherwise with respect to the
Promises shall, unless Landlord otherwise notifies Tenant, be delivered to Landlord in accordance with notice provisions of the Lease at the management office in the Building with a copy at the same
time to the following address: 

                c/o
TA Associates Realty

                28 State Street, 10th Floor

                Boston, Massachusetts 02109

                Attn.: Asset Manager 

        SECTION
2.03    Governing Law.    This Amendment shall be governed by and construed in accordance with the laws of the
State of Colorado. 

        SECTION
2.04    Counterparts.    This Amendment may be executed in multiple counterparts each of which is deemed an
original but together constitute one and the same instrument. This Amendment may be executed by facsimile and each party has the right to rely upon a facsimile counterpart of this Amendment signed by
the other party to the same extent as if such party had received an original counterpart. 

[SIGNATURES
FOLLOW NEXT PAGE] 

4

 

        IN
WITNESS WHEREOF, this Amendment has been executed as of (but not necessarily on) the date and Year first above written. 

	Dated: January 18th, 2001	 	LANDLORD:
	

 	
 	
Olympia Properties L.L.C.,

a Washington limited liability company
	

 	
 	

By:	
 	

Bartwood L.L.C.,

a Massachusetts limited liability company,

Managing Member
	

 	
 	

 	
 	

By:	
 	

Realty Associates Advisors LLC,

a Delaware limited liability company,

Managing Member
	

 	
 	

 	
 	

 	
 	

By:	
 	

Realty Associates Advisors Trust,

a Massachusetts business trust,

sole member
	

 	
 	

 	
 	

 	
 	

 	
 	

By:	
 	

/s/ Henry G. Brauer
 (Officer)

Henry G. Brauer

Regional Director

	

 	
 	

 	
 	

 
	

Date: December 31, 2000	

 	

TENANT:
	

 	
 	
E-SOFT, INC., a Delaware corporation
	

 	
 	

By:	
 	

/s/ Jason Rollins

	

 	
 	

Name:	
 	

Jason Rollins 12/29/00

	

 	
 	

Title:	
 	

VP of Operations

5

 
 
 

EXHIBIT B
  
    EXTENSION OPTION    
  

        Provided no Event of Default exists and Tenant is occupying the entire Premises at the time of such election, Tenant may renew this Least for one
(1) additional period of five (5) years on the same terms provided in this Lease (except as set forth below), by delivering written notice (the "Renewal
Notice") of the exercise thereof to Landlord not earlier than twelve (12) months nor later than nine (9) months prior to the expiration of the initial Lease Term.
On or before the commencement date of such extended Lease Term, Landlord and Tenant shall execute an amendment to this Lease extending the Lease Term on the same terms provided in this Lease. except
as follows: 

	(1)
	The
Base Rent payable for each month during such extended Lease Term shall be the prevailing rental rate for buildings comparable to the Building, at the commencement of such extended
Lease Term, for space of equivalent quality, size, utility and location, with the length of the extended Lease Term and the credit standing of Tenant to be taken into account;

	(2)
	Tenant
shall have no further renewal options unless hereafter expressly granted by Landlord in writing; and

	(3)
	Landlord
shall lease to Tenant the Premises in their then-current condition, and Landlord shall not provide to Tenant any allowances (e.g., moving allowance, construction
allowance, and the like) or other tenant inducements. 

        Landlord
shall deliver written notice (the "Landlord Notice") to Tenant, within sixty (60) days after Landlord's receipt of a
timely Renewal Notice, which sets forth the Base Rent determined by Landlord to be payable during the renewal period after consideration of the factors set forth under clause (1) above. Tenant
shall have the right, within thirty (30) days following the date of the Landlord Notice, to deliver written notice (the "Revocation Notice") to
Landlord that Tenant elects to revoke its exercise of the renewal option. If Tenant delivers a Revocation Notice, Tenant shall have no further rights under this Exhibit and this Lease shall terminate
upon the expiration of the initial term hereof. If Tenant timely delivers a Renewal Notice but fails to timely deliver a Revocation Notice, this Lease shall be extended on the terms set forth above
and at the Base Rent specified in the Landlord Notice. 

        Tenant's
rights under this Exhibit shall terminate if (i) this Lease or Tenant's right to possession of the Premises is terminated, (ii) Tenant, at any time during the
Lease Term, assigns any of its interest in this Lease or sublets any portion of the Premises, (iii) Tenant delivers a Revocation Notice, or (iv) Tenant fails to timely exercise its
option under this Exhibit, time being of the essence with respect to Tenant's exercise thereof. 

6

QuickLinks

TABLE OF CONTENTS OFFICE LEASE

OFFICE LEASE PART I BASIC LEASE TERM SHEET

PART II GENERAL PROVISIONS

"EXHIBIT B"

EXHIBIT C WORK LETTER

EXHIBIT D RULES AND REGULATIONS

FIRST AMENDMENT TO OFFICE LEASE

Recitals

SECOND AMENDMENT TO LEASE

R E C I T A L S

ARTICLE 1 CERTAIN AMENDMENTS

ARTICLE 2 MISCELLANEOUS

EXHIBIT B EXTENSION OPTION

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}]]