Document:

exv10w46

 

EXHIBIT 10.46

OFFICE BUILDING LEASE AGREEMENT

ISE LABS, INC.

AND

JER/BRE AUSTIN TECH L.P.

AT

The Domain

Austin, Texas

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	1.	 	 	Definitions and Basic Provisions
	 	 	1	 
	 	2.	 	 	Lease Grant
	 	 	1	 
	 	3.	 	 	Rent and Security Deposit
	 	 	1	 
	 	4.	 	 	Landlord’s Obligations
	 	 	2	 
	 	5.	 	 	Leasehold Improvements
	 	 	3	 
	 	6.	 	 	Use
	 	 	3	 
	 	7.	 	 	Tenant’s Repairs and Alterations
	 	 	3	 
	 	8.	 	 	Assignment and Subletting
	 	 	3	 
	 	9.	 	 	Indemnity
	 	 	4	 
	 	10.	 	 	Subordination
	 	 	4	 
	 	11.	 	 	Rules and Regulations
	 	 	4	 
	 	12.	 	 	Inspection
	 	 	4	 
	 	13.	 	 	Condemnation
	 	 	5	 
	 	14.	 	 	Fire or Other Casualty
	 	 	5	 
	 	15.	 	 	Holding Over
	 	 	5	 
	 	16.	 	 	Taxes on Tenant’s Property
	 	 	5	 
	 	17.	 	 	Events of Default
	 	 	5	 
	 	18.	 	 	Remedies
	 	 	5	 
	 	19.	 	 	Surrender of Premises
	 	 	6	 
	 	20.	 	 	Attorney’s Fees
	 	 	6	 
	 	21.	 	 	Landlord’s Lien
	 	 	6	 
	 	22.	 	 	Mechanic’s Liens
	 	 	6	 
	 	23.	 	 	No Subrogation-Liability Insurance
	 	 	7	 
	 	24.	 	 	Brokerage
	 	 	7	 
	 	25.	 	 	Change of Building Name
	 	 	7	 
	 	26.	 	 	Estoppel Certificates
	 	 	7	 
	 	27.	 	 	Notices
	 	 	7	 
	 	28.	 	 	Separability
	 	 	7	 
	 	29.	 	 	Amendments; Binding Effect
	 	 	7	 
	 	30.	 	 	Quiet Enjoyment
	 	 	8	 
	 	31.	 	 	Gender
	 	 	8	 
	 	32.	 	 	Joint and Several Liability
	 	 	8	 
	 	33.	 	 	Personal Liability
	 	 	8	 
	 	34.	 	 	Certain Rights Reserved by Landlord
	 	 	8	 
	 	35.	 	 	Notice to Lender
	 	 	8	 
	 	36.	 	 	Captions
	 	 	8	 
	 	37.	 	 	Miscellaneous
	 	 	8	 
	 	38.	 	 	Force Majeure
	 	 	9	 
	 	39.	 	 	Applicable Law
	 	 	9	 
	 	40.	 	 	Third Party Rights
	 	 	9	 
	 	41.	 	 	Exhibits and Attachments
	 	 	9	 

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Exhibit A – Outline of Premises

Exhibit B – Legal Description

Exhibit C – Rules and Regulations

Exhibit D – Condition of the Premises and Tenant Improvements

Exhibit D-1 – Base Building Specifications

Exhibit D-2 – Landlord’s Construction Specifications

Exhibit E – Parking

Exhibit F – Component Charges

Exhibit F-1 – Estimated Component Charges for 2001

Exhibit G – Special Provisions

Exhibit H – Janitorial Service

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OFFICE BUILDING LEASE AGREEMENT

     THIS LEASE AGREEMENT is entered into as of the Lease Date set forth in
the Basic Lease Information by and between JER/BRE Austin Tech L.P., a Delaware
limited partnership (hereinafter called “Landlord”) and ISE Labs, Inc., a
California corporation (hereinafter called “Tenant”).

WITNESSETH:

     1.     DEFINITIONS AND BASIC PROVISIONS. The definitions, information and
basic provisions set forth in the Basic Lease Information (the “Basic Lease
Information”) executed by Landlord and Tenant contemporaneously herewith are
incorporated herein by reference for all purposes and shall be used in
conjunction with the provisions of this Lease. As used herein, the term “Net
Rentable Area” or “NRA” shall mean the Useable Square Footage contained in the
Premises with an add-on factor of 16.5%. The Useable Square Footage of the
Premises shall mean and refer to all floor area under the roof of the Building
and measured to the “Exterior Building Wall” (which shall mean the outside
surface of the outer glass or midpoint of the wall in the absence of glass of
the exterior wall of the Building) and measured to the midpoint of the walls
separating areas leased by or held for lease to other tenants or from areas
devoted to corridors, elevator lobbies, restrooms, mechanical rooms, janitor
closets, vending areas and other similar facilities which are intended for the
use of all tenants on the particular floor. The Net Rentable Area contained in
the Premises as shown in the Basic Lease Information is hereby stipulated by
Landlord and Tenant to be accurate and correct for all purposes.

     2.     LEASE GRANT. Landlord, in consideration of the rent to be paid and
the other covenants and agreements to be performed by Tenant and upon the terms
hereinafter stated, does hereby lease, demise and let unto Tenant the Premises
commencing on the first to occur of (i) the date upon which Tenant occupies any
portion of the Premises for the conduct of Tenant’s business operations, or (ii)
sixty (60) days following the date upon which Landlord delivers possession of
the Premises to Tenant for construction of its Tenant improvements (as described
in EXHIBIT D) (the “Commencement Date”) and ending on the last day of the Lease
Term unless sooner terminated as herein provided. Landlord agrees to deliver to
Tenant possession of the Premises in accordance with the Base Building
Specifications attached hereto as Exhibit D-1 within ten (10) days after this
Lease has been fully executed by the parties (the “Delivery Date”). If the
Premises are not delivered to Tenant within said time period, for any reason
whatsoever other than the failure of Landlord to deliver possession even though
the Premises are

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available, Landlord shall not be deemed to be in default hereunder, and Landlord
shall not be liable or responsible for any claims, damages or liabilities in
connection therewith or by reason thereof, and Tenant agrees to accept
possession of the Premises at such time as Landlord is able to tender the same
and this Lease shall continue for the lease Term specified in the Basic Lease
Information. Notwithstanding the foregoing, if Landlord has not delivered
possession of the Premises to Tenant within (i) 30 days after this Lease has
been fully executed by the parties, then the Rent Commencement Date (defined
below) shall be delayed one (1) day for each day past such 30th day on which
such delivery occurs; and (ii) 60 days after this Lease has been fully executed
by the parties, then Tenant, in addition to any other rights and remedies
available at law or in equity, shall have the right to terminate this Lease upon
notice to Landlord (so long as such notice is received by Landlord prior to
delivery of possession of the Premises to Tenant), in which case any prepaid
Rent, Security Deposit and other sums paid by Tenant to Landlord will be
immediately refunded by Landlord to Tenant. Within fifteen (15) days after
Tenant’s receipt of a request from Landlord, Tenant agrees to give Landlord a
letter confirming the Commencement Date and certifying that Tenant has accepted
delivery of the Premises and that the condition of the Premises complies with
Landlord’s obligations hereunder, except with respect to latent defects of which
Tenant discovers and delivers notice to Landlord within one (1) year after
occupying the Premises.

     3.     RENT AND SECURITY DEPOSIT. In consideration of this Lease, Tenant
promises and agrees to pay Landlord the Adjusted Rental, which is the sum of the
monthly Basic Rental and monthly estimated Component Charges (subject to
adjustment as hereinafter provided) without deduction or setoff, for each month
of the entire Lease Term, subject to the free rent period during the first 3
months following the Commencement Date. Adjusted Rental shall be payable as
follows: (a) one such monthly installment (which installment shall be credited
as payment for the first (1st) full calendar month of the Lease term following
the Rent Commencement Date) shall be payable by Tenant to Landlord
contemporaneously with the execution of this Lease; (b) on the Commencement Date
and on the thirtieth (30th) and sixtieth (60th) day following the Commencement
Date, Tenant shall pay the portion of the estimated Component Charges payment
applicable to electricity and CUP utilities (as defined below) for a thirty (30)
day period (the “Estimated Utilities Payment”) to Landlord; and (c) on the first
business day after the ninetieth (90th) day following the Commencement Date (the
“Rent Commencement Date”), a partial monthly installment of Adjusted Rental
(based on the number of days remaining in such month) shall be due and payable
without demand, and on the first day of the second (2nd) full calendar month
following the Rent Commencement Date, Tenant shall pay a monthly installment of
Adjusted Rental to Landlord and continuing thereafter on or before the first day
of each succeeding calendar month during the Lease Term hereof [or, if the Rent
Commencement Date is on the first day of a calendar month, then no monthly
installment of Adjusted Rental shall be due and payable on the Rent Commencement
Date, and on the first day of the next full calendar month following the Rent
Commencement Date, Tenant shall pay a monthly installment of Adjusted Rental to
Landlord and continuing thereafter on or before the first day of each

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succeeding calendar month during the Lease Term hereof]. In the event any
installment of the Adjusted Rental, or any portion thereof, is not received
within five (5) days after written notice therefor from Landlord (excluding any
notice sent prior to the due date of such Adjusted Rental), then (without in any
way implying Landlord’s consent to such late payment) Tenant, to the extent
permitted by law, agrees to pay, in addition to said installment of the Adjusted
Rental, a late payment charge equal to five percent (5%) of the installment of
the Adjusted Rental, or portion thereof, which is overdue, it being understood
that said late payment charge shall be for the purpose of reimbursing Landlord
for the additional costs and expenses which Landlord presently expects to incur
in connection with the handling and processing of late installment payments of
the Adjusted Rental which become owing by Tenant to Landlord hereunder and
provided that Landlord shall only be obligated to give Tenant written notice of
any such late payment once in any twelve (12) month period, and thereafter
Tenant shall pay such late payment charge immediately alter failure to timely
make such payment without requirement of notice from Landlord. In addition, if
Tenant fails to pay any installment of Adjusted Rental, or any portion thereof,
within thirty (30) days after the due date thereof, or fails to pay any other
sum (other than Adjusted Rental) within 30 days after such payment is due which
at any time becomes due to Landlord under any provision of this Lease, then, in
either such event, Tenant shall pay Landlord interest on such overdue amounts
from the due date thereof until paid at an annual rate (the “Past Due Rate”)
which equals the lesser of (i) eighteen percent (18%) or (ii) the highest rate
then permitted by law.

     The Security Deposit shall be payable by Tenant to Landlord contemporaneously
with the execution of this Lease. The Security Deposit shall be held by Landlord
without liability for interest and as security for the performance by Tenant of
Tenant’s covenants and obligations under this Lease, it being expressly
understood that such deposit shall not be considered an advance payment of
rental or a measure of Landlord’s damages in case of default by Tenant; Landlord
may, from time to time, without prejudice to any other remedy, use such deposit
to the extent necessary to make good any arrearages of Rent or other amounts due
hereunder and any other damage, injury, expense or liability caused to Landlord
by such event of default after Tenant’s receipt of written notice of such a
default by Tenant and the expiration of the applicable cure period. Following
any such application of the Security Deposit, Tenant shall pay to Landlord
within 10 days after demand the amount so applied in order to restore the
Security Deposit to its

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original amount. If Tenant is not then in default hereunder, any remaining
balance of such deposit shall be returned by Landlord to Tenant within a
reasonable period of time after the expiration of this Lease, not to exceed 30
days. If Landlord transfers its interest in the Premises during the Lease Term,
Landlord will assign the Security Deposit to the transferee and, thereafter,
shall have no further liability for the return of such Security Deposit.

     4.     LANDLORD’S OBLIGATIONS.

     a.     Subject to the limitations hereinafter set forth, Landlord agrees to
furnish Tenant facilities to provide (i) water (hot, cold and refrigerated) at
those points of supply provided for general use of tenants in the Building; (ii)
heated and refrigerated air conditioning (humidified to the specifications
stated in EXHIBIT D-1 attached hereto) at all times and at such temperatures and
in such amounts which meet the HVAC specifications stated in EXHIBIT D-1
attached hereto, such service at hours other than Customary Business Hours to be
furnished upon request by Tenant (which may be made in person to the property
manager or by telephone), it being acknowledged that Tenant operates and may
need such service 24 hours each day, and Tenant shall bear the entire actual
cost thereof; (iii) janitorial service to the Premises and the common areas as
described in EXHIBIT H attached hereto on weekdays other than Holidays (as
hereinafter defined) and window-washing as described in EXHIBIT H attached
hereto; (iv) operatorless passenger elevators for ingress and egress to the
floor on which the Premises are located, in common with other tenants, provided
that Landlord may reasonably limit the number of elevators to be in operation at
times other than during Customary Business Hours for the Building; (v)
replacement of Building Standard light bulbs and fluorescent tubes; and (vi)
chilled water, steam and compressed air. In addition, Landlord agrees to
maintain the public and common areas of the Building, such as lobbies, stairs,
corridors, and restrooms, in reasonably good order and condition. If Tenant
shall desire any of the services specified in this Paragraph 4 at any time or in
an amount other than times or amounts herein designated, such excess service or
services shall be supplied to Tenant, subject to availability in the case of
extra janitorial service, only if a request from Tenant has been received by
Landlord before 3:00 p.m. on the business day preceding such extra usage, and
Tenant shall pay to Landlord as additional rent the cost of such excess service
or services (plus an additional charge of fifteen percent [15%] of such cost
[excluding utility costs] to cover overhead) within fifteen (15) days after
Tenant’s receipt of a bill therefor; provided, however, that water, utilities,
heating, air-conditioning and ventilation (“HVAC”) for non Customary Business
Hours will be available upon request by Tenant without having to provide the
advanced notice for other services as noted above. The term “Customary Business
Hours” means 7:00 a.m. to 7:00 p.m., Monday through Friday, and Saturday 8:00
a.m. to

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1:00 p.m., except Holidays. The term “Holidays” means New Year’s Day, Memorial
Day, the Fourth of July, Labor Day, Thanksgiving Day and Christmas Day.

     Notwithstanding anything to the contrary, Landlord agrees that Tenant
may have access to and use of the Premises seven days a week, and 24 hours each
day. During such time, Landlord agrees that all electrical, water, and other
utilities and HVAC will be available to Tenant at the Premises.

     b.     Landlord shall make available to Tenant electric power facilities
which meet the electrical system specifications stated in EXHIBIT D-1 attached
hereto (including electric power service in the amount of 1,200 AMPS, 480
Volts). Notwithstanding the foregoing, if Tenant requires the use of a
supplemental air-conditioning system, chilled water or any other system to
conduct its business at the Premises, Tenant, at its expense, may, subject to
the applicable provisions of Paragraph 7 below, install its own meter and its
own electrical line with the public utility provider if necessary to operate
such equipment, and incur no separate or additional charge to Landlord therefore
in order to have sufficient electrical capacity. Tenant shall be responsible for
the distribution of electricity, refrigerated and heated air and the CUP
Utilities (as defined below) within the Premises. Landlord shall not profit in
anyway from electricity and metering devices shall be provided to determine the
amount of electricity (including HVAC electricity), steam, compressed air and
chilled water consumed at the Premises (collectively, steam, compressed air and
chilled water are referred to herein as the “CUP Utilities”). Landlord shall
also make available electric lighting and current for the common areas of the
Building in the manner and to the extent deemed by Landlord to be standard. The
obligation of Landlord hereunder to make available such utilities shall be
subject to the rules and regulations of the supplier of such utilities and of
any municipal or other governmental authority regulating the business of
providing such utility service. Landlord shall not in any way be liable or
responsible to Tenant for any loss or damage or expense that Tenant may sustain
or incur if either the quantity or character of any utility service is changed.
Any riser or risers or wiring to meet Tenant’s excess electrical requirements
will be installed by Landlord at the sole cost and expense of Tenant (if, in
Landlord’s reasonable judgment, the same are necessary and will not cause any
permanent damage or injury to the Building or the Premises or cause or create a
dangerous or hazardous condition or unreasonably interfere with or disturb other
tenants or occupants). When heat generating machines, equipment, fixtures, or
devices of any nature whatsoever which affect the temperature otherwise
maintained by the air conditioning system, are used in the Premises by Tenant,
Tenant shall install supplementary air conditioning units in the Premises in
accordance with the applicable provisions of paragraph 7 below, and the

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cost thereof, including the cost of installation and the cost of operation and
maintenance thereof, shall be paid by Tenant to Landlord upon demand by
Landlord.

     c.     Availability of Services.

	 	(i)   Failure to any extent to make available, or any slowdown, stoppage
or interruption of, the services set forth in this Paragraph 4 resulting
from any cause (including, but not limited to, Landlord’s compliance
with (i) governmental or business guidelines now or hereafter published
or (ii) any requirements now or hereafter established by any
governmental agency, board or bureau having jurisdiction over the
operation and maintenance of the Building) shall not render Landlord
liable in any respect for damages to either person, property or
business, nor be construed an eviction of Tenant or work an abatement of
Rent, nor relieve Tenant from fulfillment of any covenant or agreement
hereof; provided, however, Landlord shall use its best efforts to resume
said services in a timely manner and if there is any interruption in
electrical, water, sewer, gas or other utility service to the Premises
or Building and such interruption is caused by Landlord and continues
for 3 consecutive business days following receipt of notice by Landlord
from Tenant, then there will be an abatement in Rent applicable to the
portions of the Premises affected by such interruption until such
utility service is restored. Should any equipment or machinery furnished
by Landlord break down or for any cause cease to function properly,
Landlord shall use reasonable diligence to repair same promptly, but
Tenant shall have no claim for abatement of Rent or damages on account
of any interruption in service occasioned thereby or resulting
therefrom, except as provided above.
	 
	 	(ii)   Further and notwithstanding anything to the contrary contained
herein, Landlord shall have the right to have two (2) planned,
seventy-two (72) hour continuous shutdowns of one or more of said
services during each calendar year of the Lease Term at times to be
mutually agreed upon in good faith by both parties at least forty-five
(45) days prior to each shutdown date. If, however, the parties do not
agree on a planned shutdown within thirty (30) days after notice to
Tenant of Landlord’s planned shutdown date, the shutdown may be
scheduled, by Landlord in its sole discretion during the Memorial Day
and Labor Day weekends by notice from Landlord to Tenant not later than
thirty (30) days prior to the scheduled shutdown. If additional
shutdowns should, in Landlord’s sole judgment, be required for
maintenance, alterations, replacements or improvements, Landlord and
Tenant shall negotiate in good faith to mutually agree upon the times
and duration of any additional shutdown.

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	 	(iii)   If there is a curtailment of a utility service (“Curtailed
Service”) to the Premises by action or fault of a third party Service
provider or for other reasons not within Landlord’s reasonable control,
such as a “brownout,” Landlord shall endeavor in good faith to provide
to Tenant, if reasonably feasible, an equitable pro rata share of the
Curtailed Service which remains available to the Project. Such pro rata
share shall be based on an estimate of Tenant’s use of such utility as
compared to use thereof by the other occupants of the Project. Tenant
shall pay its equitably allocated share of any costs required to
allocate the curtailed Service which costs shall be based on an estimate
of Tenant’s use of such utility. Notwithstanding the foregoing or any
other provision of this Lease to the contrary, Landlord shall be
obligated to allocate to Tenant all utilities required to operate the
emergency power systems which have been installed to operate the life
safety systems.

     d.     Landlord may change, reduce and increase the common areas of the
Project including change the location, size and shape of driveways, entrances,
parking areas, loading and unloading areas, ingress, egress, landscape areas and
walkways, and the direction of flow of traffic or construction of additional
buildings thereon; provided, however, that Landlord shall not (i) change or
relocate any of the roadways, driveways or access to the Premises so that Tenant
would not have reasonable access to the Premises from public right-of-ways; or
(ii) change, increase, relocate or reduce the common areas if the result of any
such change, increase, relocation or reduction would substantially interfere
with the ongoing operations of Tenant in the Premises.

     e.     The covenants and obligations of Tenant to pay the Adjusted Rental
and all additional rental (collectively, the “Rent”) hereunder shall be
unconditional and independent of any other covenant or condition imposed on
either Landlord or Tenant, whether under this Lease, at law or in equity.

     f.     Landlord and Tenant agree that responsibility for compliance with the
Americans with Disabilities Act and Texas Accessibility Standards (together, the
“ADA”) shall be allocated as follows: (i) except as provided in clause (iv)
below, Landlord, at Landlord’s sole cost and expense, shall be responsible for
compliance with the provisions of Title III of the ADA for all common areas,
including exterior and interior areas of the Building not included within the
Premises or the premises of other tenants, and for the bathrooms that are part
of the Premises; (ii) Landlord, at Landlord’s sole cost and expense, shall be
responsible for compliance with the provisions of Title III of the ADA for any
construction, renovations, alterations and repairs made within the Premises if
such construction, renovations, alterations or repairs are made by Landlord for
the purpose of improving the Building generally pursuant to plans and
specifications

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prepared by Landlord and at the direction of Landlord; (iii) Tenant, at
Tenant’s sole cost and expense, shall be responsible for compliance with the
provisions of Title III of the ADA for any construction, renovations,
alterations and repairs made within the Premises if such construction,
renovations, alterations and repairs are made by Tenant, its employees, agents
or contractors, at the direction of Tenant or done pursuant to plans and
specifications prepared or provided by Tenant or Tenant’s architect or space
planner; and (iv) Tenant, at Tenant’s sole cost and expense, shall be
responsible for the cost of compliance in the common areas to the extent any
changes are required as a proximate result of any construction, renovations,
alterations and repairs to the Premises under clause (iii) above. Upon initial
occupancy of the Premises by Tenant, Landlord shall be responsible for causing
the Building’s shell and exterior to comply with all ADA requirements and meet
all applicable code requirements and other requirements of applicable law.

     5.     LEASEHOLD IMPROVEMENTS. Improvements to the Premises shall be
installed as provided in EXHIBIT D). Except as provided in this Lease, Landlord
has made no representation or warranties as to the condition of the Premises,
the Building or the Project, nor has Landlord made any commitments to remodel,
repair or decorate, except as expressly set forth herein and in EXHIBIT D.
Otherwise, Tenant acknowledges that Tenant is entering into this Lease on an “as
is” basis.

     Upon Tenant’s written request, Landlord shall provide Tenant a copy of the
Environmental Site Assessment for the Project dated April 6, 2000 by
Environmental Resources Management (the “Environmental Report”). Landlord shall
and hereby does agree to indemnify, protect, defend and hold harmless Tenant
from and against any and all claims, judgments, damages, penalties, fines,
taxes, costs, liabilities, losses and expenses arising at any time before,
during or after the Term as a result of or in connection with the presence of
hazardous materials on, under or about the Premises or the Project, which are
the result of Landlord’s (or its agent’s, contractor’s or invitee’s) activities
on or in the Premises or the Project or which are the result of any other
party’s action or activities authorized by Landlord, or which are the result of
the presence of any hazardous materials on or in the Premises or the Project at
the Delivery Date. As used herein, the term “hazardous materials” means any
material or substance that is now or hereafter prohibited or regulated by any
law and that is now or hereafter designated by any governmental authority to be
radioactive, toxic, hazardous or otherwise a danger to health, reproduction or
the environment.

     6.     USE. Tenant shall use the Premises only for the Permitted Use. Tenant
will not occupy or use the Premises, or permit any portion of the Premises

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to be occupied or used, for any business or purpose other than the Permitted Use
or for any use or purpose which is unlawful in part or in whole or deemed to be
disreputable in any manner or extra hazardous on account of fire, nor permit
anything to be done that will in any way increase the rate of insurance on the
Building or contents; it being acknowledged that the use of the Premises as a
general office and/or electronic testing laboratory will not cause such an
increase. Tenant will conduct its business and control its agents, employees and
invitees in such a manner as not to create any nuisance, nor unreasonably
interfere with, annoy or disturb other tenants or Landlord in the management of
the Building. Tenant will maintain the Premises in a clean, healthful and safe
condition and will comply with all laws, ordinances, orders, rules and
regulations (state, federal, municipal and other agencies or bodies having any
jurisdiction thereof) with reference to the use, condition or occupancy of the
Premises by Tenant. Notwithstanding the foregoing, to the extent the Premises do
not comply with all laws in effect as of the Delivery Date, Tenant shall not
have to make any capital improvements or take any action to comply with then
current laws. Landlord, at its expense, shall be responsible for such
improvements. If any capital improvements to the structural portions of the
Building are required by any applicable laws not in effect or applicable to the
Building as of the Commencement Date and the same are not required or related to
(i) Tenant’s specific manner of use of the Premises or change in use of the
Premises, or (ii) Tenant’s construction or installation of any improvements or
alterations by Tenant, then Landlord shall be responsible for such work.

     Tenant shall not dump, flush, or in any way introduce any hazardous
substances or any toxic substances into the septic, sewage, or other waste
disposal system serving the Premises in violation of any applicable law, and
shall not generate, store, or dispose of hazardous or toxic substances in or on
the Premises or dispose of hazardous substances from the Premises to any other
location without the prior written approval of Landlord and then only in
accordance with applicable law, ordinances, regulations and orders. Landlord
hereby approves of Tenant’s use, generation, storage or disposal of the
following items in the ordinary course of Tenant’s business for the use
permitted under this Lease in the manner for which they were designed and in
such limited amounts as may be normal, customary and necessary for the operation
of Tenant’s business as it relates to the stripping and cleaning of electronic
components, and then only in accordance with applicable law, ordinances,
regulations and orders: (1) TCE (trichioroethylene) [Tenant may substitute
acetone for TCE and quantities of TCE and acetone will be combined to determine
quantities for purposes of the immediately following sentence] and (2) IPA
(isopropyl alcohol). Tenant shall in no event have in excess of 2 gallons of any
of the materials listed in (1) and (2) in the Premises at any one time (i.e. as
an example, Tenant may have 2 gallons of TCE and 2 gallons of IPA on the
Premises).

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     7.     TENANT’S REPAIRS AND ALTERATIONS. Tenant agrees, at its own cost and
expense, to repair or replace any damage or injury done to the Project, or any
part thereof, by Tenant or Tenant’s agents, or employees, (but subject to waiver
of subrogation provisions in Section 23(a) hereof); provided, however, if Tenant
fails to make such repairs or replacement, within fifteen (15) days after the
occurrence of such damage or injury, Landlord may, at its option, make such
repairs or replacement, and Tenant shall pay the cost thereof (plus an
additional charge often percent [l0%] of such cost to cover overhead) to
Landlord within fifteen (15) days after Tenant’s receipt of a request from
Landlord to do so, Tenant further agrees not to commit any waste or damage to be
committed on any portion of the Project, and at the termination of this Lease,
by lapse of time or otherwise, Tenant shall deliver up said Premises to Landlord
in as good condition as at the commencement date, ordinary wear and tear and
damage by casualty excepted. Tenant, without the prior written consent of
Landlord which will not be unreasonably withheld with respect to the Premises,
shall not install any signs, window or door lettering or advertising media of
any type on or about the Project, the Premises, or any part thereof, or make any
other alterations or physical additions in or to the Project, or any part
thereof. Tenant shall provide Landlord with a copy of the “as built”
architectural, electrical, plumbing and mechanical plans and specifications
prepared in connection with any alterations, additions or improvements within
sixty (60) days after completion thereof; provided, however, that Tenant shall
have the right, without Landlord’s approval but with prior written notice to
Landlord, to make any nonstructural repairs, alterations and improvements which
do not affect Building systems and the aggregate costs of which are less than
$25,000.00 (in actual construction costs) in any twelve (12) month period.
Notwithstanding the foregoing, Landlord’s consent shall not be required for
installing Tenant’s name or sign on the interior of the Premises, provided that
such identifying sign is consistent with signage at the Project. All
alterations, additions or improvements (whether temporary or permanent in
character) other than Tenant’s trade fixtures and personal property made in or
upon the Project, either by Landlord or Tenant, shall be Landlord’s property on
termination of this Lease and shall remain on the Project without compensation
to Tenant or, at Landlord’s option, Tenant shall restore those portions of the
Premises which Tenant altered, added to or improved to their original condition.
All furniture, movable trade fixtures and equipment installed in the Premises by
Tenant may be removed by Tenant at the termination of this Lease if Tenant so
elects, and shall be so removed if required by Landlord, or if not so removed
shall, at the option of Landlord, become the property of Landlord; however,
Tenant will not be required to remove any of the improvements being installed as
provided in Exhibit D to this Lease unless, at the time Landlord approves such
improvement,

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Tenant is given notice that such removal will be required. In the event of any
such removal, Tenant shall, at its expense, repair and restore to its original
condition any portion of the Premises which is damaged by such removal. All such
installations, removals and restorations shall be accomplished in a good
workmanlike manner so as not to damage the Premises or the primary structure or
structural qualities of the Building or the plumbing, electrical lines or other
utilities.

     8.     ASSIGNMENT AND SUBLETTING.

     a.     Tenant shall not assign all or any portion of this Lease, nor sublet
the Premises or any part thereof, without the prior written consent of Landlord,
which will not be unreasonably withheld. In the event Tenant should desire to
assign all or any portion of this Lease or sublet the Premises or any part
thereof, Tenant shall give Landlord notice of such desire at least 30 days in
advance of the date on which Tenant desires to make such assignment or sublease,
which notice shall contain the name of the proposed assignee or subtenant and
the nature and character of the business of the proposed assignee or subtenant,
the Term, use, rental rate and other particulars of the proposed subletting or
assignment, including, without limitation, evidence satisfactory to Landlord
that the proposed subtenant or assignee is financially responsible. Any such
notice shall contain prominent language in bold type that failure by the
Landlord to timely respond shall result in a deemed consent. Landlord shall then
have a period of 20 days following receipt of such notice within which to notify
Tenant in writing that Landlord elects (1) to terminate this Lease as to the
space so affected as of the date so specified by Tenant for such assignment or
subletting, except in the case of a Permitted Transfer (hereinafter defined), or
(2) to approve or disapprove Tenant’s proposed assignment or sublease. If
Landlord shall fail to notify Tenant in writing of such election within said 20
day period, Landlord shall be deemed to have consented to such assignment or
sublease. If Landlord consents to an assignment or sublease, Tenant agrees to
(i) provide, at its expense, direct access from the assignment or subletting
space to a public corridor of the Building and (ii) reimburse Landlord upon
demand for reasonable out-of-pocket expenses, including, without limitation,
Landlord’s legal fees and administrative expenses, incurred by Landlord in
connection with such assignment or sublease, not to exceed $1,500.00 per
consent. All plans and specifications for any alterations which may be necessary
to provide such access shall be submitted by Tenant to Landlord for its prior
written approval, which approval shall not be unreasonably withheld. No
assignment or subletting by Tenant shall relieve Tenant of any obligations under
this Lease. Consent of Landlord to a particular assignment or sublease or other
transaction shall not be deemed a consent to any other or subsequent
transaction.

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     b.     If Landlord consents to any subletting or assignment by Tenant as
herein above provided, and subsequently any category of Rent received by Tenant
under any such sublease is in excess of the same category of Rent payable to
Landlord under this Lease, excluding any payments for Tenant’s business,
accounts, trade fixtures, personal property, inventory, equipment and other
tangible and intangible property, then Landlord may, at its option, either (1)
declare one-half (l/2) of such excess rents under any sublease or assignment to
be due and payable by Tenant to Landlord as additional rent hereunder as and
when collected by Tenant, except that prior to calculating and making such
payment to Landlord, Tenant may deduct the actual cost of any improvements or
alterations made by Tenant for such sublease or assignment, and any brokerage
commissions and legal costs (not to exceed $1,500.00) incurred in connection
therewith, or (2) elect to cancel this Lease as provided in subparagraph (a)
above and, at Landlord’s option, enter into a lease directly with such assignee
or subtenant, without liability to Tenant. The provisions of this paragraph will
not be applicable to a Permitted Transfer (as defined below).

     c.     Landlord shall have the right to transfer and assign, in whole or in
part, all its rights and obligations hereunder and in the Building and Project
referred to herein, and in such event and upon assumption by the transferee of
Landlord’s obligations hereunder (any such transferee to have the benefit of,
and be subject to, the provisions of this Lease), no further liability or
obligation shall thereafter accrue against Landlord hereunder.

     d.     If Tenant is a corporation, then any merger, consolidation,
dissolution, or liquidation, or any change in ownership or power to vote of
thirty percent (30%) or more of its outstanding voting stock shall constitute an
assignment for the purpose of this Lease. If Tenant is a partnership, joint
venture or other entity, then any liquidation, dissolution, or transfer of
ownership of any interests totaling thirty percent (30%) or more of the total
interests in such entity shall constitute an assignment for purposes of this
Lease.

     e.     Tenant agrees that it shall not place (or permit any employee or
agent to place) any signs on or about the Project, nor conduct (or permit any
employee or agent to conduct) any public advertising which includes any
pictures, renderings, sketches or other representation of any kind of the
Building (or a portion thereof) with respect to any proposed assignment or
subletting of the Premises or any part thereof, without Landlord’s prior written
consent.

     f.     Tenant shall not mortgage, pledge, hypothecate or otherwise encumber
(or grant a security interest in) this Lease or any of Tenant’s rights
hereunder. However, Tenant shall have the right to encumber the furniture, trade
fixtures and equipment located in or on the Premises. Upon Tenant’s request,

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Landlord agrees to cooperate, at no expense to Landlord, with Tenant’s third
party leader’s or lessor’s request in executing a consent to such financing or
leasing of such furniture, trade fixtures and equipment, provided such form of
consent is acceptable to Landlord in its reasonable discretion.

     g.     Notwithstanding anything contained in this Lease, Tenant may enter
into any of the following transfers (a “Permitted Transfer”) without Landlord’s
prior written consent, but with notice to Landlord prior to the effective date
of any such Permitted Transfer:

		
	 	     (1) Tenant may sublease all or part of the Premises or assign
its interest in this Lease to any corporation or other entity which
controls, is controlled by, or is under common control with the Tenant;

		
	 	     (2) Tenant may assign its interest in this Lease to a
corporation or other entity which results from a merger, consolidation
or other reorganization in which Tenant is not the surviving
corporation, provided that the surviving entity’s net worth is more than
the greater of the net worth of Tenant at the Commencement Date or the
time of such assignment;

		
	 	     (3) Tenant may assign this Lease to a corporation or other
entity which purchases or otherwise acquires all or substantially all of
the assets of Tenant at the Premises, provided that the surviving
entity’s net worth is more than the greater of the net worth of Tenant
at the Commencement Date or the time of such assignment;

		
	 	     (4) Tenant may reincorporate in another jurisdiction or
reconstitute and convert to a different form, such as converting from a
corporation to a limited liability company; and

		
	 	     (5) Tenant may sell its shares for the initial issuance or
transfer of shares in Tenant in connection with its public offering on a
national stock exchange or a regularly traded over-the-counter market
and quoted on NASDAQ or shares that may be traded publicly subsequent
thereto.

     9.     INDEMNITY. Landlord shall not be liable or responsible to Tenant for
any loss or damage to any property or person occasioned by theft, act of God,
public enmity, injunction, riot, strike, insurrection, war, court order,
requisition or order of governmental body or authority, except as otherwise
expressly provided herein, or failure to make any such repairs. In addition,
Landlord shall not be liable to Tenant, or to Tenant’s agents, servants,
employees, customers or invites

16

 

and Tenant shall indemnify and save harmless Landlord of and from all fines,
suits, claims, demands, losses and actions (including attorney’s fees) for any
injury to person or damage to property in the Premises, even to the extent
caused by the act, omission or neglect of Landlord, Landlord’s agents, servants,
employees, customers or invites. In no event shall Landlord be liable to Tenant,
or to Tenant’s agents, servants, employees, customers or invites for any
special, consequential, punitive or exemplary damages. Tenant shall not be
liable to Landlord, or to Landlord’s agents, servants, employees, customers or
invites and Landlord shall indemnify and save harmless Tenant of and from all
fines, suits, claims, demands, losses and actions (including attorney’s fees)
for any injury to person or damage to property in the Project (excluding the
Premises), even to the extent caused by the act, omission or neglect of Tenant,
Tenant’s agents, servants, employees, customers or invites. In no event shall
Tenant be liable to Landlord, or to Landlord’s agents, servants, employees,
customers or invites for any special, consequential, punitive or exemplary
damages. Tenant shall indemnify and save harmless Landlord of and from all
fines, suits, claims, demands, losses and actions (including attorney’s fees)
resulting from Tenant’s use of any hazardous material on the Project, regardless
of whether or not such material is regulated by applicable law, ordinance,
regulation or order at the time of Tenant’s use of such material.

     10.     SUBORDINATION. As of the date hereof, Tenant and Landlord’s
mortgagee have executed a Subordination, Attornment, Notice and Non-Disturbance
Agreement. Landlord represents and warrants to Tenant that the only mortgage,
deed of trust, ground lease, master lease or underlying lease encumbering the
Building as of the date hereof is that certain Deed of Trust held by Wells Fargo
Bank, National Association. Tenant agrees that in the event Landlord shall grant
any deeds of trust, mortgages or other instruments of security to any party
after the date hereof, Tenant shall promptly execute a Subordination,
Attornment, Notice and Non-Disturbance Agreement (an “SNDA”) as may be required
by such party(s) in a form reasonably satisfactory to the holder of such deed of
trust, mortgage or other instrument of security and Tenant. Any such SNDA shall
provide, among other things, that in the event of the enforcement by the trustee
or the beneficiary under any such mortgage or trusts of the remedies provided
for by law or by such mortgage or deed of trust, Tenant’s rights under this
Lease shall not be disturbed so long as no Event of Default by Tenant shall
exist hereunder and Tenant will, upon request of any person or party succeeding
to the interest of Landlord as a result of such enforcement, automatically
become the tenant of such successor in interest without change in the terms or
other provisions of this Lease; provided, however, that such successor in
interest shall not be bound by or liable for (i) any payment of Rent for more
than one month in advance except prepayments (in an amount not in excess of one
month’s Adjusted

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Rental) in the nature of security for the performance by Tenant of its
obligations under this Lease, (ii) any amendment or modification of this Lease
made without the written consent of such trustee or such beneficiary or such
successor in interest, or (iii) any offset, claim or cause of action which
Tenant may have against Landlord relating to the period which is prior to the
time Tenant becomes the tenant of such successor in interest. Notwithstanding
the foregoing provisions, Tenant agrees that any mortgagee will have the right
at any time to subordinate any rights of such mortgagee to the rights of Tenant
under this Lease.

     11.     RULES AND REGULATIONS. Tenant and Tenant’s agents, employees, and
invitees shall comply fully with all requirements of the rules and regulations
of the Building, the Project and related facilities that are attached hereto as
EXHIBIT C, and made a part hereof as though fully set out herein. Tenant shall
further be responsible for the compliance with such rules and regulations by the
employees, servants and agents, of tenant. Landlord reserves the right to amend
or rescind any of the rules and regulations and to make such other and further
rules and regulations as in its reasonable judgment shall from time to time be
needful for the safety, protection, care and cleanliness of the Building and the
Project, the operation thereof, the preservation of good order therein and the
protection and comfort of the tenants and their agents, employees and invitees,
which rules and regulations, when made and notice thereof given to a tenant,
shall be binding upon it in like manner as if originally herein prescribed;
provided, however, that any such change or new rule may not materially reduce or
impair any benefit to Tenant under this Lease, increase the cost to Tenant or
otherwise have a material adverse affect on Tenant’s rights under this Lease.
Landlord agrees to enforce the rules in a uniform manner against all tenants at
the Project.

     12.     INSPECTION. Landlord or its officers, agents and representatives
shall have the right to enter into and upon any and all parts of the Premises at
all reasonable hours after reasonable prior notice (or, in any emergency, at any
hour and no such prior notice will be required in an emergency) to (a) inspect
same or clean or make repairs or alterations or additions as Landlord may deem
necessary (but without any obligation to do so, except as expressly provided for
herein) or (b) show the Premises to prospective tenants [but only during the
last nine (9) months of this Lease, following any prior oral notice], purchasers
or lenders; and tenant shall not be entitled to any abatement or reduction of
Rent by reason thereof, nor shall such be deemed to be an actual or constructive
eviction. Landlord agrees not to unreasonably interfere with Tenant’s business
or its use and occupancy of the Premises in connection with any entry or
exercise of Landlord’s rights under this section. Landlord agrees to comply with
Tenant security precautions in connection with any entry under this section.

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     13.     CONDEMNATION. If the Premises or any substantial part thereof, or if
the Project or any portion of the Project leaving the remainder of the Project
unsuitable for use as an office building comparable to its use on the
Commencement Date of this Lease, shall be taken or condemned in whole or in part
for public purposes, or sold in lieu of condemnation, then this Lease shall, at
the sole option of Landlord, forthwith cease and terminate. Notwithstanding the
foregoing, Landlord shall have no right to terminate this Lease in the event of
a taking which does not affect the Premises unless such taking results in the
balance of the Building being rendered untenantable and Landlord simultaneously
terminates all other leases of the Building. In addition, in the event of any
taking of any portion of the Premises or any portion of the Building such that
the Premises are no longer reasonably usable for their intended purpose, Tenant
shall have the right to terminate this Lease by delivery of written notice to
Landlord within thirty (30) days after such taking and such termination shall be
effective as of the effective date of such taking. In the event of a partial
taking which does not result in the termination of this Lease, Landlord shall
promptly restore the balance of the Premises and/or the Building to the extent
reasonably possible and the Rent and Additional Rent payable hereunder by Tenant
shall be adjusted accordingly to reflect any decrease in the size of the
Premises. All compensation awarded for any taking (or sale proceeds in lieu
thereof) shall be the property of Landlord, and Tenant shall have no claim
thereto, the same being hereby expressly waived by Tenant, except for its trade
fixtures, personal property, alterations which it is required to remove under
this Lease at the expiration of the term and relocation costs.

     14.     FIRE OR OTHER CASUALTY. In the event that substantially all of the
Premises or Building should be destroyed by fire, tornado or other casualty or
in the event the Premises or the Building should be so damaged that rebuilding
of repairs cannot, in the reasonable judgment of Landlord be completed within
one hundred eighty (180) days after the date of such damage, Landlord and Tenant
each may at its option terminate this Lease upon written notice to the other
within 30 days after the date of the casualty, in which event, this Lease shall
terminate effective as of the date of such damage. Landlord will notify Tenant
of the estimated time to restore within 20 days after the date of the casualty.
In the event the Building or the Premises should be damaged by fire, tornado or
other casualty covered by insurance required to be carried by Landlord under
this Lease, but only to such extent that rebuilding or repairs can, in the
reasonable judgment of Landlord, be completed within one hundred eighty (180)
days after the date of such damage, or if the damage should be more serious but
Landlord or Tenant does not elect to terminate this Lease, in either such event
Landlord shall within 45 days after the date of such damage commence to rebuild
or repair the Building and/or the Premises and shall proceed with reasonable
diligence to restore the

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Building and/or Premises to substantially the same condition in which it was
immediately prior to the happening of the casualty, except that Landlord shall
not be required to rebuild, repair or replace any part of the furniture,
equipment, fixtures and other improvements which may have been placed by Tenant
or other tenants within the Building or the Premises. Landlord shall allow
Tenant a diminution of all Rent and other charges and sums due under this Lease
during the time the Premises are unfit for occupancy, which diminution shall be
based upon the proportion of square feet which are unfit for occupancy to the
total square feet in the Premises. In the event any mortgagee under a deed of
trust, security agreement or mortgage on the Building should require that the
insurance proceeds be used to retire the mortgage debt, then Landlord, at
Landlord’s option, may elect not to rebuild and this Lease shall terminate upon
Tenant’s receipt of a notice from Landlord to that effect. Except as hereinafter
provided, any insurance which may be carried by Landlord or Tenant against loss
or damage to the Building or to the Premises shall be for the sole benefit of
the party carrying such insurance and under its sole control.

     15.     HOLDING OVER. Should Tenant, or any of its successors in interest,
hold over the Premises, or any part hereof, after the expiration of the Lease
Term, unless otherwise agreed in writing by Landlord, such holding over shall
constitute and be construed as a tenancy at will only, at a daily rental equal
to the daily Rent payable for the last month of the Lease Term plus fifty
percent (50%) of such amount. The inclusion of the preceding sentence shall not
be construed as Landlord’s consent for Tenant to hold over.

     16.     TAXES ON TENANT’S PROPERTY. Tenant shall be liable for all taxes
levied or assessed against all personal property, furniture or fixtures placed
by Tenant in the Premises. If any such taxes for which Tenant is liable are
levied or assessed against Landlord or Landlord’s property and if Landlord
elects to pay the same or if the assessed value of Landlord’s property is
increased by inclusion of personal property, furniture or fixtures placed by
Tenant in the Premises, and Landlord elects to pay the taxes based on such
increase, Tenant shall pay to Landlord within 30 days after written request
together with reasonable supporting documentation that part of such taxes for
which Tenant is primarily liable hereunder.

     17.     EVENTS OF DEFAULT. The following events shall be deemed to be an
Event of Default (as herein called) by Tenant under this Lease after notice and
the expiration of the applicable cure period:

     a.     Tenant shall fail to pay when due any Rent or other sums payable by
Tenant hereunder and such failure shall continue for five (5) days after written

20

 

notice therefor from Landlord (provided that Landlord shall only be obligated to
give Tenant written notice of any monetary default once in any twelve (12) month
period, and thereafter Tenant shall be deemed in default after failure to make
such payment within five (5) days after its due date without requirement of
notice from Landlord).

     b.     Tenant shall fail to comply with or observe any other provision of
this Lease and Tenant shall have failed to cure such breach within 30 days after
written notice from Landlord specifying the nature of such breach where such
breach could reasonably be cured within said 30 day period, or if such breach
could not be reasonably cured within said 30 day period, Tenant shall have
failed to continence such cure within said 30 day period and thereafter continue
with due diligence to prosecute such cure to completion within such time period
as is reasonably needed. In no event shall such cure period exceed one hundred
twenty (120) days.

     c.     Tenant or any guarantor of Tenant’s obligations hereunder shall make
an assignment for the benefit of creditors.

     d.     Any petition shall be filed by or against Tenant or any guarantor of
Tenant’s obligations hereunder under any section or chapter of the National
Bankruptcy Act, as amended, or under any similar law or statute of the United
States or any State thereof, and, in the event of a petition being filed against
Tenant, such petition is not vacated or stayed within 60 days after the date of
such filing; or Tenant or any guarantor of Tenant’s obligations shall be
adjudged bankrupt or insolvent in proceedings filed thereunder.

     e.     A receiver of Trustee shall be appointed for all or substantially all
of the assets of Tenant or any guarantor of Tenant’s obligations hereunder which
is not vacated or stayed within 90 days.

     Landlord and Tenant agree that it shall not be an Event of Default
hereunder if Tenant shall desert or vacate any portion of the Premises; provided
that Landlord shall have the right, in addition to any of its other rights under
this Lease, at any time after thirty (30) days after any such desertion or
vacation by Tenant, to terminate this Lease as to the space so deserted or
vacated by giving Tenant notice of such termination and such termination shall
be effective as of the date set forth in such notice from Landlord.

     18.     REMEDIES. Upon the occurrence of any Event of Default specified in
this Lease after notice and the expiration of the applicable cure period,
Landlord shall have the option to pursue any and all remedies which it may then

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have hereunder or at law or in equity, including, without limitation, any one or
more of the following, in each case, in accordance with applicable law:

     a.     Terminate this Lease and, notwithstanding such termination, Tenant
shall be liable for and shall pay to Landlord at the address specified for
notice to Landlord herein the sum of all rental and other amounts payable to
Landlord pursuant to the terms of this lease which have accrued to date of such
termination, plus, as damages, an amount equal to the positive difference, if
any, between (i) Adjusted Rental hereunder for the remaining portion of the
lease term (had such term not been terminated by Landlord prior to the date of
expiration stated in Paragraph 2 above) less (ii) the net amounts Tenant proves
Landlord would have received during such remaining portion of the lease term
through reletting of the Premises, such positive difference discounted to the
date of termination at the rate of seven percent (7%) per annum.

     b.     Enter upon and take possession of the Premises and expel or remove
Tenant and any other person who may be occupying the Premises or any part
thereof, by force if necessary, without being liable for prosecution or any
claim for damages therefor, and relet the Premises as required by law on such
terms as Landlord shall deem advisable (including, without limitation, such
concessions and free rent as Landlord deems necessary or desirable) and receive
and retain all of the rent therefor; and Tenant agrees (i) to pay to Landlord on
demand any deficiency that may arise by reason of such reletting for the
remainder of the Lease Term, and (ii) that Tenant shall not be entitled to any
rents or other payments received by Landlord in connection with such reletting
even if such rents and other payments are in excess of the amounts that would
otherwise be payable to Landlord under this Lease, but the amount collected by
Landlord will be applied towards the claim by Landlord against Tenant.

     c.     Make such payments and/or take such action (including, without
limitation, entering upon the Premises by force if necessary, without being
liable for prosecution or any claim for damages therefor) and pay and/or perform
whatever Tenant is obligated to pay or perform under the terms of this Lease;
and Tenant agrees to reimburse Landlord on demand for any reasonable
expenditures and expenses (together with interest thereon at the Past Due Rate
from the date paid by Landlord) which Landlord may reasonably make or incur in
thus effecting compliance with Tenant’s obligations under this Lease, and Tenant
further agrees that Landlord shall not be liable for any damages resulting to
Tenant from such action.

     d.     Collect, from time to time, by suit or otherwise, each installment of
Rent or other sum as it becomes due hereunder, or to enforce, from time to time,

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by suit or otherwise, any other term or provision hereof on the part of Tenant
required to be kept or performed.

     e.     No re-entry or taking possession of the Premises by Landlord shall be
construed as an election on its part to terminate this Lease, unless a notice of
such intention be given to Tenant. Notwithstanding any such reletting or
re-entry or taking possession, Landlord may at any time thereafter elect to
terminate this Lease for a previous default that has not be cured at the time of
such reletting, Pursuit of any of the foregoing remedies shall not preclude
pursuit of any of the other remedies herein provided or any other remedies
provided by law, nor shall pursuit of any remedy herein provided constitute a
forfeiture or waiver of any Rent due to Landlord hereunder or of any damages
occurring to Landlord by reason of the violation of any of the terms, provisions
and covenants herein contained. Landlord’s acceptance of any Rent following an
Event of Default hereunder shall not be construed as Landlord’s waiver of such
Event of default. No waiver by Landlord of any violation or breach of any of the
terms, provisions, and covenants herein contained shall be deemed or construed
to constitute a waiver of any other violation or default. The loss or damage
that Landlord may suffer by reason of termination of this Lease or the
deficiency from any reletting as provided for above shall include the expense of
repossession and any repairs or remodeling undertaken (pro rated to reflect the
term remaining under this Lease over the term of the reletting) or leasing
commissions (pro rated to reflect the term remaining under this Lease over the
term of the reletting) incurred by Landlord on behalf of Tenant under this Lease
(any remodeling costs and leasing commissions to be prorated for the unexpired
term of the Lease). Should Landlord at any time terminate this Lease for any
default, in addition to any other remedy Landlord may have, Landlord may recover
from Tenant all damages Landlord may incur by reason of such default (together
with interest thereon at the Past Due Rate), including the cost of recovering
the Premises. Notwithstanding any termination of this Lease prior to the Lease
expiration date, Tenant’s obligations to pay any and all additional rent
pursuant to this Lease shall continue and shall cover all periods up to the
expiration date of this Lease.

     f.     Tenant, for itself and on behalf of any and all persons claiming
through or under it, including, without limitation, all creditors of all kinds,
does hereby waive and surrender all rights and privileges which it or any of
them might have under or by reason of any present or future law to redeem the
Premises or to have a continuance of this Lease after having been dispossessed
or rejected therefrom by process of law or under the terms and conditions of
this Lease or after the termination of this Lease as herein provided.

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     19.     SURRENDER OF PREMISES. No act or thing done by Landlord or its
agents during the term hereby granted shall be deemed an acceptance of a
surrender of the Premises, and no agreement to accept a surrender of the
Premises shall be valid unless the same be made in wilting and signed by
Landlord.

     20.     ATTORNEY’S FEES. In the event that any action or proceeding is
brought to enforce any term, covenant or condition of this Lease on the part of
Landlord or Tenant, the prevailing party in such litigation shall be entitled to
reasonable attorney’s fees to be fixed by the court in such action or
proceeding.

     21.     LANDLORD’S LIEN. Landlord hereby waives its landlord’s lien on any
of Tenant’s personal property located in the Premises.

     22.     MECHANIC’S LIENS. Tenant will not permit any mechanic’s lien or
liens to be placed upon the Project, or any portion thereof; caused by or
resulting from any work performed, materials furnished or obligation incurred by
or at the request of Tenant, and in the case of the filing of any such lien,
Tenant will pay and discharge the same or bond off such lien within 15 days
after receipt of notice of such lien. If default in payment thereof shall
continue for fifteen (15) days after Tenant’s receipt of a notice thereof from
Landlord, Landlord shall have the right and privilege at Landlord’s option of
paying the same or any portion thereof without inquiry as to the validity
thereof, and any amounts so paid, including expenses and interest, shall be so
much additional rent hereunder due from Tenant to Landlord and shall be repaid
to Landlord (together with interest at the Past Due Rate from the date paid by
Landlord) within fifteen (15) days after Tenant’s receipt of a request from
Landlord therefor.

     23.     NO SUBROGATION-LIABILITY INSURANCE.

     a.     Each party hereto hereby waives any cause of action it might have
against the other party, on account of any loss or damage that is insured
against under its property damage insurance policy that covers the Project,
Building, the Premises, Landlord’s or Tenant’s fixtures, personal property,
leasehold improvements or business and which names Landlord or Tenant, as the
case may be, as a party insured, it being understood and agreed that this
provision supersedes the indemnity by a party by the other party under paragraph
9 hereof. Each party hereto agrees that it will request its insurance carrier to
endorse all applicable policies waiving the carrier’s rights of recovery under
subrogation or otherwise against the other party.

     b.     Tenant shall, at its expense, maintain a policy or policies of
comprehensive general liability insurance pertaining to its use and occupancy of

24

 

the Premises hereunder, with the premiums thereof fully paid in advance, issued
by and binding upon a solvent insurance company reasonably acceptable to
Landlord, such insurance to name Landlord and Tenant as additional insureds and
to afford minimum protection of not less than Two Million and No/100 Dollars
($2,000,000.00) combined single limit for bodily injury, death to any one person
or property damage in any one occurrence. Upon Tenant’s execution of this Lease
and at any time from time to time thereafter when Landlord so requests, Tenant
shall furnish a certificate of insurance and such other evidence satisfactory to
Landlord of the maintenance of all insurance coverages required hereunder, and
Tenant shall obtain written obligation on the part of each insurance company to
notify Landlord at least thirty (30) days prior to cancellation or material
change of any such insurance.

     c.     Landlord shall procure and maintain during the Term of this Lease (i)
an “all-risk” casualty insurance policy insuring the Project for one hundred
percent (100%) of the full replacement value (as Landlord may reasonably
determine from time to time) less foundation and excavation costs and (ii)
commercial general liability insurance for the common areas of the Project
affording minimum protection of not less than Two Million and No/100 Dollars
($2,000,000.00) combined single limit for bodily injury, death to any one person
or property damage in any one occurrence, each such policy having customary
deductibles and issued by a reputable and creditworthy insurance carrier.

     24.     BROKERAGE. Except for the commissions payable by Landlord to
Endeavor Real Estate Group (“Landlord’s Broker”) and to Brey & Associates
(“Tenant’s Broker”) which commissions are Landlord’s responsibility pursuant to
separate agreements between Landlord and Landlord’s Broker and between Landlord
and Tenant’s Broker, Landlord and Tenant hereby represent and warrant to each
other that no other commission is due and payable to any other broker or other
leasing agent in connection with this Lease as a result of its own dealings with
any other broker or leasing agent, and Landlord and Tenant hereby agree to
indemnify and hold each other harmless from and against all loss, damage, cost
and expense (including reasonable attorney’s fees) suffered by the other party
as a result of a breach of the foregoing representation and warranty.

     25.     CHANGE OF BUILDING OR PROJECT NAME. Landlord reserves the right at
any time to change the name by which the Building or Project is designated.

     26.     ESTOPPEL CERTIFICATES. From time to time when requested by either
party hereto, the other party shall deliver to any prospective purchaser,
present or future mortgagee or lessor, in each case, of all or any part of the
Project, or any interest of Landlord or Tenant therein, as applicable, a
certificate signed by

25

 

the other party continuing and containing such factual certificates and
representations reasonably deemed appropriate by the requesting party or any
such purchaser, mortgagee or lessor, and such party shall, within fifteen (15)
days following such party’s receipt of said proposed certificate from the
requesting party, return a fully executed copy of said certificate to the
requesting party. In the event either party shall fail to return a fully
executed copy of such certificate to the requesting party within the foregoing
fifteen (15) day period, then such party shall be deemed to have approved and
confirmed all of the terms, certifications and representations contained in such
certificate.

     27.     NOTICES. Each provision of this Lease, or of any applicable
governmental laws, ordinances, regulations, and other requirements with
reference to the sending, mailing or delivery of any notice, or with reference
to the making of any payment or request by Tenant or Landlord, shall be deemed
to be complied with when and if the following steps are taken:

     a.     All Rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to, and must be received by, Landlord on the date due
and at the address set forth in the Basic Lease Information or at such other
address as Landlord may specify from time to time by written notice delivered in
accordance herewith.

     b.     Any notice, request, demand or document (excluding Rent or other
payments) permitted or required to be delivered hereunder must be in writing and
shall be deemed to be received if (i) actually received; (ii) whether or not
received on the third (3rd) business day after being deposited in the United
States mail, postage prepaid, certified or registered mail (with or without
return receipt requested) or on the next business day after being deposited with
a nationally recognized overnight delivery company, addressed to the parties
hereto at the respective addresses set forth in the Basic Lease Information or
(iii) sent by facsimile transmission (subject to the terms below), with, in the
case of Landlord, copies to: Endeavor Real Estate Management, Ltd., 100 Congress
Avenue, Suite 1310, Austin, Texas 78701, Attention: Kirk Rudy, Fax No. (512)
682-5505; Trammell Crow Central Texas, Inc., P.O. Box 2176, Austin, TX 78768,
Attention Becky Heston, Fax No. (512) 482-5586; and JER Partners, 1650 Tysons
Blvd., Suite 1600, McLean, VA 22102, Attention: Richard Harkins, Fax No. (703)
714-8100; and in the case of Tenant, a copy to: Richard Bradford, 3600 Peterson
Way, Santa Clara, CA 95054, Fax No. (408) 727-3136 and David Jones, 46800
Bayside Parkway, Fremont, CA 94538, Fax No. (510) 498-8762, or at such other
address as either of said parties have theretofore specified by written notice
delivered in accordance herewith. Notwithstanding anything contained in this
Paragraph 27 to the contrary, if a facsimile transmission is sent to one of the

26

 

numbers listed above, such transmission shall be deemed effective on the date it
is sent only if the sender receives a confirmation that such transmission was
successfully received during normal business hours in the time zone of the party
receiving such facsimile. If such confirmation shows that such transmission was
received after such normal business hours, the effective date of such facsimile
shall be the following business day.

     28.     SEPARABILITY. If any clause or provision of this Lease is illegal,
invalid or unenforceable under present or future laws effective dining the Lease
Term, then and in that event, it is the intention of the parties hereto that the
remainder of this Lease shall not be affected thereby, and it is also the
intention of the parties to this Lease that in lieu of each clause or provision
of this Lease that is illegal, invalid or unenforceable, there be added as a
part of this Lease a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and be legal,
valid and enforceable.

     29.     AMENDMENTS; BINDING EFFECT. This Lease may not be altered, changed
or amended, except by instrument in writing signed by both parties hereto. No
provision of this Lease shall be deemed to have been waived by Landlord unless
such waiver be in writing signed by Landlord and addressed to Tenant, nor shall
any custom or practice which may evolve between the parties in the
administration of the terms hereof be construed to waive or lessen the right of
Landlord to insist upon the performance by Tenant in strict accordance with the
terms hereof. The terms and conditions contained in this Lease shall apply to,
inure to the benefit of, and be binding upon the parties hereto, and upon their
respective successors in interest and legal representatives, except as otherwise
herein expressly provided, except that the Landlord named herein and each
successive owner of the Premises shall be liable only for the obligations
accruing during the period of its ownership.

     30.     QUIET ENJOYMENT. Provided Tenant has performed all of the terms and
conditions of this Lease, including the payment of Rent, to be performed by
Tenant, Landlord shall not interfere with the peaceable and quiet enjoyment of
the Premises by Tenant during the Lease Term, subject to the terms and
conditions of this Lease.

     31.     GENDER. Words of any gender used in this Lease shall be held and
construed to include any other gender, and words in the singular number shall be
held to include the plural, unless the context otherwise requires.

     32.     JOINT AND SEVERAL LIABILITY. If there be more than one Tenant, the
obligations hereunder imposed upon Tenant shall be joint and several. If there
be

27

 

a guarantor of Tenant’s obligations hereunder, the obligations hereunder imposed
upon Tenant shall be the joint and several obligations of Tenant and such
guarantor and Landlord need not first proceed against Tenant before proceeding
against such guarantor nor shall any such guarantor be released from its
guaranty for any reason whatsoever, including, without limitation, in case of
any amendments hereto, waivers hereof or failure to give such guarantor any
notices hereunder.

     33.     PERSONAL LIABILITY. The liability of Landlord to Tenant for any
claim against Landlord which arises under or by reason of this Lease shall be
limited to the interest of Landlord in the Project, and Landlord shall not be
personally liable for any deficiency. This clause shall not be deemed to limit
or deny any remedies which Tenant may have in the event of default by Landlord
hereunder which do not involve the personal liability of Landlord.

     34.     CERTAIN RIGHTS RESERVED BY LANDLORD. Landlord shall have the
following rights, exercisable without notice and without liability to Tenant for
damage or injury to property, persons or business and without effecting an
eviction, constructive or actual, or disturbance of Tenant’s use or possession
or giving rise to any claim for setoff or abatement of Rent:

     a.     To decorate and to make repairs, alterations, additions, changes or
improvements, whether structural or otherwise, in and about the Project, or any
part thereof, and for such purposes to enter upon the Premises and, during the
continuance of any such work, to temporarily close doors, entryways, public
space and corridors in the Building, to interrupt or temporarily suspend
Building services and facilities and to change the arrangement and location of
entrances or passageways, doors and doorways, corridors, elevators, stairs,
toilets, or other public parts of the Building, all without abatement of Rent or
affecting any of Tenant’s obligations hereunder, so long as the Premises are
reasonably accessible. Landlord agrees to use commercially reasonable efforts to
minimize any interference with Tenant’s use or occupancy of the Premises or
common areas of the Project.

     b.     To have and retain a paramount title to the Premises free and clear
of any act of Tenant purporting to burden or encumber them.

     c.     To grant to anyone the exclusive right to conduct any business or
render any service in or to the Building, provided such exclusive right shall
not operate to exclude Tenant from the use expressly permitted herein.

28

 

     d.     To prohibit the placing of vending or dispensing machines of any kind
in or about the Premises without the prior written permission of Landlord, which
approval shall not be unreasonably withheld.

     e.     To have access for Landlord and other tenants of the Building to any
mail chutes located on the Premises according to the rules of the United States
Postal Service.

     f.     To take all such reasonable measures as Landlord may deem advisable
for the security of the Project and its occupants, including, without
limitation, the evacuation of the Building for cause, suspected cause, or for
drill purposes, the temporary denial of access to the Building, and the closing
of the Building after normal business hours and on Saturdays, Sundays and
Holidays, subject, however, to Tenants right to admittance when the Building is
closed after normal business hours under such reasonable regulations as Landlord
may prescribe from time to time which may include, by way of example but not of
limitation, that persons entering or leaving the Building, whether or not during
normal business hours, identify themselves to a security officer by registration
or otherwise and that such persons establish their right to enter or leave the
Building.

     35.     NOTICE TO LENDER. If the Project or any part thereof is at any time
subject to a first mortgage or a first deed of trust or other similar
instruments and this Lease or any of the Rent is assigned to such mortgagee,
trustee or beneficiary and Tenant is given written notice thereof, including the
post office address of such assignee, then Tenant shall not terminate this Lease
or abate any of the Rent for any default on the part of Landlord without first
giving written notice by certified or registered mail, return receipt requested,
to such assignee, specifying the default in reasonable detail, and affording
such assignee an opportunity to make performance, at its election, for and on
behalf of Landlord, as provided in the SNDA.

     36.     CAPTIONS. The captions contained in this Lease are for convenience
of reference only, and in no way limit or enlarge the terms and conditions of
this Lease.

     37.     MISCELLANEOUS.

     a.     Any approval by Landlord or Landlords architects and/or engineers of
any of Tenant’s drawings, plans and specifications that are prepared in
connection with any construction of improvements in the Premises shall not in
any way be construed or operate to bind Landlord or to constitute a
representation or warranty of Landlord as to the adequacy or sufficiency of such
drawings, plans

29

 

and specifications, or the improvements to which they relate, for any use,
purpose, or condition, but such approval shall merely be the consent of Landlord
as may be required hereunder in connection with Tenant’s construction of
improvements in the leased Premises in accordance with such drawings, plans and
specifications.

     b.     Each and every covenant and agreement contained in this Lease is, and
shall be construed to be, a separate and independent covenant and agreement.

     c.     There shall be no merger of this Lease or of the leasehold estate
hereby created with the fee estate in the leased Premises or any part thereof by
reason of the fact that the same person may acquire or hold, directly or
indirectly, this Lease or the leasehold estate hereby created or any interest in
this Lease or in such leasehold estate as well as the fee estate in the
leasehold Premises or any interest in such fee estate.

     d.     Neither Landlord nor Landlord’s agents or brokers have made any
representations or promises with respect to the Project, or any portion thereof,
except as herein expressly set forth and no rights, easements or licenses are
acquired by Tenant by implication or otherwise except as expressly set forth in
the provisions of this Lease.

     e.     The submission of this Lease to Tenant for examination does not
constitute an offer, reservation or option in favor of Tenant, and Tenant shall
have no rights with respect to this Lease or the Premises unless and until
Landlord shall elect, or shall elect to cause its managing agent, to execute a
copy of this Lease and deliver the same to Tenant, the date of which delivery
shall be deemed the “Delivery Date”.

     38.     FORCE MAJEURE. In the event that Landlord or Tenant shall be delayed
in the performance of any obligation of it (other than any obligation to pay any
money) hereunder as a result of strikes, lockouts, shortages of labor, fuel or
materials, acts of God, legal requirements, fire or other casualty, or any other
cause beyond the control of such party, then the performance of such obligation
(other than an obligation to pay and money) shall be excused for the period of
such delay, and the period for the performance of such obligation shall be
extended by the number of days equivalent to the number of days of such delay.
Landlord or Tenant shall in no event be required to settle or compromise any
strike, lockout or other labor disputes, the resolution thereof being within the
sole discretion of Landlord or Tenant as the case may be.

     39.     APPLICABLE LAW. This Lease has been executed in the State of Texas
and shall be governed in all respects by the laws of the State of Texas. It is

30

 

the intent of Landlord and Tenant to conform strictly to all applicable state
and federal usury laws. All agreements between Landlord and Tenant, whether now
existing or hereafter arising and whether written or oral, are hereby expressly
limited so that in no contingency or event whatsoever shall the amount
contracted for, charged or received by Landlord for the use, forbearance or
detention of money hereunder or otherwise exceed the maximum amount which
Landlord is legally entitled to contract for, charge or collect under applicable
state or federal law. If, from any circumstance whatsoever, fulfillment of any
provision hereof at the time performance of such provision shall be due shall
involve transcending the limit of validity prescribed bylaw, then the obligation
to be fulfilled shall be automatically reduced to the limit of such validity,
and if from any such circumstance, Landlord shall ever receive as interest or
otherwise an amount in excess of the maximum that can be legally collected, then
such amount which would be excessive interest shall be applied to the reduction
of the Rent; and if such amount which would be excessive interest exceeds the
Rent, then such additional amount shall be refunded to Tenant.

     40.     THIRD PARTY RIGHTS. Nothing herein expressed or implied is intended,
or shall be construed, to confer upon or give to any person or entity, other
than the parties hereto, any right or remedy under or by reason of this Lease.

     41.     EXHIBITS AND ATTACHMENTS. All exhibits, attachments, riders and
addenda referred to in this Lease and the exhibits listed herein below and
attached hereto are incorporated into this Lease and made a part hereof for all
intents and purposes as if fully set out herein. All capitalized terms used in
such documents shall, unless otherwise defined therein, have the same meanings
as are set forth herein.

	 	Exhibit A – Outline of Premises

Exhibit B – Legal Description

Exhibit C – Building Rules and Regulations

Exhibit D – Condition of the Premises and Tenant Improvements

31

 

BASIC LEASE INFORMATION

	 	 	 	 	 
	“LEASE DATE”:	 	
October 4, 2001	 	 
	 	 	 	 	 
	“TENANT”:	 	
ISE Labs, Inc.	 	 
	 	 	 	 	 
	ADDRESS OF TENANT:	 	
Prior to the Commencement Date:
	 	46800 Bayside Parkway

Fremont, CA 94538
	 	 	 	 	 
	 	 	
After the Commencement Date:
	 	11400 Burnet Road,

Suite 5160

Austin, Texas 78758
	 	 	 	 	 
	CONTACT:	 	
David Jones
	 	TELEPHONE:                      
	 	 	 	 	 
	“LANDLORD”:	 	
JER/BRE Austin Tech L.P.	 	 
	 	 	 	 	 
	ADDRESS OF LANDLORD:	 	
P.O. Box 81484

Austin, Texas 78708	 	 
	 	 	 	 	 
	CONTACT:	 	
Kirk Rudy
	 	TELEPHONE: (512) 682-5500

	 	 	 
	“PREMISES”:	 	
Suite 5110, located in the Building, which Premises
are outlined in the plan attached hereto as Exhibit A.
	 	 	 
	“BUILDING”	 	
Building 5, which is located in the Project.
	 	 	 
	“PROJECT”:	 	
The Domain, which includes the Building, other
buildings and related parking facilities and
common areas, and is located on the land described
on Exhibit B attached hereto (the “Land”)
	 	 	 
	“LEASE TERM”:	 	
The period commencing on the Commencement Date (as
defined in the Lease) and, subject to and upon the
terms and conditions set forth in the Lease, or in any
exhibit or addendum thereto, continuing for sixty-
three (63) calendar months thereafter; provided,
however, if the term of the Lease is deemed to have
commenced on a date other than the first day of a
calendar month, the expiration date of the primary
term shall be extended so as to give effect to the
full term specified above in addition to the remainder
of the calendar month during which the Lease is deemed
to have commenced.
	 	 	 
	“NET RENTABLE AREA OF
THE PREMISES”:	 	
13,349 square feet.
	 	 	 
	“BASIC RENTAL”:	 	
Months 1-3* $-0-/square foot ($0.00 per month)

Months 4-15 $14.00/square foot ($15,573.83 per month)

Months 16-27 $15.00/square foot ($16,686.25 per month)

Months 28-39 $16.00/square foot ($17,798.67 per month)

Months 40-51 $17.00/square foot ($18,911.08 per month)

Months 52-63 $18.00/square foot ($20,023.50 per month)
	 	 	 
	 	 	
* for the first (1st) three (3) full calendar months
following the Commencement Date

32

 

	 	 	 
	“ESTIMATED COMPONENT
CHARGES”:	 	
$7.37 per square foot of NRA of the Premises per
annum, or ($8,198.51) per month as described in
Exhibit F.
	 	 	 
	“ADJUSTED RENTAL”:	 	
During year 1, estimated to be $23,772.34 per month.
	 	 	 
	“SECURITY DEPOSIT”:	 	
$23,772.34.
	 	 	 
	“PERMITTED USE”:	 	
Tenant shall occupy the Premises for general
office use and electronic testing laboratory purposes
and, with the prior written consent of Landlord, other
uses incidental thereto.

This Basic Lease Information is hereby incorporated into and made a part of the
lease attached hereto (the “Lease”).

Each reference in the Lease to any of the information or definitions set forth
in this Basic Lease Information shall mean and refer to the information and
definitions herein above set forth and shall be used in conjunction with the
provisions of the Lease. In the event of any direct conflict between this Basic
Lease Information and the Lease, this Basic Lease Information shall control;
provided, however, that those provisions of the Lease (including its Exhibits)
which expressly require an adjustment to any of the matters set forth in this
Basic Lease Information shall supersede the provisions of this Basic Lease
Information.

	 	 	 	 	 	 	 
	LANDLORD:
    	 	TENANT:
	JER/BRE AUSTIN TECH L.P.	 	ISE LABS, INC.
    
	By:	 	
JER/BRE Austin Tech Management,	 	By:	 	/s/ DAVID PAN
		 	   L.L.C.,	 		 	

	 	 	its General Partner	 	Name:	 	David Pan
	 	 	 	 	 	 	

	 	 	 	 	Title:
	 	CEO
	 	 	 	 	 	 	

	By:	 	
/s/ CRAIG SMITH	 	 	 	 
	 	 	

	 	 	 	 
	Name:	 	
Craig Smith	 	 	 	 
	 	 	

	 	 	 	 
	Title:	 	
Vice President	 	 	 	 
	 	 	

	 	 	 	 

33

 

	 	Exhibit D-1 – Base Building Specifications

Exhibit D-2 – Landlord’s Construction Specifications

Exhibit E – Parking

Exhibit F – Component Charges

Exhibit F-l – Estimated Component Charges for 2001

Exhibit G – Special Provisions

Exhibit H – Janitorial Service

DATED as of the date first above written.

	 	 	 	 	 	 	 
	LANDLORD:
    	 	TENANT:
	JER/BRE AUSTIN TECH L.P.	 	ISE LABS, INC.
    
	By:	 	
JER/BRE Austin Tech Management,	 	By:	 	/s/ DAVID PAN
		 	   L.L.C.,	 		 	

	 	 	its General Partner	 	Name:	 	David Pan
	 	 	 	 	 	 	

	 	 	 	 	Title:
	 	CEO
	 	 	 	 	 	 	

	By:	 	
/s/ CRAIG SMITH	 	 	 	 
	 	 	

	 	 	 	 
	Name:	 	
Craig Smith	 	 	 	 
	 	 	

	 	 	 	 
	Title:	 	
Vice President	 	 	 	 
	 	 	

	 	 	 	 

34

 

EXHIBIT A

DEPICTION OF PREMISES

 

 

	 	 	 
	 	 	
May 13, 1997

Rev. July 14, 1999

Job Number 96-387

234.782 Acre Tract

(Tract No. 1)

Page 1 of 8)

EXHIBIT B

	 	 	 
	 	 	
May 13, 1997

Rev. July 14, 1999

Job Number 96-387

234.782 Acre Tract

(Tract No. 1)

Page 1 of 8)

FIELD NOTES

BEING 234.782 ACRES LOCATED IN THE JAMES ROGERS SURVEY NO. 19, ABSTRACT NO. 659
IN TRAVIS COUNTY, TEXAS, AND MORE PARTICULARLY BEING ALL OF THAT CERTAIN 0.227
ACRE TRACT (A PORTION OF VACATED GAULT LANE) QUITCLAIMED BY THE CITY OF AUSTIN
TO INTERNATIONAL BUSINESS MACHINES CORPORATION BY DEED RECORDED IN VOLUME 9553,
PAGE 423 OF THE DEED RECORDS OF TRAVIS COUNTY, TEXAS, AND A PORTION OF THAT
CERTAIN CALLED 179.67 ACRE TRACT OF LAND CONVEYED TO INTERNATIONAL BUSINESS
MACHINES CORPORATION BY DEED RECORDED IN VOLUME 3235, PAGE 393 OF THE DEED
RECORDS OF TRAVIS COUNTY, TEXAS AND A PORTION OF THAT CERTAIN CALLED 126.65 ACRE
TRACT CONVEYED TO INTERNATIONAL BUSINESS MACHINES CORPORATION BY DEED RECORDED
IN VOLUME 3235, PAGE 386 OF THE DEED RECORDS OF TRAVIS COUNTY, TEXAS AND A
PORTION OF THAT CERTAIN CALLED 104.69 ACRE TRACT CONVEYED TO INTERNATIONAL
BUSINESS MACHINES CORPORATION BY DEED RECORDED IN VOLUME 3269, PAGE 1477 OF THE
DEED RECORDS OF TRAVIS COUNTY, TEXAS; SAID 234.782 ACRES BEING MORE PARTICULARLY
DESCRIBED BY METES AND BOUNDS AS FOLLOWS:

BEGINNING at a 1/2-inch iron rod found at the intersection of the north
right-of-way line of Braker Lane (ROW varies) and the west line of F.M. Highway
No. 1325 (Burnet Road — 120’ ROW), same being the southeast corner of the herein
described 234.782 acre tract;

 

 

	 	 	 
	 	 	
May 13, 1997

Rev. July 14, 1999

Job Number 96-387

234.782 Acre Tract

(Tract No. 1)

Page 2 of 8)

THENCE westerly along said north line of Braker Lane the following four (4)
courses:

	 	1.	 	N 82 Degrees 53’53” W a distance of 355.39 feet to a 1/2-inch iron rod
found for corner;
	 
	 	2.	 	N 76 Degrees 30’34” W a distance of 279.06 feet to a 1/2-inch iron rod
found for the beginning of a curve to the right;
	 
	 	3.	 	a distance of 335.04 feet along the arc of said curve to the right
having a radius of 1,340.00 feet, a central angle of 14 Degrees
19’33”, and a chord which bears N 69 Degrees 18’06” W a distance of
334.17 feet to a 1/2-inch iron rod found for the point of tangency of
said curve;
	 
	 	4.	 	N 62 Degrees 13’50” W a distance of 574.79 feet to a 1/2-inch iron rod
set for the southwest corner of the herein described 234.782 acre
tract;

THENCE leaving said north line of Braker Lane through the interior of said
International Business Machines Corporation tracts the following thirty-three
(33) courses;

	 	1.	 	N 17 Degrees 46’13” E a distance of 1,038.67 feet to a 1/2-inch iron
rod set for corner;
	 
	 	2.	 	S 72 Degrees 13’38” E a distance of 323.75 feet to a 1/2-inch iron rod
set for corner;
	 
	 	3.	 	N 42 Degrees 16’58” E a distance of 188.62 feet to a 1/2-inch iron rod
set for corner;
	 
	 	4.	 	S 72 Degrees 06’28” E a distance of 246.01 feet to 1/2-inch iron rod
set for corner;
	 
	 	5.	 	S 75 Degrees 21’14” E a distance of 82.34 feet to a 1/2-inch iron rod
set for corner;
	 
	 	6.	 	N 17 Degrees 49’02” E a distance of 581.83 feet to a 1/2-inch iron rod
set for corner;

2

 

	 	 	 
	 	 	
May 13, 1997

Rev. July 14, 1999

Job Number 96-387

234.782 Acre Tract

(Tract No. 1)

Page 3 of 8)

	 	7.	 	S 72 Degrees 16’25” E a distance of 434.07 feet to a 1/2-inch iron rod
set for corner;
	 
	 	8.	 	N 17 Degrees 22’21” E a distance of 214.22 feet to a 1/2-inch iron rod
set for corner;
	 
	 	9.	 	N 01 Degrees 57’42” W a distance of 107.38 feet to a 1/2-inch iron rod
set for corner;
	 
	 	10.	 	N 72 Degrees 15’09” W a distance of 212.14 feet to a 1/2-inch iron rod
set for corner;
	 
	 	11.	 	S 24 Degrees 54’00” W a distance of 16.38 feet to a 1/2-inch iron rod
set for corner;
	 
	 	12.	 	N 72 Degrees 24’34” W a distance of 169.45 feet to a 1/2-inch iron rod
set for corner;
	 
	 	13.	 	S 71 Degrees 39’12” W a distance of 357.05 feet to a 1/2-inch iron rod
set for corner;
	 
	 	14.	 	N 74 Degrees 18’52” W a distance of 112.98 feet to a 1/2-inch iron rod
set for corner;
	 
	 	15.	 	S 49 Degrees 13’31” W a distance of 50.80 feet to a 1/2-inch iron rod
set for corner;
	 
	 	16.	 	N 75 Degrees 37’41” W a distance of 137.36 feet to a 1/2-inch iron rod
set for corner;
	 
	 	17.	 	N 78 Degrees 12’38” W a distance of 182.68 feet to a 1/2-inch iron rod
set for corner;
	 
	 	18.	 	S 17 Degrees 55’43” W a distance of 278.53 feet to a 1/2-inch iron rod
set for corner;
	 
	 	19.	 	N 72 Degrees 27’11” W a distance of 352.32 feet to a 1/2-inch iron rod
set for corner;

3

 

	 	 	 
	 	 	
May 13, 1997

Rev. July 14, 1999

Job Number 96-387

234.782 Acre Tract

(Tract No. 1)

Page 4 of 8)

	 	20.	 	N 17 Degrees 59’05” E a distance of 534.12 feet to a 1/2-inch iron rod
set for corner;
	 
	 	21.	 	S 72 Degrees 20’44” E a distance of 261.71 feet to a 1/2-inch iron rod
set for corner;
	 
	 	22.	 	N 53 Degrees 15’46” E a distance of 109.36 feet to a 1/2-inch iron rod
set for corner;
	 
	 	23.	 	N 17 Degrees 59’09” E a distance of 456.90 feet to a 1/2-inch iron rod
set for corner;
	 
	 	24.	 	N 70 Degrees 56’06” E a distance of 35.88 feet to a 1/2-inch iron rod
set for corner;
	 
	 	25.	 	S 72 Degrees 17’15” W a distance of 547.49 feet to a 1/2-inch iron rod
set for the point of curvature of a curve to the left;
	 
	 	26.	 	a distance of 116.76 feet along the arc of said curve to the left
having a radius of 150.00 feet, a central angle of 44 Degrees 35’53”,
and a chord which bears S 85 Degrees 24’49” W a distance of 113.83
feet to a 1/2-inch iron rod set for the point of tangency of said
curve;
	 
	 	27.	 	S 63 Degrees 06’52” W a distance of 220.08 feet to a 1/2-inch iron rod
set for the beginning of a curve to the left;
	 
	 	28.	 	a distance of 120.23 feet along the arc of said curve to the left
having a radius of 150.00 feet, a central angle of 45 Degrees 55’53”,
and a chord which bears S 40 Degrees 09’05” W a distance of 117.04
feet to a 1/2-inch iron rod set for the point of tangency of said
curve;
	 
	 	29.	 	S 17 Degrees 11’18” W a distance of 340.65 feet to a 1/2-inch iron rod
set for corner;
	 
	 	30.	 	N 74 Degrees 03’39” W a distance of 38.10 feet to a 1/2-inch iron rod
set for corner;

4

 

	 	 	 
	 	 	
May 13, 1997

Rev. July 14, 1999

Job Number 96-387

234.782 Acre Tract

(Tract No. 1)

Page 5 of 8)

	 	31.	 	N 74 Degrees 29’48” W a distance of 200.78 feet to a 1/2-inch iron rod
set for corner;
	 
	 	32.	 	N 16 Degrees 49’19” E a distance of 153.25 feet to a 1/2-inch iron rod
set for corner;
	 
	 	33.	 	N 76 Degrees 14’18” W a distance of 225.43 feet to a 1/2-inch iron rod
set for corner in the curving east line of the Missouri-Pacific
Railroad (100’ ROW);

THENCE northerly along said east line of the Missouri-Pacific Railroad the
following two (2) courses:

	 	1.	 	a distance of 208.58 feet along the arc of said curve to the left
having a radius of 3,854.87 feet, a central angle of 03 Degrees
06’00”, and a chord which bears N 04 Degrees 57’34” W a distance of
208.55 feet to a 1/2-inch iron pipe found for the end of the curve;
	 
	 	2.	 	N 04 Degrees 40’07” W a distance of 429.99 feet to a 1/2-inch iron rod
found for corner in the east line of MoPac Expressway North (Loop 1 -
ROW Varies);

THENCE northerly along said east line of the Missouri-Pacific Railroad the
following two (2) courses:

	 	1.	 	N 39 Degrees 32’15” E a distance of 524.06 feet to a 1/2-inch iron rod
set for the beginning of a curve to the right;
	 
	 	2.	 	a distance of 1,086.97 feet along the arc of said curve to the right
having a radius of 5,699.58 feet, a central angle of 10 Degrees
55’37”, and a chord which bears N 45 Degrees 01’43” E for a distance
of 1,085.33 feet to a 1/2-inch iron pipe found for the point of
compound curvature between said curve and another curve to the right;
	 
	 	3.	 	a distance of 1,409.03 feet along the arc of said curve to the right
having a radius of 7,404.44 feet, a central angle of 10 Degrees
54’11”, and a chord which bears N 55 Degrees 53’46” E a distance of
1,406.91 feet to a

5

 

	 	 	 
	 	 	
May 13, 1997

Rev. July 14, 1999

Job Number 96-387

234.782 Acre Tract

(Tract No. 1)

Page 6 of 8)

	 	 	 	1/2-inch iron rod set for the point of compound curvature between said
curve and another curve to the right;
	 
	 	4.	 	a distance of 263.26 feet along the arc of said curve to the right
having a radius of 2,261.83 feet, a central angle of 06 Degrees
40’08”, and a chord which bears N 64 Degrees 34’36” E a distance of
263.11 feet to a 1/2-inch iron pipe found for the point of compound
curvature between said curve and another curve to the right;
	 
	 	5.	 	a distance of 40.63 feet along the arc of said curve to the right
having a radius of 2,261.83 feet, a central angle of 01 Degrees
01’46”, and a chord which bears N 68 Degrees 18’48” E a distance of
40.63 feet to a concrete monument found for the northwest corner of
the herein described 234.782 acre tract, same being the southwest
corner of Lot 3, North Loop Business Park Section 1-A recorded in
Volume 85, Page 194C of the Plat Records of Travis County, Texas;

THENCE S 62 Degrees 17’37” E along the common line between said Lot 3 and the
herein described tract a distance of 633.00 feet to a 1/2-inch iron rod set for
corner;

THENCE S 27 Degrees 47’59” W a distance of 31.17 feet to a 1/2-inch iron rod set
for corner in the south line of that certain tract previously known as Gault
Lane which was vacated by City of Austin Ordinance dated November 7, 1997;

THENCE S 62 Degrees 14’35” E along said south line, same being the north line of
the herein described tract a distance of 771.41 feet to a 1/2-inch iron rod set
for corner in the curving west line of the aforementioned F.M. Highway No. 1325;

THENCE southerly along said west line of F.M. Highway No. 1325 following six (6)
courses;

	 	1.	 	a distance of 139.35 feet along the arc of said curve to the left
having a radius of 3,879.72 feet, a central angle of 02 Degrees
03’28”, and a chord which bears S 26 Degrees 59’52” W a distance of
139.34 feet to a 1/2-inch iron rod found for the point of tangency of
said curve;

6

 

	 	 	 
	 	 	
May 13, 1997

Rev. July 14, 1999

Job Number 96-387

234.782 Acre Tract

(Tract No. 1)

Page 7 of 8)

	 	2.	 	S 25 Degrees 29’09” W a distance of 1,263.91 feet to a 1/2-inch iron
rod found for the beginning of a curve to the left;
	 
	 	3.	 	a distance of 515.59 feet along the arc of said curve to the left
having a radius of 2,924.90 feet, a central angle of 10 Degrees
05’59”, and a chord which bears S 20 Degrees 29’12” W a distance of
514.92 feet to a 1/2-inch iron rod found for the point of tangency of
said curve;
	 
	 	4.	 	S 15 Degrees 24’56” W a distance of 733.08 feet to a 1/2-inch iron rod
set for corner;
	 
	 	5.	 	S 15 Degrees 24’09” W a distance of 1,796.67 feet to a 1/2-inch iron
rod set for corner;
	 
	 	6.	 	S 14 Degrees 59’57” W a distance of 792.34 feet to the POINT OF
BEGINNING of the herein described tract and containing 234.782 acres
of land.

7

 

	 	 	 
	 	 	
May 13, 1997

Rev. July 14, 1999

Job Number 96-387

234.782 Acre Tract

(Tract No. 1)

Page 8 of 8)

I HEREBY CERTIFY THAT THIS METES AND BOUNDS DESCRIPTION HAS PREPARED FROM A
SURVEY PERFORMED IN THE FIELD UNDER MY SUPERVISION AND IS TRUE AND CORRECT TO
THE BEST OF MY KNOWLEDGE.

	 	 	 
	

/s/ Steven R. McAngus

Steven R. McAngus, R.P.L.S. No. 3680	 	
[SEAL]

(The bearings shown herein are referenced to the Texas State Plane Coordinate
System, Central Zone (NAD 1927) based upon City of Austin Electric Department
Monument No. EUD-219.)

8

 

	 	 	 
	 	 	
September 15, 1999

Job Number 96-387

0.849 Acre Tract

(Tract No. 2)

FIELD NOTES

BEING 0.849 ACRES LOCATED IN THE JAMES ROGERS SURVEY NO. 19, ABSTRACT NO. 659 IN
TRAVIS COUNTY, TEXAS, AND MORE PARTICULARLY BEING A PORTION OF THAT CERTAIN
CALLED 104.69 ACRE TRACT CONVEYED TO INTERNATIONAL BUSINESS MACHINES CORPORATION
BY DEED RECORDED IN VOLUME 3269, PAGE 1477 OF THE DEED RECORDS OF TRAVIS COUNTY,
TEXAS; SAID 0.849 ACRES BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS
FOLLOWS:

BEGINNING at a 1/2-inch iron rod found at the intersection of the south
right-of-way line of Braker Lane (ROW varies) and the west lien of F.M. Highway
No. 1325 (Burnet Road — 120’ ROW), same being the northeast corner of the herein
described 0.849 acre tract;

THENCE S 15 Degrees 10’00” W along said west line of Burnet Road a distance of
103.90 feet to a 5/8-inch iron pipe found for the southeast corner of said
104.69 acre tract and the herein described tract, same also being the northeast
corner of that certain 0.597 acre tract conveyed to Gene A. Hileman by deed
recorded in Volume 6214, Page 2293 of the Deed Records of Travis County, Texas;

THENCE S 62 Degrees 16’36” W along the common line between said 0.597 acre tract
a distance of 169.55 feet to a 1/2-inch iron rod found for the northwest corner
of said 0.597 acre tract, same being in exterior ell corner of that certain 382
acre tract conveyed to the University of Texas by deed recorded in Volume 994,
Page 337 of the Deed Records of Travis County, Texas;

THENCE N 63 Degrees 55’20” W along the common line between said 382 acre tract
and the herein described tract a distance of 470.28 feet to a 1/2-inch iron rod
found for corner in the aforementioned south line of Braker Lane;

THENCE easterly along said south line of Braker Lane the following two (2)
courses:

	 	1.	 	S 76 Degrees 27’03 E a distance of 279.54 feet to a 1/2-inch iron rod
set for corner;

 

 

	 	 	 
	 	 	
September 15, 1999

Job Number 96-387

0.849 Acre Tract

(Tract No. 2)

	 	2.	 	S 69 Degrees 55’28” E a distance of 349.12 feet to the POINT OF
BEGINNING of the herein described tract and containing 0.849 acres of
land.

I HEREBY CERTIFY THAT THIS METES AND BOUNDS DESCRIPTION WAS PREPARED FROM A
SURVEY PERFORMED IN THE FIELD UNDER MY SUPERVISION AND IS TRUE AND CORRECT TO
THE BEST OF MY KNOWLEDGE.

	 	 	 
	 

/s/  Steven R. McAngus

Steven R. McAngus, R.P.L.S. No. 3680	 	
[SEAL]

(The bearings shown herein are referenced to the Texas State Plane Coordinate
System, Central Zone (NAD 1927) based upon City of Austin Electric Department
Monument No. EUD-219.)

2

 

EXHIBIT “C”

RULES AND REGULATIONS

	1.	 	Neither Tenant or its employees, agents, contractors, subtenants, assigns
or other invitees shall obstruct any road, driveway, sidewalk, doorway,
vestibule, hall, or stairway. They shall not park on Project driveways,
roads or the parking facilities (including the Parking Areas) of the
Project, unless expressly agreed upon in the Lease. There shall be no
overnight parking. Any improperly parked vehicle is subject to towing at
the expense of the owner of such vehicle.
	 
	 	 	The above shall park only in those areas designated by Landlord for
parking by Tenant and shall not park on any private streets contiguous to,
surrounding or in the vicinity of the Building without Landlord’s prior
written consent.
	 
	2.	 	No signs, advertisements or notices shall be painted or affixed on or to
any windows or doors or other exterior part of the Project (or be visible
from any public or common area) unless they are of such color, size and
style and in such places as shall be first approved in writing by
Landlord. Landlord, at Tenant’s sole cost and expense, shall install all
letters or numerals by or on doors in such Tenant’s Premises which letters
or numerals shall be in Building standard graphics. Except as expressly
provided under the Lease, no nails, hooks or screws shall be driven or
inserted in any part of the Building outside the Premises except by the
Building maintenance personnel nor shall any part of the Building be
defaced by Tenant. No curtains or other window treatments shall be placed
between the glass and the Building standard window treatments.
	 
	3.	 	Tenant shall not make noises, cause disturbances or vibrations, or use or
operate any electrical or electronic devices that emit sound or other
waves or disturbances or create odors, any of which may be unreasonably
offensive to or interrupt the operations of other tenants in the Project,
or that would interfere with the operation of any device, equipment or
radio or television broadcasting or reception from or within the Project
or elsewhere, and shall not bring or allow animals (including, without
limitation, dogs, cats, ferrets, birds, and reptiles) into the Project,
except for the assistance of the handicapped.
	 
	4.	 	Plumbing, fixtures and appliances shall be used only for the purposes for
which designed, and no sweepings, rubbish, rags or other unsuitable
material shall be thrown or placed therein. Damage resulting to any such

 

 

	 	 	fixtures or appliances from misuse by Tenant or Tenant’s agents, employees
or invitees shall be paid by Tenant and Landlord shall not in any case be
responsible therefor.
	 
	5.	 	Canvassing, distributing, door-to-door soliciting and peddling in the
Project is prohibited [except to the extent applicable law (including the
National Labor Relations Act) restricts such prohibition] without the
prior, written consent of Landlord. Tenant shall take all reasonable and
lawful steps, including providing notice to Landlord, of any known
violations. The designated location for any site picketing is the Gault
Lane entrance.
	 
	6.	 	Landlord reserves the right to exclude or expel from the Project any
individual who, in the sole judgment of Landlord, is intoxicated or under
the influence of or possesses liquor or drugs, or who possesses a firearm
or other instrument, device or item which Landlord determines in its sole
discretion, is a danger to others, or who threatens to perform or is
performing an unlawful act, or who shall in any manner do any act in
violation of these Rules.
	 
	7.	 	No portion of the Premises shall at any time be used or occupied as
sleeping or lodging quarters.
	 
	8.	 	Landlord will not be responsible for lost or stolen property, money or
jewelry from the Premises or the Project or public or common areas
regardless of whether or not such loss occurs when the area is locked
against entry.
	 
	9.	 	Landlord to furnish access to the then existing common areas of the
Project, which shall be open during prime business hours 7:00 a.m. to
7:00 p.m. During off-hours, Tenant will be provided access via alternate
methods. Each tenant to provide a knox box (as described below) and their
own locking systems at their entrance off of the common space. Corridor
doors, when not in use, shall be kept closed. A “knox box” is a device
which provides the fire department and other emergency services a method
for accessing the Premises if necessary due to an emergency or similar
situation.
	 
	10.	 	Tenant shall store all of its trash, refuse and waste materials within the
Premises or in such locations as Landlord may designate, and shall cause
the same to be regularly removed at Tenant’s expense. All trash, refuse
and waste materials shall be stored in adequate containers so as not to
constitute a health or fire hazard or a nuisance to occupants of and
invitees present on the Project, and otherwise shall comply with the Law.
No

2

 

	 	 	burning of trash, refuse and waste materials is allowed. Except for waste
receptacles authorized by Law, no material or refuse shall be placed or
stored on any portion of the Project within twenty feet of the edge of any
water course or body of water or any walkway.

	11.	 	To ensure orderly operation of the Building, no ice, mineral or other
water, towels, newspapers, etc. shall be delivered to the Project except
by persons appointed or approved by Landlord in writing, which approval
shall not be unreasonably withheld.
	 
	12.	 	Should Tenant require telegraphic, telephonic, annunciator or other
communication service, Landlord will direct the electrician where and how
wires are to be introduced and placed and none shall be introduced or
placed except as Landlord shall direct. Except as provided in this Lease,
electric current shall not be used for heating (except system reheats) or
nonstandard power requirements without Landlord’s prior written
permission.
	 
	13.	 	Nothing shall be swept or thrown into the corridors, halls, elevator
shafts, stairways, or other Common Areas.
	 
	14.	 	Except as expressly provided under this Lease, no machinery of any kind
shall be operated in the Premises or Project without the prior written
consent of the Landlord, nor shall Tenant use or keep in the Building any
flammable or explosive fluid or substance.
	 
	15.	 	No open storage of materials and products will be allowed unless agreed to
in writing by Landlord and only when in compliance with law and properly
screened from public view by buildings, plant material, earth forms or
other devices.
	 
	16.	 	Tenant or its employees, agents, contractors, subtenants, assigns or other
invitees are aware of any dangerous situation, or receives a threat of
harm to any persons or part of the Project, a representative of that party
shall, after notifying the appropriate authority, promptly notify Landlord
by telephone at 512-821-2365.
	 
	17.	 	All uses and occupancy of the Project shall comply with all Laws as set
forth under the terms and conditions of the Lease.
	 
	18.	 	No individual sewage disposal system shall be permitted on or in
connection with any operation in the Premises.

3

 

	19.	 	No individual wells for Tenant’s water supply shall be permitted on the
Project.
	 
	20.	 	With respect to work being performed by Tenant in the Premises requiring
the approval of Landlord, Tenant will, except as expressly provided under
the Lease, refer all contractors, contractors’ representatives and
installation technicians rendering any service to Landlord for Landlord’s
approval before the performance of any such services. Except as expressly
provided under the Lease, this provision shall apply to all work performed
in the Building and on the roof including, but not limited to,
installation of telephones, telegraph equipment, electrical devices and
attachments, doors, entranceways, and any and all installations of every
nature affecting floors, walls, woodwork, trim, windows, ceilings, roofs,
equipment and any other physical portion of the Building.
	 
	21.	 	Movement in or out of the Building of furniture or office equipment, or
dispatch or receipt by Tenant of any bulky material, merchandise or
materials which requires use of elevators, cranes or stairways, or
movement through the Building entrances or lobby shall be restricted to
such hours as Landlord shall reasonably designate. The method and routing
of such movements shall be in the manner approved by Landlord. Landlord
may prohibit any article, equipment or any other item from being brought
into the Building if Landlord has reasonable safety concerns. Such
movements shall be performed by persons reasonably approved by Landlord.
Tenant is to assume all risks as to the damage to articles moved and
injury to any person or property resulting from such movement, including
equipment, property and personnel of Landlord. In the event Landlord
assists in such movement, Landlord shall not be liable for acts of any
person engaged in, or any damage or loss to any of said property or
persons resulting from, any act in connection with such movement.
	 
	22.	 	Landlord shall have the right to approve the weight and position of safes
and other heavy equipment or items, which items shall in all cases, be
placed on supporting devices approved by Landlord for the purpose of
distributing floor loads. Any damage to the Building caused by the
installation or removal of any property of Tenant, or caused by Tenant’s
property while in the Building, shall be repaired at Tenant’s expense.
Tenant shall bear all costs incurred by Landlord or Tenant in determining
the feasibility or actual installation of any such heavy equipment.

4

 

	23.	 	Hazardous Materials.

	 	(a)	 	Any chemical/environmental permits, licenses, etc. that are required
by applicable law for the operations/activities conducted by each
Tenant are Tenant’s responsibility.
	 
	 	(b)	 	Any chemical activities conducted on site will be reviewed and
approved by the Landlord.
	 
	 	(c)	 	A copy of all approved environmental permits, etc. required by
Tenant, will be provided to the Landlord within ten (10) days of
Tenant’s receipt.
	 
	 	(d)	 	Tenant spills, regardless of size, are to be reported to the
Landlord immediately (within 4 hours).

	24.	 	Rules for Century Oaks Park.

	 	(a)	 	Landlord retains the right to close the park for the preparation and
activities for Landlord’s special events for a period not to exceed
seven (7) consecutive days.
	 
	 	(b)	 	Tenant’s employees, spouses, eligible dependents, and the like shall
abide by the park rules established by the Landlord. The following
rules are located on large signs in the Park.

		
	 	     Employees and guest are welcome (on a one to one
basis, unless otherwise approved by Landlord).
	 
	 	     No alcoholic beverages.
	 
	 	     No firearms or weapons.
	 
	 	     Absolutely no motor vehicles (including motorcycles
and bicycles) beyond the parking lot.
	 
	 	     Emergency phone (yellow) available at
clubhouse/restroom facility building.
	 
	 	     Report misuse of facilities to Landlord’s security.
	 
	 	     Fires restricted to Landlord’s cooking grills — All fires must be
extinguished.
	 
	 	     Place trash in waste receptacles.
	 
	 	     Reservations for the facilities are posted
Monday-Friday, or as deemed necessary.

	 	(c)	 	Landlord does not provide any type of insurance for use of the Park.
It is each participant’s responsibility to assure that he or she

5

 

	 	 	 	is in the proper health to perform the activities required of his or
her respective sport.
	 
	 	 	 	Landlord is not liable for injuries sustained at the Park. Each
participant acknowledges participation at their own risk.
	 
	 	(d)	 	Additional Park Facilities — Playground Equipment.

		
	 	     Jogging Trail (7/8 mile track)
	 
	 	     Picnic Area
	 
	 	     Restroom Area
	 
	 	     Exercise Area
	 
	 	     Shower/Lockers

		
	 	     (e) Reservations for Tennis, Basketball, Volleyball Courts, Softball,
and Soccer Fields may be reserved by calling 823-8803.

     FAILURE TO ABIDE BY THESE RULES COULD RESULT IN GIVING UP THE PRIVILEGE OF
USING CENTURY OAKS PARK, AS DEEMED APPROPRIATE BY LANDLORD.

     ALL PARTICIPANTS IN ANY RECREATIONAL ACTIVITY ARE REMINDED THAT THESE
FACILITIES ARE SUPPLIED FOR RECREATIONAL PURPOSES ONLY; PARTICIPANTS MUST
CONDUCT THEMSELVES ACCORDINGLY.

6

 

EXHIBIT “D”

CONDITION OF THE PREMISES AND TENANT IMPROVEMENTS

CONDITION OF THE PREMISES.

     Tenant acknowledges and agrees that it has inspected the Premises and
Tenant agrees to accept the Premises in its present condition, “AS IS” and “WITH
ALL FAULTS.” Landlord shall have no obligation to make any alterations,
additions or improvements of any nature to the Premises. TENANT ACKNOWLEDGES
THAT LANDLORD HAS NOT MADE NOR WILL MAKE ANY WARRANTIES TO TENANT WITH RESPECT
TO THE QUALITY OF CONSTRUCTION OF ANY LEASEHOLD IMPROVEMENTS OR TENANT FINISH
WITHIN THE PREMISES OR AS TO THE CONDITION OF THE PREMISES, WHETHER EXPRESS,
STATUTORY, IMPLIED OR OTHERWISE, AND THAT LANDLORD EXPRESSLY DISCLAIMS ANY
IMPLIED WARRANTY THAT THE PREMISES ARE OR WILL BE SUITABLE FOR TENANTS INTENDED
COMMERCIAL PURPOSES, EXCEPT AS EXPRESSLY PROVIDED IN THE LEASE. Landlord shall,
at its sole cost and expense, complete construction of the Building and the
Premises in accordance with the Base Building Specifications attached hereto as
Exhibit D-1.

ALLOWANCE

     Landlord shall provide Tenant with an allowance (the “Allowance”) of
$20.00 per square foot of Net Rentable Area ($266,980.00) for construction of
the improvements contemplated by the Plans (as defined below). Subject to a
credit for the Allowance, Tenant shall bear the entire cost [including labor,
material, equipment, all architectural and engineering fees incurred in
connection with the preparation of the Plans of any improvements to be installed
in the Premises in accordance with the Plans (the “Construction Costs”).

TENANT IMPROVEMENTS

	 	a.	 	(1) Tenant shall provide to Landlord final working drawings (the
“Plans”) of all improvements that Tenant desires to be installed in
the Premises and information regarding the contractor Tenant
proposes to use in constructing such improvements. Tenant’s proposed
contractor shall be subject to Landlord’s reasonable approval. Such
Plans shall include detailed specifications for the construction of
and materials to be used in such improvements.
	 
	 	 	 	(2) Tenant’s Plans shall be subject to Landlord’s approval, which
approval shall not be unreasonably withheld or conditioned;

 

 

	 	 	 	provided that (a) they comply with all applicable governmental laws,
codes, rules, and regulations, (b) the improvements depicted thereon
conform to the specifications, rules and regulations promulgated by
Landlord for the construction of tenant improvements and attached
hereto as EXHIBIT D-2, and (c) the work will not affect the use by
other occupants of the Building (and common areas) with respect to
the Building’s HVAC, electrical, mechanical, or plumbing systems.
Landlord shall have ten (10) business days following Tenant’s
delivery of the Plans to approve or disapprove such Plans. Failure
by Landlord to timely approve or disapprove such Plans shall be
deemed as Landlord’s approval of such Plans. Approval (or deemed
approval) by Landlord of the Plans shall not be a representation or
warranty of Landlord that the Plans are adequate for any use,
purpose, or condition, or that the Plans comply with any applicable
law or code.
	 
	 	 	 	(3) Any disapproval of Plans by Landlord shall be in writing and
shall specify the reasons for disapproval. Any Plans resubmitted by
Tenant shall address all of Landlord’s specified reasons for
disapproval. Landlord shall have five (5) business days following
receipt of any such resubmitted Plans to approve or disapprove such
Plans. Failure by Landlord to timely approve or disapprove such
resubmitted Plans shall be deemed as Landlord’s approval of such
Plans.
	 
	 	 	 	(4) Landlord and Tenant shall repeat the foregoing procedure until
approval of the Plans by Landlord.
	 
	 	b.	 	All design, construction and installation shall conform to
Landlord’s construction specifications and the requirements of
applicable building, plumbing and electrical codes and the
requirements of any authority having jurisdiction with respect to
such work.
	 
	 	c.	 	If Tenant requests materials or installations in addition to or
other than as shown on the approved Plans (a “Change”), Landlord’s
prior written permission shall be required. Each Change request
shall be set forth in a written notice delivered to Landlord,
specifying in detail the requested Change.
	 
	 	d.	 	Tenant’s approved contractor shall perform the construction of all
improvements in accordance with the approved Plans. Tenant shall

2

 

	 	 	 	pay for all of the Construction Costs, subject to payment by
Landlord to Tenant of the Allowance. Landlord shall pay to Tenant
the Allowance (less retainage) no later than ten (10) days after the
receipt by Landlord of written demand for same, such demand to be
delivered after Substantial Completion (as defined below) and such
demand to include lien releases from each party providing labor
and/or materials to the Premises if the total cost of such labor
and/or materials provided by such party exceeds $10,000.00. Landlord
may withhold ten percent (10%) of the Allowance amount as retainage,
All retainage shall be paid to Tenant upon the expiration of
thirty-one (31) days following Substantial Completion of all
improvements, provided that at the end of such 31-day period, no
mechanic’s, materialman’s, laborer’s or other similar liens in
connection with the improvements exist of record on any portion of
the Project.
	 
	 	e.	 	The term “Substantial Completion” shall mean that, in the opinion of
Tenant’s architect or space planner (the “Design Professional”), the
improvements have been completed substantially in accordance with
the Plans, subject to completion of minor punch list items. The
Design Professional shall provide a certificate to Landlord stating
the date of Substantial Completion prior to payment of the retainage
to Tenant.

3

 

EXHIBIT “D-1”

BASE BUILDING SPECIFICATIONS

	 	 	 
	STRUCTURAL	 	Freestanding steel joist and column design without any
load bearing walls, permitting maximum flexibility of the
space

	 	 	 	 	 
	BUILDING AREA	 	Rentable area ft(2)	 	179,516 ft(2)
	 	 	Usable area ft(2)	 	
154,091 ft(2)
	 	 	Add-on factor	 	
16.5%
	 
	 	 	 	 
	FLOOR AREA
	 	First floor rentable area ft(2)	 	
89,136 ft(2)
	 	 	First floor usable area ft(2)	 	
76,511 ft(2)
	 	 	Second floor rentable area ft(2)	 	
87,667 ft(2)
	 	 	Second floor usable area ft(2)	 	
75,251 ft(2)
	 
	 	 	 	 
	ELEVATORS
	 	Passenger	 	
1 with 2,500 lbs

capacity
	 	 	Freight	 	
1 with 10,000 lbs

capacity
	 
	 	 	 	 
	CEILING HEIGHT
	 	First floor to joist	 	
11’ 9”
	 	 	First floor to deck	 	
13’ 1”
	 	 	Second floor to joist	 	
16’ 3”
	 	 	Second floor to deck	 	
18’ 6”
	 
	 	 	 	 
	COLUMN SPACING
	 	First floor	 	
22’ 6” x 45’ 0”
	 	 	Second floor	 	
45’ 0”
	 
	 	 	 	 
	FLOOR TYPE AND LOAD
	 	First floor	 	
3,500 psi (concrete

slab on grade)
	 	 	Second floor	 	
200 psf
	 
	 	 	 	 

	 	 	 
	FLOOR FINISHES	 	
Existing concrete slab, broom clean. Finished surfaces to
be ready to receive carpet, ceramic tile, resilient tile,
wood parquet or stone flooring with additional preparation
by Tenant’s flooring contractor, if necessary.
	 	 	 
	ELECTRICAL SYSTEM	 	
The Building electrical power and distribution system is
installed in accordance with applicable building codes.
The Building is served by dual 12,470V feeds which are
stepped down by dual 3,200 amp transformers. The 480V
distribution system can provide 12 W/Rentable Square Feet
(“RSF”) to the Premises for Tenant’s lighting and general
(receptacle) power combined.

 

 

	 	 	 
	 	 	In the Base Building, 480V circuit breaker distribution
panels have been provided in the core electrical room on
each floor. The service to the Premises will originate
from these panels. Empty conduits have been provided where
feeders will need to cross-finished core areas to connect
the Premises to the core electrical rooms
	 
	 	 

	 	 	 	 	 
	FIBER OPTICS
	 	Southwestern Bell	 	
on-site SONET ring
	 	 	AT&T SONET ring	 	
on Burnet Road
	 	 	Time Warner	 	
on-site
	 	 	MCI/WorldCom	 	
within 1/8 mile
	 	 	E-Spire	 	
off northern boundary line
	 	 	Level 3	 	
on southern boundary line
	 	 	Metromedia Fiber Network	 	
on southern boundary line
	 	 	Qwest	 	
on southern boundary line
	 	 	X-O	 	
on southern boundary line

	 	 	 
	 	 	 
	CORE FINISHES	 	
Fire fighting equipment enclosures per code, drinking
fountains, janitor’s closets, electrical and mechanical
rooms, toilet rooms, fire exit enclosures and related
areas to be finished to base building standard.
	 	 	 
	 	 	
Specifically, the following will be completed
before the application of the Tenant Improvement
Allowance to Work Costs:
	 	 	 
	 	 	
A. Ladies’ and Men’s restroom complete, including one set
of men’s and women’s showers on the lobby level.
	 	 	 
	 	 	
B. Drinking fountains (4 per floor)
	 	 	 
	 	 	
C. Fire extinguishers throughout the common areas and
Premises per code.
	 	 	 
	 	 	
D. Exit signs throughout the common areas per code.
	 	 	 
	 	 	
E. Lobby-elevator doors finished.
	 	 	 
	 	 	
F. Core corridor doors finished in building standard
finishes.
	 	 	 
	 	 	
G. Stairwell doors finished.
	 	 	 
	 	 	
H. Card key access security system at all four building
entries.
	 	 	 
	 	 	
I. Common corridor walls to be framed, dry walled, taped,
sanded and finished with building standard

 

 

	 	 	 	 	 
	 	 	 	 	
finishes on the corridor side with drywall and tape
only on Tenant’s side.
	 
	 	 	 	 
	 	 	J	 	
Fire and Life Safety requirements per City and State
codes including fire detection and alarms throughout
the common areas.
	 
	 	 	 	 
	 	 	K	 	
Landscaping and parking lot to be installed in 2001.

	 	 	 
	TENANT SPACE

FINISHES	 	
All core walls will be dry walled only. Freestanding and
engaged columns to be exposed. Perimeter top and bottom
bulkheads to be dry walled only.
	 	 	 
	 	 	
Building perimeters will be fully finished with regard to
water proofing, caulking, glazing and metal finishing,
glass cleaning on exterior, metal touch-up and cleaning,
building standard interior windowsills to be dry-walled
only, and any other actions required to render the
perimeters to a Tenant-ready condition.
	 	 	 
	ROOF	 	
4-ply, 20-year-life built up roof installed in 1994 with a
live load rating of 100 psf. The roof provides ample space
for antennas, DX Units, GPS Systems, and satellite dishes.
	 	 	 
	PARKING	 	
Four parking spaces for every 1,000 square feet of
rentable space.
	 	 	 
	FIRE PROTECTION	 	
The building is fully sprinklered with continuous
monitoring of the riser pressure and flow alarms. Pull
stations are located throughout. All air handlers are
equipped with continuously monitored smoke detectors.
Three fully staffed City of Austin Fire and Rescue
Stations are located within three miles of The Domain.
	 	 	 
	HVAC SYSTEM	 	
1,246 tons of chilled-water air handler cooling capacity
adaptable to individual variable air volume control units.
The HVAC system consists of variable volume air units
designed to provide primary air at 55.8 Degrees F to the
Premises. The quantity of air provided to the Premises
shall be sufficient to provide cooling based on Tenant’s
lighting and equipment electrical load of not more than
3.5 watts/RSF, an occupant load based on a population
density of one person per 143 RSF, with inside design
conditions of 75.8 Degrees F Dry Bulb and 50% Relative
Humidity. Outside air has been supplied to the variable
air volume units based on the ASHRAE 62-1989, which
mandates 20 cfm of outside air per person. Tenant shall be
responsible for the design and installation of the

 

 

	 	 	 
	 	 	primary air ducts and the secondary air system within the
Premises, which consists of fan powered terminal units and
cold air valves (both shall now be referred to as terminal
units). The primary ducts stub to the Premises by Landlord
and shall be extended as needed to provide the secondary
air system requirements by Tenant. Heat shall be provided
to the Premises as required with electric heaters within
fan-powered terminals by Tenant
	 
	 	 
	WATER/WASTEWATER
	 	Services are provided by the City of Austin Water and
Waste Departments. The Domain’s two major supply lines are
gravity fed at 105 psig from a 35 million gallon storage
tank located three miles from the campus

 

 

EXHIBIT “D-2”

LANDLORD’S CONSTRUCTION SPECIFICATIONS

All Tenant work must comply with the following specifications:

DEMISING PARTITIONS

All demising partitions to extend from floor to structure above. Wall system
consists of metal studs at 16” on center maximum spacing with a maximum
deflection of L/360. Provide 5/8” gypsum board on each face, taped, floated, and
painted. Sound insulation batts to be installed in the wall cavity. This is the
typical default partition type, unless noted otherwise.

STANDARD PARTITIONS

Wall system extends to the ceiling; consists of 3-5/8”, 25 gage metal studs at
16” on center maximum with 5/8” gypsum board on each face, taped, floated, and
painted.

DOORS

1-3/4” thick, solid core wood doors by VT; solid select white birch, plain sawn,
all exposed surfaces; Finish #4P8 Mesa, or approved equal. Provide 3’-0” wide x
8’-0” high at tenant interior doors and 3’-6” wide x 8’-0” high at tenant entry
doors. Provide 20-minute rated at 1-hour construction.

FRAMES

1-1/2” thick Aluminum frames by RACO; color: clear anodized finish. 20-minute
rated at 1-hour construction.

HARDWARE

Provide Best Lock Corporation 35H Series heavy duty mortise lockset with 3H trim
design (NO substitutions) at all tenant entry doors. Provide lever type locksets
at all interior doors. All cylinders for aluminum-glass entry door hardware and
exit devices shall be BEST #1E cylinders (NO substitutions). All keyed locking
hardware shall be keyed into the Owner’s existing BEST grandmaster keyed systems
(NO substitutions). All locksets, latches, deadbolts, cylinders and cores shall
be US26D (626) satin chrome finish. All locksets, latchsets, deadbolts,
cylinders, and cores shall be BEST, in order to maintain complete lock and core
warranty, as well as owner’s overall BEST keying system continuity. All keyed
locking hardware shall be provided with temporary construction cores, for use
during the construction phase. Brass construction cores shall be used on all
exterior doors, and plastic construction cores on all interior doors. Owner
shall be responsible to install all permanent cores, and return all construction
cores to BEST. Hinges: 1-1/2 pair butts; stops and silencers, closers and smoke
seals required at rated assemblies.

 

 

CARPET

Manufacturer, construction, and style to be approved by landlord.

VINYL COMPOSITION TILE

12” x 12” x 1/8” gauge vinyl composition tile; Armstrong Imperial Texture,
Standard Excelon, or equal; color to be selected from manufacturer’s standard
range. Two-color pattern to be determined. In Workrooms, Breakrooms, Copy Rooms,
Tel/Com., and File Rooms only.

PAINT

Benjamin Moore; Regal AquaVelvet Finish; primer and 2-coats; color to be
selected from manufacturer’s standard range. At walls and gypsum board soffits.

RUBBER BASE

4” resilient thermoset vulcanized rubber base; straight at carpet, coved at
tile; Roppe or equal; color to be selected from manufacturer’s standard range.

WINDOW TREATMENT

Mini-blinds: Horizontal 1” Riviera mini-blinds at exterior windows by Levolor.
Typical at all windows, unless noted otherwise. Color: #34 Brushed Aluminum.

CEILING TILE

24” x 24” x3/4” square-edged tiles, Armstrong Cirrus, #532; square edge; color:
white.

CEILING GRID

15/16” exposed tee, 2’ x 2’ Prelude XL grid by Armstrong; color: white.

LIGHT SWITCHES

White Commercial specification grade designer series 120/277 volt, 20-amp rocker
switch. Hubbell #212x-WA or approved equal by the following: Arrow Hart,
Leviton, Pass & Seymour/Legrand, General Electric, and Bryant.

DIMMER SWITCHES

Lutron Nova T* thin profile slide dimmers. Lutron Nova Slide dimmers for zone
control in excess of 1500 watts.

WIRING DEVICES

White Commercial specification grade designer series wiring devices. Hubbell
#2152WA, #2162WA, #5661, #8410, #5235, #GF5252WA and #GF5352WA or approved equal
by the following: Arrow Hart, Leviton, Pass & Seymour/Legrand, General Electric,
and Bryant.

 

 

FLUSH POKE-THRU

Walker RC3 with four Category 5 communications jacks and duplex receptacle.

FLUORESCENT LIGHTING

In Ceiling:

2’ x 2’: Lithonia 2PM3N GD 2CF40 9LD 277 MOTRN APB, recessed, 2-twin tube CF40
lamps, 9 cell, 3” deep parabolic louver, with combination air supply/return and
heat removal.

2’ x 4’: Lithonia 2PM3N GD 332 18 LD 277 MOTRN APB, recessed, 3-F32 T8 lamps, 18
cell, 3” deep parabolic louver, with combination air supply/return and heat
removal.

First Floor Exposed Structure:

Corelight NB WM 3TB; 8 foot length, 3 T8 lamps, direct/indirect, aircraft cable
mounted.

Second Floor Exposed Structure:

Lithonia THR-250M, High Bay, 250 W metal halide, Acrylic refractor with 15%
uplight and/or Corelight NB WM 3TB; 8 foot length, 3 T8 lamps, direct/indirect,
aircraft cable mounted.

LAMPS

2’ Twin Tubes: GE F40/30BX/SPX35/RS

4’ Tubes: GE F32T8/SPX35

BALLASTS

2 lamp (Twin Tube): Motorola rapid start T8 high performance electronic ballast
(10% THD)).

2 lamp: Motorola rapid start T8 high performance electronic ballast (10% THD))

3 lamp: Motorola rapid start T8 high performance electronic ballast (10% THD)

Provide Emergency Fixtures and Exit Signs with the following 90-minute Battery
packs:

EMERGENCY LIGHTING

2x2 Fixtures: Lithonia #EL5 w/ 500W lumen output.

2x4 Fixtures: Lithonia #EL14 w/ 1400W lumen output.

Downlights: Lithonia #ELR w/ remote test switch.

EXIT SIGNS

Lithonia Signature Series LES1R (single face) LES2R (double face), with LED’s,
brushed aluminum stencil face, cast aluminum housing and mounting required.
Provide number of faces and arrows as indicated on the plans.

3

 

FIRE ALARM SYSTEM

Notifier Fire System AFP-200 Analog Intelligent Fire Alarm Control Panel (No
Substitutions).

FIRE DETECTION AND INITIATION DEVICES

Smoke Detectors: System Sensor Plug-in 200 series addressable-analog smoke
detectors. Photoelectric and ionization.

Duct Detectors: System Sensor Intelligent (addressable) duct smoke detectors
Model DH200RP with TRS451 with remote switch, remote red LED, and sampling tube
as required for width of duct.

Manual Stations: Notifier NBG-12 Series with keylock reset, single pole, single
throw, dual action station with addressable contact monitor.

Heat Detectors: System Sensor Model 5251 RP thermal detector with addressable
contact monitor.

FIRE ALARM ANNUNCIATION DEVICES

System Sensor SpectrAlert horn/strobe Model P2475W with red “Fire” on front,
horizontal wall mount.

TENANT ELECTRIC METERS

Square D Power Meter PM650 with display PMD32.

PANELS

Square D I-Line for distribution panels. Square D NQOB for branch circuits.

TRANSFORMERS

Square D K-rated (K-13).

FUSES

Manfactured by Bussmann.

VAV TERMINAL UNITS AND ZONING

Interior Zones: Nailor Model 35SSTLP series fan powered terminal with Johnson
Controls variable air volume controller and actuator, and fused or non-fused
disconnects where required by NEC. Terminal unit’s will be connected to building
DDC system.

Exterior Zones: Nailer Model 35SSTLP series fan powered terminal with Johnson
Controls variable air volume controller and actuator, 277 Volt electric heating
coil with 2-stage, single point electrical connection, and fused or non-fused
disconnects where required by NEC. Connect terminal unit to building DDC system.

4

 

The typical interior zone size will not exceed 1,600 square feet. The typical
exterior zone size will not exceed 1,200 square feet.

THERMOSTATS

Johnson Controls temperature sensor with override “ON” and “CANCEL” switches,
setpoint adjustment thumbwheel, and communications jack, for use with the base
building DDC system.

AIR DEVICES

Slot Diffusers: Titus model N-1 flat black slot diffuser. Provide gypsum board
blank-off strip between slot diffusers painted flat black.

Supply Diffusers: Titus model PCS, off-white, perforated face supply diffuser.
Return Grilles: Titus model PAR, off-white, perforated face return grille.

SUPPLY DUCTWORK

All primary supply ductwork shall be internally lined, double wall sheetmetal.
All secondary ductwork downstream of VAV boxes shall be sheetmetal. Provide
rectangular ductwork at first floor tenant spaces and round ductwork at second
floor tenant spaces.

RETURN DUCTWORK

All return air and transfer air ductwork shall be internally lined sheetmetal.
Provide rectangular ductwork at first floor tenant spaces and round ductwork at
second floor tenant spaces.

SPRINKLER

Concealed and/or pendant type as required for areas with or without ceilings.

FIRE EXTINGUISHERS

Badger 5# multi-purpose with mounting bracket.

5

 

EXHIBIT “E”

PARKING

     Tenant shall be permitted to use the parking area (including parking
garage, if any), associated with the Building during the primary Lease Term as
follows: unreserved parking spaces equal to four (4) parking spaces per each
1,000 square feet of Net Rentable Area of the Premises subject to such
reasonable terms, conditions and regulations as are from time to time applicable
to patrons of said parking area for spaces similarly situated within said
parking area; In the event the parking spaces become unavailable to Tenant
during any portion of the term of this Lease for any reason, except Tenant’s
inability to utilize said parking spaces, then Landlord shall make available to
Tenant sufficient parking spaces to meet Tenant’s parking requirements set forth
in this Exhibit E within reasonable proximity of the Building containing the
Premises.

 

 

EXHIBIT “F”

COMPONENT CHARGES

     In addition to the rental payable by Tenant under this Lease, Tenant
shall pay additional rent (also referred to herein as “Component Charges”)
determined as follows:

     1.     For the purposes of this Exhibit, the term “Component Charges” shall
mean any and all costs, expenses and disbursements of every kind and character
(subject to the limitations set forth below) which Landlord shall incur, pay or
become obligated to pay in connection with the operation, insurance,
maintenance, repair, replacement, and security of the Project, or any portion
thereof, determined in accordance with generally accepted cash basis accounting
principles consistently applied, including but not limited to the following:

     a.     Wages, salaries and other benefits of all employees of Landlord
and/or managing agent who are engaged in the operation, repair, maintenance or
security of the Project (including, without limitation, payroll, unemployment,
social security and other taxes, insurance, vacation, Holiday, sick pay, and
other fringe benefits, but excluding profit sharing benefits, if any) and
reasonable and customary management fees of any managing agent of the Project.

     b.     All supplies, equipment and materials used in the operation,
maintenance, repair or security of all or any portion of the Project.

     c.     Cost of all capital improvements and/or replacements made to the
Project which although capital in nature can reasonably be expected to reduce
the normal operating costs of the Project, as well as all capital improvements
made in order to comply with any statutes, rules, regulations, or directives
hereafter promulgated by any governmental authority relating to energy,
conservation, public safety or security, as amortized (with interest on the
unamortized balance at the prime rate of interest as stated in the Wall Street
Journal [on the date such capital improvement is completed] plus 2%) on a
straight-line basis over the useful life of such improvements by Landlord for
federal income tax purposes.

     d.     Cost of all utilities, other than the cost of excess electricity (or
individually metered electricity) supplied to tenants of the Project which is
actually reimbursed to Landlord by such tenants.

     e.     Cost of all maintenance and service agreements on equipment,
including alarm service, window cleaning and elevator maintenance.

 

 

     f.     Cost of casualty, rental and liability insurance applicable to the
Project and Landlord’s personal property used in connection therewith.

     g.     All taxes and assessments and governmental charges, whether federal,
state, county or municipal, and whether they be by taxing districts or
authorities presently taxing or by others, subsequently created or otherwise,
and any other taxes and assessments attributable to the Project, or any portion
thereof, or its operations, excluding, however, (i) income, franchise, transfer,
inheritance, recordation, gains, net profits, gift, intangible, or capital stock
taxes, unless such taxes are levied or assessed against Landlord in lieu of, or
as a substitute for, any other which that would otherwise constitute a real
estate or real property tax, (ii) any personal property tax assessed against
property owned, used or leased by Landlord (unless and to the extent such
personal property is used in the operation of the Project) or any other tenant
or occupant of the Building or the Project, (iii) interest or penalties on any
late payment of taxes and assessments so long as Tenant is not in default
hereunder with respect to payments of rent or (iv) any portion of any assessment
payable over time other than the minimum installment actually paid during such
year.

     h.     Cost of repairs and maintenance of the Project, or any portion
thereof.

     i.     Cost of service or maintenance contracts with independent
contractors for the operation, maintenance, repair or security of the Project,
or any portion thereof.

     j.     Prorata cost incurred by reason of any recorded easements or
restrictions which affect all or any portion of the Project and any costs
incurred in the operation, maintenance, insurance, repair and security of the
common or public areas of the business park or planned development of which the
Project, or any portion thereof, is a part or included within.

     k.     If the Building is less than ninety-five percent (95%) occupied for
all or a portion of the calendar year, those costs and expenses of the type
included in the foregoing provisions of this Paragraph 1 which, in Landlord’s
reasonable judgment, would vary based on the occupancy of the Building and would
have been incurred if the Building had been ninety-five percent (95%) occupied.

There are specifically excluded from the definition of the term “Basic Cost” (i)
expenses for capital improvements made to the Project other than (A) capital
improvements described in subparagraph (1)(c) above and (B) items which, though
capital for accounting purposes, are properly considered maintenance and repair
items (such as painting of common areas, replacement of carpet in elevator
lobbies, and the like); (ii) electricity costs paid by Tenant pursuant to
Paragraph 4 of this Lease; (iii) expenses for repair, replacements and general
maintenance paid by proceeds of insurance or by Tenant or other third parties,
and alterations attributable solely to tenants of the Building other

2

 

than Tenant; (iv) depreciation of the Project; (v) leasing commissions; (vi)
legal expenses (other than those legal expenses, if any, which are incurred to
contest real estate taxes or assessments); (vii) income taxes imposed on the
income of Landlord from the operation of the Project; and (viii) those costs, if
any, for which Landlord is entitled to direct reimbursement from any tenant, but
only to the extent that Landlord is so entitled; (ix) expenses incurred by
Landlord to prepare, renovate, repaint, redecorate or perform any other work in
any space leased to an existing tenant or prospective tenant of the Building;
(x) expenses incurred by Landlord to lease space to new tenants or to retain
existing tenants including leasing commissions, advertising and promotional
expenditures; (xi) expenses incurred by Landlord to resolve disputes, enforce or
negotiate lease terms with prospective or existing tenants or in connection with
any financing, sale or syndication of the Building; (xii) interest, principal,
points and fees, amortization or other costs associated with any debt (except as
expressly provided herein) and all costs of refinancing or transfer or
syndication of the Building or Project and rent payable under any lease to which
this Lease is subject and all costs and expenses associated with any such debt
or lease and any ground lease rent lease (except to the extent that such
payments are for real estate taxes or insurance premiums), irrespective of
whether this Lease is subject or subordinate thereto; (xiii) expenses for the
replacement of any item covered under warranty to the extent money is recovered
under such warranty; (xiv) costs of repair necessitated by Landlord’s negligence
or willful misconduct, or of correcting any latent defects or original design
defects in the Building or Project; (xv) expenses for any item or service not
provided, offered or available to Tenant but exclusively to certain other
tenants in the Building or Project; (xvi) salaries of employees above the grade
of on-site manager, and of employees to the extent such employees’ time is not
spent directly in the operation of the Project; (xvii) Landlord’s general
corporate overhead and administrative expenses, as the case may be, which
expenses would not be chargeable to operating expenses of the Building in
accordance with generally accepted accounting principles, consistently applied;
(xviii) expenses incurred by Landlord in order to comply with all present (i.e.
effective as of the Lease Date) laws, ordinances, requirements, orders,
directives, rules and regulations of federal, state, county and city governments
and of all other governmental authorities having or claiming jurisdiction over
the Building and Project, including without limitation the Americans with
Disabilities Act of 1990; (xix) fees paid to affiliates of Landlord to the
extent that such fees exceed the customary amount charged for the service
provided; (xx) the operating expenses incurred by Landlord relative to retail
stores, or any specialty service in the Building or the Project.

     2.     Exhibit F-1 describes the estimated Component Charges for calendar
year 2001.

     3.     In addition to the Adjusted Rental, Tenant shall, with respect to
the entire Lease Term (and any renewal or extension thereof) pay as additional
rent an amount equal to the actual Component Charges applicable to the Premises
for each calendar year which is in excess of the total amount of estimated
Component Charges and the Additional

3

 

Payments (hereinafter defined) paid by Tenant as part of the Adjusted Rental
payable with respect to such calendar year (the “Excess”). Landlord, at its
option, may collect such additional rent in a lump sum, to be due and payable
within fifteen (15) days after Landlord furnishes to Tenant a statement of
Component Charges for the previous first calendar year, and beginning with the
first full calendar year following the Commencement Date, and during each
calendar year thereafter, Landlord shall make a good faith estimate of the
Excess for each such calendar year and, upon 30 days notice to Tenant, may
require a monthly payment (payable in advance on the first day of each month) of
such additional rent equal to one-twelfth (1/12) of such estimated Excess. Any
amounts paid based on such an estimate (the “Additional Payments”) shall be
subject to adjustment pursuant to Paragraphs 4 and 5 of this Exhibit “F” when
the actual Component Charges are available for such calendar year.

     4.     After the close of each quarter, Landlord may, but shall be under no
obligation to, send Tenant a statement, which identifies the Component Charges
for specific utilities actually consumed by Tenant during the prior three (3)
months and which compares the monthly estimated payments made by Tenant for such
utilities with the actual consumption by Tenant of such utilities. If the actual
consumption exceeds the estimated payments therefor, Tenant shall pay Landlord
as additional Rent, the excess amount due Landlord within thirty (30) days after
receipt of such quarterly statement. If the estimated payments for utilities
made by Tenant exceed the actual consumption thereof, Tenant shall receive a
credit of such excess amount against the next monthly payment of Adjusted Rent
due and owing hereunder, except at the end of the Lease term, in which event
Landlord shall refund such excess amount to Tenant within 30 days.

     5.     Within 90 days after the end of each calendar year, Landlord shall
deliver to Tenant an annual statement comparing the estimated Component Charges
paid by Tenant during the previous calendar year with Landlord’s actual costs
therefor during such period. If the actual costs for Component Charges exceed
the estimated payments therefor, Tenant shall pay Landlord as additional Rent,
the excess amount due Landlord within thirty (30) days after receipt of such
annual statement. If the estimated payments for Component Charges made by Tenant
exceed the actual costs therefor, Tenant shall receive a credit of such excess
amount against the next monthly payment of Adjusted Rent due and owing
hereunder, except at the end of the Lease term, in which event Landlord shall
refund such excess amount to Tenant within 30 days.

     6.     In the event a property owner’s association (the “POA”) is created
for the Project (or any portion thereof) and the Building is subject to the POA,
Tenant agrees to pay its proportionate share of all reasonable fees and
assessments (the “POA Fees”) assessed against the Building by the POA so long as
the POA Fees are for services provided by the POA which would otherwise be
provided by the Landlord and paid by Tenant as Component Charges; however, there
shall not be a duplication of charges by Landlord under this Lease and under the
POA. All provisions in the Lease applicable to

4

 

Component Charges shall be applicable to the POA including the provisions of
this Exhibit F. The POA Fees and Tenant’s proportionate share thereof shall be
allocable to the Building based on the Net Rentable Area of the Building as
compared to the Net Rentable Area of all buildings affected by the POA and the
portion allocated to the Building will be allocated to the Premises on the same
basis that Component Charges are allocated to the Premises.

     7.     Tenant, at its sole cost and expense except as provided below, shall
have the right (to be exercised by giving notice to Landlord within one-hundred
eighty (180) days after receipt of the statement of the actual Component Charges
for such previous calendar year) to audit and/or inspect Landlord’s books and
records pertaining only to items affecting the Component Charges for such
preceding calendar year; provided that (1) such audit and/or inspection must
also be commenced and concluded within 90 days after Tenant’s notice to inspect
and Landlord makes such books and records available to Tenant for review,
inspection and copying, and (2) such audit and/or inspection may be conducted
only by an employee of Tenant or by an independent, certified public accountant,
who are not engaged on a contingent fee basis. Tenant, on behalf of itself, its
agents and employees, agrees to keep the nature and content of all documents
confidential (except for Tenant’s attorneys, accountants, lenders, financiers
and those parties to which Tenant has a legal duty to disclose such
information), and Tenant shall return all copies of such books and records to
Landlord at the conclusion of the inspection, but Tenant may retain a copy in
its files. Tenant must furnish to Landlord a copy of the audit or inspection
report upon completion of the audit or inspection. No such audit shall relieve
Tenant of its obligation to pay any Adjusted Rental or any Excess. Upon
completion of the audit, if the sum of the estimated Component Charges and
Additional Payments paid by Tenant to Landlord with respect to the year covered
by such audit is in excess of Tenant’s Share of the actual Component Charges for
such year, then Landlord shall refund any such overpayment to Tenant within 30
days after completion of such audit. If the sum of the estimated Component
Charges and Additional Payments paid by Tenant to Landlord with respect to the
year covered by such audit is less than Tenant’s Share of the actual Component
Charges for such year, Tenant hereby agrees to pay Landlord within thirty (30)
days of the completion of the audit an amount equal to such excess. If such
audit or inspection shows that Landlord overstated Component Charges by more
than 5%, then Landlord shall pay for the cost of the audit or inspection if such
audit and/or inspection was conducted only by an independent, certified public
accountant practicing for an accounting firm of national prominence, who was not
engaged on a contingent fee basis (a “CPA Auditor”). If such audit and/or
inspection was not conducted by a CPA Auditor, then Landlord may require that a
CPA Auditor perform such audit. If required by Landlord and if such CPA Auditor
confirms that the estimated Component Charges paid by Tenant to Landlord with
respect to the year covered by such audit exceeds the actual Excess Component
Charges for such year by more than five percent (5%), then Landlord shall
reimburse Tenant for the reasonable costs and expenses incurred by Tenant in
such audit performed by a CPA Auditor.

5

 

     8.     Notwithstanding anything to the contrary in this Lease, since the
Project consists of multiple buildings, certain Component Charges may pertain to
a particular building(s) and other Component Charges to the Project as a whole.
Any such costs applicable to any particular building within the Project shall be
charged to the building in question whose tenants shall be responsible for
payment of their respective proportionate shares in the pertinent building and
other such costs applicable to the Project shall be equitably charged to each
building in the Project (including the Building) with the tenants in each such
building being responsible for paying their respective proportionate shares in
such building of such costs to the extent required under the applicable leases.
Landlord shall good faith allocate such costs to the buildings (including the
Building) in a commercially reasonable and non-discriminatory manner.

6

 

EXHIBIT “F-1”

ESTIMATED COMPONENT CHARGES FOR CALENDAR YEAR 2001

	 	 	 	 	 
	COMMON AREA
	 	$2.23 / RSF
	MAINTENANCE
	 	 	 	 
	PROPERTY TAXES
	 	$0.88 / RSF
	INSURANCE
	 	$0.11 / RSF
	UTILITIES
	 	$2.38 / RSF
	 
	 	 	
	 

     Estimated based on 6 Watts / RSF of power usage.

	 	 	 	 	 
	JANITORIAL
	 	$0.96 / RSF
	PROPERTY MANAGEMENT FEE
	 	 	 	 
	 
	 	 	
	 

     This fee will be based on a three percent (3%) of the total gross rents for
the Building.

	 	 	 	 	 
	ESTIMATED TOTAL
	 	$7.37 / RSF

 

 

EXHIBIT “G”

SPECIAL PROVISIONS

1.     CUP SERVICES. The CUP Utilities (steam, compressed air and chilled water)
provided to the Premises by Landlord under this Lease are generated at the
Central Utility Plant (the “CUP”) located on the Project. Tenant acknowledges
that Landlord is currently negotiating with Austin Energy regarding the purchase
of the CUP by Austin Energy. In the event such sale is consummated, Tenant
shall, at Landlord’s option, enter into a direct contract with Austin Energy for
provision of the CUP Utilities to the Premises, provided the costs charge to
Tenant for CUP Utilities is competitive and at fair market rates, whereupon
Landlord’s obligations under this Lease with respect to providing the CUP
Utilities to the Premises shall terminate.

2.     ACCESS TO PREMISES. Tenant shall have access on a 24/7 basis to the
Premises.

3.     VACUUM PUMP. Tenant shall have the right, at its sole cost, to install a
ten (10) horsepower vacuum pump to serve the Premises. The location of the pump
shall be mutually agreed to by Landlord and Tenant.

4.     EXTENSION OPTION. Subject to Subsections B and C below, Tenant may at its
option extend the Term of this Lease for the entire Premises for one (1) period
of five (5) years (the “Renewal Term”) upon the same terms contained in this
Lease, [excluding the provisions of Exhibit D) of the Lease and except for the
amount of Basic Rent payable during the Renewal Term]. Tenant shall have no
additional extension option.

	 	A.	 	The Base Rent during the Renewal Term shall be the then prevailing
Market Rate (as defined in Paragraph 38 of the Lease).
	 
	 	B.	 	To exercise its option, Tenant must deliver an initial non-binding
notice to Landlord not less than two hundred seventy (270) days
prior to the proposed commencement of the applicable Renewal Term.
At some point between three hundred (300) and one hundred fifty
(150) days prior to the proposed commencement of the applicable
Renewal Term, Landlord shall calculate and inform Tenant of the
Market Rate of the Base Rent for the Premises. Tenant will have
fifteen (15) days following receipt of such proposed Market Rate
from Landlord to notify Landlord that Tenant desires to follow the
provisions of paragraph 38 of this Lease for determining the
Market Rate. Failure by Tenant to timely respond shall be deemed
as Tenant’s notice that it accepts Landlord’s determination of the

 

 

	 	 	 	Market Rate. If Tenant fails to give its initial non-binding
notice timely, Tenant will be deemed to have waived its option to
extend.
	 
	 	C.	 	Tenant’s option to extend this Lease is subject to the conditions
that: (i) on the date that Tenant delivers its final binding
notice exercising its option to extend, Tenant is not in default
under this Lease after the expiration of any applicable notice and
cure periods, and (ii) Tenant shall not have assigned this Lease,
or sublet any portion of the Premises.

 

 

EXHIBIT H

OVERALL STANDARD CLEANING SPECIFICATIONS AND FREQUENCIES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	CONFERENCE	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	BREAK	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	VENDING	 	 	 	 	 	 	 	 	 	 	 	 	 	RAISED	 	 	 	 	 	 	 	 
	 	 	 	 	CLASSROOMS	 	OFFICE AREAS	 	RESTROOMS	 	HALLWAYS	 	FLOOR AREAS	 	STAIRWELLS	 	ENTRANCES
	 	 	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	FLOORS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	clean up spills
	 	OR	 	OR	 	OR	 	OR	 	OR	 	OR	 	 	D	 
	 	vacuum/sweep/mop
	 	 	D	 	 	BI-W	 	 	2D	 	 	 	D	 	 	 	W	 	 	 	3W	 	 	 	 	 
	 	spot clean carpets
	 	 	D	 	 	 	Q	 	 	 	 	 	 	 	D	 	 	 	 	 	 	 	3W	 	 	 	 	 
	 	spray buff vinyl
	 	 	W	 	 	 	Q	 	 	 	 	 	 	 	M	 	 	 	 	 	 	 	M	 	 	 	 	 
	 	shampoo carpets
	 	 	Q	 	 	 	A	 	 	 	 	 	 	 	Q	 	 	 	 	 	 	 	Q	 	 	 	 	 
	 	machine scrub/recondition vinyl
	 	 	Q	 	 	 	A	 	 	 	Q	 	 	 	Q	 	 	 	 	 	 	 	Q	 	 	 	 	 
	 	strip recondition vinyl
	 	 	 	 	 	 	 	 	 	 	A	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	entrance/walks within 30 feet of building
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	D	 
	 	clean walk-off mats
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	W	 
	TRASH PICKUP
	 	 	D	 	 	 	D	 	 	 	2D	 	 	 	D	 	 	 	D	 	 	 	D	 	 	 	D	 
	FURNITURE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	clean tabletops/countertop
	 	 	D	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	spot clean
	 	 	D	 	 	 	Q	 	 	 	 	 	 	 	 	 	 	 	M	 	 	 	 	 	 	 	 	 
	 	brush/vacuum fabric chairs
	 	 	 	 	 	 	M	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	DUST
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	vert./horiz. surfaces
	 	 	W	 	 	BI-W	 	 	 	 	 	 	W	 	 	 	W	 	 	 	3W	 	 	 	 	 
	 	dust blinds
	 	 	M	 	 	 	M	 	 	 	 	 	 	 	M	 	 	 	M	 	 	 	 	 	 	 	 	 
	 	dust/clean air vents
	 	 	Q	 	 	 	A	 	 	 	Q	 	 	 	A	 	 	 	A	 	 	 	Q	 	 	 	 	 

Cleaners don’t clean computers, printers, video displays or cabling.

Cleaners should not move anything on desktop, file cabinet or credenzas.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	MISCELLANEOUS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	spot clean walls/partitions
doors/door frames
	 	 	W	 	 	BI-W	 	 	2D	 	 	 	W	 	 	 	M	 	 	 	M	 
	 	clean marker boards
	 	OR	 	OR	 	OR	 	OR	 	OR	 	 	 	 
	 	restock paper towels
	 	 	D	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	clean glass partitions/ windows/doors
	 	 	W	 	 	 	 	 	 	 	 	 	 	 	W	 	 	 	 	 	 	 	W	 
	police trash within 30 feet of
building
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	D	 
	clean/disinfect drinking fountain,
restock cups
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	D	 	 	 	 	 	 	 	 	 
	RESTROOMS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	clean/disinfect sanitary napkin units
	 	 	 	 	 	 	 	 	 	 	2D	 	 	 	 	 	 	 	 	 	 	 	 	 
	clean/disinfect lavatories
	 	 	 	 	 	 	 	 	 	 	2D	 	 	 	 	 	 	 	 	 	 	 	 	 
	clean/disinfect commodes & urinals
	 	 	 	 	 	 	 	 	 	 	2D	 	 	 	 	 	 	 	 	 	 	 	 	 
	damp wipe all ledges
	 	 	 	 	 	 	 	 	 	 	2D	 	 	 	 	 	 	 	 	 	 	 	 	 
	damp wipe/disinfect sides back & door
in toilet stall
	 	 	 	 	 	 	 	 	 	 	2D	 	 	 	 	 	 	 	 	 	 	 	 	 
	clean mirrors, soap dispensers,
fixtures, piping
	 	 	 	 	 	 	 	 	 	 	2D	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	restock materials
	 	 	 	 	 	 	 	 	 	 	2D	 	 	 	 	 	 	 	 	 	 	 	 	 
	mop/disinfect floors & baseboards
	 	 	 	 	 	 	 	 	 	 	2D	 	 	 	 	 	 	 	 	 	 	 	 	 
	dust locker, stall tops, shelving,
counter tops
	 	 	 	 	 	 	 	 	 	 	2D	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	wash/disinfect shower stalls
	 	 	 	 	 	 	 	 	 	 	2D	 	 	 	 	 	 	 	 	 	 	 	 	 
	wash walls & ceiling (if concrete
type ceiling)
	 	 	 	 	 	 	 	 	 	 	Q	 	 	 	 	 	 	 	 	 	 	 	 	 

D = daily   2D = twice daily   W = weekly   BI-W = every other week

Q = quarterly   A = annually   OR = on requestexv10w27

 

Exhibit 10.27

	 	 	 
		 	
REGIONAL FOCUS • GLOBAL SCALE

CP SHIPS TO ACQUIRE ITALIA DI NAVIGAZIONE

LONDON, UK (30 May 2002) CP Ships Limited has reached agreement with d’Amico
Società di Navigazione S.p.A. to acquire all issued and outstanding shares of
Italian container shipping company Italia di Navigazione for US$ 40 million in
cash.

The transaction, which is subject to regulatory approval and certain other
closing conditions, is expected to close in the third quarter.

Italia operates its principal container services between the Mediterranean,
West Coast North America and Central and South America. It carried about
180,000 teus in 2001.

Formerly owned by the Italian government, Italia was privatized when acquired
by d’Amico in 1998. Italia will remain headquartered in Genoa, Italy, where CP
Ships already has a substantial presence.

“The purchase of Italia is the continuation of a key element of CP Ships’
overall strategy of making acquisitions to strengthen our regional position,
create new opportunities for growth and build trade lane economies of scale, “
said CP Ships’ CEO Ray Miles.

“It has been a decision that we have made to guarantee the future of the
company,” said Cesare d’Amico. “Italia has been strengthened and is now ready
for the consolidation process in the container trades. It will become part of
a group well established in the American market and will be able to achieve
greater economies of scale. The brand will be maintained, as well as the
obligations towards the personnel.” He added “d’Amico can now concentrate on
its growing bulk and product carrier shipping activities in which it is
investing heavily. It will also focus on expanding its Intra-Mediterranean
feeder services and on entry into the short-sea trades.”

The acquisition includes:

	 	•	 	Italia brand and logo
	 	•	 	Services in four container shipping trade lanes:

	 	–	 	Mediterranean-West Coast North America
	 	–	 	Mediterranean-Central and South America
	 	–	 	West Coast North America-West Coast Central and South America
	 	–	 	Intra-Central and South America

	 	 	 	Including the former d’Amico container services already merged with Italia
	 
	 	•	 	Charter of 11 containerships with capacity between 1000 and 2500 teu
	 	•	 	Mainly leased container fleet of about 40,000 teu
	 	•	 	Genoa headquarters and staff, including employment
guarantees given by d’Amico to the Italian government
	 	•	 	Owned agency operations in Italy, Spain, Canada and
Venezuela

1/4

 

“The strong Italia brand will complement CP Ships’ existing brand strategy.
Italy has grown to be one of CP Ships’ main European markets and we will be
able to strengthen our presence in this key region by using Italia as a
platform for further growth,” commented Frank Halliwell, CP Ships’ COO. “We
look forward to benefiting from Italia’s experience and expanding the service
options we offer our Mediterranean customers.”

CP Ships and Italia already cooperate in four services and will continue to
work together in the Intra-Mediterranean feeder trades.

-ends-

Notes to Editors

	1.	 	Map showing overlapping CP Ships and Italia services.

CP Ships and Italia overlapping
services

2/4

 

	2.	 	Details of the 11 chartered ships included in the acquisition:

     Italia Fleet List

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Year	 	Nominal	 	Owned/	 	Max. Service	 	 
	Ship	 	Built	 	Capacity(1)	 	Chartered(2)	 	Speed (Knots)	 	Ship Types(3)
	
	 	
	 	
	 	
	 	
	 	

	 	 	 	 	 	 	(teu)	 	 	 	 	 	 	 	 	 	 	 	 
	Cristoforo Colombo
	 	 	1989	 	 	 	2200	 	 	STC	 	 	20	 	 	 	U	 
	Amerigo Vespucci
	 	 	1989	 	 	 	2200	 	 	STC	 	 	20	 	 	 	U	 
	Cielo di San Francisco
	 	 	1998	 	 	 	2500	 	 	MTC	 	 	21	 	 	 	G	 
	Cielo del Canada
	 	 	1998	 	 	 	2500	 	 	MTC	 	 	21	 	 	 	G	 
	Cielo d’America
	 	 	2002	 	 	 	2500	 	 	MTC	 	 	22	 	 	 	G	 
	Cielo d’Europa
	 	 	2002	 	 	 	2500	 	 	MTC	 	 	22	 	 	 	G	 
	S. Caboto
	 	 	1991	 	 	 	1100	 	 	STC	 	 	18	 	 	 	G	 
	California
	 	 	1992	 	 	 	1200	 	 	STC	 	 	18	 	 	 	G	 
	Cielo del Caribe
	 	 	2000	 	 	 	1300	 	 	STC	 	 	17	 	 	 	G	 
	Cielo del Cile
	 	 	1994	 	 	 	1500	 	 	STC	 	 	19	 	 	 	G	 
	Dollar Trader
	 	 	1997	 	 	 	1600	 	 	STC	 	 	21	 	 	 	G	 
	 
	Total:
	 	 	 	 	 	 	21,100	 	 	 	 	 	 	 	 	 	 	 	 	 

	(1)	 	Nominal Capacity represents the total number of slots theoretically
available both above and below decks and is therefore different from
operational capacity which takes account of various factors including average
cargo weight, destination of cargo, weather conditions, draft limitations, ship
stability, and other factors which generally reduce the ship capacity often
significantly.
	 
	(2)	 	A short-term charter (STC) is a time charter of one year or less and a
medium-term charter (MTC) is a time charter of more than one year but less than
3 years.
	 
	(3)	 	Geared (G) ships have on-board cranes, while ungeared (U) do not.

3/4

 

About CP Ships: One of the world’s leading container shipping companies, CP
Ships provides international container transportation services in four key
regional markets: TransAtlantic, Australasia, Latin America and Asia. Within
these markets CP Ships operates in 24 trade lanes, most of which are served by
two or more of its six readily recognized brands: ANZDL, Canada Maritime, Cast,
Contship Containerlines, Lykes Lines and TMM Lines. Its fleet of 78 ships
carries nearly two million teu per year. Within the majority of its core trade
lanes, CP Ships is the leading carrier. CP Ships also owns Montreal Gateway
Terminals, which operates one of the largest marine container terminal
facilities in Canada. CP Ships is traded on the Toronto and New York stock
exchanges under the symbol TEU. For further information, visit the CP Ships
website (www.cpships.com).

CONTACTS:

CP SHIPS

Investors

Jeremy Lee, VP Investor Relations

Telephone: +44 (0) 20 7389 1153 or +1 514 934 5254

Media

Elizabeth Canna, Director Corporate Communications

Telephone: +41 (0)79 691 3764

or

Ian Matheson, Impress Communications

Telephone: +44(0)1689 860 660

D’AMICO

Enzo Redivo, Redivo e Associati, Genoa

Telephone +39 010 582939

Note: This press release may include forward-looking statements about the
operations, objectives and expected financial results of CP Ships and its
affiliates. Such statements are inherently subject to uncertainties arising
from a variety of factors including, without limitation, legislative or
regulatory changes, competition, technological developments and global economic
and financial conditions. Actual performance could differ substantially.

4/4

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