Document:

exv10w20

 

Exhibit 10.20

ADS PLACE PHASE I, LLC

c/o Duke Realty Corporation

5600 Blazer Parkway, Suite 100

Dublin, OH 43017

August 25, 2006

ADS Alliance Data Systems, Inc. 4590

E. Broad Street Columbus, Ohio 43213

Attn: Bruce McClary

	 	 	 	 	 
	 

	 	Re:
	 	3100 Easton Square Place
	 

	 	 	 	Columbus, Ohio

Ladies and Gentlemen:

          Reference is made to the Lease Agreement dated as of August 25, 2006 (the “Lease”)
between ADS Place Phase I, LLC (“Landlord”) and ADS Alliance Data Systems, Inc.
(“Tenant”). Capitalized terms used herein and not otherwise defined shall have the
meanings assigned thereto in the Lease.

          Tenant acknowledges that it holds an option to purchase the Adjacent Land, as described in
Section 16.21 of the Lease which it intends to incorporate into the construction of a second
building for its occupancy (“Phase II”). At such time as Tenant elects to proceed with the
development of Phase II, Tenant shall deliver to Landlord a written proposal (the
“Proposal”) setting forth the material terms and conditions under which Tenant would
engage Landlord to act as Tenant’s owner and developer for Phase II.

          Landlord shall have thirty (30) days after receipt of the Proposal to either accept or reject
such Proposal. If Tenant does not receive Landlord’s written response within such thirty (30) day
period, then Landlord shall be deemed to have rejected the Proposal. In the event Landlord elects
to accept the Proposal, Landlord and Tenant shall proceed to negotiate in good faith definitive
documentation evidencing such engagement.

          In the event Landlord declines, or is deemed to have declined, the Proposal, then Tenant may
proceed to negotiate and enter into an agreement with a third party developer to act as owner and
developer for Phase II provided the terms of such engagement (the “Third Party Engagement”)
are substantially the same as those originally set forth in the Proposal. Notwithstanding the
foregoing, if the terms of the Third Party Engagement are not substantially the same as the terms
set forth in the Proposal or better for Tenant, then prior to entering into any binding agreement
with such third party, Tenant shall send to Landlord a written proposal (the “Second
Proposal”) to act as owner and developer for Phase II on the same terms and conditions

 

 

as the Third Party Engagement and Landlord shall have the right, exercisable within five (5)
days after receipt thereof, to accept the Second Proposal and act as the owner and developer for
Phase II. If Tenant does not receive Landlord’s written response to the Second Proposal within
such five (5) day period, then Landlord shall be deemed to have rejected the Second Proposal.

          Landlord shall have the right to assign its rights under this letter agreement to any third
party developer upon prior notice from Landlord to Tenant.

          This letter agreement shall be governed and construed in accordance with the laws of the State
of Ohio.

          This letter agreement may be executed in one or more counterparts, each of which taken
together shall constitute one and the same agreement.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Sincerely,	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	ADS PLACE PHASE I, LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Duke Construction Limited Partnership,	 	 
	 	 	 	 	an Indiana limited partnership, its manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Duke Business Centers Corporation,

an Indiana corporation, its general

partner /
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	James T. Clark	 	 
	 

	 	 	 	 	 	 	 	Senior Vice President	 	 
	 

	 	 	 	 	 	 	 	Columbus Operations	 	 

AGREED AND ACCEPTED:

ADS ALLIANCE DATA SYSTEMS, INC.

By:

Name: Daniel T. Groomes

Title: Senior Vice President

 

 

LEASE AGREEMENT

     THIS LEASE is executed this 25th day of August, 2006 (the “Execution Date”),
by and between ADS PLACE PHASE I, LLC, a Delaware limited liability company (“Landlord”), and ADS
ALLIANCE DATA SYSTEMS, INC., a Delaware corporation (“Tenant”).

WITNESSETH:

ARTICLE 1 - LEASE OF PREMISES

     Section 1.01. Basic Lease Provisions and Definitions.

     A. Leased Premises: That certain three (3) story building consisting of approximately
198,602 rentable square feet to be constructed at Easton, Franklin County, Columbus, Ohio (the
“Building”), which Building shall be situated on that certain tract or parcel of land
containing
approximately 13.4 acres as more particularly described in Exhibit A-l attached hereto
and made a part
hereof by reference (the “Land”), located in Easton Square Place (the “Park”). The Leased
Premises, the
Building and the Land are sometimes collectively referred to herein as the “Project”. The
preliminary
lease outline drawing of the Leased Premises is set forth on the site plan of the Project
attached hereto as
Exhibit A and made a part hereof by reference (the “Site Plan”).

     B. Rentable Area of the Leased Premises: approximately 198,602 rentable square feet.

     “Rentable Area”, “Rentable Square Feet” or variations on such term as used in
this Lease means the square footage of Rentable Area as defined in the Building Owners and Managers
Association International (“BOMA”) Standard Method for Measuring Floor Area hi Office Buildings
American National Standard ANSI-265.1-1996 approved June 7,1996 by American National Standards
Institute, Inc. (“BOMA Standards”) which shall be utilized to determine the useable area of the
Leased Premises and the usable area of the Building. Within ten (10) days after the Commencement
Date, Landlord shall cause the Rentable Area of the Leased Premises to be determined pursuant to
BOMA Standards by a qualified architect or engineer who is reasonably acceptable to Landlord and
Tenant and who certifies to Landlord and Tenant the number of Rentable Square Feet in the Leased
Premises. If the Rentable Area in the Leased Premised is other than 198,602 Rentable Square Feet,
Minimum Annual Rent and the Monthly Rental Installments in Section 1.01C and D, the TI
Allowance in Section 2.02(10 and the Moving Allowance in Section 2.02(1) shall be
adjusted accordingly.

	 	 	 	 	 	 	 	 	 
	 	 	C.	 	Minimum Annual Rent:
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	*Month 1
	 	$0.00     	 	 
	 

	 	 	 	Months 2-61
	 	**$2,323,643.40 per year

	 

	 	 	 	Months 62 -121
	 	**$2,522,245.44 per year.

	 
	 	 	 	 	 	 	 	 
	 	 	D.	 	Monthly Rental Installments:
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	*Month 1
	 	$0.00 per month       

	 

	 	 	 	Months 2-61
	 	**$193,636.95 per month

	 

	 	 	 	Months 62-121
	 	**$210,187.12 per month.

	 
	 	 	 	 	 	 	 	 
	 	 	 	 	*During such time period, Tenant shall not be responsible for paying to
Landlord Minimum Annual Rent for the Leased Premises.
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	** These amounts are based on the Leased Premises containing 198,602 Rentable
Square Feet. If the actual Rentable Area of the Leased Premises as determined
pursuant to Section 1.01B is not 198,602 Rentable Square Feet, these
amounts will be adjusted accordingly.

     E. Term: Ten (10) years and one (1) month, plus the partial calendar month, if any,
in which the Commencement Date occurs (the “Original Term”), together with all duly exercised
Extension Terms.

     F. Target Commencement Date: November 1, 2007.

     G. Security Deposit: None.

 

 

     H. Guarantor: None.

     Broker: Duke Realty Services Limited Partnership representing Landlord.

     J. Permitted Use: Class “A” General office and administrative use, together with
related
storage, and uses ancillary thereto (such as, but not limited to, an on-site cafeteria).

     K. Address for payments and notices as follows:

	 	 	 	 	 
	 

	 	Landlord:
	 	ADS Place Phase 1, LLC
	 

	 	 	 	c/o Duke Realty Corporation
	 

	 	 	 	Attn.: Vice President, Property Management
	 

	 	 	 	5600 Blazer Parkway, Suite 100
	 

	 	 	 	Dublin, OH 43017
	 
	 	 	 	 
	 

	 	and
	 	The Georgetown Co. Attn:
	 

	 	 	 	Jonathan E. Schmerin 667
	 

	 	 	 	Madison Avenue New York,
	 

	 	 	 	NY 10021
	 
	 	 	 	 
	 

	 	With Rental Payments to:
	 	Duke Realty Corporation
	 

	 	 	 	Accounts Receivable Manager
	 

	 	 	 	600 East 96th Street, Suite 100
	 

	 	 	 	Indianapolis, Indiana 46240
	 
	 	 	 	 
	 

	 	Tenant (prior to occupancy):
	 	ADS Alliance Data Systems,
	 

	 	 	 	Inc. Attn: Oren Snell
	 

	 	 	 	4590 E. Broad Street
	 

	 	 	 	Columbus, OH 43213
	 
	 	 	 	 
	 

	 	and
	 	Alliance Data Systems, Inc.
	 

	 	 	 	Attn: General Counsel
	 

	 	 	 	17655 Waterview Parkway
	 

	 	 	 	Dallas, TX 75252
	 
	 	 	 	 
	 

	 	Tenant (following occupancy):
	 	ADS Alliance Data Systems, Inc
	 

	 	 	 	Attn: Oren Snell
	 

	 	 	 	4590 E. Broad Street
	 

	 	 	 	Columbus, OH 43213
	 
	 	 	 	 
	 

	 	and
	 	Alliance Data Systems, Inc.
	 

	 	 	 	Attn: General Counsel
	 

	 	 	 	17655 Waterview Parkway
	 

	 	 	 	Dallas, TX 75252.

     L. Business Day: Any day other than a Saturday, Sunday or Federal or State of
Ohio legal
holiday. If any deadline or obligation falls on a non-Business Day, such deadline or obligation
shall be extended to the next Business Day.

     M. Exhibits attached hereto:

	 	 	 	 	 
	 

	 	Exhibit A:
	 	Site Plan of the Project
	 

	 	Exhibit A-1:
	 	Legal Description of the Land
	 

	 	Exhibit B:
	 	Building Description
	 

	 	Exhibit C:
	 	Letter of Understanding
	 

	 	Exhibit D:
	 	Rules and Regulations
	 

	 	Exhibit E:
	 	Agency Disclosure Statement
	 

	 	Exhibit F:
	 	Adjacent Land
	 

	 	Exhibit G:
	 	Landlord’s Rules of Conduct’

     Section 1.02. Lease of Project. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord, under the terms and conditions herein, the Project.

ARTICLE 2 — TERM AND POSSESSION

     Section 2.01. Term. The term of this Lease (“Lease Term” or “Term”) shall be for the
period of time as set forth in Section 1.01(F) hereof, and shall commence on the date (the
“Commencement Date”)

 

 

that is the later to occur of: (i) the Target Commencement Date or (ii) Substantial Completion
of the Building Description (as all such terms are hereinafter defined).

     Section 2.02. Construction of Tenant Finish Improvements and Possession.

     (a) The scope of the work for the Building shell improvements (the “Shell Work”) to be
performed by Landlord, at Landlord’s sole cost and expense, is set forth in the building
description and written descriptions thereto all of which are listed and/or set forth on
Exhibit B attached hereto and made a part hereof (the “Building Description”). Landlord
shall construct in a good workmanlike manner and in accordance with all applicable laws, statutes,
codes, ordinances and regulations all of the Shell Work and supply all applicable permits, work,
labor, materials and equipment necessary to complete the Shell Work in accordance with the Building
Description, which shall include, without limitation, the installation of landscaping, parking
lots, driveways and all improvements as described in Exhibit B.

     (b) Landlord shall construct, or shall cause another affiliate of Landlord to construct, in a
good and workmanlike manner and in accordance with the applicable laws, statutes, codes, ordinances
and regulations the leasehold improvements to the Leased Premises (the “Tenant Improvements”) in
accordance with the plans and specifications and/or construction drawings (the “Plans and
Specifications”), which shall be prepared by Landlord and mutually agreed upon by the parties
following the execution of this Lease. Landlord shall obtain all applicable permits, work, labor,
materials and equipment necessary or desirable for the completion of such Tenant Improvements.
Tenant and Landlord shall reasonably cooperate and use reasonable efforts to have the Plans and
Specifications mutually approved by October 5, 2006. Following Tenant’s approval of the Plans and
Specifications, Landlord shall solicit, but shall not be obligated to obtain, competitive bids from
at least three (3) subcontractors for each major trade. Landlord and Tenant shall review the bids
jointly and Landlord shall consult with the Tenant on selection of sub-contractors and then
Landlord shall select one sub-contractor for each item bid. Landlord agrees to use good business
judgment in its selection of sub-contractors and pricing and timing shall be significant factors in
Landlord’s selection of sub-contractors. Promptly following the selection of a subcontractor for
each major trade, Landlord shall deliver to Tenant a statement of the cost to construct and install
all of the Tenant Improvements (the “Cost Statement”). Tenant acknowledges and agrees that the Cost
Statement shall include design fees and a ten percent (10%) construction management fee payable to
the project’s construction manager or general contractor (who may be an affiliate of Landlord) and
Landlord represents that such fees have been included in all estimates provided by Landlord to
Tenant prior the Execution Date. Tenant agrees to acknowledge the Cost Statement in writing within
three (3) business days following Landlord’s written request therefor.

     (c) Landlord shall provide Tenant with a proposed schedule for the construction and
installation of the Tenant Improvements and shall notify Tenant of any material changes to
said schedule.
Tenant agrees to coordinate with Landlord regarding the installation of Tenant’s phone and
data wiring
and any other trade related fixtures that will need to be installed in the Leased Premises
prior to
Substantial Completion. Landlord agrees to cooperate with Tenant so that Tenant can install
any phone
and data wiring and other items which should be installed before walls, ceiling and flooring
is completed.
Thirty (30) days prior to the Commencement Date, Tenant shall have the right and privilege of
going onto
the Leased Premises to begin fixturing and to complete interior decoration work and to prepare
the Leased
Premises for its occupancy (which right shall expressly exclude making any structural
modifications);
provided, however, that its schedule in so doing shall be communicated to Landlord and the
reasonable
approval of Landlord secured. Landlord agrees to reasonably cooperate with Tenant in
Landlord’s
completion schedule so that Landlord substantially completes its work in parts of the Building
as required
by Tenant to facilitate Tenant’s completion of the Leased Premises for its occupancy in a
manner which
minimizes conflicts between Landlord’s completion work and Tenant’s work and facilitates
Tenant’s
orderly occupancy of the Leases Premises. Subject to the forgoing, Tenant shall not
unreasonably
interfere with the other work of Landlord being carried on at such time; provided such work by
Tenant
does not unreasonably interfere with other work of Landlord being carried on at the time.
Landlord shall
have no responsibility or liability whatsoever for any loss or damage to any of Tenant’s
leasehold
improvements, fixtures, equipment or any other materials installed or left in the Leased
Premises by
Tenant unless due to Landlord’s negligence or willful misconduct or the negligence or willful
misconduct
of Landlord’s agents, employees or contractors. During any entry prior to the Commencement
Date
(i) Tenant shall comply with all terms and conditions of this Lease other than the obligation to
pay Rent, (ii) Tenant shall not unreasonably interfere with Landlord’s completion of the Tenant
Improvements, (iii) Tenant shall cause its personnel and contractors to comply with the terms and
conditions of Landlord’s rules of conduct, which are attached hereto as Exhibit G, and
(iv) Tenant shall not begin operation of its business. Tenant acknowledges that Tenant shall be
responsible for obtaining all applicable permits and inspections relating to any such entry by
Tenant.

     (d) Tenant shall have the right to request changes to the Plans and Specifications at any
time
following the date of approval by way of written change order (each, a “Change Order”, and
collectively,
“Change Orders”). Provided such Change Order is reasonably acceptable to Landlord, Landlord
shall
prepare and submit promptly to Tenant a memorandum setting forth the impact on cost and
schedule

3

 

resulting from said Change Order (the “Change Order Memorandum of Agreement”). Tenant shall,
within five (5) business days following Tenant’s receipt of the Change Order Memorandum of
Agreement, either (i) execute and return the Change Order Memorandum of Agreement to Landlord, or
(ii) retract its request for the Change Order. At Landlord’s option, Tenant shall pay Landlord (or
Landlord’s designee), within twenty (20) days following Landlord’s request, one-half of any
increase in the cost to construct the Tenant Improvements resulting from the Change Order, as set
forth in the Change Order Memorandum of Agreement and one-half upon completion of such work.
Landlord shall not be obligated to commence any work set forth in a Change Order until such time as
Tenant has delivered to Landlord the Change Order Memorandum of Agreement executed by Tenant and,
if applicable, Tenant has paid Landlord one-half of any increase in the cost of construction
resulting from said Change Order. If any Change Order result in a net decrease in cost such amount
shall credited to any amount payable by Tenant to Landlord pursuant to Section 2.02(h)
following Substantial Completion or be added to any credit against Rent as provided in Section
2.02(h).

     (e) For purposes of this Lease (i) “Substantial Completion” (or any grammatical
variation thereof) shall mean completion of construction of the Shell Work and the Tenant
Improvements, subject only to punchlist items to be identified by Landlord and Tenant in a joint
inspection of the Leased Premises prior to Tenant’s occupancy, the completion of which will not
materially affect Tenant’s use and occupancy of, or ability to obtain an occupancy permit for the
Leased Premises (Tenant acknowledging, however, that even if Landlord has Substantially Completed
the Tenant improvements, Tenant may not be able to obtain an occupancy permit for the Leased
Premises because of the need for completion of all or a portion of improvements being installed in
the Leased Premises directly by Tenant, in which case the Leased Premises shall be deemed
Substantially Complete); and (ii) “Tenant Delay” shall mean any delay in the completion of the
Tenant Improvements attributable to Tenant, including, without limitation, (A) Tenant’s failure to
meet any time deadlines specified herein, (B) Change Orders, (C) Tenant’s requirements for special
work or materials, finishes or installations other than those provided for in the Building
Description and the Plans and Specifications, (D) the performance of any other work in the Leased
Premises by any person, firm or corporation employed by or on behalf of Tenant, or any failure to
complete or delay in completion of such work which does not result from the acts or omissions of
Landlord or its employees, agents, contractors or subcontractors, and (E) any other act or omission
of Tenant.

     (f) Notwithstanding anything to the contrary contained in Section 2.01 above, if
Substantial Completion of the Tenant Improvements is delayed beyond the Target Commencement Date as
a result of Tenant Delay, then, for purposes of determining the Commencement Date, Substantial
Completion of the Tenant Improvements shall be deemed to have occurred on the date that Substantial
Completion of the Tenant Improvements would have occurred but for such Tenant Delay. Without
limiting the foregoing, Landlord shall use commercially reasonable speed and diligence to
Substantially Complete the Tenant Improvements on or before the Target Commencement Date. In the
event Substantial Completion is delayed beyond thirty (30) days from the Target Commencement Date,
and such delay is not caused by a Tenant Delay or force majeure event, Rent shall abate one day for
every day of delay beyond such thirty (30) day period. Such abatement shall equal one day’s Rent as
provided in Section 1.01D for months 2-61 for each day of such delay and shall be deducted
on a daily basis from the first Monthly Rental Installments until fully recouped. Promptly
following the Commencement Date, Tenant shall execute Landlord’s Letter of Understanding in
substantially the form attached hereto as Exhibit C and made a part hereof, acknowledging
(x) the Commencement Date of this Lease, and (y) except for any punchlist items and latent defects
which are not reasonably determinable during the joint inspection provided in Section
2.02(e) above, that Tenant has accepted the Leased Premises. If Tenant takes possession of and
occupies the Leased Premises, Tenant shall be deemed to have accepted the Leased Premises and that
the condition of the Leased Premises and the Building was at the time satisfactory and in
conformity with the provisions of this Lease in all respects, subject to any punchlist items and
latent defects which are not reasonably determinable during the joint inspection provided in
Section 2.02(e) above.

     (g) Provided that the need to exercise the warranty referenced herein is not created by the
negligence or willful misconduct of Tenant, its contractors, employees, or agents, Landlord
hereby
warrants the Shell Work and the Tenant Improvements for a period of twelve (12) months from
the
Commencement Date (the “Warranty Period”), After the expiration of the Warranty Period,
Landlord
shall (i) assign to Tenant all warranties (if assignable) from subcontractors and material
suppliers for
materials, workmanship, fixtures or equipment installed by Landlord in the Leased Premises to
the extent
such warranties continue in effect after the expiration of the Warranty Period; or (ii) to
the extent not
assignable, enforce such warranties at Tenant’s request, and at Tenant’s sole cost and
expense.

     (h) TI Cost. Landlord shall construct the Tenant Improvements, but in no event
shall the Landlord bear the cost of the Tenant Improvements (the “TI Costs”) in excess of
Thirty-seven Dollars and Forty-eight Cents ($37.48) per Rentable Square Foot of the Leased
Premises (Seven Million Four Hundred Forty-three Thousand Six Hundred Two Dollars and Ninety-six
Cents ($7,443,602.96)) if the Leased Premises contain 198,602 Rentable Square Feet, or as adjusted
per Section 1.01 (the “TI Allowance”). If, following Tenant’s approval (or deemed
approval) of the Plans and Specifications, the

4

 

Cost Statement shows that the TI Costs will exceed the TI Allowance, Tenant shall deliver to
Landlord, within twenty (20) days following Landlord’s written request, an amount equal to one-half
(1/2) of such excess. Following Substantial Completion of the Tenant Improvements, Tenant shall pay
to Landlord the remaining difference between the Cost Statement (taking into account any increases
or decreases resulting from any Change Orders) and the TI Allowance within twenty (20) days of
Landlord’s request therefor. Tenant’s failure to deliver the payments required in this paragraph
shall entitle Landlord to stop the construction and installation of the Tenant Improvements until
such payment is received, and any resulting delay shall constitute a Tenant Delay (as hereinafter
defined) hereunder, hi addition, all delinquent payments shall accrue interest at 12% per annum. If
the TI Costs are less than the TI Allowance (taking into account any increases or decreases
resulting from any Change Orders), such savings shall be a credit against the initial Monthly
Rental Installments, until such savings are fully credited.

     (i) Moving Allowance. Landlord shall pay to Tenant within thirty (30) days
after the Commencement Date Three Hundred Ninety-seven Thousand Two Hundred Four Dollars
($397,204.00) (Two Dollars ($2.00)) per rentable square foot of the Leased Premises) (the “Moving
Allowance”) on account of Tenant’s moving and relocation costs and expenses. The Moving Allowance
shall be paid to Tenant regardless of Tenant’s actual moving costs.

     Section 2.03. Surrender of the Leased Premises. Upon the expiration or earlier
termination of this Lease, Tenant shall immediately surrender the Leased Premises to Landlord in
broom-clean condition and in good order, condition and repair, ordinary wear and tear and loss or
damage due to third parties, fire or other casualty and eminent domain excepted. Tenant shall
remove its personal property and computer equipment (including wiring and cabling) from the Leased
Premises, at its sole cost and expense. Tenant shall, at its expense, promptly repair any damage
caused by any such removal, and shall restore the Leased Premises to the condition existing prior
to the installation of the items so removed (normal wear and tear excepted). All Tenant property
which is not removed within ten (10) business days following Landlord’s written demand therefor
(provided such notice is delivered after the expiration or termination of this Lease and Tenant is
granted any license necessary to enter the Leased Premises to remove such property) shall be
conclusively deemed to have been abandoned and Landlord shall be entitled to dispose of such
property at Tenant’s cost without incurring any liability to Tenant. The provisions of this
Section 2.03 shall survive the expiration or other termination of this Lease.

     Section 2.04. Holding Over. If Tenant retains possession of the Leased Premises after
the expiration or earlier termination of this Lease, Tenant shall become a tenant from month to
month at one hundred fifty percent (150%) of the Monthly Rental Installment for the Leased
Premises in effect upon the date of such expiration or earlier termination (the “Holdover Rent”),
and otherwise upon the terms, covenants and conditions herein specified, so far as applicable.
Acceptance by Landlord of rent after such expiration or earlier termination shall not result in a
renewal of this Lease. Tenant shall vacate and surrender the Leased Premises to Landlord upon
Tenant being given thirty (30) days prior written notice from Landlord to vacate. This Section
2.04 shall in no way constitute a consent by Landlord to any holding over by Tenant upon the
expiration or earlier termination of this Lease, nor limit Landlord’s remedies in such event, but
one-third 1/3 of the Holdover Rent paid will be credited against any other damages which Landlord
incurs as a result of such holdover.

ARTICLE 3 - RENT

     Section 3.01. Minimum Annual Rent. Tenant shall pay to Landlord the Minimum Annual
Rent in the Monthly Rental Installments in advance, without deduction or offset, except as
otherwise provided in Section 2.02(f) of this Lease, on the Commencement Date and on or
before the first day of each and every calendar month thereafter during the Lease Term. The
Monthly Rental Installments for partial calendar months shall be prorated.

     Section 3.02.: Additional Rent. It is the intention of the parties hereto that,
during the Term, this Lease shall be a “triple net bondable” lease and it is agreed and intended
that Minimum Annual Rent and Additional Rent shall be paid, except to the extent otherwise
expressly specified in this Lease, without notice, demand, counterclaim, setoff, deduction or
defense and without abatement, suspension, deferment, diminution or reduction and that Tenant’s
obligation to pay all such amounts, throughout the Term is absolute and unconditional in all
respects, except to the extent otherwise expressly specified in this Lease, the obligations and
liabilities of Tenant to pay Minimum Annual Rent and Additional Rent hereunder arising during or
otherwise relating to the Term shall in no way be released, discharged or otherwise affected for
any reason, including, without limitation, the following: (i) any defect in the condition,
merchantability, design, quality, construction or fitness for use of the Leased Premises or any
part thereof; (ii) any damage to, removal, abandonment, salvage, loss, condemnation, theft,
scrapping or destruction of or any requisition or taking of the Leased Premises or any part
thereof, or any environmental conditions on the Leased Premises or any property in the vicinity of
the Leased Premises; (iii) any restriction, prevention, or curtailment of or interference with any
use of the Leased Premises or any part thereof including eviction; (iv) any defect in title to or
rights to the Leased Premises or any lien on such title or

5

 

rights to the Leased Premises; (v) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceedings relating to Tenant or any other
Person, or any action taken with respect to this Lease by any trustee or receiver of Tenant or any
other Person, or by any court, in any such proceeding; (vi) any failure on the part of Landlord, or
any other Person to perform or comply with any of the terms of this Lease, or of any other
agreement: (vii) any invalidly, unenforceability, rejection or disaffirmance of this Lease by
operation of law or otherwise against or by Tenant or Landlord or any provision hereof; (viii) the
impossibility of performance by Tenant or Landlord, or both; (ix) any action by any court,
administrative agency or other Governmental Authority; (x) any interference, interruption or
cessation in the use, possession or quiet enjoyment of the Leased Premises; (xi) any failure of
Tenant to have the right of possession or actual possession of the Premises; or (xii) any other
occurrence whatsoever, whether similar or dissimilar to the foregoing, whether foreseeable or
unforeseeable, and whether or not Tenant shall have notice or knowledge of any of the foregoing.

     Except as otherwise specifically set forth in this Lease during the Term, this Lease shall not
be terminable by Tenant for any reason whatsoever and, except as otherwise expressly provided in
this Lease, Tenant waives all rights now or hereafter conferred by statute or otherwise to quit,
terminate or surrender this Lease or to any diminution, abatement or reduction of Rent payable
hereunder in each case to the fullest extent now or hereafter permitted by Legal Requirements.

     In addition to the Minimum Annual Rent Tenant shall pay, either directly or by reimbursement
to Landlord, as “Additional Rent,” all costs and expenses during the Lease Term for Real Estate
Taxes and Operating Expenses for the Project (collectively “Building Expenses”).

     “Operating Expenses” shall mean all expenses for operation, repair, replacement and
maintenance to keep the Project in good order, condition and repair, including, but not limited to,
utilities; stormwater discharge fees; license, permit, inspection and other fees; fees and
assessments imposed by any covenants or owners’ association; security services; insurance premiums
and deductibles; and maintenance, repair and replacement of the driveways, parking areas (including
snow removal), exterior lighting, landscaped areas, walkways, curbs, drainage strips, sewer lines,
exterior walls, foundation, structural frame, roof and gutters except for the cost to repair,
correct or replace defective construction of the Project for which Landlord is responsible under
this Lease during the Warranty Period as expressly provided in Section 2.02(g) above.

     “Real Estate Taxes” shall mean any form of real estate tax or assessment or service payments
in lieu thereof, and any license fee, fifty percent (50%) of any commercial rental tax applicable
to the Project (the other fifty percent being paid by Landlord), improvement bond or other similar
charge or tax (other than inheritance, personal income, franchise or estate taxes) imposed upon the
Building (or against Landlord’s business of leasing the Building) or Land, by any authority having
the power to so charge or tax, together with costs and expenses of contesting the validity or
amount of Real Estate Taxes (but deducting therefrom all reductions or refunds received by Landlord
as a result of any such contest, appeal or otherwise) and deducting or excluding, as applicable,
all applicable tax abatements. Additionally, .Tenant shall pay, prior to delinquency, all taxes
assessed against and levied upon trade fixtures, furnishings, equipment and all personal property
of Tenant contained in the Leased Premises. Landlord will make reasonable efforts to have real
estate taxes bills sent directly to Tenant during the Term, but if they cannot be sent directly to
Tenant, Landlord will provide such bills to Tenant promptly after Landlord receives such bills and
Landlord shall be responsible for any penalties or interest resulting from Landlord’s failure to
promptly deliver such bills to Tenant. Landlord shall also provide some reasonably verifiable
document, or an officer’s certificate, evidencing the commercial rental tax due. Landlord hereby
authorizes Tenant, at Tenant’s sole cost and expense, to contest any assessments or valuations of
the Project for real estate tax purposes and authorizes Tenant to pursue such contests in
Landlord’s name, if required by law.

     Section 3.03. Payment of Additional Rent. Unless Tenant is in Default hereunder,
Tenant shall pay the Building Expenses directly to the applicable payees as such Building Expenses
become due and payable. In the event of a Tenant Default and thereafter, Landlord shall estimate
the total amount of Additional Rent to be paid by Tenant during each calendar year of the Lease
Term, pro-rated for any partial years. Following a Tenant Default and Landlord’s notice, Tenant
shall pay to Landlord each month, at the same time the Monthly Rental Installment is due, an
amount equal to one-twelfth (1/12) of the estimated Additional Rent for such year. Within a
reasonable time after the end of each calendar year, Landlord shall submit to Tenant a statement
of the actual amount of such Additional Rent and within thirty (30) days after receipt of such
statement, Tenant shall pay any deficiency between the actual amount owed and the estimates paid
during such calendar year. In the event of overpayment, Landlord shall credit the amount of such
overpayment toward the next installments of Minimum Rent. Tenant shall have the right to inspect,
at reasonable times and in a reasonable manner, during the sixty (60) day period following the
delivery of Landlord’s statement of the actual amount of the Additional Rent (the “Inspection
Period”), such of Landlord’s books of account and records as pertain to and contain information
concerning the Additional Rent for the prior calendar year in order to verify the amounts thereof.
Such inspection shall take place at Landlord’s office. Only Tenant or a certified public

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accountant that is not being compensated for its services on a contingency fee basis shall conduct
such inspection. Landlord and Tenant shall act reasonably in assessing the other party’s
calculation of the Additional Rent. Tenant shall provide Landlord with a copy of its findings
within thirty (30) days after completion of the audit. Tenant’s failure to exercise its rights
hereunder within the Inspection Period shall be deemed a waiver of its right to inspect or contest
the method, accuracy or amount of such Additional Rent. All of the information obtained through
Tenant’s inspection, as well as any compromise, settlement or adjustment reached between Landlord
and Tenant relative to the results of the inspection shall be held in strict confidence by Tenant
and its officers, agents, and employees, and Tenant shall cause its independent professionals to be
similarly bound.

     Section 3.04. Late Charges. Tenant acknowledges that Landlord shall incur certain
additional unanticipated administrative and legal costs and expenses if Tenant fails to timely pay
any payment required hereunder. Therefore, in addition to the other remedies available to Landlord
hereunder, if any payment required to be paid by Tenant to Landlord hereunder shall not be paid
after the expiration of all applicable notice and cure periods, such unpaid amount shall bear
interest from the due date thereof to the date of payment at the prime rate (as set forth in the
Wall Street Journal) of interest plus three and three-fourths percent (3.75%) per annum or
the maximum interest rate allowed by law, whichever is less (collectively, the “Interest Rate”).

ARTICLE 4 — SECURITY DEPOSIT — [Intentionally Omitted].

ARTICLE 5 — OCCUPANCY AND USE

     Section 5.01. Use. The Leased Premises shall be used by Tenant for the Permitted Use
and for no other purposes without the prior written consent of Landlord, not to be unreasonably
withheld, conditioned or delayed. Tenant shall have access to the Project during the Lease Term
twenty-four (24) hours a day, seven (7) days a week.

     Section 5.02. Covenants of Tenant Regarding Use. Tenant shall (i) use and maintain the
Leased Premises and conduct its business thereon in a safe, careful, reputable and lawful manner,
(ii) comply with the Declaration of Covenants, Conditions and Restrictions for Easton made by MORSO
Holding Co. of record in Official Record Volume 32534, page C-08, as amended by First Amendment to
Declaration of Covenants, Conditions, Restrictions for Easton of record in Official Record Volume
34316, page C-06, as amended by Second Amendment to Declaration of Covenants, Conditions and
Restrictions for Easton of record in Instrument Number 199804240098650, as amended by Third
Amendment to Declaration of Covenants, Conditions and Restrictions for Easton of record in
Instrument Number 200005120094010, as amended by Fourth Amendment to Declaration of Covenants,
Conditions and Restrictions for Easton of record in Instrument Number 200207190177934, as
re-recorded in Instrument Number 200308050246689, as amended by Fifth Amendment to Declaration of
Covenants, Conditions and Restrictions for Easton of record in Instrument Number 200303280089787,
as amended by Sixth Amendment to Declaration of Covenants, Conditions and Restrictions for Easton
of record in Instrument Number 200410120236907, Recorder’s Office, Franklin, County, Ohio, and all
Laws now in force or which may hereafter be in force, including without limitation those which
shall impose upon Tenant any duty with respect to or triggered by a change in the use or occupation
of, or any improvement or alteration to, the Leased Premises, (iii) comply with and obey all the
rules and regulations attached hereto as Exhibit D, as may be reasonably modified from time
to time by notice to Tenant. Tenant shall not do or permit anything to be done in or about the
Leased Premises or the Land, which constitutes a legal nuisance. Tenant shall not use the Leased
Premises, or allow the Leased Premises to be used, for any purpose or in any particular manner
different from the Permitted Use which would invalidate any policy of insurance now or hereafter
carried on the Building. All damage to the floor structure or foundation of the Building due to
improper positioning or storage of items or materials shall be repaired by Tenant at its sole
expense.

     Section 5.03. Landlord’s Rights Regarding Use. In addition to the rights specified
elsewhere in this Lease, Landlord shall have the following rights regarding the use of the Leased
Premises, the Building, or the Land, which may be exercised without notice or liability to Tenant:
Landlord, its employees and agents and any mortgagee of the Building shall have the right to enter
any part of the Leased Premises at reasonable times, upon prior Written notice to Tenant (at least
forty eight (48) hours prior notice, except in the event of an emergency in which case no notice
shall be required), for the purposes of examining or inspecting the same, showing the same to
prospective purchasers, mortgagees or, within the last twelve (12) months of the Lease Term to
tenants and for making such repairs and replacements to and maintaining the Leased Premises, the
Building and the Land as Landlord may deem necessary in the event Tenant is in Default hereunder
(such cost and expense of said repairs, replacement and maintenance shall be Additional Rent
hereunder unless otherwise provided herein). Landlord shall incur no liability to Tenant for such
entry, nor shall such entry constitute an eviction of Tenant or a termination of this Lease, or
entitle Tenant to any abatement of rent therefor; provided, however, that Landlord complies with
the terms of this Section 5.03 and in exercising its rights hereunder, Landlord agrees to
use commercially reasonable efforts to not interfere with Tenant’s business operations or

7

 

obstruct or prevent access to and egress from the Leased Premises or the Project. Except in
the case of emergency, Tenant shall be entitled to have a representative of Tenant accompany
Landlord, its employees, agents, contractors, invitees or licensees (collectively, “Landlord’s
Representatives”) while they are in the Leased Premises and all Landlord’s Representatives shall
comply with all reasonable security and confidentiality requirements of Tenant. Landlord
acknowledges that all information concerning Tenant’s business, including, without limitation,
information regarding Tenant’s employees, customers, operations, procedures, processes and
financials are confidential and proprietary to Tenant and shall not be disclosed to any third
parties by any of Landlord’s Representatives. Among other requirements, Tenant may require that any
and all of Landlord’s Representatives sign confidentiality agreements as a condition of entry into
the Leased Premises.

     Section 5.04. Parking. Prior to the Commencement Date, as part of Landlord’s Shell
Work, Landlord shall construct the parking areas upon the Land serving the Leased Premises, in a
good and workmanlike, first-class manner, in compliance with all applicable Laws (including,
without limitation, the Americans with Disabilities Act), with no fewer than approximately nine
hundred seventy-one (971) parking spaces for passenger vehicles.

     Section 5.05. Quiet Enjoyment. Upon payment by Tenant of the Rent reserved and
provided to be paid by Tenant hereunder and upon the keeping, observance and performance by Tenant
of all of the terms, covenants, conditions and provisions of this Lease on Tenant’s part to be
kept, observed and performed, Tenant shall peaceably and quietly hold and enjoy the Project for the
Lease Term without hindrance or interruption by Landlord or by any person or persons claiming or
holding by, through or under Landlord.

ARTICLE 6 — UTILITIES AND OTHER BUILDING SERVICES

     Section 6.01. Services. Tenant shall obtain in its own name and shall pay
directly to the appropriate supplier the cost of all utilities serving the Project.

     Section 6.02. Interruption of Services. Tenant understands, acknowledges and agrees
that any one or more of the utilities or other building services may be interrupted by accident,
emergency or other causes beyond Landlord’s control (which shall not include Landlord’s failure to
pay any sums owed to the service provider); that Landlord does not represent or warrant the
uninterrupted availability of such utilities or building services; that any such interruption shall
not be deemed an eviction or disturbance of Tenant’s right to possession, occupancy and use of the
Leased Premises or any part thereof, or render Landlord liable to Tenant for damages by abatement
of rent or otherwise, or relieve Tenant from the obligation to perform its covenants under this
Lease; and that Landlord shall not be liable to Tenant for any injury, loss or damage occasioned by
the bursting, stoppage or leaking of water, gas, sewer or other pipes, except to the extent caused
by Landlord’s negligence or willful misconduct or the negligence or willful misconduct of
Landlord’s agents, employees or contractors.

ARTICLE 7 — REPAIRS. MAINTENANCE, ALTERATIONS,

IMPROVEMENTS AND FIXTURES

     Section 7.01. Repair and Maintenance. Tenant shall, at its own cost and expense,
maintain the Project in good condition, regularly servicing and promptly making all repairs and
replacements thereto, including but not limited to the electrical systems, heating and air
conditioning systems, plate glass, floors, windows and doors, and plumbing systems. Tenant shall
obtain a preventive maintenance contract on the heating, ventilating and air-conditioning systems
and provide Landlord with a copy thereof or otherwise provide such preventive maintenance. The
preventive maintenance contract or Tenant’s preventive maintenance program shall meet or exceed
Landlord’s standard maintenance criteria, and shall provide for the inspection and maintenance of
the heating, ventilating and air conditioning system on at least a quarterly basis. Tenant shall
make all necessary repairs, replacements and maintenance to the roof, sprinkler systems, exterior
walls, foundation, structural frame of the Building and the parking and landscaped areas and other
areas of the Project. All obligations of Tenant hereunder shall be conducted in a manner
consistent with a Class “A” office building.

     Section 7.02. Alterations or Improvements. Tenant shall not be permitted to make any
alterations of the Leased Premises that (i) affect the Building structure or any Building system,
or (ii) result in any changes to the exterior of the Building or to the Land, unless and until the
plans have been approved in advance by Landlord in writing. Such approval shall not be
unreasonably withheld, conditioned or delayed. As a condition of any approval required hereunder,
Landlord may require Tenant to remove the alterations and repair any damage to the Project upon
expiration or earlier termination of this Lease, provided Landlord earmarks or identifies at the
time of consent and prior to installation, any alterations or improvements that must be removed at
the end of the Lease Term. If Landlord consents to Tenant’s performance of alterations or
additions to the Project or if consent is not required under this Section 7.02, then
Tenant shall ensure that all alterations and improvements which are made or necessitated thereby
shall be made in accordance with all applicable Laws, in a good and workmanlike

8

 

manner and in quality equal to or better than the original construction of the Building and
shall comply with such reasonable requirements as Landlord considers necessary or desirable.
Landlord’s approval of the plans, specifications and working drawings for Tenant’s alterations
shall create no responsibility or liability on the part of Landlord for their completeness, design
sufficiency, or compliance with all laws, rules and regulations of governmental agencies or
authorities. Any alterations or improvements to the Leased Premises, except movable office
furniture and equipment, machinery and all generators and trade fixtures, shall become a part of
the realty and the property of Landlord, and shall not be removed by Tenant; provided that Tenant
may remove upgrades to existing systems, which are installed by Tenant as alterations, provided
that Tenant restores original systems to the condition that existed prior to such alteration, and
Tenant may remove additions to existing systems made by Tenant as alterations provided that such
removal does not materially and adversely affect the operation of such system as it existed prior
to such additions. No person shall be entitled to any lien derived through or under Tenant for any
labor or material furnished to the Leased Premises, and nothing in this Lease shall be construed to
constitute Landlord’s consent to the creation of any lien. If any lien is filed against the Land
for work claimed to have been done for or material claimed to have been furnished to Tenant, Tenant
shall cause such lien to be discharged of record within thirty (30) days after Tenant becomes aware
of such filing. Tenant shall indemnify Landlord from all costs, losses, expenses and attorneys’
fees in connection with any construction or alteration and any related lien.

     Section 7.03. Trade Fixtures. Any trade fixtures installed on the Leased Premises by
Tenant at its own expense, such as movable partitions, counters, shelving, showcases, mirrors and
the like (including removal alternatives as provided in Section 7.02 above), may, and, at
the request of Landlord, shall be removed on the expiration or earlier termination of this Lease,
as provided in Section 2.03, provided that Tenant bears the cost of such removal, and
further that Tenant repairs at its own expense any and all damage to the Leased Premises resulting
from such removal. If Tenant fails to remove any and all such trade fixtures from the Leased
Premises on the expiration or earlier termination of this Lease, all such trade fixtures shall
become the property of Landlord unless Landlord elects to require their removal, in which case
Tenant shall, at its expense, promptly remove the same and repair any damage to the Leased Premises
caused by such removal.

ARTICLE 8 — INDEMNITY AND INSURANCE

     Section 8.01. Release. All of Tenant’s trade fixtures, merchandise, inventory and all
other personal property in or about the Leased Premises, the Building or the Land, which is deemed
to include the trade fixtures, merchandise, inventory and personal property of others located in or
about the Leased Premises or Land at the invitation, direction or acquiescence (express or implied)
of Tenant shall be referred to herein, collectively, as “Tenant’s Property”. Landlord shall not be
liable to Tenant or to any other person for, and Tenant hereby releases Landlord from (a) any and
all liability for theft or damage to Tenant’s Property, and (b) any and all liability for any
injury to Tenant or its employees, agents, contractors, guests and invitees in or about the Leased
Premises, the Building or the Land, except to the extent of personal injury or property loss or
damage (to the extent not covered by insurance) which results directly from the negligence or
willful misconduct of Landlord, its agents, employees or contractors or results from breach by
Landlord under this Lease. Nothing contained in this Section 8.01 shall limit (or be deemed
to limit) the waiver contained in Section 8.05 below. In the event of any conflict between
the provisions of Section 8.01, the provisions of Section 8.05 shall prevail. This
Section 8.01 shall survive the expiration or earlier termination of this Lease.

     Section 8.02. Indemnification by Tenant. Tenant shall protect, defend, indemnify and
hold Landlord, its agents, employees and contractors harmless from and against any and all claims,
damages, demands, penalties, costs, liabilities, losses, and expenses (including reasonable
attorneys’ fees and expenses at the trial and appellate levels) to the extent (a) arising out of
or relating to any act, omission, negligence, or willful misconduct of Tenant or Tenant’s agents,
employees, contractors, customers or invitees in or about the Leased Premises, the Building or the
Land, or (b) arising out of any other act or occurrence within the Leased Premises, the Building
or on the Land in all such cases, except to the extent of personal injury or property loss or
damage (to the extent not covered by insurance) which results directly from the negligence or
willful misconduct of Landlord, its agents, employees or contractors. Nothing contained in this
Section 8.02 shall limit (or be deemed to limit) the waivers contained in Section
8.05 below, hi the event of any conflict between the provisions of Section 8.05 below
and this Section 8.02, the provisions of Section 8.05 shall prevail. This
Section 8.02 shall survive the expiration or earlier termination of this Lease.

     Section 8.03. Indemnification by Landlord. Landlord shall protect, defend, indemnify
and hold Tenant, its agents, employees and contractors harmless from and against any and all
claims, damages, demands, penalties, costs, liabilities, losses and expenses (including reasonable
attorneys’ fees and expenses at the trial and appellate levels) to the extent arising out of or
relating to any act, omission, negligence or willful misconduct of Landlord or Landlord’s agents,
employees or contractors. Nothing contained in this Section 8.03 shall limit (or be deemed
to limit) the waivers contained in Section 8.05 below. In the event of any conflict
between the provisions of Section 8.05 below and this Section 8.03.

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the provisions of Section 8.05 shall prevail. This Section 8.03 shall survive
the expiration or earlier termination of this Lease.

     Section 8.04. Tenant’s Insurance.

     (a) During the Lease Term (and any period of early entry or occupancy or holding over by
Tenant, if applicable), Tenant shall maintain the following types of insurance, in the amounts
specified below:

          (i) Liability Insurance. Commercial General Liability Insurance (which
insurance shall not exclude blanket, contractual liability, broad form property damage, personal
injury, or fire damage coverage) covering the Leased Premises, the Building and the Land, and
Tenant’s use thereof against claims for bodily injury or death and property damage, which insurance
shall provide coverage on an occurrence basis with a per occurrence limit of not less than
$3,000,000, and with general aggregate limits of not less than $10,000,000 for each policy year,
which limits may be satisfied by any combination of primary and excess or umbrella per occurrence
policies.

          (ii) Property Insurance. Special Form Insurance (which insurance shall not
exclude flood or earthquake) in the amount of the full replacement cost of the Building and
betterments (including alterations or additions performed by Tenant pursuant hereto, and any
improvements made pursuant to Section 2.02 above) and Tenant’s Property, which insurance
shall include an agreed amount endorsement waiving coinsurance limitations.

          (iii) Worker’s Compensation Insurance. Worker’s Compensation insurance in
amounts required by applicable law.

          (iv) Business Interruption Insurance. Business Interruption Insurance with limits
of not less than an amount equal to one (1) year’s rent hereunder.

     (b) All insurance required by Tenant hereunder shall (i) be issued by one or more
insurance companies reasonably acceptable to Landlord, licensed to do business in the State in
which the Leased Premises is located and having an AM Best’s rating of A- IX or better, and (ii)
provide that said insurance shall not be materially changed, canceled or permitted to lapse on
less than thirty (30) days’ prior written notice to Landlord. In addition, Tenant’s insurance
shall protect Tenant and Landlord as their interests may appear, naming Landlord, Landlord’s
managing agent, and any mortgagee requested by Landlord, as additional insureds under its
commercial general liability policies. On or before the Commencement Date (or the date of any
earlier entry or occupancy by Tenant), and thereafter, within thirty (30) days prior to the
expiration of each such policy, Tenant shall furnish Landlord with certificates of insurance in
the form of ACORD 25 or ACORD 25-S (or other evidence of insurance reasonably acceptable to
Landlord), evidencing all required coverages, together with a copy of the endorsement(s) to
Tenant’s commercial general liability policy evidencing primary and non-contributory coverage
afforded to the appropriate additional insureds, unless the policy contains an automatic
endorsement for contractual liabilities, then the certificate of insurance evidencing the
additional insured shall suffice. Upon Tenant’s receipt of a request from Landlord, Tenant shall
provide Landlord with a mutually convenient date to review all insurance policies, including all
endorsements, evidencing the coverages required hereunder in Tenant’s office. If Tenant fails to
carry such insurance and furnish Landlord with such certificates of insurance or copies of
insurance policies (if applicable), Landlord may obtain such insurance on Tenant’s behalf and
Tenant shall reimburse Landlord upon demand for the cost thereof as Additional Rent. Landlord
reserves the right from time to time to require Tenant to obtain higher minimum amounts or
different types of insurance if it becomes customary for other landlords of similar buildings in
the area to require similar sized tenants in similar industries to carry insurance of such higher
minimum amounts or of such different types.

     Section 8.05. Waiver of Subrogation. Notwithstanding anything contained in this Lease
to the contrary, Tenant and Landlord hereby waive any rights each may have against the other on
account of any loss of or damage to their property, the Leased Premises, its contents, or other
portions of the Building arising from any risk which is required to be insured under this Lease.
The special form coverage insurance policies maintained by Tenant as provided in this Lease shall
include an endorsement containing an express waiver of any rights of subrogation by the insurance
company against Landlord.

ARTICLE 9 — CASUALTY AND EMINENT DOMAIN

     Section 9.01. General Provisions. Subject to Tenant’s rights to utilize or obtain the
same in accordance with Section 9.03, Tenant hereby irrevocably assigns to Landlord any
award, compensation or insurance payment to which Tenant may become entitled by reason of Tenant’s
interest in the Leased Premises (i) if the use, occupancy or title of the Project or any part
thereof is taken, requisitioned or sold in, by or on account of any actual or threatened eminent
domain proceeding or other action by any person having the power of eminent domain
(“Condemnation”) or (ii) if the Project or any part thereof is

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damaged or destroyed by fire, flood or other casualty (“Casualty”) (all awards, compensations, and
insurance payments on account of any Condemnation or Casualty (net of any amounts applicable to
Tenant’s Property) are hereinafter collectively called “Compensation”). In the event of any
Casualty, or in the event of a Condemnation or threatened Condemnation with respect to the Project,
Tenant or Landlord (whoever receives notice first) shall give prompt written notice thereof to the
other (if such notice is from Tenant, it shall set forth Tenant’s good faith estimates of the cost
of repairing or restoring any damage or destruction caused thereby, or, if Tenant cannot reasonably
estimate the anticipated cost of restoration, Tenant shall nonetheless give Landlord prompt notice
of the occurrence of any such Casualty or Condemnation, and will diligently proceed to obtain
estimates to enable Tenant to quantify the anticipated cost of such restoration, whereupon Tenant
shall promptly notify Landlord of such good faith estimate). Landlord may, if it reasonably so
elects, participate in any such proceeding or action to negotiate, prosecute and adjust any claim
for any Compensation, and Landlord shall collect any such Compensation at Landlord’s sole cost.
Notwithstanding Landlord’s right to participate therein, Tenant, at Tenant’s sole cost, shall
initiate, conduct and control any such proceeding, action, negotiation, prosecution or adjustment,
unless a Default shall have occurred and be continuing, in which event Landlord shall have the sole
right to conduct and control such proceedings, actions, negotiations, prosecutions and adjustments.
All Compensation shall be applied pursuant to the applicable provisions of this Article 9,
and all such Compensation (less the reasonable costs and expenses of Tenant, in all cases, and
Landlord, only if Landlord conducts and controls such proceedings after a Default by Tenant, in
collecting such Compensation), is herein called the “Net Proceeds”.

     Section 9.02. Major Condemnation and Major Casualty. If a Condemnation shall take more
than twenty percent (20%) of the Land or the Net Proceeds of such Condemnation shall be for an
amount in excess of $5,000,000, or if a Casualty shall occur which prevents Tenant from using more
than fifty percent (50%) of the Leased Premises for a period in excess of twelve (12) months,
Tenant shall provide evidence thereof reasonably acceptable to Landlord (herein, a “Major Casualty”
and a “Major Condemnation”), then Tenant shall, not later than thirty (30) days after such Major
Condemnation or Major Casualty, as the case may be, deliver to Landlord (i) notice of its intention
to terminate this Lease with respect to such Project on the first Minimum Annual Rent payment date
(the “Lease Termination Date”) which occurs not less than 30 days and not more than 90 days after
the delivery of such notice and (ii) a certificate of Tenant describing the event giving rise to
such termination and stating that Tenant has determined in good faith that such Major Condemnation
or Major Casualty, as the case may be, has rendered the Project unsuitable for restoration for
continued use and occupancy in Tenant’s business and is relinquishing any rights to the Net
Proceeds, and (iii) documentation to the effect that termination of this Lease with respect to the
Project will not be in violation of any agreement then in effect with which Tenant is obligated to
comply pursuant to this Lease.

     Section 9.03. Less than Major Condemnation or Casualty.

     (a) If, after a Condemnation or Casualty, Tenant is not permitted to give or, if permitted,
does not give notice of its intention to terminate this Lease with respect to the Project as
provided in Section 9.02 (and is not required to give such notice pursuant to Section
9.02), then this Lease shall continue in full force and effect and Tenant shall, at its
expense, promptly rebuild, replace or repair the Building and Leased Premises in conformity with
the requirements of Sections 2.02 (including referenced exhibits and Plans and
Specifications) and 7.02 so as to restore the applicable Project (in the case of
Condemnation, as nearly as practicable) to the condition and fair market value thereof immediately
prior to such occurrence (or if the Project was under renovation at such time, to the condition
and fair market value thereof at the time of completion of renovation). Prior to any such
rebuilding, replacement or repair, Tenant shall deliver its reasonable estimate of the cost
thereof, which shall be subject to the approval of Landlord, which approval shall not be
unreasonably withheld (the cost approved by Landlord is referred to as the “Restoration Cost”).

     (b) The Restoration Cost must be confirmed by an architect reasonably acceptable to Landlord
(an “Architect”), and if the Restoration Cost is more than the amount of Net Proceeds, the Tenant
shall deliver or cause to be delivered to Landlord or its designee (i) cash collateral in an
amount equal to such excess, or (ii) an unconditional, irrevocable, clean sight draft letter of
credit, in form and substance, and issued by a bank, acceptable to Landlord in its reasonable
discretion, in the amount of such excess, or (iii) a bond in form and from an institution
reasonably acceptable to Landlord in the amount of such excess; or (iv) evidence acceptable to
Landlord that the excess has been expended in performing the restoration work prior to any funds
being drawn from the Net Proceeds.

     (c) The Restoration Cost shall be paid first out of Tenant’s own funds to the extent that the
Restoration Cost exceeds the Net Proceeds payable in connection with such occurrence, after which
expenditure Tenant shall be entitled to receive the Net Proceeds, but only against certificates of
Tenant (and lien releases and other items generally and reasonably required in connection with
disbursement of construction loan or insurance proceeds) delivered to Landlord from time to time
as such work or rebuilding, replacement and repair progresses, each such certificate describing
the work for which Tenant is requesting payment and the cost incurred by Tenant in connection
therewith and stating that Tenant has

11

 

not theretofore received payment for such work. In addition, in such event the Restoration Cost
shall be disbursed in accordance with the procedure set forth in Section 9.03(e) below. Any
Net Proceeds remaining after final payment has been made for such work and after Tenant has been
reimbursed for any portions it contributed to the Restoration Cost shall be shared equally by
Landlord and Tenant, hi the event of any temporary Condemnation, this Lease shall remain in full
force and effect and so long as no Event of Default shall have occurred and be continuing the Net
Proceeds allocable to such temporary Condemnation shall be paid to Tenant except that such portion
of the Net Proceeds allocable to the period after the expiration or termination of the term of this
Lease shall be paid to Landlord. If the cost of any rebuilding, replacement or repair required to
be made by Tenant pursuant to this Section 9.03 shall exceed the amount of such Net
Proceeds, the deficiency shall be paid by Tenant. Tenant shall not be entitled to disbursements of
the Net Proceeds if a Default has occurred and is continuing.

     (d) The Minimum Annual Rent and the Additional Rent payable under the provisions of this Lease
shall not be affected, altered or reduced by any Casualty or Condemnation. Tenant’s obligation to
continue to pay Minimum Annual Rent and Additional Rent shall continue notwithstanding any such
Condemnation or Casualty.

     (e) If the Restoration Costs are required to be held by Landlord or its designee pursuant to
this Lease, then such Net Proceeds shall be held by Landlord or its designee and shall be paid out
from time to time to Tenant as the work progresses (less any cost to Landlord or its designee of
recovering and paying out such proceeds, including, without limitation, reasonable attorneys’,
trustees’ or escrow fees relating thereto and costs allocable to inspecting the work and the plans
and specifications therefor), subject to each of the following conditions:

          (i) Each request for payment shall be made on not less than ten (10) business days’
prior notice to Landlord, and shall be accompanied by an officer’s certificate (or if such work is
being performed under the supervision of an Architect, by a certificate of such Architect), stating
(A) in the case of an officer’s certificate only, that no Default exists hereunder, (B) that, based
upon an inspection of the Project, all of the work completed has been done in substantial
compliance with the approved plans and specifications, if required, (C) that the sum requested is
validly required to reimburse Tenant for payments by Tenant, or is validly due to the contractor,
subcontractors, materialmen, laborers, engineers, architects or other persons rendering services or
materials for the work (giving a brief description of such services and materials), and that when
added to all sums previously paid out by Landlord does not exceed the value of the work done to the
date of such certificate, (D) if the sum requested is to cover payment relating to repair and
restoration of personal property required or relating to the Project, that title to the personal
property items covered by the request for payment is vested in Landlord or Tenant, as applicable,
and (E) the remaining cost to complete such work and that the remaining amount held by Landlord
(together with any amounts contemporaneously deposited by Tenant with Landlord or Lender in
connection therewith) shall be sufficient to cover such cost of completion; provided,
however, that if such certificate is given by an Architect, such Architect shall certify as to
clause (B) above, and Tenant shall certify as to the remaining clauses above, and provided,
further, that Landlord shall not be obligated to disburse such funds if it determines, in its
reasonable discretion, that Tenant shall not be in compliance with this Section 9.03(e)(i).
Additionally, each request for payment shall contain a statement signed by Tenant approving both
the work done to date and the work covered by the request for payment in question.

          (ii) Each request for payment shall be accompanied by waivers of lien reasonably
satisfactory to Landlord covering that part of the work for which payment or reimbursement has
been made as of the date shown on the current request and, if required by Landlord, a search
prepared by a title company or by other evidence satisfactory to Landlord that there has not been
filed with respect to the Project any mechanics, or other lien or instrument for the retention of
title relating to any part of the work not discharged of record and such other contractors’
affidavits, plots of survey and evidence of cost, payment and performance as Landlord may
reasonably request and approve. Additionally, as to any personal property covered by the request
for payment, Landlord shall be furnished with evidence of payment therefor.

          (iii) Landlord, and its architects or duly authorized construction representatives,
shall have the right to inspect the work at all reasonable times upon reasonable prior notice and
may condition any disbursement of Net Proceeds upon the satisfactory completion, as determined in
the reasonable discretion of Landlord, of any portion of the work for which payment or
reimbursement is being requested. Neither the approval by Landlord of any required plans and
specifications for the work nor the inspection by Landlord of the work shall make Landlord
responsible for the preparation of such plans and specifications or the compliance of such plans
and specifications, or of the work, with any applicable legal requirement, covenant or agreement.

          (iv) Net Proceeds shall not be disbursed more frequently than once every thirty (30)
days. No disbursement made prior to final completion of any item of work shall cause the aggregate
amount disbursed with respect to such item of work to exceed 90% of the value of the portion of
such

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item of work which has been completed if, at the time of such disbursement a Default has occurred
and is continuing.

          (v) So long as a Default shall have occurred and be continuing, Landlord may apply any
Net Proceeds held by it to continue the restoration and repair of the Project.

     Net Proceeds held by Landlord in accordance with this Section shall be held in an interest
bearing account if (A) such an account is available at the institution at which Landlord holds such
Net Proceeds, and (B) Landlord determines, in its reasonable judgment, that holding the Net
Proceeds in such an account is practical under the then existing circumstances. Any interest earned
on the Net Proceeds shall be a part of the Net Proceeds, and shall be disbursed in accordance with
this Lease.

     (f) Notwithstanding any other provision of this Section, if Tenant is then currently
maintaining a S&P rating of BBB and in Tenant’s reasonable judgment the cost of the Work (as
hereinafter defined) is less than $2,000,000 with respect to any one casualty or partial
condemnation, such Work can be completed in less than one hundred eighty (180) days (subject to
Force Majeure) and no Default has occurred and is continuing, then Landlord, upon request by
Tenant, shall permit Tenant to apply for and receive the Net Proceeds directly from the insurer or
payor thereof (and Landlord shall advise such insurer or payor to pay over such Net Proceeds
directly to Tenant), provided that Tenant shall promptly and diligently commence and complete such
Work in a good and workmanlike manner.

     (g) If a Default shall have occurred and be, continuing or if Tenant (i) shall fail to submit
to Landlord for approval plans and specifications (if required pursuant to Section 9.03(b)
hereof) for the work (the “Work”) (approved by the Architect and by all governmental authorities
whose approval is required), (ii) after any such plans and specifications are approved by all such
governmental authorities, the Architect and Landlord, shall fail to commence promptly such Work,
(iii) after Landlord has released the Net Proceeds to the extent provided for hereunder, shall fail
to diligently prosecute such Work to completion, or (iv) shall materially fail in any other respect
to comply with the Work obligations under this Section 9.02, then in addition to all other
rights available hereunder, at law or in equity, Landlord or any receiver of the Project or any
portion thereof, upon fifteen (15) days prior written notice to Tenant (except in the event of
emergency in which case no notice shall be required), may (but shall have no obligation to) perform
or cause to be performed such Work, and may take such other steps as Landlord deems advisable (but
such performance shall not cure the Default of Tenant). Tenant hereby waives, for Tenant and all
others holding under or through Tenant, any claim, other than for negligence or willful misconduct,
against Landlord and any receiver arising out of any act or omission of Landlord or such receiver
pursuant hereto, and Landlord may apply all or any portion of the Net Proceeds (without the need to
fulfill any other requirements forth in this Section 9.03) to reimburse Landlord or such
receiver, for all amounts incurred in connection with the Work, and any costs not reimbursed to
such parties shall be paid by Tenant to Landlord (or such other party) on demand, together with
interest thereon at the rate set forth in Section 3.04 from the date such amounts are
advanced until the same are paid by Tenant.

ARTICLE 10 — EMINENT DOMAIN — [Intentionally Omitted].

ARTICLE 11 — ASSIGNMENT AND SUBLEASE

     Tenant shall not assign this Lease or sublet the Project in whole or in part without
Landlord’s prior written consent, which consent shall not be unreasonably withheld, delayed or
denied. In the event of any permitted assignment or subletting, Tenant shall remain primarily
liable hereunder. The acceptance of rent from any other person shall not be deemed to be a waiver
of any of the provisions of this Lease or to be a consent to the assignment of this Lease or the
subletting of the Project. Without in any way limiting Landlord’s right to refuse to consent to
any assignment or subletting of this Lease, Landlord reserves the right to refuse to give such
consent if (i) such proposed assignment or subletting is for less than 15,000 square feet, or (ii)
in Landlord’s reasonable opinion, such proposed assignee or subtenant is not an appropriate tenant
for a Class “A” office building. Notwithstanding the foregoing, Tenant may assign this Lease or
sublease all or any portion of the Leased Premises without Landlord’s consent to any of the
following (a “Permitted Transferee”): (i) any successor corporation or other entity resulting from
a merger or consolidation of Tenant; (ii) any purchaser of all or substantially all of Tenant’s
assets; or (iii) any entity which controls, is controlled by, or is under common control with
Tenant. Tenant shall give Landlord at least thirty (30) days’ prior written notice of the
effective date of such assignment or sublease. Any Permitted Transferee who is an assignee shall
assume in writing all of Tenant’s obligations under this Lease. Tenant shall nevertheless,
regardless of any transfer, assignment or sublet of all or any portion of the Leased Premises, at
all times remain fully responsible and liable for the payment of rent and the performance and
observance of all of Tenant’s other obligations under this Lease. Nothing in this paragraph is
intended to nor shall permit Tenant to transfer its interest under this Lease as part of a fraud
or subterfuge to intentionally avoid its obligations under this Lease (for example, transferring
its interest to a shell corporation that subsequently files a bankruptcy), and any such transfer
shall constitute a Default hereunder.

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ARTICLE 12 — TRANSFERS BY LANDLORD

     Section 12.01. Sale of the Building. Landlord shall have the right to sell the
Building and the Land at any time during the Lease Term and prior to the Commencement Date, and
upon the assumption of Landlord’s obligations hereunder by the transferee, such sale shall operate
to release Landlord from liability hereunder accruing after the date of such conveyance. Landlord
shall notify Tenant of the identity and notice address of such transferee at, or promptly following
the closing of such transfer.

     Section 12.02. Subordination and Estoppel Certificate. This Lease shall be subject and
subordinate to any mortgage presently existing or hereafter placed upon the Building and/or Land by
so declaring in such mortgage, provided that the holder of said mortgage, for itself and its
successors and assigns, including, without limitation, any purchaser at foreclosure sale or by deed
in lieu of foreclosure, agrees to recognize this Lease and not to disturb Tenant’s possession of
the Leased Premises or use of Project so long as Tenant is not in Default hereunder. Such
subordination and non-disturbance may be evidenced by a subordination and non-disturbance agreement
as set forth herein. Promptly following Landlord’s request, Tenant shall execute a subordination
and non-disturbance and attornment agreement which shall provide the holder shall not disturb
Tenant’s right of possession so long as Tenant is not in Default, and that the Tenant shall attorn
to and recognize the mortgage holder in the event that such mortgage holder succeeds to the
interest of Landlord under the Lease, and further providing that the mortgage holder and its
successors and assigns, as provided above, shall not be bound by, (i) any payment of Minimum Annual
Rent or Additional Rent made more than one month in advance, and (ii) defaults of the Landlord
under this Lease or any offset rights relating to such defaults. Within fifteen (15) days following
receipt of a written request from Landlord, Tenant shall execute and deliver to Landlord, without
cost, any instrument which is reasonably requested to confirm the subordination, non-disturbance
and attornment obligations of this Lease. Furthermore, either party may request from the other an
estoppel certificate in such form as such party may reasonably request certifying (i) that this
Lease is in full force and effect and unmodified or stating the nature of any modification, (ii)
the date to which rent has been paid, (iii) that there are not, to the delivering party’s
knowledge, any uncured defaults or specifying such defaults if any are claimed, and (iv) any other
matters or state of facts reasonably required respecting this Lease. Such estoppel, when requested
by Landlord, may be relied upon by Landlord and by any purchaser or mortgagee of the Building, or
when requested by Tenant, may be relied upon by Tenant, or any assignee, subtenant or lender of
Tenant. Notwithstanding the foregoing, if the mortgagee shall take title to the Leased Premises
through foreclosure or deed in lieu of foreclosure, Tenant shall be allowed to continue in
possession of the Leased Premises as provided for in this Lease so long as Tenant shall not be in
Default.

ARTICLE 13 — DEFAULT AND REMEDY

     Section 13.01. Default. The occurrence of any of the following shall be a
“Default”:

     A. Tenant fails to pay any Monthly Rental Installment or Additional Rent within five (5) days
after receipt of notice from Landlord that payment is past due, or Tenant fails to pay any other
amounts past due Landlord from Tenant within ten (10) days after receipt of notice from Landlord
that payment is past due.

     B. Tenant fails to perform or observe any other term, condition, covenant or obligation
required under this Lease for a period of thirty (30) days after notice thereof from Landlord;
provided, however, that if the nature of Tenant’s default is such that more than
thirty (30) days are reasonably required to cure, then such default shall be deemed to have been
cured if Tenant commences such performance within said thirty (30) day period and thereafter
diligently completes the required action within a reasonable time.

     rC. [Intentionally Omitted].

     D. Tenant shall assign or sublet all or a portion of the Leased Premises in contravention of
the provisions of Article 11 of this Lease.

     E. All or substantially all of Tenant’s assets in the Leased Premises or Tenant’s interest in
this Lease are attached or levied under execution (and Tenant does not discharge the same within
sixty (60) days thereafter); a petition in bankruptcy, insolvency or for reorganization or
arrangement is filed by or against Tenant (and Tenant fails to secure a stay or discharge thereof
within sixty (60) days thereafter); Tenant is insolvent and unable to pay its debts as they become
due; Tenant makes a general assignment for the benefit of creditors; Tenant takes the benefit of
any insolvency action or law; the appointment of a receiver or trustee in bankruptcy for Tenant or
its assets if such receivership has not been vacated or set aside within thirty (30) days
thereafter; or, dissolution or other termination of Tenant’s corporate charter if Tenant is a
corporation.

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     Tenant acknowledges and agrees that Tenant shall not be entitled to, and Landlord shall
not be obligated to provide, notice of default of any monetary obligations relating to Monthly
Rental Installments or Tenant’s regular monthly installments of Building Expenses (if
applicable) under this Lease more than two (2) times during any calendar year.

     Section 13.02. Remedies. Upon the occurrence of any Default, Landlord shall
have the following rights and remedies, in addition to those allowed by law or in equity, any one
or more of which may be exercised without further notice to Tenant:

     A. Landlord may re-enter the Leased Premises and cure any Default of Tenant, and Tenant shall
reimburse Landlord as Additional Rent for any costs and expenses which Landlord thereby incurs; and
Landlord shall not be liable to Tenant for any loss or damage which Tenant may sustain by reason of
Landlord’s action.

     B. Without terminating this Lease, Landlord may terminate Tenant’s right to possession of the
Leased Premises, and thereafter neither Tenant nor any person claiming under or through Tenant
shall be entitled to possession of the Leased Premises, and Tenant shall immediately surrender the
Leased Premises to Landlord; and Landlord may re-enter the Leased Premises and dispossess Tenant
and any other occupants of the Leased Premises by any lawful means and may remove their effects,
without prejudice to any other remedy which Landlord may have. Upon the termination of possession,
Landlord may (i) re-let all or any part thereof for a term different from that which would
otherwise have constituted the balance of the Lease Term and for rent and on terms and conditions
different from those contained herein, provided such rent, terms and conditions are reasonable and
consistent with the market, whereupon Tenant shall be immediately obligated to pay to Landlord an
amount equal to the present value (discounted at the Prime Rate) of the difference between the rent
provided for herein and that provided for in any lease covering a subsequent re-letting of the
Leased Premises, for the period which would otherwise have constituted the balance of the Lease
Term (the “Accelerated Rent Difference”), or (ii) without re-letting, declare the present value
(discounted at the Prime Rate) of all rent which would have been due under this Lease for the
balance of the Lease Term, including the amount of Building Expenses, which shall be based on the
average amount due for the calendar year in which the termination occurs, less the present value
(discounted at the Prime Rate) of all net rent, including the amount of Building Expenses, that
Landlord reasonably estimates that Landlord will receive via a reletting of the Leased Premises for
the balance of the Lease Term, to be immediately due and payable as liquidated damages (the
“Accelerated Rent”). Upon termination of possession, Tenant shall be obligated to pay to Landlord
(A) the Accelerated Rent Difference or the Accelerated Rent, whichever is applicable, (B) all loss
or damage which Landlord may sustain by reason of Tenant’s Default, which are not included in the
Accelerated Rent Difference or Accelerated Rent (“Default Damages”), which may include without
limitation, expenses of preparing the Leased Premises for re-letting, demolition, repairs, tenant
finish improvements and brokers’ commissions and attorneys’ fees, and (C) all unpaid Minimum Annual
Rent and Additional Rent that accrued prior to the date of termination of possession, plus any
interest and late fees due hereunder (the “Prior Obligations”).

     C. Landlord may terminate this Lease and declare the Accelerated Rent to be immediately due
and payable, whereupon Tenant shall be obligated to pay to Landlord (i) the Accelerated Rent, (ii)
all of Landlord’s Default Damages, and (iii) all Prior Obligations. It is expressly agreed and
understood that all of Tenant’s liabilities and obligations set forth in this subsection (c) shall
survive termination.

     D. Neither the filing of a dispossessory proceeding nor an eviction of personalty in the
Leased Premises shall be deemed to terminate the Lease.

     E. Landlord may sue for injunctive relief or to recover damages for any loss resulting from
the Default.

     F. If Landlord terminates this Lease or Tenant’s right to possession, Landlord shall use
reasonable efforts to mitigate damages hereunder, consistent with applicable law. If Landlord has
not terminated this Lease or Tenant’s right to possession, Landlord shall have no obligation to
mitigate except as required by applicable law and may permit the Leased Premises to remain vacant
or abandoned. Landlord shall not be deemed to have failed to mitigate if it incurs reasonable
reletting costs and make reasonable efforts to relet the Project. Notwithstanding the foregoing,
Tenant shall retain the burden of pleading mitigation of damages as an affirmative defense and
retain the burden of proof.

     Section 13.03. Landlord’s Default and Tenant’s Remedies. Landlord shall be in default
if it fails to perform any term, condition, covenant or obligation required under this Lease for a
period of thirty (30) days after written notice thereof from Tenant to Landlord; provided,
however, that if the term, condition, covenant or obligation to be performed by Landlord’
is such that it cannot reasonably be performed within thirty (30) days, such default shall be
deemed to have been cured if Landlord commences such performance within said thirty (30) day
period and thereafter diligently undertakes to complete the same. Upon the occurrence of any such
default, Tenant may sue for injunctive relief or to recover damages for

15

 

any loss directly resulting from the breach, but Tenant shall not be entitled to terminate
this Lease or withhold, offset or abate any sums due hereunder, without court order.

     Section 13.04. Limitation of Landlord’s Liability. If Landlord shall fail to perform
any term, condition, covenant or obligation required to be performed by it under this Lease and if
Tenant shall, as a consequence thereof, recover a money judgment against Landlord, Tenant agrees
that it shall look solely to Landlord’s right, title and interest in and to the Project, including
the rents and sales, insurance or condemnation proceeds therefrom, for the collection of such
judgment; and Tenant further agrees that no other assets of Landlord, other than as set forth
above, shall be subject to levy, execution or other process for the satisfaction of Tenant’s
judgment.

     Section 13.05. Nonwaiver of Defaults. Neither party’s failure or delay in exercising
any of its rights or remedies or other provisions of this Lease shall constitute a waiver thereof
or affect its right thereafter to exercise or enforce such right or remedy or other provision. No
waiver of any default shall be deemed to be a waiver of any other default. Landlord’s receipt of
less than the full rent due shall not be construed to be other than a payment on account of rent
then due, nor shall any statement on Tenant’s check or any letter accompanying Tenant’s check be
deemed an accord and satisfaction. No act or omission by Landlord or its employees or agents during
the Term of this Lease shall be deemed an acceptance of a surrender of the Leased Premises, and no
agreement to accept such a surrender shall be valid unless in writing and signed by Landlord.

     Section 13.06. Attorneys’ Fees. If either party defaults in the performance or
observance of any of the terms, conditions, covenants or obligations contained in this Lease and
the non-defaulting party obtains a judgment against the defaulting party, then the defaulting party
agrees to reimburse the non-defaulting party for the reasonable attorneys’ fees incurred thereby.
As used herein, “judgment” shall include any unappealable or unappealed ruling or finding of an
arbitrator or mediator, if applicable.

ARTICLE 14 — LANDLORD’S RIGHT TO RELOCATE TENANT

[Intentionally Omitted].

ARTICLE 15 — RESPONSIBILITIES REGARDING

ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES.

     Section 15.01. Environmental Definitions.

     A. “Environmental Laws” — All present or future federal, state and municipal laws,
codes, orders, decrees, ordinances, rules and regulations applicable to the environmental and
ecological condition of the Project, as well as the rules and regulations of the Federal
Environmental Protection Agency or any other federal, state or municipal agency or governmental
board or entity regulating, relating to, or imposing liabilities or standards of conduct concerning
any hazardous, toxic, or dangerous waste, substance, material, gas, or petroleum product, and
having jurisdiction over the Project.

     B. “Hazardous Substances” — Those substances included within the definitions of
“hazardous substances,” “hazardous materials,” “toxic substances” “solid waste” or “infectious
waste” under Environmental Laws and petroleum products. “Hazardous Substances” shall not include
ordinary or customary office or cleaning supplies, materials or solutions or other items used and
stored in the ordinary course of Tenant’s operation of the Permitted Uses in compliance with
applicable Environmental Laws.

     Section 15.02. Compliance. As to Tenant’s use, generation, release, manufacture,
refining, production, processing, storage or disposal of any Hazardous Substances, Tenant, at its
sole cost and expense, shall promptly comply with the Environmental Laws including any notice from
any source issued pursuant to the Environmental Laws or issued by any insurance company whether
such notice shall be served upon Landlord or Tenant.

     Section 15.03. Restrictions. Tenant shall operate its business on and about the
Leased Premises in compliance with all Environmental Laws. Tenant shall not cause or permit the
use, generation, release, manufacture, refining, production, processing, storage or disposal of
any Hazardous Substances on, under or about the Project, or the transportation to or from the
Leased Premises of any Hazardous Substances.

     Section 15.04. Notices, Affidavits, Etc. Each party shall immediately notify the
other party hereto of (i) any violation by such party, its employees, agents, representatives,
customers, invitees or contractors of the Environmental Laws on, under or about the Leased
Premises, Land or Building, or (ii) the presence or suspected presence of any Hazardous Substances
on, under or about the Leased Premises, Land or Building and shall immediately deliver to the
other party any notice received by such party relating to (i) and (ii} above from any source.
Tenant shall execute reasonable affidavits, representations and the like within twenty (20) days
of Landlord’s request (such request not to be made more than once per calendar year unless
Landlord has reason to believe a violation of Environmental

16

 

Laws exists upon the Leased Premises) therefor concerning Tenant’s best knowledge regarding the
presence of any Hazardous Substances on, under or about the Project. Landlord shall provide to
Tenant any environmental inspection report which Landlord or its agents, contractors or employees
receive with respect to the Project, promptly after receipt and Tenant’s written request.

     Section 15.05. Landlord’s Rights. Landlord and its agents shall have the right, but
not the duty, at Landlord’s sole cost and expense, subject to the terms of Section 5.03
hereof, upon advance notice (except in the case of emergency when no notice shall be required) to
inspect the Project and conduct tests thereon to determine whether or the extent to which there has
been a violation of Environmental Laws by Tenant or whether there are Hazardous Substances on,
under or about the Project. In exercising its rights herein, Landlord shall use reasonable efforts
to minimize interference with Tenant’s business but such entry shall not constitute an eviction of
Tenant, in whole or in part, and Landlord shall not be liable for any interference, loss, or damage
to Tenant’s property or business caused thereby unless due to Landlord’s negligence or willful
misconduct or that of Landlord’s agents, servants, employees or contractors, or violation of the
terms of Section 5.03 hereof.

     Section 15.06. Indemnification. Tenant shall indemnify Landlord and Landlord’s
managing agent, parent and affiliate, from any and all claims, losses, liabilities, costs, expenses
and damages, including attorneys’ fees, costs of testing and remediation costs, incurred by
Landlord in connection with any breach by Tenant of its obligations under this Article 15.
Landlord shall indemnify Tenant and Tenant’s parent and affiliates (collectively, the “Tenant
Parties”) from any and all claims, losses, liabilities, costs, expenses and damages, including
attorneys’ fees, costs of testing and remediation costs, incurred by Tenant in connection with any
breach by Landlord of its obligations under this Article 15. The covenants and obligations
under this Article 15 shall survive the expiration or earlier termination of this Lease.

     Section 15.07. Existing Conditions. Notwithstanding anything contained in this
Article 15 to the contrary, Tenant shall not have any liability to Landlord under this
Article 15 resulting from any conditions existing, or events occurring, or any Hazardous
Substances existing or generated, at, in, on, under or in connection with the Leased Premises, Land
or Building prior to the Commencement Date of this Lease, except to the extent Tenant knowingly
exacerbates the same.

ARTICLE 16 - MISCELLANEOUS

     Section 16.01. Benefit of Landlord and Tenant. This Lease shall inure to the benefit
of and be binding upon Landlord and Tenant and their respective heirs, successors and assigns.

     Section 16.02. Governing Law. This Lease shall be governed in accordance with the laws
of the State where the Building is located.

     Section 16.03. Guaranty. [Intentionally Omitted].

     Section 16.04. Force Majeure. Landlord and Tenant (except with respect to the payment
of any monetary obligation) shall be excused for the period of any delay in the performance of any
obligation hereunder when such delay is occasioned by causes beyond its control, including but not
limited to work stoppages, boycotts, slowdowns or strikes; shortages of materials, equipment,
labor or energy; unusual weather conditions; or acts or omissions of governmental or political
bodies.

     Section 16.05. Examination of Lease. Submission of this instrument for examination or
signature to Tenant does not constitute a reservation of or option for Lease, and it is not
effective as a Lease or otherwise until execution by and delivery to both Landlord and Tenant.

     Section 16.06. Indemnification for Leasing Commissions. The parties hereby represent
and warrant that the only real estate brokers involved in the negotiation and execution of this
Lease is the Broker, and Landlord agrees to pay all commissions due the Broker on account of this
transaction pursuant to separate agreements. Each party shall indemnify the other from any and all
liability for the breach of this representation and warranty on its part and shall pay any
compensation to any other broker or person who may be entitled thereto.

     Section 16.07. Notices. Any notice, request, consent, approval, demand, statement or
communication required or permitted to be given under this Lease or by law shall be given in
writing and shall be deemed to have been given if it is written and delivered by reputable
overnight courier or mailed by certified mail, postage prepaid, to the party who is to receive
such notice at the address specified in Article 1 (subject to any express provision in
this Lease which requires or permits such notices to be given in a different manner). When so
sent, the notice shall be deemed to have been given as of the date it is received or rejected.
Either party may change its address by giving written notice thereof to the other party.

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     Section 16.08. Partial Invalidity; Complete Agreement. If any provision of this Lease
shall be held to be invalid, void or unenforceable, the remaining provisions shall remain in full
force and effect. This Lease represents the entire agreement between Landlord and Tenant covering
everything agreed upon or understood in this transaction. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind as conditions or inducements
to the execution hereof or in effect between the parties. No change or addition shall be made to
this Lease except by a written agreement executed by Landlord and Tenant.

     Section 16.09. Financial Statements. During the Lease Term and any extensions thereof,
Tenant shall provide to Landlord, at Landlord’s request not more frequently then once per calendar
year, a copy of Tenant’s most recent certified and audited financial statements prepared as of the
end of Tenant’s fiscal year. All financial statements provided by Tenant to Landlord hereunder
shall be prepared in conformity with generally accepted accounting principles, consistently
applied. Notwithstanding the foregoing, Landlord shall not require Tenant to deliver such financial
information so long as Tenant’s (or Tenant’s parent company’s) financial statements meeting
generally the above requirements are publicly available and can be obtained by Landlord at a
nominal cost or no cost.

     Section 16.10. Representations and Warranties.

     (a) The undersigned represent and warrant that (i) such party is duly organized, validly
existing and in good standing (if applicable) in accordance with the laws of the state under which
it was organized; and (ii) the individual executing and delivering this Lease has been properly
authorized to do so, and such execution and delivery shall bind such party.

     (b) Landlord represents and warrants that it is the fee simple owner of the Land and that the
Land is not subject to any easements, conditions, restrictions or reservations which will
materially, adversely affect the use of the Leased Premises for its Permitted Use set forth in
Section 1.01J. Notwithstanding the foregoing, Tenant acknowledges that (i) certain
restrictions are contained in the Covenants; and (ii) Landlord is seeking either affirmative title
insurance over or the release of certain gas line easements affecting the Land which are “blanket”
in nature.

     (c) To the best of Landlord’s knowledge and belief, as of the execution date of the Lease,
there are no other documents recorded against the Land in the manner of private restrictions that
require the regular payment of dues and assessments, other than the Covenants. Landlord agrees to
obtain Tenant’s prior written consent before agreeing to any private restrictions recorded against
the Land (other than the Covenants) that require the payment of dues and assessments, change the
architectural standards applicable to the Leased Premises, or materially adversely affect Tenant’s
use of or access to the Leased Premises, provided that Landlord may agree to new restrictions that
require the payment of dues and assessments if such assessments are not included in Operating
Expenses.

     Section 16.11. Option to Extend.

     (a) Grant and Exercise of Option. Provided that (i) no default has occurred
and is then continuing (ii) the creditworthiness of Tenant is then reasonably acceptable to
Landlord (Tenant’s creditworthiness at the Execution Date qualifies as acceptable to Landlord) and
(iii) Tenant originally named herein or a Permitted Transferee remains in possession of and has
been continuously operating in the entire Leased Premises throughout the term immediately
preceding the Extension Term (as defined below), Tenant shall have the option to extend the Lease
Term for three (3) additional periods of five (5) years each (the “Extension Term(s)”). Each
Extension Term shall be upon the same terms and conditions contained in the Lease except (x) this
provision giving three (3) extension options shall be amended to reflect the remaining options to
extend, if any, and (y) any improvement allowances or other concessions applicable to the Leased
Premises under the Lease shall not apply to the Extension Term, and (z) the Minimum Annual Rent
shall be adjusted as set forth below (the “Rent Adjustment”). Tenant shall exercise each option by
(i) delivering to Landlord, no later than twelve (12) months prior to the expiration of the
preceding term, written notice of Tenant’s desire to extend the Lease Term. Tenant’s failure to
timely exercise such option shall be deemed a waiver of such option and any succeeding option.
Tenant may request that Landlord notify Tenant of the amount of Rent Adjustment at any time which
is not more than eighteen (18) months prior to the expiration bf the then existing term. Landlord
shall notify Tenant of the amount of Rent Adjustment within thirty (30) days after receipt of such
request and Landlord and Tenant shall negotiate such Rent Adjustment in good faith. If Landlord
fails to provide the amount of the Rent Adjustment within such thirty (30) day period, the date by
which Tenant must exercise the option shall be postponed a like number of days. Tenant shall be
deemed to have accepted the Rent Adjustment if it fails to deliver to Landlord a written objection
thereto within fifteen (15) business days after receipt thereof. If Tenant properly exercises its
option to extend, Landlord and Tenant shall execute an amendment to the Lease reflecting the terms
and conditions of the Extension Term within thirty (30) days after Tenant’s acceptance (or deemed
acceptance) of the Rent Adjustment.

18

 

     (b) Rent Adjustment. The Minimum Annual Rent for the applicable Extension Term
shall be an amount equal to ninety-five percent (95%) of the fair market rent for buildings of
comparable size and quality and with similar or equivalent improvements as are found in the
Building, in the general location of the Easton area of Columbus, Ohio; provided, however, that in
no event shall the Minimum Annual Rent during any Extension Term be less than the highest Minimum
Annual Rent payable during the immediately preceding term. The Monthly Rental Installments shall be
an amount equal to one-twelfth (1/12) of the Minimum Annual Rent for the Extension Term and shall
be paid at the same time and in the same manner as provided in the Lease.

     Section 16.12. Signage. Landlord shall provide Tenant with an allowance for signage as
provided in the Building Description and the Plans and Specifications. Any changes requested by
Tenant to the initial signage as provided in the Building Description and Plans and Specifications
shall be made by Change Order pursuant to Section 2.02(d) above and all signage shall be
subject to Landlord’s prior approval and in compliance with any codes and applicable covenants.
Tenant shall not place any exterior signs on the Leased Premises or interior signs visible from the
exterior of the Leased Premises without the prior written consent of Landlord. Notwithstanding any
other provision of this Lease to the contrary, Landlord may immediately remove any sign(s) placed
by Tenant in violation of this Section 16.12. Tenant agrees to maintain all signage in a
good state of repair, and upon expiration of the Lease Term, Tenant agrees to promptly remove such
signs and repair any damage to the Building and/or Land. With respect to the Park identification
sign (the “Park Sign”) to be constructed on the Land, Landlord and Tenant understand that Morso
Holding Co., a Delaware corporation (“Morso”), will be providing a side letter to Tenant addressing
any restrictions being imposed upon the Park Sign. Landlord shall not be responsible, nor have any
liability, for any enforcement of the terms of such side letter. Except for the Park Sign and the
right of Landlord to place a “for Lease” sign on the Land at a location which is reasonably
acceptable to Tenant, if Tenant does not timely exercise any renewal option, Landlord shall place
no other signage on the Project without Tenant’s consent, in Tenant’s sole discretion.

     Section 16.13. Consents and Approvals. Whenever under this Lease the consent or
approval of either Landlord or Tenant is required, such consent or approval shall not be
unreasonably withheld, conditioned or delayed, unless otherwise specifically provided in this
Lease.

     Section 16.14. Time. TIME IS OF THE ESSENCE OF EACH TERM AND PROVISION OF THIS LEASE.

     Section 16.15. Patriot Act. Each of Landlord and Tenant, each as to itself, hereby
represents its compliance with all applicable anti-money laundering laws, including, without
limitation, the USA Patriot Act, and the laws administered by the United States Treasury
Department’s Office of Foreign Assets Control, including, without limitation, Executive Order
13224 (“Executive Order”). Each of Landlord and Tenant further represents (i) that it is not, and
it is not owned or controlled directly or indirectly by any person or entity, on the SDN List
published by the United States Treasury Department’s Office of Foreign Assets Control and (ii)
that it is not a person otherwise identified by government or legal authority as a person with
whom a U.S. Person is prohibited from transacting business. As of the date hereof, a list of such
designations and the text of the Executive Order are published under the internet website address
www.ustreas.gov/offices/enforcement/ofac.

     Section 16.16. Agency Disclosure. Tenant acknowledges having previously received the
Agency Disclosure Statement attached hereto as Exhibit E. The broker set forth in
Section l.01(j) above, its agents and employees, have represented only Landlord, and have
not in any way represented Tenant, in the marketing, negotiation, and completion of this lease
transaction.

     Section 16.17. Contingencies. [Intentionally Omitted].

     Section 16.18. Counterpart Signatures; Facsimile Signatures. This Lease may be
executed in counterparts, each of which shall be an original, but all of which, taken together,
shall constitute one and the same instrument. Transmission of a facsimile signature page (by
telephone facsimile transmission or electronic mail) shall have the same binding effect as
delivery of an original counterpart, but the parties agree to promptly deliver original
counterpart signatures for confirmatory purposes only.

     Section 16.19. Exhibits and Schedules. All Exhibits, Schedules, Riders, Attachments
and Addenda attached hereto, if any, and identified with this Lease are incorporated herein by
this reference as if fully set forth herein.

     Section 16.20. Roof Rights. Tenant shall have the right during the Lease Term to
install, operate, maintain and replace cellular communications antennae, signal repeaters,
satellite dishes and/or telecommunication equipment upon the roof of the Building without the
Landlord’s consent. Tenant shall be responsible for obtaining all necessary permits for such
rooftop use, and Tenant’s installations shall conform to all applicable Laws. At the expiration or
sooner termination of the Lease Term, Tenant shall remove all such equipment from the roof(s), and
repair any damage to the roof(s) caused by such

19

 

installation and/or removal. Tenant shall be responsible for all costs and expenses relating to
equipment installation, maintenance, utilities and removal of such equipment, including (without
limitation) the repair of any damage to the roof caused by such installation, operation,
maintenance and removal. Tenant shall have the exclusive right to use and occupancy of the roof of
the Building and any exterior walls of the Building, provided, Tenant shall nevertheless be subject
to obtaining Landlord’s written consent for rights not specifically granted under this Lease.

     Section 16.21. Automatic Extension. In the event, following the exercise by Tenant or
its assignee of Tenant’s option to purchase the real property adjacent to the Land (the “Adjacent
Land”), Tenant, or any of its affiliates enters into a lease (the “Adjacent Lease”) for a building
located thereon and/or on the Land, as depicted in Exhibit F attached hereto and
incorporated herein by reference or otherwise pursuant to this Section 16.21 and
Section 16.22, and provided that the term of the Adjacent Lease is longer than the Lease
Term, the Lease Term shall be extended to be coterminous with the term of the Adjacent Lease. The
Minimum Annual Rent during such extended term shall be an amount equal to ninety-five percent (95%)
of the Minimum Annual Rent then being quoted by Landlord to prospective renewal tenants of the
Building for space of comparable size and quality and with similar or equivalent improvements as
are found in the Building, and if none, then in similar buildings in the Park; provided, however,
that in no event shall the Minimum Annual Rent during such extension term be less than the highest
Minimum Annual Rent payable during the immediately preceding term. The Monthly Rental Installments
shall be an amount equal to one-twelfth (1/12) of the Minimum Annual Rent for such extension term
and shall be paid at the same time and in the same manner as provided in the Lease. Tenant agrees
that if Landlord is not the landlord under the Adjacent Lease, Tenant shall provide Landlord with a
copy of the Adjacent Lease within fifteen (15) days of the full execution thereof.

     Section 16.22. Expansion on Adjacent Land. In the event Tenant or its assignee (in
such capacity, the “Adjacent Land Owner”) exercises its option to purchase the Adjacent Land,
Tenant and Landlord acknowledge that Tenant may desire to have the expansion building constructed
partially on the Land and partially on the Adjacent Land, as illustrated on Exhibit F,
which exhibit is attached solely for purposes of illustration and shall not bind Landlord or Tenant
to any future expansion plan, or otherwise in a manner which results in the expansion building
being located partially on the Adjacent Land and partially on the Land. Upon Tenant’s written
request, Landlord shall cooperate in good faith with the Adjacent Land Owner at no cost or expense
to Landlord, (including, but not limited to, attorney fees, transfer fees, utility relocation
costs, and due diligence expenses), by either, at Landlord’s option, (a) exchanging with the
Adjacent Land Owner a portion of the Land for up to an equal amount of the Adjacent Land; or (b)
conveying a portion of the Land to the Adjacent Land Owner without accepting a conveyance of any
portion of the Adjacent Land and entering an easement agreement in form reasonably satisfactory to
Landlord, as may be necessary for accommodating the parking needs for the Building and expansion
building. Landlord’s obligations under this Section 16.22 are subject to obtaining any applicable
lender approvals, and any exchange or granting of easements shall additionally be in compliance
with and subject to all laws, governmental regulations, and matters of record in Office of the
Recorder of Franklin County, Ohio. Landlord agrees that it will make a good faith effort to obtain
all approvals necessary from its lenders.

     Section 16.23. Incentive Money Pass-Through. Landlord represents to Tenant that, in
connection with Landlord’s acquisition of the Land, Landlord has negotiated with MORSO Holding Co.,
the seller of the Land (“Seller”), the right to receive 57.143% (up to a maximum amount of One
Million Dollars ($1,000,000.00)) of any money that the Seller receives from the City of Columbus,
Ohio as reimbursement for certain roadway and utility improvements being constructed by the Seller.
Landlord agrees that any such money, to the extent actually received by Landlord from the Seller,
shall be promptly paid by Landlord to Tenant as and when received. Landlord shall have no liability
to Tenant due to the non-receipt of any such funds from the Seller, and in no event shall Tenant
have the right to off-set any such amounts against the rent payable hereunder. Landlord shall make
commercially reasonable efforts to enforce the obligation of Seller (under that Real Estate
Purchase Agreement dated August 25, 2006) to pass through to Landlord such reimbursed funds,
provided such enforcement is not at Landlord’s expense.

[SIGNATURES CONTAINED ON THE FOLLOWING PAGES]

20

 

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

	 	 	 	 	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	ADS PLACE PHASE I, LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Duke Construction Limited Partnership, an

Indiana limited partnership, its Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Duke Business Centers Corporation, an

Indiana corporation, its general partner
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Printed: James T. Clark	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Title: Sr. V.P.	 	 

STATE OF OHIO

COUNTY OF FRANKLIN

Before me, a Notary Public in and for said County and State, personally appeared James
T. Clark by me known to be the Sr. V.P. of Duke Business Centers Corporation, an Indiana
corporation, the general partner of Duke Construction Limited Partnership, an Indiana limited
partnership, the Manager of ADS PLACE PHASE I, LLC, a Delaware limited liability company, who
acknowledged the execution of the foregoing “Lease Agreement” on behalf of said company.

     WITNESS my hand and Notarial Seal this 25th day of August 2006.

	 	 	 
	 

	 	Notary Public
	 
	 	 
	 

	 	Printed Signature: Teresa L. Ross

My Commission Expires: June 23, 2007

My County of Residence: Franklin

[SIGNATURES CONTAINED ON THE FOLLOWING PAGES]

 

 

	 	 	 
	 

	 	TENANT:
	 
	 	 
	 

	 	ADS ALLIANCE DATA SYSTEMS, INC., a Delaware
corporation
	 
	 	 
	 

	 	By:
	 
	 	 
	 

	 	Printed: Daniel T. Groomes
	 
	 	 
	 

	 	Title: Sr. Vice President

	 	 	 	 	 
	STATE OF OHIO
	 	 	 	 
	 

	 	) SS:

	COUNTY OF FRANKLIN

	 	)	 	 

Before me, a Notary Public in and for said County and State, personally appeared
Daniel Groomes by me known to be the Senior Vice President of Alliance Data, who
acknowledged the execution of the foregoing “Lease Agreement” on behalf of said Delaware
corporation.

     WITNESS my hand and Notarial Seal this 18th day of August, 2006.

	 	 	 	 	 
	 

	 	 

	 	 
	 

	 	Notary Public	 	 
	 
	 	 	 	 
	 

	 	Judith Belba	 	 
	 

	 	Printed Signature	 	 

My Commission Expires: 07/09/2010

My County of Residence: Franklin

 

 

PHG/JLE/dj

01/18/07

FIRST LEASE AMENDMENT

     THIS
FIRST LEASE AMENDMENT (the “Amendment”) is executed this
___ day of January,
2007, by and between ADS PLACE PHASE I, LLC, a Delaware limited liability company (“Landlord”), ADS
ALLIANCE DATA SYSTEMS, INC., a Delaware corporation (“Tenant”).

WITNESSETH:

     WHEREAS, Landlord and Tenant entered into a certain lease dated August 25, 2006 (the
“Lease”), whereby Tenant leased from Landlord certain premises consisting of approximately
198,602 rentable square feet of space (the “Leased Premises”) located in an office building to
be constructed at Easton, Franklin County, Columbus, Ohio; and

     WHEREAS, Landlord and Tenant desire to amend the Lease whereby Alliance Data Systems
Corporation, a. Delaware corporation (“Alliance”), will be tire guarantor to the Lease,
all as more particularly set forth herein; .

     NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other valuable consideration, the
receipt and adequacy which is hereby acknowledged, and the foregoing premises, the mutual covenants
herein contained and each act performed hereunder by the parties, Landlord and Tenant hereby enter
into this Amendment.

     1. Incorporation of Recitals. The above recitals are hereby incorporated into this
Amendment as if fully set forth herein.

     2. Amendment of Section 1.01.” Basic Lease Provisions and Definitions.
Section 1.01H of the Lease is hereby deleted in its entirety and the following is
substituted in lieu thereof:

          “H. Guarantor: Alliance Data Systems Corporation, a Delaware corporation.”

     3. Amendment of Section 16.03. Guaranty. Section 16.03 of the Lease is
hereby amended by incorporating the following:

     “In consideration of Landlord’s leasing the Leased Premises to Tenant, Tenant shall
provide Landlord with a Guaranty of Lease in the form attached hereto as Exhibit
H, executed by the Guarantor.”

     4. Representations and Warranties. The undersigned represents and warrants to Landlord
that (i) Tenant is duly organized, validly existing and in good standing in accordance with
the laws of the state under which it is organized; (ii) all action necessary to authorize the execution of
this Amendment has been taken by Tenant; and (iii) the individual executing and delivering this Amendment on
behalf of Tenant has been authorized to do so, and such execution and delivery shall bind Tenant. Tenant, at
Landlord’s request, shall provide Landlord with evidence of such authority.

 

 

     5. Examination of Amendment. Submission of this instrument for examination or
signature to Tenant does not constitute a reservation or option, and it is not effective until
execution by and delivery to Landlord and Tenant.

     6. Definitions. Except as otherwise provided herein, the capitalized terms used
in this Amendment shall have the definitions set forth in the Lease.

     7. Incorporation. This Amendment shall be incorporated into and made a part of the
Lease, and all provisions of the Lease not expressly modified or amended hereby shall remain in
full force and effect.

[SIGNATURES CONTAINED ON THE FOLLOWING PAGES]

-2-

 

 

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

	 	 	 	 	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	ADS PLACE PHASE I, LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Duke Construction Limited Partnership, an

Indiana limited partnership, its Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Duke Business Centers Corporation, an

Indiana corporation, its general partner
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Printed: James T. Clark	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Title: Sr. V.P.	 	 

	 	 	 	 	 
	STATE OF OHIO

	) SS:	 
	 
	 	 	 	 
	COUNTY OF FRANKLIN

	)	 	 	 

     Before me, a Notary Public in and for said County and State, personally appeared  James T. Clark, by me known to be the Sr. V.P., of Duke Business Centers Corporation,
an Indiana corporation, the general partner of Duke Construction Limited Partnership, the manager
of ADS Place Phase I, LLC, a Delaware limited liability company, who acknowledged the execution of
the foregoing “First Lease Amendment” on behalf of said company.

     WITNESS my hand and Notarial Seal this 2nd day of February, 2007.

	 	 	 
	 

	 	Notary Public                                                            
	 
	 	 
	My Commission Expires:
	 	 
	 

	 	Printed Signature: Lauren H. McElhaney
	10/19/09
	 	 
	 
	 	 
	My County of Residence:
	 	 
	 
	 	 
	Franklin
	 	 

-3-

 

 

	 	 	 
	 

	 	TENANT:
	 

	 	ADS ALLIANCE DATA SYSTEMS, INC,
	 

	 	a Delaware corporation
	 
	 	 
	 

	 	By:                                         
	 
	 	 
	 

	 	Printed: Daniel T. Groomes
	 
	 	 
	 

	 	Title: Sr. Vice President

STATE OF OHIO

COUNTY OF

FRANKLIN

  Before me, a Notary Public in and for said County and State, personally
appeared Daniel T. Groomes, by me known to be the Sr. Vice President, of ADS Alliance
Data Systems, Inc., a Delaware corporation, who acknowledged the execution of the foregoing “First
Lease Amendment” on behalf of said corporation.

     WITNESS my hand and Notarial Seal this 1st day of February, 2007.

Notary Public:                                         

Printed Signature: Nancy C. Wiseman

My Commission Expires: 06/28/2009

My County of Residence: Franklin

-4-

 

EXHIBIT H

UNCONDITIONAL GUARANTY OF LEASE

     This
Unconditional Guaranty of Lease is entered into as of the ___ day of January, 2007, by the
undersigned, ALLIANCE DATA SYSTEMS CORPORATION, a Delaware corporation (“Guarantor”).

RECITALS

     WHEREAS, ADS ALLIANCE DATA SYSTEMS, INC., a Delaware corporation (“Tenant”) entered into a
certain Lease with ADS PLACE PHASE I, LLC, a Delaware limited liability company (“Landlord”), for
certain space located in an office building to be constructed at Easton, Franklin County, Columbus,
Ohio (together with the Amendment, defined below, the “Lease”); and

     WHEREAS, Landlord and Tenant are contemporaneously entering into an amendment -(“Amendment”)
to the Lease naming Guarantor and that Guarantor guarantees the obligations upon the terms and
conditions set forth below; and

     WHEREAS, Guarantor is willing and agrees to enter into this Unconditional Guaranty of Lease
upon the following terms and conditions; and

     WHEREAS, Guarantor is the parent company of Tenant and will be benefited by the Lease;

     NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees
as follows:

     1. Guarantor hereby becomes surety for and unconditionally guarantees the prompt
payment of all rents, additional rents and other sums to be paid by Tenant under the terms of
the Lease, including any renewals or extensions thereof; (such payment obligations to be referred to
collectively as “Obligations”), hi the event Tenant defaults in the performance of the Obligations, Guarantor
hereby promises and agrees to pay to Landlord all rents and any arrearages thereof-and any other
amounts that may be or become due.’

     2. As conditions of liability pursuant to this Guaranty, Guarantor hereby unconditionally
waives (a) any notice of default by Tenant in the payment of rent or any other amount or any other
term, covenant or condition of the Lease; (b) any requirement that Landlord exercise or exhaust its
rights and remedies against Tenant or against any person, firm or corporation prior to enforcing
its rights against Guarantor, and (c) any and all rights of reimbursement, indemnity, subrogation
or otherwise which, upon payment under this Guaranty, Guarantor may have against Tenant.

     3. Landlord and Tenant may, without notice to Guarantor, and Guarantor hereby consents
thereto, modify or otherwise change or alter the terms and conditions of the Lease.

-5-

 

     4. Guarantor hereby agrees, upon the request of Landlord, to execute, acknowledge and
deliver to Landlord a statement in writing certifying, if this be the fact, that this Guaranty
of the referenced Lease is unmodified, in full force and effect, and there are no defenses or offsets
thereto; certifying that the referenced Lease is unmodified, in full force and effect, and there are no
defenses or offsets to such Lease (or if modified, that the Lease is in full force and effect as modified
and that this Guaranty extends to and fully covers such Lease, as modified); and certifying the dates to
which Minimum Annual Rent, Annual Rental Adjustment, if any, and any other additional rentals have
been paid,

     5. In the event Tenant fails during the term of this Lease to pay any rent, additional rent
or other payments when due, Guarantor, upon demand of Landlord, shall make such payments and
perform such covenants as if they constituted the direct and primary obligations of Guarantor.

     6. The rights and obligations created by this Guaranty shall inure to the benefit of and be
binding upon the successors, assigns and legal representatives of Guarantor and Landlord,

     7. Anything herein or in the Lease to the contrary notwithstanding, Guarantor hereby
acknowledges and agrees that any security deposit or other credit in favor of the Tenant may be
applied to cure any Tenant default or offset any damages incurred by Landlord under the Lease, as
Landlord determines in its sole and absolute discretion, and Landlord shall not be obligated to
apply any such deposit or credit to any such default or damages before bringing any action or
pursuing any remedy available to Landlord against Guarantor. Guarantor further acknowledges that
its liability under this Guaranty shall not be affected in any manner by such deposit or credit, or
Landlord’s application thereof.

[SIGNATURES CONTAINED ON THE FOLLOWING PAGES]

-6-

 

     IN WITNESS WHEREOF, Guarantor has executed this Unconditional Guaranty of Lease as of the
date set forth above.

	 	 	 	 	 
	 

	 	 	 	“GUARANTOR”
	 
	 	 	 	 
	 

	 	 	 	ALLIANCE DATA SYSTEMS CORPORATION,
	 

	 	 	 	a Delaware corporation
	 
	 	 	 	 
	 

	 	 	 	By:
	 
	 	 	 	 
	 

	 	 	 	Printed: Michael D. Kubic
	 
	 	 	 	 
	 

	 	 	 	Title: Senior Vice President
	 
	 	 	 	 
	 

	 	 	 	Federal I.D. No.: 31-1429215
	 
	 	 	 	 
	STATE OF TEXAS
	 	 	 	 
	 

	 	)SS:	 	 
	COUNTY OF COLLIN
	 	 	 	 

     Before me, a Notary Public in and for said County and State, personally-appeared
Michael D. Kubic, by me known and by me known to be the Senior Vice President of Alliance
Data Systems Corporation, a Delaware corporation, who acknowledged the execution of the above and
foregoing Unconditional Guaranty of Lease on behalf of said corporation.

WITNESS my hand and Notarial Seal this 29th day of January, 2007

	 	 	 
	 

	 	Notary Public:                                         
	 
	 	 
	 

	 	Printed Signature : Kelli W. Hunt
	 
	 	 
	My Commission Expires: 8-1-2007
	 	 
	 
	 	 
	My County of Residence: Dallas
	 	 

-7-exv10w26

 

Exhibit 10.26

ALLIANCE DATA

2007 Incentive
Compensation Plan

for Retail and Alliance Data

Consolidated

(As Amended and Restated Effective January 1, 2007)

 

 

Table of Contents

	 	 	 	 	 
	Plan Philosophy
	 	 	3	 
	Effective Date
	 	 	3	 
	Eligibility
	 	 	3	 
	Base Compensation Used in Calculating IC Payout
	 	 	4	 
	Determining IC Targets
	 	 	4	 
	IC Components
	 	 	4	 
	Standard Weightings Chart for IC Components
	 	 	6	 
	Determining Payment Calculations
	 	 	7	 
	Timing of Payment
	 	 	8	 
	Status Changes That May Affect IC Targets and Payouts
	 	 	8	 
	Other Terms and Conditions
	 	 	10	 
	Attachment A —  Revenue and EBITDA Performance/Payout Table
	 	 	A-1	 
	Attachment B —  Associate Satisfaction and LOB Specific Measures Performance/Payout Table
	 	 	B-1	 
	Attachment B — Individual Expectations Performance/Payout Table
	 	 	C-1	 

Effective January 1 — December 31, 2007

2

 

Plan Philosophy

The intent of the Alliance Data Incentive Compensation (“IC”) Plan (“Plan”) is to:

	•	 	Provide IC to round out an eligible associate’s total compensation package in order to attract and retain high
performing associates;
	 
	•	 	Improve organizational performance by driving financial and individual performance and increasing Associate
Satisfaction;
	 
	•	 	Improve the alignment between strategic imperatives and initiatives with the Alliance Data Scorecard; and
	 
	•	 	Provide an opportunity for associates to share in the success they help create.

Participation in this Plan reflects the importance of an associate’s position and the impact that
the associate’s performance can have on the success of the Company.

Effective Date 

The Plan Year is January 1, 2007 through December 31, 2007.

Eligibility

Subject to the provisions of this Plan, Associates are eligible to receive IC under this Plan
if they are:

	•	 	Employed by Alliance Data Systems Corporation or any of its subsidiaries (collectively, the “Company”) and are either
(a) a member of the Alliance Data Senior Leadership Team, as defined by the title Director through Senior Vice
President, or (b) in an Exempt position that is designated by the Vice President of Corporate Compensation as IC
eligible (currently jobs in pay bands K-Q);
	 
	•	 	Employed or promoted into an IC eligible position by the Company before October 1, 2007;
	 
	•	 	On active status on the date of the award distribution or are eligible under the guidelines for retirement, disability
or leave of absence; and
	 
	•	 	Designated by supervisor as having an Incentive Compensation target as a component of their overall pay package.

In the case of part-time associates in one of the specified pay grades listed above, they must be
working a schedule equal to a minimum of 30 hours per week in order to be eligible for this IC
Plan.

Associates are not eligible if they:

	•	 	Do not meet the eligibility requirements listed above;
	 
	•	 	Are participating in a sales commission or other incentive plan, unless approved by the appropriate Executive Vice
President of a Line of Business (“LOB”) or of a Business Support Group (“BSG”) and confirmed by the LOB/BSG Human
Resources Executive and the Vice President of Corporate Compensation;
	 
	•	 	Are temporary or on-call associates or contractors;
	 
	•	 	Are hired on or after October 1, 2007 or are promoted into an IC eligible pay grade on or after October 1, 2007; or

Effective January 1 — December 31, 2007

3

 

	•	 	Are on a documented performance improvement plan as of the date of award distribution.

Being eligible for the IC Plan does not mean associates automatically participate in the program.
The associate’s manager, with appropriate approvals, must specifically designate that incentive
compensation is a component of the associate’s overall pay package.

Base Compensation Used in Calculating IC Payout

Annualized base pay as of October 1, 2007 will be used as part of the IC calculation. The IC
target percentage(s) will be applied to October 1, 2007 base salary for purposes of calculating the
dollar target amount.

Determining IC Targets

Each participant has an IC target. IC targets are determined by the participant’s manager
using the guidelines established by the Vice President of Corporate Compensation in the following
table:

	 	 	 	 	 
	Band Level	 	IC Target
	(Senior Vice President) Q
	 	 	0% - 45	%
	(Vice President) P
	 	 	0% - 35	%
	(Director/Senior Director) O
	 	 	0% - 25	%
	M & N
	 	 	0% - 15	%
	K & L
	 	 	0% - 10	%

IC targets are set in 5% increments. When determining the appropriate target, the
following are considered:

	•	 	The associate’s anticipated contribution to the organization’s success; and
	 
	•	 	Targeted total compensation package that is competitive with similar positions in the appropriate labor market or
industry.

IC targets will be set at the beginning of the Plan year or at time of hire. If the IC target
percentage changes, the manager will explain how the target will be prorated for payout purposes
(if appropriate) and whether or not the performance expectations and weightings will change for the
current Plan year.

IC Components

All performance goals should be established and communicated to the participant at the
beginning of the Plan year or as soon as feasible after becoming a participant in the Plan. The
degrees to which these performance goals are accomplished have an impact on the actual incentive
earned from the Plan.

Alliance Data Revenue and EBITDA Targets: The Revenue and Earnings Before Interest, Taxes,
Depreciation and Amortization (“EBITDA”) targets generally make up 25%-75% of a participant’s IC
payment (see Standard Weightings Chart below). LOBs are not required to have an Alliance Data Revenue or
EBITDA component if they utilize LOB Revenue and EBITDA targets.

Effective January 1 — December 31, 2007

4

 

LOB Revenue and EBITDA Targets: There are a number of financial measures that can be used to
determine success for a particular area or individual. The appropriate Executive Vice President,
along with the LOB Human Resources Executive and the Vice President of Corporate Compensation will
determine if sub-measures will be used for a particular LOB or a particular individual. However,
it is intended that the Board of Directors approve the achievement of LOB Revenue and EBITDA for
payout purposes.

Associate Satisfaction Index: The annual administration of the Associate Survey and the
tracking of data (i.e., improvement expectations) are designed to motivate ongoing attention to
issues that affect quality of client service, as well as the development and retention of
associates. The Associate Satisfaction Index (“ASI”) is a component of the Associate Survey
process. The ASI component is designed to recognize and incent critical non-financial
organizational factors that contribute to sustainable business performance and provide a
competitive advantage in recruiting, developing and retaining high performing associates. Targets
are set at the beginning of each year along with a payout schedule.

Individual Expectations: Participants may have a portion of their IC payments based upon the
achievement of individual expectations or team strategic imperatives (or action steps to accomplish
the strategic imperatives) as determined between the participant and his or her manager.
Achievement must fall into one of three (3) categories: accomplishments fall below expectations;
fully meets and/or exceeds the requirements; or has achieved/contributed well beyond expectations.
The percentage of payout will be 80%, 100% or 110% depending on the level of achievement. If
performance/accomplishments fall below 80% achievement, no payout will be made for the Individual
Expectation component.

Associate performance is defined as obtaining the needed results of the job and living the Company
values. The associate’s manager will focus on the following factors to determine whether and to
what extent the associate met his/her yearly goals for purposes of IC:

	 	•	 	Results - To what extent were results at, above, or below expectations and/or standards?
	 
	 	•	 	Values - To what extent did the associate demonstrate/live the values?

Differentiation of performance is considered within three broad levels. Performance toward
objectives and manager’s expectations within each category can be defined by meeting some or all of
the specified characteristics below:

	 	•	 	Accomplishments fall below expectations: associate completes 80 — 95% of individual
objectives and expectations. Associate falls short of completing all of the objectives
that are important to business strategy. Quality of work is less than expected and/or
work falls short of productivity, financial or schedule expectations.
	 
	 	•	 	Fully meets and/or exceeds the requirements: associate completes up to 110% of
objectives or at least 95% of objectives with extenuating circumstances. The associate’s
completed objectives are closely tied to business strategy and success. The associate’s
work is of sufficient quality and meets productivity, financial and schedule
expectations.
	 
	 	•	 	Achieved/contributed well beyond expectations: associate completes more objectives
than committed to in all cases. Completed objectives are most important to business
strategy. Work exceeds all quality requirements and performed more efficiently, cheaply
and/or quickly than expected.

Effective January 1 — December 31, 2007

5

 

Less than 80% completion of individual objectives is below minimum level of performance and no IC
payout will be made for the Individual Expectation component.

Standard Weightings Chart for IC Components

IC objectives are weighted to drive financial and individual performance and increase
Associate Satisfaction. LOBs have the ability to use specific components that closely reflect
Alliance Data Scorecard measurements. Standard weightings have been established, however,
LOBs/BSGs may adjust the standard weightings and adjust the standard components to include
measurable financial drivers, such as bad debt or specific client revenue goals, with review and
approval by the appropriate Executive Vice President, along with the LOB/BSG Human Resources
Executive and the Vice President of Corporate Compensation. All measures that deviate from the
standard financial measures must be objective and quantifiable.

The participant’s band/job level as of October 1, 2007 will be used to determine the overall
weightings. The standard components and weightings are listed in the chart below. In certain
cases, LOBs/BSGs may use discretion to determine the overall weightings with the approval of the
associate’s supervisor and the LOB/BSGs Human Resources Executive.

Approved changes to the standard components and weightings should be communicated to associates as
soon as feasible after the beginning of the plan year.

2007 IC Plan

Standard Components and Weightings

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Senior	 	Exempts with Direct	 	All
	 	 	 	 	 	 	Leadership	 	Supervisory	 	Other
	 	 	 	 	 	 	Team1	 	Responsibility	 	Exempts2
	 
	 	LOB EBITDA	 	 	50	%	 	 	25	%	 	 	25	%
	 
	 	LOB Revenue	 	 	25	%	 	 	25	%	 	 	25	%
	LOB
	 	Associate Satisfaction3	 	 	25	%	 	 	25	%	 	 	0	%
	 
	 	Individual Expectations4	 	 	0	%	 	 	25	%	 	 	50	%
	 
	 	Alliance Data EBITDA	 	 	50	%	 	 	25	%	 	 	25	%
	 
	 	Alliance Data Revenue	 	 	25	%	 	 	25	%	 	 	25	%
	BSG
	 	Associate Satisfaction3	 	 	25	%	 	 	25	%	 	 	0	%
	 
	 	Individual Expectations4	 	 	0	%	 	 	25	%	 	 	50	%

 

			
	1	 	The LOB/BSG executive has some flexibility to establish targets that are
important for the success of his or her respective area. The Individual Expectations weighting
should not be used for SLT members unless it is used to drive financial performance. Any changes
to the standard components, weightings or payout tables should be sent to the Vice President of
Corporate Compensation for approval by the appropriate Executive Vice President, along with the
LOB/BSG Human Resources Executive.
	 
	2	 	The LOB/BSG executive has some flexibility in reassigning weightings with approval
from the Vice President of Corporate Compensation.

Effective January 1 — December 31, 2007

6

 

			
	3	 	Some participants, such as National Account Managers (“NAMs”), may have more emphasis
on client relationships than Associate Satisfaction. LOB/BSG executives can determine how they
want to distribute the weightings for these positions.
	 
	4	 	Eligible exempt associates below the Director level should have Individual
Expectations that support strategic imperatives ensuring the success of their LOB/BSG and the
Company.

Determining Payment Calculations

Payment calculations are determined as provided below. With proper approval from the Vice
President of Corporate Compensation, the appropriate Executive Vice President, and the LOB Human
Resources Executive, LOBs may provide for an alternate payout table for specific LOB measures
except for LOB Revenue or EBTIDA. LOB Revenue and EBITDA must follow the table specified in
Attachment B. A minimum of 100% achievement must be met for LOB Revenue and EBTIDA before any
other measures will payout over 100%.

Attachment A: Performance/Payout Table for Revenue and EBITDA

     This table identifies the relationship between level of performance and the percentage to be
paid for the achievement of the Alliance Data Revenue, Alliance Data EBITDA, LOB Revenue and LOB
EBITDA. A minimum of 90% must be achieved for any payment to be received; performance of 110% or
greater receives the maximum payment of 150%. Percentages are rounded to the nearer whole number.

Attachment B: Performance/Payout Table for Associate Satisfaction and other measures as approved

     This table identifies the relationship between level of performance and percentage to be paid
for the achievement of associate satisfaction and any other LOB specific financial measures as
approved. For BSGs, both the Alliance Data EBITDA and Alliance Data Revenue targets must
be achieved at 100% or greater in order for ASI to be paid above 100% of target. For LOBs, both
the LOB EBITDA and LOB Revenue targets must be achieved at 100% or greater in order for ASI
and any LOB specific financial measures to be paid above 100% of target.

Attachment C: Performance/Payout Table for Individual Expectations

     This table identifies the relationship between level of performance and the percentage to be
paid for the achievement of Individual Expectations. A minimum of 80% accomplishment of standard
objectives must be achieved for any payment to be received.

     For BSGs, both the Alliance Data EBITDA and Alliance Data Revenue targets must be
achieved at 100% or greater in order for Individual Expectations to be paid above 100% of target.
For LOBs, both the LOB EBITDA and LOB Revenue targets must be achieved at 100% or greater
in order for Individual Expectations to be paid above 100% of target.

Effective January 1 — December 31, 2007

7

 

Timing of Payment

IC earned for the 2007 Plan year is paid in the first quarter of the following year. A
participant must be actively employed on the date payment is made to receive his or her award. Any
participant who is on an approved leave of absence or disability leave but is still on active
status will receive his or her payment even if he or she is not actively at work on the date
payment is made.

Status Changes That May Affect IC Targets and Payout

Status changes can affect the amount of incentive a participant receives. Status changes
include:

	•	 	Transfers;
	 
	•	 	New Hires;
	 
	•	 	IC Target Changes;
	 
	•	 	Leaves of Absence; and
	 
	•	 	Terminations.

Transfers: The LOB or BSG a participant is assigned to as of October 1, 2007 will be used to
determine any payments dependent upon LOB/BSG level of performance (see Standard Weightings Chart).
Year-end performance for the LOB/BSG will be used to calculate the incentive amount to be paid for
this component. No prorating will be done for the amount of time spent in another LOB/BSG or in a
different IC eligible grade over the Plan year without prior approval of the appropriate Executive
Vice President, along with the LOB/BSG Human Resources Executive and the Vice President of
Corporate Compensation.

For the ASI component, leaders who have moved or transferred during the course of the year, and who
could therefore have their compensation tied to different reporting groups, will be reviewed as
follows:

	•	 	Determine where the associate spent the most time during the action planning cycle;
	 
	•	 	Assess where the associate had the greatest opportunity to influence Associate Satisfaction; and
	 
	•	 	Before the end of December, the appropriate HR Executive will make a report recommendation to the Vice President of
Corporate Compensation, to be approved by the appropriate Executive Vice President, along with the LOB/BSG Human
Resources Executive.

New Hires: For associates hired between January 1 and September 30, 2007 into an IC eligible
position, the base salary as of October 1, 2007 will be used to calculate the IC dollar target.
The dollar target will be prorated as follows:

	 	 	 	 	 
	Hired Between These Dates	 	Prorated Amount
	January 1 — March 31
	 	 	100%	 
	April 1 — June 30
	 	 	75%	 
	July 1 — September 30
	 	 	50%	 
	October 1 — December 31
	 	No IC

For example, if an associate is hired on March 12, the IC dollar target will not be prorated.
If an associate is hired on July 4, then the IC dollar target will be prorated by 50%.

Effective January 1 — December 31, 2007

8

 

IC Target Changes: For current Company associates, if there is a promotion or a grade level change
during the Plan year but before October 1 which results in either (a) an associate becoming newly
IC eligible or (b) a change in IC target, the IC target will be prorated according to the chart
below depending on the associate’s IC eligible effective date. Note: changes in IC targets after
October 1, 2007 will not be used to calculate IC payout for the 2007 Plan year.

	 	 	 	 	 
	IC Eligible Effective Date	 	Prorated Amount For
	Between These Dates	 	Old/New IC % Target
	January 1 — March 31
	 	 	0% / 100%	 
	April 1 — June 30
	 	 	25% / 75%	 
	July 1 — September 30
	 	 	50% / 50%	 
	October 1 — December 31
	 	 	100% / 0%	 

The base salary as of October 1 will be used to calculate the dollar target, even if there is
a corresponding change in base salary at the time of the promotion or IC target change. For
example, a grade level change in April results in an IC target change from 5% to 10% and a base
salary change from $35,000 to $40,000. The base salary on October 1 is $40,000, so that is the
salary used in the calculation. The IC dollar target is then calculated using the following
formula:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	10/01 Base	 	 	IC	 	 	Target	 	 	Prorate	 	 	Subtotal	 
	Old
	 	$	40,000	 	 	 	5	%	 	$	2,000	 	 	 	25	%	 	$	500	 
	New
	 	$	40,000	 	 	 	10	%	 	$	4,000	 	 	 	75	%	 	$	3,000	 
	TOTAL
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	3,500	 

The participant’s manager should communicate to the participant the new weightings of
financial and Individual Expectations (if applicable).

Leaves of Absence: If a participant takes a leave of absence in excess of twelve (12) weeks, either
paid or unpaid, during the Plan year, he or she will receive a prorated award. Leaves of absence
under twelve (12) weeks are not prorated. For any part of a week that a participant is on a leave
of absence over twelve (12) weeks, the IC payment will be prorated by one week. For instance, if a
participant is on leave for 12 weeks and 2 days, he or she will receive 51/52nds of the normal IC
payout. If a participant is on leave for 13 weeks and 2 days, then he or she will receive 50/52nds
of the normal IC payout and so on.

Terminations: If a participant terminates his or her position voluntarily or involuntarily during
the Plan year, he or she will not be eligible for an IC payment because he or she would not
be on active status on the date of the award distribution. If a participant retires, becomes
disabled or dies during the Plan year, he or she may be eligible for a prorated award at the
discretion of the appropriate Executive Vice President, along with the LOB/BSG Human Resources
Executive and the Vice President of Corporate Compensation. In the event of death, any incentive
award is made to the beneficiary named in the Company-paid life insurance program.

Effective January 1 — December 31, 2007

9

 

Other Terms and Conditions

	•	 	All decisions by the Company will be final in the
interpretation and administration of the Plan and shall lie
within the Company’s sole and absolute discretion. Decisions
shall be final, conclusive and binding on all parties
concerned.
	 
	•	 	This Plan does not constitute a contract for the
participant’s continued employment with the Company. All
Company associates are employed “at-will” which means either
the Company or the associate may terminate the employment
relationship at any time with or without cause.
	 
	•	 	Participant’s rights under the Plan may not be assigned or
transferred in any way, except as otherwise set forth herein.
	 
	•	 	The Alliance Data 2007 Incentive Compensation Plan may be
amended, modified, suspended or terminated by the Company at
any time, without prior consent by or prior notice to
associates. The Company at its sole discretion may change
objectives at any time without prior consent by or prior
notice to associates.
	 
	•	 	The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make
other segregation of assets to assure the payment of the
amounts under the Plan. Rights to the payment of amounts
under the Plan shall be no greater than the rights of the
Company’s general creditors.
	 
	•	 	Texas state law governs the validity, construction,
interpretation, administration and effect of the Plan and the
substantive laws, but not the choice of law rules of the
State of Texas, shall govern rights relating to the Plan.
	 
	•	 	Generally, all applicable employment and tax deductions plus
401(k) contribution deferrals will be withheld from the IC
payout.
	 
	•	 	No associate has the right nor is guaranteed the right to
participate in the Plan by virtue of being an associate or
fulfilling any specific position with the Company. Selection
for participation in the Plan is solely within the discretion
of the Company. The Company may offer participation in the
Plan to additional associates or terminate the participation
of any participant in the Plan at any time during the Plan
Year.
	 
	•	 	Revenues and earnings classified as “windfalls” or business
losses may or may not be excluded in whole or in part from
the calculation of Revenue and EBITDA at the discretion of
the Company.
	 
	•	 	Notice to participate in the Plan shall not impair or limit
the Company’s rights to transfer, promote or demote Plan
participants to other jobs or to terminate their employment,
nor shall it create any claim or right to receive any payment
under the Plan or any right to be retained in the employ of
the Company.
	 
	•	 	The Plan is established for the current fiscal year. There
shall be no obligation on the part of the Company to continue
the Plan in the same or modified form for any future years.
	 
	•	 	In the event that a participant has a dispute concerning the
administration of this Plan, it shall first be submitted in
writing to the Vice President of Corporate Compensation. In
the event that the Vice President of Corporate Compensation
does not provide a response satisfactory to the participant
within 30 business days, the participant may submit the
dispute in writing within five business days thereafter to
the EVP,

Effective January 1 — December 31, 2007

10

 

	 	 	Human Resources, whose decision regarding the
dispute shall be final and binding on each participant or
person claiming under the Plan.
	 
	•	 	The Plan is effective January 1, 2007, and supersedes and
replaces all previous IC Plans. All such previous plans,
unless earlier terminated, are terminated at midnight,
December 31, 2005. If not renewed by the Company, this Plan
will automatically terminate on December 31, 2007.
	 
	•	 	In the event an eligible associate’s performance falls
below satisfactory standards during the Plan year, the
associate may receive a reduced IC payment, at the discretion
of the Company, regardless of the performance results of the
Company, LOB, BSG or the ASI results (if applicable).
	 
	•	 	The Company, at its sole discretion, may adjust or
modify the methodology for calculating IC payments, the
eligibility for receiving IC payments, and the actual amount
of IC payments. All adjustments or modifications must be
approved by the EVP, Human Resources, the appropriate
Executive Vice President, the LOB/BSG Human Resources
Executive and the Vice President of Corporate Compensation.

Effective January 1 — December 31, 2007

11

 

Attachment A

PERFORMANCE/PAYOUT TABLE

FOR REVENUE and EBITDA

	 	 	 
	% of Objective(s)	 	%
	Achieved*	 	Payout*
	89% or less

	 	0%
	90%
	 	65%
	91%
	 	68.5%
	92%
	 	72%
	93%
	 	75.5%
	94%
	 	79%
	95%
	 	82.5%
	96%
	 	86%
	97%
	 	89.5%
	98%
	 	93%
	99%
	 	96.5%
	100%
	 	100%
	101%
	 	105%
	102%
	 	110%
	103%
	 	115%
	104%
	 	120%
	105%
	 	125%
	106%
	 	130%
	107%
	 	135%
	108%
	 	140%
	109%
	 	145%
	110% or greater
	 	150%

90% is the threshold for performance achievements to result in a payout.

100% is the target for performance achievements to receive 100% payout.

150% is the maximum payout level.

Effective January 1 — December 31, 2007

A-1

 

Attachment B

PERFORMANCE/PAYOUT TABLE

FOR ASSOCIATE SATISFACTION and LOB SPECIFIC MEASURES

	 	 	 
	% of Objective(s)	 	%
	Achieved*	 	Payout*
	79% or less
	 	0%
	80%
	 	65%
	81%
	 	67%
	82%
	 	69%
	83%
	 	70%
	84%
	 	72%
	85%
	 	74%
	86%
	 	76%
	87%
	 	77%
	88%
	 	79%
	89%
	 	81%
	90%
	 	83%
	91%
	 	84%
	92%
	 	86%
	93%
	 	88%
	94%
	 	89%
	95%
	 	91%
	96%
	 	93%
	97%
	 	95%
	98%
	 	96%
	99%
	 	98%
	100%
	 	100%
	101%
	 	102.5%
	102%
	 	105.0%
	103%
	 	107.5%
	104%
	 	110.0%
	105%
	 	112.5%
	106%
	 	115.0%
	107%
	 	117.5%
	108%
	 	120.0%
	109%
	 	122.5%
	110%
	 	125.0%
	111%
	 	127.5%
	112%
	 	130.0%
	113%
	 	132.5%
	114%
	 	135.0%
	115%
	 	137.5%
	116%
	 	140.0%
	117%
	 	142.5%
	118%
	 	145.0%
	119%
	 	147.5%
	120% or greater
	 	150.0%

80% is the threshold for performance achievements to result in a payout.

100% is the target for performance achievements to receive 100% payout.

150% is the maximum payout level.

For business support groups, both Alliance Data EBITDA and Alliance Data Revenue
targets must be achieved at 100% or greater in order for ASI to be paid above 100% of target. For
lines of business, both LOB EBITDA and LOB Revenue targets must be achieved at 100% or
greater in order for ASI or any LOB specific measure to be paid above 100% of target.

Effective January 1 — December 31, 2007

B-1

 

Attachment C

PERFORMANCE/PAYOUT TABLE

FOR INDIVIDUAL EXPECTATIONS

	 	 	 
	% of Objective(s)	 	%
	Achieved*	 	Payout*
	Below Minimum
	 	0%
	Accomplishments fall below expectations
	 	80%
	Fully meets and/or 

exceeds the 

requirements
	 	100%
	Has achieved/contributed well beyond expectations
	 	110%

80% performance is the threshold for performance achievements to result in a payout.

110% is the maximum payout level.

Fully meets and/or exceeds the requirements is the target for performance achievements to receive 100% payout.

For business support groups, both Alliance Data EBITDA and Alliance Data Revenue
targets must be achieved at 100% or greater in order for Individual Expectations to be paid above
100% of target. For lines of business, both LOB EBITDA and LOB Revenue targets must be
achieved at 100% or greater in order for Individual Expectations to be paid above 100% of target.

Effective January 1 — December 31, 2007

C-1

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