{"id":41901,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/building-lease-digimarc-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"building-lease-digimarc-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/land\/building-lease-digimarc-corp.html","title":{"rendered":"Building Lease – Digimarc Corp."},"content":{"rendered":"

FULL SERVICE LEASE <\/strong><\/p>\n

Date: March 22, 2004<\/u><\/strong><\/p>\n

Lessor: PS Business Parks, L.P., a California Limited Partnership<\/p>\n

Lessee: Digimarc Corporation, a Delaware Corporation<\/u><\/strong>\n<\/p>\n\n\n\n
\n

1.<\/p>\n<\/td>\n

\n

Lease Terms<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

1.01 The Premises is the Building whose address is 9405 SW Gemini
\nDrive, Beaverton, OR 97008<\/u><\/strong>. The Premises contains approximately
\n46,083<\/u><\/strong> rentable square feet and is shown on Exhibit
\n“A-1.” The Building contains approximately 46,083<\/u><\/strong>
\nrentable square feet and is shown on Exhibit “A-2”. The Project is depicted on
\nExhibit “A-3” and contains approximately 117,870
\n<\/u><\/strong>rentable square feet. The Property is depicted on Exhibit “A-4” and
\nis commonly referred to as Creekside Corporate Park<\/u><\/strong> and
\ncontains approximately 584,493<\/u><\/strong> rentable square feet.\n<\/p>\n

1.02 Lessee153s Notice Address: Lessee153s Notice Address is the address of the
\nPremises as stated in Paragraph 1.01 above.<\/p>\n

1.03 Lessor153s Notice Address: 15455 NW Greenbrier Parkway, Suite
\n245, Beaverton, OR 97006<\/u><\/strong>.<\/p>\n

1.04 Lessee153s Permitted Use: Lessee shall use the Premises only for the
\nfollowing purpose(s) and for no other purpose whatsoever: General office
\nuses<\/u>.<\/p>\n

1.05 Lease Term: The Lease Term commences on September 1,
\n2004<\/u><\/strong> or such other date as is determined by the provisions of this
\nLease (the “Commencement Date”) and ends on the final day of the
\n84th<\/u><\/strong> full calendar month thereafter.<\/p>\n

1.06 Base Rent: Base Rent shall be paid monthly in the amounts specified
\nbelow:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

$<\/strong><\/p>\n<\/td>\n

\n

0.00<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Beginning September 1, 2004<\/u><\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Ending February 28, 2005<\/u><\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

$<\/strong><\/p>\n<\/td>\n

\n

46,667<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Beginning March 1, 2005<\/u><\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Ending August 31, 2005<\/u><\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

$<\/strong><\/p>\n<\/td>\n

\n

63,287<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Beginning September 1, 2005<\/u><\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Ending August 31, 2006<\/u><\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

$<\/strong><\/p>\n<\/td>\n

\n

65,169<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Beginning September 1, 2006<\/u><\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Ending August 31, 2007<\/u><\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

$<\/strong><\/p>\n<\/td>\n

\n

67,128<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Beginning September 1, 2007<\/u><\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Ending August 31, 2008<\/u><\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

$<\/strong><\/p>\n<\/td>\n

\n

69,125<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Beginning September 1, 2008<\/u><\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Ending August 31, 2009<\/u><\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

$<\/strong><\/p>\n<\/td>\n

\n

71,237<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Beginning September 1, 2009<\/u><\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Ending August 31, 2010<\/u><\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

$<\/strong><\/p>\n<\/td>\n

\n

73,349<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Beginning September 1, 2010<\/u><\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Ending August 31, 2011<\/u><\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

1.07 Security Deposit: $ 75,000.00<\/u><\/strong><\/p>\n

1.08 Initial Monthly Rent Charges: Base Rent $46,667.00<\/strong>.\n<\/p>\n

1.09 Proportionate Share: Lessee153s Proportionate Share of the Property, which
\nrepresents the approximate Proportionate Share of the Premises to the Property,
\nis 7.8842<\/u><\/strong>%. Lessee153s Proportionate Share of the Project,
\nwhich represents the approximate Proportionate Share of the Premises to the
\nProject, is 39.0964%.<\/u><\/strong> Lessee153s Proportionate Share of
\nthe Building within which the Premises is located, which represents the
\napproximate Proportionate Share of the Premises to the Building, is
\n100<\/u><\/strong>%. Proportionate Share may be adjusted by Lessor
\nduring the Lease Term if the size of the Project, Premises or Building changes.\n<\/p>\n

1.10 Expense Base Year: 2005<\/u><\/strong>.<\/p>\n

1.11 Broker(s): Hume Myers Tenant Counsel L.L.C. for Lessee; Grubb
\n& Ellis for Lessor<\/u><\/strong>.<\/p>\n

1.12 Automatic Payments: Unless Lessor otherwise directs in writing, all
\npayments of Base Rent and the monthly estimated payments of Lessee153s
\nProportionate Share of Operating Expenses shall be made by electronic payment.
\nLessee shall execute such necessary and reasonable documents, provide<\/p>\n

1<\/p>\n

\n

such necessary and reasonable information, and follow such necessary and
\nreasonable procedures as are requested by Lessor from time to time to facilitate
\nsuch payments. If, by reason of insufficient funds or other reason, any such
\npayment is not fully made and received, such event shall be deemed a failure of
\nLessee to make the required payment. Payment shall be deemed made by Lessee on
\nthe date funds are actually received by Lessor; provided, if Lessee is then in
\ndefault, Lessor shall have the right to return all or a part of any payment
\nreceived within ten (10) business days of receipt, in which event the returned
\namount shall be deemed to have not been paid by Lessee or received by Lessor.
\nReceipt of any funds pursuant to this Paragraph shall not constitute a waiver by
\nLessor of any Default by Lessee whether or not such Default is known to Lessor.\n<\/p>\n\n\n\n
\n

2.<\/p>\n<\/td>\n

\n

Lease of Premises<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

2.01 Lessor leases to Lessee, and Lessee leases from Lessor, the Premises,
\nupon the terms of this Lease. The Premises are leased “AS IS” except only for
\nthe improvements, if any, which are to be constructed by Lessor pursuant to
\nExhibit “B.” Any such improvements to be constructed by Lessor pursuant to
\nExhibit “B” are herein referred to as “Lessor153s Work.” Except as provided
\nherein, Lessee acknowledges that neither Lessor nor any agent of Lessor has made
\nany representation or warranty regarding the Premises. The square footages set
\nforth in this Lease are approximate and agreed. Use of the terms “rentable” and
\n“usable” is for convenience only and represents Lessor153s interpretation of such
\nterms. Lessor will deliver the Premises to Lessee with existing plumbing,
\nelectrical, fire sprinkler, lighting, air conditioning, heating and mechanical
\nsystems located in the Premises, if any, in good working condition.<\/p>\n

2.02 Lessor153s Work, if any, shall be installed by Lessor in compliance with
\nall then applicable codes. Lessee, at its sole expense, agrees to comply with
\nall laws, codes, ordinances and other legal requirements (including covenants
\nand restrictions) applicable to the Premises (herein “Laws”); provided, however,
\nthat Lessor, in conjunction with the Lessor153s work, shall affect any repairs and
\nimprovements required under any Laws as of the Commencement Date. Lessee agrees
\nto cause the Premises to comply with all Laws, including by making any changes
\nto the Premises necessitated by any Lessee activity, including but not limited
\nto changes required by (a) any Lessee Improvements or Lessee Alterations (as
\ndefined below), or (b) any use of the Premises or Property by Lessee; provided,
\nLessor reserves the right to accomplish such changes itself at the expense of
\nLessee. If any activity of Lessee necessitates changes to the Project other than
\nthe Premises, then Lessor shall elect that Lessor accomplish the same at the
\nexpense of Lessee or that Lessee accomplish the same at its own expense.
\nNotwithstanding anything to the contrary herein, Lessee shall not be responsible
\nfor making any structural modifications to the Premises except to the extent
\nLessee153s space plan requires structural modifications.<\/p>\n

2.03 If for any reason Lessor cannot deliver possession of the Premises three
\n(3) weeks prior to the estimated Commencement Date of the Lease Term, Lessor
\nwill not be subject to any liability nor will the validity of this Lease be
\naffected in any manner. Rather, the Commencement Date shall be delayed until
\nthree (3) weeks after delivery of possession to allow Lessee to fixturize the
\nPremises in which event the expiration date of the Lease Term shall be extended
\nto include the same number of full calendar months as set forth in Paragraph 1
\nabove (plus any partial first month); provided, in the event delivery of
\npossession is delayed by any act, omission or request of Lessee, then the
\nPremises shall be deemed to have been delivered (and the Commencement Date shall
\noccur) on the earlier of the actual date of delivery or the date delivery would
\nhave occurred absent the number of days of such delay attributable to Lessee and
\nthe term shall then be for such number of full calendar months (plus any partial
\nfirst month). If for any reason possession of the Premises is not delivered on
\nthe scheduled Commencement Date set forth in Paragraph 1 above, Lessee may a)
\nreceive two (2) days free rent for each day of delay beyond the scheduled
\ncommencement date, and b) terminate this Lease by written notice given after a
\nforty-five (45) day period beyond the scheduled commencement date but prior to
\ndelivery of possession; provided, such forty-five (45) day period shall be
\nextended by (a) the number of days of delays attributable to Lessee (including
\nbut not limited to delays in approvals of plans or cost estimates, delays
\nrelated to changes in plans requested by Lessee whether or not approved by
\nLessor, delays caused by Lessee installing any “Lessee Improvements,” delays
\ncaused by other early entry or early occupancy by Lessee, and\/or other delays
\nattributable to Lessee), plus (b) the number of days of delays caused by events
\nbeyond the reasonable control of Lessor (including but not limited to fire,
\nearthquake, other casualty, inclement weather, acts of God, shortages of labor
\nor material, lead times on ordered items, strike, acts or omissions of
\ngovernment, and\/or delays in governmental permits, inspections or approvals).
\nAny such termination shall be without liability of Lessor to Lessee. Any such
\ntermination by Lessee shall be Lessee153s sole remedy for delay in delivery of
\npossession.<\/p>\n

2.04 Upon expiration or termination of this Lease, Lessee agrees to return
\nthe Premises to Lessor in the same condition as received by Lessee, normal wear
\nand tear excepted, with all removal, repair, and restoration duties of Lessee
\nbeing fully performed.<\/p>\n

2<\/p>\n

\n

2.05 Upon request made by Lessor following the Commencement Date, Lessee
\nshall execute and deliver an agreement setting forth the Commencement Date, the
\ndate upon which the Lease Term shall expire, and such other matters regarding
\nthe commencement of this Lease as Lessor shall request. If Lessee, with Lessor153s
\nprior written consent, occupies the Premises prior to the Commencement Date,
\nLessee153s occupancy of the Premises shall be subject to all the provisions of the
\nLease. Early occupancy of the Premises shall not advance the expiration date of
\nthe Lease.<\/p>\n\n\n\n
\n

3.<\/p>\n<\/td>\n

\n

Base Rent<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

On or before the first day of each calendar month of the Lease Term, Lessee
\nwill pay to Lessor the Base Rent for such month. Base Rent for any first partial
\nmonth and for the first full calendar month of the Lease Term, is due and
\npayable upon due date called for in this Lease. Security deposit is due and
\npayable upon Lease execution. Monthly rent for any partial calendar month will
\nbe prorated. All sums payable by Lessee to Lessor hereunder shall be deemed
\nrent. Base Rent and all other amounts required to be paid by Lessee hereunder
\nshall be paid without deduction or offset and without prior notice or demand.
\nAll such amounts shall be paid in lawful money of the United States of America
\nand shall be paid to Lessor at the address stated herein or to such other
\npersons or to such other places as Lessor may designate in writing from time to
\ntime. Amounts payable hereunder shall be deemed paid when actually received by
\nLessor.<\/p>\n\n\n\n
\n

4.<\/p>\n<\/td>\n

\n

Additional Rent<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

4.01 Unless otherwise specifically stated in this Lease, any charge payable
\nby Lessee under this Lease other than Base Rent is called “Additional Rent.” The
\nterm “rent” whenever used in this Lease means Base Rent, Additional Rent and\/or
\nany other monies payable by Lessee under the terms of this Lease.<\/p>\n

4.02 “Operating Expenses” as used herein shall include all costs and expenses
\nrelated to the ownership, management, operation, maintenance, replacement,
\nimprovement and repair of the Premises, Building, Project and\/or Property, or
\nany part thereof, incurred by Lessor including but not limited to: (1) Property
\nsupplies, materials, labor, equipment, and tools; (2) Lessor-incurred Utility
\nand Service Costs (as further described in Paragraph 4.03B below), security,
\njanitorial, trash removal, and all applicable service and maintenance
\nagreements; (3) Property related legal, accounting, and consulting fees, costs
\nand expenses, including but not limited to the cost of contests of Real Property
\nTaxes; (4) Insurance Premiums for all policies deemed reasonably necessary by
\nLessor and\/or its lenders, and all deductible amounts under such policies (as
\nfurther described in Paragraph 4.03C below); (5) costs and expenses of
\noperating, maintaining, and repairing the Property, including but not limited to
\nall interior areas and also driving, parking, loading, and other paved or
\nunpaved areas (including but not limited to, resurfacing and striping and any
\nsnow and ice removal Lessor elects to conduct), landscaped areas (including but
\nnot limited to, tree trimming), building exteriors (including but not limited
\nto, painting and roof work), signs and directories, and lighting; (6) capital
\nimprovements and replacements (including but not limited to, all financing costs
\nand interest charges); (7) compensation (including but not limited to, any
\npayroll taxes, worker153s compensation for employees, and customary employee
\nbenefits) of all persons, including independent contractors, who perform duties,
\nor render services on behalf of, or in connection with the Property, or any part
\nthereof, including but not limited to, Property operations, maintenance, repair,
\nand rehabilitation; (8) Property management fees not exceeding 5% of Annual Base
\nRent and the reasonable cost of providing space used by the Property manager;
\nand (9) Real Property Taxes (as further described in Paragraph 4.03A, below).
\nAll Operating Expenses other than Real Property Taxes, Utility and Service
\nCosts, and Insurance Premiums, are herein referred to as Common Area Expenses
\n(CAM). Any increases in CAM expenses shall be limited to a non-cumulative 5% per
\nyear. In addition, in the event Lessor effects any capital improvements or
\nreplacements, the cost of the same shall be amortized over the number of years
\nequal to the useful life of any such capital improvements or replacements.<\/p>\n

4.03A “Real Property Taxes” shall include any fee, license fee, tax, levy,
\ncharge, or assessment (hereinafter individually and\/or collectively referred to
\nas “Tax”) imposed by any authority having the direct or indirect power to tax
\nand where such Tax is imposed against the Property, or any part thereof, or
\nLessor in connection with its ownership or operation of the Property, including
\nbut not limited to: (1) any Tax on rent or Tax against Lessor153s business of
\nleasing the Property; (2) any Tax by any authority for services or maintenance
\nprovided to the Property, or any part thereof, including but not limited to,
\nfire protection, streets, sidewalks, and utilities; (3) any Tax on real estate
\nor personal property levied with respect to the Property, or any part thereof,
\nand any fixtures and equipment and other property used in connection with the
\nProperty; (4) any Tax based upon a reassessment of the Property due to a change
\nin ownership or transfer of all or part of Lessor153s interest in the Property;
\nand, (5) any Tax replacing, substituting for, or in addition to any Tax
\npreviously included in this definition. Real Property Taxes do not include
\nLessor153s federal or state net income taxes.<\/p>\n

4.03B “Utility and Service Costs” shall include all Lessor incurred utility
\nand service costs and expenses including but not limited to costs related to
\nwater and plumbing, electricity, gas, lighting, steam, sewer, waste disposal,
\nand HVAC, and all costs related to plumbing, mechanical, electrical, elevator,
\nHVAC, and other systems.<\/p>\n

3<\/p>\n

\n

4.03C “Insurance Premiums” shall include all insurance premiums for all
\ninsurance policies maintained by Lessor from time to time related to the
\nProperty.<\/p>\n

4.04 Throughout the Lease Term following the Base Year, Lessee will pay as
\nAdditional Rent its Proportionate Share (of the Project and\/or Building, as
\ndesignated from time to time by Lessor) of the amount by which total Operating
\nExpenses in each calendar year exceed total Operating Expenses for the Base
\nYear, subject to the limitation set forth in Section 4.02 above. Estimated
\npayments shall be made monthly on or before the first day of each calendar month
\neach in the amount of Lessor153s then current estimate as outlined below. Lessee153s
\nProportionate Share will be prorated for partial months. All Operating Expenses
\nwill be adjusted, at the election of Lessor, to reflect 100% occupancy during
\nany calendar year in which the Project is not fully occupied (in which event
\nOperating Expenses for the Base Year shall also be so adjusted).<\/p>\n

4.05 Lessee153s Proportionate Share of Operating Expenses shall be determined
\nand paid as follows:<\/p>\n

4.05A. Lessee153s Operating Expense estimates: On or about April 1st<\/sup>
\nof each calendar year, Lessor will provide Lessee with a statement of: (1)
\nLessee153s annual share of estimated Operating Expenses in excess of Base Year
\nOperating Expenses for the then current calendar year; (2) Lessee153s monthly
\nOperating Expense estimate for the then current year; and, (3) Lessee153s
\nretroactive estimate correction billing (for the period of January
\n1st<\/sup> through the date immediately prior to the commencement date of
\nLessee153s new monthly Operating Expense estimate) for the difference between
\nLessee153s new and previously billed monthly Operating Expense estimates for the
\nthen current year.<\/p>\n

4.05B. Lessee153s Proportionate Share of actual annual Operating Expenses: Each
\nyear, Lessor will provide Lessee with a statement reflecting the total Operating
\nExpenses for the previous calendar year. If the total of Lessee153s Operating
\nExpense estimates billed for the previous calendar year are less than Lessee153s
\nProportionate Share of the actual Operating Expenses in excess of Base Year
\nOperating Expenses, the statement will indicate the payment amount and date due.
\nIf Lessee has paid more than its Proportionate Share of excess Operating
\nExpenses for the preceding calendar year, Lessor will credit the overpayment
\ntoward Lessee153s future Operating Expense obligations. Monthly Operating Expense
\nestimates are due on the 1st<\/sup> of each month and shall commence in the
\nmonth specified by Lessor. Lessee153s retroactive estimate correction, and actual
\nannual Operating Expense charges, if any, shall be due, in full, on the date(s)
\nspecified by Lessor.<\/p>\n

4.06 Unless Lessor otherwise elects, Lessee shall pay each Operating Expense
\nin accordance with Lessee153s Proportionate Share of the Building or Lessee153s
\nProportionate Share of the Project, whichever is designated by Lessor. Lessor
\nshall have the right to make allocations (“Allocations”) to Lessee of any one or
\nmore Operating Expenses on a different basis. Lessor shall have the right to
\nmake any such Allocations in any manner which Lessor deems reasonable (including
\nuse of estimates). For example, if Lessor deems it reasonable to do so, Lessor
\nshall have the right to elect at any time and from time to time (a) to make any
\nAllocation of one or more Operating Expenses based upon Lessee153s Proportionate
\nShare of the Building and to make other Allocations on Lessee153s Proportionate
\nShare of the Project, (b) to make Allocations of certain Operating Expense items
\namong less than all lessees and\/or other than based upon the respective square
\nfootages of the lessees, (c) to make different Allocations for different
\nOperating Expenses, and\/or (d) to alter an Allocation or the method of
\ndetermining an Allocation from time to time. In no event shall Lessor be liable
\nto Lessee based upon any incorrect or disputed Allocation nor shall Lessee have
\nany right to terminate this Lease by reason of any such Allocation.<\/p>\n

4.07 In the event Lessee wishes to audit any Operating Expense charge, such
\nan audit shall be limited to an audit of the annual statement delivered under
\nParagraph 4.05B above. Such audit shall be performed only if, at the time of the
\naudit request and at all times thereafter to and during the course of the audit,
\nLessee has paid in full all Operating Expenses billed and is not in Default (as
\ndefined in Section 20.02 below). Any audit shall be conducted at a time and
\nlocation designated by Lessor. Lessor and Lessee agree that any Lessee audit
\nmust be requested by Lessee by written notice given within six (6) months of the
\ndate that Lessor provides the applicable annual statement under Paragraph 4.05B
\nabove, and must be completed by Lessee within thirty (30) days of its written
\nnotice requesting the audit; if Lessee does not give such written notice within
\nthe period of time allowed, or fails to complete the audit within the time
\nallowed, Lessee153s right to audit is waived, and the Operating Expenses, as
\nbilled, including all calculations used as the basis for Lessor153s charges
\n(including any “Allocations” and any applicable Expense Base Year or expense
\nstop calculations), shall be deemed conclusive and final for all purposes under
\nthis Lease. All calculations by Lessor of Operating Expenses for the Expense
\nBase Year shall be conclusive and final, and Lessee shall have no right to audit
\nthe same, except only Lessee may audit the same as part of an audit of Operating
\nExpenses for the first Expense Comparison Year. Any audit shall be conducted
\nonly by Lessee and the CPA then used by Lessee for the preparation of its tax
\nreturns and financial statements; no agent of Lessee employed in connection with
\nthe audit shall be employed on any contingent payment basis. Lessee shall
\nmaintain as strictly confidential, and shall cause its auditor to execute in
\nfavor of Lessor a confidentiality agreement (in form prepared by Lessor)<\/p>\n

4<\/p>\n

\n

regarding, all financial information audited, the results of any such audit,
\nand the resolution of any disputed issues arising in connection with such audit.
\nLessor shall not be bound by the result of any such audit. If the parties do not
\nagree upon the inclusion or amount of any Operating Expense charged by Lessor,
\nthe sole remedy of Lessee shall be to conduct an audit within the time specified
\nin this Lease and, if still in disagreement with Lessor, to submit the matter to
\narbitration pursuant to Section 27.17 below within thirty (30) days after
\ncompletion of the audit to request an adjustment to any disputed Operating
\nExpense item to cause the same to not exceed the amount that Lessor has the
\nright to collect hereunder for such item. In no event will this Lease be
\nterminable nor shall Lessor be liable for damages based upon any disagreement
\nregarding or adjustment of Operating Expenses.<\/p>\n\n\n\n
\n

5.<\/p>\n<\/td>\n

\n

Late Charges<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

If any sum payable by Lessee to Lessor is not received by Lessor within five
\n(5) days after it becomes due, Lessee shall pay a late charge equal to fifty
\ndollars ($50.00) or five (5%)<\/u> of the then delinquent amount, whichever is
\ngreater. A fifty dollar ($50.00) handling fee will be paid to Lessor by Lessee
\nfor each bank returned check, and Lessee will be required to make all future
\npayments to Lessor by wire or electronic transfer or by cashier153s check. The
\nacceptance of late charges and returned check charges by Lessor will not
\nconstitute a waiver of Lessee153s Default nor any other rights or remedies of
\nLessor. Lessee shall not be in default of this Lease the first time in a twelve
\n(12) consecutive month period that Lessee fails to pay rent when due so long as
\nLessee pays such overdue rent within five (5) days of written notice from Lessor
\nthat such overdue amount is due.<\/p>\n\n\n\n
\n

6.<\/p>\n<\/td>\n

\n

Security Deposit and Financial Reporting<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

6.01 Upon Lessee153s execution of this Lease, Lessee will deposit with Lessor
\nan initial Security Deposit in the amount specified in Paragraph 1 as security
\nfor Lessee153s full and faithful performance of every provision under this Lease.
\nLessor will not be required to keep the Security Deposit separate from its
\ngeneral funds and has no obligation or liability for payment of interest thereon
\n(except when required by law). Lessee hereby grants to Lessor a security
\ninterest in the Security Deposit. Lessee will not have the right to apply any
\npart of the Security Deposit to any amounts payable under the terms of this
\nLease nor is it a measure or limitation of Lessor153s damages in event of a
\nDefault by Lessee. If Lessee fails to pay any rent due herein, or otherwise is
\nin Default of any provision of this Lease, Lessor may, without waiver of the
\nDefault or of any other right or remedy, use, apply or retain all or any portion
\nof the Security Deposit for the payment of any amount due Lessor or to
\ncompensate Lessor for any loss or damage suffered by Lessee153s Default. Within
\nfive (5) days after written notification by Lessor, Lessee will restore the
\nSecurity Deposit to the full amount required under this Lease.<\/p>\n

6.02 Within ten (10) days after written request from Lessor but not more
\noften than annually, Lessee shall deliver to Lessor such financial statements as
\nLessor reasonably requests regarding Lessee or any assignee, subtenant, or
\nguarantor of Lessee. Lessee represents and warrants to Lessor that each
\nfinancial statement is a true and accurate statement. Lessor shall use such
\nstatements only for valid business purposes. Lessor shall have the right to make
\nsuch financial statements and the other contents of its files available to law
\nenforcement or other governmental agencies upon request.<\/p>\n\n\n\n
\n

7.<\/p>\n<\/td>\n

\n

Use of Premises<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

7.01 The Premises will be used and occupied only for Lessee153s Permitted Use.
\nLessee will, at its sole expense, comply with all conditions and covenants of
\nthis Lease, and all Laws. Lessee will not use or permit the use of the Premises,
\nthe Property or any part thereof, in a manner that is unlawful, diminishes the
\nappearance or aesthetic quality of any part of the Property, creates waste or a
\nnuisance, or causes damage to the Property. Lessee shall not permit any
\nobjectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to
\nemanate from the Premises nor take or permit any other action in the Premises
\nthat would endanger, annoy, or interfere with the operations of, Lessor or any
\nother tenant of the Project. Lessee shall obtain, at its sole expense, any
\npermit or other governmental authorization required to operate its business from
\nthe Premises. Any animals, excepting guide dogs, on or about the Property or any
\npart thereof are expressly prohibited.<\/p>\n

7.02 In the event of any excessive trash in or outside the Premises, as
\ndetermined by Lessor in its sole discretion, Lessor will have the right to
\nremove such excess trash, charge all costs and expenses attributable to its
\nremoval to Lessee. Lessee will not cause, maintain or permit any outside storage
\non or about the Property without prior written consent by Lessor. In the event
\nof any unauthorized outside storage by Lessee, Lessor will have the right,
\nwithout notice, in addition to such other rights and remedies it may have, to
\nremove any such storage at the expense of Lessee.<\/p>\n

5<\/p>\n

\n\n\n\n
\n

8.<\/p>\n<\/td>\n

\n

Parking<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

All parking will comply with the terms and conditions of this Lease and the
\nparking rules and regulations included in Exhibit “D.” Lessee will have a
\nnon-exclusive privilege to use of one-hundred eighty (180) parking spaces
\ndesignated by Lessor for public parking and four (4) designated visitor parking
\nspaces at the entry to the Premises. Vehicles parked in public parking areas
\nwill be no larger than full-sized passenger automobiles or standard pick-up
\ntrucks. Lessor reserves the right, without notice to Lessee, to tow away at
\nLessee153s sole cost and expense any vehicles parked in any parking area for any
\ncontinuous period of 24 hours or more, or earlier if Lessor, in its sole
\ndiscretion, determines such parking to be a hazard or inconvenience to other
\nlessees or Lessor, or violates any rules or regulations or posted notices
\nrelated to parking. Lessor shall not be responsible for enforcing Lessee153s
\nparking rights against third parties. From time to time, Lessor reserves the
\nright, upon written notice to Lessee, to change the location, the availability
\nand nature of parking spaces, establish reasonable time limits on parking, and,
\non an equitable basis, to assign specific spaces with or without charge to
\nLessee as Additional Rent. The parking privileges granted to Lessee are personal
\nto Lessee; Lessee shall not assign or sublet parking privileges.<\/p>\n\n\n\n
\n

9.<\/p>\n<\/td>\n

\n

Utilities and Services<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

9.01 Subject to the other provisions of this Lease, the following services
\nare provided.<\/p>\n\n\n\n
<\/td>\n\n

A.<\/p>\n<\/td>\n

\n

Electricity, water, and elevator service (if elevators presently serve the
\nPremises) are provided.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

B.<\/p>\n<\/td>\n

\n

Heating and air conditioning are provided 7:00 a.m. to 6:00 p.m. Monday
\nthrough Saturday, except holidays. If Lessee desires such service during other
\nhours, Lessee must prearrange the same with Lessor and pay an additional charge
\nfor such service.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

C.<\/p>\n<\/td>\n

\n

Five days per week janitorial service, periodic window cleaning, supplies for
\nBuilding operation, and other customary services.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

If Lessee uses any utility or service in excess of normal usage levels, as
\ndetermined by Lessor in its sole discretion, Lessor shall have the right to
\ncharge Lessee for such excess use and to charge Lessee the cost to separately
\nmeter such use.<\/p>\n

9.02 Lessor will not be liable or deemed in Lessor Default, nor will there be
\nany abatement of rent or right to terminate this Lease, for (a) any interruption
\nor reduction of utilities, utility services or telecommunication services not
\ncaused by Lessor, (b) any telecommunications or other company (whether selected
\nby Lessor or Lessee) failing to provide such utilities or services or providing
\nthe same defectively, and\/or (c) any utility interruption in the nature of
\nblackouts, brownouts, or rolling interruptions. Lessee agrees to comply with any
\nenergy conservation programs required by law or implemented by Lessor. Lessee
\nacknowledges that utility and service costs and availability may fluctuate
\nsignificantly, due to power shortages or other events and factors, and Lessee
\naccepts the risks of such fluctuations. Lessor reserves the right, in its
\nreasonable discretion, to designate, at any time, the utility and service
\nproviders for Lessee153s use within the Property; no such designation shall impose
\nliability upon Lessor.<\/p>\n

9.03 Lessee has satisfied itself as to the adequacy of any Lessor owned
\nutility equipment and the quantity of telephone lines and other service
\nconnections to the Building available for Lessee153s use.<\/p>\n\n\n\n
\n

10.<\/p>\n<\/td>\n

\n

Lessee Improvements; Lessee Alterations and Mechanic153s Liens<\/strong>\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

10.01 Any improvements to be constructed in the Premises by Lessee prior to
\nLessee initially commencing use of the Premises are referred to throughout this
\nLease as “Lessee Improvements.” All Lessee Improvements will be performed in
\naccordance with the terms and conditions outlined in Exhibit “B” and also in
\naccordance with the provisions set forth in this Paragraph 10 regarding Lessee
\nAlterations.<\/p>\n

10.02 The following provisions apply to “Lessee Alterations” which means and
\nincludes (a) any alterations or improvements to the Premises undertaken by
\nLessee (other than nonstructural installation of equipment or trade fixtures),
\n(b) any utility installations at the Premises undertaken by Lessee, and (c) any
\nrepair, restoration, replacement, or maintenance work at the Premises undertaken
\nby Lessee whether or not Lessee is required to undertake such work pursuant to
\nthis Lease. Lessee shall not commence any Lessee Alteration without first
\nobtaining the prior written consent of Lessor in each instance which consent may
\nbe withheld or conditioned in Lessor153s reasonable discretion. Lessee shall
\nsubmit such information regarding the intended Lessee Alteration as Lessor may
\nreasonably require, and no request for consent shall be deemed complete until
\nsuch information is delivered. The following provisions apply to all Lessee
\nAlterations.<\/p>\n

6<\/p>\n

\n\n\n\n
<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

Lessee shall hire a licensed general contractor who, in turn, shall hire only
\nlicensed subcontractors. All work shall be conducted expeditiously and be
\ncompleted within a reasonable time.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

Lessee shall obtain all required permits and deliver a copy of the same to
\nLessor. Lessee shall install all Lessee Alterations in strict compliance with
\nall permits, any plans approved by Lessor, and all conditions to Lessor153s
\napproval.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

Unless Lessor elects otherwise in its applicable prior written consent,
\nLessee shall remove each Lessee Alteration at the end of this Lease or Lessee153s
\nright of possession and restore the Premises to its prior condition, all at
\nLessee153s expense.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

(d)<\/p>\n<\/td>\n

\n

Lessee shall deliver to Lessor, within ten (10) days following installation
\nof each Lessee Alteration, (w) accurate, reproducible as-built plans, (x) proof
\nof final inspection and approval by all governmental authorities, (y) complete
\nlien waivers for all costs of the Lessee Alteration, and (z) a copy of a
\nrecorded notice of completion.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

10.03 Lessor shall have the right to inspect all Lessee Alterations. Lessee
\nshall pay to Lessor a fee equal to 5% of total project cost up to $50,000 and
\n2.5% thereafter, to compensate Lessor for review of plans, inspection of work,
\nand other activities regarding any Lessee Alterations. Approval of any plans or
\ninspection of any work is for the sole benefit of Lessor and is not a
\nrepresentation by Lessor that any work is suitable or complies with applicable
\nrequirements. Lessor153s approval of any Lessee Improvements and Lessee
\nAlterations and\/or Lessor153s approval or designation of any general contractor,
\nsubcontractor, supplier or other project participant will not create any
\nliability whatsoever on the part of Lessor.<\/p>\n

10.04 Lessee shall pay all costs of Lessee Alterations as and when due.
\nLessee shall not allow any lien to be filed. Lessee shall obtain advance lien
\nwaivers and third-party beneficiary agreements from all contractors,
\nsubcontractors, suppliers, and others providing equipment, labor, materials, or
\nservices, in the form required by Lessor. If any lien is filed, then, without
\nwaiver of any other right or remedy, Lessor shall have the right to cause such
\nlien to be removed by any means allowed by law, including bond, deposit, and\/or
\npayment of the underlying claim. All sums expended by Lessor in connection with
\nsuch lien and\/or its removal, including attorney fees, shall be immediately due
\nfrom Lessee to Lessor, together with interest at the rate of 12%.<\/p>\n

10.05 All Lessee Improvements and Lessee Alterations are part of the realty
\nand belong to Lessor. Lessee shall be solely responsible to insure all Lessee
\nAlterations and to restore the same following any casualty. As a condition of
\nLessor consenting to any Lessee Improvements or Lessee Alterations, Lessor
\nreserves the right, at any time to elect to make Lessee the owner of all or any
\nspecified part of the Lessee Improvements or Lessee Alterations and\/or to
\nrequire Lessee, upon termination of this Lease, to remove none, all, or part of
\nthe same at its sole cost and expense. The provisions of this Paragraph shall
\nsurvive the termination of this Lease.<\/p>\n

10.06 Notwithstanding any other provision of this Lease, Lessee shall remove,
\nat or prior to the expiration or termination of this Lease, at its expense, all
\nwiring and cabling installed at the Premises which shall have been installed by
\nLessee or which Lessor shall have installed pursuant to this Lease or at the
\nrequest of Lessee. Such wiring and cabling shall include but not be limited to
\n(a) wiring and cabling above the ceiling panels, behind or within walls, and
\nunder or within floors, (b) wiring and cabling for voice, data, security or
\nother purposes, (c) wiring and cabling installed pursuant to this Paragraph 10,
\npursuant to Exhibit B, or otherwise, and (d) all related installations,
\nequipment and items whatsoever.<\/p>\n\n\n\n
\n

11.<\/p>\n<\/td>\n

\n

Repairs<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

11.01 Subject to Paragraph 11.02 below<\/u>, Lessee shall, at all times and
\nat its sole cost and expense, keep all parts of the Premises (including Lessee
\nImprovements and Lessee Alterations) in good order, and in a neat, clean and
\nsafe condition. If Lessee does not perform required maintenance, Lessor shall
\nhave the right, without waiver of Default nor of any other right or remedy, to
\nperform such obligations of Lessee on Lessee153s behalf, and Lessee will reimburse
\nLessor for any costs incurred immediately upon demand.<\/p>\n

11.02 Lessor shall perform all repairs required in the Premises. All costs
\nincurred by Lessor in making such repairs shall be Operating Expenses; provided,
\nLessee shall reimburse Lessor for 100% of any such costs incurred by Lessor (a)
\ndue to the act or omission of Lessee (including but not limited to clogging of
\nplumbing, stain removal, and repair of damage to the Premises), or (b) for
\nrepairs or maintenance in excess of or other than routine Building standard
\nrepairs and maintenance as determined by Lessor in its reasonable discretion
\n(for example, maintenance of any above standard dedicated HVAC unit, repair of
\nbuilt-in appliances, or periodic replacing of above standard light bulbs).<\/p>\n

7<\/p>\n

\n\n\n\n
\n

12.<\/p>\n<\/td>\n

\n

Insurance<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

12.01 Lessee will not do or permit anything to be done within or about the
\nPremises or the Property which will increase the existing rate of any insurance
\non any portion of the Property or cause the cancellation of any insurance policy
\ncovering any portion of the Property. Lessee will, at its sole cost and expense,
\ncomply with any requirements of any insurer of Lessor.<\/p>\n

12.02 Lessee agrees to maintain policies of insurance described in this
\nParagraph. Lessor reserves the right, from time to time, to require additional
\ncoverage153s (including, for example, flood insurance, if the Premises is located
\nin a flood hazard zone), and\/or to require higher amounts of coverage153s. Any
\nadditional and\/or higher must conform to reasonable industry standards. No
\ninsurance policy of Lessee shall have a deductible greater than $50,000.<\/p>\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

(a)<\/p>\n<\/td>\n

<\/td>\n\n

Workers153 Compensation<\/p>\n<\/td>\n

<\/td>\n\n

Statutory Requirements<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Employer153s Liability<\/p>\n<\/td>\n

<\/td>\n\n

Not less than $1,000,000.00<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

(b)<\/p>\n<\/td>\n

<\/td>\n\n

Commercial General Liability<\/p>\n<\/td>\n

<\/td>\n\n

Not less than $1,000,000.00<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

Combined single limit per occurrence this location<\/p>\n<\/td>\n

<\/td>\n\n

Not less than $2,000,000.00 aggregate<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Commercial General Liability policies shall insure on an occurrence and
\nnot a claims-made basis and cover the Premises, Project and Property. Such
\npolicies shall cover liability arising from premises, operations, independent
\ncontractors, products-completed operations, personal injury, advertising injury
\nand liability assumed under an insured contract (specifically insuring
\nperformance of the indemnity obligations of Lessee hereunder); such policies
\nshall not be excess.<\/p>\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

(c)<\/p>\n<\/td>\n

<\/td>\n\n

Automobile Liability<\/p>\n

single limit including property damage<\/p>\n<\/td>\n

<\/td>\n\n

Not less than $300,000.00 combined<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

(d)<\/p>\n<\/td>\n

\n

“Causes of Loss : Special Form” coverage including endorsements for flood
\ncoverage, earthquake sprinkler leak coverage, and such endorsements and
\nsupplemental as Lessor may require from time to time. This insurance coverage
\nmust be upon the Premises and all property owned by Lessee, for which Lessee is
\nlegally liable, which Lessee is obligated to repair and restore hereunder,
\nand\/or which was installed at the expense of or at the request of Lessee,
\nincluding but not limited to, any Lessee Improvements, Lessee Alterations,
\nfurniture, fixtures, equipment, installations and any other personal property of
\nLessee, in an amount not less than their full replacement value. All proceeds of
\nthis insurance shall only be used for the repair and replacement of property so
\ninsured; Lessee hereby assigns to Lessor all its rights to receive any proceeds
\nof such insurance policies attributable to any Lessee Improvements and Lessee
\nAlterations if this Lease is terminated due to damage or destruction.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The limits of the insurance coverage required under this Lease will not limit
\nthe liability of Lessee nor relieve Lessee of any obligation hereunder. All
\ninsurance to be carried by Lessee will be primary to, and non-contributory with,
\nLessor153s insurance, and contain cross-liability endorsements and will in
\naddition to the above coverage specifically insure Lessor against any damage or
\nloss that may result either directly or indirectly from any default of Lessee
\nunder Paragraph 14 (Hazardous Materials) herein. Any similar insurance carried
\nby Lessor will be considered excess insurance only.<\/p>\n

12.03 Lessee will name Lessor (and, at Lessor153s request, any mortgagee) and
\nLessor153s agents as additional insured153s on all insurance policies required of
\nLessee under this Lease, other than Worker153s Compensation, Employer153s Liability,
\nAutomobile Liability, and Fire and Extended coverage (except on Lessee
\nImprovements or Lessee Alterations to the Premises for which Lessor shall be
\nnamed an additional insured) insuring Lessor and such other additional insured153s
\nregardless of any defenses the insurer may have against Lessee and regardless of
\nwhether the subject claim is also made against Lessee. All insurance policies
\ncarried by Lessee will permit the insured, prior to any loss, to agree with a
\nthird party to waive any claim it might have against said third party without
\ninvalidating the coverage under the insurance policy, and will release Lessor
\n(and Lessor153s affiliates and subsidiaries, and all officers, partners,
\ndirectors, and employees of Lessor and\/or of any such subsidiary or affiliate),
\nfrom any claims for damage to any person, to the Property of which the Premises
\nare a part, any existing improvements, Lessee Improvements and Lessee
\nAlterations to the Premises, and to any furniture, fixtures, equipment,
\ninstallations and any other personal property of Lessee caused by or resulting
\nfrom, risks which are to be insured against by Lessee under this Lease,
\nregardless of cause.<\/p>\n

12.04 Lessee will deliver to Lessor (and, at Lessor153s request, to any
\nmortgagee or to any other third party), simultaneously with its execution of
\nthis Lease and thereafter at least thirty (30) days prior to expiration,
\ncancellation or change in insurance, certificates of insurance evidencing, at a
\nminimum, the<\/p>\n

8<\/p>\n

\n

coverage specified in Paragraph 12.02. All such certificates shall be in form
\nand substance satisfactory to Lessor, shall affirmatively demonstrate all and
\nrequirements set forth in this Lease, shall contain no disclaimers of coverage,
\nand shall include a firm and unconditional obligation to give to Lessor at least
\n10 days153 prior written notice prior to cancellation or change in any coverage.
\nAll insurance required hereunder will be with companies licensed and authorized
\nto do business in the state in which the Property is located and holding a
\n“General Policyholders Rating” of “A VIII” or better, as set forth in the most
\ncurrent Best153s Insurance Guide<\/u>.<\/p>\n

12.05 Lessor will secure and maintain insurance coverage in such limits as
\nLessor may deem reasonable in its reasonable judgment to afford Lessor adequate
\nprotection. The premiums for such coverage are “Insurance Premiums” under
\nParagraph 4.03C above. Any proceeds of such insurance shall be the sole property
\nof Lessor to use as Lessor determines. Lessor makes no representation that the
\ninsurance policies and coverage amounts specified to be carried by Lessee or
\nLessor under the terms of this Lease are adequate to protect Lessee. Lessee will
\nprovide, at its own expense, all insurance as Lessee deems adequate to protect
\nits interests.<\/p>\n

12.06 Without limiting the effect of any other waiver of or limitation on the
\nliability of Lessor set forth herein, and except as provided in Paragraph 13
\nand\/or Paragraph 14 below, neither Lessor nor Lessee shall be liable to the
\nother party or to any insurance company (by way of subrogation or otherwise) for
\nany loss of or damage to tangible property due to casualty regardless of
\nnegligence. For purposes of this Paragraph 12.06, “Lessor” shall include
\nLessor153s affiliates and subsidiaries, and all officers, partners, directors, and
\nemployees of Lessor or of any such subsidiary or affiliate.<\/p>\n\n\n\n
\n

13.<\/p>\n<\/td>\n

\n

Waiver of Claims and Indemnification<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Lessee waives all claims against Lessor for any damage to any property in or
\nabout the Property, for any loss of business or income, and for injury to or
\ndeath of any persons, regardless of the cause of any such loss or event or time
\nof occurrence, except loss, injury or death caused by Lessor153s gross negligence
\nor willful misconduct. Lessee will indemnify, protect, defend and hold harmless
\nLessor from and against all claims, losses, damages, causes of action, costs,
\nexpenses and liabilities, including legal fees, arising out of Lessee153s
\noccupancy of the Premises or presence on the Property, the conduct of Lessee153s
\nbusiness, any Default by Lessee, and\/or any act, omission or neglect of Lessee,
\nits agents, contractors, employees, suppliers, licensees or invitees. For
\npurposes of this Paragraph 13, “Lessor” shall include also Lessor153s affiliates
\nand subsidiaries, and all officers, partners, directors, and employees of Lessor
\nor of any such subsidiary or affiliate.<\/p>\n\n\n\n
\n

14.<\/p>\n<\/td>\n

\n

Hazardous Materials<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

14.01 “Hazardous Materials” will mean any substance commonly referred to, or
\ndefined in any Law, as a hazardous material or hazardous substance (or other
\nsimilar term), including but not be limited to, chemicals, solvents, petroleum
\nproducts, flammable materials, explosives, asbestos, urea formaldehyde, PCB153s,
\nchlorofluorocarbons, Freon or radioactive materials. Lessee will not cause or
\npermit any Hazardous Materials to be brought upon, kept, stored, discharged,
\nreleased or used in, under or about any portion of the Property by Lessee, or
\nits agents without the prior written consent of Lessor, which consent may be
\nwithheld or conditioned in Lessor153s sole discretion; provided, Lessee may bring
\ninto the Premises small amounts of Hazardous Materials (such as cleaning
\nproducts and copy toner) which are readily available to Lessee by unregulated
\nretail purchase if the same are necessary in Lessee153s normal business
\noperations. If Lessee brings any Hazardous Materials to the Premises or
\nProperty, with or without the prior written consent of Lessor (without waiver of
\nthe requirement of prior written consent), Lessee shall: (1) use such Hazardous
\nMaterial only as is reasonably necessary to Lessee153s business, in small,
\nproperly labeled quantities; (2) handle, use, keep, store, and dispose of such
\nHazardous Material using the highest accepted industry standards and in
\ncompliance with all applicable Laws; (3) maintain at all times with Lessor a
\ncopy of the most current MSDS sheet for each such Hazardous Material; and (4)
\ncomply with such other rules and requirements Lessor may from time to time
\nimpose. Upon expiration or earlier termination of this Lease, Lessee will, at
\nLessee153s sole cost and expense, cause all Hazardous Materials brought to the
\nPremises or the Property by Lessee, its agents, contractors, employees,
\nsuppliers, licensees or invitees, to be removed from the Property in compliance
\nwith any and all applicable Laws.<\/p>\n

14.02 If Lessee or its agents violate the provisions of this Paragraph 14, or
\nperforms any act or omission which contaminates or expands the scope of
\ncontamination of the Premises, the Property, or any part thereof, the underlying
\ngroundwater, or any property adjacent to the Property, then Lessee will
\npromptly, at Lessee153s expense, take all investigatory and\/or remedial action
\n(collectively called “Remediation”) that is necessary to fully clean up, remove
\nand dispose of such Hazardous Materials and any contamination so caused and
\nshall do so in compliance with any applicable Laws. Lessee will also repair any
\ndamage to the Premises and any other affected portion(s) of the Property caused
\nby such contamination and Remediation.<\/p>\n

9<\/p>\n

\n

14.03 Lessee shall immediately provide to Lessor written notice of any
\ninvestigation or claim arising out of the use by Lessee of Hazardous Materials
\nat the Property or the violation of any provision of this Paragraph 14 and shall
\nkeep Lessor fully advised regarding the same. Lessee shall provide to Lessor all
\nreports regarding the use of Hazardous Materials by Lessee at the Property and
\nany incidents regarding the same, regardless of whether any such documentation
\nis considered by Lessee to be confidential. Lessor retains the right to
\nparticipate in any legal actions affecting the Property involving Hazardous
\nMaterials.<\/p>\n

14.04 Lessee will indemnify, protect, defend and forever hold Lessor, its
\nlenders and ground lessor, if any, and the Premises, the Property, or any
\nportion thereof, harmless from any and all damages, causes of action, fines,
\nlosses, liabilities, judgments, penalties, claims, and other costs arising out
\nof any failure of Lessee to observe any covenants of this Paragraph 14 of this
\nLease. All provisions of this Paragraph 14 shall survive the expiration of this
\nLease and any termination of this Lease or of Lessee153s right of possession. For
\npurposes of this Paragraph 14.04, “Lessor” shall include also Lessor153s
\naffiliates and subsidiaries, and all officers, partners, directors, and
\nemployees of Lessor or of any such subsidiary or affiliate.<\/p>\n\n\n\n
\n

15.<\/p>\n<\/td>\n

\n

Lessor153s Access<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Lessor, its agents, contractors, consultants, servants and employees, will
\nhave the right to enter the Premises at any time in the case of an emergency,
\nand otherwise at reasonable times upon reasonable notice to examine the
\nPremises, perform work in the Premises, show the Premises, exercise any right or
\nremedy, or for any other purpose. For each of these purposes, Lessor will at all
\ntimes have and retain any necessary keys. Lessee will not alter any lock or
\ninstall new or additional locks or bolts on any door in or about the Premises
\nwithout obtaining Lessor153s prior written approval and will, in each event,
\nfurnish Lessor with a new key. Access by Lessor will not give Lessee the right
\nto terminate this Lease, and will be without abatement of rent or liability on
\nthe part of Lessor.<\/p>\n\n\n\n
\n

16.<\/p>\n<\/td>\n

\n

Damage or Destruction<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

16.01 If the Premises is damaged or destroyed by fire or other casualty,
\nLessee will immediately give written notice to Lessor of the casualty. Lessor
\nwill have the right to terminate this Lease following a casualty if any of the
\nfollowing occur by giving notice to Lessee within sixty (60) days of the
\ncasualty: (i) insurance proceeds actually paid to Lessor and available for use
\nare not sufficient to pay the full cost to fully repair the damage; (ii) Lessor
\ndetermines that the Premises or the Building cannot be fully repaired within 180
\ndays; (iii) the Premises are damaged or destroyed within the last twelve (12)
\nmonths of the Lease Term; (iv) Lessee is in Default of this Lease at the time of
\nthe casualty; (v) Lessor would be required under this Lease to abate or reduce
\nLessee153s rent for a period in excess of six (6) months if the repairs were
\nundertaken; or (vi) the Project, or the Building in which the Premises is
\nlocated, is damaged such that the cost of repair of the same would exceed 10% of
\nthe replacement cost of the same. If Lessor elects to terminate this Lease,
\nLessor will be entitled to retain all applicable Lessee insurance proceeds
\nexcepting those attributable to Lessee153s furniture, fixtures, equipment, and any
\nother personal property.<\/p>\n

16.02 If this Lease is not terminated pursuant to Paragraph 16.01, Lessor
\nwill repair the Premises and this Lease shall continue. The repair obligation of
\nLessor shall be limited to repair of the Premises excluding any Lessee
\nImprovements, Lessee Alterations, and any personal property and trade fixtures
\nof Lessee. During the period of repair, rent will be abated or reduced in
\nproportion to the degree to which Lessee153s use of the Premises is impaired, as
\ndetermined by Lessor, not to exceed the total amount of rent loss insurance
\nproceeds, directly attributable to Lessee153s Premises, Lessor has received.
\nHowever, rent will not be abated if Lessee or any of its agents is the cause of
\nthe casualty.<\/p>\n\n\n\n
\n

17.<\/p>\n<\/td>\n

\n

Transfer (Assignment\/Subletting)<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

17.01 Lessee will not, voluntarily or by operation of law, assign, sell,
\nconvey, sublet or otherwise transfer all or any part of Lessee153s right or
\ninterest in this Lease, or allow any other person or entity to occupy or use all
\nor any part of the Premises (collectively called “Transfer”) without first
\nobtaining the written consent of Lessor which may be withheld or conditioned by
\nLessor in its reasonable discretion. Any Transfer without the prior written
\nconsent of Lessor shall be void. Without limiting the generality of the
\ndefinition of “Transfer,” it is agreed that each of the following shall be
\ndeemed a “Transfer” for purposes of this Paragraph: (a) an entity other than
\nLessee becoming the tenant hereunder by merger, consolidation, or other
\nreorganization; and (b) a transfer of any ownership interest in Lessee (unless
\nLessee is an entity whose stock is publicly traded). Lessee shall provide to
\nLessor all information requested by Lessor concerning a Transfer. If Lessor has
\nnot granted consent in writing to a Transfer within thirty (30) days of Lessee153s
\nrequest hereunder and delivery of all such information, Lessor will be deemed to
\nhave rejected Lessee153s request. In no event shall Lessee mortgage, encumber,
\npledge or assign for security purposes all or any part of its interest in this
\nLease. Notwithstanding the foregoing, Lessee may assign this Lease or sublease
\nthe Premises, in whole or in part, without the express written consent of<\/p>\n

10<\/p>\n

\n

Lessor to: (i) any corporation into which or with which Lessee has merged or
\nconsolidated; (ii) any parent, subsidiary, successor, or affiliated corporation
\nof Lessee; (iii) any corporation which acquires all or substantially all of the
\nassets or issued and outstanding shares of capital stock of Lessee; (iv) any
\npartnership, the majority interest of which shall be owned by the parent of
\nLessee; provided the resulting entity from such merger or consolidation or the
\ntransferee, other than a parent, subsidiary or affiliated corporation of Lessee,
\nfrom any such acquisition, shall have a net worth not less than Lessee153s prior
\nto the merger, consolidation, or acquisition; and provided further any such
\nassignee or successor shall agree in writing to assume and perform all of the
\nterms and conditions of this Lease on Lessee153s part to be performed from and
\nafter the effective date of such assignment or subletting, so long as the
\nresulting entity153s use of the Premises does not violate any provision of this
\nLease or any applicable governmental law, rule or regulation.<\/p>\n

17.02 In the event Lessor consents to a Transfer, the Transfer will not be
\neffective until Lessor receives a fully executed agreement regarding the
\nTransfer, in a form and of substance acceptable to Lessor, any documents or
\ninformation required by such agreement (including any estoppel certificate and
\nany subordination agreement required by any lender of Lessor), an amount equal
\nto all attorneys fees and other expenses of Lessor incurred in connection with
\nthe Transfer, and a Transfer fee in an amount determined by Lessor (a minimum
\nfee of $250 is payable). Lessee agrees to pay to Lessor an amount equal to all
\nattorneys153 fees and other expenses incurred by Lessor related to a request for
\nconsent to Transfer regardless of whether such consent is granted and regardless
\nof whether the Transfer is consummated.<\/p>\n

17.03 Fifty percent (50%) of any consideration paid to Lessee solely for
\nassignment of this Lease, less any reasonable brokerage commission and
\nreasonable tenant improvements paid by Lessee with respect to such assignment,
\nshall be immediately paid to Lessor. In the event of a sublease of all or a
\nportion of the Premises, fifty percent (50%) of all rents payable by the
\nsubtenant in excess of rents payable hereunder (allocated on a per square foot
\nbasis in the event of a partial sublease) shall be immediately due and payable
\nto Lessor; provided, excess rental shall be calculated taking into account
\nstraight-line amortization, without interest, of any reasonable brokerage
\ncommission less any reasonable tenant improvements paid by Lessee in connection
\nwith the subject sublease transaction.<\/p>\n

17.04 Lessor may, within thirty (30) days after submission of Lessee153s
\nwritten request for Lessor153s consent to a Transfer, terminate this Lease (or, as
\nto a partial subletting, terminate this Lease as to the portion of the Premises
\nproposed to be sublet) as of the date the proposed Transfer was to be effective.
\nIf Lessor terminates this Lease as to only a portion of the Premises, then (a)
\nthis Lease shall cease as to such portion of the Premises, (b) Lessee shall pay
\nto Lessor all Base Rent and other amounts accrued through the termination date
\nrelating to the portion of the Premises covered by the proposed Transfer
\n(allocated on an equitable basis determined by Lessor), and (c) Lessee shall
\nexecute, upon request of Lessor, an amendment hereto setting forth matters
\nrelated to such partial termination. Lessor may physically separate the
\nrecaptured portion of the Premises and lease such portion of the Premises to the
\nprospective transferee (or to any other person) without liability to Lessee.\n<\/p>\n

17.05 Regardless of whether consent by Lessor is granted in connection with
\nany Transfer, no Transfer shall release Lessee from any obligation or liability
\nhereunder; Lessee shall remain primarily liable to pay all rent and other sums
\ndue hereunder to Lessor and to perform all other obligations hereunder.
\nSimilarly, no Transfer, with or without the consent of Lessor, shall release any
\nguarantor from its obligations under its guaranty. Upon any assignment or
\nsublease, any rights, options or opportunities granted to Lessee hereunder to
\nextend or renew the Lease Term, to shorten the Lease Term, or to lease
\nadditional space shall be null and void.<\/p>\n\n\n\n
\n

18.<\/p>\n<\/td>\n

\n

Default<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Time is of the essence in the performance of all covenants of Lessee. Lessee
\nwill be in Default if any of the following events occurs:<\/p>\n

18.01 Lessee fails to make within five (5) days of when due, any payment of
\nBase Rent, Additional Rent, or any other monetary payment required to be made by
\nLessee herein and Lessee does not cure such failure within three (3) days after
\nLessor gives written notice of such failure to Lessee; provided, if Lessor has
\ngiven such a written notice with respect to two (2) payments due in any calendar
\nyear, then the failure by Lessee to pay any other payment due in such calendar
\nyear, on or before the date when first due, shall be a Default hereunder without
\nany written notice from Lessor and without any grace or cure period.
\nNotwithstanding the foregoing, Lessee shall not be in default of this Lease the
\nfirst time in a twelve (12) month period that Lessee fails to pay rent when due
\nso long as Lessee pays such overdue rent within five (5) days of written notice
\nfrom Lessor that such overdue amount is due.<\/p>\n

18.02 Lessor discovers that any representation or warranty made by Lessee or
\nany guarantor was materially false when made or that any financial statement of
\nLessee or of any guarantor of this Lease given to Lessor was materially false.\n<\/p>\n

11<\/p>\n

\n

18.03 Lessee makes any general arrangement or assignment for the benefit of
\ncreditors, becomes a “debtor” in a bankruptcy proceeding, is unable to pay its
\ndebts or obligations as they occur, or has an attachment, execution or other
\nseizure of substantially all of its assets located at the Property or its
\ninterest in this Lease.<\/p>\n

18.04 Lessee fails to observe, perform or comply with any of the non-monetary
\nterms, covenants, conditions, provisions or rules and regulations applicable to
\nLessee under this Lease other than as specified above in this Paragraph 18;
\nprovided, if such failure is a curable failure, then such failure shall not be a
\n“Default” unless Lessee does not cure such failure as soon as practicable
\npossible but in no event later than thirty (30) days following written notice of
\nsuch failure from Lessor; provided, however, that if said default cannot be
\ncured within said thirty (30) day period using reasonable diligence, no Default
\nshall be deemed to have occurred if Lessee commences action to cure the Default
\nwithin said thirty (30) day period and diligently pursues a cure thereafter.\n<\/p>\n

18.05 Any guarantor becomes insolvent, becomes a “debtor” in a bankruptcy
\nproceeding, fails to perform any obligation under its guaranty, or attempts to
\nrevoke its guaranty.<\/p>\n\n\n\n
\n

19.<\/p>\n<\/td>\n

\n

Remedies of Lessor<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

19.01 If Lessee fails to perform any duty or obligation of Lessee under this
\nLease, Lessor may at its option, without waiver of Default nor any other right
\nor remedy, perform any such duty or obligation on Lessee153s behalf. The costs and
\nexpenses of any such performance by Lessor will be immediately due and payable
\nby Lessee upon receipt from Lessor of the reimbursement amount required.<\/p>\n

19.02 Upon a Default, with or without notice or demand, and without limiting
\nany other of Lessor153s rights or remedies, Lessor may:<\/p>\n\n\n\n
<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

Terminate this Lease and\/or terminate Lessee153s right to possession of the
\nPremises. Upon any such termination, Lessee will immediately surrender
\npossession of the Premises to Lessor. On termination of this Lease or Lessee153s
\nright of possession, Lessor will be entitled to recover from Lessee: (i) the
\nworth at the time of the award of the unpaid rent which had been earned at the
\ntime of the termination; (ii) the worth at the time of the award of the amount
\nby which the unpaid rents which would have been earned after termination until
\nthe time of award exceeds the amount of such rental loss that Lessee proves
\ncould have been avoided; (iii) the worth at the time of the award of the amount
\nby which the unpaid rents for the balance of the Lease Term after the time of
\naward exceeds the amount of such rental loss for such period that Lessee proves
\ncould be reasonably avoided; and (iv) the worth at the time of the award of any
\nother amount necessary to compensate Lessor for all the damage proximately
\ncaused by Lessee153s failure to perform its obligations under this Lease,
\nincluding specifically the unamortized portion of all brokerage commissions paid
\nin connection with this Lease and all costs of Lessor153s Work (amortized without
\ninterest on a straight line basis over the initial Lease Term), and
\nreimbursement of any free rent, deferred rent or other Lease execution
\ninducement. The expiration or termination of this Lease, and\/or the termination
\nof Lessee153s right to possession, will not release Lessee from any liability
\nunder this Lease.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

Continue the Lease and Lessee153s right to possession and recover rent as it
\nbecomes due. Acts of maintenance or preservation, efforts to relet the Premises,
\nremoval or storage of Lessee153s personal property or the appointment of a
\nreceiver to protect Lessor153s interest under this Lease, will not constitute a
\ntermination of Lessee153s right to possession.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

Pursue any other remedy now or hereafter available to Lessor under the laws
\nor judicial decisions of the state wherein the Premises are located.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

19.03 The “worth at the time of award” referred to in Paragraph 19.02(a)(i),
\n19.02(a)(ii), and 19.02(a)(iv) will additionally include interest computed by
\nallowing interest at the rate of 12% per annum (or, if lower, at the maximum
\nrate allowed by law). The “worth at the time of award” referred to in Paragraph
\n19.02(a)(iii) will be computed by discounting the amount at the discount rate of
\nthe Federal Reserve Bank of San Francisco in effect at the time of award, plus
\none percent (1%).<\/p>\n

19.04 No right or remedy conferred upon or reserved to Lessor in this Lease
\nis intended to be exclusive of any right or remedy granted to Lessor by statute
\nor common law, and each and every such right and remedy will be cumulative.<\/p>\n

12<\/p>\n

\n\n\n\n
\n

20.<\/p>\n<\/td>\n

\n

Condemnation<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

If any portion of the Premises or any portion of the Building in which the
\nPremises is located, or any portion of the Property which would substantially
\ninterfere with Lessor153s ownership, or Lessor153s or Lessee153s ability to conduct
\nbusiness is taken for any public or quasi-public purpose by any governmental
\nauthority, including but not limited to, by exercise of the right of
\nappropriation, inverse condemnation, condemnation or eminent domain, or sold in
\nlieu of such taking, Lessor, at its option, may terminate this Lease without
\nrecourse by Lessee. If this Lease is not terminated, Lessor will promptly
\nproceed to restore the Premises and\/or any portion of the Property used in
\ncommon by all lessees to substantially the same condition as prior to such
\ntaking allowing for any reasonable effects of such taking. Should a portion of
\nthe Premises be taken in a case where Lessor does not exercise its right to
\nterminate this Lease, Lessor will abate the rent corresponding to the term
\nduring which, and to the part of the Premises which, Lessee is deprived on
\naccount of such taking. Any award for any taking or payment made in lieu of
\nexercise of such power will be the property of Lessor, whether such award be
\nmade as compensation for diminution of value of the leasehold or for the taking
\nof the fee, or as severance damages; however, Lessee will be entitled to any
\ncompensation, separately awarded to Lessee for Lessee153s relocation expenses.\n<\/p>\n\n\n\n
\n

21.<\/p>\n<\/td>\n

\n

Estoppel Certificate<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Lessee will execute and deliver to Lessor, within ten (10) days after written
\nrequest from Lessor, a written Estoppel Certificate in form prepared by Lessor
\ncertifying: (i) that this Lease is unmodified and in full force and effect (or,
\nif modified, specifying each such modification); (ii) the Commencement Date and
\nexpiration of the Lease Term; (iii) the absence or status of any rights of
\nLessee to renew, extend, or otherwise alter the Lease Term or to lease
\nadditional space or alter the definition of the Premises; (iv) the date to which
\nrent and any other charges are paid in advance, if any; (v) that there are not,
\nto Lessee153s knowledge, any uncured Defaults on the part of Lessor, or stating
\nthe nature of any uncured Defaults; (vi) the current Base Rent amount and the
\namount and form of the Security Deposit on deposit with Lessor; (vii) that
\nLessor has completed any promised improvements to the Premises and paid any
\npromised improvement allowance (or detailing any work to be performed or
\nallowance to be paid); and (viii) any other information requested, including but
\nnot limited to, any requested information regarding Hazardous Materials. Any
\nsuch Estoppel Certificate may be relied upon by Lessor, and also by any actual
\nor prospective buyer or lender of the Property and any other third party
\ndesignated by Lessor (the “Beneficiaries”). If Lessee fails to execute and
\ndeliver such Estoppel Certificate within such ten (10) day period, then without
\nwaiver of Default or of any other right or remedy of Lessor, Lessor shall have
\nthe right to deliver to the Beneficiaries a completed Substitute Estoppel
\nCertificate regarding this Lease certifying the matters which Lessee was
\nrequested to certify in the Estoppel Certificate. A notice enclosing a copy of
\nthe Substitute Estoppel Certificate shall be simultaneously sent to Lessee. Each
\nstatement in the Substitute Estoppel Certificate shall be deemed true, and shall
\nbe binding upon Lessee, unless Lessee provides, within five (5) days of the
\nreceipt of Lessor153s notice, written notice addressed to Lessor and the
\nBeneficiaries disagreeing with such statement on specific grounds. Lessee shall
\ndefend and indemnify Lessor regarding any claim that a statement in the
\nSubstitute Estoppel Certificate to which Lessee did not so disagree is
\ninaccurate.<\/p>\n\n\n\n
\n

22.<\/p>\n<\/td>\n

\n

Notices<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

All communications and notices required under this Lease shall be in writing
\nand shall be addressed to the respective address of the receiving party set
\nforth in Paragraph 1 above. All notices to Lessee shall be given by reputable
\novernight courier, U. S. mail (First Class, postage prepaid), or hand delivery,
\nand shall be deemed received (i) if mailed, on the earlier of actual receipt or
\nthree (3) days after such mailing, (ii) one business day following delivery by
\nLessor to such an overnight courier, or (iii) upon hand delivery. Any notice to
\nLessee may also be given by posting at the Premises and shall be effective upon
\nsuch posting. Notices to Lessor shall be sent to Lessor by U. S. mail, postage
\nprepaid, registered or certified mail with return receipt requested to the
\naddress indicated in Paragraph 1 and shall be deemed received five (5) days
\nafter such mailing. At any time during the Lease Term, Lessor or Lessee may
\nspecify a different Notice Address by providing written notification to the
\nother.<\/p>\n\n\n\n
\n

23.<\/p>\n<\/td>\n

\n

Holdover<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

If Lessee remains in possession of all or any part of the Premises with
\nLessor153s prior written consent after the expiration or termination of this Lease
\nor of Lessee153s right to possession, such possession will constitute a
\nmonth-to-month tenancy which may be terminated by either Lessor or Lessee upon
\nthirty (30) days written notice and will not constitute a renewal or extension
\nof the Lease Term. If Lessee remains in possession after such expiration or
\ntermination without Lessor153s prior written permission, such possession will
\nconstitute a tenancy-at-will terminable upon forty-eight (48) hours153 notice by
\nLessor and will not constitute a month-to-month tenancy nor a renewal or
\nextension of the Lease Term. In the event of a month-to-month tenancy or
\ntenancy-at-will under this Paragraph, Lessee153s Base Rent will be two hundred
\npercent (200%) of the Base Rent payable during the last month of the Lease Term,
\nany other sums due under this Lease will be payable in the amounts and at the
\ntimes specified in this Lease, and all options, rights of refusal, expansions
\nand\/or renewals shall be null and void. Any tenancy under this Paragraph will be
\nsubject to every other term, condition and covenant contained in this Lease.
\nLessee agrees to defend, indemnify and hold Lessor harmless from any claim or
\ncause of action arising out of related to the failure of Lessee to surrender
\npossession of the Premises to<\/p>\n

13<\/p>\n

\n

Lessor upon the expiration of this Lease or upon any such termination.
\nNotwithstanding the foregoing, Lessee shall have the option to holdover for a
\nperiod of up to three (3) months following the expiration of the lease term at
\n115% of the last rent due under the terms of the lease. Lessee shall be required
\nto provide Lessor one-hundred eighty (180) days notice prior to lease the lease
\nexpiration date.<\/p>\n\n\n\n
\n

24.<\/p>\n<\/td>\n

\n

Default by Lessor; Limitation of Liability; Real Estate Investment
\nTrust<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

24.01 In the event Lessor fails to perform any obligation required to be
\nperformed under this Lease, Lessee will notify Lessor in writing of such
\nfailure. Lessor shall not be deemed in Lessor Default hereunder unless and until
\nsuch notice is actually received by Lessor and Lessor fails within thirty (30)
\ndays of receipt of such notice to commence to make a good faith effort to cure
\nthe failure or thereafter ceases to pursue such cure to completion.<\/p>\n

24.02 The obligations of Lessor under this Lease shall be binding only on the
\nundersigned Lessor and not upon any of its subsidiaries or affiliates nor upon
\nany partners, investors, trustees, directors, officers, employees, agents,
\nshareholders, advisors or managers of Lessor in their individual capacities.
\nWith respect to any obligations of Lessor to Lessee under this Lease and with
\nrespect to any liabilities arising at the Property, Lessee153s sole and exclusive
\nremedy shall be a claim against the undersigned Lessor.<\/p>\n

24.03 In consideration of the benefits accruing hereunder, Lessee on behalf
\nof itself and all of its Transferees covenants and agrees that, in the event of
\nany actual or alleged Lessor Default of this Lease or in the event of any other
\nclaim or cause of action by Lessee, Lessee153s recourse against Lessor for any
\nmonetary damages (over and above damages actually paid by available insurance,
\nif any) will be limited to Lessor153s interest in the amount of equity Lessor
\nwould have in the Property if the Property were encumbered by debt in an amount
\nequal to fifty percent (50%) of the value of the Property; calculations of
\nequity shall be made as of the initial date Lessee notifies Lessor of the actual
\nor alleged Default or other claim the Property. Any judgment against Lessor
\nshall be satisfied only out of an offset against Rents and out of the Property;
\nno other assets of Lessor shall be subject to levy, execution or other
\nenforcement procedure for the satisfaction of any judgment by Lessee against
\nLessor. Any claims by Lessee against Lessor will be limited to actual damages
\nonly and will not, under any circumstances, include lost profits or
\nconsequential damages.<\/p>\n

24.04 If Lessor is a real estate investment trust, and if Lessor in good
\nfaith determines that its status as a real estate investment trust under the
\napplicable provisions of the Internal Revenue Code of 1986, as heretofore or
\nhereafter amended, will be jeopardized because of any provision of this Lease,
\nLessor may require reasonable amendments to this Lease and Lessee shall not
\nunreasonably withhold or delay its consent thereto, provided that such
\nmodifications do not in any way, (i) increase the obligations of Lessee under
\nthis Lease or (ii) adversely affect any rights or benefits to Lessee under this
\nLease. Lessor shall pay all reasonable costs incurred by Lessee, including
\nwithout limitation, legal fees incurred for reviewing any such proposed
\nmodifications.<\/p>\n

24.05 Lessee represents that, to its knowledge, no person or entity who is a
\nsignificant indirect owner of Lessor, owns actually or constructively a 10% or
\nmore interest in Lessee. Lessee will promptly notify Lessor if it learns that
\nany such ownership interest exists. Significant owners of Lessor at this time
\ninclude Public Storage, Inc. and New York Common Retirement Fund.<\/p>\n

24.06 Lessor and any successor Lessor have the right to sell the Property or
\nany portion of it, or to assign its interest in this Lease, at any time and from
\ntime to time. Upon the sale or any other conveyance by Lessor of the Property,
\nor a portion thereof which includes the Premises, Lessor will be released from
\nall obligations and liability under this Lease arising out of any act, event,
\noccurrence or omission occurring or existing after the date of such conveyance.\n<\/p>\n\n\n\n
\n

25.<\/p>\n<\/td>\n

\n

Subordination<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Without the necessity of any additional document being executed by Lessee for
\nthe purposes of effecting a subordination, and at the election of Lessor or any
\nmortgagee or any ground lessor with respect to the land of which the Premises
\nare a part, this Lease will be subject and subordinate at all times to: (i) all
\nground leases or underlying leases which may now exist or hereafter be executed
\naffecting the Property, and (ii) the lien of any mortgage or deed of trust which
\nmay now exist or hereafter be executed in any amount for which the Property,
\nground leases or underlying leases, or Lessor153s interest or estate in any of
\nsaid items is specified as security. Lessor or any mortgagee or ground lessor
\nwill have the right, at its election, to subordinate or cause to be subordinated
\nany ground lessee or underlying leases or any such liens to this Lease. If
\nLessor153s interest in the Premises is acquired by any ground lessor or mortgagee,
\nor in the event any proceedings are brought for the foreclosure of, or in the
\nevent of exercise of power of sale under, any mortgage or deed of trust made by
\nLessor covering the Premises, or in the event a conveyance in lieu of
\nforeclosure is made for any reason, Lessee will, notwithstanding any
\nsubordination and upon the request of such successor in interest to Lessor,
\nattorn to and become the Lessee of the<\/p>\n

14<\/p>\n

\n

successor in interest to Lessor and recognize such successor in interest as
\nthe Lessor under this Lease, provided Lessee153s interests hereunder shall not be
\ndisturbed so long as Lessee is not in Default hereunder. Lessee acknowledges
\nthat although this Paragraph is self-executing, Lessee covenants and agrees to
\nexecute and deliver, upon demand by Lessor and in the form requested by Lessor,
\nor any other mortgagee or ground lessor, any additional documents evidencing the
\npriority or subordination of this Lease with respect to any such ground leases
\nor underlying leases or the lien of any such mortgage or deed of trust, provided
\nLessee153s interests hereunder shall not be disturbed so long as Lessee is not in
\nDefault hereunder. Lessee agrees that any person or entity who acquires title to
\nthe Premises pursuant to a foreclosure of a deed of trust or mortgage, or deed
\nin lieu thereof, or the termination of an underlying ground lease or master
\nlease (a “Foreclosing Party”), even if such Foreclosing Party elects to have
\nLessee attorn to the Foreclosing Party under this Lease, shall not be (i) liable
\nfor any act or omission of any prior lessor or with respect to events occurring
\nprior to its acquisition of ownership, (ii) subject to any offsets or defenses
\nwhich Lessee might have against any prior lessor, (iii) bound by prepayment of
\nmore than one month153s rent, (iv) liable for any security deposit not actually
\nreceived by such person or entity, (v) bound by any amendment or modification to
\nthis Lease not consented to in writing by the holder of the mortgage, deed of
\ntrust, ground lease or master lease or the Foreclosing Party, or (vi) liable for
\nany obligation or liability accruing under this Lease after the Foreclosing
\nParty assigns its interest under this Lease to a third party. Any such
\nForeclosing Party is expressly made a third party beneficiary of the foregoing
\nprovisions, and all other provisions of this Lease which are for the benefit of
\na Foreclosing Party, which rights shall survive a foreclosure of the deed of
\ntrust or mortgage.<\/p>\n\n\n\n
\n

26.<\/p>\n<\/td>\n

\n

Force Majeure<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Lessor will not be deemed in Lessor Default or have liability to Lessee, nor
\nwill Lessee have any right to terminate this Lease or abate rent or assert a
\nclaim of partial or constructive eviction, because of Lessor153s failure to
\nperform any of its obligations under this Lease if the failure is due in part or
\nin full to reasons beyond Lessor153s reasonable control. If this Lease specifies a
\ntime period for performance of an obligation by Lessor, that time period will be
\nextended by the period of any delay in Lessor153s performance caused by such
\nevents as described herein.<\/p>\n\n\n\n
\n

27.<\/p>\n<\/td>\n

\n

Miscellaneous Provisions<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

27.01 Whenever the context of this Lease requires, the word “person” shall
\ninclude any entity, and the singular shall include the plural and the plural
\nshall include the singular. If more than one person or entity is Lessee, the
\nobligations of each such person or entity under this Lease will be joint and
\nseveral. Without diminishing the provisions of Paragraph 17, the terms,
\nconditions and provisions of this Lease will apply to and bind the heirs,
\nsuccessors, executors, administrators and assigns of Lessor and Lessee.<\/p>\n

27.02 The captions and headings of this Lease are used for the purpose of
\nconvenience only and shall not be construed to interpret, limit or extend the
\nmeaning of any part of this Lease. This Lease contains all of the agreements and
\nconditions made between Lessor and Lessee and may not be modified in any manner
\nother than by a written agreement signed by both Lessor and Lessee. Any
\nstatements, promises, agreements, warranties or representations, whether oral or
\nwritten, not expressly contained herein will in no way bind Lessor and Lessee
\nexpressly waives all claims for damages by reason of any statements, promises,
\nagreements, warranties or representations, if any, not contained in this Lease.
\nNo provision of this Lease shall be deemed to have been waived by Lessor unless
\nsuch waiver is in writing signed by a regional vice president or higher of
\nLessor or of Lessor153s management company, and no custom or practice which may
\ndevelop between the parties during the Lease Term shall waive or diminish the
\nLessor153s right to enforce strict performance by Lessee of any terms of the
\nLease. No waiver by Lessor of a Default by Lessee of any term, covenant or
\ncondition of this Lease will be deemed a waiver of any other term, covenant or
\ncondition of this Lease, or of any subsequent Default by Lessee of the same or
\nany other term, covenant or condition of this Lease. No delay or omission by
\nLessor to seek a remedy for any Lessee Default of this Lease shall be deemed a
\nwaiver by Lessor of its remedies or rights with respect to such Default.
\nAdditionally, regardless of Lessor153s knowledge of a Default at the time of such
\nacceptance, the acceptance of rent or any other payment by Lessor will not
\nconstitute a waiver by Lessor of any Default by Lessee. The duties and
\nwarranties of Lessor are limited to those expressly stated in this Lease and do
\nnot and shall not include any implied duties or implied warranties, now or in
\nthe future. No representations or warranties have been made by Lessor other than
\nthose contained in this Lease. This Lease is governed and construed in
\naccordance with the laws of the state in which the Premises are located, and
\nvenue of any legal action will be in the county where the Premises are located.\n<\/p>\n

27.03 Time is of the essence for the performance of each term, condition and
\ncovenant of this Lease.<\/p>\n

27.04 This Lease has been fully reviewed by both parties and shall not be
\nstrictly or adversely construed against the drafter. If any provision contained
\nherein is determined to be invalid, illegal or unenforceable in any respect,
\nthen (a) such provision shall be enforced to the fullest extent allowed, and (b)
\nsuch invalidity, illegality, or unenforceability will not affect any other
\nprovision of this Lease.<\/p>\n

15<\/p>\n

\n

27.05 Lessee hereby agrees not to disclose any terms of this Lease without
\nthe prior written consent of Lessor. Lessee shall not record this Lease or any
\nshort form memorandum hereof.<\/p>\n

27.06 The rights and obligations of the parties under this Lease shall
\nsurvive the expiration of this Lease and the termination of this Lease and\/or of
\nLessee153s right of possession.<\/p>\n

27.07 Lessor and Lessee each warrant to the other that it has not dealt with
\nany broker or agent in connection with this Lease, other than the person(s)
\nlisted in Paragraph 1 above. Lessor and Lessee each agree to indemnify the other
\nagainst all costs, expenses, legal fees and other liability for commissions or
\nother compensation claimed by any other broker or agent by reason of the act or
\nagreement of the indemnifying party.<\/p>\n

27.08 Lessee shall not permit or allow any activity in the Premises which
\nwill have an adverse effect on indoor air quality, including smoking and any
\nremodeling activity or introduction of materials which would have such an
\neffect. Lessor shall have the right, but not the obligation, to monitor indoor
\nair quality within the Project. Lessee shall take such steps to protect and to
\nimprove indoor air quality as Lessor may request from time to time.<\/p>\n

27.09 Lessor has no duty to provide security for any portion of the Project.
\nTo the extent Lessor elects to provide any security, Lessor is not warranting
\nthe effectiveness of any security personnel, services, procedures or equipment
\nand Lessee shall not rely on any such personnel, services, procedures or
\nequipment. Lessor shall not be liable for failure of any such security
\npersonnel, services, procedures or equipment to prevent or control, or to
\napprehend anyone suspected of, personal injury or property damage in, on or
\naround the Project.<\/p>\n

27.10 The grant of any consent or approval required from Lessor under this
\nLease shall be proved only by proof of a written document signed and delivered
\nby Lessor expressly setting forth such consent or approval. Unless otherwise
\nspecified herein, any such consent or approval may be withheld in Lessor153s sole
\ndiscretion. Any consent may be issued subject to conditions determined by
\nLessor, in its sole discretion. Notwithstanding any other provision of this
\nLease, the sole and exclusive remedy of Lessee for any alleged or actual
\nimproper withholding, delaying or conditioning of any consent or approval by
\nLessor shall be the right to specifically enforce any right of Lessee to require
\nissuance of such consent or approval on conditions allowed by this Lease; in no
\nevent shall Lessee have the right to terminate this Lease, to collect monetary
\ndamages, or to pursue any other remedy for any actual or alleged improper
\nwithholding, delaying or conditioning of any consent or approval, regardless of
\nwhether this Lease requires that such consent or approval not be unreasonably
\nwithheld, conditioned or delayed.<\/p>\n

27.11 Lessee agrees to abide by, keep and observe all Rules and Regulations
\nset forth in Exhibit “D” and all additions and amendments to the same of which
\nLessor provides written notice to Lessee. Lessor will not be responsible to
\nLessee for any nonperformance by any other lessee, occupant or invitee of the
\nProperty of any said Rules and Regulations.<\/p>\n

27.12 Lessee will not place any signage on or about the Property, or on any
\npart thereof, without the prior written consent of Lessor which Lessor may
\nwithhold or condition in its sole discretion. All Lessee signage will comply
\nwith the terms and conditions of this Lease, the sign criteria set forth in
\nExhibit “C” and Exhibit “D,” or other criteria which Lessor may establish from
\ntime to time.<\/p>\n

27.13 Lessee will not vacate or abandon the Premises, or permit the Premises
\nto remain unoccupied for any period longer than fifteen (15) consecutive days
\nany time during the Lease Term. If Lessee abandons, vacates, or surrenders the
\nPremises, or is dispossessed by process of law, or otherwise, any personal
\nproperty belonging to Lessee left in or about the Premises will, at the option
\nof Lessor, be deemed abandoned and may be disposed of by Lessor at the expense
\nand risk of Lessee.<\/p>\n

27.14 In the event any party to this Lease initiates litigation to enforce
\nthe terms of this Lease or to declare rights under this Lease, the prevailing
\nparty will be entitled to collect its reasonable attorneys fees shall include
\nall attorneys fees incurred at and in preparation for discovery, arbitration,
\ntrial, appeal and review, including deposition attorney153s fees. This attorney153s
\nfee provision shall also apply to all litigation and other proceedings in
\nBankruptcy Court.<\/p>\n

27.15 Submission of this document for examination and signature by Lessee is
\nnot an offer to lease and does not create a reservation or option to lease. This
\ndocument will become effective and binding only upon full execution and delivery
\nby both Lessee and Lessor.<\/p>\n

27.16 OPTION TO RENEW LEASE<\/strong><\/p>\n

Provided Lessee is not in Default of the Lease at the time it exercises this
\noption and has not been in Default during any other period of the Lease Term
\nthat has not been cured, Lessee is hereby granted one option to renew this Lease
\nfor an additional five (5) years at the Base Rent rate then in effect for<\/p>\n

16<\/p>\n

\n

comparable space in the market at the effective date of the commencement of
\nsuch renewal term, but not less than the last monthly rental amount payable by
\nLessee prior to commencement of such renewal term. Such leasing for the renewal
\nterm shall be, at the election of Lessor, on the same terms and conditions as
\nset forth in this Lease or on the terms and conditions of the standard lease
\nform then used by Lessor with respect to the Project. The within option shall be
\nexercised by Lessee, if at all, by written notice given no sooner than twelve
\n(12) full calendar months and no later than eight (8) full calendar months prior
\nto the expiration of the Lease Term; Lessee shall include with such notice a
\ncomplete set of current financial statements of Lessee and all guarantors.<\/p>\n

In the event Lessor and Lessee are unable to agree as to the Base Rent rate
\napplicable to such renewed term within thirty (30) days of Lessee153s exercise of
\nits option to renew, both parties agree to mediate their disagreement. If
\nmediation does not resolve the disagreement in fair market value, Lessee shall
\nhave the option to refer the matter to an MAI certified appraisal procedure to
\ndetermine the Base Rent rate. Lessor and Lessee shall appoint an MAI certified
\nappraiser, such appraiser shall determine the current market rent (to be not
\nless than the minimum rent set forth above in this Section) and such
\ndetermination shall be binding upon Lessor and Lessee. Lessor and Lessee shall
\neach pay one-half of the fees and costs of such appraiser.<\/p>\n

Upon determination of the Base Rent rate, Lessor shall deliver to Lessee
\neither an amendment to this Lease renewing the Lease Term, or a new lease for
\nthe renewal term based upon the form of the standard lease then used by Lessor
\nwith respect to the Project. Lessee shall execute and deliver the submitted
\ndocument to Lessor within ten (10) days accompanied by payment of the amount of
\nmoney which, when added to any existing Security Deposit, shall increase the
\nSecurity Deposit amount to a sum which bears the same relationship to the
\nrenewal Base Rent as the original Security Deposit bears to the Base Rent with
\nrespect to the initial Lease Term.<\/p>\n

Notwithstanding any provision hereof, during the thirty (30) day period
\nallowed for the parties to agree upon the renewal Base Rent rate, Lessor shall
\nhave the right to rescind the exercise of the renewal option by written notice
\nin the event Lessor determines, in its reasonable discretion, that the financial
\nstatements delivered by Lessee with the renewal notice are not satisfactory to
\nLessor.<\/p>\n

The rights of Lessee under this Paragraph are not assignable separately from
\nthis Lease. Such rights of Lessee shall terminate upon: (a) any assignment,
\nsublease, or other Transfer, and\/or (b) any monetary default and\/or (c) any
\ntermination of this Lease or of Lessee153s right of possession hereunder;
\nprovided, however, in the event Lessee shall have exercised this renewal option
\nand Lessor subsequently terminates this Lease or Lessee153s right of possession
\nhereunder for Default, the damages to which Lessor shall be entitled shall
\ninclude damages with respect to the renewal term.<\/p>\n

27.17 Mediation First<\/strong><\/p>\n

Any disputes under the Lease, after first attempting to be resolved through
\nmediation, including with respect to the determination of Additional Rent and\/or
\nFair Market Rent, shall be resolved by binding arbitration under the rules of
\nthe Arbitration Service of Portland, or such other procedures as shall be
\nmutually agreed upon between Lessor and Lessee, as set for the in the lease.
\nPending the final determination of any dispute, Lessee shall pay the last Base
\nRent amount due under the Initial Term and make up any shortfall immediately
\nafter final determination of Fair Market Rent.<\/p>\n

27.18 The following Exhibits are attached to this Lease and by this reference
\nmade a part hereof: “A-1”, “A-2”, “A-3”, “A-4”, “B”, “C”, and “D”.<\/p>\n

17<\/p>\n

\n

IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of the
\nLease Execution Date.<\/p>\n

THIS LEASE, WHETHER OR NOT EXECUTED BY LESSEE, IS SUBJECT TO ACCEPTANCE BY
\nLESSOR, ACTING BY ITSELF OR BY ITS AGENT BY THE SIGNATURE ON THIS LEASE OF ITS
\nSENIOR VICE PRESIDENT, VICE PRESIDENT, REGIONAL MANAGER OR DIRECTOR OF LEASING.\n<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

LESSOR:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

LESSEE:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

PS Business Parks, L.P.<\/strong><\/p>\n

A California Limited Partnership<\/strong><\/p>\n

By PS Business Parks, Inc.<\/strong><\/p>\n

Its General Partner<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

Digimarc Corporation<\/strong><\/p>\n

A Delaware Corporation<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

\/s\/ Coby A. Holley<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

\/s\/ Paul R. Gifford<\/p>\n<\/td>\n<\/tr>\n

\n

By: Coby A. Holley, Vice President<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

By: Paul R. Gifford, President & COO <\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Date: 3-24-04<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

Date: March 22, 2004<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Lease Execution Date<\/p>\n

Lessor Fed. ID #: 95-4609260<\/p>\n

18<\/p>\n

\n

PREMISES “A-1” FIRST FLOOR <\/strong><\/p>\n

[DIAGRAM OF LEASED PROPERTY] <\/strong><\/p>\n

19<\/p>\n

\n

PREMISES “A-1” SECOND FLOOR <\/strong><\/p>\n

[DIAGRAM OF LEASED PROPERTY] <\/strong><\/p>\n

20<\/p>\n

\n

BUILDING “A-2” <\/strong><\/p>\n

[DIAGRAM OF LEASED PROPERTY] <\/strong><\/p>\n

21<\/p>\n

\n

PROJECT “A-3” <\/strong><\/p>\n

[DIAGRAM OF LEASED PROPERTY] <\/strong><\/p>\n

22<\/p>\n

\n

PROPERTY “A-4” <\/strong><\/p>\n

[DIAGRAM OF LEASED PROPERTY] <\/strong><\/p>\n

23<\/p>\n

\n

EXHIBIT B <\/strong><\/p>\n

WORK LETTER <\/strong><\/p>\n

1. Lessor153s Work<\/strong>.<\/p>\n

1.1. Plans and Costs<\/strong>.<\/p>\n

If Lessor has agreed to alter or improve the Premises prior to delivery of
\npossession to Lessee, then this box is checked: 190. All such alterations and
\nimprovements shall be described on plans and specifications to be approved by
\nthe parties as described below (the “Plans”).<\/p>\n

(a) Approval of Plans<\/strong>. Lessor shall have Plans prepared and
\nshall submit the same to Lessee for review, comment, and approval. The parties
\nshall agree upon the final Plans and a related estimate of the “Costs of
\nLessor153s Work” by May 1, 2004<\/u><\/strong> (the “Plan Approval Date).
\nIf Lessee does not approve plans by the plan Approval Date, the number of days
\nof delay in such approval beyond the Plan Approval Date shall be deemed days of
\ndelay attributable to and caused by Lessee.<\/p>\n

(b) Lessor153s Work Defined<\/strong>. The work to be performed by
\nLessor as shown on the Plans, as the same may be modified by change order as
\ndiscussed below, is referred to as “Lessor153s Work.”<\/p>\n

(c) Costs<\/strong>. The “Costs of Lessor153s Work” shall include all
\ncosts incurred by Lessor in connection with Lessor153s Work including but not
\nlimited to all design costs (architectural, engineering, mechanical and other
\ndesign costs), all hard and soft construction costs, and all costs of materials,
\ngeneral conditions, permits and inspection fees. In addition, Lessee may use a
\nportion of the Work Allowance for moving costs, cabling, furniture, fixtures and
\nequipment. Lessee understands and agrees that (i) the actual Costs of Lessor153s
\nWork can only be determined after all Lessor153s Work is completed, (ii) the
\nactual Costs of Lessor153s Work may exceed the estimate and also any other
\nestimate communicated to Lessee prior to or during the course of completing
\nLessor153s Work, and (iii) the actual Costs of Lessor153s Work may increase for
\nreasons, including but not limited to, Change Orders, increased costs resulting
\nfrom any act or omission of Lessee, unforeseen or hidden conditions discovered
\nduring the course of construction, or additional costs or delays caused by any
\ngovernmental authority or agency requirement. The Costs of Lessor153s Work shall
\ninclude a reasonable fee as compensation to Lessor for coordination and
\nsupervision of Lessor153s Work and any Lessee Improvements.<\/p>\n

(d) Payment<\/strong>. Lessor shall pay the Costs of Lessor153s Work up
\nto $1,555,301 ($33.75 per square foot) (the “Lessor153s Work Allowance”). In the
\nevent the initial estimate of the Costs of Lessor153s Work approved pursuant to
\nthe above provisions exceeds the Lessor153s Work Allowance, Lessee shall pay the
\nexcess to Lessor upon approval of the Plans and such initial estimate.
\nSeventy-five (75%) percent shall be due prior to commencement of construction
\nand twenty-five (25%) percent shall be due at Substantial Completion.<\/p>\n

(e) Payment Delays<\/strong>. If Lessee fails to pay to Lessor any
\namount required by this Work Letter, as and when due, then, without waiver of
\ndefault or of other rights and remedies, Lessor shall have the right to suspend
\nLessor153s Work until payment is received; the number of days by which any such
\nsuspension delays substantial completion shall be deemed days of delay
\nattributable to and caused by Lessee.<\/p>\n

(f) Architects\/Space Planning.<\/strong> Lessor has engaged LRS
\nArchitects to complete space plan and design development drawings. If Lessee is
\ndissatisfied with the space plan, Lessee shall have the option at their cost to
\nselect their own architect, subject to the reasonable approval of Lessor. Such
\ncosts can be included in the cost of Lessor153s Work.<\/p>\n

1.2. Construction<\/strong>. The construction obligation of Lessor is
\nto substantially complete Lessor153s Work substantially in accordance with the
\nPlans. Lessor shall use reasonable efforts to substantially complete Lessor153s
\nWork three weeks prior to the scheduled Commencement Date set forth in Section 1
\nof the Lease; provided the consequences of delay in substantial completion of
\nLessor153s Work are those set forth in the Lease. Both the initial Tenant
\nimprovement work, as well as any subsequent major work in the premises shall be
\nperformed by Lessor. Lessee shall have the benefit of competitive bidding for
\nwork to be performed by Lessor153s contractor. Any fees for overhead or
\nsupervision of Lessor153s work in the premises shall be consistent with reasonable
\nindustry standards and all costs for work to be performed in the premises shall
\nbe subject to Lessor and Lessee prior approvals.<\/p>\n

24<\/p>\n

\n

1.3. Changes in the Plans<\/strong>.<\/p>\n

(a) A “Change Order” is a Lessor required or Lessee requested change to the
\nPlans.<\/p>\n

(b) Lessor shall have the right to require a Change Order based on applicable
\ncodes, actual site conditions, and\/or ambiguities or inconsistencies in the
\nPlans.<\/p>\n

(c) Lessee may request from time to time a Change Order. If Lessee wishes to
\nrequest a Change Order, Lessee will submit in writing to Lessor a detailed
\nrequest of the change. Lessor is not obligated to approve any Lessee requested
\nchange. If Lessor does approve the same, Lessor will deliver to Lessee a written
\nstatement, hereinafter referred to as “Lessor153s Change Order Statement”, of the
\nestimated costs and expenses of the change with a reasonable estimate, if
\napplicable, of the additional time required for substantial completion of
\nLessor153s Work.<\/p>\n

(d) Within three (3) business days following receipt by Lessee of Lessor153s
\nChange Order Statement, Lessee will provide Lessor its written authorization to
\nproceed with the change. If the change increases the Costs of Lessor153s Work and
\nthe total Costs of Lessor153s Work exceed the Allowance, Lessee shall pay the
\namount required at the time of providing authorization to proceed. If Lessee
\ndoes not provide such written authorization to Lessor153s Change Order Statement
\naccompanied by payment of such required amount within this time period, Lessee153s
\nrequest for a Change Order shall be deemed cancelled. All delays attributable to
\nLessee requested changes, whether or not approved by Lessor and whether or not
\ncancelled by Lessee, shall be deemed delays caused by Lessee. Lessee shall pay
\nto Lessor any costs incurred by Lessor regarding a Lessee requested change that
\nis cancelled.<\/p>\n

1.4. Completion and Delivery<\/strong>. Possession of the Premises
\nshall be delivered to Lessee when Lessor153s Work is substantially completed in
\naccordance with the Plans, as reasonably determined by Lessor or on such earlier
\ndate, if any, as is determined pursuant to the operation of Section 2.03 of the
\nLease. Within three (3) days of written request by Lessor, Lessee shall execute
\nand deliver to Lessor a confirmation letter prepared by Lessor affirming
\nsubstantial completion of Lessor153s Work, the date of Lessor153s delivery of the
\nPremises, and such other matters as Lessor may reasonably request.<\/p>\n

1.5 Punch list Work<\/strong>. Lessor153s Work shall be deemed
\nsubstantially completed even if minor items of work which do not materially
\nadversely affect Lessee153s ability to conduct its business remain to be completed
\nor corrected (hereinafter referred to as “Punch list Items”). Lessee shall
\nnotify Lessor of any Punch list Items by written notice given within ten (10)
\ndays following receipt of Lessor153s written notification of substantial
\ncompletion of Lessor153s Work. Lessee shall be deemed to have approved Lessor153s
\nWork if Lessee does not deliver such a list to Lessor within such time period
\nand to have approved all of Lessor153s Work except only properly and timely listed
\nPunch list Items. The obligation of Lessor regarding Punch list Items shall be
\nto complete the same to industry standard. Lessor shall have complete access to
\nthe Premises for the purpose of performing punch list work. Any dispute as to
\nPunch list Items shall be resolved by an architect or other qualified
\nprofessional designated by Lessor, but such dispute shall not delay the date
\nupon which Lessor153s Work is deemed substantially complete.<\/p>\n

2. Lessee Improvements<\/strong>. Any work of improvement Lessee
\nproposes to undertake which is within the definition of “Lessee Improvements”
\nset forth in Section 10.01 of the Lease shall be subject to the following
\nprovisions (and also subject to the provisions of Section 10 of the Lease). If
\nno such Lessee Improvements are to be undertaken by Lessee, then the provisions
\nof Paragraph 2 of this Work Letter shall be disregarded.<\/p>\n

2.1. Lessee Plans<\/strong>. Lessee must obtain the prior written
\napproval of Lessor regarding complete plans and specifications for the Lessee
\nImprovements. If such plans and specifications are already approved, the
\napproved plans and specifications (or a list of the same) are attached as
\nSchedule 2; otherwise, Lessee shall submit plans and specifications for the
\napproval of Lessor pursuant to Paragraph 10 of the Lease.<\/p>\n

2.2. Scheduling; Avoidance of Inconvenience<\/strong>. Following
\ncompletion of Lessor153s Work, subject to a punch list, Lessor shall deliver a
\nC.O. or temporary C.O. to Lessee and grant a period of three (3) weeks prior
\noccupancy to move-in to the Premises which will include installation of
\nFF&E, telecommunications and computer cabling. In the event Lessor
\nseparately gives written permission to Lessee allowing any portion of Lessee
\nImprovements to be installed or materials to be delivered prior to substantial
\ncompletion of Lessor153s Work, then (a) Lessee waives any claims for delays in its
\nwork and shall instruct its contractor to follow the directives and orders of
\nLessor153s contractor, and (b) Lessee shall schedule its work such that union and
\nnon-union workers will not be working side by side at the Premises, and (c) any
\ndamage to Lessor153s Work shall be deemed to have been caused by Lessee and its
\ncontractor unless conclusively proved otherwise by Lessee. Lessee shall have the
\nright to retain its own specialty contractors to perform any portion of the work
\nnecessary to construct and outfit the Premises (which will not be part of the
\ngeneral contractor153s scope of work nor shall a mark-up be added). The Lessee153s\n<\/p>\n

25<\/p>\n

\n

contractors153 work shall include, but not be limited to, data cabling,
\ntelephone and data equipment, security, audio\/visual equipment, and furniture
\nsystems. Lessee153s contractor(s) and Lessor153s contractor(s) shall work in harmony
\nduring the period of Lessee fit-up. Lessee and Lessee153s contractors shall have
\nreasonable access to the Premises during the construction (to be coordinated
\nwith the General Contractor to install cabling and for the purpose of inspecting
\nthe work in progress.<\/p>\n

2.3. Inspection<\/strong>. Lessor and Lessor153s agents shall have the
\nright, but not the obligation, to inspect the construction of Lessee
\nImprovements from time to time. If Lessor shall give Lessee written notice of
\nfaulty construction or any other deviation from the approved plans, Lessee shall
\npromptly make the necessary corrections to Lessor153s reasonable satisfaction.
\nHowever, neither the right herein granted to Lessor to make such inspections,
\nnor the making of such inspections by Lessor, shall operate as a waiver of any
\nrights of Lessor to require good and workmanlike performance of all Lessee
\nImprovements in strict accordance with plans approved by Lessor. Notwithstanding
\nany inspection by Lessor, Lessee acknowledges that Lessor153s sole interest in
\ndoing so is to protect the Building and Lessor153s interests. Accordingly, Lessee
\nshall not rely upon Lessor153s inspections or approvals, and agrees that Lessor
\nshall not be the guarantor of, nor responsible for, the quality of any of Lessee
\nImprovements or the conformity of any Lessee Improvements with approved plans or
\nwith any applicable legal requirements. Lessee shall be solely responsible for,
\nand shall remedy, at Lessee153s sole expense, any and all defects and
\nnonconformities in Lessee Improvements that may appear during or after the
\ncompletion thereof.<\/p>\n

2.4. Ownership of Lessee Improvements<\/strong>. Unless otherwise
\nspecified by Lessor, ownership of and responsibility for all Lessee Improvements
\nshall be governed by the provisions of the Lease.<\/p>\n

2.5. Delays<\/strong>. The parties expressly acknowledge and agree
\nthat none of Lessee153s obligations under the Lease (including Lessee153s obligation
\nto pay rent) shall be delayed, terminated or otherwise affected on account of
\nany delay in completion of the Lessee Improvements from any cause other than the
\nfault of Lessor.<\/p>\n

2.6. Compliance<\/strong>. Access to the Premises for Lessee to
\ninstall Lessee Improvements is granted, when authorized under Section 2.2 above,
\nsubject to all provisions of the Lease and this Work Letter and Lessee shall be
\nbound by and comply with all such provisions.<\/p>\n

2.7. Costs<\/strong>. Lessee shall pay all costs and expenses related
\nto Lessee Improvements as and when due in compliance with Paragraph 10 of the
\nLessee.<\/p>\n

2.8. Lessee Allowance<\/strong>. Lessor agrees to reimburse Lessee for
\nthe costs of Lessee153s Work paid by Lessee from the Lessor153s Work Allowance. The
\nLessor153s Work Allowance can only be used to reimburse hard and soft costs of
\nimprovements to the Premises including design costs or the purchase of furniture
\nor equipment. Lessor shall pay to Lessee within forty-five (45) days after the
\ndate that Lessee requests the same; any such request shall be made only after
\n(a) Lessee submits to Lessor satisfactory evidence of qualified expenditures,
\nfinal completion of and full payment for all Lessee Improvements and expenses,
\nand compliance with all requirements of the Lease and this Work Letter regarding
\nthe Lessee Improvements, (b) Lessee accepts the Premises and Lessor153s Work and
\ntakes full occupancy of the Premises, and (c) General Contractor and all other
\nservice providers are paid in full. Lessor shall have no obligation to pay the
\nTI Allowance at any time that a Lessee Default occurs and is outstanding, at any
\ntime following termination of the Lease or of Lessee153s right of possession, or
\nif proper request for the same is not made on or before ninety (90) days
\nfollowing the Commencement Date.<\/p>\n

3. Default<\/strong>. Any failure by Lessee under the terms of this
\nWork Letter shall constitute a Default under the Lease in accordance with the
\nprovisions of the Lease, and shall entitle Lessor to exercise all remedies set
\nforth in the Lease.<\/p>\n

26<\/p>\n

\n

EXHIBIT “C” <\/strong><\/p>\n

SIGN CRITERIA <\/strong><\/p>\n

Conformity by Lessee to the following Sign Criteria requirements shall be
\nstrictly enforced and are terms and conditions of the Lease.<\/p>\n\n\n\n
\n

1.<\/p>\n<\/td>\n

\n

GENERAL REQUIREMENTS<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

1A. The term “Signage” as used herein and elsewhere within the Lease shall
\ninclude, but not be limited to, any signs, placards, banners, pennants,
\nlettering, insignias, trademarks, marquees, art work, and any and all other
\ndisplay and advertising materials.<\/p>\n

1B. Lessee shall not install or display any Signage anywhere on the Premises,
\nProject or Property without Lessor153s prior written consent, such consent not to
\nbe unreasonably withheld, delayed or conditioned. Such Signage approval by
\nLessor, shall include, but not be limited to, Lessee Signage installed or
\ndisplayed on or attached to any glass areas, doors, roofs, walls, landscaped
\nareas, walkways, vehicles, machinery or other apparatus, whether permanently
\naffixed to or from time to time on or about the Property. Lessor hereby consents
\nto Lessee153s installation of signage on the Building153s roof, eyebrow and at
\nProject monuments.<\/p>\n

1C. Lessor reserves the right to designate the location and quantity of all
\nLessee Signage.<\/p>\n

1D. The size, design, content, color and other physical aspects of Lessee
\nSignage, as well as the materials, fabrication and installation methods to be
\nemployed, must be approved by Lessor, in writing, prior to commencement of any
\nSignage fabrication or installation. No exposed conduit, tubing, “J” box or
\nraceway is permitted on any Lessee Signage. Flashing, moving or audible Lessee
\nSignage is prohibited. The composition, size, style, height, color, etc. of
\nLessor approved signage is attached hereto.<\/p>\n

1E. All Lessee Signage must comply with any and all governing laws, codes,
\nregulations, covenants and restrictions. No labels will be permitted on the
\nexposed surface of any Lessee Signage, except those labels required by any
\ngoverning authority.<\/p>\n

1F. The Lease Section 27.12 shall control with respect to the allocation of
\nthe cost and expense related to signage.<\/p>\n

1G. Should Lessee fail to maintain its Signage at a standard to be determined
\nby Lessor in its reasonable discretion, then Lessor may, without any recourse by
\nLessee or liability by Lessor to Lessee, remove or restore such sub-standard
\nSignage. Any Lessee Signage removed or restored on behalf of Lessee by Lessor,
\nshall be at Lessee153s sole cost and expense, payable immediately upon demand by
\nLessor.<\/p>\n

1H. Lessor reserves the right to require Lessee to have Signage and, if so
\nrequired, Lessee Signage must be completed and installed within 60 days after
\nLessee153s Lease Term commences. Lessor reserves the right to require Lessee to
\nutilize vendors preapproved or designated by Lessor for all Lessee Signage and
\nSignage related matters. In the event Lessor designates, refers or approves a
\nspecific sign vendor, Lessor shall not be responsible or liable in any way for
\nany disputes between such vendor and Lessee.<\/p>\n

1I. All Lessee Signage shall only contain Lessee153s choice of either its legal
\nname or its Trade Name as it appears in the Lease. No Lessee Signage or Lessee
\nSignage content shall create any claim, expressed or implied, of a Transfer as
\ndefined in the Lease.<\/p>\n

1J. Upon expiration or earlier termination of the Lease, or if Lessee
\ninstalls or displays Signage which does not comply with the terms and conditions
\nof this Sign Criteria, Lessor, in addition to any other remedy, reserves the
\nright to require Lessee to remove its Signage, or any part thereof, and to
\nrequire Lessee to repair and restore all areas and surfaces of the Property
\naffected by such removal. Such restoration and repair work shall include, but
\nnot be limited to, removal of any associated electrical wiring, patching of
\ndamaged areas and painting to match surrounding surfaces. Should Lessee, after
\ndemand by Lessor, fail to remove any Signage designated for removal by Lessor or
\nfail to repair and restore any affected areas, Lessor shall have the right to do
\nso at Lessee153s sole cost and expense.<\/p>\n

1K. Subject to the other terms hereof, Lessee will have the right to display
\nLessee153s signage on the sign monument to be located outside the Building, as
\nwell as on the walls of elevator lobbies of the floors of the Premises adjacent
\nto entry doors and on the lobby directory for the Premises. All interior signs
\nshall be provided at the sole cost of Lessor, with any and all costs and
\nexpenses incurred in connection with the monument sign for Lessee to be included
\nas part of the Costs of Lessor153s Work and deducted from the Lessor153s Total Work
\nAllowance. Section 27.12 of the Lease shall govern with respect to the
\nrequirement of Lessor153s approval for Lessee153s signage.<\/p>\n

27<\/p>\n

\n

EXHIBIT “D” <\/strong><\/p>\n

RULES AND REGULATIONS <\/strong><\/p>\n

1.01 The following Rules and Regulations now in effect govern Lessee153s use of
\nthe Premises and any part of the Project or Property used in common by Lessee.
\nLessee will be bound by such Rules and Regulations and agrees to use its
\nreasonable efforts to cause Lessee153s employees, agents, contractors, suppliers,
\ninvitees and licensees to observe the same.<\/p>\n

1.02 Wherever Lessor provides standard window coverings, such coverings shall
\nnot be altered, removed or replaced by Lessee. Wherever Lessor does not provide
\nstandard window coverings, selection and installation of window coverings by
\nLessee shall be subject to Lessor153s prior written approval, such approval not to
\nbe unreasonably withheld, delayed or conditioned. If Lessor objects to any item
\nattached to, or used in connection with or on any window, other glass area, or
\ninterior or exterior wall, Lessee will immediately upon notification remove such
\nobjectionable item or discontinue such use. Further, Lessee agrees not to place
\nanything in close proximity to any window or glass area of the Premises that may
\nappear from the outside of the Premises.<\/p>\n

1.03 Lessee will not use any sidewalks, hallways, entrances, elevators,
\nstairways, exits, lobbies or any other areas used in common by lessees of the
\nProperty other than for normal ingress or egress; Lessee shall not obstruct use
\nof any such area. Lessor will in all cases retain the right to control and
\nprevent access to such areas by all persons whose presence in the reasonable
\njudgment of Lessor would be prejudicial to the safety, character, reputation
\nand\/or interest of the Property and\/or its lessees. Neither Lessee nor its
\nemployees, agents, contractors, suppliers, invitees or licensees shall go on any
\nroof or ladder, in any mechanical rooms, or climb on any exterior structures of
\nany nature on the Property without Lessor153s prior written consent, such consent
\nnot to be unreasonably withheld, delayed or conditioned.<\/p>\n

1.04 Lessor reserves the right, exercisable without notice and without
\nliability to Lessee, to change the name, street and\/or address of any part of
\nthe Property. With the exception of Lessee153s address, Lessee shall not use the
\nname of the Property or any part thereof in connection with promoting or
\nadvertising Lessee153s business. Lessor will have the right to prohibit publicity
\nby Lessee, which in Lessor153s reasonable opinion impairs the reputation or
\nmarketability of the Property or any part thereof.<\/p>\n

1.05 Lessee shall not keep or allow to be used any foul or noxious gas or
\nsubstance in or about the Premises. Nor shall Lessee occupy or use the Premises
\nin any manner that is objectionable or offensive to other lessees or Lessor by
\nreason of odor, noise, vibration or interference in any way. Any equipment or
\ndevice of Lessee which causes noise or vibration that may be transmitted to any
\nstructural portion of the Property or to any part therein to such a degree as to
\nbe objectionable to any lessee or Lessor must be approved in writing by Lessor
\nprior to its installation and be placed and maintained by Lessee, at Lessee153s
\nexpense, on vibration eliminators or other devices sufficient to eliminate such
\nnoise or vibration. Lessee shall keep the Premises free of rodents, insects and
\nother vermin.<\/p>\n

1.06 Lessee will not use or keep in the Premises, or on or about the
\nProperty, any kerosene, gasoline or flammable or combustible fluid or material
\nother than those limited quantities necessary for the operation or maintenance
\nof general office equipment.<\/p>\n

1.07 Lessor reserves the right to exclude or expel from the Property any
\nperson who, in Lessor153s reasonable judgment, is intoxicated or under the
\ninfluence of liquor or drugs or who is in violation of any of the rules and
\nregulations of the Property.<\/p>\n

1.08 Lessee shall not alter or re-key any lock or bolt or install any new or
\nadditional locks or bolts on any doors of the Premises without prior written
\nconsent from Lessor, such consent not to be unreasonably withheld, delayed or
\nconditioned. Upon the termination of its tenancy, Lessee will provide Lessor
\nwith all keys, whether furnished or otherwise procured, and shall be responsible
\nfor the cost of replacing any keys that are lost.<\/p>\n

1.09 The Premises will not be used for lodging or for any improper, immoral
\nor objectionable purpose. No cooking will be done or permitted on the Premises
\n(except in the kitchen area) or elsewhere on the Property without Lessor153s
\nconsent, except that the preparation of coffee, tea, hot chocolate and similar
\nbeverages and employee use of a microwave oven will be permitted, provided that
\nsuch equipment and use is in accordance with all applicable federal, state,
\ncounty and city laws, codes, ordinances and any manufacturer153s guidelines and
\nrecommendations. Tenant will be allowed to barbeque on a deck or on the parking
\narea behind the Premises.<\/p>\n

1.10 Lessee will not solicit business from other lessees of the Property.
\nCanvassing, soliciting, peddling and distribution of handbills or any other
\nwritten material is prohibited, and Lessee will cooperate with Lessor to prevent
\nsuch activities.<\/p>\n

1.11 Lessee agrees to comply with and not to restrict or impair in any way,
\nall safety, fire protection and evacuation procedures and regulations
\nestablished by Lessor or any governmental agency. Lessee shall not do or permit
\nany act or bring anything on the Property or any part thereof which shall
\nobstruct or unreasonably interfere with the rights of other lessees.<\/p>\n

1.12 Except for the ordinary hanging of pictures and wall decorations, Lessee
\nwill not mark, drive nails, screw, cut or drill into the partitions, woodwork,
\nceilings or plaster, or in any way deface, mar, paint or penetrate the Premises
\nor<\/p>\n

28<\/p>\n

\n

any part of the Property, except in accordance with the Lessee Alteration
\nprovisions of the Lease. Additionally, Lessee will not affix any floor covering
\nto the floor of the Premises in any manner except as approved by Lessor.<\/p>\n

1.13 No electrical wiring, outlets or apparatus shall be installed or altered
\nby Lessee, except in accordance with the Lessee Alteration provisions of the
\nLease. Lessor reserves the right to direct where and how telephone and other
\ntelecommunication wires are to be introduced to the Premises. Lessee may not
\nalter or overburden the designed capacity of any existing electrical outlets.\n<\/p>\n

1.14 Lessee shall not place or affix any radio or television antennas,
\nsatellite dishes, loudspeakers or other similar devices, awnings, outside
\nfurniture, etc. on the roof, exterior walls or outside of any building or on any
\nother part of the Property without Lessor153s prior written approval, such
\napproval not to be unreasonably withheld, delayed or conditioned. Additionally
\nLessee will not place any signs, advertising, billboards, lighting, or any other
\ndevices or means of advertising or identification on property adjacent to the
\nProperty that in Lessor153s opinion obstructs, impairs, restricts or in any way,
\nin Lessor153s reasonable opinion, negatively affects the Property or would not be
\npermitted by the terms of this Lease or these Rules and Regulations if such
\naction were taken on the Property.<\/p>\n

1.15 Lessor reserves the right to prescribe the weight, size and position of
\nall equipment, materials, furniture or other property brought on to the
\nProperty. Such Lessor approved items shall be moved in or about the Property
\nunder the direction of Lessor and in a manner and at such times that will not
\ninconvenience any lessee. Lessor reserves the right to prohibit or impose
\nconditions upon the installation of objects which may overload any floor.<\/p>\n

1.16 Subject to the terms of Paragraph 8 of this Lease, all parking
\nfacilities of the Property shall be regulated by Lessor and may be modified or
\namended as Lessor deems necessary. Lessee shall not permit or allow any vehicles
\nthat belong to or that are controlled by Lessee or Lessee153s employees, customers
\nor invitees to be loaded, unloaded or parked in areas other than those
\ndesignated by Lessor for such activities. Users of the parking areas will obey
\nall posted signs and not impede the flow of traffic. For sale signs for vehicles
\nmust be on the vehicle. Washing, waxing, cleaning or servicing of any vehicle is
\nprohibited. No campers, recreational vehicles or trailers are permitted and all
\ndisabled vehicles must be removed within 24 hours. No vehicles shall be brought
\ninto or kept in the Premises. Lessor reserves the right to tow, without cost or
\nliability to Lessor, any vehicle: 1) parked in an unauthorized or illegal
\nparking area or; 2) whose audio theft alarm system remains engaged for an
\nunreasonable period; and 3) belonging to any violator of any of Lessor153s parking
\nrules and regulations. Further, in addition to all of its other rights and
\nremedies, Lessor reserves the right to refuse to permit any person to park
\nwithin the Property who violates any of these or any other rules or regulations
\nwhich Lessor may establish.<\/p>\n

1.17 Lessee shall not do any act that will create any additional costs to
\nmaintain the appearance or cleanliness of any part of the Property. No dirt or
\nother substances shall be disposed of anywhere on the Property, including but
\nnot limited to in any hallways, stairways, elevators or lobbies or on any
\nparking areas, landscaping, walkways or in any other areas used in common with
\nother lessees.<\/p>\n

1.18 Lessee assumes any and all responsibility for protecting its Premises
\nfrom theft, robbery and pilferage, which includes keeping Premises doors locked
\nand all doors into common areas such as doors into entrances, public corridors,
\nlobbies, etc., closed, except for normal ingress and egress.<\/p>\n

1.19 No signage, notices or advertisements may be placed by Lessee anywhere
\noutside of its Premises and all signage must comply with the Sign Criteria
\nexhibit attached to and made a part of this Lease and any other terms and
\nconditions of these Rules and Regulations and the Lease.<\/p>\n

1.20 Lessee shall not use any method of heating or air conditioning other
\nthan as provided by Lessor without Lessor153s prior written consent, such consent
\nnot to be unreasonably withheld, delayed or conditioned.<\/p>\n

1.21 Lessor may prohibit smoking within Lessee153s Premises, the Project, or
\nany part thereof, and may require Lessee and any of its agents, employees,
\nsuppliers, customers, guests and invitees who desire to smoke, to smoke within
\nspecifically designated smoking areas which Lessor may change from time to time.
\nIt will be Lessee153s sole responsibility to ascertain from Lessor the specific
\nsmoking program in effect at the Property at the time of its lease commencement.
\nAny smoking program implemented by Lessor will be strictly enforced.<\/p>\n

1.22 Rest room partitions, mirrors, wash basins and other plumbing fixtures
\nshall not be used for any purpose other than that for which they were
\nconstructed and no sweepings, trash or other substances shall be disposed of
\ntherein. Any damage or injuries caused by Lessee, its employees, agents,
\ncontractors, suppliers, invitees or licensees shall be borne directly by Lessee.\n<\/p>\n

1.23 No heavy items may be transported by elevator if such item or items
\nexceed the load capacity of the elevator. Lessee153s initial move in and
\nsubsequent deliveries of bulky items, such as furniture, equipment, supplies,
\nmerchandise, safes and similar items will be subject to reasonable scheduling
\nand approval of persons moving such items by Lessor. Deliveries during normal
\noffice hours shall be limited to normal office supplies and other small items.
\nLessee shall be responsible for protecting elevator interior and exterior
\nfinishes and flooring whenever items are transported in them on Lessee153s behalf.\n<\/p>\n

1.24 Lessee will not waste electricity, water or air conditioning and agrees
\nto cooperate fully with Lessor in this regard and to comply with any Lessor or
\ngovernmental energy-saving rules, laws and regulations.<\/p>\n

29<\/p>\n

\n

1.25 Lessee understands that air conditioning and heating systems supply cool
\nair and heat to large zones regulated by zonal thermostats. Lessor shall
\ndetermine the locations of, make any modifications to, and have exclusive
\ncontrol over all such thermostats, their settings, the zones and all parts of
\nthe system. Lessee agrees to cooperate with other parties within its zone(s) to
\nmaximize the comfort level of all parties and shall not touch, adjust, tamper
\nwith, or otherwise affect any thermostat or any part of the heating\/cooling
\nsystems. Lessee will direct all problems related to heating\/cooling systems
\ndirectly to Lessor.<\/p>\n

1.26 Subject to the terms of Paragraph 9 of this Lease, Lessor shall be under
\nno obligation to provide heating or air conditioning services to the building
\nduring off-hours (between 6:00 p.m. and 7:00 a.m., Monday through Friday and on
\nnon-business days). Lessee may request additional heating or air conditioning
\nduring off hours and, should Lessor agree to supply such service, Lessee will
\nreimburse Lessor for all costs and expenses incurred, as determined by Lessor in
\nits sole discretion.<\/p>\n

1.27 Lessor and its agents reserve the right to exclude from the building any
\nunknown person, or any person otherwise improperly identified. Lessor shall in
\nno case be liable for any damages for any error with regard to the admission to
\nor exclusion from the building of any person. In the case of invasion, mob,
\nriot, public excitement or any other circumstance which Lessor, in its sole
\ndiscretion, believes will place lessees and\/or the Property in jeopardy, Lessor
\nreserves the right to prevent access to the building during the continuance of
\nsame by such action as Lessor may deem appropriate.<\/p>\n

1.28 Lessee153s designated representative shall notify Lessor promptly of any
\nrequired maintenance items for which Lessor is responsible. Employees of Lessor
\nwill not perform any work or do anything outside of their regular duties unless
\nunder special instruction by Lessor.<\/p>\n

1.29 No Lessee shall employ any person or persons other than the janitor of
\nLessor for the purpose of cleaning its Premises unless otherwise agreed to by
\nLessor in writing. No Lessee shall cause any unnecessary labor by reason of
\nLessee153s carelessness or indifference in the preservation of good order and
\ncleanliness. Lessor shall not be responsible to any lessee for any loss of
\nproperty on the Premises or on or about the Property, however occurring, or for
\nany damage done to any effects of any lessee by the janitor or any other
\nemployee or any other person.<\/p>\n

1.30 Neither Lessee nor any of its employees, agents, contractors, suppliers,
\ninvitees or licensees may use on any portion of the Premises, Project or
\nProperty any hand truck except those equipped with rubber tires and side guards
\nor such other material-handling equipment as Lessor may approve or require.<\/p>\n

1.31 These Rules and Regulations impose obligations upon Lessee which are in
\naddition to the obligations of Lessee set forth in the Lease. Nothing in these
\nRules and Regulations will be construed in any way to diminish or to waive, in
\nwhole or in part, the terms, covenants, agreements and conditions of the Lease.
\nIn the event that provisions of both these Rules and Regulations and also of the
\nLease regulate the same subject matter, Lessee shall comply with all such
\nprovisions; if any such provisions are in direct conflict, the provisions of the
\nLease shall control. Lessor shall enforce these Rules and Regulations in a
\nnondiscriminatory manner as against all tenants of the Building and Project
\nsubject to reasonable variances granted by Lessor.<\/p>\n

1.32 Lessor reserves the right to adopt such additional reasonable and
\nnondiscriminatory Rules and Regulations (whether similar or dissimilar to these
\nRules and Regulations), and\/or such amendments to any Rule or Regulation, as, in
\nits judgment, may from time to time be appropriate and Lessee agrees to abide by
\nall such additional Rules and Regulations and amendments which may be adopted.\n<\/p>\n

1.33 Notwithstanding anything to the contrary contained in the Lease, Lessee
\nshall have the right, on a first come-first served, reservation basis to use the
\ncommon conference rooms located on the Property.<\/p>\n

1.34 Landlord agrees to allow Tenant to place a bike rack outside the
\nPremises.<\/p>\n

30<\/p>\n

\n

FIRST AMENDMENT AND <\/strong><\/p>\n

LESSOR CONSENT TO ASSIGNMENT AND ASSUMPTION <\/strong>\n<\/p>\n

THIS FIRST AMENDMENT and LESSOR CONSENT TO ASSIGNMENT AND
\nASSUMPTION<\/strong> (collectively, this “Agreement<\/strong>” and
\nsometimes referred to herein as the “Amendment<\/strong>“) is made and
\nentered into as of the 13th<\/sup> day of May, 2010, by and between
\nPS BUSINESS PARKS, L.P., a California limited partnership<\/strong>
\n(“Lessor<\/strong>“), DIGIMARC CORPORATION, a Delaware
\nCorporation (“Lessee” or “Assignor”)<\/strong> and DIGIMARC CORPORATION,
\nan Oregon corporation<\/strong> (“Surviving Entity<\/strong>“).<\/p>\n

RECITALS <\/strong><\/p>\n\n\n\n
\n

A.<\/p>\n<\/td>\n

\n

Lessor and Lessee (formerly known as DMRC Corporation, and as successor in
\ninterest to L-1 Secure Credentialing, Inc., a Delaware corporation, formerly
\nknown as Digimarc Corporation) are parties to that certain lease dated March 22,
\n2004 (the “Lease<\/strong>“). Pursuant to the Lease, Lessor has leased to
\nLessee space currently containing approximately 46,083<\/strong>
\nrentable square feet (the “Premises<\/strong>“) located at 9405 SW Gemini
\nDrive, Beaverton, Oregon 97008 (the “Building<\/strong>“), which is a
\npart of the project commonly referred to as Creekside Corporate Park (the
\n“Project<\/strong>“).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

B.<\/p>\n<\/td>\n

\n

Lessee and Surviving Entity have entered into an Agreement and Plan of Merger
\n(the “Merger Agreement<\/strong>“) whereby Lessee has been merged with
\nand into Surviving Entity with Surviving Entity to remain as the surviving
\nentity (the “Merger<\/strong>“). As a consequence of the Merger, all
\nright, title and interest of Lessee under the Lease was transferred to, and
\nassumed by, the Surviving Entity (the “Transfer<\/strong>“).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

C.<\/p>\n<\/td>\n

\n

Lessee and Surviving Entity have requested Lessor153s consent to the Merger and
\nTransfer. Lessor has agreed to give such consent upon the terms and conditions
\ncontained in this Consent.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

D.<\/p>\n<\/td>\n

\n

The Lease by its terms shall expire on August 31, 2011 (“Prior
\nTermination Date<\/strong>“), and the parties desire to extend the Term of the
\nLease, all on the following terms and conditions.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

E.<\/p>\n<\/td>\n

\n

Lessor, Lessee and Surviving Entity mutually desire that the Lease be amended
\non and subject to the following terms and conditions.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

NOW, THEREFORE,<\/strong> in consideration of the mutual covenants and
\nagreements herein contained and other good and valuable consideration, the
\nreceipt and sufficiency of which are hereby acknowledged, Lessor and Lessee
\nagree as follows:<\/p>\n\n\n\n
\n

A.<\/p>\n<\/td>\n

\n

Amendment.<\/u><\/strong> Lessor, Lessee and Surviving Entity agree
\nthat, effective as of the date hereof, the Lease shall be amended in accordance
\nwith the following terms and conditions:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

I. Extension.<\/u><\/strong> The Term of the Lease is hereby
\nextended for a period of 60 months and shall expire on August 31, 2016
\n(“Extended Termination Date<\/strong>“), unless sooner terminated in
\naccordance with the terms of the Lease. That portion of the Term commencing the
\nday immediately following the Prior Termination Date (“Extension
\nDate<\/strong>“) and ending on the Extended Termination Date shall be referred to
\nherein as the “Extended Term<\/strong>“.<\/p>\n

II. Base Rent.<\/u><\/strong> The Base Rent, Additional Rent and all
\nother charges under the Lease shall be payable as provided therein with respect
\nto the Premises through and including December 31, 2010, subject to the Cap (as
\ndefined in Section IV below) on Lessee153s Proportionate Share of Operating
\nExpenses for calendar year 2010). Notwithstanding anything to the contrary
\ncontained in the Lease, effective as of January 1, 2011, the schedule of Base
\nRent payable with respect to the Premises for the balance of the original Term
\nand the Extended Term is the following:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Period<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Annual Rate<\/strong>
\nPer Square Foot<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Annual<\/strong>
\nBase Rent<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

Monthly<\/strong>
\nBase Rent<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

1\/1\/11 : 12\/31\/11<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

16.75<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

771,890.25<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

$<\/p>\n<\/td>\n

\n

64,324.19<\/p>\n<\/td>\n<\/tr>\n

\n

1\/1\/12 : 12\/31\/12<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

17.34<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

799,079.28<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

$<\/p>\n<\/td>\n

\n

66,589.94<\/p>\n<\/td>\n<\/tr>\n

\n

1\/1\/13 : 12\/31\/13<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

17.95<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

827,189.88<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

$<\/p>\n<\/td>\n

\n

68,932.49<\/p>\n<\/td>\n<\/tr>\n

\n

1\/1\/14 : 12\/31\/14<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

18.58<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

856,222.20<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

$<\/p>\n<\/td>\n

\n

71,351.85<\/p>\n<\/td>\n<\/tr>\n

\n

1\/1\/15 : 12\/31\/15<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

19.23<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

886,176.12<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

$<\/p>\n<\/td>\n

\n

73,848.01<\/p>\n<\/td>\n<\/tr>\n

\n

1\/1\/16 : 8\/31\/16<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

19.90<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

917,051.76<\/p>\n<\/td>\n

\n

*<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

76,420.98<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

*<\/p>\n<\/td>\n

\n

Tenant shall only be liable for the Monthly Base Rent due for each month
\nwithin the period of January 1, 2016 : August 31, 2016 and not the entire Annual
\nBase Rent.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

All such Base Rent shall be payable by Lessee in accordance with the terms of
\nthe Lease, as amended hereby.<\/p>\n

III. Additional Security Deposit.<\/u><\/strong> No additional
\nsecurity deposit shall be required in connection with this Amendment.<\/p>\n

\n

IV. Operating Expenses.<\/u><\/strong> For the period commencing on
\nJanuary 1, 2011 and ending on the Extended Termination Date, Lessee shall pay
\nfor Lessee153s Proportionate Share of the increase in Operating Expenses over the
\nBase Year in accordance with the terms of the Lease, as amended hereby,
\nprovided, however, during such period, the Base Year for the computation of
\nLessee153s Proportionate Share of Operating Expenses is amended from 2005 to 2011.
\nNotwithstanding the foregoing or anything to the contrary set forth in Article 4
\nof the Lease, effective January 1, 2011, electricity for the Premises and the
\nBuilding (to the extent that the Premises constitutes 100% of the Building and
\nexcept to the extent attributable to the common areas of the Project and\/or
\nProperty) shall no longer be a part of the definition of Utility and Service
\nCosts (as defined in Section 4.03B of the Lease) and shall no longer be included
\nas a part of Operating Expenses. Instead, electricity costs for the Premises and
\nthe Building (to the extent that the Premises constitutes 100% of the Building
\nand except to the extent attributable to the common areas of the Project and\/or
\nProperty) shall be treated as a separate and distinct category which shall no
\nlonger be subject to the Base Year and instead shall be subject to a Premises
\nElectricity Cost Expense Stop as more fully described in Section V below. Lessor
\nand Lessee acknowledge and agree that, pursuant to Section 4.05B of the Lease,
\nLessee owes Lessor approximately $33,000.00 in connection with Lessee153s
\nunderpayment of actual Operating Expenses for calendar year 2009 (the
\n“2009 Operating Expense Underpayment<\/strong>“). Lessor hereby (i)
\nwaives any claim to the 2009 Operating Expense Underpayment, (ii) agrees that
\nthe existence of the 2009 Operating Expense Underpayment is not, and was not, a
\nDefault, event of default, or other similar occurrence under the Lease, and
\n(iii) agrees that Tenant has fully paid all of its obligations on account of
\nOperating Expenses attributable to calendar year 2009. In addition,
\nnotwithstanding anything herein or in the Lease to the contrary, Lessee153s
\nProportionate Share of Operating Expenses for calendar year 2010 shall not
\nexceed the sum of $54,420.00 (the “Cap<\/strong>“); provided, however,
\nthat the Cap set forth herein shall not be deemed applicable to any additional
\nspace added to the Premises at any time or from time to time, unless expressly
\nso provided in any amendment to the Lease. In consideration of the foregoing,
\nLessee hereby waives any interest in any overpayment of actual Operating
\nExpenses for calendar year 2010, which amounts, if any, shall be for the sole
\nbenefit of Lessor, it being understood that Lessee shall not be entitled to any
\ncredit, abatement or other concession in connection therewith. Lessor agrees to
\nact in a commercially reasonable manner in incurring Operating Expenses, taking
\ninto consideration the class and the quality of the Building and Project and
\nshall extrapolate Operating Expenses in accordance with the methodology used to
\nextrapolate Operating Expenses in comparable buildings owned by Lessor and its
\naffiliates in the geographic area in which the Building and Project is located.
\nLessee agrees to act in a commercially reasonable manner to control those items
\nof Operating Expenses within Lessee153s reasonable control to avoid an
\nunreasonable increase in Operating Expenses incurred during the 2010 and 2011
\ncalendar years.<\/p>\n

V. Premises Electricity Costs.<\/u><\/strong><\/p>\n\n\n\n
<\/td>\n\n

A.<\/p>\n<\/td>\n

\n

Premises Electricity Costs Stop. <\/strong>Effective January 1, 2011,
\nthe Premises Electricity Costs Stop for the balance of the current Term and the
\nExtended Term shall be $115,207.50. Throughout the balance of the current Term
\nand the Extended Term, Lessee shall pay, as Additional Rent, Lessee153s
\nProportionate Share of the total amount, if any, by which Premises Electricity
\nCosts (as defined below) for each calendar year during the balance of the
\ncurrent Term and Extended Term exceed the Premises Electricity Costs Stop (the
\n“Premises Electricity Costs Excess<\/strong>“). If Premises Electricity
\nCosts in any calendar year decrease below the amount of the Premises Electricity
\nCosts Stop, Lessee153s Proportionate Share of Utility and Service Costs shall be
\n$0.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

B.<\/p>\n<\/td>\n

\n

Premises Electricity Costs.<\/strong> Premises Electricity Costs shall
\nonly include the actual cost of electricity provided to the Premises and
\nBuilding. All other costs incurred by Lessor related to electricity, including
\ncosts for the provision of electricity to the common areas, shall continue to be
\nincluded as part of Utility and Service Costs.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

C.<\/p>\n<\/td>\n

\n

Premises Electricity Costs Excess Payments. <\/strong>Lessee153s
\nestimated payments of Premises Electricity Costs Excess shall be made monthly on
\nor before the first day of each calendar month during the balance of the current
\nTerm and the Extended Term, each in the amount of Lessor153s then current estimate
\nas outlined below. Lessee153s Proportionate Share of Premises Electricity Costs
\nExcess will be prorated for partial months. Lessee153s Proportionate Share of
\nPremises Electricity Costs Excess shall be determined and paid as follows:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

(i)<\/p>\n<\/td>\n

\n

Lessee153s Premises Electricity Costs Excess estimates: As soon as is practical
\nfollowing the end of each calendar year, Lessor will provide Lessee with a
\ndetermination of (provided, however, that Lessor shall exercise reasonable
\nefforts to provide such determination within 120 days following the end of each
\ncalendar year): (a) Lessee153s annual share of estimated Premises Electricity
\nCosts Excess for the then current calendar year; (b) Lessee153s monthly Premises
\nElectricity Costs Excess estimate for the then current year; and, (c) Lessee153s
\nretroactive estimate correction billing (for the period of January
\n1st<\/sup> through the date immediately prior to the commencement date of
\nLessee153s new monthly Premises Electricity Costs Excess estimate) for the
\ndifference between Lessee153s new and previously billed monthly Premises
\nElectricity Costs Excess estimates for the then current year.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n
<\/td>\n\n

(ii)<\/p>\n<\/td>\n

\n

Lessee153s Proportionate Share of actual annual Premises Electricity Costs
\nExcess: Each year, Lessor will provide Lessee with a determination reflecting
\nthe total Premises Electricity Costs and Premises Electricity Costs Excess for
\nthe previous calendar year as soon as practical following the end of each
\ncalendar year; provided, however, that Lessor shall exercise reasonable efforts
\nto provide such determination within 120 days following the end of each calendar
\nyear. If Lessee153s estimated Premises Electricity Costs Excess billed for the
\nprevious calendar year is less than Lessee153s Proportionate Share of the actual
\nPremises Electricity Costs Excess for the prior calendar year, Lessee shall pay
\nto Lessor the difference due within thirty (30) days of delivery of Lessor153s
\ninvoice. If Lessee has paid more than its Proportionate Share of Premises
\nElectricity Costs Excess for the preceding calendar year, Lessor will credit the
\noverpayment toward Lessee153s future Premises Electricity Costs obligations or, if
\nafter expiration of the Extended Term, shall refund such excess to Lessee within
\nthirty (30) days following the making of the determination. Monthly Premises
\nElectricity Costs Excess estimates are due on the 1st<\/sup> of each month
\nand shall commence in the month specified by Lessor. Lessee153s retroactive
\nestimate correction, if any, shall be due, in full, within thirty (30) days
\nfollowing delivery of Lessor153s correction and, in the event of any overpayment,
\nLessor will credit the overpayment toward Lessee153s future Premises Electricity
\nCosts obligations.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

D.<\/p>\n<\/td>\n

\n

Audit. <\/strong>Lessee shall have the right to audit Premises
\nElectricity Costs in the same manner as set forth in Section 4.07 of the Lease
\nwith respect to Lessee153s right to audit Operating Expenses. Notwithstanding the
\nforegoing, Tenant shall have the right, which right shall be exercised no more
\nthan twice per calendar year, to request copies of electric bills attributable
\nto the Premises for then current calendar year and Landlord shall deliver such
\ncopies to Tenant promptly following Tenant153s request.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

VI. Improvements to Premises.<\/u><\/strong><\/p>\n\n\n\n
<\/td>\n\n

A.<\/p>\n<\/td>\n

\n

Condition of Premises<\/strong>. Lessee is in possession of the
\nPremises and accepts the same “as is” without any agreements, representations,
\nunderstandings or obligations on the part of Lessor to perform any alterations,
\nrepairs or improvements, except as may be expressly provided otherwise in this
\nAmendment and subject to Lessor153s obligations with respect to repairs under
\nArticle 11 of the Lease.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

B.<\/p>\n<\/td>\n

\n

Responsibility for Improvements to Premises.<\/strong> Lessee may
\nperform improvements to the Premises in accordance with the Work Letter attached
\nhereto as Exhibit A<\/strong> and Lessee shall be entitled to an
\nimprovement allowance in connection with such work as more fully described in
\nExhibit A<\/strong>.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

C.<\/p>\n<\/td>\n

\n

HVAC. <\/strong>Lessor hereby agrees to (a) replace the three (3)
\nexisting 25 ton roof-top HVAC units and control systems serving the Building and
\nvarious portions Premises and (b) retrofit the VAV boxes associated with each
\nspecific HVAC unit over the next three calendar years as follows:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

(i) Lessor to replace the existing roof-top HVAC unit designated by the
\nparties as RTU#1 and the base control system before the end of calendar year
\n2010. Lessor and Lessee will reasonably cooperate with one another to coordinate
\nthe replacement of such unit with the construction of the Lessee Improvements
\n(as defined in Exhibit A<\/strong> attached hereto) except that in no
\nevent shall any delay in Lessee153s construction schedule affect Lessor153s
\nobligation to replace such system before the end of calendar year 2010;<\/p>\n

(ii) Lessor to replace a second existing roof-top HVAC unit and make
\nnecessary additions to the then existing base control system to accommodate the
\nsame before the end of calendar year 2011; and<\/p>\n

(iii) Lessor to replace the third and final existing roof-top HVAC unit and
\nmake necessary additions to the then existing base control system to accommodate
\nthe same before the end of calendar year 2012.<\/p>\n

All of the new HVAC units shall be of tonnage commensurate with and
\nappropriate to those being replaced. All new units shall meet government
\nstandards for refrigerant type and energy efficiency (410 a 13 SEER). The
\ncontrol system shall be direct digital, either BACnet or LON capable, with alarm
\npoints and alerts. Building manager functions shall be included. Lessor shall
\ninstall units which shall maintain the existing redundancy for the existing
\nserver room and Lessor shall plan and install the system for such existing
\nredundancy to be maintained.<\/p>\n

\n

Except to the extent caused by Lessee or any of Lessee153s agents153,
\ncontractors153 or employees153 acts and\/or omissions or as a result of casualty,
\nLessor shall perform such replacements at its sole cost and expense and such
\ncosts shall not be included in Operating Expenses; provided, however, that
\nLessee shall reimburse Lessor for the cost and expense of the unit to be
\ninstalled in calendar year 2012 as described in C(iii) above (the “2012
\nUnit<\/strong>“) by payments of monthly Additional Rent in an amount that would
\nfully amortize the cost and expense of the 2012 Unit over fifteen (15) years.
\nSuch Additional Rent obligation shall continue until such cost and expense is
\nfully amortized or until the expiration of the Extended Term, as it may be
\nextended from time to time, whichever comes first.<\/p>\n

VII. Roof Space for Dish\/Antenna<\/u>. <\/strong><\/p>\n\n\n\n
<\/td>\n\n

A.<\/p>\n<\/td>\n

\n

As of the date of this Amendment, Lessee shall have the right to lease space
\non the roof of the Building, at no additional cost to Lessee, for the purpose of
\ninstalling (subject to the terms and conditions set forth in Article 10 of the
\nLease), operating and maintaining a dish\/antenna not exceeding 36 inches in
\ndiameter (the “Dish\/Antenna<\/strong>“). The location of the space on the
\nroof to be leased by Lessee is referred to herein as the “Roof
\nSpace<\/strong>“. Lessor reserves the right to relocate the Roof Space as
\nreasonably necessary during the Term. Lessor153s designation shall take into
\naccount Lessee153s use of the Dish\/Antenna. Notwithstanding the foregoing,
\nLessee153s right to install the Dish\/Antenna shall be subject to the approval
\nrights of Lessor (which approval rights may include review by Lessor153s architect
\nand\/or engineer) with respect to the plans and specifications of the
\nDish\/Antenna, the manner in which the Dish\/Antenna is attached to the roof of
\nthe Building and the manner in which any cables are run to and from the
\nDish\/Antenna, which approval shall not be unreasonably withheld or delayed. In
\nthe event Lessee replaces the Dish\/Antenna during the Term, the precise
\nspecifications and a general description of any replacement Dish\/Antenna along
\nwith all documents Lessor reasonably requires to review the installation of such
\nreplacement Dish\/Antenna (the “Plans and Specifications<\/strong>“) shall
\nbe submitted to Lessor for Lessor153s written approval no later than 20 days
\nbefore Lessee commences to install such Dish\/Antenna, which approval shall not
\nbe unreasonably withheld or delayed. Lessee shall be solely responsible for
\nobtaining and maintaining all necessary governmental and regulatory approvals
\nand for the cost of installing, operating, maintaining and removing the
\nDish\/Antenna. If Lessor determines that the Dish\/Antenna equipment does not
\ncomply with the approved Plans and Specifications, that the Building has been
\ndamaged during installation of the Dish\/Antenna or that the installation was
\ndefective, Lessor shall notify Lessee of any noncompliance or detected problems
\nand Lessee promptly shall cure the defects. If Lessee fails to promptly cure the
\ndefects, Lessee shall pay to Lessor upon demand the cost, as reasonably
\ndetermined by Lessor, of correcting any defects and repairing any damage to the
\nBuilding caused by such installation. If at any time Lessor, in its sole
\ndiscretion, deems it necessary, Lessee shall provide and install, at Lessee153s
\nsole cost and expense, appropriate aesthetic screening, reasonably satisfactory
\nto Lessor, for the Dish\/Antenna (the “Aesthetic Screening<\/strong>“).\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

B.<\/p>\n<\/td>\n

\n

Lessor agrees that Lessee, upon reasonable prior written notice to Lessor,
\nshall have access to the roof of the Building and the Roof Space solely for the
\npurpose of maintaining, repairing and removing the Dish\/Antenna, the
\nappurtenances and the Aesthetic Screening, if any, all of which shall be
\nperformed by Lessee or Lessee153s authorized representative or contractors, which
\nshall be reasonably approved by Lessor, at Lessee153s sole cost and risk. It is
\nagreed, however, that only authorized engineers, employees or properly
\nauthorized contractors of Lessee, FCC (defined below) inspectors, or persons
\nunder their direct supervision will be permitted to have access to the roof of
\nthe Building and the Roof Space. Lessee further agrees to exercise firm control
\nover the people requiring access to the roof of the Building and the Roof Space
\nin order to keep to a minimum the number of people having access to the roof of
\nthe Building and the Roof Space and the frequency of their visits. It is further
\nunderstood and agreed that the installation, maintenance, operation and removal
\nof the Dish\/Antenna, the appurtenances and the Aesthetic Screening, if any, is
\nnot permitted to damage the Building or the roof thereof, or interfere with the
\nuse of the Building and roof by Lessor. Lessee agrees to be responsible for any
\ndamage caused to the roof or any other part of the Building, which may be caused
\nby Lessee or any Lessee Entity.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

C.<\/p>\n<\/td>\n

\n

Lessee agrees to install and maintain only equipment of types and frequencies
\nwhich will not cause unreasonable interference to Lessor or any other Lessee of
\nthe Building. In the event Lessee153s equipment causes such interference, Lessee
\nwill change the frequency on which it transmits and\/or receives and take any\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n
<\/td>\n\n

other steps necessary to eliminate the interference. If said interference
\ncannot be eliminated within a reasonable period of time, in the judgment of
\nLessor, then Lessee agrees to remove the Dish\/Antenna from the Roof Space.
\nLessee shall, at its sole cost and expense, and at its sole risk, operate and
\nmaintain the Dish\/Antenna in a good and workmanlike manner, and in compliance
\nwith all Building, electric, communication, and safety codes, ordinances,
\nstandards, regulations and requirements, now in effect or hereafter promulgated,
\nof the Federal Government, including, without limitation, the Federal
\nCommunications Commission (the “FCC<\/strong>“), the Federal Aviation
\nAdministration (“FAA<\/strong>“) or any successor agency of either the
\nFCC or FAA having jurisdiction over radio or telecommunications, and of the
\nstate, city and county in which the Building is located. Under this Lease, the
\nLessor and its agents assume no responsibility for the licensing, operation
\nand\/or maintenance of Lessee153s equipment. Lessee has the responsibility of
\ncarrying out the terms of its FCC license in all respects. The Dish\/Antenna
\nshall be connected to Lessor153s power supply in strict compliance with all
\napplicable Building, electrical, fire and safety codes. Neither Lessor nor any
\nLessor Entity shall be liable to Lessee for any stoppages or shortages of
\nelectrical power furnished to the Dish\/Antenna or the Roof Space because of any
\nact, omission or requirement of the public utility serving the Building, or the
\nact or omission of any other Lessee, invitee or licensee or their respective
\nagents, employees or contractors, or for any other cause beyond the reasonable
\ncontrol of Lessor, and Lessee shall not be entitled to any rental abatement for
\nany such stoppage or shortage of electrical power. Neither Lessor nor any Lessor
\nEntity shall have any responsibility or liability for the conduct or safety of
\nany of Lessee153s representatives, repair, maintenance and engineering personnel
\nwhile in or on any part of the Building or the Roof Space.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

D.<\/p>\n<\/td>\n

\n

The Dish\/Antenna, the appurtenances and the Aesthetic Screening, if any,
\nshall remain the personal property of Lessee, and shall be removed by Lessee at
\nits own expense at the expiration or earlier termination of the Lease or
\nLessee153s right to possession under the Lease. Lessee shall repair any damage
\ncaused by such removal, including the patching of any holes to match, as closely
\nas possible, the color surrounding the area where the equipment and
\nappurtenances were attached. Lessee agrees to maintain all of Lessee153s equipment
\nplaced on or about the roof or in any other part of the Building in proper
\noperating condition and maintain same in satisfactory condition as to appearance
\nand safety in Lessor153s sole discretion. Such maintenance and operation shall be
\nperformed in a manner to avoid any interference with any other Lessees or
\nLessor. Lessee agrees that at all times during the Term, it will keep the roof
\nof the Building and the Roof Space free of all trash or waste materials produced
\nby Lessee or Lessee153s agents, employees or contractors.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

E.<\/p>\n<\/td>\n

\n

In light of the specialized nature of the Dish\/Antenna, Lessee shall be
\npermitted to utilize the services of its choice for operation, removal and
\nrepair of the Dish\/Antenna, the appurtenances and the Aesthetic Screening, if
\nany, subject to the reasonable approval of Lessor. Notwithstanding the
\nforegoing, Lessee must provide Lessor with prior written notice of any such
\nremoval or repair and coordinate such work with Lessor in order to avoid voiding
\nor otherwise adversely affecting any warranties granted to Lessor with respect
\nto the roof. If necessary, Lessee, at its sole cost and expense, shall retain
\nany contractor having a then existing warranty in effect on the roof to perform
\nsuch work (to the extent that it involves the roof), or, at Lessee153s option, to
\nperform such work in conjunction with Lessee153s contractor. In the event Lessor
\ncontemplates roof repairs that could affect Lessee153s Dish\/Antenna, or which may
\nresult in an interruption of Lessee153s telecommunication service, Lessor shall
\nformally notify Lessee at least 30 days in advance (except in cases of an
\nemergency) prior to the commencement of such contemplated work in order to allow
\nLessee to make other arrangements for such service.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

F.<\/p>\n<\/td>\n

\n

Lessee shall not allow any provider of telecommunication, video, data or
\nrelated services (collectively, “Communication Services<\/strong>“) to
\nlocate any equipment on the roof of the Building or in the Roof Space for any
\npurpose whatsoever, nor may Lessee use the Roof Space and\/or Dish\/Antenna to
\nprovide Communication Services to an unaffiliated Lessee, occupant or licensee
\nof another building, or to facilitate the provision of Communication Services on
\nbehalf of another Communication Services provider to an unaffiliated Lessee,
\noccupant or licensee of the Building or any other building. Lessee acknowledges
\nthat Lessor may at some time establish a standard license agreement (the
\n“License Agreement<\/strong>“) with respect to the use of roof space by
\nLessees of the Building. Lessee, upon request of Lessor, shall enter into such
\nLicense Agreement with Lessor provided that such agreement does not materially
\nalter the rights of Lessee hereunder with respect to the Roof Space. Lessee
\nspecifically acknowledges and agrees that the terms and conditions of Article 13
\nof the Lease shall apply with full force and effect to the Roof Space and any
\nother portions of the roof accessed or utilized by Lessee, its representatives,
\nagents, employees or contractors.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n
<\/td>\n\n

G.<\/p>\n<\/td>\n

\n

If Lessee defaults under any of the terms and conditions of this Section or
\nthe Lease, and Lessee fails to cure said default within the time allowed by
\nArticle 18 of the Lease, Lessor shall be permitted to exercise all remedies
\nprovided under the terms of the Lease, including removing the Dish\/Antenna, the
\nappurtenances and the Aesthetic Screening, if any, and restoring the Building
\nand the Roof Space to the condition that existed prior to the installation of
\nthe Dish\/Antenna, the appurtenances and the Aesthetic Screening, if any. If
\nLessor removes the Dish\/Antenna, the appurtenances and the Aesthetic Screening,
\nif any, as a result of an uncured default, Lessee shall be liable for all costs
\nand expenses Lessor incurs in removing the Dish\/Antenna, the appurtenances and
\nthe Aesthetic Screening, if any, and repairing any damage to the Building, the
\nroof of the Building and the Roof Space caused by the installation, operation or
\nmaintenance of the Dish\/Antenna, the appurtenances, and the Aesthetic Screening,
\nif any. Lessee153s rights pursuant to this Section are personal to the named
\nLessee under the Lease and are not transferable, except with respect to a
\ntransfer for which Lessor153s consent is not required pursuant to Section 17.01 of
\nthe Lease.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

VIII. Other Pertinent Provisions.<\/u><\/strong> Lessor and Lessee
\nagree that, effective as of the date of this Amendment (unless different
\neffective date(s) is\/are specifically referenced in this Section), the Lease
\nshall be amended in the following additional respects:<\/p>\n\n\n\n
<\/td>\n\n

A.<\/p>\n<\/td>\n

\n

Operating Expenses.<\/strong> Section 4.02 of the Lease is hereby
\namended by adding the following at the end thereof:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Operating Expenses shall exclude the following:<\/p>\n

(i) Any ground lease rental;<\/p>\n

(ii) Costs of capital improvements, replacements or equipment and any
\ndepreciation or amortization expenses thereon, except to the extent (A)
\nreasonably intended to produce a reduction in Operating Expenses, (B) required
\nby any Laws, or for health or safety purposes, (C) for commercially reasonable
\nimprovements to or replacements of any components of the Common Areas, which
\ncosts shall be uniformly applied to all tenants of the Project, or (D) for
\nreimbursement of the 2012 Unit as described in Section VI.C above.<\/p>\n

(iii) Rentals for items (except when needed in connection with normal repairs
\nand maintenance of permanent systems) which if purchased, rather than rented,
\nwould constitute a capital improvement excluded in clause (ii) above;<\/p>\n

(iv) Costs incurred by Lessor for the maintenance of, or the repair of damage
\nto, the Building, Project and\/or Property, to the extent that Lessor is
\nreimbursed by insurance proceeds or directly by Lessees;<\/p>\n

(v) Costs, including permit, license and inspection costs, incurred with
\nrespect to the installation of Lessee or other occupant improvements made for
\nLessees or other occupants in the Building, the Project and\/or the Property or
\nincurred in renovating or otherwise improving, decorating, painting or
\nredecorating vacant space for or the premises of other Lessees or other
\noccupants of the Building;<\/p>\n

(vi) Marketing costs, including leasing commissions, attorneys153 fees in
\nconnection with the negotiation and preparation or enforcement of letters, deal
\nmemos, letters of intent, leases, subleases and\/or assignments, space planning
\ncosts, and other costs and expenses incurred in connection with lease, sublease
\nand\/or assignment negotiations and transactions with present or prospective
\nLessees or other occupants of the Building, Project or the Property;<\/p>\n

(vii) Costs incurred by Lessor due to the violation by Lessor of the terms
\nand conditions of any lease of space in the Building or the Project;<\/p>\n

(viii) interest, principal, points and fees on debt or amortization payments
\non any mortgage or deed of trust or any other debt instrument encumbering the
\nBuilding, Project or Property or the land on which the Building or Project is
\nsituated;<\/p>\n

(ix) Except for making repairs or keeping permanent systems in operation
\nwhile repairs are being made, rentals and other related expenses incurred in
\nleasing air conditioning systems, elevators or other equipment ordinarily
\nconsidered to be of a capital nature;<\/p>\n

\n

(x) Advertising and promotional expenditures (except for retail property
\npromotions);<\/p>\n

(xi) Costs incurred in connection with upgrading the Building, Project or
\nProperty to comply with disability, life, fire and safety codes in effect prior
\nto the issuance of the temporary certificate of occupancy for the Building;<\/p>\n

(xii) Interest, fines or penalties incurred as a result of Lessor153s failure
\nto make payments when due unless such failure is commercially reasonable under
\nthe circumstances;<\/p>\n

(xiii) Costs arising from Lessor153s charitable or political contributions;\n<\/p>\n

(xiv) The depreciation of the Building and other real property structures on
\nthe Property;<\/p>\n

(xv) Lessor153s general corporate overhead and general administrative expenses
\nnot related to the operation of the Building or the Project;<\/p>\n

(xvi) Any bad debt loss, rent loss or reserves for bad debts or rent loss, or
\nreserves for equipment or capital replacement.”<\/p>\n\n\n\n
<\/td>\n\n

B.<\/p>\n<\/td>\n

\n

Lessee Alterations. <\/strong>Notwithstanding anything to the contrary
\ncontained in Sections 10.05 and\/or 10.6 of the Lease, Lessee shall not be
\nrequired to remove any Lessee Alterations made by Lessee which have been
\nconsented to by Lessor pursuant to Section 10.02 of the Lease or any wiring and
\ncabling installed at the Premises by Lessee; provided, however, that Lessor
\nreserves the right to elect, upon ninety (90) days prior written notice to
\nLessee, to require Lessee to remove any low voltage wiring installed by Lessee
\nat the Premises on or before the termination of the Lease pursuant to Section
\n10.06 of the Lease.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

C.<\/p>\n<\/td>\n

\n

Holdover.<\/strong> The percentage set forth in third sentence of
\nSection 23 of the Lease is hereby amended from two hundred percent (200%) to
\n“one hundred fifty percent (150%)”.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

D.<\/p>\n<\/td>\n

\n

Estoppel Certificate.<\/strong> The references to ten (10) days in the
\nfirst and third sentences of Section 21 of the Lease are hereby each deleted in
\ntheir entirety and replaced with “fifteen (15) days”.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

E.<\/p>\n<\/td>\n

\n

Subordination.<\/strong> The fourth sentence of Section 25 of the
\nLease is hereby deleted in its entirety and replaced with the following:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Lessee acknowledges that although this Paragraph is self-executing, Lessee
\ncovenants and agrees to execute and deliver, within fifteen (15) days of demand
\nby Lessor and in the form reasonably requested by Lessor, or any other mortgagee
\nor ground lessor, any additional documents evidencing the priority or
\nsubordination of this Lease with respect to any such ground leases or underlying
\nlease or the lien of any such mortgage or deed of trust, provided Lessee153s
\ninterests hereunder shall not be disturbed so long as Lessee is not in default
\nhereunder.”<\/p>\n\n\n\n
<\/td>\n\n

F.<\/p>\n<\/td>\n

\n

Lessor153s Work. <\/strong>The parties hereby acknowledge and agree that
\nLessor has fully performed all of its obligations pursuant to Exhibit B (Work
\nLetter) of the Lease.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

B.<\/p>\n<\/td>\n

\n

Consent to Merger and Assignment and Assumption.<\/u><\/strong>
\nLessor hereby consents to the Merger and Assignment, subject to the following
\nterms and conditions, all of which are hereby acknowledged and agreed to by
\nAssignor and Surviving entity.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

I.<\/p>\n<\/td>\n

\n

Assignment and Assumption<\/u><\/strong>.<\/strong> Lessee
\nand Surviving Entity hereby represent and warrant that (a) the Merger Agreement
\nand\/or Merger fully assigned or otherwise transfered, by operation of law or
\notherwise, all of Lessee153s right, title and interest in the Lease to the
\nSurviving Entity (the “Transfer<\/strong>“); and (b) following the
\nMerger, the Surviving Entity has assumed and shall be bound by, whether by
\noperation of law or otherwise, all of the covenants, agreements, provisions,
\nconditions and obligations of the lessee under the Lease, including but not
\nlimited to, the obligation to pay Lessor for all adjustments of rent and other
\nadditional charges payable pursuant to the terms of the Lease. Nothing contained
\nin the Merger Agreement shall be deemed to amend, modify or alter in any way the
\nterms, covenants and conditions set forth in the Lease.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n
<\/td>\n\n

II.<\/p>\n<\/td>\n

\n

Representations.<\/u><\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

A.<\/p>\n<\/td>\n

\n

Assignor hereby represents and warrants that Assignor: (i) had full power and
\nauthority to assign to Surviving Entity its entire right, title and interest in
\nthe Lease and with respect to the entire Security Deposit, if any; (ii) had not
\npreviously transferred or conveyed its interest in the Lease to any person or
\nentity, collaterally or otherwise; (iii) had full power and authority to enter
\ninto the Merger Agreement and complete the Merger and has full power and
\nauthority to enter into this Consent; (iv) in connection with the Merger, has
\nassigned all of Assignor153s rights, title, interest and obligations under the
\nLease, whether by operation of law or otherwise, to the Surviving Entity; and
\n(iv) has full power and authority to enter into this Agreement.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

B.<\/p>\n<\/td>\n

\n

The Surviving Entity hereby represents and warrants that the Surviving
\nEntity: (i) had full power and authority to assume all of Assignor153s right,
\ntitle and interest in, to and under the Lease, including the entire Security
\nDeposit, if any; and (ii) had full power and authority to enter into the Merger
\nAgreement, the Merger and this Consent.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

C.<\/p>\n<\/td>\n

\n

Lessee and the Surviving Entity represent and warrant that following the
\nMerger, (i) all or substantially all of the assets of Lessee will be owned by
\nthe Surviving Entity, (ii) the Surviving Entity will have a net worth that is
\nequal to or greater than the net worth of Lessee as of the date of this
\nAgreement; and (iii) the business in the Premises will continue to be operated
\nfor the use and in the manner provided in the Lease.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

III.<\/p>\n<\/td>\n

\n

No Greater Rights<\/u><\/strong>.<\/strong> In no event shall
\nthe Merger Agreement or the other provisions of this Agreement be construed as
\ngranting or conferring upon the Lessee or the Surviving Entity any greater
\nrights than those contained in the Lease nor shall there be any diminution of
\nthe rights and privileges of the Lessor under the Lease, nor shall the Lease be
\ndeemed modified in any respect.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

IV.<\/p>\n<\/td>\n

\n

Deliveries<\/u><\/strong>. Prior to Lessor153s execution of this
\nAgreement and as a condition precedent to the effectiveness of this Agreement,
\nSurviving Entity shall: (a) deliver to Lessor written notice that the Merger and
\nTransfer have been finalized, and to the extent feasible, a fully executed copy
\nof the Merger Agreement; and (B) upon request of Lessor, its successors or
\nassigns, provide Lessor with financial statements evidencing the net worth of
\nSurviving Entity and evidence of the name change of Assignor and of the good
\nstanding of Surviving Entity.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

V.<\/p>\n<\/td>\n

\n

Lessor153s Consent<\/u><\/strong>.<\/strong> In reliance upon
\nthe agreements and representations contained in this Consent, Lessor hereby
\nconsents to the Merger and the Transfer. This Consent shall not constitute a
\nwaiver of the obligation of the lessee under the Lease to obtain the Lessor153s
\nconsent to any subsequent assignment, sublease or other transfer under the
\nLease, nor shall it constitute a waiver of any existing defaults under the
\nLease.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

VI.<\/p>\n<\/td>\n

\n

Notice Address<\/u><\/strong>.<\/strong> Any notices to
\nSurviving Entity shall be effective when served to the Surviving Entity at the
\nPremises in accordance with the terms of the Lease.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

VII.<\/p>\n<\/td>\n

\n

No Waiver<\/u><\/strong>.<\/strong> Lessor153s consent to the
\nMerger and Assignment shall not be construed as a waiver by Lessee of its rights
\nunder Article 17 of the Lease to future assignments of the lease or subleases of
\nthe Premises without Lessor153s consent in certain instances, as more particularly
\ndescribed therein. Lessor hereby acknowledges and agrees that all rights under
\nthe Lease which are “personal” to the named Lessee or non-transferable,
\nincluding without limitation the rights set forth in Section A.VII of this
\nAmendment, have been transferred to Surviving Entity and are henceforward deemed
\nto be personal to Surviving Entity.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

C.<\/p>\n<\/td>\n

\n

Miscellaneous.<\/u><\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

I.<\/p>\n<\/td>\n

\n

This Amendment sets forth the entire agreement between the parties with
\nrespect to the matters set forth herein. There have been no additional oral or
\nwritten representations or agreements. Under no circumstances shall Lessee be
\nentitled to any rent abatement, improvement allowance, leasehold improvements,
\nor other work to the Premises, or any similar economic incentives that may have
\nbeen provided Lessee in connection with entering into the Lease, unless
\nspecifically set forth in this Amendment.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

II.<\/p>\n<\/td>\n

\n

Except as herein modified or amended, the provisions, conditions and terms of
\nthe Lease shall remain unchanged and in full force and effect.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

III.<\/p>\n<\/td>\n

\n

In the case of any inconsistency between the provisions of the Lease and this
\nAmendment, the provisions of this Amendment shall govern and control.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

IV.<\/p>\n<\/td>\n

\n

Submission of this Amendment by Lessor is not an offer to enter into this
\nAmendment but rather is a solicitation for such an offer by Lessee. Lessor shall
\nnot be bound by this Amendment until Lessor has executed and delivered the same
\nto Lessee.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n
<\/td>\n\n

V.<\/p>\n<\/td>\n

\n

The capitalized terms used in this Amendment shall have the same definitions
\nas set forth in the Lease to the extent that such capitalized terms are defined
\ntherein and not redefined in this Amendment.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

VI.<\/p>\n<\/td>\n

\n

Lessee hereby represents to Lessor that Lessee has dealt with no broker in
\nconnection with this Amendment, other than CresaPartners. Lessee agrees to
\nindemnify and hold Lessor, its members, principals, beneficiaries, partners,
\nofficers, directors, employees, mortgagee(s) and agents, and the respective
\nprincipals and members of any such agents (collectively, the “Lessor
\nRelated Parties<\/strong>“) harmless from all claims of any brokers claiming to
\nhave represented Lessee in connection with this Amendment. Lessor hereby
\nrepresents to Lessee that Lessor has dealt with no broker in connection with
\nthis Amendment. Lessor agrees to indemnify and hold Lessee, its members,
\nprincipals, beneficiaries, partners, officers, directors, employees, and agents,
\nand the respective principals and members of any such agents (collectively, the
\n“Lessee Related Parties<\/strong>“) harmless from all claims of any
\nbrokers claiming to have represented Lessor in connection with this Amendment.
\nLessor agrees to pay a brokerage commission to CresaPartners in accordance with
\nthe terms of a separate written commission agreement to be entered into between
\nLessor and CresaPartners.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

VII.<\/p>\n<\/td>\n

\n

Each signatory of this Amendment represents hereby that he or she has the
\nauthority to execute and deliver the same on behalf of the party hereto for
\nwhich such signatory is acting. Lessee hereby represents and warrants that
\nneither Lessee, nor any persons or entities holding any legal or beneficial
\ninterest whatsoever in Lessee, are (i) the target of any sanctions program that
\nis established by Executive Order of the President or published by the Office of
\nForeign Assets Control, U.S. Department of the Treasury
\n(“OFAC<\/strong>“); (ii) designated by the President or OFAC pursuant to
\nthe Trading with the Enemy Act, 50 U.S.C. App. \u00a7 5, the International Emergency
\nEconomic Powers Act, 50 U.S.C. \u00a7 \u00a7 1701-06, the Patriot Act, Public Law 107-56,
\nExecutive Order 13224 (September 23, 2001) or any Executive Order of the
\nPresident issued pursuant to such statutes; or (iii) named on the following list
\nthat is published by OFAC: “List of Specially Designated Nationals and Blocked
\nPersons.” If the foregoing representation is untrue at any time during the Term,
\na Default under the Lease will be deemed to have occurred, without the necessity
\nof notice to Lessee.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

VIII.<\/p>\n<\/td>\n

\n

Redress for any claim against Lessor under the Lease and this Amendment shall
\nbe limited to and enforceable only against and to the extent of Lessor153s
\ninterest in the Building. The obligations of Lessor under the Lease are not
\nintended to and shall not be personally binding on, nor shall any resort be had
\nto the private properties of, any of its trustees or board of directors and
\nofficers, as the case may be, its investment manager, the general partners
\nthereof, or any beneficiaries, stockholders, employees, or agents of Lessor or
\nthe investment manager.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

[SIGNATURE PAGE FOLLOWS] <\/strong><\/p>\n

\n

IN WITNESS WHEREOF<\/strong>, Lessor and Lessee have duly executed
\nthis Amendment as of the day and year first above written.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

LESSOR:<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/tr>\n
\n

PS BUSINESS PARKS, L.P.,<\/strong><\/p>\n

a California limited partnership<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

PS BUSINESS PARKS, INC.,<\/p>\n

a California corporation<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

Name: Coby A. Holley<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Title: Vice President<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

LESSEE:<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/tr>\n
\n

DIGIMARC CORPORATION,<\/strong><\/p>\n

a Delaware corporation<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
\n

Name:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
\n

Title:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SURVIVING ENTITY:<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/tr>\n
\n

DIGIMARC CORPORATION,<\/strong><\/p>\n

an Oregon corporation<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
\n

Name:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
\n

Title:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

EXHIBIT A <\/strong><\/p>\n

LESSEE IMPROVEMENT AGREEMENT <\/u><\/strong><\/p>\n

This Exhibit is attached to and made a part of the Amendment by and between
\nPS BUSINESS PARKS, L.P., a California limited partnership
\n<\/strong>(“Lessor<\/strong>“) and DIGIMARC CORPORATION, an Oregon
\ncorporation <\/strong>(“Lessee<\/strong>“) for space in the Building
\nlocated at 9405 SW Gemini Drive, Beaverton, Oregon 97008. Capitalized terms not
\notherwise defined in this Exhibit A<\/strong> shall have the meaning
\ngiven to such terms in the Lease of which this Exhibit A<\/strong> is a
\npart.<\/p>\n

1. Lessee, following the full and final execution and delivery of the
\nAmendment to which this Exhibit A<\/strong> is attached, shall have the
\nright to perform alterations and improvements in the Premises, including, but
\nnot limited to, modifications, alterations and improvements to the server rooms
\n(the “Server Rooms Modifications<\/strong>“) which are located in the
\nPremises (the “Lessee Improvements<\/strong>“). Notwithstanding the
\nforegoing, Lessee and its contractors shall not have the right to perform the
\nLessee Improvements in the Premises unless and until Lessee has complied with
\nall of the terms and conditions of Article 10 of the Lease (except for the
\nrequirement of obtaining advance lien waivers, which requirement shall be
\nsuperseded by the terms of Section 2 below), including, without limitation,
\napproval by Lessor of the final plans for the Lessee Improvements and the
\ncontractors to be retained by Lessee to perform such Lessee Improvements. Lessee
\nshall be responsible for all elements of the design of Lessee153s plans
\n(including, without limitation, compliance with law, functionality of design,
\nthe structural integrity of the design, the configuration of the Premises and
\nthe placement of Lessee153s furniture, appliances and equipment), and Lessor153s
\napproval of Lessee153s plans shall in no event relieve Lessee of the
\nresponsibility for such design. Lessor153s approval of the contractors to perform
\nthe Lessee Improvements shall not be unreasonably withheld. The parties agree
\nthat Lessor153s approval of the general contractor to perform the Lessee
\nImprovements shall not be considered to be unreasonably withheld if any such
\ngeneral contractor (a) does not have trade references reasonably acceptable to
\nLessor, (b) does not maintain insurance as required pursuant to the terms of the
\nLease, (c) does not have the ability to be bonded for the work in an amount of
\nno less than 150% of the total estimated cost of the Lessee Improvements, (d)
\ndoes not provide current financial statements reasonably acceptable to Lessor,
\nor (e) is not licensed as a contractor in the state\/municipality in which the
\nPremises is located. Lessee acknowledges the foregoing is not intended to be an
\nexclusive list of the reasons why Lessor may reasonably withhold its consent to
\na general contractor.<\/p>\n

2. Provided Lessee is not in default under the terms of the Lease, Lessor
\nagrees to contribute the sum of $368,664.00 (the “Lessee Improvement
\nAllowance<\/strong>“) toward the cost of performing the Lessee Improvements in
\npreparation of Lessee153s occupancy of the Premises. The Lessee Improvement
\nAllowance may only be used for the cost of permitting, preparing design and
\nconstruction documents and mechanical and electrical plans for the Lessee
\nImprovements and for hard costs in connection with the Lessee Improvements. The
\nLessee Improvement Allowance, less a 10% retainage (which retainage shall be
\npayable as part of the final Lessee Improvements, in periodic disbursements
\nwithin 30 days after receipt of the following documentation: (a) an application
\nfor payment and sworn statement of the contractor substantially in the form of
\nAIA Document G-702 covering all work for which disbursement is to be made to a
\ndate specified therein; (b) a certification from an AIA architect substantially
\nin the form of the Architect153s Certificate for Payment which is located on AIA
\nDocument G702, Application and Certificate of Payment; (c) contractor153s,
\nsubcontractor153s and material supplier153s conditional waivers of liens which shall
\ncover all Lessee Improvements for which disbursement is being requested and all
\nother statements and forms required for compliance with the mechanics153 lien laws
\nof the state in which the Premises is located, together with all such invoices,
\ncontracts, or other supporting data as Lessee or Lessee153s Mortgagee may
\nreasonably require; (e) a cost breakdown for each trade or subcontractor
\nperforming the Lessee Improvements; (d) plans and specifications for the Lessee
\nImprovements, together with a certificate from an AIA architect that such plans
\nand specifications comply in all material respects with all laws affecting the
\nBuilding, Property and Premises; (f) copies of all construction contracts for
\nthe Lessee Improvements, together with copies of all change orders, if any; and
\n(g) a request to disburse from Lessee containing an approval by Lessee of the
\nwork done and a good faith estimate of the cost to complete the Lessee
\nImprovements. Upon completion of the Lessee Improvements, and prior to final
\ndisbursement of the Lessee Improvement Allowance, Lessee shall furnish Lessor
\nwith: (i) general contractor and architect153s completion affidavits; (ii) full
\nand final waivers of lien; (iii) receipted bills covering all labor and
\nmaterials expended and used; (iv) as-built plans of the Lessee Improvements; and
\n(v) the certification of Lessee and its architect that the Lessee Improvements
\nhave been installed in a good and workmanlike manner in accordance with the
\napproved plans, and in accordance with applicable Laws. In no event shall Lessor
\nbe required to disburse the Lessee Improvement Allowance more than one time per
\nmonth. If the Lessee Improvements exceed the Lessee Improvement Allowance,
\nLessee shall be entitled to the Lessee Improvement Allowance in accordance with
\nthe terms hereof, but each individual disbursement of the Lessee Improvement
\nAllowance shall be disbursed in the proportion that the Lessee Improvement
\nAllowance bears to the total cost for the Lessee Improvements, less the 10%
\nretainage referenced above. Notwithstanding anything herein to the contrary,
\nLessor shall not be obligated to disburse any portion of the Lessee Improvement
\nAllowance during the continuance of an uncured default under the Lease, and
\nLessee153s obligation to disburse shall only resume when and if such default is
\ncured.<\/p>\n

\n

3. In no event shall the Lessee Improvement Allowance be used for the
\npurchase of equipment, furniture or other items of personal property of Lessee.
\nNotwithstanding the foregoing, Lessee shall be entitled to apply the Lessee
\nImprovement Allowance to the cost of purchasing and installing equipment which
\nis necessary and related to the Server Rooms Modifications, which equipment
\nshall be located at all times in the Premises and be for the use of Tenant. If
\nLessee does not submit a request for payment of the entire Lessee Improvement
\nAllowance to Lessor in accordance with the provisions contained in this Exhibit
\nA by November 30, 2011, any unused amount shall accrue to the sole benefit of
\nLessor, it being understood that Lessee shall not be entitled to any credit,
\nabatement or other concession in connection therewith. Notwithstanding the
\nforegoing, Lessee shall not submit a request for payment of any portion of the
\nLessee Improvement Allowance prior to January 1, 2011. Lessee shall be
\nresponsible for all applicable state sales or use taxes, if any, payable in
\nconnection with the Lessee Improvements and\/or Lessee Improvement Allowance.
\nLessor shall be entitled to deduct from the Lessee Improvement Allowance a
\nconstruction management fee for Lessor153s oversight of the Lessee Improvements in
\nthe amount of $5,000.00 and such construction management fee shall be in lieu of
\nthe fee required under Section 10.03 of the Lease.<\/p>\n

4. Without limiting the “as-is” provisions of the Lease and this Amendment,
\nLessee accepts the Premises in its “as-is” condition and acknowledges that
\nLessor has no obligation to make any changes or improvements to the Premises or,
\nexcept as provided above with respect to the Lessee Improvement Allowance and as
\nprovided in Section A.VI of the Amendment with respect to the HVAC, to pay any
\ncosts expended or to be expended in connection with any such changes or
\nimprovements in the Premises.<\/p>\n

5. This Exhibit A<\/strong> shall not be deemed applicable to any
\nadditional space added to the Premises at any time or from time to time, whether
\nby any options under the Lease or otherwise, or to any portion of the original
\nPremises or any additions to the Premises in the event of a renewal or extension
\nof the original Term of the Lease, whether by any options under the Lease or
\notherwise, unless expressly so provided in the Lease or any amendment or
\nsupplement to the Lease. Lessee shall not perform any work in the Premises
\n(including, without limitation, cabling, wiring, fixturization, painting,
\ncarpeting, replacements or repairs) except in accordance with Article 10 of the
\nLease.<\/p>\n

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