California MCLE - WA-Seattle-821 Second Avenue Lease - Walton Exchange Investors II LLC and aQuantive Inc.


Basic Lease Terms		1

	REFERENCE DATE OF LEASE	1
	TENANT	1
	LANDLORD	1
	TENANT’S USE OF PREMISES	1
	BUILDING	1
	PREMISES	1
	PREMISES AREA	1
	PROPERTY AREA	1
	TENANTS PRO RATA SHARE	2
	TERM OF LEASE	2
	COMMENCEMENT DATE	2
	BASE RENT	2
	PREPAID RENT	2
	TOTAL SECURITY DEPOSIT	2
	BROKER(S):	2
	Landlord	2
	Tenant	2
	GUARANTOR(S)	2

Definitions		2
	Business Hours	2
	Common Areas	2
	Default Rate	2
	Holder	2
	Holidays	2
	Landlord” and “Tenant	2
	Law	2
	Mortgage	3
	Person	3
	Prime Rate	3
	Property	3
	Systems and Equipment	3
	Term	3

Premises.		3

Term		3

Base Rent		4

Additional Rent		4

	Taxes	4
	Operating Expenses	5
	Tenant’s Pro rata Share	6
	Manner of Payment	6
	Proration	7
	Base Year Adjustments	7
	Review of Landlord’s Statements	7
	Rent and Other Charges	8
	Late Charge; Interest	8

Condition of Premises		8

Use and Rules		8

Services and Utilities		9

	Elevator Service	9
	HVAC.	9
	Electric Service	9
	Water.	9
	Janitorial	9
	Interruption of Services	9
	Monitoring Excess Use	10


OFFICE LEASE		PAGE i



Alterations and Liens		10

	Alterations	10

	Liens	10

Repairs		11

Casualty Damage		11

Insurance, Subrogation, and Waiver of Claims		12

	Tenant Insurance	12

	Landlord Insurance	12

Release and Waiver of Subrogation		12

Condemnation		12

Return of Possession		13

Holding Over		13

No Waiver		13

Attorneys’ Fees		14

Personal Property Taxes, Rent Taxes and Other Taxes		14

Subordination, Attornment, Estoppel and Holder Protection		14

	Subordination	14
	Estoppel Certificate	14
	Holder’s Rights	14
	Attornment	15
	Third Party Beneficiary	15

Assignment and Subletting		15

	Transfers	15
	Transfer Premium	16
	Recapture	16
	Terms of Consent	16
	Certain Transfers	17

Rights Reserved By Landlord		17

	Change Name of Property	17
	Enter Premises	17
	Access Limitations	17
	Alterations	17
	Intentionally Omitted	17

Tenant’s Default		17

	Landlord’s Remedies	18
	Terminate Lease	18
	Continue the Lease	18
	Reletting for Tenant’s Account	18
	Other Remedies	19
	Remedies Cumulative-Waiver	19
	Acceptance of Payment	19
	Other Matters	19

Landlord’s Right to Cure		19

Conveyance by Landlord and Liability		20

Indemnification		20

	Tenant Indemnification	20
	Landlord Indemnification	20
	Concurrent Negligence	20
	Worker’s Compensation	21
	Survival.	21
	Exculpation	21
	Limitation and Damages	21


OFFICE LEASE		PAGE ii


Safety and Security Devices, Services and Programs		21

Communications and Computer Lines		21

	Tenant’s Lines	21
	Landlord’s Lines	22

Hazardous Materials		22

	Notification by Tenant	22
	Release of Hazardous Materials	23
	Existence of Hazardous Substances	23

Notices		23

Real Estate Brokers		23

Security Deposit		24

Entire Agreement		24

Miscellaneous		24

	Amendments.	24
	Successors	24
	Force Majeure	24
	Survival of Obligations	25
	Light and Air.	25
	Governing Law	25
	Severability	25
	Captions	25
	Voluntary Programs	25
	Interpretation	25
	Number and Gender	25
	Time is of the Essence	25
	Choice of Laws	25
	Recording	25
	Air and View Rights	25
	Signs	25
	Parking	26

EXHIBIT A-1		29

Exhibit A-2		30

EXHIBIT B		32

EXHIBIT B-1		35

EXHIBIT C		40

EXHIBIT D		44


OFFICE LEASE		PAGE iii

OFFICE LEASE

THIS LEASE is made between WALTON EXCHANGE INVESTORS II, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY (“Landlord”) and AQUANTIVE, INC., a Washington corporation (“Tenant”).


1.	Basic Lease Terms.

	a)	REFERENCE DATE OF LEASE:	June , 2004

	b)	TENANT:	aQuantive, Inc., a Washington Corporation

		Address For Notices Before

		Commencement Date:	aQuantive

			506 Second Avenue, 9th Floor
			Seattle, WA 98104
			Attn: Chief Financial Officer

		Copy to:	aQuantive

			506 Second Avenue, 9th Floor
			Seattle WA 98104
			Attn: General Counsel

		Address for Notices After

		Commencement Date:	aQuantive

			821 Second Avenue, Suite 1800
			Seattle, WA 98104
			Attn: Chief Financial Officer

		Copy to:	aQuantive

			821 Second Avenue, Suite 1800
			Seattle, WA 98104
			Attn: General Counsel

	c)	LANDLORD:	Walton Exchange Investors II, L.L.C.

		Address for Notices:	c/o Trammell Crow Company

			Exchange Building
			821 Second Avenue
			Seattle, WA 98104
			Attn.: Building Manager

		Copy to:	WALTON EXCHANGE INVESTORS II, L.L.C.

			c/o Walton Street Capital, L.L.C.
			900 N. Michigan Avenue, 19th Floor
			Chicago, IL 60611
			Attn.: Luke Massar

		Rent to: c/o WALTON EXCHANGE INVESTORS II, L.L.C.

			PNC Lockbox 310010717
			465 N. Halstead Suite 160
			PO Box 31001-0717
			Pasadena, CA 91110-0717

	d)	TENANT’S USE OF PREMISES:	General Office Use.

	e)	BUILDING:	Exchange Building
			821 Second Avenue
			Seattle, WA 98104
			as legally described on Exhibit A-1, subject to the provisions herein contained.

	f)	PREMISES: The Premises shall be defined as that certain space on the 16^th, 17^th and 18th floors of the Building, known as Suite 1800 (“Premises”), as depicted on Exhibit A-2.

	g)	PREMISES AREA: The parties agree that the Rentable Area of the Premises is 45,351 square feet.

	h)	PROPERTY AREA: The parties agree that the Rentable Area of the Building is 295,515 square feet.


OFFICE LEASE		PAGE 1


i)	TENANTS PRO RATA SHARE: 15.35%

j)	TERM OF LEASE: The term of this Lease shall be for ninety-six (96) months.

k)	COMMENCEMENT DATE: The commencement date shall be October 1, 2004 (“Commencement Date”).

1)	BASE RENT:

	10/1/04 - 9/30/05:	$0.00 per month.
	10/1/05 - 9/30/06:	$79,364.25 per month.
	10/1/06 - 9/30/07:	$83,143.50 per month.
	10/1/07 - 9/30/08:	$86,922.75 per month.
	10/1/08 - 9/30/09:	$90,702.00 per month.
	10/1/09 - 9/30/10:	$94,481.25 per month.
	10/1/10 - 9/30/12:	$98,260.50 per month.

m)	PREPAID RENT: None

n)	TOTAL SECURITY DEPOSIT: $200,000 See Section 33 below

o)	BROKER(S):

	i) Landlord: Lisa Stewart, Urbis Partners, L.L.C.

	ii) Tenant: Ed Curtis and Clay Nielsen, Washington Partners, Inc.

p)	GUARANTOR(S): None

Section 1 represents a summary of the basic terms of this Lease. In the event of any inconsistency between the terms contained in Section 1 and any specific clause of this Lease, the terms of the more specific clause shall prevail.

2.	Definitions. Unless otherwise defined herein, the following terms shall have the following meanings.

“Business Hours” shall mean Monday through Friday, 8:00 a.m. to 6:00 p.m., and 8:00 a.m. to 12:00 p.m. on Saturdays (excluding Holidays), or as may be amended in writing by Landlord from time to time during the Term of this Lease, but Business Hours shall not in any event begin later than 8:00 a.m. or end earlier than 6:00 p.m. on any weekday (excluding holidays), or begin later than 8:00 a.m. or end earlier than 12:00 noon on any Saturday (excluding holidays).

Common Areas” shall mean the Building’s common entrances, lobbies, restrooms, elevators, stairways and access-ways, loading docks, ramps, drives and platforms and any passageways and service-ways thereto, and the common pipes, conduits, wires and appurtenant equipment serving the Premises: and loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways and landscaped areas and similar areas and facilities appurtenant to the Building.

“Default Rate” shall mean fifteen percent (15%), or the highest rate permitted by applicable Law, whichever shall be less.

“Holder” shall mean the holder of any Mortgage at the time in question, and where such Mortgage is a ground lease, such term shall refer to the ground lessor.

“Holidays” shall mean all federally observed holidays, including New Year’s Day, Presidents Day, Memorial Day, Independence Day, Labor Day, Veterans’ Day, Thanksgiving Day, Christmas Day.

“Landlord” and “Tenant” shall be applicable to one or more Persons as the case may be, and the singular shall include the plural, and the neuter shall include the masculine and feminine; and if there be more than one, the obligations thereof shall be joint and several. For purposes of any provisions indemnifying or limiting the liability of Landlord, the term “Landlord” shall include Landlord’s present and future partners, beneficiaries, trustees, officers, directors, principals, agents, affiliates, successors and assigns, and for purposes of any provisions indemnifying or limiting the liability of Tenant, the term “Tenant” shall include Tenant’s present and future partners, beneficiaries, trustees, officers, directors, principals, agents, affiliates, successors and assigns.

“Law” shall mean all federal, state, county and local governmental and municipal laws, statutes, ordinances, rules, regulations, codes, decrees, orders and other such


OFFICE LEASE		PAGE 2

requirements, applicable equitable remedies and decisions by courts in cases where such decisions are considered binding precedents in the state in which the Property is located, and decisions of federal courts applying the Laws of such State.

“Mortgage” shall mean all mortgages, deeds of trust, ground leases and other such encumbrances now or hereafter placed upon the Property or Building, or any part thereof and all renewals, modifications, consolidations, replacements or extensions thereof and all indebtedness now or hereafter secured thereby and all interest thereon.

“Person” shall mean an individual, trust, partnership, joint venture, association, corporation, limited liability company and any other entity.

“Prime Rate” shall mean the prime rate (or base rate) reported in the Money Rates column or section of The Wall Street Journal as being the base rate on corporate loans at large U.S. money center commercial banks (whether or not such rate has actually been charged by any such bank) on the first day on which The Wall Street Journal is published in the month preceding the month in which the subject costs are incurred.

“Property” shall mean the Building, and any common or public areas or facilities, easements, corridors, lobbies, sidewalks, loading areas, driveways, landscaped areas, sky-walks, and any and all other structures or facilities operated or maintained in connection with and for the benefit of the Building, and all parcels or tracts of land on which all or any portion of the Building or any of the other foregoing items are located, and any fixtures, machinery, equipment, apparatus, Systems and Equipment, furniture and other personal property located thereon or therein and used in connection therewith, whether title is held by Landlord or its affiliates. Possession of areas necessary for utilities, services, safety and operation of the Property, including the Systems and Equipment, fire stairways, perimeter walls, space between the finished ceiling of the Premises and the slab of the floor or roof of the Property there above, and the use thereof together with the right to install, maintain, operate, repair and replace the Systems and Equipment, including any of the same in, through, under or above the Premises in locations that will not materially interfere with Tenant’s use of the Premises, are hereby excepted and reserved by Landlord, and not demised to Tenant, provided, if the such installation, maintenance, operation, repair or replacement of the Systems and Equipment results in the loss of the use of any portion of the Premises, the Base Rent shall be reduced in proportion to the portion of the Premises Tenant is no longer able to use; and provided further that Landlord shall pay all costs of modifications to Tenant’s then existing improvements that are necessitated by Landlord’s exercise of the foregoing right.

“Systems and Equipment” shall mean any plant, machinery, transformers, duct work, cable, wires for Landlord use, and other equipment, facilities, and systems designed to supply heat, ventilation, air conditioning and humidity or any other services or utilities, or comprising or serving as any component or portion of the electrical, gas, steam, plumbing, sprinkler, Landlord communications, alarm, security, or fire/life/safety systems or equipment, or any other mechanical, electrical, electronic, computer or other systems or equipment for the Property.

“Term” shall mean the period of time set forth in Section 1j) above.

Premises. Commencing on and continuing throughout the Term of this Lease, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Premises as defined in Section 1g). The Premises shall be improved as set forth in Work Letter attached hereto and made a part hereof as Exhibit B, as more fully described below.

4.	Term. The term of this Lease shall be for the period designated in Section 1j),commencing on the Commencement Date, and ending on the expiration of such period, unless the term shall be sooner terminated as hereinafter provided.

The Commencement Date shall not be extended or delayed on account of any delays; provided, however, that the Rent Commencement Date defined in Section 5 below shall be postponed, and, in addition to any other abatement provided in this Lease, Rent shall be abated after the Rent Commencement Date, one day for each day or partial day of delay to the extent that Landlord fails to deliver possession of the Premises for any reason, including but not limited to holding over by prior occupants, by July 31, 2004. Notwithstanding the foregoing, upon the execution of this Lease Tenant shall have non-exclusive access to the Premises for the purpose of constructing the Tenant Improvements.

During any period that Tenant shall be permitted to enter the Premises prior to the Commencement Date other than to occupy the same (e.g., to perform alterations or improvements), Tenant shall comply with all terms and provisions of this Lease, except


OFFICE LEASE		PAGE 3

those provisions requiring the payment of Rent. Tenant shall not have any obligations with respect to the Premises or with respect to maintenance of insurance until possession of the Premises has been delivered to Tenant.

Base Rent. The Base Rent for the Term of this Lease shall be as set forth in Section 1l) above, payable in advance on or before the first day of each calendar month during the Term from and after October 1, 2005 (the “Rent Commencement Date”) without offset or demand except that Base Rent for the first full calendar month for which Base Rent shall be due, shall be paid when Tenant executes this Lease. The Base Rent set forth in Section 1l) does not include the repayment of the Additional Allowance as provided in Section 8 of the Work Letter Agreement, and, when determined, the repayment of the Additional Allowance shall be included in Base Rent. If the Term commences on a day other than the first day of a calendar month, or ends on a day other than the last day of a calendar month, then the Base Rent for such month shall be prorated on the basis of the actual number of days in that month.

6.	Additional Rent.

Taxes. Commencing January 1, 2006, Tenant shall, in addition to all other sums due under this Lease, pay Landlord an amount equal to Tenant’s Pro rata Share of Taxes, as defined below, in excess of the amount of Taxes paid or payable by Landlord during the calendar year 2005 (“Base Tax Year”).

“Taxes” shall mean all federal, state, county, or local governmental or municipal taxes, fees, charges or other impositions of every kind and nature, whether general, special, ordinary or extraordinary, including without limitation, real estate taxes, general and special assessments, transit taxes, water and sewer rents, taxes based upon the receipt of rent including gross receipts or sales taxes applicable to the receipt of rent or service or value added taxes (unless required to be paid by Tenant under Section 19, personal property taxes imposed upon the fixtures, machinery, equipment, apparatus, Systems and Equipment, appurtenances, furniture and other personal property used in connection with the Property which Landlord shall pay or which is payable during any calendar year, any portion of which occurs during the Term (without regard to any different fiscal year used by such government or municipal authority) because of or in connection with the ownership, leasing and operation of the Property. Notwithstanding the foregoing, there shall be excluded from Taxes all excess profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and succession taxes, estate taxes, federal and state income taxes, and any other tax that is applicable to Landlord’s general or net income (as opposed to rents, receipts or income attributable to operations at the Property). If the method of taxation of real estate prevailing at the time of execution hereof shall be, or has been altered, so as to cause the whole or any part of the taxes now, hereafter or heretofore levied, assessed or imposed on real estate to be levied, assessed or imposed on Landlord, wholly or partially, as a capital levy or otherwise, or on or measured by the rents received therefrom, then such new or altered taxes attributable to the Property shall be included within the term “Taxes” except that the same shall not include any enhancement of said tax attributable to other income of Landlord. Any expenses incurred by Landlord in attempting to protest, reduce or minimize Taxes shall be included in Taxes in the calendar year such expenses are paid. Tax refunds shall be allocated to the year to which the refund applies. If Taxes for the Base Tax Year are reduced as the result of protest, or by means of agreement, or as the result of legal proceedings or otherwise, Landlord may adjust Tenant’s obligations for Taxes in all years following the Tax Base Year, and Tenant shall pay Landlord within thirty (30) days after notice any additional amount required by such adjustment for any such years or portions thereof that have theretofore occurred. Landlord represents that it has not appealed the valuation of the Property with respect to taxes payable in 2005 as of the date of this Lease. If Taxes for any period during the Term or any extension thereof, shall be increased after payment thereof by Landlord, for any reason, including without limitation error or reassessment by applicable governmental or municipal authorities, Tenant shall pay Landlord within thirty (30) days after notice (accompanied by such documentation establishing the increase as Tenant may reasonably request) Tenant’s Pro rata Share of such increased Taxes. Tenant shall pay increased Taxes whether Taxes are increased as a result of increases in the assessments or valuation of the Property (whether based on a sale, change in ownership or refinancing of the Property or otherwise), increases in the tax rates, reduction or elimination of any rollbacks or other deductions available under current law, scheduled reductions of any tax abatement, as a result of the elimination, invalidity or withdrawal of any tax abatement, or for any other cause whatsoever; provided, however, that the term “Taxes” shall not include penalties or interest imposed as a consequence of late payment of Taxes. Notwithstanding the foregoing, if any Taxes shall be paid


OFFICE LEASE		PAGE 4

based on assessments or bills by a governmental or municipal authority using a fiscal year other than a calendar year, Landlord may elect to average the assessments or bills for the subject calendar year, based on the number of months of such calendar year included in each such assessment or bill.

Operating Expenses. Commencing January 1, 2006, Tenant shall, in addition to all other sums due under this Lease, pay Landlord an amount equal to Tenant’s Pro rata Share of Operating Expenses, as defined below, in excess of the amount of Operating Expenses paid or payable by Landlord during the calendar year 2005 (“Base Expense Year”).

“Operating Expenses” shall mean all costs of operation and maintenance attributable to the Property (“Operating Expenses”) as determined by standard accounting practices, including, without limitation, the following costs by way of illustration: Common Area operation and maintenance charges; water and sewer charges; the cost of insurance (including any deductible amount) which Landlord elects to maintain with respect to the Property, including, without limitation, rental income insurance and all other forms of insurance; utilities; janitorial services; security; labor; utilities surcharges; costs (which shall be amortized as described below), including financing costs, for capital expenditures, prorated on a monthly basis, that are (i) required by a governmental entity for energy conservation, life safety or other purposes, or (ii) made by Landlord to reduce Operating Expenses, which costs shall be amortized over the useful life of such improvements in accordance with such reasonable life and amortization schedules as shall be determined by Landlord in accordance with generally accepted accounting principles, with interest on the unamortized amount at one percent (1%) in excess of the Prime Rate, or such higher rate as may have been paid by Landlord on borrowed funds; the fair market rental value of any onsite building management office, management fees for independent contractors performing management services, wages and salaries of employees used in the management, operation and maintenance of the Property, payroll taxes and similar governmental charges with respect thereto and administrative fees; legal and accounting fees incurred in connection with the operation, maintenance and administration of the Property which are acceptable under generally accepted accounting principles; air conditioning; waste disposal; heating; ventilating; elevator maintenance; supplies; materials; equipment; tools; and maintenance costs and upkeep of all Common Areas, including, without limitation, the cost and expense of maintenance.

Operating Expenses shall not include (i) the initial construction costs of the Property, the costs of providing tenant improvements to Tenant or any other tenant, or the depreciation of such costs; (ii) debt service (including, without limitation, interest, principal and any impound payments) required to be made on any Mortgage with respect to all or any part of the Property other than financing costs for capital expenditures set forth in the immediately preceding sentence; (iii) any rent payable under any ground lease now or hereafter affecting the Property; (iv) capital expenditures except as specifically included in the immediately preceding sentence; (v) the cost of repairs or other work occasioned by fire, windstorm, earthquake, flood or other casualty or loss in excess of insurance proceeds therefor, or by the exercise of eminent domain; (vi) deductibles under Landlord’s insurance policies in excess of $50,000 in any one calendar year; (vii) (viii) rental concessions or lease buyouts; (viiii) the amounts by which the cost of any work or service performed for and electricity supplied to any tenant or occupant (other than Tenant) exceeds the greater of (A) the cost of the standard amount or level of such work, service or electricity provided to tenants or occupants of the Building in general, or (B) the cost of the amount or level of work, service or electricity made available by Landlord to Tenant under this Lease; (x) depreciation, except as specifically provided above; (xi) Landlord’s general overhead and any other expense not directly related to the Building; (xii) advertising and promotional expenses with respect to leasing space in or selling the Building; (xiii) brokerage, legal and professional fees (A) expended by Landlord in connection with negotiating and entering into any leases and any related instruments (including, without limitation, guaranties, surrender agreements, leasing amendments and consents to assignment or subletting) with any tenant or other occupant of any portion of the Building, and the enforcement of any such instruments, or (B) which are expended or incurred by Landlord in connection with the negotiation and entering of sale, ground lease, financing, partnership or similar transactions pertaining to the Building, or any portion thereof, and/or to Landlord or an interest in Landlord, including without limitation, promissory notes, security deeds, mortgages, ground or master leases, purchase and sale agreements, options, and any and all similar and/or related documents, instruments and agreements; (xiv) wages, salaries and other compensation paid to employees of the Landlord at the Building who are above


OFFICE LEASE		PAGE 5

dthe level of Building manager; (xv) costs and expenses of maintenance and operation of any parking facility in or serving the Building except to the extent that they exceed any revenues for parking received from such operation; (xvi) the cost of defending against claims in regard to the existence or release of hazardous substances or materials at the Building and costs of any clean-up of any such hazardous substances or materials (except with respect to those costs for which Tenant is otherwise responsible pursuant to the express terms of this Lease); (xvii) interest, penalties or damages incurred by Landlord for late payment of taxes or assessments or under any agreement to which Landlord is a party by reason of the breach or default of Landlord; (xviii) expenses incurred in connection with relocating tenants in the Building; (xvix) the cost of installing, operating and maintaining any specialty service or special facility such as an observatory, broadcasting facilities, health club, cafeteria, or dining facility or luncheon club, other than those facilities generally made available to tenants of the Building without cost; (xx) costs of acquiring and securing works of art; xi) amounts received by Landlord through proceeds of insurance to the extent the proceeds are compensation for expenses which were previously included in Building operating costs charged to tenants; (xii) costs related to public transportation, transit or van pools; and (xiii) specific costs incurred for the account of specific tenants of the Property.

Notwithstanding the foregoing definitions, as to each specific category for which one or more tenants of the Property either pays directly to third parties or specifically reimburses Landlord (e.g., separately metered utilities, separately contracted janitorial service, property taxes directly reimbursed to Landlord, etc.), such tenant’s payments with respect thereto shall not be included in Operating Expenses for purposes of this definition and, for each such specific category of Operating Expenses, Tenant’s Percentage shall be adjusted by excluding from the calculation thereof the rentable area of all tenants paying such category of Operating Expenses directly to third parties or reimbursing the same directly to Landlord.

Tenant’s Pro rata Share. “Tenant’s Pro rata Share” of Taxes and Operating Expenses shall be the rentable area of the Premises divided by the rentable area of the Property on the last day of the calendar year for which Taxes or Operating Expenses are being determined. Except as provided expressly to the contrary herein, the “rentable area of the Property” shall include all rentable area of all space leased or available for lease at the Property, which Landlord may reasonably re-determine from time to time, to reflect re-configurations, additions or modifications to the Property. With respect to all Operating Expenses that vary with occupancy, the actual costs thereof for the Base Expense Year and for each year thereafter shall be adjusted to reflect Operating Expenses as if the Building had been 100% occupied. If the Property or any development of which it is a part, shall contain non-office uses, Landlord shall have the right to determine in accordance with sound accounting and management principles, Tenant’s Pro rata Share of Taxes and Operating Expenses for only the office portion of the Property or of such development, in which event, Tenant’s Pro rata Share shall be based on the ratio of the rentable area of the Premises to the rentable area of such office portion. Similarly, if the Property shall contain tenants who do not participate in all or certain categories of Taxes or Operating Expenses on a pro rata basis, Landlord may exclude the amount of Taxes or Operating Expenses, or such categories of the same, as the case may be, attributable to such tenants, and exclude the rentable area of their premises, in computing Tenant’s Pro rata Share. All of the above notwithstanding, adjustments made by Landlord pursuant to the previous two sentences shall be fair and equitable and Landlord shall not be entitled thereby to recover more than 100% of Taxes or Operating Expenses for any calendar year.

Manner of Payment. Taxes and Operating Expenses shall be paid in the following manner:

Landlord shall reasonably estimate in advance the amounts Tenant shall owe for Taxes and Operating Expenses for the forthcoming full or partial calendar year of the Term. Tenant shall pay such estimated amounts, in equal monthly payments, on or before the first day of each calendar month, together with Tenant’s payment of Base Rent. Such estimate may be reasonably adjusted from time to time by Landlord.

ii)

Within one hundred twenty days (120) days after the end of each calendar year, or as soon thereafter as practicable, Landlord shall provide a statement (the “Statement”) to Tenant showing: (a) the amount of actual Taxes and Operating Expenses for such calendar year, with a listing of amounts for major categories of Operating Expenses, and such amounts for the Base Years, (b) the amounts paid by Tenant towards Taxes and Operating Expenses during such calendar year on an estimated basis, and (c) any revised estimate of Tenant’s obligations for Taxes and Operating Expenses for the current calendar year.


OFFICE LEASE		PAGE 6

iii)

If the Statement shows that Tenant’s estimated payments were less than Tenant’s actual obligations for Taxes and Operating Expenses for such year, Tenant shall pay the difference. If the Statement shows an increase in Tenant’s estimated payments for the current calendar year, Tenant shall pay the difference between the new and former estimates, for the period from January 1 of the current calendar year through the month in which the Statement is sent. Tenant shall make such payment within thirty (30) days after it receives Landlord’s Statement.

iv)

If the Statement shows that Tenant’s estimated payments exceeded Tenant’s actual obligations for Taxes and Operating Expenses, Tenant shall receive a credit for the difference against payments of Rent next due. If the Term shall have expired and no further Rent shall be due, Tenant shall receive a refund of such difference, within thirty (30) days after Landlord sends the Statement to Tenant’s last known address.

So long as Tenant’s obligations hereunder are not materially adversely affected thereby, Landlord reserves the right to reasonably change, from time to time, the manner or timing of the foregoing payments so long as equal periodic payments, no less frequently than quarterly, are required. In lieu of providing one Statement covering Taxes and Operating Expenses, Landlord may provide separate statements, at the same or different times. No delay by Landlord in providing the Statement (or separate statements) shall be deemed a default by Landlord or a waiver of Landlord’s right to require payment of Tenant’s obligations for actual or estimated Taxes or Operating Expenses; provided, however, that any Statement rendered by Landlord and paid by Tenant shall be conclusive and binding on both parties 360 days after the date of the Statement, subject, however, to adjustment pursuant to the audit procedures described in subsection g) below. In no event shall a decrease in Taxes or Operating Expenses below the Base Year amounts, ever decrease the monthly Base Rent, or give rise to a credit in favor of Tenant.

Proration. If the Term ends other than on December 31, Tenant’s obligation to pay estimated and actual amounts towards Taxes and Operating Expenses for such final calendar year shall be prorated to reflect the portion of that year that is included in the Term. Such proration shall be made by multiplying the total estimated or actual (as the case may be) Taxes and Operating Expenses, for such calendar year, as well as the Base Year amounts, by a fraction, the numerator of which shall be the number of days of the Term during such calendar year, and the denominator of which shall be 365.

Base Year Adjustments. Landlord may exclude from the Base Expense Year, any non-recurring items, including capital expenditures otherwise permitted as Operating Expenses of the Lease (and shall only include the amortization of such expenditures in subsequent year Operating Expenses, including any remaining amortization of permitted capital expenditures made prior to or after the Commencement Date). If Landlord eliminates from any subsequent year’s Operating Expenses a recurring category of expenses previously included in the Base Expense Year, Landlord may subtract such category from the Base Expense Year commencing with such subsequent year.

Review of Landlord’s Statements. Provided that Tenant is not then in default beyond any applicable cure period of its obligations to pay Base Rent, Taxes, Operating Expenses, or any other payments required to be made by it under this Lease and provided further that Tenant strictly complies with the provisions of this Section, Tenant shall have the right, once each calendar year, to reasonably review supporting data for all or any portions of that specific Statement(s) for the preceding calendar year (provided, however, Tenant may have an audit right to only that documentation relating to Property operations that is reasonably necessary to allow Tenant to make a determination of the accuracy of the Statement or Statements received by Tenant with respect to the relevant calendar year) in accordance with the following procedure:

Tenant shall, within one hundred twenty (120) days after any such Statement is delivered, deliver a written notice to Landlord of its intent to review the supporting data for one or more Statements given the previous calendar year, specifying the Statement(s) to be reviewed and, if relevant, the particular portions of the Statements to be reviewed. Except as expressly set forth in Subsection iii) below, in no event shall Tenant be entitled to withhold, deduct, or offset any monetary obligation of Tenant to Landlord under the Lease (including, without limitation, Tenant’s obligation to make all payments of Base Rent and all payments of Tenant’s Tax and Operating Expense Adjustment) pending the completion any review of records under this Section. The right of Tenant under this Section may only be exercised once for any calendar year.


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ii)

Tenant acknowledges that Landlord may maintain its records for the Property off site and Tenant agrees that any review of records under this Section shall be at the sole expense of Tenant and shall be conducted either by Tenant itself or by an independent firm of certified public accountants having significant experience in auditing property management records. Tenant acknowledges and agrees that any records reviewed under this Section constitute confidential information of Landlord, which shall not be disclosed to anyone other than the employees of Tenant or of the independent accountants performing the review, and the principals of Tenant who receive the results of the review. Any third parties who are engaged to perform the review for Tenant shall be required to agree to the foregoing terms.

iii)

Any errors disclosed by the review shall be promptly corrected by Landlord provided, however, that if Landlord disagrees with any such claimed errors, Landlord shall have the right to cause another review to be made by an independent firm of certified public accountants having significant experience in auditing property management records. The parties shall work together in good faith to resolve any disagreement resulting from the review(s) undertaken pursuant to this subsection g). In the event that the results of the review(s) of records reveal that Tenant has overpaid obligations for a preceding period, the amount of such overpayment shall be credited against Tenant’s subsequent installment obligations to pay the estimated Tax and Operating Expenses or, if the Lease Term has expired, shall be refunded to Tenant within thirty (30) days. In the event that such results show that Tenant’s payments have been accurate or that Tenant has underpaid its obligations for a preceding period, the amount of such underpayment shall be paid by Tenant to Landlord with the next succeeding installment obligation of estimated Tax and Operating Expenses.

Rent and Other Charges. Base Rent, Taxes, Operating Expenses, and any other amounts which Tenant is or becomes obligated to pay Landlord under this Lease or other agreement entered in connection herewith, are sometimes herein referred to collectively as “Rent,” and all remedies applicable to the non-payment of Rent shall be applicable thereto. All Rent, and all other amounts payable to Landlord by Tenant pursuant to the provisions of this Lease, shall be paid to Landlord, without notice, demand, abatement, deduction or offset, in lawful money of the United States at Landlord’s office in the Property or to such other person or at such other place as Landlord may designate from time to time by written notice given to Tenant. No payment by Tenant or receipt by Landlord of a lesser amount than the correct Rent due hereunder shall be deemed to be other than a payment on account; nor shall any endorsement or statement or any check or any letter accompanying any check or payment be deemed to effect or evidence an accord and satisfaction; and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance or pursue any other remedy in this Lease or at law or in equity provided.

Late Charge; Interest. Tenant acknowledges that the late payment of Rent or any portion thereof or any other amounts payable by Tenant to Landlord hereunder may cause Landlord to incur administrative costs and other damages, the exact amount of which would be impracticable or extremely difficult to ascertain. Landlord and Tenant agree that if Landlord does not receive any payment of any such Rent or portion thereof on or before ten (10) business days after the date the payment is due, Tenant shall pay to Landlord, as additional rent, (a) a late charge equal to five percent (5%) of the overdue amount to cover such additional administrative costs; and (b) interest on the delinquent amounts at the Default Rate from the date due to the date paid.

Condition of Premises. Tenant acknowledges that Landlord has not made any representation or warranty with respect to the condition of the Premises or the Property or with respect to the suitability or fitness of either for the conduct of Tenant’s permitted use or for any other purpose. Tenant represents and warrants that Tenant has walked through and inspected the Property and the Premises and, except only for Landlord’s Work, it has accepted the Premises in its as-is where-is condition.

Use and Rules. Tenant shall use the Premises for general office purposes and no other purpose whatsoever, in compliance with all applicable Laws, and without disturbing or interfering with any other tenant or occupant of the Property. Tenant shall not use the Premises in any manner so as to cause a cancellation of Landlord’s insurance policies, or an increase in the premiums thereunder. Landlord represents and warrants to Tenant that general office use in the Premises will not cause either a cancellation of Landlord’s insurance policies or any increase in the premiums thereunder. Tenant shall comply with all rules set forth in Exhibit D attached hereto (the “Rules”). Landlord shall have the right to reasonably amend such Rules and supplement the


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same with other reasonable Rules (not expressly inconsistent with this Lease) relating to the Property, or the promotion of safety, care, cleanliness or good order therein, and all such amendments or new Rules shall be binding upon Tenant after five (5) days notice thereof to Tenant. Nothing herein shall be construed to give Tenant or any other Person any claim, demand or cause of action against Landlord arising out of the violation of such Rules by any other tenant, occupant, or visitor of the Property, or out of the enforcement or waiver of the Rules by Landlord in any particular instance; provided, however, that Landlord shall enforce all Rules equitably.

Services and Utilities. Landlord agrees to furnish or cause to be furnished to the Premises the following utilities and services, subject to the conditions and standards set forth herein. Any amounts which Tenant is required to pay to Landlord pursuant to this Section shall be payable upon demand by Landlord and shall constitute additional rent.

Elevator Service. Landlord shall provide non-attended automatic elevator service for passengers and freight elevator service during Business Hours and, subject to Section 9f) below, elevator service, shall be available to the Premises at all times.

HVAC. During Business Hours, such air conditioning, heating and ventilation as are reasonably required for the comfortable use and occupancy of the Premises; provided, however, that if Tenant shall require heating, ventilation or air-conditioning in excess of that which Landlord shall be required to provide hereunder, Landlord shall provide such additional heating, ventilation or air conditioning at such rates and upon such additional conditions as shall be reasonably determined by Landlord from time to time. As of the date of this Lease, the charge for after-hours HVAC service is $.50 per ton of HVAC per hour.

Electric Service. Landlord shall provide at all times (subject to Section 9f) below, electric current as required for building standard lighting, fractional horsepower office machines, personal computers, a server room designed to serve Tenant’s expected computing and communications needs (as described on Exhibit B and attachments to that exhibit) and similar standard office equipment. Tenant shall not install, or permit the installation, in the Premises of any equipment or machines which will increase Tenant’s use of electric current in excess of the standard office requirements described above without Landlord’s prior written consent. If Tenant shall require electric current which may disrupt the provision of electrical service to other tenants, Landlord may refuse to grant its consent. If Tenant’s increased electrical requirements will materially affect the temperature level in the Premises or the Property, Landlord’s consent may be conditioned upon Tenant’s requirement to pay such amounts as will be incurred by Landlord to install and operate any machinery or equipment necessary to restore the temperature level to that otherwise required to be provided by Landlord, including but not limited to the cost of modifications to the air conditioning system. In the event more than one provider of electric service is available to the Building or the Premises, Landlord shall, in its sole discretion, have the right to elect such service provider and Tenant shall not purchase electrical service from any third party without Landlord’s prior consent, which consent shall not be unreasonably withheld or delayed. Tenant shall purchase all non-standard light bulbs, fluorescent tubes, ballasts, or starters used in the Premises from Landlord; standard light bulbs, tubes, ballasts and starters shall be provided by Landlord at its expense. Landlord shall not, in any way be liable or responsible to Tenant for any loss or damage or expense which Tenant may incur or sustain if, for any reasons beyond Landlord’s control, either the quantity or character of electric service is changed or is no longer available or suitable for Tenant’s requirements. Any riser or risers (and all other equipment proper or necessary in connection therewith) required after the commencement of the Term to supply Tenant’s electrical requirement will, upon Tenant’s written request (and at its sole expense as additional rent), be installed by Landlord, so long as feasible. If any tax is imposed upon Landlord’s receipts from the sale or resale of electrical energy or gas or telephone service to Tenant by any governmental authority, Tenant covenants that, where permitted by Law, Tenant’s pro rata share of such taxes shall be paid by Tenant to Landlord.

Water. Water for drinking and rest room purposes.

Janitorial. Customary janitorial, trash removal and cleaning services Monday through Friday or Sunday through Thursday in and about the Premises, provided that the Premises are used exclusively for office purposes and are kept reasonably in order by Tenant.

Interruption of Services. Landlord shall not be liable for any failure to furnish, stoppage of, or interruption in furnishing any of the services or utilities described herein, when such failure is caused by accident, breakage, repairs, strikes, lockouts, labor disputes, labor disturbances, governmental regulation, civil disturbances, acts of war, moratorium or other governmental action, or computer software weaknesses (such as the Year 2000 problem), or any other cause beyond Landlord’s control, and, in such event, Tenant shall


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not be entitled to any, damages nor shall any failure or interruption abate or suspend Tenant’s obligation to pay Rent and additional rental required under this Lease or constitute or be construed as a constructive or other eviction of Tenant. Further, in the event any governmental authority or public utility promulgates or revises any law, ordinance, rule or regulation, or issues mandatory controls or voluntary controls relating to the use or conservation of energy, water, gas, light or electricity, the reduction of automobile or other emissions, or the provision of any other utility or service, Landlord may take any reasonably appropriate action to comply with such law, ordinance, rule, regulation, mandatory control or voluntary guideline without affecting Tenant’s obligations hereunder. Landlord shall not be responsible for, and Tenant waives any rights with respect to, providing security or other protection for Tenant or its employees, invitees or property in or about the Premises or the Property. All of the above notwithstanding, if any interruption of utilities or services renders all or any part of the Premises untenantable for their intended purposes for more than five (5) business days, then Tenant’s obligation to pay Rent with respect to the portion that has been rendered untenantable shall abate for the period of time that they remain untenantable.

Monitoring Excess Use. The parties intend and believe that the utilities supplied to the Premises upon completion of Landlord’s Work and the initial Tenant Improvements will be sufficient for Tenant’s use and that Tenant’s use will not exceed that nominally used by a tenant occupying similar office space for similar office purposes, which shall not in any event be less than the use described in the first sentence of 9c) above (“Utility Use Standard”). If Tenant’s actual use of utilities is in excess of the Utility Use Standard, then, with the exception of excess use of the HVAC which shall be subject to Section 9b) above, Tenant shall pay Landlord upon demand as additional rent, the cost of such excess utility usage in addition to any other rent or charge due from Tenant under this Lease. In addition, and only in that instance, Landlord may install and operate additional meters or any other reasonable system for monitoring or estimating any services or utilities used by Tenant in excess of those required to be provided by Landlord under this Section (including a system for Landlord’s engineer to reasonably estimate any such excess usage) at Tenant’s sole cost. If such system indicates that Tenant’s use actually exceeds the Utility Use Standard, then Tenant shall pay Landlord’s charges for installing and operating such system and any supplementary heat, electrical or other systems or equipment (or adjustments or modifications to the existing Systems and Equipment) that are required as a direct result of Tenant’s use in excess of the Utility Use Standard, and Landlord’s charges for such amount of excess services or utilities used by Tenant.

10.	Alterations and Liens.

Alterations. Tenant shall make no additions, changes, alterations or improvements (the “Work”) to the Premises or the Systems and Equipment pertaining to the Premises without the prior written consent of Landlord, except that Tenant may, without Landlord’s consent, make cosmetic alterations to the Premises that do not impact or require alterations to the Systems and Equipment so long as the costs of the alterations do not exceed $750,000 in any year, and provided that Landlord shall not in any event unreasonably withhold, condition or delay its consent. Landlord may impose as a condition of such consent such requirements as Landlord in its reasonable discretion deems necessary or desirable including, without limitation, the submission of plans and specifications for Landlord’s prior written approval, obtaining necessary permits, obtaining insurance, prior approval of contractors, subcontractors and suppliers, prior receipt of copies of all contracts and subcontracts, contractor and subcontractor lien waivers, affidavits listing all contractors, subcontractors and suppliers, use of union labor (if Landlord uses union labor for such work in the Building), affidavits from engineers acceptable to Landlord stating that the Work will not adversely affect the Systems and Equipment or the structure of the Property, and reasonable requirements as to the manner and times in which such Work shall be done. All Work shall be performed in a good and workmanlike manner and all materials used shall be of a quality comparable to or better than those in the Premises and Property and shall be in accordance with plans and specifications approved by Landlord, and Landlord may require that all such Work be performed under Landlord’s supervision. In all cases, Tenant shall pay Landlord a fee of two percent (2%) of the total cost of the Work above the $50,000 annual threshold to cover Landlord’s overhead in reviewing Tenant’s plans and specifications and performing any supervision of the Work. If Landlord consents or supervises, the same shall not be deemed a warranty as to the adequacy of the design, workmanship or quality of materials, and Landlord hereby expressly disclaims any responsibility or liability for the same. Landlord shall under no circumstances have any obligation to repair, maintain or replace any portion of the Work. The foregoing provisions shall not apply to Landlord’s Work or to the initial Tenant Improvements, which shall be governed by the terms of Exhibit B.

Liens. Tenant shall keep the Property and Premises free from any mechanic’s, materialman’s or similar liens or other such encumbrances in connection with any Work