SINGLE-TENANT INDUSTRIAL TRIPLE NET LEASE

Exhibit 10.1

SINGLE-TENANT INDUSTRIAL TRIPLE NET LEASE

Effective Date: June 11, 2008
(the date set forth below Landlord’s signature)

		BASIC LEASE INFORMATION
Landlord:		267 ASSOCIATES, L.L.C., an Indiana limited liability company
Landlord’s Address For Notice:		ProLogis 8102 Zionsville Road Indianapolis, IN 46268 Attn: Property Management Telephone: (317) 228-6200 Fax: (317) 228-6201
With a copy to:		ProLogis 4545 Airport Way Denver, CO 80239 Attn: Legal Department Telephone: (303) 567-5000 Fax: (303) 567-5761
Landlord’s Address For Payment of Rent:		267 ASSOCIATES, L.L.C. c/o ProLogis 4545 Airport Way Denver, CO 80239
Tenant:		LACROSSE FOOTWEAR, INC., a Wisconsin corporation
Tenant’s Address For Notice:		17634 NE Airport Way Portland, Oregon 97230 Attn: David Carlson Telephone: (503) 803-4568 Fax: (503) 382-2531
Project:		Park 267 located in Whitestown, Indiana. “Park 267” means that certain project, portions of which are currently under development by Landlord, located in the City of Whitestown, County of Boone, and State of Indiana, as shown in the Project Site Plan attached hereto as Exhibit A-1 .
Land:		Approximately 27.2 acre parcel of land shown on the Premises Site Plan attached hereto as Exhibit A-2 .
Building:		An office/warehouse building to be located upon the Land and containing approximately 380,000 rentable square feet.

Premises:		The Building and the Land, as more particularly depicted on Exhibit A-2 .
Premises Address:      Street:      City and State:		[To be provided prior to Commencement Date] ___ Performance Way Whitestown, IN 46075
Term:		One Hundred Twenty Four (124) months
Commencement Date:		The date which is the later of (i) March 1, 2009, or (ii) the date of Substantial Completion of the Improvements in accordance with the Work Letter attached hereto as Addendum 2 and delivery of possession of such Substantially Completed Premises by Landlord to Tenant.

Base Rent:		Months		Monthly Base Rent
		1-4		- 0 - 1
		(Commencement Date through 120 th
		day following Commencement Date)
		5-64		$91,200.00 2
		(121 st day following Commencement
		Date through month 64)
		65-124		$100,383.33 2

		1  Tenant shall be responsible for paying Tenant’s pro-rata share of Building Operating Expenses and Project Operating Expenses during this free rent period.
		2  Subject to adjustment in accordance with Section 1.4 of the Lease and Section 9(c) of the Work Letter attached to the Lease as Addendum 2.
Tenant’s Share of Building Operating Expenses:		100%
Tenant’s Share of Project Operating Expenses:		43.13% 3
		3  Subject to adjustment if more buildings are constructed in Park 267 that are not currently taken into consideration in determining Tenant’s Share of Project Operating Expenses.
Security Deposit:		$91,200.00
Broker:		Landlord’s Broker: N/A Tenant’s Broker: GVA Kidder Matthews and Summit Realty Group
Lease Year:		Shall refer to each twelve (12) month period during the Term commencing on the Commencement Date.

Permitted Uses:		The warehousing, distribution and sale of footwear, apparel and related products (specifically excluding retail sales except as provided below), together with collateral office uses. Notwithstanding the foregoing to the contrary, in the event Tenant obtains all necessary variances and approvals from the applicable governmental authorities in accordance with applicable law, Tenant may use a portion of the Premises as retail outlet open to the general public. No other uses shall be permitted without the prior written consent of Landlord, which consent shall not be unreasonably withheld.
Options:		Two (2) five (5) year Options to Extend as more particularly set forth in the attached Addendum 1 to Lease.
Parking Spaces:		Sixty-Eight (68) unreserved parking spaces upon the Premises. In addition, Tenant may, at Tenant’s sole cost and expense, provide for the striping of additional parking spaces in the paved areas adjacent to Tenant’s loading dock, provided that (i) the addition of such spaces in the loading dock is in compliance with all Applicable Laws and (ii) any and all costs associated with providing such parking spaces in the loading dock areas shall be at Tenant’s sole cost and expense, including, without limitation, any landscaping requirements imposed by the City of Whitestown, Indiana.

ADDENDA
1		Two Options to Extend Lease Term
2		Work Letter
EXHIBITS
A-1		Project Site Plan
A-2		Premises Site Plan
B		Commencement Date Memorandum
C		Insurance Certificate
D		Prohibited Uses
E		Rules and Regulations
F		Requirements for Improvements or Alterations by Tenant
G		Estoppel Certificate
H		Form of Subordination, Non-Disturbance and Attornment Agreement

     The Basic Lease Information set forth above and the Addenda and Exhibits attached hereto are incorporated into and made a part of the following Lease. Each reference in this Lease to any of the Basic Lease Information shall mean the respective information above and shall be construed to incorporate all of the terms provided under the particular Lease paragraph pertaining to such information. In the event of any conflict between the Basic Lease Information and the provisions of the Lease, the latter shall control.

LANDLORD		(                      ) initial		AND TENANT		(                      ) initial		AGREE.

1.		PREMISES					1
		1.1		Premises			1
		1.2		Common Area			1
		1.3		Reserved Rights			1
		1.4		Re-measurement of Premises			1
2.		TERM					1
		2.1		Commencement Date			1
		2.2		Intentionally Omitted			1
		2.3		Intentionally Omitted
		2.4		Early Entry			2
3.		RENT					2
		3.1		Rent			2
		3.2		Late Charge and Interest			2
		3.3		Security Deposit			3
4.		UTILITIES					3
5.		TAXES					3
		5.1		Real Property Taxes			3
		5.2		Definition of Real Property Taxes			3
		5.3		Personal Property Taxes			4
6.		OPERATING EXPENSES					4
		6.1		Operating Expenses.			4
		6.2		Definition of Operating Expenses			4
7.		ESTIMATED EXPENSES					5
		7.1		Payment			5
		7.2		Adjustment			5
8.		INSURANCE					5
		8.1		Landlord			5
		8.2		Tenant			6
		8.3		General			6
		8.4		Indemnity			7
		8.5		Exemption of Landlord from Liability			8
9.		REPAIRS AND MAINTENANCE					8
		9.1		Tenant			8
		9.2		Landlord			9
10.		ALTERATIONS					9
		10.1		Trade Fixtures; Alterations			9
		10.2		Damage; Removal			10
		10.3		Liens			10
		10.4		Standard of Work			10

11.		USE					10
12.		ENVIRONMENTAL MATTERS					11
		12.1		Hazardous Materials			11
		12.2		Indemnification			11
		12.3		Pre-Existing Conditions			12
13.		DAMAGE AND DESTRUCTION					12
		13.1		Casualty			12
		13.2		Tenant’s Fault			12
		13.3		Uninsured Casualty			13
		13.4		Waiver			13
14.		EMINENT DOMAIN					13
		14.1		Total Condemnation			13
		14.2		Partial Condemnation			13
		14.3		Award			13
		14.4		Temporary Condemnation			13
15.		DEFAULT					14
		15.1		Events of Defaults			14
		15.2		Remedies			14
		15.3		Cumulative			15
16.		ASSIGNMENT AND SUBLETTING					15
17.		ESTOPPEL, ATTORNMENT AND SUBORDINATION					16
		17.1		Estoppel			16
		17.2		Subordination			17
		17.3		Attornment			17
18.		INTENTIONALLY OMITTED					17
19.		MISCELLANEOUS					17
		19.1		General			17
		19.2		Signs			18
		19.3		Waiver			18
		19.4		Financial Statements			18
		19.5		Limitation of Liability			19
		19.6		Notices			19
		19.7		Brokerage Commission			19
		19.8		Authorization			19
		19.9		Holding Over; Surrender			19
		19.10		Joint and Several			20
		19.11		Covenants and Conditions			20
		19.12		Auctions			20
		19.13		Consents			20
		19.14		Force Majeure			20
		19.15		Mortgagee Protection			20
		19.16		Intentionally Omitted			21
		19.17		Hazardous Substance Disclosure			21
		19.18		Addenda			21
		19.19		Condition Precedent to Tenant’s Obligations			21

1. PREMISES

     1.1 Premises . Landlord hereby leases to Tenant the Land and Building depicted on Exhibit A-2 attached hereto (hereinafter collectively referred to as the “Premises”). Tenant acknowledges that, except as set forth in this Lease or in the Work Letter, if any, neither Landlord nor any broker or agent has made any representations or warranties in connection with the physical condition of the Premises or their fitness for Tenant’s use upon which Tenant has relied directly or indirectly for any purpose. By taking possession of the Premises, Tenant accepts the Premises “AS-IS” and waives all claims of defect in the Premises, except as set forth in the Work Letter. Landlord hereby represents and warrants that as of the Commencement Date, the Premises are zoned I-1.

     1.2 Common Area . Tenant may, subject to reasonable rules made by Landlord, use common facilities in the Project (“Common Area”) designated by Landlord from time to time for the common use of all tenants of the Project.

     1.3 Reserved Rights . Landlord reserves the right to enter the Premises at reasonable times upon reasonable notice to Tenant (or without notice in case of an emergency) and/or to undertake the following all without abatement of rent or liability to Tenant: inspect the Premises and/or the performance by Tenant of the terms and conditions hereof; make such alterations, repairs, improvements or additions to the Premises as required or permitted hereunder; change boundary lines of the Common Area; install, use, maintain, repair, alter, relocate or replace any pipes, ducts, conduits, wires, equipment and other facilities (including, without limitation, cabling and conduit for telecommunications facilities of any kind) in the Common Area or the Premises; grant easements on the Project, dedicate for public use portions thereof and record covenants, conditions and restrictions affecting the Project and create, and/or amend CC&Rs which do not unreasonably interfere with Tenant’s use of the Premises or impose additional material monetary obligations on Tenant; affix reasonable signs and displays; and, during the last nine (9) months of the Term, place signs for the rental of, and show the Premises to prospective tenants.

     1.4 Re-measurement of Premises . At Landlord’s option, prior to the delivery of possession of the Premises to Tenant, Landlord shall cause Landlord’s architect to measure and certify in writing to Landlord the rentable square footage of the office portion of the Building and the Building in its entirety (as measured from the exterior drip line of the Building), and if such measurement differs from the rentable square footage of the Building and the office portion of the Building specified below, then all amounts under this Lease calculated on the basis of such rentable square footage (including, without limitation, the Base Rent) shall be adjusted accordingly within thirty (30) days thereafter, retroactive to the Commencement Date. In accordance with the foregoing, Landlord and Tenant acknowledge and agree that the Monthly Base Rent amounts due Landlord hereunder are based upon the Building containing 380,000 rentable square feet of space (5,000 square feet of such area being office space). Therefore, if following the Substantial Completion of the Improvements Landlord determines that the Building’s total square footage and/or the office space located within the Building differs from the square footage stated above, the Monthly Base Rent payable by Tenant to Landlord hereunder shall be adjusted hereunder.

2. TERM

     2.1 Commencement Date . The Term of the Lease shall commence (“ Commencement Date ”) on the date which is the later of (i) March 1, 2009, or (ii) the date of Substantial Completion of the Improvements (as hereinafter defined) in accordance with the Work Letter attached hereto as Addendum 2 (the “Work Letter”), and delivery of possession of such Substantially Completed Premises by Landlord to Tenant, and the Lease shall continue in full force and effect for the period of time specified as the Term or until this Lease is terminated as otherwise provided herein. Tenant shall, upon demand after delivery of the Premises to Tenant, execute and deliver to Landlord a Commencement Date Memorandum in the form attached hereto as Exhibit B acknowledging the Commencement Date, the Monthly Base Rent Schedule for the initial term, the final square footage of the Premises and Tenant’s acceptance of the Premises.

     2.2 Intentionally Omitted.

     2.3 Intentionally Omitted.

     2.4 Early Entry . Subject to the following provisions of this Section 2.4, Tenant shall have the right to enter the Premises for the purpose of installing trade fixtures and equipment within the Premises, and such early entry for such purposes shall not constitute occupancy for operation of Tenant’s business and shall not trigger the Commencement Date. Landlord will sequence construction of the Building to permit Tenant the right of entry on January 1, 2009. Tenant agrees (i) any such early entry by Tenant shall be at Tenant’s sole risk, (ii) Tenant shall not interfere with Landlord or Landlord’s contractors completing work within the Premises or cause any labor difficulties; Tenant, together with its employees, agents and independent contractors will be subject to and will work under the direction of Landlord’s contractor, (iii) Tenant shall comply with and be bound by all provisions of this Lease during the period of any such early entry except for the payment of Rent, (iv) prior to entry upon the Premises by Tenant, Tenant agrees to pay for and provide to Landlord certificates evidencing the existence and amounts of liability insurance carried by Tenant, which coverage must comply with the provisions of this Lease relating to insurance, (v) Tenant and its agents and contractors agree to comply with all applicable laws, regulations, permits and other approvals required to perform its work during the early entry on the Premises, and (vi) Tenant agrees to indemnify, protect, defend and save Landlord and the Premises harmless from and against any and all liens, liabilities, losses, damages, costs, expenses, demands, actions, causes of action and claims (including, without limitation, attorneys’ fees and legal costs) arising out of the early entry, use, construction, or occupancy of the Premises by Tenant or its agents, employees or contractors.

3. RENT

     3.1 Rent . Tenant shall pay to Landlord, at Landlord’s Address for Payment of Rent designated in the Basic Lease Information, or at such other address as Landlord may from time to time designate in writing to Tenant for the payment of Rent, the Base Rent, without notice, demand, offset or deduction (except as otherwise expressly provided in this Lease), in advance, on the first day of each calendar month commencing on the Commencement Date. Landlord shall have no obligation to notify Tenant of any increase in Rent and Tenant’s obligation to pay all Rent (and any increases) when due shall not be modified or altered by such lack of notice from Landlord. It is intended that the Rent to be paid hereunder by Tenant will be received by Landlord without any deduction or offset whatsoever by Tenant, foreseeable or unforeseeable. Except as expressly provided to the contrary in this Lease, Landlord shall not be required to make any expenditure, incur any obligation, or incur any liability of any kind whatsoever in connection with this Lease or the ownership, construction, maintenance, operation or repair of the Premises or the Project. Upon the execution of this Lease, Tenant shall pay to Landlord the first month’s Base Rent. If the Term commences (or ends) on a date other than the first (or last) day of a month, Base Rent shall be prorated on the basis of a thirty (30) day month. All sums other than Base Rent which Tenant is obligated to pay under this Lease shall be deemed to be additional rent due hereunder (“ Additional Rent ”), whether or not such sums are designated Additional Rent and, together with the Base Rent, shall be due and payable, except as otherwise specifically provided herein, to Landlord commencing on the Possession Date. The term “ Rent ” means the Base Rent and all Additional Rent payable hereunder.

     3.2 Late Charge and Interest . The late payment of any Rent will cause Landlord to incur additional costs, including administration and collection costs and processing and accounting expenses and increased debt service (“ Delinquency Costs ”). If Landlord has not received any installment of Rent within five (5) days after such amount is due, (i) Tenant shall pay a late charge of five percent (5%) of the delinquent amount, which is agreed to represent a reasonable estimate of the Delinquency Costs incurred by Landlord, and (ii) all such delinquent amounts shall bear interest from the date such amount was due until paid in full at a rate per annum (“ Applicable Interest Rate ”) equal to the lesser of (a) the maximum interest rate permitted by law or (b) three percent (3%) above the rate publicly announced by Bank of America, N.A. (or if Bank of America, N.A. ceases to exist, the largest bank then headquartered in the State of Oregon) (“ Bank ”) as its “Reference Rate”; provided, however, that, if Tenant has not been delinquent in paying Rent beyond such five (5) day period during the twelve (12) month period immediately preceding the late payment in question, then a late charge shall not be assessed and the Applicable Interest Rate (accruing from the date the payment was due) shall not apply unless Tenant fails to make the applicable payment of Rent within five (5) days after Landlord delivers notice of such delinquency to Tenant, and provided further that such additional notice and cure period shall apply no more than three (3) times during the Term. If the use of the announced Reference Rate is discontinued by the Bank, then the term Reference Rate shall mean the announced rate charged by the Bank which is, from time to time, substituted for the Reference Rate. Landlord and Tenant recognize that the damage which Landlord shall suffer as a result of Tenant’s failure to pay such amounts is difficult to ascertain and said late charge and interest are the best estimate of the damage which Landlord shall suffer in the

event of late payment. If a late charge becomes payable for any three (3) installments of Rent within any twelve (12) month period, then the Rent shall automatically become due and payable quarterly in advance.

     3.3 Security Deposit . One (1) business day after the Commencement Date, Tenant shall pay to Landlord the Security Deposit. The Security Deposit shall secure the full and faithful performance of each provision of this Lease to be performed by Tenant. Landlord shall not be required to pay interest on the Security Deposit or to keep the Security Deposit separate from Landlord’s own funds. If Tenant fails to perform fully and timely all or any of Tenant’s covenants and obligations hereunder, Landlord may, but without obligation, apply all or any portion of the Security Deposit toward fulfillment of Tenant’s unperformed covenants and/or obligations. If Landlord does so apply any portion of the Security Deposit, Tenant shall immediately pay Landlord sufficient cash to restore the Security Deposit to the amount of the then current Base Rent per month. Upon any increase or decrease in Base Rent, Landlord may require the Security Deposit to be increased or decreased by the amount of the adjustment in the per month Base Rent. No later than thirty (30) days after Tenant vacates the Premises, upon the expiration or sooner termination of this Lease, if Tenant is not then in default, Landlord shall return to Tenant any unapplied balance of the Security Deposit.

4.  UTILITIES . Tenant shall pay all charges for heat, water, gas, electricity, telephone and any other utilities used on the Premises by Tenant directly to the applicable utility provider. Landlord shall not be liable to Tenant for interruption in or curtailment of any utility service, nor shall any such interruption or curtailment constitute constructive eviction or grounds for rental abatement. Landlord hereby agrees to use commercially reasonable efforts to restore any interrupted or curtailed services to the extent such interruption or curtailment is caused by Landlord.

5. TAXES

     5.1 Real Property Taxes . Tenant shall pay to Landlord Tenant’s Share of Real Property Taxes (as defined in Section 5.2) as a part of Operating Expenses for each full or partial calendar year during the Lease Term in accordance with the terms and provisions of Section 7.1 below.

     5.2 Definition of Real Property Taxes . “ Real Property Taxes ” shall be the sum of the following: all real property taxes, assessments, supplementary taxes, escape taxes, possessory-interest taxes, business or license taxes or fees, service payments in lieu of such taxes or fees, annual or periodic license or use fees, excises, transit and traffic charges, housing fund assessments, open space charges, childcare fees, school, sewer and parking fees or any other assessments, levies, fees, exactions or charges, general and special, ordinary and extraordinary, unforeseen as well as foreseen (including fees “in-lieu” of any such tax or assessment) which are assessed, levied, charged, conferred or imposed by any public authority upon the Premises or any other improvements located upon the Premises (or any real property comprising any portion thereof) or its operations, together with all taxes, assessments or other fees imposed by any public authority upon or measured by any Rent or other charges payable hereunder, including any gross receipts tax or excise tax levied by any governmental authority with respect to receipt of rental income, or upon, with respect to or by reason of the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof, or documentary transfer taxes upon this transaction or any document to which Tenant is a party creating or transferring an interest in the Premises, together with any tax imposed in substitution, partially or totally, of any tax previously included within the aforesaid definition or any additional tax the nature of which was previously included within the aforesaid definition, together with any and all reasonable costs and expenses (including, without limitation, reasonable attorneys’, administrative and expert witness fees and costs) incurred by Landlord in challenging any of the foregoing or seeking the reduction in or abatement, redemption or return of any of the foregoing, but only to the extent of any such reduction, abatement, redemption or return. Notwithstanding the foregoing, any assessments that may be paid over more than a one (1) year period shall be included in “Real Property Taxes” as if such payments were made in the maximum number of installments permitted by Applicable Laws and only the portion thereof attributable to a given year shall be included in “Real Property Taxes” for that year. All references to Real Property Taxes during a particular year shall be deemed to refer to taxes accrued during such year, including supplemental tax bills regardless of when they are actually assessed and without regard to when such taxes are payable. Real Property Taxes shall expressly include One Hundred Percent (100%) of any increase or supplemental assessments accruing as a result of the construction of the Building, or any other improvements located upon the Premises. In addition to Tenant’s Share of Real Property Taxes (paid as a part of Operating Expenses), Tenant shall pay to Landlord One Hundred Percent

(100%) of any increase in taxes due to the increased assessed value of the Premises directly attributable to the value of any Tenant Improvements (as defined in the Work Letter, if any). The obligation of Tenant to pay Real Property Taxes (including any supplemental taxes) for the last full and/or partial year(s) of the Term shall survive the expiration or early termination of this Lease. In no event shall Tenant or any Tenant Party (as defined in Section 12.1) be entitled to file any property tax assessment appeal. Nothing contained in this Lease shall require Tenant to pay any franchise, corporate, estate or inheritance tax of Landlord, or any income, profits or revenue tax or charge upon the net income of Landlord to the extent attributable to Landlord’s general or net income (as opposed to rents or receipts attributable to operations at the Project). Subject to the terms of this Section 5.2, Real Property Taxes for partial years, if any, falling within the Term shall be prorated.

     5.3 Personal Property Taxes . Prior to delinquency, Tenant shall pay all taxes and assessments levied upon trade fixtures, alterations, additions, improvements, inventories and other personal property located and/or installed on the Premises by Tenant; and Tenant shall provide Landlord copies of receipts for payment of all such taxes and assessments. To the extent any such taxes are not separately assessed or billed to Tenant, Tenant shall pay the amount thereof as invoiced by Landlord.

6. OPERATING EXPENSES

     6.1 Operating Expenses . Tenant shall pay to Landlord Tenant’s Share of the Building Operating Expenses, if any, and Tenant’s Share of Project Operating Expenses for each full or partial calendar year during the Lease Term, as provided in Section 7.1 below. Tenant’s Share of Building Operating Expenses and Tenant’s Share of Project Operating Expenses may be referred to herein collectively as “ Tenant’s Share ”.

     6.2 Definition of Operating Expenses . “ Operating Expenses ” shall mean collectively the “Building Operating Expenses” and the “Project Operating Expenses” as defined in this Section 6.2. The Lease is a single tenant “triple-net” Lease and Tenant shall be responsible to perform and shall have the first opportunity/obligation to perform all repairs and maintenance of the Premises in accordance with Section 9.1 below, subject to Landlord’s responsibility for the maintenance and repair of specific areas of the Premises as specifically set forth in Section 9.2 below. However, in the event Landlord does perform any repair or maintenance items which are Tenant’s responsibility or expends funds for taxes or insurance (or items described in 6.2.1 below), Tenant shall reimburse Landlord as set forth below.

          6.2.1. “ Building Operating Expenses ” means the total costs and expenses incurred by Landlord in the ownership, operation, maintenance, repair and management of the Premises, including, but not limited to: (a) repair, replacement, maintenance, utility costs and landscaping of the Premises, including, but not limited to, any and all costs of maintenance, repair and replacement of all parking areas (including bumpers, sweeping, striping and slurry coating), common driveways, loading and unloading areas, trash areas, outdoor lighting, sidewalks, walkways, landscaping, irrigation systems, fences and gates and other costs which are allocable to the Premises including any costs under the terms of any CC&Rs affecting the real property, (b) non-structural maintenance, repair and replacement of the roof (and roof membrane), skylights and exterior walls of the Building (including painting); (c) commercially reasonable (based upon the standard set forth in Section 8.1 below) insurance deductibles and the costs relating to the insurance maintained by Landlord as described in Section 8.1 below, including, without limitation, Landlord’s cost of any deductible or self insurance retention; (d) maintenance contracts for, and the repair and replacement of, the heating, ventilation and air-conditioning (HVAC) systems and elevators, if any; (e) maintenance, repair, replacement, monitoring and operation of the fire/life safety and sprinkler system (to the extent Landlord is obligated to do so pursuant to Section 9.2); (f) trash collection; (g) capital improvements or capital replacements (excluding the roof structure) made to or capital assets acquired for the Premises after the Commencement Date that are intended to reduce Building Operating Expenses or are reasonably necessary for the health and safety of the occupants of the Building or are required under any governmental law or regulation, which capital costs, or an allocable portion thereof, shall be amortized over the period reasonably determined by Landlord, together with interest on the unamortized balance at the Applicable Interest Rate; (h) intentionally omitted; (i) Real Property Taxes attributable to the Premises; and (j) any other reasonable costs incurred by Landlord related to the Premises and not related to the Project as a whole. Notwithstanding any provision to the contrary contained in this Section 6.2.1, Tenant shall pay to Landlord an amount equal to two percent (2%) of Rent for the costs and fees incurred by Landlord in connection with the management of this Lease and/or the Premises including the cost of those services which are customarily performed by a property management services company, whether performed

internally or through an outside management company. Building Operating Expenses shall not include (i) replacement of or structural repairs to the roof or the exterior walls; (ii) repairs to the extent covered by insurance proceeds, or paid by Tenant or other third parties; (iii) alterations and tenant improvements solely attributable to tenants of the Project other than Tenant; (iv) marketing expenses; (v) any cost or expense associated with compliance with any laws, ordinances, rules or regulations regarding any condition existing upon the Premises if such condition existed prior to the Commencement Date, including, but not limited to removal of any and all asbestos and other toxic and hazardous substances located in the Premises; (vi) items for which Landlord is actually reimbursed from other sources (other than the payment by other tenants of Building Operating Expenses and Project Operating Expenses); (vii) the cost of services sold to other tenants; (viii) legal fees and expenses (except for legal fees and expenses incurred by Landlord in enforcing the Common Area use provisions of other tenants’ leases); (ix) brokers’ fees and other marketing costs with respect to other tenants and/or leases; (x) interest, fees and costs related to financings; (xi) costs incurred in connection with the investigation, reporting, remediation or abatement of any Hazardous Material located (or alleged to be located) in, on, under or about the Project (other than de minimus costs to clean up and/or remove minor oil spills or minor amounts of other Hazardous Materials thereon); (xii) general overhead; (xiii) salaries and expenses for employees at the management level and above except as otherwise provided herein; and (xiv) depreciation.

          6.2.2. Project Operating Expenses . “ Project Operating Expenses ” shall include all reasonable and necessary expenses incurred by Landlord in the ownership, operation, maintenance, repair and management of the Project Common Areas, including, without limitation, Real Property Taxes attributable to the Project Common Areas, except as expressly excluded in Section 6.2.1 above. Tenant has previously received an estimate of the anticipated Project Operating Expenses.

7. ESTIMATED EXPENSES

     7.1 Payment . “ Estimated Expenses ” for any particular year shall mean Landlord’s estimate of Operating Expenses for a calendar year. Tenant shall pay Tenant’s Share of the Estimated Expenses with installments of Base Rent in monthly installments of one-twelfth (1/12 ^th ) thereof on the first day of each calendar month during such year. If at any time Landlord determines that Operating Expenses are projected to vary from the then Estimated Expenses, Landlord may, by notice to Tenant, revise such Estimated Expenses, and Tenant’s monthly installments for the remainder of such year shall be adjusted so that by the end of such calendar year Tenant has paid to Landlord Tenant’s Share of the revised Estimated Expenses for such year.

     7.2 Adjustment . “ Operating Expenses Adjustment ” (or “ Adjustment ”) shall mean the difference between Tenant’s Share of Estimated Expenses and Tenant’s Share of Operating Expenses for any calendar year. After the end of each calendar year, Landlord shall deliver to Tenant a statement of Tenant’s Share of Operating Expenses for such calendar year, accompanied by a computation of the Adjustment. If Tenant’s payments are less than Tenant’s Share, then Tenant shall pay the difference within twenty (20) days after receipt of such statement. Tenant’s obligation to pay such amount shall survive the expiration or termination of this Lease. If Tenant’s payments exceed Tenant’s Share, then (provided that Tenant is not in default) Landlord shall credit such excess amount to future installments of Tenant’s Share for the next calendar year. If Tenant is in default, Landlord may, but shall not be required to, credit such amount to Rent arrearages.

8. INSURANCE

     8.1 Landlord . Landlord shall maintain insurance through individual or blanket policies insuring the Building against fire and extended coverage (including, if Landlord elects, “all risk” coverage, earthquake/volcanic action, flood and/or surface water insurance) for the full replacement cost of the Building, with commercially reasonable deductibles and the form and endorsements of such coverage as selected by Landlord, together with rental abatement insurance against loss of Rent in an amount equal to the amount of Rent for a period of at least twelve (12) months commencing on the date of loss. Landlord may also carry such other insurance as Landlord may deem prudent or advisable, including, without limitation, liability insurance in such amounts and on such commercially reasonable terms as Landlord shall determine. For purposes of this Section 8.1, the “commercially reasonable” standard shall be based upon insurance and deductibles customarily carried or selected by sophisticated, institutional landlords for the protection of such landlords and the protection of properties similar to the Building.

Tenant shall pay to Landlord, as a portion of the Operating Expenses, the costs of the insurance coverages described herein, including, without limitation, Landlord’s cost of any self-insurance deductible or retention.

     8.2 Tenant . Tenant shall, at Tenant’s expense, obtain and keep in force at all times the following insurance:

          8.2.1. Commercial General Liability Insurance (Occurrence Form) . A policy of commercial general liability insurance (occurrence form) having a combined single limit of not less than Two Million Dollars ($2,000,000) per occurrence and Two Million Dollars ($2,000,000) aggregate per location if Tenant has multiple locations, providing coverage for, among other things, blanket contractual liability, premises, products/completed operations with an “Additional Insured-Managers or Lessors of Premises Endorsement” and containing the “Amendment of the Pollution Exclusion Endorsement” for damage caused by heat, smoke or fumes from a hostile fire, and personal and advertising injury coverage, and, if necessary, Tenant shall provide for restoration of the aggregate limit by increasing the aggregate limits of existing policies, obtaining new policies or through umbrella coverage, and provided that the policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an “insured contract” for the performance of Tenant’s indemnity obligations under this Lease;

          8.2.2. Automobile Liability Insurance . Business automobile liability insurance having a combined single limit of not less than Two Million Dollars ($2,000,000) per occurrence and insuring Tenant against liability for claims arising out of ownership, maintenance, or use of any owned, hired or non-owned automobiles;

          8.2.3. Workers’ Compensation and Employer’s Liability Insurance . Workers’ compensation insurance having limits not less than those required by state statute and federal statute, if applicable, and covering all persons employed by Tenant in the conduct of its operations on the Premises (including the all states endorsement and, if applicable, the volunteers endorsement), together with employer’s liability insurance coverage in the amount of at least Five Hundred Thousand Dollars ($500,000); and

          8.2.4. Property Insurance . “All risk” property insurance including boiler and machinery comprehensive form, if applicable, covering damage to or loss of any of Tenant’s personal property, fixtures, equipment and alterations, including electronic data processing equipment (collectively “ Tenant’s Property ”) (and coverage for the full replacement cost thereof including business interruption of Tenant), together with, if the property of Tenant’s invitees, customers, or agents is to be kept in the Premises, warehouser’s legal liability or bailee customers insurance for the full replacement cost of the property belonging to invitees, customers, or agents and located in the Premises; and

          8.2.5. Business Interruption . Loss of income and extra expense insurance in amounts as will reimburse Tenant for direct or indirect loss of earnings attributable to all peril commonly insured against by prudent lessees in the business of Tenant or attributable to prevention of access to the Premises as a result of such perils.

     8.3 General

          8.3.1. Insurance Companies . Insurance required to be maintained by Tenant shall be written by companies licensed to do business in the state in which the Premises are located and having a “ General Policyholders Rating ” of at least “ A — VIII ” (or such higher rating as may be required by a lender having a lien on the Premises) as set forth in the most current issue of “Best’s Insurance Guide.”

          8.3.2. Certificates of Insurance . Tenant shall deliver to Landlord certificates of insurance for all insurance required to be maintained by Tenant in the form of Exhibit C , attached hereto (or in a form acceptable to Landlord in its sole discretion), no later than seven (7) days prior to the date of possession of the Premises. Tenant shall, at least ten (10) days prior to expiration of the policy, furnish Landlord with certificates of renewal or “binders” thereof. Each certificate shall expressly provide that such policies shall not be cancelable or otherwise subject to modification except after thirty (30) days prior written notice to the parties named as additional insureds in this Lease (except in the case of cancellation for nonpayment of premium in which case cancellation shall not take effect until at least ten (10) days’ notice has been given to Landlord). If Tenant fails to maintain any insurance

required in this Lease, Tenant shall be liable for all losses and costs suffered or incurred by Landlord (including litigation costs and attorneys’ fees and expenses) resulting from said failure.

          8.3.3. Additional Insureds . Landlord, Landlord’s lender, if any, and any property management company of Landlord for the Premises shall be named as additional insureds on a form approved by Landlord under all of the policies required by Section 8.2.1. The policies required under Section 8.2.1 shall provide for severability of interest.

          8.3.4. Primary Coverage . All insurance to be maintained by Tenant shall, except for workers’ compensation and employer’s liability insurance, be primary, without right of contribution from insurance of Landlord. Any umbrella liability policy or excess liability policy (which shall be in “following form”) shall provide that if the underlying aggregate is exhausted, the excess coverage will drop down as primary insurance. The limits of insurance maintained by Tenant shall not limit Tenant’s liability under this Lease.

          8.3.5. Waiver of Subrogation . Whenever (a) any loss, cost, damage or expense resulting from fire, explosion or any other casualty is incurred by either Landlord or Tenant or by anyone claiming by, through or under Landlord or Tenant in connection with the Premises, and (b) such party is covered in whole or in part by property insurance (or would have been covered but for such party’s failure to maintain the coverage required in this Section 8) with respect to such loss, cost, damage or expense or as required under this Lease to be self-insured, then the party so insured (or so required) hereby waives (on its own behalf and on behalf of its insurer) any claims against and releases the party from any liability said other party may have on account of such loss, cost, damage or expense. All property insurance which is carried by either party to insure against damage or loss to property shall include provisions denying to each respective insurer rights of subrogation and recovery against the other party. The waiver of subrogation contained in this Section 8.3.5 shall not apply to any casualty which is not covered or required to be covered by the insurance required to be maintained pursuant to this Lease.

          8.3.6. Notification of Incidents . Tenant shall notify Landlord within forty-eight (48) hours after the occurrence of any accidents or incidents in the Premises or the Project which could give rise to a claim under any of the insurance policies required under this Section 8.

     8.4 Indemnity .

          8.4.1. Indemnity by Tenant . Tenant shall indemnify, protect, defend (by counsel reasonably acceptable to Landlord) and hold harmless Landlord and Landlord’s affiliated entities, and each of their respective members, managers, partners, directors, officers, employees, shareholders, lenders, agents, contractors, successors and assigns (collectively, “ Landlord Parties ”) from and against any and all claims, judgments, causes of action, damages, penalties, costs, liabilities, and expenses, including all costs, reasonable attorneys’ fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon (collectively, “ Claims ” or “ Liabilities ”), arising at any time during or after the Term as a result (directly or indirectly) of or in connection with (i) any default in the performance of any obligation on Tenant’s part to be performed under the terms of this Lease, or (ii) Tenant’s use of the Premises, the conduct of Tenant’s business or any activity, work or things done, permitted or suffered by Tenant or any Tenant Party (as defined in Section 12.1) in or about the Premises or other portions of the Project, except to the extent caused by (a) Landlord’s gross negligence or willful misconduct with respect to Claims or Liabilities which are covered under any insurance policy required to be maintained by Tenant under this Lease (or would be covered under such insurance policy if Tenant had maintained the required insurance policy or policies) (collectively, the “ Insurable Risks ”), even though caused or alleged to be caused by the negligence or fault (as opposed to gross negligence or willful misconduct) of Landlord or Landlord Parties (this indemnity is intended to indemnify Landlord and Landlord Parties against the consequences of their own negligence with respect to the Insurable Risks when Landlord or Landlord Parties are jointly, comparatively, contributively, or concurrently negligent with Tenant), or (b) Landlord’s negligence or breach of this Lease with respect to Claims or Liabilities that are not part of the Insurable Risks. The obligations of Tenant under this Section 8.4 shall survive the termination of this Lease with respect to any claims or liability arising prior to such termination.

          8.4.2. Indemnity by Landlord . Landlord shall indemnify, protect, defend (by counsel reasonably acceptable to Tenant) and hold Tenant and Tenant’s affiliated entities, and each of their respective members, managers, partners, directors, officers, employees, shareholders, lenders, agents, contractors, successors

and assigns harmless from and against any and all Claims or Liabilities arising out of or in connection with, but only to the extent of (a) Landlord’s gross negligence or willful misconduct with respect to Claims or Liabilities that are part of Insurable Risks and (b) Landlord’s negligence or breach of this Lease with respect to Claims or Liabilities that are not a part of the Insurable Risks; provided, however, the foregoing indemnity of Landlord shall in no way limit the provisions of Section 19.5 hereof. Landlord’s agreement to indemnify, defend and hold Tenant harmless as provided above is not intended to and shall not relieve any insurance carrier of its obligations under policies required to be carried by Tenant pursuant to the provisions of this Lease to the extent that such policies cover (or, if such policies would have been carried as required, would have covered) Claims or Liabilities incurred as a result of negligent acts or omissions or the willful misconduct of Landlord or those of other Landlord Parties.

     8.5 Exemption of Landlord from Liability . Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to property including, but not limited to, Tenant’s fixtures, equipment, furniture and alterations or illness or injury to persons in, upon or about the Premises or other portions of the Project arising from any cause, and Tenant hereby waives all claims in respect thereof against Landlord, except to the extent caused by (a) Landlord’s gross negligence or willful misconduct with respect to Claims or Liabilities that are part of the Insurable Risks or (b) Landlord’s negligence or breach of this Lease with respect to the Claims or Liabilities that are not part of the Insurable Risks. Tenant hereby agrees that Landlord shall not be liable for injury to Tenant’s business or any loss of income therefrom. Tenant further agrees that Landlord shall not be liable for damage to the property of Tenant, or injury to or illness or death of Tenant or any Tenant Party, or any other person in or about the Premises of the Project, whether such damage, illness or injury is caused by fire, steam, electricity, gas, water or rain, or from the breakage, leakage or other defects of sprinklers, wires, appliances, ventilation, plumbing, air conditioning or lighting fixtures, or from any other cause, and whether said damage, illness or injury results from conditions arising upon the Premises, upon other portions of the Building or from other sources or places, and regardless of whether the cause of such damage, illness or injury or the means of repairing the same is inaccessible to Tenant, except to the extent such damage, illness or injury is caused by (a) Landlord’s gross negligence or willful misconduct with respect to Claims or Liabilities that are part of the Insurable Risks or (b) Landlord’s negligence or breach of this Lease with respect to Claims or Liabilities that are not part of the Insurable Risks. Landlord shall not be liable for any damages arising from any act or neglect of any contractor or other tenant, if any, of the Building or the Project or Landlord’s failure to enforce the terms of any agreements with parties other than Tenant.

9. REPAIRS AND MAINTENANCE

     9.1 Tenant . Tenant, at Tenant’s sole cost and expense, shall keep and maintain the Premises interior and exterior (excluding only replacement of or structural repairs to the roof and other matters that are Landlord’s responsibility pursuant to Section 9.2 below), including, without limitation, exterior painting, parking lot repairs and maintenance, loading docks, roll up doors and ramps, floors, subfloors and floor coverings, walls and wall coverings, doors, windows, glass, plate glass, locks, ceilings, skylights, lighting systems, interior plumbing, electrical and mechanical systems and wiring, appliances and devices using or containing refrigerants, fixtures and equipment in good repair and in a clean and safe condition, and repair and/or replace any and all of the foregoing in a clean and safe condition, in good order, condition and repair. Without limiting the foregoing, Tenant shall, at Tenant’s sole expense, immediately replace all broken glass in the Premises with glass equal to or in excess of the specification and quality of the original glass; and repair any area damaged by Tenant, Tenant’s agents, employees, invitees and visitors, including any damage caused by any roof penetration, whether or not such roof penetration was approved by Landlord. All repairs and replacements by Tenant shall be made and performed: (a) at Tenant’s cost and expense and at such time and in such manner as Landlord may designate, (b) by contractors or mechanics approved by Landlord, (c) so that same shall be at least equal in quality, value and utility to the original work or installation, (d) in a manner and using equipment and materials that will not interfere with or impair the operations, use or occupation of the Building or any of the mechanical, electrical, plumbing or other systems in the Building or the Project, and (e) in accordance with the Rules and Regulations and all Applicable Laws. In the event Tenant fails, in the reasonable judgment of Landlord, to maintain the Premises in accordance with the obligations under the Lease, which failure continues at the end of ten (10) days following Tenant’s receipt of written notice from Landlord stating the nature of the failure, Landlord shall have the right to enter the Premises and perform such maintenance, repairs or refurbishing at Tenant’s sole cost and expense (including a sum for overhead to Landlord equal to ten percent (10%) of the costs of maintenance, repairs or refurbishing). Tenant shall maintain written records of maintenance and repairs, as required by any Applicable Law, and shall use certified technicians to perform such maintenance and repairs, as so required. Tenant shall deliver full and complete copies of all service or maintenance

contracts entered into by Tenant for the Premises to Landlord within one hundred twenty (120) days after the Commencement Date. Landlord agrees to assign to Tenant on a non-exclusive basis the benefit of any equipment warranties for systems installed in the Premises to the extent Tenant is required to maintain and repair such systems pursuant to the terms of this Lease.

     9.2 Landlord . Landlord shall, subject to the following limitations, repair damage to structural portions of the roof, foundation and load-bearing portions of walls (excluding wall coverings, painting, glass and doors) of the Building; provided, if such damage is caused by any act or omission of Tenant, or any Tenant Party, then the cost thereof shall be at Tenant’s sole expense except to the extent such damage is covered or required to be covered by the insurance required under this Lease to be maintained by Landlord (and specifically excluding any amounts payable from the deductible thereunder, which shall be payable by Tenant).

Landlord shall not be required to make any repair resulting from (i) any alteration or modification to the Building or to mechanical equipment within the Building performed by, for or because of Tenant or to special equipment or systems installed by, for or because of Tenant, except as provided in Section 13 of this Lease, (ii) the installation, use or operation of Tenant’s property, fixtures and equipment, (iii) the moving of Tenant’s property in or out of the Building or in and about the Premises, (iv) Tenant’s use or occupancy of the Premises in violation of Section 11 of this Lease or in the manner not contemplated by the parties at the time of the execution of this Lease, (v) the acts or omissions of Tenant or any Tenant Party unless such damage is not covered by the insurance required under this Lease to be maintained by Tenant and is fully covered by the insurance required under this Lease to be maintained by Landlord, (vi) fire and other casualty, except as provided by Section 13 of this Lease or (vii) condemnation, except as provided in Section 14 of this Lease. Landlord shall make repairs under this Section 9.2 within a reasonable time after receipt of written notice from Tenant of the need for such repairs. There shall be no abatement of Rent during the performance of such work. Landlord shall not be liable to Tenant for injury or damage that may result from any defect in the construction or condition of the Premises, nor for any damage that may result from interruption of Tenant’s use of the Premises during any repairs by Landlord. Tenant waives any right to repair the Premises and/or the Project at the expense of Landlord under any Applicable Laws.

10. ALTERATIONS

     10.1 Trade Fixtures; Alterations . Tenant may install necessary trade fixtures, equipment and furniture in the Premises, provided that such items are installed and are removable without structural or material damage to the Premises or the Project. Tenant shall not construct, nor allow to be constructed, any alterations or physical additions in, about or to the Premises (except as provided in the Work Letter) without obtaining the prior written consent of Landlord, which consent shall be conditioned upon Tenant’s compliance with the provisions of Exhibit F and any other applicable reasonable requirements of Landlord regarding construction of improvements and alterations. Tenant shall submit plans and specifications to Landlord with Tenant’s request for approval and shall reimburse Landlord for all costs which Landlord may incur in connection with granting approval to Tenant for any such alterations and additions, including any costs or expenses which Landlord may incur in electing to have outside architects and engineers review said matters. If Landlord does not respond to a written request from Tenant within ten (10) business days, then Landlord shall be deemed to disapprove such request. Notwithstanding the foregoing, Tenant may make alterations to the Premises without Landlord’s consent, provided that the cost of any such alteration does not exceed Twenty-Five Thousand Dollars ($25,000.00) per alteration or Fifty Thousand Dollars ($50,000.00) in the aggregate in any twelve (12) month period, and further provided that such alterations do not (i) require any structural or other substantial modifications to the Premises or the Building, (ii) require any changes to nor adversely affect the systems and equipment of the Building, and (iii) affect the exterior appearance of the Building, and further provided that Tenant shall give Landlord at least fifteen (15) days prior written notice of any such alteration, which notice shall be accompanied by reasonably adequate evidence that such alterations meet the criteria contained in this sentence. In the event Tenant makes any alterations to the Premises that trigger or give rise to a requirement that the Building or the Premises come into compliance with any governmental laws, ordinances, statutes, orders and/or regulations (such as ADA requirements), Tenant shall be fully responsible for complying, at its sole cost and expense, with same. Tenant shall post, record and file a notice of completion after completion of such work and provide Landlord with a copy thereof. Tenant shall provide Landlord with a set of “as-built” drawings for any such work. Notwithstanding anything to the contrary contained herein, Landlord shall cause the Premises to comply as of the date of Substantial Completion of the Improvements (as defined in the Work Letter) of the Premises with the ADA as it exists as of such date.

     10.2 Damage; Removal . Tenant shall repair all damage to the Premises, Building or the Project caused by the installation or removal of Tenant’s fixtures, equipment, furniture or alterations. Upon the termination of this Lease, Tenant shall (if required in writing at the time Landlord consents thereto or, if Landlord’s consent thereto is not required, at the time such items are installed provided that in each such case Tenant requests in writing at the time of Tenant’s request for consent or at the time of installation thereof, as applicable, that Landlord make such a determination) remove any or all trade fixtures, alterations, additions, improvements and partitions made or installed by Tenant, and restore the Premises to its condition existing prior to the construction of any such items; provided, however, Landlord has the absolute right to require Tenant to have all or any portion of such items designated by Landlord other than Tenant’s trade fixtures or other personal property to remain on the Premises, in which event they shall be and become the property of Landlord upon the termination of this Lease. All such removals and restoration shall be accomplished in a good and workmanlike manner and so as not to cause any damage to the Premises or the Project whatsoever.

     10.3 Liens . Tenant shall promptly pay and discharge all claims for labor performed, supplies furnished and services rendered at the request of Tenant and shall keep the Premises free of all mechanics’ and materialmen’s liens in connection therewith. Tenant shall provide at least ten (10) days prior written notice to Landlord before any labor is performed, supplies furnished or services rendered on or at the Premises and Landlord shall have the right to post on the Premises notices of non-responsibility. If any lien is filed, Tenant shall cause such lien to be released and removed (or provide security therefor acceptable to Landlord in Landlord’s sole discretion) within ten (10) days after the date of filing, and if Tenant fails to do so, Landlord may take such action as may be necessary to remove such lien and Tenant shall pay Landlord such amounts expended by Landlord together with interest thereon at the Applicable Interest Rate from the date of expenditure.

     10.4 Standard of Work . All work to be performed by or for Tenant pursuant hereto shall be performed diligently and in a good, workmanlike manner, and in compliance with all Applicable Laws, and/or Tenant and Landlord’s insurance carriers. Landlord shall have the right, but not the obligation, to inspect periodically the work on the Premises and Landlord may require changes in the method or quality of the work.

11. USE . The Premises shall be used only for the Permitted Uses set forth in the Basic Lease Information and for no other uses without Landlord’s prior written consent, not to be unreasonably withheld. Tenant’s use of the Premises shall be in compliance with and subject to all applicable laws, statutes, codes, ordinances, orders, rules, regulations, conditions of approval and requirements of all federal, state, county, municipal and governmental authorities and all administrative or judicial orders or decrees and all permits, licenses, approvals and other entitlements issued by governmental entities, and rules of common law, relating to or affecting the Project, the Premises or the Building or the use or operation thereof, whether now existing or hereafter enacted, including, without limitation, the Americans with Disabilities Act of 12990 42 USC 12111 et seq. (the “ ADA ”), as the same may be amended from time to time, and all Environmental Laws (as defined in Section 12.1). Except as otherwise expressly provided in this Lease, Tenant shall be responsible for obtaining any permit, business license, or other permits or licenses required by any governmental agency permitting Tenant’s use or occupancy of the Premises. In no event shall the Premises be used for any of the Prohibited Uses set forth on Exhibit D attached hereto. Tenant shall comply with the rules and regulations attached hereto as Exhibit E , together with such additional reasonable, non-discriminatory rules and regulations as Landlord may from time to time prescribe. Tenant shall not commit waste, overload the floors or structure of the Building, subject the Premises or the Project to any use which would damage the same or increase the risk of loss or violate any insurance coverage, permit any unreasonable odors, smoke, dust, gas, substances, noise or vibrations to emanate from the Premises, take any action which would constitute a nuisance or would disturb, obstruct or endanger any other tenants, take any action which would abrogate any warranties, or use or allow the Premises to be used for any unlawful purpose. Tenant shall have the right to use for its employees and invitees the parking areas located upon the Premises. Landlord hereby agrees to use commercially reasonable efforts to cause other tenants of the Project to comply with the terms and provisions of their leases, but notwithstanding the foregoing, in no event shall Landlord be responsible for non-compliance by any other tenant or occupant of the Project with, or Landlord’s failure to enforce, any of the rules or regulations or any other terms or provisions of such tenant’s or occupant’s lease, and neither such noncompliance by any such parties nor Landlord’s failure to enforce the same shall constitute a default by Landlord under this Lease or entitle Tenant to any remedies whatsoever against Landlord. Tenant shall promptly comply with the reasonable requirements of any board of fire insurance underwriters or other similar body now or hereafter constituted. Tenant shall not do any act which shall in any way encumber the title of Landlord in and to the Premises, the Building or the Project.

12. ENVIRONMENTAL MATTERS

     12.1 Hazardous Materials . Tenant shall not cause nor permit, nor allow any of Tenant’s employees, agents, customers, visitors, invitees, licensees, contractors, assignees or subtenants (individually, a “ Tenant Party ” and collectively, “ Tenant’s Parties ”) to cause or permit, any Hazardous Materials to be brought upon, stored, manufactured, generated, blended, handled, recycled, treated, disposed or used on, under or about the Premises or the Project, except for routine office and janitorial supplies and fuels and materials to operate forklifts in usual and customary quantities stored, used and disposed of in accordance with all applicable Environmental Laws. As used herein, “ Hazardous Materials ” means any chemical, substance, material, controlled substance, object, condition, waste, living organism or combination thereof, whether solid, semi-solid, liquid or gaseous, which is or may be hazardous to human health or safety or to the environment due to its radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity, infectiousness or other harmful or potentially harmful properties or effects, including, without limitation, tobacco smoke, petroleum and petroleum products, asbestos, radon, polychlorinated biphenyls (PCBs), refrigerants (including those substances defined in the Environmental Protection Agency’s “ Refrigerant Recycling Rule ,” as amended from time to time) and all of those chemicals, substances, materials, controlled substances, objects, conditions, wastes, living organisms or combinations thereof which are now or become in the future listed, defined or regulated in any manner by any Environmental Law based upon, directly or indirectly, such properties or effects. As used herein, “ Environmental Laws ” means any and all federal, state or local environmental, health and/or safety-related laws, regulations, standards, decisions of courts, ordinances, rules, codes, orders, decrees, directives, guidelines, permits or permit conditions, currently existing and as amended, enacted, issued or adopted in the future which are or become applicable to Tenant, the Premises or the Project. Tenant and Tenant’s Parties shall comply with all Environmental Laws in connection with Tenant’s occupancy of the Premises and promptly notify Landlord in writing of the violation of any Environmental Law or presence of any Hazardous Materials, other than office and janitorial supplies as permitted above, in, on, under or about the Premises or the improvements or the soil or groundwater thereunder. Landlord shall have the right to enter upon and inspect the Premises and to conduct tests, monitoring and investigations. If such tests indicate the presence of any environmental condition caused or negligently or willfully exacerbated by Tenant or any Tenant Party, Tenant shall reimburse Landlord for the cost of conducting such tests. The phrase “ environmental condition ” shall mean any adverse condition relating to any Hazardous Materials or the environment, including surface water, groundwater, drinking water supply, land, surface or subsurface strata or the ambient air and includes air, land and water pollutants, noise, vibration, light and odors. In the event of any such environmental condition caused by Tenant or negligently or willfully exacerbated by Tenant or any Tenant Party, Tenant shall promptly take any and all steps necessary to rectify the same to the satisfaction of the applicable agencies and Landlord, or shall, at Landlord’s election, reimburse Landlord, upon demand, for the actual cost to Landlord of performing rectifying work. The reimbursement shall be paid to Landlord in accordance with the progress of the work, based upon Landlord’s actual cost thereof and within ten (10) days of receipt of each periodic invoice from Landlord therefor; and upon completion of such work by Landlord, Tenant shall pay to Landlord any shortfall promptly after receipt of Landlord’s bills therefor or Landlord shall promptly refund to Tenant any excess deposit, as the case may be.

     12.2 Indemnification . Tenant shall indemnify, protect, defend (by counsel acceptable to Landlord) and hold harmless Landlord and Landlord’s affiliated entities, and each of their respective members, managers, partners, directors, officers, employees, shareholders, lenders, agents, contractors, successors and assigns (individually and collectively, “ Indemnitees ”) from and against any and all claims, judgments, causes of action, damages, penalties, fines, taxes, costs, liabilities, losses and expenses arising at any time during or after the Term as a result (directly or indirectly) of or in connection with (a) Tenant and/or any Tenant Party’s breach of this Section 12, or (b) the release of Hazardous Materials on, under or about the Premises or other property as a result (directly or indirectly) of Tenant’s and/or any Tenant Party’s activities, or negligent failure to act, in connection with the Premises. This indemnity shall include, without limitation, the cost of any required or necessary repair, cleanup or detoxification, and the preparation and implementation of any closure, monitoring or other required plans, whether such action is required or necessary prior to or following the termination of this Lease. Neither the written consent by Landlord to the presence of Hazardous Materials on, under or about the Premises, nor the strict compliance by Tenant with all Environmental Laws, shall excuse Tenant from Tenant’s obligation of indemnification pursuant hereto. Tenant’s obligations pursuant to the foregoing indemnity shall survive the expiration or termination of this Lease.

     12.3 Pre-Existing Conditions . Landlord hereby represents to Tenant that, to its actual knowledge, no environmental condition (as defined in Section 12.1) in violation of law presently exists as of the Effective Date on, under, or within the Premises. For purposes of this Lease, current “ actual knowledge ” shall mean the actual, present knowledge of Eric Blount, Scott Hirschman and Lou Berchicci as of the date of this Lease, without investigation or inquiry of any kind.

13. DAMAGE AND DESTRUCTION

     13.1 Casualty . If the Premises or Building should be damaged or destroyed by fire or other casualty, Tenant shall give immediate written notice to Landlord. Within thirty (30) days after receipt from Tenant of such written notice, Landlord shall notify Tenant whether, in Landlord’s reasonable determination, the necessary repairs can reasonably be made: (a) within one hundred eighty (180) days; or (b) in more than one hundred eighty (180) days, in each case after the date Landlord receives notice of such casualty from Tenant.

          13.1.1. Less Than 180 Days . If the Premises or Building should be damaged only to such extent that rebuilding or repairs can reasonably be completed within one hundred eighty (180) days after the date Landlord receives notice of such casualty from Tenant, this Lease shall not terminate and, provided that insurance proceeds are available to fully repair the damage, Landlord shall repair the Premises and the initial Tenant Improvements installed or constructed in the Premises by Landlord pursuant to the Work Letter, except that Landlord shall not be required to rebuild, repair or replace Tenant’s Property which may have been placed in, on or about the Premises by or for the exclusive benefit of Tenant (other than the initial Tenant Improvements installed or constructed in the Premises by Landlord pursuant to the Work Letter). If Tenant is required to vacate all or a portion of the Premises during Landlord’s repair thereof, the Base Rent payable hereunder shall be abated proportionately on the basis of the size of the area of the Premises that is damaged (i.e., the number of square feet of floor area of the Premises that is damaged compared to the total square footage of the floor area of the Premises) from the date Tenant vacates all or a portion of the Premises that was damaged only to the extent rental abatement insurance proceeds are received by Landlord and only during the period the Premises are unfit for occupancy.

          13.1.2. Greater Than 180 Days . If the Premises or Building should be so damaged that rebuilding or repairs cannot be completed within one hundred eighty (180) days after the date Landlord receives notice of such casualty from Tenant, either Landlord or Tenant may terminate this Lease by giving written notice within ten (10) days after notice from Landlord specifying such time period of repair; and this Lease shall terminate and the Rent shall be abated from the date Tenant vacates the Premises. In the event that neither party elects to terminate this Lease, Landlord shall promptly commence and diligently prosecute to completion the repairs to the Building or Premises, provided insurance proceeds are available to repair the damage (except that Landlord shall not be required to rebuild, repair or replace Tenant’s Property which may have been placed in, on or about the Premises by or for the benefit of Tenant other than the initial Tenant Improvements installed or constructed in the Premises by Landlord pursuant to the Work Letter). If Tenant is required to vacate all or a portion of the Premises during Landlord’s repair thereof, the Base Rent payable hereunder shall be abated proportionately on the basis of the size of the area of the Premises that is damaged (i.e., the number of square feet of floor area of the Premises that is damaged compared to the total square footage of the floor area of the Premises), from the date Tenant vacates all or a portion of the Premises that was damaged only to the extent rental abatement insurance proceeds are received by Landlord and only during the period that the Premises are unfit for occupancy.

          13.1.3. Casualty During the Last Year of the Lease Term . Notwithstanding any other provisions hereof, if the Premises or the Building shall be damaged within the last year of the Lease Term, and if the cost to repair or reconstruct the portion of the Building or the Premises which was damaged or destroyed shall exceed $10,000, then, irrespective of the time necessary to complete such repair or reconstruction, Landlord and Tenant shall each have the right, in its sole discretion, to terminate the Lease effective upon the occurrence of such damage, in which event the Rent shall be abated from the date Tenant vacates the Premises. The foregoing right shall be in addition to any other right and option of Landlord and Tenant under this Section 13.

     13.2 Tenant’s Fault . If the Premises or any portion of the Premises is damaged resulting from the negligence or breach of this Lease by Tenant or any of Tenant’s Parties, Rent shall not be reduced during the repair of such damage except to the extent such lost Rent payments are covered by or required to be covered by the insurance required to be maintained by Landlord pursuant to this Lease and Tenant shall be liable to Landlord for

the cost of the repair caused thereby to the extent such cost is not covered by insurance proceeds received by Landlord.

     13.3 Uninsured Casualty . Tenant shall be responsible for and shall pay to Landlord Tenant’s Share of any deductible or retention amount payable under the property insurance for the Premises. In the event that the Premises or any portion of the Premises is damaged to the extent Tenant is unable to use the Premises and such damage is not covered by insurance proceeds received by Landlord (or which would have been received by Landlord had Landlord maintained the insurance required by this Lease to be maintained by Landlord) or in the event that the holder of any indebtedness secured by the Premises requires that the insurance proceeds be applied to such indebtedness, then Landlord shall have the right at Landlord’s option either (i) to repair such damage as soon as reasonably possible at Landlord’s expense, or (ii) to give written notice to Tenant within thirty (30) days after the date of the occurrence of such damage of Landlord’s intention to terminate this Lease as of the date of the occurrence of such damage. In the event Landlord elects to terminate this Lease, Tenant shall have the right within ten (10) days after receipt of such notice to give written notice to Landlord of Tenant’s commitment to pay the cost of repair of such damage, in which event this Lease shall continue in full force and effect, and Landlord shall make such repairs as soon as reasonably possible subject to the following conditions: Tenant shall deposit with Landlord Landlord’s estimated cost of such repairs not later than ten (10) days prior to Landlord’s commencement of the repair work. If the cost of such repairs exceeds the amount deposited, Tenant shall reimburse Landlord for such excess cost within fifteen (15) days after receipt of an invoice from Landlord. Any amount deposited by Tenant in excess of the cost of such repairs shall be refunded within thirty (30) days of Landlord’s final payment to Landlord’s contractor. If Tenant does not give such notice within the ten (10) day period, or fails to make such deposit as required, this Lease shall terminate automatically as of the date of the occurrence of the damage.

     13.4 Waiver . With respect to any damage or destruction which Landlord is obligated to repair or may elect to repair, Tenant waives all rights to terminate this Lease pursuant to rights otherwise presently or hereafter accorded by law.

14. EMINENT DOMAIN

     14.1 Total Condemnation . If all of the Premises is condemned by eminent domain, inversely condemned or sold under threat of condemnation for any public or quasi-public use or purpose (“ Condemned ”), this Lease shall terminate as of the earlier of the date the condemning authority takes title to or possession of the Premises, and Rent shall be adjusted to the date of termination.

     14.2 Partial Condemnation . If any portion of the Premises or the Building is Condemned and Landlord and Tenant determine in their reasonable discretion that such partial condemnation materially impairs Tenant’s ability to use the Premises for Tenant’s business as reasonably determined by Landlord and Tenant, Tenant and Landlord shall each have the option of terminating this Lease as of the earlier of the date title vests in the condemning authority or as of the date an order of immediate possession is issued and Rent shall be adjusted to the date of termination. If Landlord and Tenant determine that such partial condemnation does not materially impair Tenant’s ability to use the Premises for the business of Tenant, Landlord shall promptly restore the Premises to the extent of any condemnation proceeds recovered by Landlord, excluding the portion thereof lost in such condemnation, and this Lease shall continue in full force and effect except that after the date of such title vesting or order of immediate possession Rent shall be adjusted as reasonably determined by Landlord.

     14.3 Award . If the Premises are wholly or partially Condemned, Landlord shall be entitled to the entire award paid for such condemnation, and Tenant waives any claim to any part of the award from Landlord or the condemning authority; provided, however, Tenant shall have the right to recover from the condemning authority such compensation as may be separately awarded to Tenant in connection with costs in removing Tenant’s merchandise, furniture, fixtures, leasehold improvements and equipment to a new location, loss of business and the taking of Tenant’s personal property provided that such award to Tenant does not reduce the amount of the award payable to Landlord. No condemnation of any kind shall be construed to constitute an actual or constructive eviction of Tenant or a breach of any express or implied covenant of quiet enjoyment.

     14.4 Temporary Condemnation . In the event of a temporary condemnation not extending beyond the Term, this Lease shall remain in effect, Tenant shall continue to pay Rent and Tenant shall receive any award made

for such condemnation except damages to any of Landlord’s property. If a temporary condemnation is for a period which extends beyond the Term, this Lease shall terminate as of the date of initial occupancy by the condemning authority and any such award shall be distributed in accordance with the preceding section. If a temporary condemnation remains in effect at the expiration or earlier termination of this Lease, Tenant shall pay Landlord the reasonable cost of performing any obligations required of Tenant with respect to the surrender of the Premises.

15. DEFAULT

     15.1 Events of Defaults . The occurrence of any of the following events shall, at Landlord’s option, constitute an “ Event of Default ”:

          15.1.1. Vacation or abandonment of the Premises for a period of sixty (60) consecutive days and failure to secure the Premises;

          15.1.2. Failure to pay Rent on the date when due and the failure continuing for a period of seven (7) days after such payment is due and notice of such default is given to Tenant, provided such notice shall be in lieu of any notice required by any Applicable Laws;

          15.1.3. Failure to perform Tenant’s covenants and obligations hereunder (except default in the payment of Rent) where such failure continues for a period of thirty (30) days after written notice from Landlord; provided, however, if the nature of the default is such that more than thirty (30) days are reasonably required for its cure, Tenant shall not be deemed to be in default if Tenant commences the cure within such thirty (30) day period and diligently and continuously prosecutes such cure to completion;

          15.1.4. The making of a general assignment by Tenant for the benefit of creditors; the filing of a voluntary petition by Tenant or the filing of an involuntary petition by any of Tenant’s creditors seeking the rehabilitation, liquidation or reorganization of Tenant under any law relating to bankruptcy, insolvency or other relief of debtors and, in the case of an involuntary action, the failure to remove or discharge the same within sixty (60) days of such filing; the appointment of a receiver or other custodian to take possession of substantially all of Tenant’s assets or this leasehold; Tenant’s insolvency or inability to pay Tenant’s debts or failure generally to pay Tenant’s debts when due; any court entering a decree or order directing the winding up or liquidation of Tenant or of substantially all of Tenant’s assets; Tenant taking any action toward the dissolution or winding up of Tenant’s affairs; the cessation or suspension of Tenant’s use of the Premises; or the attachment, execution or other judicial seizure of substantially all of Tenant’s assets or this leasehold; or

          15.1.5. The making of any material misrepresentation or omission by Tenant or any successor in interest of Tenant in any materials delivered by or on behalf of Tenant to Landlord or Landlord’s lender pursuant to this Lease.

     15.2 Remedies

          15.2.1. Termination . In the event of the occurrence of any Event of Default, Landlord shall have the right to give a written termination notice to Tenant (which notice may be the notice given under Section 15.1 above, if applicable, and which notice shall be in lieu of any notice required by any other Applicable Laws and, on the date specified in such notice, this Lease shall terminate unless on or before such date all arrears of Rent and all other sums payable by Tenant under this Lease and all costs and expenses incurred by or on behalf of Landlord hereunder shall have been paid by Tenant and all other Events of Default at the time existing shall have been fully remedied to the satisfaction of Landlord.

                    15.2.1.1 Repossession . Following termination, without prejudice to other remedies Landlord may have, Landlord may (i) peaceably re-enter the Premises upon voluntary surrender by Tenant or remove Tenant therefrom and any other persons occupying the Premises, using such legal proceedings as may be available; (ii) repossess the Premises or relet the Premises or any part thereof for such term (which may be for a term extending beyond the Term), at such rental and upon such other terms and conditions as Landlord in Landlord’s sole

discretion shall determine, with the right to make reasonable alterations and repairs to the Premises; and (iii) remove all personal property therefrom.

                    15.2.1.2 Unpaid Rent . Landlord shall have all the rights and remedies of a landlord provided by Applicable Law, including the right to recover from Tenant but subject to Landlord’s duty to mitigate damages if required by Applicable Laws: (a) the worth, at the time of award, of the unpaid Rent that had been earned at the time of termination, (b) the worth, at the time of award, of the amount by which the unpaid Rent that would have been earned after the date of termination until the time of award exceeds the amount of loss of rent that Tenant proves could have been reasonably avoided, (c) the worth, at the time of award, of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided, and (d) any other amount, and court costs, necessary to compensate Landlord for all detriment proximately caused by Tenant’s default. The phrase “worth, at the time of award,” as used in (a) and (b) above, shall be computed at the Applicable Interest Rate, and as used in (c) above, shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

          15.2.2. Continuation . Even though an Event of Default may have occurred, this Lease shall continue in effect for so long as Landlord does not terminate Tenant’s right to possession; and Landlord may enforce all of Landlord’s rights and remedies under this Lease allowed by law (“lessor” may continue the Lease in effect after “lessee’s” breach and abandonment and recover Rent as it becomes due, if “lessee” has the right to sublet or assign, subject only to reasonable limitations) to recover Rent as it becomes due. Landlord, without terminating this Lease, may, during the period Tenant is in default, enter the Premises and relet the same, or any portion thereof, to third parties for Tenant’s account and Tenant shall be liable to Landlord for all reasonable costs Landlord incurs in reletting the Premises, including, without limitation, brokers’ commissions, expenses of remodeling the Premises and like costs. Reletting may be for a period shorter or longer than the remaining Term. Tenant shall continue to pay the Rent on the date the same is due. No act by Landlord hereunder, including acts of maintenance, preservation or efforts to lease the Premises or the appointment of a receiver upon application of Landlord to protect Landlord’s interest under this Lease, shall terminate this Lease unless Landlord notifies Tenant that Landlord elects to terminate this Lease. In the event that Landlord elects to relet the Premises, the rent that Landlord receives from reletting shall be applied to the payment of, first, any indebtedness from Tenant to Landlord other than Base Rent and Tenant’s Share of Operating Expenses and Real Property Taxes; second, all costs, including maintenance, incurred by Landlord in reletting; and, third, Base Rent and Tenant’s Share of Operating Expenses and Real Property Taxes under this Lease. After deducting the payments referred to above, any sum remaining from the rental Landlord receives from reletting shall be held by Landlord and applied in payment of future Rent as Rent becomes due under this Lease. In no event, and notwithstanding anything in Section 16 to the contrary, shall Tenant be entitled to any excess rent received by Landlord. If, on the date Rent is due under this Lease, the rent received from the reletting is less than the Rent due on that date, Tenant shall pay to Landlord, in addition to the remaining Rent due, all costs, including maintenance, which Landlord incurred in reletting the Premises that remain after applying the rent received from reletting as provided hereinabove. So long as this Lease is not terminated, Landlord shall have the right to remedy any default of Tenant, to maintain or improve the Premises, to cause a receiver to be appointed to administer the Premises and new or existing subleases and to add to the Rent payable hereunder all of Landlord’s reasonable costs in so doing, with interest at the Applicable Interest Rate from the date of such expenditure. Landlord shall have no duty to relet the Premises so long as it has other unleased space available in the Project.

     15.3 Cumulative . Each right and remedy of Landlord provided for herein or now or hereafter existing at law, in equity, by statute or otherwise shall be cumulative and shall not preclude Landlord from exercising any other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity, by statute or otherwise. No payment by Tenant of a lesser amount than the Rent nor any endorsement on any check or letter accompanying any check or payment as Rent shall be deemed an accord and satisfaction of full payment of Rent; and Landlord may accept such payment without prejudice to Landlord’s right to recover the balance of such Rent or to pursue other remedies.

16. ASSIGNMENT AND SUBLETTING . Tenant shall not assign, sublet or otherwise transfer, whether voluntarily or involuntarily or by operation of law, the Premises or any part thereof without Landlord’s prior written approval, which shall not be unreasonably withheld; provided, however, Tenant agrees it shall be reasonable for Landlord to disapprove of a requested assignment, if the proposed assignee does not have a tangible net worth (as

determined in accordance with generally accepted accounting principles consistently applied) equal to or greater than that of Tenant as of the date of the Lease as shown in the financial information provided to Landlord. The merger of Tenant with any other entity or the transfer of any controlling or managing ownership or beneficial interest in Tenant, or the assignment of a substantial portion of the assets of Tenant, whether or not located at the Premises, shall constitute an assignment hereunder. If Tenant desires to assign this Lease or sublet any or all of the Premises, Tenant shall give Landlord written notice thereof with copies of all related documents and agreements associated with the assignment or sublease, including without limitation, the financial statements of any proposed assignee, twenty (20) days prior to the anticipated effective date of the assignment or sublease. Tenant shall pay Landlord’s reasonable attorneys’ fees incurred in the review of such documentation plus an administrative fee of Five Hundred Dollars ($500.00) for each proposed transfer. Landlord shall have a period of fifteen (15) days following receipt of such notice and all related documents and agreements to notify Tenant in writing of Landlord’s approval or disapproval of the proposed assignment or sublease. If Landlord fails to notify Tenant in writing of such election, Landlord shall be deemed to have disapproved such assignment or subletting. This Lease may not be assigned by operation of law. Any purported assignment or subletting contrary to t