EXHIBIT 10.2

SUBLEASE AGREEMENT

This Sublease Agreement (“Sublease”) is entered as of November 13, 2008 (the
“Effective Date”) by and between Russakow, Ryan, & Johnson, a Professional Law
Corporation (“Sublessor”) and BioLargo, Inc., a Delaware corporation
(“Subtenant”). Sublessor and Subtenant may collectively be referred to as the
“Parties.”

WHEREAS, Sublessor entered into a lease agreement dated April 12, 2006 (as
amended April 19, 2007, March 27, 2008 and April 30, 2008), between Sublessor
and Century Centre LLC, a Nevada limited liability company (“Landlord”) for a
term ending on December 31, 2009 (the “Master Lease”), a copy of which attached
hereto as Exhibit A; and

WHEREAS, Sublessor and Subtenant wish to enter into this Sublease.

NOW, THEREFORE, the Parties agree as follows:

PREMISES: Sublessor hereby subleases the premises located at: 2603 Main Street,
Suite 1155, Irvine, Orange County, California (the “Subleased Premises”) to
Subtenant. The parties acknowledge that Sublessor leases from Landlord an
additional suite (Suite 1190) pursuant to the Master Lease, and that the
Subleased Premises do not include Suite 1190.

SUBLEASE TERM: The Sublease will begin on the Effective Date and will continue
on a month-to-month basis (the “Sublease Term”), terminable upon 30 days notice
by either party. The Sublease will automatically terminate upon termination of
the Master Lease.

LEASE PAYMENTS: Subtenant shall pay each month to Sublessor during the Sublease
Term rent (“Rent”) in respect of Subleased Premises consisting of (i) “Base
Rent” in the amount of $7,673.40 per month from the Effective Date through
December 31, 2008 and $6,820.80 per month from January 1, 2009 through
December 1, 2009, (ii) the “Project Operating Costs” in the amount of $67.81 per
month (subject to adjustment pursuant to the terms of the Master Lease), and
(iii) “Parking Charges” in the amount of $225.00 per month (as each of those
terms are defined in the Master Lease). In addition to the Rent, Subtenant shall
pay to Sublessor any additional incidental charges (the “Incidental Charges”)
invoiced by Landlord to Sublessor with respect to the Subleased Premises for
work requested by Subtenant. Subtenant shall pay the Rent and the Incidental
Charges by the 10th business day of each month at the offices of the Sublessor
located at 225 South Lake Avenue, Suite 1000, Pasadena, CA 91101, or at any
other address designated by Sublessor. If the Sublease Term does not start on
the first day of the month or end on the last day of a month, the Rent will be
prorated accordingly.

Subtenant may pay the Rent and Incidental Charges to Sublessor, at Subtenant’s
sole option, in (i) cash or (ii) shares of Subtenant’s common stock, valued at
the average of the closing price for the ten trading days preceding and
including the last day of the preceding month (the “Average Closing Price”). The
number of shares payable in any one month shall be equal to the amount owed to
Sublessor in the particular month divided by the Average Closing Price.
Sublessor will be required to execute additional paperwork (including without
limitation accredited investor representations) and comply with Federal and
applicable state securities laws in the event securities are issued to
Sublessor.

 

 

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LANDLORD’S CONSENT: The Master Lease requires Landlord’s consent to this
Sublease. Attached hereto as Exhibit B is the form of Consent to Sublease (the
“Consent”) to be executed by the Landlord concurrently with the execution of
this Sublease. The parties acknowledge that with respect to the Subleased
Premises, the Consent provides that, in the event Sublessor defaults on the
Master Lease with respect to the Subleased Premises, Landlord may require
Subtenant to pay the Rent due for the Subleased Premises directly to Landlord.
Sublessor agrees that in the event the Landlord so requires, the payment of Rent
directly to Landlord by Subtenant shall not constitute a breach of this
Sublease.

LATE CHARGES: If any amount under this Sublease is more than 10 days late,
Subtenant agrees to pay a late fee of $300,00.

INSUFFICIENT FUNDS: Subtenant agrees to pay the charge of $65.00 for each check
that is returned for lack of sufficient funds.

BUSINESS TAXES: Subtenant shall pay all business taxes in respect of the
business carried on in or upon the Subleased Premises.

SECURITY DEPOSIT: Not required.

QUIET ENJOYMENT: Subtenant shall be entitled to quiet enjoyment of the Subleased
Premises, and neither Sublessor nor Landlord will interfere with that right, as
long as Subtenant pays the Rent in a timely manner and performs all other
obligations under this Sublease.

POSSESSION AND SURRENDER OF PREMISES: Subtenant shall be entitled to possession
of the Subleased Premises on the first day of the Sublease Term. At the
expiration of the Sublease, Subtenant shall peaceably surrender the Subleased
Premises to Sublessor or Sublessor’s agent in good condition, as it was at the
commencement of the Sublease, reasonable wear and tear excepted.

CONDITION OF PREMISES: Subtenant or Subtenant’s agent has inspected the
Subleased Premises, the fixtures, the grounds, building and improvements
(including but not limited to the electrical, HVAC and fire sprinkler systems,
security, environmental aspects, and compliance with the requirements of the
Americans with Disabilities Act) and acknowledges that the Subleased Premises
are in good and acceptable condition and suitable for Subtenant’s intended use.
If at any time during the term of this Sublease, in Subtenant’s opinion, the
conditions change, Subtenant shall promptly provide reasonable notice to
Sublessor.

OBLIGATIONS UNDER MASTER LEASE: Subtenant acknowledges the receipt of a copy of
the Master Lease. Subtenant agrees to abide by all covenants and obligations of
Sublessor in the Master Lease with respect to the Subleased Premises.
Furthermore, Subtenant will avoid actions or inactions that would constitute a
breach or default of Sublessor’s obligations in the Master Lease with respect to
the Subleased Premises.

SEVERABILITY: If any part or parts of this Sublease shall be held unenforceable
for any reason, the remainder of this Sublease shall continue in full force and
effect. If any provision of this Sublease is deemed invalid or unenforceable by
any court of competent jurisdiction, and if limiting such provision would make
the provision valid, then such provision shall be deemed to be construed as so
limited.

 

 

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BINDING EFFECT: The covenants and conditions contained in the Sublease shall
apply to and bind the parties and the heirs, legal representatives, successors
and permitted assigns of the Parties.

ENTIRE AGREEMENT: This Sublease constitutes the entire agreement between the
Parties and supersedes any prior understanding or representation of any kind
preceding the date of this Sublease. There are no other promises, conditions,
understandings or other agreements, whether oral or written, relating to the
subject matter of this Sublease. This Sublease may be modified in writing and
must be signed by both Parties.

GOVERNING LAW: This Sublease shall be governed by and construed in accordance
with the laws of the State of California.

NOTICE: Any notice required or otherwise given pursuant to this Sublease shall
be in writing and mailed certified return receipt requested, postage prepaid, or
delivered by overnight delivery service, if to Subtenant, at the Subleased
Premises and if to Sublessor, to 225 South Lake Avenue, Suite 1000, Pasadena, CA
91101. Either party may change such addresses from time to time by providing
notice as set forth above.

WAIVER: The failure of either party to enforce any provisions of this Sublease
shall not be deemed a waiver or limitation of that party’s right to subsequently
enforce and compel strict compliance with every provision of this Sublease. The
acceptance of rent by Sublessor or Landlord does not waive Sublessor’s right to
enforce any provisions of this Sublease.

LEGAL FEES: In the event of any legal action by the parties arising out of this
Sublease, the losing party shall pay the prevailing party reasonable attorneys’
fees and costs in addition to all other relief.

ADDITIONAL PROVISIONS

The parties have agreed that Sublessor shall have the right, upon reasonable
notice to Subtenant, to meet with clients and potential clients at the Subleased
Premises.

Subtenant shall have the use of Sublessor’s marble conference table and five
(5) brown leather conference chairs for the term of this Sublease; this
furniture shall be delivered to the Subleased Premises at Sublessor’s expense.
Sublessor shall leave at the Subleased Premises for Subtenant’s use the existing
NEC digital phone system and three executive desks.

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

 

SUBLESSOR:    SUBTENANT:

/s/ Mark Russakow

  

/s/ Dennis P. Calvert

Mark Russakow, President    Dennis P. Calvert, President and CEO Russakow,
Ryan & Johnson, a PLC    BioLargo, Inc.

 

 

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EXHIBIT A

MASTER LEASE

 

 

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June 26, 2006

Mr. Mark Russakow, Secretary

RUSSAKOW, RYAN & JOHNSON

225 S. Lake Avenue, 8th Floor

Pasadena, CA 91101

 

RE:    Your lease at:    CENTURY CENTRE   

2603 Main, Suite 1155

Irvine, CA 92614

Dear Mr. Russakow:

Welcome to Century Centre! Enclosed please find a fully executed copy of your
Lease.

By way of introduction, Olen is a commercial real estate development firm with a
current inventory of office, industrial, research and development facilities in
excess of five million square feet. Should you require additional space at any
time, we will be happy to show you other Olen space whenever it is convenient.

I would like to take this opportunity to introduce your Property Manager,
Carolyn McBride, who should be contacted at (949) 474.8300 or by e-mail at
cmcbride@olenproperties.com, at least seventy-two hours prior to your move-in,
so that Olen can schedule supervisory personnel and prepare the existing
elevator for your moving company. In the event you require access to your
Premises for telephone and/or cable installation prior to your move-in date,
please give Carolyn twenty-four hours prior notice to make the necessary
arrangements. As a reminder, the Lessee is responsible for the activity of the
moving company while on the Premises. You may also contact Carolyn regarding any
property management needs that may arise during the course of your lease term.

As a reminder, your next monthly rent payment will be due on August 1, 2006, and
we do not invoice on a monthly basis. Please remit rent payments to: Century
Centre LLC, File 50126, Los Angeles, CA 90074-0126. For billing inquiries,
please contact your accounting representative Kieu-Von Do at 949.719.7241, or by
e-mail at kdo@olenproperties.com.

We at Olen Commercial Realty Corp. look forward to your tenancy. If I may be of
further assistance in the coming months, please do not hesitate to call.

 

Sincerely, OLEN COMMERCIAL REALTY CORP.

/s/ Natalia Olenicoff

Natalia Olenicoff Director, Asset Management

NO/js

Enclosure:            Lease

cc: Mr. Greg Brown, Cushman & Wakefield (with copy of Lease)

Seven Corporate Plaza • Newport Beach, CA 92660

(949) 644-OLEN • Fax (949) 719-7200

www. olenproperties.com

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This Lease between CENTURY CENTRE LLC, A NEVADA LIMITED LIABILITY COMPANY
(“Landlord”), and RUSSAKOW, RYAN & JOHNSON, A PROFESSIONAL LAW CORPORATION
(“Tenant”), is dated April 12, 2006.

1. LEASE OF PREMISES

In consideration of the rent (as defined at Section 5.3) and the provisions of
this Lease, Landlord leases to Tenant and Tenant leases from Landlord the
Premises shown by diagonal lines on the floor plan attached hereto as Exhibit
“A”, and further described at Section 2.1. The Premises are located within the
Building and Project described in Section 2.m. Tenant shall have the
nonexclusive right (unless otherwise provided herein) in common with Landlord,
other tenants, subtenants and invitees, to use of the Common Area (as defined at
Section 2.e).

2. DEFINITIONS

As used in this Lease, the following terms shall have the following meanings:

a. Base Rent (initial): $81,849.60 per year

b. Base year: The calendar year of 2006

c. Broker(s)

 

Landlord’s:    Greg Brown, Cushman & Wakefield Tenant’s:    N/A

d. Commencement Date: July 1, 2006

e. Common Areas: The building lobbies, common corridors and hallways, restrooms,
garage and parking areas, stairways, elevators and other generally understood
public or common areas. Landlord shall have the right to regulate or restrict
the use of the Common Areas.

f. Expiration Date: June 30, 2007 unless otherwise sooner terminated in
accordance with the provisions of this Lease.

 

g. Landlord’s Mailing Address:   Century Centre LLC   7 Corporate Plaza, Newport
Beach, CA 92660      Tenant’s Mailing Address   2603 Main Street, Suite 1155,
Irvine, CA 92614

h. Monthly Installments of Base Rent (Initial): $6,820.80 per month

Rent Payments. Rent payments are due on the first of each month, made payable to
Century Centre LLC

Please remit Rent Payments to: Century Centre LLC

File 50126, Los Angeles, CA 90074-0126.

LANDLORD DOES NOT INVOICE ON A MONTHLY BASIS.

 

i. Security Deposit (Article 7): $6,820.80

 

j. Upon execution hereof Tenant shall pay Landlord $13,641.60; $6,820.80 as
monthly remittance for July 1-31, 2006 and $6,820.80 Security Deposit equal to
the last month’s remittance.

 

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k. Parking: Tenant shall be permitted, upon payment of the then prevailing
monthly rate (as set by Landlord from time to time) to park 4:1,000 cars on a
nonexclusive basis at area(s) designated by Landlord for parking in the
Project’s parking structure. Unreserved parking will be available at $65.00 per
stall, per month, and reserved parking will be available at $125.00 per stall,
per month during the Lease Term. Tenant shall abide by any and all parking
regulations and rules established from time to time by Landlord or Landlord’s
parking operator. Landlord reserves the right to separately charge Tenant’s
guests and visitors for parking, and said parking rates are $1.00 per twenty
minute period with a maximum rate of $10.00 per day with the first fifteen
minutes free. Parking rates are subject to periodic increases with market
parameters. NO OVERNIGHT PARKING SHALL BE ALLOWED; AT LESSOR’S DISCRETION,
VIOLATORS MAY BE TOWED AT VEHICLE OWNER’S EXPENSE.

l. Premises: That portion of the Building containing approximately 2,842 square
feet of Rentable Area, shown by diagonal lines on Exhibit “A”, located on the
eleventh (11th) floor of the Building and known as Suite 1155.

m. Project: The building of which the Premises are a part (the “Building”) and
any other buildings or improvements on the real property (the “Property”)
located at 2603 Main Street, Irvine, CA 92614 and further described on Exhibit
“A”. The Project is known as Century Centre.

n. Rentable Area: As to both the Premises and the Project, the respective
measurements of floor area as may from time to time be subject to lease by
Tenant and all tenants of the Project, respectively, as determined by Landlord
and applied on a consistent basis throughout the Project.

o. State: The State of California.

p. Tenant’s Proportionate Share: Tenant’s Proportionate Share of Building is
1.27% (2603 contains total Rentable Area of 223,782 square feet). Such share is
a fraction, the numerator of which is the Rentable Area of the Premises, and the
denominator of which is the Rentable Area of the Project, as determined by
Landlord from time to time. The Project consists of two (2) building(s)
containing a total Rentable Area of 447,579 square feet.

q. Tenant’s Use Clause (Article 8): General office as approved by the City of
Irvine.

r. Term: The period commencing on the Commencement Date and expiring at midnight
on the Expiration Date.

3. EXHIBITS AND ADDENDA

See Addenda: A, B, C, and Exhibits A, and A-1 attached hereto and made a part
hereof by reference.

4. DELIVERY OF POSSESSION

If for any reason Landlord does not deliver possession of the Premises to Tenant
on the Commencement Date, Landlord shall not be subject to any liability for
such failure, the Expiration Date shall not change and the validity of this
Lease shall not be Impaired, but Rent shall be abated until delivery of
possession. If Landlord permits Tenant to enter into possession of the Premises
before the Commencement Date, such possession shall be subject to the provisions
of this Lease, including, without limitation, the payment of Rent.

5. RENT

5.1. Payment of Base Rent. Tenant agrees to pay the Base Rent for the Premises.
Monthly Installments of Base Rent shall be payable in advance on the first day
of each calendar month of the Term. If the Term begins (or ends) on other than
the first (or last) day of a calendar month, the Base Rent for the partial month
shall be prorated on a per diem basis. Tenant shall pay Landlord the first
Monthly Installment of Base Rent when Tenant executes the Lease.

 

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5.2. Project Operating Costs

a. In order that the Rent payable during the Term reflect any increase in
Project Operating Costs, Tenant agrees to pay to Landlord as Rent, Tenant’s
Proportionate Share of all increases in costs, expenses and obligations
attributable to the Project and its operation, all as provided below.

b. If, during any calendar year during the Term, Project Operating Costs exceed
the Project Operating Costs for the Base Year, Tenant shall pay to Landlord. In
addition to the Base Rent and all other payments due under this Lease, an amount
equal to Tenant’s Proportionate Share of such excess Project Operating Costs in
accordance with the provisions of this Section 5.2b.

(1) The term “Project Operating Costs” shall include all those items described
in the following subparagraphs (a) and (b).

(a) All taxes, assessments, water and sewer charges and other similar
governmental charges levied on or attributable to the Building or Project or
their operation, including without limitation, (i) real property taxes or
assessments levied or assessed against the Building or Project, (ii) assessments
or charges levied or assessed against the Building or Project by any
redevelopment agency, (iii) any tax measured by gross rentals received from the
leasing of the Premises, Building or Project, excluding any net income,
franchise, capital stock, estate or inheritance taxes imposed by the State or
Federal government or their agencies, branches or departments; provided that if
at any time during the Term any governmental entity levies, assesses or imposes
on Landlord any (1) general or special, ad valorem or specific, excise, capital
levy or other tax, assessment, levy or charge directly on the Rent received
under this Lease or on the rent received under any other leases of space in the
Building or Project, or (2) any license fee, excise or franchise tax,
assessment, levy or charge measured by or based, in whole or in part, upon such
rent, or (3) any transfer, transaction, or similar tax, assessment, levy or
charge based directly or indirectly upon the transaction represented by this
Lease or such other leases, or (4) any occupancy, use, per capita or other tax,
assessment, levy or charge based directly or indirectly upon the use or
occupancy of the Premises or other premises within the Building or Project, then
any such taxes, assessments, levies and charges shall be deemed to be included
in the term Project Operating Costs. If at any time during the Term the assessed
valuation of, or taxes on, the Project are not based on a completed Project
having at least ninety-five percent (95%) of the Rentable Area occupied, then
the “taxes” component of Project Operating Costs shall be adjusted by Landlord
to reasonably approximate the taxes which would have been payable if the Project
were completed and at least ninety-five percent (95%) occupied.

(b) Operating costs incurred by Landlord in maintaining and operating the
Building and Project, including without limitation the following: costs of
(1) utilities; (2) supplies; (3) insurance (including public liability, property
damage, earthquake, and fire and extended coverage insurance for the full
replacement cost of the Building and Project as required by Landlord or its
lenders for the Project); (4) services of independent contractors;
(5) compensation (including employment taxes and fringe benefits) of all persons
who perform duties connected with the operation, maintenance, repair or overhaul
of the Building or Project, and equipment, improvements and facilities located
within the Project, including without limitation engineers, janitors, painters,
floor waxers, window washers, security and parking personnel and gardeners (but
excluding persons performing services not uniformly available to or performed
for substantially all Building or Project tenants); (6) operation and
maintenance of a room for delivery and distribution of mail to tenants of the
Building or Project as required by the U.S. Postal Service (including, without
limitation, an amount equal to the fair market rental value of the mail room
premises); (7) management of the Building or Project, whether managed by
Landlord or an independent contractor (including, without limitation, an amount
equal to the fair market value of any on-site manager’s office; (8) rental
expenses for (or a reasonable depreciation allowance on) personal property used
in the maintenance, operation or repair of the Building or Project; (9) costs,
expenditures or charges (whether capitalized or not) required by any
governmental or quasi-governmental authority; (10) amortization of capital
expenses (including financing costs) (i) required by a governmental entity for
energy conservation or life safety purposes, or (ii) made by Landlord to reduce
Project Operating Costs; and (11) any other costs or expenses incurred by
Landlord under this Lease and not otherwise reimbursed by tenants of the
Project. If at any time during the Term, less than ninety-five percent (95%) of
the Rentable Area of the Project is occupied, the “operating costs” component of
Project Operating Costs shall be adjusted by Landlord to reasonably approximate
the operating costs which would have been incurred if the Project had been at
least ninety-five percent (95%) occupied.

(2) Tenant’s Proportionate Share of Project Operating Costs shall be payable by
Tenant to Landlord as follows:

(a) Beginning with the calendar year following the Base Year and for each
calendar year thereafter (“Comparison Year”), Tenant shall pay Landlord an
amount equal to Tenant’s Proportionate Share of the Project Operating Costs
incurred by Landlord in the Comparison Year which exceeds the total amount of
Project Operating Costs payable by Landlord for the Base Year. This excess is
referred to as the “Excess Expenses”.

(b) To provide for current payments of Excess Expenses, Tenant shall, at
Landlord’s request, pay as additional rent during each Comparison Year, an
amount equal to Tenant’s Proportionate Share of the Excess Expenses payable
during such Comparison Year, as estimated by Landlord from time to time. Such
payments shall be made in monthly installments, commencing on the first day of
the

 

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month following the month in which Landlord notifies Tenant of the amount it is
to pay hereunder and continuing until the first day of the month following the
month in which Landlord gives Tenant a new notice of estimated Excess Expenses.
It is the intention hereunder to estimate from time to time the amount of the
Excess Expenses for each Comparison Year and Tenant’s Proportionate Share
thereof, and then to make an adjustment in the following year based on the
actual Excess Expenses incurred for that Comparison Year.

(c) On or before April 1 of each Comparison Year after the first Comparison Year
(or as soon thereafter as is practical), Landlord shall deliver to Tenant a
statement setting forth Tenant’s Proportionate Share of the Excess Expenses for
the preceding Comparison Year. If Tenant’s Proportionate Share of the actual
Excess Expenses for the previous Comparison Year exceeds the total of the
estimated monthly payments made by Tenant for such year, Tenant shall pay
Landlord the amount of the deficiency within ten (10) days of the receipt of the
statement. If such total exceeds Tenant’s Proportionate Share of the actual
Excess Expenses for such Comparison Year, then Landlord shall credit against
Tenant’s next ensuing monthly installment(s) of additional rent an amount equal
to the difference until the credit is exhausted. If a credit is due from
Landlord on the Expiration Date, Landlord shall pay Tenant the amount of the
credit. The obligations of Tenant and Landlord to make payments required under
this Section 5.2 shall survive the Expiration Date.

(d) Tenant’s Proportionate Share of Excess Expenses in any Comparison Year
having less than 365 days shall be appropriately prorated.

(e) If any dispute arises as to the amount of any additional rent due hereunder,
Tenant shall have the right after reasonable notice and at reasonable times to
inspect Landlord’s accounting records at Landlord’s accounting office and, if
after such inspection Tenant still disputes the amount of additional rent owed,
a certification as to the proper amount shall be made by Landlord’s certified
public accountant, which certification shall be final and conclusive. Tenant
agrees to pay the cost of such certification unless it is determined that
Landlord’s original statement overstated Project Operating Costs by more than
five percent (5%).

5.3. Definition of Rent. All costs and expenses which Tenant assumes or agrees
to pay Landlord under this Lease shall be deemed additional rent (which,
together with the Base Rent is sometimes referred to as the “Rent”). The Rent
shall be paid to the Building manager (or other person) and at such place, as
Landlord may from time to time designate in writing, without any prior demand
therefor and without deduction or offset, in lawful money of the United States
of America.

5.4 Rent Control. If the amount of Rent or any other payment due under this
Lease violates the terms of any governmental restrictions on such Rent or
payment, then the Rent or payment due during the period of such restrictions
shall be the maximum amount allowable under those restrictions. Upon termination
of the restrictions, Landlord shall, to the extent it is legally permitted,
recover from Tenant the difference between the amounts received during the
period of the restrictions and the amounts Landlord would have received had
there been no restrictions.

5.5 Taxes Payable by Tenant. In addition to the Rent and any other charges to be
paid by Tenant hereunder, Tenant shall reimburse Landlord upon demand for any
and all taxes payable by Landlord (other than net income taxes) which are not
otherwise reimbursable under this Lease, whether or not now customary or within
the contemplation of the parties, where such taxes are upon, measured by or
reasonably attributable to (a) the cost or value of Tenant’s equipment,
furniture, fixtures and other personal property located in the Premises, or the
cost or value of any leasehold improvements made in or to the Premises by or for
Tenant, other than Building Standard Work made by Landlord, regardless of
whether title to such improvements is held by Tenant or Landlord; (b) the gross
or net Rent payable under this Lease, including, without limitation, any rental
or gross receipts tax levied by any taxing authority with respect to the receipt
of the Rent hereunder; (c) the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; or (d) this transaction or any document to which Tenant is
a party creating or transferring an interest or an estate in the Premises. If it
becomes unlawful for Tenant to reimburse Landlord for any costs as required
under this Lease, the Base Rent shall be revised to net Landlord the same net
Rent after imposition of any tax or other charge upon Landlord as would have
been payable to Landlord but for the reimbursement being unlawful.

6. INTEREST AND LATE CHARGES

If Tenant fails to pay when due any Rent or other amounts or charges which
Tenant is obligated to pay under the terms of this Lease, the unpaid amounts
shall bear interest at the maximum rate then allowed by law. Tenant acknowledges
that the late payment of any Monthly Installment of Base Rent will cause
Landlord to lose the use of that money and incur costs and expenses not
contemplated under this Lease, including without limitation, administrative and
collection costs and processing and accounting expenses, the exact amount of
which is extremely difficult to ascertain. Therefore, in addition to interest,
if any such installment is not received by Landlord within ten (10) days from
the date it is due, Tenant shall pay Landlord a late charge equal to ten percent
(10%) of such installment. Landlord and Tenant agree that this late charge
represents a reasonable estimate of such costs and expenses and is fair
compensation to Landlord for the loss suffered from such nonpayment by Tenant.
Acceptance of any interest or late charge shall not constitute a waiver of
Tenant’s default with respect to such nonpayment by Tenant nor prevent Landlord
from exercising any other rights or remedies available to Landlord under this
Lease.

 

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7. SECURITY DEPOSIT

Tenant agrees to deposit with Landlord the Security Deposit set forth at Article
2.1 upon execution of this Lease, as security for Tenant’s faithful performance
of its obligations under this Lease. Landlord and Tenant agree that the Security
Deposit may be commingled with funds of Landlord and Landlord shall have no
obligation or liability for payment of interest on such Deposit. Tenant shall
not mortgage, assign, transfer or encumber the Security Deposit without the
prior written consent of Landlord and any attempt by Tenant to do so shall be
void, without force or effect and shall not be binding upon Landlord. If Tenant
fails to pay any Rent or other amount when due and payable under this Lease, or
falls to perform any of the terms hereof, Landlord may appropriate and apply or
use all or any portion of the Security Deposit for rent payments or any other
amount then due and unpaid, for payment of any amount for which Landlord has
become obligated as a result of Tenant’s default or breach, and for any loss or
damage (including, but not limited to, past or future rent) sustained by
Landlord as a result of Tenant’s default or breach, and Landlord may so apply or
use this deposit without prejudice to any other remedy Landlord may have by
reason of Tenant’s default or breach. If Landlord so uses any of the Security
Deposit, Tenant shall, within ten (10) days after written demand therefor,
restore the Security Deposit to the full amount originally deposited: Tenant’s
failure to do so shall constitute an act of default hereunder and Landlord shall
have the right to exercise any remedy provided for at Article 27 hereof. Within
fifteen (15) days after the Term (or any extension thereof) has expired or
Tenant has vacated the Premises, whichever shall last occur, and provided Tenant
is not then in default on any of its obligations hereunder, Landlord shall
return the Security Deposit to Tenant, or, if Tenant has assigned its interest
under this Lease, to the last assignee of Tenant. If Landlord sells its interest
in the Premises, Landlord may deliver this deposit to the purchaser of
Landlord’s interest and thereupon be relieved of any further liability or
obligation with respect to the Security Deposit. Tenant hereby expressly waives
any and all rights it may have with respect to a security deposit under
California Civil Code Section 1950.7(c), or any similar, related or successor
provision of law.

NOTE: Security Deposit shall not be applied toward the last month’s rent. In no
event shall the Security Deposit on hand be less than an amount equal to the
then last month’s rent.

8. TENANT’S USE OF THE PREMISES

Tenant shall use the Premises solely for the purposes set forth in Tenant’s Use
Clause. Tenant shall not use or occupy the Premises in violation of law or any
covenant, condition, or restriction affecting the Building or Project or the
certificate of occupancy issued for the Building or Project, and shall, upon
notice from Landlord, immediately discontinue any use of the Premises which is
declared by any governmental authority having jurisdiction to be a violation of
law or the certificate of occupancy. Tenant, at Tenant’s own expense, shall
comply with all laws, ordinances, regulations, rules and/or any directions of
any governmental agencies or authorities having jurisdiction which shall, by
reason of the nature of Tenant’s use or occupancy of the Premises, impose any
duty upon Tenant or Landlord with respect to the Premises or its use or
occupation. A judgment of any court of competent jurisdiction or the admission
by Tenant in any action or proceeding against Tenant that Tenant has violated
any such laws, ordinances, regulations, rules and/or directions in the use of
the Premises shall be deemed to be a conclusive determination of that fact as
between Landlord and Tenant. Tenant shall not do or permit to be done anything
which will invalidate or increase the cost of any fire, extended coverage or
other insurance policy covering the Building or Project and/or property located
therein, and shall comply with all rules, orders, regulations, requirements and
recommendations of the Insurance Services Office or any other organization
performing a similar function. Tenant shall promptly upon demand reimburse
Landlord for any additional premium charged for such policy by reason of
Tenant’s failure to comply with the provisions of this Article. Tenant shall not
do or permit anything to be done in or about the Premises which will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Building or Project, or injure or annoy them, or use or allow the Premises to be
used for any improper, immoral, unlawful or objectionable purpose, nor shall
Tenant cause, maintain or permit any nuisance in, on or about the Premises.
Tenant shall not commit or suffer to be committed any waste in or upon the
Premises.

9. SERVICES AND UTILITIES

Provided that Tenant is not in default hereunder, Landlord agrees to furnish to
the Premises during generally recognized business days, and during hours
determined by Landlord in its sole discretion (currently Monday through Friday
8:00 a.m. to 6:00 p.m., excepting nationally recognized holidays, and Saturdays
from 8:00 a.m. to 1:00 p.m.), and subject to the Rules and Regulations of the
Building or Project, electricity for normal desk top office equipment and normal
copying equipment, and heating, ventilation and air conditioning (“HVAC”) as
required in Landlord’s judgment for the comfortable use and occupancy of the
Premises. If Tenant desires HVAC at any other time, Landlord shall use
reasonable efforts to furnish such service upon reasonable notice from Tenant
and Tenant shall pay Landlord’s charges therefor on demand (currently $45.00 per
hour). Landlord shall also maintain and keep lighted the common stairs, common
entries and restrooms in the Building. Landlord shall not be in default
hereunder or be liable for any damages directly or indirectly resulting from,
nor shall the Rent be abated by reason of (i) the installation, use or
interruption of use

 

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of any equipment in connection with the furnishing of any of the foregoing
services, (ii) failure to furnish or delay in furnishing any such services where
such failure or delay is caused by accident or any condition or event beyond the
reasonable control of Landlord, or by the making of necessary repairs or
improvements to the Premises. Building or Project, or (iii) the limitation,
curtailment or rationing of, or restrictions on, use of water, electricity, gas
or any other form of energy serving the Premises, Building or Project. Landlord
shall not be liable under any circumstances for a loss of or injury to property
or business, however occurring, through or in connection with or incidental to
failure to furnish any such services. If Tenant uses heat generating machines or
equipment in the Premises which affect the temperature otherwise maintained by
the HVAC system. Landlord reserves the right to install supplementary air
conditioning units in the Premises and the cost thereof, including the cost of
installation, operation and maintenance thereof, shall be paid by Tenant to
Landlord upon demand by Landlord.

Tenant shall not, without the written consent of Landlord, use any apparatus or
device in the Premises, including without limitation, electronic data processing
machines, punch card machines or machines using in excess of 120 volts, which
consumes more electricity than is usually furnished or supplied for the use of
premises as general office space, as determined by Landlord. Tenant shall not
connect any apparatus with electric current except through existing electrical
outlets in the Premises. Tenant shall not consume water or electric current in
excess of that usually furnished or supplied for the use of premises as general
office space (as determined by Landlord), without first procuring the written
consent of Landlord, which Landlord may refuse, and in the event of consent.
Landlord may have installed a water meter or electrical current meter in the
Premises to measure the amount of water or electrical current consumed. The cost
of any such meter and of its Installation, maintenance and repair shall be paid
for by the Tenant and Tenant agrees to pay to Landlord promptly upon demand for
all such water and electric current consumed as shown by said meters, at the
rates charged for such services by the local public utility plus any additional
expense incurred in keeping account of the water and electric current so
consumed. If a separate meter is not installed, the excess cost for such water
and electric current shall be established by an estimate made by a utility
company or electrical engineer hired by Landlord at Tenant’s expense.

Nothing contained in this Article shall restrict Landlord’s right to require at
any time separate metering of utilities furnished to the Premises. In the event
utilities are separately metered, Tenant shall pay promptly upon demand for all
utilities consumed at utility rates charged by the local public utility plus any
additional expense incurred by Landlord in keeping account of the utilities so
consumed. Tenant shall be responsible for the maintenance and repair of any such
meters at its sole cost.

Landlord shall furnish elevator service, lighting replacement for building
standard lights, restroom supplies, window washing and janitor services in a
manner that such services are customarily furnished to comparable office
buildings in the area.

10. CONDITION OF THE PREMISES

Tenant’s taking possession of the Premises shall be deemed conclusive evidence
that as of the date of taking possession the Premises are in good order and
satisfactory condition, except for such matters as to which Tenant gave Landlord
notice on or before the Commencement Date. No promise of Landlord to alter,
remodel, repair or improve the Premises, the Building or the Project and no
representation, express or implied, respecting any matter or thing relating to
the Premises, Building, Project or this Lease (including, without limitation,
the condition of the Premises, the Building or the Project) have been made to
Tenant by Landlord or its Broker or Sales Agent, other than as may be contained
herein or in a separate exhibit or addendum signed by Landlord and Tenant.

11. CONSTRUCTION, REPAIRS AND MAINTENANCE

a. Landlord’s Obligations. Landlord shall maintain in good order, condition and
repair the Building and all other portions of the Premises not the obligation of
Tenant or of any other tenant in the Building.

b. Tenant’s Obligations

(1) Tenant at Tenant’s sole expense shall, except for services furnished by
Landlord pursuant to Article 9 hereof, maintain the Premises in good order,
condition and repair, including the interior surfaces of the ceilings, walls and
floors, all doors, all interior windows, all plumbing, pipes and fixtures,
electrical wiring, switches and fixtures, Building Standard furnishings and
special items and equipment installed by or at the expense of Tenant.

(2) Tenant shall be responsible for all repairs and alterations in and to the
Premises, Building and Project and the facilities and systems thereof, the need
for which arises out of (i) Tenant’s use or occupancy of the Premises, (ii) the
installation, removal, use or operation of Tenant’s Property (as defined in
Article 13) in the Premises, (iii) the moving of Tenant’s Property into or out
of the Building, or (iv) the act, omission, misuse or negligence of Tenant, its
agents, contractors, employees or invitees.

 

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(3) If Tenant fails to maintain the Premises in good order, condition and
repair, Landlord shall give Tenant notice to do such acts as are reasonably
required to so maintain the Premises. If Tenant fails to promptly commence such
work and diligently prosecute it to completion, then Landlord shall have the
right to do such acts and expend such funds at the expense of Tenant as are
reasonably required to perform such work. Any amount so expended by Landlord
shall be paid by Tenant promptly after demand with interest at the prime
commercial rate then being charged by Bank of America NT & SA plus two percent
(2%) per annum, from the date of such work, but not to exceed the maximum rate
then allowed by law. Landlord shall have no liability to Tenant for any damage,
inconvenience, or interference with the use of the Premises by Tenant as a
result of performing any such work.

c. Compliance with Law. Landlord and Tenant shall each do all acts required to
comply with all applicable laws, ordinances, and rules of any public authority
relating to their respective maintenance obligations as set forth herein.

d. Waiver by Tenant. Tenant expressly waives the benefits of any statute now or
hereafter in effect which would otherwise afford the Tenant the right to make
repairs at Landlord’s expense or to terminate this Lease because of Landlord’s
failure to keep the Premises in good order, condition and repair.

e. Load and Equipment Limits. Tenant shall not place a load upon any floor of
the Premises which exceeds the load per square foot which such floor was
designed to carry, as determined by Landlord or Landlord’s structural engineer.
The cost of any such determination made by Landlord’s structural engineer shall
be paid for by Tenant upon demand. Tenant shall not install business machines or
mechanical equipment which cause noise or vibration to such a degree as to be
objectionable to Landlord or other Building tenants.

f. Except as otherwise expressly provided in this Lease, Landlord shall have no
liability to Tenant nor shall Tenant’s obligations under this Lease be reduced
or abated in any manner whatsoever by reason of any inconvenience, annoyance,
interruption or injury to business arising from Landlord’s making any repairs or
changes which Landlord is required or permitted by this Lease or by any other
tenant’s lease or required by law to make in or to any portion of the Project,
Building or the premises. Landlord shall nevertheless use reasonable efforts to
minimize any interference with Tenant’s business in the Premises.

g. Tenant shall give Landlord prompt notice of any damage to or defective
condition in any part or appurtenance of the Building’s mechanical, electrical,
plumbing, HVAC or other systems serving, located in, or passing through the
Premises.

h. Upon the expiration or earlier termination of this Lease, Tenant shall return
the Premises to Landlord clean and in the same condition as on the date Tenant
took possession, except for normal wear and tear. Any damage to the Premises,
including any structural damage, resulting from Tenant’s use or from the removal
of Tenant’s fixtures, furnishings and equipment pursuant to Section 13b shall be
repaired by Tenant at Tenant’s expense.

12. ALTERATIONS AND ADDITIONS

a. Tenant shall not make any additions, alterations or improvements to the
Premises without obtaining the prior written consent of Landlord. Landlord’s
consent may be conditioned on Tenant’s removing any such additions, alterations
or improvements upon the expiration of the Term and restoring the Premises to
the same condition as on the date Tenant took possession. All work with respect
to any addition, alteration or improvement shall be done in a good and
workmanlike manner by properly qualified and licensed personnel approved by
Landlord, and such work shall be diligently prosecuted to completion. Landlord
may, at Landlord’s option, require that any such work be performed by Landlord’s
contractor, in which case the cost of such work shall be paid for before
commencement of the work. Tenant shall pay to Landlord upon completion of any
such work by Landlord’s contractor, an administrative fee of fifteen percent
(15%) of the cost of the work.

b. Tenant shall pay the costs of any work done on the Premises pursuant to
Section 12a, and shall keep the Premises, Building and Project free and clear of
liens of any kind. Tenant shall indemnify, defend against and keep Landlord free
and harmless from all liability, loss, damage, costs, attorneys’ fees and any
other expense incurred on account of claims by any person performing work or
furnishing materials or supplies for Tenant or any person claiming under Tenant.

Tenant shall keep Tenant’s leasehold interest, and any additions or improvements
which are or become the property of Landlord under this Lease, free and clear of
all attachment or judgment liens. Before the actual commencement of any work for
which a claim or lien may by filed, Tenant shall give Landlord notice of the
intended commencement date a sufficient time before that date to enable Landlord
to post notices of non-responsibility or any other notices which Landlord deems
necessary for the proper protection of Landlord’s interest in the Premises,
Building or the Project, and Landlord shall have the right to enter the Premises
and post such notices at any reasonable time.

c. Landlord may require, at Landlord’s sole option, that Tenant provide to
Landlord, at Tenant’s expense, a lien and completion bond in an amount equal to
at least one and one-half (1 1/2) times the total estimated cost of any
additions, alterations or improvements to be made in or to the Premises, to
protect Landlord against any liability for mechanic’s and materialmen’s liens
and to insure timely completion of the work. Nothing contained in this
Section 12c shall relieve Tenant of its obligation under Section 12b to keep the
Premises, Building and Project free of all liens.

 

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d. Unless their removal is required by Landlord as provided in Section 12a, all
additions, alterations and improvements made to the Premises shall become the
property of Landlord and be surrendered with the Premises upon the expiration of
the Term; provided, however, Tenant’s equipment, machinery and trade fixtures
which can be removed without damage to the Premises shall remain the property of
Tenant and may be removed, subject to the provisions of Section 13b.

13. LEASEHOLD IMPROVEMENTS; TENANT’S PROPERTY

a. All fixtures, equipment, improvements and appurtenances attached to or built
into the Premises at the commencement of or during the Term, whether or not by
or at the expense of Tenant (“Leasehold Improvements”), shall be and remain a
part of the Premises, shall be the property of Landlord and shall not be removed
by Tenant, except as expressly provided in Section 13b.

b. All movable partitions, business and trade fixtures, machinery and equipment,
communications equipment and office equipment located in the Premises and
acquired by or for the account of Tenant, without expense to Landlord, which can
be removed without structural damage to the Building, and all furniture,
furnishings and other articles of movable personal property owned by Tenant and
located in the Premises (collectively “Tenant’s Property”) shall be and shall
remain the property of Tenant and may be removed by Tenant at any time during
the Term; provided that if any of Tenant’s Property is removed, Tenant shall
promptly repair any damage to the Premises or to the Building resulting from
such removal.

14. RULES AND REGULATIONS

Tenant agrees to comply with (and cause its agents, contractors, employees and
invitees to comply with) the rules and regulations attached hereto as Addendum B
and with such reasonable modifications thereof and additions thereto as Landlord
may from time to time make. Landlord shall not be responsible for any violation
of said rules and regulations by other tenants or occupants of the Building or
Project.

15. CERTAIN RIGHTS RESERVED BY LANDLORD

Landlord reserves the following rights, exercisable without liability to Tenant
for (a) damage or injury to property, person or business, (b) causing an actual
or constructive eviction from the Premises, or (c) disturbing Tenant’s use or
possession of the Premises:

a. To name the Building and Project and to change the name or street address of
the Building or Project;

b. To install and maintain all signs on the exterior and interior of the
Building and Project;

c. To have pass keys to the Premises and all doors within the Premises,
excluding Tenant’s vaults and safes:

d. At any time during the Term, and on reasonable prior notice to Tenant, to
inspect the Premises, and to show the Premises to any prospective purchaser or
mortgagee of the Project, or to any assignee of any mortgage on the Project, or
to others having an interest in the Project or Landlord, and during the last six
months of the Term, to show the Premises to prospective tenants thereof; and

e. To enter the Premises, for the purpose of making inspections, repairs,
alterations, additions or improvements to the Premises of the Building
(including, without limitation, checking, calibrating, adjusting or balancing
controls and other parts of the HVAC system), and to take all steps as may be
necessary or desirable for the safety, protection, maintenance or preservation
of the Premises or the Building or Landlord’s interest therein, or as may be
necessary or desirable for the operation or improvement of the Building or in
order to comply with laws, orders or requirements of governmental or other
authority. Landlord agrees to use its best efforts (except in an emergency) to
minimize interference with Tenant’s business in the Premises in the course of
any such entry.

16. ASSIGNMENT AND SUBLETTING

No assignment of this Lease or sublease of all or any part of the Premises shall
be permitted, except as provided in this Article 16.

a. Tenant shall not, without the prior written consent of Landlord, assign or
hypothecate this Lease or any interest herein or sublet the Premises or any part
thereof, or permit the use of the Premises by any party other than Tenant. Any
of the foregoing acts without such consent shall be void and shall, at the
option of Landlord, terminate this Lease. This Lease shall not, nor shall any
interest of Tenant herein, be assignable by operation of law without the written
consent of Landlord.

 

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b. If at any time or from time to time during the Term Tenant desires to assign
this Lease or sublet all or any part of the Premises, Tenant shall give notice
to Landlord setting forth the terms and provisions of the proposed assignment or
sublease, and the identity of the proposed assignee or subtenant. Tenant shall
promptly supply Landlord with such information concerning the business
background and financial condition of such proposed assignee or subtenant as
Landlord may reasonably request. Landlord shall have the option, exercisable by
notice given to Tenant within twenty (20) days after Tenant’s notice is given,
either to sublet such space from Tenant at the rental and on the other terms set
forth in this Lease for the term set forth in Tenant’s notice, or, in the case
of an assignment, to terminate this Lease. If Landlord does not exercise such
option, Tenant may assign the Lease or sublet such space to such proposed
assignee or subtenant on the following further conditions:

(1) Landlord shall have the right to approve such proposed assignee or
subtenant, which approval shall not be unreasonably withheld;

(2) The assignment or sublease shall be on the same terms set forth in the
notice given to Landlord;

(3) No assignment or sublease shall be valid and no assignee or sublessee shall
take possession of the Premises until an executed counterpart of such assignment
or sublease has been delivered to Landlord;

(4) No assignee or sublessee shall have a further right to assign or sublet
except on the terms herein contained; and

(5) Any sums or other economic consideration received by Tenant as a result of
such assignment or subletting, however denominated under the assignment or
sublease, which exceed, in the aggregate, (i) the total sums which Tenant is
obligated to pay Landlord under this Lease (prorated to reflect obligations
allocable to any portion of the Premises subleased), plus (ii) any real estate
brokerage commissions or fees payable in connection with such assignment or
subletting, shall be paid to Landlord as additional rent under this Lease
without affecting or reducing any other obligations of Tenant hereunder.

c. Notwithstanding the provisions of paragraphs a and b above, Tenant may assign
this Lease or sublet the Premises or any portion thereof, without Landlord’s
consent and without extending any recapture or termination option to Landlord,
to any corporation which controls, is controlled by or is under common control
with Tenant, or to any corporation resulting from a merger or consolidation with
Tenant, or to any person or entity which acquires all the assets of Tenant’s
business as a going concern, provided that (i) the assignee or sublessee
assumes, in full, the obligations of Tenant under this Lease, (ii) Tenant
remains fully liable under this Lease, and (iii) the use of the Premises under
Article 8 remains unchanged.

d. No subletting or assignment shall release Tenant of Tenant’s obligations
under this Lease or alter the primary liability of Tenant to pay the Rent and to
perform all other obligations to be performed by Tenant hereunder. The
acceptance of Rent by Landlord from any other person shall not be deemed to be a
waiver by Landlord of any provision hereof. Consent to one assignment or
subletting shall not be deemed consent to any subsequent assignment or
subletting. In the event of default by an assignee or subtenant of Tenant or any
successor of Tenant in the performance of any of the terms hereof, Landlord may
proceed directly against Tenant without the necessity of exhausting remedies
against such assignee, subtenant or successor. Landlord may consent to
subsequent assignments of the Lease or sublettings or amendments or
modifications to the Lease with assignees of Tenant, without notifying Tenant,
or any successor of Tenant, and without obtaining its or their consent thereto
and any such actions shall not relieve Tenant of liability under this Lease.

e. If Tenant assigns the Lease or sublets the Premises or requests the consent
of Landlord to any assignment or subletting or if Tenant requests the consent of
Landlord for any act that Tenant proposes to do then Tenant shall, upon demand,
pay Landlord an administrative fee of One Hundred Fifty and No/100ths Dollars
($150.00) plus any attorneys’ fees reasonably incurred by Landlord in connection
with such act or request.

17. HOLDING OVER

If after expiration of the Term, Tenant remains in possession of the Premises
with Landlord’s permission (express or implied). Tenant shall become a tenant
from month to month only, upon all the provisions of this Lease (except as to
term and Base Rent), but the “Monthly Installments of Base Rent” payable by
Tenant shall be increased to one hundred fifty percent (150%) of the Monthly
Installments of Base Rent payable by Tenant at the expiration of the Term. Such
monthly rent shall be payable in advance on or before the first day of each
month. If either party desires to terminate such month to month tenancy, it
shall give the other party not less than thirty (30) days advance written notice
of the date of termination.

 

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18. SURRENDER OF PREMISES

a. Tenant shall peaceably surrender the Premises to Landlord on the Expiration
Date, in broom-clean condition and in as good condition as when Tenant took
possession, except for (i) reasonable wear and tear, (ii) loss by fire or other
casualty, and (iii) loss by condemnation. Tenant shall, on Landlord’s request,
remove Tenant’s Property on or before the Expiration Date and promptly repair
all damage to the Premises or Building caused by such removal.

b. If Tenant abandons or surrenders the Premises, or is dispossessed by process
of law or otherwise, any of Tenant’s Property left on the Premises shall be
deemed to be abandoned, and, at Landlord’s option, title shall pass to Landlord
under this Lease as by a bill of sale. If Landlord elects to remove all or any
part of such Tenant’s Property, the cost of removal, including repairing any
damage to the Premises or Building caused by such removal, shall be paid by
Tenant. On the Expiration Date Tenant shall surrender all keys to the Premises.

19. DESTRUCTION OR DAMAGE

a. If the Premises or the portion of the Building necessary for Tenant’s
occupancy is damaged by fire, earthquake, act of God, the elements or other
casualty, Landlord shall, subject to the provisions of this Article, promptly
repair the damage, if such repairs can, in Landlord’s opinion, be completed
within ninety (90) days. If Landlord determines that repairs can be completed
within ninety (90) days, this Lease shall remain in full force and effect,
except that if such damage is not the result of the negligence or willful
misconduct of Tenant or Tenant’s agents, employees, contractors, licensees or
invitees, the Base Rent shall be abated to the extent Tenant’s use of the
Premises is impaired, commencing with the date of damage and continuing until
completion of the repairs required of Landlord under Section 19d.

b. If in Landlord’s opinion, such repairs to the Premises or portion of the
Building necessary for Tenant’s occupancy cannot be completed within ninety
(90) days, Landlord may elect upon notice to Tenant given within thirty
(30) days after the date of such fire or other casualty, to repair such damage,
in which event this Lease shall continue in full force and effect, but the Base
Rent shall be partially abated as provided in Section 19a. If Landlord does not
so elect to make such repairs, this Lease shall terminate as of the date of such
fire or other casualty.

c. If any other portion of the Building or Project is totally destroyed or
damaged to the extent that in Landlord’s opinion repair thereof cannot be
completed within ninety (90) days, Landlord may elect upon notice to Tenant
given within thirty (30) days after the date of such fire or other casualty, to
repair such damage, in which event this Lease shall continue in full force and
effect, but the Base Rent shall be partially abated as provided in Section 19a.
If Landlord does not elect to make such repairs, this Lease shall terminate as
of the date of such fire or other casualty.

d. If the Premises are to be repaired under this Article, Landlord shall repair
at its cost any injury or damage to the Building and Building Standard Work in
the Premises. Tenant shall be responsible at its sole cost and expense for the
repair, restoration and replacement of any other Leasehold improvements and
Tenant’s Property. Landlord shall not be liable for any loss of business,
inconvenience or annoyance arising from any repair or restoration of any portion
of the Premises, Building or Project as a result of any damage from fire or
other casualty.

e. This Lease shall be considered an express agreement governing any case of
damage to or destruction of the Premises, Building or Project by fire or other
casualty, and any present or future law which purports to govern the rights of
Landlord and Tenant in such circumstances in the absence of express agreement,
shall have no application.

20. EMINENT DOMAIN

a. If the whole of the Building or Premises is lawfully taken by condemnation or
in any other manner for any public or quasi-public purpose, this Lease shall
terminate as of the date of such taking, and Rent shall be prorated to such
date. If less than the whole of the Building or Premises is so taken, this Lease
shall be unaffected by such taking, provided that (i) Tenant shall have the
right to terminate this Lease by notice to Landlord given within ninety
(90) days after the date of such taking if twenty percent (20%) or more of the
Premises is taken and the remaining area of the Premises is not reasonably
sufficient for Tenant to continue operation of its business, and (ii) Landlord
shall have the right to terminate this Lease by notice to Tenant given within
ninety (90) days after the date of such taking. If either Landlord or Tenant so
elects to terminate this Lease, the Lease shall terminate on the thirtieth
(30th) day after either such notice. The Rent shall be prorated to the date of
termination. If this Lease continues in force upon such partial taking, the Base
Rent and Tenant’s Proportionate Share shall be equitably adjusted according to
the remaining Rentable Area of the Premises and Project.

b. In the event of any taking, partial or whole, all of the proceeds of any
award, judgment or settlement payable by the condemning authority shall be the
exclusive property of Landlord, and Tenant hereby assigns to Landlord all of its
right, title and interest in any award, judgment or settlement from the
condemning authority. Tenant, however, shall have the right, to the extent that
Landlord’s award is not reduced or prejudiced, to claim from the condemning
authority (but not from Landlord) such compensation as may be recoverable by
Tenant in its own right for relocation expenses and damage to Tenant’s personal
property.

 

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c. In the event of a partial taking of the Premises which does not result in a
termination of this Lease, Landlord shall restore the remaining portion of the
Premises as nearly as practicable to its condition prior to the condemnation or
taking, but only to the extent of Building Standard Work. Tenant shall be
responsible at its sole cost and expense for the repair, restoration and
replacement of any other Leasehold Improvements and Tenant’s Property.

21. INDEMNIFICATION

a. Tenant shall indemnify and hold Landlord harmless against and from liability
and claims of any kind for loss or damage to property of Tenant or any other
person, or for any injury to or death of any person, arising out of:
(1) Tenant’s use and occupancy of the Premises, or any work, activity or other
things allowed or suffered by Tenant to be done in, on or about the Premises;
(2) any breach or default by Tenant of any of Tenant’s obligations under this
Lease; or (3) any negligent or otherwise tortious act or omission of Tenant, its
agents, employees, invitees or contractors. Tenant shall at Tenant’s expense,
and by counsel satisfactory to Landlord, defend Landlord in any action or
proceeding arising from any such claim and shall indemnify Landlord against all
costs, attorneys’ fees, expert witness fees and any other expenses incurred in
such action or proceeding. As a material part of the consideration for
Landlord’s execution of this Lease, Tenant hereby assumes all risk of damage or
injury to any person or property in, on or about the Premises from any cause.

b. Landlord shall not be liable for injury or damage which may be sustained by
the person or property of Tenant, its employees, invitees or customers, or any
other person in or about the Premises, caused by or resulting from fire, steam,
electricity, gas, water or rain which may leak or flow from or into any part of
the Premises, or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, whether such damage or injury results from conditions arising upon the
Premises or upon other portions of the Building or Project or from other
sources. Landlord shall not be liable for any damages arising from any act or
omission of any other tenant of the Building or Project.

22. TENANT’S INSURANCE

a. All insurance required to be carried by Tenant hereunder shall be issued by
responsible insurance companies acceptable to Landlord and Landlord’s lender and
qualified to do business in the State. Each policy shall name Landlord, and at
Landlord’s request any mortgagee of Landlord or other entities (i.e. management
companies), as an additional insured, as their respective interests may appear.
Each policy shall contain (i) a cross-liability endorsement, (ii) a provision
that such policy and the coverage evidenced thereby shall be primary and
non-contributing with respect to any policies carried by Landlord and that any
coverage carried by Landlord shall be excess insurance, and (iii) a waiver by
the insurer of any right of subrogation against Landlord, its agents, employees
and representatives, which arises or might arise by reason of any payment under
such policy or by reason of any act or omission of Landlord, its agents,
employees or representatives. A copy of each paid up policy (authenticated by
the insurer) or certificate of the insurer evidencing the existence and amount
of each insurance policy required hereunder shall be delivered to Landlord
before the date Tenant is first given the right of possession of the Premises,
and thereafter within thirty (30) days after any demand by Landlord therefor.
Landlord may, at any time and from time to time, inspect and/or copy any
insurance policies required to be maintained by Tenant hereunder. No such policy
shall be cancelable except after twenty (20) days written notice to Landlord and
Landlord’s lender. Tenant shall furnish Landlord with renewals or “binders” of
any such policy at least ten (10) days prior to the expiration thereof. Tenant
agrees that if Tenant does not take out and maintain such insurance, Landlord
may (but shall not be required to) procure said insurance on Tenant’s behalf and
charge the Tenant the premiums together with a twenty-five percent
(25%) handling charge, payable upon demand. Tenant shall have the right to
provide such insurance coverage pursuant to blanket policies obtained by the
Tenant, provided such blanket policies expressly afford coverage to the
Premises, Landlord, Landlord’s mortgagee and Tenant as required by this Lease.

b. Beginning on the date Tenant is given access to the Premises for any purpose
and continuing until expiration of the Term, Tenant shall procure, pay for and
maintain in effect policies of casualty insurance covering (i) all Leasehold
improvements (including any alterations, additions or improvements as may be
made by Tenant pursuant to the provisions of Article 12 hereof), and (ii) trade
fixtures, merchandise and other personal property from time to time in, on or
about the Premises, in an amount not less than one hundred percent (100%) of
their actual replacement cost from time to time, providing protection against
any peril included with the classification “Fire and Extended Coverage” together
with insurance against sprinkler damage, vandalism and malicious mischief. The
proceeds of such insurance shall be used for the repair or replacement of the
property so insured. Upon termination of this Lease following a casualty as set
forth herein, the proceeds under (i) shall be paid to Landlord, and the proceeds
under (ii) above shall be paid to Tenant.

c. Beginning on the date Tenant is given access to the Premises for any purpose
and continuing until expiration of the Term, Tenant shall procure, pay for and
maintain in effect workers’ compensation insurance as required by law and
comprehensive public liability and property damage insurance with respect to the
construction of improvements on the Premises, the use, operation or condition of

 

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the Premises and the operations of Tenant in, on or about the Premises,
providing personal injury and broad form property damage coverage for not less
than One Million Dollars ($1,000,000.00) combined single limit for bodily
injury, death and property damage liability.

d. Not less than every three (3) years during the Term, Landlord and Tenant
shall mutually agree to increases in all of Tenant’s insurance policy limits for
all insurance to be carried by Tenant as set forth in this Article. In the event
Landlord and Tenant cannot mutually agree upon the amounts of said increases,
then Tenant agrees that all insurance policy limits as set forth in this Article
shall be adjusted for increases in the cost of living.

23. WAIVER OF SUBROGATION

Landlord and Tenant each hereby waive all rights of recovery against the other
and against the officers, employees, agents and representatives of the other, on
account of loss by or damage to the waiving party of its property or the
property of others under its control, to the extent that such loss or damage is
insured against under any fire and extended coverage insurance policy which
either may have in force at the time of the loss or damage. Tenant shall, upon
obtaining the policies of insurance required under this Lease, give notice to
its insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease.

24. SUBORDINATION AND ATTORNMENT

This Lease and Tenant’s interests and rights hereunder are and shall be subject
and subordinate at all times to the lien of any mortgage, now existing or
hereafter created, on or against the Project, the Building or the Premises by
Landlord, and all amendments, restatements, renewals, modifications,
consolidations, refinancings, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant. Tenant agrees
upon demand to execute, acknowledge and deliver such instruments and other
documents confirming such subordination as shall be requested by any such holder
and Tenant hereby appoints Landlord as Tenant’s attorney-in-fact to execute any
such instruments and other documents for and on behalf of Tenant. In the event
of the enforcement by any mortgagee or holder of any security agreement
(“Successor Landlord”) of the remedies provided for by law, mortgage, or
security agreement, Tenant will automatically become the tenant of such
Successor Landlord without any change in the terms or other provisions of the
Lease; provided, however, that such Successor Landlord or successor in interest
shall not be bound by (a) any payment of Base Rent or Additional Rent for more
than one (1) month in advance except prepayments in the nature of security for
the performance by Tenant of its obligations under this Lease, (b) any amendment
or modification of this Lease, or any waiver of the terms of this Lease, made
without the written consent of such Successor Landlord, (c) any offset right
that Tenant may have against any former Landlord relating to any event or
occurrence before the date of attornment, including any claim for damages of any
kind whatsoever as the result of any breach by a former Landlord that occurred
before the date of attornment; (d) any obligation (i) to pay Tenant any sum(s)
that any former Landlord owed to Tenant unless such sums, If any, shall have
actually been delivered to Successor Landlord by way of an assumption of escrow
accounts or otherwise; (ii) with respect to any security deposited with a former
Landlord, unless such security was actually delivered to such Successor
Landlord; (iii) to commence or complete any initial construction of improvements
in the Premises or any expansion or rehabilitation of existing improvements
thereon; (iv) to reconstruct or repair improvements following a fire, casualty
or condemnation; or (v) arising from representations and warranties related to a
former Landlord; or (e) any consensual or negotiated surrender, cancellation, or
termination of this Lease. In whole or in part, agreed upon between former
Landlord and Tenant, unless effected unilaterally by Tenant pursuant to the
express terms of this Lease or consented to in writing by Successor Landlord.
Upon request by such Successor Landlord, whether before or after the enforcement
of its remedies, Tenant shall execute and deliver an instrument or instruments
confirming and evidencing the attornment herein set forth, and Tenant hereby
Irrevocably appoints Landlord as Tenant’s agent and attorney-in-fact for the
purpose of executing, acknowledging and delivering any such Instruments and
certificates. This Lease is further subject to and subordinate to all matters of
record. Notwithstanding the foregoing, any such holder may at any time
subordinate its mortgage to this Lease, without Tenant’s consent, by written
notice to Tenant and thereupon this Lease shall be deemed prior to such mortgage
without regard to their respective dates of execution, delivery or recording,
and in that event, such holder shall have the same rights with respect to this
Lease as though this Lease had been executed prior to the execution, delivery
and recording of such mortgage and had been assigned to such holder. The term
“mortgage” whenever used in this Lease shall be deemed to include deeds of
trust, mortgages, security deeds, security assignments and any other instrument
which creates a lien. Any reference to the “holder” of such mortgage shall be
deemed to include the beneficiary under a deed of trust.

25. TENANT ESTOPPEL CERTIFICATES

Within ten (10) days after written request from Landlord, or Landlord’s
designee, Tenant shall execute and deliver to Landlord, Landlord’s designee or
the holder of any mortgage, a written statement certifying (a) that this Lease
is unmodified and in full force and effect, or is in full force and effect as
modified and stating the modifications; (b) the amount of Base Rent and the date
to which Base Rent and additional rent have been paid in advance; (c) the amount
of any security deposited with Landlord; (d) that Landlord is not in default
hereunder or, if Landlord is claimed to be in default, stating the nature of any
claimed default; and (e) such other

 

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matters relating to this Lease as may be reasonably requested by Landlord or the
holder of a mortgage. Any such statement may be relied upon by a purchaser,
assignee, lender, the holder of a mortgage and its successors and/or assigns.
Tenant’s failure to execute and deliver such statement within the time required
shall at Landlord’s election be a default under this Lease and shall also be
conclusive upon Tenant that: (1) this Lease is in full force and effect and has
not been modified except as represented by Landlord; (2) there are no uncured
defaults in Landlord’s performance and that Tenant has no right of offset,
counter-claim or deduction against Rent; and (3) not more than one month’s Rent
has been paid in advance.

26. TRANSFER OF LANDLORD’S INTEREST

In the event of any sale or transfer by Landlord of the Premises, Building or
Project, and assignment of this Lease by Landlord, Landlord shall be and is
hereby entirely freed and relieved of any and all liability and obligations
contained in or derived from this Lease arising out of any act, occurrence or
omission relating to the Premises, Building, Project or Lease occurring after
the consummation of such sale or transfer, providing the purchaser shall
expressly assume all of the covenants and obligations of Landlord under this
Lease. If any security deposit or prepaid Rent has been paid by Tenant, Landlord
may transfer the security deposit or prepaid Rent to Landlord’s successor and
upon such transfer, Landlord shall be relieved of any and all further liability
with respect thereto.

27. DEFAULT

27.1. Tenant’s Default. The occurrence of any one or more of the following
events shall constitute a default and breach of this Lease by Tenant:

a. If Tenant abandons or vacates the Premises accompanied by non-payment of
Rent; or

b. If Tenant fails to pay any Rent or any other charges required to be paid by
Tenant under this Lease and such failure continues for five (5) days after such
payment is due and payable; or

c. If Tenant fails to promptly and fully perform any other covenant, condition
or agreement contained in this Lease and such failure continues for thirty
(30) days after written notice thereof from Landlord to Tenant; or

d. If a writ of attachment or execution is levied on this Lease or on any of
Tenant’s Property; or

e. If Tenant makes a general assignment for the benefit of creditors, or
provides for an arrangement, composition, extension or adjustment with its
creditors; or

f. If Tenant files a voluntary petition for relief or if a petition against
Tenant in a proceeding under the federal bankruptcy laws or other insolvency
laws is filed and not withdrawn or dismissed within forty-five (45) days
thereafter, or if under the provisions of any law providing for reorganization
or winding up of corporations, any court of competent jurisdiction assumes
jurisdiction, custody or control of Tenant or any substantial part of its
property and such jurisdiction, custody or control remains in force
unrelinquished, unstayed unterminated for a period of forty-five (45) days; or

g. If in any proceeding or action in which Tenant is a party, a trustee,
receiver, agent or custodian is appointed to take charge of the Premises or
Tenant’s Property (or has the authority to do so) for the purpose of enforcing a
lien against the Premises or Tenant’s Property; or

h. If Tenant is a partnership or consists of more than one (1) person or entity,
if any partner of the partnership or other person or entity is involved in any
of the acts or events described in subparagraphs d through g above.

27.2. Remedies. In the event of Tenant’s default hereunder, then in addition to
any other rights or remedies Landlord may have under any law, Landlord shall
have the right, at Landlord’s option, without further notice or demand of any
kind to do the following:

a. Terminate this Lease and Tenant’s right to possession of the Premises and
reenter the Premises and take possession thereof, and Tenant shall have no
further claim to the Premises or under this Lease; or

b. Continue this Lease in effect, reenter and occupy the Premises for the
account of Tenant, and collect any unpaid Rent or other charges which have or
thereafter become due and payable; or

c. Reenter the Premises under the provisions of subparagraph b, and thereafter
elect to terminate this Lease and Tenant’s right to possession of the Premises.

 

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If Landlord reenters the Premises under the provisions of subparagraphs b or c
above, Landlord shall not be deemed to have terminated this Lease or the
obligation of Tenant to pay any Rent or other charges thereafter occurring,
unless Landlord notifies Tenant in writing of Landlord’s election to terminate
this Lease. In the event of any reentry or retaking of possession by Landlord,
Landlord shall have the right, but not the obligation, to remove all or any part
of Tenant’s Property in the Premises and to place such property in storage at a
public warehouse at the expense and risk of Tenant. If Landlord elects to relet
the Premises for the account of Tenant, the rent received by Landlord from such
reletting shall be applied as follows: first, to the payment of any indebtedness
other than Rent due hereunder from Tenant to Landlord; second, to the payment of
any costs of such reletting; third, to the payment of the cost of any
alterations or repairs to the Premises; fourth, to the payment of Rent due and
unpaid hereunder; and the balance, if any, shall be held by Landlord and applied
in payment of future Rent as it becomes due. If that portion of rent received
from the reletting which is applied against the Rent due hereunder is less than
the amount of the Rent due, Tenant shall pay the deficiency to Landlord promptly
upon demand by Landlord. Such deficiency shall be calculated and paid monthly.
Tenant shall also pay to Landlord, as soon as determined, any costs and expenses
incurred by Landlord in connection with such reletting or in making alterations
and repairs to the Premises, which are not covered by the rent received from the
reletting.

Should Landlord elect to terminate this Lease under the provisions of
subparagraph a or c above, Landlord may recover as damages from Tenant the
following:

1. Past Rent. The worth at the time of the award of any unpaid Rent which had
been earned at the time of termination; plus

2. Rent Prior to Award. The worth at the time of the award of the amount by
which the unpaid Rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; plus

3. Rent After Award. The worth at the time of the 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 rental loss that Tenant proves could be reasonably avoided; plus

4. Proximately Caused Damages. Any other amount necessary to compensate Landlord
for all detriment proximately caused by Tenant’s failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including, but not limited to, any costs or expenses
(including attorneys’ fees), incurred by Landlord in (a) retaking possession of
the Premises, (b) maintaining the Premises after Tenant’s default, (c) preparing
the Premises for reletting to a new tenant, including any repairs or
alterations, and (d) reletting the Premises, including broker’s commissions.

“The worth at the time of the award” as used in subparagraphs 1 and 2, is to be
computed by allowing interest at the rate of ten percent (10%) per annum. “The
worth at the time of the award” as used in subparagraph 3 above, is to be
computed by discounting the amount at the discount rate of the Federal Reserve
Bank situated nearest to the Premises at the time of the award plus one percent
(1%).

The waiver by Landlord of any breach of any term, covenant or condition of this
Lease shall not be deemed a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition.
Acceptance of Rent by Landlord subsequent to any breach hereof shall not be
deemed a waiver of any preceding breach other than the failure to pay the
particular Rent so accepted, regardless of Landlord’s knowledge of any breach at
the time of such acceptance of Rent. Landlord shall not be deemed to have waived
any term, covenant or condition unless Landlord gives Tenant written notice of
such waiver.

27.3. Landlord’s Default. If Landlord falls to perform any covenant, condition
or agreement contained in this Lease within thirty (30) days after receipt of
written notice from Tenant specifying such default, or if such default cannot
reasonably be cured within thirty (30) days, if Landlord fails to commence to
cure within that thirty (30) day period, then Landlord shall be liable to Tenant
for any damages sustained by Tenant as a result of Landlord’s breach; provided,
however, it is expressly understood and agreed that if Tenant obtains a money
judgment against Landlord resulting from any default or other claim arising
under this Lease, that judgment shall be satisfied only out of the rents,
issues, profits, and other income actually received on account of Landlord’s
right, title and interest in the Premises, Building or Project, and no other
real, personal, or mixed property of Landlord (or of any of the partners which
comprise Landlord, if any) wherever situated, shall be subject to levy to
satisfy such judgment. If, after notice to Landlord of default, Landlord (or any
holder of a mortgage) fails to cure the default as provided herein, then Tenant
shall have the right to cure that default at Landlord’s expense. Tenant shall
not have the right to terminate this Lease or to withhold, reduce or offset any
amount against any payments of Rent or any other charges due and payable under
this Lease except as otherwise specifically provided herein.

28. BROKERAGE FEES

Tenant warrants and represents that it has not dealt with any real estate broker
or agent in connection with this Lease or its negotiation except Broker(s)
listed in Article 2.c. of this Lease. Tenant shall indemnify and hold Landlord
harmless from any cost, expense or liability (including costs of suit and
reasonable attorneys’ fees) for any compensation, commission or fees claimed by
any other real estate broker or agent in connection with this Lease or its
negotiation by reason of any act of Tenant.

 

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29. NOTICES

All notices, approvals and demands permitted or required to be given under this
Lease shall be in writing and deemed duly served or given if personally
delivered or sent by certified or registered U.S. mail, postage prepaid, and
addressed as follows: (a) if to Landlord, to Landlord’s Mailing Address and to
the Building manager, and (b) if to Tenant, to Tenant’s Mailing Address;
provided, however, notices to Tenant shall be deemed duly served or given if
delivered or mailed to Tenant at the Premises. Landlord and Tenant may from time
to time by notice to the other designate another place for receipt of future
notices.

30. GOVERNMENT ENERGY OR UTILITY CONTROLS

In the event of imposition of federal, state or local government controls,
rules, regulations or restrictions on the use or consumption of energy or other
utilities during the Term, both Landlord and Tenant shall be bound thereby, In
the event of a difference in interpretation by Landlord and Tenant of any such
controls, the interpretation of Landlord shall prevail, and Landlord shall have
the right to enforce compliance therewith, including the right of entry into the
Premises to effect compliance.

31. RELOCATION OF PREMISES

Landlord shall have the right to relocate the Premises to another part of the
Building in accordance with the following:

a. The new premises shall be substantially the same in size, dimensions,
configuration, decor and nature as the Premises described in this Lease, and if
the relocation occurs after the Commencement Date, shall be placed in that
condition by Landlord at its cost.

b. Landlord shall give Tenant at lease thirty (30) days written notice of
Landlord’s intention to relocate the Premises.

c. As nearly as practicable, the physical relocation of the Premises shall take
place on a weekend and shall be completed before the following Monday. If the
physical relocation has not been completed in that time, Base Rent shall abate
in full from the time the physical relocation commences to the time it is
completed. Upon completion of such relocation, the new premises shall become the
“Premises” under this Lease.

d. All reasonable costs incurred by Tenant as a result of the relocation shall
be paid by Landlord.

e. If the new premises are smaller than the Premises as it existed before the
relocation, Base Rent shall be reduced proportionately.

f. The parties hereto shall immediately execute an amendment to this Lease
setting forth the relocation of the Premises and the reduction of Base Rent, If
any.

32. QUIET ENJOYMENT

Tenant, upon paying the Rent and performing all of its obligations under this
Lease, shall peaceably and quietly enjoy the Premises, subject to the terms of
this Lease and to any mortgage, lease or other agreement to which this Lease may
be subordinate.

33. OBSERVANCE OF LAW

Tenant shall not use the Premises or permit anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance or
governmental rule or regulation now in force or which may hereafter be enacted
or promulgated. Tenant shall, at its sole cost and expense, promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force, and with the
requirements of any board of fire insurance underwriters or other similar bodies
now or hereafter constituted, relating to, or affecting the condition, use or
occupancy of the Premises, excluding structural changes not related to or
affected by Tenant’s improvements or acts. The judgment of any court of
competent jurisdiction or the admission of Tenant in any action against Tenant,
whether Landlord is a party thereto or not, that Tenant has violated any law,
ordinance or governmental rule, regulation or requirement, shall be conclusive
of that fact as between Landlord and Tenant.

 

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34. FORCE MAJEURE.

Any prevention, delay or stoppage of work to be performed by Landlord or Tenant
which is due to strikes, labor disputes, inability to obtain labor, materials,
equipment or reasonable substitutes therefor, acts of God, governmental
restrictions or regulations or controls, judicial orders, enemy or hostile
government actions, civil commotion, fire or other casualty, or other causes
beyond the reasonable control of the party obligated to perform hereunder, shall
excuse performance of the work by that party for a period equal to the duration
of that prevention, delay or stoppage. Nothing in this Article 34 shall excuse
or delay Tenant’s obligation to pay Rent or other charges under this lease.

35. CURING TENANT’S DEFAULTS.

If Tenant defaults in the performance of any of its obligations under this
Lease, Landlord may (but shall not be obligated to) without waiving such
default, perform the same for the account at the expense of Tenant. Tenant shall
pay Landlord all costs of such performance promptly upon receipt of a bill
therefor.

36. SIGN CONTROL.

Tenant shall not affix, paint, erect or inscribe any sign, projection, awning,
signal or advertisement of any kind to any part of the Premises, Building or
Project, including without limitation, the inside or outside of windows or
doors, without the written consent of Landlord. Landlord shall have the right to
remove any signs or other matter, installed without Landlord’s permission,
without being liable to Tenant by reason of such removal, and to charge the cost
of removal to Tenant as additional rent hereunder, payable within ten (10) days
of written demand by Landlord.

37. MISCELLANEOUS.

a. Accord and Satisfaction; Allocation of Payments. No payment by Tenant or
receipt by Landlord of a lesser amount than the Rent provided for in this Lease
shall be deemed to be other than on account of the earliest due Rent, nor shall
any endorsement or statement on any check or letter accompanying any check or
payment as Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord’s right to recover the
balance of the Rent or pursue any other remedy provided for in this Lease. In
connection with the foregoing, Landlord shall have the absolute right in its
sole discretion to apply any payment received from Tenant to any account or
other payment of Tenant then not current and due or delinquent.

b. Addenda. If any provision contained in an addendum to this Lease is
inconsistent with any other provision herein, the provision contained in the
addendum shall control, unless otherwise provided in the addendum.

c. Attorneys’ Fees. If any action or proceeding is brought by either party
against the other pertaining to or arising out of this Lease, the finally
prevailing party shall be entitled to recover all costs and expenses, including
reasonable attorneys’ fees, incurred on account of such action or proceeding.

d. Captions, Articles and Section Numbers. The captions appearing within the
body of this Lease have been inserted as a matter of convenience and for
reference only and in no way define, limit or enlarge the scope or meaning of
this Lease. All references to Article and Section numbers refer to Articles and
Sections in this Lease.

e. Changes Requested by Lender. Neither Landlord or Tenant shall unreasonably
withhold its consent to changes or amendments to this Lease requested by the
lender on Landlord’s interest, so long as these changes do not alter the basic
business terms of this Lease or otherwise materially diminish any rights or
materially increase any obligations of the party from whom consent to such
change or amendment is requested.

f. Choice of Law. This Lease shall be construed and enforced in accordance with
the laws of the State of California.

g. Consent. Notwithstanding anything contained in this Lease to the contrary,
Tenant shall have no claim, and hereby waives the right to any claim against
Landlord for money damages by reason of any refusal, withholding or delaying by
Landlord of any consent, approval or statement of satisfaction and in such
event, Tenant’s only remedies therefor shall be an action for specific
performance. Injunction or declaratory judgment to enforce any right to such
consent, etc.

h. Corporate Authority. If Tenant is a corporation, each individual signing this
Lease on behalf of Tenant represents and warrants that he is duly authorized to
execute and deliver this Lease on behalf of the corporation, and that this Lease
is binding on Tenant in accordance with its terms. Tenant shall, at Landlord’s
request, deliver a certified copy of a resolution of its board of directors
authorizing such execution.

i. Counterparts. This Lease may be executed in multiple counterparts, all of
which shall constitute one and the same Lease.

 

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j. Execution of Lease; No Option. The submission of this Lease to Tenant shall
be for examination purposes only, and does not and shall not constitute a
reservation of or option for Tenant to lease, or otherwise create any interest
of Tenant in the Premises or any other premises within the Building or project.
Execution of this Lease by Tenant and its return to Landlord shall not be
binding on Landlord notwithstanding any time interval, until Landlord has in
fact signed and delivered this Lease to Tenant.

k. Furnishing of Financial Statements; Tenant’s Representation. In order to
induce Landlord to enter into this Lease Tenant agrees that it shall promptly
furnish Landlord, from time to time, upon Landlord’s written request, with
financial statements reflecting Tenant’s current financial condition. Tenant
represents and warrants that all financial statements, records and information
furnished by Tenant to Landlord in connection with this Lease are true, correct
and complete in all respects.

l. Further Assurances. The parties agree to promptly sign all documents
reasonably requested to give effect to the provisions of this Lease.

m. Mortgage Protection. Tenant agrees to send by certified or registered mail to
any holder of a mortgage whose address has been furnished to Tenant, a copy of
any notice of default served by Tenant on Landlord. If Landlord fails to cure
such default within the time provided for in this Lease, then Tenant shall
provide written notice of such failure to the holder of the mortgage and such
holder shall have an additional thirty (30) days to cure such default; provided
that if such default cannot reasonably be cured within that thirty (30) day
period, then such holder of the mortgage shall have such additional time to cure
the default as is reasonably necessary under the circumstances. Notwithstanding
anything to the contrary contained herein, the holder of the mortgage shall have
no obligation to cure (and shall have no liability or obligation for not curing)
any breach or default by Landlord, except to the extent that such holder agrees
or undertakes otherwise in writing.

n. Prior Agreements; Amendments. This Lease contains all of the agreements of
the parties with respect to any matter covered or mentioned in this Lease, and
no prior agreement or understanding pertaining to any such matter shall be
effective for any purpose. No provisions of this Lease may be amended or added
to except by an agreement in writing signed by the parties or their respective
successors in interest.

o. Recording. Tenant shall not record this Lease without the prior written
consent of Landlord. Tenant, upon the request of Landlord, shall execute and
acknowledge a “short form” memorandum of this Lease for recording purposes.

p. Severability. A final determination by a court of competent jurisdiction that
any provision of this Lease is invalid shall not affect the validity of any
other provision, and any provision so determined to be invalid shall, to the
extent possible, be construed to accomplish its intended effect.

q. Successors and Assigns. This Lease shall apply to and bind the heirs,
personal representatives, and permitted successors and assigns of the parties.

r. Time of the Essence. Time is of the essence of this Lease.

s. Waiver. No delay or omission in the exercise of any right or remedy of
Landlord upon any default by Tenant shall impair such right or remedy or be
construed as a waiver of such default.

t. Terminology. For purposes of this Lease the term “Landlord” shall be
interchangeable with “Lessor” and the term “Tenant” shall be interchangeable
with “Lessee”.

The receipt and acceptance by Landlord of delinquent Rent shall not constitute a
waiver of any other default; it shall constitute only a waiver of timely payment
for the particular Rent payment involved.

No act or conduct of Landlord, including, without limitation, the acceptance of
keys to the Premises, shall constitute an acceptance of the surrender of the
Premises by Tenant before the expiration of the Term. Only a written notice from
Landlord to Tenant shall constitute acceptance of the surrender of the Premises
and accomplish a termination of the Lease.

Landlord’s consent to or approval of any act by Tenant requiring Landlord’s
consent or approval shall not be deemed to waive or render unnecessary
Landlord’s consent to or approval of any subsequent act by Tenant.

Any waiver by Landlord of any default must be in writing and shall not be a
waiver of any other default concerning the same or any other provision of the
Lease.

 

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The Parties hereto have executed this Lease as of the dates set forth below.

 

Date:   6/26/06     Date:   6/6/06 Landlord:  

CENTURY CENTRE LLC

A NEVADA LIMITED LIABILITY COMPANY

    Tenant:  

RUSSAKOW, RYAN & JOHNSON

A PROFESSIONAL LAW CORPORATION

By:  

/s/ Jayne Taylor

    By:  

/s/ Mark Russakow

Name:   Jayne Taylor     Name:   Mark Russakow Title:   Vice President/CFO    
Title:   Secretary

 

Landlord’s Mailing Address:     Tenant’s Mailing Address:  

7 Corporate Plaza

   

2603 Main Street, Suite 1150

Newport Beach, CA 92660

   

Irvine, CA 92614

Management Office Address:

     

2603 Main Street, Suite 650

     

Irvine, CA 92614

     

Tel: 949.474.8300

     

Fax: 949.474.2040

     

Rent Payment Address:

       

Century Centre LLC

     

File 50126

     

Los Angeles, CA 90074-0126

     

 

Telephone/Facsimile:   949.644.6536/949.719.7200     Telephone/Facsimile:  

 

Federal ID No.   72-1591560     Federal ID No.  

 

 

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ADDENDUM “A”

 

TO LEASE DATED:    APRIL 12, 2006 BY AND BETWEEN:    CENTURY CENTRE LLC, A
NEVADA LIMITED LIABILITY COMPANY AS LANDLORD; AND:    RUSSAKOW, RYAN & JOHNSON,
A PROFESSIONAL LAW CORPORATION AS TENANT

 

1. SIGN CRITERIA

Except for Tenant’s name on the directory board in the Building lobby and
identify sign at the entry doors of the Premises (which signs shall be
consistent with the Building’s signage program), Tenant shall have no right to
place any sign upon the premises, the Building, Site or Project or which can be
seen from outside the Premises. No logos, electrical or audible signs,
advertising placards, banners, pennants, names, insignias, trademarks, or other
descriptive material shall be affixed or maintained upon the doors, exterior
walls, or interior common area walls of the Premises.

 

  A. MASTER LOBBY DIRECTORY:

 

  (1) Each suite shall be entitled to one line of copy on the lobby directory.

 

  (2) Copy to be at Landlord’s expense.

 

  B. SUITE DOOR SIGN:

 

  (1) Each suite shall be allowed one identity sign.

 

  (2) The sign shall be installed at Landlord’s expense.

 

2. NO TELEMARKETING

Tenant warrants to Landlord that its “use” of the subject Premises shall NOT be
for the operation of a telemarketing business, although some
business-to-business targeted marketing involving the use of telephone research,
surveying and prospecting techniques may be employed. Tenant acknowledges that
Landlord does not allow “boiler-room” telemarketing businesses as an acceptable
“Use” for this or any other location in Landlord’s properties and Tenant
therefore understands and agrees its total number of employees shall not
adversely impact the Project parking, or usage of the common areas, or exceed
that which would be reasonably expected for normal general office use in a
facility of this size, and that non-compliance of these issues shall constitute
a material breach of this Lease.

 

3. EXTERIOR STORAGE

Tenant shall neither store, nor permit to be stored any goods, machinery,
merchandise, equipment, or any other items whatsoever in the parking lot or any
other common area adjacent to or in the Building. Tenant may only place or store
items wholly within its leased Premises.

 

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ADDENDUM “A”

PAGE 2

 

4. SUITE REFURBISHMENT

Tenant is accepting Premises in “as is” condition with respect to Suite
Refurbishment.

Landlord shall repaint and recarpet subject Premises with Tenant’s choice of
Landlord’s standard paint and carpet and at Tenant’s sole cost and expense.
Tenant shall pay Landlord said costs prior to commencement of any work. Landlord
will make every reasonable effort to complete this work as soon as reasonably
possible after receipt of signed leases and move-in monies, and estimates said
work to take approximately three (3) weeks from date of receipt of signed leases
and move-in monies, but Landlord can make no guaranty of a specific date of
completion.

 

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ADDENDUM “B”

RULES AND REGULATIONS

1. No sign, advertisement, name or notice shall be installed or displayed on any
part of the outside or inside of the Building without the prior written consent
of Landlord. Landlord shall have the right to remove, at Tenant’s expense and
without notice, any sign installed or displayed in violation of this rule. All
approved signs or lettering on doors and walls shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved by Landlord,
using materials and in a style and format approved by Landlord.

2. Tenant shall not place anything or allow anything to be placed near the glass
of any window, door, partition or wall which may appear unsightly from outside
the Premises. No awnings or other projection shall be attached to the outside
walls of the Building without the prior written consent of Landlord. No
curtains, blinds, shades or screens shall be attached to or hung in, or used in
connection with, any window or door of the Premises, other than Building
standard materials, without the prior written consent of Landlord.

3. Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances,
elevators, escalators or stairways of the Building. The halls, passages, exits,
entrances, elevators, escalators and stairways are not for the general public,
and Landlord shall in all cases retain the right to control and prevent access
thereto of all persons whose presence in the judgment of Landlord would be
prejudicial to the safety, character, reputation and interests of the Building
and its tenants; provided, that nothing herein contained shall be construed to
prevent such access to persons with whom any tenant normally deals in the
ordinary course of its business, unless such persons are engaged in illegal
activities. Tenant and no employee, invitee, agent, licensee or contractor of
Tenant shall go upon or be entitled to use any portion of the roof of the
Building.

4. The directory of the Building will be provided exclusively for the display of
the name and location of tenants only, and Landlord reserves the right to
exclude any other names therefrom. Tenant shall be entitled to one line on the
Building lobby directory to identify Tenant.

5. All cleaning and janitorial services for the Building and the Premises shall
be provided exclusively through Landlord or Landlord’s janitorial contractors in
accordance with the provisions of Section 16.1(d) of the Lease. No person or
persons other than those approved by Landlord shall be employed by Tenant or
permitted to enter the Building for the purpose of cleaning the same. Tenant
shall not cause any unnecessary labor by carelessness or indifference to the
good order and cleanliness of the Premises. Landlord shall not in any way be
responsible to Tenant for loss of property on the Premises, however occurring,
or for any damage to Tenant’s property by the janitors or any other employee or
any other person.

6. Landlord will furnish Tenant, free of charge, with two keys to each door lock
in the Premises. Landlord may impose a reasonable charge for any additional
keys. Tenant may not make or have made additional keys, and Tenant shall not
alter any lock or install a new additional lock or bolt on any door or window of
its Premises. Tenant, upon termination of its tenancy, shall deliver to Landlord
the keys of all doors which have been furnished to, or otherwise procured by
Tenant, and, in the event of loss of any keys, shall pay Landlord the cost of
replacing the same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such change.

7. Electric wires, telephones, telegraphs, burglar alarms or other similar
apparatus shall not be installed in the Premises except with the approval and
under the direction of Landlord. The location of telephones, call boxes and any
other equipment affixed to the Premises shall be subject to the approval of
Landlord. Any installation of telephones, telegraphs, electric wires or other
electric apparatus made without permission shall be removed by Tenant at
Tenant’s own expense. No machines other than standard office machines, such as
typewriters and calculators, photo copiers, personal computers and word
processors, and vending machines permitted by the Lease, shall be used in the
Premises without the approval of Landlord.

8. No furniture, freight, or equipment of any kind shall be brought into the
Building without prior notice to Landlord and all moving of the same into or out
of the Building shall be done at such time and in such manner as Landlord shall
designate. No furniture, equipment or merchandise shall be received in the
Building or carried up or down in the elevator, except between such hours as
shall be designated by Landlord. Deliveries during normal office hours shall be
limited to normal office supplies and other small items. No deliveries shall be
made which impede or interfere with other tenants or the operation of the
Building.

 

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Addendum “B”

Page 2

 

9. Tenant shall not place a load upon any floor of the Premises which exceeds
the load per square foot which such floor was designed to carry and which is
allowed by law. Landlord shall have the right to prescribe the weight, size and
position of all equipment, materials, furniture or other property brought into
the Building. Heavy objects, if such objects are considered necessary by Tenant,
as determined by Landlord, shall stand on such platforms as determined by
Landlord to be necessary to properly distribute the weight. Business machines
and mechanical equipment which cause noise or vibration that may be transmitted
to the structure of the Building or to any space therein to such a degree as to
be objectionable to Landlord or to any tenants in the Building, shall be placed
and maintained by Tenant, at Tenant’s expense, on vibration eliminators or other
devices sufficient to eliminate noise or vibration. Landlord will not be
responsible for loss of, or damage to, any such equipment or other property from
any cause, and all damage done to the Building by maintaining or moving such
equipment or other property shall be repaired at the expense of Tenant.

10. Tenant shall not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited quantities
necessary for the operation or maintenance of office equipment. Tenant shall not
use or permit to be used in the Premises any foul or noxious gas or substance,
or permit or allow the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Project by reason of noise,
odors or vibrations, nor shall Tenant bring into or keep in or about the
Premises any birds or animals.

 

11. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord.

12. Tenant shall not waste electricity, water or air-conditioning and agrees to
cooperate fully with Landlord to assure the most effective operation of the
Building’s heating and air-conditioning and to comply with any governmental
energy-saving rules, laws or regulations of which Tenant has actual notice, and
shall not adjust controls other than room thermostats installed for Tenant’s
use. Tenant shall keep corridor doors closed and shall close window coverings at
the end of each business day.

13. Landlord reserves the right from time to time, in Landlord’s sole and
absolute discretion, exercisable without prior notice and without liability to
Tenant, to: (a) name or change the name of the Building, Site or Project;
(b) change the address of the Building or Project, and/or (c) install, replace
or change any signs in, on or about the Common Areas, the Building or Site
(except for Tenant’s signs, if any, which are expressly permitted by the Lease).

14. Landlord reserves the right to exclude from the Building between the hours
of 6:00 p.m. and 7:00 a.m., or such other hours as may be established from time
to time by Landlord, and on legal holidays, any person unless that person is
known to the person or employee in charge of the Building and has a pass or is
properly identified. Landlord shall not be liable for damages for any error with
regard to the admission to or exclusion from the Building of any person. Tenant
shall be responsible for all persons for whom it requests passes and shall be
liable to Landlord for all acts of such persons. Landlord reserves the right to
prevent access to the Building in case of invasion, mob, riot, public excitement
or other commotion by closing the doors or by other appropriate action.

15. Tenant shall close and lock all doors of its Premises and entirely shut off
all water faucets or other water apparatus, and, except with regard to Tenant’s
computers and other equipment which reasonably require electricity on a 24-hour
basis, all electricity, gas or air outlets before Tenant and its employees leave
the Premises. Tenant shall be responsible for any damage or injuries sustained
by other tenants or occupants of the Building or by Landlord for noncompliance
with this rule.

16. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed, and no
foreign substances of any kind whatsoever shall be thrown therein.

17. Tenant shall not sell, or permit the sale at retail, of newspapers,
magazines, periodicals, theater tickets, or any other goods or merchandise to
the general public in or on the Premises. Tenant shall not make any room-to-room
solicitation of business from other tenants in the Project. Tenant shall not use
the Premises for any business or activity other than that specifically provided
for in the Lease.

18. Tenant shall not install any radio or television antenna, loudspeaker or
other device on the roof or exterior walls of the Building. Tenant shall not
interfere with radio or television broadcasting or reception from or in the
Building or elsewhere.

 

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Addendum “B”

Page 3

 

19. Except as expressly permitted in the Lease, Tenant shall not mark, drive
nails, screw or drill into the partitions, window mullions, woodwork or plaster,
or in any way deface the Premises or any part thereof, except to install normal
wall hangings. Tenant shall repair any damage resulting from noncompliance under
this rule.

20. Tenant shall not install, maintain or operate upon the Premises any vending
machines without the prior written consent of Landlord, which shall not be
unreasonably withheld.

21. Canvassing, soliciting and distribution of handbills or any other written
material, and peddling in and around the Project or the Building are expressly
prohibited, and each tenant shall cooperate to prevent same.

22. Landlord reserves the right to exclude or expel from the Project and/or the
Building any person who, in Landlord’s judgment, is intoxicated or under the
influence of liquor or drugs or who is in violation of any of the Rules and
Regulations of the Project or Building.

23. Tenant shall store all its trash and garbage within its Premises. Tenant
shall not place in any trash box or receptacle any material which cannot be
disposed of in the ordinary and customary manner of trash and garbage disposal.
All garbage and refuse disposal shall be made in accordance with directions
reasonably issued from time to time by Landlord.

24. The Premises shall not be used for the storage of merchandise held for sale
to the general public, or for lodging or for manufacturing of any kind. No
cooking shall be done or permitted by Tenant on the Premises, except that use by
Tenant of Underwriters’ Laboratory-approved equipment for brewing coffee, tea,
hot chocolate and similar beverages shall be permitted and the use of a
microwave shall be permitted, provided that such equipment and use is in
accordance with all applicable federal, state, county and city laws, codes,
ordinances, rules and regulations.

25. Tenant shall not use in any space, or in the public halls of the Building,
any hand trucks except those equipped with rubber tires and side guards, or such
other material-handling equipment as Landlord may approve. Tenant shall not
bring any other vehicles of any kind into the Building.

26. Tenant shall not use the name of the Project or Building in connection with,
or in promoting or advertising, the business of Tenant, except for Tenant’s
address.

27. Tenant agrees that it shall comply with all fire and security regulations
that may be issued from time to time by Landlord, and Tenant also shall provide
Landlord with the name of a designated responsible employee to represent Tenant
in all matters pertaining to such fire or security regulations. Tenant shall
cooperate fully with Landlord in all matters concerning fire and other emergency
procedures.

28. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage. Such responsibility shall include keeping doors
locked and other means of entry to the Premises closed.

29. Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of Tenant or any
other such tenant, nor prevent Landlord from thereafter enforcing any such Rules
and Regulations against any and all of the tenants in the Building.

30. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of premises in the Project or Building.

31. Landlord reserves the right to make such other and reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for safety,
security, care and cleanliness of the Project and/or Building and for the
preservation of good order therein. Tenant agrees to abide by all such Rules and
Regulations hereinabove stated and any additional rules and regulations which
are adopted.

 

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Addendum “B”

Page 4

 

32. Tenant shall be responsible for the observance of all of the foregoing rules
by Tenant’s employees, agents, clients, customers, invitees or guests.

33. Tenant shall not lay linoleum, tile, carpet or other similar floor covering
so that the same shall be affixed to the floor of the Premises in any manner
except by a paste, or other material which may easily be removed with water, the
use of cement or other similar adhesive materials being expressly prohibited.
The method of affixing any such linoleum, tile, carpet or other similar floor
covering shall be subject to the approval of Landlord. The expense of repairing
any damage resulting from a violation of this rule shall be borne by Tenant.

34. Tenant shall not without Landlord’s consent, which may be given or withheld
in Landlord’s sole and absolute discretion, receive, store, discharge, or
transport firearms, ammunition, or weapons or explosives of any kind or nature
at, on or from the Premises, the Building or the Project.

PARKING RULES AND REGULATIONS

In addition to the parking provisions contained in the Lease to which this
Addendum “B” is attached, the following rules and regulations shall apply with
respect to the use of the Building’s parking facilities.

1. Every parker is required to park and lock his/her own vehicle. All
responsibility for damage to or loss of vehicles is assumed by the parker and
Landlord shall not be responsible for any such damage or loss by water, fire,
defective brakes, the act or omissions of others, theft, or for any other cause.

2. Tenant shall not park or permit its employees to park in any parking areas
designated by Landlord as areas for parking by visitors to the Project. Tenant
shall not leave vehicles in the parking areas overnight nor park any vehicles in
the parking areas other than automobiles, motorcycles, motor driven or non-motor
driven bicycles or four wheeled trucks.

3. Parking stickers or any other device or form of identification supplied by
Landlord as a condition of use of the parking facilities shall remain the
property of Landlord. Such parking identification device must be displayed as
requested and may not be mutilated in any manner. The serial number of the
parking identification device may not be obliterated. Devices are not
transferable and any device in the possession of an unauthorized holder will be
void.

4. No overnight or extended term storage of vehicles shall be permitted.

5. Vehicles must be parked entirely within painted stall lines of a single
parking stall.

6. All directional signs and arrows must be observed.

7. The speed limit within all parking areas shall be five (5) miles per hour.

8. Parking is prohibited: (a) in areas not striped for parking; (b) in aisles;
(c) where “no parking” signs are posted; (d) on ramps; (e) in cross-hatched
areas; and (f) in reserved spaces and in such other areas as may be designated
by Landlord or Landlord’s parking operator.

9. Loss or theft of parking identification devices must be reported to the
Management Office immediately, and a lost or stolen report must be filed by the
Tenant or user of such parking identification device at the time. Landlord has
the right to exclude any vehicle from the parking facilities that does not have
an identification device.

10. Any parking identification devices reported lost or stolen found on any
unauthorized car will be confiscated and the illegal holder will be subject to
prosecution.

11. Washing, waxing, cleaning or servicing of any vehicle in any area not
specifically reserved for such purpose is prohibited.

 

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Addendum “B”

Page 5

 

12. The parking operators, managers or attendants are not authorized to make or
allow any exceptions to these rules and regulations.

13. Tenants continued right to park in the parking facilities is conditioned
upon Tenant abiding by these rules and regulations and those contained in this
Lease. Further, if the Lease terminates for any reason whatsoever, Tenant’s
right to park in the parking facilities shall terminate concurrently therewith.

14. Tenant agrees to sign a parking agreement with Landlord or Landlord’s
parking operator within five (5) days of request, which agreement shall provide
the manner of payment of monthly parking fees and otherwise be consistent with
the Lease and these rules and regulations.

15. Landlord reserves the right to refuse the sale or use of monthly stickers or
other parking identification devices to any tenant or person who willfully
refuse to comply with these rules and regulations and all city, state or federal
ordinances, laws or agreements.

16. Landlord reserves the right to establish and change parking fees, and to
modify and/or adopt such other reasonable and non-discriminatory rules and
regulations for the parking facilities as it deems necessary for the operation
of the parking facilities. Landlord may refuse to permit any person who violates
these rules to park in the parking facilities, and any violation of the rules
shall subject the vehicle to removal, at such vehicle owner’s expense

 

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FIRST AMENDMENT TO LEASE

This FIRST AMENDMENT TO LEASE (“Amendment”) is made as of this 19th day of
April, 2007 by and between CENTURY CENTRE LLC, A NEVADA LIMITED LIABILITY
COMPANY (“Landlord”), and RUSSAKOW, RYAN & JOHNSON, A PROFESSIONAL LAW
CORPORATION (“Tenant”), with reference to the facts set forth in the Recitals
below.

R E C I T A L S:

A. Landlord and Tenant previously entered into that certain Office Lease dated
April 12, 2006 for certain Premises commonly known as 2603 Main Street, Suite
1155, Irvine, CA 92614.

B. Defined terms which are used in this Amendment without definition have the
meanings given to them in the Lease.

C. The Term is scheduled to expire June 30, 2007 and Landlord and Tenant desire
to amend the Lease to extend the Term upon the terms and conditions set forth
below.

A G R E E M E N T:

NOW, THEREFORE, in consideration of the above Recitals and the mutual covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Landlord and
Tenant agree as follows:

1. Extended Term. The Term is hereby extended for an additional Eighteen
(18) months commencing on July 1, 2007 and expiring on December 31, 2008 (the
“Extended Term”).

2. Monthly Base Rent. During the Extended Term, Tenant shall continue to pay
Monthly Base Rent for the Premises at the rate of $7,389.20 per month (subject
to annual adjustment as described herein).

3. Project Operating Costs and Real Estate Taxes. During the Extended Term,
Tenant shall continue to pay Tenant’s Share of Project Operating Costs and Real
Estate Taxes in accordance with the Lease. Tenant’s current Monthly Operating
Costs and Real Estate Taxes are 67.81, which amounts are subject to adjustment
pursuant to the terms of the Lease.

4. Parking Charges. During the Extended Term, Tenant shall continue to pay
Parking charges of $225.00, which amounts are subject to adjustment pursuant to
the terms of the Lease.

 

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Amendment to Lease and Lease Extension

Tenant Name: Russakow, Ryan & Johnson

Date: April 19, 2007

5. Total Monthly Rent. During the Extended Term, Lessee shall pay an initial
total Monthly Rent of $7,682.00.

6. Security Deposit. The Security Deposit shall be increased to $7,966.21 to
equal the last month of the total Monthly Rent.

7. Condition of Premises. Tenant hereby accepts the Premises AS-IS and without
any express or implied representations or warranties of any kind by Landlord,
its brokers, manager or agents, or the employees of any of them regarding the
Premises.

8. Addendum C, Annual Rent Adjustment. The Monthly Base Rent shall be adjusted
annually as follows:

Commencing on July 1, 2008 and continuing through December 31, 2008, the Monthly
Base Rent shall be $7,673.40* per month.

* Note: This amount does not include Project Operating Costs and Real Estate
Taxes and Parking Charges, which amounts are subject to change pursuant to the
terms of the Lease.

It is further agreed that all other terms and conditions contained in said
Lease, other than as modified herein, shall remain in full force and effect.

 

AGREED AND ACCEPTED:     AGREED AND ACCEPTED: LANDLORD:     TENANT: CENTURY
CENTRE LLC,     RUSSAKOW, RYAN & A NEVADA LIMITED LIABILITY COMPANY     JOHNSON,
A PROFESSIONAL     LAW CORPORATION By:  

/s/ Jayne Taylor

    By:  

/s/ Mark Russakow

  Jayne Taylor       Mark Russakow   Vice President/CFO       Secretary Date:
6/1/07     Date: 5/29/07

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SECOND AMENDMENT TO LEASE

This SECOND AMENDMENT TO LEASE (“Amendment”) is made as of this 27th day of
March, 2008 by and between CENTURY CENTRE LLC, A NEVADA LIMITED LIABILITY
COMPANY (“Landlord”), and RUSSAKOW, RYAN & JOHNSON, A PROFESSIONAL LAW
CORPORATION (“Tenant”), with reference to the facts set forth in the Recitals
below.

R E C I T A L S:

A. Landlord and Tenant previously entered into that certain Office Lease dated
April 12, 2006 (the “Original Lease”) and First Amendment to Lease dated
April 19, 2007 (the “First Amendment”) for certain Premises commonly known as
2603 Main Street, Suite 1155, Irvine, CA 92614 (the “Original Premises”).

B. Defined terms which are used in this Amendment without definition have the
meanings given to them in the Lease.

C. The Term is scheduled to expire December 31, 2008 and Landlord and Tenant
desire to amend the Existing Lease, in order among other things, to extend the
Term of the Existing Lease and to expand the Premises upon the terms and
conditions set forth below.

D. Tenant desires to lease 1,810 rentable square feet of Additional Space
(“Additional Space”) known as Suite 1190 on the eleventh (11th) floor of the
Building, and as indicated in the attached Exhibit “A”. Landlord and Tenant
desire to amend the Lease in order, among other things, to extend the term of
the Original Premises and to reflect the addition of Suite 1190 to the Original
Premises, as more particularly set forth below.

A G R E E M E N T:

NOW, THEREFORE, in consideration of the above Recitals and the mutual covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Landlord and
Tenant agree as follows:

1. Extension of Lease Term for Original Premises (Suite 1155). The Term is
hereby extended for an additional twelve (12) months commencing on January 1,
2009 and expiring on December 31, 2009.

2. Monthly Base Rent for Original Premises. During the Extended Term, Tenant
shall continue to pay Monthly Base Rent for Suite 1155 at the rate of $6,820.80
per month.

3. Base Year for Original Premises. The Base Year for the Original Premises
shall be changed to year 2009.

4. Parking Charges. During the Extended Term, Tenant shall continue to pay
Parking charges of $225.00, which amounts are subject to adjustment pursuant to
the terms of the Lease.

 

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Second Amendment to Lease

Tenant Name: Russakow, Ryan & Johnson

Date: March 27, 2008

5. Total Monthly Rent. During the Extended Term, Lessee shall pay an initial
total Monthly Rent of $7,045.80.

6. Condition of Premises. Tenant hereby accepts Suite 1155 AS-IS and without any
express or implied representations or warranties of any kind by Landlord, its
brokers, manager or agents, or the employees of any of them regarding the
Premises.

7. Additional Space (Suite 1190). On the date this Second Amendment is fully
executed, Tenant shall lease from Landlord 1,810 rentable square feet on the
eleventh (11th) floor of 2603 Main Street, Irvine, CA 92614 known as Suite 1190
depicted on Exhibit “A” attached hereto (the “Additional Space”). The term of
the lease for the Additional Space shall commence five (5) days after written
notice from Landlord that Suite Refurbishment has been completed, or May 1,
2008, whichever is later, and shall expire on December 31, 2009. Upon
establishing a fixed Commencement Date for the Additional Space, an amendment
shall be created defining said date, which will be attached hereto and will
become hereof a part of the terms and conditions of this Lease.

Effective on the Commencement Date for the Additional Space, the total square
footage for the Original Premises and the Additional Space shall be 4,652
rentable square feet.

8. Monthly Base Rent. Effective on the Commencement Date, the Monthly Base Rent
for the Additional Space shall be $4,163.00 per month (subject to annual
adjustments as described herein).

9. Tenant’s Prorata Share. Effective on the Commencement Date for the Additional
Space, Tenant’s Prorata Share for the entire Premises of 4,652 rentable square
feet shall be 2.08%.

10. Base Year for Additional Space. The Base Year for the Additional Space shall
be year 2008.

11. Parking. Tenant shall have the right, to park 4:1,000 cars on a
non-exclusive basis in the parking structure. Unreserved parking will be
available at $65.00 per stall, per month, and reserved parking will be available
at $125.00 per stall, per month, during the lease term. Landlord reserves the
right to separately charge Tenant’s guests and visitors for parking, and said
parking rates are $1.00 per twenty minute period with a maximum rate of $10.00
per day with the first fifteen minutes free. Visitor parking rates are subject
to periodic increases with market parameters.

12. Addendum C, Annual Rent Adjustment. The Monthly Base Rent for the Additional
Space shall be adjusted annually as follows:

Commencing on May 1, 2009 and continuing through December 31, 2009, the Monthly
Base Rent for the Additional Space shall be $4,344.00* per month.

* Note: This amount does not include Project Operating Costs and Real Estate
Taxes and Parking Charges, which amounts are subject to change pursuant to the
terms of the Lease.

 

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ADDENDUM TO SECOND AMENDMENT TO OFFICE LEASE

THIS ADDENDUM TO SECOND AMENDMENT TO OFFICE LEASE (the “Amendment”) is dated for
reference purposes only, this 30th day April, 2008, by and between CENTURY
CENTRE, LLC, A NEVADA LIMITED LIABILITY COMPANY, and RUSSAKOW, RYAN & JOHNSON, A
PROFESSIONAL LAW CORPORATION (“Tenant”) on the other hand, with reference to the
facts set forth in the Recitals below.

R E C I T A L S :

A. Landlord and Tenant are parties to that certain Office Lease dated April 19,
2007 (the “Original Lease”), which was amended by that certain: (i) First
Amendment to Office Lease dated as of April 19, 2007 (the “First Amendment”);
and (ii) Second Amendment to Office Lease dated as of March 27, 2008 (the
“Second Amendment”) (as amended, the “Lease”), pursuant to which Tenant leases
from Landlord those certain Premises consisting of approximately 4,652 rentable
square feet commonly known as Suites 1155 and 1190 of that certain building
commonly known as 2603 Main Street, Irvine, California (the “Building”), and
more particularly described in the Lease.

B. Landlord and Tenant hereby express their mutual desire and intent to amend
the Term of the Second Amendment to Office Lease for the Additional Space of
1,810 rentable square feet known as Suite 1190, as follows:

 

  (i) The term of this Lease for the Additional Space known as Suite 1190 shall
be for: Twenty (20) months.

 

  (ii) Original Commencement Date for the Additional Space was: Five (5) days
after written notice from Landlord that Suite Refurbishment has been completed
or May 1, 2008, whichever is later.

 

  (iii) Revised Commencement Date for the Additional Space is: May 1, 2008.

 

  (iv) Expiration Date for the Additional Space is: December 31, 2009.

Except as modified herein, all other terms and conditions of the Lease between
the Parties above described, and attached hereto, shall continue in full force
and effect.

 

LANDLORD:     CENTURY CENTRE, LLC     A NEVADA LIMITED LIABILITY COMPANY     By:
 

/s/ Jayne Taylor

    Name:   Jayne Taylor     Title:   Vice President/CFO     Date:   6/3/08
TENANT:     RUSSAKOW, RYAN & JOHNSON     A PROFESSIONAL LAW CORPORATION     By:
 

/s/ Mark Russakow

    Name:   Mark Russakow     Title:   Secretary     Date:  

 

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EXHIBIT B

CONSENT TO SUBLEASE

 

 

– 5 –

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CONSENT TO SUBLEASE

PARTIES TO CONSENT TO SUBLEASE:

The parties to the within “Consent to Sublease” dated November 13, 2008 (the
“Effective Date”) are CENTURY CENTRE LLC, A NEVADA LIMITED LIABILITY COMPANY
(“Landlord”); RUSSAKOW, RYAN & JOHNSON, A PROFESSIONAL LAW CORPORATION
(“Tenant”); BIOLARGO, INC., A DELAWARE CORPORATION (“Sub-Tenant”).

SUBLEASED PREMISES:

Landlord and Tenant are parties to a lease dated April 12, 2006 (as amended
April 19, 2007, March 27, 2008 and April 30, 2008 (hereafter, the “Master
Lease”) for the property located at 2603 Main Street (the “Property”), Suites
1155 (the “Subleased Premises”) and 1190 (“Suite 1190”), Irvine, CA 92614. The
Subleased Premises are further subject to that certain Sublease Agreement dated
as of November 13, 2008 between the Tenant and Sub-Tenant (the “Sublease”) and
consist only of Suite 1155, and do not include any other part of the Property,
including without limitation Suite 1190.

TERMS OF CONSENT TO SUBLEASE:

The Landlord hereby gives consent to the Tenant to sublet to the Sub-Tenant,
pursuant to the Sublease, only the Subleased Premises at the Property, on a
month-to-month basis, for the period of time beginning as of the Effective Date
of this Consent to Sublease, and ending on December 31, 2009, under the
following conditions:

 

  (A) Tenant Default - Landlord May Receive Rent directly from Sub-Tenant. If
Tenant breaches any of the terms and provisions of the Master Lease as it
pertains to the Subleased Premises, Landlord may elect to receive directly from
Sub-Tenant all sums due or payable to Tenant by Sub-Tenant pursuant to the
Sublease, so long as the Sublease is still in force and effect pursuant to its
terms. Upon receipt of a written notice from Landlord referencing this section,
Sub-Tenant shall thereafter pay to Landlord any and all sums becoming due or
payable to Tenant under the Sublease, so long as the Sublease is still in force
and effect pursuant to its terms.

 

  (B) No Implied Relationship between Landlord and Sub-Tenant. Neither the
giving of written notice pursuant to clause (A) above by Landlord to Sub-Tenant
nor the receipt of direct payments from Sub-Tenant to Landlord thereunder shall
cause Landlord to assume any of Tenant’s duties, obligations and/or liabilities
under the Sublease.

 

  (C) No Assignment of Obligations. This Consent shall not serve as an
assignment of any of the duties and/or obligations of the Landlord and/or Tenant
contained in or arising out of the underlying Master Lease for the Subleased
Premises and any and all duties and obligations contained therein shall remain
in full force and effect despite the existence of this Consent to Sublease.

 

  (D) Tenant and Sub-Tenant understand and agree that all terms and conditions
of the Master Lease by and between the Landlord and Tenant remain in full force
and effect, and it is incumbent upon the Sub-Tenant herein to abide by its
provisions, covenants and conditions, as such provisions, covenants and
conditions relate to the Subleased Premises. The Landlord and Tenant acknowledge
and agree that notwithstanding anything contained herein to the contrary, the
Sub-Tenant’s duties and obligations are specific to the Subleased Premises only
and that, accordingly, the Sub-Tenant shall have no duties or obligations,
financial or otherwise, with respect to any portion of the Property other than
the Subleased Premises, including but not limited to Suite 1190.

NOTICE OF DEFAULT:

Should an event of default occur, as defined in the Master Lease as it pertains
to the Subleased Premises, notice and opportunity to cure shall be provided as
follows:

 

To Tenant:      Name:    Mark Russakow, President      Russakow, Ryan & Johnson
  Address:    255 S. Lake Ave, Floor 10, Pasadena, CA 91101-9546   Tel #:    626
683-8869

 

/s/ JT

    

/s/ MR

Landlord’s Initials      Tenant’s Initials

    

/s/ DC

     Sub-Tenant’s Initials

 

Page 1 of 2

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Consent to Sublease

Tenant: Russakow, Ryan & Johnson, a Professional Law Corporation

Sub-Tenant: BioLargo, Inc.

Subleased Premises: Suite 1155

Date: November     , 2008

To Sub-Tenant:

 

Name:   Dennis Calvert, President and CEO   Biolargo, Inc. Address:   2603 Main
Street, Suite 1155, Irvine, CA 92614 Tel #:   949.643.9590

Landlord is under no obligation to provide any notices other than that described
herein or in the Master Lease.

 

LANDLORD: CENTURY CENTRE LLC, A NEVADA LIMITED LIABILITY COMPANY By:  

/s/ Jayne Taylor

Name:   Jayne Taylor Title:   Vice President/CFO Date:  

11/12/08

TENANT: RUSSAKOW, RYAN & JOHNSON, A PROFESSIONAL LAW CORPORATION By:  

/s/ Mark Russakow

Name:   Mark Russakow Title:   President Date:  

11/11/08

SUB-TENANT: BIOLARGO, INC., A DELAWARE CORPORATION By:  

/s/ Dennis P. Calvert

Name:   Dennis P. Calvert Title:   President and CEO Date:  

11/11/08

 

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