Exhibit 10.3

LEASE BETWEEN

Sound Surgical Technologies LLC

AND

McCaslin Plaza, LLC

Current as of June 20, 2003

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TABLE OF CONTENTS

 

SECTION 1 PURPOSE

     1   

SECTION 2 TERM

     2   

SECTION 3 COMPLETION OF PREMISES

     2   

SECTION 4 RENT

     2   

SECTION 5 TAXES AND OPERATING COST ADJUSTMENT FORMULA

     4   

SECTION 6 HOLDING OVER

     8   

SECTION 7 BUILDING SERVICES

     8   

SECTION 8 CONDITION OF PREMISES

     9   

SECTION 9 USE OF LEASED PREMISES

     10   

SECTION 10 COMPLIANCE WITH LAW

     11   

SECTION 11 ALTERATIONS AND REPAIRS

     11   

SECTION 12 ABANDONMENT

     12   

SECTION 13 ASSIGNMENT AND SUBLETTING

     13   

SECTION 14 SIGNS AND ADVERTISING

     13   

SECTION 15 DAMAGE TO PROPERTY, INJURY TO PERSONS

     14   

SECTION 16 TENANT’S INSURANCE

     14   

SECTION 17 DAMAGE OR DESTRUCTION

     16   

SECTION 18 ENTRY BY LANDLORD

     17   

SECTION 19 DEFAULT BY TENANT

     17   

SECTION 20 TAXES

     21   

 

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TABLE OF CONTENTS CON’T

 

 

SECTION 21 EMINENT DOMAIN

     21   

SECTION 22 SUBORDINATION TO MORTGAGES AND DEEDS

     22   

SECTION 23 WAIVER

     23   

SECTION 24 SUBROGATION

     23   

SECTION 25 PLATS AND RIDERS

     24   

SECTION 26 SALE BY LANDLORD

     24   

SECTION 27 RIGHT OF LANDLORD TO PERFORM

     24   

SECTION 28 ATTORNEY’S FEES

     25   

SECTION 29 ESTOPPEL CERTIFICATE

     25   

SECTION 30 NOTICE

     26   

SECTION 31 RIGHTS RESERVED

     26   

SECTION 32 REAL ESTATE BROKER

     26   

SECTION 33 MISCELLANEOUS PROVISIONS

     27   

SECTION 34 SUCCESSORS AND ASSIGNS

     28   

SECTION 35 QUIET ENJOYMENT

     28   

SECTION 36 RECORDING

     28   

SECTION 37 RIGHT OF FIRST REFUSAL

     28   

SECTION 38 OPTION TO EXTEND

     29   

SECTION 39 SECURITY DEPOSIT

     30   

SECTION 40 PARKING

     31   

 

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LEASE

THIS LEASE made this 30th day of May, 2003, between Sound Surgical Technologies
(“Tenant”), and McCaslin Plaza LLC (“Landlord”).

WITNESSETH:

DEMISE

Landlord does hereby lease to Tenant and Tenant hereby leases from Landlord an
approximate 8,475 rentable square feet known as Suite 100 (the “Premises,” or,
alternatively, the “Leased Premises”) located within McCaslin Plaza_(the
“Building”), which Building is situated on land described on Exhibit A (attach
legal) which has a municipal address of as 357 S McCaslin, (the “Property”),
together with a non-exclusive right, subject to the provisions of this Lease, to
use all appurtenances thereto, including, but not limited to, any plazas, common
areas, walks, ways or other areas in the Building or on the Property designated
by Landlord for the exclusive or non-exclusive use of the tenants of the
Building. The leased premises is calculated by taking approximately 7,567
useable square feet and applying an allocation of the common area (“load
factor”) which for the building is approximately twelve percent (12%).

While the Landlord feels the Rentable square feet, Useable square feet, and load
factors used in this Lease are accurate, changes may be required by the
architect or the City of Louisville which may affect these numbers. When
build-out is completed, Landlord shall have Tenant’s space measured again, and
any changes to Rentable square feet, Usable square feet, or load factor
calculations shall be made in an amendment to the lease, and subject to manifest
error in the remeasurement such revised numbers shall be agreed to by Landlord
and Tenant.

The Lease is upon and subject to the terms, conditions, and covenants set forth
below and Tenant covenants as a material part of the consideration for this
Lease to keep and perform each and all of the terms, conditions, and covenants
by it to be kept and performed and that this Lease is made upon the condition of
such performance.

SECTION 1

PURPOSE

1.01 Use of Premises. The Premises are to be used for general office use, and
for research on and development of electro-mechanical and electronic and similar
medical devices and component assembly of such devices, provided that such uses
comply with all zoning and use restrictions, and for no other purpose without
the prior written consent of Landlord.

 

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SECTION 2

TERM

2.01 Primary Term. The Term of this Lease shall be for a period of 62 months and
shall commence (the “Commencement Date”) on the later of (a) August 1, 2003 or
(b) subject to the provisions of Paragraph 2.01(a) completion of tenant
build-out requirements and receipt of a Temporary Certificate of Occupancy for
the Premises, and provided the Punch List Work does not materially interfere
with Tenant’s use of the Premises for its intended use. The Term of this Lease
will end on that date which is 62 months after the Commencement Date (“The
Primary Lease Term”.)

2.01 (a) Should Tenant, through the actions of Tenant, employee, agents,
contractors, subcontractors, guests, licensees, or invitees, impede, delay or in
some manner alter the aforementioned schedule for buildout, thus causing the
estimated occupancy date to move to a future date, then the Primary Lease Term
will commence on the estimated date specified in Section 2 of herein Lease, even
though a Temporary Certificate of Occupancy has not been received from the
Building Department of the City of Louisville.

SECTION 3

COMPLETION OF THE PREMISES

3.01 (SEE Space Plan. Addendum “A”) Landlord at its expense, shall construct the
space per the plan prepared by McDermott Planning & Design, Inc. submitted
June 4, 2003 and revised June 5, 2003 according to tenants specifications and as
mutually agreed upon by Tenant and Landlord.

SECTION 4

RENT

4.01 Base Rent. Tenant agrees to pay Landlord during the first full Lease Year
of the Primary Lease Term Base Rent at a rate of $12.50 per year per rentable
square foot for year one. Base Rent shall be payable in monthly installments of
1/12th of the annual Base Rent. Base Rent for months 1 and 2 of year one shall
be abated. Base Rent for the balance of the Primary Lease Term will be paid to
Landlord at the following rates:

 

Month 13-24

       $13.25 per rentable square foot per year (NNN)

Month 25-36

       $14.00 per rentable square foot per year (NNN)

Month 37-48

       $14.75 per rentable square foot per year (NNN)

Month 49-60

       $15.50 per rentable square foot per year (NNN)

Month 61-62

       $16.25 per rentable square foot per year (NNN)

 

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The first full monthly installment of Base Rent shall be payable 2 months after
Commencement Date and each succeeding monthly installment shall be due and
payable on or before the first day of each and every successive calendar month
thereafter during the Primary Lease Term. If the Commencement Date is on a day
other than the first calendar day of the month, Base Rent and Additional Rent
shall be prorated on a per diem basis.

4.02 No Offsets. The Base Rent and all other sums or charges required by this
Lease to be paid by Tenant to Landlord, (all of which are sometimes collectively
referred to as “Rent”) shall be paid to Landlord without deduction or offset, in
lawful money of the United States of America, at the office of O’Connor
Development, LLC 6685 Gunpark Drive, Suite 210, Boulder, Colorado 80301 or to
such other person or at such other place as Landlord may from time to time
designate in writing.

4.03 Interest on Late Payments. Any Rent or other amount due from Tenant to
Landlord under this Lease not paid within five (5) days of when due shall bear
interest from the date due, computed on a daily basis, until the date paid, at
the rate per year equal to the published prime or reference rate published in
the Money Rate section of The Wall Street Journal (the “Prime Rate”), then in
effect, plus three (3) percentage points until paid, but the payment of the
interest shall not excuse nor cure any default by Tenant under this Lease.

4.04 Late Payment Charge. Further, and notwithstanding the interest charges
provided for in the preceding subsection 4.03, if any Rent or other amounts
owing hereunder are not paid within five (5) days of when due, Landlord and
Tenant agree that Landlord will incur additional administrative and financial
expenses and inconveniences, the amount of which will be difficult if not
impossible to determine. Accordingly, Tenant shall pay to Landlord an additional
one-time late charge for any late monthly payment in the amount of five percent
(5%) of the amount of the payment.

4.05 Payment of Rent Increase. Until Tenant is advised of the adjustments in the
Base Rent, if any, pursuant to the provisions of paragraph 4.01, Tenant’s
monthly Base Rent shall continue to be paid at the then current rate (including
all prior rental adjustments). Tenant shall commence payment to Landlord of the
monthly installment of Base Rent on the basis of the adjustments so determined
beginning on the first day of the month following the month in which Landlord
advises Tenant of the increased Base Rent. In addition, Tenant shall pay to
Landlord on the date required for the first payment of Base Rent as adjusted,
the difference, if any, between the monthly installment of Base Rent so adjusted
and the monthly installments of Base Rent actually paid during the Base Rent
period to make up for the increased Base Rent between the first month that a
rental Increase is due and the first payment after notice of the increase.
Failure of Landlord to require any increase in the Base Rent for any calendar
year, or failure to require the full increase to which Landlord is entitled
shall not waive Landlord’s right to an adjustment of the Base Rent upon later
notification. Notwithstanding any other provisions of the Lease, if this Lease
is terminated prior to the end of the calendar year, for any reason, Tenant’s
obligations to pay rental adjustments for that portion of any calendar year
which has elapsed prior to termination shall survive the termination of the
Lease, whether by expiration or otherwise.

 

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SECTION 5

TAXES AND OPERATING COST ADJUSTMENT FORMULA

5.01 Additional Rent. In addition to Base Rent, Tenant shall reimburse Landlord
for the Taxes and Operating Costs of the Building in the manner, at the times,
and in the amounts set forth in this Section 5.

5.02(a) Taxes. The Rent payable by Tenant shall be increased by the amount of
“Tenant’s Proportional Share” of the Taxes on the Property. Tenant’s
Proportional Share shall be approximately 21% based upon Tenant’s occupancy of
approximately 8,475 square feet out of a total building rentable square feet of
approximately 40,505 rentable square feet. In determining the amount of Taxes
for any calendar year, the amount of special assessments to be included shall be
limited to the amount of the installment (plus any interest payable thereon) of
such special assessment which would have been required to have been paid during
such calendar year if Landlord had elected to have the special assessment paid
over the maximum period of time permitted by law, if the election is available
to Landlord. All reference to Taxes “for’ and “billed for” a particular calendar
year shall be deemed to refer to Taxes levied, assessed, billed or otherwise
imposed for such calendar year, without regard to the dates when any such Taxes
are due and payable.

(b) Definition. As used in this Lease, the term “Taxes” means any and all
general and special taxes and impositions of every kind and nature whatsoever
levied, assessed, or imposed upon, or with respect to, the Premises, any
leasehold improvements, fixtures, installations, additions and equipment,
whether owned by Landlord or Tenant, or either because of or in connection with
Landlord’s ownership, leasing and operation of the Building and the Property,
including, without limitation, real estate taxes, personal property taxes
applicable to personal property of the Landlord used exclusively in the
operation or maintenance of the Property, general or special assessments, and
duties or levies charged or levied upon or assessed against the Building and the
Property and personal property owned by the Landlord and used exclusively in the
operation or maintenance of the Property, or any tax or excise on rent or any
other tax (however described) on account of rental received for use and
occupancy of any or all of the Building and the Property, whether any such taxes
are imposed by the United States, the State of Colorado, the County of Boulder,
or any local governmental municipality, authority, or agency or any political
subdivision. Taxes shall not include any net income, capital stock, succession,
transfer, franchise, gift, estate or inheritance taxes.

 

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(c) Payment. Commencing with the first calendar month of this Lease, Tenant
shall pay to Landlord on the first day of each calendar month until the next
upward adjustment date (which period between adjustment dates is herein called a
“Tax Deposit Year”) one-twelfth of the estimated amount of the Taxes. Amounts
paid under this Subsection 5.02(c) in any Tax Deposit Year shall be reconciled
with amounts actually billed to Landlord for the same Tax Deposit Year, and
provided there is any surplus remaining after the credit to Tenant and provided
Tenant shall not then be in default under any of the provisions of this Lease,
Landlord shall, at Landlord’s option, either refund the amount of the surplus to
Tenant within thirty (30) days following the end of the Tax Deposit Year or
apply the surplus amount against any other amounts then due from Tenant to
Landlord. If upon the reconciliation there is any deficiency in the amount of
Taxes paid by Tenant, Landlord shall bill Tenant and Tenant shall pay the
additional amount within 30 days thereafter.

5.03(a) Inclusion in Operating Costs. Tenant shall pay its Proportional Share of
the Operating Costs for the Property. As used in this Lease, the term “Operating
Costs” means any and all expenses, costs and disbursements (other than Taxes) of
every kind and nature whatsoever, which are paid or accrued by Landlord in
connection with the management, maintenance, operation or repair of the
Building, including, without limitation:

(i) Costs of supplies;

(ii) Costs incurred in connection with obtaining and providing energy for the
building common area including, but not limited to, costs of propane, butane,
natural gas, steam, electricity, fuel oils, coal or any other energy sources
Premises is not separately metered for gas and electrical usage. Electrical
usage is separately sub-metered by Landlord to first floor then allocated to
Tenant based upon Tenant’s proportional share of leased rentable square feet
(excluding common area). Gas usage is billed proportionate to electrical usage.
Gas and electrical usage will be billed directly to Tenant by Landlord and will
not be included in Operating Cost. Landlord and Tenant to agree upon gas and
electrical allocation prior to signing Lease;

(iii) Costs of water and sanitary sewer and storm drainage services;

(iv) Costs of general maintenance and repairs, including costs of heating,
ventilation and air conditioning systems and the cost of exterior building and
roof maintenance and repairs;

(v) Cost of insurance;

(vi) Costs of maintenance and replacement of landscaping. Landscaping
replacement cost in excess of $5,000 shall be amortized over the useful life;

 

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(vii) Labor costs associated with operation, maintenance, and management of the
Building; and management fees.

(b) Exclusion from Operating Costs. “Operating Costs” shall not include:

(i) Costs of repairs or other work occasioned by fire, windstorm or other
insured casualty to the extent of insurance proceeds received;

(ii) Leasing commissions, advertising, advertising expenses, and other costs
incurred in leasing space in the Building;

(iii) Costs of repairs or building necessitated by condemnation;

(iv) Any interest on borrowed money or debt amortization, except as specifically
set forth above;

(v) Depreciation on the Building;

(vi) Any settlement, payment or judgment incurred by Landlord or the Building
manager due to their willful misconduct or negligence, as established by a court
of law, which is not covered by insurance proceeds;

(vii) Cost of any damage to the building caused directly by Landlord’s willful
misconduct or negligence, as established by a court of law, which is not covered
by insurance proceeds.

(viii) Cost of structural repairs or reconstruction of any portion of the
Building.

(ix) Costs of providing utility lines to the Building or repairing such lines if
they break (but not if they are plugged by Tenant’s usage).

(x) Repairs to the Property or Building which are effectuated through
replacement of a total cost in excess of $5,000 shall be amortized over the
useful life of such replacements.

(xi) If management of the Property or Building is provided by Landlord, the rate
charged shall be competitive with independent professional management providers
and, in any event, the management fee shall be limited to an amount equal to not
in excess of 5% of total Revenue.

(c) Warranties. Tenant shall be entitled to reimbursement for any amounts
collected by Landlord under any manufacturer’s warranty on any systems or
machinery used in the Building; provided that Tenant has previously paid to
Landlord the repair expense relating to Landlord’s warranty claim.

 

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(d) Payment. Beginning on the Commencement Date, Landlord shall supply Tenant
with written notice of Landlord’s estimate of the Operating Expenses that will
be incurred or accrued during the current calendar year (the “Deposit Year”). On
or before the first day of each month during such Deposit Year, Tenant shall pay
to Landlord one-twelfth of Tenant’s Proportionate share of the estimated amount.
If the monthly deposit amount is not determined in time for Tenant to make the
first payment on January 1 of the Deposit Year, then the first monthly payment
shall be due on the first day of the month immediately following the date
Landlord supplies Tenant with notice of the amount and the first monthly
payment(s) shall also include a payment equal to one-twelfth of such additional
sum multiplied by the number of calendar months which have elapsed during the
Deposit Year prior to the date Tenant makes its first payment. If the total of
the estimated payments made by Tenant during the Deposit Year are less than
Tenant’s obligation under this Lease for Operating Costs for the Deposit Year,
then Tenant, within thirty (30) days of the billing therefor, shall pay the
deficiency to Landlord. If the total of the Tenant’s estimated payments for the
Deposit Year exceed Tenant’s obligation for excess Operating Costs for such
year, then the surplus shall be handled in the manner provided in the second to
last sentence of Section 5.02(c).

5.04 Audit and Adjustment Procedures.

(a) The annual determination and statement of Taxes and Operating Costs shall be
prepared in accordance with generally accepted accounting principles
consistently applied. In the event of any dispute as to any Additional Rent due
under this Lease, Tenant shall have the right to inspect Landlord’s accounting
records relative to Taxes and Operating Costs at the office in which Landlord
maintains its records during normal business hours at any time following the
furnishing by Landlord to Tenant of the statement. Any errors shall be adjusted
accordingly.

(b) If the Term of this Lease commences on any day other than the 1st day of the
month, or if the Term of this Lease ends on any day other than the last day of
the month, any payment due to Landlord by reason of an increase in Taxes or
Operating Costs shall be prorated on the basis by which the number of days in
such partial year bears to 365.

(c) All sums which Tenant is required to pay or discharge pursuant to Section 5
of this Lease in addition to Base Rent, together with any interest or other sums
which may be added for late payment, shall constitute “Rent”.

5.05 Operating Costs for the 2003 calendar year shall be capped at five dollars
($5.00) per square foot of rentable square feet unless Landlord constructs a
work-out facility with lockers in the basement of the Building, in which case
Operating Costs shall not exceed, and shall be capped at $5.90 per rentable
square foot for the first Lease Year. After 2003 calendar year, Operating
Expenses subject to the reasonable control of Landlord shall not be increased by
more than three percent (3%) above the previous Year’s Operating Expenses
subject to the reasonable control of Landlord and to the extent the increase
exceeds 3%, they shall be capped at 3%. Landlord and Tenant agree that Operating
Costs not controlled by Landlord include property taxes and insurance, provided
that Landlord agrees to use its reasonable best efforts to contain cost
increases in those areas.

 

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SECTION 6

HOLDING OVER

6.01 Rent Increase. Should Tenant hold over after the termination of this Lease,
whether the termination occurs by lapse of time or otherwise, Tenant shall
become a tenant from day-to-day upon each and all of the terms herein provided
as may be applicable to such a tenancy, and any such tenancy shall not
constitute an extension of this Lease; provided, however, during the period as a
tenant from day-to-day, Tenant shall pay Base Rent at 120% the rate payable for
the month immediately preceding the date of termination of this Lease for the
first two (2) holdover months and 140% the rate payable for the month
immediately preceding the date of termination of this Lease for the balance of
the holdover months and, in addition, Tenant shall reimburse Landlord for all
damages (consequential, as well as direct), of which Landlord has given prior
notice to Tenant, sustained by it by reason of Tenant’s occupying the Premises
past the termination date. Alternatively, at the election of Landlord and
expressed in a written notice to Tenant and not otherwise, the retention of
possession past the termination date shall constitute a month-to-month tenancy
upon each and all of the terms of this Lease as may be applicable to a
month-to-month tenancy. The provisions of this paragraph shall not exclude nor
waive Landlord’s right of re-entry or any other right hereunder.

SECTION 7

BUILDING SERVICES

7.00 HVAC Services. Landlord agrees to provide heating, ventilating and air
conditioning to the Premises during normal Building hours of 7:00 a.m. to 7:00
p.m. Monday through Friday and 8:00 a.m. to Noon on Saturday and Sunday. Tenant
may also obtain HVAC services for extended hours at rates of $19.00 per hour.

7.01 Interruption of Standard Services. Tenant agrees that Landlord shall not be
liable for failure to supply any heating, air conditioning, janitorial services,
electric current, or any other utility during any period when Landlord uses
reasonable diligence to restore or to supply such services or utility, provided
such interruption is not due to Landlord’s negligence, in which case Rent shall
be abated during such period of interruption of service. If despite such
exercise of reasonable diligence, interruption to HVAC and electricity continues
for a period in excess of 96 consecutive hours and Tenant does not substantially
occupy Premises due to interruption, then Tenant shall be entitled to an
abatement of Rent until the service is restored. Landlord reserves the right to
temporarily discontinue such services at times as may be necessary by reason of
accident, repairs, alterations, or improvements, or whatever by reason of
strikes, lockouts, riots, acts of God, or any other happening or occurrence
beyond the reasonable control of Landlord, provided such discontinuance does not
substantially interfere with Tenant’s business operations.

 

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7.02 Telephone. Tenant shall separately arrange with the applicable local public
authorities or utilities, as the case may be, for the furnishing of and payment
for all telephone services as may be required by Tenant in the use of the
Premises. Tenant shall directly pay for such telephone services, including the
establishment and connection thereof, at the rates charged for the services by
the authority or utility, and the failure of Tenant to obtain or to continue to
receive the services for any reason whatsoever shall not relieve Tenant of any
of its obligations under this Lease. Landlord shall supply sufficient telephone
lines into the Building for Tenant’s connection.

7.03 Above-Standard Service Requirements. If heat-generating machines or any
equipment cause the temperature in the Premises, or any part, to exceed the
temperatures that the Building’s air conditioning and other cooling systems
would be able to maintain in the Premises were it not for the heat-generating
equipment then Landlord reserves the right to install supplementary air
conditioning units in the Premises, and the cost, including the cost of
installation and the cost of operation and maintenance thereof, shall be paid by
Tenant to Landlord upon demand by Landlord. If Tenant requires electric current,
water, or any other energy in excess of that which is reasonably obtainable from
existing electrical outlets or water pipes, and which is, in Landlord’s opinion,
above normal for use of the Premises, Tenant shall first procure the consent of
Landlord, which Landlord may not unreasonably refuse. If Landlord consents to
such excess electric, water, or other energy requirements, Tenant shall, on
demand, pay all costs of meter service and installation of facilities necessary
to measure and/or furnish such excess capacity. Tenant shall also pay the entire
cost of such additional electricity, water, or other energy used.

SECTION 8

CONDITION OF PREMISES

8.01 Acceptance Upon Possession. Tenant, by taking possession of the Premises,
shall be deemed to have agreed that the Premises were, as of the date of taking
possession, in good order, repair, and condition and satisfactorily completed in
accordance with Landlord’s obligations under this Lease. Except for those punch
list items provided by Tenant to Landlord within 30 days thereof, no promise of
Landlord to alter, remodel, decorate, clean or improve the Premises, the
Building, or the Property and no representation or warranty, express or implied,
respecting the condition of the Premises, the Building, or the Property has been
made by Landlord to Tenant, unless the same is contained in this Lease, the Work
Agreement, the Plans or some other written agreement. This Lease does not grant
any rights to light or air over the Premises or the property.

 

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SECTION 9

USE OF LEASED PREMISES

9.01 Use. The Leased Premises shall not be used other than for the purpose set
forth in Section 1 of this Lease. Tenant’s use shall at all times comply with
all applicable laws, ordinances, regulations, or other governmental ordinances
in existence.

9.02 Hazardous Use. Tenant agrees that it will not keep, use, sell or offer for
sale in or upon the Leased Premises any article which may be prohibited by any
insurance policy in force from time to time covering the Building. In the event
Tenant’s occupancy or conduct of business in or on the Leased Premises, whether
or not Landlord has consented to the same, results in any increase in premiums
for the insurance carried from time to time by Landlord with respect to the
Building, Tenant shall pay any such increase in premiums as Rent within ten
(10) days after bills for such additional premiums shall be rendered by
Landlord. Tenant shall promptly comply with all reasonable requirements of the
insurance authority or of any insurer now or hereafter in effect relating to the
Leased Premises.

9.03 No Waste. Tenant shall not commit, suffer, nor permit any waste, damage,
disfiguration, or injury to the Leased Premises or the Building’s common areas
or the fixtures and equipment located in or on the Building, or permit or suffer
any overloading of the floors and shall not place any safes, heavy business
machinery, or other heavy things in the Premises other than as specifically
provided for in the Work Agreement and Plans, without first obtaining the
written consent of Landlord and, if required by Landlord, of Landlord’s
architect, and shall not use or permit to be used by any part of the Leased
Premises for any dangerous, noxious, or offensive trade or business, and shall
not cause or permit any nuisance, noise, or action in, at, or on the Leased
Premises.

9.04 Protection Against Insurance Cancellation. If any insurance policy on the
Building or any part thereof shall be canceled or if cancellation shall be
threatened, or if the coverage shall be reduced or be threatened to be reduced,
in any way by reason of the use or occupation of the Leased Premises or any part
thereof by Tenant for any purpose or in any manner other than that permitted in
Subsection 1.01 of this Lease, or by any assignee or subtenant of Tenant, or by
anyone permitted by Tenant to be upon the Leased Premises, and if Tenant fails
to take reasonable efforts to remedy the condition giving rise to the
cancellation, threatened cancellation, reduction, or threatened reduction of
coverage within forty-eight (48) hours after notice or to complete the remedy
within ten (10) days after notice, Landlord may, at its option, enter upon the
Leased Premises and attempt to remedy the condition, and Tenant shall forthwith
pay the cost to Landlord as additional Rent. Landlord shall not be liable for
any damage or injury caused to any property of Tenant or of others located on
the Leased Premises as a result of such entry unless such damage or injury is a
result of Landlord’s gross negligence.

 

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SECTION 10

COMPLIANCE WITH LAW

10.01 Compliance. 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, statues, 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 underwriters or other similar
body 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.

SECTION 11

ALTERATIONS AND REPAIRS

11.01 Tenant to Maintain. Tenant shall, at its sole expense, keep the Premises
in good repair and tenantable condition during the Term of this Lease. Except in
the case of alterations or repairs, the cost of which will be less than $5,000,
that will not affect any electrical circuit, roof or structural component, in
which case no Landlord approval shall be required, otherwise Tenant shall not,
without the prior written consent of the Landlord, whose consent shall not be
unreasonably withheld so long as Tenant demonstrates financial assurance of its
ability to restore the Premises to original condition, make any alterations,
improvements, or additions to the Premises, including, but not limited to,
partitions, wall coverings, floor coverings, and special lighting or equipment
installations. Prior to commencement of any alterations, improvements, or
additions, Tenant shall submit to Landlord a set of fully detailed working
drawings and specifications for the proposed alteration, prepared by a licensed
architect, or engineer, approved by the landlord. In particular, but not as a
limitation, the working drawings must fully detail changes to mechanical,
wiring, and electrical, lighting, plumbing, and HVAC systems to Landlord’s
satisfaction. Landlord may refuse to consent to the alterations because of the
inadequacy of the drawings and specifications. As a condition of approval for
such alterations, Landlord shall have the right to require Tenant to furnish
adequate bond or other security acceptable to Landlord for performance of and
payment for the work to be performed. All alterations, improvements, or
additions, whether temporary or permanent in character, made by Landlord or
Tenant in or upon the Premises shall become Landlord’s property and shall remain
upon the Premises at the termination of this Lease by lapse of time or
otherwise, without compensation to Tenant (excepting only Tenant’s movable
office furniture, fixtures capable of removal without causing permanent damage
to the Premises, trade fixtures, and office and professional equipment or other
personal property). Landlord shall have the right to require Tenant to remove
the alterations, improvements, or additions at Tenant’s cost upon the
termination of this Lease, and the repair of any damage caused to the Premises
or the Building as a result of any removal shall be paid for by Tenant. Tenant
shall promptly pay to Tenant’s contractors, when due, the cost of all work and
of all decorating, and upon completion, deliver to Landlord, if payment is made
directly to Tenant’s contractors, evidence of payment and waivers of all liens
for labor, services, or materials. Tenant shall defend and hold Landlord, the
Premises, the Building, and the Property harmless from all costs, damages, liens
for labor, services, or materials relating to the work, and shall defend and
hold Landlord harmless from all costs, damages, liens, and expenses related to
the work. If Landlord incurs any expenses in the removal of trash or cleaning as
a result of Tenant’s contractor’s work, then Tenant agrees it shall reimburse
Landlord within seven (7) days of billing.

 

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11.02 Protection Against Liens. At least five (5) days prior to the commencement
of any work on the Leased Premises, Tenant shall notify Landlord of the names
and addresses of the persons supplying labor and materials for the proposed work
so that Landlord may avail itself of the provisions of statutes such as
Section 38-22-105(2) of the Colorado Revised Statutes (1973), or any successor
statutory provision. During the progress of any work on the Leased Premises,
Landlord or its representatives shall have the right to post and keep posted
thereon notices such as those provided for by Sections 38-22-105(2) (C.R.S.
1973) or to take any further action which Landlord may deem to be proper for the
protection of Landlord’s interest in the Leased Premises. As a condition of
approval for such alterations, Landlord shall have the right to require Tenant
to post a performance and completion bond for the benefit of Landlord in an
amount equal to one and one-half times the cost of the work to be performed,
provided that the total cost of the work exceeds $10,000.00.

11.03 Condition on Surrender. Tenant shall, at the termination of this Lease,
surrender the Premises to Landlord in as good condition and repair as reasonable
and proper use will permit, loss by ordinary wear and tear, fire, and other
insured against casualty excepted, and in the state of broom cleanliness.

11.04 Damage by Tenant. If any part of the Building or other improvements become
damaged or are destroyed through the negligence, carelessness, or misuse of
Tenant, its servants, agents, employees, or anyone permitted by Tenant to be in
the Building, or through Tenant or such parties, then the cost of necessary
repairs, replacements, or alterations shall be borne by Tenant, who shall, on
demand, forthwith pay the same to Landlord as Rent.

SECTION 12

ABANDONMENT

12.01 Disposition of Personal Property. Tenant shall not at any time remove
Landlord’s property or any fixtures constituting property of Landlord from the
Premises. Any removal of Landlord’s property from the Premises by Tenant shall
constitute a material breach of this Lease and Landlord shall have the right to
take all reasonable steps to stop or prevent such breach without such actions
constituting a constructive eviction of Tenant.

 

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SECTION 13

ASSIGNMENT AND SUBLETTING

13.01 Limitation on Assignment or Subletting. Tenant shall not assign this
Lease, or any interest therein, and shall not sublet the Premises, or any part
thereof, or any right or privilege appurtenant thereto, or shall not suffer any
other person to occupy or use the Premises, or any portion thereof, without the
written consent of Landlord, which consent may not be unreasonably withheld.
Notwithstanding such limitation, Tenant shall have the right to assign its
interest under this Lease to any entity in which Tenant owns a majority interest
and controls the management thereof. Such assignment will not relieve Tenant of
any liability under Lease and Letter of Credit given as security in accordance
with Section 39 of Lease will remain in force. Neither this Lease nor any
interest therein shall be assignable as to the interest of Tenant by operation
of law without the written consent of Landlord, which consent may not be
unreasonably withheld.

13.02 Acceptance of Performance; No Waiver. If this Lease is assigned, or if the
Premises or any part are sublet or occupied by anybody other than Tenant,
Landlord may, upon default by Tenant, collect the Rent from the assignee,
subtenant, or occupant and apply the net amount collected to the Rent. Upon
assignment pursuant to the terms of this section, Tenant shall be relieved of
further liability under this Lease as to the assigned premises. Consent by
Landlord to any one assignment or subletting shall not in any way be construed
as relieving Tenant from obtaining the Landlord’s expressed written consent to
any further assignment or subletting.

13.03 Landlord to Approve Documents. All documents utilized by Tenant to
evidence any subletting or assignment to which Landlord has consented shall be
subject to prior approval by Landlord or its attorney. Tenant shall pay on
demand all Landlord’s costs and expenses, including reasonable attorneys’ fees,
incurred in determining whether or not to consent to any requested subletting or
assignment and in reviewing and approving such documentation which shall not
exceed $500 in the aggregate.

SECTION 14

SIGNS AND ADVERTISING

14.01 Tenant shall not install, paint, display, inscribe, place, or affix any
sign, picture, advertisement, notice, lettering, or direction in the interior of
the Leased Premises which is visible from the outside of the Building, or on the
exterior of the Building (i) without the prior written consent of Landlord
unless provided for in the Plans, or (ii) which does not comply with all
regulations of applicable governmental agencies. Tenant shall be permitted at
Tenant’s expense, to place and maintain a Building standard sign with Tenant’s
name and logo on the sign pillar in the courtyard of the Building, and to place
a name placard on or adjacent to the front entrance door of the Premises of the
same style and size as Landlord adopts as Landlord’s building standard, with
Landlord approval as to form and style, which will not be unreasonably withheld.

 

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SECTION 15

DAMAGE TO PROPERTY, INJURY TO PERSONS

15.01 Damage by Tenant. Tenant agrees to pay for all damage to the Building or
the Premises, as well as all damage to tenants or occupants thereof caused by
Tenant’s misuse or neglect of the Premises, its apparatus or appurtenances, or
caused by any licensee, contractor, agent, or employee of Tenant.
Notwithstanding the foregoing provisions, neither Landlord nor Tenant shall be
liable to one another for any loss, damage, or injury caused by its act or
neglect to the extent that the other party has recovered the amount of such
loss, damage, or injury from an insurer and the insurance company is bound by
this waiver of liability.

15.02 Tenant’s Property. Particularly, but not in limitation of the foregoing
paragraph, all property belonging to Tenant, or any occupant of the Premises,
that is in the Building or the Premises, shall be there at the risk of Tenant or
other person only, and Landlord or its agents or employees (except in the case
of gross negligence or willful misconduct of Landlord or its agents or
employees) shall not be liable for: (i) damage to or theft or misappropriation
of such property; (ii) any damage to property entrusted to Landlord, its agents,
or employees, if any; (iii) loss of or damage to any property by theft or
otherwise, by any means whatsoever; (iv) any injury or damage to persons or
property resulting from fire, explosion, falling plaster, steam, gas,
electricity, snow, hail, water, or rain which may leak from any part of the
Building or from the pipes, appliances, or plumbing works therein or from the
roof, street, subsurface, or from any other place, or resulting from dampness or
any other cause whatsoever; or (v) interference with the light, air, or other
incorporeal hereditament. Tenant shall give prompt notice to Landlord in case of
fire or accidents in the Premises or in the Building or of observed defects in
the Building, its fixtures or equipment.

SECTION 16

TENANT’S INSURANCE

16.01 Insurance. Tenant shall, during the entire Term of this Lease, at its sole
cost and expense, obtain, maintain, and keep in full force and effect the
following types of insurance:

 

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(a) All risk business coverage insurance, including endorsements for vandalism,
malicious mischief, theft, sprinkler leakage, covering all of Tenant’s property,
including, but not limited to, furniture, fittings, equipment, installations,
alterations, additions, partitions and fixtures, in an amount equal to the full
replacement cost of such property without deduction for depreciation. If there
is a dispute as to the amount which comprises full replacement cost, the
decision of Landlord shall be conclusive;

(b) Commercial general liability insurance, including bodily injury and property
damage, personal injury, contractual liability with respect to all claims,
demands, or actions by any person, firm, or corporation, in any way arising
from, related to, or connected with the conduct and operation of Tenant’s
business in the Premises or Tenant’s use of the Premises. Such policies shall be
written on a comprehensive basis, with limits not less than $1,000,000.00, and
such higher limits as Landlord or the mortgagees of Landlord may require from
time to time, but may not be unreasonably required;

(c) Any other form or forms of insurance as the mortgagees of Landlord may
reasonably require from time to time in form, in amounts and for insurance risks
against which a prudent tenant would protect itself;

(d) Business interruption insurance in such amounts as will reimburse the Tenant
for direct or indirect loss of earning attributable to all perils commonly
insured against by prudent tenants or attributable to prevention of access to
the Premises or to the Building as a result of such perils.

16.02 Evidence. All policies shall be taken out with insurers reasonably
acceptable to Landlord and in form reasonably satisfactory from time to time to
Landlord. Tenant agrees that certificates of insurance or, if required by
Landlord or the mortgagees of Landlord, copies of each such insurance policy
will be delivered to Landlord as soon as practicable after the placing of the
required insurance, but in no event later than five (5) days after Tenant takes
possession of all or any part of the Leased Premises. All policies shall require
that at least thirty (30) days’ prior written notice be delivered to Landlord by
the insurer prior to termination, cancellation, or material change in such
insurance.

16.03 Proceeds. Tenant agrees that in the event of damage or destruction to the
leasehold improvements in the Leased Premises covered by insurance required to
be taken out by Tenant pursuant to this Section, Tenant shall use the proceeds
of the insurance for the purpose of building leasehold improvements as mutually
agreed upon between Landlord and Tenant. If Landlord and Tenant cannot agree as
to the new improvements within thirty (30) days, then Tenant shall replace the
identical improvements that were destroyed. In the event of damage or
destruction of the Building entitling the Landlord to terminate this Lease
pursuant to Section 17, then, if the Leased Premises have also been damaged,
Tenant will pay to Landlord all of its insurance proceeds relating to the
leasehold improvements in the Leased Premises, and if the Leased Premises have
not been damaged, Tenant will deliver to Landlord, in accordance with the
provisions of this Lease, the leasehold improvements and the Leased Premises.

 

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SECTION 17

DAMAGE OR DESTRUCTION

17.01 Right to Terminate. If the Premises or the Building are damaged by fire or
other insured casualty, and the insurance proceeds have been made available by
the holder or holders of any mortgages or deeds of trust covering the Building,
the damage shall be repaired by and at the expense of Landlord to the extent of
such insurance proceeds available, provided such repairs can, in Landlord’s
reasonable discretion, be completed within one hundred twenty (120) days after
the occurrence of such damage, without the payment of overtime or other
premiums. Until the repairs are completed, the Rent shall be abated in
proportion to the part of the Premises which is unusable by Tenant in the
conduct of its business; provided, however, if the damage is due to the fault or
neglect of Tenant or its employees, agents, or invitees, there shall be no
abatement of Rent. If repairs cannot, in Landlord’s reasonable discretion, be
made within said one hundred twenty (120) day period, Landlord shall notify
Tenant within sixty (60) days of the date of occurrence of the damage as to
whether or not Landlord elects to make the repairs. If Landlord elects not to
make the repairs, then either party may, by written notice to the other, cancel
this lease as of the date of the occurrence of the damage. Except as provided in
this Section 17, there shall be no abatement of Rent and no liability of
Landlord by reason of any injury, inconvenience, temporary limitation of access
or interference to or with Tenant’s business or property arising from the making
of any necessary repairs, or any alterations or improvements in or to any
portion of the Building or the Premises, or in or to fixtures, appurtenances,
and equipment therein necessitated by the damage. Tenant understands that
Landlord will not carry insurance of any kind on Tenant’s furniture and
furnishings or on any fixtures or equipment removable by Tenant under the
provision of this Lease, and that Landlord shall not be required to repair any
injury or damage caused by fire or other cause, or to make any repairs or
replacements to or of improvements installed in the Premises by or for Tenant at
Tenant’s cost.

17.02 Landlord’s Insurance. Landlord covenants and agrees that, throughout the
Lease Term, it will insure the Building (excluding foundations, excavations and
other non-insurable items) and the machinery, boilers, and equipment contained
therein owned by Landlord (excluding any property with respect to which Tenant
is obliged to insure pursuant to the provisions of Section 16 thereof) against
damage by fire and extended perils coverage in such reasonable amounts as would
be carried by a prudent owner of a similar property in the same locale. Landlord
will also, throughout the Term, carry commercial general liability, property
damage and loss of rent insurance with respect to the operation of the Premises
in reasonable amounts as would be carried by a prudent owner of a similar
property in the same locale. Landlord may, but shall not be obligated to, take
out and carry any other form or forms of insurance as it or the mortgagees of
Landlord may reasonably determine to be advisable. The cost of all such
insurance carried by Landlord shall be an Operating Cost, provided that such
insurance is not duplicative of the insurance obtained pursuant to
Section 16.01, and Tenant shall pay its pro rata share for such Operating Cost
as provided in Section 5 of this Lease.

 

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Notwithstanding any contribution by Tenant to the cost of insurance premiums,
Tenant acknowledges that it has no right to receive any proceeds from the
insurance policies carried by Landlord, and that the insurance will be for the
sole benefit of Landlord, with no coverage for Tenant for any risk insured
against.

SECTION 18

ENTRY BY LANDLORD

18.01 Landlord and its agents, upon giving 24 hours notice, shall have the right
to enter the Premises during normal business hours for the purpose of examining
or inspecting the same, to supply any services to be provided by Landlord to
Tenant hereunder, to show same to prospective purchasers or within the last 6
months of the Lease Term to show same to tenants of the Premises, and to make
such alterations, repairs, improvements, or additions, whether structural or
otherwise, to the Premises or to the Building as Landlord may deem necessary or
desirable. Landlord may enter by means of a master key, without liability to
Tenant except for any failure to exercise due care for Tenant’s property, and
without affecting this Lease. Landlord shall use reasonable efforts on any such
entry not to unreasonably interrupt or interfere with Tenant’s use and occupancy
of the Premises. Landlord may enter the Premises at any time in the case of an
emergency.

SECTION 19

DEFAULT BY TENANT

19.01 Events of Default. Each one of the following events is referred to as an
“Event of Default”:

(a) Tenant shall fail to make due and punctual payment of Rent or an other
amounts payable hereunder, and such failure shall continue for fifteen (15) days
after receipt of written notice from Landlord.

(b) Tenant shall remove leasehold improvements or fixtures constituting property
of Landlord;

(c) This Lease shall be transferred to or shall pass to or devolve upon any
other person or party except in the manner set forth in Section 13;

(d) This Lease or the Premises or any part thereof shall be taken upon execution
or by other process of law directed against Tenant, or shall be taken upon or
subject to any attachment at the instance of any creditor of, or claimant
against Tenant, and said attachment shall not be discharged or disposed of
within thirty (30) days after the levy;

 

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(e) The filing of any petition or the commencement of any case or proceeding by
the Tenant under any provision or chapter of the Federal Bankruptcy Act, the
Federal Bankruptcy Code or any other federal or state law relating to
insolvency, bankruptcy or reorganization; or the adjudication that the Tenant is
insolvent or bankrupt, or the entry of an order for relief under the Federal
Bankruptcy Code with respect to Tenant;

(f) The filing of any petition or the commencement of any case or proceeding
described in Subsection (e) above against the Tenant, unless the petition and
all proceedings initiated thereby are dismissed within sixty (60) days from the
date of the

filing; the filing of an answer by Tenant admitting the allegations of any such
petition; or the appointment of or taking possession by a custodian, trustee or
receiver for all or any assets of the Tenant, unless such appointment is vacated
or dismissed within sixty (60) days from the date of such appointment or taking
of such possession.

(g) Tenant shall fail to perform any of the other agreements, terms, covenants
or conditions of this Lease on Tenant’s part to be performed, and such
non-performance shall continue for a period of thirty (30) days after written
notice by Landlord to Tenant, or if such performance cannot be reasonably had
within such thirty (30) day period, Tenant shall not in good faith have
commenced such performance within such thirty (30) day period and shall not
thereafter diligently proceed to completion.

19.02 Remedies of Landlord. If any one or more Events of Default shall happen,
then so long as such Events of Default remain uncured Landlord shall have the
rights specified in this Subsection 19.02; provided, that if an Event of Default
remains uncured for thirty (30) days (or if an Event of Default is not capable
of being cured within such thirty (30) days but is capable of being cured within
a longer time, Tenant fails within such thirty (30) days to initiate action that
reasonably can be expected to cure such Event of Default as promptly as
reasonably practicable or having so initiated such action, fails diligently to
pursue such action to conclusion), then thereafter Landlord, in its sole
discretion, may accept a cure tendered by Tenant, in which case, as long as the
cure is followed through to completion, Landlord waives its right to pursue its
remedies under this Section 19.02 with respect to that particular Event of
Default only and not with respect to any other Event of Default. At Landlord’s
election, or at any time thereafter without demand or notice, Landlord may
reenter and take possession of the Premises or any part thereof and repossess
the same as Landlord’s former estate and expel Tenant and those claiming through
or under Tenant, and remove the effects of both or either, without being deemed
guilty of any manner of trespass, and without prejudice to any remedies for
arrears of rent or breach of covenants or prior conditions and without
terminating this Lease. Should Landlord elect to reenter as provided in this
Subsection, or should Landlord take possession pursuant to legal proceedings or
pursuant to any notice provided for by law including a proceeding for possession
pursuant to Colorado’s Forcible Entry and unlawful Detainer Statutes, Landlord
may, from time to time, without terminating this Lease either;

(a) (i) Relet the Premises or any part thereof in Landlord’s or Tenant’s name,
but for the account of Tenant, for a term or terms (which may be greater or less
than the period which would otherwise have constituted the balance of the term
of this Lease) and on conditions and upon other terms (which may include
concessions of free rent and alteration and repair of the Premises) as Landlord,
in its sole discretion, may determine, and Landlord may collect and receive the
rents. Landlord shall use reasonable efforts to relet the Premises. No reentry
or taking possession of the Premises by Landlord shall be construed as an
election on Landlord’s part to terminate this Lease unless a written notice of
such intention be given to Tenant. No notice from Landlord hereunder or under a
forcible entry and unlawful detainer statute or similar law shall constitute an
election by Landlord to terminate this Lease unless such notice specifically so
states. Landlord reserves the right following any reentry and/or reletting to
exercise its right to terminate this Lease by giving Tenant written notice, in
which event the Lease will terminate as specified in the notice.

 

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(ii) If Landlord elects to take possession of the Premises as provided in this
Subsection (a) without terminating the Lease, Tenant shall pay to Landlord
(1) the Rent and other sums due under this Lease which would be payable if
repossession had not occurred, less (2) the net proceeds, if any, of any
reletting of the Premises after deducting all Landlord’s expenses in connection
with the reletting, including, but without limitation, all repossession costs,
brokerage commissions, legal expenses, attorneys’ fees, expenses of employees,
alteration, remodeling and repair costs and expenses of preparation of the
reletting. Landlord shall use reasonable efforts to relet the Premises. If, in
connection with any reletting, the new lease terms extends beyond the existing
term, or the premises covered include other premises not part of the Premises, a
fair apportionment of the rent received from the reletting and the expenses
incurred in connection with the reletting will be made in determining the net
proceeds received from reletting. In addition, in determining the net proceeds
from reletting, any rent concession will be apportioned over the term of the new
Lease; or

(b) To give Tenant written notice of intention to terminate this Lease on the
date of the notice, or on any later date specified in the notice. Tenant’s right
to possession of the Premises shall cease and the Lease shall thereupon be
terminated, except as to Tenant’s liability under this Lease, as if the
expiration of the term fixed in the notice were the end of the term originally
demised, and if Tenant has exercised an Option to Extend, then including as
extended by the exercise of any options granted to Tenant. If this Lease is
terminated pursuant to the provisions of this Subsection (b), or terminated
pursuant to a proceeding for possession under the Colorado Forcible Entry and
Unlawful Detainer Statutes, Tenant shall remain liable to Landlord for damages
in an amount equal to the Rent and other sums which would have been owing by
Tenant under this Lease for the balance of the Term had this Lease not been
terminated, less the net proceeds, if any, of any reletting of the Premises by
Landlord subsequent to the termination, after deducting all Landlord’s expenses
in connection with such reletting, including, but without limitation, the
expenses enumerated in Subsection (a) above. Landlord shall use reasonable
efforts to relet the Premises and maximize the income generated by the Premises.
Landlord shall be entitled to collect damages from Tenant monthly on the days on
which the Rent and other amounts would have been payable if this Lease had not
been terminated.

 

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19.03 Cumulative Remedies. Suit or suits for the recovery of the Rent and other
amounts and damages may be brought by Landlord, from time to time, at Landlord’s
election, and nothing in this Lease shall be deemed to require Landlord to await
the date when this Lease or its Term would have expired by limitation had there
been no default by Tenant, or no termination, as the case may be. Each right and
remedy provided for in this Lease shall be cumulative and shall be in addition
to every other right or remedy provided for in this Lease or now or hereafter
existing at law or in equity or by statute or otherwise including but not
limited to suits for injunctive relief and specific performance. The exercise or
beginning of the exercise by Landlord of any one or more of the rights or
remedies provided for in this Lease or now or hereafter existing at law or in
equity by statute or otherwise shall not preclude the simultaneous or later
exercise by Landlord of any or all rights or remedies provided for in this Lease
or now or hereafter existing at law or in equity or by statute or otherwise. All
such rights and remedies shall be considered cumulative and non-exclusive. All
costs incurred by Landlord in connection with collecting any Rent or other
amounts and damages owing by Tenant pursuant to the provisions of this Lease, or
to enforce any provision of this Lease, and subject to Section 28, such costs
shall include reasonable attorney’s fees from the date such matter is turned
over to an attorney, whether or not one or more actions are commenced by
Landlord, shall also be paid by Tenant to Landlord.

19.04 No Waiver. No failure by Landlord to insist upon the strict performance of
any agreement, term, covenant or condition of this Lease or to exercise any
right or remedy consequent upon a breach, and no acceptance of full or partial
payment of Rent during the continuance of any breach, shall constitute a waiver
of any breach or of the agreement to be performed or complied with by Tenant,
and no breach shall be waived, altered or modified except by written instrument
executed by Landlord. No waiver of any breach shall affect or alter this Lease,
but each and every agreement, term, covenant and condition shall continue in
full force and effect with respect to any other then existing or subsequent
breach. Notwithstanding any termination of this Lease, the same shall continue
in force and effect as to any provisions which require observance or performance
by Landlord or Tenant subsequent to such termination.

19.05 Bankruptcy. Nothing contained in this Section 19 shall limit or prejudice
the right of Landlord to prove and obtain as liquidated damages in any
bankruptcy, insolvency, receivership, reorganization or dissolution proceeding,
an amount equal to the maximum allowed by any statute or rule of law governing
such a proceeding, and in effect at the time when such damages are to be proved,
whether or not the amount is greater, equal to or less than the amounts
recoverable, either as damages or Rent, referred to in any of the preceding
provisions of this Section. Notwithstanding anything contained in this Section
to the contrary, any such proceeding or action involving bankruptcy, insolvency,
reorganization, arrangement, assignment for the benefit of creditors, or
appointment of a receiver or trustee, as set forth above, shall be considered to
be an event of default only when the proceeding, action or remedy shall be taken
or brought by or against the then holder of the leasehold estate under this
Lease.

 

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SECTION 20

TAXES

20.01 During the Term hereof, Tenant shall pay, prior to delinquency, all
business and other taxes, charges, notes, duties and assessments levied, and
rates or fees imposed, charged, or assessed against or in respect of Tenant’s
occupancy of the Leased Premises or in respect of the personal property, trade
fixtures, furnishings, equipment, and all other personal property of Tenant
contained in the Premises, and shall hold Landlord harmless from and against all
payment of such taxes, charges, notes, duties, assessments, rates, and fees, and
against all loss, costs, charges, and expenses occasioned by or arising from any
and all such taxes, charges, notes, duties, assessments, rates, and fees. Tenant
shall cause the fixtures, furnishings, equipment and other personal property to
be assessed and billed separately from the real and personal property of
Landlord. If any or all of Tenant’s fixtures, furnishing, equipment, and other
personal property shall be assessed and taxed with Landlord’s real property,
Tenant shall pay to Landlord Tenant’s share of such taxes within ten (10) days
after delivery to Tenant by Landlord of a statement in writing setting forth the
amount of such taxes applicable to Tenant’s property. Tenant shall also timely
provide Landlord with copies of any correspondence or tax bill pertaining to any
tax that is not paid when due according to the taxing authority. All of the
above documents shall be considered confidential and only disclosed or used for
Landlord’s appropriate business purposes.

SECTION 21

EMINENT DOMAIN

21.01 If the Building, or a substantial part thereof, or a substantial part of
the Premises, shall be lawfully taken or condemned (or conveyed under threat of
such taking or condemnation) for any public or quasi-public use or purpose, the
Term of this Lease shall end upon, and not before, the date of the taking of
possession by the condemning authority. Current Rent shall be apportioned as of
the date of termination. If any part of the Building, other than the Premises or
not constituting a substantial part of the Premises, shall be so taken or
condemned (or conveyed under threat of such taking or condemnation), or if the
grade of any street adjacent to the Building is changed by any competent
authority and such taking or change of grade makes it necessary or desirable to
substantially remodel or restore the Building, Landlord shall have the right to
cancel this Lease upon not less than sixty (60) days’ notice prior to the date
of cancellation designated in the notice. No money or other consideration shall
be payable by Landlord to Tenant for the right of cancellation, and Tenant shall
have no right to share in any condemnation award, or in any judgment for
damages, or in any proceeds of any sale made under any threat of condemnation of
taking. Nothing in this Section shall prevent Tenant from making and pursuing a
claim against the condemning authority in its own right for termination of its
leasehold interest. If this Lease is not canceled, the Lease shall continue in
full force and effect, without abatement or reduction of Rent.

 

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SECTION 22

SUBORDINATION TO MORTGAGES AND DEEDS OF TRUST

22.01 Lease Subordinate to Mortgages and Non Disturbance.

(a) This Lease and the rights of Tenant shall be and are hereby made subject and
subordinate to the lien of any mortgages or deeds of trust now or hereafter
existing against the Building, the Property or both, and to all renewals,
modifications, consolidations, replacements and extensions thereof and to all
advances made now or in the future. Although the subordination shall be
self-operating, Tenant, or its successors in interest, shall upon Landlord’s
request, execute and deliver upon the demand of Landlord any and all instruments
desired by Landlord, subordinating, in the manner reasonably requested by
Landlord, this Lease to any mortgage or deed of trust. Landlord is hereby
irrevocably appointed and authorized as agent and attorney-in-fact of Tenant to
execute all subordination instruments if Tenant fails to execute the instruments
within ten (10) days after notice from Landlord demanding their execution. The
notice may be given in the manner provided for giving notice below. Such
subordination shall be contingent upon Landlord using commercially reasonable
effort to cause the mortgagee agreeing that in the event of foreclosure, that
mortgage will not disturb Tenant’s lease so long as Tenant is not in default
hereunder and so long as Tenant attorns to the mortgagee as the successor
landlord.

(b) Should any mortgage or deed of trust affecting the Building, the Property or
both be foreclosed, then; (i) the liability of the mortgagee, beneficiary or
purchaser at the foreclosure sale for obligations as the Landlord to Tenant
shall exist only so long as the mortgagee, beneficiary, or purchaser is the
owner of the Building and/or Property and the liability shall not continue or
survive after further transfer of ownership; and (ii) conditioned upon such
purchaser agreeing not to disturb Tenant’s tenancy as long as Tenant has not
defaulted upon the Lease, Tenant shall be deemed to have attorned, as Tenant
under this Lease, to the purchaser at any foreclosure sale and this Lease shall
continue in force and effect as a direct lease between and binding upon Tenant
and the purchaser at any foreclosure sale. As used in this Section 22,
“mortgagee” and “beneficiary” shall include successors and assigns of any such
party, whether immediate or remote, the purchaser of any mortgage or deed of
trust, whether at foreclosure or otherwise, and the successors, assignees,
mortgagees, and beneficiaries of such purchaser, whether immediate or remote.

22.02 Tenant’s Notices. In the event of any act or omission by Landlord under
this Lease which would give Tenant the right to terminate this Lease, or to
claim a partial or total eviction, Tenant will not exercise any such right
until:

(a) it has given thirty days written notice (by United States certified or
registered mail, postage prepaid) of such act or omission to the holder of any
mortgage or deed of trust on the Property (whose names and addresses Landlord
agrees will be furnished to Tenant on request) with a copy to Joel C. Davis,
Dietze & Davis, P.C., P.O. Box 1530, Boulder, Colorado 80306; and O’Connor
Development, 6685 Gunpark Drive, Suite 210, Boulder, Colorado 80301; and

 

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(b) any holder of any mortgage or deed of trust on the Property shall, following
the giving of such notice, have failed with reasonable diligence to commence and
to pursue reasonable action to remedy the act or omission.

SECTION 23

WAIVER

23.01 The waiver by Landlord of any breach of any term, covenant, or condition
in this Lease shall not be deemed to be a waiver of the term, covenant, or
condition, or any subsequent breach of the same or any other term, covenant or
conditions. The acceptance of Rent hereunder shall not be construed to be a
waiver of any breach by Tenant of any term, covenant, or condition of this
Lease, it being understood and agreed that the remedies given to Landlord shall
be cumulative, and the exercise of any one remedy by Landlord shall not be to
the exclusion of any other remedy.

SECTION 24

SUBROGATION

24.01 The parties to this Lease agree that any and all fire and extended
coverage insurance which is required to be carried by either shall be endorsed
with a subrogation clause, substantially as follows: “This insurance shall not
be invalidated should the insured waive, in writing, prior to a loss, any and
all right of recovery against any party for loss occurring to the property
described herein.” Each party waives all claims for recovery from the other
party, its officers, agents or employees for any loss or damage (whether or not
such loss or damage is caused by negligence of the other party, and
notwithstanding any provisions contained in this Lease to the contrary) to any
of its real or personal property insured under valid and collectible insurance
policies to the extent of the collectible recovery under the insurance.

 

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SECTION 25

PLATS AND RIDERS

25.01 Appendices, clauses, plats, and riders, if any, referred to in this Lease
and signed or initialed by Landlord and Tenant and affixed to this Lease are
hereby incorporated in and made a part of this Lease.

SECTION 26

SALE BY LANDLORD

26.01 In the event of a sale or conveyance or transfer by Landlord of its
interest in the Property and/or in the Building containing the Premises, and/or
in this Lease, the same shall operate to release Landlord from any future
liability upon any of the covenants or conditions, expressed or implied,
contained in favor of Tenant, and in that event, Tenant agrees to look solely to
the responsibility of the successor in interest of Landlord in and to this
Lease. This Lease shall not be affected by any such conveyance or transfer, and
Tenant agrees to attorn to such purchaser or transferee. Landlord shall deliver
to Tenant upon such sale conveyance or transfer a written assumption of all of
Landlord’s obligations and liabilities under this Lease, duly executed by the
purchaser or transferee.

SECTION 27

RIGHT OF LANDLORD TO PERFORM

27.01 All covenants and agreements to be performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant’s sole cost and
expense, and without any abatement of Rent. If Tenant shall fail to pay any sum
of money, other than Rent, required to be paid by it, or shall fail to perform
any other act on its part to be performed, and the failure shall continue for
thirty (30) days after written notice by Landlord, then so long as such failure
continues uncured, Landlord may, but shall not be obligated to do so, and
without waiving or releasing Tenant from any obligations of Tenant, make any
payment or perform any other act on Tenant’s part to be made or performed as in
this Lease provided. All sums so paid by Landlord and all necessary incidental
costs, together with interest at the rate per year equal to the published prime
or reference rate published in the Money Rate section of The Wall Street Journal
(the “Prime Rate”), then in effect, plus three (3) percentage points from the
date of a payment by Landlord, shall be payable to Landlord on demand, and
Tenant covenants to pay any such sums, and Landlord shall have (in addition to
any other right or remedy of Landlord) the same rights and remedies in the event
of the non-payment thereof by Tenant, as in the case of default by Tenant in the
payment of Rent.

 

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SECTION 28

ATTORNEY’S FEES

28.01 In the event of any litigation or arbitration between Tenant and Landlord
to enforce any provision of this Lease or any right of either party, the
unsuccessful party to such litigation or arbitration shall pay to the successful
party all costs and expenses, including reasonable attorney’s fees, incurred.
Moreover, if Landlord, without fault, is made a party to any litigation
instituted by or against Tenant, Tenant shall indemnify Landlord against, and
protect, defend, and save it harmless from, all costs and expenses, including
reasonable attorney’s fees, incurred by Landlord. To the extent permitted by
law, Landlord and Tenant hereby waived the right to a jury trial in any legal
action or proceeding relating to this Lease.

SECTION 29

ESTOPPEL CERTIFICATE

29.01 Tenant shall, at any time and from time to time, upon not less than ten
(10) days’ prior written notice from Landlord, execute, acknowledge, and deliver
to Landlord a statement in writing certifying that this Lease is unmodified and
in full force and effect (or if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the dates to which the Rent and other charges are paid, and
acknowledging that Tenant is paying Rent on a current basis with no offsets or
claims, and there are not, to Tenant’s knowledge, any uncured defaults on the
part of Landlord hereunder (or specifying the offsets, claims, or defaults, if
any are claimed). It is expressly understood and agreed that any such statement
may be relied upon by any prospective purchaser or encumbrance of all or any
portion of the Building or by any other person to whom it is delivered. Tenant’s
failure to deliver the statement within the required time shall be conclusive
upon Tenant that this Lease is in full force and effect, without modification
except as may be represented by Landlord, that there are no uncured defaults in
Landlord’s performance, and that not more than two (2) months’ rental have been
paid in advance.

29.02 Landlord shall, at any time and from time to time, upon not less than ten
(10) days’ prior written notice from Tenant, execute, acknowledge, and deliver
to Tenant a statement in writing certifying that this Lease is unmodified and in
full force and effect (or if modified, stating the nature of such modification
and certifying that this Lease, as so modified, is in full force and effect) and
the dates to which the Rent and other charges are paid, and acknowledging that
Tenant is paying Rent on a current basis with no offsets or claims, and there
are not, to Landlord’s knowledge, any uncured defaults on the part of Tenant
hereunder (or specifying the offsets, claims, or defaults, if any are claimed).
It is expressly understood and agreed that any such statement may be relied upon
by any person to whom it is delivered. Landlord’s failure to deliver the
statement within the required time shall be conclusive upon Landlord that this
Lease is in full force and effect, without modification except as may be
represented by Tenant, and that there are no uncured defaults in Tenant’s
performance.

 

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SECTION 30

NOTICE

30.01 Any notice from Landlord to Tenant or from Tenant to Landlord shall be in
writing and may be served personally or by mail. If served by mail, it shall be
mailed by registered or certified mail, return receipt requested, addressed to
Tenant at the Premises or to Landlord at the place from time to time established
for the payment of Rent. Notices shall be effective when delivered, if served
personally, or three (3) days after mailing, if mailed. If no one at the
premises is available to accept the notice, then it shall be deemed effective
upon the second refusal or uncompleted mail delivery attempt.

SECTION 31

RIGHTS RESERVED

31.01 Landlord reserves the following rights, exercisable without notice and
without liability to Tenant for damage or injury to property, person, or
business, and without effecting an eviction, constructive or actual, or
disturbance of Tenant’s use or possession, or giving rise to any claim for
set-off or abatement of rent:

(a) To change the Building’s name or, upon 60 days advance notice, the street
address;

(b) To install, affix, and maintain any and all signs on the exterior and
interior of the Building;

(c) To retain at all times, and to use in appropriate instances, keys to all
doors within and into the Premises. No locks or bolts shall be altered, changed,
or added without the prior written consent of Landlord;

(d) To have and retain a paramount title to the Premises, free and clear of any
act of Tenant.

SECTION 32

REAL ESTATE BROKER

32.01 Tenant represents that Tenant has been represented by Staubach and Company
in connection with this Lease, and the Landlord has been represented by Colorado
Group East, that insofar as Tenant knows, no other broker negotiated or
participated in the negotiations of this Lease, or submitted or showed the
Premises, or is entitled to any commission in connection herewith. Any payment
for services relative to this Lease shall be the responsibility of the Landlord.
A 6% commission, based upon the total Base Rent over the term of the lease will
be split evenly between Staubach and Company and the Colorado Group East, Inc.

 

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SECTION 33

MISCELLANEOUS PROVISIONS

33.01 (a) The words “re-enter”, or “re-entry”, as used in this Lease, are not
restricted to their technical legal meaning. The term “Landlord”, as used in
this Lease, means only the Landlord from time to time, and upon conveying or
transferring its interest, Landlord shall be relieved from any further
obligation or liability pursuant to Section 27.

(b) Time is of the essence of this Lease and of each and all of its provisions.

(c) Submission of this instrument for examination or signature by Tenant does
not constitute a reservation of or an option for lease, and it is not effective
as a lease or otherwise until execution by both Landlord and Tenant.

(d) The invalidity or unenforceability of any provision in this Lease shall not
affect or impair any other provisions.

(e) This Lease shall be governed by and construed pursuant to the laws of the
State of Colorado.

(f) Should any mortgagee or beneficiary under a deed of trust require a
modification of this Lease, which modification will not bring about any
increased cost or expense to Tenant or will not in any other way substantially
change the rights and obligations of Tenant hereunder, then and in such event,
Tenant agrees that this Lease may be so modified.

(g) All rights and remedies of Landlord under this Lease, or those which may be
provided by law, may be exercised by Landlord in its own name individually, or
in its name by its agent, and all legal proceedings for the enforcement of any
rights or remedies, including distress for rent, unlawful detainer, and any
other legal or equitable proceedings, may be commenced and prosecuted to final
judgment and be executed by Landlord in its own name individually or in its name
by its agent. Landlord and Tenant each represent to the other that each has full
power and authority to execute this Lease and to make and perform the agreements
herein contained, and Tenant expressly stipulates that any rights or remedies
available to Landlord, either by the provisions of this Lease or otherwise, may
be enforced by Landlord in its own name individually or in its name by its agent
or principal.

 

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(h) The marginal headings and titles to the paragraphs of this Lease are not a
part of this Lease and shall have no effect upon the construction or
interpretation of any part hereof.

(i) Tenant acknowledges that there are no covenants, representations,
warranties, agreements, or conditions, expressed or implied, collateral or
otherwise, forming part of or in any way effecting or relating to this Lease
except as expressly set out in this Lease and the attachments and exhibits to
this Lease, and that the terms and provisions of this Lease may not be modified
or amended except by written instrument by both Landlord and Tenant.

SECTION 34

SUCCESSORS AND ASSIGNS

34.01 Subject to the terms and provisions of Section 27, the covenants and
conditions contained in this Lease shall apply to and bind the respective heirs,
successors, executors, administrators, and assignees of the parties hereto, and
the terms “Landlord” and “Tenant” shall include the successors and assignees of
either such party, whether immediate or remote.

SECTION 35

QUIET ENJOYMENT

35.01 Subject to the terms and provisions of this Lease, Landlord covenants and
agrees that Tenant, upon complying with all of the obligations of Tenant under
this Lease, shall peaceably and quietly enjoy the Premises and Tenant’s rights
under this Lease during its Term, without hindrance by Landlord or any persons
claiming under Landlord.

SECTION 36

RECORDING

36.01 This Lease shall not be recorded by Landlord or Tenant.

 

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SECTION 37

RIGHT OF FIRST REFUSAL

37.01 Right During First Two Years. During the first two (2) years of the
Primary Lease Term Tenant shall have the right of first offer to lease such
portion up to all, of approximately 5,800 rentable square feet of additional
space depicted on Exhibit B (the “Additional Space”) in the Building. In order
to exercise such right of first offer: (a) as of the date the Landlord provides
Tenant with the notice triggering the right of first offer, and as of the
Commencement Date applicable to the Additional Space, there shall be no Event of
Default by Tenant under this Lease and there shall have occurred no act or
omission which, with the passage of time or the giving of notice, or both, would
become an Event of Default by Tenant under this Lease; and (b) at the
Commencement Date applicable to the Additional Space Tenant shall not have
assigned or subleased all or any part of the Premises or the Additional Space to
another party. Landlord shall notify Tenant in writing if it is in receipt of a
bona fide offer to lease all or any part of the Additional Space, specifying the
portion of the Additional Space subject to the notice (the “Offered Space”) and
the Base Rent in the offer. Tenant shall have three (3) Business Days from
receipt of such notice to exercise its right of first offer with respect to all,
but not less than all, of the Offered Space. If Tenant exercises it right of
first offer to lease the Offered Space, Tenant shall thereafter lease such
Offered Space under the same terms and conditions as this Lease including,
without limitation, expiration of the Lease Term and finishing of the Additional
Space by Landlord at Landlord’s expense with a build out the same or reasonably
similar to the build out of the Premises, except that Base Rent shall be the
Base Rent stated in the bona fide offer to lease the Offered Space triggering
right of first offer. If Tenant does not exercise its right of first offer
within the time allotted, Tenant’s right of first offer shall terminate and
Landlord may, in its sole discretion, lease the Offered Space to third parties.
If such lease is not signed within one hundred twenty (120) days after the time
allotted for Tenant’s exercise of its right of first offer, Tenant’s right of
first offer for such Offered Space shall revive and be in full effect. Failure
of Tenant to exercise its right of first offer with respect to Offered Space
shall not affect its continuing right of first offer with respect to the
remaining Additional Space, if any.

37.02 Right After First Two Years. After the first two (2) years of the Primary
Lease Term, Tenant shall have the right of first offer to lease a portion, up to
all of the Additional Space as provided in Subsection 37.01, subject to the
following provisions. Landlord shall include in its notice to Tenant the term
and Base Rent for which a third party has offered to lease the Offered Space
(the “Extended Term”). If Tenant exercises its right of first offer on the
Offered Space, Landlord and Tenant shall extend the Primary Term of this Lease
for a period that will make the ending date of the Primary Term of this Lease
equal to the ending date of the Extended Term. The Base Rent for the period of
the extension beyond the Primary Term for the Premises shall be the Base Rent
stated in the bona fide offer to lease the Offered Space triggering the right of
first offer.

 

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SECTION 38

OPTION TO EXTEND

38.01 Option to Extend Primary Term. Upon the full and complete performance of
all terms, covenants and conditions contained in this Lease by Tenant and the
payment of all Rent and other sums due under the terms of this Lease, Tenant
shall have the option to renew this Lease for one (1) Additional term of five
(5) Years. If Tenant desires to exercise the option, Tenant must deliver written
notice of its election to Landlord not less that one hundred eighty (180) days
prior to the expiration of the Primary Term of this Lease. If Tenant exercises
it option, this Lease shall be deemed to be extended for the addition five
(5) Year Period, subject to the right of Landlord to make any adjustments and to
assess any charges against Tenant which are provided in this Lease. Base Rent
will be as agreed between Landlord and Tenant and failing such agreement within
fifteen (15) business days of Tenant’s notice of election, will be the average
of ninety five percent (95%) of the fair market rental rate or four percent
(4%) higher than the Base Rate paid by Tenant at the end of the Primary Term
($16.90 per rentable square foot for year one of the extended term). For years
two (2) through five (5) the Base Rent will be increased by four percent (4%) on
the anniversary date of the extended term.

SECTION 39

SECURITY DEPOSIT

Tenant will deliver to Landlord an unconditional, irrevocable standby Letter of
Credit from a financial institution reasonably acceptable to Landlord (it is
agreed that Colorado Business Bank is acceptable to Landlord) equal to one
hundred twenty thousand dollars ($120,000.00) as an additional security for
performance of Tenant’s obligations under the Lease, on or before the
Commencement of Completion of the Premises as detailed in Section 3.01 of this
Lease. The Letter of Credit shall be unconditional. Landlord may draw on the
Letter of Credit one or more times, up to the aggregate amount thereof in the
Event of a Default by the Tenant that is not cured within thirty (30) days of
Landlord’s notice to Tenant of default (notwithstanding that Tenant may have a
right under the terms of this Lease to cure such Event of Default during a
period of time greater than 30 days) and Landlord’s intention to call on Letter
of Credit to cure said default. Each draw on the Letter of Credit by Landlord
will be accompanied by a sworn and notarized certificate by the Managing Member
of Landlord or an equivalent managing officer stating that Tenant is in default
under this Lease and specifying the amount due to Landlord as a result of such
default. The amount of each draw on the Letter of Credit shall be the amount
specified in such certificate. The Letter of Credit will be reduced as follows:

 

  •  

At the end of 26 months after the original date of issue—$120,000.00 Letter of
Credit reduced to $90,000.00.

 

  •  

At the end of 40 months after the original date of issues—$90,000.00 Letter of
Credit reduced to $60,000.00.

At the end of 52 months after the original date of issue – Letter of Credit will
no longer be required and Tenant shall deposit $8,819.79 to be held as damage
deposit.

 

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If Landlord is required to draw a portion but not all of the Letter of Credit,
Tenant will increase Letter of Credit to maximum amount required under Lease
within fifteen (15) days of Landlord drawing down Letter of Credit. Failure of
Tenant to increase Letter of Credit will be considered an event of default under
Lease. is in default under this Lease and specifying the amount due to Landlord
as a result of such default. The amount of each draw on the Letter of Credit
shall be the amount specified in such certificate. The Letter of Credit will be
reduced as follows:

 

  •  

At the end of 26 months after the original date of issue—$120,000.00 Letter of
Credit reduced to $90,000.00.

 

  •  

At the end of 40 months after the original date of issues—$90,000.00 Letter of
Credit reduced to $60,000.00.

At the end of 52 months after the original date of issue—Letter of Credit will
no longer be required and Tenant shall deposit $8,819.79 to be held as damage
deposit. If Landlord is required to draw a portion but not all of the Letter of
Credit, Tenant will increase Letter of Credit to maximum amount required under
Lease within fifteen (15) days of Landlord drawing down Letter of Credit.
Failure of Tenant to increase Letter of Credit will be considered an event of
default under Lease.

SECTION 40

PARKING

40.01 Landlord will provide for the non-exclusive use of Tenant parking adjacent
to the Building in the ratio of approximately 4.0 spaces for every 1,000
rentable square feet or approximately 34 spaces. Landlord will maintain the
number of designated parking reserved for visitors to the Building. Landlord
will maintain parking exclusion in front of the double doors leading to the
Premises from the West side of the Building to permit direct loading and
unloading of goods at all times.

LANDLORD:

McCASLIN PLAZA, LLC

By: /s/ Donald J. Marcotte                                        
              

  Donald J. Marcotte, Managing Member

TENANT:

SOUND SURGICAL TECHNOLOGIES, LLC

By: /s/ Douglas D. Foote                                        
                

  Douglas D. Foote, Chief Financial Officer

 

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