EXHIBIT 10.1

 

SUBLEASE AGREEMENT

 

Between

 

VENTURE LIGHTING INTERNATIONAL, INC.

An Ohio Corporation

As Sublandlord

 

And

 

FIBERSTARS, INC.

A California Corporation

As Subtenant

 

Dated as of November 11, 2005

 

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TABLE OF CONTENTS

 

ARTICLE 1 SUBLEASE OF SUBLEASED PREMISES

 

 

 

 

 

Section 1.1 Subleased Premises

 

 

Section 1.2 Option to Expand

 

 

Section 1.3 Exceptions to Master Lease

 

 

Section 1.4 Term

 

 

Section 1.4 Option to Terminate

 

 

Section 1.6 Renewal

 

 

 

 

 

ARTICLE 2 USE OF SUBLEASED PREMISES

 

 

 

 

 

Section 2.1 Compliance

 

 

 

 

 

ARTICLE 3 RENT

 

 

 

 

 

Section 3.1 Monthly Rent Payments

 

 

Section 3.2 Other Amounts as Additional Rental

 

 

Section 3.3 Capital Expenditures

 

 

 

 

 

ARTICLE 4 TAXES

 

 

 

 

 

Section 4.1 Obligation of Pay

 

 

 

 

 

ARTICLE 5 INSURANCE

 

 

 

 

 

Section 5.1 Maintenance of Insurance

 

 

Section 5.2 Liability Insurance

 

 

Section 5.3 Other Insurance

 

 

Section 5.4 Mutual Waiver of Subrogation

 

 

Section 5.5 Failure to Maintain Insurance

 

 

Section 5.6 Insurance Prohibition

 

 

 

 

 

ARTICLE 6 REPAIRS AND MAINTENANCE

 

 

 

 

 

Section 6.1 Subtenant’s Obligations

 

 

Section 6.2 Sublandlord’s Obligations

 

 

Section 6.3 Failure to Repair – Indemnification

 

 

Section 6.4 Inspections

 

 

 

 

 

ARTICLE 7 PUBLIC UTILITIES AND SERVICES

 

 

 

 

 

Section 7.1 Public Utilities and Services

 

 

Section 7.2 Discontinuation of Services

 

 

 

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ARTICLE 8 ALTERATIONS

 

 

 

 

 

Section 8.1 Prohibitions

 

 

Section 8.2 Permitted Alterations

 

 

Section 8.3 Bathroom Improvements

 

 

 

 

 

ARTICLE 9 LIENS

 

 

 

 

 

Section 9.1 Prohibition on Liens

 

 

 

 

 

ARTICLE 10 INDEMNITY

 

 

 

 

 

Section 10.1 Subtenant’s Indemnification

 

 

Section 10.2 Sublandlord’s Indemnification

 

 

Section 10.3 Notice to Sublandlord

 

 

 

 

 

ARTICLE 11 ACCESS FOR INSPECTION AND SHORING

 

 

 

 

 

Section 11.1 Access by Sublandlord

 

 

Section 11.2 Access by Others

 

 

 

 

 

ARTICLE 12 DAMAGE AND DESTRUCTION

 

 

 

 

 

Section 12.1 Sublandlord Repair

 

 

 

 

 

ARTICLE 13 ENVIRONMENTAL MATTERS

 

 

 

 

 

Section 13.1 Hazardous Substances

 

 

Section 13.2 Notice

 

 

Section 13.3 Right to Participate

 

 

Section 13.4 Migration

 

 

Section 13.5 Remedial Action

 

 

 

 

 

ARTICLE 14 DEFAULTS

 

 

 

 

 

Section 14.1 Defaults

 

 

Section 14.2 Remedies

 

 

 

 

 

ARTICLE 15 NOTICES

 

 

 

 

 

Section 15.1 Method of Notice

 

 

Section 15.2 Time of Notice

 

 

 

 

 

ARTICLE 16 HOLDING OVER

 

 

 

 

 

Section 16.1 Holdover Rent

 

 

 

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ARTICLE 17 SUBLANDLORD’S REPRESENTATION/WARRANTIES

 

 

 

 

 

Section 17.1 Representations and Warranties

 

 

 

 

 

ARTICLE 18 ASSIGNMENT AND SUBLETTING

 

 

 

 

 

Section 18.1 Assignment and Subletting

 

 

 

 

 

ARTICLE 19 MISCELLANEOUS

 

 

 

 

 

Section 19.1 HVAC/Ceiling Repairs

 

 

Section 19.2 Dedicated Computer/Phone Lines

 

 

Section 19.3 Signage

 

 

Section 19.4 Parking.

 

 

Section 19.5 Master Landlord’s Consent

 

 

Section 19.6 Master Landlord’s Consent

 

 

Section 19.7 Defined Terms

 

 

 

 

EXHIBIT “A”

Master Lease

 

EXHIBIT “B”

Description of Leased Premises

 

EXHIBIT “C”

Description of Initial Fiberstars Premises

 

EXHIBIT “D”

Description of Phase I Premises, the Phase II Premises, the Phase III Premises,
the Phase IV Premises, and the Phase V Premises

 

EXHIBIT “E”

Rent

 

EXHIBIT “F”

Description of “Quadrants”

 

EXHIBIT “G”

Master Landlord’s Consent

 

 

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SUBLEASE AGREEMENT

 

THIS SUBLEASE AGREEMENT (“Sublease”) executed and delivered as of the
November 11, 2005 at Solon, Ohio by and between Venture Lighting
International, Inc., an Ohio corporation, with offices at 32000 Aurora Road,
Solon, Ohio 44139 (hereinafter called “Sublandlord”) and Fiberstars, Inc., a
California corporation, having a place of business at 32000 Aurora Road, Solon,
Ohio 44139 (hereinafter called “Subtenant”).

 

WITNESSETH:

 

WHEREAS, Sublandlord and ADLT Realty Corp. I, Inc., an Ohio corporation (“Master
Landlord”) have entered into that certain Lease Agreement dated March 11, 1998,
a copy of which is attached hereto as Exhibit “A”, and is incorporated into this
Sublease as if set forth in full (the “Master Lease”), whereby Sublandlord
leases from Master Landlord certain Premises described in Exhibit “B”, attached
hereto, which property is located in Solon, Ohio (the “Leased Premises”); and

 

WHEREAS, Subtenant has been leasing and occupying, on a month-to-month basis, a
portion of the Leased Premises, which portion of the Leased Premises is
described on Exhibit “C” hereto (the “Initial Fiberstars Premises”); and

 

WHEREAS, effective as of the Commencement Date (as defined below), subject to
and in accordance with the terms and provisions hereinafter set forth,
Sublandlord desires to continue to sublease to Subtenant the Initial Fiberstars
Premises; as of the Subsequent Commencement Date (as defined below), subject to
and in accordance with the terms and provisions hereinafter set forth,
Sublandlord desires to sublease to Subtenant such additional portions of the
Leased Premises, which additional portions of the Leased Premises are described
in Exhibit “D” hereto (as therein described, the “Phase I Premises”, the “Phase
II Premises”, the “Phase III Premises”, the “Phase IV Premises”, and the “Phase
V Premises”).  The term “Subleased Premises”, as used herein, shall mean the
Initial Fiberstars Premises until September 26, 2005 (the “Subsequent
Commencement Date”), and thereafter shall mean the Phase I Premises, or such
portions thereof as they become available.  From and after November 1, 2005, the
term “Subleased Premises”, as used herein, shall mean the Phase II Premises, or
such portions thereof as they become available.  From and after April 1, 2006,
the term “Subleased Premises”, as used herein, shall mean the Phase III
Premises, or such portions thereof as they become available.  From and after
July 1, 2006, the term “Subleased Premises”, as used herein, shall mean the
Phase IV Premises, or such portions thereof as they become available.  From and
after January 1, 2007, the term “Subleased Premises”, as used herein, shall mean
the Phase V Premises, or such portions thereof as they become available. 
Subtenant, subject to and in accordance with the terms and provisions
hereinafter set forth, desires to sublease from Sublandlord the Subleased
Premises, all of which is subject to and upon the terms, provisions and
conditions hereinafter set forth.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby mutually acknowledged, and in and for the covenants,
agreements, representations and warranties hereinafter set forth, Sublandlord
and Subtenant hereby covenant, agree, represent and warrant as follows:

 

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ARTICLE 1
SUBLEASE OF SUBLEASED PREMISES

 

Section 1.1                                   Subleased Premises.  Sublandlord,
for and in consideration of the rent hereinafter specified and for the covenants
and agreements hereinafter set forth to be kept, observed and performed by
Subtenant, has subleased and by these presents does hereby sublease unto
Subtenant the Subleased Premises, together with all buildings, appurtenances,
rights, privileges and easements in any way now or hereafter appertaining
hereto.

 

Section 1.2                                   Option to Expand.

 

(a)                                  Subtenant shall have the option to expand
the Subleased Premises to include an additional 15,000 square feet to the
operations space portion of the Subleased Premises (the “Option Space”) on the
same terms as provided for in this Sublease (provided that the Rent payable for
the Option Space shall be as set forth on Exhibit “E” attached hereto).  The
Option Space shall be selected by Sublandlord and shall be reasonably acceptable
to Subtenant, and shall be located within the Northeast or Southwest quadrants
(as more particularly described on Exhibit “F” attached hereto) of the Leased
Premises.  Sublandlord shall, prior to March 1, 2006, provide written notice to
Subtenant describing the exact location of the Option Space.  Subtenant shall
exercise such option upon written notice to Sublandlord given no later than
April 1, 2006.  The Option Space shall be made available to Subtenant as soon as
is practicable after Subtenant has exercised its option by delivery of such
written notice.  To the extent that Subtenant exercises its option to include
the Option Space in the Subleased Premises, such Option Space shall thereafter
be included in the definition of the term “Subleased Premises”.

 

(b)                                 Subtenant shall have the option to expand
the Subleased Premises to include an additional 2,000 square feet to the office
space portion of the Subleased Premises (the “Office Option Space”) on the same
terms as provided for in this Sublease (provided that the Rent payable for the
Office Option Space shall be as set forth on Exhibit “E” attached hereto).  The
Office Option Space shall be located in the library or other equivalent space
adjacent to the office space portion of the Phase IV Premises designated by
Sublandlord and shall be reasonably acceptable to Subtenant.  Subtenant shall
exercise such option upon written notice to Sublandlord given no later than
May 1, 2006.  If Subtenant exercises its option with respect to the Office
Option Space, then such space shall be made available to Subtenant on July 1,
2005.  To the extent that Subtenant exercises its option to include the Office
Option Space in the Subleased Premises, such Office Option Space shall
thereafter be included in the definition of the term “Subleased Premises”.

 

Section 1.3                                   Exceptions to Master Lease. 
Subtenant acknowledges that all of the terms and conditions of the Master Lease
will be applicable to this Sublease, with the effect that Subtenant shall be
entitled to the rights, and subject to the obligations of Tenant pursuant to the
Master Lease, and Sublandlord shall be entitled to the rights, and subject to
the obligations, of Landlord pursuant to the Master Lease.  Notwithstanding the
foregoing incorporation of the Master Lease, the following provisions thereof
are hereby excluded: Article One (Demised Premises and Term); Article Three
(Annual Rent); Article Four (Additional Rent); Article Five (Taxes); Article Six
(Insurance); Article Eight (Repairs and Maintenance); Article Nine (Public
Utilities and Services); Article Ten (Alterations); Section 11.02
(Prohibitions); Article Twelve (Indemnity); Article Thirteen (Access for
Inspection, Showing and Shoring); Article Fourteen

 

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(Damage and Destruction); Article Seventeen (Defaults); Article Eighteen
(Additional Remedies of Lessor).  However, nothing herein contained shall be
construed as to require Subtenant to perform any work, repairs or maintenance
(including any replacements), in, to or upon the Subleased Premises or with
respect to any equipment, system or fixture therein.

 

Section 1.4                                   Term.  Subtenant shall have and
hold the Subleased Premises for a Term (the “Term”) of three (3) years and six
(6) months, effective as of July 1, 2005 (the “Commencement Date”), and expiring
on December 31, 2008 (the “Expiration Date”).  Subtenant may terminate this
Sublease at any time following a Building Sale, provided Subtenant provides
notice to Sublandlord of such termination within 30 days following receipt of
written notice that Master Landlord intends to effect a Building Sale, which
notice shall set forth the termination date determined by Subtenant.  For the
purposes of this Section, the term “Building Sale” shall mean the sale or other
transfer of the Leased Premises, the result of which is that the Leased Premises
are not owned in fee (subject to any mortgage), or leased, by Advanced Lighting
Technologies, Inc., or one of its subsidiaries.  Furthermore, Subtenant may
terminate this Sublease at any time following either a cessation of
Sublandlord’s operations at the Leased Premises, or the relocation of Master
Landlord’s senior management personnel away from the Leased Premises, provided
Subtenant provides notice to Sublandlord of such termination within 30 days
following receipt of written notice that Sublandlord intends to cease operations
at the Leased Premises or that Master Landlord intends to relocate its senior
management personnel, which notice shall set forth the termination date
determined by Subtenant.

 

Section 1.5                                   Option to Terminate.  Subtenant is
in the process of applying for a Job Creation Tax Credit (the “Tax Credit”) from
the city of Solon, Ohio.  Subtenant covenants that it shall use commercially
reasonable efforts and shall act diligently to obtain the Tax Credit.  In the
event that Subtenant does not receive a Tax Credit, acceptable to Subtenant in
its reasonable discretion, on or before November 30, 2005, Tenant shall have the
right upon notice to Sublandlord on or prior to December 15, 2005, to terminate
this Sublease.  In the event that Subtenant so elects to terminate this
Sublease, Subtenant shall pay a termination fee to Sublandlord in the amount of
One /hundred Fifty Thousand Dollars ($150,000.00) (the “Termination Fee”). 
Sublandlord and Subtenant agree that the payment of the Termination Fee is not
intended as a forfeiture or penalty.

 

Section 1.6                                   Renewal.  Provided that Subtenant
is not in Default beyond any applicable cure periods, this Sublease shall
automatically renew for three (3) additional years thereafter, unless either of
the parties hereto provides written notification to the other least ninety (90),
but no more than one hundred eighty (180) days prior to the Expiration Date that
the party sending the notice is terminating this Sublease (“Termination
Notification”).  The terms and conditions of each such extended period shall be
the same as set forth in this Sublease.

 

ARTICLE 2
USE OF SUBLEASED PREMISES

 

Section 2.1                                   Compliance.  Except as otherwise
provided herein, Subtenant shall observe and comply with all conditions and
requirements imposed by all governmental authorities having jurisdiction over
the Subleased Premises throughout the Term of this Sublease which are caused by
Subtenant’s use thereof; provided, however, that Subtenant shall not be

 

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obligated to make any capital improvements to the Subleased Premises required by
such governmental authorities, except for those improvements or modifications
required by Subtenant’s use of the Subleased Premises.  Until such time as the
Subleased Premises shall be separated from the Leased Premises by demising
walls, Subtenant shall use the Subleased Premises in accordance with the written
safety and security rules and regulations observed by Sublandlord’s personnel at
the Leased Premises.

 

ARTICLE 3
RENT

 

Section 3.1            Monthly Rent Payments.  Subtenant shall pay Sublandlord
“Rent” for the Term, in addition to all other amounts hereunder, as listed in
Exhibit “E.”  If, on any date set forth on Exhibit “E” for commencement of any
Phase, all or a portion of the Subleased Premises, which was to first become
Subleased Premises on such date, is not available for occupancy by the
Subtenant, Subtenant’s obligation to pay Rent as set forth thereunder shall be
reduced by the Rent attributable to that portion which is unavailable, until
such portion is actually made available. If Subtenant does not exercise its
option to lease the Option Space and/or the Office Option Space, Subtenant shall
have no obligation to pay the Rent attributable to such Option Space and/or the
Office Option Space.  Subject to the provisions of Section 7.1 below, it is
agreed between Sublandlord and Subtenant that this lease shall be “gross”, that
the Rent includes, without limitation, all costs of repairs and maintenance to
the Subleased Premises, including capital expenditures (except as set forth in
Section 3.3 below), property tax, property insurance, landscaping, snow removal,
gas, water, electricity, light, heat, power, steam, and air-conditioning or
other utility or service used (except for telephone and other communication
services), building supplies, janitorial supplies, alarm systems, pest control
service, and the costs of certain personnel of Sublandlord (which personnel
agreements are more specifically set forth in the Ancillary Services Agreement
between Sublandlord and Subtenant dated of even date herewith), and that
Subtenant shall have no further obligation for payment for any utilities or
services to be provided by Sublandlord hereunder.  Rent for each calendar month,
being calculated as one-twelfth of the applicable annual rental, is payable in
advance on the first day of the month without demand or offset.  Notwithstanding
the foregoing, Lessee shall commence paying rent upon the execution of this
Sublease Agreement with such payment including arrearages, if any, for prior
periods.

 

Section 3.2                                   Other Amounts as Additional
Rental.  Subtenant shall pay without notice or demand and without abatement,
reduction or setoff, as and toward “Additional Rental” hereunder, all costs,
expenses and all other sums of money required to be paid by Subtenant under the
terms of this Sublease and, unless otherwise specified herein with respect to
time of payment, within thirty (30) days after receipt of an invoice from
Sublandlord therefor, whether or not the same be designated as Additional
Rental.  In the event of any non-payment by Subtenant of all or any part
thereof, when due, Sublandlord shall have all of the rights and remedies
provided for in this Sublease, or in law or in equity for the non-payment of
rent or for the breach of a condition.

 

Section 3.3                                   Capital Expenditures.  Subtenant
may undertake, at Subtenant’s sole cost and expense, certain capital
expenditures to be conducted at the Subleased Premises in connection with the
division of the Subleased Premises from the Leased Premises or in connection
with Subtenant’s demonstration area or applications area, including the
installation of

 

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hallway doors, curtaining off the production area and soundproofing the
production area to minimize the sound audible from the Subleased Premises.  Such
capital expenditures are subject to Sublandlord’s approval, which shall not be
unreasonably withheld.  With the exception of the foregoing and the provisions
of Section 8.3 below, any capital expenditures to be made at the Leased Premises
shall be conducted by Sublandlord, at Sublandlord’s sole cost and expense, and
the costs thereof shall not be passed on to Subtenant.

 

ARTICLE 4
TAXES

 

Section 4.1                                   Obligation to Pay.  Sublandlord
shall pay all real estate taxes, assessments and charges which shall be assessed
and levied upon the Subleased Premises or any part thereof during the Term as
they become due.  Subtenant shall be responsible for and pay all other taxes
imposed upon Subtenant including, but not limited to, sales and use taxes,
personal property taxes and income and franchise taxes.

 

ARTICLE 5
INSURANCE

 

Section 5.1                                   Maintenance Insurance.  At all
times during the Term of this Sublease, Subtenant agrees to carry standard form
“All Risk” property insurance on its property located at the Subleased Premises
for full replacement thereof and shall provide Sublandlord and Master Landlord
with a certificate of insurance reflecting such coverage.  Such insurance shall
include a provision whereby the insurer agrees not to cancel the insurance
policy without thirty (30) days prior notice to the Sublandlord.

 

Section 5.2                                   Liability Insurance.  At all times
during the Term of this Sublease, at its own cost and expense, Subtenant shall
provide and keep in force comprehensive general liability insurance policies, in
broad form, protecting Sublandlord and Master Landlord as additional insureds,
against any and all liability in the amount of not less than a combined single
limit of One Million Dollars ($1,000,000.00), each occurrence, and at least Two
Million Dollars ($2,000,000.00) in the aggregate.  All such policies shall cover
the entire Subleased Premises and all corresponding common areas of the Leased
Premises, which are leased to Subtenant.

 

Section 5.3                                   Other Insurance.  At all times
during the Term of this Sublease, at its own cost and expense, Subtenant shall
provide and keep in force personal property insurance covering damage and loss
to Subtenant’s inventory, trade fixtures, furnishings, equipment and personal
property, business interruption insurance, including insurance covering loss of
profit.  All proceeds payable under all such policies shall be payable to
Subtenant.

 

Section 5.4                                   Mutual Waiver of Subrogation. 
Notwithstanding anything set forth in this Sublease to the contrary, Master
Landlord, Sublandlord and Subtenant do hereby waive any and all right of
recovery, claim action or cause of action against the other, their respective
agents, officers and employees for any loss or damage that may occur to the
Subleased Premises or the Leased Premises or any addition or improvements
thereto, by reason of fire, the elements or any other cause which would be
insured against under the terms of the insurance policy or policies required
hereunder, or for which Master Landlord, Sublandlord or Subtenant may actually
be reimbursed as a result of insurance coverage affecting any loss suffered by
either party hereto,

 

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regardless of cause or origin, including the negligence of Master Landlord,
Sublandlord or Subtenant or their respective agents, officers and employees.  In
addition, all insurance policies carried by either party covering the Subleased
Premises including, but not limited to, contents, fire and casualty insurance,
shall expressly waive any right on the part of the insurer against the other
party for damage to or destruction of the Subleased Premises resulting from the
acts, omissions or negligence of the other party.

 

Section 5.5                                   Failure to Maintain Insurance.  In
the event that Subtenant fails to obtain, or having obtained, thereafter fails
to maintain insurance as is required in this Sublease and such failure shall
continue for a period of ten (10) days after notice by Sublandlord with respect
to such failure, Sublandlord may, but shall not be obligated to, effect and
maintain any such insurance coverage and pay the premiums therefor and all
premiums so paid by Sublandlord shall be deemed Additional Rental hereunder, and
payable by Subtenant on demand by Sublandlord.

 

Section 5.6                                   Insurance Prohibition.  Subtenant
or Sublandlord shall not carry separate insurance concurrent in form or
contributing in the event of loss with any insurance required or which may
reasonably be required to be furnished by Subtenant or Sublandlord under the
provision of this Article Five, unless, in conformity with the requirements of
this Article Five, Sublandlord or Subtenant, as the case may be, is included
therein as one of the insureds, with loss payable as provided in this Sublease. 
Subtenant or Sublandlord shall notify the other of the issuance of such separate
insurance and shall cause any such policies to be delivered as provided in this
Article Five.

 

ARTICLE 6
REPAIRS AND MAINTENANCE

 

Section 6.1                                   Subtenant’s Obligations. 
Throughout the Term of this Sublease, Subtenant covenants and agrees to keep and
maintain as required by good engineering practice, at its cost, all interior
nonstructural portions of the Subleased Premises, to make all repairs becoming
necessary including, but without limitation, repairs to interior walls, windows,
doors, glass, floor coverings, plumbing and other mechanical appurtenances and
equipment located in the Subleased Premises, provided, however, that Subtenant
shall not be required to make any capital improvements to the Subleased
Premises.  Subtenant shall give Sublandlord prompt notice of any fire or other
casualty that may occur at the Subleased Premises.  At or prior to the
termination of this Sublease all injury caused directly or indirectly by the
installation or removal of furniture, trade fixtures and property of Subtenant
shall be repaired by Subtenant at Subtenant’s sole cost and expense.  For
purposes of this Sublease the term “trade fixtures” shall be deemed to include
storage racks and overhead cranes.

 

Section 6.2                                   Sublandlord’s Obligations. 
Sublandlord shall, at all times and at its expense maintain as required by good
engineering practice and repair and replace the exterior portions of the
Subleased Premises, all structural portions of the interior and exterior
portions of the Subleased Premises, including but not limited to the roof,
gutters and downspouts, walls, sidewalks, curbs, driveways, parking areas and
all underground utilities servicing the Subleased Premises and the heating, air
conditioning and ventilating systems currently serving the Subleased Premises.

 

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Section 6.3                                   Failure to Repair –
Indemnification.  Subtenant and Sublandlord shall indemnify and save harmless
each other against and from all costs, expenses, liabilities, losses, damages,
suits, fines, penalties, claims and demands resulting from indemnifying party’s
failure to comply with the foregoing obligations pursuant to Sections 6.1 and
6.2.  In the event that Subtenant or Sublandlord fail to perform any of their
obligations pursuant to Sections 6.1 or 6.2, the other party may, but shall not
be required to, at the sole cost and expense of the other, make such repairs or
replacements or perform such acts required to be performed, and the cost and
expense thereof shall be deemed to be Additional Rent or a set off against rent,
as the case may be provided, however, that neither Subtenant nor Sublandlord
shall commence to effect any such repairs or replacement or perform or cause to
be performed any of the obligations required of the other unless they shall
first have given the other not less than fifteen (15) days prior written notice
specifying the work required to be performed and, provided further, that
Subtenant or Sublandlord, as the case may be, shall be presumed to have complied
with such notice if they commence such repairs or replacements or perform such
specified obligations within said fifteen (15) days period and proceeds
thereafter to complete same with due diligence.

 

Section 6.4                                   Inspection.  Subtenant shall
permit Sublandlord, any mortgagee and/or the authorized representatives of each,
upon 24 hour prior notice, to enter the Subleased Premises at all reasonable
times, upon reasonable written notice, for the purpose of (a) inspecting the
same and of determining the necessity of Subtenant making any repairs,
replacements or restorations to the Subleased Premises and of performing any
work therein that may be necessary to comply with Subtenant’s obligations under
this Sublease or with any laws, ordinances, rules, regulations or requirements
of any public authority, or that may be necessary to prevent waste or
deterioration in connection with the Subleased Premises, and (b) permitting
Sublandlord, at Subtenant’s cost and expense, pursuant to Section 6.3 to make
those repairs, replacements and restorations required to be made by Subtenant
pursuant to Section 6.1, but which Subtenant has failed to do after due notice
from Sublandlord.

 

ARTICLE 7
PUBLIC UTILITIES AND SERVICES

 

Section 7.1                                   Public Utilities and Services. 
Sublandlord agrees to pay or cause to be paid all charges for gas, water,
electricity, light, heat, power, steam, and air-conditioning or other utility or
service used (except for telephone and other communication services), rendered
or supplied to, upon or in connection with the Subleased Premises and
Subtenant’s occupation and use thereof throughout the Term of this Sublease;
provided, however, that, Subtenant shall pay or cause to be paid all charges for
electricity used by production machinery used by Subtenant on the Subleased
Premises to the extent that such charges are in excess of Seven Thousand Five
Hundred Dollars ($7,500.00) per month.  If necessary, Sublandlord may decide to
separately meter such utilities provided for production machinery, at
Sublandlord’s sole cost and expense.  Subtenant shall, at its sole cost and
expense, procure or cause to be procured any and all necessary permits, licenses
or other authorizations required for the lawful and proper use, occupation,
operation and management of the Subleased Premises.

 

Section 7.2                                   Discontinuation of Services.  Any
discontinuation of utilities or service beyond the control of the Sublandlord
shall not constitute a constructive eviction of Subtenant by Sublandlord.

 

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ARTICLE 8
ALTERATIONS

 

Section 8.1                                   Prohibitions.  Subtenant agrees
that it will not (a) demolish or undertake any structural alterations of any of
the buildings or other improvements erected upon or otherwise comprising the
Subleased Premises without the prior written consent of Sublandlord, which
consent may be withheld in Sublandlord’s sole discretion, and if required under
the Master Lease, without Master Landlord’s prior written consent, or (b) make
any other improvements comprising the Subleased Premises which would weaken,
impair or the otherwise in any way affect the structural aspects or integrity of
or lessen the value of the Subleased Premises and/or the buildings and other
improvements comprising the Subleased Premises, without the prior written
consent of Sublandlord, which consent may be withheld in Sublandlord’s sole
discretion, and if required under the Master Lease, without Master Landlord’s
prior written consent.

 

Section 8.2                                   Permitted Alterations.

 

(a)                                              With respect to any alterations
permitted to be made by Subtenant pursuant to this Article Eight, Subtenant and
Sublandlord shall agree on who shall pay all costs, expenses and charges
thereof, (i) either Subtenant or Sublandlord, as appropriate, shall make the
same in accordance with all applicable laws and building codes in a good and
workmanlike manner, (ii) cause the same to be performed by qualified
contractors, (iii) fully and completely indemnify and hold harmless Sublandlord
from and against any mechanic’s liens or other liens or claims in connection
with the making thereof, and (iv) by reason of such alterations, not thereby
reduce the economic value of the Subleased Premises.

 

(b)                                             All alterations, improvements
and additions to the Subleased Premises permitted to be made by Subtenant
hereunder, shall be made in accordance with all applicable laws and plans and
specifications previously submitted to Sublandlord for Sublandlord’s approval,
which approval shall not be unreasonably withheld or delayed, and, except for
removable trade fixtures, shall at once when made or installed be deemed to have
attached to the freehold and to have become the property of Sublandlord and
shall, unless otherwise agreed, remain for the benefit of Sublandlord at the end
of the Term or other expiration of this Sublease in as good order and condition
as they were when installed, reasonable wear and tear excepted.

 

Section 8.3                                   Bathroom Improvements. 
Sublandlord shall undertake to perform certain bathroom renovations (the
“Bathroom Improvements”) to the Subleased Premises.  Subtenant shall be
responsible for fifty percent (50%) of the cost of such Bathroom Improvements,
up to a maximum of Fifteen Thousand Dollars ($15,000).  Sublandlord shall be
responsible for fifty percent (50%) of the cost of such Bathroom Improvements,
up to a maximum of Fifteen Thousand Dollars ($15,000), and shall be responsible
for one hundred percent (100%) of any cost of such Bathroom Improvements in
excess of Thirty Thousand Dollars ($30,000).  Sublandlord shall engage a general
contractor, subcontractors, a construction manager and such other professionals,
as Sublandlord may deem appropriate to implement the Bathroom Improvements.

 

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ARTICLE 9
LIENS

 

Section 9.1                                   Prohibition on Liens.  Subtenant
shall not suffer or permit any liens to be filed against the Subleased Premises
or any part thereof by reason of any work, labor, services or materials done for
or supplied to, or claimed to have been done for or supplied to, Subtenant or
anyone holding the Subleased Premises or any part thereof through or under
Subtenant.  If any such lien shall at any time be filed against the Subleased
Premises, Subtenant shall immediately cause the same to be discharged of record
by payment, deposit or bond.  If Subtenant shall fail to discharge any such lien
within sixty (60) days after notice by Sublandlord, then, in addition to any
other right or remedy of Sublandlord, Sublandlord may, but shall not be
obligated to, procure the discharge of the same either (i) by paying the amount
claimed to be due, (ii) by deposit in court or (iii) by bonding.  Any amount
paid or deposited by Sublandlord for any of the aforesaid purposes and all legal
and other expenses of Sublandlord, including counsel fees and all necessary
disbursements in connection therewith, in defending any such action or in
procuring the discharge of such lien, together with interest thereon, at the
“prime rate” as published in The Wall Street Journal, plus 3% from the date of
payment or deposit, shall be deemed to be Additional Rent hereunder, and shall
be due and payable by Subtenant on demand by Sublandlord, or at the election of
Sublandlord, shall become due and payable in full with the next due installment
of Rent hereunder.

 

ARTICLE 10
INDEMNITY

 

Section 10.1                            Subtenant’s Indemnification.  Subtenant
shall indemnify, defend and save harmless Sublandlord from and against all
liability, judgments, claims, demands, suits, actions, losses, penalties, fines,
damages, costs and expenses, including attorneys’ fees, of any kind or nature
whatsoever, due to or arising out of or from any breach, violation or
non-performance of any covenant, condition, provision or agreement in this
Sublease set forth and contained on the part of Subtenant to be fulfilled, kept,
observed and performed, and claims of every kind or nature, arising out of the
use and occupation of the Subleased Premises by Subtenant, including, without
limitation, any damage to property occasioned by or arising from the use and
occupation thereof by Subtenant or by any sublessee, sub-subtenant or assignee
of Subtenant, or any injury to any person or persons, including death resulting
at anytime therefrom, occurring in or about the Subleased Premises.

 

Section 10.2                            Sublandlord’s Indemnification. 
Sublandlord shall indemnify, defend and save harmless Subtenant from and against
all liability, judgments, claims, demands, suits, actions, losses penalties,
fines, damages, costs and expenses, including attorneys’ fees, of any kind or
nature whatsoever, due to or arising out of or from any breach, violation or
non-performance of any covenant, condition, provision or agreement in (i) the
Master Lease set forth and contained on the part of Sublandlord, as tenant
thereunder, to be fulfilled, kept, observed and performed, or (ii) this Sublease
set forth and contained on the part of Sublandlord to be fulfilled, kept,
observed and performed; and claims of every kind or nature, arising out of the
use and occupation of the Subleased Premises by Sublandlord, including, without
limitation, any damage to property occasioned by or arising from the use and
occupation thereof by Sublandlord prior to the Commencement Date or by any
sublessee, sub-subtenant or assignee of Sublandlord, or any

 

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injury to any person or persons, including death resulting at anytime therefrom,
occurring in or about the Subleased Premises.

 

Section 10.3                            Notice to Sublandlord.  Sublandlord
shall in no event be charged with Default in the performance of any of its
obligations hereunder unless and until Sublandlord shall have failed to perform
such obligations within thirty (30) days (or such additional time as is
reasonably required to correct any such Default) after notice to Sublandlord by
Subtenant properly specifying wherein Sublandlord has failed to perform any such
obligations.

 

ARTICLE 11
ACCESS FOR INSPECTION AND SHORING

 

Section 11.1                            Access by Sublandlord.  Sublandlord and
its agent upon prior notice to Subtenant shall have the right to enter the
Subleased Premises at all reasonable hours for the purpose of inspection
thereof, or of making repairs, replacements and restorations that Subtenant has
neglected or refused to make in accordance with the agreements, terms, covenants
and conditions of this Sublease.  In an emergency situation, such notice shall
not be required.  Sublandlord hereby covenants that it shall use commercially
reasonable efforts to avoid any interference with Subtenant’s use or occupancy
of the Subleased Premises in conducting such repairs, replacements and
restorations.

 

Section 11.2                            Access by Others.  If any excavation or
other building operation shall be about to be made or shall be made upon any
adjoining land or streets, Subtenant shall permit any third persons obligated or
authorized by law to protect the Subleased Premises and their respective
representatives, to enter upon the Subleased Premises to shore the foundations
and walls thereof and to do any other act or thing necessary for the safety and
preservation of the Subleased Premises, provided, however, that in the event no
third person is so obligated by law, or in the event any such person shall
neglect or refuse to do any such work, Sublandlord agrees that it will do or
cause the same to be done at its sole cost and expense.  Sublandlord hereby
covenants that it shall use commercially reasonable efforts to avoid any
interference with Subtenant’s use or occupancy of the Subleased Premises in
conducting work.

 

ARTICLE 12
DAMAGE AND DESTRUCTION

 

Section 12.1                            Sublandlord Repair.  Any damage to or
destruction of all or any part of the buildings and other improvements
comprising the Subleased Premises from any cause whatsoever, shall not render
this Sublease void or voidable nor terminate it in whole or in part by either
party hereto, except as hereinafter provided.  Sublandlord shall within ten
(10) days of the occurrence of any damage or destruction, provide Subtenant with
notice as to whether Sublandlord reasonably believes it will be able to repair
such damage or destruction within ninety (90) days of said notice.

 

(a)                                              If Sublandlord states in
Sublandlord’s notice that it will not be able to repair said damage or
destruction within said ninety (90) day period, then Subtenant shall have the
right to terminate this Sublease by notifying Sublandlord of such termination in
Subtenant’s notice to Sublandlord delivered to Sublandlord within ten (10) days
from receipt of Sublandlord’s notice

 

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to Subtenant, in which event this Sublease shall be null and void as of the date
of such damage or destruction.

 

(b)                                             If Subtenant does not terminate
this Sublease or if Sublandlord can repair damages within 90 days then
Sublandlord, at Sublandlord’s sole cost and expense, shall immediately proceed
with the reconstruction, repair or restoration of the damaged portion of the
Subleased Premises and shall complete the repair, restoration or reconstruction
thereof so that the Subleased Premises is an architecturally whole unit, the
same as nearly as possible to its condition immediately prior to such damage and
destruction.  Such repair, restoration or reconstruction shall be made in
accordance with the terms hereof within a reasonable time thereafter. 
Subtenant’s Rent shall be equitably and proportionately adjusted until such time
as Sublandlord has completed the repairs or restoration.

 

ARTICLE 13
ENVIRONMENTAL MATTERS

 

Section 13.1                            Hazardous Substances.  At no time shall
any explosives, petroleum (including crude oil), radioactive materials,
hazardous wastes, toxic substances or related materials, including, without
limitation, any asbestos, asbestos containing materials, PCB’s or any substances
defined as or included in the definition of “hazardous substances,” “hazardous
waste,” “hazardous materials,” or “toxic substances” (collectively, “Hazardous
Substances”), under Federal, state or local law, ordinance or regulation dealing
with or otherwise pertaining to toxic or hazardous substances, wastes or
materials (collectively, the “Hazardous Substances Laws”) be used, generated,
manufactured, stored, released by Subtenant (or within Subtenants reasonable
control), or disposed of in, on, under or about the Subleased Premises by
Subtenant or be transported to or from the Subleased Premises by Subtenant or be
transported to or from the Subleased Premises by Subtenant, except as such
Hazardous Substances may be required to be used, stored or transported in
connection with the permitted uses of Subleased Premises and then only to the
extent and in the manner permitted by law after obtaining all necessary permits
and licenses therefor.  Notwithstanding the foregoing, Subtenant shall have the
right, without prior consent of Sublandlord or Master Landlord, to utilize
within the Subleased Premises reasonable quantities of ordinary and general
office supplies such as copier toner, liquid paper, glue, ink and common
household cleaning materials (some or all of which may constitute “Hazardous
Substances” under this Sublease). Subtenant shall provide to Sublandlord a list
of all Hazardous Substances introduced by Subtenant to the Subleased Premises
prior to the introduction of such Hazardous Substances to the Subleased Premises
and, upon Sublandlord’s request, shall provide Sublandlord with a Material
Safety Data Sheet for each such substance.  For purposes of this Section,
Subtenant shall be deemed to include its agents, invitees and trespassers.

 

Section 13.2                            Notice.          Subtenant shall
immediately advise Sublandlord in writing of the occurrence or: (i) any
discharge, release or disposal of any Hazardous Substances in, on, under or
about the Subleased Premises known to Subtenant; (ii) any enforcement, clean up
or other governmental or regulatory actions being instituted or threatened
against the Subleased Premises known to Subtenant or against Subtenant with
respect to any Hazardous Substances Law; (iii) any violation or non-compliance
with Hazardous Substances laws with respect to the Subleased Premises known to
the Subtenant, or (iv) any claim made or threatened by any third party against
the Subleased Premises, relating to damage, contribution, cost recovery,
compensation, loss or

 

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injury resulting from hazardous Substances known to Subtenant (collectively,
“Hazardous Substances Claims”).

 

Section 13.3                            Right to Participate.  Sublandlord shall
have the right to participate in, as a party if it so elects, any legal
proceedings initiated in connection with any Hazardous Substance Claims.  In the
event the Sublandlord shall elect to participate in, and/or be or joined as a
party in any legal proceeding initiated in connection with any Hazardous
Substances Claims, Sublandlord shall be responsible or and pay its own attorneys
fees and costs incurred in connection therewith without seeking contribution or
indemnification by Subtenant; provided if Subtenant is found to be responsible
for any Hazardous Substance Claim, Sublandlord shall be paid, on demand, for
their attorneys fees and costs in connection therewith.  Subtenant shall be
solely responsible for, and shall indemnify, defend and hold harmless
Sublandlord, Sublandlord’s mortgagees and their directors, officers, employees,
agents, successors and assigns from and against any damage, expense or liability
directly or indirectly arising out of or attributable to the use, generation,
storage, release, threatened release, discharge or disposal of Hazardous
Substances, on, under or about the Subleased Premises by Subtenant (or within
the reasonable control of Subtenant), including, without limitation: (i) the
cost of any required or necessary repair, cleanup or detoxification of the
Subleased Premises, and the preparation and implementation of any closure,
remedial or other required plans; and (ii) all costs and expenses incurred by
Sublandlord in connection with clause (i) including, but not limited to,
attorney fees.  In no event will the Subtenant be responsible for any damage,
expense, costs or liability for any act solely attributable to events that
occurred prior to the Commencement Date of this Sublease or otherwise not caused
by Subtenant (or within the reasonable control of Subtenant).  Any loss, damage,
cost, expense or liability incurred by Sublandlord for which Subtenant is
responsible for shall be payable to Sublandlord as Additional Rent on the first
day of the month immediately following the month when the Subtenant receives
notice thereof.  This obligation shall survive the termination of the Lease.

 

Section 13.4                            Migration.  Any other term of this
Sublease notwithstanding, the obligations of this Article 13 shall not be
applicable to any Hazardous Substance that migrates to the Subleased Premises
form any other property.

 

Section 13.5                            Remedial Action.  Without Sublandlord’s
written consent, and if required under the Master Lease, without Master
Landlord’s prior written consent, Subtenant shall not take any remedial action
in response to the presence of any Hazardous Substances in, on, under or about
the Subleased Premises, nor enter into any settlement agreement, consent decree
or other compromise in respect to any Hazardous Substances Claims, which
remedial action, settlement, consent or compromise might, in Sublandlord’s
judgment, impair the value of Sublandlord’s interest in the Subleased Premises;
provided, however, that Sublandlord’s prior consent shall not be necessary in
the event that the presence of Hazardous Substances in, on, under or about the
Subleased Premises either poses an immediate threat to the health, safety or
welfare of any individual or is of such nature that an immediate remedial
response is necessary and it is not possible to obtain Sublandlord’s consent
before taking such action, provided Subtenant shall notify Sublandlord as soon
as practicable of any action so taken.

 

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ARTICLE 14
DEFAULTS

 

Section 14.1                            Defaults.  In the event any one or more
of the following events shall occur (each, a “Default”):

 

(a)                                              Subtenant shall fail to make
payment to Sublandlord of any Rent and, such non-payment shall continue for a
period of three (3) business days after written notice given to Subtenant by
Sublandlord or Sublandlord’s agent; or

 

(b)                                             Subtenant shall fail to make
payment to Sublandlord of any other monetary obligations hereunder, and such
non-payment shall continue for a period of thirty (30) days after written notice
given to Subtenant by Sublandlord or Sublandlord’s agent; or

 

(c)                                              Subtenant shall fail, neglect
or refuse to keep and perform any of the other covenants, conditions,
stipulations or agreements herein contained, covenanted and agreed to be kept
and performed by Subtenant, and in the event any such failure shall continue for
a period of thirty (30) days after notice thereof given in writing to Subtenant
by Sublandlord or Sublandlord’s agents; provided, however, that if Subtenant
cannot reasonably cure such failure within such thirty (30) day period,
Subtenant shall have such additional period of time as Subtenant reasonably
requires so long as Subtenant continues to cure its failure within such thirty
(30) day period and proceeds with due diligence to cure such failure; or

 

(d)                                             Any voluntary or involuntary
petition or similar pleading under any section or sections of any bankruptcy act
shall be filed by or against Subtenant, or any voluntary or involuntary
proceeding in any court or tribunal shall be instituted to declare Subtenant
insolvent or unable to pay Subtenants debts, and the same shall not be dismissed
or discharged within ninety (90) days after receipt by Subtenant of notice of
such proceeding; or

 

(e)                                              Subtenant makes any assignment
of its property for the benefit of creditors or should the Subleased Premises be
taken under a levy of execution or attachment in any action against Subtenant
and such levy, attachment or assignment is not dismissed or discharged within
ninety (90) days after such assignment or, in the case of a levy or attachment,
within ninety (90) days after receipt by Subtenant of notice thereof.

 

Section 14.2                            Remedies.   In the event of a Default
with respect to any obligation by the Subtenant then, in any one of such events,
in addition to and not in lieu of any other rights or remedies available to
Sublandlord pursuant to this Sublease, or at law or in equity, Sublandlord may
serve upon Subtenant a written five (5) day notice of cancellation and
termination of this Sublease and this Sublease shall end and expire as fully and
completely as if the date of expiration of such five (5) day period were the day
herein definitely fixed for the end and expiration of this Sublease and the Term
of this Sublease, and Subtenant shall then quit and surrender to Sublandlord the
Subleased Premises, and Sublandlord may enter into or repossess the Subleased
Premises, either by summary proceedings or otherwise in accordance with law.  In
the event this Sublease is terminated pursuant to the foregoing, all of the
right, title and estate and interest of Subtenant in and to the Subleased
Premises, all rents, issues and profits derived from the Subleased Premises
whether then accrued or to accrue, all insurance policies and all insurance
proceeds paid or payable to Subtenant or to Sublandlord pursuant to this
Sublease, and

 

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the entire undisbursed balance of any Use Award described in this Sublease,
shall automatically pass to, vest in and belong to Sublandlord, without further
action on the part of either party and without cost or charge to Sublandlord,
free of any claim thereto by Subtenant.

 

ARTICLE 15
NOTICES

 

Section 15.1                            Method of Notice.  All notices require
herein shall be given in writing and delivered personally, or sent by facsimile
transmission, certified mail (return receipt requested) of the United States
Postal Service, or nationally recognized overnight courier service addressed as
follows:

 

SUBLANDLORD:

 

Venture Lighting International, Inc.

 

 

32000 Aurora Road

 

 

Solon, OH 44139

 

 

Attention: President

 

 

 

SUBTENANT:

 

Fiberstars, Inc.

 

 

32000 Aurora Road

 

 

Solon, OH 44139

 

 

Attention: Vice President, Engineering

 

Section 15.2                            Time of Notice.  Any notice shall be
deemed received if delivered personally or sent by facsimile machine when
actually received; upon the date of receipt shown on the receipt card if sent by
certified mail of the United States Postal Services; or two (2) business days
after deposit with a nationally recognized overnight mail courier service.  Any
general correspondence, not intended to have a binding legal effect on the other
party, may be sent by first class mail of the United States Postal Service. 
Either party may change its address for the giving of notice, by giving to the
other party a written notice of such change at least (10) days prior to the
effective date of such change.

 

ARTICLE 16
HOLDING OVER

 

Section 16.1                            Holdover Rent.  If Subtenant shall fail
to surrender and deliver up the Subleased Premises on the Expiration Date or
earlier termination of this Sublease, from the last day of the Term to the date
on which Sublandlord received full use of the Subleased Premises, Subtenant
shall be obligated to pay Rent at one and one half times the rate in effect on
the last day of the Term.  Nothing in this Article 16 shall limit the
Sublandlord’s right to possession of the Subleased Premises on termination of
this Sublease.

 

ARTICLE 17
SUBLANDLORD’S REPRESENTATIONS/WARRANTIES

 

Section 17.1                            Representations and Warranties. 
Sublandlord represents and warrants the following to Subtenant as of the date
hereof, each of which shall continue to be true in all material respects
throughout the Term of this Sublease.

 

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(a)                                              Sublandlord has full power,
authority and legal right to enter into this Sublease.

 

(b)                                             Sublandlord is the lessee of the
Leased Premises, holds its leasehold interest in the Leased Premises free and
clear of all liens and encumbrances except for zoning ordinances or
requirements; coal, oil, gas and all other minerals, and all rights pertaining
thereto, as may have been heretofore sold, reserved, or leased; and all
rights-of-way and building and use restrictions or record as may affect the
Leased Premises, as well as all easements and rights-of-way discerned on the
Leased Premises.

 

(c)                                              No other party other than ADLT
Realty I, Inc., as fee owner of the Leased Premises, and Mortgage holder has any
claim to the Subleased Premises by reason of any purchase and sale agreement,
option to purchase, right of first refusal, lease, adverse possession or other
prescriptive right.

 

(d)                                             The execution of this Sublease,
compliance with the terms hereof and occupation of the Subleased Premises by
Subtenant will not conflict with, constitute or cause a breach or default under
the terms of any agreement or instrument to which Sublandlord is a party.

 

ARTICLE 18
ASSIGNMENT AND SUBLETTING

 

Section 18.1                            Assignment and Subletting.  Subtenant
shall not assign this Sublease or further sublet all or any part of the
Subleased Premises except with the prior written consent of Sublandlord, which
consent shall not be unreasonably withheld or delayed.  Notwithstanding the
foregoing, Subtenant may sublet or assign its interest to any Affiliate of
Subtenant (i.e., an entity controlled by, under common control with, or
controlling, Subtenant), without the requirement of obtaining Sublandlord’s
consent.  Sublandlord shall approve or disapprove the proposed sublease or
assignment by written notice to Tenant given within twenty (20) days after
Subtenant’s request for approval of an assignment or sublease.  The parties
acknowledge that Subtenant is a publicly traded corporation, and that therefore
transfers of share in Subtenant shall not be considered an assignment for
purposes hereof.

 

ARTICLE 19
MISCELLANEOUS

 

Section 19.1                            HVAC/Ceiling Repairs.  Sublandlord
agrees that it shall, prior to November 1, 2005, at its sole cost and expense,
repair the HVAC and ceiling in the “Tree House” production offices.  In the
event that Sublandlord is unable to complete such repairs on or before
November 1, 2005, Sublandlord shall provide Subtenant with alternate, reasonably
comparable space satisfactory to Subtenant, in its reasonable discretion. 
Sublandlord shall pay all Subtenant’s costs of relocation in connection with
Subtenant’s move to such alternate space.

 

Section 19.2                            Dedicated Computer/Phone Lines.  As soon
as practicable, but in any event prior to October 31, Sublandlord shall, at
Subtenant’s sole cost and expense, install dedicated computer and telephone
lines to Subtenant’s operations areas, subject to Subtenant’s reasonable
approval.  Subtenant shall have the right, at Subtenant’s sole cost and expense,
to install new or additional dedicated computer and telephone lines to such
other portions of the

 

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Subleased Premises as Subtenant deemed necessary or desirable, subject to
Sublandlord’s reasonable approval.

 

Section 19.3                            Signage.  Subtenant shall have the
right, at Subtenant’s sole cost and expense, subject to Sublandlord’s reasonable
approval, to install signage (i) on the Building, reflecting Subtenant’s company
name and logo, in size and quality comparable to Sublandlord’s existing signage,
(ii) on the Building’s monument signage, reflecting Subtenant’s company name and
logo, in size and quality comparable to Sublandlord’s existing signage, and
(iii) in the interior lobby and the shipping/receiving area of the Leased
Premises, providing the name and such directional information as Subtenant may
require.  Subtenant shall cooperate with Sublandlord to coordinate its signage
with Sublandlord’s signage.

 

Section 19.4                            Parking.  Subtenant shall have the
exclusive right to use five (5) reserved parking spaces, and shall have the
non-exclusive right to use the designated visitor parking spaces for Subtenant’s
invitees, and the non-exclusive right to use such unreserved parking spaces as
shall be required for Subtenant’s employees.

 

Section 19.5                            Cubicles.  Subtenant and Sublandlord
each own certain cubicles located in the Leased Premises and the Subleased
Premises.  Subtenant and Sublandlord hereby agree that the cubicles owned by
Subtenant shall remain in the office area of the Northwest quadrant, and that
the cubicles owned by Sublandlord shall remain in the office area of the
Northeast quadrant; provided, however, that Sublandlord and Subtenant may agree
to exchange certain of their cubicles for one another in the event that it
proves more expedient to do so.

 

Section 19.6                            Master Landlord’s Consent.  Master
Landlord’s consent is required for this Sublease.  Therefore, the effectiveness
of this Sublease is contingent upon obtaining the consent of Landlord. 
Attached, as Exhibit “G”, is Master Landlord’s consent hereto.

 

Section 19.7                            Defined Terms.  Unless the context of
this Sublease otherwise provides, the terms defined in this Article shall have,
for all purposes of this Sublease, the following respective meanings:

 

(a)                                              The term “Subtenant” shall mean
Fiberstars, Inc., a California company, its successors and assigns.

 

(b)                                             The term “Sublandlord” shall
mean Venture Lighting International, Inc. its agents and assigns.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Sublease to be executed
as of the day and year first above written, but effective as of the Commencement
Date.

 

 

WITNESSES:

SUBLANDLORD:

 

 

 

VENTURE LIGHTING

Name:

/s/ David F. Bedell

 

INTERNATIONAL, INC.

 

an Ohio corporation

 

 

 

By:

/s/ Sabu Krishnan

 

Name:

/s/ Jacqueline K. Massaro

 

Name:

Sabu Krishnan

 

 

Its:

President

 

 

 

 

 

 

 

 

 

 

SUBTENANT:

 

 

Name:

/s/ Donna Prunetti

 

FIBERSTARS, INC.

 

a California corporation

 

 

 

 

 

By:

/s/ Robert A. Connors

 

Name:

/s/ Linda Sawatzky

 

Name:

Robert A. Connors

 

 

Its:

CFO

 

 

 

 

 

 

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Name:

 

 

By:

 

Name:

Name:

 

 

Its:

 

 

 

 

STATE OF

Ohio

 

)

 

) SS:

COUNTY OF

Cuyahoga

 

)

 

BEFORE ME, a Notary Public in and for said county and state personally appeared
the above-named Venture Lighting International, Inc., an Ohio corporation,
(hereinafter referred to as “Sublandlord”) by  , its  , and  , its  ,
respectively, who acknowledged that they did execute the foregoing Lease for an
on behalf of Sublandlord and that the execution thereof was their free and
voluntary act individually and as the duly authorized officers of Sublandlord.

 

IN TESTIMONY WHEREOF, I have hereunto set my hand and seal at Solon, OH, 7, day
of October, 2005.

 

 

 

Notary Public

/s/ Jennifer E. Kurowski

 

My commission expires:

Jennifer E. Kurowski

 

 

Notary Public, State of Ohio

 

 

My Commission Expires 12/20/07

 

 

STATE OF

California

 

)

 

) SS:

COUNTY OF

Alameda

 

)

 

BEFORE ME, a Notary Public in and for said county and state personally appeared
the above-named Fiberstars, Inc., a California corporation, (hereinafter
referred to as “Subtenant”) by  , its  , and  , its  , respectively, who
acknowledged that they did execute the foregoing Lease for an on behalf of
Subtenant and that the execution thereof was their free and voluntary act
individually and as the duly authorized of Subtenant.

 

IN TESTIMONY WHEREOF, I have hereunto set my hand and seal at Nov. 11 day
of 2005.

 

 

Notary Public

/s/ Ila Rajneesh

 

My commission expires:

Ila Rajneesh

 

 

Commission # 1410882

 

 

Notary Public - California

 

 

Alameda County

 

 

My Comm. Expires Apr. 13, 2007

 

18

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EXHIBIT “A”

 

MASTER LEASE

 

19

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EXHIBIT “B”

 

Description

 

Square Footage

 

First Floor High Bay area, including covered Dock Space

 

184,375 sq. ft.

 

First Floor Low Bay manufacturing area

 

47,500 sq. ft

 

First Floor Office Area

 

26,875 sq. ft

 

Second Floor Finished Office Space

 

32,300 sq. ft

 

Second Floor Unfinished Office Space

 

32,300 sq. ft

 

Second Floor Mechanical Space

 

10,000 sq. ft

 

 

Legal Description

 

Situated in the Village of Solon, County of Cuyahoga and State of Ohio, and
being Part of Original Solon Township Lots 4 and 7 in Tract 2, and bounded and
described as follows:

 

Beginning at an iron pin in the Southwesterly line at the Westerly end of the
relocation of Aurora Road, 86 feet wide, as dedicated and recorded in Volume
105, Page 26 of Cuyahoga County Records; thence Southeasterly along said
Southwesterly line of relocated Aurora Road, along a curved line deflecting to
the right, an arc distance of 415.73 feet, said arc having a radius of 799.22
feet, and a chord which bears south 52 degrees 37’ 24’ * East, a distance of
411.06 feet to the principal place of beginning of the parcel of land described
herein;

 

Thence continuing along said Southwesterly line of relocated Aurora Road, along
a curved line deflecting toward the right, an arc distance of 129.43 feet, said
arc having a radius of 799.22 feet and a chord which bears South 33 degrees 04’
56’ * East a distance of 129.29 feet to a point of tangency;

 

Thence continuing along said Southwesterly line of the relocation of Aurora
Road, South 28 degrees 26’ 34’ * East, a distance of 737.50 feet to a point;

 

Thence Southwesterly along a curved line deflecting to the left, an arc distance
of 698.80, said arc having a radius of 603.63 feet, and a chord which bears
South 54 degrees 27’ 56’ * West, a distance of 660.42 feet to a point;

 

Thence North 90 degrees 00’ 00’ * West, a distance of 675.56 feet to a point;

 

Thence North 0 degrees 00’ 00’ * East, a distance of 708.86 feet to a point;

 

Thence North 61 degrees 22’ 00’ * East, a distance of 901.40 feet to the
principal place of beginning, be the same more or less, but subject to all legal
highways.

 

Permanent Parcel No. 953-37-001

 

20

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EXHIBIT “C”

 

Description of Initial Fiberstars Premises

 

Description

 

Square Footage

 

 

 

 

 

 

(A)

Manufacturing Area

 

13,125 sq. ft.

 

 

Upstairs Offices

 

1,250 sq. ft

 

 

1st Floor, S.E. High Bay area

 

 

 

 

 

 

 

 

(C)

Covered Dock Space

 

1,250 sq. ft.

 

 

1st Floor, S.W. High Bay area

 

 

 

 

 

 

 

 

(D)

Engineering Area

 

9,375 sq. ft.

 

 

1st Floor, N.W. High Bay area

 

 

 

 

 

 

 

 

(E)

Office Space

 

7,500 sq. ft.

 

 

1st Floor, N.W. Corner

 

 

 

 

 

 

 

 

 

Total:

 

32,500 sq. ft.

 

 

21

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EXHIBIT “D”
Description of the Phase I Premises, the Phase II Premises, the Phase III
Premises, the
Phase IV Premises, and the Phase V Premises

 

Phase I.  Between 9/26/05 and 10/31/05

 

 

 

Building
Quadrant

 

Ft Sq.

 

Operations

 

SE High Bay

 

26,875

 

Engineering

 

NW High Bay

 

9,375

 

Office

 

NW Low Office

 

7,500

 

Committed

 

 

 

43,750

 

Fiberstars Option Space

 

 

 

—

 

Fiberstars Office Option Space

 

 

 

—

 

Committed + Optional Space

 

 

 

43,750

 

 

Phase II.  Between 11/01/05 and 03/31/06

 

 

 

Building
Quadrant

 

Ft Sq.

 

Operations*

 

SE High Bay

 

40,625

 

Engineering

 

NW High Bay

 

9,375

 

Office**

 

NW Low Office

 

9,000

 

Committed

 

 

 

59,000

 

Fiberstars Option Space

 

 

 

—

 

Fiberstars Office Option Space

 

 

 

—

 

Committed + Optional Space

 

 

 

59,000

 

 

--------------------------------------------------------------------------------

*Note:  Operations area is the contiguous “walled in” area of the SE High Bay
Quadrant, excluding the Sublandlord’s “cage”.

**1500 sq. ft. of additional office space will include open space adjacent to
subtenant existing office space plus enclosed office space currently used by
Sublandlord’s human resources department.

 

Phase III.  Between 04/01/06 and 06/30/06

 

 

 

Building
Quadrant

 

Ft Sq.

 

Operations

 

SE High Bay

 

40,625

 

Engineering

 

NW High Bay

 

9,375

 

Office

 

NW Low Office

 

9,000

 

Committed

 

 

 

61,000

 

Fiberstars Option Space ***

 

 

 

15,000

 

Fiberstars Office Option Space

 

 

 

—

 

Committed + Optional Space

 

 

 

76,000

 

 

Phase IV.  Between 07/01/06 and 12/31/06

 

 

 

Building
Quadrant

 

Ft Sq.

 

Operations

 

SE High Bay

 

40,625

 

Engineering*

 

NE Low Bay

 

9,000

 

Office**

 

NE Low Office

 

13,000

 

Committed

 

 

 

64,625

 

Fiberstars Option Space***

 

 

 

15,000

 

Fiberstars Office Option Space****

 

2,000

 

Committed + Optional Space

 

 

 

79,625

 

 

--------------------------------------------------------------------------------

*Note:  Subtenant to move into approximately 9,000 ft sq in Sublandlord’s lab
and engineering space in NE quadrant.

**Note:  Subtenant to move into approximately 13,000 sq. ft. of Sublandlord’s
office space in NE quadrant, including the two conference rooms between
engineering and Sarver, with existing cubicles.  Mutual conference room access
to be agreed upon by Subtenant and Sublandlord.

***Subtenant may exercise its option to lease the Option Space pursuant to the
provisions of Section 1.2 above.

****Note:  Subtenant may exercise its option to lease the Office Option Space
pursuant to the provisions of Section 1.2 above, which shall be 2000 sq. ft. of
additional office space, reasonably satisfactory to Subtenant and Sublandlord,
suitable for a customer demonstration area, and adjacent to or within the Phase
IV Premises office space.

 

Phase V.  Between 01/01/07 and 12/31/08

 

 

 

Building
Quadrant

 

Ft Sq.

 

Operations

 

SE High Bay

 

40,625

 

Engineering

 

NE Low Bay

 

9,000

 

Office

 

NE Low Office

 

13,000

 

Committed

 

 

 

64,625

 

Fiberstars Option Space

 

 

 

15,000

 

Fiberstars Office Option Space

 

 

 

2,000

 

Committed + Optional Space

 

 

 

79,625

 

 

22

--------------------------------------------------------------------------------

 

EXHIBIT “E”

Rent

 

Total Annual Rent Before Subsequent Commencement Date

 

 

 

 

 (Between 8/1/05 and 9/25/05 (“Initial Fiberstars Premises”))

 

$

225,600

 

 

Total Annual Rent After Subsequent Commencement Date:

 

Between 9/26/05 and 10/31/05 (the “Phase I Premises”)

 

09/26/2005 — 10/31/2005

 

 

 

 

 

 

 

Annual Rent

 

Monthly Rent

 

 

 

Building Quadrant

 

Ft Sq.

 

Per Ft Sq.

 

Total

 

Per Ft Sq.

 

Total

 

Operations

 

SE High Bay

 

26,875

 

$

6.45

 

$

173,344

 

$

0.54

 

$

14,445

 

Engineering

 

NW High Bay

 

9,375

 

$

6.45

 

$

60,469

 

$

0.54

 

$

5,039

 

Office

 

NW Low Office

 

7,500

 

$

9.65

 

$

72,375

 

$

0.80

 

$

6,031

 

Committed

 

 

 

43,750

 

$

7.00

 

$

306,188

 

$

0.58

 

$

25,516

 

Fiberstars Option Space

 

 

 

—

 

$

—

 

$

—

 

$

—

 

$

—

 

Fiberstars Office Option Space

 

 

 

—

 

$

—

 

$

—

 

$

—

 

$

—

 

Committed + Optional Space

 

 

 

43,750

 

$

7.00

 

$

306,188

 

$

0.58

 

$

25,516

 

 

Between 11/01/05 and 03/31/06 (the “Phase II Premises”)

 

11/01/2005 - 03/31/2006

 

 

 

 

 

 

 

Annual Rent

 

Monthly Rent

 

 

 

Building Quadrant

 

Ft Sq.

 

Per Ft Sq.

 

Total

 

Per Ft Sq.

 

Total

 

Operations

 

SE High Bay

 

40,625

 

$

6.45

 

$

262,031

 

$

0.54

 

$

21,836

 

Engineering

 

NW High Bay

 

9,375

 

$

6.45

 

$

60,469

 

$

0.54

 

$

5,039

 

Office

 

NW Low Office

 

9,000

 

$

9.65

 

$

86,850

 

$

0.80

 

$

7,238

 

Committed

 

 

 

59,000

 

$

6.94

 

$

409,350

 

$

0.58

 

$

34,113

 

Fiberstars Option Space

 

 

 

—

 

$

—

 

$

—

 

$

—

 

$

—

 

Fiberstars Office Option Space

 

 

 

—

 

$

—

 

$

—

 

$

—

 

$

—

 

Committed + Optional Space

 

 

 

59,000

 

$

6.94

 

$

409,350

 

$

0.58

 

$

34,113

 

 

Between 04/01/06 and 06/30/06 (the “Phase III Premises”)

 

04/01/2006 - 06/30/2006

 

 

 

 

 

 

 

Annual Rent

 

Monthly Rent

 

 

 

Building Quadrant

 

Ft Sq.

 

Per Ft Sq.

 

Total

 

Per Ft Sq.

 

Total

 

Operations

 

SE High Bay

 

40,625

 

$

6.45

 

$

262,031

 

$

0.54

 

$

21,836

 

Engineering

 

NW High Bay

 

9,375

 

$

6.45

 

$

60,469

 

$

0.54

 

$

5,039

 

Office

 

NW Low Office

 

9,000

 

$

9.65

 

$

86,850

 

$

0.80

 

$

7,238

 

Committed

 

 

 

59,000

 

$

6.94

 

$

409,350

 

$

0.58

 

$

34,113

 

Fiberstars Option Space*

 

 

 

15,000

 

$

6.45

 

$

96,750

 

$

0.54

 

$

8,063

 

Fiberstars Office Option Space

 

 

 

—

 

$

—

 

$

—

 

$

—

 

$

—

 

Committed + Optional Space

 

 

 

74,000

 

$

6.84

 

$

506,100

 

$

0.57

 

$

42,175

 

 

--------------------------------------------------------------------------------

*This portion of Rent due only of option has been exercised.

 

2

--------------------------------------------------------------------------------

 

Between 07/01/06 and 12/31/06 (the “Phase IV Premises”)

 

07/01/2006 - 12/31/2006

 

 

 

 

 

 

 

Annual Rent

 

Monthly Rent

 

 

 

Building Quadrant

 

Ft Sq.

 

Per Ft Sq.

 

Total

 

Per Ft Sq.

 

Total

 

Operations

 

SE High Bay

 

40,625

 

$

6.45

 

$

262,031

 

$

0.54

 

$

21,836

 

Engineering

 

NE Low Bay

 

9,000

 

$

6.45

 

$

58,050

 

$

0.54

 

$

4,838

 

Office

 

NE Low Office

 

13,000

 

$

9.65

 

$

125,450

 

$

0.80

 

$

10,454

 

Committed

 

 

 

62,625

 

$

7.11

 

$

445,531

 

$

0.59

 

$

37,128

 

Fiberstars Option Space*

 

 

 

15,000

 

$

6.45

 

$

96,750

 

$

0.54

 

$

8,063

 

Fiberstars Office Option Space*

 

 

 

2,000

 

$

9.65

 

$

19,300

 

$

0.80

 

$

1,608

 

Committed + Optional Space

 

 

 

79,625

 

$

7.05

 

$

561,581

 

$

0.59

 

$

46,798

 

 

--------------------------------------------------------------------------------

*This portion of Rent due only of option has been exercised.

 

Between 01/01/07 and 12/31/08 (the “Phase V Premises”)

 

01/01/2007 - 12/31/2008

 

 

 

 

 

 

 

Annual Rent

 

Monthly Rent

 

 

 

Building Quadrant

 

Ft Sq.

 

Per Ft Sq.

 

Total

 

Per Ft Sq.

 

Total

 

Operations

 

SE High Bay

 

40,625

 

$

6.95

 

$

282,344

 

$

0.58

 

$

23,529

 

Engineering

 

NE Low Bay

 

9,000

 

$

6.95

 

$

62,550

 

$

0.58

 

$

5,213

 

Office

 

NE Low Office

 

13,000

 

$

10.15

 

$

131,950

 

$

0.85

 

$

10,996

 

Committed

 

 

 

62,625

 

$

7.61

 

$

476,844

 

$

0.63

 

$

39,737

 

Fiberstars Option Space*

 

 

 

15,000

 

$

6.95

 

$

104,250

 

$

0.58

 

$

8,688

 

Fiberstars Office Option Space*

 

 

 

2,000

 

$

10.15

 

$

20,300

 

$

0.80

 

$

1,692

 

Committed + Optional Space

 

 

 

79,625

 

$

7.55

 

$

601,394

 

$

0.63

 

$

50,116

 

 

--------------------------------------------------------------------------------

*This portion of Rent due only of option has been exercised.

 

3

--------------------------------------------------------------------------------

 

EXHIBIT “F”

 

DESCRIPTION OF “QUADRANTS”

 

4

--------------------------------------------------------------------------------

 

EXHIBIT “G”

 

MASTER LANDLORD’S CONSENT

 

1.                                      PARTIES:

 

LANDLORD:

 

ADLT Realty Corp. I, Inc.

TENANT/SUBLANDLORD:

 

Venture Lighting International, Inc.

 

2.                                      PREMISES:  Landlord and Tenant have
entered into a Lease (“Master Lease”) for the Premises located at 32000 Aurora
Road, Solon, Ohio.

 

3.                                      SUBLEASE:  Tenant, as Sublandlord,
desires to Sublease a portion of the Premises to Fiberstars, Inc., as Subtenant,
pursuant a Sublease dated the         of                   , 2005.

 

4.                                      LANDLORD’S CONSENT:  Landlord’s consent
to the Sublease is required under the Master Lease.  Landlord hereby approves
and consents to the Sublease between Tenant/Sublandlord and Subtenant, and all
of the provisions set forth therein.

 

5.                                      NO DEFAULTS: As of the date of this
Consent: (A) Landlord represents that Tenant is not in default of the Master
Lease; and (B) Tenant represents that Landlord is not in default of the Master
Lease.

 

6.                                      COUNTERPARTS: This Consent may be
executed in counterparts and shall constitute an agreement binding upon the
other party notwithstanding that either party is not a signatory to the original
or the same counterpart provided that the other party is furnished with a copy
thereof containing the signature of the other party.

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Landlord’s Consent on
the        day of                  , 2005.

 

 

LANDLORD:

ADLT Realty Corp. I, Inc.

 

 

 

By:

 

 

Title:

 

 

 

TENANT:

Venture Lighting International, Inc.

 

 

 

By:

 

 

Title:

 

 

 

5

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