EXHIBIT 10.50

INDUSTRIAL LEASE

THIS LEASE (the “Lease”) is executed this 25th day of April, 2007, by and
between Franklin Forest Investors, LLC, a Delaware limited liability company
(“Landlord”), and SpineMedica Corp. a Florida Corporation (Tenant).

ARTICLE 1

LEASE OF PREMISES

Section 1.01. Basic Lease Provisions and Definitions.

(a) Leased Premises (shown outlined on Exhibit A attached hereto): 811
Livingston Court, Marietta, Georgia 30067 (the “Building”), located at [address
including Suite], within Franklin Forest Park (the “Park”).

(b) Rentable Area: approximately 12,199 square feet.

(c) Tenant’s Proportionate Share: 58.71%.

(d) Minimum Annual Rent:

 

Year 1

    

$115,280.55

Year 2

    

$118,696.27

Year 3

    

$122,233.98

Year 4

    

$125,893.68 (Based upon 12 months)

(e) Monthly Rental Installments:

 

Months

    

1 – 12

    

$  9,606.71*

Months

    

13 – 24

    

$  9,891.36

Months

    

25 – 36

    

$10,186.17

Month

    

37

    

$10,491.14

(f) Base Year: 2008

(g) Commencement Date: August 1, 2008

(h) Lease Term: Three (3) years and one (1) month.

(i) Security Deposit: $19,213.42. Provided that Tenant is not in default for the
initial eighteen (18) months of the Lease Term, the Security Deposit will be
reduced to $10.491.14.

 

*

Landlord agrees that the Minimum Annual Rent due for the first (1st) month of
the Lease Term (the “Excused Rent”) shall not be due or payable unless or until
an event of Default has occurred at any time during the Lease Term, at which
time the Excused Rent shall be immediately due and payable. Notwithstanding
anything to the contrary contained herein, the parties acknowledge and agree
that Excused Rent applies only to Minimum Annual Rent, and Tenant shall pay any
and all Additional Rent due and payable during the first (1st) month of the
Lease Term.

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(j) Broker(s): CB Richard Ellis, representing Landlord and NAI Brannen Goddard,
representing Tenant.

(k) Permitted Use: General office, manufacturing, warehousing and storage of
spinal disc implants and related purposes.

(l) Address for notices and payments are as follows:

 

Landlord:

  

Franklin Forest Investors, LLC

  

c/o High Street Equity Advisors, LLC

  

265 Franklin Street, Third Floor

  

Boston, Massachusetts 02110

  

Attn: Asset Management

With Payments To:

  

Franklin Forest Investors, LLC

  

38114 Eagle Way

  

Chicago, Illinois 60678-1381

Tenant (prior to occupancy):

  

SpineMedica Corp.

  

811 Livingston Court

  

Marietta, Georgia 30067

Tenant (following occupancy):

  

SpineMedica Corp.

  

811 Livingston Court

  

Marietta, Georgia 30067

(m) Guarantor(s): Intentionally Omitted.

EXHIBITS

Exhibit A — Leased Premises

Exhibit B — Intentionally Omitted

Exhibit C — Letter of Understanding

Exhibit D — Tenant Operations Inquiry Form

Exhibit E — Rules and Regulations

Exhibit F — Special Stipulations

Section 1.02. Lease of Premises. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord the Leased Premises, under the terms and conditions
herein, together with a non-exclusive right, in common with others, to use the
following (collectively, the “Common Areas”): the areas of the Building and the
underlying land and improvements thereto that are designed for use in common by
all tenants of the Building and their respective employees, agents, customers,
invitees and others.

 

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ARTICLE 2

TERM AND POSSESSION

Section 2.01. Term. The Commencement Date and Lease Term snail be as set forth
in Sections 1.01(g) and 1.01(h) above,

Section 2.02. Condition of the Leased Premises.

(a) As Is Condition. Tenant has personally inspected the Leased Premises and
accepts the same “AS IS” without representation or warranty by Landlord of any
kind, except for the necessary repairs referenced in Section 7.01.

(b) Letter of Understanding. Promptly following the Commencement Date, Tenant
shall execute Landlord’s Letter of Understanding in substantially the form
attached hereto as Exhibit C and made a part hereof, acknowledging, among other
things, that Tenant has accepted the Leased Premises. If Tenant takes possession
of and occupies the Leased Premises, Tenant shall be deemed to have accepted the
Leased Premises and that the condition of the Leased Premises and the Building
was at the time satisfactory and in conformity with the provisions of the Lease
in all respects, subject to any punchlist items.

Section 2.03. Surrender of the Premises. Upon the expiration or earlier
termination of this Lease, Tenant shall, at its sole cost arid expense,
immediately (a) surrender the Leased Premises to Landlord in broom-clean
condition, and in good order, condition and repair, (b) remove from the Leased
Premises (i) Tenant’s Property (as defined in Section 8.01 below), (ii) all data
and communications wiring and cabling (including above ceiling, below raised
floors and behind walls), and (iii) any alterations required to be removed
pursuant to Section 7.03 below, and (c) repair any damage caused by any such
removal and restore the Leased Premises to the condition existing upon the
Commencement Date, reasonable wear and tear excepted. All of Tenant’s Property
that is not removed within ten (10) days following Landlord’s written demand
therefor shall be conclusively deemed to have been abandoned and Landlord shall
be entitled to dispose of such property at Tenant’s cost without incurring any
liability to Tenant. This Section 2.03 shall survive the expiration of any
earlier termination of this Lease.

Section 2.04. Holding Over. If Tenant retains possession of the Leased Premises
after the expiration or earlier termination of this Lease. Tenant shall be a
tenant at sufferance at one hundred fifty percent (150%) of the Monthly Rental
Installments and Annual Rental Adjustment (as hereinafter defined) for the
Leased Premises in effect upon the date of such expiration or earlier
termination, and otherwise upon the terms, covenants and conditions herein
specified, so far as applicable. Acceptance by Landlord of rent after such
expiration or earlier termination shall not result in a renewal of this Lease,
nor shall such acceptance create a month-to-month tenancy. In the event a
month-to-month tenancy is created by operation of law, or by written agreement
of the parties, either party shall have the right to terminate such
month-to-month tenancy upon thirty (30) days’ prior written notice to the other,
whether or not said notice is given on the rent paying date. This Section 2.04
shall in no way constitute a consent by Landlord to any holding over by Tenant
upon the expiration or earlier termination of this Lease, nor limit Landlord’s
remedies in such event.

 

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Section 2.05. Renewal Option. Provided Tenant is not in default under this Lease
at the time the option to renew described below (the “Renewal Option”) is
exercised or at the commencement of the applicable Renewal Period (hereafter
defined) Tenant shall have two (2) options to extend the Lease Term for
successive five (5) year periods (each a “Renewal Period”) commencing on the
first day following the last day of the Lease Term (as to the first Renewal
Option, and commencing on the first day following the last day of the first
Renewal Period (as to the second Renewal Option), upon the same terms and
conditions as are contained in this Lease, except as hereinafter provided. The
Minimum Annual Rent for each Renewal Period shall be equal to the then “fair
market rent” (as determined by an appraiser selected by Landlord) for similarly
used and comparable space in the Marietta, Georgia area for a similar term (the
“Renewal Rate”), provided that in no event shall the Minimum Annual Rent for the
Renewal Period be less than the Minimum Annual Rent in effect for the period
immediately prior to the-commencement of the Renewal Period. Landlord shall
notify Tenant in writing (the “Renewal Rate Notice”) of the Renewal Rate within
thirty (30) days of Tenant’s delivery of the Renewal Notice (hereinafter
defined). Tenant shall have no further or additional right to extend the Lease
Term. The Renewal Option shall be exercised, if at all, by written notice from
Tenant to Landlord (the “Renewal Notice”) given no earlier than twelve
(12) months and no later than six (6) months prior to the expiration of the then
current Lease Term. Notwithstanding anything contained herein to the contrary,
in the event Tenant does not wish to exercise the Renewal Option at the Renewal
Rate, Tenant may withdraw its Renewal Notice by written notice to Landlord given
no later than five (5) business days from the date Landlord delivers the Renewal
Rate Notice. In order for the Renewal Option to be exercised, Tenant must
execute a proper Lease Amendment stipulating the terms of the Renewal Period.

ARTICLE 3

RENT

Section 3.01. Base Rent. Tenant shall pay to Landlord the Minimum Annual Rent in
the Monthly Rental Installments in advance, without demand, abatement, deduction
or offset, on the Commencement Date and on or before the first dray of each and
every calendar month thereafter during the Lease Term. The Monthly Rent a
Installments for partial calendar months shall be prorated. Tenant shall be
responsible for delivering the Monthly Rental Installments to the payment
address set forth in Section 101(l) above in accordance with this Section 3.01.

Section 3.02. Annual Rental Adjustment Definitions.

(a) “Annual Rental Adjustment” shall mean the amount of tenant’s Proportionate
Share of Operating Expenses, Real Estate Taxes and Insurance Premiums for a
particular calendar year.

(b) “Tenant’s Proportionate Share of Operating Expenses, Real Estate Taxes and
insurance Premiums” shall mean an amount equal to (i) the product of Tenant’s
Proportionate Share times the Operating Expenses, plus (ii) the remainder of
(1) the product of Tenant’s Proportionate Share times the Real Estate Taxes less
(2) the product of Tenant’s Proportionate Share times the Real Estate Taxes for
the Base Year provided that such amount shall not be less than zero, plus
(iii) the remainder of (1) the product of Tenant’s Proportionate Share times the
Insurance Premiums less (2) the product of

 

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Tenant’s Proportionate Share times the Insurance Premiums for the Base Year,
provided that such amount shall not be less than zero.

(c) “Operating Expenses.” shall mean the amount of all of Landlord’s reasonable
and industry-standard costs and expenses paid or incurred in operating,
repairing, replacing and maintaining the Park (i.e., the Building’s equitable
pro-rata share thereof), the Building and the Common Areas in good condition and
repair for a particular calendar year (including all additional costs and
expenses that Landlord reasonably determines that it would have paid or incurred
during such year if the Building had been fully occupied), including by way of
illustration and not limitation, the following: all insurance deductibles;
water, sewer, electrical and other utility charges other than the separately
billed electrical and other charges paid by Tenant as provided in this Lease (or
other tenants in the Building); painting; stormwater discharge fees; tools and
supplies; repair costs; landscape maintenance costs; access patrols; license,
permit and inspection fees; management fees; administrative fees; supplies,
costs, wages and related employee benefits payable for the management,
maintenance and operation of the Building; maintenance, repair and replacement
of the driveways, parking areas, curbs and sidewalk areas (including snow and
ice removal), landscaped areas, drainage strips, sewer lines, exterior walls,
foundation, structural frame, roof, gutters and lighting; and maintenance and
repair costs, dues, fees and assessments incurred under any covenants or charged
by any owners association. The cost of any Operating Expenses that are capital
in nature shall be amortized over the useful life of the improvement (as
reasonably determined by Landlord), and only the amortized portion shall be
included in Operating Expenses.

Notwithstanding the aforesaid, the term Operating Expenses shall not include the
following:

(i) Leasing commissions, real estate brokerage, costs, disbursements, and other
expenses incurred for leasing, renovating, or improving space for tenants;

(ii) Costs incurred by Landlord in discharging its obligations under the Lease
which are to be discharged at Landlord’s sole cost and expense;

(iii) Costs (including permit, license, and inspection fees) incurred in
renovating improving, decorating, painting, of redecorating vacant space or
space for tenants;

(iv) Landlord’s cost of electricity or other service sold to tenants for which
Landlord is to be reimbursed as a charge over the Base Rental and Additional
Rental payable under the lease with that tenant;

(v) Costs incurred by Landlord for alterations that are considered capital
improvements and replacements under generally accepted accounting principles
consistently applied, except for capital improvements required by new laws which
may be amortized with interest over the life of such improvements;

 

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(vi) Depreciation and amortization of The Building;

(vii) Costs incurred because Landlord or another tenant violated the terms of
any lease;

(viii) Overhead and profit paid to subsidiaries or affiliates of Landlord for
management or other services on or to the Building or for supplies or other
materials, to the extent that the costs of the services, supplies, or materials
exceed the competitive costs of the services, supplies, or materials were they
not provided by such subsidiary or affiliate;

(ix) Interest on debt or amortization payments on mortgages or deeds of trust or
any other debt for borrowed money;

(x) Compensation paid to clerks, attendants, or other persons in commercial
concessions operated by Landlord;

(xi) Rentals and other related expenses incurred in leasing air conditioning
systems, elevators, or other equipment ordinarily considered to be of a capital
nature, except (a) equipment used in providing janitorial services that is not
affixed to the Building and (b) emergency rentals to keep the Building
operating;

(xii) Items and services for which Tenant reimburses Landlord or pays third
parties or that Landlord provides selectively to one or more tenants of the
Building other than Tenant without reimbursement;

(xiii) Advertising and promotional expenditures, except for procurement of
services and competitive bids to operate the Building;

(xiv) Repairs or other work needed because of fire, windstorm, or other casualty
or cause to the extent actually insured against by Landlord and Landlord
actually receives proceeds from such insurance (it being agreed that the
deductible amount paid by Landlord is not excluded from Operating Expenses
hereby), or to the extent required to be insured against by Landlord under this
Lease, in the event Landlord fails to carry such insurance;

(xv) Nonrecurring costs incurred to remedy structural defects in original
construction materials or installations;

(xvi) Any costs, fines, or penalties incurred because Landlord violated any
governmental rule or authority;

(xvii) Costs incurred to test, survey, clean up, contain, abate, remove, or
otherwise remedy hazardous wastes or asbestos-containing materials from the
Building unless the wastes or asbestos-containing materials were in or on the
Property because of the negligent or intentional acts of Tenant, its agents,

 

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employees, or contractors, in which event Tenant shall be solely responsible for
the same;

(xviii) Costs incurred in operation of any private club, now or in the future,
located within the office park;

(xix) Costs incurred for repairs or maintenance to the extent actually covered
and paid for by warranties, guarantees or service contracts;

(xx) Expenses in connection with repairs or other work occasioned by the
exercise of the right of eminent domain;

(xxi) Damages incurred due to the gross negligence of Landlord;

(xxii) Structural repairs to the Building, including roof replacement; or

(xxiii) Landlord’s overhead not related to management of the Building.

(d) “Real Estate Taxes” shall mean any form of real estate tax or assessment or
service payments in lieu thereof, and any license fee, commercial rental tax,
improvement bond or other similar charge or tax (other than inheritance,
personal income or estate taxes) imposed upon the Building or Common Areas, or
against Landlord’s business of leasing the Building, by any authority having the
power to so charge or tax, together with costs and expenses of contesting the
validity or amount of the Real Estate Taxes.

(e) “Insurance Premiums” shall mean insurance premiums for insurance coverage on
the Building or Common Areas and shall include all fire and extended coverage
insurance on the Building and all liability insurance coverage on the Common
Areas of the Building, and the grounds, sidewalks, driveways and parking areas
related thereto, together with such other insurance coverages, including, but
not limited to, rent interruption insurance, as are from time to time obtained
by Landlord.

Section 3.03. Payment of Additional Rent.

(a) Any amount required to be paid by Tenant hereunder (in addition to Minimum
Annual Rent) and any charges or expenses incurred by Landlord on behalf of
Tenant under the terms of this Lease shall be considered “Additional Rent”
payable in the same manner and upon the same terms and conditions as the Minimum
Annual Rent reserved hereunder, except as set forth herein to the contrary. Any
failure on the part of Tenant to pay such Additional Rent when and as the same
shall become due shall entitle Landlord to the remedies available to it for
non-payment of Minimum Annual Rent.

(b) In addition to the Minimum Annual Rent specified in this Lease, commencing
as of the Commencement Date, Tenant shall pay to Landlord as Additional Rent for
the Leased Premises, in each calendar year or partial calendar year during the
Lease Term, an amount equal to the Annual Rental Adjustment for such calendar
year. Landlord shall estimate the Annual Rental Adjustment annually, and written
notice

 

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thereof shall be given to Tenant prior to the beginning of each calendar year.
Tenant shall pay to Landlord each month, at the same time the Monthly Rental
Installment is due, an amount equal to one-twelfth (1/12) of the estimated
Annual Rental Adjustment. Tenant shall be responsible for delivering the
Additional Rent to the payment address set forth in Section 1.01(l) above in
accordance with this Section 3.03. If Operating Expenses increase during a
calendar year, Landlord may increase the estimated Annual Rental Adjustment
during such year by giving Tenant written notice to that effect, and thereafter
Tenant shall pay to Landlord in each of the remaining months of such year, an
amount equal to the amount of such increase in the estimated Annual Rental
Adjustment divided by the number of months remaining in such year. Within a
reasonable time after the end of each calendar year, Landlord shall prepare and
deliver to Tenant a statement showing the actual Annual Rental Adjustment.
Within thirty (30) days after receipt of the aforementioned statement, Tenant
shall pay to Landlord, or Landlord shall credit against the next rent payment or
payments due from Tenant, as the case may be, the difference between the actual
Annual Rental Adjustment for the preceding calendar year and the estimated
amount paid by Tenant during such year. This Section 3.03 shall survive the
expiration or any earlier termination of this Lease.

(c) In no event shall Tenant’s Additional Rental for any calendar year relating
to controllable Additional Rental (excluding the costs of security, utilities,
Real Estate Taxes, Insurance Premiums and extraordinary landscaping costs due to
casualty) increase by more than five percent (5%) over that for the previous
calendar year.

Section 3.04. Late Charges. Tenant acknowledges that Landlord shall incur
certain additional unanticipated administrative and legal costs and expenses if
Tenant fails to pay timely any payment required hereunder. Therefore, in
addition to the other remedies available to Landlord hereunder, if any payment
required to be paid by Tenant to Landlord hereunder shall become overdue for
more than ten (10) days, such unpaid amount shall bear interest from the due
date thereof to the date of payment at the lesser of the prime rate of interest,
as reported in the Wall Street Journal (the “Prime Rate”) plus six percent
(6%) per annum and the maximum legal rate of interest.

Section 3.05. Audit Rights. Landlord agrees that, provided that Tenant is not in
uncured default hereunder at such time, Tenant shall have the right during
normal business hours and after at least ten (10) business days prior written
notice from Tenant to Landlord given within thirty (30) days after receipt by
Tenant of Landlord’s statement of the actual Annual Rental Adjustment, to audit
Landlord’s records at Landlords office with respect to the Additional Rental for
the immediately preceding one (1) year period at Tenant’s cost (except where the
total variance of total Operating Expenses is greater than five percent (5%) or
more, in which case Landlord shall pay the reasonable cost of the audit),
provided that the results of any such audit shall be kept strictly confidential
by Tenant and shall not be disclosed to any party except pursuant to litigation
between Landlord and Tenant concerning the Additional Rental.

 

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ARTICLE 4

SECURITY DEPOSIT

Upon execution and delivery of this Lease by Tenant, Tenant shall deposit the
Security Deposit with Landlord as security for the performance by Tenant of all
of Tenant’s obligations contained in this Lease. In the event of a Default by
Tenant, Landlord may at its option apply all or any part of the Security Deposit
to cure all or any part of such Default; provided, however, that any such
application by Landlord shall not be or be deemed to be an election of remedies
by Landlord or considered or deemed to be liquidated damages. If so applied by
Landlord, Tenant agrees promptly, upon demand, to deposit such additional sum
with Landlord as may be required to maintain the full amount of the Security
Deposit. All sums held by Landlord pursuant to this Article 4 shall be without
interest and may be commingled by Landlord. Within thirty (30) days after Tenant
has satisfied all Lease Obligations after the end of the Lease Term, provided
that there is then no uncured Default or any repairs required to be made by
Tenant pursuant to Section 2.03 above or Section 7.03 below, Landlord shall
return the Security Deposit to Tenant.

ARTICLE 5

OCCUPANCY AND USE

Section 5.01. Use. Tenant shall use the Leased Premises for the Permitted Use
and for no other purpose without the prior written consent of Landlord.

Section 5.02. Covenants of Tenant Regarding Use.

(a) Tenant shall (i) use and maintain the Leased Premises and conduct its
business thereon in a safe, careful, reputable and lawful manner, (ii) comply
with all covenants that encumber the Building and all laws, rules, regulations,
orders, ordinances, directions and requirements, relating to Tenant’s specific
use and occupancy of the Leased Premises, of any governmental authority or
agency, now in force or which may hereafter be in force, including. without
limitation, those which shall impose upon Landlord or Tenant any duty with
respect to or triggered by a change in the use or occupation of, or any
improvement or alteration to, the Leased Premises, and (iii) comply with and
obey all reasonable directions, rules and regulations of Landlord, including
without limitation the Building Rules and Regulations attached hereto as
Exhibit E and made a part hereof, as may be modified from time to time by
Landlord on reasonable notice to Tenant, provided, however, that such rules and
regulations are uniformly applicable to all tenants.

(b) Tenant shall not do or permit anything to be done in or about the Leased
Premises that will in any way cause a nuisance, obstruct or interfere with the
rights of other tenants or occupants of the Building or injure or annoy them.
Landlord shall not be responsible to Tenant for the non-performance by any other
tenant or occupant of the Building of any of Landlord’s directions, rules and
regulations, but agrees that any enforcement thereof shall be done uniformly.
Tenant shall not overload the floors of the Leased Premises. All damage to the
floor structure or foundation of the Building due to improper positioning or
storage of items or materials shall be repaired by Landlord at the sole expense
of Tenant; who shall reimburse Landlord immediately therefor upon

 

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demand. Tenant shall not use the Leased Premises, nor allow the Leased Premises
to be used, for any purpose or in any mariner that would (i) invalidate any
policy of insurance now or hereafter carried by Landlord on the Building, or
(ii) increase the rate of premiums payable on any such insurance policy unless
Tenant reimburses Landlord for any increase in premium cheesed.

(c) Tenant shall complete a Tenant Operations Inquiry Form in substantially the
form of Exhibit D attached hereto and made a part hereof.

Section 5.03. Landlord’s Rights Regarding Use. Without limiting any of
Landlord’s rights specified elsewhere in this Lease (a) Landlord shall have the
right at any time, without notice to Tenant, to control, change or otherwise
alter the Common Areas in such manner as it deems necessary or proper so long as
any such control, change or alteration does not materially and adversely affect
Tenant’s use of the Leased Premises for the Permitted Use, and (b) Landlord, its
agents, employees and contractors and any mortgagee of the Building shall have
the right to enter any part of the Leased Premises at reasonable times upon
reasonable notice (except in the event of an emergency where no notice shall be
required) for the purposes of examining or inspecting the same (including,
without limitation, testing to confirm Tenant’s compliance with this Lease),
showing the same to prospective purchasers, mortgagees or tenants, and making
such repairs, alterations or improvements to the Leased Premises or the Building
as Landlord may deem necessary or desirable. Landlord and its duly authorized
representatives shall use reasonable, good faith efforts to minimize
interference with Tenant’s business operations to the extent reasonably
practicable during any such inspection or entry into the Leased Premises.
Provided that Landlord has used good faith efforts to minimize interference with
Tenant’s business operations to the extent reasonably practicable during any
such inspection or entry info the Leased Premises, Landlord shall incur no
liability to Tenant for such entry, nor shall such entry constitute an actual or
constructive eviction of Tenant or a termination of this Lease, or entitle
Tenant to any abatement of rent therefor.

ARTICLE 6

UTILITIES

Tenant shall obtain in its own name and pay directly to the appropriate supplier
the cost of all utilities and services serving the Leased Premises. However, if
any services or utilities are jointly metered with other property, Landlord
shall make a reasonable determination of Tenant’s proportionate share of the
cost of such utilities and services (at rates that would have been payable if
such utilities and services had been directly billed by the utilities or
services providers) and Tenant shall pay such share to Landlord within fifteen
(15) days after receipt of Landlord’s written statement. Provided that the
interruption in supply of utilities is not caused by the gross negligence or
willful misconduct of Landlord, its agents or employees, Landlord shall not be
liable in damages or otherwise for any failure or interruption of any utility or
other Building service and no such failure or interruption shall entitle Tenant
to terminate this Lease or withhold sums due hereunder or constitute an actual
or constructive eviction of Tenant.

 

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ARTICLE 7

REPAIRS MAINTENANCE AND ALTERATIONS

Section 7.01. Repair and Maintenance of Building. Landlord shall make all
necessary repairs, replacements and maintenance to the roof, sprinkler systems,
exterior walls, foundation, structural frame of the Building and the parking and
landscaped areas and other Common Areas and to the utility and sewer pipes
outside serving the Building, so long as such utility and sewer pipes are within
Landlord’s control and so long as such repairs are not necessitated by the acts
of Tenant, its agents, employees and contractors. Landlord shall also maintain
and repair the structural components of the Building, including the base
building electrical system. The cost of such repairs, replacements and
maintenance shall be included in Operating Expenses to the extent provided In
Section 3.02; provided however, to the extent any such repairs, replacements or
maintenance are required because of the negligence, misuse or Default of Tenant,
its employees, agents, contractors,. customers or invitees, Landlord shall make
such repairs at Tenant’s sole expense.

Section 7.02. Repair and Maintenance of Leased Premises. Tenant shall, at its
own cost and expense, maintain the Leased Premises in good condition, regularly
servicing and promptly making all repairs and replacements thereto, including
but not limited to the electrical systems, heating and air conditioning systems,
plate glass, floors, windows and doors, dock-doors, levelers, trash compactors,
and plumbing systems. Tenant shall obtain and maintain in effect throughout the
Lease Term a preventive maintenance contract on the heating, ventilating and
air-conditioning systems and provide Landlord with a copy thereof. The
preventive maintenance contract shall meet or exceed Landlord’s standard
maintenance criteria, and shall provide for the inspection and maintenance of
the heating, ventilating and air conditioning system on at least a semi-annual
basis.

Section 7.03. Alterations. Except for cosmetic and non-structural alterations
costing lees than $25,000.00 in any consecutive twelve (12) month period, such
as recarpeting, repainting, and the installation of built-in fixtures which do
not involve any Building systems, Tenant shall not permit alterations in or to
the Leased Premises unless and until Landlord has approved the plans therefor in
writing. As a condition of such approval and provided so stated therein,
Landlord may require Tenant to remove the alterations and restore the Leased
Premises upon termination of this Lease; otherwise, all such alterations shall
become a part of the realty and the property of Landlord, and shall not be
removed by Tenant. Tenant shall ensure that all alterations shall be made in
accordance with all applicable laws, regulations and building codes, in a good
and workmanlike manner and of quality equal to or better than the original
construction of the Building. No person shall be entitled to any lien derived
through or under Tenant for any labor or material furnished to the Leased
Premises, and nothing in this Lease shall be construed to constitute Landlord’s
consent to the creation of any lien. If any lien is filed against the Leased
Premises for work claimed to have been done for or material claimed to have been
furnished to Tenant, Tenant shall cause such lien to be discharged of record
within thirty (30) days after filing. Tenant shall indemnify Landlord from all
costs, losses, expenses and attorneys’ fees in connection with any construction
or alteration- and any related lien. Tenant agrees that at Landlord’s option,
Landlord or a subsidiary or affiliate of Landlord, who shall receive a fee as
Landlord’s construction manager or general contractor, shall perform or cause to
be performed all work on any alterations to the Leased Premises.

 

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ARTICLE 8

INDEMNITY AND INSURANCE

Section 8.01. Release. All of Tenant’s trade fixtures, merchandise, inventory
and all other personal property in or about the Leased Premises, the Building or
the Common Areas, which is deemed to include the trade fixtures, merchandise,
inventory and personal property of others located in or about the Leased
Premises or Common Areas at the invitation, direction or acquiescence (express
or implied) of Tenant (all of which property shall be referred to herein,
collectively, as ‘Tenants Property”), shall be and remain at Tenant’s sole risk.
Landlord shall not be liable to Tenant or to any other person for, and Tenant
hereby releases Landlord from (a) any and all liability for theft or damage to
Tenant’s Property, and (b) any and all liability for any injury to Tenant or its
employees, agents, contractors, guests and invitees in or about the Leased
Premises, the Building or the Common Areas, except to the extent caused directly
by the gross negligence or willful misconduct of Landlord, its agents, employees
or contractors. Nothing contained in this Section 8.01 shall limit (or be deemed
to limit) the waivers contained in Section 8.06 below. In the event of any
conflict between the provisions of Section 8.06 below and this Section 8.01, the
provisions of Section 8.06 shall prevail. This Section 8.01 shall survive the
expiration or earlier termination of this Lease.

Section 8.02. Indemnification by Tenant. Tenant shall protect, defend, indemnify
and hold Landlord, its agents, employees and contractors harmless from and
against any and all claims, damages, demands, penalties, costs, liabilities,
losses, and expenses (including without limitation reasonable attorneys’ fees
and expenses a the trial and appellate levels) to the extent (a) arising out of
or relating to any act, omission, [gross] negligence, or willful misconduct of
Tenant or Tenant’s agents, employees, contractors, customers or invitees in or
about the Leased Premises, the Building or the Common Areas, (b) arising out of
or relating to any of Tenant’s Property, or (c) arising out of any other act or
occurrence within the Leased Premises, in all such cases caused directly by the
gross negligence or willful misconduct of Landlord, its agents, employees or
contractors. Nothing contained in this Section 8 02 shall limit (or be deemed to
limit) the waivers contained in Section 8.06 below. In the event of any conflict
between the provisions of Section 8.06 and this Section 8.02, the provisions of
Section 8.06 shall prevail. This Section 8.02 shall survive the expiration or
earlier termination of this Lease.

Section 8.03. Indemnification by Landlord. Landlord shall protect, defend,
indemnify and hold Tenant, its agents, employees and contractors harmless from
and against any and all claims, damages, demands, penalties, costs, liabilities,
losses and expenses (including without limitation reasonable attorneys’ fees and
expenses at the trial and appellate levels) to the extent arising out of or
relating to any act, omission, gross negligence or willful misconduct of
Landlord or Landlord’s agents, employees or contractors. Nothing contained in
this Section 8.03 shall limit (or be deemed to limit) the waivers contained in
Section 8.06 below. In the event of any conflict between the provisions of
Section 8.06 below and this Section 8.03, the provisions of Section 8.06 shall
prevail. This Section 8.03 shall survive the expiration or earlier termination
of this Lease.

Section 8.04. Tenant’s Insurance. Tenant shall purchase, at its own expense, and
keep in force at all times during the Lease Term the policies of insurance set
forth below (collectively, “Tenant’s Policies”). All Tenant’s Policies shall
(a) be issued by an insurance company with a

 

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Best’s rating of A or better and otherwise reasonably acceptable to Landlord and
shall be licensed to do business in the state in which the Leased Premises is
located; (b) provide that said insurance shall not be canceled or materially
modified unless 30 days’ prior written notice shall have been given to Landlord;
(c) provide for deductible amounts that are reasonably acceptable to Landlord
(and its lender, if applicable) and (d) otherwise be in such form, and include
such coverages, as Landlord may reasonably require. The Tenants Policies
described in (i) and (ii) below shall (1) provide coverage on an occurrence
basis; (2) name Landlord (and its lender, if applicable) as additional insured;
(3) provide coverage, to the extent insurable, for the indemnity obligations of
Tenant under this Lease; (4) contain a separation of insured parties provision;
(5) be primary, not contributing with, and not in excess of, coverage that
Landlord may carry; and (6) provide coverage with no exclusion for a pollution
incident arising from a hostile fire. All Tenant’s Policies (or, at Landlord’s
option, Certificates of Insurance and applicable endorsements, including,
without limitation, an “Additional Insured-Managers or Landlords of Premises”
endorsement) shall be delivered to Landlord prior to the Commencement Date and
renewals thereof shall be delivered to Landlord’s notice addresses at least 30
days prior to the applicable expiration date of each Tenants Policy, In the
event that Tenant fails, at any time or from time to time, to comply with the
requirements of the preceding sentence, Landlord may (A) order such insurance
and charge the cost thereof to Tenant, which amount shall be payable by Tenant
to Landlord Upon demand, as Additional Rent or (B) impose on Tenant, as
Additional Rent, a monthly delinquency fee, for each month during which Tenant
falls to comply with the foregoing obligation, in an amount equal to five
percent (5%) of the Monthly Rental installments then in effect. Tenant shall
give prompt notice to Landlord and Agent of any bodily injury, death, personal
injury, advertising injury or property damage occurring in and about the
Property.

Tenant shall purchase and maintain throughout the Term, a Tenant’s Policy(ies)
of: (i) commercial general or excess liability insurance, including personal
injury and property damage, in the amount of not less than $2,000.000 per
occurrence, and $5,000,000.00 annual general aggregate, per location,
(ii) comprehensive automobile liability insurance covering Tenant against any
personal injuries or deaths of persons and property damage based upon or arising
out of the ownership, use, occupancy or maintenance of a motor vehicle at the
Premises and all areas appurtenant thereto in the amount of not less than
$1,000,000, combined single limit; (iii) commercial property insurance covering
Tenant’s Property (at its full replacement cost); (iv) workers’ compensation
insurance per the applicable state statutes covering all employees of Tenant;
(v) business interruption insurance with limits not less than an amount equal to
two (2) years’ rent due hereunder, and if Tenant handles, stores or utilizes
Hazardous Substances in its business operations, (vi) pollution legal liability
insurance.

Section 8.05. Landlord’s Insurance. During the Lease Term, Landlord shall main
the following types of insurance, in the amounts specified below (the cost of
which shall be included in Operating Expenses):

(a) a commercial property insurance policy covering the Building (at its full
replacement cost), but excluding Tenant’s personal property; (b) commercial
general public liability insurance covering Landlord for claims arising out of
liability for bodily injury, death, personal injury, advertising injury and
property damage occurring in and about the Park and/or Building arid otherwise
resulting from any acts or omissions of

 

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Landlord, its agents and employees; (c) rent loss Insurance; and (d) any other
insurance coverage deemed appropriate by Landlord or required by Landlord’s
lender. All of the coverages described in (a) through (d) shall be determined
from time to time by Landlord, in its sole discretion. All insurance maintained
by Landlord shall be in addition to and not in lieu of the insurance required to
be maintained by Tenant.

Section 8.06. Waiver of Subrogation. Notwithstanding anything contained in this
Lease to the contrary, Landlord and Tenant hereby waive any rights each may have
against the other on account of any loss of or damage to their respective
property, the Leased Premises, its contents, or other portions of the Building
or Common Areas arising from any risk which is required to be insured against by
Sections 8.04(a)(ii) and 8.05(b) above. The special form coverage Insurance
policies maintained by Landlord and Tenant as provided in this Lease shall
include an endorsement containing an express waiver of any rights of subrogation
by the insurance company against Landlord and Tenant, as applicable.

ARTICLE 9

CASUALTY

In the event of total or partial destruction of the Building or the Leased
Premises by fire or other casualty, Landlord agrees promptly to restore and
repair same; provided, however, Landlord’s obligation hereunder with respect to
the Leased Premises shall be limited to the reconstruction of such of the
leasehold improvements as were originally required to be made by Landlord
pursuant to Section 2.02 above, if any. Rent shall proportionately abate during
the time that the Leased Premises or part thereof are unusable because of any
such damage. Notwithstanding the foregoing, if the Leased Premises are (a) so
destroyed that they cannot be repaired or rebuilt within two hundred ten
(210) days from the casualty date; or (b) destroyed by a casualty that is not
covered by the insurance required hereunder or, if covered, such insurance
proceeds are not released by any mortgage entitled thereto or are insufficient
to rebuild the Building and the Leased Premises; then, in case of a clause
(a) casualty, either Landlord or Tenant may, or, in the case of a clause
(b) casualty, then Landlord may, upon thirty (30) days written notice to the
other party, terminate this Lease with respect to matters thereafter accruing.

Notwithstanding anything to the contrary contained in this Article 9, in the
event that Landlord fails to fully repair, reconstruct or restore the Leased
Premises or the Building within two hundred ten (210) days from the date of
casualty, !hen Tenant may terminate this Lease upon thirty (30) days written
notice and opportunity to cure to Landlord.

ARTICLE 10

EMINENT DOMAIN

If all or any substantial part of the Building or Common Areas shall be acquired
by the exercise of eminent domain, Landlord may terminate this Lease by giving
written notice to Tenant on or before the date possession thereof is so taken.
If all or any part of the Leased Premises shall be acquired by the exercise of
eminent domain so that the Leased Premises shall become impractical for Tenant
to use for the Permitted Use, Tenant may terminate this Lease by giving written
notice to Landlord as of the date possession thereof is so taken. All damages

 

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awarded shall belong to Landlord; provided, however, that Tenant may claim
dislocation damages if such amount is not subtracted from Landlord’s award.

ARTICLE 11

ASSIGNMENT AND SUBLEASE

Section 11.01. Assignment and Sublease.

(a) Tenant shall not assign this Lease or sublet the Leased Premises in whole or
in part without Landlord’s prior written consent, which shall not be
unreasonably withheld, conditioned or delayed. In he event of any assignment or
subletting, Tenant shall remain primarily liable hereunder, and any renewal,
extension, expansion, rights of first offer, rights of first refusal or other
rights or options granted to Tenant under this Lease shall be rendered void and
of no further force or effect. The acceptance of rent from any other person
shall not be deemed to be a waiver of any of the provisions of this Lease or to
be a consent to the assignment of this Lease or the subletting of the Leased
Premises. Any assignment or sublease consented to by Landlord shall not relieve
Tenant (or its assignee) from obtaining Landlord’s consent to any subsequent
assignment or sublease.

(b) By way of example and not limitation, Landlord shall be deemed to have
reasonably withheld consent to a proposed assignment or sublease if in
Landlord’s opinion (i) the Leased Premises are or may be in any way adversely
affected; (ii) the business reputation of the proposed assignee or subtenant is
unacceptable; (iii) the financial worth of the proposed assignee or subtenant is
insufficient to meet the obligations hereunder, or (iv) the prospective assignee
or subtenant is a current tenant at the Park or is a bona-fide third-party
prospective tenant. Landlord further expressly reserves the right to refuse to
give its consent to any subletting if the proposed rent is publicly advertised
to be less than the then current rent for similar premises in the Building. If
Landlord refuses to give its consent to any proposed assignment or subletting,
Landlord may, at its option, within thirty (30) days after receiving a request
to consent, terminate this Lease by giving Tenant thirty (30) days’ prior
written notice of such termination, whereupon each party shall be released from
all further obligations and liability hereunder, except those which expressly
survive the termination of this Lease.

(c) If -Tenant shall make any assignment or sublease, with Landlord’s consent,
for a rental in excess of the rent payable under this lease, Tenant shell pay to
Landlord fifty percent (50%) of any such “net excess rental” upon receipt.
Tenant agrees to pay Landlord $500.00 upon demand by Landlord for reasonable
accounting and ‘attorneys’ fees incurred in conjunction with the processing and
documentation of any requested assignment, subletting or any other hypothecation
of this Lease or Tenant’s interest in and to the Leased Premises as
consideration for Landlord’s consent. As used herein, the term “net excess
rental” shall exclude the costs of marketing fees, leasing commissions,
reasonable attorney’s fees (not to exceed $300.00) and tenant improvements
Incurred by Tenant in connection with any such assignment or sublease.

 

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Section 11.02. Permitted Transfer. Notwithstanding anything to the contrary
contained in Section 11.01 above, Tenant shall have the right, without
Landlord’s consent, but upon not less than ten (10) days’ prior notice to
Landlord, to (a) sublet all or part of the Leased Premises to any related
corporation or other entity which controls Tenant, is controlled by Tenant or is
under common control with Tenant; (b) assign all or any part of this Lease to
any related corporation or other entity which controls Tenant, is controlled by
Tenant, or is under common control with Tenant, or to a successor entity into
which or with which Tenant is merged or consolidated or which acquires
substantially all of Tenant’s assets or property; or (c) effectuate any public
offering of Tenant’s stock on the New York Stock Exchange or in the NASDAQ over
the counter market, provided that in the event of a transfer pursuant to clause
(b), the tangible net worth of Tenant’s successor entity after any such
transaction is not less than the tangible net worth of Tenant as of the date
hereof and provided further that such successor entity assumes al! of the
obligations and liabilities of Tenant (any such entity hereinafter referred to
as a “Permitted Transferee”). For the purpose of this Article 11 (i) “control”
shall mean ownership of not less than fifty percent (50%) of all voting stock or
legal and equitable interest in such corporation or entity, and (ii) “tangible
net worth” shall mean the excess of the value of tangible assets (i.e., assets
excluding those which are intangible such as goodwill, patents and trademarks)
over liabilities. Any such transfer shall not relieve Tenant of its obligations
under this Lease. Nothing in this paragraph is Intended to nor shall permit
Tenant to transfer its interest under this Lease as part of a fraud or
subterfuge to Intentionally avoid its obligations under this Lease (for example,
transferring its Interest to a shell corporation that subsequently files a
bankruptcy), and any such transfer shall constitute a Default hereunder. Any
change in control of Tenant resulting from a merger, consolidation, or a
transfer of partnership or membership interests, a stock transfer, or any sale
of substantially al of the assets of Tenant that do not meet the requirements of
this Section 11.02 shall be deemed an assignment or transfer that requires
Landlord’s prior written consent pursuant to Section 11.01 above.

ARTICLE 12

TRANSFERS BY LANDLORD

Section 12.01. Sale of the Building. Landlord shall have the right to sell the
Building at any time during the Lease Term, subject only to the rights of Tenant
hereunder; and such sale shall operate to release Landlord from liability
hereunder after the date of such conveyance.

Section 12.02. Estoppel Certificate. Within ten (10) days following receipt of a
written request from Landlord, Tenant shall execute and deliver to Landlord,
without cost to Landlord, an estoppel certificate in such form as Landlord may
reasonably request certifying (a) that this Lease is in full force and effect
and unmodified or stating the nature of any modification, (b) the date to which
rent has been paid, (c) that there are not, to Tenant’s knowledge, any uncured
Defaults or specifying such Defaults. If any are claimed, and (d) any other
matters or state of facts reasonably required respecting the Lease. Such
estoppel may be relied upon by Landlord and by any purchaser or mortgagee of the
Building.

Section 12.03. Subordination. Landlord shall have the right to subordinate this
Lease to any mortgage, deed to secure debt, ground lease, deed of trust or other
instrument in the nature thereof, and any amendments or modifications thereto
(collectively, a “Mortgage”) presently existing or hereafter encumbering the
Building by so declaring in such Mortgage. Within ten

 

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(10) days following receipt of a written request from Landlord, Tenant shall
execute and deliver to Landlord, without cost, any instrument that Landlord
deems reasonably necessary or desirable to confirm the subordination of this
Lease.

Within thirty (30) days following the execution of this Lease, Landlord shall
request, and will use its reasonable, good faith efforts to procure, a
subordination, non-disturbance and attornment agreement (an “SNDA”) from
Landlord’s lender in favor of Tenant. Notwithstanding the foregoing, the parties
acknowledge and agree that Landlord is not obligated to procure such SNDA.

In the event that the Building is sold by Landlord and a new Mortgage is placed
upon the Building by the purchaser, it shall be a condition to Tenant’s
obligation to subordinate hereunder to such new Mortgage that Tenant receive
from the holder of such Mortgage standard non-disturbance protection benefiting
Tenant.

ARTICLE 13

DEFAULT AND REMEDY

Section 13.01. Default. The occurrence of any of the following shall be a
“Default”:

(a) Tenant fails to pay any Monthly Rental Installments or Additional Rent
within five (5) days after written notice from Landlord that the same is due.
Tenant shall be afforded one (1) late payment during the Term without incurring
an occurrence of Default, so long as such payment is not more than twenty
(20) days late.

(b) Tenant fails to perform or observe any other term, condition, covenant or
obligation required under this Lease For a period of thirty (30) days alter
written notice thereof from Landlord; provided, however, that if the nature of
Tenant’s Default is such that more than thirty (30) days are reasonably required
to cure, then Tenant shall have such additional time to cure such Default as is
reasonably necessary under the circumstances in question, provided that Tenant
commences such curative efforts as soon as is reasonably practical within said
thirty (30) day period and thereafter diligently completes the required action
within a reasonable time (not to exceed thirty (30) additional days).

(c) Tenant shall vacate or abandon the Leased Premises, or fail to occupy the
Leased Premises or any substantial portion thereof for a period of thirty
(30) days, unless the Tenant is attempting to sublease the Premises and remains
current on all of its obligations hereunder, including, without limitation,
utilities and pest control. In the event that Tenant shall vacate or abandon the
Leased Premises, or fail to occupy the Leased Premises or any substantial
portion thereof for a period of more than thirty (30) days, Landlord, at
Landlord’s option, may terminate this Lease, in which event Tenant shall
immediately surrender the Leased Premises to Landlord, and if Tenant fails to do
so, Landlord may, without prejudice to any other remedy it may have, enter upon
and take possession of the Leased Premises and expel or remove Tenant and any
other person who may be occupying the Leased Premises or any part thereof,
without being liable for prosecution or any claim of damages therefor.

 

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(d) Tenant shall assign or sublet all or a portion of the Leased Premises in
contravention of the provision of Article 11 of this Lease.

(e) All or substantially all of Tenant’s assets in the Leased Premises or
Tenant’s interest in this Lease are attached or levied under execution (and
Tenant does not discharge the same within sixty (60) days thereafter); a
petition in bankruptcy, insolvency or for reorganization or arrangement is filed
by or against Tenant (and Tenant fails to secure a stay or discharge thereof
within sixty (60) days thereafter); Tenant to insolvent and unable to pay its
debts as they become due; Tenant makes a general assignment for the benefit of
creditors; Tenant takes the benefit of any insolvency action or law; the
appointment of a receiver or trustee in bankruptcy for Tenant or its assets if
such receivership has not been vacated or set aside within thirty (30) days
thereafter; or, dissolution or other termination of Tenant’s corporate charter
if Tenant is a corporation.

Section 13.02. Remedies. Upon the occurrence of any Default, Landlord shall have
the following rights and remedies, in addition to those stated elsewhere in this
Lease and those allowed by law or in equity, any one or more of which may be
exercised without further notice to Tenant:

(a) Landlord may re-enter the Leased Premises and cure any Default of Tenant,
and Tenant shall reimburse Landlord as Additional Rent for any costs and
expenses which Landlord thereby incurs; and Landlord shall not be liable to
Tenant for any loss or damage which Tenant may sustain by reason of Landlord’s
action.

(b) Without terminating this Lease, Landlord may terminate Tenant’s right of to
possession of the Leased Premises, and thereafter, neither Tenant nor any person
claiming under or through Tenant shall be entitled to possession of the Leased
Premises, and Tenant shall immediately surrender the Leased Premises to
Landlord, and Landlord may re-enter the Leased Premises and dispossess Tenant
and any other occupants of the Leased Premises by any lawful means and may
remove their effects, without prejudice to any other remedy that Landlord may
have. Upon termination of possession, Landlord may (i) re-let all or any part
thereof for a term different from that which would otherwise have constituted
the balance of the Lease Term and for rent and on terms and conditions different
from those contained herein, whereupon Tenant shah be immediately obligated to
pay to Landlord an amount equal to the present value (discounted at the Prime
Rate) of the difference between the rent provided for herein and that provided
for In any lease covering a subsequent re-letting of the Leased Premises, for
the period which would otherwise have constituted the balance of the Lease Term
(the “Accelerated Rent Difference”), or (ii) without re-letting, declare to be
immediately due and payable the difference between the present value (discounted
at the Prime Rate) of all rent which would have been due under this Lease for
the balance of the Lease Term to be immediately due and payable as liquidated
damages (the “Accelerated Rent”) and the fair market rental value of the
Premises for the same period of time (the “Fair Market Rental”), as determined
by an appraiser selected by Landlord, based upon recently completed comparable
lease transactions in the Building, the Park and the leasing submarket (the
Northwest Atlanta submarket) in which Premises is located (such difference being
referred to as the “Accelerated Fair Market Difference”). Upon

 

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termination of possession, Tenant shall be obligated to pay to Landlord (A) the
Accelerated Rent Difference or the Accelerated Fair Market Difference, whichever
is applicable, (B) all loss or damage that Landlord may sustain by reason of
Tenant’s Default (“Default Damages”), which shall include, without limitation,
expenses of preparing the Leased Premises for re-letting, demolition, repairs,
tenant finish improvements, brokers’ commissions and attorneys’ fees, and
(C) all unpaid Minimum Annual Rent and Additional Rent that accrued prior to the
date of termination of possession, plus any interest and late fees due hereunder
(the “Prior Obligations”).

(c) Landlord may terminate this Lease and declare the Accelerated Rent
Difference or the Accelerated Fair Market Difference, whichever is applicable,
to be immediately due and payable, whereupon Tenant shall be obligated to pay to
Landlord (i) the Accelerated Rent Difference or the Accelerated Fair Market
Difference, whichever is applicable, (ii) all of Landlord’s Default Damages, and
(iii) all Prior Obligations. It is expressly agreed and understood that all of
Tenant’s liabilities and obligations set forth in this subsection (c) shall
survive termination.

(d) Landlord and Tenant acknowledge and agree that the payment of the
Accelerated Rent Difference or the Accelerated Fair Market Difference as set
above shall not be deemed a penalty or forfeiture, but merely shall constitute
payment of liquidated damages, it being understood that actual damages to
Landlord are extremely difficult, if not impossible, to ascertain. Neither the
filing of a dispossessory proceeding nor an eviction of personalty in the Leased
Premises shall be deemed to terminate the Lease.

(e) Landlord may sue for injunctive relief or to recover damages for any loss
resulting from the Default.

Section 13.03. Landlord’s Default and Tenant’s Remedies. Landlord shall be in
default if it fails to perform any term, condition, covenant or obligation
required under this Lease for a period of thirty (30) days after written notice
thereof from Tenant to Landlord; provided, however, that if the term, condition,
covenant or obligation to be performed by Landlord is such that it cannot
reasonably be performed within thirty (30) days, such default shall be deemed to
have been cured if Landlord commences such performance within said thirty-day
period and thereafter diligently undertakes to complete the same. Upon the
occurrence of any such default, Tenant may sue for injunctive relief or to
recover damages for any loss directly resulting from the breach, but Tenant
shall not be entitled to terminate this Lease or withhold, offset or abate any
sums due hereunder.

Section 13.04. Limitation of Landlord’s Liability. IF LANDLORD SHALL FAIL TO
PERFORM ANY TERM, CONDITION, COVENANT OR OBLIGATION REQUIRED TO BE PERFORMED BY
IT UNDER THIS LEASE AND IF TENANT SHALL, AS A CONSEQUENCE THEREOF, RECOVER A
MONEY JUDGMENT AGAINST LANDLORD, TENANT AGREES THAT IT SHALL LOOK SOLELY TO
LANDLORD’S RIGHT, TITLE AND INTEREST IN AND TO THE BUILDING, NOR OF ANY OWNER,
PARTNER, MEMBER OR MANAGER IN OR OF LANDLORD, FOR THE COLLECTION OF SUCH
JUDGMENT; AND TENANT FURTHER AGREES THAT NO OTHER ASSETS OF

 

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LANDLORD SHALL BE SUBJECT TO LEVY, EXECUTION OR OTHER PROCESS FOR THE
SATISFACTION OF TENANTS JUDGMENT.

Section 13.05. Nonwaiver of Defaults. Neither party’s failure or delay in
exercising any of its rights or remedies or other provisions of this Lease shall
constitute a waiver thereof or affect its right thereafter to exercise or
enforce such right or remedy or other provision. No waiver of any default shall
be deemed to be a waiver of any other default. Landlord’s receipt of less than
the full rent due shall not be construed to be other than a payment on account
of rent than due, nor shall any statement on Tenant’s check or any letter
accompanying Tenant’s check be deemed an accord and satisfaction. No act or
omission by Landlord or its employees or agents during the Lease Term shall be
deemed an acceptance of a surrender of the Leased Premises, and no agreement to
accept such a surrender shall be valid unless in wilting and signed by Landlord.

Section 13.06. Attorney Fees. If either party defaults in the performance or
observance of any of the terms, conditions, covenants or obligations contained
in this Lease and the non-defaulting party obtains a judgment against the
defaulting party, then the defaulting party agrees to reimburse the
non-defaulting party for reasonable attorneys’ fees incurred in connection
therewith. In addition, if a monetary Default shall occur and Landlord engages
outside counsel to exercise its remedies hereunder, and then Tenant cures such
monetary Default, Tenant shall pay to Landlord, on demand, all expenses incurred
by Landlord as a result thereof, including reasonable attorneys’ fees, court
costs and expenses.

ARTICLE 14

LANDLORD’S RIGHT TO RELOCATE TENANT

Landlord shall have the right upon at least sixty (60) days’ prior written
notice to Tenant to relocate Tenant and to substitute for the Leased Premises
other space in the Building or in another building owned by Landlord, or an
affiliated entity of Landlord, within the Park containing at least as much
square footage as the Leased Premises. Landlord shall improve such substituted
space, at its expense, with improvements at least equal in quantity and quality
to those in the Leased Premises including, without limitation, mutually agreed
upon improvements for Tenant’s “clean room”, laboratory and manufacturing space
(collectively, the ‘Manufacturing Space’) within the Premises, consistent with
the then-current improvement standards for such Manufacturing Space. Landlord
shall reimburse Tenant for all reasonable third party expenses incurred in
connection with, and caused by, such relocation. In no event shall Landlord be
liable to Tenant for any consequential damages as a result of any such
relocation, including, but not limited to, loss of business income or
opportunity. Notwithstanding anything contained herein to the contrary, Tenant
may not be relocated by Landlord pursuant to this Article 14 more than one
(1) time during the Initial Lease Term nor more than one (1) time during any
future Renewal Period.

 

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ARTICLE 15

TENANT’S RESPONSIBILITY REGARDING ENVIRONMENTAL LAWS AND

HAZARDOUS SUBSTANCES

Section 15.01. Environmental Definitions.

(a) “Environmental Laws” shall mean all present or future federal, state and
municipal laws, ordinances, rules and regulations applicable to the
environmental and ecological condition of the Leased Premises, and the rules and
regulations of the Federal Environmental Protection Agency and any other
federal, state or municipal agency or governmental board or entity now or
hereafter having jurisdiction over the Leased Premises.

(b) “Hazardous Substances” she mean those substances included within the
definitions of “hazardous substances,” “hazardous materials,” “toxic substances”
“solid waste” or Infectious waste” under Environmental Laws and petroleum
products.

Section 15.02. Restrictions on Tenant. Tenant shall not cause or permit the use,
generation, release, manufacture, refining, production, processing, storage or
disposal of any Hazardous Substances on, under or about the Leased Premises, or
the transportation to or from the Leased Premises of any Hazardous Substances,
except as necessary and appropriate for its Permitted Use in which case the use,
storage or disposal of such Hazardous Substances shall be performed in
compliance with the Environmental Laws and the highest standards prevailing in
the industry.

Section 15.03. Notices, Affidavits, Etc. Tenant shall immediately (a) notify
Landlord of (i) any actual or alleged violation by Tenant, its employees,
agents, representatives, customers, invitees or contractors of any Environmental
Laws on, under or about the Leased Premises, or (ii) the presence or suspected
presence of any Hazardous Substances on, under or about the Leased Premises, and
(b) deliver to Landlord any notice received by Tenant relating to (a)(i) and
(a)(ii) above from any source. Tenant shall execute affidavits, representations
and the like within five (5) days of Landlord’s request therefor concerning
Tenant’s best knowledge and belief regarding the presence of any Hazardous
Substances on, under or about the Leased Premises.

Section 15.04. Tenant’s Indemnification. Tenant shall indemnify Landlord and
Landlord’s managing agent from any and all claims, losses, liabilities, costs,
expenses and damages, including without limitation reasonable attorneys’ fees,
costs of testing and remediation costs, incurred by Landlord in connection with
any breach by Tenant of its obligations under this Article 14. The covenants and
obligations under this Article 15 shall survive the expiration or earlier
termination of this Lease.

Section 15.05. Existing Conditions. Notwithstanding anything contained in this
Article 15 to the contrary, Tenant shall not have any liability to Landlord
under this Article 15 resulting from any conditions existing, or events
occurring, or any Hazardous Substances existing or generated, at, in, on, under
or in connection with the Leased Premises prior to the Commencement Date of this
Lease (or any earlier access or occupancy of the Leased Premises by, through, or
under Tenant, including without limitation access for construction purposes)

 

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except to the extent Tenant knowingly exacerbates the same. Landlord shall
Indemnity Tenant from any and all claims, losses, liabilities, costs, expenses
and damages, Including, without limitation, reasonable attorneys’ fees incurred
by Tenant in connection with any such ‘existing conditions’, except to the
extent knowingly exacerbated by Tenant.

ARTICLE 16

MISCELLANEOUS

Section 16.01. Benefit of Landlord and Tenant. This Lease shall inure to the
benefit and be binding upon Landlord and Tenant and their respective successors
and assigns.

Section 16.02. Governing Law. This Lease shall be governed in accordance with
the laws the State where the Building is located.

Section 16.03. Force Majeure. Landlord and Tenant (except with respect to the
payment of any monetary obligation) be excused for the period of any delay in
the performance of any non-monetary obligation hereunder when such delay is
occasioned by causes beyond its control, including but not limited to work
stoppages, boycotts, slowdowns or strikes; shortages of materials, equipment,
labor or energy; unusual weather conditions; or acts or omissions of
governmental or political bodies.

Section 16.04. Examination of Lease. Submission of this instrument by Landlord
to Tenant for examination or signature does not constitute an offer by Landlord
to lease the Leased Premises. This Lease shall become effective, if at all, only
upon the execution by and delivery to both Landlord and Tenant. Execution and
delivery of this Lease by Tenant to Landlord constitutes an offer to lease the
Leased Premises on the terms contained herein.

Section 16.05. Indemnification for Leasing Commissions. The parties hereby
represent and warrant that the only real estate brokers involved in the
negotiation and execution of this Lease are the Brokers and that no other party
is entitled, as a result of the actions of the respective party, to a commission
or other fee resulting from the execution of this Lease. Each party shall
indemnify the other from any and all liability for the breach of this
representation and warranty on its part and shall pay any compensation to any
other broker or person who may be entitled thereto. Landlord shall pay any
commissions due Brokers based on this Lease pursuant to separate agreements
between Landlord and Brokers.

Section 16.06. Notices. Any notice required or permitted to be given under this
Lease or by law shall be deemed to have been given if it is written and
delivered in person or by overnight courier or mailed by certified mail, postage
prepaid, to the party who is to receive such notice at the address specified in
Section 1.01(1). If sent by overnight courier, the notice shall be deemed to
have been given one (1) day after sending. If mailed postage prepaid, the notice
shall be deemed to have been given on the date that is three (3) business days
following mailing. Either party may change its address by giving written notice
thereof to the other party.

Section 16.07. Partial Invalidity; Complete Agreement. If any provision of this
Lease shall be held to be invalid, void or unenforceable, the remaining
provisions shall remain in full force and effect. This Lease represents the
entire agreement between Landlord and Tenant covering everything agreed upon or
understood in this transaction. There are no oral promises,

 

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conditions, representations, understandings, interpretations or terms of any
kind as conditions or inducements to the execution hereof or in effect between
the parties. No change or addition shall be made to this Lease except by a
written agreement executed by Landlord and Tenant.

Section 16.08. Financial information. From time to time during the Lease Term,
but not more than twice per Operating Year, except in connection with
prospective purchasers or lenders, Tenant shall deliver to Landlord information
and documentation describing and concerning Tenant’s financial condition, and in
form and substance reasonably acceptable to Landlord, within ten (10) days
following Landlord’s written request therefor. Upon Landlord’s request, Tenant
shall provide to Landlord the most currently available audited financial
statement of Tenant , and if no such audited financial statement is available,
then Tenant shall Instead deliver to Landlord its most currently available
balance sheet and income statement Furthermore, upon the delivery of any such
financial information from time to time during the Lease Term, Tenant shall be
deemed to automatically represent and warrant to Landlord that the financial
information delivered to Landlord is true, accurate and complete, and that there
has been no adverse change in the financial condition of Tenant since the date
of the then-applicable financial information.

Section 16.09. Waiver of Jury Trial. THE LANDLORD AND THE TENANT, TO THE FULLEST
EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BROUGHT BY ANY PARTY TO THIS LEASE WITH RESPECT TO THIS LEASE, THE
LEASED PREMISES, OR ANY OTHER MATTER RELATED TO THIS LEASE OR THE LEASED
PREMISES.

Section 16.10. Representations and Warranties.

(a) Tenant hereby represents and warrants that (i) Tenant is duly organized,
validly existing and in good standing (if applicable) in accordance with the
laws of the State under which it was organized; (ii) Tenant is authorized to do
business in the State where the Building is located; and (iii) the individual(s)
executing and delivering this Lease on behalf of Tenant has been properly
authorized to do so, and such execution and delivery shall bind Tenant to its
terms.

(b) Landlord hereby represents and warrants that (i) Landlord is duly organized,
validly existing and in good standing (if applicable) in accordance with the
laws of the State under which it was organized; (ii) Landlord is authorized to
do business in the State where the Building is located; and (iii) the
individual(s) executing and delivering this Lease on behalf of Landlord has been
properly authorized to do so, and such execution and delivery shall bind
Landlord to its terms.

Section 16.11. Signage. Tenant may, at its own expense, erect a sign concerning
the business of Tenant that shall be in keeping with the decor and other signs
on the Building and in the Park. All signage (inducing the signage described in
the preceding sentence) in or about the Leased Premises shall be first approved
by Landlord and shall be in compliance with the any codes and recorded
restrictions applicable to the sign or the Building. The location, size and
style of all signs shall be approved by Landlord. Tenant agrees to maintain any
sign in good

 

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state of repair, and upon expiration of the Lease Term, Tenant agrees to
promptly remove such signs and repair any damage to the Leased Premises.

Section 16.12. Parking. Tenant shall be entitled free of charge to the
non-exclusive use of the parking spaces designated for the Building by Landlord.
Tenant agrees not to overburden the parking facilities and agrees to cooperate
with Landlord and other tenants in the use of the parking facilities. Landlord
reserves the right In its absolute discretion to determine whether parking
facilities are becoming crowded and, in such event, to reasonably allocate
parking spaces. between Tenant and other tenants. There will be no assigned
parking unless Landlord, in its sole discretion, deems such assigned parking
advisable. No vehicle may be repaired or serviced in the parking area and any
vehicle brought into the parking area by Tenant, or any of Tenant’s employees,
contractors or Invitees, and deemed abandoned by Landlord will be towed and all
coats thereof shall be borne by the Tenant. M driveways, ingress and egress, and
all parking spaces are for the joint use of all tenants. There shall be no
parking permitted on any of the streets or roadways located within the Park. In
addition, Tenant agrees that its employees will not park In the spaces
designated visitor parking.

Section 16.13. Time. Time Is of the essence of each term and provision of this
Lease.

Section 16.14. Consent. Where the consent of a party is required, such consent
will not be unreasonably withheld.

Section 16.15. Usufruct. Tenant’s interest in the Leased Premises is a usufruct,
not subject to levy and sale, and not assignable by Tenant except as expressly
set forth herein.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day
and year first above written.

 

LANDLORD:

FRANKLIN FOREST INVESTORS, LLC, a

Delaware limited liability company

By:

 

GEHS Funding II, L.L.C., a Delaware limited

liability company, its sole member

 

By:

 

High Street Equity Advisors II, LLC, a

Massachusetts limited liability company,

its Manager

   

By:

 

/s/ Daniel J. Coughlin

     

Name:

 

Daniel J. Coughlin

     

Title:

 

Authorized Member

(SIGNATURES CONTINUED ON THE FOLLOWING PAGE)

 

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TENANT:

SPINEMEDICA CORP., a Florida corporation

By:

 

/s/ Rebeccah Brown

 

Name:

 

Rebeccah Brown

 

Title:

 

Vice President, Operations

Attest:

By:

 

/s/ John Maynard

 

Name:

 

John Maynard

 

Title:

 

Vice President, Product Management

 

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EXHIBIT A

SITE PLAN OF LEASED PREMISES

[TO BE ADDED)

 

A - 1

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EXHIBIT B

TENANT IMPROVEMENTS

Intentionally Omitted

 

B - 1

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EXHIBIT C

LETTER OF UNDERSTANDING

 

 

Attention:

 

 

 

 

 

  RE:

Lease Agreement between Franklin Forest Investors, LLC (“Landlord”) and
SpineMedica Corp. (“Tenant”) for the Leased Premises located at 811 Livingston
Court, Marietta, Georgia 30037 (the “Leased Premises”), dated
                                         (the “Lease”).

Dear Tenant

The undersigned, on behalf Tenant, certifies to Landlord as follows:

1. The Commencement Date under the Lease is
                                        .

2. The rent commencement data is                                         .

3. The expiration date of the Lease Term is
                                        .

4. The Lease (including amendments or guaranty, if any) is the entire agreement
between Landlord and Tenant as to the leasing of the Leased Premises and is in
full force and effect.

5. The Landlord has completed the improvements designated as Landlord’s
obligation under the Lease (excluding punchlist items as agreed upon by Landlord
and Tenant), if any, and Tenant has accepted the Leased Premises as of the
Commencement Date.

6. To the best of the undersigned’s knowledge, there are no uncured events of
default by either Tenant or Landlord under the Lease.

IN WITNESS WHEREOF, the undersigned has caused this Letter of Understanding to
be executed this          day of                     , 20        .

 

SPINEMEDICA CORP., a Florida corporation

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

C - 1

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EXHIBIT D

TENANT OPERATIONS INQUIRY FORM

 

1.

    

Name of Company/Contract:

 

 

  .

2.

    

Address/Phone:

 

 

  .

3.

    

Provide a brief description of your business and operations:

  

 

    

 

    

 

    

 

    

 

4.

    

Will you be required to make filings and notices or obtain permits as required
by Federal and/or State regulations for the operations at the proposed facility?
Specifically:

                YES      NO     

a.      SARA Title III Section 312 (Tier 1) reports

   ¨      ¨     

(> 10,000 lbs. of hazardous materials STORED at any one time)

            

b.      SARA Title III Section 313 (Tier III) Form R reports

   ¨      ¨     

(> 10,000 lbs. of hazardous materials USED per year)

            

c.      NPDES or SPDES Stormwater Discharge permit

   ¨      ¨     

(answer “No” if “No-Exposure Certification” filed)

            

d.      EPA Hazardous Waste Generator ID Number

   ¨      ¨

5.

    

Provide a list of chemicals and wastes that will be used and/or generated at the
proposed location. Routine office and cleaning supplies are not included. Make
additional copies if required.

 

Chemical/Waste

  

Approximate Annual Quantity

Used or Generated

  

Storage Container(s) (i.e.,

Drums, cartons, Totes, Bags,

ASTs, USTs, etc.)

                             

Chemical/Waste

  

Approximate Annual Quantity

Used or Generated

  

Storage Container(s) (i.e.,

Drums, cartons, Totes, Bags,

ASTs, USTs, etc.)

                       

 

D - 1

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EXHIBIT E

RULES AND REGULATIONS

1. The sidewalks, entrances, driveways and roadways serving and adjacent to the
Leased Premises shall not be obstructed or used for any purpose other than
ingress and egress. Landlord shall control the Common Areas.

2. No awnings or other projections shall be attached to the outside wails of the
Building. No curtains, blinds, shades or screens shall be attached to or hung
in, or used in connection with, any window or door of the Leased Premises other
than Landlord standard window coverings without Landlord’s prior written
approval. All electric ceiling fixtures hung in offices or spaces along the
perimeter of the Building must be fluorescent, of a quality, type, design and
tube color approved by Landlord. Neither the interior nor the exterior of any
windows shall be coated or otherwise sunscreened without written consent of
Landlord.

3. No sign, advertisement, notice or handbill shall be exhibited, distributed,
painted or affixed by any tenant on, about or from any part of the Leased
Premises, the Building or in the Common Areas including the parking area without
the prior written consent of Landlord. In the event of the violation of the
foregoing by any tenant, Landlord may remove or stop same without any liability,
and may charge the expense incurred in such removal or stopping to tenant.

4. The sinks and toilets and other plumbing fixtures shall not be used for any
purpose other than those for which they were constructed, and no sweepings,
rubbish, rags, or other substances shall be thrown therein. All damages
resulting from any misuse of the fixtures shall be borne by the tenant who, or
whose subtenants, assignees or any of their servants, employees, agents,
visitors or licensees shall have caused the same.

5. No boring, cutting or stringing of wires or laying of any floor coverings
shall be permitted, except with the prior written consent of the Landlord and as
the Landlord may direct. Landlord shall direct electricians as to where and how
telephone or data cabling are to be introduced. The location of telephones, call
boxes and other office equipment affixed to the Leased Premises shall be subject
to the approval of Landlord.

6. No bicycles, vehicles, birds or animals of any kind (except seeing eye dogs)
shall be brought into or kept in or about the Leased Premises, and no cooking
shall be done or permitted by any tenant on the Leased Premises, except
microwave cooking, and the preparation of coffee, tea, hot chocolate and similar
items for tenants and their employees. No tenant shall cause or permit any
unusual or objectionable odors to be produced in or permeate from the Leased
Premises.

7. The Leased Premises shall not be used for manufacturing, unless such use
conforms to the zoning applicable to the area, and the Landlord provides written
consent. No tenant shall occupy or permit any portion of the Leased Premises to
be occupied as an office for the manufacture or sale of liquor, narcotics, or
tobacco in any form, or as a medical office, or as a barber or manicure shop, or
a dance, exercise or music studio, or any type of school or daycare or copy,
photographic or print shop or an employment bureau without the express written

 

E - 1

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consent of Landlord. The Leased Premises shall not be used for lodging or
sleeping or for any immoral or illegal purpose.

8. No tenant shall make, or permit to be made any unseemly, excessive or
disturbing noises or disturb or interfere with occupants of this or neighboring
buildings or premises or those having business with them, whether by the use of
any musical instrument, radio, phonograph, unusual noise, or In any other way.
No tenant shall throw anything out of doors, windows or down the passageways.

9. No tenant, subtenant or assignee nor any of its servants, employees, agents,
visitors or licensees, shall at any time bring or keep upon the Leased Premises
any flammable, combustible or explosive fluid, chemical or substance or firearm.

10. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by any tenant, nor shall any changes be made to existing locks
or the mechanism thereof. Each tenant must upon the termination of his tenancy,
restore to the Landlord all keys of doors, offices, and toilet rooms, either
furnished to, or otherwise procured by, such tenant and In the event of the loss
of keys so furnished, such tenant shall pay to the Landlord the cost of
replacing the same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such changes.

11. No tenant shall overload the floors of the Leased Premises. All damage to
the floor, structure or foundation of the Building due to improper positioning
or storage items or materials shall be repaired by Landlord at the sole post and
expense of tenant, who shall reimburse Landlord immediately therefor upon
demand.

12. Each tenant shall be responsible for all persons entering the Building at
tenants’ invitation, express or implied. Landlord shall in no case be liable
damages for any error with regard to the admission to or exclusion from the
Building of any person. In case of an invasion, mob riot, public excitement or
other circumstances rendering such salon advisable in Landlord’s opinion,
Landlord reserves the right without any abatement of rent to require all persons
to vacate the Building and to prevent access to the Building during the
continuance of the same for the safety of the tenants and the protection of the
Building and the property in the Building.

13. Canvassing, soliciting and peddling in the Building are prohibited, and each
tenant shall report and otherwise cooperate to prevent the same.

14. All equipment of any electrical or mechanical nature shall be placed by
tenant in the Leased Premises in settings that will, to the maximum extent
possible, absorb or prevent any vibration, noise and annoyance.

15. There shall not be used in any space, either by any tenant or others, any
hand trucks except those equipped with rubber tires and rubber side guards.

16. The scheduling of tenant move-ins shall be before or after normal business
hours and on weekends, subject to the reasonable discretion of Landlord.

 

E - 2

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17. The Building is a smoke-free Building. Smoking is strictly prohibited within
the Building. Smoking shall only be allowed in areas designated as a smoking
area by Landlord. Tenant and its employees, representatives, contractors or
invitees shall not smoke within the Building or throw cigar or cigarette butts
or other substances or litter of any kind in or about the Building, except in
receptacles for that purpose. Landlord may, at its sole discretion, impose a
charge against monthly rent of $50.00 per violation by tenant or any of its
employees, representatives, contractors or invitees, of this smoking policy.

18. Tenants will insure that all doors are securely locked, and water faucets,
electric fights and electric machinery are turned off before leaving the
Building.

19. Tenant, its employees, customers, invitees and guests shall, when using the
parking facilities in and around the Budding, observe and obey all signs
regarding fire lanes and no-parking and driving speed zones and designated
handicapped and visitor spaces, and when parking always park between the
designated lines. Landlord reserves the right to tow away, at the expense of the
owner, any vehicle which is improperly parked or parked in a no-parking zone or
in a designated handicapped area, and any vehicle which is left in any parking
lot in violation of the foregoing regulation. All vehicles shall be parked at
the sole risk of the owner, and Landlord assumes no responsibility for any
damage to or loss of vehicles.

20. Tenant shall be responsible for and cause the proper disposal of medical
waste, including hypodermic needles, created by its employees.

21. No outside storage is permitted including without limitation the storage of
trucks and other vehicles.

22. No tenant shall be allowed to conduct an auction from the Leased Premises
without the prior written consent of Landlord.

It is Landlord’s desire to maintain in the Building and Common Areas the highest
standard of dignity and good taste consistent with comfort and convenience for
tenants. Any action or condition not meeting this high standard should be
reported directly to Landlord. The Landlord reserves the right to make such
other and further rules and regulations as in its judgment may from time to time
be necessary for the safety, care and cleanliness of the Building and Common
Areas, and for the preservation of good order therein.

 

E - 3

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EXHIBIT F

SPECIAL STIPULATIONS

 

1.

LETTER OF CREDIT

Tenant agrees, in addition to and not In lieu of the Security Deposit, to
deliver to Landlord upon execution of this Lease a dean, irrevocable letter of
credit (the “Letter of Credit”) established in Landlord’s (and its successors’
and assigns’) favor in the amount of Twenty-Five Thousand and 00/100 Dollars
($25,000.00), issued by a federally insured banking or lending institution
reasonably acceptable to Landlord and in other form and substance reasonably
acceptable to Landlord. The Letter of Credit shall specifically provide for
partial draws and shall by its terms be transferable by the beneficiary
thereunder. Any transfer fees shall be payable by Tenant. If Tenant fails to
make any payment of rent or other charges due to Landlord under the terms of
this Lease, or otherwise defaults hereunder, beyond any applicable notice and
cure period, Landlord, at Landlord’s option, may make a demand for payment under
the Letter of Credit in an amount equal to the amounts then due and owing to
Landlord under this Lease. In the event that Landlord draws upon the Letter of
Credit, Tenant shall present to Landlord a replacement Letter of Credit in the
full Letter of Credit Amount satisfying all of the terms and conditions of this
paragraph within ten (10) days after receipt of notice from Landlord of such
draw. Tenant’s failure to do so within such 10-day period will constitute a
default hereunder (Tenant hereby waiving any additional notice and grace or cure
period), and upon such default Landlord shall be entitled to immediately
exercise all rights and remedies available to it hereunder, at law or in equity,
Landlord’s election to draw under the Latter of Credit and to hold the proceeds
of the drawing under the Letter of Credit as a part of Tenant’s Security Deposit
shall not be deemed a cure of any default by Tenant hereunder and shall not
relieve Tenant from its obligation to present to Landlord a replacement Letter
of Credit which complies with the terms and conditions of this Lease. Tenant
acknowledges that any proceeds of a draw made under the Letter of Credit and
thereafter held as a part of Tenant’s Security Deposit may be used by Landlord
to cure or satisfy any obligation of Tenant hereunder as if such proceeds were
instead proceeds of a draw made under a Letter of Credit that remained
outstanding and in full force and effect at the time such amounts are applied by
Landlord to cure or satisfy any such obligation of Tenant. Tenant hereby
affirmatively disclaims any interest Tenant has, may have, claims to have, or
may claim to have in any proceeds drawn by Landlord under the Letter of Credit
and held in accordance with the terms hereof. Without limiting the generality of
the foregoing, provided no event of Default by Tenant has occurred under the
Lease at any time during the Lease Term, the value of the Letter of Credit will
be reduced to Seventeen Thousand and 00/100 Dollars ($17,000.00) following the
last day of the thirteenth (13m) full month of the Lease Term; to Nine Thousand
and 00/100 Dollars ($9,000.00) following the last day of the twenty-fifth (25 )
full month of the Lease Term; and released following the end of the Lease Term.

 

2.

POSSESSION OF PREMISES

Landlord and Tenant acknowledge and agree that Tenant has accepted and is in
possession of the Leased Premises pursuant to that certain sublease by and
between CCA Global Partners, Inc. (f/k/a Carpet Co-op of America Association) as
sublessor and Tenant as sublessee

 

F - 1

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and dated                                         , 2007 (the ‘Sublease). Tenant
acknowledges and agrees that such possession of the Leased Premises by Tenant
pursuant to the Sublease shall be deemed to satisfy Landlords obligation to
deliver possession of the Premises under this Lease for all purposes hereunder.
Tenant further acknowledges and agrees that any uncured default of Tenant as
sublessee under the Sublease shall be deemed a Default of Tenant’s obligations
under this Lease.

 

F - 2