Exhibit 10.9

INDUSTRIAL SPACE LEASE

(GROSS)

THIS LEASE, dated July 1, 2012, for reference purposes only, is made by and
between ROBERT D. DUCOTE and GAIL H. DUCOTE (“Landlord”), and Viasystems
Corporation (“Tenant”), to be effective and binding upon the parties as of the
date of the last designated signatories to this Lease shall have executed this
Lease (the “Effective Date of this Lease”).

ARTICLE 1

REFERENCES

 

1.1 REFERENCES: All references in this Lease (subject to any further
clarification contained in this Lease) to the following terms shall have the
following meaning or refer to the respective address, person, date, time period,
amount, percentage, calendar year or fiscal year as below set forth:

 

A.     Tenant’s Address for Notice:

  

355 Turtle Creek Court

San Jose, CA. 95125

  

B.     Tenant’s Representative:

            Phone number:

  

John R. Johnston

503-992-4280, 503-805-7972 mobile

  

C.     Landlord’s Address for Notice:

  

18781 Westview Drive

Saratoga, CA. 95070

  

D.     Landlord’s Representative:

            Phone Number:

  

Robert Ducote

408-313-9972 mobile, 873-2300

  

E.     Intended Commencement Date:

   July 1, 2012   

F.      Intended Term:

   36 Months   

G.     Lease Expiration Date:

   June 30, 2015   

H.     Tenant’s Punch List Period:

   Fifteen (15) days   

I.       First Month’s Prepaid Rent:

   $12,487.00   

J.      Last Month’s Prepaid Rent:

   $807.61   

K.     Tenant’s Security Deposit:

   Not applicable   

 

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L.     Late Charge Amount:

   $100.00   

M.    Real Property Tax Base Year:

   2012-2013   

N.     Insurance Base Year:

   2012-2013   

O.     Tenant’s Required Liability Coverage:

   $500,000.00   

P.      Tenant’s Number of Parking Spaces:

   Entire lot for 355 Turtle Creek Court   

 

Q. Project and Building: That certain real property situated in the City of San
Jose, County of Santa Clara, State of California, as presently improved with one
(1) building, which real property is shown on the Site Plan attached hereto as
Exhibit “A” and is commonly known as or otherwise described as follows:

“A one story concrete tilt-up building consisting of approximately 13,990 square
feet located at 355 Turtle Creek Court, San Jose, CA 95125”

 

R. Leased Premises: That certain interior space within the Building, which space
is shown outlined in red on the Floor Plan attached hereto as Exhibit “B”
consisting of approximately 13,990 square feet and, for purposes of this Lease,
agreed to contain said number of square feet. The Leased Premises are commonly
known as or otherwise described as follows:

“Approximately 13,990 square feet of office and warehouse space consisting of
that one story concrete tilt-up building located at 355 Turtle Creek Court, San
Jose, CA 95125, in its entirety”

 

S. Base Monthly Rent: The term “Base Monthly Rent” shall mean the following:
Without prior demand, Tenant shall pay monthly rent on or before the tenth day
of each month as follows:

MONTHS 1-12: TWELVE THOUSAND FOUR HUNDRED EIGHTY SEVEN & 00/100 DOLLARS
($12,487.00)

MONTHS 13-24: TWELVE THOUSAND EIGHT HUNDRED TWENTY FIVE & 00/100 DOLLARS
($12,825.00)

MONTHS 25-36: THIRTEEN THOUSAND NINETY FIVE & 00/100 DOLLARS ($13, 095.00)

 

T. Permitted Use: The term “Permitted Use” shall mean the following: Office use
and machining and fabrication of electronic components. Such use shall not
include the manufacture, use, or storage of industrial solvents, excepting
ordinary janitorial cleaning solutions and then only in quantities necessary for
routine janitorial cleaning of the demised premises. Notwithstanding the
foregoing sentence, such solvents may be used or stored on the premises if and
only if Tenant obtains written authorization executed by Landlord specifying the
solvent or solvents permitted to be used or stored and the permissible
quantities of each solvent.

 

U. Exhibits: The term “Exhibits” shall mean the Exhibits to this Lease, which is
described as follows:

Exhibit “A”—Site Plan showing the Project and delineating the building in which
the Leased Premises are located.

 

V. Addenda: The term “Addenda” shall mean the Addendum or (Addenda) to this
Lease.

 

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ARTICLE 2

LEASED PREMISES TERM AND POSSESSION

 

2.1 DEMISE OF LEASED PREMISES: Landlord hereby leases to Tenant and tenant
hereby leases from Landlord for Tenant’s own use in the conduct of Tenant’s
business and not for purposes of speculating in real estate, for the Lease Term
and upon the terms and subject to the conditions of this Lease, that certain
interior space described in Article 1 as the Leased Premises, reserving and
excepting to Landlord the exclusive right to all profits to be derived from any
assignments or sub-lettings by Tenant during the Lease Term by reason of the
appreciation in the fair market rental value of the Leased Premises. Landlord
further reserves the right to install, maintains, use and replace ducts, wires,
conduits and pipes leading through the Leased Premises in locations which will
not materially interfere with Tenant’s use of the Lease Premises. Tenant’s Lease
of the Leased Premises, together with the appurtenant right to use the Common
Areas as described in Paragraph 2.2 below, shall be conditioned upon and be
subject to the continuing compliance by Tenant with (i) all the terms and
conditions of this Lease, (ii) all Laws governing the use of the Leased Premises
and the Project, (iii) all Private Restrictions, easements and other matters now
of public record respecting the use of the Leased Premises and the Project, and
(iv) all reasonable rules and regulations from time to time established by
Landlord.

 

2.2 RIGHT TO USE COMMON AREAS: As an appurtenant right to Tenant’s right to the
use of the Leased Premises, Tenant shall have the non-exclusive right to use the
Common Areas in conjunction with other tenants of the Project and their
invitees, subject to the limitations on such use as set forth in Article 4, and
solely for the purposes for which they were designed and intended. Tenant’s
right to use the Common Areas shall terminate concurrently with any termination
of this Lease.

 

2.3 LEASE COMMENCEMENT DATE AND LEASE TERM: The term of this Lease shall begin,
and the Lease Commencement Date shall be deemed to have occurred, on the
Intended Commencement Date (as set forth in Article 1) unless either
(i) Landlord is unable to deliver possession of the Leased Premises to Tenant on
the Intended Commencement Date, in which case the Lease Commencement Date shall
be as determined pursuant to Paragraph 2.7 below (the “Lease Commencement
Date”). The term of this Lease shall end on the Lease Expiration Date (as set
forth in Article 1), irrespective of whatever date the Lease Commencement Date
is determined to be pursuant to the foregoing sentence. The Lease Term shall be
that period of time commencing on the Lease Commencement Date and ending on the
Lease Expiration Date (the “Lease Term”).

 

2.4 DELIVERY OF POSSESSION: Landlord shall deliver to Tenant possession of the
Leased Premises on or before the Intended Commencement Date (as set forth in
Article 1) in their presently existing condition, broom clean, unless Landlord
shall have agreed, as a condition to Tenant’s obligation, to accept possession
of the Leased Premises, pursuant to an Addenda attached to and made a part of
this Lease to modify existing interior improvements or to make, construct and/or
install additional specified improvements within the Leased Premises, in which
case Landlord shall deliver to Tenant possession of the Leased Premises on or
before the Intended Commencement Date as so modified and/or improved. If
Landlord is unable to so deliver possession of the Leased Premises to Tenant on
or before the Intended Commencement Date, for whatever reason, Landlord shall
not be in default under this Lease, nor shall this Lease be void, voidable or
cancelable by Tenant until the lapse of one hundred twenty days after the
Intended Commencement Date (the “delivery grace period”); however, the Lease
Commencement Date shall not be deemed to have occurred until such date as
Landlord notifies Tenant that the Leased Premises are Ready for Occupancy.
Additionally, the delivery grace period above set forth shall be extended for
such number of days as Landlord may be delayed in delivering possession of the
Leased Premises to Tenant by reason of Force Majeure or the actions of Tenant.
If Landlord is unable to deliver possession of the Leased Premises to Tenant
within the described delivery grace period (including any extensions thereof by
reason of Force Majeure of the actions of Tenant), then Tenant’s sole remedy
shall be to cancel and terminate this Lease, and in no event shall Landlord be
liable to Tenant for such delay. Tenant may not cancel this Lease at any time
after the date Landlord notifies Tenant the Lease Premises are Ready for
Occupancy.

 

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2.5 ACCEPTANCE OF POSSESSION: Tenant acknowledges that it has inspected the
Leased Premises and is willing to accept them in their existing condition, broom
clean, unless Landlord shall have agreed, as a condition to Tenant’s obligation
to accept possession of the Leased Premises, pursuant to an Addenda attached to
and made a part of this Lease to modify existing interior improvements or to
make, construct and/or install additional specified improvements within the
Leased Premises, in which case Tenant agrees to accept possession of the Lease
Premises when Landlord has substantially completed such modifications or
improvements and the Lease Premises are Ready for Occupancy. If Landlord shall
have so modified existing improvements or constructed additional improvements
within the Leased Premises for Tenant, Tenant shall, with Tenant’s punch list
Period (as set forth in Article 1) which shall commence on the date that
Landlord notifies Tenant that the Leased Premises are Ready for Occupancy,
submit to Landlord a punch list of all incomplete and/or improper worked
performed by Landlord. Upon the expiration of Tenant’s punch list Period, Tenant
shall be conclusively deemed to have accepted the Leased Premises in their
then-existing condition as so delivered by landlord to Tenant, except as to
those items reasonably set forth in Tenant’s punch list, provided that such
punch list was submitted to Landlord with Tenant’s Punch list Period.
Additionally, Landlord agrees to place in good working order all existing
plumbing, lighting, heating, ventilating and air conditioning systems within the
Leased Premises and all man doors and roll-up truck doors serving the Leased
Premises to the extent that such systems and/or items are not in good operating
condition as of the date Tenant accepts possession of the Leased Premises;
provided that, an only if, Tenant notifies Landlord in writing of such failures
or deficiencies within five business days from the date Tenant so accepts
possession of the Lease Premises.

 

2.6 SURRENDER OF POSSESSION: Immediately prior to the expiration or upon the
sooner termination of this Lease, tenant shall remove all of Tenant’s signs from
the exterior of the Building and shall remove all of Tenant’s equipment, trade
fixtures, furniture, supplies, wall decorations and other personal property from
the Leased Premises, and shall vacate and surrender the Leased Premises to
Landlord in the same condition, broom clean, as existed at the Lease
Commencement Date, reasonable wear and tear expected. Tenant shall repair all
damage to the Leased Premises caused by Tenant’s removal of tenant’s property
and all damage to the exterior of the Building caused by Tenant’s removal of
Tenant’s signs. Tenant shall patch and refinish, to Landlord’s reasonable
satisfaction, all penetrations made by Tenant or its employees to the floor,
walls or ceiling of the Lease Premises, whether such penetrations were made with
Landlord’s approval or not. Tenant shall repair or replace all stained or
damaged ceiling tiles, wall coverings and floor coverings to the reasonable
satisfaction of Landlord. Tenant shall repair all damage caused by Tenant to the
exterior surface of the Building and the paved surfaces of the outside areas
adjoining the Leased Premises and, where necessary, replace or resurface same.
Additionally, Tenant shall, prior to the expiration or sooner termination of
this Lease, remove any improvements constructed or installed by Tenant which
Landlord requests be so removed by Tenant and repair all damage caused by such
removal. If the Leased Premises are not surrendered to Landlord in the condition
required by this Paragraph at the expiration or sooner termination of this
Lease, Landlord may, at Tenant’s expense, so remove Tenant’s signs, property
and/or improvements not so removed and make such repairs and replacements not so
made or hire, at Tenant’s expense, independent contractors to perform such work.
Tenant shall be liable to Landlord for all costs incurred by Landlord in
returning the Leased Premises to the required condition, plus interest on all
costs incurred from the date paid by Landlord at the then maximum rate of
interest not prohibited by Law until paid, payable by Tenant to Landlord within
tent days after receipt of a statement therefore from Landlord. Tenant shall
indemnify Landlord against loss or liability resulting from delay by Tenant in
so surrendering the Leased Premises, including, without limitation, any claims
made by any succeeding tenant or any losses to Landlord due to the lost
opportunities to lease succeeding tenants.

 

2.7 EARLY OCCUPANCY: If Tenant enters into possession of the Lease Premises
prior to the Intended Commencement Date (or permits its contractors to enter the
Leased Premises prior to the Intended Commencement Date), unless otherwise
agreed in writing by Landlord, the Lease Commencement Date shall be deemed to
have occurred on such sooner date, and Tenant shall be obligated to perform all
its obligations under this Lease, including the obligation to pay rent, from
that sooner date.

 

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ARTICLE 3

RENT, LATE CHARGES AND SECURITY DEPOSITS

 

3.1 BASE MONTHLY RENT: Commencing on the Lease Commencement Date (as determined
pursuant to Paragraph 2.3 above) and continuing throughout the Lease Term,
Tenant shall pay to Landlord, without prior demand therefore, in advance on the
first day of each calendar month, as base monthly rent, the amount set forth as
“Base Monthly Rent” in Article 1 (the “Base Monthly Rent”).

 

3.2 ADDITIONAL RENT: Commencing on the Lease Commencement Date (as determined
pursuant to Paragraph 2.3 above) and continuing throughout the Lease Term,
Tenant shall pay to Landlord as additional rent (the “Additional Rent”) the
following amounts:

 

  A. Tenant’s Proportionate Share of all increases in Landlord’s Insurance Costs
and Real Property Taxes over those paid during the period set forth in Article 1
as the “Insurance Base Year” and the “Real Property Tax Base Year”,
respectively, plus an accounting fee equal to five percent of such increase.
Payment shall be made by whichever of the following methods is from time to time
designated by Landlord:

 

  (1) Landlord may bill to Tenant, on a periodic basis not more frequent than
monthly, Tenant’s Proportionate Share of any increases in Landlord’s Insurance
Costs or Real Property Taxes, as paid or incurred by Landlord during the current
period over those paid or incurred in the same period during the applicable Base
Year, and Tenant shall pay such share of such increases, together with an
accounting fee equal to five percent of the amount billed, within ten days after
receipt of a written bill therefore from Landlord; or

 

  (2) Landlord may deliver to Tenant Landlord’s reasonable estimate of the
increase in Landlord’s Insurance Costs and/or Real Property Taxes it anticipates
will be paid or incurred for the ensuing calendar or fiscal year, as the case
requires, over those paid or incurred during the applicable Base Year, and
Tenant shall pay its Proportionate Share of the estimated increases for such
year, together with an accounting fee equal to five percent of the amount
billed, in equal monthly installments during such year with the installments of
Base Monthly Rent. Landlord reserves the right to change from time to time the
method of billing Tenant its Proportionate Share of such increases or the
periodic basis on which such increases are billed.

 

  B. Landlord’s share of the consideration received by Tenant upon certain
assignments and subletting as required by Article 7;

 

  C. Any legal fees and costs that Tenant is obligated to pay or reimburse to
Landlord pursuant to Article 13; and

 

  D. Any other charges or reimbursements due Landlord from Tenant pursuant to
the terms of this Lease.

 

  E. For the purposes of this Lease, the term “Additional Rent” shall not
include an accounting fee equal to five percent (5%) of the increase in the
Tenant’s Proportionate Share in any increases in Landlord’s Insurance Costs or
Real Property Taxes. No such charge shall be imposed on the Tenant during the
term of the Lease.

 

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3.3. YEAR-END ADJUSTMENTS: If Landlord shall have elected to charge Tenant its
Proportionate Share of the increases in Landlord’s Insurance Costs and/or Real
Property Taxes on an estimated basis in accordance with the provisions of
Paragraph 3.2A(2) above, Landlord shall furnish to Tenant within three months
following the end of the applicable calendar or fiscal year, as the case may be,
a statement setting forth (i) the amount of Landlord’s Insurance Costs and/or
Real Property Taxes paid or incurred during the just ended calendar or fiscal
year, as appropriate, (ii) the amount of Landlord’s Insurance Costs and/or Real
Property Taxes paid or incurred during the applicable Base Year, and
(iii) Tenant’s Proportionate Share of the increases, if any, in Landlord’s
Insurance Costs and/or Real Property Taxes for the just ended fiscal or calendar
year, as appropriate. If Tenant shall have paid more than its Proportionate
Share of such increases for the previous year, Landlord shall, at its election,
either (i) credit the amount of such overpayment toward the next ensuing payment
or payments of Additional Rent that would otherwise be due or (ii) refund in
cash to Tenant the amount of such overpayment. If such year-end statement shall
show that Tenant did not pay its Proportionate Share of any such increases in
full, then Tenant shall pay to Landlord the amount of such underpayment,
together with the accounting fee applicable thereto, within ten days from
Landlord’s billing of same to Tenant. The provisions of this Paragraph shall
survive the expiration or sooner termination of this Lease.

 

3.4 LATE CHARGE AND INTEREST ON RENT IN DEFAULT: Tenant acknowledges that the
late payment by Tenant of any monthly installment of Base Monthly Rent or any
Additional Rent will cause Landlord to incur certain costs and expenses not
contemplated under this Lease, the exact amounts of which are extremely
difficult or impractical to fix. Such costs and expenses will include, without
limitation, administration and collection costs and processing and accounting
expenses. Therefore, if any installment of Base Monthly Rent is not received by
Landlord from Tenant with six calendar days after the same becomes due, Tenant
shall immediately pay to Landlord a late charge in an amount equal to the amount
set forth in Article 1 as the “Late Charge Amount”, and if any Additional Rent
is not received by Landlord within six calendar days after same becomes due,
Tenant shall immediately pay to Landlord a late charge in an amount equal to ten
percent of the Additional Rent not so paid. Landlord and Tenant agree that this
late charge represents a reasonable estimate of such costs and expenses and is
fair compensation to Landlord for its loss suffered by reason of Tenant’s
failure to make timely payment. In no event shall this provision for a late
charge be deemed to grant to Tenant a grace period or extension of time within
which to pay any rental installment or prevent Landlord from exercising any
right or remedy available to Landlord upon Tenant’s failure to pay each rental
installment due under this Lease when due, including the right to terminate this
Lease. If any rent remains delinquent for a period in excess of six calendar
days, then, in addition to such late charge, Tenant shall pay to Landlord
interest on any rent that is not so paid from said sixth day at the then maximum
interest rate not prohibited by Law until paid.

 

3.5 PAYMENT OF RENT: All rent shall be paid in lawful money of the United
States, without any abatement, deduction or offset for any reason whatsoever, to
Landlord at such address as Landlord may designate from time to time. Tenant’s
obligation to pay Base Monthly Rent and all Additional Rent shall be prorated at
the commencement and expiration of the Lease Term. The failure of Tenant to pay
any of the Additional Rent as required pursuant to this Lease when due shall be
treated the same as a failure by Tenant to pay Base Monthly Rent when due, and
Landlord shall have the same rights and remedies against Tenant as Landlord
would have if Tenant failed to pay the Base Monthly Rent when due.

 

3.6 PREPAID RENT: Tenant has paid to Landlord the amount set forth in Article 1
as “First Month’s Prepaid Rent” as prepayment of rent for credit against the
first installment(s) of Base Monthly Rent due hereunder. Additionally, Tenant
has paid to Landlord the Monthly Rent due hereunder, subject, however, to the
provisions of Paragraph 3.7 below.

 

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3.7 SECURITY DEPOSIT: Tenant has deposited with Landlord the amount set forth in
Article 1 as the “Security Deposit” as security for the performance by Tenant of
the terms of this Lease to be performed by Tenant, and not as prepayment of
rent. Landlord may apply such portion or portions of the Security Deposit as are
reasonably necessary for the following purposes: (i) to remedy any default by
Tenant in the payment of Base Monthly Rent or Additional Rent or a late charge
or interest on default rent; (ii) to repair damage to the Lease Premises caused
by Tenant; (iii) to clean and repair the Lease Premises following their
surrender to Landlord if not surrendered in the condition required pursuant to
the provisions of Article 2; and (iv) to remedy any other default of Tenant to
the extent permitted by Law including, without limitation, paying in full on
Tenant’s behalf any sums claimed by material-men or contractors of Tenant to be
owing to them by Tenant for work done or improvements made at Tenant’s request
to the Lease Premises. In this regard, Tenant hereby waives any restriction on
the uses to which the Security Deposit may be applied as contained in
Section 1950.7(c) of the California Civil Code and/or any successor statute. In
the event the Security Deposit or any portion thereof is so used, Tenant shall
pay to Landlord, promptly upon demand, an amount in cash sufficient to restore
the Security Deposit to the full original sum if Tenant fails to promptly
restore the Security Deposit and if Tenant shall have paid to promptly restore
the Security Deposit and if Tenant shall have paid to Landlord any sums as “Last
Month’s Prepaid Rent” Landlord may, in addition to any other remedy Landlord may
have under this Lease reduce the amount of Tenant’s Last Month’s Prepaid Rent by
transferring all or portions of such Last Month’s Prepaid Rent to Tenant’s
Security Deposit until such Security Deposit is restored to the amount set forth
in Article 1. Landlord shall not be deemed a trustee of the Security Deposit.
Landlord may use the Security Deposit in Landlord’s ordinary business and shall
not be required to segregate it from its general accounts. Tenant shall not be
entitled to any interest on the Security Deposit. If Landlord transfers the
Building during the Lease Term, Landlord may pay the Security Deposit to any
subsequent owner in conformity with the provisions of Section 1905.7 of the
California Civil Code and/or any successor statute. In which event the
transferring landlord shall be released from all liability for the return of the
Security Deposit. Tenant specifically grants to Landlord (and hereby waives the
provisions of California Civil Code Section to the contrary) a period of sixty
days following a surrender of the Leased Premises by Tenant to Landlord within
which to restore the Security Deposit (less permitted deductions) to Tenant, if
being agreed between Landlord and Tenant that sixty days is a reasonable period
of time within which to inspect the Lease Premises, make required repairs,
receive and verify workmen’s billings therefore, and prepare a final accounting
with respect to such deposit. In no event shall the Security Deposit, or any
portion thereof, be considered prepaid rent.

For the purposes of this Lease, paragraph 3.7 “Security Deposit” above, shall
not be applicable during this Lease Term.

ARTICLE 4

USE OF LEASED PREMISES AND COMMON AREAS

 

4.1 PERMITTED USE: Tenant shall be entitled to use the Leased Premises solely
for the “Permitted use” as set forth in Article 1 and for no other purpose
whatsoever. Tenant shall continuously and without interruption use the Lease
Premises for such purpose for the entire Lease Term. Any discontinuance of such
use for a period of thirty consecutive calendar days shall be, at Landlord’s
election, a default by Tenant under the terms of this Lease. Subject to the
limitations contained in this Article 4, Tenant shall have the right to use the
Common Areas, in conjunction with other tenants and during normal business
hours, solely for the purposes for which they were intended and for no other
purposes whatsoever. Tenant shall not have the right to use the exterior
surfaces of exterior walls, the area beneath the floor or the area above the
ceiling of the Leased Premises.

 

4.2 GENERAL LIMITATIONS ON USE: Tenant shall not do or permit anything to be
done in or about the Leased Premises, the Building, the Common Areas or the
Project which does or could (i) interfere with the rights of other tenants or
occupants of the Building or the Project, (ii) jeopardize the structural
integrity of the Building or (iii) cause damage to any part of the Building or
the Project. Tenant shall not operate any equipment within the Leased Premises
which does or could (i) injure, vibrate or shake the Leased Premises or the
building, (ii) damage, overload or impair the efficient operation of any
electrical, plumbing, heating, ventilating or air conditioning systems within or
servicing the Lease Premises or the Building or (iii) damage or impair the
efficient operation of the sprinkler system (if any) within or servicing the
Leased Premises or the Building. Tenant shall not install any equipment or
antennas on or make any penetrations of the exterior walls or roof of the
Building. Tenant shall not affix any equipment to or make any penetrations or
cuts in the floor, ceiling or walls of the Leased Premises. Tenant shall not
place any loads upon the floors, walls ceilings or roof systems, which could
endanger the structural integrity of the Building or damage its floors,
foundations or supporting structural components. Tenant shall not place any
explosive, flammable or harmful fluids or other waste materials in the drainage
systems of the Building or the Project. Tenant shall not drain or discharge any
fluids in the landscaped areas or across the paved areas o the Project. Tenant
shall not use any area located outside the Leased Premises for the storage of
its materials, supplies, inventory or equipment, and all such materials,
supplies, inventory and equipment shall at all times be stored within the Leased
Premises. Tenant shall not commit nor permit to be committed any waste in or
about the Leased Premises, the Common Areas or the Project.

 

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4.3 NOISE AND EMISSIONS: All noise generated by Tenant in its use of the Leased
Premises shall be confined or muffled so that it does not interfered with the
businesses or annoy other tenants of the Building or the Project. All dust,
fumes odors and other emissions generated by Tenant’s use of the Leased Premises
shall be sufficiently dissipated in accordance with sound environmental
practices and exhausted from the Leased Premises in such a manner so as not to
interfere with the businesses of or annoy other tenants of the Building or the
Project, or cause any damage to the Leased Premises or the Building or any
component part thereof or the property of other tenants of the Building of the
Project.

 

4.4 TRASH DISPOSAL: Tenant shall provide trash and garbage disposal facilities
inside the Leased Premises for all of its trash, garbage and waste requirements
(other than general office waste which may be disposed of in the trash bins
provided by Landlord), and shall cause such trash, garbage and waste to be
regularly removed from the Leased Premises at Tenant’s sole cost. Tenant shall
keep all areas outside the Leased Premises and all fire corridors and mechanical
equipment rooms in or about the Leased Premises free and clear of all trash,
garbage, waste and boxes containing same at all times.

 

4.5 PARKING: Tenant is allocated, and Tenant and its employees and invitees
shall have the non-exclusive right to use, not more than the number of parking
spaces set forth in Article 1 as “Tenant’s Number of Parking Spaces”. Tenant
shall not, at any time, use or permit its employees or invitees to use more
parking spaces than the number so allocated to Tenant. Tenant shall not have the
exclusive right to use any specific parking space, and Landlord reserves the
right to designate from time to time the location of the parking spaces
allocated for Tenant’s use. In the event Landlord elects or is required by any
Law to limit or control parking within the Project, whether by validation of
parking tickets or any other method, Tenant agrees to participate in such
validation or other program as reasonably established by Landlord. Tenant shall
not, at any time, park or permit to be parked any trucks or vehicles adjacent to
entryways or loading areas within the Project so as to interfere in any way with
the use of such areas, nor shall Tenant, at any time, park or permit the parking
of Tenant’s trucks or other vehicles, or the trucks and vehicles of Tenant’s
suppliers or others, in any portion of the Common Areas not designated by
Landlord for such use by Tenant. Tenant shall not, at any time, park or permit
to be parked any recreational vehicles, inoperative vehicles or equipment on any
portion of the common parking area or other Common Areas of the Project. Tenant
agrees to assume responsibility for compliance by its employees and invitees
with the parking provisions contained herein. If Tenant or its employees park
any vehicle within the Project in violation of these provisions, then Landlord
may charge Tenant, as Additional Rent, and Tenant agrees to pay, as Additional
Rent, Ten Dollars per day for each day or partial day that each such vehicle is
parked in any area other than that designated. Tenant hereby authorizes
Landlord, at Tenant’s sole expense, to tow away from the Project and store until
redeemed by its owner any vehicle belonging to Tenant or Tenant’s employees
parked in violation of these provisions.

 

4.6 SIGNS: Tenant shall not place or install on or within any portion of the
Leased Premises, the Building, the Common Areas or the Project any sign (other
than a business identification sign first approved by Landlord in accordance
with this Paragraph), advertisements, banners, placards or pictures which are
visible from the exterior of the Leased Premises. Tenant shall not place or
install on or within any portion of the Leased Premises, the Building, the
Common Areas or the Project any business identification sign which is visible
from the exterior of the Leased Premises until Landlord shall have first
approved in writing the location, sized, content, design, method of attachment
and material to be used in the making of such sign. Any signs, once approved by
Landlord, shall be installed only in strict compliance with Landlord’s approval,
at Tenant’s expense, using a person first approved by Landlord to install same.
Landlord may remove any signs (not first approved in writing by Landlord),
advertisements, banners, placards or pictures so placed by Tenant on or with the
Leased Premises, the Building, the Common Areas or the Project and charge to
tenant the cost of such removal, together with any costs incurred by landlord to
repair any damage caused thereby, including any cost incurred to restore the
surface upon which such sign was so affixed to its original condition. Tenant
shall remove any such signs, repair any damage caused thereby, and restore the
surface upon which the sign was affixed to its original condition, all to
Landlord’s reasonable satisfaction, upon the termination of this Lease.

 

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4.7 COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS: Tenant shall not use or
permit any person to use the Leased Premises in any manner, which violates any
Laws or Private Restrictions. Tenant shall abide by and shall promptly observe
and comply with, at its sole cost and expense, all Laws and Private Restrictions
respecting the use and occupancy of the Lease Premises, the Building, the Common
Areas or the Project and shall defend with competent counsel, indemnify and hold
Landlord harmless from any claims, damages or liability resulting from Tenant’s
failure to do so.

 

4.8 COMPLIANCE WITH INSURANCE REQUIREMENTS: With respect to any insurance
policies carried by Landlord in accordance with the provisions of this Lease,
Tenant shall not conduct (nor permit any other person to conduct) any activities
with the Leased Premises, or store, keep or use anything with the Leased
Premises with (i) is prohibited under the terms of any of such policies,
(ii) could result in the termination of the coverage afforded under any of such
policies, (iii) could give to the insurance carriers the right to cancel any of
such policies, or (iv) could cause an increase in the rates (over standard
rates) charged for the coverage afforded under any such policies. Tenant shall
comply with all requirements of any insurance company, insurance underwriter, or
Board of Fire Underwriters which are necessary to maintain, at standard rates,
the insurance coverage’s carried by either Landlord or Tenant pursuant to this
Lease.

 

4.9 LANDLORD’S RIGHT TO ENTER: Landlord and its agents shall have the right to
enter the Leased Premises during normal business hours and subject to Tenant’s
reasonable security measures for the purpose of (i) inspecting the same;
(ii) supplying any services to be provided by Landlord to Tenant; (iii) showing
the Leased Premises to prospective purchasers, mortgagees or tenants;
(iv) making necessary alternations, additions or repairs; (v) performing any of
Tenant’s obligations when Tenant has failed to do so after giving Tenant
reasonable written notice of its intent to do so; and (vi) posting notices of
non-responsibility. Additionally, Landlord shall have the right to enter the
Leased Premises at times of emergency. Any entry into the Leased Premises or
portions thereof obtained by Landlord in accordance with this Paragraph shall
not under any circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Leased Premises, or an eviction, actual or
constructive, of Tenant from the Leased Premises or any portion thereof.

 

4.10 CONTROL OF COMMON AREAS: Landlord shall at all times have exclusive control
of the Common Areas. Landlord shall have the right, without the same
constituting an actual or constructive eviction and without entitling Tenant to
any reduction in or abatement of rent, to: (i) temporarily closed any part of
the Common Areas to whatever extent required in the opinion of Landlord’s
counsel to prevent a dedication thereof or the accrual of any prescriptive
rights therein: (ii) temporarily close all or any part of the Common Areas to
perform maintenance or for any other reason deemed sufficient by Landlord;
(iii) change the shape, size, location, number and extent of improvements within
the Common Areas including, without limitation, changing the location of
driveways, entrances, exits, parking spaces, parking areas, sidewalks,
directional or locator signs, or the direction of the flow of traffic; and
(iv) to make additions to the Common Areas including, without limitation, the
construction of parking structures. Landlord shall have the right to change the
name or address of the Building. Tenant in its use of the Common Areas, shall
keep the Common Areas free and clear of all obstructions created or permitted by
Tenant. If, in the opinion of Landlord, unauthorized persons are using any of
the Common Areas by reason of, or under claim of, the express or implied
authority or consent of Tenant, then Tenant, upon demand of Landlord, shall
restrain, to the fullest extent then allowed by Law, such unauthorized use, and
shall initiate such appropriate proceedings as may be required to so restrain
such use. Nothing contained herein shall affect the right of Landlord at any
time to remove any unauthorized person from the Common Areas or to prohibit the
use of the Common Areas by unauthorized persons, including without limitation,
the right to prohibit mobile food and beverage vendors. In exercising any such
right regarding the Common Areas, Landlord shall make a reasonable effort to
minimize any disruption to Tenant’s business.

 

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4.11 RULES AND REGULATIONS: Landlord shall have the right from time to time to
establish reasonable rules and regulations and/or amendments or additions
thereto respecting the use within the Project and the use of the Common Areas
for the care and orderly management of the Project and the safety of its
tenants, occupants and invitees. Upon delivery to Tenant of a copy of such rules
and regulations or any amendments or additions thereto, Tenant shall comply with
such rules and regulations. A violation by Tenant of any of such rules and
regulations shall constitute a default by Tenant under this Lease. If there is a
conflict between the rules and regulations and any of the provisions of this
Lease, the provisions of this Lease shall prevail. Landlord shall not be
responsible or liable to Tenant for the violation of such rules and regulations
by any other tenant of the Project.

 

4.12 ENVIRONMENTAL PROTECTION: Landlord may voluntarily cooperate in a
reasonable manner with the efforts of all governmental agencies in reducing
actual or potential environmental damage. Tenant shall not be entitled to
terminate this Lease or to any reduction or abatement of rent by reason of such
compliance or cooperation. Tenant agrees at all times to cooperate fully with
Landlord and to abide by all rules and regulations and requirements which
Landlord may reasonably prescribe in order to comply with the requirements and
recommendations of governmental agencies regulating, or otherwise involved in,
the protection of the environment.

ARTICLE 5

REPAIRS, MAINTENANCE, SERVICES AND UTILITIES

 

5.1 REPAIRS AND MAINTENANCE: Except in the case of damage to or destruction of
the Leased Premises, the Building or the Project caused by an Act of God or
other peril, in which case the provisions of Article 10 shall control, the
parties shall have the following obligations and responsibilities with respect
to the repair and maintenance of the Leased Premises, the Building and the
Common Areas.

 

  A. Tenant’s Obligation: Tenant shall, at all times during the Leased Term and
at its sole cost and expense, regularly clean and continuously keep and maintain
in good order, condition and repair the Leased Premises and every part thereof
and all appurtenances thereto, including, without limiting the generality of the
foregoing, (i) all interior walls, floors and ceilings, (ii) all windows, doors
and skylights, (iii) all electrical wiring, conduits, connectors and fixtures,
(iv) all plumbing, pipes, sinks, toilets, faucets and drains, (v) all lighting
fixtures, bulbs and lamps, (vi) all heating, ventilating and air conditioning
equipment located within the Leased Premises or located outside the Leased
Premises (e.g. rooftop compressors) and serving the Leased Premises (other tan
Common HVAC as defined in Subparagraph B below), and all entranceways to the
Leased Premises. Tenant, if requested to do so by Landlord, shall have at
Tenant’s sole cost and expense, a licensed heating, ventilating and air
conditioning contractor to regularly and periodically inspect (not less
frequently than every three months) and perform required maintenance on the
heating, ventilating and air conditioning equipment and systems serving the
Leased Premises, or alternately, Landlord may so contract in its own name for
such regular and periodic inspections of and maintenance on such heating,
ventilating and air conditioning equipment and systems and charge to Tenant, as
Additional Rent, the cost thereof. Tenant shall, at its sole cost and expense,
repair all damage to the Building, the Common Areas or the Project caused by the
activities of Tenant, its employees, invitees or contractors promptly following
written notice from Landlord to so repair such damage. If Tenant shall fail to
perform the required maintenance or fail to make repairs required of it pursuant
to Paragraph within a reasonable period of time following notice from Landlord
to do so, then Landlord may, at its election and without waiving any other
remedy it may otherwise have under this Lease or at Law, perform such
maintenance or make such repairs and charge to Tenant, as Additional Rent, the
costs so incurred by Landlord for same. All glass within or a part of the Leased
Premises, both interior and exterior, is at the sole risk of Tenant and any
broken glass shall promptly be replaced by Tenant at Tenant’s expense with glass
of the same kind, size and quality.

 

  10   Initial                                              

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  B. Landlord’s Obligation: Landlord shall, at all times during the Lease Term,
maintain in good condition and repair; (i) the exterior and structural parts of
the Building (including the foundation, sub-flooring, load- bearing and exterior
walls, and roof); (ii) the Common Areas; and (iii) the electrical and plumbing
systems located outside the Leased Premises which service the Building.
Additionally, to the extent that the Building contains central heating,
ventilating and or air conditioning systems located outside the Leased Premises
and designed to service, and then servicing, more than a single tenant within
the Building, (“Common HVAC”), Landlord shall maintain in good operating
condition and repair such Common HVAC equipment and systems.

 

5.2 SERVICES AND UTILITIES: The parties shall have the following
responsibilities and obligations with respect to obtaining and paying the cost
of providing the following utilities and other services to the Leased Premises.

 

  A. Gas and Electric: Tenant shall arrange, at its sole expense and in its own
name, for the supply of gas and electricity to the Leased Premises. In the event
that such services are not separately metered, Tenant shall, at its sole
expense, cause such meters to be installed. Tenant shall be responsible for
determining if the local supplier of gas and/or electricity can supply the needs
of Tenant and whether or not the existing gas and/or electrical distribution
systems within the Building and the Leased Premises are adequate for Tenant’s
needs. Tenant shall pay all charges for gas and electricity as so supplied to
the Leased Premises.

 

  B. Water: Tenant shall arrange, at its sole expense and in its own name, for
the supply of water to the Leased Premises.

 

  C. Security Services: Tenant acknowledges that Landlord is not responsible for
the security of the Leased Premises or the protection of Tenant’s property or
Tenant’s employees, invitees or contractors, and that to the extent Tenant
determines that such security or protection services are advisable or necessary,
Tenant shall arrange for an pay the costs of providing same.

 

  D. Trash Disposal: Landlord will provide one trash bin or each building within
the Project for use by the tenants of such building for disposal of general
office waste only and for no other purpose. In no event shall Tenant use the
trash bins provided by Landlord for disposal of any of its industrial waste,
garbage or trash, and in no event shall Landlord be required to provide extra
bins for such purpose to because other tenants of the Building or the Project
are using such bins for such purpose.

 

5.3 ENERGY AND RESOURCE CONSUMPTION: Landlord may voluntarily cooperate in a
reasonable manner with the efforts to governmental agencies and/or utility
suppliers in reducing energy or other resource consumption within the Project.
Tenant shall not be entitled to terminate this Lease or to any reduction in or
abatement of rent by reason of such compliance or cooperation. Tenant agrees at
all times to cooperate fully with Landlord and to abide by all reasonable rules
established by Landlord (i) in order to maximize the efficient operation of the
electrical, heating, ventilating and air conditioning systems and all other
energy or other resource consumption systems within the Project and/or (ii) in
order to comply with the requirements and recommendations of utility suppliers
and governmental agencies regulating the consumption of energy and/or other
resources.

 

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5.4 LIMITATION OF LANDLORD’S LIABILITY: Landlord shall not be liable to Tenant
for injury to Tenant, its employees, agents, invitees or contractors, damage to
Tenant’s property or loss of Tenant’s business or profits, nor shall Tenant be
entitled to terminate this Lease or to any reduction in or abatement of rent by
reason of (i) Landlord’s failure to perform any maintenance or repairs to the
Project until Tenant shall have first notified Landlord, in writing, of the need
for such maintenance or repairs, and then only after Landlord shall have had a
reasonable period of time following its receipt of such notice within which to
perform such maintenance or repairs, or (ii) any failure, interruption,
rationing or other curtailment in the supply of water, electric current, gas or
other utility service to the Leased Premises, the Building or the Project from
whatever cause (other than Landlord’s gross negligence or willful misconduct),
or (iii) the unauthorized intrusion or entry into the Leased Premises by third
parties (other than Landlord).

ARTICLE 6

ALTERATIONS AND IMPROVEMENTS

 

6.1 BY TENANT: Tenant shall not make any alterations to or modifications of the
Leased Premises or construct any improvements to or within the Leased Premises
without Landlord’s prior written approval, and then not until Landlord shall
have first approved, in writing, the plans and specifications therefore, which
approval shall not be unreasonably withheld. All such modifications, alterations
or improvements, once so approved, shall be made, constructed or installed by
Tenant at Tenant’s expense, using a licensed contractor first approved by
Landlord, in substantial compliance with the Landlord-approved plans and
specifications therefore. All work undertaken by Tenant shall be done in
accordance with all Laws and in good and workmanlike manner using new materials
of good quality. Tenant shall not commence the making of any such modifications
or alterations or the construction of any such improvements until (i) all
required governmental approvals and permits shall have been obtained, (ii) all
requirements regarding insurance imposed by this Lease have been satisfied,
(iii) Tenant shall have given Landlord at least five business days prior to
written notice of its intention to commence such work so that Landlord may post
and file notices of non-responsibility, and (iv) if requested by Landlord,
Tenant shall have obtained contingent liability and broad form builder’s risk
insurance in an amount satisfactory to Landlord to cover any perils relating the
proposed work not covered by insurance carried by Tenant pursuant to Article 9.
In no event shall Tenant make any modifications, alterations or improvements to
the Common Areas or any areas outside the Leased Premises. As used in the
Article, the term “modifications”, alterations and/or improvements” shall
include, without limitation, the installation of additional electrical outlets,
overhead lighting fixtures, drains, sinks, partitions, doorways, or the like.

 

6.2 OWNERSHIP OF IMPROVEMENTS: All modifications, alternations and improvements
made or added to the Leased Premises by Tenant (other than Tenant’s inventory,
equipment, movable furniture, wall decorations and trade fixtures) shall be
deemed real property and a part of the Leased Premises, but shall remain the
property of Tenant during the Lease Term. Any such modifications, alterations or
improvements, once completed, shall not be altered or removed from the Leased
Premises during the Lease Term without Landlord’s written approval first
obtained in accordance with the provisions of Paragraph 6.1 above. At the
expiration or sooner termination of this Lease, all such modifications,
alterations and improvements (other than Tenant’s inventory, equipment, movable
furniture, wall decorations and trade fixtures) shall automatically become the
property of the Landlord and shall be surrendered to Landlord as part of the
Leased Premises as required pursuant to Article unless Landlord shall require
Tenant to remove any of such modifications, alterations or improvements in
accordance with the Provision of Article 2, in which case Tenant shall so remove
same. Landlord shall have no obligation to reimburse to Tenant all or any
portion of the cost or value of any such modifications, alterations or
improvements so surrendered to Landlord. All modifications, alterations or
improvements which are installed or constructed on or attached to the Leased
Premises by Landlord at Landlord’s expense shall be deemed real property and a
part of the Leased Premises and shall be the property of Landlord. All lighting,
plumbing, electrical, heating, ventilating and air conditioning fixtures,
partitioning, window coverings, wall coverings and floor coverings installed by
Tenant shall be deemed improvements to the Leased Premises and not trade
fixtures of Tenant.

 

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6.3 ALTERATIONS REQUIRED BY LAW: Tenant shall make all modifications,
alterations, and improvements to the Leased Premises, at its sole cost, that are
required by Law because of (i) Tenant’s use or occupancy of the Leased Premises,
(ii) Tenant’s application for any permit or governmental approval, or
(iii) Tenant’s making of any modifications, alterations, or improvements to or
within the Leased Premises.

 

6.4 LIENS: Tenant shall keep the Leased Premises, the Building and the Project
free from any liens and shall pay value due all bills arising out of any work
performed, materials furnished, or obligations incurred by Tenant, its agents,
employees or contractors related to the Leased Premises. if any such claim of
lien is recorded against Tenant’s interest in this Lease, the Leased Premises,
the Building or the Project, Tenant shall bond against, discharge or otherwise
cause such lien to be entirely released within ten days after the same has been
so recorded.

ARTICLE 7

ASSIGNMENT AND SUBLETTING BY TENANT

 

7.1 BY TENANT: Tenant shall neither assign this Lease nor sublet the Lease
Premises without obtaining the written consent of the Landlord to do so,
however, that Landlord shall not arbitrarily or unreasonably refuse to grant
consent to such assignment or subletting, and provided further that a consent to
one assignment or subletting by Landlord shall not be deemed a consent to any
subsequent assignment or subletting. Any assignment or subletting without the
consent of the Landlord shall be void and shall, at the option of the Landlord,
terminate this Lease. The acceptance of rent by Landlord from any person or
entity other than the Tenant, or the acceptance of rent by Landlord from Tenant
with knowledge of a violation of the provisions of this paragraph, shall not be
deemed a waiver by Landlord of any provision of this Article or this Lease or to
be a consent to any assignment or subletting by Tenant.

 

7.2 MERGER OR REORGANIZATION: If Tenant is a corporation, any dissolution,
merger, consolidation or other reorganization of Tenant, or the sale or other
transfer in the aggregate over the Lease Term of a controlling percentage of the
capital stock of Tenant shall not be deemed a voluntary assignment of Tenant’s
interest in this Lease. However, should Tenant dissolve, merge, consolidate, or
otherwise reorganize, Tenant shall notify Landlord in writing of the proposed
change in its status fifteen (15) days prior to the effective date of such
dissolution or reorganization.

 

7.3 LANDLORD’S CONSENT: If Tenant shall desire to assign its interest under this
Lease or to sublet the Leased Premises, Tenant must first notify Landlord, in
writing, of its intent to so assign or sublet, specifying in detail the terms of
such assignment or subletting, including, by way of illustration but not of
limitation, the name of the proposed assignee or sublessee, the proposed
assignee’s sublessee’s intended use of the leased premises, a current financial
statement of such proposed assignee or sublessee, and the form of documents to
be used in effectuating such assignment or subletting. Land lord shall have a
period of fifteen (15) days following receipt of such notice to either
(i) consent to such assignment or subletting, or (ii) refuse to consent to such
requested assignment or subletting, provided that such consent shall not be
unreasonably or arbitrarily refused. During said fifteen (15) day period, Tenant
covenants and agrees to supply Landlord, upon request, all necessary or relevant
information which Landlord may reasonably request respecting such proposed
assignment or subletting and/or the proposed assignee or sublessee.

 

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7.4 CONDITIONS TO LANDLORD’S CONSENT: If Landlord elects to consent to such
requested assignment or subletting, such consent shall be expressly conditioned
upon the occurrence of each of the conditions set forth below. Any purported
assignment or subletting made prior to the full and complete satisfaction of
each of the following conditions shall be void and shall, at the option of
Landlord, constitute a material default of this Lease permitting Landlord to
terminate this Lease unless such default is cured by Tenant satisfying each
condition within five (5) days of receipt of written notice of the default. The
conditions are as follows:

 

  A. Landlord having approved in form and substance the assignment or sublease
agreement, which approval shall not be unreasonably withheld.

 

  B. Each such sublessee or assignee having agreed in writing satisfactory to
Landlord to assume, to be bound by, and to perform the obligations of this Lease
to be performed by Tenant.

 

  C. Tenant having delivered to Landlord a complete and fully executed duplicate
original of each sublease agreement or assignment agreement.

 

  D. Tenant and Tenant’s sublessee shall have entered into a written agreement
with and for the benefit of Landlord satisfactory to Landlord whereby Tenant and
Tenant’s sublessee jointly agree to pay to Landlord one hundred percent of all
excess rentals to be paid by such sublessee as and when such excess rentals are
so paid.

 

7.5 EXCESS RENTALS DEFINED: The term “excess rentals” shall mean all
consideration to be paid by the sublessee to Tenant or to any other on Tenant’s
behalf or for Tenant’s benefit for the sublease of the Leased Premises in excess
of the rent due Landlord under the terms of this Lease for the same period, less
any commissions paid by Tenant to a licensed real estate broker for arranging
such sublease. Tenant agrees that the portion of any excess rentals arising from
any subletting by Tenant, which is to be paid to Landlord pursuant to this
Article, now, is and shall then be the property of Landlord and not the property
of Tenant.

 

7.6 EFFECT OF LANDLORD’S CONSENT: No assignment or subletting, even with the
consent of Landlord, shall relieve Tenant of it’s primary obligation to pay rent
and to perform all of the other obligations to be performed by Tenant hereunder.
Consent by Landlord to one or more assignments or sublettings by Tenant shall
not be deemed to be consent to any subsequent assignment or subletting.

 

7.7 GOOD FAITH: The rights granted to Tenant by this Article are granted in
consideration of Tenant’s express covenant that all pertinent allocations which
are made by Tenant between the value of this Lease and the value of any of
Tenant’s personal property which may be conveyed or leased generally
concurrently with and which may reasonably be considered a part of the same
transaction as the permitted assignment or subletting shall be made fairly,
honestly and in good faith. If Tenant shall breach this Covenant of Good Faith,
Landlord may immediately declare Tenant to be in default under the terms of this
Lease and terminate this Lease and/or exercise any other rights and remedies
Landlord would have under the terms of this Lease in the case of a material
default by Tenant under this Lease.

 

7.8 EFFECT OF LANDLORD’S CONSENT: No subletting, assignment or encumbrance, even
with the consent of Landlord shall relieve Tenant of its personal and primary
obligation to pay rent and to perform all of the other obligations to be
performed by Tenant hereunder. Consent by Landlord to one or more assignments or
encumbrances of Tenant’s interest in this Lease or to one or more subletting of
the Leased Premises shall not be deemed to be a consent to any subsequent
assignment, encumbrance or subletting. If Landlord shall have been ordered by a
court of competent jurisdiction to consent to a requested assignment or
subletting, or such an assignment or subletting shall have been ordered over the
objection of Landlord, such assignment or subletting shall not be binding
between the assignee (or sub-lessee) and Landlord until such a time as all
conditions set forth in Paragraph 7.4 above have been fully satisfied (to the
extent not then satisfied) by the assignee or sub-lessee, including, without
limitation, the payment to Landlord of all agreed assignment considerations
and/or excess rentals then due Landlord.

 

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ARTICLE 8

LIMITATION ON LANDLORD’S LIABILITY AND INDEMNITY

 

8.1 LIMITATION ON LANDLORD’S LIABILITY AND RELEASE: Landlord shall not be liable
to Tenant for, and Tenant hereby releases Landlord and its partners and officers
from, any and all liability, whether in contract, tort or any other basis, for
any injury to or any damage sustained by Tenant, its agents, employees,
contractors or invitees; any damage to Tenant’s property; or any loss to
Tenant’s business, loss of Tenant’s profits or other financial loss of Tenant
resulting from or attributable to the condition of, the management of, the
maintenance of, or the protection of the Leased Premises, the Building, the
Project or the Common Areas, including, without limitation, any such injury,
damage or loss resulting from (i) the failure, interruption, rationing or other
curtailment or cessation in the supply of electricity, water, gas or other
utility service to the Project, the Building or the Leased Premises; (ii) the
vandalism or forcible entry into the Building or the Leased Premises; (iii) the
penetration of water into or onto any portion of the Leased Premises through
roof leaks or otherwise; (iv) the failure to provide security and/or adequate
lighting in or about the Project, the Building or the Leased Premises; (v) the
existence of any design or construction defects within the Project, the Building
or the Leased Premises; (vi) the failure of any mechanical systems to function
properly (such as the HVAC systems); or (vii) the blockage of access to any
portion of the Project, the Building or the Leased Premises, except to the
extent such damage was proximately caused by Landlord’s active negligence,
willful misconduct, or Landlord’s failure to perform an obligation expressly
undertaken pursuant to this Lease but only if Tenant shall have given Landlord
prior written notice to perform such obligation and Landlord shall have failed
to perform such obligation within a reasonable period of time following receipt
of written notice from Tenant to so perform such obligation. In this regard,
Tenant acknowledges that it is fully apprised of the provisions of Law relating
to releases, and particularly to those provisions contained in Section 1542 of
the California Civil Code, which read as follows:

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”

Notwithstanding such statutory provision, and for the purpose of implementing a
full and complete release and discharge, Tenant hereby (i) waives the benefit of
such statutory provision and (ii) acknowledges that, subject to the exceptions
specifically set forth herein, the release and discharge set forth in this
Paragraph is a full and complete settlement and release and discharge of all
claims and is intended to include in its effect, without limitation, all claims
which Tenant, as of the date hereof, does not know of our suspect to exist in
its favor.

 

8.2 TENANT’S INDEMNIFICATION OF LANDLORD: Tenant shall defend, with counsel
satisfactory to Landlord, any claims made or legal actions filed or threatened
by third parties against Landlord with respect to the death, bodily injury,
personal injury, damage to property or interference with contractual or property
rights suffered by any third party (including other tenants within the Project)
which (i) occurred within the Leased Premises or (ii) resulted from Tenant’s use
or occupancy of the Leased Premises or the Common Areas or (iii) resulted from
Tenant’s activities in or about the Leased Premises, the Building or the
Project, and Tenant shall indemnify and hold Landlord, Landlord’s principals,
employees and agents harmless from any loss, including loss of rents by reason
of vacant space which otherwise would have been leased but for such activities,
liability, penalties, or expense whatsoever (including any legal fees incurred
by Landlord with respect to defending such claims) resulting therefrom, except
to the extent proximately caused by the active negligence or willful misconduct
of Landlord. This indemnity agreement shall survive until the latter to occur of
(i) the date of the expiration, or sooner termination, of this Lease, or
(ii) the date Tenant actually vacates the Leased Premises. Notwithstanding the
foregoing, Tenant shall be under no duty to indemnify and hold Landlord
harmless, nor defend Landlord, against any liability, claims, or damages arising
because of Landlord’s failure to make any repairs required by this Lease or to
take any action required by this Lease or to take any action required of
Landlord by this Lease, provided that the Landlord has been properly notified by
Tenant of the required repair or action. The term “properly notified” shall mean
notice as prescribed in Paragraph 13.10 of this Lease.

 

  15   Initial                                              

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ARTICLE 9

INSURANCE

 

9.1 TENANT’S INSURANCE: Tenant shall maintain insurance complying with all of
the following:

 

  A. Tenant shall procure pay for and keep in full force and effect, at all
times during the Lease Term, the following:

 

  (1) Comprehensive general liability insurance insuring Tenant against
liability for personal injury, bodily injury, death and damage to property
occurring within the Leased Premises, or resulting from Tenant’s use or
occupancy of the Leased Premises or the Common Areas, or resulting from Tenant’s
activities in or about the Leased Premises, with combined single limit coverage
of not less than the amount of Tenant’s Required Liability Coverage (as set
forth in Article 1), which insurance shall contain a “broad form liability”
endorsement insuring Tenant’s performance of Tenant’s obligation to indemnify
Landlord as contained in Article 8.2.

 

  (2) Fire and property damage insurance in so-called “fire and extended
coverage” form insuring Tenant against loss from physical damage to Tenant’s
personal property, inventory, trade fixtures and improvements within the Leased
Premises with coverage for the full actual replacement cost thereof:

 

  (3) Pressure vessel insurance, if applicable;

 

  (4) Product liability insurance (including, without limitation, if food and/or
beverages are distributed, sold and/or consumed within the Leased Premises, to
the extent obtainable, coverage for liability arising out of the distribution,
sale or consumption of food and/or beverages (including alcoholic beverages, if
applicable) at the Leased Premises) for not less than Tenant’s Required
Liability Coverage (as set forth in Article 1);

 

  (5) Workers’ compensation insurance and any other employee benefit insurance
sufficient to comply with all Laws; and

 

  (6) With respect to making of alterations or the construction of improvements
or the like undertaken by Tenant, contingent liability and builder’s risk
insurance, in an amount and with coverage satisfactory to Landlord.

 

  B. Each policy of liability insurance required to be carried by Tenant
pursuant to this Paragraph or actually carried by Tenant with respect to the
Leased Premises (i) shall, except with respect to insurance required by
Subparagraph A (6) above, name Landlord, and such others as are designated by
Landlord, as additional insured; (ii) shall be primary insurance providing that
the insurer shall be liable for the full amount of the loss, up to and including
the total amount of liability set forth in the declaration of coverage, without
the right of contribution from or prior payment by any other insurance coverage
of Landlord; (iii) shall be in a form satisfactory to Landlord; (iv) shall be
carried with companies reasonably acceptable to Landlord; (v) shall provide that
such policy shall not be subject to cancellation, lapse or change except after
at least thirty days prior written notice to Landlord; and (vi) shall contain a
so-called “severability” or “cross liability” endorsement. Each policy of
property insurance maintained by tenant with respect to the Leased Premises or
any property therein (i) shall provide that such policy shall not be subject to
cancellation, lapse or change except after at least thirty days prior written
notice to Landlord and (ii) shall contain a waiver and/or a permission to waive
by the insurer of any right of subrogation against Landlord, its principals,
employees, agents and contractors, which might arise by reason of any payment
under such policy or by reason of any act or omission of Landlord, its
principals, employees, agents or contractors.

 

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  C. Prior to the time Tenant or any of its contractors enters the Leased
Premises, Tenant shall deliver to the Landlord, with respect to each policy of
insurance required to be carried by Tenant pursuant to this Article, a copy of
such policy (appropriately authenticated by the insurer as having been issued,
premium paid, providing the coverage required by this Paragraph and containing
the provisions specified herein. With respect to each renewal or replacement of
any such insurance, the requirements of this Paragraph must be complied with not
less than thirty days prior to the expiration or cancellation of the policy
being renewed or replaced. Landlord may, at any time and from time to time,
inspect and/or copy any and all insurance policies required to be carried by
Tenant pursuant to this Article. If Landlord’s Lender, insurance broker or
advisor or counsel reasonably determines at any time that the amount of coverage
set forth in Paragraph 9.1A for any policy of insurance Tenant is required to
carry pursuant to this Article is not adequate, then Tenant shall increase the
amount of coverage for such insurance to such greater amount as Landlord’s
Lender, insurance broker or advisor or counsel reasonably deems adequate;
provided, however, such increased level of coverage may not exceed the level of
coverage for such insurance commonly carried by comparable businesses similarly
situated and operating under similar circumstances.

 

9.2 LANDLORD’S INSURANCE: With respect to insurance maintained by Landlord:

 

  A. Landlord shall maintain, as the minimum coverage required of it by this
Lease, fire and property damage insurance in so-called “fire and extended
coverage” form insuring Landlord (and such others as Landlord may designate)
against loss from physical damage to the Building with coverage of not less than
ninety percent of the full actual replacement cost thereof and against loss of
rents for a period of not less than six months. Such fire and property damage
insurance, at Landlord’s election but without any requirement on Landlord’s
behalf to do so, (i) may be written in so-called “all risk” form, excluding only
those perils commonly excluded from such coverage by Landlord’s then property
damage insurer; (ii) may provide coverage for physical damage to the
improvements so insured for up to the entire full actual replacement cost
thereof; (iii) may be endorsed to cover loss or damage caused by any additional
perils against which Landlord may elect to insure, including earthquake and/or
flood; (iv) may provide coverage for loss of rents for a period of up to twelve
months; and (v) may contain “deductibles” not exceeding One Thousand Dollars per
occurrence (or up to five percent of the Building’s replacement value in the
case of earthquake and/or flood insurance). Landlord shall not be required to
cause such insurance to cover any of Tenant’s personal property, inventory and
trade fixtures, or any modifications, alterations or improvements made or
constructed by Tenant to or within the Leased Premises.

 

  B. Landlord shall maintain comprehensive general liability insurance insuring
Landlord (and such others as are designated by Landlord) against liability for
personal injury, bodily injury, death, and damage to property occurring in, on
or about, or resulting from the use or occupancy of the Project, or any portion
thereof, with combined single limit coverage of at least Two Million Dollars.
Landlord may carry such greater coverage as Landlord or Landlord’s Lender,
insurance broker or advisor or counsel may from time to time determine is
reasonably necessary for the adequate protection of Landlord and the Project.

 

  C. Landlord may maintain any other insurance, which in the opinion of its
insurance broker or advisor or legal counsel is prudent to carry under the given
circumstances.

 

9.3 MUTUAL WAIVER OF SUBROGATION: Landlord hereby releases Tenant, and Tenant
hereby releases Landlord and its respective partners and officers, agents,
employees and servants, from any and all liability for loss, damage or injury to
the property of the other in or about the Leased Premises which is caused by or
results from a peril or event or happening which would be covered by insurance
required to be carried under the terms of this Lease, or is covered by insurance
actually carried and in force at the time of the loss, by the party sustaining
such loss; however, that such waiver shall be effective only to the extent
permitted by the insurance covering such loss and to the extent such insurance
is not prejudiced thereby.

 

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ARTICLE 10

DAMAGE TO LEASED PREMISES

 

10.1 LANDLORD’S DUTY TO RESTORE: If the Leased Premises are damaged by any peril
after the Effective Date of this Lease, Landlord shall restore the Leased
Premises, as and when required by this Paragraph, unless this Lease is
terminated by Landlord pursuant to Paragraph 10.2 or by Tenant pursuant to
Paragraph 10.3. All insurance proceeds available from the fire and property
damage insurance carried by Landlord shall be paid to and become the property of
Landlord. If this Lease is terminated pursuant to either Paragraph 10.2 or 10.3,
all insurance proceeds available from insurance carried by Tenant which cover
loss to property that is Landlord’s property or would become Landlord’s property
on termination of this Lease shall be paid to and become the property of
Landlord, and the remainder of such proceeds shall be paid to and become the
property of Tenant. If this Lease is not terminated pursuant to either Paragraph
10.2 or 10.3, all insurance proceeds available from insurance carried by Tenant
which cover loss to property that is Landlord’s property shall be paid to and
become property of Landlord, and all proceeds available which cover loss to
property which would become the property of Landlord upon the termination of
this Lease shall be paid to and remain the property of Tenant. If this Lease is
not so terminated, then upon receipt of the insurance proceeds (if the loss is
covered by insurance) and the issuance of all necessary governmental permits,
Landlord shall commence and diligently prosecute to completion the restoration
of the Leased Premises, to the extent then allowed by Law, to substantially the
same condition in which the Leased Premises existed as of the Lease Commencement
Date. Landlord’s obligation to restore shall be limited to the Leased Premises
and interior improvements constructed by Landlord. Landlord shall have no
obligation to restore any other improvements to the Leased Premises or any of
Tenant’s personal property, inventory, trade fixtures, and other improvements
constructed by Tenant to like or similar condition as existed at the time of
such damage or destruction.

 

10.2 LANDLORD’S RIGHT TO TERMINATE: Landlord shall have the option to terminate
this Lease in the event any of the following occurs, which option may be
exercised only by delivery to Tenant of a written notice of election to
terminate within thirty days after the date of such damage or destruction:

 

  A. The Building is damaged by any peril covered by valid collectible insurance
actually carried by Landlord and in force at the time of such damage or
destruction (an “insured peril”) to such an extent that the estimated cost to
restore the Building exceeds the lesser of (i) the insurance proceeds available
from insurance actually carried by Landlord, or (ii) seventy-five percent of the
then actual replacement cost thereof:

 

  B. The Building is damaged by an uninsured peril, which peril Landlord was
required to insure against pursuant to the provisions of Article 9 of this
Lease, to such an extent that the estimated cost to restore the Building exceeds
the lesser of (i) the insurance proceeds which would have been available had
Landlord carried such required insurance, or (ii) seventy-five percent of the
then actual replacement cost thereof;

 

  C. The Building is damaged by an uninsured peril, which peril Landlord was not
required to insure against pursuant to the provisions of Article 9 of this
Lease, to any extent.

 

  D. The Building is damaged by any peril and, because of the Laws then in
force, (i) may not be restored at reasonable cost as required by Paragraph 10.1
above, or (ii) may not be used for the same use being made thereof before such
damage, whether or not restored as required by this Article.

 

10.3 TENANT’S RIGHT TO TERMINATE: If the Leased Premises are damaged by any
peril and Landlord does not elect to terminate this Lease or is not entitled to
terminate this Lease pursuant to this Article, then as soon as reasonably
practicable, Landlord shall furnish Tenant with the written opinion of
Landlord’s architect or construction consultant as to when the restoration work
required of Landlord may be complete. Tenant shall have the option to terminate
this Lease in the event any of the following occurs, which option may be
exercised in the case of A or B below only by delivery to Landlord of a written
notice of election to terminate within seven days after Tenant receives from
Landlord the estimate of the time needed to complete such restoration:

 

  A. The Leased Premises are damaged by any peril and, in the reasonable opinion
of Landlord’s architect or construction consultant, the restoration of the
Leases Premises cannot be substantially completed within nine months after the
date of such damage; or

 

  B. The Leased Premises are damaged by any peril within nine months of the last
day of the Lease Term and, in the reasonable opinion of Landlord’s architect or
construction consultant, the restoration of the Leased Premises cannot be
substantially completed within ninety days after the date such restoration is
commenced; or

 

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  C. Landlord does not complete the restoration of the Leased Premises within
nine months from the date of the damage, provided that such nine-month period of
time shall be extended for such number of days as Landlord may be delayed by
reason of Force Majeure.

 

10.4 TENANT’S WAIVER: Landlord and Tenant agree that the provisions of Paragraph
10.3 above, captioned “Tenant’s Right to Terminate”, are intended to supersede
and replace the provisions contained in California Civil Code, Section 1932,
Subdivision 2, and California Civil Code Section 1934, and accordingly, Tenant
hereby waives the provisions of said Civil Code Sections and the provisions of
any successor Code Sections or similar Laws hereinafter enacted.

 

10.5 ABATEMENT OF RENT: In the event of damage to the Leased Premises, which
does not result in the termination of this Lease, the Base Monthly Rent (and any
Additional Rent) shall be temporarily abated during the period of restoration in
proportion to the degree to which Tenant’s use of the Leased Premises is
impaired by such damage.

ARTICLE 11

CONDEMNATION

 

11.1 LANDLORD’S RIGHT TO TERMINATE: Subject to Paragraph 11.3, Landlord shall
have the option to terminate this Lease if, as a result of a taking by means of
the exercise of the power of eminent domain (including inverse condemnation
and/or voluntary sale or transfer by Landlord to an entity having the power of
eminent domain under threat of condemnation), (i) all or any part of the Leased
Premises is so taken, (ii) more than thirty-three and one-third percent of the
Building’s leasable area is so taken, (iii) more than thirty-three and one-third
percent of the Common Area is so taken, or (iv) because of the Laws then in
force, the Leased Premises may not be used for the same use being made thereof
before such taking, whether or not restored as required by Paragraph 11.4 below.
Any such option to terminate by Landlord must be exercisable within a reasonable
period of time; to be effective as of the date of possession is taken by the
condemner.

 

11.2 TENANT’S RIGHT TO TERMINATE: Subject to Paragraph 11.3, Tenant shall have
the option to terminate this Lease, if, as a result of any taking by means of
the exercise of the power of eminent domain (including inverse condemnation
and/or a voluntary sale or transfer by Landlord to an entity having the power of
eminent domain under threat of condemnation), (i) all of the Leased Premises is
so taken, (ii) thirty-three and one-third percent or more of the Leased Premises
is so taken and the part of the Leased Premises that remains cannot, within a
reasonable period of time, be made reasonably suitable for the continued
operation of the Tenant’s business, or (iii) there is a taking of a portion of
the Common Area and, as a result of such taking, Landlord cannot provide parking
spaces within the Project (or within a reasonable distance therefrom) equal in
number to at least sixty-six and two-thirds percent of Tenant’s Number of
Parking Spaces (as set forth in Article 1), whether by rearrangement of the
remaining parking areas in the Common Area (including, if Landlord elects,
construction of multi-deck parking structures or re-striping for compact cars
where permitted by Law), or by providing alternative parking facilities on other
land within reasonable walking distance of the Leased Premises. Tenant must
exercise such option within a reasonable period of time, to be effective on the
later to occur of (i) the date that possession of that portion of the Common
Area or the Leased Premises that is condemned is taken by condemner or (ii) the
date Tenant vacates the Leased Premises.

 

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11.3 TEMPORARY TAKING: If any portion of the Leased Premises is temporarily
taken for one year or less, this Lease shall remain in effect. If any portion of
the Leased Premises is temporarily taken for a period which either exceeds one
year or which extends beyond the natural expiration of the Lease Term, then
Landlord and Tenant shall each independently have the option to terminate this
Lease, effective on the date possession is taken by the condemner.

 

11.4 RESTORATION AND ABATEMENT OF RENT: If any part of the Leased Premises is
taken by condemnation and this Lease is not terminated, then Landlord shall
repair any damage occasioned thereby to the remainder of the Leased Premises to
a condition reasonably suitable for Tenant’s continued operations and otherwise,
to the extent practicable, in the manner and to the extent provided in Paragraph
10.1. As of the date possession is taken by the condemning authority, (i) the
Base Monthly Rent shall be reduced in the same proportion that the area of that
part of the Leased Premises so taken (less any addition to the area of the
Leased Premises by reason of any reconstruction) bears to the area of the Leased
Premises immediately prior to such taking, and (ii) Tenant’s Proportionate Share
shall be appropriately adjusted.

 

11.5 DIVISION OF CONDEMNATION AWARD: Any award made for any condemnation of the
Project, the Building, the Common Areas or the Leased Premises, or any portion
thereof, shall belong to and be paid to Landlord, and Tenant hereby assigns to
Landlord all of its right, title and interest in any such award; provided,
however, that Tenant shall be entitled to receive any condemnation award that is
made directly to Tenant (i) for the taking of personal property, inventory or
trade fixtures belonging to Tenant (ii) for the interruption of Tenant’s
business or its moving costs, (iii) for loss of Tenant’s goodwill, or (iv) for
any temporary taking where this Lease is not terminated as a result of such
taking. The rights of Landlord and Tenant regarding any condemnation shall be
determined as provided in this Article, and each party hereby waives the
provisions of Section 1265.130 of the California Code of Civil Procedure, and
the provisions of any similar law hereinafter enacted, allowing either party to
petition the Superior Court to terminate this Lease and/or allocating
condemnation awards between Landlord and Tenant in the event of a taking of the
Leased Premises.

ARTICLE 12

DEFAULTS AND REMEDIES

 

12.1 EVENTS OF TENANTS DEFAULTS: Tenant shall be in default of its obligations
under this Lease if any of the following events occur:

 

  A. Tenant has failed to pay Base Monthly Rent or any Additional Rent within
five (5) days after written notice from Landlord that it is due (provided,
however, that Landlord shall not be required to give more than two (2) such
notices in any twelve (12) consecutive month period, after which Tenant shall be
in default if it fails to pay any rent or other charge when due); or

 

  B. Tenant shall have done or permitted to have been done any act, use or thing
in its use, occupancy or possession of the Leased Premises or in its use of the
Common Areas which is prohibited by the terms of this Lease and, within thirty
(30) days after written notice from Landlord specifying the nature of the
default with reasonable particularity has failed to cure such default (provided,
however, that if the default is of such a nature that it cannot be completely
remedied within such thirty (30) day period, this provision shall be complied
with if Tenant begins to cure the default within the thirty (30) day period and
thereafter proceeds with due diligence and in good faith to effect the cure as
soon as practicable); or

 

  C. Tenant has failed to perform any other term or provision of this Lease
within thirty (30) days after written notice from Landlord specifying the nature
of the default with reasonable particularity (provided, however, that if the
default is of such a nature that it cannot be completely remedied within such
thirty (30) day period, this provision shall be complied with if Tenant begins
to cure the default within the thirty (30) day period and thereafter proceeds
with due diligence and in good faith to effect the cure as soon as practicable);
or

 

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  D. Tenant shall have sublet the Leased Premises or assigned or encumbered its
interest in this Lease in violation of the provisions contained in Article 7,
whether voluntarily or by operation of Law; or

 

  E. Tenant shall have abandoned the Leased Premises; or

 

  F. Tenant or any Guarantor of this Lease shall have permitted or suffered the
sequestration or attachment of, or execution on, or the appointment of a
custodian or receiver with respect to, all or any substantial part of the
property or assets of Tenant (or such Guarantor) or any property or asset
essential to the conduct of Tenant’s (or such Guarantor’s) business, and Tenant
(or such Guarantor) shall have failed to obtain return or release of the same
within thirty days thereafter, or prior to sale pursuant to such sequestration,
attachment or levy, whichever is earlier; or

 

  G. Tenant or any Guarantor of this Lease shall have made a general assignment
of all or a substantial part of its assets for the benefit of creditors; or

 

  H. Tenant or any Guarantor of this Lease shall have allowed (or sought) to
have entered against it a decree or order which: (i) grants or constitutes an
order for relief, appointment of a trustee, or confirmation of a reorganization
plan under the bankruptcy laws of the United States; (ii) approves as properly
filed a petition seeking liquidation or reorganization under said bankruptcy
laws or any other debtor’s relief law or similar statute of the United States or
any state thereof; or (iii) otherwise directs the winding up or liquidation of
Tenant; provided, however, if any decree or order was entered without Tenant’s
consent or over Tenant’s objection, Landlord may not terminate this Lease
pursuant to this Subparagraph if such decree or order is rescinded or reversed
within thirty days after its original entry.

 

  I. Tenant or any Guarantor of this Lease shall have availed itself of the
protection of any debtor’s relief law, moratorium law or other similar Law which
does not require the prior entry of a decree or order.

 

12.2 LANDLORD’S REMEDIES: In the event of any default by Tenant, and without
limiting Landlord’s right to indemnification as provided in Article 8.2,
Landlord shall have the following remedies, in addition to all other rights and
remedies provided by Law or otherwise provided in this Lease, to which Landlord
may resort cumulatively, or in the alternative:

 

  A. Landlord may, at Landlord’s election, keep this Lease in effect and
enforce, by an action at law or in equity, all of its rights and remedies under
this Lease including, without limitation, (i) the right to recover the rent and
other sums as they become due by appropriate legal action, (ii) the right to
make payments required of Tenant, or perform Tenant’s obligations and be
reimbursed by Tenant for the cost thereof with interest at the then maximum rate
of interest not prohibited by Law from the date the sum is paid by Landlord
until Landlord is reimbursed by Tenant, and (iii) the remedies of injunctive
relief and specific performance to prevent Tenant from violating the terms of
this Lease and/or to compel Tenant to perform its obligations under this Lease,
as the case may be.

 

  B. Landlord may, at Landlord’s election, terminate this Lease by giving Tenant
written notice of termination in which event this Lease shall terminate on the
date set forth for termination in such notice. Any termination under this
Subparagraph shall not relieve Tenant from its obligation to pay Landlord all
Base Monthly Rent or Additional Rent then or thereafter due, or any other sums
due or thereafter accruing to Landlord, or from any claim against Tenant for
damages previously accrued or then or thereafter accruing. In no event shall any
one or more of the following actions by Landlord, in the absence of a written
election by Landlord to terminate this Lease, constitute a termination of this
Lease:

 

  (1) Appointment of a receiver of keeper in order to protect Landlord’s
interest hereunder;

 

  (2) Consent to any subletting of the Leased Premises or assignment of this
Lease by Tenant, whether pursuant to the provisions hereof or otherwise; or

 

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  (3) Any other action by Landlord or Landlord’s agents intended to mitigate the
adverse effects of any breach of this Lease by Tenant, including, without
limitation, any action taken to maintain and preserve the Leased Premises or any
action taken to re-let the Leased Premises, or any portion thereof, for the
account of Tenant and in the name of Tenant.

 

  C. In the event Tenant breaches this Lease and abandons the Leased Premises,
Landlord may terminate this Lease, but his Lease shall not terminate unless
Landlord gives Tenant written notice of termination. No act by or on behalf of
Landlord intended to mitigate the adverse effect of such breach, including those
described by Subparagraph B (1), (2) and (3) immediately preceding, shall
constitute a termination of Tenant’s right to possession unless Landlord gives
Tenant written notice of termination. If Landlord does not terminate this Lease
by giving written notice of termination, Landlord may enforce all its rights and
remedies under this Lease, including the right to recover rent as it becomes due
under this Lease as provided in California Civil Code Section 1951.4, as in
effect on the Effective Date of this Lease.

 

  D. In the event Landlord terminates this Lease, Landlord shall be entitled, at
Landlord’s election, to damages in an amount as set forth in California Civil
Code Section 1951.2, as in effect on the Effective Date of this Lease. For
purposes of computing damages pursuant to said Section 1951.2, an interest rate
equal to the maximum rate of interest then not prohibited by Law shall be used
where permitted. Such damages shall include, without limitation:

 

  (1) The worth at the time of award of the amount by which the unpaid rent for
the balance of the term after the time of award exceeds the amount of such loss
that Tenant proves could be reasonably avoided, computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent: and

 

  (2) Any other amount necessary to compensate Landlord for all detriment
proximately caused by Tenant’s failure to perform Tenant’s obligations under
this Lease, or which in the ordinary course of things would be likely to result
therefrom, including, without limitation, the following: (i) expenses for
cleaning, repairing or restoring the Leased Premises; (ii) expenses for
altering, remodeling or otherwise improving the Leased Premises for the purpose
of re-letting, including removal of existing leasehold improvements and/or
installation of additional leasehold improvements (regardless of how the same is
funded, including reduction of rent, a direct payment or allowance to a new
tenant, or otherwise); (iii) broker’s fees, advertising costs and other expenses
of re-letting the Leased Premises; (iv) costs of carrying the Leased Premises,
such as taxes, insurance premiums, utility charges and security precautions;
(v) expenses incurred in removing, disposing of and/or storing any of Tenant’s
personal property, inventory or trade fixtures remaining therein;
(vi) attorney’s fees, expert witness fees, court costs and other reasonable
expenses incurred by Landlord (nut not limited to taxable costs) in retaking
possession of the Leased Premises, establishing damages hereunder, and
re-leasing the Leased Premises; and (vii) any other expenses, costs or damages
otherwise incurred or suffered as a result of Tenant’s default.

 

12.3 LANDLORD’S DEFAULT AND TENANT’S REMEDIES: In the event Landlord fails to
perform any of its obligations under this Lease, Landlord shall nevertheless not
be in default under the terms of this Lease until such time as Tenant shall have
first given Landlord written notice specifying the nature of such failure to
perform its obligations, and then only after Landlord shall have had a
reasonable period of time following its receipt of such notice within which to
perform such obligations. In the event of Landlord’s default as above set forth,
then, and only then, Tenant shall have the following remedies only:

 

  A. Tenant may then proceed in equity or at law to compel Landlord to perform
its obligations and/or recover damages proximately caused by such failure to
perform (except as and to the extent Tenant has waived its right to damages as
provided in this Lease).

 

  B. Tenant, at its option, may then cure any default of Landlord at Landlord’s
cost. If, pursuant to this Subparagraph, Tenant reasonably pays any sum to any
third party or does any act that requires the payment of any sum to any third
party at any time by reason of Landlord’s default, the sum paid by Tenant shall
be immediately due from Landlord to Tenant at the time Tenant supplies Landlord
with an invoice therefore (provided such invoice sets forth and is accompanied
by a written statement of Tenant setting forth in reasonable detail the amount
paid, the party to whom it was paid, the date it was paid, and the reasons
giving rise to such payment), together with interest at twelve percent per annum
from the date of such invoice until Tenant is reimbursed by Landlord.

 

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12.4 LIMITATION ON TENANT’S RECOURSE: If Landlord is a corporation, trust,
partnership, joint venture, unincorporated association, or other form of
business entity, Tenant agrees that (i) the obligations of Landlord under this
Lease shall not constitute personal obligations of the officers, directors,
trustees, partners, joint venturers, members, owners, stockholders, or other
principals of such business entity and (ii) Tenant shall have recourse only to
the assets of such business entity for the satisfaction of such obligations and
not against the assets of such officers, directors, trustees, partners, joint
venturers, members, owners, stockholders or principals (other than to the extent
of their interest in the assets owned by such business entity). Additionally, if
Landlord is a partnership, then Tenant covenants and agrees:

 

  A. No partner of Landlord shall be sued or named as a part in any suit or
action brought by Tenant with respect to any alleged breach of this Lease
(except to the extent necessary to secure jurisdiction over the partnership and
then only of that sole purpose);

 

  B. No service of process shall be made against any partner of Landlord except
for the sole purpose of securing jurisdiction over the partnership; and

 

  C. No writ of execution will ever be levied against the assets of any partner
of Landlord other than to the extent of his interest in the assets of the
partnership. Tenant further agrees that each of the foregoing covenants and
agreements shall be enforceable by Landlord and by any partner of Landlord and
shall be applicable to any actual or alleged misrepresentation or nondisclosure
made respecting this Lease or the Leased Premises or any actual or alleged
failure, default or breach of any covenant or agreement either expressly or
implicitly contained in this Lease or imposed by statute or at common law.

 

12.5 TENANT’S WAIVER: Landlord and Tenant agree that the provisions of Paragraph
12.3 above are intended to supercede and replace the provisions of California
Civil Code 1932. (1), 1941 and 1942, and accordingly, Tenant hereby waives the
provisions of Section 1932(1), 1941 and 1942 of the California Civil Code and/or
any similar or successor Law regarding Tenant’s right to terminate this Lease or
to make repairs and deduct the expenses of such repair from the rent due under
this Lease. Tenant hereby waives any right of redemption or relief from
forfeiture under the Laws of the State of California, or under any other present
or future Law, in the event Tenant is evicted or Landlord takes possession of
the Leased Premises by reason of any default by Tenant.

ARTICLE 13

GENERAL PROVISIONS

 

13.1 TAXES ON TENANT’S PROPERTY: Tenant shall pay before delinquency any and all
taxes, assessments, license fees, use fees and public charges of whatever nature
or description levied, assessed or imposed against Tenant or Tenant’s estate in
this Lease or Tenant’s property or improvements made by Tenant to the Leased
Premises. Tenant shall pay before delinquency and all taxes, assessments,
license fees, use fees and public charges of whatever nature or description
levied, assessed or imposed by a governmental agency against Landlord by reason
of or based upon Tenant’s use of public facilities or services, or Tenant’s
consumption of public utilities, energy, water or other resources which become
due during the Lease Term. On demand by Landlord, Tenant shall furnish Landlord
with satisfactory evidence of these payments. If any such taxes, assessments,
fees or public charges are levied against Landlord, Landlord’s property, the
Building or the Project, or if the assessed value of the Building or the Project
is increased by the inclusion therein of a value placed upon same, then
Landlord, after giving written notice to Tenant, shall have the right,
regardless of the validity thereof, to pay such taxes, assessment, fee or public
charge and bill Tenant, as Additionally Rent, the amount of such taxes,
assessment, fee or public charge so paid on Tenant’s behalf. Tenant shall,
within ten days from the date it receives an invoice from Landlord setting forth
the amount of such taxes, assessment, fee or public charge so levied, pay to
Landlord, as Additional Rent, the amount set forth in said invoice. Failure by
Tenant to pay the amount so invoiced within said ten-day period shall be
conclusively deemed a default by Tenant under this Lease. Tenant shall have the
right, and with Landlord’s full cooperation if Tenant is not then in default
under the terms of this Lease, to bring suit in any court of competent
jurisdiction to recover from the taxing authority the amount of any such taxes,
assessment, fee or public charge so paid.

 

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13.2 HOLDING OVER: This Lease shall terminate without further notice on the
Leased Expiration Date (as set forth in Article 1). Any holding over by Tenant
after expiration of the Lease Term shall neither constitute a renewal or
extension of this Lease nor give Tenant any rights in or to the Leased Premises
except as expressly provided in this Paragraph. Any such holding over shall be
deemed an unlawful detainer or the Leased Premises unless Landlord has consented
to same. Any such holding over to which Landlord has consented shall be
construed to be a tenancy from month to month, on the same terms and conditions
herein specified insofar as applicable, except that the Base Monthly Rent shall
be increased to an amount equal to one hundred ten percent of the Base Monthly
Rent payable during the last full month immediately preceding such holding over.

 

13.3 SUBORDINATION TO MORTGAGES: This Lease is subject and subordinate to all
underlying ground leases and to all mortgages and deeds of trust which affect
the Building and are of public record as of the Effective Date of this Lease,
and to all renewals, modifications, consolidation, replacements and extensions
thereof. However, if the lessor under any such ground lease or any Lender
holding any such mortgage or deed of trust shall advise landlord that it desires
or requires this Lease to be made prior and superior thereto, then, upon written
request of Landlord to Tenant, Tenant shall promptly execute, acknowledge and
deliver any and all documents or instruments which Landlord and such lessor or
Lender deem necessary or desirable to make this Lease prior thereto. Tenant
hereby consents to Landlord’s ground leasing the land underlying the Building
and/or encumbering the Building as security for future loans on such terms as
Landlord shall desire, all of which future ground leases, mortgages or deeds of
trust shall be subject and subordinate to this Lease. However, if any lessor
under any such future ground lease or any Lender holding such future mortgage or
deed of trust shall desire or require that this Lease be made subject and
subordinate to such future ground lease, mortgage or deed of trust, then Tenant
agrees, within ten days after Landlord’s written request therefore, to execute,
acknowledge and deliver to Landlord any and all documents or instruments
requested by Landlord or such lessor or Lender as may be necessary or proper to
assure the subordination of this Lease to such future ground lease, mortgage or
deed of trust; but only if such lessor or Lender agrees to recognize Tenant’s
rights under this Lease and not to disturb Tenant’s quiet possession of the
Leased Premises so long as Tenant is not in default under this Lease.

 

13.4 TENANT’S ATTORNMENT UPON FORECLOSURE: Tenant shall, upon request, attorn
(i) to any purchaser of the Building, (ii) to any grantee or transferee
designated in any deed given in lieu of foreclosure of any security interest
encumbering the Building, or (iii) to the lessor under any underlying ground
lease of the land underlying the Building, should such ground lease be
terminated; provided that such purchaser, grantee or lessor recognizes Tenant’s
rights under this Lease.

 

13.5 MORTGAGEE PROTECTION: In the event of any default on the part of Landlord,
Tenant will give notice by certified mail to any Lender or lessor under any
underlying ground lease who shall have requested, in writing, to Tenant that it
be provided with such notice, and Tenant shall offer such Lender or lessor a
reasonable opportunity to cure the default, including time to maintain
possession of the Lease Premises by power of sale or judicial foreclosure or
other appropriate legal proceedings as reasonably necessary to effect a cure.

 

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13.6 ESTOPPEL CERTIFICATES: Tenant will, following any request by Landlord,
promptly execute and deliver to Landlord an estoppel certificate (i) certifying
that this Lease is unmodified and in full force and effect, or, if modified,
stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect, (ii) stating the date to which the rent
and other charges are paid in advance, if any, (iii) acknowledging that there
are not, to Tenant’s knowledge, any uncured defaults on the part of the Landlord
hereunder, or specifying such defaults if any are claimed, and (iv) certifying
such other information about this Lease as may be reasonably requested by
Landlord. Tenant’s failure to execute and deliver such estoppel certificate
within ten days after Landlord’s request therefore shall be material default by
Tenant under this Lease, and Landlord shall have all of the rights and remedies
available to Landlord as Landlord would otherwise have in the case of any other
material default by Tenant, including the right to terminate this Lease and sue
for damages proximately caused thereby it being agreed and understood by Tenant
that Tenant’s failure to so deliver such estoppel certificate in a timely manner
could result in Landlord being unable to perform committed obligations to other
third parties which were made by landlord in reliance upon this covenant of
Tenant. Landlord and Tenant intend that any statement delivered pursuant to this
Paragraph may be relied upon by any Lender or purchaser or prospective Lender or
purchaser of the Building, the Project, or any interest therein.

 

13.7 TRANSFER BY LANDLORD: Landlord and its successor in interest shall have the
right to transfer their interest in the Building, Project, or any portion
thereof at any time and to any person or entity. In the event of any such
transfer, the Landlord originally named herein (and in the case of any
subsequent transfer, the transferor), from the date of such transfer, (i) shall
be automatically relieved without any further act by any person or entity, of
all liability for the performance of the obligations of the Landlord hereunder
which may accrue after the date of such transfer and (ii) shall be relieved of
all liability for the performance of the obligations of the Landlord hereunder
which have accrued before the date of transfer if its transferee agrees to
assume and perform all such prior obligations of the Landlord hereunder. Tenant
shall attorn to any such transferee. After the date of any such transfer, the
term “Landlord” as used herein shall mean the transferee of such interest in the
Building or the Project.

 

13.8 FORCE MAJEURE: The obligations of each of the parties under this Lease
(other than the obligation to pay money) shall be temporarily excused if such
party is prevented or delayed in performing such obligation by reason of any
strikes, lockouts or labor disputes; inability to obtain labor, materials, fuels
or reasonable substitutes therefore; governmental restrictions, regulations,
controls, action or inaction; civil commotion; inclement weather, fire or other
acts of God; or other causes (except financial inability) beyond the reasonable
control of the party obligated to perform (including acts or omissions of the
other party) for a period equal to the period of any such prevention, delay or
stoppage.

 

13.9 NOTICES: Any notice required or desired to be given by a party regarding
this Lease shall be in writing and shall be personally served, or in lieu of
personal service may be given by depositing such notice in the United States
mail, certified, postage prepaid, addressed to the other party as follows:

 

  A. If addressed to Landlord, to Landlord at its Address for Notices (as set
forth in Article 1)

 

  B. If addressed to Tenant, to Tenant at its Address for Notices (as set forth
in Article 1). Any notice given by certified mail shall be deemed given on the
date receipt was acknowledged to the postal authorities. Any notice given by
mail other than certified mail shall be deemed given only if received by the
other party, and then on the date of receipt. Each party may, by written notice
to the other in the manner aforesaid, change the address to which notices
addressed to it shall thereafter be mailed.

 

13.10 ATTORNEYS’ FEES: In the event any party shall bring any action,
arbitration proceeding or legal proceeding alleging a breach of any provision of
this Lease, to recover rent, to terminate this Lease, or to enforce, protect,
determine or establish any term or covenant of this Lease or rights or duties
hereunder of either party, the prevailing party shall be entitled to recover
from the non-prevailing party as a part of such action or proceeding, or in a
separate action for that purpose brought within one year from the determination
of such proceeding, reasonable attorney’s fees, expert witness fees, court costs
and other reasonable expenses incurred by the prevailing party. In the event
that Landlord shall be required to retain counsel to enforce any provision of
this Lease, and if Tenant shall thereafter cure (or desire to cure) such
default, Landlord shall be conclusively deemed the prevailing party and Tenant
shall pay to Landlord all attorneys’ fees, expert witness fees, court costs and
other reasonable expenses so incurred by Landlord promptly upon demand. Landlord
may enforce this provision by either (i) requiring Tenant to pay such fees and
costs as a condition to curing its default or (ii) bringing a separate action to
enforce such payment, it being agreed by and between Landlord and Tenant that
Tenant’s failure to pay such fees and costs upon demand shall constitute a
breach of this Lease in the same manner as a failure by Tenant to pay the Base
Monthly Rent, giving Landlord the same rights and remedies as if Tenant failed
to pay the Base Monthly Rent.

 

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13.11 DEFINITIONS: Any term that is given a special meaning by any provisions in
this Lease shall, unless otherwise specifically stated, have such meaning
whenever used in this Lease in any addendum or amendment hereto. In addition to
the terms defined in Article 1, the following terms shall have the following
meanings:

 

  A. REAL PROPERTY TAXES: The terms “real Property Tax” and “Real Property
Taxes” shall each mean (i) all taxes, assessments, levies and other charges of
any kind or nature whatsoever, general and special, foreseen and unforeseen
(including all installments of principal and interest required to pay any
general or special assessments for public improvements and any increases
resulting from reassessments caused by any change in ownership or new
construction), now or hereafter imposed by any governmental or
quasi-governmental authority or special district having the direct or indirect
power to tax or levy assessments, which are levied or assessed for whatever
reason against the Project or any portion thereof, or Landlord’s interest
therein, or the fixtures, equipment and other property of Landlord that is an
integral part of the Project and located thereon, or Landlord’s business of
owing, leasing or managing the Project or the gross receipts, income or rentals
from the Project; (ii) all charges, levies or fees imposed by any governmental
authority against Landlord by reason of or based upon the use of or number of
parking spaces within the Project, the amount of public services or public
utilities used or consumed (e.g. water, gas, electricity, sewage or surface
water disposal) at the Project, the number of persons employed by tenants of the
Project, the size (whether measured in area, volume, number of tenants or
whatever) or the value of the Project, or the type of use or uses conducted
within the Project; and (iii) all costs and fees (including attorneys’ fees)
incurred by Landlord in contesting any Real Property Tax and in negotiating with
public authorities as to any Real Property Tax. If, at any time during the Lease
Term, the taxation or assessment of the Project prevailing as of the Effective
Date of this Lease shall be altered so that in lieu of or in addition to any
Real Property Tax described above there shall be levied, assessed or imposed
(whether by reason of a change in the method of taxation or assessment, creation
of a new tax or charge, or any other cause) and alternate, substitute, or
additional tax or charge (i) on the value, size, use or occupancy of the Project
or Landlord’s interest therein or (ii) on or measured by the gross receipts,
income or rentals from the Project, or on Landlord’s business of owning, leasing
or managing the Project or (iii) computed in any manner with respect to the
operation of the Project, then any such tax or charge, however designated, shall
be included within the meaning of the terms “Real Property Tax” or “Real
Property Taxes” for purposes of this Lease. If any Real Property Tax is partly
based upon property or rents unrelated to the Project, then only that part of
such Real Property Tax that is fairly allocable to the Project shall be included
within the meaning of the terms “Real Property Tax” or “Real Property Taxes”.
Notwithstanding the foregoing, the terms “Real Property Tax” or “Real Property
Taxes” shall not include estate, inheritance, transfer, gift or franchise taxes
of Landlord or the federal or state income tax imposed on Landlord’s income from
all sources.

 

  B. LANDLORD’S INSURANCE COSTS: The term “Landlord’s Insurance Costs” shall
mean the costs to Landlord to carry and maintain the policies of fire and
property damage insurance for the Project and general liability insurance
required, or permitted, to be carried by Landlord pursuant to Article 9,
together with any deductible amounts paid by Landlord upon the occurrence of any
insured casualty or loss.

 

  C. READY FOR OCCUPANCY: The term “Ready for Occupancy” shall mean the date
upon which (i) the Leased Premises are suitable for Tenants occupancy in a broom
clean condition and (ii) the improvements, if any, to be made to the Leased
Premises by Landlord as a condition to Tenant’s obligation to accept possession
of the Leased Premises have been substantially completed and the appropriate
governmental building department (i.e. the City building department, if the
Project is located within a City, or otherwise the County building department)
shall have approved the construction of the improvements as complete or is
willing to so approve the construction of the improvements as complete subject
only to compliance with specified conditions which are the responsibility of
Tenant to satisfy.

 

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  D. TENANT’S PROPORTIONATE SHARE: The terms “Tenant’s Proportionate Share” and
Tenant’s Share” as used with respect to an item pertaining to the Building,
shall each mean that percentage obtained by dividing the leasable square footage
contained within the Leased Premises (as set forth in Article 1) by the total
leasable square footage contained within the Building as the same from time to
time exists or, as used with respect to an item pertaining to the Project, shall
each mean that percentage obtained by dividing the leasable square footage
contained within the Leased Premises (as set forth in Article 1) by the total
leasable square footage contained within the Project as the same from time to
time exists, unless, as to any given item, such a percentage allocation unfairly
burdens or benefits a given tenant(s), in which case Landlord shall have the
exclusive right to equitably allocate such item so as to not unfairly burden or
benefit a given tenant(s). Landlord’s determination of any such special
allocation shall be final and binding upon Tenant unless made in bad faith.

 

  E. BUILDINGS PROPORTIONATE SHARE: The terms “Building’s Proportionate Share”
and “Building’s Share” shall each mean that percentage which is obtained by
dividing the leasable square footage contained within the Building by the
leasable square footage contained with all buildings located within the Project,
unless, as to any given item, such a percentage allocation unfairly burdens or
benefits a given building(s), in which case Landlord shall have the exclusive
right to equitably allocate such item so as to not unfairly burden or benefit
any given building(s). Landlord’s determination of any such special allocation
shall be final and binding upon Tenant unless made in bad faith.

 

  F. LAW: The term “Law” shall mean any judicial decision and any statute,
constitution, ordinance, resolution, regulation, rule, administrative order, or
other requirement of any municipal, county, state, federal, or other
governmental agency or authority having jurisdiction over the parties to this
Lease, the Leased Premises, the Building or the Project, or any of them in
effect either at the Effective Date of this Lease or at any time during the
Lease Term, including, without limitation, any regulation, order, or policy of
any quasi-official entity or body (e.g. a board of fire examiners or a public
utility or special district).

 

  G. LENDER: The term “Lender” shall mean any beneficiary, mortgagee, secured
party, or other holder of any deed of trust, mortgage or other written security
device or agreement affecting the Project, and the note or other obligations
secured by it.

 

  H. PRIVATE RESTRICTIONS: The term “Private Restrictions” shall mean all
recorded covenants, conditions and restrictions, private agreements, easements,
and any other recorded instruments affecting the use of the Project, as they may
exist from time to time.

 

  I. RENT: The term “rent” shall mean collectively Base Monthly Rent and all
Additional Rent.

 

13.12 GENERAL WAIVERS: One party’s consent to or approval of any act by the
other party requiring the first party’s consent or approval shall not be deemed
to waive or render unnecessary the first party’s consent to or approval of any
subsequent similar act by the other party. No waiver of any provision hereof or
any breach of any provision hereof shall be effective unless in writing and
signed by the waiving party. The receipt by Landlord of any rent or payment with
or without knowledge of the breach of any other provision hereof shall not be
deemed a waiver of any such breach. No waiver of any provision of this Lease
shall be deemed a continuing waiver unless such a waiver specifically states so
in writing and is signed by both Landlord and Tenant. No delay or omission in
the exercise of any right or remedy accruing to either party upon any breach by
the other party under this Lease shall impair such right or remedy or be
construed as a waiver of any such breach theretofore or thereafter occurring.
The waiver by either party of any breach of any provision of this Lease shall
not be deemed to be a waiver of any subsequent breach of the same or any other
provisions herein contained.

 

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13.13 MISCELLANEOUS: Should any provision of this Lease prove to be invalid or
illegal, such invalidity or illegality shall in no way affect, impair or
invalidate any other provision hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor. Any copy of this Lease, which is executed by the parties, shall be
deemed an original for all purposes. This Lease shall, subject to the provisions
regarding assignment, apply to and bind the respective heirs, successors,
executors, administrators and assigns of Landlord and Tenant. The term “party”
shall mean Landlord or Tenant as the context implies. If Tenant consists of more
than one person or entity, then all members of Tenant shall be jointly and
severally liable hereunder. This Lease shall be construed and enforced in
accordance with the Laws of the State of California. The language in all parts
of this Lease shall in all cases be construed as a whole according to its fair
meaning, and not strictly for or against either Landlord or Tenant. The captions
used in this Lease are for convenience only and shall not be considered in the
construction or interpretation of any provision hereof. When the context of this
Lease requires, the neuter gender includes the masculine, the feminine, a
partnership or corporation or joint venture, and the singular includes the
plural. The terms “must”, “shall”, “will” and “agree” are mandatory. The term
“may” is permissive. When a party is required to do something by this Lease, it
shall do so at its sole cost and expense without right of reimbursement from the
other party unless specific provision is made therefore. Where Tenant is
obligated not to perform any act or is not permitted to perform any act, Tenant
is also obligated to restrain any others reasonably within its control,
including agents, invitees, contractors, subcontractors and employees, from
performing said act. Landlord shall not become or be deemed a partner or a joint
venturer with Tenant by reason of any of the provisions of this Lease.

ARTICLE 14

CORPORATE AUTHORITY, BROKERS AND ENTIRE AGREEMENT

 

14.1 CORPORATE AUTHORITY: If Tenant is a corporation, each individual executing
this Lease on behalf of said corporation represents and warrants that Tenant is
validly formed and duly authorized and existing, that Tenant is qualified to do
business in the State of California, that Tenant has the full right and legal
authority to enter into this Lease, that he is duly authorized to execute and
deliver this Lease on behalf of the Tenant in accordance with the bylaws and/or
a board of directors’ resolution of Tenant, and that this Lease is binding upon
Tenant in accordance with its terms. Tenant shall, within thirty days after
execution of this Lease, deliver to Landlord a certified copy of the resolution
of its board of directors authorizing or ratifying the execution of this Lease,
and if Tenant fails to do so, Landlord at its sole election may elect to
(i) extend the Intended Commencement Date by such number of days that Tenant
shall have delayed in so delivering such corporate resolution to Landlord or
(ii) terminate this Lease.

 

14.2 BROKERAGE COMMISSIONS: Tenant warrants that it has not had any dealings
with any real estate broker(s), leasing agent(s) or salesmen, other than those
persons or entities named in Article 1 as the “Brokers” with respect to the
lease by it of the Leased Premises pursuant to this Lease, and that it will
indemnify, defend with competent counsel, and hold Landlord harmless from any
liability for the payment of any real estate brokerage commissions, leasing
commissions or finder’s fees claimed by any other real estate broker(s), leasing
agent(s) or salesmen to be earned or due and payable by reason of Tenant’s
agreement or promise (implied or otherwise) to pay (or have Landlord pay) such a
commission or finder’s fee by reason of its leasing the Leased Premises pursuant
to this Lease.

 

14.3 ENTIRE AGREEMENT: This Lease, the Exhibits (as described in Article 1) and
the Addenda (as described in Article 1), which Exhibits and Addenda are by this
reference incorporate herein, constitute the entire agreement between the
parties, and there are no other agreements, understandings or representations
between the parties relating to the lease by Landlord of the Leased Premises to
Tenant, except as expressed herein. No subsequent changes, modifications or
additions to this Lease shall be binding upon the parties unless in writing and
signed by both Landlord and Tenant.

 

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14.4 LANDLORD’S REPRESENTATIONS: Tenant acknowledges that neither Landlord nor
any of its agents made any representations or warranties respecting the Project,
the Building or the Leased Premises, upon which Tenant relied in entering into
this Lease, which are not expressly set forth in this Lease. Tenant further
acknowledges that neither Landlord nor any of its agents made any
representations as to (i) whether the Lease Premises may be used for Tenant’s
intended use under existing Law or (ii) the suitability of the Leased Premises
for the conduct of Tenant’s business or (iii) the exact square footage of the
Leased Premises, and that Tenant relied solely upon its own investigations
respecting said matters. Tenant expressly waives any and all claims for damage
by reason of any statement, representation, warranty, promise or other agreement
of Landlord or Landlord’s agent(s), if any, not contained in this Lease or in
any Addenda hereto.

ARTICLE 15

OPTION TO RENEW LEASE

 

15.1 OPTION TO RENEW LEASE: Provided that Tenant is not in default under this
Lease beyond the applicable notice and cure period at the time of exercise of
any such option or at the time of commencement of any renewal term, Tenant is
hereby granted two (2) options to renew the term of the Lease. Each option shall
be for a period of thirty (36) months and each such period being a “Renewal
Term”.

 

  A. Tenant shall occupy the Premises during the Renewal Term under the same
terms and conditions specified in the Lease, except the Tenant shall lease the
Premises in its then “as-is” condition, with Tenant being entitled to no
additional tenant improvement allowance or other right to require the
improvements to be made to the Premises. The Base Monthly Rent for the first
Renewal Term shall be the then Market Rate, but not less than the Base Monthly
Rate for the Premises in effect immediately prior to the commencement of such
Renewal Term. During the second Renewal Term, the Base Monthly Rent shall be the
then Market Rate, but not less than the Base Monthly Rate for the Premises in
effect immediately prior to the commencement of such Renewal Term.

 

  B. As used herein, the term “Market Rate” shall be initially determined by
Landlord as the amount as the base annual rent per square foot then being
charged in comparable industrial buildings located in the metropolitan area of
San Jose, California (the “Comparable Buildings”) for space comparable to the
Premises and taking into consideration all other relevant factors establishing
similarity or dissimilarity between the comparable lease and the leasing of the
Premises to Tenant for the Renewal Term, including without limitation,
escalations (including type, base year and stop), concessions, length of lease
term, size and location of the Premises, tenant improvement allowances quality
and quantity of any existing tenant improvements, quality and creditworthiness
of Tenant, amenities offered, location of building, and other generally
applicable concessions, allowances, terms and conditions of tenancy. The
reference to the foregoing factors is illustrative only and the presence or
absence of such factors shall be taken into account in determining Market Rate.

 

  C. Within thirty (30) days after Landlord receives the notice of Tenant’s
exercise of the second renewal option, Landlord shall notify Tenant of the
proposed Market Rate, as well as any escalation rate applicable to the second
Renewal Term. In the event that landlord and Tenant are not able to agree as to
the market Rate and any applicable escalation rate within thirty (30) days of
good faith negotiation, then the Base Monthly Rate for the second Renewal Term
shall be determined by the arbitration provision set forth below.

 

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  D. If Landlord and Tenant cannot agree on the Base Monthly rent to be paid
during the second Renewal Term as provided above, then each party shall
immediately select an arbitrator to determine the base Monthly Rent to be paid
by Tenant during the applicable period. If the two arbitrators agree on the Base
Monthly Rent to be paid by the Tenant, then their decision shall be binding on
the parties. If the arbitrators cannot agree within fifteen (15) days following
their appointment on the Base Monthly Rent to be paid, then the two shall,
within five (5) days thereafter, select a third arbitrator who will consider the

 

  proposal of each party’s arbitrator, and shall, within five (5) days from the
third arbitrator’s appointment, adopt the findings of either the Landlord’s or
Tenant’s arbitrator with respect to Base Monthly Rent to be paid during the
applicable period, which finding shall be final and binding upon the parties. If
one of the parties appoints an arbitrator and the other party does not do so
within the period provided herein, the decision of the single arbitrator
appointed by the one party shall be binding upon the parties.

 

  E. Tenant may exercise its right to renew the Lease by giving to Landlord
written notice of its election to renew the Lease not later than 90 days prior
to the expiration of the then current Term or Renewal Term, as applicable.

 

  F. Tenant shall not be entitled to more than two (2) renewal options. In the
event Tenant fails to timely notify Landlord in the manner herein specified,
Tenant shall be conclusively deemed to have waived its right to enter into the
applicable Renewal Term or any subsequent Renewal Term.

 

  G. The options to renew provided hereunder shall be automatically transferred
to any assignee of Tenant’s interest under this Lease.

ARTICLE 16

INTENT TO SELL PROPERTY

 

16.1 LANDLORD’S NOTICE OF INTENT TO SELL PROPERTY: Should Landlord actively
pursue sale of 355 Turtle Creek Court, or receive an unsolicited offer on the
property during the Lease term, then Landlord shall notify Tenant or Tenant’s
management by registered mail 30 days in advance of offering to others or within
30 days of an unsolicited offer. Tenant shall reply with its interest or decline
within 15 days after Landlord’s notice.

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
respective dates below set forth with the intent to be legally bound thereby as
of the Effective Date of this Lease first above set forth.

 

            AS LANDLORD:

Dated: June 21, 2012

            By: Gail H. Ducote       By: Robert D. Ducote       AS TENANT:

Dated: June 19, 2012

            Viasystems Corporation       By: Daniel J. Weber              V.P.

If Tenant is a corporation, the authorized officers must sign on behalf of the
corporation and indicate the capacity in which they are signing. This Lease must
be executed by the chairman of the board, president, or vice-president, and the
secretary, assistant secretary, the chief financial officer or assistant
treasurer, unless the bylaws or a resolution of the board of directors shall
otherwise provide, in which event a certified copy of the bylaws or a certified
copy of the resolution, as the case may be, must be attached to this Lease.

 

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