exv10w18



 







Exhibit 10.18




SECOND AMENDMENT TO STANDARD MULTI-TENANT OFFICE LEASE – GROSS

dated June 13, 2005,

wherein Ethan Conrad is referred to as “Lessor”

and Volcano Corporation, a California Corporation is referred to as “Lessee”

with reference to the Premises located at 11135 Trade Center Drive, Suite 160

City of Rancho Cordova, County of Sacramento, State of California



This Second Amendment shall, in the event of a conflict, supersede as set forth in the Lease and
any prior Addenda.




ADDITIONAL PROVISIONS:





	1.	 	LEASE COMMENCEMENT & EXPIRATION:






The Lease Commencement Date shall be modified to November 23, 2005. Based on the Lease Term
of 3 years and 11 months, the Lease Expiration shall be modified to October 22, 2009.




	2.	 	BASE MONTHLY RENT SCHEDULE:






The Base Monthly Rent Schedule shall be modified as described below based on the provisions
of Item 1 above.



	 	 	 	 	 
	November 23, 2005 – January 21, 2006:

	 	 	FREE

	January 22, 2006 – December 31, 2006:

	 	 	$35,177.00	 
	January 1, 2007 – December 31, 2007:

	 	 	$36,408.00	 
	January 1, 2008 – December 31, 2008:

	 	 	$37,682.00	 
	January 1 , 2009 – October 22, 2009:

	 	 	$39,001.00	 






	 	 	 
	AGREED
AND ACCEPTED:

	 	AGREED AND ACCEPTED:
	Lessor:  Ethan Conrad

	 	Lessee:
Volcano
Corporation,
               a California Corporation
	 

	 	






	 	 	 	 	 
	BY: 	/s/ Ethan Conrad	 	By: 	 /s/ John Dahldorf
	 	  Ethan Conrad	 	 	John Dahldorf, Chief Financial Officer
	 
	 	 
	 	Date: 12/12/05
 


	 	 	Date: 12.07.05
 
 






1 of 1





 









 






 

________________________________________________&#
95;_________
(“Lessor”) and Volcano Corporation, a California
Corporation (“Lessee”), (collectively the “Parties”, or individually a “Party”).




     1.2(a)
Premises: That certain portion of the Project (as defined below), known as Suite
Numbers(s)
160,
                floor(s), consisting of
approximately 33,600 rentable square feet and approximately 33,600 useable square
feet (‘Premises’). Lessor represents and warrants that all calculations of the rentable square
footage of the Premises were made in accordance with the Building Owners and Managers Associates’
American National Standard and is the current method of measurement employed by Lessor in the
Project. If by reason of actual measurement of the Premises, it is ascertained that the rentable
square footage of the Premises is less or more than 33,600 rentable square feet, there will be an
adjustment to the Rent based on the actual rentable square footage
difference.


The Premises are
located at: 11135 Trade Center Drive, in the City of Rancho Cordova, County of Sacramento, State
of California, with zip code 95670. In addition to Lessee’s rights to use and
occupy the Premises as hereinafter specified, Lessee shall have non-exclusive rights to the Common
Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any rights
to the roof, the exterior walls, the area above the dropped ceilings, or the utility raceways of
the building containing the Premises (“Building”) or to any other buildings in the Project. The
Premises, the Building, the Common Areas, the land upon which they are located, along with all
other buildings and improvements thereon, are herein collectively referred to as the “Project.” The
Project consists of approximately 144,000 rentable square feet. (See also Paragraph 2)



     1.2(b) Parking: 100 unreserved and 0 reserved vehicle parking spaces at a monthly cost
of $0.00 per unreserved space and $0.00
per reserved space. (See Paragraph 2.6)



     1.3 Term: 3 years and 11 months (“Original Term”) commencing Oct. 1, 2005
(“Commencement Date”) and ending Aug. 31, 2009 (“Expiration Date”). (See also Paragraph 3)



     1.4
Early Possession: N/A (“Early Possession Date”). (See also Paragraphs 3.2 and 3.3)



     1.5
Base Rent: $34,104.00 per month (“Base Rent”), payable on the first day of each month
commencing Dec. 1, 2005. (See also Paragraph 4)


þ If this box is checked, there are
provisions in this Lease for the Base Rent to be adjusted.




     1.6 Lessee’s Share of Operating Expense Increase: twenty-three & three tenths percent (23.3%) (“Lessee’s Share”).
Lessee’s Share has been calculated by dividing the approximate rentable
square footage of the Premises by the total approximate square footage of the rentable space
contained in the Project and shall not be subject to revision except in connection with an actual
change in the size of the Premises or a change in the space available for lease in the Project.




	  1.7	Base Rent and Other Monies Paid Upon Execution:






	 	(a)	 	Base Rent: $34,104.00 for the period Dec . 1, 2005  –  Dec. 31, 2005.
	 
	 	(b)	 	Security Deposit: $34,104.00 (“Security
Deposit”). (See also Paragraph 5)
	 
	 	(c)	 	Parking: $0.00 for the period N/A.
	 
	 	(d)	 	Other: $0.00 for N/A.
	 
	 	(e)	 	Total Due Upon Execution of this Lease: $68,208.00.






	1.8   Agreed Use: General office, laboratory, light manufacturing, technology related
uses and similar uses permitted under applicable laws. (See also
Paragraph 6)







	    1.9	  Base Year; Insuring Party. The Base Year is 2006. Lessor is the “Insuring Party”. (See
also Paragraphs 4.2 and 8)
	 
	    1.10	  Real Estate Brokers: (See also Paragraph 15)





          
(a) Representation: The following real estate brokers (the “Brokers”) and brokerage
relationships exist In this transaction (check applicable boxes):



þ Ethan Conrad Properties,
 Inc. represents Lessor exclusively (“Lessor’s Broker”);



þ
Cresa Partners represents Lessee exclusively (“Lessee’s
Broker”); or

o N/A represents both Lessor and Lessee (“Dual Agency”).




          (b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties,
Lessor shall pay to Cresa Partners the Brokers the brokerage fee agreed to in a separate written agreement (or if there is no such agreement, the
sum of five percent or 5% of the total Base Rent for the brokerage services rendered by the Brokers). 50% shall be
paid upon Lease execution and 50% upon occupancy of Premises by Lessee.




	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	JD
	 

	 	 	 	 	 	 	 	 
	INITIALS

	 	 	 	 	 	 	 	INITIALS
	 
	 	 	 	 	 	 	 	 
	©1999
- AIR COMMERCIAL REAL ESTATE ASSOCIATION	 	FORM OF G-1-9/99E







PAGE 1 OF 13









 




[ILLEGIBLE]

o a janitorial
schedule;



o other
(specify):

 




 



.



2. Premises.




     2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the
Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set
forth in this Lease. Unless otherwise provided herein, any statement of size set forth in this
Lease, or that may have been used in calculating Rent, is an approximation which the Parties agree
is reasonable and any payments based thereon are not subject to revision whether or not the actual
size is more or less. Note: Lessee is advised to verify the actual
size prior to executing this
Lease.



     2.2 Condition. Lessor shall deliver the Premises to Lessee in a clean condition on the
Commencement Date or the Early Possession Date, whichever first occurs (“Start Date”), and warrants
that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air
conditioning systems (“HVAC”), and all other items which the Lessor is obligated to construct
pursuant to the Work Letter attached hereto, if any, other than those constructed by Lessee, shall
be in good operating condition on said date.



     2.3 Compliance. Lessor warrants that the improvements comprising the Premises and the Common
Areas comply with the building codes that were in effect at the time that each such improvement, or
portion thereof, was constructed, and also with all applicable laws, covenants or restrictions of
record, regulations, and ordinances (“Applicable Requirements”) in effect on the Start Date. Said
warranty does not apply to the use to which Lessee will put the Premises, modifications which may
be required by the Americans with Disabilities Act or any similar laws as a result of Lessee’s use
(see Paragraph 50), or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a))
made or to be made by Lessee. NOTE: Lessee is responsible for determining whether or not the zoning
and other Applicable Requirements are appropriate for Lessee’s intended use, and acknowledges that
past uses of the Premises may no longer be allowed. If the Premises do not comply with said
warranty, Lessor shall, except as otherwise provided, promptly after receipt of written notice
from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify
the same. If the Applicable Requirements are hereafter changed so as to require during the term of
this Lease the construction of an addition to or an alteration of the Premises, the remediation of
any Hazardous Substance, or the reinforcement or other physical modification of the Premises
(“Capital Expenditure”), Lessor and Lessee shall allocate the cost of such work as follows:



          (a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result
of the specific and unique use of the Premises by Lessee as compared with uses by tenants in
general, Lessee shall be fully responsible for the cost thereof, provided, however that if such
Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds
6 months’ Base Rent, Lessee may instead terminate this Lease unless Lessor notifies Lessee, in
writing, within 10 days after receipt of Lessee’s termination notice that Lessor has elected to
pay the difference between the actual cost thereof and the amount equal to 6 months’ Base Rent. If
Lessee elects termination, Lessee shall immediately cease the use of the Premises which requires
such Capital Expenditure and deliver to Lessor written notice specifying a termination date at
least 90 days thereafter. Such termination date shall, however, in no event be earlier than the
last day that Lessee could legally utilize the Premises without commencing such Capital
Expenditure.




          (b) If such Capital Expenditure is not the result of the specific and unique use of the
Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor and
Lessee shall allocate the cost of such Capital Expenditure as follows: Lessor shall advance the
funds necessary for such Capital Expenditure but Lessee shall be obligated to pay, each month
during the remainder of the term of this Lease, on the date on which Base Rent is due, an amount
equal to the product of multiplying Lessee’s share of the cost of such Capital Expenditure (the
percentage specified in Paragraph 1.6 by a fraction, the numerator of which is one, and the
denominator of which is 144 (ie. 1/144th of the cost per month). Lessee shall pay interest on the
unamortized balance of Lessee’s share at a rate that is commercially reasonable in the judgment of
Lessor’s accountants. Lessee may, however, prepay its obligation at any time. Provided, however,
that if such Capital Expenditure is required during the last 2 years of this Lease or if Lessor
reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall
have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee
notifies Lessor, in writing, within 10 days after receipt of
Lessor’s termination notice that
Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and fails to
tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same,
with Interest, from Rent until Lessor’s share of such costs have been fully paid. If Lessee is
unable to finance Lessor’s share, or if the balance of the Rent due and payable for the remainder
of this Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the
right to terminate this Lease upon 30 days written notice to Lessor.




          (c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to
apply only to nonvoluntary, unexpected, and new Applicable Requirements. If the Capital
Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use,
change in intensity of use, or modification to the Premises then, and in that event, Lessee shall
be fully responsible for the cost thereof, and Lessee shall not have any right to terminate this
Lease.




      2.4 Acknowledgements. Lessee acknowledges that: (a) Lessee has been advised by Lessor
and/or Brokers to satisfy itself with respect to the condition of the Premises (including but not
limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and
compliance with Applicable Requirements), and their suitability for Lessee’s intended use, (b)
Lessee has made such investigation as it deems necessary with reference to such matters and assumes
all responsibility therefor as the same relate to its occupancy of the Premises, and (c) neither
Lessor, Lessor’s agents, nor Brokers have made any oral or written representations or warranties
with respect to said matters other than as set forth in this Lease.
In addition, Lessor
acknowledges that: (i) Brokers have made no representations, promises or warranties concerning
Lessee’s ability to honor the Lease or suitability to occupy the
Premises, and (ii) it is Lessor’s
sole responsibility to investigate the financial capability and/or suitability of all proposed
tenants.




     2.5
Lessee as Prior Owner/Occupant. The warranties made by
Lessor in Paragraph 2 shall
be of no force or effect if immediately prior to the Start Date, Lessee was the owner or occupant
of the Premises. In such event, Lessee shall be responsible for any
necessary corrective work.



     2.6 Vehicle Parking. So long as Lessee is not in default, and subject to the Rules and
Regulations attached hereto, and as established by Lessor from time to time, Lessee shall be
entitled to rent and use the number of parking spaces specified in Paragraph 1.2(b) at no
additional charge the rental rate applicable from time to time for
monthly parking as set by
Lessor and/or its licensee.



          (a) If Lessee commits, permits or allows any of the prohibited activities described in the
Lease or the rules then in effect, then Lessor shall have the right, without notice, in addition to
such other rights and remedies that it may have, to remove or tow away the vehicle involved and
charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor.




          (b) The monthly rent per parking space specified in Paragraph 1.2(b) is subject to
change upon 30 days prior written notice to Lessee. The rent for
the parking is payable one month in advance prior to the first day of
each calendar month.




     2.7 Common Areas — Definition. The term “Common Areas” is defined as all areas and facilities
outside the Premises and within the exterior boundary line of the Project and interior utility
raceways and installations within the Premises that are provided and designated by the Lessor from
time to time for the general nonexclusive use of Lessor, Lessee and other tenants of the Project
and their respective employees, suppliers, shippers, customers, contractors and invitees,
including, but not limited to, common entrances, lobbies, corridors, stairwells, public restrooms,
elevators, parking areas, loading and unloading areas, trash areas, roadways, walkways, driveways
and landscaped areas.




	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	JD
	 

	 	 	 	 	 	 	 	 
	INITIALS

	 	 	 	 	 	 	 	INITIALS
	 
	 	 	 	 	 	 	 	 
	©1999
- AIR COMMERCIAL REAL ESTATE ASSOCIATION	 	FORM OF G-1-9/99E







PAGE 2 OF 13










 






          [ILLEGIBLE]

          (b) To close temporarily any of the Common Areas for maintenance purposes so long
as reasonable access to the Premises
remains available;




          (c) To designate other land outside the boundaries of the Project to be a part of
the Common Areas;




          (d) To add additional buildings and improvements to the Common Areas;




          (e) To use the Common Areas while engaged in making additional improvements, repairs or
alterations to the Project, or any portion thereof; and




          (f) To do and perform such other acts and make such other changes in, to or with respect to
the Common Areas and Project as Lessor may, in the exercise of sound business judgment, deem to be
appropriate, provided however that any of the items in Paragraph 2.10 do not significantly
adversely affect Lessee’s conduct of it’s business or have a significant adverse economics impact
on Lessee.




3. Term.




     3.1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.



     3.2
Early Possession. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay
Base Rent shall bo abated for the period of such early possession. All other terms of this Lease
(including but not limited to the obligations to pay Lessee’s Share of the Operating Expense
Increase) shall, however, bo in effect during such period. Any such early possession shall not
affect the Expiration Date.



     3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to
deliver possession of the Premises to Lessee by the Commencement Date. If, despite said efforts,
Lessor is unable to deliver possession by such date, Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease. Lessee shall not, however, be
obligated to pay Rent or perform its other obligations until Lessor delivers possession of the
Premises and any period of rent abatement that Lessee would otherwise have enjoyed shall run from
the date of delivery of possession and continue for a period equal to what Lessee would otherwise
have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of
Lessee. If possession is not delivered within 60 days after the Commencement Date, as the same may
be extended under the terms of any Work Letter executed by Parties, Lessee may, at its option, by
notice in writing within 10 days after the end of such 60 day period, cancel this Lease, in which
event the Parties shall be discharged from all obligations hereunder. If such written notice is
not received by Lessor within said 10 day period, Lessee’s right to cancel shall terminate. If
possession of the Premises is not delivered within 120 days after the Commencement Date, this Lease
shall terminate unless other agreements are reached between Lessor and Lessee, in writing.



     3.4 Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to
Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5).
Pending delivery of such evidence, Lessee shall be required to perform all of its obligations
under this Lease from and after the Start Date, including the payment of Rent, except as otherwise
provided herein, notwithstanding Lessor’s election to withhold possession pending receipt of such
evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or
concurrent with the Start Date, the Start Date shall occur
but Lessor may elect to withhold
possession until such conditions are satisfied.



4. Rent.




     4.1. Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this
Lease (except for the Security Deposit) are
deemed to be rent (“Rent”).



     4.2 Operating Expense Increase. Lessee shall pay to Lessor during the term hereof, in
addition to the Base Rent, Lessee’s Share of the amount by which all Operating Expenses for each
Comparison Year exceeds the amount of all Operating Expenses for the Base Year, such excess being
hereinafter referred to as the “Operating Expense Increase”, in accordance with the following
provisions:



          (a)
“Base Year” is as specified in Paragraph 1.9.




          (b) “Comparison Year” is defined as each calendar year during the term of this Lease
subsequent to the Base Year; provided, however, Lessee shall have no obligation to pay a share of
the Operating Expense Increase applicable to the first 12 months of the Lease Term (other than such
as are mandated by a governmental authority, as to which government mandated expenses Lessee shall
pay Lessee’s Share, notwithstanding they occur during the first twelve (12) months). Lessee’s
Share of the Operating Expense Increase for the first and last Comparison Years of the Lease Term
shall be prorated according to that portion of such Comparison Year as to which Lessee is
responsible for a share of such increase.




          (c) “Operating Expenses” include all costs incurred by Lessor relating to the ownership and
operation of the Project, calculated as if the Project was at least 95% occupied, including, but
not limited to, the following:




               (i) The operation, repair, and maintenance in neat, clean, safe, good order and condition, but
not
the replacement
(see subparagraph (g)), of the following:



                    (aa) The Common Areas, including their surfaces, coverings,
decorative items, carpets,
drapes and window coverings, and including parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, stairways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting facilities, building exteriors and roofs, fences and
gates;



                    (bb) All heating, air conditioning, plumbing, electrical systems,
life safety equipment,
communication
systems and other equipment used in common by, or for the benefit of, lessees or occupants of the
Project, including elevators and escalators, tenant directories, fire detection systems including
sprinkler system maintenance and repair.



               (ii) Trash disposal, janitorial and security services, pest control services, and the costs of
any
environmental
inspections;



               (iii) Any other service to be provided by Lessor that is elsewhere in this
Lease stated to be an “Operating Expense”;



               (iv) The cost of the premiums for the insurance policies maintained by Lessor
pursuant to paragraph 8 and any deductible portion of an insured loss concerning the Building or
the Common Areas;



               (v) The amount of the Real Property Taxes payable by Lessor pursuant to paragraph 10 with the
condition that Lessee shall only be liable for 50% of any
increase in the Property Taxes due to a change in
ownership of the Project;



               (vi) The cost of water, sewer, gas, electricity, and other publicly
mandated services not separately metered;



               (vii) Labor, salaries, and applicable fringe benefits and costs, materials, supplies and
tools, used in maintaining and/or cleaning the Project and accounting and management fees
attributable to the operation of the Project;



               (viii) The cost of any Capital Expenditure to the Building or the Project not covered under the
provisions of Paragraph 2.3 provided; however, that Lessor shall allocate the cost of any such Capital Expenditure over a 12
year period and Lessee shall not be required to pay more than Lessee’s Share of 1/144th of the
cost of such Capital Expenditure in any given month;



               (ix) Replacement of equipment or improvements that have a useful life for
accounting purposes of 5 years or less.



          (d) Any item of Operating Expense that is specifically attributable to the Premises, the
Building or to any other building in the Project or to the operation, repair and maintenance
thereof, shall be allocated entirely to such Premises, Building, or other building. However, any
such item that is not specifically attributable to the Building or to any other building or to the
operation, repair and maintenance thereof, shall be equitably allocated by Lessor to all buildings
in the Project.




          (e) The inclusion of the improvements, facilities and services set forth in Subparagraph
4.2(c) shall not be deemed to impose an obligation upon Lessor to either have said improvements or
facilities or to provide those services unless the Project already has the same, Lessor already
provides the services, or Lessor has agreed elsewhere in this Lease to provide the same or some of
them.





	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	JD
	 

	 	 	 	 	 	 	 	 
	INITIALS

	 	 	 	 	 	 	 	INITIALS
	 
	 	 	 	 	 	 	 	 
	©1999
- AIR COMMERCIAL REAL ESTATE ASSOCIATION	 	FORM OF G-1-9/99E







PAGE 3 OF 13








 






[ILLEGIBLE] on which it is due, without offset or deduction (except as specifically permitted in this
Lease). Rent for any period during the term hereof which is for
less than one full calendar month shall be prorated based upon the actual number of days of said
month. Payment of Rent shall be made to Lessor at its address stated herein or to such other
persons or place as Lessor may from time to time designate in writing. Acceptance of a payment
which is less than the amount then due shall not be a waiver of Lessor’s rights to the balance of
such Rent, regardless of Lessor’s endorsement of any check so stating. In the event that any
check, draft, or other instrument of payment given by Lessee to Lessor is dishonored for any
reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charge. Payments
will be applied first to accrued late charges and attorney’s fees, second to accrued interest,
then to Base Rent and Operating Expense Increase, and any remaining amount to any other
outstanding charges or costs.



5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit
as security for Lessee’s faithful performance of its obligations under this Lease. If Lessee fails
to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any
portion of said Security Deposit for the payment of any amount due Lessor to reimburse or
compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by
reason thereof. If Lessor uses or applies all or any portion of the Security Deposit, Lessee
shall within 10 days after written request therefor, deposit monies with Lessor sufficient to
restore said Security Deposit to the full amount required by this Lease. If the Base Rent
increases during the term of this Lease, Lessee shall, upon written request from Lessor, deposit
additional moneys with Lessor so that the total amount of the Security Deposit shall at all times
bear the same proportion to the increased Base Rent as the initial Security Deposit bore to the
initial Base Rent. Should the Agreed Use be amended to accommodate a material change in the
business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to
increase the Security Deposit to the extent necessary, in Lessor’s reasonable judgment, to account
for any increased wear and tear that the Premises may suffer as a
result thereof. If a change in
control of Lessee occurs during this Lease and following such change the financial condition of
Lessee is, in Lessor’s reasonable judgment, significantly reduced, Lessee shall deposit such
additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a
commercially reasonable level based on such change in financial
condition. Lessor shall not be
required to keep the Security Deposit separate from its general accounts. Within 14 days after the
expiration or termination of this Lease, if Lessor elects to apply the Security Deposit only to
unpaid Rent, and otherwise within 30 days after the Premises have been vacated pursuant to
Paragraph 7.4(c) below, Lessor shall return that portion of the Security Deposit not used or
applied by Lessor. No part of the Security Deposit shall be considered to be held in trust, to
bear interest or to be prepayment for any monies to be paid by Lessee under this Lease.




6. Use.




     6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal
use which is reasonably comparable thereto, and for no other purpose. Lessee shall not use or
permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance,
or that unreasonably disturbs occupants of or causes damage to neighboring premises or properties.
Lessor shall not unreasonably withhold or delay its consent to any written request for a
modification of the Agreed Use, so long as the same will not impair the structural integrity of the
improvements of the Building, will not adversely affect the mechanical, electrical, HVAC, and other
systems of the Building, and/or will not affect the exterior appearance of the Building. If Lessor
elects to withhold consent, Lessor shall within 7 days after such request give written
notification of same, which notice shall include an explanation of Lessor’s objections to the
change in the Agreed Use.



     6.2 Hazardous Substances.




          (a) Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease
shall mean any product, substance, or waste whose presence, use, manufacture, disposal,
transportation, or release, either by itself or in combination with other materials expected to be
on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a
basis for potential liability
of Lessor to any governmental agency or third party under any
applicable statute or common law theory. Hazardous Substances shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, and/or crude oil or any products,
by products or fractions
thereof. Lessee shall not engage in any activity in or on the Premises which constitutes a
Reportable Use of Hazardous Substances without the express prior written consent of Lessor, which
consent shall not be unreasonably withheld, and timely compliance (at
Lessee’s expense) with all
Applicable Requirements. “Reportable Use” shall mean (i) the installation or use of any above or
below ground storage tank, (ii) the generation, possession, storage, use, transportation, or
disposal of a Hazardous Substance that requires a permit from, or with respect to which a report,
notice, registration or business plan is required to be filed with, any governmental authority,
and/or (iii) the presence at the Premises of a Hazardous Substance with respect to which any
Applicable Requirements requires that a notice be given to persons entering or occupying the
Premises or neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and
customary materials reasonably required to be used in the normal course of the Agreed Use such as
ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning
materials, so long as such use is in compliance with all Applicable Requirements, is not a
Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of
contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may
condition its consent to any Reportable Use upon receiving such additional assurances as Lessor
reasonably deems necessary to protect itself, the public, the Premises and/or the environment
against damage, contamination, injury and/or liability, including, but not limited to, the
installation (and removal on or before Lease expiration or termination) of protective modifications
(such as concrete encasements) and/or increasing the Security Deposit.




          (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a
Hazardous Substance has come to be located in, on, under or about the Premises, other than as
caused or permitted by Lessor or as previously consented to by
Lessor, Lessee shall immediately
give written notice of such fact to Lessor, and provide Lessor with a copy of any report, notice,
claim or other documentation which it has concerning the presence of such Hazardous Substance.




          (c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled
or released in, on, under, or about the Premises (including through the plumbing or sanitary sewer
system) and shall promptly, at Lessee’s expense, comply with all Applicable Requirements and take
all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or
required, for the cleanup of any contamination of, and for the maintenance, security and/or
monitoring of the Premises or neighboring properties, that was caused
or materially
contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought
onto the Premises during the term of this Lease, by or for Lessee to the extent necessary to
rectify such environmental condition to the satisfaction of the applicable governmental agency., or
any third party.




          (d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents,
employees, lenders and ground Lessor, if any, harmless from and against any and all loss of rents
and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys’ and
consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises by
or for Lessee, or any third party (provided, however, that Lessee shall have no liability under
this Lease with respect to underground migration of any Hazardous Substance under the Premises from
areas outside of the Project not caused or contributed to by Lessee, or for hazardous substances
which exist on the Premises as of the Commencement Date or are brought on the Premises by Lessor
any third party). Lessee’s obligations shall include, but not be limited to, the effects of any
contamination or injury to person, property or the environment created or suffered by Lessee, and
the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive
the expiration or termination of this Lease. No termination, cancellation or release agreement
entered into by Lessor and Lessee shall release Lessee from its obligations under this Lease with
respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of
such agreement.




          (e) Lessor Indemnification. Lessor and its successors and assigns shall indemnify, defend,
reimburse and hold Lessee, its employees and lenders, harmless from and against any and all
environmental damages, including the cost of remediation, which
result from Hazardous Substances which existed on the Premises prior to Lessee’s occupancy or
which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees.
Lessor’s obligations, as and when required by the Applicable Requirements, shall include, but not
be limited to, the cost of





	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
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[ILLEGIBLE]
thereof within the time provided, this Lease shall terminate as of the date specified in
Lessor’s notice of termination.




     6.3 Lessee’s Compliance with Applicable Requirements. Except as otherwise provided in this
Lease, Lessee shall, at Lessee’s sole expense, fully, diligently and in a timely manner, materially
comply with all Applicable Requirements, the requirements of any applicable fire insurance
underwriter or rating bureau, and the recommendations of Lessor’s engineers and/or consultants
which relate in any manner to the Premises, without regard to whether said requirements are now in
effect or become effective after the Start Date. Lessee shall, within 10 days after receipt of
Lessor’s written request, provide Lessor with copies of all permits and other documents, and other
information evidencing Lessee’s compliance with any Applicable Requirements specified by Lessor,
and shall immediately upon receipt, notify Lessor in writing (with copies of any documents
involved) of any threatened or actual claim, notice, citation, warning, complaint or report
pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable
Requirements.



     6.4
Inspection; Compliance. Lessor and Lessor’s
“Lender” (as defined in Paragraph 30) and
consultants shall have the right to enter into Premises at any time, in the case of an emergency,
and otherwise at reasonable times upon reasonable prior notice, for the purpose of inspecting the
condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any
such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a
Hazardous Substance Condition (see paragraph 9.1e) is found to exist or be imminent, or the
inspection is requested or ordered by a governmental authority. In such case, Lessee shall upon
request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably
related to the violation or contamination.



7. Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations.




     7.1 Lessee’s Obligations. Notwithstanding Lessor’s obligation to keep the Premises in good
condition and repair, Lessee shall be responsible for payment of the cost thereof to Lessor as
additional rent for that portion of the cost of any maintenance and repair of the Premises, or any
equipment (wherever located) that serves only Lessee or the Premises, to the extent such cost is
attributable to causes beyond normal wear and tear. Lessee shall be responsible for the cost of
painting, repairing or replacing wall coverings, and to repair or replace any improvements with the
Premises. Lessor may, at its option, upon reasonable notice, elect to have Lessee perform any
particular such maintenance or repairs the cost of which is otherwise Lessee’s responsibility
hereunder.



     7.2 Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3
(Compliance), 4.2 (Operating Expenses), 6 (Use), 7.1 (Lessee’s Obligations), 9 (Damage or
Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant to Paragraph 4.2,
shall keep in good order, condition and repair the foundations, concrete subflooring, exterior
walls, structural condition of interior bearing walls, exterior roof, fire sprinkler system, fire
alarm and/or smoke detection systems, fire hydrants, and the Common Areas. Lessee expressly waives
the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the
terms of this Lease.



     7.3 Utility Installations; Trade Fixtures; Alterations.



          (a) Definitions. The term “Utility Installations” refers to all floor and window coverings,
air lines, vacuum lines, power panels, electrical distribution, security and fire protection
systems, communication cabling, lighting fixtures, HVAC equipment, and plumbing in or on the
Premises. The term “Trade Fixtures” shall mean Lessee’s machinery and equipment that can be
removed without doing material damage to the Premises. The term “Alterations” shall mean any
modification of the improvements, other than Utility Installations or Trade Fixtures, whether by
addition or deletion. “Lessee Owned Alterations and/or Utility Installations” are defined as
Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant
to Paragraph 7.4(a).




          (b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises
without Lessor’s prior written consent, which shall not be unreasonably withheld, conditioned or
delayed. Lessee may, however, make non-structural Utility Installations or Alterations to the
interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as
long as they are not visible from the outside, do not involve puncturing, relocating or removing
the roof, ceilings, floors or any existing walls, will not affect the electrical, plumbing, HVAC,
and/or life safety systems, and the cumulative cost thereof during this Lease as extended does not
exceed $10,000.00 2000. Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written approval of Lessor.
Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor
chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire
to make and which require the consent of the Lessor shall be presented to Lessor in written form
with detailed plans. Consent shall be deemed conditioned upon Lessee’s: (i) acquiring all
applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the
plans and specifications prior to commencement of the work, and (iii) compliance with all
conditions of said permits and other Applicable Requirements in a prompt and expeditious manner.
Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and
sufficient materials. Lessee shall promptly upon completion furnish
Lessor with asbuilt plans and
specifications. For work which costs an amount in excess of one month’s Base Rent, Lessor may
condition its consent upon Lessee providing a lien and completion bond in an amount equal to 150%
of the estimated cost of such Alteration or Utility Installation and/or upon Lessee’s posting an
additional Security Deposit with Lessor.




          (c) Liens; Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or
alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or
may be secured by any mechanic’s or materialmen’s lien against the Premises or any interest
therein. Lessee shall give Lessor not less than 10 days notice prior to the commencement of any
work in, on or about the Premises, and Lessor shall have the right to post notices of
non-responsibility. If Lessee shall contest the validity of any such lien, claim or demand, then
Lessee shall, at its sole expense defend and protect itself, Lessor and the Premises against the
same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the
enforcement thereof. If Lessor shall require, Lessee shall furnish a surety bond in an amount equal
to 150% of the amount of such contested lien, claim or demand, indemnifying Lessor against
liability for the same. If Lessor elects to participate in any such action, Lessee shall pay
Lessor’s attorneys’ fees and costs.




     7.4 Ownership; Removal; Surrender; and Restoration.



          (a) Ownership. Subject to Lessor’s right to require removal or elect ownership as hereinafter
provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee,
but considered a part of the Premises. Lessor may prior to the Expiration Date of this lease,
at any time, elect in writing to be the owner of all or any specified part of the Lessee Owned
Alterations and Utility Installations. Unless otherwise instructed per paragraph 7.4(b) hereof,
all Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of
this Lease, become the property of Lessor and be surrendered by Lessee with the Premises.




          (b) Removal. By delivery to Lessee of written notice from Lessor at the time of Installation
or prior to Lease Expiration not earlier than 90 and not later than 30 days prior to the
end of the term of this Lease, Lessor may require that any or all Lessee Owned Alterations or
Utility Installations be removed by the expiration or termination of this Lease. Lessor may
require the removal at any time of all or any part of any Lessee Owned Alterations or Utility
Installations made without the required consent.




          (c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any
earlier termination date, with all of the improvements, parts and surfaces thereof clean and free
of debris, and in good operating order, condition and state of repair, ordinary wear and tear
excepted. “Ordinary wear and tear” shall not include any damage or deterioration that would have
been prevented by good maintenance practice. Notwithstanding the foregoing, if this Lease is for 12
months or less, then Lessee shall surrender the Premises in the same
condition as delivered to Lessee on the Start Date with NO allowance for
ordinary wear and tear. Lessee
shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures,
Lessee owned Alterations and/or Utility Installations, furnishings, and equipment as well as the
removal of any storage tank installed by or for Lessee. Lessee shall also completely remove from
the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any
third party (except Hazardous Substances which were deposited via underground migration from areas
outside of the Project or are




	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
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[ILLEGIBLE]
shall include coverage for liability assumed under this Lease as an “insured contract” for
the performance of Lessee’s indemnity obligations under this Lease. The limits of said
insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation
hereunder. All insurance carried by Lessee shall be primary to and not contributory with any
similar insurance carried by Lessor, whose insurance shall be considered excess insurance only.




          (b) Carried by Lessor. Lessor shall maintain liability insurance as described in Paragraph
8.2(a), in addition to, and not in lieu of, the insurance required to be maintained by Lessee.
Lessee shall not be named as an additional insured therein.




     8.3 Property Insurance — Building, Improvements and Rental Value.



          (a) Building and Improvements. Lessor shall obtain and keep in force a policy or
policies of insurance in the name of Lessor, with loss payable to Lessor, any ground-lessor, and to
any Lender insuring loss or damage to the Building and/or Project. The amount of such insurance
shall be equal to the full replacement cost of the Building and/or Project, as the same shall exist
from time to time, or the amount required by any Lender, but in no event more than the commercially
reasonable and available insurable value thereof. Lessee Owned Alterations and Utility
Installations, Trade Fixtures, and Lessee’s personal property shall be insured by Lessee under
Paragraph 8.4. If the coverage is available and commercially appropriate, such policy or policies
shall insure against all risks of direct physical loss or damage (except the perils of flood and/or
earthquake unless required by a Lender), including coverage for debris removal and the enforcement
of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement
of any portion of the Premises as the result of a covered loss. Said policy or policies shall also
contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and
inflation guard protection causing an increase in the annual property insurance coverage amount by
a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban
Consumers for the city nearest to where the Premises are located. If such insurance coverage has a
deductible clause, the deductible amount shall not exceed
$1,000 5,000.00 per occurrence.




          (b) Rental Value. Lessor shall also obtain and keep in force a policy or policies in the name
of Lessor with loss payable to Lessor and any Lender, insuring the loss of the full Rent for one
year with an extended period of indemnity for an additional 180 days (“Rental Value Insurance”).
Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and
the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable
by Lessee, for the next 12 month period.




          (c) Adjacent Premises. Lessee shall pay for any increase in the premiums for the property
insurance of the Building and for the Common Areas or other buildings in the Project if said
increase is caused by Lessee’s acts, omissions, use or occupancy of the Premises.




          (d) Lessee’s Improvements. Since Lessor is the Insuring Party, Lessor shall not be required to
insure Lessee Owned Alterations and Utility Installations unless the item in question has become
the property of Lessor under the terms of this Lease.




     8.4 Lessee’s Property; Business Interruption Insurance.



          (a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of
Lessee’s personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations.
Such insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000
per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of
personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee
shall provide Lessor with written evidence that such insurance is in force.




          (b) Business Interruption. Lessee shall obtain and maintain loss of income and extra expense
insurance in amounts as will reimburse Lessee for direct or indirect loss of earnings attributable
to all perils commonly insured against by prudent lessees in the business of Lessee or attributable
to prevention of access to the Premises as a result of such perils.




          (c) No Representation of Adequate Coverage. Lessor makes no representation that the limits or
forms of coverage of insurance specified herein are adequate to cover Lessee’s property, business
operations or obligations, under this Lease.




     8.5 Insurance Policies. Insurance required herein shall be by companies duly licensed or
admitted to transact business in the state where the Premises are located, and maintaining during
the policy term a “General Policyholders Rating” of at least B+, V, as set forth in the most
current issue of “Best’s Insurance Guide”, or such other rating as may be required by a Lender.
Lessee shall not do or permit to be done anything which invalidates the required insurance
policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of
such insurance or certificates evidencing the existence and amounts of the required insurance. No
such policy shall be cancelable or subject to modification except after 30 days prior written
notice to Lessor. Lessee shall, at least 30 days prior to the expiration of such policies, furnish
Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or Lessor may
order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee
to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of
the remaining term of this Lease, whichever is less. If either Party shall fail to procure and
maintain the insurance required to be carried by it, the other Party may, but shall not be required
to, procure and maintain the same.



     8.6 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor
each hereby release and relieve the other, and waive their entire right to recover damages against
the other, for loss of or damage to its property arising out of or incident to the perils required
to be insured against herein. The effect of such releases and waivers is not limited by the amount
of insurance carried or required, or by any deductibles applicable hereto. The Parties agree to
have their respective property damage insurance carriers waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not
invalidated thereby.



     8.7 Indemnity. Except for Lessor’s or Lessor’s employees and agents, gross negligence or
willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor
and its agents, Lessor’s master or ground lessor, partners and Lenders, from and against any and
all claims, loss of rents and/or damages, liens, judgments, penalties, reasonable attorneys’ and
consultants’ fees, expenses and/or liabilities arising out of, involving, or in connection with,
the use and/or occupancy of the Premises by Lessee. If any action or proceeding is brought against
Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at
Lessee’s expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with
Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or
indemnified. Except for Lessee’s active negligence or willful
misconduct, Lessor shall indemnify,
protect, defend and hold harmless Lessee from and against any and all
claims, damages, liens,
judgments, penalties, reasoanble attorney’s and consultant’s fees, expenses and/or liabilities
arising out of, involving or in connection with Lessee’s use of the Common Areas or the other areas
of the Project.



     8.8 Exemption of Lessor from Liability. Except for lessor’s and lessor’s employees and
agents gross negligent actions. Lessor shall not be liable for injury or damage to the person or
goods, wares, merchandise or other property of Lessee, Lessee’s employees, contractors, invitees,
customers, or any other person in or about the Premises, whether such damage or injury is caused by
or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or
lighting fixtures, or from any other cause, whether the said injury or damage results from
conditions arising upon the Premises or upon other portions of the Building, or from other sources
or places. Other than due to lessor’s or Lessor’s employees or agents’ gross negligence, Lessor
shall not be liable for any damages arising from any act or neglect of any other tenant of Lessor
nor from the failure of Lessor to enforce the provisions of any other lease in the Project.
Notwithstanding Lessor’s negligence or breach of this Lease, Lessor shall under no circumstances be
liable for injury to Lessee’s business or for any loss of income or profit therefrom.



9. Damage or Destruction.




     9.1 Definitions.



          (a) “Premises Partial Damage” shall mean damage or destruction to the
improvements on the Premises, other than Lessee




	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
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destruction the total cost to repair of which is $5,000 or less, and, in such event, Lessor
shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that
purpose. Notwithstanding the foregoing, if the required insurance was not in force or the
insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly
contribute the shortage in proceeds as and when required to complete said repairs. In the event,
however, such shortage was due to the fact that, by reason of the unique nature of the
improvements, full replacement cost insurance coverage was not commercially reasonable and
available, Lessor shall have no obligation to pay for the shortage in insurance proceeds or to
fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to
cover same, or adequate assurance thereof, within 10 days following receipt of written notice of
such shortage and request therefor. If Lessor receives said funds or adequate assurance thereof
within said 10 day period, the party responsible for making the repairs shall complete them as
soon as reasonably possible and this Lease shall remain in full force and effect. If such funds or
assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10
days thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full force and effect,
or (ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled to
reimbursement of any funds contributed by Lessee to repair any such damage or destruction.
Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3,
notwithstanding that there may be some insurance coverage, but the net proceeds of any such
insurance shall be made available for the repairs if made by either Party.




     9.3 Partial Damage — Uninsured Loss. If a Premises Partial Damage that is not an Insured
Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall
make the repairs at Lessee’s expense), Lessor may either: (i) repair such damage as soon as
reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and
effect, or (ii) terminate this Lease by giving written notice to Lessee within 30 days after
receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be
effective 60 days following the date of such notice. In the event Lessor elects to terminate this
Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give
written notice to Lessor of Lessee’s commitment to pay for the repair of such damage without
reimbursement from Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance
thereof within 30 days after making such commitment. In such event this Lease shall continue in
full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible
after the required funds are available. If Lessee does not make the required commitment, this Lease
shall terminate as of the date specified in the termination notice.



     9.4 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total
Destruction occurs, this Lease shall terminate 60 days following such Destruction. If the damage
or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall
have the right to recover Lessor’s damages from Lessee, except as provided in Paragraph 8.6.



     9.5 Damage Near End of Term. If at any time during the last 6 months of this Lease there is
damage for which the cost to repair exceeds one month’s Base Rent, whether or not an Insured Loss,
Lessor may terminate this Lease effective 60 days following the date of occurrence of such damage
by giving a written termination notice to Lessee within 30 days after the date of occurrence of
such damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a)
exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or
adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date
which is 10 days after Lessee’s receipt of Lessor’s written notice purporting to terminate this
Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises
such option during such period and provides Lessor with funds (or adequate assurance thereof) to
cover any shortage in insurance proceeds, Lessor shall, at Lessor’s commercially reasonable
expense, repair such damage as soon as reasonably possible and this Lease shall continue in full
force and effect. If Lessee fails to exercise such option and provide such funds or assurance
during such period, then this Lease shall terminate on the date specified in the termination notice
and Lessee’s option shall be extinguished.



     9.6 Abatement of Rent; Lessee’s Remedies.



          (a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a
Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent
payable by Lessee for the period required for the repair, remediation or restoration of such damage
shall be abated in proportion to the degree to which Lessee’s use of the Premises is impaired, but
not to exceed the proceeds received from the Rental Value insurance. All other obligations of
Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such
damage, destruction, remediation, repair or restoration except as provided herein.




          (b) Remedies. If Lessor shall be obligated to repair or restore the Premises and does not
commence, in a substantial and meaningful way, such repair or restoration within 90 days after such
obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or
restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of
Lessee’s election to terminate this Lease on a date not less than 60 days following the giving of
such notice. If Lessee gives such notice and such repair or restoration is not commenced within 30
days thereafter, this Lease shall terminate as of the date specified in said notice. If the repair
or restoration is commenced within such 30 days, this Lease shall continue in full force and
effect. “Commence” shall mean either the unconditional authorization of the preparation of the
required plans, or the beginning of the actual work on the Premises, whichever first occurs.




     9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph
6.2(g) or Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent and any
other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so
much of Lessee’s Security Deposit as has not been, or is not then required to be, used by Lessor.



     9.8 Waive Statutes. Lessor and Lessee agree that the terms of this Lease shall govern the
effect of any damage to or destruction of the Premises with respect to the termination of this
Lease and hereby waive the provisions of any present or future statute to the extent inconsistent
herewith.



10. Real Property Taxes.




     10.1 Definitions. As used herein, the term “Real Property Taxes” shall include any form of
assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other
than inheritance, personal income or estate taxes); improvement bond; and/or license fee imposed
upon or levied against any legal or equitable interest of Lessor in the Project, Lessor’s right to
other income therefrom, and/or Lessor’s business of leasing, by any authority having the direct or
indirect power to tax and where the funds are generated with reference to the Project address and
where the proceeds so generated are to be applied by the city, county or other local taxing
authority of a jurisdiction within which the Project is located. “Real Property Taxes” shall also
include any tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of
events occurring during the term of this Lease, including but not limited to, a change in the
ownership of the Project, with the condition that Lessee shall only
be liable for 50% of any
increase in the Property Taxes based on a change in ownership of the Project, or any portion thereof
or a change in the improvements thereon.



     10.2 Payment of Taxes. Except as otherwise provided in Paragraph 10.3, Lessor shall pay the
Real Property Taxes applicable to the Project, and said payments shall be included in the
calculation of Operating Expenses in accordance with the provisions of Paragraph 4.2.



     10.3 Additional Improvements. Operating Expenses shall not include Real Property Taxes
specified in the tax assessor’s records and work sheets as being caused by additional improvements
placed upon the Project by other lessees or by Lessor for the exclusive enjoyment of such other
lessees. Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the time
Operating Expenses are payable under Paragraph 4.2, the entirety of any increase in Real Property
Taxes if assessed solely by reason of Alterations, Trade Fixtures or Utility Installations placed
upon the Premises by Lessee or at Lessee’s request.



     10.4 Joint Assessment. If the Building is not separately assessed, Real Property Taxes
allocated to the Building shall be an equitable proportion of the Real Property Taxes for all of
the land and improvements included within the tax parcel assessed, such proportion to be determined
by Lessor from the respective valuations assigned in the assessor’s work sheets or such other
information as may be reasonably available. Lessor’s



	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
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     11.4 Excess Usage by Lessee. Lessee shall not make connection to the utilities except by
or through existing outlets and shall not install or use machinery or equipment in or about the
Premises that uses excess water, lighting or power, or suffer or permit any act that causes extra
burden upon the utilities or services, including but not limited to security and trash services,
over standard office usage for the Project. Lessor shall require Lessee to reimburse Lessor for
any excess expenses or costs that may arise out of a breach of this subparagraph by Lessee. Lessor
may, in its sole discretion, install at Lessee’s expense supplemental equipment and/or separate
metering applicable to Lessee’s excess usage or loading.




     11.5
Interruptions. There shall be no abatement of rent and Lessor shall not be liable in any
respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or
service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond
Lessor’s reasonable control or in cooperation with governmental request or directions.



12. Assignment and Subletting.




     12.1 Lessor’s Consent Required.



          (a) Except as otherwise set forth herein, Lessee shall not voluntarily or by operation of law
assign, transfer, mortgage or encumber (collectively, “assign or assignment”) or sublet all or any
part of Lessee’s interest in this Lease or in the Premises without Lessor’s prior written consent.




          (b) Unless Lessee is a corporation and its stock is publicly traded on a national stock
exchange, a change in the control of Lessee shall constitute an assignment requiring consent.
Except for an initial public offering of the shares of Lessee,
T the transfer, on a cumulative
basis, of 25 40% or more of the voting control of Lessee shall constitute a change in control for
this purpose.




          (c) The involvement of Lessee or its assets in any transaction, or series of transactions (by
way of merger, sale, acquisition, financing, transfer, leveraged buyout or otherwise), whether or
not a formal assignment or hypothecation of this Lease or Lessee’s assets occurs, which results or
will result in a material adverse effect on Lessee’s financial condition as it exists at the date
of execution of this Lease hereunder, reduction of the Net Worth of Lessee by an amount greater
than 25% of such Net Worth as it was represented at the time of the execution of this Lease or at
the time of the most recent assignment to which Lessor has consented, or as it exists
immediately prior to said transaction or transactions constituting such reduction, whichever was or
is greater, shall be considered an assignment of this Lease to which Lessor may withhold its
consent. “Net Worth of Lessee” shall mean the
net worth of Lessee (excluding any
guarantors) established under generally accepted accounting principles.




          (d) An assignment or subletting without consent shall, at Lessor’s option, be a Default
curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any
notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a
noncurable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon 30 days written
notice, increase the monthly Base Rent to 110% of the Base Rent then in effect. Further, in the
event of such Breach and rental adjustment, (i) the purchase price of any option to purchase the
Premises hold by Lessee shall be subject to similar adjustment to 110% of the price
previously in effect, and (ii) all fixed and non-fixed rental
adjustments scheduled during
the remainder of the Lease term shall be increased to 110% of the
scheduled adjusted rent.




          (e) Lessee’s remedy for any breach of Paragraph 12.1 by Lessor shall be limited to
compensatory damages and/or injunctive relief.




     12.2 Terms and Conditions Applicable to Assignment and Subletting.



          (a) Regardless
of Lessor’s consent, where such consent is required, no assignment or subletting
shall: (i) be effective without the express written assumption by such assignee or sublessee of
the obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, or
(iii) alter the primary liability of Lessee for the payment of Rent or for the performance of any
other obligations to be performed by Lessee.




          (b) Lessor may accept Rent or performance of Lessee’s obligations from any person other than
Lessee pending approval or disapproval of an assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver
or estoppel of Lessor’s right to exercise its remedies for Lessee’s Default or Breach.




          (c) Lessor’s consent to any assignment or subletting shall not constitute a consent to
any subsequent assignment or subletting.




          (d) In the event of any Default or Breach by Lessee, Lessor may proceed directly against
Lessee, any Guarantors or anyone else responsible for the performance of Lessee’s obligations under
this Lease, including any assignee or sublessee, without first exhausting Lessor’s remedies against
any other person or entity responsible therefore to Lessor, or any security held by Lessor.




          (e) Each request for consent to an assignment or subletting shall be in writing, accompanied
by information relevant to Lessor’s determination as to the financial and operational
responsibility and appropriateness of the proposed assignee or sublessee, including but not limited
to the intended use and/or required modification of the Premises, if any. Lessee agrees to provide
Lessor with such other or additional information and/or documentation as may be reasonably
requested. (See also Paragraph 36)




          (f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such
assignment or entering into such sublease, be deemed to have assumed and agreed to conform and
comply with each and every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or sublease, other than such obligations as
are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has
specifically consented to in writing.




          (g) Lessor’s consent to any assignment or subletting shall not transfer to the assignee or
sublessee any Option granted to the original Lessee by this Lease unless such transfer is
specifically consented to by Lessor in writing. (See Paragraph 39.2)




     12.3 Additional Terms and Conditions Applicable to Subletting. The following terms and
conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be
deemed included in all subleases under this Lease whether or not expressly incorporated therein:



          (a) Lessee hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent payable
on any sublease, and Lessor may collect such Rent and apply same toward Lessee’s obligations under
this Lease; provided, however, that until a Breach shall occur in the performance of Lessee’s
obligations, Lessee may collect said Rent. Lessor shall not, by reason of the foregoing or any
assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the
sublessee for any failure of Lessee to perform and comply with any of Lessee’s obligations to such
sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a
written notice from Lessor stating that a Breach exists in the performance of Lessee’s obligations
under this Lease, to pay to Lessor all Rent due and to become due under the sublease, Sublessee
shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any
obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from
Lessee to the contrary.




          (b) In the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn
to Lessor, in which event Lessor shall undertake the obligations of the sublessor under such
sublease from the time of the exercise of said option to the expiration of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor.




          (c) Any
matter requiring the consent of the sublessor Lessor under a sublease
this Lease shall
also require the consent of Lessor under any sublease.




          (d) No sublessee shall further assign or sublet all or any part of the Premises without
Lessor’s prior written consent if such consent is required hereunder.




          (e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee,
who shall have the right to cure the Default of Lessee within the grace period, if any, specified
in such notice. The sublessee shall have a right of reimbursement and offset from and against
Lessee for any such Defaults cured by the sublessee.




13. Default; Breach; Remedies.



     13.1 Default; Breach. A “Default” is defined as a failure by the Lessee to comply
with or perform any of the terms, covenants,



	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
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the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Lessee’s assets located at
the Premises or of Lessee’s interest in this Lease, where possession is not restored to Lessee
within 30 days; or (iv) the attachment, execution or other
judicial seizure of substantially all of Lessee’s assets located at the Premises or of
Lessee’s interest in this Lease, where such seizure is not discharged within 30 days; provided,
however, in the event that any provision of this subparagraph (e) is contrary to any applicable
law, such provision shall be of no force or effect, and not affect the validity of the remaining
provisions.




          (f) The discovery that any financial statement of Lessee or of any Guarantor given to
Lessor was materially false.




          (g) If the performance of Lessee’s obligations under this Lease is guaranteed: (i) the death
of a Guarantor, (ii) the termination of a Guarantor’s liability with respect to this Lease other
than in accordance with the terms of such guaranty, (iii) a
Guarantor’s becoming insolvent or the
subject of a bankruptcy filing, (iv) a Guarantor’s refusal to honor the guaranty, or (v) a
Guarantor’s breach of its guaranty obligation on an anticipatory basis, and Lessee’s failure,
within 60 days following written notice of any such event, to provide written alternative assurance
or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the
combined financial resources of Lessee and the Guarantors that existed at the time of
execution of this Lease.




     13.2
Remedies. If Lessee fails to perform any of its affirmative duties or obligations, within
10 days after written notice (or in case of an emergency, without notice), Lessor may, at its
option, perform such duty or obligation on Lessee’s behalf, including but not limited to the
obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or
approvals. The costs and expenses of any such performance by Lessor shall be due and payable by
Lessee upon receipt of invoice therefor. If any check given to Lessor by Lessee shall not be
honored by the bank upon which it is drawn, Lessor, at its option, may require all future payments
to be made by Lessee to be by cashier’s check. In the event of a Breach, Lessor may, with or
without further notice or demand, and without limiting Lessor in the exercise of any right or
remedy which Lessor may have by reason of such Breach:



          (a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case
this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned at
the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent
which would have been earned after termination until the time of award exceeds the amount of such
rental loss that the Lessee proves could have been reasonably avoided; (iii) 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 rental loss that the Lessee proves could be reasonably avoided; and (iv)
any other amount necessary to compensate Lessor for all the detriment proximately caused by the
Lessee’s failure to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary renovation and alteration of
the Premises, reasonable attorneys’ fees, and that portion of any leasing commission paid by Lessor
in connection with this Lease applicable to the unexpired term of this Lease. The worth at the
time of award of the amount referred to in provision (iii) of the immediately preceding sentence
shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of
the District within which the Premises are located at the time of award plus one percent. Efforts
by Lessor to mitigate damages caused by Lessee’s Breach of this Lease shall not waive Lessor’s
right to recover damages under Paragraph 12. If termination of this Lease is obtained through the
provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding
any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover
all or any part thereof in a separate suit. If a notice and grace period required under Paragraph
13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee
under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1.
In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer
statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of
the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease
entitling Lessor to the remedies provided for in this Lease and/or by said statute.




          (b) Continue the Lease and Lessee’s right to possession and recover the Rent as it becomes
due, in which event Lessee may sublet or assign, subject only to reasonable limitations. Acts of
maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor’s
interests, shall not constitute a termination of the Lessee’s right to possession.




          (c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of
the state wherein the Premises are located. The expiration or termination of this Lease and/or the
termination of Lessee’s right to possession shall not relieve Lessee from liability under any
indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by
reason of Lessee’s occupancy of the Premises.




     13.3 Inducement Recapture. Any agreement for free or abated rent or other charges, or for the
giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration
for Lessee’s entering into this Lease, all of which concessions are hereinafter referred to as
“Inducement Provisions”, shall be deemed conditioned upon Lessee’s full and faithful performance of
all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any
such Inducement Provision shall automatically be deemed deleted from this Lease and of no further
force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated,
given or paid by Lessor under such an Inducement Provision shall be immediately due and payable by
Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not
be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in
writing by Lessor at the time of such acceptance.



     13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will
cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly,
if any Rent shall not be received by Lessor within 5 days after such amount shall be due, then,
without any requirement for notice to Lessee, Lessee shall pay to Lessor a one-time late charge
equal to 10% of each such overdue amount or $100, whichever is greater, lessor shall waive the
first such late charge during the initial Term of this lease. The parties hereby agree that
such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason
of such late payment. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee’s Default or Breach with respect to such overdue amount, nor prevent the exercise
of any of the other rights and remedies granted hereunder. In the event that a late charge is
payable hereunder, whether or not collected, for 3 consecutive installments of Base Rent, then
notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor’s option,
become due and payable quarterly in advance.



     13.5
Interest. Any monetary payment due Lessor hereunder, other than late charges, not
received by Lessor, when due as to scheduled payments (such as Base Rent) or within 30 days
following the date on which it was due for nonscheduled payment, shall bear interest from the date
when due, as to scheduled payments, or the 31st day after it was due as to nonscheduled payments.
The interest (“Interest”) charged shall be computed at the rate of 10% per annum but shall not
exceed the maximum rate allowed by law. Interest is payable in addition to the potential late
charge provided for in Paragraph 13.4.



     13.6 Breach by Lessor.



          (a) Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor
fails within a reasonable time to perform an obligation required to be performed by Lessor. For
purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt
by Lessor, and any Lender whose name and address shall have been furnished Lessee in writing for
such purpose, of written notice specifying wherein such obligation of Lessor has not been
performed; provided, however, that if the nature of Lessor’s obligation is such that more than 30
days are reasonably required for its performance, then Lessor shall not be in breach if performance
is commenced within such 30 day period and thereafter diligently pursued to completion.




          (b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor
Lender cures said breach within 30 days




	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
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15.1
Additional Commission. In addition to the payments owed pursuant to Paragraph 1.10
above, and unless Lessor and the Brokers otherwise agree in writing, Lessor agrees that: (a) if
Lessee exercises any Option, (b) if Lessee acquires from Lessor
any rights to the Promises or other
premises owned by Lessor and located within the Project, (c) if Lessee remains in possession of the
Premises, with the consent of Lessor, after the expiration of this Lease, or (d) if Base Rent is
increased, whether by agreement or operation of an escalation clause
herein, then, Lessor shall pay Brokers a fee in accordance with the
schedule of the Brokers in effect at the time of the execution of
this Lease.


     15.2 Assumption of Obligations. Any buyer or transferee of Lessor’s interest in this Lease
shall be deemed to have assumed Lessor’s obligation hereunder. Brokers shall be third party
beneficiaries of the provisions of Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to
Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such
amounts shall accrue Interest. In addition, if Lessor fails to pay any amounts to Lessee’s Broker
when due, Lessee’s Broker may send written notice to Lessor and Lessee of such failure and if
Lessor fails to pay such amounts within 10 days after said notice, Lessee shall pay said monies to
its Broker and offset such amounts against Rent. In addition, Lessee’s Broker shall be deemed to be
a third party beneficiary of any commission agreement entered into by and/or between Lessor and
Lessor’s Broker for the limited purpose of collecting any brokerage fee owed.



     15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent
and warrant to the other that it has had no dealings with any person, firm, broker or finder (other
than the Brokers, if any) in connection with this Lease, and that no one other than said named
Brokers is entitled to any commission or finder’s fee in connection herewith. Lessee and Lessor do
each hereby agree to indemnify, protect, defend and hold the other harmless from and against
liability for compensation or charges which may be claimed by any such unnamed broker, finder or
other similar party by reason of any dealings or actions of the indemnifying Party, including any
costs, expenses, attorneys’ fees reasonably incurred with respect thereto.



16. Estoppel Certificates.




          (a) Each Party (as “Responding Party”) shall within 10 days after written notice from the
other Party (the “Requesting Party”) execute, acknowledge and deliver to the Requesting Party a
statement in writing in form similar to the then most current “Estoppel Certificate” form published
by the AIRCommercial Real Estate Association, plus such additional information, confirmation and/or
statements as may be reasonably requested by the Requesting Party.



          (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within
such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that: (i) the
Lease is in full force and effect without modification except as may be represented by the
Requesting Party, (ii) there are no uncured defaults In the Requesting Party’s performance, and
(iii) if Lessor is the Requesting Party, not more than one month’s rent has been paid in advance.
Prospective purchasers and encumbrancers may rely upon the Requesting Party’s Estoppel Certificate,
and the Responding Party shall be estopped from denying the truth of the facts contained in said
Certificate.



          (c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee
and all Guarantors shall deliver to any potential lender or purchaser designated by Lessor such
financial statements as may be reasonably required by such lender or purchaser, including but not
limited to Lessee’s financial statements for the past 3 years. All such financial statements shall
be received by Lessor and such lender or purchaser in confidence and shall be used only for the
purposes herein set forth. Lessor shall keep all such financial information confidential and shall
use commercially reasonable efforts to request any lender or purchaser keep all such financial
information confidential.


17.
Definition of Lessor. The term “Lessor” as used herein shall mean the owner or owners at the
time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee’s
interest in the prior lease. In the event of a transfer of Lessor’s title or interest in the
Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit)
any unused Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such transfer
or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be
relieved of all liability with respect to the obligations and/or covenants under this Lease
thereafter to be performed by the Lessor. Subject to the foregoing,
the obligations and/or covenants
in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined.



18. Severability. The invalidity of any provision of this Lease, as determined by a court of
competent jurisdiction, shall in no way affect the validity of any other provision hereof.



19.
Days. Unless otherwise specifically indicated to the contrary,
the word “days” as used in this
Lease shall mean and refer to calendar days.



20. Limitation on Liability. The obligations of Lessor under this Lease shall not constitute
personal obligations of Lessor or its partners, members, directors, officers or shareholders, and
Lessee shall look to the Project, and to no other assets of Lessor, for the satisfaction of any
liability of Lessor with respect to this Lease, and shall not seek recourse against Lessor’s
partners, members, directors, officers or shareholders, or any of their personal assets for such
satisfaction.



21. Time of Essence. Time is of the essence with respect to the performance of all obligations to
be performed or observed by the Parties under this Lease.



22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the
Parties with respect to any matter mentioned herein, and no other prior or contemporaneous
agreement or understanding shall be effective. Lessor and Lessee each represents and warrants to
the Brokers that it has made, and is relying solely upon, its own investigation as to the nature,
quality, character and financial responsibility of the other Party to this Lease and as to the use,
nature, quality and character of the Premises. Brokers have no responsibility with respect thereto
or with respect to any default or breach hereof by either Party. The liability (including court
costs and attorneys’ fees) of any Broker with respect to negotiation, execution, delivery or
performance by either Lessor or Lessee under this Lease or any amendment or modification hereto
shall be limited to an amount up to the fee received by such Broker pursuant to this Lease;
provided, however, that the foregoing limitation on each Broker’s liability shall not be applicable
to any gross negligence or willful misconduct of such Broker.




23. Notices.




     23.1 Notice Requirements. All notices required or permitted by this Lease or applicable law
shall be in writing and may be delivered in person (by hand or by courier) or may be sent by
regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or
by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified
in this Paragraph 23. The addresses noted adjacent to a Party’s signature on this Lease shall be
that Party’s address for delivery or mailing of notices. Either Party may by written notice to the
other specify a different address for notice, except that upon Lessee’s taking possession of the
Premises, the Premises shall constitute Lessee’s address for notice. A copy of all notices to
Lessor shall be concurrently transmitted to such party or parties at such addresses as Lessor may
from time to time hereafter designate in writing.



     23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt card, or if no
delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed
given 48 hours after the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that guarantee next day
delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or
courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered
upon telephone confirmation of receipt (confirmation report from fax machine is sufficient),
provided a copy is also delivered via delivery or mail. If notice is received on a Saturday, Sunday
or legal holiday, it shall be deemed received on the next business day.


24. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof
by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of
the same or of any other term, covenant or condition hereof. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor’s consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the
provision or provisions of this Lease requiring such





	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
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property that are not known to, or within the diligent attention and observation of, the
Parties. An agent is not obligated to reveal to either Party any confidential information obtained
from the other Party which does not involve the affirmative duties set forth above.




               (iii) Agent Representing Both Lessor and Lessee. A real estate agent, either acting
directly or through one or more associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction,
but only with the knowledge and consent of both the Lessor and the Lessee. In a dual agency
situation, the agent has the following affirmative obligations to both the Lessor and the Lessee:
a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either
Lesser or the Lessee. b. Other duties to the Lessor and the Lessee as stated above in
subparagraphs (i) or (ii). In representing both Lessor and Lessee, the agent may not without the
express permission of the respective Party, disclose to the other Party that the Lessor will
accept rent in an amount less than that indicated in the listing or that the Lessee is willing to
pay a higher rent than that offered. The above duties of the agent in a real estate transaction do
not relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and
Lessee should carefully read all agreements to assure that they adequately express their
understanding of the transaction. A real estate agent is a person qualified to advise about real
estate. If legal or tax advise is desired, consult a competent professional.



          (b) Brokers have no responsibility with respect to any default or breach hereof by either
Party. The liability (including court costs and attorneys’ fees), of any Broker with respect to any
breach of duty, error or omission relating to this Lease shall not exceed the fee received by such
Broker pursuant to this Lease; provided, however, that the foregoing limitation on each Broker’s
liability shall not be applicable to any gross negligence or willful misconduct of such Broker.



          (c) Buyer and Seller agree to identify to Brokers as “Confidential” any communication or
information given Brokers that is considered by such Party to be confidential.


26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part
thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over,
then the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the
expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any
holding over by Lessee.



27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall,
wherever possible, be cumulative with all other remedies at law or in equity.



28. Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be
observed or performed by Lessee are both covenants and conditions. In construing this Lease, all
headings and titles are for the convenience of the Parties only and shall not be considered a part
of this Lease. Whenever required by the context, the singular shall include the plural and vice
versa. This Lease shall not be construed as if prepared by one of the Parties, but rather
according to its fair meaning as a whole, as if both Parties had prepared it.



29. Binding Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal
representatives, successors and assigns and be governed by the laws of the State in which the
Premises are located. Any litigation between the Parties hereto concerning this Lease shall be
initiated in the county in which the Premises are located.




30. Subordination; Attornment; Non-Disturbance.




     30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate
to any ground lease, mortgage, deed of trust, or other hypothecation or security device
(collectively, “Security Device”), now or hereafter
placed upon the Premises, to any and all
advances made on the security thereof, and to all renewals, modifications, and extensions thereof.
Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as
“Lender”) shall have no liability or obligation to perform any of the obligations of Lessor under
this Lease. Any Lender may elect to have this Lease and/or any Option granted hereby superior to
the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease
and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates
of the documentation or recordation thereof.



     30.2 Attornment. In the event that Lessor transfers title to the Premises, or the Premises are
acquired by another upon the foreclosure or termination of a Security Device to which this Lease is
subordinated (i) Lessee shall, subject to the nondisturbance provisions of Paragraph 30.3, attorn
to such new owner, and upon request, enter into a new lease, containing all of the terms and
provisions of this Lease, with such new owner for the remainder of the term hereof, or, at the
election of such new owner, this Lease shall automatically become a new Lease between Lessee and
such new owner, upon all of the terms and conditions hereof, for the remainder of the term hereof,
and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new
owner shall assume all of Lessor’s obligations hereunder, except that such new owner shall not: (a)
be liable for any act or omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership; (b) be subject to any offsets or defenses which Lessee might have against
any prior lessor, (c) be bound by prepayment of more than one month’s rent, or (d) be liable for
the return of any security deposit paid to any prior lessor.



     30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor after the
execution of this Lease, Lessee’s subordination of this Lease shall be subject to receiving a
commercially reasonable non-disturbance agreement (a “Non-Disturbance Agreement”) from the Lender
which Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease,
including any options to extend the term hereof, will not be disturbed so long as Lessee is not in
Breach beyond any applicable cure period hereof and attorns to the record owner of the Premises.
Further, within 60 days after the execution of this Lease, Lessor shall use its commercially
reasonable efforts to obtain a Non-Disturbance Agreement from the holder of any pre-existing
Security Device which is secured by the Premises for the benefit of Lessee providing that Lessee
may continue to occupy the Premises during the Term of the Lease or any extension of the Term. In
the event that Lessor is unable to provide the Non-Disturbance Agreement within said 60 days, then
Lessee may, at Lessee’s option, directly contact Lender and attempt to negotiate for the execution
and delivery of a Non-Disturbance Agreement.



     30.4 Self-Executing. The agreements contained in this Paragraph 30 shall be effective without
the execution of any further documents; provided, however, that, upon written request from Lessor
or a Lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor
shall execute such further writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.


31. Attorneys’ Fees. If any Party or Broker brings an action or proceeding involving the Premises
whether founded in tort, contract or equity, or to declare rights
hereunder, the Prevailing Party
(as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to
reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate
suit, whether or not such action or proceeding is pursued to decision or judgment. The term,
“Prevailing Party” shall include, without limitation, a Party or Broker who substantially obtains
or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or
the abandonment by the other Party or Broker of its claim or defense. The attorneys’ fees award
shall not be computed in accordance with any court fee schedule, but shall be such as to fully
reimburse all attorneys’ fees reasonably incurred. In addition, Lessor shall be entitled to
attorneys’ fees, costs and expenses incurred in the preparation and service of notices of Default
and consultations in connection therewith, whether or not a legal action is subsequently commenced
in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence
for such services and consultation).




32. Lessor’s Access; Showing Premises; Repairs. Lessor and Lessor’s agents shall have the right to
enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times upon
reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or
tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor
may deem necessary or desirable and the erecting, using and maintaining of utilities, services,
pipes and conduits through the Premises and/or other premises as long as there is no material
adverse effect to Lessee’s use of the Premises. All such activities shall be without abatement of
rent or liability to Lessee. Lessor may at any time place on the Premises any ordinary “For Sale” signs and Lessor may during the last 6 months of the
term hereof place on the Premises any ordinary







	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
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[ILLEGIBLE]

The failure to specify herein any particular condition to Lessor’s consent shall not preclude the
imposition by Lessor at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being given. In the event
that either Party disagrees with any determination made by the other hereunder and reasonably
requests the reasons for such determination, the determining party shall furnish its reasons in
writing and in reasonable detail within 10 business days following such request.




37.
Guarantor.




     37.1 Execution. The Guarantors, if any, shall each execute a guaranty in the form most recently
published by the AIR Commercial Real Estate Association.



     37.2 Default. It shall constitute a
Default of the Lessee if any Guarantor fails or refuses,
upon request to provide: (a) evidence of the execution of the guaranty, including the authority of the party signing on Guarantor’s behalf to
obligate Guarantor, and in the case of a corporate Guarantor, a certified copy of a resolution
of its board of directors authorizing the making of such guaranty, (b) current financial
statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still
in effect.



38. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the
covenants, conditions and provisions on Lessee’s part to be observed and performed under this
Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term
hereof.



39. Options. If Lessee is granted an Option, as defined below, then the following provisions
shall apply.




     39.1 Definition. “Option” shall mean: (a) the right to extend the term of or renew this
Lease or to extend or renew any lease that Lessee has on other property of Lessor; (b) the right
of first refusal or first offer to lease either the Premises or other property of Lessor; (c)
the right to purchase or the right of first refusal to purchase the Premises or other property
of Lessor.



     39.2 Options Personal To Original Lessee. Any Option granted to Lessee in this Lease is
personal to the original Lessee or an Affiliate, and cannot be assigned or exercised by anyone
other than said original Lessee or an Affiliate and only while the original Lessee or an
Affiliate is in full possession of the Premises and, if requested by
Lessor, with Lessee
certifying that Lessee has no intention of thereafter assigning or
subletting.



     39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or
renew this Lease, a later Option cannot be exercised unless the prior Options have been validly
exercised.



     39.4 Effect of Default on Options.




          (a) Lessee shall have no right to exercise an Option: (i) during the period
commencing with the giving of any notice of Default and continuing until said Default is cured,
(ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is
given Lessee), (iii) during the time Lessee is in Breach of this Lease, or (iv) in the event
that Lessee has been given 3 or more notices of separate Default, whether or not the Defaults
are cured, during the 12 month period immediately preceding the exercise of the Option.



          (b) The period of time within which an Option may be exercised shall not be extended or
enlarged by reason of Lessee’s inability to exercise an Option because of the provisions of
Paragraph 39.4(a).



          (c) An Option shall terminate and be of no further force or effect, notwithstanding
Lessee’s due and timely exercise of the Option, if, after such exercise and prior to the
commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Rent
for a period of 30 days after such Rent becomes due (without any necessity of Lessor to give
notice thereof), or (ii) if Lessee commits a Breach of this Lease.


40. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does
not include the cost of guard service or other security measures, and that Lessor shall have no
obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of
the Premises, Lessee, its agents and invitees and their property from the acts of third parties.
In the event, however, that Lessor should elect to provide security services, then the cost
thereof shall be an Operating Expense.




41. Reservations.




          (a) Lessor reserves the right: (i) to grant, without the consent or joinder of
Lessee, such easements, rights and dedications that Lessor deems necessary, (ii) to cause the
recordation of parcel maps and restrictions, (iii) to create and/or install new utility
raceways, so long as such easements, rights, dedications, maps, restrictions, and utility
raceways do not unreasonably interfere with the use of the Premises by Lessee. Lessor may also:
change the name, address or title of the Building or Project upon at least 90 days prior written
notice; provide and install, at Lessee’s expense, Building standard graphics on the door of the
Premises and such portions of the Common Areas as Lessor shall reasonably deem appropriate;
grant to any lessee the exclusive right to conduct any business as long as such exclusive right
does not conflict with any rights expressly given herein; and to place such signs, notices or
displays as Lessor reasonably deems necessary or advisable upon the roof, exterior of the
Building or the Project or on pole signs in the Common Areas. Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate such rights. The obstruction of Lessee’s
view, air, or light by any structure erected in the vicinity of the Building, whether by Lessor
or third parties, shall in no way affect this Lease or impose any liability upon Lessor.



          (b) Lessor also reserves the right to move Lessee to other space of comparable size in the
Building or Project. Lessor must provide at least 45 days prior written notice of such move, and
the new space must contain improvements of comparable quality to those contained within the
Premises. Lessor shall pay the reasonable out of pocket costs that Lessee incurs with regard to
such relocation, including the expenses of moving and necessary stationary revision costs. In no
event, however, shall Lessor be required to pay an amount in excess of two months Base Rent.
Lessee may not be relocated more than once during the term of this Lease.



          (c) Lessee shall not: (i) use a representation (photographic or otherwise) of the Building
or Project or their name(s) in connection with Lessee’s business; or (ii) suffer or permit
anyone, except in emergency, to go upon the roof of the Building.


42. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of
money to be paid by one Party to the other under the provisions hereof, the Party against whom
the obligation to pay the money is asserted shall have the right to make payment “under protest”
and such payment shall not be regarded as a voluntary payment and there shall survive the right
on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or any part
thereof, said Party shall be entitled to recover such sum or so much thereof as it was not
legally required to pay.




43. Authority.




          (a) If either Party hereto is a corporation, trust, limited liability company,
partnership, or similar entity, each individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to execute and deliver this Lease on
its behalf. Each party shall, within 30 days after request, deliver to the other party
satisfactory evidence of such authority.



          (b) If this Lease is executed by more than one person or entity as “Lessee”, each such
person or entity shall be jointly and severally liable hereunder. It is agreed that any one of
the named Lessees shall be empowered to execute any amendment to this Lease, or other document
ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all
of the named Lessees had executed such document.


44. Conflict. Any conflict between the printed provisions of this Lease and the typewritten or
handwritten provisions shall be controlled by the typewritten or handwritten provisions.



45. Offer. Preparation of this Lease by either party or their agent and submission of same to
the other Party shall not be deemed an offer to lease to the other Party. This Lease is not
intended to be binding until executed and delivered by all Parties hereto.



46. Amendments. This Lease may be modified only in writing, signed by the Parties in interest at
the time of the modification. As long as they do not materially change Lessee’s obligations
hereunder, Lessee agrees to make such reasonable nonmonetary modifications to this Lease as may
be






	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
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BROKER AS
TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS
LEASE [ILLEGIBLE] RELATES. THE PARTIES ARE URGED TO:



1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.



2. RETAIN
APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID
INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS
SUBSTANCES, THE ZONING AND SIZE OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE
ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE
SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE.



WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF
THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES
ARE LOCATED.



The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures.




	 	 	 	 	 	 	 
	Executed at:

 


	 	Executed at:

	2870 Kilgore, Rancho Cordova, CA
	 

	 	 
	 	 	 	 
	On: 7/26/05

	 	On:
7-26-05
	 
	 	 	 	 	 	 
	By LESSOR:	 	By LESSEE:






	 	 	 	 	 
	Ethan Conrad	 	Volcano Corporation, a California Corporation





	 	 	 	 	 	 	 
	By: /s/
Ethan Conrad
 


	 	By: /s/
John Dahldorf 


	Name Printed:
 Ethan Conrad

	 	Name Printed:
  John Dahldorf
	 

	 	 
	 	 	 	 
	Title:

	 	 	 	Title: Chief Financial Officer
	

 



	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	

 



	 	

 




	Name
Printed:
	 	Name Printed:
	

 



	 	

 




	Title:

	 	 	 	Title:	 	 
	

 



	 	

 




	Address: 1300 National Drive, Suite 100	 	Address: 2870 Kilgore Road
	Sacramento, CA 95834	 	Rancho Cordova, CA 95670
	Telephone: (916) 779-1000	 	Telephone: (916) 638-8008
	Facsimile: (916) 779-1200	 	Facsimile: (916) 638-8239
	Federal ID No.	 	Federal ID No.
	

 



	 	

 




	 
	 	 	 	 	 	 
	LESSOR’S

	 	 	 	LESSEE’S	 	 
	BROKER:

	 	 	 	BROKER:	 	 






	 	 	 
	Ethan Conrad Properties, Inc.

	 	Cresa Partners
	 
	 	 
	Attn: Ethan Conrad

	 	Attn: Jim Niethammer & Dave Marino
	Address: 1300 National Drive, Suite 100

	 	Address: 455 University Avenue, Suite 215
	Sacramento, CA 95834

	 	Sacramento, CA 95825
	Telephone: (916) 779-1000

	 	Telephone: (916) 929-8898
	Facsimile: (916) 779-1200

	 	Facsimile: (916) 929-6678





These forms are often modified to meet changing requirements of law and needs of the
industry. Always write or call to make sure you are utilizing the most current form: AIR
Commercial Real Estate Association, 700 South Flower Street,
Suite 600, Los Angeles, CA 90017. (213) 687-8777.




©Copyright 1999-By AIR Commercial Real Estate Association.

All rights reserved.

No part of these works may be reproduced in any form without permission in writing.






	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
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- AIR COMMERCIAL REAL ESTATE ASSOCIATION	 	FORM OF G-1-9/99E






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	51.	 	BASE MONTHLY RENT SCHEDULE:





	 	 	 	 
	Oct. 1, 2005 – Nov. 30, 2005:

	 	 	FREE
	Dec. 1, 2005 – Nov. 30, 2006:

	 	$	34,104.00
	Dec. 1, 2006 – Nov. 30, 2007:

	 	$	35,298.00
	Dec. 1, 2007 – Nov. 30, 2008:

	 	$	36,533.00
	Dec. 1, 2008 – Aug. 31, 2009:

	 	$	37,812.00







	52.	 	TENANT IMPROVEMENTS & LEASE COMMENCEMENT:






The Lease Commencement Date shall be upon the substantial completion of the improvements
to the Premises (“Tenant Improvements”) which is estimated to be by September 30, 2005 to
allow for the Lease to Commence on October 1, 2005. Therefore, the Lease Commencement Date
shall be the later of October 1, 2005 or the substantial completion of the Tenant
Improvements. The Base Monthly Rent Schedule shall be modified by one (1) business day for
each business day of delay in the substantial Completion of the Tenant Improvements that
is caused by any force majeure delay or Lessor delay if the Commencement Date shall be
delayed beyond October 1, 2005.




Lessee and Lessor agree to work together to complete the Tenant Improvements as quickly as
reasonably possible.




The attached Work Letter describes the Tenant Improvements and the Tenant Improvement
allowance.




	53.	 	SIGNAGE:






Lessee shall have the right to install signage on the exterior wall of the Building in the
area where the Premises is located, as well as on the glass entry doors to the Premises.
In the event that Lessor installs a monument sign for the Building, then Lessee shall also
have the right to install their signage on such monument sign. Lessor shall have the right
to review and approve of all such signage but shall not unreasonably withhold such
approval. All signage shall conform to all applicable sign regulations and other
governmental requirements. Lessee shall bear the cost of all material and installation
costs relating to such signage and the cost of removing such signage (and making any
related repairs) at the Expiration Date of this Lease.




	54.	 	FIRST RIGHT OF OFFER:






Subject to the conditions set forth in this Paragraph 54, Lessee shall have a right of
first offer to lease any and all remaining contiguous (immediately adjacent) leaseable
portions of the Building. In the event that Lessor receives a proposal from a tenant or a
request for proposal from a tenant and Lessor subsequently makes a proposal to such tenant
for any portion or all of the remaining space qualifying for Lessee’s rights under this
Paragraph 54, Lessor shall send to Lessee a copy of such “Lessor Proposal.” The Lessor
Proposal shall specify (i) the base rent Lessor intends to lease such space, (ii) the
leasehold improvements and any tenant improvement allowance to be provided by Lessor for
such space, and (iii) the term for which Lessor intends to offer such space and the date
upon which such space shall be available for delivery to Lessee or any third party leasing
such space. Lessee shall have seven (7) days after receipt of such Lessor Proposal from
Lessor within which to notify Lessor of its intention to lease such space, which notice
shall be irrevocable by Lessee.




In the event Lessee elects to exercise its right to lease such space, (i) such space shall
be deemed a part of the Premises and Lessee shall commence paying Rent with respect
thereto on the date such space is delivered to Lessee, (ii) such space shall be leased on
the same terms and conditions as contained in this Lease with the rent, lease term, square
footage, tenant improvements, and other items to be per the Lessor’s proposal. Lessor and
Lessee shall execute an Amendment to this Lease confirming the lease to Lessee of such
space and the terms and conditions upon which such space is leased to Lessee.




In the event that Lessee does not exercise its rights to lease the space specified in the
Lessor’s Proposal within seven (7) -day time period set forth above, Lessor may proceed to
lease such space to another tenant and this right of refusal shall become null and void.



	 	 	 
	 

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rejection of the Rent Notice. In the event Lessee
fails to deliver to Lessor written notice of
Lessee’s acceptance or rejection of the Rent Notice within such 10-day period, Lessee will be
deemed to have rejected Lessor’s determination. If Lessee rejects the Rent Notice, Lessor
and Lessee will negotiate in good faith to attempt to agree on the Market Rate for the
Renewal Rent for the Extended Term within the succeeding fifteen (15) days. If Lessor and
Lessee are unable to so agree within such fifteen (15) day period, then the Market Rate
will be determined in accordance with the procedures set forth below. Upon determination of
the Renewal Rent for the Extended Term, Lessor and Lessee will promptly execute an
amendment to this Lease confirming the extension of the Lease and the new Base Rent.




Should Lessor and Lessee be unable to agree on the Market Rate within the fifteen (15) day
period specified above, then Lessor and Lessee shall, within ten (10) days, each appoint a
Qualified Broker (as defined below). Within ten (10) days following their appointment, the
Qualified Brokers selected by Lessor and Lessee shall each make a separate determination of
the Market Rate for the Extended Term in question and shall deliver a written report of
their determination (including reasonable detail supporting such determination) to Lessor
and Lessee. If the higher of the two Market Rate determinations is not more than 105% of
the lower determination, then the average of the two determinations shall be the basis for
the Renewal Rent determination. If the higher determination is more than 105% of the lower
determination, then the Qualified Brokers selected by Lessor and Lessee shall, within ten
(10) days of such final determination select a Qualified Appraiser (as defined below). If
the first two brokers cannot agree upon the Qualified Appraiser within said ten (10) day
period, either Lessor or Lessee may have the Qualified Broker appointed by it appoint a
Qualified Appraiser and both parties shall be responsible for one-half of the compensation,
if any, of the Qualified Appraiser. As soon as reasonably possible following such
appointment, but in no event more than fifteen (15) days thereafter, the Qualified
Appraiser shall determine which of the first two brokers’ determinations most closely
approximates his or her own independent determination of the Market Rate used for
determining the Renewal Rent. The term “Qualified Broker” means a real estate broker who
(i) is licensed in the State of California, (ii) has been actively and continuously engaged
in the leasing of industrial/commercial space in the Rancho Cordova area as his/her primary
occupation during the preceding 5-year period. The term “Qualified Appraiser” shall mean a
member of the Appraisal Institute or any successor thereto who holds the designation “MAI”
(or its then equivalent) and has not less than 10 years full-time appraisal experience in
the Rancho Cordova, California area. Each party shall be responsible for the compensation,
if any, of the Qualified Broker appointed by it and for one-half of the compensation, if
any, of the Qualified Appraiser appointed by it.




As used in this Lease, “Market Rate” means the net rental rate that a willing Lessee would
pay and a willing Lessor would accept in arm’s length, bona fide negotiations for a new
lease of the Premises to be executed at the time of determination and to commence upon the
Extended Term under this Lease, based upon other lease transactions made in comparable
industrial/commercial buildings in the relevant market (or, if applicable, the Submarket)
in which the Premises are located, taking into consideration all relevant terms and
conditions of any comparable leasing transactions, including, without limitation: (i)
location, quality and age of the building; (ii) use and size of the Premises; (iii)
leasehold improvement allowances; (iv) all other concessions or inducements; (v) base year
or dollar amount for escalation purposes (both operating costs and real estate taxes); (vi)
any other adjustments to base rental; (vii) credit standing of the Lessee; and (viii)
length of term.




	56.	 	SUBLEASING:






Lessee shall have the right to sublease or assign all or a portion of the Premises to any
related entity or subsidiary (“Affiliate”) without Lessor’s prior consent, with Lessee
providing Lessor with a written notice of such Assignment or Subletting. Such sublease or
assignment to an Affiliate shall not relieve Lessee of any liability under this Lease. As an
item of clarification, any assignment or subleasing of the Premises to a non-Affiliate shall
require Lessor’s written consent, which shall not be unreasonably withheld or delayed.




Any profits from a non-Affiliate sublease or assignment of this Lease shall be divided
equally between Lessee and Lessor after the deduction of Lessee’s costs associated with
such subleasing or assignment (including commissions, legal fees, tenant improvement costs,
and any other concessions reasonably required for such sublease or assignment).



	 	 	 
	 

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the electricity and natural gas utilities, as well as the janitorial services and refuse
disposal to the providers of such services. Such janitorial services shall be typical,
professional janitorial services, including the professional cleaning of the carpeting as
needed, the replacement of light tubes and bulbs, dusting, vacuuming, cleaning the interior
of the windows, etc.




As an item of clarification, per Paragraph 11.1 of the Lease, Lessor shall be responsible
for paying the water, sewer, and storm drainage utility costs for the Project and such
costs shall be included in the Operating Expenses, as set forth in Paragraph 4.2 of the
Lease. Also, as an item of clarification, the Premises shall have a separate electrical
meter and separate natural gas meter for it.




	59.	 	ALTERATIONS TO PREMISES (PARAGRAPH 7.3):






Lessor’s consent to Lessee Alterations under Paragraph 7.3 of the Form Lease may be
conditioned upon Lessee’s agreement to remove such Alterations and restore the Premises to
its pre-alteration condition by the Lease Expiration Date ordinary wear and tear and
casualty as defined in Section 62.1 accepted. Lessee shall not be required to remove any
Alterations at the end of the Lease term, except for (i) Alterations required to be removed
as part of Lessor’s consent, (ii) Alterations built without Lessor’s consent in violation of
the lease, or (iii) non-material Alterations not requiring Lessor’s consent.



	 	 	 	 	 	 	 
	AGREED AND ACCEPTED:	 	AGREED AND ACCEPTED:
	Lessor:   Ethan Conrad	 	Lessee:   Volcano Corporation,
	 

	 	 	 	 	 	     a California Corporation
	 
	 	 	 	 	 	 
	 By:

	 	 /s/ Ethan Conrad
	 	 By:
	 	 /s/ John Dahldorf 
	 

	 	 
	 	 	 	 
	 

	 	 Ethan Conrad
	 	 	 	 John Dahldorf, Chief Financial Officer 
	 
	 	 	 	 	 	 
	 Date:

	 	 7/26/05
	 	 Date:
	 	 7-26-05 






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 total maximum amount of $168,000.00 of this sum shall be used for Rent abatement and moving
costs.




     1.1 Said Tenant Improvement Allowance shall be used to fund the design, construction and
installation of all alterations, additions and improvements (including, without limitation,
fixtures) in and around the Premises as are necessary to ready the Premises for Tenant’s initial
occupancy under the Lease (collectively, the “Tenant Improvements”). The Tenant Improvements shall
be designed, constructed and installed in accordance with the Construction Documents (as defined in
Section 1.5 below) and in compliance with this Work Letter. The Tenant Improvements shall be funded
directly from Lessor either to the tenant improvement contractor(s) who is installing the Tenant
Improvements into the Premises or to Lessee as provided below, with the exception of the funds used
for rent abatement and moving costs, (if applicable) which shall be paid from Lessor to Lessee
after Lessor has paid the contractors for the Tenant Improvements to be made to the Premises.



     1.2 In addition to providing the Tenant Improvement Allowance, Lessor at Lessor’s cost, shall
pay for the cost to provide a separate electrical service to the Premises the cost of constructing
the demising wall needed to demise the Premises, and related costs of separating the electrical and
HVAC systems that service the Premises from the adjacent space.



     1.3 Lessor represents and warrants to Tenant that, to the best of Lessor’s knowledge, the
Building as of the date of this Lease is in compliance with all Applicable Requirements (fire
codes, life safety codes, “ADA” codes and seismic codes). In the event that, because the Premises
and/or the Building as initially constructed do not comply with all Applicable Requirements, Lessee
incurs increased design or construction costs that it would not have incurred had the Premises
and/or the Building already been in substantial compliance with the applicable life fire safety
codes, physical handicap codes, and/or earthquake safety codes applicable to new construction, then
such costs shall be reimbursed by Lessor to Lessee within fifteen (15) business days after receipt
by Lessor from Lessee of an invoice documenting and evidencing such increased costs. Any delay in
the design or construction of the Tenant Improvements because of the non compliance of the Building
and/or the Premises with the Applicable Requirements shall constitute a Lessor delay.



     1.4 Once the plans for the Tenant Improvements are completed, Lessee and Lessor shall
competitively bid/negotiate the cost of the Tenant Improvements that Lessee and Lessor mutually
agree to make to the Premises. The contractor shall be selected by Lessee subject to Lessor’s
consent, which consent shall not be unreasonably withheld, conditioned or delayed. It shall be
noted that Lessor’s construction company typically performs Tenant Improvements to buildings owned
by Lessor, and therefore Lessor shall have a “first right of refusal” (by matching the price and
terms of the chosen contractor’s bid for such) to construct the Tenant Improvements. In the event
that Lessor exercises this “first right of refusal,” Lessor’s construction company shall have a
right to act as the general contractor who performs the Tenant Improvements to the Premises.


     1.5 Lessee and Lessor shall mutually choose an architect/space planner and
engineers/consultants to design and engineer the Tenant Improvements for the Premises and prepare
final plans, specifications and working drawings for the Tenant Improvements (the “Construction
Documents”). Lessee may contract with a project manager to oversee the construction. The cost of
such parties shall be paid for as part of the Tenant Improvement Allowance from Lessor directly to
the providers of such services. Lessor shall permit Lessee and its architect, engineer(s), general
contractor and subcontractors access to the Premises to construct the Tenant Improvements.



     1.6 As an item of clarification, except for the electrical service and demising costs, (cost
of demising wall, separation of electrical wiring and HVAC, ducting from the adjacent space
described in Paragraph 1.2 above) Lessee shall be responsible for all costs relating to the
modifications to the Premises (the Tenant Improvements), including all architectural/space
planning, engineering/consultants, construction costs and all Building Department or other
governmental costs, fees or charges, as well as any other costs relating to the construction of the
Tenant Improvements to the Premises.



     1.7 Lessor shall not impose any charge for profit, overhead or supervision in connection with
the construction of the Tenant Improvements. Neither Lessee nor the Contractor shall be charged
for parking (to the extent parking is available) or for the use of electricity, water, toilet
facilities, HVAC, security, elevators or hoists during the construction of the Tenant Improvements
or during Lessee’s move-in prior to the commencement of its business operations.



	 	 	 
	 

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 breakdown, by trade, of the final costs to be incurred or which have been incurred in
connection with the design and construction of the Tenant Improvements to be performed by
or at the direction of Lessee or the Contractor, which costs form a basis for the amount of
the Contract (the “Final Costs”). All costs in excess of the Tenant Improvement Allowance
shall be borne by Lessee (the “Over-Allowance Amount”).


Lessor shall pay directly to the architect, engineers, consultants and managers their fees within
thirty (30) days after receipt of final invoices therefor, in each case approved by Lessee.
During the construction of the Tenant Improvements, Lessor shall disburse the Tenant Improvement
Allowance to Tenant or the contractor in progress payments not more often than once each month.
Each disbursement shall be pursuant to a written request which shall include (i) invoices only,
with respect to any line item draw request in an amount less than One Thousand Dollars ($1,000.00)
and (ii) invoices and conditional lien releases (in the statutory form specified in California
Civil Code Section 3262(d)(1)), with respect to any line item draw request in an amount equal to
or in excess of One Thousand Dollars ($1,000.00), which shall be approved by Tenant and submitted
to Lessor for reimbursement to or payment by Tenant or paid directly to such service provider
relating to the completed work. Within ten (10) days following Lessor’s receipt of each such
request, Lessor shall deliver a check to Tenant or the supplier of such service for the requested
amount, provided that Lessor does not in good faith dispute any
request for payment based on
non-compliance of any work with the approved Construction Documents, or due to Tenant’s failure to
deliver to Lessor the items specified in clause (i) or (ii), as applicable, immediately above. If
Lessor disputes only a portion of the amount set forth in any such request, Lessor shall so pay
the undisputed portion, and the parties shall cooperate in good faith to resolve any such dispute
as soon as is reasonably possible. Lessor’s payment of such amounts shall not be deemed Lessor’s
approval or acceptance of the work furnished or materials supplied as set forth in Tenant’s
payment request. Lessee shall be responsible for payment of the Over-Allowance Amount after
disbursement of the Tenant Improvement Allowance.





	3.2	 	Lessee’s Agents.






	 	3.2.1	 	Lessor’s General Conditions for Lessee’s Agents and Lessee Improvement Work.
Lessee’s and Lessee’s subcontractors’, laborers’, materialmen’s and suppliers’
(collectively, “Lessee’s Agents”) in construction of the Tenant Improvements shall comply
with the following: (i) the Tenant Improvements shall be constructed in strict accordance
with the Approved Working Drawings; (ii) Lessee’s Agents shall submit schedules of all
work relating to the Lessee’s Improvements to Contractor and Contractor shall, within
five (5) business days of receipt thereof, inform Lessee’s Agents of any changes which
are necessary thereto, and Lessee’s Agents shall adhere to such corrected schedule; and
(iii) Lessee shall abide by all reasonable rules made by Lessor with respect to the
storage of materials, coordination of work with the contractors of other lessees of the
Project, and any other matter in connection with this Work Letter, including, without
limitation, the construction of the Tenant Improvements.
	 
	 	3.2.2	 	Indemnity. Lessee’s indemnity of Lessor as set forth in Section 10.1 of
this Lease shall also apply with respect to any and all costs, losses, damages, injuries
and liabilities related in any way to any act or omission of Lessee or Lessee’s Agents,
or anyone directly or indirectly employed by any of them, or in connection with Lessee’s
non-payment of any amount arising out of the Tenant Improvements and/or Lessee’s
disapproval of all or any portion of any request for payment.
	 
	 	3.2.3	 	Requirements of Lessee’s Agents. Each of Lessee’s Agents shall guarantee
to Lessee and for the benefit of Lessor that the portion of the Tenant Improvements for
which it is responsible shall be free from any defects in workmanship and materials for a
period of not less than one (1) year from the date of completion thereof. Each of
Lessee’s Agents shall be responsible for the replacement or repair, without additional
charge, of all work done or furnished in accordance with its contract that shall become
defective within one (1) year after the later to occur of (i) completion of the work
performed by such contractor or subcontractors and (ii) the Lease Commencement Date. The
correction of such work shall include, without additional charge, all additional expenses
and damages incurred in connection with such removal or replacement of all or any part
of the Tenant Improvements, and/or the Building and/or common areas that may be damaged
or





	 	 	 
	 

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 companies as are required to be carried by Lessee as set forth in Paragraph 19 of this
Lease.




	 	3.2.4.2	 	Special Coverages. Lessee shall carry “Builder’s All Risk”
insurance in an amount approved by Lessor covering the construction of
the Tenant Improvements, and such other insurance as Lessor may reasonably
require (which insurance Lessee may have carried by the Contractor). Such
insurance shall be in amounts and shall include such extended coverage
endorsements as may be reasonably required by Lessor including, but not limited
to, the requirement that all of Lessee’s Agents shall carry excess liability
and Products and Completed Operation Coverage insurance, each in amounts not
less than $500,000 per incident, $1,000,000 in aggregate, and in form and with
companies as are required to be carved by Paragraph 19 of this Lease.
	 
	 	3.2.4.3	 	General Terms. Certificates for all insurance carried pursuant to
this Section 4.2.2.4 shall be delivered to Lessor before the commencement of
construction of the Tenant Improvements and before the Contractor’s equipment
is moved onto the site. All such policies of insurance must contain a provision
that the company writing said policy will give Lessor thirty (30) days prior
written notice of any cancellation or lapse of the effective date or any
reduction in the amounts of such insurance. In the event that the Tenant
Improvements are damaged by any cause during the course of the construction
thereof, Lessee shall immediately repair the same at Lessee’s sole cost and
expense. Lessee’s Agents shall maintain all of the foregoing insurance coverage
in force until the Tenant Improvements are fully completed and accepted by
Lessor, except for any Products and Completed Operation Coverage insurance
required by Lessor, which is to be maintained for ten (10) years following
completion of the work and acceptance by Lessor and Lessee. All policies
carried under this Section 4.2.2.4 shall insure Lessor and Lessee, as their
interests may appear, as well as Contractor and Lessee’s Agents. All insurance,
except Workers’ Compensation, maintained by Lessee’s Agents shall preclude
subrogation claims by the insurer against anyone insured thereunder. Such
insurance shall provide that it is primary insurance as respects the owner and
that any other insurance maintained by owner is excess and noncontributing with
the insurance required hereunder.






	3.3	 	Governmental Compliance. The Tenant Improvements shall comply in all respects with
the following: (i) all applicable codes and other state, federal, city or quasi-governmental
laws, codes, ordinances and regulations, as each may apply according to the rulings of the
controlling public official, agent or other person; (ii) applicable standards of the American
Insurance Association (formerly, the National Board of Fire Underwriters) and the National
Electrical Code; and (iii) building material manufacturer’s specifications.
	 
	3.4	 	Inspection by Lessor. Lessor shall have the right to inspect the Tenant
Improvements at all reasonable times; provided however, that Lessor’s failure to inspect the
Tenant Improvements shall in no event constitute a waiver of any of Lessor’s rights hereunder
nor shall Lessor’s inspection of the Tenant Improvements constitute Lessor’s approval of the
same. Should Lessor reasonably disapprove any portion of the Tenant Improvements, Lessor shall
notify Lessee in writing of such disapproval and shall specify the items disapproved. Any
defects or deviations in, and/or disapproval by Lessor of, the Tenant Improvements shall be
rectified by Lessee at no expense to Lessor.
	 
	3.5	 	Meetings. Commencing upon the execution of this Lease, Lessee shall hold weekly
meetings at a reasonable time, with the Architect and the Contractor regarding the progress of
the preparation of Construction Drawings and the construction of the Tenant Improvements,
which meetings shall be held at a location reasonably acceptable to Lessor and Lessee, and
Lessor and/or its agents shall receive prior notice of, and shall have the right to attend,
all such meetings, and, upon Lessor’s request, certain of Lessee’s Agents shall attend such
meetings. In addition, minutes shall be taken at all such meetings, a copy of which minutes
shall be promptly delivered to





	 	 	 
	 

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and correct, which certification shall survive the expiration or termination of this
Lease, and (C) to deliver to Lessor two (2) sets of copies of such record set of drawings within
ninety (90) days following issuance of a certificate of occupancy for the Premises, and (ii) Lessee
shall deliver to Lessor a copy of all warranties, guaranties, and operating manuals and information
relating to the improvements, equipment, and systems in the Premises.







	 	 	 
	 

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By and
Between Ethan Conrad and Volcano Corporation, a California
Corporation




GENERAL RULES




     1. Lessee shall not suffer or permit the obstruction of any Common Areas, including
driveways, walkways and stairways.



     2. Lessor reserves the right to refuse access to any persons Lessor in good faith judges to be
a threat to the safety and reputation of the Project and its occupants.



     3. Lessee shall not make or permit any noise or odors that annoy or interfere with other
lessees or persons having business within the Project.



     4. Lessee shall not keep animals or birds within the Project, and shall not bring bicycles,
motorcycles or other vehicles into areas not designated as authorized for same.



     5. Lessee shall not make, suffer or permit litter except in appropriate receptacles for that
purpose.



     6. Lessee shall not alter any lock or install new or additional locks or bolts.



     7. Lessee shall be responsible for the inappropriate use of any toilet rooms, plumbing or
other utilities. No foreign substances of any kind are to be inserted therein.



     8. Lessee shall not deface the walls, partitions or other surfaces of the Premises or Project.



     9. Lessee shall not suffer or permit anything in or around the Premises or Building that
causes excessive vibration or floor loading in any part of the Project.



     10. Furniture, significant freight and equipment shall be moved into or out of the building
only with the Lessor’s knowledge and consent, and subject to such reasonable limitations,
techniques and timing, as may be designated by Lessor. Lessee shall be responsible for any
damage to the Office Building Project arising from any such activity.



     11. Lessee shall not employ any service or contractor for services or work to be performed in
the Building, except as approved by Lessor.



     12.
 Lessor reserves the right to close and lock the Building on Saturdays, Sundays and
Building Holidays, and on other days between the hours of 7:00 P.M. and 6:00 A.M. of the following day. If Lessee uses the Premises during such periods, Lessee
shall be responsible for securely locking any doors it may have opened for entry.



     13. Lessee shall return all keys at the termination of its tenancy and shall be responsible
for the cost of replacing any keys that are lost.



     14. No window coverings, shades or awnings shall be installed or used by Lessee.



     15. No Lessee, employee or invitee shall go upon the roof of the Building.



     16. Lessee shall not suffer or permit smoking or carrying of lighted cigars or cigarettes in
areas reasonably designated by Lessor or by applicable governmental agencies as non-smoking areas.



     17. Lessee shall not use any method of heating or air conditioning other than as provided by
Lessor.



     18. Lessee shall not install, maintain or operate any vending machines upon the Premises
without Lessor’s written consent.



     19. The Premises shall not be used for lodging or manufacturing, cooking or food preparation.



     20. Lessee shall comply with all safety, fire protection and evacuation regulations
established by Lessor or any applicable governmental agency.



     21. Lessor reserves the right to waive any one of these rules or regulations, and/or as to
any particular Lessee, and any such waiver shall not constitute a waiver of any other rule or
regulation or any subsequent application thereof to such Lessee.



     22. Lessee assumes all risks from theft or vandalism and agrees to keep its Premises locked as
may be required.



     23. Lessor reserves the right to make such other reasonable rules and regulations as it may
from time to time deem necessary for the appropriate operation and safety of the Project and its
occupants. Lessee agrees to abide by these and such rules and
regulations.



PARKING RULES




     1. Parking areas shall be used only for parking by vehicles no longer than full size,
passenger automobiles herein called “Permitted Size Vehicles.” Vehicles other than
Permitted Size Vehicles are herein referred to as “Oversized Vehicles.”



     2. Lessee shall not permit or allow any vehicles that belong to or are controlled by Lessee
or Lessee’s employees, suppliers, shippers, customers, or invitees to be loaded, unloaded, or
parked in areas other than those designated by Lessor for such activities.



     3. Parking stickers or identification devices shall be the property of Lessor and be
returned to Lessor by the holder thereof upon termination of the holder’s parking privileges.
Lessee will pay such replacement charge as is reasonably established by Lessor for the loss of
such devices.



     4. Lessor reserves the right to refuse the sale of monthly identification devices to any
person or entity that willfully refuses to comply with the applicable rules, regulations, laws
and/or agreements.



     5. Lessor reserves the right to relocate all or a part of parking spaces from floor to
floor, within one floor, and/or to reasonably adjacent offsite location(s), and to reasonably
allocate them between compact and standard size spaces, as long as the same complies with
applicable laws, ordinances and regulations.



     6. Users of the parking area will obey all posted signs and park only in the areas designated
for vehicle parking.



     7. Unless otherwise instructed, every person using the parking area is required to park and
lock his own vehicle. Lessor will not be responsible for any damage to vehicles, injury to persons
or loss of property, all of which risks are assumed by the party using the parking area.



     8. Validation, if established, will be permissible only by such method or methods as Lessor
and/or its licensee may establish at rates generally applicable to visitor parking.



     9. The maintenance, washing, waxing or cleaning of vehicles in the parking structure or Common
Areas is prohibited.



     10. Lessee shall be responsible for seeing that all of its employees, agents and invitees
comply with the applicable parking rules, regulations, laws and agreements.



     11. Lessor reserves the right to modify these rules and/or adopt such other reasonable and
non-discriminatory rules and regulations as it may deem necessary for the proper operation of the
parking area.



     12. Such parking use as is herein provided is intended merely as a license only and no
bailment is intended or shall be created hereby.



     13. In the event that Lessee violates any of the herein described General Rules and/or
Parking Rules, including the provisions of Paragraph 1.2 (b) or
Paragraph 2.6 of the Lease, then
Lessor shall give one written “warning” of such violation
to Lessee. In the event that Lessee
further violates any of said provisions, Lessor shall have the right
to fine Lessee the sum of
$250.00 per violation, which shall be immediately due and fines shall be considered “Rent” as
defined in this Lease.





	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	JD
	 

	 	 	 	 	 	 	 	 
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	©1999
- AIR COMMERCIAL REAL ESTATE ASSOCIATION	 	FORM OF G-1-9/99E







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