Filed by Bowne Pure Compliance







Exhibit 10.7








STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE — NET

AIR COMMERCIAL REAL ESTATE ASSOCIATION




1. Basic Provisions (“Basic Provisions”).



1.1 Parties: This Lease (“Lease”), dated for reference purposes only December 19,
2006, is made by and between SCIF Portfolio II, LLC, a California limited liability company
(“Lessor”) and Chromadex, Inc., a California corporation
(“Lessee”), (collectively the “Parties”, or individually a “Party”).



1.2(a) Premises: That certain portion of the Project (as defined below), including all
Improvements therein or to be provided by Lessor under the terms of this Lease, commonly known by
the street address of 10005 Muirlands Blvd., Suite. G, 1st Floor and Suite K, located in
the City of Irvine, County of Orange, State of California, with zip
coda 92618, as outlined on Exhibit A attached hereto (“Premises”) and generally described
as (describe briefly the nature of the Premises):
an approximately 7,536 square foot space, which is part of an approximately 50,670 square foot
multi-tenant business park.
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, exterior walls or 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” (See also Paragraph 2)



1.2(b) Parking: 22 unreserved vehicle parking spaces (“Unreserved Parking
Spaces”); and 0 reserved vehicle parking spaces (“Reserved Parking Spaces”). (See
also Paragraph 2.6 below and Paragraph 2.6 of Owner’s Addendum, attached.)



1.3 Term: 5 years and 0 months (“Original Term”) commencing March 1,
2006
(“Commencement Date”) and ending February 28, 2011 (“Expiration Date”). (See
also Paragraph 3 below and Paragraphs 1.3 and 50.3 of the Owner’s Addendum attached.)



1.4
Early Possession: Upon the execution of Lease and any addenda, and upon payment to
Lessor of all monies due upon Lease execution (see also Paragraph 50.5 of the Owner’s
Addendum attached) (“Early Possession Date”). (See also Paragraphs 3.2 and 3.3)



1.5 Base Rent: $8,289.60 per month (“Base Rent”), payable on the first day of
each month commencing with the Term of the Lease as defined in
Paragraph 1.3 above. (See also
Paragraph 4)



þ If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted.
(See Owner’s Addendum Paragraph 50.1)



1.6
Lessee’s Share of Common Area Operating Expenses: Fourteen point eight seven
percent (14.87%) (“Lessee’s Share”).



1.7 Base Rent and Other Monies Paid Upon Execution:




	 	(a)	 	Base Rent: $8,289.60 for the period First month of the Lease Term.

	 
	 	(b)	 	Common Area Operating Expenses: $1,431.84 for the period N/A.

	 
	 	(c)	 	Security Deposit: $49,737.60. (“Security Deposit”). (See also Paragraph 5)

	 
	 	(d)	 	Other: $ N/A for __________

	 
	 	(e)	 	Total Due Upon Execution of
this Lease: $59,459.04.






1.8 Agreed Use: The premises shall be used for office administration, lab for genetic
engineering and lawful related uses. (See also Paragraph 6)



1.9 
Insuring Party: Lessor is the “Insuring Party”. (See also Paragraph 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 Voit Commercial Brokerage represents Lessor exclusively (“Lessor’s Broker”);



þ Lee & Associates — Newport Beach 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 the Brokers the brokerage fee agreed to in a separate written agreement
(or if there is no such agreement the sum of              of                      % of the total Base Rent for the brokerage
services rendered by the Brokers).



			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	
FORM MTN-2-2/04E





 


 









 






1.12
Addenda and Exhibits. Attached hereto is an Owner’s Addendum
or Addenda consisting of Paragraphs                      through                     
and Exhibits A through D, all of which constitute a part of this
Lease.



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.



2.2 Condition. Lessor shall deliver that portion of the Premises contained within the
Building (“Unit”) to Lessee broom clean and free of debris on the Commencement Date or the Early
Possession Date, whichever first occurs (“Start Date”), and, so long as the required service
contracts described in Paragraph 7.1(b) below are obtained by Lessee and in effect within thirty
days following the Start Date, warrants that the existing electrical, plumbing, fire sprinkler,
lighting, healing, ventilating and air conditioning systems (“HVAC”), loading doors, if any, and
all other such elements in the Unit, other than those constructed by Lessee, shall be in good
operating condition on said date and that the structural elements of the roof, bearing walls and
foundation of the Unit shall be free of material defects. if a non-compliance with such warranty
exists as of the Start Date, or if one of such systems or elements should malfunction or fall
within the appropriate warranty period. Lessor shall, as Lessor’s sole obligation with respect to
such matter, except as otherwise provided in this Lease, promptly after receipt of written notice
from Lessee setting forth with specificity the nature and extent of such non-compliance,
malfunction or failure, rectify same at Lessor’s expense. The warranty periods shall be as
follows: (i) 618 months as to the HVAC systems, and (ii) 30 days as to the remaining systems and
other elements of the Unit. If Lessee does not give Lessor the required notice within the
appropriate warranty period, correction of any such non-compliance, malfunction or failure shall
be the obligation or Lessee at Lessee’s sole cost and expense (except for the repairs to the fire
sprinkler systems, roof, foundations, and/or bearing walls see Paragraph 7).



2.3
Compliance. Lessor warrants that the improvements on 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 in effect on the Start Date (“Applicable Requirements”), Said
warranty does not apply to the use to which Lessee will put the Premises 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 Applicable Requirements, and especially the
zoning, 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 or such non-compliance, rectify the
same at Lessor’s expense. If
Lessee does not give lessor written notice of a non-compliance with this warranty within 6 months
following the Start-Date, correction of that non-compliance shall be the obligation of Lessee at
Lessee’s sole cost and expense. 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
Unit, Premises and/or Building, the remediation of any Hazardous Substance, or the reinforcement
or other physical modification of the Unit, Premises and/or Building (“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 obligation to pay for the portion of such costs reasonably attributable to the
Premises pursuant to the formula set out in Paragraph 7.1(d); 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 or 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 non-voluntary, 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) it 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 the Americans with Disabilities Act), 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, premises 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. Lessee shall be entitled to use the number of Unreserved Parking Spaces
and Reserved Parking Spaces specified In Paragraph 1.2(b) on those portions of the Common Areas
designated from time to time by Lessor for parking. Lessee shall not use more parking spaces than
said number. Said parking spaces shall be used for parking by vehicles no larger than full-size
passenger automobiles, or pick-up trucks, herein called
“Permitted Size Vehicles.” Lessor may
regulate the loading and unloading of vehicles by adopting Rules and Regulations as provided in
Paragraph 2.9. No vehicles other than Permitted Size Vehicles may be parked in the Common Area
without the prior written permission of Lessor.



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





(b) Lessee shall not service or store any vehicles In the Common Areas.



(c) If
Lessee permits or allows any of the prohibited activities described in this
Paragraph 2.6, 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.




			
	 	 	 
	
©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	
FORM MTN-2-2/04E







 


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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 Unit that are provided and designated by the Lessor from time
to time for the general non-exclusive use of Lessor, Lessee and other tenants of the Project and
their respective employees, suppliers, shippers, customers, contractors and invitees, including
parking areas, loading and unloading areas, trash areas, roadways, walkways, driveways and
landscaped areas.




2.8 Common Areas — Lessee’s Rights. Lessor grants to Lessee, for the benefit of Lessee and its
employees, suppliers, shippers, contractors, customers and invitees, during the term of this Lease,
the non-exclusive right to use, in common with others entitled to such use, the Common Areas as
they exist from time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or restrictions governing
the use of the Project. Under no circumstances shall the right herein granted to use the Common
Areas be deemed to Include the right to store any property, temporarily or permanently, in the
Common Areas. Any such storage shall be permitted only by the prior written consent of Lessor or
Lessor’s designated agent, which consent may be revoked at any time. In the event that any
unauthorized storage shall occur then Lessor shall have the right, without notice, in addition to
such other rights and remedies that it may have, to remove the property and charge the cost to
Lessee, which cost shall be immediately payable upon demand by Lessor.



2.9 Common Areas — Rules and Regulations. Lessor or such other person(s) as Lessor may appoint
shall have the exclusive control and management of the Common Areas and shall have the right, from
time to time, to establish, modify, amend and enforce reasonable rules and regulations (“Rules and
Regulations”) for the management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the convenience of other
occupants or tenants of the Building and the Project and their invitees. Lessee agrees to abide by
and conform to all such Rules and Regulations, and to cause its employees, suppliers, shippers,
customers, contractors and invitees to so abide and conform. Lessor shall not be responsible to
Lessee for the non-compliance with said Rules and Regulations by
other tenants of the Project.




2.10 Common Areas — Changes. Lessor shall have the right, in Lessor’s sole discretion, from
time to time:



(a) To make changes to the Common Areas, including, without limitation, changes in the
location, size, shape and number of driveways, entrances, parking spaces, parking areas, loading
and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility
raceways:



(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.



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 be 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 Common Area Operating Expenses, Real Property Taxes and Insurance premiums and to
maintain the Premises) shall, however, be 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,
Lesser is unable to deliver possession as agreed, 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 It receives possession of the
Premises. If, due to circumstances within Lesser’s control,
possession Is not delivered within 60
days after the Commencement Date, 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 Lesser within
said 10 day period, Lessee’s right to cancel shall terminate. Except as otherwise provided, if
possession is not tendered to Lessee by the Commencement Date Start-Date and Lessee does not
terminate this Lease, as aforesaid, 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 of the Premises is not delivered within 4 months
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 lender 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, 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 Common Area Operating Expenses. Lessee shall pay to Lessor during the term hereof, in
addition to the Base Rent, Lessee’s Share (as specified in Paragraph 1.6) of all Common Area
Operating Expenses, as hereinafter defined, during each calendar year of the term of this Lease, in
accordance with the following provisions:



(a) “Common Area Operating Expenses” are defined, for purposes of this Lease, as all
costs incurred by Lessor relating to the ownership and operation of the Project,
including, but not limited to, the following:




	 	(i)	 	The operation, repair and maintenance, in neat, clean, good order and
condition of the following:







	 	(aa)	 	The Common Areas and Common Area Improvements, including
parking areas, loading and unloading areas, trash areas, roadways,
parkways, walkways, driveways, landscaped areas, bumpers, irrigation
systems, Common Area lighting facilities, fences and gates,
elevators, roofs, and roof drainage systems.







	 	(bb)	 	Exlerior signs and any
tenant directories.

	 
	 	(cc)	 	Any fire
detection and/or sprinkler systems.






			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E





 


PAGE 3 OF 17









 






	 	(ii)	 	The cost of water, gas, electricity and
telephone to service the Common Areas and any utilities not
separately metered.

	 
	 	(iii)	 	Trash disposal, pest control services, property
management, security services, and the costs of any
environmental inspections.

	 
	 	(iv)	 	Reserves set aside for maintenance
and repair of Common Areas. 

	 
	 	(v)	 	Real Property
Taxes (as defined in Paragraph 10).

	 
	 	(vi)	 	The cost of the premiums for the insurance maintained by
Lessor pursuant to Paragraph 8.

	 
	 	(vii)	 	Any deductible portion of
an insured loss concerning the Building or the Common Areas.

	 
	 	(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
period of time equivalent to the anticipated useful life of such a Capital Expenditure, using
commonly accepted sound management practices, and Lessee shall be required to pay its
proportional share of such cost on a monthly basis by dividing the cost plus a commercially
reasonable rate of interest to amortize such a Capital Expenditure by the number of months of
its anticipated useful life. Such payments shall continue until the cost of the Capital
Expenditure plus interest has been fully amortized or the Lease
Term, or any extension of the Original Term, expires. a 12
                                         year
period and Lessee shall not be
required to pay more than Lessee’s Share-of 1/44th of the cost
of such
                                         Capital Expenditure in any given month.




	 	(ix)	 	Any other services to be provided by Lessor
that are stated elsewhere in this Lease to be a Common Area Operating
Expense.






(b) Any Common Area Operating Expenses and Real Property Taxes that are specifically
attributable to the Unit, the Building or to any other building in the Project or to the operation,
repair and maintenance thereof, shall be allocated entirely to such Unit, Building, or other
building. However, any Common Area Operating Expenses and Real
Property Taxes that are 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.



(c) The inclusion of the improvements, facilities and services set forth in Subparagraph
4.2(a) 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.



(d) Lessee’s Share of Common Area Operating Expenses shall be payable by Lessee within 10 days
after a reasonably detailed statement of actual expenses is presented to Lessee. At Lessor’s
option, however, an amount may be estimated by Lessor from time to time of Lessee’s Share of annual
Common Area Operating Expenses and the same shall be payable monthly or quarterly, as Lessor shall
designate, during each 12 month period of the Lease term, on the same day as the Base Rent is due
hereunder. Lessor shall deliver to Lessee within a reasonable period 60-days after the expiration
of each calendar year a reasonably detailed statement showing Lessee’s Share of the actual Common
Area Operating Expenses incurred during the preceding year. If Lessee’s payments under this
Paragraph 4.2(d) during the preceding year exceed Lessee’s Share as indicated on such statement,
Lessor shall credit the amount of such over-payment against Lessee’s Share of Common Area Operating
Expenses next becoming due. If Lessee’s payments under this Paragraph 4.2(d) during the preceding
year were loss than Lessee’s Share as indicated on such statement, Lessee shall pay to Lessor the
amount of the deficiency within 10 days after delivery by Lessor to Lessee of the statement.
Failure by Lessor to deliver to Lessee within a reasonable time period a statement showing Lessee’s
Share of Actual Operating Expenses shall in no way diminish Lessee’s obligation to pay Lessor any
sums due nor Lessor’s right to collect such sums.



4.3
Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money
of the United States, without offset or deduction (except as
specifically permitted in this
Lease), on or before the day on which it is due. Rent for any period during the term hereof
which is for loss 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 than 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 charges which may be due.



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 or 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 monies 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. It Lessee makes all payments of monies due in a timely fashion and
is nor in default pursuant to the terms of this Lease the initial security deposit of
$49,737.60 shall be reduced by applying the amount of  $8,289.60 to
Lessee’s rent payments in months
6, 9, 12, 18, and 30



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 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 on the Premises or the
mechanical or electrical systems therein, and/or is not significantly more burdensome to the
Premises, and so long as the same is approved, if such approval is required, by the Planning
and/or Building Departments of the City of Irvine. 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.



			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E







 


PAGE 4 OF 17









 







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 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, 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 Promises 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
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, 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, 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 on
above ground migration from areas outside of the Project). 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 existed as a result of Hazardous
Substances on the Premises prior to the Start Date or which are subsequently 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 investigation, removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this Lease.



(f) Investigations and Remediations. Lessor shall retain the responsibility and pay for any
investigations or remediation measures required by governmental entities having jurisdiction with
respect to the existence of Hazardous Substances on the Premises prior to the Start Date, unless
such remediation measure is required as a result of Lessee’s use (including “Alterations”, as
defined in paragraph 7.3(a) below) of the Premises, in which event Lessee shall be responsible for
such payment. Lessee shall cooperate fully in any such activities at the request of Lessor,
including allowing Lessor and Lessor’s agents to have reasonable access to the Premises at
reasonable times in order to carry out Lessor’s investigative and remedial responsibilities.



(g) Lessor Termination Option.
If a Hazardous Substance Condition (see Paragraph 9.1(e))
occurs during the term of this Lease, unless Lessee is legally responsible therefor (in which case
Lessee shall make the investigation and remediation thereof required by the Applicable Requirements
and this Lease shall continue in full force and effect, but subject to Lessor’s rights under
Paragraph 6.2(d) and Paragraph 13). Lessor may at Lessor’s option, either (i) investigate and
remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at
Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) if the
estimated cost to remediate such condition exceeds 12 times the then monthly Base Rent or $100,000,
whichever is greater, give written notice to Lessee, within 30 days after receipt by Lessor of
knowledge of the occurrence of such Hazardous Substance Condition, of Lessor’s desire to terminate
this Lease as of the date 60 days following the date of such notice. In the event Lessor elects
to give a termination notice. Lessee may, within 10 days thereafter, give written notice to Lessor
of Lessee’s commitment to pay the amount by which the cost of the remediation of such Hazardous
Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000,
whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof
within 30 days following such commitment. In such event, this Lease shall continue in full force
and effect, and Lessor shall proceed to make such remediation as soon as reasonably possible after
the required funds are available. If Lessee does not give such notice and provide the required
funds or assurance 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 solo 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 Promises at any time. In the case of an emergency,
and otherwise at reasonable times (following reasonable notice to Lessee, if providing such notice
is practical), 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 contamination 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.



			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E







 


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



7.1 Lessee’s Obligations.



(a) In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3
(Lessee’s Compliance with Applicable Requirements), 7.2 (Lessor’s Obligations), 9 (Damage or
Destruction), and 14 (Condemnation). Lessee shall, at Lessee’s
sole expense, keep the Premises,
Utility installations (Intended for Lessee’s exclusive use, no
matter where located), and
Alterations in good order, condition and repair (whether or not the portion of the Premises
requiring repairs, or the means of repairing the same, are reasonably or readily accessible to
Lessee, and whether or not the need for such repairs occurs as a result of Lessee’s use, any prior
use, the elements or the age of such portion of the Premises). Including, but not limited to, all
equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities,
boilers, pressure vessels, fixtures, interior walls, interior surfaces of exterior walls, ceilings,
floors, windows, doors, plate glass, and skylights but excluding any items which are the
responsibility of Lessor pursuant to Paragraph 7.2. Lessee, In keeping the Premises in good order,
condition and repair, shall exercise and perform good maintenance practices, specifically including
the procurement and maintenance of the service contracts required by Paragraph 7.1(b) below,
Lessee’s obligations shall include restorations, replacements or renewals when necessary to keep
the Premises and all Improvements thereon or a part thereof in good order, condition and state of
repair.



(b) Service Contracts. Lessee shall, at Lessee’s solo expense, procure and maintain contracts,
with copies to Lessor, in customary form and substance for, and with contractors specializing and
experienced in the maintenance of the following equipment and improvements, if any. If and when
installed on the Premises: (i) HVAC equipment, (ii)boiler and pressure vessels, (iii)
clarifiers, and (iv) any other equipment, If reasonably required by Lessor. However. Lessor
reserves the right, upon notice to Lessee, to procure and maintain any or all of such service
contracts, and If Lessor so elects. Lessee shall reimburse Lessor, upon demand, for the cost
thereof.



(c) Failure to Perform. If Lessee falls to perform Lessee’s obligations under this Paragraph
7.1, Lessor may enter upon the Premises after 10 days’ prior written notice to Lessee (except In
the case of an emergency. In which case no notice shall be required), perform such obligations on
Lessee’s behalf, and put the Premises in good order, condition and repair, and Lessee shall
promptly reimburse Lessor for the cost thereof.



(d) Replacement.
Subject to Lessee’s indemnification of Lessor as set forth in Paragraph 8.7
below, and without relieving Lessee of liability resulting from Lessee’s failure to exercise and
perform good maintenance practices, if an Item described in Paragraph 7.1(b) cannot be repaired
other then at a cost which is in excess of 50% of the cost of replacing such item, then such Item
shall be replaced by Lessor, and the cost thereof shall be prorated
between the Parties and Lessee shall only 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 the cost
of such replacement by a fraction, the numerator of which is one, and
the denominator of which is
144 (to. 1/l44th of the cost per month). Lessee shall pay interest on the unamortized balance at a
rate that is commercially reasonable in the Judgment of Lessor’s
accountants. Lessee may, however,
prepay its obligation at any time.



7.2 Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3
(Compliance), 4.2 (Common Area Operating Expenses), 6 (Use). 7.1 (Lessee’s Obligations), 9 (Damage
or Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant to Paragraphs 4.2,
shall keep in good order, condition and repair the foundations, exterior walls, structural
condition of interior bearing walls, exterior roof, fire sprinkler system. Common Area fire alarm
and/or smoke detection systems, fire hydrants, parking lots, walkways, parkways, driveways,
landscaping, fences, signs and utility systems serving the Common Areas and all parts thereof, as
well as providing the services for which there is a Common Area Operating Expense pursuant to
Paragraph 4.2. Lessor shall not be obligated to paint the exterior or Interior surfaces of exterior
walls nor shall Lessor be obligated to maintain, repair or replace windows, doors or plate glass of
the Premises. 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, power panels, electrical distribution, security and fire protection systems,
communication systems, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the
Premises. The term “Trade Fixtures” shall moan 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. Lessee may, however, make non-structural Utility
Installations 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 or any existing walls, and the cumulative cost thereof during this
Lease as extended does not exceed a sum equal to 3 month’s Base Rent in the aggregate or a sum
equal to one month’s Base Rent in any one year. 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
expedilious 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 as-built 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) Indemnification.
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 materialman’s lien
against the Premises or any Interest
therein, except the labor or materials furnished that are to be performed by Lessor. 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 shell require, Lessee shall furnish a surely 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 or Lessee, but considered a part of the
Premises. Lessor may, 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 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.




			
	 	 	 
	
©1999
— AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E







 


PAGE 6 OF
17









 






(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 broom 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 there is an early
termination of the Lease and the completed portion of the Term of 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 wore deposited via underground migration from areas outside of the
Project) even if such removal would require Lessee to perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by
Lessee. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c)
without the express written consent of Lessor shall constitute a holdover under the provisions of
paragraph 26 below.



8. Insurance;
Indemnity.



8.1
Payment of Premiums. The cost of the premiums for the insurance policies required to be carried by Lessor, pursuant to
Paragraphs 8.2(b), 8.3(a) and 8.3(b), shall be a Common Area Operating Expense and payable by
Lessee, at Lessor’s sole discretion, either as due and payable by Lessor or in monthly
installments as additional rent. Premiums for policy periods commencing prior to or extending
beyond, the term of this Lease shall be prorated to coincide with the corresponding Start Date or
Expiration Date.



8.2 Liability Insurance.



(a) Carried
by Lessee. Lessee shall obtain and keep in force a Commercial General Liability
policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily
injury, personal injury and property damage based upon or arising out of the ownership, use,
occupancy or maintenance of the Premises and all areas appurtenant thereto. Such Insurance shall
be on an occurrence basis providing single limit coverage in an
amount not less than $51,000,000 per
occurrence with an annual aggregate of not less than $2,000,000, an “Additional Insured-Managers or
Lessors of Premises Endorsement” and contain the “Amendment of the Pollution Exclusion Endorsement”
for damage caused by heat, smoke or fumes from a hostile fire. The policy shall not contain any
intra-insured exclusions as between Insured persons or organizations, but 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 Premises. The amount of such insurance shall be equal to the full
replacement cost of the Premises, 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 loss 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 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 whore 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 Dale, 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 5 days prior written
notice to Lessor. Lessee shall, at least 30 5 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 to
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.



			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E







 


PAGE 7 OF 17









 







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 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, lions, judgments, penalties, 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.



8.8
Exemption of Lessor from Liability. 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. 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 Owned Alterations and Utility Installations, which can reasonably be
repaired in 3 months or less from the date of the damage or destruction, and the cost thereof does
not exceed a sum equal to 6 month’s Base Rent. Lessor shall notify Lessee in writing within 30 days
from the date of the damage or destruction as to whether or not the
damage is Partial or Total.



(b) “Premises Total Destruction” shall mean damage or destruction to
the improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations and Trade Fixtures, which cannot reasonably be repaired in 3 months or loss from the
date of the damage or destruction and/or the cost thereof exceeds a sum equal to 6 month’s Base
Rent. Lessor shall notify Lessee in writing within 30 days from the date of the damage or
destruction as to whether or not the damage is Partial or Total.



(c) “Insured Loss” shall moan damage or destruction to Improvements on the Premises, other
than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an
event required to be covered by the Insurance described in Paragraph 8.3(a), irrespective of any
deductible amounts or coverage limits involved.



(d) “Replacement Cost” shall mean the cost to repair or rebuild the Improvements owned by
Lessor at the time of the occurrence to their condition existing Immediately prior thereto,
including demolition, debris removal and upgrading required by the operation of Applicable
Requirements, and without deduction for depreciation,



(e) “Hazardous
Substance Condition” shall mean the occurrence or discovery of a
condition Involving the presence of, or a contamination by, a Hazardous Substance as
defined in Paragraph 6.2(a), In, on, or under the Premises.



9.2 Partial Damage — Insured Loss. If a Premises Partial Damage that is an Insured Loss
occurs, then Lessor shall, at Lessor’s expense, repair such damage (but not Lessee’s
Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as
reasonably possible and this Lease shall continue in full force and effect; provided,
however, that Lessee shall, at Lessor’s election, make the repair of any damage or
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 therefore. 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 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.



			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E







 


PAGE 8 OF 17









 







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 heroin.



(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 Definition. 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. The term “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 or any portion thereof or a change in the improvements thereon. In
calculating Real Property Taxes for any calendar year, the Real
Property Taxes for any real estate
tax year shall be included in the calculation of Real Property Taxes for such calendar year based
upon the number of days which such calendar year and tax year have in common.



10.2 Payment of Taxes. Lessor shall pay the Real Property Taxes applicable to the Project,
and except as otherwise provided in Paragraph 10.3, any such amounts shall be included in the
calculation of Common Area Operating Expenses in accordance with the provisions of Paragraph 4.2,
and, at Lessor’s sole discretion, may be billed either as due and payable by Lessor or in monthly
installments as part of additional rent.



10.3 Additional Improvements.
 Common Area Operating Expenses shall not Include Real Property
Taxes specified in the tax assessor’s records and work shoots 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 Common Area Operating Expenses are payable under Paragraph 4.2, the entirely 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 Lesser from the respective valuations assigned in the assessor’s work sheets or
such other information as may be reasonably available. Lessor’s reasonable determination thereof,
in good faith, shall be conclusive.



10.5 Personal Property Taxes.
 Lessee shall pay prior to delinquency all taxes assessed
against and levied upon Lessee Owned Alterations and Utility Installations, Trade Fixtures,
furnishings, equipment and all personal property of Lessee contained in the Premises. When
possible. Lessee shall cause its Lessee Owned Alterations and Utility Installations, Trade
Fixtures, furnishings, equipment and all other personal property to be assessed and billed
separately from the real property of Lessor. If any of Lessee’s
said property shall be assessed
with Lessor’s real property. Lessee shall pay Lessor the taxes attributable to Lessee’s property
within 10 days after receipt of a written statement selling forth the taxes applicable to Lessee’s
property.



11. Utilities.
 Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal
and other utilities and services supplied to the Premises, together with any taxes thereon. Lessee
shall pay its actual cost of electricity consumed on the Premises directly (and not as part of
utilities delivered to the Common Areas) by means of separate metering. The meter shall be provided
by Lessor to Lessee at no cost to Lessee. Lessee shall be entirely responsible for arranging
commencement of service, all billing and termination of service directly with the electrical
supplier. Interruptions of such service by the provider shall not be the responsibility of Lessor
nor shall Lessor be in any way liable for any loss to Lessee from such interruption. Gas service to
the Property (which is not required for normal occupancy of the Premises) shall not be provided by
Lessor; should Lessee’s use of the Premises require gas service, Lessee may, at Lessee’s sole cost
and expense, arrange for gas service to be installed and provided to the Premises. Plans for such
installation and service shall require the written approval of Lessor. Lessee shall be responsible
for all costs related to the subsequent use and consumption of gas provided by such service,
including maintenance and repair. Water service to the Premises shall not be separately metered but
shall either be estimated by a qualified consultant and billed to Lessee monthly as additional
rent or billed to Lessee as part of the monthly estimated Common Area Operating Expenses. All other
utilities provided to the Property by Lessor shall be reimbursed monthly to Lessor by Lessee as
part of Common Area Operating Expenses, according to the proportional share and the estimated
monthly charge as set forth in Paragraph; 1.6 above and reconciled annually as set forth in
Paragraph 4.2(d) above, Notwithstanding the provisions of Paragraph 4.2, If at any time in
Lessor’s sole judgment, Lessor determines that Lessee is using a disproportionate amount of water,
electricity or other commonly metered utilities, or that Lessee is generating such a large volume
of
trash as to require an increase in the size of the dumpster and/or an increase in the
number of times per month that the dumpster is emptied, then lessee may increase
Lessee’s Base Rent by an amount equal to such increased costs.



			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E






 


PAGE 9 OF 17









 





12. Assignment and Subletting.



12.1 Lessor’s Consent Required.



(a) 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) A change in the control of Lessee shall constitute an assignment requiring consent. The
transfer, on a cumulative basis, of 25% 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 buy-out 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 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 held 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, 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 Broach.



(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 hold 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, together with a fee of $1,000 any reasonable costs of the
Lessor including but not limited to legal costs or 10% of the current monthly Base Rent applicable
to the portion of the Premises which is the subject of the proposed assignment or sublease,
whichever is greater, as consideration for Lessor’s considering and processing said request.
Lessee agrees to provide Lessor with such other or additional information and/or documentation as
may be reasonably requested.



(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)



(h) “Affiliates.” See Paragraph 12.3(h) of Owner’s Addendum, attached.



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 Lesser 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 altom
to Lessor, in which event Lesser 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, Lesser 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 under a sublease shall also
require the consent of Lessor.



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



(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. conditions or Rules and Regulations under this Lease. A
“Breach” is defined as the occurrence of one or more of the following Defaults, and the failure of
Lessee to cure such Default within any applicable grace period:



(a) The abandonment of the Premises; or the vacating of the Promises without providing
a commercially reasonable level of
security, or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized
as a result thereof, or without providing reasonable
assurances to minimize potential vandalism.



			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E





 


PAGE 10 OF 17









 





(b) The failure of Lessee to make any payment of Rent or any Security Deposit required
to be made by Lessee hereunder,
whether to Lessor or to a third party, when due, to provide reasonable evidence of insurance or
surely bond, or to fulfill any obligation under this Lease which endangers or threatens
life or property, where such failure continues for a period of 3 business days following written
notice to Lessee.



(c) The failure by Lessee to provide (i) reasonable written evidence of compliance with
Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized
assignment or subletting, (iv) an Estoppel Certificate, (v) a requested subordination, (vi)
evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph
41 (easements), or (viii) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this
Lease, where any such failure continues for a period or 10 days following written notice to
Lessee.



(d) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease,
or of the rules adopted under Paragraph 2.9 hereof, other than those described in subparagraphs
13.1(a), (b) or (c), above, where such Default continues for a period of 30 days after written
notice; provided, however, that if the nature of Lessee’s Default is such that more than 30 days
are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee
commences such cure within said 30 day period and thereafter diligently prosecutes such euro to
completion.



(e) The occurrence of any of the following events: (i) the making of any general
arrangement or assignment for the benefit of creditors: (ii) becoming a “debtor” as defined in
11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition filed
against Lessee, 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 or 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 (c) 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 or 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 duo 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 chock. 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 boon 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 Broach 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 on 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 Lessees right to possessions 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 Lesser 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 or 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 10 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. 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 Broach 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.



			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E







 


PAGE 11 OF 17












 







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 non-scheduled payment, shall bear interest from the date
when due, as to scheduled payments, or the 31st day after It was due as to non-scheduled payments.
The interest (“Interest”) charged shall be equal to the prime rate reported in the Wall Street
Journal as published closest prior to the date when due plus 4%, 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 after receipt of said notice, or if having commenced said cure
they do not diligently pursue it to completion, then Lessee may elect to cure said breach at
Lessee’s expense and offset from Rent an amount equal to the greater of one month’s Base Rent or
the Security Deposit, and to pay an excess of such expense under protest, reserving
Lessee’s right to reimbursement from Lessor. Lessee shall document the cost of said cure and supply
said documentation to Lessor.



14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent
domain or sold under the threat of the exercise of said power (collectively “Condemnation”), this
Lease shall terminate as to the part taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than 10% of the floor area of the Unit, or more than
25% of Lessee’s Reserved Parking Spaces, is taken by Condemnation, Lessee may, at Lessee’s option,
to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of
such taking (or in the absence of such notice, within 10 days after the condemning authority shall
have taken possession) terminate this Lease as of the date the
condemning authority takes such
possession. If Lessee does not terminate this Lease in accordance
with the foregoing, this Lease
shall remain in full force and effect as to the portion of the Premises remaining, except that the
Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such
Condemnation. Condemnation awards and/or payments shall be the property of Lessor, whether such
award shall be made as compensation for diminution in value of the leasehold, the value of the part
taken, or for severance damages; provided, however, that Lessee shall be entitled to any
compensation for Lessee’s relocation expenses, loss of business goodwill and/or Trade Fixtures,
without regard to whether or not this Lease is terminated pursuant to the provisions of this
Paragraph. All Alterations and Utility Installations made to the Premises by Lessee, for purposes
of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled
to any and all compensation which is payable therefor. In the event that this Lease is not
terminated by reason of the Condemnation. Lessor shall repair any damage to the Premises caused by
such Condemnation.



15. Brokerage
Fees.



15.1
INTENTIONALLY OMITTED 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
premises 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 a fee in accordance
with the schedule of the Brokers in effect at the time of the
execution of this Lease.


15.2
INTENTIONALLY OMITTED 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 falls 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 which whether or not in a form similar to the then most current “Estoppel
Certificate” form published by the AIR Commercial Real Estate Association requests information that
is customarily asked of Lessors or Lessees to provide in Estoppel Certificates, plus such
additional information, confirmation and/or statements as may be reasonably requested by the
Requesting Party. (See Paragraph 16A of Owner’s Addendum, attached.)



(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 encumbrances 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.



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. Notwithstanding the above, and subject to the provisions of Paragraph 20
below, the original Lessor under this Lease, and all subsequent holders of the Lessor’s interest in
this Lease shall remain liable and responsible with regard to the potential duties and liabilities
of Lessor pertaining to Hazardous Substances as outlined in Paragraph
6.2 above.



			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E





 


PAGE 12 OF 17









 







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. Subject to the provisions of Paragraph 17
 above, the obligations of
Lessor under this Lease shall not constitute personal obligations of Lessor, the individual
partners of Lessor or its or their individual partners, directors, officers or shareholders, and
Lessee shall look to the Premises, 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 the individual
partners of Lessor, or its or their individual partners, 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 consent. The acceptance of Rent by Lessor shall not be a waiver of any Default or
Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of moneys or damages
due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection
therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless
specifically agreed to in writing by Lessor at or before the time of deposit of such payment.



25. Disclosures Regarding The Nature of a Real Estate Agency Relationship.



(a) When entering into a discussion with a real estate agent regarding a real estate
transaction, a Lessor or Lessee should from the outset understand what type of agency
relationship or representation it has with the agent or agents in the transaction. Lessor and
Lessee acknowledge being advised by the Brokers in this transaction, as follows:



(i) Lessor’s Agent. A Lessor’s agent under a listing agreement with the Lessor acts as
the agent for the Lessor only. A Lessor’s agent or subagent has the following affirmative
obligations: To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and
loyalty in dealings with the Lessor. To the Lessee and the Lessor: (a) Diligent exercise of
reasonable skills and care in performance of the agent’s duties. (b) A duty of honest and fair
dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting
the value or desirability of the 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.




(ii) Lessee’s Agent. An agent can agree to act as agent for the Lessee only. In these
situations, the agent is not the Lessor’s agent, even if by agreement the agent may receive
compensation for services rendered, either in full or in part from the Lessor. An agent acting only
for a Lessee has the following affirmative obligations. To the Lessee: A fiduciary duty of
utmost care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the
Lessor: (a) Diligent exercise of reasonable skills and care in performance of the agent’s
duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts
known to the agent materially affecting the value or desirability of the 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 Lessor 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 road 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 advice 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
attorney’ 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.




			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E





 


PAGE 13 OF 17









 






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 non-disturbance 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 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. 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 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. All
such activities shall be without statement 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 “For Lease” signs and coordinate with Lessee any
showings to prospective tenants. Lessee may at any time place on the Premises any ordinary “For
Sublease” sign.



33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises
without Lessor’s prior written consent. Lessor shall not be obligated to exercise any standard of
reasonableness in determining whether to permit an auction.



34. Sign. Except for ordinary “For Sublease” signs which may be placed only on the Premises,
Lessee shall not place any sign upon the Project without Lessor’s prior written consent. All signs
must comply with all Applicable Requirements. (See also Owner’s
Addendum Paragraph 34,
attached).



35. Termination; Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary
or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a
termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or
Lessor estate in the Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies. Lessor’s failure within 10 days following any such event to elect to the
contrary by written notice to the holder of any such lessor interest, shall constitute Lessor’s
election to have such event constitute the termination of such interest.



			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E





 


PAGE 14 OF 17









 





36. Consents.
Except as otherwise provided herein, wherever in this Lease the
consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withhold or
delayed. Lessor’s actual reasonable costs and expenses (including but not limited to architects’,
attorneys’, engineers’ and other consultants’ fees) incurred in the consideration of, or response
to, a request by Lessee for any Lessor consent, including but not
limited to consents to an assignment, a subletting or the presence or use of a
Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting
documentation therefor. Lessor’s consent to any act, assignment or subletting shall not constitute
an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent
be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically
stated in writing by Lessor at the time of such consent. 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, and each such Guarantor shall
have the same obligations as Lessee under this Lease.



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, and cannot be assigned or exercised by anyone other than said
original Lessee and only while the original Lessee 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 validity
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, (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), (ii) Lessor gives to Lessee 3 or more
notices of separate Default during any 12 month period, whether
or not the Defaults are cured, or
(iii) 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.



41. Reservations. Lessor reserves the right: (I) to grant, without the consent or joinder of
Lessee, such casements, rights and dedications that Lessor deems necessary, (ii) to cause the
recordation of parcel maps and restrictions, and (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, Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate such rights.



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. 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.



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 non-monetary
modifications to this Lease as may be
reasonably required by a Lender in connection with the obtaining of normal financing or refinancing
of the Premises.



47. Multiple Parties. If more than one person or entity is named herein as either Lessor or Lessee,
such multiple Parties shall have joint and several responsibility to comply with the terms of this
Lease.



48. Waiver of Jury Trial. The Parties hereby waive their respective rights to trial by jury in any
action or proceeding involving the Property or arising out of this Agreement.



49. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation and/or the
Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease o is
þ is not attached to this Lease.



LESSOR
AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW
THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT
AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.




			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E






 


PAGE 15 OF 17









 



ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION
OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE
TRANSACTION TO WHICH IT 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 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.



	 	 	 	 	 
	Execute
at: Los Angeles, CA

	 	 	 	Executed at: 2952 S. Daimler St.,
Santa Ava, CA
	On: 1/25/07

	 	 	 	On: 01/16/2007
	 
	 	 	 	 
	By LESSOR:

	 	 	 	By LESSEE:
	SCIF Portfolio II, LLC, a California limited company

	 	 	 	CHROMADEX, INC., a California corporation






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	SCIF Partners II, LLC

a Delaware limited liability company,	 	 	 	By:	 	/s/ Frank Jaksch	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Managing Member	 	 	 	Name Printed: Frank Jaksch
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Title: President and CEO
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Southern California Industrial Fund, LLC,	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	a California limited liability company,	 	 	 	Name Printed:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	Managing Member	 	 	 	Title:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Address: 10005 Muirlands Blvd., Suite K
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Irvine, California 92618
	 	 
	 	 	 	 	By:	 	The Magellan Group, Inc.	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	a Delaware corporation	 	 	 	Telephone: (949) 419-0288	 	 
	 	 	 	 	 	 	Managing Member	 	 	 	Facsimile: (949) 419-0294	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Federal ID No.  	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Martin Slusser	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Martin Slusser,	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	President	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Kevin Staley	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Kevin Staley,	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Chairman of the Board	 	 	 	 	 	 	 	 






	 	 	 	 	 
	By:
	 	 
	 	 
	 
	 	 
	Name Printed: Martin Slusser
	 	 
	Title:
 Managing Member
	 	 
	
	 	 
	 	 	 
	 
	 	 	 	 
	By:
	 	 
	 
	 	 
	Name Printed: Kevin Staley
	 	 
	Title:
 Managing Member
	 	 
	 
	 	 
	 	 	 
	Address:
1800 Avenue of the Stars, Suite 105
	 	 
	Los Angeles, California 90067
	 	 
	 
	 	 	 	 
	Telephone: (310) 277-8337	 	 
	Facsimile: (310) 277-8330	 	 
	Federal ID No. 95-4676908	
	 	 
	 	 	 






			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E





 


 PAGE 16 OF 17









 





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BROKER:	 	 	 	BROKER:
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Voit Commercial Brokerage	 	 	 	Lee & Associates
Newport Beach, Inc.
	Att: Sam Olmstead	 	 	 	Att: Bob Rieden
	Title: Vice President	 	 	 	Title: Senior Vice President
	Address: 18500 Von Karman Ave., Suite 150	 	 	 	Address: 3991 MacArthur Blvd., Suite 100
	Irvine, California 92612	 	 	 	Newport Beach, CA 92660
	Telephone: (949) 851-5100	 	 	 	Telephone: (949) 724-4710
	Facsimile: (949) 261-9092	 	 	 	Facsimile: (949) 833-0608
	Federeal ID No.

	 	 	 	 	 	Federeal Id:	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 	 	 	 	 






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.




			
	 	 	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM MTN-2-2/04E







 


 PAGE 17 OF 17











 




OWNER’S
ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL

MULTI-TENANT LEASE – NET, DATED DECEMBER 16, 2004, FOR 10005 MUIRLANDS

BLVD., SUITE. G, 1ST FLOOR AND SUITE K, IRVINE, CALIFORNIA, 92618




THIS ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE-NET (“Addendum”) is made
and entered into by and between SCIF PORTFOLIO-II, LLC, a California Limited Liability Company and
CHROMADEX, INC., a California corporation (“Lessee”), dated December 19, 2006, to which this
Addendum is attached and incorporated. The terms, covenants and conditions set forth herein are
intended to and shall have the same force and effect as if set forth at length in the body of the
Lease. To the extent that the provisions of this Addendum are inconsistent with any provisions of
the Lease, the provisions of this Addendum shall supersede and control.



2.2 Condition of Premises. Lessee hereby acknowledges and agrees that, prior to the
execution of the Lease, Lessee has performed all inspections of the Premises that Lessee deems
necessary or appropriate, and, except as otherwise set forth in Paragraph 2.2 of the Lease, and
with the improvements Lessor shall make to the Premises as set forth in Paragraph 50.4 below
(“Lessor’s Tenant Improvements”) and any additional obligations of Lessor per Paragraph 2.3 below,
Lessee hereby accepts the Premises “as-is” in its current condition. Lessee further acknowledges
that neither Lessor nor any agent of Lessor has made any representation or warranty with respect
to the Premises’ or the Project’s suitability for the conduct of Lessee’s business therein and
that the responsibility for determining the suitability for the conduct of Lessee’s business is
the sole and entire responsibility of Lessee. The taking of possession of the Premises by Lessee
shall conclusively establish that the Premises were, at such time, in satisfactory condition.



2.3 Condition of Premises. At delivery, all Lessor’s modifications to the facility
will be in full compliance with all existing requirements of the Americans with Disabilities Act
(“ADA”). During the initial five-year Term of the Lease only, Lessee shall not be responsible for
its proportional share of any subsequent earthquake retrofit or ADA requirements that may be
required by the City of Irvine or any other government agency unless such requirements are a
direct result of Lessee’s expansion of improvements, specific use or change of use.



2.6 Parking. Notwithstanding anything to the contrary set forth in Paragraphs 1.2(b)
and 2.6 of the Lease, and subject to any reasonable rules and regulations promulgated by Lessor, as
the same may be established from time to time, of the twenty-two (22) unreserved parking spaces
allocated for Lessee’s parking in Paragraph 1.2(b). Lessee also hereby acknowledges and accepts
that no officer or employee of Lessee, no visitor, customer, contractor, agent, consultant or other
invitee of Lessee shall be permitted to park vehicles of any size whatsoever nor for anytime
whatsoever, however briefly, in the parking areas reserved exclusively to the use of other tenants
in the Project, and that the it shall be entirely the responsibility of Lessee to inform itself and
all its officers, employees, customers, contractors, agents, consultants or other invitees of this restriction and to assure that such restriction is
strictly enforced.



CHROMADEX. INC. — OWNER’S ADDENDUM





 


1









 







Lessor otherwise reserves the right to restrict, reserve and/or assign parking
throughout the parking areas of the Project for the parking needs of other tenants in the Project.
Lessee agrees to fully cooperate with Lessor and other lessees of the Project in order that the
Project’s parking area shall be operated in the manner reasonably established by Lessor. All
responsibility for damage and theft to vehicles is assumed by Lessee and Lessee’s employees and
visitors. Lessee shall repair or cause to be repaired, at Lessee’s sole cost and expense, any and
all damage to the Building and the Project caused by Lessee’s, or Lessee’s employees’ or visitors’
use of such parking areas therein. Lessor shall not be liable to Lessee, nor, except as may be
provided in Paragraph 14 of the Lease shall this Lease be affected in any way, by reason of any
moratorium, initiative, referendum, statute, regulation or other governmental action which could
in any manner prevent or limit the parking rights of Lessee hereunder. Any governmental charges or
surcharges or other monetary obligations imposed relative to parking rights with respect to the
Project shall be considered assessments and Common Area Operating Expenses, and Lessee shall pay
Lessee’s pro-rata share thereof pursuant to the provisions of Paragraph 4.2 of the Lease.



4.2 Common Area Operating Expenses. Notwithstanding anything to the contrary
set forth in the Lease:



4.2(a) “Common Area Operating Expenses” shall be defined to include all expenses identified
in Paragraph 4.2(a) of the Lease and all other expenses reasonably incurred by Lessor in operating,
maintaining and repairing the Building and the Project, as determined by standard accounting
practices, including, but not limited to: rent taxes, gross receipts taxes (whether assessed
against Lessor or assessed against Lessee and paid by Lessor, or both); water and sewer charges (if
not separately metered to Lessee); the cost of utilities, janitorial services and labor (if not
separately metered to Lessee); parking charges, surcharges or any other costs levied, assessed or
imposed by, or at the direction of, or resulting from statutes or regulations promulgated by any
federal, state or local governmental authority in connection with the use or occupancy of the
Building or the Project; the cost (amortized over the reasonably anticipated useful life of the
asset, together with a commercially reasonable rate of interest) of: (i) any capital improvements
made to the Building or the Project by Lessor after the Commencement Date of the Term as required
pursuant to any law or regulation that was not applicable at the time they were constructed, or
(ii) replacement of any equipment needed to operate the Building or the Project at a consistent
level or quality, but only in the event that such equipment (A) is malfunctioning or
non-functioning and the repair of such equipment would not be economically feasible when compared
to the cost of replacement, or (B) is otherwise due for replacement in the ordinary course of its
reasonably anticipated useful life; costs incurred in the management of the Building and the
Project, including a management fee, which Lessor will make all reasonable efforts to assess at a
rate that is customary for similar property and competitive with local practice, and which Lessor
on similar industrial properties customarily assesses as a sum equal to fifteen percent (15%) of
Lessor’s costs to operate the Project excluding any marketing fees or any expenses paid for
directly by Lessee, but including all reasonable Common



CHROMADEX, INC. — OWNER’S ADDENDUM


 


2









 





Area Maintenance expenses, all taxes and all applicable insurance costs for the Property, reasonable
supplies, wages and salaries of employees, but only to the extent used in the management,
operation and maintenance of the Building and the Project, and payroll taxes and similar
governmental charges with respect thereto; the cost of waste disposal and sweeping of the
property; the costs of installing, maintaining and repairing all fire alarm and fire prevention
equipment, including but not limited to charges for water to the fire sprinkler system and all
costs of monitoring the fire alarm system, excepting such costs as might be paid directly by
Lessee for fire monitoring; the costs of security for the Project; the costs of heating and
ventilating any of the Common Areas, if applicable; the costs of repair and maintenance of the
Building and the Project, the costs of maintaining signs; reasonable audit or verification fees of
operating expenses and of the utilities payable by Lessee if not separately metered to Lessee; and
the costs of resurfacing, painting, lighting, cleaning, refuse removal of the Building and the
Project. Lessor’s current estimate for Operating Expenses is approximately Nineteen cents ($.19)
per square foot per month. Lessor emphasizes that the above costs are estimates only and that the
actual costs to Lessee cannot be calculated precisely until the Project is fully leased and
operational.



4.2(d). Lessor’s failure to notify Lessee of Lessee’s estimate of the Common Area Operating
Expenses prior to the Commencement Date of the Term or prior to the commencement of any calendar
year of the Term, shall not preclude Lessor from collecting, following such notification, Lessee’s
Pro-Rata Share of estimated Common Area Operating Expenses, which expenses (or balance) shall be
due concurrently with Lessee’s next monthly installment of rent; provided, however, that if Lessor
fails to notify Lessee of Lessee’s estimated Common Area Operating Expenses for the upcoming
calendar year, Lessee shall continue to pay such Common Area Operating Expenses in effect for the
prior calendar year until such time as Lessee is notified in writing of Lessor’s estimate for the
then-current calendar year. Common Area Operating Expenses for a partial month shall be prorated
based on a three hundred sixty (360) day calendar year. With respect to the reconciliation of the
Lessee’s Pro-Rata share of estimated Common Area Operating Expenses against the actual expenses
incurred by Lessor, failure by Lessor to provide Lessee within a reasonable time period a detailed
statement showing Lessee’s share of actual operating expenses shall in no way diminish Lessee’s
obligation to pay any sums due nor Lessor’s right to collect such sums.



6.1 Use. Should any standard or regulation now or hereafter be imposed on Lessor or
Lessee by a state, federal or local governmental body charged with the establishment, regulation
and enforcement of occupational, health or safety standards for employers, employees, lessors or
lessees, then, except as otherwise specifically set forth in the Lease (notably in Paragraph 2.3 of
the Lease), Lessee agrees to comply promptly with such standards or regulations, and to bear the
cost and expense of such compliance if the same is required as a direct result of Lessee’s specific
use of the Premises.



CHROMADEX, INC. — OWNER’S ADDENDUM





 


3









 







7.1(a) Lessee’s Repair and Maintenance Obligations. All repairs and maintenance of
the Premises by Lessee as required under the Lease shall be performed in a
manner consistent with the standard local practices of contractors in the Los Angeles County area,
by contractors and other personnel reasonably approved by Lessor, shall be performed in accordance
with a repair and maintenance plan reasonably approved by Lessor, and shall comply with guidelines
and shall meet such standards of quality as may be reasonably established by Lessor from time to
time during the Term, including, without limitation, providing Lessor with copies of all permits
obtained by Lessee and “as-built” drawings of such work performed by Lessee. Lessee shall be
responsible for the regular maintenance and repair of the heating, ventilation and air
conditioning system during the entire Term of the Lease, including any extension of the Term by
options to extend exercised by Lessee.



7.2 Lessors’s Obligations. Lessor shall be responsible for the maintenance and repair
of the roof membrane, which costs shall be reimbursed by Lessee through the reimbursement
provisions of Common Area Operating Expenses, as set forth in Paragraph 4.2 of the Lease. Lessor,
at Lessor’s sole cost and expense, shall be solely responsible for the roof structure and all
structural elements of the Building throughout the Term of the Lease. Lessor shall also be
responsible for painting the exterior of the building on a reasonably regular basis, subject to
the reimbursement by Lessee through the reimbursement provisions of Common Area Operating Expenses,
as set forth in Paragraph 4.2 of the Lease.



8.2(a) Liability Insurance: Carried by Lessee. The following shall be added to the
end of Paragraph 8.2(a) of the Lease:



“Lessee agrees to maintain in full force and effect at all times during the
term of this Lease, as it may be extended, at its own expense, for the protection
of Lessee and Lessor, as their interests may appear, policies of insurance issued
by a reasonable carrier or carriers acceptable to Lessor which afford the
following coverages: (i) Worker’s compensation: statutory limits; and (ii)
Employer’s liability: as required by law.



“In the event that Lessee fails to obtain and maintain any insurance required
under the Lease for any reason whatsoever, such failure shall constitute a
material default by Lessee under this Lease and Lessee shall be conclusively
deemed to have self-insured such insurance obligations with the full waiver of
subrogation set forth in the Lease.”



12.3 Assignment and Subletting.



12.3(f) Bonus Rent. Notwithstanding anything to the contrary contained in Paragraph 12
of the Lease, fifty percent (50%) of any sums or other economic consideration received by Lessee as
a result of any assignment or subletting entered into pursuant to Paragraph 12 of the Lease,
however denominated under the assignment or sublease, which exceed, in the aggregate: (a) the total
sums which Lessee is obligated to pay Lessor under this Lease (prorated to reflect obligations
allocable to any portion of the Premises subleased), plus (b)(i) any real estate brokerage
commissions or fees payable by Lessee in connection with such assignment or subletting(ii) costs of tenant improvements required to be constructed by Lessee for any such
assignee or subtenant, and (iii) other reasonable costs incurred by Lessee in connection with any
such assignment or subletting (including without limitation attorneys’ fees), shall be paid to
Lessor as additional rent under this Lease without affecting or reducing any other obligations of
Lessee hereunder. Lessee understands, acknowledges and agrees that Lessor’s right to recapture any
consideration paid in connection with an approved assignment or subletting is a material
inducement for Lessor’s agreement to lease the Premises to Lessee upon the terms and conditions
set forth herein.



CHROMADEX, INC. — OWNER’S ADDENDUM


 


4









 






12.3 (h) Affiliates. Notwithstanding anything to the contrary in this Section 12,
neither (A) an assignment of the Premises to a transferee which is the resulting entity of a merger
or consolidation of Lessee with another entity, nor (B) an assignment or subletting of all or a
portion of the Premises to an entity which is controlled by, controls, or is under common control
with, Lessee (any entity in (A) or (B) being deemed, for purposes of this Lease, an “Affiliate” of
Lessee) shall be deemed a Transfer, provided that Lessee notifies Lessor in writing at least thirty
(30) days in advance of any such assignment or sublease, and promptly supplies Lessor with any
documents or information reasonably requested by Lessor regarding such Transfer or transferee, and
that such assignment or sublease is not a subterfuge by Lessee to avoid its obligations under this
Lease. “Control,” as used herein, shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a person or entity, whether by
the ownership of voting securities, by contract or otherwise.



16(a). Estoppel Certificates. Notwithstanding anything to the contrary in Section
16(a) of the Lease, Lessor and Lessee agree that the Estoppel to be delivered by Lessee to Lessor
shall be substantially in the form attached hereto as Exhibit D.



16(c). Financial Statements. In order to induce Lessor to enter into the Lease,
Lessee agrees that it shall promptly furnish Lessor, from time to time, upon Lessor’s written
request, with financial statements reflecting Lessee’s current financial condition. Lessor shall
be entitled to make the information contained in the financial statements available to any
potential partner or lenders of Lessor or purchasers of the Premises or any portion thereof, and,
in making such information available to any potential partner or lender, Lessor will make all
reasonable efforts to insure that such information will be treated as confidential. Lessee
represents and warrants that all financial statements, records and information furnished by Lessee
to Lessor in connection with the Lease are true, correct and complete in all respects.



17. Lessor’s Liability. It is expressly understood and agreed that
notwithstanding anything in the Lease to the contrary, and notwithstanding any applicable law to
the contrary, the liability of Lessor and any of the officers, directors, shareholders, employees,
servants or agents of Lessor (“Lessor’s Parties”) hereunder and any recourse by Lessee against
Lessor or the Lessor Parties shall be limited solely and exclusively to an amount which is equal
to the interest of Lessor in the Building, and neither Lessor, nor any of the Lessor Parties shall
have any personal liability therefor, and Lessee hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or under Lessee.



CHROMADEX, INC. — OWNER’S ADDENDUM




 


5









 








23. Notices. All notices, demands or other communications given or permitted
hereunder shall be in writing (except as otherwise expressly stated herein) and shall be sent by
personal delivery, by recognized overnight courier or by United States mail, registered or
certified, return receipt requested, postage prepaid, and shall be deemed delivered on the date of
personal delivery, one (I) business day following the date of delivery to a recognized overnight
courier, and three (3) business days following deposit of United States mail, registered or
certified, return receipt requested, postage prepaid, as the case may be. Such notices, demands or
other communications shall be addressed as follows:



	 	 	 
	To Lessor:

	 	SCIF PORTFOLIO II, LLC, c/o Magellan Realty Advisors, 1800 Avenue of the Stars,
Suite 105, Los Angeles, California 90067
	 
	 	 
	To Lessee:

	 	CHROMADEX, INC.






or to such other address or to such other substitute person or entity as any party shall designate
to the other for such purpose in the manner hereinabove set forth.



Lessee agrees to send by certified or registered mail to any mortgagee or deed of trust
beneficiary of the Premises whose address has been previously furnished to Lessee, a copy of any
notice of default served by Lessee on Lessor. If Lessor fails to cure such default within the time
provided for in the Lease, such mortgagee or beneficiary shall have an additional thirty (30) days
to cure such default; provided, however, that if such default cannot reasonably be cured within
that thirty (30) day period, then such mortgagee or beneficiary shall have such additional time to
cure the default as is reasonably necessary under the circumstances, provided such mortgagee or
beneficiary commences the cure of such default within said thirty (30) day period and diligently
pursues the same to completion.



25. Recording: Neither Lessor nor Lessee shall record, nor cause to be
recorded, the Lease or a memorandum thereof.



26. Holding Over. If Lessee fails to surrender the Premises upon the expiration or
earlier termination of the Term without the express written consent of Lessor, Lessee shall become
a tenant-at-sufferance at a rental rate equal to one hundred fifty percent (150%) of the monthly
Base Rent payable by Lessee for the month immediately preceding such expiration or earlier
termination, and Lessee shall remain responsible for the payment of Lessee’s Share of Common Area
Operating Expenses and all other monetary obligations due and payable by Lessee under the Lease.
Acceptance by Lessor of rent after such expiration or earlier termination of the Term shall not
result in any renewal of the Term. The foregoing provisions are in addition to and do not affect
Lessor’s right of re-entry or any other rights or remedies of Lessor hereunder or as otherwise
provided at law or in equity, or both. If Lessee fails to surrender the Premises upon the
expiration or earlier termination of the Term, Lessee shall
indemnify and hold Lessor harmless from and against any and all losses, costs, damages and
liability (including actual attorneys’ fees and costs, and court costs), direct or indirect, which
Lessor may suffer as a result of Lessee’s failure to surrender the Premises.



CHROMADEX, INC. — OWNER’S ADDENDUM




 


6









 











34. Signage. Lessor retains absolute control over the exterior appearance of the
Building and Project and the exterior appearance of the Premises. Except as otherwise set forth
herein, Tenant will not install, or permit to be installed, any drapes, furnishings, signs,
lettering, advertising or any items that will in any way alter the exterior appearance of the
Building or the exterior appearance of the Premises without prior written consent of Lessor.
Following execution of the Lease, Lessee shall provide Lessor with all plans for its signage
program, Lessor’s approval of which shall not be unreasonably withheld. Lessee shall be allowed to
install signage upon the Premises per the signage regulations of the City of Irvine and of any
other applicable regulatory agency as well as Lessor’s overall signage program for the Project.
Except as provided for herein, Lessee shall not install any signage upon any other portion of the
Building, Common Areas or Project. The graphics, materials, color, design, lettering, size,
quality, specifications and exact location of every aspect of Lessee’s signage shall be subject to
the prior written approval of Lessor, which approval shall not be unreasonably withheld, and shall
also comply with and be subject to all other applicable laws, statutes, ordinances, rules,
regulations, permits, approvals, and all covenants, conditions or restrictions of record. All
expenses without limitation for Lessee’s entire signage program, all design, construction,
installation and maintenance costs and any direct or indirect expenses of Lessor’s to review,
support or approve Lessee’s signage, shall be the sole and entire responsibility of Lessee. At the
expiration or earlier termination of the Lease, Lessee shall, at Lessee’s sole cost and expense,
remove all signs installed by Lessee from the Premises and any other locations on the Property,
including any Common Areas, where Lessee installed or caused signs of any nature to be installed,
and restore all such areas to the condition existing prior to the installation of all such signs.
If Lessee fails to remove the signs and restore the Premises and other areas of the Property as
provided in this Addendum Paragraph 34 within thirty (30) days of the expiration or earlier
termination of the Lease, then Lessor may perform such work and all actual costs and expenses
incurred by Lessor in connection therewith shall constitute additional rent under the Lease and
shall be paid by Lessee to Lessor within ten (10) days of Lessee’s receipt of an invoice therefore.
The signage rights granted to Lessee under this Paragraph 34 are personal to the Original Lessee,
and may not be assigned or transferred to any other person or entity, including, without
limitation, any assignee or sublessee of this Lease.



41. Security. Lessee shall, at Lessee’s sole cost and expense, take such security
measures as Lessee deems reasonably appropriate or necessary in order to secure the Premises;
provided, however, in the event any such security measures require any alterations of or additions
to the Premises, any such alterations and/or additions shall be subject to the terms of Paragraphs
7.3 and 7.4 of the Lease.




CHROMADEX, INC. — OWNER’S ADDENDUM


 


7









 





50. Miscellaneous Conditions:



50.1 Rent Adjustments: The Base Monthly Rent shall be the following:



	 	 	 	 	 	 	 
	Months	 	 	 	Rate/Rentable
SF/Mo.	 
	1-12	 	 
	 	$	1.10	 
	13-24	 	 
	 	$	1.15	 
	25-36	 	 
	 	$	1.20	 
	37-48	 	 
	 	$	1.25	 
	49-60	 	 
	 	$	1.30	 






50.4 Lessor’s Tenant Improvements: Lessor shall provide the improvements as
provided in Exhibit C.



50.5 Lessee’s Tenant Improvements and Early Possession: Upon full execution of the
Lease and payment to Lessor by Lessee of all monies due upon Lease execution, and upon presentation
to Lessor of a certificate of insurance for all required Lessee insurance, Lessee may take
possession of the Premises for the purposes of installing Lessee’s own improvements, subject to any
approvals required by the City of Irvine. Lessee shall be solely and entirely responsible for
obtaining all appropriate permits and licenses required for such improvements by any governmental
or regulatory agency in whose jurisdiction such work falls. Lessee shall assure that all
improvements by Lessee or any of its contractors, consultants, agents or invitees be done in such a
manner as to conform to all building codes in effect at the time improvements are begun and also
with all applicable laws, covenants and restrictions of record, regulations and ordinances in
effect on the start date, and that any third party hired by Lessee to provide improvements is fully
covered by all appropriate liability and worker’s compensation insurance. In addition, all of
Lessee’s improvements shall be completed in a workmanlike manner, free and clear of all liens, and
shall remain free and clear of all liens.



Lessee shall fully indemnify Lessor against liability for any costs or expenses or
consequences of any other nature resulting from the installation, maintenance, operation or removal
of any of Lessee’s improvements.



In addition to the terms and conditions for the removal, restoration and condition of the
Premises upon surrender set forth in Paragraph 7.4 of the Lease, at the expiration of the Lease
Term, or any extension of that Term, or at the earlier termination of the Lease, Lessee shall, upon
the election of Lessor and at Lessee’s sole and entire cost and expense, remove all the tenant
improvements installed by Lessee prior to or subsequent to the Commencement Date of the Lease up to
the date of expiration or earlier termination of the Lease.



CHROMADEX, INC. — OWNER’S ADDENDUM


 


8









 






Lessee shall also take all reasonable precautions to assure that the action of any of its
officers, employees, contractors, agents, consultants or other invitees on the Premises does not
interfere with Lessor’s work to complete Lessor’s Tenant Improvements. Any delay to
Lessor’s substantial completion of such improvements directly resulting from any such act or
omission by Lessee’s officers, employees, contractors, agents, consultants or other invitees
attributable and chargeable to Lessee in determining the Commencement date of the Lease and the
payment of rent. In the event of such delay, the Commencement Date of the Lease shall be
determined as the number of days’ delay prior to the date of substantial completion of the
improvement and delivery of the Premises to Lessee.



50.7 Hours of Operation: Subject to any overriding regulation of the City of Irvine
in effect now or in the future, there shall be no restrictions on Lessee’s hours of operation.



IN WITNESS WHEREOF, Lessor and Lessee have executed this Addendum concurrently with the Lease of
even date herewith.



	 	 	 
	“LESSOR”:

	 	SCIF PORTFOLIO II, LLC,

a California limited liability company






	 	 	 	 	 	 	 	 	 
	By:	 	SCIF Partners II, LLC,

a Delaware limited liability company,

Managing Member	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Southern California Industrial Fund, LLC,

a California limited liability company,

Managing Member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	The Magellan Group, Inc.

a Delaware corporation,

Managing Member	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Martin Slusser	 	 
	 	 	 	 	 
	 	 	Martin Slusser,	 	 
	 	 	Chairman of the Board	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Kevin Staley
	 	 
	 	 	 	 	 
	 	 	Kevin Staley,	 	 
	 	 	President	 	 






	 	 	 
	LESSEE: CHROMADEX, INC., a California corporation








	 	 	 	 	 
	 	By:  	 /s/ Frank Jaksch
 	 
	 	 	Frank Jaksch 	 




CHROMADEX, INC. — OWNER’S ADDENDUM




 


9












 







EXHIBIT A
— PREMISIES PLAN






 


 









 






Site
Plan — Exhibit B

10005 & 10015 Muirlands Parkway
o Irvine Spectrum, CA





 


 









 





EXHIBIT “C” — PAGE 1








 


 









 





EXHIBIT “C” — PAGE 2








 


 









 





EXHIBIT
“C” — PAGE 3




Kitchen & Bathroom








 


 









 





EXHIBIT  “C” PAGE 4








 


 









 







EXHIBIT
“C”, PAGE 5









12/07/2006




The
Magellan group 
1800
Ave, of the stars #105

Los Angeles, Ca, 90087

(310) 277-8337



Attn. Scott Matkins.



Re:
Property located at 10006 Muirlands Ave. Irvine, Ca, 92218 SCIF
portfolio II Ste. G




* Concrete.



Remove all necessary lawn to pour new walkway for new entrance
and relocate all irrigation heads.



*  Floooring.



Provide
all new floor covering as indicated on drawings with allowance of the following
items carpet $24,00 per square yard including removal installation ,
cove base, padding wood flooring not to exceed $4.00 per square foot.



* Painting.



Includes
all interior painting of all walls with several shades of
colors as requested by the
new tenants.



*
Electrical.



Relocate all necessary electrical fixtures and switches, enclose
all electrical panels replace all necessary ceiling tiles to
match and replace all broken lenses and bulbs add 2 sets of 220
volts outlets at back, rough out handy boxes for future cat6
outlets



1218 E. 17th St., Santa Ana, California 92701 • (310) 213-9823 • FAX (714) 245-1575





 


 









 






EXHIBIT
“C” PAGE 6









12/07/2006




The Magellan group

1800 Ave, of the stars #105

Los Angeles, Ca, 90067



Attn. Scott Matkins.



Re:
Proposal for the repairs and improvements to the property located at
10005 Muirlands Ave. Irvine,
 Ca, 92218 
       SCIF Portfolio II LLC:



* Demolition:



Remove
all existing carpeting, remove all floor linoleum in
restrooms,removal of all FRP in 2 restrooms, remove light fixtures and
exhaust fans, remove all walls as indicated on drawings remove all
electrical not needed,remove all pedestrian interior doors, remove all
counters and kitchen appliances.



* Framing and drywall.



Provide all new framing as indicated on drawings, provide a new store front doors and sidelight
panels, seal off several door openings as indicated on drawings, provide new window openings-
and doors.



* Glazing.



Provide
all new windows as indicated on drawings and a new store front.



* Doors.



Provide all new interior doors with allowance of $300.00 par door including
hardware and installation



1218
E. 17th St., Santa Ana, California 92701
• (310) 213-9823 • FAX (714) 245-1575




 


 









 






EXHIBIT
“C”, PAGE 7









12/07/2006



The Magellan group


1800 Ave, of the stars
#105

Los Angeles, Ca,
90067 

(310) 277-8337



Attn.
Scott Matkins.



Re:
Property location at 1005 Muilands Ave. Irvine, Ca, 92218 SCIF portfolio II ste. G




* Cabinets, and appliances.



Provide and install a new cabinet made by IKIA or equal quality selected
by the tenant provide and install a new sink and faucet and a new
counter top (butoher blook)



* HVAC.



Relocate
all necessary ducts and registers to provide air supply to all
offices and path of travel



Items
not included in estimate are.



permits,
partitions, and data, phone, cable, security systems.



Total,
cost for Improvements is $79,400.00



Contractor.                                         

                 Rudy P. Ellzarraraz




1218
E. 17th St. Santa Ana, California 92701 • (310) 213-9823 • FAX (714) 245-1575




 


 









 







EXHIBIT D




ESTOPPEL CERTIFICATE




                                        , 19                    




To:




                                        




                                        




                                        




                                        




Re:
Lease
Dated:                                          , a
                    
(“Lessor”)



 



					
	 

	 	Lessee:
	 	              
                             
               
             
             
              
              
       

	 
	 

	 	 	 	              
                   
                   
         (“Lessee”)
	 
	 

	 	Premises:
	 	Approximately_square feet located
at                     
                    
                    


	 
	 

	 	
	 	
                    
                    
                    
 (“Premises”)








Ladies and Gentlemen:



The
undersigned hereby certifies to                      (“Buyer”) as of the date
hereof as follows:



1. The undersigned is the “Lessee” under the above-referenced lease (“Lease”) covering the
above-referenced Premises (“Premises”). A true, correct and complete copy of the Lease (including
all addenda, riders, amendments, modifications and supplements thereto) is attached hereto as
Exhibit “A”.



2. The Lease constitutes the entire agreement between Lessor and Lessee with respect to the
Premises and the Lease has not been modified, changed, altered or amended in
any respect except as follows:



 




.







3.
 The term of the Lease commenced on                                         , 19         , and,
including any presently exercised option or renewal term, will expire on                                         , 19          .
Lessee has accepted full and complete possession of the Premises and is the actual occupant in
possession and has not sublet, assigned or hypothecated or otherwise transferred all or any portion
of Lessee’s leasehold interest. All improvements to be constructed on the Premises by Lessor have
been completed to the satisfaction of Lessee and accepted by Lessee and any tenant construction
allowances have been paid in full. All duties of an inducement nature required of
the Lessor in the Lease have been fulfilled. All of the Lessor’s obligations which have accrued
prior to the date hereof have been performed.


 


 









 





4. There exists no breach or default, nor state of facts nor condition which, with notice, the
passage of time, or both, would result in a breach or default on the part of either Lessee or
Lessor. To the best of Lessee’s knowledge, no claim, controversy, dispute, quarrel or disagreement
exists between Lessee and Lessor.



5. Lessee is currently obligated to pay base annual rental in monthly
installments of $                                         per month and monthly installments of annual rental have been paid
through                                         , 19        . In addition, the Lease requires rent adjustments based on [insert
dates of rent escalations, if any]. No other rent has been paid in advance and Lessee has no claim
or defense against Lessor under the Lease and is asserting no offsets or credits against either
the rent or Lessor. In addition, Lessee is currently obligated to pay a proportionate share
of common area maintenance charges equal to $                                         per month, and Lessee’s
proportionate share is                     %. Lessee’s base year is                     . Lessee has no claim
against Lessor for any security, rental, cleaning or other deposits, except for a security deposit
in the amount of $                                         which was paid pursuant to the Lease.



6. The Lease is in full force and effect in accordance with its terms and is a binding
obligation of the undersigned.



7. The undersigned has received no notice of prior sale, transfer, assignment, hypothecation
or pledge of the Lease or of the rents secured therein, except to Buyer.



8. Lessee has no option or preferential right to purchase all or any part of the Premises (or
the real property of which the Premises are a part) nor any right or interest with respect to the
Premises or the real property of which the Premises are a part other than as Lessee under the
Lease. Lessee has no right to renew or extend the terms of the Lease or expand the Premises except                                                             .



9. Lessee has made no agreement with Lessor or any agent, representative or employee of
Lessor concerning free rent, partial rent, rebate of rental payments or any other type of rental
or other economic inducement or concession except as expressly set forth in the Lease.



10. There has not been filed by or against Lessee a petition in bankruptcy, voluntary or
otherwise, any assignment for the benefit of creditors, any petition seeking reorganization or
arrangement under the bankruptcy laws of the United States, or any state thereof, or any other
action brought under said bankruptcy laws with respect to Lessee.



11. All insurance required of Lessee by the Lease has been provided by Lessee and all
premiums paid.


 


 









 





12. The undersigned (i) is not presently engaged in nor does it presently permit, (ii) has
not at any time in the past engaged in nor permitted, and (iii) has no knowledge that any third
person or entity engaged in or permitted any operations or activities upon, or any use or
occupancy of the Property, or any portion thereof, for the purpose of or in any way
involving the handling, manufacturing, treatment, storage, use, transportation, spillage, leakage,
dumping, discharge or disposal (whether legal or illegal, accidental or intentional) of any
hazardous substances, materials or wastes, or any wastes regulated under any local, state or
federal law, except as follows:                                                              (if none, so state).



13. The undersigned acknowledges that:



(a) Buyer or Buyer’s assignee is purchasing Lessor’s interest in the Property which includes
the Premises and, in connection with that purchase, will be receiving an assignment of Lessor’s
interest under the Lease;



(b) Lessor, Buyer and Buyer’s successors, agents and assigns (including, but not limited to
lenders, title insurers and subsequently purchasers) will be relying upon each of the statements
contained herein in connection with Buyer’s purchase of the property of which the Premises is a
part and but for the assurances and agreements contained herein Buyer would not purchase the
property of which the Premises is a part; and



(c) the undersigned will attorn to and recognize Buyer as the Lessor under the Lease and will
pay all rents and other amounts due thereunder to Buyer upon notice to the undersigned that Buyer
has become the owner of Lessor’s interest in the Premises under the Lease.



14. In the event any of the statements set forth herein conflicts or is
inconsistent with any provision or term contained in the Lease or any modifications thereof,
the statement contained herein shall prevail.



                                        
DATE




                                                            



	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Its: 	 	 
	 	 	 	 
	 
	 	“LESSEE”