Exhibit 10.3


 




	
  

  	
  AIR COMMERCIAL
  REAL ESTATE ASSOCIATION STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE -
  NET (DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS) 1. Basic Provisions
  (“Basic Provisions”). 1.1 Parties: This Lease (“Lease”), dated for reference
  purposes only DECEMBER 12, 2013 , is made by and between HILLSIDE ASSOCIATES
  II, LLC (“Lessor”) and AEROVIRONMENT, INC., A DELAWARE CORPORATION .
  (“Lessee”), (collectively the “Parties,” or individually a “Party”). 1.2
  Premises: That certain real property, including all improvements therein or
  to be provided by Lessor under the terms of this Lease, and commonly known as
  996 FLOWER GLEN STREET, SIMI VALLEY , located in the County of VENTURA ,
  State of CALIFORNIA , and generally described as (describe briefly the nature
  of the property and, if applicable, the “Project”, if the property is located
  within a Project) FREE STANDING SINGLE STORY 43,008 SQUARE FOOT BUILDING
  LOCATED WITHIN THE HILLSIDE INDUSTRIAL CENTER PROJECT *SEE PARAGRAPH #2 OF
  ADDENDUM (“Premises”). (See also Paragraph 2) 1.3 Term: EIGHT (8) years and
  ZERO (0) months (“Original Term”) commencing DECEMBER 1, 2013 (“Commencement
  Date”) and ending NOVEMBER 30, 2021 (“Expiration Date”). (See also Paragraph
  3) 1.4 Early Possession: N/A (“Early Possession Date”). (See also Paragraphs
  3.2 and 3.3) 1.5 Base Rent: $27,525.00 per month (“Base Rent”), payable on
  the FIRST day of each month commencing DECEMBER 1, 2013 . (See also Paragraph
  4) If this box is checked, there are provisions in this Lease for the Base
  Rent to be adjusted. 1.6 Base Rent and Other Monies Paid Upon Execution: (a)
  Base Rent: $13,762.50 for the period DEC. 1, 2013 THROUGH DEC. 31, 2013 (b)
  Security Deposit: $0.00 (“Security Deposit”). (See also Paragraph 5) (c)
  Association Fees: $N/A for the period N/A (d) Other: $N/A for N/A (e) Total
  Due Upon Execution of this Lease: $13,762.50 . 1.7 Agreed Use: OFFICE &
  WAREHOUSE FOR LIGHT MANUFACTURING . (See also Paragraph 6) 1.8 Insuring
  Party: Lessor is the “Insuring Party” unless otherwise stated herein. (See
  also Paragraph 8) 1.9 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):
  represents Lessor exclusively (“Lessor’s Broker”); JOSEF FARRAR/NEWMARK GRUBB
  KNIGHT FRANK (NGKF) represents Lessee exclusively (“Lessee’s Broker”); or
  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 Broker the fee agreed to in their separate written agreement (or if
  there is no such agreement, the sum of PER AGREEMENT or % of the total Base
  Rent) for the brokerage services rendered by the Brokers. 1.10 Guarantor. The
  obligations of the Lessee under this Lease are to be guaranteed by N/A
  (“Guarantor”). (See also Paragraph 37) 1.11 Attachments. Attached hereto are
  the following, all of which constitute a part of this Lease: an Addendum
  consisting of Paragraphs 1 through 2 ; a plot plan depicting the Premises; a
  current set of the Rules and Regulations; a Work Letter; other (specify):
  RENT ADJUSTMENT, RENT CONCESSION AGREEMENT, ADDENDUM, ATTACHMENT, OPTION TO
  RENEW . 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, PAGE 1 OF 18 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE
  ASSOCIATION FORM STN-10-6/07E 

  






 















	
  

  	
  or that may
  have been used in calculating Rent, is an approximation which the Parties
  agree is reasonable and any payments based thereon are not subject to
  revision whether or not the actual size is more or less. Note: Lessee is
  advised to verify the actual size prior to executing this Lease. 2.2
  Condition. Lessor shall deliver the Premises to Lessee 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, heating, ventilating and air
  conditioning systems (“HVAC”), loading doors, sump pumps, if any, and all
  other such elements in the Premises, other than those constructed by Lessee,
  shall be in good operating condition on said date, that the structural
  elements of the roof, bearing walls and foundation of any buildings on the
  Premises (the “Building”) shall be free of material defects, and that the
  Premises do not contain hazardous levels of any mold or fungi defined as toxic
  under applicable state or federal law. If a non-compliance with said warranty
  exists as of the Start Date, or if one of such systems or elements should
  malfunction or fail 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) 6 months as to the HVAC systems, and (ii) 30
  days as to the remaining systems and other elements of the Building. 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 of Lessee at Lessee’s sole cost and expense.
  2.3 Compliance. Lessor warrants that to the best of its knowledge the
  improvements on the Premises comply with the building codes, applicable laws,
  covenants or restrictions of record, regulations, and ordinances (“Applicable
  Requirements”) that were in effect at the time that each improvement, or
  portion thereof, was constructed. Said warranty does not apply to the use to
  which Lessee will put the Premises, modifications which may be required by
  the Americans with Disabilities Act or any similar laws as a result of
  Lessee’s use (see Paragraph 50), or to any Alterations or Utility
  Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee.
  NOTE: Lessee is responsible for determining whether or not the 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 of 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 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 an 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 shall pay for
  such Capital Expenditure and Lessee shall only be obligated to pay, each
  month during the remainder of the term of this Lease, on the date that on which
  the Base Rent is due, an amount equal to 144th of the portion of such costs
  reasonably attributable to the Premises. Lessee shall pay Interest on the
  balance but may prepay its obligation at any time. If, however, such Capital
  Expenditure is required during the last 2 years of this Lease or if Lessor
  reasonably determines that it is not economically feasible to pay its share
  thereof, Lessor shall have the option to terminate this Lease upon 90 days
  prior written notice to Lessee unless Lessee notifies Lessor, in writing,
  within 10 days after receipt of Lessor’s termination notice that Lessee will
  pay for such Capital Expenditure. If Lessor does not elect to terminate, and
  fails to tender its share of any such Capital Expenditure, Lessee may advance
  such funds and deduct same, with Interest, from Rent until Lessor’s share of
  such costs have been fully paid. If Lessee is unable to finance Lessor’s
  share, or if the balance of the Rent due and payable for the remainder of
  this Lease is not sufficient to fully reimburse Lessee on an offset basis,
  Lessee shall have the right to terminate this Lease upon 30 days written
  notice to Lessor. (c) Notwithstanding the above, the provisions concerning
  Capital Expenditures are intended to apply only to 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 either: (i) immediately cease such changed use or
  intensity of use and/or take such other steps as may be necessary to
  eliminate the requirement for such Capital Expenditure, or (ii) complete such
  Capital Expenditure at its own expense. Lessee shall not, however, 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, promises
  or warranties concerning Lessee’s ability to honor the Lease or suitability
  to occupy the Premises, and (ii) it is Lessor’s sole responsibility to
  investigate the financial capability and/or suitability of all proposed
  tenants. 2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor in
  Paragraph 2 shall be of no force or effect if immediately prior to the Start
  Date Lessee was the owner or occupant of the Premises. In such event, Lessee
  shall be responsible for any necessary corrective work. 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 PAGE 2 OF 18 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL
  ESTATE ASSOCIATION FORM STN-10-6/07E 

  






 















	
  

  	
  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 Real Property
  Taxes and insurance premiums and to maintain the Premises) shall 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, Lessor is unable to deliver
  possession by such date, Lessor shall not be subject to any liability
  therefor, nor shall such failure affect the validity of this Lease. Lessee
  shall not, however, be obligated to pay Rent or perform its other obligations
  until Lessor delivers possession of the Premises and any period of rent
  abatement that Lessee would otherwise have enjoyed shall run from the date of
  delivery of possession and continue for a period equal to what Lessee would
  otherwise have enjoyed under the terms hereof, but minus any days of delay
  caused by the acts or omissions of Lessee. If possession is not delivered
  within 60 days after the Commencement Date, Lessee may, at its option, by
  notice in writing within 10 days after the end of such 60 day period, cancel
  this Lease, in which event the Parties shall be discharged from all
  obligations hereunder. If such written notice is not received by Lessor
  within said 10 day period, Lessee’s right to cancel shall terminate. If
  possession of the Premises is not delivered within 120 days after the
  Commencement Date, this Lease shall terminate unless other agreements are
  reached between Lessor and Lessee, in writing. 3.4 Lessee Compliance. Lessor
  shall not be required to deliver possession of the Premises to Lessee until
  Lessee complies with its obligation to provide evidence of insurance
  (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required
  to perform all of its obligations under this Lease from and after the Start
  Date, including the payment of Rent, 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
  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. All monetary amounts shall be rounded to the nearest whole dollar. In
  the event that any invoice prepared by Lessor is inaccurate such inaccuracy
  shall not constitute a waiver and Lessee shall be obligated to pay the amount
  set forth in this Lease. Rent for any period during the term hereof which is
  for less than one full calendar month shall be prorated based upon the actual
  number of days of said month. Payment of Rent shall be made to Lessor at its
  address stated herein or to such other persons or place as Lessor may from
  time to time designate in writing. Acceptance of a payment which is less than
  the amount then due shall not be a waiver of Lessor’s rights to the balance
  of such Rent, regardless of Lessor’s endorsement of any check so stating. In
  the event that any check, draft, or other instrument of payment given by
  Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor
  the sum of $25 in addition to any Late Charge and Lessor, at its option, may
  require all future Rent be paid by cashier’s check. Payments will be applied
  first to accrued late charges and attorney’s fees, second to accrued
  interest, then to Base Rent and Common Area Operating Expenses, and any
  remaining amount to any other outstanding charges or costs. 4.3 Initials 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 already due
  Lessor, for Rents which will be due in the future, and/ 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. 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.
  Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow
  in the Premises any pets, animals, birds, fish, or reptiles. 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. 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. PAGE 3 OF 18 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE
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  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 its if 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, ordinary office supplies (copier toner, liquid
  paper, glue, etc.) and common household cleaning materials, so long as such
  use is in compliance with all Applicable Requirements, is not a Reportable
  Use, and does not expose the Premises or neighboring property to any
  meaningful risk of contamination or damage or expose Lessor to any liability
  therefor. In addition, Lessor may condition its consent to any Reportable Use
  upon receiving such additional assurances as Lessor reasonably deems
  necessary to protect itself, the public, the Premises and/or the environment
  against damage, contamination, injury and/or liability, including, but not
  limited to, the installation (and removal on or before Lease expiration or
  termination) of protective modifications (such as concrete encasements)
  and/or increasing the Security Deposit. (b) Duty to Inform Lessor. If Lessee
  knows, or has reasonabie 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, comply with all Applicable
  Requirements and take all investigatory and/or remedial action reasonably
  recommended, whether or not formally ordered or required, for the cleanup of
  any contamination of, and for the maintenance, security and/or monitoring of
  the Premises or neighboring properties, that was caused or materially
  contributed to by Lessee, or pertaining to or involving any Hazardous
  Substance brought onto the Premises during the term of this Lease, by or for
  Lessee, or any third party. (d) Lessee Indemnification. Lessee shall
  indemnify, defend and hold Lessor, its agents, employees, lenders and ground
  lessor, if any, harmless from and against any and all loss of rents and/or
  damages, liabilities, judgments, claims, expenses, penalties, and attorneys’
  and consultants’ fees arising out of or involving any Hazardous Substance
  brought onto the Premises by or for Lessee, or any third party (provided,
  however, that Lessee shall have no liability under this Lease with respect to
  underground migration of any Hazardous Substance under the Premises from
  adjacent properties not caused or contributed to by Lessee). Lessee’s
  obligations shall include, but not be limited to, the effects of any
  contamination or injury to person, property or the environment created or
  suffered by Lessee, and the cost of investigation, removal, remediation,
  restoration and/or abatement, and shall survive the expiration or termination
  of this Lease. No termination, cancellation or release agreement entered into
  by Lessor and Lessee shall release Lessee from its obligations under this
  Lease with respect to Hazardous Substances, unless specifically so agreed by
  Lessor in writing at the time of such agreement. (e) Lessor Indemnification.
  Lessor and its successors and assigns shall indemnify, defend, reimburse and
  hold Lessee, its employees and lenders, harmless from and against any and all
  environmental damages, including the cost of remediation, which result from
  Hazardous Substances which existed on the Premises prior to Lessee’s
  occupancy or which are caused by the gross negligence or willful misconduct
  of Lessor, its agents or employees. Lessor’s obligations, as and when
  required by the Applicable Requirements, shall include, but not be limited
  to, the cost of 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 Lessee’s occupancy, 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 sole expense, fully, diligently and in a timely manner, materially
  comply with all Applicable Requirements, the requirements of any applicable
  fire insurance underwriter or rating bureau, and the recommendations of
  Lessor’s engineers and/or consultants which relate in any manner to the such
  PAGE 4 OF 18 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION
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  Requirements,
  without regard to whether such 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. Likewise, Lessee shall immediately
  give written notice to Lessor of: (i) any water damage to the Premises and
  any suspected seepage, pooling, dampness or other condition conducive to the
  production of mold; or (ii) any mustiness or other odors that might indicate
  the presence of mold in the Premises. 6.4 Inspection; Compliance. Lessor and
  Lessor’s “Lender” (as defined in Paragraph 30) and consultants shall have the
  right to enter into Premises at any time, in the case of an emergency, and
  otherwise at reasonable times after reasonable notice, for the purpose of
  inspecting the condition of the Premises and for verifying compliance by
  Lessee with this Lease. The cost of any such inspections shall be paid by
  Lessor, unless a violation of Applicable Requirements, or a Hazardous
  Substance Condition (see paragraph 9.1) 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. In addition, Lessee shall provide copies of all relevant
  material safety data sheets (MSDS) to Lessor within 10 days of the receipt of
  a written request therefor. 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, fire protection system, fixtures,
  walls (interior and exterior), foundations, ceilings, roofs, roof drainage
  systems, floors, windows, doors, plate glass, skylights, landscaping,
  driveways, parking lots, fences, retaining walls, signs, sidewalks and
  parkways located in, on, or adjacent to the Premises. 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. Lessee shall, during the term of this Lease,
  keep the exterior appearance of the Building in a first-class condition
  (including, e.g. graffiti removal) consistent with the exterior appearance of
  other similar facilities of comparable age and size in the vicinity,
  including, when necessary, the exterior repainting of the Building. (b)
  Service Contracts. Lessee shall, at Lessee’s sole 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)
  fire extinguishing systems, including fire alarm and/or smoke detection, (iv)
  landscaping and irrigation systems, (v) roof covering and drains, and (vi)
  clarifiers. *(See attachment) initials (c) Failure to Perform. If Lessee
  fails 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 pay to Lessor a sum
  equal to 115% of 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 than 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 (ie. 1/144th of the cost
  per month). Lessee shall pay interest on the unamortized balance but may
  prepay its obligation at any time. 7.2 Lessor’s Obligations. Subject to the
  provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or
  Destruction) and 14 (Condemnation), it is intended by the Parties hereto that
  Lessor have no obligation, in any manner whatsoever, to repair and maintain
  the Premises, or the equipment therein, all of which obligations are intended
  to be that of the Lessee. It is the intention of the Parties that the terms
  of this Lease govern the respective obligations of the Parties as to
  maintenance and repair of the Premises, and they expressly waive 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 and/or vacuum lines, power panels, electrical
  distribution, security and fire protection systems, communication cabling,
  lighting fixtures, HVAC equipment, plumbing, and fencing in or on the
  Premises. The term “Trade Fixtures” shall mean Lessee’s machinery and
  equipment that can be removed without doing material damage to the Premises.
  The term “Alterations” shall mean any modification of the improvements, other
  than Utility Installations or Trade Fixtures, whether by addition or
  deletion. “Lessee Owned Alterations and/or Utility Installations” are defined
  as Alterations and/or Utility Installations made by Lessee that are not yet
  owned by Lessor pursuant to Paragraph 7.4(a). (b) Consent. Lessee shall not
  make any Alterations or Utility Installations to the Premises without
  Lessor’s prior written consent. 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, will not affect the electrical, plumbing,
  HVAC, and/or life safety systems, and the cumulative cost thereof during this
  Lease as extended does not exceed a sum equal to 3 month’s Base Rent in the
  Notwithstanding the foregoing, Lessee shall not PAGE 5 OF 18 INITIALS
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  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 ail applicable governmental permits, (ii) furnishing
  Lessor with copies of both the permits and the plans and specifications prior
  to commencement of the work, and (iii) compliance with all conditions of said
  permits and other Applicable Requirements in a prompt and expeditious manner.
  Any Alterations or Utility Installations shall be performed in a workmanlike
  manner with good and sufficient materials. Lessee shall promptly upon
  completion furnish Lessor with 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. Initials (c) Liens; Bonds. Lessee shall pay, when due, all claims for
  labor or materials furnished or alleged to have been furnished to or for
  Lessee at or for use on the Premises, which claims are or may be secured by
  any mechanic’s or materialmen’s lien against the Premises or any interest
  therein. Lessee shall give Lessor not less than 10 days notice prior to the
  commencement of any work in, on or about the Premises, and Lessor shall have
  the right to post notices of non-responsibility. If Lessee shall contest the
  validity of any such lien, claim or demand, then Lessee shall, at its sole
  expense defend and protect itself. Lessor and the Premises against the same
  and shall pay and satisfy any such adverse judgment that may be rendered
  thereon before the enforcement thereof. If Lessor shall require, Lessee shall
  furnish a surety bond in an amount equal to 150% of the amount of such
  contested lien, claim or demand, indemnifying Lessor against liability for
  the same. If Lessor elects to participate in any such action, Lessee shall
  pay Lessor’s reasonable attorneys’ fees and costs. Initials 7.4 Ownership;
  Removal; Surrender; and Restoration. (a) Ownership. Subject to Lessor’s right
  to require removal or elect ownership as hereinafter provided, all
  Alterations and Utility Installations made by Lessee shall be the property of
  Lessee, but considered a part of the Premises. Lessor may, 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. (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 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
  completely remove from the Premises any and all Hazardous Substances brought
  onto the Premises by or for Lessee, or any third party (except Hazardous
  Substances which were deposited via underground migration from areas outside
  of the Premises, or if applicable, the Premises) 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. Any personal property of Lessee not removed on or before
  the Expiration Date or any earlier termination date shall be deemed to have
  been abandoned by Lessee and may be disposed of or retained by Lessor as
  Lessor may desire. 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 For Insurance. Lessee shall pay
  for all insurance required under Paragraph 8 except to the extent of the cost
  attributable to liability insurance carried by Lessor under Paragraph 8.2(b)
  in excess of $2,000,000 per occurrence. Premiums for policy periods
  commencing prior to or extending beyond the Lease term shall be prorated to
  correspond to the Lease term. Payment shall be made by Lessee to Lessor
  within 10 days following receipt of an invoice. 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
  $1,000,000 per occurrence with an annual aggregate of not less than
  $2,000,000. Lessee shall add Lessor as an additional insured by means of an
  endorsement at least as broad as the Insurance Service Organization’s
  “Additional Insured-Managers or Lessors of Premises” Endorsement. 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. Lessee shall provide an endorsement on its liability policy(ies)
  which provides that its insurance shall be primary to and not contributory
  with any similar insurance carried by Lessor, whose insurance shall be
  considered excess insurance only. Initials (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. The Insuring Party shall obtain and keep in force a policy or
  policies 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 insurable 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. If Lessor is the Insuring
  Party, however, Lessee Owned Alterations and Utility Installations, Trade
  Fixtures, and Lessee’s personal property shall be insured by Lessee under
  Paragraph 8.4 rather than by Lessor. If the. PAGE 6 OF 18 INITIALS INITIALS
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  coverage is
  available and commercially appropriate, such policy or policies shall insure
  against all risks of direct physical loss or damage (except the perils of
  flood and/or earthquake unless required by a Lender), including coverage for
  debris removal and the enforcement of any Applicable Requirements requiring
  the upgrading, demolition, reconstruction or replacement of any portion of
  the Premises as the result of a covered loss. Said policy or policies shall
  also contain an agreed valuation provision in lieu of any coinsurance clause,
  waiver of subrogation, and inflation guard protection causing an increase in
  the annual property insurance coverage amount by a factor of not less than
  the adjusted U.S. Department of Labor Consumer Price Index for All Urban
  Consumers for the city nearest to where the Premises are located. If such
  insurance coverage has a deductible clause, the deductible amount shall not
  exceed $1,000 per occurrence, and Lessee shall be liable for such deductible
  amount in the event of an Insured Loss. (b) Rental Value. The Insuring Party
  shall 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. Lessee shall be liable for
  any deductible amount in the event of such loss. (c) Adjacent Premises. If
  the Premises are part of a larger building, or of a group of buildings owned
  by Lessor which are adjacent to the Premises, the Lessee shall pay for any
  increase in the premiums for the property insurance of such building or
  buildings if said increase is caused by Lessee’s acts, omissions, use or
  occupancy of the Premises. 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. Lessee shall provide Lessor with written evidence that such
  insurance is in force. Initials (b) Business Interruption. Lessee shall obtain
  and maintain loss of income and extra expense insurance in amounts as will
  reimburse Lessee for direct or indirect loss of earnings attributable to all
  perils commonly insured against by prudent lessees in the business of Lessee
  or attributable to prevention of access to the Premises as a result of such
  perils. (c) No Representation of Adequate Coverage. Lessor makes no
  representation that the limits or forms of coverage of insurance specified
  herein are adequate to cover Lessee’s property, business operations or
  obligations under this Lease. 8.5 Insurance Policies. Insurance required
  herein shall be by companies duly licensed or admitted to transact business
  in the state where the Premises are located, and maintaining during the
  policy term a “General Policyholders Rating” of at least A-, VI, as set forth
  in the most current issue of “Best’s Insurance Guide”, or such other rating
  as may be required by a Lender. Lessee shall not do or permit to be done
  anything which invalidates the required insurance policies. Lessee shall,
  prior to the Start Date, deliver to Lessor certified copies of policies of
  such insurance or certificates evidencing the existence and amounts of the
  required insurance. No such policy shall be cancelable or subject to
  modification except after 30 days prior written notice to Lessor. Lessee
  shall, at least 10 days prior to the expiration of such policies, furnish
  Lessor with evidence of renewals or “insurance binders” evidencing renewal
  thereof, or Lessor may order such insurance and charge the cost thereof to
  Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such
  policies shall be for a term of at least one year, or the length of the
  remaining term of this Lease, whichever is less. If either Party shall fail
  to procure and maintain the insurance required to be carried by it, the other
  Party may, but shall not be required to, procure and maintain the same. 8.6
  Waiver of Subrogation. Without affecting any other rights or remedies, Lessee
  and Lessor each hereby release and relieve the other, and waive their entire
  right to recover damages against the other, for loss of or damage to its
  property arising out of or incident to the perils required to be insured
  against herein. The effect of such releases and waivers is not limited by the
  amount of insurance carried or required, or by any deductibles applicable
  hereto. The Parties agree to have their respective property damage insurance
  carriers waive any right to subrogation that such companies may have against
  Lessor or Lessee, as the case may be, so long as the insurance is not
  invalidated thereby. 8.7 Indemnity. Except for Lessor’s gross negligence or
  willful misconduct, Lessee shall indemnify, protect, defend and hold harmless
  the Premises, Lessor and its agents, Lessor’s master or ground lessor,
  partners and Lenders, from and against any and all claims, loss of rents
  and/or damages, liens, judgments, penalties, 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 and its Agents
  from Liability. Notwithstanding the negligence or breach of this Lease by
  Lessor or its agents, neither Lessor nor its agents shall be liable under any
  circumstances for: (i) 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, indoor air quality, 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 of which the Premises are a part, or from
  other sources or places, (ii) any damages arising from any act or neglect of
  any other tenant of Lessor or from the failure of Lessor or its agents to
  enforce the provisions of any other lease in the Project, or (iii) injury to
  Lessee’s business or for any loss of income or profit therefrom. Instead, it
  is intended that Lessee’s sole recourse in the event of such damages or
  injury be to file a claim on the insurance policy(ies) that Lessee is
  requited to maintain pursuant to the provisions of paragraph 8. Initials 8.9
  Failure to Provide Insurance. Lessee acknowledges that any failure on its
  part to obtain or maintain the insurance required herein will expose Lessor
  to risks and potentially cause Lessor to incur costs not contemplated by this
  Lease, the extent of which will be extremely difficult to ascertain.
  Accordingly, for any month or portion thereof that Lessee does not maintain
  the required insurance and/or does not provide Lessor with the required
  binders or certificates evidencing the existence of the required insurance,
  the Base Rent shall be automatically increased, without any requirement for
  notice to Lessee, by an amount equal to 10% of the then existing Base Rent or
  $100, whichever is greater. The parties agree that such increase in Base Rent
  represents fair and reasonable compensation for the additional risk/costs
  that Lessor will incur by reason of Lessee’s failure to maintain the required
  insurance. Such increase in Base Rent shall in no event constitute a waiver
  of Lessee’s Default or Breach with respect to the failure to maintain such
  insurance, prevent the exercise of any of the other rights and remedies
  granted hereunder, nor relieve Lessee of its obligation to maintain the
  insurance specified in this Lease. PAGE 7 OF 18 INITIALS INITIALS ©2001 - AIR
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  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 6
  months or less from the date of the damage or destruction. 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. Notwithstanding
  the foregoing, Premises Partial Damage shall not include damage to windows,
  doors, and/or other similar items which Lessee has the responsibility to
  repair or replace pursuant to the provisions of Paragraph 7.1., except as
  provided in Section 7,1 (d) Initials (b) “Premises Total Destruction” shall
  mean damage or destruction to the Premises, other than Lessee Owned
  Alterations and Utility Installations and Trade Fixtures, which cannot
  reasonably be repaired in 6 months or less from the date of the damage or
  destruction. 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 mean 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 which
  requires repair, remediation, or restoration. 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 $10,000 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 (except as to the deductible
  which is Lessee’s responsibility) as and when required to complete said
  repairs. In the event, however, such shortage was due to the fact that, by
  reason of the unique nature of the improvements, full replacement cost
  insurance coverage was not commercially reasonable and available, Lessor
  shall have no obligation to pay for the shortage in insurance proceeds or to
  fully restore the unique aspects of the Premises unless Lessee provides
  Lessor with the funds to cover same, or adequate assurance thereof, within 10
  days following receipt of written notice of such shortage and request therefor.
  If Lessor receives said funds or adequate assurance thereof within said 10
  day period, the party responsible for making the repairs shall complete them
  as soon as reasonably possible and this Lease shall remain in full force and
  effect. If such funds or assurance are not received, Lessor may nevertheless
  elect by written notice to Lessee within 10 days thereafter to: (i) make such
  restoration and repair as is commercially reasonable with Lessor paying any
  shortage in proceeds, in which case this Lease shall remain in full force and
  effect, or (ii) have this Lease terminate 30 days thereafter. Lessee shall
  not be entitled to reimbursement of any funds contributed by Lessee to repair
  any such damage or destruction. Premises Partial Damage due to flood or
  earthquake shall be subject to Paragraph 9.3, notwithstanding that there may
  be some insurance coverage, but the net proceeds of any such insurance shall
  be made available for the repairs if made by either Party. * (See attachment)
  Initials 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. *(See attachment) Initials
  9.5 Damage Near End of Term. If at any time during the last 6 months of this
  Lease there is damage for which the cost to repair exceeds one month’s Base
  Rent, whether or not an Insured Loss, Lessor may terminate this Lease
  effective 60 days following the date of occurrence of such damage by giving a
  written termination notice to Lessee within 30 days after the date of
  occurrence of such damage. Notwithstanding the foregoing, if Lessee at that
  time has an exercisable option to extend this Lease or to purchase the
  Premises, then Lessee may preserve this Lease by, (a) exercising such option
  and (b) providing Lessor with any shortage in insurance proceeds (or adequate
  assurance thereof) needed to make the repairs on or before the earlier of (i)
  the date which is 10 days after Lessee’s receipt of Lessor’s written notice
  purporting to terminate this Lease, or (ii) the day prior to the date upon
  which such option expires. If Lessee duly exercises such option during such
  period and provides Lessor with funds (or adequate assurance thereof) to
  cover any shortage in insurance proceeds, Lessor shall, at Lessor’s commercially
  reasonable expense, repair such damage as soon as reasonably possible and
  this Lease shall continue in full force and effect. If Lessee fails to
  exercise such option and provide such funds or assurance during such period,
  then this Lease shall terminate on the date specified in the termination
  notice and Lessee’s option shall be extinguished. 9.6 Abatement of Rent;
  Lessee’s Remedies. (a) Abatement. In the event of Premises Partial Damage or
  Premises Total Destruction or a Hazardous Substance Condition for which
  Lessee is not responsible under this Lease, the Rent payable by Lessee for
  the period required for the repair, remediation or restoration of such damage
  shall be abated in proportion to the degree to which Lessee’s use of the
  Premises is impaired, but All other obligations of Lessee hereunder shall be
  performed by Lessee, and Lessor shall have no liability for any such PAGE 8
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  damage,
  destruction, remediation, repair or restoration except as provided herein.
  (b) Remedies. If Lessor is obligated to repair or restore the Premises and
  does not commence, in a substantial and meaningful way, such repair or
  restoration within 60 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 any remaining portion of Lessee’s Security
  Deposit as is not then required to be, used by Lessor. 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 Premises or 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 Building 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 Premises are
  located. Real Property Taxes shall also include any tax, fee, levy,
  assessment or charge, or any increase therein: (i) imposed by reason of
  events occurring during the term of this Lease, and (ii) levied of assessed
  on machinery or equipment provided by Lessor to Lessee pursuant to this
  Lease. 10.2 Payment of Taxes. In addition to Base Rent, Lessee shall pay to
  Lessor an amount equal to the Real Property Tax installment due at least 20
  days prior to the applicable delinquency date. If any such installment shall
  cover any period of time prior to or after the expiration or termination of
  this Lease, Lessee’s share of such installment shall be prorated. In the
  event Lessee incurs a late charge on any Rent payment, Lessor may estimate
  the current Real Property Taxes, and require that such taxes be paid in
  advance to Lessor by Lessee monthly in advance with the payment of the Base
  Rent. Such monthly payments shall be an amount equal to the amount of the
  estimated installment of taxes divided by the number of months remaining
  before the month in which said installment becomes delinquent. When the
  actual amount of the applicable tax bill is known, the amount of such equal
  monthly advance payments shall be adjusted as required to provide the funds
  needed to pay the applicable taxes. If the amount collected by Lessor is
  insufficient to pay such Real Property Taxes when due, Lessee shall pay
  Lessor, upon demand, such additional sum as is necessary. Advance payments
  may be intermingled with other moneys of Lessor and shall not bear interest.
  In the event of a Breach by Lessee in the performance of its obligations
  under this Lease, then any such advance payments may be treated by Lessor as
  an additional Security Deposit. 10.3 Joint Assessment. If the Premises are
  not separately assessed, Lessee’s liability 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 conclusively determined
  by Lessor from the respective valuations assigned in the assessor’s work
  sheets or such other information as may be reasonably available. 10.4
  Personal Property Taxes. Lessee shall pay, prior to delinquency, all taxes
  assessed against and levied upon Lessee Owned Alterations, Utility
  Installations, Trade Fixtures, furnishings, equipment and all personal
  property of Lessee. 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 setting
  forth the taxes applicable to Lessee’s property. 11. Utilities and Services.
  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. If any such services are not separately metered or
  billed to Lessee, Lessee shall pay a reasonable proportion, to be determined by
  Lessor, of all charges jointly metered or billed. There shall be no abatement
  of rent and Lessor shall not be liable in any respect whatsoever for the
  inadequacy, stoppage, interruption or discontinuance of any utility or
  service due to riot, strike, labor dispute, breakdown, accident, repair or
  other cause beyond Lessor’s reasonable control or in cooperation with
  governmental request or directions. 12. Assignment and Subletting. 12.1
  Lessor’s Consent Required. (a) Lessee shall not voluntarily or by operation
  of law assign, transfer, mortgage or encumber (collectively, “assign or
  assignment”) or sublet all or any part of Lessee’s interest in this Lease or
  in the Premises without Lessor’s prior written consent. (b) Unless Lessee is
  a corporation and its stock is publicly traded on a national stock exchange,
  a change in the control of Lessee shall constitute an assignment requiring
  consent. 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 PAGE 9 OF 18 INITIALS
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   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. (f) Lessor may reasonably withhold consent to a
  proposed assignment or subletting if Lessee is in Default at the time consent
  is requested. (g) Notwithstanding the foregoing, allowing a de minimis
  portion of the Premises, ie. 20 square feet or less, to be used by a third
  party vendor in connection with the installation of a vending machine or
  payphone shall not constitute a subletting. 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 Breach. (c) Lessor’s consent to
  any assignment or subletting shall not constitute a consent to any subsequent
  assignment or subletting. (d) In the event of any Default or Breach by
  Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone
  else responsible for the performance of Lessee’s obligations under this
  Lease, including any assignee or sublessee, without first exhausting Lessor’s
  remedies against any other person or entity responsible therefor to Lessor,
  or any security held by Lessor. (e) Each request for consent to an assignment
  or subletting shall be in writing, accompanied by information relevant to Lessor’s
  determination as to the financial and operational responsibility and
  appropriateness of the proposed assignee or sublessee, including but not
  limited to the intended use and/or required modification of the Premises, if
  any, together with a fee of $500 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. (See also Paragraph 36) (f) Any assignee of, or sublessee under,
  this Lease shall, by reason of accepting such assignment, entering into such
  sublease, or entering into possession of the Premises or any portion thereof,
  be deemed to have assumed and agreed to conform and comply with each and
  every term, covenant, condition and obligation herein to be observed or
  performed by Lessee during the term of said assignment or sublease, other
  than such obligations as are contrary to or inconsistent with provisions of
  an assignment or sublease to which Lessor has specifically consented to in
  writing. (g) Lessor’s consent to any assignment or subletting shall not
  transfer to the assignee or sublessee any Option granted to the original
  Lessee by this Lease unless such transfer is specifically consented to by
  Lessor in writing. (See Paragraph 39.2) 12.3 Additional Terms and Conditions
  Applicable to Subletting. The following terms and conditions shall apply to
  any subletting by Lessee of all or any part of the Premises and shall be
  deemed included in all subleases under this Lease whether or not expressly
  incorporated therein: (a) Lessee hereby assigns and transfers to Lessor all
  of Lessee’s interest in all Rent payable on any sublease, and Lessor may
  collect such Rent and apply same toward Lessee’s obligations under this Lease;
  provided, however, that until a Breach shall occur in the performance of
  Lessee’s obligations, Lessee may collect said Rent. In the event that the
  amount collected by Lessor exceeds Lessee’s then outstanding obligations any
  such excess shall be refunded to Lessee. Lessor shall not, by reason of the
  foregoing or any assignment of such sublease, nor by reason of the collection
  of Rent, be deemed liable to the sublessee for any failure of Lessee to
  perform and comply with any of Lessee’s obligations to such sublessee. Lessee
  hereby irrevocably authorizes and directs any such sublessee, upon receipt of
  a written notice from Lessor stating that a Breach exists in the performance
  of Lessee’s obligations under this Lease, to pay to Lessor all Rent due and
  to become due under the sublease. Sublessee shall rely upon any such notice
  from Lessor and shall pay all Rents to Lessor without any obligation or right
  to inquire as to whether such Breach exists, notwithstanding any claim from
  Lessee to the contrary. (b) In the event of a Breach by Lessee, Lessor may,
  at its option, require sublessee to attorn to Lessor, in which event Lessor
  shall undertake the obligations of the sublessor under such sublease from the
  time of the exercise of said option to the expiration of such sublease;
  provided, however, Lessor shall not be liable for any prepaid rents or
  security deposit paid by such sublessee to such sublessor or for any prior
  Defaults or Breaches of such sublessor. (c) Any matter requiring the consent
  of the sublessor 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 Premises
  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. (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 surety 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. THE ACCEPTANCE
  BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT
  CONSTITUTE A WAIVER OF ANY OF LESSOR’S RIGHTS, INCLUDING LESSOR’S RIGHT TO RECOVER
  POSSESSION OF THE PREMISES. (c) The failure of Lessee to allow Lessor and/or
  its agents access to the Premises or the commission of waste, act or acts
  constituting public or private nuisance, and/or an illegal activity on the
  Premises by Lessee, where such actions continue for a period of 3 business
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   following written notice to Lessee. “(See
  Attachment) (d) 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 or financial statements, (v) a requested
  subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii)
  any document requested under Paragraph 42, (viii) material safety data sheets
  (MSDS), or (ix) 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 of 10 days following written notice to Lessee.
  (e) A Default by Lessee as to the terms, covenants, conditions or provisions
  of this Lease, or of the rules adopted under Paragraph 40 hereof, other than those
  described in subparagraphs 13.1(a), (b), (c) or (d), 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 cure to completion. (f) 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
  of Lessee’s assets located at the Premises or of Lessee’s interest in this
  Lease, where such seizure is not discharged within 30 days; provided,
  however, in the event that any provision of this subparagraph is contrary to any
  applicable law, such provision shall be of no force or effect, and not affect
  the validity of the remaining provisions. (g) The discovery that any
  financial statement of Lessee or of any Guarantor given to Lessor was
  materially false. (h) If the performance of Lessee’s obligations under this
  Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a
  Guarantor’s liability with respect to this Lease other than in accordance
  with the terms of such guaranty, (iii) a Guarantor’s becoming insolvent or
  the subject of a bankruptcy filing, (iv) a Guarantor’s refusal to honor the
  guaranty, or (v) a Guarantor’s breach of its guaranty obligation on an
  anticipatory basis, and Lessee’s failure, within 60 days following written
  notice of any such event, to provide written alternative assurance or
  security, which, when coupled with the then existing resources of Lessee,
  equals or exceeds the combined financial resources of Lessee and the
  Guarantors that existed at the time of execution of this Lease. 13.2
  Remedies. If Lessee fails to perform any of its affirmative duties or
  obligations, within 10 days after written notice (or in case of an emergency,
  without notice), Lessor may, at its option, perform such duty or obligation
  on Lessee’s behalf, including but not limited to the obtaining of reasonably
  required bonds, insurance policies, or governmental licenses, permits or
  approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs
  and expenses incurred by Lessor in such performance upon receipt of an
  invoice therefor. In the event of a Breach, Lessor may, with or without
  further notice or demand, and without limiting Lessor in the exercise of any
  right or remedy which Lessor may have by reason of such Breach: (a) Terminate
  Lessee’s right to possession of the Premises by any lawful means, in which
  case this Lease shall terminate and Lessee shall immediately surrender
  possession to Lessor. In such event Lessor shall be entitled to recover from
  Lessee: (i) the unpaid Rent which had been earned at the time of termination;
  (ii) the worth at the time of award of the amount by which the unpaid rent
  which would have been earned after termination until the time of award
  exceeds the amount of such rental loss that the Lessee proves could have been
  reasonably avoided; (iii) the worth at the time of award of the amount by
  which the unpaid rent for the balance of the term after the time of award
  exceeds the amount of such rental loss that the Lessee proves could be
  reasonably avoided; and (iv) any other amount necessary to compensate Lessor
  for all the detriment proximately caused by the Lessee’s failure to perform
  its obligations under this Lease or which in the ordinary course of things
  would be likely to result therefrom, including but not limited to the cost of
  recovering possession of the Premises, expenses of reletting, including
  necessary renovation and alteration of the Premises, reasonable attorneys’
  fees, and that portion of any leasing commission paid by Lessor in connection
  with this Lease applicable to the unexpired term of this Lease. The worth at
  the time of award of the amount referred to in provision (iii) of the
  immediately preceding sentence shall be computed by discounting such amount
  at the discount rate of the Federal Reserve Bank of the District within which
  the Premises are located at the time of award plus one percent. Efforts by
  Lessor to mitigate damages caused by Lessee’s Breach of this Lease shall not
  waive Lessor’s right to recover damages under Paragraph 12. If termination of
  this Lease is obtained through the provisional remedy of unlawful detainer,
  Lessor shall have the right to recover in such proceeding any unpaid Rent and
  damages as are recoverable therein, or Lessor may reserve the right to
  recover all or any part thereof in a separate suit. If a notice and grace
  period required under Paragraph 13.1 was not previously given, a notice to
  pay rent or quit, or to perform or quit given to Lessee under the unlawful
  detainer statute shall also constitute the notice required by Paragraph 13.1.
  In such case, the applicable grace period required by Paragraph 13.1 and the
  unlawful detainer statute shall run concurrently, and the failure of Lessee
  to cure the Default within the greater of the two such grace periods shall
  constitute both an unlawful detainer and a Breach of this Lease entitling
  Lessor to the remedies provided for in this Lease and/or by said statute. (b)
  Continue the Lease and Lessee’s right to possession and recover the Rent as
  it becomes due, in which event Lessee may sublet or assign, subject only to
  reasonable limitations. Acts of maintenance, efforts to relet, and/or the
  appointment of a receiver to protect the Lessor’s interests, shall not
  constitute a termination of the Lessee’s right to possession. (c) Pursue any
  other remedy now or hereafter available under the laws or judicial decisions
  of the state wherein the Premises are located. The expiration or termination
  of this Lease and/or the termination of Lessee’s right to possession shall
  not relieve Lessee from liability under any indemnity provisions of this
  Lease as to matters occurring or accruing during the term hereof or by reason
  of Lessee’s occupancy of the Premises. 13.3 Inducement Recapture. Any
  agreement for free or abated rent or other charges, or for the giving or
  paying by Lessor to or for Lessee of any cash or other bonus, inducement or
  consideration for Lessee’s entering into this Lease, all of which concessions
  are hereinafter referred to as “Inducement Provisions,” shall be deemed
  conditioned upon Lessee’s full and faithful performance of all of the terms,
  covenants and conditions of this Lease. Upon Breach of this Lease by Lessee,
  any such Inducement Provision shall automatically be deemed deleted from this
  Lease and of no further force or effect, and any rent, other charge, bonus,
  inducement or consideration theretofore abated, given or paid by Lessor under
  such an inducement Provision shall be immediately due and payable by Lessee
  to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The
  acceptance by Lessor of rent or the cure of the Breach which initiated the
  operation of this paragraph shall not be deemed a waiver by Lessor of the
  provisions of this paragraph unless specifically so stated in writing by
  Lessor at the time of such acceptance. 13.4 Late Charges. Lessee hereby
  acknowledges that late payment by Lessee of Rent will cause Lessor to incur
  costs not contemplated by this Lease, the exact amount of which will be
  extremely difficult to ascertain. Such costs include, but are not limited to,
  processing and accounting charges, and late charges which may be imposed upon
  Lessor by any Lender. Accordingly, if any Rent shall not be received by
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   within 5 days after such amount shall be
  due, then, without any requirement for notice to Lessee, Lessee shall
  immediately 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
  Breach with respect to such overdue amount, nor prevent the exercise of any
  of the other rights and remedies granted hereunder. In the event that a late
  charge is payable hereunder, whether or not collected, for 3 consecutive
  installments of Base Rent, then notwithstanding any provision of this Lease
  to the contrary, Base Rent shall, at Lessor’s option, become due and payable
  quarterly in advance. 13.5 Interest. Any monetary payment due Lessor
  hereunder, other than late charges, not received by Lessor, when due as to
  scheduled payments (such as Base Rent) or within 30 days following the date
  on which it was due for non-scheduled payment, shall bear interest from the
  date when due, as to scheduled payments, or the 31 st day after it was due as
  to non-scheduled payments. The interest (“Interest”) charged shall be
  computed at the rate of 10% per annum but shall not exceed the maximum rate
  allowed by law. Interest is payable in addition to the potential late charge
  provided for in Paragraph 13.4. 13.6 Breach by Lessor. (a) Notice of Breach.
  Lessor shall not be deemed in breach of this Lease unless Lessor fails within
  a reasonable time to perform an obligation required to be performed by
  Lessor. For purposes of this Paragraph, a reasonable time shall in no event
  be less than 30 days after receipt by Lessor, and any Lender whose name and
  address shall have been furnished Lessee in writing for such purpose, of
  written notice specifying wherein such obligation of Lessor has not been
  performed; provided, however, that if the nature of Lessor’s obligation is
  such that more than 30 days are reasonably required for its performance, then
  Lessor shall not be in breach if performance is commenced within such 30 day
  period and thereafter diligently pursued to completion. (b) Performance by
  Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures
  said breach within 30 days 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
  the actual and reasonable cost to perform such cure, provided, however, that
  such offset shall not exceed an amount equal to the greater of one month’s
  Base Rent or the Security Deposit, reserving Lessee’s right to seek
  reimbursement from Lessor for any such expense in excess of such offset.
  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 Building, or more
  than 25% of that portion of the Premises not occupied by any building, 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 paid by the condemnor 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. 15.3
  Representations and Indemnities of Broker Relationships. Lessee and Lessor
  each represent and warrant to the other that it has had no dealings with any
  person, firm, broker or finder (other than the Brokers, if any) in connection
  with this Lease, and that no one other than said named Brokers is entitled to
  any commission or finder’s fee in connection herewith. Lessee and Lessor do
  each hereby agree to indemnify, protect, defend and hold the other harmless
  from and against liability for compensation or charges which may be claimed
  by any such unnamed broker, finder or other similar party by reason of any
  dealings or actions of the indemnifying Party, including any costs, expenses,
  attorneys’ fees reasonably incurred with respect thereto. 16. Estoppel
  Certificates. (a) Each Party (as “Responding Party”) shall within 10 days
  after written notice from the other Party (the “Requesting Party”) execute,
  acknowledge and deliver to the Requesting Party a statement in writing in
  form similar to the then most current “Estoppel Certificate” form published
  by the AIR Commercial Real Estate Association, plus such additional
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   requested by the Requesting Party. (b) If
  the Responding Party shall fail to execute or deliver the Estoppel Certificate
  within such 10 day period, the Requesting Party may execute an Estoppel
  Certificate stating that: (i) the Lease is in full force and effect without
  modification except as may be represented by the Requesting Party, (ii) there
  are no uncured defaults in the Requesting Party’s performance, and (iii) if
  Lessor is the Requesting Party, not more than one month’s rent has been paid
  in advance. Prospective purchasers and encumbrancers may rely upon the
  Requesting Party’s Estoppel Certificate, and the Responding Party shall be
  estopped from denying the truth of the facts contained in said Certificate.
  (c) If Lessor desires to finance, refinance, or sell the Premises, or any
  part thereof, Lessee and all Guarantors shall within 10 days after written
  notice from Lessor 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.
  Upon such transfer or assignment and delivery of the Security Deposit, as
  aforesaid, the prior Lessor shall be relieved of all liability with respect
  to the obligations and/or covenants under this Lease thereafter to be
  performed by the Lessor. Subject to the foregoing, the obligations and/or
  covenants in this Lease to be performed by the Lessor shall be binding only
  upon the Lessor as hereinabove defined. 18. Severability. The invalidity of
  any provision of this Lease, as determined by a court of competent
  jurisdiction, shall in no way affect the validity of any other provision
  hereof. 19. Days. Unless otherwise specifically indicated to the contrary,
  the word “days” as used in this Lease shall mean and refer to calendar days.
  20. Limitation on Liability. The obligations of Lessor under this Lease shall
  not constitute personal obligations of Lessor or its partners, members,
  directors, officers or shareholders, and Lessee shall look to the 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
  Lessor’s partners, members, directors, officers or shareholders, or any of
  their personal assets for such satisfaction. 21. Time of Essence. Time is of
  the essence with respect to the performance of all obligations to be
  performed or observed by the Parties under this Lease. 22. No Prior or Other
  Agreements; Broker Disclaimer. This Lease contains all agreements between the
  Parties with respect to any matter mentioned herein, and no other prior or
  contemporaneous agreement or understanding shall be effective. Lessor and
  Lessee each represents and warrants to the Brokers that it has made, and is
  relying solely upon, its own investigation as to the nature, quality,
  character and financial responsibility of the other Party to this Lease and
  as to the use, nature, quality and character of the Premises. Brokers have no
  responsibility with respect thereto or with respect to any default or breach
  hereof by either Party. 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 72 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. (a) 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. (b) 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. (C) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL
  GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE
  PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH PAGE 13
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   STATUTE IS INCONSISTENT WITH THIS LEASE. 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 read all agreements to assure
  that they adequately express their understanding of the transaction. A real
  estate agent is a person qualified to advise about real estate. If legal or
  tax advice is desired, consult a competent professional. (b) Brokers have no
  responsibility with respect to any default or breach hereof by either Party.
  The Parties agree that no lawsuit or other legal proceeding involving any
  breach of duty, error or omission relating to this Lease may be brought
  against Broker more than one year after the Start Date and that the liability
  (including court costs and attorneys’ fees), of any Broker with respect to
  any such lawsuit and/or legal proceeding 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) Lessor and Lessee agree
  to identify to Brokers as “Confidential” any communication or information given
  Brokers that is considered by such Party to be confidential. 26. No Right To
  Holdover. Lessee has no right to retain possession of the Premises or any
  part thereof beyond the expiration or termination of this Lease. In the event
  that Lessee holds over, then the Base Rent shall be increased to 125% 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 Devise 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 the new owner, this Lease will automatically become a new lease
  between Lessee and such new owner, and (ii) Lessor shall thereafter be
  relieved of any further obligations hereunder and such new owner shall assume
  all of Lessor’s obligations, except that such new owner shall not: (a) be
  liable for any act or omission of any prior lessor or with respect to events
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   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 which was not paid or credited
  to such new owner. 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, if requested by Lessee, 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 after reasonable prior notice for the purpose
  of showing the same to prospective purchasers, lenders, or tenants, and making
  such alterations, repairs, improvements or additions to the Premises as
  Lessor may deem necessary or desirable and the erecting, using and
  maintaining of utilities, services, pipes and conduits through the Premises
  and/or other premises as long as there is no material adverse effect to
  Lessee’s use of the Premises. All such activities shall be without abatement
  of rent or liability to Lessee. * (See attachment) 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. Signs. Lessor may place on the Premises ordinary “For Sale”
  signs at any time and ordinary “For Lease” signs during the last 6 months of
  the term hereof. Except for ordinary “for sublease” signs, Lessee shall not
  place any sign upon the Premises without Lessor’s prior written consent. All
  signs must comply with all Applicable Requirements. 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 lesser 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 lesser
  interest, shall constitute Lessor’s election to have such event constitute
  the termination of such interest. 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 withheld 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.
  (RESERVED) 38. Quiet Possession. Subject to payment by Lessee of the Rent and
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   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 or reduce the term
  of or renew this Lease or to extend or reduce the term of 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, the right of first offer 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 validly exercised. 39.4 Effect of Default
  on Options. (a) Lessee shall have no right to exercise an Option: (i) during
  the period commencing with the giving of any notice of Default and continuing
  until said Default is cured, (ii) during the period of time any Rent is
  unpaid (without regard to whether notice thereof is given Lessee), (iii)
  during the time Lessee is in Breach of this Lease, or (iv) in the event that
  Lessee has been given 3 or more notices of separate Default, whether or not
  the Defaults are cured, during the 12 month period immediately preceding the
  exercise of the Option. (b) The period of time within which an Option may be
  exercised shall not be extended or enlarged by reason of Lessee’s inability
  to exercise an Option because of the provisions of Paragraph 39.4(a). (c) An
  Option shall terminate and be of no further force or effect, notwithstanding
  Lessee’s due and timely exercise of the Option, if, after such exercise and
  prior to the commencement of the extended term or completion of the purchase,
  (i) Lessee fails to pay Rent for a period of 30 days after such Rent becomes
  due (without any necessity of Lessor to give notice thereof), or (ii) if
  Lessee commits a Breach of this Lease. 40. Multiple Buildings. If the
  Premises are a part of a group of buildings controlled by Lessor, Lessee
  agrees that it will abide by and conform to all reasonable rules and
  regulations which Lessor may make from time to time for the management,
  safety, and care of said properties, including the care and cleanliness of
  the grounds and including the parking, loading and unloading of vehicles, and
  to cause its employees, suppliers, shippers, customers, contractors and
  invitees to so abide and conform. Lessee also agrees to pay its fair share of
  common expenses incurred in connection with such rules and regulations. 41.
  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. 42. Reservations. Lessor reserves to itself the right, from time to
  time, to grant, without the consent or joinder of Lessee, such easements,
  rights and dedications that Lessor deems necessary, and to cause the
  recordation of parcel maps and restrictions, so long as such easements,
  rights, dedications, maps and restrictions do not unreasonably interfere with
  the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably
  requested by Lessor to effectuate any such easement rights, dedication, map
  or restrictions. 43. 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. A Party who does not initiate suit for the
  recovery of sums paid “under protest” with 6 months shall be deemed to have
  waived its right to protest such payment. 44. Authority; Multiple Parties;
  Execution. (a) If either Party hereto is a corporation, trust, limited
  liability company, partnership, or similar entity, each individual executing
  this Lease on behalf of such entity represents and warrants that he or she is
  duly authorized to execute and deliver this Lease on its behalf (b) If this
  Lease is executed by more than one person or entity as “Lessee”, each such
  person or entity shall be jointly and severally liable hereunder. It is
  agreed that any one of the named Lessees shall be empowered to execute any
  amendment to this Lease, or other document ancillary thereto and bind all of
  the named Lessees, and Lessor may rely on the same as if all of the named
  Lessees had executed such document. (c) This Lease may be executed by the
  Parties in counterparts, each of which shall be deemed an original and ail of
  which together shall constitute one and the same instrument. 45. Conflict.
  46. 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. 47. 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
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   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 is is not attached to this Lease. *(See attachment) 50. Americans
  with Disabilities Act. Since compliance with the Americans with Disabilities
  Act (ADA) is dependent upon Lessee’s specific use of the Premises, Lessor
  makes no warranty or representation as to whether or not the Premises comply
  with ADA or any similar legislation. In the event that Lessee’s use of the
  Premises requires modifications or additions to the Premises in order to be
  in ADA compliance, Lessee agrees to make any such necessary modifications
  and/or additions at Lessee’s expense. 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. 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, AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S
  INTENDED USE. WARNING: IF THE PREMISES IS 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 IS LOCATED. The parties
  hereto have executed this Lease at the place and on the dates specified above
  their respective signatures. Executed at: Executed at: On: On: By LESSOR: By
  LESSEE: HILLSIDE ASSOCIATES II, LLC AEROVIRONMENT, INC . / A DELAWARE
  CORPORATION By: By: Name Printed: MARGARET M. KESTLEY Name Printed: CATHLEEN
  S. CLINE, Title: AUTHORIZED AGENT Title: VP ADMIN By: By: Name Printed: Name
  Printed: Title: Title: Address: Address: Telephone: ( ) Telephone: ( )
  Facsimile: ( ) Facsimile: ( ) Federal ID No. Federal ID No. BROKER: BROKER:
  Attn: Attn: Title: Title: Address: Address: Telephone: ( ) Telephone: ( )
  Facsimile: ( ) Facsimile: ( _) Federal ID No. Federal ID No. PAGE 17 OF 18
  INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM
  STN-10-6/07E 

  






 















	
  

  	
   NOTICE: These forms are often modified to
  meet changing requirements of law and industry needs. Always write or call to
  make sure you are utilizing the most current form: AIR Commercial Real Estate
  Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017. Telephone
  No. (213) 687-8777. Fax No.: (213) 687-8616. © Copyright 2001 - By AIR
  Commercial Real Estate Association. All rights reserved. No part of these
  works may be reproduced in any form without permission in writing. PAGE 18 OF
  18 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN-10-6/07E 

  






 















	
  

  	
   Date: DECEMBER 12, 2013 By and Between
  (Lessor) HILLSIDE ASSOCIATES IT, LLC (Lessee)AEROVIRONMENT, INC., A DELAWARE
  CORPORATION Address of Premises: 996 FLOWER GLEN STREET SIMI VALLEY, CA 93065
  1. Base Rent Partial Abatement. Provided Lessee shall not be in material
  default of the Lease, after any applicable notice and cure periods,
  immediately prior to or during any Base Rent partial abatement period, as
  provided in that certain Rental Concession Agreement attached hereto, the
  Base Rent payable by Lessee to Lessor for the Premises shall be partially
  abated to the extent provided and during the periods provided in that certain
  Rental Concession Agreeement attached hereto. 2. Maintenance and Repairs,
  Paragraph 7 of this Lease is hereby amended to provide that Lessee shall be
  obligated to manage and contract directly for services related to Lessee’s
  obligations to maintain the Premises, including, but not limited to, all
  utilities and janitorial service, Lessor shall be responsible, at Lessor’s
  sole cost and expense, for that portion of roof replacement and future roof
  repair cost which exceeds $1,000 per occurrence, per building. Lessee shall
  be responsible, at Lessee’s sole cost and expense, for the first $1,000 of
  roof replacement and future roof repair cost not payable by Lessor above. A
  roof assessment of the Premises shall be performed by a licensed roofing
  contractor. All roofing replacement and/or repair work shall be performed to
  applicable governmental code requirements, within one hundred and twenty
  (120) days of lease execution weather permitting. 3. Tax Protest. During the
  term of Lease, Lessee shall be entitled, at its election, to file a protest
  with the Ventura County Tax Assessor’s Office to reduce the real property
  taxes to reflect the current valuation of the Property. 4. Exterior Windows
  and Doors. Prior to January 31st, 2014, subject to such extension of
  additional time as may be required due to weather, Lessor, at Lessors sole
  cost and expense, shall repair and re-seal all exterior windows and doors of
  the Premises, In a workman-like and professional manner, as may be required.
  Lessee shall maintain all exterior windows and doors of the Premises
  throughout Term of the Lease. 5. HVAC. Lessor and Lessee agree that, within a
  commercially reasonable time, upon mutual agreement of Lessor and Lessee, the
  HVAC units of the Premises that have exceeded their useful life and any other
  HVAC major components (such as compressors, fans, etc.) that fail, for
  reasons other than failure of Lessee to maintain such HVAC major components,
  during the extended Term of the Lease (collectively, the “HVAC Work”) shall
  be repaired or replaced, as may be required, subject to the cost allocation
  provided below. Lessee shall not perform any of the HVAC Work without
  Lessor’s prior approval of the work to be done and the estimated cost of such
  work The cost of such HVAC Work shall be borne 50% by Lessor and 50% by
  Lessee and Lessee’s share of such cost shall be payable by Lessee upon demand
  by Lessor, Lessee shall be entitled to apply its Base Rent partial abatement
  or any portion thereof during the twelfth (12th) through the sixteenth (16th)
  months of the Term of this Lease, as provided In the attached Rental
  Concession Agreement, to satisfy its obligation for its share of such HVAC
  Work and. In the event of such election by Lessee, the amount of such Base
  Rent partial abatement shall be reduced by the amount of Lessee’s share of
  the HVAC Work so applied (Base rent is not increased and remains the same.
  Lessee is just not entitled to offset cost of HVAC work as rent concession
  since Lessee did not pay). Notwithstanding the foregoing, Lessee shall
  maintain all HVAC units and HVAC major components during the Term through a
  service contract with Lessor’s approved HVAC vendor. 6. Parking Area, Lessor
  shall, within twelve (12) months of lease execution weather permitting (such
  work to be done during daylight savings time) slurry coat and restripe the
  parking areas of the Property, at Lessor’s sole cost and expense, on non-work
  days (Saturdays and Sundays). 7. Rental Refund Payment. Promptly after mutual
  execution of this Amendment, Lessor agrees to refund to Lessee Base Rent paid
  by Lessee for the Premises during 2013 in the amount of $107,520. &.
  Option to Extend Term. Lessee shall have one (1) option to extend the Term
  for sixty (60) months on the terms and subject to the conditions provided in
  the attached Option to Renew. 9. Street Privatization. Lessor agrees to cooperate
  with the City of Simi Valley with respect to the privatization of Enchanted
  Way/Flower Glen Street. Lessee shall be responsible for obtaining all
  approvals and permits necessary for such privatization, at Lessee’s sole cost
  and expense. If Enchanted Way/Flower Glen Street are successfully privatized,
  Lessee shall be responsible for all maintenance of such privatized street(s),
  at Lessee’s sole cost and expense during the Lease term. 10. Non-Disturbance
  Agreement. Lessor and Lessee acknowledge their respective rights and
  obligations under Paragraph 30.3 regarding Non-Disturbance Agreements.  

  






 















	
  

  	
   AIR COMMERCIAL REAL ESTATE ASSOCIATION
  STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET ATTACHMENT 7.1(b)
  However, if in Lessor’s sole opinion one or more service providers contracted
  for by Lessee is performing in a substandard fashion, Lessor may give Lessee
  30 days’ written notice to cure the problem. Should Lessee fail to cure the
  substandard performance within that 30 day period, then Lessor may, at its
  option, procure and maintain a substitute service provider(s), the cost for
  which Lessee shall reimburse Lessor, upon demand. 9.2 ..., except emergency
  repairs required in the judgment of Lessee to prevent additional loss to real
  or personal property of the parties hereto. 9.4. ...7 days after Lessor
  determines that damage is Total Destruction. 13.1 (c) No default or breach
  shall occur when access is denied by Lessee when Lessor or its employees or
  agents do not comply with the citizenship and status requirements of the
  International Traffic in Arms Regulations of the United States Government.
  Such regulations require that anyone allowed access to the building must be a
  U.S. citizen, legal permanent resident or a member of a protected class since
  items produced in the premises are listed on the U.S. Munitions list of the
  ITAR. 32. No default or breach shall occur when access is denied by Lessee
  when Lessor or its employees or agents do not comply with the citizenship and
  status requirements of the International Traffic in Arms Regulations of the
  United States Government. Such regulations require that anyone allowed access
  to the building must be a U.S. citizen, legal permanent resident or a member
  of a protected class since items produced in the premises are listed on the
  U.S. Munitions list of the ITAR. 45, Agreement constitutes the entire
  agreement between the parties, regardless of any prior negotiations. This
  Agreement shall only be amended or otherwise changed through a writing,
  signed by both Lessor and Lessee. 49, The parties shall agree to first
  attempt mediation of any disputes, with an agreed to mediator and his/her
  cost shared equally by the parties. If said mediation does not occur within
  30 days of the dispute arising, then either party may proceed to Court.
  Notwithstanding the foregoing, lessor shall not be obligated to engage in
  mediation for any cause of action seeking possession and/or rents owed by
  Lessee. In such cases, the Civil code and the Code of Civil Procedure shall
  govern the dispute resolution. 

  






 















	
  

  	
   RENT ADJUSTMENT(S) STANDARD LEASE ADDENDUM
  Dated DECEMBER 12, 2013 By and Between (Lessor) HILLSIDE ASSOCIATES II, LLC
  (Lessee)AEROVIRONMENT, INC., A DELAWARE CORPORATION Address of Premises: 996
  FLOWER GLEN STREET SIMI VALLEY, CA 93065 Paragraph A. RENT ADJUSTMENTS: The
  monthly rent for each month of the adjustment period(s) specified below shall
  be increased using the method(s) indicated below: (Check Method(s) to be Used
  and Fill in Appropriately) 1. Cost of Living Adjustment(s) (COLA) a. On (Fill
  in COLA Dates): N/A the Base Rent shall be adjusted by the change, if any,
  from the Base Month specified below, in the Consumer Price Index of the
  Bureau of Labor Statistics of the U.S. Department of Labor for (select one):
  CPI W (Urban Wage Earners and Clerical Workers) or CPI U (All Urban
  Consumers), for (Fill in Urban Area): N/A , All Items (1982-1984 = 100),
  herein referred to as “CPI”. b. The monthly rent payable in accordance with
  paragraph A.l.a. of this Addendum shall be calculated as follows: the Base
  Rent set forth in paragraph 1.5 of the attached Lease, shall be multiplied by
  a fraction the numerator of which shall be the CPI of the calendar month 2
  months prior to the month(s) specified in paragraph A.l.a. above during which
  the adjustment is to take effect, and the denominator of which shall be the
  CPI of the calendar month which is 2 months prior to (select one): the first
  month of the term of this Lease as set forth in paragraph 1.3 (“Base Month”)
  or (Fill in Other “Base Month”): N/A. The sum so calculated shall constitute
  the new monthly rent hereunder, but in no event, shall any such new monthly
  rent be less than the rent payable for the month immediately preceding the
  rent adjustment. c. In the event the compilation and/or publication of the
  CPI shall be transferred to any other governmental department or bureau or
  agency or shall be discontinued, then the index most nearly the same as the
  CPI shall be used to make such calculation. In the event that the Parties
  cannot agree on such alternative index, then the matter shall be submitted
  for decision to the American Arbitration Association in accordance with the
  then rules of said Association and the decision of the arbitrators shall be
  binding upon the parties. The cost of said Arbitration shall be paid equally
  by the Parties. II. Market Rental Value Adjustment(s) (MRV) a. On (Fill in
  MRV Adjustment Date(s): N/A the Base Rent shall be adjusted to the “Market
  Rental Value” of the property as follows: 1) Four months prior to each Market
  Rental Value Adjustment Date described above, the Parties shall attempt to
  agree upon what the new MRV will be on the adjustment date. If agreement
  cannot be reached within thirty days, then: (a) Lessor and Lessee shall
  immediately appoint a mutually acceptable appraiser or broker to establish
  the new MRV within the next 30 days. Any associated costs will be split
  equally between the Parties, or (b) Both Lessor and Lessee shall each
  immediately make a reasonable determination of the MRV and submit such
  determination, in writing, to arbitration in accordance with the following
  provisions: (i) Within 15 days thereafter, Lessor and Lessee shall each
  select an appraiser or broker (“Consultant” -check one) of their choice to
  act as an arbitrator. The two arbitrators so appointed shall immediately
  select a third mutually acceptable Consultant to act as a third arbitrator.
  (ii) The 3 arbitrators shall within 30 days of the appointment of the third
  arbitrator reach a decision as to what the actual MRV for the Premises is,
  and whether Lessor’s or Lessee’s submitted MRV is the closest thereto. The
  decision of a majority of the arbitrators shall be binding on the Parties.
  The submitted MRV which is determined to be the closest to the actual MRV
  shall thereafter be used by the Parties. PAGE 1 OF 2 INITIALS INlTIALS ©2000
  - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM RA-3-8/00E 

  






 















	
  

  	
   (iii) If either of the Parties fails to
  appoint an arbitrator within the specified 15 days, the arbitrator timely
  appointed by one of them shall reach a decision on his or her own, and said
  decision shall be binding on the Parties. (iv) The entire cost of such
  arbitration shall be paid by the party whose submitted MRV is not selected,
  i.e , the one that is NOT the closest to the actual MRV. 2) Notwithstanding
  the foregoing, the new MRV shall not be less than the rent payable for the
  month immediately preceding the rent adjustment. b. Upon the establishment of
  each New Market Rental Value: 1) the new MRV will become the new “Base Rent”
  for the purpose of calculating any further Adjustments, and 2) the first
  month of each Market Rental Value term shall become the new ‘Base Month’ for
  the purpose of calculating any further Adjustments. III. Fixed Rental
  Adjustment(s) (FRA) The Base Rent shall be increased to the following amounts
  on the dates set forth below: On (Fill in FRA Adjustment Date(s)): The New
  Base Rent shall be: DECEMBER 1, 2013 $27,525.00 DECEMBER 1, 2015 $28,764.00
  DECEMBER 1, 2017 $30,058.00 DECEMBER 1, 2019 $31,411.00 B. NOTICE: Unless
  specified otherwise herein, notice of any such adjustments, other than Fixed
  Rental Adjustments, shall be made as specified in paragraph 23 of the Lease.
  NOTICE: These forms are often modified to meet changing requirements of law
  and industry needs. Always write or call to make sure you are utilizing the
  most current form: AIR Commercial Real Estate Association, 800 W 6th Street,
  Suite 800, Los Angeles, CA 90017. Telephone No. (213) 687-8777. Fax No.:
  (213) 687-8616. PAGE 2 OF 2 INITIALS INlTIALS ©2000 - AIR COMMERCIAL REAL
  ESTATE ASSOCIATION FORM RA-3-8/00E 

  






 











 

RENT CONCESSION AGREEMENT

 

This document shall set-forth the agreement of HILLSIDE ASSOCIATES II, LLC, a California Liability Company Lessor, and AEROVIRONMENT, INC., a Delaware Corporation, Lessee concerning the Rent Concessions offered to Lessee in connection with that certain Lease dated DECEMBER 12, 2013 by and between Lessor and Lessee for the premises located at: 996 FLOWER GLEN STREET City of SIMI VALLEY, State of California (the “Lease”).

 

AS MATERIAL CONSIDERATION for the Rent Concession set-forth herein is Lessee’s agreement to lease the Premises on the terms and provisions of the Lease for the entire Lease term.  Lessee acknowledges that the Free Rent as set-forth below (herein called “Rent Concession”) is a concession given to Lessee for leasing the Premises for the term stated in the Lease Agreement.  In the event Lessee becomes in default of any material Lease provision at any time during the Lease term and has not cured such default within the applicable Notice and Cure periods in the lease, Lessor and Lessee agree that:  (a) in addition to any other remedy available to Lessor, Lessor shall be entitled to recover from Lessee the unamortized rental amount of any received Rental Concessions taken by Lessee prior to such default date, (b) Lessee agrees to pay such amount to Lessor with the next rental payment.  Lessee shall be entitled to the Free Rent and/or Rent Concession(s) provided below for the applicable period of time referenced below:

 

	
DECEMBER 1, 2013   THROUGH DECEMBER 31, 2013
    	
 
    	
$
    	
13,762.50
    	
 
    
	
JANUARY 1, 2014   THROUGH JANUARY 31, 2014
    	
 
    	
$
    	
27,525.00
    	
 
    
	
FEBRUARY 1, 2014   THROUGH FEBRUARY 28, 2014
    	
 
    	
$
    	
27,525.00
    	
 
    
	
MARCH 1,   2014 THROUGH MARCH 31, 2014
    	
 
    	
$
    	
27,525.00
    	
 
    
	
APRIL 1, 2014   THROUGH APRIL 30, 2014
    	
 
    	
$
    	
13,762.50
    	
 
    
	
MAY 1, 2014   THROUGH MAY 31, 2014
    	
 
    	
$
    	
13,762.50
    	
 
    
	
JUNE 1, 2014   THROUGH JUNE 30, 2014
    	
 
    	
$
    	
3,030.50
    	
 
    
	
NOVEMBER 1, 2014   THROUGH NOVEMBER 30, 2014
    	
 
    	
$
    	
13,762.50
    	
 
    
	
DECEMBER 1, 2014   THROUGH DECEMBER 31, 2014
    	
 
    	
$
    	
13,762.50
    	
 
    
	
JANUARY 1, 2015   THROUGH JANUARY 31, 2015
    	
 
    	
$
    	
13,762.50
    	
 
    
	
FEBRUARY 1, 2015   THROUGH FEBRUARY 28, 2015
    	
 
    	
$
    	
13,762.50
    	
 
    
	
MARCH 1,   2015 THROUGH MARCH 31, 2015
    	
 
    	
$
    	
13,762.50
    	
 
    


 

No NNN as defined in the lease shall be abated by the Rent Concession.

 

Rent Concession(s) referenced above equal a fair rental value in a sum as determined at the time the Rent Concession commences.

 

THIS DOCUMENT shall not be deemed binding upon Lessor unless and until it is executed by Lessor and a copy delivered to Lessee.

 

Dated this 18 day of December, 2013.

 

 

	
LESSOR:
    	
LESSEE:
    
	
HILLSIDE ASSOCIATES II, LLC
    	
AEROVIRONMENT, INC.
    
	
A California Limited Liability Company
    	
A Delaware Corporation
    
	
By   MID VALLEY PROPERTIES,
    	
 
    
	
Managing   Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
BY:
    	
/s/ Margaret M. Kestly
    	
 
    	
BY:
    	
/s/   Cathleen S. Cline
    
	
 
    	
Margaret M. Kestly, Authorized Agent
    	
 
    	
CATHLEEN   S. CLINE
    
	
 
    	
 
    	
VP,   ADMIN
    
					


 












 

OPTION TO RENEW

 

Tenant is granted one option to extend the lease for a period of Five (5) years commencing immediately after the expiration of the basic lease term.  It shall be the obligation of the tenant to notify the Landlord of its intention to exercise its option to renew within the period between 270 days and 360 days prior to the day that the current lease expires.  The notification of the intent to exercise its option shall be sent by tenant in writing by U.S. mail certified, overnight courier delivery or registered with return receipt requested.

 

The commencement rent for the first month of the option period shall be equal to comparable market rent for a similar building located within a ten-mile radius of the lease property giving consideration to all concessions, tenant improvement allowance and rental abatement for a non-renewal and non-sublease space.  In analyzing the comparable building properties, the parties may take into account all factors including ceiling height, parking ratio, loading docks, loading doors and height/size of those doors, HVAC, office build out, electrical power and distribution, skylights, yard space, the general location and the view from inside the building.

 

Upon receipt within the time period spelled out above and the tenant’s exercise of its option to extend said lease both parties will meet and confer in an attempt to arrive at the beginning rent during the option period.  If the parties are not able to agree on the option period rent, each party shall designate a licensed real estate broker who has dealt with industrial property in the Simi Valley for not less than 5 years from the date of his appointment, and is at that time employed by an established real estate brokerage firm.  If both brokers are unable to agree on the reasonable commencement rent for the option period, then both brokers will attempt to designate a third broker with qualifications at least as stringent as those required of the original brokers. Said third broker shall be given all of the material used by the original brokers to base their reasonable market value, and said broker shall make his own investigation. The third broker then shall select the opinion of one broker as the most correct value, and the value selected by said third broker shall be binding upon the parties.

 

If two original brokers cannot agree on a third broker, or if the third broker is unacceptable to the parties as defined herein, then either party may request that the presiding judge of the Superior Court of the County of Ventura select a commercial real estate broker from the list usually kept by said presiding judge, and said appointed brokers opinion shall be absolutely binding on all parties.

 

Any outside broker representing the tenant will receive a 2.5% commission for the option term, payable by Landlord.

 

If Lessee is in monetary default on the date of giving the option notice or at any time prior to the commencement of the renewal term, the option notice shall be totally ineffective and this Lease shall expire at the end of the initial term.

 

Notwithstanding the foregoing, the new Market Rent Value shall not be less than the rent payable for the month immediately preceding the rent adjustment.

 

 

Dated this 18 day of December, 2013.

 

	
LESSOR:
    	
LESSEE:
    
	
HILLSIDE ASSOCIATES II, LLC
    	
AEROVIRONMENT, INC.
    
	
A California Limited Liability Company
    	
A Delaware Corporation
    
	
 
    	
 
    
	
By   MID VALLEY PROPERTIES,
    	
 
    
	
Managing   Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
BY:
    	
/s/   Margaret M. Kestly
    	
 
    	
BY:
    	
/s/   Cathleen S. Cline 
    
	
 
    	
Margaret   M. Kestly, Authorized Agent
    	
 
    	
CATHLEEN   S. CLINE
    
	
 
    	
 
    	
VP,   ADMIN