QuickLinks
 -- Click here to rapidly navigate through this document
  



 
 

Exhibit 10.8    
    


 
  [LOGO]
  STANDARD MULTI-TENANT OFFICE LEASE—GROSS
  AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION    



        1.     Basic Provisions ("Basic Provisions"). 



        1.1    Parties:    This Lease ("Lease"), dated for reference purposes
only December 27, 2001, is made by and between F&F Simon Rancho Tech, LLC ("Lessor") and Hire Right, Inc., a California Corporation
("Lessee"), (collectively the "Parties", or individually a  "Party"). 


        1.2(a)    Premises:    That certain portion of the Project (as defined below), known as Suite Numbers(s)
A4-2 Second (2nd), floor(s), consisting of approximately 16,827 rentable square feet and approximately 14,303 useable square
feet("Premises"). The Premises are located at: 10801 Sixth, Street, in the City of Rancho Cucamonga, County of San Bernardino, State of California, with
zip code 91730. In addition to Lessee's rights to use and occupy the Premises as hereinafter specified, Lessee shall have non-exclusive rights to the Common Areas (as defined in
Paragraph 2.7 below) as hereinafter specified, but shall not have any rights to the roof, the exterior walls, the area above the dropped ceilings, or the utility raceways of the building
containing the Premises ("Building") or to any other buildings in the Project. The Premises, the Building, the Common Areas, the land upon which they
are located, along with all other buildings and improvements thereon, are herein collectively referred to as the "Project." The Project consists of
approximately 373,322 rentable square feet. (See also Paragraph 2) 


        1.2(b)    Parking:    129 unreserved and 0 reserved vehicle parking spaces at a monthly cost of $N/A per unreserved
space and $N/A per reserved space. (See Paragraph 2.6) 


        1.3    Term:    One (1) years and six (6) months ("Original
Term") commencing April 1, 2002 ("Commencement Date") and ending September 30, 2003
("Expiration Date"). (See also Paragraph 3) 


        1.4    Early Possession:    Upon lease execution by Lessor and Lessee ("Early Possession
Date"). (See also Paragraphs 3.2 and 3.3) 



        1.5    Base Rent:    $14,300.00 per month ("Base Rent)", payable on
the first (1st) day of each month commencing April 1, 2002. (See also Paragraph 4) 


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



        1.6    Lessee's Share of Operating Expense Increase:    four and 5/100ths percent (4.5%)
("Lessee's Share"). Lessee's Share has been calculated by dividing the approximate rentable square footage of the Premises by the total approximate
square footage of the rentable space contained in the Project and shall not be subject to revision except in connection with an actual change in the size of the Premises or a change in the space
available for lease in the Project. 


        1.7    Base Rent and Other Monies Paid Upon Execution:    



        (a)    Base Rent:    $14,300.00 for the period April 1, 2002 - March 31,
2003. 


        (b)    Security Deposit:    $15,730.00 ("Security
Deposit"). (See also Paragraph 5) 


        (c)    Parking:    $N/A for the period N/A. 


        (d)    Other:    $N/A for N/A. 


        (e)    Total Due Upon Execution of this Lease:    $30,030.00. 




        1.8    Agreed Use:    General office and all legal uses incidental to Lessee's business. (See also Paragraph 6) 



        1.9    Base Year; Insuring Party.    The Base Year is 2002. Lessor is the "Insuring
Party". (See also Paragraphs 4.2 and 8) 


        1.10    Real Estate Brokers:    (See also Paragraph 15) 



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



	ý
	CB
Richard Ellis, Inc.—Natalie Bazarevitsch represents Lessor exclusively ("Lessor's
Broker");



	ý
	Jones
Lang LaSalle Americas, Inc.—Thomas A. Murphy represents Lessee exclusively ("Lessee's
Broker"); or



	o
	                          represents
both Lessor and Lessee ("Dual
Agency"). 



        (b)    Payment to Brokers:    Upon execution and delivery of this
Lease by both Parties, Lessor shall pay to the Brokers the brokerage fee agreed to in a separate written agreement (or if there is no such agreement, the sum of per separate agreement or % of the
total Base Rent for the brokerage services rendered by the Brokers). 




        1.11    Guarantor.    The obligations of the Lessee under this Lease shall be guaranteed by N/A
("Guarantor"). (See also Paragraph 37) 


        1.12    Business Hours for the Building::    7:00 a.m. to 7:00 p.m., Mondays through Fridays (except
Building Holidays) and 9:00 a.m. to 1:00 p.m. on Saturdays (except Building Holidays). "Building Holidays" shall mean the dates of
observation of New Year's Day, President's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day,
and                          . 


        1.13    Lessor Supplied Services.    Notwithstanding the provisions of Paragraph 11.1, Lessor is NOT obligated
to provide the following: (See Addendum) 


	ý
	Janitorial
services



	ý
	Electricity



	o
	Other
(specify): 



        1.14    Attachments.    Attached hereto are the following, all of which constitute a part of
this Lease: 


	ý
	an
Addendum consisting of Paragraphs 1 through 6; 






	

/s/ DTF
  
 Initials	
 	

 	
 	

 	
 	

 	
 	

/s/ RL
  
 Initials
	

©1999 — American Industrial Real Estate Association	
 	

REVISED	
 	

FORM OFG-1-9/99E




1







 
	ý
	a
plot plan depleting the Premises;



	o
	a
current set of the Rules and Regulations;



	o
	a
Work Letter;



	o
	a
janitorial schedule;



	o
	other
(specify): 



2.    Premises.    


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


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


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



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


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




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


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


        2.6    Vehicle Parking.    So long as Lessee is not in default, and subject to the Rules and Regulations attached
hereto, and as established by Lessor from time to time. Lessee shall be entitled to rent and use the number of parking spaces specified in Paragraph 1.2(b) at the rental rate applicable from
time to time for monthly parking as set by Lessor and/or its licensee. 



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


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




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


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


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


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



        (a)   To
make changes to the Common Areas, including, without limitation, changes in the location, size, shape and number of the lobbies, windows, stairways, air shafts,
elevators, escalators, restrooms, driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility
raceways; 


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


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


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


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


        (f)    To
do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Project as Lessor 



	

/s/ DTF
  
 Initials	
 	

 	
 	

 	
 	

 	
 	

/s/ RL
  
 Initials
	

©1999 — American Industrial Real Estate Association	
 	

REVISED	
 	

FORM OFG-1-9/99E




2







 

may,
in the exercise of sound business judgment, deem to be appropriate. 




3.    Term.    



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


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



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



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


4.    Rent.    


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


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



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


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


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



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



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


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




         (ii)  Trash
disposal, Janitorial and security services, pest control services, and the costs of any environmental inspections; See Addendum (Janitorial Services) 



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


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


         (v)  The
amount of the Real Property Taxes payable by Lessor pursuant to paragraph 10; 


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



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




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



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


        (f)    Lessee's
Share of Operating Expense Increase shall be payable by Lessee within 10 days after a reasonably detailed statement of actual expenses is presented to
Lessee by Lessor. At Lessor's option, however, an amount may be estimated by Lessor from time to time in advance of Lessee's Share of the Operating Expense Increase for any Comparison Year, and the
same shall be payable monthly during each Comparison Year of the Lease term, on the same day as the Base Rent is due hereunder. In the event that Lessee pays Lessor's estimate of Lessee's Share of
Operating Expense Increase as aforesaid, Lessor shall deliver to Lessee within 60 days after the expiration of each Comparison Year a reasonably detailed statement showing Lessee's Share of the
actual Operating Expense Increase incurred during such year. If Lessee's payments under this paragraph (f) during said Comparison Year exceed Lessee's Share as indicated on said statement.
Lessee shall be entitled to credit the amount of such overpayment against Lessee's Share of Operating Expense Increase next falling due. If Lessee's payments under this paragraph during said
Comparison Year were less than Lessee's Share as indicated on said statement, Lessee shall pay to Lessor the amount of the deficiency within 10 days after delivery by Lessor to Lessee of said
statement. Lessor and Lessee shall forthwith adjust between them by cash payment any balance determined to exist with respect to that portion of the last Comparison Year for which Lessee is
responsible as to Operating Expense Increases, notwithstanding that the Lease term may have terminated before the end of such Comparison Year. 


        (g)   Operating
Expenses shall not include the costs of replacement for equipment or capital components such as the roof, foundations, exterior walls or a Common Area capital
improvement, such as the parking lot paving, elevators, fences that have a useful life for accounting purposes of 5 years or more unless it is of the type described in paragraph 4.2(c)
(viii), in which case their cost shall be included as above provided. 



        (h)   Operating
Expenses shall not include any expenses paid by any tenant directly to third parties, or as to which Lessor is otherwise reimbursed by any third party, other
tenant, or by insurance proceeds. 




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


        5.    Security Deposit.    Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for
Lessee's faithful performance of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of said
Security Deposit for the payment of any amount due Lessor 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 moneys with Lessor so that the
total amount of the Security Deposit shall at all times bear the same proportion to the Increased Base Rent as the initial Security Deposit bore to the Initial Base Rent. Should the Agreed Use be
amended to accommodate a material change in the business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to Increase the Security Deposit to the extent necessary, in
Lessor's 



	

/s/ DTF
  
 Initials	
 	

 	
 	

 	
 	

 	
 	

/s/ RL
  
 Initials
	

©1999 — American Industrial Real Estate Association	
 	

REVISED	
 	

FORM OFG-1-9/99E




3







 

reasonable
judgment, to account for any increased wear and tear that the Premises may suffer as a result thereof. If a change in control of Lessee occurs during this Lease and following such change
the financial condition of Lessee is, in Lessor's reasonable judgment, significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the Security
Deposit to be at a commercially reasonable level based on such change in financial condition. Lessor shall not be required to keep the Security Deposit separate from its general accounts. Within
14 days after the expiration or termination of this Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and otherwise within 30 days after the Premises have been
vacated pursuant to Paragraph 7.4(c) below. Lessor shall return that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit shall be considered to be
held in trust, to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease. 


6.    Use.    


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


        6.2    Hazardous Substances.    



        (a)    Reportable Uses Require Consent.    The term "Hazardous
Substance" as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in
combination with other materials expected to be on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment or the Premises,
(ii) regulated or monitored by any governmental authority, or (iii) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or
common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, byproducts 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 such as ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long as such use is in
compliance with all Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any
liability therefor. In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public,
the Premises and/or the environment against damage, contamination, injury and/or liability. Including, but not limited to, the installation (and removal on or before Lease expiration or termination)
of protective modifications (such as concrete encasements) and/or increasing the Security Deposit. 


        (b)    Duty to Inform Lessor.    If Lessee knows, or has reasonable cause to believe, that a
Hazardous Substance has come to be located in, on, under or about the Premises, other than as 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 areas outside of the Project 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 entitles 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 Premises, without regard to whether said requirements are now in effect or become effective after the
Start Date. Lessee shall, within 10 days after receipt of Lessor's written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee's
compliance with any Applicable Requirements specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or actual claim,
notice, citation, warning, complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements. 


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


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



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



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



        7.3    Utility Installations; Trade Fixtures; Alterations.    



        (a)    Definitions.    The term "Utility
Installations" refers to all floor and window coverings, air lines, vacuum lines, power panels, electrical distribution, security and fire protection systems, communication
cabling, lighting fixtures, HVAC equipment, and plumbing in or on the Premises. The term "Trade  



	

/s/ DTF
  
 Initials	
 	

 	
 	

 	
 	

 	
 	

/s/ RL
  
 Initials
	

©1999 — American Industrial Real Estate Association	
 	

REVISED	
 	

FORM OFG-1-9/99E




4







 

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


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




        7.4    Ownership; Removal; Surrender; and Restoration.    



        (a)    Ownership.    Subject to Lessor's right to require removal or elect ownership as
hereinafter provided, an 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 clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear
excepted. "Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by good maintenance practice. Notwithstanding the foregoing, if this Lease is for
12 months or less, then Lessee shall surrender the Premises in the same condition as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any
damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any storage
tank installed by or for Lessee. Lessee shall also completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous
Substances which were deposited via underground migration from areas outside of the Project) even if such removal would require Lessee to perform or pay for work that exceeds statutory requirements.
Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express
written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below. 




8.    Insurance; Indemnity.    


        8.1    Insurance Premiums.    The cost of the premiums for the insurance policies maintained by Lessor pursuant to
paragraph 8 are included as Operating Expenses (see paragraph 4.2 (c)(iv)). Said costs shall include increases in the premiums resulting from additional coverage related to requirements
of the holder of a mortgage or deed of trust covering the Premises, Building and/or Project, increased valuation of the Premises, Building and/or Project, and/or a general premium rate increase. Said
costs shall not, however, include any premium increases resulting from the nature of the occupancy of any other tenant of the Building. If the Project was not insured for the entirety of the Base
Year, then the base premium shall be the lowest annual premium reasonably obtainable for the required insurance as of the Start Date, assuming the most nominal use possible of the Building and/or
Project. In no event, however, shall Lessee be responsible for any portion of the premium cost attributable to liability insurance coverage in excess of $2,000,000 procured under
Paragraph 8.2(b). 


        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, an "Additional Insured-Managers or Lessors of Premises Endorsement" and contain the "Amendment of the Pollution Exclusion
Endorsement" for damage caused by heat, smoke or fumes from a hostile fire. The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include
coverage for liability assumed under this Lease as an "insured contract" for the performance of Lessee's indemnity obligations under this Lease. The
limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. All insurance carried by Lessee shall be primary to and not contributory with
any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only. 


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




        8.3    Property Insurance—Building, Improvements and Rental Value.    



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


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


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



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




        8.4    Lessee's Property; Business Interruption Insurance.    



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


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


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




        8.5    Insurance Policies.    Insurance required herein shall be by companies duly licensed or admitted to transact
business in the state where the Premises are located, and maintaining during the policy term a "General Policyholders Rating" of at least B+, V, as set forth in the most current issue of "Best's
insurance Guide", or such other rating as may be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall, prior to the
Start Date, deliver to Lessor certified copies of policies of such insurance or certificates evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or
subject to modification except after 30 days prior written notice to Lessor. Lessee shall, at least 30 days prior to the expiration of such policies, furnish Lessor with evidence of
renewals or "Insurance binders" evidencing renewal thereof, or Lessor may order such 



	

/s/ DTF
  
 Initials	
 	

 	
 	

 	
 	

 	
 	

/s/ RL
  
 Initials
	

©1999 — American Industrial Real Estate Association	
 	

REVISED	
 	

FORM OFG-1-9/99E




5







 

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.    (See Addendum) 


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


9.    Damage or Destruction.    


        9.1    Definitions.    



        (a)   "Premises Partial Damage" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned
Alterations and Utility Installations, which can reasonably be repaired in 3 months or less from the date of the damage or destruction, and the cost thereof does not exceed a sum equal to
6 month's Base Rent. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total. 



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


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


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


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


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


        9.6    Abatement of Rent; Lessee's Remedies.    


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


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


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


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


10.    Real Property Taxes.    



        10.1    Definitions.    As used herein, the term "Real Property Taxes"
shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement bond;
and/or license fee imposed upon or levied against any legal or equitable interest of Lessor in the Project, Lessor's right to other income therefrom, and/or Lessor's business of leasing, by any
authority having the direct or 



	

/s/ DTF
  
 Initials	
 	

 	
 	

 	
 	

 	
 	

/s/ RL
  
 Initials
	

©1999 — American Industrial Real Estate Association	
 	

REVISED	
 	

FORM OFG-1-9/99E




6









   
indirect power to tax and where the funds are generated with reference to the Project address and where the proceeds so generated are to be applied by the city, county or other local taxing authority
of a jurisdiction within which the Project is located. "Real Property Taxes" shall also include any tax, fee, levy, assessment or charge, or any
increase therein, imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership of the Project or any portion thereof or a change in the
improvements thereon. 


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


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


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


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


11.    Utilities and Services.    


        11.1    Services Provided by Lessor.    Lessor shall provide heating, ventilation, air conditioning, reasonable
amounts of electricity for normal lighting and office machines, water for reasonable and normal drinking and lavatory use in connection with an office, and replacement light bulbs and/or fluorescent
tubes and ballasts for standard overhead fixtures. Lessor shall also provide janitorial services to the Premises and Common Areas 5 times per week, excluding Building Holidays, or pursuant to the
attached janitorial schedule, if any. Lessor shall not, however, be required to provide janitorial services to kitchens or storage areas included within the Premises. 


        11.2    Services Exclusive to Lessee.    Lessee shall pay for all water, gas, heat, light, power, telephone and other
utilities and services specially or exclusively supplied and/or metered exclusively to the Premises or to Lessee, together with any taxes thereon. If a service is deleted by Paragraph 1.13 and
such service is not separately metered to the Premises, Lessee shall pay at Lessor's option, either Lessee's Share or a reasonable proportion to be determined by Lessor of all charges for such jointly
metered service. 


        11.3    Hours of Service.    Said services and utilities shall be provided during times set forth in
Paragraph 1.12. Utilities and services required at other times shall be subject to advance request and reimbursement by Lessee to Lessor of the cost thereof. 


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


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


12.    Assignment and Subletting.    


        12.1    Lessor's Consent Required.    



        (a)   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. Lessor's consent shall not be unreasonably
withheld or denied. Lessor shall have 20 days from receipt of all necessary Information to approve or disapprove Sublessee. 


        (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 50% or more of the voting control of Lessee shall constitute a change in control for this purpose. 



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


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



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




        12.2    Terms and Conditions Applicable to Assignment and Subletting.    



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


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


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



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


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


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



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




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



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


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


        (c)   Any
matter requiring the consent of the sublessor 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. 



	

/s/ DTF
  
 Initials	
 	

 	
 	

 	
 	

 	
 	

/s/ RL
  
 Initials
	

©1999 — American Industrial Real Estate Association	
 	

REVISED	
 	

FORM OFG-1-9/99E




7







 

        (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 for a period of 30 days or greater; 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. 


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



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


        (e)   The
occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii) becoming a  "debtor" as defined in
11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition filed
against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Premises
or of Lessee's interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the attachment, execution or other judicial seizure of substantially all of
Lessee's assets located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in the event that any provision of this
subparagraph (e) is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions. 


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



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




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



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


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


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




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


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


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


        13.6    Breach by Lessor.    



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


        (b)    Performance by Lessee on Behalf of Lessor.    In the event that neither Lessor nor
Lender cures said breach within 30 days 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. 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 rentable floor area of the Premises, or more than 25% of Lessee's Reserved Parking
Spaces, if any, are taken by Condemnation, 



	

/s/ DTF
  
 Initials	
 	

 	
 	

 	
 	

 	
 	

/s/ RL
  
 Initials
	

©1999 — American Industrial Real Estate Association	
 	

REVISED	
 	

FORM OFG-1-9/99E




8







 

Lessee
may, at Lessee's option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within
10 days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease
in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in proportion to the
reduction in utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution
in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation for Lessee's relocation expenses, loss of
business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility Installations made to the
Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor. In the event
that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation. 


15.    Brokerage Fees.    


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


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


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


16.    Estoppel Certificates.    



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


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


        (c)   If
Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall deliver to any potential lender or purchaser
designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including but not limited to Lessee's financial statements for the past 3 years, but in
no event shall Lessee be required to submit updated financial statements more than once for each calendar year. All such financial statements shall be received by Lessor and such lender or purchaser
in confidence and shall be used only for the purposes herein set forth. 




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


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


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



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


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


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


23.    Notices.    


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


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


24.    Waivers.    No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by
Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition hereof.
Lessor's consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent or similar act by Lessee, or be construed as
the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any
payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such
statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment. 


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



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



        (i)    Lessor's Agent.    A Lessor's agent under a listing agreement with the Lessor acts as the agent for the Lessor
only. A Lessor's agent or subagent has the following affirmative obligations: To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and
loyalty in dealings with the Lessor. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in performance of the
agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property
that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party
which does not involve the affirmative duties set forth above. 


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




	

/s/ DTF
  
 Initials	
 	

 	
 	

 	
 	

 	
 	

/s/ RL
  
 Initials
	

©1999 — American Industrial Real Estate Association	
 	

REVISED	
 	

FORM OFG-1-9/99E




9







 

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 advise is desired, consult a competent professional. 




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


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




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


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


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


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


30.    Subordination; Attornment; Non-Disturbance.    


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


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



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


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



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


32.    Lessor's Access; Showing Premises; Repairs.    Lessor and Lessor's agents shall have the right to
enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such
alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the
Premises and/or other premises as long as there is no material adverse effect to Lessee's use of the Premises. All such activities shall be without abatement of rent or liability to Lessee. Lessor may
at any time place on the Premises any ordinary "For Sale" signs and Lessor may during the last 6 months of the term hereof place on the Premises
any ordinary "For Lease" signs. In addition, Lessor shall have the right to retain keys to the Premises and to unlock all doors in or upon the Premises
other than to files, vaults and safes, and in the case of emergency to enter the Premises by any reasonably appropriate means, and any such entry shall not be deemed a forcible or unlawful entry or
detainer of the Premises or an eviction. Lessee waives any charges for damages or injuries or interference with Lessee's property or business in connection therewith. 


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.    Lessee shall not place any sign upon the Project without Lessor's prior written consent. 



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.    



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


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



	

/s/ DTF
  
 Initials	
 	

 	
 	

 	
 	

 	
 	

/s/ RL
  
 Initials
	

©1999 — American Industrial Real Estate Association	
 	

REVISED	
 	

FORM OFG-1-9/99E




10







 

that
the guaranty is still in effect. 


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



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


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



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


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


        39.4    Effect of Default on Options.    



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


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


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




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


41.    Reservations.    



        (a)   Lessor
reserves the right: (i) to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary,
(ii) to cause the recordation of parcel maps and restrictions, (iii) to create and/or install new utility raceways, so long as such easements, rights, dedications, maps, restrictions,
and utility raceways do not unreasonably interfere with the use of the Premises by Lessee. Lessor may also: change the name, address or title of the Building or Project upon at least 60 days
prior written notice; provide and install, at Lessee's expense, Building standard graphics on the door of the Premises and such portions of the Common Areas as Lessor shall reasonably deem
appropriate; grant to any lessee the exclusive right to conduct any business as long as such exclusive right does not conflict with any rights expressly given herein; and to place such signs, notices
or displays as Lessor reasonably deems necessary or advisable upon the roof, exterior of the Building or the Project or on pole signs in the Common Areas. Lessee agrees to sign any documents
reasonably requested by Lessor to effectuate such rights. The obstruction of Lessee's view, air, or light by any structure erected in the vicinity of the Building, whether by Lessor or third parties,
shall in no way affect this Lease or impose any liability upon Lessor. 


        (b)   Lessor
also reserves the right to move Lessee to other space of comparable size in the Building or Project. Lessor must provide at least 60 days prior written
notice of such move, and the new space must contain improvements of comparable quality to those contained within the Premises. Lessor shall pay the reasonable out of pocket costs that Lessee incurs
with regard to such relocation, including the expenses of moving and necessary stationary revision costs. In no event, however, shall Lessee be required to pay a per square foot amount more then
called for in the original Lease. Lessee may not be relocated more than once during the term of this Lease. 


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




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


43.    Authority.    



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


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




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


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


46.    Amendments.    This Lease may be modified only in writing, signed by the Parties in interest at the
time of the modification. As long as they do not materially change Lessee's obligations hereunder, Lessee agrees to make such reasonable nonmonetary modifications to this Lease as may be reasonably
required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises. 



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


48.    Waiver of Jury Trial.    THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.


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


50.    Americans with Disabilities Act.    In the event that as a result of Lessee's
use, or intended use, of the Premises the Americans with Disabilities Act or any similar law requires modifications or the construction or installation of improvements in or to the Premises, Building,
Project and/or Common Areas, the Parties agree that such modifications, construction or improvements shall be made at: o Lessor's expense
o 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 AMERICAN INDUSTRIAL 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 AND SIZE OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE
SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE. 




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


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



	Executed at: Larkspur CA              	 	Executed at: Irvine, Calif.              
	

on:
2-20-02                                      	
 	

on:
2/6/02                                      
	By LESSOR:	 	By LESSEE: /s/ Richard Little





	

  
  
 Initials	
 	

 	
 	

 	
 	

 	
 	

/s/ RL
  
 Initials
	

©1999 — American Industrial Real Estate Association	
 	

REVISED	
 	

FORM OFG-1-9/99E




11







 


	F&F Simon Rancho Tech, LLC
	 	Hire Right, Inc., a California Corporation

	

	
 	


	

By: /s/ Darla T. Flanagan              	
 	

By:                                        
        
	Name Printed: Darla T. Flanagan                   	 	Name Printed: Richard Little                        
	Title: Member of Manager                             	 	Title: Chief Financial Officer                   
	

By:                                        
                  	
 	

By:                                        
                  
	Name
Printed:                                  	 	Name
Printed:                                  
	Title:                                       
         	 	Title:                                       
         
	Address:                                      
   	 	Address:                                      
   
	

 	
 	

 
	
	 	

	

 	
 	

 
	
	 	

	

 	
 	

 
	
	 	

	Telephone / Facsimile	 	Telephone / Facsimile
	Federal ID
No.                                  	 	Federal ID
No.                                  
	LESSOR'S

BROKER:	 	LESSEE'S

BROKER:
	CB Richard Ellis, Inc.
	 	Jones Lang LaSalle Americas, Inc.

	Attn: Natalie Bazarevitsch              	 	Attn: Thomas A. Murphy                             
	Address: 4141 Inland Empire Blvd., Suite 100              	 	Address: 19800 MacArthur Blvd., Suite 1040                 
	               Ontario, CA
91764                                         
   	 	               Irvine, CA
92612                                         
        
	

 	
 	

 
	
	 	

	(909) 418-2130/(909) 418-2100
	 	(949) 224-3434/(949) 222-1208

	Telephone / Facsimile No.	 	Telephone / Facsimile No.





These forms are often modified to meet changing requirements of law and needs of the Industry. Always write or call to make sure you are utilizing the most current form:
American Industrial Real Estate Association, 700 South Flower Street, Suite 600, Los Angeles, CA 90017.

(213) 687-8777.  


©Copyright 1999-By American Industrial Real Estate Association.

All rights reserved.

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



	

  
  
 Initials	
 	

 	
 	

 	
 	

 	
 	

/s/ RL
  
 Initials
	

©1999 — American Industrial Real Estate Association	
 	

REVISED	
 	

FORM OFG-1-9/99E




12









 
 

ADDENDUM TO LEASE    
    


        THIS IS AN ADDENDUM TO LEASE DATED FOR REFERENCED PURPOSES AS DECEMBER 27, 2001, BY AND BETWEEN F&F SIMON RANCHO TECH, LLC AS "LESSOR" AND HIRERIGHT, INC.,
A CALIFORNIA CORPORATION AS "LESSEE" COVERING THE PROPERTY COMMONLY KNOWN AS THE CALIFORNIA TECH CENTER LOCATED AT 10801 SIXTH STREET, RANCHO CUCAMONGA, CALIFORNIA 91730. IF THERE IS A CONFLICT
BETWEEN THE ADDENDUM AND THE ORIGINAL LEASE, THE TERM OF THIS ADDENDUM WILL PREVAIL. 


	1.
	MUST
TAKE SPACE: 



The
Base Rent, as defined in the Lease, is calculated upon Eleven Thousand (11,000) rentable square feet (RSF), and Lessee acknowledges Lessor has given Lessee an additional 5,827 RSF at no additional
charge for the first twelve (12) months of the Lease after which time, Lessee shall be obligated to pay rent for the entire 16,827 RSF. 



	2.
	RENTAL
INCREASE: 



The
base rental rate shall be increased by three percent (3%) annually, including any Option(s) periods. 



	3.
	OPTION(S)
TO EXTEND:



	(a)
	In
order to exercise an Option to Extend for two (2), three (3) month periods, Lessee must give written notice of such election to Lessor and Lessor must receive the same at
least ninety (90) days, but not more than one hundred eighty (180) days prior to the date that the Option period would commence, time being of the essence. If proper notification of the
exercise of an Option is not given and/or received, such Option shall automatically expire. Options (if there are more than one) may only be exercised consecutively.



	(b)
	The
provisions of paragraph 39, including those relating to the Lessee's Default set forth in paragraph 39.4 of this Lease, are conditions of this Option.



	(c)
	Except
for the provisions of this Lease granting an Option or Options to Extend the Term, all of the terms and conditions of this Lease except where specifically modified by this
Option shall apply.



	(d)
	Option
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 in full possession of the
Premises and without the intention of thereafter assigning or subletting.






	4.
	LESSEE
IMPROVEMENTS: 



Lessee
shall be responsible for their Lessee improvements. 



	5.
	EXPANSION
RIGHTS: 



Lessor
shall grant to Lessee a Right of First Negotiation on all contiguous available space during its tenancy. 


Lessee
may choose to take the Expansion space and existing space on a long-term basis. So long as such long-term is five (5) years or more from the planned effective
date of the Expansion space, and that the then combined space (existing and expansion) is at least 20,000 rentable square feet, the Lessee Improvements, Rental Rate, and Renewal Option provisions
detailed under Right of First Negotiation below, shall apply to the new combined space lease. 


Lessee
shall have the ability to take Expansion space other than if responding to the Right of First Negotiation. In such cases Lessee would take Expansion space to be co-terminus with the
existing space and under the same rental rate and the space would be taken "as is". However, in the event Lessee elects to go long-term, so long as it is at least 20,000 rentable square
feet, then Lessee would receive the tenant improvement allowance as described under Right of First Negotiation. 












	6.
	RIGHT
OF FIRST NEGOTIATION: 



Lessee
shall have a Right of First Negotiation to expand into contiguous space. Lessor shall notify Lessee of the terms of any bona fide written offer acceptable to Lessor for contiguous space. Lessee
shall have seven (7) business days to take said contiguous space by entering into a new Lease transaction under the terms detailed below. Lessor agrees to give Lessee reasonable notice that it
is in negotiations on contiguous space. 


	•
	Size:
A minimum rentable square feet (RSF) so that Lessee's entire Premises is at least 20,000 RSF.



	•
	Term:
A new Term for a minimum of five (5) years.



	•
	Tenant
Improvements: Lessor shall provide a Tenant Improvement Allowance of $10.00 per usable square foot (USF) on the entire Premises. Lessee may use the allowance to
improve the space.



	•
	Renewal
Options: Lessee shall have one (1), five (5) year Renewal Option at a Fair Market Rental Rate.



	•
	Financial
Covenant: These terms are subject to Lessee maintaining a net worth of $3,000,000 or more at the time the expansion rights are exercised.






	7.
	INDEMNITIES:




Lessor
agrees to indemnify, protect, defend and hold harmless Lessee from any claims, costs or expenses arising from Lessor's grossly negligent acts or willful misconduct involving or in connection
with, its ownership and operation of the Building or the Premises. 



	8.
	PARKING: 



Lessee
shall be entitled to use 129 parking spaces during the initial 18 month term of the Lease, free of charge. Thereafter, the Lessee may use 5 spaces per 1,000 usable square feet leased at
no charge. Lessee agrees that Lessor reserves the right to charge $25.00 per space per month for any additional spaces. 



	9.
	ACCESS:




Lessee
shall have unrestricted access to the Building, Parking, and Premises, 365 days per year, 24 hours per day, 7 days per week. Lighting shall be available in Lessee's
Premises at all such times. 



	10.
	HEATING,
VENTILATION AND AIR-CONDITIONING (HVAC): 



Lessor
shall provide after-hours HVAC for Lessee's premises, Suite A4-2. In the event Lessee requires after-hours usage, Lessee shall notify building engineer and/or property manager by
noon of the same day. Lessee shall pay the actual costs for electricity directly to the provider, without any profit or surcharge to Landlord, except for Landlord costs to provide after-hours HVAC
usage. 



	11.
	FIRE
PROTECTION AND LIFE SAFETY: 



The
Building and the Premises shall be equipped with fire protection and life safety features as required by applicable local, state and federal building codes. 









AGREED
AND ACCEPTED: 



	Lessor: F&F Rancho Simon Tech, LLC	 	Lessee: HireRight, Inc., a California Corporation
	

By:	

/s/  DARLA T. FLANAGAN      
	
 	

By:	

/s/  RICHARD LITTLE      

	Its:	Darla T. Flanagan, Member of Manager
	 	Its:	Richard Little, Chief Financial Officer

	Date:	2-19-02
	 	Date:	Date: 2-6-02











  



 
 

FIRST AMENDMENT TO LEASE    
    


        THIS FIRST AMENDMENT TO LEASE ("Amendment") is made effective as of the 16th day of April 2003, and is in addition to and supplements the Lease dated
December 27, 2001 (the "Agreement"), by and between F&F Simon Rancho Tech, LLC, a Delaware limited liability company ("Lessor") and HireRight, Inc., a California corporation ("Lessee"). 


 
 

RECITALS:    
    


        NOW THEREFORE, for good and valuable consideration, and other mutual covenants, Lessee and Lessor hereby agree as follows: 



        1.    Premises.    Effective May 1, 2004, the Tenant shall pay the Base Rent and Operating Expenses based upon
an increase in Rentable Square Feet from 11,000 sf to 16,827 sf. 


        2.    Term.    The term of this Amendment shall commence on April 1, 2003 and terminate on October 31,
2006. 


        3.    Base Rent.    The Monthly Full Service Gross Base Rent shall be amended pursuant to the following schedule: 



	 	 	April 1, 2003 - April 30, 2004	 	$	17,160.00
	 	 	 	 	

	 	 	May 1, 2004 - April 30, 2005	 	$	27,091.47
	 	 	 	 	

	 	 	May 1, 2005 - April 30, 2006	 	$	27,764.55
	 	 	 	 	

	 	 	May 1, 2006 - October 31, 2006	 	$	28,605.90
	 	 	 	 	






        4.    Operating Expenses.    Article 1.9 and 4.2 of the Agreement shall be amended to provide for a 2003 base
year. In addition, electricity and janitorial service expenses shall be included in the total operating expenses for the project. 


        5.    Tenant Improvements.    Upon receipt of support documentation including but not limited to (i) copies of
the tenant improvement agreement, (ii) copies of invoices and related evidence reasonably acceptable to Lessor establishing the amount paid by Lessee, which shall set forth in reasonable detail
the amount paid, the party to whom it was paid, the date it was paid and the reasons giving rise to such payment, (iii) evidence that the property is free of all liens relating to the design,
construction and installation of the tenant improvements, including, without limitation, final conditional lien waivers from Lessee's contractors and suppliers conditioned only upon payment of the
Tenant Allowance, (iv) receipt of copies of all governmental permits and approvals required in order for Lessee to occupy the Premises, Lessor shall reimburse Lessee for the previously paid
construction costs which amount shall not exceed the sum of $65,000.00. 


        6.    Right of First Offer.    Provided Lessee is not then in default under the Lease, Lessee shall have a one time
right to lease suites 210 and 220 ("Right of First Offer") as and when they become available ("Additional Space"), subject to any rights previously awarded to existing Lessees in the building. Lessor
shall provide Lessee with written notice after Lessor becomes aware of any such Additional Space that will become available and the terms upon which Lessor is willing to lease such space to a member
of the general public, including but not limited to, the rental rate and tenant improvement allowance, if any. Lessee shall have five (5) business days to respond in writing to Lessor to commit
to lease the Additional Space. In the event Lessee timely responds in writing to Lessor and elects to lease the Additional Space, an amendment to this Lease shall be prepared and executed by the
parties evidencing the same. In the event Lessee fails to respond timely or elects not to lease the Additional Space, Lessor shall have the right to lease such Additional Space to the general public
and Lessee shall have no further Right of First Offer with respect to such Additional Space. This Right of First Offer is personal to Lessee and may not be assigned upon any sublease of the Premises
by Lessee. 


2







 



        7.    Lease Addendum.    Sections 3, 5 and 6 of the Lease Addendum dated December 27, 2001 are hereby deleted
in their entirety. 


        8.    Miscellaneous.    The Agreement, as amended by this First Amendment, shall continue in full force and effect in
accordance with its terms. All capitalized terms not otherwise defined in this Amendment shall have the meanings given such terms in the Amendment. 


        9.    Successors and Assigns.    This Amendment shall bind and inure to the benefit of the parties hereto and their
respective heirs, successors and assigns. 


IN
WITNESS WHEREOF, the parties have executed this First Amendment as of the date first written above. 



	Lessor:	 	Lessee:
	

F&F Simon Rancho Tech, LLC

A Delaware limited liability company

Trinity Property Consultants, LLC.

A California limited liability company

It's authorized agent	
 	

HIRERIGHT, INC.

a California corporation
	

By:	

/s/  JAMES ESTRADA      
	
 	

By:	

/s/  RICHARD LITTLE      

	 	James Estrada	 	Name:	Richard Little

	 	Senior Vice President	 	Its:	CFO

	

 	

 	
 	

By:	

 
	 	 	 	 	

	 	 	 	Name:	 
	 	 	 	 	

	 	 	 	Its:	 
	 	 	 	 	





3








  



 
 

SECOND AMENDMENT TO LEASE    
    


        THIS SECOND AMENDMENT TO LEASE ("Second Amendment") is dated the 14th day of July, 2006, by and between ARI COMMERCIAL PROPERTIES, INC., a California
corporation, in its capacity as agent for the tenant in common owners of the property ("Lessor") and HIRERIGHT, INC., a California corporation ("Lessee"), with reference to the following facts: 


 
 

RECITALS:    
    


        A.    Lessor
(as successor of F&F Simon Rancho Tech, LLC) and Lessee are parties to that certain Lease dated for reference purposes as of December 27, 2001 (the "Base
Lease"), as amended by that certain First Amendment to Lease dated for reference purposes as of April 16, 2003 (collectively, the "Original Lease"), pursuant to which Lessee leased certain
premises comprising 16,827 rentable square feet (the "Premises") in the building commonly known as The Atrium at Empire Lakes with the address of 10801 Sixth Street, Rancho Cucamonga, California (the
"Building"). 


        B.    F&F
Simon Rancho Tech, LLC subsequently sold the Building and assigned the Lease to ARI-Atrium Office Building, LLC, a Delaware limited liability company, who
in turn sold its interest to the tenant in common owners who have appointed Lessor as agent to handle all leasing and property management matters on its behalf. 


        C.    Lessee
acknowledges that the Lease is in full force and effect, and each of the parties desires to amend the Lease pursuant to this Second Amendment. Capitalized terms
not otherwise defied herein shall have the meanings ascribed to such terms in the Original Lease. The Original Lease as amended by this Second Amendment is hereinafter referred to as the "Lease." 



        NOW,
THEREFORE, the parties agree as follows: 


 
 

AGREEMENT:    
    


        1.    Term.    The term of the Lease shall be extended commencing on November 1, 2006 and terminating on
October 31, 2009 (the "Second Amendment Lease Extension Term"). 



        2.    Base Rent.    The Monthly Full Service Gross Base Rent shall be amended pursuant to the following schedule: 



	November 1, 2006 through October 31, 2007	 	$	31,129.95
	November 1, 2007 through October 31, 2008	 	$	32,063.85
	November 1, 2008 through October 31, 2009	 	$	33,025.76






        3.    Operating Expenses.    Article 1.9 and 4.2 of the Lease shall be amended to provide for a 2006 Base Year
for the Second Amendment Lease Extension Term. Lessee shall not pay any operating expense pass-throughs or increases for the initial twelve (12) months of the Second Amendment Lease
Extension Term. In addition, Article 4.2, section (f) shall be amended so that Lessor shall use best efforts to deliver to Lessee within 150-days after the expiration of each
Comparison Year a reasonably detailed statement showing Lessee's Share of the actual Operating Expense Increase incurred during such year. 



        4.    Tenant Improvements.    Lessor shall provide Lessee a tenant improvement allowance of $25,240.50 for cosmetic
changes to the Premises or as a credit against the future cost of after hours HVAC (as defined in Section 8 below) that Lessee may incur. Any cosmetic changes to the Premises shall require
written approval of Lessor, which shall not be unreasonably withheld or conditioned and be completed by contractors approved by Lessor, in Lessor's reasonable discretion. 


        5.    Parking.    Article 1.2(b) of the Base Lease shall be amended to provide Lessee with 101 unreserved
parking spaces. 


1







 

        6.    Termination Option.    Lessee shall have a one time right to terminate the Lease effective December 31,
2008, with written notice to Lessor no later than June 30, 2008 along with a termination option fee in the amount of $19,836.79. 



        7.    Holdover Provision.    Article 26 of the Lease shall be modified as follows: if Lessee holds over at the
termination of this Lease, with six (6) month's prior written notice, its tenancy shall be a month-to-month tenancy on the same terms and conditions as the Lease, except
that each monthly rent installment will be one hundred and twenty-five percent (125%) of the amount of the most recent prior monthly base rent installment for a holdover of three
(3) months or less; and one hundred and fifty percent (150%) of the amount of the most previous monthly base rent instalment (i) for a holdover of four (4) months or more, or
(ii) if Lessee has not provided the six (6) month's prior notice. Notwithstanding anything to the contrary in the Lease, the holdover rental shall be Lessor's exclusive right and remedy
against Lessee for such holdover tenancy, and Lessee shall be deemed discharged from all other liability, obligation or charges incurred by Lessor as a result of Lessee's holdover. 


        8.    Heating, Ventilating and Air Conditioning ("HVAC").    In the event Lessee requires HV AC beyond the building
standard operating hours as set forth in Section 1.12 of the Base Lease ("Above Building Standard HVAC"), Lessee shall pay Lessor's estimate of the actual cost to provide such services. After
hours costs may include equipment depreciation, normal wear and tear, actual electricity charges and an administration fee not to exceed 3%. Lessor's current estimate of Above Building Standard HVAC
is $70.00 per hour. 


        9.    Assignment and Subletting.    Section 12 of the Base Lease is hereby amended as follows: 



	(a)
	Notwithstanding
anything contained in this Lease to the contrary, Lessee may assign this Lease or sublet the Premises or a portion thereof without Lessor's prior consent ("Permitted
Transfer") to any parent, subsidiary or affiliate entity which controls, is controlled by or is under common control with Lessee, whether as the result of the sale of all or substantially all of its
assets, the sale of its capital stock, or a merger or consolidation with or into another entity; provided that, Lessee has delivered to Lessor ten (10) days prior written notice of any
Permitted Transfer, together with satisfactory evidence documenting any transaction giving rise to the Permitted Transfer. Notwithstanding the foregoing, in no event shall any Permitted Transfer,
release or discharge Lessee of or from any liability hereunder, and Lessee shall be jointly and severally liable with any successor Lessee for all of the obligations and liabilities of Lessee under
this Lease.



	(b)
	All
assignments or subletting which are not a Permitted Transfer are subject to the prior written consent of Lessor, which consent shall not be unreasonably withheld, delayed or
conditioned. In the event that Lessor approves the requested assignment, subletting or other transfer, Lessor shall be entitled to receive fifty percent (50%) of any amounts paid by the assignee or
subtenant, however described, in excess of (i) the Basic Rent payable by Lessee hereunder, or in the case of a sublease of a portion of the Premises, in excess of the Base Rent reasonably
allocable to such portion as determined by Lessor, plus (ii) Lessee's direct out-of-pocket costs, including but not limited to concessions, commissions, legal fees and
vacancy costs. 




        10.    Brokerage Commissions.    The parties recognize Thomas P. Pierik of Lee & Associates, Inc. as the
broker for Lessor ("Lessor's Broker") and Thomas A. Murphy of Jones Lang LaSalle of the Americas as the broker for Lessee ("Lessee's Broker") regarding negotiation of this Second Amendment and agree
that Lessor shall be responsible for the payment of all brokerage commissions to those brokers. Lessor agrees to pay a commission of four percent (4%) to the total lease consideration to Lessee's
Broker within thirty (30) days following the execution of this Second Amendment. Lessor will compensate Lessor's Broker pursuant to a separate written agreement. It is understood and agreed
that Lessor's Broker represents only Lessor in this transaction and that Lessee's 


2







 



Broker
(if any) represents only Lessee. Each party warrants that it has had no dealings with any other real estate broker or agent in connection with the negotiation of this Lease, and agrees to
indemnify and hold the other party harmless from any cost, expense or liability (including reasonable attorneys' fees) for any compensation, commissions or charges claimed by any other real estate
broker or agent employed by the indemnifying party in connection with the negotiation of this Lease. The foregoing agreement shall survive the termination of this Lease. 


        11.    Access.    Notwithstanding anything to the contrary contained within this Lease, Lessee and its employees shall
have access to the Premises 24 hours per day, 7 days per week. 



        12.    Successors and Assigns.    This Amendment shall bind and inure to the benefit of the parties hereto and their
respective heirs, successors and assigns. 


        13.    Miscellaneous.    The Original Lease, as amended by this Second Amendment, shall continue in full force and
effect in accordance with its terms. 


IN
WITNESS WHEREOF, the parties have executed this Second Amendment as of the date first written above. 



	LESSOR ARI—Commercial Properties, Inc.	 	 
	

By:	

/s/  DAVID HO      
	
 	

7/26/2006

	Name:	David Ho	 	Date:
	Title:	Senior Vice President	 	 
	

LESSEE

HireRight, Inc., a California corporation	
 	

 
	

By:	

/s/  ERIC BODEN      
	
 	

July 14, 2006

	Name:	Eric Boden
	 	Date:
	Title:	CEO
	 	 




3











QuickLinks



Exhibit 10.8


[LOGO]  STANDARD MULTI-TENANT OFFICE LEASE—GROSS AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION



ADDENDUM TO LEASE


FIRST AMENDMENT TO LEASE

RECITALS


SECOND AMENDMENT TO LEASE

RECITALS

AGREEMENT