Document:

Exhibit
      10.3

    Gran
      Tierra Energy Inc.

     

    2007
      Equity Incentive Plan

     

    Adopted:
      August 9, 2007

    Approved
      By Stockholders: October 10, 2007

    Amended
      by the Board: December 20, 2007

    Amended
      by the Board: January 14, 2008

    Amended
      by the Board: October 9, 2008

    Approved
      by the Stockholders: November 14, 2008

     

    
      	1.	
              General
                Purposes.

            

    

     

    (a) Amendment
      and Restatement.
      The Plan
      is intended as a complete amendment and restatement of the Company’s 2005 Equity
      Incentive Plan (the “Prior
      Plan”).
      All
      outstanding stock awards granted under the Prior Plan shall remain subject
      to
      the terms of the Prior Plan. All Stock Awards granted subsequent to the
      effective date of this Plan shall be subject to the terms of this Plan.

     

    (b) Eligible
      Stock Award Recipients.
      The
      persons eligible to receive Stock Awards are Employees, Directors and
      Consultants.

     

    (c) Available
      Stock Awards.
      The
      purpose of the Plan is to provide a means by which eligible recipients of Stock
      Awards may be given an opportunity to benefit from increases in value of the
      Common Stock through the granting of the following Stock Awards: (i) Options,
      (ii) Restricted Stock Awards, (iii) Stock Appreciation Rights, (iv) Restricted
      Stock Units and (v) Other Stock Awards.

     

    (d) General
      Purpose.
      The
      Company, by means of the Plan, seeks to retain the services of the group of
      persons eligible to receive Stock Awards, to secure and retain the services
      of
      new members of this group and to provide incentives for such persons to exert
      maximum efforts for the success of the Company and its Affiliates.

     

    
      	2.	
              Definitions.

            

    

     

    (a) “Affiliate”
      means
      any
“parent corporation” or “subsidiary corporation” of the Company, whether now or
      hereafter existing, as those terms are defined in Sections 424(e) and (f),
      respectively, of the Code. The Board shall have the authority to determine
      the
      time or times at which “parent corporation” or “subsidiary corporation” status
      is determined within the foregoing definition.

     

    (b) “Board”
      means
      the
      Board of Directors of the Company.

     

    (c) “Capitalization
      Adjustment”
      has
      the
      meaning ascribed to that term in Section 11(a).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d) “Change
      in Control”
      means
      the
      occurrence, in a single transaction or in a series of related transactions,
      of
      any one or more of the following events: 

     

    (i) any
      Exchange Act Person becomes the Owner, directly or indirectly, of securities
      of
      the Company representing more than fifty percent (50%) of the combined voting
      power of the Company’s then outstanding securities other than by virtue of a
      merger, consolidation or similar transaction. Notwithstanding the foregoing,
      a
      Change in Control shall not be deemed to occur (A) on account of the acquisition
      of securities of the Company by an institutional investor, any affiliate thereof
      or any other Exchange Act Person that acquires the Company’s securities in a
      transaction or series of related transactions that are primarily a private
      financing transaction for the Company or (B) solely because the level of
      Ownership held by any Exchange Act Person (the “Subject
      Person”)
      exceeds the designated percentage threshold of the outstanding voting securities
      as a result of a repurchase or other acquisition of voting securities by the
      Company reducing the number of shares outstanding, provided that if a Change
      in
      Control would occur (but for the operation of this sentence) as a result of
      the
      acquisition of voting securities by the Company, and after such share
      acquisition, the Subject Person becomes the Owner of any additional voting
      securities that, assuming the repurchase or other acquisition had not occurred,
      increases the percentage of the then outstanding voting securities Owned by
      the
      Subject Person over the designated percentage threshold, then a Change in
      Control shall be deemed to occur;

     

    (ii) there
      is
      consummated a merger, consolidation or similar transaction involving (directly
      or indirectly) the Company if, immediately after the consummation of such
      merger, consolidation or similar transaction, the stockholders of the Company
      immediately prior thereto do not Own, directly or indirectly, either (A)
      outstanding voting securities representing more than fifty percent (50%) of
      the
      combined outstanding voting power of the surviving Entity in such merger,
      consolidation or similar transaction or (B) more than fifty percent (50%) of
      the
      combined outstanding voting power of the parent of the surviving Entity in
      such
      merger, consolidation or similar transaction;

     

    (iii) there
      is
      consummated a sale, lease, license or other disposition of all or substantially
      all of the consolidated assets of the Company and its Subsidiaries, other than
      a
      sale, lease, license or other disposition of all or substantially all of the
      consolidated assets of the Company and its Subsidiaries to an Entity, more
      than
      fifty percent (50%) of the combined voting power of the voting securities of
      which are Owned by stockholders of the Company in substantially the same
      proportion as their Ownership of the Company immediately prior to such sale,
      lease, license or other disposition; or

     

    (iv) individuals
      who, on the date this Plan is adopted by the Board, are members of the Board
      (the “Incumbent
      Board”)
      cease
      for any reason to constitute at least a majority of the members of the Board;
      provided,
      however,
      that if
      the appointment or election (or nomination for election) of any new Board member
      was approved or recommended by a majority vote of the members of the Incumbent
      Board then still in office, such new member shall, for purposes of this Plan,
      be
      considered as a member of the Incumbent Board).

     

    The
      term
      Change in Control shall not include a sale of assets, merger or other
      transaction effected exclusively for the purpose of changing the domicile of
      the
      Company.

    
      
        
        

      

      
        2.

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
      the foregoing or any other provision of this Plan, the definition of Change
      in
      Control (or any analogous term) in an individual written agreement between
      the
      Company or any Affiliate and the Participant shall supersede the foregoing
      definition with respect to Stock Awards subject to such agreement (it being
      understood, however, that if no definition of Change in Control or any analogous
      term is set forth in such an individual written agreement, the foregoing
      definition shall apply).

     

    (e) “Code”
      means
      the United States Internal Revenue Code of 1986, as amended.

     

    (f) “Committee”
      means a
      committee of one or more members of the Board appointed by the Board in
      accordance with Section 3(c).

     

    (g) “Common
      Stock”
      means
      the common stock of the Company.

     

    (h) “Company”
      means
      Gran Tierra Energy Inc., a Nevada corporation.

     

    (i) “Consultant”
      means
      any person, including an advisor, (i) engaged by the Company or an Affiliate
      to
      render consulting or advisory services and who is compensated for such services
      or (ii) serving as a member of the Board of Directors of an Affiliate and who
      is
      compensated for such services. However, the term “Consultant” shall not include
      Directors who are not compensated by the Company for their services as
      Directors, and the payment of a director’s fee by the Company for services as a
      Director shall not cause a Director to be considered a “Consultant” for purposes
      of the Plan.

     

    (j) “Continuous
      Service”
      means
      that the Participant’s service with the Company or an Affiliate, whether as an
      Employee, Director or Consultant, is not interrupted or terminated. A change
      in
      the capacity in which the Participant renders service to the Company or an
      Affiliate as an Employee, Consultant or Director or a change in the entity
      for
      which the Participant renders such service, provided that there is no
      interruption or termination of the Participant’s service with the Company or an
      Affiliate, shall not terminate a Participant’s Continuous Service; provided,
      however, if
      the
      Entity for which a Participant is rendering services ceases to qualify as an
      Affiliate, as determined by the Board in its sole discretion, such Participant’s
      Continuous Service shall be considered to have terminated on the date such
      Entity ceases to qualify as an Affiliate. For example, a change in status from
      an employee of the Company to a consultant to an Affiliate or to a Director
      shall not constitute an interruption of Continuous Service. To the extent
      permitted by law, the Board or the chief executive officer of the Company,
      in
      that party’s sole discretion, may determine whether Continuous Service shall be
      considered interrupted in the case of any leave of absence approved by that
      party, including sick leave, military leave or any other personal leave.
      Notwithstanding the foregoing, a leave of absence shall be treated as Continuous
      Service for purposes of vesting in a Stock Award only to such extent as may
      be
      provided in the Company’s leave of absence policy or in the written terms of the
      Participant’s leave of absence.

     

    (k) “Corporate
      Transaction”
      means
      the occurrence, in a single transaction or in a series of related transactions,
      of any one or more of the following events:

    
      
        
        

      

      
        3.

        
          

        

      

      
        
        

      

    

     

    (i) the
      consummation of a sale or
      other
      disposition of all or substantially all, as determined by the Board in its
      discretion, of the consolidated assets of the Company and its
      Subsidiaries;

     

    (ii) the
      consummation of a sale or other disposition of at least fifty percent (50%)
      of
      the outstanding securities of the Company; 

     

    (iii) the
      consummation of a merger, consolidation or similar transaction following which
      the Company is not the surviving corporation; or

     

    (iv) the
      consummation of a merger, consolidation or similar transaction following which
      the Company is the surviving corporation but the shares of Common Stock
      outstanding immediately preceding the merger, consolidation or similar
      transaction are converted or exchanged by virtue of the merger, consolidation
      or
      similar transaction into other property, whether in the form of securities,
      cash
      or otherwise.

     

    (l) “Covered
      Employee”
      shall
      have the meaning provided in Section 162(m)(3) of the Code. 

     

    (m) “Director”
      means a
      member of the Board.

     

    (n) “Disability”
      means
      the permanent and total disability of a person within the meaning of Section
      22(e)(3) of the Code.

     

    (o) “Disinterested
      Stockholders”
      means
      all of the stockholders of the Company except Insiders of the Company who are
      eligible to receive Stock Awards, and such Insiders’ associates.

     

    (p) “Employee”
      means
      any person employed by the Company or an Affiliate. Service as a Director or
      payment of a director’s fee by the Company for such service or for service as a
      member of the Board of Directors of an Affiliate shall not be sufficient to
      constitute “employment” by the Company or an Affiliate.

     

    (q) “Entity”
      means a
      corporation, partnership, limited liability company or other
      entity.

     

    (r) “Exchange
      Act”
      means
      the Securities Exchange Act of 1934, as amended.

     

    (s) “Exchange
      Act Person”
      means
      any natural person, Entity or “group” (within the meaning of Section 13(d) or
      14(d) of the Exchange Act), except that “Exchange Act Person” shall not include
      (A) the Company or any Subsidiary of the Company, (B) any employee benefit
      plan
      of the Company or any Subsidiary of the Company or any trustee or other
      fiduciary holding securities under an employee benefit plan of the Company
      or
      any Subsidiary of the Company, (C) an underwriter temporarily holding securities
      pursuant to an offering of such securities, or (D) an Entity Owned, directly
      or
      indirectly, by the stockholders of the Company in substantially the same
      proportions as their Ownership of stock of the Company. 

    
      
        
        

      

      
        4.

        
          

        

      

      
        
        

      

    

     

    (t) “Fair
      Market Value”
      means,
      as of any date, the value of the Common Stock determined as
      follows:

     

    (i) If
      the
      Common Stock is listed on any established stock exchange or traded on the Nasdaq
      Global Select Market, Nasdaq Global Market or the Nasdaq Capital Market, the
      Fair Market Value of a share of Common Stock, unless otherwise determined by
      the
      Board, shall be the closing sales price for such stock (or the closing bid,
      if
      no sales were reported) as quoted on such exchange or market (or the exchange
      or
      market with the greatest volume of trading in the Common Stock) on the day
      of
      determination (or if such day of determination does not fall on a market trading
      day, then the last market trading day prior to the day of determination), as
      reported in a source the Board deems reliable. 

     

    (ii) In
      the
      absence of such markets for the Common Stock, the Fair Market Value shall be
      determined in good faith by the Board and in a manner that complies with
      Sections 409A and 422 of the Code.

     

    (u) “Insider”
      means an
“insider” as defined under the policies of the Toronto Stock Exchange, as
      amended from time to time, which includes, among others, Directors and TSX
      Officers of the Company.

     

    (v) “Non-Employee
      Director”
      means a
      Director who either (i) is not currently an employee or officer of the Company
      or its parent or a subsidiary, does not receive compensation, either directly
      or
      indirectly, from the Company or its parent or a subsidiary, for services
      rendered as a consultant or in any capacity other than as a Director (except
      for
      an amount as to which disclosure would not be required under Item 404(a) of
      Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)),
      does not possess an interest in any other transaction for which disclosure
      would
      be required under Item 404(a) of Regulation S-K, and is not engaged in a
      business relationship for which disclosure would be required pursuant to
      Item 404(b) of Regulation S-K; or (ii) is otherwise considered a
“non-employee director” for purposes of Rule 16b-3.

     

    (w) “Officer”
      means a
      person who is an officer of the Company within the meaning of Section 16 of
      the Exchange Act and the rules and regulations promulgated
      thereunder.

     

    (x) “Option”
      means a
      stock option granted pursuant to the Plan that is not intended to qualify as
      an
“incentive stock option” within the meaning of Section 422 of the Code and the
      regulations promulgated thereunder.

     

    (y) “Option
      Agreement”
      means a
      written agreement between the Company and an Optionholder evidencing the terms
      and conditions of an individual Option grant. Each Option Agreement shall be
      subject to the terms and conditions of the Plan.

     

    (z) “Optionholder”
      means a
      person to whom an Option is granted pursuant to the Plan or, if applicable,
      such
      other person who holds an outstanding Option.

     

    (aa) “Other
      Stock Award”
      means an
      award based in whole or in part by reference to the Common Stock which is
      granted pursuant to the terms and conditions of Section 7(d).

    
      
        
        

      

      
        5.

        
          

        

      

      
        
        

      

    

     

    (bb) “Outside
      Director”
      means a
      Director who either (i) is not a current employee of the Company or an
“affiliated corporation” (within the meaning of Treasury Regulations promulgated
      under Section 162(m) of the Code), is not a former employee of the Company
      or an
“affiliated corporation” who receives compensation for prior services (other
      than benefits under a tax qualified retirement plan) during the taxable year,
      has not been an officer of the Company or an “affiliated corporation,” and does
      not receive remuneration from the Company or an “affiliated corporation,” either
      directly or indirectly, in any capacity other than as a Director or (ii) is
      otherwise considered an “outside director” for purposes of Section 162(m) of the
      Code. 

     

    (cc) “Own,” “Owned,”
      “Owner,” “Ownership”
      A person
      or Entity shall be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to
      have acquired “Ownership” of securities if such person or Entity, directly or
      indirectly, through any contract, arrangement, understanding, relationship
      or
      otherwise, has or shares voting power, which includes the power to vote or
      to
      direct the voting, with respect to such securities.

     

    (dd) “Participant”
      means a
      person to whom a Stock Award is granted pursuant to the Plan or, if applicable,
      such other person who holds an outstanding Stock Award.

     

    (ee) “Plan”
      means
      this Gran Tierra Energy Inc. 2007 Equity Incentive Plan.

     

    (ff) “Restricted
      Stock Award”
      means an
      award of shares of Common Stock which is granted pursuant to the terms and
      conditions of Section 7(a).

     

    (gg) “Restricted
      Stock Unit”
      means a
      right to receive shares of Common Stock which is granted pursuant to the terms
      and conditions of Section 7(b).

     

    (hh) “Rule
      16b-3”
      means
      Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3,
      as
      in effect from time to time.

     

    (ii) “Securities
      Act”
      means
      the Securities Act of 1933, as amended.

     

    (jj) “Stock
      Appreciation Right”
      means a
      right to receive the appreciation on Common Stock that is granted pursuant
      to
      the terms and conditions of Section 7(c).

     

    (kk) “Stock
      Award”
      means
      any right granted under the Plan, including an Option, Restricted Stock Award,
      Restricted Stock Unit, Stock Appreciation Right and Other Stock
      Award.

     

    (ll) “Stock
      Award Agreement”
      means a
      written agreement between the Company and a holder of a Stock Award evidencing
      the terms and conditions of an individual Stock Award grant. Each Stock Award
      Agreement shall be subject to the terms and conditions of the Plan.

     

    (mm) “Subsidiary”
      means,
      with respect to the Company, (i) any corporation of which more than fifty
      percent (50%) of the outstanding capital stock having ordinary voting power
      to
      elect a majority of the board of directors of such corporation (irrespective
      of
      whether, at the time, stock of any other class or classes of such corporation
      shall have or might have voting power by reason of the happening of any
      contingency) is at the time, directly or indirectly, Owned by the Company,
      and
      (ii) any partnership in which the Company has a direct or indirect interest
      (whether in the form of voting or participation in profits or capital
      contribution) of more than fifty percent (50%).

    
      
        
        

      

      
        6.

        
          

        

      

      
        
        

      

    

     

    (nn) “TSX
      Officer”
      means a
      senior officer of the Company or any subsidiary and includes an issuer, all
      of
      the voting securities of which are owned by a TSX Officer.

     

    
      	3.	
              Administration.

            

    

     

    (a) Administration
      by Board.
      The
      Board shall administer the Plan unless and until the Board delegates
      administration to a Committee, as provided in Section 3(c).

     

    (b) Powers
      of Board.
      The
      Board shall have the power, subject to, and within the limitations of, the
      express provisions of the Plan:

     

    (i) To
      determine from time to time which of the persons eligible under the Plan shall
      be granted Stock Awards; when and how each Stock Award shall be granted; what
      type or combination of types of Stock Award shall be granted; the provisions
      of
      each Stock Award granted (which need not be identical), including the time
      or
      times when a person shall be permitted to receive Common Stock pursuant to
      a
      Stock Award; and the number of shares of Common Stock with respect to which
      a
      Stock Award shall be granted to each such person.

     

    (ii) To
      construe and interpret the Plan and Stock Awards granted under it, and to
      establish, amend and revoke rules and regulations for its administration. The
      Board, in the exercise of this power, may correct any defect, omission or
      inconsistency in the Plan or in any Stock Award Agreement, in a manner and
      to
      the extent it shall deem necessary or expedient to make the Plan or Stock Award
      fully effective.

     

    (iii) To
      settle
      all controversies regarding the Plan and Stock Awards granted under
      it.

     

    (iv) To
      amend
      the Plan or a Stock Award as provided in Section 12.

     

    (v) To
      terminate or suspend the Plan as provided in Section 13.

     

    (vi) Generally,
      to exercise such powers and to perform such acts as the Board deems necessary
      or
      expedient to promote the best interests of the Company and that are not in
      conflict with the provisions of the Plan or Stock Awards.

     

    (vii) To
      adopt
      such procedures and sub-plans as are necessary or appropriate to permit
      participation in the Plan by Employees, Directors or Consultants who are located
      in various local jurisdictions. 

     

    (c) Delegation
      to Committee.

     

    (i) General.
      The
      Board may delegate administration of the Plan to a Committee or Committees
      of
      one or more members of the Board, and the term “Committee” shall apply to any
      person or persons to whom such authority has been delegated. If administration
      is delegated to a Committee, the Committee shall have, in connection with the
      administration of the Plan, the powers theretofore possessed by the Board,
      including the power to delegate to a subcommittee any of the administrative
      powers the Committee is authorized to exercise (and references in this Plan
      to
      the Board shall thereafter be to the Committee or subcommittee), subject,
      however, to such resolutions, not inconsistent with the provisions of the Plan,
      as may be adopted from time to time by the Board. The Board may abolish the
      Committee at any time and revest in the Board the administration of the
      Plan.

    
      
        
        

      

      
        7.

        
          

        

      

      
        
        

      

    

     

    (ii) Section
      162(m) and Rule 16b-3 Compliance.
      In the
      discretion of the Board, the Committee may consist solely of two or more Outside
      Directors, in accordance with Section 162(m) of the Code, and/or solely of
      two
      or more Non-Employee Directors, in accordance with Rule 16b-3. In addition,
      the
      Board or the Committee may delegate to a committee of one or more members of
      the
      Board the authority to grant Stock Awards to eligible persons who are either
      (a)
      not then Covered Employees and are not expected to be Covered Employees at
      the
      time of recognition of income resulting from such Stock Award, (b) not persons
      with respect to whom the Company wishes to comply with Section 162(m) of the
      Code, or (c) not then subject to Section 16 of the Exchange Act.

     

    (d) Effect
      of Board’s Decision.
      All
      determinations, interpretations and constructions made by the Board in good
      faith shall not be subject to review by any person and shall be final, binding
      and conclusive on all persons.

     

    
      	4.	
              Shares
                Subject To The Plan.

            

    

     

    (a) Share
      Reserve.
      Subject
      to the provisions of Section 11(a) relating to Capitalization Adjustments,
      the
      Common Stock that may be issued pursuant to Stock Awards shall not exceed in
      the
      aggregate eighteen million (18,000,000) shares of Common Stock.

     

    (b) Reversion
      of Shares to the Share Reserve.
      If any
      Stock Award shall for any reason expire or otherwise terminate, in whole or
      in
      part, without having been exercised in full, the shares of Common Stock not
      acquired under such Stock Award shall revert to and again become available
      for
      issuance under the Plan.

     

    (c) Source
      of Shares.
      The
      shares of Common Stock subject to the Plan may be unissued shares or reacquired
      shares, bought on the market or otherwise.

     

    
      	5.	
              Eligibility.

            

    

     

    (a) Eligibility
      for Specific Stock Awards.
      Stock
      Awards may be granted to Employees, Directors and Consultants.

     

    (b) Section
      162(m) Limitation on Annual Grants.
      Subject
      to the provisions of Section 11(a) relating to Capitalization Adjustments,
      no
      Employee shall be eligible to be granted Options covering more than one million
      (1,000,000) shares of Common Stock during any calendar year. 

     

    (c) Consultants.
      A
      Consultant shall not be eligible for the grant of a Stock Award if, at the
      time
      of grant, a Form S-8 Registration Statement under the Securities Act
      (“Form
      S-8”)
      is not
      available to register either the offer or the sale of the Company’s securities
      to such Consultant because of the nature of the services that the Consultant
      is
      providing to the Company, because the Consultant is not a natural person, or
      because of any other rule governing the use of Form S-8.

     

    
      
        
        

      

      
        8.

        
          

        

      

      
        
        

      

    

     

    
      	6.	
              Option
                Provisions.

            

    

     

    Each
      Option shall be in such form and shall contain such terms and conditions as
      the
      Board shall deem appropriate. The provisions of each Option shall include
      (through incorporation of provisions hereof by reference in the Option or
      otherwise) the substance of each of the following provisions:

     

    (a) Term.  No
      Option
      shall be exercisable after the expiration of ten (10) years from the date on
      which it was granted. 

     

    (b) Exercise
      Price of a Stock Option.
      The
      exercise price of each Option shall be not less than one hundred percent (100%)
      of the Fair Market Value of the Common Stock subject to the Option on the date
      the Option is granted. Notwithstanding the foregoing, an Option may be granted
      with an exercise price lower than that set forth in the preceding sentence
      if
      such Option is granted pursuant to an assumption or substitution for another
      option in a manner satisfying the provisions of Sections 409A and 424(a) of
      the
      Code; provided,
      however,
      that if the Common Stock is listed on the Toronto Stock Exchange, the
      granting of the Option is approved by the Toronto Stock Exchange to the extent
      necessary to satisfy the rules of the Toronto Stock Exchange.

     

    (c) Consideration.
      The
      purchase price of Common Stock acquired pursuant to an Option shall be paid,
      to
      the extent permitted by applicable statutes and regulations, either (i) in
      cash
      at the time the Option is exercised or (ii) at the discretion of the Board
      at
      the time of or subsequently to the grant of the Option (1) by delivery to the
      Company of other Common Stock (whether by actual delivery or attestation),
      (2)
      according to a deferred payment or other similar arrangement with the
      Optionholder or (3) by a “net exercise” of the Option (as further described
      below) (4) pursuant to a program developed under Regulation T as promulgated
      by
      the Federal Reserve Board that, prior to the issuance of Common Stock, results
      in either the receipt of cash (or check) by the Company or the receipt of
      irrevocable instruction to pay the aggregate exercise price to the Company
      from
      the sales proceeds or (5) in any other form of legal consideration that may
      be
      acceptable to the Board. 

     

    In
      the
      case of any deferred payment arrangement, interest shall be compounded at least
      annually and shall be charged at the minimum rate of interest necessary to
      avoid
      (1) the imputation of interest income to the Company and compensation income
      to
      the Optionholder, under any applicable provisions of the Code and (2) the
      classification of the Option as a liability for financial accounting purposes.
      

     

    In
      the
      case of a “net exercise” of an Option, the Company will not require a payment of
      the exercise price of the Option from the Optionholder but will reduce the
      number of shares of Common Stock issued upon the exercise by the largest number
      of whole shares that has a Fair Market Value that does not exceed the aggregate
      exercise price. With respect to any remaining balance of the aggregate exercise
      price, the Company shall accept a cash payment from the Optionholder. The shares
      of Common Stock so used to pay the exercise price of an Option under a “net
      exercise,” the shares actually delivered to the Optionholder, and any shares
      withheld to satisfy tax withholding obligations will be considered to have
      resulted from the exercise of the Option, and accordingly, the Option will
      not
      again be exercisable with respect to such shares.

     

    
      
        
        

      

      
        9.

        
          

        

      

      
        
        

      

    

     

    (d) Transferability
      of an Option.
      An
      Option shall be transferable to the extent provided in the Option Agreement.
      If
      the Option does not provide for transferability, then the Option shall not
      be
      transferable except by will or by the laws of descent and distribution or
      pursuant a domestic relations order and shall be exercisable during the lifetime
      of the Optionholder only by the Optionholder. Notwithstanding the foregoing,
      the
      Optionholder may, by delivering written notice to the Company, in a form
      satisfactory to the Company, designate a third party who, in the event of the
      death of the Optionholder, shall thereafter be entitled to exercise the
      Option.

     

    (e) Vesting
      Generally.
      The
      total number of shares of Common Stock subject to an Option may, but need not,
      vest and therefore become exercisable in periodic installments that may, but
      need not, be equal. The Option may be subject to such other terms and conditions
      on the time or times when it may be exercised (which may be based on performance
      or other criteria) as the Board may deem appropriate. The vesting provisions
      of
      individual Options may vary. The provisions of this Section 6(e) are subject
      to
      any Option provisions governing the minimum number of shares of Common Stock
      as
      to which an Option may be exercised.

     

    (f) Termination
      of Continuous Service.
      In the
      event that an Optionholder’s Continuous Service terminates (other than upon the
      Optionholder’s death or Disability), the Optionholder may exercise his or her
      Option (to the extent that the Optionholder was entitled to exercise such Option
      as of the date of termination) but only within such period of time ending on
      the
      earlier of (i) the date three (3) months following the termination of the
      Optionholder’s Continuous Service (or such longer or shorter period specified in
      the Option Agreement) or (ii) the expiration of the term of the Option as set
      forth in the Option Agreement. If, after termination, the Optionholder does
      not
      exercise his or her Option within the time specified in the Option Agreement,
      the Option shall terminate.

     

    (g) Extension
      of Termination Date.
      An
      Optionholder’s Option Agreement may also provide that if the exercise of the
      Option following the termination of the Optionholder’s Continuous Service (other
      than upon the Optionholder’s death or Disability) would be prohibited at any
      time solely because the issuance of shares of Common Stock would violate the
      registration requirements under the Securities Act, then the Option shall
      terminate on the earlier of (i) the expiration of the term of the Option set
      forth in Section 6(a) or (ii) the expiration of a period of three (3) months
      after the termination of the Optionholder’s Continuous Service during which the
      exercise of the Option would not be in violation of such registration
      requirements.

     

    (h) Disability
      of Optionholder.
      In the
      event that an Optionholder’s Continuous Service terminates as a result of the
      Optionholder’s Disability, the Optionholder may exercise his or her Option (to
      the extent that the Optionholder was entitled to exercise such Option as of
      the
      date of termination), but only within such period of time ending on the earlier
      of (i) the date twelve (12) months following such termination (or such longer
      or
      shorter period specified in the Option Agreement or (ii) the expiration of
      the
      term of the Option as set forth in the Option Agreement. If, after termination,
      the Optionholder does not exercise his or her Option within the time specified
      herein, the Option shall terminate.

     

    
      
        
        

      

      
        10.

        
          

        

      

      
        
        

      

    

     

    (i) Death
      of Optionholder.
      In the
      event that (i) an Optionholder’s Continuous Service terminates as a result of
      the Optionholder’s death or (ii) the Optionholder dies within the period (if
      any) specified in the Option Agreement after the termination of the
      Optionholder’s Continuous Service for a reason other than death, then the Option
      may be exercised (to the extent the Optionholder was entitled to exercise such
      Option as of the date of death) by the Optionholder’s estate, by a person who
      acquired the right to exercise the Option by bequest or inheritance or by a
      person designated to exercise the option upon the Optionholder’s death pursuant
      to Section 6(d), but only within the period ending on the earlier of (1) the
      date eighteen (18) months following the date of death (or such longer or shorter
      period specified in the Option Agreement or (2) the expiration of the term
      of
      such Option as set forth in the Option Agreement. If, after death, the Option
      is
      not exercised within the time specified herein, the Option shall
      terminate.

     

    (j) Early
      Exercise.
      The
      Option may, but need not, include a provision whereby the Optionholder may
      elect
      at any time before the Optionholder’s Continuous Service terminates to exercise
      the Option as to any part or all of the shares of Common Stock subject to the
      Option prior to the full vesting of the Option. Any unvested shares of Common
      Stock so purchased may be subject to a repurchase option in favor of the Company
      or to any other restriction the Board determines to be appropriate. The Company
      will not exercise its repurchase option until at least six (6) months (or such
      longer or shorter period of time required to avoid classification of the Option
      as a liability for financial accounting purposes) have elapsed following
      exercise of the Option unless the Board otherwise specifically provides in
      the
      Option. 

     

    
      	7.	
              Provisions
                Of Stock Awards Other Than
                Options.

            

    

     

    (a) Restricted
      Stock Awards.
      Each
      Restricted Stock Award agreement shall be in such form and shall contain such
      terms and conditions as the Board shall deem appropriate. To the extent
      consistent with the Company’s Bylaws, at the Board’s election, shares of Common
      Stock may be (x) held in book entry form subject to the Company’s instructions
      until any restrictions relating to the Restricted Stock Award lapse; or
      (y) evidenced by a certificate, which certificate shall be held in such
      form and manner as determined by the Board. The terms and conditions of
      Restricted Stock Award agreements may change from time to time, and the terms
      and conditions of separate Restricted Stock Award agreements need not be
      identical; provided,
      however, that
      each
      Restricted Stock Award agreement shall include (through incorporation of the
      provisions hereof by reference in the agreement or otherwise) the substance
      of
      each of the following provisions:

     

    (i) Purchase
      Price.
      At the
      time of the grant of a Restricted Stock Award, the Board will determine the
      price to be paid by the Participant for each share subject to the Restricted
      Stock Award. To the extent required by applicable law, the price to be paid
      by
      the Participant for each share of the Restricted Stock Award will not be less
      than the par value of a share of Common Stock. A Restricted Stock Award may
      be
      awarded as a stock bonus (i.e.,
      with no
      cash purchase price to be paid) to the extent permissible under applicable
      law.

     

    
      
        
        

      

      
        11.

        
          

        

      

      
        
        

      

    

     

    (ii) Consideration.
      At the
      time of the grant of a Restricted Stock Award, the Board will determine the
      consideration permissible for the payment of the purchase price of the
      Restricted Stock Award. The purchase price of Common Stock acquired pursuant
      to
      the Restricted Stock Award shall be paid in one of the following ways: (i)
      in
      cash at the time of purchase; (ii) at the discretion of the Board, according
      to
      a deferred payment or other similar arrangement with the Participant; (iii)
      by
      services rendered or to be rendered to the Company; or (iv) in any other form
      of
      legal consideration that may be acceptable to the Board; provided,
      however, that
      at
      any time that the Company is incorporated in Nevada, the Common Stock’s “par
      value,” as defined in the Nevada Revised Statutes, shall not be paid by deferred
      payment and must be paid in a form of consideration that is permissible under
      the Nevada Corporation Law.

     

    (iii) Vesting.
      Shares
      of Common Stock acquired under a Restricted Stock Award may, but need not,
      be
      subject to a share repurchase option in favor of the Company in accordance
      with
      a vesting schedule to be determined by the Board.

     

    (iv) Termination
      of Participant’s Continuous Service.
      In the
      event that a Participant’s Continuous Service terminates, the Company may
      repurchase or otherwise reacquire any or all of the shares of Common Stock
      held
      by the Participant that have not vested as of the date of termination under
      the
      terms of the Restricted Stock Award agreement. The Company will not exercise
      its
      repurchase option until at least six (6) months (or such longer or shorter
      period of time required to avoid classification of the Restricted Stock Award as
      a liability for financial accounting purposes) have elapsed following the
      purchase of the restricted stock unless otherwise determined by the Board or
      provided in the Restricted Stock Award agreement.

     

    (v) Transferability.
      Rights
      to purchase or receive shares of Common Stock granted under a Restricted Stock
      Award shall be transferable by the Participant only upon such terms and
      conditions as are set forth in the Restricted Stock Award agreement, as the
      Board shall determine in its discretion, and so long as Common Stock awarded
      under the Restricted Stock Award remains subject to the terms of the Restricted
      Stock Award agreement.

     

    (b) Restricted
      Stock Units. Each
      Restricted Stock Unit agreement shall be in such form and shall contain such
      terms and conditions as the Board shall determine. The terms and conditions
      of
      Restricted Stock Unit agreements may change from time to time, and the terms
      and
      conditions of separate Restricted Stock Unit agreements need not be identical;
      provided,
      however, that
      each
      Restricted Stock Unit agreement shall include (through incorporation of the
      provisions hereof by reference in the agreement or otherwise) the substance
      of
      each of the following provisions:

     

    (i) Consideration.
      At the
      time of grant of a Restricted Stock Unit award, the Board will determine the
      consideration, if any, to be paid by the Participant upon delivery of each
      share
      of Common Stock subject to the Restricted Stock Unit award. To the extent
      required by applicable law, the consideration to be paid by the Participant
      for
      each share of Common Stock subject to a Restricted Stock Unit award will not
      be
      less than the par value of a share of Common Stock. Such consideration may
      be
      paid in any form permitted under applicable law.

    
      
        
        

      

      
        12.

        
          

        

      

      
        
        

      

    

     

    (ii) Vesting.
      At
      the
      time of the grant of a Restricted Stock Unit award, the Board may impose such
      restrictions or conditions to the vesting of the shares Restricted Stock Unit
      as
      it deems appropriate.

     

    (iii) Payment.
      A
      Restricted Stock Unit award may be settled by the delivery of shares of Common
      Stock, their cash equivalent, or any combination of the two, as the Board deems
      appropriate.

     

    (iv) Additional
      Restrictions. At
      the
      time of the grant of a Restricted Stock Unit award, the Board, as it deems
      appropriate, may impose such restrictions or conditions that delay the delivery
      of the shares of Common Stock (or their cash equivalent) subject to a Restricted
      Stock Unit award after the vesting of such Stock Award.

     

    (v) Dividend
      Equivalents. Dividend
      equivalents may be credited in respect of Restricted Stock Units, as the Board
      deems appropriate. Such dividend equivalents may be converted into additional
      Restricted Stock Units by dividing (1) the aggregate amount or value of the
      dividends paid with respect to that number of shares of Common Stock equal
      to
      the number of Restricted Stock Units then credited by (2) the Fair Market Value
      per share of Common Stock on the payment date for such dividend. The additional
      Restricted Stock Units credited by reason of such dividend equivalents will
      be
      subject to all the terms and conditions of the underlying Restricted Stock
      Unit
      award to which they relate.

     

    (vi) Termination
      of Participant’s Continuous Service. Except
      as
      otherwise provided in the applicable Stock Award Agreement, Restricted Stock
      Units that have not vested will be forfeited upon the Participant’s termination
      of Continuous Service for any reason.

     

    (c) Stock
      Appreciation Rights. Each
      Stock Appreciation Right agreement shall be in such form and shall contain
      such
      terms and conditions as the Board shall deem appropriate. The terms and
      conditions of Stock Appreciation Right agreements may change from time to time,
      and the terms and conditions of separate Stock Appreciation Rights agreements
      need not be identical, but each Stock Appreciation Right agreement shall include
      (through incorporation of the provisions hereof by reference in the agreement
      or
      otherwise) the substance of each of the following provisions: 

     

    (i) Calculation
      of Appreciation.
      Each
      Stock Appreciation Right will be denominated in share of Common Stock
      equivalents. The appreciation distribution payable on the exercise of a Stock
      Appreciation Right will be not greater than an amount equal to the excess of
      (A)
      the aggregate Fair Market Value (on the date of the exercise of the Stock
      Appreciation Right) of a number of shares of Common Stock equal to the number
      of
      share of Common Stock equivalents in which the Participant is vested under
      such
      Stock Appreciation Right and with respect to which the Participant is exercising
      the Stock Appreciation Right on such date, over (B) an amount that will be
      determined by the Committee at the time of grant of the Stock Appreciation
      Right.

     

    (ii) Vesting.
      At
      the
      time of the grant of a Stock Appreciation Right, the Board may impose such
      restrictions or conditions to the vesting of such Right as it deems
      appropriate.

     

    
      
        
        

      

      
        13.

        
          

        

      

      
        
        

      

    

     

    (iii) Exercise.
      To
      exercise any outstanding Stock Appreciation Right, the Participant must provide
      written notice of exercise to the Company in compliance with the provisions
      of
      the Stock Appreciation Rights agreement evidencing such Right.

     

    (iv) Payment.
      The
      appreciation distribution in respect of a Stock Appreciation Right may be paid
      in Common Stock, in cash, or any combination of the two, as the Board deems
      appropriate.

     

    (v) Termination
      of Continuous Service.
      If a
      Participant’s Continuous Service terminates for any reason, any unvested Stock
      Appreciation Rights shall be forfeited and any vested Stock Appreciation Rights
      shall be automatically redeemed.

     

    (d) Other
      Stock Awards.
      Other
      forms of Stock Awards valued in whole or in part by reference to, or otherwise
      based on, Common Stock may be granted either alone or in addition to Stock
      Awards provided for under Section 6 and the preceding provisions of this Section
      7. Subject to the provisions of the Plan, the Board shall have sole and complete
      authority to determine the persons to whom and the time or times at which such
      Other Stock Awards will be granted, the number of shares of Common Stock (or
      the
      cash equivalent thereof) to be granted pursuant to such Stock Awards and all
      other terms and conditions of such Stock Awards.

     

    
      	8.	
              Covenants
                Of The Company.

            

    

     

    (a) Availability
      of Shares.
      During
      the terms of the Stock Awards, the Company shall keep available at all times
      the
      number of shares of Common Stock required to satisfy such Stock
      Awards.

     

    (b) Securities
      Law Compliance.
      The
      Company shall seek to obtain from each regulatory commission or agency having
      jurisdiction over the Plan such authority as may be required to grant Stock
      Awards and to issue and sell shares of Common Stock upon exercise of the Stock
      Awards; provided,
      however,
      that
      this undertaking shall not require the Company to register under the Securities
      Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant
      to
      any such Stock Award. If, after reasonable efforts, the Company is unable to
      obtain from any such regulatory commission or agency the authority which counsel
      for the Company deems necessary for the lawful issuance and sale of Common
      Stock
      under the Plan, the Company shall be relieved from any liability for failure
      to
      issue and sell Common Stock upon exercise of such Stock Awards unless and until
      such authority is obtained. A Participant shall not be eligible for the grant
      of
      a Stock Award or the subsequent issuance of Common Stock pursuant to the Stock
      Award if such grant or issuance would be in violation of any applicable
      securities law.

     

    (c) No
      Obligation to Notify. The
      Company shall have no duty or obligation to any Participant to advise such
      holder as to the time or manner of exercising such Stock Award. Furthermore,
      the
      Company shall have no duty or obligation to warn or otherwise advise such holder
      of a pending termination or expiration of a Stock Award or a possible period
      in
      which the Stock Award may not be exercised. The Company has no duty or
      obligation to minimize the tax consequences of a Stock Award to the holder
      of
      such Stock Award.

     

    
      
        
        

      

      
        14.

        
          

        

      

      
        
        

      

    

     

    
      	9.	
              Use
                Of Proceeds From Stock.

            

    

     

    Proceeds
      from the sale of Common Stock pursuant to Stock Awards shall constitute general
      funds of the Company.

     

    
      	10.	
              Miscellaneous.

            

    

     

    (a) Acceleration
      of Exercisability and Vesting.
      The
      Board shall have the power to accelerate the time at which a Stock Award may
      first be exercised or the time during which a Stock Award or any part thereof
      will vest in accordance with the Plan, notwithstanding the provisions in the
      Stock Award stating the time at which it may first be exercised or the time
      during which it will vest

     

    (b) Corporate
      Action Constituting Grant of Stock Awards.
      Corporate action constituting a grant by the Company of a Stock Award to any
      Participant shall be deemed completed as of the date of such corporate action,
      unless otherwise determined by the Board, regardless of when the instrument,
      certificate, or letter evidencing the Stock Award is communicated to, or
      actually received or accepted by, the Participant.

     

    (c) Stockholder
      Rights.
      Subject
      to the further limitations of Section 7(b)(iv) hereof, no Participant shall
      be
      deemed to be the holder of, or to have any of the rights of a holder with
      respect to, any shares of Common Stock subject to such Stock Award unless and
      until (i) such Participant has satisfied all requirements for exercise of the
      Stock Award pursuant to its terms, if applicable, and (ii) the issuance of
      the
      Common Stock subject to such Stock Award has been entered into the books and
      records of the Company.

     

    (d) No
      Employment or other Service Rights.
      Nothing
      in the Plan, and Stock Award Agreement or any other instrument executed
      thereunder or in connection with any Stock Award granted pursuant thereto shall
      confer upon any Participant any right to continue to serve the Company or an
      Affiliate in the capacity in effect at the time the Stock Award was granted
      or
      shall affect the right of the Company or an Affiliate to terminate (i) the
      employment of an Employee with or without notice and with or without cause,
      (ii)
      the service of a Consultant pursuant to the terms of such Consultant’s agreement
      with the Company or an Affiliate or (iii) the service of a Director pursuant
      to
      the Bylaws of the Company or an Affiliate, and any applicable provisions of
      the
      corporate law of the state in which the Company or the Affiliate is
      incorporated, as the case may be.

     

    (e) Investment
      Assurances.
      The
      Company may require a Participant, as a condition of exercising or acquiring
      Common Stock under any Stock Award, (i) to give written assurances satisfactory
      to the Company as to the Participant’s knowledge and experience in financial and
      business matters and/or to employ a purchaser representative reasonably
      satisfactory to the Company who is knowledgeable and experienced in financial
      and business matters and that he or she is capable of evaluating, alone or
      together with the purchaser representative, the merits and risks of exercising
      the Stock Award; and (ii) to give written assurances satisfactory to the Company
      stating that the Participant is acquiring Common Stock subject to the Stock
      Award for the Participant’s own account and not with any present intention of
      selling or otherwise distributing the Common Stock. The foregoing requirements,
      and any assurances given pursuant to such requirements, shall be inoperative
      if
      (1) the issuance of the shares of Common Stock upon the exercise or acquisition
      of Common Stock under the Stock Award has been registered under a then currently
      effective registration statement under the Securities Act, or (2) as to any
      particular requirement, a determination is made by counsel for the Company
      that
      such requirement need not be met in the circumstances under the then applicable
      securities laws. The Company may, upon advice of counsel to the Company, place
      legends on stock certificates issued under the Plan as such counsel deems
      necessary or appropriate in order to comply with applicable securities laws,
      including, but not limited to, legends restricting the transfer of the Common
      Stock.

     

    
      
        
        

      

      
        15.

        
          

        

      

      
        
        

      

    

     

    (f) Withholding
      Obligations.
      Unless
      prohibited by the terms of a Stock Award Agreement, the Company may, in its
      sole
      discretion, satisfy any country, federal, state, provincial or local tax
      withholding obligation relating to any Stock Award by any of the following
      means
      (in addition to the Company’s right to withhold from any compensation paid to
      the Participant by the Company) or by a combination of such means: (i) causing
      the Participant to tender a cash payment; (ii) withholding shares of Common
      Stock from the shares of Common Stock issued or otherwise issuable to the
      Participant in connection with the Stock Award; provided, however, that no
      shares of Common Stock are withheld with a value exceeding the minimum amount
      of
      tax required to be withheld by law (or such lower amount as may be necessary
      to
      avoid classification of the Stock Award as a liability for financial accounting
      purposes); (iii) withholding payment from any amounts otherwise payable to
      the
      Participant; (iv) withholding cash from a Stock Award settled in cash; or (v)
      by
      such other method as may be set forth in the Stock Award Agreement.

     

    (g) Electronic
      Delivery.
      Any
      reference herein to a “written” agreement or document shall include any
      agreement or document delivered electronically or posted on the Company’s
      intranet.

     

    (h) Compliance
      with Section 409A. To
      the
      extent that the Board determines that any Stock Award granted hereunder is
      subject to Section 409A of the Code, the Stock Award Agreement evidencing such
      Stock Award shall incorporate the terms and conditions necessary to avoid the
      consequences specified in Section 409A(a)(1) of the Code. To the extent
      applicable, the Plan and Stock Award Agreements shall be interpreted in
      accordance with Section 409A of the Code, including without limitation any
      applicable guidance that may be issued or amended after the Effective Date.
      

     

    
      	11.	
              Adjustments
                Upon Changes In Stock.

            

    

     

    (a) Capitalization
      Adjustments.
      If any
      change is made in, or other event occurs with respect to, the Common Stock
      subject to the Plan or subject to any Stock Award without the receipt of
      consideration by the Company (through merger, consolidation, reorganization,
      recapitalization, reincorporation, stock dividend, dividend in property other
      than cash, stock split, liquidating dividend, combination of shares, exchange
      of
      shares, change in corporate structure or similar transaction (each a
“Capitalization
      Adjustment”),
      the
      Board shall appropriately and proportionately adjust: (i) the class(es) and
      maximum number of securities subject to the Plan pursuant to Section 4(a),
      (ii) the class(es) and maximum number of securities that may be awarded to
      any person pursuant to Section 5(b), and (iii) the class(es) and number of
      securities and price per share of stock subject to outstanding Stock Awards.
      The
      Board shall make such adjustments, and its determination shall be final, binding
      and conclusive. The conversion of any convertible securities of the Company
      shall not be treated as a Capitalization Adjustment. 

     

    
      
        
        

      

      
        16.

        
          

        

      

      
        
        

      

    

     

    (b) Dissolution
      or Liquidation.
      In the
      event of a dissolution or liquidation of the Company, then all outstanding
      Options shall terminate immediately prior to the completion of such dissolution
      or liquidation, and shares of Common Stock subject to the Company’s repurchase
      option may be repurchased by the Company notwithstanding the fact that the
      holder of such stock is still in Continuous Service.

     

    (c) Corporate
      Transaction.
      In the
      event of a Corporate Transaction, any surviving corporation or acquiring
      corporation may assume or continue any or all Stock Awards outstanding under
      the
      Plan or may substitute similar stock awards for Stock Awards outstanding under
      the Plan (it being understood that similar stock awards include, but are not
      limited to, awards to acquire the same consideration paid to the stockholders
      or
      the Company, as the case may be, pursuant to the Corporate Transaction), and
      any
      reacquisition or repurchase rights held by the Company in respect of Common
      Stock issued pursuant to Stock Awards may be assigned by the Company to the
      successor of the Company (or the successor’s parent company), if any, in
      connection with such Corporate Transaction. In the event that any surviving
      corporation or acquiring corporation does not assume or continue any or all
      such
      outstanding Stock Awards or substitute similar stock awards for such outstanding
      Stock Awards, then with respect to Stock Awards that have been not assumed,
      continued or substituted and that are held by Participants whose Continuous
      Service has not terminated prior to the effective time of the Corporate
      Transaction, the vesting of such Stock Awards (and, if applicable, the time
      at
      which such Stock Awards may be exercised) shall (contingent upon the
      effectiveness of the Corporate Transaction) be accelerated in full to a date
      prior to the effective time of such Corporate Transaction as the Board shall
      determine (or, if the Board shall not determine such a date, to the date that
      is
      five (5) days prior to the effective time of the Corporate Transaction), the
      Stock Awards shall terminate if not exercised (if applicable) at or prior to
      such effective time, and any reacquisition or repurchase rights held by the
      Company with respect to such Stock Awards held by Participants whose Continuous
      Service has not terminated shall (contingent upon the effectiveness of the
      Corporate Transaction) lapse. With respect to any other Stock Awards outstanding
      under the Plan that have not been assumed, continued or substituted, the vesting
      of such Stock Awards (and, if applicable, the time at which such Stock Award
      may
      be exercised) shall not be accelerated, unless otherwise provided in a written
      agreement between the Company or any Affiliate and the holder of such Stock
      Award, and such Stock Awards shall terminate if not exercised (if applicable)
      prior to the effective time of the Corporate Transaction.

     

    (d) Change
      in Control.
      A Stock
      Award held by any Participant whose Continuous Service has not terminated prior
      to the effective time of a Change in Control may be subject to additional
      acceleration of vesting and exercisability upon or after such event as may
      be
      provided in the Stock Award Agreement for such Stock Award or as may be provided
      in any other written agreement between the Company or any Affiliate and the
      Participant, but in the absence of such provision, no such acceleration shall
      occur.

     

    
      
        
        

      

      
        17.

        
          

        

      

      
        
        

      

    

     

    
      	12.	
              Amendment
                Of The Plan And Stock
                Awards.

            

    

     

    (a) Amendment
      of Plan.
      The
      Board at any time, and from time to time, may amend the Plan. However, except
      as
      provided in Section 11(a) relating to Capitalization Adjustments and Section
      12(f) relating to amendments without Stockholder Approval, no amendment shall
      be
      effective unless approved by the stockholders of the Company.

     

    (b) Stockholder
      Approval.
      The
      Board, in its sole discretion, may submit any other amendment to the Plan for
      stockholder approval, including, but not limited to, amendments to the Plan
      intended to satisfy the requirements of Section 162(m) of the Code and the
      regulations thereunder regarding the exclusion of performance-based compensation
      from the limit on corporate deductibility of compensation paid to Covered
      Employees.

     

    (c) No
      Impairment of Rights.
      Rights
      under any Stock Award granted before amendment of the Plan shall not be impaired
      by any amendment of the Plan unless (i) the Company requests the consent of
      the
      Participant and (ii) the Participant consents in writing.

     

    (d) Amendment
      of Stock Awards.
      The
      Board at any time, and from time to time, may amend the terms of any one or
      more
      Stock Awards; provided,
      however,
      that (i)
      if the Common Stock is listed on the Toronto Stock Exchange any amendment is
      approved by the stockholders to the extent necessary to satisfy the rules of
      the
      Toronto Stock Exchange, and (ii) that the rights under any Stock Award shall
      not
      be impaired by any such amendment unless (A) the Company requests the consent
      of
      the Participant and (B) the Participant consents in writing.

     

    (e) Insiders.
      If
      an
      amendment reducing the Option exercise price or extending the term of the Option
      is made to an Option held by an Insider, the amendment shall only be made
      effective after the approval is received of Disinterested Stockholders at a
      meeting of the stockholders of the Company.

     

    (f) Amendments
      without Stockholder Approval. Without
      limiting the generality of the foregoing, or the other provisions hereof, the
      Board shall have the authority: (a) to make amendments to the Plan or a Stock
      Award of a housekeeping or administrative nature; (b) if the Common Stock is
      listed on the Toronto Stock Exchange subject to any required approval of the
      Toronto Stock Exchange, to change the vesting or termination provisions of
      a
      Stock Award or the Plan; (c) any amendment to reduce the option exercise
      price of an Option held by a non-insider; (d) amendments necessary to
      comply with provisions of applicable law or stock exchange requirements or
      for
      grants to qualify for favourable treatment under applicable laws; (e) the
      addition of any form of financial assistance by the Company for the acquisition
      by all or certain categories of Participants of Common Stock under the Plan,
      and
      the subsequent amendment of any such provisions; and (f) any other
      amendment, fundamental or otherwise, not requiring stockholder approval under
      the Code; provided,
      however,
      that no
      amendment shall be made without stockholder approval to the extent stockholder
      approval is necessary to satisfy the requirements of Section 422 of the
      Code

     

    
      	13.	
              Termination
                Or Suspension Of The Plan.

            

    

     

    (a) Plan
      Term.
      The
      Board may suspend or terminate the Plan at any time. No Stock Awards may be
      granted under the Plan while the Plan is suspended or after it is terminated.
      

     

    
      
        
        

      

      
        18.

        
          

        

      

      
        
        

      

    

     

    (b) No
      Impairment of Rights.
      Suspension or termination of the Plan shall not impair rights and obligations
      under any Stock Award granted while the Plan is in effect except with the
      written consent of the Participant.

     

    
      	14.	
              Effective
                Date Of Plan.

            

    

     

    The
      Plan
      shall become effective as determined by the Board, but no Stock Award shall
      be
      exercised (or, in the case of a stock bonus, shall be granted) unless and until
      the Plan has been approved by the stockholders of the Company, which approval
      shall be within twelve (12) months before or after the date the Plan is adopted
      by the Board.

     

    
      	15.	
              Choice
                Of Law.

            

    

     

    (a)  The
      law
      of the State of Nevada shall govern all questions concerning the construction,
      validity and interpretation of this Plan, without regard to such state’s
      conflict of laws rules.

     

    
      	16.	
              Limits
                With Respect To Insiders.

            

    

     

    (a) The
      maximum number of shares of Common Stock which may be reserved for issuance
      to
      Insiders,
      at any
      time,
      under
      the Plan and any other share compensation arrangement of the Company shall
      be
      10% of the Common Stock issued and outstanding.

     

    (b) The
      maximum number of shares of Common Stock which may be issued to Insiders under
      the Plan, at any time, and any other share compensation arrangement within
      any
      12-month period shall be 10% of the Common Stock outstanding. 

     

    (c) The
      maximum number of shares of Common Stock which may be issued to any one Insider
      and such Insider’s associates under the Plan, at any time, within a 12-month
      period shall be 5% of the Common Stock outstanding.

     

    
      	17.	
              Limits
                With Respect To
                Consultants.

            

    

     

    (a) The
      number
      of Options granted to any one Consultant in any 12-month period under the Plan
      shall not exceed 2% of the issued and outstanding shares of Common Stock at
      the
      time of grant.

     

    
      
        
        

      

      
        19.AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET

1. Basic Provisions ("Basic Provisions")

1.1Parties:  This Lease ("Lease"), dated for reference purposes only November 1, 2008, is made by and between Cartwright, LLC, a California limited liability company dba Cartwright Real Estate Holdings, LLC and Klein Investments Family Limited Partnership, a California limited partnership as Co-owners ("Lessor") and Quantum Fuel Systems Technologies Worldwide, Inc., a Delaware corporation ("Lessee"), collectively the "Parties," or individually a "Party").

1.2Premises:  That certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, and commonly known as 17872 Cartwright Road, Irvine, located in the County of Orange, State of California, and generally described as an approximate 88,159 square foot industrial building on approximately 5.1 acres of land ("Premises").  The Premises shall also include the land and improvements on which the test and validation bunkers used by Lessee are situated.

1.3 Term:  7 years and 0 months ("Term") commencing on November 1, 2008 ("Commencement Date") and ending October 31, 2015 ("Expiration Date"). (See also Paragraph 3).

1.4 Early Possession:  N/A

1.5Base Rent: $81,104 per month ("Base Rent"), payable on the 1st day of each  month commencing November 1, 2008.  (See also Paragraph 4)

1.6 Base Rent and Other Monies Paid Upon Execution:

(a)Base Rent: $81,104 for the period November 1, 2008 through November 30, 2008.  Lessor acknowledges that it has previously received the sum of $55,149.93 from Lessee resulting in a net Base Rent amount to be paid upon execution of this Lease of $25,954.07.  The Base Rent shall be adjusted and abated as provided in Paragraph 4.

(b)Security Deposit: $81,104.  Lessor acknowledges that it has previously received the sum of $34,826 from Lessee resulting in a net amount to be paid upon execution of this Lease of $46,278.  (See also Paragraph 5)

(c) Association Fees:  N/A

(d)Other:  N/A

(e)Total Due Upon Execution of this Lease: $72,232.07

1.7Agreed Use:  MANUFACTURING, DISTRIBUTION, RESEARCH AND DEVELOPMENT (INCLUDING USE OF "BUNKERS") AND OFFICE ADMINISTRATION.  (See also Paragraph 6.)

1.8 Insuring Party:  Lessor is the "Insuring Party" unless otherwise stated herein. (See also Paragraph 8.)

1.9Real Estate Brokers: (See also Paragraph 15.) 

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

Lessor is not represented by a broker.

Cresa Partners, LLC represents Lessee exclusively ("Lessee's Broker").

1.10 Guarantor:  N/A. 

1.11 Attachments:  N/A

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 payment based thereon is not subject to revision whether or not the actual size is more or less.

2.2  Condition.   

(a)Lessor and Lessee acknowledge and agree that Lessee has been occupying the Premises prior to the Commencement Date pursuant to a Lease Agreement dated March 5, 2004 ("Prior Lease").  As a material inducement to Lessor to enter into this Lease, Lessee hereby acknowledges and agrees that Lessee is continuing to lease the Premises in an "AS IS" condition and to perform certain maintenance and repair items to the extent required to be performed by Lessee under the Lease.  

(b)As a material inducement to Lessee's entering into of this Lease, Lessor agrees that Lessee's restoration obligations with respect to Utility Installations, Trade Fixtures and Alterations made by Lessee prior to or during the term of the Prior Lease have been waived by Lessor and that Lessee's restoration obligations during and upon expiration of this Lease shall be as set forth in Paragraph 7.4 of this Lease. 

2.3  Compliance.  Lessor warrants that to the best of its knowledge the improvements on the Premises comply with the building codes, applicable laws, covenants or restrictions of record, regulations and ordinances ("Applicable Requirements") that were in effect at the time that each improvement, or portion thereof, was constructed.  Said warranty does not apply to the use to which Lessee has or will put the Premises or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee.  Lessee is responsible for determining whether or not the zoning is appropriate for Lessee's intended use, and acknowledges that past uses of the Premises may no longer be allowed.  If the Premises do not comply with said warranty, Lessor shall, except as otherwise provided, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify the same at Lessor's expense.  If Lessee does not give Lessor written notice of a non-compliance with this warranty within six (6) months following the Commencement Date, correction of that non-compliance shall be the obligation of Lessee at Lessee's sole cost and expense.  If the Applicable Requirements are hereafter changed (as opposed to being in existence at the Commencement Date, which is addressed in Paragraph 6.2(e) below), so as to require during the term of this Lease the construction of an addition to or an alteration of the Building, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Building ("Capital Expenditure"), Lessor and Lessee shall allocate the cost of such work as follows:

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

(b)If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor shall pay for such Capital Expenditures and Lessee shall only be obligated to pay, each month during the remainder of the Term of this Lease, on the date that the Base Rent is due, an amount equal to the product of multiplying the cost of such Capital Expenditure by a fraction, the numerator of which is one, and the denominator of which is the number of months of the useful life of such Capital Expenditure as such useful life is specified pursuant to federal income tax regulations or guidelines for depreciation thereof (including interest on the unamortized balance as is then commercially reasonable in the judgment of Lessor's accountants).  Lessee shall pay interest on the balance but may prepay its obligations at any time.  If such Capital Expenditure is required during the last 2 years of this Lease or if Lessor reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessor's termination notice that Lessee will pay for such Capital Expenditure.  If Lessor does not elect to terminate, and fails to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with interest, from Rent until Lessor's share of such costs has been fully paid. If Lessee is unable to finance Lessor's share, or if the balance of the Rent due and payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon thirty (30) days written notice to Lessor. 

 (c) In the event that any improvements (including seismic upgrades) are required to the Premises as a result of building code changes or other governmental mandate, to the extent that such improvements are required as a result of Lessee's use of or operations in the Premises, Lessee shall pay all costs (without any cap on its obligations) associated therewith.  Otherwise, Lessor shall pay all costs associated therewith, not to exceed the sum of One Hundred Fifty Thousand ($150,000) Dollars, over the Term (as may be extended) on the following terms and conditions:

(i)To the extent that the cost of such improvement(s) is greater than $150,000 but less than or equal to $250,000 (which $100,000 range shall be referred to hereafter in this Section as the "Apportionment Range"), the incremental cost of the improvement(s) within the Apportionment Range shall be split between Lessor and Lessee on a prorata basis based upon a ratio, the numerator of which shall be the remaining term of the Lease, and the denominator of which shall be the useful life of the improvement or improvements in question (which useful life will be separately determined for each improvement).  Lessee shall pay only its prorata share derived from such formula (which in no event shall exceed $100,000). 

(ii)To the extent that the cost of such improvements exceeds $250,000 during the Term of the Lease, Lessor shall have the right to terminate the Lease, however, Lessee may defeat such termination right of Lessor by paying the full cost of such improvements that exceeds $250,000 within a reasonable time, not to exceed thirty (30) days after such sums become due. 

(d)Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to non-voluntary, unexpected, and new Applicable Requirements.  If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed changed in use, changed in intensity of use, or modification to the Premises made by Lessee related to the operation of its business then, and in that event, Lessee shall be fully responsible for the cost thereof, and Lessee shall not have any right to terminate the Lease.

2.4 Acknowledgements.   Lessee acknowledges that: (a) it has been advised by Lessor and/or Brokers to satisfy itself with respect to the condition of the Premises (including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements), and 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 any Broker has 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: (a) Broker has made no representations, promises or warranties concerning Lessee's ability to honor the Lease or suitability to occupy the Premises, and (b) 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 Commencement Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work. 

3. Term.

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

3.2Early 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 Real Property Taxes and insurance premiums and to maintain the Premises) shall, however, be in effect during such period. Any such early possession shall not affect the Expiration Date.

3.3Delay 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 as agreed, Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease. Lessee shall not, however, be obligated to pay Rent or perform its other obligations until it receives possession of the Premises. If possession is not delivered within sixty (60) days after the Commencement Date, Lessee may, at its option, by notice in writing within ten (10) days after the end of such sixty (60) day period, cancel this Lease, in which event the Parties shall be discharged from all obligations thereunder. If such written notice is not received by Lessor within said ten (10) day period, Lessee's right to cancel shall terminate. Except as otherwise provided, if possession is not tendered to Lessee by the Start Date and Lessee does not terminate this Lease, as aforesaid, any period of rent abatement that Lessee would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possession of the Premises is not delivered within four (4) months after the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor and Lessee, in writing.

4. Rent.

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

4.2 Payment.  Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except as specifically permitted in this Lease), on or before the day on which it is due.  In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not constitute a waiver and Lessee shall be obligated to pay the amount set forth in this Lease.  Rent for any period during the term hereof which is for less than one full calendar month shall be prorated based upon the actual number of days of said month.  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 other than bank error, 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 attorneys' fee, second to accrued interest, third to Base Rent and fourth to any remaining amount to any other outstanding charges or costs.

4.3Adjustments and Abatements.  

(a)The Base Rent, as defined in Paragraph 1.5 of the Lease, shall be increased annually commencing on the first anniversary date of the Commencement Date and on each anniversary date thereafter (each, an "Adjustment Date") to an amount equal to 103% of the Base Rent payable by Lessee immediately prior to each applicable Adjustment Date.  

(b)The Base Rent shall be fully abated for the 13th and 25th months of Term provided that Lessee is not in Breach (as defined in Section 13.1 of the Lease)  of this Lease at the time of such abatement.

4.4Tenant Improvement Allowance.  Lessee shall be responsible for the cost of improvements to the Premises required by Lessee's proposed use of the Premises ("Lessee's Work").  Lessor has agreed to provide Lessee with a tenant improvement allowance of Two Hundred Fifty Thousand Dollars ($250,000) to help cover the cost of such Lessee's Work (the "Allowance").  As used herein, the term "allowed costs" shall mean all out-of-pocket costs incurred by Lessee with respect to the performance of Lessee's Work, but excluding Lessee's trade fixtures, furniture and other personal property and all costs and expenses paid to affiliates of Lessee to the extent the same are in excess of fees and costs which would have been payable in an arm's length transaction.  Lessor shall be entitled to all tax benefits in connection with the allowed costs covered by the Allowance.  Lessee shall from time to time submit to Lessor an application for payment which shall be accompanied by an invoice from Lessee's contractor as to the amount of allowed costs for Lessee's Work.  Lessor shall pay such invoice directly or reimburse Lessee within fifteen (15) days of receipt of the application for payment.  Costs for Lessee's Work which are greater than the Allowance shall be paid for by Lessee within fifteen (15) days after submittal to Lessee.     

5. Security Deposit.  Lessee shall deposit with Lessor upon execution hereof the net Security Deposit stated in Paragraph 1.6(b) 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 said Security Deposit, Lessee shall within ten (10) days after written request therefor deposit moneys with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease.  Should the Agreed Use be amended to accommodate a material change in the business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to increase the Security Deposit to the extent necessary, in Lessor's reasonable judgment, to account for any increased wear and tear that the Premises may suffer as a result thereof.  If a change in control of Lessee occurs during this Lease and following such change the financial condition of Lessee is, in Lessor's reasonable judgment, significantly reduced, Lessee shall deposit such additional moneys 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 thirty (30) days after the expiration or termination of this Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and otherwise within seven (7) 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 moneys to be paid under this Lease.

6. Use of Premises.  

6.1Agreed Use of Premises.  Lessee shall use and occupy the Premises only for the Agreed Use set forth in Paragraph 1.7, or any other legal use which is reasonably comparable thereto, and for no other purpose, without the prior written consent of Lessor.  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 owners and/or occupants of, or causes damage to neighboring properties.  Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvements on the Premises or the mechanical or electrical systems therein, and/or is not significantly more burdensome to the Premises.  If Lessor elects to withhold consent, Lessor shall within seven (7) business days after such request give written notification of same, which notice shall include an explanation of Lessor's objections to the change in use.  Lessor expressly acknowledges and agrees that Lessee shall be permitted to continue to use the test and validation  bunkers included within the definition of  Premises.

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 bases for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory.  Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions thereof.  Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements. "Reportable Use" shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring properties.  Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use so long as such use is in compliance with all Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor.  In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurance as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or 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 for or on behalf of Lessee.

(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 for or on behalf of Lessee, (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties not caused or contributed to by Lessee).  Lessee's obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.  No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement.

(e) Lessor Indemnification.  Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including cost of remediation, which existed as a result of Hazardous Substances which existed on the Premises prior to the Prior Lease or which are caused by the negligence or willful misconduct of Lessor, its agents or employees.  Lessor's obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.

(f) Investigations and Remediations.  Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to the commencement date of the Prior Lease, 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 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 twelve (12) times the then monthly Base Rent or $1,000,000, whichever is greater, give written notice to Lessee, within thirty (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 sixty (60) days following the date of such notice.  In the event Lessor elects to give a termination notice, Lessee may, within ten (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 twelve (12) times the then monthly Base Rent or $1,000,000, whichever is greater.  Lessee shall provide Lessor with said funds of satisfactory assurance thereof within thirty (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 the this Lease, Lessee shall, at Lessee's sole expense, fully, diligently and in a timely manner, materially comply with all Applicable Requirements, the reasonable requirements of any applicable fire insurance underwriter or rating bureau, and the reasonable 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 Commencement Date.  Lessee shall, within ten (10) days after receipt of Lessor's written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements.  Likewise, Lessee shall immediately give written notice to Lessor of: (i) any water damage to the Premises, and any suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (ii) any unusual mustiness or other odors that might indicate the presence of mold in the Premises.

6.4 Inspection; Compliance.  Lessor and Lessor's "Lender" (as defined in Paragraph 30 below) and consultants shall have the right to enter into the Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease.  The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance or contamination is found to exist or be imminent, or the inspection is requested or ordered by a governmental authority.  In such case, Lessee shall upon request reimburse Lessor for the cost of such inspections, so long as such inspection is reasonably related to the violation or contamination.  In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within ten (10) days of the receipt of a written request therefore.

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

7.1 Lessee's Obligations.

(a)  In General.  Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2 (Lessor's Obligations), 7.4 (Ownership; Removal; Surrender; and Restoration), 9 (Damage or Distraction), and 14 (Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises, Utility Installations, and Alterations in good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment or facilities, such as plumbing, heating, ventilating, air-conditioning, electrical, lighting facilities, boilers, presser vessels, fire protection system, fixtures, walls (interior and exterior), foundations, ceilings, roofs, floors, windows, doors, plate glass, skylights, landscaping, driveways, parking lots, fences, retaining walls, signs, sidewalks and parkways located in, on, or adjacent to the Premises.  Lessee, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices, specifically including the procurement and maintenance of the service contracts required by Paragraph 7.1(b) below.  Lessee's obligations shall include replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair, ordinary wear and tear excepted.  Lessee shall, during the term of this Lease, keep the exterior appearance of the building in a first-class condition consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including, when necessary, the exterior repainting of the building.

(b) Service Contracts.  Lessee shall, at Lessee's sole expense, procure and maintain contracts, with copies to Lessor upon request, in customary form and substance for, and with contractors specializing and experienced the maintenance of the following equipment and improvements, if any, if and when installed on the Premises ("Basic Elements"): (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire extinguishing system, including fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof covering and drains, and (vi) clarifiers.

(c) Failure to Perform.  If Lessee fails to perform Lessee's obligations under this Paragraph 7.1, Lessor may enter upon the Premises after 10 days prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee's behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly pay to Lessor a sum equal to 115% of the cost thereof.

(d)Replacement.  Subject to Lessee's indemnification of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of liability resulting from Lessee's failure to exercise and perform good maintenance practices, if the Basic Elements described in Paragraph 7.1(b) cannot be repaired other than at a cost which is in excess of 50% of the cost of replacing such Basic Elements, then such Basic Elements shall be replaced by Lessor, and the cost thereof shall be prorated between the Parties and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease, on the date of which Base Rent is due, an amount equal to the product of multiplying the cost of such replacement by a fraction, the numerator of which is one, and the denominator of which is the number of months of the useful life of such replacement as such useful life is specified pursuant to federal income tax regulations or guidelines for depreciation thereof (including interest on the unamortized balance as is then commercially reasonable in the judgment of Lessor's accountants), with Lessee reserving the right to prepay its obligation at any time.

7.2Lessor's Obligations.  Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 7.1(c) (Replacement of Basic Elements), 7.4 (Ownership; Removal; Surrender; and Restoration), 9 (Damage or Destruction), and 14 (Condemnation), it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all which obligations are intended to be that of the Lessee.  It is the intention of the Parties that the terms of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises, and they expressly waive the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease.

7.3 Utility Installations; Trade Fixtures; Alterations.

(a) Definitions; Consent Required.  The term "Utility Installations" refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises.  The term "Trade Fixtures" shall mean Lessee's machinery and equipment that can be removed without doing material damage to the Premises.  The term "Alterations" shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion. "Lessee Owned Alterations and/or Utility Installations" are defined as Alterations and/or Utility Installations made by Lessee that are not 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 Alterations and Utility Installations to the interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof or any existing walls, will not affect the electrical, plumbing, HVAC and/or life safety systems, and the cumulative cost thereof during this Lease as extended does not exceed $750,000 in the aggregate or $350,000 in any one year.  Notwithstanding the foregoing, Lessee shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Lessor.  Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen 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 unless this requirement is waived by Lessor.  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 as-built plans and specifications.  For work which cost an amount equal to the greater of one month's Base Rent, or $80,000,  Lessor may condition its consent upon Lessee providing a lien and completion bond in an amount equal to one and one-half times the estimated cost of such Alterations or Utility Installation and/or upon Lessee's posting an additional Security Deposit with Lessor.  

(c) Indemnification.  Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or may be secured by any mechanic's or materialmen's lien against the Premises or any interest therein.  Lessee shall give Lessor not less than ten (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 one and one-half times 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 cost.

(d)Acknowledgment by Lessor.  Lessor hereby acknowledges and agrees that as long as any executive officer of Lessee is also an owner of Lessor, then Lessor shall be deemed to have automatically consented to any Alterations or Utility Installations made by Lessee to the Premises and the consent (including conditions to consent) and notification requirements set forth in Paragraph 7.3(b) are waived.  Provided, however, that Paragraph 7.3(c) is still applicable.

7.4 Ownership; Removal; Surrender; and Restoration. 

(a) Ownership.  All Alterations and Utility Installations shall be the property of Lessee, but considered a part of the Premises.  Unless Lessee elects to remove any of the Alterations and/or Utility Installations in accordance with 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.  Lessee shall have the right, but not the obligation, to remove any or all Lessee Owned Alterations or Utility Installations upon expiration or termination of this Lease.  If Lessee does not elect to remove any of the Lessee Owned Alterations or Utility Installations, then Lessee shall have no obligation to do so and such Alterations and Utility Installations shall automatically become the property of Lessor in its "AS IS" condition.

(c) Surrender/Restoration.  Lessee shall surrender the Premises upon expiration of the Term, with all of the improvements, parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted.  "Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by good maintenance practice.  Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee Owned Alterations and/or Utility Installations, furnishing, and equipment as well as the removal of any storage tank installed by or for Lessee, and the removal, replacement, or remediation of any soil, material or groundwater contaminated by Lessee.  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.  Lessee shall have the right, but not the obligation, to remove any Utility Installations and Alterations made by Tenant prior to or during the Term of this Lease.

8. Insurance; Indemnity.

8.1 Payment for Insurance.  Lessee shall pay for all insurance required under Paragraph 8 except to the extent of the cost attributable to liability insurance carried by Lessor under Paragraph 8.2 (b) in excess of $2,000,000 per occurrence.  Premiums for policy periods commencing prior to or extending beyond the Lease term shall be prorated to correspond to the Lease term.  Payment shall be made by Lessee to Lessor within ten (10) days following receipt of an invoice.

8.2 Liability Insurance.

(a) Carried by Lessee.  Lessee shall obtain and keep in force a Commercial General Liability Policy of insurance protecting Lessee and Lessor against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto.  Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000.  Lessee shall add Lessor as an additional insured by means of an endorsement at least as broad as the Insurance Service Organization's "Additional insured-Managers or Lessors of Premises Endorsement."  The Policy shall not contain any inter-insured exclusions as between insured parsons or organizations, but shall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Lessee's of any obligation hereunder.  The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder.  Lessee shall provide an endorsement on its liability policy(ies) which provides that its insurance shall be primary to and not contributory with any similar insurance carried by lessor, whose insurance shall be considered excess insurance only.

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

8.3 Property Insurance - Building Improvements and Rental Value.

(a) Building and improvements.  The insuring Party shall obtain and keep in force a policy or policies in the name of Lessor, with loss payable to Lessor, any ground lessor, and to any Lender(s) insuring loss or damage to the Premises.  The amount of such insurance shall be equal to the full insurable replacement cost of the Premises, as the same shall exist from time to time, or the amount required by any Lenders, but in no event more than the commercially reasonable and available insurable value thereof.  If Lessor is the insuring Party, however, Lessee Owned Alterations and Utility and Utility Installations, Trade Fixtures, and Lessee's personal property shall, during the Term, be insured by Lessee under Paragraph 8.4 rather than by Lessor.  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, earthquake and/or terrorism unless required by 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 and the perils of terrorism or acts or terrorism as required by Lender.  Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogration, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted US Department of Labor Consumer Price index for all Urban Consumers Price Index for all Urban Consumers for the city nearest to where the Premises are located.  If such insurance coverage has a deductible clause, the deductible amount shall not exceed $1,000 per occurrence, and Lessee shall be liable for such deductible amount in the event of an insured loss.

(b) Rental Value.  The Lessor shall obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and any Lender, insuring the loss of the full Rent for one (1) year.  Said insurance shall provide that in the event the Lease is terminated by reason of an insured loss, the period of indemnity of such coverage shall be extended beyond the date of the completion of repairs or replacement of the Premises, to provide for one full year's loss of Rent from the date of any such loss.  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 twelve (12) month period.  Lessee shall be liable for any deductible amount in the event of such loss. 

(c) Adjacent Premises.  If the Premises are part of a larger building, or of a group of a group buildings owned by Lessor, which are adjacent to the Premises, the Lessee shall pay for any increase in the premiums for the property insurance of such building or buildings if said increase is caused by Lessee's acts, omissions, use or occupancy of the Premises.

8.4 Lessee's Property/Business interruption insurance.

(a) Property Damage.  Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations.  Such insurance shall be full replacement cost coverage with a deductible not to exceed $10,000 per occurrence.  The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures, Lessee Owned Alterations and Utility Installations.  Upon request, 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 A-, VI as set forth in 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 polices.  Lessee shall, prior to the Commencement Date and upon written request, 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 thirty (30) days prior written notice to Lessor.  Lessee shall, at least ten (10) days prior to the expiration of such policies, furnish Lessor with evidence of renewals or "insurance binders" evidencing renewal thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand.  Such policies shall be for a term of at least one year, or the length of the remaining term of the 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 a incident to the perils required to be insured against herein.  The effect of such releases and waivers is not limited by amount of insurance carried or required, or by any deductibles applicable herein.  The Parties agree to have their respective property damage insurance carriers waive any right to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated thereby.

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

8.8 Exemption of Lessor from Liability.  Except for Lessor's negligence or willful misconduct, neither Lessor nor its agents shall be liable under any circumstances for (i) injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wire, 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 Building of which the Premises are a part, or from other sources of places, (ii) any damages arising from any act or neglect of any other tenant of Lessor, or (iii) injury to Lessee's business or for any loss of income or profit therefrom.  Instead, it is intended that Lessee's sole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessor is required to maintain pursuant to the provisions of Paragraph 8.  Additionally, under no circumstances shall the Lessor be liable for injury to the Lessee's business or for loss of income or profit therefrom.

8.9Earthquake Insurance.  In the event that any lender of Lessor shall require earthquake insurance with respect to all or part of the Premises, the cost of such earthquake insurance shall be split equally between the parties.  Otherwise, Lessee shall not be responsible for the cost of any earthquake insurance that Lessor may elect to maintain.

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 six (6) months or less from the date of the damage or destruction.  Lessor shall notify Lessee in writing within thirty (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 Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in six (6) months or less from the date of the damage of destruction.  Lessor shall notify Lessee in writing within thirty (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 the Improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a) irrespective of any deductible amounts or coverage limits involved.

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

(e)  "Hazardous Substance Condition" shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the Premises which requires repair, remediation or restoration.

9.2 Partial Damage - Insured Loss.  If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall at Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this lease shall continue in full force and effect; provided, however, that Lessee shall at Lessor's election, make the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose.  Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the insuring party shall promptly contribute the shortage in proceeds (except as to the deductible which is Lessee's responsibility) as and when required to complete said repairs.  In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance proceeds to fully restore the unique aspect of the Premises unless Lessee provides Lessor with funds to cover same, or adequate assurance thereof within said ten (10) days following receipt of written notice of such shortage and request therefore.  If Lessor receives said funds or timely adequate assurance, 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 ten (10) days thereafter to (i) make such restoration and repair as it 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 thirty (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 make available for 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 thirty (30) days after receipt by Lessor of knowledge of the occurrence of such damage.  Such termination shall be effective sixty (60) days following the date of such notice.  In the event Lessor elects to terminate this Lease, Lessee shall have the right within the ten (10) day period 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 thirty (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 sixty (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 six (6) months of this Lease there is damage for which the cost to repair exceeds one (1) month Base Rent, whether or not an insured loss, either party may terminate this lease effective sixty (60) days following the date of occurrence of such damage by giving a written termination notice to the other within thirty (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) if the damage is not an Insured Loss needed to make the repairs on or before the earlier of (i) the date which is ten 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 if the damage is not an Insured loss, 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 if the damage is not an Insured Loss 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; 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 (of which would have been received from such insurance if it was carried as required under the terms of this Lease).  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 forty-five (45) 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 sixty (60) days following the giving of such notice.  If Lessee gives such notice and such repair or restoration is not commenced within thirty (30) days thereafter, this Lease shall terminate as of the date specified in said notice.  If the repair or restoration is commenced within said thirty (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.  If the repair or restoration actually takes longer than two hundred seventy (270) days (from the date of any damage or destruction) for any reason other than delays caused by Lessee, then Lessee may, at any time after the expiration of such period and prior to substantial completion, terminate this Lease by written notice to Lessor.

9.7Termination-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 by 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.

9.8Waive 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.

10.1Definition of "Real Property Taxes." As used herein, the term "Real Property Taxes" shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement bond; and/or license fee imposed upon or levied against any legal or equitable interest of Lessor in the Premises, Lessor's right to other income therefrom, and/or Lessor's business of leasing, by any authority having the direct or indirect power to tax and where the funds are generated with reference to the Building address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Premises are located.  The term "Real Property Taxes" shall also include any tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership of the Premises.  

 10.2Payment of Taxes.  In addition to Base Rent, Lessee shall pay to Lessor an amount equal to the Real Property Tax installment due at least ten (10) days prior to any delinquency date.  If any such taxes shall cover any period of time prior to or after the expiration or termination of this Lease, Lessee's share of such taxes shall be prorated to cover only that portion of the tax bill applicable to the period that this Lease is in effect, and Lessor shall reimburse Lessee for any overpayment.  If Lessee shall fail to pay any required Real Property Taxes, Lessor shall have the right to pay the same, and Lessee shall reimburse Lessor therefor upon demand.   In the event Lessee incurs a late charge on the third missed Rent payment, and all missed Rent payments thereafter, Lessor may, at Lessor's option, estimate the current Real Property Taxes, and require that such taxes be paid in advance to Lessor by Lessee, either: (i) in a lump sum amount equal to the installment due, at least twenty (20) days prior to the applicable delinquency date, or (ii) monthly in advance with the payment of the Base Rent.  If Lessor elects to require payment monthly in advance, the monthly payment shall be an amount equal to the amount of the estimated installment of taxes divided by the number of months remaining before the month in which said installment becomes delinquent.  When the actual amount of the applicable tax bill is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable taxes.  If the amount collected by Lessor is insufficient to pay such Real Property Taxes when due, Lessee shall pay Lessor, upon demand, such additional sum as is necessary to pay such obligations.  All moneys paid to Lessor under this Paragraph may be intermingled with other moneys of Lessor and shall not bear interest.  In the event of a Breach by Lessee in the performance of its obligations under this Lease, then any balance of funds paid to Lessor under the provisions of this Paragraph may at the option of Lessor, be treated as an additional Security Deposit. 

 10.3Joint Assessment.  If the Premises are not separately assessed, Lessee's liability shall be an equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be conclusively determined by Lessor from the respective valuations assigned in the assessor's work sheets or such other information as may be reasonably available. 

 10.4Personal Property Taxes.  Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee.  When possible, Lessee shall cause such property to be assessed and billed separately from the real property of Lessor.  If any of Lessee's said personal property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within ten (10) days after receipt of a written statement. 

11.Utilities.  Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon.  If any such services are not separately metered to Lessee, Lessee shall pay a reasonable proportion, to be determined by Lessor in customary fashion, of all charges jointly metered. 

12. Assignment and Subletting. 

 12.1Lessor's Consent Required.  

(a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or assignment") or sublet all or any part of Lessee's interest in this Lease or in the Premises without Lessor's prior written consent.   

 (b) A change in the control of Lessee shall constitute an assignment requiring consent.  The transfer, on a cumulative basis, of fifty percent (50%) or more of the voting control of Lessee within a twelve (12) consecutive month period shall constitute a change in control for this purpose. 

 (c)  The involvement of Lessee or its assets in any transaction, or series of transaction (by way of merger, sale, acquisition, financing, transfer, leveraged buy-out or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee's assets occurs, which results or will result in a reduction of the Net Worth of Lessee by an amount greater than fifty percent (50%) 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 thirty (30) days written notice, increase the monthly Base Rent to one hundred ten percent (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 one hundred ten percent (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 One Hundred Ten Percent (110%) of the scheduled adjusted rent.  

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

(f)Any approval or disapproval required from Lessor pursuant to Paragraph 12 with respect to any assignment or subletting shall be given within ten (10) business days after receipt by Lessor of written request for approval.   

 12.2 Terms and Conditions Applicable to Assignment and Subletting. 

 (a)  Regardless of Lessor's consent, any assignment or subletting shall not: (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. 

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

	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 given to Lessor in writing (see Paragraph 39.2).

	In the event of any assignment or subletting, Lessee shall pay over to Lessor fifty (50%) of all net rent (after deduction of assignment or subletting expenses) received by Lessee from any such assignee or sublessee, in excess of the Base Rent called for under this Lease, or, in the case of a subletting of a portion of the Premises, in excess of such rent fairly allocable to such portion.  In no event shall an assignee or sublessee have a Net Worth less than the Net Worth of Lessee as it was represented at the time of the execution of the Lease.

 12.3Additional 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)Subject to Paragraph 12.2(g), 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. 

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

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

 (b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of five (5) business days following written notice to Lessee.   The acceptance by Lessor of a partial payment of rent or security deposit shall not constitute a waiver of any of Lessor's rights including Lessor's right to recover possession of the Premises.

 (c) The failure of Lessee to allow Lessor and/or its agents access to the Premises in the manner required under this Lease or the commission of waste, act or acts constituting public or private nuisance, and/or illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days following written notice to Lessee.

(d)The failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignment or subletting, (iv) an estoppel certificate, financial statements or a  Tenancy Statement, (v) a requested subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42 (easements), or (viii) material safety data sheets (MSDS), or (ix) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of twenty (20) days following written notice to Lessee. 

 (e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, other than those described in subparagraphs 13.1 (a), (b) or (c), above, where such Default continues for a period of thirty (30) days after written notice; provided, however, that if the nature of Lessee's Default is such that more than thirty (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 thirty (30) day period and thereafter diligently prosecutes such cure to completion. 

 (f) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii) becoming a "debtor" as defined in 11 U.S.C. Section 101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (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 thirty (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 thirty (30) days; provided, however, in the event that any provision of this subparagraph (f) is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions. 

 (g) 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 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 sixty (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 ten (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 (1%).  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 [Reserved] 

 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 five (5) days after such amount shall be due, more than once in any twelve (12) month period, or twice during the entire Term of the Lease, then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a one-time late charge equal to five percent (5%) of each such overdue amount.  The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such late payment.  Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's Default 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 three (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 thirty (30) days following the date on which it was due for non-scheduled payment, shall bear interest from the date when due, as to scheduled payments, or the thirty-first (31st) day after it was due as to non-scheduled payments.  The interest ("Interest") charged shall be computed at the rate of 10% per annum, but shall not exceed the maximum rate allowed by law.  Interest is payable in addition to the potential late charge provided for in Paragraph 13.4. 

 13.6 Breach by Lessor. 

 (a) Notice of Breach.  Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation required to be performed by Lessor.  For purposes of this Paragraph, a reasonable time shall in no event be less than thirty (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 such obligation of Lessor that has not been performed in the manner required under this Lease; provided, however, that if the nature of Lessor's obligation is such that more than thirty (30) days are reasonably required for its performance, then Lessor shall not be in breach if performance is commenced within such thirty (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 thirty (30) days after receipt of said notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee's expense and offset from Rent an amount equal to the greater of one month's Base Rent or the Security Deposit, and to pay an excess of such expense under protest, reserving Lessee's right to reimbursement from Lessor.  Lessee shall document the cost of said cure and supply said documentation to Lessor. 

14.Condemnation. 

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

15. Brokers' Fee. 

 Each party shall be responsible for paying their own broker for any commission, fee or other form of remuneration earned by such broker in connection with this Lease.  Each party shall defend, indemnify and hold the other party harmless from and against any and all claims for such brokerage commission.  

16. Estoppel Certificates. 

 16.1Each Party (as "Responding Party") shall within five (5) 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 or if the Estoppel Certificate is required by Lessor's Lender, then in the form reasonably requested by such Lender. 

 16.2If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such five (5) 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.  If Lessor is the Requesting Party, the Estoppel Certificate may also state that the Lessee accepts the condition of the Premises.  Prospective purchasers and encumbrances may rely upon the Requesting Party's Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate. 

16.3If 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 current financial statements as may be reasonably required by such lender or purchaser, including but not limited to Lessee's financial statements for the past three (3) years which statements shall be audited if it is Lessee's custom to do so, or otherwise, such financial statements shall be certified as accurate by Lessee's President or CFO.  All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth. 

 17. Definition of Lessor.  The term "Lessor" as used herein shall mean the owner or owners at the time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee's interest in the prior lease.  In the event of a transfer of Lessor's title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor.  Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the Lessor provided that the transferee assumes in writing the obligations of Lessor hereunder accruing subsequent to the effective date of the transfer.  Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined.  Notwithstanding the above, and subject to the provisions of Paragraph 20 below, the original Lessor under this Lease, and all subsequent holders of the Lessor's interest in this Lease shall remain liable and responsible with regard to the potential duties and liabilities of Lessor pertaining to Hazardous Substances as outlined in Paragraph 6 above. 

 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, the individual partners of Lessor, or its or their individual partners, directors, officers or shareholders, and Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to this Lease, and shall not seek recourse against the individual partners of Lessor, or its or their individual partners, directors, officers or shareholders, or any of their personal assets for such satisfaction. 

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

 22. No Prior or Other Agreements; Broker Disclaimer.  This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective.  Lessor and Lessee each represents and warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the 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 shall be in writing and may be delivered in person (by hand or by courier) or may be sent by certified or registered mall or U.S.  Postal Service Express Mail, with postage prepaid, 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. 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.  Notices delivered by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed given on the business day after delivery of the same to the postal Service or courier.  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 Lessors 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. Recording.  Either Lessor or Lessee shall, upon request of the other, execute, acknowledge and deliver to the other a short form memorandum of this Lease for recording purposes.  The Party requesting recordation shall be responsible for payment of any fees applicable thereto.  If a short form memorandum of this Lease is recorded at the request of Lessee, the Lessee agrees to provide Lessor with a recordable quit claim of such lease at its termination.

 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 one hundred fifty percent (150%) of the Base Rent applicable during the month 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 accruing prior to taking title to the Premises.  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.  Subject to the non-disturbance provisions of Paragraph 30.3, Lessee agrees to attorn to a Lender or any other party who acquires ownership of the Premises by reason of a foreclosure of a Security Device, and that in the event of such foreclosure, such new owner shall not: (i) be liable for any act or omission of any prior Lessor or with respect to events occurring prior to acquisition of ownership; (ii) be subject to any offsets or defenses which Lessee might have against any prior Lessor, or (iii) be bound by prepayment of more than one (1) month's rent. 

 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 sixty (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 sixty (60) days, then Lessee may, at Lessee's option, directly contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement. 

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

 31. Attorneys' Fees.  If any Party brings an action or proceeding involving the Premises to enforce the terms hereof 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 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 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. 

 32. Lessor's Access; Showing Premises; Repairs.  Lessor and Lessor's agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or lessees, during the last six (6) months of the Term, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary.  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 provided it is clear that only the Premise is for sale and not Lessee's business.  Lessor may during the last six (6) months of the term hereof place on the Premises any ordinary "For Lease" signs.  Lessee may at any time place on or about the Premises any ordinary "For Sublease" sign. 

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

 34. Signs.  Except for ordinary "For Sublease" signs, Lessee shall not place any sign upon the Premises without Lessor's prior written consent.  All signs must comply with all Applicable Requirements. 

 35. Termination; Merger.  Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies.  Lessor's failure within ten (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. 

	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 ten (10) business days following such request.

36.2Notwithstanding anything contained in this Lease agreement to the contrary, as long as any executive officer of the Lessee is also a direct or indirect owner of the Premises, then, with respect to any provisions of this Lease that require the prior consent or approval of or notice to Lessor, Lessor shall be deemed to have automatically given its consent or approval and have received the required prior notice with respect thereto. 

 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, and each such Guarantor shall have the same obligations as Lessee under this Lease. 

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

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

 39. Options. 

 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.  Each 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.  Notwithstanding the foregoing, all Options shall be exercisable by any assignee who is an affiliate of Lessee (but not a subtenant or an unaffiliated third party). 

 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 (provided that 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 three (3) or more notices of separate Default, whether or not the Defaults are cured, during the twelve (12) month period immediately preceding the exercise of the Option. 

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

 (c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee's due and timely exercise of the Option, if, after such exercise and prior to the commencement of the extended term, (i) Lessee fails to pay Rent for a period of thirty (30) days after such Rent becomes due (without any necessity of Lessor to give notice thereof), (ii) Lessor gives to Lessee three (3) or more notices of separate Default during any twelve (12) month period, whether or not the Defaults are cured, or (iii) if Lessee commits a Breach of this Lease. 

40. Multiple Buildings.  If the Premises are a part of a group of buildings controlled by Lessor, Lessee agrees that it will observe all reasonable rules and regulations which Lessor may make from time to time for the management, safety, and care of said properties, including the care and cleanliness of the grounds and including the parking, loading and unloading of vehicles, and that Lessee will pay its fair share of common expenses incurred in connection therewith. 

41. Security Measures.  Lessee hereby acknowledges that the rental payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same.  Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties. 

42. Reservations.  Lessor reserves to itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee.  Lessee agrees to sign any documents reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions. 

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

44. Authority; Multiple Parties; Execution.  

(a)If either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf.  Each party shall, within thirty (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 Lessee's 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 named Lessees had executed such document.

(c)This Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

45. 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. 

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

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

48. Americans with Disabilities Act.  In the event that Lessee's use of the Premises requires modifications or additions to the Premises in order to be in compliance with the Americans with Disabilities Act, such modifications and additions shall be governed by the provisions in Section 2.3(a).

49.Lessor Indemnity.  Lessor shall indemnify, protect, defend and hold harmless Lessee and its agents, employees, officers, shareholders, directors, successors and assigns from and against any and all claims, damages, judgments, penalties, attorneys' and consultants' fees, expenses and/or liabilities arising out of, involving, or in connection with, the negligent or willful misconduct of Lessor or its agents, owners, employees or contractors.  If any action or proceeding is brought against Lessee by reason of any of the foregoing matters, Lessor shall, upon receipt of written notice from Lessee, defend the same at Lessor's expense by counsel reasonably satisfactory to Lessee, and Lessee shall cooperate with Lessor in such defense.  Lessee need not have first paid any such claim in order to be defended or indemnified.

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. 

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

Executed at: Orange County, CA_______Executed at: 100 W. Big Beaver, Troy, MI _

on: November 12, 2008_______________on: November 11, 2008
By LESSORS:By LESSEE:  

	

Cartwright, LLC, a California limited liability company dba Cartwright Real Estate Holdings, LLC
	

Quantum Fuel Systems Technologies Worldwide, Inc.

	 	 
	
By:/s/ Alan Niedzwiecki________________
	
By:_/s/ Kenneth R. Lombardo__________

	
Name Printed: Alan Niedzwiecki_________
	
Name Printed: Kenneth R. Lombardo____

	
Title: Managing Member_______________
	
Title: Vice President - Legal____________

	 	 
	

Executed at: Orange County, CA_________

On: November 12, 2008________________
	 
	 	 
	
Klein Investments Family Limited Partnership, a California limited partnership

By:_/s/ William A. Klein_______________
William A. Klein, General Partner

By:_/s/ Carolyn J. Klein________________

Carolyn J. Klein, General Partner

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