Document:

EX-10.1

 

Exhibit 10.1

	 	 	 	 	 
		 	CNX Gas Corporation

5 Penn Center West, Suite 401 
Pittsburgh, PA 15276-0102
	 
	 	 	 	 
	 

	 	phone:
	 	412/298-4973

	 

	 	fax:
	 	412/200-6782

	 

	 	e-mail:  
	 	kurtsalvatori@cnxgas.com

	 

	 	web:
	 	www.cnxgas.com
	 
	 	 	 	 
	June 18, 2007	 	Kurt Salvatori
	 	 	Director — Human Resources

Dr. DeAnn Craig, P.E.

4899 Montrose Blvd.

Apt. #1503

Houston, TX 77006

Dear DeAnn:

     I am pleased to offer you the position of Senior Vice President —  Asset Assessment of CNX Gas
Corporation.

     We believe that you will be a tremendous addition to our senior management team. You bring the
technical and management skills that make you ideal for this position. At the same time, we think
that this position represents a tremendous opportunity for you. We have gotten off to a fast start
in our first 17 months as a NYSE-listed public company with a $4+ billion market capitalization,
but we are even more excited about the future. With the acquisition last week of Peabody’s gas
assets, we now control over 3.6 million acres. Approximately 90%
of our holdings are currently
unproven and we believe your leadership in assessing these holdings will be critical in unlocking
additional value for our shareholders. We look forward to your input into these and the many other
significant opportunities we see for the Company.

     An outline of the compensation package for this position is attached. We believe that the
compensation package is very competitive. Consistent with our Compensation Committee’s pay for
performance philosophy, you will have a significant compensation opportunity on both a short-term
and long-term basis for superior performance. If we produce value for our shareholders, the entire
management team will be well compensated.

     We look forward to your acceptance of this position. If you accept, our Compensation Committee and
the Board of Directors must formally approve your appointment. Nick Deluliis has discussed the
matter with them and does not expect an issue, but this offer is necessarily subject to that
approval, which we will pursue promptly.

 

 

     Please accept this offer by signing both copies of this letter, and return one signed copy to my
attention. The other copy is for your records. Of course, if you have any questions, you should not
hesitate to contact me.

     I look forward to you joining our team!

	 	 	 	 	 
	 	Sincerely

 	 
	 	/S/ Kurt R. Salvatori 	 
	 	Kurt R. Salvatori 	 
	 	 	 

	 	 	 	 	 
	Agreed to this 18th day of June, 2007.

 	 	 
	/S/ DeAnn Craig 	 	 
	DeAnn Craig
 	 	 
	 	 	 

 

 

CONFIDENTIAL

Date: June 18, 2007

PROPOSED TERMS OF EMPLOYMENT

     The following are the terms on which you will be employed by CNX Gas Corporation.

	 	 	 
	Position

	 	Senior Vice President — Asset Assessment
	 
	 	 
	Job Grade
	 	106 
	 
	 	 
	Base Salary

	 	Your initial base salary will be
$250,000 per year. The base salary for
this position must be approved by the
Compensation Committee of the Board of
Directors. Typically, base salaries for
executive officers are reviewed in
April of each year. Your base salary is
subject to change as determined by the
Compensation Committee.
	 
	 	 
	Annual Short Term Incentive
Compensation Opportunity
(“Bonus”)

	 	You will be eligible to participate in
the Company’s Short Term Incentive Plan
for 2007. Your bonus opportunity for
2007 will be targeted at 60% of your
base salary for achievement of 100% of
the corporate and individual
performance criteria established by the
Compensation Committee and the CEO.
Even though your start date will be
August 1st, you will be
eligible for a full year bonus payment
for 2007.
	 
	 	 
	Long Term Incentive Compensation

	 	You will be eligible to participate in
the Company’s Long-Term Incentive
Compensation Program for the
performance period from your date of
hire to December 31, 2009. Your award
will have a grant date value of 100% of
your base salary, or $250,000. The
number of performance share units you
receive under the program will be equal
to $250,000 divided by the average
closing price of a share of CXG stock
on the NYSE for the ten trading days
ending on your date of hire.
	 
	 	 
	Signing Bonus

	 	$75,000, split between cash in the
amount of $20,000 and performance share
units in the amount of $55,000.
	 
	 	 
	Current Employer Reimbursable 

Costs

	 	CNX Gas will reimburse you for monies
that you actually owe to Chevron due to
the fact that you will be leaving
earlier than expected up to $150,000.
It is our intention to keep you “whole”
from an income tax standpoint. If
possible CNX Gas will deal directly
with

 

 

	 	 	 
	 

	 	Chevron on this matter, thereby avoiding a tax
event for yourself, if however that is not possible
we will “gross-up” the payment we make to you.
	 
	 	 
	Change of Control Agreement

	 	You will be eligible for a standard change of
control agreement, with a “2x” multiplier.
	 
	 	 
	Vacation

	 	You are entitled to five weeks of vacation per year.
	 
	 	 
	Investment (401(k)) Plan

	 	As an employee of CNX Gas, you will be eligible to
participate in the CONSOL Energy Investment Plan.
Under that Plan, CNX Gas will match your
contributions to the Plan up to 6% of your base
salary. In addition, CNX Gas will contribute 3% of
your base salary to the Plan, for which no
contribution on your part is required. These
contributions will be subject to IRS compensation
limits.
	 
	 	 
	Health and Welfare Benefits

	 	You will be eligible for the same health and
welfare benefits to which all similarly situated
employees are entitled.
	 
	 	 
	Relocation

	 	You will be entitled to the “current employee”
relocation package offered by CNX Gas.
	 
	 	 
	Start Date

	 	We look forward to you starting employment with us
on or about August 1, 2007. You will be an
executive officer of CNX Gas. As such, be aware
that all compensation paid to you will be publicly
disclosed. Further, you will be subject to certain
restrictions on your ability to purchase and sell
CNX Gas common stock.
	 
	 	 
	Physical Examination

	 	Pursuant to Company policy, your employment is
conditioned upon a physical examination, including
a drug test, and a background check. We would like
to schedule a physical at your earliest
convenience.
	 
	 	 
	No Employment Agreement;
Compensation and Benefits
Subject to Change

	 	These terms of employment do not create any right
to continued employment. You will not have an
employment agreement. The compensation and
benefits described in these terms of employment are
subject to change in accordance with the
prerogatives of the Compensation Committee and the
terms of the applicable benefit plans and programs.

 

 

Your acceptance of this offer of employment on the above terms is subject to the approval of the
Board of Directors of CNX Gas Corporation and its committees that are required to approve your
appointment. Management of CNX Gas intends to seek that approval promptly after your acceptance,
but your employment will not take effect unless and until that approval is obtained.EX-10.2

 

Exhibit 10.2

Schedule of Compensation of Non-Employee Directors

     On August 16, 2007, the Board of Directors of CNX Gas Corporation amended the compensation
program for non-employee Directors. The principle structural change was to remove meeting
attendance fees. The new compensation arrangements are as follows:

     1. Non-Executive Chairman of the Board:

	 	•	 	Cash — $120,000 annual fee; and
	 
	 	•	 	Equity — $200,000 annual restricted stock unit grant.

     2. Directors other than Non-Executive Chairman of the Board:

	 	•	 	Cash — $70,000 annual fee; and
	 
	 	•	 	Equity — $100,000 annual restricted stock unit grant.

     3. Chairman of the Audit Committee:

	 	•	 	Cash — $15,000 annual fee.

     4. Members of the Audit Committee other than Chairman of the Audit Committee:

	 	•	 	Cash — $7,500 annual fee.

     5. Chairmen of Committees other than Audit Committee:

	 	•	 	Cash — $7,500 annual fee.

     The cash component of compensation described above was made effective starting with the period
August through October 2007. All cash payments will be made quarterly in arrears. The equity
grants described above will be first made in 2008 after the Annual Meeting of Stockholders to be
held in the spring of 2008.

     There will be no equity grants made to Directors solely as a result of their appointment to
the Board.

     Directors who are employees of CNX Gas Corporation or CONSOL Energy Inc. do not receive
compensation from CNX Gas Corporation for their services as Directors of CNX Gas Corporation.

1v1026_exh1.htm

     

    EXHBIT
      10-64

     

     

    

    

     

     

    AIR
      COMMERCIAL REAL ESTATE ASSOCIATION

     

    STANDARD
      INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE -- NET

     

    (DO
      NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)

    

    

     

    1.           Basic
      Provisions ("Basic Provisions").

     

    1.1         Parties:
      This Lease ("Lease"),
      dated for reference purposes only   October
      29,
      2007,

     

    is
      made by and
      between   Dominguez
      Channel,
      LLC("Lessor")
      and En
      Pointe Technologies Sales, Inc.("Lessee"),

     

    (collectively
      the "Parties," or individually a
      "Party").

     

     

    1.2         Premises:
      That certain real property, including all improvements therein or
      to be
      provided by Lessor under the terms of this Lease,

     

    and
      commonly known
      as 18701
      S. Figueroa St., Carson                                                                                                         ,

     

    located
      in the County of Los
      Angeles                                                                                           ,
State of California                                                                     ,

     

    and
      generally described as (describe briefly the nature of the property and, if
      applicable, the "Project", if the property is located within a
Project)

     

    2
      storey office building with approximately 29,032 sq. ft. of office
      space

                                                                ("Premises").                      (See
      also Paragraph 2)

     

    1.3         Term: Seven           years
      and zero                      months
("Original
      Term")
commencing November  1,
      2007

     

    ("Commencement
      Date") and ending October  31,
      2014                     ("Expiration
      Date"). (See also Paragraph 3)

     

    1.4         Early
      Possession: N/A                                                                                                              ("Early
      Possession Date").

     

    (See
      also Paragraphs 3.2 and 3.3)

     

    1.5         Base
      Rent:  $48,483.44  per
      month ("Base Rent"), payable on the First         day
      of

     

    each
      month commencing November
      1,
      2007.            
      (See also Paragraph 4)

     

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

     

    1.6         Base
      Rent and Other Monies Paid Upon Execution:

     

    (a)         Base
      Rent:
 $48,483.44                                                                       for
      the period November  1
      - 30,
      2007

     

    (b)         Security
      Deposit:  $96,966.88                                                           ("Security
      Deposit"). (See also Paragraph 5)

     

    (c)         Association
      Fees:
      $ ___________                                               for
      the period  ______________________

     

    (d)         Other:
      $  __________                                 for 
__________________________

     

    (e)         Total
      Due Upon Execution of
      this Lease:  $145,450.32

     

    1.7         Agreed
      Use:  general
      commercial and sales offices

     

    .
      (See also Paragraph 6)

     

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

     

    1.9         Real
      Estate Brokers: (See also Paragraph 15)

     

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

     

    applicable
      boxes):

     

    o  N/A    ______________________________________   represents
      Lessor exclusively ("Lessor's Broker");

     

    o N/A    ______________________________________ 
        represents Lessee exclusively ("Lessee's Broker");
      or

     

    o N/A   ______________________________________     represents
      both Lessor and Lessee ("Dual Agency").

     

    (b)
      Payment to Brokers: Upon execution and delivery of this Lease by both
      Parties, Lessor shall pay to the Broker the fee agreed to

     

    in
      their
      separate written agreement (or if there is no such agreement, the sum
      of                                                                                                                
or                      %
      of the total Base Rent)

     

    for
      the
      brokerage services rendered by the Brokers.

     

    1.10
      Guarantor.
The obligations
      of the Lessee under this Lease are to be guaranteed
      by   N/A

     

    ("Guarantor").                        (See
      also Paragraph 37)

     

    1.11
      Attachments. Attached hereto are the following, all of which constitute
      a part of this Lease:

     

      an
      Addendum consisting
      of
      Paragraphs                                                                           through                                      ;

     a
      plot
      plan depicting the Premises;

     a
      current set of the Rules and Regulations;

     a
      Work
      Letter;

     

     other
      (specify): Base
      Rent Adjustment; Option to Extend

    

            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

    

     

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    ©2001
      - AIR COMMERCIAL REAL ESTATE
      ASSOCIATION                                                                                                                                        FORM
      STN-9-3/06E

     

     

    that
      may
      have been used in calculating Rent, is an approximation which the Parties agree
      is reasonable and any payments based thereon are not subject to revision whether
      or not the actual size is more or less. Note: Lessee is advised to verify the
      actual size prior to executing this Lease.

     

    2.2           Condition.
      Lessor shall deliver the Premises to Lessee broom clean and free of
      debris on the Commencement Date or the Early Possession Date, whichever first
      occurs ("Start Date"), and, so long as the required service contracts described
      in Paragraph 7.1(b) below are obtained by Lessee and in effect within thirty
      days following the Start Date, warrants that the existing electrical, plumbing,
      fire sprinkler, lighting, heating, ventilating and air conditioning systems
      ("HVAC"), loading doors, sump pumps, if any, and all other such elements in
      the
      Premises, other than those constructed by Lessee, shall be in good operating
      condition on said date, that the structural elements of the roof, bearing walls
      and foundation of any buildings on the Premises (the "Building") shall be free
      of material defects, and that the Premises do not contain hazardous levels
      of
      any mold or fungi defined as toxic under applicable state or federal law. If
      a
      non-compliance with said warranty exists as of the Start Date, or if one of
      such
      systems or elements should malfunction or fail within the appropriate warranty
      period, Lessor shall, as Lessor's sole obligation with respect to such matter,
      except as otherwise provided in this Lease, promptly after receipt of written
      notice from Lessee setting forth with specificity the nature and extent of
      such
      non-compliance, malfunction or failure, rectify same at Lessor's expense. The
      warranty periods shall be as follows: (i) 6 months as to the HVAC systems,
      and
      (ii) 30 days as to the remaining systems and other elements of the Building.
      If
      Lessee does not give Lessor the required notice within the appropriate warranty
      period, correction of any such non-compliance, malfunction or failure shall
      be
      the obligation of Lessee at Lessee's sole cost and expense.

     

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

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

     

    (b)
      If such Capital Expenditure is not the result of the
      specific and unique use of the Premises by Lessee (such as, governmentally
      mandated seismic modifications), then Lessor shall pay for such Capital
      Expenditure and Lessee shall only be obligated to pay, each month during the
      remainder of the term of this Lease, on the date that on which the Base Rent
      is
      due, an amount equal to 144th of the portion of such costs reasonably
      attributable to the Premises. Lessee shall pay Interest on the balance but
      may
      prepay its obligation at any time. If, however, such Capital Expenditure is
      required during the last 2 years of this Lease or if Lessor reasonably
      determines that it is not economically feasible to pay its share thereof, Lessor
      shall have the option to terminate this Lease upon 90 days prior written notice
      to Lessee unless Lessee notifies Lessor, in writing, within 10 days after
      receipt of Lessor's termination notice that Lessee will pay for such Capital
      Expenditure. If Lessor does not elect to terminate, and fails to tender its
      share of any such Capital Expenditure, Lessee may advance such funds and deduct
      same, with Interest, from Rent until Lessor's share of such costs have been
      fully paid. If Lessee is unable to finance Lessor's share, or if the balance
      of
      the Rent due and payable for the remainder of this Lease is not sufficient
      to
      fully reimburse Lessee on an offset basis, Lessee shall have the right to
      terminate this Lease upon 30 days written notice to Lessor.

    (c)
      Notwithstanding the above, the provisions concerning Capital
      Expenditures are intended to apply only to non-voluntary, unexpected, and new
      Applicable Requirements. If the Capital Expenditures are instead triggered
      by
      Lessee as a result of an actual or proposed change in use, change in intensity
      of use, or modification to the Premises then, and in that event, Lessee shall
      either: (i) immediately cease such changed use or intensity of use and/or take
      such other steps as may be necessary to eliminate the requirement for such
      Capital Expenditure, or (ii) complete such Capital Expenditure at its own
      expense. Lessee shall not, however, have any right to terminate this
      Lease.

     

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

     

    2.5           Lessee
      as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2
      shall be of no force or effect if immediately

     

    prior
      to
      the Start Date Lessee was the owner or occupant of the Premises. In such event,
      Lessee shall be responsible for any necessary corrective

     

    work.

    

     

    3.           Term.

     

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

     

    3.2           Early
      Possession. If Lessee totally or partially occupies the Premises prior
      to the Commencement Date, the obligation to pay

    

    

     

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    INITIALS                                                                                                                                                  INITIALS

    

     

    ©2001
      - AIR COMMERCIAL REAL ESTATE
      ASSOCIATION                                                                                                                                        FORM
      STN-9-3/06E

     

     

    Base
      Rent
      shall be abated for the period of such early possession. All other terms of
      this
      Lease (including but not limited to the obligations to pay Real Property Taxes
      and insurance premiums and to maintain the Premises) shall be in effect during
      such period. Any such early possession shall not affect the Expiration
      Date.

     

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

     

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

    

     

    4.           Rent.

     

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

     

    deemed
      to
      be rent ("Rent").

     

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

     

    4.3           Association
      Fees. In addition to the Base Rent, Lessee shall pay to Lessor each
      month an amount equal to any owner's

     

    association
      or condominium fees levied or assessed against the Premises. Said monies shall
      be paid at the same time and in the same manner as the

     

    Base
      Rent.

    

     

    5.           Security
      Deposit. Lessee shall deposit with Lessor upon execution hereof the
      Security Deposit as security for Lessee's faithful performance of its
      obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults
      under this Lease, Lessor may use, apply or retain all or any portion of said
      Security Deposit for the payment of any amount due already due Lessor, for
      Rents
      which will be due in the future, and/ or to reimburse or compensate Lessor
      for
      any liability, expense, loss or damage which Lessor may suffer or incur by
      reason thereof. If Lessor uses or applies all or any portion of the Security
      Deposit, Lessee shall within 10 days after written request therefor deposit
      monies with Lessor sufficient to restore said Security Deposit to the full
      amount required by this Lease. If the Base Rent increases during the term of
      this Lease, Lessee shall, upon written request from Lessor, deposit additional
      monies with Lessor so that the total amount of the Security Deposit shall at
      all
      times bear the same proportion to the increased Base Rent as the initial
      Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended
      to accommodate a material change in the business of Lessee or to accommodate
      a
      sublessee or assignee, Lessor shall have the right to increase the Security
      Deposit to the extent necessary, in Lessor's reasonable judgment, to account
      for
      any increased wear and tear that the Premises may suffer as a result thereof.
      If
      a change in control of Lessee occurs during this Lease and following such change
      the financial condition of Lessee is, in Lessor's reasonable judgment,
      significantly reduced, Lessee shall deposit such additional monies with Lessor
      as shall be sufficient to cause the Security Deposit to be at a commercially
      reasonable level based on such change in financial condition. Lessor shall
      not
      be required to keep the Security Deposit separate from its general accounts.
      Within 90 days after the expiration or termination of this Lease, Lessor shall
      return that portion of the Security Deposit not used or applied by Lessor.
      No
      part of the Security Deposit shall be considered to be held in trust, to bear
      interest or to be prepayment for any monies to be paid by Lessee under this
      Lease.

     

    6.           Use.

     

    6.1           Use.
      Lessee shall use and occupy the Premises only for the Agreed Use,
      or
      any other legal use which is reasonably comparable

    thereto,
      and for no other purpose. Lessee shall not use or permit the use of the Premises
      in a manner that is unlawful, creates damage, waste or a nuisance, or that
      disturbs occupants of or causes damage to neighboring premises or properties.
      Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow
      in
      the Premises any pets, animals, birds, fish, or reptiles. Lessor shall not
      unreasonably withhold or delay its consent to any written request for a
      modification of the Agreed Use, so long as the same will not impair the
      structural integrity of the improvements on the Premises or the mechanical
      or
      electrical systems therein, and/or is not significantly more burdensome to
      the
      Premises. If Lessor elects to withhold consent, Lessor shall within 7 days
      after
      such request give written notification of same, which notice shall include
      an
      explanation of Lessor's objections to the change in the Agreed Use.

     

    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

    

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    

    

     

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    any
      Applicable Requirements. Likewise, Lessee shall immediately give written notice
      to Lessor of: (i) any water damage to the Premises and any suspected seepage,
      pooling, dampness or other condition conducive to the production of mold; or
      (ii) any mustiness or other odors that might indicate the presence of mold
      in
      the Premises.

     

    6.4           Inspection;
      Compliance. Lessor and Lessor''s "Lender" (as defined in Paragraph 30)
      and consultants shall have the right to enter into Premises at any time, in
      the
      case of an emergency, and otherwise at reasonable times after reasonable notice,
      for the purpose of inspecting the condition of the Premises and for verifying
      compliance by Lessee with this Lease. The cost of any such inspections shall
      be
      paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous
      Substance Condition (see paragraph 9.1) is found to exist or be imminent, or
      the
      inspection is requested or ordered by a governmental authority. In such case,
      Lessee shall upon request reimburse Lessor for the cost of such inspection,
      so
      long as such inspection is reasonably related to the violation or contamination.
      In addition, Lessee shall provide copies of all relevant material safety data
      sheets (MSDS) to Lessor within 10 days of the receipt of a written request
      therefor.

    

     

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

     

    7.1           Lessee's
      Obligations.

     

    (a)
      In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3
      (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2
      (Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee
      shall, at Lessee's sole expense, keep the Premises, Utility Installations
      (intended for Lessee's exclusive use, no matter where located), and Alterations
      in good order, condition and repair (whether or not the portion of the Premises
      requiring repairs, or the means of repairing the same, are reasonably or readily
      accessible to Lessee, and whether or not the need for such repairs occurs as
      a
      result of Lessee's use, any prior use, the elements or the age of such portion
      of the Premises), including, but not limited to, all equipment or facilities,
      such as plumbing, HVAC equipment, electrical, lighting facilities, boilers,
      pressure vessels, fire protection system, fixtures, walls (interior and
      exterior), foundations, ceilings, roofs, roof drainage systems, floors, windows,
      doors, plate glass, skylights, landscaping, driveways, parking lots, fences,
      retaining walls, signs, sidewalks and parkways located in, on, or adjacent
      to
      the Premises. Lessee, in keeping the Premises in good order, condition and
      repair, shall exercise and perform good maintenance practices, specifically
      including the procurement and maintenance of the service contracts required
      by
      Paragraph 7.1(b) below. Lessee's obligations shall include restorations,
      replacements or renewals when necessary to keep the Premises and all
      improvements thereon or a part thereof in good order, condition and state of
      repair. Lessee shall, during the term of this Lease, keep the exterior
      appearance of the Building in a first-class condition (including, e.g. graffiti
      removal) consistent with the exterior appearance of other similar facilities
      of
      comparable age and size in the vicinity, including, when necessary, the exterior
      repainting of the Building.

     

    (b)
      Service Contracts. Lessee shall, at Lessee's sole expense, procure and
      maintain contracts, with copies to Lessor, in customary form and substance
      for,
      and with contractors specializing and experienced in the maintenance of the
      following equipment and improvements, if any, if and when installed on the
      Premises: (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire
      extinguishing systems, including fire alarm and/or smoke detection, (iv)
      landscaping and irrigation systems, (v) roof covering and drains, (vi)
      clarifiers, and (vii) basic utility feed to the perimeter of the Building.
      However, Lessor reserves the right, upon notice to Lessee, to procure and
      maintain any or all of such service contracts, and Lessee shall reimburse
      Lessor, upon demand, for the cost thereof.

     

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

     

    (d)
      Replacement. Subject to Lessee's indemnification of Lessor as set forth
      in Paragraph 8.7 below, and without relieving Lessee of liability resulting
      from
      Lessee's failure to exercise and perform good maintenance practices, if an
      item
      described in Paragraph 7.1(b) cannot be repaired other than at a cost which
      is
      in excess of 50% of the cost of replacing such item, then such item shall be
      replaced by Lessor, and the cost thereof shall be prorated between the Parties
      and Lessee shall only be obligated to pay, each month during the remainder
      of
      the term of this Lease, on the date on which Base Rent is due, an amount equal
      to the product of multiplying the cost of such replacement by a fraction, the
      numerator of which is one, and the denominator of which is 144 (ie. 1/144th
      of
      the cost per month). Lessee shall pay Interest on the unamortized balance but
      may prepay its obligation at any time.

     

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

     

    7.3           Utility
      Installations; Trade Fixtures; Alterations.

     

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

     

    (b)
      Consent. Lessee shall not make any Alterations or Utility Installations
      to the Premises without Lessor's prior written consent. Lessee may, however,
      make non-structural Utility Installations to the interior of the Premises
      (excluding the roof) without such consent but upon notice to Lessor, as long
      as
      they are not visible from the outside, do not involve puncturing, relocating
      or
      removing the roof or any existing walls, will not affect the electrical,
      plumbing, HVAC, and/or life safety systems, and the cumulative cost thereof
      during this Lease as extended does not exceed a sum equal to 3 month's Base
      Rent
      in the aggregate or a sum equal to one month's Base Rent in any one year.
      Notwithstanding the foregoing, Lessee shall not make or permit any roof
      penetrations and/or install anything on the roof without the prior written
      approval of Lessor. Lessor may, as a precondition to granting such approval,
      require Lessee to utilize a contractor chosen and/or approved by Lessor. Any
      Alterations or Utility Installations that Lessee shall desire to make and which
      require the consent of the Lessor shall be presented to Lessor in written form
      with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i)
      acquiring all applicable governmental permits, (ii) furnishing Lessor with
      copies of both the permits and the plans and specifications prior to
      commencement of the work, and (iii) compliance with all conditions of said
      permits and other Applicable Requirements in a prompt

    

    

     

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    and
      expeditious manner. Any Alterations or Utility Installations shall be performed
      in a workmanlike manner with good and sufficient materials. Lessee shall
      promptly upon completion furnish Lessor with as-built plans and specifications.
      For work, which costs an amount in excess of one month’s Base Rent, Lessor may
      condition its consent upon Lessee providing a lien and completion bond in an
      amount equal to 150% of the estimated cost of such Alteration or Utility
      Installation and/or upon Lessee’s posting an additional Security Deposit with
      Lessor.

     

    

     

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

     

    

     

    7.4           Ownership;
      Removal; Surrender; and Restoration.

     

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

     

    

     

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

     

    

     

    (c)
Surrender;
      Restoration. Lessee shall surrender the Premises by the Expiration Date
      or any earlier termination date, with all of the improvements, parts and
      surfaces thereof broom clean and free of debris, and in good operating order,
      condition and state of repair, ordinary wear and tear excepted. “Ordinary wear
      and tear” shall not include any damage or deterioration that would have been
      prevented by good maintenance practice. Notwithstanding the foregoing, if this
      Lease if for 12 months or less, then Lessee shall surrender the Premises in
      the
      same condition as delivered to Lessee on the Start Date with NO allowance for
      ordinary wear and tear. Lessee shall repair any damage occasioned by the
      installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations
      and/or Utility Installations, furnishings, and equipment as well as the removal
      of any storage tank installed by or for Lessee. Lessee shall completely remove
      from the Premises any and all Hazardous Substances brought onto the Premises,
      by
      or for Lessee, or any third party (except Hazardous Substances which were
      deposited via underground migration from areas outside of the Premises, or
      if
      applicable, the Premises) even if such removal would require Lessee to perform
      or pay for work that exceeds statutory requirements. Trade Fixtures shall remain
      the property of Lessee and shall be removed by Lessee. Any personal property
      of
      Lessee not removed on or before the Expiration Date or any earlier termination
      date shall be deemed to have been abandoned by Lessee and may be disposed of
      or
      retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate
      the Premises pursuant to this Paragraph 7.4(c) without the express written
      consent of Lessor shall constitute a holdover under the provisions of Paragraph
      26 below.

     

    

     

    
      	
              8.  

            	
              Insurance;
                Indemnity.

            

    

     

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

     

    

     

    8.2           Liability
      Insurance.

     

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

     

    

     

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

     

    

     

    8.3           Property
      Insurance – Building, Improvements and Rental Value.

     

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

     

    

     

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    Price
      Index for All Urban Consumers for the city nearest to where the Premises are
      located. If such insurance coverage has a deductible clause, the deductible
      amount shall not exceed $1,000 per occurrence, and Lessee shall be liable for
      such deductible amount in the event of an Insured Loss.

     

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

     

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

     

    8.4           Lessee's
      Property; Business Interruption Insurance.

     

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

     

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

     

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

     

    8.5           Insurance
      Policies. Insurance required herein shall be by companies duly licensed
      or admitted to transact business in the state where the Premises are located,
      and maintaining during the policy term a "General Policyholders Rating" of
      at
      least A-, VI, as set forth in the most current issue of "Best's Insurance
      Guide", or such other rating as may be required by a Lender. Lessee shall not
      do
      or permit to be done anything which invalidates the required insurance policies.
      Lessee shall, prior to the Start Date, deliver to Lessor certified copies of
      policies of such insurance or certificates evidencing the existence and amounts
      of the required insurance. No such policy shall be cancelable or subject to
      modification except after 30 days prior written notice to Lessor. Lessee shall,
      at least 10 days prior to the expiration of such policies, furnish Lessor with
      evidence of renewals or "insurance binders" evidencing renewal thereof, or
      Lessor may order such insurance and charge the cost thereof to Lessee, which
      amount shall be payable by Lessee to Lessor upon demand. Such policies shall
      be
      for a term of at least one year, or the length of the remaining term of this
      Lease, whichever is less. If either Party shall fail to procure and maintain
      the
      insurance required to be carried by it, the other Party may, but shall not
      be
      required to, procure and maintain the same.

     

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

     

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

    8.8           Exemption
      of Lessor and its
      Agents from Liability. Notwithstanding
      the negligence or
      breach of this Lease by Lessor or its agents, neither Lessor nor its agents
      shall be liable under any circumstances for: (i) injury or damage to the person
      or goods, wares, merchandise or other property of Lessee, Lessee's employees,
      contractors, invitees, customers, or any other person in or about the Premises,
      whether such damage or injury is caused by or results from fire, steam,
      electricity, gas, water or rain, indoor air quality, the presence of mold or
      from the breakage, leakage, obstruction or other defects of pipes, fire
      sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from
      any
      other cause, whether the said injury or damage results from conditions arising
      upon the Premises or upon other portions of the building of which the Premises
      are a part, or from other sources or places, (ii) any damages arising from
      any
      act or neglect of any other tenant of Lessor or from the failure of Lessor
      or
      its agents to enforce the provisions of any other lease in the Project, or
      (iii)
      injury to Lessee's business or for any loss of income or profit therefrom.
      Instead, it is intended that Lessee's sole recourse in the event of such damages
      or injury be to file a claim on the insurance policy(ies) that Lessee is
      required to maintain pursuant to the provisions of paragraph
      8.

    8.9           Failure
      to Provide Insurance. Lessee acknowledges that any failure on its part
      to obtain or maintain the insurance required herein will expose Lessor to risks
      and potentially cause Lessor to incur costs not contemplated by this Lease,
      the
      extent of which will be extremely difficult to ascertain. Accordingly, for
      any
      month or portion thereof that Lessee does not maintain the required insurance
      and/or does not provide Lessor with the required binders or certificates
      evidencing the existence of the required insurance, the Base Rent shall be
      automatically increased, without any requirement for notice to Lessee, by an
      amount equal to 10% of the then existing Base Rent or $100, whichever is
      greater. The parties agree that such increase in Base Rent represents fair
      and
      reasonable compensation for the additional risk/costs that Lessor will incur
      by
      reason of Lessee's failure to maintain the required insurance. Such increase
      in
      Base Rent shall in no event constitute a waiver of Lessee's Default or Breach
      with respect to the failure to maintain such insurance, prevent the exercise
      of
      any of the other rights and remedies granted hereunder, nor relieve Lessee
      of
      its obligation to maintain the insurance specified in this Lease.

    

     

    9.           Damage
      or Destruction.

     

    9.1           Definitions.

     

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

     

    Alterations
      and Utility Installations, which can reasonably be repaired in 6 months or
      less
      from the date of the damage or destruction. Lessor shall notify

    

    

     

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      ASSOCIATION                                                                                                                                        FORM
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    Lessee
      in
      writing within 30 days from the date of the damage or destruction as to whether
      or not the damage is Partial or Total. Notwithstanding the foregoing, Premises
      Partial Damage shall not include damage to windows, doors, and/or other similar
      items which Lessee has the responsibility to repair or replace pursuant to
      the
      provisions of Paragraph 7.1.

     

    (b)
      "Premises Total Destruction" shall mean damage or destruction to the
      Premises, other than Lessee Owned Alterations and Utility Installations and
      Trade Fixtures, which cannot reasonably be repaired in 6 months or less from
      the
      date of the damage or destruction. Lessor shall notify Lessee in writing within
      30 days from the date of the damage or destruction as to whether or not the
      damage is Partial or Total.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    9.6           Abatement
      of Rent; Lessee's Remedies.

     

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

     

    (b)
      Remedies. If Lessor is obligated to repair or restore the Premises and
      does not commence, in a substantial and meaningful way, such repair or
      restoration within 90 days after such obligation shall accrue, Lessee may,
      at
      any time prior to the commencement of such repair or restoration, give written
      notice to Lessor and to any Lenders of which Lessee has actual notice, of
      Lessee's election to terminate this Lease on a date not less than 60 days
      following the giving of such notice. If Lessee gives such notice and such repair
      or restoration is not commenced within 30 days

    

    

     

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    thereafter,
      this Lease shall terminate as of the date specified in said notice. If the
      repair or restoration is commenced within such 30 days, this Lease shall
      continue in full force and effect. "Commence" shall mean either the
      unconditional authorization of the preparation of the required plans, or the
      beginning of the actual work on the Premises, whichever first
      occurs.

     

    9.7           Termination;
      Advance Payments. Upon termination of this Lease pursuant to Paragraph
      6.2(g) or Paragraph 9, an equitable

     

    adjustment
      shall be made concerning advance Base Rent and any other advance payments made
      by Lessee to Lessor. Lessor shall, in addition, return

     

    to
      Lessee
      so much of Lessee's Security Deposit as has not been, or is not then required
      to
      be, used by Lessor.

    

     

    10.           Real
      Property Taxes.

     

    10.1           Definition.
      As used herein, the term "Real Property Taxes" shall include any form
      of assessment; real estate, general, special,

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

     

    10.2           Payment
      of Taxes. In addition to Base Rent, Lessee shall pay to Lessor an
      amount equal to the Real Property Tax installment due at least 20 days prior
      to
      the applicable delinquency date. If any such installment shall cover any period
      of time prior to or after the expiration or termination of this Lease, Lessee's
      share of such installment shall be prorated. In the event Lessee incurs a late
      charge on any Rent payment, Lessor may estimate the current Real Property Taxes,
      and require that such taxes be paid in advance to Lessor by Lessee monthly
      in
      advance with the payment of the Base Rent. Such monthly payments shall be an
      amount equal to the amount of the estimated installment of taxes divided by
      the
      number of months remaining before the month in which said installment becomes
      delinquent. When the actual amount of the applicable tax bill is known, the
      amount of such equal monthly advance payments shall be adjusted as required
      to
      provide the funds needed to pay the applicable taxes. If the amount collected
      by
      Lessor is insufficient to pay such Real Property Taxes when due, Lessee shall
      pay Lessor, upon demand, such additional sum as is necessary. Advance payments
      may be intermingled with other moneys of Lessor and shall not bear interest.
      In
      the event of a Breach by Lessee in the performance of its obligations under
      this
      Lease, then any such advance payments may be treated by Lessor as an additional
      Security Deposit.

     

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

     

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

    

     

    11.           Utilities
      and Services. Lessee shall pay for all water, gas, heat, light, power,
      telephone, trash disposal and other utilities and services supplied to the
      Premises, together with any taxes thereon. If any such services are not
      separately metered or billed to Lessee, Lessee shall pay a reasonable
      proportion, to be determined by Lessor, of all charges jointly metered or
      billed. There shall be no abatement of rent and Lessor shall not be liable
      in
      any respect whatsoever for the inadequacy, stoppage, interruption or
      discontinuance of any utility or service due to riot, strike, labor dispute,
      breakdown, accident, repair or other cause beyond Lessor's reasonable control
      or
      in cooperation with governmental request or directions.

    

     

    12.           Assignment
      and Subletting.

     

    12.1           Lessor's
      Consent Required.

     

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

     

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

     

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

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

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

    f)
      Lessor may reasonably withhold
      consent to a proposed assignment or subletting if Lessee is in Default at the
      time consent is

     requested.

     

    (g)
      Notwithstanding the foregoing, allowing a de minimis portion of the Premises,
      ie. 20 square feet or less, to be used by a third

    

    

     

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    party
      vendor in connection with the installation of a vending machine or payphone
      shall not constitute a subletting.

     

    12.2           Terms
      and Conditions Applicable to Assignment and Subletting.

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

     

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

     

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

     

    (d)
      In the event of any Default or
      Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors
      or
      anyone else

     

     responsible
      for the performance of Lessee's obligations under this Lease, including any
      assignee or sublessee, without first exhausting Lessor's remedies against any
      other person or entity responsible therefor to Lessor, or any security held
      by
      Lessor.

     

    (e)
      Each
      request for consent to an assignment or subletting shall be in writing,
      accompanied by information relevant to Lessor's determination as to the
      financial and operational responsibility and appropriateness of the proposed
      assignee or sublessee, including but not limited to the intended use and/or
      required modification of the Premises, if any, together with a fee of $500
      as
      consideration for Lessor's considering and processing said request. Lessee
      agrees to provide Lessor with such other or additional information and/or
      documentation as may be reasonably requested. (See also Paragraph
      36)

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (e)
      Lessor shall deliver a copy of any
      notice of Default or Breach by Lessee to the sublessee, who shall have the
      right
      to cure the

     

     Default
      of Lessee within the grace period, if any, specified in such notice. The
      sublessee shall have a right of reimbursement and offset from and against Lessee
      for any such Defaults cured by the sublessee.

    

     

    13.           Default;
      Breach; Remedies.

     

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

     

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

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

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

     

    (c)
      The
      commission of waste, act or acts constituting public or private nuisance, and/or
      an illegal activity on the Premises by Lessee, where such actions continue
      for a
      period of 3 business 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, (v) a
      requested subordination, (vi) evidence concerning any guaranty and/or Guarantor,
      (vii) any document requested under Paragraph 42, (viii) material safety data
      sheets (MSDS), or (ix) any other documentation or information which Lessor
      may
      reasonably require of Lessee under the terms of this Lease, where any such
      failure continues for a period of 10 days following written notice to
      Lessee.

    (e)
      A
      Default by Lessee as to the terms, covenants, conditions or provisions of this
      Lease, or of the rules adopted under Paragraph 40 hereof, other than those
      described in subparagraphs 13.1(a), (b), (c) or (d), above, where such Default
      continues for a period of 30 days after written notice; provided, however,
      that
      if the nature of Lessee's Default is such that more than 30 days are reasonably
      required for its cure, then it shall not be deemed to be a Breach if Lessee
      commences such cure within said 30 day period and thereafter diligently
      prosecutes such cure to completion.

    

    

     

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

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

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

     

    13.2           Remedies.
      If Lessee fails to perform any of its affirmative duties or
      obligations, within 10 days after written notice (or in case of an emergency,
      without notice), Lessor may, at its option, perform such duty or obligation
      on
      Lessee's behalf, including but not limited to the obtaining of reasonably
      required bonds, insurance policies, or governmental licenses, permits or
      approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs
      and
      expenses incurred by Lessor in such performance upon receipt of an invoice
      therefor. In the event of a Breach, Lessor may, with or without further notice
      or demand, and without limiting Lessor in the exercise of any right or remedy
      which Lessor may have by reason of such Breach:

     

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

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

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

     

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

     

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

     

    13.5           Interest.
      Any monetary payment due Lessor hereunder, other than late charges,
      not
      received by Lessor, when due as to scheduled payments (such as Base Rent) or
      within 30 days following the date on which it was due for non-scheduled payment,
      shall bear interest from the date when due, as to scheduled payments, or the
      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

    

    

     

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    charge
      provided for in Paragraph 13.4.

     

    13.6           Breach
      by Lessor.

     

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

     

    (b)
      Performance by Lessee on Behalf of Lessor. In the event that neither
      Lessor nor Lender cures said breach within 30 days after receipt of said notice,
      or if having commenced said cure they do not diligently pursue it to completion,
      then Lessee may elect to cure said breach at Lessee's expense and offset from
      Rent the actual and reasonable cost to perform such cure, provided, however,
      that such offset shall not exceed an amount equal to the greater of one month's
      Base Rent or the Security Deposit, reserving Lessee's right to seek
      reimbursement from Lessor for any such expense in excess of such offset. Lessee
      shall document the cost of said cure and supply said documentation to
      Lessor.

    

     

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

    

     

    15.           Brokerage
      Fees.

     

    15.1           Additional
      Commission. In addition to the payments owed pursuant to Paragraph 1.9
      above, and unless Lessor and the Brokers

    otherwise
      agree in writing, Lessor agrees
      that:                                                                (a)
      if Lessee exercises any Option, (b) if Lessee or anyone affiliated with Lessee
      acquires any rights to the Premises or other premises owned by Lessor and
      located within the same Project, if any, within which the Premises is located,
      (c) if Lessee remains in possession of the Premises, with the consent of Lessor,
      after the expiration of this Lease, or (d) if Base Rent is increased, whether
      by
      agreement or operation of an escalation clause herein, then, Lessor shall pay
      Brokers a fee in accordance with the schedule of the Brokers in effect at the
      time of the execution of this Lease.

     

    15.2           Assumption
      of Obligations. Any buyer or transferee of Lessor's interest in this
      Lease shall be deemed to have assumed Lessor's obligation hereunder. Brokers
      shall be third party beneficiaries of the provisions of Paragraphs 1.9, 15,
      22
      and 31. If Lessor fails to pay to Brokers any amounts due as and for brokerage
      fees pertaining to this Lease when due, then such amounts shall accrue Interest.
      In addition, if Lessor fails to pay any amounts to Lessee's Broker when due,
      Lessee's Broker may send written notice to Lessor and Lessee of such failure
      and
      if Lessor fails to pay such amounts within 10 days after said notice, Lessee
      shall pay said monies to its Broker and offset such amounts against Rent. In
      addition, Lessee's Broker shall be deemed to be a third party beneficiary of
      any
      commission agreement entered into by and/or between Lessor and Lessor's Broker
      for the limited purpose of collecting any brokerage fee owed.

     

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

    

     

    16.           Estoppel
      Certificates.

     

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

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

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

    

    

    

     

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    17.           Definition
      of Lessor. The term "Lessor" as used herein shall mean
      the owner or owners at the time in question of the fee title to the

    Premises,
      or, if this is a sublease, of the Lessee's interest in the prior lease. In
      the
      event of a transfer of Lessor's title or interest in the Premises or this Lease,
      Lessor shall deliver to the transferee or assignee (in cash or by credit) any
      unused Security Deposit held by Lessor. Upon such transfer or assignment and
      delivery of the Security Deposit, as aforesaid, the prior Lessor shall be
      relieved of all liability with respect to the obligations and/or covenants
      under
      this Lease thereafter to be performed by the Lessor. Subject to the foregoing,
      the obligations and/or covenants in this Lease to be performed by the Lessor
      shall be binding only upon the Lessor as hereinabove defined.

    

     

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

     

    of
      any
      other provision hereof.

    

     

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

    

     

    20.           Limitation
      on Liability. The obligations of Lessor under this Lease shall not
      constitute personal obligations of Lessor or its partners,

     

    members,
      directors, officers or shareholders, and Lessee shall look to the Premises,
      and
      to no other assets of Lessor, for the satisfaction of any liability

     

    of
      Lessor
      with respect to this Lease, and shall not seek recourse against Lessor's
      partners, members, directors, officers or shareholders, or any of
      their

     

    personal
      assets for such satisfaction.

    

     

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

     

    this
      Lease.

    

     

    22.           No
      Prior or Other Agreements; Broker Disclaimer. This Lease contains all
      agreements between the Parties with respect to any matter mentioned herein,
      and
      no other prior or contemporaneous agreement or understanding shall be effective.
      Lessor and Lessee each represents and warrants to the Brokers that it has made,
      and is relying solely upon, its own investigation as to the nature, quality,
      character and financial responsibility of the other Party to this Lease and
      as
      to the use, nature, quality and character of the Premises. Brokers have no
      responsibility with respect thereto or with respect to any default or breach
      hereof by either Party.

    

     

    23.           Notices.

     

    23.1           Notice
      Requirements. All notices required or permitted by this Lease or
      applicable law shall be in writing and may be delivered in

    person
      (by hand or by courier) or may be sent by regular, certified or registered
      mail
      or U.S. Postal Service Express Mail, with postage prepaid, or by

    facsimile
      transmission, and shall be deemed sufficiently given if served in a manner
      specified in this Paragraph 23. The addresses noted adjacent to a

    Party's
      signature on this Lease shall be that Party's address for delivery or mailing
      of
      notices. Either Party may by written notice to the other specify a

    different
      address for notice, except that upon Lessee's taking possession of the Premises,
      the Premises shall constitute Lessee's address for notice. A

    copy
      of
      all notices to Lessor shall be concurrently transmitted to such party or parties
      at such addresses as Lessor may from time to time hereafter

    designate
      in writing.

     

    23.2           Date
      of Notice. Any notice sent by registered or certified mail, return
      receipt requested, shall be deemed given on the date of delivery
      shown on the receipt card, or if no delivery date is shown, the postmark
      thereon. If sent by regular mail the notice shall be deemed given 72
hours
      after the same is addressed as required herein and mailed with postage prepaid.
      Notices delivered by United States Express Mail or overnight courier
      that guarantee next day delivery shall be deemed given 24 hours after delivery
      of the same to the Postal Service or courier. Notices transmitted by
      facsimile transmission or similar means shall be deemed delivered upon telephone
      confirmation of receipt (confirmation report from fax machine is sufficient),
      provided a copy is also delivered via delivery or mail. If notice is received
      on
      a Saturday, Sunday or legal holiday, it shall be deemed received on
      the
      next business day.

    

     

    24.           Waivers.

     

    (a)           No
      waiver by Lessor of the Default or Breach of any term, covenant or condition
      hereof by Lessee, shall be deemed a

    waiver
      of
      any other term, covenant or condition hereof, or of any subsequent Default
      or
      Breach by Lessee of the same or of any other term, covenant or condition hereof.
      Lessor's consent to, or approval of, any act shall not be deemed to render
      unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent
      or similar act by Lessee, or be construed as the basis of an estoppel to enforce
      the provision or provisions of this Lease requiring such consent.

     

    (b)           The
      acceptance of Rent by Lessor shall not be a waiver of any Default or Breach
      by
      Lessee. Any payment by Lessee may be accepted by Lessor on account of moneys
      or
      damages due Lessor, notwithstanding any qualifying statements or conditions
      made
      by Lessee in connection therewith, which such statements and/or conditions
      shall
      be of no force or effect whatsoever unless specifically agreed to in writing
      by
      Lessor at or before the time of deposit of such payment.

     

    (c)           THE
      PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL
      MATTERS

     

    RELATED
      THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO
      THE
      EXTENT THAT SUCH

     

    STATUTE
      IS INCONSISTENT WITH THIS LEASE.

    

     

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

     

    (a)           When
      entering into a discussion with a real estate agent regarding a real estate
      transaction, a Lessor or Lessee should

     

    from
      the
      outset understand what type of agency relationship or representation it has
      with
      the agent or agents in the transaction. Lessor and Lessee acknowledge being
      advised by the Brokers in this transaction, as follows:

     

    (i)           Lessor's
      Agent. A Lessor's agent under a listing agreement with the Lessor acts
      as the agent for the Lessor

    only.
      A
      Lessor's agent or subagent has the following affirmative obligations: To the
      Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty in
      dealings with the Lessor. To the Lessee and the Lessor: a. Diligent exercise
      of
      reasonable skills and care in performance of the agent's duties. b. A duty
      of
      honest and fair dealing and good faith. c. A duty to disclose all facts known
      to
      the agent materially affecting the value or desirability of the property that
      are not known to, or within the diligent attention and observation of, the
      Parties. An agent is not obligated to reveal to either Party

    

    

     

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      STN-9-3/06E

     

     

     

    any
      confidential information obtained from the other Party which does not involve
      the affirmative duties set forth above.

     

    (ii)
      Lessee's Agent.
An agent can agree to act as agent for the Lessee only. In these
      situations, the agent is not

     

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

     

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

     

    (b)           Brokers
      have no responsibility with respect to any default or breach hereof by either
      Party. The Parties agree that no lawsuit or other legal proceeding involving
      any
      breach of duty, error or omission relating to this Lease may be brought against
      Broker more than one year after the Start Date and that the liability (including
      court costs and attorneys' fees), of any Broker with respect to any such lawsuit
      and/or legal proceeding shall not exceed the fee received by such Broker
      pursuant to this Lease; provided, however, that the foregoing limitation on
      each
      Broker's liability shall not be applicable to any gross negligence or willful
      misconduct of such Broker.

     

    (c)           Lessor
      and Lessee agree to identify to Brokers as "Confidential" any communication
      or
      information given Brokers that is

     

    considered
      by such Party to be confidential.

    

     

    26.           No
      Right To Holdover. Lessee has no right to retain possession of the
      Premises or any part thereof beyond the expiration or termination
      of

     

    this
      Lease. In the event that Lessee holds over, then the Base Rent shall be
      increased to 150% of the Base Rent applicable immediately preceding
      the

     

    expiration
      or termination. Nothing contained herein shall be construed as consent by Lessor
      to any holding over by Lessee.

    

     

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

     

    remedies
      at law or in equity.

    

     

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

    

     

    29.           Binding
      Effect; Choice of Law. This Lease shall be binding upon the Parties,
      their personal representatives, successors and assigns and be

     

    governed
      by the laws of the State in which the Premises are located. Any litigation
      between the Parties hereto concerning this Lease shall be initiated
      in

     

    the
      county in which the Premises are located.

    

     

    30.           Subordination;
      Attornment; Non-Disturbance.

     

    30.1           Subordination.
      This Lease and any Option granted hereby shall be subject and
      subordinate to any ground lease, mortgage, deed

     

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

     

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

    30.3           Non-Disturbance.
      With respect to Security Devices entered into by Lessor after the
      execution of this Lease, Lessee's

    subordination
      of this Lease shall be subject to receiving a commercially reasonable
      non-disturbance agreement (a "Non-Disturbance Agreement")

    from
      the
      Lender which Non-Disturbance Agreement provides that Lessee's possession of
      the
      Premises, and this Lease, including any options to extend

    the
      term
      hereof, will not be disturbed so long as Lessee is not in Breach hereof and
      attorns to the record owner of the Premises. Further, within 60
      days

    after
      the
      execution of this Lease, Lessor shall, if requested by Lessee, use its
      commercially reasonable efforts to obtain a Non-Disturbance
      Agreement

    from
      the
      holder of any pre-existing Security Device which is secured by the Premises.
      In
      the event that Lessor is unable to provide the Non-Disturbance

    Agreement
      within said 60 days, then Lessee may, at Lessee's option, directly contact
      Lender and attempt to negotiate for the execution and delivery of a

    Non-Disturbance
      Agreement.

     

    30.4           Self-Executing.
      The agreements contained in this Paragraph 30 shall be effective
      without the execution of any further documents;

    

    

     

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    provided,
      however, that, upon written request from Lessor or a Lender in connection with
      a
      sale, financing or refinancing of the Premises, Lessee and Lessor shall execute
      such further writings as may be reasonably required to separately document
      any
      subordination, attornment and/or Non-Disturbance Agreement provided for
      herein.

    

     

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

    

     

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

    

     

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

    

     

    34.           Signs.
      Lessor may place on the Premises ordinary "For Sale" signs at any
      time
      and ordinary "For Lease" signs during the last 6 months of the term hereof.
      Except for ordinary "for sublease" signs, Lessee shall not place any sign upon
      the Premises without Lessor's prior written consent. All signs must comply
      with
      all Applicable Requirements.

    

     

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

    

     

    36.           Consents.
      Except as otherwise provided herein, wherever in this Lease the consent
      of a Party is required to an act by or for the other Party, such
      consent shall not be unreasonably withheld or delayed. Lessor's actual
      reasonable costs and expenses (including but not limited to architects',
attorneys',
      engineers' and other consultants' fees) incurred in the consideration of, or
      response to, a request by Lessee for any Lessor consent, including but
      not
      limited to consents to an assignment, a subletting or the presence or use of
      a
      Hazardous Substance, shall be paid by Lessee upon receipt of an invoice
      and supporting documentation therefor. Lessor's consent to any act, assignment
      or subletting shall not constitute an acknowledgment that no Default
      or Breach by Lessee of this Lease exists, nor shall such consent be deemed
      a
      waiver of any then existing Default or Breach, except as may be otherwise
      specifically stated in writing by Lessor at the time of such consent. The
      failure to specify herein any particular condition to Lessor's consent
shall
      not
      preclude the imposition by Lessor at the time of consent of such further or
      other conditions as are then reasonable with reference to the particular
      matter for which consent is being given. In the event that either Party
      disagrees with any determination made by the other hereunder and reasonably
      requests the reasons for such determination, the determining party shall furnish
      its reasons in writing and in reasonable detail within 10 business
      days following such request.

    

     

    37.           Guarantor.

     

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

     

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

     

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

    

     

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

    

     

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

     

    39.1           Definition.
      "Option" shall
      mean:                                                      (a)
      the right to extend the term of or renew this Lease or to extend or renew any
      lease that

    Lessee
      has on other property of Lessor; (b) the right of first refusal or first offer
      to lease either the Premises or other property of Lessor; (c) the right to
      purchase or the right of first refusal to purchase the Premises or other
      property of Lessor.

     

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

     

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

     

    exercised
      unless the prior Options have been validly exercised.

    

    

     

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      STN-9-3/06E

     

    

     

    39.4           Effect
      of Default on Options.

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

     

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

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

    

     

    40.           Multiple
      Buildings. If the Premises are a part of a group of buildings
      controlled by Lessor, Lessee agrees that it will abide by and conform to all
      reasonable rules and regulations which Lessor may make from time to time for
      the
      management, safety, and care of said properties, including the care and
      cleanliness of the grounds and including the parking, loading and unloading
      of
      vehicles, and to cause its employees, suppliers, shippers, customers,
      contractors and invitees to so abide and conform. Lessee also agrees to pay
      its
      fair share of common expenses incurred in connection with such rules and
      regulations.

    

     

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

    

     

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

    

     

    43.           Performance
      Under Protest. If at any time a dispute shall arise as to any amount or
      sum of money to be paid by one Party to the other under the provisions hereof,
      the Party against whom the obligation to pay the money is asserted shall have
      the right to make payment "under protest" and such payment shall not be regarded
      as a voluntary payment and there shall survive the right on the part of said
      Party to institute suit for recovery of such sum. If it shall be adjudged that
      there was no legal obligation on the part of said Party to pay such sum or
      any
      part thereof, said Party shall be entitled to recover such sum or so much
      thereof as it was not legally required to pay. A Party who does not initiate
      suit for the recovery of sums paid "under protest" with 6 months shall be deemed
      to have waived its right to protest such payment.

    

     

    44.           Authority;
      Multiple Parties; Execution.

     

    (a)           If
      either Party hereto is a corporation, trust, limited liability company,
      partnership, or similar entity, each individual

     

    executing
      this Lease on behalf of such entity represents and warrants that he or she
      is
      duly authorized to execute and deliver this Lease on its behalf. Each Party
      shall, within 30 days after request, deliver to the other Party satisfactory
      evidence of such authority.

    (b)           If
      this Lease is executed by more than one person or entity as "Lessee", each
      such
      person or entity shall be jointly and

    severally
      liable hereunder. It is agreed that any one of the named Lessees shall be
      empowered to execute any amendment to this Lease, or other

    document
      ancillary thereto and bind all of the named Lessees, and Lessor may rely on
      the
      same as if all of the named Lessees had executed such

    document.

     

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

    

     

    49.           Mediation
      and Arbitration of Disputes. An Addendum requiring the Mediation and/or
      the Arbitration of all disputes between the Parties

     

    and/or
      Brokers arising out of this Lease  is

      is not
      attached to this Lease.

     

    50.           Americans
      with Disabilities Act. Since compliance with the Americans with
      Disabilities Act (ADA) is dependent upon Lessee's specific use of the Premises,
      Lessor makes no warranty or representation as to whether or not the Premises
      comply with ADA or any similar legislation. In the event that Lessee's use
      of
      the Premises requires modifications or additions to the Premises in order to
      be
      in ADA compliance, Lessee agrees to make any such necessary modifications and/or
      additions at Lessee's expense.

    

    

    

     

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      ASSOCIATION                                                                                                                                        FORM
      STN-9-3/06E

    

    

     

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

    

     

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

    

     

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

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

    

     

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

    

    

    

     

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

    

     

    Executed
      at:    El
      Segundo ,
      California                                 Executed
      at:    El
      Segundo             ,
      California

     

    On:             October
      29,
      2007                                          On:        October
      29  , 2007

    

     

    By
      LESSOR:                                                                                By
      LESSEE:

     

    Dominguez
      Channel,
      LLC                                                                                
En Pointe Technologies, Inc.

    

    

    

     

    By:   /s/ 
      Attiazaz ("Bob")
      Din                                                       By:  
/s/ Timothy J. Lilligren

     

    Name
      Printed:  Attiazaz
      ("Bob") Din          
                
              Name
      Printed:  Timothy J. Lilligren

     

    Title:      Manager                                                                           
      Title:  Director

     

    By:    ________________       
                                                          By: 
________________________

     

    Name
      Printed:   _______________                                            Name
      Printed:  ________________

     

    Title:    __________________                                                    Title: 
      _______________________

     

    Address:    _________________                                                  Address: 
      ____________________

    

     

    Telephone:(                                                                                )                   Telephone:(                              )

     

    Facsimile:(                                                                                )                 Facsimile:(                     )

     

    Federal
      ID No. 26-0448310                                                                                Federal
      ID No.  _____________

    

     

    BROKER:   ___________________                                              BROKER: 
      ________________________

    

     

    

     

    Attn:                                                                                Attn:

     

    Title:                                                                                Title:

     

    Address:                                                                                Address:

    

     

    Telephone:(                                                                                )                   Telephone:(                              )

     

    Facsimile:(                                                                                )                 Facsimile:(                     )

     

     

    Federal
      ID
      No.                                                                                Federal
      ID No.

     

     

    NOTICE:
      These forms are often modified to meet changing requirements of law and industry
      needs. Always write or call to make sure you are utilizing the most current
      form: AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800,
      Los
      Angeles, CA 90017. Telephone No. (213) 687-8777. Fax No.: (213)
      687-8616.

     

    ©
      Copyright 2001 - By AIR Commercial Real Estate Association. All rights reserved.
      No part of these works may be reproduced in any form without permission in
      writing.

    

    

    

    

    

    

    

    

    

    

    

    

    

     

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      - AIR COMMERCIAL REAL ESTATE
      ASSOCIATION                                                                                                                                        FORM
      STN-9-3/06E

    

    

    

    

    

    

    

     

    RENT
      ADJUSTMENT(S)

     

    STANDARD
      LEASE ADDENDUM

    

     

    Dated 
      _______________________________________

     

    By
      and Between
      (Lessor)  Dominguez
      Channel
      LLC

    

    

    

     

    (Lessee)  En
      Pointe
      Technologies Sales, Inc.

    

    

     

    Address
      of Premises: 18701
      S.
      Figueroa St.

     

    Carson,
      CA

    

     

    Paragraph

    

     

    A.           RENT
      ADJUSTMENTS:

     

    The
      monthly rent for each month of the adjustment period(s) specified below shall
      be
      increased using the method(s) indicated below: (Check Method(s) to be Used
      and
      Fill in Appropriately)

     

     o     I.                      
      Cost of Living Adjustment(s) (COLA)

     

    a.      On
      (Fill in COLA Dates):

     

    the
      Base
      Rent shall be adjusted by the change, if any, from the Base Month specified
      below, in the Consumer Price Index of the Bureau of Labor Statistics of the
      U.S.
      Department of Labor for (select one): CPI W (Urban Wage Earners
      and Clerical Workers) or  CPI
      U (All Urban
      Consumers), for (Fill in Urban Area):

    

    

     

    ,
      All Items

     

    (1982-1984
      = 100), herein referred to as "CPI".

    

     

    b.
      The
      monthly rent payable in accordance with paragraph A.I.a. of this Addendum shall
      be calculated as follows: the Base Rent set forth in

     

    paragraph
      1.5 of the attached Lease, shall be multiplied by a fraction the numerator
      of
      which shall be the CPI of the calendar month 2 months prior to the

     

    month(s)
      specified in paragraph A.I.a. above during which the adjustment is to take
      effect, and the denominator of which shall be the CPI of the
      calendar

     

    month
      which is 2 months prior to (select one): the first month of the
      term of this Lease as set forth in paragraph 1.3 ("Base Month") or(Fill in

    Other
      "Base
      Month"):                                                                                                                     .
      The sum so calculated shall constitute

     

    the
      new
      monthly rent hereunder, but in no event, shall any such new monthly rent be
      less
      than the rent payable for the month immediately preceding the rent
      adjustment.

     

    c.      In
      the event the compilation and/or publication of the CPI shall be transferred
      to
      any other governmental department or bureau or agency or shall be discontinued,
      then the index most nearly the same as the CPI shall be used to make such
      calculation. In the event that the Parties cannot agree on such alternative
      index, then the matter shall be submitted for decision to the American
      Arbitration Association in accordance with the then rules of said Association
      and the decision of the arbitrators shall be binding upon the parties. The
      cost
      of said Arbitration shall be paid equally by the Parties.

    

     

    o  II.                      Market
      Rental Value Adjustment(s) (MRV)

    a.
      On (Fill in MRV Adjustment Date(s):

    

    

     

    the
      Base
      Rent shall be adjusted to the "Market Rental Value" of the property as
      follows:

     

    1)
      Four
      months prior to each Market Rental Value Adjustment Date described above, the
      Parties shall attempt to agree upon what the new MRV will be on the adjustment
      date. If agreement cannot be reached within thirty days, then:

    

     

    (a)
      Lessor and Lessee shall immediately appoint a mutually acceptable appraiser
      or
      broker to establish the new MRV within the next 30 days. Any associated costs
      will be split equally between the Parties, or

    

    (b)
      Both
      Lessor and Lessee shall each immediately make a reasonable determination of
      the
      MRV and submit such determination, in writing, to arbitration in accordance
      with
      the following provisions:

    (i)
      Within 15 days thereafter, Lessor and Lessee shall each select an appraiser or broker
      ("Consultant" check one) of
      their choice to act as an arbitrator. The two arbitrators so appointed shall
      immediately select a third mutually acceptable Consultant to act as a third
      arbitrator.

    

     

    (ii)
      The
      3 arbitrators shall within 30 days of the appointment of the third arbitrator
      reach a decision as to what the actual MRV for the Premises is, and whether
      Lessor's or Lessee's submitted MRV is the closest thereto. The decision of
      a
      majority of the arbitrators shall be binding on the Parties. The submitted
      MRV
      which is determined to be the closest to the actual MRV shall thereafter be
      used
      by the Parties.

    

    

    

     

    PAGE
      1 OF 2

    

                                                            TJL 

    INITIALS                                                                                                                                                  INITIALS

    

     

    ©2000
      - AIR COMMERCIAL REAL ESTATE
      ASSOCIATION                                                                                                                         FORM
      RA-3-8/00E

     

     

    

     

    (iii)
      If
      either of the Parties fails to appoint an arbitrator within the specified 15
      days, the arbitrator timely appointed by one of them shall reach a decision
      on
      his or her own, and said decision shall be binding on the Parties.

    

     

    (iv)
      The
      entire cost of such arbitration shall be paid by the party whose submitted
      MRV
      is not selected, i.e., the one that is NOT the closest to the actual
      MRV.

     

    2)
      Notwithstanding the foregoing, the new MRV shall not be less than the rent
      payable for the month immediately preceding the
      rent adjustment.

     

    b.
      Upon
      the establishment of each New Market Rental Value:

    1)
      the
      new MRV will become the new "Base Rent" for the purpose of calculating any
      further Adjustments, and

    2)
      the
      first month of each Market Rental Value term shall become the new 'Base Month'
      for the purpose of calculating any further Adjustments.

    

     

    þ     III.                      Fixed
      Rental Adjustment(s) (FRA)

     

    The
      Base
      Rent shall be increased to the following amounts on the dates set forth
      below:

     

    On
      (Fill in FRA Adjustment
      Date(s)):                                                                                The
      New Base Rent shall be:

     

            each
      November
      1                                                                                            3%
      above prior
      year

    

    

     

    B.           NOTICE:

     

    Unless
      specified otherwise herein, notice of any such adjustments, other than Fixed
      Rental Adjustments, shall be made as specified in paragraph 23 of the
      Lease.

    

     

    C.           BROKER'S
      FEE:

    The
      Brokers shall be paid a Brokerage Fee for each adjustment specified above in
      accordance with paragraph 15 of the Lease.

    

     

    NOTICE:
      These forms are often modified to meet changing requirements of law and industry
      needs. Always write or call to make sure you are utilizing the most current
      form: AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800,
      Los
      Angeles, CA 90017. Telephone No. (213) 687-8777. Fax No.: (213)
      687-8616.

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

     

    PAGE
      2 OF 2

    

                                                            TJL 

    INITIALS                                                                                                                                                  INITIALS

    

     

    ©2000
      - AIR COMMERCIAL REAL ESTATE
      ASSOCIATION                                                                                                                         FORM
      RA-3-8/00E

    

    

    

    

    

    

    

     

    OPTION(S)
      TO EXTEND

     

    STANDARD
      LEASE ADDENDUM

     

    Dated 
      ___________________________________

    By
      and Between (Lessor) Dominguez Channel,LLC

    By
      and Between
      (Lessee) En Pointe Technologies Sales, Inc.

    

    

    

     

    Address
      of
      Premises:
      18701
      Figueroa

     

    Carson,
      CA

    

     

    Paragraph

    

     

    A.
      OPTION(S) TO EXTEND:

    Lessor
      hereby grants to Lessee the
      option to extend the term of this Lease for  Two                                                                                                                          additional
60

     

    month
      period(s) commencing when the prior term expires upon each and all of the
      following terms and conditions:

     

    (i)      In
      order to exercise an option to extend, Lessee must give written notice of such
      election to Lessor and Lessor must receive the same at least three but
      not more than four months
      prior to the date
      that the option period would commence, time being of the essence. If proper
      notification of the exercise of an option is not given and/or received, such
      option shall automatically expire. Options (if there are more than one) may
      only
      be exercised consecutively.

     

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

     

    this
      Option.

     

    (iii)
      Except for the provisions of this Lease granting an option or options to extend
      the term, all of the terms and conditions of this Lease except where
      specifically modified by this option shall apply.

     

    (iv)
      This
      Option is personal to the original Lessee, and cannot be assigned or exercised
      by anyone other than said original Lessee and only while the original Lessee
      is
      in full possession of the Premises and without the intention of thereafter
      assigning or subletting.

     

    (v)
      The
      monthly rent for each month of the option period shall be calculated as follows,
      using the method(s) indicated below: (Check Method(s) to be Used and Fill in
      Appropriately)

    

     

     o 
       I.                                Cost
      of Living Adjustment(s) (COLA)

     

    a.      On
      (Fill in COLA Dates):

     

     

    the
      Base
      Rent shall be adjusted by the change, if any, from the Base Month specified
      below, in the Consumer Price Index of the Bureau of Labor Statistics of the
      U.S.
      Department of Labor for (select one): CPI
      W (Urban Wage Earners and
      Clerical Workers) or CPI
      U (All Urban Consumers),
      for (Fill in Urban Area):

     

    

     

    All
      Items
      (1982-1984 = 100), herein referred to as "CPI".

    

     

    b.      The
      monthly rent payable in accordance with paragraph A.I.a. of this Addendum shall
      be calculated as follows: the Base Rent set forth in paragraph 1.5 of the
      attached Lease, shall be multiplied by a fraction the numerator of which shall
      be the CPI of the calendar month 2 months prior to the month(s) specified in
      paragraph A.I.a. above during which the adjustment is to take effect, and the
      denominator of which shall be the CPI of the calendar

     

    month
      which is 2 months prior to (select one): the first month of the
      term of this Lease as set forth in paragraph 1.3 ("Base Month") or (Fill in

     

    Other
      "Base Month"):

    

     

    The
      sum
      so calculated shall constitute the new monthly rent hereunder, but in no event,
      shall any such new monthly rent be less than the rent payable for the month
      immediately preceding the rent adjustment.

     

    c.      In
      the event the compilation and/or publication of the CPI shall be transferred
      to
      any other governmental department or bureau or agency or shall be discontinued,
      then the index most nearly the same as the CPI shall be used to make such
      calculation. In the event that the Parties cannot agree on such alternative
      index, then the matter shall be submitted for decision to the American
      Arbitration Association in accordance with the then rules of said Association
      and the decision of the arbitrators shall be binding upon the parties. The
      cost
      of said Arbitration shall be paid equally by the Parties.

    

     

     o
      II.                                
Market Rental Value Adjustment(s) (MRV)

    a.      On
      (Fill in MRV Adjustment Date(s))

    

     

     

    the
      Base
      Rent shall be adjusted to the "Market Rental Value" of the property as
      follows:

     

    1)
      Four
      months prior to each Market Rental Value Adjustment Date described above, the
      Parties shall attempt to agree upon what the new MRV will be on the adjustment
      date. If agreement cannot be reached, within thirty days, then:

    

     

    (a)
      Lessor and Lessee shall immediately appoint a mutually acceptable appraiser
      or
      broker to establish the new MRV within the next 30 days. Any associated costs
      will be split equally between the Parties, or

    

     

    (b)
      Both
      Lessor and Lessee shall each immediately make a reasonable determination of
      the
      MRV and submit such determination, in writing, to arbitration in accordance
      with
      the following provisions:

    

     

    PAGE
      1 OF 2

    

                                                            TJL 

    INITIALS                                                                                                                                                  INITIALS

    

     

    ©2000
      - AIR COMMERCIAL REAL ESTATE
      ASSOCIATION                                                                                                                         FORM
      OE-3-8/00E

     

     

    

     

    (i)
      Within 15 days thereafter, Lessor and Lessee shall each select an  appraiser
      or  broker
      ("Consultant" - check one) of their choice to act as an arbitrator. The two
      arbitrators so appointed shall immediately select a third mutually acceptable
      Consultant to act as a third arbitrator.

     

    (ii)
      The
      3 arbitrators shall within 30 days of the appointment of the third arbitrator
      reach a decision as to what the actual MRV for the Premises is, and whether
      Lessor's or Lessee's submitted MRV is the closest thereto. The decision of
      a
      majority of the arbitrators shall be binding on the Parties. The submitted
      MRV
      which is determined to be the closest to the actual MRV shall thereafter be
      used
      by the Parties.

    

     

    (iii)
      If
      either of the Parties fails to appoint an arbitrator within the specified 15
      days, the arbitrator timely appointed by one of them shall reach a decision
      on
      his or her own, and said decision shall be binding on the Parties.

    

     

    (iv)
      The
      entire cost of such arbitration shall be paid by the party whose submitted
      MRV
      is not selected, ie. the one that is NOT the closest to the actual
      MRV.

    

     

    2)
      Notwithstanding the foregoing, the new MRV shall not be less than the rent
      payable for the month immediately preceding the rent adjustment.

    

     

    b.
      Upon
      the establishment of each New Market Rental Value:

     

    1)
      the
      new MRV will become the new "Base Rent" for the purpose of calculating any
      further Adjustments, and

     

    2)
      the first month of each Market
      Rental Value term shall become the new "Base Month" for the purpose of
      calculating any further

     

     Adjustments.

    

     

    þ         III.                      Fixed
      Rental Adjustment(s) (FRA)

     

    The
      Base
      Rent shall be increased to the following amounts on the dates set forth
      below:

     

    On
      (Fill in FRA Adjustment
      Date(s)):                                                                                     The
      New Base Rent shall be:

    

                                
      each November
      1                                                                                                                  
 3% above prior year

    

    

     

    

     

    B.
      NOTICE:

    Unless
      specified otherwise herein, notice of any rental adjustments, other than Fixed
      Rental Adjustments, shall be made as specified in paragraph 23 of the
      Lease.

    

     

    C.
      BROKER'S FEE:

    The
      Brokers shall be paid a Brokerage Fee for each adjustment specified above in
      accordance with paragraph 15 of the Lease.

    

     

    NOTICE:
      These forms are often modified to meet changing requirements of law
      and
      industry needs. Always write or call to make sure you are utilizing the most
      current form: AIR Commercial Real Estate Association, 800 W 6th Street, Suite
      800, Los Angeles, CA 90017. Telephone No. (213) 687-8777. Fax No.: (213)
      687-8616.

    

    

    

     

    

    

    

    

     

    PAGE
      2 OF 2

    

                                                            TJL 

    INITIALS                                                                                                                                                  INITIALS

    

     

    ©2000
      - AIR COMMERCIAL REAL ESTATE
      ASSOCIATION                                                                                                                         FORM
      OE-3-8/00E

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