Document:

Termination Agreement dated as of August 6, 2004

 Exhibit 10.31 
  

  
 TERMINATION AGREEMENT 
  
 dated as of August 6, 2004

  
 by and between 
  
 ENCORE CREDIT CORP. 
  
 and 
  
 RESIDENTIAL FUNDING CORPORATION 
  

 TERMINATION AGREEMENT 
  
 This TERMINATION AGREEMENT (this “Agreement”), dated as of August 6, 2004, is made and entered into by and
between Encore Credit Corp., a California corporation (“Encore”), and Residential Funding Corporation, a Delaware corporation (“GMAC-RFC”). 
  
 RECITALS 
  
 A. In March and April, 2004 Encore and GMAC-RFC entered into the following agreements: (i) a First Amended and Restated Warehousing Credit, Term Loan and
Security Agreement dated as of March 29, 2004 (as amended to date, the “Warehousing Agreement”), (ii) a Revolving Subordinated Debt Agreement dated as of March 29, 2004 (the “Subordinated Debt Agreement”), (iii) a
Loan Sale Commitment dated as of March 29, 2004 (the “Loan Sale Commitment”), (iv) a Shared Execution Mortgage Loan Purchase Agreement dated as of March 29, 2004 (the “Shared Execution Agreement”) (v) a Securities
Purchase Agreement dated as of March 24, 2004 (the “Securities Purchase Agreement”) and (vi) a letter dated March 29, 2004 regarding the potential for Encore to declare a “short-term event” and the consequences thereof
(the “Short-Term Event Letter”). 
  
 B. In
connection with the execution of the Warehousing Agreement, Steven Holder executed and delivered to GMAC-RFC a Guaranty of Steven Holder dated March 29, 2004 (the “Holder Guaranty”). 
  
 C. On April 6, 2004 (the “Investment Closing Date”), (i)
pursuant to the Subordinated Debt Agreement, Encore borrowed $2,000,000 from GMAC-RFC, (ii) pursuant to the Securities Purchase Agreement, (A) GMAC-RFC purchased 3,000,000 shares of Encore’s Series C Redeemable Preferred Stock (the
“Series C Preferred Stock”) and (B) Encore issued to GMAC-RFC (1) a Warrant dated April 6, 2004 covering the purchase of up to 3,816,317 shares of Encore’s common stock (the “10% Warrant”) and (2) a Warrant
dated April 6, 2004 covering the purchase of up to 2,244,892 shares of Encore’s common stock (the “5% Warrant”), (iii) Encore and GMAC-RFC entered into a Registration Rights Agreement dated April 6, 2004 (the
“Registration Rights Agreement”) and (iv) GMAC-RFC entered into a Co-Sale Agreement with Steven Holder and Shahid Ashgar dated April 6, 2004 (the “Co-Sale Agreement” and, together with the Warehousing Agreement, the
Subordinated Debt Agreement, the Loan Sale Commitment, the Shared Execution Agreement, the Securities Purchase Agreement, the Short-Term Event Letter, the Holder Guaranty and the Registration Rights Agreement, the “Existing
Agreements”). 
  
 D. Since the Investment Closing Date,
(i) Encore has declared a Short-Term Event (as defined in the Short-Term Event Letter) by means of a letter dated June 24, 2004 (the “Short-Term Event Declaration”), (ii) Encore has repaid all amounts outstanding under the
Subordinated Debt Agreement and (iii) the parties have held discussions regarding a potential restructuring or termination of their contractual relationships and GMAC-RFC’s equity interests in Encore. 
  

 E. Encore and GMAC-RFC wish to enter into this Agreement to specify the terms and conditions upon which
they have agreed to terminate their contractual relationships and GMAC-RFC’s equity interests in Encore (the “Encore Termination”). 
  
 AGREEMENT 
  
 NOW, THEREFORE, in consideration of the covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt
and adequacy of which the parties acknowledge, the parties, intending to be legally bound, agree as follows: 
  
 ARTICLE I 
 DEFINED TERMS AND CONSTRUCTION 
  
 Section 1.1 Defined Terms. Unless otherwise defined in this Agreement,
all capitalized terms have the meanings given to those terms in the Warehousing Agreement. 
  
 Section 1.2 Other Definitional Provisions. 
  
 (a) Defined terms may be used in the singular or the plural, as the context requires. 
  
 (b) References to Sections, Exhibits, Schedules and like
references are to Sections, Exhibits, Schedules and the like of this Agreement unless otherwise expressly provided. 
  
 (c) The words “include,” “includes” and “including” are deemed to be followed by the phrase “without
limitation.” 
  
 (d) Unless the context in
which it is used otherwise clearly requires, the word “or” has the inclusive meaning represented by the phrase “and/or.” 
  
 Section 1.3 No Strict Construction. The language used in this Agreement shall be deemed to be language chosen by the parties to express
their mutual intent and no rule of strict construction shall be applied against any party. 
  
 Section 1.4 Headings. The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 
  

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 ARTICLE II 
 TERMINATION TERMS AND CONDITIONS 
  
 Section 2.1 Termination Terms – Debt Facilities. Notwithstanding any provision of any of the Transaction Documents to the contrary, upon satisfaction of the conditions set forth in Section 2.4 below, the following terms
will apply to the referenced agreements: 
  
 (a)
Warehousing Agreement. (i) The Term Loan Commitment and the Premium Advance Commitment will be terminated, (ii) GMAC-RFC will have no obligation to make any Term Loan Advances or Premium Advances under the Warehousing Agreement, (iii)
the Term Loan Maturity Date and Premium Commitment Maturity Date will be deemed to have occurred, (iv) the Warehousing Commitment will remain in effect until September 3, 2004, (v) GMAC-RFC will continue to fund Warehousing Advances in accordance
with the terms of the Warehousing Agreement until September 3, 2004, (vi) the Warehousing Maturity Date will be November 5, 2004, (vii) GMAC-RFC waives any approval right it may have pursuant to Sections 8.3(b) or 8.4 of the Warehousing Agreement in
respect of actions that Encore may take in connection with a REIT conversion, and (viii) except as expressly modified in this Agreement, the Warehousing Agreement will remain in full force and effect in accordance with its terms. 

 
 (b) Subordinated Debt Agreement. (i)
The “Commitment” under and as defined in the Subordinated Debt Agreement will be terminated, (ii) the Subordinated Agreement will be terminated, (iii) GMAC-RFC will have no obligation to make any “Advances” under and as defined
in the Subordinated Debt Agreement and (iv) the “Maturity Date” under and as defined in the Subordinated Debt Agreement will be deemed to have occurred. 
  
 (c) Holder Guaranty. GMAC-RFC will release the Guarantor from the obligations under the
Holder Guaranty upon payment in full of all outstanding Warehousing Advances, and upon request of the Guarantor or Encore following payment in full of all outstanding Warehousing Advances, GMAC-RFC will execute documents evidencing such release.

  
 Section 2.2 Termination Terms – Loan Sale
Documents. 
  
 Notwithstanding any provision of any of the
Transaction Documents to the contrary, upon satisfaction of the conditions set forth in Section 2.4 below, the following terms will apply to the referenced agreements: 
  
 (a) Loan Sale Commitment. The Loan Sale Commitment will be terminated, Encore will have
no obligations to GMAC-RFC under the Loan Sale Commitment, including obligations to deliver any Mortgage Loans or pay any amounts to GMAC-RFC, and GMAC-RFC will have no obligations to Encore under the Loan Sale Commitment, including obligations to
purchase any Mortgage Loans from Encore. Notwithstanding anything in this Section 2.2, Encore’s obligations under the Client Contract (as defined in the Shared Execution Agreement) and the Client Guide (as defined in the Shared 

  

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Execution Agreement) will continue with respect to all Mortgage Loans sold to GMAC-RFC in April 2004 under the Shared Execution Agreement. 
  
 (b) Shared Execution Agreement. The Shared
Execution Agreement will be terminated, Encore will have no obligations to GMAC-RFC under the Shared Execution Agreement, including obligations to deliver any Mortgage Loans or pay any amounts to GMAC-RFC, and GMAC-RFC will have no obligations to
Encore under the Shared Execution Agreement, including obligations to purchase any Mortgage Loans from Encore or make Excess Coupon Cash Flow Distributions (as defined in the Shared Execution Agreement) or pay any other amounts to Encore, except for
the payment by GMAC-RFC to Encore in immediately available funds of $509,150.44 in full satisfaction of all of GMAC-RFC’s obligations to Encore under the Shared Execution Agreement. Notwithstanding anything in this Section 2.2, Encore’s
obligations under the Client Contract (as defined in the Shared Execution Agreement) and the Client Guide (as defined in the Shared Execution Agreement) will continue with respect to all Mortgage Loans sold to GMAC-RFC in April 2004 under the Shared
Execution Agreement. 
  
 Section 2.3 Termination Terms –
Equity Investment. 
  
 Notwithstanding any provision of
any of the Transaction Documents to the contrary, upon satisfaction of the conditions set forth in Section 2.4 below, the following terms will apply to the referenced agreements or instruments: 
  
 (a) Series C Preferred Stock, Warrants and Securities
Purchase Agreement. GMAC-RFC will immediately return to Encore and relinquish GMAC-RFC’s rights under the Series C Preferred Stock, the 10% Warrant and the 5% Warrant, the Securities Purchase Agreement will be terminated, and no
party will have any obligations to any other party under the Securities Purchase Agreement. 
  
 (b) Registration Rights Agreement and Co-Sale Agreement. The Registration Rights Agreement and the Co-Sale Agreement will be
terminated, and no party will have any obligations to any other party under the Registration Rights Agreement or the Co-Sale Agreement. 
  
 (c) Short-Term Event Letter. The Short-Term Event Letter will be terminated, and all obligations of Encore in connection
with the Short-Term Event Declaration will be deemed to have been satisfied in full. 
  
 Section 2.4 Conditions to Effectiveness of the Encore Termination. This Agreement and the termination of the contractual relationships and equity investments described in this Article II are subject to
the satisfaction of each of the following conditions prior to the close of business on August 9, 2004: 
  
 (a) Encore must have paid GMAC-RFC $7,500,000 in immediately available funds, in full satisfaction of Encore’s obligations to
GMAC-RFC under the Short-Term Event Letter; 
  

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 (b) Encore must have paid GMAC-RFC $3,000,000 in immediately available funds as payment
in full for the redemption of all of the Series C Preferred Stock; 
  
 (c) Encore must have paid GMAC-RFC $591,420.93 in immediately available funds as repayment in full of the principal amount of all outstanding Term Loan Advances ($591,008.04) together with all accrued but unpaid
interest on those Term Loan Advances ($412.89); and 
  
 (d) Encore must have delivered the executed Release to GMAC-RFC in the form attached as Exhibit A (the “Release”). 
  
 ARTICLE III 
 REPRESENTATIONS AND
WARRANTIES OF ENCORE 
  
 Encore represents and warrants to
GMAC-RFC that: 
  
 Section 3.1 Legal Power and
Authority. Encore is a corporation duly incorporated, validly existing and in good standing under the laws of the State of California, with corporate power to execute, deliver and perform under this Agreement and the Release. 

 
 Section 3.2 Execution and Delivery; Valid and Binding
Agreement. Encore’s execution, delivery and performance of this Agreement and the Release have been duly authorized by all requisite corporate action by Encore. This Agreement and the Release have been duly executed and delivered by
Encore and constitute the valid and binding obligations of Encore enforceable against Encore in accordance with their terms, subject to bankruptcy, insolvency and other similar laws affecting the rights of creditors generally and subject to the
exercise of judicial discretion in accordance with principles of equity. 
  
 Section 3.3 No Breach. Encore’s execution, delivery and performance of this Agreement and the Release will not conflict with or violate any provision of any applicable law, any rule or regulation of any
governmental authority or regulatory body, any judgment, order or decree that is binding upon Encore, Encore’s Certificate of Incorporation, as amended to date, or Bylaws, as amended to date, or conflict with or result in a breach of or
constitute a default or require any consent under, or result in the creation of any lien upon any property or assets of Encore, or result in or require the acceleration of any indebtedness of Encore under any lien, indenture, mortgage, lease,
agreement, instrument, commitment or arrangement to which Encore is a party or by which Encore or its property may be bound or affected. 
  
 Section 3.4 Governmental Authorities; Consents. No consent, approval, authorization or order of, and no notice to or filing with, any
governmental agency or body or any court is required to be obtained or made by Encore for the execution, delivery and performance by Encore of this Agreement or the Release. 
  
 Section 3.5 Brokerage. No third party shall be entitled to receive any brokerage commissions, finder’s fees,
fees for financial advisory services or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of Encore. 
  

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 ARTICLE IV 
 REPRESENTATIONS AND WARRANTIES OF GMAC-RFC 
  
 GMAC-RFC represents and warrants to Encore that: 
  
 Section 4.1 Incorporation and Corporate Power. GMAC-RFC is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, with corporate power to execute,
deliver and perform this Agreement. 
  
 Section 4.2 Execution
and Delivery; Valid and Binding Agreement. GMAC-RFC’s execution, delivery and performance of this Agreement has been duly authorized by all requisite corporate action by GMAC-RFC. This Agreement has been duly executed and delivered
by GMAC-RFC and constitutes the valid and binding obligation of GMAC-RFC enforceable against GMAC-RFC in accordance with its terms, subject to bankruptcy, insolvency and other similar laws affecting the rights of creditors generally and subject to
the exercise of judicial discretion in accordance with principles of equity. 
  
 Section 4.3 No Breach. GMAC-RFC’s execution, delivery and performance of this Agreement will not conflict with or violate any provision of any applicable law, any rule or regulation of any
governmental authority or regulatory body, any judgment, order or decree that is binding upon GMAC-RFC, GMAC-RFC’s Certificate of Incorporation, as amended to date, or Bylaws, as amended to date, or conflict with or result in a breach of or
constitute a default or require any consent under, or result in the creation of any lien upon any property or assets of GMAC-RFC, or result in or require the acceleration of any indebtedness of GMAC-RFC under any lien, indenture, mortgage, lease,
agreement, instrument, commitment or arrangement to which GMAC-RFC is a party or by which GMAC-RFC or its property may be bound or affected. 
  
 Section 4.4 Governmental Authorities; Consents. No consent, approval, authorization or order of, and no notice to or filing with, any
governmental agency or body or any court is required to be obtained or made by GMAC-RFC for the execution, delivery and performance by GMAC-RFC of this Agreement. 
  
 Section 4.5 Brokerage. No third party shall be entitled to receive any brokerage commissions, finder’s
fees, fees for financial advisory services or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of GMAC-RFC. 
  
 ARTICLE V 
 MISCELLANEOUS 
  
 Section 5.1 Survival of Representations and Warranties. The representations and warranties of the parties contained in this Agreement and deemed made as provided in this Agreement will survive:

  
 (a) the execution and delivery of this
Agreement; 
  
 (b) any investigation at any time
made by or on behalf of the party receiving (or deemed to be receiving) those representations and warranties; and 
  

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 (c) the consummation of the Encore Termination. 
  
 Section 5.2 Confidentiality and Public Announcements. The parties
agree that the terms and conditions of this Agreement and all related agreements and the discussions between the parties related to this Agreement and the transactions contemplated by it are, and will be treated as, confidential by the parties;
except that either party may (i) at any time make any announcements or disclosures required by applicable law so long as that party, on learning of the requirement, notifies the other party of the requirement and discusses with the other party in
good faith the proposed wording of the required announcement or (ii) disclose information to its attorneys, accountants, investment bankers and other advisors who are bound by an obligation of confidentiality with respect to the information
disclosed. Encore further agrees that it will not make any public comment or release concerning this Agreement, the discussions between the parties related to this Agreement or the transactions contemplated by it without the prior written consent of
GMAC-RFC. 
  
 Section 5.3 Amendment and Waiver. This
Agreement may not be amended or waived except in a writing executed by the party against which the amendment or waiver is sought to be enforced. No course of dealing between or among any persons having any interest in this Agreement will be deemed
effective to modify or amend any part of this Agreement or any rights or obligations of any person under or by reason of this Agreement. 
  
 Section 5.4 Notices. All notices and other communications in connection with this Agreement must be in writing and must be sent by manual
delivery, overnight courier requiring signature for delivery or United States mail (postage prepaid, registered or certified), addressed to the following address or such other address as the addressee shall have specified to the others in writing:

  
 If to Encore, to: 
  
 Encore Credit Corp. 
 1833 Alton Parkway 
 Irvine, CA 92606

 Attention: John Kontoulis, EVP/CFO 
  
 with copies to: 
  
 Encore Credit Corp. 
 1833 Alton Parkway

 Irvine, CA 92606 
 Attention:
Jon Daurio, General Counsel 
  
 If to GMAC-RFC, to: 
  
 Residential Funding Corporation 
 7501 Wisconsin Ave. 
 Bethesda MD, 20814

 Attention: Rick Rice 
  

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 with copies to: 
  

Residential Funding Corporation 
 8400
Normandale Lake Boulevard 
 Bloomington, MN 55437 
 Attention: Office of the General Counsel 
  
 Any
such notice shall be effective on the date of delivery if manually delivered, the first business day after delivery to an overnight courier if sent by overnight courier, or four days after the date of mailing if mailed; provided, that any
notice or communication changing the address of any entity shall be effective and deemed given only upon its receipt. 
  
 Section 5.5 Binding on Successors. The terms and provisions of this Agreement are binding on and inure to the benefit of Encore, GMAC-RFC
and their respective successors and assigns. 
  
 Section 5.6
Assignment. Neither party may assign its rights or delegate its obligations under this Agreement. 
  
 Section 5.7 Severability. Whenever possible, each provision of this Agreement is to be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, that provision is to be ineffective only to the extent of the prohibition or invalidity, without affecting the remainder
of this Agreement. 
  
 Section 5.8 Complete
Agreement. This Agreement and the Release contain the complete and final agreement between the parties with respect to their subject matter and supersede any prior understandings, agreements or representations by or between the parties,
written or oral, which may have related to the subject matter hereof or thereof in any way. There are no oral agreements among the parties with respect to the subject matter of this Agreement and the Release. 
  
 Section 5.9 Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of which together constitute but one and the same instrument. 
  
 Section 5.10 Governing Law. This Agreement shall be governed by the laws of the State of Minnesota, without reference to its principles of
conflicts of laws. 
  
 Section 5.11 Advice of
Counsel. Each of Encore and GMAC-RFC acknowledges that it has had the opportunity to obtain the advice of experienced counsel of its own choice in connection with the negotiation and execution of this Agreement and the Release and to
obtain the advice of that counsel with respect to all matters contained in this Agreement and the Release, including the waivers of jury trial and of punitive, consequential, special or indirect damages contained in this Agreement. 
  

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 Section 5.12 Consent to Jurisdiction. AT THE OPTION OF GMAC-RFC, THIS AGREEMENT MAY BE
ENFORCED IN ANY STATE OR FEDERAL COURT WITHIN THE STATE OF MINNESOTA. ENCORE CONSENTS TO THE JURISDICTION AND VENUE OF THOSE COURTS, AND WAIVES ANY OBJECTION TO THE JURISDICTION OR VENUE OF THOSE COURTS, INCLUDING THE OBJECTION THAT VENUE IN THOSE
COURTS IS NOT CONVENIENT. ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE COMMENCED AND INSTITUTED BY SERVICE OF PROCESS UPON ENCORE BY FIRST CLASS REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO ENCORE AT ITS ADDRESS LAST KNOWN TO
GMAC-RFC. ENCORE’S CONSENT AND AGREEMENT UNDER THIS SECTION DOES NOT AFFECT GMAC-RFC’S RIGHT TO ACCOMPLISH SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ENCORE IN ANY
OTHER JURISDICTION OR COURT. IN THE EVENT ENCORE COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT OR ANY AGREEMENT OR DOCUMENT
EXECUTED AND DELIVERED IN CONNECTION WITH OR PURSUANT TO THIS AGREEMENT, GMAC-RFC AT ITS OPTION MAY HAVE THE CASE TRANSFERRED TO A STATE OR FEDERAL COURT WITHIN THE STATE OF MINNESOTA OR, IF A TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW,
MAY HAVE ENCORE’S ACTION DISMISSED WITHOUT PREJUDICE. 
  
 Section 5.13 Waiver of Jury Trial. EACH OF ENCORE AND GMAC-RFC PROMISES AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND FULLY WAIVES ANY RIGHT TO TRIAL BY JURY TO THE EXTENT THAT ANY SUCH
RIGHT NOW EXISTS OR ARISES AFTER THE DATE OF THIS AGREEMENT. THIS WAIVER OF THE RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY ENCORE AND GMAC-RFC, AND IS INTENDED TO ENCOMPASS EACH INSTANCE AND EACH ISSUE FOR WHICH THE
RIGHT TO TRIAL BY JURY WOULD OTHERWISE APPLY. ENCORE AND GMAC-RFC ARE EACH AUTHORIZED AND DIRECTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES TO THIS AGREEMENT AS CONCLUSIVE EVIDENCE OF THIS
WAIVER OF THE RIGHT TO TRIAL BY JURY. FURTHER, EACH OF ENCORE AND GMAC-RFC CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE OTHER PARTY, INCLUDING THE OTHER PARTY’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO ANY OF ITS REPRESENTATIVES
OR AGENTS THAT THE OTHER PARTY WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO TRIAL BY JURY. 
  
 Section 5.14 Waiver of Punitive, Consequential, Special or Indirect Damages. EACH OF ENCORE AND GMAC-RFC WAIVES ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES FROM THE
OTHER PARTY OR SUCH PARTY’S AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY ENCORE OR GMAC-RFC 

  

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AGAINST THE OTHER OR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY AGREEMENT OR DOCUMENT EXECUTED AND DELIVERED IN CONNECTION WITH OR PURSUANT TO THIS AGREEMENT. THIS WAIVER OF THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES IS KNOWINGLY AND VOLUNTARILY GIVEN BY
EACH OF ENCORE AND GMAC-RFC, AND IS INTENDED TO ENCOMPASS EACH INSTANCE AND EACH ISSUE FOR WHICH THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES WOULD OTHERWISE APPLY. EACH OF ENCORE AND GMAC-RFC, AS THE CASE MAY BE, IS
AUTHORIZED AND DIRECTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES TO THIS AGREEMENT AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT
DAMAGES. 
  
 [Signature page follows.] 
  

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 IN WITNESS WHEREOF, the parties hereto have executed this Termination Agreement as of the day and year
first above written. 
  

			
	ENCORE CREDIT CORP.
		
	 By:
	 	 /s/  Steven G. Holder

	 	 	      Steven G. Holder

	 	 	 Chairman of the Board and Co-Chief Executive Officer

	
	RESIDENTIAL FUNDING CORPORATION
		
	 By:
	 	 /s/  Danny Hellams

	 	 	     Danny Hellams

	 	 	     Managing Director

  

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 Exhibit A 
  
 RELEASE 
  
 This Release (the “Release”) is being executed and delivered pursuant to Section 2.4(d) of the Termination Agreement dated as of August
6, 2004 (the “Termination Agreement”) by and between Encore Credit Corp., a California corporation (“Encore”), and Residential Funding Corporation, a Delaware corporation (“GMAC-RFC”). Encore
acknowledges that execution and delivery of this Release is a condition to GMAC-RFC’s obligation to consummate the transactions contemplated by the Termination Agreement and that GMAC-RFC is relying on this Release in consummating those
transactions. 
  
 For good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, Encore, for and on behalf of itself and its past and present stockholders, directors, officers, employees, agents, subsidiaries, affiliates, insurers, attorneys and legal representatives, and the
successors, assigns, heirs and personal representatives of any of the foregoing, and each and all thereof (each an “Encore Releasor” and, collectively, the “Encore Releasors”), hereby remises, releases, acquits and
forever discharges GMAC-RFC and its past and present stockholders, directors, officers, employees, agents, subsidiaries, affiliates, insurers, attorneys and legal representatives, and the successors, assigns, heirs and personal representatives of
any of the foregoing, and each and all thereof (each a “GMAC-RFC Release” and, collectively, the “GMAC-RFC Releasees”), of and from any and all manner of action or causes of action, suits, claims, demands, charges,
judgments, damages, levies and executions of whatsoever kind, nature and/or description, whether arising out of any alleged violation of any federal or state statutes, negligence, breach of contract, fraud, warranty or any other theory, whether
legal or equitable, and the consequences thereof, including any claims, losses, costs or damages, including compensatory and punitive damages, in each case whether known or unknown, liquidated or unliquidated, fixed or contingent, matured or
unmatured, direct or indirect, which any or all of the Encore Releasors ever had, now have or ever can, shall or may have or claim to have against any or all of the GMAC-RFC Releasees for, upon or by reason of any agreements or transactions between
GMAC-RFC and Encore or any other matter or act arising, entered into or occurring prior to the date of execution and delivery of this Release, except for the performance by GMAC-RFC of its obligations under the Termination Agreement. 
  
 This Release may be pleaded as a full and complete defense to any action,
suit or other proceeding which may be instituted, prosecuted or attempted by or on behalf of any or all of the Encore Releasors against any or all of the GMAC-RFC Releasees in breach of this Release. Without limiting the rights and remedies
otherwise available to any GMAC-RFC Releasee, Encore agrees to indemnify and hold harmless each GMAC-RFC Releasee from and against any and all losses, liabilities, claims, damages (including incidental and consequential damages) and expenses
(including costs of investigation and reasonable attorneys’ fees), whether or not involving third party claims, arising directly or indirectly from, or in connection with, any action or cause of action, suit, claim, demand, charge, judgment,
damage, levy or execution of whatsoever kind, nature and/or description purported to be released pursuant to this Release. 
  

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 This Release may only be modified, amended or waived by an instrument in writing executed by the
person(s) against whose interest that modification, amendment or waiver operates. 
  
 Encore acknowledges that, other than as specifically set forth in the Termination Agreement: 
  
 (i) it is not relying on any statement or representation of GMAC-RFC or any agents or representatives of GMAC-RFC in executing and
delivering this Release and 
  
 (ii) GMAC-RFC has
made no covenants, promises or understandings outside of this Release other than as contained in the Termination Agreement and the Existing Agreements (as defined in the Termination Agreement) as modified by the Termination Agreement. 
  
 The individual executing this Release on behalf of Encore represents and
warrants that the execution of this Release and the acceptance of the terms hereof have been duly authorized by all necessary corporate action on the part of Encore. 
  
 Encore hereby acknowledges receipt of a copy of this Release. 
  
 Whenever possible, each provision of this Release is to be interpreted in
such manner as to be effective and valid under applicable law, but if any provision of this Release is held to be prohibited by or invalid under applicable law, that provision is to be ineffective only to the extent of the prohibition or invalidity,
without affecting the remainder of this Release. 
  
 This Release
shall be governed by the laws of the State of Minnesota, without reference to its principles of conflicts of laws. 
  
 In connection with the foregoing release, Encore acknowledges that it has been advised by legal counsel of its own choosing regarding the execution and
delivery of this Release and further acknowledges that it waives the benefits of Section 1542 of the California Civil Code and any other similar law or statute that may be applicable. Section 1542 states: 
  
 “A general release does not extend to claims which the
creditor does not know exist or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.” 
  
 [Signature page follows.] 
  

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 IN WITNESS WHEREOF, Encore Credit Corp. has caused this Release to be executed by an authorized officer
and delivered this 6th day of August, 2004. 
  

			
	
	Encore Credit Corp.
		
	 By:
	 	 /s/  Steven G. Holder

	 	 	     Steven G. Holder

	 	 	     Chairman of the Board and Co-Chief Executive Officer

  

 -14-Commercial Lease, dated as of May 5, 2003

 Exhibit 10.32 
  
 

 
 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, May 5, 2003, is made by and between Danari Alton, LLC, a
Delaware limited liability company (“Lessor”) and Encore Credit Corp, a California corporation (“Lessee”), (collectively the “Parties,” or individually a “Party”). 
  
 1.2 Premises: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and commonly known as 1833 Alton Parkway, Irvine (See Exhibits A and B), located in the County of Orange, 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) an approximate 127,718-square-foot, two-story office building on approximately 5.6 acres; for tax purposes, further described as
Assessor’s Parcel #430-212-20, as depicted on the survey attached as Exhibit A and parking plan attached as Exhibit B (“Premises”). (See also Paragraph 2) 
  
 1.3 Term: seven (7) years and three (3) months (“Original Term”) commencing October 1, 2003
(“Commencement Date”) and ending December 31, 2010 (“Expiration Date”). (See also Paragraph 3) 
  
 1.4 Early Possession: June 1, 2003 (“Early Possession Date”). (See also Paragraphs 3.2 and 3.3) 
  
 1.5 Base Rent: $83,300.00 per month (“Base Rent”),
payable on October 1, 2003 as rent for January 2004 and on the 1st day of each month commencing February 1, 2004 (See Addendum #53.) (See also Paragraph 4) 
  

	þ	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:
$                                        
for the period
                                        
                                        
                           
                                       
                                        
                                        
                                        
                                      . 
  
 (b) Security Deposit: $ See Addendum #51.
(“Security Deposit”). (See also Paragraph 5) 
  
 (c) Association Fees:
$                                        
for the period
                                        
                                        
               
  
 (d) Other:
$                                        
for
                                        
                                        
                                        
           
                                       
                                        
                                        
                                        
                                      . 
  
 (e) Total Due Upon Execution of this Lease:
$150,000.00. 
  
 1.7 Agreed Use: general office and related
legal uses (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): 
  

	þ	Lee & Associates - Newport Beach, Inc. (Brian Garbutt) represents Lessor exclusively (“Lessor’s Broker”); 

  

	þ	Grubb & Ellis Company (Bryon Ward) represents Lessee exclusively (“Lessee’s Broker”); or 

  

	 ̈	                                      
                                   represents both Lessor and Lessee
(“Dual Agency”). 

  
 (b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Broker the fee agreed to in their separate written agreement (or if there is no such agreement, the sum of
                     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 Steve Holder (“Guarantor”). (See also Paragraph 37) 
  
 1.11 Attachments. Attached hereto are the following, all of which constitute a part of this Lease: 
  

	þ	an Addendum consisting of Paragraphs 51 through 66; 

  

					
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	þ	a plot plan depicting the Premises; 

  

	þ	a current set of the Rules and Regulations; 

  

	þ	a Work Letter; 

  

	þ	other (specify): Guaranty of Lease, HVAC Report (Exhibit D), Certificate of Board Resolution of Lease, ALTA survey (Exhibit A), Early Possession Area (Exhibit A-1), parking plan
(Exhibit B), lot line adjustment plan (Exhibit C), preliminary budget (Exhibit E), Memorandum of Lease and Purchase Option (Exhibit F), and Mutual Cancellation of Purchase Option (Exhibit G). 

  
 2. Premises. 
  
 2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the
rental, and upon all of the terms, covenants and conditions set forth in this Lease. Unless otherwise provided herein, any statement of size set forth in this Lease, or that may have been used in calculating Rent, is an approximation which the
Parties agree is reasonable and any payments based thereon are not subject to revision whether or not the actual size is more or less. Note: Lessee is advised to verify the actual size prior to executing this Lease. 
  
 2.2 Condition. Lessor shall deliver the Premises to Lessee 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, Lessor 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 or installed pursuant to the Work Letter, shall be in good operating condition on said date and 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. 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 from the Commencement Date as to the HVAC systems, and (ii) 30 days from the Commencement
Date 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 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, or as a result of alterations or utility installations made or to be made by Lessee, 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 or ADA modifications), or is not the result of the alterations or utility installations
made or to be made by Lessee, then Lessor shall pay for such costs. 
  
 (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 

  

					
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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 Base Rent and all operating costs (except Lessee’s share of Electrical and Janitorial for approximately 10,000 square feet of Early Possession Area, as defined in
Paragraph 52, which shall be paid by Lessee) shall be abated for the period of such early possession. All other terms of this Lease shall, however, be in effect during such period. Any such early possession shall not affect the Expiration Date.
(See Addendum #52.) 
  
 3.3 [Deleted] 
  
 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. 
  
 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 on or before the day on which it is due, without offset or deduction (except as specifically permitted in this Lease). Rent for any period during the term
hereof which is for less than one full calendar month shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at its address stated herein or to such other persons or place as Lessor may from
time to time designate in writing. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor’s rights to the balance of such Rent, regardless of Lessor’s endorsement of any check so stating. In the
event that any check, draft, or other instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charge and Lessor, at its option, may require all future
payments to be made by Lessee to be by cashier’s check. Payments will be applied first to accrued late charges and actual and reasonable attorney’s fees, second to accrued interest, then to Base Rent and Operating Expense Increase,
and any remaining amount to any other outstanding charges or costs. 
  
 4.3 Management Fees. In addition to the Base Rent, Lessee shall pay to Lessor each month an amount equal to one and one-half percent (1.5%) of the Base Rent as a management fee. 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 in accordance with Paragraph 51 the Security Deposit as security for Lessee’s faithful performance of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under
this Lease, Lessor may use, apply or retain all or any portion of said Security Deposit for the payment of any amount due Lessor or to reimburse or compensate Lessor for any reasonable and direct, liability, expense, loss or damage
which Lessor may suffer or incur as a proximate cause 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. 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. Within 14 days after the expiration or termination of this Lease, if Lessor elects to
apply the Security Deposit only to unpaid Rent, and otherwise within 30 days after the Premises have been vacated pursuant to Paragraph 7.4(c) below, Lessor shall return that portion of the Security Deposit not used or applied by Lessor. No part of
the Security Deposit shall be considered to be prepayment for any monies to be paid by Lessee under this Lease. Lessee’s Security Deposit shall be placed in a segregated interest bearing money market account at US Bank, or in a mutually
agreed upon, interest-bearing account, with interest accruing to the benefit of Lessee. Any accrued interest shall be returned at the end of the lease term, provided monies are not needed to cure default. 
  

					
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 6. Use. 
  
 6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which is reasonably comparable thereto, and for
no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or properties. Lessor shall not
unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvements on the Premises or the mechanical or electrical systems therein,
and/or is not significantly more burdensome to the Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after such request give written notification of same, which notice shall include an explanation of Lessor’s objections
to the change in the Agreed Use. 
  
 6.2 Hazardous
Substances. 
  
 (a) Reportable Uses
Require Consent. The term “Hazardous Substance” as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with
other materials expected to be on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis for potential
liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products,
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 actual and reasonable 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. Lessee’s indemnification shall be limited to hazardous substances of which Lessee has knowledge, has consented to, or should have known about. 
  
 (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 reasonable 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 

  

					
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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 reasonable requirements of any
applicable fire insurance underwriter or rating bureau, and the reasonable recommendations of Lessor’s engineers and/or consultants which relate in any manner to the 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 any Applicable Requirements. 
  
 6.4 Inspection; Compliance. Lessor and Lessor’s “Lender” (as defined in Paragraph 30) and consultants shall have the right to
enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times 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 actual and reasonable 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), ceilings, floors, windows, doors, plate glass, skylights, landscaping, driveways, parking lots, fences, retaining walls,
signs, sidewalks and parkways located in, or on, 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, reasonable wear and tear excepted. 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. (See Addendum #55.) 
  
 (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), (ii) boiler, and pressure vessels, (iii) fire
extinguishing systems, including fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (vi) clarifiers (vii) basic utility feed to the perimeter of the Building, and (viii) any other equipment, if reasonably required by Lessor.
However, Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all of such service contracts, and if Lessor so elects, Lessee shall reimburse Lessor, upon demand, for the actual and reasonable cost thereof. (See
Addendum #55.) 
  
 (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 actual and reasonable cost thereof. 
  

					
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 (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 the estimated useful life of the item expressed in
months. Lessee shall pay interest on the unamortized balance at a rate equal to the Prime Rate of Bank of America, plus 2% per annum. Lessee may, however, prepay its obligation at any time. 
  
 7.2 Lessor’s Obligations. Subject to the provisions of Paragraphs
2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by the Parties hereto, subject to Paragraphs #55 and #59 of the attached Addendum, 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, 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 or as provided in Paragraph 56. Lessor shall not unreasonably withold
or delay consent to: (i) Lesse’s installation of a backup power supply; (ii) Lessee’s installation of a full service kitchen; or (iii) placing identification marks on parking spaces. 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 approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed
plans. Consent shall be deemed conditioned upon Lessee’s: (i) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and (iii)
compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials. Lessee shall
promptly upon completion furnish Lessor with 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 Lessee at or for use on the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Premises or any interest therein. Lessee shall give Lessor not less than 5 days notice prior to the
commencement of any work in, on or about the Premises, and Lessor shall have the right to post notices of non-responsibility. If Lessee shall contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend and
protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shall furnish a surety bond in an amount equal
to 150% of the amount of such contested lien, claim or demand, indemnifying Lessor against liability for the same. If Lessor elects to participate in any such action, Lessee shall pay Lessor’s actual and reasonable 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, and unless Lessee has exercised the Option to Purchase, Paragraph
66, all Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises. 
  
 (b) Removal. By delivery to Lessee of written notice
from Lessor not earlier than 90 and not later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of this Lease.
Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent. 
  
 (c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with all of
the improvements, parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted. “Ordinary wear and tear” shall not include any damage or
deterioration that would have been prevented by good maintenance practice. Notwithstanding the foregoing, if this Lease is for 12 months or less, then Lessee shall surrender the Premises in the same condition as delivered to Lessee on the Start Date
with NO allowance for ordinary wear and tear. Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings, and equipment as well as the
removal of any storage tank installed by or for Lessee. Lessee shall completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous Substances which were
deposited via underground migration from areas outside of the Premises, or if applicable, the Project) even if such removal would require Lessee to perform or pay for work that exceeds statutory requirements. Trade Fixtures shall remain the property
of Lessee and shall be removed by Lessee. 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. 
  

					
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 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 $2,000,000 per occurrence with an annual aggregate of not less than $4,000,000, an “Additional Insured-Managers or Lessors of Premises Endorsement” and contain the “Amendment of the Pollution Exclusion Endorsement” for
damage caused by heat, smoke or fumes from a hostile fire. The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an “insured
contract” for the performance of Lessee’s indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. All insurance carried by
Lessee shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only. 
  
 (b) Carried by Lessor. Lessor shall maintain liability insurance as described in Paragraph 8.2(a), in addition to, and not in lieu
of, the insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein. 
  
 8.3 Property Insurance - Building, Improvements and Rental Value. 
  
 (a) Building and Improvements. 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. In the event that the cost of coverage increases materially during the term of this Lease, Lessor shall provide to
Lessee notice of the annual insurance renewal premium when obtained by Lessor, and Lessee may seek to obtain comparable coverage for a lower cost. In the event Lessee is able to obtain an insurance proposal for replacement coverage prior to the
renewal deadline that satisfies the coverage requirements of this Lease, from a reputable carrier on terms that are acceptable to Lessor and its lender, then Lessor shall obtain such replacement coverage. The amount of such insurance shall be
equal to the full replacement cost of the Premises, as the same shall exist from time to time, or the amount required by any Lender, but in no event more than the commercially reasonable and available insurable value thereof. 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 if applicable rather than by Lessor. If the coverage is available
and commercially appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood 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 policies shall also contain an agreed valuation provision in lieu of any coinsurance
clause, waiver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for
the city nearest to where the Premises are located. If such insurance coverage has a deductible clause, the deductible amount shall not exceed $1,000 per occurrence, and Lessee shall be liable for such deductible amount in the event of an Insured
Loss. 
  
 (b) Rental Value. The Insuring
Party shall obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and any Lender, insuring the loss of the full Rent for one year with an extended period of indemnity for an additional 180 days (“Rental
Value insurance”). Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12
month period. Lessee shall be liable for any deductible amount in the event of such loss. 
  
 (c) Adjacent Premises. If the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent
to the Premises, the Lessee shall pay for any increase in the premiums for the property insurance of such building or buildings if said increase is caused by Lessee’s acts, omissions, use or occupancy of the Premises. Furthermore, Lessee shall
not be responsible for any increase in the premium if said increase is caused by the adjacent Lessee’s acts, omission, uses, or occupancy of the adjacent premises. 
  
 8.4 Lessee’s Property; Business Interruption Insurance. 
  
 (a) Property Damage. Lessee shall determine on its
own behalf whether or not to obtain and maintain insurance coverage on all of Lessee’s personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations. 
  
 (b) Business Interruption. Lessee shall determine on its own behalf whether or not to obtain and
maintain loss of income and extra expense insurance in amounts as will reimburse Lessee for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to
prevention of access to the Premises as a result of such perils. 
  
 (c) No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee’s property, business operations or
obligations under this Lease. 
  
 8.5 Insurance Policies.
Insurance required herein shall be by companies duly licensed or admitted to transact business in the state where the Premises are located, and maintaining during the policy term a “General Policyholders Rating” of at least B+, V, as
set forth in the most current issue of “Best’s Insurance Guide”, or such other rating as may be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall,
prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification except after 30
days prior written notice to Lessor. Lessee shall, at least 30 days prior to the expiration of such policies, furnish Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or Lessor may order such insurance
and charge the actual and reasonable 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. 
  

					
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 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, actual and reasonable attorneys’ and
consultants’ fees, actual and reasonable expenses and/or liabilities arising out of, involving, or in connection with, the use and/or occupancy of the Premises by Lessee. If any action or proceeding is brought against Lessor by reason of
any of the foregoing matters, Lessee shall upon notice defend the same at Lessee’s expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in
order to be defended or indemnified. 
  
 8.8 Exemption of
Lessor from Liability. Except for Lessor’s gross negligence or willful misconduct, Lessor shall not be liable for injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee’s employees, contractors,
invitees, customers, or any other person in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, fire
sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part,
or from other sources or places. Lessor shall not be liable for any damages arising from any act or neglect of any other tenant of Lessor nor from the failure of Lessor to enforce the provisions of any other lease in the Project. Notwithstanding
Lessor’s negligence or breach of this Lease, Lessor shall under no circumstances be liable for injury to Lessee’s business or for any loss of income or profit therefrom. 
  
 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 5% of the then existing Base Rent or $100, whichever is greater until obtained by Lessee or proof thereof provided to Lessor. 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 Lessee in
writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total. 
  
 (b) “Premises Total Destruction” shall mean damage or destruction to the 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 or destruction of more than 50% of the Building. 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 in a commercially reasonable manner 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. If such proceeds are not promptly paid to Lessee, upon Lessor’s receipt of such proceeds, or not paid under any circumstance within 90 days of Landlord’s election hereunder, Lessee will not be required to make such
repairs. 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 a commercially reasonable manner. 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 

  

					
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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 60 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 8.7. 
  
 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 from the date of damage until completion of the repair, remediation or restoration of such damage (or until termination under Paragraph 9.4 or 9.5) shall be abated
in proportion to the degree to which Lessee’s use of the Premises is impaired, All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein. 
  
 (b)
Remedies. If Lessor shall be obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior
to the commencement of such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee’s election to terminate this Lease on a date not less than 60 days following the giving of such
notice. If Lessee gives such notice and such repair or restoration is not commenced within 30 days thereafter, this Lease shall terminate as of the date specified in said notice. If the repair or restoration is commenced within such 30 days, this
Lease shall continue in full force and effect. “Commence” shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs. In addition,
this Lease may be terminated by Lessee if (a) more than 25% of the Premises cannot be used by Lessee for a period longer than 6 months from date of damage as a result of Premises Partial Damage; and (b) thereafter Lessee delivers to
Lessor at least 30 days’ prior written notice of its intention to terminate the Lease if the repairs are not completed; and (c) Lessor fails to substantially complete the repairs within such 30-day period. 
  
 9.7 Termination; Advance Payments. Upon termination of this Lease
pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee’s Security
Deposit as has not been, or is not then required to be, used by Lessor. 
  
 9.8 Waive Statutes. Lessor and Lessee agree that the terms of this Lease shall govern the effect of any damage to or destruction of the Premises with respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith. 
  
 10. Real
Property Taxes. 
  
 10.1 Definition. As used herein,
the term “Real Property Taxes” shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement bond; and/or
license fee imposed upon or levied against any legal or equitable interest of Lessor in the 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 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 

  

					
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Real Property Taxes when due, Lessee shall pay Lessor, upon demand, such additional sum as is necessary. If the amount collected by Lessor exceeds
the amount of the actual applicable tax bill when said bill is received by Lessor, the excess amount paid by Lessee will be credited towards Lessee’s future monthly payment of estimated taxes. 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 but reasonably 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, which shall not be
unreasonably withheld or delayed. (See paragraphs #60 and #61.) 
  
 (b) [Deleted] 
  
 (c) The involvement of Lessee or its assets in any transaction, or series of transactions with the exception of any transactions in the ordinary course of Lessee’s business (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. 
  
 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 or entering into such sublease, be deemed to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee during the
term of said assignment or sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing. 
  
 (g) Lessor’s consent to any assignment or subletting
shall not transfer to the assignee or sublessee any Option granted to the original Lessee by this Lease unless such transfer is specifically consented to by Lessor in writing. (See Paragraph 39.2) 
  

					
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 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) Subject to Section 12.5, 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. Subject to Section 12.5, in the event that the amount collected by Lessor exceeds Lessee’s obligations any such excess shall be promptly 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. 
  
 12.4 Notwithstanding the foregoing, in connection with a proposed subletting of the entire Premises, other than to an affiliate of Lessee or
Guarantor wherein the Lessee does not intend to reoccupy the Premises within 1 year, Lessor shall have the right to recapture the Premises by electing to terminate this Lease as of the effective date of the proposed assignment or subletting.

  
 12.5 Lessee and Lessor shall split 50/50 any and all net
profits associated with subleasing all or a portion of the Premises, “net profits” meaning all profits after all expenses associated with the sublease are deducted. 
  
 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 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) reasonably necessary evidence concerning any guaranty and/or Guarantor, (vii) any document
reasonably 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. 
  
 (d) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, other than those described in subparagraphs 13.1(a), (b) or (c), above,
where such Default continues for a period of 30 days after written notice; provided, however, that if the nature of Lessee’s Default is such that more than 30 days are reasonably required for its cure, then it shall not be deemed to be a Breach
if Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion. 
  
          (e) The occurrence of any of the following events: (i) the making of any general arrangement or
assignment for the benefit of creditors; (ii) becoming a “debtor” as defined in 11 U.S.C. §101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within 60 days);
(iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the
attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in the event
that any provision of this subparagraph (e) is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions. 
  
 (f) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially
false. 
  
 (g) If the performance of
Lessee’s obligations under this Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a
Guarantor’s becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor’s improper 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 actual and reasonable
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 

  

					
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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 actual and reasonable 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 13. 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 with the exception of the Tenant Improvement Allowance as defined in the Work Letter, 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 any uncured 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 10 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 5% of
each such overdue amount or $100, whichever is greater for the first occurance, and 10% of each such overdue amount for any occurance thereafter. 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 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, reserving Lessee’s right to seek reimbursement from Lessor. Lessee shall document the cost of said cure
and supply said documentation to Lessor. 
  
 14. Condemnation. If the
Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively “Condemnation”), this Lease shall terminate as to the part taken as of the date
the condemning authority takes title or possession, 

  

					
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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 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 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 American Industrial Real
Estate Association, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party. 
  
 (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may
execute an Estoppel Certificate stating that: (i) the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ii) there are no uncured defaults in the Requesting Party’s performance, and
(iii) if Lessor is the Requesting Party, not more than one month’s rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting Party’s Estoppel Certificate, and the Responding Party shall be
estopped from denying the truth of the facts contained in said Certificate. 
  
 (c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall deliver to any potential lender or purchaser designated by Lessor such financial statements as
may be reasonably required by such lender or purchaser, including but not limited to Lessee’s financial statements for the past 3 years. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and
shall be used only for the purposes herein set forth. 
  
 17. Definition of
Lessor. The term “Lessor” as used herein shall mean the owner or owners at the time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee’s interest in the prior lease. In the event of a
transfer of Lessor’s title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such transfer
or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the Lessor. Subject to the
foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined.  
  
 18. Severability. The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof. 
  
 19. Days. Unless otherwise specifically
indicated to the contrary, the word “days” as used in this Lease shall mean and refer to calendar days. 
  
 20. Limitation on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor’s 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. The obligations of Lessee under this Lease shall not constitute personal obligations of Lessee’s 

  

					
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partners, members, directors, officers or shareholders, with the exception of Guarantor for the satisfaction of any liability of Lessee with respect to
this Lease, and Lessor shall not seek recourse against Lessee’s partners, members, directors, officers or shareholders, or any of their personal assets for such satisfaction with the exception of Guarantor. 
  
 21. Time of Essence. Time is of the essence with respect to the performance of all
obligations to be performed or observed by the Parties under this Lease. 
  
 22.
No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor
and Lessee each represents and warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the use, nature,
quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Party. The liability (including court costs and attorneys’ fees), of any Broker with respect to
negotiation, execution, delivery or performance by either Lessor or Lessee under this Lease or any amendment or modification hereto shall be limited to an amount up to the fee received by such Broker pursuant to this Lease; provided, however, that
the foregoing limitation on each Broker’s liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 
  
 23. Notices. 
  
 23.1 Notice Requirements. All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered in person (by
hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in this
Paragraph 23. The addresses noted adjacent to a Party’s signature on this Lease shall be that Party’s address for delivery or mailing of notices, except that following the Commencement Date, Lessee’s address for delivery of
notice under this Section shall be 1833 Alton Parkway, Irvine, CA. All notices to Lessee shall be separately addressed and sent to (i) Encore Credit Corp., (ii) Jon Daurio, and (iii) Rick Burns. Either Party may by written notice to the other
specify a different address for notice, except that upon Lessee’s taking possession of the Premises, the Premises shall constitute Lessee’s address for notice. A copy of all notices to Lessor shall be concurrently transmitted to such party
or parties at such addresses as Lessor may from time to time hereafter designate in writing. 
  
 23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the
postmark thereon. If sent by regular mail the notice shall be deemed given 48 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantee
next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt
(confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 
  
 24. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant or
condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition hereof. Lessor’s consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor’s consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of
this Lease requiring such consent. No waiver by Lessee of the Default or Breach of any term, covenant or condition hereof by Lessor, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach
by Lessor of the same or of any other term, covenant or condition hereof. Lessee’s consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessee’s consent to, or approval of, any
subsequent or similar act by Lessor, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by
Lessee. Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of
no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment. 
  
 25. Disclosures Regarding The Nature of a Real Estate Agency Relationship. 
  
 (a) When entering into a discussion with a real estate agent regarding a real estate transaction, a Lessor
or Lessee should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Lessor and Lessee acknowledge being advised by the Brokers in this transaction, as follows:

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

  

					
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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 liability (including court costs and attorneys’ fees), of any Broker with respect to any breach of duty, error or omission relating to this Lease shall not exceed the fee received by such Broker
pursuant to this Lease; provided, however, that the foregoing limitation on each Broker’s liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 
  
 (c) 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
including any extended term. 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. Lessor agrees that if Lessee is given a notice of Lessor’s default from Lessor’s Lender, Lessee may cure the default and in addition may
make any future payments of Rent directly to Lessor’s Lender. To the extent that Lessee pays any amount in excess of the Rent due for any calendar month to Lessor and/or Lessor’s Lender as a result of Lessor’s default, as evidenced by
a notice of default by Lessor’s Lender, the excess payment will be credited towards the purchase price to be paid pursuant to the Option to Purchase (Paragraph 66). 
  
 30.2 Attornment. In the event that Lessor transfers title to the Premises, or the Premises are acquired by another
upon the foreclosure or termination of a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3, attorn to such new owner, and upon request, enter into a new lease, using the
same form, containing all of the same terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or, at the election of such new owner, this Lease shall automatically become a new Lease between Lessee and
such new owner, upon all of the terms and conditions hereof, for the remainder of the term hereof, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessor’s obligations
hereunder, except that such new owner shall not: (a) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of ownership; (b) be subject to any offsets or defenses which Lessee might have
against any prior lessor, (c) be bound by prepayment of more than one month’s rent. 
  
 30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee’s subordination of this Lease shall be subject to receiving a commercially reasonable
non-disturbance agreement (a “Non-Disturbance Agreement”) from the Lender which Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease, including any options to extend the term hereof, will
not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises. Further, within 60 days after the execution of this Lease, Lessor shall use its commercially reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event that Lessor is unable to provide the Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee’s 

  

					
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option, directly contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement. 
  
 30.4 Self-Executing. The agreements contained in this Paragraph 30
shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance Agreement provided for herein. 
  
 31. Attorneys’ Fees. If any Party brings an action or proceeding involving the Premises 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 who substantially obtains or defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party of its claim or defense. The attorneys’ fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees
reasonably incurred. 
  
 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 Lease” signs during the last 6 months of the term hereof or extended term, as
applicable, or such earlier date if Lessee gives notice of its intention to vacate. Except for ordinary “for sublease” signs, except as provided in Section 58, 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, determination, or approval of a
Party is required to an act by or for the other Party, such consent or approval shall not be unreasonably withheld or delayed. Lessor’s actual commercially appropriate and 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. Wherever in this Lease a party is obligated to pay or reimburse the other for fees, expenses or costs paid or incurred by the other, such obligation shall extend only to amounts actually paid
or incurred in the exercise of the other's good faith business judgement. 
  
 37. Guarantor. 
  
 37.1 Execution. The
Guarantor, shall execute a guaranty in the form most recently published by the American Industrial Real Estate Association, and 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. 
  

					
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	©1997 - American Industrial Real Estate Association	  	REVISED	  	FORM STN-7-4/01E

 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 to Extend 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 [Deleted] 
  
 39.4 Effect of Default on Options. 
  
 (a) Lessee shall have no right to exercise an Option to
Extend: (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 material 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 3 business days after delivery of notice that rent due was
not paid, 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 actual and reasonable 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 or materially and adversely affects the value of any option to purchase the Premises, with the exception of any easements for ingress and egress. Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions. 
  
 43. Performance Under Protest. Notwithstanding any terms or provisions herein to the contrary, 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 and any actual and reasonable costs and expenses (including attorney’s fees) to collect such sum. 
  
 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) 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. 
  

					
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	©1997 - American Industrial Real Estate Association	  	REVISED	  	FORM STN-7-4/01E

 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 þ is  ̈ is not attached to this Lease.

  
 50. Americans with Disabilities Act. In the event that
Lessee’s specific use of the Premises requires modifications or additions to the Premises in order to be in ADA compliance, Lessee agrees to make any such necessary modifications and/or additions at Lessee’s expense. 
  
 LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION
CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT
AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. 
  
 ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGED TO: 
  
 1. SEEK ADVICE OF COUNSEL AS TO THE
LEGAL AND TAX CONSEQUENCES OF THIS LEASE. 
  
 2. RETAIN APPROPRIATE
CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING 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: Woodland Hills, California
	 	 	 	 Executed at: Irvine, California

	 on
	 	 	 	 	 	 on:
	 	 
			
	 By LESSOR:
	 	 	 	 By LESSEE:

	Danari Alton, LLC, a Delaware limited liability company	 	 	 	Encore Credit Corp, a California corporation
					
	By:	 	 /s/ Michael S. Adler
	 	 	 	By:	 	 /s/ Jon Daurio

	Name Printed:	 	 Michael S. Adler
	 	 	 	Name Printed:	 	 Jon Daurio

	Title:	 	 President
	 	 	 	Title:	 	 Executive Vice President

	Address:	 	 21800 Burbank Blvd., Suite 300
 Woodland Hills, CA 91364
	 	 	 	Address:	 	 101 Innovation Drive, Suite 200
 Irvine, CA 92612

	Telephone/Facsimile: 818-884-2200/818-884-2205	 	 	 	Telephone/Facsimile: 949-856-8300/949-717-3076
	Federal ID No.	 	 	 	 	 	Federal ID No.	 	 

  

					
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	©1997 - American Industrial Real Estate Association	  	REVISED	  	FORM STN-7-4/01E

									
	 BROKER:
	 	 	 	 BROKER:

	 Lee & Associates - Newport Beach, Inc.
	 	 	 	 Grubb & Ellis Company

					
	 Attn:
	 	 Brian D. Garbutt
	 	 	 	 Attn:
	 	 Bryon Ward

	 Title:
	 	 Senior Vice President
	 	 	 	 Title:
	 	 Senior Vice President

	 Address:
	 	3991 MacArthur Blvd., Suite 100
Newport Beach, CA 92660	 	 	 	 Address:
	 	4675 MacArthur Blvd., Suite 100
Newport Beach, CA 92660
	 Telephone/Facsimile:
	 	949-724-4704/949-724-8567	 	 	 	 Telephone/Facsimile:
	 	 949-608-2010/949-608-2003

	 Federal ID No.
	 	 	 	 	 	 Federal ID No.
	 	 

  

	NOTE: 	These forms are often modified to meet the changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most current form:
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 So. Flower Street, Suite 600, Los Angeles, California 90017. (213) 687-8777. Fax No. (213) 687-8616 

  
 © Copyright 1997 - By American Industrial Real Estate Association. All rights reserved. 
 No part of these works may be reproduced in any form without permission in writing. 
  
 Garbutt/Single-Tenant Net - 1833 Alton 
  

					
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	©1997 - American Industrial Real Estate Association	  	REVISED	  	FORM STN-7-4/01E

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