Document:

Employment Agreement by and between Industrial Enterprises of America. and
      Jorge Yepes

     

    EXHIBIT
      10.1

     

    EMPLOYMENT
      AGREEMENT

    

    THIS
      EMPLOYMENT AGREEMENT ("Agreement") is made as of the first day of September,
      2007, by and between INDUSTRIAL ENTERPRISES OF AMERICA, INC., a Nevada
      corporation, with an office for the conduct of its business at 711 Third Ave,
      Suite 1505, New York, New York 10017 (the "Company"), and Jorge E. Yepes, an
      individual residing at 15644 SW 53rd
      CT,
      Miramar, Florida 33027 (the "Executive").

    

    WHEREAS,
      the Company desires to employ the Executive as Chief Financial Officer of the
      Company, and the Executive desires to be employed by the Company in such
      capacities; and

    

    WHEREAS,
      the parties hereto desire to enter into an agreement of employment mutually
      beneficial to said parties, and for the purpose of defining the rights, duties
      and obligations of each of the parties hereto.

    

    NOW,
      THEREFORE, for good and valuable consideration, the sufficiency and receipt
      of
      which is hereby acknowledged, the Company and the Executive agree as
      follows:

    

    1. Employment.
      Upon
      the terms and subject to the conditions of this Agreement, the Company hereby
      employs the Executive and the Executive hereby accepts employment by the Company
      on the terms and conditions hereinafter set forth.

    

    2. Term.
      Subject
      to the provisions of Section 12 of this Agreement, Executive's employment shall
      be for a period of three (3) years, commencing on September 1st,
      2007.
      For the period of two (2) years after September 1st,
      2010,
      the Executive will remain an employee of the Company at the sole option of
      the
      Company.

    

    3. Executive's
      Position, Duties and Authority.

    

    3.1 Position.
      The
      Company shall employ the Executive, and the Executive shall serve as Chief
      Financial Officer of the Company.

    

       3.2 Description.
      The
      Executive shall perform such duties and responsibilities on a full time basis
      as
      shall be reasonably assigned to the Executive by the President and Chief
      Executive Officer of the Company or their designee, and which are customarily
      incident to the day-to-day operations of the Company’s financial
      matters.

    

    3.3 Authority.
      At all
      times during the Term, the Executive shall report directly to the President
      and
      CEO of the Company.

    

    4. Services.

    

    4.1 General.
      The
      Executive shall devote sufficient business time, labor, skill and energy to
      the
      business and affairs of the Company and to the duties and responsibilities
      referred to in Section 3.2 of this Agreement.

    

       4.2 Opportunities;
      Investments.
      The
      Executive covenants and agrees that, during the Term, he shall inform the
      Company of each business opportunity related to the business of the Company
      or
      any of the Company's subsidiaries or affiliates of which he becomes aware and
      that he will not, directly or indirectly, exploit any such opportunity for
      his
      own account.

    

    5. Location
      of Employment.
      Unless
      the Executive consents otherwise in writing, the principal location for the
      performance of his duties hereunder shall be in Creighton,
      Pennsylvania.

    

    6. Base
      Salary/Bonuses and Relocation.

    

       6.1 Base
      Salary.
      Beginning September 1, 2007, the Company shall, during the continuance of the
      Executive's employment hereunder, pay to the Executive, and the Executive agrees
      to accept, in consideration of his services, a salary (the "Base Salary") at
      a
      rate of TWO HUNDRED FIFTY THOUSAND AND NO/100THS DOLLARS ($250,000.00) per
      year.
      Such salary shall be payable in accordance with the Company's normal payroll
      practices, so long as the Executive's employment continues as provided by this
      Agreement. Each calendar year thereafter, such annual Base Salary shall be
      reviewed by the Board of Directors and such annual base salary shall increase
      by
      an amount not less than the increase in the Consumer Price Index as published
      by
      the U.S. Government multiplied by the then existing base salary.

    

    6.2 Bonuses.
      Commencing with the Term of this Agreement, each year the Executive shall be
      eligible to a discretionary annual bonus (a “Bonus”), payable within ninety (90)
      days after the end of the fiscal year in an amount to be determined by the
      Board
      of Directors in consideration for the Executive's performance.

    

    6.3 Relocation.
      The
      Executive shall be entitled to receive a full relocation package to the
      Creighton, Pennsylvania area. This relocation shall be cash neutral to the
      Executive.

    

    7. Stock
      Grants and Options.
      

    

    7.1 Stock
      Grants.
      Commencing with the Term of this Agreement, the Executive shall receive 20,000
      shares of Common Stock of the Company. On each of September 1, 2008, September
      1, 2009, September 1, 2010 and September 1, 2011, the Executive shall receive
      20,000 additional shares of the Company’s Common Stock.

    

    7.2 Stock
      Options.
      Commencing with the Term of this Agreement, the Executive shall receive the
      following options (collectively, the "Stock Options") to purchase shares of
      the
      Company's Common Stock as provided below:

    

    (a) Stock
      Options to purchase 100,000 shares of the Company’s Common Stock at $4.00 per
      share which shall vest 1/3 each year over a three (3) year period pursuant
      to
      the Company’s 2004 Stock Option Plan.

    

    (b) Each
      calendar year the Board of Directors will review option grants and if decided
      by
      the Board of Directors, additional Stock Options will be issued to purchase
      shares of the Company's Common Stock.

    

    8. Deductions.
      The
      Company shall, in accordance with applicable law, deduct from the Base Salary
      and all other cash amounts payable to the Executive by the Company under the
      provisions of this Agreement, or, if applicable, to his estate, legal
      representatives or other beneficiary designated in writing by the Executive,
      all
      social security taxes, all federal, state and municipal taxes and all other
      charges and deductions which now or hereafter are required by law to be charges
      on the compensation of the Executive or charges on cash benefits payable by
      the
      Company hereunder to his estate, legal representatives or other
      beneficiary.

    

    9. Expenses;
      Vacation.
      The
      Company shall reimburse the Executive, upon production of reasonably detailed
      accounts and vouchers or other reasonable evidence of payment by the Executive,
      all in accordance with the Company's regular procedures in effect from time
      to
      time and in form suitable to establish the validity of such expenses for tax
      purposes, all ordinary, reasonable and necessary travel, entertainment and
      other
      business expenses as shall be incurred by him in the performance of his duties
      hereunder. During the Term of this Agreement, the Executive shall be entitled
      to
      twenty (20) days vacation annually with pay at the compensation in effect when
      the vacation is taken. 

    

    10. Benefits
      and Additional Benefits.

    

    10.1 Benefits.
      During
      the Term, the Executive shall be eligible to participate in any pension or
      profit-sharing plan or program of the Company now existing or hereafter
      established, on terms no less favorable than those made available to other
      senior executives of the Company.

    

    10.2 Additional
      Benefits.
      The
      Company shall provide the following additional benefits:

    

      (a) The
      Executive shall be entitled to receive such other benefits or rights as may
      be
      provided under any employment benefit plan provided by the Company that is
      now
      or hereafter will be reflected, including participation in life, medical,
      disability and dental insurance plans at no cost. 

    

      (b) The
      Executive shall have the choice to have the Company lease a car at Executive’s
      discretion (i.e., Mercedes, BMW, Lexus) up to $750.00 a month or receive the
      $750.00 per month as a car allowance. The Company shall pay all applicable
      insurance, maintenance, parking fees, and all associated costs.

    

    11. Confidential
      Information.
      All
      records, papers, models, programs and other documents and those kept or made
      by
      the Executive relating to the business or affairs of the Company, the Company's
      subsidiaries or affiliates, or any of the clients or customers of such entities
      shall be and remain the property of the Company, and to the-extent available
      shall be delivered by the Executive to the Company as may required, upon the
      expiration or earlier termination of the Executive's employment by the
      Company.

    

    12. Termination.

    

    12.1 Reasons
      for Termination.
      Notwithstanding the provisions of Sections 1 and 2 hereof, this Agreement may
      be
      terminated prior to the expiration of the Term by the Board of Directors of
      the
      Company upon the occurrence of any of the following events:

    

        12.1.1 The
      death
      of the Executive; or

    

       12.1.2 For
      cause, which shall be if the Executive is convicted of a felony criminal offense
      or the commission of an act of fraud on the Company.

    

    12.2 Consequences
      of Termination of this Agreement under Section 12.

    

       (a) In
      the
      event that this Agreement is terminated in accordance with Section 12.1.1 above,
      the Executive, his estate, legal representatives or designee shall be entitled
      to receive, in full satisfaction of all obligations due to the Executive from
      the Company hereunder, all accrued but unpaid Base Salary and any unpaid Bonus
      in respect of a fiscal year ended prior to the Executive's death, and upon
      payment of said sums the Company shall have no further obligations or
      liabilities to the Executive hereunder. All outstanding stock options are
      considered part of the estate of the Executive.

    

    (b) In
      the
      event that this Agreement is terminated in accordance with Section 12.1.2 above,
      the Executive shall have no further obligations or liabilities to the Executive
      hereunder.

    

      13. Notices.
      Any
      notice, direction or instruction required or permitted to be given hereunder
      shall be given in writing and may be given by telex, telegram, facsimile
      transmission or similar method if confirmed by mail as herein provided; by
      mail
      if sent postage prepaid by registered mail, return receipt requested; or by
      hand
      delivery to any party at the address of the party set forth below. If notice,
      direction or instruction is given by telex, telegram or facsimile transmission
      or similar method or by hand delivery, it shall be deemed to have been given
      or
      made on the day on which it was given, and if mailed, shall be deemed to have
      been given or made on the third business day following the day after which
      it
      was mailed. Any party may, from time to time, by like notice give notice of
      any
      change of address and in such event, the address of such party shall be deemed
      to be changed accordingly.

    

       (i) If
      to the
      Executive:

    

    Jorge
      E.
      Yepes

    15644
      SW
      53rd
      CT

    Miramar,
      Florida 33027

    

    (ii) If
      to the
      Company:

    

    Industrial
      Enterprises of America, Inc.

    711
      Third
      Avenue

        Suite
      1505

    New
      York,
      NY 10017

    

    14. General.

    

    14.1 Governing
      Law.
      This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      internal laws of the State of Delaware, regardless of the laws that might
      otherwise govern under applicable principles of conflicts of laws.

    

    14.2 Captions.
      The
      section headings contained herein are for reference purposes only and shall
      not
      in any way affect the meaning or interpretation of this Agreement.

    

    14.3 Entire
      Agreement.
      This
      Agreement sets forth the entire agreement and understanding of the parties
      relating to the subject matter hereof, and supersedes all prior agreements,
      arrangements and understandings, written or oral, between or among the parties,
      except as specifically provided herein. There are no oral promises, conditions,
      representations, understandings, interpretations or terms of any kind as
      conditions or inducements to the execution hereof or in effect among the
      parties. No custom or trade usage, nor course of conduct among the parties,
      shall be relied upon to vary the terms hereof.

    

    14.4 Successors
      and Assigns.
      This
      Agreement, and the Executive's rights and obligations hereunder, may be assigned
      by the Executive to a personal services company so long as such personal
      services company executes a contract similar to this one that provides the
      service of the Executive to the Company. The Executive may designate one or
      more
      beneficiaries to receive any amounts that would otherwise be payable hereunder
      to the Executive's estate. This Agreement shall be binding on any successor
      to
      the Company whether by merger, consolidation, acquisition of all or
      substantially all of the Company's assets or business or otherwise, as fully
      as
      if such successor were a signatory hereto, and the Company shall cause such
      successor to, and such successor shall, expressly assume the Company's
      obligations hereunder.

    

       14.5 Amendments;
      Waivers.
      This
      Agreement cannot be changed, modified or amended, and no provision or
      requirement hereof may be waived, without consent in writing of the parties
      hereto. However, in the event that the Company issues an Employee Directive
      which amends or modifies any policy specifically identified and incorporated
      into this Agreement, such policy automatically shall be deemed included as
      part
      of this Agreement without further consideration other than the continued
      performance of this Agreement's material terms by the Company. The failure
      of a
      party at any time or times to require performance of any provision hereof shall
      in no manner affect the right of such party at a later time to enforce the
      same.
      No waiver by a party of the breach of any term or covenant contained in this
      Agreement, whether by conduct or otherwise, in any one or more instances, shall
      be deemed to be, or construed as, a further or continuing waiver of any such
      breach, or a waiver of the breach of any other term or covenant contained in
      this Agreement.

    

    14.6 Beneficiaries.
      Whenever this Agreement provides for any payment to the Executive's estate,
      such
      payment may be made instead to such beneficiary or beneficiaries as the
      Executive may have designated in a writing filed with the Company. The Executive
      shall have the right to revoke any such designation and to re-designate a
      beneficiary or beneficiaries by written notice to the Company (and any
      applicable insurance company) to such effect.

    

    14.7 Further
      Assurances.
      The
      parties hereto agree that, after the execution of this Agreement, they will
      make, do, execute or cause or permit to be made, done or executed all such
      further and other lawful acts, deeds, things, devices, conveyances and
      assurances in law whatsoever as may be required to carry out the true intention
      and to give full force and effect to this Agreement.

    

       14.8 Ability
      to Fulfill Obligations.
      Neither
      the Company nor the Executive is a party to or bound by any agreement which
      would be violated by the terms of this Agreement.

    

       14.9 Severability.
      Should
      any provision of this Agreement be unenforceable or prohibited by any applicable
      law, this Agreement shall be considered divisible as to such provision which
      shall be inoperative, and the remainder of this Agreement shall be valid and
      binding as though such provision were not included herein.

    

       14.10 Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed to be an original. It shall not be necessary when making proof of this
      Agreement to account for more than one counterpart.

    

    14.11 Survival
      of Certain Provisions.
      The
      provisions of Sections 10, 11, and 12 shall, to the extent applicable, continue
      in full force and effect notwithstanding the expiration or earlier termination
      of this Agreement or of the Executive's employment in accordance with the terms
      of this Agreement.

    

    14.12 Arbitration
      of Disputes.
      Any
      dispute or controversy between the parties relating to or arising out of this
      Agreement or any amendment or modification hereof shall be determined by
      arbitration in the City and State of New York by and pursuant to the rules
      then
      prevailing of the American Arbitration Association. The arbitration award shall
      be final and binding upon the parties and judgment may be entered thereon by
      any
      court of competent jurisdiction. The service of any notice, process, motion
      or
      other document in connection with any arbitration under this Agreement or the
      enforcement of any arbitration award hereunder may be effectuated either by
      personal service upon a party or by certified mail duly addressed to him or
      to
      his executors, administrators, personal representatives, next of kin, successors
      or assigns, at the last known address or addresses of such party or parties.
      If
      the Executive is the prevailing party on any issue in any such arbitration
      proceeding, he shall be entitled to recover from the Company any actual expenses
      for attorney's fees and disbursements incurred by him.

    

    

    

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

    

    

    INDUSTRIAL
      ENTERPRISES 

    OF
      AMERICA, INC.

    

    

    By:
      _____________________   

    Name:
      

    Title:
      

    

    

    _____________________

    Jorge
      E.
      YepesFiled by Bowne Pure Compliance

 

Exhibit 10.1

AIR COMMERCIAL REAL ESTATE ASSOCIATION

STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE — NET

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

1. Basic Provisions (“Basic Provisions”).

1.1 Parties: This Lease (“Lease”), dated for reference purposes only June 22, 2007
is made by and between Acaso Investments, LLC
(“Lessor”) and Kreido Biofuels, Inc.
(“Lessee”), (Collectively the “Parties,” or
Individually a “Party”).

1.2 Premises: That certain real property, including all improvements therein or to be
provided by Lessor under the terms of this Lease,
and commonly known as 1070 Flynn Road, Camarillo,
located in the County of Ventura. State of California,
and generally described as (describe briefly the nature of the property and, if applicable,
the “Project”, if the property is located within a Project)
An approximately 21,125 sq. ft. concrete tilt-up industrial building on approximately
51,836 sq. ft. of land (“Premises”). (Sea also Paragraph 2)

1.3 Term: five (5) years and zero (0) months (“Original Term”)
commencing August 1, 2007 (“Commencement Date”) and ending July 31, 2012 (“Expiration Date”). (See also Paragraph 3)

1.4 Early Possession: “Upon lease execution (“Early Possession Date”).
(See also Paragraphs 3.2 and 3.3)

1.5 Base Rent: $14,153.00 per month (“Base Rent”), payable on the first (1st) day of
each month commencing August 1, 2007 . (See also Paragraph 4)

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

1.6 Base Rent and Other Monies Paid Upon Execution:

	 	(a)	 	Base Rent: $14,153.00 for the period August 1, 2007 through August 31,
2007

	 
	 	(b)	 	Security Deposit: $14,153.00 (“Security Deposit”). (See also Paragraph 5)

	 
	 	(c)	 	Association Fees: $0.00 for the period

	 
	 	(d)	 	Other: $2,535.00 for the expenses per paragraph 53

	 
	 	(e)	 	Total Due Upon Execution of this Lease: $28,306.00.

1.7 Agreed Use: Design and manufacturing of bio-fuel production and processing
equipment and related administrative activities. (See also Paragraph 6)

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

1.9 Real Estate Brokers: (See also Paragraph 15)

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

o                                          represents Lessor exclusively (“Lessor’s Broker”);

o                                          represents Lessee exclusively (“Lessee’s Broker”); or

þ CB Richard Ellis, Inc. represents both Lessor and Lessee (“Dual Agency”).

			
	 	 	 
	
	 	
	              
	 	              
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(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  

 

 

(“Guarantor”). (See also Paragraph 37)

1.10 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 62;

þ a plot plan depicting the Premises;

o a current set of the Rules and Regulations;

o a Work Letter;

o other (specify): 

 

 

2. Premises.

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

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

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

(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result
of the specific and unique use of the Premises by Lessee as compared with uses by tenants in
general, Lessee shall be fully responsible for the cost thereof, provided, however that if such
Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds
6 months’ Base Rent, Lessee may instead terminate

			
	 	 	 
	
	 	
	                  
	 	                  
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this
Lease unless Lessor notifies Lessee, in writing, within 10 days after receipt of
Lessee’s termination notice that Lessor has elected to pay the difference between the actual cost
thereof and an amount equal to 6 months Base Rent. If Lessee elects termination. Lessee shall
immediately cease the use of the Premises which requires such Capital Expenditure and deliver to
Lessor written notice specifying a termination date at least 90 days thereafter. Such termination
date shall, however, in no event be earlier than the last day that Lessee could legally utilize the
Premises without commencing such Capital Expenditure.

(b) If such Capital Expenditure is not the result of the specific and unique use of the
Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor and Lessee
shall allocate the obligation to pay for such costs pursuant to the
provisions of Paragraph 7.1(d),
provided, however, that if such Capital Expenditure is required during the last six months 2 year
of this Lease or Lesser reasonably determines that it is not economically feasible to pay its share
thereof, Lessor shall have the option to terminate this Lease upon 10 days prior written notice to
Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessor’s
termination notice that Lessee will pay for such Capital Expenditure.
If Lessor does not elect to
terminate, and fails to tender its share of any such Capital Expenditure, Lessee may advance such
funds and deduct same, with Interest, from Rent until Lessor’s share of such costs have been fully
paid. If Lessee is unable to finance Lessor’s share, or if the balance of the Rent due and
payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset
basis, Lessee shall have the right to terminals this Lease upon 30 days written notice to Lessor.

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

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

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

3. Term.

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

3.2 Early Possession. If Lessee totally or partially occupies the Premises prior to the
Commencement Date, the obligation to pay Base Rent shall be abated for the period of such early
possession. All other terms of this Lease (including but not limited to the obligations to pay Real
Property Taxes and insurance premiums and to maintain the Premises) shall be in effect during such
period. Any such early possession shall not affect the Expiration Date.

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

3.4 Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to
Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5).
Pending delivery of such evidence. Lessee shall be required to perform all of its

			
	 	 	 
	
	 	
	              
	 	              
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obligations under this Lease from and after the Start Date, including the payment of Rent,
notwithstanding Lessor’s election to withhold possession pending receipt of such evidence of
insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent
with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until
such conditions are satisfied.

4. Rent.

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

4.2 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of
the United States, without offset or deduction (except as specifically permitted in this Lease), on
or before the day on which it is due. All monetary amounts shall be rounded to the nearest whole
dollar. In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not
constitute a waiver and Lessee shall be obligated to pay the amount set forth in this Lease. Rent
for any period during the term hereof which is for less than one full calendar month shall be
prorated based upon the actual number of days of said month. Payment of Rent shall be made to
Lessor at its address stated herein or to such other persons or place as Lessor may from time to
time designate in writing. Acceptance of a payment which is less than the amount then due shall no:
be a waiver of Lessor’s rights to the balance of such Rent, regardless of Lessor’s endorsement of
any check so stating. In the event that any check, draft, or other instrument of payment given by
Lessee to Lessor is dishonored for any reason, Lessee agrees to pay
to Lessor the sum of $25 in
addition to any Late Charge and Lessor, at its option, may require all future Rent be paid by
cashier’s check. Payments will be applied first to accrued late charges and attorney’s fees, second
to accrued interest, then to Base Rent and Common Area Operating Expenses, and any remaining amount
to any other outstanding charges or costs.

4.3 Association Fees. In addition to the Base Rent, Lessee shall pay to Lessor each month an
amount equal to any owner’s association or condominium fees levied or assessed against the
Premises. Said monies shall be paid at the same time and in the same manner as the Base Rent

5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit
as security for Lessee’s faithful performance of its obligations under this Lease. If Lessee fails
to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any
portion of said Security Deposit for the payment of any amount due Lessor or to reimburse or
compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by
reason thereof. It Lessor uses or applies all or any portion of the Security Deposit, Lessee shall
within 10 days after written request therefor deposit monies with Lessor sufficient to restore
said Security Deposit to the full amount required by this Lease. If
the Base Rent increases during
the term of this lease, lessee shall, upon written request form Lessor, deposit additional moneys
with Lessor so that the total amount of the Security Deposit shall at all times bear the same
proportion to the increased Base Rent as the initial Security Deposit bere to the initial Base
Rent. Should the Agreed Use be amended to accommodate a material change in the business of
Lessee or to accommodate a sublessee or assignee. Lessor shall have the right to increase the
Security Deposit to the extent necessary, in Lessor’s reasonable judgment, to account for any
increased wear and tear that the Premises may suffer as a result
thereof. If a change in control of
Lessee occurs during this Lease and following such change the financial condition of Lessee is, in
Lessor’s reasonable judgement, significantly reduced, Lessee shall deposit such additional monies
with Lasser as shall be sufficient to cause the Security Deposit to be at a commercially
reasonable level based on such change in financial condition. Lessor shall not be required to keep
the Security Deposit separate from its general accounts. Within 14 days after the expiration or
termination of this Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and
otherwise within 3020 days after the Premises have been vacated pursuant to Paragraph 7.4(c)
below, Lessor shall return that portion of the Security Deposit not used or applied by Lessor. No
part of the Security Deposit shall be considered to be held in trust, to bear interest or to be
prepayment for any monies to be paid by Lessee under this Lease.

6 Use.

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

			
	 	 	 
	
	 	
	 

	 	 

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6.2 Hazardous Substances.

(a) Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease
shall mean any product, substance, or waste whose presence, use, manufacture, disposal,
transportation, or release, either by 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 Promises, (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 knowingly 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 affiliated with lessee or invited onto the Premises by
Lessee (except as set forth in subparagraph (d) below).

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

(e) Lessor Indemnification. Lessor and its successors and assigns shall indemnify, defend,
reimburse and hold Lessee, its employees and lenders, harmless from and against any and all
environmental damages, including 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 wilful 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. No termination, cancellation or release agreement
entered into by Lessor and Lessee shall release Lessor from its obligations under this Lease with
respect to Hazardous substances, unless specifically so agreed by Lessee in writing at the time of
such agreement.

(f) Investigations and Remediations. Lessor shall retain the responsibility and pay for any
investigations or remediation measures required by governmental entities having jurisdiction with
respect to the existence of Hazardous Substances on the Premises prior to Lessee’s occupancy,
unless such remediation measure is required as a result of Lessee’s use (including “Alterations”,
as defined in paragraph 7.3(a) below) of the Premises, in which event Lessee shall be responsible
for such payment. Lessee shall cooperate fully in any such activities at the request

			
	 	 	 
	
	 	
	 

	 	 

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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 therefore (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 continuo in full force and effect, or (ii) if the estimated cost to remediate-such
condition exceeds 12 times the then-monthly Base Rent-or $100,000, whichever is greater, give
written notice to Lessee, within 30 days after receipt by Lessor
of knowledge of the
occurrence of such Hazardous Substance Condition, of Lessor’s desire to terminate this Lease as of
the date 60 days following the date of such notice. In the event Lessor elects to give a termination
notice, Lessee may, within 10 days thereafter, give written notice to Lessor-of Lessee’s
commitment to pay the amount by which the cost of the remediation of such Hazardous Substance
Condition exceeds an amount equal to 12 times the then monthly Base Rent-or $100,000, whichever is
greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof- within -30
days following such commitment. In such event, this Lease shall continue in full-force and effect,
and Lessor shall proceed to make such remediation as soon as reasonably -possible after the
required-funds are available. If Lessee does-not-give such notice and provide the required funds or
assurance thereof within the time-provided, this Lease shall terminate as of the date specified in
Lessor’s notice of termination.

6.3 Lessee’s Compliance with Applicable Requirements. Except as otherwise provided in this
Lease, Lessee shall, at Lessee’s sole expense, fully, diligently and in a timely manner, materially
comply with all Applicable Requirements, the requirements of any applicable fire insurance
underwriter or rating bureau, and the 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 evicencing Lessee’s compliance with any Applicable Requirements
specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of
any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or
report pertaining to or involving the failure of Lessee or the Premises to comply with any
Applicable Requirements. Likewise, Lessee shall immediately give written notice to Lessor of: (i)
any water damage to the Premises and any suspected seepage, pooling, dampness or other condition
conducive to the production of mold; or (ii) any mustiness or other odors that might indicate the
presence of mold in the Premises.

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

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

7.1 Lessee’s Obligations.

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

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

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

(d) Replacement. Subject to Lessee’s indemnification of Lessor as set forth in Paragraph 8.7
below, and without relieving Lessee of liability resulting from Lessee’s failure to exercise and
perform good maintenance practices, if an item described in Paragraph 7.1(b) cannot be repaired
other than at a cost which is in excess of 50% of the cost of replacing such item, then such item
shall be replaced by Lessor, and the cost thereof shall be prorated between the Parties and Lessee
shall only be obligated to pay each month during the remainder of the term of this Lease, on the
date on which Base Rent is due, an amount equal to the product of multiplying the cost of such
replacement by a fraction, the numerator of which is one and the denominator of which is 144 (i.e.
1/144th of the cost per month) the useful life of such replacement, (in months). as reasonably determined by
landlord but not larger than 144 months. Lessee shall pay interest on the unamortized balance at the rate or 5% per
annum but may prepay its obligation at any time.

7.2 Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3
(Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by the Parties hereto
that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or
the equipment therein, all of which obligations are intended to be that of the Lessee.
Notwithstanding the foregoing. Lessor shall be responsible for the maintainance and repair of the
foundation, the external walls (but not painting, which is Lessee’s responsibility) and the
structural components of the Premises. Further, Lessor shall be responsible for any repairs necessitated by the gross
negligence or willful misconduct of Lessor or its agents, employees or contracts. It is the intention of the
Parties that the terms of this Lease govern the respective obligations of the Parties as to
maintenance and repair of the Premises, and they expressly waive the benefit of any statute now or
hereafter in effect to the extent it is inconsistent with the terms of this Lease.

7.3 Utility Installations; Trade Fixtures; Alterations.

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

(b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises
without Lessor’s prior written consent. Lessee may, however, make non-structural Utility
Installations to the interior of the Premises (excluding the roof) without such consent but upon
notice to Lessor, as long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, will not affect the electrical, plumbing,
HVAC, and/or life safety systems, and the cumulative cost thereof during this Lease as extended
does not exceed a sum equal to 36 month’s Base Rent in the
aggregate or a sum equal to one three month’s
Base Rent in any one year. Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written approval of Lessor.
Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor
chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall
desire to make and which require the consent of the Lessor shall be presented to Lessor in written
form with detailed plans. Consent shall be deemed conditioned upon Lessee’s: (i) acquiring all
applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the
plans and specifications prior to commencement of the work, and (iii) compliance with all
conditions of said permits and other Applicable Requirements in a prompt 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 to the extent available to Lessee. For work which
costs an amount in excess of one six 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.

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

7.4 Ownership; Removal; Surrender; and Restoration.

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

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

(c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any
earlier termination date, with all of the improvements, parts and surfaces thereof broom clean and
free of debris, and in good operating order, condition and state of repair, ordinary wear and tear
and damaged incurred by the gross negligence of Lessee or its agents, employees or Contractors
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
affiliated with Lessee or invited onto the Premises by Lessee
(except Hazardous Substances which were deposited via underground migration from areas
outside of the Premises, or if applicable, the Premises) even if such removal would require Lessee
to perform or pay for work that exceeds statutory requirements. Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee. Any personal property of Lessee not removed
on or before the Expiration Date or any earlier termination date shall be deemed to have
been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The
failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the
express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26
below.

8. Insurance; Indemnity.

8.1 Payment For Insurance. Lessee shall pay for all insurance required under Paragraph 8
except to the extent of the cost attributable to liability insurance carried by Lessor under Paragraph 8.2(b) in excess of
$2,000,000 per occurrence. Premiums for policy periods commencing prior to or extending beyond the
Lease term shall be prorated to correspond to the Lease term. Payment shall be made by Lessee to
Lessor within 10 30 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 properly damage based upon or arising out of the ownership,
use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount not less than
$1,000,000 per occurrence with an annual aggregate of not less than $2,000,000. Lessee shall add
Lessor as an additional insured by means of an endorsement at least as broad as the Insurance
Service Organization’s “Additional Insured-Managers or Lessors of Premises” Endorsement and
coverage shall also be extended to include 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. Lessee shall provide an endorsement on its liability policy(ies)
which provides that its insurance shall be primary to and not contributory with any similar
insurance carried by Lessor, whose insurance shall be

			
	 	 	 
	
	 	
	              
	 	              
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considered excess insurance only.

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

     8.3 Property Insurance — Building,
Improvements and Rental Value.

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

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

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

8.4 Lessee’s Property; Business Interruption Insurance.

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

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

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

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

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

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

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

 8.9 . Failure to Provide Insurance. —Lessee acknowledges that any failure on its part to
obtain-or maintain the insurance required
herein will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by
this Lease, the extent of which will be extremely difficult to aecortain. Accordingly, for any
month or portion-there of that Lessee does not maintain the required insurance and/or does not
provide Lessor with the required binders or certificates evidencing the existence of the required
insurance, the Base Rent shall be automatically increased, without any requirement for notice to
Lessee, by an amount equal-to-10% of the then existing Base Rent or $100, whichever is greater.
The parties agree that such increase in Base
Rent represents fair and reasonable compensation for
the additional risk/costs that Lessor will incur by reason of Lessee’s failure to maintain the
required insurance. Such increase in Base Rent shall in no event constitute a waiver of Lessee’s
-Default or Broach 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. Notwithstanding the foregoing, Premises Partial Damage shall not
include damage to windows, doors, and/or other similar items which Lessee has the responsibility to
repair or replace pursuant to the provisions of Paragraph 7.1.

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

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

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

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

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

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

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

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

9.6 Abatement of Rent; Lessee’s Remedies.

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

(b) Remedies. If Lessor shall be obligated to repair or restore the Premises and does not
commence, in a substantial and meaningful way, such repair or restoration within 90 60 days after
such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or
restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of
Lessee’s election to terminate this Lease on a date not less than 6030  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.

			
	 	 	 
	
	 	
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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 (within 20 days cf such termination).

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

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

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

11. Utilities and Services. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the Promises, 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, strikes, 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 will not be
[ILLEGIBLE] withheld or delayed.

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

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

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

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

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

(g) Notwithstanding the foregoing, allowing a diminimus portion of the Premises, ie. 20 square
feet or less, to be used by a third party vendor in connection with the installation of a vending
machine or payphone shall not constitute a subletting.

12.2 Terms and Conditions Applicable to Assignment and Subletting.

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

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

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

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

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

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

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

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

(a) Lessee hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent payable on
any sublease, and Lessor may collect such Rent and apply same toward Lessee’s obligations under
this Lease; provided, however, that until a Breach shall occur in the performance of Lessee’s
obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds
Lessee’s then outstanding obligations any such excess shall be refunded to Lessee. Lessor shall
not, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection
or 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

	 	 	 
	
	 	
	              
	 	              
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shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any
obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from
Lessee to the contrary.

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

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

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

(e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee,
who shall have the right to cure the Default of Lessee within the grace period, if any, specified
in such notice. The sublessee shall have a right of reimbursement and offset from and against
Lessee for any such Defaults cured by the sublessee.

13. Default; Breach; Remedies.

13.1 Default; Breach. A “Default” is defined as a failure by the Lessee to comply with or
perform any of the terms, covenants, conditions or Rules and
Regulations under this Lease. A “Breach” is defined as the occurrence of one or more of the following Defaults, and the failure of
Lessee to cure such Default within any applicable grace period:

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

(b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made
by Lessee hereunder, whether to-Lesser 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 (which notice and sure period shall be in lieu of and not in
addition to the notice and cure periods set forth in section 1161 of the California Code of Civil
Procedure).

(c) The commission of waste, act or acts constituting public or private nuisance,
and/or an illegal activity on the Premises by Lessee, where such actions continue for a period of 3
business days following written notice to Lessee.

(d) The failure by Lessee to provide (i) upon request of Lessor, reasonable written evidence
of compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an
unauthorized assignment or subletting, (iv) an Estoppel Certificate, (v) a requested
subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested
under Paragraph 42, (viii) material safety data sheets (MSDS), or (ix) any other documentation or
information which Lessor may reasonably require of Lessee under the terms of this Lease, where any
such failure continues for a period of 10 days following written notice to Lessee.

(e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or
of the rules adopted under Paragraph 40 hereof, other than those described in subparagraphs 13.1
(a), (b), (c) or (d), above, where such Default continues for a period of 30 days after written
notice; provided, however, that if the nature of Lessee’s Default is such that more than 30 days
are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee
commences such cure within said 30 day period and thereafter diligently prosecutes such cure to
completion. The foregoing notice and cure periods shall be in lieu of and not in addition to
the notice and cure periods set forth in section 1161 of the California Code of Civil Procedure.

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

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

(h) If the performance of Lessee’s obligations under this Lease is guaranteed: (i) the death
of a Guarantor, (ii) the termination of a Guarantor’s liability with respect to this Lease other
than in accordance with the terms of such guaranty, (iii) a Guarantor’s becoming insolvent or the
subject of a bankruptcy filing, (iv) a Guarantor’s refusal to honor the guaranty, or (v) a
Guarantor’s breach of its guaranty obligation or 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.

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

(a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case
this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned
at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid
Rent which would have been earned after termination until the time of award exceeds the amount of
such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the
time of award of the amount by which the unpaid Rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided;
and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused
by the Lessee’s failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including but not limited to the cost of
recovering possession of the Premises, expenses of reletting, including necessary renovation and
alteration of the Premises, reasonable attorneys’ fees, and that portion of any leasing commission
paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The
worth at the time of award of the amount referred to in provision (iii) of the immediately
preceding sentence shall be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of the District within which the Premises are located at the time of award
plus one percent. The amounts set forth in (i) and (ii) above shall be computed by allowing interest
at the rate set forth in Section 13.5 below. Efforts by Lessor to mitigate damages caused by
Lessee’s Breach of this Lease shall not waive Lessor’s right to recover damages under Paragraph
12. If termination of this Lease is obtained through the provisional remedy of unlawful detainer,
Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are
recoverable therein, or Lessor may reserve the right to recover all or any part thereof in a
separate suit. If a notice and grace period required under Paragraph 13.1 was not previously
given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful
detainer statute shall also constitute the notice required by Paragraph 13.1. In such case, the
applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run
concurrently, and the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling
Lessor to the remedies provided for in this Lease and/or by said statute.

(b) In accordance with California Civil Code §1951.4 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-of-paying by Lesser to or tore Lessee of any cash-or-other bonus, inducement or
consideration for Lessee’s entering into this Lease, all of which concessions are hereinafter
referred to as “Inducement Provisions,” shall be deemed conditioned upon Lessor’s full and
faithful performance of all of-the terms, covenants and conditions of this Lease. Upon Breach
of-this Lease by Lessee, any such Inducement Provision shall
automatically be deemed deleted from
this Loaso 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 Broach by Lessee. The acceptance by Lessor of rent or the cure of
the Broach 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.

13.3
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause
Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing and accounting
charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent
shall not be received by Lessor within 5 days after such amount shall be due, then, without any
requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge
equal to 405% of each such overdue amount or $100, whichever is greater. The Parties hereby agree
that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by
reason of such late payment. Acceptance of such late charge by Lessor shall in no event constitute
a waiver of Lessee’s Default or Breach with respect to such overdue amount, nor prevent the
exercise of any of the other rights and remedies granted hereunder.
In the event that a
late charge is payable hereunder, whether or not collected, for 3
consecutive installments of
Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall,
at Lessor’s option, become due and payable quarterly in advance.

13.4
13.5 Interest. Any monetary payment due Lessor hereunder, other than late charges,
not received by Lessor, when due as to

	 	 	 
	
	 	
	              
	 	              
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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.

13.5 13.6 Breach by Lessor.

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

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

14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent
domain or sold under the threat of the exercise
of said power (collectively “Condemnation”), this Lease shall terminate as to the part taken as of
the date the condemning authority takes title or possession, whichever first occurs. If more than
10% of the Building, or more than 25% of that portion of the Premises not occupied by any
building, is taken by Condemnation. Lessee may, at Lessee’s option, to be exercised in writing
within 10 days after Lessor shall have given Lessee written notice of such taking (or in the
absence of such notice, within 10 days after the condemning authority shall have taken possession)
terminate this Lease as of the date the condemning authority takes such possession. If Lessee does
not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force
and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced
in proportion to the reduction in utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Lessor, whether such award shall be
made as compensation for diminution in value of the leasehold, the value of the part taken, or for
severance damages; provided, however, that Lessee shall be entitled to any compensation 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,
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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 business 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 tho then most current “Estoppel Certificate” form
published by the AIR Commercial Real Estato Association, which shall contain 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 including,
without imitation, the Lessor’s obligation order § 1950.7 of the California Civil Code. Subject to the foregoing, the obligations and/or covenants in
this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined.

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

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

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

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

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

			
	 	 	 
	
	 	
	              
	 	              
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23. Notices.

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

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

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

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

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

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

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

(iii) Agent Representing Both Lessor and Lessee. A real estate agent,
either acting directly or through one or more
associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction,
but only with the knowledge and consent of both the Lessor and the Lessee. In a dual agency
situation, the agent has the following affirmative obligations to both the Lessor and the Lessee:
a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either
Lessor or the Lessee. b. Other duties to the Lessor and the Lessee as stated above in
subparagraphs (i) or (ii). In representing both Lessor and Lessee, the agent may not without the
express permission of the respective Party, disclose to the other Party that the Lessor will
accept rent in an amount less than that indicated in the listing or that the Lessee is willing to
pay a higher rent than that offered. The above duties of the agent in a real estate transaction do
not relieve a Lessor or Lessee from the responsibility to

			
	 	 	 
	
	 	
	              
	 	              
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protect their own interests. Lessor and Lessee should carefully read all agreements to assure
that they adequately express their understanding of the transaction. A real estate agent is a
person qualified to advise about real estate. If legal or tax advice is desired, consult a
competent professional.

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

(c) Lessor and Lessee agree to identity to Brokers as “Confidential” any communication or
information given Brokers that is considered by such Party to be confidential.

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

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

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

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

30. Subordination; Attornment; Non-Disturbance.

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

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

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

			
	 	 	 
	
	 	
	              
	 	              
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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, adornment and/or Non-Disturbance Agreement provided for herein.

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

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

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

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

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

36. Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party is
required to an act by or for the other Party, such consent shall not be unreasonably withheld or
delayed. Lessor’s actual reasonable costs and expenses (including but not limited to architects’,
attorneys’, engineers’ and other consultants’ fees) incurred in the consideration of, or response
to, a request by Lessee for any Lessor consent, including but not limited to consents to an
assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee
upon receipt of an invoice and supporting documentation
therefore. 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 to any then existing Default or
Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such
consent. The failure to specify herein any particular condition to Lessor’s consent shall not
preclude the imposition by Lessor at the time of consent of such further or other conditions as are
then reasonable with reference to the particular matter for which consent is being given. In the
event that either Party disagrees with any determination made by the other hereunder and
reasonably requests the reasons for such determination, the determining party shall furnish its
reasons in writing and in reasonable detail within 10 business days following such request.

37. Guarantor.

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

	 	 	 
	

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

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

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

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

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

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

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

39.4 Effect of Default on Options.

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

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

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

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

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

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

43. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of
money to be paid by one Party to the other under the provisions
hereof, the Party against whom the
obligation to pay the money is asserted shall have the right to make payment “under protest” and
such payment shall not be regarded as a voluntary payment and there
shall survive the right on the
part of said Party to institute suit for recovery of

	 	 	 
	

	 	
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such sum. If it shall be adjudged that there was no legal obligation on the part of said Party
to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay. A Party who does not initiate suit for the recovery
of sums paid “under protest” with 6 months shall be deemed to have waived its right to protest
such payment.

44. Authority; Multiple Parties; Execution.

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

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

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

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

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

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

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

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

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

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

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

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

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

	 	 	 
	

	 	
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LESSEE’S INTENDED USE.

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

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

	 	 	 	 	 	 	 	 	 
	Executed at:

	 	 	 	Executed at:	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 
	On:

	 	 	 	On:	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	By LESSOR:	 	By LESSEE:	 	 
	Acasc Investments, LLC	 	Kreido Biofuels, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	By: 

Name Printed:

	 	/s/ Peter Wollons
 

Peter Wollons
	 	By:

Name Printed:
	 	/s/ Joel Balbien
 

Joel Balbien
	 	 
	Title:

	 	Member
	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	By: 

Name Printed:

	 	/s/ Gary Ferris
 

Gary Ferris
	 	By:

Name Printed:
	 	/s/ Phil Lichetenberger
 

Phil Lichetenberger
	 	 
	Title:

	 	Member
	 	Title:
	 	Senior V.P. & CFO	 	 
	Address:

	 	 	 	Address:	 	 	 	 
	Telephone:

	 	(805) 389-3700
	 	Telephone:
	 	(805) 389 3499	 	 
	Facsimile:

	 	(805) 389-3708
	 	Facsimile:
	 	(805) 384 0989	 	 
	Federal ID No.

	 	 	 	Federal ID No.
	 	20-3240178	 	 
	 
	 	 	 	 	 	 	 	 
	BROKER:	 	BROKER:	 	 
	CB Richard Ellis, Inc.	 	CB Richard Ellis, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	Attn:

	 	Douglas H. Shaw
	 	Attn:
	 	Jim Meaney	 	 
	Title:

	 	First Vice President
	 	Title:
	 	First Vice President	 	 
	Address:

	 	771 East Daily Drive, Suite 300
	 	Address:
	 	771 East Daily Drive, Suite 300	 	 
	 	 	Camarillo, California 93010	 	 	 	Camarillo, California 93010	 	 
	Telephone:

	 	(805) 465-1627
	 	Telephone:
	 	(805) 465-1621	 	 
	Facsimile:

	 	(805 465-1621
	 	Facsimile:
	 	(805) 465-1665	 	 
	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: AIR COMMERCIAL REAL
ESTATE ASSOCIATION, 700 So. Flower Street, Suite 600, Los
Angeles, California 90017. (213)
687-8777. Fax No. (213) 687-8616

© Copyright 2001-By AIR Commercial Real Estate Association. All rights reserved.

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

	 	 	 
	

	 	
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RENT ADJUSTMENT(S)

STANDARD LEASE ADDENDUM

	 	 	 	 	 	 	 
	 

	 	Dated June 22, 2007	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By and Between (Lessor)
	 	Acaso Investments, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	(Lessee)
	 	Kreido Biofuels, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	Address of Premises:
	 	1070 Flynn Road	 	 
	 

	 	 	 	Camarillo, California	 	 

Paragraph 51

A. RENT ADJUSTMENTS:

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

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

	 	 	 	 	 	 	 
	 

	 	a. On (Fill in COLA Dates):	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	 

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

	 	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 

	. All Items	 	 
	 

	 	 	 	 

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

b. The
monthly rent payable in accordance with paragraph A.I.a. of this Addendum
shall be calculated as follows: the Base Rent set forth in paragraph 1.5 of the attached
Lease, shall be multiplied by a fraction the numerator of which shall be the CPI of the
calendar month 2 months prior to the month(s) specified in
paragraph A.I.a. above during
which the adjustment is to take effect, and the denominator of which shall be the CPI of
the calendar month which is 2 months prior to (select one): the o first month of the term
of this Lease as set forth in paragraph 1.3 (“Base Month”) or o
(Fill in Other “Base Month”):                                                             . The sum so calculated shall
constitute the new monthly rent hereunder, but in no event, shall any such new monthly
rent be less than the rent payable for the month immediately preceding the rent
adjustment.

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

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

	 	 	 	 	 	 	 
	 

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

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

	 	 	 	 	 
	On (Fill in FRA Adjustment Date(s)):	 	The New Base Rent shall be:
	August 1, 2008 
	 	$	14,577.59	 
	August 1, 2009 
	 	$	15,014.92	 
	August 1, 2010 
	 	$	15,465.37	 
	August 1, 2011 
	 	$	15,929.33	 

B. NOTICE:

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

C. BROKER’S FEE:

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

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

			
	 	 	 
	
	 	
	              
	 	              
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OPTION(S) TO EXTEND

STANDARD LEASE ADDENDUM

	 	 	 	 	 	 	 
	 

	 	Dated
	 	 	 	June 22, 2007
	 
	 	 	 	 	 	 
	 	 	By and Between (Lessor)	 	Acaso Investments, LLC
	 
	 	 	 	 	 	 
	 	 	By and Between (Lessee)	 	Kreido Biofuels, Inc.
	 
	 	 	 	 	 	 
	 	 	Address of Premises:	 	1070 Flynn Road
	 

	 	 	 	 	 	Camarillo, California

Paragraph
52

A. OPTION(S) TO EXTEND:

Lessor hereby grants to
Lessee the option to extend the term of this Lease for one (1)
additional five (5) yrs, 60 mth month period(s) commencing when the prior term expires upon each and
all of the following terms and conditions:

(i) In
order to exercise an option to extend, Lessee must give written notice of such election
to Lessor and Lessor must receive the same at least 9 but not more
than 12 months prior to the date
that the option period would commence, time being of the essence. If proper notification of the
exercise ot an option is not given and/or received, such option shall automatically expire. Options
(if there are more than one) may only be exercised consecutively.

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

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

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

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

	 	 	 	 	 	 	 	 	 
	o	 	 	1.	 	 	Cost of Living
Adjustment(s) (COLA)
	 
	 

	 	 	a.	 	 	On (Fill in COLA Dates):	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

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

 

All Items (1982-1984 – 100), herein referred to as “CPI”.

			
	
	 	
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b. The monthly rent payable in accordance with paragraph A.I.a. of this Addendum shall be
calculated as follows: the Base Rent set forth in paragraph 1.5 of the attached Lease, shall be
multiplied by a fraction the numerator of which shall be the CPI of the calendar month 2 months
prior to the month(s) specified in paragraph A.I.a. above during which the adjustment is to take
effect, and the denominator of which shall be the CPI of the calendar month which is 2 months prior
to (select one): o the first month of the term of this Lease as set forth in paragraph 1.3 (“Base
Month”) or o (Fill in Other “Base Month”);

 

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

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

	 	 	 	 	 	 	 
	þ	 	II.	 	Market Rental Value Adjustment(s) (MRV)
	 
	 	 	a.	 	On (Fill in MRV Adjustment Date(s)) August 1, 2012
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

			
	
	 	
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B. NOTICE:

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

C. BROKER’S FEE:

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

NOTE: These forms are often modified to meet changing requirements of law and needs of the
industry. Always write or call to make sure you are utilizing the most current form: AIR COMMERCIAL
REAL ESTATE ASSOCIATION, 700 S. Flower Street, Suite 500, Los Angeles, Calif. 90017

			
	
	 	
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ADDENDUM TO THAT STANDARD INDUSTRIAL/COMMERCIAL
SINGLE-TENANT LEASE — NET DATED JUNE _____, 2007
BY AND BETWEEN ACASO Investments, LLC AS LESSOR AND KREIDO BIOFUELS, INC. AS LESSEE FOR THAT
CERTAIN PROPERTY COMMONLY KNOWN AS 1070 FLYNN ROAD, CAMARILLO, CALIFORNIA

	53.	 	Notwithstanding any provisions in the Lease to the contrary, Lessee’s payment for Real
Property Taxes, property insurance (Section 8.3(a)) and landscape maintenance shall be fixed
at the following amounts, which shall be paid concurrently with the payments of Base Rent:

	 	 	 
	August 1, 2007 - July 31, 2008
	 	$2,535.00 per month
	August 1, 2008 - July 31, 2009
	 	$2,611.00 per month
	August 1, 2009 - July 31, 2010
	 	$2,689.00 per month
	August 1, 2010 - July 31, 2011
	 	$2,770.00 per month
	August 1, 2011 - July 31, 2012
	 	$2,853.00 per month

The foregoing fixed payments shall be made regardless of the actual costs of the items
mentioned, except that if Real Property Taxes and/or property insurance premiums should
increase as a result of any act (or omission) of Lessee, then Lessee shall be responsible for
such increased amount, in addition to the fixed payments set forth above. Nothing in this
paragraph shall affect Lessee’s obligations to pay any other sums due under the Lease,
including but not limited to costs of maintenance and repairs under Paragraph 7, other
insurance costs under Paragraph 8, and utilities and services under Paragraph 11.

	 	 	 
	54. Hazardous Materials:

	 	 As in any real estate transaction, it is recommended that you
consult with a professional such as a civil engineer, industrial
hygienist or other person with experience in evaluating the condition
of the property, including the possible presence of asbestos,
hazardous materials and underground storage tanks.

	 
	 	 
	55. ADA:

	 	Please be advised that an owner or tenant of real property may be
subject to the Americans With Disabilities Act (the ADA), a Federal
law codified at 42 USC Section 12101 et seq. Among other
requirements of the ADA that could apply to your property, Title III
of the ADA requires owners and tenants of “public accommodations” to
remove barriers to access by disabled persons and provide auxiliary
aids and services for hearing, vision or speech impaired persons by
January 26, 1992. The regulations under Title III of the ADA are
codified at 28 CFR Part 36. We recommend you review the ADA and
regulations, as CB Richard Ellis, Inc. cannot give you legal advise
on these issues.

			
	
	 	
	Lessor’s Initial
	 	Lessee’s Initial

 

 

 

	 	 	 
	56. Signage:

	 	Subject to the provisions of Paragraph 7.3 regarding Alterations,
Tenant shall have the right to place a sign identifying the Tenant
on the Premises. Tenant shall be solely responsible for the cost
of all permits, installation, maintenance, repair and electrical
usage for said sign. At the end of the Term, Tenant shall be
responsible for the sign’s removal and building repair required
after the sign’s removal.

	 
	 	 
	57. Outside Storage:

	 	No material is to be stored outside the building at any time. The
prohibition against outside storage includes, but is not limited to,
equipment, materials, inoperative vehicles, campers, trailers,
boats, barrels, pallets, and trash (other than in containers provided
by commercial trash collectors which are picked up on a regularly
scheduled basis).

	 
	 	 
	58. Subletting:

	 	If Lessor consents to a subletting, the following terms and
conditions shall apply to any subletting by Lessee of all or any part
of the Premises. 

	 
	 	 
	

	 	
To the extent that the base rent due under the sublease exceeds
the Base Rent due under the Lease, after deducting Lessee’s
reasonable costs associated with such subletting, Lessee and
Lessor shall share such increase on an equal basis. Irrespective
of the due date of rent under any sublease, Lessee shall not be
relieved of its liability to pay Base Rent and other sums on the due
dates set forth in the Lease.

	 
	 	 
	59. Lessee Obligation
to Pay Rent:

	 	Notwithstanding anything to the contrary contained in the Lease,
Lessee’s obligation to pay Rent shall continue until (i) Lessee has
removed all of its property from the Premises, (ii) Lessee has
made any repairs required under Paragraph 7.1, (iii) Lessee has
removed all alterations, improvements, additions and Utility
Installations which Lessor requires Lessee to remove pursuant to
Paragraph 7.4, and (iv) Lessee has removed any and all
Hazardous Substances from the Premises which are Lessee’s
responsibility under the Lease.

	 
	 	 
	60. Real Property
Taxes:

	 	If at any time after the date of this Lease, the methods of taxation
now prevailing shall be altered so that in lieu of or as a
supplement to or a substitute for the whole or any part of any Real
Property Taxes, there shall be assessed, reassessed or levied (a)
a tax, assessment, reassessment, levy, imposition or charge
wholly or partially as a net income, capital or franchise levy or
otherwise on the rents, issues, profits or income derived
therefrom, or (b) a tax, assessment, reassessment, levy (including
but not limited to any municipal state or federal levy), imposition
or

			
	
	 	
	Lessor’s Initial
	 	Lessee’s Initial

 

 

 

	 	 	 
	 

	 	charge measured by or based in whole or in part upon the Premises and
imposed upon Lessor, such taxes, assessments, reassessments or levies or the
part thereof so measured or based, shall be deemed to be included in the term
Real Property Taxes.

	 
	 	 
	61. Waivers:

	 	(a)    Lessee hereby
waives any rights which
it might otherwise have
under Section 1932(1)
and Sections 1941 and
1942 of the California
Civil Code (which
relate to the physical
conditions of the
Premises). 

	 
	 	 
	 

	 	(b)    Lessee hereby
waives any rights which
it might otherwise have
under Sections 1932(2)
and 1933 of the
California Civil Code
(which relate to
damages and
destruction).

	 
	 	 
	 

	 	(c)   Lessee hereby
waives any rights which
it might otherwise have
under Section 1265.130
of the California Code
of Civil Procedure
(which relates to
condemnation).

	 	 	 	 	 	 	 	 	 
	Executed at: Camarillo, California	 	 	 	Executed at: Camarillo, California
	 

	 	 
	 	 	 	 	 	 
	on:

	 	June 26, 2007
	 	 	 	on:
	 	June 22, 2007
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	LESSOR:

	 	 	 	 	 	LESSEE
	 	:
	Acaso Investments, LLC	 	 	 	Kreido Biofuels, Inc.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Peter Wollons
	 	 	 	By:
	 	/s/ Joel Balbien
	 

	 	 
	 	 	 	 	 	 
	Name
(Printed)
 Peter Wollons	 	 	 	Name (Printed): Joel Balbien
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	Member
	 	 	 	Title:
	 	 Chief Executive Officer
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Gary Ferris
	 	 	 	By:
	 	/s/ Phil Lichtenberger
	 

	 	 
	 	 	 	 	 	 
	Name (Printed) Gary Ferris	 	 	 	Name
(Printed) Phil Lichtenberger
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	Member
	 	 	 	Title:
	 	 Senior V.P. & CFO
	 

	 	 
	 	 	 	 	 	 

	 	 	 
	
	 	
	Lessor’s Initial
	 	Lessee’s Initial

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