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                                                                    Exhibit 10.1

                              BROADVIEW MEDIA, INC.
                           2006 EQUITY INCENTIVE PLAN

                                   SECTION 1.
                                   DEFINITIONS

     As used herein, the following terms shall have the meanings indicated
below:

     (a) "Administrator" shall mean the Board of Directors of the Company, or
one or more Committees appointed by the Board, as the case may be.

     (b) "Affiliate(s)" shall mean a Parent or Subsidiary of the Company.

     (c) "Award" shall mean any grant of an Option, Restricted Stock Award,
Restricted Stock Unit Award, Stock Appreciation Right or Performance Award.

     (d) "Committee" shall mean a Committee of two or more directors who shall
be appointed by and serve at the pleasure of the Board. To the extent necessary
for compliance with Rule 16b-3, or any successor provision, each of the members
of the Committee shall be a "non-employee director." Solely for purposes of this
Section 1(d), "non-employee director" shall have the same meaning as set forth
in Rule 16b-3, or any successor provision, as then in effect, of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended.
Further, to the extent necessary for compliance with the limitations set forth
in Internal Revenue Code Section 162(m), each of the members of the Committee
shall be an "outside director" within the meaning of Code Section 162(m) and the
regulations issued thereunder.

     (e) The "Company" shall mean Broadview Media, Inc., a Minnesota
corporation.

     (f) "Fair Market Value" as of any date shall mean (i) if such stock is
listed on the Nasdaq National Market, Nasdaq SmallCap Market, or an established
stock exchange, the price of such stock at the close of the regular trading
session of such market or exchange on such date, as reported by The Wall Street
Journal or a comparable reporting service, or, if no sale of such stock shall
have occurred on such date, on the next preceding date on which there was a sale
of stock; (ii) if such stock is not so listed on the Nasdaq National Market,
Nasdaq SmallCap Market, or an established stock exchange, the average of the
closing "bid" and "asked" prices quoted by the OTC Bulletin Board, the National
Quotation Bureau, or any comparable reporting service on such date or, if there
are no quoted "bid" and "asked" prices on such date, on the next preceding date
for which there are such quotes; or (iii) if such stock is not publicly traded
as of such date, the per share value as determined by the Board, or the
Committee, in its sole discretion by applying principles of valuation with
respect to the Company's Common Stock.

     (g) The "Internal Revenue Code" or "Code" is the Internal Revenue Code of
1986, as amended from time to time.

     (h) "Option" means an incentive stock option or nonqualified stock option
granted pursuant to the Plan.

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     (i) "Parent" shall mean any corporation which owns, directly or indirectly
in an unbroken chain, fifty percent (50%) or more of the total voting power of
the Company's outstanding stock.

     (j) The "Participant" means (i) a key employee of the Company or any
Affiliate to whom an incentive stock option has been granted pursuant to Section
9; (ii) a consultant or advisor to, or director, key employee or officer, of the
Company or any Affiliate to whom a nonqualified stock option has been granted
pursuant to Section 10; (iii) a consultant or advisor to, or director, key
employee or officer, of the Company or any Affiliate to whom a Restricted Stock
Award or Restricted Stock Unit Award has been granted pursuant to Section 11;
(iv) a consultant or advisor to, or director, key employee or officer, of the
Company or any Affiliate to whom a Performance Award has been granted pursuant
to Section 12; or (v) a consultant or advisor to, or director, key employee or
officer, of the Company or any Affiliate to whom a Stock Appreciation Right has
been granted pursuant to Section 13.

     (k) "Performance Award" shall mean any Performance Shares or Performance
Units granted pursuant to Section 12 hereof.

     (l) "Performance Objective(s)" shall mean one or more performance
objectives established by the Administrator, in its sole discretion, for Awards
granted under this Plan. For any Awards that are intended to qualify as
"performance-based compensation" under Code Section 162(m), the Performance
Objectives shall be limited to any one, or a combination of, (i) revenue, (ii)
net income, (iii) stockholders' equity, (iv) earnings per share, (v) return on
equity, (vi) return on assets, (vii) total shareholder return, (viii) net
operating income, (ix) cost controls, (x) cash flow, (xi) increase in revenue,
(xii) economic value added, (xiii) increase in share price or earnings, (xiv)
return on investment, (xv) department, business unit or subsidiary performance
goals, (xvi) client contracting goals, (xvii) technological and business
development milestones and enrollment, course offering and contracting goals,
(xviii) increase in market share, (xix) enrollment certification, regulatory or
commercial milestones, and (xx) ratings and quality control, in all cases
including, if selected by the Administrator, threshold, target and maximum
levels.

     (m) "Performance Period" shall mean the period, established at the time any
Performance Award is granted or at any time thereafter, during which any
Performance Objectives specified by the Administrator with respect to such
Performance Award are to be measured.

     (n) "Performance Share" shall mean any grant pursuant to Section 12 hereof
of an award, which value, if any, shall be paid to a Participant by delivery of
shares of Common Stock of the Company upon achievement of such Performance
Objectives during the Performance Period as the Administrator shall establish at
the time of such grant or thereafter.

     (o) "Performance Unit" shall mean any grant pursuant to Section 12 hereof
of an award, which value, if any, shall be paid to a Participant by delivery of
cash upon achievement of such Performance Objectives during the Performance
Period as the Administrator shall establish at the time of such grant or
thereafter.

     (p) The "Plan" means the Broadview Media, Inc. 2006 Equity Incentive Plan,
as amended hereafter from time to time, including the form of Agreements as they
may be modified by the Administrator from time to time.

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     (q) "Restricted Stock Award" or "Restricted Stock Unit Award" shall mean
any grant of restricted shares of Stock of the Company or the grant of any
restricted stock units pursuant to Section 11 hereof.

     (r) "Stock," "Option Stock" or "Common Stock" shall mean Common Stock of
the Company (subject to adjustment as described in Section 14) reserved for
Options and Awards pursuant to this Plan.

     (s) "Stock Appreciation Right" shall mean a grant pursuant to Section 13
hereof.

     (t) A "Subsidiary" shall mean any corporation of which fifty percent (50%)
or more of the total voting power of the Company's outstanding Stock is owned,
directly or indirectly in an unbroken chain, by the Company.

                                   SECTION 2.
                                     PURPOSE

     The purpose of the Plan is to promote the success of the Company and its
Affiliates by facilitating the employment and retention of competent personnel
and by furnishing incentive to officers, directors, employees, consultants, and
advisors upon whose efforts the success of the Company and its Affiliates will
depend to a large degree.

     It is the intention of the Company to carry out the Plan through the
granting of Options which will qualify as "incentive stock options" under the
provisions of Section 422 of the Internal Revenue Code, or any successor
provision, pursuant to Section 9 of this Plan; through the granting of
"nonqualified stock options" pursuant to Section 10 of this Plan; through the
granting of Restricted Stock Awards and Restricted Stock Unit Awards pursuant to
Section 11 of this Plan; through the granting of Performance Awards pursuant to
Section 12 of this Plan; and through the granting of Stock Appreciation Rights
pursuant to Section 13 of this Plan. Adoption of this Plan shall be and is
expressly subject to the condition of approval by the shareholders of the
Company within twelve (12) months before or after the adoption of the Plan by
the Board of Directors. In no event shall any Awards be granted prior to the
date this Plan is approved by the shareholders of the Company.

                                   SECTION 3.
                             EFFECTIVE DATE OF PLAN

     The Plan shall be effective as of the date of adoption by the Board of
Directors, subject to approval by the shareholders of the Company as required in
Section 2.

                                   SECTION 4.
                                 ADMINISTRATION

     The Plan shall be administered by the Board of Directors of the Company
(hereinafter referred to as the "Board") or by a Committee which may be
appointed by the Board from time to time to administer the Plan (hereinafter
collectively referred to as the "Administrator"). Except as otherwise provided
herein, the Administrator shall have all of the powers vested in it under the
provisions of the Plan, including but not limited to exclusive authority to
determine, in
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its sole discretion, whether an Award shall be granted; the individuals to whom,
and the time or times at which, Awards shall be granted; the number of shares
subject to each Award; the option price; and the performance criteria, if any,
and any other terms and conditions of each Award. The Administrator shall have
full power and authority to administer and interpret the Plan, to make and amend
rules, regulations and guidelines for administering the Plan, to prescribe the
form and conditions of the respective agreements evidencing each Award (which
may vary from Participant to Participant), and to make all other determinations
necessary or advisable for the administration of the Plan. The Administrator's
interpretation of the Plan, and all actions taken and determinations made by the
Administrator pursuant to the power vested in it hereunder, shall be conclusive
and binding on all parties concerned.

     No member of the Board or the Committee shall be liable for any action
taken or determination made in good faith in connection with the administration
of the Plan. In the event the Board appoints a Committee as provided hereunder,
any action of the Committee with respect to the administration of the Plan shall
be taken pursuant to a majority vote of the Committee members or pursuant to the
written resolution of all Committee members.

                                   SECTION 5.
                                  PARTICIPANTS

     The Administrator shall from time to time, at its discretion and without
approval of the shareholders, designate those employees, officers, directors,
consultants, and advisors of the Company or of any Affiliate to whom Awards
shall be granted under this Plan; provided, however, that consultants or
advisors shall not be eligible to receive Awards hereunder unless such
consultant or advisor renders bona fide services to the Company or any Affiliate
and such services are not in connection with the offer or sale of securities in
a capital raising transaction and do not directly or indirectly promote or
maintain a market for the Company's securities. The Administrator shall, from
time to time, at its discretion and without approval of the shareholders,
designate those employees of the Company or any Affiliate to whom Awards,
including incentive stock options shall be granted under this Plan. The
Administrator may grant additional Awards, including incentive stock options,
under this Plan to some or all Participants then holding Awards, or may grant
Awards solely or partially to new Participants. In designating Participants, the
Administrator shall also determine the number of shares to be optioned or
awarded to each such Participant and the performance criteria applicable to each
Performance Award. The Administrator may from time to time designate individuals
as being ineligible to participate in the Plan.

     Notwithstanding anything in the Plan to the contrary, the following limits
will apply to Awards granted under the Plan:

          (a) In no event shall a Participant be granted Options or Stock
Appreciation Rights during any fiscal year of the Company covering in the
aggregate more than two-hundred thousand (200,000) shares of Stock, subject to
adjustment as provided in Section 14; provided, however, that a share of Stock
subject to a Stock Appreciation Right that is granted in tandem with an Option
shall count as one share against this limitation.

          (b) In no event shall a Participant be granted Restricted Stock Awards
or, to the extent payable in or measured by the value of shares of Stock,
Restricted Stock Unit Awards during any fiscal year of the Company covering in
the aggregate more than two-hundred thousand (200,000) shares of Stock, subject
to adjustment as provided in Section 14.

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          (c) To the extent payable in or measured by the value of shares of
Stock, in no event shall a Participant be granted Performance Awards during any
fiscal year of the Company covering in the aggregate more than two-hundred
thousand (200,000) shares of Stock, subject to adjustment as provided in Section
14.

                                   SECTION 6.
                                      STOCK

     The Stock to be optioned under this Plan shall consist of authorized but
unissued shares of Common Stock. One million (1,000,000) shares of Common Stock
shall be reserved and available for Awards under the Plan; provided, however,
that the total number of shares of Common Stock reserved for Awards under this
Plan shall be subject to adjustment as provided in Section 14 of the Plan; and
provided, further, that all shares of Stock reserved and available under the
Plan shall constitute the maximum aggregate number of shares of Stock that may
be issued through incentive stock options. The following shares of Stock shall
continue to be reserved and available for Awards granted pursuant to the Plan:
(i) any outstanding Award that expires for any reason, (ii) any portion of an
outstanding Option or Stock Appreciation Right that is terminated prior to
exercise, (iii) any portion of an Award that is terminated prior to the lapsing
of the risks of forfeiture on such Award, (iv) shares of Stock used to pay the
exercise price under any Award, (v) shares of Stock used to satisfy any tax
withholding obligation attributable to any Award, whether such shares are
withheld by the Company or tendered by the Participant, and (vi) shares of Stock
covered by an Award to the extent the Award is settled in cash.

                                   SECTION 7.
                                DURATION OF PLAN

     Incentive stock options may be granted pursuant to the Plan from time to
time during a period of ten (10) years from the effective date as defined in
Section 3. Other Awards may be granted pursuant to the Plan from time to time
after the effective date of the Plan and until the Plan is discontinued or
terminated by the Administrator.

                                   SECTION 8.
                                    PAYMENT

     Participants may pay for shares upon exercise of Options granted pursuant
to this Plan with cash, personal check, certified check or, if approved by the
Administrator in its sole discretion, previously-owned shares of the Company's
Common Stock, or any combination thereof. Any stock so tendered as part of such
payment shall be valued at such stock's then Fair Market Value, or such other
form of payment as may be authorized by the Administrator. The Administrator
may, in its sole discretion, limit the forms of payment available to the
Participant and may exercise such discretion any time prior to the termination
of the Option granted to the Participant or upon any exercise of the Option by
the Participant. "Previously-owned shares" means shares of the Company's Common
Stock which the Participant has owned for at least six (6) months prior to the
exercise of the Option, or for such other period of time as may be required by
generally accepted accounting principles.

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     With respect to payment in the form of Common Stock of the Company, the
Administrator may require advance approval or adopt such rules as it deems
necessary to assure compliance with Rule 16b-3, or any successor provision, as
then in effect, of the General Rules and Regulations under the Securities
Exchange Act of 1934, if applicable.

                                   SECTION 9.
                 TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS

     Each incentive stock option granted pursuant to this Section 9 shall be
evidenced by a written incentive stock option agreement (the "Option
Agreement"). The Option Agreement shall be in such form as may be approved from
time to time by the Administrator and may vary from Participant to Participant;
provided, however, that each Participant and each Option Agreement shall comply
with and be subject to the following terms and conditions:

     (a) Number of Shares and Option Price. The Option Agreement shall state the
total number of shares covered by the incentive stock option. Except as
permitted by Code Section 424(d), or any successor provision, the option price
per share shall not be less than one hundred percent (100%) of the per share
Fair Market Value of the Common Stock on the date the Administrator grants the
Option; provided, however, that if a Participant owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or of its Parent or any Subsidiary, the option price per share of an
incentive stock option granted to such Participant shall not be less than one
hundred ten percent (110%) of the per share Fair Market Value of the Company's
Common Stock on the date of the grant of the Option. The Administrator shall
have full authority and discretion in establishing the option price and shall be
fully protected in so doing.

     (b) Term and Exercisability of Incentive Stock Option. The term during
which any incentive stock option granted under the Plan may be exercised shall
be established in each case by the Administrator. Except as permitted by Code
Section 424(d), in no event shall any incentive stock option be exercisable
during a term of more than ten (10) years after the date on which it is granted;
provided, however, that if a Participant owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of its Parent or any Subsidiary, the incentive stock option granted
to such Participant shall be exercisable during a term of not more than five (5)
years after the date on which it is granted.

          The Option Agreement shall state when the incentive stock option
becomes exercisable and shall also state the maximum term during which the
Option may be exercised. In the event an incentive stock option is exercisable
immediately, the manner of exercise of the Option in the event it is not
exercised in full immediately shall be specified in the Option Agreement. The
Administrator may accelerate the exercisability of any incentive stock option
granted hereunder which is not immediately exercisable as of the date of grant.

     (c) Nontransferability. No incentive stock option shall be transferable, in
whole or in part, by the Participant other than by will or by the laws of
descent and distribution. During the Participant's lifetime, the incentive stock
option may be exercised only by the Participant. If the Participant shall
attempt any transfer of any incentive stock option granted under the Plan during
the Participant's lifetime, such transfer shall be void and the incentive stock
option, to the extent not fully exercised, shall terminate.

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     (d) No Rights as Shareholder. A Participant (or the Participant's successor
or successors) shall have no rights as a shareholder with respect to any shares
covered by an incentive stock option until the date of the issuance of a stock
certificate evidencing such shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the date
such stock certificate is actually issued (except as otherwise provided in
Section 14 of the Plan).

     (e) Withholding. The Company or its Affiliate shall be entitled to withhold
and deduct from future wages of the Participant all legally required amounts
necessary to satisfy any and all withholding and employment-related taxes
attributable to the Participant's exercise of an incentive stock option or a
"disqualifying disposition" of shares acquired through the exercise of an
incentive stock option as defined in Code Section 421(b). In the event the
Participant is required under the Option Agreement to pay the Company, or make
arrangements satisfactory to the Company respecting payment of, such withholding
and employment-related taxes, the Administrator may, in its discretion and
pursuant to such rules as it may adopt, permit the Participant to satisfy such
obligation, in whole or in part, by electing to have the Company withhold shares
of Common Stock otherwise issuable to the Participant as a result of the
exercise of the incentive stock option having a Fair Market Value equal to the
minimum required tax withholding, based on the minimum statutory withholding
rates for federal and state tax purposes, including payroll taxes, that are
applicable to the supplemental income resulting from such exercise. In no event
may the Company or any Affiliate withhold shares having a Fair Market Value in
excess of such statutory minimum required tax withholding. The Participant's
election to have shares withheld for this purpose shall be made on or before the
date the incentive stock option is exercised or, if later, the date that the
amount of tax to be withheld is determined under applicable tax law. Such
election shall be approved by the Administrator and otherwise comply with such
rules as the Administrator may adopt to assure compliance with Rule 16b-3, or
any successor provision, as then in effect, of the General Rules and Regulations
under the Securities Exchange Act of 1934, if applicable.

     (f) Other Provisions. The Option Agreement authorized under this Section 9
shall contain such other provisions as the Administrator shall deem advisable.
Any such Option Agreement shall contain such limitations and restrictions upon
the exercise of the Option as shall be necessary to ensure that such Option will
be considered an "incentive stock option" as defined in Section 422 of the
Internal Revenue Code or to conform to any change therein.

                                   SECTION 10.
               TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS

     Each nonqualified stock option granted pursuant to this Section 10 shall be
evidenced by a written nonqualified stock option agreement (the "Option
Agreement"). The Option Agreement shall be in such form as may be approved from
time to time by the Administrator and may vary from Participant to Participant;
provided, however, that each Participant and each Option Agreement shall comply
with and be subject to the following terms and conditions:

     (a) Number of Shares and Option Price. The Option Agreement shall state the
total number of shares covered by the nonqualified stock option. Unless
otherwise determined by the Administrator, the option price per share shall be
one hundred percent (100%) of the per share Fair Market Value of the Common
Stock on the date the Administrator grants the Option.

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     (b) Term and Exercisability of Nonqualified Stock Option. The term during
which any nonqualified stock option granted under the Plan may be exercised
shall be established in each case by the Administrator. The Option Agreement
shall state when the nonqualified stock option becomes exercisable and shall
also state the maximum term during which the Option may be exercised. In the
event a nonqualified stock option is exercisable immediately, the manner of
exercise of the Option in the event it is not exercised in full immediately
shall be specified in the Option Agreement. The Administrator may accelerate the
exercisability of any nonqualified stock option granted hereunder which is not
immediately exercisable as of the date of grant.

     (c) Transferability. The Administrator may, in its sole discretion, permit
the Participant to transfer any or all nonqualified stock options to any member
of the Participant's "immediate family" as such term is defined in Rule 16a-1(e)
promulgated under the Securities Exchange Act of 1934, or any successor
provision, or to one or more trusts whose beneficiaries are members of such
Participant's "immediate family" or partnerships in which such family members
are the only partners; provided, however, that the Participant cannot receive
any consideration for the transfer and such transferred nonqualified stock
option shall continue to be subject to the same terms and conditions as were
applicable to such nonqualified stock option immediately prior to its transfer.

     (d) No Rights as Shareholder. A Participant (or the Participant's successor
or successors) shall have no rights as a shareholder with respect to any shares
covered by a nonqualified stock option until the date of the issuance of a stock
certificate evidencing such shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the date
such stock certificate is actually issued (except as otherwise provided in
Section 14 of the Plan).

     (e) Withholding. The Company or its Affiliate shall be entitled to withhold
and deduct from future wages of the Participant all legally required amounts
necessary to satisfy any and all withholding and employment-related taxes
attributable to the Participant's exercise of a nonqualified stock option. In
the event the Participant is required under the Option Agreement to pay the
Company, or make arrangements satisfactory to the Company respecting payment of,
such withholding and employment-related taxes, the Administrator may, in its
discretion and pursuant to such rules as it may adopt, permit the Participant to
satisfy such obligation, in whole or in part, by delivering shares of the
Company's Common Stock or by electing to have the Company withhold shares of
Common Stock otherwise issuable to the Participant as a result of the exercise
of the nonqualified stock option having a Fair Market Value equal to the minimum
required tax withholding, based on the minimum statutory withholding rates for
federal and state tax purposes, including payroll taxes, that are applicable to
the supplemental income resulting from such exercise. In no event may the
Company or any Affiliate withhold shares having a Fair Market Value in excess of
such statutory minimum required tax withholding. The Participant's election to
deliver shares or to have shares withheld for this purpose shall be made on or
before the date the nonqualified stock option is exercised or, if later, the
date that the amount of tax to be withheld is determined under applicable tax
law. Such election shall be approved by the Administrator and otherwise comply
with such rules as the Administrator may adopt to assure compliance with Rule
16b-3, or any successor provision, as then in effect, of the General Rules and
Regulations under the Securities Exchange Act of 1934, if applicable.

     (f) Other Provisions. The Option Agreement authorized under this Section 10
shall contain such other provisions as the Administrator shall deem advisable.

<PAGE>

                                   SECTION 11.
                RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS

     Each Restricted Stock Award or Restricted Stock Unit Award granted pursuant
to the Plan shall be evidenced by a written restricted stock or restricted stock
unit agreement (the "Restricted Stock Agreement" or "Restricted Stock Unit
Agreement," as the case may be). The Restricted Stock Agreement or Restricted
Stock Unit Agreement shall be in such form as may be approved from time to time
by the Administrator and may vary from Participant to Participant; provided,
however, that each Participant and each Restricted Stock Agreement or Restricted
Stock Unit Agreement shall comply with and be subject to the following terms and
conditions:

     (a) Number of Shares. The Restricted Stock Agreement or Restricted Stock
Unit Agreement shall state the total number of shares of Stock covered by the
Restricted Stock Award or Restricted Stock Unit Award.

     (b) Risks of Forfeiture. The Restricted Stock Agreement or Restricted Stock
Unit Agreement shall set forth the risks of forfeiture, if any, including risks
of forfeiture based on Performance Objectives, which shall apply to the shares
of Stock covered by the Restricted Stock Award or Restricted Stock Unit Award,
and shall specify the manner in which such risks of forfeiture shall lapse. The
Administrator may, in its sole discretion, modify the manner in which such risks
of forfeiture shall lapse but only with respect to those shares of Stock which
are restricted as of the effective date of the modification.

     (c) Issuance of Shares; Rights as Shareholder.

          (i) With respect to a Restricted Stock Award, the Company shall cause
to be issued a stock certificate representing such shares of Stock in the
Participant's name, and shall deliver such certificate to the Participant;
provided, however, that the Company shall place a legend on such certificate
describing the risks of forfeiture and other transfer restrictions set forth in
the Participant's Restricted Stock Agreement and providing for the cancellation
and return of such certificate if the shares of Stock subject to the Restricted
Stock Award are forfeited. Until the risks of forfeiture have lapsed or the
shares subject to such Restricted Stock Award have been forfeited, the
Participant shall be entitled to vote the shares of Stock represented by such
stock certificates and shall receive all dividends attributable to such shares,
but the Participant shall not have any other rights as a shareholder with
respect to such shares.

          (ii) With respect to a Restricted Stock Unit Award, as the risks of
forfeiture on the restricted stock units lapse, the Participant shall be
entitled to payment of the Restricted Stock Units. The Administrator may, in its
sole discretion, pay Restricted Stock Units in cash, shares of Stock or any
combination thereof. If payment is made in shares of Stock, the Administrator
shall cause to be issued one or more stock certificates in the Participant's
name and shall deliver such certificates to the Participant in satisfaction of
such restricted stock units. Until the risks of forfeiture on the restricted
stock units have lapsed, the Participant shall not be entitled to vote any
shares of stock which may be acquired through the restricted stock units, shall
not receive any dividends attributable to such shares, and shall not have any
other rights as a shareholder with respect to such shares.

     (d) Withholding Taxes. The Company or its Affiliate shall be entitled to
withhold and deduct from future wages of the Participant all legally required
amounts necessary to satisfy any and all withholding and employment-related
taxes attributable to the Participant's Restricted
<PAGE>

Stock Award or Restricted Stock Unit Award. In the event the Participant is
required under the Restricted Stock Agreement or Restricted Stock Unit Agreement
to pay the Company, or make arrangements satisfactory to the Company respecting
payment of, such withholding and employment-related taxes, the Administrator
may, in its discretion and pursuant to such rules as it may adopt, require the
Participant to satisfy such obligations, in whole or in part, by delivering
shares of Stock received pursuant to the Restricted Stock Award or Restricted
Stock Unit Award on which the risks of forfeiture have lapsed or to permit the
Participant to satisfy such obligations, in whole or in part, by delivering
shares of Common Stock, including shares of Stock received pursuant to the
Restricted Stock Award or Restricted Stock Unit Award on which the risks of
forfeiture have lapsed. Such shares shall have a Fair Market Value equal to the
minimum required tax withholding, based on the minimum statutory withholding
rates for federal and state tax purposes, including payroll taxes, that are
applicable to the supplemental income resulting from the lapsing of the risks of
forfeiture on such restricted stock or restricted stock unit. In no event may
the Participant deliver shares having a Fair Market Value in excess of such
statutory minimum required tax withholding. The Participant's election to
deliver shares of Common Stock for this purpose shall be made on or before the
date that the amount of tax to be withheld is determined under applicable tax
law. Such election shall be approved by the Administrator and otherwise comply
with such rules as the Administrator may adopt to assure compliance with Rule
16b-3, or any successor provision, as then in effect, of the General Rules and
Regulations under the Securities Exchange Act of 1934, if applicable.

     (e) Nontransferability. No Restricted Stock Award or Restricted Stock Unit
Award shall be transferable, in whole or in part, by the Participant, other than
by will or by the laws of descent and distribution, prior to the date the risks
of forfeiture described in the Restricted Stock Agreement or Restricted Stock
Unit Agreement have lapsed. If the Participant shall attempt any transfer of any
Restricted Stock Award or Restricted Stock Unit Award granted under the Plan
prior to such date, such transfer shall be void and the Restricted Stock Award
or Restricted Stock Unit Award shall terminate.

     (f) Delay of Payment for Section 162(m). In the event the Administrator
reasonably anticipates that the Company's income tax deduction with respect to
the vesting of any Restricted Stock Award or any payment or issuance of shares
of Stock required by a Restricted Stock Unit Award would be limited or
eliminated by Code Section 162(m), the Administrator may, subject to such terms
and conditions as determined by the Administrator, delay all or a portion of
such payment or the vesting or issuance of all or a portion of such shares of
Stock until the earlier of (i) the date at which the Administrator reasonably
anticipates that the corresponding income tax deduction will not be so limited
or eliminated, and (ii) the Participant's separation from service, as such term
is defined in Code Section 409A and the regulations, notices and other guidance
of general applicability issued thereunder.

     (g) Other Provisions. The Restricted Stock Agreement or Restricted Stock
Unit Agreement authorized under this Section 11 shall contain such other
provisions as the Administrator shall deem advisable.

<PAGE>

                                   SECTION 12.
                               PERFORMANCE AWARDS

     Each Performance Award granted pursuant to this Section 12 shall be
evidenced by a written performance award agreement (the "Performance Award
Agreement"). The Performance Award Agreement shall be in such form as may be
approved from time to time by the Administrator and may vary from Participant to
Participant; provided, however, that each Participant and each Performance Award
Agreement shall comply with and be subject to the following terms and
conditions:

     (a) Awards. Performance Awards in the form of Performance Units or
Performance Shares may be granted to any Participant in the Plan. Performance
Units shall consist of monetary awards which may be earned or become vested in
whole or in part if the Company or the Participant achieves certain Performance
Objectives established by the Administrator over a specified Performance Period.
Performance Shares shall consist of shares of Stock or other Awards denominated
in shares of Stock that may be earned or become vested in whole or in part if
the Company or the Participant achieves certain Performance Objectives
established by the Administrator over a specified Performance Period.

     (b) Performance Objectives, Performance Period and Payment. The Performance
Award Agreement shall set forth:

          (i) the number of Performance Units or Performance Shares subject to
the Performance Award, and the dollar value of each Performance Unit;

          (ii) one or more Performance Objectives established by the
Administrator;

          (iii) the Performance Period over which Performance Units or
Performance Shares may be earned or may become vested;

          (iv) the extent to which partial achievement of the Performance
Objectives may result in a payment or vesting of the Performance Award, as
determined by the Administrator; and

          (v) the date upon which payment of Performance Units will be made or
Performance Shares will be issued, as the case may be, and the extent to which
such payment or the receipt of such Performance Shares may be deferred.

     (c) Withholding Taxes. The Company or its Affiliates shall be entitled to
withhold and deduct from future wages of the Participant all legally required
amounts necessary to satisfy any and all withholding and employment-related
taxes attributable to the Participant's Performance Award. In the event the
Participant is required under the Performance Award Agreement to pay the Company
or its Affiliates, or make arrangements satisfactory to the Company or its
Affiliates respecting payment of, such withholding and employment-related taxes,
the Administrator may, in its discretion and pursuant to such rules as it may
adopt, permit the Participant to satisfy such obligations, in whole or in part,
by delivering shares of Common Stock. Such shares shall have a Fair Market Value
equal to the minimum required tax withholding, based on the minimum statutory
withholding rates for federal and state tax purposes, including payroll taxes.
In no event may the Participant deliver shares having a Fair Market Value in
excess of such statutory minimum required tax withholding. The Participant's
election to deliver shares of Common Stock for this purpose shall be made on or
before the date that the amount of tax to be withheld is determined under
applicable tax law. Such election shall be approved by the Administrator and
otherwise comply with such rules as the Administrator may adopt to assure
compliance with Rule 16b-3, or any successor provision, as then in effect, of
the General Rules and Regulations under the Securities Exchange Act of 1934, if
applicable.

<PAGE>

     (d) Nontransferability. No Performance Award shall be transferable, in
whole or in part, by the Participant, other than by will or by the laws of
descent and distribution. If the Participant shall attempt any transfer of any
Performance Award granted under the Plan, such transfer shall be void and the
Performance Award shall terminate.

     (e) No Rights as Shareholder. A Participant (or the Participant's successor
or successors) shall have no rights as a shareholder with respect to any shares
covered by a Performance Award until the date of the issuance of a stock
certificate evidencing such shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the date
such stock certificate is actually issued (except as otherwise provided in
Section 14 of the Plan).

     (f) Delay of Payment for Section 162(m). In the event the Administrator
reasonably anticipates that the Company's income tax deduction with respect to
any payment or issuance of shares of Stock required by a Performance Award would
be limited or eliminated by Code Section 162(m), the Administrator may, subject
to such terms and conditions as determined by the Administrator, delay all or a
portion of such payment or the issuance of all or a portion of such shares of
Stock, as the case may be, until the earlier of (i) the date at which the
Administrator reasonably anticipates that the corresponding income tax deduction
will not be so limited or eliminated, and (ii) the Participant's separation from
service, as such term is defined in Code Section 409A and the regulations,
notices and other guidance of general applicability issued thereunder.

     (g) Other Provisions. The Performance Award Agreement authorized under this
Section 12 shall contain such other provisions as the Administrator shall deem
advisable.

                                   SECTION 13.
                            STOCK APPRECIATION RIGHTS

     Each Stock Appreciation Right granted pursuant to this Section 13 shall be
evidenced by a written stock appreciation right agreement (the "Stock
Appreciation Right Agreement"). The Stock Appreciation Right Agreement shall be
in such form as may be approved from time to time by the Administrator and may
vary from Participant to Participant; provided, however, that each Participant
and each Stock Appreciation Right Agreement shall comply with and be subject to
the following terms and conditions:

     (a) Awards. A Stock Appreciation Right shall entitle the Participant to
receive, upon exercise, cash, shares of Stock, or any combination thereof,
having a value equal to the excess of (i) the Fair Market Value of a specified
number of shares of Stock on the date of such exercise, over (ii) a specified
exercise price. Unless otherwise determined by the Administrator, the specified
exercise price shall not be less than 100% of the Fair Market Value of such
shares of Stock on the date of grant of the Stock Appreciation Right. A Stock
Appreciation Right may be granted independent of or in tandem with a previously
or contemporaneously granted Option.

<PAGE>

     (b) Term and Exercisability. The term during which any Stock Appreciation
Right granted under the Plan may be exercised shall be established in each case
by the Administrator. The Stock Appreciation Right Agreement shall state when
the Stock Appreciation Right becomes exercisable and shall also state the
maximum term during which such Stock Appreciation Right may be exercised. In the
event a Stock Appreciation Right is exercisable immediately, the manner of
exercise of such Stock Appreciation Right in the event it is not exercised in
full immediately shall be specified in the Stock Appreciation Right Agreement.
The Administrator may accelerate the exercisability of any Stock Appreciation
Right granted hereunder which is not immediately exercisable as of the date of
grant. If a Stock Appreciation Right is granted in tandem with an Option, the
Stock Appreciation Right Agreement shall set forth the extent to which the
exercise of all or a portion of the Stock Appreciation Right shall cancel a
corresponding portion of the Option, and the extent to which the exercise of all
or a portion of the Option shall cancel a corresponding portion of the Stock
Appreciation Right.

     (c) Withholding Taxes. The Company or its Affiliate shall be entitled to
withhold and deduct from future wages of the Participant all legally required
amounts necessary to satisfy any and all withholding and employment-related
taxes attributable to the Participant's Stock Appreciation Right. In the event
the Participant is required under the Stock Appreciation Right to pay the
Company or its Affiliate, or make arrangements satisfactory to the Company or
its Affiliate respecting payment of, such withholding and employment-related
taxes, the Administrator may, in its discretion and pursuant to such rules as it
may adopt, permit the Participant to satisfy such obligations, in whole or in
part, by delivering shares of Common Stock. Such shares shall have a Fair Market
Value equal to the minimum required tax withholding, based on the minimum
statutory withholding rates for federal and state tax purposes, including
payroll taxes. In no event may the Participant deliver shares having a Fair
Market Value in excess of such statutory minimum required tax withholding. The
Participant's election to deliver shares of Common Stock for this purpose shall
be made on or before the date that the amount of tax to be withheld is
determined under applicable tax law. Such election shall be approved by the
Administrator and otherwise comply with such rules as the Administrator may
adopt to assure compliance with Rule 16b-3, or any successor provision, as then
in effect, of the General Rules and Regulations under the Securities Exchange
Act of 1934, if applicable.

     (d) Nontransferability. No Stock Appreciation Right shall be transferable,
in whole or in part, by the Participant, other than by will or by the laws of
descent and distribution. If the Participant shall attempt any transfer of any
Stock Appreciation Right granted under the Plan, such transfer shall be void and
the Stock Appreciation Right shall terminate.

     (e) No Rights as Shareholder. A Participant (or the Participant's successor
or successors) shall have no rights as a shareholder with respect to any shares
covered by a Stock Appreciation Right until the date of the issuance of a stock
certificate evidencing such shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the date
such stock certificate is actually issued (except as otherwise provided in
Section 14 of the Plan).

     (f) Other Provisions. The Stock Appreciation Right Agreement authorized
under this Section 13 shall contain such other provisions as the Administrator
shall deem advisable, including but not limited to any restrictions on the
exercise of the Stock Appreciation Right which may be necessary to comply with
Rule 16b-3 of the Securities Exchange Act of 1934, as amended.

<PAGE>

                                   SECTION 14.
                    RECAPITALIZATION, SALE, MERGER, EXCHANGE
                                 OR LIQUIDATION

     In the event of an increase or decrease in the number of shares of Common
Stock resulting from a stock dividend, stock split, reverse split, combination
or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company, the Board may, in its sole discretion, adjust the
number of shares of Stock reserved under Section 6 hereof, the number of shares
of Stock covered by each outstanding Award, and, if applicable, the price per
share thereof to reflect such change. Additional shares which may become covered
by the Award pursuant to such adjustment shall be subject to the same
restrictions as are applicable to the shares with respect to which the
adjustment relates.

     Unless otherwise provided in the agreement evidencing an Award, in the
event of an acquisition of the Company through the sale of substantially all of
the Company's assets and the consequent discontinuance of its business or
through a merger, consolidation, exchange, reorganization, reclassification,
extraordinary dividend, divestiture (including a spin-off), liquidation,
recapitalization, stock split, stock dividend or otherwise (collectively
referred to as a "transaction"), the Board may provide for one or more of the
following:

     (a) the equitable acceleration of the exercisability of any outstanding
Options or Stock Appreciation Rights, the vesting and payment of any Performance
Awards, or the lapsing of the risks of forfeiture on any Restricted Stock Awards
or Restricted Stock Unit Awards;

     (b) the complete termination of this Plan, the cancellation of outstanding
Options or Stock Appreciation Rights not exercised prior to a date specified by
the Board (which date shall give Participants a reasonable period of time in
which to exercise such Option or Stock Appreciation Right prior to the
effectiveness of such transaction), the cancellation of any Performance Award
and the cancellation of any Restricted Stock Awards or Restricted Stock Unit
Awards for which the risks of forfeiture have not lapsed;

     (c) that Participants holding outstanding Options and Stock Appreciation
Rights shall receive, with respect to each share of Stock subject to such Option
or Stock Appreciation Right, as of the effective date of any such transaction,
cash in an amount equal to the excess of the Fair Market Value of such Stock on
the date immediately preceding the effective date of such transaction over the
price per share of such Options or Stock Appreciation Rights; provided that the
Board may, in lieu of such cash payment, distribute to such Participants shares
of Common Stock of the Company or shares of stock of any corporation succeeding
the Company by reason of such transaction, such shares having a value equal to
the cash payment herein;

     (d) that Participants holding outstanding Restricted Stock Awards,
Restricted Stock Unit Awards and Performance Share Awards shall receive, with
respect to each share of Stock subject to such Awards, as of the effective date
of any such transaction, cash in an amount equal to the Fair Market Value of
such Stock on the date immediately preceding the effective date of such
transaction; provided that the Board may, in lieu of such cash payment,
distribute to such Participants shares of Common Stock of the Company or shares
of stock of any corporation succeeding the Company by reason of such
transaction, such shares having a value equal to the cash payment herein;

     (e) the continuance of the Plan with respect to the exercise of Options or
Stock Appreciation Rights which were outstanding as of the date of adoption by
the Board of such plan for such transaction and the right to exercise such
Options and Stock Appreciation Rights as to an equivalent number of shares of
stock of the corporation succeeding the Company by reason of such transaction;
and

<PAGE>

     (f) the continuance of the Plan with respect to Restricted Stock Awards or
Restricted Stock Unit Awards for which the risks of forfeiture have not lapsed
as of the date of adoption by the Board of such plan for such transaction and
the right to receive an equivalent number of shares of stock of the corporation
succeeding the Company by reason of such transaction.

     (g) the continuance of the Plan with respect to Performance Awards and, to
the extent applicable, the right to receive an equivalent number of shares of
stock of the corporation succeeding the Company by reason for such transaction.

The Board may restrict the rights of or the applicability of this Section 14 to
the extent necessary to comply with Section 16(b) of the Securities Exchange Act
of 1934, the Internal Revenue Code or any other applicable law or regulation.
The grant of an Award pursuant to the Plan shall not limit in any way the right
or power of the Company to make adjustments, reclassifications, reorganizations
or changes of its capital or business structure or to merge, exchange or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.

                                  SECTION 15.
                               INVESTMENT PURPOSE

     No shares of Stock shall be issued pursuant to the Plan unless and until
there has been compliance, in the opinion of Company's counsel, with all
applicable legal requirements, including without limitation, those relating to
securities laws and stock exchange listing requirements. As a condition to the
issuance of Stock to Participant, the Administrator may require Participant to
(a) represent that the shares of Stock are being acquired for investment and not
resale and to make such other representations as the Administrator shall deem
necessary or appropriate to qualify the issuance of the shares as exempt from
the Securities Act of 1933 and any other applicable securities laws, and (b)
represent that Participant shall not dispose of the shares of Stock in violation
of the Securities Act of 1933 or any other applicable securities laws.

     As a further condition to the grant of any Option or the issuance of Stock
to Participant, Participant agrees to the following:

     (a) In the event the Company advises Participant that it plans an
underwritten public offering of its Common Stock in compliance with the
Securities Act of 1933, as amended, and the underwriter(s) seek to impose
restrictions under which certain shareholders may not sell or contract to sell
or grant any option to buy or otherwise dispose of part or all of their stock
purchase rights of the Common Stock underlying Awards, Participant will not, for
a period not to exceed 180 days from the prospectus, sell or contract to sell or
grant an option to buy or otherwise dispose of any Option granted to Participant
pursuant to the Plan or any of the underlying shares of Common Stock without the
prior written consent of the underwriter(s) or its representative(s).

     (b) In the event the Company makes any public offering of its securities
and determines in its sole discretion that it is necessary to reduce the number
of issued but unexercised stock purchase rights so as to comply with any state's
securities or Blue Sky law limitations with respect thereto, the Board of
Directors of the Company shall have the right (i) to accelerate the
exercisability of any Option and the date on which such Option must be
exercised, provided that the Company gives Participant prior written notice of
such acceleration, and (ii) to cancel any Options or portions thereof which
Participant does not exercise prior to or contemporaneously with such public
offering.

<PAGE>

     (c) In the event of a transaction (as defined in Section 14 of the Plan),
Participant will comply with Rule 145 of the Securities Act of 1933 and any
other restrictions imposed under other applicable legal or accounting principles
if Participant is an "affiliate" (as defined in such applicable legal and
accounting principles) at the time of the transaction, and Participant will
execute any documents necessary to ensure compliance with such rules.

     The Company reserves the right to place a legend on any stock certificate
issued in connection with an Award pursuant to the Plan to assure compliance
with this Section 15.

                                   SECTION 16.
                              AMENDMENT OF THE PLAN

     The Board may from time to time, insofar as permitted by law, suspend or
discontinue the Plan or revise or amend it in any respect; provided, however,
that no such revision or amendment, except as is authorized in Section 14, shall
impair the terms and conditions of any Award which is outstanding on the date of
such revision or amendment to the material detriment of the Participant without
the consent of the Participant. Notwithstanding the foregoing, no such revision
or amendment shall (i) materially increase the number of shares subject to the
Plan except as provided in Section 14 hereof, (ii) change the designation of the
class of employees eligible to receive Awards, (iii) decrease the price at which
Options may be granted, or (iv) materially increase the benefits accruing to
Participants under the Plan without the approval of the shareholders of the
Company if such approval is required for compliance with the requirements of any
applicable law or regulation. Furthermore, the Plan may not, without the
approval of the shareholders, be amended in any manner that will cause incentive
stock options to fail to meet the requirements of Section 422 of the Internal
Revenue Code.

                                   SECTION 17.
                        NO OBLIGATION TO EXERCISE OPTION

     The granting of an Option shall impose no obligation upon the Participant
to exercise such Option. Further, the granting of an Award hereunder shall not
impose upon the Company or any Affiliate any obligation to retain the
Participant in its employ for any period.exv10w1

 

Exhibit 10.1

STANDARD MULTI-TENANT OFFICE LEASE-GROSS

AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

1. Basic Provisions (“Basic Provisions”)

     1.1 Parties: This Lease (“Lease”) dated for reference purposes only January 10, 2006,
is made by and Between Pasadena Business Park, LLC (“Lessor”)and VIASPACE, Inc. a
Nevada Corporation(“Lessee”). (Collectively the “Parties” or individually “Party”).

     1.2(a) Premises: That certain portion of the Project (as defined below) known as Suite
Number(s) 101. First (1st) floor(s) consisting of approximately
5,800(tbd) rentable square feel and approximately 5,104 useable square feet
(“Premises”). The Premises are located at 171 North Altadena Drive, in the City of
Pasadena, County of Los Angeles, State of California, with zip code
91107. In addition to Lessee’s rights to use and occupy the Premises as hereinafter
specifies, Lessee shall have non-exclusive rights to the Common Areas (as defined in Paragraph 2.7
below) as hereinafter specifies, but shall not have any rights to the roof, the exterior walls, the
area above the dropped ceilings, or the utility raceways of the building containing the Premises
(“Building”) or to any other buildings in the project. The Premises, the Building, the Common
Areas, the land upon which they are located, along with all other buildings and improvements
thereon, are herein collectively referred to as the “Project”. The Project consists of
approximately 110,243 rentable square feel. (see Paragraph 2)

     1.2(b) Parking: 11 unreserved and 0 reserved vehicle parking spaces at a
monthly cost of $0 per unreserved space and $ SEE ADDENDUM per reserved space. (See
Paragraph 2.6)

     1.3 Term: Five (5) years and Three (3) months (“Original Term”) commencing TBD
(“Commencement Date”) and ending ___(“Expiration Date”). (See paragraph 3).

     1.4 Early Possession___(“Early Possession Date”). (See also Paragraphs 3.2
and 3.3)

     1.5 Base Rent: $10584.00 per month (“Base Rent”), payable on the First
(1st) day of each month commencing Upon TI completion. (See also Paragraph
4)

     1.6 Lessee’s Share of Operating Expense Increase: Five and Four-Tenth percent
(5.4%)(“Lessee’s Share”). Lessee’s Share has been calculated by dividing the approximate
rentable square footage of the Premises but the total approximate square footage of the rentable
space contained in the Project and shall not be subject to revision except on connection with an
actual change in the size of the Premises or a change in the space available for lease in the
Project.

     1.7 Base Rent and Other Monies Paid Upon Execution

	 	(a)	 	Base Rent: $10,584.00 for the Period February 1, 2006-February 28,2006
	 
	 	(b)	 	Security Deposit: $12,269.78 (“Security Deposit”). (See Also Paragraph 5)
	 
	 	(c)	 	Parking: $0.00 for the period 0.00
	 
	 	(d)	 	Other: $0.00 for N/A

     1.8 Agreed Use: General office and laboratory. (See also Paragraph 6)

     1.9 Base Year: Insuring Party. The base year is 2006. Lessor is the “Insuring Party”.
(See also Paragraphs 4.2 and 8)

     1.10 Real estate Brokers: (See Paragraph 15)

          (a) Representation: The following real estate brokers ( the “Brokers” and brokerage
relationships exist in this transaction: NAI Capital Commercial represents Lessee
exclusively (“Lessee’s Broker).

          (b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties; Lessor
shall pay to the Brokers the brokerage fee agreed to in a separate written agreement (or if there
is no such agreement, the sum of Four Percent or 4% of the total Base rent for the
brokerage services rendered by the Brokers).

     1.11 Guarantor. The obligations of the Lessee under this Lease shall be guaranteed by
___(“Guarantor”). (See Paragraph 37)

     1.12 Business Hours for the Building: 8:00 a.m. to 6:00 p.m., Mondays through Fridays (except
Building Holidays) and 8:00 a.m. to 12:00 p.m. on Saturdays (except Building Holidays). “Building
Holidays” shall mean the dates of observance of New Year’s Day, Presidents Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and ___.

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

	 	•	 	Other: There will be additional charge of $5.00 an hour per unit when overtime usage requested by Lessee on HVAC.
	 
	 	•	 	An Addendum consisting of Paragraphs 51 through 71.
	 
	 	•	 	A plot plan depicting premises: a current set of Rules and Regulations

2 Premises.

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

     2..2 Condition Lessor shall deliver the Premises to Lessee in a clean condition on the
Commencement Date or the Early Possession Date, whichever first occurs (“Start Date”), and warrants
that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air
conditioning systems (“HVAC”), and all other items which the Lessor IS obligated to construct
pursuant to the Work Letter attached hereto, if any, other than those constructed by Lessee, shall
be In good operating condition n said date.

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

          (a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result
of the specific and unique use of the Premises by Lessee as compared with uses by tenants In
general. Lessee shall be fully responsible for the cost thereof, provided, however that if such
Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds
6 months’ Base Rent, Lessee may Instead terminate this Lease unless Lessor notifies Lessee, in
writing, within 10 days after receipt of Lessee’s termination notice that Lessor has elected to pay
the difference between the actual cost thereof and the amount equal to 6 months’ Base Rent If
Lessee elects termination, Lessee shall immediately ease 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 cost of such Capital Expenditure as follows Lessor shall advance the funds
necessary for such Capital Expenditure but Lessee shall 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 Lessee’s share of the cost of such Capital Expenditure (the percentage
specified In Paragraph 1 6 by a fraction, the numerator of which IS one. and the denominator of
which is 144 ( i e1/144th of the cost per month). Lessee shall pay interest on the unamortized
balance of Lessee’s share at a rate that is commercially reasonable in the judgment of Lessor’s
accountants Lessee may, however. Prepay its obligation at any time. Provided, however, that if such
Capital Expenditure IS required during the last 2 years of this Lease or if Lessor reasonably
determines that it IS not economically feasible to pay its share thereof. Lessor shall have the
option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies
Lessor, in writing, within 10 days after receipt of Lessor3 termination notice that Lessee will pay
for such Capital Expenditure If Lessor does not elect to terminate, and fails to tender its share
of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest, from
Rent until Lessor’s share of such costs have been fully paid. If Lessee is unable to finance
Lessor’s share, or if the balance of the Rent due and payable for the remainder of this Lease IS
not sufficient to fully reimburse Lessee on an offset basis. Lessee shall have the right to
terminate this Lease upon 30 days written notice to Lessor.

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

     2.4 Acknowledgements. Lessee acknowledges that:

 

 

          (a) Lessee has been advised by Lessor and/or Brokers to satisfy Itself with respect to the
condition of the Premises( including but not limited to the electrical. HVAC and fire sprinkler
systems, security, environmental aspects, and compliance with Applicable Requirements),and their
suitability for Lessee’s intended use,

          (b) Lessee has made such Investigation as it deems necessary with reference to such matters
and assumes all responsibility therefore as the same relate to its occupancy of the Premises, and

          (c) neither Lessor, Lessor’s agents. nor Brokers have made any oral or written representations
or warranties with respect to said matters other than as set forth In this Lease. In addition.
Lessor acknowledges that,

               (i) Brokers have made no representations. promises or warranties concerning Lessee’s ability
to honor the Lease or suitability 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 effective immediately prior to the Start Date. Lessee was the owner or occupant of the
Premises. In such event. Lessee shall be responsible for any necessary corrective work.

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

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

          (b) The monthly rent per parking space specified in Paragraph 1 2(b) is subject to change upon
30 days prior written notice to Lessee. The rent for the parking IS payable one month In advance
prior to the first day of each calendar month.

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

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

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

     2.10 Common Areas — Changes. Lessor shall have the right. In Lessor’s sole discretion. from
time to time:

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

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

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

          (d)To add additional buildings and Improvements to the Common Areas.

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

          (f) To do and perform such other acts and make such other changes In, to or with
respect to the Common Areas and Project as Lessor may, in the exercise of sound
business judgment, deem to be appropriate.

3 Term.

     3.1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as
specified In Paragraph 1 3.

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

     3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to
deliver possession of the Premises to Lessee by the Commencement Date. If, despite sad efforts,
Lessor IS unable to deliver possession by such date, Lessor shall not be Subject to any liability
therefore, nor shall such failure affect the validity of this Lease. Lessee shall not, however, be
obligated to pay Rent or perform its other obligations until Lessor delivers possession of the
Premises and any period of rent abatement that Lessee would otherwise have enjoyed shall run from
the date of delivery of possession and continue for a period equal to what Lessee would otherwise
have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of
Lessee. If possession IS not delivered within 30 days after the Commencement Date, as the same may
be extended under the terms of any Work Letter executed by Parties, Lessee may, at its option, by
notice in writing within 10 days after the end of such 30 day period, cancel this Lease, in which
event the Parties shall be discharged from all obligations hereunder. If such written notice is not
received by Lessor within said 10 day period, Lessee’s right to cancel shall terminate If
possession of the Premises is not delivered within 120 days after the Commencement Date, this Lease
shall terminate unless other agreements are reached between Lessor and Lessee, in writing.

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

4. Rent.

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

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

          (a) “Base Year” is as specified in Paragraph 1.9

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

          (c)“Operating Expenses” include all costs Incurred by Lessor relating to the ownership and
operation of the Project, calculated as rf the Project was at least 95% occupied, including, but
not limited to, the following:

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

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

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

               (II) Trash disposal, janitorial and security services, pest control services, and the costs of
any environmental inspections;

 

 

               (III) Any other service to be provided by Lessor that is elsewhere In this Lease stated to be
an “Operating Expense”,

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

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

               (VI)The cost of water, sewer, gas, electricity, and other publicly mandated services not
separately metered.

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

               (VIII) The cost of any Capital Expenditure to the Building or the Project not covered under
the provisions of Paragraph 2 3 provided; however. that Lessor shall allocate the cost of any such
Capital Expenditure over a 12 year period and Lessee shall not be required to pay more than
Lessee’s Share of 11144th of the cost of such Capital Expenditure In any given month;

               (IX) Replacement of equipment or improvements that have a useful life for accounting purposes
of 5 years or less.

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

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

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

          (g) Operating Expenses shall not include the costs of replacement for equipment or capital
components such as the roof. foundations, exterior walls or a Common Area capital improvement. such
as the parking lot paving, elevators, fences that have a useful life for accounting purposes of 5
years or more unless it is of the type described in paragraph 4 2(c) (VIII), In which case their
cost shall be included as above provided.

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

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

5. Security Deposit Lessee shall deposit with Lessor upon execution hereof the Security Deposit as
security for Lessee’s faithful performance of its obligations under this Lease. If Lessee falls to
pay Rent, or otherwise Defaults under this Lease. Lessor may use, apply or retain all or any
portion of said Security Deposit for the payment of any amount due Lessor or to reimburse or
compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or Incur by
reason thereof. If Lessor uses or applies all or any portion of the Security Deposit, Lessee shall
within 10 days after written request therefore, deposit monies with Lessor sufficient to restore
said Security Deposit to the full amount required by this Lease If the Base Rent increases during
the term of this Lease, Lessee shall, upon written request from Lessor, deposit additional moneys
with Lessor so that the total amount of the Security Deposit shall at all times bear the same
proportion to the increased Base Rent as the Initial Security Deposit bore to the initial Base
Rent. Should the Agreed Use be amended to accommodate a material change In the business of Lessee
or to accommodate a sub lessee or assignee, Lessor shall have the right to increase the Security
Deposit to the extent necessary, in Lessor’s reasonable judgment, to account for any Increased wear
and tear that the Premises may suffer as a result thereof. If a change in control of Lessee occurs
during this Lease and following such change the financial condition of Lessee is. in Lessor’s
reasonable judgment. significantly reduced, Lessee shall deposit such additional monies with Lessor
as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level based
on such change in financial condition. Lessor shall not be required to keep the Security Deposit
separate from its general accounts. Within 14 days after the expiration or termination of this
Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and otherwise within 30
days after the Premises have been vacated pursuant to Paragraph 7 4(c) below, Lessor shall return
that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit
shall be considered to be held in trust, to bear Interest or to be prepayment for any monies to be
paid by Lessee under this Lease

6. Use.

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

     6.2 Hazardous Substances

          (a) Reportable Uses Require Consent The term “Hazardous Substance” as used in this Lease shall
mean any product, substance, or waste whose presence, use, manufacture, disposal. transportation,
or release, either by itself or in combination with other materials expected to be on the Premises.
IS either.(i) potentially injurious to the public health, safety or welfare, the environment or the
Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis for potential
liability of Lessor to any governmental agency or third party under any applicable statute or
common law theory Hazardous Substances shall include, but not be limited to. hydrocarbons,
petroleum, gasoline, and/or crude oil or any products, byproducts or fractions thereof. Lessee
shall not engage In any activity 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 61ed with, any
governmental authority and/or (iii) the presence at the Premises of a Hazardous Substance with
respect to which any Applicable Requirements requires that a notice be given to persons entering or
occupying the Premises or neighboring properties Notwithstanding the foregoing, Lessee may use any
ordinary and customary materials reasonably required to be used in the normal course of the Agreed
Use such as ordinary office supplies (copier toner, liquid paper, glue. etc.) and common household
cleaning materials, so long as such use IS in compliance with all Applicable requirements. is not a
Reportable Use. and does not expose the Premises or neighboring property to any meaningful risk of
contamination or damage or expose Lessor to any liability therefore In addition, Lessor may
condition its consent to any Reportable Use upon receiving such additional assurances as Lessor
reasonably deems necessary to protect itself, the public, the Premises and/or the environment
against damage, contamination .Injury and/or Liability. including, but not limited to , the
installation (and removal on or before Lease expiration or termination) of protective modifications
(such as concrete encasements) and/or increasing the Security Deposit.

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

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

          (d) Lessee Indemnification Lessee shall indemnify, defend and hold Lessor, its agents,
employees, lenders and ground Lessor, if any, harmless from and against any and all loss of rents
and/or damages, Liabilities, judgments, claims, expenses, penalties, and attorneys’ and
consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises by
or for Lessee, or any third party (provided, however, that Lessee shall have no

 

 

liability under this Lease with respect to underground migration of any Hazardous Substance
under the Premises from areas outside of the Project not caused or contributed to by Lessee).
Lessee’s obligations shall include, but not be limited to , the effects of any contamination or
injury to person, property or the environment created or suffered by Lessee, and the cost of
investigation, removal, remediation, restoration and/or abatement. and shall survive the expiration
or termination of this Lease No termination. Cancellation or release agreement entered Into by
Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to
Hazardous Substances, unless specifically so agreed by Lessor In writing at the time of such
agreement

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

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

          (g) Lessor
Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e))
occurs during the term of this Lease, unless Lessee is legally responsible 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 continue in full force and effect, or (11) 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 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 rating bureau, and the recommendations of Lessor’s engineers and/or consultants which
relate in any manner to the Premises, without regard to whether said requirements are now In effect
or become effective after the Start Date. Lessee shall, within 10 days after receipt of Lessor’s
written request. provide Lessor with copies of all permits and other documents, and other
information evidencing Lessee’s compliance with any Applicable Requirements specified by Lessor,
and shall immediately upon receipt, notify Lessor in writing (with copies of any documents
involved)o f any threatened or actual claim. notice. citation. warning, complaint or report
pertaining to or involving the of Lessee or the Premises to comply with any Applicable
Requirements.

6.4 Inspection; Compliance. Lessor and Lessor’s “Lender” (as defines in Paragraph 30) and
consultants shall have the right to enter into Premises at any time, In the case of an emergency,
and otherwise at reasonable times, for the purpose of inspecting the condition of the Premises and
for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid
by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance Condition(see
paragraph 9 le) is found to exist or be Imminent, or the inspection is requested or ordered by a
governmental authority. In such case, Lessee shall upon request reimburse Lessor for the cost of
such inspection, so long as such inspection is reasonably related to the violation or contamination

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

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

     7.2 Lessor’s Obligations Subject to the provisions of Paragraphs 2 2 (Condition), 2.3
(Compliance), 4 2 (Operating Expenses). 6 (Use), 7.1 (Lessee’s Obligations), 9 (Damage or
Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant to Paragraph 4.2,
shall keep in good order, condition and repair the foundations, exterior walls, structural
condition of interior bearing walls, exterior roof, fire sprinkler system, fire alarm and/or smoke
detection systems, fire hydrants, and the Common Areas. Lessee expressly waives the benefit of any
statute now or hereafter In effect to the extent it IS inconsistent with the terms of this Lease.

     7.3 Utility Installations; Trade Fixtures; Alterations.

          (a) Definitions. The term ‘Utility Installations” refers to all floor and window coverings,
air lines, vacuum lines, power panels, electrical distribution, security and fire protection
systems, communication cabling, lighting fixtures, HVAC equipment, and plumbing in or on the
Premises. The term “Trade 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 installations made by Lessee that are not yet owned by Lessor
pursuant to Paragraph 7.4(a).

          (b) Consent Lessee shall not make any Alterations or Utility installations to the Premises
without Lessor’s prior written consent. Lessee may. however, make non-structural Utility
installations to the Interior of the Premises (excluding the roof) without such consent but upon
notice to Lessor, as long as they are not visible from the outside. do not involve puncturing,
relocating or removing the roof, ceilings, floors or any existing walls. will not affect the
electrical, plumbing. HVAC, and/or life safety systems, and the cumulative cost thereof during this
Lease as extended does not exceed $2000. Notwithstanding the foregoing, Lessee shall not make or
permit any roof penetrations and/or Install anything on the roof without the prior written approval
of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to utilize a
contractor chosen and/or approved by Lessor Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be presented to Lessor In
written form with detailed plans. Consent shall be deemed conditioned upon Lessee’s: (i) acquiring
all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the
plans and specifications prior to commencement of the work, and (111) compliance with all
conditions of said permits and other Applicable Requirements in a prompt and expeditious Any
Alterations or Utility installations shall be performed in a workmanlike manner with good and
sufficient materials. Lessee shall promptly upon completion furnish Lessor with as built plans and
specifications. For work which costs an amount In excess of one month’s Base Rent, Lessor may
condition its consent upon Lessee providing a lien and completion bond in an amount equal to 150%
of the estimated cost of such Alteration or Utility Installation and/or upon Lessee’s posting an
additional Security Deposit with Lessor.

          (c) Liens; Bonds. Lessee shall pay, when due, all clams 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 material man’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 hen, 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 150U/u of the amount of such contested hen, claim or demand, indemnifying If Lessor elects to
participate In any such action, Lessee shall pay Lessor’s attorneys’
Lessor against liability for the same. Fees and costs.

     7.4 Ownership; Removal; Surrender; and Restoration

          (a) Ownership Subject to Lessor’s right to require removal or elect ownership as hereinafter
provided. all Alterations and Utility
installations made by Lessee shall be the property of Lessee. but considered a part of the
Premises. Lessor may, at any time, elect in writing to be the owner of all or any specified part of
the Lessee Owned Alterations and Utility Installations. Unless otherwise instructed per paragraph 7
4(b) hereof, all Lessee Owned Alterations and Utility installations shall, at the expiration or
termination of this Lease, become the property of Lessor and be surrendered by Lessee with the
Premises.

          (b) Removal By delivery to Lessee of written notice from Lessor not earlier than 90 and riot
later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all
Lessee Owned Alterations or Utility installations be removed by the expiration or termination of
this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility installations made without the required consent (c) Surrender; Restoration.
Lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with
all of the Improvements, parts and surfaces thereof clean and free of debris, and in good operating
order, condition and state of repair, ordinary wear and tear excepted “Ordinary wear and tear”
shall not include any damage or degeneration that would have been prevented by good maintenance
practice. Notwithstanding the foregoing. If this Lease is for 12 months or less, then Lessee shall
surrender the Premises in the same condition as delivered to Lessee on the Start Date with NO
allowance for ordinary wear and tear. Lessee shall repair any damage occasioned by the
installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility
Installations, furnishings, and equipment as well as the removal of any storage tank Installed by
or for Lessee. Lessee shall also completely remove from the Premises any and all Hazardous
Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous
Substances which were deposited via underground migration from

 

 

areas outside of the Project) even if such removal would require Lessee to perform or pay for
work that exceeds statutory requirements. Trade Fixtures shall remain the property of Lessee and
shall be removed by Lessee. The failure by Lessee to timely vacate the Premises pursuant to this
Paragraph 7 4(c) without the express written consent of Lessor shall constitute a holdover under
the provisions of Paragraph 26 below

8. Insurance; Indemnity.

     8.1
Insurance Premiums. The cost of the premiums for the insurance policies maintained by
Lessor pursuant to paragraph 8 are included as Operating Expenses (see paragraph 4 2 (c)(iv)). Said
costs shall include increases In the premiums resulting from additional coverage related to
requirements of the holder of a mortgage or deed of trust covering the Premises, Building and/or
Project, Increased valuation of the Premises, Building and/or Project, and/or a general premium
rate Increase. Said costs shall not, however, include any premium increases resulting from the
nature of the occupancy of any other tenant of the Building. If the Project was not insured for the
entirety of the Base Year, then the base premium shall be the lowest annual premium reasonably
obtainable for the required insurance as of the Start Date, assuming the most nominal use possible
of the Building and/or Project In no event. However, shall Lessee be responsible for any portion of
the premium cost attributable to liability insurance coverage in excess of $2.000.000 procured
under Paragraph 8.2(b)

     8.2
Liability Insurance

          (a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability
policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily
injury, personal Injury and property damage based upon or arising out of the ownership, use,
occupancy or maintenance of the Premises and all areas appurtenant thereto Such insurance shall be
on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per
occurrence with an annual aggregate of not less than $2,000,000, an “Additional Insured-Managers or
Lessor’s of Premises Endorsement” and contain the “Amendment of the Pollution Exclusion
Endorsement” for damage caused by heat, smoke or fumes from a hostile fire. The policy shall not
contain any intra-insured exclusions as between Insured persons or organizations, but shall Include
coverage for liability assumed under this Lease as an “insured contract” for the performance of
Lessee’s Indemnity obligations under this Lease The limits of said insurance shall not, however,
limit the liability of Lessee nor relieve Lessee of any obligation hereunder All Insurance carried
by Lessee shall be primary to and not contributory with any similar insurance carried by Lessor,
whose Insurance shall be considered excess Insurance only.

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

     8.3
Property Insurance -Building, Improvements and Rental Value

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

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

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

          (d) Lessee’s improvements Since Lessor IS the Insuring Party Lessor shall not be required to
insure Lessee Owned Alterations and Utility Installations unless the Item In question has become
the property of Lessor under the terms of this Lease.

     8.4 Lessee’s Property; Business Interruption Insurance.

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

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

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

     8.5
Insurance Policies. Insurance required herein shall be by companies duly licensed or
admitted to transact business In the state where the Premises are located, and maintaining during
the policy term a “General Policyholders Rating” of at least B+, V, as set forth in the most
current Issue of “Best’s insurance Guide”, or such other rating as may be required by a Lender.
Lessee shall not do or permit to be done anything which invalidates the required insurance
policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of
such insurance or certificates evidencing the existence and amounts of the required Insurance No
such policy shall be cancelable or subject to modification except after 30 days prior written
notice to Lessor. Lessee shall, at least 30 days prior to the expiration of such policies. furnish
Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or else 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 fall 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 wave any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so
long as the insurance IS not
invalidated thereby.

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

     8.8 Exemption of Lessor from Liability. Lessor shall not be liable for injury or damage to
the person or goods, wares, merchandise or other property of Lessee, Lessee’s employees,
contractors, invitees, customers. or any other person In or about the Premises, whether such
damage or Injury is caused by or results from fire, steam, electricity, gas, water or ran, 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 sad injury
or damage results from conditions arising upon the
Premises or upon other portions of the Building. or from other sources or places. Lessor shall
not be liable for any damages arising from any act or neglect of any other tenant of Lessor nor
from the failure of Lessor to enforce the provisions of any other lease In the Project.
Notwithstanding Lessor’s negligence or breach of this Lease. Lessor shall under no circumstances
be liable for injury to Lessee’s business or for any loss of income or profit there from

9. Damage or Destruction.

     9.1 Definitions.

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

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

          (c) “insured Loss” shall mean damage or destruction to improvements on the Premises, other
than Lessee Owned Alterations and Utility installations and Trade Fixtures, which was caused by an
event required to be covered by the Insurance described In Paragraph 8 3(a), irrespective of any
deductible amounts or coverage limits involved.

 

 

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

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

     9.2 Partial Damage -insured Loss. If a Premises Partial Damage that is an insured Loss occurs,
then Lessor shall. at Lessor’s expense, repair such damage (but not Lessee’s Trade Fixtures or
Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease
shall continue In full force and effect; provided, however, that Lessee shall, at Lessor’s
election, make the repair of any damage or destruction the total cost to repair of which IS $5,000
or less, and, In such event, Lessor shall make any applicable Insurance proceeds available to
Lessee on a reasonable basis for that purpose Notwithstanding the foregoing. if the required
insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the
Insuring Party shall promptly contribute the shortage In proceeds as and when required to complete
said repairs In the event, however, such shortage was due to the fact that, by reason of the unique
nature of the improvements, full replacement cost insurance coverage was not commercially
reasonable and available, Lessor shall have no obligation to pay for the shortage In insurance
proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with
the funds to cover same, or adequate assurance thereof, within 10 days following receipt of written
notice of such shortage and request therefore If Lessor receives sad 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
(11) 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
(11) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor
of knowledge of the occurrence of such damage. Such termination shall be effective 60 days
following the date of such notice In the event Lessor elects to terminate this Lease, Lessee shall
have the right within 10 days after receipt of the termination notice to give written notice to
Lessor of Lessee’s commitment to pay for the repair of such damage without reimbursement from
Lessor Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days
after making such commitment In such event this Lease shall continue In full force and effect, and
Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds
are available. If Lessee does not make the required commitment, this Lease shall terminate as of
the date specified in the termination notice

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

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

     9.6 Abatement of Rent; Lessee’s Remedies.

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

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

     9.7 Termination; Advance Payments. of this Lease pursuant to Paragraph 62(g) or Paragraph 9,
an equitable Upon termination adjustment shall be made concerning advance Base Rent and any other
advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of
Lessee’s Security Deposit as has not been, or IS not then required to be, used by Lessor.

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

10. Real Property Taxes

     10.1 Definitions. As used herein, the term Real Property Taxes” shall include any form of
assessment, real estate, general, special. ordinary or extraordinary, or rental levy or tax (other
than inheritance, personal income or estate taxes), improvement bond; and/or license fee Imposed
upon or levied against any legal or equitable interest of Lessor in the Project, Lessor’s right to
other income there from, 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 Project address and
where the proceeds so generated are to be applied by the city, county or other local taxing
authority of a jurisdiction within which the Project is located. “Real Property Taxes” shall also
include any tax, fee, levy, assessment or charge, or any Increase therein, imposed by reason of
events occurring during the term of this Lease, including
but not limited to, a change in the ownership of the Project or any portion thereof or a change In
the improvements thereon.

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

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

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

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

11. Utilities and Services.

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

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

 

 

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

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

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

12. Assignment and Subletting.

     12.1 Lessor’s Consent Required

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

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

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

          (d) An assignment or subletting without consent shall, at Lessor’s option, be a Default
curable after notice per Paragraph 13.1(c). or a noncurable Breach without the necessity of any
notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a
noncurable Breach, Lessor may ether: (I) terminate this Lease, or (11) upon 30 days written notice,
Increase the monthly Base Rent to 110% of the Base Rent then In effect. Further, In the event of
such Breach and rental adjustment, (I) the purchase price of any option to purchase the Premises
held by Lessee shall be subject to similar adjustment to 110% of the price previously In effect,
and (ii) all fixed and non-fixed rental adjustments scheduled during the remainder of the Lease
term shall be increased to 110% of the scheduled adjusted rent.

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

     12.2 Terms and Conditions Applicable to Assignment and Subletting.

          (a) Regardless of Lessor’s consent, no assignment or subletting shall: (I) be effective
without the express written assumption by such assignee or sub lessee of the obligations of Lessee
under this Lease, (11) 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 estoppels 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 sub lessee, without first exhausting Lessor’s remedies
against any other person or entity responsible therefore to Lessor, or any security held by Lessor.

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

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

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

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

          (a) Lessee hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent payable
on any sublease, and Lessor may collect such Rent and apply same toward Lessee’s obligations under
this Lease; provided, however, that until a Breach shall occur in the performance of Lessee’s
obligations, Lessee may collect said Rent. Lessor shall not, by reason of the foregoing or any
assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the
sublease for any failure of Lessee to perform and comply with any of Lessee’s obligations to such
sub lessee Lessee hereby Irrevocably authorizes and directs any such sub lessee, 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. Sub lessee
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 sub lessee 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 sad option to the expiration of such sublease, provided,
however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sub
lessee 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 sub lessee shall further assign or sublet all or any part of the Premises without
Lessor’s prior written consent. le) Lessor shall deliver a copy of any notice of Default or Breach
by Lessee to the sub lessee. who shall have the right to cure the Default of Lessee within the
grace period. if any, specified In such notice The sub lessee shall have a right of reimbursement
and offset from and against Lessee for any such Defaults cured by the sub lessee

13. Default; Breach; Remedies

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

          (a) The abandonment of the Premises, or the vacating of the Premises without providing a
commercially reasonable level of security, or where the coverage of the property insurance
described In Paragraph 8 3 is jeopardized as a result thereof, or without providing reasonable
assurances to minimize potential vandalism

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

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

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

          (e) The occurrence of any of the following events

               (I) the making of any general arrangement or assignment for the benefit of creditors:

               (II) becoming
a debt of as defined in 11 U.S. C § 101 or any successor statute thereto (unless,
in the case of a petition filed against Lessee, the same IS dismissed within 60 days);

               (III) the appointment of a trustee or receiver to take possession of substantially all of
Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession IS
not restored to Lessee within 30 days; or

 

 

(iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s
assets located at the Premises or of Lessee’s Interest In this Lease, where such seizure IS not
discharged within 30 days. provided, however, In the event that any provision of this subparagraph
(e) is contrary to any applicable law, such provision shall be of no force or effect, and not
affect the validity of the remaining provisions.

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

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

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

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

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

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

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

     13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause
Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain Such costs include, but are not limited to, processing and accounting
charges, and late charges which may be imposed upon Lessor by any Lender Accordingly, if any Rent
shall not be received by Lessor within 9 10 days after such amount shall be due, then, without any
requirement for notice to Lessee, Lessee shall pay to Lessor a one-time late charge equal to 10% of
each such overdue amount or $100, whichever is greater. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Lessor will Incur by reason of such
late payment Acceptance of such late charge by Lessor shall in no event constitute a waver of
Lessee’s Default or Breach with respect to such overdue amount, nor prevent the exercise of any of
the other rights and remedies granted hereunder. In the event that a late charge is payable
hereunder, whether or not collected, for 3 consecutive installments of Base Rent, then
notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor’s option,
become due and payable quarterly In advance.

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

     13.6 Breach by Lessor.

          (a) Notice of Breach. Lessor shall not be deemed In breach of this Lease unless Lessor falls
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 sad breach within 30 days after receipt of said notice, or if having commenced sad cure
they do not diligently pursue it to completion, then Lessee may elect to cure said breach at
Lessee’s expense and offset from Rent the actual and reasonable cost to perform such cure,
provided however, that such offset shall not exceed an amount equal to the greater of one
month’s Base Rent or the Security Deposit, reserving Lessee’s right to seek reimbursement from
Lessor Lessee shall document the cost of said cure and supply said documentation to Lessor

14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent
domain or sold under the threat of the exercise of sad power (collectively ‘Condemnation”), this
Lease shall terminate as to the part taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than 10% of the rentable floor area of the Premises, or
more than 25% of Lessee’s Reserved Parking Spaces, if any, are taken by Condemnation, 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 terminate this Lease as of
the date the 10 days after the condemning authority shall have taken possession) 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 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 therefore In the event that this Lease IS not
terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by
such Condemnation.

15. Brokerage Fees.

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

     15.2 Assumption of Obligations. Any buyer or transferee of Lessor’s Interest in this Lease
shall be deemed to have assumed Lessor’s obligation hereunder. Brokers shall be third party
benefices of the provisions of Paragraphs 1 10, 15. 22 and 31. If Lessor falls 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 falls to pay any

 

 

amounts to Lessee’s Broker when due, Lessee’s Broker may send written notice to Lessor and Lessee
of such failure and if Lessor falls to pay such amounts within 10 days after said notice, Lessee
shall pay said monies to its Broker and offset such amounts against Rent. In addition, Lessee’s
Broker shall be deemed to be a third party beneficiary of any commission agreement entered Into by
and/or between Lessor and Lessor’s Broker for the limited purpose of collecting any brokerage fee
owed.

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

16. Estoppels Certificates.

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

          (b) If the Responding Party shall fall 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. (11) there are no uncured defaults In the Requesting Party’s performance, and
(lib) if Lessor IS the Requesting Party, not more than one month’s rent has been paid in advance.
Prospective purchasers and encumbrances may rely upon the Requesting Party’s Estoppel Certificate,
and the Responding Party shall be estopped from denying the truth of the facts contained in said
Certificate.

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

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

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

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

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

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

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

23. Notices.

     23.1 Notice Requirements. All notices required or permitted by this Lease or applicable law
shall be In writing and may be delivered in person (by hand or by courier) or may be sent by
regular, certified or registered mall 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 mall, return receipt requested,
shall be deemed given on the date of delivery shown on the receipt card. or if no delivery date is
shown, the postmark thereon If sent by regular mail the notice shall be deemed given 48 hours after
the same is addressed as required herein and mailed with postage prepaid Notices delivered by
United States Express Mail or overnight courier that guarantee next day delivery shall be deemed
given 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted by
facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of
receipt (confirmation report from fax machine is sufficient),
provided a copy is also delivered via
delivery or mall. 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. 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 far dealing and good faith, c. A duty to
disclose all facts known to the agent materially affecting the value or desirability of the
property that are not known to, or within the diligent attention and observation of, the Parties.
An agent is not obligated to reveal to either Party any confidential information obtained from the
other Party which does not involve the affirmative duties set forth above.

               (II) Lessee’s Agent. An agent can agree to act as agent for the Lessee only. In these
situations, the agent is not the Lessor’s agent, even if by agreement the agent may receive
compensation for services rendered, either In full or In part from the Lessor. An agent acting only
for a Lessee has the following affirmative obligations. To the Lessee A fiduciary duty of utmost
care. integrity, honesty, and loyalty in dealings with the Lessee. ID the I Lessee and the lea a.
Diligent exercise of reasonable skills and care in performance of the agent’s duties b. A duty of
honest and far 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 fiduciary duty of utmost care. integrity, honesty and loyalty In the dealings
with either Lesser or the Lessee. b Other duties to the Lessor and the Lessee as stated above in
subparagraphs (I) or (18). In representing both Lessor and Lessee, the agent may not without the
express permission of the respective Party, disclose to the other Party that the Lessor will accept
rent In an amount less than that indicated In the listing or that the Lessee is willing to pay a
higher rent than that offered. The above duties of the agent in a real estate transaction do not
relieve a Lessor or Lessee from the responsibility to protect their own Interests. Lessor and
Lessee should carefully read all agreements to assure that they adequately express their
understanding of the transaction a real estate agent is a person qualified to advise about real
estate If legal or tax advise IS desired, consult a competent professional.

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

 

 

          (c) Buyer and Seller agree to Identify to Brokers as “Confidential” any communication or
information given Brokers that is considered by such Party to be confidential. 26 No Right To
Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the
expiration or termination of this Lease In the event that Lessee holds over, then the Base Rent
shall be increased to 150“h 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 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 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 far 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 of Lessor under this Lease
or obligation to perform any of the obligations Any Lender may elect to have this Lease and/or any
Option granted hereby superior to the hen 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 Atonement In the event that Lessor transfers title to the Premises, or the Premises are
acquired by another upon the foreclosure or termination of a Security Device to which this Lease is
subordinated (i) Lessee shall. subject to the nondisturbance provisions of Paragraph 30 3, attorn
to such new owner, and upon request, enter Into a new lease, containing all of the terms and
provisions of this Lease, with such new owner for the remainder of the term hereof. or, at the
election of such new owner, this Lease shall automatically become a new Lease between Lessee and
such new owner, upon all of the terms and conditions hereof, for the remainder of the term hereof,
and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new
owner shall assume all of Lessor’s obligations hereunder, except that such new owner shall not (a)
be liable for any act or omission of any prior Lessor or with respect to events occurring prior to
acquisition of ownership, (b) be subject to any offsets or defenses which Lessee might have against
any prior Lessor, (c) be bound by prepayment of more than one month’s rent, or (d) be liable for
the return of any security deposit paid to any prior Lessor.

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

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

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

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

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

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

35. Termination: Merger. Unless specifically stated otherwise In writing by Lessor, the voluntary or
other surrender of this Lease by Lessee, the mutual termination or cancellation hereof. or a
termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or
lesser estate In the Premises; provided, however, that Lessor may elect to continue any one or all
existing sub tenancies. 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 of any then existing Default or
Breach, except as may be otherwise specifically stated In writing by Lessor at the time of such
consent The failure to specify herein any particular condition to Lessor’s consent shall not
preclude the imposition by Lessor at the time of consent of such further or other conditions as are
then reasonable with reference to the particular matter for which consent IS being given. In the
event that either Party disagrees with any determination made by the other hereunder and reasonably
requests the reasons for such determination, the determining party shall furnish its reasons In
writing and In reasonable detail within 10 business days following such request.

37. Guarantor.

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

     37.2 Default. It shall constitute a Default of the Lessee if any Guarantor falls 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 Estoppels Certificate, or
(d) written confirmation that the guaranty IS still in effect

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

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

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

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

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

     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, (11) 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 riot the Defaults are cured, during the 12 month
period immediately preceding the exercise of the Option.

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

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

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

41. Reservations.

          (a) Lessor reserves the right: (i) to grant, without the consent or joinder of Lessee, such
easements, rights and dedications that Lessor deems necessary. (11) to cause the recordation of
parcel maps and restrictions. (III) to create and/or install new utility raceways, so long as such
easements,
rights, dedications, maps, restrictions, and Utility raceways do not unreasonably Interfere with
the use of the Premises by Lessee. Lessor may also- change the name, address or title of the
Building standard
or Project upon at least 90 days prior written notice; provide and Install, at Lessee’s expense.
Building graphics on the door of the Premises and such portions of the Common Areas as Lessor shall
reasonably deem appropriate; grant to any lessee the exclusive right to conduct any business as
long as such exclusive right does not conflict with any rights expressly given herein; and to place
such signs, notices or displays as Lessor reasonably deems necessary or advisable upon the roof,
exterior of the Building or the Project or on pole signs in the Common Areas. Lessee agrees to sign
any documents reasonably requested by Lessor to effectuate such rights. The obstruction of Lessee’s
view, air, or light by any structure erected in the vicinity of the Building, upon Lessor
whether by Lessor or third parties. shall In no way affect this Lease or Impose any ability

          (b) Lessor also reserves the right to move Lessee to other space of comparable size in the
Building or Project. Lessor must provide at least 45 prior written notice of such move, and the new
space must contain improvements of comparable quality to those contained within the Premises.
Lessor shall pay the reasonable out of pocket costs that Lessee incurs with regard to such
relocation, including
the expenses of moving and necessary stationary revision costs. In no event, however, shall Lessor
be required to pay an amount in excess of two months Base Rent. Lessee may not be relocated more
than once during the term of this Lease

          (c) Lessee shall not: (i) use a representation (photographic or otherwise) of the Building or
Project or their name(s) In connection with Lessee’s business, or (11) suffer or permit anyone,
except in emergency, to go upon the roof of the Building.

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

43. Authority. (a) If either Party hereto IS a corporation, trust, limited liability company,
partnership, or similar entity, each individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to execute and deliver this Lease on its
behalf. Each party shall. within 30 days after request, deliver to the other party satisfactory
evidence of such authority. (b) If this Lease IS executed by more than one person or entity as
“Lessee”, each such person or entity shall be jointly and severally liable hereunder. It is agreed
that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or
other document ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same
as if all of the named Lessees had executed such document

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

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

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

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

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

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

50. Americans with Disabilities Act In the event that as a result of Lessee’s use, or intended use,
of the Premises the Americans with Disabilities Act or any similar law requires modifications or
the construction or installation of improvements In or to the Premises, Building, Project and/or
Common Areas, the Patties agree that such modifications, construction or improvements shall be made
at: Lessor’s expense [II Lessee’s expense.

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

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

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

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

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

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

	 	 	 
	Executed at:                                        

	 	
	Executed on 1/24/06

	 	
	By Lessor: Pasadena Business Park, LLC

	 	Executed at:                                         
	/s/Donald Lam

	 	Executed on: 1/24/06
	Name Printed: Donald Lam

	 	By Lessee: VIASPACE, Inc. a Nevada Corporation
	Title: Managing Member

	 	/s/ CARL KUKKONEN
	Address: 2500 East Foothill Blvd. #509

	 	Printed Name: Carl Kukkonen
	     Pasadena, CA 91107

	 	Title: Chief Executive Officer
	Telephone/Facsimile: 626-304-0310/626-304-0315

	 	Lessee’s Broker:
	 

	 	NAI Capital Commercial
	 

	 	Attn: Gray DeFevere
	 

	 	16001 Ventura Boulevard, Suite #200
	 

	 	Encino, CA 91436
	 

	 	
	 

	 	

 

 

FIRST ADDENDUM TO LEASE

This First Addendum to Lease (“Addendum”) dated January 10, 2006, shall be attached to and
made a part of that certain Lease dated January 10, 2006 (“Lease”), by and between Pasadena
Business Park, LLC. (“Lessor”), and VIASPACE Inc., a Nevada Corporation (“Lessee”) for 171 North
Altadena Drive, Suite 101 (Premises) consisting approximately 5,880 rentable square feet.

The terms and conditions of this Addendum shall amend and modify said Lease thereto only to the
extent included herein. In the event that the terms and conditions of this Addendum should
conflict with the Lease, the terms of this Addendum shall prevail.

	 	51.	 	Commencement Date: On the date when the Premises are substantially completed and
ready for occupancy. Lessor anticipates the completion to be no more than ninety (90)
days after the Lease has been fully executed by all parties and all permits related to
Tenant Improvement are signed off by the City of Pasadena.
	 
	 	52.	 	Tenant Improvement:

	 	a.	 	Lessor, at Lessor’s sole cost and expense to build out premises per a
mutually agreeable space “Floorplan” (If separate A/C require for server room, it
would be at Lessee’s cost)

	 	i.	 	Repaint entire suite with building standard paint
	 
	 	ii.	 	Recarpet entire suite with building standard
carpet & VCT tile in the kitchen and 2 laboratories
	 
	 	iii.	 	Exterior/interior chainlink fences by the south
windows are to be removed upon commencement.
	 
	 	iv.	 	Tenant Improvement to include an exterior vent to
meet applicable codes.

	 	53.	 	Monthly Rent:

	 	a.	 	Month 1 = $10,584.00
	 
	 	b.	 	Month 2-7 = $5,292.00
	 
	 	c.	 	Month 8 – 12 = $10,584.00
	 
	 	d.	 	Month 13 – 24 = $10,901.52
	 
	 	e.	 	Month 25 – 36 = $11,228.57
	 
	 	f.	 	Month 37 – 48 = $11,565.42
	 
	 	g.	 	Month 49 — 60 = $11,912.39
	 
	 	h.	 	Month 61 – 63 = $12,269.76

 

 

	 	54.	 	Non-Smoking: Lessee is aware that the Premises is designated as a “Non-Smoking”
building. All employees and clientele shall smoke outside the Building in Lessor’s
designated smoking area.
	 
	 	55.	 	Options to Extend: Lessee shall have One (1) Five (5) year option to extend the
initials lease term. Lessee shall provide no less than four (4) months prior written
notice. The rent shall be at then prevailing market rate.
	 
	 	56.	 	Termination Option: Lessee shall have the right to terminate the Lease at the
expiration of the 39th month of the lease term by first providing Lessor at
least nine (9) months prior written notice of its intent to exercise such Termination
Option. In the event Lessee exercise such option, then Lessee will pay to Lessor all
unamortized tenant improvement costs, leasing commissions, 3 months rent equals to
$31,752.00.
	 
	 	57.	 	Parking: Lessee shall have the right but not obligated to Ten (10) to Fifteen (15)
non-reserve parking spaces in Nina Street parking structure at $50.00 per month per space
charge throughout the initial term of this lease.
	 
	 	58.	 	Signage: Each sign will be $0.10 per rentable square foot additional to rent and
signage and installation shall be provided by Lessee. Design on signage design must have
Lessor’s consent prior apply with the City of Pasadena. Lessor must receive copy of
written approval of the signage from City of Pasadena before signage installation.
	 
	 	59.	 	Janitorial Service: Lessor, at Lessor’s sole cost and expense will provide janitorial
service 5 days a week. Lessor will also provide janitorial cleaning for kitchen counter,
sink (no dishes) and appliance surface cleaning (no inside appliances cleaning).
	 
	 	60.	 	Tenant Cabling Costs: Lessee shall provide Lessee’s own cabling, server room fit and
finish.
	 
	 	61.	 	Option to Expand: Lessee shall have the right of first refusal on space adjacent to
Premises.
	 
	 	62.	 	Assignment & Subletting: Lessee shall have the right to all or any part of the
Premises subject to Lessor’s approval, which approval shall not be withheld, delayed, or
unreasonably conditioned. Any “Net profits”, which term shall be defined in the Lease and
shall be split with Lessor on a fifty/fifty (50%/50%) basis.
	 
	 	63.	 	No Verbal Promises: No verbal promises have been made other than those expressly
stated in the Lease or Lease Addendum

 

 

	 	64.	 	Operating Expenses: See attached actual expenses for 2004 and projected for 2005.
Year of 2006 is not available.
	 
	 	65.	 	Non-Emergency access: Lessor will provide 24 hour notice to Lessee for non-emergency
access to the Premises.
	 
	 	66.	 	Paragraph 4.2(c)(vi): Lessor will not charge Lessee any other operating expenses
related cost that are not charged to other Lessee in the Building.
	 
	 	67.	 	Paragraph 6.4: Lessor will provide 24 hours advance notice on non-emergency repair to
the suite.
	 
	 	68.	 	Paragraph 8.8: The following sentence is to be added to the end of paragraph 8.8:
“Except any Latent Defect know to Lessor.”
	 
	 	69.	 	Paragraph 13.2: Lessor will insert the following clause “within the time periods
provided in Paragraph 13.1(d)” after the word “notice” and before “or” on line 1.
	 
	 	70.	 	Paragraph 20: Lessee will insert the following clause “and the proceeds of any
insurance” after the work of “Project” on line 2.
	 
	 	71.	 	Access: Lessee shall be permitted access to the building and premises twenty-four
(24) hours per day, three hundred sixty five (365) days per year.

Lessor: Pasadena Business Park, LLC

	 	 	 
	 
	Donald Lam – Manager Member

	 	Date
	 
	 	 
	Lessee: VIASPACE Inc.
	 	 
	 
	 	 
	 
	Carl Kukkonen – Chief Executive Officer

	 	Date

 

 

RULES AND REGULATIONS FOR STANDARD OFFICE LEASE

Dated: January 10, 2006

By and Between: Pasadena Business Park, LLC and VIASPACE Technologies, Inc, a 
                    Nevada Corporation

GENERAL RULES

	 	1.	 	Lessee shall not suffer or permit the obstruction of any Common Areas, including
driveways, walkways, and stairways.
	 
	 	2.	 	Lessor reserves the right to refuse access to any persons Lessor in good faith judges
to be a threat to the safety and reputation of the Project and its occupants.
	 
	 	3.	 	Lessee shall not make or permit any noise or odors that annoy or interfere with other
Lessees or persons having business within the Project.
	 
	 	4.	 	Lessee shall not keep animals or birds within the Project, and shall not bring
bicycles, motorcycles or other vehicles into area not designated as authorized for same.
	 
	 	5.	 	Lessee shall not make, suffer or permit litter except in appropriate receptacles for
that purpose.
	 
	 	6.	 	Lessee shall not alter any lock or install new or additional locks or bolts.
	 
	 	7.	 	Lessee shall be responsible for the inappropriate use of any toilet rooms, plumbing
or other utilities. No foreign substances of any kind are to be inserted therein.
	 
	 	8.	 	Lessee shall not deface the walls, partitions or other surfaces of the Premises or
Project.
	 
	 	9.	 	Lessee shall not suffer or permit anything in or around the Premises or Building that
causes excessive vibration or floor loading in any part of the Project.
	 
	 	10.	 	Furniture, significant freight and equipment shall be moved into or out of the
building only with the Lessor’s knowledge and consent, and subject to such reasonable
limitations, techniques, and timing, as may be designated by Lessor. Lessee shall be
responsible for any damage to the Office Building Project arising from any such activity.
	 
	 	11.	 	Lessee shall not employ any service or contractor for services or work to be
performed in the Building, except as approved by Lessor.
	 
	 	12.	 	Lessor reserves the right to close and lock the Building on Saturdays, Sundays and
Building Holidays, and on other days between the hours of 6:00 pm and 8:00 am.
	 
	 	13.	 	Lessee shall return all keys at the termination of its tenancy and shall be
responsible for the cost of replacing any keys that are lost.
	 
	 	14.	 	No window coverings, shades or awnings shall be installed by Lessee.

	 
	 	15.	 	No Lessee, employee or invitee shall go upon the roof of the Building.
	 
	 	16.	 	Lessee shall not suffer or permit smoking or carrying of lighted cigars or cigarettes
in areas reasonably designated by Lessor or by applicable governmental agencies as
non-smoking areas.
	 
	 	17.	 	Lessee shall not use any method of heating or air conditioning other than as provided
by Lessor and the portable unit in the Computer Room.
	 
	 	18.	 	Lessee shall not install, maintain or operate any vending machines upon the Premises
without Lessor’s written consent
	 
	 	19.	 	The Premises shall not be used for lodging or manufacturing, cooking, or food
preparation.
	 
	 	20.	 	Lessee shall comply with all safety, fire protection and evacuation regulations
established by Lessor or any applicable governmental agency.
	 
	 	21.	 	Lessor reserves the right to waive any one of these rules or regulations, and/or as
to any particular Lessee, and any such waiver shall not constitute a waiver of any other
rule or regulation or any subsequent application thereof to such Lessee.
	 
	 	22.	 	Lessee assumes all risks from theft or vandalism and agrees to keep its Premises
locked as may be required.
	 
	 	23.	 	Lessor reserves the right to make such other reasonable rules and regulations as it
may from time to time deem necessary for the appropriate operation and safety of the
Project and its occupants. Lessee agrees to abide by these and such rules and
regulations.
	 
	 	24.	 	Lessee is aware that the Premises are designated as a “Non-Smoking” building. All
employees and clientele shall smoke outside the building in Lessor’s designated smoking
area.

PARKING RULES

	 	1.	 	Parking areas shall be used only for parking by vehicles no longer than full size,
passenger automobiles herein called ‘Permitted Size Vehicles”. Vehicles other than
Permitted Size Vehicles are herein referred to as “Oversized Vehicles”.
	 
	 	2.	 	Lessee shall not permit or allow any vehicles that belong to or are controlled by
Lessee or Lessee’s employees, suppliers, shippers, customers, or invitees to be loaded,
unloaded, or parked in areas other than those designated by Lessor for such activities.
	 
	 	3.	 	Parking stickers or identification devices shall be the property of Lessor and be
returned to Lessor by the holder thereof upon termination of the holder’s parking
privileges. Lessee will pay such replacement charge as is reasonably established by
Lessor for the loss of such devices.
	 
	 	4.	 	Lessor reserves the right to refuse the sale of monthly identification devices to any
person or entity that willfully refuses to comply with the applicable rules, regulations,
laws and /or agreements.

 

 

	 	5.	 	Lessor reserves the right to relocate all or a part of parking spaces from floor to
floor, within one floor, and/or to reasonably adjacent offsite locations(s), and to
reasonably allocate them between compact and standard size spaces, as long as the same
complies with applicable laws and ordinances and regulations.
	 
	 	6.	 	Users of the parking area will obey all posted signs and park only in the areas
designated for vehicle parking.
	 
	 	7.	 	Unless otherwise instructed, every person using the parking area is required to park
and lock his own vehicle. Lessor will not be responsible for any damage to vehicles,
injury to persons or loss of property, all of which risks are assumed by the party using
the parking area.
	 
	 	8.	 	Validation, if established, will be permissible only by such method or methods as
Lessor and/or its licensee may establish at rates generally applicable to visitor parking.
	 
	 	9.	 	The maintenance, washing, waxing or cleaning of vehicles in the parking structure or
Common Areas is prohibited.
	 
	 	10.	 	Lessee shall be responsible for seeing that all of its employees, agents and invitees
comply with the applicable parking rules, regulations, laws and agreements.
	 
	 	11.	 	Lessor reserves the right to modify these rules and/or adopt such other reasonable
and non-discriminatory rules and regulations as it may deem necessary for the proper
operation of the parking areas.
	 
	 	12.	 	Such parking use as is herein provided is intended merely as a license only and no
bailment is intended or shall be created hereby.
	 
	 	13.	 	Overnight parking is not permitted without Lessor’s written consent.

	 	 	 	 	 	 	 
	LESSOR

	 	 	 	LESSEE	 	 
	 
	 	 	 	 	 	 
	 

Agreed

	 	 	 	 

Agreed
	 	 
	 
	 	 	 	 	 	 
	 

Dated

	 	 	 	 

Dated
	 	 

 

 

SIDE LETTER

MONUMENT SINAGE:

Tenant shall have the right to select the Monument Signage (sign) identification for VIASPACE from
two (2) basic scenarios.

1] No Cost to Tenant.

	 	i.	 	Landlord and Tenant have agreed upon the ‘site containing the Fire Department Stand
Pipe’ (site).
	 
	 	ii.	 	Landlord will remove the ‘tree’ presently in the site and replace with a palm tree
similar to those presently in Landlords adjacent building.
	 
	 	iii.	 	Within said site, Landlord and Tenant have agreed that Tenant may have their sign
within the boundaries of said site and within the rules as given and approved by the City
of Pasadena.
	 
	 	iv.	 	Landlord shall have the right, but not the obligation, to offer multiple tenants
Monument Signage”, to no more than three other tenants (total of 4). If Landlord elects
to exercise this option, tenants will be charge for their pro-rata share of the signage
and installation.
	 
	 	v.	 	VIASPACE would have the 1st choice of their signage placement on the
monument sign and VIASPACE will have the right but not obligated to have their sign twice
as big as the other tenants.

2] Cost to Tenant.

	 	i.	 	Landlord and Tenant have mutually agreed Tenant shall have the right, but not
the obligation, to elect to place their monument sign at the ‘ site in front of the
Building, in the planter opposite the stairwell within the lobby of the Building”
(site) as the location for tenant’s sign.
	 
	 	ii.	 	Landlord and Tenant have agreed the cost shall be consistent with paragraph
58 of the Addendum.

Design on signage design must have Lessor’s consent prior apply with the City of Pasadena.

Lessor must receive copy of written approval of the signage from City of Pasadena before
signage installation.

	 	 	 
	Lessor: Pasadena Business Park, LLC

	 	Lessee: VIASPACE, Inc. a
	 

	 	             Nevada corporation

	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	Manager Member
	 	 	 	Title:
	 	Chief Executive Officer
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 	 	 

Initial

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