Document:

Exhibit 4.2

 

SYNERGY PHARMACEUTICALS, INC.

2009 DIRECTORS’ STOCK OPTION PLAN

 

1.  PURPOSE. The purpose of the Synergy
Pharmaceuticals, Inc. 2009 Directors’ Stock Option Plan (the “Plan”) is to
advance the interests of Synergy Pharmaceuticals, Inc. (the “Company”) by
providing non-employee directors of the Company, through the grant of options
to purchase shares of Common Stock (as hereinafter defined), with a larger
personal and financial interest in the Company’s success.

 

2.  ADMINISTRATION. The Plan shall be
administered by the Company’s Compensation Committee (the “Committee”)
consisting of at least two independent members of the Board of Directors of the
Company (the “Board”). The Committee shall have full power and authority to
interpret the Plan, to establish such rules and regulations as it deems
appropriate for the administration of the Plan, and to take such other action
as it deems necessary or desirable for the administration of the Plan. The
Committee’s interpretation and construction of any provision of the Plan or the
terms of any Option (as hereinafter defined) shall be conclusive and binding on
all parties.

 

3.  PARTICIPANTS. Each director of the Company
who is not an employee or consultant of the Company (an “Outside Director”)
shall be eligible to be granted Options to purchase shares of Common Stock (“Options”)
under the Plan.

 

Nothing
contained in the Plan, or in any Option granted pursuant to the Plan, shall
confer upon any Director any right to the continuation of his or her
directorship or limit in any way the right of the Company to terminate his or
her directorship at any time.

 

4.  THE SHARES. Options may be granted from time
to time under the Plan for the purchase, in the aggregate, of not more than
1,000,000 shares of common stock, par value $0.0001 per share, of the Company (“Common
Stock”) (subject to adjustment pursuant to Section 13). Such shares of
Common Stock may be set aside out of the authorized but unissued shares of
Common Stock not reserved for any other purpose or out of previously issued
shares acquired by the Company and held in its treasury. Any shares of Common
Stock which, by reason of the termination or expiration of an Option or
otherwise, are no longer subject to purchase pursuant to an Option granted
under the Plan may again be subjected to an Option under the Plan.

 

5.  OPTION GRANTS. Options shall be evidenced by
Option agreements which shall be subject to the terms and conditions set forth
in the Plan and such other terms and conditions not inconsistent herewith as
the Committee may approve.

 

(a)         As of the effective date of
his or her initial appointment or election to the Board (the “Initial
Appointment Date”), an Outside Director shall receive a grant of an Option to
purchase 50,000 shares of Common Stock (subject to adjustment pursuant to Section 13).

 

 

(b)        Upon the date of the Annual
Meeting of Stockholders of the Company to be held in 2010 (the “2010 Annual
Meeting”) or any adjournment or adjournments thereof, each Outside Director who
has been reelected at the 2010 Annual Meeting and is continuing as a member of
the Board as of the completion of the 2010 Annual Meeting shall receive an
Option to purchase 15,000 shares of Common Stock (subject to adjustment
pursuant to Section 13).

 

(c)         each year after the 2010
Annual Meeting, upon the date of an Annual Meeting of Stockholders of the
Company (an “Annual Meeting”) each Outside Director who has been reelected at
such Annual Meeting and is continuing as a member of the Board as of the
completion of such Annual Meeting shall receive an Option to purchase 15,000
shares of Common Stock (subject to adjustment pursuant to Section 13);
provided, however, that an Outside Director who has been reelected at such
Annual Meeting and is continuing as a member of the Board as of the completion
of such Annual Meeting but has not been a member of the Board during the entire
period between such Annual Meeting and the prior Annual Meeting shall receive
an Option to purchase that number of shares equal to the product of (i) 15,000
and (ii) a fraction, where the numerator is the number of days in the
12-month period immediately preceding such Annual Meeting during which such
Outside Director was an Outside Director and the denominator is 365.

 

(d)        each year upon the date of
an Annual Meeting, the Board shall have the sole discretion to grant to any Non
Employee Director who has been elected at such Annual Meeting and is continuing
as a member of the Board as of the completion of such Annual Meeting and,
during the time period between such Annual Meeting and the prior Annual
Meeting, who (i) has served on a committee of the Board (but who has not
served as the chairman of a Board Committee), including but not limited to, the
Audit Committee, the Compensation Committee and the Corporate Governance/Nominating
Committee (each, a “Board Committee”), an Option to purchase up to 6,000 shares
of Common Stock and (ii) has served as the chairman of a Board Committee,
an Option to purchase up to 10,000 shares of Common Stock, subject to
adjustment as provided in Section 13.

 

6.  OPTION PRICE. The price (the “Option Price”)
at which shares of Common Stock may be purchased upon the exercise of an Option
granted under the Plan shall be the fair market value of such shares on the
date of grant of such Option. As used herein, fair market value shall be the
closing price of the Common Stock on the date of determination (if the Common
Stock is then traded on a national securities exchange or in the Nasdaq
National Market System) or, if not so traded, the average of the closing bid
and asked prices thereof on such day or, if the Common Stock is not traded on
the date of determination, on the last preceding date on which the Common Stock
is traded.

 

7.  TERM AND EXERCISABILITY OF OPTIONS. Options
shall be granted for a maximum term of 10 years. Subject to the other
provisions of the Plan relating to exercisability of Options, or as otherwise
provided by the Committee and evidenced in an Option agreement, (i) the
participant who received a grant on the Initial Appointment Date shall have the
cumulative right as of the first, second, and third anniversaries of the date
of grant, to purchase up to one-third, two-thirds, and 100%, respectively, of
the

 

 

Option
Shares and (ii) the participant who receives a grant on a date other than
the Initial Appointment Date shall have the right as of the first anniversary
of the date of grant to purchase up to 100% of the Option Shares; provided,
however, that in the event of a Change of Control, the participant shall have
the cumulative right to purchase up to 100% of the Option Shares. Vesting of an
Option will cease on the date of the participant ceasing to be a director of
the Company.

 

A
Change of Control means the happening of any of the following:

 

(a)  When any person, as defined in Section 3(a)(9) of
the Securities Exchange Act of 1934 (the “Exchange Act”) and as used in
Sections 13(d) and 14(d) thereof, including a group as defined in Section 13(d) of
the Exchange Act, but excluding the Company and any subsidiary and any employee
benefit plan sponsored or maintained by the Company or any subsidiary
(including any trustee of such plan acting as trustee), or any person, entity
or group specifically excluded by the Board, directly or indirectly, becomes
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act, as
amended from time to time) of securities of the Company representing 20 percent
or more of the combined voting power of the Company’s then outstanding
securities;

 

(b)  When Incumbent Directors cease for any reason
to constitute at least two-thirds of the Board (where Incumbent Director means
any director on the date of adoption of the Plan and any director elected by,
or on the recommendation of, or with the approval of, a majority of the
directors who then qualified as Incumbent Directors);

 

(c)  The effective date of any merger or
consolidation of the Company with another corporation where (i) the
shareholders of the Company, immediately prior to the merger or consolidation,
do not beneficially own, immediately after the merger or consolidation, shares
entitling such shareholders to 50% or more of all votes (without consideration
of the rights of any class of stock to elect directors by a separate class
vote) to which all shareholders of the corporation issuing cash or securities
in the merger or consolidation would be entitled in the election of directors,
or (ii) where the members of the Board, immediately prior to the merger or
consolidation, do not, immediately after the merger or consolidation, constitute
a majority of the board of directors of the corporation issuing cash or
securities in the merger; provided, however, that, in each of the cases set
forth above in clauses (c)(i) or (c)(ii), no Change of Control shall be
deemed to take place if the transaction was approved by the Board of Directors,
the majority of the members of which were in place prior to the commencement of
such sale, merger or consolidation; or

 

(d)  The date of approval by the shareholders of
the Company of the liquidation of the Company or the sale or other disposition
of all or substantially all of the assets of the Company.

 

8.
 TERMINATION OF DIRECTORSHIP. Except as
otherwise provided in this Section 8, or as otherwise provided by the
Committee and evidenced in an Option agreement, no person may exercise a vested
Option more than three months after the first date on which he or she ceases to
be a director of the Company. If a participant ceases to

 

 

be
a director of the Company by reason of death or disability, any vested Options
held by him or her may be exercised within 12 months after the date he or she
ceases to be a director of the Company. In no event may an Option be exercised
after the expiration of the term of such Option.

 

9.  PAYMENT. Full payment of the purchase price
for shares of Common Stock purchased upon the exercise, in whole or in part, of
an Option granted under the Plan shall be made at the time of such exercise.
The Option Price may be paid in cash, in shares of Common Stock valued at their
fair market value on the date of exercise or with any other form of
compensation permissible for such purposes under Delaware law, as determined by
the Committee in its judgment. Alternatively, an Option may be exercised in
whole or in part by delivering a properly executed exercise notice together
with irrevocable instructions to a broker to deliver promptly to the Company
the amount of sale or loan proceeds necessary to pay the Option Price, and such
other documents as the Committee may determine.

 

No
shares of Common Stock shall be issued or transferred to a participant until
full payment therefor has been made, and a participant shall have none of the
rights of a stockholder until shares are issued or transferred to him or her.

 

10.  NONTRANSFERABILITY. Options granted under the
Plan shall not be transferable other than by will or by the laws of descent and
distribution, and, during a participant’s lifetime, shall be exercisable only
by him or her. Notwithstanding the foregoing, a participant may transfer any
Option granted under the Plan to the participant’s spouse, children,
grandchildren, parents, and/or siblings or to one or more trusts for the
benefit of such family members, if the agreement evidencing such Option so
provides and the participant does not receive any consideration for the
transfer. Any Option so transferred shall continue to be subject to the same
terms and conditions that applied to such Option immediately prior to its
transfer (except that such transferred Option shall not be further transferable
by the transferee during the transferee’s lifetime).

 

11.  ISSUANCE OF SHARES. If a participant so
requests, shares purchased upon the exercise of an Option may be issued or
transferred in the name of the participant and another person jointly with the
right of survivorship.

 

12.  STATUS OF OPTIONS. Options granted under the
Plan are nonqualified options not qualifying as incentive stock options under Section 422
of the Internal Revenue Code of 1986, as amended.

 

13.  CHANGES IN CAPITAL STRUCTURE, ETC. In the
event of any merger, share exchange, reorganization, consolidation,
recapitalization, reclassification, distribution, stock dividend, stock split,
reverse stock split, split-up, spin-off, or other similar transaction or event
affecting the Common Stock, the Committee is authorized, to the extent it deems
appropriate, to make substitutions or adjustments in the aggregate number and
kind of shares of Common Stock reserved for issuance under the Plan, in the
number, kind and price of shares of Common Stock subject to outstanding awards,
and in the

 

 

award
limits under the Plan (or to make provision for cash payment to the holder of
an Option). Outstanding Options shall be appropriately amended as to price and
other terms in a manner consistent with the aforementioned adjustment to the
shares of Common Stock subject to the Plan. Fractional shares resulting from
any adjustment in Options pursuant to this Section 13 may be settled in
cash or otherwise as the Committee shall determine. Notice of any adjustment shall
be given by the Company to each holder of an Option which shall have been
adjusted and such adjustment (whether or not such notice is given) shall be
effective and binding for all purposes of this Plan.

 

14.  EFFECTIVE DATE AND TERMINATION OF PLAN. The
Plan shall become effective on the date of its adoption by the Board or a duly
authorized committee thereof, subject to the approval of the Plan by the
Company’s stockholders at the 2009 Annual Meeting. The Plan shall terminate 10
years from the date of its adoption or such earlier date as the Board or such
committee may determine. Any Option outstanding under the Plan at the time of
its termination shall remain in effect in accordance with its terms and
conditions and those of the Plan.

 

15.  AMENDMENT. The Board or a duly authorized
committee thereof may amend the Plan in any respect from time to time;
provided, however, that no amendment shall become effective unless approved by
affirmative vote of the Company’s shareholders if such approval is necessary or
desirable for the continued validity of the Plan or if the failure to obtain
such approval would adversely affect the compliance of the Plan with Rule 16b-3
or any successor rule under the Securities Exchange Act of 1934, as
amended, or any other rule or regulation. No amendment may, without the
consent of a participant, impair his or her rights under any Option previously
granted under the Plan.

 

The
Board or a duly authorized committee thereof shall have the power, in the event
of any disposition of substantially all of the assets of the Company, its
dissolution, any merger or consolidation of the Company with or into any other
corporation, or the merger or consolidation of any corporation into the
Company, to amend all outstanding Options to terminate such Options as of such
effectiveness. If the Board shall exercise such power, all Options then
outstanding shall be deemed to terminate upon such effectiveness.

 

16.  LEGAL AND REGULATORY REQUIREMENTS. No Option
shall be exercisable and no shares will be delivered under the Plan except in
compliance with all applicable federal and state laws and regulations
including, without limitation, compliance with the rules of all domestic
stock exchanges on which the Common Stock may be listed. Any share certificate
issued to evidence shares for which an Option is exercised may bear such
legends and statements as the Committee shall deem advisable to assure
compliance with federal and state laws and regulations. No Option shall be
exercisable, and no shares will be delivered under the Plan, until the Company
has obtained consent or approval from regulatory bodies, federal or state,
having jurisdiction over such matters as the Committee may deem advisable.

 

 

In
the case of the exercise of an Option by a person or estate acquiring the right
to exercise the Option by bequest or inheritance, the Committee may require
reasonable evidence as to the ownership of the Option and may require consents
and releases of taxing authorities that it may deem advisable.Exhibit 10.23

 

 

STANDARD MULTI-TENANT OFFICE
LEASE - GROSS

AIR COMMERCIAL REAL ESTATE ASSOCIATION

 

1.                                      Basic
Provisions (“Basic Provisions”).

 

1.1                                 Parties: This Lease (“Lease”), dated for reference purposes only July 31, 2009,
is made by and
between AYM Investment, LLC, a California limited liability company, Laurel-Crest
Group, LLC, a California limited liability company, and Synchronicity, LLC, a
California limited liability company (collectively, “Lessor”)
and Wilshire State Bank, a California banking corporation (“Lessee”), (collectively the “Parties”,
or individually a “Party”).

 

1.2(a)                   Premises: That certain
portion of the Project (as defined below), known as Suite Numbers(s) 207-211,
on the, second floor(s), consisting of approximately 5,500 rentable
square feet and approximately
                                
useable square feet (“Premises”).
The Premises are located at: 401 East 11th Street, in the City of Los Angeles, County of Los Angeles, State of
California, with zip code 90015. In addition to Lessee’s rights to use and
occupy the Premises as hereinafter specified, Lessee shall have non-exclusive
rights to the Common Areas (as defined in Paragraph 2.7 below) as hereinafter specified,
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 35,000 rentable
square feet. (See also Paragraph 2)

 

1.2(b)                  Parking: zero (0) unreserved
and 23 reserved vehicle parking spaces at a monthly cost of $                               per
unreserved space and $zero (0) per reserved space. (See Paragraph
2.6)

 

1.3                                 Term: Ten (10) years
and zero (0) months (“Original Term”)
commencing July 1, 2009 (“Commencement Date”)
and ending June 30, 2019 (“Expiration Date”).
(See also Paragraph 3)

 

1.4                                 Early
Possession: Not applicable (“Early
Possession Date”). (See also Paragraphs 3.2 and 3.3)

 

1.5                                 Base
Rent: $15,400.00 per month (“Base Rent)”, payable on the first (1) day of each month commencing on the
Commencement Date. (See also Paragraph 4)

 

x If this box is
checked, there are provisions in this Lease for the Base Rent to be adjusted in
accordance with Addendum Section 51.

 

1.6                                 Lessee’s
Share of Operating Expense Increase:                                         
percent (         %) (“Lessee’s Share”). Lessee’s Share has been calculated by
dividing the approximate rentable square footage of the Promises by the total
approximate square, footage of the rentable space contained in the Project and
shall not be subject to revision except in 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: $15,400.00 for the period July 1 - July 31, 2009.

 

(b)                                 Security
Deposit: $15,400.00 (“Security Deposit”).
(See also Paragraph 5)

 

(c)                                  Parking: $0.00 for the
period                                                                           
..

 

(d)                                 Other: $0.00 for                                                                                     .

 

(e)                                  Total
Due Upon Execution of this Lease: $30,800.00.

 

1.8                                  Agreed Use: full service retail bank and general
offices related to such banking operations. (See also Paragraph 6)

 

1.9                                 Base Year;
Insuring Party. The Base Year is
                        . Lesser is the “Insuring Party”. (See also Paragraphs 4.2 and 8)

 

1.10                           Real
Estate Brokers: (See also Paragraph 15)

 

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

 

x  Executive Properties represents Lessor
exclusively (“Lessor’s Broker”);

 

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

 

o not applicable represents
both Lessor and Lessee (“Dual Agency”).

 

(b)                                    Payment
to Brokers: Upon execution and delivery of this Lease by both
Parties, Lessor shall pay Ten Thousand Dollars ($10,000) to Lessee’s the  Brokers the brokerage fee agreed to in
a separate written agreement (or if there is no such agreement, the sum of                                   
or              %
of the total Base Rent for the brokerage services rendered by the
Lessee’s Brokers to Lessee).

 

1.11                           Guarantor. The
obligations of the Lessee under this Lease shall be guaranteed by None (“Guarantor”). (See also Paragraph 37)

 

1.12                           Business
Hours for the Building: 8 a.m. to 7 p.m., Mondays through Fridays
(except Building Holidays) and

 

	
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  ©1999- AIR
  COMMERCIAL REAL ESTATE ASSOCIATION

  	
  FORM OFG-4-6/06E

  
				

 

1

 

8
a.m. to 2 p.m. on Saturdays (except Building Holidays). “Building Holidays” shall mean the
dates of observation of New Year’s Day, President’s Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and other legally
recognized bank holidays.

 

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

 

x Janitorial
services

 

o Electricity

 

x
Other (specify): security and heating, ventilation and air conditioning

 

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

 

x an Addendum consisting
of Paragraphs 51 through 69;

 

x a plot plan
depicting the Premises;

 

x a current set
of the Rules and Regulations;

 

o a Work Letter;

 

o a janitorial
schedule;

 

x
other (specify): 50 (option to extend addendum, providing two options to extend
lease term, each option being for five years).

 

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 n “AS
IS”  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 on said date, that the structural elements of the
roof, bearing walls and foundation of the Unit shall be free of material defects,
and that the Premises do not contain hazardous levels of any mold or fungi
defined as toxic under applicable state or federal law.

 

2.3                                  Compliance. Lessor
warrants to the best of its knowledge 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 ordinances (“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 49), 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 setting 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 cease the use of the Premises which requires such Capital
Expenditure and deliver to Lessor written notice specifying a termination date
at least 90 days thereafter. Such termination date shall, however, in no event
be earlier than the last day that Lessee could legally utilize the Premises
without commencing such Capital Expenditure.

 

(b)    If
such Capital Expenditure is not the result of the specific and unique use of
the Premises by Lessee (such as, governmentally mandated seismic
modifications), then. Lessor shall pay for such Capital Expenditure and
Lessee shall only be obligated to pay, each month-during the-remainder of the
term of this Lease, on the date that on which the Base Rent is duo, an amount
equal to 144th of the portion of such costs reasonably attributable to the
Promises. Lessee shall pay Interest on the balance but may prepay its
obligation at any time. If, however, such Capital Expenditure is required
during the last 2 years of this Lease or if Lessor reasonably determines that
it is not economically feasible to pay the cost its share thereof,
Lessor shall have the option to terminate this Lease upon 90 days prior written
notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days
after receipt of Lessor’s termination notice that Lessee will pay for such
Capital Expenditure. If Lessor does not elect to terminate; and fails to pay
the cost 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 Agreed Use,
change in use, change in intensity of use, or modification to the Premises
then, and in that event, Lessee shall either: (i) immediately cease such
Agreed Use, changed use or intensity of use and/or take such other steps as may
be necessary to eliminate the requirement for such Capital Expenditure, or (ii) complete
such Capital Expenditure at its own expense. Lessee shall not 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, and Lessee has, prior to the execution
and delivery of this Lease, independently inspected the same and is satisfied
therewith (b) Lessee has made such investigation as it deems necessary
with reference to such matters and assumes all responsibility therefor as the
same relate to its occupancy of the Premises, and is satisfied therewith and (c) neither
Lessor, Lessor’s agents, nor Brokers have made any oral or written
representations or warranties with respect to said matters other than as set
forth in this Lease. In addition, Lessor acknowledges that: (i) Brokers
have made no representations, promises or warranties concerning Lessee’s
ability to honor the Lease or suitability to occupy the Premises, and (ii) it
is Lessor’s sole responsibility to investigate the financial capability and/or
suitability of all proposed tenants.

 

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

 

2.6                                  Vehicle
Parking. So long as Lessee is not in default, and 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 Lesser 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 Lesser, 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.

 

	
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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, temporarily 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, 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 Building and the Project and
their invitees. The Lessee agrees to abide by and conform to all such Rules and
Regulations, and shall use its best efforts 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
temporarily 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 Promises
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 be in effect during such-period. Any such
early possession shall not affect the Expiration Date.

 

3.3                                   See Section 69
of the Lease Addendum. Delay In
Possession. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Promises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession by such date, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the-validity of this Lease.—Lessee shall not, however,
be-obligated to pay Rent or perform its other obligations until Lessor delivers
possession of the Promises and any period of rent abatement that Lessee would
otherwise have enjoyed shall run from the date of delivery of possession and
continue for a period equal to what Lessee would otherwise have enjoyed under
the terms hereof, but minus any days of delay caused by the acts or omissions
of Lessee. If possession is not delivered within 60 days after the Commencement
Date, 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 and of such 60 day period, cancel this Lease, in which event the
Parties shall be discharged from all obligations hereunder. If such written
notice is not received by Lessor within said 10 day period, Lessee’s right to
cancel shall terminate. If possession of the Premises is not delivered within
120 days after the Commencement Date, this Lease shall terminate unless other
agreements arc reached between Lessor and Lessee, in writing.

 

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

 

4.                                       Rent.

 

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

 

4.2                                  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 twelve (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)                                     The following
costs relating to the ownership and operation of the Project, calculated as if
the Project was at least 95% occupied, are defined as “Operating Expenses”:

 

(i)                                      Costs relating
to 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, building exteriors and roofs, fences and gates;

 

(bb)                           All heating, air
conditioning, plumbing, electrical systems, life 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)                                   The cost of trash disposal,
janitorial and Security services, post control services, and the costs of any
environmental inspections;

 

(iii)                                The cost-of any other service
to be provided by Lessor that is elsewhere in this Lease stated to be an “Operating Expense”;

 

(iv)                               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 motored;

                                                 

(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
improvement 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 improvement over a 12 year period and Lessee shall not be required
to pay more than Lessees Share of 1/144th of the cost of such Capital
Expenditure in any given month;

 

(ix)                                 The cost to replace 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 promises,
Building, or other building. However, any such item that is not specifically
attributable to the Building or to any other building 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 sot forth in Subparagraph
4.2(c) shall not be deemed to impose an obligation upon Lessor to either
have said 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 thern.

 

	
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(f)                                    Lessee’s Share of Operating Expense
Increase is payable monthly on the same day as the Base Rent is due hereunder. The amount of
such payments shall be based on Lesser’s estimate-of the Operating Expense
Expenses. Within 60 days after written request (but not more than once each
year) Lesser shall deliver to Lessee a reasonably detailed statement showing
Lessee’s Share of the actual Common Area Operating Expenses incurred during the
preceding year a reasonably detailed statement showing Lessee’s Share of the
actual Operating Expense Increase incurred during such year. If Lessee’s
payments during such Year exceed Lessee’s Share, Lessee shall credit the amount
of such ever payment against Lessee’s future-payments. If Lessee’s payments
during-such Year-were-less than Lessee’s Share, Lessee’s shall pay to Lesser the
amount of the deficiency within 10 days after delivery by lesser to Lessee of
said statement. Lessor and Lessee shall forthwith adjust between them by each-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.

 

(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). All monetary amounts shall be
rounded to the nearest whole dollar. In the event that any invoice prepared by
Lessor is inaccurate such inaccuracy shall not constitute a waiver and Lessee
shall be obligated to pay the amount set forth in this Lease. Rent for any
period during the term hereof which is for less than one full calendar month
shall be prorated based upon the actual number of days of said month. Payment
of Rent shall be made to Lessor at its address stated herein or to such other
persons or place as Lessor may from time to time designate in writing. Acceptance
of a payment which is less than the amount then due shall not be a waiver of
Lessor’s rights to the balance of such Rent, regardless of Lessor’s endorsement
of any check so stating. In the event that any check, draft, or other
instrument of payment given by Lessee to Lessor is dishonored for any reason,
Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charge
and Lessor, at its option, may require all future Rent be paid by cashier’s
check. Payments will be applied first to accrued late charges and attorney’s
fees, second to accrued interest, then to Base Rent and Common Area Operating
Expenses, and any remaining amount to any  other outstanding charges or
costs.

 

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

 

6.                                       Use.

 

6.1                                 Use. Lessee shall
use and occupy the Premises only for the Agreed Use, or any other legal use
which is reasonably comparable thereto, and for no other purpose. Lessee shall
not use or permit the use of the Premises in a manner that is unlawful, creates
damage, waste or a nuisance, or that disturbs occupants of or causes damage to
neighboring premises or properties. Other than guide, signal and seeing eye
dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds,
fish, or reptiles. Lessor shall not unreasonably withhold or delay its consent
to any written request for a modification of the Agreed Use, so long as the
same will not impair the structural integrity of the improvements 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 in or
on the Premises which constitutes a Reportable Use of Hazardous Substances without
the express prior written consent of Lessor and timely compliance (at Lessee’s
expense) with all Applicable Requirements. “Reportable Use”
shall mean (i) the installation or use of any above or below ground
storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration or business plan
is required to be filed with, any governmental authority, and/or (iii) the
presence at the Premises of a Hazardous Substance with respect to which any
Applicable Requirements requires that a notice be given to persons entering or
occupying the Premises or neighboring properties. Notwithstanding the
foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use 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 therefor. In addition, Lessor may condition its
consent to any Reportable Use upon receiving such additional assurances as
Lessor reasonably deems necessary to protect itself, the public, the Premises
and/or the environment against damage, contamination, injury and/or liability,
including, but not limited to, the installation (and removal on or before Lease
expiration or termination) of protective modifications (such as concrete
encasements) and/or increasing the Security Deposit.

 

(b)                                 Duty to
Inform Lessor. If a responsible officer of Lessee or Lessor 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 the other Party, then such Party Lessee shall immediately give
written notice of such fact to the other Party Lessor, and provide to
such other Party 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 or the
Project (including through the plumbing or sanitary sewer system) and shall
promptly, at Lessee’s expense, comply with all Applicable Requirements and take
all investigatory and/or remedial action reasonably recommended, whether or not
formally ordered or required, for the cleanup of any contamination of, and for
the maintenance, security and/or monitoring of the Premises, the Project or
neighboring properties, that was caused or materially contributed to by Lessee,
Lessee’s agents, employees, contractors or anyone else at the direction of
Lessee or under Lessee’s dominion and control, or pertaining to or involving
any Hazardous Substance brought onto the Premises or the Project during the
term of this Lease or Lessee’s use and occupancy of the Project, by or for
Lessee, or any third party at Lessee’s direction or under Lessee’s dominion or
control.

 

(d)                                 Leasee
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 or the Project by
or for Lessee, Lessee’s agents, employees or contractors, or any third party acting
at Lessee’s direction or control or under Lessee’s dominion or control (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 agents
or contractors, or any third party acting at Lessee’s direction or control or
under Lessee’s dominion or control). 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, Lessee’s agents,
employees, contractors, or any third party acting at Lessee’s direction or
control, or under Lessee’s dominion and control 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
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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, exist on the Premises
during the term of this Lease which are not caused by or contributed to by
Lessee, Lessee’s agents, employees, contractors, or any third party acting at
Lessee’s direction or control, or under Lessee’s dominion and control, or which
are caused by the gross negligence or willful misconduct of Lessor, its agents
or employees. Lessor’s obligations, as and when required by the Applicable
Requirements, shall include, but not be limited to, the cost of investigation,
removal, remediation, restoration and/or abatement, and shall survive the
expiration or termination of this Lease.

 

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

 

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

 

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

 

6.4                                 Inspection;
Compliance. Lessor and Lessor’s “Lender”
(as defined in Paragraph 30) and consultants shall have the right to enter into
Premises at any time, in the case of an emergency, and otherwise at reasonable
times, after reasonable notice with Lessee having the right to have its representatives
accompany Lessor on any such non-emergency entry, 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
9.1e) is found to exist or be imminent, or the inspection is requested or
ordered by a governmental authority. In such case, Lessee shall upon request
reimburse Lessor for the cost of such inspection, so long as such inspection is
reasonably related to the violation or contamination. In addition, Lessee shall
provide copies of all relevant material safety data sheets ( MSDS)  to Lessor within 10 days of the
receipt of written request therefor.

 

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

 

7.1                                 Lessee’s
Obligations. Notwithstanding Lessor’s Lessee shall
have the sole obligation to, at Lessee’s sole cost and expense, keep the
Premises in good condition and repair if Lessor elects to perform any such
maintenance or repair work, then 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 serves 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 Utility
installations made by Lessee that are not yet owned by Lessor pursuant to
Paragraph 7.4(a).

 

(b)                                 Consent. Lessee shall
not make any Alterations or Utility Installations to the Premises without
Lessor’s prior written consent. Lessee may, however, make non-structural
Utility Installations to the interior of the Premises (excluding the roof)
without such consent but upon notice to Lessor, as long as they are not visible
from the outside, do not involve puncturing, relocating or removing the roof,
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 (iii) compliance with all conditions of said permits and other
Applicable Requirements in a prompt and expeditious manner. Any Alterations or
Utility Installations shall be performed in a workmanlike manner with good and
sufficient materials. Lessee shall promptly upon completion furnish Lessor with
asbuilt plans and specifications. For work which costs an amount in excess of
one month’s Base Rent, Lessor may condition its consent upon Lessee providing a
lien and completion bond in an amount equal to 150% of the estimated cost of
such Alteration or Utility Installation and/or upon Lessee’s posting an
additional Security Deposit with Lessor.

 

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

 

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.

 

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

 

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

 

8.                                       Insurance;
Indemnity.

 

8.1                               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 (o)(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 Promises, 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. Lessee shall add Lessor as an additional insured by means of
an endorsement at least as broad as the Insurance Service Organization’s “Additional
Insured-Managers or Lessors of Premises” Endorsement and coverage shall also be
extended to include damage caused by heat, smoke or fumes from a hostile fire.
The policy shall not contain any intra-insured exclusions as between insured
persons or organizations, but shall include coverage for liability assumed
under this Lease as an “insured contract” for the
performance of Lessee’s indemnity obligations under this Lease. The limits of
said insurance shall not, however, limit the liability of Lessee nor relieve
Lessee of any obligation hereunder. Lessee shall provide an endorsement on its
liability policy(ies) which provides that its insurance shall be primary to and
not contributory with any similar insurance carried by Lessor, whose insurance
shall be 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 policy 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 insurable
replacement cost of the Building and/or Project, as the same shall exist from
time to time, or the amount required by any Lender, but in no event more than
the commercially reasonable and available insurable value thereof. 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, at Lessor’s option, such policy or
policies shall insure against all risks of direct physical loss or damage
(except the perils of flood and/or earthquake unless required by a Lender),
including coverage for debris removal and the enforcement of any Applicable
Requirements requiring the upgrading, demolition, reconstruction or replacement
of any portion of the Premises as the result of a covered loss. Said policy or
policies shall also contain an agreed valuation provision in lieu of any
coinsurance clause, waiver of subrogation, and inflation guard protection
causing an increase in the annual property insurance coverage amount by a
factor of not less than the adjusted U.S. Department of Labor Consumer Price
Index for All Urban Consumers for the city nearest to where the Premises are
located. If such insurance coverage has a deductible clause, the deductible
amount shall 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
insurance”). Said insurance shall contain an agreed valuation
provision in lieu of any coinsurance clause, and the amount of coverage shall
be adjusted annually to reflect the projected Rent otherwise payable by Lessee,
for the next 12 month period.

 

(c)                                  Adjacent
Premises. Lessee shall as additional
rent 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 which are not consistent with the Agreed Use.

 

(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
herein are adequate to cover Lessee’s property, business operations or
obligations under this Lease.

 

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

 

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

 

8.7                                 Indemnity.
Except for Lessor’s gross negligence or willful misconduct,
Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor
and its agents, Lessor’s master or ground lessor, partners and Lenders, from
and against any and all claims, loss of rents and/or damages, liens, judgments,
penalties, reasonable attorneys’ and consultants’ fees, expenses and/or liabilities
arising out of, involving, or in connection with, the use and/or occupancy of
the Premises or the Project by Lessee, Lessee’s agents, employees, contractors,
or any third party acting at Lessee’s direction or control, or under Lessee’s
dominion and control. If any action or proceeding is brought against Lessor by
reason of any of the foregoing matters,

 

	
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Lessee shall upon notice defend the same at Lessee’s expense by counsel
reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in
such defense. Lessor need not have first paid any such claim in order to be
defended or indemnified.

 

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

 

8.9                                 Failure
to Provide insurance.  Lessee acknowledges that any failure on its
part to obtain or maintain the insurance required herein will expose Lessor to
risks and potentially cause Lessor to incur costs not contemplated by this
Lease, the extent of which will be extremely difficult to ascertain.
Accordingly, for any month or portion thereof that Lessee does not maintain the
required insurance and/or does not provide Lessor with the required binders or
certificates evidencing the existence of the required insurance, the Base Rent
shall be automatically increased, without any requirement for notice to Lessee,
by an amount equal to 10% of the then existing Base Rent or $100, whichever is
greater. The parties agree that such increase in Base Rent represents fair and
reasonable compensation for the additional risk/costs that Lessor will incur by
reason of Lessee’s failure to maintain the required insurance.  Such increase in Base Rent shall in no event
constitute a waiver of Lessee’s Default or Breach with respect to the failure
to maintain such insurance, prevent the exercise of any of the other rights and
remedies granted hereunder, nor relieve Lessee of its obligation to maintain
the insurance specified in this Lease.    Lessor Indemnity. Notwithstanding Sections
8.7 and 8.8 to the contrary, Lessee shall not be required to indemnify and hold
Lessor harmless from any claims for damage to any person or property resulting
from the gross negligence or willful misconduct of Lessor in connection with
Lessor’s activities in the Building (except for damage to Lessee’s
improvements, personal property, fixtures, furniture and equipment in the
Premises, to the extent Lessee is required to obtain the requisite insurance
coverage pursuant to the Lease). Except for any claims caused or contributed to
by the acts or omissions of Lessee, Lessee’s agents, employees, contractors, or
any third party acting at Lessee’s direction or control or under Lessee’s
dominion and control, or any claims arising from Lessee’s Breach or Default
hereunder, Lessor shall indemnify and hold Lessee harmless from any claims for
damage to person or property resulting from the gross negligence or willful misconduct
of Lessor in connection with Lessor’s activities in the Building (except for
damage to Lessee’s improvements, personal property, fixtures, furniture and
equipment in the Premises, to the extent Lessee is required to obtain the
requisite insurance coverage pursuant to the Lease). The foregoing exclusion
from Lessee’s indemnity and Lessor’s agreement to indemnify and hold Lessee
harmless are not intended to and shall not relieve any insurance carrier of its
obligations under policies required to be carried by Lessor or Lessee,
respectively, pursuant to the Lease to the extent that such policies cover the
results of such acts, omissions or willful misconduct.

 

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 twelve (12) 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 actually
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 readily available for a
commercially reasonable premium and 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  absence of coverage or shortage was
due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance
coverage was not commercially reasonable and available, Lessor shall have no
obligation to pay for the shortage in insurance proceeds or to fully restore
the unique aspects of the Premises unless Lessee provides Lessor with the funds
to cover same, or adequate assurance thereof, within 10 days following receipt
of written notice of such shortage and request therefor.  If Lessor receives said funds or adequate
assurance thereof within said 10 day period, the party responsible for making
the repairs shall complete them as soon as reasonably possible and this Lease
shall remain in full force and effect. If such funds or assurance are not
received, Lessor may nevertheless elect by written notice to Lessee within 10
days thereafter to: (i) make such restoration and repair as is
commercially reasonable with Lessor paying any shortage in proceeds, in which
case this Lease shall remain in full force and effect, or (ii) have this
Lease terminate 30 days thereafter.  
Lessee shall not be entitled to reimbursement of any funds contributed
by Lessee to repair any such damage or destruction.   Premises Partial Damage due to flood or
earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be
some insurance coverage, but the net proceeds of any such insurance shall be made
available for the repairs if made by either Party.

 

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

 

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

 

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

 

9.6                                 Abatement
of Rent; Lessee’s Remedies.

 

	
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(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. If the repair or restoration is commenced within such 30 days, this
Lease shall continue in full force and effect. “Commence” shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs.

 

9.7                                 Termination;
Advance Payments.   Upon termination
of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable  adjustment shall be made
concerning advance Base Rent and any other advance payments made by Lessee to
Lessor.   Lessor shall, in addition,
return to Lessee so much of Lessee’s Security Deposit as has not been, or is
not then required to be, used by Lessor.

 

10.                                 Real
Property Taxes.

 

10.1                           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 therefrom, and/or Lessor’s business
of leasing, by any authority having the direct or indirect power to tax and
where the funds are generated with reference to the 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:
(i) imposed by reason of events occurring during the term of this Lease,
including but not limited to, a change in the ownership of the Project,
(ii) a change in the improvements thereon, and/or (iii)!levied or assessed on
machinery or equipment provided by Lessor to Lessee pursuant to this Lease.

 

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   Base Rent payments 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 or
by reason of any alterations or improvements to the Premises made by Lessor
subsequent to the execution of this Lease by the Parties.

 

10.4                           Joint
Assessment.  If the Building is not separately assessed,
Real Property Taxes allocated to the Building shall be an equitable proportion
of the Real Property Taxes for all of the land and improvements included within
the tax parcel assessed, such proportion to be 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 an 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 setting forth the taxes applicable to Lessee’s property.

 

11.                                 Utilities
and Services.

 

11.1                           Services
Provided by Lossor.  Lessor shall procure from utilities companies
who shall provide heating,
ventilation, air conditioning, reasonable amounts of
electricity for normal lighting and office machines (and Lessee shall pay for
all charges therefor), water for reasonable and normal drinking and lavatory
use in connection with an office. Lessee shall be responsible to perform and
pay for, and replacement light bulbs and/or fluorescent tubes and
ballasts for standard overhead fixtures and all other fixtures in the Premises.
Lessor Lessee, at Lessee’s sole cost and expense, 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 as and when desired by Lessee. 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.  Lessee
acknowledges that electrical service to the Premises is separately metered and
shall pay for the electrical usage and all taxes and other costs associated
with such electricity.  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
that the utility companies provide the same. 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 or
services, including but not limited to security and trash services, over
standard office usage for the Project. Lessor shall require Lessee to 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 of 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 basis, of 25% or
more of the voting control of Lessee shall constitute a change in control for
this purpose.

 

(c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
transfer, leveraged 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 either: (i) terminate this Lease, or (ii) upon 30
days written notice, increase the monthly Base Rent to 110% of the Base Rent
then in effect. Further, in the event of such Breach and rental adjustment,
(i) the purchase price of any option to purchase the Premises held by
Lessee shall be subject to similar adjustment to 110% of the price previously
in effect, and (ii) all fixed and non-fixed rental adjustments scheduled
during the remainder of the Lease term shall be increased to 110% of the
scheduled adjusted rent.

 

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

 

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

 

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

 

12.2                           Terms
and Conditions Applicable to Assignment and Subletting.

 

(a) Regardless of Lessor’s consent, no assignment or subletting
shall:   (i) be effective without
the express written assumption by

 

	
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such
assignee or sublessee of the obligations of Lessee under this Lease,
(ii) release Lessee of any obligations hereunder, or (iii) alter the
primary liability of Lessee for the payment of Rent or for the performance of
any other obligations to be performed by Lessee.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13.                                 Default;
Breach; Remedies.

 

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

 

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

 

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

 

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

 

(d) The failure by Lessee to provide (i) reasonable written
evidence of compliance with Applicable Requirements, (ii) the service
contracts required by the specific provisions of this Lease, (iii) the
rescission of an unauthorized assignment or subletting, (iv) an Estoppel
Certificate, (v) a requested subordination that meets the requirements of
this Lease, (vi) evidence concerning any guaranty and/or Guarantor,
(vii) any document requested under Paragraph 41, (viii) material data
safety sheets (MSDS), or (ix) any other documentation or information which
Lessor may reasonably require of Lessee under the terms of this Lease, where
any such failure continues for a period of 10 days following written notice to
Lessee.

 

(e) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 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.

 

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

 

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

 

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

 

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

 

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

 

	
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separate
suit. If a notice and grace period required under Paragraph 13.1 was not
previously given, a notice to pay rent or quit, or to perform or quit given to
Lessee under the unlawful detainer statute shall also constitute the notice
required by Paragraph 13.1. In such case, the applicable grace period required
by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and
the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease and/or by said
statute.

 

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

 

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

 

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

 

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

 

13.5                           Interest.  Any monetary payment due Lessor hereunder,
other than late charges, not received by Lessor, when due as to scheduled
payments (such as Base Rent) or within 30 days following the date on which it
was due for 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 fails within a reasonable time to perform
an obligation required to be performed by Lessor. For purposes of this
Paragraph, a reasonable time shall in no event be less than 30 days after
receipt by Lessor, and any Lender whose name and address shall have been
furnished Lessee in writing for such purpose of written notice specifying
wherein such obligation of Lessor has not been performed; provided, however,
that if the nature of Lessor’s obligation is such that more than 30 days are
reasonably required for its performance, then Lessor shall not be in breach if
performance is commenced within such 30 day period and thereafter diligently
pursued to completion.

 

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

 

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

 

15.                                 Brokerage
Fees.

 

15.1                           Additional
Commission.  In addition
to the payments owed pursuant to Paragraph 1.10 above, and unless Lessor and
the Brokers otherwise agree in writing, Lessor agrees that: (a) if Lessee
exercises any Option, (b) if Lessee or anyone affiliated with Lessee acquires
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 Obligation.  Any
buyer or transferee of Lessor’s interest in this Lease shall be deemed to have
assumed Lessor’s obligation hereunder. Brokers shall be third party
beneficiaries of the provisions of Paragraphs 1.10, 15, 22 and 31. If Lessor
fails to pay to Brokers any amounts due as and for brokerage fees pertaining to
the Lease when due, then such amounts shall accrue interest. In addition, if
Lessor fails to pay any amounts to Lessee’s Broker when due, Lessee’s Broker
may send written notice to Lessor and Lessee of such failure and if Lessor
fails to pay such amounts within 10 days after said notice, Lessee shall pay
said notice to its Broker and offset such amounts against Rent. In addition,
Lessee’s Broker shall be deemed to be a third party beneficiary of any
commission agreement entered into by and/or between Lessor and Lessor’s Broker
for the limited purpose of collecting any brokerage fee owed. 

 

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

 

16.                                 Estoppel
Certificates.

 

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

 

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

 

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

 

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

 

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

 

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

 

20.                                 Limitation
on Liability. The obligations of Lessor under this Lease shall not
constitute personal obligations of Lessor or its partners, members, directors,
officers or shareholders, and Lessee shall look to the Project, the Project’s
rental income, if any, the insurance proceeds and condemnation awards of 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.

 

23.                                 Notices.

 

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

 

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

 

24.                                 Waivers.

 

(a)                                  No waiver by
Lessor of the Default or Breach of any term, covenant or condition hereof by
Lessee, shall be deemed a waiver of any other term, covenant or condition
hereof, or of any subsequent Default or Breach by Lessee of the same or of any
other term, covenant or condition hereof. 
Lessor’s consent to, or approval of, any act shall not be deemed to
render unnecessary the obtaining of Lessor’s consent to, or approval of, any
subsequent or similar act by Lessee, or be construed as the basis of an
estoppel to enforce the provision or provisions of this Lease requiring such
consent.

 

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

 

(c)                                  THE PARTIES
AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS
RELATED  THERETO AND
HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT
SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)                                  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 one hundred and twenty five
percent (125%) 150% of the Base Rent applicable immediately preceding
the expiration or termination. Nothing contained herein shall be construed as
consent by Lessor to any holding over by Lessee.

 

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

 

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

 

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

 

	
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initiated
in the county in which the Premises are located.

 

30.                                 Subordination;
Attornment; Non-Disturbance.

 

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

 

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

 

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

 

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

 

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

 

32.                                 Lessor’s
Access; Showing Premises; Repairs. Lessor and Lessor’s agents
shall have the right to.enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times after reasonable prior notice (and
Lessee shall have the right to have its representatives accompany Lessor on any
such entry) 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 on Lessee’s use of the Premises. All such activities shall be
without abatement of rent or liability to Lessee.

 

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

 

34.                                 Signs.
 Lessor may place  on the Premises
ordinary “For Sale” signs at any time and ordinary “For Lease” signs
during the last 6 months of the term hereof.

 

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

 

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

 

37.                                 Guarantor.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

39.4                           Effect
of Default on Options.

 

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

 

(b)  The period of time
withinwhich 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.

 

	
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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, (ii) 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 or Project upon at
least 90 days prior written notice; provide and install, at Lessee’s
Lessor’s expense, Building standard 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,
whether by Lessor or third parties, shall in no Way affect this Lease or impose
any liability upon Lessor.

 

(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 days prior written notice of such
move, and the now space must contain improvements of comparable quality to
those contained with 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 (ii) 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 paid by one Party to
the other under the provisions hereof, the Party against whom the obligation to
pay the money is asserted shall have the right to make payment “under protest”
and such payment shall not be regarded as a voluntary payment and there shall
survive the right on the part of said Party to institute suit for recovery of
such sum. If it shall be adjudged that there was no legal obligation on the
part of said Party to pay such sum or any part thereof said Party shall be
entitled to recover such sum or so much thereof as it was not legally required
to pay. A Party who does not initiate suit for the recovery of sums paid “under
protest” within 6 months shall be deemed to have waived its right to protest
such payment.

 

43.                                 Authority;
Multiple Parties; Execution

 

(a)  If either Party hereto is a
corporation, trust, limited liability company, partnership, or similar entity,
each individual executing this Lease on behalf of such entity represents and
warrants that he or she is duly authorized to execute and deliver this Lease on
its behalf. Each Party shall, within 30 days after request, deliver to the
other Party satisfactory evidence of such authority.  Lessor represents that Lessor is the owner of
the Project, the execution and delivery of this Lease does not violate any
restrictive covenant or agreement contained in any other lease or contract
affecting Lessor or the Project, and Lessor is not actually aware of current
local improvement districts, special assessments or state or local impact fees
which are assessed against the Project and which are not shown of record.

 

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

 

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

 

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 and delivered 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 obligations
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.                                 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.

 

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

 

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

 

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

 

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

 

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

 

2.                                      RETAIN
APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES.
SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE
OF HAZARDOUS SUBSTANCES, THE ZONING 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: Los
  Angeles, California

  	
   

  	
  Executed at: Los Angeles, California

  
	
  On: 8/6/2009

  	
   

  	
  On: July      , 2009

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By
  LESSOR:

  	
   

  	
  By LESSEE:

  
	
   

  	
   

  	
   

  
	
  AYM Investment,
  LLC

  	
   

  	
  Wilshire State Bank

  
	
  a California
  limited liability company

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  By:

  	
  /s/ David Kim

  
	
  Name Printed:

  	
  [ILLEGIBLE]

  	
   

  	
  Name Printed:

  	
  David Kim

  
	
  Title:

  	
   

  	
  [ILLEGIBLE]

  	
   

  	
  Title:

  	
   

  	
  Sr.V.P

  

 

	
  /s/ [ILLEGIBLE]

  	
   

  	
  /s/ [ILLEGIBLE]

  
	
  /s/ [ILLEGIBLE]

  	
   

  	
  /s/ [ILLEGIBLE]

  
	
  INITIALS

  	
   

  	
  INITIALS

  

 

13

 

	
  Laurel-Crest
  Group, LLC,

  	
   

  	
   

  	
   

  
	
  a California
  limited liability company

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name Printed:

  	
   

  
	
  By:

  	
  [ILLEGIBLE]

  	
   

  	
  Title:

  	
   

  
	
  Name Printed:

  	
  [ILLEGIBLE]

  	
   

  	
  Address:

  	
  3200 Wilshire Boulevard, 7th Floor

  
	
  Title:

  	
   

  	
  Partner

  	
   

  	
   

  	
  Los Angeles, California 90010

  
	
  Synchroncity,
  LLC,

  	
   

  	
   

  	
   

  
	
  a California
  limited liability company

  	
   

  	
  Telephone:

  	
  (213) 427–2472

  
	
   

  	
   

  	
   

  	
  Facsimile:

  	
  (213) 639–8013

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  Federal ID No.

  	
   

  
	
  Address:

  	
  11726 San Vicente Boulevard, Suite 290

  	
   

  	
   

  
	
   

  	
  Los Angeles, California 90049

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Telephone:

  	
  (310) 207–1464

  	
   

  	
   

  
	
  Facsmile:

  	
  (310) 207–1466

  	
   

  	
   

  
	
  Federal ID NO.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LESSOR’S
  BROKER:

  	
   

  	
  LESSEE’S BROKER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attn:

  	
   

  	
   

  	
  Attn:

  	
   

  
	
  Address:

  	
   

  	
   

  	
  Address: 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone:

  	
  (    )

  	
   

  	
  Telephone:

  	
  (    )

  
	
  Facsimile:

  	
  (    )

  	
   

  	
  Facsimile:

  	
  (    )

  
										

 

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

 

©Copyright 1999-By AIR Commercial
Real Estate Association.

All rights reserved.

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

 

	
  /s/ [ILLEGIBLE]

  	
   

  	
  /s/ [ILLEGIBLE]

  
	
  /s/ [ILLEGIBLE]

  	
   

  	
  /s/ [ILLEGIBLE]

  
	
  INITIALS

  	
   

  	
  INITIALS

  

 

14

 

LEASE
ADDENDUM

 

This LEASE ADDENDUM (“Addendum”) is made to into that certain Standard
Multi-Tenant Office Lease-Gross dated as of July 31, 2009 (“Lease”) to
which this Addendum is attached and made a part thereof, by and between AYM
Investment, LLC, a California limited liability company (“AYM”), Laurel-Crest
Group, LLC, a California limited liability company (“LCG”), and Synchronicity,
LLC, a California limited liability company (“Synchronicity”) (collectively,
“Lessor”) and Wilshire State Bank, a California banking corporation (“Lessee”).

 

Lessee and Lessor hereby agree that notwithstanding anything contained
in the Lease to the contrary, the provisions set forth below will be deemed to
be a part of the Lease and shall supersede, to the extent appropriate, any
contrary provision in the Lease. All defined terms used in this Addendum, unless
specifically defined in this Addendum, shall have the same meaning as such
terms have in the Lease.

 

51.                                 Base Rent Increases. The monthly
Base Rent shall be increased to the following amounts during the following
periods of the Original Term of this Lease, which amount Lessee shall pay as
the Base Rent required under this Lease:

 

	
  Term of Original Lease

  	
   

  	
  Monthly Base Rent

  	
   

  
	
  July 1, 2009 - June 30, 2011

  	
   

  	
  $

  	
  15,400.00

  	
   

  
	
  July 1, 2011 - June 30, 2012

  	
   

  	
  $

  	
  15,862.00

  	
   

  
	
  July 1, 2012 - June 30, 2013

  	
   

  	
  $

  	
  16,337.86

  	
   

  
	
  July 1, 2013 - June 30, 2014

  	
   

  	
  $

  	
  16,827.99

  	
   

  
	
  July 1, 2014 - June 30, 2015

  	
   

  	
  $

  	
  17,332.83

  	
   

  
	
  July 1, 2015 - June 30, 2016

  	
   

  	
  $

  	
  17,852.82

  	
   

  
	
  July 1, 2016 - June 30, 2017

  	
   

  	
  $

  	
  18,388.40

  	
   

  
	
  July 1, 2017 - June 30, 2018

  	
   

  	
  $

  	
  18,940.05

  	
   

  
	
  July 1, 2018 - June 30, 2019

  	
   

  	
  $

  	
  19,508.26

  	
   

  

 

52.                                 Parking Spaces. The vehicle
parking spaces specified in Section 1.2(b) (“Parking Space(s)”) may
be used by only by Lessee, Lessee’s customers and employees during Lessee’s
regular and normal banking business hours of 8:00 a.m. to 8:00 p.m.,
Monday through Friday, and 8:00 a.m. to 2:00 p.m., Saturdays,
excluding legal bank holidays (“Banking Hours”). Subject to the terms,
covenants and conditions hereof, the Parking Spaces shall be located on the
third (3rd) floor of the
Building; provided, however, Lessor shall have the right to relocate the
Parking Spaces or replace them with other parking spaces in the Building, and
Lessor shall have the right to reconfigure, restripe and otherwise modify the
layout of the parking spaces in the Building, including, but not limited to,
those on the third (3rd) floor of the
Building.

 

53.                                 Operating Expense Increase. Notwithstanding
anything to the contrary in the Lease, Lessee shall have no obligation to pay
Lessee’s Share of Operating Expense Increase due under Section 4.2, and
Lessee’s Share of Operating Expense Increase shall be included in, and be
deemed a part of, the Base Rent payable under this Lease.

 

54.                                 Early Expiration Option. Provided that
Lessee is not in Breach or Default of any of Lessee’s obligations hereunder as
of the exercise of the Early Expiration Option or as of the Early Expiration
Date (as such terms are hereafter defined), Lessee shall have the option to
accelerate the Expiration Date of the Original Term of this Lease (“Early
Expiration Option”) upon the following terms and conditions:

 

54.1                           Lessee shall
provide Lessor with written, irrevocable and unconditional notice of Lessee’s
exercise of the Early Expiration Option in accordance with the requirement of
this Lease; Lessee shall have no right to exercise the Early Expiration Option
at any time prior to the expiration of the Eighty Fourth (84th) month of the Lease or any
time after the expiration of the Original Term of this Lease.

 

15

 

54.2                        Lessee’s notice
of exercise of the Early Expiration Option shall be accompanied by a cashier’s
check made payable to Lessor in the amount equal to five (5) times the
amount of the monthly Base Rent required to be paid by Lessee as of the Early
Expiration Date (“Early Expiration Consideration”). Lessee’s notice of exercise
of the Early Expiration Option shall be ineffective and of no force and effect
if Lessor does not receive such cashier’s check in the Early Expiration
Consideration amount together with Lessee’s notice of exercise of the Early
Expiration Option. If the Early Expiration Option is not timely and properly
exercised, then the Early Expiration Option shall terminate and be of no
further force or effect. Time is of the essence.

 

54.3                        Provided that
Lessor has timely received Lessee’s proper notice of the exercise of the Early
Expiration Option and the requisite Early Expiration Consideration, this Lease
shall expire as of the last day of the ninth (9th) month after the month during which the Early
Expiration Option was exercised by Lessee and Lessor received the Early
Expiration Consideration (“ Early Expiration Date”), as if such date were the
original Expiration Date set forth herein; provided, however, such early
expiration shall not in any way release, discharge or alter any of Lessee’s or
Lessor’s obligations, duties or liabilities which may accrue or have accrued up
to and including the Early Expiration Date, and until the Early Expiration Date,
Lessee and Lessor shall continue to perform all of their respective obligations
hereunder, including, but not limited to, Lessee’s payment to Lessor of all
amounts due and payable by Lessee hereunder.

 

54.4                     The Early Expiration Option
shall forever terminate and be of no force or effect if Lessee is in Breach
hereunder at any time, whether before or after Lessee’s exercise of the Early
Expiration Option. If such Breach occurs after Lessee’s exercise of the Early
Expiration Option, then such exercise of the Early Expiration Option shall not
be valid, and the Early Expiration Consideration, if any, paid by Lessee may,
at Lessor’s option, be returned to Lessee, retained as additional Security
Deposit, or applied toward payment of Lessee’s past, present or future rent
obligations hereunder.

 

54.5                     The Early Expiration Option
shall be considered to be an “Option,” as such term is defined in Paragraph 39
of the Lease, and shall be subject to all the terms and conditions set forth
therein.

 

54.6                     At all times after Lessee’s
exercise of the Early Expiration Option, Lessee shall make the Premises readily
and easily available to Lessor and/or its agents during normal business hours,
and upon reasonable notice, for the purpose of showing same to prospective
tenants. Lessee shall have the right to have its employees accompany Lessor and
its agents. Lessee recognizes that Lessor may make commitments for delivering
possession of the Premises to another lessee, lessees or purchaser, effective
immediately after the Early Expiration Date and that therefore Lessee shall have
no right to hold over without the prior express written consent of Lessor.

 

55.                              Post Tension Concrete Construction. Lessee hereby
acknowledges and agrees that the Building has been constructed of “post tension
concrete,” which is composed of, among other materials, high tension metal wire
and concrete elements, which if drilled, bored, cut, or otherwise penetrated,
may rupture and cause severe structural damage to the Building. Therefore,
Lessee shall not, without the prior written consent of Lessor, drill, bore, cut,
penetrate, mark, paint, drill into, or in any way alter, deface or affect any
part of the Premises or the Building.

 

56.                              AS
IS.  Lessee
agrees that, except as otherwise specifically provided in the Lease, Lessee is
leasing and accepting the Premises, the Building and the Project on an “AS IS,”
basis, subject to all recorded matters, laws, ordinances and governmental
regulations and orders.

 

57.                              Security Guard.

 

57.1                     Lessee hereby acknowledges
and agrees that Lessor shall have no obligation, liability or responsibility to
provide any security guard, service, improvements or device of any kind, nature
or description, and Lessee hereby assumes all risk and responsibility
therefore.

 

57.2                     Throughout the term of this
Lease, as the same may be extended, Lessee shall, at Lessee’s sole cost and
expense, provide at least one (1) uniformed and armed security guard to the
Premises, which guard shall be duly licensed, bonded and otherwise qualified
for guarding

 

2

 

banks
similar to Lessee’s bank, and be present at the Premises starting at least one
hour before Banking Hours until one hour after Banking Hours.

 

58.                              Exclusive Use.

 

58.1                      Subject to the
terms and conditions set forth herein, Lessor shall not directly lease space on
the first or the second floors of the Building, other than the Premises, to be used
by a Competing Business.

 

58.2                      “Competing
Business” shall mean a business which uses its premises in the Building
primarily for the Exclusive Use, excluding any business directly or indirectly
(as an assignee, sublessee or concessionaire) occupying premises under an
Existing Lease, or conducting check cashing, wire transfer, or similar
activities. “Existing Lease” shall mean a lease for a portion of the Building
which lease is in effect as of the date of this Lease, as such lease may be
renewed, extended or replaced. “Exclusive Use” shall mean a full service retail
bank.

 

58.3                        Lessor’s
obligations under this Section shall automatically forever terminate and
become null and void if the Premises cease to be used primarily for the
Exclusive Use, Lessee is in Breach, Lessee assigns this Lease, or Lessee
sublets all or any portion of the Premises. The Premises shall not be deemed or
considered to be used primarily for the Exclusive use unless at least seventy
five percent (75%) of the rentable area of the Premises is devoted to and
operated for the Exclusive Use, and the Exclusive Use is being continuously
conducted in the Premises.

 

59.                              Maintenance. Notwithstanding
anything to the contrary in the Lease, such as Section 7.1, Lessee shall,
at Lessee’s sole cost and expense, maintain, repair and replace in good order,
condition and repair the Premises and every part thereof, the HVAC system
serving the Premises, and any other utilities, apparatus or equipment serving
the Premises. If Lessee fails to comply with such obligation, Lessor may
perform the same on behalf of Lessee, and Lessee shall, as additional rent,
reimburse Lessor any costs and expenses incurred for performing such obligation
of Lessee.

 

60.                              Lessee’s Signage.  Lessee may, at
Lessee’s sole cost and expense, use the cans existing for the signs installed
for a previous bank occupant of the Premises (namely Mirae Bank), and Lessee
may install the name of Lessee in such sign cans, provided that Lessor has
approved the content of such signs and all other aspects thereof. Lessor agrees
not to unreasonably withhold Lessor’s approval of the content of the signs
provided that they are related to the Agreed Use. Lessee may, subject to
obtaining Lessor’s consent, install a reasonable number of additional signs on
the Building provided that each and every aspect of such signs has been
approved by Lessor, such signs comply with all Applicable Requirements, and
such additional signs will not reduce the overall available signage for the
Project under any Applicable Requirements or the overall available signs for
any other tenants or occupants of the Project under any Applicable Requirements
or otherwise. Lessee shall, at Lessee’s sole cost and expense, obtain all
permits for such signs and comply with all Applicable Requirements with respect
to such signs. Such signs shall be considered an Alteration and Lessee shall
comply with the provisions of this Lease applicable thereto as an Alteration,
such as Section 7.4.

 

61.                              Right of First Negotiation for Premises Condo.

 

61.1                      Lessor may elect to convert
the Building (“Condo Conversion”) into commercial condominium units, as a
result of which the Building may be divided into two or more condominium units
(“Condo Unit(s)”). The physical Premises, as described in Section 1.2(a),
may be encompassed by one or more Condo Units. The term “Premises Condo” shall
mean those Condo Units which comprise the entirety of the physical Premises, as
described in Section 1.2(a).

 

61.2                      If the Condo Conversion is
completed so that Lessor has the right to, in compliance with all Applicable
Requirements, sell the Condo Units to the public, and if Lessor elects to so
sell the Premises Condo independent and separate from any other property and not
in conjunction with any other property (such as any of the other Condo Units in
the Building or the Building as a whole), then Lessor shall notify Lessee of
the same (“Right of First Negotiation Notice”) and Lessee shall have the right
of first negotiation to purchase the Premises Condo (“Right of First
Negotiation”).

 

3

 

61.3                      Lessee shall
have no right to exercise the Right of First Negotiation with respect to only a
part of the Premises Condo, or less than all the Condo Units which comprise the
Premises Condo. Lessee’s Right of First Negotiation shall not apply or be
triggered if Lessor plans to or intends to the sell (i) the Building as a
whole, or (ii) the Premises Condo in conjunction with any other Condo
Units in the Building. For clarification purposes, Lessee’s Right of First
Negotiation shall only apply when Lessor intends to sell the Premises Condo by
itself, separate and apart from any other property and not as part of a
transaction that involves any other property, such as any other Condo Units or
if Lessor sells the Building as a whole.

 

61.4                      Lessee’s Right
of First Negotiation shall be a one-time right only. If Lessee does not elect
to exercise Lessee’s Right of First Negotiation within ten (10) business
days after the date of the Right of First Negotiation Notice, then Lessee’s
Right of First Negotiation shall forever terminate, and Lessor may, without
having to negotiate or further negotiate with Lessee, consummate a sale of the
Premises Condo on any terms and conditions desired by Lessor to any person or
party.

 

61.5                      If Lessee does
timely and properly exercise the Right of First Negotiation, then for a period
of thirty (30) days after Lessee has exercised the Right of First Negotiation
(“Negotiation Period”), the Parties shall attempt to agree upon the amount of
the purchase price of the Premises Condo and all the other terms and conditions
for the purchase and sale of the Premises Condo. If, for any reason whatsoever,
the Parties cannot or do not come to a mutually satisfactory written, signed
and biding agreement for the purchase and sale of the Premises Condo by the end
of the Negotiation Period, then neither Party shall have any liability to the
other Party for such failure to agree, Lessee’s Right of First Negotiation
shall forever terminate, and Lessor may, without having to negotiate or further
negotiate with Lessee, consummate a sale of the Premises Condo on any terms and
conditions desired by Lessor to any person or party.

 

61.6                      The Right of
First Negotiation shall be considered to be an “Option,” as such term is
defined in Paragraph 39 of the Lease, and shall be subject to all the terms and
conditions set forth therein.

 

62.                              Hazardous Materials. Lessor
represents and warrants that as of the Commencement Date of this Lease, (i) Lessor
has no actual knowledge that there are hazardous materials within the Premises,
Building and the Project in violation of any applicable environmental laws and
regulations, and (ii) Lessor has received no written notice from a
governmental agency that there are hazardous materials within the Premises,
Building and the Project in violation of any applicable environmental laws and
regulations.

 

63.                              Removal of Alterations.  Lessee shall
not be required to remove any Alterations, additions, trade fixtures or Utility
Installations placed upon the Premises by Lessee, unless as a condition to
Lessor’s consent for such Alterations, additions, trade fixtures or Utility
Installations, Lessor requires that Lessee remove such Alterations, additions,
trade fixtures or Utility Installations at the expiration or termination of the
Lease.

 

64.                              Transfer to Affiliate. Notwithstanding
anything in this Lease to the contrary, Lessee shall have the right, without
Lessor’s consent, to assign or sublease the Lease to an entity controlling,
under common control with, or controlled by Lessee, including an entity
resulting from a merger or consolidation by Lessee (an “Affiliate”), provided
that in the event of an assignment, the Affiliate also assumes in writing
Lessee’s obligations under this Lease.  Lessor
agrees that, notwithstanding anything in this Lease to the contrary, Lessee
may, in conjunction with an assignment of this Lease to an Affiliate of Lessee,
which assignment is done in accordance with terms and conditions of this Lease,
transfer the options to extend the term of this Lease granted to Lessee.

 

65.                              Transfer Premium Sharing. If Lessee shall
assign this Lease or sublet any portion of the Premises to anyone other than an
Affiliate of the original Lessee (“Transfer”), Lessee shall pay to Lessor as
additional rent, within five (5) business days after receipt by Lessee,
fifty percent (50%) of the Transfer Premium, as hereafter defined. The term
“Transfer Premium” shall mean all rent, additional rent, and any other consideration
(including, but not limited to, any consideration for key money, bonus rent,
good will, covenant not to compete, sale of property or services by Lessee)
payable by an assignee or sublessee (“Transferee”), either initially or over
the term of a Transfer, in excess of the rent payable by Lessee hereunder. If
part of the Transfer Premium is payable by Transferee other than in cash, the
Transfer Premium of the noncash consideration shall be in a form reasonably
satisfactory to Lessor. Lessee shall pay the Transfer

 

4

 

Premium on a monthly basis, together with its payment of Base Rent. On
Lessor’s request, Lessee shall furnish a complete statement, certified by an
independent certified public accountant or Lessee’s chief financial officer,
describing in detail the computation of any Transfer Premium that Lessee has
derived or will derive from a Transfer. Lessee shall allow Lessor to review and
audit Lessee’s books and records for the purpose of verifying Lessee’s
calculation of the Transfer Premium. If Lessor or Lessor’s independent
certified public accountant finds that the Transfer Premium for any Transfer
has been understated, Lessee shall, within thirty (30) days after demand, pay
the deficiency and Lessor’s costs of that audit. If Lessee has understated the
Transfer Premium by more than ten percent (10%), Lessor may, at its option,
declare Lessee in default and material and incurable breach hereunder,
notwithstanding any cure period specified herein.

 

66.                              Lessee’s Records.  Notwithstanding
anything to the contrary contained herein or in the Lease, Lessor shall not
have at any time during the term of this Lease the right to have access to or
take possession of any of Lessee’s business records or the records or the
personal property located on the Premises of any customer of Lessee or of any
third party. Furthermore, any rights and remedies of Lessor to enter upon and
assume control of the Premises and of any personal property thereof are subject
to the power of the Commissioner of the California Department of Financial
Institutions and other bank regulatory agencies.

 

67.                              Americans With Disabilities Act.  Lessor
represents and warrants that as of the Commencement Date of this Lease, (i) Lessor
has no actual knowledge that the Common Areas of the Building are in violation
of the Americans With Disabilities Act, and (ii) Lessor has received no
written unfulfilled notice from a governmental agency that the Common Areas of
the Building are in violation of the Americans With Disabilities Act.

 

68.                              Lessor’s Agent. Lessor may
designate one of the entities which comprise Lessor, a property manager or
another agent acting on behalf of such owners to interact with Lessee on behalf
of Lessor. Lessee agrees that Lessor shall have the right to, from time to
time, change such designation provided that Lessor provides written notice
thereof to Lessee.

 

69.                              Prior Lease.

 

69.1                     Lessee acknowledges that (i) the
Premises was leased to Mirae Bank (“Prior Tenant”) pursuant to that certain
lease dated February 1, 2006 with the Prior Tenant (“Prior Lease”), (ii) the
term of the Prior Lease has not yet expired, (iii) as of June 26,
2009, the Prior Tenant has been in receivership, with the FDIC as the receiver,
and (iv) Lessee has been in possession of the Premises and is currently is
in possession of the Premises pursuant to an agreement reached between Lessee
and the FDIC, as receiver for the Prior Tenant.

 

69.2                     This Lease is subject to the
termination of the Prior Lease (“Prior Lease Contingency”) by no later than one
hundred and twenty (120) days after the date of the mutual execution and
delivery of this Lease, as the same may be extended by mutual agreement of the
Parties (“Contingency Expiration Date”).

 

69.3                     Lessee and Lessor shall each
use their commercially reasonable best efforts to cooperatively work with each
other and with the FDIC to secure a termination of the Prior Lease by the
Contingency Expiration Date, and the Parties shall attempt to preserve and
reserve Lessor’s rights, if any, against the Prior Tenant for its breach of the
Prior Lease. The Prior Lease Contingency shall be deemed satisfied if the
rights of the Prior Tenant under the Prior Lease are terminated, surrendered,
canceled or otherwise extinguished so that Lessor may enter into this Lease
with Lessee, including, but not limited to, a written agreement between Lessor
and FDIC, or any other manner of accomplishing the same.

 

69.4                     If, despite said
commercially reasonable best efforts by the Parties, the Prior Lease
Contingency is not satisfied by the Contingency Expiration Date so that the
Premises can be leased to Lessee under this Lease for the term of this Lease,
then within thirty (30) days after the Contingency Expiration Date, either
Party shall have the right to terminate this Lease upon thirty (30) days notice
to the other Party, in which event this Lease Shall terminate, Lessor shall not
be subject to any liability, obligation or damages, Lessee shall pay rent and
other charges due hereunder for the period that Lessee was or is in possession
of the Premises provided, however,

 

5

 

if
neither Party exercises such termination right within such 30-day period, then
it shall be conclusively deemed that the Prior Lease Contingency was satisfied
and/or waived, and neither Party shall have the right to terminate this Lease
under this section any time after such 30-day period has expired.

 

	
  “Lessor”

  	
   

  	
  “Lessee”

  
	
   

  	
   

  	
   

  
	
  AYM
  Investment, LLC, a California

  	
   

  	
  Wilshire
  State Bank, a California banking

  
	
  limited
  liability company

  	
   

  	
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  [ILLEGIBLE]

  	
   

  	
  By:

  	
  /s/
  [ILLEGIBLE]

  
	
  Name
  Printed:

  	
  [ILLEGIBLE]

  	
   

  	
  Name
  Printed:

  	
  [ILLEGIBLE]

  
	
  Title:

  	
  [ILLEGIBLE]

  	
   

  	
  Title:

  	
  Sr.
  V.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Laurel-Crest
  Group, LLC, a California

  	
   

  	
  By:

  	
   

  
	
  limited
  liability company

  	
   

  	
  Name
  Printed:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  [ILLEGIBLE]

  	
   

  	
   

  	
   

  
	
  Name
  Printed:

  	
  [ILLEGIBLE]

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Partner

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Synchronicity
  LLC, a California limited

  	
   

  	
   

  	
   

  
	
  liability
  company

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  [ILLEGIBLE]

  	
   

  	
   

  	
   

  
	
  Name
  Printed:

  	
  [ILLEGIBLE]

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Manager

  	
   

  	
   

  	
   

  

 

6

 

EXHIBIT “A”

 

SITE PLAN OF PREMISES

 

7

 

EXHIBIT A

SECOND FLOOR

(For reference purposes only-not to scale)

 

 

 

 

OPTION(S) TO
EXTEND

STANDARD
LEASE ADDENDUM

 

	
  Dated

  	
   

  	
  July  31, 2009

  
	
   

  	
   

  	
   

  
	
  By and Between (Lessor)

  	
  AYM
  Investment, LLC, Laurel-Crest Group, LLC and Synchronicity, LLC

  
	
  By and Between (Lessee)

  	
  Wilshire State Bank

  
	
   

  	
   

  
	
  Address of Premises:

  	
  Suites
  207-211, 401 East 11th
  Street, 

  Los Angeles, California
  90015

  
					

 

Paragraph  50

 

A.     OPTION(S) TO EXTEND:

Lessor hereby grants to Lessee the option to
extend the term of this Lease for two (2) additional sixty (60) month
period(s) each, with each option period commencing when the prior option
term expires upon each and all of the following terms and conditions:

 

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

 

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

 

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

 

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

 

(v)                                   The monthly rent
for each month of the option period shall be calculated as follows, using the
method(s) indicated below:

(Check
Method(s) to be Used and Fill in Appropriately)

 

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

 

a.     On (Fill in COLA
Dates):

 

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

 

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

 

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

 

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

 

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

 

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

 

a.   On
(Fill in MRV Adjustment  Date(s)) the
first (1st) day of each option period the Base Rent shall be adjusted to ninety
five percent (95%) of the “Market Rental Value” of the property as follows:

 

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

 

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

 

	
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  FORM OE-3-8/00E  

  

 

1

 

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

 

(i) Within 15 days
thereafter, Lessor and Lessee shall each select an o  appraiser or o broker (“Consultant” - check one) of their choice
to act as an arbitrator.   The two
arbitrators so appointed shall immediately select a third mutually acceptable
Consultant to act as a third arbitrator and if such two arbitrators do not
within thirty (30) days of their appointment agree upon and appoint such a
third mutually acceptable Consultant, then such third Consultant shall, upon
the application by either Lessee or Lessor, be appointed by the then Presiding
Judge of the Los Angeles Superior Court, or, if he or she refuses to so act, by
any judge having jurisdiction over the parties.

 

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

 

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

 

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

 

2) Notwithstanding the foregoing,
the new MRV shall not be less than the one hundred and ten percent (110%) of
the monthly Base rent payable for the month immediately preceding the rent
adjustment. For purposes of this Lease, the term “Market Rental Value” or “MRV”
means the annual amount per Rentable Square Foot, projected during the relevant
option period, that a ready, willing, able, comparable, non-equity tenant
(excluding sublease and assignment transactions, excluding space which was
subject to a right of first refusal, expansion option or other encumbrances)
would pay, and a ready, willing, able, comparable landlord of a comparable
quality building located in the Los Angeles, California area would accept, at
arm’s length, for space of comparable size, quality and floor level as the
Premises, assuming that the Premises would be used for the highest and best use
thereof, and taking into account the age, quality and layout of the
improvements existing in the Premises, and taking into account items that
professional real estate brokers or professional real estate appraisers
customarily consider, including, but not limited to, rental rates, operating
expenses, taxes, space availability, tenant size, tenant credit, the extent of
services to be provided, if any, then being charged or granted by Landlord or
the lessors of such similar buildings; provided, however, no consideration
shall be given to (and the Market Rental Value shall not be reduced due to the
fact that) Lessor is paying (or pays) no or a lesser brokerage commission in
connection with the extension option, tenant improvement allowances then being
provided by Landlord or lessors of such other similar building, any free rent
that may be provided by Landlord or lessors of other similar building, and any
other similar lease concessions being made by Landlord or the lessors of such
similar buildings. The Market Rental Value shall also include increases in the
Base Rent during the term of the extension option, which increases shall be
consistent with the then Market Rental Value, such as the frequency, amount,
method and duration of such increases.

 

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

 

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

 

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

 

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

 

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

 

	
  On (Fill in FRA Adjustment Date(s)):

  	
  The New Base Rent shall be:

  

 

 

B.           NOTICE:

 

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

 

C.           BROKER’S
FEE:

 

The Brokers shall not be paid a Brokerage Fee for each adjustment
specified above in accordance with paragraph 15 of the Lease.

 

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

 

	
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2

 

 

RULES AND
REGULATIONS FOR

STANDARD
OFFICE LEASE

 

Dated: July 31, 2009

 

By and Between AYM
Investment, LLC, etc., and Wilshire State Bank

 

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
areas 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 5 : 00 P.M. and 8 : 00 A.M. of the following day.  If Lessee uses the Premises during such
periods, Lessee shall be responsible for securely locking any doors it may have
opened for entry.

 

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 or used 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.

 

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.

 

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 location(s), and to reasonably allocate them
between compact and standard size spaces, as long as the same complies with
applicable laws, 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 area.

 

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.

 

NOTICE:
These forms are often modified to meet changing requirements of law and
industry needs. Always write or call to make sure you are utilizing the most
current form: AIR Commercial Real Estate Association, 8Q0 W 6th Street, Suite 800,
Los Angeles, CA 90017. Telephone No. (213) 687-8777. Fax No.: (213)
687-8616.

 

	
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  © - AIR COMMERCIAL REAL ESTATE ASSOCIATION

  	
   

  	
  FORM OE-3-8/00E  

  

 

1

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