Document:

Exhibit 10.7

 

 

MEMORANDUM OF UNDERSTANDING

 

Polar Power, Inc., a California corporation,
located at 22520 Avalon Blvd, Carson, California, USA (“Company”) does hereby promise to pay to Richard J. Ulinski
(“Inventor”) at 315 North Canyon Blvd, Monrovia, CA 91016, a total sum of SIX HUNDRED THOUSAND DOLLARS ($600,000) to
fully acquire all rights to all control systems and associated products that Mr. Ulinski developed between December 2004 to December
30, 2014 mentioned in Appendix A.

 

Subject to the terms and conditions set
forth in this Agreement, Inventor agrees to transfer, assign, and convey to Company, and Company agrees to acquire from Inventor,
the Confidential Information, constituting all his rights, titles, and interests in the Confidential Information. Inventor acknowledges
and agrees that all ownership interests in and rights to the Confidential Information as listed in Appendix A shall be the sole
and exclusive property of Company. The Confidential Information also includes all documentation including all schematics, production
files, Bills of materials, descriptions, specifications, manuals, and other materials pertaining to it.

 

This agreement made on the 30th
day of December 2014 will supersede and/or nullify the INTELLECTUAL PROPERTY PURCHASE AGREEMENT (“Agreement”) made
and entered into as of the 7th day of July 2012, by and between RICHARD J. ULINSKI, trustee of the Richard J and Kathleen
Ulinski trust and Polar Power Inc.

 

The sum that was paid so far by the Company to the Inventor
is as follows

 

	Instrument	 	Paid out date	 	Amount	 
	Royalty paid so far	 	01/01/2012 - 12/13/2014	 	$	243,784.80	 
	Royalty lump-sum payment	 	12/30/2014	 	$	45,000.00	 
	 	 	Total paid so far	 	$	288,784.80	 

 

Balance amount of THREE HUNDRED AND ELEVEN
THOUSAND TWO HUNDRED FIFTEEN DOLLARS AND 20 CENTS ($311,215.20) is paid in monthly installments of FIFTEEN THOUSAND DOLLARS ($15,000)
for TWENTY (20) months and a final payment of ELEVEN THOUSAND TWO HUNDRED FIFTEEN DOLLARS AND 20 CENTS ($11,215.20) in the twenty
first month.

 

     

     

    

 

 

Payments will be made in lawful money of
the United States, commencing January 1, 2015 and continuing on the first day of each calendar month thereafter until all sums
hereunder has been fully paid.

 

Inventor agrees to support all existing
and new projects for the Company and would devote the time and effort necessary to support such projects. Company will cover any
reasonable expenses that Inventor incurs during the development of new projects.

 

Upon signing this agreement, Inventor agrees
that Company owns the sole and exclusive right, title and interest in and to the Confidential Information, including any copyright,
trademark, and trade secret rights that may exist.

 

Inventor shall transfer and convey to Company
good and marketable title to the Confidential Information, free and clear of any judgments, liens, security interests and pledges.

 

Inventor agrees that, for a period of five
(5) years after the date of this Agreement, he will not sell, license, develop for hire, or in any way (either directly or through
any other party) produce control systems and devices, including circuit board layout and related electron c engineering similar
to or designed to accomplish the same functions as the Confidential Information sold to Company under this Agreement.

 

Neither this Agreement nor any term hereof
may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective
except by an instrument in writing signed by “Company” and “Inventor”.

 

In the case of the Company going public,
or a change in the ownership of the Company due to new investors, this agreement will remain in force.

 

It is expressly understood and agreed that
Company shall not be liable for, nor is Company assuming in any manner, any of the obligations or liabilities of Inventor of any
kind or nature, prior to the date of this Agreement.

 

     

     

    

 

 

IN WITNESS WHEREOF, “Company”
has executed this agreement as of the date and year written below.

 

	“Company”	 
	 	 
	POLAR POWER, INC.,	 
	 	 
	a California corporation	 
	 	 
	By:	/s/ Arthur D. Sams	 
	Arthur D. Sams	 
	 	 
	President	 
	 	 
	“Inventor”	 
	 	 
	By:	/s/ Richard J. Ulinski	 
	 	 
	Richard J. Ulinski	 

 

     

     

    

 

 

Appendix A

 

Products developed by Richard Ulinski for
Polar Power, Inc from December 2004 to December 30, 2014:

 

	 	1.	200-0100 Power Protection Module. Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	2.	200-0101 Power Supply for Power Protection Module. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	3.	200-0150 Load Bank Controller. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	4.	200-0160 DCGPU AC output filter. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	5.	200-0180 LM Aero Blimp Power Monitor. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufactur ng production files.
	 	6.	200-0210 DCGPU DC output filter. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	7.	200-0240 Multi Purpose Display. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	8.	200-0250 Generator Controller Module. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	9.	200-0280 5 Volt Speed Control Circuit.. Circuit design, Schematic, PCB layout,
	 	10.	200-0290 Engine Interface Module. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing producton files.
	 	11.	200-0320 CAN Buss display module. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	12.	200-0330 LEM Current sensor Module. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	13.	200-0340 High Voltage Adaptor. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	14.	200-0360 Current Limiting Regulator. . Circuit design, Schematic, PCB layout.
	 	15.	200-0380 Network Interface Module version 1. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	16.	200-0400 Over Voltage Protection PCB. . Circuit design, Schematic, PCB layout,
	 	17.	200-0450 300 Volt to 12 Volt Converter. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.

 

     

     

    

 

 

	 	18.	200-0510 Network Interface (Ethernet module). . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	19.	200-0520 Remote Sensor Unit. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	20.	200-0550 CAN Bridge Assembly. . Circuit design, Schematic, PCB ,ayout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	21.	200-0570 Battery Monitor. . Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	22.	200-0580 Remote Fuel Monitor.. Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	23.	200-0630 32 Relay Alarm Module.. Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	24.	200-0640 8 Relay Alarm Module.. Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	25.	200-0650 Relay Daughter Board.. Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	26.	200-0660 1820 Temperature Sensor.. Circuit design, Schematic, PCB layout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.
	 	27.	200-0670 Fuel Level Test Circuit.. Circuit design, Schematic, PCB ayout, Fabrication drawings, Assembly drawings, and Printed Circuit Board manufacturing production files.Exhibit 10.8

 

 

 

AIR COMMERCIAL REAL ESTATE ASSOCIATION

STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT 

LEASE — GROSS

 

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

 

1.          Basic
Provisions (“Basic Provisions”).

 

1.1          Parties:
This Lease (“Lease”), dated for reference purposes only November 7, 2014, is made by and between Two Bros L. P. (“Lessor”)
and Polar Power, Inc., a California corporation (“Lessee”), (collectively the “Parties,” or individually
a “Party”).

 

1.2          Premises:
That certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, and
commonly known as 249 E. Gardena Boulevard, Carson located in the County of Los Angeles, State of California and generally described
as (describe briefly the nature of the property and, if applicable, the “Project”, if the property is located within
a Project) an approximate 40,066 square foot industrial building situated on approximately 78,444 square feet of land (“Premises”).
(See also Paragraph 2)

 

1.3          Term:
four (4) years and two (2) months (“Original Term”) commencing January 1, 2015 (“Commencement Date”)
and ending February 28, 2019 (“Expiration Date”). (See also Paragraph 3)

 

1.4          Early
Possession: If the Premises are available Lessee may have non-exclusive possession of the Premises commencing (“Early
Possession Date”). (See also Paragraphs 3.2 and 3.3)

 

1.5          Base
Rent: $29, 648.00 per month (“Base Rent”), payable on the first day of each month commencing February 1, 2015 (See
also Paragraph 4)

 

☐ If (his box is checked, there
are provisions in this Lease for the Base Rent to be adjusted. See Paragraph 51

 

1.6          Base
Rent and Other Monies Paid Upon Execution:

 

(a)          Base
Rent: $29,648 . 00 for the period February 1 - 28, 2015

 

(b)          Security
Deposit: $88,944.00 (“Security Deposit”). (See also Paragraph 5 and 54)

 

(c)          Association
Fees: $N/A for the period

 

(d)          Other:
$N/A for

 

(e)          Total
Due Upon Execution of this Lease: $118,592.00

 

1.7          Agreed
Use: light manufacturing, assembly of power generation systems and related uses (See also Paragraph 6)

 

1.8          Insuring
Party: Lessor is the “Insuring Party”. The annual “Base Premium” is $4, 700. 00 (See also Paragraph
B)

 

1.9          Real
Estate Brokers: (See also Paragraph 15 and 25)

 

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

 

 ̈
Daum Commercial Real Estate Svcs/Brad Levin & Larry Iles represents Lessor exclusively (“Lessor’s Broker”);

 

 ̈
Lee & Associates/Craig Poropat represents Lessee exclusively (“Lessee’s Broker’); or represents both
Lessor and Lessee (“Dual Agency”).

 

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

 

1.10         Guarantor.
The obligations of the Lessee under this Lease are to be guaranteed by _____________________________________________________________
(“Guarantor”). (See also Paragraph 37)

 

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

 

		 ̈	an Addendum consisting of Paragraphs 51 through 56

 

		 ̈	a plot plan depicting the Premises;

 

		 ̈	a current set of the Rules and Regulations;

 

		 ̈	a Work Letter;

 

		 ̈	a energy disclosure addendum is attached;

 

	 ̈	other (specify):	 
	 	 
	 	 

 

2.           Premises.

 

2.1          Letting.
Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, and upon all
of the terms, covenants and conditions set forth in this Lease. While the approximate square footage of the Premises may have been
used in the marketing of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied to square footage and
is not subject to adjustment should the actual size be determined to be different. Note: Lessee is advised to verify the actual
size prior to executing this Lease.

 

2.2          Condition.
Lessor shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession
Date, whichever first occurs (“Start Date”), and, so long as the required service contracts described in Paragraph
7.1(b) below are obtained by Lessee and in effect within thirty days following the Start Date, warrants that the existing electrical,
plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems (“HVAC”), loading doors,
sump pumps, if any, and all other such elements in the Premises, other than those constructed by Lessee, shall be in good operating
condition on said date and that the surface and structural elements of the roof, bearing walls and foundation of any buildings
on the Premises (the “Building”) shall be free of material defects, and that the Unit does not contain hazardous
levels of any mold or fungi defined as toxic under applicable state or federal law. If a non-compliance with said warranty exists
as of the Start Date, or if one of such systems or elements should malfunction or fail within the appropriate warranty period,
Lessor shall, as Lessor’s sole obligation with respect to such matter, except as otherwise provided in this Lease, promptly
after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, malfunction
or failure, rectify same at Lessor’s expense. The warranty periods shall be as follows: (i) 6 months as to the HVAC systems,
and (ii) 30 days as to the remaining systems and other elements of the Building. If Lessee does not give Lessor the required notice
within the appropriate warranty period, correction of any such non-compliance, malfunction or failure shall be the obligation of
Lessee at Lessee’s sole cost and expense, except for the roof, foundations, and bearing walls which are handled as provided
in paragraph 7.

 

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

 

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

 

(b)          If
such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated
seismic modifications), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month
during the remainder of the term of this Lease or any extension thereof, on the date that on which the Base Rent is due, an amount
equal to 1/144th of the portion of such costs reasonably attributable to the Premises. Lessee shall pay Interest on the balance
but may prepay its obligation at any time. If, however, such Capital Expenditure is required during the last 2 years of this Lease
or if Lessor reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall have the option
to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after
receipt of Lessor’s termination notice that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate,
and fails to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest, from
Rent until Lessor’s share of such costs have been fully paid. If Lessee is unable to finance Lessor’s share, or if
the balance of the Rent due and payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset
basis, Lessee shall have the right to terminate this Lease upon 30 days written notice to Lessor.

 

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

 

2.4          Acknowledgements.
Lessee acknowledges that: (a) it has been given an opportunity to inspect and measure the Premises, (b) it has been advised
by Lessor and/or Brokers to satisfy itself with respect to the size and condition of the Premises (including but not limited to
the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and
the Americans with Disabilities Act), and their suitability for Lessee’s intended use, (c) 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, (d) it is not relying on any representation as to the size of the Premises made by Brokers or Lessor, (e) the
square footage of the Premises was not material to Lessee’s decision to lease the Premises and pay the Rent stated herein,
and ft) neither Lessor, Lessors agents, nor Brokers have made any oral or written representations or warranties with respect to
said matters other than as set forth in this Lease. In addition, Lessor acknowledges that: (i) Brokers have made no representations,
promises or warranties concerning Lessee’s ability to honor the Lease or suitability to occupy the Premises, and (ii) it
is Lessor’s sole responsibility to investigate the financial capability and/or suitability of all proposed tenants.

 

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

 

3.           Term.

 

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

 

3.2          Early
Possession. My provision herein granting Lessee Early Possession of the Premises is subject to and conditioned upon the Premises
being available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a non-exclusive
right to occupy the Premises. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation
to pay Base Rent shall be abated for the period of such Early Possession. All other terms of this Lease (including but not limited
to the obligations to pay Real Property Taxes and insurance premiums and to maintain the Premises) shall be in effect during such
period. Any such Early Possession shall not affect the Expiration Date.

 

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

 

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

 

4.           Rent.

 

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

 

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

 

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

 

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

 

6.           Use.

 

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

 

6.2          Hazardous
Substances.

 

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

 

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

 

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

 

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

 

(e)          Lessor
Indemnification. Except as otherwise provided in paragraph 8.7, Lessor and its successors and assigns shall indemnify,
defend, reimburse and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including
the cost of remediation, which result from Hazardous Substances which existed on the Premises prior to Lessee’s occupancy
or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees. Lessor’s obligations,
as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal,
remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.

 

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

 

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

 

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

 

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

 

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

 

7.1          Lessee’s
Obligations.

 

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

 

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

 

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

 

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

 

7.2          Lessor’s
Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation),
it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises,
or the equipment therein, all of which obligations are intended to be that of the Lessee, except for the surface and structural
elements of the roof, foundations and bearing walls, the repair of which shall be the responsibility of Lessor upon receipt of
written notice that such a repair is necessary. It is the intention of the Parties that the terms of this Lease govern the respective
obligations of the Parties as to maintenance and repair of the Premises, and they expressly waive the benefit of any statute now
or hereafter in effect to the extent it is inconsistent with the terms of this Lease.

 

7.3          Utility
Installations; Trade Fixtures; Alterations.

 

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

 

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(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 Alterations or Utility Installations to the interior of the Premises (excluding the roof)
without such consent but upon notice to Lessor, as long as they are not visible from the outside, do not involve puncturing, relocating
or removing the roof or any existing walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, and the
cumulative cost thereof during this Lease as extended does not exceed a sum equal to 3 month’s Base Rent in the aggregate
or a sum equal to one month’s Base Rent in any one year. Notwithstanding the foregoing, Lessee shall not make or permit any
roof penetrations and/or install anything on the roof without the prior written approval of Lessor. Lessor may, as a precondition
to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility
Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written
form with detailed plans. Consent shall be deemed conditioned upon Lessee’s: (i) acquiring all applicable governmental permits,
(ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and
(iii) compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner. Any
Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials. Lessee shall
promptly upon completion furnish Lessor with as-built plans and specifications. For work which costs an amount in excess of one
month’s Base Rent, Lessor may condition its consent upon Lessee providing a lien and completion bond in an amount equal to
150% of the estimated cost of such Alteration or Utility Installation and/or upon Lessee’s posting an additional Security
Deposit with Lessor.

 

(c)          Liens;
Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for
Lessee at or for use on the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against
the Premises or any interest therein. Lessee shall give Lessor not less than 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 attorneys’ fees and costs.

 

7.4          Ownership;
Removal; Surrender; and Restoration.

 

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

 

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

 

(c)          Surrender;
Restoration. Lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with all of the improvements,
parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary
wear and tear excepted. “Ordinary wear and tear” shall not include any damage or deterioration that would have been
prevented by good maintenance practice. Notwithstanding the foregoing, if this Lease 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 remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third
party (except Hazardous Substances which were deposited via underground migration from areas outside of the Premises) to the level
specified in Applicable Requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. Any personal
property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been abandoned
by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions
of Paragraph 26 below.

 

8.           Insurance;
Indemnity.

 

8.1          Payment
of Premium Increases.

 

(a)          Lessee
shall pay to Lessor any insurance cost increase (“Insurance Cost Increase”) occurring during the term of this
Lease. Insurance Cost Increase is defined as any increase in the actual cost of the insurance required under Paragraph 8.2(b),
8.3(a) and 8.3(b) (“Required Insurance”), over and above the Base Premium as hereinafter defined calculated
on an annual basis. Insurance Cost Increase shall include but not be limited to increases resulting from the nature of Lessee’s
occupancy, any act or omission of Lessee, requirements of the holder of mortgage or deed of trust covering the Premises, increased
valuation of the Premises and/or a premium rate increase. The parties are encouraged to fill in the Base Premium in paragraph 1.8
with a reasonable premium for the Required Insurance based on the Agreed Use of the Premises. If the parties fail to insert a dollar
amount in Paragraph 1.8, then the Base Premium shall be the lowest annual premium reasonably obtainable for the Required Insurance
as of the commencement of the Original Term for the Agreed Use of the Premises. In no event, however, shall Lessee be responsible
for any portion of the increase in the premium cost attributable to liability insurance carried by Lessor under Paragraph 8.2(b)
in excess of $2,000,000 per occurrence.

 

(b)          Lessee
shall pay any such Insurance Cost Increase to Lessor within 30 days after receipt by Lessee of a copy of the premium statement
or other reasonable evidence of the amount due. If the insurance policies maintained hereunder cover other property besides the
Premises, Lessor shall also deliver to Lessee a statement of the amount of such Insurance Cost Increase attributable only to the
Premises showing in reasonable detail the manner in which such amount was computed. Premiums for policy periods commencing prior
to, or extending beyond the term of this Lease, shall be prorated to correspond to the term of this Lease.

 

8.2          Liability
Insurance.

 

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

 

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

 

8.3          Property
Insurance - Building, Improvements and Rental Value.

 

(a)          Building
and Improvements. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor, with loss payable
to Lessor, any ground-lessor, and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be
equal to the full insurable replacement cost of the Premises, as the same shall exist from time to time, or the amount required
by any Lender, but in no event more than the commercially reasonable and available insurable value thereof. Lessee Owned Alterations
and Utility Installations, Trade Fixtures, and Lessee’s personal property shall be insured by Lessee not by Lessor. If the
coverage is available and commercially appropriate, such policy or policies shall insure against all risks of direct physical loss
or damage (except the perils of flood and/or earthquake unless required by a Lender or included in the Base Premium), 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 $5,000 per occurrence, and Lessee shall be liable for such deductible amount in
the event of an Insured Loss.

 

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

 

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

 

8.4          Lessee’s
Property; Business Interruption Insurance; Worker’s Compensation 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.

 

(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)          Worker’s
Compensation Insurance. Lessee shall obtain and maintain Worker’s Compensation Insurance in such amount as may be required
by Applicable Requirements. Such policy shall include a Waiver of Subrogation Endorsement. Lessee shall provide Lessor with a copy
of such endorsement along with the certificate of insurance or copy of the policy required by paragraph 8.5.

 

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

 

8.5          Insurance
Policies. Insurance required herein shall be by companies maintaining during the policy term a “General Policyholders
Rating” of at least A-, VII, 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
with copies of the required endorsements evidencing the existence and amounts of the required insurance. No such policy shall be
cancelable or subject to modification except after 30 days prior written notice to Lessor. Lessee shall, at least 10 days prior
to the expiration of such policies, furnish Lessor with evidence of renewals or “insurance binders” evidencing renewal
thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor
upon demand. Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever
is less. If either Party shall fail to procure and maintain the insurance required to be carried by it, the other Party may, but
shall not be required to, procure and maintain the same.

 

8.6          Waiver
of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each

hereby release and relieve the other, and waive their entire right to recover damages against the other, for loss of or damage
to its property arising out of or incident to the perils required to be insured against herein. The effect of such releases and
waivers is not limited by the amount of insurance carried or required, or by any deductibles applicable hereto. The Parties agree
to have their respective property damage insurance carriers waive any right to subrogation that such companies may have against
Lessor or Lessee, as the case may be, so long as the insurance is not invalidated thereby.

 

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

 

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

 

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

 

9.           Damage
or Destruction.

 

9.1          Definitions.

 

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

 

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

 

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

 

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(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, in, on, or under the Premises which requires restoration.

 

9.2          Partial
Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then

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

 

9.3          Partial
Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss

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

 

9.4          Total
Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction

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

 

9.5          Damage
Near End of Term. If at any time during the last 6 months of this Lease there is damage for

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

 

9.6          Abatement
of Rent; Lessee’s Remedies.

 

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

 

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

 

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

 

10.          Real
Property Taxes.

 

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

 

10.2         

 

(a)          Payment
of Taxes. Lessor shall pay the Real Property Taxes applicable to the Premises provided, however, that Lessee shall pay to Lessor
the amount, if any, by which Real Property Taxes applicable to the Premises increase over the fiscal tax year during which the
Commencement Date Occurs (“Tax Increase”). Payment of any such Tax Increase shall be made by Lessee to Lessor within
30 days after receipt of Lessor’s written statement setting forth the amount due and computation thereof. If any such taxes
shall cover any period of time prior to or after the expiration or termination of this Lease, Lessee’s share of such taxes
shall be prorated to cover only that portion of the tax bill applicable to the period that this Lease is in effect. In the event
lessee incurs a late charge on any Rent payment, Lessor may estimate the current Real Property Taxes, and require that the Tax
Increase be paid in advance to Lessor by Lessee monthly in advance with the payment of the Base Rent. Such monthly payment shall
be an amount equal to the amount of the estimated installment of the Tax Increase divided by the number of months remaining before
the month in which said installment becomes delinquent. When the actual amount of the applicable Tax Increase is known, the amount
of such equal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable Tax Increase.
If the amount collected by Lessor is insufficient to pay the Tax Increase when due, Lessee shall pay Lessor, upon demand, such
additional sums as are necessary to pay such obligations. Advance payments may be intermingled with other moneys of Lessor and
shall not bear interest. In the event of a Breach by Lessee in the performance of its obligations under this Lease, then any such
advance payments may be treated by Lessor as an additional Security Deposit.

 

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(b)          Additional
Improvements. Notwithstanding anything to the contrary in this Paragraph 10.2, Lessee shall pay to Lessor upon demand therefor
the entirety of any increase in Real Property Taxes assessed by reason of Alterations 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.

 

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

 

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

 

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

 

12.          Assignment
and Subletting.

 

12.1         Lessor’s
Consent Required.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12.2         Terms
and Conditions Applicable to Assignment and Subletting.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13.          Default;
Breach; Remedies.

 

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

 

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

 

(b)          The
failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor
or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this
Lease which endangers or threatens life or property, where such failure continues for a period of 3 business days following written
notice to Lessee. THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY
OF LESSOR’S RIGHTS, INCLUDING LESSOR’S RIGHT TO RECOVER POSSESSION OF THE PREMISES.

 

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

 

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

 

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

 

(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 (e) is contrary to any
applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions.

 

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

 

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

 

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

 

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

 

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(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 shall bear interest from
the 31st day after it was due. The interest (“Interest”) charged shall be computed at the rate of 10% per annum
but shall not exceed the maximum rate allowed by law. Interest is payable in addition to the potential late charge provided for
in Paragraph 13.4.

 

13.6         Breach
by Lessor.

 

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

 

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

 

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

 

15.         Brokerage
Fees.

 

15.1         Additional
Commission. In addition to the payments owed pursuant to Paragraph 1.9 above, and unless Lessor and the Brokers otherwise agree
in writing, Lessor agrees that: (a) if Lessee exercises any Option, (b) if Lessee or anyone affiliated with Lessee acquires any
rights to the Premises or other premises owned by Lessor and located within the same Project, if any, within which the Premises
is located, (c) if Lessee remains in possession of the Premises, with the consent of Lessor, after the expiration of this Lease,
or (d) if Base Rent is increased, whether by agreement or operation of an escalation clause herein, then, Lessor shall pay Brokers
a fee in accordance with the fee schedule of the Brokers in effect at the time the Lease was executed.

 

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

 

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

 

16.         Estoppel
Certificates.

 

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

 

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(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. In addition, Lessee acknowledges that any failure on its part to provide such an Estoppel
Certificate 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, should the Lessee fail to execute and/or deliver a requested
Estoppel Certificate in a timely fashion the monthly 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 for remainder of the Lease. The
Parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional ask/costs that Lessor
will incur by reason of Lessee’s failure to provide the Estoppel Certificate. Such increase in Base Rent shall in no event
constitute a waiver of Lessee’s Default or Breach with respect to the failure to provide the Estoppel Certificate nor prevent
the exercise of any of the other rights and remedies granted hereunder.

 

(c)          If
Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall within 10 days
after written notice from Lessor deliver to any potential lender or purchaser designated by Lessor such financial statements as
may be reasonably required by such lender or purchaser, including but not limited to Lessee’s financial statements for the
past 3 years. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be
used only for the purposes herein set forth.

 

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

 

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

 

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

 

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

 

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

 

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

 

23.         Notices.

 

23.1         Notice
Requirements. All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered in
person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with
postage prepaid, or by facsimile transmission, or by mail, 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 by email shall be deemed delivered upon
telephone confirmation of receipt (if by fax, a 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.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30.         Subordination;
Attornment; Non-Disturbance.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

37.         Guarantor.

 

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

 

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 or reduce the term of or renew this Lease or to extend or reduce the
term of 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, the right of first offer to purchase or the right of
first refusal to purchase the Premises or other property of Lessor.

 

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

 

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

 

39.4         Effect
of Default on Options.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

44.         Authority;
Multiple Parties; Execution.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

50.         Accessibility;
Americans with Disabilities Act.

 

(a)          The
Premises: ☐  have not undergone an Inspection
by a Certified Access Specialist (CASp).☐ have undergone an inspection by a Certified Access Specialist (CASp) and it was
determined that the Premises met all applicable construction-related accessibility standards pursuant to California Civil Code
§55.51 et seq. ☐  have undergone an Inspection by a Certified Access
Specialist (CASp) and it was determined that the Premises did not meet all applicable construction-related accessibility standards
pursuant to California Civil Code §55.51 et seq.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

	Executed at:	 	 	Executed at:	 

	On:	Nov. 19, 2014	 	On:	Nov. 17, 2014
	By LESSOR:	 	By LESSEE:
	Two Bros L.P.	 	Polar Power, Inc., a California corporation

	 	 	 

	By:	/s/ Sandy Shadrow	 	By:	/s/ Arthur D. Sams

	Name Printed:	Sandy Shadrow	 	Name Printed:	Arthur Sams

	Title:	Managing Member	 	Title:	President
	 	 	 

	By:	 	 	By:	 

	Name Printed:	 	 	Name Printed:	 

	Title:	 	 	Title:	 

	Address:	2220 Avenue of the Stars, #2005	 	Address:	22520 Avalon Blvd.

	Los Angeles, CA 90067 USA	 	Carson, CA 90745
	Telephone:	(310) 908-8300	 	Telephone: (310)	830-9153

	Facsimile (___)	 	 	Facsimile (310)	830-9825

	Email:	 	 	Email:	 
	Email:	 	 	Email:	 

	Federal ID No.	 	 	Federal ID No.	 

 

	BROKER:	 	BROKER:
	Daum Commercial Real Estate Services	 	Daum Commercial Real Estate Services
	 	 	 

  

	Att:	Craig Levin / Larry Iles	 	Att:	Craig Poropat

	Title:	First Vice President/Vice President	 	Title:	 

	Address:	1025 W. 190th Street, Suite 420	 	Address:	1411 W. 190th Street, Suite 450

	Gardena, CA 90248	 	Gardena, CA 90248

	Telephone: (310)	538-6700	 	Telephone: (310)	768-8800

	Facsimile (310)	515-0230	 	Facsimile (___)	 

	Email:	brad.levin@daumcommercial.com	 	Email:	 

	Federal ID No.	 	 	Federal ID No.	 

	Broker/Agent BRE License #:	D/AQ #01129558 / 01020885	 	Broker/Agent BRE License #:	 

	 	 	 
	 	 	 

  

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, 500 N Brand Blvd, Suite 900, Glendale, CA 91203. 

Telephone No. (213) 687.8777. Fax No.: (213) 687.8616.

 

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

 

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

 

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RENT ADJUSTMENT(S) 

STANDARD LEASE ADDENDUM

 

	Dated	 	November 7, 2014

 

	By and Between (Lessor)	 	Two Bros L.P.
	 	 	 
	 	 	 
	(Lessee)	 	Polar Power, Inc., a California corporation
	 	 	 
	 	 	 
	Address of Premises:	 	249 E. Gardena Blvd.
	 	 	Carson, CA

  

Paragraph 51

 

A.          RENT
ADJUSTMENTS:

 

The monthly rent for each
month of the adjustment period(s) specified below shall be increased using the method(s) indicated below:

 

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

 

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

 

a.          On
(Fill in COLA Dates):____________________________________________________________________________________

________________________________________________________________________________________________

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

 

________________________________________________________________________________________________

_______________________________________________________________________________________.
All Items

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

 

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

 

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

 

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

 

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

________________________________________________________________________________________________

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

 

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

 

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

 

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

 

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

 

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

  

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

 

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

 

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

 

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

 

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

 

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

 

		 ̈	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:	 
	January 1, 2016	 	$	30,537.44	 
	January 1, 2017	 	$	31,453.56	 
	January 1, 2018	 	$	32,397.17	 
	January 1, 2019	 	$	33,369.09	 

 

		 ̈	IV.          Initial Term Adjustments.

 

The formula used to calculate adjustments
to the Base Rate during the original Term of the Lease shall continue to be used during the extended term.

 

B.          NOTICE:

 

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

 

C.          BROKER'S
FEE:

 

The Brokers shall be paid
a Brokerage Fee for each adjustment specified above in accordance with paragraph 15 of the Lease
or if applicable, paragraph 9 of the Sublease.

 

NOTICE: These forms are often modified
to meet changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most current form:
AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017.

 

Telephone No. (213) 687-8777. Fax No.:
(213) 687-8616.

  

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OPTION(S) TO EXTEND

STANDARD LEASE ADDENDUM

 

 

	Dated	 	November 7, 2014

 

	By and Between (Lessor)	 	Two Bros L.P.
	 	 	 
	 	 	 
	(Lessee)	 	Polar Power, Inc., a California corporation
	 	 	 
	 	 	 
	Address of Premises:	 	249 E. Gardena Blvd.
	 	 	Carson, CA

 

Paragraph 52

 

A.          OPTION(S)
TO EXTEND:

 

Lessor hereby grants to Lessee the option
to extend the term of this Lease for one (1)additional thirty-six (36) month period(s) commencing when the prior term expires upon
each and all of the following terms and conditions:

 

(i)      In order to exercise
an option to extend, Lessee must give written notice of such election to Lessor and Lessor must receive the same at least 6 but
not more than 9 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)

 

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

 

a.          On
(Fill in COLA Dates): ___________________________________________________________________

________________________________________________________________________________________________

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

 

_______________________________________________________________________________________________ 

________________________________________________________________________________________. All Items

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

 

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

 

_______________________________________________________________________________________________

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

 

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

 

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

 

a.          On
(Fill in MRV Adjustment Date(s)) March 1, 2019 and March 1,
2022                                                                            

 

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

 

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

 

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

 

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

 

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

 

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

 

(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)       When determining
MRV, the Lessor, Lessee and Consultants shall consider the terms of comparable market transactions which shall include, but not
limited to, rent, rental adjustments, abated rent, lease term and financial condition of tenants.

 

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

 

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

 

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

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

 

 ̈
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:
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

		 ̈	IV.      Initial Term Adjustments.

 

The formula used to calculate adjustments
to the Base Rate during the original Term of the Lease shall continue to be used during the extended term.

 

		B.	NOTICE:

 

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

 

		C.	BROKER'S FEE:

 

The Brokers shall be
paid a Brokerage Fee for each adjustment specified above in accordance with paragraph 15 of the Lease or if applicable, paragraph
9 of the Sublease.

  

NOTICE: These forms are often modified
to meet changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most current form:
AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017.

Telephone No. (213) 687-8777. Fax No.:
(213) 687-8616.

 

PAGE 2 OF 2

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	©2000 - AIR COMMERCIAL REAL ESTATE ASSOCIATION	FORM OE-4-04/14E

  

     

     

    

  

ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL
SINGLE-TENANT LEASE-GROSS

FOR THE PREMISES LOCATED AT

249 E. GARDENA BLVD., CARSON, CA

BY AND BETWEEN TWO BROS L.P. (LESSOR) AND

POLAR POWER, INC., A CALIFORNIA CORPORATION (LESSEE)

DATED NOVEMBER 7, 2014

 

		53.	RENT ABATEMENT.

 

Lessee shall be granted the months
of January 2015 and February 2016 Rent free provided Lessee is not in default of the Lease.

 

		54.	SECURITY DEPOSIT.

 

Provided Lessee is not in default
of the Lease, Lessor will apply $29,648 of the Security Deposit towards May 2016 rent, reducing the Security Deposit to $59,262.

 

		55.	LESSOR IMPROVEMENTS.

 

Lessor shall, at Lessor’s
sole cost and expense, complete the following prior to Commencement Date:

 

		A.)	Paint office as needed.

		B.)	Clean existing floor tiles and carpet throughout offices. If carpet cannot be cleaned, Lessor will
work something out with Tenant that will be mutually agreeable.

		C.)	Lessor will credit Lessee up to $2,000 off their rent upon installation of the automatic front
gate system.

 

		56.	WIRING INSTRUCTIONS.

 

The Base Rent shall be wired
to the address below:

 

	Bank:	Bank of America
	Address:	2049 Century Park East Suite 200, Los Angeles, CA. 90067
	ABA/Routing:	026009593
	Account Title:	Two Bros Investments LP
	Account Number:	325039363008

 

		57.	GARDENER.

 

Notwithstanding anything to the
contrary herein, Lessee agrees to retain Maurice Vogel of New Leaf Gardening as the gardener for the Premises for the term of the
Lease, so long as his fees are comparable to other gardening services. They currently charge, which the Lessee agrees to pay, $150.00
per month for gardening services (every other week) for the Premises.

 

Maurice Vogel, New Leaf Gardening
(310) 540-7556

 

	LESSOR: 	 	LESSEE
	 	 	 
	TWO BROS L.P.	 	POLAR POWER, INC.,
	 	 	a California corporation

 

	By:	/s/ Sandy Shadrow	 	By:	/s/ Arthur
    D. Sams	 
	Name:	Sandy Shadrow	 	Name:	Arthur Sams	 
	Title:	Managing Member	 	Title:	President	 
	 	 	 	 	 	 
	By:	 	 	By:	 	 
	Name:	 	 	Name:	 	 
	Title:	 	 	Title:	 	 

 

	Date: 	11/
    19	, 2014	 	Date:	Nov. 17, 2014	 

  

*** If Lessee is a CORPORATION, the authorized
officers must sign on behalf of the corporation and indicate the capacity in which they are signing. This Lease must be executed
by two officers — one of whom is the CEO, president or vice president, and the second of whom is the secretary, assistant
secretary or treasurer — unless Lessee provides Lessor with a certified copy of a resolution of the CORPORATION which provides
otherwise and such certified copy of the resolution shall be attached to this Lease. ***

 

     

     

    

  

	 	Uniform
    Disclosure and Limitation of Liability Form

 

Property Address:

 249 E. Gardena Blvd., Carson, CA

 

THIS FORM CLARIFIES AND LIMITS THE
DISCLOSURES THAT HAVE BEEN MADE, LIMITS BROKER’S LIABILITY WITH RESPECT TO SUCH DISCLOSURES, AND PLACES VARIOUS DUTIES AND
RESPONSIBILITIES UPON SELLER/LESSOR AND BUYER/LESSEE. PLEASE READ IT CAREFULLY.

 

I. Notice to Owners, Buyers and Tenants
Regarding Hazardous Substances and Underground Storage Tanks: Comprehensive Federal, state and local regulations have recently
been enacted to control the use, storage, handling, clean up, removal and disposal of hazardous and toxic wastes and substances.
Extensive legislation has also been adopted with regard to underground storage tanks. As real estate licensees, we are not experts
in the area of hazardous substances and we encourage you to consult with your legal counsel with respect to your rights and liabilities
with regard to hazardous substances laws and regulations and to obtain technical advice with regard to the use, storage, handling,
clean-up, removal or disposal of hazardous substances from professionals, such as a civil engineer, geologist or other persons
with experience in these matters to advise you concerning the property. We also encourage you to review the past uses of the property,
which may provide information as to the likelihood of the existence of hazardous substances or storage tanks on the property.

 

DAUM, hereinafter called “Broker”,
will disclose any knowledge it actually possesses with respect to the existence of hazardous substances or underground storage
tanks on the property. Broker has not made any investigations or obtained reports regarding the property, unless so indicated in
a separate document signed by Broker. Broker makes no representation or warranty regarding the existence or non-existence of hazardous
substances or underground storage tanks on the property.

 

With regard to the sale of real property,
recently enacted California Health and Safety Code Section 25359.7 provides that any owner of non-residential real property who
knows, or has reasonable cause to believe, that any release of hazardous substances has come to be located on or beneath real property,
shall, prior to the sale of real property, give written notice of that condition to the buyer of the real property. Failure of
the owner to provide written notice when required shall subject the owner to actual damages and other remedies provided by the
law. In addition, where the owner has actual knowledge of the presence of any hazardous substance and knowingly and willfully fails
to provide written notice to the buyer, the owner is liable for a civil penalty not to exceed $5,000 for each separate violation.

 

With regard to leases of real property,
Section 25359.7 of the California Health and Safety Code provides that any lessee of real property who knows, or has reasonable
cause to believe, that any release of hazardous substances has come to be located on or beneath the real property shall, upon discovery
by the lessee of the presence or suspected presence of a hazardous substance release, give notice of that condition to the owner
of the real property. Failure of the lessee to provide written notice as required to the owner shall make the lease voidable at
the discretion of the owner. The Health and Safety Code provides that if the lessee has actual knowledge of the presence of any
hazardous substance release and knowingly or willfully fails to provide written notice as required to the owner, the lessee is
liable for a civil penalty not to exceed $5,000 for each violation.

 

As used in this notice, the term "hazardous
substances" is used in the broadest sense and includes all hazardous and toxic materials, substances, or waste as defined
by applicable Federal, state and local laws and regulations and includes, but is not limited to petroleum products, paints and
solvents, PCBs, asbestos, pesticides and other substances. Hazardous substances may be found on any type of real property, improved
or unimproved, occupied or vacant.

 

II. Notice to Owners, Buyers and Tenants
Regarding the "Americans with Disabilities Act": Legislation known as the "Americans with Disabilities Act"
("ADA") was recently adopted and may affect The Property and/or its intended use. As real estate licensees, we are not
experts in the legal or technical aspects of ADA as it may pertain to you. We encourage you to consult your legal counsel, architect
and/or other professionals with appropriate experience with regard to your rights or obligations for compliance with ADA.

 

III. Disclaimer and Indemnification:
This document has been prepared by DAUM (“Broker”) at the request of all parties which agree to indemnify and hold
DAUM, its principals, shareholders, officers, agents and employees harmless from any liability which may arise from the preparation
of this or any other document relating to this transaction.

 

All parties acknowledge having been advised
to have this and all transaction documents approved by legal counsel and financial counsel prior to execution and delivery.

 

This transaction is entered into with the
understanding that Buyer/Lessee has independently verified to its satisfaction the following items: All measurements, utilities
(including power, plumbing, heating and air-conditioning systems), minimum clearance, loading door(s) dimensions, truck access,
fire sprinkler system capacity (if any), restrooms, City codes including zoning, setbacks, occupancy permits, hazardous material
and waste inspection, and ability to conduct its intended use on the premises.

 

The items set forth above shall not be
considered as an exhaustive list of items, but examples of items Buyer/Lessee should investigate.

 

Any information provided by Broker has
been obtained from sources deemed reliable. While Broker does not doubt its accuracy, Broker has not verified it, assumes no responsibility
and makes no guarantee, warranty or representation regarding it. It is Buyer’s/Lessee’s responsibility to independently
confirm its accuracy and completeness. Buyer/Lessee hereby indemnifies and holds harmless Broker named in this transaction, its
principals, shareholders, officers, agents and employees from the following: Any claim for personal injury, merchandise or property
damage or loss of value arising from or related to physical condition of the property, including, without limitation, soil, roof
or structural condition, any claim, dispute or action in connection with completion of work or repairs to the premises, any expense
including reasonable attorney fees and costs suffered in connection with any of the above matters.

 

IV. Credit and Financial Information:
Broker has provided Seller/Lessor with credit information obtained from Buyer/Lessee, which Broker has not verified and does
not guarantee. Seller/Lessor acknowledges that Broker does not guarantee either payment or Buyer’s/Lessee’s performance
of the terms of the purchase/lease agreement. Seller’s/Lessor’s execution of this document is based strictly on Seller’s/Lessor’s
independent verification of Buyer’s/Lessee’s credit-worthiness and Seller/Lessor holds Broker harmless in the event
of Buyer’s/Lessee’s default.

 

NOTE: If the property covered by
this Uniform Disclosure and Limitation of Liability Form is owned jointly or by a corporation, each individual signing represents
and warrants that he/she is authorized to execute and deliver this document and to bind such other owners or corporation having
any interest in the property.

 

DAUM makes no representation or warranty
regarding the status of The Property with regard to the items covered in this Uniform Disclosure and Limitation of Liability Form.

 

APPROVED this 17th day of Nov.
2014

 

	Polar Power, Inc., a California corporation	 
	 	 
	By:	/s/
    Arthur D. Sams 	 
	 	Arthur Sams, President	 

 

APPROVED this 19th day of
Nov. 2014

 

	By:	/s/ Sandy Shadrow 	 
	 	Sandy Shadrow, Managing Member	 

 

©2007 – DAUM Commercial Real Estate
Services. All rights reserved. This form is for use only in the transaction in which DAUM is involved and is not to be distributed
to others. Form DAUM02 REV2006.02.15

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