Document:

Securities Purchase Agreement dated February 12,2004

 EXHIBIT 10.3 
  

  
 SECURITIES PURCHASE AGREEMENT 
  
 dated February
12, 2004 
  
 among 
  
 CALLWAVE, INC. 
  
 AND 
  
 THE INVESTORS NAMED HEREIN 
  
  

 SECURITIES PURCHASE AGREEMENT (the “Agreement”) dated as of
February 12, 2004 by and among CALLWAVE, INC., a California corporation (the “Company”), the Persons listed on Annex I (the “Investors”) and the Persons listed on Annex II hereto (each, a
“Seller” and collectively, the “Sellers”). 
  
 PREAMBLE 
  
 WHEREAS, each Seller owns the number of shares of (i) the Common Stock, no par value per share, of the Company (the “Common Stock”), and/or (ii) the Series E Preferred Stock, no par value per share, of the Company
(the “Series E Preferred Stock”), as is set forth opposite such Seller’s name on Annex II; 
  
 WHEREAS, each Seller desires to sell to the Investors and the Investors desire to purchase from each Seller (a) the number of shares of Common
Stock (the “Purchased Common”) and/or (b) the number of shares of Series E Preferred Stock (the “Purchased Preferred” and together with the Purchased Common, the “Purchased Shares”), set forth
opposite such Seller’s name on Annex II; 
  
 WHEREAS, the Company desires to amend its Fifth Amended and Restated Articles of Incorporation to create a new class of Series E Preferred Stock, to be known as Series E-1 Preferred Stock; 
  
 WHEREAS, the Series E-1 Preferred Stock contains certain put rights
that the Company created for the benefit of the parties purchasing the Purchased Preferred hereunder; 
  
 WHEREAS, the Company desires to amend the Investor Rights Agreement (as hereinafter defined) to, among other things, provide the holders of the
shares of Series E-1 Preferred Stock with certain registration rights; 
  
 WHEREAS, pending the effectiveness of the amendment to the Investor Rights Agreement, the Company desires to allow for the conversion of the Purchased Preferred for an equal number of shares of Series E-1 Preferred Stock in order to
permit the parties purchasing the Purchased Preferred hereunder to preserve their put rights as holders of Series E-1 Preferred Stock (upon conversion of the Purchased Preferred), without risking the loss of their registration rights as holders of
the Purchased Preferred; 
  
 WHEREAS, the Company believes
that the Investors possess knowledge and experience in business and financial matters and the operations of the business of the Company which would be beneficial to the Company and its management; 
  
 WHEREAS, the Company deems it to be in the Company’s best
interest for the Investors to (i) purchase the Purchased Shares from the Sellers, (ii) purchase the Company Shares (as defined below) from the Company and (iii) convert, at such time as is applicable, the Purchased Preferred into shares of Series
E-1 Preferred Stock; and 

 WHEREAS, the Company desires to sell to the Investors and the Investors desire to purchase from
the Company 1,600,000 shares of Common Stock less the number of shares of Purchased Common (the “Company Shares”). 
  
 NOW THEREFORE, in consideration of the foregoing and of the agreements set forth below, the parties agree as follows: 
  
 Section 1. Sale and Purchase. 
  
 (a) Issuance of Purchased Securities.  
  
 On the terms and subject to the conditions of this Agreement, at the
Closing: 
  
 (i) the Company shall issue and sell
to the Investors, and the Investors shall purchase and acquire from the Company, all of the Company Shares; and 
  
 (ii) the Sellers shall sell to the Investors, and the Investors shall purchase and acquire from the Sellers, the shares of Purchased
Common and Purchased Preferred set forth opposite each such Seller’s name on Annex II. 
  
 (b) Reservation of Reserved Shares. 
  
 Subject to the terms and conditions hereof, the Company has authorized the reservation of (i) a sufficient number of shares (the “Reserved Common
Shares”) of the Common Stock for issuance upon conversion of the Purchased Preferred, or if the Purchased Preferred has been converted into shares of Series E-1 Preferred Stock pursuant to Section 1(e) below, upon conversion of such shares
of Series E-1 Preferred Stock into shares of Common Stock, and (ii) all authorized shares (the “Reserved Preferred Shares” and together with the Reserved Common Shares, the “Reserved Shares”) of the Series E-1
Preferred Stock for issuance only upon the conversion of the Purchased Preferred pursuant to Section 1(e) below. 
  
 (c) Commitment to Purchase the Shares. 
  
 Subject to the terms and conditions of this Agreement, at the Closing each Investor shall purchase from the Company and the Sellers that number of Company
Shares, Purchased Common and Purchased Preferred set forth opposite such Investor’s name in columns (1), (2) and (3), respectively, of Annex I attached hereto. 
  
 (d) Payment of the Subscription Price and Purchase Price. 
  
 At the Closing, each Investor shall make payment in the amount set forth
opposite such Investor’s name on Annex I, by wire transfer of immediately available funds to the Company, to the account designated by the Company to the Investors at least two business days prior to the Closing Date, as full payment for
the Purchased Shares and the Company Shares. The aggregate payments to be made by the Investors to the Company and the Sellers at the Closing shall be $12,225,000 (the “Aggregate Purchase Price”). Immediately after the Closing, the
Company shall distribute that portion of the Aggregate Purchase Price to the Sellers that represents the aggregate purchase price (the “Aggregate Purchased Shares Purchase Price”) for 
  

 2 

 the Purchased Shares (as set forth on Annex II). The Company shall distribute each Seller’s portion of the
Aggregate Purchased Shares Purchase Price (as set forth on opposite such Seller’s name on Annex II) to the accounts designated by such Seller to the Company at least two business days prior to the Closing Date. Each Seller hereby
expressly consents and agrees to the aggregate valuation of such Seller’s Purchased Shares as set forth on Annex II and to the allocation among the Sellers of the consideration to be received by such Seller pursuant to this Agreement.
Each Seller hereby further expressly agrees to hold the Investors harmless against all Liability, together with all reasonable costs and expenses (including reasonable legal fees and expenses), relating to or arising from the failure of the Company
to distribute such Seller’s portion of the Aggregate Purchased Shares Purchase Price to such Seller. 
  
 (e) Conversion of the Purchased Preferred. 
  
 Upon the earlier to occur of (A) the execution of the Investor Rights Amendment (as hereinafter defined) by all stockholders that are currently parties to
the Investor Rights Agreement and (B) receipt by the Company of a written demand (a “Conversion Notice”) from the holders of a majority of the Purchased Preferred (the “Converting Investors”) seeking to convert
their Purchased Preferred, the Company shall convert each share of Purchased Preferred into one share of Series E-1 Preferred Stock. In connection with a conversion pursuant to the foregoing clause “(B),” the Company agrees to treat each
Converting Investor as though each such Converting Investor has held the shares of Series E-1 Preferred Stock as of the date the Company received the Conversion Notice. Notwithstanding the foregoing, at any time prior to the expiration of the
Converting Investors’ optional put right as contained in Section 1(a)(iv) of the Articles of Incorporation (as hereinafter defined), the Converting Investors may, in their sole discretion, elect to convert each share of Series E-1 Preferred
Stock back into one share of Purchased Preferred by delivering to the Company a written notice of the number of shares of Series E-1 so being converted. In connection with any such conversion pursuant to the immediately preceding sentence, the
Company agrees to treat each Converting Investor as though each such Converting Investor holds, as of the date the Company received such written notice, the shares of Series E Preferred issuable to such Converting Investor by reason of such
conversion. The Converting Investors shall be permitted to exercise their conversion rights pursuant to this Section 1(e) without limitation, until the earlier to occur of (y) the satisfaction of the condition set forth in “(A)” above and
(z) the date in which the Converting Investors no longer own any shares of the Purchased Preferred or the Series E-1 Preferred Stock, as applicable. Promptly following the delivery of any notice of conversion under this Section 1(e), the Company
shall issue to each Converting Investor a share certificate evidencing the number of shares of Series E Preferred or Series E-1 Preferred, as applicable, issuable to such Converting Investor by reason of such conversion, subject to such Converting
Investor’s tender of all stock certificates evidencing the shares being converted hereunder. . 
  
 Section 2. Closings; Delivery of the Securities. 
  

(a) The closing of the sale of the Company Shares and the Purchased Shares (the “Closing”) shall take place at the offices of
O’Melveny & Myers LLP, 30 Rockefeller Plaza, New York, New York 10112, simultaneously with the execution and delivery of this Agreement or at such other time and place as the parties shall agree. The date of the Closing is referred to
herein as the “Closing Date”. 
  

 3 

 (b) At the Closing, in consideration of the Investors’ delivery of the Aggregate Purchase Price
pursuant to Section 1(d), the Company shall deliver to each Investor a certificate or certificates registered in the name of such Investor, representing all of such Investor’s respective Company Shares and Purchased Shares as set forth
on Annex I. 
  
 (c) At the Closing, in consideration of the
Company’s delivery of the Aggregate Purchased Shares Purchase Price pursuant to Section 1(d), each Seller shall deliver to the Company a certificate or certificates representing the Purchased Common and the Purchased Preferred being sold
by such Seller to the Investors as set forth on Annex II, duly endorsed in blank for transfer or accompanied by stock powers duly executed in blank, sufficient in form and substance to convey to the Company title to the Purchased Common and
the Purchased Preferred being sold by such Seller to the Investors. 
  
 Section 3. Representations and Warranties of the Company. 
  
 There is attached hereto at Exhibit F a Disclosure Schedule that sets forth facts and circumstances that are exceptions and supplements to the representations and warranties set forth in this Section 3
and Section 4, below (the “Disclosure Schedule”). Such Disclosure Schedule shall include a list of each section of this Agreement to which any information set forth therein is intended to serve as an exception or
qualification, provided that, any information expressly disclosed therein by reference to any one section of this Agreement (the “first Section”) shall be deemed to be disclosed with respect to and incorporated into each other
section hereof (each, a “second Section”), to the extent that a reasonable person would determine, from the information disclosed with respect to the first Section, that such information also applies to the second section. For good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledges, the Company hereby represents and warrants to each Investor that, except as set forth in the Disclosure Schedule: 
  
 (a) Organization. 
  
 The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of California, is duly qualified to do business and in good standing in each other jurisdiction in which it conducts business, has assets or employees or maintains an office and has all requisite corporate power
and authority to own, lease and operate the assets used in its business, to carry on its business as presently conducted, to enter into the Documents, to perform its obligations thereunder, and to consummate the transactions contemplated thereby.
Attached as Exhibits A and B, respectively, are correct and complete copies of the Sixth Amended and Restated Articles of Incorporation of the Company, as in effect on the date hereof, and the Amended By-laws of the Company, as in
effect on the date hereof (the “Articles of Incorporation” and the “By-laws,” respectively). For purposes of this Agreement, the term “Documents” means (i) this Agreement, (ii) the Articles of
Incorporation, (iii) the Amendment dated as of the date hereof to the Investor Rights Agreement (as hereinafter defined), in the form of Exhibit C hereto (as amended, the “Investor Rights Amendment”), (iv) the
Stockholders’ Agreement dated as of the date hereof, in the form of Exhibit D hereto (the “Stockholders’ Agreement”), (v) the Waiver and Lien Release dated as of the date hereof by and among the Investors and the
Company, and all other documents, agreements and instruments executed and delivered in connection herewith, in each case, as amended, modified or supplemented from time to time. 
  

 4 

 (b) Subsidiaries. 
  
 Except as set forth on Section 3(b) of the Disclosure Schedule, the Company has no subsidiaries and does not
otherwise own or control, directly or indirectly, any equity or voting interest in any Person, nor has the Company made any commitment or subscribed for the purchase of any such equity or voting interest. The term “control” includes,
without limitation, the possession, directly or indirectly, of the power to direct the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. The term “Person” shall be
construed in the broadest sense and means and includes any natural person, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and other entity or
Governmental Authority. The term “Governmental Authority” means any federal, state, municipal, foreign or other government, governmental department, commission, board, bureau, agency or instrumentality, or any private or public
court or tribunal. References herein to the Company’s “subsidiaries” or a “subsidiary” include both direct and indirect subsidiaries of the Company. 
  
 Except as set forth on Section 3(b) of the Disclosure Schedule, either the Company or one of its subsidiaries holds
of record and owns beneficially all of the outstanding equity securities of each subsidiary of the Company, free and clear of any Encumbrances. 
  
 (c) Authorization of the Documents; No Conflicts. 
  

The Company has all requisite corporate power and authority to execute, deliver and perform the Documents and to consummate the transactions
contemplated thereby. The execution, delivery and performance by the Company of the Documents have been duly authorized by all requisite corporate and stockholder action of the Company and its stockholders, and each Document constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting
creditor’s rights and to general equitable principles. The Company’s execution, delivery and performance of the Documents to which it is a party, its consummation of the transactions contemplated thereby and its compliance with the
provisions thereof will not (a) violate any provision of any Law applicable to the Company or any of its properties or assets or (b) conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute (with due
notice or lapse of time, or both) a default or give rise to any right of termination, cancellation or acceleration under, or result in the creation of any Encumbrance upon any of the properties or assets of the Company or under, the Articles of
Incorporation, or By-laws or any Contract. 
  
 (d)
Authorization of Company Shares, Purchased Shares and Reserved Shares. 
  
 The authorization, issuance, sale and delivery of the Company Shares, the transfer, sale, assignment and delivery of the Purchased Shares, the authorization of the shares of 
  

 5 

 Series E-1 Preferred Stock, and the reservation of the Reserved Shares have been duly authorized by all requisite
corporate and stockholder action on the part of the Company and its stockholders. As of the Closing, the Purchased Shares and the Company Shares, respectively, are, and upon their issuances in accordance with the provisions of the Articles of
Incorporation, the Reserved Shares will be, validly issued and outstanding, fully paid and nonassessable, with no personal liability attaching to the ownership thereof and not subject to any preemptive rights, rights of first refusal or other
similar rights of the stockholders of the Company (other than as set forth in the Stockholders’ Agreement). 
  
 (e) No Consent or Approval Required. 
  
 Except as set forth on Section 3(e) of the Disclosure Schedule, no consent, approval or authorization of, or declaration to or filing with
(including pursuant to any federal or state securities laws), any Person is required for the valid authorization, execution and delivery by the Company of any Document or for its consummation of the transactions contemplated thereby or for the valid
authorization, issuance and delivery of the Company Shares, for the valid transfer, sale, assignment and delivery of the Purchased Shares, or for the valid authorization, reservation, issuance and delivery of the Reserved Shares, other than those
consents, approvals, authorizations, declarations or filings which have been obtained or made, as the case may be. 
  
 (f) Capitalization. 
  
 The capital stock of the Company immediately prior to the Closing consists solely of: (i) 50,000,000 shares of Common Stock, of which: (A) 10,996,640
shares are issued and outstanding and owned by the Persons listed on Section 3(f) of the Disclosure Schedule, (B) 4,915,620 shares are reserved for issuance upon the exercise of options granted or to be granted under the Company’s 1999
Stock Option Plan and the 2000 Stock Option Plan, and (C) 14,230,941 shares are reserved for issuance upon conversion of the Preferred Stock (as defined below); and (ii) 17,391,641 shares of authorized Preferred Stock, no par value per share (the
“Preferred Stock”), (A) 648,005 of which shares have been designated Series A Preferred Stock and which have a $0.33333 per share liquidation preference over the Common Stock, 648,005 of which are issued and outstanding and owned by
the Persons listed on Section 3(f) of the Disclosure Schedule, (B) 2,828,727 of which shares have been designated Series B Preferred Stock and which have a $0.60 per share liquidation preference over the Common Stock, 2,828,727 of which are
issued and outstanding and owned by the Persons listed on Section 3(f) of the Disclosure Schedule, (C) 1,229,166 of which shares have been designated Series C Preferred Stock and which have a $1.20 per share liquidation preference over the
Common Stock, 1,229,166 of which are issued and outstanding and owned by the Persons listed on Section 3(f) of the Disclosure Schedule, (D) 1,705,696 of which shares have been designated Series D Preferred Stock and which have a $2.40 per
share liquidation preference over the Common Stock, 1,705,696 of which are issued and outstanding and owned by the Persons listed on Section 3(f) of the Disclosure Schedule, (E) 7,819,347 of which shares have been designated Series E
Preferred Stock and which have a $2.71 per share liquidation preference over the Common Stock, 7,819,347 of which are issued and outstanding and owned by the Persons listed on Section 3(f) of the Disclosure Schedule, and (F) 3,000,000 of
which shares have been designated Series E-1 Preferred stock and which have a $2.71 per share liquidation preference over the Common Stock, none of which are issued and outstanding. 
  

 6 

 All of the Company’s and its subsidiaries’ issued and outstanding shares of capital stock (or
other equity securities) have been duly authorized and validly issued and are fully paid and nonassessable, with no personal liability attaching to the ownership thereof. Except as set forth on Section 3(f) of the Disclosure Schedule, (i) no
subscription, warrant, option, convertible security or other right (contingent or otherwise) to purchase or acquire any shares of capital stock of the Company or any of its subsidiaries is authorized or outstanding, (ii) neither the Company nor any
of its subsidiaries has any obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right or to issue or distribute to holders of any shares of its capital stock or other equity securities
any evidences of indebtedness or assets of the Company or such subsidiary, (iii) neither the Company nor any of its subsidiaries has any obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock
(or other equity securities) or any interest therein or to pay any dividend or make any other distribution in respect thereof, and (iv) there are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the
Company or any of its subsidiaries. All of the issued and outstanding shares of the Company’s and its subsidiaries’ capital stock (or other equity securities) have been offered, issued and sold by the Company or such subsidiary in
compliance with applicable federal and state securities Laws. 
  
 Immediately after the Closing, the Company Shares and the Purchased Shares shall represent (on an as converted basis), at least fourteen and five-tenths percent (14.5%) of the Company’s Common Stock (calculated on a fully diluted basis
and including as outstanding securities, shares of Common Stock authorized or reserved under the Company’s 1999 Stock Option Plan and 2000 Stock Option Plan but not granted or issued and treating all outstanding securities of the Company that
are convertible into or exercisable or exchangeable for, shares of Common Stock, as the maximum number of shares of Common Stock issuable with respect to such securities at any time on or after the date of the Articles of Incorporation). 

 
 (g) Defaults. 
  
 (i) Except as set forth on Section 3(g) of the
Disclosure Schedule, neither the Company nor any of its subsidiaries is in default (i) under the Articles of Incorporation or the By-laws (or such subsidiary’s certificate of incorporation or formation, by-laws or other organizational or
governance document), or any Contract to which the Company or such subsidiary is a party or by which the Company or such subsidiary or any of such Person’s properties are bound or affected or (ii) to the best knowledge of the Company, under any
Law. To the best knowledge of the Company, there exists no condition, event or act which constitutes, or which, after notice, lapse of time or both, would constitute, a default under any of the foregoing. The term “Law” means, as to
any Person, all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates or orders of any Governmental Authority applicable to such Person or any of its properties or assets, and all Judgments applicable to such Person,
and the term “Judgments” means all judgments, injunctions, citations, orders and decrees of all courts and arbitrators in proceedings or actions in which the Person in question is a party or by which any of its assets or properties
is bound. 
  
 (ii) For purposes of this
Agreement, the phrase “best knowledge of the Company” means the actual knowledge of David Hofstatter, Jason Spievak and David 
  

 7 

 Trandal as of the Closing Date, without any duty to conduct additional investigations into the pertinent
matter. 
  
 (h) Financial Information; Projections.

  
 The Company has furnished to each of the Investors a complete
and correct copy of (i) the consolidated unaudited balance sheet of the Company (the “Balance Sheet”) as at December 31, 2003 (the “Balance Sheet Date”) and the related unaudited statements of income and cash flows
for the financial quarter ending December 31, 2003, and (ii) the audited consolidated balance sheet of the Company as at June 30, 2003 and the related statements of income and cash flows for the fiscal year ending on June 30, 2003 audited by Ernst
& Young LLP, the Company’s independent certified public accountants (collectively, with the Balance Sheet, the “Financial Statements”). The Financial Statements were prepared in good faith in accordance with generally
accepted accounting principles (“GAAP”) and in accordance with the books and records of the Company and present fairly in all respects the financial condition and results of operations of the Company and its subsidiaries, at the
dates and for the periods indicated. 
  
 The initial budget for
calendar year 2004 of the Company and its subsidiaries, as set forth on Section 3(h) of the Disclosure Schedule, has been prepared in good faith, using assumptions which are reasonable. Such projections set forth in reasonable detail the
principal assumptions upon which such projections are based and represent the Company’s best estimate of future performance and costs. 
  
 (i) Absence of Undisclosed Liabilities. 
  
 Except as set forth on Section 3(i) of the Disclosure Schedule, neither the Company nor any of its subsidiaries has any liability or obligation of
any nature (whether known or unknown, matured or unmatured, secured or unsecured, fixed or contingent, accrued or unaccrued) (“Liabilities”), except for (i) Liabilities disclosed on the Balance Sheet (excluding the notes thereto),
(ii) Liabilities which have arisen since the Balance Sheet Date in the ordinary course of business and which are similar in nature and amount to the Liabilities which arose during the comparable period of time in the immediately preceding fiscal
period and (iii) Contractual Liabilities incurred in the ordinary course of business. 
  
 (j) Absence of Changes. 
  
 Except as set forth on Section 3(j) of the Disclosure Schedule, since the Balance Sheet Date there has not been (i) any material adverse change in the business, affairs, operations, assets, properties, Liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company or any of its subsidiaries (taken as a whole) (a “Material Adverse Change”), (ii) any borrowing or agreement to borrow funds or any Liability incurred by the
Company or any of its subsidiaries, other than current Liabilities incurred in the ordinary course of business consistent in type and amount with past practice, (iii) any asset or property of the Company or any of its subsidiaries made subject to
any Encumbrance of any kind, (iv) any waiver of any right of the Company or any of its subsidiaries, or the cancellation of any debt owed to or claim held by the Company or any of its subsidiaries, (v) any payment of dividends 
  

 8 

 on, or other distribution with respect to, or any direct or indirect redemption, purchase or acquisition of, any shares
of the capital stock or other securities of the Company or any of its subsidiaries, (vi) any issuance of any stock, bond or other security of the Company or any of its subsidiaries, (vii) any disposition of any tangible or intangible asset of the
Company or any of its subsidiaries, (viii) any loan by the Company or any of its subsidiaries to any officer, director, employee, consultant, agent or stockholder of the Company or any of its subsidiaries or any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the Company (other than advances to such Persons in the ordinary course of business consistent with past practice in connection with bona
fide business expenses), (ix) any damage, destruction or loss (whether or not covered by insurance) of any asset of the Company or any of its subsidiaries, (x) any extraordinary increase, direct or indirect, in the compensation paid or payable to
any officer, director, employee, consultant or agent of the Company or any of its subsidiaries, (xi) any write-down of the value of any inventory, or any write-off as uncollectible of any account or note receivable of the Company or any of its
subsidiaries that is not consistent in type and amount with the Company’s or such subsidiary’s past practice, (xii) any change in the accounting methods, practices or policies followed by the Company or any of its subsidiaries or any
change in depreciation or amortization policies or rates theretofore adopted, which has not been adequately provided for or disclosed in the Financial Statements or (xiii) any agreement or commitment with respect to any of the foregoing matters.

  
 (k) Title to Assets, Properties and Rights.

  
 Except as is set forth on Section 3(k) of the
Disclosure Schedule, the Company and its subsidiaries have good and marketable title to all properties, interests in properties and assets (real, personal, intangible or mixed) used by the Company or any of its subsidiaries in the conduct of its
business, or necessary and desirable to conduct its business, free and clear of all mortgages, Judgments, claims, liens, security interests, pledges, escrows, charges, pre-emptive rights, rights of first offer or first refusal or other encumbrances
of any kind or character whatsoever (“Encumbrances”). 
  
 (l) Intellectual Property Rights. 
  
 (i) The term “Intellectual Property Rights” means all industrial and intellectual property rights recognized, under any laws or international conventions or agreements, in any country or jurisdiction
in the world, including, without limitation, patents, patent applications, and patent rights, trademarks, trademark applications and registrations, service marks, service mark applications and registrations, domain names, domain name applications
and registrations, trade dress, logos and designs, trade names, brands, product configurations, and the goodwill connected with the foregoing, copyrights and copyright rights, copyright applications and registrations, mask works, know-how, business
methods, franchises, trade secrets, confidential information, proprietary processes and technology, trade secrets, data bases, licenses, source codes, inventions, discoveries, technical advances, and any manual, formulae and/or documentation
constituting, describing or related to the foregoing. 
  
 (ii) Section 3(l)(ii) of the Disclosure Schedule includes a list of all Intellectual Property Rights, other than general commercial software (e.g., “shrink wrap” licenses for Microsoft Word or Excel (“Retail
Licenses”)) that are owned by or licensed to the Company and its subsidiaries (the “Company Intellectual Property”). 
  

 9 

 (iii) To the best knowledge of the Company, as of the date hereof, and except as
indicated in Section 3(l)(iii) if the Disclosure Schedule, (A) the Company Intellectual Property is valid and subsisting, and (B) except any of the Company Intellectual Property that is licensed from others, the Company or a subsidiary is the
exclusive owner of and enjoys all rights of ownership with respect to, the Company Intellectual Property, free and clear of any Encumbrance, and no royalties, honoraria or fees are payable by the Company or any of its subsidiaries to other Persons
by reason of the ownership or use of the Company Intellectual Property, (C) the Company or a subsidiary owns, is licensed or otherwise possesses all Intellectual Property Rights necessary to use, manufacture, market, import, and sell the
Company’s and its subsidiaries’ products and services, except where any failure to own, license or otherwise possess such Intellectual Property Rights would not reasonably be expected to have a Material Adverse Change, and (D) the Company
Intellectual Property that falls within the scope of Title 35 of the United States Code is in compliance with the same, including, but not limited to, 35 U.S.C. Section 112, Paragraph 1, in that the manner and process of making and using the
inventions claimed therein has been disclosed in such full, clear, concise, and exact terms as to enable one skilled in the art to make and use the same, and that the best mode contemplated by the inventors at the time of the invention of carrying
out their inventions has been set forth. 
  
 (iv)
Except as described in Section 3(l)(iv) of the Disclosure Schedule, neither the Company nor any of its subsidiaries has received any threat, demand or notice of claim from any person or entity, whether in writing or otherwise, asserting that
Company’s or a subsidiary’s use, manufacture, importation, or sale of products constitutes any infringement, interference, violation, misappropriation, breach or wrongful use of the Intellectual Property Rights of any other person or
entity. Neither the Company nor any of its subsidiaries is a party to any Proceeding or outstanding decree, order, judgment, agreement or stipulation restricting in any manner the use, transfer, or licensing by the Company or any of its subsidiaries
of any Intellectual Property Rights necessary to conduct its business as presently conducted or as proposed by the Company to be conducted, or which may affect the validity, use or enforceability of the Company Intellectual Property. Neither the
Company nor any of its subsidiaries has been named in any suit, action or Proceeding which involves a claim of infringement, misappropriation or violation of any Intellectual Property Rights of any third party by the Company. The use, manufacturing,
marketing, licensing and sale of the products of the Company and its subsidiaries as presently conducted and as proposed by the Company to be conducted do not, to the best knowledge of the Company as of the date hereof, infringe, misappropriate or
violate any valid Intellectual Property Rights of any third party. 
  
 (v) The Company and each of its subsidiaries has licensed copies of all Retail Software and does not possess any pirated, illegally copied, bootleg or otherwise non-licensed copies of any Retail Software. 

 

 10 

 (vi) Except as set forth in Section 3(l)(vi) of the Disclosure Schedule, all
current and former employees of the Company and its subsidiaries, and independent contractors of the Company and its subsidiaries, have executed written agreements with the Company or a subsidiary, substantially in the form of Exhibit E hereto, (A)
assigning to the Company or such subsidiary any and all Intellectual Property Rights that were devised, developed or designed by such employee or independent contractor within the scope of their employment or engagement with the Company or such
subsidiary and acknowledging that each piece of such intellectual property constitutes a “work made for hire” for the Company or such subsidiary (each a “Work for Hire”), and (B) providing for confidentiality and
nonsolicitation on the part of the employee. To the knowledge of the Company, no employee of the Company or any of its subsidiaries has entered into any contract that restricts or limits in any way the scope or type of work in which he may be
engaged or requires him to transfer, assign, or disclose information concerning his Work for Hire to any Person other than the Company or any of its subsidiaries. The Company and each of its subsidiaries has exclusive ownership of all such Work for
Hire. 
  
 (vii) Except as set forth in Section
3(l)(vii) of the Disclosure Schedule, neither the Company nor any of its subsidiaries is currently participating in any discussions, negotiations, correspondence or meetings with respect to new licensing or similar arrangements, whether
involving the licensing of any of the Company Intellectual Property or the licensing of a third party’s Intellectual Property Rights. 
  
 (m) Employment of Officers, Employees and Consultants. 
  
 Except as set forth on Section 3(m) of the Disclosure Schedule, no Person has, or, to the best knowledge of the
Company, may, assert any valid claim against the Company or any of its subsidiaries with respect to: (a) employment not terminable at will by, or association with, the Company, of any of the present officers or employees of or consultants to the
Company or any of its subsidiaries (collectively, the “Designated Persons”) or (b) the use, in connection with any business presently conducted or proposed to be conducted by the Company or any of its subsidiaries or any of the
Designated Persons, of any information which the Company or any of its subsidiaries or any of the Designated Persons would be prohibited from using under any prior agreements or arrangements or any legal considerations applicable to unfair
competition, trade secrets or proprietary information. 
  
 (n)
ERISA Plans. 
  
 (i) Except as set
forth on Section 3(n) of the Disclosure Schedule, neither the Company nor any of its subsidiaries maintains nor is it a party to (or ever maintained or was a party to) any “employee welfare benefit plan,” as defined in Section 3(1)
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or any other written, unwritten, formal or informal plan or agreement involving direct or indirect compensation other than workers’ compensation,
unemployment compensation and other government programs, under which the Company or any of its subsidiaries has any present or future obligation or Liability. Neither the Company nor any of its subsidiaries maintains nor is it a party to (or ever
maintained or was a party to) any “employee pension benefit plan,” as defined in Section 3(2) of ERISA, and neither the Company nor any of its subsidiaries contribute to any “multiemployer plan” as defined in Section 3(37) of
ERISA. 
  

 11 

 (ii) There is no Contract, plan or arrangement covering any employee or former employee
of the Company or any of its subsidiaries that, individually or collectively, could give rise to the payment of any amount that would not be deductible by the Company or such subsidiary by reason of Section 280G of the Code. 
  
 (iii) Section 3(n) of the Disclosure Schedule lists
each employment, severance or other similar Contract, arrangement or policy (written or oral) providing for insurance coverage (including any self-insured arrangements), non-statutory workers’ compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits, deferred compensation, profit-sharing, bonuses, stock options, stock appreciation or other forms of incentive compensation or post-retirement insurance, compensation or benefits entered
into, maintained or contributed to by the Company or any of its subsidiaries. 
  
 (o) Agreements. 
  
 Section 3(o) of the Disclosure Schedule sets forth an accurate and complete list of all contracts, indentures, leases, agreements and instruments that either obligate the Company to expend $50,000, have a term or remaining term, as
of the Balance Sheet Date of more than one (1) year or pertain to any telecommunications inter-carrier or inter-connection arrangement (each, a “Contract” and collectively, the “Contracts”), whether written or oral
(including any and all amendments, modifications, supplements and side letters with respect thereto) to which the Company or any of its subsidiaries is a party, or by which such Person or any of such Person’s respective assets are bound. All of
the Contracts are enforceable in all respects in accordance with their terms and neither the Company or any of its subsidiaries nor, to the best knowledge of the Company, any other party thereto, is in breach or in default under (and no event has
occurred which with notice or the passage of time or both would constitute a breach or default under) any such Contract. Except as set forth on Section 3(o) of the Disclosure Schedule, no Person has indicated that it may terminate or cancel
any Contract. Except as set forth on Section 3(o) hereto, no party to any Contract has any rights of setoff, bankers lien or similar rights with respect to any amounts due on any such Contract. Except as set forth on Section 3(o) of
the Disclosure Schedule, no Contract or Law restricts or inhibits in any way the Company’s or any subsidiary’s right or ability to conduct its business in the United States or any other jurisdiction in which it currently conducts or
proposes to conduct its business or to use any Intellectual Property Rights or other rights related to the conduct of such business. 
  
 (p) Compliance; Licenses and Permits. 
  
 To the best knowledge of the Company, the Company and each of its subsidiaries has complied in all material respects with, and, is not in violation in any
respect of, any Law or Permit applicable to the business of the Company or any of its subsidiaries as presently or previously conducted, or as currently proposed to be conducted. The Company and each of its subsidiaries has all licenses and permits
of all Governmental Authorities (collectively, “Permits”) which are required for the conduct of the business presently or previously conducted by the 
  

 12 

 Company or any of its subsidiaries, which Permits are in full force and effect, and no violations are outstanding or
uncured with respect to any such Permits and no Proceeding is pending or, to the best knowledge of the Company, threatened to revoke or limit any such Permits. To the best knowledge of the Company: (i) no condition or event has occurred which, with
notice or the passage of time or both, would constitute a violation of any Law or Permit; (ii) none of the Permits will be adversely impacted or affected by or as a result of the transactions contemplated hereby; and (iii) there is no proposed Law
which would prohibit or restrict the Company or any subsidiary from conducting the business as presently conducted, or as currently proposed to be conducted, or otherwise result in a Material Adverse Change. 
  
 (q) Labor Relations; Employees. 
  
 The Company’s and each of its subsidiaries’ employees as of the
date hereof are listed on Section 3(q) of the Disclosure Schedule. Except as set forth on Section 3(q) of the Disclosure Schedule, (i) neither the Company nor any of its subsidiaries is delinquent in payments to any of its employees
for any wages, salaries, commissions, bonuses or other direct compensation for any services performed by them prior to the Closing Date or amounts required to be reimbursed to such employees, (ii) there is no labor strike, dispute, slowdown or
stoppage actually pending or, to the best knowledge of the Company, threatened against or involving the Company or any of its subsidiaries and (iii) neither the Company nor any of its subsidiaries is a party to or bound by any collective bargaining
agreement and neither any grievance nor any arbitration proceeding arising out of or under any collective bargaining agreement is pending and no such claim has been asserted. 
  
 (r) Litigation. 
  
 Except as set forth on Section 3(r) of the Disclosure Schedule, there is no action, suit, customer claim, counterclaim, proceeding or investigation
at law or in equity or by or before any Governmental Authority or other agency (collectively, “Proceedings”) now pending or, to the best knowledge of the Company, threatened against or by the Company or any of its subsidiaries, or
affecting the Company or any of its subsidiaries or any of their respective assets or properties, nor, to the best knowledge of the Company, does there exist any basis for any such pending or threatened Proceeding. 
  
 (s) Tax Matters. 
  
 Except as set forth on Section 3(s) of the Disclosure Schedule, (i)
the Company and each of its subsidiaries has filed all Tax returns, declarations of estimated Tax, Tax reports, information returns and statements (collectively, the “Returns”) required to be filed by it prior to the Closing Date
(other than those for which extensions shall have been granted prior to the Closing Date) and Section 3(s) of the Disclosure Schedule lists each jurisdiction in which Returns are required to be filed and Taxes are required to be paid; (ii) as
of the time of filing, the Returns were true, complete and correct and the Company and each of its subsidiaries has paid all Taxes required to be paid, whether or not shown on the Returns to be due; (iii) the Company and each of its subsidiaries has
timely paid all Taxes payable for any period that ended on or before the Closing Date and for any period that began on or before the Closing Date and ends after the Closing Date and has fully accrued a liability for Taxes of such period to the
extent such 
  

 13 

 Taxes are attributable to income earned or accrued (or assets owned) in the portion of any such period ending on the
Closing Date; (iv) neither the Company nor any of its subsidiaries is delinquent in the payment of any Taxes, nor has the Company or any of its subsidiaries requested any extension of time within which to file any Return, which Return has not since
been filed; (v) there are no pending Tax audits of any Returns of the Company or any of its subsidiaries; (vi) no Encumbrance with respect to Taxes has been filed and no deficiency or addition to Taxes, interest or penalties for any Taxes with
respect to any income, properties or operations of the Company or any of its subsidiaries has been proposed, asserted or assessed against the Company or any of its subsidiaries; (vii) neither the Company nor any of its subsidiaries has been granted
any extension of the statute of limitations applicable to any Return or other Tax claim; (viii) neither the Company nor any of its subsidiaries has, since its inception, been a personal holding company within the meaning of Section 542 of the
Internal Revenue Code of 1986, as amended (the “Code”); (ix) neither the Company nor any of its subsidiaries has made any election under Section 341(f) of the Code ; (x) the Company has never been a “United States real property
holding corporation” as defined in Section 897(c)(2) of the Code and Section 1.897-2(b) of the Regulations promulgated thereunder; (xi) neither the Company nor any of its subsidiaries, nor any of their respective stockholders, has ever filed an
election pursuant to Section 1362 of the Code that the Company or such subsidiary be taxed as an S Corporation; and (xii) the Company, each of its subsidiaries, and each of their respective predecessors has complied with all applicable Laws relating
to the payment and withholding of Taxes, including sales and use Taxes, and has withheld and paid over all amounts required by Law to be withheld and paid from the wages or salaries of employees, and neither the Company nor any of its subsidiaries
is liable for any Taxes for failure to comply with such Laws. “Tax” means any of the Taxes and “Taxes” means, with respect to any Person, (A) all income Taxes (including any tax on or based upon net income, or gross
income, or income as specially defined, or earnings, or profits, or selected items of income, earnings or profits) and all gross receipts, sales, use, ad valorem, transfer, franchise, license, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property or windfall profits taxes, alternative or add-on minimum taxes, customs duties or other taxes, fees (including as a consequence of being a Competitive Local Exchange Carrier or otherwise), assessments or charges
of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing or other governmental authority or agency (domestic or foreign) on such Person and (B) any Liability for the payment
of any amount of the type described in the immediately preceding clause (A) as a result of (1) being a “transferee” (within the meaning of Section 6901 of the Code or any other applicable law) of another Person, (2) being a member of an
affiliated, combined, consolidated or unitary group or (3) any Contractual Liability. 
  
 (t) Customers and Suppliers. 
  
 (i) Section 3(t) of the Disclosure Schedule sets forth a correct and complete list of each of the top five (5) customers and top five (5) suppliers of the Company and its subsidiaries (on a consolidated basis)
who made purchases from or sales to the Company or any of its subsidiaries during the last two years and indicates with respect to each the nature of the relationship (including the principal categories of products or services bought or sold and the
annual dollar value of products or services bought or sold). Except as set forth in Section 3(t) of the Disclosure Schedule, neither the Company nor any of its subsidiaries is required to provide any material bonding or other financial
security arrangements in connection with any of its transactions with any such customer or supplier. 
  

 14 

 (ii) For the month ended December 31, 2003, the Company and its subsidiaries received
payment for subscription and other services rendered to its customers in the amount of $2,639,000, net of $470,000 in billing costs already deducted and paid by the Company’s third-party billing and collecting agent. At December 31, 2003, the
Company had approximately 739,000 paid subscribers. Since the Balance Sheet Date, and except for normal customer “churn” (i.e., addition of new customers and loss of existing customers) at rates consistent with the Company’s
historical experience, (A) no such customer or supplier has terminated its relationship with, or materially reduced its purchases from or sales to, the Company or any of its subsidiaries, and (B) to the best knowledge of the Company, no such
customer or supplier intends to terminate its relationship with, or materially reduce its purchases from or sales to, the Company or any of its subsidiaries. 
  
 (u) Related Party Transactions. 
  
 Except as set forth on Section 3(u) of the Disclosure Schedule, no current or former stockholder, director, officer or employee of the Company or
any of its subsidiaries, nor any “associate” (as defined in the rules and regulations promulgated under the Securities Act of 1933, as amended (the “Securities Act”), of the Company or any of its subsidiaries is presently,
or since the inception of the Company has been, directly or indirectly through his, her or its affiliation with any other Person, a party to any transaction with the Company or any of its subsidiaries, providing for the furnishing of services by or
to, or rental of real or personal property from or to, or otherwise requiring cash payments to or by any such Person (other than the payment of salaries and benefits to employees in the ordinary course of business). 
  
 (v) Offering Exemption. 
  
 Assuming the accuracy of the representations of the Investors in Section
4(a) of the Disclosure Schedule, the offering, sale, and issuance of the Company Shares, the Purchased Shares and the Reserved Shares are, or will be, exempt from registration under the Securities Act and the rules and regulations promulgated
thereunder, and such offering, sale and issuance is also exempt from registration under applicable state securities and “blue sky” laws. The Company has made or will make all requisite filings and has taken or will take all action
necessary to be taken to comply with such state securities or “blue sky” laws. 
  
 (w) Brokers. 
  
 Neither the Company nor any of its subsidiaries, nor any of the officers, directors, employees or stockholders of the Company or any of its subsidiaries, has employed any broker or finder in connection with the transactions contemplated by
this Agreement. 
  
 (x) Registration Rights.

  
 Except as set forth in the Amended and Restated Investor
Rights Agreement dated as of May 31, 2001 among the Company and the other parties thereto, as amended, modified or 
  

 15 

 supplemented from time to time, including but not limited, to the Investor Rights Amendment (the “Investor Rights
Agreement”) or on Section 3(x) of the Disclosure Schedule, no Person has any right to cause the Company or any of its subsidiaries to effect the registration under the Securities Act of any shares of Common Stock or any other
securities (including debt securities) of the Company or any of its subsidiaries. 
  
 (y) Disclosure. 
  
 To the best knowledge of the Company, none of the Documents or any other document provided to the Investors by the Company pursuant to the Documents contains any untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the circumstances under which they were made, not misleading as of the date thereof or the Closing Date. There is no fact known to the Company which materially adversely affects or in the future
may materially adversely affect the business, operations, affairs, prospects, condition, properties or assets of the Company. 
  
 (z) Use of Proceeds. 
  
 The Company shall exercise commercially reasonable efforts to repurchase a number of outstanding shares of Common Stock equal to the number of Company
Shares being sold pursuant to the terms of this Agreement (if any), and shall use the proceeds received by the Company from the sale of any such Company Shares to fund such repurchases. 
  
 Section 4. Representations of the Sellers. 
  
 Each Seller, severally and not jointly, represents to each Investor as follows: 
  
 (a) Authority, Enforceability.  
  
 Except as set forth on Section 4(a) to the Disclosure Schedule, such
Seller has the full and absolute power to sell the Purchased Common and the Purchased Preferred set forth opposite such Seller’s name on Annex II and to enter into each of the Documents to which it is a party as contemplated hereby, to
perform its obligations under each such Document, and to consummate the transactions contemplated by each such Document. The execution, delivery and performance by such Seller of each Document to which such Seller is a party and the consummation of
the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary action (corporate or otherwise) on the part of such Seller. Each Document to which such Seller is a party has been duly and validly executed and
delivered by such Seller and is a valid and binding obligations of such Seller, enforceable against such Seller in accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or other
similar laws affecting the enforcement of creditors’ rights generally and general equitable principles. 
  
 (b) No Violation, Etc.  
  
 Neither the execution, delivery and/or performance by the Seller of any of the Documents to which such Seller is a party, nor the consummation of the
transactions contemplated thereby, nor compliance by such Seller with any of the provisions thereof will (i) 
  

 16 

 conflict with or result in a breach of any provision of such Seller’s certificate or articles of incorporation,
operating agreement, partnership agreement, by-laws or other document or documents which governs the internal affairs of such Seller, if applicable, (ii) violate any Judgment or Law applicable to such Seller or the Purchased Shares owned by such
Seller, or (iii) conflict with or result in a default or breach of any provision of any Contract to which Stockholder is a party or by which its assets may be bound. Except as set forth on Section 4(b) of the Disclosure Schedule, no consent
of or filing with any Person is necessary for the consummation by such Seller of the transactions contemplated by this Agreement and the Documents. 
  
 (c) Ownership.  
  
 Except as set forth in Section 4(c) of the Disclosure Schedule, such Seller is the lawful owner, of record, of the Purchased Common and the
Purchased Preferred listed opposite such Seller’s name on Annex II and has good title to the Purchased Common and the Purchased Preferred, free and clear of any and all Encumbrances, except for Taxes not yet due and payable. Except as
set forth on Section 4(c) of the Disclosure Schedule, there are no outstanding options, warrants, rights, calls, agreements or commitments to which such Seller is a party with respect to any of the Purchased Common or the Purchased Preferred
listed opposite such Seller’s name on Annex II. Except as set forth on Section 4(c) of the Disclosure Schedule, there are no Contracts, commitments, agreements, understandings, arrangements or restrictions to which such Seller is
a party which relate to any of the Purchased Common or the Purchased Preferred listed opposite such Seller’s name on Annex II. 
  
 (d) Brokers or Finders. 
  
 No agent, broker, investment banker or other firm or Person is entitled to any broker’s or finder’s fee or any other commission or similar fee
from any Person in connection with any of the transactions contemplated by this Agreement. 
  
 Section 5. Representations of the Investors. 
  
 Each Investor, severally and not jointly, represents to the Company as follows: 
  
 (a) Investment Representations. 
  
 (i) Such Investor is acquiring the Company Shares and the Purchased Shares for its own account, for investment and not with a view to the
distribution thereof, nor with any present intention of distributing the same. 
  
 (ii) Such Investor understands that the Company Shares and the Purchased Shares have not been, and any shares of capital stock issuable
upon conversion of the Purchased Shares will not be, registered under the Securities Act, by reason of their issuance in a transaction exempt from the registration requirements of the Securities Act, and that they must be held indefinitely unless a
subsequent disposition thereof is registered under the Securities Act or is exempt from registration. 
  

 17 

 (iii) Such Investor understands that the exemption from registration afforded by Rule 144
(the provisions of which are known to such Investor) promulgated under the Securities Act depends on the satisfaction of various conditions and that, if applicable, Rule 144 may only afford the basis for sales under certain circumstances and only in
limited amounts. 
  
 (iv) Such Investor has had a
reasonable time prior to the date hereof to ask questions and receive answers concerning the terms and conditions of the offering of the Company Shares and the Purchased Shares, and to obtain any additional information which the Company and the
Sellers possess or could acquire without unreasonable effort or expense, and has generally such knowledge and experience in business and financial matters and with respect to investments in securities of privately held companies as to enable such
Investor to understand and evaluate the risks of such investment and form an investment decision with respect thereto. 
  
 (v) Such Investor is an “accredited investor,” as such term is defined in Rule 501 (the provisions of which are known to such
Investor) promulgated under the Securities Act. 
  
 (vi) Such Investor has all requisite power and authority to execute, deliver and perform the Documents and to consummate the transactions contemplated by the Documents, and each Document constitutes a valid and binding obligation of such
Investor, enforceable against such Investor in accordance with its terms. 
  
 (b) Brokers and Finders. 
  
 No Person acting on behalf or under the authority of such Investor is or will be entitled to any broker’s, finder’s, or similar fee or commission in connection with the transactions contemplated hereby. 
  
 Section 6. Prior or Simultaneous Actions. 
  
 The obligation of each of the Investors to purchase the Company Shares and
the Purchased Shares at the Closing is subject to the fulfillment, or the waiver by such Investor, of each of the following conditions on or the Closing: 
  
 (a) Accuracy of Representations and Warranties. 
  
 The representations and warranties of the Company and the Sellers contained in the Documents shall be true and correct in all material respects as of the
Closing Date, and the Investors shall have received a certificate of an officer of the Company to such effect on the Closing Date. 
  
 (b) Compliance with Covenants. 
  
 The Company shall have performed and complied in all material respects with all agreements and covenants contained in the Documents as of the date of the
Closing, and the Investors shall have received a certificate of an officer of the Company attesting as to such compliance. 
  

 18 

 (c) Due Diligence. 
  
 Prior to the Closing Date, the Investors shall have been satisfied in all respects with the results of their and their
advisors’ business, technology, legal, tax and accounting due diligence investigation of the Company and its subsidiaries. 
  
 (d) Articles of Incorporation. 
  
 The Articles of Incorporation have been filed with and accepted by the Secretary of State of the State of California and have become effective.

  
 (e) Stockholders’ Agreement. 
  
 The Stockholders’ Agreement has been executed and delivered by all
parties thereto and is in full force and effect. 
  
 (f)
Required Consents. 
  
 All consents, approvals and
other actions of, and notices and filings with, all Persons as may be necessary or required with respect to the execution and delivery by the parties of the Documents, and the consummation by the parties of the transactions contemplated thereby,
have been obtained or made including all filings, consents and approvals required under any state securities laws, and an authorized officer of the Company shall deliver a certificate to each Investor to such effect on the Closing Date. 

 
 (g) Authorizing Actions of the Company. 
  
 Prior to the Closing Date, the Investors shall have received certified
copies of all requisite corporate and stockholder actions taken by the Company to authorize the Company’s execution and delivery of the Documents to which it is a party and its consummation of the transactions contemplated thereby, and such
other documents and other instruments as the Investors or their counsel may reasonably request, including without limitation a copy of the Investor Rights Agreement certified to its authenticity by an officer of the Company. 
  
 (h) Opinion of Counsel. 
  
 The Investors shall have received an opinion dated as of the date hereof of
Reicker, Pfau, Pyle, McRoy & Herman, LLP, counsel to the Company in form and substance reasonably satisfactory to the Investors’ counsel. 
  
 (i) Stock Certificates. 
  
 On the date of the Closing, the Investors shall have received stock certificates evidencing their purchase of the Company Shares and the Purchased Shares.

  

 19 

 Section 7. [Intentionally Omitted]. 
  
 Section 8. Survival. 
  
 Irrespective of any investigation, inquiry or examination made by, for or on
behalf of any Investor, or the acceptance by any Investor of any certificate or opinion, the representations, warranties and covenants contained in the Documents shall survive for a period of eighteen months following the Closing Date;
provided, however, that the representations and warranties of the Company contained in Sections 3(a) and 3(c) through 3(f) shall survive the Closing Date until the expiration of the applicable statutes of
limitation. 
  
 Section 9. Fees and Expenses.

  
 (a) The Company shall pay, and hold the Investors and
their representatives harmless against all Liability for the payment of (i) up to $100,000 of the reasonable fees and expenses incurred by the Investors, including without limitation the reasonable fees and charges of O’Melveny & Myers,
LLP, counsel to the Investors, incurred in connection with the preparation, execution and delivery of the Documents and the consummation of the transactions contemplated thereby, which such amounts shall be paid in full at Closing, and (ii) $1,000
on behalf of the Investor, for each trip made to the Company’s office in Santa Barbara, California by Jerry Murdock, either as a result of a meeting of the board of directors or any committee thereof, or as a result of a written request of the
Company that such a visit be undertaken. 
  
 (b) Immediately
following the Closing, the Company shall pay the Investors for the fees and expenses incurred by the Investors (including the fees and expenses of the Investors’ legal counsel) in connection with the preparation, execution, and delivery of the
Documents and the consummation of the transactions contemplated thereby as provided in “(a)” above. 
  
 Section 10. Assignment; Parties in Interest. 
  
 This Agreement shall bind and inure to the benefit of the parties and each of their respective successors and permitted assigns. The Company may not
assign either this Agreement or any of its rights, interests, or obligations hereunder except to successors-in-interest of the Company’s business in a Sale of the Company. Any Investor may assign any of its rights hereunder to any transferee of
the Shares; provided, however, that the Investor has complied with any and all transfer restrictions under the Stockholders’ Agreement, and the transferee agrees to be bound by, and entitled to the benefits of, this Agreement as an
original party hereto. 
  
 Section 11. Entire Agreement;
Severability. 
  
 This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings among the parties with respect to such subject matter, including, without limitation, the Letter of Intent dated December
23, 2003 among the Company and Insight Venture Management, LLC. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the law and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, in the event that any provision of this Agreement would be 
  

 20 

 held in any jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be
more narrowly drawn so as not be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. 
  
 Section 12. Notices. 
  
 All notices,
claims, certificates, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or if sent by nationally-recognized overnight courier, by telecopy, or by registered
or certified mail, return receipt requested and postage prepaid, addressed as follows: 
  

					
	 if to the Company:

		
	 	  	 Callwave, Inc.

	 	  	 136 W. Canon Perdido Street

	 	  	 Santa Barbara, CA 93101-8207

	 	  	 Fax:
	  	 (805) 690-4211

	 	  	 Attention:
	  	 Mr. David Hofstatter

	 	  	 	  	 President and CEO

	
	 with a copy to:

		
	 	  	 Reicker, Pfau, Pyle, McRoy & Herman LLP

	 	  	 1421 State Street, Suite B

	 	  	 Santa Barbara, CA 93101

	 	  	 Fax:
	  	 (805) 966-3320

	 	  	 Telephone:
	  	 (805) 966-2440

	 	  	 Attention: Michael Pfau, Esq.

	
	 if to the Investors, to the address set forth on Annex I hereto;

  
 or to such other address as the party
to whom notice is to be given may have furnished to the other parties in writing in accordance herewith. Any such notice or communication shall be deemed to have been received (a) in the case of personal delivery, on the date of such delivery if a
business day or, if not a business day, the next succeeding business day, (b) in the case of nationally-recognized overnight courier, on the next business day after the date when sent, (c) in the case of telecopy transmission, when received if a
business day or, if not a business day, the next succeeding business day, and (d) in the case of mailing, on the third business day following that on which the piece of mail containing such communication is posted. 
  
 Section 13. Amendments; Waivers. 
  
 The terms and provisions of this Agreement may only be modified or amended
pursuant to an instrument signed by the Company and the holders of at least a majority of the Company Shares and the Purchased Shares; provided, however, that neither the Company nor the holders of a majority of the Company Shares and the
Purchased Shares may alter or amend the 
  

 21 

 terms and provisions of this Agreement in a manner that would adversely affect the rights of any Seller hereto without
the prior written consent of such Seller. Any waiver of any term or provision of this Agreement requested by any party hereto must be granted in advance, in writing, by the Company (if an Investor is requesting such waiver), by the Company and the
holders of a majority of the Company Shares and the Purchased Shares (if a Seller is requesting such waiver) or by the holders of at least a majority of all then outstanding Shares (if the Company is requesting such waiver), as the case may be;
provided, however, that neither the Company nor the holders of a majority of the Company Shares and the Purchased Shares may waive any term or provision of this Agreement, in a manner that would adversely affect the rights of any Seller
hereto, without the prior written consent of such Seller 
  
 Section 14. Counterparts. 
  
 This
Agreement may be executed in any number of original or facsimile counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. 
  
 Section 15. Headings. 
  
 The section and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 
  
 Section 16. Governing Law; Consent to Jurisdiction and Venue; Waiver of Jury Trial. 
  
 This Agreement shall be governed by and construed in accordance with the
laws of the State of California, without giving effect to any law or rule that would cause the laws of any jurisdiction other than the State of California to be applied. 
  
 ANY PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS AGREEMENT MAY BE BROUGHT AND ENFORCED IN THE SUPERIOR
COURT IN AND FOR THE COUNTY OF SANTA BARBARA, CALIFORNIA OR THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, TO THE EXTENT SUBJECT MATTER JURISDICTION EXISTS THEREFOR, AND THE PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF
BOTH SUCH COURTS IN RESPECT OF ANY SUCH PROCEEDING. EACH OF THE PARTIES IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING IN THE SUPERIOR COURT
IN AND FOR THE COUNTY OF SANTA BARBARA, CALIFORNIA OR THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN ANY INCONVENIENT FORUM. ANY JUDGMENT
MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. 
  

 22 

 EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT. 
  
 * * * *

  

 23 

 IN WITNESS WHEREOF, the parties have executed and delivered this Securities Purchase Agreement on
the date first above written. 
  

			
	COMPANY:
	
	CALLWAVE, INC.
		
	 By:
	 	     /s/    DAVE
HOFSTATTER        

	 	 	 Name:    Dave Hofstatter

	 	 	 Title:      CEO

	
	INVESTORS:
	
	INSIGHT VENTURE PARTNERS IV, L.P.
		
	 By:
	 	 Insight Venture Associates IV, L.L.C.

	 	 	 its General Partner

		
	 By:
	 	     /s/    JERRY
MURDOCK        

	 	 	 Name:

	 	 	 Title:

	
	INSIGHT VENTURE PARTNERS
	(CAYMAN) IV, L.P.
		
	 By:
	 	 Insight Venture Associates IV, L.L.C.

	 	 	 its Investment General Partner

		
	 By:
	 	     /s/    JERRY
MURDOCK        

	 	 	 Name:

	 	 	 Title:

			
	INSIGHT VENTURE PARTNERS IV
	(CO-INVESTORS), L.P.
		
	 By:
	 	 Insight Venture Associates IV, L.L.C.,

	 	 	 its General Partner

		
	 By:
	 	     /s/    JERRY
MURDOCK        

	 	 	 Name:

	 	 	 Title:

	
	INSIGHT VENTURE PARTNERS IV
	(FUND B), L.P.
		
	 By:
	 	 Insight Venture Associates IV, L.L.C.,

	 	 	 its General Partner

		
	 By:
	 	     /s/    JERRY
MURDOCK        

	 	 	 Name:

	 	 	 Title:

 IN WITNESS WHEREOF, the parties have executed and delivered this Securities Purchase Agreement on
the date first above written. 
  

			
	SELLERS:
	
	Delphi Ventures, LLC
		
	 By:
	 	     /s/    ROBERT
DOLAN        

	 	 	 Name: Robert Dolan

	 	 	 Title:

	
	     /s/    PETER V.
SPERLING        

	 Peter V. Sperling

	
	     /s/    STEPHANIE
SPERLING        

	 Stephanie Sperling

	
	     /s/    DAVID
HOFSTATTER        

	 David Hofstatter

	
	     /s/    DAVID
TRANDAL        

	 David Trandal

	
	     /s/    PALMER G. JACKSON,
JR.        

	 Palmer G. Jackson, Jr.

	
	Scott C. Brittingham, Living Trust
		
	 By:
	 	     /s/    SCOTT C. BRITTINGHAM, Living Trust

	 	 	 Name:

	 	 	 Title:

 ANNEX I 
  
 SECURITIES PURCHASED BY INVESTORS 
  

										
	 Investor

	 	(1)
Number of Company
Shares Purchased at
Closing

	 	 (2)
 Number of Purchased
Common Purchased
at Closing

	 	 (3)
 Number of
Purchased Preferred
at Closing

	 	 (4)
 Aggregate
Purchase Price

	 INSIGHT VENTURE PARTNERS IV, L.P.
 680 Fifth Avenue
 New York, New York 10019
 Telephone:
212-230-9200
 Facsimile: 212-230-9272
 Attn: George
McCulloch
	 	0	 	1,264,945.60	 	2,371,773.00	 	$	9,664,974.98
					
	 INSIGHT VENTURE PARTNERS
 (CAYMAN)
IV, L.P.
 680 Fifth Avenue
 New York, New York 10019

Telephone: 212-230-9200
 Facsimile: 212-230-9272
 Attn: George McCulloch
	 	0	 	169,112.80	 	317,086.50	 	$	1,292,127.49
					
	 INSIGHT VENTURE PARTNERS IV
 (CO-INVESTORS), L.P.
 680 Fifth Avenue New York,
 New
York 10019
 Telephone: 212-230-9200
 Facsimile:
212-230-9272
 Attn: George McCulloch
	 	0	 	155,890.40	 	292,294.50	 	$	1,191,100.09
					
	 INSIGHT VENTURE PARTNERS IV
 (Fund
B), L.P.
 680 Fifth Avenue
 New York, New York 10019

Telephone: 212-230-9200
 Facsimile: 212-230-9272
 Attn: George McCulloch
	 	0	 	10,051.20	 	18,846.00	 	$	76,797.44
					
	 in each case, with a copy to:
 O’MELVENY & MYERS LLP
 30 Rockefeller Plaza
 New York, New York 10112
 Telephone: 212-408-2400
 Facsimile: 212-408-2420
 Attn: Ilan S. Nissan, Esq.
	 	 	 	 	 	 	 	 	 

  

 ANNEX II 
  

LIST OF SELLERS AND SECURITIES SOLD 
  

										
	 Seller

	  	 Common Stock
 (Purchased Common)

	  	 Series E Preferred Stock
 (Purchased Preferred)

	  	Purchased Shares

	  	Aggregate Purchased
Shares Purchase Price

	 Delphi Ventures, LLC
	  	450,000	  	0	  	450,000	  	$	675,000.00
	 Peter V. & Stephanie Sperling
	  	300,000	  	2,974,465	  	3,274,465	  	$	10,190,734.50
	 David Hofstatter
	  	300,000	  	0	  	300,000	  	$	450,000.00
	 David Trandal
	  	550,000	  	0	  	550,000	  	$	825,000.00
	 Palmer G. Jackson, Jr.
	  	0	  	5,535	  	5,535	  	$	18,265.50
	 Scott C. Brittingham, Living Trust
	  	0	  	20,000	  	20,000	  	 	66,000.00

  

 INDEX OF SCHEDULES & EXHIBITS 
  

			
	 	 	 Annex

	 Annex I:
	 	Securities Purchased by Investors
	 Annex II:
	 	List of Sellers and Securities Sold
		
	 	 	 Exhibits

	 Exhibit A:
	 	Amended and Restated Articles of Incorporation
	 Exhibit B:
	 	Amended Bylaws
	 Exhibit C:
	 	Investor Rights Amendment
	 Exhibit D:
	 	Stockholders’ Agreement
	 Exhibit F:
	 	Disclosure Schedule

 EXHIBIT A 
  

Amended and Restated Articles of Incorporation 

 EXHIBIT B 
  

Amended Bylaws 

 EXHIBIT C 
  

Investor Rights Agreement 
  
 Incorporated by reference 
 to Exhibits 4.2 and
4.3 
 of this Registration Statement 

 EXHIBIT D 
  

Stockholders’ Agreement 
  
 Incorporated by reference 
 to Exhibit 10.2 to
this 
 Registration Statement 

 EXHIBIT E 
  

Form of Nondisclosure and Assignment of Inventions AgreementStandard industrial/Commercial Multi-Tenant Lease dated March 13, 2000

 Exhibit 10.4 
  
 [GRAPHIC APPEARS HERE] 
  
 STANDARD INDUSTRIAL/COMMERCIAL 
 MULTI-TENANT LEASE - GROSS 
 AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION 
  
 1. Basic Provisions (“Basic Provisions”). 
  
 1.1 Parties: This Lease (“Lease”), dated for
reference purposes only March 13, 2000, is made by and between Marc and Meryl A. Winnikoff, Trustees under the Marc & Meryl Winnikoff Living Trust dated July 11, 1997 (“Lessor”) and Callwave, Inc., a California Corporation
(“Lessee”), (collectively the “Parties”, or individually a “Party”). 
  
 1.2(a) Premises: That certain portion of the Project (as defined below), including all improvements therein or to be provided by Lessor under the
terms of this Lease, commonly known by the street address of 925 De La Vina, Ground floor, located in the City of Santa Barbara, County of Santa Barbara, State of California, with zip code
                    , as outlined on Exhibit A attached hereto (“Premises”) and generally described as (describe briefly the
nature of the Premises): Entire ground floor. 
  
 In addition to Lessee’s
rights to use and occupy the Premises as hereinafter specified, Lessee shall have non-exclusive rights to the Common Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any rights to the roof, exterior walls or
utility raceways of the building containing the Premises (“Building”) or to any other buildings in the Project. The Premises, the Building, the Common Areas, the land upon which they are located, along with all other buildings and
improvements thereon, are herein collectively referred to as the “Project.” (See also Paragraph 2.) 
  
 1.2(b) Parking:                     
unreserved vehicle parking spaces (“Unreserved Parking Spaces”); and 10 reserved vehicle parking spaces (“Reserved Parking Spaces”). (See also Paragraph 2.6.) 
  
 1.3 Term: 5 years years and
       months (“Original Term”) commencing May 15, 2000 (“Commencement Date”) and ending May 14, 2005 (“Expiration Date”). (See also Paragraph 3.) 
  
 1.4 Early Possession: Upon delivery of space to Lessee (“Early
Possession Date”). (See also Paragraphs 3.2 and 3.3.) 
  
 1.5 Base Rent: $ 7,440 per month (“Base Rent”), payable on the First day of each month commencing May 15, 2000. (See also Paragraph 4.) 
  
 x If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted.

  
 1.6 Lessee’s Share of Common Area Operating
Expenses: zero percent (0%) (“Lessee’s Share”). 
  
 1.7 Base Rent and Other Monies Paid Upon Execution: 
  
 (a) Base Rent: $ 14,880 for the period first month rent ($7,440) and towards last month rent ($7,440). 
  
 (c) Security Deposit: $ 44,640 (“Security Deposit”). (See also Paragraph 5.) 
  
 (e) Total Due Upon Execution of this Lease: $ 59,520. 
  
 1.8 Agreed Use: General office for customer support and software
development. (See also Paragraph 6.) 
  
 1.9 Insuring
Party. Lessor is the “Insuring Party”. (See also Paragraph 8.) 
  
 1.10 Real Estate Brokers: (See also Paragraph 15.) 
  
 (a) Representation: The following real estate brokers (the “Brokers”) and brokerage relationships exist in this transaction (check applicable boxes): 
  
  ̈
                                        
     represents Lessor exclusively (“Lessor’s Broker”); 
  
  ̈
                                     represents Lessee
exclusively (“Lessee’s Broker”); or 
  
 x Pacifica Commercial Realty 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). 
  
 1.12 Addenda and Exhibits. Attached hereto is an Addendum or Addenda consisting of Paragraphs 1, 2(b), 50 through 56 and Exhibits A through B, all of which constitute a part of this Lease. 
  
 2. Premises. 
  
 2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the
rental, and upon all of the terms, covenants and conditions set forth in this Lease. Unless otherwise provided herein, any statement of size set forth in this Lease, or that may have been used in calculating Rent, is an approximation which the
Parties agree is reasonable and any payments based thereon are not subject to revision whether or not the actual size is more or less. 
  
 2.2 Condition. Lessor shall deliver that portion of the Premises contained within the Building (“Unit”) 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, if any, and all other such elements
in the Unit, other than those constructed by Lessee, shall be in good operating condition on said date and that the structural elements of the roof, bearing walls and foundation of the Unit shall be free of material defects. If a non-compliance with
such 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 Unit. 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 repairs to the fire sprinkler systems, roof, foundations, and/or bearing walls - see Paragraph 7). 
  
 2.3 Compliance. Lessor warrants that the improvements on the Premises
and the Common Areas comply with the building codes that were in effect at the time that each such improvement, or portion thereof, was constructed, and also with all applicable laws, covenants or restrictions of record, regulations, and ordinances
in effect on the Start Date (“Applicable Requirements”). Said warranty does not apply to the use to which Lessee will put the Premises or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a).) made or to be
made by Lessee. NOTE: Lessee is responsible for determining whether or not the zoning is appropriate 
  

					
	 /s/    MW

	 	 	 	 /s/    RAD

	 /s/    MAW

	 	 	 	 [ILLEGIBLE]

	Initials	 	 	 	Initials

  

					
	 	 	PAGE 1	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

 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 selling 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 Unit, 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 the amount equal to 6 months’ Base Rent. If Lessee elects termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver
to Lessor written notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize the Premises without commencing such Capital
Expenditure. 
  
 (b) If such Capital Expenditure is not the result
of the specific and unique use of the Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor and Lessee shall allocate the obligation to pay for the portion of such costs reasonably attributable to the Premises
pursuant to the formula set out in Paragraph 7.1(d); provided, however, that if such Capital Expenditure is required during the last 2 years of this Lease or if Lessor reasonably determines that it is not economically feasible to pay its share
thereof, Lessor shall have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of 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 be fully responsible for the cost thereof, and Lessee shall not have any right to terminate this Lease. 
  
 2.4 Acknowledgements. Lessee acknowledges that: (a) it has been
advised by Lessor and/or Brokers to satisfy itself with respect to the condition of the Premises (including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable
Requirements and the Americans with Disabilities Act), and their suitability for Lessee’s intended use, (b) Lessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the
same relate to its occupancy of the Premises, and (c) neither Lessor, Lessor’s agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. In addition,
Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties concerning Lessee’s ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor’s sole responsibility to investigate the
financial capability and/or suitability of all proposed tenants. 
  
 2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior to the Start Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be
responsible for any necessary corrective work. 
  
 2.6 Vehicle
Parking. Lessee shall be entitled to use the number of Unreserved Parking Spaces and Reserved Parking Spaces specified in Paragraph 1.2(b) on those portions of the Common Areas designated from time to time by Lessor for parking. Lessee shall not
use more parking spaces than said number. Said parking spaces shall be used for parking by vehicles no larger than full-size passenger automobiles or pick-up trucks, herein called “Permitted Size Vehicles.” Lessor may regulate the
loading and unloading of vehicles by adopting Rules and Regulations as provided in Paragraph 2.9. No vehicles other than Permitted Size Vehicles may be parked in the Common Area without the prior written permission of Lessor. 
  
 (a) Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee’s employees, suppliers, shippers, customers, contractors or invitees to be loaded, unloaded, or parked in areas other than those designated by Lessor for such activities. 
  
 (b) Lessee shall not service or store any vehicles in the Common Areas.

  
 (c) If Lessee permits or allows any of the prohibited
activities described in this Paragraph 2.6, then Lessor shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Lessee, which cost shall
be immediately payable upon demand by Lessor. 
  
 2.7 Common
Areas - Definition. The term “Common Areas” is defined as all areas and facilities outside the Premises and within the exterior boundary line of the Project and interior utility raceways and installations within
the Unit that are provided and designated by the Lessor from time to time for the general non-exclusive use of Lessor, Lessee and other tenants of the Project and their respective employees, suppliers, shippers, customers, contractors and invitees,
including parking areas, loading and unloading areas, trash areas, roadways, walkways, driveways and landscaped areas. 
  
 2.8 Common Areas - Lessee’s Rights. Lessor grants to Lessee, for the benefit of Lessee and its employees, suppliers, shippers, contractors,
customers and invitees, during the term of this Lease, the non-exclusive right to use, in common with others entitled to such use, the Common Areas as they exist from time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or restrictions governing the use of the Project. Under no circumstances shall the right herein granted to use the Common Areas be deemed to include the right to store any
property, temporarily or permanently, in the Common Areas. Any such storage shall be permitted only by the prior written consent of Lessor or Lessor’s designated agent, which consent may be revoked at any time. In the event that any
unauthorized storage shall occur, then Lessor shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove the property and charge the cost to Lessee, which cost shall be immediately payable upon
demand by Lessor. 
  
 2.9 Common Areas - Rules and
Regulations. Lessor or such other person(s) as Lessor may appoint shall have the exclusive control and management of the Common Areas and shall have he right, from time to time, to establish, modify, amend and enforce reasonable rules and
regulations (“Rules and Regulations”) for the management, safety, care, and cleanliness of the grounds, the parking and unloading of vehicles and the preservation of good order, as well as for the convenience of other occupants or
tenants of the Building and the Project and their invitees. Lessee agrees to abide by and conform to all such Rules and Regulations, and to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessor
shall not be responsible to Lessee for the non-compliance with said Rules and Regulations by other tenants of the Project. 
  
 2.10 Common Areas - Changes. Lessor shall have the right, in Lessor’s sole discretion, from time to time: 
  
 (a) To make changes to the Common Areas, including, without limitation,
changes in the location, size, shape and number of driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility raceways; 
  
 (b) To close temporarily any of the Common Areas for maintenance purposes so
long as reasonable access to the Premises remains available; 
  
 (c) To designate other land outside the boundaries of the Project to be a part of the Common Areas; 
  
 (d) To add additional buildings and improvements to the Common Areas; 
  
 (e) To use the Common Areas while engaged in making additional improvements, repairs or alterations to the Project, or any
portion thereof; and 
  

					
	 /s/    MW

	 	 	 	 /s/    RAD

	 /s/    MAW

	 	 	 	

	Initials	 	 	 	Initials

  

					
	 	 	PAGE 2	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

 (f) To do and perform such other acts and make such other changes in, to or with respect to the Common
Areas and Project as Lessor may, in the exercise of sound business judgment, deem to be appropriate. 
  
 3. Term. 
  
 3.1
Term. The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3. 
  
 3.2 Early Possession. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent shall be
abated for the period of such early possession. All other terms of this Lease (including but not limited to the obligations to pay Lessee’s Share of Common Area Operating Expenses, Real Property Taxes and insurance premiums and to maintain the
Premises) shall, however, be in effect during such period. Any such early possession shall not affect the Expiration Date. 
  
 3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver possession as agreed, Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease. Lessee shall not, however, be obligated
to pay Rent or perform its other obligations until it receives possession of the Premises. If possession is not delivered within thirty (30) days after the Commencement Date, Lessee may, at its option, by notice in writing within 10 days after the
end of such thirty (30) day period, cancel this Lease, in which event the Parties shall be discharged from all obligations hereunder. If such written notice is not received by Lessor within said 10 day period, Lessee’s right to cancel shall
terminate. Except as otherwise provided, if possession is not tendered to Lessee by the Start Date and Lessee does not terminate this Lease, as aforesaid, 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 of the Premises is not delivered
within 4 months 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 tender possession of the Premises to Lessee until Lessee complies with its obligation to
provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor’s
election to withhold possession pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold
possession until such conditions are satisfied. 
  
 4.
Rent. 
  
 4.1. Rent Defined. All monetary
obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent (“Rent”). 
  
 4.3 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. 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. 
  
 5. Security Deposit. Lessee
shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee’s faithful performance of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply
or retain all or any portion of said Security Deposit for the payment of any amount due Lessor or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by reason thereof. 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 
  

					
	 /s/    MW

	 	 	 	 /s/    RAD

	 /s/    MAW

	 	 	 	

	Initials	 	 	 	Initials

  

					
	 	 	PAGE 3	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

 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 14 days after the expiration or termination of this Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and
otherwise within 30 days after the Premises have been vacated pursuant to Paragraph 7.4(c) below, Lessor shall return that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit shall be considered to be held
in trust, to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease. 
  
 6. Use. 
  
 6.1
Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which is reasonably comparable thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is
unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or properties. Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed
Use, so long as the same will not impair the structural integrity of the improvements 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, 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, lake 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 areas outside of the Project). Lessee’s obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of
investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from its
obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement. 
  
 (e) Lessor Indemnification. Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its employees and lenders,
harmless from and against any and all environmental damages, including the cost of remediation, which existed as a result of Hazardous Substances on the Premises prior to the Start Date 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 the Start Date, unless such remediation measure is required as a result of Lessee’s use (including “Alterations”, as defined in paragraph 7.3(a) below) of the Premises, in which event Lessee shall
be responsible for such payment. Lessee shall cooperate fully in any such activities at the request of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the Premises at reasonable times in order to carry out
Lessor’s investigative and remedial responsibilities. 
  
 (g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally responsible 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. 
  

					
	 /s/    MW

	 	 	 	 /s/    RAD

	 /s/    MAW

	 	 	 	

	Initials	 	 	 	Initials

  

					
	 	 	PAGE 4	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

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

  
 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, 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 contamination is found to exist or be imminent, or the inspection
is requested or ordered by a governmental authority. In such case, Lessee shall upon request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or contamination. 
  
 7. Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations.

  
 7.1 Lessee’s Obligations. 
  
 (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, and
Alterations in good order, and condition including lighting facilities, fixtures, but excluding any items which are the responsibility of Lessor pursuant to 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 to replace light bulbs at Lessee’s expense. 
  
 (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 reimburse Lessor for the cost thereof. 
  
 7.2 Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee’s Obligations), 9 (Damage or
Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition and repair the foundations, exterior walls, structural condition of interior bearing walls, exterior roof, fire
sprinkler system, Common Area fire alarm and/or smoke detection systems, fire hydrants, parking lots, walkways, parkways, driveways, landscaping, fences, plumbing, HVAC equipment, ceilings, all equipment, signs and utility systems serving the Common
Areas and all parts thereof, as well as providing the services for which there is a Common Area Operating Expense pursuant to Paragraph 4.2. Lessor shall not be obligated to paint the exterior or interior surfaces of exterior walls nor shall Lessor
be obligated to maintain, repair or replace windows, doors or plate glass of the Premises. Lessee expressly waives the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease. 
  
 7.3 Utility Installations; Trade Fixtures; Alterations. 
  
 (a) Definitions. The term “Utility Installations”
refers to all floor and window coverings, air lines, power panels, electrical distribution, security and fire protection systems, communication systems, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises. The term
“Trade Fixtures” shall mean Lessee’s machinery and equipment that can be removed without doing material damage to the Premises. The term “Alterations” shall mean any modification of the improvements, other than
Utility Installations or Trade Fixtures, whether by addition or deletion. “Lessee Owned Alterations and/or Utility Installations” are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by
Lessor pursuant to Paragraph 7.4(a). 
  
 (b) Consent.
Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor’s prior written consent. Lessee may, however, make non-structural Utility Installations to the interior of the Premises (excluding the roof) without
such consent but upon notice to Lessor, as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof or any existing walls, 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) Indemnification. 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 surely 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. 
  

					
	 /s/    MW

	 	 	 	 /s/    RAD

	 /s/    MAW

	 	 	 	

	Initials	 	 	 	Initials

  

					
	 	 	PAGE 5	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

 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 also completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or
any third party (except Hazardous Substances which were deposited via underground migration from areas outside of the Project) even if such removal would require Lessee to perform or pay for work that exceeds statutory requirements. Trade Fixtures
shall remain the property of Lessee and shall be removed by Lessee. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions
of Paragraph 26 below. 
  
 8. Insurance; Indemnity. 
  
 8.2 Liability Insurance. 
  
 (a) Carried by Lessee. Lessee shall obtain and keep in force a
Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of
the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000, an
“Additional Insured-Managers or Lessors of Premises Endorsement” and contain the “Amendment of the Pollution Exclusion Endorsement” for damage caused by heat, smoke or fumes from a hostile fire. The policy shall not contain any
intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an “insured contract” for the performance of Lessee’s indemnity obligations under this
Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. All insurance carried by Lessee shall be primary to and not contributory with any similar insurance carried by
Lessor, whose insurance shall be considered excess insurance only. 
  
 (b) Carried by Lessor. Lessor shall maintain liability insurance as described in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an
additional insured therein. 
  
 8.3 Property Insurance -
Building, Improvements and Rental Value. 
  
 (a) Building
and Improvements. Lessor shall obtain and keep in force a policy or policies of insurance in the name of Lessor, with loss payable to Lessor, any ground-lessor, and to any Lender insuring loss or damage to the Premises. The amount of such
insurance shall be equal to the full replacement cost of the Premises, as the same shall exist from time to time, or the amount required by any Lender, but in no event more than the commercially reasonable and available insurable value thereof.
Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee’s personal property shall be insured by Lessee under Paragraph 8.4. If the coverage is available and commercially appropriate, such policy or policies shall insure
against all risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a Lender), including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading,
demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and
inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the
Premises are located. If such insurance coverage has a deductible clause, the deductible amount shall not exceed $1,000 per occurrence. 
  
 (b) Rental Value. Lessor shall also obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and any
Lender, insuring the loss of the full Rent for one year with an extended period of indemnity for an additional 180 days (“Rental Value insurance”). Said insurance shall contain an agreed valuation provision in lieu of any
coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. 
  
 (c) Adjacent Premises. Lessee shall pay for any increase in the premiums for the property insurance of the
Building and for the Common Areas or other buildings in the Project if said increase is caused by Lessee’s acts, omissions, use or occupancy of the Premises. 
  
 (d) Lessee’s Improvements. Since Lessor is the Insuring Party, Lessor shall not be required to insure
Lessee Owned Alterations and Utility Installations unless the item in question has become the properly of Lessor under the terms of this Lease. 
  
 8.4 Lessee’s Property; Business Interruption Insurance. 
  
 (a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee’s personal
property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed $ 1,000 per occurrence. The proceeds from any such insurance shall be used by
Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee shall provide Lessor with written evidence that such insurance is in force. 
  
 (b) Business Interruption. Lessee shall obtain and maintain
loss of income and extra expense insurance in amounts as will reimburse Lessee for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to prevention of
access to the Premises as a result of such perils. 
  
 (c) No
Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee’s property, business operations or obligations under this Lease.

  

					
	 /s/    MW

	 	 	 	 /s/    RAD

	 /s/    MAW

	 	 	 	

	Initials	 	 	 	Initials

  

					
	 	 	PAGE 6	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

 8.5 Insurance Policies. Insurance required herein shall be by companies duly licensed or admitted
to transact business in the state where the Premises are located, and maintaining during the policy term a “General Policyholders Rating” of at least B+, V, as set forth in the most current issue of “Best’s Insurance Guide”,
or such other rating as may be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of such
insurance or certificates evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification except after 30 days prior written notice to Lessor. Lessee shall, at least 30 days prior to the
expiration of such policies, furnish Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or Lessor may order such insurance and charge the 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 from Liability. Lessor shall not be liable for injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee’s employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the Building, or from other sources or places. Lessor shall not be liable for
any damages arising from any act or neglect of any other tenant of Lessor nor from the failure of Lessor to enforce the provisions of any other lease in the Project. Notwithstanding Lessor’s negligence or breach of this Lease, Lessor shall
under no circumstances be liable for injury to Lessee’s business or for any loss of income or profit therefrom. 
  
 9. Damage or Destruction. 
  
 9.1 Definitions. 
  
 (a) “Premises Partial Damage” shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations
and Utility Installations, which can reasonably be repaired in 3 months or less from the date of the damage or destruction, and the cost thereof does not exceed a sum equal to 6 month’s Base Rent. Lessor shall notify Lessee in writing within 30
days from the date of the damage or destruction as to whether or not the damage is Partial or Total. 
  
 (b) “Premises Total Destruction” shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned
Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in 3 months or less from the date of the damage or destruction and/or the cost thereof exceeds a sum equal to 6 month’s Base Rent. Lessor shall notify
Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total. 
  
 (c) “Insured Loss” shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of any deductible amounts or coverage limits involved. 
  
 (d) “Replacement Cost” shall mean the cost to repair or
rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation. 
  
 (e) “Hazardous Substance
Condition” shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the Premises. 
  
 9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that
is an Insured Loss occurs, then Lessor shall, at Lessor’s expense, repair such damage (but not Lessee’s Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor’s election, make the repair of any damage or destruction the total cost to repair of which is $5,000 or less, and, in such event, Lessor shall make any applicable insurance
proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly
contribute the shortage in proceeds as and when required to complete said repairs. In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not
commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate
assurance thereof, within 10 days following receipt of written notice of such shortage and request 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 
  

					
	 /s/    MW

	 	 	 	 /s/    RAD

	 /s/    MAW

	 	 	 	

	Initials	 	 	 	Initials

  

					
	 	 	PAGE 7	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

 expires. If Lessee duly exercises such option during such period and provides Lessor with funds (or adequate assurance
thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor’s commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continue in full force and effect. If Lessee fails to
exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and Lessee’s option shall be extinguished. 
  
 9.6 Abatement of Rent; Lessee’s Remedies. 
  
 (a) Abatement. In the event of Premises Partial Damage or Premises
Total Destruction or a Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion to
the degree to which Lessee’s use of the Premises is impaired, but not to exceed the proceeds received from the Rental Value insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability
for any such damage, destruction, remediation, repair or restoration except as provided herein. 
  
 (b) Remedies. If Lessor shall be obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such
repair or restoration within 90 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.

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

  
 10. Real Property Taxes. 
  
 10.1 Definitions. 
  
 (a) “Real Property Taxes.” As used herein, the term
“Real Property Taxes” shall include any form of assessment, real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement bond; and/or license
fee imposed upon or levied against any legal or equitable interest of Lessor in the Project, Lessor’s right to other income therefrom, and/or Lessor’s business of leasing, by any authority having the direct or indirect power to tax and
where the funds are generated with reference to the Project address and, where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Project is located. The term “Real
Property Taxes” shall also include any tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership of the Project or
any portion thereof or a change in the improvements thereon. 
  
 (b) “Base Real Property Taxes.” As used herein, the term “Base Real Property Taxes” shall be the amount of Real Property Taxes, which are assessed against the Premises, Building, Project or Common Areas in
the calendar year during which the Lease is executed. In calculating Real Property Taxes for any calendar year, the Real Property Taxes for any real estate tax year shall be included in the calculation of Real Property Taxes for such calendar year
based upon the number of days which such calendar year and tax year have in common. 
  
 10.2 Payment of Taxes. Lessor shall pay the Real Property Taxes applicable to the Project, and except as otherwise provided in Paragraph 10.3, any increases in such amounts over the Base Real Property
Taxes shall be included in the calculation of Common Area Operating Expenses in accordance with the provisions of Paragraph 4.2. 
  
 10.3 Additional Improvements. Common Area Operating Expenses shall not include Real Property Taxes specified in the tax assessor’s records and
work sheets as being caused by additional improvements placed upon the Project by other lessees or by Lessor for the exclusive enjoyment of such other lessees. Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the time
Common Area Operating Expenses are payable under Paragraph 4.2, the entirety of any increase in Real Property Taxes if assessed solely by reason of Alterations, Trade Fixtures or Utility Installations placed upon the Premises by Lessee or at
Lessee’s request. 
  
 10.4 Joint Assessment. If the
Building is not separately assessed, Real Property Taxes allocated to the Building shall be an equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be
determined by Lessor from the respective valuations assigned in the assessor’s work sheets or such other information as may be reasonably available. Lessor’s reasonable determination thereof, in good faith, shall be conclusive. 

 
 10.5 Personal Property Taxes. Lessee shall pay prior to delinquency
all taxes assessed against and levied upon Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee contained in the Premises. When possible, Lessee shall cause its Lessee Owned
Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor. If any of Lessee’s said property shall be assessed with
Lessor’s real property, Lessee shall pay Lessor the taxes attributable to Lessee’s properly within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee’s property. 
  
 11. Utilities. 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. Notwithstanding the provisions of Paragraph 4.2, if at any time in Lessor’s sole judgment, Lessor determines that Lessee is using a
disproportionate amount of water, electricity or other commonly metered utilities, or that Lessee is generating such a large volume of trash as to require an increase in the size of the dumpster and/or an increase in the number of times per month
that the dumpster is emptied, then Lessor may increase Lessee’s Base Rent by an amount equal to such increased costs. 
  
 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) 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. 
  

					
	 /s/    MW

	 	 	 	 /s/    RAD

	 /s/    MAW

	 	 	 	

	Initials	 	 	 	Initials

  

					
	 	 	PAGE 8	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

 12.2 Terms and Conditions Applicable to Assignment and Subletting. 
  
 (a) Regardless of Lessor’s consent, any assignment or subletting shall
not: (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 therefore to Lessor, or any security held by Lessor. 
  
 (e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor’s determination as to
the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the intended use and/or required modification of the Premises, if any, together with a fee of $1,000 or 10% of the
current monthly Base Rent applicable to the portion of the Premises which is the subject of the proposed assignment or sublease, whichever is greater, 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. 
  
 (f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment or entering into such sublease, be deemed to have
assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease, other than such obligations as are contrary to or
inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing. 
  
 12.3 Additional Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein: 
  
 (a) Lessee hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent payable on any sublease, and Lessor may collect such Rent and
apply same toward Lessee’s obligations under this Lease; provided, however, that until a Breach shall occur in the performance of Lessee’s obligations, Lessee may collect said Rent. Lessor shall not, by reason of the foregoing or any
assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the 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 surely bond, or to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of 3
business days following written notice to Lessee. 
  
 (c) The
failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate, (v) a requested
subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 41 (easements), or (viii) any other documentation or information which Lessor may reasonably require of Lessee under the terms of
this Lease, where any such failure continues for a period of 10 days following written notice to Lessee. 
  
 (d) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 2.9 hereof, other than
those described in subparagraphs 13.1(a), (b) or (c), above, where such Default continues for a period of 30 days after written notice; provided, however, that if the nature of Lessee’s Default is such that more than 30 days are reasonably
required for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion. 
  
 (e) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit
of creditors; (ii) becoming a “debtor” as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in the event that any provision of this
subparagraph (e) is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions. 
  
 (f) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false. 
  
 (g) If the performance of Lessee’s obligations under this Lease is
guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor’s becoming insolvent or the subject of a
bankruptcy filing, (iv) a Guarantor’s 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. The costs and expenses of any such performance by Lessor shall be due and payable by Lessee upon receipt of invoice therefor. If any check given to Lessor
by Lessee shall not be honored by the bank upon which it is drawn, Lessor, at its option, may require all future payments to be made by Lessee to be by cashier’s check. In the event of a Breach, Lessor may, with or without further notice or
demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach: 
  

					
	 /s/    MW

	 	 	 	 /s/    RAD

	 /s/    MAW

	 	 	 	

	Initials	 	 	 	Initials

  

					
	 	 	PAGE 9	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

 (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 reletling, including necessary renovation and alteration of the Premises, reasonable attorneys’ fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to
the unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the
District within which the Premises are located at the time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee’s Breach of this Lease shall not waive Lessor’s right to recover damages under Paragraph 12. If
termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover
all or any part thereof in a separate suit. If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also
constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the
two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease and/or by said statute. 
  
 (b) Continue the Lease and Lessee’s right to possession and recover the Rent as it becomes due, in which event Lessee
may sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor’s interests, shall not constitute a termination of the Lessee’s right to
possession. 
  
 (c) Pursue any other remedy now or hereafter
available under the laws or judicial decisions of the state wherein the Premises are located. The expiration or termination of this Lease and/or the termination of Lessee’s right to possession shall not relieve Lessee from liability under any
indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee’s occupancy of the Premises. 
  
 13.3 Inducement Recapture. Any agreement for free or abated rent or other charges, or for the giving or paying by Lessor to or for Lessee of any
cash or other bonus, inducement or consideration for Lessee’s entering into this Lease, all of which concessions are hereinafter referred to as “Inducement Provisions”, shall be deemed conditioned upon Lessee’s full and
faithful performance of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any
rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under such an Inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach by
Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the
time of such acceptance. 
  
 13.4 Late Charges. Lessee
hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a one-time late charge equal to 10% of each such overdue amount or $100, whichever is greater. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of
such late payment. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee’s Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor’s option,
become due and payable quarterly in advance. 
  
 13.5
Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due as to scheduled payments (such as Base Rent) or within 30 days following the date on which it was due for non-scheduled payment,
shall bear interest from the date when due, as to scheduled payments, or the 31st day after it was due as to non-scheduled payments. The interest (“Interest”) charged shall be equal to the prime rate reported in the Wall Street
Journal as published closest prior to the date when due plus 4%, 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 an amount equal to the greater of one month’s Base Rent or the Security Deposit, and to pay an excess of such expense under protest, reserving Lessee’s right to reimbursement from Lessor. Lessee shall document the cost of said
cure and supply said documentation to Lessor. 
  
 14. Condemnation. If the
Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively “Condemnation”), this Lease shall terminate as to the part taken as of the date the
condemning authority takes title or possession, whichever first occurs. If more than 10% of the floor area of the Unit, or more than 25% of Lessee’s Reserved Parking Spaces, is taken by Condemnation, Lessee may, at Lessee’s option, to be
exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within 10 days after the condemning authority shall have taken possession) terminate this Lease as of the date
the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall
be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the
leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation for Lessee’s relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether
or not this Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee
shall be entitled to any and all compensation which is payable therefor. In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation. 
  
 15. Brokerage Fees. 
  

					
	 /s/    MW

	 	 	 	 /s/    RAD

	 /s/    MAW

	 	 	 	

	Initials	 	 	 	Initials

  

					
	 	 	PAGE 10	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

 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 1.10, 15, 22 and 31. If Lessor fails to pay to Brokers any amounts due as and for brokerage fees
pertaining to this Lease when due, then such amounts shall accrue Interest. In addition, if Lessor fails to pay any amounts to Lessee’s Broker when due, Lessee’s Broker may send written notice to Lessor and Lessee of such failure and if
Lessor fails to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and offset such amounts against Rent. In addition, Lessee’s Broker shall be deemed to be a third party beneficiary of any commission
agreement entered into by and/or between Lessor and Lessor’s Broker for the limited purpose of collecting any brokerage fee owed. 
  
 15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent and warrant to the other that it has had no dealings
with any person, firm, broker or finder (other than the Brokers, if any) in connection with this Lease, and that no one other than said named Brokers is entitled to any commission or finder’s fee in connection herewith. Lessee and Lessor do
each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of
the indemnifying Party, including any costs, expenses, attorneys’ fees reasonably incurred with respect thereto. 
  
 16. Estoppel Certificates. 
  
 (a) Each Party (as “Responding Party”) shall within 10 days after written notice from the other Party (the “Requesting
Party”) execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current “Estoppel Certificate” form published by the American Industrial Real Estate Association, plus
such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party. 
  
 (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may execute an
Estoppel Certificate stating that: (i) the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ii) there are no uncured defaults in the Requesting Party’s performance, and (iii) if
Lessor is the Requesting Party, not more than one month’s rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting Party’s Estoppel Certificate, and the Responding Party shall be estopped from
denying the truth of the facts contained in said Certificate. 
  
 (c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably
required by such lender or purchaser, including but not limited to Lessee’s financial statements for the past 3 years. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only
for the purposes herein set forth. 
  
 17. Definition of Lessor. The term
“Lessor” as used herein shall mean the owner or owners at the time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee’s interest in the prior lease. In the event of a transfer of
Lessor’s title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such transfer or assignment
and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the
obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined. Notwithstanding the above, and subject to the provisions of Paragraph 20 below, the original Lessor under this
Lease, and all subsequent holders of the Lessor’s interest in this Lease shall remain liable and responsible with regard to the potential duties and liabilities of Lessor pertaining to Hazardous Substances as outlined in Paragraph 6.2 above.

  
 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. Subject to the provisions of Paragraph 17
above, the obligations of Lessor under this Lease shall not constitute personal obligations of Lessor, the individual partners of Lessor or its or their individual partners, 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 the individual partners of Lessor, or its or their individual partners, directors, officers or
shareholders, or any of their personal assets for such satisfaction. 
  
 21.
Time of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease. 
  

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

 
 23. Notices. 
  
 23.1 Notice Requirements. All notices required or permitted by this Lease or applicable law shall be in
writing and may be delivered in person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given if
served in a manner specified in this Paragraph 23. The addresses noted adjacent to a Party’s signature on this Lease shall be that Party’s address for delivery or mailing of notices. Either Party may by written notice to the other specify
a different address for notice, except that upon Lessee’s taking possession of the Premises, the Premises shall constitute Lessee’s address for notice. A copy of all notices to Lessor shall be concurrently transmitted to such party or
parties at such addresses as Lessor may from time to time hereafter designate in writing. 
  
 23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the
postmark thereon. If sent by regular mail the notice shall be deemed given 48 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantee
next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt
(confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 
  
 24. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant or
condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition hereof. Lessor’s consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor’s consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of
this Lease requiring such consent. 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 monies or damages due Lessor, notwithstanding any qualifying
statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment.

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

					
	 /s/    MW

	 	 	 	 /s/    RAD

	 /s/    MAW

	 	 	 	

	Initials	 	 	 	Initials

  

					
	 	 	PAGE 11	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

 (i) Lessor’s Agent. A Lessor’s agent under a listing agreement with the Lessor acts as
the agent for the Lessor only. A Lessor’s agent or subagent has the following affirmative obligations: To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessor. To the Lessee and the
Lessor: a. Diligent exercise of reasonable skills and care in performance of the agent’s duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or
desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not
involve the affirmative duties set forth above. 
  
 (ii)
Lessee’s Agent. An agent can agree to act as agent for the Lessee only. In these situations, the agent is not the Lessor’s agent, even if by agreement the agent may receive compensation for services rendered, either in full or in
part from the Lessor. An agent acting only for a Lessee has the following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the
Lessor: a. Diligent exercise of reasonable skills and care in performance of the agent’s duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or
desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not
involve the affirmative duties set forth above. 
  
 (iii) Agent
Representing Both Lessor and Lessee. A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the knowledge and consent of
both the Lessor and the Lessee. In a dual agency situation, the agent has the following affirmative obligations to both the Lessor and the Lessee: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Lessor
or the Lessee. b. Other duties to the Lessor and the Lessee as stated above in subparagraphs (i) or (ii). In representing both Lessor and Lessee, the agent may not without the express permission of the respective Party, disclose to the other Party
that the Lessor will accept rent in an amount less than that indicated in the listing or that the Lessee is willing to pay a higher rent than that offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee
from the responsibility to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about
real estate. If legal or tax advice is desired, consult a competent professional. 
  
 (b) Brokers have no responsibility with respect to any default or breach hereof by either Party. The liability (including court costs and attorneys’ fees), of any Broker with respect to any breach of duty, error
or omission relating to this Lease shall not exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing limitation on each Broker’s liability shall not be applicable to any gross negligence or willful
misconduct of such Broker. 
  
 (c) Buyer and Seller agree to
identify to Brokers as “Confidential” any communication or information given Brokers that is considered by such Party to be confidential. 
  
 26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. In the
event that Lessee holds over, then the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by
Lessee. 
  
 27. Cumulative Remedies. No remedy or election hereunder shall
be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. 
  
 28. Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and conditions. In construing this Lease, all headings and titles
are for the convenience of the Parties only and shall not be considered a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be construed as if prepared by one of the
Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it. 
  
 29. Binding Effect; Choice of Law. This Lease shall be binding upon the parties, their personal representatives, successors and assigns and be governed by the laws of the State in which the Premises are
located. Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in which the Premises are located. 
  
 30. Subordination; Attornment; Non-Disturbance. 
  
 30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or
other hypothecation or security device (collectively, “Security Device”), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions thereof.
Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as “Lender”) shall have no liability or obligation to perform any of the obligations of Lessor under this Lease. Any Lender may elect to
have this Lease and/or any Option granted hereby superior to the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof. 
  
 30.2 Attornment. Subject to the non-disturbance provisions of Paragraph 30.3, Lessee agrees to attorn to a Lender or any other party who acquires ownership of the Premises by reason of a foreclosure of a Security Device, and that in
the event of such foreclosure, such new owner shall not: (a) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of ownership; (b) be subject to any offsets or defenses which Lessee might
have against any prior lessor, (c) be bound by prepayment of more than one month’s rent, or (d) be liable for the return of any security deposit paid to any prior lessor. 
  
 30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor after the execution of this Lease,
Lessee’s subordination of this Lease shall be subject to receiving a commercially reasonable non-disturbance agreement (a “Non-Disturbance Agreement”) from the Lender which Non-Disturbance Agreement provides that Lessee’s
possession of the Premises, and this Lease, including any options to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises. Further, within 60 days after the execution
of this Lease, Lessor shall use its commercially reasonable efforts to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event that 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 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. All such activities shall be without abatement of rent or liability to Lessee. Lessor may at any time place on the Premises any ordinary “For Sale” signs and
Lessor may during the last 6 months of the term hereof place on the Premises any ordinary “For Lease” signs. Lessee may at any time place on the Premises any ordinary “For Sublease” sign. 
  
 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. 
  

					
	 /s/    MW

	 	 	 	 /s/    RAD

	 /s/    MAW

	 	 	 	

	Initials	 	 	 	Initials

  

					
	 	 	PAGE 12	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

 34. Signs. Except for ordinary “For Sublease” signs which may be placed only on the Premises, Lessee
shall not place any sign upon the Project 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 American Industrial Real Estate Association, and each such Guarantor shall have the same obligations as Lessee under this Lease. 
  
 37.2 Default. It shall constitute a Default of the Lessee if any
Guarantor fails or refuses, upon request to provide: (a) evidence of the execution of the guaranty, including the authority of the party signing on Guarantor’s behalf to obligate Guarantor, and in the case of a corporate Guarantor, a certified
copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still in effect. 
  
 38. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all
of the covenants, conditions and provisions on Lessee’s part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof. 
  
 39. Options. If Lessee is granted an option, as defined below, then the following
provisions shall apply. 
  
 39.1 Definition. “Option”
shall mean: (a) the right to extend the term of or renew this Lease or to extend or renew any lease that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to lease either the Premises or other property of
Lessor; (c) the right to purchase or the right of first refusal to purchase the Premises or other property of Lessor. 
  
 39.2 Options Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal to the original Lessee, and 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, (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), (ii) Lessor gives to Lessee 3 or more notices of separate Default during any 12 month period, whether or not the Defaults are cured, or (iii) if Lessee
commits a Breach of this Lease. 
  
 40. Security Measures. Lessee hereby
acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection
of the Premises, Lessee, its agents and invitees and their property from the acts of third parties. 
  
 41. Reservations. Lessor reserves the right: (i) to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, (ii) to cause the recordation of parcel
maps and restrictions, and (iii) to create and/or install new utility raceways, so long as such easements, rights, dedications, maps, restrictions, and utility raceways do not unreasonably interfere with the use of the Premises by Lessee. Lessee
agrees to sign any documents reasonably requested by Lessor to effectuate such rights. 
  
 42. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is asserted
shall have the right to make payment “under protest” and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be
adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay. 
  
 43. Authority. 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. 
  
 44. Conflict. Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 
  
 45. Offer. Preparation of this Lease by either party or their agent and submission of
same to the other Party shall not be deemed an offer to lease to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto. 
  
 46. Amendments. This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. As
long as they do not materially change Lessee’s obligations hereunder, Lessee agrees to make such reasonable 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. 
  
 47. Multiple Parties. If more than one
person or entity is named herein as either Lessor or Lessee, such multiple Parties shall have joint and several responsibility to comply with the terms of this Lease. 
  
 48. Waiver of Jury Trial. The Parties hereby waive their respective rights to trial by jury in any action or proceeding involving the
Property or arising out of this Agreement. 
  
 49. Mediation and Arbitration of
Disputes. An Addendum requiring the Mediation and/or the Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease  ̈ is x not attached to this Lease. 
  
 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. 
  

					
	 /s/    MW

	 	 	 	 /s/    RAD

	 /s/    MAW

	 	 	 	

	Initials	 	 	 	Initials

  

					
	 	 	PAGE 13	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

 ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY
BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO: 
  
 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. 
  
 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE
OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY; THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE.

  
 WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN
PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED. 
  
 The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures. 
  

							
	 Executed at:
	 	  

	  	Executed at:	 	  

	 on:
	 	  

	  	on:	 	  

				
	 By LESSOR:
	 	 	  	By LESSEE:	 	 
		
	 Marc and Meryl A. Winnikoff
	  	 Call Wave, Inc.

	 Trustees under the Marc and Meryl Winnikoff
	  	 	 	 
	 Living Trust dated July 11, 1997
	  	 	 	 
				
	 By:
	 	  /s/ Marc Winnikoff

	  	By:	 	 /s/ Robert Dolan

	 Name Printed:
	 	 Marc Winnikoff
	  	Name Printed:	 	Robert Dolan
	 Title:
	 	 Trustee
	  	Title:	 	CEO
				
	 By:
	 	  /s/ Meryl A. Winnikoff

	  	By:	 	  

	 Name Printed:
	 	 Meryl A. Winnikoff
	  	Name Printed:	 	  

	 Title:
	 	 Trustee
	  	Title:	 	  

	 Address:
	 	 925 De La Vina St. Suite 103
	  	Address:	 	136 W. Canon Perdido St
	 	 	 Santa Barbara, CA 93101
	  	 	 	Santa Barbara CA 93101
				
	 Telephone:
	 	 (805) 965-5933
	  	Telephone:	 	(805) 690-4102
	 Facsimile:
	 	 (805) 965-6403
	  	Facsimile:	 	(805) 690-4292
	 Federal ID No.
	 	  

	  	Federal ID No.	 	  

  
  
 These forms are often modified to meet changing requirements of law and needs of the industry. Always write or call to make sure you are utilizing the most current
form: American Industrial Real Estate Association, 700 South Flower Street, Suite 600, Los Angeles, CA 90017. (213) 687-8777. 
  
 ©Copyright 1998-By American Industrial Real Estate Association. 
 All
rights reserved. 
 No part of these works may be reproduced in any form without permission in writing. 
  
  

					
	 	 	PAGE 14	 	 
	© 1998-American Industrial Real Estate Association	 	 	 	FORM MTG-2-11/98

 ADDENDUM TO STANDARD LEASE 
  

					
	DATED:	 	 	 	March 13, 2000
			
	BY AND BETWEEN:	 	(Lessor:)	 	Marc and Meryl A. Winnikoff, Trustees under Marc and Meryl Winnikoff Living Trust dated July 11, 1997.
			
	 	 	(Lessee:)	 	CallWave, Inc. a California Corporation
			
	PROPERTY ADDRESS:	 	 	 	 925 De La Vina Street, Ground Floor,
 Santa
Barbara

  
 Paragraph 1.2(b). Parking

  
 i. Parking. Lessee, for the use and benefit of Lessee, its
agents, employees, customers, licensees and sublessees shall have the exclusive use of ten (10) reserved parking spaces located at 920 St. Vincent Avenue during the entire term of this Lease, or any extension thereof. 
  
 ii. Rules and Regulations. The Lessee, in the use of said parking areas,
agrees to comply with such reasonable rules and regulations as the Lessor may adopt from time to time rules for the orderly and proper operation of said parking areas. Lessee shall not use any other parking spaces than the spaces designated by
Lessor. 
  
 iii. Unauthorized Parking. In the event that an
unrelated and unpermitted party parks in the Lessee’s designated spot(s) Lessee may at Lessee’s option enforce C.V.C. 22658A by calling the Santa Barbara Police Department at 805.897.2300 and have the vehicle(s) towed. In the event that
Lessee or its directors, officers, employees, contractors, invitees, customers, and/or any other persons and/or parties related to Lessee park in spaces other those designated for Lessee it is possible that their vehicle(s) may be towed pursuant to
C.V.C. 22658A. 
  
 iii. Lessor reserves the right to rearrange
designated parking places from time to time. Lessee shall be notified of such changes in a timely fashion. 
  
 Paragraph 50. RENT INCREASE BASED ON CPI INCREASE. 
  
 (a) On May 15, 2001 and every anniversary date thereafter the monthly rent payable under paragraph 1.5 (“Base Rent”) of the attached Lease 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 CPI U (All Urban Consumers), for L.A./Riverside/Orange County, All Items
(1982-1984=100), herein referred to as “C.P.I.” 
  
 (b)
The monthly rent payable in accordance with paragraph 49.1.(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
C.P.I. of the calendar month of March during the calendar year which the adjustment is to take effect, and the denominator of which shall be the C.P.I. of the calendar month of March 2000. 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 date for rent adjustment. 
  
 (c) In the event the compilation and/or publication of the C.P.I. 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 C.P.I. shall be used to make such calculation. In the event that Lessor and Lessee 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 Arbitrators shall be paid equally be Lessor and Lessee. 

 (d) There shall be a three (3%) percent minimum increase per year. 
  
 Paragraph 51. OPTION TO EXTEND. Lessor hereby grants to Lessee the
option to extend the term of this Lease for two (2) additional twenty-four (24) month periods commencing when the prior term expires upon each and all of the following terms and conditions: 
  
 (a) Lessee gives to Lessor, and Lessor actually receives on a date which is prior to the
date that the option period would commence (if exercised) by at least three (3) and not more than six (6) months, a written notice of the exercise of the option(s) to extend this Lease for said additional term(s), time being of essence. If said
notification of the exercise of said option(s) is (are) not so given and received, the option(s) shall automatically expire; said option(s) may (if more than one) only be exercised consecutively; 
  
 (b) The provisions of paragraph 39, including the provision relating to default of Lessee
set forth in paragraph 39.4 of this Lease are conditions of this Option; 
  
 (c)
All of the terms and conditions of this Lease except where specifically modified by this option shall apply; 
  
 (d) The monthly rent for each month of the option period shall be calculated as stated in Paragraph 50. 
  
 Paragraph 52. ACCEPTANCE OF PREMISES. 
  
 52.1 Lessee has inspected the premises and accepts the condition of the Premises AS-IS and WHERE-IS and pursuant to Paragraphs 2.2 and 2.4 and 52.2.

  
 52.2 Lessor shall do the following improvements at
Lessor’s expense: 
  
 1. Paint premises 
  
 2. Provide new office grade carpet . 
  
 3. Deliver the premises in good working order including all electrical,
lighting, plumbing and HVAC. 
  
 Paragraph 53. ADDITIONAL
PARKING LEASE. The Lessee has a separate lease with Aguadulce, Ltd. (Lessor) dated March 13, 2000 for ten (10) additional parking spaces. See attached Exhibit C, (additional parking lease). 
  
 Paragraph 54. LIMIT OF EMPLOYEES IN PREMISES. 
  
 54.1 The Lessee shall not be allowed to have more than twenty-four (24)
employees in the premises at any one time. In the event that the Lessee exceeds this limit then the Lessee will be in breach of this lease. 
  
 54.2 Lessor shall have the right to have the Lessee’s certified public accountant provide to Lessor a count of the number of employees. The Lessee
shall provide their accountants count to the Lessor within five (5) business days from Lessors written request. The Lessor shall not request more frequently than once every three (3) months. Lessor and/or Lessor’s accountant may audit these
employee counts and perform an independent count. 
  
 Paragraph 55.
LESSOR’S CA. REAL ESTATE LICENSEE DISCLOSURE. All parties acknowledge that Marc Winnikoff holds a California Real Estate License. 
  
 Paragraph 56. ACCESSIBILITY. 
  
 56.1 Lessee has entered into this Lease with the full knowledge that that the building at 925 De La Vina Street was originally constructed circa 1875 and
is a structure on the National Historic Register. The building has been updated and is accessible under the provisions of the renovation work performed circa 1980, however it is not in conformance with current ADA Standards or the California
Accessibility Standards. Lessee understands that in regards to 

 accessibility the existing building continues to operate in its present state under the provisions of Title III, Section
B of the ADA and Division IV, Section 1134B of the 1994 California Edition of the Uniform Building Code or the applicable provisions of any more recent Code. Lessee further acknowledges that it is Lessee’s responsibility as to how the current
accessibility status of the building may impact its own directors, officers, employees, contractors, invitees, customers, and/or any other persons and/or parties in or about the Premises. (Also see Paragraph 2.4) 
  
 56.2 In the event the existing building is altered by Lessee or Lessor, such work shall be in
conformance with the provisions of all applicable codes and acts in regards to accessibility as well as general building requirements (Also see paragraph 6.3). 
  

							
	 /s/    Marc Winnikoff
	 	 3/20/00
	 	 /s/    Robert A. Dolan
	 	3/17/00
	
	 	

	 LESSOR
	 	 Date
	 	 LESSEE
	 	 Date

				
	 /s/    Meryl A. Winnikoff
	 	 3/20/00
	 	 	 	 
	
	 	 

  

 RULES AND REGULATIONS FOR 
 STANDARD OFFICE LEASE 
  
 [GRAPHIC APPEARS HERE] 
  
 Dated:
March 13, 2000 
  

			
	 By and Between
	  	 Marc and Meryl A. Winnikoff, Trustees under the Marc & Meryl Winnikoff Living Trust dated

	 	  	 July 11, 1997 as Lessor and CallWave, Inc. a CA Corp. as Lessee.

  
 GENERAL RULES

  
 1. Lessee shall not suffer or permit the obstruction of any
Common Areas, Including driveways, walkways and stairways. 
  
 2.
Lessor reserves the right to refuse access to any persons Lessor in good faith judges to be a threat to the safety, reputation, or property of the Office Building Project and Its occupants. 
  
 3. Lessee shall not make or permit any noise or odors that annoy or Interfere
with other lessees or persons having business within the Office Building Project. 
  
 4. Lessee shall not keep animals or birds within the Office Building Project, and shall not bring bicycles, motorcycles or other vehicles into areas not designated as authorized for same. 
  
 5. Lessee shall not make, suffer or permit litter except in appropriate
receptacles lor that purpose. 
  
 6. Lessee shall not alter any
lock or install new or additional locks or bolts. 
  
 7. Lessee
shall be responsible for the inappropriate use of any toilet rooms, plumbing or other utilities. No foreign substances of any kind are to be inserted therein. 
  

8. Lessee shall not deface the walls, partitions or other surfaces of the premises or Office Building Project. 
  
 9. Lessee shall not suffer or permit any thing in or around the Premises or
Building that causes excessive vibration or floor loading in any part of the Office Building Project. 
  
 10. Furniture, significant freight and equipment shall be moved into or out of the building only with the Lessor’s knowledge and consent, and subject
to such reasonable limitations, techniques and timing, as may be designated by Lessor. Lessee shall be responsible for any damage to the Office Building Project arising from any such activity. 
  
 11. Lessee shall not employ any service or contractor for services or work to
be performed in the Building, except as approved by Lessor. 
  
 12. Lessor reserves the right to close and lock the Building on Saturdays, Sundays and legal holidays, and on other days between the hours of 6 P.M. and 8 A.M. of the following day. If Lessee uses the Premises during such periods, Lessee
shall be responsible for securely locking any doors it may have opened for entry. 
  
 13. Lessee shall return all keys at the termination of its tenancy and shall be responsible for the cost of replacing any keys that are lost. 
  
 14. No window coverings, shades or awnings shall be installed or used by Lessee. 
  
 15. No Lessee, employee or Invitee shall go upon the roof of the Building.

  
 16. Lessee shall not suffer or permit smoking or carrying of
lighted cigars or cigarettes in areas reasonably designated by Lessor or by applicable governmental agencies as non-smoking areas. 
  
 17. Lessee shall not use any method of heating or air conditioning other than as provided by Lessor. 
  
 18. Lessee shall not install, maintain or operate any vending machines upon
the Premises without Lessor’s written consent. 
  
 19. The
Premises shall not be used for lodging or manufacturing, cooking or food preparation. 
  
 20. Lessee shall comply with all safety, fire protection and evacuation regulations established by Lessor or any applicable governmental agency. 
  
 21. Lessor reserves the right to waive any one of these rules or regulations, and/or as to any particular Lessee, and any
such waiver shall not constitute a waiver of any other rule or regulation or any subsequent application thereof to such Lessee. 
  
 22. Lessee assumes all risks from theft or vandalism and agrees to keep Its Premises locked as may be required. 
  
 23. Lessor reserves the right to make such other reasonable rules and
regulations as It may from time to time deem necessary for the appropriate operation and safety of the Office Building Project and its occupants. Lessee agrees to abide by these and such rules and regulations. 
  
 PARKING RULES 
  
 1. Parking areas shall be used only for parking by vehicles no longer than
full size, passenger automobiles herein called “Permitted Size Vehicles”. Vehicles other than Permitted Size Vehicles are herein referred to as “Oversized Vehicles”. 
  
 2. Lessee shall not permit or allow any vehicles that belong to or are controlled by Lessee or Lessee’s employees,
suppliers, shippers, customers, or Invitees to be loaded, unloaded, or parked In areas other than those designated by Lessor for such activities. 
  
 3. Parking stickers or identification devices shall be the property of Lessor and be returned to Lessor by the holder thereof upon termination of the
holder’s parking privileges. Lessee will pay such replacement charge as is reasonably established by Lessor for the loss of such devices. 
  
 4. Lessor reserves the right to refuse the sale of monthly identification devices to any person or entity that willfully refuses to comply with the
applicable rules, regulations, laws and/or agreements. 
  
 5.
Lessor reserves the right to relocate all or a part of parking spaces from floor to floor, within one floor, and/or to reasonably adjacent offsite location(s), and to reasonably allocate them between compact and standard size spaces, as long as the
same complies with applicable laws, ordinances and regulations. 
  
 6. Users of the parking area will obey all posted signs and park only in the areas designated for vehicle parking. 
  
 7. Unless otherwise instructed, every person using the parking area is required to park and lock his own vehicle. Lessor will not be responsible for any
damage to vehicles injury to persons or loss of property, all of which risks are assumed by the party using the parking area. 
  
 8. Validation, if established, will be permissible only by such method or methods as Lessor and/or its licensee may establish at rates generally
applicable to visitor parking. 
  
 9. The maintenance, washing,
waxing or cleaning of vehicles in the parking structure or Common Areas is prohibited. 
  
 10. Lessee shall be responsible for seeing that all of its employees, agents and Invitees comply with the applicable parking rules, regulations, laws and agreements. 
  
 11. Lessor reserves the right to modify these rules and/or adopt such other
reasonable and non-discriminatory rules and regulations as it may deem necessary for the proper operation of the parking area. 
  
 12. Such parking use as is herein provided is intended merely as a license only and no bailment is intended or shall be created hereby. 
  

			
	 Initials:
	 	     MAW            RAD

	 	 	     MW

  
 FULL
SERVICE-GROSS 
  
 EXHIBIT B 
  

					
	PAGE 1 OF 1 PAGES
	© 1984 American Industrial Real Estate Association	 	 	 	 

 EXHIBIT A 
  

925 DE LA VINA STREET 
  
 [GRAPHIC APPEARS HERE] 
  
 Ground Floor Plan

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}]]