Document:

exv10wa

 

EXHIBIT 10.A

AMENDMENT TO

VIAD CORP

1997 OMNIBUS INCENTIVE PLAN

RESTRICTED STOCK AGREEMENT FOR EXECUTIVES

AS AMENDED FEBRUARY 23, 2005

     Employee, _________, and Viad Corp mutually agree to the following amendment
to the Restricted Stock Agreement for the award of restricted stock granted to Employee on February
22, 2006 (the “Agreement”). Unless otherwise defined herein, capitalized terms used herein will
have the same meanings as in the Agreement.

     1. Section 3(a) of the Agreement is amended by deleting the second paragraph in its entirety,
and replacing it with the following:

“If the Employee ceases to be an employee of the Corporation or any of its Affiliates by
reason of normal or early retirement, full ownership of the Shares will occur upon lapse of
the Restriction Period as set forth in paragraph 2 and dividends will be paid through such
period, in each case on a pro-rata basis, calculated based on the percentage of time such
Employee was employed by the Corporation or any of its Affiliates from the Commencement Date
through the date the Employee ceases to be an employee of the Corporation or any of its
Affiliates; provided, however, that full ownership of the Shares (versus pro rata ownership)
will occur upon lapse of such Restriction Period if the Employee has reached age 60 at the
time of retirement and such retirement is at least 2 years subsequent to the date of grant,
or such retirement is at least 6 months subsequent to the date of grant and Employee has
retired due to unforeseen hardship or circumstances beyond the control of Employee, as
reasonably determined by the Human Resources Committee of the Board, in its absolute
discretion.”

     2. This Amendment shall be effective as of March 28, 2006.

     3. Except as otherwise expressly modified or amended herein, all terms and conditions
contained in the Agreement will remain in full force and effect.

     IN WITNESS WHEREOF, the parties have caused this Amendment to the Agreement to be duly
executed.

	 	 	 	 	 
	Dated:                                         , 2006	 	VIAD CORP
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	ATTEST:
	 	 	 	 
	 
	 	 	 	 
	 

General Counsel or Assistant Secretary

	 	 	 	 
	 
	 	 	 	 
	 	 	ACCEPTED:
	 
	 	 	 	 
	 	 	 
	 	 	Employeeexv10wb

 

EXHIBIT 10.B

AMENDMENT TO

VIAD CORP

1997 OMNIBUS INCENTIVE PLAN

PERFORMANCE-BASED RESTRICTED STOCK AGREEMENT

AS AMENDED MARCH 29, 2005

     Employee, _________, and Viad Corp mutually agree to the following amendment to
the Performance-Based Restricted Stock Agreement for the award of performance-based restricted
stock granted to Employee on February 22, 2006 (the “Agreement”). Unless otherwise defined herein,
capitalized terms used herein will have the same meanings as in the Agreement.

     1. Section 3(a) of the Agreement is amended by deleting the third paragraph in its entirety,
and replacing it with the following:

“If the Employee ceases to be an employee of the Corporation or any of its Affiliates by
reason of normal or early retirement, full ownership of the Earned Shares will occur upon
lapse of the Restriction Period as set forth in paragraph 2 and dividends will be paid
through such period, in each case on a pro rata basis, calculated based on the percentage of
time Employee was employed by the Corporation or any of its Affiliates from the Commencement
Date through the date the Employee was employed during the year in which the award was
granted; provided, however, that full ownership of the Shares (versus pro rata ownership)
will occur upon lapse of such Restriction Period if the Employee has reached age 60 at the
time of retirement and such retirement is at least 2 years subsequent to the date of grant,
or such retirement is at least 6 months subsequent to the date of grant and Employee has
retired due to unforeseen hardship or circumstances beyond the control of Employee, as
reasonably determined by the Human Resources Committee of the Board, in its absolute
discretion.”

     2. This Amendment shall be effective as of March 28, 2006.

     3. Except as otherwise expressly modified or amended herein, all terms and conditions
contained in the Agreement will remain in full force and effect.

     IN WITNESS WHEREOF, the parties have caused this Amendment to the Agreement to be duly
executed.

	 	 	 	 	 
	Dated:                                          , 2006	 	VIAD CORP
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	ATTEST:
	 	 	 	 
	 
	 	 	 	 
	 

General Counsel or Assistant Secretary

	 	 	 	 
	 
	 	 	 	 
	 	 	ACCEPTED:
	 
	 	 	 	 
	 	 	 
	 	 	Employeeexv10wc

 

EXHIBIT 10.C

AMENDMENT TO

VIAD CORP

1997 OMNIBUS INCENTIVE PLAN

RESTRICTED STOCK AGREEMENT FOR DIRECTORS

AS ADOPTED FEBRUARY 23, 2005

          Director, ___, and Viad Corp mutually agree to the following amendment to
the Restricted Stock Agreement for the award of restricted stock granted to Director on February
22, 2006 (the “Agreement”). Unless otherwise defined herein, capitalized terms used herein will
have the same meanings as in the Agreement.

          1. Section 3(a) of the Agreement is amended by deleting it in its entirety, and replacing it
with the following:

“(a) Termination of Service. Except as provided in this paragraph 3 and in paragraph
8 below or as otherwise may be determined by the Board in its absolute discretion on a case by
case basis, if the Director’s service ceases with the Corporation for any reason (other than
termination for Cause, as defined in the Plan), full ownership of the Shares will occur upon
lapse of the Restriction Period as set forth in paragraph 2 and dividends will be paid through
such period, in each case on a pro rata basis, calculated based on the percentage of time such
Director served as a director of the Corporation from the Commencement Date through the date
such Director ceases to be a director of the Corporation; provided, however, that full
ownership of the shares (versus pro rata ownership) will occur upon lapse of the Restriction
Period if the Director has reached age 60 at the time of service termination and such
termination of service is at least 2 years subsequent to the date of grant; the director has
reached age 65 at the time service terminates and such termination of service is at least 6
months subsequent to the date of grant; or such termination of service is at least 6 months
subsequent to the date of grant and Director has terminated service due to unforeseen hardship
or circumstances beyond the control of Director, as reasonably determined by the Human
Resources Committee of the Board, in its absolute discretion.”

          2. This Amendment shall be effective as of March 28, 2006.

          3. Except as otherwise expressly modified or amended herein, all terms and conditions
contained in the Agreement will remain in full force and effect.

          IN WITNESS WHEREOF, the parties have caused this Amendment to the Agreement to be duly
executed.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dated:	 	 	 	, 2006	 	 	 	 	 	VIAD CORP
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	General Counsel or Assistant Secretary	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	ACCEPTED:
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Directorexv10w1

 

EXHIBIT 10.1

1. Basic Provisions (“Basic Provisions”).

     1.1 Parties: This Lease (“Lease”), dated for reference purposes only November 14, 2005, is made by and between
Phoenix Investors #9, L.L.C., an Arizona limited liability company (“Lessor” ) and Circuit Research Labs, Inc.
(“Lessee” ), (collectively the “Parties,” or individually a “Party” ).

     1.2 Premises: That certain real property, including all improvements therein or to
be provided by Lessor under the terms of this Lease, and commonly known as 7970 South Kyrene Road, Tempe,
located in the County of Maricopa, State of Arizona, and generally described as
(describe briefly the nature of the property and, if applicable, the “Project” , if the
property is located within a Project) an approximate 36,300 square foot
office/industrial building with 85 car parking (Exhibit “A” attached) (“Premises”). (See also Paragraph 2)

     1.3 Term: 5 years and No months (“Original Term” )
commencing February 1, 2006 (“Commencement Date”) and ending January 31, 2011 (“Expiration Date”). (See also Paragraph 3)

     1.4 Early Possession: January 16, 2006 or upon move out by the current tenant
(Prolink)

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

     1.5 Base Rent: $23,595.00 (see paragraph 51.) per month (“Base Rent”),
payable on the First day of each month commencing February 1, 2006.
(See also Paragraph 4)

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

     1.6 Base Rent and Other Monies Paid Upon Execution:

               (a) Base Rent: $23,595.00 for the period February 1 — 28, 2006

               (b) Security Deposit: $26,500.00 (“Security Deposit”). (See also Paragraph 5)

               (c) Association Fees: $*5,973.06 for the period February 1, 2006
to February 28, 2006

               (d) Other: $680.07 for February 2006 rental tax (2.3%) *see
Exhibit “C”

               (e) Total Due Upon Execution of this Lease: $56,748.13

     1.7 Agreed Use: Office, manufacturing, engineering, test and design of
electronic components, circuit boards and general office. (See also Paragraph 6)

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

     1.9 Real Estate Brokers: (See also Paragraph 15)

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

þ Lee & Associates Arizona (Dave Johnson & Jerry Marrell) represents Lessor exclusively (“Lessor’s Broker”);

þ GVA Daum Commercial Brokerage (Mike Wallis) represents Lessee exclusively (“Lessee’s Broker”); or

o 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 Broker the fee agreed to in their separate written agreement (or
if there is no such agreement, the sum of or six (6) % of the total Base
Rent) for the brokerage services rendered by the Brokers.

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

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

þ an Addendum consisting of Paragraphs 51 through 55;

þ a plot plan depicting the Premises;

o a current set of the Rules and Regulations;

o a Work Letter;

o other (specify): See Exhibit “A” and “B”

2. Premises.

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

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

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 1 of 17

 

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

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

               (b) If such Capital Expenditure is not the result of the specific and unique use of
the Premises by Lessee (such as, governmentally mandated seismic modifications), then
Lessor and Lessee shall allocate the obligation to pay for such costs pursuant to the
provisions of Paragraph 7.1 (d); provided, however, that if such Capital Expenditure is
required during the last 2 years of this Lease or if Lessor reasonably determines that
it is not economically feasible to pay its share thereof, Lessor shall have the option
to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee
notifies Lessor, in writing, within 10 days after receipt of Lessor’s termination notice
that Lessee will pay for such Capital Expenditure. If Lessor does not elect to
terminate, and fails to tender its share of any such Capital Expenditure, Lessee may
advance such funds and deduct same, with Interest, from Rent until Lessor’s share of
such costs have been fully paid. If Lessee is unable to finance Lessor’s share, or if
the balance of the Rent due and payable for the remainder of this Lease is not
sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to
terminate this Lease upon 30 days written notice to Lessor.

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

     2.4 Acknowledgements. Lessee acknowledges that: (a) it has been 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 therefore as the same relate to its occupancy of the Premises, and
(c) neither Lessor, Lessor’s agents, nor Brokers have made any oral or written
representations or warranties with respect to said matters other than as set forth in
this Lease. In addition, Lessor acknowledges that: (i) Brokers have made no
representations, promises or warranties concerning Lessee’s ability to honor the Lease
or suitability to occupy the Premises, and (ii) it is Lessor’s sole responsibility to
investigate the financial capability and/or suitability of all proposed tenants.

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

3. Term.

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

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

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

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

4. Rent.

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

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 2 of 17

 

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

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

     4.4 Rental Taxes. In addition to Base Rent and Common Area Operating Expenses,
Lessee shall pay to Lessor each month an
amount equal to any rental taxes, gross receipts taxes, transaction privilege
taxes, sales taxes, or similar taxes (“Rental Taxes”) levied on the Base
Rent then due or otherwise assessed in connection with the rental activity. Said
monies shall be paid at the same time and in the same manner as the
Base Rent.

5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security
Deposit as security for Lessee’s faithful performance of its obligations under this
Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may
use, apply or retain all or any portion of said Security Deposit for the payment of any
amount due Lessor or to reimburse or compensate Lessor for any liability, expense, loss
or damage which Lessor may suffer or incur by reason thereof. If Lessor uses or applies
all or any portion of the Security Deposit, Lessee shall within 10 days after written
request therefore deposit monies with Lessor sufficient to restore said Security Deposit
to the full amount required by this Lease. If the Base Rent increases during the term of
this Lease, Lessee shall, upon written request from Lessor, deposit additional moneys
with Lessor so that the total amount of the Security Deposit shall at all times bear the
same proportion to the increased Base Rent as the initial Security Deposit bore to the
initial Base Rent. Should the Agreed Use be amended to accommodate a material change in
the business of Lessee or to accommodate a 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. Other than guide, signal and seeing eye dogs, Lessee
shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles.
Lessor shall not unreasonably withhold or delay its consent to any
written request for a modification of the Agreed Use, so long as the same will not
impair the structural integrity of the improvements on the Premises or
the mechanical or electrical systems therein, and/or is not significantly more
burdensome to the Premises. If Lessor elects to withhold consent, Lessor
shall within 7 days after such request give written notification of same, which notice
shall include an explanation of Lessor’s objections to the change in
the Agreed Use.

     6.2 Hazardous Substances.

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

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

               (c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to
be spilled or released in, on, under, or about the Premises (including through the
plumbing or sanitary sewer system) and shall promptly, at Lessee’s expense, comply with
all Applicable Requirements and take all 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.

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 3 of 17

 

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

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

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

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

     6.3 Lessee’s Compliance with Applicable Requirements. Except as otherwise provided
in this Lease, Lessee shall, at Lessee’s sole expense, fully, diligently and in a timely
manner, materially comply with all Applicable Requirements, the requirements of any
applicable fire insurance underwriter or rating bureau, and the recommendations of
Lessor’s engineers and/or consultants which relate in any manner to the such
Requirements, without regard to whether such Requirements are now in effect or become
effective after the Start Date. Lessee shall, within 10 days after receipt of Lessor’’s
written request, provide Lessor with copies of all permits and other documents, and
other information evidencing Lessee’s compliance with any Applicable Requirements
specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with
copies of any documents involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving the failure of Lessee or the
Premises to comply with any Applicable Requirements. Likewise, Lessee shall immediately
give written notice to Lessor of: (i) any water damage to the Premises and any suspected
seepage, pooling, dampness or other condition conducive to the production of mold; or
(ii) any mustiness or other odors that might indicate the presence of mold in the
Premises.

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

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

     7.1 Lessee’s Obligations.

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

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

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 4 of 17

 

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

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

     7.2 Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition),
2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by the
Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and
maintain the Premises, or the equipment therein, all of which obligations are intended
to be that of the Lessee. It is the intention of the Parties that the terms of this
Lease govern the respective obligations of the Parties as to maintenance and repair of
the Premises, and they expressly waive the benefit of any statute now or hereafter in
effect to the extent it is inconsistent with the terms of this Lease.

     7.3 Utility Installations; Trade Fixtures; Alterations.

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

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

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

     7.4 Ownership; Removal; Surrender; and Restoration.

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

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

               (c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration
Date or any earlier termination date, with all of the improvements, parts and surfaces
thereof broom clean and free of debris, and in good operating order, condition and state
of repair, ordinary wear and tear excepted. “Ordinary wear and tear” shall not include
any damage or deterioration that would have been prevented by good maintenance practice.
Notwithstanding the foregoing, if this Lease is for 12 months or less, then Lessee shall
surrender the Premises in the same condition as delivered to Lessee on the Start Date
with NO allowance for ordinary wear and tear. Lessee shall repair any damage occasioned
by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations
and/or Utility Installations, furnishings, and equipment as well as the removal of any
storage tank installed by or for Lessee. Lessee shall 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 Premises, or if applicable, 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. Any personal property of Lessee not removed on or before the Expiration Date or
any earlier termination date shall be deemed to have been abandoned by Lessee and may be
disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely
vacate the Premises pursuant to this Paragraph 7.4(c) without the express written
consent of Lessor shall constitute a holdover under the provisions of Paragraph 26
below.

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 5 of 17

 

8. Insurance; Indemnity.

               8.1 Payment For Insurance. Lessee shall pay for all insurance required under
Paragraph 8 except to the extent of the cost attributable to liability insurance carried
by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per occurrence. Premiums for
policy periods commencing prior to or extending beyond the Lease term shall be prorated
to correspond to the Lease term. Lessor may bill Lessee for such premiums at the time
that they are incurred or Lessor may elect to estimate the amount of the premiums which
will be incurred during the coming year and require that 1/12th of such amount be paid
each month by Lessee on the same day that the Base Rent is due. If at the end of such
year the payments by Lessee exceed the actual premiums incurred by Lessor then Lessor
shall credit the amount of such over-payment against the premiums next becoming due. If
Lessee’s payments were less than the actual premiums incurred then Lessor shall bill
Lessee for such shortfall. Payment shall be made by Lessee to Lessor within 10 days
following receipt of an invoice. Advance payments may be intermingled with other monies
of Lessor and shall not bear interest. In the event of a Breach by Lessee then any such
advance payments may be treated as an additional Security Deposit.

     8.2 Liability Insurance.

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

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

     8.3 Property Insurance — Building, Improvements and Rental Value.

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

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

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

     8.4 Lessee’s Property; Business Interruption Insurance.

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

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

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

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

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 6 of 17

 

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

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

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

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

9. Damage or Destruction.

     9.1 Definitions.

               (a) “Premises Partial Damage” shall mean damage or destruction to the improvements
on the Premises, other than Lessee Owned Alterations and Utility Installations, which
can reasonably be repaired in 6 months or less from the date of the damage or
destruction. Lessor shall notify Lessee in writing within 30 days from the date of the
damage or destruction as to whether or not the damage is Partial or Total.
Notwithstanding the foregoing, Premises Partial Damage shall not include damage to
windows, doors, and/or other similar items which Lessee has the responsibility to repair
or replace pursuant to the provisions of Paragraph 7.1.

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

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

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

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

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

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 7 of 17

 

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

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

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

     9.6 Abatement of Rent; Lessee’s Remedies.

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

               (b) Remedies. If Lessor 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, including but not limited to ARS §33-343, to the extent inconsistent herewith.

10. Real Property Taxes.

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

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

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

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 8 of 17

 

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

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

12. Assignment and Subletting.

     12.1 Lessor’s Consent Required.

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

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

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

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

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

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

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

     12.2 Terms and Conditions Applicable to Assignment and Subletting.

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

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

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

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

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

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

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

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

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

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 9 of 17

 

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

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

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

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

13. Default; Breach; Remedies.

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

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

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

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

               (d) The failure by Lessee to provide (i) reasonable written evidence of compliance
with Applicable Requirements, (ii) the service
contracts, (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, (viii)
material safety data sheets (MSDS), or (ix) any other documentation or information which
Lessor may reasonably require of Lessee under the terms of this Lease, where any such
failure continues for a period of 10 days following written notice to Lessee.

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

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

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

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

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

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

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 10 of 17

 

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

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

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

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

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

     13.6 Breach by Lessor.

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

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

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

15. Brokerage Fees.

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

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

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 11 of 17

 

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

16. Estoppel Certificates.

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

               (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.

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

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

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

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

22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements
between the Parties with respect to any matter mentioned herein, and no other prior or
contemporaneous agreement or understanding shall be effective. Lessor and Lessee each
represents and warrants to the Brokers that it has made, and is relying solely upon, its
own investigation as to the nature, quality, character and financial responsibility of
the other Party to this Lease and as to the use, nature, quality and character of the
Premises. Brokers have no responsibility with respect thereto or with respect to any
default or breach hereof by either Party. 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 72 hours after the same is addressed as required herein and
mailed with postage prepaid. Notices delivered by United States Express Mail or
overnight courier that guarantee next day delivery shall be deemed given 24 hours after
delivery of the same to the Postal Service or courier. Notices transmitted by facsimile
transmission or similar means shall be deemed delivered upon telephone confirmation of
receipt (confirmation report from fax machine is sufficient), provided a copy is also
delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal
holiday, it shall be deemed received on the next business day.

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

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

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

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 12 of 17

 

               (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 and a duty to protect and promote the Lessor’s
interests. To the Lessee and Other Parties: A duty to deal fairly with the Lessee
and other parties to the transactions. To All Parties. A duty to disclose
in writing any information known to the agent materially affecting the
consideration to be paid by any Party or the value or desirability of the property. 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 and a duty to protect and promote the Lessee’s
interests. To the Lessor and Other Parties : A duty to deal fairly with the Lessor
and other parties to the transaction. To All Parties. A duty to disclose in
writing any information known to the agent materially affecting the consideration
to be paid by any Party or the value or desirability of the property. 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 and a
duty to protect and promote the interest of both Parties in the dealings with either
Lessor or the Lessee. b. Other duties to the Lessor and the Lessee as stated above in
subparagraphs (i) or (ii). In representing both Lessor and Lessee, the agent may not
without the express permission of the respective Party, disclose to the other Party that
the Lessor will accept rent in an amount less than that indicated in the listing or that
the Lessee is willing to pay a higher rent than that offered. The above duties of the
agent in a real estate transaction do not relieve a Lessor or Lessee from the
responsibility to protect their own interests. Lessor and Lessee should carefully read
all agreements to assure that they adequately express their understanding of the
transaction. A real estate agent is a person qualified to advise about real estate. If
legal or tax advice is desired, consult a competent professional.

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

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

26. No Right To Holdover. Lessee has no right to retain possession of the Premises or
any part thereof beyond the expiration or termination of this Lease. In the event that
Lessee holds over, then the Base Rent shall be increased to 150%125% of the Base Rent
applicable immediately preceding the expiration or termination. Nothing contained herein
shall be construed as consent by Lessor to any holding over by Lessee.

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

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

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

30. Subordination; Attornment; Non-Disturbance.

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

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

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

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 13 of 17

 

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

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

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

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

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

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

37. Guarantor.

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

     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 or completion of the purchase, (i) Lessee fails to pay
Rent for a period of 30 days after such Rent becomes due (without any necessity of
Lessor to give notice thereof), or (ii) if Lessee commits a Breach of this Lease.

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

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 14 of 17

 

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

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

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

44. Authority; Multiple Parties; Execution.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 15 of 17

 

Note: If either Party to this Lease is a married individual, both spouses may need to
execute this Lease in order to bind the marital community.

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:
	Phoenix Investors #9, L.L.C.	 	Circuit Research Labs, Inc.
	an Arizona limited liability company	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	Name Printed:

	 	Carl J. Greenwood
	 	Name Printed:
	 	Charles Jayson Brentlinger
	Title:

	 	Manager
	 	Title:
	 	President and CEO
	By:

	 	 	 	By:	 	 
	Name Printed:

	 	 	 	Name Printed:	 	 
	Title:

	 	 	 	Title:	 	 
	Address:

	 	440 West 1st Street #201
	 	Address:
	 	1302 W. Drivers Way
	 

	 	Tustin, CA 92780
	 	 	 	Tempe, AZ 85284
	Telephone:	 	(714) 544-4000
	 	Telephone:
	 	(480) 403-8300
	Facsimile:

	 	(714) 544-2420
	 	Facsimile:
	 	(  )
	Federal ID No.

	 	 	 	Federal ID No.	 	 

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 16 of 17

 

	 	 	 	 	 	 	 
	LESSOR’S BROKER:	 	LESSEE’S BROKER:
	Lee & Associates Arizona	 	GVA Daum Commercial
	 
	 	 	 	 	 	 
	Attn:

	 	David T. Johnson
	 	Attn:
	 	Mike Wallis
	Title:

	 	Principal
	 	Title:
	 	Vice President
	Address:

	 	3200 E. Camelback Road, #100
	 	Address:
	 	1702 E. Highland, #120
	 

	 	Phoenix, AZ 85018
	 	 	 	Phoenix, AZ 85016
	Telephone:

	 	(602) 956-7777
	 	Telephone:
	 	(602) 957-7300
	Facsimile:

	 	(602) 954-0510
	 	Facsimile:
	 	(602) 266-5011
	Federal ID No.

	 	 	 	Federal ID No.	 	 

NOTE: These forms are often modified to meet the changing requirements of law and
industry needs. Always write or call to make sure you are utilizing the most current
form: AIR COMMERCIAL REAL ESTATE ASSOCIATION, 700 So. Flower Street, Suite 600, Los
Angeles, California 90017. (213) 687-8777. Fax No. (213) 687-8616

© Copyright 2001 — By AIR Commercial Real Estate Association. All rights
reserved. No part of these works may be reproduced in any form without permission in
writing.

			
	 	 	 
	INITIALS
	 	INITIALS
	 	 	 
	©2001 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM STN-8-12/04E

Page 17 of 17

 

Exhibit 10.1

			
	
	 	

ADDENDUM

Date: November 14, 2005

	 	 	 	 	 
	51.

	 	Rental Schedule:
	 	Year 1 — $23,595.00/month, triple net ($.65/SF)
	 

	 	 	 	Year 2 — $24,321.00/month, triple net
	 

	 	 	 	($.67/SF) Year 3 — $25,047.00/month,
	 

	 	 	 	triple net ($.69/SF) Year 4 -
	 

	 	 	 	$25,773.00/month, triple net ($.71/SF)
	 

	 	 	 	Year 5 — $26,499.00/month, triple net
	 

	 	 	 	($.73/SF)
	 
	 	 	 	 
	 

	 	 	 	Plus rental sales tax of 2.3%, which is subject to change.
	 
	 	 	 	 
	52.

	 	Tenant Improvement Allowance:
	 	As a condition of the lease, the tenant is
granted a tenant improvement allowance of One Hundred Eighty One Thousand Five
Hundred and No/100 Dollars ($181,500.00). This amount shall be distributed by the
Lessor upon the successful installation of the improvements to the building,
approved, in writing, by the Lessor prior to any construction taking place. All of
the tenant improvements shall be installed by licensed and bonded contractors after
receipt of a building permit from the City of Tempe. The distribution of funds
shall occur within fifteen (15) days following receipt of invoices following
completion of construction and approved by Lessor.
	 
	 	 	 	 
	53.

	 	Option to Renew:
	 	The Lessor shall have the option to renew this lease for a
second five year term at a market rate. This option shall be extinguished in the
event that the Lessee is in default or failed to cure a default in the initial five
year term.
	 
	 	 	 	 
	54.

	 	Option to Purchase:
	 	See attached.
	 
	 	 	 	 
	55.

	 	Cancellation Option:
	 	In the event that the Lessor cannot deliver early
occupancy of the premises on or before January 16, 2006, the Lessee may, at its
option, cancel this lease by so notifying Lessor in writing of its intent to invoke
this cancellation provision. This provision shall expire on January 31, 2006 or
upon occupancy by Circuit Research Labs, Inc. and shall be of no further effect,
with the lease remaining in full force for the entire term. If the cancellation
option should be invoked, the Lessor shall return any and all advance deposits to
the Lessee, including Base Rent, Association Fees and “other” fees as described in
paragraph 1.6 of this lease and received by Lessor and neither Lessor nor Lessee
shall have any further commitment, responsibility, or obligation to the other.

PAGE 1 OF 1

			
	INITIALS
	 	INITIALS

 

 

			
	
	 	

AIR COMMERCIAL REAL ESTATE ASSOCIATION

OPTION TO PURCHASE

Standard Lease Addendum

	 	 	 
	Dated November 14, 2005
	 	 
	By and Between (Lessor)

	 	Phoenix Investors #9, L.L.C.
	 

	 	an Arizona limited liability company
	 
	 	 
	(Lessee)

	 	Circuit Research Labs, Inc.
	 
	 	 
	Address of Premises:

	 	7970 South Kyrene Road

Tempe, Arizona

Paragraph 54.

     (a)     Lessor hereby grants to Lessee an option to purchase the Premises upon
the terms and conditions herein set forth.

     (b)     In order to exercise this option to purchase, Lessee must give written notice
of the exercise of the option to Lessor during the period from September 1, 2008 to
January 31, 2010 (the “Option Period” ), time being of the essence.

     If such notice is not so given, this option shall automatically expire. At the same
time the option is exercised, Lessee must deliver to Lessor a cashier’s check in the
amount of Fifty Thousand and No/100 Dollars payable to Lawyers Title/Land America, to be
part of the purchase price.

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

     (d)     If Lessee elects to exercise this option to purchase as provided above, the
transfer of title to Lessee shall occur on the close of escrow on and until that time
the terms of this Lease shall remain in full force and effect.

     (e)     If Lessee elects to exercise this option to purchase, the purchase price to be
paid by Lessee shall be $3,600,000.00 Three Million Six Hundred Thousand Dollars

     (f)     Within 10 days after this option to purchase is exercised, Lessor and Lessee
shall give instructions to consummate the sale to Lawyers Title/Land America, Marie
Volm, Escrow Officer , located at 7025 North Scottsdale Road, Suite 105, Scottsdale, AZ
85253 , who shall act as escrow holder, on the normal and usual escrow forms then used
by such escrow holder, as follows:

          (i)     Escrow shall close 40 or no sooner than 180 days after the exercise
of the option to purchase by Lessee;

          (ii)     Lessor shall deposit the check referred to in paragraph (b) into escrow upon
opening thereof, with the balance of the purchase price to be deposited into escrow no
later then 2:00 P.M. on the last business day prior to the expected closing date;

          (iii)     The parties agree to execute any additional instructions as are normal and
usual;

          (iv)     The balance of the terms and conditions of sale shall be as set forth in the
AIR Commercial Real Estate Association “STANDARD OFFER, AGREEMENT AND ESCROW
INSTRUCTIONS FOR THE PURCHASE OF REAL ESTATE”, a copy of which is attached hereto,
except for the following: Lessor shall prepare a Purchase and Sale Agreement for
the Lessee’s review upon receipt of notice that this Option to Purchase has been
exercised by Lessee.

and paragraphs 4.2; 5; 6; 9.1 a,b,c,d,e,h,i,j, and k; and 20, which do not apply.

     (g)     Either Lessor or Lessee shall, upon request of the other, execute, acknowledge
and deliver to the other a short form memorandum of this Lease for recording purposes.
The Party requesting recordation shall be responsible for payment of any fees applicable
thereto.

     (h)     In the event that this option to purchase is not exercised by Lessee in a
timely fashion, the Lessee shall, upon request of Lessor, execute, acknowledge and
deliver to Lessor a quit claim deed releasing Lessee’s interest in such option. Lessor
shall be responsible for the preparation of such deed and the payment of any fees
applicable to the recording thereof.

WARNING:

     1. LESSEE SHOULD NOT EXERCISE THIS OPTION UNTIL LESSEE HAS COMPLETED SUCH
INVESTIGATION AS MAY BE APPROPRIATE, OBTAINED ANY NECESSARY FINANCING, AND IS OTHERWISE
IN A POSITION TO COMPLETE SUCH PURCHASE.

     2. IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN ARIZONA, CERTAIN PROVISIONS OF
THE STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR THE PURCHASE OF REAL ESTATE
MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS
LOCATED.

PAGE 1 OF 1

			
	INITIALS
	 	INITIALS
	©2000 — AIR COMMERCIAL REAL ESTATE ASSOCIATION	 	FORM OP-4-8/00E

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}]]