Document:

exv10w14

 

Exhibit
10.14

STANDARD MULTI-TENANT OFFICE LEASE — GROSS

AIR COMMERCIAL REAL ESTATE ASSOCIATION

1. Basic Provisions (“Basic Provisions”).

     1.1 Parties: This Lease (“Lease”), dated for reference purposes only February 15, 2008,
is made by and between Beretta Investment Group, a general partnership (“Lessor”) and Energy Recovery, Inc.,
a Delaware Corporation (“Lessee”), (collectively the “Parties”, or individually a “Party”).

     1.2(a) Premises: That certain portion of the Project (as defined below), known as Suite Numbers(s) 220,
2nd floor(s), consisting of approximately 5,713 rentable square feet and approximately 5,713
useable square feet (“Premises”). The Premises are located at: 433 Hegenberger
Road, in the City of Oakland, County of Alameda, State of California, with zip code 94621.
In addition to Lessee’s rights to use and occupy the
Premises as hereinafter specified, Lessee shall have non-exclusive rights to the Common Areas (as
defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any rights to the
roof, the exterior walls, the area above the dropped ceilings, or the utility raceways of the
building containing the Premises (“Building”) or to any other buildings in the Project. The
Premises, the Building, the Common Areas, the land upon which they are located, along with all
other buildings and improvements thereon, are herein collectively referred to as the“Project.”
The Project consists of approximately 44,470 rentable square feet. (See also Paragraph 2)

     1.2(b) Parking: 3/1000 unreserved and -0- reserved vehicle parking spaces at a monthly cost of
$0.00 per unreserved space and $N/A per reserved space. (See Paragraph 2.6)

     1.3 Term: 2 years and 0 months (“Original Term”)
commencing April 1, 2008 (“Commencement Date”) and ending March 31, 2010
(“Expiration Date”). (See also Paragraph 3)

     1.4 Early Possession: Upon Completion of Interior Improvements (“Early Possession Date”).
(See also Paragraphs 3.2 and 3.3)

     1.5 Base Rent: $9,140.00 per month (“Base Rent)”, payable on the first day of each month
commencing April 1, 2008. (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 Lessee’s
Share of Operating Expense Increase: based upon 5,713 rsf percent
(               
 
                
                
  %) (“Lessee’s Share”). Lessee’s Share has been calculated by dividing the approximate rentable
square footage of the Premises by the total approximate square footage of the rentable space contained in the
Project and shall not be subject to revision except in connection with an actual change in the
size of the Premises or a change in the space available for lease in the Project.

     1.7 Base Rent and Other Monies Paid Upon Execution:

	 	(a)	 	Base Rent: $9,140.00 for the period 4/01/08 — 4/31/08.
	 
	 	(b)	 	Security Deposit: $9000.00 (“Security Deposit”). (See also Paragraph 5)
	 
	 	(c)	 	Parking: $Not applicable for the period Not applicable.
	 
	 	(d)	 	Other: $__________________ for
____________________________________.
	 
	 	(e)	 	Total Due Upon Execution of this Lease: $18,140.00.

     1.8 Agreed Use: General office use (non-medical/dental; no retail). (See also Paragraph 6)

     1.9 Base Year; Insuring Party. The Base Year is 2008. Lessor is the “Insuring Party”. (See also Paragraphs 4.2 and 8)

     1.10 Real Estate Brokers: (See also Paragraph 15)

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

þ   Colliers International represents Lessor exclusively (“Lessor’s Broker”);

þ   Lee & Associates 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 Brokers the brokerage
fee agreed to in a separate written agreement (or if there is no such agreement, the sum of ________________________
 or _________%
of the total Base Rent for the brokerage services rendered by the Brokers).

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

     1.12 Business Hours for the Building: 7:00 a.m. to 7:00 p.m., Mondays through Fridays (except Building Holidays) and
None a.m. to None p.m. on Saturdays (except Building Holidays). “Building Holidays” shall mean the
dates of observation of New
Year’s Day, President’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and

	 	 	 	 	 
	 
 

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as determined by Lessor.

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

þ   Janitorial services

o   Electricity

o   Other (specify):
_________________________________________________________________________________________________

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

þ   an Addendum consisting of Paragraphs 1 through 2;

þ   a plot plan depicting the Premises;

þ   a current set of the Rules and Regulations;

o   a Work Letter;

o   a janitorial schedule;

o   
other (specify): _________________________________________________________________________________________________
____________________________________________________________________________________________________.

2. Premises.

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

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

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

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

      
    (b) If such Capital Expenditure is not the result of the
specific and unique use of the
Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor and Lessee
shall allocate the cost of such Capital Expenditure as follows: Lessor shall advance the funds
necessary for such Capital Expenditure but Lessee shall be obligated to pay, each month during the
remainder of the term of this Lease, on the date on which Base Rent is due, an amount equal to the
product of multiplying Lessee’s share of the cost of such Capital Expenditure (the percentage
specified in Paragraph 1.6 by a fraction, the numerator of which is one, and the denominators of
which is 144 (i.e. 1/144th of the cost per month). Lessee shall pay interest on the unamortized
balance Lessee’s share at a rate that is commerically reasonable in the judgement of Lessor’s accountants. Lesssee may,
however, prepay its obligation at any time. Provided, however, that if such Capital Expenditure is required during the last 2 years
of this Lease or if Lessor reasonably determines that it is not economically feasible to pay its share therof, Lessor shall have the option
to terminate this Lease upon 90 days prior written notice to Lesssee 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 reminder of this Lease is not sufficient to fully reimburse Lessee on an
offset basis, Lessee shall have the right to terminate
this Lease upon 30 days written notice to Lessor.

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

     2.4 Acknowledgements. Lessee acknowledges that: (a) Lessee has been advised by Lessor and/or
Brokers to satisfy itself with respect to the condition of the Premises (including but not limited
to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and
compliance with Applicable Requirements), and their suitability for Lessee’s intended use, (b)
Lessee has made such investigation as it deems necessary with reference to such matters and
assumes all responsibility therefor as the same relate to its occupancy of the Premises, and (c)
neither Lessor, Lessor’s agents, nor Brokers have made any oral or written representations or
warranties with respect to said matters other than as set forth in this Lease. In addition, Lessor
acknowledges that: (i) Brokers have made no representations, promises or warranties concerning
Lessee’s ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor’s
sole responsibility to investigate the financial capability and/or suitability of all proposed
tenants.

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

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

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

          (b) The monthly rent per parking space specified in Paragraph 1.2(b) is subject to change
upon 30 days prior written notice to Lessee. The rent for the parking is payable one month in
advance prior to the first day of each calendar month.

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

     2.8 Common Areas — Lessee’s Rights. Lessor grants to Lessee, for the benefit of Lessee and its
employees, suppliers, shippers, contractors, customers and invitees, during the term of this Lease,
the nonexclusive right to use, in common with others entitled to such use, the Common Areas as they
exist from time to time, subject to any rights, powers, and privileges reserved by Lessor under the
terms hereof or under the terms of any rules and regulations or restrictions governing the use of
the Project. Under no circumstances shall the right herein granted to use the Common Areas be
deemed to include the right to store any property, temporarily or permanently, in the Common Areas.
Any such storage shall be

	 	 	 	 	 
	 
 

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permitted only by the prior written consent of Lessor or Lessor’s designated agent, which consent
may be revoked at any time. In the event that any unauthorized storage shall occur then Lessor
shall have the right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Lessee, which cost shall be immediately
payable upon demand by Lessor.

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

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

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

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

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

          (d) To add additional buildings and improvements to the Common Areas;

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

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

3. Term.

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

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

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

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

4. Rent.

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

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

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

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

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

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

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

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

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

               (iii) Any other service to be provided by Lessor that is elsewhere in this Lease stated to be an “Operating Expense”;

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

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

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

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

               (viii) The cost of any Capital Expenditure to the Building
or the Project not covered under the provisions of Paragraph 2.3
provided; however, that Lessor shall allocate the cost of any such
Capital Expenditure over a 12 year period the useful life as
determined by Lessor and Lessee shall not be required to pay more than
Lessee’s Share of 1/144th of the cost of such Capital Expenditure in
any given month;

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

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

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

          (f) Lessee’s Share of Operating Expense Increase shall be payable by Lessee within 10 days
after a reasonably detailed statement of actual expenses is presented to Lessee by Lessor. At
Lessor’s option, however, an amount may be estimated by Lessor from time to time in advance of
Lessee’s Share of the Operating Expense Increase for any Comparison Year, and the same shall be
payable monthly during each Comparison Year of the Lease term, on the same day as the Base Rent is
due hereunder. In the event that Lessee pays Lessor’s estimate of Lessee’s Share of Operating
Expense Increase as aforesaid, Lessor shall deliver to Lessee
within 60-days after the expiration
of each Comparison Year a reasonably detailed statement showing Lessee’s Share of the actual
Operating Expense Increase incurred during such year. If Lessee’s payments under this paragraph (f)
during said Comparison Year exceed Lessee’s Share as indicated on said statement, Lessee shall be
entitled to credit the amount of such overpayment against Lessee’s Share of Operating Expense
Increase next falling due. If Lessee’s payments under this paragraph

	 	 	 	 	 
	 
 

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during said Comparison Year were less than Lessee’s Share as indicated on said statement, Lessee
shall pay to Lessor the amount of the deficiency within 10 days after delivery by Lessor to Lessee
of said statement. Lessor and Lessee shall forthwith adjust between them by cash payment any
balance determined to exist with respect to that portion of the last Comparison Year for which
Lessee is responsible as to Operating Expense Increases, notwithstanding that the Lease term may
have terminated before the end of such Comparison Year.

          (g) Operating
Expenses shall not include the costs of replacement for equipment or
capital components such as the roof,
foundations, exterior walls or a Common Area capital improvement, such as the parking lot paving,
elevators, fences that have a useful life for accounting purposes of 5 years or more unless it is
of the type described in paragraph 4.2(c) (viii), in which case their cost shall be included as
above provided.

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

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

5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit
as security for Lessee’s faithful performance of its obligations under this Lease. If Lessee fails
to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any
portion of said Security Deposit for the payment of any amount due Lessor or to reimburse or
compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by
reason thereof. If Lessor uses or applies all or any portion of the Security Deposit, Lessee shall
within 10 days after written request therefor, deposit monies with Lessor sufficient to restore
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. Lessor shall
not unreasonably withhold or delay its consent to any written request for a modification of the
Agreed Use, so long as the same will not impair the structural integrity of the improvements of
the Building, will not adversely affect the mechanical, electrical, HVAC, and other systems of the
Building, and/or will not affect the exterior appearance of the Building. If Lessor elects to
withhold consent, Lessor shall within 7 days after such request give written notification of same,
which notice shall include an explanation of Lessor’s objections to the change in the Agreed Use.

     6.2 Hazardous Substances.

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

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

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

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

          (e) Lessor
Indemnification. Lessee 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 therefor (in which case
Lessee shall make the investigation and remediation thereof required by the Applicable
Requirements and this Lease shall continue in full force and effect, but subject to Lessor’s
rights under Paragraph 6.2(d) and Paragraph 13), Lessor

	 	 	 	 	 
	 
 

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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 Premises,
without regard to whether said requirements are now in effect or become effective after the
Start Date. Lessee shall, within 10 days after receipt of
Lessor’s written request, provide Lessor with copies of all permits and other documents, and
other information evidencing Lessee’s compliance with any
Applicable Requirements specified by Lessor, and shall immediately upon receipt, notify
Lessor in writing (with copies of any documents involved) of
any threatened or actual claim, notice, citation, warning, complaint or report pertaining to
or involving the failure of Lessee or the Premises to comply
with any Applicable Requirements.

     6.4 Inspection; Compliance. Lessor and Lessor’s “Lender” (as defined in Paragraph 30) and
consultants shall have the right to enter
into Premises at any time, in the case of an emergency, and otherwise at reasonable times,
for the purpose of inspecting the condition of the Premises
and for verifying compliance by Lessee with this Lease. The cost of any such inspections
shall be paid by Lessor, unless a violation of Applicable
Requirements, or a 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.

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

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

     7.2 Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3
(Compliance), 4.2 (Operating Expenses), 6 (Use), 7.1 (Lessee’s Obligations), 9 (Damage or
Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant to Paragraph 4.2,
shall keep in good order, condition and repair the foundations, exterior walls, structural
condition of interior bearing walls, exterior roof, fire sprinkler system, fire alarm and/or smoke
detection systems, fire hydrants, and the Common Areas. Lessee expressly waives the benefit of any
statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease.

     7.3 Utility Installations; Trade Fixtures; Alterations.

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

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

          (c) Liens; Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or
alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or may be secured by any
mechanic’s or materialmen’s lien against the Premises or any
interest therein. Lessee shall give Lessor not less than 10 days notice prior to the
commencement of any work in, on or about the Premises, and
Lessor shall have the right to post notices of non-responsibility. If Lessee shall contest
the validity of any such lien, claim or demand, then Lessee
shall, at its sole expense defend and protect itself, Lessor and the Premises against the
same and shall pay and satisfy any such adverse judgment that
may be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shall
furnish a surety bond in an amount equal to 150% of the
amount of such contested lien, claim or demand, indemnifying Lessor against liability for the
same. If Lessor elects to participate in any such action,
Lessee shall pay Lessor’s 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 clean and free
of debris, and in good operating order, condition and state of repair, ordinary wear and tear
excepted. “Ordinary wear and tear” shall not include any damage or deterioration that would have
been prevented by good maintenance practice. Notwithstanding the foregoing, if this Lease is for
12 months or less, then Lessee shall surrender the Premises in the same condition as delivered to
Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any
damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned
Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any
storage tank installed by or for Lessee. Lessee shall also completely remove from the Premises any
and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party
(except Hazardous Substances which were deposited via underground migration from areas outside of
the Project) even if such removal would require Lessee to perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by
Lessee. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c)
without the express written consent of Lessor shall constitute a holdover under the provisions of
Paragraph 26 below.

8. Insurance; Indemnity.

     8.1 Insurance Premiums. The cost of the premiums for the insurance policies maintained by
Lessor pursuant to paragraph 8 are included as Operating Expenses (see paragraph 4.2 (c)(iv)). Said costs shall include increases in
the premiums resulting from additional coverage related to requirements of the holder of a mortgage
or deed of trust covering the Premises, Building and/or Project, increased valuation of the
Premises, Building and/or Project, and/or a general premium rate increase. Said costs shall not,
however, include any premium increases resulting from the nature of the occupancy of any other
tenant of the Building. If the Project was not insured for the entirety of the Base Year, then the
base premium shall be the lowest annual premium reasonably obtainable for the required insurance as
of the Start Date, assuming the most nominal use possible of the Building and/or Project. In no
event, however, shall Lessee be responsible for any portion of the premium cost attributable to
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coverage in excess of $2,000,000 procured under Paragraph 8.2(b).

     8.2 Liability Insurance.

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

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

     8.3 Property Insurance — Building, Improvements and Rental Value.

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

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

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

          (d) Lessee’s Improvements. Since Lessor is the Insuring Party, Lessor shall not be required
to insure Lessee Owned Alterations and Utility Installations unless the item in question has
become the property of Lessor under the terms of this Lease.

     8.4 Lessee’s Property; Business Interruption Insurance.

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

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

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

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

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

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

     8.8 Exemption of Lessor from Liability. Lessor shall not be liable for injury or damage to
the person or goods, wares, merchandise or other property of Lessee, Lessee’s employees,
contractors, invitees, customers, or any other person in or about the Premises, whether such
damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or
from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury
or damage results from conditions arising upon the Premises or upon other portions of the
Building, or from other sources or places. Lessor shall not be liable for any damages arising from
any act or neglect of any other tenant of Lessor nor from the failure of Lessor to enforce the
provisions of any other lease in the Project. Notwithstanding Lessor’s negligence or breach of
this Lease, Lessor shall under no circumstances be liable for injury to Lessee’s business or for
any loss of income or profit therefrom.

9. Damage or Destruction.

     9.1 Definitions.

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

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

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

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

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

	 	 	 	 	 
	 
 

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     9.2 Partial Damage — Insured Loss. If a Premises Partial Damage that is an Insured Loss
occurs, then Lessor shall, at Lessor’s expense, repair such damage (but not Lessee’s Trade
Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and
this Lease shall continue in full force and effect; provided, however, that Lessee shall, at
Lessor’s election, make the repair of any damage or destruction the total cost to repair of which
is $5,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds
available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the
required insurance was not in force or the insurance proceeds are not sufficient to effect such
repair, the Insuring Party shall promptly contribute the shortage in proceeds as and when required
to complete said repairs. In the event, however, such shortage was due to the fact that, by reason
of the unique nature of the improvements, full replacement cost insurance coverage was not
commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in
insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides
Lessor with the funds to cover same, or adequate assurance thereof, within 10 days following
receipt of written notice of such shortage and request therefor. If Lessor receives said funds or
adequate assurance thereof within said 10 day period, the party responsible for making the repairs
shall complete them as soon as reasonably possible and this Lease shall remain in full force and
effect. If such funds or assurance are not received, Lessor may nevertheless elect by written
notice to Lessee within 10 days thereafter to: (i) make such restoration and repair as is
commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease
shall remain in full force and effect, or (ii) have this Lease terminate 30 days thereafter.
Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to repair any
such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to
Paragraph 9.3, notwithstanding that there may be some insurance coverage, but the net proceeds of
any such insurance shall be made available for the repairs if made by either Party.

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

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

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

     9.6 Abatement of Rent; Lessee’s Remedies.

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

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

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

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

10. Real Property Taxes.

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

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

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

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

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

11. Utilities and Services.

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

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

     11.3 Hours of Service. Said services and utilities shall be provided during times set forth in Paragraph 1.12. Utilities and services required

	 	 	 	 	 
	 
 

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at other times shall be subject to advance request and reimbursement by Lessee to Lessor of the
cost thereof.

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

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

12. Assignment and Subletting.

     12.1 Lessor’s Consent Required.

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

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

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

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

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

     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. 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 or entering into such sublease, be deemed to have assumed and agreed to conform and
comply with each and every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or sublease, other than such obligations as
are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has
specifically consented to in writing.

          (g) Lessor’s consent to any assignment or subletting shall not transfer to the assignee or
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. Lessor shall not, by reason of
the foregoing or any assignment of such sublease, nor by reason of the collection of Rent, be
deemed liable to the sublessee for any failure of Lessee to perform and comply with any of
Lessee’s obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor stating that a Breach exists in the
performance of Lessee’s obligations under this Lease, to pay to Lessor all Rent due and to become
due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall pay all
Rents to Lessor without any obligation or right to inquire as to whether such Breach exists,
notwithstanding any claim from Lessee to the contrary.

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

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

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

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

13. Default; Breach; Remedies.

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

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

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

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

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

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

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

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

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

          (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.

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

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

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

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

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

     13.6 Breach by Lessor.

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

          (b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender
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.
Lessee shall document the cost of said cure and supply said documentation to Lessor.

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

15. Brokerage Fees.

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

	 	 	 	 	 
	 
 

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Broker’s 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 1.10, 15, 22 and 31. If Lessor fails to pay to
Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such
amounts shall accrue Interest. In addition, if Lessor fails to pay any amounts to Lessee’s Broker
when due, Lessee’s Broker may send written notice to Lessor and Lessee of such failure and if
Lessor fails to pay such amounts within 10 days after said notice, Lessee shall pay said monies to
its Broker and offset such amounts against Rent. In addition, Lessee’s Broker shall be deemed to
be a third party beneficiary of any commission agreement entered into by and/or between Lessor and
Lessor’s Broker for the limited purpose of collecting any brokerage fee owed.

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

16. Estoppel Certificates.

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

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

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

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

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

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

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

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

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

23. Notices.

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

     23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt card, or if no
delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed
given 48 hours after the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that guarantee next day
delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or
courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered
upon telephone confirmation of receipt (confirmation report from fax machine is sufficient),
provided a copy is also delivered via delivery or mail. If notice is received on a Saturday,
Sunday or legal holiday, it shall be deemed received on the next business day.

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

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

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

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

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

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

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

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

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

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

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

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

30. Subordination; Attornment; Non-Disturbance.

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

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

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

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

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

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

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

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

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

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

37.
Guarantor.

     37.1 Execution. The Guarantors, if any, shall each execute a guaranty in the form most recently published by the AIR Commercial Real
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     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 to 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. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does
not include the cost of guard service or other security measures, and that Lessor shall have no
obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the
Premises, Lessee, its agents and invitees and their property from the acts of third parties. In
the event, however, that Lessor should elect to provide security services, then the cost thereof
shall be an Operating Expense.

41. Reservations.

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

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

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

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

43. Authority.

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

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

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

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

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

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

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

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

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

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

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

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

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

	 	 	 	 	 
	 
 

INITIALS

	 	 
	 	/s/ TW

 

INITIALS
	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION	 	FORM OFG-1-9/99E

/s/

	 

PAGE 12 OF 13

 

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

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

	 	 	 	 	 	 	 
	Executed at: Fremont, California	 	Executed at:	 	 

	On:

	 	 	 	On:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	By LESSOR:

	 	 	 	By LESSEE:	 	 
	 
	 	 	 	 	 	 
	Beretta Investment Group, 
a general partnership	 	Energy Recovery, Inc.
a Delaware Corporation
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ David Beretta
	 	By:
	 	/s/ Tom Willardson
	 

	 	 
	 	 	 	 
	Name Printed:

	 	David Beretta
	 	Name Printed:
	 	TOM WILLARDSON
	Title:

	 	General Partner
	 	Title: 	 	CFO 
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	Name Printed:

	 	 

	 	Name Printed:
	 	 

	Title:

	 	 

	 	Title:
	 	 

	Address:

	 	39560 Stevenson Place, Suite 118
	 	Address:
	 	 

	 

	 	Fremont, CA 94 539	 	 	 	 

	 

	 	 	 	 	 	 

	Telephone:

	 	(510) 797-5880
	 	Telephone: (___)
	 	 

	Facsimile:

	 	(510) 797-1703
	 	Facsimile: (___)
	 	 

	Federal ID No.

	 	 	 	Federal ID No.	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	LESSOR’S

BROKER:

	 	 	 	LESSEE’S

BROKER:	 	 
	 
	 	 	 	 	 	 
	Col1iers Internationa1	 	Lee & Associates
	 
	 	 	 	 	 	 
	Attn:

	 	Anthony Stratton
	 	Attn:
	 	Doug Pearson
	Address:

	 	1999 Harrison Street, Suite 1750
	 	Address:
	 	1111 Broadway, Suite 1670
	 

	 	Oakland, CA 94612
	 	 	 	Oakland, CA 94607
	Telephone:

	 	(510) 433-5818
	 	Telephone:
	 	(510) 903-7600
	Facsimile:

	 	(510) 986-6775
	 	Facsimile:
	 	(510) 836-7534

These forms are often modified to meet changing requirements of law and needs of the industry.
Always write or call to make sure you are utilizing the most current form: AIR Commercial Real
Estate Association, 700 South Flower Street, Suite 600, Los Angeles, CA 90017. (213)687-8777.

©Copyright 1999-By AIR Commercial Real Estate Association.

All rights reserved.

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

	 	 	 	 	 
	 
 

INITIALS

	 	 
	 	/s/ TW

 

INITIALS
	 
	©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION	 	FORM OFG-1-9/99E

/s/

	 

PAGE 13 OF 13

 

 

LEASE ADDENDUM

THIS LEASE ADDENDUM is being made and entered into, for reference purposes only, this 11th day
of February 2008, by and between BERETTA INVESTMENT GROUP, a general partnership, (‘Lessor’)
and ENERGY RECOVERY INC., a Delaware corporation (‘Lessee’), with reference to those certain
Premises located at 433 Hegenberger Road, Suite 220, Oakland, CA 94621.

	1.	 	Commencement Date. The Commencement Date shall be the date upon which the tenant improvements have been substantially completed as determined by Lessor’s architect or space
planner, estimated to be about April 1, 2008. The commencement date of this Lease Agreement shall
be agreed to upon substantial completion of the tenant improvements and shall be set forth on this
document as follows:

	 	 	 	 	 	 	 	 	 
	 	 	Commencement Date:	 	April
1 2008	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Accepted:	 	/s/ DB 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 
	 

	 	 	 	Lessor
	 	Lessee	 	 

	2.	 	Monthly Base Rent Adjustment. The monthly base rent shall be as follows:

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Months 1-12
	 	$	9,140.00	 	 	4/1/2008 — 3/31/2009
	 	 
	 

	 	Months 13-24
	 	$	9,427.00	 	 	4/1/2009 — 3/31/2010	 	 

	3.	 	Premises Janitorial Service. Lessee shall be responsible for the contractual arrangement and
payment of all services rendered to Lessee for its janitorial service within the Premises.
Lessee’s janitorial service provider shall be approved by Lessor and subject to said provider
providing worker’s compensation and liability insurance — Certificate of Insurance
satisfactory to Lessor naming Lessor and Lessor’s agents as additional insured — coverage
limits in amount(s) of not less than One Million and No/100 Dollars ($1,000,000.00) per
occurrence and Two Million and No/100 Dollars ($2,000,000.00) aggregate..
	 
	4.	 	Lessee in Possession. Intentionally left blank.
	 
	5.	 	Premises Condition & Tenant Improvements by Lessor. Lessee agrees to accept the premises in
“as-is” condition except that Lessor shall demise and improve the premises pursuant to
Lessor’s standard specifications and space plan hereto attached as Exhibit “A” including all
subsequent modifications thereof agreed to between Lessor and Lessee.
	 
	 	 	The work performed shall be done by Lessor’s contractors according to the final space plan,
which shall be attached hereto when completed by Lessor.
	 
	 	 	The sole Tenant Improvements in the Leased premises shall be the following:

	 	a.	 	A kitchen similar to the existing kitchen in Suite 205, except that
Lessor shall install an approximately 8 foot lower sink/cabinet unit and an upper
cabinet unit. Lessor shall install building standard VCT flooring in kitchen room. All
materials used shall be from Lessor’s inventory of building materials.
	 
	 	b.	 	Lessor shall patch the existing carpet where required.
	 
	 	c.	 	Lessor shall install a new building standard storefront glass entry
door where indicated on Exhibit “A”.
	 
	 	c.	 	Lessor shall provide insulation to the electrical room adjacent to the leased
premises and to the new demising wall. Lessor shall also add additional sheetrock
above the ceiling grid in the two offices between the leased premises and the
adjacent premises.

	6.	 	Right to Sublease. Lessee shall have the Right to Sublease all of Premises with Lessor’s
prior reasonable approval. Lessee shall be entitled to 25% of all sublease profits; Lessor
shall be entitled to 75% of all sublease profits as herein defined. Sublease profits are
herein defined as the excess rent any Sublessee pays in excess of base rent, operating
expenses, common area maintenance charges or utility expense estimates required to be paid to
Lessor pursuant to the Lease and deducting for sublease commission and marketing expenses
approved by Lessor.
	 
	7.	 	Additional Subleasing Clarifications. All Sublessees shall adhere to the Lease, Rules &
Regulations, and insurance requirements independent of the Lessee/Sublessor. In no event
shall Lessee sublease to current, former, or prospective lessees of Lessor and/or its
affiliates. All sublease profits, if any, shall be split equally between Lessor and Lessee.
Lessor’s consent to any assignment or subletting shall not constitute consent to any
subsequent assignment or subletting. No sublessee shall further assign or sublease all or any
portion of the premises without Lessor’s prior written consent.
	 
	8.	 	Signage. Lessor shall provide initial directory and suite identification signage at Lessor’s
expense. Lessee, at Lessee’s sole cost and expense, shall be granted the right to place
signage on the exterior of the building subject to Lessor’s review and approval of the size,
style and copy of the proposed signage. Any exterior signage must also comply with all
other pertinent government agencies requirements.

	 	 	 	 
	 	/s/ DB	 	/s/ TW
	 	 
	 	 	 	/s/

 

 

	9.	 	After Hours HVAC. Lessee shall be able to have heating and cooling provided to the leased
premises after normal building hours via a bypass control. Lessor shall have the right to
charge $75 per hour for the cost of this after hours HVAC use by Lessee.
	 
	10.	 	Renewal Option. Intentionally left blank.
	 
	 	 	IN WITNESS WHEREOF, the parties have executed this Addendum as of the date first written above.

	 	 	 	 	 	 	 
	BERETTA INVESTMENT GROUP, 

a general partnership

	 	 
	 	Energy Recovery Inc.,

a Delaware Corporation
	 	  
	 
	 	 	 	 	 	 
	/s/
David Beretta          
       2/21/08

	 	 	 	/s/ Tom Willardson	 	 
	 

	 	 	 	 	 	 
	David Beretta

	 	 
	 	Name	 	 
	Title
	 	 	 	 	 	 

 

 

EXHIBIT A

	 	 
	 	/s/

 

 

EXHIBIT “B”

RULES AND REGULATIONS

Air Park Plaza — 433 Hegenberger Road

1. No sign, placard, picture, advertisement, name or notice shall be installed or displayed on any
part of the outside or inside of the Building without the prior written consent of Lessor. Lessor
shall have the right to remove, at Lessee’s expense and without notice, any sign installed or
displayed in violation of this rule. All approved signs or lettering on doors and walls shall be
printed, painted, affixed or inscribed at the expense of Lessee by a person chosen by Lessor.

2. If Lessor objects in writing to any curtains, blinds, shades, screens or hanging plants or other
similar objects attached to or used in connection with any window or door of the Premises, Lessee
shall immediately discontinue such use. No awning shall be permitted on any part of the Premises.
Lessee shall not place anything against or near glass partitions or doors or windows which may
appear unsightly from outside the Premises.

3. Lessee shall not obstruct any sidewalks, halls, passages, exits, entrances, elevators,
escalators or stairways of the building. The halls, passages, exits, entrances, elevators,
escalators and stairways are not for the general public, and Lessor shall in all cases retain the
right to control and prevent access thereto of all persons whose presence in the judgment of Lessor
would be prejudicial to the safety, character, reputation and interests of the Building and its
tenants; provided that nothing herein contained shall be construed to prevent such access to
persons with whom any tenant normally deals in the ordinary course of its business, unless such
persons are engaged in illegal activities. No Lessee and no employee or invitee of any Lessee shall
go upon the roof of the Building.

4. The directory of the Building will be provided exclusively for the display of the name and
location of Lessees only, and Lessor reserves the right to exclude any other names therefrom.

5. All cleaning and janitorial services for the Building shall be provided exclusively through
Lessor, Lessee shall contract for and/or provide cleaning and janitorial services to the Premises,
and except with the written consent of Lessor, no person or persons other than those approved by
Lessor shall be employed by Lessee or permitted to enter the building for the purpose of cleaning
the same. Lessee shall not cause any unnecessary labor by carelessness or indifference to the good
order and cleanliness of the Building. Lessor shall not in any way be responsible to any Lessee for
any loss of property in the Building, however occurring, or for any damage to any Lessee’s property
by the janitor or any other employee or any other person.

6. Lessor will furnish Lessee, free of charge, with two keys to each lock located in the Premises.
Lessor may make a reasonable charge for any additional keys. Lessee shall not make or have made
additional keys, and Lessee shall not alter any lock or install a new additional lock or bolt on
any door of its Premises. Lessee, upon the termination of its tenancy, shall deliver to Lessor the
keys of all doors which have been furnished to Lessee, and in the event of loss of any keys so
furnished, shall pay Lessor therefore.

7. If Lessee requires telegraphic, telephonic, burglar alarm or similar services, it shall first
obtain, and comply with, Lessor’s instructions in their installation.

8. Any freight elevator shall be available for use by all tenants in the Building, subject to such
reasonable scheduling as Lessor in its discretion shall deem appropriate. No equipment, materials,
furniture, packages, supplies, merchandise or other property will be received in the Building or
carried in the elevators except between such hours and in such elevators as may be designated by
Lessor.

9. Lessee shall not place a load upon any floor of the Premises which exceeds the load per square
foot which such floor was designed to carry and which is allowed by law. Lessor shall have the
right to prescribe the weight, size and position of all equipment, materials, furniture or other
property brought into the Building. Heavy objects shall, if considered necessary by Lessee or
Lessor, stand on such platforms as determined by Lessor to be necessary to properly distribute the
weight. Business machines and mechanical equipment belonging to Lessee, which cause noise or
vibration that may be transmitted to the structure of the Building or to any space therein to such
a degree as to be objectionable to Lessor or to any tenants in the Building shall be placed and
maintained by Lessee, at Lessee’s expense, on vibration eliminators or other devices sufficient to
eliminate noise or vibration. The person employed to move such equipment in or out of the Building
must be acceptable to Lessor. Lessor will not be responsible for loss of, or damage to, any such
equipment or other property from any cause, and all damage done to the Building by maintaining or
moving such equipment or other property shall be repaired at the expense of Lessee.

10. Lessee shall not use or keep in the Premises any kerosene, gasoline or inflammable or
combustible fluid or material other than those limited quantities necessary for the operation or
maintenance of office equipment. Lessee shall not use or permit to be used in the Premises any foul
or noxious gas or substance, or permit or allow the Premises to be occupied or used in a manner
offensive

	 	 
	 	/s/

Page 1 of 3

 

or objectionable to Lessor or other occupants of the Building by reason of noise, odors or
vibrations, nor shall Lessee bring into or keeping on or about the Premises any birds or animals.

11. Lessee shall not use any method of hearing or air conditioning other than that supplied by
Lessor.

12. Lessee shall not waste electricity, water or air-conditioning and agrees to cooperate fully
with Lessor to assure the most effective operation of the Building’s heating and air-conditioning
and to comply with any governmental energy-saving rules, laws or regulations of which Lessee has
actual notice, and shall refrain from attempting to adjust controls other than room thermostats
installed for Lessee’s use. Lessee shall keep corridor doors closed, and shall close window
coverings at the end of each business day.

13. Lessor reserves the right, exercisable without liability to Lessor to change the name and
street address of the Building.

14. Lessor reserves the right to exclude from the Building between the hours of 6 p.m. and 7 a.m.
the following day, or such other hours as may be established from time to time by Lessor, and on
Sundays and legal holidays, any person unless that person is known to the person or employees in
charge of the Building and has a pass or is properly identified. Lessee shall be responsible for
all persons for whom it requests passes and shall be liable for damages for any error with regard
to the admission to or exclusion from the Building of any person. Lessor reserves the right to
prevent access to the Building in case of invasion, mob, riot, public excitement or other commotion
by closing the doors or by other appropriate action.

15. Lessee shall close and lock the doors of its Premises and entirely shut off all water
faucets or other water apparatus, and electricity, gas or air outlets before Lessee and its
employees leave the Premises. Lessee shall be responsible for any damage or injuries sustained
by other tenants or occupants of the Building or by Lessor for noncompliance with this rule.

16. In the event the Premises include a balcony for use by Lessee, Lessee agrees not to allow the
accessways to such balcony to remain open so as to cause an increase in utility charges as a result
of increased heating or air-conditioning use. Lessor shall have the right to enter the Premises to
assure compliance with this provision.

17. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not be used for any
purpose other than that for which they were constructed and no foreign substance of any kind
whatsoever shall be thrown therein. The expense of any breakage, stoppage or damage resulting from
the violation of this rule shall be born by the Lessee who, or whose employees or invitees, shall
have caused same.

18. Lessee shall not sell, or permit the sale at retail, of newspapers, magazines, periodicals,
theater tickets or any other goods or merchandise to the general public in or on the Premises.
Lessee shall not make any room-to-room solicitations of business from other tenants in the
Building. Lessee shall not use the Premises for any business or activity other than that
specifically provided for in Lessee’s Lease.

19. Lessee shall not install any radio or television antenna, loudspeaker or other device on the
roof or exterior walls of the Building. Lessee shall not interfere with radio or television
broadcasting or reception from or in the Building or elsewhere.

20. Lessee shall not mark, drive nails, screw or drill into the partitions, woodwork or plaster or
in any way deface the Premises or any part thereof. Lessor reserves the right to direct
electricians as to where and how telephone and communication wires are to be introduced to the
Premises. Lessee shall not cut or bore holes for wires. Lessee shall not affix any floor covering
to the floor of the Premises in a manner except as approved by Lessor. Lessee shall repair any
damage resulting from noncompliance with this rule.

21. Lessee shall not install, maintain or operate upon the Premises any vending machines without
the written consent of Lessor. Canvassing, soliciting and distribution of handbills or any other
written material and peddling in the Building are prohibited, and each Lessee shall cooperate to
prevent same.

22. Lessor reserves the right to exclude or expel from the Building any person who, in Lessor’s
judgment, is intoxicated or under the influence of liquor or drugs or who is in violation of any of
the Rules and Regulations of the Building.

23. Lessee shall store all its trash and garbage within its Premises. Lessee shall not place in any
trash box or receptacle any material which cannot be disposed of in the ordinary and customary
manner of trash and garbage disposal. All garbage and refuse disposal shall be made in accordance
with directions issued from time to time by Lessor.

24. The Premises shall not be used for the storage of merchandise held for sale to the general
public or for lodging or for manufacturing of any kind, nor shall the Premises be used for any
improper, immoral or objectionable purpose. No cooking shall be done or permitted by any Lessee on
the Premises, except that use by Lessee of Underwriter’s Laboratory approved microwave and
equipment for brewing coffee,

	 	 
	 	/s/

Page 2 of 3

 

tea, hot chocolate and similar beverages shall be permitted, provided that such equipment and use
is in accordance with all applicable federal, state, county and city laws, codes, ordinances, rules
and regulations.

25. Lessee shall not use in any space or in the public halls of the Building any hand trucks,
except those equipped with rubber tires and side guards or such other material-handling equipment
as Lessor may approve. Lessee shall not bring any other vehicles of any kind into the Building.

26. Without the written consent of Lessor, Lessee shall not use the name of the Building in
connection with or in promoting or advertising the business of Lessee except as Lessee’s
address.

27. Lessee shall comply with all safety, fire protection and evacuation procedures and regulations
established by Lessor or any governmental agency.

28. Lessee assumes any and all responsibility for protecting its Premises from theft, robbery
and pilferage, which includes keeping doors locked and other means of entry to the Premises
closed.

29. Lessor reserves the right to modify and/or adopt such other reasonable and nondiscriminatory
rules and regulations for the parking areas as it deems necessary for the operation of the parking
area. Lessor may refuse to permit any person who violates the within rules to park in the parking
area, and any violation of the rules shall subject the car to removal.

30. Parking area hours shall be 6:00 a.m. to 11:00 p.m. Cars must be parked entirely within the
stall lines painted on the floor. All directional signs and arrows must be observed. The speed
limit shall be 5 miles per hour. Parking is prohibited: (a) in areas not striped for parking, (b)
in aisles, (c) where “no parking” signs are posted, (d) on ramps, (e) in cross hatched areas, and
(f) in such other areas as may be designated by Lessor as reserved for the exclusive use of others.
Washing, waxing, cleaning or servicing of any vehicle by anyone is prohibited. Lessee shall
acquaint all persons to whom Lessee assigns parking spaces of these Rules and Regulations. Lessor
further reserves the right to institute a system of charging for parking on a non-discriminatory
basis.

31. The requirements of Lessee will be attended to only upon appropriate application to the office
of the Building by an authorized individual. Employees of Lessor shall not perform any work or do
anything outside of their regular duties unless under special instructions from Lessor, and no
employee of Lessor will admit any person (Lessee or otherwise) to any office without specific
instructions from Lessor.

32. Lessee shall not park its vehicles in any parking areas designated by Lessor as areas for
parking by visitors to the Building. Lessee shall not leave vehicles in the Building parking areas
overnight nor park any vehicles in the Building parking areas other than automobiles, motorcycles,
motor driven or non-motor driven bicycles or four-wheeler trucks.

33. Lessor may waive any one or more of the Rules and Regulations for the benefit of Lessee or any
other tenant, but no such waiver by Lessor shall be construed as a waiver of such Rules and
Regulations in favor of Lessee or any other tenant, nor prevent Lessor from thereafter enforcing
any such Rules and Regulations against any or all of the tenants of the Building.

34. These Rules and Regulations are in addition to, and shall not be construed to in any way modify
or amend, in whole or in part, the terms, covenants, agreements and conditions of any lease of the
premises in the Building.

35. Lessor reserves the right to make such other and reasonable Rules and Regulations as, in its
judgment, may from time to time be needed for safety and security, for care and cleanliness of the
Building and for the preservation of good order therein. Lessee agrees to abide by all such Rules
and Regulations hereinabove stated and any additional rules and regulations which are adopted.

36. Lessee shall be responsible for the observance of all of the foregoing rules by
Lessee’s employees, agents, clients, customers, invitees and guests.

	 	 
	 	/s/

Page 3 of 3

 

EXHIBIT “C”

BERETTA INVESTMENT GROUP

433 Hegenberger Road

Oakland, CA 94621

INSURANCE
REQUIREMENTS — Tenants

Commercial General Liability Coverage

	 	•	 	Commercial General Liability with a limit not less than $1,000,000 per
occurrence, $2,000,000 in the Aggregate
	 
	 	•	 	Additional Insured endorsement (CG2011) naming Beretta Investment Group;
Vintaco, Inc. dba: Beretta Property Management; Bergam, Inc.
	 
	 	•	 	Policy must be endorsed to include 30 days Notice of Cancellation
	 
	 	•	 	Clearly state or provide a schedule of the covered locations

Please forward all Certificates and Endorsements to:

Beretta Investment Group

C/O Vintaco, Inc. dba Beretta Property Management

39560 Stevenson Place, Suite 118

Fremont, CA 94539

Fax: 510-797-1703

Should you have any questions, please call 510-797-5880

	 	 
	 	/s/

 

 

EXHIBIT “D”

TENANT CONTACT/EMERGENCY LIST

Return VIA Facsimile to: 510-797-1703

PLEASE PRINT

BUSINESS NAME: 
 

DBA NAME: 
(if different from name on lease) 

ADDRESS:
 

	 	 	 	 	 	 	 
	OFFICE PHONE:

	 	 
	 	FAX:
	 	 
	 

	 	 
	 	 	 	 

BILLING ADDRESS:

 

 

(if different from above)

          CONTACT NAME:
 

	 	 	 	 	 	 	 
	          PHONE:

	 	 
	 	FAX:
	 	 
	 

	 	 
	 	 	 	 

ADDRESS FOR LEGAL NOTICES:
 

          CONTACT
NAME:

 

	 	 	 	 	 	 	 
	          PHONE:

	 	 
	 	FAX:
	 	 
	 

	 	 
	 	 	 	 

 

EMERGENCY CONTACTS:(must list person who has access to suite after hours)

	 	 	 	 	 	 	 
	(1) NAME:

	 	 
	 	TITLE:
	 	 
	 

	 	 
	 	 	 	 

	 	 	 	 	 	 	 
	PHONE:

	 	 
	 	ALTERNATE PHONE:
	 	 
	 

	 	 
	 	 	 	 

	 	 	 	 	 	 	 
	(2) NAME:

	 	 
	 	TITLE:
	 	 
	 

	 	 
	 	 	 	 

	 	 	 	 	 	 	 
	PHONE:

	 	 
	 	ALTERNATE PHONE:
	 	 
	 

	 	 
	 	 	 	 

	 	 	 	 	 	 	 
	(3) NAME:

	 	 
	 	TITLE:
	 	 
	 

	 	 
	 	 	 	 

	 	 	 	 	 	 	 
	PHONE:

	 	 
	 	ALTERNATE PHONE:
	 	 
	 

	 	 
	 	 	 	 

ALARM:

 

CONTACT:

 

FOR OFFICE USE ONLY:

OWNER/PROP:                          UNITEX-10.31.12

 

	 	 	 	 	 

Exhibit 10.31.12

AMENDMENT TO

FEDERATED DEPARTMENT STORES, INC.

PROFIT SHARING 401(k) INVESTMENT PLAN

The Federated Department Stores, Inc. Profit Sharing 401(k) Investment Plan (the “Plan”) is hereby
amended, effective as of February 22, 2007 and in order to permit the Board of Directors of
Federated Department Stores, Inc. (the sponsor of the Plan) to delegate to any committee of the
Board the right to amend the Plan, by deleting the current paragraph (b) of Plan Section 13.4.1 and
substituting for it the following paragraph (b).

     (b) In addition to the procedure for amending the Plan set forth in paragraph (a) above, the
Board may also adopt resolutions, pursuant and subject to the regulations or by-laws of Federated
and any applicable law, and either at a duly called meeting of the Board or by a written consent in
lieu of a meeting, to delegate to either (1) any committee of the Board (for purposes of this
paragraph (b), a “Board committee”), including any Executive Committee or Compensation Committee of
the Board, or (2) any officer of Federated the authority to amend the Plan.

               (i) Such resolutions may either grant the applicable Board committee or officer (as the case
may be) broad authority to amend the Plan in any manner the Board committee or the officer deems
necessary or advisable or may limit the scope of amendments the Board committee or the officer may
adopt, such as by limiting such amendments to matters related to the administration of the Plan or
to changes requested by the Internal Revenue Service.

               (ii) In the event of any such delegation to amend the Plan that is given a Board committee,
the Board committee shall amend the Plan by having prepared an amendment to the Plan which is
within the scope of amendments which it has authority to adopt and causing such amendment to be
signed on Federated and its behalf by any member of the Board committee or by any officer or other
employee of Federated. In the event of any such delegation to amend the Plan that is given an
officer of Federated, the officer shall amend the Plan by having prepared and signing on behalf of
Federated an amendment to the Plan which is within the scope of amendments which he or she has
authority to adopt.

               (iii) Any delegation to amend the Plan that is effected pursuant to the provisions of this
paragraph (b) may be terminated at any time by later resolutions adopted by the Board. Further, in
the event of any such delegation to amend the Plan, and even while such delegation remains in
effect, the Board shall continue to retain its own right to amend the Plan pursuant to the
procedure set forth in paragraph (a) above.

[Signature Page Of Plan Amendment Is Following Page]

 

 

     IN ORDER TO EFFECT THE FOREGOING PLAN REVISION, the sponsor of the Plan hereby signs this Plan
amendment.

	 	 	 
	 

	 	FEDERATED DEPARTMENT STORES, INC.
	 
	 	 
	 

	 	By: /s/ David W. Clark
	 

	 	Title: Senior Vice President, Human Resources
	 

	 	Date: June 7, 2007

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