Document:

Employment Agreement

 Exhibit 10.7 
  
 SECOND AMENDMENT TO EMPLOYMENT AGREEMENT 
  
 This Second Amendment to Employment Agreement (“Second Amendment”), dated as of June 27, 2005 (“Second
Amendment Effective Date”), is made by and between Basin Water, Inc., a California corporation (“Company”), and Tom Tekulve (“Employee”) (the Company and Employee sometimes hereinafter are referred to collectively as the
“Parties” and individually as a “Party”), with respect to the following facts: 
  
 RECITALS 
  
 A. The Parties previously entered into that certain Employment Agreement, dated August 27, 2004 (the “Employment Agreement”). Thereafter, the Parties amended the Employment Agreement pursuant to the
terms of that certain First Amendment to Employment Agreement, dated January 31, 2005 (the “First Amendment”). The Employment Agreement and the First Amendment sometimes hereinafter are referred to collectively as the
“Agreement.” Capitalized terms that are used herein without definition and that are defined in the Agreement are used herein as so defined. 
  
 B. The Parties now desire to amend the Agreement, subject to the following terms and conditions. 
  
 NOW, THEREFORE, in consideration of Employee’s continued employment by
the Company, in consideration of the mutual covenants and conditions herein contained, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows: 
  
 OPERATIVE PROVISIONS 
  
 1. Section 2.2 of Article 2 of the Employment Agreement is hereby
deleted, and the following is inserted into its place and stead: 
  
 2.2 Additional Options In Lieu of Private or Public Placement Bonus. To encourage the successful growth of the Company, the Company hereby agrees to grant Employee the following stock options in lieu of a bonus
that would have been paid for a private or public placement of the Company’s equity securities during the Term, and the Employee hereby agrees to accept such grant of stock options in lieu of such bonus. Accordingly, in addition to the grant of
Options contained in Section 2.4 hereof, the Company shall grant to the Employee options (the “Additional Options”) to purchase an additional sixty thousand (60,000) shares of the Company’s common stock at an exercise price
of Five Dollars ($5.00) per share. This grant of Additional Options shall be submitted for ratification by the Company’s Board of Directors at the meeting of the Company’s Board of Directors next following the Second Amendment Effective
Date. One-third (1/3) of the Additional Options shall vest on the first anniversary of the 
  

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 Second Amendment Effective Date, one-third (1/3) of the Additional Options shall vest on the second
anniversary of the Second Amendment Effective Date, and one-third (1/3) of the Additional Options shall vest on the third anniversary of the Second Amendment Effective Date; provided, however, that notwithstanding the foregoing, all Additional
Options shall immediately vest and become exercisable: (a) in accordance with Section 8 of the Plan, upon any merger or consolidation in which the Company is not the surviving corporation, upon the sale of all or substantially all of the
assets or stock of the Company, or upon a change in control of the Company; or (b) if there is an initial public offering (“IPO”) of the Company’s securities. Notwithstanding the foregoing, the Additional Options shall be granted
pursuant to the Plan and shall in all respects limited by and subject to the express terms and provisions of that Plan, as it may be amended from time to time and construed by the Board of Directors of the Company. 
  
 2. Except as amended by this Second Amendment, all of the terms and
conditions of the Agreement shall remain unmodified, in full force and effect. 
  
 IN WITNESS WHEREOF, this Amendment is executed as of the Second Amendment Effective Date. 
  

			
	“Company”
	
	Basin Water, Inc., a California corporation
		
	By:	 	 /s/ Peter L. Jensen

	 	 	Peter L. Jensen, President
		
	 	 	“Employee”
		
	 	 	 /s/ Tom Tekulve

	 	 	Tom Tekulve

  

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 FIRST AMENDMENT TO EMPLOYMENT AGREEMENT 
  
 This First Amendment to Employment Agreement (“Amendment”), dated
as of January 31, 2005, is made by and between Basin Water, Inc., a California corporation (“Company”), and Tom Tekulve (“Employee”) (the Company and Employee sometimes hereinafter are referred to collectively as the
“Parties” and individually as a “Party”), with respect to the following facts: 
  
 RECITALS 
  
 A. The Parties previously entered into that certain Employment Agreement, dated August 27, 2004 (the “Agreement”). Capitalized terms that are used herein without definition and that are defined in the
Agreement are used herein as so defined. 
  
 B. The Parties now
desire to amend the Agreement, subject to the following terms and conditions. 
  
 NOW, THEREFORE, in consideration of Employee’s continued employment by the Company, in consideration of the mutual covenants and conditions herein contained, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows: 
  
 OPERATIVE PROVISIONS 
  
 1. Paragraph 2.4 of Article 2 of the Agreement is hereby deleted, and the following is inserted into its place and instead: 
  
 2.4 Stock Options. The Company has established that certain Basin Water Technology Group, Inc. 2001 Stock Option Plan (the
“Plan”), pursuant to which stock options may be authorized and granted to the executive officers, directors, employees and key consultants of the Company. On or before its next annual meeting of its Board of Directors, the Company shall
grant Employee options (the “Options”) to purchase one hundred ten thousand (110,000) shares of the Company’s common stock. One-third (1/3) of the Options shall vest on the first anniversary of the Effective Date, one-third
(1/3) of the Options shall vest on the second anniversary of the Effective Date, and one-third (1/3) of the Options shall vest on the third anniversary of the Effective Date; provided, however, that notwithstanding the foregoing, all
Options shall immediately vest and become exercisable: (a) in accordance with Section 8 of the Plan, upon any merger or consolidation in which the Company is not the surviving corporation, upon the sale of all or substantially all of the
assets or stock of the Company, or upon a change in control of the Company; or (b) if there is an IPO of the Company’s securities. The exercise price for the Options 
  

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 shall be Four Dollars ($4.00) per share. Notwithstanding the foregoing, the Options shall be granted
pursuant to the Plan and shall in all respects limited by and subject to the express terms and provisions of that Plan, as it may be amended from time to time and construed by the Board of Directors of the Company. 
  
 2. Paragraph 2.5 of Article 2 of the Agreement is hereby deleted, and
the following is inserted into its place and stead: 
  
 2.5 BION Stock Options. The parties acknowledge: (a) the Company is considering forming a wholly-owned subsidiary, BION, to develop a process for removing and destroying perchlorate from saturated resin; (b) once
BION is formed, the Company intends to offer a portion of BION’s equity securities for sale in an initial private placement to accredited investors; and (c) in the future, BION may establish a management stock option plan, pursuant to
which stock options may be authorized and granted to the executive officers, directors, employees and key consultants of BION. If BION prepares and adopts such management stock option plan, then, provided there are at least ten million
(10,000,000) shares of common stock of BION issued and outstanding, the Company agrees to cause BION to issue to Employee options (the “BION Options”) to purchase one hundred fifty thousand (150,000) shares of BION’s common
stock. If granted, one-third (1/3) of the BION Options shall vest on the first anniversary of the date of grant, one-third (1/3) of the BION Options shall vest on the second anniversary of the date of grant, and one-third (1/3) of the
BION Options shall vest on the third anniversary of the date of grant; provided, however, that notwithstanding the foregoing, all BION Options shall immediately vest and become exercisable: (a) upon any merger or consolidation in which BION is
not the surviving corporation, upon the sale of all or substantially all of the assets or stock of BION, or upon a change in control of BION; or (b) if there is an IPO of BION’s securities. The exercise price for the BION Options shall be
the same price per share as the BION common stock offered for sale to accredited investors in the initial private placement described above. Notwithstanding the foregoing, the BION Options shall be granted pursuant to the BION management stock
option plan and shall in all respects limited by and subject to the express terms and provisions of that plan, as it may be amended from time to time and construed by the Board of Directors of BION. 
  
 3. Except as amended by this Amendment, all of the terms and
conditions of the Agreement shall remain unmodified, in full force and effect. 
  

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 IN WITNESS WHEREOF, this Amendment is executed as of the last date below set forth. 
  

					
	Dated: January 31, 2005	 	“Company”
		
	 	 	Basin Water, Inc., a California corporation
			
	 	 	By:	 	 /s/ Peter L. Jensen,

	 	 	 	 	Peter L. Jensen, President
		
	Dated: January 31, 2005	 	“Employee”
			
	 	 	 	 	 /s/ Tom Tekulve

	 	 	 	 	Tom Tekulve

  

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 EMPLOYMENT AGREEMENT 
  
 THIS EMPLOYMENT AGREEMENT (the “Agreement”) dated as of August 27, 2004, is entered into by and between Basin
Water, Inc., a California corporation (the “Company”), and Tom Tekulve (the “Employee”), with respect to the following facts. 
  
 R E C I T A L S 
  
 A. The Company is in the business of designing and building equipment to produce potable water from contaminated wells. 
  
 B. The Employee has special knowledge and expertise in the business conducted
by the Company and by this Agreement is being employed on a full-time basis as the chief financial officer and vice president of the Company. 
  
 NOW, THEREFORE in consideration of the mutual promises and conditions hereinafter set forth, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties, intending to be legally bound, do hereby agree as follows: 
  
 ARTICLE 1 
  
 EMPLOYMENT AND TERM 
  
 1.1 Employment/Duties. The Company hereby agrees to employ the Employee and the Employee hereby accepts employment as the chief financial officer of the Company under the terms and conditions set forth
in this Agreement. Employee shall be responsible to Peter L. Jensen, the President of the Company, for the performance of his duties. Employee shall have responsibility for such duties as are customarily associated with the position of a chief
financial officer and such other duties and responsibilities as may be assigned by the President of the Company. During the Term, Employee shall devote all of his working time, attention and skill to the business affairs of the Company. 

 
 1.2 Effective Date. This Agreement shall become effective on
September 20, 2004, or such earlier date agreed to in writing by the Parties (the “Effective Date”). 
  
 1.3 Term. This Agreement is effective from the Effective Date and shall continue for a period of three (3) years thereafter, unless
earlier terminated as provided in ARTICLE 6 (the “Term”). 
  
 ARTICLE 2 
  
 COMPENSATION 
  
 2.1 Base Salary. The Employee shall be paid a monthly base
salary of Ten Thousand Four Hundred Sixteen Dollars and Sixty-seven Cents ($10,416.66), payable in two (2) equal monthly installments on the 1st and 15th day of each month. The Company shall withhold and deduct from the Salary payments all
taxes required by federal and state laws and any other 
  

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 authorized deductions. The Company shall review Employee’s salary at least annually and may, in its sole discretion,
increase Employee’s Salary. As used in this Agreement, the term “Salary” shall mean the amount payable to Employee pursuant to, and if applicable as adjusted in accordance with, this Section 2.1. 
  
 2.2 Bonus. If during the Term the Company either
(a) successfully completes a private placement of equity securities in an amount at least equal to Five Million Dollars ($5,000,000.00) (the “Private Placement”), or (b) there is an initial public offering (“IPO”) of
the Company’s securities, then in addition to the Salary and on the first to occur of either the Private Placement or the IPO, the Company shall pay Employee a bonus payment (the “Bonus”) in the amount below set forth. In the event
the Private Placement first occurs, the Company shall pay Employee a Bonus of Thirty Thousand Dollars ($30,000.00) upon completion of such Private Placement. In the event the IPO first occurs, the Company shall pay Employee a Bonus of Fifty Thousand
Dollars ($50,000.00) upon the effectiveness of the registration statement for such IPO. Employee acknowledges that, pursuant to this Section 2.2, he is entitled to only one Bonus, payable upon the first to occur of either the Private Placement
or the IPO, and that, unless the parties otherwise agree, Employee will not be entitled to a second Bonus if both a Private Placement and an IPO occur during the Term. 
  
 2.3 Benefits. The Company currently offers health insurance coverage and a Section 529 Flex Plan for all
employees. Employee will be eligible to participate in the Company’s health and Flex plans on the same terms and conditions available to other employees of the Company. The Company currently offers no other benefits to its employees. If the
Company in the future decides to offer benefits during the Term, the Company shall provide the Employee with benefits comparable to those provided to its other employees, provided that provision of such benefits by the Company is legal and is not
unreasonably burdensome to the Company. Participation shall be subject to the terms of the applicable plan documents. The Company may alter, modify, add to or delete its employee benefit plans as they apply to the Company’s employees at such
times and in such manner as the Company determines appropriate, without recourse by Employee. 
  
 2.4 Stock Options. The Company has established that certain Basin Water Technology Group, Inc. 2001 Stock Option Plan (the “Plan”), pursuant to which stock options may be authorized and granted
to the executive officers, directors, employees and key consultants of the Company. On or before its next annual meeting of its Board of Directors, the Company shall grant Employee options (the “Options”) to purchase one hundred ten
thousand (110,000) shares of the Company’s common stock. One-third (1/3) of the Options shall vest on the first anniversary of the Effective Date, one-third (1/3) of the Options shall vest on the second anniversary of the
Effective Date, and one-third (1/3) of the Options shall vest on the third anniversary of the Effective Date. The exercise price for the Options shall be Four Dollars ($4.00) per share. Notwithstanding the foregoing, the Options shall be
granted pursuant to the Plan and shall in all respects limited by and subject to the express terms and provisions of that Plan, as it may be amended from time to time and construed by the Board of Directors of the Company. 
  
 2.5 BION Stock Options. The parties acknowledge: (a) the
Company is considering forming a wholly-owned subsidiary, BION, to develop a process for removing and destroying perchlorate from saturated resin; (b) once BION is formed, the Company intends to offer a 
  

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 portion of BION’s equity securities for sale in an initial private placement to accredited investors; and
(c) in the future, BION may establish a management stock option plan, pursuant to which stock options may be authorized and granted to the executive officers, directors, employees and key consultants of BION. If BION prepares and adopts such
management stock option plan, then, provided there are at least ten million (10,000,000) shares of common stock of BION issued and outstanding, the Company agrees to cause BION to issue to Employee options (the “BION Options”) to
purchase one hundred fifty thousand (150,000) shares of BION’s common stock. If granted, one-third (1/3) of the BION Options shall vest on the first anniversary of the date of grant, one-third (1/3) of the BION Options shall vest
on the second anniversary of the date of grant, and one-third (1/3) of the BION Options shall vest on the third anniversary of the date of grant. The exercise price for the BION Options shall be the same price per share as the BION common stock
offered for sale to accredited investors in the initial private placement described above. Notwithstanding the foregoing, the BION Options shall be granted pursuant to the BION management stock option plan and shall in all respects limited by and
subject to the express terms and provisions of that plan, as it may be amended from time to time and construed by the Board of Directors of BION. 
  
 2.6 Vacation. During each year of the Term of this Agreement, Employee shall accrue fifteen (15) days (i.e., 2.3077 hours per forty
(40) hour week, or one hundred (120) hours) of vacation time. Payments for vacation time shall be calculated based on Employee’s Salary. Any accrued but unused vacation time shall accumulate and carry forward during subsequent years
of the Term; provided, however, that no more than one hundred twenty (120) hours of vacation time shall carry forward to subsequent years of the Term; provided further, however, that in no event shall Employee accrue more than one hundred sixty
(160) hours of unused vacation time, and if Employee accrues a total of one hundred sixty (160) hours of unused vacation time, Employee shall cease accruing vacation time until Employee’s accrued but unused vacation time again drops
below one hundred sixty (160) hours. Employee agrees to seek approval of the Company prior to scheduling any vacation days, and agrees that any scheduled vacation days shall be rescheduled at the Company’s request to accommodate the needs
of the Company. 
  
 2.7 Business Expenses. The
Company will pay or reimburse Employee for all reasonable business expenses incurred or paid by him in the performance of his duties and responsibilities hereunder subject to and in accordance with a pre-approved budget, subject to any restrictions
on such expenses set by the Company and to such reasonable substantiation requirements as may be specified by the Company from time to time. 
  
 ARTICLE 3 
  
 PROPRIETARY INFORMATION 
  
 3.1 Proprietary Information. 
  
 (a) Confidentiality Required. Employee acknowledges that the Company and each person or entity which controls, is controlled by, or is under common control with the Company (collectively the
“Affiliates”) possess, are developing and acquiring and will continue to possess, 
  

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 develop and acquire valuable Proprietary Information (as defined below), including information that Employee may acquire,
develop or discover during Employee’s employment with the Company. The value of that Proprietary Information depends, in part, on it remaining confidential. The Company and its Affiliates depend on Employee to maintain that confidentiality, and
Employee accepts that position of trust. 
  
 (b) Proprietary
Information, Defined. As used in this Agreement, “Proprietary Information” means or includes, without limitation: 
  
 (1) Any information, ideas, and materials (including any formula, pattern, compilation, device, method, technique or process) that derives, in part,
independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use, and includes information of or about the Company, its Affiliates, its
clients, employees, customers, suppliers, joint venturers, licensors, licensees, distributors and other persons and entities with whom the Company does or may do business; 
  
 (2) Any ideas or materials, such as know-how, show-how, research and development results, software design and
specifications, source and object code, training and training materials, invention disclosures, patent applications, trade secrets, blueprints, models, and other materials and concepts relating to products and processes; and 
  
 (3) Any information, ideas, or materials of a business nature including
without limitation non-public financial information, information relating to profits, costs, marketing, strategy, purchasing, sales, customers, suppliers, pricing, bidding, customer information, contract terms, employees, salaries, product
development plans, business and financial plans, forecasts and projections, client information, marketing and sales plans and forecasts, any or all non-public internal functionality, design parameters, and other proprietary features of the
Company’s current and future business activities, and similar internal data. 
  
 (c) Non-Disclosure, Etc. Employee will not disclose, disseminate, publish, copy or otherwise make available for use (collectively “Use”) at any time, either during or after Employee’s employment
with the Company, any or all Proprietary Information except for the exclusive benefit of the Company and its Affiliates, as required by Employee’s duties for the Company, or as the Company expressly may consent to in writing. Employee will
cooperate with the Company and its Affiliates, and use Employee’s best efforts to prevent the unauthorized Use of any or all Proprietary Information. Employee understands that this prohibition on Use prevents Employee from discussing
Proprietary Information, even in general terms, with persons outside the Company, except if (1) the Use is authorized or required in connection with Employee’s duties of employment for the Company or its Affiliates during the Term,
(2) the Company expressly consents in writing to the Use of Proprietary Information, or (3) the Use is required pursuant to any applicable judgment, order or decree of any court or governmental body or agency having jurisdiction, or by any
law, rule or regulation (collectively “Legal Process”). If Employee becomes subject to Legal Process, Employee shall give the Company reasonable prior written notice of the Legal Process and a written description of the Proprietary
Information being sought, and shall obtain, to the maximum extent possible, confidential treatment for the Proprietary Information sought to be obtained through the Legal Process. Employee shall cooperate fully with the Company in its efforts to
prevent unauthorized Use of Proprietary Information. 
  

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 (d) Return of Proprietary Information. Upon leaving employment with the Company for any reason,
Employee shall immediately deliver to the Company all tangible, written, graphical, machine readable, computer tapes, diskettes, hard drives, and all other materials, including without limitation all copies and excerpts, in Employee’s
possession, custody, or control containing or disclosing any or all Proprietary Information. 
  
 (e) Civil Remedies, Criminal Penalties. In addition to any civil remedies available to the Company in the event of Employee’s unauthorized disclosure or use of any or all Proprietary Information, Employee
acknowledges that the unauthorized taking, carrying away, or use of a trade secret may constitute a criminal act under California Penal Code Section 499c. 
  

3.2 Disclosure and Assignment of Information. Employee agrees promptly to disclose to the Company all information pertaining to the
Company’s business and collected or learned by Employee, either alone or jointly with others, in the course of his employment with the Company. In addition, Employee hereby assigns to the Company any rights he may have or acquire in the
Proprietary Information, and promises that during the duration of his employment with the Company and thereafter, he will assist the Company in the enforcement and protection of the Proprietary Information. The Company shall promptly reimburse
Employee for any reasonable expenses incurred in complying with the provisions of this Section 3.2. 
  
 3.3 Innovations and Improvements. Employee agrees that all inventions, innovations or improvements in the Company’s method of
conducting its business conceived by him during his employment with the Company belong to the Company. Employee will promptly disclose such inventions, innovations or improvements to the Company, and perform all actions reasonably requested by the
Company to establish and confirm such ownership. Any such actions required to be performed by Employee shall be at the expense of the Company. 
  
 3.4 Moral Rights Waiver. Employee also hereby forever waives and agrees never to assert against Company, its successors or licensees, any
and all rights to claim authorship of a work, any rights to object to any distortion or other modification of a work, and any similar rights provided for by any state, federal or international law or treaty, that Employee has, had or may have in any
Proprietary Information of the Company. 
  
 3.5
Appointment of Attorney in Fact. Employee hereby irrevocably designates and appoints the President of the Company as Employee’s agent and attorney-in-fact to act for and in Employee’s behalf and stead to execute and file any
document and to do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of patents, copyrights and other proprietary rights with the same force and effect as if executed and delivered by Employee. 
  

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 ARTICLE 4 
  

NONSOLICITATION AND NONCOMPETITION 
  
 4.1 Nonsolicitation. Employee hereby agrees that for as long as he is employed by the Company, and for a period of one (1) year
thereafter, Employee shall not, directly or indirectly, for Employee’s behalf or for or on behalf of any person, firm, corporation, business, partnership, or other organization other than the Company, (a) induce any employee of the Company
or its Affiliates to leave such employment, or (b) solicit the business of any person or entity that is a Prospective Customer (as defined below) or a customer or client of the Company or its Affiliates on the date of such termination or during
the twelve (12) month period immediately preceding such termination. As used herein, “Prospective Customer” shall mean any person or entity whose business is being actively sought or in any way solicited, or known by Employee to be a
person or entity whose business is the subject of possible solicitation by the Company or its Affiliates. Employee expressly acknowledges that the length of time involved in soliciting and obtaining the business of new customers can be as long as
two (2) years. 
  
 4.2 Noncompetition.

  
 (a) Unique Technology. Employee acknowledges that the
Company and its Affiliates currently are engaged in the development and manufacturing of unique technology (the “Unique Technology”), including without limitation the BASIN WATER IXTM ion exchange process which removes from groundwater
certain chemical contaminants, including without limitation nitrates, arsenic, perchlorates, chromium 6 and fluoride. 
  
 (b) Marketing Efforts. Employee further acknowledges that the Company and its Affiliates are currently in the process of marketing the Unique
Technology to various cities, counties, municipal corporations, government agencies, joint powers agencies, water agencies, water districts, private companies, joint ventures, and private individuals throughout the State of California, and that the
Company is planning on expanding its marketing efforts to encompass the United States and the world. 
  
 (c) Confidential Relationship. Employee acknowledges that Employee will be in a confidential relationship with the Company, wherein Employee will
receive access to the Unique Technology, and that Employee will receive specialized training from the Company or its Affiliates. 
  
 (d) No Unauthorized Uses. Given the status of the Unique Technology, Employee’s access to the Unique Technology and the vast potential market
for the Company’s Unique Technology, Employee hereby covenants and agrees that, for the duration of the Non-Compete Term (as defined below), Employee will not make any Use, or authorize anyone else to make any Use for or on behalf of any other
person, organization or company, of any or all information pertaining in any way to the Unique Technology, except as required by Employee’s duties for the Company or its Affiliates, or as the Company expressly authorizes in writing. 

 
 (e) No Competition and No Engaging in Restricted Activities.
Employee further covenants and agrees that for the duration of the Non-Compete Term, Employee shall not, either directly or indirectly, solely or jointly with any person or persons, as an employee, consultant, advisor, independent contractor
(regardless of whether engaged in a business for profit) or as an individual proprietor, owner, partner, shareholder, director, officer, joint venturer, investor, lender or in any other capacity, compete with the Company or its Affiliates in, or
engage in, the 
  

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 Restricted Activities (as defined below). Notwithstanding the foregoing, Employee acknowledges that this covenant does
not prevent Employee from owning up to five percent (5%) of the stock in any publicly-traded company which may be engaged in the Restricted Activities. 
  
 (f) Non-Compete Term, Defined. The term “Non-Compete Term” means that period of time commencing on the effective date of Employee’s
employment with the Company and continuing for a period of two (2) years following the last day of Employee’s employment with the Company or its Affiliates. 
  
 (g) Restricted Activities, Defined. The term “Restricted Activities” means any or all of Employee’s
primary duties, obligations and daily activities for the Company or its Affiliates during the three (3) years immediately preceding the expiration or termination of Employee’s employment with the Company, and all other activities which the
Company or its Affiliates actively pursued, researched or engaged in, including without limitation the Unique Technology, during the three (3) years immediately preceding such expiration or termination. 
  
 (h) Reform. Employee hereby acknowledges and agrees that the Company
has attempted to limit Employee’s rights to compete only to the extent necessary to protect the Company from, among other things, unfair competition. Employee further acknowledges and agrees that Employee is a key employee of the Company and
that in light of the current and future activities of the Company, the restrictions set forth in this Agreement are fair and reasonable as of the date hereof. The Parties further hereby agree that if the scope or enforceability of any provisions of
this Agreement are in any way disputed, a court having appropriate jurisdiction shall reform any such unenforceable provision in a manner which provides the Company with the greatest level of protection permissible at law, without barring Employee
from engaging in lawful conduct not otherwise prohibited by these restrictions. 
  
 ARTICLE 5 
  
 INDEMNIFICATION 
  
 5.1 Indemnification
of Employee. The Company agrees to indemnify Employee in connection with the performance of his duties and obligations hereunder in accordance with the Bylaws of the Company. 
  
 ARTICLE 6 
  
 TERMINATION OF EMPLOYMENT 
  
 6.1 Events of Termination by the Company. 
  
 (a) Death or Disability. In the event Employee dies or becomes permanently disabled during the term of the Agreement, his employment hereunder
shall automatically terminate. In such case, the Company shall pay to Employee or his beneficiary, as the case may be, in addition to such amounts as may be payable to Employee pursuant to Article 2 of the 
  

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 Agreement, any earned but unpaid Salary as of the date of his death or disability. For the purpose of the Agreement,
“permanent disability” or “permanently disabled” shall mean the inability of the Employee, due to physical or mental illness or disease, to perform the functions then performed by such Employee for ninety (90) substantially
consecutive days, accompanied by the likelihood, in the opinion of a physician chosen by the Company, that the Employee will be unable to perform such functions within the reasonably foreseeable future; provided, however, that the foregoing
definition shall not include a disability for which the Company is required to provide reasonable accommodation pursuant to the Americans with Disabilities Act or other similar statute or regulation. 
  
 (b) By the Company. The Company may terminate Employee’s
employment hereunder for “Cause” at any time upon notice to Employee setting forth in reasonable detail the nature of such cause. The following shall constitute “Cause” for termination. 
  
 (1) Employee’s falsification of the accounts of the Company,
embezzlement of funds of the Company or other material dishonesty with respect to the Company; 
  
 (2) Conviction of, or plea of nolo contendere to, a felony or other crime involving moral turpitude (it being understood that violation of a motor
vehicle code does not constitute such a crime); 
  
 (3) Conduct
engaged in or action taken or omitted to be taken by Employee which is in material breach of the Agreement, other than a breach of Articles 3 or 4 of this Agreement, which breach continues for more than seven (7) days after written notice of
such breach is given to Employee; 
  
 (4) Breach or threatened
breach of any of the provisions of Articles 3 or 4 of this Agreement; 
  
 (5) Failure to satisfactorily perform a material and substantial portion of Employee’s duties and responsibilities hereunder which failure continues for more than thirty (30) days after written notice of such failure is given to
Employee; 
  
 (6) Gross or willful misconduct of Employee with
respect to the Company or any subsidiary or affiliate thereof which misconduct continues for more than ten (10) days after written notice of such misconduct is given to Employee; or 
  
 (7) Change in the Company’s economic circumstances, such that it would not be economically feasible to retain
Employee. 
  
 Upon the giving of notice of termination of
Employee’s employment hereunder for cause, the Company shall have no further obligation or liability to Employee, other than the payment of Salary earned but unpaid at the date of termination and providing Employee with the right to participate
(subject to payment by Employee of any premiums for coverage) in the Company’s group medical and dental insurance plans as the same are in effect from time to time for so long as Employee is entitled to continue such participation under
applicable law and plan terms. 
  

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 6.2 Survival. Notwithstanding the expiration of the Term of this Agreement or the
termination of this Agreement as provided in the Article 6, the obligations of Employee and the Company under Article 3, Article 4 and Article 5 shall survive such expiration of the Term or such termination and remain in full force and effect

  
 ARTICLE 7 
  
 REMEDIES 
  
 7.1 Specific Performance; Injunctive Relief. Employee acknowledges and agrees that any violation of the
provisions of Articles 3 or 4 of this Agreement will cause irreparable damage to the Company. Accordingly, in the event of a breach or threatened breach by Employee of such provisions, the Company shall be entitled to obtain specific performance of
such provisions through injunction or other equitable relief from a court of competent jurisdiction, without proof of actual damages and without being required to post bond or other security. 
  
 7.2 Remedies Cumulative. All rights and remedies
provided by this Agreement or existing at law or in equity shall be cumulative of all other rights and remedies, and shall not be exclusive of each other. No delay or omission by a party in the exercise of any right or remedy shall constitute a
waiver of such right or remedy, and pursuit of one right or remedy shall not in any way operate as an exclusive election or otherwise preclude or limit either party from pursuing any other or additional right or remedy. 
  
 ARTICLE 8 
  
 CONCLUDING PROVISIONS 
  
 8.1 Effective Date of Notice. The effective date of any offer, demand, notice or instrument shall be the date of delivery to the addressee.

  
 8.2 Resolution of Disputes. Except as provided
in Article 7 hereof, any controversy or claim arising out of or relating to this Agreement, or any breach thereof, shall be settled by arbitration in accordance with the rules of the American Arbitration Association now in force and hereafter
adopted. This Section 8.2 shall apply to any claim by Employee of employment discrimination under federal or state law, and Employee and Company each hereby waives the right to litigate such claim in state or federal court. Any arbitration
shall take place in San Diego, California, or at such other location as the Parties may agree upon, and judgment on the award rendered may be entered in any court having jurisdiction. Any arbitration pursuant to this Section 8.2 shall be held
before one arbitrator selected by the Employee and the Company, and if the Employee and the Company are unable to agree on such arbitrator, the Presiding Judge of the California Superior Court, County of San Diego shall select such arbitrator. The
fees and disbursements of such arbitrator shall be borne equally by the Parties. The Parties agree that, in any arbitration the parties shall, to the maximum extent possible, have such rights as to the scope and manner of discovery as are permitted
in the Federal Rules of Civil Procedure and consent to the entry of any order of any court of competent jurisdiction to enforce such discovery. The arbitrator shall make his or her award in accordance with and based upon all the provisions of the
Agreement and judgment upon any award rendered by the arbitrator shall be entered in any court 
  

 9 

 have jurisdiction thereof. The arbitrator shall award costs and reasonable attorneys’ fees, including costs and
attorneys’ fees incurred in enforcing any arbitration award, to the Party substantially prevailing in the arbitration. 
  
 8.3 Withholding. All payments made by Company to Employee hereunder shall be subject to applicable withholding. 
  
 8.4 Further Actions. At any time and from time to time after
the date hereof, each party agrees to take such actions and to execute and deliver such documents as the other party may reasonably request to effectuate the purposes of this Agreement. 
  
 8.5 Amendment. Except as otherwise provided in this Agreement, neither this Agreement nor any provision hereof
may be waived, modified, amended, discharged, or terminated except by an instrument in writing signed by the party against which the enforcement of such waiver, modification, amendment, discharge or termination is sought, and then only to the extent
set forth in such writing. 
  
 8.6 Entire Agreement.
This Agreement and the agreements provided for herein constitute the entire understanding between the parties with respect to the matters set forth herein, and they supersede all prior or contemporaneous understandings or agreements between the
parties with respect to the subject matter hereof, whether oral or written. 
  
 8.7 Notices. Any notice, approval, consent, waiver or other communication required or permitted to be given or to be served upon either party in connection with this Agreement shall be in writing. Such
notice shall be personally served, sent by facsimile, telegram, or cable, or sent prepaid by registered or certified mail with return receipt requested, or sent by reputable overnight delivery service, such as Federal Express, and shall be deemed
given: (a) if personally served, when delivered to the party to whom such notice is addressed; (b) if given by facsimile, telegram, or cable, when sent; (c) if given by prepaid or certified mail with return receipt requested, on the
date of execution of the return receipt; or (d) if sent by reputable overnight delivery service, such as Federal Express, when received. Any notice given by facsimile, telegram, or cable shall be confirmed in writing, and such confirmation
shall be sent or delivered by any of the other means of delivery set forth in this Section, within forty-eight (48) hours after notice was sent by facsimile, telegram or cable. Such notices shall be addressed to the party to whom such notice is
to be given at the party’s address set forth below or as such party shall otherwise direct in a writing to the other party delivered or sent in accordance with this Section. 
  

					
	If to Employee:	  	 Tom Tekulve
 17417 Olive Tree Circle
 Yorba Linda, California 92886
 Phone No. (714) 803-9171
 Fax No.: (714) 223-9097
	  	 
			
	If to Company:	  	 Basin Water, Inc.
 P.O. Box 70000
 San Diego, California 92167
 Attn: Peter L. Jensen, President
	  	 

  

 10 

					
	 	  	 Phone: (619) 222-1493
 Fax No.: (619)
222-3393
	  	 
			
	With a copy to:	  	 Alhadeff & Solar, LLP
 707 Broadway, Suite
800
 San Diego, California 92101
 Attn: Keith R. Solar,
Esq.
 Phone: (619) 239-8700
 Fax No.: (619)
702-3898
	  	 

  
 8.8
Controlling Law. This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of California, without giving effect to any choice-of-law or conflicts-of-laws rule or principle that would result
in the application of any other laws. 
  
 8.9
Headings. Headings, titles and captions are for convenience only and shall not constitute a portion of this Agreement or be used for the interpretation thereof. 
  
 8.10 Cumulative Rights; Waiver. The rights created under this Agreement, or by law or equity, shall be
cumulative and may be exercised at any time and from time to time. No failure by either party to exercise, and no delay in exercising any rights, shall be construed or deemed to be a waiver thereof, nor shall any single or partial exercise by either
party preclude any other or future exercise thereof or the exercise of any other right. Any waiver of any provision or of any breach of any provision of this Agreement must be in writing, and any waiver by either party of any breach of any provision
of this Agreement shall not operate as or be construed to be a waiver of any other breach of that provision or of any breach of any other provision of this Agreement. The failure of either party to insist upon strict adherence to any term of the
Agreement on one or more occasions shall not be considered or construed or deemed a waiver of any provision or any breach of any provision of this Agreement or deprive that party of the right thereafter to insist upon strict adherence to that term
or provision or any other term or provision of this Agreement. No delay or omission on the part of either party in exercising any right under this Agreement shall operate as a waiver of any such right or any other right under this Agreement.

  
 8.11 Liberal Construction. This Agreement
constitutes a fully-negotiated agreement between commercially sophisticated parties, each assisted by legal counsel, and the terms of this Agreement shall not be construed or interpreted for or against either party hereto because that party or its
legal representative drafted or prepared such provision. 
  
 8.12 Severability. If any provision of this Agreement is invalid, illegal or unenforceable, such provision shall be deemed to be severed or deleted from this Agreement and the balance of this Agreement shall remain in full
force and effect notwithstanding such invalidity, illegality or unenforceability. 
  
 8.13 Good Faith and Fair Dealing. The parties hereto acknowledge and agree that the performances required by the provisions of this Agreement shall be undertaken in good faith, and with both parties
dealing fairly with each other. 
  

 11 

 8.14 No Third Party Beneficiaries. This Agreement does not create, and shall not be
construed to create, any rights enforceable by any person, partnership, corporation, joint venture, limited liability company or other form of organization or association of any kind that is not a party to this Agreement. 
  
 8.15 Execution in Counterparts; Facsimile Signatures. This
Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The signature page of any counterpart may be detached therefrom without impairing the legal
effect of the signature(s) thereon, provided such signature page is attached to any other counterpart identical thereto except for having an additional signature page executed by the other party. Each party agrees that the other party may rely upon
the facsimile signature of the other party on this Agreement as constituting a duly authorized, irrevocable, actual, current delivery of this Agreement as fully as if this Agreement contained the original ink signature of the party supplying a
facsimile signature. 
  
 8.16 Time of the Essence.
Time is of the essence of each and every provision of this Agreement. Unless business days are expressly provided for, all references to “days” herein shall refer to consecutive calendar days. If any date or time period provided for in
this Agreement is or ends on a Saturday, Sunday or federal, state or legal holiday, then such date shall automatically be extended to the next day which is not a Saturday, Sunday or federal, state or legal holiday. 
  
 8.17 Number, Gender. As used herein, and as the circumstances
require, the plural term shall include the singular, the singular shall include the plural, the neuter term shall include the masculine and feminine genders, the masculine term shall include the neuter and the feminine genders, and the feminine term
shall include the neuter and the masculine genders. 
  
 IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first set forth above. 
  

			
	
	“Company”
	
	Basin Water, Inc.
		
	By:	 	 /s/ Peter L. Jensen

	Name:	 	Peter L. Jensen
	Title:	 	CEO
	
	“Employee”
	
	 /s/ Tom Tekulve

	Tom Tekulve

  

 12Standard Industrial/Commercial Single-Tenant Lease

 Exhibit 10.8 
  
 

 AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION 
  
 STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE – GROSS 
 (DO NOT USE THIS FORM FOR
MULTI-TENANT BUILDINGS) 
  
 1. Basic Provisions (“Basic
Provisions”) 
  
 1.1 Parties: This Lease
(“Lease”), dated for reference purposes only, June 7, 2002, is made by and between WHITE OAK, LLC, a Delaware limited liability company (“Lessor”) and BASIN WATER, INC., a California corporation (“Lessee”),
(collectively the “Parties,” or Individually a “Party”) 
  
 1.2 Premises: That certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, and commonly known as 8731 Prestige Court, Rancho Cucamonga located in the
County of San Bernardino, State of California, and generally described as (describe briefly the nature of the property and if applicable, the “Project”, if the property is located within a Project) An approximate 16,000 square foot
industrial building (“Premises”) (See also Paragraph 2) 
  
 1.3 Term: 3 years and 36 months months (“Original Term”) commencing July 1, 2002 (“Commencement Date”) and ending June 30, 2005 (“Expiration Date”) (See also Paragraph 3)

  
 1.4 Early Possession:
                     (“Early Possession Date”) (See also Paragraphs 3.2 and 3.3) 
  
 1.5 Base Rent: $7,680.00 per month (“Base Rent”) payable on
the 1st day of each month commencing July 1, 2002 (See also Paragraph 4) 
  
 x If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted 
  
 1.6 Base Rent and Other Monies Paid Upon Execution: 
  
 (a) Base Rent: $7,680.00 for the period July 1, 2002 through July 31, 2002 
  
 (b) Security Deposit: $15,824.00 (“Security Deposit”) (See also Paragraph 5), $7,680.00 of which shall be
applied to Lessee’s Base Rent during month 13 of the Initial Lease Term. 
  
 (c) Association Fees: $             for the period             

 
 (d) Other:
$             for              
  
 (e) Total Due Upon Execution of this Lease: $23,504.00 
  
 1.7 Agreed Use: General offices and warehouse for distribution and assembly of water purification equipment (See also
Paragraph 6) 
  
 1.8 Insuring Party: Lessor is the
“Insuring Party”. The annual “Base Premium” is $1,861.00 (See also Paragraph 8) 
  
 1.9 Real Estate Brokers: (See also Paragraph 15) 
  
 (a) Representation: The following real estate brokers (the “Brokers”) and brokerage relationships exist in this transaction (check
applicable boxes): 
  
 x Teresia Knight/NAI
Capital represents Lessor exclusively (“Lessor’s Broker”); 
  
 x William Kim and Michael McCrary/Collier’s Seeley represents Lessee exclusively (“Lessee’s Broker”); or 
  
  ̈ —————— represents both Lessor and Lessee (“Dual Agency”). 
  
 (b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Broker the fee agreed to in their
separate written agreement (or if there is no such agreement, the sum of              or 6% of the total Base Rent) for the brokerage services rendered by the Brokers Commission to
be split equally between Lessor’s Broker and Lessee’s Broker. 
  
 1.10 Guarantor. The obligations of the Lessee under this Lease are to be guaranteed by —————— (“Guarantor”). (See also Paragraph 37) 
  
 1.11 Attachments: Attached hereto are the following, all of which
constitute a part of this Lease: 
  
 x an
Addendum consisting of Paragraphs 1 through 16; 
  
 x a plot plan depicting the Premises; 
  
 x a current set of the Rules and Regulations; 
  
  ̈ a Work Letter; 
  
  ̈ 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 broom clean and free of debris on the Commencement Date or
the Early Possession Date, whichever first occurs (“Start Date”), and so long as the required service contracts described in Paragraph 7.1(c) below are obtained by Lessee and in effect within thirty days following the Start Date warrants
that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems (“HVAC”), loading doors, sump pumps, if any and all other such elements in the Premises, other than those constructed by
Lessee, shall be in good operating condition on said date and that the surface and structural elements of the roof, bearing walls and foundation of any buildings on the Premises (the “Building”) shall be free of material defects. If a
non-compliance with said warranty exists as of the Start Date, or if one of such systems or elements should malfunction or fail within the appropriate warranty period. Lessor shall, as Lessor’s sole obligation with respect to such matter,
except as otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, malfunction or failure rectify same at Lessor’s expense. The warranty
periods shall be as follows: (i) 6 months as to the HVAC systems, and 
  

					
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 Page 1 of 12 

 120 days to the remaining systems and other elements of the Building. If Lessee does not give Lessor the required notice
within the appropriate warranty period of any such non-compliance, malfunction or failure shall be the obligation of Lessee or Lessee’s sole cost and expense except for the roof, foundations and bearing walls which are handled as provided in
paragraph 7. 
  
 2.3 Compliance. Lessor warrants that the
improvements on the Premises comply with the building codes, applicable laws, covenants or restrictions of record, regulations, and ordinances (“Applicable Requirements”) that were in effect at the time that each improvements or portion
thereof, was constructed Said warranty does not apply to the use to which Lessee will put the Premises modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee’s use (see Paragraph
50), or to any Alterations or Utility installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible for determining whether or not the Applicable Requirements, and especially the zoning, are appropriate for
Lessee’s intended use, and acknowledges that past uses of the Premises may no longer be allowed. If the Premises do not comply with said warranty. Lessor shall, except as otherwise provided, promptly after receipt of written notice from Lessee
setting forth with specifically the nature and extent of such non-compliance, rectify the same at Lessor’s expense. If Lessee does not give Lessor written notice of a non-compliance with this warranty within 6 months following the Start Date,
correction of that non-compliance shall be the obligation of Lessee at Lessee’s sole cost and expense. If the Applicable Requirements are hereafter changed so as to require during the term of this Lease the construction of an addition to or an
alteration of the Premises and/or Building, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Unit, Premises and/or Building (“Capital Expenditure”). Lessor and Lessee shall allocate the
cost of such work as follows: 
  
 (a) Subject to Paragraph 2.3(c)
below, if such Capital Expenditures are required as a result of the specific and unique use of the Premises by Lessee as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, however that if such
Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds 6 months’ Base Rent, Lessee may instead terminate this Lease unless Lessor notifies Lessee in writing within 10 days after receipt of
Lessee’s termination notice that Lessor has elected to pay the difference between the actual cost thereof and an amount equal to 6 months’ Base Rent. If Lessee elects termination, Lessee shall immediately cease the use of the Premises
which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize
the Premises without commencing such Capital Expenditure 
  
 (b)
If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated seismic modifications) then Lessor and Lessee shall allocate the obligation to pay for such costs pursuant to
the provisions of Paragraph 7.1(d); provided, however, that if such Capital Expenditure is required during the last 2 years of this Lease or if Lessor reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall
have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessor’s termination notice that Lessee will pay for such Capital Expenditure. If
Lessor does not elect to terminate, and fails to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with interest, from Rent until Lessor’s share of such costs have been fully paid. If Lessee is
unable to finance Lessor’s share, or if the balance of the Rent due and payable for the 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 non-voluntary, unexpected, and new Applicable Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use,
change in intensify of use, or modification to the Premises then, and in that event, Lessee shall either: (i) immediately cease such changed use or intensity of use and/or take such other steps as may be necessary to eliminate the requirement
for such Capital Expenditure, of (ii) complete such Capital Expenditure at its own expense. Lessee shall not, however, have any right to terminate the Lease. 
  
 2.4 Acknowledgements. Lessee acknowledges that: (a) it has been advised by Lessor and/or Brokers to satisfy itself with
respect to the condition of the Premises (including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities Act), and their
suitability for Lessee’s intended use, (b) Lessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises, and
(c) neither Lessor, Lessor’s agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. In addition, Lessor acknowledges that: (i) Brokers have
made no representations, promises or warranties concerning Lessee’s ability to honor the Lease or suitability to occupy the Premises and (ii) it is Lessor’s sole responsibility to investigate the financial capability and/or
suitability of all proposed tenants. 
  
 2.5 Lessee as Prior
Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior to the Start Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary
corrective work. 
  
 3. Term. 
  
 3.1 Term. The Commencement Date Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3. 
  
 3.2 Early Possession.
If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such early possession. All other terms of this Lease (including but not limited to the obligations
to pay Real Property Taxes and insurance premiums and to maintain Premises) shall, however, be in effect during such period. Any such early Possession shall not affect the Expiration Date. 
  
 3.3 Delay in Possession. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the Commencement Date. If despite said efforts, Lessor is unable to deliver possession 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, 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 Lessee 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 in Lessor under the
terms of this Lease (except for the Security Deposit) are deemed to be rent (“Rent”) 
  
 4.2 Payment. Lessor 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 right to the balance of such Rent, regardless of Lessor’s
endorsement of any check so stating. In the event that any check, draft, or other instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charge and Lessor
at its option, may require all future payments to be made by Lessee to be by cashier’s check. Payment 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. 
  
 4.3 Association Fees. In addition to the Base Rent, Lessee shall pay to Lessor each month an amount equal to any owner’s association or condominium fees levied or assessed against the Premises Said monies shall
be paid at the same time and in the same manner as the Base Rent. 
  
 5. Security
Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee’s faithful performance of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease. Lessor
may use, apply or retain all or any portion of said Security Deposit for the payment of any amount due Lessor or to reimburse or compensate Lessor for any liability expense loss or damage which Lessor may suffer or incur by reason thereof. If Lessor
uses or applies all or any portion of the Security Deposit. Lessee shall within 10 days after written request therefore deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lessee 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 increase 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. 
  

					
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 Page 2 of 12 

 6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which
is reasonably comparable thereto, and for no other purpose Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring
premises or properties. Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvements on the Premises or the
mechanical or electrical systems therein, and/or is not significantly more burdensome to the Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after such request give written notification of same, which notice shall include
an explanation of Lessor’s objections to the change in the Agreed Use. 
  
 6.2 Hazardous Substances. 
  
 (a)
Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease shall mean any product, substance, or waste whose presence. Use, manufacture, disposal, transportation, or release, either by itself or in combination
with other materials expected to be on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a
basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or
any products, by-products or fractions thereof. Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at
Lessee’s expense) with all Applicable Requirements “Reportable Use” shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal
of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a Hazardous
Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering of occupying the Premises or neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials
reasonably required to be used in the normal course of the Agreed Use ordinary office supplies (copier toner, liquid paper, glue, etc) and common household cleaning materials, so long as such use is in compliance with all Applicable Requirements, is
not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may condition its consent to any Reportable Use upon
receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability, including, but not limited to, the installation (and
removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) and/or increasing the Security Deposit. 
  
 (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about
the Premises, other than as previously consented to by Lessor. Lessee shall immediately give written notice of such fact to Lessor and provide Lessor with a copy of any report, notice, claim or other documentation which it has concerning the
presence of such Hazardous Substance. 
  
 (c) Lessee Remediation.
Lessee shall not cause or permit any Hazardous Substance to be spilled or released in on, under, or about the Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee’s expense, comply with all Applicable
Requirements and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and/or remedial action reasonably
recommended, whether or not formally ordered of 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 and Hazardous Substance brought onto the Premises during the term of this Lease, by or for Lessee, or any third party. 
  
 (d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents, employees, lenders and ground lessor, if any, harmless from and
against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys’ and consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or
any third party (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties not caused or contributed to by Lessee).
Lessee’s obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous
Substances, unless specifically so agreed by Lessor in writing at the time of such agreement. 
  
 (e) Lessor Indemnification Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages including the
cost of remediation which result from Hazardous Substances which existed on the Premises prior to Lessee’s occupancy or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees Lessor’s obligations,
as and when required by the Applicable Requirements, shall include but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement and shall survive the expiration or termination of this Lease. 
  
 (f) Investigations and Remediations. Lessor shall retain the responsibility
and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee’s occupancy, unless such remediation measure is
required as a result of Lessee’s use (including “Alterations”, as defined in paragraph 7.3(a) below) of the Premises in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities at
the request of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the premises at reasonable times in order to carry out Lessor’s investigative and remedial responsibilities. 
  
 (g) Lessor Termination Option. If a Hazardous Substance Condition (see
Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally responsible therefor (in which case Lessee shall make the investigation and remediation thereof required by the Applicable Requirements and this Lease shall continue in
full force and effect, but subject to Lessor’s rights under Paragraph 6.2(d) and Paragraph 13). Lessor may, at Lessor’s option, either (i) investigate and remediate such Hazardous Substance Condition if required, as soon as reasonably
possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, of (iii) 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 of 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 consultant which relate
in any manner to the such Requirements, without regard to whether such Requirements are now in effect or become effective after the Start Date. Lessee shall, within 10 days after receipt of Lessor’s written request, provide Lessor with copies
of all permits and other documents, and other information evidencing Lessee’s compliance with any Applicable Requirements specified by Lessor, and shall immediately upon receipt notify Lessor in writing (with copies of any documents involved)
of any threatened or actual claim, notice, citation, warning compliant or report pertaining to or involving the failure of Lessee of 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 after reasonable notice, for the purpose of inspecting the condition of the Premises and
for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance Condition (see paragraph 9.1) is found to exist or be imminent or
the inspection is requested or ordered by a governmental authority. In such case Lessee shall upon request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or contamination. In
addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10 days of the receipt of a written request therefor. 
  

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

7.1. Lessee’s Obligations 
  
 (a) In General, subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance). 6.3 (Lessee’s Compliance with Applicable Requirements), 7.2
(Lessor’s Obligations), 9 (Damage or Destruction), and 1.4 (Condemnation). Lessee shall at Lessee’s sole expense, keep the Premises, Utility Installations (intended for Lessee’s exclusive use, no matter where located), and Alterations
in good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of
Lessee’s use any prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment or facilities, such as plumbing, HVAC equipment electrical lighting facilities, boilers, pressure vessels, fire
protection system, fixtures, walls (interior and exterior), ceilings, floors, windows doors, plate glass, skylights, landscaping, driveways, parking lots, fences retaining walls, signs, sidewalks and parkways located in, on, or adjacent to the
Premises Lessee is also responsible for keeping the roof and roof drainage clean and free of debris Lessor shall keep the surface and structural elements of the roof, foundations, and bearing walls in good repair (see paragraph 7.2) Lessee, in
keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices, specifically including the procurement and maintenance of the service contracts required by Paragraph 7.1(b) below Lessee’s
obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair Lessee shall, during the term of this Lease, keep the
exterior appearance of the Building in a first-class condition (including, eg graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including, when necessary, the exterior
repainting of the Building. 
  

					
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 (b) Service Contracts. Lessee shall, at Lessee is sole expense, procure and maintain contracts, with
copies to Lessor, in customary form and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and improvements, if any, if and when installed the Premises: (i) HVAC equipment,
(ii) boiler, and pressure vessels, (iii) portable fire extinguishing systems, including fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) clarifiers; (vi) basic utility feed to the perimeter of
the Building, and (viii) any other equipment, if reasonably required by Lessor. However, Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all of such service contracts, and if Lessor so elects, Lessee shall
reimburse Lessor, upon demand, for the cost thereof. Lessee acknowledges that Lessor is directly contracted with intellisec/ADT for the Fire Alarm Monitoring/Maintenance and equipment Lease. Lessee shall reimburse Lessor for all associated costs.

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

(d) Replacement. Subject to Lessee’s Indemnification of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of liability
resulting from Lessee’s failure to exercise and perform good maintenance practices. If an item described in Paragraph 7.1(b) cannot be repaired other than at a cost which is in excess of 50% of the cost of replacing such item, then such
item shall be replaced by Lessor, and the cost thereof shall be prorated between the Parties and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease, on the date on which Base Rent is due, an amount equal
to the product of multiplying the cost of such replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (ie. 1/144th of the cost per month). Lessee shall pay interest on the unamortized balance at a rate that is
commercially reasonable in the judgment of Lessor’s accountants. Lessee may, however prepay its obligation at any time. 
  
 7.2 Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation).
It is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all of which obligations are intended to be that of the Lessee, except for the surface and
structural elements of the roof, foundations and bearing walls, the repair of which shall be the responsibility of Lessor upon receipt of written notice that such a repair is necessary. It is the intention of the Parties that the terms of this Lease
govern the respective obligations of the Parties as to maintenance and repair of the Premises, and they expressly waive the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of the Lease. 

 
 7.3 Utility Installations; Trade Fixtures; Alterations. 
  
 (a) Definitions. The term “Utility Installations” refers to all
floor and window coverings, air and/or vacuum lines, power panels, electrical distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises. The term
“Trade Fixtures” shall mean Lessee’s machinery and equipment that can be removed without doing material damage to the Premises. The term “Alterations” shall mean any modification of the improvements, other than Utility
Installations or Trade Fixtures, whether by addition or deletion. “Lessee Owned Alterations and/or Utility Installations” are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to
Paragraph 7.4 (a) 
  
 (b) Consent. Lessee shall not make any
Alterations or Utility installations to the Premises without Lessor’s prior written consent. Lessee may, however, make non-structural Utility installations to the interior of the Premises (excluding the roof) without such consent but upon
notice to Lessor, as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof or any existing walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost
thereof during this Lease as extended does not exceed a sum equal to 3 month’s Base Rent in the aggregate or a sum equal to one month’s Base Rent in any one year. Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written approval of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or
Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans. Consent shall be deemed conditioned upon Lessee’s: (i) acquiring all
applicable governmental permits. (ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions of said permits and other Applicable
Requirements in a prompt and expeditious manner. Any Alterations or Utility installations shall be performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as-built plans and
specifications. For work which costs an amount in excess of one month’s Base Rent, Lessor may condition its consent upon Lessee providing a lien and completion bond in an amount equal to 150% of the estimated cost of such Alteration or Utility
Installation and/or upon Lessee’s posting an additional Security Deposit with Lessor. 
  
 (c) Liens; Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or may be secured by any
mechanic’s or materialmen’s lien against the Premises or any interest therein. Lessee shall give Lessor not less than 10 days notice prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to
post notices of non-responsibility. If Lessee shall contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shall furnish a surely bond in an amount equal to 150% of the amount of such contested lien, claim or demand, indemnifying Lessor against
liability for the same. If Lessor elects to participate in any such action, Lessee shall pay Lessor’s attorneys’ fees and costs. 
  
 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 Lessee, 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 of all Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of this Lease. Lessor may require the
removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent. 
  
 (c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with all of the improvements,
parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted. “Ordinary wear and tear” shall not include any damage or deterioration that would have
been prevented by good maintenance practice. Notwithstanding the foregoing, if this Lease is for 12 months or less, then Lessee shall surrender the Premises in the same condition as delivered to Lessee on the Start Date with NO allowance for
ordinary wear and tear. Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations furnishings, and equipment as well as the removal of any storage
tank installed by or for Lessee. Lessee shall completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous Substances which were deposited via underground
migration from areas outside of the Premises, or if applicable, the Project) even if such removal would require Lessee to perform or pay for work that exceeds statutory requirements. Trade Fixtures shall remain the property of Lessee and shall be
removed by Lessee. Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The
failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below. 
  
 8. Insurance; Indemnity. 
  
 8.1 Payment of Premium Increases 
  

(a) Lessee shall pay to Lessor any insurance cost increase (“Insurance Cost Increase”) occurring during the term of this Lease Insurance Cost
Increase is defined as any increase in the actual cost of the insurance required under Paragraph 8.2(b), 8.3(a) and 8.3(b). (“Required Insurance”), over and above the Base Premium as hereinafter defined calculated on an annual basis
Insurance Cost Increase shall include but not be limited to increases resulting from the nature of Lessee’s occupancy, any act or omission of Lessee, requirements of the holder of mortgage or deed of trust covering the Premises, increased
valuation of the Premises and/or a premium rate increase. The parties are encouraged to fill in the Base Premium in paragraph 1.9 with a reasonable premium for the Required Insurance based on the Agreed Use of the Premises. If the parties fail to
insert a dollar amount in Paragraph 1.9, then the Base Premium shall be the lowest annual premium reasonably obtainable for the Required Insurance as of the commencement of the Original Term for the Agreed Use of the Premises. In no event, however,
shall Lessee be responsible for any portion of the increase in the premium cost attributable to liability insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per occurrence. 
  
 (b) Lessee shall pay any such Insurance Cost Increase to Lessor within 30
days after receipt by Lessee of a copy of the premium statement or other reasonable evidence of the amount due. If the insurance policies maintained hereunder cover other property besides the Premises, Lessor shall also deliver to Lessee a statement
of the amount of such Insurance Cost Increase attributable only to the Premises showing in reasonable detail the manner in which such amount was computed. Premiums for policy periods commencing prior to, or extending beyond the term of this Lease,
shall be prorated to correspond to the term of this Lease. 
  
 8.2
Liability Insurance. 
  
 (a) Carried by Lessee. Lessee shall
obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily injury personal injury and property damage based upon or arising out of the ownership, use,
occupancy or maintenance of the Premises and all areas appurtenant thereto. Such Insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per occurrence with an annual aggregate of not less than
$2,000,000, 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 
  

					
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 with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only. 
  
 (b) Carried by Lessor. Lessor shall maintain liability insurance as described
in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein. 
  
 8.3 Property Insurance - Building, Improvements and Rental Value. 
  
 (a) Building and Improvements. The Insuring Party shall obtain and keep in
force a policy or policies in the name of Lessor, with loss payable to Lessor, any ground-lessor, and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be equal to the full replacement cost of the Premises, as
the same shall exist from time to time, or the amount required by any Lender, but in no event more than the commercially reasonable and available insurable value thereof. If Lessor is the Insuring Party however, Lessee Owned Alterations and Utility
installations, Trade Fixtures, and Lessee’s personal property shall be insured by Lessee under Paragraph 8.4 rather than by Lessor. If the coverage is available and commercially appropriate, such policy or policies shall insure against all
risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a Lender or included in the Base Premium), including coverage for debris removal and the enforcement of any Applicable Requirements requiring
the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause waiver of
subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to
where the Premises are located. If such insurance coverage has a deductible clause, the deductible amount shall not exceed $1,000 per occurrence, and Lessee shall be liable for such deductible amount in the event of an Insured Loss. 

 
 (b) Rental Value. The Insuring Party shall obtain and keep in force a
policy or policies in the name of Lessor with loss payable to Lessor and any Lender, insuring the loss of the full Rent for one year with an extended period of indemnity for an additional 180 days (“Rental Value insurance”). Said
insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee shall be
liable for any deductible amount in the event of such loss. 
  
 (c) Adjacent Premises. If the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent to the Premises, the Lessee shall pay for any increase in the premiums for the property insurance of such
building or buildings if said increase is caused by Lessee’s acts, omissions, use or occupancy of the Premises. 
  
 8.4 Lessee’s Property; Business interruption insurance. 
  
 (a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee’s personal property. Trade Fixtures, and Lessee Owned
Alterations and Utility installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal
property, Trade Fixtures and Lessee Owned Alterations and Utility installations. Lessee shall provide Lessor with written evidence that such insurance is in force. 
  
 (b) Business Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will
reimburse Lessee for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to prevention of access to the Premises as a result of such perils. 

 
 (c) No Representation of Adequate Coverage. Lessor makes no representation
that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee’s property, business operations or obligations under this Lease. 
  
 8.5 Insurance Policies. Insurance required herein shall be by companies duly licensed or admitted to transact business in
the state where the Premises are located, and maintaining during the policy term a “General Policyholders Rating” of at least 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 of which the Premises are a part, 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. 
  
 8.9 Failure to Provide insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose Lessor
to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain the required insurance
and/or does not provide Lessor with the required binders or certificates evidencing the existence of the required insurance, the Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of
the then existing Base Rent or $100, whichever is greater. The parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional risk/ costs that Lessor will incur by reason of Lessee’s failure to
maintain the required insurance. Such increase in Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of any of the other rights and remedies
granted hereunder, not relieve Lessee of its obligation to maintain the insurance specified in this Lease. 
  
 9 Damage or Destruction. 
  
 9.1
Definitions. 
  
 (a) “Premises Partial Damage” shall
mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify
Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total. 
  
 (b) “Premises Total Destruction” shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations
and Trade Fixtures which cannot reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is
Partial or Total. 
  
 (c) “Insured Loss” shall mean
damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective
of any deductible amounts or coverage limits involved. 
  
 (d)
“Replacement Cost” shall mean the cost or repair to rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required
by the operation of Applicable Requirements, and without deduction for depreciation. 
  
 (e) “Hazardous Substance Condition” shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance as defined in Paragraph 6.2(a), in on, or
under the Premises which requires repair, remediation or restoration. 
  
 9.2 Partial Damage – Insured Loss. If a Premises Partial Damage that is an insured Loss occurs, then Lessor shall, at Lessor’s expense, repair such damage (but no Lessee’s Trade Fixtures or Lessee Owned Alterations and
Utility installations) as soon as reasonably possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall at Lessor’s election, make the repair of any damage or destruction the total cost to repair of
which is $10,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required insurance was not in force or the insurance
proceeds are not sufficient to effect such repair, the insuring Party shall promptly contribute the shortage in proceeds (except as to the deductible which is Lessee’s responsibility) as and when required to complete said repairs. In the event,
however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available. Lessor shall have no obligation to pay for the shortage in
insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within 10 days following receipt of written notice of such shortage and request
therefor. If Lessor receives said funds or adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full force and effect. If
such funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10 days thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds, in
which case this Lease shall remain in full force and effect or (ii) 
  

					
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 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 [illegible] 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 or 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 events 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 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 Premise 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) of 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. Definition. As used
herein, the term “Real Property Taxes” shall include any form of assessment; real estate, general, special, ordinary of extraordinary, or rental levy or tax (other than inheritance personal income or estate taxes); improvement bond; and/or
license fee imposed upon or levied against any legal or equitable interest of Lessor in the Premises of the Project, Lessor’s right to other income therefrom, and/or Lessor’s business of leasing, by any authority having the direct or
indirect power to tax and where the funds are generated with reference to the Building address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Premises are
located. Real Property Taxes shall also include any tax, fee, levy, assessment or charge, or any increase therein: (i) imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership
of the Premises, and (ii) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease 
  
 10.2 (a) Payment of Taxes. Lessor shall pay the Real Property Taxes applicable to the Premises provided, however, that Lessee shall pay to Lessor the
amount, if any, by which Real Property Taxes applicable to the Premises increase over the fiscal tax year during which the Commencement Date Occurs (“Tax Increase”) Payment of any such Tax Increase shall be made by Lessee to Lessor within
30 days after receipt of Lessor’s written statement setting forth the amount due and computation thereof If any such taxes shall cover any period of time prior to or after the expiration or termination of this Lease, Lessee’s share of such
taxes shall be prorated to cover only that portion of the tax bill applicable to the period that this Lease is in effect. In the event lessee incurs a late charge on any Rent payment, Lessor may estimate the current Real Property Taxes, and require
that the Tax Increase be paid in advance to Lessor by Lessee monthly in advance with the payment of the Base Rent. Such monthly payment shall be an amount equal to the amount of the estimated installment of the Tax Increase divided by the number of
months remaining before the month in which said Installment becomes delinquent. When the actual amount of the applicable Tax Increase is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds
needed to pay the applicable Tax Increase. If the amount collected by Lessor is insufficient to pay the Tax Increase when due, Lessee shall pay Lessor, upon demand, such additional sums as are necessary to pay such obligations. Advance payments may
be intermingled with other moneys of Lessor and shall not bear interest. In the event of a Breach by Lessee in the performance of its obligations under this Lease, then any such advance payments may be treated by Lessor as an additional Security
Deposit. 
  
 (b) Additional Improvements. Notwithstanding anything
to the contrary in this Paragraph 10.2, Lessee shall pay to Lessor upon demand therefor the entirety of any increase in Real Property Taxes assessed by reason of Alterations or Utility Installations placed upon the Premises by Lessee or at
Lessee’s request. 
  
 10.3 Joint Assessment. If the Premises
are not separately assessed, Lessee’s liability shall be an equitable proportion of the Tax Increase for all of the land and improvements included within the tax parcel assessed, such proportion to be conclusively determined by Lessor from the
respective valuations assigned in the assessor’s work sheets or such other information as may be reasonably available. 
  
 10.4 Personal Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause its Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property of Lessor If any of Lessee’s said property shall be assessed with Lessor’s real property, Lessee shall pay Lessor the taxes attributable to Lessee’s property within
10 days after receipt of a written statement setting forth the taxes applicable to Lessee’s property. 
  
 11. Utilities and Services. Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon. If any such
services are not separately metered or billed to Lessee, Lessee shall pay a reasonable proportion, to be determined by Lessor, of all charges jointly metered or billed. There shall be no abatement of rent and Lessor shall not be liable in any
respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor’s reasonable control or in cooperation with
governmental request or directions. 
  
 12. Assignment and Subletting. 

 
 12.1 Lessor’s Consent Required 
  
 (a) Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage or encumber (collectively, “assign or assignment”) or sublet all or any part of Lessee’s interest in this Lease or in the Premises without Lessor’s prior written consent. 
  
 (b) Unless Lessee is a corporation and its stock is publicly traded on a
national stock exchange, a change in the control of Lessee shall constitute an assignment requiring consent. The transfer on a cumulative basis, of 25% or more of the voting control of Lessee shall constitute a change in control for this purpose.

  
 (c) The involvement of Lessee or its assets in any transaction
or series of transactions (by way of merger, sale, acquisition, financing, transfer, leveraged buy-out or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee’s assets occurs, which results or will result in a
reduction of the Net Worth of Lessee by an amount greater than 25% of such Net Worth as it was represented at the time of the execution of this Lease or at the time of the most recent assignment to which Lessor has consented, or as it exists
immediately prior to said transaction or transactions constituting such reduction, whichever was or is greater, shall be considered an assignment of this Lease to which Lessor may withhold its consent “Net Worth of Lessee” shall mean the
net worth of Lessee (excluding any guarantors) established under generally accepted accounting principles. 
  
 (d) An assignment of subletting without consent shall at Lessor’s option, be a Default curable after notice per Paragraph 13.1(c) or a 
  

					
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 Reach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or
subletting as a non-curable lessor may either: (i) terminate this Leese, or (ii) upon 30 days written notice, increase the monthly Base Rent to 110% of the Base Rent then in 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 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 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 obligation 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 or Lessee’s Default or Breach 
  
 (c) Lessor’s consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting. 
  
 (d) In the event of any Default or Breach by Lessee, Lessor may proceed
directly against Lessee, any Guarantors or anyone else responsible for the performance of Lessee’s obligations under this Lease, including, any assignee or sublessee, without first exhausting Lessor’s remedies against any other person or
entity responsible therefor to Lessor, or any security held by Lessor 
  
 (e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor’s determination as to the financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or required modification of the Premises, if any, together with a fee of $500 as consideration for Lessor’s considering and processing said request. Lessee agrees to
provide Lessor with such other or additional information and/or documentation as may be reasonably requested. (See also Paragraph 36) 
  
 (f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment 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 In the event that the amount collected by Lessor exceeds
Lessee’s obligations any such excess shall be refunded in Lessee. Lessor shall not, by reason of the forgoing 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 form the time of the
exercise of said option to the expiaration of such sublease; provide, 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 subiesse, who shall have the right to cure the Default of Lessee
whithin 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 42, (viii) material safety data sheets (MSDS), or (ix) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of 10 days
following written notice to Lessee. 
  
 (d) A Default by Lessee as
to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, other than those described in subparagraphs 13 1(a), (b) or (c), above, where such Default continues for a period of 30 days after
written notice; provided, however, that if the nature of Lessee’s Default is such that more than 30 days are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period
and thereafter diligently prosecutes such cure to completion. 
  
 (e) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii) becoming a “debtor” as defined in 11 U.S.C §101 or any successor statute
thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of
Lessee’s interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of
Lessee’s interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in the event that any provision of this subparagraph (e) is contrary to any applicable law, such provision shall be of no force or
effect, and not affect the validity of the remaining provisions 
  
 (f) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false. 
  
 (g) If the performance of Lessee’s obligations under this Lease is guaranteed (i) the death of a Guarantor, (ii) the termination of a
Guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor’s becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor’s refusal to honor the
guaranty, or (v) a Guarantor’s breach of its guaranty obligation on an anticipatory basis and Lessee’s failure, within 60 days following written notice of any such event to provide written alternative assurance or security, which,
when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease. 
  
 13.2 Remedies. If Lessee fails to perform any of its affirmative duties or
obligations, within 10 days after written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duly or obligation on Lessee’s behalf, including but not limited to the obtaining of reasonably required
bonds, insurance policies, or governmental licenses, permits or approvals Lessee shall pay to Lessor an amount equal to 115% of the costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefore. In the event of a
Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach: 
  
 (a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case this Lease shall
terminate and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned at the time of termination; (ii) the worth at the time of award
of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the time of award
of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys’ fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to
the unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of
the District within which the Premises are located at the time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee’s Breach of this Lease shall not waive Lessor’s right to recover damages under Paragraph 12.
If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein, 
  

									
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 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
Leasee, any such inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under such an
inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph
shall not be deemed a waiver by lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance. 
  
 13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be
received by Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge equal to 10% of each such overdue amount or $100, whichever is
greater. The Parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such late payment. Acceptance of such late charge by Lessor shall in no event constitute a waiver of
Lessee’s Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for 3
consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor’s option, become due and payable quarterly in advance. 
  
 13.5 Interest. Any monetary payment due Lessor hereunder, other than late
charges, not received by Lessor, when due as to scheduled payments (such as Base Rent) or within 30 days following the date on which it was due for non-scheduled payment, shall bear interest from the date when due, as to scheduled payments, or the
31st day after it was due as to non-scheduled payment. 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 Building, or more than 25% of that portion of the Premises not occupied by any building, is taken by
Condemnation, Lessee may, at Lessee’s option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within 10 days after the condemning authority shall
have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion
of the Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be the property of Lessor, whether such award
shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation for Lessee’s relocation expenses, loss of
business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this paragraph. All Alterations and Utility installations made to the Premises by Lessee, for purposes of Condemnation
only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor. In the event that this lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to
Premises caused by such Condemnation 
  
 15. Brokerage Fees. 
  
 15.1 Additional Commission. In addition to the payments owed
pursuant to Paragraph 1.9 above, and unless Lessor and the Brokers otherwise agree in writing, Lesser agree that; (a) if Lessee exercises any Option (b) if Lessee acquires any rights to the premises or other premises owned by Lessor and located
within the same project if any, within which the premises is located, (c) if Lessee remains in possession of the Premises, with the consent of Lessor, after the application of this Lease or (d) if Lease Rent is increased, whether by agreement or
operation of an ascertain clause herein, then, Lesser shall pay Brokers a fee in accordance with the schedule of the Beaker in effect at the time of the execution of the Lease 
  
 15.2 Assumption of Obligations. Any buyer or transferee of Lesser’s interest in the Lease shall be deemed to
have assumed Lesser’s obligation hereunder Brokers shall be third party beneficiaree of the provisions of paragraphs 10,15,22, and 31 if Lesser fails to pay to Brokers any amounts due as and for brokerage fee pertaingin to this Lease when due,
then such amounts shall accrue interest In addition if Lesser 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 falls to pay such amounts within
10 days after said notice shall pay monois to its Broker and effect 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 breakage 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 held 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,
attorney’s fees reasonably incurred with respect thereto. 
  
 16. Estoppel
Certificates. 
  
 (a) Each party (as “Responding
Party”) shall within 10 days after written notice from the other Party (the “Requesting Party”) execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current “Estoppel
Certificate” form published by the American Industrial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party. 
  
 (b) If the Responding Party shall fail to execute or deliver the Estoppel
Certificate within such 10 day period, the Requesting Party may executed 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 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 transfree 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 price Lessor shall be relieved or all liability with respect to the obligations and/or convenants 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 
  

					
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 by the Lessor shall be binding only upon the Lessor as hereinabove defined 
  
 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 
  
 Days. Unless otherwise specifically indicated to the contrary, the word “days” as used in this Lease shall mean and refer to calendar days

  
 20. Limitation on Liability. The obligations of Lessor under this Lease shall
not constitute personal obligations of Lessor or its partners, members, directors, officers or shareholders, and Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to
this Lease, and shall not seek recourse against Lessor’s partners, members, directors, officers of 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 is
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 almost 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 of desirability of the property that are not known to, or within the diligent attention and observation of the Parties.
An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. 
  
 (ii) Lessee’s Agent. An agent can agree to act as agent for the Lessee only. In these situations, the agent is
not the Lessor’s agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Lessor. An agent acting only for a Lessee has the following affirmative obligations. To the Lessee:
A fiduciary duty of Utmost care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the Lessor: a Diligent exercise of reasonable skills and care in performance of the agent’s duties. b. A duty of honest and
fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not
obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. 
  
 (iii) Agent Representing Both Lessor and Lessee A real estate agent, either acting directly or through one or more associate licenses, can legally
be the agent of both the Lessor and the Lessee in a transaction, but only with the knowledge and consent of both the Lessor and the Lessee. In a dual agency situation, the agent has the following affirmative obligations to both the Lessor and the
Lessee: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Lessor or the Lessee. b. Other duties to the Lessor and the Lessee as stated above in subparagraphs (i) or (ii). In representing both Lessor
and Lessee, the agent may not without the express permission of the respective Party, disclose to the other Party that the Lessor will accept rent in an amount less than that indicated in the listing or that the Lessee is willing to pay a higher
rent than that offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they
adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional 
  
 (b) Brokers have no responsibility with respect to any default or breach
hereof by either Party. The liability (including court costs and attorneys’ fees), of any Broker with respect to any breach of duty, error or omission relating to this Lease shall not exceed the fee received by such Broker pursuant to this
Lease; provided, however, that the foregoing limitation on each Broker’s liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 
  
 (c) Lessor and Lessee agree to identify to Brokers as “Confidential” any communication or information given
Brokers that is considered by such Party to be confidential 
  
 26. No Right To
Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over, then the Base Rent shall be increased to 150% of the Base Rent applicable
immediately preceding the expiration or termination. 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 
  

					
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 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 little to the Premises or the Premises are acquired by another upon the foreclosure or termination of
a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3, attorn to such new owner, and upon request, enter into a new lease, containing all of the terms and provisions
of this Lease, with such new owner for the remainder of the term hereof, or, at the election of such new owner, this Lease shall automatically become a new Lease between Lessee and such new owner, upon all of 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, than Lessee may, at Lessee’s option, directly contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement. 
  
 30.4 Self-Executing. The agreements contained in this Paragraph 30 shall be
effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such further
writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance Agreement provided for herein. 
  
 31. Attorneys’ Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights
hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action or appeal thereon shall be entitled to reasonable attorneys’ fees Such fees may be awarded in the same suit or recovered in a separate suit whether or not
such action or proceeding is pursued to decision or judgment. The term, “Prevailing Party” shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by
compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys’ fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all
attorneys’ fees reasonably incurred in addition, Lessor shall be entitled to attorneys’ fees, costs and expenses incurred in the preparation and service of notices of Default and consultations in connection therewith, whether or not a
legal action is subsequently commenced in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation). 
  
 32. Lessor’s Access; Showing Premises; Repairs Lessor and Lessor’s agents shall have the right to enter the Premises at any time,
in the case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the
Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises as long as there is not material adverse effect to Lessee’s use of
the Premises. All such activities shall be without abatement of rent or liability to Lessee. 
  
 33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor’s prior written consent. Lessor shall not be obligated to exercise any standard of reasonableness
in determining whether to permit an auction. 
  
 34. Signs, Lessor may place on
the Premises ordinary “For Sale” signs at any time and ordinary “For Lease” signs during the last 6 months of the term hereof. Except for ordinary “for sublease” signs. Leasee shall not place any sign upon the Premises
without Lessor’s prior written consent. All signs must comply with all Applicable Requirements. 
  
 35. Termination: Merger Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by
Lessor for Breach by Lessee, shall automatically terminate any sublease or lessor estate in the Premises; provided, however, the Lessor may elect to continue any one or all existing subtenancies. Lessor’s failure within 10 days following any
such event to elect to the contrary by written notice to the holder of any such lesser interest, shall constitute Lessor’s election to have such event constitute the termination of such interest. 
  
 36. Consents. Except as otherwise provided herein, wherever in this Lease the consent of a
Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor’s actual reasonable costs and expenses (including but not limited to architects’, attorneys’, engineers’
and other consultants’ fees) incurred in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance,
shall be paid by Lessee upon receipt of an invoice and supporting documentation therefor Lessor’s consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor
shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor’s
consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given. In the event that either Party disagrees
with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons in writing and in reasonable detail within 10 business days following such request.

  
 37. Guarantor. 
  
 37.1 Execution. The Guarantors, if any, shall each execute a guaranty in the form most recently published by the American
Industrial Real Estate Association, and each such Guarantor shall have the same obligations as Lessee under this Lease. 
  
 37.2 Default. It shall constitute a Default of the Leasee 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 the covenants, conditions and provisions on Lessee’s part to be observed and
performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof. 
  
 39. Options. If Lessee is granted an Option, as defined below, then the following provisions shall apply: 
  
 39.1 Definition. “Option” shall mean: (a) the right to extend the term of or renew this Lease or to extend or
renew any lease that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to lease either the Premises or other property of Lessor; (c) the right to purchase or the right of first refusal to purchase the
Premises or other property of Lessor. 
  
 39.2 Options Personal To
Original Lessee. Any Option granted to Lessee in this Lease is personal to the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises
and, if requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting. 
  
 39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless the
prior Options have been validity exercised. 
  
 39.4 Effect of
Default on Options. 
  
 (a) Lessee shall have no right to
exercise an Option: (i) during the period commencing with the giving of any notice of Default and continuing until said Default is cured (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given
Lessee), (iii) during the time Lessee is in Breach of this Lease or (iv) in the event that Lessee has been given 3 or more notices of separate Default, whether or not the Defaults are cured, during the 12 month period immediately preceding the
exercise of the Option. 
  
 (b) The period of time within which an
Option may be exercised shall not be extended or enlarged by reason of Lessee’s inability to exercise an Option because of the provisions of Paragraph 39.4(a). 
  
 (c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee’s due and timely exercise of
the Option, if, after such exercise and prior to the commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent becomes due (without any necessity of Lessor to give
notice thereof), or (ii) if Lessee commits a Breach of this Lease. 
  
 40.
Multiple Buildings. If the Premises are a part of a group of buildings controlled by Lessor, Lessee agrees that it will abide by and conform to all reasonable rules and regulations which Lessor may make from time to time for the management, safety,
and care of said properties, including the care and cleanliness of the grounds and including the parking loading and unloading of vehicles, and to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform.
Lessee also agrees to pay its fair share of common expenses incurred in connection with such rules and regulations. 
  

					
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 41. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of
guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same Lessee assumes all responsibility for the protection of the Premises, its agents and invitees and their property from the acts of third
parties. 
  
 42. Reservations. Lessor reserves to itself the right, from time to
time, to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as much easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate any such easements rights, dedication, map or restrictions. 
  
 43. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum
of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment “under protest” and such payment shall not be regarded as a
voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said
Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay 
  
 44. Authority; Multiple Parties; Execution. 
  
 (a) If either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this Lease on behalf of such entity represents and warrants that he or she is
duly authorized to execute and deliver this Lease on its behalf. Each party shall, within 30 days after request, deliver to the other party satisfactory evidence of such authority 
  
 (b) If this Lease is executed by more than one person or entity as “Lessee”, each such person or entity shall be
jointly and severally liable hereunder. It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same
as if all of the named Lessees had executed such document. 
  
 (c)
This Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 
  
 45. Conflict. Any conflict between the printed provisions of this Lease and typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions. 
  
 46. Offer. Preparation of this Lease by
either Party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto 
  
 47. Amendments. This Lease may be modified only in writing, signed by the Parties in interest
at the time of the modification. As long as they do not materially change Lessee’s obligations hereunder, Lessee agrees to make such reasonable non-monetary modifications to this Lease as may be reasonably required by a Lender in connection
with the obtaining or normal financing of refinancing of the Premises. 
  
 48.
Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 
  
 49. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation and/or the Arbitration of all disputes between the Parties
and/or Brokers arising out of this Lease  ̈ is x is not attached to this Lease. 
  
 50. Americans with Disabilities Act. Since compliance with the Americans with Disabilities
Act (ADA) is dependent upon Lessee’s specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislation. In the event that Lessee’s use of the Premises
requires modifications or additions to the Premises in order to be in ADA compliance, Lessee agrees to make any such necessary modifications and/or additions at Lessee’s expense. 
  
 LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS
LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO
THE PREMISES 
  
 ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY
THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO: 
  
 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. 
  
 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES.
SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR
LESSEE’S INTENDED USE. 
  
 WARNING: IF THE PREMISES IS LOCATED IN A
STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED. 
  
 (SIGNATURES ON FOLLOWING PAGE) 
  

					
	 BB
	  	 	  	PLJ              
	 Initials
	  	 	  	Initials            
	 ©1997 – American Industrial Real Estate Association
	  	REVISED	  	FORM STG-8-7/01E

  

 Page 11 of 12 

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

									
	Executed at Newport Beach, California	 	 	 	Executed at: San Diego, California on:
	 	 	 	 	 	 	 	 	  

	 By LESSOR:
 WHITE OAK, LLC, a Delaware
limited liability company
	 	 	 	 By LESSEE:
 BASIN WATER, INC., a California
corporation

	By: GW Realty Group, a California general partnership, its managing member	 	 	 	 	 	 
					
	By:	 	 /s/ Bryan Bentrott

	 	 	 	By:	 	 /s/ Peter Jenson

	 Name Printed:
 Title:
	 	 Bryan Bentrott
 Partner
	 	 	 	 Name Printed:
 Title:
	 	 Peter Jenson
 Chief Executive Officer and
President

					
	 By:
	 	 /s/ Bruce McDonald

	 	 	 	By:	 	  

	 Name Printed:
	 	Bruce McDonald	 	 	 	Name Printed:	 	  

	 Title:
	 	Partner	 	 	 	Title:	 	  

	 Address: 1401 Quail Street, Suite 100
 Newport Beach, California 92660
 Telephone/Facsimile: (949) 724-8886/(949) 724-888)
 Federal ID No. 33-0770535
	 	 	 	 Address: 550 W “C” Street, 19th Floor,
 San Diego, California 92101
 Telephone/Facsimile: (619) 236-8886/(619) 236-8882
 Federal ID No.                     

				
	BROKER:	 	BROKER:	 	 	 	 
	 NAI Capital Commercial
  

 Attn: Teresia knight
 Title: Vice President
 Address: 3400 Inland Empire Boulevard, Suite 150 Ontario, California 91764
 Telephone/Facsimile: (909) 945-2339/(909) 919-1212
	 	 	 	 Colliers Seeley
  

 Attn: William Kim/Michael McCrary
 Title: Senior
Associate/Senior Vice President
 Address: 21700 East Copley Drive, Suite 100
 Diamond Bar, California 91765
 Telephone/Facsimile: (909) 595-5705/(909) 860-9669

	Federal ID No.	 	  

	 	 	 	Federal ID No.	 	  

  

	Note:	These forms are often modified to meet the changing requirements of law and industry needs always write or call to make sure you are utilizing the most current form: AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION, 700 So, Flower Street, Suite 600, Los Angeles, California 90017. (213) 667 8777. Fax No. (213) 687-8616 

  
 ©Copyright 1997 - By American Industrial Real Estate Association. All rights reserved. 
 No part of these works may be reproduced in any form without permission in writing 

 ADDENDUM TO STANDARD AIR INDUSTRIAL COMMERCIAL SINGLE-TENANT 
 LEASE - GROSS 
  
 This ADDENDUM TO STANDARD AIR INDUSTRIAL COMMERCIAL SINGLE-TENANT LEASE - GROSS (“Addendum”) is attached to, incorporated into and amends and
supplements that Standard AIR Industrial Commercial Single-Tenant Lease-Gross (the “Lease”) entered into as of the 7th day of June 2002 by and between WHITE OAK LLC, a California limited liability company (“Lessor”), and
BASIN WATER, INC., a California corporation (“Lessee”). Lessor and Lessee agree that notwithstanding anything contained in the Lease to the contrary, the Lease as modified by the provisions set forth in this Addendum represents the
full negotiated agreement of the parties, and the provisions of this Addendum will be deemed to be a part of the Lease and will supersede any contrary or conflicting provision in the Lease and prevail and control for all purposes. Lessor and Lessee
intend by this Addendum to eliminate the need to strike through and interlineate portions of the Lease to reflect the changes desired by the parties as set forth in this Addendum. This Addendum, together with the Lease itself, and all other
Exhibits, Riders and Addenda attached thereto represents the fully integrated and binding agreement of the parties. All references in the Lease and in this Addendum to “Lease” are to be construed to mean the Lease as amended and
supplemented by this Addendum. All terms used in this Addendum, unless specifically defined in this Addendum, shall have the same meaning as such terms have in the Lease. 
  
 1. BASE RENTAL INCREASES. Lessee’s Base Rent will be due and payable pursuant to the following schedule: 
  

							
	 MONTHS

	  	BASE RENT

	  	 APPROX.
 PSF/MONTH

	 1-12
	  	$	7,680.00	  	$	.48
	 13-24
	  	$	7,910.00	  	$	.4944
	 25-36
	  	$	8,144.00	  	$	.509

  
 2. BASE SHELL FEATURES. The
Premises shall include the following Base Shell Features: 
  

	 	(a)	Approximately 16,000 S.F.; 

  

	 	(b)	22 ft. minimum clearance in warehouse; 

  

	 	(c)	Fire sprinkler system design @ 0.45 GPM/3,000 S.F.; 

  

	 	(d)	400 Amp, 277/480 volt, 3 phase, 4 wire electrical service; 

  

	 	(e)	Approximately 1,315 s.f. existing office area. 

  
 3. TENANT IMPROVEMENTS. Lessor, at Lessor’s expense, shall complete the following tenant improvements prior to the Lease Commencement Date: 
  

	 	(a)	Carpet existing office space (excluding reception area and restroom); 

  

	 	(b)	Construct an approximate 17’ x 17’ (approximately 289 s.f.) office along the windows in the warehouse based on a mutually agreeable space plan, including building standard
carpet and paint and tying the HVAC into the existing HVAC unit; 

  

	 	(c)	Remove chain link fencing inside warehouse and patch holes; 

  

	 	(d)	Broom sweep warehouse; and, 

 (e) Clean and sanitize restrooms 
  
 4. VEHICLE PARKING. Lessee shall be entitled to 29 parking spaces adjacent to the Premises and Lessee agrees only to
park in those parking spaces adjacent to the Premises. In addition, said parking spaces shall be used only for parking by vehicles no larger than full size passenger automobiles or pick-up trucks, herein called “Permitted Size Vehicles.”
Vehicles other than Permitted Size Vehicles are herein referred to as “Oversized Vehicles”. Lessee shall not permit or allow any vehicles that belong to, or are controlled by, Lessee or Lessee’s employees, suppliers, shippers,
customers, or invitees to be loaded, unloaded, or parked in areas other than those designated by Lessor for such activities. Notwithstanding the foregoing, Lessee, its employees or customers, shall not store or allow to be stored for more than 48
hours any automobile, recreation or motor vehicle anyplace in the common parking area within the complex. If Lessee permits or allows any of the prohibited activities, 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 of Lessee, which cost shall be immediately payable upon demand by Lessor. 
  
 5. APPROVED PARKING RATIO BREAKDOWN. Lessee acknowledges that it has reviewed and approved Lessor’s Approved
Parking Ratio (“Approved Ratio”) Breakdown attached hereto as Exhibit “3”. In the event Lessee contemplates a use allocation which differs from Lessor’s Approved Ratios, Lessee shall obtain approval for said re-allocation
from the City of Rancho Cucamonga prior to Lease execution. Lessee shall hold Lessor harmless from any disputes arising from Lessee’s non-compliance with Lessor’s Approved Ratios. 
  
 6. OUTSIDE PREMISES. Except for the area inside Lessee’s Fenced
Yard Area, Lessee agrees that it will not allow work activity or storage of any kind outside of Lessee’s Premises. All paved areas, including parking spaces, driveways and alleys, are to be kept clean and clear at all times except for
legitimate parking of vehicles as defined in the Lease. 
  
 7. TRASH
DISPOSAL. Lessee agrees that all trash and debris is to be deposited in receptacles provided adjacent to the Premises and all receptacles shall remain inside the trash enclosures. Pursuant to Article 11 of the Lease, Lessee will directly pay
for all costs associated with trash disposal. 
  
 8. USE.
Lessee specifically agrees that it will not allow any live birds or animals in or on the Premises at any time. Nor shall Lessee use or keep on the Premises any foul or noxious gas or substance, or any flammable or combustible fluid or material other
than those specifically approved by local governing code and ordinances in the operation of Lessee’s business. Lessee’s violation of this provision will be grounds for Lease termination by Lessor, in Lessor’s sole and absolute
discretion. 
  
 9. BUILDING SIGNAGE. At Lessee’s sole
cost and expense, Lessee may install one (1) exterior building sign in conformance with Lessor’s Industrial Sign Program. Lessee shall obtain Lessor’s prior written approval prior to installation of any signs at the Premises. Sign
materials, design, and lettering are indicated in Exhibit “E” of the Declaration described in paragraph 14 of this Addendum. Lessor reserves the right to change the exterior sign materials and colors. All signage will be in conformance
with the local sign ordinance of the City of Rancho Cucamonga, and Lessee shall obtain a Permit for all signage. 
  
 10. WINDOW COVERINGS. Lessee agrees there are to be no window coverings except mini-blinds, (either silver or white colored), which may be installed
at Lessee’s option. Lessee shall pay for the cost of said blinds. 
  
 11. STORAGE WITHIN PREMISES. Lessee may store combustible stock within the Premises above twelve (12) feet in height, but must comply with the Uniform Fire Code, Article 81, at Lessee’s cost. These costs are
possible interior warehouse improvement requirements which may include smoke and/or mechanical vents, draft curtains, special access, upgraded in-rack sprinkler systems, and fire hose cabinets. Fire sprinkler density is .45 g.p.m/3,000 square feet.

  
 Lessor is not responsible for any occupancy approval delay due
directly to Lessee’s Fire Department use requirements. These details are the responsibility of the Lessee, as they are specific to Lessee’s storage layout and product classification. Lessee is advised to process these approvals with the
Rancho Cucamonga Fire Department as soon as possible. 

 12. CITY OF RANCHO CUCAMONGA. Lessee shall have the sole responsibility to secure any and all governmental
approvals relating to Lessee’s use of the Premises, including but not necessarily limited to an Occupancy Permit issued by the City of Rancho Cucamonga. Lessee shall secure such approvals prior to Lease execution and hold Lessor harmless from
any costs and fees incurred in the process, and from any fines or penalties arising from Lessee’s non-conformance with applicable laws or regulations. 
  
 13. NO OUTSIDE AUTOMOTIVE WORK. Any automotive work, including maintenance and repair of Lessee’s equipment, may only be performed inside the Premises
or within Lessee’s Fenced Yard Area. 
  
 14. DECLARATION.
Lessee acknowledges that it has reviewed the Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for White Oak Business Center as recorded on April 22, 1999 (the “Declaration”). Lessee agrees, by its
execution of this Lease, that this Lease is subject to the Declaration and that Lessee will abide by all of the terms and conditions of the Declaration, including, but not limited to, Lessee’s Industrial Sign Program. 
  
 15. FIRE ALARM MONITORING. Lessee agrees to reimburse Lessor for the monthly
costs for the fire alarm monitoring service as required by the City. Lessee shall contract directly with, and pay, Verizon for the telephone phone lines servicing the Fire Alarm Monitoring system. 
  
 16. PROPERTY MANAGEMENT FEE. Lessee shall pay Lessor a Property Management Fee
equal to 2% of Lessee’s Base Rent. 
  
 IN WITNESS WHEREOF,
Lessor and Lessee have executed this Addendum as of the date of the Lease to which this Addendum is attached. 
  

							
	 “Lessee”
	 	BASIN WATER, INC., A CALIFORNIA CORPORATION
			
	 	 	By:	 	 /s/ Peter Jenson

	 	 	Name:	 	Peter Jenson
	 	 	Title:	 	Chief Executive Officer and President
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 
		
	 “Lessor”
	 	WHITE OAK LLC, A CALIFORNIA LIMITED LIABILITY COMPANY
			
	 	 	By:	 	GW Realty Group, a California general
	 	 	 	 	partnership, its Managing Member
				
	 	 	 	 	By:	 	 /s/ Bryan Bentrott,

	 	 	 	 	 	 	Bryan Bentrott, Partner
				
	 	 	 	 	By:	 	 /s/ Bruce McDonald,

	 	 	 	 	 	 	Bruce McDonald, Partner

 EXHIBIT “A” 
  
 SPACE PLAN 
  
 

 

 EXHIBIT “B” 
  
 RULES AND REGULATIONS 
  
 WHITE OAK BUSINESS CENTER 
  
 RULES AND REGULATIONS 
  

	1.	Signage 

  
 No sign, placard, picture, advertisement, name or notice shall be installed or displayed on any part of the outside 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 satisfactory to Lessor. 
  

	2.	Damage by Lessee 

  
 The cost of repairing damage of any kind caused by Lessee, its employees, guests, agents or invitees whether by negligence, carelessness, or for any other
reasons, shall be paid for by Lessee. 
  

	3.	Roof Restrictions 

  
 Lessee shall not install any radio or television antenna, loudspeaker or other device on the roof or exterior walls of the Building without Lessor’s
prior written consent. Lessee shall not interfere with radio or television or reception from or in the Building or elsewhere. 
  

	4.	Project Name 

  
 Lessee shall not use the name of the Project in connection with or in promoting or advertising the business of Lessee without Lessor’s prior written
consent. 
  

	5.	Safety Compliance 

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

  

	6.	Waiver of Rules 

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

	7.	Intent of Rules and Regulations 

  
 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 premises in the Project. 
  

	8.	Lessor’s Right to Change Rules and Regulations 

  
 Lessor reserves the right to change, rescind or 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 Project and for the preservations 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.

	9.	Lessor’s Liability 

  
 Lessor shall have no liability or responsibility to any lessee for the safety or well-being of Lessee, his employees, invitee or business clients in their
use or presence within the premises, or any place within the Project other than may be construed to be normally assumed as Lessor’s liability or responsibility as defined elsewhere in this Lease. 
  

	10.	Trash Disposal 

  
 Lessee agrees that all trash and debris are to be deposited in dumpsters or trash compactors furnished by Lessee at Lessee’s expense. All dumpsters
shall remain inside enclosures provided by Lessor. If it is determined that Lessee is regularly disposing of an unusually large amount of refuse, Lessee shall within ten (10) days’ receipt of written notice from Lessor and at Lessee’s
sole expense, provide for an additional trash bin and pick-up service at its leased premises. Lessor reserves the right to stipulate location of storage for Lessee’s additional trash receptacle. 
  

	11.	Outside Storage 

  
 With the exception of trailer storage, Lessee agrees that there will be no work activity or storage of any kind outside Lessee’s premises. All paved
areas, including parking spaces, driveways and alleys, are to be kept clean and clear at all times except for legitimate parking of vehicles as defined in the Lease. 
  

	12.	Use 

  
 The premises shall not be used for lodging or any other illegal purpose. 
  

	13.	Cooking 

  
 Lessee shall not allow cooking on the Premises except for the use of Underwriters’ Laboratory approved equipment for brewing coffee, tea, hot
chocolate and similar beverages. In addition, Lessee shall have the right to use microwave ovens and refrigerators to serve its employees and customers. Lessee’s brewing/cooking equipment and use shall be in accordance with all applicable
federal, state, county and city laws, codes and ordinances. 
  

	14.	Lessee’s Security 

  
 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. 
  

	15.	No Animals 

  
 In conformance and compliance with the Law, Lessee agrees that no domestic animals shall be allowed in or on the Premises at any time. 
  

	16.	Lessee’s Responsibility 

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

  

	17.	Acknowledgement 

  
 Lessee shall be deemed to have read these rules and to have agreed to abide by them as a condition to occupancy of the leased Premises. 

 EXHIBIT “C” 
  
 LEASE COMMENCEMENT NOTICE 
  

							
	 TO:
	 	_________________	  	Date:	  	_________________

  

	Re:	Lease dated                      between
                    , a
                             (“Lessor”), and
                            , a
                             (“Lessee”), concerning the Premises located
                            . 

  
 In accordance with the subject Lease, we wish to advise and/or confirm as
follows: 
  
 1. That the Premises have been accepted herewith by
the Lessee as being complete in accordance with the subject Lease, and that there is no deficiency in construction. 
  
 2. That the Lessee has possession of the Premises and acknowledges that under the provisions of the subject Lease, the term of said Lease commenced as of
                     for a term of
                     months and the Lease shall terminate on
                    . 
  
 3. That in accordance with the subject Lease, rent commenced to accrue on
                    . 
  
 4. If the commencement date of the subject Lease is other than the first day of the month, the first billing will contain a pro rata adjustment. Each
billing thereafter shall be for the full amount of the monthly installment as provided for in said Lease. 
  
 5. Rent is due and payable in advance on the first day of each and every month during the term of said Lease. Your rent checks should be made payable to:

  
 WHITE OAK, LLC 
 c/o Master Development Corporation 
 1401 Quail Street, Suite 100 
 Newport Beach, California 92660 
  

							
	 “LESSEE”
	 	BASIN WATER, INC.,
	 	 	a California corporation
			
	 	 	By:	 	  

	 	 	Name:	 	Peter Jensen
	 	 	Title:	 	Chief Executive Officer and President
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 “LESSOR”
	 	WHITE OAK, LLC,
	 	 	a Delaware limited liability company
			
	 	 	By:	 	GW Realty Group, a California general partnership,
	 	 	 	 	Its Managing Member
				
	 	 	 	 	By:	 	  

	 	 	 	 	 	 	Bruce McDonald, Partner
				
	 	 	 	 	By:	 	  

	 	 	 	 	 	 	Bryan Bentrott , Partner

  
  

 EXHIBIT “D” 
  
 WHITE OAK BUSINESS CENTER – BUILDING 4 
  
 Estimated Common Area Maintenance Expenses 
  
 Approximately 16,000 S.F. 
  

						
	 Ref. #

	  	 Item

	  	Monthly Budget

	TO BE PAID BY LESSOR/REIMBURSED BY LESSEE
	     1.
	  	Security/Fire Monitoring (1)	  	$	271.00
	     2.
	  	Phone lines for Fire Alarm System (2)	  	$	50.00
	     3.
	  	Property Insurance (3)	  	$	35.00
	     4.
	  	Property Taxes (4)	  	$	118.00
	     5.
	  	Property Management Fee (5)	  	$	153.00
	 	  	 	  	
	

	 TOTAL MO. ESTIMATES TO BE REIMBURSED BY LESSEE TO LESSOR
	  	$	627.00
		
	TO BE CONTRACTED & PAID DIRECT BY LESSEE	  	 	 
	     6.
	  	Landscape Maintenance	  	$	70.00
	     7.
	  	Window Maintenance	  	$	25.00
	     8.
	  	Parking Lot Sweeping	  	$	25.00
	     9.
	  	Pest Control	  	$	20.00
	     10.
	  	HVAC Maintenance	  	$	50.00
	     11.
	  	Water	  	$	50.00
	     12.
	  	Electricity	  	$	1,500.00
	 	  	 	  	
	

	 ESTIMATED TOTAL TO BE CONTRACTED/PAID DIRECT BY LESSEE
	  	$	1,740.00

	(1)	Projected Fire Monitoring Costs (paid by Lessor, reimbursed by Lessee) are as follows:

	 	•	$97.00 per month (billed quarterly) for monitoring and maintenance. 

	 	•	$124.00 per month for the equipment lease. 

	(2)	The Fire Life Safety System requires phone lines. Two (2) total) – one (1) primary and one (1) back-up. This cost is estimated at $50.00/month.

	(3)	Property Insurance carried by Lessor (paid by Lessor, reimbursed by Lessee). 

	(4)	Estimated property taxes paid by Lessor (reimbursed by Lessee monthly based on estimates). 

	(5)	2% of Base Rent. 

  
 NOTES: 
  

	1.	Lessor has made these estimates to the best of its ability. Actual expenses may vary. 

	2.	The Fire Monitoring system is leased on a 60 month lease expiring on or about September 30, 2004. Lessor will own the system at the end of the 60 month lease.

	3.	Window maintenance frequency to be determined by Lessee. However, must be performed at least quarterly. 

	4.	HVAC maintenance must be performed no less than quarterly. 

	5.	All expenses to be contracted by Lessee direct except for those as noted above, and are based on estimates.

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