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EXHIBIT 10.1

AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE—GROSS

(Do not use this form for Multi-Tenant Property)

1. Basic Provisions (“Basic Provisions”)

     1.1 Parties: This Lease (“Lease”), dated for reference purposes only, July 26, 1993, is made
by and between Eugene M. Woods and Verda V. Woods, Trustees of the Woods Family Trust of June 4,
1977 (“Lessor”) and Bill Lee d.b.a. Lee Enterprises (“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 by the street address of 11919
Burke Street, Santa Fe Springs, located in the County of Los Angeles, State of California, and
generally described as (describe briefly the nature of the property) a freestanding industrial
building of approximately 11,550 square feet (“Premises”). (See Paragraph 2 for further
provisions.)

     1.3 Term: five (5) years and four months (“Original Term”) commencing September 1, 1993
(“Commencement Date”) and ending December 31, 1998 (“Expiration Date”). (See Paragraph 3 for
further provisions.)

     1.4 Early Possession: August 1, 1993 (“Early Possession Date”). (See Paragraphs 3.2 and 3.3
for further provisions.)

     1.5 Base Rent: $3,234.00 per month (“Base Rent”), payable on the first day of each month
commencing February 1, 1994. (See Paragraph 4 for further provisions.)

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

     1.6 Base Rent Paid Upon Execution: $3,234.00 as Base Rent for the period January, 1994.

     1.7 Security Deposit: $5,000.00 (See Addendum) (“Security Deposit”). (See Paragraph 5 for further provisions.)

     1.8 Permitted Use: Screen printing, general office and related legal uses. (See Paragraph 6 for further provisions.)

     1.9 Insuring Party: Lessor is the “Insuring Party.” $606.00 is the “Base Premium.” (See Paragraph 8 for further provisions.)

     1.10 Real Estate Brokers: The following real estate brokers (collectively, the “Brokers”) and
brokerage relationships exist in this transaction and are consented to by the Parties (check
applicable boxes):

____________________________________________________________________ represents

 ̈ Lessor exclusively (“Lessor’s Broker”);  ̈ both Lessor and Lessee, and
Jim Litchfield, INCO COMMERCIAL BROKERAGE represents

ý Lessee exclusively (“Lessee’s Broker”);  ̈ both Lessee and Lessor. (See Paragraph 15 for further provisions.)

     1.11 Guarantor. The obligations of the Lessee under this Lease are to be guaranteed by —— (“Guarantor”). (See Paragraph 37 for further provisions.)

     1.12 Addenda. Attached hereto is an Addendum or Addenda consisting of Paragraphs 49 through
56 and Exhibits N/A all of which constitute a part of this Lease.

2. Premises.

     2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the
Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set
forth in this Lease. Unless otherwise provided herein, any statement of square footage set forth
in this Lease, or that may have been used in calculating rental, is an approximation which Lessor
and Lessee agree is reasonable and the rental based thereon is not subject to revisions whether or
not the actual square footage is more or less.

     2.2 Condition. Lessor shall deliver the Premises to Lessee clean and free of debris on the
Commencement Date and warrants to Lessee that the existing plumbing, fire sprinkler system,
lighting, air conditioning, heating, and loading doors, if any, in the Premises, other than those
constructed by Lessee, shall be in good operating condition on the Commencement Date. If a
non-compliance with said warranty exists as of the Commencement Date, Lessor shall, 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, rectify same at Lessor’s
expense. If Lessee does not give Lessor written notice of a non-compliance with this warranty
within thirty (30) days after the Commencement Date, correction of that non-compliance shall be the
obligation of Lessee at Lessee’s sole cost and expense.

     2.3 Compliance with Covenants, Restrictions and Building Code. Lessor warrants to Lessee that
the improvements on the Premises comply with all applicable covenants or restrictions of record and
applicable building codes, regulations and ordinances in effect on the Commencement Date. Said
warranty does not apply to the use to which Lessee will put the Premises or to any Alterations or
Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. If the
Premises do not comply with said warranty, Lessor shall, 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, rectify the same at Lessor’s expense. If Lessee does not
give Lessor written notice of a non-compliance with this warranty within six (6) months following
the Commencement Date, correction of that non-compliance shall be the obligation of Lessee at
Lessee’s sole cost and expense.

     2.4 Acceptance of Premises. Lessee hereby acknowledges: (a) that it has been advised by the
Brokers to satisfy itself with respect to the condition of the Premises (including but not limited
to the electrical and fire sprinkler systems, security, environmental aspects, compliance with
Applicable Law, as defined in Paragraph 6.3) and the present and future suitability of the Premises
for Lessee’s intended use, (b) that Lessee has made such investigation as it deems necessary with
reference to such matters and assumes all responsibility therefor as the same relate to Lessee’s
occupancy of the Premises and/or the term of this Lease, and (c) that neither Lessor, nor any of
Lessor’s agents, has made any oral or written representations or warranties with respect to the
said matters other than as set forth in this Lease.

     2.5 Lessee Prior Owner/Occupant. The warranties made by Lessor in this Paragraph 2 shall be
of no force or effect if immediately prior to the date set forth in Paragraph 1.1 Lessee was the
owner or occupant of the Premises. In such event, Lessee shall, at Lessee’s sole cost and expense,
correct any non-compliance of the Premises with said warranties.

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, however, shall be in effect during such period. Any
such early possession shall not affect nor advance the Expiration Date of the Original Term

     3.3 Delay In Possession. If for any reason Lessor cannot deliver possession of the Premises
to Lessee as agreed herein by the Early Possession Date, if one is specified in Paragraph 1.4, or,
if no Early Possession Date is specified, by the Commencement Date, Lessor shall not be subject to
any liability therefor, nor shall such failure affect the validity of this Lease, or the
obligations of Lessee hereunder, or extend the term hereof, but in such case, Lessee shall not,
except as otherwise provided herein, be obligated to pay rent or perform any other obligation of
Lessee under the terms of this Lease until Lessor delivers possession of the Premises to Lessee.
If Possession of the Premises is not delivered to Lessee within sixty (60) days after the
Commencement Date, Lessee may, at its option, by notice in writing to Lessor within ten (10) days
thereafter, cancel this Lease, in which event the Parties shall be discharged from all obligations
hereunder; provided, however, that if such written notice by Lessee is not received by Lessor
within said ten (10) day period, Lessee’s right to cancel this Lease shall terminate and be of no
further force or effect. Except as may be otherwise provided, and regardless of when the term
actually commences, if possession is not tendered to Lessee when required by this Lease and Lessee
does not terminate this Lease, as aforesaid, the period free of the obligation to pay Base Rent, if
any, 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, changes or omissions of Lessee.

4. Rent.

     4.1 Base Rent. Lessee shall cause payment of Base Rent and other rent or charges, as the same
may be adjusted from time to time, to be received by Lessor in lawful money of the United States,
without offset or deduction, on or before the day on which it is due under the terms of this Lease.
Base Rent and all other rent and charges for any period during the term hereof which is for less
than (1) full calendar months shall be prorated based upon the actual number of days of the
calendar month involved. Payment of Base Rent and other charges shall be made to Lessor at its
address stated herein or to such other persons or at such other addresses as Lessor may from time
to time designate in writing to Lessee.

5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit
set forth in Paragraph 1.7 as security for Lessee’s faithful performance of Lessee’s obligations
under this Lease. If Lessee fails to pay Base Rent or other rent or charges due hereunder, or
otherwise Defaults under this Lease (as defined in Paragraph 13.1), 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, cost, expense, los or damage (including
attorneys’ fees) which Lessor may suffer or incur by reason thereof. If Lessor uses or applies all
or any portion of said Security Deposit, Lessee shall within ten (10) days after written request
therefor deposit moneys with Lessor sufficient to restore said Security Deposit to the full amount
required by this Lease. Any time the Base Rent increases during the term of this Lease, Lessee
shall, upon written request from Lessor, deposit additional moneys with Lessor sufficient to
maintain the same ratio between the Security Deposit and the Base Rent as those amounts are
specified in the Basic Provisions. Lessor shall not be required to Keep all or any part of the
Security Deposit separate from its general accounts. Lessor shall, at the expiration or earlier
termination of the term hereof and after Lessee has vacated the Premises, return to Lessee (or, at
Lessor’s option, to the last assignee, if any, of Lessee’s interest

	 	 	 	 	 
	 

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herein), that portion of the Security Deposit not used or applied by Lessor. Unless otherwise
expressly agreed in writing by Lessor, no part of the Security Deposit shall be considered to be
held in trust, to bear interest or other increment for its use, or to be prepayment for any moneys
to be paid by Lessee under this Lease.

6. Use.

     6.1 Use. Lessee shall use and occupy the Premises only for the purposes set forth in
Paragraph 1.8, or any other use which is comparable thereto, and for no other purpose. Lessee
shall not use or permit the use of the Premises in a manner that creates waste or a nuisance, or
that disturbs owners and/or occupants of, or causes damages to, neighboring premises or properties.
Lessor hereby agrees to not unreasonably withhold or delay its consent to any written request by
lessee, Lessees assignees or subtenants, and by prospective assignees and subtenants of the lessee,
its assignees subtenants, for a modification of said permitted purpose for which the premises may
be used or occupied, so long as the same will not impair the structural integrity of the
improvements on the Premises, the mechanical or electrical systems therein, is not significantly
more burdensome to the Premises and the improvements thereon, and is otherwise permissible pursuant
to this Paragraph 6. If Lessor elects to withhold such consent, Lessor shall within five (5)
business days give a written notification of same, which notice shall include an explanation of
Lessor’s reasonable objections to the change in use.

     6.2 Hazardous Substances.

          (a) Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease
shall mean any product, substance, chemical, material or waste whose presence, nature, quantity
and/or intensity of existence, use, manufacture, disposal, transportation, spill, release or
effect, 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 liability
of Lessor to any governmental agency or third party under any applicable statue or common law
theory. Hazardous Substance shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, crude oil or any products, by-products or fractions thereof. Lessee shall not engage in
any activity in, on or about the Premises which constitutes a Reportable Use (as hereinafter
defined) of Hazardous Substances without the express prior written consent of Lessor and compliance
in a timely manner (at Lessee’s sole cost and expense) with all Applicable Law (as defined in
Paragraph 6.3). “Reportable Use” shall man (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. Reportable
Use shall also include Lessee’s being responsible for the presence in, on or about the Premises of
a Hazardous Substance with respect to which any Applicable Law requires that a notice be given to
persons entering or occupying the Premises or neighboring properties. Notwithstanding the
foregoing, Lessee may, without Lessor’s prior consent, but in compliance with all Applicable Law,
use any ordinary and customary materials reasonably required to be used by Lessee in the normal
course of Lessee’s business permitted on the Premises, so long as such use is not a Reportable Use
and does not expose the Premises or neighboring properties to any meaningful risk of contamination
or damage or expose Lessor to any liability therefor. In addition, Lessor may (but without any
obligation to do so) condition its consent to the use or presence of any Hazardous Substance,
activity or storage tank by Lessee upon Lessee’s giving Lessor such additional assurances as
Lessor, in its reasonable discretion, deems necessary to protect itself, the public, the Premises
and the environment against damage, contamination or injury and/or liability therefrom or therefor,
including, but not limited to, the installation (and removal on or before Lease expiration or
earlier termination) of reasonably necessary protective modifications to the Premises (such as
concrete encasements) and/or the deposit of an additional Security Deposit under Paragraph 5
hereof.

          (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a
Hazardous Substance, or a condition involving or resulting from same, 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. Lessee shall also immediately give Lessor
a copy of any statement, report, notice, registration, application, permit, business plan, license,
claim, action or proceeding given to, or received from, any governmental authority or private
party, or persons entering or occupying the Premises, concerning the presence, spill, release,
discharge of, or exposure to, any Hazardous Substance or contamination in, on, or about the
Premises, including but not limited to all such documents as may be involved in any Reportable Uses
involving the Premises.

          (c) Indemnification. Lessee shall indemnify, protect, defend and hold Lessor, its agents,
employees, lenders and ground lessor, if any, and the Premises, harmless from and against any and
all loss of rents and/or damages, liabilities, judgments, costs, claims, liens, expenses,
penalties, permits and attorney’s and consultant’s fees arising out of or involving any Hazardous
Substance or storage tank brought onto the Premises by or for Lessee or under Lessee’s control.
Lessee’s obligations under this Paragraph 6 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 (including consultant’s and attorney’s fees and testing), removal,
remediation, restoration and/or abatement thereof, or of any contamination therein involved, and
shall survive the expiration or earlier 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 or storage tanks, unless specifically so agreed by
Lessor in writing at the time of such agreement.

     6.3 Lessee’s Compliance with Law. Except as otherwise provided in this Lease, Lessee, shall,
at Lessee’s sole cost and expense, fully, diligently and in a timely manner, comply with all
“Applicable Law,” which term is used in this Lease to include all laws, rules, regulations,
ordinances, directives, covenants, easements and restrictions of record, permits, the requirements
of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor’s
engineers and/or consultants, relating in any manner to the Premises (including but not limited to
matters pertaining to (i) industrial hygiene, (ii) environmental conditions on, in, under or about
the Premises, including soil and ground water conditions, and (iii) the use, generation,
manufacture, production, installation, maintenance, removal, transportation, storage, spill or
release of any Hazardous Substance or storage tank), now in effect or which may hereafter come into
effect, and whether or not reflecting a change in policy from any previously existing policy.
Lessee shall, within five (5) days after receipt of Lessor’s written request, provide Lessor with
copies of all documents and information, including, but not limited to, permits, registrations,
manifests, applications, reports and certificates, evidencing Lessee’s compliance with any
Applicable Law specified by Lessor, and shall immediately upon receipt, notify Lessor in writing
(with copies of any documents involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving failure by Lessee or the Premises to comply
with any Applicable Law.

     6.4 Inspection; Compliance. Lessor and Lessor’s Lender(s) (as defined in Paragraph 8.3(a))
shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise
at reasonable times, for the purpose of inspecting the condition of the Premises and for verifying
compliance by Lessee with this Lease and all Applicable Laws (as defined in Paragraph 6.3), and to
employ experts and/or consultants in connection therewith and/or to advise Lessor with respect to
Lessee’s activities, including but not limited to the installation, operation, use, monitoring,
maintenance, or removal of any Hazardous Substance or storage tank on or from the Premises. The
costs and expenses of any such inspections shall be paid by the party requesting same, unless a
Default or Breach of this Lease, violation of Applicable Law, or a contamination, caused or
materially contributed to by Lessee is found to exist or be imminent, or unless the inspection is
requested or ordered by a governmental authority as the result of any such existing or imminent
violation or contamination. In any such case, Lessee shall upon request reimburse Lessor or
Lessor’s Lender, as the case may be, for the costs and expenses of such inspections.

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

     7.1 Lessee’s Obligations.

          (a) Subject to the provisions of Paragraphs 2.2 (Lessor’s warranty as to condition), 2.3
(Lessor’s warranty as to compliance with covenants, etc.), 7.2 (Lessor’s obligations to repair), 9
(damage and destruction), and 14 (condemnation), Lessee shall, at Lessee’s sole cost and expense
and at all times, keep the Premises and every part thereof in good order, condition and repair,
(whether or not such portion of the Premises requiring repair, 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, without limiting the generality of the foregoing, all equipment or facilities
serving the Premises, such as plumbing, heating, air conditioning, ventilating, electrical,
lighting facilities, boilers, fired or unfired pressure vessels, fire sprinkler and/or standpipe
and hose or other automatic fire extinguishing system, including fire alarm and/or smoke detection
systems and equipment, fire hydrants, fixtures, walls (interior and exterior), ceiling, floors,
windows, doors, plate glass, skylights, landscaping, driveways, parking lots, fences, retaining
walls, signs sidewalks and parkways located in, on, about, or adjacent to the Premises, but
excluding foundations, the exterior roof and the structural aspects of the Premises. 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, take all investigatory and/or remedial action reasonably recommended, whether or not
formally ordered or required, for the cleanup of any contamination of, and for the maintenance,
security and/or monitoring of, the Premises, the elements surrounding same, or neighboring
properties, that was caused or materially contributed to by Lessee, or pertaining to or involving
any Hazardous Substance and/or storage tank brought onto the Premises by or for Lessee or under its
control. Lessee, in keeping the Premises in good order, condition and repair, shall exercise and
perform good maintenance practices. 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.

          (b) Lessee shall, at Lessee’s sole cost and expense, procure and maintain contracts, with
copies to Lessor, in customary form and substance for, and with contractors specializing and
experienced in, the inspection, maintenance and service of the following equipment and
improvements, if any, located on the Premises: (i) heating, air conditioning and ventilation
equipment, (ii) boiler, fired or unfired pressure vessels, (iii) fire sprinkler and/or standpipe
and hose or other automatic fire extinguishing systems, including fire alarm and/or smoke
detection, (iv) landscaping and irrigation systems, (v) roof covering and drain maintenance and
(vi) asphalt and parking lot maintenance.

     7.2 Lessor’s Obligations. Upon receipt of written notice of the need for such repairs and
subject to Paragraph 13.5, Lessor shall, at Lessor’s expense, keep the foundations, exterior roof
and structural aspects of the Premises in good order, condition and repair, Lessor shall not,
however, be obligated to paint the exterior surface of the exterior walls or to maintain the
windows, doors or plate glass or the interior surface of exterior walls. Lessor shall not, in any
event, have any obligation to make nay repairs until Lessor receives written notice of the need for
such repairs. 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. Lessee and
Lessor expressly waive the benefit of any statute now or hereafter in effect to the extent it is
inconsistent with the terms of this Lease with respect to, or which affords Lessee the right to
make repairs at the expense of Lessor or to terminate this Lease

	 	 	 	 	 
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	NOTICE:

	 	These forms are often modified to meet changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most current form: American Industrial Real Estate Association, 345 South Figueroa Street, Suite M-1, Los Angeles, CA 90071.
(213) 687-8777. Fax No. (213) 687-8616.

	 	 	 
	© Copyright 1990 — By American Industrial Real Estate Association. All rights reserved.
	 	 
	No part of these works may be reproduced in any form without permission in writing.

	 	FORM 105G-R-12/91

 

 

by reason of, any needed repairs.

     7.3 Utility Installations; Trade Fixtures; Alterations.

          (a) Definitions; Consent Required. The term “Utility Installations” is used in this Lease to
refer to all carpeting, window coverings, air lines, power panels, electrical distribution,
security, fire protection systems, communication systems, lighting fixtures, heating, ventilating,
and air conditioning equipment, plumbing, and fencing in, on or about 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 on the Premises from that which are provided by Lessor under the terms of this Lease,
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 as defined in Paragraph 7.4(a). Lessee shall not
make any Alterations or Utility Installations in, on, under or about 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), as long as they are not visible from the outside, do
not involve puncturing, relocating or removing the roof or any existing walls, and the cumulative
cost thereof during the term of this Lease as extended does not exceed $25,000.

          (b) Consent. 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 proposed
detailed plans. All consent given by Lessor, whether by virtue of Paragraph 7.3(a) or by
subsequent specific consent, shall be deemed conditioned upon: (i) Lessee’s acquiring all
applicable permits required by governmental authorities, (ii) the furnishing of copies of such
permits together with a copy of the plans and specifications for the Alteration or Utility
Installation to Lessor prior to commencement of the work thereon, and (iii) the compliance by
Lessee with all conditions of said permits in a prompt and expeditious manner. Any Alterations or
Utility Installations by Lessee during the term of this Lease shall be done in good and workmanlike
manner, with good and sufficient materials, and in compliance with all Applicable Law. Lessee
shall promptly upon completion thereof furnish Lessor with as-built plans and specifications
therefor. Lessor may (but without obligation to do so) condition its consent to any requested
Alteration or Utility Installation that costs $10,000 or more upon Lessee’s providing Lessor with a
lien and completion bond in an amount equal to one and one-half times the estimated cost of such
Alteration or Utility Installation and/or upon Lessee’s posting an additional Security Deposit with
Lessor under Paragraph 36 hereof.

          (c) Indemnification. Lessee shall pay, when due, all claims for labor or materials furnished
or alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are
or may be secured by any mechanics’ or materialmen’s lien against the Premises or any interest
therein. Lessee shall give Lessor not less than ten (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 in or on the Premises as provided by law. If Lessee shall, in good faith,
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 against the
Lessor or the Premises. If Lessor shall require, Lessee shall furnish to Lessor a surety bond
satisfactory to Lessor in an amount equal to one and one-half times the amount of such contested
lien claim or demand, indemnifying Lessor against liability for the same, as required by law for
the holding of the Premises free from the effect of such lien or claim. In addition, Lessor may
require Lessee to pay Lessor’s attorney’s fees and costs in participating in such action if Lessor
shall decide it is to its best interest to do so.

     7.4 Ownership; Removal; Surrender; and Restoration.

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

          (b) Removal. Unless otherwise agreed in writing, Lessor may require that any or all Lessee
Owned Alterations or Utility Installations be removed by the expiration or earlier termination of
this Lease, notwithstanding their installation may have been consented to by Lessor. 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 of Lessor.

          (c) Surrender/Restoration. Lessee shall surrender the Premises by the end of the last day of
the Lease term or any earlier termination date, with all of the improvements, parts and surfaces
thereof clean and free of debris and in good operating order, condition and state of repair,
ordinary wear and tear excepted. “Ordinary wear and tear” shall not include any damage or
deterioration that would have been prevented by good maintenance practice or by Lessee performing
all of its obligations under this Lease. Except as otherwise agreed or specified in writing by
Lessor, the Premises, as surrendered, shall include the Utility Installations. The obligation of
Lessee shall include the repair of any damage occasioned by the installation, maintenance or
removal of Lessee’s Trade Fixtures, furnishings, equipment, and Alterations and/or Utility
Installations, as well as the removal of any storage tank installed by or for Lessee, and the
removal, replacement, or remediation of any soil, material or ground water contaminated by Lessee,
all as may then be required by Applicable Law and/or good service practice. Lessee’s Trade
Fixtures shall remain the property of Lessee and shall be removed by Lessee subject to its
obligation to repair and restore the Premises per this Lease.

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 Paragraphs 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 a
mortgage or deed of trust covering the Premises, increased valuation of the Premises, and/or a
premium rate increase. If the parties insert a dollar amount in Paragraph 1.9, such amount shall
be considered the “Base Premium.” In lieu thereof, if the Premises have been previously occupied,
the “Base Premium” shall be the annual premium applicable to the most recent occupancy. If the
Premises have never been occupied, the “Base Premium” shall be the lowest annual premium reasonably
obtainable for the Required Insurance as of the commencement of the Original Term, assuming the mot
nominal use possible of the Premises. In no event, however, shall Lessee be responsible for any
portion of the premium cost attributable to liability insurance coverage in excess of $1,000,000
procured under Paragraph 8.2(b) (Liability Insurance Carried By Lessor).

          (b) Lessee shall pay any such Insurance Cost Increase to Lessor within thirty (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 coincide with the corresponding Commencement or Expiration of the Lease
term.

     8.2 Liability Insurance.

          (a) Carried by Lessee. Lessee shall obtain and keep in force during the term of this Lease 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,
involving 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 and “Additional Insured-Managers
or Lessors of Premises” Endorsement and contain the “Amendment of the Pollution Exclusion” 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 required by this Lease or as
carried by Lessee shall not, however, limit the liability of Lessee nor relieve Lessee of any
obligation hereunder. All insurance to be carried by Lessee shall be primary to and not
contributory with an similar insurance carried by Lessor, whose insurance shall be considered
excess insurance only.

          (b) Carried by Lessor. In the event Lessor is the Insuring Party, Lessor shall also maintain
liability insurance described in Paragraph 8.2(a), above, 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 during the
term of this Lease a policy or policies in the name of Lessor, with loss payable to Lessor and to
the holders of any mortgages, deeds of trust or ground leases on the Premises (“Lender(s)”),
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 lenders, but in no event more than the commercially reasonable and available insurable value
thereof if, by reason of the unique nature or age of the improvements involved, such latter amount
is less than full replacement cost. Lessee Owned Alterations and Utility Installations shall be
insured by Lessee under Paragraph 8.4. If the coverage is available and commercially appropriate,
such policy or policies shall insure against all risks of direct physical loss or damage (except
the perils of flood and/or earthquake unless required by a Lender), including coverage for any
additional costs resulting from debris removal and reasonable amounts of coverage for the
enforcement of any ordinance or law regulating the reconstruction or replacement of any undamaged
sections of the Premises required to be demolished or removed by reason of the enforcement of any
building, zoning, safety or land use laws as the result of a covered cause of lass, but not
including plate glass insurance. 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.

          (b) Rental Value. Lessor shall, in addition, obtain and keep in force during the term of
this Lease a policy or policies in the name of Lessor, with loss payable to Lessor and Lender(s),
insuring the loss of the full rental and other charges payable by Lessee to Lessor under this Lease
for one (1) year (including all real estate taxes, insurance costs, and any scheduled rental
increases). Said insurance shall provide that in the event the Lease is terminated by reason of an
insured loss, the period of indemnity for such coverage shall be extended beyond the date of the
completion of repairs or replacement of the Premises, to provide for one full year’s loss of rental
revenues from the date of any such loss. 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 rental income, property taxes, insurance premium costs and other
expenses, if any, otherwise payable by Lessee, for the next twelve (12) month period.

          (c) Adjacent Premises. If the Premises are part of a larger building, or if the Premises are
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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.

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

     8.4 Lessee’s Property Insurance. Subject to the requirements of Paragraph 8.5, Lessee at its
cost shall either by separate policy or, at Lessor’s option, by endorsement to a policy already
carried, maintain insurance coverage on all of Lessee’s personal property, Lessee Owned Alterations
and Utility Installations in, on, or about the Premises similar in coverage to that carried by the
Insuring Party under Paragraph 8.3. 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 or the restoration of Lessee Owned
Alterations and Utility Installations. Lessee shall be the Insuring Party with respect to the
insurance required by this Paragraph 8.4 and shall provide Lessor with written evidence that such
insurance is in force.

     8.5 Insurance Policies. Insurance required hereunder shall be in companies duly licensed 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, or such other rating as may be required by
a Lender having a lien on the Premises, as set forth in the most current issue of “Best’s Insurance
Guide.” Lessee shall not do or permit to be done anything which shall invalidate the insurance
policies referred to in this Paragraph 8. Lessee shall cause to be delivered to Lessor certified
copies of, or certificates evidencing the existence and amounts of, the insurance, and with the
additional insureds, required under Paragraph 8.2(a) and 8.4. No such policy shall be cancelable
or subject to modification except after thirty (30) days prior written notice to Lessor. Lessee
shall at least thirty (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.

     8.6 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor
(“Waiving Party”) each hereby release and relieve the other, and waive their entire right to
recover damages (whether in contract or in tort) against the other, for loss of or damage to the
Waiving Party’s property arising out of or incident to the perils required to be insured against
under Paragraph 8. The effect of such releases and waivers of the right to recover damages shall
not be limited by the amount of insurance carried or required, or by any deductibles applicable
thereto.

     8.7 Indemnity. Except for Lessor’s negligence and/or breach of express warranties, 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, costs, liens, judgments, penalties, permits, attorney’s and consultant’s fees,
expenses and/or liabilities arising out of, involving, or in dealing with, the occupancy of the
Premises by Lessee, the conduct of Lessee’s business, any act, omission or neglect of Lessee, its
agents, contractors, employees or invitees, and out of any Default or Breach by Lessee in the
performance in a timely manner of any obligation on Lessee’s part to be performed under this Lease.
The foregoing shall include, but not be limited to, the defense or pursuit of any claim or any
action or proceeding involved therein, and whether or not (in the case of claims made against
Lessor) litigated and/or reduced to judgment, and whether well founded or not. In case any action
or proceeding be brought against Lessor by reason of any of the foregoing matters, Lessee upon
notice from Lessor shall 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 so 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, air conditioning 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, and regardless of whether the
cause of such damage or injury or the means of repairing the same is accessible or not. Lessor
shall not be liable for any damages arising from any act or neglect of any other tenant of Lessor.
Notwithstanding Lessor’s negligence or breach of this Lease, Lessor shall under no circumstances be
liable for injury to Lessee’s business or for any loss of income or profit therefrom.

9. Damage or Destruction.

     9.1 Definitions.

          (a) “Premises Partial Damage” shall man damage or destruction to the improvements on the
Premises, other than Lessee Owned Alterations and Utility Installations, the repair cost of which
damage or destruction is less than 50% of the then Replacement Cost of the Premises immediately
prior to such damage or destruction, excluding from such calculation the value of the land and
Lessee Owned Alterations and Utility Installations.

          (b) “Premises Total Destruction” shall mean damage or destruction to the Premises, other than
Lessee Owned Alterations and Utility Installations the repair cost of which damage or destruction
is 50% or more then the Replacement Cost of the Premises immediately prior to such damage or
destruction, excluding from such calculation the value of the land and Lessee Owned Alterations and
Utility Installations.

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

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

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

     9.2 Partial Damage—Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs,
then Lessor shall, a t Lessor’s expense, repair such damage (but not Lessee’s Trade Fixtures or
Lessee Owned Alterations or Utility Installations) as soon as reasonably possible and this Lease
shall continue in full force and effect. Notwithstanding the foregoing, if the required insurance
was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring
Party shall promptly contribute the shortage in proceeds as and when required to complete said
repairs. In the event, however, the shortage in proceeds 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 ten (10) days following
receipt of written notice of such shortage and request therefor. If Lessor receives said funds or
adequate assurance thereof within said ten (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 Lessor does not receive such funds or assurance within said period, Lessor
may nevertheless elect by written notice to Lessee within ten (10) days thereafter to 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. If in such case Lessor does not so
elect, then this Lease shall terminate sixty (60) days following the occurrence of the damage or
destruction. Unless otherwise agreed, Lessee shall in no event have any right to reimbursement
from Lessor for 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 rather than Paragraph
9.2, notwithstanding that there may be some insurance coverage, but the net proceeds of any such
insurance shall be made available for the repairs if made by either Party.

     9.3 Partial Damage—Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss
occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the
repairs at Lessee’s expense and this Lease shall continue in full force and effect, but subject to
Lessor’s rights under Paragraph 13), Lessor may at Lessor’s option, either: (i) repair such damage
as soon as reasonably possible at Lessor’s expense, in which event this Lease shall continue in
full force and effect, or (ii) give written notice to Lessee within thirty (30) days after receipt
by Lessor of knowledge of the occurrence of such damage of Lessor’s desire to terminate this Lease
as of the date sixty (60) days following the giving of such notice. In the event Lessor elects to
give such notice of Lessor’s intention to terminate this Lease, lessee shall have the right within
ten (10) days after the receipt of such notice to give written notice to Lessor of Lessee’s
commitment to pay for the repair of such damage totally at Lessee’s expense and without
reimbursement from Lessor. Lessee shall provide Lessor with the required funds or satisfactory
assurance thereof within thirty (30) days following Lessee’s said 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 and the required funds are available. If Lessee does not give such
notice and provide the funds or assurance thereof within the times specified above, this Lease
shall terminate as of the date specified in Lessor’s notice of termination.

     9.4 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total
Destruction occurs (including any destruction required by any authorized public authority), this
Lease shall terminate sixty (60) days following the date of such Premises Total Destruction,
whether or not the damage or destruction is an Insured Loss or was caused by a negligent or willful
act of Lessee. In the event, however, that the damage or destruction was caused by Lessee, Lessor
shall have the right to recover Lessor’s damages from Lessee except as released and waived in
Paragraph 8.6.

     9.5 Damage Near End of Term. If at any time during the last six (6) months of the term of
this Lease there is damage for which the cost to repair exceeds one (1) month’s Base Rent, whether
or not an Insured Loss, Lessor may, at Lessor’s option, terminate this Lease effective sixty (60)
days following the date of occurrence of such damage by giving written notice to Lessee of Lessor’s
election to do so within thirty (30) days after the date of occurrence of such damage. Provided,
however, 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, within twenty (20) days following the occurrence
of the damage, or before the expiration of the time provided in such option for its exercise,
whichever is earlier (“Exercise Period”), (i) exercising such option and (ii) providing Lessor with
any shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs. If
Lessee duly exercise such option during said Exercise Period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor’s
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 said Exercise Period, then Lessor may at Lessor’s option terminate this Lease as of the
expiration of said sixty (60) day period following the occurrence of such damage by giving written
notice to Lessee of Lessor’s election to do so within ten (10) days after the expiration of the
Exercise Period, notwithstanding any term or provision in the grant of option to the contrary.

     9.6 Abatement of Rent; Lessee’s Remedies.

          (a) In the event of damage described in Paragraph 9.2 (Partial Damage – Insured), whether or
not Lessor or Lessee repairs or restores the Premises, the Base

	 	 	 	 	 
	 

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Rent, Real Property Taxes, insurance premiums, and other charges, if any, payable by lessee
hereunder for the period during which such damage, its repair or the restoration continues (not to
exceed the period for which rental value insurance is required under Paragraph 8.3(b)), shall be
abated in proportion to the degree to which Lessee’s use of the Premises is impaired. Except for
abatement of Base Rent, Real Property Taxes, insurance premiums, and other charges, if any, as
aforesaid, all other obligations of Lessee hereunder shall be performed by Lessee, and Lessee shall
have no claim against Lessor for any damage suffered by reason of any such repair or restoration.

          (b) If Lessor shall be obligated to repair or restore the Premises under the provisions of
this Paragraph 9 and shall not commence, in a substantial and meaningful way, the repair or the
restoration of the Premises within ninety (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 sixty (60) days following the giving of such notice. If Lessee gives such
notice to Lessor and such Lenders and such repair or restoration is not commenced within thirty
(30) days after receipt of such notice, this Lease shall terminate as of the date specified in said
notice. If Lessor or a Lender commences the repair or restoration of the Premises within thirty
(30) days after receipt of such notice, this Lease shall continue in full force and effect.
“Commence” as used in this Paragraph 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 Hazardous Substance Conditions. If a Hazardous Substance Condition occurs, unless Lessee
is legally responsible therefor (in which case Lessee shall make the investigation and remediation
thereof required by Applicable Law and this Lease shall continue in full force and effect, but
subject to Lessor’s rights under Paragraph 13), Lessor may at Lessor’s option either (i)
investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably
possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or
(ii) if the estimated cost to investigate and remediate such condition exceeds twelve (12) times
the then monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee within
thirty (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 sixty (60) days following the
giving of such notice. In the event Lessor elects to give such notice of Lessor’s intention to
terminate this Lease, Lessee shall have the right within ten (10) days after the receipt of such
notice to give written notice to Lessor of Lessee’s commitment to pay for the investigation and
remediation of such Hazardous Substance Condition totally at Lessee’s expense and without
reimbursement from Lessor except to the extent of an amount equal to twelve (12) times the then
monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with the funds
required of Lessee or satisfactory assurance thereof within thirty (30) days following Lessee’s
said commitment. In such event this Lease shall continue in full force and effect, and Lessor
shall proceed to make such investigation and remediation as soon as reasonably possible and the
required funds are available. If Lessee does not give such notice and provide the required funds
or assurance thereof within the time specified above, this Lease shall terminate as of the date
specified in Lessor’s notice of termination. If a Hazardous Substance Condition occurs for which
Lessee is not legally responsible, there shall be abatement of Lessee’s obligations under this
Lease to the same extent as provided in Paragraph 9.6(1) for a period of not to exceed twelve (12)
months.

     9.8 Termination—Advance Payments. Upon termination of this Lease pursuant to this 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 under the terms of
this Lease.

     9.9 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 (a) Payment of Taxes. Lessor shall pay the Real Property Taxes, as defined in Paragraph
10.2, applicable to the Premises; provided, however, that Lessee shall pay, in addition to rent,
the amount, if any, by which Real Property Taxes applicable to the Premises increase over the
fiscal tax year during which Commencement Date occurs (“Tax Increase”). Subject to Paragraph
10.1(b), payment of any such Tax Increase shall be made by Lessee within thirty (30) days after
receipt of Lessor’s written statement setting forth the amount due and the computation thereof.
Lessee shall promptly furnish Lessor with satisfactory evidence that such taxes have been paid. If
any such taxes to be paid by Lessee shall cover any period of time prior to or after the expiration
or earlier termination of the term hereof, Lessee’s share of such taxes shall be equitably prorated
to cover only the period of time within the tax fiscal year this Lease in is effect, and Lessor
shall reimburse Lessee for any overpayment after such proration.

          (b) Advance Payment. In order to insure payment when due and before delinquency of any or
all Real Property Taxes, Lessor reserves the right, at Lessor’s option, to estimate the current
Real Property Taxes applicable to the Premises, and to require such current year’s Tax Increase to
be paid in advance to Lessor by Lessee, either: (i) in a lump sum amount equal to the amount due,
at least twenty (20) days prior to the applicable delinquency date, or (ii) monthly in advance with
the payment of the Base Rent. If Lessor elects to require payment monthly in advance, the monthly
payment shall be that equal monthly amount which, over the number of months remaining before the
month in which the applicable tax installment would become delinquent (and without interest
thereon), would provide a fund large enough to fully discharge before delinquency the estimated Tax
Increase to be paid. When the actual amount of the applicable Tax Increase is known, the amount of
such equal monthly advance payment shall be adjusted as required to provide the fund needed to bay
the applicable Tax Increase before delinquency. If the amounts paid to Lessor by Lessee under the
provisions of this Paragraph are insufficient to discharge the obligations of Lessee to pay such
Tax Increase as the same become due, Lessee shall pay to Lessor, upon Lessor’s demand, such
additional sums as are necessary to pay such obligation. All moneys paid to Lessor under this
Paragraph 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 the obligations of Lessee under this Lease, then
any balance of funds paid to Lessor under the provisions of this Paragraph may, subject to
proration as provided in Paragraph 10.1(a), at the option of Lessor, be treated as an additional
Security Deposit under Paragraph 5.

          (c) Additional Improvements. Notwithstanding Paragraph 10.1(a) hereof, 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.

     10.2 Definition of “Real Property Taxes.” As used herein, the term “Real Property Taxes”
shall include any form of real estate tax or assessment, general, special, ordinary or
extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax
(other than inheritance, personal income or estate taxes) imposed upon the Premises by any
authority having the direct or indirect power to tax, including any city, state or federal
government, or any school, agricultural, sanitary, fire, street, drainage or other improvement
district thereof, levied against any legal or equitable interest of Lessor in the Premises or in
the real property of which the Premises are a part, Lessor’s right to rent or other income
therefrom, and/or Lessor’s business of leasing the Premises. The term “Real Property Taxes” shall
also include any tax, fee, levy, assessment or charge, or any increase therein, imposed by reason
of events occurring, or changes in applicable law taking effect, during the term of this Lease,
including but not limited to a change in the ownership of the Premises or in the improvements
thereon, the execution of this Lease, or any modification, amendment or transfer thereof, and
whether or not contemplated by the Parties.

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

     10.4 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 contained in the Premises or elsewhere.
When possible, Lessee shall cause its 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 personal property shall be assessed with Lessor’s real property, Lessee shall pay Lessor the
taxes attributable to Lessee within ten (10) days after receipt of a written statement setting
forth the taxes applicable to Lessee’s property or, at Lessor’s option, as provided in Paragraph
10.1(b).

11. Utilities. Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal
and other utilities and services supplied to the Premises, together with any taxes thereon. If any
such services are not separately metered to Lessee, Lessee shall pay a reasonable proportion, to be
determined by Lessor, of all charges jointly metered with other premises.

12. Assignment and Subletting.

     12.1 Lessor’s Consent Required.

          (a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or
otherwise transfer or encumber (collectively, “assignment”) or sublet all or any part of Lessee’s
interest in this Lease or in the Premises without Lessor’s prior written consent given under and
subject to the terms of Paragraph 36.

          (b) A change in the control of Lessee shall constitute an assignment requiring Lessor’s
consent. The transfer, on a cumulative basis, of twenty-five percent (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, refinancing, 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, as hereinafter
defined, by an amount equal to or greater than twenty-five percent (25%) of such Net Worth of
Lessee as it was represented to Lessor at the time of execution by Lessor 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, at whichever time said Net Worth
of Lessee was or is greater, shall be considered an assignment of this Lease by Lessee to which
Lessor may reasonably withhold its consent. “Net Worth of Lessee” for purposes of this Lease shall
be the net worth of Lessee (excluding any guarantors) established under generally accepted
accounting principles consistently applied.

          (d) An assignment or subletting of Lessee’s interest in this Lease without Lessor’s specific
prior written consent shall, at Lessor’s option, be a Default curable after notice per Paragraph
13.1(c), or a noncurable Breach without the necessity of any notice and grace period. If Lessor
elects to treat such unconsented to assignment or subletting as a noncurable Breach, Lessor shall
have the right to either: (i) terminate this Lease, or (ii) upon thirty (30) days written notice
(“Lessor’s Notice”), increase the monthly Base Rent to fair market rental value or one hundred ten
percent (110%) of the Base Rent then in effect, whichever is greater. Pending termination of the
new fair market rental value, if disputed by Lessee, Lessee shall pay the amount set forth in
Lessor’s Notice, with any overpayment credited against the next installment(s) of Base Rent coming
due, and any underpayment for the period retroactively to the effective date of the adjustment
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immediately upon the determination thereof. Further, in the event of such Breach and market value
adjustment, (i) the purchase price of any option to purchase the Premises held by Lessee shall be
subject to similar adjustment to the then fair market value (without the Lease being considered an
encumbrance or any deduction for depreciation or obsolescence, and considering the Premises at its
highest and best use and in good condition), or one hundred ten percent (110%) of the price
previously in effect, whichever is greater, (ii) any index-oriented rental or price adjustment
formulas contained in this Lease shall be adjusted to require that the base index be determined
with reference to the index applicable to the time of such adjustment, and (iii) any fixed rental
adjustments scheduled during the remainder of the Lease term shall be increased in the same ratio
as the new market rental bears to the Base Rent in effect immediately prior to the market value
adjustment.

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

     12.2 Terms and Conditions Applicable to Assignment and Subletting.

          (a) Regardless of Lessor’s consent, any assignment or subletting shall not: (i) be effective
without the express written assumption by such assignee or sublessee of the obligations of Lessee
under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) after the primary
liability of Lessee for the payment of Base Rent and other sums due Lessor hereunder or for the
performance of any other obligations to be performed by Lessee under this Lease.

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

          (c) The consent of Lessor to any assignment or subletting shall not constitute a consent to
any subsequent assignment or subletting by Lessee or to any subsequent or successive assignment or
subletting by the sublessee. However, Lessor may consent to subsequent sublettings and assignments
of the sublease or any amendments or modifications thereto without notifying Lessee or anyone else
liable on the Lease or sublease and without obtaining their consent, and such action shall not
relieve such persons from liability under this Lease or sublease.

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

          (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
non-refundable deposit of $1,000 or ten percent (10%) of the current monthly Base Rent, whichever
is greater, as reasonable consideration for Lessor’s considering and processing the request for
consent. Lessee agrees to provide Lessor with such other or additional information and/or
documentation as may be reasonably requested by Lessor.

          (f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such
assignment or entering into such sublease, be deemed, for the benefit of Lessor, 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 in writing.

          (g) The occurrence of a transaction described in Paragraph 12.1(c) shall give Lessor the
right (but not the obligation) to require that the Security Deposit be increased to an amount equal
to six (6) times the then monthly Base Rent, and Lessor may make the actual receipt by Lessor of
the amount required to establish such Security Deposit a condition to Lessor’s consent to such
transaction.

          (h) Lessor, as a condition to giving its consent to any assignment or subletting, may require
that the amount and adjustment structure of the rent payable under this Lease be adjusted to what
is then the market value and/or adjustment structure for property similar to the Premises as then
constituted.

     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 rentals and
income arising from any sublease of all or a portion of the Premises heretofore or hereafter made
by Lessee, and Lessor may collect such rent and income and apply same toward Lessee’s obligations
under this Lease; provided, however, that until a Breach (as defined in Paragraph 13.1) shall occur
in the performance of Lessee’s obligations under this Lease, Lessee may, except as otherwise
provided in this Lease, receive, collect and enjoy the rents accruing under such sublease. Lessor
shall not, by reason of this or any other assignment of such sublease to Lessor, nor by reason of
the collection of the rents from a sublessee, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee’s obligations to such sublessee under such
sublease. 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 the rents and other charges due and to become due under the
sublease. Sublessee shall rely upon any such statement and request from Lessor and shall pay such
rents and other charges to Lessor without any obligation or right to inquire as to whether such
Breach exists and notwithstanding any notice from or claim from Lessee to the contrary. Lessee
shall have no right or claim against said sublessee, or, until the Breach has been cured, against
Lessor, for any such rents and other charges so paid by said sublessee to Lessor.

          (b) In the event of a Breach by Lessee in the performance of its obligations under this
Lease, Lessor, at its option and without any obligation to do so, may require any sublessee to
attorn to Lessor, in which event Lessor shall undertake the obligations of the sublessor under such
sublease from the time of the exercise of said option to the expiration of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any other prior Defaults or Breaches of such sublessor under
such sublease.

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

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

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

13. Default; Breach; Remedies.

     13.1 Default; Breach. Lessor and Lessee agree that if an attorney is consulted by Lessor in
connection with a Lessee Default or Breach (as hereinafter defined), $350.00 is s reasonable
minimum sum per such occurrence for legal services and costs in the preparation and service of a
notice of Default, and that Lessor may include the cost of such services and costs in said notice
as rent due and payable to cure said Default. A “Default” is defined as a failure by the Lessee to
observe, comply with or perform any of the terms, covenants, conditions or rules applicable to
Lessee under this Lease. A “Breach” is defined as the occurrence of any one or more of the
following Defaults, and, where a grace period for cure after notice is specified herein, the
failure by Lessee to cure such Default prior to the expiration of the applicable grace period,
shall entitle Lessor to pursue the remedies set forth in Paragraphs 13.2 and/or 13.3:

          (a) The vacating of the Premises without the intention to reoccupy same, or the abandonment
of the Premises.

          (b) Except as expressly otherwise provided in this Lease, the failure by Lessee to make any
payment of Base Rent or any other monetary payment required to be made by lessee hereunder, whether
to Lessor or to a third party, as and when due, the failure by Lessee to provide Lessor with
reasonable evidence of insurance or surety bond required under this Lease, or the failure of Lessee
to fulfill any obligation under this Lease which endangers or threatens life or property, where
such failure continues for a period of three (3) days following written notice thereof by or on
behalf of Lessor to Lessee.

          (c) Except as expressly otherwise provided in this Lease, the failure by Lessee to provide
Lessor with reasonable written evidence (in duly executed original form, if applicable) of (i)
compliance with applicable law per Paragraph 6.3, (ii) the inspection, maintenance and service
contracts required under Paragraph 7.1(b), (iii) the recission of an unauthorized assignment or
subletting per Paragraph 12.1(b), (iv) a Tenancy Statement per Paragraphs 16 or 37, (v) the
subordination or non-subordination of this Lease per Paragraph 30, (vi) the guaranty of the
performance of Lessee’s obligations under this Lease if required under Paragraphs 1.11 and 37,
(vii) the execution of any document requested under Paragraph 42 (easements), or (viii) any other
documentation or information which Lessor may reasonably require of Lessee under the terms of this
Lease, where any such failure continues for a period of ten (10) days following written notice by
or on behalf of Lessor 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, that are to be observed, complied with or
performed by Lessee, other than those described in subparagraphs (a), (b) or (c), above, where such
Default continues for a period of thirty (30) days after written notice thereof by or on behalf of
Lessor to Lessee; provided, however, that if the nature of Lessee’s Default is such that more than
thirty (30) days are reasonably required for its cure, then it shall not be deemed to be a Breach
of this Lease by Lessee if Lessee commences such cure within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion.

          (e) The occurrence of any of the following events: (i) The making by lessee of any general
arrangement or assignment for the benefit of creditors; (ii) Lessee’s 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 sixty (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 thirty (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 thirty (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 by Lessor that any financial statement given to Lessor by Lessee or any
Guarantor of Lessee’s obligations hereunder 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 breach basis, and Lessee’s failure
within sixty (60) days following written notice by or on behalf of Lessor to Lessee of any such
event, to provide Lessor with 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 affirmative duty or obligation of Lessee under
this Lease, within ten (10) days after written notice to Lessee (or in case of an emergency,
without notice), Lessor may at its option (but without obligation to do so), perform such duty or
obligation on Lessee’s behalf, including but not

	 	 	 	 	 
	 

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limited to the obtaining of reasonably required bonds, insurance policies, or governmental
licenses, permits or approvals. The costs and expenses of any such performance by Lessor shall be
due and payable by Lessee to Lessor upon invoice therefor. If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn, Lessor, at its option, may required all
future payments to be made under this Lease by Lessee to be made only by cashier’s check. In the
event of a Breach of this Lease by Lessee, as defined in Paragraph 13.1, with or without further
notice or demand, and without limited Lessor in the exercise of any right or remedy which Lessor
may have by reason of such Breach, Lessor may:

          (a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case
this Lease and the term hereof shall terminate and Lessee shall immediately surrender possession of
the Premises to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the
worth at the time of the award of 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 the amount by
which the unpaid rent for the balance of the term after the time of awards 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 the leasing commission paid by Lessor applicable to
the unexpired term of this Lease. The worth at the time of award of the amount referred to
provision (iii) of the prior sentence shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).
Efforts by Lessor to mitigate damages caused by Lessee’s default or Breach of this Lease shall not
waive Lessor’s right to recover damages under this Paragraph. If termination of this Lease is
obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to
recover in such proceeding the unpaid rent and damages as are recoverable therein, or Lessor may
reserve the right to recover all or any part thereof in a separate suit for such rent and/or
damages. If a notice and grace period are required under subparagraphs 13/1(b), (c) or (d) was not
previously given, a notice pay rent or quit, or to perform or quit, as the case may be, given to
Lessee under any statute authorizing the forfeiture of leases for unlawful detainer shall also
constitute the applicable notice for grace period purposes required by subparagraphs 13.1(b), (c)
or (d). In such case, the applicable grace period under subparagraphs 13.1(b), (c) or (d) and
under the unlawful detainer statute shall run concurrently after the one such statutory notice, 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 its in this Lease and/or by said statute.

          (b) Continue the Lease and Lessee’s right to possession in effect (in California under
California Civil Code Section 1951.4) after Lessee’s Breach and abandonment and recover the rent as
it becomes due, provided Lessee has the right to sublet or assign, subject only to reasonable
limitations. See Paragraphs 12 and 36 for the limitations on assignment and subletting which
limitations Lessee and Lessor agree are reasonable. Acts of maintenance or preservation, efforts
to relet the Premises, or the appointment of a receiver to protect the Lessor’s interest under the
Lease, shall not constitute a termination of the Lessee’s right to possession.

          (c) Pursue any other remedy now or hereafter available to Lessor under the laws or judicial
decisions of the state wherein the Premises are located.

          (d) 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 by reason of Lessee’s occupancy of the
Premises.

     13.3 Inducement Recapture In Event Of Breach. Any agreement by Lessor for free or abated rent
or other charges applicable to the Premises, 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 to be performed or observed by Lessee during the term hereof as the same
may be extended. Upon the occurrence of a Breach of this Lease by Lessee, as defined in Paragraph
13.1, 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, and recoverable by Lessor as additional rent due under this Lease,
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 to Lessor of rent
and other sums due hereunder 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
the terms of any ground lease, mortgage or trust deed covering the Premises. Accordingly, if any
installment of rent or any other sum due from Lessee shall not be received by Lessor or Lessor’s
designee within five (5) days after such amount shall be due, then, without any requirement for
notice to Lessee, Lessee shall pay to Lessor a late charge equal to six percent (6%) of such
overdue amount. The parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Lessor will incur by reason of late payment by Lessee. 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 Lessor from exercising any of the other rights and
remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not
collected, for three (3) consecutive installments of Base Rent, then notwithstanding Paragraph 4.1
or any other provision of this Lease to the contrary, Base Rent shall, at Lessor’s option, become
due and payable quarterly in advance.

     13.5 Breach by Lessor. 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 13.5, a reasonable time shall in no event be less than thirty (30) days after
receipt by Lessor, and by the holders of any ground lease, mortgage or deed of trust covering the
Premises 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 thirty (30) days after
such notice are reasonably required for its performance, then Lessor shall not be in breach of this
Lease if performance is commenced within such thirty (30) day period and thereafter diligently
pursued to completion.

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 (all of which are herein called
“condemnation”), this Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs. If more than ten percent (10%) of the
floor area of the Premises, or more than twenty-five percent (25%) of the land area not occupied by
any building, is taken by condemnation, Lessee may, at Lessee’s option, to be exercised writing
within ten (10) days after Lessor shall have given Lessee written notice of such taking (or in the
absence of such notice, within ten (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 the same proportion as the rentable floor area of the Premises taken bears to the
total rentable floor area of the building located on the Premises. No reduction of Base Rent shall
occur if the only portion of the Premises taken is land on which there is no building. Any award
for the taking of all or any part of the Premises under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the property of Lessor, whether such award
shall be made as compensation for diminution in value of the leasehold or for the taking of the
fee, or as severance damages; provided, however, that Lessee shall be entitled to any compensation
separately awarded to Lessee for Lessee’s relocation expenses and/or loss of Lessee’s Trade
Fixtures. In the event that this Lease is not terminated by reason of such condemnation, Lessor
shall to the extent of its net severance damages received, over and above the legal and other
expenses incurred by Lessor in the condemnation matter, repair any damage to the Premises caused by
such condemnation, except to the extent that Lessee has been reimbursed therefor by the condemning
authority. Lessee shall be responsible for the payment of any amount in excess of such net
severance damages required to complete such repair.

15.	Broker’s
Fee. 15.1	The Brokers named in Paragraph 1.10 are the procuring causes of this Lease.
	15.2	Upon execution of this Lease by both Parties, Lessor shall pay to said Brokers jointly, or in such separate shares as they may mutually designate in writing, a fee as set forth in a separate written agreement between Lessor and said Brokers (or in the event there is no separate written agreement between Lessor and said Brokers, the sum of $_____________________) for brokerage services rendered by said Brokers to Lessor in this transaction.
	15.3	Unless Lessor and Brokers have otherwise agreed in writing, Lessor further agrees that: (a) if Lessee exercises any Option (as defined in Paragraph 39.1) or any Option subsequently granted which is substantially similar to an Option granted to Lessee in this Lease, or (b) if Lessee acquires any rights to the Premises or other premises described in this Lease which are substantially similar to what Lessee would have acquired had an Option herein granted to Lessee been exercised, or (c) if Lessee remains in possession of the Premises, with the consent of Lessor, after the expiration of the term of this Lease after having failed to exercise an Option, or (d) if said Brokers are the procuring cause of any other lease or sale entered into between the Parties pertaining to the Premises and/or any adjacent property in which Lessor has an interest, or (e) if Base Rent is increased, whether by agreement or operation of an escalation clause herein, then as to any of said transactions, Lessor shall pay said Brokers a fee in accordance with the schedule of said Brokers in effect at the time of the execution of this Lease.
	15.4	Any buyer or transferee of Lessor’s interest in this
Lease, whether such transfer is by agreement or by operation of law,
shall be deemed to have assumed Lessor’s obligation under this Paragraph 15.  Each Broker shall be a third party beneficiary of the provisions of this Paragraph 15 to the extent of its interest in any commission arising from this Lease and may enforce that right directly against Lessor and its successors.
	15.5	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 named in Paragraph 1.10) in connection with
the negotiation of this Lease and/or the consummation of the
transaction contemplated hereby, and that no broker or other person,
firm or entity other than said named Brokers is entitled to any
commission or finder’s fee in connection with said transaction.
Lessee and Lessor do each hereby agree to indemnify, protect, defend
and hold the other harmless from and against liability for
compensation or charges which may be claimed by any such unnamed
broker, finder or other similar party by reason of any dealings or
actions of the indemnifying Party, including any costs, expenses,
attorneys’ fees reasonably incurred with respect thereto.
	15.6	Lessor and Lessee hereby consent to and approve all agency
relationships, including any dual agencies, indicated in Paragraph
1.10.

16. Tenancy Statement.

	 	 	 	 	 
	 

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     16.1 Each Party (as “Responding Party”) shall within ten (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 “Tenancy Statement” 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.

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

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

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

19. Interest on Past-Due Obligations. Any monetary payment due Lessor hereunder, other than late
charges, not received by Lessor within thirty (30) days following the date on which it was due,
shall bear interest from the thirty-first (31st) day after it was due at the rate of 12% per annum,
but not exceeding the maximum rate allowed by law, in addition to the late charge provided for in
Paragraph 13.4.

20. 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.

21. Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease are
deemed to be rent.

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

23. Notices.

     23.1 All notices required or permitted by this Lease shall be in writing and may be delivered
in person (by hand or by message or courier service) 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 notice purposes. Either Party may by written notice to
the other specify a different address for notice purposes, except that upon Lessee’s taking
possession of the Premises, the Premises shall constitute Lessee’s address for the purpose of
mailing or delivering notices to Lessee. A copy of all notices required or permitted to be given
to Lessor hereunder shall be concurrently transmitted to such party or parties at such addresses as
Lessor may from time to time hereafter designate by written notice to Lessee.

     23.2 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 forty-eight (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 guarantees next day delivery
shall be deemed given twenty-four (24) hours after delivery of the same to the United States Postal
Service or courier. If any notice is transmitted by facsimile transmission or similar means, the
same shall be deemed served or delivered upon telephone confirmation of receipt of the transmission
thereof, provided a copy is also delivered via delivery or mail. If notice is received on a 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. Regardless of Lessor’s knowledge of a Default or Breach at the time of
accepting rent, the acceptance of rent by Lessor shall not be a waiver of any preceding Default or
Breach by Lessee of any provision hereof, other than the failure of Lessee to pay the particular
rent so accepted. Any payment given Lessor 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. Recording. Either Lessor or Lessee shall, upon request of the other, execute, acknowledge and
deliver to the other a short form memorandum of this Lease for recording purposes. The Party
requesting recordation shall be responsible for payment of any fees or taxes applicable thereto.

26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part
thereof beyond the expiration or earlier termination of this Lease.

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. All provisions of this Lease to be observed or performed by Lessee
are both covenants and conditions.

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 by Lessor upon the real property of
which the Premises are a part, to any and all advances made on the security thereof, and to all
renewals, modifications, consolidations, replacements and extensions thereof. Lessee agrees that
the Lenders holding any such Security Device shall have no duty, liability or obligation to perform
any of the obligations of Lessor under this Lease, but that in the event of Lessor’s default with
respect to any such obligation, Lessee will give any Lender whose name and address have been
furnished Lessee in writing for such purpose notice of Lessor’s default and allow such Lender
thirty (30) days following receipt of such notice for the cure of said default before invoking any
remedies Lessee may have by reason thereof. If any Lender shall elect to have this Lease and/or
any Option granted hereby superior to the lien of its Security Device and shall give written notice
thereof to Lessee, this Lease and such Options shall be deemed prior to such Security Device,
notwithstanding the relative dates of the documentation or recordation thereof.

     30.2 Attornment. Subject to the non-disturbance provisions of Paragraph 30.3, Lessee agrees
to attorn to a Lender or any other party who acquires ownership of the Premises by reason of a
foreclosure of a Security Device, and that in the event of such foreclosure, such new owner shall
not: (i) be liable for any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership, (ii) be subject to any offsets or defenses which Lessee might
have against any prior lessor, or (iii) be bound by prepayment of more than one (1) month’s rent.

     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
assurance (a “non-disturbance assurance”) from the Lender that Lessee’s possession 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.

     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 form 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 such
subordination or non-subordination, Attornment and/or non-disturbance agreement as is provided for
herein.

31. Attorney’s Fees. If any Party or Broker brings an action or proceeding to enforce the terms
hereof or declare rights hereunder, the Prevailing Party (as hereafter defined) or Broker in any
such proceeding, action, or appeal thereon, shall be entitled to reasonable attorney’s 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 attorney’s fees award shall not be computed in accordance with
any court fee schedule, but shall

	 	 	 	 	 
	 

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	 	 	 	V.V.W.
	GROSS

	 	PAGE 8	 	 

 

 

be such as to fully reimburse all attorney’s fees reasonably incurred. Lessor shall be entitled to
attorney’s 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.

32. Lessor’s Access; Showing Premises; Repairs. Lessor and Lessor’s agents shall have the right to
enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times for
the purpose of showing the same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the building of which they
are a part, as Lessor may reasonably deem necessary. Lessor may at any time place on or about the
Premises or building any ordinary “For Sale” signs and Lessor may at any time during the last one
hundred twenty (120) days of the term hereof place on or about the Premises any ordinary “For
Lease” signs. All such activities of Lessor shall be without abatement of rent or liability to
Lessee.

33. Auctions. Lessee shall not conduct, nor permit to be conducted, either voluntarily or
involuntarily, any auction upon the Premises without first having obtained Lessor’s prior written
consent. Notwithstanding anything to the contrary in this Lease, Lessor shall not be obligated to
exercise any standard of reasonableness in determining whether to grant such consent.

34. Signs. Lessee shall not place any sign upon the Premises, except that Lessee may, with
Lessor’s prior written consent, install (but not on the roof) such signs as are reasonably required
to advertise Lessee’s own business. The installation of any sign on the Premises by or for Lessee
shall be subject to the provisions of Paragraph 7 (Maintenance, Repairs, Utility Installations,
Trade Fixtures and Alterations). Unless otherwise expressly agreed herein, Lessor reserves all
rights to the use of the roof and the right to install, and all revenues from the installation of,
such advertising signs on the Premises, including the roof, as do not unreasonably interfere with
the conduct of Lessee’s business.

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

36. Consents.

          (a) Except for Paragraph 33 hereof (Auctions) or 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’ or other consultants’ fees)
incurred in the consideration of, or response to, a request by Lessee for any Lessor consent
pertaining to this Lease or the Premises, including but not limited to consents to an assignment, a
subletting or the presence or use of a Hazardous Substance, practice or storage tank, shall be paid
by Lessee to Lessor upon receipt of an invoice and supporting documentation therefor. Subject to
Paragraph 12.2(e) (applicable to assignment or subletting), Lessor may, as a condition to
considering any such request by Lessee, require that Lessee deposit with Lessor an amount of money
(in addition to the Security Deposit held under Paragraph 5) reasonably calculated by Lessor to
represent the cost Lessor will incur in considering and responding to Lessee’s request. Except as
otherwise provided, any unused portion of said deposit shall be refunded to Lessee without
interest. Lessor’s consent to any act, assignment of this Lease or subletting of the Premises by
Lessee shall not constitute an acknowledgement 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.

          (b) All conditions to Lessor’s consent authorized by this Lease are acknowledged by Lessee as
being reasonable. 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.

37. Guarantor.

     37.1 If there are to be any Guarantors of this Lease per Paragraph 1.11, the form of the
guaranty to be executed by each such Guarantor shall be in the form most recently published by the
American Industrial Real Estate Association, and each said Guarantor shall have the same
obligations as Lessee under this Lease, including but not limited to the obligation to provide the
Tenancy Statement and information called for by Paragraph 16.

     37.2 It shall constitute a Default of the Lessee under this Lease if any such Guarantor fails
or refuses, upon reasonable request by Lessor to give: (a) evidence of the due execution of the
guaranty called for by this Lease, including the authority of the Guarantor (and of the party
signing on Guarantor’s behalf) to obligate such Guarantor on said guaranty, together with a
certificate of incumbency showing the signature of the persons authorized to sign on its behalf,
(b) current financial statements of Guarantor as may from time to time be requested by Lessor, (c)
a Tenancy Statement, or (d) written confirmation that the guaranty is still in effect.

38. Quiet Possession. Upon payment by Lessee of the rent for the Premises and the observance and
performance of all of the covenants, conditions and provisions on Lessee’s part to be observed and
performed under this Lease, Lessee shall have quiet possession of the Premises for the entire term
hereof subject to all of the provisions of this Lease.

39. Options.

     39.1 Definition. As used in this Paragraph 39 the work “Option” has the following meaning:
(a) the right to extend the term of this Lease or to renew this Lease or to extend or renew any
lease that Lessee has no other property of Lessor; (b) the right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first refusal to lease
other property of Lessor or the right of first offer to lease other property of Lessor; (c) the
right to purchase the Premises, or the right of first refusal to purchase the Premises, or the
right of first offer to purchase the Premises, or the right to first purchase other property of
Lessor, or the right of first refusal to purchase other property of Lessor, or the right of first
offer to purchase other property of Lessor.

     39.2 Options Personal To Original Lessee. Each Option granted to Lessee is personal to the
original Lessee named in Paragraph 1.1 hereof, and cannot be voluntarily or involuntarily assigned
or exercised by any person or entity other than said original Lessee while the original Lessee is
in full and actual possession of the Premises and without the intention of thereafter assigning or
subletting. The Options, if any, herein granted to Lessee are not assignable, either as a part of
an assignment of this Lease or separately or apart therefrom, and no Option may be separated from
this Lease in any manner, by reservation or otherwise.

     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 to extend or renew this
Lease have been validly exercised.

39.4 Effect of Default on Options.

          (a) Lessee shall have no right to exercise an Option, notwithstanding any provision in the
grant of Option to the contrary: (i) during the period commencing with the giving of any notice of
Default under Paragraph 13.1 and continuing until the noticed Default is cured; or (ii) during the
period of time any monetary obligation due Lessor from Lessee is unpaid (without regard to whether
notice thereof is given Lessee), or (iii) during the time Lessee is in Breach of this Lease, or
(iv) in the event that Lessor has given to Lessee three (3) or more notices of Default under
Paragraph 13.1, whether or not the Defaults are cured, during the twelve (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) All rights of Lessee under the provisions of 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 during the term of this Lease, (i) Lessee fails to pay to Lessor a monetary
obligation of Lessee for a period of thirty (30) days after such obligation becomes due (without
any necessity of Lessor to give notice thereof to Lessee), or (ii) Lessor gives to Lessee three (3)
or more notices of Default under Paragraph 13.1 during any twelve (12) month period, whether or not
the Defaults are cured, or (iii) if Lessee commits a Breach of this Lease.

40. Multiple Buildings. If the Premises are part of a group of buildings controlled by Lessor,
Lessee hereby agrees that it will abide by, keep and observe all reasonable rules and regulation
which Lessor may make from time to time for the management, safety, care, and cleanliness of the
grounds, the parking and unloading of vehicles and the preservation of good order, as well as for
the convenience of other occupants or tenants of such other buildings and their invitees, and that
Lessee will pay its fair share of common expenses incurred in connection therewith.

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

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

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

Initials WL

E.M.W.

V.V.W.

	 	 	 
	GROSS

	 	PAGE 9

 

 

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 under the
provisions of this Lease.

44. Authority. If either Party hereto is a corporation, trust, or general or limited partnership,
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. If Lessee is a
corporation, trust or partnership, Lessee shall, within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority

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

46. Offer. Preparation of this Lease by Lessor or Lessor’s agent and submission of same to Lessee
shall not be deemed an offer to lease to Lessee. This Lease is not intended to be binding until
executed 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. The parties shall amend this Lease from time to time to reflect any
adjustments that are made to the Base Rent or other rent payable under this Lease. As long as they
do no materially change Lessee’s obligations hereunder, Lessee agrees to make such reasonable
non-monetary modifications to this Lease as may be reasonably required by an institutional,
insurance company, or pension plan Lender in connection with the obtaining of normal financing or
refinancing of the property of which the Premises are a part.

48. Multiple Parties. Except as otherwise expressly provided herein, if more than one person or
entity is named herein as either Lessor or Lessee, the obligations of such Multiple Parties shall
be the joint and several responsibility of all persons or entities named herein as such Lessor or
Lessee.

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.

IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY FOR
HIS APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO EVALUATE THE CONDITION OF THE
PROPERTY AS TO THE POSSIBLE PRESENCE OF ASBESTOS, STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO
REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES; THE
PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX
CONSEQUENCES OF THIS LEASE. IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN
CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.

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

	 	 	 	 	 	 	 	 	 	 
	Executed at Glendale, California	 	 	 	 	Executed at Santa Fe Springs
	on July 27, 1993	 	 	 	 	on July 26, 1993
	by LESSOR:	 	 	 	 	by LESSEE:
	The Woods Family Trust of June 4, 1977	 	 	 	 	Lee Enterprises
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 

	 
	 	 	 	 	 	 	 	 	 
	By /s/ Eugene M. Woods	 	 	 	 	By /s/ William W. Lee
	Name Printed: Eugene M. Woods,	 	 	 	 	Name Printed: Bill Lee
	Title: Trustee

	 	 	 	 	Title:	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	By /s/ Verda V. Woods

	 	 	 	 	By	 	 	 	 
	 	 	 	 	 	 	 	 
	Name Printed: Verda V. Woods	 	 	 	 	Name Printed:	 	 
	 

	 	 	 	 	 	 	 	 
	Title: Trustee

	 	 	 	 	Title:	 	 	 	 
	 	 	 	 	 	 	 	 
	Address: 512 West Windsor Road

	 	 	 	 	Address:	 	 	 	 
	 	 	 	 	 	 	 	 
	                    Glendale, Ca. 91204
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	Tel.
No.
(818) 956-5401          Fax
No. (___)
                    
          

	 	 	 	 	Tel. No.
	 	(___)___
	Fax No. (___)
	 

	 	 	 	 	 	 	 
	 	 

Initials WL

E.M.W.

V.V.W.

	 	 	 
	GROSS

	 	PAGE 10

 

 

Addendum to Standard Industrial Lease

Dated July 26, 1993, by and between

the Woods Family Trust of June 4, 1977 and

Bill Lee, d.b.a. Lee Enterprises

	49.	 	Rent

          Monthly rent shall be as follows:

	 	 	 	 	 
	Sept 1, 1993 to Dec. 31, 1993
	 	Free rent
	Jan. 1, 1994 to Dec. 31, 1994
	 	$	3,234.00	 
	Jan. 1, 1995 to Dec. 31, 1995
	 	$	3,349.50	 
	Jan. 1, 1996 to Dec. 31, 1996
	 	$	3,465.00	 
	Jan. 1, 1997 to Dec. 31, 1997
	 	$	3,580.50	 
	Jan. 1, 1998 to Dec. 31, 1998
	 	$	3,696.00	 

	50.	 	Security Deposit

          The security deposit of $5,000.00 shall be paid according to the following schedule:

$1,666.67 payable upon execution of the lease

$1,666.67 due on October 1, 1993

$1,666.67 due on November 1, 1993

          All other terms and conditions of paragraph 5 apply.

	51.	 	Lessor’s Obligations Prior to Commencement of Lease

          Prior to September 1, 1993, Lessor, at Lessor’s sole cost and expense will

	 	1.	 	Service and repair as necessary the air conditioning systems and the space
heaters such that they are placed in good operating condition

	 	2.	 	Renovate the lawn area in front of the Premises.

	52.	 	Maintenance of Heating and Air Conditioning Systems

Any repair costs above and beyond normal regular service shall be the responsibility of the
Lessor. Lessee shall procure and maintain service contracts on the air conditioners units
and space heaters per paragraph 7.2(a) and 7.2(b).

	53.	 	Broker’s Fee

Lessor will pay to Jim Litchfield, INCO Commercial Brokerage, fees according to the
following schedule

$1,552.32 upon execution of the lease

$1,607.76 payable on or before December 31, 1994

$1,663.20 payable on or before December 31, 1995

$1,718.64 payable on or before December 31, 1996

$1,774.08 payable on or before December 31, 1997

	 	 	 
	Initials: E.M.W.

V.V.W.

	 	INITIALS: WL

- 11 -

 

 

	54.	 	Options to Extend

Lessee shall have two (2) consecutive sixty (60) month Options to Extend the lease. Base
rent for the first option period (Jan. 1, 1999 to Dec. 31, 2003) shall be equal to
ninety-five percent (95%) of Fair Market Value as of January 1, 1999. Base rent for the
second option period (Jan. 1, 2004 to dec. 31, 2008) shall be equal to ninety-five percent
(95%) of Fair Market Value as of January 1, 2004. Rent increases during the option periods
shall be agreed upon by Lessor and Lessee and confirmed in writing prior to the commencement
of each option period.

	55.	 	Real Property Taxes

In the event of an increase in the real property taxes due to the sale or transfer of the
property, such increase will not be the obligation of the Lessee but shall be the obligation
of the buyer or transferee.

	56.	 	Contingencies

This lease is contingent upon Lessee obtaining an Occupancy Permit from the City of Santa Fe
Springs or any other City approval required for Lessee’s intended use of the Premises by
August 1, 1993. This lease is also contingent upon Lessee obtaining AQMD approval to
relocate Lessee’s equipment to the subject Premises by September 1, 1993. If Lessee does
not notify Lessor in writing that Lessee has been unable to obtain said approvals within the
time periods described in this Paragraph 56, it shall be deemed that Lessee has waived the
contingencies outlined in this Paragraph 56 and the Lease shall be in full force and effect.

	 	 	 
	Initials: E.M.W.

V.V.W.

	 	INITIALS: WL

- 12 -

 

 

ADDENDUM TO STANDARD LEASE

Addendum Dated     December 8, 1998

Lease Dated     July 26, 1993

By and Between (Lessor)     The Woods Family Trust of 6/4/77

(Lessee)     Lee Enterprises

Paragraph 57.

Option to Extend:

Lessor hereby grants to Lessee the Option to Extend the term of this lease for a 5 year period
commencing on January 1, 1999 upon each of the following terms:

	 	A.	 	Monthly rent for the period January 1, 1999 to December 31, 1999 shall be
$4,273.50 (37¢/sq. ft.).
	 
	 	B.	 	Monthly rent for the period January 1, 2000 to December 31, 2000 shall be
$4,389.00 (38¢/sq. ft.).
	 
	 	C.	 	Monthly rent for the period January 1, 2001 to December 31, 2001 shall be
$4,504.50 (39¢/sq. ft.).
	 
	 	D.	 	Monthly rent for the period January 1, 2002 to December 31, 2002 shall be
$4,620.00 (40¢/sq. ft.).
	 
	 	E.	 	Monthly rent for the period January 1, 2003 to December 31, 2003 shall be
$4,735.50 (41¢/sq. ft.).

			
	 	 	 
	Initials: W.L.
	 	Initials: E.W.

 

 

Addendum

     This Addendum (“Addendum”) to Standard Industrial/Commercial Single-Tenant Lease – Gross dated
July 26, 1993, for reference purposes only, (“Lease”) is made between Eugene M. Woods and Verda V.
Woods, Trustees of the Woods Family Trust of June 4, 1977 (“Lessor”) and Bill Lee, d.b.a. Lee
Enterprises (“Lessee”). Lessor and Lessee hereby agree that the provisions set forth below will be
deemed to be a part of the Lease and shall supersede any contrary provisions in the Lease. All
references in the Lease and in this Addendum shall be construed to mean the Lease and its Exhibits,
as amended and supplemented by this Addendum. All terms used in the Addendum shall have the same
meaning as the terms used in the Lease.

This Addendum is dated December 30, 2003 for reference purposes only. The Lease is amended as
follows:

	 	1.	 	The term of the Lease is extended to December 31, 2008.
	 
	 	2.	 	The monthly rent shall be as follows:

	 	 	 	 	 
	a. January 1, 2004 through December 31, 2004
	 	$5,486.25 (47.5¢ per sf)
	b. January 1, 2005 through December 31, 2005
	 	$5,659.50 (49.0¢ per sf)
	c. January 1, 2006 through December 31, 2006
	 	$5,832.75 (50.5¢ per sf)
	d. January 1, 2007 through December 31, 2007
	 	$6,006.00 (52.0¢ per sf)
	e. January 1, 2008 through December 31, 2008
	 	$6,179.25 (53.5¢ per sf)

	 	3.	 	Lessor’s tenant improvements: Lessor, at Lessor’s expense, shall complete the
following tenant improvements as soon as reasonably possible:

	 	a.	 	Install new lenses in the overhead office lights.
	 
	 	b.	 	Paint office areas in front of the building.
	 
	 	c.	 	Paint or replace, as needed, the office ceiling tiles.
	 
	 	d.	 	Repair or replace, as needed, incoming water pipes over the office
area.
	 
	 	e.	 	Refurbish the bathrooms including new fixtures and flooring.
	 
	 	f.	 	Repair asphalt area in back of building to Lessee’s insurance company’s
reasonable specifications.
	 
	 	g.	 	Inspect the HVAC utilizing a mutually agreed upon HVAC contractor and
complete recommended repairs or replacements.

	 	4.	 	Lessee, at Lessee’s expense, shall restore and refurbish the landscaping and irrigation
at the front of the building as soon as reasonably possible.

All other terms and provisions of the Lease shall remain the same.

	 	 	 	 	 	 	 	 	 
	Approved and Agreed:	 	 	 	Approved and Agreed:
	Lessor	 	 	 	Lessee
	WOODS FAMILY TRUST	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Cathy Bracken
	 	 	 	By:
	 	/s/ William W. Lee
	 

	 	 
	 	 	 	 	 	 
	 

	 	Cathy Bracken, Trustee
	 	 	 	 	 	Bill Lee
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 1/20/04
	 	 	 	Date:
	 	12/31/03exv10w2

 

EXHIBIT 10.2

STANDARD SUBLEASE

(Long-form to be used with pre-1996 AIREA leases)

(NOTE: NOT DESIGNED FOR SITUATIONS WHERE LESS THAN ENTIRE PREMISES ARE BEING SUBLET)

1. Basic Provisions (“Basic Provisions”).

          1.1 Parties: This Sublease (“Sublease”), dated for reference purposes only June 26,
2006,
is made by and among Bill Lee dba Lee Enterprises (“Sublessor”), and New Era Studios, Inc. a Nevada
corporation and successor by merger to Silvergraph LGT, LLC, a Delaware limited liability company
(“New Era”), and Silvergraph International, Inc., a Nevada corporation (“Silvergraph” which
together with New Era shall hereinafter be referred to as “Sublessee”), (collectively the
"Parties”), or individually a “Party”).

          1.2 Premises: That certain real property, including all improvements therein, and commonly
known by the street address of 11919 Burke Street, Santa Fe Springs, CA 90670 located in the
County of Los Angeles, State of California and generally described as (describe briefly the nature
of the property) a free standing industrial building of approximately 11,550 square feet
(“Premises”).

          1.3 Term: 2 years and 6 months commencing on April 1, 2006 as to New Era, and 2 years, 3
months and 4 days as to Silvergraph (collectively the “Commencement Date”) and ending December 31,
2008 (“Expiration Date”).

          1.4 Early Possession: April 1, 2006 (“Early Possession Date”).

          1.5 Base Rent: $ See Attachment per month (“Base Rent”), payable on the First day of each
month commencing April 1, 2006.

     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: $ None for the period
	 	 	 	 	 	.	 
	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	(b) Security Deposit: $ None (“Security Deposit”).
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	(c) Association Fees: $ None for the period	 	 	 	 	.	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(d) Other: $ See attachment for
	 	 	 	 	 	 	.	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	(e) Total Due Upon Execution of this Lease: $ None.

          1.7 Agreed Use: Screen Printing, general office and legal use.

          1.8 Real Estate Brokers:

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

     None represents Sublessor exclusively (“Sublessor’s Broker”);

     None represents Sublessee exclusively (“Sublessee’s Broker”); or

     None represents both Sublessor and Sublessee (“Dual Agency”).

               (b) Payment to Brokers: Upon execution and delivery of this Sublease by both Parties,
Sublessor shall pay to the Brokers the brokerage fee agreed to in a separate written agreement (or
if there is no such agreement, the sum of None or None% of the total Base Rent) for the brokerage
services rendered by the Brokers.

          1.9 Guarantor. The obligations of the Sublessee under this Sublease shall be guaranteed by
                                         (“Guarantor”).

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

     an Addendum consisting of Paragraphs 1.5 and 1.6(d);

     a plot plan depicting the Premises;

     a Work Letter;

     a copy of the Master Lease;

     other (specify):                                                                                 

2. Premises.

     2.1 Letting. Sublessor hereby subleases to Sublessee, and Sublessee hereby subleases from
Sublessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and
conditions set forth in this Sublease. Unless otherwise provided herein, any statement of size set
forth in this Sublease, 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: Sublessee is advised to verify the actual size prior
to executing this Sublease.

     2.2 Condition. Sublessor shall deliver the Premises to Sublessee broom clean and free of
debris on the Commencement Date or the Early Possession Date, whichever first occurs (“Start
Date”), and warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating,
ventilating and air conditioning systems (“HVAC”), and any items which the Sublessor is obligated
to construct pursuant to the Work Letter attached hereto, if any, other than those constructed by
Sublessee, shall be in good operating condition on said date. If a non-compliance with such
warranty exists as of the Start Date, or if one of such systems or elements should malfunction or
fail within the appropriate warranty period, Sublessor shall, as Sublessor’s sole obligation with
respect to such matter, except as otherwise provided in this Sublease, promptly after receipt of
written notice from Sublessee setting forth with specificity the nature and extent of such
non-compliance, malfunction or failure, rectify same at Sublessor’s expense. The warranty periods
shall be as follows: (i) 6 months as to the HVAC systems, and (ii) 30 days as to the remaining
systems and other elements. If

	 	 	 	 	 
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Sublessee does not give Sublessor the required notice within the appropriate warranty period,
correction of any such non-compliance, malfunction or failure shall be the obligation of Sublessee
at Sublessee’s sole cost and expense.

          2.3 Compliance. Sublessor warrants that any improvements, alterations or utility
installations made or installed by or on behalf of Sublessor to or on the Premises comply with all
applicable covenants or restrictions of record and applicable building codes, regulations and
ordinances (“Applicable Requirements”) in effect on the date that they were made or installed.
Sublessor makes no warranty as to the use to which Sublessee will put the Premises or to
modifications which may be required by the Americans with Disabilities Act or any similar laws as a
result of Sublessee’s use. NOTE: Sublessee is responsible for determining whether or not the
zoning and other Applicable Requirements are appropriate for Sublessee’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, Sublessor shall, except as otherwise provided, promptly after receipt of
written notice from Sublessee setting forth with specificity the nature and extent of such
non-compliance, rectify the same. If the Applicable Requirements are hereafter changed so as to
require during the term of this Sublease the construction of an addition to or an alteration of the
Building, the remediation of any Hazardous Substance, or the reinforcement of other physical
modification of the Building (“Capital Expenditure”), Sublessor and Sublessee shall allocate the
cost of such work as follows:

               (a) If such Capital Expenditures are required as a result of the specific and unique use of
the Premises by Sublessee as compared with uses by tenants in general, Sublessee shall be fully
responsible for the cost thereof, provided, however that if such Capital Expenditure is required
during the last two years of this Sublease and the cost thereof exceeds 6 months’ Base Rent,
Sublessee may instead terminate this Sublease unless Sublessor notifies Sublessee in writing,
within 10 days after receipt of Sublessee’s termination notice that Sublessor has elected to pay
the difference between the actual cost thereof and the amount equal to 6 months’ Base Rent. If the
Parties elect termination, Sublessee hall immediately cease the use of the Premises which requires
such Capital Expenditure and deliver to Sublessor written notice specifying a termination date at
least 90 days thereafter. Such termination date shall, however, in no event be earlier then the
last day that Sublessee 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 Sublessee (such as governmentally mandated seismic modifications, then Sublessor shall
pay for said Capital Expenditure and the cost thereof shall be prorated between the Sublessor and
Sublessee and Sublessee shall only be obligated to pay, each month during the remainder of the term
of this Sublease, on the date on which Rent is due, an amount equal to 1/144th the cost of such
Capital Expenditure. Sublessee shall pay interest on the unamortized balance at a rate that is
then commercially reasonable in the judgment of Sublessor’s accountant. Sublessee may, however,
prepay its obligation at any time. Provided, however, that if such Capital Expenditure is required
during the last 2 years of this Sublease or if Sublessor reasonably determines that it is not
economically feasible to pay its share thereof, Sublessor shall have the option to terminate this
Sublease upon 90 days prior written notice to Sublessee unless Sublessee notifies Sublessor, in
writing, within 10 days after receipt of Sublessor’s termination notice that Sublessee will pay for
such Capital Expenditure. If Sublessor does not elect to terminate, and fails to tender its share
of any such Capital Expenditure, Sublessee may advance such funds and deduct same, with interest,
from Rent until Sublessor’s share of such costs have been fully paid. If Sublessee is unable to
finance Sublessor’s share, or if the balance of the Rent due and payable for the remainder of this
Sublease is not sufficient to fully reimburse Sublessee on an offset basis, Sublessee shall have
the right to terminate this Sublease upon 10 days written notice to Sublessor.

               (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 Sublessee as a result of an actual or proposed change in use,
change in intensity of use, or modification to the Premises the, and in that event, Sublessee shall
be fully responsible for the cost thereof, and Sublessee shall not have any right to terminate this
Sublease.

          2.4 Acknowledgements. Sublessee acknowledges that: (a) it has been advised by Sublessor
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 Sublessee’s intended use, (b) Sublessee 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 Sublessor, Sublessor’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 Sublease. In addition, Sublessor acknowledges that: (i) Brokers have made no
representations, promises or warranties concerning Sublessee’s ability to honor the Sublease or
suitability to occupy the Premises, and (ii) it is Sublessor’s sole responsibility to investigate
the financial capability and/or suitability of all proposed tenants.

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

3. Possession.

          3.1 Early Possession. If Sublessee 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 Sublease (including but not limited to the obligations to pay
Sublessee’s Share of Common Area Operating Expenses, Real Property Taxes and insurance premiums and
to maintain the Premises) shall, however, be in effect during such period. Any such early
possession shall not affect the Expiration Date.

          3.2 Delay in Commencement. Sublessor agrees to use its best commercially reasonable efforts
to deliver possession of the Premises by the Commencement Date. If, despite said efforts,
Sublessor is unable to deliver possession as agreed, Sublessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Sublease. Sublessee shall
not, however, be obligated to pay Rent or perform its other obligations until it receives
possession of the Premises. If possession is not delivered within

	 	 	 	 	 
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60 days after the commencement date, Sublessee may, at its option, by notice in writing within 10
days after the end of such 60 day period, cancel this Sublease, in which event the Parties shall be
discharged from all obligations hereunder. Except at otherwise provided, if possession is not
tendered to Sublessee when required and Sublessee does not terminate this Sublease, as aforesaid,
any period of rent abatement that Sublessee would otherwise have enjoyed shall run from the date of
delivery of possession and continue for a period equal to what Sublessee would otherwise have
enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of
Sublessee. If possession is not delivered within 120 days after the commencement date, this
Sublease shall automatically terminate unless the Parties agree, in writing, to the contrary.

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

4. Rent and Other Charges.

          4.1 Rent Defined. All monetary obligations of Sublessee to Sublessor under the terms of this
Sublease (except for the Security Deposit) are deemed to be rent (“Rent”). Rent shall be payable
in lawful money of the United States to Sublessor at the address stated herein or to such other
persons or at such other places as Sublessor may designate in writing.

          4.2 Utilities. Sublessee 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.

5. Security Deposit. Sublessee shall deposit with Sublessor the sum specified in Paragraph 1.6(b)
as security for Sublessee’s faithful performance of Sublessee’s obligations hereunder. If
Sublessee fails to pay Rent or other charges due hereunder, or otherwise defaults with respect to
any provision of this Sublease, Sublessor may use, apply or retain all or any portion of said
deposit for the payment of any Rent or other charge in default or for the payment of any other sum
to which Sublessor may become obligated by reason of Sublessee’s default, or to compensate
Sublessor for any loss or damage which Sublessor may suffer thereby. If Sublessor so uses or
applies all or any, portion of said deposit, Sublessee shall within 10 days after written demand
therefore forward to Sublessor an amount sufficient to restore said Deposit to the full amount
provided for herein and Sublessee’s failure to do so shall be a material breach of this Sublease.
Sublessor shall not be required to keep said Deposit separate from its general accounts. If
Sublessee performs all of Sublessee’s obligations hereunder, said Deposit, or so much thereof as
not therefore been applied by Sublessor, shall be returned, without payment of interest to
Sublessee (or at Sublessor’s option, to the last assignee, if any, of Sublessee’s interest
hereunder) at the expiration of the term hereof, and after Sublessee has vacated the Premises. No
trust relationship is created herein between Sublessor and Sublessee with respect to said Security
Deposit.

6. Agreed Use. The Premises shall be used and occupied only for Screen Printing, general office
and related legal use and for not other purpose.

7. Master Lease.

          7.1 Sublessor is the lessee of the Premises by virtue of a lease, hereinafter the “Master
Lease”, wherein Eugene M. Woods and Verda V. Woods, Trustees of the Woods Family Trust of June 4,
1977 is the lessor, hereinafter the “Master Lessor”.

          7.2 This Sublease is and shall be at all times subject and subordinate to the Master Lease.

          7.3 The terms, conditions and respective obligations of Sublessor and Sublessee to each other
under this Sublease shall be the terms and conditions of the Master Lease except for those
provisions of the Master Lease which are directly contradicted by this Sublease in which event the
terms of this Sublease document shall control over the Master Lease. Therefore, for the purposes
of this Sublease, wherever in the Master Lease the work “Lessor” is used it shall be deemed to mean
the Sublessor herein and wherever in the Master Lease the word “Lessee” is used it shall be deemed
to mean the Sublessee herein.

          7.4 During the term of this Sublease and for all periods subsequent for obligations which have
arisen prior to the termination of this Sublease, Sublessee does hereby expressly assume and agree
to perform and comply with, for the benefit of Sublessor and Master Lessor, each and every
obligation of Sublessor under the Master Lease except for the following paragraphs which are
executed therefrom: No exclusions.

          7.5 The obligations that Sublessee has assumed under Paragraph 7.4 hereof are hereinafter
referred to as the “Sublessee’s Assumed Obligations”. The obligations that sublessee has not
assumed under paragraph 7.4 hereof are hereinafter referred to as the “Sublessor’s Remaining
Obligations”.

          7.6 Sublessee shall hold Sublessor free and harmless from all liability, judgments, costs,
damages, claims or demands, including reasonable attorneys fees, arising out of Sublessee’s failure
to comply with or perform Sublessee’s Assumed Obligations.

          7.7 Sublessor agrees to maintain the Master Lease during the entire term of this Sublease,
subject, however, to any earlier termination of the Master Lease without the fault of the
Sublessor, and to comply with or perform Sublessor’s Remaining Obligations and to hold Sublessee
free and harmless from all liability, judgments, costs, damages, claims or demands arising out of
Sublessor’s failure to comply with or perform Sublessor’s Remaining Obligations.

          7.8 Sublessor represents to Sublessee that the Master Lease is in full force and effect and
that no default exists on the part of any Party to the Master Lease.

	 	 	 	 	 
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8. Assignment of Sublease and Default.

          8.1 Sublessor hereby assigns and transfers to Master Lessor Sublessor’s interest in this
Sublease, subject however to the provisions of Paragraph 8.2 hereof.

          8.2 Master Lessor, by executing this document, agrees that until a Default shall occur in the
performance of Sublessor’s Obligations under the Master Lease, that Sublessor may receive, collect
and enjoy the Rent accruing under this Sublease. However, if Sublessor shall Default in the
performance of its obligations to Master Lessor then Master Lessor may, at its option, receive and
collect, directly from Sublessee, all Rent owing and to be owed under this Sublease. In the event,
however, that the amount collected by Master Lessor exceeds Sublessor’s obligations any such excess
shall be refunded to Sublessor. Master Lessor shall not, by reason of this assignment of the
Sublease nor by reason of the collection of the Rent from the Sublessee, be deemed liable to
Sublessee for any failure of the Sublessor to perform and comply with Sublessor’s Remaining
Obligations.

          8.3 Sublessor hereby irrevocably authorizes and directs Sublessee upon receipt of any written
notice from the Master Lessor stating that a Default exists in the performance of Sublessor’s
obligations under the Master Lease, to pay to Master Lessor the Rent due and to become due under
the Sublease. Sublessor agrees that Sublessee shall have the right to rely upon any such statement
and request from Master Lessor, and that Sublessee shall pay such Rent to Master Lessor without any
obligation or right to inquire as to whether such Default exists and notwithstanding any notice
from or claim from Sublessor to the contrary and Sublessor shall have no right or claim against
Sublessee for any such Rent so paid by Sublessee.

          8.4 No changes or modifications shall be made to this Sublease without the consent of Master
Lessor.

9. Consent of Master Lessor.

          9.1 In the event that the Master Lease requires that Sublessor obtain the consent of Master
Lessor to any subletting by Sublessor then, this Sublease shall not be effective unless, within 10
days of the date hereof, Master Lessor signs this Sublease thereby giving its consent to this
Subletting.

          9.2 In the event that the obligations of the Sublessor under the Master Lease have been
guaranteed by third parties, then neither this Sublease, nor the Master Lessor’s consent, shall be
effective unless, within 10 days of the date hereof, said guarantors sign this Sublease thereby
giving their consent to this Sublease.

          9.3 In the event that Master Lessor does give such consent then:

               (a) Such consent shall not release Sublessor of its obligations or alter the primary liability
of Sublessor to pay the Rent and perform and comply with all of the obligations of Sublessor to be
performed under the Master Lease.

               (b) The acceptance of Rent by Master Lessor from Sublessee or any one else liable under the
Master Lease shall not be deemed a waiver by Master Lessor of any provisions of the Master Lease.

               (c) The consent to this Sublease shall not constitute a consent to any subsequent subletting
or assignment.

               (d) In the event of any Default of Sublessor under the Master Lease, Master Lessor may proceed
directly against Sublessor, any guarantors or any one else liable under the Master Lease or this
Sublease without first exhausting Master Lessor’s remedies against any other person or entity
liable thereon to Master Lessor.

               (e) Master Lessor may consent to subsequent sublettings and assignments of the Master Lease or
this Sublease or any amendments or modifications thereto without notifying Sublessor or any one
else liable under the Master Lease and without obtaining their consent and such action shall not
relieve such persons from liability.

               (f) In the event that Sublessor shall Default in its obligations under the Master Lease, then
Master Lessor, at its option and without being obligated to do so, may require Sublessee to attorn
to Master Lessor in which event Master Lessor shall undertake the obligations of Sublessor under
this Sublease from the time of the exercise of said option to termination of this Sublease but
Master Lessor shall not be liable for any prepaid Rent nor any Security Deposit paid by Sublessee,
nor shall Master Lessor be liable for any other Defaults of the Sublessor under the Sublease.

               (g) Unless directly contradicted by other provisions of this Sublease, the consent of Master
Lessor to this Sublease shall not constitute an agreement to allow Sublessee to exercise any
options which may have been granted to Sublessor in the Master Lease (see Paragraph 39.2 of the
Master Lease).

          9.4 The signatures of the Master Lessor and any Guarantors of Sublessor at the end of this
document shall constitute their consent to the terms of this Sublease.

          9.5 Master Lessor acknowledges that, to the best of Master Lessor’s knowledge, no Default
presently exists under the Master Lease of obligations to be performed by Sublessor and that the
Master Lease is in full force and effect.

          9.6 In the event that Sublessor Defaults under its obligations to be performed under the
Master Lease by Sublessor, Master Lessor agrees to deliver to Sublessee a copy of any such notice
of default. Sublessee shall have the right to cure any Default of Sublessor described in any
notice of default within ten days after service of such notice of default on Sublessee. If such
default is cured by Sublessee then Sublessee shall have the right of reimbursement and offset from
and against Sublessor.

10. Additional Brokers Commissions.

          10.1 Sublessor agrees that if Sublessee exercises nay option or right of first refusal as
granted by Sublessor herein, or any option or right substantially similar thereto, either to extend
the term of this Sublease, to renew this Sublease, to purchase the Premises, or to lease or
purchase adjacent property which Sublessor may own or in which Sublessor has an interest, then
Sublessor shall pay to Broker a fee in accordance with the schedule of Broker in effect at the time
of the execution of this Sublease. Notwithstanding the foregoing, Sublessor’s obligation under
this Paragraph is limited to a transaction in which Sublessor is acting as a Sublessor, lessor or
seller.

          10.2 Master Lessor agrees that if Sublessee shall exercise any option or right of first
refusal granted to Sublessee by Master Lessor in connection with this Sublease, or any option or
right substantially similar thereto, either to extend or renew the Master

	 	 	 	 	 
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Lease, to purchase the Premises or any part thereof, or to lease or purchase adjacent property to
which Master Lessor may own or in which Master Lessor has an interest, or if Broker is the
procuring cause of any other lease or sale entered into between Sublessee and Master Lessor
pertaining to the Premises, any part thereof, or any adjacent property which Master Lessor owns or
in which it has an interest, then as to any of said transactions, Master Lessor shall pay to Broker
a fee, in cash, in accordance with the schedule of Broker in effect at the time of the execution of
this Sublease.

          10.3 Any fee due from Sublessor or Master Lessor hereunder shall be due and payable upon the
exercise of any option to extend or renew, upon the execution of any new lease, or, in the event of
a purchase, at the close of escrow.

          10.4 Any transferee of Sublessor’s interest in this Sublease, or of Master Lessor’s interest
in the Master Lease, by accepting an assignment thereof, shall be deemed to have assumed the
respective obligations of Sublessor or Master Lessor under this Paragraph 10. Broker shall be
deemed to be a third-party beneficiary of this paragraph 10.

11. Representations and Indemnities of Broker Relationships. The Parties 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 Sublease, and that no one other than said named
Brokers is entitled to any commission or finder’s fee in connection herewith. Sublessee and
Sublessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and
against liability for compensation or charges which may be claimed by any such unnamed broker,
finder or other similar party by reason of any dealings or actions of the indemnifying Party,
including any costs, expenses, attorneys’ fees reasonably incurred with respect thereto.

12. Attorney’s 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 hereinafter 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, Sublessor 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).

13. No Prior or Other Agreements; Broker Disclaimer. This Sublease 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. Sublessor and Sublessee each represents and
warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to
the nature, quality, character and financial responsibility of the other Party to this Sublease 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, shall be
limited to an amount up to the fee received by such Broker pursuant to this Sublease; 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.

ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE
ASSOCIATION OR BY ANY REAL ESTATE BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS SUBLEASE 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 SUBLEASE.

2. RETAIN APPROPRIATE CONSULTANTS TO RENEW 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 PROPERTY, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING
SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR SUBLESSEE’S INTENDED USE.

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

	 	 	 
	Executed at: 11919 Burke Street

	 	Executed at: 11919 Burke Street
	On: 6/26/06

	 	On: 6/26/06
	 
	 	 
	By Sublessor:

	 	By Sublessee(s):
	William W. Lee

	 	New Era Studios, Inc., a
	 

	 	Nevada Corporation
	 
	 	 
	By: /s/ Bill Lee

	 	By: /s/ James R. Simpson
	Name Printed: Bill. Lee

	 	Name Printed: James R. Simpson
	Title: Owner

	 	Title: CEO

	 	 	 	 	 
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	INITIALS

	 	 	 	INITIALS
	 
	 	 	 	 

			
	© 1997 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	FORM SBL-2-4/01E

 

 

	 	 	 
	 

	 	Silvergraph International, Inc., a
	 

	 	Nevada corporation
	 
	 	 
	 

	 	By: /s/ James R. Simpson
	 

	 	Name Printed: James R. Simpson
	 

	 	Title: CEO

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 	 	 
	 	By:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Name Printed:	 	 	 	 	 	Name Printed:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Title:	 	 	 	 	 	 	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Address:	 	 	 	 	 	 	 	Address:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Telephone:(___)

	 	 	 	 	 	 
	 	Telephone:(___)	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Facsimile:(___)

	 	 	 	 	 	 	 	Facsimile:(___)	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Federal ID No.	 	 	 	 	 	Federal ID No.	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	 	 	 	 

	 	 

	 	 	 	 	 	 	 
	BROKER:

	 	 	 	BROKER:	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Attn:

	 	 	 	 	 	 
	 	Attn:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	 	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Address:

	 	 	 	 	 	 	 	Address:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	   	 	 
	Telephone/Facsimile:	 	 	 	 	 	Telephone/Facsimile	 	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	Federal ID No.	 	 	 	 	 	Federal ID No.	 	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 

Consent to the above Sublease is hereby given.

	 	 	 	 	 	 	 	 	 	 	 
	Executed at: Glendale, CA	 	 	 	Executed at:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	On: June 26, 2006

	 	 	 	On:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	By Master Lessor:	 	 	 	By Guarantor(s):	 	 
	     The Woods Family Trust

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	Name Printed:	 	 	 	 
	 

	 	 
	 	 	 	 

	 	 
	 

	 	 	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Cathy Bracken	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 

Name Printed: Cathy Bracken

Title: Trustee

	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Name Printed:

	 	 	 	 	 	Name Printed:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Title:

	 	 	 	 	 	Address:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Address:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	   	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Telephone:(___)
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	Facsimile:(___)
	 	 	 	 	 	 	 	 	 	 
	Federal ID No.

	 	 

	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 

NOTE: These forms are often modified to meet changing requirements of law and needs of the
industry. Always write or call to make sure you are utilizing the most current form: AIR
COMMERCIAL REAL ESTATE ASSOCIATION, 700 So. Flower St., Suite 600, Los Angeles, CA 90017. (213)
687-8777.

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

	 	 	 	 	 
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	INITIALS

	 	 	 	INITIALS
	 
	 	 	 	 

			
	©1997
— AIR COMMERICIAL REAL ESTATE ASSOCIATION
	 	FORM SBL-2-4/01E

 

Addendum to Sublease

1.5

	 	 	 	 	 	 	 
	a.
	 	April 1, 2006 through December 31, 2006	 	$	5,832.75	 
	b.
	 	January 1, 2007 through December 31, 2007	 	$	6,006.00	 
	c.
	 	January 1, 2008 through December 31, 2008	 	$	6,179.25	 

1.6(d)

Sublessee shall grant to Sublessor a security interest in all of its assets, subordinate only to
those security interest(s) in place as of the date of this Agreement. Sublessee shall have the
right, upon 15 days written notice to Sublessor, to require Sublessor to release its security
interest in Sublessee’s assets upon termination of the Master Lease or if Sublessee procures and
maintains a letter of credit from a commercial bank for the sole benefit of Sublessor in an amount
equal to the remainder of the Master Lease.

			
	 	 	 
	CB
	 	WL

JRS

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]