Document:

2003 Stock Option Plan and Form of Option Agreement thereunder

 EXHIBIT 10.3 
  
 AXESSTEL, INC. 
 2003 STOCK OPTION PLAN 
  
 1. ESTABLISHMENT, PURPOSE AND
TERM OF PLAN. 
  
 1.1 Establishment. The Axesstel,
Inc. 2003 Stock Option Plan (the “Plan”) is established effective as of March 23, 2003, the date on which it is approved by the stockholders of the Company (the “Effective
Date”). 
  
 1.2 Purpose. The purpose of the
Plan is to advance the interests of the Participating Company Group and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Participating Company Group and by motivating such persons to
contribute to the growth and profitability of the Participating Company Group. 
  
 1.3 Term of Plan. The Plan shall continue in effect until the earlier of its termination by the Board or the date on which all of the shares of Stock available for issuance under the Plan have been issued and
all restrictions on such shares under the terms of the Plan and the agreements evidencing Options granted under the Plan have lapsed. However, all Incentive Stock Options shall be granted, if at all, within ten (10) years from the Effective Date.

  
 2. DEFINITIONS AND CONSTRUCTION. 
  
 2.1 Definitions. Whenever used herein, the following terms shall have
their respective meanings set forth below: 
  
 (a) “Board” means the Board of Directors of the Company. If one or more Committees have been appointed by the Board to administer the Plan, “Board” also means such Committee(s). 
  
 (b) “Code” means the Internal
Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder. 
  
 (c) “Committee” means the compensation committee or other committee of the Board duly appointed to administer the
Plan and having such powers as shall be specified by the Board. Unless the powers of the Committee have been specifically limited, the Committee shall have all of the powers of the Board granted herein, including, without limitation, the power to
amend or terminate the Plan at any time, subject to the terms of the Plan and any applicable limitations imposed by law. 
  
 (d) “Company” means Axesstel, Inc., a Nevada corporation, or any successor corporation thereto. 
  
 (e) “Consultant” means a person
engaged to provide consulting or advisory services (other than as an Employee or a Director) to a Participating Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided would
not preclude the Company from offering or selling securities to such 

  

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person pursuant to the Plan in reliance on registration on a Form S-8 Registration Statement under the Securities Act. 
  
 (f) “Director” means a member of the
Board or of the board of directors of any other Participating Company. 
  
 (g) “Disability” means the permanent and total disability of the Optionee within the meaning of Section 22(e)(3) of the Code. 
  
 (h) “Employee” means any person treated as an employee (including an Officer or a
Director who is also treated as an employee) in the records of a Participating Company and, with respect to any Incentive Stock Option granted to such person, who is an employee for purposes of Section 422 of the Code; provided, however, that
neither service as a Director nor payment of a director’s fee shall be sufficient to constitute employment for purposes of the Plan. The Company shall determine in good faith and in the exercise of its discretion whether an individual has
become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be. For purposes of an individual’s rights, if any, under the Plan as of the time of the
Company’s determination, all such determinations by the Company shall be final, binding and conclusive, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination. 
  
 (i) “Exchange Act” means the
Securities Exchange Act of 1934, as amended. 
  
 (j) “Fair Market Value” means, as of any date, the value of a share of Stock or other property as determined by the Board, in its discretion, or by the Company, in its discretion, if such determination is expressly
allocated to the Company herein, subject to the following: 
  
 (i) If, on such date, the Stock is listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock (or the mean of the
closing bid and asked prices of a share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or such other national or regional securities exchange or market system constituting the primary
market for the Stock, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system, the date
on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded prior to the relevant date, or such other appropriate day as shall be determined by the Board, in its discretion. 
  
 (ii) If, on such date, the Stock is not listed on a national
or regional securities exchange or market system, the Fair Market Value of a share of Stock shall be as determined by the Board in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse.

  

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 (k) “Incentive Stock Option” means an Option intended to be (as
set forth in the Option Agreement) and which qualifies as an incentive stock option within the meaning of Section 422(b) of the Code. 
  
 (l) “Insider” means an Officer, a Director of the Company or other person whose transactions in Stock are subject
to Section 16 of the Exchange Act. 
  
 (m)
“Nonstatutory Stock Option” means an Option not intended to be (as set forth in the Option Agreement) or which does not qualify as an Incentive Stock Option. 
  
 (n) “Officer” means any person designated by the Board as an officer of the Company.

  
 (o) “Option” means a
right to purchase Stock pursuant to the terms and conditions of the Plan. An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option. 
  
 (p) “Option Agreement” means a written agreement between the Company and an Optionee setting forth the terms,
conditions and restrictions of the Option granted to the Optionee and any shares acquired upon the exercise thereof. An Option Agreement may consist of a form of “Notice of Grant of Stock Option” and a form of “Stock Option
Agreement” incorporated therein by reference, or such other form or forms as the Board may approve from time to time. 
  
 (q) “Optionee” means a person who has been granted one or more Options. 
  
 (r) “Parent Corporation” means any
present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code. 
  
 (s) “Participating Company” means the Company or any Parent Corporation or Subsidiary Corporation. 
  
 (t) “Participating Company Group”
means, at any point in time, all corporations collectively which are then Participating Companies. 
  
 (u) “Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or
regulation. 
  
 (v) “Securities
Act” means the Securities Act of 1933, as amended. 
  
 (w) “Service” means an Optionee’s employment or service with the Participating Company Group, whether in the capacity of an Employee, a Director or a Consultant. An Optionee’s Service
shall not be deemed to have terminated merely because of a change in the capacity in which the Optionee renders Service to the Participating Company Group or a change in the Participating Company for which the Optionee renders such Service, provided
that there is no interruption or termination of the Optionee’s Service. Furthermore, an Optionee’s Service shall not be deemed to have terminated if the Optionee takes any military 

  

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leave, sick leave, or other bona fide leave of absence approved by the Company; provided, however, that if any such leave exceeds ninety (90) days, on the
one hundred eighty-first (181st) day following the commencement of such leave any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and instead shall be treated thereafter as a Nonstatutory Stock
Option unless the Optionee’s right to return to Service is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, a leave of absence shall not be treated as Service for
purposes of determining vesting under the Optionee’s Option Agreement. An Optionee’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the corporation for which the Optionee performs Service
ceasing to be a Participating Company. Subject to the foregoing, the Company, in its discretion, shall determine whether an Optionee’s Service has terminated and the effective date of such termination. 
  
 (x) “Stock” means the common stock
of the Company, as adjusted from time to time in accordance with Section 4.2. 
  
 (y) “Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code. 
  
 (z) “Ten Percent Stockholder” means
a person who, at the time an Option is granted to such person, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of a Participating Company within the meaning of Section 422(b)(6) of the
Code. 
  
 2.2 Construction. Captions and titles contained
herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of
the term “or” is not intended to be exclusive, unless the context clearly requires otherwise. 
  
 3. ADMINISTRATION. 
  
 3.1 Administration by the Board. The Plan shall be administered by the Board. All questions of interpretation of the Plan or of any Option shall be determined by the Board, and such determinations shall be final and binding
upon all persons having an interest in the Plan or such Option. 
  
 3.2 Authority of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election which is the responsibility of or which is allocated to
the Company herein, provided the Officer has apparent authority with respect to such matter, right, obligation, determination or election. The Board may, in its discretion, delegate to a committee comprised of one or more Officers the authority to
grant one or more Awards, without further approval of the Board or the Committee, to any Employee, other than a person who, at the time of such grant, is an Insider; provided, however, that (a) such Awards shall not be granted for shares in excess
of the maximum aggregate number of shares of Stock authorized for issuance pursuant to Section 4.1, (b) the exercise price per share of each Option shall be not less than the Fair Market Value per share of 
  

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 the Stock on the effective date of grant (or, if the Stock has not traded on such date, on the last day preceding the
effective date of grant on which the Stock was traded), and (iii) each such Award shall be subject to the terms and conditions of the appropriate standard form of Award Agreement approved by the Board or the Committee and shall conform to the
provisions of the Plan and such other guidelines as shall be established from time to time by the Board or the Committee. 
  
 3.3 Powers of the Board. In addition to any other powers set forth in the Plan and subject to the provisions of the Plan, the Board shall have the
full and final power and authority, in its discretion: 
  
 (a) to determine the persons to whom, and the time or times at which, Options shall be granted and the number of shares of Stock to be subject to each Option; 
  
 (b) to designate Options as Incentive Stock Options or Nonstatutory Stock Options; 
  
 (c) to determine the Fair Market Value of shares of Stock or
other property; 
  
 (d) to determine the terms,
conditions and restrictions applicable to each Option (which need not be identical) and any shares acquired upon the exercise thereof, including, without limitation, (i) the exercise price of the Option, (ii) the method of payment for shares
purchased upon the exercise of the Option, (iii) the method for satisfaction of any tax withholding obligation arising in connection with the Option or such shares, including by the withholding or delivery of shares of stock, (iv) the timing, terms
and conditions of the exercisability of the Option or the vesting of any shares acquired upon the exercise thereof, (v) the time of the expiration of the Option, (vi) the effect of the Optionee’s termination of Service on any of the foregoing,
and (vii) all other terms, conditions and restrictions applicable to the Option or such shares not inconsistent with the terms of the Plan; 
  
 (e) to approve one or more forms of Option Agreement; 
  
 (f) to amend, modify, extend, cancel or renew any Option or to waive any restrictions or conditions
applicable to any Option or any shares acquired upon the exercise thereof; 
  
 (g) to accelerate, continue, extend or defer the exercisability of any Option or the vesting of any shares acquired upon the exercise thereof, including with respect to the period following an Optionee’s
termination of Service with the Participating Company Group; 
  
 (h) to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt supplements to, or alternative versions of, the Plan, including, without limitation, as the Board deems necessary or
desirable to comply with the laws of, or to accommodate the tax policy or custom of, foreign jurisdictions whose citizens may be granted Options; and 
  

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 (i) to correct any defect, supply any omission or reconcile any inconsistency in the Plan
or any Option Agreement and to make all other determinations and take such other actions with respect to the Plan or any Option as the Board may deem advisable to the extent not inconsistent with the provisions of the Plan or applicable law.

  
 3.4 Administration with Respect to Insiders.
With respect to participation by Insiders in the Plan, at any time that any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the requirements, if any,
of Rule 16b-3. 
  
 3.5 Committee Complying with Section
162(m). If the Company is a “publicly held corporation” within the meaning of Section 162(m) of the Code, the Board may establish a Committee of “outside directors” within the meaning of Section 162(m) to approve the
grant of any Option which might reasonably be anticipated to result in the payment of employee remuneration that would otherwise exceed the limit on employee remuneration deductible for income tax purposes pursuant to Section 162(m). 
  
 3.6 No Repricing. Without the affirmative vote of holders of a
majority of the shares of Stock cast in person or by proxy at a meeting of the stockholders of the Company at which a quorum representing a majority of all outstanding shares of Stock is present or represented by proxy, the Board shall not approve a
program providing for either (a) the cancellation of outstanding Options and the grant in substitution therefore of any new Option having a lower exercise price or (b) the amendment of outstanding Options to reduce the exercise price thereof. This
paragraph shall not be construed to apply to “issuing or assuming a stock option in a transaction to which section 424(a) applies,” within the meaning of Section 424 of the Code. 
  
 3.7 Indemnification. In addition to such other rights of
indemnification as they may have as members of the Board or officers or employees of the Participating Company Group, members of the Board and any officers or employees of the Participating Company Group to whom authority to act for the Board or the
Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any
appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to
the Company, in writing, the opportunity at its own expense to handle and defend the same. 
  
 4. SHARES SUBJECT TO PLAN. 
  
 4.1 Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4.2, the maximum aggregate number of shares of Stock that may be issued 
  

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 under the Plan shall be Nine Hundred and Eighty-Two Thousand One Hundred and Seventy-One (982,171). Shares issuable under
the Plan shall consist of authorized but unissued or reacquired shares of Stock or any combination thereof. If an outstanding Option for any reason expires or is terminated or canceled without having been exercised in full, the shares of Stock
allocable to the unexercised portion of such Option shall again be available for issuance under the Plan. 
  
 4.2 Adjustments for Changes in Capital Structure. Subject to any required action by the stockholders of the Company, in the event of any change in
the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off,
spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal
cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number and class of shares subject to the Plan and to any outstanding Options, in the Section
162(m) Grant Limit set forth in Section 5.4 and in the exercise price per share of any outstanding Options in order to prevent dilution or enlargement of Optionees’ rights under the Plan. For purposes of the foregoing, conversion of any
convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” Any fractional share resulting from an adjustment pursuant to this Section 4.2 shall be rounded down to the nearest
whole number, and in no event may the exercise price of any Option be decreased to an amount less than the par value, if any, of the stock subject to the Option. Such adjustments shall be determined by the Board, and its determination shall be
final, binding and conclusive. 
  
 5. ELIGIBILITY AND OPTION
LIMITATIONS. 
  
 5.1 Persons Eligible for Options.
Options may be granted only to Employees, Consultants, and Directors. Eligible persons may be granted more than one (1) Option. However, eligibility in accordance with this Section shall not entitle any person to be granted an Option, or, having
been granted an Option, to be granted an additional Option. 
  
 5.2 Option Grant Restrictions. Any person who is not an Employee on the effective date of the grant of an Option to such person may be granted only a Nonstatutory Stock Option. An Option granted to a person upon the condition that
such person become an Employee, Consultant or Director shall be deemed granted effective on the date such person commences Service with a Participating Company, with an exercise price determined as of such date in accordance with Section 6.1.

  
 5.3 Fair Market Value Limitation. To the extent that
options designated as Incentive Stock Options (granted under all stock option plans of the Participating Company Group, including the Plan) become exercisable by an Optionee for the first time during any calendar year for stock having a Fair Market
Value greater than One Hundred Thousand Dollars ($100,000), the portions of such options which exceed such amount shall be treated as Nonstatutory Stock Options. For purposes of this Section 5.3, options designated as Incentive Stock Options shall
be taken into account in the order in which they were granted, and the Fair Market Value of stock shall be determined as of the time the option with respect to such stock is 
  

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 granted. If the Code is amended to provide for a different limitation from that set forth in this Section 5.3, such
different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code. If an Option is treated as an Incentive Stock Option in part and as a
Nonstatutory Stock Option in part by reason of the limitation set forth in this Section 5.3, the Optionee may designate which portion of such Option the Optionee is exercising. In the absence of such designation, the Optionee shall be deemed to have
exercised the Incentive Stock Option portion of the Option first. Separate certificates representing each such portion shall be issued upon the exercise of the Option. 
  
 5.4 Section 162(m) Grant Limit. Subject to adjustment as provided in Section 4.2, at any such time as the
Company is a “publicly held corporation” within the meaning of Section 162(m) of the Code, no Employee shall be granted one or more Options within any fiscal year of the Company which in the aggregate are for the purchase of more than
Three Hundred Thousand (300,000) shares (the “Section 162(m) Grant Limit”). 
  
 6. TERMS AND CONDITIONS OF OPTIONS. 
  
 Options shall be evidenced by Option Agreements specifying the number of shares of Stock covered thereby, in such form as the Board shall from time to
time establish. No Option or purported Option shall be a valid and binding obligation of the Company unless evidenced by a fully executed Option Agreement. Option Agreements may incorporate all or any of the terms of the Plan by reference and shall
comply with and be subject to the following terms and conditions: 
  
 6.1 Exercise Price. The exercise price for each Option shall be established in the discretion of the Board; provided, however, that (a) the exercise price per share for an Option shall be not less than the Fair Market Value of a
share of Stock on the effective date of grant of the Option and (b) no Incentive Stock Option granted to a Ten Percent Stockholder shall have an exercise price per share less than one hundred ten percent (110%) of the Fair Market Value of a share of
Stock on the effective date of grant of the Option. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an exercise price lower than the minimum exercise price set forth
above if such Option is granted pursuant to an assumption or substitution for another option in a manner qualifying under the provisions of Section 424(a) of the Code. 
  
 6.2 Exercisability and Term of Options. Options shall be exercisable at such time or times, or upon such event or
events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Board and set forth in the Option Agreement evidencing such Option; provided, however, that (a) no Incentive Stock Option shall be
exercisable after the expiration of ten (10) years after the effective date of grant of such Option and (b) no Incentive Stock Option granted to a Ten Percent Stockholder shall be exercisable after the expiration of five (5) years after the
effective date of grant of such Option. Subject to the foregoing, unless otherwise specified by the Board in the grant of an Option, any Option granted hereunder shall terminate ten (10) years after the effective date of grant of the Option, unless
earlier terminated in accordance with its provisions. 
  

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 6.3 Payment of Exercise Price. 
  
 (a) Forms of Consideration Authorized. Except as otherwise provided below,
payment of the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check or cash equivalent, (ii) by tender to the Company, or attestation to the ownership, of shares of Stock owned
by the Optionee having a Fair Market Value not less than the exercise price, (iii) by delivery of a properly executed notice together with irrevocable instructions to a broker providing for the assignment to the Company of the proceeds of a sale or
loan with respect to some or all of the shares being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System) (a “Cashless Exercise”), (iv) by such other consideration as may be approved by the Board from time to time to the extent permitted by applicable
law, or (v) by any combination thereof. The Board may at any time or from time to time, by approval of or by amendment to the standard forms of Option Agreement described in Section 7, or by other means, grant Options which do not permit all of the
foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one or more forms of consideration. 
  
 (b) Limitations on Forms of Consideration. 
  
 (i) Tender of Stock. Notwithstanding the foregoing, an Option may not be exercised by tender
to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock.
Unless otherwise provided by the Board, an Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Optionee for more than six (6) months (and not used
for another Option exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company. 
  
 (ii) Cashless Exercise. The Company reserves, at any and all times, the right, in the Company’s sole and absolute
discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise. 
  
 6.4 Effect of Termination of Service. 
  
 (a) Option Exercisability. Subject to earlier termination of the Option as otherwise provided herein and
unless otherwise provided by the Board in the grant of an Option and set forth in the Option Agreement, an Option shall be exercisable after an Optionee’s termination of Service only during the applicable time period determined in accordance
with this Section 6.4 and thereafter shall terminate: 
  
 (i) Disability. If the Optionee’s Service terminates because of the Disability of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be
exercised by the Optionee (or the Optionee’s guardian or legal representative) at any time prior to the expiration of twelve (12) months (or such longer period of time as determined by the Board, in its discretion) after the date 

  

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on which the Optionee’s Service terminated, but in any event no later than the date of expiration of the Option’s term as set forth in the Option
Agreement evidencing such Option (the “Option Expiration Date”). 
  
 (ii) Death. If the Optionee’s Service terminates because of the death of the Optionee, the Option, to the extent
unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee’s legal representative or other person who acquired the right to exercise the Option by reason of the Optionee’s
death at any time prior to the expiration of twelve (12) months (or such longer period of time as determined by the Board, in its discretion) after the date on which the Optionee’s Service terminated, but in any event no later than the Option
Expiration Date. The Optionee’s Service shall be deemed to have terminated on account of death if the Optionee dies within three (3) months (or such longer period of time as determined by the Board, in its discretion) after the Optionee’s
termination of Service. 
  
 (iii) Other
Termination of Service. If the Optionee’s Service terminates for any reason, other than Disability or death, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee’s Service
terminated, may be exercised by the Optionee at any time prior to the expiration of thirty (30) days (or such longer period of time as determined by the Board, in its discretion) after the date on which the Optionee’s Service terminated, but in
any event no later than the Option Expiration Date. 
  
 (b) Extension if Exercise Prevented by Law. Notwithstanding the foregoing, other than termination of Service for Cause, if the exercise of an Option within the applicable time periods set forth in Section 6.4(a)
is prevented by the provisions of Section 11 below, the Option shall remain exercisable until thirty (30) days (or such longer period of time as determined by the Board, in its discretion) after the date the Optionee is notified by the Company that
the Option is exercisable, but in any event no later than the Option Expiration Date. 
  
 (c) Extension if Optionee Subject to Section 16(b). Notwithstanding the foregoing, other than termination of
Service for Cause, if a sale within the applicable time periods set forth in Section 6.4(a) of shares acquired upon the exercise of the Option would subject the Optionee to suit under Section 16(b) of the Exchange Act, the Option shall remain
exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Optionee would no longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day after the Optionee’s
termination of Service, or (iii) the Option Expiration Date. 
  
 6.5 Transferability of Options. During the lifetime of the Optionee, an Option shall be exercisable only by the Optionee or the Optionee’s guardian or legal representative. No Option shall be assignable or transferable by
the Optionee, except by will or by the laws of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the Board, in its discretion, and set forth in the Option Agreement evidencing such Option, a Nonstatutory Stock
Option shall be assignable or transferable subject to the applicable limitations, if any, described in the General Instructions to Form S-8 Registration Statement under the Securities Act. 
  

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 7. STANDARD FORMS OF OPTION AGREEMENT. 
  
 7.1 Option Agreement. Unless otherwise provided by the Board at the time the Option is granted, an Option shall
comply with and be subject to the terms and conditions set forth in the appropriate form of Option Agreement approved by the Board concurrently with its adoption of the Plan and as amended from time to time. 
  
 7.2 Authority to Vary Terms. The Board shall have the authority from
time to time to vary the terms of any standard form of Option Agreement described in this Section 7 either in connection with the grant or amendment of an individual Option or in connection with the authorization of a new standard form or forms;
provided, however, that the terms and conditions of any such new, revised or amended standard form or forms of Option Agreement are not inconsistent with the terms of the Plan. 
  
 8. CHANGE IN CONTROL. 
  
 8.1 Definitions. 
  
 (a) An “Ownership Change Event” shall be deemed to have occurred if any of the following occurs with
respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or consolidation
in which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or (iv) a liquidation or dissolution of the Company. 
  
 (b) A “Change in Control” shall mean an Ownership Change Event or a series of
related Ownership Change Events (collectively, a “Transaction”) wherein the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction, in substantially the same proportions
as their ownership of shares of the Company’s voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting securities of
the Company or, in the case of a Transaction described in Section 8.1(a)(iii), the corporation or other business entity to which the assets of the Company were transferred (the “Transferee”), as the case may be. For purposes
of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee,
as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Board shall have the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple
Ownership Change Events are related, and its determination shall be final, binding and conclusive. 
  
 8.2 Effect of Change in Control on Options. 
  
 (a) Accelerated Vesting. Notwithstanding any other provision of the Plan to the contrary, the Board, in its sole discretion,
may provide in any Option Agreement or, in the event of a Change in Control, may take such actions as it deems appropriate to provide for 

  

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the acceleration of the exercisability and vesting in connection with such Change in Control of any or all outstanding Options and shares acquired upon the
exercise of such Options. 
  
 (b)
Assumption or Substitution of Options. In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiring
Corporation”), may, without the consent of any Optionee, either assume the Company’s rights and obligations under outstanding Options or substitute for outstanding Options substantially equivalent options for the Acquiring
Corporation’s stock. Any Options which are not assumed by the Acquiring Corporation in connection with the Change in Control shall, to the extent not exercised as of the date of the Change in Control, terminate and cease to be outstanding
effective as of the date of the Change in Control. Notwithstanding the foregoing, if the corporation the stock of which is subject to the outstanding Options immediately prior to an Ownership Change Event described in Section 8.1(a)(i) constituting
a Change in Control is the surviving or continuing corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation, the outstanding
Options shall not terminate. 
  
 (c)
Cash-Out of Options. The Board may, in its sole discretion and without the consent of any Optionee, determine that, upon the occurrence of a Change in Control, each or any Option outstanding immediately prior to the Change in Control
shall be canceled in exchange for a payment with respect to each vested share of Stock subject to such canceled Option in (i) cash, (ii) stock of the Company or of a corporation or other business entity a party to the Change in Control, or (iii)
other property which, in any such case, shall be in an amount having a Fair Market Value equal to the Fair Market Value of the consideration to be paid per share of Stock in the Change in Control over the exercise price per share under such Option
(the “Spread”). In the event such determination is made by the Board, the Spread (reduced by applicable withholding taxes, if any) shall be paid to Optionees in respect of their canceled Options as soon as practicable
following the date of the Change in Control. 
  
 9. TAX WITHHOLDING.

  
 9.1 Tax Withholding in General. The Company shall
have the right to deduct from any and all payments made under the Plan, or to require the Optionee, through payroll withholding, cash payment or otherwise, including by means of a Cashless Exercise of an Option, to make adequate provision for, the
federal, state, local and foreign taxes, if any, required by law to be withheld by the Participating Company Group with respect to an Option or the shares acquired pursuant thereto. The Company shall have no obligation to deliver shares of Stock
until the Participating Company Group’s tax withholding obligations have been satisfied by the Optionee. 
  
 9.2 Withholding in Shares. The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable to an Optionee
upon the exercise of an Option, or to accept from the Optionee the tender of, a number of whole shares of Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholding obligations of the
Participating Company Group. The Fair Market Value of any shares of Stock 

  

 12 

 
withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding
rates. 
  
 10. PROVISION OF INFORMATION. 
  
 Each Optionee shall be given access to information concerning the Company
equivalent to that information generally made available to the Company’s common stockholders. 
  
 11. COMPLIANCE WITH SECURITIES LAW. 
  
 The grant of Options and the issuance of shares of Stock upon exercise of Options shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities.
Options may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market
system upon which the Stock may then be listed. In addition, no Option may be exercised unless (a) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon
exercise of the Option or (b) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities
Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares hereunder shall relieve the
Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of any Option, the Company may require the Optionee to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company. 
  
 12. TERMINATION OR AMENDMENT OF PLAN. 
  
 The Board may terminate or amend the Plan at any time. However, subject to
changes in applicable law, regulations or rules that would permit otherwise, without the approval of the Company’s stockholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan
(except by operation of the provisions of Section 4.2), (b) no change in the class of persons eligible to receive Incentive Stock Options, (c) no Option repricing as described in Section 3.6, and (d) no other amendment of the Plan that would require
approval of the Company’s stockholders under any applicable law, regulation or rule. No termination or amendment of the Plan shall affect any then outstanding Option unless expressly provided by the Board. In any event, no termination or
amendment of the Plan may adversely affect any then outstanding Option without the consent of the Optionee, unless such termination or amendment is required to enable an Option designated as an Incentive Stock Option to qualify as an Incentive Stock
Option or is necessary to comply with any applicable law, regulation or rule. 
  

 13 

 PLAN HISTORY 
  

			
	                , 2003	  	Board adopts Plan, effective as of the date stockholder approval obtained, with an initial reserve of 982,171 shares.
		
	March 23, 2003	  	Stockholders approve Plan.

 AXESSTEL, INC. 
 STOCK OPTION AGREEMENT 
  
 Axesstel, Inc. has granted to the individual (the “Optionee”) named in the Notice of Grant of Stock Option (the “Notice”) to which this Stock Option Agreement (the “Option
Agreement”) is attached an option (the “Option”) to purchase certain shares of Stock upon the terms and conditions set forth in the Notice and this Option Agreement. The Option has been granted pursuant to and
shall in all respects be subject to the terms and conditions of the Axesstel, Inc. 2003 Stock Option Plan (the “Plan”), as amended to the Date of Option Grant, the provisions of which are incorporated herein by reference. By
signing the Notice, the Optionee: (a) represents that the Optionee has read and is familiar with the terms and conditions of the Notice, the Plan and this Option Agreement, including the Effect of Termination of Service set forth in Section 7, (b)
accepts the Option subject to all of the terms and conditions of the Notice, the Plan and this Option Agreement, (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the
Notice, the Plan or this Option Agreement, and (d) acknowledges receipt of a copy of the Notice, the Plan and this Option Agreement. 
  
 1. DEFINITIONS AND CONSTRUCTION. 
  
 1.1 Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Notice or the Plan.

  
 1.2 Construction. Captions and titles contained herein
are for convenience only and shall not affect the meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.
Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise. 
  
 2. TAX CONSEQUENCES. 
  
 2.1 Tax Status of Option. This Option is intended to have the tax status designated in the Notice. 
  
 (a) Incentive Stock Option. If the Notice so designates, this Option is intended to be an Incentive Stock Option within the
meaning of Section 422(b) of the Code, but the Company does not represent or warrant that this Option qualifies as such. The Optionee should consult with the Optionee’s own tax advisor regarding the tax effects of this Option and the
requirements necessary to obtain favorable income tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements. (NOTE TO OPTIONEE: If the Option is exercised more than three (3) months after the date on
which you cease to be an Employee (other than by reason of your death or permanent and total disability as defined in Section 22(e)(3) of the Code), the Option will be treated as a Nonstatutory Stock Option and not as an Incentive Stock Option to
the extent required by Section 422 of the Code.) 
  

 1 

 (b) Nonstatutory Stock Option. If the Notice so designates, this Option is
intended to be a Nonstatutory Stock Option and shall not be treated as an Incentive Stock Option within the meaning of Section 422(b) of the Code. 
  
 2.2 ISO Fair Market Value Limitation. If the Notice designates this Option as an Incentive Stock Option, then to the extent that the Option
(together with all Incentive Stock Options granted to the Optionee under all stock option plans of the Participating Company Group, including the Plan) becomes exercisable for the first time during any calendar year for shares having a Fair Market
Value greater than One Hundred Thousand Dollars ($100,000), the portion of such options which exceeds such amount will be treated as Nonstatutory Stock Options. For purposes of this Section 2.2, options designated as Incentive Stock Options are
taken into account in the order in which they were granted, and the Fair Market Value of stock is determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a different limitation from that set
forth in this Section 2.2, such different limitation shall be deemed incorporated herein effective as of the date required or permitted by such amendment to the Code. If the Option is treated as an Incentive Stock Option in part and as a
Nonstatutory Stock Option in part by reason of the limitation set forth in this Section 2.2, the Optionee may designate which portion of such Option the Optionee is exercising. In the absence of such designation, the Optionee shall be deemed to have
exercised the Incentive Stock Option portion of the Option first. Separate certificates representing each such portion shall be issued upon the exercise of the Option. (NOTE TO OPTIONEE: If the aggregate Exercise Price of the Option (that is, the
Exercise Price multiplied by the Number of Option Shares) plus the aggregate exercise price of any other Incentive Stock Options you hold (whether granted pursuant to the Plan or any other stock option plan of the Participating Company Group) is
greater than $100,000, you should contact the Chief Financial Officer of the Company to ascertain whether the entire Option qualifies as an Incentive Stock Option.) 
  
 3. ADMINISTRATION. 
  
 All questions of interpretation concerning this Option Agreement shall be determined by the Board. All determinations by the Board shall be final and
binding upon all persons having an interest in the Option. Any officer of a Participating Company shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or
which is allocated to the Company herein, provided the officer has apparent authority with respect to such matter, right, obligation, or election. 
  
 4. EXERCISE OF THE OPTION. 
  
 4.1 Right to Exercise. Except as otherwise provided herein, the Option shall be exercisable on and after the Date of Option Grant (or if later, the
Optionee’s Service commencement date) and prior to the termination of the Option (as provided in Section 6) in an amount not to exceed the number of Vested Shares less the number of shares previously acquired upon exercise of the Option.

  
 4.2 Method of Exercise. Exercise of the Option shall be
by written notice to the Company which must state the election to exercise the Option, the number of whole shares of Stock for which the Option is being exercised and such other representations and agreements as 

  

 2 

 
to the Optionee’s investment intent with respect to such shares as may be required pursuant to the provisions of this Option Agreement. The written
notice must be signed by the Optionee and must be delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the Company may permit, to the Chief Financial Officer
of the Company, or other authorized representative of the Participating Company Group, prior to the termination of the Option as set forth in Section 6, accompanied by full payment of the aggregate Exercise Price for the number of shares of Stock
being purchased. The Option shall be deemed to be exercised upon receipt by the Company of such written notice and the aggregate Exercise Price. 
  
 4.3 Payment of Exercise Price. 
  
 (a) Forms of Consideration Authorized. Except as otherwise provided below, payment of the aggregate Exercise Price for the
number of shares of Stock for which the Option is being exercised shall be made (i) in cash, by check, or cash equivalent, (ii) by tender to the Company, or attestation to the ownership, of whole shares of Stock owned by the Optionee having a
Fair Market Value (as determined by the Company without regard to any restrictions on transferability applicable to such stock by reason of federal or state securities laws or agreements with an underwriter for the Company) not less than the
aggregate Exercise Price, (iii) by means of a Cashless Exercise, as defined in Section 4.3(b), or (iv) by any combination of the foregoing. 
  
 (b) Limitations on Forms of Consideration. 
  
 (i) Tender of Stock. Notwithstanding the foregoing, the Option may not be exercised by tender to the
Company, or attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. The
Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Optionee for more than six (6) months or were not acquired, directly or indirectly, from the
Company. 
  
 (ii) Cashless Exercise. A
“Cashless Exercise” means the delivery of a properly executed notice together with irrevocable instructions to a broker in a form acceptable to the Company providing for the assignment to the Company of the proceeds of a sale
or loan with respect to some or all of the shares of Stock acquired upon the exercise of the Option pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of
Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System). The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to decline to approve or terminate any
such program or procedure. 
  
 4.4 Tax Withholding. At the
time the Option is exercised, in whole or in part, or at any time thereafter as requested by the Company, the Optionee hereby authorizes withholding from payroll and any other amounts payable to the Optionee, and otherwise agrees to make adequate
provision for (including by means of a Cashless Exercise to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax 

  

 3 

 
withholding obligations of the Participating Company Group, if any, which arise in connection with the Option, including, without limitation, obligations
arising upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in whole or in part, of any shares acquired upon exercise of the Option, (iii) the operation of any law or regulation providing for the imputation
of interest, or (iv) the lapsing of any restriction with respect to any shares acquired upon exercise of the Option. The Company shall have no obligation to deliver shares of Stock until the tax withholding obligations of the Participating
Company Group have been satisfied by the Optionee. 
  
 4.5
Certificate Registration. Except in the event the Exercise Price is paid by means of a Cashless Exercise, the certificate for the shares as to which the Option is exercised shall be registered in the name of the Optionee, or, if applicable,
in the names of the heirs of the Optionee. 
  
 4.6 Restrictions
on Grant of the Option and Issuance of Shares. The grant of the Option and the issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect
to such securities. The Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any
stock exchange or market system upon which the Stock may then be listed. In addition, the Option may not be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect
to the shares issuable upon exercise of the Option or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration
requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS
VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Option shall
relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of the Option, the Company may require the Optionee to
satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company. 
  
 4.7 Fractional Shares. The Company shall not be required to issue
fractional shares upon the exercise of the Option. 
  
 5. NONTRANSFERABILITY
OF THE OPTION. 
  
 The Option may be exercised during the
lifetime of the Optionee only by the Optionee or the Optionee’s guardian or legal representative and may not be assigned or transferred in any manner except by will or by the laws of descent and distribution. Following the death of the
Optionee, the Option, to the extent provided in Section 7, may be exercised by 

  

 4 

 
the Optionee’s legal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of
descent and distribution. 
  
 6. TERMINATION OF THE OPTION.

  
 The Option shall terminate and may no longer be exercised
on the first to occur of (a) the Option Expiration Date, (b) the last date for exercising the Option following termination of the Optionee’s Service as described in Section 7, or (c) a Change in Control to the extent provided in Section 8.

  
 7. EFFECT OF TERMINATION OF SERVICE. 
  
 7.1 Option Exercisability. 
  
 (a) Disability. If the Optionee’s Service
with the Participating Company Group terminates because of the Disability of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee (or the
Optionee’s guardian or legal representative) at any time prior to the expiration of twelve (12) months after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date. 
  
 (b) Death. If the Optionee’s Service with
the Participating Company Group terminates because of the death of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee’s legal
representative or other person who acquired the right to exercise the Option by reason of the Optionee’s death at any time prior to the expiration of twelve (12) months after the date on which the Optionee’s Service terminated, but in any
event no later than the Option Expiration Date. The Optionee’s Service shall be deemed to have terminated on account of death if the Optionee dies within three (3) months after the Optionee’s termination of Service. 
  
 (c) Other Termination of Service. If the
Optionee’s Service with the Participating Company Group terminates for any reason, except Disability or death, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee’s Service terminated,
may be exercised by the Optionee at any time prior to the expiration of three (3) months (or such other longer period of time as determined by the Board, in its discretion) after the date on which the Optionee’s Service terminated, but in any
event no later than the Option Expiration Date. 
  
 7.2
Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if the exercise of the Option within the applicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option shall remain
exercisable until three (3) months after the date the Optionee is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date. 
  
 7.3 Extension if Optionee Subject to Section 16(b). Notwithstanding the foregoing, if a sale within the applicable
time periods set forth in Section 7.1 of shares acquired upon the exercise of the Option would subject the Optionee to suit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth

  

 5 

 (10th) day following the date on which a sale of such shares by the Optionee would no longer be subject to such suit,
(ii) the one hundred and ninetieth (190th) day after the Optionee’s termination of Service, or (iii) the Option Expiration Date. 
  
 8. CHANGE IN CONTROL. 
  
 In the event of a Change in Control, the Acquiring Corporation may either assume the Company’s rights and obligations under the Option or substitute
for the Option a substantially equivalent option for the Acquiring Corporation’s stock. The Option shall terminate and cease to be outstanding effective as of the date of the Change in Control to the extent that the Option is neither assumed or
substituted for by the Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change in Control. Notwithstanding the foregoing, shares acquired upon exercise of the Option prior to the Change in Control
and any consideration received pursuant to the Change in Control with respect to such shares shall continue to be subject to all applicable provisions of this Option Agreement except as otherwise provided herein. 
  
 9. ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. 
  
 In the event of any stock dividend, stock split, reverse stock split,
recapitalization, combination, reclassification, or similar change in the capital structure of the Company, appropriate adjustments shall be made in the number, Exercise Price and class of shares of stock subject to the Option. If a majority of the
shares which are of the same class as the shares that are subject to the Option are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation (the
“New Shares”), the Board may unilaterally amend the Option to provide that the Option is exercisable for New Shares. In the event of any such amendment, the Number of Option Shares and the Exercise
Price shall be adjusted in a fair and equitable manner, as determined by the Board, in its discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant to this Section 9 shall be rounded down to the nearest
whole number, and in no event may the Exercise Price be decreased to an amount less than the par value, if any, of the stock subject to the Option. The adjustments determined by the Board pursuant to this Section 9 shall be final, binding and
conclusive. 
  
 10. RIGHTS AS A STOCKHOLDER, EMPLOYEE OR CONSULTANT.

  
 The Optionee shall have no rights as a stockholder with
respect to any shares covered by the Option until the date of the issuance of a certificate for the shares for which the Option has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 9. If the Optionee is an Employee, the Optionee
understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Optionee, the Optionee’s employment is “at will” and is for no specified term. Nothing
in this Option Agreement shall confer upon the Optionee any right to continue in the Service of a Participating Company or 
  

 6 

 interfere in any way with any right of the Participating Company Group to terminate the Optionee’s Service as an
Employee or Consultant, as the case may be, at any time. 
  
 11. NOTICE OF
SALES UPON DISQUALIFYING DISPOSITION. 
  
 The Optionee
shall dispose of the shares acquired pursuant to the Option only in accordance with the provisions of this Option Agreement. In addition, if the Notice designates this Option as an Incentive Stock Option, the Optionee shall (a) promptly
notify the Chief Financial Officer of the Company if the Optionee disposes of any of the shares acquired pursuant to the Option within one (1) year after the date the Optionee exercises all or part of the Option or within two (2) years after the
Date of Option Grant and (b) provide the Company with a description of the circumstances of such disposition. Until such time as the Optionee disposes of such shares in a manner consistent with the provisions of this Option Agreement, unless
otherwise expressly authorized by the Company, the Optionee shall hold all shares acquired pursuant to the Option in the Optionee’s name (and not in the name of any nominee) for the one-year period immediately after the exercise of the Option
and the two-year period immediately after Date of Option Grant. At any time during the one-year or two-year periods set forth above, the Company may place a legend on any certificate representing shares acquired pursuant to the Option requesting the
transfer agent for the Company’s stock to notify the Company of any such transfers. The obligation of the Optionee to notify the Company of any such transfer shall continue notwithstanding that a legend has been placed on the certificate
pursuant to the preceding sentence. 
  
 12. LEGENDS. 
  
 The Company may at any time place legends referencing any applicable
federal, state or foreign securities law restrictions, and, if applicable, that the shares were acquired upon exercise of an Incentive Stock Option on all certificates representing shares of stock subject to the provisions of this Option Agreement.
The Optionee shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to the Option in the possession of the Optionee in order to carry out the provisions of this Section.

  
 13. LOCK-UP AGREEMENT. 
  
 The Optionee hereby agrees that in the event of any underwritten public
offering of stock, including an initial public offering of stock, made by the Company pursuant to an effective registration statement filed under the Securities Act, the Optionee shall not offer, sell, contract to sell, pledge, hypothecate, grant
any option to purchase or make any short sale of, or otherwise dispose of any shares of stock of the Company or any rights to acquire stock of the Company for such period of time from and after the effective date of such registration statement as
may be established by the underwriter for such public offering; provided, however, that such period of time shall not exceed one hundred eighty (180) days from the effective date of the registration statement to be filed in connection with such
public offering. The foregoing limitation shall not apply to shares registered in the public offering under the Securities Act. 
  

 7 

 14. RESTRICTIONS ON TRANSFER OF SHARES. 
  
 No shares acquired upon exercise of the Option may be sold, exchanged, transferred (including, without limitation, any
transfer to a nominee or agent of the Optionee), assigned, pledged, hypothecated or otherwise disposed of, including by operation of law, in any manner which violates any of the provisions of this Option Agreement, and any such attempted disposition
shall be void. The Company shall not be required (a) to transfer on its books any shares which will have been transferred in violation of any of the provisions set forth in this Option Agreement or (b) to treat as owner of such shares or to accord
the right to vote as such owner or to pay dividends to any transferee to whom such shares will have been so transferred. 
  
 15. MISCELLANEOUS PROVISIONS. 
  
 15.1 Binding Effect. Subject to the restrictions on transfer set forth herein, this Option Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. 
  
 15.2 Termination or Amendment. The Board may terminate or amend the Plan or the Option at any time; provided, however, that except as provided in
Section 8 in connection with a Change in Control, no such termination or amendment may adversely affect the Option or any unexercised portion hereof without the consent of the Optionee unless such termination or amendment is necessary to comply with
any applicable law or government regulation or is required to enable the Option, if designated an Incentive Stock Option in the Notice, to qualify as an Incentive Stock Option. No amendment or addition to this Option Agreement shall be effective
unless in writing. 
  
 15.3 Notices. Any notice required or
permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery or upon deposit in the
United States Post Office, by registered or certified mail, with postage and fees prepaid, addressed to the other party at the address shown below that party’s signature on the Notice or at such other address as such party may designate in
writing from time to time to the other party. 
  
 15.4
Integrated Agreement. The Notice, this Option Agreement and the Plan constitute the entire understanding and agreement of the Optionee and the Participating Company Group with respect to the subject matter contained herein or therein and
supersedes any prior agreements, understandings, restrictions, representations, or warranties among the Optionee and the Participating Company Group with respect to such subject matter other than those as set forth or provided for herein or therein.
To the extent contemplated herein or therein, the provisions of the Notice and the Option Agreement shall survive any exercise of the Option and shall remain in full force and effect. 
  
 15.5 Applicable Law. This Option Agreement shall be governed by the laws of the State of Texas as such laws are
applied to agreements between Texas residents entered into and to be performed entirely within the State of Texas. 
  

 8 

 15.6 Counterparts. The Notice may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. 
  

 9 

					
	 TMIncentive Stock Option
	 	 	 	Optionee:                                     
                        
	 TMNonstatutory Stock Option
	 	 	 	 
	 	 	 	 	Date:                                     
                        

  
 STOCK OPTION
EXERCISE NOTICE 
  
 Axesstel, Inc. 
 Attention: Chief Financial Officer 
 6305 Lusk Boulevard 
 San Diego, CA 92121 
  
 Ladies and Gentlemen: 
  
 1.
Option. I was granted an option (the “Option”) to purchase shares of the common stock (the “Shares”) of Axesstel, Inc. (the
“Company”) pursuant to the Company’s 2003 Stock Option Plan (the “Plan”), my Notice of Grant of Stock Option (the
“Notice”) and my Stock Option Agreement (the “Option Agreement”) as follows: 
  

				
		
	 Grant Number:
	  	 	 
	 	  	
	

		
	 Date of Option Grant:
	  	 	 
	 	  	
	

		
	 Number of Option Shares:
	  	 	 
	 	  	
	

		
	 Exercise Price per Share:
	  	$	                                      
      

  
 2. Exercise of
Option. I hereby elect to exercise the Option to purchase the following number of Shares: 
  

				
		
	 Total Shares Purchased:
	  	 	 
	 	  	
	

		
	 Total Exercise Price (Total Shares X Price per Share)
	  	$	                                      
      

  
 3.
Payments. I enclose payment in full of the total exercise price for the Shares in the following form(s), as authorized by my Option Agreement: 
  

				
		
	 TMCash:
	  	$	                                      
      
		
	 TMCheck:
	  	$	                                      
      
		
	 TMTender
of Company Stock:
	  	 	Contact Plan Administrator
		
	 TMCashless exercise Contact Plan Administrator
	  	 	Contact Plan Administrator

  
 4. Tax
Withholding. Subject to the Option Agreement, I authorize payroll withholding and otherwise will make adequate provision for the federal, state, local and foreign tax withholding obligations of the Company, if any, in connection with the
Option. 
  

 1 

 5. Optionee Information. 
  

					
	 My address is:
	 	

		
	 	 	

		
	 My Social Security Number is:
	  	

  
 6. Notice of
Disqualifying Disposition. If the Option is an Incentive Stock Option, I agree that I will promptly notify the Chief Financial Officer of the Company if I transfer any of the Shares within one (1) year from the date I exercise all or part of
the Option or within two (2) years of the Date of Option Grant. 
  
 7. Binding Effect. I agree that the Shares are being acquired in accordance with and subject to the terms, provisions and conditions of the Option Agreement, to all of which I hereby expressly assent. This Agreement shall
inure to the benefit of and be binding upon the my heirs, executors, administrators, successors and assigns. 
  
 I understand that I am purchasing the Shares pursuant to the terms of the Plan, the Notice and my Option Agreement, copies of which I have received and
carefully read and understand. 
  

			
	 Very truly yours,

	
	

	 (Signature)

  
  
 Receipt of the above is hereby acknowledged. 
  

			
	
	 AXESSTEL, INC.

		
	By:	 	 
	 	 	

		
	Title:	 	 
	 	 	

		
	Dated:	 	 
	 	 	

  

 2 

 AXESSTEL, INC. 
 NOTICE OF GRANT OF STOCK OPTION 
  
                      (the “Optionee”) has been granted an option (the
“Option”) to purchase certain shares of Stock of Axesstel, Inc. pursuant to the Axesstel, Inc. 2003 Stock Option Plan (the “Plan”), as follows:

  

			
		
	 Date of Option Grant:
	  	 
		
	 Number of Option Shares:
	  	 
		
	 Exercise Price:
	  	 $             per share

		
	 Initial Vesting Date:
	  	 
		
	Option Expiration Date:	  	 The date ten (10) years after the Date of Option Grant.

		
	 Tax Status of Option:
	  	              Stock Option. (Enter “Incentive” or
“Nonstatutory.” If blank, this Option will be a Nonstatutory Stock Option.)

  
 Vested Shares: Except as
provided in the Plan and Stock Option Agreement, the number of Vested Shares (disregarding any resulting fractional share) as of any date is determined by multiplying the Number of Option Shares by the “Vested
Ratio” determined as of such date as follows: 
  

			
	 	  	Vested Ratio

	 Prior to Initial Vesting Date
	  	0
	 For each full month of the Optionee’s continuous Service from Initial Vesting Date until the Vested Ratio equals 1/1, an
additional
	  	1/36

  
 By their signatures
below, the Company and the Optionee agree that the Option is governed by this Notice and by the provisions of the Plan and the Stock Option Agreement, both of which are attached to and made a part of this document. The Optionee acknowledges receipt
of copies of the Plan and the Stock Option Agreement, represents that the Optionee has read and is familiar with their provisions, and hereby accepts the Option subject to all of their terms and conditions. 
  

									
	 AXESSTEL, INC. OPTIONEE
	 	 	 	 
					
	By:	 	 	 	 	 	 	 	 
	 	 	
	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 Signature

					
	Its:	 	 	 	 	 	 	 	 
	 	 	
	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 Date

				
	Address:     6305 Lusk Boulevard	 	 	 	 	 	 
	 	 	 	 	 	 	 	

	                     San Diego,
CA 92121
	 	 	 	 	 	 Address

					
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	

  
 ATTACHMENTS: 2003 Stock Option Plan,
as amended to the Date of Option Grant; Stock Option Agreement and Exercise NoticeLease Agreement for Office Space

 Exhibit 10.4 
  
 [GRAPHIC] 
  
 STANDARD OFFICE LEASE - MODIFIED 
 (Base
year. Lessee pays utilities and janitorial) 
  
 1. Basic Lease Provisions
(“Basic Lease Provisions”) 
  
 1.1 Parties:
This Lease, dated, October 15, 2001 for reference purposes only, Is made by and between Stanley R. and
Elise C. Smith Trust (herein called “Lessor”) and AxssesTel, Inc. (herein called “Lessee”). 
  
 1.2 Premises: An entire, single occupant building, consisting of approximately five thousand five hundred thirty-one square feet (5,531 s.f.), more
or less, as defined In paragraph 2 and as shown on Exhibit “A” hereto (the “Premises”). 
  
 1.3 Building: Commonly described as being located at 6305 Lusk Boulevard in the City of San Diego, County of San Diego, State of California (APN
341-033-14-07) as more particularly described in Exhibit “B” attached hereto, and as defined in paragraph 2. 
  
 1.4 Use: General office and dry lab subject to paragraph 6. 
  
 1.5 Term: Sixty 60) months commencing December 1, 2001 (“Commencement Date”) and ending at Midnight
on November 30, 2006 as defined in paragraph 3. 
  
 1.6 Base
Rent: Nine thousand four hundred dollars ($9,400.00) per month, payable on the First day of each month, per paragraph 4.1 and shall commence December 1, 2001. As long as Lessee is current as to all obligations under the terms and conditions of
this lease and has never been in Default at any time, the then current Base Rent due shall be abated for the Second (2nd), Fourth (4th), and Twenty-forth (24th) months of the Term of this Lease.

  
 1.7 Base Rent Increase: On each December 1st of the Term, the monthly Base Rent payable under paragraph 1.6 above shall be adjusted as provided in paragraph 4.3 below.

  
 1.8 Rent Paid Upon Execution: Nine thousand four
hundred dollars ($9,400.00)) for the period of December 1, 2001 through December 31, 2001. 
  
 1.9 Security Deposit: Nine thousand four hundred dollars ($9,400.00). 
  
 1.10 Lessee’s Share of Operating Expense Increase: One hundred percent (100%) as defined in paragraph 4.2.

  
 2. Premises, Parking and Common Areas. 
  
 2.1 Premises. See 1.2 above (sometimes referred to as the
“Building” Identified in paragraph 1.3). The Premises, the Building, the Common Areas, the land upon which the same are located, along with all other buildings and improvements thereon or thereunder, are herein collectively referred to as
the “Office Building Project”. Lessor hereby leases to Lessee and Lessee leases from Lessor for the term, at the rental, and upon all of the conditions set forth herein, the real property referred to in the Basic Lease Provisions,
paragraph 1.2, as the “Premises”. 
  
 2.2
Vehicle Parking: So long as Lessee Is not in default, and subject to the rules and regulations attached hereto, and as established by Lessor from time to time. Lessee shall be entitled to rent and use of Twenty-two (22) parking spaces in the
Office Building Project. 
  
 2.2.1 If Lessee
commits, permits or allows any of the prohibited activities described in the Lease or the rules then in effect, then Lessor shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away
the vehicle involved and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor. 
  
 2.2.2 Not applicable. 
  
 2.3 Common Areas-Definition. The term “Common Areas” is defined as all areas and facilities outside the Premises and within the exterior
boundary line of the Office Building Project that are provided and designated by the Lessor from time to time for the general non-exclusive use of Lessor, Lessee and of other lessees of the Office Building Project and their respective employees,
suppliers, shippers, customers and invitees, including but not limited to common entrances, lobbies, corridors, stairways and stairwells, public rest rooms, elevators, escalators, parking areas to the extent not otherwise prohibited by this Lease,
loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways, ramps, driveways, landscaped areas and decorative walls. 
  
 2.4 Common Areas-Rules and Regulations. Lessee agrees to abide by and conform to the Covenants, Conditions and Restrictions (CC & R’s) of
the First Edition Office Park Owners Association (HOA). Lessee may access, for review, the CC & R’s upon an appointment with the property manager, or purchase a copy for $12.00. Lessee also agrees to abide by and conform to the rules and
regulations attached hereto as Exhibit B with respect to the Office Building Project and Common Areas, and to cause its employees, suppliers, shippers, customers, and invitees to so abide and conform. Lessor, the HOA or such other person(s) as
Lessor may appoint shall have the exclusive control and management of the Common Areas and shall have the right, from time to time, to modify, amend and enforce said rules and regulations- Lessor shall not be responsible to Lessee for the
noncompliance with said rules and regulations by other lessees, their agents, employees and invitees of the Office Building Project. 
  
 2.5 Common Areas-Changes. Lessor shall have the right, in Lessor’s sole discretion, from time to time: 
  
 (a) To make changes to the Building interior and exterior
and Common Areas, including, without limitation, changes in the location, size, shape, number, and appearance thereof, including but not limited to the windows, heat air and venting, plumbing, and electrical systems, rest rooms, driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas and walkways; provided, however, Lessor shall at all times provide the parking facilities required by applicable law;

  
 (b) To close temporarily any of the Common
Areas for maintenance purposes so long as reasonable access to the Premises remains available; 
  
 (c) To add additional buildings and Improvements to the Common Areas; 
  
 (d) To use the Common Areas while engaged in making additional improvements, repairs or alterations to the
Office Building Project, or any portion thereof; 
  
 (e) To do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Office Building Project as Lessor may, in the exercise of sound business judgment deem to be appropriate. 
  
 3. Term. 
  
 3.1 Term. The term and Commencement Date of this Lease shall be as specified in paragraph 1.5 of the Basic Lease
Provisions. 
  
 3.2 Delay in Possession. Notwithstanding
said Commencement Date, if for any reason Lessor can not deliver possession of the Premises to Lessee on said date and subject to paragraph 3.2.2, 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 be obligated to pay rent or perform any other obligation of Lessee under the terms of this Lease, except as may be otherwise provided in
this Lease, until possession of the Premises is tendered to Lessee. 
  

									
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 3.2.1 Possession Tendered-Defined. Possession of the Premises shall be deemed
tendered to Lessee (“Tender of Possession”) when Lessee has reasonable access to the Premises. 
  
 3.2.2 Delays Caused by Lessee. There shall be no abatement of rent. 
  
 3.3 Early Possession. Lessee is granted Early Possession for the sole purpose of measuring for furniture, pre-wiring
for the phone and computer systems and construction of tenant improvements defined in Exhibit C. If Lessor grants Lessee Premises occupancy, prior to said Commencement Date, such occupancy shall be subject to all provisions of this Lease, such
occupancy shall not change the termination date, and Lessee shall pay rent for such occupancy. 
  
 4. Rent 
  
 4.1 Base
Rent. Subject to adjustment as hereinafter provided in paragraph 4.3, and except as may be otherwise expressly provided in this Lease, Lessee shall pay to Lessor the Base Rent for the Premises set forth in paragraph 1.6 of the Basic Lease
Provisions, without offset or deduction. Lessee shall pay Lessor upon execution hereof the advance Base Rent described in paragraph 1.8 of the Basic Lease Provisions. Rent for any period during the term hereof which is for less than one month shall
be prorated based upon the actual number of days of the calendar month involved. Rent shall be payable in lawful money of the United States to Lessor at the address stated herein or to such other persons or at such other places as Lessor may
designate in writing. 
  
 4.2 Operating Expense Increase.
Lessee shall pay to Lessor during the term hereof, in addition to the Base Rent, Lessee’s Share, as hereinafter defined, of the amount by which all Operating Expenses, as hereinafter defined, for each Comparison Year exceeds the amount of
all Operating Expenses for the Base Year, such excess being hereinafter referred to as the “Operating Expense Increase,” in accordance with the following provisions: 
  
 (a) “Lessee’s Share” is defined, for purposes of this Lease, as the percentage set forth in
paragraph 1.10 of the Basic Lease Provisions, which percentage has been determined by dividing the approximate square footage of the Premises by the total approximate square footage of the rentable space contained in the Office Building Project. It
is understood and agreed that the Square footage figures set forth in the Basic Lease Provisions are approximations which Lessor and Lessee agree are reasonable and shall not be subject to revision except in connection with an actual change in the
size of the Premises or a change in the space available for lease in the Office Building Project. 
  
 (b) “Base Year” is defined as the calendar year in which the Lease term commences. 
  
 (c) “Comparison Year” is defined as each calendar
year during the term of this Lease subsequent to the Base Year; provided, however, Lessee shall have no obligation to pay a share of the Operating Expense Increase applicable to the first twelve (12) months of the Lease Term (other than such as are
mandated by a governmental authority, as to which government mandated expenses Lessee shall pay Lessee’s Share, notwithstanding they occur during the first twelve (12) months). Lessee’s Share of the Operating Expense Increase for the first
and last Comparison Years of the Lease Term shall be prorated according to that portion of such Comparison Year as to which Lessee is responsible for a share of such increase. 
  
 (d) “Operating Expenses” is defined, for purposes of this Lease, to include all costs, if any,
incurred by Lessor in the exercise of its reasonable discretion, for: 
  
 (i) The operation, repair, maintenance, and replacement, in neat, clean, safe, good order and condition, of the Office Building Project, including but not limited to, the following: 
  
 (aa) The Common Areas, including their surfaces, coverings,
decorative items, carpets, drapes and window coverings, and including parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, stairways, parkways, driveways, landscaped areas, striping, bumpers, irrigation systems,
Common Area lighting facilities, building exteriors and roofs, fences and gates; 
  
 (bb) All heating, air conditioning, plumbing, electrical systems, life safety equipment, telecommunication and other equipment used in
common by, or for the benefit of, lessees or occupants of the Office Building Project, including tenant directories, fire detection systems including sprinkler system maintenance and repair. 
  
 (ii) Trash disposal, janitorial HOA dues and security
services; 
  
 (iii) Any other service to be
provided by Lessor or HOA that is elsewhere in this Lease stated to be an “Operating Expense”; 
  
 (iv) The cost of the premiums for the liability and property insurance policies to be maintained by Lessor under paragraph 8 hereof;

  
 (v) The amount of the real property taxes to
be paid by Lessor under paragraph 10.1 hereof; 
  
 (vi) The cost of water, sewer, gas, electricity, and other publicly mandated services to the Office Building Project; 
  
 (vii) Labor, salaries and applicable fringe benefits and costs, materials, supplies and tools, used in maintaining and/or cleaning the
Office Building Project and accounting and a management fee attributable to the operation of the Office Building Project: 
  
 (viii) Replacing and/or adding improvements mandated by any governmental agency and any repairs or removals necessitated thereby amortized
over its useful life according to Federal income tax regulations or guidelines for depreciation thereof (including interest on the unamortized balance as is then reasonable in the judgment of Lessor’s accountants); 
  
 (ix) Replacements of equipment or improvements that have a
useful life for depreciation purposes according to Federal income tax guidelines of five (5) years or less, as amortized over such life. 
  
 (e) Operating Expenses shall not include the costs of replacements of equipment or improvements that have a useful life for Federal income
tax purposes in excess of five (5) years unless it is of the type described in paragraph 4.2(d)(viii), in which case their cost shall be included as above provided. 
  
 (f) Operating Expenses shall not include any expenses paid by any lessee directly to third parties, or as to
which Lessor is otherwise reimbursed by any third party, other tenant, or by insurance proceeds. 
  
 (g) Lessee’s Share of Operating Expense Increase shall be payable by Lessee within ten (10) days after a reasonably detailed
statement of actual expenses is presented to Lessee by Lessor. At Lessor’s option, however, an amount may be estimated by Lessor from time to time in advance of Lessee’s Share of the Operating Expense Increase for any Comparison Year, and
the same shall be payable monthly or quarterly, as Lessor shall designate, during each Comparison Year of the Lease term, on the same day as the Base Rent is due hereunder- In the event that Lessee pays Lessor’s estimate of Lessee’s Share
of Operating Expense Increase as aforesaid, Lessor shall deliver to Lessee within sixty (60) days after the expiration of each Comparison Year a reasonably detailed statement showing Lessee’s Share of the actual Operating Expense Increase
incurred during such year. It Lessee’s payments under this paragraph 4.2(g) during said Comparison Year exceed Lessee’s Share as indicated on said statement, Lessee shall be entitled to credit the amount of such overpayment against
Lessee’s Share of Operating Expense Increase next falling due. If Lessee’s payments under this paragraph during said Comparison Year were less than Lessee’s Share as indicated on said statement, Lessee shall pay to Lessor the amount
of the deficiency within ten (10) days after delivery by Lessor to Lessee of said statement Lessor and Lessee shall forthwith adjust between them by cash payment any balance determined to exist with respect to that portion of the last Comparison
Year for which Lessee is responsible as to Operating Expense Increases, notwithstanding that the Lease term may have terminated before the end of such Comparison Year. 
  
  

									
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 4.3 Fixed Rent Increase. 
  
 4.3.1 At the times set forth in paragraph 1.7 of the Basic Lease Provisions, the monthly Base Rent payable
under paragraph 4.1 of this Lease shall be adjusted by the increase, by Three percent (3%). 
  
 4.3.2 Lessee shall pay the new Rent rate with out further notice from Lessor. 
  
 5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the
security deposit set forth in paragraph 1.9 of the Basic Lease Provisions as security for Lessee’s faithful performance of Lessee’s obligations hereunder. If Lessee fails to pay rent or other charges due hereunder, or otherwise defaults
with respect to any provision of this Lease, Lessor may use, apply or retain all or any portion of said deposit for the payment of any rent or other charge in default for the payment of any other sum to which Lessor may become obligated by reason of
Lessee’s default, or to compensate Lessor for any loss or damage which Lessor may suffer thereby. If Lessor so uses or applies all or any portion of said deposit, Lessee shall within ten (10) days after written demand therefor deposit cash with
Lessor in an amount sufficient to restore said deposit to the full amount then required of Lessee. If the monthly Base Rent shall, from time to time, increase during the term of this Lease, Lessee shall, at the time of such increase, deposit with
Lessor additional money as a security deposit so that the total amount of the security deposit held by Lessor shall at all times bear the same proportion to the then current Base Rent as the initial security deposit bears to the initial Base Rent
set forth in paragraph 1.6 of the Basic Lease Provisions. Lessor shall not be required to keep said security deposit separate from its general accounts. If Lessee performs all of Lessee’s obligations hereunder, said deposit, or so much thereof
as has not heretofore been applied by Lessor, shall be returned, without payment of interest or other increment for its use, to Lessee (or, at Lessor’s option, to the last assignee, if any, of Lessee’s interest hereunder) at the expiration
of the term hereof, and after Lessee has vacated the Premises. No trust relationship is created herein between Lessor and Lessee with respect to said Security Deposit. 
  
 6. Use. 
  
 6.1 Use. The Premises shall be used and occupied only for the purpose set forth in paragraph 1.4 of the Basic Lease Provisions or any other use
which is reasonably comparable to that use and for no other purpose. 
  
 6.2 Compliance with Law. 
  
 (a)
Lessor warrants to Lessee that the Premises, in the state existing on the date that the Lease term commences, but without regard to alterations or improvements made by Lessee or the use for which Lessee will occupy the Premises, does not violate any
covenants or restrictions of record, or any applicable building code, regulation or ordinance in effect on such Lease term Commencement Date. In the event it is determined that this warranty has been violated, then it shall be the obligation of the
Lessor, after written notice from Lessee, to promptly, at Lessor’s sole cost and expense, rectify any such violation. 
  
 (b) Except as provided in paragraph 6.2(a) Lessee shall, at Lessee’s expense, promptly comply with all applicable statutes,
ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements of any fire insurance underwriters or rating bureaus, now in effect or which may hereafter come into effect, whether or not they reflect a change in
policy from that now existing, during the term or any part of the term hereof, relating in any manner to the Premises and the occupation and use by Lessee of the Premises. Lessee shall conduct its business in a lawful manner and shall not use or
permit the use of the Premises or the Common Areas in any manner that will tend to create waste or a nuisance or shall tend to disturb other occupants of the Office Building Project. 
  
 6.3 Condition of Premises. 
  

(a) Lessor shall deliver the Premises to Lessee in the “as is” condition on the Lease Commencement Date and Lessor warrants
to Lessee that the plumbing, lighting, air conditioning, and heating system in the Premises shall be in good operating condition. In the event that it is determined that this warranty has been violated, then it shall be the obligation of Lessor,
after receipt of written notice from Lessee setting forth with specificity the nature of the violation, to promptly, at Lessor’s sole cost, rectify such violation. 
  
 (b) Except as otherwise provided in this Lease, Lessee hereby accepts the Premises and the Office Building
Project in their condition existing as of the Lease Commencement Date or the date that Lessee takes possession of the Premises, whichever is earlier, subject to all applicable zoning, municipal, county and state laws, ordinances and regulations
governing and regulating the use of the Premises, and any easements, covenants or restrictions of record, and accepts this Lease subject thereto and to all matters disclosed thereby and by any exhibits attached hereto. Lessee acknowledges that it
has satisfied itself by its own independent investigation that the Premises are suitable for its intended use, and that neither Lessor nor Lessor’s agent or agents has made any representation or warranty as to the present or future suitability
of the Premises, Common Areas, or Office Building Project for the conduct of Lessee’s business. 
  
 7. Maintenance, Repairs, Alterations and Common Area Services. 
  
 7.1 Lessor’s Obligations. Lessor shall keep the Office Building Project, including the Premises, interior and exterior walls, roof, and common
areas, and the equipment whether used exclusively for the Premises or in common with other premises, in good condition and repair, provided, however, Lessor shall not be obligated to paint, repair or replace improvements made by Lessee, or to repair
or replace any improvements that are not ordinarily a part of the Building or are above then Building standards- Except as provided in paragraph 9.5, there shall be no abatement of rent or liability of Lessee on account of any injury or interference
with Lessee’s business with respect to any improvements, alterations or repairs made by Lessor to the Office Building Project or any part thereof. Lessee expressly waives the benefits of any statute now or hereafter in effect which would
otherwise afford Lessee the right to make repairs at Lessor’s expense or to terminate this Lease because of Lessor’s failure to keep the Premises in good order, condition and repair. 
  
 7.2 Lessee’s Obligations. 
  
 (a) Notwithstanding Lessor’s obligation to keep the
Premises in good condition and repair, Lessee shall be responsible for payment of the cost thereof to Lessor as additional rent for that portion of the cost of any maintenance and repair of the Premises, or any equipment (wherever located) that
serves only Lessee or the Premises, to the extent such cost is attributable to causes beyond normal wear and tear. Lessee shall be responsible for the cost of replacing light bulbs and florescent tubes, painting, repairing or replacing wall
coverings, and to repair or replace any Premises improvements that are not ordinarily a part of the Building or that are above then Building standards. Lessor may, at its option, upon reasonable notice, elect to have Lessee perform any particular
such maintenance or repairs the cost of which is otherwise Lessee’s responsibility hereunder. 
  
 (b) On the last day of the term hereof, or on any sooner termination, Lessee shall surrender the Premises to Lessor in the same condition
as received, ordinary wear and tear excepted, clean and free of debris. Any damage or deterioration of the Premises shall not be deemed ordinary wear and tear if the same could have been prevented by good maintenance practices by Lessee. Lessee
shall repair any damage to the Premises occasioned by the installation or removal of Lessee’s trade fixtures, alterations, furnishings and equipment. Except as otherwise stated in this Lease, Lessee shall leave the air lines, power panels,
electrical distribution systems, lighting fixtures, air conditioning, window coverings, wall coverings, carpets, wall panelling, ceilings and plumbing on the Premises and in good operating condition. 
  
 7.3 Alterations and Additions. 
  
 (a) Lessee shall not, without Lessor’s prior written
consent make any alterations, improvements, additions, Utility installations or repairs in, on or about the Premises, or the Office Building Project. As used in this paragraph 7.3 the term “Utility installation” shall mean carpeting,
window and wall coverings, power panels, electrical distribution systems, lighting fixtures, air conditioning, plumbing, and telephone and telecommunication wiring and equipment. At the expiration of the term, Lessor may require the removal of any
or all of said alterations, improvements, additions or Utility installations, and the restoration of the Premises and the Office Building Project to their prior condition, at Lessee’s expense. Should Lessor permit Lessee to make its own
alterations, improvements, additions or Utility installations, Lessee shall use only such contractor as has been expressly approved by Lessor, and Lessor may require Lessee to provide Lessor, at Lessee’s sole cost and expense, a lien and
completion bond in an amount equal to 

  

									
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one and one-half times the estimated cost of such improvements, to insure Lessor against any liability for mechanic’s and materialmen’s liens and
to insure completion of the work. Should Lessee make any alterations, improvements, additions or Utility installations without the prior approval of Lessor, or use a contractor not expressly approved by Lessor, Lessor may, at any time during the
term of this Lease, require that Lessee remove any part or all of the same. 
  
 (b) Any alterations, improvements, additions or Utility installations in or about the Premises or the Office Building Project that Lessee shall desire to make shall be presented to Lessor in written form, with
proposed detailed plans. If Lessor shall give its consent to Lessee’s making such alteration, improvement, addition or Utility installation, the consent shall be deemed conditioned upon Lessee acquiring a permit to do so from the applicable
governmental agencies, furnishing a copy thereof to Lessor prior to the commencement of the work, and compliance by Lessee with all conditions of said permit in a prompt and expeditious manner. 
  
 (c) 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 in the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Premises, the Building or the Office Building
Project, or any interest therein. 
  
 (d) Lessee
shall give Lessor not less than ten (10) days’ notice prior to the commencement of any work in the Premises by Lessee, and Lessor shall have the right to post notices of non-responsibility in or on the Premises or the Building as provided by
law it Lessee shall, in good faith, contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend itself and Lessor 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, the Building or the Office Building Project, upon the condition that if Lessor shall require, Lessee shall furnish to Lessor a surety bond satisfactory to Lessor in an amount
equal to such contested lien claim or demand indemnifying Lessor against liability for the same and holding the Premises, the Building and the, Office Building Project free from the effect of such lien or claim. In addition, Lessor may require
Lessee to pay Lessor’s reasonable attorneys’ fees and costs in participating in such action if Lessor shall decide it is to Lessor’s best interest so to do. 
  
 (e) All alterations, improvements, additions and Utility installations (whether or not such Utility
installations constitute trade fixtures of Lessee, which may be made to the Premises by Lessee, including but not limited to, floor coverings, panelings, doors, drapes, built-ins, moldings, sound attenuation, and lighting and telephone or
communication systems, conduit, wiring and outlets, shall be made and done in a good and workmanlike manner and of good and sufficient quality and materials and shall be the property of Lessor and remain, upon and be surrendered with the Premises at
the expiration of the Lease term, unless Lessor requires their removal pursuant to paragraph 7.3(a), Provided Lessee is not in default, notwithstanding the provisions of this paragraph 7.3(e), Lessee’s personal property and equipment, other
than that which is affixed to the Premises so that it cannot be removed without material damage to the Premises or the Building, and other than Utility Installations, shall remain the property of Lessee and may be removed by Lessee subject to the
provisions of paragraph 7.2. 
  
 (f) Lessee shall
provide Lessor with as-built plans and specifications for any alterations, improvements, additions or Utility Installations. 
  
 7.4 Utility Additions. Lessor reserves the right to install new or additional utility facilities throughout the Office Building Project for the
benefit of Lessor or Lessee, or any other lessee of the Office Building Project, including, but not by way of limitation, such utilities as plumbing, electrical systems, communication systems, and fire protection and detection systems, so long as
such installations do not unreasonably interfere with Lessee’s use of the Premises. 
  
 8. Insurance; Indemnity. 
  
 8.1 Liability Insurance-Lessee. Lessee shall, at Lessee’s expense, obtain and keep in force during the term of this Lease a policy of Comprehensive General Liability insurance utilizing an Insurance Services Office standard form
with Broad Form General Liability Endorsement (GLO404), or equivalent. In an amount of not less than $1,000,000 per occurrence of bodily injury and property damage combined or in a greater amount as reasonably determined by Lessor and shall insure
Lessee with Lessor as an additional insured against liability arising out of the use, occupancy or maintenance of the Premises. Compliance with the above requirement shall not, however, limit the liability of Lessee hereunder. 
  
 8.2 Liability Insurance-Lessor. Lessor shall obtain and keep in force
during the term of this Lease a policy of Combined Single Limit Bodily injury and Broad Form Property Damage Insurance, plus coverage against such other risks Lessor deems advisable from time to time, insuring Lessor, but not Lessee, against
liability arising out of the ownership, use, occupancy or maintenance of the Office Building Project in an amount not less than $5,000,000.00 per occurrence. 
  
 8.3 Property Insurance-Lessee. Lessee shall, at Lessee’s expense, obtain and keep in force during the term of this Lease for the benefit of
Lessee, replacement cost fire and extended coverage insurance, with vandalism and malicious mischief, sprinkler leakage and earthquake sprinkler leakage endorsements, in an amount sufficient to cover not less than 100% of the improvements.

  
 8.4 Property Insurance-Lessor. Lessor shall obtain and
keep in force during the term of this Lease a policy or policies of insurance covering loss or damage to the Office Building Project Improvements, but not Lessee’s personal property, fixtures, equipment or tenant improvements, in the amount of
the full replacement cost thereof, as the same may exist from time to time, utilizing Insurance Services Office standard form, or equivalent, providing protection against all perils included within the classification of fire, extended coverage,
vandalism, malicious mischief, plate glass, and such other perils as Lessor deems advisable or may be required by a lender having a lien on the Office Building Project. In addition, Lessor shall obtain and keep in force, during the term of this
Lease, a policy of rental value insurance covering a period of one year, with loss payable to Lessor, which insurance shall also cover all Operating Expenses for said period. Lessee will not be named in any such policies carried by Lessor and shall
have no right to any proceeds therefrom. The policies required by these paragraphs 8.2 and 8.4 shall contain such deductibles as Lessor or the aforesaid lender may determine. In the event that the Premises shall suffer an insured loss as defined in
paragraph 9.1(f) hereof, the deductible amounts under the applicable insurance policies shall be deemed an Operating Expense. Lessee shall not do or permit to be done anything which shall invalidate the Insurance policies carried by Lessor. Lessee
shall pay the entirety of any increase in the property insurance premium for the Office Building Project over what it was immediately prior to the commencement of the term of this Lease if the increase is specified by Lessor’s insurance carrier
as being caused by the nature of Lessee’s occupancy or any act or omission of Lessee. 
  
 8.5 Insurance Policies. Lessee shall deliver to Lessor copies of liability insurance policies required under paragraph 8.1 or certificates evidencing the existence and amounts of such insurance within seven (7)
days after the Commencement Date of this Lease. No such policy shall be cancelable or subject to reduction of coverage or other 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 renewals thereof. 
  
 8.6 Waiver of Subrogation. Lessee and Lessor each here by release and relieve the other and waive their entire right of recovery against the other, for direct or consequential loss or damage arising out of or
incident to the perils covered by property insurance carried by such party, whether due to the negligence of Lessor or Lessee or their agents, employees, contractors and/or invitees. If necessary all property insurance policies, required under this
Lease shall be endorsed to so provide. 
  
 8.7 Indemnity.
Lessee shall indemnity and hold harmless Lessor and its agents, Lessor’s master ground lessor partners and lenders, from and against any and all claims for damage to the person or property of anyone or any entity arising from Lessee’s use
of the Office Building., Project, or from the conduct of Lessee’s business or from any activity, work or things done, permitted or suffered by Lessee in or about the Premises or elsewhere and shall further indemnify and hold harmless Lessor
from and against any and all claims, costs and expenses arising from any breach of default in the performance of any obligation on Lessee’s part to be performed under the terms of this Lease, or arising from any act or omission of Lessee, or
any of Lessee’s agents, contractors, employees, or 

  

									
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invitees, and from and against all costs, attorney’s fees, expenses and liabilities incurred by Lessor as the result of any such use, conduct, activity,
work, things done, permitted or suffered, breach, default or negligence, and in dealing reasonably therewith, including but not limited to the defense or pursuit of any claim or any action or proceeding involved therein: and in case any action or
proceeding be brought against Lessor by reason of any such matter, 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. Lessee, as a material part of the consideration to Lessor, hereby assumes all risk of damage to property of Lessee or injury to persons, in, upon or about the Office
Building Project arising from any cause and Lessee hereby waives all claims in respect thereof against Lessor. 
  
 8.8 Exemption of Lessor from Liability. Lessee hereby agrees that Lessor shall not be liable for injury to Lessee’s business or any loss of
income therefrom or for loss of or damage to the goods, wares, merchandise or other property of Lessee, Lessee’s employees, Invitees, customers, or any other person in or about the Premises or the Office Building Project, nor shall Lessor be
liable for injury to the person of Lessee, Lessee’s employees, agents or contractors, whether such damage or injury is caused by or results from theft, fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or
other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause, whether said damage or injury results from conditions arising upon the Premises or upon other portions of the Office
Building Project, or from other sources or places, or from new construction or the repair, alteration or improvement of any part of the Office Building Project, or of the equipment, fixtures or appurtenances applicable thereto, and regardless of
whether the cause of such damage or injury or the means of repairing the same is inaccessible, Lessor shall not be liable for any damages arising from any act or neglect of any other lessee, occupant or user of the Office Building Project, nor from
the failure of Lessor to enforce the provisions of any other lease of any other lessee of the Office Building Project. 
  
 8.9 No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified in this
paragraph 8 are adequate to cover Lessee’s property or obligations under this Lease. 
  
 9. Damage or Destruction. 
  
 9.1 Definitions. 
  
 (a)
“Premises Damage” shall mean if the Premises are damaged or destroyed to any extent. 
  
 (b) “Premises Building Partial Damage” shall mean if the Building of which the Premises are a part is damaged or destroyed to
the extent that the cost to repair is less than fifty percent (50%) of the then Replacement Cost of the building. 
  
 (c) “Premises Building Total Destruction” shall mean if the Building of which the Premises are a part is damaged or destroyed to
the extent that the cost to repair is fifty percent (50%) or more of the then Replacement Cost of the Building- 
  
 (d) “Office Building Project Buildings” shall mean all of the buildings on the Office Building Project site. 
  
 (e) “Office Building Project Buildings Total
Destruction” shall mean if the Office Building Project Buildings are damaged or destroyed to the extent that the cost of repair is fifty percent (50%) or more of the then Replacement Cost of the Office Building Project Buildings. 
  
 (f) “Insured Loss” shall mean damage or
destruction which was caused by an event required to be covered by the insurance described in paragraph 8. The fact that an insured Loss has a deductible amount shall not make the loss an uninsured loss. 
  
 (g) “Replacement Cost” shall mean the amount of
money necessary to be spent in order to repair or rebuild the damaged area to the condition that existed immediately prior to the damage occurring, excluding all improvements made by lessees, other than those installed by Lessor at Lessee’s
expense. 
  
 9.2 Premises Damage; Premises Building Partial
Damage. 
  
 (a) Insured Loss: Subject
to the provisions of paragraphs 9.4 and 9.5, if at any time during the term of this Lease there is damage which is an insured Loss and which falls into the classification of either Premises Damage or Premises Building Partial Damage, then Lessor
shall, as soon as reasonably possible and to the extent the required materials and labor are readily available through usual commercial channels, at Lessor’s expense, repair such damage (but not Lessee’s fixtures, equipment or tenant
improvements originally paid for by Lessee) to its condition existing at the time of the damage, and this Lease shall continue in full force and effect . 
  
 (b) Uninsured Loss: Subject to the provisions of paragraphs 9.4 and 9.5, if at any time during the term of this Lease there is
damage which is not an insured Loss and which falls within the classification of Premises Damage or Premises Building Partial Damage, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at
Lessee’s expense), which damage prevents Lessee from making any substantial use of the Premises, 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 the date of the occurrence of such damage of Lessor’s intention to cancel and terminate this Lease as of the date of the occurrence of
such damage, in which event this Lease shall terminate as of the date of the occurrence of such damage. 
  
 9.3 Premises Building Total Destruction; Office Building Project Total Destruction. Subject to the provisions of paragraphs 9.4 and 9.5, if at any
time during the term of this Lease there is damage, whether or not it is an insured Loss, which falls into the classifications of either (i) Premises Building Total Destruction, or (ii) Office Building Project Total Destruction, then Lessor may at
Lessor’s option either (i) repair such damage or destruction as soon as reasonably possible at Lessor’s expense (to the extent the required materials are readily available through usual commercial channels) to its condition existing at the
time of the damage, but not Lessee’s fixtures, equipment or tenant improvements, and this Lease shall continue in full force and effect, or (ii) give written notice to Lessee within thirty (30) days after the date of occurrence of such damage
of Lessor’s intention to cancel and terminate this Lease, in which case this Lease shall terminate as of the date of the occurrence of such damage. 
  
 9.4 Damage Near End of Term. 
  
 (a) Subject to paragraph 9.4(b), If at any time during the last twelve (12) months of the term of this Lease there is substantial damage
to the Premises, Lessor may at Lessor’s option cancel and terminate this Lease as of the date of occurrence of such damage by giving written notice to Lessee of Lessor’s election to do so within 30 days after the date of occurrence of such
damage. 
  
 (b) Notwithstanding paragraph
9.4(a), in the event that Lessee has an option to extend or renew this Lease, and the time within which said option may be exercised has not yet expired, Lessee shall exercise such option, if it is to be exercised at all, no later than twenty (20)
days after the occurrence of an insured Loss falling within the classification of Premises Damage during the last twelve (12) months of the term of this Lease. If Lessee duly exercises such option during said twenty (20) day period, Lessor shall, at
Lessor’s expense, repair such damage, but not Lessee’s fixtures, equipment or tenant improvements, as soon as reasonably possible and this Lease shall continue in full force and effect. If Lessee fails to exercise such option during said
twenty (20) day period, then Lessor may at Lessor’s option terminate and cancel this Lease as of the expiration of said twenty (20 day period by giving written notice to Lessee of Lessor’s election to do so within ten (10) days after the
expiration of said twenty (20) day period, notwithstanding any term or provision in the grant of option to the contrary. 
  
 9.5 Abatement of Rent; Lessee’s Remedies. 
  
 (a) In the event Lessor repairs or restores the Building or Premises pursuant to the provisions of this paragraph 9, and any part of the
Premises are not usable (including loss of use due to loss of access or essential services), the rent payable hereunder (including Lessee’s Share of Operating Expense increase) for the period during which such damage, repair or restoration
continues shall be abated, provided (1) the damage was not the result of the negligence of Lessee, and (2) such abatement shall only be to the extent the operation and profitability of Lessee’s business as operated from the Premises is
adversely affected. Except for 

  

									
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said abatement of rent, if any, Lessee shall have no claim against Lessor for any damage suffered by reason of any such damage, destruction, repair or
restoration. 
  
 (b) If Lessor shall be obligated
to repair or restore the Premises or the Building under the provisions of this Paragraph 9 and shall not commence such repair or restoration within ninety (90) days after such occurrence, or if Lessor shall not complete the restoration and repair
within six (6) months after such occurrence, Lessee may at Lessee’s option cancel and terminate this Lease by giving Lessor written notice of Lessee’s election to do so at any time prior to the commencement or completion, respectively, of
such repair or restoration. In such event this Lease shall terminate as of the date of such notice. 
  
 (e) Lessee agrees to cooperate with Lessor in connection with any such restoration and repair, including but not limited to the approval
and/or execution of plans and specifications required. 
  
 9.6
Termination-Advance Payments. Upon termination of this Lease pursuant to this paragraph 9, an equitable adjustment shall be made concerning advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in addition, return to
Lessee so much of Lessee’s security deposit as has not theretofore been applied by Lessor. 
  
 9.7 Waiver. Lessor and Lessee waive the provisions of any statute which relate to termination of leases when leased property is destroyed and agree
that such event shall be governed by the terms of this Lease. 
  
 10. Real
Property Taxes. 
  
 10.1 Payment of Taxes. Lessor
shall pay the real property tax, as defined in paragraph 10.3, applicable to the Office Building Project subject to reimbursement by Lessee of Lessee’s Share of such taxes in accordance with the provisions of paragraph 4.2, except as otherwise
provided in paragraph 10.2. 
  
 10.2 Additional
Improvements. Lessee shall not be responsible for paying any increase in real property tax specified in the tax assessor’s records and work sheets as being caused by additional improvements placed upon the Office Building Project by other
lessees or by Lessor for the exclusive enjoyment of any other lessee. Lessee shall, however, pay to Lessor at the time that Operating Expenses are payable under paragraph 4.2(c) the entirety of any increase in real property tax if assessed solely by
reason of additional improvements placed upon the Premises by Lessee or at Lessee’s request. 
  
 10.3 Definition of “Real Property Tax.” As used herein, the term “real property tax” 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 on the Office Building Project or any
portion thereof by any authority having the direct or indirect power to tax, including any city, county, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district thereof, as against any
legal or equitable interest of Lessor in the Office Building Project or in any portion thereof, as against Lessor’s right to rent or other income therefrom, and as against Lessor’s business of leasing the Office Building Project. The term
“real property tax” shall also include any tax, fee, levy, assessment or charge (i) in substitution of, partially or totally, any tax, fee, levy, assessment or charge hereinabove included within the definition of “real property
tax:” or (ii) the nature of which was hereinbefore included within the definition of “real property tax”, or (iii) which is imposed for a service or right not charged prior to June 1, 1978, or, if previously charged, has been
increased since June 1, 1978, or (iv) which is imposed as a result of a change in ownership, as defined by applicable local statutes for property tax purposes, of the Office Building Project or which is added to a tax or charge hereinbefore included
within the definition of real property tax by reason of such change of ownership, or (v) which is imposed by reason of this transaction, any modifications or changes hereto, or any transfers hereof. 
  
 10.4 Joint Assessment. It the improvements or property, the taxes for
which are to be paid separately by Lessee under Paragraph 10.2 or 10.5 are not separately assessed, Lessee’s portion of that tax shall be equitably determined by Lessor from the respective valuations assigned in the assessor’s work sheets
or such other information (which may include the cost of construction) as may be reasonably available. Lessor’s reasonable determination thereof, in good faith, shall be conclusive. 
  
 10.5 Personal Property Taxes. 
  
 (a) Lessee shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures,
furnishings, equipment and all other personal property of Lessee contained in the Premises or elsewhere. 
  
 (b) If any of Lessee’s said personal property shall be assessed with Lessor’s real property, Lessee shall pay to 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. 
  
 11. Utilities. 
  
 11.1 Services Provided by Lessor. Not applicable, single user building. 
  
 11.2 Services Exclusive to Lessee. Lessee shall pay for all janitorial service, replacement light bulbs and/or
fluorescent tubes, water, gas, heat, light, power, telephone and other utilities and services specially or exclusively supplied and/or metered exclusively to the Premises or to Lessee, together with any taxes thereon. If any such services are not
separately metered to the Premises, Lessee shall pay at Lessor’s option either Lessee’s Share or a reasonable proportion to be determined by Lessor of all charges jointly metered with other premises In the Building. 
  
 11.3 Hours of Service. Not applicable, single user building.

  
 11.4 Excess Usage by Lessee. Lessee shall not make
connection to the utilities except by or through existing outlets and shall not install or use machinery or equipment in or about the Premises that uses excess water, lighting or power, or suffer or permit any act that causes extra burden upon the
utilities or services, including but not limited to security services, over standard office usage for the Office Building Project. Lessor shall require Lessee to reimburse Lessor for any excess expenses or costs that may arise out of a breach of
this subparagraph by Lessee. Lessor may, in its sole discretion, install at Lessee’s expense supplemental equipment and/or separate metering applicable to Lessee’s excess usage or loading. 
  
 11.5 Interruptions. There shall be no abatement of rent and Lessor
shall not be liable in any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor’s reasonable
control or in cooperation with governmental request or directions. 
  
 12.
Assignment and Subletting. 
  
 12.1 Lessor’s
Consent Required. Lessee shall not voluntarily or by operation of law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any pat of Lessee’s Interest in the Lease or in the Premises, without Lessor’s prior
written consent, which Lessor shall not unreasonably withhold. Lessor shall respond to Lessee’s request for consent hereunder in a timely manner and any attempted assignment, transfer, mortgage, encumbrance or subletting without such consent
shall be void, and shall constitute a material default and breach of this Lease without the need for notice to Lessee under paragraph 13.1. “Transfer” within the meaning of this paragraph 12 shall include the transfer or transfers
aggregating: (a) If Lessee is a corporation, more than twenty-five percent (25%) of the voting stock of such corporation, or (b) If Lessee is a partnership, more than twenty five percent (25%) of the profit and loss participation in such
partnership. 
  
 12.2 Lessee Affiliate.
Notwithstanding the provisions of paragraph 12.1 hereof, Lessee may assign or sublet the Premises, or any portion, thereof, without Lessor’s consent, to any corporation which controls, is controlled by or is under common control with Lessee, or
to any corporation resulting from the merger or consolidation with Lessee, or to any person or entity which acquires all the assets of Lessee as a going concern of the business that is being conducted on the Premises, all of which are referred to as
“Lessee Affiliate”; provided that before such assignment shall be effective, (a) said assignee shall assume, in full, the obligations of Lessee under this Lease and (b) Lessor shall be given written notice of such assignment and
assumption. Any such assignment shall not, in any way, affect or limit the liability of Lessee under the terms of this Lease even if after such assignment or subletting the terms of this Lease are materially changed or altered without the consent of
Lessee, the consent of whom shall not be necessary. 
  

									
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 12.3 Terms and Conditions Applicable to Assignment and Subletting. 
  
 a) Regardless of Lessor’s consent, no assignment or
subletting shall release Lessee of Lessee’s obligations hereunder or alter the primary liability of Lessee to pay the rent and other sums due Lessor hereunder including Lessee’s Share of Operating Expense Increase, and to perform all other
obligations to be performed by Lessee hereunder. 
  
 b) Lessor may accept rent from any person other than Lessee pending approval or disapproval of such assignment. 
  
 c) Neither a delay in the approval or disapproval of such assignment or subletting, nor the acceptance of rent, shall Constitute a waiver
or estoppel of Lessor’s right to exercise its remedies for the breach of any of the terms or conditions of this paragraph 12 or this Lease. 
  
 d) If Lessee’s obligations under this Lease have been guaranteed by third parties, then an assignment or sublease, and Lessor’s
consent thereto, shall not be effective unless said guarantors give their written consent to such sublease and the terms thereof. 
  
 e) The consent by 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 said sublease, however, such persons shall not be responsible to the extent any such amendment
or modification enlarges or increases the obligations of the Lessee or sublessee under this Lease or such sublease. 
  
 f) In the event of any default under this Lease, Lessor may proceed directly against Lessee, any guarantors or any one else responsible
for the performance of 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. 
  
 g) Lessor’s written consent to any assignment or
subletting of the Premises by Lessee shall not constitute an acknowledgment that no default then exists under this Lease of the obligations to be performed by Lessee nor shall such consent be deemed a waiver of any then existing default, except as
may be otherwise stated by Lessor at the time. 
  
 h) The discovery of the fact that any financial statement relied upon by Lessor in giving its consent to an assignment or subletting was materially false shall, at Lessor’s election, render Lessor’s said consent null and void.

  
 12.4 Additional Terms and Conditions Applicable to
Subletting. Regardless of Lessor’s consent, 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 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 default shall occur in the performance of Lessee’s obligations under this Lease, Lessee may 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 aid directs any such sublessee upon receipt of a written, notice from Lessor stating that a default exists in the performance of Lessee’s obligations under this Lease,
to pay to Lessor the rents due and to become due under the sublease. Lessee agrees that such sublessee shall have the right to rely upon any such statement and request from Lessor, and that such sublessee shall pay such rents to Lessor without any
obligation or right to Inquire as to whether such default exists and notwithstanding any notice from or claim, from Lessee to the contrary. Lessee shall have no right or claim against said sublessee or Lessor for any such rents so paid by said
sublessee to Lessor. 
  
 b) No sublease entered
into by Lessee shall be effective unless and until it has been approved in writing by Lessor. In entering into any sublease, Lessee shall use only such form of sublessee as is satisfactory to Lessor, and once approved by Lessor, such sublease shall
not be changed or, modified without Lessor’s prior written consent. Any sublease shall, by reason of entering into a sublease under this Lease, be deemed, for the benefit of Lessor, to have assumed and agreed to conform and comply with, each
and every obligation herein to be performed by Lessee other than such obligations as are contrary to or inconsistent with provisions contained in a sublease to which Lessor has expressly consented in writing. 
  
 c) In the event Lessee shall default 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 Lessee under such sublease from the time of the
exercise of said option to the termination of such sublease provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to Lessee or for any other prior defaults of Lessee under such sublease.

  
 d) No sublessee shall further assign or
sublet all or any part of the Premises without Lessor’s prior written consent. 
  
 e) With respect to any subletting to which Lessor has consented, Lessor agrees to deliver a copy of any notice of default by Lessee to the
sublessee. Such sublessee shall have the right to cure a default of Lessee within three (3) days after service of said notice of default upon such sublessee, and the sublessee shall have a right of reimbursement and offset from and against Lessee
for any such defaults cured by the sublessee. 
  
 12.5
Lessor’s Expenses. In the event Lessee shall assign or sublet the Premises or request the consent of Lessor to any assignment or subletting or if Lessee shall request the consent of Lessor for any act Lessee proposes to do then Lessee
shall pay Lessor’s reasonable costs and expenses incurred in connection therewith, including attorneys; architects; engineers’ or other consultants’ fees. 
  
 12.6 Conditions to Consent. Lessor reserves the right to condition any approval to assign or sublet upon
Lessor’s determination that (a) the proposed assignee or sublessee shall conduct a business on the Premises of a quality substantially equal to that of Lessee and consistent with the general character of the other occupants of the Office
Building Project and not in violation of any exclusives or rights then held by other tenants, and (b) the proposed assignee or sublessee be at least as financially responsible as Lessee was expected to be at the, time of the execution of this Lease
or of such assignment or subletting, whichever is greater. 
  
 13. Default;
Remedies. 
  
 13.1 Default. The occurrence of any one or more
of the following events shall constitute a material default of this Lease by Lessee: 
  
 (a) The vacation or abandonment of the Premises by Lessee. Vacation of the Premises stall include the failure to occupy the Premises for a
continuous period of sixty (60) days or more, whether or not the rent is paid. 
  
 (b) The breach by Lessee of any of the covenants, conditions or provisions of paragraphs 7.3(a), (b) or (d) (alterations), 12.1
(assignment or subletting), 13.1 (a) (vacation or abandonment), 13.1(e) (Insolvency), 13.1(f) (false statement), 16(a) (estoppel certificate), 30(b) (subordination), 33 (auctions), or 41.1 (easements), all of which are hereby deemed to be material,
non-curable defaults without the necessity of any notice by Lessor to Lessee thereof. 
  
 (c) The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where
such failure shall continue for a period of three (3) days after written notice thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes such Notice to
Pay Rent or Quit shall also constitute the notice required by this subparagraph. 
  
 (d) The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed
by Lessee other than those referenced in subparagraphs (b) and (c), above, where such failure shall continue 

  

									
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for a period of thirty (30) days after written notice thereof from Lessor to Lessee: provided, however, that if the nature of Lessee’s noncompliance is
such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said thirty (30) day period and thereafter diligently pursues such cure to completion.
To the extent permitted by law, such thirty (30) day notice shall constitute the sole and exclusive notice required to be given to Lessee under applicable Unlawful Detainer statutes. 
  
 (e) (i) The making by Lessee of any general arrangement or general assignment for the benefit of creditors;
(ii) Lessee 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- in the event that any provision of this paragraph
13.1 (e) is contrary to any applicable law, such provision shall be of no force or effect. 
  
 (f) The discovery by Lessor that any financial statement given to Lessor by Lessee, or its successor in interest or by any guarantor of
Lessee’s obligation hereunder, was materially false. 
  
 13.2
Remedies. In the event of any material default or breach of this Lease by Lessee, Lessor may at any time thereafter, with or without notice or demand and without limiting Lessor in the exercise of any right or remedy which Lessor may have by
reason of such default: 
  
 (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 all damages incurred by Lessor by reason of Lessee’s default 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 any real estate commission actually paid; the worth at the time of award by the court having jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the time of
such award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably avoided; that portion of the leasing commission paid by Lessor pursuant to paragraph 15 applicable to the unexpired term of this Lease.

  
 (b) Maintain Lessee’s right to
possession in which case this Lease shall continue in effect whether or not Lessee shall have vacated or abandoned the Premises. In such event Lessor shall be entitled to enforce all of Lessor’s rights and remedies under this Lease, including
the right to recover the rent as it becomes due hereunder. 
  
 (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. Unpaid Installments of rent and other unpaid monetary obligations of
Lessee under the terms of this Lease shall bear interest from the date due at the maximum rate then allowable by law. 
  
 13.3 Default by Lessor. Lessor shall not be in default unless Lessor falls to perform obligations required of Lessor within a reasonable time, but
in no event later than thirty (30) days after written notice by Lessee to Lessor and to the holder of any first mortgage or deed of trust covering the Premises whose name and address shall have theretofore been furnished to Lessee in writing,
specifying wherein Lessor has failed to perform such obligation; provided, however, that it the nature of Lessor’s obligation is such that more than thirty (30) days are required for performance then Lessor shall not be in default if Lessor
commences performance within such 30-day period and thereafter diligently pursues the same to completion. 
  
 13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee to Lessor of Base Rent, Lessee’s Share of Operating Expense increase
or 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 on Lessor by the terms of any mortgage or trust deed covering the Office Building Project. Accordingly, if any installment of Base Rent, Operating Expense Increase, or any other sum due from Lessee shall not be received
by Lessor or Lessor’s designee within ten (10) 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
with respect to such overdue amount, nor prevent Lessor from exercising any of the other rights and remedies granted hereunder. 
  
 14. Condemnation. If the Premises or any portion thereof or the Office Building Project 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 provided that if so
much of the Premises or the Office Building Project are taken by such condemnation as would substantially and adversely affect the operation and profitability of Lessee’s business conducted from the Premises, Lessee shall have the option, to be
exercised only in writing within thirty (30) days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within thirty (30) days after the condemning authority shall have taken possession), to 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 rent and Lessee’s Share of Operating Expense increase shall be reduced in the proportion that the floor area of the Premises taken bears to the total floor area of the Premises. Common Areas taken shall be excluded from the Common
Areas usable by Lessee and no reduction of rent shall occur with respect thereto or by reason -thereof. Lessor shall have the option in its sole discretion to terminate this Lease as of the taking of possession by the condemning authority, by giving
written notice to Lessee of such election within thirty (30) days after receipt of notice of a taking by condemnation of any part of the Premises or the Office Building Project. Any award for the taking of all or any part of the Premises or the
Office Building Project 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 separate award for loss of or damage to Lessee’s trade fixtures, removable personal property and unamortized tenant improvements that
have been paid for by Lessee. For that purpose the cost of such improvements shall be amortized over the original term of this Lease excluding any options. In the event that this Lease is not terminated by reason of such condemnation, Lessor shall
to the extent of severance damages received by Lessor in connection with such condemnation, 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 pay any amount in excess of such severance damages required to complete such repair. 
  
 15. Broker’s Fee. 
  
 (a) The brokers involved in this transaction are Mutual Real Estate Co., David Capron as “listing broker” and Foster & Company, Jerry Johnson as “cooperating broker,” licensed real estate
broker(s). A “cooperating broker” is defined as any broker other than the listing broker entitled to a share of any commission arising under this Lease. Lessor shall pay Four percent (4%) of the total Lease Base Rent consideration to
Foster & Co. on January 2, 2002. A separate fee of Two and one-half percent (2.5%) shall be paid to Mutual Real Estate Co. on January 2, 2002. 
  
 (b) Lessee and Lessor each represent and warrant to the other that neither has had any dealings with any person, firm, broker or finder
(other than the person(s), if any, whose names are set forth in paragraph 15(a), above) in connection with the negotiation of this Lease and/or the consummation of the transaction contemplated hereby, and no other broker or other person, firm or
entity is entitled to any commission or finder’s fee in connection with said transaction and Lessee and Lessor do each hereby indemnity and hold the other harmless from and against any costs, expenses, attorneys’ fees or 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. 
  

									
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 16. Estoppel Certificate. 
  
 a) Each party (as “responding party”) shall at any time upon not less than ten (10) days’
prior written notice from the other party (“requesting party”) execute, acknowledge and deliver to the requesting party a statement in writing (i) certifying that this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect and the date to which the rent and other charges are paid in advance, if any and (ii) acknowledging that there are not, to the
responding party’s knowledge, any uncured defaults on the part of the requesting party, or specifying such defaults __ any are claimed. Any such statement may be conclusively relied upon by any prospective purchaser or encumbrancer of the
Office Building Project or of the business of Lessee. 
  
 b) At the requesting party’s option, the failure to deliver such statement within such time shall be a material default of this Lease by the party who is to respond, without any further, notice to such party, or it shall be conclusive
upon such party that (i) this Lease is in full force and effect, without modification except as may be represented by the requesting party, (ii) there are no uncured. defaults in the requesting party’s performance, and (iii) if Lessor is the
requesting party, not more than one month’s rent has been paid in advance. 
  
 c) If Lessor desires to finance, refinance, or sell the Office Building Project, or any part thereof, Lessee hereby agrees to deliver to
any lender or purchaser designated by Lessor such financial statements of Lessee as may be reasonably required by such lender or purchaser Such statements shall include the past three (3) years’ financial statements of Lessee. 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 only the owner or owners, at the time in question, of the fee title or a
lessee’s interest in a ground lease of the Office Building Project, and except as expressly provided in paragraph 15, in the event of any transfer of such title or interest, Lessor herein named (and in case of any subsequent transfers then the
grantor) shall be relieved from and after the date of such transfer of all liability as respects Lessor’s obligations thereafter to be performed, provided that any funds in the hands of Lessor or the then grantor at the time of such transfer,
in which Lessee has an interest, shall be delivered to the grantee. The obligations contained in this Lease to be performed by Lessor shall, subject as aforesaid, be binding on Lessor’s successors and assigns, only during their respective
periods of ownership. 
  
 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. Except as expressly herein provided, any amount due to Lessor not paid when due shall bear interest at the maximum rate then
allowable by law or judgments from the date due. Payment of such interest shall not excuse or cure any default by Lessee under this Lease-, provided, however, that interest shall not be payable on late charges incurred by Lessee nor on any amounts
upon which late charges are paid by Lessee. 
  
 20. Time of Essence. Time
is of the essence with respect to the obligations to be performed under this Lease. 
  
 21. Additional Rent. All monetary obligations of Lessee to Lessor under the terms of this Lease, including but not limited to Lessee’s Share of Operating Expense increase and any other expenses payable by Lessee hereunder shall
be deemed to be rent. 
  
 22. Incorporation of Prior Agreements;
Amendments. This Lease contains all agreements of the parties with respect to any matter mentioned herein. No prior or contemporaneous agreement or understanding pertaining to any such matter shall be effective. This Lease may be modified
‘In writing only, signed by the parties in interest at the time of the modification. Except as otherwise stated in this Lease, Lessee hereby acknowledges that neither the real estate broker listed in paragraph 15 hereof nor any cooperating
broker on this transaction nor the Lessor or any employee or agents of any of said persons has made any oral or written warranties or representations to Lessee relative to the condition or use by Lessee of the Premises or the Office Building Project
and Lessee acknowledges that Lessee assumes all responsibility regarding the Occupational Safety Health Act, the legal use and adaptability of the Premises and the compliance thereof with all applicable laws and regulations in effect during the term
of this Lease. 
  
 23. Notices. Any notice required or permitted to be
given hereunder shall be in writing and may be given by personal delivery or by certified or registered mail, and shall be deemed sufficiently given if delivered or addressed to Lessee or to Lessor at the address noted below or adjacent to the
signature of the respective parties, as the case may be. Mailed notices shall be deemed given upon actual receipt at the address required, or forty eight hours following deposit in the mail, postage prepaid, whichever first occurs. Either party may
by 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, notice purposes. 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 notice to Lessee. 
  
 24. Waivers. No waiver by Lessor of any provision hereof shall be deemed a waiver of
any other provision hereof or of any subsequent breach by Lessee of the same or any other provision. 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 act by Lessee. The acceptance of rent hereunder by Lessor shall not be a waiver of any preceding breach by Lessee of any provision hereof, other than, the failure of Lessee to pay the particular rent so accepted, regardless of
Lessor’s knowledge of such preceding breach at the time of acceptance of such rent. 
  
 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. 
  
 26. Holding Over. If Lessee, with Lessor’s consent, remains in possession of the
Premises or any part thereof after the expiration of the term hereof, such occupancy shall be a tenancy from month to month upon all the provisions of this Lease pertaining to the obligations of Lessee, except that the rent payable shall be Two
hundred percent (200%) of the rent payable immediately preceding the termination date of this Lease, and all Options, if any, granted under the terms of this Lease shall be deemed terminated and be of no further effect during said month to month
tenancy. 
  
 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. Each provision of this Lease performable by Lessee shall be deemed both a covenant and a condition. 
  
 29. Binding Effect; Choice of Law. Subject to any provisions hereof restricting assignment or subletting by Lessee and subject to the
provisions of paragraph 17, this Lease shall bind the parties, their personal representatives, successors and assigns. This Lease shall be governed by the laws of the State where the Office Building Project is located and any litigation concerning
this Lease between the parties hereto shall be initiated in the county in which the Office Building Project is located. 
  
 30. Subordination. 
  
 (a) This Lease, and any Option or right of first refusal granted hereby, at Lessor’s option, shall be subordinate to any ground
lease, mortgage, deed of trust, or any other hypothecation or security now or hereafter placed upon the Office Building Project and to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements
and extensions thereof. Notwithstanding such subordination, Lessee’s right to quiet possession of the Premises shall not be disturbed if Lessee is not in default and so long as Lessee shall pay the rent and observe and perform all of the
provisions of this Lease, unless this Lease is otherwise terminated pursuant to its terms. If any mortgagee, trustee or ground lessor shall elect to have this Lease and any Options granted hereby prior to the lien of its mortgage, deed of trust or
ground lease, and shall give written notice thereof to Lessee, this Lease and such Options shall be deemed prior to such mortgage, deed of trust or ground lease, whether this Lease or such Options are dated prior or subsequent to the date of said
mortgage, deed of trust or ground lease or the date of recording thereof. 
  

									
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 (b) Lessee agrees to execute any documents required to effectuate an attornment, a
subordination, or to make this Lease or any Option granted herein prior to the lien of any mortgage, deed of trust or ground lease, as the case may be- Lessee’s failure to execute such documents within ten (10) days after written demand shall
constitute a material default by Lessee hereunder without further notice to Lessee or, at Lessor’s option, Lessor shall execute such documents on behalf of Lessee as Lessee’s attorney-in-fact. Lessee does hereby make, constitute and
irrevocably appoint Lessor as Lessee’s attorney-in-fact and in Lessee’s name, place and stead, to execute such documents in accordance with this paragraph 30(b). 
  
 31. Attorneys’ Fees. 
  
 31.1 If either party or the broker(s) named herein bring an action to enforce the terms hereof or declare rights hereunder, the prevailing party in any
such action, trial or appeal thereon, shall be entitled to his reasonable attorneys’ fees to be paid by the losing party as fixed by the court in the same or a separate suit, and whether or not such action is pursued to decision or judgment.
The provisions of this paragraph shall inure to the benefit of the broker named herein who seeks to enforce a right hereunder. 
  
 31.2 The attorneys’ fee 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 good faith. 
  
 31.3
Lessor shall be entitled to reasonable attorneys’ fees and all other costs and expenses incurred in the preparation and service of notice of default and consultations in connection therewith, whether or not a legal transaction is subsequently
commenced in connection with such default. 
  
 32. Lessor’s Access.

  
 32.1 Lessor and Lessor’s agents shall have the right
to enter the Premises at reasonable times for the purpose of inspecting the same, performing any services required of Lessor, showing the same to prospective purchasers, lenders, or lessees, taking such safety measures, erecting such scaffolding or
other necessary structures, making such alterations, repairs, improvements or additions to the Premises or to the Office Building Project as Lessor may reasonably deem necessary or desirable and the erecting, using and maintaining of utilities,
services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect to Lessee’s use of the Premises. Lessor may at any time place on or about the Premises or the Building- any ordinary
“For Sale” signs and Lessor may at any time during the last 120 days of the term hereof place on or about the Premises any ordinary “For Lease” signs. 
  
 32.2 All activities of Lessor pursuant to this paragraph shall be without abatement of rent, nor shall Lessor have any
liability to Lessee for the same. 
  
 32.3 Lessor shall have the
right to retain keys to the Premises and to unlock sit doors in or upon the Premises other than to files, vaults and sates, and in the case of emergency to enter the Premises by any reasonably appropriate means, and any such entry shall not be
deemed a forceable or unlawful entry or detainer of the Premises or an eviction. Lessee waives any charges for damages or injuries or interference with Lessee’s property or business in connection therewith. 
  
 33. Auctions. Lessee shall not conduct, nor permit to be conducted, either voluntarily
or involuntarily, any auction upon the Premises or the Common Areas 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. The holding of any auction on the Premises or Common Areas in violation of this paragraph shall constitute a material default of this Lease. 
  
 34. Signs. Lessee shall not place any sign upon the Premises or the Office Building
Project without Lessor’s prior written consent. Under no circumstances shall Lessee place a sign on any roof of the Office Building Project. 
  
 35. Merger. The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, or a termination by Lessor, shall not work a merger, and
shall, at the option of Lessor, terminate all or any existing subtenancies or may, at the option of Lessor, operate as an assignment to Lessor of any or all of such subtenancies. 
  
 36. Consents. Except for paragraphs 33 (auctions) and 34 (signs) hereof, wherever in this Lease the consent of one party is required
to an act of the other party such consent shall not be unreasonably withheld or delayed- 
  
 37. Guarantor. The Guarantor shall have the same obligations as Lessee under this Lease. 
  
 38. Quiet Possession. Upon Lessee paying the rent for the Premises and observing and performing all of the covenants, conditions and provisions on Lessee’s
part to be observed and performed hereunder, Lessee shall have quiet possession of the Promises for the entire term hereof subject to all of the provisions of this Lease. The individuals executing this Lease on behalf of Lessor represent and warrant
to Lessee that they are fully authorized and legally capable of executing this Lease on behalf of Lessor and that such execution is binding upon all parties holding an ownership interest in the Office Building Project. 
  
 39. Acknowledgements: 
  
 39.1 Lessee hereby acknowledges that Lessor shall have no obligation whatsoever to provide guard service or other security
measures for the benefit of the Premises or the Office Building Project. Lessee assumes all responsibility for the protection of Lessee, its agents, and invitees and the property of Lessee and of Lessee’s agents and invitees from acts of third
parties. Nothing herein contained shall prevent Lessor, at Lessor’s sole option, from providing security protection for the Office Building Project or any part thereof, in which event the cost thereof shall be included within the definition of
Operating Expenses, as set forth in paragraph 4-2(b). 
  
 39.2
Lessor shall have the right to place such signs, notices or displays as Lessor reasonably deems necessary or advisable upon the roof, exterior of the buildings or the Office Building Project or on pole signs in the Common Areas: 
  
 39.3 Lessee shall not: suffer or permit anyone, except in emergency, to go
upon the roof of the Building. 
  
 40. Early Cancellation Option: Lessee
may cancel the last 12 months of this Lease Term by submitting. In writing, its intent to cancel, not less than One hundred twenty (120) days in advance of the 48th month of the term of this Lease, together with payment of Twenty-two thousand dollars ($22,000) to Lessor. 
  
 41. Easements. 
  
 41.1 Lessor reserves to itself the right, from time to time, to grant such easements, rights and dedications that Lessor deems necessary or desirable, 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 shall sign any of the aforementioned
documents upon request of Lessor and failure to do so shall constitute a material default of this Lease by Lessee without the need for further notice to Lessee. 
  

41.2 The obstruction of Lessee’s view, air, or light by any structure erected in the vicinity of the Building, whether by Lessor or third parties,
shall in no way affect this Lease or impose any liability upon Lessor. 
  
 42.
Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one party to the other under the provisions hereof, the party against whom the obligation to pay the money is asserted shall have the
right to make payment “under protest” and such payment shall not be regarded as a voluntary payment, and there shall survive the right on the part of said party to institute suit for recovery of such sum. If it shall be adjudged that there
was no legal obligation on the part of said party to pay such sum or any part thereof, said party shall be entitled to recover such sum or so much thereof as it was not legally required to pay under the provisions of this Lease. 
  
 43. Authority. If Lessee is a corporation, trust, or general or limited partnership,
Lessee, and each individual executing this Lease on behalf of such entity represent and warrant that such individual is duty authorized to execute and deliver this Lease on behalf of said entity. It Lessee is a corporation, trust or partnership,
Lessee shall, within thirty (30) days after execution of this Lease, deliver to Lessor evidence of such authority satisfactory to Lessor. 
  

									
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 44. Conflict. Any conflict between the printed provisions, Exhibits or Addenda of this Lease and the typewritten
or handwritten provisions, it any, shall be controlled by the typewritten or handwritten provisions. 
  
 45. No Offer. Preparation of this Lease try Lessor or Lessor’s agent and submission of same to Lessee shall not be deemed an offer to Lessee to lease. This Lease shall become binding upon Lessor and Lessee
only when fully executed by both parties. 
  
 46. Lender Modification.
Lessee agrees to make such reasonable modifications to this Lease as may be reasonably required by an institutional lender in connection with the obtaining of normal financing or refinancing of the Office Building Project. 
  
 47. Multiple Parties. If more than one person or entity is named as either
Lessor or Lessee herein, except as otherwise expressly provided herein, the obligations of the Lessor or Lessee herein shall be the joint and several responsibility of all persons or entities named herein as such Lessor or Lessee,
respectively. 
  
 48. Improvements to Premises. Lessee shall
be responsible for all design, construction, permits and other functions necessary to complete the tenant improvements (similar to those shown on Exhibit C). Lessee will submit detailed plans and specifications for the work to Lessor for approval or
revision. No unapproved work shall be done. Lessor shall contribute up to a maximum of $20,000.00 toward the total cost of tenant improvements at the time of completion of construction of all tenant approved improvements. This contribution will be
paid directly to the prime contractor performing the work and credited to the Lessees contract with it. Lessor provided, “final lien waiver” must be executed by contractor(s) and returned to Lessor prior to release of payment.

  
 49. Attachments. Attached hereto are the following documents
which constitute a part of this Lease: Exhibit A, B, C, D and E. 
  
 50.
Other. (i) The Premises are a part of an office condominium project (“Office Building Project”). Lessee is subject to all rules, rulings and the Covenants, Conditions and Restrictions (CC&R’s) of the First Edition Office Park
Association (FEOP). Lessee may access the CC&R’s during normal working hours, by appointment, by contacting the manager of the property (or may obtain a copy from County records, or from the manager for $12.00/copy charge). 
  
 (ii) Lessee is responsible for all cost of janitorial service as outlined in the attached
“Janitorial Specifications”. 
  
 LESSOR AND LESSEE HAVE CAREFULLY READ
AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY 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 HAS BEEN FILED IN IT HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE REAL ESTATE BROKER OR
ITS AGENTS OR EMPLOYEES. AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION RELATING THERETO; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THIER OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES
OF THIS LEASE. 
  
 The parties hereto have executed this Lease at the place on the
dates specified above their respective signatures. 
  

									
	LESSOR: Stanley R. and Elise C. Smith Trust	 	 	 	LESSEE: Axsses Tel, Inc.
					
	Signed:	 	 /s/ Stanley R. and Elise C. Smith, Trustee
	 	 	 	Signed:	 	 /s/ Mike Kwon

	 	 	
	 	 	 	 	 	

	 By:
	 	Stanley R. and Elise C. Smith Trust	 	 	 	 By:
	 	 Mike Kwon

	 Title:
	 	 Trustee
	 	 	 	 Title:
	 	 President

	 Date:
	 	 10/25/01
	 	 	 	 Date:
	 	 Illegible

	 Executed at: San Diego, CA
	 	 	 	 Executed at: San Diego, CA

				
	Rent Checks shall be posted to:	 	 	 	 Signed:
	 	 
	 	 	 	 	 	 	 	

	 Stanley R. Smith, Tr.
	 	 	 	 By:
	 	 
	 	 	 	 	 	 	 	

	 PO Box 675503 Rancho Santa Fe, CA 92067
	 	 	 	 Title:
	 	 
	 	 	 	 	 	 	 	

	 Property Manager: Mutual Real Estate Co.
	 	 	 	 Date:
	 	 
	 	 	 	 	 	 	 	

	 Contact:
	 	 David Capron
	 	 	 	 Executed at:
	 	 
	 	 	 	 	 	 	 	 	

	 Address:
	 	 4403 Manchester Av., Ste 204
	 	 	 	 Address:
	 	 
	 	 	 	 	 	 	 	 	

	 	 	 Encinitas, CA 92024
	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	

	 Tel. No.
	 	 (760) 9440050     Fax No. (760) 944-1643
	 	 	 	 Tel. No.
	 	 _______________________Fax No. __________________

  

									
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 [GRAPHIC] 
  

First Edition Office Park 
 Building Project

  
 EXHIBIT A 
  
 OFFICE BUILDING PROJECT SITE 
 and PREMISES LOCATION PLAN 
  

 EXHIBIT B 
  

RULES AND REGULATIONS FOR STANDARD OFFICE LEASE 
  
 Dated: December 15, 2001 by and between: Stanley R. and Elise C. Smith Trust (Lessor) and Mike Kwon, AxessTel, Inc. (Lessee). 
  
 GENERAL RULES 
  
 1. Lessee shall not suffer or permit the obstruction of any Common Areas, including driveways, walkways and stairways. 
  
 2. Lessor reserves the right to refuse access to any persons Lessor in good faith judges to
be a threat to the safety, reputation, or property of the Office Building Project and its occupants. 
  
 3. Lessee shall not make or permit any noise or odors that annoy or interfere with other lessees or persons having business within the Office Building Project. 
  
 4. Lessee shall not keep animals or birds within the Office Building Project, and shall not
bring bicycles, motorcycles or other vehicles into areas not designated as authorized for same. 
  
 5. Lessee shall not make, suffer or permit litter except in appropriate receptacles for that purpose. 
  
 6. Lessee shall not alter any lock or install new or additional locks or bolts, 
  

7. Lessee shall be responsible for the inappropriate use of any toilet rooms, plumbing or other utilities. No foreign substances of any kind are to be inserted
therein. 
  
 8. Lessee shall not deface the walls, partitions or other surfaces of
the premises or Office Building Project. 
  
 9. Lessee shall not suffer or permit
any thing in or around the Premises or Building that causes excessive vibration or floor loading in any part of the Office Building Project. 
  
 10. Furniture, significant freight and equipment shall be moved into or out of the building only with the Lessor’s knowledge and consent, and subject to such
reasonable limitations, techniques and timing, as may be designated by Lessor. Lessee shall be responsible for any damage to the Office Building Project arising from any such activity. 
  
 11. Lessee shall not employ any service or contractor for services or work to be performed in the Building, except as approved by Lessor.

  
 12. Lessee shall be responsible for securely locking any doors and widows..

  
 13. Lessee shall return all keys at the termination of its tenancy and shall
be responsible for the cost of replacing any keys that are lost. 
  
 14. No window
coverings, shades or awnings shall be installed or used by Lessee. 
  
 15. No
Lessee, employee or invitee shall go upon the roof of the Building. 
  
 16. Lessee
shall not suffer or permit smoking or carrying of lighted cigars or cigarettes in areas reasonably designated by Lessor or by applicable governmental agencies as non-smoking areas. 
  
 17. Lessee shall not use any method of heating or air conditioning other than as provided by Lessor. 
  
 18. Lessee shall not install, maintain or operate any vending machines upon the Premises
without Lessor’s written consent. 
  
 19. The Premises shall not be used for
lodging or manufacturing, cooking or food preparation. 
  
 20. Lessee shall comply
with all safety, fire protection and evacuation regulations established by Lessor or any applicable governmental agency. 
  
 21. Lessor reserves the right to waive any one of these rules or regulations, and/or as to any particular Lessee, and any such waiver shall not constitute a waiver of any
other rule or regulation or any subsequent application thereof to such Lessee. 
  
 22. Lessee assumes all risks from theft or vandalism and agrees to keep its Premises locked as may be required. 
  
 23. Lessor reserves the right to make such other reasonable rules and regulations as it may from time to time deem necessary for the appropriate operation and safety of
the Office Building Project and its occupants. Lessee agrees to abide by these and such rules and regulations. 
  
 PARKING RULES 
  
 1. Parking
areas shall be used only for parking by vehicles no longer than full size, passenger automobiles herein called “Permitted Size Vehicles” Vehicles other than Permitted Size Vehicles are herein referred to as “Oversized Vehicles”

  
 2. Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee’s employees, suppliers, shippers, customers, or invitees to be loaded, unloaded, or parked in areas other than those marked “6305” and designated by Lessor for such activities. 
  
 5. Lessor reserves the right to relocate all or a part of parking space location(s), and to
reasonably allocate them between compact and standard size spaces, as long as the same compiles with applicable laws, ordinances and regulations. 
  
 6. Users of the parking area will obey all posted signs and park only in the areas designated for vehicle parking. 
  
 7. Unless otherwise instructed, every person using the parking area is required to park and
lock his own vehicle. Lessor will not be responsible for any damage to vehicles, injury to persons or loss of property, all of which risks are assumed by the party using the parking area. 
  
 8. Validation, if established, will be permissible only by such method or methods as Lessor and/or its licensee may establish at rates
generally applicable to visitor parking. 
  
 9. The maintenance, washing, waxing
or cleaning of vehicles in the parking structure or Common Areas is prohibited. 
  
 10. Lessee shall be responsible for seeing that all of its employees, agents and invitees comply with the applicable parking rules, regulations, laws and agreements. 
  
 11. Lessor reserves the right to modify these rules and/or adopt such other reasonable and non-discriminatory rules and regulations as it
may deem necessary for the proper operation of the parking area. 
  
 12. Such
parking use as is herein provided is intended merely as a license only and no bailment is intended or shall be created hereby. 
  
 EXHIBIT B 
  

 WORK LETTER TO OFFICE LEASE 
  
 Dated: October 15, 2001 
  
 By and between: Stanley R. and Elise C. Smith Trust (“Lessor”) and Mike Kwon (Guarantor), AxssesTel, Inc. (Lessor). 
  
 Improvements to Premises. Lessee shall be responsible for all design, construction,
permits and other functions necessary to complete the signage and tenant improvements conceptually outlined in the preliminary sketch below. Lessee will submit detailed plans and specifications for the work to Lessor for approval or revision. No
unapproved work shall be done. Lessor shall contribute up to a maximum of $20,000.00 toward the total cost of tenant improvements Ten (10) days after completion of construction of all approved tenant improvements and Certificate of Occupancy is
issued by the City of San Diego Building Department. This contribution will be paid directly to the prime contractor performing the work and credited to the Lessees contract with it. Appropriate final lien waiver must be supplied to Lessor prior to
release of payment. 
  
 [GRAPHIC] 
  
 Exhibit C 
  

 Janitorial Specifications 
  
 The following shall represent the minimum level of janitorial service required of Lessee. If, at any time during the Term of the Lease,
Lessor, at Lessor’s sole discretion, determines that the Premises are not maintained to the standard of other buildings in the Project, Lessor may order extra work be done to improve the janitorial maintenance and charge all associated costs to
the Lessee. 
  

	1)	Janitorial services shall be performed Three (3) days per week (unless otherwise noted) during the Term of the Lease. Three times per week service shall include, but not be limited
to the following, including materials: 

  

	2)	Clean rest rooms, kitchen, break room and work rooms: 

  

	 	a)	Refill all paper dispensers; 

  

	 	b)	Wipe all porcelain and hard surfaces; 

  

	 	c)	Mop floors; 

  

	3)	Wax all hard surface floors once per month. 

  

	4)	Vacuum all carpet: 

  

	 	a)	Spot carpet stains as needed (during regular cleaning days), 

  

	 	b)	Shampoo once per year. 

  

	5)	Change all non-operating light fixture lamps. 

  

	6)	Wash glass, ledges, ______ and ___, inside and outside (once each four (4) months). 

  

	7)	Dust horizontal surfaces including blinds, distribution ducks and light fixtures (once each four (4) months). 

  

	8)	Damp wipe, counter and desk-tops (once per week), 

  

	9)	Empty all trash receptacles into dumpstar (provided). 

  
 EXHIBIT D 
  

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