Document:

Exhibit 10.1

 

 

July 24,
2007

 

 

 

Jim
Cruckshank

MathStar

19075
NW Tanasbourne Drive

Hillsboro,
Or 97124

 

Dear
Mr. Cruckshank:

 

Reference
is made to that certain Lease dated June 1, 2005, and as amended September 23,
2005 by and between MARK TANASBOURNE LLC, an Oregon limited liability company,
Landlord and MATHSTAR, a Minnesota corporation, Tenant.

 

This
letter shall serve as an amendment to said Lease and shall change only the
following terms and conditions:

 

	
  PREMISES:

  	
  Effective
  upon substantial completion of the tenant improvements, Suite 290, an
  area of approximately 2,360 rentable square feet, as shown on the attached
  Exhibit A (“Second Expansion Premises”) shall be added to the Premises.

  
	
   

  	
   

  
	
  TENANT’S

  PROPORTIONATE

  SHARE:

  	
  Effective
  upon substantial completion, Tenant’s proportionate share for the Second
  Expansion Premises shall be 3.39% with a Base Year of 2007. The proportionate
  share for the Total Premises shall be 20.65%.

  
	
   

  	
   

  
	
  BASE
  MONTHLY

  RENTAL:

  	
  Effective
  upon substantial completion of the tenant improvements Base Monthly Rental
  for the Second Expansion Premises shall be as follows:

  
	
   

  	
   

  
	
   

  	
   

  	
  Substantial
  compl – 6/30/08

  	
  21.63

  	
  $4,253.90/mo.

  
	
   

  	
   

  	
  7/1/08
  – 6/30/09

  	
  22.68

  	
  $4,460.40/mo.

  
	
   

  	
   

  	
  7/1/09
  – 6/30/10

  	
  22.95

  	
  $4,513.50/mo.

  
	
   

  	
   

  	
  7/1/10
  – 2/28/11

  	
  23.64

  	
  $4,649.20/mo.

  
	
   

  	
   

  	
  3/1/11 – 8/31/11

  	
  24.35

  	
  $4,788.83/mo.

  
	
   

  	
   

  
	
  LEASE
  EXTENSION,

  SUITES 200 AND 210:

  	
  The
  lease of the existing premises, Suites 200 and 210 shall be extended to
  August 31, 2011.

  
	
   

  	
   

  
	
  TENANT

  IMPROVEMENTS

  	
  Landlord
  shall improve the leased premises per the attached Exhibit “B”. Any and
  all other improvements shall be at the sole cost of the Tenant.

  
	
   

  	
   

  
	
  OPTION
  TO TERMINATE

  	
  There
  are no further options to terminate.

  

 

 

111 SOUTHWEST
COLUMBIA, SUITE 1380 · PORTLAND, OREGON 97201 · TELEPHONE: 15031 223-.9203 FAX:(503) 223-4606
www.melvinmark.com

 

CORE
Worldwide Commercial Real Estate Services  · Portland · Seattle · San Francisco · Sacramento · Long Beach · Los Angeles · San Diego · Honolulu ·  Denver

Phoenix ·
Dallas ·
Houston ·
Chicago ·
New York ·
Boston ·
Hartford ·
Baltimore ·
Washington D.C. · Orlando · Atlanta · Toronto · London

 

 

 

MathStar

July
24, 2007

Page
2

 

All
other terms and conditions of said Lease shall remain the same. If the terms of
this Amendment meet with your approval, please sign all copies and return to us
for execution by Mark Tanasbourne LLC, Landlord. We will return one fully
executed copy for each of your files.

 

	
  Thank
  you.

  	
   

  
	
   

  	
   

  
	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ M. James Mark

  	
   

  	
   

  
	
  M. James Mark

  	
   

  
	
  Chief
  Executive Officer

  	
   

  
	
  Melvin
  Mark Companies

  	
   

  
			

 

	
  MARK TANASBOURNE LLC

  	
  MATHSTAR, a Minnesota
  Corporation

  
	
  an Oregon limited liability
  company

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Mark
  Properties Limited Partnership

  
	
   

  	
   

  	
  an
  Oregon limited partnership

  	
  By:

  	
  /s/ James W. Cruckshank

  	
   

  
	
   

  	
   

  	
  Managing
  Member

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Mark
  Management LLC

  	
  Its:

  	
  VP Admin/CFO

  	
   

  
	
   

  	
   

  	
  an
  Oregon limited liability company

  	
   

  	
   

  
	
   

  	
   

  	
  General
  Partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. James Mark

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  M. James Mark

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Manager

  	
   

  	
   

  	
   

  

 

 

MathStar

July
24, 2007

Page
2

 

EXHIBIT A

FLOOR
PLAN

 

 

 

MathStar

July
24, 2007

Page
2

 

EXHIBIT B

CONSTRUCTION
BUDGET SHEET

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MELVIN MARK CONSTRUCTION
  COMPANY

  	
   

  	
   

  
	
   

  	
  CONSTRUCTION BUDGET
  SHEET

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  	
  MathStar

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BUILDING:

  	
  Sunset Center

  	
   

  	
   

  
	
   

  	
  SUITE:

  	
  # 200

  	
   

  	
   

  
	
   

  	
  RSF:

  	
   

  	
  $35.02/rsf

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JOB NO:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ESTIMATE DATE:

  	
  July 16, 2007

  	
   

  	
  revised 07/19/07

  	
   

  
	
   

  	
  PLAN DATE:

  	
  July 3, 2007

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  DESCRIPTION

  	
  QUOTE

  	
  DESCRIPTION

  	
    QUOTE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Demo existing reception
  wall

  	
  75.00

  	
   

  	
  Furnish & install (29) 2X4 light fixtures:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (1) new exit sign, (3) emergency 2X4 

  	
   

  	
   

  	
   

  
	
   

  	
  Demising wall and
  installation

  	
  3,135.00

  	
   

  	
  fixtures; (8) 120 volt duplex outlets;

  	
   

  	
   

  	
   

  
	
   

  	
  New sheetrock partition
  walls w/ Insulation

  	
  6,640.00

  	
   

  	
  (4) light switches; (4) power base

  	
   

  	
   

  	
   

  
	
   

  	
  Exterior shell walls and
  vapor barrier

  	
  1,210.00

  	
   

  	
  feeds; (2) floor feeds; (1) power for

  	
   

  	
   

  	
   

  
	
   

  	
  Carpet protection

  	
  105.00

  	
   

  	
  card reader; VHV power connection;

  	
   

  	
   

  	
   

  
	
   

  	
  Pick up and haul
  materials and clean up 

  	
  736.00

  	
   

  	
  (6) phone/data boxes: fire alarm

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  devices; furnish and install (4) new

  	
   

  	
   

  	
   

  
	
   

  	
  Furnish and install new
  doors, frames and 

  	
   

  	
   

  	
  fluorescent recessed down lights w/

  	
   

  	
   

  	
   

  
	
   

  	
  relites

  	
  7,084.00

  	
   

  	
  dimming ballasts & (2) fluorescent

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  dimmer switches

  	
  15,698.00

  	
   

  	
   

  
	
   

  	
  Install building stock
  ceiling title and grid

  	
  4,486.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  New  duct work, temperature sensors;

  	
   

  	
   

  	
   

  
	
   

  	
  New fire protection
  sprinklers

  	
  3,146.00

  	
   

  	
  Install (i) new VHV cooling unit

  	
  10,475.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Paint walls, doors,
  frames & relite frames

  	
  1,675.00

  	
   

  	
  Furnish &
  install new direct glue

  	
  4,713.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  carpet to match
  existing; floor prep

  	
  106.00

  	
   

  	
   

  
	
   

  	
  (10) exterior &
  (2) interior mini-blinds

  	
  1,560.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  MMC labor

  	
  350.00

  	
   

  	
   

  
	
   

  	
  Furnish &
  Install new 4” rubber base 

  	
  427.00

  	
   

  	
  Construction clean up

  	
  575.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Contingency

  	
  500.00

  	
   

  	
   

  
	
   

  	
  (THIS IS NOT AN INVOICE)

  	
   

  	
   

  	
   

  	
  SUB TOTAL #1

  	
  62,696.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  PERMITS &
  INSPECTIONS

  	
  1,700.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  OVERHEAD & FEE

  	
  9,659.40

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  SUB TOTAL #2

  	
  74,055.40

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ARCHITECT FEE

  	
  1,500.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  DESIGNER FEE

  	
  0.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  TOTAL ESTIMATED COST

  	
  75,555.40

  	
   

  	
   

  
	
   

  	
  CLARIFICATIONS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AUTHORIZATION SIGNATURES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MMCC:

  	
  /s/ David W. Zier

  	
   

  	
  Date:

  	
   

  	
  7/19/07

  	
   

  	
   

  
	
   

  	
   

  	
  David W. Zier, President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  Date:

  	
   

  	
  07/19/07

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THIS WORK IS TO BE PAID FOR BY:

  	
  Tenant

  	
  —

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Owner

  	
  —

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
																								

 

 

	
   

  	
   

  	
   

  

 

 

 

SUNSET CENTER AT TANASBOURNE

 

OFFICE LEASE AGREEMENT

 

 

 

 

Between

 

MARK TANASBOURNE LLC,

an Oregon limited liability company

 

(“Landlord”)

 

 

And

 

 

MATHSTAR,

a Minnesota corporation

 

 

(“Tenant”)

 

 

 

 

Dated: June 1, 2005

 

 

 

	
   

  	
   

  	
   

  

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  SECTION 1
  DEMISE AND PREMISES

  	
  1

  
	
   

  	
  1.1

  	
  Demise

  	
  1

  
	
   

  	
  1.2

  	
  Premises

  	
  1

  
	
   

  	
  1.3

  	
  Commencement
  and Expiration Dates

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  SECTION 2
  RENT

  	
  1

  
	
   

  	
  2.1

  	
  Rents

  	
  1

  
	
   

  	
  2.2

  	
  Base Rent

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  SECTION 3
  ADDITIONAL RENT

  	
  2

  
	
   

  	
  3.1

  	
  Operating
  Expenses

  	
  2

  
	
   

  	
  3.2

  	
  Operating
  Expense Exclusions

  	
  3

  
	
   

  	
  3.3

  	
  Taxes

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  SECTION 4
  PAYMENT OF ADDITIONAL RENT

  	
  3

  
	
   

  	
  4.1

  	
  Written
  Statement of Estimate

  	
  3

  
	
   

  	
  4.2

  	
  Final
  Written Statement

  	
  3

  
	
   

  	
  4.3

  	
  Adjustment
  for Reduced Occupancy

  	
  4

  
	
   

  	
  4.4

  	
  Tenant
  Examination

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  SECTION 5
  SECURITY DEPOSIT

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  SECTION 6
  USE

  	
  4

  
	
   

  	
  6.1

  	
  General

  	
  4

  
	
   

  	
  6.2

  	
  Negative
  Covenants as to Use

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  SECTION 7
  SUBORDINATION

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  SECTION 8
  TRANSFERS BY TENANT

  	
  5

  
	
   

  	
  8.1

  	
  General

  	
  5

  
	
   

  	
  8.2

  	
  Landlord’s
  Option to Recapture Premises

  	
  6

  
	
   

  	
  8.3

  	
  Landlord’s
  Option to Increase Rent

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  SECTION 9
  LIABILITY AND INSURANCE

  	
  6

  
	
   

  	
  9.1

  	
  Waiver of
  Subrogation

  	
  6

  
	
   

  	
  9.2

  	
  Tenant’s
  Insurance

  	
  6

  
	
   

  	
  9.3

  	
  Delivery of
  Policies; Cancellation

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  SECTION 10
  ALTERATIONS

  	
  7

  
	
   

  	
  10.1

  	
  General

  	
  7

  
	
   

  	
  10.2

  	
  Bonds

  	
  7

  
	
   

  	
  10.3

  	
  Permits

  	
  7

  
	
   

  	
  10.4

  	
  Manner

  	
  7

  
	
   

  	
  10.5

  	
  Indemnification
  of Landlord

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  SECTION 11
  LANDLORD’S AND TENANT’S PROPERTY

  	
  8

  
	
   

  	
  11.1

  	
  Landlord’s
  Property

  	
  8

  
	
   

  	
  11.2

  	
  Tenant’s
  Property

  	
  8

  
	
   

  	
  11.3

  	
  Abandonment

  	
  8

  
						

 

 

	
  12.

  	
   

  	
  SECTION 12
  REPAIRS AND MAINTENANCE

  	
  8

  
	
   

  	
  12.1

  	
  Landlord’s
  Obligations

  	
  8

  
	
   

  	
  12.2

  	
  General

  	
  8

  
	
   

  	
  12.3

  	
  Manner

  	
  9

  
	
   

  	
  12.4

  	
  Waiver

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  SECTION 13
  ELECTRIC ENERGY

  	
  9

  
	
   

  	
  13.1

  	
  High Voltage
  Equipment

  	
  9

  
	
   

  	
  13.2

  	
  Cost of
  Increasing Capacity

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  SECTION 14
  CLIMATE CONTROL

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  SECTION 15
  OTHER SERVICES

  	
  10

  
	
   

  	
  15.1

  	
  Elevators

  	
  10

  
	
   

  	
  15.2

  	
  Cleaning

  	
  10

  
	
   

  	
  15.3

  	
  Removal of
  Excess Refuse

  	
  10

  
	
   

  	
  15.4

  	
  Building
  Directory

  	
  10

  
	
   

  	
  15.5

  	
  Signs

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  SECTION 16
  ACCESS

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  SECTION 17
  INDEMNIFICATION

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  SECTION 18
  DAMAGE OR DESTRUCTION

  	
  11

  
	
   

  	
  18.1

  	
  General

  	
  11

  
	
   

  	
  18.2

  	
  Rent
  Abatement

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  SECTION 19
  EMINENT DOMAIN

  	
  12

  
	
   

  	
  19.1

  	
  Total
  Condemnation

  	
  12

  
	
   

  	
  19.2

  	
  Partial
  Condemnation

  	
  12

  
	
   

  	
  19.3

  	
  Effect of
  Termination or Continuation

  	
  12

  
	
   

  	
  19.4

  	
  Award

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  SECTION 20
  SURRENDER

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  SECTION 21
  EVENTS OF DEFAULT

  	
  13

  
	
   

  	
  21.1

  	
  Events of
  Default

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  SECTION 22
  REMEDIES UPON DEFAULT

  	
  13

  
	
   

  	
  22.1

  	
  Remedies

  	
  13

  
	
   

  	
  22.2

  	
  Cumulative
  Remedies

  	
  14

  
	
   

  	
  22.3

  	
  Interest on
  Damages

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  SECTION 23
  CURING TENANT’S DEFAULTS

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  SECTION 24
  BROKER

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
   

  	
  SECTION 25
  NOTICES

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  SECTION 26
  ESTOPPEL CERTIFICATES

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  SECTION 27
  RELOCATION OF PREMISES

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
   

  	
  SECTION 28
  PARKING

  	
  15

  
					

 

 

	
  29.

  	
   

  	
  SECTION 29
  MISCELLANEOUS

  	
  15

  
	
   

  	
  29.1

  	
  Entire
  Agreement

  	
  15

  
	
   

  	
  29.2

  	
  Successors
  and Assigns

  	
  15

  
	
   

  	
  29.3

  	
  Nonrecourse
  Lease

  	
  16

  
	
   

  	
  29.4

  	
  Force
  Majeure

  	
  16

  
	
   

  	
  29.5

  	
  Effect of
  Failure to Consent

  	
  16

  
	
   

  	
  29.6

  	
  Rules and
  Regulations

  	
  16

  
	
   

  	
  29.7

  	
  Tenant
  Holdover

  	
  16

  
	
   

  	
  29.8

  	
  Tenant
  Representations

  	
  16

  
	
   

  	
  29.9

  	
  Non-Waiver

  	
  17

  
	
   

  	
  29.10

  	
  Square
  Footage Calculations Approximate

  	
  17

  
	
   

  	
  29.11

  	
  Time

  	
  17

  
	
   

  	
  29.12

  	
  Late Fees

  	
  17

  
	
   

  	
  29.13

  	
  Attorneys’
  Fees

  	
  17

  
	
   

  	
  29.14

  	
  Quiet
  Enjoyment

  	
  17

  
	
   

  	
  29.15

  	
  Severability

  	
  17

  
	
   

  	
  29.16

  	
  Incorporation
  of Exhibits

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Exhibit A -
  Outline of Premises

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Exhibit A-1
  – Outline of Expansion Space

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Exhibit B-
  Legal Description of Land

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Exhibit C-
  Work Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Exhibit C-1
  - Plan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Exhibit C-2
  – General Specifications for Tenant Improvements

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Exhibit C-3
  – Construction Budget Sheet

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Exhibit D -
  Estoppel Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Exhibit E -
  Rules and Regulations

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Exhibit F-1
  – Monument View 1

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Exhibit F-2
  – Monument View 2

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Addendum to
  Lease

  	
   

  
					

 

 

SUMMARY
OF FUNDAMENTAL PROVISIONS

 

	
  DATED:

  	
  June 1, 2005

  
	
   

  	
   

  
	
  BETWEEN:

  	
  MARK TANASBOURNE LLC, an Oregon limited 

  
	
   

  	
  liability company

  	
  (“Landlord”)

  
	
   

  	
   

  
	
  AND:

  	
  MATHSTAR, a Minnesota
  corporation

  	
  (“Tenant”)

  
	
   

  	
   

  	
   

  
	
  1.

  	
  TERM:

  
	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Estimated
  Commencement Date: July 1, 2005
  (see Section 1.3).

  
	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  Estimated
  Expiration Date: December 31, 2010
  (see Section 1.3).

  
	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  Length
  of Term: Sixty-six (66) months

  
	
   

  	
   

  	
   

  
	
  2.

  	
  BUILDING:
  19075 NW
  Tanasbourne Drive, Hillsboro, Oregon 97124.

  
	
   

  	
   

  
	
  3.

  	
  PROJECT: Sunset Center at Tanasbourne.

  
	
   

  	
   

  
	
  4.

  	
  PREMISES:  6,473
  rentable square feet on the second (2nd) floor(s) of the Building (see
  Exhibit “A”).

  
	
   

  	
   

  
	
  5.

  	
  BASE
  RENT:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Annual Rate Per

  	
   

  	
   

  	
   

  
	
   

  	
  Months

  	
   

  	
   

  	
  Rentable Square Foot

  	
   

  	
  Monthly Base Rent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Commencement
  Date

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  through
  6th month

  	
   

  	
  $21.00

  	
   

  	
  Abated

  	
   

  
	
   

  	
  7th month – 18th month

  	
   

  	
  $21.00

  	
   

  	
  $11,327.75

  	
   

  
	
    

  	
  19th month – 30th month

  	
   

  	
  $21.63

  	
   

  	
  $11,667.58

  	
   

  
	
   

  	
  31st month – 42nd month

  	
   

  	
  $22.28

  	
   

  	
  $12,018.20

  	
   

  
	
   

  	
  43rd month – 54th month

  	
   

  	
  $22.95

  	
   

  	
  $12,379.61

  	
   

  
	
   

  	
  55th month – 66th mouth

  	
   

  	
  $23.64

  	
   

  	
  $12,751.81

  	
   

  
	
   

  	
   

  
	
  6.

  	
  SECURITY
  DEPOSIT: $12,751.81
  (see Section 5).

  
	
   

  	
   

  
	
  7.

  	
  TENANT’S
  PROPORTIONATE SHARE OF OPERATING EXPENSES AND OF TAXES: 9.3 percent (see Section 3 and
  Section 4).

  
	
   

  	
   

  
	
  8.

  	
  BASE
  YEAR: 2005

  
	
   

  	
   

  
	
  9.

  	
  USE
  OF PREMISES: Office
  Use.

  
	
   

  	
   

  
	
  10.

  	
  PARKING
  SPACES: 1 space for every 250 rentable square feet of leased Premises.

  
	
   

  	
   

  
	
  11.

  	
  NOTICE
  ADDRESSES:

  
	
   

  	
   

  	
   

  
	
   

  	
  Landlord:

  	
  Mark
  Tanasbourne LLC

  
	
   

  	
   

  	
  c/o
  Melvin Mark Brokerage Company

  
	
   

  	
   

  	
  111
  SW Columbia Street, Suite 1380 

  
	
   

  	
   

  	
  Portland,
  OR 97201

  
												

 

 

	
   

  	
  Tenant:

  	
  MathStar,
  a Minnesota corporation

  
	
   

  	
   

  	
  19075
  NW Tanasbourne Drive, Suite 200

  
	
   

  	
   

  	
  Hillsboro,
  OR 97124

  

 

	
  12.

  	
  LANDLORD’S
  BROKER:

  	
  M.
  James Mark, Melvin
  Mark Brokerage Company

  
	
   

  	
   

  	
   

  
	
  13.

  	
  TENANT’S
  BROKER:

  	
  Gordon
  King, Colliers International

  

 

 

OFFICE
LEASE AGREEMENT

 

	
  DATED:

  	
   

  	
  May 18,
  2005

  
	
   

  	
   

  	
   

  
	
  BETWEEN:

  	
   

  	
  MARK
  TANASBOURNE, LLC,
  an Oregon limited

  
	
   

  	
   

  	
  liability
  company

  	
  (“Landlord”)

  
	
   

  	
   

  	
   

  
	
  AND:

  	
   

  	
  MathStar,
  a Minnesota corporation (“Tenant”)

  
	
   

  	
   

  	
   

  

 

SECTION 1                           DEMISE AND PREMISES

 

1.1                               Demise

 

Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord, upon the terms
and conditions set forth in this Lease, the Premises described in Section 1.2
in the Building described in the Summary of Fundamental Provisions (the “Building”).
The Building is located upon the land described on the attached Exhibit B
(the “Land”). The Land, the Building, and all other improvements on the Land
whether now in existence or constructed during the term of this Lease are part
of Sunset Center at Tanasbourne (the “Project”).

 

1.2                               Premises

 

The
Premises (the “Premises”) leased to Tenant are identified by the outlining on
the floor plan(s) attached as Exhibit A and are described in the
Summary of Fundamental Provisions.

 

1.3                               Commencement and Expiration Dates

 

The
term of this Lease shall commence on the earlier of (a) the date on which
Tenant takes possession of the Premises or (b) the date on which Landlord’s
work, if any, in the Premises as described in the Work Agreement attached as Exhibit C
to the Lease (“Landlord’s Work”) is substantially completed. If Landlord is
unable to give possession of the Premises on the estimated commencement date
set forth in the Summary of Fundamental Provisions, Landlord shall not be
subject to any liability, and the validity of this Lease shall not be impaired
under such circumstances, but Base Rent and Additional Rent shall be abated
(provided Tenant is not responsible for the delay) until Landlord has given
notice to Tenant that the Premises are ready for Tenant’s possession. If
Landlord has given Tenant permission to take possession of the Premises prior
to the date on which Landlord’s Work is substantially completed, such
possession shall be deemed to be upon all the terms, covenants, conditions and
provisions of this Lease, including, without limitation, the payment of Base
Rent and the Additional Rent. The term of this Lease shall expire, unless
sooner terminated pursuant to the provisions of this Lease, sixty-six (66) months after the Commencement Date (the “Expiration
Date”).

 

SECTION 2                           RENT

 

2.1                               Rents

 

Tenant
agrees to pay to Landlord rent consisting of Base Rent and Additional Rent
described in Section 3 of this Lease (which may, along with all other sums
which become payable to Landlord by Tenant, be referred to in this Lease as “Rents”).
All Rents shall be paid in advance on the first day of each month unless
otherwise expressly provided in this Lease. All Rents shall be paid in lawful
money of the United States to Landlord at its office set forth in the Summary
of Fundamental Provisions, or such other place as Landlord shall designate by
written notice to Tenant. Tenant shall pay all Rents promptly when due without
notice or demand therefor and without any abatement, deduction or setoff, for
any reason whatsoever, except as may be expressly provided in this Lease. If
the Commencement Date occurs on a day other than the first day of a calendar
month, the Rents for that partial calendar month shall be prorated based on the
number of days in such month.

 

2.2                               Base Rent

 

The
Base Rent shall be as set forth in the Summary of Fundamental Provisions.

 

 

1

 

SECTION 3                           ADDITIONAL RENT

 

3.1                               Operating Expenses

 

Tenant
agrees to pay its Proportionate Share of all increases in Operating Expenses in
excess of those incurred by Landlord during the Base Year. Tenant’s
Proportionate Share of Operating Expenses is set forth in the Summary of
Fundamental Provisions and is determined by dividing the number of rentable
square feet in the Premises by the number of rentable square feet in the
Building. The term “Operating Expenses” shall mean all costs, fees, and
expenses paid or incurred by Landlord or on Landlord’s behalf as determined by
Landlord to be necessary or appropriate for the efficient operation, maintenance,
repair, replacement, management, administration and insurance of the Project
and the curbs, sidewalks, common areas, parking garage, and plazas adjoining
the Project, except for Taxes which shall be paid in accordance with Sections
3.3 and 4 below. Operating Expenses include, without limitation, the following:

 

3.1.1                        Salaries, wages, medical, insurance, union
and general welfare benefits, pension payments, payroll taxes, worker’s
compensation insurance, uniforms and related expenses and benefits of persons
engaged in the repair, operation, maintenance, management, administration,
engineering and security of the Project;

 

3.1.2                        All expenses incurred for gas, electricity,
heat, ventilation, air-conditioning, water, sewer, garbage and waste disposal,
recycling, elevator service and other services or utilities furnished to the
Project, together with any taxes thereon;

 

3.1.3                        All maintenance, repair, and replacement
costs relating to the Project including, but not limited to, the public and
service areas of the Project including, but not limited to, sidewalks,
landscaping, parking, service areas, mechanical rooms and improvement
exteriors;

 

3.1.4                        The cost of all insurance charges, including
but not limited to rent loss insurance, casualty, liability, fire with extended
coverage endorsement, and other insurance covering the Project;

 

3.1.5                        The cost or rental of all supplies, including
without limitation, cleaning supplies, light bulbs, tubes and ballasts,
materials and equipment, and all taxes thereon;

 

3.1.6                        The cost of hand tools and other moveable
equipment used in the repair, maintenance or operation of the Project;

 

3.1.7                        The cost of all charges for window and other
cleaning, janitorial and security services;

 

3.1.8                        Charges of independent contractors performing
repairs or services to the Project not otherwise charged to a specific tenant;

 

3.1.9                        Repairs, replacements and general maintenance
made by Landlord or on Landlord’s behalf;

 

3.1.10                  Alterations and improvements to the Project
made by reason of the laws and requirements of any public authorities or the
requirements of insurance bodies;

 

3.1.11                  Management fees paid to a third party, or, if
no managing agent is employed by Landlord, Landlord shall be entitled to charge
a management fee which is not in excess of the then-prevailing rates for
management fees of other first-class office projects in the Portland, Oregon
metropolitan area;

 

3.1.12                  The costs of any capital improvements or
repairs to the Project and/or of any machinery or equipment installed in the Project
amortized over the useful life of the improvements, machinery and/or equipment
as estimated by Landlord, which is made or becomes operational, as the case may
be, after the completion of the initial construction of the Building.

 

 

2

 

3.1.13                  The rental costs or rental value of the
management offices serving the Project;

 

3.1.14                Legal, accounting and other professional fees
incurred in connection with operation, maintenance and management of the
Project; and

 

3.1.15                  All other charges properly allocable to the
operation of the Project in accordance with standard real estate accounting
practices in the Portland, Oregon metropolitan area.

 

3.2                               Operating Expense Exclusions

 

The
following expenses shall be excluded front Operating Expenses: (a) depreciation
or amortization on the initial construction of the Project; (b) debt
service (including without limitation, interest, principal and any impound
payments) required to be made on any mortgage or deed of trust recorded with
respect to the Project; (c) rent on any ground lease; (d) the cost of
leasehold improvements made for Tenant or any tenants of the Project; (e) leasing
commissions, attorneys’ fees, costs and disbursements and other expenses
(including advertising) incurred in connection with leasing, renovating, or
improving space for tenants or other occupants of the Project; (f) repairs,
replacements, alterations and general maintenance paid for by insurance
proceeds or by Tenant or third parties; and (g) specific costs incurred
for the account of, or separately billed to and paid by, specific tenants of
the Project.

 

3.3                               Taxes

 

Tenant
agrees to pay its Proportionate Share of all increases in Taxes (as defined
below) in excess of the Taxes payable by Landlord during the Base Year. Tenant’s
Proportionate Share of Taxes shall be the same as Tenant’s Proportionate Share
of Operating Expenses, as provided in Section 3.1 of this Lease. “Taxes”
shall mean all taxes and assessments of all public, quasi-public, and governmental
authorities and owner associations against the Project or the ownership,
management, or operation of the Project, all rent taxes, local improvement
districts, special and general assessments, gross receipts taxes, taxes on
Landlord’s interest under this Lease, all taxes in lieu of or in addition to
the foregoing, whether or not such taxes are now in effect (excluding, however,
any tax based upon Landlord’s net income and any inheritance taxes), and the
cost of contesting any such taxes or assessments.

 

SECTION 4                           PAYMENT OF ADDITIONAL RENT

 

4.1                               Written Statement of Estimate

 

Prior
to the beginning of each calendar year during the term of this Lease after the
Base Year, or as soon thereafter as practical, Landlord shall furnish Tenant
with a written statement setting forth Tenant’s Proportionate Share of the
increase in the estimated Operating Expenses and Taxes for the next calendar
year. Failure of Landlord to deliver the statement of estimated Operating
Expenses and Taxes shall not relieve Tenant of its obligation to pay Tenant’s
Proportionate Share of Operating Expenses and Taxes. Tenant shall each month
pay to Landlord as Additional Rent an amount equal to Tenant’s Proportionate
Share as shown in Landlord’s written statement.

 

4.2                               Final Written Statement

 

Within
ninety (90) days after the close of each calendar year after the Base Year
during the term of this Lease, or as soon thereafter as practical, Landlord
shall deliver to Tenant a written statement (the “Operating Statement”) setting
forth Tenant’s actual Proportionate Share of the increases, if any, in
Operating Expenses and of the Taxes for the preceding calendar year over the
Base Year. In the event Tenant’s share of the actual Operating Expenses is in
excess of the amount actually paid by Tenant for Operating Expenses on an
estimated basis for the year in question, Tenant shall pay the amount of such
deficiency to Landlord within thirty (30) days following the date of such
statement. In the event Tenant’s share of actual Operating Expenses is less
than the amount actually paid by Tenant for Operating Expenses on an estimated
basis for the year in question, then Landlord shall either apply the
overpayment to Tenant’s next Rent payment, or promptly reimburse the excess to
Tenant. In the event Tenant’s share of the actual Taxes is in excess of the
amount actually paid by Tenant for Taxes on an estimated basis for the year in
question, Tenant shall pay the amount of such deficiency to Landlord within
thirty (30) days following

 

 

3

 

the
date of such statement. In the event Tenant’s share of actual Taxes is less
than the amount actually paid by Tenant for Taxes on an estimated basis for the
year in question, then Landlord shall either apply the overpayment to Tenant’s
next Rent payment, or promptly reimburse the excess to Tenant. In no event
shall Base Rent decrease pursuant to the provisions of Section 3 or Section 4
of this Lease.

 

4.3                               Adjustment for Reduced Occupancy

 

If
during any calendar year, less than 95 percent of the rentable area of the
Building is occupied, Landlord’s estimation and determination of Operating
Expenses shall be based on Landlord’s estimate of Operating Expenses as if the
Building were at least 95 percent occupied. Landlord shall use sound accounting
and management principles to make appropriate adjustments in occupancy-related
Operating Expenses for the year in question for the purpose of avoiding
distortion in the amount of Operating Expenses by reason of variation in the total
occupancy of the Building. The amount so determined by Landlord shall be deemed
to be the Operating Expenses for the Building for the year in question.

 

4.4                               Tenant Examination

 

Any
objections by Tenant to the Operating Statement shall be made in writing given
to Landlord within 60 days after the Operating Statement is submitted to
Tenant. If no objections are made within such time period, the Operating
Statement shall be conclusive and binding on Tenant. If Tenant makes any such
objection within the time period required by this Section 4.4, Tenant
shall have the right to inspect, at Tenant’s sole cost and expense, Landlord’s
records pertaining to the computation of Operating Expenses and Taxes, so long
as the following provisions are complied with: (a) Tenant shall perform
such inspection within 75 days following the receipt of the Operating Statement
pertaining to the year in question, (b) Tenant shall provide to Landlord a
copy of the inspection report, (c) Tenant shall keep the report
confidential and shall not share the contents, results, or the fact that Tenant
is investigating the Operating Expenses or the Taxes, or adjustments with any
other person, except for its advisors on a need-to-know basis, and (d) Tenant
shall pay to Landlord within ten (10) days following its inspection any
amount determined to be owing by Tenant. Tenant’s inspection may only be
conducted by Tenant’s employees, advisors or by Tenant’s certified public
accountant paid on an hourly basis (and not a contingent fee basis). Landlord
agrees to pay Tenant any amount determined to be owing to Tenant within ten (10) days
following Landlord’s receipt of the inspection report or, if Landlord does not
agree with Tenant’s inspection report, as determined by an independent
certified public accountant within ten (10) days following the date on
which a report by such independent certified public accountant is given to
Landlord and Tenant. Such independent certified public accountant shall be
selected by Landlord and approved in advance by Tenant, which approval shall
not be unreasonably withheld.

 

SECTION 5                        SECURITY DEPOSIT

 

Tenant
has deposited with Landlord the sum shown on the Summary of Fundamental
Provisions as security for the full and faithful performance by Tenant of
Tenant’s obligations under this Lease. The security deposit shall not earn
interest, and shall not be considered an advance payment of rent or a measure
of Landlord’s damages in the event of a default by Tenant. If Tenant defaults
in the performance of any of Tenant’s obligations under this Lease, including
the payment of Rents, Landlord may, but shall not be obligated to, use, apply
or retain all or any part of the security deposit to the extent required for
the payment of any sum in default. If Landlord shall so use, apply or retain
all or any part of the security deposit, Tenant shall upon demand immediately
deposit with Landlord a sum equal to the amount so used, applied or retained.
If Tenant shall fully and faithfully comply with all of Tenant’s obligations
under this Lease, the security deposit or any balance thereof shall be paid to
Tenant within thirty (30) days after the date on which this Lease shall expire
or sooner terminate, and after delivery to Landlord of possession of the
Premises and after all payments required to be made by Tenant in this Lease,
have been paid.

 

SECTION 6                      USE

 

6.1                               General

 

Tenant
shall use and occupy the Premises continuously during the term of
this Lease for general office use and for no other purpose without the prior
written consent of Landlord. If any governmental license or

 

 

4

 

permit
shall be required for the proper and lawful conduct of Tenant’s business in the
Premises, Tenant, at its expense, shall procure, maintain and comply with the
terms and conditions of each such license or permit. Tenant shall, at Tenant’s
expense, comply with all laws, codes, rules, statutes, regulations, orders and
other requirements of public authorities (“Laws”) relating to Tenant’s use and
occupancy of the Premises.

 

6.2                               Negative Covenants as to Use

 

Tenant
shall not, without the prior written consent of Landlord, use any apparatus,
machinery or device in or about the Premises which will cause any noise,
vibration, fumes or electronic interference or which will overload the floors
or structure of the Premises. Tenant shall not at any time use or occupy, or
suffer or permit anyone to use or occupy the Premises, or permit anything to be
done in the Premises, in any manner which:(a) violates the Certificate of
Occupancy for the Premises or for the Building; or (b) causes or is liable
to cause injury to the Premises or the Building or any equipment, facilities or
systems therein; or (c) constitutes a violation of Laws or the
requirements of insurance bodies; or (d) impairs or tends to impair the
character, reputation or appearance of the Building as a first-class office
building; or (e) impairs or tends to impair the proper and economic
maintenance, operation and repair of the Building and/or its equipment,
facilities or systems; or (f) annoys or inconveniences or tends to annoy
or inconvenience other tenants or occupants of the Project; or (g) generates,
releases, stores, or deposits on or about the Premises any environmentally
hazardous or toxic substances, materials, wastes, pollutants, oils, or
contaminants, as defined by any Law.

 

SECTION 7                           SUBORDINATION

 

This
Lease, and all rights of Tenants hereunder, are and shall be subject and
subordinate to any ground leases or master leases (“Master Leases”) covering
the Land and/or the Building now or hereafter existing, and to all mortgages,
trust deeds and other financing and security instruments (“Mortgages”), which
may now or hereafter affect the Land and/or the Building, and to all renewals,
modifications, replacements and extensions of such Master Leases and Mortgages.
This Section shall be self-operative, and no further instrument of
subordination shall be required. In confirmation of such subordination, Tenant
shall execute, acknowledge and deliver to Landlord any instrument that Landlord
may reasonably request to evidence such subordination within ten days after a
request therefor. If the interest of Landlord under this Lease is transferred,
whether through possession, foreclosure or delivery of a new lease or deed, then
Tenant shall recognize the party succeeding to Landlord’s rights and obligations
(the “Successor Landlord”) as the Landlord under this Lease and shall promptly
execute and deliver any instrument that such Successor Landlord may reasonably
request to evidence such attornment. Upon such attornment, Tenant’s rights
hereunder shall continue in full force and effect as a direct Lease between the
Successor Landlord and Tenant upon all of the terms, conditions and covenants
as set forth in this Lease so long as Tenant is not in default. Landlord shall use commercially reasonable effort to obtain customary nondisturbance
agreements from holders of encumbrances in the building.

 

SECTION 8                           TRANSFERS BY TENANT 

 

8.1                               General

 

Tenant
shall not assign this Lease or any interest therein, or sublet the Premises or
any part thereof, or mortgage, encumber or otherwise transfer or dispose of
Tenant’s interest in the Premises, either voluntarily or involuntarily, without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed. If Tenant requests consent
to a proposed transfer, Tenant shall pay for Landlord’s reasonable legal and
administrative expenses incurred in reviewing the request for consent to
transfer. Consent to one such transfer shall not imply any future consent, and
all subsequent transfers shall be made only upon obtaining prior written
consent of Landlord. Assignees shall become directly liable to Landlord for all
obligations of Tenant hereunder, but Tenant shall remain liable for all
obligations under this Lease. Tenant agrees that the instrument by which any
transfer consented to by Landlord is accomplished shall expressly provide that
the transferee will perform and observe all the agreements, covenants,
conditions and provisions to be performed and observed by Tenant under this
Lease and that Landlord will have the right to enforce such agreements,
covenants and conditions directly against such transferee. It shall be the
responsibility of Tenant to provide Landlord, in a manner reasonably acceptable
to Landlord, with such information as Landlord determines is necessary for
Landlord to grant or withhold its consent. Landlord may withhold its consent if
the proposed transferee fails to satisfy the criteria then generally (but not
necessarily

 

 

5

 

uniformly)
used by Landlord in selecting new tenants, which criteria may include, without
limitation, financial capability, business reputation, business experience, existing
and future space requirements of other tenants,
existing and future space requirements of the proposed transferee, the intended use, and the anticipated demand
for services by the transferee., and the transferee’s anticipated
contribution to the prestige of the Project. Landlord shall not be obligated
to approve a transfer to an existing Project tenant or another party with whom
Landlord has been negotiating to lease space in the Project. If Tenant is a corporation
or other entity, then any merger, consolidation, liquidation, change in the
ownership or power to vote the majority of voting stock or equity interests of
tenant shall constitute a transfer for the purposes of this Section 8.

 

8.2                               Landlord’s Option to
Recapture Premises

 

Tenant
shall, together with any request for Landlord’s consent to assign this Lease or
to sublet the Premises, or any part thereof, offer to Landlord the right to
recapture all or any part of the Premises which Tenant desires to assign or
sublet. Landlord shall have fifteen (15) thirty (30) days following receipt of Tenant’s notice to
make an election to recapture under this Section 8.2. Landlord may
require Tenant to assign or sublease to Landlord all or any portion of the
Premises Tenant desires to assign or sublease. In the event Landlord shall
elect to recapture all or any portion of the Premises, Base Rent shall be
reduced by a fraction the numerator of which is the Net Rentable area of that
portion of the Premises being recaptured by Landlord and the denominator of
which is the total Net Rentable area of the Premises.

 

8.3                               Landlord’s Option to
Increase Rent

 

In
the event Landlord consents to Tenant’s proposed transfer, Landlord, at its
option, may require Tenant to pay, when paid by the transferee to Tenant, the
following sums which shall be added to and included in Base  Rent: all of any rents, additional charges or other consideration
payable pursuant to the transfer to Tenant (including all sums payable for the
sale or rental of Tenant’s leasehold improvements or fixtures but
reduced by any marketing expenses paid to third parties incurred in connection
with relating the Premises or any portion thereof) by the transferee which are
in excess of the Base Rent and Additional Rent payable by Tenant with respect
to the space in question pursuant to the terms of this Lease. The sums payable
under Section 8.3 shall be paid to Landlord as and when paid by the
transferee to Tenant.

 

SECTION 9                           LIABILITY AND INSURANCE 

 

9.1                               Waiver of Subrogation

 

Tenant
and Landlord shall each secure appropriate clauses in, or endorsements upon,
each insurance policy obtained by them which cover or are applicable to the
Premises or the personal property, fixtures and equipment located therein,
pursuant to which the insurance companies waive subrogation or permit the
insureds, prior to any loss, to agree with a third party to waive any claim
they might have against said third party without invalidating the coverage
under the insurance policies. Tenant’s waiver of subrogation or permission for
waiver of any claim shall extend to Landlord and its agents and employees.
Landlord’s waiver of subrogation or permission of waiver of any claim shall
extend to Tenant and its agents and employees. Tenant and Landlord hereby
release each other and their respective agents and employees in respect of any
claim which they might otherwise have against each other or their respective
agents or employees for loss, damage or other casualty occurring during the
term of this Lease and covered under a fire insurance policy with extended coverage
endorsement in the form normally used in respect of similar property in the
Portland, Oregon, metropolitan area.

 

9.2                               Tenant’s Insurance

 

Tenant, at its expense, shall procure and maintain at all times during the term of
this Lease, commercial general liability insurance in respect of the Premises
and the conduct or operation of business therein, with Landlord and its
managing agent, if any, and any party to a Master Lease or any Mortgagee whose
name and address shall previously have been furnished to Tenant, as additional
named insureds, with limits of not less than $2,000,000 for bodily injury or
death to any one person and $3,000,000 for bodily injury or death to any number
of persons in any one occurrence, and $2,000,000 for property damage. All such
insurance shall insure the performance by Tenant of the indemnity agreement as
to liability for injury to, illness of, or death of persons and

 

 

6

 

damage
to property set forth in this Lease. Tenant shall maintain at Tenant’s expense,
insurance with extended coverage endorsement covering Tenant’s Property as
defined in Section 11.2 of this Lease.

 

9.3                               Delivery of Policies;
Cancellation

 

Tenant
shall deliver to Landlord and any additional named insureds evidence of the
policies or certificates of insurance required by Section 9.2 in a form
reasonably satisfactory to Landlord issued by an insurance company authorized
to issue insurance in the State of Oregon, at least ten (10) days before
the Commencement Date. Tenant shall procure and pay for renewals of such
insurance prior to the time for the expiration of such policies, and Tenant
shall deliver to Landlord and any additional named insureds evidence of such
renewal policies at least thirty (30) days before the expiration of any
existing policy. All such policies shall contain a provision whereby the
policies cannot be canceled or modified unless Landlord and any additional
named insureds are given at least thirty (30) days prior written notice of such
cancellation or modification.

 

SECTION 10                    ALTERATIONS

 

10.1                         General

 

Except
for any initial improvements which Landlord has expressly agreed to provide
pursuant to the attached Exhibit C, Tenant is leasing the Premises “AS IS”
on the date of this Lease. Tenant shall make no changes, additions, alterations
or improvements to the Premises, or attach any fixtures or equipment (the “Alterations”)
without the prior written consent of Landlord. Before proceeding with any
Alterations, Tenant shall submit to Landlord for Landlord’s approval, plans and
specifications for the proposed work to be done. Tenant shall not proceed with
such work until Tenant obtains Landlord’s approval. Tenant shall pay to
Landlord upon demand the cost and expense incurred by Landlord in reviewing or
having reviewed, said plans and specifications, and inspecting the Alterations
to determine whether the same are being performed in accordance with the
approved plans and specifications and all Laws including, without limitation,
the reasonable fees of any architect or engineer employed by Landlord for such
purpose.

 

10.2                         Bonds

 

Before
proceeding with any approved Alterations, at Landlord’s request, Tenant shall
obtain and deliver to Landlord a performance bond and labor and materials
payment bond (issued by a corporate surety licensed to do business in the State of Oregon), each in an amount equal to the
estimated cost of the Alterations and in form satisfactory to Landlord.

 

10.3                           Permits

 

Tenant,
at its expense, shall obtain all necessary governmental permits and
certificates for the commencement and prosecution of the Alterations and for
final approval thereof upon completion, and shall cause the Alterations to be
performed in compliance with all such permits and certificates, applicable Laws
and all applicable requirements of insurance.

 

10.4                         Manner

 

The
Alterations shall, at Landlord’s option, be performed by Landlord or by
contractors designated or first approved by Landlord, which approval shall not
be unreasonably withheld. Tenant shall pay any construction supervision fees
charged by Landlord or its construction supervision to supervise any such work.
The Alterations shall be performed in such manner as not to interfere with or
delay, and as not to impose any additional expense upon, Landlord in the construction,
maintenance, repair or operation of the Project; and if any such additional
expense shall be incurred by Landlord as a result of Tenant’s performance of
the Alterations, Tenant shall pay such additional expense upon demand. In
performing the Alterations, Tenant shall fully and promptly comply with and
observe the Rules and Regulations of Landlord then in force with respect
to the making of the Alterations.

 

 

7

 

10.5                         Indemnification of Landlord

 

Tenant,
at its expense, shall procure the cancellation or discharge of all notices of
violation and/or liens arising from or otherwise connected with the
Alterations, or any other work, labor, services or materials done for or
supplied to Tenant, or any other person claiming through or under Tenant.
Tenant shall defend, indemnify and save harmless Landlord and any Master Lessor
and Mortgagee from and against any and all mechanics and other liens and
encumbrances filed in connection with the Alterations, or any other work,
labor, services or materials done for or supplied to Tenant, or any person
claiming through or under Tenant. Tenant, at its expense, shall procure the
satisfaction or discharge of record of all such liens and encumbrances of
record within fifteen (15) days after the filing thereof.

 

SECTION 11                    LANDLORD’S AND TENANT’S
PROPERTY

 

11.1                         Landlord’s Property

 

All fixtures,  equipment, improvements, wires, cables,
conduits and appurtenances attached to or built into the Premises, whether or
not by or at the expense of Tenant, shall be and remain a part of the Premises,
shall be deemed the property of Landlord and shall not be removed by Tenant,
except as provided in Section 11.2; and except that, at Landlord’s written
request, Tenant shall, at its sole expense upon termination of the Lease,
remove those items specified by Landlord, which are deemed herein the property
of Landlord, except for Building Standard office improvements which are
installed as part of Landlord’s Work which Tenant shall not be required to
remove.

 

11.2                         Tenant’s Property

 

All
unattached business and trade fixtures, machinery and equipment, communications
equipment and office equipment which are installed in the Premises by or for
the account of Tenant without expense to Landlord and which can be removed
without structural damage to the Building and all furniture, furnishings
(excluding window coverings) and other articles of movable personal property
owned by Tenant and located in the Premises (“Tenant’s Property”) shall be and
remain the property of Tenant, may be removed by Tenant at any time during the
term of this Lease, and shall be removed prior to the Expiration Date, or
earlier termination date, of this Lease; provided, that if any of Tenant’s
Property is removed, Tenant shall repair or pay the cost of repairing any
damage to the Premises or to the Project resulting from the installation and/or
removal thereof.

 

11.3                         Abandonment

 

Any items of Tenant’s Property which shall remain in the Premises after the
Expiration Date of this Lease, or any earlier termination of this Lease, at the
option of Landlord, may be deemed to have been abandoned, and in such case such
items may be retained by Landlord, and Landlord may deal with Tenant’s Property
in such manner as Landlord shall determine, at Tenant’s expense.

 

SECTION 12               REPAIRS AND MAINTENANCE

 

12.1                         Landlord’s Obligations

 

Landlord
shall cause to be made all structural repairs to the roof, walls, subflooring,
and foundations of the Building as and when needed in or about the Premises and
the cost thereof shall be an item of Operating Expenses, except for those
repairs for which Tenant is responsible pursuant to any of the provisions of
this Lease.

 

12.2                         General

 

Tenant
shall, at its expense, throughout the term of this Lease, take good care of the
Premises, the fixtures and appurtenances therein and Tenant’s Property. Tenant,
at its expense, shall promptly replace all scratched, damaged or broken doors
and glass (except for exterior window glass) in and about the Premises and shall
be responsible for all repairs, maintenance and replacement of wall and floor
coverings in the Premises and for the repair and maintenance of all sanitary
and electrical fixtures and equipment therein reasonable
wear and tear excepted. Tenant
shall be responsible for all repairs, interior and exterior, structural and
non-structural, ordinary

 

 

8

 

and
extraordinary, in and to the Premises and the Building and the facilities and
systems thereof, the need for which arises out of the performance or existence
of Tenant’s Alterations; the installation, use or operation of Tenant’s
Property in the Premises; the moving of Tenant’s Property in or out of the
Building; or the act, omission, misuse or neglect of Tenant or any of its
subtenants or its or their employees, agents, contractors or invitees.

 

12.3                         Manner

 

Tenant
shall promptly make, at Tenant’s expense, all repairs in or to the Premises for
which Tenant is responsible, and any such repairs required to be made by Tenant
to the mechanical, electrical, sanitary, heating, ventilating, air-conditioning
or other systems of the Building. Such work shall be performed only by
contractor(s) designated or approved in writing by Landlord. Any other
repairs in or to the Building and the facilities and systems thereof for which
Tenant is responsible may be performed by Landlord at Tenant’s expense; but
Landlord may, at its option, before commencing any such work or at any time
thereafter, require Tenant to furnish to Landlord such security, bond or surety
in a form and amount as Landlord shall deem necessary to assure the payment for
such work by Tenant.

 

12.4                         Waiver

 

In each case, time being of the essence, Landlord shall have no liability to Tenant,
nor shall Tenant’s covenants and obligations under this Lease be reduced or
abated in any manner whatsoever, by reason of any inconvenience, annoyance,
interruption of or injury to Tenant’s business arising from Landlord’s making
any repairs or changes which Landlord is required or permitted by this Lease or
required by law to make in or to any portion of the Project, or in or to the
fixtures, equipment or appurtenances of the Project.

 

SECTION 13                    ELECTRIC ENERGY

 

13.1                         High Voltage Equipment

 

Tenant
shall not, without the prior written consent of Landlord, which consent will
not be unreasonably withheld, use any equipment, machine, apparatus or device
within the Premises which individually uses electric current in excess of 110
volts.

 

I3.2                             Cost of Increasing Capacity

 

Should
Landlord consent to installation of equipment or a design load for the Premises
in excess of that existing upon the Commencement Date, the additional equipment
required to increase the capacity for Tenant’s excess equipment or design load
shall be provided by Landlord. Tenant shall, upon installation, pay to Landlord
the cost to purchase, install, service and maintain such additional equipment.
The cost of the electric energy used in excess of the original design load for
the Premises as determined by Landlord and its engineers and consultants shall
not be an Operating Expense of the Building but shall be paid for by Tenant on
a monthly basis with the Base Rent commencing on the date the additional
electric energy is made available to Tenant.

 

SECTION 14                    CLIMATE CONTROL

 

Landlord
shall maintain and operate the heating, ventilating and air-conditioning
systems serving the Premises and shall furnish heat, ventilating and
air-conditioning in the Premises, the expense of which shall be included in
Operating Expenses, (except as otherwise provided in this Lease and except for
any special requirements of Tenant for its particular use of the Premises) for
occupancy of the Premises during Business Hours of Business Days. As used
herein, “Business Hours” shall mean generally customary daytime business hours,
but not before 7:00 a.m. or after 6:00 p.m. on weekdays and not
before 8:00 a.m. or after 1:00 p.m. on Saturdays, and “Business
Days” shall mean all days except Sundays and days observed by the Federal or
the State government as legal holidays. If Tenant shall require heat or
air-conditioning service at any other time, Landlord shall furnish such service
upon not less than forty-eight (48) hours’ advance notice from Tenant, and
Tenant shall pay to Landlord upon demand Landlord’s then-established charges
therefor.

 

 

9

 

SECTION 15                    OTHER SERVICES

 

15.1                         Elevators

 

Landlord
shall provide elevator service to the Premises during Business Hours of
Business Days and Landlord shall have at least one elevator subject to call at
all other times. The expense of providing elevator service shall be included in
Operating Expenses.

 

15.2                         Cleaning

 

The
expenses for the cleaning of the Premises, including the exterior and interior
of the windows of the Building, shall be included in the Operating Expenses.
Landlord shall not be required to clean any portions of the Premises used for
the preparation, serving or consumption of food or beverages, training rooms,
data processing or reproduction operations or private lavatory or toilets.
Tenant shall pay Landlord on demand the costs incurred by Landlord for extra
cleaning work in the Premises required because of: (a) misuse or neglect
on the part of Tenant or the Tenant Related Parties; or (b) interior glass
partitions or surfaces; or (c) non-building standard materials or finishes
installed by Tenant or at Tenant’s request, or (d) the use of the Premises
by Tenant or the Tenant Related Parties other than during Business Hours on
Business Days.

 

15.3                         Removal of Excess Refuse

 

Tenant
shall pay to Landlord on demand for the costs of removal from the Premises and
the Building of any refuse and rubbish of Tenant in excess of that ordinarily
accumulated in business office occupancy or at times other than Landlord’s standard
cleaning times.

 

15.4                         Building Directory

 

Landlord,
at Tenant’s request and expense, shall provide listings on the Building
directory of the names of Tenant, and the names of any of Tenant’s officers and
employees, provided that the names so listed shall not use more than Tenant’s
proportionate share of the space on the Building directory, as reasonably
determined by Landlord.

 

15.5                         Signs

 

Tenant shall not inscribe, post, place or in any manner display any sign, notice,
picture, placard or any advertising matter whatsoever, anywhere in, on or about
the Premises or the Project without first obtaining Landlord’s prior written
consent. All such approved signs shall be removed by Tenant upon the expiration
or earlier termination of this Lease and any damage caused by such removal
shall be repaired at Tenant’s expense. Landlord shall provide a sign for Tenant’s
entrance door and at the first floor directory at Landlord’s sole cost and
expense. Tenant, at Tenant’s sole cost and expense, shall have the right to
place its name on an exterior Building sign (not attached to the building, but
a common monument sign with up to six other Tenants in the Building, if (a) Landlord
first approves the sign, which approval shall not be unreasonably withheld or
delayed, (b) the sign complies with all applicable Laws, and (c) the
sign complies with all recorded covenants, conditions, and restrictions related
to the Project including without limitation the Tanasbourne Corporate Center
Protective Covenants and the Tanasbourne Corporate Center Design and
Development Guidelines (“CC&Rs”). Tenant shall maintain the sign in good
condition and repair throughout the Term, pay all costs associated with the
sign, and remove the sign on or before the expiration of the Lease or its
earlier termination. Tenant shall be allowed
exterior monument signage including MathStar’s name prominently displayed on an
entry monument as shown on Exhibit “F”. The final design is subject to
review by the City of Hillsboro, OR and to comply with all recorded covenants,
conditions, and restrictions related to the Project including without
limitation the Tanasbourne Corporate Center Protective Covenants and the
Tanasbourne Corporate Center Design and Development Guidelines (“CC&Rs”).
Tenant shall have the use of the top position on the monument.

 

 

10

 

SECTION 16       ACCESS

 

Landlord shall have access to the Premises at all reasonable times to: (a) inspect
the Premises; or (b) exhibit
the Premises to
prospective purchasers, lenders or tenants; or (c) determine whether Tenant is complying
with all its obligations hereunder; or (d) supply janitor service and any
other service to be provided by Landlord to Tenant hereunder; or (e) post
notices of non-responsibility; or (f) make repairs required of Landlord
hereunder or repairs to any adjoining space or utility services or make
repairs, alterations or improvements to any other portion of the Building,
provided, however, that all such work shall be done as promptly as possible and
so as to cause as little interference with the Tenant’s use of the Premises as
reasonably possible. Tenant hereby waives any claim against Landlord for
damages for any injury or inconvenience to or interference with Tenant’s
business, any loss of occupancy or quiet enjoyment of the Premises or any other
loss occasioned by such entry except to the extent caused by the gross
negligence or intentional misconduct of Landlord.

 

SECTION 17       INDEMNIFICATION

 

Tenant
shall indemnify, defend, and hold harmless Landlord and all parties to any
Master Lease and/or Mortgagees and their respective partners, directors,
officers, agents and employees (the “Landlord Related Parties”) from and
against any and all claims arising from or in connection with (a) the
conduct or management of the Premises or any business therein, or any condition
created (other than by Landlord or the Landlord Related Parties) in or about
the Premises; or (b) any act, omission or negligence of Tenant or any of
its subtenants, licensees, or partners, directors, officers, agents, employees,
invitees or contractors (collectively, the “Tenant Related Parties”); or (c) any
accident, injury or damage whatever (unless caused by Landlord’s or the
Landlord Related Parties’ negligence) occurring in, at or upon the Premises; or
(d) any breach or default by Tenant in the full and prompt payment and
performance of Tenant’s obligations under this Lease; together with all costs,
expenses and liabilities incurred or in connection with each such claim or
action or proceeding brought thereon, including, without limitation, all
attorneys’ fees and expenses; provided, however that Tenant shall not be required to indemnify,
defend or hold harmless Landlord to the extent any such claim is caused by
Landlord’s negligence or willful conduct. Further, Tenant’s obligations under Section 17
shall not extend to the acts of Tenant’s invitees outside the Premises. Landlord
shall not be liable for any loss or damage to any person or property, which may
be caused by theft, or by any act or neglect of any tenant or occupant of the
Project. Neither Landlord nor any of the Landlord Related Parties shall be
liable for any loss, injury or damage to Tenant or to any other person, or to
its or their property, irrespective of the cause of such injury, damage or
loss, except to the extent caused by or resulting from the negligence of
Landlord or the Landlord Related Parties, in the operation or maintenance of
the Premises or the Project. Further, neither Landlord nor of the Landlord
Related Parties shall be liable for any such damage caused by other tenants or
persons in, upon or about the Project, even if negligent, for consequential
damages, including lost profits, of Tenant or any person claiming through or
under Tenant.

 

SECTION 18       DAMAGE OR DESTRUCTION

 

18.1         General

 

In
the event the Premises shall be destroyed or rendered untenantable either
wholly or in part, by fire or other unavoidable casualty, Landlord may, at its
option, apply any insurance proceeds to the restoration of the Premises to
their previous condition. This Lease shall remain in full force and effect
unless Landlord, within sixty (60) days after the happening of any such
casualty, shall notify Tenant of its election not to restore said Premises, in
which event this Lease shall terminate as of the date of the casualty. Any
restoration by Landlord shall not include replacement of furniture, equipment
or other items designated as Tenant’s Property. Tenant shall be responsible for
restoration of Tenant’s Property. If the Building shall be destroyed or damaged
by fire or other casualty insured against under Landlord’s fire and extended
coverage insurance policy to the extent that more than twenty percent (20%)
thereof, as determined by Landlord’s architect, is rendered untenantable, or in
the case the Building shall be materially destroyed or damaged by any other
casualty, Landlord may, at its election, terminate this Lease by notice to
Tenant within sixty (60) days after such destruction or damage. Such notice
shall be effective thirty (30) days after receipt thereof by Tenant.

 

 

11

 

18.2         Rent Abatement

 

If
all or part of the Premises shall be damaged or destroyed or rendered
untenantable as a result of fire or other casualty, the Base Rent and
Additional Rent provided herein shall be abated or reduced, as the case may be,
in the proportion that the untenantable area of the Premises bears to the total
area of the Premises, for the period from the date of the damage or destruction
to the date the damage to the Premises shall be substantially repaired, or the
date on which Tenant again uses the untenantable portion, whichever first
occurs.

 

SECTION 19       EMINENT DOMAIN

 

19.1         Total Condemnation

 

If
the whole of the Building or the Premises shall be taken by condemnation or in
any other manner for any public or quasi-public use or purpose, (including a
sale under threat of condemnation) this Lease shall terminate as of the date of
vesting of title on such taking (the “Date of Taking”), and the Base Rent and
Additional Rent shall be prorated and adjusted as of Date of Taking.

 

19.2         Partial Condemnation

 

If
a part of the Building or the Land shall be so taken, this Lease shall be
unaffected by such taking, except that:

 

19.2.1      Landlord may, at its option, terminate this Lease by giving Tenant
notice to that effect within ninety (90) days after the Date of Taking; and

 

19.2.2      If twenty percent (20%) or more of the Premises shall be so taken and
the remaining area of the Premises shall not be reasonably sufficient for
Tenant to continue feasible operation of its business, Tenant may terminate
this Lease by giving Landlord notice to that effect within ninety (90) days
after the Date of Taking.

 

19.3         Effect of Termination or
Continuation

 

This
Lease shall terminate on the date that such notice from the Landlord or Tenant
to the other shall be given, and the Base Rent and Additional Rent shall be
prorated and adjusted as of such termination date. Upon a partial taking this
Lease shall continue in force as to the remaining part of the Premises, and the
Base Rent and Additional Rent shall be adjusted according to the rentable area
remaining.

 

19.4         Award

 

Landlord
shall be entitled to receive the entire award or payment in connection with any
taking without deduction therefrom for any estate vested in Tenant by this
Lease and Tenant shall receive no part of such award. Tenant shall have no
claim against Landlord or the condemning authority for the unexpired portion of
the Lease term. Nothing contained in this Section 20.4 shall be deemed to
prevent Tenant from making a separate claim proceeding for the value of any of
Tenant’s Property which is included in the taking.

 

SECTION 20       SURRENDER

 

On
the last day of the term of this Lease, or upon any earlier termination of this
Lease, or upon re-entry by Landlord upon the Premises, Tenant shall quit and
surrender the Premises to Landlord “broom-clean” and in good order, condition
and repair, except for ordinary wear and tear and in accordance with the
provisions of Section 11 of this Lease.

 

 

12

 

SECTION 21       EVENTS OF DEFAULT

 

21.1         Events of Default

 

The
occurrence of any one or more of the following events of default shall
constitute a breach of this Lease by Tenant:

 

21.1.1      Failure of Tenant to make any Base Rent or Additional Rent payment, or
any other payment under this Lease when it is due within five (5) days
written notice from Landlord that payment is past due.

 

21.1.2      Tenant makes any transfer without Landlord’s prior written consent as
required under Section 10.

 

21.1.3      Tenant vacates or abandons the Premises
during the Term, unless such failure is excused under other provisions of this Lease.

 

21.1.4      Failure of Tenant to deliver the instruments described in Section 7
or Section 26 as and when required in such Sections, as applicable, or
failure of Tenant to comply with any applicable Law when and as required by the
applicable governmental authority.

 

21.1.5      Failure of Tenant to comply with any other term or condition of this
Lease or to fulfill any other obligation of this Lease within 15 days after written
notice by Landlord specifying the nature of the failure with reasonable
particularity. No notice and no opportunity to cure shall be required if
Landlord has previously given Tenant notice of failure to comply with such term
or condition or fulfill such other obligation of this Lease more than twice in any twelve-month period during the Term.

 

21.1.6      Dissolution, termination of existence, insolvency on a balance sheet
basis or business failure of Tenant; the commencement by Tenant of a voluntary
case under the federal bankruptcy laws or under any other federal or state law
relating to insolvency or debtor’s relief; the
entry of a decree or order for relief against Tenant in an involuntary case
under the federal bankruptcy laws or under any other applicable federal or
state law relating to insolvency or debtor’s relief; the appointment of or the
consent by Tenant to the appointment of a receiver, trustee or custodian of
Tenant or of any of Tenant’s property; an assignment for the benefit of
creditors by Tenant; Tenant’s failure generally to pay its debts as such debts
become due; the making or suffering by Tenant of a fraudulent transfer under
applicable federal or state law; concealment by Tenant of any of its property
in fraud of creditors; or the imposition of a lien through legal proceedings or
distraint upon any of the property of Tenant which is not discharged or bonded.
During any period in which there is a Guarantor(s) of this Lease, each
reference to “Tenant” in this paragraph shall be deemed to refer to “Guarantor
or Tenant” separately.

 

SECTION 22       REMEDIES UPON DEFAULT

 

22.1        Remedies

 

Upon
the occurrence of an event of default, Landlord may exercise any one or more of
the remedies set forth in this Section, or any other remedy available under applicable
law, at equity, or contained in this Lease.

 

22.1.1      To the extent permitted by law, Landlord may re-enter and retake
possession of the Premises, without notice, either through self-help, by
summary proceedings, any other applicable action or proceeding, or other means.
Landlord may use the Premises for Landlord’s own purposes or relet it upon any
reasonable terms without prejudice to any other remedies that Landlord may have
by reason of Tenant’s default. None of these actions will be deemed an acceptance
of surrender by Tenant. To the extent permitted by law, and except as expressly provided in this Lease, Tenant waives the
service of any notice of intention to terminate this Lease or to retake the Premises, and waives service of any demand for
payment of rent or for
possession, and of any and
ever other notice or demand required or permitted under applicable law.

 

 

13

 

22.1.2      Landlord at its option may relet the whole or any part of the Premises,
from time to time either in the name of Landlord or otherwise, to such tenants,
for such terms ending before, on, or after the expiration date of the Term, at
such rentals and upon such other conditions (including concessions and free
rent periods) as Landlord, in its sole discretion, may determine to be
appropriate. Landlord shall have no obligation to relet the Premises or any
part and shall not be liable for refusal or failure to relet the Premises, or
in the event of any such reletting, for refusal or failure to collect any rent
due upon such reletting. No such refusal or failure shall operate to relieve
Tenant of any liability under this Lease or otherwise affect Tenant’s
liability. If there is other comparable unleased space in the Project, Landlord
shall have no obligation to attempt to relet the Premises prior to leasing
other space in the Project.

 

22.1.3      Whether or not Landlord retakes possession of or relets the Premises,
Landlord may recover all damages caused by the default (including but not
limited to unpaid rent, attorneys’ fees reasonably incurred, and costs of
reletting). Landlord may sue periodically to recover damages as they accrue
during the remainder of the Term without barring a later action for further
damages. Landlord may at any time bring an action for accrued damages plus
damages for the remaining Term as allowed by law.

 

22.2         Cumulative Remedies

 

The
remedies provided for in this Lease are cumulative and in addition to any other
remedy available to Landlord at law or in equity.

 

22.3         Interest on Damages

 

In
addition to any other remedies Landlord may have under this Lease, if any
Rents, damages or other sums payable hereunder by Tenant to Landlord are not
paid within five (5) days after their due date the same shall bear
interest at a rate equal to the prime rate established by Wells Fargo Bank (or
its successor) on the due date plus two percent (2%), accruing from the due
date to the date of payment.

 

SECTION 23       CURING TENANT’S DEFAULTS

 

If
Tenant shall default in the performance of any of Tenant’s obligations under
this Lease, Landlord, without waiving such default, may (but shall not be
obligated to) perform the same for the account and expense of Tenant, without
notice in a case of emergency, and in any other case only if such default
continues after the expiration of five (5) days from the date Landlord
gives Tenant notice of the default. Tenant agrees to reimburse Landlord upon
demand for any expenses which Landlord may incur in complying with the terms of
this Lease on behalf of Tenant.

 

SECTION 24       BROKER

 

Tenant
covenants, warrants and represents that it has not engaged any broker, agent or
finder who would be entitled to any commission or fee in connection with the
negotiation and execution of this Lease except as set forth in the Summary of
Fundamental Provisions attached hereto. Tenant agrees to indemnify and hold
harmless Landlord against and from any claims for any brokerage commissions and
all costs, expenses and liabilities in connection therewith, including
attorneys’ fees and expenses, arising out of any charge or claim for a
commission or fee by any broker, agent or finder on the basis of any agreements
made or alleged to have been made by or on behalf of Tenant. The provisions of
this Section 24 shall not apply to any brokers named on the Summary of
Fundamental Provisions.

 

SECTION 25       NOTICES

 

Any
notice or other communication required or permitted to be given by either party
to the other pursuant to this Lease shall be in writing and delivered in person
to the Landlord or Tenant or sent postage prepaid by registered or certified
mail, addressed to the other party at the address set forth in the Summary of
Fundamental Provisions or such other address which may be designated by a party
in writing. Notice shall be considered given and effective on the date of
delivery or, if mailed, on the date of such mailing.

 

 

14

 

SECTION 26       ESTOPPEL CERTIFICATES

 

Each
party agrees that at any time requested by the other party, with not less than
ten business (10) days’ prior notice, to execute and deliver to the other
a statement certifying that this Lease is unmodified and in full force and
effect (or if there have been modifications, that the Lease is in full force
and effect as modified and stating the modifications), certifying the dates to
which the Base Rent and Additional Rent have been paid, stating whether or not,
to the best knowledge of the signer, the other party is in default in
performance of any of its obligations under this Lease, and, if so, specifying
each such default of which the signer shall have knowledge, and stating whether
or not, to the best knowledge of the signer, any event has occurred which with
the giving of notice or passage of time, or both, would constitute such a default,
and, if so, specifying each such event; it being intended that any such
statement delivered pursuant hereto shall be deemed a representation and
warranty to be relied upon by the party requesting the certificate and by
others with whom such party may be dealing, regardless of independent
investigation. Tenant shall also include in any such statement such other
information concerning this Lease as Landlord may reasonably request. Within
ten days after the Commencement Date, Tenant shall execute and deliver to
Landlord a completed estoppel certificate in the form attached as Exhibit D.

 

SECTION 27       RELOCATION OF PREMISES

 

If
the Premises contain less than 3,000 rentable square feet, Landlord may elect
by notice to Tenant to substitute for the Premises other office space in the
Project (herein called “Substitute Premises”) designated by Landlord; provided
that the Substitute Premises contain at least the same useable square foot area
as the Premises and have a configuration substantially similar to that of the
Premises. Tenant shall vacate and surrender the Premises and shall occupy the
Substitute Premises promptly (and, in any event, not later than fifteen (15)
days after Landlord has substantially completed the work to be performed by
Landlord in the Substitute Premises pursuant to this Section). Base Rent for
the remainder of the Lease term shall be adjusted such that the Base Rent
payable by Tenant per net leasable square foot of the Substitute Premises shall
be the same as that for the Premises. Additional Rent payable for the
Substitute Premises shall be calculated in accordance with Section 4.
Landlord shall, at Landlord’s expense: furnish and install in the Substitute
Premises fixtures, equipment, improvements and appurtenances at least equal in
kind and quality to those contained in the Premises at the time such notice of
substitution is given by Landlord; and promptly reimburse Tenant for any other
actual and reasonable out-of-pocket costs incurred by Tenant in connection with
Tenant’s move from the Premises to the Substitute Premises provided such costs
are approved by Landlord in advance, which approval shall not be unreasonably
withheld.

 

SECTION 28       PARKING

 

Tenant
shall have the nonexclusive right, in common with others, to use up to the
number of parking spaces listed in the Summary of Fundamental Provisions for
automobile parking. Landlord reserves the right to grant parking rights to
other tenants, to make rules and regulations relating to the use of
parking areas, including reasonable restrictions on parking by tenants and
employees, to designate specific spaces for the use by any tenant, and to
change the parking layout from time to time. Tenant shall not park nor allow
the Tenant Related Parties collectively to park in excess of the number of
parking spaces listed in the Summary of Fundamental Provisions in the Project
at any point in time.

 

SECTION 29       MISCELLANEOUS

 

29.1         Entire Agreement

 

All
understandings and agreements between the parties are merged in this Lease and
neither party is relying upon any statement or representation not embodied in
this Lease. No agreement shall be effective to change or modify this Lease,
unless such agreement is in writing, refers expressly to this Lease and is
signed by the party against whom enforcement is sought.

 

29.2         Successors and Assigns

 

Except
as otherwise expressly provided in this Lease, the obligations of this Lease
bind and benefit the successors and assigns of the parties.

 

 

15

 

29.3         Nonrecourse
Lease

 

Tenant
shall look only to Landlord’s estate and property in the Land and the Building
(or the proceeds thereof) for the satisfaction of Tenant’s remedies for the
collection of a judgment (or other judicial process) requiring the payment of
money by Landlord in the event of any default by Landlord hereunder, and no
other property or assets of Landlord or its partners or principals, disclosed
or undisclosed, shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Tenant’s remedies under or with respect to
this Lease.

 

29.4         Force Majeure

 

The
obligations of Tenant hereunder shall in no way be affected, impaired or
excused, nor shall Landlord have any liability whatsoever to Tenant, because:
Landlord is unable to fulfill, or is delayed in fulfilling, any of its
obligations under this Lease by reason of strike, other labor trouble,
governmental preemption of priorities or other controls in connection with a
national or other public emergency or shortages of fuel, supplies or labor
resulting therefrom, or any other cause, whether similar or dissimilar, beyond
Landlord’s reasonable control; or of any failure or defect in the supply,
quantity or character of electricity, water or other utilities furnished to the
Premises, by reason of any requirement, act or omission of the public utility
or others serving the Building with electric energy, oil, gas or water, or for
any other reason whether similar or dissimilar, beyond Landlord’s reasonable
control.

 

29.5         Effect of Failure to Consent

 

If
Tenant shall request Landlord’s consent and Landlord shall fail or refuse to
give such consent, Tenant shall not be entitled to any damages for any
withholding by Landlord of its consent, it being intended that Tenant’s sole
remedy shall be an action for specific performance or injunction, and that such
remedy shall be available only in those cases where Landlord has expressly
agreed in writing not unreasonably to withhold its consent or where as a matter
of law Landlord may not unreasonably withhold its consent.

 

29.6         Rules and Regulations

 

Tenant
and its employees and agents shall faithfully observe and comply with the rules and
regulations attached to this Lease as Exhibit E and such changes therein
as Landlord may from time to time hereafter make and give notice of to Tenant
(the “Rules and Regulations”). Landlord shall not be liable to Tenant for
violation of the Rules and Regulations by any other tenant or its
employees, agents, invitees or licensees.

 

29.7         Tenant Holdover

 

If,
without objection by Landlord, Tenant fails to vacate the Premises after the
Expiration Date of this Lease, or any earlier termination hereof, Tenant shall
at the election of Landlord become a tenant from month to month upon the terms
of this Lease; provided, however that Base Rent shall be adjusted beginning on
the first day after the Expiration Date to be the equal to 110% of the Base Rent in effect at the
expiration of the Lease for the first two (2) months
and 200% of the Base Rent in effect at the expiration of the Lease thereafter. Notwithstanding
anything contained herein to the contrary, Tenant shall be liable to Landlord
for any and all damages caused by such failure to vacate the Premises after the
Expiration Date of this Lease or any earlier termination hereof, including but
not limited to incidental and consequential damages to Landlord.

 

29.8         Tenant Representations

 

If Tenant is a corporation or other entity, each person executing this
Lease on behalf of Tenant hereby covenants and warrants that Tenant is duly formed
and validly existing under the laws of its state of formation; Tenant has full
right and authority to enter into this Lease and to perform all Tenant’s
obligations hereunder; and each person (and both of the persons if more than
one signs) signing this Lease on behalf of Tenant is duly and validly
authorized to do so.

 

 

16

 

29.9         Non-Waiver

 

No
provision of this Lease shall be deemed to have been waived by Landlord unless
such waiver is in writing signed by Landlord. Landlord’s waiver of a breach of
any term or condition of this Lease shall not be deemed a waiver of any
subsequent breach. Acceptance of any Rents or other payments shall not be
deemed a waiver of such breach.

 

29.10       Square Footage Calculations Approximate

 

The
parties acknowledge and agree that any calculations of square footage in the
Premises and in the Project are approximations. No recalculation of square
footage shall affect the obligation of Tenant under this Lease including,
without limitation, the amount of Base Rent payable by Tenant or the amount of
Tenant’s Proportionate Share of Operating Expenses or the amount of Tenant’s
Proportionate Share of Taxes.

 

29.11       Time

 

Time
is of the essence of this Lease.

 

29.12       Late Fees

 

Tenant
acknowledges that late payment by Tenant to Landlord of any Rent due hereunder
will cause Landlord to incur costs not contemplated by this Lease, the exact
amount of which will be extremely difficult to ascertain. Such costs may
include, without limitation, processing and accounting charges and late charges
which may be imposed on Landlord under the terms of any Mortgage. Accordingly,
if any Rent payment is not received by Landlord within five days after it is
due, Tenant shall pay to Landlord a late charge equal to ten percent (10%) of
the overdue amount. The parties hereby agree that such late charge represents a
fair and reasonable estimate of the costs incurred by Landlord by reason of the
late payment by Tenant. Acceptance of any late charge by Landlord shall in no
event constitute a waiver of Tenant’s default with respect to the overdue
amount in question, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder.

 

29.13       Attorneys’ Fees

 

In
the event a suit, action, arbitration, or other proceeding of any nature
whatsoever, including without limitation any proceeding under the U.S.
Bankruptcy Code, is instituted, or the services of an attorney are retained, to
interpret or enforce any provision of this Lease or with respect to any dispute
relating to this Lease, the prevailing or non defaulting party shall be
entitled to recover from the losing or defaulting party its attorneys’,
paralegals’, accountants’, and other experts’ fees and all other fees, costs,
and expenses actually incurred and reasonably necessary in connection
therewith. In the event of suit, action, arbitration, or other proceeding, the
amount thereof shall be determined by the judge or arbitrator, shall include
fees and expenses incurred on any appeal or review, and shall be in addition to
all other amounts provided by law.

 

29.14       Quiet Enjoyment

 

So
long as Tenant pays all Rents and complies with all of the terms and conditions
of this Lease, Tenant shall peaceably and quietly have, hold and enjoy the
Premises. This covenant shall be binding upon the subsequent successors in
interest of Landlord’s interest in this Lease.

 

29.15       Severability

 

If
any portion of this Lease is held to be illegal, invalid or unenforceable under
present or future law effective during the term of this Lease, the remainder of
this Lease shall not be affected thereby.

 

 

17

 

29.16       Incorporation of Exhibits

 

Exhibit A
(Floor Plans), Exhibit B (Legal Description of Project), Exhibit C
(Work Agreement), Exhibit D (Estoppel Certificate) and Exhibit E (Rules and
Regulations) are attached to this Lease and by this reference made a part
hereof.

 

IN WITNESS WHEREOF, Landlord and Tenant have duly executed this lease
as of the day and year first above written.

 

	
  LANDLORD:

  	
  MARK TANASBOURNE LLC,

  
	
   

  	
  an Oregon limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Mark Properties Limited Partnership,

  
	
   

  	
   

  	
  an Oregon limited partnership, Managing Member

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Mark Management, LLC,

  
	
   

  	
   

  	
   

  	
  an Oregon limited liability company, General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ M. James Mark

  	
   

  
	
   

  	
   

  	
   

  	
  M. James Mark, Co-Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  TENANT:

  	
  MATHSTAR, a Minnesota corporation

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Daniel J. Sweeney

  	
   

  
	
   

  	
  Its

  	
  Chief Operating Officer

  	
   

  
								

 

 

Exhibits

 

A:
Outline of Premises

A-1:
Outline of Expansion Space

B:
Legal Description of Land

C:
Work Agreement

C-1:
Plan

C-2:
General Specifications for Tenant Improvements

C-3:
Construction Budget Sheet

D:
Estoppel Certificate

E:
Rules and Regulations

F-1:
Monument View 1

F-2:
Monument View 2 

Addendum

 

 

18

 

	
   

  	
  EXHIBIT “A” TO THAT LEASE
  DATED JUNE 1, 2005 BY

  
	
   

  	
  AND BETWEEN MARK.
  TANASBOURNE L.L.C. AN OREGON

  
	
   

  	
  LIMITED LIABILITY COMPANY,
  LANDLORD, AND

  
	
   

  	
  MATHSTAR. A MINNESOTA
  CORPORATION, TENANT

  
	
   

  	
  /s/ JM

  	
    LANDLORD

  	
  /s/ DS

  	
    TENANT

  

 

 

	
   

  	
  EXHIBIT “A” TO THAT LEASE
  DATED JUNE 1, 2005 BY

  
	
   

  	
  AND BETWEEN MARK.
  TANASBOURNE L.L.C. AN OREGON

  
	
   

  	
  LIMITED LIABILITY COMPANY,
  LANDLORD, AND

  
	
   

  	
  MATHSTAR. A MINNESOTA
  CORPORATION, TENANT

  
	
   

  	
  /s/ JM

  	
    LANDLORD

  	
  /s/ DS

  	
    TENANT

  

 

 

EXHIBIT B

 

LEGAL DESCRIPTION

 

Situated
in the East one-half of Section 25, Township 2 North, Range 1 West, of the
Willamette Meridian, in the City of Hillsboro, County of Washington and State
of Oregon and being a portion of Lots 15 and 16, Plat of TANASBOURNE CORPORATE
CENTER, recorded in Book 49, pages 47-49, Plat Records of said county and
being described as follows:

 

Beginning
at the Southwest corner of said Lot 15, said point also being on the North
right-of-way line of N.W. Tanasbourne Drive and running thence North 29°55’47”
East, on the West line of said Lot 15 at a distance of 569.73 feet to a point
on the South right-of-way line of the Sunset Highway (US Highway 26); thence
South 49°04’17” East, on said South right-of-way line a distance of 265.21 feet
to a point on a non-tangent 2035.98 foot radius curve right; thence on said
curve through a central angle of 06°18’39” (the long chord of which bears South
53°35’21” East, a distance of 224.13 feet) an arc distance of 224.25 feet to a
point on a non-tangent 829.93 foot radius curve right; thence on said curve through
a central angle of 02°15’27” (the long chord of which bears South 47°34’25”
East, a distance of 32.70 feet) an arc distance of 32.70 feet to a point;
thence leaving said South right-of-way line and running South 49°31’34” West, a
distance of 275.00 feet; thence South 89°16’17” West, a distance of 32.02 feet
to a point on a non-tangent 65.00 foot radius curve left, said point also being
on the North right-of-way line of N.W. Stucki Place; thence on the North and
West right-of-way lines of said N.W. Stucki Place the following courses: on
said curve through a central angle of 150°43’58” (the long chord of which bears
South 78°52’34” West, a distance of 125.78 feet) an arc distance of 171.00 feet
to the end thereof and the beginning of a tangent 25.00 foot radius curve
right; thence on said curve through a central angle of 43°45’40” (the long
chord of which bears South 25°23’26” West, a distance of 18.63 feet) an arc
distance of 19.09 feet to the end thereof; thence South 47°16’17” West, a
distance of 122.75 feet to the beginning of a tangent 25.00 foot radius curve
right; thence on said curve through a central angle of 90°00’00” (the long
chord of which bears North 87°43’43” West, a distance of 35.36 feet) an arc
distance of 39.27 feet to a point on the North right-of-way line of N.W.
Tanasbourne Drive; thence on said North right-of-way line the following
courses: North 42°43’43” West, a distance of 4.25 feet to the beginning of a
tangent 430.00 foot radius curve left; thence on said curve through a central
angle of 16°04’39” (the long chord of which bears North 50°46’03” West, a
distance of 120.26 feet) an arc distance of 120.66 feet to the end thereof;
thence North 58°48’22” West, a distance of 110.44 feet to the point of
beginning.

 

TOGETHER
WITH:

 

A
parcel of land located in the northeast one-quarter of section 25, township 1
north, range 2 west, Willamette meridian, Washington County, Oregon, and being
portions of lots 13 and 14 of “Tanasbourne Corporate Center”, described as
follows:

 

Beginning
at the southeast corner of said lot 14; thence along the east line of said lot
north 29° 55’ 47” east 569.72 feet to a point on the south right-of-way line of
sunset highway (highway 26) as established in deed document no. 92017391;
thence leaving said lot line along said right-of-way line north 49° 04’ 17”
west 55.11 feet to a point on the north line of said lot 14 and the south
right-of-way line of sunset highway (highway 26) as shown on the plat of “Tanasbourne
Corporate Center”, thence along said right-of-way line and the north lines of
lot 14 and lot 13 north 60° 04’ 13” west 501.90 feet; thence leaving said line
south 29° 55’ 47” west 605.84 feet to a point on the south line of said lot 13
and the north right-of-way line of N.W. Tanasbourne Drive; thence along said
lot line and right-of-way line on a non-tangent curve concave to the north, the
radius point of which bears north 23° 29’ 50” east, having a radius of 3,970.00
feet, through a central angle of 00° 59’ 50”, an arc length of 69.10 feet
(chord bears south 67° 00’ 05” east 69.10 feet) to a point of reverse
curvature; thence on a curve concave to the south, having a radius of 2,430.00
feet, through a central angle of 08° 41’ 38”, an arc length of 368.72 feet
(chord bears south 63° 09’ 11” east 368.37 feet) to the point of beginning.

 

 

EXCEPTING THEREFROM the
following described property:

 

A parcel of land located
in the northeast one-quarter of section 25, township 1 north, range 2 West,
Willamette meridian, Washington County, Oregon and being a portion of lot 13, “Tanasboume
Corporate Center”, described as follows:

 

Beginning at the
southeast corner of said lot 13; thence along the east line north 29° 55’ 47”
east 586.25 feet to the northeast corner; thence along the north line north 60°
04’ 13” west 171.00 feet; thence leaving said line south 29° 55’ 47” west
605.74 feet to a point on the south line of said lot 13 and a point on the
north right-of-way line on N.W. Tanasboume Drive; thence along said lot line
and right-of-way line on a non-tangent curve concave to the north the radius
point of which bears north 23° 29’50” east, having a radius of 3,970.00 feet,
through a central angle of 00° 59’ 50”, an arc length of 69.10 feet (chord
bears south 67° 00’ 05” east 69.10 feet) to a point of reverse curvature;
thence on a curve concave to the south, having a radius of 2,430.00 feet,
through a central angel of 02° 25’ 44”, an arc length of 103.02 feet (chord
bears south 66° 17’ 08” east 103.01 feet) to the point of beginning.

 

 

EXHIBIT
C

 

WORK
AGREEMENT

 

SECTION 1        GENERAL

 

Landlord
agrees to provide certain improvements in the Premises in accordance with this
Work Agreement. Landlord shall pay for the shell all
costs (estimated at $95,582,25) and up to $178,201.69 (the “T1 Allowance”)
towards the cost of designing and construction the improvements in the
Premises pursuant to the terms  as provided in the
attached Exhibit C-1 Plans and further described by the Exhibit C-2 General
Outline Specification for Tenant Improvements and Exhibit C-3 Construction
Budget Sheet.  of this Work Agreement. All costs, fees, and
expenses including, without limitation, governmental fees and assessments in
connection with the design, permitting, installation, materials, labor, and
construction of the improvements in the Premises in excess of the TI Allowance
shall be paid for by Tenant within twenty (20) days after billing therefore excluding architectural and planning services provided by Landlord. Throughout  the process of design and construction of the Tenant
improvements, Dan Sweeney (“Tenant’s
Construction Representative”) shall be available for onsite and telephone
consultations and decisions as necessary. Tenant’s Construction Representative’s
address is 5900 Green Oak Drive, Minneapolis
MN 55343 and his telephone number is 503-310-2254. Tenant’s Construction Representative shall have
the authority to bind Tenant as to all matters relating to the tenant
improvements.

 

SECTION 2        DESIGN
OF TENANT IMPROVEMENTS

 

2.1             Landlord shall retain the services
of a space planner or architect to prepare the necessary drawings, including
without limitation Basic Plans and Working Plans as described below for
construction of the tenant improvements (the “Plans”). The costs, feeds, and
expenses incurred in connection with the Plans shall be deducted from the T1
Allowance.

 

2.2             Within five (5)
business days after Landlord delivers to Tenant a copy of the Basis Plans,
Tenant shall either approve the Basic Plans or shall set out the revisions
requested by Tenant to the Basis Plans. Also, Tenant shall clearly identify and
locate on the Basic Plans any equipment requiring special plumbing or
mechanical systems, areas subject to above normal leads, special openings in
the floor, ceiling, or walls, and other major or special features; and (ii)
locations of telephone and electrical receptacles, outlets, and other items
requiring electrical power (for special conditions and equipment, power
requirements, and manufacturer’s model numbers must be included).

 

2.3             Landlord shall review any revisions
made to the Basic Plans and shall, in writing within         business days after receipt, either approve
the revised Basic Plans or reject them, in which ease Landlord shall specify in
reasonable detail the deficiencies in the Basic Plans as submitted. If the
Basic Plans are rejected, Tenant shall resubmit required changes to the Basic
Plans as soon as practicable until Landlord’s approval has been obtained.
Following Landlord’s approval of the Basic Plans, Landlord’s space planner or
architect shall produce full working drawings for construction sufficient to
obtain all necessary permits and with sufficient detail to construct the
improvements, including specifications for every item included thereon (the
“Working Plans”). Landlord shall have the right to stop the design process at
any point and terminate the Lease if it appears to Landlord that the cost;
timing, or some other issues related to the tenant improvements will not be
resolved between the parties.

 

2.4             Tenant shall be responsible for
delays and additional costs in completion of the design and construction of Tenant’s
improvements caused by changes made by Tenant to the attached
plans.  to the Working Plans after Landlord delivers them to Tenant
or by delays in delivery of special materials requiring long lead times.

 

SECTION 3        CONSTRUCTION
OF TENANT IMPROVEMENTS

 

3.1             Upon completion of the Working Plans and
at the request of Tenant, Landlord and its contractor shall provide to Tenant in
writing an estimate of the cost of improvements to be provided at Tenant’s
expense pursuant to Section 1 of this Work Agreement. Within five days after
Tenant’s receipt of such estimated cost, Tenant

 

 

D-1

 

shall delete any
items which Tenant elects not to have constructed and shall authorize
construction of the balance of the improvements. In the absence of such written
authorization, Landlord shall not be obligated to commence work on the Premises
and Tenant shall be responsible for any costs due to any resulting delay in
completion of the Premises. Notwithstanding the provisions of this Section 3.1,
Tenant may request Landlord’s approval to use a contractor other than
Landlord’s for the construction of Tenant’s improvements. Tenant shall include
with any request for such approval a written estimate by Tenant’s contractor of
the cost of the improvements. Landlord shall respond to any request for such
approval within ten days after receipt of the request. If Landlord approves
Tenant’s request to use its own contractor, the work performed by such
contractor shall be in conformance with the provisions of Section 3.4 of this
Work Agreement.

 

3.2             If Landlord’s
contractor is to construct Tenant’s improvements, then prior to commencement of
construction of the improvements, Tenant shall either (i) deposit with Landlord
cash in an amount equal to the estimated cost of the improvements to be
installed at Tenant’s expense pursuant to Section 1 of this Work Agreement, or
(ii) provide Landlord with other evidence or assurance, such as a bond,
satisfactory to Landlord of Tenant’s ability to pay the estimated cost of such
improvements. Landlord’s contractor shall then complete the improvements in
accordance with the Working Plans. Any additional amounts payable by Tenant for
the actual cost of the improvements beyond
the Improvement Allowance shall be paid upon acceptance of the
Premises by Tenant in accordance with the terms of the Lease, or upon receipt
of the final accounting. If each is deposited by Tenant as provided above in
this Section 3.2, any excess paid by Tenant over the actual cost of the
improvements shall be promptly refunded to Tenant by Landlord.

 

3.3             If Tenant desires any change to its
improvements, Tenant shall submit a written request for such change to
Landlord, together with all plans and specifications necessary to show and
explain changes from the approved Working Plans. Any such change shall be
subject to Landlord’s approval. If Landlord’s contractor is constructing Tenant’s
improvements, Landlord or such contractor shall notify Tenant in writing of the
amount, if any, which will be charged or credited to Tenant to reflect the cost
of such change.

 

SECTION 4        COMPLETION
AND INSPECTION

 

4.1            Substantial Completion Date.
Landlord shall be deemed to have met its obligation to substantially complete
Landlord’s Work in conformity with the working drawings for construction upon (a) the issuance by the City
of Hillsboro of a certificate of occupancy or a temporary certificate of
occupancy for the Building (or any comparable approval of Landlord’s work)
which does not contain any condition preventing occupancy and the use of the
Building (herein the “Certificate of Occupancy’), and (b) the issuance by
the Architect of a certificate stating that, except for any then remaining
Punchlist Items, construction of Landlord’s work has been substantially
completed according to the Final Plans and Specifications (herein the “Architect’s
Certificate”). The date upon which substantial completion occurs is herein
referred to as the “Substantial Completion Date.”

 

4.2            Inspection and Creation of
Punchlist. Approximately thirty (30) days prior to the date which Landlord
anticipates to be the Substantial Completion Date, Landlord shall deliver to
Tenant written notice of the expected Substantial Completion Date.
Approximately five (5) days prior to the anticipated Substantial
Completion Date, representatives of Landlord and Tenant shall make a joint
inspection of the Building to create an agreed upon list of items of Landlord’s
Work yet to be substantially completed. The items included in such list are
herein referred to as the “Punchlist Items.” If the parties are unable to agree
whether any particular item is to be included as a Punchlist Item, then the
decision of the Architect as to such item shall be binding.

 

4.3            Performance of Punchlist Work;
Final Completion. Landlord shall complete Punchlist Items after the
Substantial Completion Date. The existence of Punchlist Items shall not delay
delivery of possession nor the Lease Commencement Date. Tenant shall be given
possession of the Premises upon the Substantial Completion Date, but Landlord
shall continue to have complete access to the Premises for the purpose of
taking any and all steps related to then remaining Punchlist Items, and Tenant
shall cooperate to facilitate such steps. The obligation of Landlord to perform
punchlist work shall be to perform the same to an industry

 

 

D-2

 

standard level, not to
perfection; any disagreement as to whether an item of punchlist work has been
performed to industry standard shall be resolved by the Architect. If Landlord
fails to complete any particular Punchlist Item within ninety (90) days after
written notice front Tenant that the same remains uncompleted, and if such
failure is not due to a cause beyond the reasonable control of Landlord, then
Tenant may perform the necessary correction, in which event Landlord shall
reimburse Tenant for all actual out-of-pocket expenses incurred in such
correction upon deliver by Tenant of substantiation of amount of such expenses.
Landlord shall be deemed to have fully and finally completed its construction
obligations hereunder upon the date (herein the “Final Completion Date”) that
Landlord shall have completed its punchlist obligations.

 

 

D-3

 

	
   

  	
  EXHIBIT “C-1” TO THAT LEASE DATED JUNE 1, 2005 BY

  
	
   

  	
  AND BETWEEN MARK. TANASBOURNE L.L.C. AN OREGON

  
	
   

  	
  LIMITED LIABILITY COMPANY, LANDLORD, AND

  
	
   

  	
  MATHSTAR. A MINNESOTA CORPORATION, TENANT

  
	
   

  	
  /s/ JM

  	
    LANDLORD

  	
  /s/ DS

  	
    TENANT

  

 

 

 

EXHIBIT
C-2

 

SUNSET
CENTER AT TANASBOURNE

General Outline Specifications for Tenant Improvements

 

 

Project
Description:          Work
shall include demising walls to underside of structure; interior walls to
underside of suspended ceiling; general office finishes including floors, walls
doors frames and hardware, suspended acoustic ceilings; HVAC in offices; wet
fire sprinkler system; restroom and plumbing; electrical and lighting systems.

 

General
Requirements:

 

·                  All construction permits are included as part of the Improvement Cost.

·                  Fire and extended coverage insurance (Builder’s Risk) shall be provided
by Landlord as part of the Improvement Cost.

·                  All work shall be in accordance with the Uniform Building Code and
local jurisdictions.

 

Cabinetry:

 

·                  Cabinets shall be particle-board
construction with melamine faced interiors and plastic laminate at all exposed
surfaces. Countertops and splashes shall be plastic laminate.

·                  Tenant reception counter is 0 allowance.

 

Insulation:

 

·                  3 1/2 “ unfaced batt
insulation in demising walls and ceilings.

 

Door, Frames & Hardware:

 

·                  Interior doors shall be 3’0” x 8’ 10” x 13/4”
flush, solid core (AWI grade Premium) with maple quarter sawn veneer face (AWI
Type II) and pre-finished with clear lacquer.

·                  Interior door frames shall be knock-down
metal drywall type (Timely) 18 ga; primed. Color: Match wall color.

·                  Interior door hardware shall be l 1/2” pr. 4 1/2” butt
hinges; Schlage 625 latchsets and locksets in lever handles, Option 03 chrome
finish; wall stops.

 

Partitions:

 

·                  Interior walls shall be 31/2” metal studs @ 24” o.c. to underside of suspended
ceiling (9’ typical ); one layer of 5/8” drywall on each side with smooth
finish; two coats of latex enamel paint; 4” rubber base.

 

Suspended Ceiling:

 

·                  Suspension system shall be 2’ x 4’ exposed T-bar grid supported from
roof structure. Ceiling tile shall be non- directional, fissured mineral
fiberboard with standard white finish at all offices (Armstrong #733 “Second
Look”) at 9’0” above finished floor. Suspension system is included.

 

 

D-4

 

Floor Coverings:  

 

Office Carpet:

 

	
  Style:

  	
   

  	
  Shaw Design Services V
  (5A032) or equivalent

  
	
  Gauge:

  	
   

  	
  1/10

  
	
  Stitches Per Inch:

  	
  9.5

  
	
  Production Yarn Weight:

  	
  30 oz./SY

  
	
  Finished Pile
  Thickness:

  	
  201 inches

  
	
  Average Density:

  	
  5,373 oz./CY

  
	
  Warranty:

  	
   

  	
  10 year Commercial Ltd.

  

 

Sheet Vinyl:

 

	
  Type:

  	
   

  	
  Classic Corlon Sheet
  Vinyl Flooring

  
	
  Width:

  	
   

  	
  6 Feet

  
	
  Style:

  	
   

  	
  Seagate

  
	
  Reference
  Specification:

  	
  Grade 1, Class A
  backing

  
	
  Gauge:

  	
   

  	
  2.16 mm overall/1.27 mm
  wear/layer

  
	
  Load Limit:

  	
   

  	
  500 psi

  
	
  Manufacturer:

  	
   

  	
  Armstrong “Seagate”

  

 

·        Sheet
vinyl (Armstrong “Seagate”) in Janitors closet.

·        Vinyl
cove base; 4” in carpeted areas; 4” in sheet vinyl and VCT areas.

 

 

Painting/Finishing:

 

·                  Interior drywall paint shall be a two coat, one color application; wood
doors to be pre-finished maple quarter sawn veneer with clear lacquer.
Miscellaneous metals receive an enamel finish.

 

 

Window Coverings:

 

·                  Hunter Douglas color 724 Crème de la crème
(pearl) Blinds on any interior relites are not included.

 

Plumbing:

 

·                  Complete and code approved domestic water
and sanitary sewer systems shall be provided.

·                  Plumbing fixtures shall be Kohler (or
equal); including toilet, lavs (in countertops); faucets . Water heater;
capacity as required. Drinking fountain as required by code. All fixtures to
meet all applicable ADA requirements.

 

Fire Protection:

 

·                  Office areas shall have semi-recessed heads with chrome escutcheons
complete per code.

 

Electrical/Exterior, Exit and Emergency Lighting:

 

·                  Exit and emergency lighting shall be provided to meet UBC and ADA
requirements.

 

 

D-5

 

Electrical/Interior
Lighting:

 

·                  Office areas shall have 2’ x 4’ florescent “lay-in” Lithonia 18 cell
parabolic fixtures. Cost of these fixtures is included in the overall shell
cost.

·                  Light control switching minimum requirements shall be: offices – one
switch on wall near door; conference rooms – two switches on wall near door;
restrooms and lunch rooms – one switch on wall near door; corridors – two
switches.

 

Electrical/Power:

 

·                  Receptacles shall be provided as required by code in all areas.

·                  Service panel will be a 100 amp, 42 circuit for the floor.

 

Electrical/Telephone &
Data:

 

·                  Telephone and/or data outlets shall be
wall mounted mud rings with pull cords only to above the ceiling line.
Telephone equipment, signaling and intercom are not included.

·                  Data and/or computer wiring by Tenant.

 

 

D-6

 

	
   

  	
  EXHIBIT “C-3” TO THAT LEASE DATED JUNE 1, 2005 BY

  
	
   

  	
  AND BETWEEN MA. TANASBOURNE L.L.C. AN OREGON

  
	
   

  	
  LIMITED LIABILITY COMPANY, LANDLORD, AND

  
	
   

  	
  MATHSTAR. A MINNESOTA CORPORATION, TENANT

  
	
   

  	
  /s/ JM

  	
    LANDLORD

  	
  /s/ DS

  	
    TENANT

  

 

CONSTRUCTION BUDGET SHEET

 

	
  TENANT:

  	
  MATH
  STAR

  	
   

  
	
   

  	
   

  	
   

  
	
  BUILDING:

  	
  SUNSET
  CENTER I

  	
   

  
	
   

  	
   

  	
   

  
	
  SUITE:

  	
  2ND
  FLOOR

  	
   

  
	
   

  	
   

  	
   

  
	
  RSF:

  	
             6,473
  SQ. FT.

  	
  $28.47
  /sq. ft.

  

 

JOB
NO:

 

	
  ESTIMATE
  DATE:

  	
  June 1,
  2005

  
	
  PLAN
  DATE:

  	
  MMP
  PLAN June 1, 2005

  

 

 

	
  DESCRIPTION

  	
  QUOTE

  	
  DESCRIPTION

  	
  QUOTE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  220 if New walls; Furr out columns (6)

  	
  12,210.00

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  126 If Demising walls

  	
  3,465.00

  	
   

  	
  Paint

  	
  3,600.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (10) New doors, frames & hardware

  	
  15,000.00

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Glass entry doors & site Iltes

  	
  12,000.00

  	
   

  	
  Construction clean up

  	
  2,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Contingency

  	
  10,000.00

  	
   

  
	
  720 s.y. Carpet, pad, STD, VCT &
  installation

  	
  14,500.00

  	
   

  	
   

  	
   

  	
   

  
	
  Rubber base

  	
  2,000.00

  	
   

  	
  Office area secondary ductwork

  	
  6,400.00

  	
   

  
	
   

  	
   

  	
   

  	
  Low pressure ductwork, including grilles:

  	
   

  	
   

  
	
  Electrical; (2) power poles, (5) floor
  duplex

  	
  23,300.00

  	
   

  	
  Small Conference
  Room Exhaust Fan

  	
  1,200.00

  	
   

  
	
  outlets; (4) power whips @ columns; (121)

  	
   

  	
   

  	
  Small Conference Room Exhaust
  Fan

  	
  1,200.00

  	
   

  
	
  wall duplex outlets; (15) dedicated outlets;

  	
   

  	
   

  	
  Small Conference
  Room Exhaust Fan

  	
  1,200.00

  	
   

  
	
  (13) light switches; (42) telephone/data

  	
   

  	
   

  	
  Large Conference
  Room New Box

  	
  3,500.00

  	
   

  
	
  outlets; HVAC power for 24/7 units

  	
   

  	
   

  	
  Break Room New Box

  	
  3,500.00

  	
   

  
	
   

  	
   

  	
   

  	
  Testing Lab New 2-ton
  24/7 Split

  	
  7,000.00

  	
   

  
	
   

  	
   

  	
   

  	
  Server Room New
  3-ton 24/7 Split

  	
  8,000.00

  	
   

  
	
  Cabinets 24 If U/L p-lam

  	
  8,400.00

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Testing Lab Exhaust System

  	
  5,000.00

  	
   

  
	
  Plumbing; (1) standard sink

  	
  2,500.00

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Window coverings

  	
  5,100.00

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  SUB TOTAL #1

  	
  151,075.00

  	
   

  
	
   

  	
   

  	
   

  	
  PERMIT FEE (REIMBURSABLE)

  	
  3,100.00

  	
   

  
	
   

  	
   

  	
   

  	
  OVERHEAD & FEE

  	
  23,126.25

  	
   

  
	
   

  	
   

  	
   

  	
  SUB TOTAL #2

  	
  177,301.25

  	
   

  
	
   

  	
   

  	
   

  	
  ARCHITECT FEE

  	
  7,000.00

  	
   

  
	
   

  	
   

  	
   

  	
  DESIGNER FEE

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
  TOTAL ESTIMATE

  	
  184,301,25

  	
   

  

 

 

	
  CLARIFICATIONS:

  	
  Wood
  base

  	
  Add
  $3,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Excludes:  Refrigerator,
  microwave & coffee maker

  
	
   

  	
  Excludes:  Test benches furniture, equipment racks &
  V/D cabling. 208 volt is available to building electrical panel

  

 

AUTHORIZATION
SIGNATURES:

 

	
  MMCC:

  	
   

  	
  DATE:

  	
  June 1,
  2005

  	
   

  	
   

  
	
  TENANT:

  	
   

  	
  DATE:

  	
   

  	
   

  	
   

  
	
  THIS
  WORK IS TO BE PAID FOR BY      TENANT

  	
   

  	
   

  	
  OWNER

  	
   

  	
    OTHER

  	
   

  	
   

  
											

 

 

EXHIBIT D

ESTOPPEL CERTIFICATE

 

	
  Landlord:

  	
   

  	
  Mark Tanasbourne LLC,
  an Oregon limited liability company

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tenant:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Premises:

  	
   

  	
   

  	
  , Sunset Center at
  Tanasboume

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Area:

  	
   

  	
   

  	
  Rentable Sq. Ft.

  	
  Lease Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lender:

  	
   

  	
   

  	
   

  	
   

  
							

 

The undersigned Landlord
and Tenant of the above-referenced Lease (the “Lease”) hereby ratify the Lease
and certify to Lender as mortgagee of the real property of which the premises
demised under the Lease (the “Premises”) is a part, as follows:

 

1.                                 That the term of the Lease commenced on                                ,
19           , Tenant
is in full and complete possession of the Premises demised under the Lease, and
Tenant has commenced full occupancy and use of the Premises, such possession
having been delivered by Landlord and having been accepted by the Tenant.

 

2.                                 That the Lease presently calls for
monthly Base Rent installments of $                  
and that Tenant is paying monthly installments of Base Rent of $                  
which commenced (or will commence) to accrue on the                
day of                                               ,
19         .

 

3.                                 That no advance rental or other payment
has been made in connection with the Lease, except rental for the current
month, and that: (initial one)

 

(  )                                  there is no “free rent” or other
concession under the remaining term of the Lease and the rent has been paid to
and including                           ,
19        .

 

(  )                                  there is “free rent” which extends through                                 ,
19          , that the
first month following the free rent period has been paid in advance, and no
further free rent or prepaid rent exists throughout the remaining term of the
Lease.

 

4.                                 That a security deposit in the amount of
$                     
is being held by Landlord, which amount is not subject to any set-off or
reduction or to any increase for interest or other credit due to Tenant.

 

5.                                 That all obligations and conditions under
said Lease to be performed to date by Landlord or Tenant have been satisfied,
free of defenses and set-offs including construction work in the Premises.

 

6.                                 That the Lease is a valid lease and in
full force and effect and represents the entire agreement between the parties;
that there is no existing default on the part of Landlord or Tenant in any of
the terms and conditions thereof and no event has occurred which, with the
passing of time or giving of notice or both, would constitute an event of
default; and that said Lease has: (initial one)

 

(  )                                  not been amended, modified, supplemented, extended,
renewed or assigned.

 

(  )                                  been amended, modified,
supplemented, extended, renewed or assigned as follows by the following described agreements:

                                                                                                                                                                          

 

 

D-7

 

                                                                                                                                                                          

                                                                                                                                                   .

 

7.                                 That the Lease provides for a primary
term of                                    
months; the term of the Lease expires on the                  
day of                                     , 19        ;
and that: (initial one)

 

(  )                                  neither the Lease nor any of the
documents listed above in Paragraph 6 (if any), contain an option for any
additional term or terms,

 

(  )                                  the Lease and/or the documents listed
above in Paragraph 6 contain an option for                               
additional term(s) of                       
year(s) and                      
month(s) (each) at a rent to be determined as follows:

                                                                                                                                                                          

                                                                                                                                                                          

                                                                                                                       .

 

8.                                 That Landlord has not rebated, reduced or
waived any amounts due from Tenant under the Lease, either orally or in
writing, nor has a Landlord provided financing for, made loans or advances to,
or invested in the business of Tenant.

 

9.                                 That, to the best of Tenant’s knowledge,
there is no apparent or likely contamination of the Premises by Hazardous
Materials, and Tenant does not use, nor has Tenant disposed of, Hazardous
Materials in violation of Environmental Laws on the real property or the
Premises.

 

10.                           That there are no actions, voluntary or
involuntary, pending against Tenant under the bankruptcy laws of the United
States or any state thereof.

 

11.                           That this certification is made knowing
that Lender is relying upon the representations herein made.

 

	
  LANDLORD:

  	
  MARK TANASBOURNE LLC,

  
	
   

  	
  an Oregon limited
  liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Mark Properties Limited
  Partnership,

  
	
   

  	
   

  	
  an Oregon limited
  partnership, Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Mark Management, LLC,

  
	
   

  	
   

  	
   

  	
  an Oregon limited
  liability company, General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  M. James Mark,
  Co-Manager

  

 

 

 

 

	
  TENANT:

  	
  MATHSTAR, a Minnesota
  corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Its

  	
   

  	
   

  

 

D-8

 

EXHIBIT E

 

RULES AND REGULATIONS

 

1.             The entrances, halls, corridors, stairways,
exits, and elevators shall not be obstructed by any of the tenants or used for
any purpose other than for ingress and egress from their respective premises.
The entrances, halls, corridors, stairways, exits, and elevators are not
intended for use by the general public but for the tenant and its employees,
licensees and invitees. Landlord reserves the right to control and operate the
public portions of the Project and the public facilities as well as facilities
furnished for the common use of the tenants, in such manner as it in its
reasonable judgment deems best for the benefit of the tenants generally. No
tenant shall invite to the tenant’s premises, or permit the visit of, persons
in such numbers or under such conditions as to interfere with the use and
enjoyment of any of the plazas, entrances, corridors, elevators and other
facilities of the Project by any other tenants. Fire exits and stairways are
for emergency use only, and they shall not be used for any other purpose.

 

2.             Landlord may refuse admission to the Building
outside of Business Hours on Business Days (as such terms are defined in the
Lease) to any person not producing identification satisfactory to Landlord. If
Landlord issues identification passes, Tenant shall be responsible for all
persons for whom it issues any such pass and shall be liable to Landlord for
all acts or omissions of such persons.

 

3.             No awnings or other projections shall be
attached to the outside walls of the Building. No curtains, blinds, shades or
screens, if any, which are different from the standards adopted by Landlord for
the Building shall be attached to or hung in any exterior window or door of the
premises of any tenant without the prior written consent of Landlord.

 

4.             No sign, placard, picture, name lettering,
advertisement, notice or object visible from the exterior of any tenant’s
premises shall be displayed in or on the exterior windows or doors, or on the
outside of any tenant’s premises, or at any point inside any tenant’s premises
where the same might be visible outside of such premises, without the prior
written consent of Landlord. Landlord shall adopt and furnish to tenants
general guidelines relating to signs inside the Building. Tenant shall conform
to such guidelines. All approved signs or lettering shall be prepared, printed,
affixed, or inscribed at the expense of the tenant and shall be of a size,
color and style acceptable to Landlord.

 

5.             The windows that reflect or admit light and
air into the halls, passageways or other public places in the Building shall
not be covered or obstructed by any tenant, nor shall any bottles, parcels or
other articles be placed on the window sills.

 

6.             No showcases or other articles shall be put
in front of or affixed to any part of the exterior of the Building, nor placed
in the halls, corridors or vestibules.

 

7.             No bicycles, vehicles, animals, fish or birds
of any kind shall be brought into or kept in or about the premises of any
tenant or the Building.

 

8.            No noise, including, but not limited to,
music or the playing of musical instruments, recordings, radio or television,
which, in the judgment of Landlord, might disturb other tenants in the Project,
shall be made or permitted by any tenant.

 

9.            No tenant, nor any tenant’s contractors,
employees, agents, visitors, invitees or licensees, shall at any time bring
into or keep upon the premises or the Building any inflammable, combustible,
explosive, environmentally hazardous or otherwise dangerous fluid, chemical or
substance.

 

10.          All movement of freight, furniture, packages,
boxes, crates or any other object or matter of any description must take place
during such hours and in such elevators, and in such manner as Landlord or its
agent may determine from time to time. Any labor and engineering costs incurred
by Landlord in connection with any moving herein specified, shall be paid by
Tenant to Landlord, on demand.

 

 

9

 

11.             No tenant shall occupy or permit any portion
of its premises to be occupied as an office for a public stenographer, public
word processor, printer or photocopier. No tenant shall use its premises, or
permit any part thereof to be used, for manufacturing or the sale at retail or
auction of merchandise, goods or property of any kind.

 

12.             Landlord shall have the right to prescribe
the weight and position of safes and other objects of excessive weight, and no
safe or other object whose weight exceeds the lawful load for the area upon
which it would stand shall be brought into or kept upon any tenant’s premises.
If, in the judgment of Landlord, it is necessary to distribute the concentrated
weight of any heavy object, the work involved in such distribution shall be
done at the expense of the tenant and in such manner as Landlord shall
determine.

 

13.             Landlord, its contractors, and their
respective employees, shall have the right to use, without charge therefor, all
light, power and water in the premises of any tenant while cleaning or making
repairs or alterations in the premises of such tenant.

 

14.             No premises of any tenant shall be used for
lodging or sleeping or for any immoral or illegal purpose.

 

15.             The requirements of tenants for any services
by Landlord will be attended to only upon prior application to the Landlord.
Employees of Landlord shall not perform any work or do anything outside of
their regular duties, unless under special instructions from Landlord.

 

16.             Canvassing, soliciting and peddling in the
Project are prohibited and each tenant shall cooperate to prevent the same.

 

17.             Each tenant shall store its trash and garbage
within its premises. No material shall be placed in the trash boxes or
receptacles if such material is of such nature that it may not be disposed of
in the ordinary and customary manner of removing and disposing of office
building trash and garbage in the City of Hillsboro without being in violation
of any law or ordinance governing such disposal. All garbage and refuse
disposal shall be made only through entryways and elevators provided for such
purposes and at such times as Landlord shall designate. No tenant shall cause
or permit any unusual or objectionable odors to emanate from its premises which
would annoy other tenants or create a public or private nuisance.

 

18.             No coin vending machine, video game, coin or
token operated amusement device or similar machine shall be used or installed
in any tenant’s premises without Landlord’s prior written consent.

 

19.             No bankruptcy, going out of business, liquidation
or other form of distress sale shall be held on any of tenant’s premises. No
advertisement shall be done by loudspeaker, barkers, flashing lights or
displays or other methods not consistent with the character of a high-quality
office building.

 

20.             Nothing shall be done or permitted in any
tenant’s premises, and nothing shall be brought into or kept in any tenant’s
premises, which would impair or interfere with the economic heating, cleaning
or other servicing of the Building or the premises, or the use or enjoyment by
any other tenant of any other premises, nor shall there be installed by any
tenant any ventilating, air conditioning, electrical or other equipment of any
kind which, in the reasonable judgment of Landlord, might cause any such impairment
or interference.

 

21.             No acids, vapors or other similar caustic
materials shall be discharged or permitted to be discharged into the waste
lines, vents or flues of the Building other than the vent for
hard soldering as provided in the initial improvements. The water
and wash closets and other plumbing fixtures in or serving any tenant’s
premises shall not be used for any purpose other than the purposes for which
they were designed or constructed, and no sweepings, rubbish, rags, acids or
other foreign substances shall be deposited therein. All damages resulting from
any misuse of the fixtures shall be borne by the tenant who, or whose servants,
employees, agents, invitees, visitors or licensees shall have caused the same.

 

 

10

 

22.             All entrance doors in each tenant’s premises
shall be left locked and all windows shall be left closed by the tenant when
the tenant’s premises are not in use. Entrance doors to the tenant’s premises
shall not be left open at any time. Each tenant, before closing and leaving its
premises at any time, shall turn out all lights.

 

23.             Hand trucks not equipped with rubber tires
and side guards shall not be used within the Building.

 

24.             Window coverings for all windows in each
tenant’s premises above the ground floor shall be lowered as reasonably
required because of the position of the sun, during the operation of the
Building air-conditioning system to cool or ventilate the tenant’s premises.

 

25.             Landlord reserves the right to rescind,
modify, alter or waive any rule or regulation at any time prescribed for
the Project when, in its reasonable judgment, it deems it necessary, desirable
or proper for its best interest and for the best interests of the tenants
generally, and no alteration or waiver of any rule or regulation in favor
of one tenant shall operate as an alteration or waiver in favor of any other
tenant. Landlord shall not be responsible to any tenant for the non-observance
or violation by any other tenant of any of the rules and regulations at
any time prescribed for the Project.

 

26.             Landlord reserves the right to add to, modify
or otherwise change these Rules and Regulations. Such changes shall become
effective when written notice thereof is provided to tenants of the Project.

 

 

11

 

	
   

  	
  EXHIBIT “F-1” TO THAT
  LEASE DATED JUNE 1, 2005 BY

  
	
   

  	
  AND BETWEEN MARK.
  TANASBOURNE L.L.C. AN OREGON

  
	
   

  	
  LIMITED LIABILITY COMPANY,
  LANDLORD, AND

  
	
   

  	
  MATHSTAR. A MINNESOTA
  CORPORATION, TENANT

  
	
   

  	
  /s/ JM

  	
    LANDLORD

  	
  /s/ DS

  	
    TENANT

  

 

 

 

	
   

  	
  EXHIBIT “F-2” TO THAT
  LEASE DATED JUNE 1, 2005 BY

  
	
   

  	
  AND BETWEEN MARK.
  TANASBOURNE L.L.C. AN OREGON

  
	
   

  	
  LIMITED LIABILITY COMPANY,
  LANDLORD, AND

  
	
   

  	
  MATHSTAR. A MINNESOTA
  CORPORATION, TENANT

  
	
   

  	
  /s/ JM

  	
    LANDLORD

  	
  /s/ DS

  	
    TENANT

  

 

 

 

ADDENDUM TO THE LEASE DATED JUNE 1, 2005 BY AND BETWEEN

SUNSET CENTER, LLC, AN OREGON LIMITED LIABILITY COMPANY, LANDLORD

AND MATHSTAR, A MINNESOTA CORPORATION, TENANT

 

29.17      OPTION TO EXPAND.

 

So
long as Tenant is not then in default of the Lease beyond any applicable cure
periods, Tenant shall have a one-time option to expand the Premises (the
“Second Floor Expansion Option”) by adding approximately 2,072 rentable square
feet located on the second floor of the Building as outlined on the attached Exhibit A-1
((the “Second Floor Expansion Option”), in accordance with the terms of this
Section 29.17. If Tenant wishes to exercise the Second Floor Expansion
Option, Tenant shall do so by giving Landlord written notice of its exercise of
the Second Floor Expansion Option (the “Second Floor Expansion Notice”) no
later than on June 30, 2006. If Tenant does not give Landlord a written
notice exercising Tenant’s Second Floor Expansion Option, then the Option shall
terminate and shall be of no further force or effect.

 

If
Tenant gives Landlord written notice of its exercise of the Second Floor
Expansion Option on or before June 30, 2006, then, effective on the
earlier of (a) the date on which tenant improvements in the Second Floor
Expansion Space are substantially completed or (b) September 1, 2006
(the “Second Floor Expansion Space Commencement Date”), the Second Floor
Expansion Space shall be added to the Premises. The annual Base Rent for the
Second Floor Expansion Space (the “Second Floor Expansion Space Base Rent”)
shall equal the rate per square foot at the time of the Second Floor Expansion
Space Commencement Date, as set forth in the Summary of Fundamental Provisions,
Item #5 of this Lease, multiplied by 2,072’, and the Second Floor Expansion
Space Base Rent shall increase as set forth in the Summary of Fundamental
Provisions, Item #5 of the Lease. The tenant improvement allowance to be
provided by Landlord for the Second Floor Expansion Space shall equal $23.86
per rentable square foot.

 

Effective
on the Second Floor Expansion Space Commencement Date, the following shall
occur: (a) the Second Floor Expansion Space shall be added to the Premises
for the remainder of the Term of the Lease, (b) Base Rent for the Premises
shall be increased by an amount equal to the Second Floor Base Rent determined
as provided in this Section 29.17, and (c) Tenant’s Proportionate
Share of Operating Expenses shall increase proportionately based on the
increase in square footage in the Premises. Subject to the tenant improvement allowance
to be provided by Landlord and Landlord’s obligations regarding common areas
described above in this Section 29.17, Tenant shall lease the Second Floor
Expansion Space in its “as-is” condition as of the Second Floor Expansion Space
Commencement Date. The terms of the work agreement attached as Exhibit C
to this Amendment shall apply to the improvements to the Second Floor Expansion
Space and the use of such tenant improvement allowance as if the Second Floor
Expansion Space were the original Premises leased under this Lease.

 

29.18      RIGHT OF FIRST REFUSAL.

 

During
the first eighteen (18) months of the Lease, in the event a third party is
interested in space on the second floor, Landlord agrees to give Tenant prior
written notice. Tenant shall have seventy-two (72) hours to respond to the
notice and to negotiate a lease satisfactory to Landlord, or Landlord may lease
the area to the third party and Tenant shall have no further rights to this
space. The same terms and conditions shall apply to said expansion space
including, but not limited to, the base rental rate and an improvement
allowance equal to $.46 per foot for each month remaining in the lease term
effective with the addition of the additional space to the leased Premises.
This Right of First Refusal shall expire on December 31, 2006.

 

29.19      OPTION TO TERMINATION.

 

Provided
Tenant is not in default, Tenant shall have the option to terminate the Lease
effective December 31, 2008 by giving Landlord one hundred-eighty (180)
days prior written notice. Upon said termination, Tenant shall be required to
pay Landlord the unamortized balance of the cost of tenant improvements and all
leasing commissions.

 

 

12

 

The
balance shall be computed on the basis of an even payment amortization over the
lease term at 6% annual interest and shall be due and payable on the date that
the termination notice is given to Landlord.

 

 

13

 

 

July 24, 2007

 

 

Jim Cruckshank

MathStar

19075 NW Tanasbourne Drive

Hillsboro, Or 97124

 

Dear Mr. Cruckshank:

 

Reference is made to that
certain Lease dated June 1, 2005, and as amended September 23, 2005
by and between MARK TANASBOURNE LLC, an Oregon limited liability company,
Landlord and MATHSTAR, a Minnesota corporation, Tenant.

 

This letter shall serve as an
amendment to said Lease and shall change only the following terms and
conditions:

 

	
  PREMISES:

  	
  Effective
  upon substantial completion of the tenant improvements, Suite 290, an
  area of approximately 2,360 rentable square feet, as shown on the attached
  Exhibit A (“Second Expansion Premises”) shall be added to the Premises.

  
	
   

  	
   

  
	
  TENANT’S

  PROPORTIONATE

  SHARE:

  	
  Effective
  upon substantial completion, Tenant’s proportionate share for the Second
  Expansion Premises shall be 3.39% with a Base Year of 2007. The proportionate
  share for the Total Premises shall be 20.65%.

  
	
   

  	
   

  
	
  BASE
  MONTHLY

  RENTAL:

  	
  Effective
  upon substantial completion of the tenant improvements Base Monthly Rental
  for the Second Expansion Premises shall be as follows:

  
	
   

  	
   

  
	
   

  	
   

  	
  Substantial
  compl – 6/30/08

  	
  21.63

  	
  $4,253.90/mo.

  
	
   

  	
   

  	
  7/1/08
  – 6/30/09

  	
  22.68

  	
  $4,460.40/mo.

  
	
   

  	
   

  	
  7/1/09
  – 6/30/10

  	
  22.95

  	
  $4,513.50/mo.

  
	
   

  	
   

  	
  7/1/10
  – 2/28/11

  	
  23.64

  	
  $4,649.20/mo.

  
	
   

  	
   

  	
  3/1/11
  – 8/31/11

  	
  24.35

  	
  $4,788.83/mo.

  
	
   

  	
   

  
	
  LEASE
  EXTENSION,

  SUITES 200 AND 210:

  	
  The
  lease of the existing premises, Suites 200 and 210 shall be extended to
  August 31, 2011.

  
	
   

  	
   

  
	
  TENANT

  IMPROVEMENTS

  	
  Landlord
  shall improve the leased premises per the attached Exhibit “B”. Any and
  all other improvements shall be at the sole cost of the Tenant.

  
	
   

  	
   

  
	
  OPTION
  TO TERMINATE

  	
  There
  are no further options to terminate.

  

 

 

111 SOUTHWEST COLUMBIA, SUITE 1380 · PORTLAND, OREGON 97201 · TELEPHONE: (503) 223-9203 FAX: (503)
223-4606 www.melvinmark.com

 

CORE
Worldwide Commercial Real Estate Services  · Portland · Seattle · San Francisco · Sacramento · Long Beach · Los Angeles · San Diego · Honolulu · Denver

Phoenix ·
Dallas ·
Houston ·
Chicago ·
New York ·
Boston · Hartford
· Baltimore · Washington D.C. · Orlando · Atlanta · Toronto · London

 

 

MathStar

July 24,
2007

Page 2

 

All
other terms and conditions of said Lease shall remain the same. If the terms of
this Amendment meet with your approval, please sign all copies and return to us
for execution by Mark Tanasbourne LLC, Landlord. We will return one fully
executed copy for each of your files.

 

Thank
you.

 

Sincerely,

 

	
  /s/ M.
  James Mark

  	
   

  	
   

  	
   

  

 

M.
James Mark

Chief
Executive Officer

Melvin Mark Companies

 

	
  MARK
  TANASBOURNE LLC

  	
  MATHSTAR,
  a Minnesota Corporation

  
	
  an
  Oregon limited liability company

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Mark
  Properties Limited Partnership

  	
  By:

  	
  /s/ James W. Cruckshank 

  	
   

  
	
   

  	
  an
  Oregon limited partnership

  	
   

  	
   

  
	
   

  	
  Managing
  Member

  	
  Its:

  	
  VP Admin/CFO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Mark
  Management LLC

  	
   

  	
   

  
	
   

  	
  an
  Oregon limited liability company

  	
   

  	
   

  
	
   

  	
  General
  Partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. James Mark

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  M. James Mark

  	
   

  	
   

  
	
   

  	
   

  	
  Manager

  	
   

  	
   

  
							

 

 

MathStar

July 24,
2007

Page 2

 

EXHIBIT A

FLOOR PLAN

 

 

 

MathStar

July 24,
2007

Page 2

EXHIBIT B

CONSTRUCTION
BUDGET SHEET

 

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MELVIN MARK CONSTRUCTION
  COMPANY

  	
   

  	
   

  
	
   

  	
  CONSTRUCTION BUDGET
  SHEET

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  	
  MathStar

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BUILDING:

  	
  Sunset Center

  	
   

  	
   

  
	
   

  	
  SUITE:

  	
  # 200

  	
   

  	
   

  
	
   

  	
  RSF:

  	
   

  	
  $35.02/rsf

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JOB NO:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ESTIMATE DATE:

  	
  July 16,
  2007

  	
   

  	
  revised 07/19/07

  	
   

  
	
   

  	
  PLAN DATE:

  	
  July 3, 2007

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  DESCRIPTION

  	
  QUOTE

  	
  DESCRIPTION

  	
    QUOTE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Demo existing reception
  wall

  	
  75.00

  	
   

  	
  Furnish & install (29) 2X4 light fixtures:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (1) new exit sign, (3) emergency 2X4 

  	
   

  	
   

  	
   

  
	
   

  	
  Demising wall and
  installation

  	
  3,135.00

  	
   

  	
  fixtures; (8) 120 volt duplex outlets;

  	
   

  	
   

  	
   

  
	
   

  	
  New sheetrock partition
  walls w/ Insulation

  	
  6,640.00

  	
   

  	
  (4) light switches; (4) power base

  	
   

  	
   

  	
   

  
	
   

  	
  Exterior shell walls and
  vapor barrier

  	
  1,210.00

  	
   

  	
  feeds; (2) floor feeds; (1) power for

  	
   

  	
   

  	
   

  
	
   

  	
  Carpet protection

  	
  105.00

  	
   

  	
  card reader; VHV power connection;

  	
   

  	
   

  	
   

  
	
   

  	
  Pick up and haul
  materials and clean up 

  	
  736.00

  	
   

  	
  (6) phone/data boxes: fire alarm

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  devices; furnish and install (4) new

  	
   

  	
   

  	
   

  
	
   

  	
  Furnish and install new
  doors, frames and 

  	
   

  	
   

  	
  fluorescent recessed down lights w/

  	
   

  	
   

  	
   

  
	
   

  	
  relites

  	
  7,084.00

  	
   

  	
  dimming ballasts & (2) fluorescent

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  dimmer switches

  	
  15,698.00

  	
   

  	
   

  
	
   

  	
  Install building stock
  ceiling tile and grid

  	
  4,486.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  New  duct work, temperature sensors;

  	
   

  	
   

  	
   

  
	
   

  	
  New fire protection
  sprinklers

  	
  3,146.00

  	
   

  	
  Install (1) new VHV cooling unit

  	
  10,475.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Paint walls, doors,
  frames & relite frames

  	
  1,675.00

  	
   

  	
  Furnish &
  install new direct glue

  	
  4,713.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  carpet to match
  existing; floor prep

  	
  106.00

  	
   

  	
   

  
	
   

  	
  (10) exterior &
  (2) interior mint·blinds

  	
  1,560.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  MMC labor

  	
  350.00

  	
   

  	
   

  
	
   

  	
  Furnish &
  Install new 4” rubber base

  	
  427.00

  	
   

  	
  Construction clean up

  	
  575.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Contingency

  	
  500.00

  	
   

  	
   

  
	
   

  	
  (THIS IS NOT AN INVOICE)

  	
   

  	
   

  	
   

  	
  SUB TOTAL #1

  	
  62,696.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  PERMITS &
  INSPECTIONS

  	
  1,700.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  OVERHEAD & FEE

  	
  9,659.40

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  SUB TOTAL #2

  	
  74,055.40

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ARCHITECT FEE

  	
  1,500.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  DESIGNER FEE

  	
  0.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  TOTAL ESTIMATED COST

  	
  75,555.40

  	
   

  	
   

  
	
   

  	
  CLARIFICATIONS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AUTHORIZATION SIGNATURES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MMCC:

  	
  /s/ David W. Zier

  	
   

  	
  Date:

  	
   

  	
  7/19/07

  	
   

  	
   

  
	
   

  	
   

  	
  David W. Zier, President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  Date:

  	
   

  	
  07/19/07

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THIS WORK IS TO BE PAID FOR BY:

  	
  Tenant

  	
  —

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Owner

  	
  —Exhibit
10.31

 

LEASE AGREEMENT

 

THIS
LEASE AGREEMENT (“Lease”) is made this 17th day of January, 2008, by and
between Canton Crossing Tower, LLC, a limited liability company (hereinafter
referred to as “Landlord”) and Next Generation Financial Services, a division
of First Mariner Mortgage, a division of First Mariner Bank, a Maryland Financial Institution (hereinafter referred to as “Tenant”).

 

W I T N E S S E T H:

 

In
consideration of the premises hereof and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties do
hereby mutually agree as follows:

 

1.                                       Premises. Landlord does hereby lease to Tenant, and Tenant does hereby lease
from Landlord, for the term and on the conditions hereinafter provided, approximately
8,500 rentable square feet of space on the 2nd floor, and known as
Suite 210 (hereinafter referred to as the “Demised Premises”), of the
building known as Canton Crossing Tower (“Building”), together with the right
to the non-exclusive use, in common with others, of such footways, hallways,
parking areas and other facilities designed for common use in the Building or
on the land on which the Building is located (hereinafter collectively referred
to as the “Property”). The Demised Premises are marked on the plan attached
hereto as Exhibit A and incorporated herein by reference.

 

2.                                       Term.

 

(a)                                       The Demised Premises are leased for a term
(hereinafter called the “Initial Term”) commencing on the first day of
February, 2008, (or within ninety (90) days after receipt of written notice of
Demised Premises being available for the Tenant’s use and occupancy)
(hereinafter referred to as the “Lease Commencement Date”) and ending on the
last day of January 2013 (hereinafter referred to as the “Expiration Date”),
unless the Term shall sooner cease or expire as hereinafter provided.

 

Under the following terms and conditions, Tenant shall have the option
to extend the Initial Term of this Lease for 1 additional term of 5 years (such
additional term being hereinafter referred to as the “Extension Period”). Such
option shall be null and void unless (a) Tenant notifies Landlord in
writing, of Tenant’s election to exercise that option not more than twelve (12)
months, nor less than six (6) months prior to the date this Lease would
otherwise expire; and (b) at the time of such exercise and at all times
thereafter prior to the commencement of any Extension Period, this Lease is in
full force and effect, Tenant is in actual occupancy of the Premises, and
Tenant is not

 

 

then
in default of any of its obligations under this lease. Such Extension Period
shall be upon the same terms and conditions as apply with respect to the
Initial Term.

 

“Term”
shall include each Extension Period for which the foregoing extension option shall
be effective and has been duly exercised hereunder.

 

(b)                                      Landlord shall give Tenant sixty (60) days
prior written notice of the anticipated date of substantial completion of the
work to be performed in the Demised Premises pursuant to the provisions of Exhibit B which is attached hereto and
incorporated herein by reference, and Tenant agrees to accept the Demised
Premises which shall be deemed available for Tenant’s use and occupancy after
Tenant’s or Tenant’s designated representative on-site examination of the
Demised Premises, when Landlord has (i) substantially completed the work
required to be performed by Landlord, as described in the Exhibit B, and
(ii) procured a certificate of occupancy for the Demised Premises for the
purposes herein provided. The work to be done by Landlord shall be deemed
substantially completed even though minor details or adjustments which shall
not materially interfere with Tenant’s use other than ingress and egress of the
Demised Premises to conduct its business in the ordinary course may not then
have been completed, but which work Landlord shall complete within thirty (30)
days thereafter.

 

(c)                                       By taking of possession of the Demised
Premises, Tenant shall be deemed to have accepted the same and to have
acknowledged that Landlord’s work has been substantially completed subject to
the Landlord’s completion of the items referenced in section 2 (b) above.

 

(d)                                      After the Lease Commencement Date, upon
request of either party, Landlord and Tenant shall promptly execute, acknowledge
and deliver to one another a written instrument, in the form of Exhibit C
which is attached hereto, certifying the Lease Commencement Date and Expiration
Date.

 

(e)                                       Tenant covenants and agrees to endeavor in
good faith to comply with the time path to be established by Landlord in
connection with the completion of the work to be performed by Landlord, as
described in Exhibit B. If Tenant causes a delay in the delivery of
possession of the Demised Premises by virtue of having failed to provide or
approve plans and specifications, samples or other items which Tenant is
required to provide or approve, within the deadlines required therefor, or by
virtue of having requested changes in the work, or for any other material
reason, then in such event, the Lease Commencement Date shall be on the date on
which the Demised Premises would have been available for Tenant’s use and
occupancy but for such Tenant delay, and Tenant’s obligations hereunder shall
commence as of such date.

 

3.                                       Rent.

 

(a)                                       Tenant shall pay as Minimum Rent (hereinafter
referred to as “Minimum Rent”) the amount of $25.00 per rental square foot or
$212,500.00 per annum, payable in equal monthly installments of $17,708.34.
Additionally, tenant shall pay the monthly common area maintenance charge of $6.50
per rental square foot or $55,250.00 per annum, payable in monthly installments
of $4,604.17; provided, however, the monthly common area maintenance charge
shall be deferred and forgiven for so long as Tenant remains a division of
First Mariner Bank. If

 

2

 

there
occurs a change in ownership or control of Tenant, First Mariner Bank or First
Mariner Bancorp, then, at the time of such change in control, the monthly
common area maintenance charge described above shall be due and payable
thereafter by Tenant, under the new ownership or control. The payments
set forth in the preceding two (2) sentences shall commence on the earlier
to occur of either (i) August 1, 2008, or (ii) the date of
substantial completion of the Premises Work for the Demised Premises, in
accordance with Section 12(d) and Exhibit B, at such time as
Tenant takes possession of the Demised Premises, as set forth in Sections
2(b) and (c) above (the “Rent Commencement Date”). The first installment
shall be payable upon the execution of this Lease, to be credited for the first
(lst) month following the Rent Commencement
Date, and the remaining installments of which shall be payable in advance on
the first (1st) day of each month thereafter at the office of Landlord herein
designated (or at such other place as Landlord may designate in a notice to
Tenant), without prior demand therefor and without any setoff, deduction or
counterclaim whatsoever.

 

(b)                                      Upon signing this Lease, Tenant shall deposit
with the Landlord the sum of $17,708.34, which shall be retained by the
Landlord as security for the Tenant’s payment of Rent and performance of all of
its obligations under the provisions of this lease. On the occurrence of an
Event of Default (as defined herein), the Landlord shall be entitled, at its
sole discretion, to (i) apply any or all of such sum in payment of any
Rent then due and unpaid, any expense incurred by the Landlord in curing any
such default, and/or any damages incurred by the Landlord by reason of such
default (including but not limited to reasonable attorneys’ fees), in which
event Tenant shall immediately restore the amount so applied, and/or
(ii) to retain any or all of such sum in liquidation of any or all damages
suffered by the Landlord by reason of such default. However, the foregoing
shall not serve in any event to limit the rights, remedies and damages accruing
to the Landlord in any provision of this Lease on account of default by Tenant.
The security deposit shall not be applied to the last month’s installment of
Rent; rather, upon the termination of this Lease, any of such security deposit
then remaining shall be returned to the Tenant. Such security deposit shall not
bear interest while being held by the Landlord hereunder.

 

(c)                                       Tenant shall pay as additional rent
(“Additional Rent”) all such other amounts as shall become due and payable by
Tenant to Landlord under this Lease. Except as specified elsewhere in this
Lease, Additional Rent shall be paid by Tenant with the next monthly
installment of Minimum Rent falling due upon receipt of an itemized statement.
Landlord shall have the same remedies for default in the payment of Additional
Rent as are available to Landlord in the case of default in the payment of
Minimum Rent. (Hereinafter, the term “Rent” shall collectively refer to Minimum
Rent and Additional Rent.)

 

(d)                                      If the Term of this Lease begins on a date
other than the first day of a month, Rent from such other date to the first day
of the following month shall be prorated at the rate of one-thirtieth (1/30th)
of the fixed monthly rental for each day, payable in advance.

 

4.                                       Landlord’s Costs.

 

(a)                                       With the commencement of the Lease, and
continuing for each subsequent calendar year or portion thereof during the
Term, Tenant agrees to pay Landlord as Additional Rent, Tenant’s Pro Rata Share
(as hereinafter defined) of the Landlord’s Costs (as hereinafter defined).

 

3

 

(b)                                 For purpose of this Lease:

 

(i)                                          “Tenant’s Pro Rata Share” shall mean 1.78%
representing the ratio that the rentable area of the Demised Premises (i.e.,
8,500 rentable square feet) bears to the total rentable area in the Building
(i.e., 476,915 rentable square feet).

 

(ii)                                       “Landlord’s Costs” shall mean the sum of
Taxes and Assessments and Operating Expenses.

 

(iii)                                    “Taxes and Assessments” shall mean all taxes,
assessments and governmental charges (including personal property and real
estate taxes), whether federal, state, county or municipal, and whether they be
by taxing districts or authorities presently taxing the Property or by others
subsequently created, and any other taxes and assessments (including franchise
taxes) attributable to the Property or its operation, whether or not directly
paid by Landlord, excluding, however, federal and state taxes on income (unless
such income taxes replace, in whole or in part, real estate taxes). Taxes and
Assessments shall be the amount due in cash for any year and shall not be
determined on an accrual or fiscal year basis. It is agreed that Tenant shall
be responsible for ad valorem taxes on its
personal property.

 

(iv)                                   Commencing after the calendar year in which
the Commencement Date falls, Tenant shall pay to Landlord in each year of the
Term a Pro Rata Share of the amount by which the Operating Expenses other than
those charges covered in paragraph 3A and denominated as “common area
maintenance charge”(defined below) for each such year exceed the Base Operating
Expenses (defined below). “Operating Expenses” shall mean all expenses, costs
and disbursements of every kind and nature incurred in conjunction with the
ownership, management, maintenance, repair and operation of the Building and
Property, including but not limited to the following: (1) cost of wages
and salaries of all employees engaged in the operation and maintenance of the
Building and surrounding grounds and common areas, including but not limited to
payroll taxes, insurance and benefits; (2) cost of all supplies and
materials used in the operation, maintenance and repair of the Building and all
other portions of the Property; (3) cost of all utilities (including
surcharges) including but not limited to water, sewer, HVAC Facilities Charges
electricity and gas for both the rentable space and common areas of the
Building; (4) costs incurred under all maintenance and service agreements
for the Building, including but not limited to access control, energy
management services, window cleaning, elevator maintenance, janitorial service
and landscaping; (5) cost of insurance relating to all of such property,
including but not limited to the cost of casualty and liability insurance;
(7) property management fees and expenses; (8) cost of audit and
accounting services solely for the Property; (9) the costs of any repairs,
replacements or capital improvements required or made necessary by law or
changes in law; (10) cost of any capital improvements made to the Building
that, in the Landlord’s reasonable judgment, will reduce other operating
expenses or increase energy efficiency; (11) cost of any licenses or permits
required by any public authority; (12) all real property taxes, assessments,
sewer rates, ad valorem charges, rents and charges, front foot benefit charges,
all other governmental impositions in the nature of any of the foregoing, and
all costs and expenses (including attorneys’ fees and court costs or other
proceedings) incurred in contesting property tax assessments or any other such
governmental impositions. For the purposes of this provision, operating Expenses
shall not include (a) the cost of capital improvements (except as
expressly

 

4

 

provided
above), (b) the cost of tenant improvements within tenant spaces,
(c) ground rent or debt service, or (d) depreciation. The “Base
Operating Expenses” shall be defined in the form of an Expense Stop equal to
$6.50 per rentable square foot (the “Expense Stop”). Operating Expenses
applicable during any calendar year during the Term of this lease that exceed
the Expense Stop will be billed to the Tenant as Additional Rent. Tenant shall
not be entitled to any credit or rebate in the event Operating Expenses in any
one-year during the term are lower than the Expense Stop, unless Landlord has
offered another Office Space tenant a lesser amount.

 

(c)                                  Landlord shall endeavor to give to Tenant, on
or before the first day of April of each year, a written statement
prepared by Landlord setting forth the increase, if any, in the Additional Rent
payable by Tenant hereunder; provided, however that Landlord’s failure to give
such statement by said date shall not constitute a waiver by Landlord of its
right to require an increase in Additional Rent. An amount equal to 110% of any
such increase shall be used as an estimate of the increase in Additional Rent
for the then current year. The amount of the estimate shall be divided into
twelve (12) equal monthly installments, and Tenant shall pay to Landlord
concurrently with the regular Minimum Rent payment next due following the
receipt of such statement, an amount equal to one (1) monthly installment
multiplied by the number of months from January in the calendar year in
which said statement is submitted to the month of such payment, both months
inclusive. Subsequent installments shall be payable concurrently with the
regular Minimum Rent payments for the balance of that calendar year, and shall
continue until the next year’s statement is rendered. If during the next or any
succeeding year the actual increase exceeds the estimated increase in Additional
Rent, then upon receipt of a statement thereof from Landlord, Tenant shall pay
a lump sum equal to the difference between the actual increase and the total of
the monthly installments of estimated increases paid in the previous calendar
year for which comparison is then being made. If in any year the estimated
increase shall exceed the actual increase, then Landlord shall provide Tenant
with a credit toward the next installment of Minimum Rent in an amount equal to
the difference between the estimated increase and the actual increase. Upon
termination of this Lease, any money owed by one party to the other shall be
promptly paid. The foregoing obligation shall survive the termination or
expiration of this Lease. Failure of Landlord to provide the timely written
statements, on three separate occasions, setting forth the increase shall
constitute waiver. Upon each failure of Landlord to provide said statement,
Tenant must provide written notification of such failure, and provide Landlord
30 days to cure default.

 

(d)                                 Each statement provided by Landlord pursuant
to this Section shall be conclusive and binding upon Tenant unless, within
thirty (30) days after receipt of the statement, Tenant shall notify Landlord
that it disputes the correctness of the statement, specifying the respects in
which Tenant considers the statement to be incorrect. If Landlord and Tenant
are unable to resolve the dispute, Tenant shall then have the right to inspect
Landlord’s books and records relating to the statement. Landlord agrees to
cooperate and make the books and records available for Tenant inspection, upon
prior written notification from Tenant giving Landlord 30 days to comply.
Pending determination of the dispute, Tenant shall pay, within ten
(10) days after notice thereof, any amounts due from Tenant in accordance
with the statement, but such payment shall be without prejudice to Tenant’s
position.

 

5.                                       Annual Adjustment to Rent. Commencing on the first (1st) anniversary
of the Lease Commencement Date, and on each such anniversary thereafter during
the Term (each of such

 

5

 

dates
being hereinafter referred to as “Adjustment Date”), the Minimum Rent shall be
increased by an amount equal to the product of (i) the Minimum Rent in
effect immediately preceding the Adjustment Date then at hand (disregarding any
rental concessions or abatements then in effect), and (ii) CPI not to
exceed three percent (3%). The Minimum Rent, as adjusted, shall be due and
payable as of such Adjustment Date and on the first (1st) day of each month
thereafter until the next Adjustment Date or the end of the Term, as
applicable.

 

6.                                  Past Due Rent and Late Charges. Each payment of Rent shall be made promptly
when due, without any demand, deduction or setoff whatsoever, at the place
directed by the Landlord. Any payment of Rent not made when due shall, at
Landlord’s sole option, bear interest at the rate of 18% per annum from the due
date until paid. Additionally, any payment of Rent not paid within 10 days of
when due shall be considered delinquent and subject to a late payment charge,
for each occurrence of delinquency, of 5% of the amount overdue and payable.
This late payment shall be in addition to the interest provided for above and
shall be due and payable with the next succeeding Rent payment. The obligation
to pay Rent shall survive the termination of the Lease.

 

7.                                  Use of Demised Premises. Tenant shall continuously use and occupy
the Demised Premises solely for providing financial services and products
subject to, and in accordance with, all applicable zoning and other
governmental regulations. Tenant shall not abandon or substantially abandon the
Demised Premises. Tenant shall not obstruct, interfere or conflict with the
rights of other tenants, nor perform or fail to perform any action which would
conflict with the fire laws or regulations, or with any insurance policy for
the Property, or with any local, state or federal statutes, rules or
regulations now existing or subsequently enacted, nor shall Tenant use or
permit the Demised Premises (or any part thereof) to be used for any
disorderly, unlawful or hazardous purposes, or for any purpose other than that
specified herein. Tenant shall not generate trash or other refuse in form
different, or quantity greater, than customarily generated by a normal office
use for an area the size of the Demised Premises.

 

8.                                  Common Area. All common areas and facilities not within the Demised Premises which
Tenant is hereby permitted to use are to be used and occupied under a revocable license, on a non-exclusive basis in common with other
tenants and their respective employees, agents and invitees; and if the amount
of such areas shall be diminished, Landlord shall not be subject to any
liability nor shall Tenant be entitled to any compensation or diminution or
abatement of Rent, nor shall such diminution of such areas be deemed
constructive or actual eviction; provided however, that such diminution shall
not impair ingress or egress nor impair Tenant’s ability to conduct business in
the ordinary manner.

 

9.                                  Parking. Parking for
the Property includes the non-exclusive right to use the surface parking areas,
as directed by Landlord. The parking areas and surface lot are referred to as
the “Parking Facilities.” The use of the Parking Facilities by Tenant, and
Tenant’s employees, visitors, invitees and licensees, shall be at their sole
risk and expense, and in no event shall Landlord have any liability for damage, to or theft or loss of, property of Tenant or of Tenant’s
employees, visitors, invitees or licensees sustained in or about the Parking
Facilities. The Parking Facilities shall be subject to reasonable
rules and regulations governing the use thereof and from time to time be
relocated with reasonable notice to Tenant. Tenant agrees to keep, observe and
comply with all such rules and regulations, and will direct and require
its

 

6

 

employees,
visitors, invitees and licensees to comply therewith. No one is authorized to
accept possession of any vehicle from Tenant or from Tenant’s employees,
visitors, invitees or licensees, or to accept custody of any articles from
Tenant. Tenant agrees to keep, observe and comply with all such rules and
regulations, and will direct and require its employees, visitors, invitees and
licensees to comply therewith. No one is authorized to accept possession of any
vehicle from Tenant or from Tenant’s employees, visitors, invitees or
licensees, or to accept custody of any articles from Tenant.

 

10.                            Subletting and Assignment. Other than to it’s wholly owned
subsidiaries and affiliates, Tenant shall not sublet the Demised Premises or
any part thereof, nor transfer possession or occupancy thereof to any person,
firm or corporation, nor transfer or assign this Lease, without the prior
written consent of Landlord, which consent shall not be unreasonably withheld
or delayed, nor shall any subletting or assignment hereof be effected by
operation of law or otherwise without the prior written consent of Landlord,
which consent shall not be unreasonably withheld or delayed. If Tenant is a
non-public corporation, any transfer of a majority of Tenant’s issued and
outstanding capital stock shall be deemed an assignment under this Section. If
Tenant is a partnership, any transfer of any interest in the partnership or
other change in the composition of the partnership which results in a change in
the management of Tenant from the person(s) managing the partnership on
the date hereof shall be deemed an assignment under this Section. In the event
Tenant desires to assign this Lease or sublet all or any portion of the Demised
Premises, Tenant shall give to Landlord thirty (30) days prior written notice
of Tenant’s intention to do so. Within thirty (30) days after receipt of said
notice, Landlord shall have the right to sublet the Demised Premises from
Tenant at the same Minimum Rent and Additional Rent stipulated herein. In the
event Landlord has not exercised its right to sublet the Demised Premises as
provided above in this paragraph, Tenant may assign this Lease or sublet all or
a portion of the Demised Premises as set forth in the notice after first
obtaining the written consent of Landlord, as aforesaid, which consent shall
not be unreasonably withheld or delayed. If Tenant does not so assign or sublet
within sixty (60) days of the original notice to Landlord pursuant to this
paragraph, then Tenant shall again be required to comply with the notice
provision hereof, and Landlord shall again have the right to sublet. The
consent by Landlord to any assignment or subletting by Tenant to another party
shall not be construed as a waiver or release of Tenant from the terms of any
covenant or obligation under this Lease, nor shall the collection or acceptance
of rent from any such assignee or subtenant constitute a waiver or release of
Tenant from any covenant or obligation contained in this Lease, nor shall any
such assignment or subletting relieve Tenant from the requirement to give
Landlord thirty (30) days prior written notice or from obtaining Landlord’s
prior written consent to any future assignment or subletting. Tenant shall pay
as Additional Rent all costs including reasonable attorney’s fees, incurred by
Landlord, in connection with the approving and documenting any subletting/or
assignment. In the event of a default of Tenant under Section 26, Tenant
hereby assigns to Landlord the rent due from any subtenant of Tenant, and
hereby authorizes each such subtenant to pay said rent directly to Landlord.
Such assignment shall cease upon the curing of the default.

 

11.                            Upkeep of Demised Premises and Surrender.

 

(a)                                  Tenant shall keep the Demised Premises and
the fixtures and equipment therein in a clean, safe and sanitary condition,
shall take good care thereof and shall permit no waste or injury thereto.
Tenant shall make all repairs to the Demised Premises necessitated by the acts
or

 

7

 

omissions
of Tenant, or its agents, employees, contractors, licensees or invitees.

 

(b)                                 Tenant shall, at the expiration or
termination of the Term of this Lease, surrender and deliver the Demised
Premises to Landlord broom clean, and in the same order and condition as the
same now is or shall be in at the commencement of the Term together with all
equipment and built-ins such as refrigerator,
microwave oven, and cabinets, ordinary wear and tear and casualties for which
Tenant is not responsible hereunder excepted. Upon the expiration or
termination of this Lease, Landlord shall have the right to re-enter and resume
possession of the Demised Premises.

 

12.                                 Alterations.

 

(a)                                  The Landlord shall have the right to perform
all Premises Work (as hereinafter defined) reasonably requested by Tenant, at
Tenant’s expense under the conditions as defined in Section 12d below,
during the Term of the Lease. Tenant understands and agrees that any work
requiring a building permit will necessitate preparation of drawings and Tenant
agrees to pay for same, including the cost of the building permit. The Landlord
shall charge Tenant a fee equal to ten percent (10%) of the total cost of
alterations in the event it elects to perform said work. In the event that
Landlord does not elect to perform said Premises Work, then Tenant shall obtain
Landlord’s prior written consent, which consent shall not be unreasonably
withheld or delayed, prior to performing any Premises Work and shall use
contractors that are reasonably acceptable to Landlord. Tenant shall provide such drawings, plans and specifications
as are requested by Landlord in reviewing any such proposed improvements. If
Landlord consents to such Premises Work, it shall be made at Tenant’s sole cost
and expense and at such time and in such manner so as to not unreasonably
interfere with the use and enjoyment of the Building by any other tenant.
Tenant shall not make any alteration,. addition or improvement to the Premises,
whether structural or nonstructural, without Landlord’s prior written consent,
which shall not be unreasonably withheld or delayed. Tenant shall provide such
drawings, plans and specifications as are requested by Landlord in reviewing
any such proposed improvements. If Landlord consents to any such proposed
alteration, addition or improvement, it shall be made at Tenant’s sole cost and
expense and at such time and in such manner as to not unreasonably interfere
with the use and enjoyment of the remainder of the Premises by any other tenant
or other person. Landlord may, as a condition of granting its consent or approval hereunder, require Tenant to post
such payment and performance bonds as Landlord deems reasonable to protect
Landlord, any Mortgagee, and the Premises. In making any alteration, addition
or improvement to the Premises, Tenant shall use materials equal or exceeding
in quality and kind the original construction, as certified by the architect
who designed the Premises or by such other architect as is designated by
Landlord. All such alterations, additions and improvements shall be performed
(a) in a good and workmanlike manner; (b) in accordance with all applicable laws and
regulations, including but not limited to the ADA (Americans with Disabilities
Act); (c) in accordance with all applicable insurance requirements and
requirements of any Mortgagee; and (d) in accordance with the drawings, plans
and specifications approved by Landlord. All work performed by Tenant shall be
subject to Landlord’s inspection and approval to determine whether it complies
with the requirements of this Lease. Prior to the commencement of any such work
by Tenant, Tenant shall obtain all necessary endorsements to the insurance
required by Section 22 hereof to be sure the same covers the performance
of such work. Furthermore, Tenant shall defend, indemnify and hold harmless
Landlord from and against any and all damages, losses or liability arising from
such alterations or improvements or the construction thereof by

 

8

 

Tenant,
its agents, servants, invitees and employees other than Landlord. For purposes
hereof, the term “Premises Work” shall mean the following: any construction,
repair, refurbishment or restoration, including without limitation, tenant
improvements, build-out, alterations, additions, improvements, renovations,
repairs, remodeling, painting and installations of fixtures, mechanical,
electrical, plumbing, data, security, telecommunications, low voltage or
elevator equipment or systems or other equipment, or with respect to any other
construction work in or to the Demised Premises.

 

(b)                                 All alterations, installations, fixtures,
changes, replacements, additions or improvements, including wall-to-wall
carpet, within the Demised Premises shall, at the election of Landlord, remain
upon the Demised Premises and be surrendered with the Demised Premises at the
expiration or termination of the Lease without disturbance, molestation or
injury. Should Landlord elect that alterations, installations, changes,
replacements, additions to or improvements made by Landlord at Tenant’s request
after the commencement of the Term be removed upon the expiration or
termination of this Lease, then Landlord shall so notify Tenant at the time
Tenant requests such alterations and Landlord, at Tenant’s expense, shall
remove the same and shall restore the Demised Premises to their original
condition. The cost of such removal and restoration shall be deemed to be
Additional Rent.

 

(c)                                  If during the Term of this Lease, Tenant,
with or without the consent of Landlord, shall make any improvements or
alterations to the Demised Premises, any mechanic’s lien is filed against the
Demised Premises or the Property for work or material claimed to have been done
for or furnished to Tenant, such mechanic’s lien shall be discharged by Tenant
within ten (10) days thereafter or action seeking its dismissal, at
Tenant’s sole cost and expense, by payment thereof or by posting such bond or
paying such amount as will effect a release of such lien. If Tenant shall fail
to discharge or obtain the release of any such mechanic’s lien, Landlord may,
at its option, discharge or release the same and treat the cost thereof
(including reasonable attorneys’ fees incurred by Landlord) as Additional Rent
payable with the monthly installment of Minimum Rent next becoming due; and
such discharge or release by Landlord shall not be deemed to waive the default
of Tenant in not discharging or releasing the same. Tenant shall indemnify and
hold Landlord and the holders of any mortgages or deeds of trust on the
Property harmless from and against any and all expenses, liens, claims or
damages to person or property, which may arise by reason of Tenant having made
any alterations.

 

(d.)                              All costs and expenses of designing and
constructing improvements and alterations to the Demised Premises as outlined
in Exhibit B and described in this section shall be paid as
follows:

 

(i)                                     Regardless of whether the Space Improvements
(i.e., Premises Work) are being constructed by Landlord or by Tenant, Landlord
shall provide and pay an allowance (the “Allowance”) of $25 per rentable square
foot of the Premises towards (1.)
the costs of designing the space
plan in Exhibit B
and all of the plans and specifications for the Space Improvements, including
mechanical and electrical drawings and (2.) the costs of constructing the Space
Improvements, including but not limited to all fees, costs and expenses paid
under construction contracts and subcontracts, construction managers’ fees,
costs and expenses, the cost of materials, supplies, permits and other items
and any other out-of-pocket expenditures incurred in any connection with such
construction. Such Allowance shall not be paid for any other costs or

 

9

 

purposes.
Tenant shall pay any and all costs of designing and constructing the Space
Improvements, which are in excess of the Allowance.

 

(ii)                                       If the Space Improvements are to be
constructed by Landlord, Tenant shall pay to Landlord the amount of designing
and constructing the Space Improvements within 15 days after receiving
Landlord’s written statement of such costs. Tenant shall, prior to Landlord’s
beginning construction of the improvements, provide a bond, letter of credit or
other security satisfactory to Landlord or Tenant’s performance of the
foregoing obligation in the event the costs of the Space Improvements
(including any modifications requested by Tenant) are significant in the
estimation of Landlord. Tenant shall provide this required security within 15
days after request by Landlord.

 

(iii)                                         If the Space Improvements are to be
constructed by Tenant, Tenant shall then provide the following to Landlord (1.)
a requisition substantially in the form of AIA Requisition Forms G702 and G703,
including a description of all completed work for which payment is requested,
the amount requested with a breakdown by each trade comprising the work, and
the percentage of the entire project completed after taking into account all
such work, (2.) approval by Landlord’s construction manager or other designated
person of the requisition, (3.) conditional lien waivers from all parties for
whom such payment is requested releasing all liens which may arise on account
of the work performed by such parties to the date of the request for payment,
and (4.) unconditional lien waivers covering all work up to and including the
immediate preceding payment. Withheld from each disbursement shall be the
applicable retainage, not to be less than 10% as provided, which retainage
shall be paid and disbursed upon (1.) completion of the Space Improvements as
required by the applicable contract(s), (2.) delivery of unconditional lien
waivers as described above for all work comprising the improvements, and (3.)
issuance of a certificate of occupancy or other applicable approval by the
local authorities permitting occupancy of the Demised Premises by Tenant for
business.

 

(iv)                                   If the Space Improvements are to be
constructed by Landlord, Landlord shall use commercially reasonable efforts to
complete such improvements on or before the Target Date (i.e., date of
completion as agreed to be Tenant and Landlord), but Landlord shall have no
liability to the Tenant hereunder if prevented from doing so due to strike or
other labor troubles, governmental restrictions, failure or shortage of utility
service, national or local emergency, accident, flood, fire or other casualty,
adverse weather condition, other act of God, inability to obtain a building
permit or a certificate of occupancy, or any other cause beyond Landlord’s
reasonable control. In such event, the Commencement Date and Expiration Date
shall be postponed for a period equaling the length of such delay, but in no
event beyond. However, if any delay in completion of the Space Improvements or
in delivering possession of the Premises to Tenant are caused by Tenant, all
terms herein shall be effective and binding, on that date reasonably calculated
by Landlord or it’s contractor as the date on which Landlord would have
substantially completed the Space Improvements if not for such delay.

 

13.                                 Floor
Loading. Landlord shall have the
right to prescribe the weight, method of installation and position of safes or
other heavy fixtures or equipment. Tenant shall not install in the Demised
Premises any fixtures, equipment or machinery that shall place a load upon any
floor exceeding the floor load per square foot of area which the floor was
designed to carry. Tenant

 

10

 

agrees
that all damage done to the Property by taking in or removing a safe or any
other article of Tenant’s equipment, or due to its being in the Demised
Premises, shall be repaired at the expense of Tenant. No freight furniture or
other bulky matter of any kind shall be received on the Property or carried in
the elevators, except as approved by Landlord, which approval will not be
unreasonably withheld or delayed (who shall in no event be responsible for any
damage to or charges for moving the same). Tenant agrees promptly to remove
from the public area any of Tenant’s property there delivered or deposited. The
floor load per square foot area is 100 pounds.

 

14.           Tenant’s Equipment.

 

(a)           Tenant shall not install or operate in the Demised Premises
(i) any electrically operated equipment or other machinery, other than,
typewriters, personal computers with low electrical consumption, adding
machines, copying machines and such other electrically operated office
machinery and equipment normally used in general office space; or (ii) any
electrically operated equipment or other machinery using more than 120 volts,
without first obtaining the prior written consent of Landlord. Such consent by
Landlord may be conditioned upon the payment by Tenant of Additional Rent in
compensation for such excess consumption of electricity and for the cost of
installation and maintenance of additional wiring and/or submeters as may be
necessitated by said equipment or machinery. Landlord hereby consents to the
installation of a computer room in the Demised Premises provided that the
Tenant pays the costs set forth in the preceding sentences and complies with
the requirements of the remainder of this Section 14. Tenant shall not
install any other equipment of any kind or nature which may necessitate any
changes, replacements, additions to, or use of, the water, heating, air
conditioning, plumbing or electrical systems of the Property, without first
obtaining the prior written consent of Landlord, which may be given or withheld
in Landlord’s sole and absolute discretion. Permitted machinery and equipment
belonging to Tenant which cause noise or vibrations that may be transmitted to
any part of the Property to such a degree as to be objectionable to Landlord or
to any tenant of the Property shall be installed and maintained by Tenant, at
Tenant’s expense, on vibration eliminators or other devices sufficient to
eliminate such noise and vibrations.

 

(b)           Maintenance and repair of equipment such as kitchen fixtures, separate
air conditioning equipment, or any other type of special equipment or lighting,
whether installed by Tenant or by Landlord on behalf of Tenant, shall be the
sole responsibility of Tenant, and Landlord shall have no obligation in
connection therewith.

 

15.           Notice of Defects. Tenant shall give Landlord prompt notice of
any defects or breakage in the structure, equipment or fixtures of the Demised
Premises or Property.

 

16.           Liability.

 

(a)           Landlord assumes no liability or responsibility whatsoever with respect
to the conduct and operation of the business to be conducted in the Demised
Premises. Landlord shall not be liable for any accident or injury to any
person(s) or property in or about the Demised Premises or the Property
which are caused by the conduct and operation of Tenant’s business or by virtue
of equipment or property of Tenant in the Demised Premises.

 

11

 

(b)         Landlord
shall not be liable for any accident or damage caused by electric light or
wires, or any accident or damage which may occur through the operation of
elevators, heating, air conditioning, lighting or plumbing apparatus, or any
accident or injury occurring in connection with the Property and its services
unless caused by Landlord’s negligence. All personal property of Tenant in the
Demised Premises or on the Property shall be at the sole risk of Tenant.
Landlord shall not be liable for loss or damage to property of Tenant caused by
rain, snow, water or steam that may leak into or flow from any part of the
Property through any defects in the
roof or plumbing or from any other source, including but not limited to acts or
omissions of other tenants or occupants of the Building or persons using the
Property. It is understood and agreed that Tenant covenants to save Landlord
and the holders of any mortgages or deeds of trust on the Property harmless and
indemnified from all loss, damage, liability or expense (including, without
limitation, court costs and reasonable attorneys’ fees) incurred by reason of
Tenant’s neglect in its use of the Demised Premises or the Property or any part
thereof including the use of the water, steam, electric or other systems, and
from all injury, loss or damage to any person or party upon the Demised
Premises.

 

(c)          All
injury to the Demised Premises or the Property caused by moving the property of
Tenant into or out of the Property, and all breakage done by Tenant, or the
agents, servants, employees or visitors of Tenant, shall be promptly repaired
by Landlord, at Tenant’s expense. Landlord shall have the right to make such
necessary repairs, alterations and replacements (structural, non-structural or
otherwise) and any charge or cost so incurred by Landlord shall be paid by
Tenant and shall be considered Additional Rent payable with the installment of
Minimum Rent next becoming due under
this Lease. This provision shall be construed as an additional remedy granted
to Landlord and not in limitation of any other rights and remedies which
Landlord may have in said circumstances.

 

(d)         Tenant
shall indemnify Landlord and its agents and employees, and the holders of any
mortgages or deeds of trust on the Property, and save them harmless from and
against any and all claims, actions, damages, liabilities and expense
(including, without limitation, court costs and reasonable attorneys’ fees) in
connection with loss of life, personal injury or damage to property arising
from or out of any occurrence in, upon or at the Demised Premises, or the
occupancy or use by Tenant of the Demised Premises, or any part thereof, or
occasioned wholly or in part by any act or omission of Tenant, its agents,
contractors, employees, servants, permitted subtenants, licensees or invitees,
or resulting from any default, breach, violation or non-performance of this
Lease by Tenant. In the event that Landlord or its agents and employees shall,
without fault on their part, be made
a party to any litigation
commenced by or against Tenant, then Tenant shall defend and hold Landlord and
the holders of any mortgages or deeds of trust on the Property harmless and
shall pay all costs, expenses and reasonable attorney’s fees incurred or paid
in connection with such litigation. Tenant shall pay, satisfy and discharge any
and all judgments, orders and decrees which may be recovered against Landlord
in connection with the foregoing.

 

17.         Signs. Other than the agreed upon signage on the
top of the building, Tenant agrees that no sign, advertisement or notice shall
be inscribed, painted or affixed on any part of the outside or inside of the
Demised Premises or the Property, except on the directories and adjacent to the
doors of the offices, and then only in such size, color and style as Landlord
in its discretion shall approve. Landlord shall have the right to prohibit any
sign, advertisement or notice on the

 

12

 

Property
of Tenant which in the Landlord’s opinion tends to impair the reputation of the
Property or its desirability as a building for general offices, or for use by
financial, insurance or other institutions and businesses of like nature, and,
upon written notice from Landlord, Tenant shall refrain from and discontinue
such advertisement and Landlord, in addition to its other remedies for default
hereunder, shall have the right to remove the same, and Tenant shall be liable
for any and all costs and expenses incurred by Landlord to effect said removal.

 

18.         Ordinances, Regulations, and Rules.

 

(a)           Tenant shall, at Tenant’s cost, promptly
comply with and carry out all orders, requirements or conditions now or
hereafter imposed upon Tenant by the ordinances, laws, or regulations of local,
state or federal governments, or by any of their various departments or
agencies, whether required of Landlord or otherwise to be done or performed during
the Term of this Lease, insofar as they are occasioned by or required for the
conduct of business by Tenant or Tenant’s occupancy of the Demised Premises.
Tenant shall indemnify, defend and save Landlord and the holders of any
mortgages or deeds of trust on the Property harmless from all penalties,
claims, demands and judgments resulting from failure or negligence in this
respect.

 

(b)          Tenant, its agents, employees, contractors,
licensees or invitees, shall abide by and observe the rules and
regulations set forth below and such other reasonable rules and
regulations as may be promulgated from time to time for the operation and
maintenance of the Property and the Parking Facilities, provided a copy thereof
is sent to Tenant 30 days prior to its effective date. Nothing contained in
this Lease shall be construed to impose upon Landlord any duty or obligation to
enforce such rules and regulations, or the terms, conditions or covenants
contained in any other lease, and Landlord shall not be liable to Tenant for
violation of the same by any other tenant, its employees, agents or invitees.

 

(i)       The sidewalks, entries, passages, elevators,
public corridors, staircases and other parts of the Property which are not
occupied by Tenant shall not be obstructed or used for any purpose other than
ingress and egress.

 

(ii)      Tenant shall not install or permit the
installation of any awnings, shades or the like other than those approved by
Landlord in writing.

 

(iii)     Other than that required
by any regulatory agency, no additional locks shall be placed upon any doors of
the Demised Premises; and the doors leading to the corridors or main halls
shall be kept closed during business hours except for ingress and egress.

 

(iv)     Tenant shall keep all
areas visible through glass entry doors neat, clean, attractive and
aesthetically in keeping with professional office suites.

 

(v)      Tenant shall not
construct, maintain, use or operate within the Demised Premises or elsewhere on
the Property any equipment or machinery which produces music, sound or noise
which is audible beyond the Demised Premises.

 

(vi)     Electric and telephone
distribution boxes and air conditioning equipment must remain accessible at all
times.

 

13

 

(vii)    Bicycles, motor scooters
or any other types of vehicle shall not be brought into the lobby or elevators
or into the Demised Premises.

 

(viii)   Tenant shall not install
or authorize the installation of any coin-operated vending machines except
within the Demised Premises.

 

(ix)     No animals of any kind
shall be brought into or kept about the Building by any tenant.

 

19.         Environmental.

 

(a)           Tenant’s use and occupancy of the Demised
Premises shall at all times be in strict compliance with any and all federal,
state and local statutes, laws, rules, regulations, orders, ordinances and
standards, as they may now or hereafter exist, relating in any way to the
protection of the environment, such as, but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
Sections 9601, et seq. (“CERCLA”), the Resource Conservation
and Recovery Act, as amended, 42 U.S.C. Sections 6901, et seq.
(“RCRA”), the Toxic Substances Control Act, as amended, 15 U.S.C. Sections
2601, et seq., the Clean Water Act, as amended, 33 U.S.C.
Sections 1251, et seq., the Clean Air Act, as amended, 42
U.S.C. Sections 7401, et seq., and analogous state statutes,
and regulations promulgated thereunder (collectively, “Environmental Laws”).

 

(b)          In the event of any Release (as hereinafter
defined) or threat of a Release or the presence of any Hazardous Substance (as
hereinafter defined) affecting the Demised Premises or surrounding areas,
Tenant shall immediately notify Landlord in writing thereof, and, to the extent
that such Release or presence of any Hazardous Substance shall have been caused
by Tenant, or its agents, employees, contractors, licensees or invitees, then
Tenant shall immediately take all measures necessary to contain, remove and
dispose off the Demised Premises, or surrounding areas, all such materials
present or released or contaminated by the Release, and shall remedy and
mitigate, at Tenant’s sole cost and expense, all threats to public health or
the environment relating to such presence or Release or threat of Release. If
Tenant shall fail to take the measures described above or fail to comply with
any of the requirements of any Environmental Laws, Landlord may, at its
election, but without the obligation to do so, give such notice and/or cause
such work to be performed at the Demised Premises or surrounding areas, as
applicable, and/or take any and all other actions as Landlord shall deem
necessary to restore the Demised Premises or surrounding areas, as applicable,
to the original condition existing as of the date of this Lease. Such actions
by Landlord do not affect, nor cause to be waived, any of Tenant’s obligations
under the Lease, nor cure any default by Tenant.

 

(c)           Tenant shall indemnify, defend and hold
harmless Landlord from and against any and all claims, liens, suits, actions,
debts, damages, costs, losses (including, without limitation, any loss of value
of, loss of use of, or loss of income from, the Demised Premises or the
Property), liabilities, obligations, judgments and expenses (including, without
limitation, court costs and attorneys’ fees), arising from or relating to any
of the following occurrences caused by the acts or omissions of Tenant, its
agents, employees, contractors, licensees or invitees: (i) a failure to
comply with any Environmental Laws, or (ii) a Release, threat of a Release
or the

 

14

 

presence
of any Hazardous Substance affecting the Demised Premises or surrounding areas. Tenant’s obligations under this Lease shall
arise whether or not any governmental authority or individual has taken or
threatened to take any action in connection with the presence of any Hazardous
Substance.

 

(d)          As used herein, the term “Hazardous
Substance” shall mean any material that is or contains “hazardous substances”
as defined pursuant to CERCLA or “petroleum” as defined pursuant to RCRA, or
other material or substance that requires special handling by Federal, state or
local law, or industry practice, without regard to the quantity or location of such
material. The term Hazardous Substances shall include building materials and
building components including, without limitation, asbestos contained in or
comprising building materials or building components. The term “Release” shall
have the same meaning as set forth in Section 101(22) of CERCLA.

 

(e)           Tenant will not engage in operations during
the Term or any extension or renewal thereof which involve the generation,
manufacturing, refining, transportation, treatment, storage, disposal or
handling of any Hazardous Substance, except that office equipment and cleaning
solutions that are customarily found in first-class office buildings and which
are or contain a Hazardous Substance may be used, generated, handled or stored
on the Demised Premises, provided such is incident to and reasonably necessary
for the operation and maintenance of the Demised Premises as permitted pursuant
to the terms of this Lease and is in compliance with applicable laws. Tenant
shall not cause or allow a Release of a Hazardous Substance or solid waste in,
on or under the Property.

 

(f)           Tenant agrees to permit Landlord and its
authorized representatives to enter, inspect and assess the Demised Premises at
reasonable times for the purpose of determining Tenant’s compliance with the provisions
of this Section of the Lease. Such inspections and assessments may include
obtaining samples and performing tests of building materials, soil, surface
water, groundwater or other media.

 

(g)          Tenant shall not install, apply, or otherwise
use or introduce asbestos or any substance containing asbestos in or about the
Demised Premises. In the event that asbestos is located in the Building, Tenant
shall comply with any Operations and Maintenance Program adopted by Landlord in
connection therewith.

 

(h)          This entire Section 19 shall survive
expiration or termination of the Lease.

 

20.           Entry for Repairs and Inspections.

 

(a)           Tenant shall permit Landlord, or its
representatives, to enter the Demised Premises at all reasonable times, without
diminution of the Minimum Rent payable by Tenant, to examine, inspect and
protect the same, and to make such alterations and/or repairs as Landlord may
deem necessary or desirable, or to exhibit the same to prospective tenants,
mortgagees or purchasers.

 

(b)          If Tenant refuses or neglects, after a
request by Landlord, to repair the Demised Premises as required hereunder to
the reasonable satisfaction of Landlord as soon as is

 

15

 

reasonably
possible, Landlord may, after written notice to Tenant (except in an
emergency), make such repairs without liability to Tenant for any loss or
damage that may occur to Tenant’s merchandise, fixtures or other property, or
to Tenant’s business as a result thereof, and upon completion thereof, Tenant
shall pay, as Additional Rent, the cost incurred by Landlord to make such
repairs, plus twenty percent (20%) for overhead, upon presentation of a bill
therefore.

 

(c)           Landlord shall at all times have an easement
and the right to enter in and through the Demised Premises for installation and
maintenance of utility connections and facilities reasonably necessary to
provide services to other portions of the Property and the common areas;
provided, however, that Landlord shall endeavor to exercise such rights in a
manner which will not unreasonably interfere with the operation of the Tenant’s
business.

 

(d)          Landlord’s entrance upon the Demised Premises
pursuant to this paragraph shall not constitute an eviction of Tenant in whole
or in part, and the Minimum Rent and Additional Rent due hereunder shall in no
way abate while said repairs, alterations, improvements or additions are being
made, unless such entrance prevents Tenant from conducting its business in the
Demised Premises.

 

21.           Services and Utilities.

 

(a)           As long as Tenant is not in default under any
of the provisions in Section 26 of this Lease, Landlord shall provide the
following utilities and services to Tenant:

 

(i)            Central heating and cooling, at such
temperatures and in such amounts as set forth on Exhibit B. Monday through
Friday, from 8:00 a.m. to 6:00 p.m. and on Saturday from
9:00 a.m. to noon, except on the following holidays: New Year’s Day,
Memorial Day, Martin Luther King Day, President’s Day, July 4, Labor Day,
Thanksgiving and Christmas, during such seasons of the year when such services
are normally and usually furnished in comparable office buildings in the
jurisdiction where the Property is located.

 

(ii)           Automatically operated elevator service from 6:00 a.m. to
8:00 p.m., and at least one (1) elevator on call at all other times.

 

(iii)          Reasonably adequate electricity, supplied by a supplier selected solely
by Landlord, seven days a week for normal office purposes to furnish sufficient
electrical power to machines of low electrical consumption; provided, however,
that Tenant shall bear the costs occasioned by high electrical consumption
machines such as special copiers and electronic data processing machines
(including the air conditioning costs thereof) and multiple shifts of employees
working hours other than those specified in 22 (a)(i) above. Landlord’s
obligation to furnish electrical and other utility services, shall
be subject to the rules and regulations of the supplier of such
electricity or other utility services and the rules and regulations of any
municipal or other governmental authority regulating the business of providing
electricity and other utility services.

 

(iv)          Restroom facilities and lavatory supplies, including hot and cold
running water, provided for the general use of tenants of the Property; and
routine maintenance, painting, and electric lighting service for all public
areas and special service areas of the Property in the

 

16

 

manner
and to the extent deemed by Landlord to be standard for comparable office
buildings in the jurisdiction where the Property is located.

 

(b)           Any failure by Landlord to furnish the foregoing services shall not
render Landlord liable in any respect for damages to either person or property,
nor be construed as an eviction of Tenant, nor work an abatement of Rent, nor
relieve Tenant from Tenant’s obligations hereunder. If the equipment or
machinery should cease to function properly, Landlord shall use reasonable
diligence to repair the same.

 

(c)           If Tenant requires air-conditioning, heating or other services
routinely supplied by Landlord for hours or days in addition to the hours and
days specified in Section 21(a)(i) hereof, Landlord shall make
reasonable efforts to provide such additional service after reasonable prior
written request therefor from Tenant, and Tenant shall reimburse Landlord for
such additional service at such rates therefor as may be established by
Landlord, and the amount thereof shall be considered Additional Rent.

 

(d)           Landlord agrees to grant Tenant permission to install security devices
in the demised premises to limit ingress and egress as required by any
regulatory agency.

 

22.           Insurance.

 

(a)           Landlord agrees to obtain and maintain in effect at all times during the
Term of this Lease fire and extended coverage insurance insuring the Property.
Such insurance shall be issued by an insurance company licensed to do business
in the State of Maryland.

 

(b)           Tenant, at Tenant’s sole cost and expense, shall obtain and maintain in
effect at all times during the Term of this Lease, policies providing for the
following coverage:

 

(i)            Tenant shall obtain a policy of insurance
covering Tenant’s fixtures and equipment installed and located in the Demised
Premises, and in addition thereto, covering all of the furnishings, merchandise
and other contents in the Demised Premises, for the full replacement value of
said items. Coverage should at least insure against any and all perils included
within the classification “Fire and Extended Coverage” under insurance industry
practice in the State of Maryland, together with insurance against theft,
vandalism, malicious mischief and sprinkler leakage or other sprinkler damage.
Any and all proceeds of such insurance, so long as the Lease shall remain in
effect, shall be used only to repair, replace or pay for the items so insured.

 

(ii)           Tenant shall obtain a comprehensive policy of general liability
insurance, naming Landlord and any mortgagee of the Property as additional
insureds, protecting against any liability occasioned by any occurrence on or
about any part of the Property, including theft, the Demised Premises or
appurtenances thereto, and containing contractual liability coverage, with such
policies to be in the minimum amount of Five Million and 00/100 Dollars
($5,000,000.00), combined single limit, written on an occurrence basis. In the
event that it becomes customary for a significant number of tenants of
commercial office buildings in the area to be required to provide liability insurance
policies to their landlords with coverage limits higher than the foregoing
limits, then Tenant shall be required on demand of Landlord to obtain

 

17

 

insurance
policies the limits of which are not less than the then customary limits.

 

(iii)          Tenant shall obtain worker’s compensation or similar insurance
affording statutory coverage and containing statutory limits as required under
the local worker’s compensation or similar statutes.

 

(c)           All insurance policies herein to be procured by Tenant shall
(i) be issued by good and solvent insurance companies licensed to do
business in the State of Maryland and having a rating by the Best Company of
A:XII or better; (ii) be written as primary policy coverage and not
contributing with or in excess of any coverage which Landlord may carry;
(iii) insure and name Landlord and any mortgagee of the property as
additional insureds as their respective interests may appear; and
(iv) shall contain an express waiver of any right of subrogation by the
insurance company against Landlord or Landlord’s agents and employees. Neither
the issuance of any insurance policy required hereunder, nor the minimum limits
specified herein with respect to Tenant’s insurance coverage, shall be deemed
to limit or restrict in any way Tenant’s liability arising under or out of this
Lease. At the request of Landlord, with respect to each and every one of the
insurance policies herein required to be procured by Tenant, on or before the
Commencement Date and before any such insurance policy shall expire, Tenant
shall deliver to Landlord a certificate of insurance for each such policy or
renewal thereof, as the case may be, together with evidence of payment of all
applicable premiums. Any insurance required to be carried hereunder may be
carried under a blanket policy covering the Demised Premises and other
locations of Tenant, and if Tenant includes the Demised Premises in such
blanket coverage, Tenant shall deliver to Landlord, as aforesaid a certificate
evidencing such insurance coverage on the Demised Premises. Each insurance
policy required to be carried hereunder by or on behalf of Tenant shall provide
(and any certificate evidencing the existence of each such insurance policy
shall certify) that, unless Landlord shall first have been given thirty (30)
days prior written notice thereof: (i) such insurance policy shall not be
canceled and shall continue in full force and effect, (ii) the insurance
carrier shall not, for any reason whatsoever, fail to renew such insurance
policy, and (iii) no material changes may be made in such insurance
policy. The term “insurance policy” as used herein shall be deemed to include
any extensions or renewals of such insurance policy. In the event that Tenant
shall fail promptly to furnish any insurance coverage hereunder required to be
procured by Tenant, Landlord, at its sole option, shall have the right to
obtain the same and pay the premium therefor for a period not exceeding one
(1) year in each instance, and the premium so paid by Landlord together
with an administrative fee of fifteen percent (15%) of such premium shall be
immediately payable by Tenant to Landlord as Additional Rent.

 

(d)           Tenant shall not do or permit to be done any act or thing upon the
Demised Premises that will invalidate or be in conflict with fire insurance
policies covering the Property or any part thereof, or fixtures and property
therein, or any other insurance policies or coverage referred to above in this
Section; and Tenant shall promptly comply with all rules, orders, regulations
or requirements of the Insurance Underwriters Code, as amended from time to
time, having jurisdiction, or any similar body, in the case of such fire
insurance policies, and shall not do, or permit anything to be done, in or upon
the Demised Premises, or bring or keep anything therein, which shall increase
the rate of fire insurance on the Property or on any property located therein,
or increase the rate or rates of any other insurance referred to hereinabove
applicable to the Property or any portion thereof. If by reason of failure of
Tenant to comply with the provisions of this Section, the fire insurance rate,
or the rate(s) of any other insurance coverage

 

18

 

referred
to above, shall at any time be higher than it otherwise would be, and if
Landlord, at such time is obligated to, or has elected to, obtain and maintain
in effect any such insurance coverage, then Tenant shall reimburse Landlord on
demand as Additional Rent for that part of the premiums for any insurance
coverage that shall have been charged because of such violation by Tenant and
which Landlord shall have paid on account of an increase in the rate(s) in
its own policies of insurance. In any action or proceeding wherein Landlord and
Tenant are parties, a schedule or “make-up” of rate(s) for the Demised
Premises issued by the Insurance Underwriters Code, as amended from time to
time, having jurisdiction, or similar body establishing fire insurance rates
for the Demised Premises or Property, in the case of the aforesaid fire
insurance policies, and the respective body or bureau establishing rates in the
case of all of the other aforesaid insurance policies, shall be conclusive
evidence of the facts therein stated.

 

23.        Damage
by Fire or Other Casualty.
Tenant shall give prompt notice to Landlord of any fire or other damage to the
Demised Premises or the Building of which Tenant becomes aware. If
(i) twenty percent (20%) or more of the Demised Premises or the Building
shall be damaged by fire or other casualty, or (ii) any damage to the
Demised Premises or Building cannot reasonably be repaired within ninety (90)
days after the damage occurred, or (iii) any mortgagee of the Demised
Premises shall require that the insurance proceeds under the policies referred
to in Section 22 hereof be used to pay down the mortgage, or (iv) the
Demised Premises or Building shall be damaged as a result of a risk which is
not covered by Landlord’s insurance, or (v) less than one (1) year
remains before the expiration of the Term, then Landlord or Tenant may
terminate this Lease by notice given within thirty (30) days after the date of
such damage. In addition, Landlord shall notify Tenant, in writing, within
thirty (30) days after the date the damage occurred, if Landlord has reasonably
determined that it will take more than ninety (90) days from the date the
damage occurred to rebuild the Demised Premises, Tenant shall have the right to
terminate this Lease upon written notice to Landlord delivered not more than
thirty (30) days after Landlord delivers said notice to Tenant. If the Demised
Premises are damaged by fire or other casualty and this Lease is not terminated
pursuant to this Section 23, then all insurance proceeds under the
policies referred to in Section 22 hereof that are recovered on account of
any such damage shall be made available to pay for the cost of repairing such
damage, and, as soon as practicable after such damage occurs, Landlord shall
repair or rebuild the Demised Premises to a condition substantially similar to
their condition immediately prior to such occurrence . However, in no event
shall Landlord be obligated to repair or replace Tenant’s trade fixtures,
equipment or personalty. In the event of any repair or rebuilding pursuant to
this Section 23, then an equitable portion of the Rent shall be abated
during the existence of such damage, based upon the portion of the Demised
Premises which is rendered untenantable and the duration thereof. Except as expressly
set forth in this Section 23, Landlord shall not be liable or obligated to
Tenant if the Demised Premises are damaged by fire or other casualty. Tenant
hereby waives any and all rights, other than those expressly set forth herein,
that Tenant may have pursuant to any presently existing or hereafter enacted
law, to terminate this Lease by reason of damage to the Demised Premises by
fire or other casualty; provided, however, Tenant can terminate this Lease
Agreement as the result of the damage substantially impairing the ingress and
egress to the Demised Premises.

 

24.   Condemnation. 

 

(a)           If the whole, or substantially the whole, of the Property or the
Demised Premises

 

19

 

is
taken or condemned by eminent domain or by any conveyance in lieu thereof
(“condemnation”), then the obligations of the Landlord and Tenant hereunder
shall terminate on the earlier to occur of: (i) the date the condemning
authority takes possession, or (ii) the date title vests in the condemning
authority, or (iii) the date the condemning authority obtains an order of
Court of Condemnation.

 

(b)           If any portion of the Property shall be taken by condemnation (whether
or not such condemnation includes any portion of the Demised Premises), and as
a result thereof, Landlord in its discretion, determines that the Property
cannot be restored in an economically feasible manner for a use substantially
similar to its use immediately prior to such condemnation, than Landlord shall
have the right, without liability to Tenant, upon written notice to Tenant, to
terminate this Lease, with such notice to be given promptly after the Landlord
has so determined.

 

(c)           If a portion, but less than substantially the whole, of the Demised
Premises shall be taken by condemnation, then the obligation of Landlord and
Tenant hereunder shall terminate as of the date of such condemnation as to the
portion of the Demised Premises so taken, and unless (i) Landlord elects
to terminate this Lease pursuant to Section 24(b) hereof, or
(ii) the Demised Premises shall no longer be reasonably suitable for the
operation of Tenant’s business therein in which case this Lease shall terminate
with respect to the entirety of
the Demised Premises), whereupon this Lease shall remain in full force and
effect with respect to the remainder of the Demised Premises.

 

(d)           If the obligations of Landlord and Tenant are terminated as provided
above, the Rent payable hereunder shall be adjusted as of the date of such
termination. Any such termination, however, shall not serve to release Landlord
or Tenant from any obligations contained herein, which expressly, or by their
nature are deemed to, survive such termination of this Lease.

 

(e)           All compensation awarded or paid upon condemnation of any portion of
the Property, including the Demised Premises, shall belong to Landlord without
participation by Tenant. Nothing contained herein shall be construed, however,
to prevent Tenant from prosecuting any claim directly against the condemning
authority for loss of business, loss of good will, moving expenses, damage to,
and cost of removal of, any trade fixtures, furniture and personal property, to
the extent such items belong to Tenant; provided, however, that Tenant shall
make no claim which shall diminish or adversely affect any award claimed or
received by Landlord.

 

25.           Assignment Under Bankruptcy Code. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed,
without further act or deed, to have assumed and be subject to all of the
obligations, conditions and provisions under this Lease as of the date of such
assignment. Notwithstanding the foregoing, to the extent allowed by law, this
Lease shall not be assignable by voluntary or involuntary bankruptcy,
insolvency or reorganization proceedings, nor shall this Lease, or any rights
or privileges hereunder, be an asset of Tenant under any bankruptcy, insolvency
or reorganization proceedings.

 

20

 

26.                                 Defaults and Remedies.

 

(a)                                  The following events shall be a “Default” of
Tenant under this Lease:

 

(i)                                          Failure of Tenant to make any payment of
Minimum Rent or Additional Rent when due, where such failure shall continue for
a period of ten (10) days after receipt of written notice thereof by
Landlord to Tenant; provided, however, that Tenant shall not be entitled to
notice and an opportunity to cure upon the second (2nd) such default in any
lease year or upon the fifth (5th) such default during the Term of this Lease;

 

(ii)                                       Failure of Tenant to perform or comply with
any provision of this Lease to be performed or complied with by Tenant (other
than failure to pay Minimum Rent or Additional Rent pursuant to paragraph
26(a)(i) above), where such failure shall continue for a period of fifteen
(15) days after receipt of written notice setting forth with particularity the
nature of the breach and required code thereof by Landlord to Tenant;

 

(iii)                                    If any execution, levy, attachment or other
process of law shall occur upon Tenant’s goods, fixtures or interests in the
Demised Premises which is not cured or removed by Tenant within 15 days
thereof;

 

(iv)                                   If Tenant fails to take possession of the
Demised Premises within a reasonable period after the Lease Commencement Date,
or if Tenant substantially vacates or abandons the Demised Premises prior to
the normal expiration of the Term;

 

(v)                                      The involvement of Tenant, or any guarantor
of Tenant’s obligation hereunder, in financial difficulties as evidence by
(A) its admitting in writing its inability to pay its debts generally as
they become due, or (B) its filing a petition in bankruptcy or for
reorganization or for the adoption of an arrangement under the Bankruptcy Act
(as now or hereafter existing), or an answer or other pleading admitting the
material allegations of such a petition or seeking, consenting to or
acquiescing in the relief provided for under the Bankruptcy Act, or
(C) its making an assignment of all or a substantial part of its property
for the benefit of its creditors or (D) its seeking or consenting to or
acquiescing in the appointment of a receiver or trustee for all or a
substantial part of its property or of the Demised Premises, or (E) its
being adjudicated a bankrupt or insolvent, or (F) the filing of a
bankruptcy petition against Tenant or the entry of a court order without its
consent, which order shall not be vacated, set aside or stayed within sixty
(60) days from the date of filing or entry, or appointing a receiver or trustee
for all or a substantial part of its property, or approving a petition filed
against it for the effecting of an arrangement in bankruptcy or for a
reorganization pursuant to the Bankruptcy Act, or for any other judicial
modification or alteration of the rights of creditors.

 

(b)                                 The provisions of this paragraph shall apply
notwithstanding the payment by Tenant of the security deposit and/or the
continued willingness and ability of Tenant to pay Rent or otherwise perform
hereunder. The receipt by Landlord of payments of Rent accruing subsequent to
the time of Tenant’s default under this paragraph, shall not be deemed a waiver
by Landlord of Landlord’s rights hereunder.

 

(c)                                  Upon the occurrence of a Default, Landlord
shall have the right, at its election, then or at any time thereafter either:

 

21

 

(i)                                          To give Tenant written notice of Landlord’s
intention to terminate this Lease as of the date specified in said notice, and
on such date Tenant’s right to possession of the Demised Premises shall cease
and this Lease shall be terminated; or

 

(ii)                                       Without demand or notice, to re-enter and
take possession of all or any part of the Demised Premises and expel Tenant and
those claiming through Tenant, and remove the property of Tenant and any other
person, either by summary proceedings or by action at law or in equity or
otherwise, without being deemed guilty of trespass and without prejudice to any
remedies for nonpayment or late payment of Rent or breach of covenant. If
Landlord elects to re-enter under this provision, Landlord may, with or without
terminating this Lease, re-let all or any part of the Demised Premises (as
agent for Tenant if Landlord elects not to terminate this Lease) upon such
terms and conditions as Landlord may deem advisable, with the right to make
alterations and repairs to the Demised Premises. No such re-entry or taking of
possession of the Demised Premises by Landlord shall be construed as an
election on Landlord’s part to terminate this Lease unless a written notice of
termination is given to Tenant by Landlord or unless the termination be decreed
by a court of competent jurisdiction at the instance of Landlord.

 

(d)                                      If Landlord terminates this Lease pursuant to
the preceding paragraph, Tenant shall remain liable (in addition to all accrued
liabilities) for (I) Minimum Rent and Additional Rent until the date this
Lease would have expired had such termination not occurred, and any and all
expenses (including attorney’s fees, disbursements and brokerage fees) incurred
by Landlord in re-entering and repossessing the Demised Premises in making good
any Default of Tenant, in painting, altering, repairing or dividing the Demised
Premises, in protecting and preserving the Demised Premises by use of watchmen
and caretakers, and in re-letting the Demised Premises, and any and all
expenses which Landlord may incur during the occupancy of any new tenant; less
(ii) the net proceeds of any re-letting prior to the date this Lease would
have expired if it had not been terminated. Tenant agrees to pay to Landlord
the difference between items (i) and (ii) above for each month during
the Term, at the end of each such month. Any suit brought by Landlord to
enforce collection of such difference for any one month shall not prejudice Landlord’s
right to enforce the collection of any difference for any subsequent month. In
addition to the foregoing, and without regard to whether this Lease has been
terminated, Tenant shall pay to Landlord all costs incurred by Landlord,
including reasonable attorney’s fees, with respect to any lawsuit or action
instituted or taken by Landlord to enforce the provisions of this Lease.
Tenant’s liability shall survive the institution of summary proceedings and the
issuance of any writ of restitution thereunder.

 

(e)                                       If Landlord terminates this Lease pursuant to
this Section 27, Landlord shall have the right at any time, at Landlord’s
option, to require Tenant to pay to Landlord the following amount, as
liquidated and agreed final damages (which the parties hereto agree shall not
be deemed a penalty) in lieu of Tenant’s liability for Rent hereunder, which
amount shall be due and payable upon delivering written notice thereof to
Tenant: the sum of (i) all past-due Rent through the date on which this
Lease was terminated by Landlord, plus (ii) the amount of Leasing Costs
(hereinafter defined) incurred by Landlord, plus (iii) the lesser of
(a) the amount of Minimum Rent due for the remainder of the Term, or
(b) the amount of Minimum Rent due for the two (2) year period
immediately following the date on which this Lease was terminated by Landlord.
Landlord and Tenant acknowledge that they have agreed to the foregoing amount

 

22

 

as
liquidated damages because of the difficulty of ascertaining in advance the
amount of damages Landlord is likely to incur as a result of Tenant’s Default
and Landlord’s subsequent termination of this Lease. For purposes hereof, the
term “Leasing Costs” shall refer to the sum of (i) all real estate
brokerage commissions incurred by Landlord in connection with the Lease,
(ii) all costs and expenses incurred by Landlord in connection with the
construction and/or installation of any leasehold improvements, (iii) any
rental abatements, (iv) any allowances granted to Tenant, and (v) any
other costs and expenses incurred by Landlord in connection with the Lease. In
addition to any other damages for which Tenant shall be liable hereunder,
Tenant shall be liable for all attorneys’ fees and court costs incurred by
Landlord as a result of Tenant’s Default.

 

(f)                                              Tenant, on its own behalf and on behalf of
all persons claiming through Tenant, including all creditors, does hereby waive
any and all rights and privileges, so far as is permitted by law, which Tenant
and all such persons might otherwise have under any present or future law
(i) to the service of any notice of intention to re-enter which may
otherwise be required to be given, (ii) to redeem the Demised Premises,
(iii) to re-enter or repossess the Demised Premises, or (iv) to
restore the operation of this Lease, with respect to any dispossession of
Tenant by judgment or warrant of any court, or otherwise, whether such
dispossession, re-entry, expiration or termination be by operation of law or pursuant
to the provisions of this Lease. In the event Landlord commences any proceeding
for non-payment of Rent, Tenant shall not interpose any counterclaim of
whatever nature or description in any such proceeding. This shall not, however,
be construed as a waiver of Tenant’s right to assert such claim in any separate
action(s) brought by Tenant.

 

(g)                                           In the event of any breach by Tenant, or any
person or persons claiming through Tenant, of any of the provisions contained
in this Lease, Landlord shall be entitled to enjoin such breach and shall have
the right to invoke any right or remedy allowed at equity as if the remedies
under this Lease were not specified herein.

 

(h)                                           Landlord shall, to the extent permitted by
law, have (in addition to all other rights) a right of distress for Rent and a
lien on all Tenant’s personal property as security for all Rent due under this
Lease, and Tenant agrees not to remove such property from the Demised Premises
without Landlord’s consent.

 

(i)                                               If Tenant defaults in the making of any
payment or in the doing of any act herein required to be made or done by
Tenant, then after ten (10) days notice from Landlord, Landlord may, but
shall not be required to, make such payment or do such act, and, if made or
done by Landlord, the cost thereof (with interest thereon) shall be paid by
Tenant to Landlord and shall constitute Additional Rent due and payable with
the next monthly installment of Minimum Rent; but the making of such payment or
the doing of such act by Landlord shall not operate to cure such Default or to
stop Landlord from the pursuit of any remedy to which Landlord would otherwise
be entitled.

 

(j)                                               All rights and remedies of Landlord under
this Lease shall be cumulative and shall not be exclusive of any other rights
and remedies provided to Landlord now or hereafter at law or in equity, or
under this Lease.

 

23

 

27.                                 Waiver of Jury Trial. Landlord and Tenant hereby waive all right
to trial by jury in any claim, action, proceeding or counterclaim by either
Landlord or Tenant against each other on any matter arising out of or in any
way connected with this Lease, the relationship of Landlord and Tenant, and/or
Tenant’s use and occupancy of the Demised Premises.

 

28.                                 Subordination.

 

(a)                                            This Lease and all rights of Tenant hereunder
are subject and subordinate to all current and future underlying leases, deeds
of trust, mortgages or other security instruments covering any portion of the
Property or any interest of Landlord therein, as the same may be amended from
time to time. This provision is declared by Landlord and Tenant to be self-operative
and no further instrument shall be required to effect such subordination of
this Lease. Upon demand, however, Tenant shall execute, acknowledge, and
deliver to Landlord any further instruments evidencing such subordination as
Landlord, and any mortgagee or lessor of Landlord shall reasonably require, and
if Tenant fails to so execute, acknowledge and deliver such instruments within
ten (10) days after the Landlord’s request, Landlord is hereby empowered
to do so in Tenant’s name and on Tenant’s behalf; Tenant hereby irrevocably
appoints Landlord as Tenant’s agent and attorney-in-fact for the purpose of
executing, acknowledging and delivering any such instruments, such appointment
being coupled with an interest and therefore irrevocable.

 

(b)                                           Notwithstanding the generality of the
foregoing provisions of Section 28(a), any mortgagee or lessor of Landlord
shall have the right at any time to subordinate any such deed of trust or
mortgage or underlying lease to this Lease, or to any of the provisions hereof,
on such terms and subject to such conditions as such mortgagee or lessor of
Landlord may consider appropriate in its discretion. At any time, before or after
any transfer of Landlord’s interest in the Property, Tenant shall, upon request
of such transferee (“Successor Landlord”), automatically attorn to and become
the Tenant (or if the Demised Premises has been validly subleased, the
subtenant) of the Successor Landlord, without change in the terms or other
provisions of this Lease (or, in the case of a permitted sublease, without
change in this Lease or in the instrument setting forth the terms of such
sublease); provided, however, that the Successor Landlord shall not be bound by
any subsequent modifications to this Lease without the consent of the Successor
Landlord or by any payment made by Tenant of Rent for more than one
(1) month in advance. This agreement of Tenant to attorn to a Successor Landlord
shall survive any foreclosure sale, trustee’s sale, conveyance in lieu thereof
or termination of any underlying lease. Tenant shall upon demand at any time,
before or after any such foreclosure or termination, execute, acknowledge, and
deliver to the Successor Landlord any written instruments evidencing such
attornment as such Successor Landlord may reasonably require.

 

29.                                 Estoppel Certificate. Tenant agrees, at any time and from time to
time, upon not less than five (5) days prior written notice by Landlord,
to execute, acknowledge and deliver to Landlord a statement in the form
attached hereto as Exhibit D, or in such other form as Landlord may
reasonably request, certifying: (i) that this Lease is unmodified (or if
modified, stating the modifications) and in full force and effect (or if not in
full force and effect, the reasons therefor), (ii) the dates to which the
Minimum Rent, Additional Rent and other charges hereunder have been paid by
Tenant, (iii) whether or not to the best knowledge of Tenant, Landlord is
in default in the performance of any covenant, agreement or condition contained
in this Lease, and if so, specifying each such default of which Tenant may have
knowledge, and (iv) the address to

 

24

 

which
notices to Tenant should be sent. Any such statement delivered pursuant hereto
may be relied upon by an owner of the Property, any prospective purchaser of
the Property, any mortgagee or
prospective mortgagee of the Property, any prospective assignee of any such
mortgagee, or any lessor or prospective lessor of the land which is a part of
the Property. Tenant’s failure to execute and deliver such statement within the
time specified shall be deemed the equivalent of the delivery of a statement to
the effect that Landlord is in full compliance with the terms of the Lease.

 

30.                                 No Recourse to Landlord. The
obligations of Landlord under this
Lease do not constitute personal obligation of the individual partners,
directors, officers or shareholders of Landlord, and Tenant shall look solely
to the Property, and to no other assets of Landlord or the holders of any
mortgages or deeds of trust on the Property, for satisfaction of any liability
in respect of this Lease, and Tenant shall not seek recourse against the individual partners, directors, officers or
shareholders of Landlord or the holders of any mortgages or deeds of trust on
the Property or any of their personal assets for such satisfaction.

 

31.                                 Holding Over. If Tenant shall, with the knowledge and consent
of Landlord, continue to remain in the Demised Premises after the expiration of
the Term of this Lease and any extensions thereof, then Tenant shall be deemed
a month-to-month tenant at a monthly rental equal to twice the monthly
installment of Rent which was due immediately prior to the expiration of the
Term, the first (1st) installment of which shall be due and payable on the
first day following the end of the Term and on the first (1st) day of each month thereafter until the termination of such month-to-month
tenancy. Tenant shall give to Landlord at least thirty (30) days prior written notice of any intention to
quit the Demised Premises, and Tenant shall be entitled to thirty (30) days
written notice to quit the Demised Premises, except in the event of non-payment
of Rent or of the breach of any other covenant by Tenant, in which event Tenant
shall not be entitled to any notice to quit, the usual thirty (30) days notice
to quit being hereby expressly waived. Notwithstanding the foregoing, in the event
that Tenant shall hold over after the expiration of the Term, and if Landlord
shall desire to regain possession of the Demised Premises promptly at the
expiration of the Term, then at any time prior to Landlord’s acceptance of Rent
from Tenant as a monthly tenant hereunder, Landlord, at its option, may
forthwith re-enter and take possession of the Demised Premises without process,
or by any legal process in force.

 

32.                                 Submission of Lease. The submission of this Lease for
examination by Tenant does not constitute a reservation of, or option for, the
Demised Premises, and this Lease shall become effective only upon execution and
delivery thereof by Landlord and Tenant.

 

33.                                 Covenant of Landlord. Landlord covenants that it has the right to
enter into this Lease, and that if Tenant shall pay the Minimum Rent and
Additional Rent and shall perform all of Tenant’s obligation under this Lease,
Tenant shall, during the Term hereof, have the right to peaceably and quietly
occupy and enjoy the Demised Premises without molestation or hindrance by
Landlord or any party claiming through or under Landlord,
subject, however, to the mortgages and deeds of trust described in
Section 28 and except as otherwise provided herein. The term “Landlord” as
used herein shall mean solely the owner of Landlord’s interest in the Property,
whoever that may be at the relevant time, so that in the event of any sale or
transfer of Landlord’s interest in the Property, any prior landlord shall be
freed and relieved of all covenants and obligations of Landlord hereunder.

 

25

 

34.                                 Force Majeure. If Landlord fails to provide any service or
to perform any obligation on its part to be performed hereunder as the result
of any (i) strikes, lockouts, or labor disputes; (ii) inability to
obtain labor, materials, fuel, electricity, services or reasonable substitutes
therefore; (iii) acts of God, civil commotion, fire or other casualty;
(iv) governmental action of any kind; or (v) other conditions similar
to those enumerated above and beyond Landlord’s reasonable control, then, such
failure shall be excused and shall not be deemed a breach hereunder, provided
immediately commences it’s obligation upon the cessation of the conditions.

 

35.                                 Delay in Possession. If Landlord shall be unable to give
possession of the Demised Premises on the date on which Landlord and Tenant
expected the Term to commence by reason of the fact that the Property or the
Demised Premises are being constructed
and have not been sufficiently
completed to make the Demised Premises ready for occupancy, or by reason of the
fact that a certificate of occupancy has not been procured, or if Landlord is
unable to give possession by reason of the holding over or retention of
possession of a previous tenant or occupant, or its repairs, improvements or
decoration of the Demised Premises, or of the Property are not completed,
Landlord shall not be subject to any liability for the failure to give
possession on said date. Under such circumstances, and except as otherwise
provided herein, the rent reserved and covenanted to be paid herein shall not
commence until the possession of Demised Premises is given or the Demised
Premises are available for occupancy by Tenant and no such failure to give
possession of the date of commencement shall in any other respect affect the
validity of this Lease or the obligations of Tenant hereunder, nor shall same
be construed in any way to extend the Term of this Lease. If permission is
given to Tenant to enter into the possession of the Demised Premises prior to
the date specified as the commencement of the Term of this Lease, Tenant
covenants and agrees that such occupancy shall be deemed to be under all of the
terms, conditions, covenants and provisions of this Lease.

 

36.                                 Financial Statements. Tenant shall, provide Landlord annually
with a current financial statement. Such statements shall be prepared in
accordance with generally accepted accounting principles consistently applied,
and, if such is the normal practice of Tenant, shall be audited by an
independent certified public accountant. If it is not the normal practice of
Tenant to prepare audited statements, then the unaudited statements shall be
certified to by the Tenant’s chief financial officer.

 

37.                                 Attorney’s Fees. If either party hereto initiates legal action to resolve a dispute under the terms of this Lease, then
the substantially prevailing party shall be entitled to reimbursement from the
other party of the prevailing party’s reasonable attorneys’ fees and court costs.

 

38.                                 Brokers. Landlord and Tenant each represent and warrant that except as
hereinafter set forth neither of them has employed any broker in carrying on
the negotiations relating to this Lease. Landlord shall indemnify and hold
Tenant harmless, and Tenant shall indemnify and hold Landlord harmless, from
and against any claim for brokerage or other commission arising from and out of
any breach of the foregoing representation and warranty.

 

39.                                 Notices. All notices or other
communications hereunder shall be in writing and shall be deemed duly given if
sent via hand delivery, next-day express delivery, or certified or registered
mail (return receipt requested, first class, postpaid prepaid), (i) if to
Landlord at:

 

26

 

Canton
Crossing Tower, LLC

1501
South Clinton Street, 16th Floor

Baltimore,
Maryland 21224

Attention:
David H. Berman

 

and
(ii) if to Tenant at:

Next
Generation Financial Services

1501
South Clinton Street, 3rd Floor 

Baltimore,
MD 21224

Attention:

 

prior
to the Lease Commencement Date and at the Demised Premises after the Lease
Commencement Date, unless notice of a change of address is given pursuant to
the provisions of this Section. Notice shall be deemed given on the day the
same is dispatched for hand delivery, or one (1) day after the same is
sent via next-day express delivery, or three (3) days after the same is
sent via certified or registered mail.

 

40.                                 Miscellaneous.

 

(a)                                  This Lease and the exhibits attached hereto
contain and embody the entire agreement of the parties hereto, and no
representations, inducements or agreements, oral or otherwise, between Landlord
and Landlord’s agents and Tenant not contained in this Lease and exhibits shall
be of any force or effect. This Lease may not be modified, changed or
terminated in whole or in part in any manner other than by an agreement in
writing duly signed by both parties hereto.

 

(b)                                 The terms, covenants and conditions hereof
shall be binding upon and inure to the permitted successors in interest and
assigns of the parties hereto. Landlord may freely and fully assign its
interest hereunder.

 

(c)                                  If any provisions of this Lease or the
application thereof to any person or circumstances shall to any extent be held
void, unenforceable or invalid, then the remainder of this Lease or the
application of such provision to persons or circumstances other than those as
to which it is held void, unenforceable or invalid shall not be affected
thereby, and each provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.

 

(d)                                 Tenant shall not record this Lease without
the written consent of Landlord, which may be given or denied in Landlord’s
sole discretion. If Landlord consents to such recordation, the cost thereof
shall be paid by Tenant.

 

(e)                                  The captions and headings throughout this
Lease are for convenience and reference only and the words contained therein
shall in no way be held or deemed to define, limit, describe, explain, modify,
amplify or add to the interpretation, construction or meaning of any provision
of, or the scope of the intent of, this Lease, nor in any way affect this
Lease.

 

27

 

(f)                                    Nothing contained in this Lease shall be
deemed or construed to create a partnership or joint venture of or between
Landlord and Tenant, or to create any other relationship between the parties
hereto other than that of Landlord and Tenant.

 

(g)                                 Feminine or neuter pronouns shall be
substituted for those of the masculine form, the plural shall be substituted
for singular number and vice versa in any place or places herein in which the
context may require such substitute or substitutions.

 

(h)                                 This Lease is to be construed under the laws
of the jurisdiction in which the property is located.

 

41.                                 No Waiver. If under the provisions hereof Landlord shall institute proceedings
and a compromise or settlement thereof shall be made, the same shall not
constitute a waiver of any covenant herein contained nor of any of Landlord’s
rights hereunder. No waiver by Landlord of any breach of any covenant,
condition or agreement herein contained shall operate as a waiver of the same.
Any installment of Rent paid by Tenant shall be first applied against any
past-due installments of Rent, beginning with the earliest installment then
due. No endorsement or statement on any check or letter accompanying a check
for payment of Rent be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord’s right to recover
the balance of such Rent or to pursue any other remedy at law or in equity, or
as provided in this Lease. No re-entry by Landlord, and no acceptance by
Landlord of keys from Tenant, shall be considered an acceptance of a surrender
of the Demised Premises or termination of this Lease.

 

42.                                 Authority of Landlord and Tenant. Each individual executing this Lease on
behalf of Landlord and Tenant represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of Landlord or Tenant in
accordance with a partnership agreement, bylaws or a duly adopted resolution of
the Board of Directors, and that this Lease is binding upon Landlord and Tenant
in accordance with its terms.

 

28

 

IN
WITNESS WHEREOF, Landlord and Tenant have executed this Lease under seal as of
the day and year first hereinabove written.

 

	
  WITNESS/ATTEST:

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Canton Crossing Tower, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Megan Wilson

  	
   

  	
  By:

  	
  /s/ Duane R Rhine

  
	
  Megan Wilson

  	
   

  	
   

  	
  Duane R
  Rhine - V.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Next Generation Financial Services,

  
	
   

  	
   

  	
  A Division of First Mariner Mortgage,

  
	
   

  	
   

  	
  A Division of First Mariner Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Megan Wilson

  	
   

  	
  By:

  	
  /s/ Joseph A. Cicero

  
	
  Megan Wilson

  	
   

  	
   

  

 

29

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