Document:

Exhibit 10.1

 

STANDARD OFFICE LEASE - GROSS

 

AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

 

 

1.              Basic Lease  Provisions (“Basic Lease Provisions”)

 

1.1                               Parties:
This Lease, dated, for reference purposes only, April 1, 2003, is made by
and between CFD-Mesa Ridge Partners, L.P., (herein called “Lessor”) and Altris
Software, Inc. a California Corporation, doing business under the name of
Spescom Software Inc, (herein called “Lessee”).

 

1.2                               Premises:
 Suite Numbers(s) 100, first floors,
consisting of approximately 12,192 rentable sf feet, more or less, as defined
in paragraph 2 and as shown on Exhibit “A” hereto (the “Premises”).

 

1.3                               Building:
Commonly described as being located at 10052 Mesa Ridge Court, in the City of
San Diego, County of San Diego, State of California, as more particularly
described in Exhibit A hereto, and as defined in paragraph 2.

 

1.4                               Use:
general office, subject to paragraph 6.

 

1.5                               Term:
72 months commencing September 1, 2003 (“Commencement Date”) and ending August
31, 2009 Subject to Section 3.2 below and Section 51(b) of the
Addendum.        , as defined in paragraph
3.

 

1.6                               Base
Rent: $18,897.60 per month, payable on the first day of each month, per
paragraph 4.1.

 

1.7                               Base
Rent Increase: On each anniversary date of the commencement date the
monthly Base Rent payable under paragraph 1.6 above shall be adjusted as
provided the attached addendum (Paragraph 50)

 

1.8                               Rent
Paid Upon Execution: $18,897.60 for the first month of occupancy.

 

1.9                               Security
Deposit: $21,907.50.

 

1.10                        Lessee’s
Share of Operating Expense Increase: 27.27% as defined in paragraph 4.2.

 

2.              Premises, Parking
and Common Areas.

 

2.1                               Premises:
The Premises are a portion of a building, herein sometimes referred to as the
“Building” identified in paragraph 1.3 of the Basic Lease Provisions.  “Building” shall include adjacent parking
structures used in connection therewith. 
The Premises, the Building, the Common Areas, the land upon which the
same are located, along with all other buildings and improvements thereon or
thereunder, are herein collectively referred to as the “Office Building
Project.”  Lessor hereby leases to
Lessee and Lessee leases from Lessor for the term, at the rental, and upon all
of the conditions set forth herein, the real property referred to in the Basic
Lease Provisions, paragraph 1.2, as the “Premises”, including rights to the
Common Areas as hereinafter specified. 
See Addendum Paragraph 67

 

2.2                               Vehicle
Parking: So long as Lessee is not in default, and subject to the rules and
regulations attached hereto, and as established by Lessor from time to time,
Lessee shall be entitled to use 48 parking spaces in the Office Building
Project at no charge to Lessee or its Invitees

 

2.2.1    If
Lessee commits, permits or allows any of the prohibited activities described in
the Lease or the rules then in effect, then Lessor shall have the right, after
three days written notice and the failure of Lessee to cease such prohibited
activity, in addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost to Lessee, which
cost shall be immediately payable upon demand by Lessor.

 

2.3                               Common
Areas  - Definition.  The term “Common Areas” is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Office Building Project that are provided and designated by the Lessor
from time to time for the general non-exclusive use of Lessor,  Lessee and of other lessees of the Office
Building Project and their respective employees, suppliers, shippers, customers
and invitees, including but not limited to common entrances, lobbies,
corridors, stairways and stairwells, public restrooms, elevators, escalators,
parking areas to the extent not otherwise prohibited by this Lease, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways, ramps,
driveways, landscaped areas and decorative walls.

 

2.4                               Common
Areas  – Rules and Regulations.  Lessee agrees to abide by and conform to the
rules and regulations attached hereto as Exhibit B with respect to the Office
Building Project and Common Areas, and to cause its employees, suppliers,
shippers, customers, and invitees to so abide and conform.  Lessor or such other person(s) as Lessor may
appoint shall have the exclusive control and management of the Common Areas and
shall have the right, from time to time, to modify, amend and enforce said
rules and regulations, in a non-discriminatory manner.  Lessor shall not be responsible to Lessee for
the non-compliance and said rules and regulations by other lessees, their
agents, employees and invitees of the Office Building Project.

 

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

 

(a)          To make changes to the
Building interior and exterior and Common Areas, including, without limitation,
changes in the location, size shape, number, and appearance thereof, including
but not limited to the lobbies, windows, stairways, air shafts, elevators,
escalators, restrooms, driveways, entrances, parking spaces, parking areas,
loading and unloading areas, ingress, egress, direction of traffic, decorative
walls, landscaped areas and walkways; provided, however, Lessor shall at all
times provide the parking facilities required by applicable law;

 

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

 

(c)          To designate other land
and improvements outside the boundaries of the Office Building Project to be a
part of the Common Areas, provided that such other land and improvements have a
reasonable and functional relationship to the Office Building Project;

 

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

 

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

 

(f)            To do and perform such
other acts and make such other changes in, to or with respect to the Common
Areas and Office Building Project as Lessor may, in the exercise of sound
business judgment deem to be appropriate. 
See Addendum Paragraph 68

 

3.              Term.

 

3.1                               Term.  See Addendum Paragraph 69 The term and
Commencement Date of this Lease shall be as specified in paragraph 1.5 of
the Basic Lease Provisions.

 

3.2                               Delay
In Possession.  Notwithstanding said
Commencement Date, if for any reason Lessor cannot deliver possession of the
Premises to Lessee on said date and subject to paragraph 3.2.2,  Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease or the
obligations of Lessee hereunder or extend the term hereof; but in such case,
Lessee shall not be obligated to pay rent or perform any other obligation of
Lessee under the terms of this Lease, except as may be otherwise provided in
this Lease, until possession of the Premises is tendered to Lessee, as

 

	
  ã1984 - American
  Industrial Real Estate Association

  	
  FULL SERVICE-GROSS

  	
  Initials:

  	
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  Form OFG -0/6/84E

  

 

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hereinafter defined; provided, however, that a Lessor shall not have
delivered possession of the Premises within sixty (60) days following said
Commencement Date, as the same may be extended under the terms of a Work Letter
executed by Lessor and Lessee, Lessee may, at Lessee’s option, by notice in
writing to Lessor within ten (10) days thereafter, cancel this Lease, in which
event the parties shall be discharged from all obligations hereunder; provided,
however, that, as to Lessee’s obligations, Lessee first reimburses Lessor for
all costs incurred for Non-Standard Improvements and, as to Lessor’s
obligations, Lessor shall return any money previously deposited by Lessee (less
any offsets due Lessor for Non-Standard Improvements); and provided further,
that if such written notice by Lessee is not received by Lessor within said ten
(10) day period, Lessee’s right to cancel this Lease hereunder shall terminate
and be of no further force or effect.

 

3.2.1                                             Possession
Tendered  - Defined.  Possession of the Premises shall be deemed
tendered to Lessee (“Tender of Possession”) when (1) the improvements to be
provided by Lessor under this Lease are substantially completed, (2) the
Building utilities are ready for use in the Premises, (3) Leases has reasonable
access to the Premises, and (4) ten (10) days shall have expired following
advance written notice to Lessee of the occurrence of the matters described in
(1), (2) and (3), above of this paragraph 3.2.1.

 

3.2.2                                             Delays
Caused by Lessee.  There shall be no
abatement of rent, and the sixty (60) day period following the Commencement
Date before which Lessee’s right to cancel this Lease accrues under paragraph
3.2, shall be deemed extended to the extent of any delays caused by acts or omissions
of Lessee, Lessee’s agents, employees and contractors.  See Addendum Paragraph 70

 

3.3                               Early
Possession.  If Lessee occupies the
Premises prior to said Commencement Date, such occupancy shall be subject to
all provisions of this Lease, such occupancy shall not change the termination
date.

 

3.4                               Uncertain
Commencement.  In the event
commencement of the Lease term is defined as the completion of the
improvements, Lessee and Lessor shall execute an amendment to this Lease
establishing the date of Tender of Possession (as defined in paragraph 3.2.1)
or the actual taking of possession by Lessee, whichever first occurs, as the
Commencement Date.

 

4.              Rent.

 

4.1                               Base
Rent.  Subject to adjustment as
hereinafter provided in paragraph 4.3, and except as may be otherwise expressly
provided in this Lease, Lessee shall pay to Lessor the Base Rent for the
Premises set forth in paragraph 1.6 of the Basic Lease Provisions, without
offset or deduction.  Lessee shall pay
Lessor upon execution hereof the advance Base Rent described in
paragraph 1.8 of the Basic Lease Provisions.  Rent for any period during the term hereof which is for less than
one month shall be prorated based upon the actual number of days of the
calendar month involved.  Rent shall be
payable in lawful money of the United States to Lessor at the address stated
herein or to such other persons or at such other places as Lessor may designate
in writing.

 

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

 

(a)          “Lessee’s Share” is
defined, for purposes of this Lease, as the percentage set forth in paragraph
1.10 of the Basic Lease Provisions, which percentage has been determined by dividing
the approximate square footage of the Premises by the total approximate square
footage of the rentable space contained in the Office Building Project.  It is understood and agreed that the square
footage figures set forth in the Basic Lease Provisions are approximations
which Lessor and Lessee agree are reasonable and shall not be subject to
revision except in connection with an actual change in the size of the Premises
or a change in the space available for lease in the Office Building Project.

 

(b)         “Base Year” is defined as
the calendar year in which the Lease term commences.

 

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

 

(d)         “Operating Expenses” is
defined, for purposes of this Lease, to include all costs, if any, incurred by
Lessor in the exercise of its reasonable discretion, for:

 

(i)                                     The
operation, repair, maintenance, and replacement, in neat, clean, safe, good
order and condition, of the Office Building Project, including but not limited
to, the following:

 

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

 

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

 

(ii)                                  Trash
disposal, janitorial and security services;

 

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

 

(iv)                              The
cost of the premiums for the liability and property insurance polices to be
maintained by Lessor under paragraph 8 hereof;

 

(v)                                 The
amount of the real property taxes to be paid by Lessor under paragraph 10.1
hereof;

 

(vi)                              The
cost of water, sewer, gas, electricity, and other publicly mandated services to
the Office Building Project;

 

(vii)                           Labor,
salaries, and applicable fringe benefits and costs, materials, supplies and
tools, used in maintaining and/or cleaning the Office Building Project and
accounting and a management fee (not to exceed 5%) of the gross revenues of the
project for such year attributable to the operation of the Office Building
Project;

 

(viii)                        Replacing
and/or adding improvements mandated by any governmental agency and any repairs
or removals necessitated thereby amortized over its useful life according to
Federal income tax regulations or guidelines for depreciation thereof
(including interest on the unamortized balance as is then reasonable in the
judgment of Lessor’s accountants);

 

(ix)                                Replacement
of equipment or improvements that have a useful life for depreciation purposes
according to Federal income tax guidelines of five (5) years or less, as
amortized over such life.

 

(e)          Operating Expenses shall
not include the costs of replacements of equipment or improvements that have a
useful life for Federal income tax purposes in excess of five (5) years unless
it is of the type described in paragraph 4.2(d) (viii), in which case their
cost shall be included as above provided.

 

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

 

(g)         Lessee’s Share of
Operating Expense increase shall be payable by Lessee within ten (10) days
after a reasonably detailed statement of actual expenses is presented to Lessee
by Lessor.  At Lessor’s option, however,
an amount may be estimated by Lessor from time to time in advance of Lessee’s
Share of the Operating Expense Increase for any Comparison Year, and the same
shall be payable monthly or quarterly, as Lessor shall designate, during each
Comparison Year of the Lease term, on the same day as the Base Rent is due
hereunder.  In the event that Lessee
pays Lessor’s estimate of Lessee’s Share of Operating Expense Increase as
aforesaid, Lessor shall deliver to Lessee within sixty (60) days after the
expiration of each Comparison Year a reasonably detailed statement showing
Lessee’s Share of the actual Operating Expense Increase incurred during such
year.  If Lessee’s payments under this
paragraph 4.2(g) during said Comparison Year exceed Lessee’s Share as indicated
on said statement, Lessee shall be entitled to credit the amount of such overpayment
against Lessee’s Share of Operating Expense Increase next falling due.  If Lessee’s payments under this paragraph
during said Comparison Year were less than Lessee’s Share as indicated on said
statement, Lessee shall pay to Lessor the amount of the deficiency within ten
(10) days after delivery by Lessor to Lessee of said statement.  Lessor and Lessee shall forthwith adjust
between them by cash payment any balance determined to exist with respect to
that portion of the last Comparison Year for which Lessee is responsible as to
Operating Expense Increases, notwithstanding that the Lease term may have
terminated before the end of such Comparison Year.

 

4.3                               Rent
Increase.  (see addendum)

 

2

 

5.              Security Deposit.  Lessee shall deposit with Lessor upon
execution hereof the security deposit set forth in paragraph 1.9 of the Basic
Lease Provisions as security for Lessee’s faithful performance of Lessee’s
obligations hereunder.  If Lessee fails
to pay rent or other charges due hereunder, or otherwise defaults with respect
to any provision of this Lease, Lessor may use, apply or retain all or any
portion of said deposit for the payment of any rent or other charge in default
for the payment of any other sum to which Lessor may become obligated by reason
of Lessee’s default, or to compensate Lessor for any loss or damage which
Lessor may suffer thereby.  If Lessor so
uses or applies all or any portion of said deposit, Lessee shall within ten
(10) days after written demand therefor deposit cash with Lessor in an amount
sufficient to restore said deposit to the full amount then required of
Lessee.  Lessor shall not be required to
keep said security deposit separate from its general accounts.  If Lessee performs all of Lessee’s
obligations hereunder, said deposit, or so much thereof as has not heretofore
been applied by Lessor, shall be returned, without payment of interest or other
increment for its use, to Lessee (or, at Lessor’s option, to the last assignee,
if any, of Lessee’s interest hereunder) at the expiration of the term hereof,
and after Lessee has vacated the Premises. 
No trust relationship is created herein between Lessor and Lessee with
respect to said Security Deposit.

 

6.              Use.

 

6.1                               Use.  The Premises shall be used and occupied only
for the purpose set forth in paragraph 1.4 of the Basic Lease Provisions.

 

6.2                               Compliance
with Law.

 

(a)          Lessor warrants to
Lessee that the Premises, in the state existing on the date that the Lease term
commences, but without regard to alterations or improvements made by Lessee or
the use for which Lessee will occupy the Premises, does not violate any
covenants or restrictions of record, or any applicable building code,
regulation or ordinance in effect on such Lease term Commencement Date.  See Addendum Paragraph 71 In the event it is
determined that this warranty has been violated, then it shall be the
obligation of the Lessor, after written notice from Lessee, to promptly, at
Lessor’s sole cost and expense, rectify any such violation.

 

(b)         Except as provided in
paragraph 6.2(a) Lessee shall, at Lessee’s expense, promptly comply with all
applicable statutes, ordinances, rules, regulations, orders, covenants and
restrictions of record, and requirements of any fire insurance underwriters or
rating bureaus, now in effect or which may hereafter come into effect, whether
or not they reflect a change in policy from that now existing, during the term
or any part of the term hereof, relating in any manner to the Premises and the
occupation and use by Lessee of the Premises. 
Lessee shall conduct its business in a lawful manner and shall not use
or permit the use of the Premises or the Common Areas in any manner that will
tend to create waste or a nuisance or shall tend to disturb other occupants of
the Office Building Project.

 

6.3                               Condition
of Premises.

 

(a)          Lessor shall deliver the
Premises to Lessee in a clean condition on the Lease Commencement Date (unless
Lessee is already in possession) and Lessor warrants to Lessee that the plumbing,
lighting, air conditioning, and heating system in the Premises shall be in good
operating condition.  In the event that
it is determined that this warranty has been violated, then it shall be the
obligation of Lessor, after receipt of written notice from Lessee setting forth
with specificity the nature of the violation, to promptly, at Lessor’s sole
cost, rectify such violation.

 

(b)         Except as otherwise
provided in this Lease, Lessee hereby accepts the Premises and the Office
Building Project in their condition existing as of the Lease Commencement Date
or the date that Lessee takes possession of the Premises, whichever is earlier,
subject to all applicable zoning, municipal, county and state laws, ordinances
and regulations governing and regulating the use of the Premises, and any
easements, covenants or restrictions of record, and accepts this Lease subject
thereto and to all matters disclosed thereby and by any exhibits attached
hereto.  Lessee acknowledges that it has
satisfied itself by its own independent investigation that the Premises are
suitable for its intended use, and that neither Lessor nor Lessor’s agent or
agents has made any representation or warranty as to the present or future
suitability of the Premises, Common Areas, or Office Building Project for the
conduct of Lessee’s business.  See
Addendum Paragraph 72

 

7.              Maintenance,
Repairs, Alterations and Common Area Services.

 

7.1                               Lessor’s
Obligations.  Lessor shall keep the
Office Building Project, including the Premises, interior and exterior walls,
roof, and common areas, and the equipment whether used exclusively for the
Premises or in common with other premises, in good condition and repair;
provided, however, Lessor shall not be obligated to paint, repair or replace
wall coverings, or to repair or replace any improvements that are not
ordinarily a part of the Building or are above then Building standards.  Except as provided in paragraph 9.5,
there shall be no abatement of rent or liability of Lessee on account of any
injury or interference with Lessee’s business with respect to any improvements,
alterations or repairs made by Lessor to the Office Building Project or any
part thereof.  Lessee expressly waives
the benefits of any statute now or hereafter in effect which would otherwise
afford Lessee the right to make repairs at Lessor’s expense or to terminate
this Lease because of Lessor’s failure to keep the Premises in good order,
condition and repair.

 

7.2                               Lessee’s
Obligations.

 

(a)          Notwithstanding Lessor’s
obligation to keep the Premises in good condition and repair, Lessee shall be
responsible for payment of the cost thereof to Lessor as additional rent for
that portion of the cost of any maintenance and repair of the Premises, or any
equipment (wherever located) that serves only Lessee or the Premises, to the
extent such cost is attributable to causes beyond normal wear and tear.  Lessee shall be responsible for the cost of
painting, repairing or replacing wall coverings, and to repair or replace any
Premises improvements that are not ordinarily a part of the Building or that
are above then Building standards. 
Lessor may, at its option, upon reasonable notice, elect to have Lessee
perform any particular such maintenance or repairs the cost of which is
otherwise Lessee’s responsibility hereunder.

 

(b)         On the last day of the
term hereof, or on any sooner termination, Lessee shall surrender the Premises
to Lessor in the same condition as received, ordinary wear and tear excepted,
clean and free of debris.  Any damage or
deterioration of the Premises shall not be deemed ordinary wear and tear if the
same could have been prevented by good maintenance practices by Lessee.  Lessee shall repair any damage to the
Premises occasioned by the installation or removal of Lessee’s trade fixtures,
alterations, furnishings and equipment. 
Except as otherwise stated in this Lease, Lessee shall leave the air
lines, power panels, electrical distribution systems, lighting fixtures, air
conditioning, window coverings, wall coverings, carpets, wall panelling, ceilings
and plumbing on the Premises and in good operating condition.

 

7.3                               Alterations
and Additions.

 

(a)          Lessee shall not,
without Lessor’s prior written consent make any alterations, improvements,
additions, Utility Installations or repairs in, on or about the Premises, or
the Office Building Project.  As used in
this paragraph 7.3 the term “Utility Installation” shall mean carpeting, window
and wall coverings, power panels, electrical distribution systems, lighting
fixtures, air conditioning, plumbing, and telephone and telecommunication
wiring and equipment.  At the expiration
of the term, Lessor may require the removal of any or all of said alterations,
improvements, additions or Utility Installations, and the restoration of the
Premises and the Office Building Project to their prior condition, at Lessee’s
expense.  See Addendum Paragraph 73
Should Lessor permit Lessee to make its own alterations, improvements,
additions or Utility Installations, Lessee shall use only such contractor as
has been expressly approved by Lessor, and Lessor may require Lessee to provide
Lessor, at Lessee’s sole cost and expense, a lien and completion bond in an
amount equal to one and one-half times the estimated cost of such improvements,
to insure Lessor against any liability for mechanic’s and materialmen’s liens
and to insure completion of the work. 
Should Lessee

 

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make any alterations, improvements, additions or Utility Installations
without the prior approval of Lessor, or use a contractor not expressly
approved by Lessor, Lessor may, at any time during the term of this Lease,
require that Lessee remove any part or all of the same.

 

(b)         Any
alterations, improvements, additions or Utility Installations in or about the
Premises or the Office Building Project that Lessee shall desire to make shall
be presented to Lessor in written form, with proposed detailed plans.  If Lessor shall give its consent to Lessee’s
making such alteration, improvement, addition or Utility Installation, the
consent shall be deemed conditioned upon Lessee acquiring a permit to do so
from the applicable governmental agencies, furnishing a copy thereof to Lessor
prior to the commencement of the work, and compliance by Lessee with all
conditions of said permit in a prompt and expeditious manner.

 

(c)          Lessee
shall pay, when due, all claims for labor or materials furnished or alleged to
have been furnished to or for Lessee at or for use in the Premises, which
claims are or may be secured by any mechanic’s or materialmen’s lien against
the Premises, the Building or the Office Building Project, or any interest
therein.

 

(d)         Lessee
shall give Lessor not less than ten (10) days’ notice prior to the commencement
of any work in the Premises by Lessee, and Lessor shall have the right to post
notices of non-responsibility in or on the Premises or the Building as provided
by law.  If Lessee shall, in good faith,
contest the validity of any such lien, claim or demand, then Lessee shall, at
its sole expense defend itself and Lessor against the same and shall pay and
satisfy any such adverse judgment that may be rendered thereon before the
enforcement thereof against the Lessor or the Premises, the Building or the
Office Building Project, upon the condition that if Lessor shall require,
Lessee shall furnish to Lessor a surety bond satisfactory to Lessor in an
amount equal to such contested lien claim or demand indemnifying Lessor against
liability for the same and holding the Premises, the Building and the Office
Building Project free from the effect of such lien or claim.  In addition, Lessor may require Lessee to
pay Lessor’s reasonable attorneys fees and costs in participating in such
action if Lessor shall decide it is to Lessor’s best interest so to do.

 

(e)          All
alterations, improvements, additions and Utility Installations (whether or not
such Utility Installations constitute trade fixtures of Lessee), which may be
made to the Premises by Lessee, including but not limited to, floor coverings,
panelings, doors, drapes, built-ins, moldings, sound attenuation, and lighting
and telephone or communication systems, conduit, wiring and outlets, shall be
made and done in a good and workmanlike manner and of good and sufficient
quality and materials and shall be the property of Lessor and remain upon and
be surrendered with the Premises at the expiration of the Lease term, unless
Lessor requires their removal pursuant to paragraph 7.3(a).  Provided Lessee is not in default,
notwithstanding the provisions of this paragraph 7.3(e), Lessee’s personal
property and equipment, other than that which is affixed to the Premises so
that it cannot be removed without material damage to the Premises or the
Building, and other than Utility Installations, shall remain the property of
Lessee and may be removed by Lessee subject to the provisions of paragraph 7.2.

 

(f)            Lessee
shall provide Lessor with as-built plans and specifications for any
alterations, improvements, additions or Utility installations.

 

7.4                               Utility
Additions.  Lessor reserves the
right to install new or additional utility facilities throughout the Office
Building Project for the benefit of Lessor or Lessee, or any other lessee of
the Office Building Project, including, but not by way of limitation, such
utilities as plumbing, electrical systems, communication systems, and fire
protection and detection systems, so long as such installations do not
unreasonably interfere with Lessee’s use of the Premises.

 

8.              Insurance;
Indemnity.

 

8.1                               Liability
Insurance  - Lessee.  Lessee shall, at Lessee’s
expense, obtain and keep in force during the term of this Lease a policy of
Comprehensive General Liability insurance utilizing an Insurance Services
Office standard form with Broad Form General Liability Endorsement: (GL0404),
or equivalent, in an amount of not less than $1,000,000 per occurrence of
bodily injury and property damage combined or in a greater amount as reasonably
determined by Lessor and shall insure Lessee with Lessor as an additional
insured against liability arising out of the use, occupancy or maintenance of
the Premises.  Compliance with the above
requirement shall not, however, limit the liability of Lessee hereunder.

 

8.2                               Liability
Insurance - Lessor.  Lessor shall obtain and keep in
force during the term of this Lease a policy of Combined Single Limit Bodily
Injury and Broad Form Property Damage Insurance, plus coverage against such
other risks Lessor deems advisable from time to time, insuring Lessor, but not
Lessee, against liability arising out of the ownership, use, occupancy or
maintenance of the Office Building Project in an amount not less than
$2,000,000.00 per occurrence.

 

8.3                               Property
Insurance  - Lessee.  Lessee shall, at Lessee’s
expense, obtain and keep in force during the term of this Lease for the benefit
of Lessee, replacement cost fire and extended coverage insurance, with
vandalism and malicious mischief, sprinkler leakage and earthquake sprinkler
leakage endorsements, in an amount sufficient to cover not less than 100% of
the full replacement cost, as the same may exist from time to time, of all of
Lessee’s personal property, fixtures, equipment and tenant improvements.

 

8.4                               Property
Insurance  - Lessor.  Lessor shall obtain and keep in
force during the term of this Lease a policy or policies of insurance covering
loss or damage to the Office Building Project improvements, but not Lessee’s
personal property, fixtures, equipment or tenant improvements, in the amount of
the full replacement cost thereof, as the same may exist from time to time,
utilizing Insurance Services Office standard form, or equivalent, providing
protection against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, plate glass, and such other
perils as Lessor deems advisable or may be required by a lender having a lien
on the Office Building Project.  In
addition, Lessor shall obtain and keep in force, during the term of this Lease,
a policy of rental value insurance covering a period of one year, with loss
payable to Lessor, which insurance shall also cover all Operating Expenses for
said period.  Lessee will not be named
in any such policies carried by Lessor and shall have no right to any proceeds
therefrom.  The policies required by
these paragraphs 8.2 and 8.4 shall contain such deductibles as Lessor or the
aforesaid lender may determine.  In the
event that the Premises shall suffer an insured loss as defined in paragraph
9.1(f) hereof, the deductible amounts under the applicable insurance policies shall
be deemed an Operating Expense.  Lessee
shall not do or permit to be done anything which shall invalidate the insurance
policies carried by Lessor.  Lessee
shall pay the entirety of any increase in the property insurance premium for
the Office Building Project over what it was immediately prior to the
commencement of the term of this Lease if the increase is specified by Lessor’s
insurance carrier as being caused by the nature of Lessee’s occupancy or any
act or omission of Lessee.

 

8.5                               Insurance
Policies.  Lessee shall deliver to
Lessor copies of liability insurance policies required under paragraph 8.1 or
certificates evidencing the existence and amounts of such insurance within
seven (7) days after the Commencement Date of this Lease.  No such policy shall be cancelable or
subject to reduction of coverage or other modification except after thirty (30)
days prior written notice to Lessor. 
Lessee shall, at least thirty (30) days prior to the expiration of such
policies, furnish Lessor with renewals thereof.

 

8.6                               Waiver
of Subrogation.  Lessee and Lessor
each hereby release and relieve the other, and waive their entire right of
recovery against the other, for direct or consequential loss or damage arising
out of or incident to the perils covered by property insurance carried by such
party, whether due to the negligence of Lessor or Lessee or their agents,
employees, contractors and/or invitees. 
If necessary all property insurance policies required under this Lease
shall be endorsed to so provide.

 

8.7                               Indemnity.  Lessee shall indemnify and hold harmless
Lessor and its agents, Lessor’s master or ground lessor, partners and lenders,
from and against any and all claims for damage to the person or property of
anyone or any entity arising from Lessee’s use of the Office Building Project,
or from the conduct of Lessee’s business or from any activity, work or things
done, permitted or suffered by Lessee in or about the Premises or elsewhere and
shall further indemnify and hold harmless Lessor from and against any and all
claims, costs and expenses arising from any breach or default in the
performance of any obligation on Lessee’s part to be performed under the terms
of this Lease, or arising from any act or omission of Lessee, or any of
Lessee’s agents, contractors, employees or invitees, and from and against all
costs, attorney’s fees, expenses and liabilities incurred by Lessor as the
result of any such use, conduct, activity, work, things done, permitted or
suffered, breach, default or negligence, and in dealing reasonably therewith,
including but not limited to the defense or pursuit of any claim or any action
or proceeding involved therein; and in case any action or proceeding be brought
against Lessor by reason of any such matter, Lessee upon notice from Lessor
shall defend the same at Lessee’s expense by counsel reasonably satisfactory to
Lessor and Lessor shall cooperate with Lessee in such defense.  Lessor need not have first paid any such
claim in order to be so indemnified. 
Lessee, as a material part of the consideration to Lessor, hereby assumes
all risk of damage to property of Lessee or injury to persons, in, upon or
about the Office Building Project arising from any cause and Lessee hereby
waives all claims in respect thereof against Lessor.

 

8.8                               Exemption
of Lessor from Liability.  See Addendum
Paragraph 74 Lessee hereby agrees that Lessor shall not be liable for injury to
Lessee’s business or any loss of income therefrom or for loss of or damage to
the goods, wares, merchandise or other property of Lessee, Lessee’s employees,
invitees, customers, or any other person in or about the Premises or the Office
Building Project, nor shall Lessor be liable for injury to the person of
Lessee, Lessee’s employees, agents or contractors, whether such damage or
injury is caused by or results from theft, fire, steam, electricity, gas, water
or rain, or from the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures,
or from any other cause, whether said damage or injury results from conditions
arising upon the Premises or upon other portions of the Office Building
Project, or from other sources or places, or from new construction or the
repair, alteration or improvement of any part of the Office Building Project,
or of the equipment, fixtures or appurtenances

 

4

 

applicable thereto, and regardless of whether the cause of such damage
or injury or the means of repairing the same is inaccessible, Lessor shall not
be liable for any damages arising from any act or neglect of any other lessee,
occupant or user of the Office Building Project, nor from the failure of Lessor
to enforce the provisions of any other lease of any other lessee of the Office
Building Project.

 

8.9                               No
Representation of Adequate Coverage. 
Lessor makes no representation that the limits or forms of coverage of
insurance specified in this paragraph 8 are adequate to cover Lessee’s property
or obligations under this Lease.

 

9.              Damage or
Destruction.

 

9.1                               Definitions.

 

(a)          “Premises Damage” shall
mean if the Premises are damaged or destroyed to any extent.

 

(b)         “Premises Building
Partial Damage” shall mean if the Building of which the Premises are a part is
damaged or destroyed to the extent that the cost to repair is less than fifty
percent (50%) of the then Replacement Cost of the Building.

 

(c)          “Premises Building Total
Destruction” shall mean if the Building of which the Premises are a part is
damaged or destroyed to the extent that the cost to repair is fifty percent
(50%) or more of the then Replacement Cost of the Building.

 

(d)         “Office Building Project
Buildings” shall mean all of the buildings on the Office Building Project site.

 

(e)          “Office Building Project
Buildings Total Destruction” shall mean if the Office Building Project
Buildings are damaged or destroyed to the extent that the cost to repair is
fifty percent (50%) or more of the then Replacement Cost of the Office Building
Project Buildings.

 

(f)            “Insured Loss” shall
mean damage or destruction which was caused by an event required to be covered
by the insurance described in paragraph 8. 
The fact that an Insured Loss has a deductible amount shall not make the
loss an uninsured loss.

 

(g)         “Replacement Cost” shall
mean the amount of money necessary to be spent in order to repair or rebuild
the damaged area to the condition that existed immediately prior to the damage
occurring, excluding all improvements made by lessees, other than those
installed by Lessor at Lessee’s expense.

 

9.2                               Premises
Damage; Premises Building Partial Damage.

 

(a)          Insured Loss:  Subject to the provisions of paragraphs 9.4
and 9.5, if at any time during the term of this Lease there is damage which is
an Insured Loss and which falls into the classification of either Premises Damage
or Premises Building Partial Damage, then Lessor shall, as soon as reasonably
possible and to the extent the required materials and labor are readily
available through usual commercial channels, at Lessor’s expense, repair such
damage (but not Lessee’s fixtures, equipment or tenant improvements originally
paid for by Lessee) to its condition existing at the time of the damage, and
this Lease shall continue in full force and effect.

 

(b)         Uninsured Loss: Subject
to the provisions of paragraphs 9.4 and 9.5, if at any time during the term of
this Lease there is damage which is not an Insured Loss and which falls within
the classification of Premises Damage or Premises Building Partial Damage,
unless caused by a negligent or willful act of Lessee (in which event Lessee shall
make the repairs at Lessee’s expense), which damage prevents Lessee from making
any substantial use of the Premises, Lessor may at Lessor’s option either (i)
repair such damage as soon as reasonably possible at Lessor’s expense, in which
event this Lease shall continue in full force and effect, or (ii) give written
notice to Lessee within thirty (30) days after the date of the occurrence of
such damage of Lessor’s intention to cancel and terminate this Lease as of the
date of the occurrence of such damage, in which event this Lease shall
terminate as of the date of the occurrence of such damage.

 

9.3                               Premises
Building Total Destruction;  Office
Building Project Total Destruction. 
Subject to the provisions of paragraphs 9.4 and 9.5, if at any time
during the term of this Lease there is damage, whether or not it is an Insured
Loss, which falls into the classifications of either (i) Premises Building
Total Destruction, or (ii) Office Building Project Total Destruction, then
Lessor may at Lessor’s option either (i) repair such damage or destruction as
soon as reasonably possible at Lessor’s expense (to the extent the required
materials are readily available through usual commercial channels) so its
condition existing at the time of the damage, but not Lessee’s fixtures,
equipment or tenant improvements, and this Lease shall continue in full force
and effect, or (ii) give written notice to Lessee within thirty (30) days after
the date of occurrence of such damage of Lessor’s intention to cancel and
terminate this Lease, in which case this Lease shall terminate as of the date
of the occurrence of such damage.

 

9.4                               Damage
Near End of Term.

 

(a)          Subject to paragraph
9.4(b), if at any time during the last twelve (12) months of the term of this
Lease there is substantial damage to the Premises, Lessor may at Lessor’s
option cancel and terminate this Lease as of the date of occurrence of such
damage by giving written notice to Lessee of Lessor’s election to do so within
30 days after the date of occurrence of such damage.  See Addendum Paragraph 75

 

(b)         Notwithstanding paragraph
9.4(a), in the event that Lessee has an option to extend or renew this Lease,
and the time within which said option may be exercised has not yet expired,
Lessee shall exercise such option, if it is to be exercised at all, no later
than twenty (20) days after the occurrence of an Insured Loss falling within
the classification of Premises Damage during the last twelve (12) months of the
term of this Lease.  If Lessee duly
exercises such option during said twenty (20) day period.  Lessor shall, at Lessor’s expense, repair
such damage, but not Lessee’s fixtures, equipment or tenant improvements, as
soon as reasonably possible and this Lease shall continue in full force and
effect.  If Lessee fails to exercise
such option during said twenty (20) day period, then Lessor may at Lessor’s
option terminate and cancel this Lease as of the expiration of said twenty (20)
day period by giving written notice to Lessee of Lessor’s election to do so
within ten (10) days after the expiration of said twenty (20) day period,
notwithstanding any term or provision in the grant of option to the contrary.

 

9.5                               Abatement
of Rent; Lessee’s Remedies.

 

(a)          In the event Lessor
repairs or restores the Building or Premises pursuant to the provisions of this
paragraph 9, and any part of the Premises are not usable (including loss of use
due to loss of access or essential services), the rent payable hereunder
(including Lessee’s Share of Operating Expense Increase) for the period during
which such damage, repair or restoration continues shall be abated, provided
(1) the damage was not the result of the negligence of Lessee, and (2) such
abatement shall only be to the extent the operation of Lessee’s business as
operated from the Premises is adversely affected.  Except for said abatement of rent, if 

any, Lessee shall have no claim
against Lessor for any damage suffered by reason of any such damage,
destruction, repair or restoration.

 

(b)         If Lessor shall be
obligated to repair or restore the Premises or the Building under the
provisions of this Paragraph 9 and shall not commence such repair or
restoration within ninety (90) days after such occurrence, or if Lessor shall
not complete the restoration and repair within six (6) months after such
occurrence, Lessee may at Lessee’s option cancel and terminate this Lease by
giving Lessor written notice of Lessee’s election to do so at any time prior to
the commencement or completion, respectively, of such repair or restoration.  In such event this Lease shall terminate as
of the date of such notice.

 

(c)          Lessee agrees to
cooperate with Lessor in connection with any such restoration and repair,
including but not limited to the approval and/or execution of plans and
specifications required.

 

9.6                               Termination
- Advance payments.  Upon
termination of this Lease pursuant to this paragraph 9, an equitable adjustment
shall be made concerning advance rent and any advance payments made by Lessee
to Lessor.  Lessor shall, in addition,
return to Lessee so much of Lessee’s security deposit as has not theretofore
been applied by Lessor.

 

9.7                               Waiver.  Lessor and Lessee waive the provisions of
any statute which relate to termination of leases when leased property is
destroyed and agree that such event shall be governed by the terms of this
Lease, including without limitation, Section 1932, Subdivision 2, and
Section 1933, Subdivision 4 of the California Civil Code.

 

10.       Real Property Taxes.

 

10.1                        Payment of
Taxes.  Lessor shall pay the real
property tax, as defined in paragraph 10.3, applicable to the Office Building
Project subject to reimbursement by Lessee of Lessee’s Share of such taxes in
accordance with the provisions of paragraph 4.2, except as otherwise
provided in paragraph 10.2.

 

10.2                        Additional
Improvements.  Lessee shall not be
responsible for paying any increase in real property tax specified in the tax
assessor’s records and work sheets as being caused by additional improvements
placed upon the Office Building Project by other lessees or by Lessor for the
exclusive enjoyment of any other lessee. 
Lessee shall, however, pay to Lessor at the time that Operating Expenses
are payable under paragraph 4.2(c) the entirety of any increase in real
property tax if assessed solely by reason of additional improvements placed
upon the Premises by Lessee or at Lessee’s request.

 

10.3                        Definition
of “Real Property Tax”.  As used
herein, the term “real property tax” shall include any form of real estate tax
or assessment, general, special, ordinary or extraordinary, and any license
fee, commercial rental tax, improvement bond or bonds, levy or tax (other than
inheritance, personal income or estate taxes) imposed on the Office Building
Project or any portion thereof by any authority having the direct or indirect
power to tax, including any city, county, state or federal government, or any
school, agricultural, sanitary, fire, street, drainage or other improvement
district thereof, as against any legal or equitable interest of Lessor in the
Office Building Project or in any portion thereof, as against Lessor’s right to
rent or other income therefrom, and as

 

5

 

against Lessor’s business of leasing the Office Building Project.  The term “real property tax” shall also
include any tax, fee, levy, assessment or charge (i) in substitution of,
partially or totally, any tax, fee, levy, assessment or charge hereinabove
included within the definition of “real property tax”, or (ii) the nature of
which was hereinbefore included within the definition of “real property tax”,
or (iii) which is imposed for a service or right not charged prior to
June 1, 1978 or, if previously charged, has been increased since
June 1, 1978, or (iv) which is imposed as a result of a change in ownership,
as defined by applicable local statutes for property tax purposes, of the
Office Building Project or which is added to a tax or charge hereinbefore
included within the definition of real property tax by reason of such change of
ownership, or (v) which is imposed by reason of this transaction, any
modifications or changes hereto, or any transfers hereof.

 

10.4                        Joint
Assessment.  If the improvements or
property, the taxes for which are to be paid separately by Lessee under
paragraph 10.2 or 10.5 are not separately assessed, Lessee’s portion of that
tax shall be equitably determined by Lessor from the respective valuations
assigned in the assessor’s work sheets or such other information (which may
include the cost of construction) as may be reasonably available.  Lessor’s reasonable determination thereof,
in good faith, and absent manifest error, shall be conclusive.

 

10.5                        Personal
Property Taxes.

 

(a)          Lessee
shall pay prior to delinquency all taxes assessed against and levied upon trade
fixtures, furnishings, equipment and all other personal property of Lessee
contained in the Premises or elsewhere.

 

(b)         If
any of Lessee’s said personal property shall be assessed with Lessor’s real
property, Lessee shall pay to Lessor the taxes attributable to Lessee within
ten (10) days after receipt of a written statement setting forth the taxes
applicable to Lessee’s property.

 

11.       Utilities.

 

11.1                        Services
Provided by Lessor.  Lessor shall
provide heating, ventilation, air conditioning, and janitorial service as
reasonably required, reasonable amounts of electricity for normal lighting and
office machines, water for reasonable and normal drinking and lavatory use, and
replacement light bulbs and/or fluorescent tubes and ballasts for standard
overhead fixtures.

 

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

 

11.3                        Hours of
Service.  Said services and
utilities shall be provided during generally accepted business days and hours
or such other days or hours as may hereafter be set forth.  Utilities and services required at other
times shall be subject to advance request and reimbursement by Lessee to Lessor
of the cost thereof.  (see addendum
paragraph 59)

 

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

 

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

 

12.       Assignment and subletting.

 

12.1                        Lessor’s
Consent Required.  Lessee shall not
voluntarily or by operation of law assign, transfer, mortgage, sublet, or
otherwise transfer or encumber all or any part of Lessee’s interest in the
Lease or in the Premises, without Lessor’s prior written consent, which Lessor
shall not unreasonably withhold.  Lessor
shall respond to Lessee’s request for consent hereunder in a timely manner and
any attempted assignment, transfer, mortgage, encumbrance or subletting without
such consent shall be void, and shall constitute a material default and breach
of this Lease without the need for notice to Lessee under paragraph 13.1.  “Transfer” within the meaning of this
paragraph 12 shall include the transfer or transfers aggregating: (a) If Lessee
is a corporation, more than forty-nine percent (49%) of the voting stock of
such corporation, or (b) if Lessee is a partnership, more than twenty-five
percent (25%) of the profit and loss participation in such partnership.

 

12.2                        Lessee
Affiliate.  Notwithstanding the
provisions of paragraph 12.1 hereof, Lessee may assign or sublet the Premises,
or any portion thereof, without Lessor’s consent, to any corporation which
controls, is controlled by or is under common control with Lessee, or to any
corporation resulting from the merger or consolidation with Lessee, or to any
person or entity which acquires all the assets of Lessee as a going concern of
the business that is being conducted on the Premises, all of which are referred
to as “Lessee Affiliate”; provided that before such assignment shall be
effective, (a) said assignee shall assume, in full, the obligations of Lessee
under this Lease and (b) Lessor shall be given written notice of such
assignment and assumption.  Any such
assignment shall not, in any way, affect or limit the liability of Lessee under
the terms of this Lease even if after such assignment or subletting the terms
of this Lease are materially changed or altered without the consent of Lessee,
the consent of whom shall not be necessary.

 

12.3                        Terms and
Conditions Applicable to Assignment and Subletting.

 

(a)          Regardless
of Lessor’s consent, no assignment or subletting shall release Lessee of
Lessee’s obligation hereunder or alter the primary liability of Lessee to pay
the rent and other sums due Lessor hereunder including Lessee’s Share of
Operating Expense Increase, and to perform all other obligations to be
performed by Lessee hereunder.

 

(b)         Lessor
may accept rent from any person other than Lessee pending approval or
disapproval of such assignment.

 

(c)          Neither
a delay in the approval or disapproval of such assignment or subletting, nor
the acceptance of rent, shall constitute a waiver or estoppel of Lessor’s right
to exercise its remedies for the breach of any of the terms or conditions of
this paragraph 12 or this Lease.

 

(d)         If
Lessee’s obligation under this Lease have been guaranteed by third parties,
then an assignment or sublease, and Lessor’s consent thereto, shall not be
effective unless said guarantors give their written consent to such sublease
and the terms thereof.

 

(e)          The
consent by Lessor to any assignment or subletting shall not constitute a
consent to any subsequent assignment or subletting by Lessee or to any
subsequent or successive assignment or subletting by the sublessee.  However, Lessor may consent to subsequent
sublettings and assignments of the sublease or any amendments or modifications
thereto without notifying Lessee or anyone else liable on the Lease or sublease
and without obtaining their consent and such action shall not relieve such
persons from liability under this Lease or said sublease; however, such persons
shall not be responsible to the extent any such amendment or modification
enlarges or increases the obligations of the Lessee or sublessee under this
Lease or such sublease.

 

(f)            In
the event of any default under this Lease, Lessor may proceed directly against
Lessee, any guarantors or anyone else responsible for the performance of this
Lease, including the sublessee, without first exhausting Lessor’s remedies
against any other person or entity responsible therefor to Lessor, or any security
held by Lessor or Lessee.

 

(g)         Lessor’s
written consent to any assignment or subletting of the Premises by Lessee shall
not constitute an acknowledgment that no default then exists under this Lease
of the obligations to be performed by Lessee nor shall such consent be deemed a
waiver of any then existing default, except as may be otherwise stated by
Lessor at the time.

 

(h)         The
discovery of the fact that any financial statement relied upon by Lessor in
giving its consent to an assignment or subletting was materially false shall,
at Lessor’s election, render Lessor’s said consent null and void.

 

12.4                        Additional
Terms and Conditions Applicable to Subletting.  Regardless of Lessor’s consent, the following terms and
conditions shall apply to any subletting by Lessee of all or any part of the
Premises and shall be deemed included in all subleases under this Lease whether
or not expressly incorporated therein:

 

(a)          Lessee
hereby assigns and transfers to Lessor all of Lessee’s interest in all rentals
and income arising from any sublease heretofore or hereafter made by Lessee,
and Lessor may collect such rent and income and apply same toward Lessee’s
obligations under this Lease; provided, however, that until a default shall
occur in the performance of Lessee’s obligations under this Lease.  Lessee may receive, collect and enjoy the
rents accruing under such sublease. 
Lessor shall not, by reason of this or any other assignment of such sublease
to Lessor nor by reason of the collection of the rents from a sublessee, be
deemed liable to the sublessee for any failure of Lessee to perform and comply
with any of Lessee’s obligations to such sublessee under such sublease.  Lessee hereby irrevocably authorizes and
directs any such sublessee, upon receipt of a written notice from Lessor
stating that a default exists in the performance of Lessee’s obligations under
this Lease, to pay to Lessor the rents due and to become due under the
sublease.  Lessee agrees that such
sublessee shall have the right to rely upon any such statement and request from
Lessor, and that such sublessee shall pay such rents to Lessor without an

 

6

 

obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Lessee to the contrary Lessee
shall have no right or claim against said sublessee or Lessor for any such
rents so paid by said sublessee to Lessor.

 

(b)         No
sublease entered into by Lessee shall be effective unless and until it has been
approved in writing by Lessor.  In
entering into any sublease, Lessee shall use only such form of sublease as is
satisfactory to Lessor, and once approved by Lessor, such sublease shall not be
changed or modified without Lessor’s prior written consent.  Any sublease shall, by reason of entering
into a sublease under this Lease, be deemed for the benefit of Lessor, to have
assumed and agreed to conform and comply with each and every obligation herein
to be performed by Lessee other than such obligations as are contrary to or
inconsistent with provisions contained in a sublease to which Lessor has
expressly consented in writing.

 

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

 

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

 

(e)          With
respect to any subletting to which Lessor has consented, Lessor agrees to
deliver a copy of any notice of default by Lessee to the sublessee.  Such sublessee shall have the right to cure
a default of Lessee within three (3) days after service of said notice of
default upon such sublessee, and the sublessee shall have a right of
reimbursement and offset from and against Lessee for any such defaults cured by
the sublessee.

 

12.5                        Lessor’s
Expenses.  In the event Lessee shall
assign or sublet the Premises or request the consent of Lessor to any
assignment or subletting or if Lessee shall request the consent of Lessor for
any act Lessee proposes to do then Lessee shall pay Lessor’s reasonable costs
and expenses incurred in connection therewith, including attorneys’,
architects’, engineers’ or other consultants’ fees.

 

12.6                        Conditions
to Consent.  Lessor reserves the
right to condition any approval to assign or sublet upon Lessor’s determination
that (a) the proposed assignee or sublessee shall conduct a business on the
Premises of a quality substantially equal to that of Lessee and consistent with
the general character of the other occupants of the Office Building Project and
not in violation of any exclusives or rights then held by other tenants, and
(b) the proposed assignee or sublessee shall be financially responsible.  The proposed assignee shall NOT be at least as financially
responsible as Lessee was expected to be at the time of the execution of this
Lease or of such assignment or subletting, whichever is greater.

 

13.       Default; Remedies.

 

13.1                        Default.  The occurrence of any one or more of the
following events shall constitute a material default of this Lease by Lessee:

 

(a)          The
vacation or abandonment of the Premises by Lessee.  Vacation of the Premises shall include the failure to occupy the
Premises for a continuous period of sixty (60) days or more, whether or not the
rent is paid.

 

(b)         The
breach by Lessee of any of the covenants, conditions or provisions of
paragraphs 7.3(a), (b) or (d) (alterations), 12.1 (assignment or subletting),
13.1(a) (vacation or abandonment), 13.1(e) (insolvency), 13.1(f) (false
statement), 16(a) (estoppel certificate), 30(b) (subordination), 33 (auctions),
or 41.1 (easements), all of which are hereby deemed to be material, non-curable
defaults without the necessity of any notice by Lessor to Lessee thereof.  See Addendum Paragraph 76

 

(c)          The
failure by Lessee to make any payment of rent or any other payment required to
be made by Lessee hereunder, as and when due, where such failure shall continue
for a period of three (3) days after written notice thereof from Lessor to
Lessee.  In the event that Lessor serves
Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful
Detainer statutes such Notice to Pay Rent or Quit shall also constitute the
notice required by this subparagraph.

 

(d)         The
failure by Lessee to observe or perform any of the covenants, conditions or
provisions of this Lease to be observed or performed by Lessee other than those
referenced in subparagraphs (b) and (c), above, where such failure shall
continue for a period of thirty (30) days after written notice thereof from
Lessor to Lessee; provided, however, that if the nature of Lessee’s
noncompliance is such that more than thirty (30) days are reasonably required
for its cure, then Lessee shall not be deemed to be in default if Lessee
commenced such cure within said thirty (30) day period and thereafter
diligently pursues such cure to completion. 
To the extent permitted by law, such thirty (30) day notice shall
constitute the sole and exclusive notice required to be given to Lessee under
applicable Unlawful Detainer statutes.

 

(e)          (i)
The making by Lessee of any general arrangement or general assignment for the
benefit of creditors; (ii) Lessee becoming a “debtor” as defined in 11 U.S.C.
§101 or any successor statute thereto (unless, in the case of a petition filed
against Lessee, the same is dismissed within sixty (60) days; (iii) the
appointment of a trustee or receiver to take possession of substantially all of
Lessee’s assets located at the Premises or of Lessee’s interest in this Lease,
where possession is not restored to Lessee within thirty (30) days; or (iv) the
attachment, execution or other judicial seizure of substantially all of
Lessee’s assets located at the Premises or of Lessee’s interest in this Lease,
where such seizure is not discharged within thirty (30) days.  In the event that any provision of this
paragraph 13.1(e) is contrary to any applicable law, such provision shall be of
no force or effect.

 

(f)            The
discovery by Lessor that any financial statement given to Lessor by Lessee, or
its successor in interest or by any guarantor of Lessee’s obligation hereunder,
was materially false.

 

13.2                        Remedies.  In the event of any material default or
breach of this Lease by Lessee, Lessor may at any time thereafter, with or
without notice or demand and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason of such default:

 

(a)          Terminate
Lessee’s right to possession of the Premises by any lawful means, in which case
this Lease and the term hereof shall terminate and Lessee shall immediately
surrender possession of the Premises to Lessor.  In such event Lessor shall be entitled to recover from Lessee all
damages incurred by Lessor by reason of Lessee’s default including, but not
limited to, the cost of recovering possession of the Premises; expenses of
reletting, including necessary renovation and alteration of the Premises,
reasonable attorney’s fees, and any real estate commission actually paid; the
worth at the time of award by the court having jurisdiction thereof of the
amount by which the unpaid rent for the balance of the term after the time of
such award exceeds the amount of such rental loss for the same period that
Lessee proves could be reasonably avoided; that portion of the leasing
commission paid by Lessor pursuant to 

paragraph 15 applicable to the unexpired term of this Lease, and all
other remedies provided by California Civil Code Section 1951.2

 

(b)         Maintain
Lessee’s right to possession in which case this Lease shall continue in effect
whether or not Lessee shall have vacated or abandoned the Premises.  In such event Lessor shall be entitled to
enforce all of Lessor’s rights and remedies under this Lease, including the
right to recover the rent as it becomes due hereunder, and all other remedies
provided by California Civil.

 

(c)          Pursue
any other remedy now or hereafter available to Lessor under the laws or
judicial decisions of the state wherein the Premises are located.  Unpaid installments of rent and other unpaid
monetary obligations of Lessee under the terms of this Lease shall bear
interest from the date due at the maximum rate then allowable by law.

 

13.3                        Default by
Lessor.  Lessor shall not be in
default unless Lessor fails to perform obligations required of Lessor within a
reasonable time, but in no event later than thirty (30) days after written
notice by Lessee to Lessor and to the holder of any first mortgage or deed of
trust covering the Premises whose name and address shall have theretofore been
furnished to Lessee in writing, specifying wherein Lessor has failed to perform
such obligation; provided, however, that if the nature of Lessor’s obligation
is such that more than thirty (30) days are required for performance then
Lessor shall not be in default if Lessor commences performance within such
30-day period and thereafter diligently pursues the same to completion.

 

13.4                        Late
Charges.  Lessee hereby acknowledges
that late payment by Lessee to Lessor of Base Rent, Lessee’s Share of Operating
Expense Increase or other sums due hereunder will cause Lessor to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain.  Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed on Lessor by the terms of any mortgage or trust
deed covering the Office Building Project. 
Accordingly, if any installment of Base Rent, Operating Expense
increase, or any other sum due from Lessee shall not be received by Lessor or
Lessor’s designee within ten (10) days after such amount shall be due, then,
without any requirement for notice to Lessee, Lessee shall pay to Lessor a late
charge equal to 6% of such overdue amount. 
The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of late payment by
Lessee.  Acceptance of such late charge
by Lessor shall in no event constitute a waiver of Lessee’s default with
respect to such overdue amount, nor prevent Lessor from exercising any of the
other rights and remedies granted hereunder.

 

14.       Condemnation.  If the Premises or any portion thereof or
the Office Building Project are taken under the power of eminent domain, or
sold under the threat of the exercise of said power (all of which are herein
called “condemnation”), this Lease shall terminate as to the part so taken as
of the date the condemning authority takes title or possession, whichever first
occurs; provided that is so much of the Premises or the Office Building Project
are taken by such condemnation as would substantially and adversely affect the
operation and profitability of Lessee’s business conducted from the
Premises.  Lessee shall have the option,
to be exercised only in writing within thirty (30) days after Lessor shall have
given Lessee written notice of such taking (or in the absence of such notice,
within thirty (30) days after the condemning authority shall have taken
possession), to terminate this Lease as of the date the

 

7

 

condemning authority takes such possession.  If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion
of the Premises remaining, except that the rent and Lessee’s Share of Operating
Expense increase shall be reduced in the proportion that the floor area of the
Premises taken bears to the total floor area of the Premises.  Common Areas taken shall be excluded from
the Common Areas usable by Lessee and no reduction of rent shall occur with
respect thereto or by reason thereof. 
Lessor shall have the option in its sole discretion to terminate this Lease
as of the taking of possession by the condemning authority, by giving written
notice to Lessee of such election within thirty (30) days after receipt of
notice of a taking by condemnation of any part of the Premises or the Office
Building Project.  Any award for the
taking of all or any part of the Premises or the Office Building Project under
the power of eminent domain or any payment made under threat of the exercise of
such power shall be the property of Lessor, whether such award shall be made as
compensation for diminution in value of the leasehold or for the taking of the
fee, or as severance damages; provided, however, that Lessee shall be entitled
to any separate award for loss of or damage to Lessee’s trade fixtures,
removable personal property and unamortized tenant improvements that have been
paid for by Lessee.  For that purpose
the cost of such improvements shall be amortized over the original term of this
Lease excluding any options.  In the
event that this Lease is not terminated by reason of such condemnation, Lessor
shall to the extent of severance damages received by Lessor in connection with
such condemnation, repair any damage to the Premises caused by such
condemnation except to the extent that Lessee has been reimbursed therefor by the
condemning authority.  Lessee shall pay
any amount in excess of such severance damages required to complete such
repair.

 

15.      Broker’s Fee.

 

(a)                                  The brokers involved
in this transaction are Voit Commercial Brokerage as “listing broker” and The
Staubach Company as “cooperating broker,” licensed real estate broker(s).  A “cooperating broker” is defined as any
broker other than the listing broker entitled to a share of any commission
arising under this Lease.  Upon
execution of this Lease by both parties, Lessor shall pay to said brokers
jointly, or in such separate shares as they may mutually designate in writing,
a fee as set forth in a separate agreement between Lessor and said broker(s).

 

(d)                                 Lessee and Lessor each
represent and warrant to the other that neither has had any dealings with any
person, firm, broker or finder (other than the person(s), if any, whose names
are set forth in paragraph 15(a), above) in connection with the negotiation of
this Lease and/or the consummation of the transaction contemplated hereby, and
no other broker or other person, firm or entity is entitled to any commission
or finder’s fee in connection with said transaction and Lessee and Lessor do
each hereby indemnify and hold the other harmless from and against any costs,
expenses, attorney’s fees or liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by reason of
any dealings or actions of the indemnifying party.

 

16.       Estoppel Certificate.

 

(a)                                  Each party (as “responding
party”) shall at any time upon not less than ten (10) days’ prior written
notice from the other party (“requesting party”) execute, acknowledge and
deliver to the requesting party a statement in writing (i) certifying that this
Lease is unmodified and in full force and effect (or, if modified, stating the
nature of such modification and certifying that this Lease, as so modified, is
in full force and effect) and the date to which the rent and other charges are
paid in advance, if any, and (ii) acknowledging that there are not, to the
responding party’s knowledge, any uncured defaults on the part of the
requesting party, or specifying such defaults if any are claimed.  Any such statement may be conclusively relied
upon by any prospective purchaser or encumbrancer of the Office Building
Project or of the business of Lessee.

 

(b)                                 At the requesting
party’s option, the failure to deliver such statement within such time shall be
a material default of this Lease by the party who is to respond, without any further
notice to such party, or it shall be conclusive upon such party that (i) this
Lease is in full force and effect, without modification except as may be
represented by the requesting party, (ii) there are no uncured defaults in the
requesting party’s performance, and (iii) if Lessor is the requesting party,
not more than one month’s rent has been paid in advance.

 

(c)                                  If Lessor desires to
finance, refinance, or sell the Office Building Project, or any part thereof,
Lessee hereby agrees to deliver to any lender or purchaser designated by Lessor
such financial statements of Lessee as may be reasonably required by such
lender or purchaser.  Such statements
shall include the past three (3) years’ financial statements of Lessee.  All such financial statements shall be
received by Lessor and such lender or purchaser in confidence and shall be used
only for the purposes herein set forth.

 

17.       Lessor’s Liability.  The term “Lessor” as used herein shall mean
only the owner or owners, at the time in question, of the fee title or a
lessee’s interest in a ground lease of the Office Building Project, and except
as expressly provided in paragraph 15, in the event of any transfer of such
title or interest.  Lessor herein named
(and in case of any subsequent transfers then the grantor) shall be relieved
from and after the date of such transfer of all liability as respects Lessor’s
obligations thereafter to be performed, provided that any funds in the hands of
Lessor or the then grantor at the time of such transfer, in which Lessee has an
interest, shall be delivered to the grantee. 
The obligations contained in this Lease to be performed by Lessor shall,
subject as aforesaid, be binding on Lessor’s successors and assigns, only during
their respective periods of ownership.

 

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

 

19.       Interest on Past-due
Obligations.  Except as expressly
herein provided, any amount due to Lessor not paid when due shall bear interest
at the maximum rate then allowable by law or judgments from the date due.  Payment of such interest shall not excuse or
cure any default by Lessee under this Lease; provided, however, that interest
shall not be payable on late charges incurred by Lessee nor on any amounts upon
which late charges are paid by Lessee.

 

20.       Time of Essence.  Time is of the essence with respect to the
obligations to be performed under this Lease.

 

21.       Additional Rent.  All monetary obligations of Lessee to Lessor
under the terms of this Lease, including but not limited to Lessee’s Share of
Operating Expense increase and any other expenses payable by Lessee hereunder
shall be deemed to be rent.

 

22.       Incorporation of Prior
Agreements; Amendments.  This Lease
contains all agreements of the parties with respect to any matter mention
herein.  No prior or contemporaneous
agreement or understanding pertaining to any such matter shall be
effective.  This Lease may be modified
in writing only, signed by the parties in interest at the time of the
modification.  Except as otherwise
stated in this Lease, Lessee hereby acknowledges that neither the real estate
broker listed in paragraph 15 hereof nor any cooperating broker on this
transaction nor the Lessor or any employee or agents of any of said persons has

8

made any oral or written
warranties or representations to Lessee relative to the condition or use by
Lessee of the Premises or the Office Building Project and Lessee
acknowledges that Lessee assumes all responsibility regarding the Occupational
Safety Health Act, the legal use and adaptability of the Premises and the
compliance thereof with all applicable laws and regulations in effect during
the term of this Lease.

 

23.       Notices.  Any notice required or permitted to be
given hereunder shall be in writing and may be given by personal delivery or by
certified or registered mail, and shall be deemed sufficiently given if delivered
or addressed to Lessee or to Lessor at the address noted below or adjacent to
the signature of the respective parties, as the case may be.  Mailed notices shall be deemed given upon
actual receipt at the address required, or forty-eight hours following deposit
in the mail, postage prepaid, whichever first occurs.  Either party may by notice to the other specify a different
address for notice purposes except that upon Lessee’s taking possession of the
Premises, the Premises shall constitute Lessee’s address for notice
purposes.  A copy of all notices
required or permitted to be given to Lessor hereunder shall be concurrently
transmitted to such party or parties at such addresses as Lessor may from time
to time hereafter designate by notice to Lessee.

 

24.       Waivers.  No waiver by Lessor of any provision hereof
shall be deemed a waiver of any other provision hereof or of any subsequent
breach by Lessee of the same or any other provision.  Lessor’s consent to, or approval of, any act shall not be deemed
to render unnecessary the obtaining of Lessor’s consent to or approval of any
subsequent act by Lessee.  The
acceptance of rent hereunder by Lessor shall not be a waiver of any preceding
breach by Lessee of any provision hereof, other than the failure of Lessee to
pay the particular rent so accepted, regardless of Lessor’s knowledge of such
preceding breach at the time of acceptance of such rent.

 

25.       Recording.  Either Lessor or Lessee shall, upon
request of the other, execute, acknowledge and deliver to the other a “short
form” memorandum of this Lease for recording purposes.

 

26.       Holding Over.  If Lessee, with Lessor’s consent,
remains in possession of the Premises or any part thereof after the expiration
of the term hereof, such occupancy shall be a tenancy from month to month upon
all the provisions of this Lease pertaining to the obligations of Lessee,
except that the rent payable shall be one hundred and fifty percent (150%) of
the rent payable immediately preceding the termination date of this Lease, and
all Options, if any, granted under the terms of this Lease shall be deemed
terminated and be of no further effect during said month to month tenancy.

 

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

 

28.       Covenants and
Conditions.  Each provision of this
Lease performable by Lessee shall be deemed both a covenant and a condition.

 

29.       Binding Effect; Choice of
Law.  Subject to any provisions
hereof restricting assignment or subletting by Lessee and subject to the
provision of paragraph 17, this Lease shall bind the parties, their personal
representatives, successors and assign. 
This Lease shall be governed by the laws of the State where the Office
Building Project is located and any litigation concerning this Lease between
the parties hereto shall be initiated in the county in which the Office
Building Project is located.

 

30.       Subordination.

 

(a)                                  This Lease, and any
Option or right of first refusal granted hereby, at Lessor’s option, shall be
subordinate to any ground lease, mortgage, deed of trust, or any other
hypothecation or security now or hereafter placed upon the Office Building
Project and to any and all advances made on the security thereof and to all
renewals, modifications, consolidations, replacements and extensions
thereof.  Notwithstanding such
subordination, Lessee’s right to quiet possession of the Premises shall not be
disturbed if Lessee is not in default and so long as Lessee shall pay the rent
and observe and perform all of the provisions of this Lease, unless this Lease
is otherwise terminated pursuant to its terms. 
If any mortgagee, trustee or ground lessor shall elect to have this
Lease and any Options granted hereby prior to the lien of its mortgage, deed of
trust or ground lease, and shall give written notice thereof to Lessee, this
Lease and such Option shall be deemed prior to such mortgage, deed of trust or
ground lease, whether this Lease or such Options are dated prior or subsequent
to the date of said mortgage, deed of trust or ground lease or the date of
recording thereof.

 

(b)                                 Lessee agrees to
execute any documents reasonably required to effectuate an Attornment, a
subordination, or to make this Lease or any Option granted herein prior to the
lien of any mortgage, deed of trust or ground lease, as the case may be.  Lessee’s failure to execute such documents
within ten (10) days after written demand shall constitute a material default
by Lessee hereunder without further notice to Lessee or, at Lessor’s option,
Lessor shall execute such documents on behalf of Lessee as Lessee’s
attorney-in-fact.  Lessee does hereby
make, constitute and irrevocably appoint Lessor as Lessee’s attorney-in-fact
and in Lessee’s name, place and stead, to execute such documents in accordance
with this paragraph 30(b).

 

31.       Attorneys’ Fees.

 

31.1                           If
either party or the broker(s) named herein bring an action to enforce the terms
hereof or declare rights hereunder, the prevailing party in any such action,
trial, or appeal thereon, shall be entitled to his reasonable attorneys’ fees
to be paid by the losing party as fixed by the court in the same or separate
suit, and whether or not such action is pursued to decision or judgment.  The provisions of this paragraph shall inure
to the benefit of the broker named herein who seeks to enforce a right
hereunder.

 

31.2                           The
attorneys’ fee award shall not be computed in accordance with any court fee
schedule, but shall be such as to fully reimburse all attorneys’ fees
reasonably incurred in good faith.

 

31.3                           Lessor
shall be entitled to reasonable attorneys’ fees and all other costs and
expenses incurred in the preparation and service of notices of default and
consultations in connection therewith, whether or not a legal transaction is
subsequently commenced in connection with such default.

 

32.       Lessor’s Access.

 

32.1                           Lessor
and Lessor’s agents shall have the right to enter the Premises at reasonable
times for the purpose of inspecting the same, performing any services required
of Lessor, showing the same to prospective purchasers, lenders, or lessees,
taking such safety measures, erecting such scaffolding or other necessary
structures, making such alterations, repairs, improvements or additions to the
Premises or to the Office Building Project as Lessor may reasonably deem
necessary or desirable and the erecting, using and maintaining of utilities,
services, pipes and conduits through the Premises and/or other premises as long
as there is no material adverse effect to Lessee’s use of the Premises.  Lessor may at any time place on or about the
Premises or the Building any ordinary “For Sale” signs and Lessor may at any
time during the last 120 days of the term hereof place on or about the Premises
any ordinary “For Lease” signs.  See
Addendum Paragraph 77

 

32.2                           All
activities of Lessor pursuant to this paragraph shall be without abatement of
rent, nor shall Lessor have any liability to Lessee for the same.

 

32.3                           Lessor
shall have the right to retain keys to the Premises and to unlock all doors in
or upon the Premises other than to files, vaults and sales, and in the case of
emergency to enter the Premises by any reasonably appropriate means, and any
such entry shall not be deemed a forceable or unlawful entry or detainer of the
Premises or an eviction.  Lessee waives
any charges for damages or injuries or interference with Lessee’s property or
business in connection therewith.

 

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

 

34.       Signs.  Lessee shall not place any sign upon the
Premises or the Office Building Project without Lessor’s prior written
consent.  Under no circumstances shall
Lessee place a sign on any roof of the Office Building Project.  (see addendum paragraph 57)

 

35.       Merger.  The voluntary or other surrender of this
Lease by Lessee, or a mutual cancellation thereof, or a termination by Lessor,
shall not work a merger, and shall, at the option of Lessor, terminate all or
any existing subtenancies or may, at the option of Lessor, operate as an
assignment to Lessor of any or all

 

9

 

of such subtenancies.

 

36.       Consents.  Except for paragraphs 33 (auctions) and
34 (signs) hereof, wherever in this Lease the consent of one party is required
to an act of the other party such consent shall not be unreasonably withheld or
delayed.

 

37.       Guarantor.  In the event that there is a guarantor
of this Lease, said guarantor shall have the same obligations as Lessee under
this Lease.

 

38.       Quiet Possession.  Upon Lessee paying the rent for the
Premises and observing and performing all of the covenants, conditions and
provisions on Lessee’s part to be observed and performed hereunder, Lessee
shall have quiet possession of the Premises for the entire term hereof subject
to all of the provisions of this Lease. 
The individuals executing this Lease on behalf of Lessor represent and
warrant to Lessee that they are fully authorized and legally capable of
executing this Lease on behalf of Lessor and that such execution is binding
upon all parties holding an ownership interest in the Office Building Project.

 

39.       Options.

 

39.1                        Definition.  As used in this paragraph the word “Option”
has the following meaning: (1) the right or option to extend the term of this
Lease or to renew this Lease or to extend or renew any lease that Lessee has on
other property of Lessor; (2) the option of right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of
first refusal to lease other space within the Office Building Project or other
property of Lessor or the right of first offer to lease other space within the
Office Building Project or other property of Lessor; (3) the right or option to
purchase the Premises or the Office Building Project, or the right of first
refusal to purchase the Premises or the Office Building Project or the right of
first offer to purchase the Premises or the Office Building Project, or the
right or option to purchase other property of Lessor, or the right of first
refusal to purchase other property of Lessor or the right of first offer to
purchase other property of Lessor.

 

39.2                        Options
Personal.  Each Option granted to
Lessee in this Lease is personal to the original Lessee and may be exercised
only by the original Lessee while occupying the Premises who does so without
the intent of thereafter assigning this Lease or subletting the Premises or any
portion thereof, and may not be exercised or be assigned, voluntarily or
involuntarily, by or to any person or entity other than Lessee; provided,
however, that an Option may be exercised by or assigned to any Lessee Affiliate
as defined in paragraph 12.2 of this Lease. 
The Options, if any, herein granted to Lessee are not assignable
separate and apart from this Lease, nor may any Option be separated from this
Lease in any manner, either by reservation or otherwise.  See Addendum Paragraph 78

 

39.3                        Multiple
Options.  In the event that Lessee
has any multiple options to extend or renew this Lease a later option cannot be
exercised unless the prior option to extend or renew this Lease has been so
exercised.

 

39.4                        Effect of
Default on Options.

 

(a)          Lessee shall have no right to exercise an
Option, notwithstanding any provision in the grant of Option to the contrary,
(i) during the time commencing from the date Lessor gives to Lessee a notice of
default pursuant to paragraph 13.1(c) or 13.1(d) and continuing until the
noncompliance alleged in said notice of default is cured, or (ii) during the
period of time commencing on the day after a monetary obligation to Lessor is
due from Lessee and unpaid (without any necessity for notice thereof to Lessee)
and continuing until the obligation is paid, or (iii) in the event that Lessor
has given to Lessee three or more notices of default under paragraph 13.1(c),
or paragraph 13.1(d), whether or not the defaults are cured, during the 12
month period of time immediately prior to the time that Lessee attempts to
exercise the subject Option, (iv) if Lessee has committed any non-curable
breach, including without limitation those described in paragraph 13.1(b), or
is otherwise in default of any of the terms, covenants or conditions of this
Lease.

 

(b)         The period of time within which an Option may
be exercised shall not be extended or enlarged by reason of Lessee’s inability
to exercise an Option because of the provisions of paragraph 39.4(a).

 

(c)          All rights of Lessee under the provisions of
an Option shall terminate and be of no further force or effect, notwithstanding
Lessee’s due and timely exercise of the Option, if, after such exercise and
during the term of this Lease, (i) Lessee fails to pay to Lessor a monetary
obligation of Lessee for a period of thirty (30) days after such obligation
becomes due (without any necessity of Lessor to give notice thereof to Lessee),
or (ii) Lessee fails to commence to cure a default specified in paragraph 13.1
(d) within thirty (30) days after the date that Lessor gives notice to Lessee
of such default and/or Lessee fails thereafter to diligently prosecute said
cure to completion, or (iii) Lessor gives to Lessee three or more notices of
default under paragraph 13.1(c), or paragraph 13.1(d), whether or not the
defaults are cured, or (iv) if Lessee has committed any non-curable breach,
including without limitation those described in paragraph 13.1(b), or is
otherwise in default of any of the terms, covenants and conditions of this
Lease.

 

40.       Security Measures -
Lessor’s Reservations.

 

40.1                           Lessee
hereby acknowledges that Lessor shall have no obligation whatsoever to provide
guard service or other security measures for the benefit of the Premises or the
Office Building Project.  Lessee assumes
all responsibility for the protection of Lessee, its agents, and invitees and
the property of Lessee and of Lessee’s agents and invitees from acts of third
parties.  Nothing herein contained shall
prevent Lessor, at Lessor’s sole option, from providing security protection for
the Office Building Project or any part thereof, in which event the cost
thereof shall be included within the definition of Operating Expenses, as set
forth in paragraph 4.2(b).

 

40.2                           Lessor
shall have the following rights:

 

(a)          To change the name, address or title of the
Office Building Project or building in which the Premises are located upon not
less than 90 days prior written notice;

 

(b)         To, at Lessee’s expense, provide and install
Building standard graphics and such portions of the Common Areas as Lessor
shall reasonably deem appropriate;

 

(c)          To permit any lessee the exclusive right to
conduct any business as long as such exclusive does not conflict with any
rights expressly given herein;

 

(d)         To place such signs, notices or displays as
Lessor reasonably deems necessary or advisable upon the roof, exterior of the
buildings or the Office Building Project or on pole signs in the Common Areas;

 

40.3                           Lessee
shall not:

 

(a)          Use a representation (photographic or
otherwise) of the Building or the Office Building Project or their name(s) in
connection with Lessee’s business:

 

(b)         Suffer or permit anyone, except in emergency,
to go upon the roof of the Building.

 

41.       Easements.

 

41.1                           Lessor
reserves to itself the right, from time to time, to grant such easements,
rights and dedications that Lessor deems necessary or desirable, and to cause
the recordation of Parcel Maps and restrictions, so long as such easements,
rights, dedications, Maps and restrictions do not unreasonably interfere with
the use of the Premises by Lessee. 
Lessee shall sign any of the aforementioned documents upon request of
Lessor and failure to do so shall constitute a material default of this Lease
by Lessee without the need for further notice to Lessee.

 

41.2                           The
obstruction of Lessee’s view, air, or light by any structure erected in the
vicinity of the Building, whether by Lessor or third parties, shall in no way
affect this Lease or impose any liability upon Lessor.

 

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

 

43.       Authority.  If Lessee is a corporation, trust, or
general or limited partnership, Lessee, and each individual executing this
Lease on behalf of such entity represent and warrant that such individual is
duly authorized to execute and deliver this Lease on behalf of said
entity.  If Lessee is a corporation,
trust or partnership, Lessee shall, within thirty (30) days after execution of
this Lease, deliver to Lessor evidence of such authority satisfactory to
Lessor.

 

44.       Conflict.  Any conflict between the printed provisions,
Exhibits or Addenda of this Lease and the typewritten or handwritten
provisions, if any, shall be

 

10

 

controlled by the typewritten or handwritten provisions.

 

45.       No Offer.  Preparation of this Lease by Lessor or
Lessor’s agent and submission of same to Lessee shall not be deemed an offer to
Lessee to lease.  This Lease shall
become binding upon Lessor and Lessee only when fully executed by both parties.

 

46.       Lender Modification.  Lessee agrees to make such reasonable
modifications to this Lease as may be reasonably required by an institutional
lender in connection with the obtaining of normal financing or refinancing of
the Office Building Project.

 

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

 

48.       Work Letter.  This Lease is supplemented by that certain
Work Letter of even date executed by Lessor and Lessee, attached hereto as
Exhibit C, and incorporated herein by this reference.

 

49.       Attachments.  Attached hereto are the following documents
which constitute a part of this Lease:

 

A.                    Addendum
to Lease

B.                      Exhibit
“A” – Approved Space Plan and Notes

C.                      Exhibit
“A–1” – Approved Electrical Plan

D.                     Exhibit
“B” – The Rules and Regulation

E.                       Exhibit
“C” – Janitorial Services

 

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

 

IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR HIS APPROVAL.  NO
REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION OR BY THE REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE
LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE
TRANSACTION RELATING THERETO; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF
THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

 

	
  LESSOR

  	
   

  	
  LESSEE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CFD – Mesa Ridge Partners, L.P., a

  	
   

  	
  Altris Software, Inc a California

  	
   

  
	
  California Limited Partnership

  	
   

  	
  Corporation dba Spescom Software Inc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  CT Cal Manager, Inc., a California

  	
   

  	
  By

  	
  /s/ Carl Mostert

  	
   

  
	
   

  	
  Corporation

  	
   

  	
   

  	
  Carl Mostert

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its

  	
  General Manager

  	
   

  	
  Its

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  By:

  	
  /s/ John W. Low

  	
   

  
	
  Its

  	
  Director

  	
   

  	
   

  	
  John Low

  	
   

  
	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executed at

  	
  Newport Beach, CA 92660

  	
   

  	
  Executed at

  	
  San Diego, CA 92121

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  on

  	
   

  	
   

  	
  on

  	
  4/14/03

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address

  	
  20151 SW Birch Street, Suite 200

  	
   

  	
  Address

  	
  10052 Mesa Ridge Court, Suite 100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  San Diego, CA 92121

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NOTE:

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

  
													

 

11

 

ADDENDUM TO THAT STANDARD OFFICE LEASE -
GROSS

DATED APRIL 1, 2003, BY AND BETWEEN CFD-MESA RIDGE PARTNERS, L.P.
(“LESSOR”),

AND

ALTRIS SOFTWARE, INC. A CALIFORNIA
CORPORATION DBA: SPESCOM SOFTWARE, INC. (“LESSEE”)

 

50.                                 Base
Rent:  The monthly Base Rent shall
be paid as follows (subject to paragraph 63: Rental Abatement):

 

	
  Months

  	
   

  	
  Monthly Rent

  
	
  01-12

  	
   

  	
  $18,897.60 plus Tenant to Pay for Separately Metered Electricity

  
	
  13-24

  	
   

  	
  $19,464.53 plus Tenant to Pay for Separately Metered Electricity

  
	
  25-36

  	
   

  	
  $20,048.46 plus Tenant to Pay for Separately Metered Electricity

  
	
  37-48

  	
   

  	
  $20,649.92 plus Tenant to Pay for Separately Metered Electricity

  
	
  49-60

  	
   

  	
  $21,269.42 plus Tenant to Pay for Separately Metered Electricity

  
	
  61-72

  	
   

  	
  $21,907.50 plus Tenant to Pay for Separately Metered Electricity

  

 

51.                                 Early Free Occupancy.  Lessor shall grant to Lessee three (3)
months of Early Free Occupancy commencing upon completion of the tenant
improvements, estimated to be June 1, 2003 (“Occupancy Date”).  During the Early Free Occupancy period all
the terms and conditions of this Lease, including payment of separately metered
electricity, shall be in effect except for the payment of rent.

 

(a)                                  Beginning on the
Early Free Occupancy Date, Lessee shall occupy the Premises free of Base Rent
until the Commencement Date (Early Occupancy). 
The Early Occupancy Date shall be the later of (a) June 1, 2003, or
(b) upon Substantial Completion of the Premises as outlined in Paragraph 61 of
this Lease.  The Commencement Date shall
be ninety  (90)  days following Substantial Completion of
tenant improvements and is estimated to be September 1, 2003.

 

(b)                                 Lessor and Lessee
agree to execute a Lease Commencement Memorandum establishing the exact Early
Free Occupancy Date and the Commencement Date when those dates have been
established.  If for any reason Lessor
cannot deliver possession of the Premises to Lessee substantially completed by
the estimated Occupancy Date set forth in Paragraph 51 of the Lease, Lessor
shall not be subject to any liability therefore, nor shall such failure affect
the validity of this Lease, or the obligations of Lessee hereunder, but in such
case, the Commencement Date shall be adjusted to ninety (90) days following the
Substantial Completion Date, as defined in Paragraph 61, and all obligations
under the Lease shall be delayed, including payment of Monthly Base Rent,
Lessee’s share of Operating Expenses and all other monetary obligations under
the Lease.

 

52.                                 Assignment and Subletting.

Provided that Lessee is not in default of the Lease, fifty percent
(50%) of any sums or other economic consideration received by Lessee as a
result of any assignment or subletting entered into pursuant to Paragraph 12 of
the Lease, however denominated under the assignment or sublease, which exceed,
in the aggregate (a) the total sums which Lessee is obligated to pay Lessor
under this Lease (prorated to reflect obligations allocable to any portion of
the Premises subleased), plus (b) (i) reasonable real estate brokerage
commissions or fees payable by Lessee in connection with such assignment or
subletting and  (ii)  reasonable costs of tenant  improvements required to be constructed by
Lessee for any such assignee or sublessee, shall be paid by Lessee to Lessor as
additional rent under this Lease without affecting or reducing any obligations
of Lessee hereunder.  Lessee
understands, acknowledges and agrees that Lessor’s right to recapture any
consideration paid in connection with an approved assignment or subletting is a
material inducement for Lessor’s agreement to lease the Premises to Lessee upon
the terms and conditions set forth.

 

12

 

53.                                 Operating Expenses. 
If the Office Building Project is less than ninety-five
percent (95%) occupied during all or a portion of any Comparison Year
(including Base Year), Lessor shall make an appropriate adjustment to the
variable components of Operating Expenses for such year or applicable portion
thereof, to determine the amount of Operating Expenses that would have been
paid had the Office Building Project been ninety-five percent (95%) occupied;
and the amount so determined shall be deemed to have been the amount of
Operating Expenses for such Comparison Year, or applicable portion thereof.

 

54.                                 Liability of Lessor. 
Lessee agrees to look solely to Lessor’s interest in the
Office Building Project (or the proceeds thereof) for the satisfaction of any
remedy of Lessee for the collection of a judgement (or any judicial process)
requiring the payment of money by Lessor in the event of any default by Lessor
hereunder, and no other property or assets of Lessor, or any officer, director,
shareholder, partner, trustee, agent, servant or employee of Lessor shall be
subject to levy, execution or other enforcement procedure for the satisfaction
of Lessee remedies under or with respect to this Lease, the relationship of
Lessor and Lessee hereunder, or Lessee use or occupancy of the Premises.

 

55.                                 Environmental
Compliance; Hazardous Materials or Activities. 
Lessee shall at all times and in all respects comply with all
federal, state and local laws, ordinances and regulations relating to
industrial hygiene, environmental protection and/or the use, analysis,
generation, manufacture, storage, presence, disposal or transportation of any
“Hazardous Materials” (as hereinafter defined).  Lessee shall not cause or permit any hazardous wastes, toxic
substances or toxic or hazardous materials (collectively, “Hazardous
Materials”) to be brought upon, used, generated, stored or disposed of on,
under or about, or transported to or from, the Premises (collectively,
“Hazardous Materials”) without first receiving Lessor’s written consent, which
consent may be withheld by Lessor in its absolute discretion and may be revoked
at any time.  If Lessor consents to any
such Hazardous Materials Activities, Lessee shall conduct them in strict compliance
(at Lessee’s sole cost and expense) with all applicable Regulations, as
hereinafter defined, and using all necessary and appropriate precautions.  Lessor shall not be liable to Lessee for any
Hazardous Materials Activities by Lessee, Lessee’s employees, agents,
contractors, licensees, or invitees, whether or not consented to by
Lessor.  For purposes hereof, Hazardous
Materials shall include, but not be limited to, substances defined as
“hazardous substances”, “toxic substances”, or hazardous wastes” in the
Comprehensive Environmental Response, Comprehensive and Liability Act of 1980;
Resource Conservation and Recovery Act of 1976; Hazardous Materials
Transportation Act; section 25117 of the California Health and Safety Code; all
other laws and ordinances governing similar matters; and any regulations
adopted and publications promulgated pursuant to said laws (collectively,
“Regulations”).  Prior to using, storing
or maintaining any Hazardous Materials on or about the Premises, Lessee shall
provide Lessor with a list of the types and quantities thereof, and shall
update such list as necessary for continued accuracy.  Lessee shall also provide Lessor with a copy of any Hazardous
Materials inventory statement required by any applicable Regulation, and any update
filed in accordance with any applicable Regulation.  If Lessee’s activities violate or create a risk of violation of
any Regulation, Lessee shall cease such activities immediately, including (but
not limited to) upon notice from Lessor. 
Lessee shall immediately notify Lessor both by telephone and in writing
of any spill unauthorized discharge of Hazardous Materials or of any condition
constituting an “imminent hazard” under any Regulation.  Lessor, Lessor’s representatives and
employees shall have the right to enter the Premises at any time in the case of
emergency, and otherwise at reasonable times, for the purpose of inspecting the
condition of the Premises and for verifying compliance by Lessee with the Lease
and all laws, rules, regulations, ordinances and directives relating in any manner
to the Premises, including but not limited to matters pertaining to the use,
generation, manufacture, production, installation, maintenance, removal,
transportation, storage, spill or release of any Hazardous Materials.  Lessee shall indemnify, protect, defend
(with counsel acceptable to Lessor) and hold Lessor, its agents, employees,
lenders and the Premises, harmless from and against any all loss of rents
and/or damages, liabilities, judgments, costs, claims, liens, expenses,
penalties, permit fees, and attorney’s and consultant fees arising out of or
involving any Hazardous Materials brought onto, manufactured, produced or
stored at, discharged or transported from, the Premises by or for Lessee, its
agents, contractors, invitees, successors or assigns, or in any way under
Lessee’s control.  Lessee’s obligations
under this Paragraph shall include, but not be limited to, the effects of any
contamination or injury to any person, property or the environment created or
permitted by Lessee, and the cost of investigation (including consultant’s and
attorney’s fees and testing), removal, remediation, restoration and/or
abatement thereof, or of any contamination therein

 

13

 

involved, and shall survive the expiration or earlier termination of
the Lease.  No termination, cancellation
or release agreement entered into by Lessor and Lessee shall release from its
obligations under this Lease with respect to Hazardous Materials Activities,
unless specifically so agreed by Lessor in writing at the time of such
agreement.  Lessee shall not be liable
to Lessor for any Hazardous Materials Activities of Lessor, Lessor’s employees,
agents, contractors, licensees or invitees nor for any such Hazardous Materials
Activities prior to the Commencement Date.

 

56.                                 Notification Address.  Pursuant to Paragraph 23, Lessor shall be
noticed at:

 

	
  c/o Essex Realty
  Management Inc.

  
	
  1550 Hotel Circle Court

  
	
  San Diego, CA 92108

  
	
  (619) 220-5995

  
	
   

  
	
  Lessee shall be noticed at:

  
	
   

  
	
  Altris Software, Inc a California
  Corporation dba Spescom Software Inc

  
	
  10052 Mesa Ridge Court, Suite 100

  
	
  San Diego, CA 92121

  
	
  (     )                                       -

  

 

57.                                 Signage. 
Lessee shall be allowed building eyebrow signage directly above the
entrance to their premises.  Lessor
agrees to reimburse Lessee up to a maximum of $5,000.00 (“Signage
Allowance”).  The specific design,
location and size of said signage shall mutually be agreed upon and subject to
City approval.  If the building signage
is not available, said signage allowance may be used by Lessee toward a
mutually acceptable alternative signage solution and/or toward the payment of
rent.

 

58.                                 Option to Renew.

a.                                       Option
Right:  Lessor hereby grants to the
Lessee named in the Basic Lease Provisions one (1) option to extend the Term of
the Lease for a period of five (5) years (the “Option Term”), which option
shall be exercisable only by written notice delivered by Lessee to Lessor not
less than nine (9) months prior to and not more than twelve (12) months prior
to the expiration of the term, provided that, as of the date of delivery of
such notice, Lessee is not in default under the Lease beyond any applicable
notice and cure periods.  Upon proper
exercise of such option to extend, and provided that, as of the end of the
initial Term of the Lease, Lessee is not in default under the Lease beyond any
applicable notice and cure periods, the Term of the Lease shall be extended for
the Option Term.

 

b.                                      Option
Rent:  The Base Rent payable by Lessee
during the Option Term (the “Option Rent”) shall be the “Fair Market Rental
Rate” for the Premises.  The term “Fair
Market Rental Rate” shall mean the annual amount per rentable square foot that
a willing, non-equity, non-sublease tenant would pay and a willing Lessor would
accept on a non-sublease, basis, at arm’s length, for unencumbered space
comparable to the Premises in the Building and in comparable Class “B” office
buildings in the Sorrento Mesa market.

 

59.                                 HVAC Operating Hours.  Standard operating hours included within the
Base Year Operating Expenses shall be weekdays from 7:00 a.m. to 6:00 p.m. and
Saturdays from 9:00 a.m. to 3:00 p.m., excluding Sundays and normally
recognized national holidays. 
Thereafter, Lessee shall pay for such additional use beyond the
aforementioned hours at a rate equal to Lessor’s actual operating costs and
depreciation.

 

60.                                 Tenant Improvements.  Lessor, at Lessor’s sole cost and expense,
shall, in accordance with the Approved Space Plan using materials as stated in
the Notes to the Approved Space Plan, build the Premises in accordance with the
attached Exhibit A and A-1 as generally outlined as follows:

 

a.                                       The
addition of a dedicated double door entry for the exclusive use of Tenant
located on the perimeter of the Building, subject to Tenant’s reasonable review
and approval of the design of the same.

b.                                      Eight
(8) perimeter executive offices.

c.                                       Interior
open floor plan to accommodate approximately thirty (30) workstations
(approximately 8’X8’).

d.                                      Two
(2) conference rooms (seating for eight).

e.                                       One
(1) training room to hold approximately twelve (12) students.

f.                                         Small
phone PBX/computer server room with sufficient climate control.

 

14

 

g.                                      Storeroom.

h.                                      Break
room.

i.                                          Small
lobby/reception area.

 

Substantial Completion:  For the
purposes of this Lease, “Substantial Completion” of the Premises shall mean
that, with the exception of any tenant figures, work stations, built-in
furniture, or equipment to be installed by the Lessee and punch list items
which would not prevent the use or occupancy of the Premises for the permitted
use thereof, the tenant improvements are completed in accordance with the
Approved Space Plan and the Approved Electrical Plan and all mechanical systems
serving the Premises are in good working order.

 

Construction Representatives: 
Landlord hereby appoints the following person(s) as Landlord’s
representative (“Landlord’s Representative”) to act for Landlord in all matters
related to the construction of tenant improvements as provided herein:  Dan Culler. 
Tenant hereby appoints John Low as Tenant’s representative (“Tenant’s
Representative”) to act for Tenant in all matters related to the construction
of tenant improvements as provided herein. 
All communications with respect to the matters related to the
construction of tenant improvements shall be made to Landlord’s Representative
or Tenant’s Representative, as the case may be.  Either party may change its representative at any time by written
notice to the other party.

 

Changes in Plans:  Any changes
in the Approved Space Plan, Approved Electrical Plan or other plans and
specification after approval or deemed approval thereof by Lessee shall be
approved by Lessor and prepared at Lessee’s sole cost and expense.  Lessor’s approval of Lessee’s changes shall
not be unreasonably withheld. 
Furthermore, Lessee shall be liable for any resulting delays in
completing the tenant improvements for the increased costs in completing the
tenant improvements, if any, resulting from such delays.

 

61.                                 Rental Abatement.  Provided Lessee is not in Default of the
Lease, Lessee shall receive month thirteen (13) of this Lease ($19,464.53) free
of monthly base rent.

 

62.                                 Early Access.  Lessee shall be allowed early access to the premises commencing
May 15, 2003 for the purpose of installing network cabling, phone systems,
etc. Lessee shall not cause any delay in the completion of the improvements.

 

63.                                 Termination Right.  Lessee shall have a one-time right to
terminate the Lease at the end of the 48th month by giving written
notice to Lessor during month forty-two (42) of the Lease of Lessee’s intent to
terminate accompanied with a payment in the amount of $20,649.92 in immediately
available funds.  In the event that
Lessee fails to give such notice and payment during the 42nd month
of the Lease, Lessee shall be deemed to have waived its rights to terminate the
Lease pursuant to this paragraph 65.

 

64.                                 Non-disturbance Agreement:  Lessor shall use reasonable commercial
efforts to provide Lessee a commercially reasonable non-disturbance agreement
from Lessor’s current lender within thirty (30) days after the full execution
and delivery of this Lease by both parties, as well as all future lenders of
the project and in the case of a Sublessee, from the Master Lessor.

 

65.                                 Lessee’s Audit Rights.  If Lessee disputes the amount of Operating Expenses
(including the Comparison Year) set forth in any statement of Operating
Expenses delivered by Lessor to Lessee pursuant to Section 4.2(g) of the Lease
(“Actual Statement”), Lessee shall have the right, at its own cost and expense
to audit or inspect Lessor’s detailed records each year with respect to the
Operating Expenses, as well as all other additional rent payable by Lessee
pursuant to the Lease for any Lease Year (not to exceed one time per year) to
be exercised, if at all, not later than three (3) months following receipt of
such Actual Statement.  Lessee shall be
allowed to inspect such records with fifteen (15) days prior written notice at
Lessor’s office.  The amounts payable
under paragraph 4.2 of the Lease by Lessor to Lessee or by Lessee to Lessor as
the case may be shall be appropriately adjusted on the basis of such
audit.  Should a dispute arise between
the parties regarding the results of Lessee’s audit, either party may cause the
dispute to be submitted to JAMS/ENDISPUTE (“JAMS”) in San Diego County,
California, for binding arbitration. 
The arbitration shall be conducted in accordance with the rules of
practice and procedure of JAMS and otherwise pursuant to the California
Arbitration Act (Code of Civil Procedures Section 1280 et. seq.).  The arbitrator shall apportion the costs of
the arbitration, together with the attorneys’ fees of the parties, in the
manner deemed equitable by the arbitrator, it being the intention of the
parties that the prevailing party ordinarily be entitled to recover its
reasonable costs and fees.”

 

66.                                 Janitorial Services.  Subject to reimbursement pursuant to Section
4.2(d)(ii) of the Lease, Lessor shall provide the janitorial services described
in Exhibit C attached to the Lease.”

 

15

 

ADDITIONAL MODIFICATIONS TO THE LEASE

 

67.                                 At the end of Section 2.1, add the following:  “Notwithstanding the foregoing, Lessee shall
have the right at anytime on or before June 1, 2003 to measure and
recalculate the rentable square feet of the Premises in accordance with BOMA
SIOR standards for a multiple tenant occupancy in a two-story building using
exterior wall methodology.  In the event
that Lessee notifies Lessor on or before June 1, 2003 of a variation
between Lessee’s calculations and the square footage amount specified in
paragraph 1.2 above and the actual variation is determined to be greater than
two (2%) of the square footage amount specified in paragraph 1.2, the Base Rent
and Lessee’s Share shall be adjusted accordingly.  The Office Building Project consists of approximately 44,709
rentable square feet.”

 

68.                                 At the end of Section 2.5, add the following:  “Notwithstanding the foregoing, Lessor shall
take no action in the Common Areas which would materially adversely affect: (i)
access to the Premises, (ii) the view from the Premises, or (iii) the parking
ratio required for the Project.”

 

69.                                 Preface Section 3.1 with the clause:  “Subject to the other provisions of this
Paragraph 3,...”

 

70.                                 Add at the end of Section 3.2.2 the following
sentence:  “In order to have
the benefit of any such delays, Lessor shall give Lessee written notice of any
such delay and the number of days attributable to such delay.”

 

71.                                 In Section 6.2(a), insert the words:  “, including, the Americans with
Disabilities Act as enforced by the City of San Diego” at the end of the first
sentence.

 

72.                                 At the end of Section 6.3, add the following:  “In addition, except as otherwise provided in
this Lease, Lessee hereby accepts the Premises and the Office Building Project
in their condition existing as of the Lease Commencement Date or the date that
Lessee takes possession of the Premises, whichever is earlier, without any
obligation on Lessor’s part to make any alterations, upgrades or improvements
thereto, except as provided in paragraph 61 of the Addendum and the repair of
any latent structural defects in the Building or Premises (excluding any
portion of the Premises constructed by Lessee), which  have a material adverse effect on Lessee’s use of the Premises
and which are disclosed by Lessee and specified in written notice to Lessor
within ten (10) business days after Lessee first learns of or discovers such
latent structural defects.  Lessor shall
cause all such latent structural defects so specified by notice from Lessee to
be completed and/or repaired, at Lessor’s sole cost.”

 

73.                                 In Section 7.3(a), add at end of the third sentence
the following:  provided that
Lessor notifies Lessee at the time Lessor consents to any such alterations,
improvements, additions or Utility Installations (“Tenant Changes”) that Lessor
will require removal of such Tenant Changes and restoration of the Premises and
the Office Building Project to their prior condition on the expiration or
sooner termination of this Lease.”

 

74.                                 Preface Section 8.8 with the clause:  “except for Lessor’s gross
negligence or willful misconduct,...”

 

75.                                 At the end of Section 9.4(a), add the following:  “If at any time during the last six (6) months
of the term of the Lease there is substantial damage to the Premises and
Lessor’s contractor estimates in a writing delivered to the parties that the
repair, reconstruction or restoration of such damage cannot be completed within
the earlier to occur of (i) the scheduled expiration date of the Lease, or (ii)
sixty (60) days after the occurrence of such damage, Lessee may at Lessee’s
option cancel and terminate this Lease by giving written notice to Lessor of
Lessor’s election to do so within thirty (30) days after the date of occurrence
of such damage.”

 

76.                                 In Section 13.1(b), defaults under Section
30(b) shall not be non-curable defaults if Lessee is negotiating in good faith
the terms and conditions of the required subordination agreement.

 

77.                                 At the end of Section 32.1, add the
following provision:  “Notwithstanding
the foregoing, Lessor shall use commercially reasonable efforts not to
materially interfere with or interrupt the conduct of business by Lessee in the
Premises.”

 

78.                                 In Section 39.2 Lessee may assign its
option rights to any assignee that is approved by Lessor in connection with an
assignment of the Lease.

 

16

 

	
  LESSOR

  	
   

  	
  LESSEE

  
	
   

  	
   

  
	
  CFD-Mesa Ridge Partners,

  Performance Group, Inc.,

  a California Limited Partnership

  	
   

  	
  Altris Software, Inc. a California

  Corporation dba Spescom Software Inc

  
	
   

  	
   

  
	
  By:

  	
  CT Cal Manager, Inc.,

  A California Corporation

  	
   

  	
  By:

  	
  /s/ Carl Mostert

  
	
   

  	
   

  	
  Carl Mostert

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  General Manager

  	
  Its:

  	
  Chief Executive
  Officer

  
	
   

  	
   

  
	
  By:

  	
  David P. [ILLEGIBLE]

  	
   

  	
  By:

  	
  /s/ John Low

  
	
   

  	
   

  	
  John Low

  
	
   

  	
   

  
	
  Its:

  	
  Director

  	
   

  	
  Its:

  	
  Chief Financial
  Officer

  
	
   

  	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  Date:

  	
  4/14/03

  
	
   

  	
   

  
	
  Its:

  	
  EVP

  	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
										

 

17

 

EXHIBIT
A – APPROVED SPACE PLANS

 

[GRAPHIC]

 

18

 

[GRAPHIC]

 

19

 

EXHIBIT
A – SPACE PLAN NOTES

 

ROOM SCHEDULE

 

101                              OPEN
OFFICE

102                              STORAGE

103                              CONFERENCE

104                              OFFICE

105                              RECEPTION

106                              OFFICE

107                              TRAINING
ROOM

108                              CONFERENCE

109                              OFFICE

110                              OFFICE

111                              OFFICE

112                              OFFICE

113                              OFFICE

114                              OFFICE

115                              OFFICE

116                              LOUNGE

117                              SERVER
ROOM

118                              OPEN
OFFICE

119                              OFFICE

120                              OPEN
OFFICE

 

KEYNOTES

 

1.               NEW DOUBLE DOOR
ENTRY

2.               REPAIR OR REPLACE
DOOR - SEE CONSTRUCTION NOTE 4

 

FINISH NOTES

 

1.               EXISTING CARPET AND
BASE TO REMAIN. INSTALL NEW BASE TO ALL NEW WALLS, MATCH EXISTING.  SERVER ROOM AND LOUNGE TO RECEIVE NEW VCT
FLOORING. CARPET IN NEW STORAGE ROOM TO BE PATCHED TO MATCH EXISTING CARPET.

 

2.               ALL NEW WALLS TO BE
PAINTED TO MATCH EXISTING WALLS.

 

20

 

CONSTRUCTION NOTES 

 

1.               NEW DOUBLE DOOR
ENTRY DOORS TO MATCH OTHER EXISTING ENTRY DOORS IN STYLE AND SIZE.  PROVIDE AND INSTALL NEW CONCRETE LANDING
OUTSIDE.  NEW ENTRY. PROVIDE AND INSTALL
NEW SIDEWALK TO CONNECT LANDING TO EXISTING SIDEWALK.

 

2.               LOUNGE CABINETRY TO
BE STANDARD BASE AND UPPER CABINETS WITH EQUAL SIZED DOORS, ONE ADJUSTABLE
SHELF IN BASE, TWO ADJUSTABLE SHELVES IN UPPER CABINET.  CABINETRY TO INCLUDE A 3’ WIDE SPACE FOR
TENANT PROVIDED REFRIGERATOR AND SPACE FOR TENANT PROVIDED DISHWASHER, A
STAINLESS STEEL SINK WITH GOOSENECK HARDWARE, GARBAGE DISPOSAL, AND HOT WATER
HEATER.  ALL SURFACES TO BE PLASTIC
LAMINATE, SOLID COLOR, FORMICA OR EQUAL. 
CABINET TO BE 6’ WIDE.

 

3.               DOOR TO ROOM 12 HAS
HOLES AROUND LEVER HARDWARE.  REPAIR OR
REPLACE DOOR.

 

4.               REMOVE CARPET
STAINS OUTSIDE OF ROOM 112 DUE TO WATER DAMAMGE. 

 

KEY

 

•                  EXISTING
WALL TO REMAIN

 

•                  NEW
INTERIOR PARTITION TO UNDERSIDE OF CEILING GRID

 

•                  NEW
1-HOUR RATED WALL TO MATCH EXISTING CORRIDOR WALL

 

DOOR SCHEDULE

 

1.               EXISTING DOOR TO
REMAIN

 

2.               NEW
BUILDING STANDARD NON-RATED DOOR TIMELY OAK LEGACY STYLE. 3’- 0” W X 7’-0”H
WITH BUILDING STANDARD FRAME, BUILDING STANDARD LEVER HARDWARE PASSAGE

 

3.               NEW
DOUBLE DOOR ENTRY - PAIR OF 3’- 0”W, MIN. 7’- 0”H STOREFRONT DOOR MATCH
EXISTING STOREFRONT DOORS

 

4.               NEW
BUILDING STANDARD NON-RATED DOOR TIMELY OAK LEGACY STYLE, 3’- 0” W X 7’ - 0”H
WITH BUILDING STANDARD FRAME, BUILDING STANDARD LEVER HARDWARE, LOCKSET

 

5.               NEW
WINDOW, 4’-10”H X 7’W X 3” AFF, CLIP SASH FRAME, WITH FROSTED/PATTERNED FILM

 

DOOR NOTES

 

1.               NEW
DOOR HARDWARE TO MATCH EXISTING HARDWARE.

 

2.               ADD
LOCKSET HARDWARE TO EXISTING DOORS IN ROOMS 104, 106, 109, 110, 111, 113 AND
118.

 

21

 

EXHIBIT A–1 APPROVED
ELECTRICAL PLAN

 

[GRAPHIC]

 

22

 

[GRAPHIC]

 

23

 

EXHIBIT A–1
ELECTRICAL NOTES

 

ELECTRICAL NOTES

 

1.               ALL
RECEPTACLES SHOWN ARE EXISTING UNLESS OTHERWISE LABELED WITH “R” FOR REMOVE OR
“N” FOR NEW. “B” INDICATES EXISTING FACEPLATE TO BE REPLACED WITH NEW BLANK
FACE PLATE.

 

2.               WORKSTATIONS SHOWN
ARE FOR REFERENCE ONLY.  TO BE PROVIDED
AND INSTALLED BY TENANT.

ELECTRICAL CONTRACTOR
TO HARD-WIRE TENANTS WORKSTATIONS TO BUILDING POWER.

 

3.               ELECTRICAL
CONTRACTOR TO COORDINATE WITH TENANT ON LOCATIONS OF JUNCTION BOXES ABOVE
CEILING FOR SYSTEMS FURNITURE CONNECTIONS. 
LOCATIONS SHOWN ARE FOR REFERENCE ONLY.

 

24

 

EXHIBIT “B”

RULES AND REGULATIONS

ATTACHED TO AND MADE A PART OF STANDARD
OFFICE LEASE

 

The following Rules and Regulations shall be
in effect at the Office Building Project. 
Lessor reserves the right to adopt reasonable modifications and
additions hereto.  In the case of any
conflict between theses Rules and Regulations and the Lease, the Lease shall be
controlling.

 

1.                                       Except with the
prior written consent of Lessor, no Lessee shall conduct any retail sales or
any manufacturing of any kind in or from the Premises, or any business other
than that specifically provided for in the Lease.

 

2.                                       Lessor reserves
the right to prohibit personal goods and services vendors from access to the
Office Building Project except upon such reasonable terms and conditions,
including but not limited to the payment of a reasonable fee and provision for
insurance coverage, as are related to the safety, care and cleanliness of the
Office Building Project, the preservation of good order thereon, and the relief
of any financial or other burden on Lessor occasioned by the presence of such
vendors or the sale by them of personal goods or services to the Lessee or its
employees.  If reasonably necessary for
the accomplishment of these purposes, Lessor may exclude a particular vendor
entirely or limit the number of vendors who may be present at any one time in
the Office Building Project.  The term
“personal goods or services vendors” means persons who periodically enter the
Office Building Project of which the Premises are a part for the purpose of
selling goods or services to a Lessee, other than goods or services, which are
used by a Lessee only for the purpose of conducting its business on the
Premises.  “Personal goods or services”
include, but are not limited to, drinking water and other beverages, food,
barbering services, and shoe shining services. 
This Section 2 shall not apply to Lessee’s vendors and suppliers in
connection with Lessee’s operation of its business.

 

3.                                       The sidewalks,
halls, passages, elevators and stairways shall not be obstructed by any Lessee
or used by it for any purpose other than for ingress to and egress from their
respective Premises.  The halls,
passages, entrances, elevators, stairways, balconies and roof are not for the use
of the general public, and Lessor shall in all cases retain the right to
control and prevent access thereto of all persons whose presence in the
judgment of Lessor shall be prejudicial to the safety, character, reputation
and interests of the Office Building Project and its Lessees, provided that
nothing herein contained shall be construed to prevent such access to persons
with whom Lessee normally deals only for the purpose of  conducting its business on the Premises
(such as clients, customers, office suppliers and equipment vendors, and the
like), unless such persons are engaged in illegal activities.  No Lessee and no employees of any Lessee
shall go upon the roof of the Building without the written consent of
Lessor.  This section 3 shall not apply to
Lessee’s vendors and suppliers in connection with Lessee’s operation of its
business.

 

4.                                       The sashes, sash
doors, windows, glass lights, and any lights or skylights that reflect or admit
light into the halls or other places of the Building shall not be covered or
obstructed.  The toilet rooms, water and
wash closets and other water apparatus shall not be used for any purpose other
than that for which they were constructed, and no foreign substance of any kind
whatsoever shall be thrown therein, and the expense of any breakage, stoppage
or damage, resulting from the violation of this rule shall be borne by the
Lessee who, or whose clerks, agents, employees, or visitors, shall have caused
it.

 

5.                                       No sign,
advertisement or notice visible from the exterior of the Premises or Building
shall be inscribed, painted or affixed by Lessee on any part of the Office
Building Project or the Premises without the prior written consent of
Lessor.  If Lessor shall have given such
consent at any time, whether before or after the execution of this Lease, such
consent shall in no way operate as a waiver or release of any of the provisions
hereof or of this Lease, and shall be deemed to relate only to the particular
sign, advertisement or notice so consented to by Lessor and shall not be
construed as dispensing with the necessity of obtaining the specific written
consent of Lessor with respect to each and every such sign, advertisement or
notice, as the case may be, so consented to by Lessor.  Lessor shall have the right to remove any
non-approved sign, advertisement or notice, without notice to and at the
expense of Lessee, and Lessor shall not be liable in damages for such removal.

 

6.                                       In order to
maintain the outward professional appearance of the Office Building Project,
all window coverings to be installed at the Premises shall be subject to
Lessor’s prior approval.  If Lessor, by
a notice in writing to Lessee, shall object to any curtain, blind, shade or
screen attached to, or hung ink, or used in connection with, any window or door
of the Premises, such use of such curtain, blind, shade or screen shall be
forthwith discontinued by Lessee.  No
awnings shall be permitted on any part of the Premises.

 

7.                                       Lessee shall not
lay linoleum, tile, carpet or other similar floor covering so that the same
shall be affixed to the floor of the Premises in any manner except as approved
by Lessor.

 

1

 

8.                                       Lessee shall not
do or permit anything to be done in the Premises, or bring or keep anything
therein, which shall in any way increase the rate of fire insurance on the
Office Building Project, or on the property kept therein, or obstruct or
interfere with the rights of other lessees, or in any way injure or annoy them,
or conflict with the regulations of the Fire Department or the fire laws, or
with any insurance policy upon the Office Building Project, or any part
thereof, or with any rules and ordinances established by the Board of Health or
other governmental authority.

 

9.                                       No Lessee shall
sweep or throw or permit to be swept or thrown from the Premises any dirt or
other substance into any of the corridors or halls or elevators, or out of the
doors or windows or stairways of the Building. 
Lessee shall not use, keep or permit to be used any foul or noxious gas
or substance in the Premises, or permit or suffer the Premises to be occupied
or used in a manner offensive or objectionable to Lessor or other occupants of
the Office Building Project by reason of noise, odors, fire hazards and/or vibrations,
or interfere in any way with other lessees or those having business therein,
nor shall any animals or birds be kept in or about the Office Building Project.

 

10.                                 Lessee and its
employees, agents and invitees shall not smoke any tobacco products or any
other smoking materials whatsoever in the Premises, Building, common areas or
any other area of the Project, except in such areas, if any, as shall be
designated by Lessor for smoking, in Lessor’s sole and absolute discretion.

 

11.                                 No cooking shall be done
or permitted by Lessee on the Premises, except for the use of a microwave oven
for food or Underwriter’s Laboratory approved equipment for brewing coffee,
tea, and similar beverages shall be permitted, provided that such use is in
compliance with law.  Offices in the
Office Building Project shall not be used for the storage or merchandise or for
sleeping or lodging.

 

12.                                 Lessee, upon the
termination of its tenancy, shall deliver to Lessor all the keys of offices,
rooms and toilet rooms which shall have been furnished Lessee or which Lessee
shall have had made, and in the event of loss of any keys so furnished, shall
pay Lessor therefore.

 

13.                                 On Saturdays after
6:00 p.m., Sundays and legal holidays, and on other days between the hours of
7:00 p.m. and 7:00 a.m., access to the Office Building Project or to the
halls, corridors, elevators or stairways in the Building, or to the Premises
may be refused unless the person seeking access is known to the building
watchman, if any, in charge and has a pass or is properly identified.  Lessor shall in no case be liable for
damages for the admission to or exclusion from the Office Building Project of
any person whom Lessor has the right to exclude under Rule 3 above.  In case of invasion, mob, riot, public
excitement, or other commotion, Lessor reserves the right, but shall not be
obligated, to prevent access to the Office Building Project during the
continuance of the same by closing the doors or otherwise, for the safety of
the tenants and protection of property in the Office Building Project.

 

14.                                 Lessee shall see that
the windows and doors of the Premises are closed and securely locked before
leaving the Building and Lessee shall exercise extraordinary care and caution
that all water faucets or water apparatus are entirely shut off before Lessee
or Lessee’s employees leave the Building, and that all electricity, gas or air
shall likewise be carefully shut off, so as to prevent waste or damage, and for
any default or carelessness Lessee shall make good all injuries sustained by
other lessees or occupants of the Building or Lessor.

 

15.                                 Lessee shall not alter
any lock or install a new or additional lock or any bolt on any door of the
Premises without prior written consent of Lessor.  If Lessor shall gives its consent, Lessee shall in each case
furnish Lessor with a key for any such lock.

 

16.                                 Lessee shall not
install equipment such as, but not limited to, electronic tabulating or
computer equipment requiring electrical or air conditioning service in excess
of those to be provided by Lessor under the Lease and any such equipment shall
be placed in the Premises in settings approved by Lessor to absorb or prevent
any vibration, noise or annoyance.

 

17.                                 No bicycle, or
shopping cart, or other vehicle or any animal shall be brought into the
Premises or the halls, corridors, elevators or any part of the Building by
Lessee.

 

18.                                 Lessor shall have the
right to prohibit the use of the name of the Office Building Project or any
other publicity by Lessee, which in Landlord’s opinion tends to impair the
reputation of the Office Building Project, or their desirability for other
lessees, and upon written notice from Lessor, Lessee will refrain from or
discontinue such publicity.

 

19.                                 Lessee shall not erect
any aerial or antenna on the roof or exterior walls of the Premises, the
Building or the Office Building Project.

 

20.                                 Lessee shall not
overload the floor of the Premises.  In
addition, Lessee shall not mark, drive nails, screw or drill into partitions,
ceilings or floor of the Premises or deface the Premises.

 

2

 

21.                                 No furniture, freight
or equipment of any kind shall be brought into the Building or the Building’s
elevator without the consent of Lessor and all moving of the same into or out
of the Building shall be done at such time and in such manner as Lessor shall
designate.  Lessor shall have the right
to prescribe the weight, size and position of all safes and other heavy
equipment brought into the Building and also the times and manner of moving the
same in and out of the Office Building Project.  Safes or other heavy objects shall, if considered necessary by
Lessor, stand on wood strips of such thickness as is necessary to properly
distribute the weight.  However,
Lessor’s consent to placement of Lessee’s safes, heavy equipment or furniture
shall not constitute a representation or warranty by Lessor that the safe,
heavy equipment or furniture complies, with regard to distribution of weight
and/or vibration, with the provisions of this Rule 21 nor relieve Lessee from
responsibility for the consequences of non-compliance.  Lessor will not be responsible for loss of
or damage to any such safe or property from any cause and all damage done to
the Building by moving or maintaining any such safe or other property shall be
repaired at the expense of Lessee. 
There shall not be used in any space, or in the public halls of the
Building, either by any lessee or others, any hand trucks except those equipped
with rubber tires and side guards.

 

22.                                 Except with the
written consent of Lessor, no person or persons other than those approved by
Lessor shall be permitted to enter the Building for their purpose of cleaning
the same.  Lessee shall not cause any
unnecessary labor by reason of Lessee’s carelessness or indifference in the
preservation of good order and cleanliness. Lessor shall in no way be
responsible to any Lessee for any loss of property on the Premises, however
occurring, or for any damage done to the effects of any lessee by the janitor or
any other employee or any other person. 
Janitor service shall include ordinary dusting and cleaning by the
janitor assigned to such work and shall not include cleaning of carpets or
rugs, except normal vacuuming, or moving of furniture and other special services.  Janitor services may not be furnished on
nights when rooms are occupied after 9:00 p.m.

 

23.                                 Lessor will direct
electricians as to where and how the telephone wires are to be introduced into
the Building.  No boring or cutting for
wires into the Building will be allowed without consent of Lessor.  The location of telephone wires, data
cabling and other office equipment within the Premises shall not require the
approval of Lessor.

 

24.                                 No furniture,
packages, supplies, equipment or merchandise will be received in the Building
or carried up or down in the elevators or the stairs except between such hours
and in such elevators or stairs as shall be designated by Lessor.

 

25.                                 Lessor reserves the
right to exclude or expel from the Office Building Project any person who, in
the judgment of Lessor, is intoxicated or under the influence of liquor or
illegal, non-prescription drugs, or who shall in any manner do any act in
violation of any of the Rules and Regulations of the Office Building Project.

 

26.                                 The requirements of
Lessee will be attended to only upon application to Lessor.  Contractors, vendors and employees of Lessor
shall not perform any work or do anything outside of their regular duties
unless under special instructions from the Lessor or Lessor’s agent.

 

27.                                 No vending machine
shall be installed, maintained or operated upon the Premises without the
written consent of the Lessor.

 

28.                                 Lessor will give
Lessee reasonable notice and, in addition, reimburse Lessee for reasonable
charges for changes to its stationery up to a total aggregate cost of $250.00.

 

29.                                 Lessee agrees that it
shall comply with all fire and security regulations that may be issued from
time to time by Lessor and Lessee also shall provide Lessor with the name of a
designated responsible employee to represent Lessee in all matters pertaining
to such fire or security regulations.

 

30.                                 Lessor reserves the
right by written notice to Lessee, to rescind, alter or waive any rule or
regulation at any time prescribed for the Office Building Project, when, in
Lessor’s judgment, it is necessary, desirable or proper for the best interest
of the Office Building Project and its lessees.

 

31.                                 Lessees shall not
disturb, solicit, or canvas any occupant of the Office Building Project and
shall cooperate to prevent same.

 

32.                                 Standard operating
hours included within the Base Year Operating Expenses shall be weekdays from
7:00 a.m. to 6:00 p.m. and Saturdays from 9:00 a.m. to 3:00 p.m.,
excluding Sundays and normally recognized national holidays.  Thereafter, Lessee shall pay for such
additional use beyond the aforementioned hours at a rate equal to Lessor’s
actual operating costs and depreciation.

 

3

 

33.                                 Lessee shall cooperate
with Lessor in obtaining maximum effectiveness of the cooling system by closing
blinds when the sun’s rays fall directly on windows of the Premises.  Lessee shall not obstruct alter, or in any
way impair the efficient operation of Lessor’s heating, ventilating and air
conditioning system.  Lessee shall not
tamper with or change the setting of any thermostats or control valves.

 

34.                                 Parking:

a.                                       The parking lot
shall be accessible twenty-four (24) hours per day, subject to parking card or
other reasonable identification or security restriction as may be reasonably
established by Lessor from time to time. 
Lessee agrees to cooperate with Lessor in completing regular maintenance
of the parking lot.

b.                                      Automobiles must
be parked entirely within the stall lines.

c.                                       All directional
signs and arrows must be observed and the speed limit shall be 5 miles per
hour.

d.                                      Parking is
prohibited in areas not striped for parking.

e.                                       Lessor may
refuse to permit any person who violates the within rules to park in the
parking lot, and any violation of the rules shall subject the automobile to
removal from the parking lot at the parker’s expense.

f.                                         Every parker
is required to park and lock his or her own automobile.  All responsibility for any loss or damage to
automobiles or any personal property therein is assumed by the parker.

g.                                      The parking lot
is for the sole purpose of parking one automobile per space.  Washing, waxing, cleaning or servicing of
any vehicles by the parker or his agents is prohibited.

h.                                      Storage of
vehicles in the parking facilities is prohibited.  Lessee and Lessee’s employees and visitors shall not leave
vehicles in the parking lot overnight, except that in connection with routine
business trips by Lessee’s employees only, Lessee may park up to three
passenger vehicles for a period not to exceed three calendar days, provided
that in no event shall Lessor incur any liability for or be responsible for any
damage or loss to any such vehicle.

i.                                          Lessor
reserves the right to restrict customer, Lessee and Lessee’s employees parking
to a limited designated area or areas.

 

35.                                 Lessee agrees to
comply and acquaint its employees with such reasonable rules and regulations in
the use of such Common Areas as Lessor may adopt from time to time for the
orderly and proper operation of said Common Areas.

 

36.                                 Lessor reserves the
right to make such other and further reasonable and non-discriminatory rules
and regulations as in its judgment may be for the safety, care and cleanliness
of the Office Building Project and for the preservation of good order therein.  Lessee agrees to abide by these Rules and
Regulations herein above stated and any additional rules and regulations, which
are adopted hereafter.

 

 

	
  Date:

  	
  4/17/03

  	
   

  	
  Date:

  	
  4/14/03

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Lessor’s Initials:

  	
  [ILLEGIBLE]

  	
   

  	
  Lessee’s Initials:

  	
  [ILLEGIBLE]

  
							

 

4

 

EXHIBIT C JANITORIAL SERVICES

 

CRISTAL MAINTENANCE SERVICES

SPECIFICATIONS

 

 

OFFICE AREAS

 

Daily Services    Five
(5) days per week

 

 

•                  Collect all
trash and deposit in designated areas.

 

•                  Empty and clean
all ashtrays.

 

•                  Replace plastic
waste basket liners as necessary.

 

•                  Dust key areas
and highly visible areas - desks and credenzas.  Papers and folders left on desks not to be moved.

 

•                  Clean glass
entrance doors.

 

•                  Clean and polish
drinking fountains.

 

•                  Sweep all tile
floors with chemically treated dust mop control.

 

•                  Mop all tile
floors.

 

•                  Return chairs
and waste baskets to proper positions.

 

•                  Vacuum all
carpeted areas.

 

1

 

Weekly  Services:

 

 

•                  Dust all
horizontal surfaces-bookcases, file cabinets, water cooler, coffee tables,
chair arms and rungs, window ledges, etc.

 

•                  Vacuum corners
and edges

 

•                  Spot clean all
carpeted areas

 

•                  Remove smudges
& finger prints from light switches, doors, file cabinets, etc.

 

•                  Spot clean all
partition glass.

 

•                  Clean fabric
furniture with a wisk broom to remove any dust and paper bits.

 

•                  Clean elevator
thresholds (If applicable).

 

•                  Maintain
janitor’s closet/ area & clean all equipment.

 

•                  Clean front
office windows.

 

 

Monthly Services:

 

 

•                  Dust high and
low surfaces - lamp shades, ceiling vents, venetian blinds, wall hangings.

 

•                  Vacuum all
fabric - covered and/ or upholstered furniture.

 

•                  Wipe down kick
plates, thresholds and metal work on doors.

 

•                  Thoroughly clean
vents on restroom doors.

 

 

Quarterly Services:

 

•                  Vacuum wall and
ceiling vents.

 

•                  Wax tile floors
(If requested additional service)

 

2Exhibit
10.31

 

INDUSTRIAL LEASE AGREEMENT

(MULTI-TENANT BUILDING)

 

BETWEEN

 

INSITE ATLANTA, L.L.C.

 

AS LANDLORD

 

AND

 

SIMCO AUTOMOTIVE TRIM, INC.

 

AS TENANT

 

 

FOR THE PREMISES LOCATED AT

6077 Fulton Industrial Boulevard

Atlanta, Georgia

 

 

TABLE OF CONTENTS

 

	
  SCHEDULE

  
	
   

  
	
  1.

  	
  LEASE
  OF PREMISES

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Demise

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Term

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Possession

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Fit-up Work

  
	
   

  	
   

  	
   

  
	
  2.

  	
  RENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Base
  Rent

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Tenant Reimbursement Amount

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Payment of Rent

  
	
   

  	
   

  	
   

  
	
  3.

  	
  USE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Limitation on Use

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Quiet Enjoyment

  
	
   

  	
   

  	
   

  
	
  4.

  	
  ENVIRONMENTAL
  MATTERS

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Representations, Warranties and
  Covenants

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Landlord’s Representations,
  Warranties and Covenants

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Notice

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Tenant Indemnification

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Landlord Indemnification

  
	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Disclosure

  
	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Inspection

  
	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  Definitions

  
	
   

  	
   

  	
   

  
	
  5.

  	
  CONDITION
  OF PREMISES

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Condition of Premises

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Landlord’s Work

  
	
   

  	
   

  	
   

  
	
  6.

  	
  UTILITIES
  AND SERVICES

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Tenant’s Utilities and
  Services

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Interruptions in
  Utilities or Services

  
	
   

  	
   

  	
   

  
	
  7.

  	
  RULES
  AND REGULATIONS

  
	
   

  	
   

  
	
  8.

  	
  CERTAIN RIGHTS
  RESERVED TO LANDLORD

  
	
   

  	
   

  
	
  9.

  	
  MAINTENANCE
  AND REPAIRS

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Tenant’s Maintenance

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  HVAC Maintenance

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Landlord’s Maintenance

  
	
   

  	
   

  	
   

  
	
  10.

  	
  TENANT’S WORK

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Requirements

  

 

 

	
   

  	
  (b)

  	
  Ownership

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Liens

  
	
   

  	
   

  	
   

  
	
  11.

  	
  INSURANCE

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Landlord’s Insurance

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Tenant’s Insurance

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Waiver of Subrogation

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Avoid Action Increasing
  Rates

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Failure to Insure

  
	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Representation

  
	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Additional Requirements

  
	
   

  	
   

  	
   

  
	
  12.

  	
  WAIVER
  AND INDEMNITY

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Waiver

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Tenant Indemnity

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Landlord Indemnity

  
	
   

  	
   

  	
   

  
	
  13.

  	
  FIRE AND CASUALTY

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Damage

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Restoration

  
	
   

  	
   

  	
   

  
	
  14.

  	
  CONDEMNATION

  
	
   

  	
   

  
	
  15.

  	
  ASSIGNMENT AND SUBLETTING

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Transfer

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Permitted Transfer

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Tenant’s Request for
  Consent

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Excess Rent

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Recapture

  
	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Assignment of Sublease
  Revenues

  
	
   

  	
   

  	
   

  
	
  16.

  	
  SURRENDER

  
	
   

  	
   

  
	
  17.

  	
  DEFAULTS AND REMEDIES

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Default

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Remedies

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Other Remedies

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Waiver of Trial by Jury

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Attorney’s Fees

  
	
   

  	
   

  	
   

  
	
  18.

  	
  HOLDING OVER

  
	
   

  	
   

  
	
  19.

  	
  SECURITY
  DEPOSIT

  
	
   

  	
   

  
	
  20.

  	
  INTENTIONALLY DELETED

  
	
   

  	
   

  
	
  21.

  	
  ESTOPPEL CERTIFICATE

  
	
   

  	
   

  
	
  22.

  	
  SUBORDINATION

  
	
   

  	
   

  
	
  23.

  	
  FINANCIAL STATEMENTS

  

 

 

	
  24.

  	
  TENANT’S
  BROKER

  
	
   

  	
   

  
	
  25.

  	
  NOTICES

  
	
   

  	
   

  
	
  26.

  	
  MISCELLANEOUS

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Successors and Assigns

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Entire Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Time of Essence

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Execution and Delivery

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Severability

  
	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Governing Law

  
	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Intentionally Deleted

  
	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  Joint and Several
  Liability

  
	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Force Majeure

  
	
   

  	
   

  	
   

  
	
   

  	
  (j)

  	
  Parking

  
	
   

  	
   

  	
   

  
	
   

  	
  (k)

  	
  Captions

  
	
   

  	
   

  	
   

  
	
   

  	
  (l)

  	
  No
  Waiver

  
	
   

  	
   

  	
   

  
	
   

  	
  (m)

  	
  Recording

  
	
   

  	
   

  	
   

  
	
   

  	
  (n)

  	
  Relation of Parties

  
	
   

  	
   

  	
   

  
	
   

  	
  (o)

  	
  Intentionally Deleted

  
	
   

  	
   

  	
   

  
	
   

  	
  (p)

  	
  Counterparts

  
	
   

  	
   

  	
   

  
	
   

  	
  (q)

  	
  Power of Attorney

  
	
   

  	
   

  	
   

  
	
   

  	
  (r)

  	
  Guaranty

  
	
   

  	
   

  	
   

  
	
   

  	
  (s)

  	
  Limitation on
  Landlord’s Liability

  
	
   

  	
   

  	
   

  
	
   

  	
  (t)

  	
  Mortgagee Approval

  

 

 

DEFINITIONS INDEX

 

	
  Defined Term

  	
   

  	
  Section

  
	
  Affiliate

  	
   

  	
  15

  
	
  Annual Reconciliation

  	
   

  	
  2

  
	
  Audit Notice

  	
   

  	
  2

  
	
  Base Rent

  	
   

  	
  Schedule

  
	
  Building

  	
   

  	
  Schedule

  
	
  CERCLA

  	
   

  	
  4

  
	
  Costs of Reletting

  	
   

  	
  17

  
	
  Commencement Date

  	
   

  	
  Schedule

  
	
  Commercial Lender

  	
   

  	
  15

  
	
  Common Areas

  	
   

  	
  8

  
	
  Completion Estimate

  	
   

  	
  13

  
	
  Construction Plan

  	
   

  	
  5

  
	
  Cosmetic Work

  	
   

  	
  10

  
	
  Default

  	
   

  	
  17

  
	
  Default Rate

  	
   

  	
  2

  
	
  Delivery Date

  	
   

  	
  Schedule

  
	
  Environmental Costs

  	
   

  	
  4

  
	
  Environmental Conditions

  	
   

  	
  4

  
	
  Environmental Law or Laws

  	
   

  	
  4

  
	
  Estoppel Certificate

  	
   

  	
  21

  
	
  Expenses

  	
   

  	
  2

  
	
  Expiration Date

  	
   

  	
  Schedule

  
	
  Financial Statements

  	
   

  	
  23

  
	
  First Early Termination Date

  	
   

  	
  Schedule

  
	
  First Termination Option

  	
   

  	
  Exhibit G-1

  
	
  Fit-up Work

  	
   

  	
  1

  
	
  GAAP

  	
   

  	
  15

  
	
  Guarantor

  	
   

  	
  Schedule

  
	
  Guaranty

  	
   

  	
  26

  
	
  Hazardous Materials

  	
   

  	
  4

  
	
  Initial Estimated Tenant Reimbursement Amount

  	
   

  	
  Schedule

  
	
  Initial Term

  	
   

  	
  Schedule

  
	
  Landlord

  	
   

  	
  Schedule

  
	
  Landlord Party or Landlord Parties

  	
   

  	
  12

  
	
  Landlord’s ROFO Notice

  	
   

  	
  Exhibit F

  
	
  Landlord’s Work

  	
   

  	
  5

  
	
  Law or Laws

  	
   

  	
  3

  
	
  Lease

  	
   

  	
  Schedule

  
	
  Mortgagee

  	
   

  	
  22

  
	
  Objection Notice

  	
   

  	
  2

  
	
  Permitted Transfer

  	
   

  	
  15

  
	
  Permitted Transferee

  	
   

  	
  15

  
	
  Permitted Use

  	
   

  	
  Schedule

  
	
  Premises

  	
   

  	
  Schedule

  
	
  Prevailing Party

  	
   

  	
  17

  
	
  Prime Rate

  	
   

  	
  2

  
	
  Property

  	
   

  	
  Schedule

  
	
  Property Insurance

  	
   

  	
  11

  
	
  Purchaser

  	
   

  	
  15

  
	
  RCRA

  	
   

  	
  4

  
	
  Renewal Option

  	
   

  	
  Exhibit H

  
	
  Renewal Term

  	
   

  	
  Schedule

  
	
  Rent

  	
   

  	
  2

  
	
  Required Removables

  	
   

  	
  10

  
	
  ROFO

  	
   

  	
  Exhibit F

  
	
  ROFO Space

  	
   

  	
  Schedule

  
	
  Rules and Regulations

  	
   

  	
  7

  

 

 

	
  SNDA

  	
   

  	
  22

  
	
  Second Early Termination Date

  	
   

  	
  Schedule

  
	
  Second Termination Option

  	
   

  	
  Exhibit G-2

  
	
  Security Deposit

  	
   

  	
  Schedule

  
	
  Substantially Complete

  	
   

  	
  5

  
	
  Successor

  	
   

  	
  15

  
	
  Taking

  	
   

  	
  14

  
	
  Tangible Net Worth

  	
   

  	
  15

  
	
  Taxes

  	
   

  	
  2

  
	
  Tenant

  	
   

  	
  Schedule

  
	
  Tenant Party or Tenant Parties

  	
   

  	
  12

  
	
  Tenant Reimbursement Amount

  	
   

  	
  2

  
	
  Tenant’s Broker

  	
   

  	
  Schedule

  
	
  Tenant’s Property

  	
   

  	
  11

  
	
  Tenant’s Proportionate Share

  	
   

  	
  Schedule

  
	
  Tenant’s Work

  	
   

  	
  10

  
	
  Third Early Termination Date

  	
   

  	
  Schedule

  
	
  Third Termination Option

  	
   

  	
  Exhibit G-3

  
	
  Transfer

  	
   

  	
  15

  
	
  Utility or Utilities

  	
   

  	
  6

  

 

 

INDUSTRIAL
LEASE AGREEMENT

(MULTI-TENANT BUILDING)

 

This Industrial Lease Agreement (Multi-Tenant Building)
(this “Lease”)
is made and entered into as of March 25, 2003, by and between Landlord and Tenant.  The Lease
consists of the following Schedule, Terms and Conditions and Exhibit(s)
referenced herein.

 

SCHEDULE

 

For purposes of this Lease,
the following terms shall have the following meanings:

 

	
  “Landlord:”

  	
   

  	
  Name:  Insite Atlanta, L.L.C.
  

  
	
   

  	
   

  	
  Entity:  Limited Liability
  Company  

  
	
   

  	
   

  	
  State of Formation:  Illinois

  
	
   

  	
   

  	
  Address:

  	
  1603 West 16th Street, Oakbrook, Illinois 60523

  Attention:  Gerald J. Kostelny

  
	
   

  	
   

  	
   

  	
   

  
	
  “Tenant:”

  	
   

  	
  Name:  Simco Automotive Trim,
  Inc.

  
	
   

  	
   

  	
  Federal Employer Identification No.: FEIN 38-3270082

  
	
   

  	
   

  	
  Entity:  Corporation

  
	
   

  	
   

  	
  State of Formation:  Michigan

  
	
   

  	
   

  	
  Address:

  	
  172 E. Main Street

  Georgetown, MA  01833

  Attention:  Ronald J. Lataille

  
	
   

  	
   

  	
   

  
	
  “Guarantor:”

  	
   

  	
  UFP Technologies, Inc.

  
	
   

  	
   

  	
   Federal Employer Identification No.: 
  04-231-4970

  
	
   

  	
   

  	
  Entity:  Corporation

  
	
   

  	
   

  	
  State of Formation:  Delaware

  
	
   

  	
   

  	
  Address:

  	
  172 E. Main Street

  Georgetown, Massachusetts 01833

  Attention:  Ronald J. Lataille

  
	
   

  	
   

  	
   

  
	
  “Building:”

  	
   

  	
  That certain multi-tenant building consisting of 223,000 leaseable
  square feet of space situated on the parcel of land which is legally
  described on Exhibit A attached hereto and commonly known as 6077
  Fulton Industrial Boulevard, Atlanta, Georgia.

  
	
   

  	
   

  	
   

  
	
  “Premises:”

  	
   

  	
  Approximately 47,000 leaseable square feet as shown on the plan
  attached hereto as Exhibit B-1

  
	
   

  	
   

  	
   

  
	
  “Property:”

  	
   

  	
  The Building, together with the land upon which the Building is
  situated, all easements, licenses and rights-of-way appurtenant to said land
  and all personal property, fixtures and equipment of Landlord which are used
  in the operation of the Building and said land

  
	
   

  	
   

  	
   

  
	
  “Base Rent:”

  	
   

  	
  Year  of

  Term

  	
   

  	
  Annual

  Base Rent

  	
   

  	
  Monthly

  Base Rent

  	
   

  	
  Annual Base

  Rent Per LSF

  	
   

  
	
   

  	
   

  	
  1

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
  *

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
  2-5

  	
   

  	
  129,249.96

  	
   

  	
  10,770.83

  	
   

  	
  2.75

  	
   

  
	
   

  	
   

  	
  6-8

  	
   

  	
  141,000.00

  	
   

  	
  11,750.00

  	
   

  	
  3.00

  	
   

  
														

 

	
   

  	
   

  	
  *Notwithstanding that no Base Rent is due for said 1-year period,
  Tenant shall remain obligated to pay all Tenant Reimbursement Amount which is
  owing for said 1-year period.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Tenant’s Proportionate Share:”

  	
   

  	
  21.1% (which has been determined by dividing the number of leaseable
  square feet in the Premises by the number of leaseable square feet in the
  Building)

  	
   

  

 

1

 

	
  “Initial Monthly Estimated Tenant
  Reimbursement Amount:”

  	
   

  	
  $2,193.33

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Permitted Use:”

  	
   

  	
  General manufacturing, assembly, warehouse and
  distributions operations (with accessory office)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Security Deposit:”

  	
   

  	
  $10,770.83

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Tenant’s Broker:”

  	
   

  	
  Name:  Grubb
  & Ellis Company

  	
   

  
	
   

  	
   

  	
  Federal Employer Identification No.:  04-1424307

  	
   

  
	
   

  	
   

  	
  Address:

  	
  3333 Peachtree Street, Third Floor

  Atlanta, Georgia 30336

  
	
   

  	
   

  	
   

  	
   

  
	
  “Initial Term:”

  	
   

  	
  Ninety-six (96) months

  
	
   

  	
   

  	
   

  
	
  “Renewal Terms:”

  	
   

  	
  Two (2) periods of three (3) years each

  
	
   

  	
   

  	
   

  
	
  “Commencement Date:”

  	
   

  	
  April 16, 2003 (as same may be extended under
  Section 5(b))

  
	
   

  	
   

  	
   

  
	
  “Expiration Date:”

  	
   

  	
  April 15, 2011 (as same may be extended under
  Section 5(b))

  
	
   

  	
   

  	
   

  
	
  “Delivery Date:”

  	
   

  	
  The date upon which this Lease is fully executed

  
	
   

  	
   

  	
   

  
	
  “ROFO Space:”

  	
   

  	
  Approximately 15,937 leaseable square feet as shown
  on the plan attached hereto as Exhibit B-1

  
	
   

  	
   

  	
   

  
	
  “First Early Termination Date:”

  	
   

  	
  Any day selected by Tenant, but which day is the
  last day of any month occurring between the last day of the thirty-sixth (36th)
  full calendar month of the Term and the last day of the forty-seventh (47th)
  full calendar month of the Term (both inclusive)

  
	
   

  	
   

  	
   

  
	
  “Second Early Termination Date:”

  	
   

  	
  Any day selected by Tenant, but which day is the
  last day of any month occurring between the last day of the forty-eight (48th)
  full calendar month of the Term and the last day of the fifty ninth (59th)
  full calendar month of the Term (both inclusive)

  
	
   

  	
   

  	
   

  
	
  “Third Early Termination Date:”

  	
   

  	
  Any day selected by Tenant, but which day is the
  last day of any month occurring between the last day of the sixtieth (60th)
  full calendar month of the Term and the last day of the ninety sixth (96th)
  full calendar month of the Term (both inclusive)

  
					

 

EXHIBITS:

	
  A

  	
   

  	
  Legal Description of Property

  	
   

  
	
  B-1

  	
   

  	
  Plan of Premises and ROFO Space

  	
   

  
	
  B-2

  	
   

  	
  Plan of Tenant’s Reserved Parking Spaces

  	
   

  
	
  C

  	
   

  	
  Rules and Regulations

  	
   

  
	
  D

  	
   

  	
  Commencement Date Agreement

  	
   

  
	
  E

  	
   

  	
  Description of Landlord’s Work

  	
   

  
	
  E-1

  	
   

  	
  Construction Plan for Front Office Area

  	
   

  
	
  F

  	
   

  	
  Right of First Opportunity

  	
   

  
	
  G-1

  	
   

  	
  First Termination Option

  	
   

  
	
  G-2

  	
   

  	
  Second Termination Option

  	
   

  
	
  G-3

  	
   

  	
  Third Termination Option

  	
   

  
	
  H

  	
   

  	
  Renewal Option

  	
   

  
	
  I

  	
   

  	
  Xerox Environmental Access Agreement

  	
   

  
	
  J

  	
   

  	
  Guaranty

  	
   

  

 

2

 

IN
WITNESS WHEREOF, Landlord and
Tenant have executed this Lease in multiple original counterparts as of the
date written above.

 

	
   

  	
  TENANT:

  
	
  Witnesses
  (2 required)  /s/

  	
   

  
	
   

  	
   

  
	
  /s/Richard
  LeSavoy

  	
   

  	
  SIMCO AUTOMOTIVE TRIM, INC., a Michigan corporation

  
	
  Witness

  	
   

  
	
   Richard LeSavoy

  	
   

  	
   

  
	
  Print
  Name

  	
  By:

  	
   

  	
  /s/
  Ronald J. Lataille

  	
   

  
	
   

  	
  Its:

  	
   

  	
  Treasurer

  	
   

  
	
   

  	
  Date:

  	
   

  	
  4/03/03

  	
   

  
	
  /s/
  Wayne G. Williams

  	
   

  	
   

  
	
  Witness

  	
   

  
	
   Wayne G. Williams

  	
   

  	
   

  
	
  Print
  Name

  	
   

  
	
   

  	
   

  
	
   

  	
  LANDLORD:

  
	
  Witnesses
  (2 required)

  	
   

  
	
   

  	
   

  
	
  /s/
  Philip Reiff

  	
   

  	
  INSITE ATLANTA, L.L.C., an Illinois limited liability company

  
	
  Witness

  	
   

  
	
  Philip
  Reiff

  	
   

  	
   

  
	
  Print
  Name

  	
  By:

  	
   

  	
  Gerald
  J. Kostelny

  	
   

  
	
   

  	
  Its:

  	
   

  	
  Managing
  Member

  	
   

  
	
   

  	
  Date:

  	
   

  	
  4/11/03

  	
   

  
	
   

  	
   

  
	
  /s/  Ted Prasopoulos

  	
   

  	
   

  
	
  Witness

  	
   

  
	
  Ted
  Prasopoulos

  	
   

  	
   

  
	
  Print
  Name

  	
   

  
							

 

END OF SCHEDULE

 

3

 

TERMS
AND CONDITIONS

 

1.                                      LEASE
OF PREMISES.

 

(a)                                  Demise.  Landlord
leases to Tenant the Premises, including all mechanical (HVAC), electrical,
plumbing, life safety and other units, systems and equipment located in or
exclusively serving the Premises, together with the right in common with others
to use the Common Areas, but excepting and exclusively reserving unto Landlord
the use of roofs, equipment rooms or similar areas that are used by Landlord
for the provision of common Utilities, rights to the land and improvements
below the floor of the Premises, and air rights outside of the Premises,
subject to the covenants, terms, provisions and conditions of this Lease.  Landlord and Tenant agree that the leaseable
area of the Premises described in the Schedule is correct and shall not be
remeasured.

 

(b)                                 Term.  The Initial Term shall commence on the
Commencement Date and shall expire on the Expiration Date, unless terminated
earlier as otherwise provided in this Lease, and subject to renewal if and to
the extent described in the Schedule. 
The Initial Term, as permissibly extended, is hereinafter called the “Term”.

 

(c)                                  Possession.  Landlord agrees to deliver possession of the
Premises to Tenant on the Delivery Date. 
If Tenant takes occupancy of the Premises for the conduct of business
prior to the Commencement Date (which Tenant may not do until Landlord’s Work
is substantially completed), then all of the terms and provisions of this Lease
shall apply to such pre-Term occupancy by Tenant, and Tenant shall pay Base
Rent and Tenant Reimbursement Amount for such pre-Term occupancy period at the
initial rates of Base Rent and Tenant Reimbursement Amount payable under this
Lease, prorated for the number of days in such pre-Term occupancy period.  If Tenant takes occupancy of the Premises
solely for the purpose of performing any Fit-up Work which Tenant desires to
perform prior to the Commencement Date, then all of the terms and provisions of
this Lease shall apply to such pre-term occupancy of the Premises by Tenant,
except that Tenant shall not be obligated to pay Base Rent or Tenant
Reimbursement Amount for such pre-Term occupancy period, but Tenant shall pay
for all incremental expenses incurred as a result of Tenant’s pre-Term
occupancy (e.g. Utilities and Services).

 

(d)                                 Fit-up
Work.  Landlord grants to Tenant and contractors of
Tenant which have been approved by Landlord, a license to enter the Premises on
and after the Delivery Date solely to perform the work (“the Fit-up Work”) necessary to install Tenant’s
trade fixtures, equipment and property in order to make the Premises ready for
Tenant’s initial use and occupancy.  The
Fit-up Work may include installation of a condenser unit on the roof of the
Building, through-roof ducting for not more than two (2) vents and floor
reinforcement work, subject to applicable Laws and Landlord’s prior written
approval of the plans and specifications therefor (which approval shall not be
unreasonably withheld).  It shall be a condition
to the grant by Landlord and continued effectiveness of such license that:

 

(i)                                     Tenant
shall give to Landlord not less than five (5) days’ prior written notice of its
request to have such access to the Premises, which notice shall contain and/or
shall be accompanied by: (i) a description of and schedule for the Fit-up Work
to be performed by those persons and entities for whom and which such access is
being requested; (ii) the names and addresses of all contractors,
subcontractors and material suppliers for whom and which such early access is
being requested and the approximate number of individuals, itemized by trade,
who will be present in the Premises; (iii) copies of all contracts pertaining
to the performance of the Fit-up Work for which such early access is being
requested; (iv) copies of all plans and specifications pertaining to the Fit-up
Work for which such access is being requested; (v) copies of all licenses and
permits required in connection with the performance of the work for which such
access is being requested; (vi) certificates of insurance (in amounts and with
insured parties satisfactory to Landlord). 
All of the foregoing shall be subject to Landlord’s approval, which
shall not be unreasonably withheld.

 

(ii)                                  Such
early access shall be subject to scheduling and monitoring by Landlord and
Landlord’s agents and environmental consultants.

 

(iii)                               Tenant
and Tenant’s contractors shall work in harmony and not interfere with Landlord
and Landlord’s contractors in performing any tenant improvement work which
Landlord is performing in the Premises or in other premises within the Building
or in the Common Areas, or with the

 

4

 

general
operation of the Property.  If at any
time such entry shall cause or threaten to cause such disharmony, Landlord may
withdraw such license upon twenty-four (24) hours’ prior written notice to
Tenant.

 

(iv)                              Any
such entry into and occupation of the Premises by Tenant shall be deemed to be
under all of the terms, covenants, conditions and provisions of this Lease,
excluding only the covenant to pay Rent and specifically including the
provisions of Sections 10, 11 and 12 below. 
Landlord shall not be liable for any injury, loss or damage which may
occur to any of the Fit-up Work or to property of Tenant placed in the Premises
prior to the Commencement Date, the same being at Tenant’s sole risk and
liability.  Tenant shall be liable to
Landlord for any damage to the Premises or to any tenant improvement work in
the Premises performed by Landlord which is caused by Tenant or Tenant’s
contractors.

 

(v)                                 Tenant’s
floor reinforcement work shall be performed by OSHA 40 hour trained workers and
Tenant shall develop a health and safety plan for the excavation and monitoring
associated with such floor reinforcement work.

 

2.                                      RENT.  As used in this Lease, “Rent” shall mean Base Rent, Tenant
Reimbursement Amount and all other sums or charges due by Tenant under this
Lease.

 

(a)                                  Base
Rent.  Tenant shall pay Base Rent in monthly
installments in advance on or before the first day of each month of the Term,
except that Tenant shall pay to Landlord upon Tenant’s execution of this Lease,
the installment of Base Rent which is due for the thirteenth (13th)
full month of the Term in the amount of $10,770.83.

 

(b)                                 Tenant
Reimbursement Amount.  “Tenant
Reimbursement Amount” shall mean an amount equal to the sum of (y)
Tenant’s Proportionate Share of Expenses for each calendar year during the
Term, plus (z) Tenant’s Proportionate Share of Taxes for each calendar year
during the Term.  Prior to each calendar
year during the Term, Landlord shall furnish Tenant with an estimate of the
amount of Tenant Reimbursement Amount owing for such year, and Tenant shall pay
Landlord one-twelfth (1/12th) of such estimate on the first day of
each month during such year, except that Tenant shall pay to Landlord upon
Tenant’s execution of this Lease, the Initial Monthly Estimated Tenant
Reimbursement Amount which is owing for the first full month of the Term.  Such estimate may be revised by Landlord
whenever it obtains information relevant to making such estimate more
accurate.  After the end of each
calendar year during the Term, Landlord shall deliver to Tenant a statement
(the “Annual Reconciliation”)
setting forth the actual Expenses and Taxes for such year and the total amount
of estimated Tenant Reimbursement Amount that Tenant has paid and is payable
for such year.  Within thirty (30) days
after receipt of such Annual Reconciliation, Tenant shall pay to Landlord the
amount of Tenant Reimbursement Amount owing for such year, minus all estimated
Tenant Reimbursement Amount paid by Tenant for such year.  If the total estimated Tenant Reimbursement
Amount paid by Tenant for such year exceeds the amount of Tenant Reimbursement
Amount owing for such year, then Landlord shall apply such excess as a credit
against future Rent owing under this Lease or, if the Term has already ended,
Landlord shall promptly refund such excess to Tenant, provided that in each
such case, Tenant is not then in Default hereunder, and without interest to
Tenant.

 

(i)                                     “Expenses”
shall mean all expenses, costs and disbursements (other than Taxes) incurred by
Landlord in connection with the ownership, management, maintenance, operation,
replacement and repair of the Property, including, but not limited to:  (A) costs of utilities for the Property, (B)
costs for permits, licenses and certificates necessary to operate, manage and
lease the Property; (C) premiums paid by Landlord for policies of insurance
(and deductibles paid by Landlord for repairs covered by such policies); (D)
costs of supplies, tools, equipment and materials used in the operation, repair
and maintenance of the Property; (E) wages, salaries, benefits and other
compensation for all persons directly engaged in the operation, maintenance or
security of the Property, and employer’s Social Security taxes, unemployment
taxes or insurance, and any other taxes which may be levied on such wages,
salaries, benefits and compensation; (F) costs of operation, repair and
maintenance of all systems and equipment and components of the Property
(including replacement of components); (G) costs of capital improvements made
or installed for the purpose of reducing Expenses (or the rate of increase of
Expenses) or made or installed pursuant to any Law of general applicability to
the Property (as a general manufacturing, assembly, warehouse and distribution
facility), which costs shall be amortized by Landlord in accordance with sound
accounting and management principles and only the current annual amortization
of such costs, together with interest payable by Landlord on any loan obtained
to finance such capital improvement, shall be

 

5

 

included
in Expenses for any calendar year; and (H) management fees in each calendar
year equal to three (3%) percent of the product of the gross annual rate of
Rent per leaseable square foot of the Premises payable under this Lease for
such year (assuming solely for such purposes an annual rate of Base Rent of $2.75
per leaseable square foot payable during the first year of the Term),
multiplied by the number of leaseable square feet in the Property.  If Landlord incurs expenses for the Property
together with one or more other buildings or properties, whether pursuant to a
reciprocal easement agreement, common area agreement or otherwise, the shared
costs and expenses shall be equitably prorated and apportioned between the
Property and the other buildings or properties.

 

(ii)                                  Expenses
shall not include:  (A) costs of tenant
alterations; (B) costs of capital improvements (except as set forth in clause
(G) of the preceding paragraph); (C) interest and principal payments on loans
(except interest on any loan obtained to finance any capital improvement for
which amortization may be included in Expenses under clause (G) of the
preceding paragraph), (D) rental payments on any ground leases (except for
rental payments which constitute reimbursement for Taxes, Expenses, or any
component thereof); (E) advertising expenses and leasing commissions; (F) any
cost or expenditure for which Landlord is reimbursed, whether by insurance
proceeds or otherwise, except through tenant reimbursements; (G) the cost of
any kind of service furnished to any other tenant in the Building which Landlord
does not generally make available to all tenants in the Building; (H) legal
expenses of negotiating leases or handling disputes with tenants, other
occupants or prospective tenants or occupants; (I) salaries and fringe benefits
of employees above the grade of property manager; or (J) fees paid to any agent
or contractor which is an affiliate of Landlord for any Service or Utility
(other than management fees) to the extent such fees are in excess of customary
market amounts which would be paid for such Service or Utility in the absence
of such affiliation.

 

(iii)                               If
the Property is not fully occupied during any calendar year or if Landlord is
not supplying commonly supplied Utilities to all tenants of the Property at any
time during any calendar year, then Expenses shall, at Landlord’s option, be
determined as if the Property had been 100% occupied and Landlord had been
supplying commonly supplied Utilities to all tenants of the Property at all
times during such calendar year. 
Expenses shall be determined on an accrual basis.

 

(iv)                              Notwithstanding
anything contained herein to the contrary, in no event shall that part of
Expenses attributable to maintenance and repair of the HVAC units serving the
Premises exceed $0.06 per leasable square foot of the Premises during the first
year of the Term.

 

Within
sixty (60) days after receiving an Annual Reconciliation from Landlord, Tenant
may give Landlord a written notice (the “Audit
Notice”) that Tenant intends to
review Landlord’s records of Expenses for the calendar year pertaining to such
Annual Reconciliation.  Within a
reasonable time after its receipt of the Audit Notice, Landlord shall make all
pertinent records available for inspection that are reasonably necessary for
Tenant to conduct its review.  If any records
are maintained at a location other than the office of the Building, Tenant may
either inspect the records at such other location or pay for the reasonable
cost of copying and shipping the records. 
If Tenant retains an agent to review Landlord’s records, the agent must
be employed by a licensed Certified Public Accounting firm and such firm may
not be compensated by Tenant on a contingency fee basis.  Tenant shall be solely responsible for all
costs, expenses and fees incurred in connection with the review.  Within thirty (30) days after the records
are made available to Tenant, Tenant shall have the right to give Landlord
written notice (the “Objection Notice”)
stating in reasonable detail all objections to the applicable Annual
Reconciliation.  If Tenant fails to
provide Landlord with either an Objection Notice or Review Notice within the
time periods set forth herein, Tenant shall be deemed to have approved
Landlord’s Annual Reconciliation and shall be barred from raising any claims
regarding the Expenses for the applicable calendar year.  If Tenant timely provides Landlord with an
Objection Notice, Landlord and Tenant shall work together in good faith to
resolve the objections set forth in such Objection Notice.  If Landlord and Tenant determine that
Expenses for the applicable calendar year are less than reported, then (y)
Landlord shall provide Tenant with a credit against the next installment of
Rent in the amount of the overpayment by Tenant within thirty (30) days after
such determination is made, and (z) if Expenses are more than five percent (5%)
less than reported, Landlord shall reimburse Tenant for the reasonable,
documented, out-of-pocket costs and fees paid by Tenant for such review.  If Landlord and Tenant determine that
Expenses for the applicable calendar year are greater than reported, then
Tenant shall then pay Landlord the amount of any underpayment within thirty
(30) days after such determination is made. 
The records obtained by Tenant shall be treated as confidential.  In no event shall

 

6

 

Tenant
be permitted to examine Landlord’s records or to dispute any Annual
Reconciliation unless Tenant is not then in Default.

 

(v)                                 “Taxes” shall mean all taxes,
assessments and fees levied upon or against the Property, or the rents
collected therefrom, by any governmental entity based upon the ownership,
leasing, renting or operation of the Property, including all reasonable costs
and expenses of protesting any such taxes, assessments or fees.  Taxes shall not include any net income,
capital stock, succession, transfer, franchise, gift, estate or inheritance
taxes; provided, however, if at any time during the Term, a tax or excise on
income is levied or assessed by any governmental entity, in lieu of or as a
substitute for, in whole or in part, real estate taxes or other ad  valorem
taxes, such tax shall constitute and be included in Taxes.  For the purpose of determining Taxes for any
given calendar year, the amount to be included for such calendar year (A) from
special assessments payable in installments shall be the amount of the
installment (and any interest) due and payable during such calendar year, and
(B) from all other Taxes shall be the amount accrued, assessed or otherwise
imposed for such calendar year.

 

(c)                                  Payment
of Rent.  The following provisions shall govern the
payment of Rent:  (i) Tenant shall pay
Rent to Landlord at Landlord’s address described in the Schedule (Attention:  Property Management), or to such other party
or to such other address as Landlord may hereafter designate by written notice
to Tenant; (ii) if the Term commences or ends on a day other than the first day
or last day of a calendar month, then Rent for the month in which the Term so
begins or ends shall be prorated based upon the number of days in the
applicable month; (iii) all Rent shall be paid to Landlord without demand,
offset or deduction, and the covenant to pay Rent shall be independent of every
other covenant in this Lease; (iv) any Rent payment owing by Tenant to Landlord
which is not paid within five (5) days after Landlord gives Tenant a written
notice that such payment was not received by Landlord when due shall bear
interest from the date due until the date paid at a rate (the “Default Rate”)
equal to the greater of (A) one and one-half percent (11⁄2%) per month, or (B)
four percent (4%) plus the corporate base rate (the “Prime Rate”) of interest
announced from time to time by Bank of America at its Chicago, Illinois office,
but in no event higher than the maximum rate permitted by applicable Law.  In addition, Tenant shall pay Landlord a
late charge for any Rent payment which is paid more than five (5) days after
its due date equal to Three Hundred Fifty Dollars ($300.00); (v) if
modifications are made to the Property changing the number of leaseable square
feet contained in the Property, then Landlord shall make an appropriate
adjustment to Tenant’s Proportionate Share; (vi) Tenant’s agreement to pay any
underpayment of Tenant Reimbursement Amount for the calendar year in which the
Term ends, and Landlord’s obligation to refund any overpayments of Tenant
Reimbursement Amount for the calendar year in which the Term ends (provided
Tenant is not in Default) shall survive the end of the Term; (vii) each amount
owed to Landlord under this Lease for which the date of payment is not
expressly fixed shall be due on the same date as the Rent listed on the
statement showing such amount is due; (viii) if Landlord fails to give Tenant
an estimate of Tenant Reimbursement Amount prior to the beginning of any
calendar year during the Term, then Tenant shall continue to pay estimated
Tenant Reimbursement Amount at the rate for the previous calendar year until
Landlord delivers such estimate; and (ix) Landlord shall have the right to
apply payments received from Tenant pursuant to this Lease (regardless of
Tenant’s designation of any contrary application) to satisfy any obligations of
Tenant hereunder, in such order and amounts as Landlord in its sole discretion
may elect.

 

3.                                      USE.

 

(a)                                  Limitation
on Use.  The Premises shall be used and occupied
solely for the Permitted Use.  Tenant
shall not cause or permit the Premises to be used in any way which (i)
constitutes a violation of federal, state or local law, statute, ordinance, code,
rule order or decree (individually, a “Law”
and collectively, the “Laws”), or
(ii) disturbs or interferes with the rights of other tenants or occupants of
the Property, or (iii) constitutes a nuisance or waste, or (iv) constitutes a
Prohibited Use.  Tenant shall not use or
install any of Tenant’s Property in or to the Premises which would exceed the
legal live load per square foot designated by the structural engineers for the
Building (and Tenant shall ascertain from Landlord such legal live load prior
to installing Tenant’s Property). 
Landlord represents to Tenant that as of the date of this Lease the
Property is zoned “M1-A”.

 

(b)                                 Quiet
Enjoyment.  As long as no Default exists, Tenant shall
peacefully and quietly have and enjoy the Premises for the Term, free from
interference by Landlord, subject, however, to the provisions of this
Lease.  The loss or reduction of
Tenant’s light, air or view will not be deemed a disturbance of Tenant’s
occupancy of the Premises nor will it affect Tenant’s obligations under this
Lease or create any liability of Landlord to Tenant.

 

7

 

4.                                      ENVIRONMENTAL MATTERS.

 

(a)                                  Representations,
Warranties and Covenants.  Tenant represents, warrants and covenants to
and with Landlord that:

 

(i)                                     Tenant
has the full right, power, and authority to carry out its environmental
obligations hereunder.

 

(ii)                                  Tenant
is financially capable of performing and satisfying its environmental
obligations hereunder.

 

(iii)                               Tenant
is not now, and never has been, in violation of any applicable Environmental
Law, including, but not limited to, any Environmental Law relating to the
generation, handling, usage, transportation, treatment, storage, or disposal of
Hazardous Materials, nor is it subject to any threatened, existing, or pending
action by any governmental authority in connection therewith.

 

(iv)                              Tenant’s
generation, handling, usage, transportation, treatment, storage, or disposal of
Hazardous Materials at the Premises shall at all times comply with applicable
Environmental Laws, and will not cause or allow any Environmental Condition to
occur or exist.

 

(v)                                 Tenant,
at its expense, shall comply with each Environmental Law pertaining to Tenant’s
use of the Premises, and with all directions, regardless of when they become
effective, of all public officers issued pursuant to any Environmental Law,
which shall impose any duty upon the owner or operator with respect to the use
or occupancy of the Premises, except to the extent the same relate to any Environmental
Condition existing prior to the date of this Lease (unless and to the extent
that (y) Tenant has notice or knowledge of such pre-existing Environmental
Condition, and (z) any act or omission of Tenant exacerbates or worsens
any such pre-existing Environmental Condition).

 

(vi)                              Tenant
will not install, use or operate any underground storage tank without the
express written permission of Landlord, which permission may be withheld in
Landlord’s sole and arbitrary discretion.

 

(vii)                           Tenant
shall permit access to the Premises to the “Xerox Parties” as defined in that
certain Environmental Access Agreement (the “XEAA”) a copy of which is attached
hereto as Exhibit I at the times, for the purposes and subject to the
terms and conditions set forth in said Agreement.  Landlord shall indemnify and hold Tenant harmless from and
against all matters set forth in Paragraph 3(a) of the XEAA (excluding
consequential or incidental damages), if and to the same extent Landlord is
indemnified and held harmless under said Paragraph 3(a).

 

(b)                                 Landlord’s
Representations, Warranties and
Covenants.  Landlord represents, warrants and covenants
to and with Tenant that:

 

(i)                                     Landlord
has the full right, power, and authority to carry out its environmental
obligations hereunder.

 

(ii)                                  Landlord
is financially capable of performing and satisfying its environmental
obligations hereunder.

 

(iii)                               To
the best knowledge of the officer of Landlord executing this Lease and without
investigation, no Hazardous Materials in the Premises exist as of the date of
this Lease, except as set forth in (y) that certain Phase I Environmental Site
Assessment Report dated September 11, 2001 prepared by Bradburne, Briller &
Johnson, LLC, Atlanta, Georgia, and (z) that certain Letter Report of Asbestos
Survey and Chemical Use dated March 19, 2003 to UFP Technologies from
Bradburne, Briller & Johnson, LLC, Atlanta, Georgia, copies of which have
been furnished to Tenant (receipt of which is hereby acknowledged by Tenant).

 

8

 

(iv)                              Landlord’s
generation, handling, usage, transportation, treatment, storage, or disposal of
Hazardous Materials at the Property shall at all times comply with applicable
Environmental Laws, and will not cause any Environmental Condition to occur or
exist.

 

(v)                                 Landlord,
at its expense, shall comply with each Environmental Law pertaining to
Landlord’s use of the Property, and with all directions, regardless of when
they become effective, of all public officers issued pursuant to any Environmental
Law, which shall impose any duty upon the owner or operator with respect to the
use or occupancy of the Property, except to the same such duties are assumed by
Tenant under this Lease and by other tenants of the Property under their
respective leases.

 

(c)                                  Notice.  Tenant shall give immediate written notice
to Landlord of (i) any proceeding or inquiry by any governmental authority with
respect to the presence of any Hazardous Materials on the Premises or the
migration thereof from or to other areas, (ii) all claims and potential claims
made, inquired about, or threatened by any third party against Tenant or the
Premises relating to any loss or injury resulting from any Hazardous Materials,
and (iii) Tenant’s discovery of any occurrence or condition on any property
adjoining or in the vicinity of the Premises that could cause such property or
any part thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of the property under any Environmental Law.

 

(d)                                 Tenant Indemnification.  Tenant shall defend, with counsel reasonably
approved by Landlord, all actions against Landlord with respect to, and pay,
protect, indemnify, and hold harmless, to the extent permitted by Law, Landlord
from and against any and all Environmental Costs of any nature arising out of,
or claimed to be arising out of, any Environmental Conditions.  Notwithstanding anything in this Lease to
the contrary, Landlord agrees that Tenant shall not be responsible for Environmental
Conditions to the extent that such Environmental Conditions (i) exist as of the
Commencement Date (unless and to the extent (y) Tenant has notice or knowledge
of such pre-existing Environmental Condition, and (z) any act or omission of
Tenant exacerbates or worsens any such pre-existing Environmental Condition),
or (ii) result from the actions or omissions of Landlord or any other person or
entity other than a Tenant Party.  This
indemnification shall include without limitation Environmental Costs arising
out of any violations of Environmental Laws, regardless of any real or alleged
fault, negligence, willful misconduct, gross negligence, breach of warranty, or
strict liability on the part of Tenant. 
The foregoing indemnity shall survive the end of the Term.

 

(e)                                  Landlord
Indemnification.  Landlord shall defend with counsel
reasonably approved by Tenant, all actions against any Tenant Party with
respect to and pay, protect, indemnify and hold harmless, to the extent
permitted by Law, the Tenant Parties from and against any and all Environmental
Costs of any nature arising out of, or claimed to be arising out of, any
Environmental Conditions caused by Landlord’s use or operation of the Property
or by the acts or omissions of any Landlord Party.

 

(f)                                    Disclosure.  Prior to the Commencement Date, and prior to
January 1 of each year of the Term, including January 1 of the year immediately
following the year during which the Term ends, Tenant shall disclose to
Landlord in writing the names and amounts of all Hazardous Materials, or any
combination thereof, which were stored, used or disposed of on the Premises, or
which Tenant intends to store, use or dispose of on the Premises.  Further, Tenant shall provide Landlord a
copy of every document Tenant makes available to any governmental authority or
to any person under any Environmental Law.

 

(g)                                 Inspection.  Upon prior reasonable written or telephonic
notice (except in emergencies) Landlord shall have the right, but not the duty,
to inspect the Premises at any time to determine whether Tenant is complying
with the terms of this Section 4.  If
Tenant is not in compliance, then Landlord shall have the right to immediately
enter upon the Premises to remedy, at Tenant’s expense, any Environmental
Conditions caused by Tenant’s failure to comply, notwithstanding any other
provision of this Lease to the contrary. 
Such remediation measures shall be done in accordance with the
recommendations of Landlord’s geotechnical engineers and/or consultants, and/or
the requirements of any governmental authority having jurisdiction over such
matters.  Tenant shall pay to Landlord,
as additional rent, all Environmental Costs incurred by Landlord in performing
any such remediation measures within thirty (30) days after Landlord’s written
request therefore.  Landlord shall use
reasonable efforts to minimize interference with Tenant’s business operations,
but Landlord shall not be liable for any interference caused thereby.

 

(h)                                 Definitions.  For purposes of this Lease, the following
terms shall have the following meanings.

 

9

 

(i)                                     “Environmental Law or Laws”
shall mean any and all federal, state or local laws, regulations, ordinances,
rules, orders, directions, requirements or court decrees pertaining to health,
industrial hygiene, or the environmental conditions on, under or about the
Premises, including, without limitation, the Resource Conservation and Recovery
Act, as amended (42 U.S.C. §6901, et seq.),
and regulations promulgated thereunder (“RCRA”);
the Comprehensive Environmental Response, Compensation, and Liability Act, as
amended (42 U.S.C. §9601, et seq.),
and regulations promulgated thereunder (“CERCLA”),
the Hazardous Materials Transportation Act, as amended (49 U.S.C. §1801, et seq.), and regulations promulgated
thereunder; the Toxic Substances Control Act, as amended (15 U.S.C. §2601, et seq.), and regulations promulgated
thereunder; the Federal Insecticide, Fungicide and Rodenticide Act, as amended
(7 U.S.C. §136, et seq.), and
regulations promulgated thereunder; the Federal Water Pollution Control Act
(the Clean Water Act), as amended (33 U.S.C. §1251, et seq.), and regulations promulgated thereunder; the Safe
Drinking Water Act, as amended (42 U.S.C. §300f et seq.), and regulations promulgated thereunder; the Clean
Air Act, as amended (42 U.S.C. §7401 et seq.),  and regulations promulgated thereunder; and
all parallel, similar or relevant Laws.

 

(ii)                                  “Hazardous
Materials” shall mean any (A) hazardous waste as defined in RCRA,
(B) hazardous substance as defined in CERCLA; (C) petroleum or liquid petroleum
or wastes; and (D) any other toxic or hazardous substances that may be
regulated from time to time by applicable Environmental Laws.

 

(iii)                               “Environmental
Conditions” shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, or
disposing of Hazardous Materials on, from, or about the Premises other than in
compliance with applicable Environmental Laws. 
The term “Environmental Conditions” includes, but is not limited to, the
presence of Hazardous Materials on, from, or about the Premises attributable to
the operation of any underground or above-ground storage tanks, oil/water
separators, or in-ground hydraulic lifts or hoists, and associated equipment.

 

(iv)                              “Environmental
Costs” shall mean any and all judgments, damages, penalties, fines,
costs, liabilities, obligations, losses, or expenses of whatever kind and
nature (including, without limitation, diminution in value of the Property,
damages for the loss or restriction on use of leaseable space, damages arising
from any adverse impact on marketing of space, sums paid in settlement of
claims, attorney fees, consultant fees and expert fees), arising from or
incurred in connection with Environmental Conditions, including, but not
limited to, those relating to the presence, investigation, or remediation of
Hazardous Materials.

 

5.                                      CONDITION
OF PREMISES.

 

(a)                                  Condition
of Premises.  Except as set forth in Section 5(b) below,
no agreement of Landlord to alter, remodel, decorate, clean or improve the
Premises or the Property or to demolish and/or remove any improvements,
equipment or property located in the Premises (or to provide Tenant with any
credit or allowance for any of the foregoing), and no representation regarding
the condition of the Premises or the Property have been made by or on behalf of
Landlord or relied upon by Tenant, it being agreed that Tenant shall accept the
Premises in an “as-is” “where-is” condition and configuration on the date upon
which Landlord delivers possession thereof to Tenant (and in particular Tenant
acknowledges that it has verified the suitability of the existing HVAC units
serving the Premises and the ceiling heights within the Premises for Tenant’s
intended use thereof).  Tenant, at its
expense, shall (a) obtain any and all certificates of occupancy, special use
permits, business licenses and other permits and licenses which may be required
by applicable Law for Tenant’s use and occupancy of the Premises, and (b) make any
and all improvements, alterations and additions to the Premises which may be
required to obtain such certificates, permits and licenses.  The failure of Tenant to obtain any such
certificate, permit or license shall not be a condition precedent to Tenant’s
obligation to pay Rent or to perform any of its other obligations hereunder or
affect the validity of this Lease.

 

(b)                                 Landlord’s
Work.  Notwithstanding the foregoing to the
contrary, Landlord, at its expense, agrees to perform certain tenant improvement
work (“Landlord’s
Work”) in the Premises, as shown and/or described on the
Construction plan attached hereto as Exhibit E (the “Construction Plan”).  Landlord’s Work and the Construction Plan
have been approved by Landlord and Tenant, but Landlord’s approval of
Landlord’s Work and the Construction Plan shall not constitute a representation
by Landlord that Landlord’s Work or the Construction Plan comply with
applicable Laws or will be adequate for Tenant’s use of the Premises.  Landlord shall use commercially

 

10

 

reasonable efforts to cause Landlord’s Work to be Substantially
Complete on or before the Commencement Date. 
Landlord’s Work shall be deemed “Substantially Complete” on the earliest
date upon which all of Landlord’s Work has been performed, other than any
details of construction, mechanical adjustment or any other similar matter, the
noncompletion of would not materially interfere with Tenant’s use of the
Premises; provided, however, if Landlord is delayed in completing Landlord’s
Work because of a Tenant Delay, then Landlord’s Work shall be deemed to be
Substantially Complete on the earliest date (as determined by Landlord) that
Landlord’s Work would have been Substantially Complete but for such Tenant
Delay.  As used herein, “Tenant Delay”
shall mean and include (i) Tenant’s failure to furnish any information or
approvals which Landlord requests in connection with Landlord’s Work within
three (3) business days after Tenant’s receipt of such request, (ii) any
equipment or materials shown or described on the Plan which have long lead
times; (iii) any changes in Landlord’s Work or the Construction Plan which are
hereafter requested by Tenant and approved by Landlord, (iv) performance of any
Tenant’s Work in the Premises during the performance of Landlord’s Work, or (v)
any delay in the performance of any Tenant’s Work in the Premises which is
required to be completed prior to or simultaneously with the performance of
Landlord’s Work.  When Landlord’s Work
has been (or is about to be) Substantially Complete, Landlord shall give Tenant
written notice thereof.  Within three
(3) business days after Tenant’s receipt of such notice, but in any event prior
to Tenant’s move into the Premises, Landlord and Tenant shall conduct a
walk-through of the Premises and prepare a joint punch list identifying any
incomplete or incorrect items of Landlord’s Work.  Landlord will thereafter complete and/or correct such punch list
items with reasonable diligence.  If
Tenant requests any change to the Construction Plan or Landlord’s Work which
results in a net increase in the cost of Landlord’s Work, Tenant shall pay such
net increase in the cost of Landlord’s Work to Landlord within ten (10) days
after billing.  Within thirty (30) days
after the actual Commencement Date has been ascertained, Landlord and Tenant
will execute a Commencement Date Agreement in the form attached as Exhibit D,
which shall acknowledge said actual Commencement Date and the actual Expiration
Date.  If Landlord’s Work is not
Substantially Complete on the Commencement Date for any reason, this Lease
shall continue in full force and effect, Landlord shall have no liability to
Tenant by reason thereof, the Commencement Date shall be extended to the
earliest date upon which Landlord’s Work is Substantially Complete and the
Expiration Date shall be extended by an equal number of days plus the minimum
number of additional days (if any) which are required to cause the Expiration
Date to be the last day of a month.

 

6.                                      UTILITIES
AND SERVICES.

 

(a)                                  Tenant’s Utilities and
Services.  Tenant shall contract in its own name and
timely pay all charges for all (i) utilities including, but not limited to,
gas, electricity, water, fuel, and sewer (individually, a “Utility” and collectively the
“Utilities”);
and (ii) services including, but not limited to, telephone, security, alarm,
janitorial, trash and debris removal (and Tenant, at its expense, may maintain
a dumpster outside of the Building near the loading dock for the Premises for
production scrap, subject to applicable Laws and Landlord’s prior written
approval as to the actual size and location of such dumpster), ice and snow
removal, pest control and HVAC maintenance and repair (individually, a “Service”
and collectively the “Services”) used in, servicing or assessed
against the Premises, unless otherwise herein expressly provided.  If Landlord elects to itself provide any
Utility or Service to the Premises, then (i) Tenant shall pay to Landlord all
costs of furnishing such Utility or Service to the Premises, if such Utility or
Service is separately sub-metered to the Premises (or Landlord is otherwise
able to fairly allocate the cost of such Utility or Service to the Premises);
or (ii) all costs for furnishing such Utility or Service to the Premises shall
be included in Expenses, if such Utility or Service is provided to the Premises
together with any or all other tenant spaces located in the Building (or
Landlord otherwise elects to include the cost of such Utility or Service in
Expenses).

 

(b)                                 Interruptions
in Utilities or Services.  Tenant agrees that Landlord shall not be
liable for damages for any failure or interruption in furnishing any Utility or
Service nor shall any such failure or interruption be considered to be an
eviction or disturbance of Tenant’s use of the Premises, or relieve Tenant from
its obligation to pay any Rent when due or from any other obligations of Tenant
under this Lease.  Notwithstanding the
foregoing, if any such failure interruption is caused by the negligence or
willful misconduct of any Landlord Party, and such failure or interruption
continues for five (5) consecutive business days and as a result thereof Tenant
is unable to and does not use all or any significant portion of the Premises
for the normal conduct of business (except storage of Tenant’s property), then
for so long as the failure or interruption continues thereafter, Base Rent and
Tenant Reimbursement Amount shall be abated in the same proportion that the
leaseable area of the portion of the Premises which Tenant is unable to (and
does not) use as a result of the failure or interruption bears to the total
leaseable area of the Premises, provided that in the event the condition exists
solely in the Premises, the abatement shall not commence until the sixth (6th)
consecutive business day after Tenant notified Landlord of such condition.  The aforesaid abatement shall be Tenant’s
sole remedy and Landlord’s sole liability for any failure or interruption in
furnishing Utilities and Services to the Premises, and in no event shall
Landlord be liable for Tenant’s loss of business or profits.

 

11

 

7.                                      RULES
AND REGULATIONS.  Tenant shall observe and comply, and shall
cause the Tenant Parties to observe and comply, with the rules and regulations
listed on Exhibit C attached hereto and with such reasonable
modifications and additions thereto as Landlord may make from time to time and
which are uniformly applied to all tenants and occupants of the Property
(collectively, the “Rules and Regulations”).  Landlord shall not be liable for failure of
any person to obey the Rules and Regulations. 
Landlord shall not be obligated to enforce the Rules and Regulations
against any person, and the failure of Landlord to enforce the Rules and
Regulations shall not constitute a waiver thereof or relieve Tenant from
compliance therewith.

 

8.                                      CERTAIN
RIGHTS RESERVED TO LANDLORD.  Landlord reserves the following rights, each
of which Landlord may exercise without notice to Tenant and without liability
to Tenant, and the exercise of any such rights shall not be deemed to
constitute an eviction or disturbance of Tenant’s use or possession of the
Premises and shall not give rise to any claim for set-off, deduction, or
abatement of rent or any other claim: 
(a) upon prior reasonable written notice to Tenant, to change the name
or street address of the Building or the Premises; (b) to install, affix and
maintain any and all signs (including “For Lease” or “For Sale” signs) on the
exterior or interior of the Building; (c) to make repairs, decorations,
alterations, additions, or improvements, whether structural or otherwise, in
and about the Property, including, without limitation, expansion or contraction
of the leaseable area of the Building, alterations of the location or
configuration of all common corridors, public restrooms, common mechanical
(HVAC), electrical, plumbing and life safety units, systems and equipment,
driveways, entrances, fire lanes, sidewalks, parking areas, loading docks,
staging areas, lawns and landscaped areas (collectively, the “Common Areas”), and for such purposes upon
prior reasonable written or telephonic notice to Tenant (except in emergencies)
to enter upon the Premises, temporarily close doors, corridors and other areas
in the Building and interrupt or temporarily suspend Utilities or use of Common
Areas; provided, that Landlord shall use commercially reasonable efforts to
maintain reasonable accessibility to the Premises and shall minimize disruption
to Tenant’s business activities; (d) to retain at all times, and to use in
appropriate instances, keys to all doors within and into the Premises; (e) to
grant to any person or to reserve unto itself the exclusive right to conduct
any business or render any service in or to the Property, so as long as such
right does not preclude Tenant from using the Premises for the purpose stated
herein; (f) upon prior reasonable written or telephonic notice to Tenant
(except in emergencies) to show or inspect the Premises at reasonable times
and, if vacated or abandoned, to prepare the Premises for reoccupancy; (g) upon
prior reasonable written or telephonic notice to Tenant (except in emergencies)
to install, use and maintain in and through the Premises pipes, conduits, wires
and ducts serving the Building, provided that such installation, use and
maintenance does not unreasonably interfere with Tenant’s use of the Premises;
(h) to regulate delivery and usage of the loading docks, staging areas, drive
aisles and parking areas within the Common Areas; and (i) to take any other
action which Landlord deems reasonable in connection with the operation,
maintenance or preservation of the Property.

 

9.                                      MAINTENANCE
AND REPAIRS.

 

(a)                                  Tenant’s
Maintenance.  Tenant, at its expense, shall keep and
maintain the Premises in good order, condition and repair (including making any
necessary replacements) and in compliance with all applicable Laws.  All maintenance, repairs or replacements shall
be performed by Tenant in a good, workmanlike and lien-free manner, consistent
with the quality of labor and materials used in the initial build-out of the
Premises and in accordance with all applicable Laws.  If Tenant fails to make any repairs to the Premises which is
required of Tenant and such failure continues for more than fifteen (15) days
after written notice from Landlord (although notice shall not be required if
there is an emergency) or such longer period of time as may reasonably be
required to complete the same so long as Tenant commences such work within said
15-day period and thereafter diligently prosecutes such work to completion,
then Landlord may itself make the required repairs, and Tenant shall pay the
cost of such repairs to Landlord, together with an administrative charge in an
amount equal to fifteen percent (15%) of the cost of such repairs.  Tenant’s obligations hereunder shall
include, without limitation, all repairs to: 
(i) doors, (ii) loading docks, (iii) windows, (iv) interior walls, (v)
interior portions of exterior walls, (vi) ceilings, (vii) floors, (viii)
utility meters, and (ix) electrical, lighting, plumbing and fire protection
units, systems, equipment, pipes and conduits located inside of (or exclusively
serving) the Premises, or located outside of the Premises and which are
installed by or on behalf of Tenant. 
All glass, both interior and exterior, in or on the Premises shall be at
the sole risk of Tenant, and any glass broken shall be promptly replaced by
Tenant with glass of the same kind, size and quality.  Tenant shall permit no waste, damage or injury to the Premises,
and shall initiate and carry out a program of regular maintenance and repair of
the Premises, including without limitation, the painting and refinishing of all
areas so as to impede, to the extent possible, deterioration by ordinary wear
and tear, and to keep the same in substantially the same condition as existed
on the Commencement Date.  Tenant will
not overload the electrical wiring serving the Premises, and will install, at
its expense, but only after obtaining Landlord’s prior written approval (which
approval

 

12

 

shall not be unreasonably withheld or delayed), any additional
electrical wiring which may be required in connection with the conduct of
Tenant’s business.

 

(b)                                 HVAC
Maintenance.  Landlord shall keep and maintain in good
order and condition, and make all necessary inspections, cleaning, servicing,
repairs and replacements to, all HVAC units exclusively serving the Premises,
the cost of which shall be directly billed by Landlord to Tenant (if Landlord
is not providing such services to tenants of the Property generally), or shall
be included in Expenses (if Landlord is providing such services to tenants of
the Property generally).  

 

(c)                                  Landlord’s
Maintenance.  Landlord agrees to operate and maintain the
Property in a manner consistent with other properties in the Atlanta area which
are comparable in age, size and class to the Property.  Landlord shall keep and maintain in good order,
condition and repair and in compliance with applicable Laws, the roof, exterior
walls (except doors, windows and interior portions of exterior walls),
foundation, and structural portions of the Building, the Common Areas and all
mechanical (HVAC), electrical, plumbing and life safety units, systems and
equipment located inside of (or exclusively serving) the Common Areas, the cost
of which shall be included in Expenses. 
Landlord shall not be in default with respect to its obligations to make
any repairs to Building elements directly affecting the Premises (as opposed to
the Common Areas) unless and until Tenant has given written notice to Landlord
of the need to make such repairs, and Landlord has failed to commence to make
such repairs within a reasonable time after receipt of such notice, or fails to
proceed with reasonable diligence to complete such repairs.  Tenant shall reimburse Landlord for the cost
of any such repairs to the Building necessitated by the acts or omissions of
any Tenant Party, if and to the extent Landlord is not reimbursed by such costs
under its insurance policies.

 

10.                               TENANT’S WORK.

 

(a)                                  Requirements.  Tenant shall not make any addition,
alteration, improvement to the Premises (or remove same from the Premises)
without the prior written consent of Landlord (which consent shall not be
unreasonably withheld or delayed), including, without limitation, any tenant
improvement work which Tenant desires to make for Tenant’s initial occupancy of
the Premises, or any alteration to the Premises which Tenant desires to make
after Tenant’s initial occupancy of the Premises.  Any tenant improvement, alteration, replacement or removal work
which Tenant desires to perform in or for the Premises is hereinafter called “Tenant’s Work”.  In the event Tenant proposes to perform any Tenant’s Work, Tenant
shall, prior to commencing such Tenant’s Work, submit to Landlord for prior
written approval:  (i) initial detailed
plans and specifications (and Tenant shall thereafter submit to Landlord for
approval, any and all proposed changes to such plans and specifications or
Tenant’s Work); (ii) sworn statements, including the names, addresses and
copies of contracts for all contractors; (iii) a detailed cost estimate,
certified by the architect who prepared the plans and specifications; (iv) all
necessary permits evidencing compliance with all applicable governmental rules,
regulations and requirements; (v) certificates of insurance in form and amounts
reasonably required by Landlord, naming the Landlord Parties as additional
insureds; and (vi) all other documents and information as Landlord may
reasonably request in connection with such Tenant’s Work.  Notwithstanding the foregoing to the
contrary, Landlord’s consent and the foregoing submittals shall not be required
for any Tenant’s Work (“Cosmetic Work”)
that:  (i) is of a cosmetic nature such
as painting, wallpapering, and installing carpeting; (ii) will not affect the
electrical, mechanical (HVAC), plumbing, life safety or other systems or
structure of the Building; and (iii) does not require work to be performed
inside the walls or above the ceiling of the Premises; provided, however, that
the performance of Cosmetic Work shall remain subject to all of the other
provisions of this Section 10.  If
requested by Landlord (but only if the cost of Tenant’s Work will exceed
$25,000), Tenant shall deposit with Landlord prior to the commencement of any
Tenant’s Work, security for the payment and completion of such Tenant’s Work in
form and amount required by Landlord. 
Tenant shall pay to Landlord within thirty (30) days after billing, an
amount equal to the sums paid by Landlord for third party examination of
Tenant’s plans and specifications for any Tenant’s Work (excluding Cosmetic
Work).  Landlord’s approval of any
Tenant’s Work shall not constitute a representation by Landlord that such
Tenant’s Work complies with applicable Laws or will be adequate for Tenant’s
use.  All Tenant’s Work shall be
performed in a good and workmanlike manner, in accordance with the plans and
specifications approved by Landlord as aforesaid, and shall meet or exceed the
standards for construction and quality of materials established by Landlord for
the Building.  All Tenant’s Work shall
be performed in compliance with all applicable Laws and insurance requirements.

 

(b)                                 Ownership.  All Tenant’s Work shall be owned by Landlord
and shall remain upon the Premises upon the end of the Term without
compensation to Tenant; provided, however, Landlord, by written notice to
Tenant given within thirty (30) days prior to the end of the Term, may require
Tenant to remove, at Tenant’s

 

13

 

expense, any Tenant’s Work and/or Landlord’s Work (collectively
referred to as the “Required Removables”)
which either (i) in Landlord’s reasonable judgment, is of a nature that would
require removal and repair costs that are materially in excess of the removal
and repair costs associated with standard industrial/office improvements; or
(ii) is non-standard (e.g. internal stairways, raised floors, personal baths
and showers, vaults, rolling file systems, conveyor systems, cranes, racks, or
other structural alterations or modifications); provided, however that the
Required Removables shall not include Tenant’s floor reinforcement improvements
if (but only if) Tenant’s floor reinforcement improvements are flush with the
existing floor of the Premises.  The
Required Removables designated by Landlord shall be removed by Tenant before the
end of the Term in accordance with Section 16 below.  Notwithstanding the foregoing,
Tenant, at the time it requests Landlord’s approval for any proposed Tenant’s
Work, may request in writing that Landlord advise Tenant whether such Tenant’s
Work or any portion of such Tenant’s Work will be designated as a Required
Removable.  Within ten (10) days after
receipt of Tenant’s request, Landlord shall advise Tenant in writing as to
which portions of such Tenant’s Work, if any, will be considered to be Required
Removables.

 

(c)                                  Liens.  Upon completion of any Tenant’s Work, Tenant
shall promptly furnish Landlord with (i) sworn owner’s and contractors’
statements for such Tenant’s Work, (ii) full and final waivers of lien covering
all labor and materials included in such Tenant’s Work, and (iii) “as-built”
plans for such Tenant’s Work (excluding Cosmetic Work).  Tenant shall not permit any mechanic’s lien
to be filed against the Property, or any part thereof, arising out of any
Tenant’s Work performed, or alleged to have been performed, by or on behalf of
Tenant.  If any such lien is filed,
Tenant shall within ten (10) days thereafter either (y) cause such lien to be
released of record (either by payment in full or by appropriate statutory
bonding procedure, if applicable), or (z) provide Landlord with endorsements
(in form and content acceptable to Landlord) to the title insurance policies of
Landlord and each Mortgagee insuring against the existence or attempted
enforcement of such lien.  If Tenant
fails to have such lien so released or to provide such title insurance
endorsements to Landlord, then Landlord, without investigating the validity of
such lien, may pay or discharge the such lien, and Tenant shall reimburse
Landlord upon demand for the amount so paid by Landlord, including Landlord’s
expenses and attorneys’ fees.

 

11.                               INSURANCE.

 

(a)                                  Landlord’s
Insurance.  Landlord shall purchase and maintain in
effect throughout the Term, policies of insurance (the “Property Insurance”) covering the Property,
which insurance shall be for the benefit of and shall name (i) Landlord as
named insured and (ii) each Mortgagee, under a standard New York Mortgagee
Clause against the “special form” causes of loss and loss of rent coverage for
at least one (1) year and such other risks or hazards which are now or may hereafter
be customarily insured against with respect to properties similar in
construction, design, general location, use and occupancy to the Property.  The Property Insurance coverage shall equal
(y) one hundred percent (100%) of the replacement cost of the Property
(excluding tenant spaces), and (z) the value of all Tenant’s Work in the
Premises up to an amount equal to the Allowance, if an Allowance is provided
for in Section 5 above, and if no Allowance is provided for in Section 5 above,
then up to the value of the improvements located in the Premises as of the
Delivery Date.

 

(b)                                 Tenant’s
Insurance.  Tenant, at its expense, shall purchase and
maintain in effect throughout the Term, policies of insurance, for the benefit
of Tenant and the Landlord Parties with terms, coverages, limits (including
deductibles) and in companies satisfactory to Landlord (which companies shall
be licensed to do business in the state where the Property is located and have
an “A.M. Best’s” rating of “A-X” or higher; provided, however, that such rating
shall be satisfied if Tenant’s insurance company carries reinsurance by
endorsement from a company with an A+ or better rating), and with such
increases in limits and with coverages as Landlord may from time to time
reasonably request, but initially Tenant shall maintain the following coverages
in the following amounts:

 

(i)                                     Commercial
General Liability Insurance on a primary and non-contributory basis (with broad
form commercial general liability endorsement), insuring Tenant and naming the
Landlord Parties and any other parties designated by Landlord from time to time
as additional insureds, covering, without limitation, any liability for bodily
injury, personal injury, including death, and property damage arising out of
Tenant’s operations, acts, omissions, assumed liabilities or use of the
Premises, having a combined single limit of at least Two Million Dollars
($2,000,000).

 

(ii)                                  Property
Insurance including, but not
limited to, fire, sprinkler leakage, vandalism and all other risks of direct
physical loss as insured against under special broad form coverage endorsement
(y) in amounts which, together with the amounts of insurance coverage which
Landlord is required to maintain pursuant to Section 11(a) above, would cover
the full replacement cost of all additions,

 

14

 

improvements
and alterations to the Premises and providing that the Landlord Parties and any
other parties designated by Landlord from time to time are loss payees or additional
insureds as their interests may appear, and (z) covering all office furniture,
trade fixtures, office equipment, machinery, movable partitions, wall and floor
coverings, inventory, merchandise and all other items of Tenant’s property on
the Premises (collectively, “Tenant’s Property”).  Such insurance shall be written on an “all
risks” of physical loss or damage basis, for the full replacement cost value of
the covered items and in amounts that meet any coinsurance clause of the
policies of insurance.  In the event of
a loss, the proceeds of such insurance shall be used for the repair or
replacement of the property insured; except that if this Lease is terminated
following a casualty, the proceeds applicable to the Property shall be paid to
Landlord and the proceeds applicable to Tenant’s Property shall be paid to
Tenant.

 

(iii)                               “Worker’s
Compensation Insurance covering all employees, agents and contractors of Tenant
performing work in, on, or with respect to the Premises, in amounts not less
than those required by Law.

 

(iv)                              Employers
liability insurance covering all employees, agents and contractors of Tenant
performing work in, on or with respect to the Premises, in amounts not less
than One Million Dollars ($1,000,000) for each accident and One Million Dollars
($1,000,000) for diseases of each employee, agent and contractor.

 

(v)                                 Extra
expense and business interruption insurance with limits not less than twelve
(12) months of Base Rent and Tenant Reimbursement Amount, naming Landlord as
loss payee, as its interest may appear.

 

(vi)                              Automobile
Insurance covering all owned, non-owned and hired automobiles with limits of
liability of not less than One Million Dollars ($1,000,000) for bodily injury
to any one person, and One Million Dollars ($1,000,000) for property damage for
each accident.

 

(vii)                           Umbrella
or Excess Liability coverage in amounts not less than Three Million Dollars
($3,000,000).

 

Tenant
shall concurrently with Tenant’s execution of this Lease and from time to time
thereafter upon insurance renewals, furnish to Landlord certificates of
insurance evidencing such coverage and with renewal certificates no less than
thirty (30) days prior to the expiration of such policies, which certificates
of insurance shall state that such insurance coverage may not be amended,
changed or canceled without at least thirty (30) days’ prior written notice to
Landlord and Tenant.

 

(c)                                  Waiver
of Subrogation.  Landlord and Tenant each waives any and
every claim for recovery from the other for any and all loss or damage to the
Property or the Premises or to the contents thereof, whether such loss or
damage is due to the negligence of Landlord or Tenant or its respective agents
or employees, to the extent that the amount of such loss or damage is recovered
under its policies of insurance; provided, however, that the foregoing waiver
shall not be operative in any case where its effect is to invalidate any
insurance coverage of the waiving party or increase the cost of such insurance
coverage; provided, further, however, that in the case of an increase in the
cost of insurance coverage, the insured shall give to the other party notice of
the increase and the amount of the increase, and the other party may reinstate
such waiver by paying to the insured the amount of the increase in the cost of
insurance.

 

(d)                                 Avoid
Action Increasing Rates.  Tenant shall comply with all applicable
Laws, and requirements and recommendations of insurance rating agencies with
respect to the Premises, and shall not, directly or indirectly, make any use of
the Premises which may thereby be prohibited or be dangerous to person or
property, which may jeopardize any insurance coverage, increase the cost of
insurance, or require additional insurance coverage.  If Tenant fails to comply with the provisions of this Section
11(d), then, Landlord, in addition to any other rights or remedies available to
Landlord, shall have the option to terminate this Lease, and may require Tenant
to make immediate payment of any increase in Landlord’s insurance costs.

 

(e)                                  Failure
to Insure.  If Tenant fails to maintain any insurance
which Tenant is required to maintain pursuant to this Section 11, then Tenant
shall be liable to Landlord for any loss or costs resulting from such

 

15

 

failure to maintain such insurance. 
Tenant may not self-insure against any risks required herein to be
covered by insurance.

 

(f)                                    Representation.  Landlord makes no representation that the
limits of liability specified to be carried by Tenant under this Section 11 are
adequate to protect Tenant.  In the
event Tenant believes that any such insurance coverage called for under this
Lease is insufficient, Tenant shall provide, at its own expense, such additional
insurance as Tenant deems adequate.

 

(g)                                 Additional
Requirements.  Tenant shall require each of its contractors
and trades people, and their relevant subcontractors, to carry insurance in
amounts and standards specified in this Section 11 excluding coverage required
in Section 11(b)(v), and Section 11(b)(vi) as it pertains to contractors
personal property, or as Landlord may from time to time require, from insurance
companies licensed to do business in the State in which the Property is
located.

 

12.                               WAIVER
AND INDEMNITY.

 

(a)                                  Waiver.  Tenant releases Landlord, Landlord’s
members, each Mortgagee and their respective directors, officers, shareholders,
affiliates, agents and employees (Landlord and each of said persons and
entities being hereinafter individually called a “Landlord Party” and collectively called the “Landlord Parties”), from, and waives all
claims for, damage or injury to person or property and loss of business
sustained by Tenant and resulting from the Property or the Premises or any part
thereof or any equipment therein becoming in disrepair, or resulting from any
accident in or about the Property.  This
paragraph shall apply particularly, but not exclusively, to flooding, damage
caused by any equipment and apparatus, water, snow, frost, steam, roof leaks,
excessive heat or cold, broken glass, sewage, gas, odors, excessive noise or
vibration or the bursting or leaking of pipes, plumbing fixtures or sprinkler
devices.

 

(b)                                 Tenant
Indemnity.  Tenant agrees to indemnify, defend and hold
harmless the Landlord Parties from and against any and all claims, demands,
actions, liabilities, damages, costs and expenses (including attorneys’ fees),
for injuries to any persons and damage to or theft or misappropriation or loss
of property occurring in or about the Property and arising from the use and
occupancy of the Premises or from any activity, work, or thing done, permitted
or suffered by Tenant in or about the Premises, including, without limitation,
any Tenant’s Work performed by or on behalf of Tenant (except if and to the
extent same is caused by the negligence or willful misconduct of any Landlord
Party), or from any Default by Tenant under this Lease or due to any other act
or omission of Tenant, its subtenants, assignees, invitees, licensees,
employees, contractors and agents (Tenant and each of said persons and entities
being hereinafter individually called a “Tenant
Party” and collectively called the “Tenant
Parties”).  If any such
proceeding is filed against any Landlord Party, then Tenant shall defend such
Landlord Party in such proceeding at Tenant’s sole cost by legal counsel
reasonably satisfactory to such Landlord Party, if requested by such Landlord
Party.  The foregoing indemnity shall
survive the end of the Term.

 

(c)                                  Landlord
Indemnity.  Landlord agrees to indemnify, defend and
hold harmless the Tenant Parties from and against any and all claims, demands,
actions, liabilities, damages, costs and expenses (including attorneys’ fees),
for injuries to any persons and damage to or theft or misappropriation or loss
of property occurring in or about the Property and arising from the use and
occupancy of the Common Areas or from any activity, work, or thing done,
permitted or suffered by Landlord in or about the Common Areas (except if to
the extent same is caused by the negligence or willful misconduct of any Tenant
Party), or from any breach or default on the part of Landlord in the
performance of any covenant or agreement on the part of Landlord to be
performed under this Lease or due to any other act or omission of the Landlord
Parties.  If any such proceeding is
filed against any Tenant Party, then Landlord shall defend such Tenant Party in
such proceeding at Landlord’s sole cost by legal counsel reasonably
satisfactory to such Tenant Party, if requested by such Tenant Party.  The foregoing indemnity shall survive the
end of the Term.

 

13.                               FIRE
AND CASUALTY.

 

(a)                                  Damage.  If all or any part of the Premises is
damaged by fire or other casualty, Tenant shall immediately notify Landlord in
writing.  During any period of time that
all or a material portion of the Premises is rendered untenantable as a result
of a fire or other casualty, Base Rent and Tenant Reimbursement Amount shall
abate for the portion of the Premises that is untenantable and not used by
Tenant.  Landlord shall have the right
to terminate this Lease if:  (i) the
Building shall be damaged so that, in Landlord’s reasonable judgment,
substantial

 

16

 

alteration or reconstruction of the Building shall be required (whether
or not the Premises has been damaged); (ii) Landlord is not permitted by Law to
rebuild the Building in substantially the same form as existed before the fire
or casualty; (iii) the Premises have been materially damaged and there is less
than two (2) years of the Term remaining on the date of the casualty; (iv) any
Mortgagee requires that the insurance proceeds be applied to the payment of the
mortgage debt; or (v) a substantial uninsured loss to the Building occurs.  Landlord may exercise its right to terminate
this Lease by notifying Tenant in writing within ninety (90) days after the
date of casualty.  If Landlord does not
terminate this Lease, Landlord shall commence and proceed with reasonable
diligence to repair and restore the Building and the Premises.  However, in no event shall Landlord be
required to spend more than the insurance proceeds received by Landlord.  Landlord shall not be liable for any loss or
damage to Tenant’s Property or to the business of Tenant resulting in any way
from the fire or other casualty or from the repair and restoration of the
damage.

 

(b)                                 Restoration.  If all or any portion of the Premises shall
be made untenantable by fire or other casualty, Landlord shall, with reasonable
promptness, cause an architect or general contractor selected by Landlord to
provide Landlord and Tenant with a written estimate of the amount of time
required to substantially complete the repair and restoration of the Premises
and make the Premises tenantable again, using standard working methods (the “Completion
Estimate”).  If the
Completion Estimate indicates that the Premises cannot be made tenantable
within two hundred seventy (270) days from the date the repair and restoration
is started, then regardless of anything in Section 13(a) above to the contrary,
either party shall have the right to terminate this Lease by giving written
notice to the other of such election within ten (10) days after receipt of the
Completion Estimate.  Tenant, however,
shall not have the right to terminate this Lease if the fire or casualty was
caused by the negligence or willful misconduct of any Tenant Party.  If the damage was due to an act or omission
of a Tenant Party, then Tenant shall pay to Landlord the difference between the
actual cost of repair and any insurance proceeds received by Landlord;
provided, that Landlord has maintained in force the Property Insurance as
described in Section 11(a) above and diligently prosecutes the claims procedure
with respect to such fire or other casualty.

 

14.                               CONDEMNATION.  Either party may terminate this Lease if the
whole or any material part of the Premises shall be taken or condemned for any
public or quasi-public use under any applicable Law, by eminent domain or
private purchase in lieu thereof (each, a “Taking”).  Landlord shall also have the right to
terminate this Lease if there is a Taking of any portion of the Building or the
Property which would leave the remainder of the Building unsuitable for use as
an industrial building in a manner comparable to the use of the Building prior
to the Taking.  In order to exercise its
right to terminate this Lease, Landlord or Tenant, as the case may be, must
provide written notice of termination to the other within forty-five (45) days
after the terminating party first receives notice of the Taking.  Any such termination shall be effective as
of the date the physical taking of the Premises or the portion of the Building
or the Property occurs.  If this Lease
is not terminated, the leaseable area of the Premises and/or the Property and
Tenant’s Proportionate Share shall, if applicable, be appropriately
adjusted.  In addition, Rent for any
portion of the Premises taken or condemned shall be abated during the unexpired
Term effective as of the date when the physical taking of the portion of the
Premises occurs.  All compensation
awarded for a Taking, or sale proceeds, shall be the property of Landlord, any
right to receive compensation or proceeds being expressly waived by Tenant.  However, Tenant may file a separate claim at
its expense, for Tenant’s Property and Tenant’s reasonable relocation expenses,
provided the filing of the claim does not diminish the award which would
otherwise be received by Landlord.

 

15.                               ASSIGNMENT
AND SUBLETTING.

 

(a)                                  Transfer.  Except in connection with a Permitted
Transfer, Tenant shall not, without the prior written consent of Landlord:  (i) assign, re-assign, convey, mortgage or
otherwise transfer this Lease or any interest hereunder, or (ii) sublease the
Premises, or any part thereof, whether voluntarily or by operation of Law;
(iii) permit the use of the Premises by any person or entity other than Tenant
and its employees.  Any such transfer,
sublease or use described in the preceding sentence is hereinafter called a “Transfer”. 
Landlord’s consent to any Transfer shall not constitute a waiver of
Landlord’s right to withhold its consent to any future Transfer.  Landlord’s consent to any Transfer or
acceptance of rent from any party other than Tenant shall not release Tenant
from any covenant or obligation under this Lease.  Landlord may require as a condition to its consent to any
assignment of this Lease that the assignee sign a commercially reasonable form
of assumption agreement.  Except as
provided below with respect to a Permitted Transfer, if Tenant is a
corporation, limited liability company, partnership, or similar entity, and if
the person or entity which owns or controls a majority of the voting
shares/rights in Tenant at any time changes for any reason (including but not
limited to a merger, consolidation or reorganization), such change of ownership
or control shall constitute a Transfer. 
The foregoing shall not apply so long as Tenant is an entity whose

 

17

 

outstanding stock is listed on a recognized security
exchange, or if at least fifty-one percent (51%) of its voting stock is owned
by another entity, the voting stock of which is so listed.

 

(b)                                 Permitted
Transfer.  Notwithstanding Section 15(a) above to the
contrary, Tenant may assign or collaterally assign its interest in this Lease
or sublease all or any part of the Premises (each a “Permitted Transfer”) to a Permitted Transferee without
Landlord’s prior written consent; provided, that (i) Tenant gives Landlord a
written notice of any Permitted Transfer not later than thirty (30) days prior
to the effective date of such Permitted Transfer, together with current
financial statements of Tenant and of the Permitted Transferee; (ii) Tenant is
not in Default under this Lease; (iii) with respect to a Permitted Transfer
involving an assignment or a collateral assignment of this Lease, the Permitted
Transferee assumes this Lease by a written assumption agreement delivered to
Landlord prior to the effective date of such Permitted Transfer; (iv) the Permitted
Transferee shall use the Premises only for the Permitted Use; (v) the use of
the Premises by the Permitted Transferee shall not violate any other agreements
or leases affecting the Property; (vi) the occurrence of a Permitted Transfer
shall not waive Landlord’s rights as to any subsequent Transfer; and (vii)
Tenant shall not be released from any liability under this Lease (whether past,
present or future) by reason of such Permitted Transfer).  As used herein, (A) “Affiliate” means any person or entity who
or which controls, is controlled by, or is under common control with Tenant,
(B) “Commercial Lender” means any
bank or other commercial lending institution which provides business financing
to Tenant; (C) “Successor” means
any business entity in which or with which Tenant is merged or consolidated in
accordance with applicable statutory provisions governing merger and
consolidation of business entities, so long as (1) Tenant’s obligations under
this Lease are assumed by the Successor; and (2) the Tangible Net Worth of the
Successor is not less than the greater of the Tangible Net Worth of Tenant on
the date hereof or the Tangible Net Worth of Tenant immediately preceding the
effective date of such merger or consolidation, (D) “Purchaser” means any person or entity who or which acquires
all or substantially all of the assets of Tenant, so long as the Tangible Net
Worth of the Purchaser is not less than the greater of the Tangible Net Worth
of Tenant as of the date hereof or the Tangible Net Worth of Tenant immediately
preceding such acquisition; (E) “Permitted
Transferee” means an Affiliate, Commercial Lender, Successor or
Purchaser; and (F) “Tangible Net Worth”
means the excess of total assets over total liabilities, in each case as
determined in accordance with generally accepted accounting principles
consistently applied (“GAAP”),
excluding however, from the determination of total assets, all assets which
would be classified as intangible assets under GAAP, including, without
limitation, good will, licenses, patents, trademarks, trade names, copyrights
and franchises.

 

(c)                                  Tenant’s
Request for Consent.  If Tenant desires the consent of Landlord to
a Transfer, Tenant shall submit to Landlord at least thirty (30) days prior to
the effective date of the Transfer, a written notice which includes current
financial statements for the transferee, a complete copy of the Transfer
documents and such other information as Landlord may reasonably request.  If Landlord does not terminate this Lease,
in whole or in part, pursuant to Section 15(e) below, then Landlord shall not
unreasonably withhold its consent to any assignment or sublease.  Landlord shall not be deemed to have
unreasonably withheld its consent if, in the judgment of Landlord:  (i) the transferee is of a character, image
or reputation which is not in keeping with the standards or criteria used by
Landlord in leasing the Property; (ii) the financial condition of the proposed
transferee does not meet the criteria Landlord uses to select Property tenants
having similar leasehold obligations; (iii) the purpose for which the
transferee intends to use the Premises or portion thereof differs in any way
from the Permitted Use; (iv) the transferee (or any Affiliate of the
transferee) is then a tenant or occupant of the Property and there then exists
in the Property comparable available vacant space; (v) any portion of the
Property or the Premises would likely become subject to additional or different
Laws as a result of the Transfer or the intended use of the Premises by the
transferee would, in Landlord’s reasonable judgement, more likely cause a
violation of Section 4 above or any other tenant’s lease; or (vii) any other
bases which Landlord reasonably deems appropriate.  If Tenant is in Default at the time Tenant requests Landlord’s
consent to a proposed Transfer, then Landlord’s consent to such Transfer may be
conditioned upon Tenant curing such Default. 
If Tenant is ever in Default during the term of any sublease, then Landlord
may require that all sublease payments be made directly to Landlord during and
for the period of such Default, in which event Tenant shall receive a credit
against Rent in the amount of any payments received (less Landlord’s share of
any excess), and the subtenant shall agree in writing (either in the sublease
or in Landlord’s consent document) to make rental payments under the sublease
directly to Landlord upon the subtenant’s receipt of a written notice from
Landlord informing the subtenant of such Default and of Landlord’s election to
receive such sublease rental payments directly from the subtenant.  In addition, Tenant shall pay to Landlord
all reasonable attorneys’ fees (in no event less than Five Hundred Dollars
($500) per request) and expenses incurred by Landlord in connection with any
Transfer, whether or not Landlord consents to such Transfer.

 

18

 

(d)                                 Excess
Rent.  If Landlord consents to a Transfer (other
than a Permitted Transfer), then Tenant shall pay Landlord fifty percent (50%)
of all rent and other consideration which Tenant receives as a result of a
Transfer that is in excess of the Base Rent and Tenant Reimbursement Amount
payable to Landlord for the portion of the Premises and Term covered by the
Transfer.  Tenant shall pay Landlord for
Landlord’s share of any excess within thirty (30) days after Tenant’s receipt
of each such excess consideration. 
Tenant may deduct from the excess all reasonable and customary expenses
directly incurred by Tenant and attributable to the Transfer including
brokerage fees, legal fees and construction costs.

 

(e)                                  Recapture.  Landlord shall have the right to terminate
this Lease as to that portion of the Premises covered by a Transfer (other than
a Permitted Transfer).  Landlord may
exercise such right to terminate by giving notice to Tenant at any time within
thirty (30) days after the date on which Tenant has furnished to Landlord all
of the items required under Section 15(c) above.  If Landlord exercises such right to terminate, Landlord shall be entitled
to recover possession of, and Tenant shall surrender such portion of, the
Premises (with appropriate demising partitions erected at the expense of
Tenant) on the later of (i) the effective date of the proposed Transfer, or
(ii) sixty (60) days after the date of Landlord’s notice of termination.  In the event Landlord exercises such right
to terminate, Landlord shall have the right to enter into a lease with the
proposed transferee without incurring any liability to Tenant on account
thereof.

 

(f)                                    Assignment
of Sublease Revenues.  Tenant absolutely assigns to Landlord all of
Tenant’s right, title and interest in and to all revenues from each sublease of
all or any portion of the Premises; provided, however, that Landlord grants
Tenant a license, which shall remain in effect so long as no Default exists, to
collect all such revenues (subject to Tenant’s obligation to deliver certain of
such revenues to Landlord under Section 15(d) above).  Upon the occurrence of a Default, Landlord may revoke such license
by written notice to Tenant and may, by written notice to any subtenant of
Tenant, demand that such subtenant pay all such revenues directly to
Landlord.  In such event Tenant hereby
irrevocably authorizes and directs any such subtenant to pay such revenues to
Landlord, and further agrees (i) that any such subtenant shall be
obligated and entitled to pay such revenues to Landlord notwithstanding any
contrary contentions or instructions later received from Tenant and
(ii) that no such subtenant shall have any liability to Tenant for any
such revenues paid to Landlord in accordance with the foregoing.  Landlord shall not be entitled to use or
enjoy any such revenues except for the purpose of applying such revenues against
unfulfilled obligations of Tenant hereunder, or to reimburse Landlord for costs
incurred as a result of any Default, or to compensate Landlord for other losses
suffered by Landlord as a result of any Default.  Any such revenues remaining in Landlord’s possession following
the cure of all Defaults and the reimbursement of all such costs and losses
shall be delivered to Tenant.  No such
notice to any subtenant or receipt of revenues from any subtenant shall be
deemed to constitute either (y) Landlord’s consent to such sublease or
(z) the assumption by Landlord of any obligation of Tenant under such
sublease, nor shall any such notice or receipt create privity of contract
between Landlord and the applicable subtenant or be construed as a
nondisturbance or similar agreement between Landlord and such subtenant.

 

16.                               SURRENDER.  Upon the end of the Term or termination of
Tenant’s right to possession of the Premises, Tenant shall (a) return the
Premises to Landlord in good order and broom clean condition, free of debris,
ordinary wear and damage by fire or other casualty excepted, and (b) remove all
of the Required Removables and all of Tenant’s Property (including any
telecommunications cabling and wiring so designated), which removal shall be
done in a good, workmanlike and lien-free manner, and upon such removal Tenant
shall repair all damage to the Premises and the Property caused by the
installation or removal of such items and restore the Premises to its condition
prior to the installation of such items. 
If Tenant does not so remove any items comprising Tenant’s Property or
the Required Removables, then Landlord may remove such items and repair and
restore the Premises, and Tenant shall pay the cost of such removal, repair and
restoration to Landlord upon demand.  If
Tenant does not remove any items comprising Tenant’s Property or the Required
Removables, then Tenant shall be conclusively presumed to have conveyed such
items to Landlord without further payment or credit by Landlord to Tenant, or
at Landlord’s sole option, such items shall be deemed abandoned, in which event
Landlord may cause such items to be stored, removed or disposed of at Tenant’s
expense, without notice to Tenant and without obligation to compensate Tenant.

 

17.                               DEFAULTS
AND REMEDIES.

 

(a)                                  Default.  The occurrence of each of the following
shall constitute an event of default (a “Default”) by Tenant under this Lease:  (i) Tenant fails to pay any Rent when due
and such failure continues for five (5) days after written notice from
Landlord;  (ii) Tenant fails to timely
deliver any Estoppel Certificate to Landlord

 

19

 

under Section 21 below; (iii) Tenant fails to timely deliver any
Subordination Agreement to Landlord under Section 22 below; (iv) Tenant fails
to timely surrender and vacate the Premises in the manner described in Section
16 above; (v) Tenant makes any Transfer (other than a Permitted Transfer)
without obtaining Landlord’s prior written consent; (vi) Tenant fails to
maintain any insurance required to be maintained by Tenant under Section 11
above; (vii) the occurrence of a default by any guarantor under the Guaranty
(if any) attached hereto as Exhibit E; (viii) the death or dissolution
of Tenant or of any guarantor of this Lease, (ix) Tenant (or any Affiliate) is
in default beyond any applicable notice and cure period under any other lease
or agreement with Landlord (or any affiliate of Landlord); or (x) Tenant fails
to observe or perform any other covenant or obligation of Tenant under this
Lease (which is not referred to in clauses (i) through (ix) above) and such
failure is not cured within thirty (30) days (or immediately if such failure
involves a hazardous condition) after written notice from Landlord; provided,
however, that (A) if such failure cannot reasonably be cured within said 30-day
period, Tenant shall be allowed such additional time (not to exceed sixty (60)
days) as is reasonably necessary to cure such failure, so long as (1) Tenant
commences to cure the failure within ten (10) days, and (2) Tenant diligently
pursues a course of action that will cure the failure and bring Tenant back
into compliance with this Lease, and (3) Tenant provides Landlord with detailed
weekly written status reports of Tenant’s progress in curing such failure
throughout the period of such failure; and (B) if Landlord provides Tenant with
a notice of Tenant’s failure to observe or perform any particular term,
provision or covenant of this Lease on three (3) separate occasions during any
twelve (12) month period, then Tenant’s subsequent failure to observe or
perform such term, provision or covenant shall, at Landlord’s option, be an
uncurable event of default by Tenant, in which event Tenant shall have no
further notice and cure period under this clause (x) with respect to same.

 

(b)                                 Remedies.  Upon any Default, Landlord shall have the
right without further notice or demand to pursue any of its rights and remedies
at Law or in equity, including any one or more of the following remedies:

 

(i)                                     Terminate
this Lease, in which case Tenant shall immediately surrender the Premises to
Landlord.  If Tenant fails to surrender
the Premises, Landlord may, in compliance with applicable Law and without
prejudice to any other right or remedy, enter upon and take possession of the
Premises and expel and remove Tenant, Tenant’s Property and all parties
occupying all or any part of the Premises. 
Tenant shall pay Landlord on demand the amount of all past due Rent and
other losses and damages which Landlord may suffer as a result of the Default,
whether by Landlord’s inability to relet the Premises on satisfactory terms or
otherwise, including, without limitation, all Costs of Reletting and any
deficiency that may arise from reletting or the failure to relet the
Premises.  “Costs of Reletting” shall mean and include all costs and
expenses incurred by Landlord in reletting or attempting to relet the Premises,
including, without limitation, reasonable legal fees, brokerage commissions,
the cost of alterations and the value of other concessions or allowances granted
to a new tenant.

 

(ii)                                  Terminate
Tenant’s right to possession of the Premises and in compliance with applicable
Law, expel and remove Tenant, Tenant’s Property and all parties occupying all
or any part of the Premises.  Landlord
shall (if and to the extent required by applicable Law) mitigate its damages by
using commercially reasonable efforts to relet all or any part of the Premises,
without notice to Tenant, for a term that may be greater or less than the
balance of the Term and on such conditions (which may include concessions, free
rent and alterations of the Premises) and for such uses as Landlord may then be
commercially reasonable, but in no event shall Landlord be obligated to relet
or attempt to relet the Premises on a priority basis over other unleased or
unoccupied space in the Building. 
Landlord may collect and receive all rents and other income from the
reletting.  Tenant shall pay Landlord on
demand all past due Rent, all Costs of Reletting and any deficiency arising
from the reletting or failure to relet the Premises.  Landlord shall not be responsible or liable for the failure to
relet all or any part of the Premises or for the failure to collect any
Rent.  The re-entry or taking of
possession of the Premises shall not be construed as an election by Landlord to
terminate this Lease unless and until a written notice of termination is given
to Tenant.

 

(iii)                               In
lieu of calculating damages under Sections 17(b)(i) or 17(b)(ii) above,
Landlord may elect to receive as damages the sum of (A) all Rent accrued
through the date of termination of this Lease or Tenant’s right to possession,
and (B) an amount equal to the total Rent that Tenant would have been required
to pay for the remainder of the Term discounted to present value at the Prime
Rate then in effect, minus the then present fair rental value of the Premises
for the remainder of the Term, similarly discounted, after deducting all
anticipated Costs of Reletting.

 

20

 

(c)                                  Other
Remedies.  Landlord may but shall not be obligated to
perform any obligation of Tenant under this Lease, and if Landlord so elects,
all costs and expenses paid by Landlord in performing such obligation, together
with interest at the Default Rate, shall be reimbursed by Tenant to Landlord on
demand.  Any and all rights and remedies
set forth in this Lease:  (i) shall be
in addition to any and all other rights and remedies Landlord may have at Law
or in equity, (ii) shall be cumulative, and (iii) may be pursued successively
or concurrently as Landlord may elect. 
The exercise of any remedy by Landlord shall not be deemed an election
of remedies or preclude Landlord from exercising any other remedies in the
future.

 

(d)                                 Waiver
of Trial by Jury.  Landlord and Tenant waive trial by jury in
the event of any action, proceeding or counterclaim brought by either Landlord
or Tenant against the other in connection with this Lease.

 

(e)                                  Attorney’s
Fees.  If either Landlord or Tenant brings an
action or proceeding to enforce or defend its rights under this Lease the
Prevailing Party in any such action or proceeding, or appeal thereon, shall be
entitled to receive (and shall be awarded) all of its court costs and
reasonable attorneys’ fees.  Such costs
and fees may be awarded in the same suit or recovered in a separate suit,
whether or not such action or proceeding is pursued to decision or
judgment.  As used herein, “Prevailing Party” shall mean the party who
substantially attains or defeats the relief sought, as the case may be, whether
by compromise, settlement, judgment, or the abandonment by the other party of
its claim or defense.

 

18.                               HOLDING OVER.  If Tenant retains possession of the Premises
after the end of the Term or termination of Tenant’s right to possession of the
Premises (it being agreed that Tenant’s failure to timely remove all Tenant’s
Property and all the Required Removables from the Premises shall also be
considered a retention of the Premises by Tenant), then such retention of
possession shall be considered a tenancy “at will” or “sufferance” (and not a
month-to-month tenancy), and Tenant shall pay Rent for such holding over in an
amount equal to 150% of the monthly Rent in effect immediately preceding such
holding over computed on a monthly basis for each month or partial month that
Tenant remains in possession.  In
addition to the payment of the amounts provided above, if Landlord is unable to
timely deliver possession of the Premises to a new tenant as a result of
Tenant’s holdover then Tenant shall be liable to Landlord for all damages,
including, without limitation, consequential damages that Landlord suffers from
the holdover.  In addition, at any time
while Tenant remains in possession, Landlord may elect instead, by written
notice to Tenant and not otherwise, to have such retention of possession
constitute a renewal of this Lease for a month-to-month tenancy at the fair
market rent for the Premises as reasonably determined by Landlord, but in no
event less than the Rent payable immediately prior to such holding over.  The provisions of this Section do not waive
Landlord’s right of re-entry or right to regain possession by actions at Law or
in equity or any other rights hereunder, and any receipt of payment by Landlord
shall not be deemed a consent by Landlord to Tenant’s remaining in possession
or be construed as creating or renewing any lease or right of tenancy between
Landlord and Tenant.

 

19.                               SECURITY
DEPOSIT.  Upon execution of this Lease, Tenant shall
deposit the Security Deposit with Landlord as security for the performance of
Tenant’s obligations under this Lease. 
Upon the occurrence of a Default, Landlord may use all or any part of
the Security Deposit for the payment of any Rent or for the payment of any
amount which Landlord may pay or become obligated to pay by reason of such
Default, or to compensate Landlord for any loss or damage which Landlord may
suffer by reason of such Default.  If
any portion of the Security Deposit is used, Tenant shall within ten (10) days
after written demand therefor deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount.  Landlord shall not be required to keep the
Security Deposit separate from its general funds, and Tenant shall not be entitled
to interest on the Security Deposit.  In
no event shall the Security Deposit be considered an advanced payment of Rent,
and in no event shall Tenant be entitled to use the Security Deposit for the
payment of Rent.  If no Default by
Tenant exists hereunder, the Security Deposit or any balance thereof shall be
returned to Tenant within thirty (30) days after the end of the Term and
vacation of the Premises by Tenant. 
Landlord shall have the right to transfer the Security Deposit to any
purchaser of the Building; provided, that such purchaser assumes the
obligations of the landlord under this Lease (subject to Section 26(s) below),
and a copy of such assumption agreement is furnished to Tenant.  Upon such transfer, Tenant shall look solely
to such purchaser for return of the Security Deposit, and Landlord shall be
relieved of any liability with respect to the Security Deposit.

 

20.                               INTENTIONALLY DELETED.

 

21

 

21.                               ESTOPPEL
CERTIFICATE.  Tenant agrees from time to time upon written
request from Landlord, to execute and deliver to Landlord or to any third party
designated by Landlord in such request, a written estoppel certificate (an “Estoppel Certificate”) in the form
submitted by Landlord to Tenant, certifying: 
(a) that this Lease is unmodified and in full force and effect (or if
there have been modifications, a description of such modifications and that
this Lease as modified is in full force and effect); (b) the dates to which
Rent has been paid; (c) that Tenant is in possession of the Premises, if that
is the case; (d) that Landlord is not in default under this Lease, or, if
Tenant believes Landlord is in default, the nature thereof in detail; (e) that
Tenant has no off-sets or defenses to the performance of its obligations under
this Lease (or if Tenant believes there are any off-sets or defenses, a full
and complete explanation thereof); and (f) such additional matters as may be
requested by Landlord, it being agreed that each Estoppel Certificate may be
relied upon by any prospective purchaser, Mortgagee, prospective Mortgagee, or
other person having or acquiring an interest in the Building.  Tenant’s failure to execute and deliver any
Estoppel Certificate to Landlord (or to any such designated third party) within
ten (10) days after written request from Landlord shall automatically
constitute Tenant’s approval of the requested Estoppel Certificate as though
such Estoppel Certificate had been executed and delivered by Tenant to Landlord
or such designated third party in form identical to the form submitted by
Landlord to Tenant.  Landlord agrees
within ten (10) days after written request from Tenant to execute and deliver a
similar Estoppel Certificate to Tenant, but not more than one (1) time during
any year of the Term.

 

22.                               SUBORDINATION.  This Lease is and shall be expressly subject
and subordinate at all times to (a) any ground or underlying lease of the
Property, now or hereafter existing, and all amendments, renewals and
modifications to any such lease; and (b) the lien of any mortgage or trust deed
now or hereafter encumbering fee title to the Property and/or the leasehold
estate under any such lease.  If any
such mortgage or trust deed is foreclosed, or if any such lease is terminated,
upon request of the mortgagee, holder or lessor, as the case may be (each, a “Mortgagee”), Tenant will attorn to the
purchaser at the foreclosure sale or to the lessor under such lease, as the
case may be.  Notwithstanding anything
to the contrary contained herein, any Mortgagee may subordinate, in whole or in
part, its mortgage, trust deed or lease (as the case may be) to this Lease by
sending Tenant notice in writing subordinating such mortgage, trust deed or
lease to this Lease.  The foregoing
provisions are declared to be self-operative and no further instruments shall
be required to effect such subordination and/or attornment; provided, however,
that Tenant agrees upon request at any time by any such Mortgagee (or by any
purchaser at foreclosure), to execute and deliver a commercially reasonable
instrument (a “SNDA”) as may be
required by such entity to confirm such subordination and/or attornment.  Tenant’s failure to execute and deliver any
commercially reasonable SNDA within ten (10) days after written request from
Landlord shall automatically constitute Tenant’s acknowledgement and agreement
that this Lease is subordinate (or superior as the case may be) to the
mortgage, trust deed or lease, as the case may be, identified in the SNDA
submitted by Landlord to Tenant. 
Notwithstanding anything contained herein to the contrary, (a) Landlord
agrees to use commercially reasonable efforts to obtain a SNDA for Tenant from
Landlord’s current Mortgagee, but neither this Lease nor any obligations of
Tenant hereunder are conditioned upon Landlord obtaining said SNDA, and (b)
Tenant shall not be obligated to subordinate this Lease to any future Mortgage,
nor to agree to attorn to any purchaser in foreclosure or lessor unless the
applicable Mortgagee, purchaser or lessor agrees in the applicable SNDA that
Tenant’s possession of the Premises shall not be disturbed by reason of the
foreclosure of such Mortgage or the termination of such ground lease, so long
as Tenant is not in Default under this Lease, which SNDA shall be on the
standard form utilized by such Mortgagee, purchaser or lessor, with such
modifications thereto that may be requested by Tenant and which are
commercially reasonable and customary.

 

23.                               FINANCIAL
STATEMENTS.  Within fifteen (15) days after Landlord’s
request, Tenant will deliver to Landlord, the most recent audited financial
statements (including all notes to such statements) of Tenant, or, if no such
audited statements have been prepared, then unaudited financial statements
(including all notes to such statements) prepared in each case by an independent
certified public accountant in accordance with GAAP (the “Financial Statements”).  Landlord will not disclose any aspect of
Financial Statements that Tenant designates to Landlord as confidential except
(a) to any Mortgagee, prospective Mortgagee, or prospective purchaser of the
Building, and (b) if required by court order or subpoena.  Tenant represents and warrants to Landlord
that all financial information of Tenant delivered or to be delivered to
Landlord by or on behalf of Tenant is and shall be true and correct and that no
material misstatements or omissions exist therein.

 

24.                               TENANT’S
BROKER.  Tenant represents to Landlord that Tenant
has dealt only with Tenant’s Broker in connection with this Lease and that,
insofar as Tenant knows, no other broker negotiated this Lease on Tenant’s
behalf or is entitled to any commission by reason of its representation of
Tenant.  Tenant agrees to indemnify,
defend and hold the Landlord Parties harmless from and against any claims for a
fee or commission made

 

22

 

by any broker, other than Tenant’s Broker, claiming to have acted by or
on behalf of Tenant in connection with this Lease.  Landlord agrees to pay Tenant’s Broker a commission subject to
the terms and conditions of a separate agreement between Landlord and Tenant’s
Broker.

 

25.                               NOTICES.  All notices and demands to be given by one
party to the other party under this Lease shall (unless otherwise expressly
permitted under the terms of this Lease to be given telephonically) be given in
writing, mailed or delivered to Landlord or Tenant, as the case may be, at the
address for such party described in the Schedule above or at such other address
as either party may hereafter designate. 
Notices shall be delivered by hand or by United States certified or
registered mail, postage prepaid, return receipt requested, or by a nationally
recognized overnight air courier service or by a locally recognized courier
service.  Notices shall be considered to
have been given upon the earlier to occur of actual receipt or two (2) business
days after depositing in the United States mail.

 

26.                               MISCELLANEOUS

 

(a)                                  Successors
and Assigns.  Subject to Section 15 of this Lease, each
provision of this Lease shall extend to, bind and inure to the benefit of
Landlord and Tenant and their respective legal representatives, successors and
assigns; and all references herein to Landlord and Tenant shall be deemed to
include all such parties.

 

(b)                                 Entire
Agreement.  This Lease, and the riders and exhibits, if
any, attached hereto which are hereby made a part of this Lease, represent the
complete agreement between Landlord and Tenant; and Landlord has made no
representations or warranties except as expressly set forth in this Lease.  No modification or amendment of or waiver
under this Lease shall be binding upon Landlord or Tenant unless in writing
signed by Landlord and Tenant.

 

(c)                                  Time
of Essence.  Time is of the essence of this Lease and
each and all of its provisions, specifically including, without limitation, the
payment of Rent and the exercise of any option or right in favor of Tenant
under this Lease.

 

(d)                                 Execution
and Delivery.  Submission of this Lease for examination or
signature by Tenant does not constitute a reservation of space or an option for
lease, and it is not effective until execution and delivery by both Landlord
and Tenant.  Execution and delivery of
this Lease by Tenant to Landlord shall constitute an irrevocable offer by
Tenant to lease the Premises on the terms and conditions set forth herein,
which offer may not be revoked for ten (10) business days after such
delivery.  Tenant covenants, warrants
and represents that:  (i) each
individual executing, attesting and/or delivering this Lease on behalf of
Tenant is authorized to do so on behalf of Tenant; (ii) this Lease is binding
upon Tenant; and (iii) Tenant is duly organized and legally existing in the
state of its organization and is qualified to do business in the state in which
the Property is located.  Landlord
covenants, warrants and represents that: 
(i) each individual executing, attesting and/or delivering this Lease on
behalf of Landlord is authorized to do so on behalf of Landlord; (ii) this
Lease is binding upon Landlord; and (iii) Landlord is duly organized and
legally existing in the state of its organization and is qualified to do
business in the state in which the Property is located.

 

(e)                                  Severability.  The invalidity or unenforceability of any
provision of this Lease shall not affect or impair any other provisions.

 

(f)                                    Governing
Law.  This Lease shall be governed by and
construed in accordance with the laws of the State in which the Property is
located.

 

(g)                                 Intentionally
Deleted.

 

(h)                                 Joint
and Several Liability.  If Tenant is comprised of more than one party,
each such party shall be jointly and severally liable for Tenant’s obligations
under this Lease.  Notices, payments and
agreements given or made by, with or to any one person or entity shall be
deemed to have been given or made by, with and to all of them.

 

(i)                                     Force
Majeure.  Landlord shall not be in default hereunder
and Tenant shall not be excused from performing any of its obligations
hereunder if Landlord is prevented from performing any of its

 

23

 

obligations hereunder due to any accident, breakage, strike, delay in
obtaining any governmental permit or license, including any building permit,
shortage of materials, act of God or other causes beyond Landlord’s reasonable
control.

 

(j)                                     Parking.  Tenant shall have the right in common with
other tenants and occupants of the Property, during the Term and without
additional charge, to have the use of the common parking facilities at the
Property for its employees and invitees. 
Landlord reserves the right to designate and redesignate areas of the
common parking facilities where Tenant, its agents, employees and invitees may
park and/or may exclude Tenant, its agents, employees and invitees from parking
in other areas as designated and redesignated by Landlord; provided, however,
that Landlord shall not be liable to Tenant for the failure of any tenant, its
invitees, employees, agents and customers to abide by Landlord’s designations
or restrictions.  Notwithstanding the
foregoing, Landlord agrees (a) to maintain at the Property throughout the Term
and any extension thereof, a sufficient number of parking spaces to meet all
applicable zoning and related Laws with respect to the Property as then used,
and (b) that fifty (50) of said parking spaces shall be reserved parking spaces
for the exclusive use of Tenant and its invitees, at the location shown on Exhibit
B-2.

 

(k)                                  Captions.  The headings and titles in this Lease are
for convenience only and shall have no effect upon the construction or
interpretation of this Lease.

 

(l)                                     No
Waiver.  No receipt of money by Landlord from Tenant
after termination of this Lease or after the service of any notice or after the
commencing of any suit or after final judgment for possession of the Premises
shall renew, reinstate, continue or extend the Term or affect any such notice
or suit.  No waiver of any default of
Tenant shall be implied from any omission by Landlord to take any action on
account of such default if such default persists or be repeated, and no express
waiver shall affect any default other than the default specified in the express
waiver and then only for the time and to the extent therein stated.

 

(m)                               Recording.  Landlord and Tenant shall record a
memorandum of this Lease in the official records of Fulton County, Georgia,
within thirty (30) days after the full execution of this Lease.

 

(n)                                 Relation of Parties.  It is the intention of this Lease to create
the relation between the parties hereto of landlord and tenant and no other
relation whatsoever, and nothing contained in this Lease (including, without
limitation, the method of determining Rent) shall be construed to make the
parties hereto partners or joint venturers or to render either party hereto
liable for any of the debts or obligations of the other party.

 

(o)                                 Intentionally
Deleted.  

 

(p)                                 Counterparts.  This Lease may be executed in counterparts
and each copy of this Lease to which is attached counterpart signature pages
collectively containing the signatures of all of the parties hereto shall be
deemed for all purposes to be a fully executed original of this Lease.

 

(q)                                 Power
of Attorney.  If Tenant fails within ten (10) days after
written request from Landlord therefor to execute any Estoppel Certificate or
Subordination Agreement, then Tenant hereby makes, constitutes and irrevocably
appoints each Landlord Party as Tenant’s attorney-in-fact (such power of
attorney coupled with an interest) to execute and deliver such Estoppel
Certificate or Subordination Agreement, as the case may be, for and in the name,
place and stead of Tenant.

 

(r)                                    Guaranty.  Concurrently with its execution of this
Lease, Tenant shall cause the Guaranty attached hereto as Exhibit J to
be executed by Guarantor and delivered to Landlord.  

 

(s)                                  Limitation
on Landlord’s Liability.  It is expressly understood and agreed by
Tenant that none of Landlord’s covenants, undertakings or agreements are made
or intended as personal covenants, undertakings or agreements by Landlord or
the members in Landlord, and any liability of Landlord or the members in
Landlord for damages or breach or nonperformance by Landlord or otherwise
arising under or in connection with this Lease or the relationship of Landlord
and Tenant hereunder, shall be collectible only out of Landlord’s interest in
the Property, as the same may then be encumbered, and no personal liability is
assumed by, nor at any time may be asserted against any of the Landlord
Parties, all such liability, if any, being expressly waived and released by
Tenant.

 

24

 

Tenant further expressly understands and agrees that Landlord’s agent
executes this Lease, not in its own right but solely as Landlord’s agent and
that nothing in this Lease shall be construed as creating any liability
whatsoever against such Landlord’s agent, its members or their respective
shareholders, directors, officers or employees and in particular, without
limiting the generality of the foregoing, there shall be no liability to pay
any indebtedness or sum accruing hereunder, or to perform any covenant or
agreement whether express or implied herein contained, it being agreed that
Landlord shall have sole responsibility therefor.  Landlord shall have the right to sell or convey and/or master
lease the Building, and in connection therewith, to transfer and assign its
rights under this Lease, and upon any such transfer and assignment Landlord
shall be released from all obligations of the landlord under this Lease
accruing after the effective date of such transfer or assignment, and Tenant agrees
to look solely to the successor in interest of Landlord for the performance of
such obligations.

 

(t)                                    Mortgagee
Approval.  This Lease is expressly subject to and
conditioned upon its approval by the current Mortgagee.  Landlord will give Tenant a written notice
of the approval or disapproval of this Lease by the current Mortgagee upon
Landlord’s receipt of same.  If this
Lease is not approved by the current Mortgagee within thirty (30) days after
the full execution of this Lease, then either party may terminate this Lease by
giving a written notice of termination to the other party at any time after the
expiration of said 30-day period but prior to the date (if ever) that the
current Mortgagee approves this Lease. 
If this Lease is terminated under this Section 26(t), then neither
party shall have any further rights or obligations under this Lease and
Landlord shall return to Tenant all prepaid Rent and the Security Deposit.

 

END OF TERMS AND CONDITIONS

 

25

 

EXHIBIT
A

 

LEGAL DESCRIPTION OF PROPERTY

PARCEL ONE:

 

All that tract
or parcel of land lying and being in Land Lot 133 of the 14FF District of
Fulton County, Georgia, and being more particularly described as follows:

 

TO FIND THE
TRUE POINT OF BEGINNING, start at the point of intersection of the center line
of Fisk Drive with the center line of Greensboro Drive; running thence South 11
degrees, 45 minutes, 00 seconds West along the center line of Greensboro Drive,
a distance of 679.32 feet to a point; running thence South 78 degrees, 15
minutes, 00 seconds East, a distance of 25.45 feet to a point on the westerly
right-of-way line of Fulton Industrial Boulevard (a 200 foot right-of-way);
running thence South 11 degrees, 45 minutes, 00 seconds West along the westerly
right-of-way line of Fulton Industrial Boulevard, a distance of 983.63 feet to
a point, such point being the TRUE POINT OF BEGINNING; running thence South 11
degrees, 45 minutes, 00 seconds West along said right-of-way line, a distance of
1000.86 feet to a point; running thence North 78 degrees, 15 minutes, 00
seconds West, a distance of 60.00 feet to a point; running thence South 11
degrees, 45 minutes, 00 seconds West, a distance of 181.11 feet to a point;
running thence North 88 degrees, 15 minutes, 00 seconds West, a distance of
792.70 feet to a point in the center line of a proposed railroad easement;
running thence North 04 degrees, 33 minutes, 30 seconds West along the center
line of said proposed easement, a distance of 1496.96 feet to a point; running
thence South 19 degrees, 29 minutes, 30 seconds East, a distance of 207.68 feet
to a point; running thence South 81 degrees, 15 minutes, 00 seconds East, a
distance of 1154.87 feet to a point on the westerly right-of-way line of Fulton
Industrial Boulevard and the TRUE POINT OF BEGINNING; as per survey for “Xerox
Corp,” prepared by James Lucius Grant, Georgia Registered Land Surveyor No.
1604 of Urban Engineers, Inc., dated August 27, 1973, and containing 28.866
acres according to said survey.

 

PARCEL TWO:

 

Easement for
ingress and egress for the benefit of Parcel One as created in that certain
Warranty Deed from MGIC Equities Corporation to Xerox Corporation, dated
September 24, 1973, filed for record September 26, 1973 at 2:56 p.m., recorded
in Deed Book 5912, Page 68, Records of Fulton County, Georgia over the
following described tract of land:

 

All that tract
or parcel of land lying and being in Land Lot 133 of the 14FF District of
Fulton County, Georgia, and being more particularly described as follows:

 

TO FIND THE
TRUE POINT OF BEGINNING, start at the point of intersection of the center line
of Fisk Drive with the center line of Greensboro Drive, running thence South 11
degrees, 45 minutes, 00 seconds West along the center line of Greensboro Drive,
a distance of 679.32 feet to a point; running thence South 78 degrees, 15
minutes, 00 seconds East, a distance of 25.45 feet to a point on the westerly
right-of-way line of Fulton Industrial Boulevard (a 200 foot right-of-way);
running thence South 11 degrees, 45 minutes, 00 seconds West along the westerly
right-of-way line of Fulton Industrial Boulevard, a distance of 1984.49 feet to
a point, such point being the TRUE POINT OF BEGINNING; running thence North 78
degrees, 15 minutes, 00 seconds West, a distance of 60.00 feet to a point;
running thence South 11 degrees, 45 minutes, 00 seconds West, a distance of
181.11 feet to a point; running thence South 88 degrees, 15 minutes, 00 seconds
East, a distance of 60.93 feet to a point located on the westerly right-of-way
line of Fulton Industrial Boulevard; running thence North 11 degrees, 45
minutes, 00 seconds West along said right-of-way line to the TRUE POINT OF
BEGINNING; as per survey for “Xerox Corp.” prepared by James Lucius Grant,
Georgia Registered Land Surveyor No. 1604, of Urban Engineers, Inc., dated
August 27, 1973.

 

PARCEL THREE:

 

All that tract
or parcel of land lying and being in Land Lot 133 of the 14FF District of
Fulton County, Georgia, and containing 28.8694 acres, and being more
particularly described as follows:

 

TO FIND THE
TRUE POINT OF BEGINNING, start at the point of intersection of the center line
of Fisk Drive with the center line of Greensboro Drive; running thence South 11
degrees, 40 minutes, 46 seconds West along the center

 

A-1

 

line of
Greensboro Drive, a distance of 679.32 feet to a point; running thence South 78
degrees, 10 minutes, 46 seconds East, a distance of 25.45 feet to a point on
the westerly right-of-way line of Fulton Industrial Boulevard (a 200 foot
right-of-way); running thence South 11 degrees, 40 minutes, 46 seconds, West
along the westerly right-of-way line of Fulton Industrial Boulevard, a distance
of 983.63 feet to a point, such point being the TRUE POINT OF BEGINNING;
running thence South 11 degrees, 39 minutes, 59 seconds West along said
right-of-way line, a distance of 1000.98 feet to a point; running thence North
78 degrees, 19 minutes, 14 seconds West, a distance of 60.00 feet to a point;
running thence South 11 degrees, 40 minutes 46 seconds West, a distance of
181.11 feet to a point; running thence North 88 degrees, 19 minutes, 14 seconds
West, a distance of 792.70 feet to a point in the center line of a proposed
railroad easement; running thence North 04 degrees, 37 minutes, 59 seconds West
along the center line of said proposed easement, a distance of 1497.18 feet to
a point; running thence South 19 degrees, 33 minutes, 18 seconds East, a
distance of 207.68 feet to a point; running thence South 81 degrees, 19
minutes, 07 seconds East, a distance of 1154.87 feet to a point on the westerly
right-of-way line of Fulton Industrial Boulevard and the TRUE POINT OF
BEGINNING, per that certain land survey dated January 9, 2002, prepared by
Chester M. Smith, Jr., Georgia Registered Land Surveyor Registration No. 1445,
Metro Engineering and Surveying Co., Inc., Hampton, Georgia.

 

A-2

 

EXHIBIT
B-1

 

[PLAN SHOWING LOCATION OF THE
PREMISES AND ROFO SPACE]

 

B-1-1

 

EXHIBIT
B-2

 

[PLAN SHOWING LOCATION OF
RESERVED PARKING SPACES]

 

B-2-1

 

EXHIBIT
C

 

RULES AND REGULATIONS

 

1.                                       The
common sidewalks, entrances, passages, ramps, stairways, corridors, or halls
shall not be obstructed or used by Tenant or the employees, agents, invitees or
business of Tenant for any purpose other than ingress and egress to and from
the Premises and for delivery of merchandise and equipment in prompt and
efficient manner.

 

2.                                       No
exterior elements such as awnings, air-conditioning units, fans, aerials,
antennas or other projections shall be attached to the Building without the
prior written consent of Landlord (which consent shall not be unreasonably
withheld).

 

3.                                       No
sign, advertisement, notice or other lettering shall be exhibited, inscribed,
painted or affixed by any Tenant on any part of the outside of the Premises or
Building without the prior written consent of Landlord.  Notwithstanding the foregoing, Tenant, at
its expense, shall have the right to design, fabricate and install a sign
identifying Tenant and to be located on the fascia of the Premises, subject to
the prior written approval of Landlord as to the actual size, design and location
of the sign and Tenant obtaining all necessary governmental approvals, permits
and licenses.  The maximum size of
Tenant’s sign shall be Tenant’s Proportionate Share from time to time of the
total building signage allowed by applicable city code.  In the event of the violation of the
foregoing by Tenant, Landlord may remove same without any liability, and may
charge the expense incurred by such removal to the Tenant or Tenants violating
this rule.

 

4.                                       The
exterior windows and doors 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 Tenant.  No showcases or
other articles shall be put in front or affixed to any part of the exterior of
the Building, nor placed in the halls, corridors or vestibules, nor shall any
article obstruct any HVAC supply or exhaust without the prior written consent
of Landlord.

 

5.                                       The
electrical and mechanical closets, water and wash closets, drinking fountains
and other plumbing, communications, electrical and mechanical fixtures shall
not be used for any purposes other than those for which they were constructed,
and no sweepings, rubbish, rags, coffee grounds, acids or other substances
shall be deposited therein. Landlord shall have sole power to direct where and
how telephone and other wires are to be introduced.  No boring or cutting of exterior walls or interior demising walls
for wires is to be allowed without the consent of Landlord.  The location of Tenant’s communication
equipment affixed to the Premises shall be subject to the approval of Landlord
(which approval shall not be unreasonably withheld or delayed).  All damages resulting from any misuse of the
fixtures shall be borne by the Tenant who, or whose employees, agents, assignees,
sublessees, invitees or licensees, shall have caused the same.  No person shall waste water by interfering
or tampering with the faucets or otherwise.

 

6.                                       No
portion of the Premises or the Building shall be used or occupied at any time
for sleeping or lodging quarters.

 

7.                                       Tenant
and Tenant’s employees, agents, invitees or licensees, shall not at any time
bring or keep upon the Premises any inflammable, combustible, caustic,
poisonous or explosive fluid, chemical or substance, other than those used in
connection with the Permitted Use and in accordance with applicable Laws and in
accordance with Section 4 of the Lease.

 

8.                                       No bicycles,
vehicles or animals of any kind (other than a seeing eye dog for a blind
person) shall be brought into or kept by any Tenant in or about the Premises or
the Building.

 

9.                                       Tenant
shall not use or occupy or permit any portion of the Premises to be used or
occupied as an office for a public stenographer or typist, offset printing or
for the possession, storage, manufacture, sale of liquor, narcotics, dope,
tobacco in any form or as a barber or manicure shop, an employment bureau, a
labor office, a dance or music studio, any type of school, or for any use other
than those specifically granted in the lease. 
Tenant shall not engage or pay any employees on the Premises, except
those actually working for such Tenant on said Premises, and Tenant shall not
advertise for labor services for third parties giving an address at said
Premises.

 

C-1

 

10.                                 Landlord
shall have the right to prohibit any advertising by any Tenant which, in
Landlord’s reasonable judgement, tends to impair the reputation of the Building
or its desirability as a building for manufacturing, storage and distribution
uses, and upon written notice from Landlord, Tenant shall refrain from or
discontinue such advertising.  In no
event shall Tenant, without the prior written consent of Landlord, use the name
of the Building or use pictures or illustrations of the Building.

 

11.                                 All
persons in or entering Building shall be required to comply with the reasonable
security policies of the Building. 
Tenant shall keep doors to unattended areas locked and shall otherwise
exercise reasonable precautions to protect property from theft, loss or
damage.  Landlord shall not be
responsible for the theft, loss or damage of any property.

 

12.                                 No
additional locks or bolts of any kind shall be placed on any door in the
Building or the Premises and no lock on any door therein shall be changed or
altered in any respect without the consent of Landlord.  Landlord shall furnish two (2) keys for each
lock on exterior doors to the Premises and shall, on Tenant’s request and at
Tenant’s expense, provide additional duplicate keys.  All keys, including keys to storerooms and bathrooms, shall be
returned to Landlord upon expiration or termination of this Lease.  Landlord may at all times keep a pass key to
the Premises.  All entrance doors to the
Premises shall be left closed at all times, and left locked when the Premises
are not in use.

 

13.                                 Tenant
shall give immediate notice to Landlord in case of theft, unauthorized
solicitation, or accident in the Premises or in the Building or of defects
therein or in any fixtures or equipment, or of any known emergency in the
Building.

 

14.                                 Tenant
shall not use the Premises or permit the Premises to be used for photographic,
multilith or multigraph reproductions, except in connection with its own
business and not as a service for others, without Landlord’s prior permission.

 

15.                                 Tenant,
at its expense, shall cause the removal of all garbage, debris and refuse from
the Premises at reasonable intervals, and shall, prior to removal, store such
garbage, debris and refuse in appropriate refuse containers and otherwise abide
by all rules or regulations imposed by Landlord with respect thereto, or as
otherwise required by applicable Law. 
All garbage, debris and refuse shall be stored in areas expressly
designated by Landlord, and if no such area is designated, then within the
Premises.  Tenants shall not at any time
place, leave or discard any rubbish, paper, articles, or objects of any kinds
whatsoever outside the doors of the Premises or in the corridors or passageways
of the Building.

 

16.                                 Tenant
shall not make excessive noises, cause disturbances or vibrations or use or
operate any electrical or mechanical devices that emit excessive sound or other
waves or disturbances or create obnoxious odors, any of which may reasonably be
deemed to materially interfere with the use by other tenants and occupants of
the Building of their premises for uses substantially similar to the Permitted
Use.

 

17.                                 Tenant
shall not serve, nor permit the serving of alcoholic beverages in the Premises
unless Tenant shall have first secured Landlord’s consent and procured Host
Liquor Liability Insurance, issued by companies and in amounts reasonably
satisfactory to Landlord, naming Landlord as an additional party insured.

 

18.                                 Canvassing,
soliciting and peddling in the Building is prohibited and Tenant shall
cooperate to prevent the same.

 

19.                                 Except
as otherwise explicitly permitted in the Lease, Tenant shall not do any
cooking, conduct any restaurant, luncheonette or cafeteria for the sale or
service of food or beverages to its employees or to others.

 

20.                                 Tenant
shall at all times keep the Premises neat and orderly.

 

21.                                 Tenant
shall not allow its employees to loiter in the common areas of the Building.

 

22.                                 No
smoking shall be permitted in those areas of the Property which are designated
as “No-Smoking” areas by Landlord, from time to time, or as otherwise
prohibited by applicable Law.

 

C-2

 

23.                                 Tenant
shall not maintain armed security in or about the Premises nor possess any
weapons, explosives or other hazardous devices in or about the Building and/or
the Premises.

 

C-3

 

EXHIBIT
D

 

COMMENCEMENT DATE AGREEMENT

 

THIS
COMMENCEMENT DATE AGREEMENT,  made this
        day of
                    ,
20    , by and between INSITE ATLANTA, L.L.C.,  an Illinois limited liability company (“Landlord”) and SIMCO AUTOMOTIVE TRIM, INC., a Michigan corporation (“Tenant”).

 

W I T N E S S E T H:

 

WHEREAS, Landlord and
Tenant have entered into that certain Industrial Lease Agreement (the “Lease”) dated March 25, 2003, for the
lease of certain office/warehouse space in that certain industrial building
located at 6077 Fulton Industrial Boulevard, Atlanta, Georgia.

 

WHEREAS, Landlord and
Tenant wish to set forth their agreements as to the commencement of the term of
the Lease.

 

NOW,
THEREFORE, in consideration of the Leased Premises as described in the Lease and
the covenants set forth therein Landlord and Tenant agree as follows:

 

1.                                       The
Commencement Date of the Term of the Lease is
                 .

 

2.                                       The
commencement date for payment of Base Rent is
                       .

 

3.                                       The
commencement date for payment of Tenant Reimbursement Amount is
                       .

 

4.                                       The
Expiration Date of the Term of the Lease is                        .

 

IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above
written.

 

	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  SIMCO AUTOMOTIVE TRIM,
  INC., a Michigan

  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  INSITE ATLANTA, L.L.C., an Illinois
  limited liability

  company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

D-1

 

EXHIBIT
E

 

DESCRIPTION OF LANDLORD’S WORK

 

1.                                       Provide
100% air conditioned production and warehouse areas.  Landlord will perform any maintenance and repairs necessary to
bring the existing HVAC units serving the Premises into working order as of the
Commencement Date.

 

2.                                       Provide
metal halide lighting throughout production and warehouse areas.  Lighting levels to be confirmed by Tenant.

 

3.                                       Provide
the installation of one 12’x14’ drive-in door as a substitution for one of the
existing truck dock doors.

 

4.                                       Provide
utility separation for electric and gas. 
Water will be billed on a proportionate basis.

 

5.                                       Block
off all unused doors to the adjacent space.

 

6.                                       Construct
a demising wall consisting of 4’ of concrete block with the remainder to be
constructed of metal sandwich panel to the ceiling deck.

 

7.                                       Refurbish
office area with break room, restrooms and three 12’x12’ offices refurbished in
front office area to like new condition in accordance with the plan attached
hereto as Exhibit E-1.  Landlord will
pay the cost of such office area improvements up to a maximum of $40,000, and
Tenant shall pay any and all costs of such office area improvements in excess
of $40,000 (which payment shall be made within 10 days after billing).

 

8.                                       Remediate
in a manner determined by Landlord (but in accordance with applicable Law) the
existing asbestos containing material (ACM) in the Premises which is referenced
in the Letter Report described in Section 4(b)(iii)(z) of the Lease.

 

E-1

 

EXHIBIT
E-1

 

[CONSTRUCTION PLAN FOR FRONT
OFFICE AREA]

 

E-1-1

 

EXHIBIT
F

 

RIGHT OF FIRST OPPORTUNITY

 

Prior to the first lease that Landlord hereafter
intends to enter into with a third party for all or any portion of the ROFO
Space, and which would have a term to commence at any time prior to the last
twenty-four (24) months of the initial Term, Landlord shall give Tenant a
written notice of such intent (“Landlord’s ROFO Notice”) and if the
proposed commencement date of the lease term for the ROFO Space is a date
occurring after the first two (2) years of the initial Term of this Lease, then
Landlord’s ROFO Notice shall set forth the prevailing market terms and
conditions, including the annual Base Rent per leaseable square foot (including
all fixed or indexed increases to said rate and tenant incentives or inducements,
if any, such as tenant improvement allowances and free rent), as determined by
Landlord, which Landlord would then be willing to lease the ROFO Space to a
prospective tenant for a lease term which would expire concurrently with the
Expiration Date of the initial Term of this Lease.  Tenant shall then have a right of first opportunity (the “ROFO”)
to itself lease all (but not less than all) of the ROFO Space, subject to the
following terms and conditions:

 

(a)                                  No
Default.  This Lease is in full force and effect and
Tenant is not in Default at the time of its exercise of the ROFO, but Landlord
shall have the right at its sole discretion to waive the non-default condition
herein.

 

(b)                                 Terms.  The ROFO Space shall be leased subject to
all of the same terms, covenants and conditions as provided in this Lease
except that:

 

(i)                                     if
the lease term for the ROFO Space will commence during the first two (2) years
of the initial Term of this Lease, then the annual Base Rent per leaseable
square foot payable for the ROFO Space shall at all times during the lease term
for the ROFO Space be equal to the annual Base Rent per leaseable square foot
then payable for the original Premises, but if the lease term for the ROFO
Space will commence after the first two (2) years of the initial Term of this
Lease, then the annual Base Rent per leaseable square foot payable for the ROFO
Space shall be the amounts set forth in Landlord’s ROFO Notice;

 

(ii)                                  The
lease term for the ROFO Space shall commence on the date which is thirty (30)
days after the date upon which Tenant exercises the ROFO and shall expire on
the Expiration Date of the initial Term of this Lease (as same may be
extended); and

 

(iii)                               Tenant
shall accept the ROFO Space in an “as-is” condition, without any representation,
allowance or build-out from Landlord with respect to the condition or
improvement thereof, except (A) if the lease term for the ROFO Space will
commence during the first two (2) years of the initial Term of this Lease, then
Tenant, at its expense, shall pay for all costs necessary to separately demise
the ROFO Space, and (B) if the lease term for the ROFO Space will commence
after the first two (2) years of the initial Term of this Lease, then Tenant
shall be entitled to receive any tenant improvement allowances and/or build-out
set forth in Landlord’s ROFO Notice.

 

(c)                                  Exercise
of ROFO.  Tenant shall exercise the ROFO by giving
Landlord a written notice thereof within ten (10) days after the date Landlord
gives Landlord’s ROFO Notice to Tenant. 
Concurrently with such notice, Tenant shall submit to Landlord Tenant’s
most recent Financial Statements.  Based
on Landlord’s review of such Financial Statements, Landlord may give Tenant a
written notice requiring Tenant to increase the amount of the Security Deposit,
in which event Tenant shall deposit the additional Security Deposit with
Landlord within twenty (20) days after its receipt of Landlord’s notice.

 

(d)                                 Lease
Amendment.  The parties shall execute an amendment to
this Lease to reflect Tenant’s exercise of the ROFO upon the terms provided
herein, which amendment shall be executed within thirty (30) days after Tenant
exercises the ROFO.

 

(e)                                  Sublease.  The ROFO shall automatically terminate upon
any sublease of the Premises, or any part thereof, by Tenant (other than to a
Permitted Transferee).

 

F-1

 

EXHIBIT
G-1

 

FIRST TERMINATION OPTION

 

Tenant shall have the option (the “First Termination Option”) to terminate
this Lease with respect to all (but not less than all) of the Premises as of
the First Early Termination Date upon Tenant giving Landlord not less than six
(6) months’ prior written notice of its exercise of the First Termination
Option, provided (a) such written notice sets forth the actual First Early
Termination Date, (b) such written notice is accompanied by a certified or
cashier’s check in an amount equal to the sum of (i) $396,405, plus, if Tenant
then leases the ROFO Space, (ii) the additional sum of (A) $87,339.00, plus (B)
$51.68 for each day (if any) of the lease term for the ROFO Space which falls
within the first year of the initial Term of this Lease, as and for an early
termination fee, and (c) such exercise is subject to the conditions and
limitations set forth below.  Tenant’s
exercise of the First Termination Option is further subject to the condition
that no Default by Tenant exists at the time that Tenant exercises the First
Termination Option or upon the First Early Termination Date.  In the event Tenant exercises the First Termination
Option subject to and in accordance with the conditions and limitations herein
contained, Tenant shall deliver the Premises to Landlord on or before the First
Early Termination Date in accordance with the terms and conditions of this
Lease the same as if the First Early Termination Date were the original
Expiration Date of the Term of this Lease. 
Tenant shall continue to pay Base Rent, Tenant Reimbursement Amount and
any other amounts reserved hereunder, and keep, perform and observe all of the
terms, covenants and conditions on Tenant’s part to be kept, performed and
observed as provided herein for the period between the date Tenant delivers
written notice of its election to exercise the First Termination Option and the
First Early Termination Date.

 

G-1-1

 

EXHIBIT
G-2

 

SECOND TERMINATION OPTION

 

Tenant shall have the option (the “Second Termination Option”) to terminate
this Lease with respect to all (but not less than all) of the Premises as of
the Second Early Termination Date upon Tenant giving Landlord not less than six
(6) months’ prior written notice of its exercise of the Second Termination
Option, provided (a) such written notice sets forth the actual Second Early
Termination Date, (b) such written notice is accompanied by a certified or
cashier’s check in an amount equal to the sum of (i) $255,396, plus, if Tenant
then leases the ROFO Space, (ii) the additional sum of (A) $45,550.00, plus (B)
$51.68 for each day (if any) of the lease term for the ROFO Space which falls
within the first year of the initial Term of this Lease, as and for an early
termination fee, and (c) such exercise is subject to the conditions and
limitations set forth below.  Tenant’s
exercise of the Second Termination Option is further subject to the condition
that no Default by Tenant exists at the time that Tenant exercises the Second
Termination Option or upon the Second Early Termination Date.  In the event Tenant exercises the Second
Termination Option subject to and in accordance with the conditions and
limitations herein contained, Tenant shall deliver the Premises to Landlord on
or before the Second Early Termination Date in accordance with the terms and
conditions of this Lease the same as if the Second Early Termination Date were
the original Expiration Date of the Term of this Lease.  Tenant shall continue to pay Base Rent,
Tenant Reimbursement Amount and any other amounts reserved hereunder, and keep,
perform and observe all of the terms, covenants and conditions on Tenant’s part
to be kept, performed and observed as provided herein for the period between
the date Tenant delivers written notice of its election to exercise the Second
Termination Option and the Second Early Termination Date.

 

G-2-1

 

EXHIBIT
G-3

 

THIRD TERMINATION OPTION

 

Tenant shall have the option (the “Third Termination Option”) to terminate
this Lease with respect to all (but not less than all) of the Premises as of
the Third Early Termination Date upon Tenant giving Landlord not less than
twelve (12) months’ prior written notice of its exercise of the Third
Termination Option, provided (a) such written notice sets forth the actual
Third Early Termination Date, (b) such written notice is accompanied by a
certified or cashier’s check in an amount equal to the sum of (i) $101,699,
plus, if Tenant then leases the ROFO Space, (ii) the additional sum of $51.68
for each day (if any) of the lease term for the ROFO Space which falls within
the first year of the initial Term of this Lease, as and for an early
termination fee, and (c) such exercise is subject to the conditions and
limitations set forth below.  Tenant’s
exercise of the Termination Option is further subject to the condition that no
Default by Tenant exists at the time that Tenant exercises the Third
Termination Option or upon the Third Early Termination Date.  In the event Tenant exercises the Third
Termination Option subject to and in accordance with the conditions and
limitations herein contained, Tenant shall deliver the Premises to Landlord on
or before the Third Early Termination Date in accordance with the terms and
conditions of this Lease the same as if the Third Early Termination Date were
the original Expiration Date of the Term of this Lease.  Tenant shall continue to pay Base Rent,
Tenant Reimbursement Amount and any other amounts reserved hereunder, and keep,
perform and observe all of the terms, covenants and conditions on Tenant’s part
to be kept, performed and observed as provided herein for the period between
the date Tenant delivers written notice of its election to exercise the Third
Termination Option and the Third Early Termination Date.

 

G-3-1

 

EXHIBIT
H

 

RENEWAL OPTIONS

 

Tenant
shall have two (2) options (each, a “Renewal
Option”) to renew the initial Term for all (but not less than all)
of the Premises (as same may have been expanded pursuant to Exhibit F of the
Lease) which are demised under this Lease as of the Expiration Date of the then
current Term, for the applicable Renewal Term, subject to the following terms
and conditions:

 

(a)                                  This
Lease is in full force and effect and Tenant is neither in Default at the time
Tenant exercises a Renewal Option nor at the commencement of the applicable
Renewal Term, but Landlord shall have the right at its sole discretion to waive
the non-default condition herein;

 

(b)                                 The
applicable Renewal Term shall be upon all of the same terms, covenants and
conditions as provided in this Lease, except that (i) Tenant may not again
exercise either Renewal Option during either Renewal Term so as to further
extend the Term beyond the Expiration Date of the second Renewal Term, and (ii)
the net annual Base Rent per leaseable square foot payable for the applicable
Renewal Term shall be:

FIRST RENEWAL TERM

 

	
  Year
  of First Renewal Term

  	
   

  	
  Annual Base

  Rent Per LSF

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  $

  	
  3.00

  	
   

  
	
  2

  	
   

  	
  3.00

  	
   

  
	
  3

  	
   

  	
  3.00

  	
   

  
					

 

SECOND RENEWAL TERM

 

	
  Year of Second Renewal Term

  	
   

  	
  Annual
  Base

  Rent Per LSF

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  $

  	
  3.25

  	
   

  
	
  2

  	
   

  	
  3.25

  	
   

  
	
  3

  	
   

  	
  3.25

  	
   

  
					

 

(c)                                  Tenant
shall exercise a Renewal Option by giving Landlord a written notice thereof on
or before the date that is nine (9) months prior to the commencement of the
applicable Renewal Term;

 

(d)                                 The
parties shall execute an amendment to this Lease to reflect Tenant’s exercise
of a Renewal Option upon the terms provided herein, which amendment shall be
executed within thirty (30) days after Tenant exercises such Renewal Option;
and

 

(e)                                  Each
Renewal Option shall be void in the event that on either the date upon which
Tenant exercises such Renewal Option or upon the commencement date of the
applicable Renewal Term there shall exist any sublease of the Premises, or any
part thereof, by Tenant (other than to a Permitted Transferee).

 

H-1

 

EXHIBIT
I

 

[XEROX
ENVIRONMENTAL ACCESS AGREEMENT]

 

I-1

 

EXHIBIT
J

 

GUARANTY

 

This is a Guaranty
of an Industrial Lease Agreement dated March 25, 2003, (the “Lease”), by and between InSite Atlanta,
L.L.C., an Illinois limited liability company (“Landlord”) and Simco Automotive Trim, Inc., a Michigan
corporation (“Tenant”), concerning
those certain office/warehouse premises in that certain industrial building located
at 6077 Fulton Industrial Boulevard, Atlanta, Georgia.

 

FOR VALUE RECEIVED,
and in consideration for, and as an inducement to Landlord to enter into the
Lease, the undersigned (“Guarantor”),
who or which has a substantial economic interest in Tenant, hereby guarantees
to Landlord, its successors and assigns, the payment of all rentals specified
thereunder and all other payments to be made by Tenant under the Lease, and the
full performance and observance by Tenant of all the terms, covenants, conditions
and agreements therein provided to be performed and observed by Tenant, for
which Guarantor shall be jointly and severally liable with Tenant, without
requiring any notice of nonpayment, nonperformance or nonobservance, or proof
of notice or demand, whereby to charge Guarantor, all of which Guarantor does
hereby expressly waive, and Guarantor expressly agrees that Landlord, its
successors and assigns, may proceed against Guarantor separately or jointly,
before, after or simultaneously with the proceedings against Tenant for
default, and that this Guaranty shall not be terminated, affected or impaired
in any way or manner whatsoever by reason of the assertion of Landlord against
Tenant of any of the rights or remedies reserved to Landlord pursuant to the provisions
of the Lease, or by reason of summary or other proceedings against Tenant, or
by the omission of Landlord to enforce any of its rights against Tenant or by
reason of any extensions of time or indulgence granted by Landlord to Tenant.  Without limiting the generality of the
foregoing, it is understood that Landlord is not required to exhaust or pursue
any remedies it may have against Tenant under the Lease before, after or
simultaneously with any proceedings against Guarantor and Guarantor hereby waives
any right it may have to require Landlord to so exhaust or pursue such
remedies.  Guarantor further covenants
and agrees:  (i) that Guarantor will be
bound by all the provisions, terms, conditions, restrictions, and limitations
contained in the Lease, the same as though Guarantor were named therein as
Tenant; and (ii) that this Guaranty shall be absolute and unconditional and
shall remain and continue in full force and effect as to any renewal,
extension, amendment, addition, assignment, sublease, transfer, or other
modification of the Lease, whether or not Guarantor shall have any knowledge or
have been notified of or agreed or consented to any such renewal, extension,
amendment, addition, assignment sublease, transfer or other modification of the
Lease, and Guarantor agrees to be bound by any and all such modifications to
the Lease.  If Landlord at any time is
compelled to take any action or proceeding in court or otherwise to enforce or
compel compliance with the terms of this Guaranty, then (y) Guarantor shall, in
addition to any other rights and remedies to which the Landlord may be entitled
hereunder or as a matter of law or in equity, be obligated to pay all costs,
including attorney fees and costs, incurred or expended by Landlord in
connection therewith, and (z) Landlord and Guarantor waive trial by jury in
connection with such action or proceeding. 
Further, Guarantor hereby covenants and agrees to assume the Lease and
to perform all of the terms and conditions thereunder for the balance of the
then current term should the Lease be disaffirmed by any Trustee in Bankruptcy
for Tenant, or at the option of Landlord, Guarantor shall, in the event of
Tenant’s bankruptcy, make and enter into a new lease, which shall be in form
and substance identical to the Lease. 
All obligations and liabilities to Guarantor pursuant to this Guaranty
shall be binding upon the heirs, legal representatives, successors and assigns
of Guarantor, and Guarantor, its heirs, legal representatives, successors and
assigns shall remain fully liable under the Lease and this Guaranty regardless
of any merger, corporate reorganization or restructuring involving Tenant,
regardless of the resulting organization, structure or ownership of
Tenant.  If this Guaranty is signed by
more than one person or entity as Guarantor, then the persons and/or entities
are jointly and severally referred to herein as Guarantor, and each person or
entity shall be jointly and severally liable for all obligations of Guarantor.  This Guaranty shall be governed by and
construed in accordance with the laws of the State of Illinois.

 

In the event any
payment by Tenant to Landlord is held to constitute a preference under the
bankruptcy laws, or if for any other reason Landlord is required to refund such
payment or pay the amount thereof to any other party, such payment by Tenant to
Landlord shall not constitute a release of Guarantor from any liability
hereunder, but Guarantor agrees to pay such amount to Landlord upon demand and
this Guaranty shall continue to be effective or shall be reinstated, as the
case may be, to the extent of any such payment or payments.

 

Guarantor agrees
that it shall not have:  (a) any right
to enforce any remedy which Landlord now has or hereafter may have against
Tenant, or any right to participate in any security now or hereafter held by
Landlord; or (b) any defense arising out of the absence, impairment or loss of
any right of reimbursement or subrogation.

 

J-1

 

Anything herein to the
contrary notwithstanding, Guarantor hereby expressly waives and releases any
rights of subrogation that Guarantor may have against Tenant, any rights of
contribution that Guarantor may have against any other guarantor of, or other
person secondarily liable for, the payment or performance of the obligations of
Tenant, and any rights of reimbursement that Guarantor may have against Tenant.

 

Guarantor hereby
unconditionally consents and agrees that any legal action brought under this
Guaranty may be brought in any State Court of the State of Illinois or in a
Federal United States Court in Illinois and Guarantor hereby unconditionally
consents to the jurisdiction of such courts in connection with any cause of
action brought by or against Tenant and/or Guarantor in any way directly or
indirectly related to the Lease or this Guaranty.  Further, Guarantor hereby irrevocably and unconditionally
appoints Tenant, as its duly authorized agent for service of process in
connection with any such cause of action, and Tenant shall be considered a
fully authorized agent for service of process in any other manner permitted by
law.

 

At any time that
Tenant is required to furnish an Estoppel Certificate pursuant to the Lease,
Guarantor, by guarantying the terms and conditions of the Lease, agrees that
Guarantor, upon ten (10) days’ prior written request to Guarantor, shall
execute and deliver to Landlord or to any third party designated by Landlord in
such request, a written estoppel certificate in the form submitted by Landlord
to Guarantor, certifying (i) that Guarantor concurs with the statements set
forth in said Estoppel Certificate by Tenant, and (ii) that this Guaranty
remains in full force and effect. 
Guarantor’s failure to deliver such estoppel certificate to Landlord (or
to any such designated third party) within such ten (10) day period shall
automatically constitute Guarantor’s approval of the requested estoppel
certificate as though such estoppel certificate had been executed and delivered
by Guarantor to Landlord or such designated third party in form identical to
the form submitted by Landlord to Guarantor.

 

Within fifteen (15) days after Landlord’s
request, Guarantor will deliver to Landlord, the most recent audited financial
statements (including all notes to such statements) of Guarantor, or, if no
such audited statements have been prepared, then unaudited financial statements
(including all notes to such statements) prepared in each case by an
independent certified public accountant in accordance with GAAP.  Landlord will not disclose any aspect of
Guarantor’s financial statements that Guarantor designates to Landlord as
confidential except (i) to any Mortgagee, prospective Mortgagee or prospective
purchaser of the Building, and (ii) if required by court order or
subpoena.  Guarantor represents and
warrants to Landlord that all financial information of Guarantor delivered and
to be delivered to Landlord by or on behalf of Tenant is and shall be true and
correct and that no material misstatements or omissions exist or will exist
therein.

 

[Signature Page Follows]

 

J-2

 

IN
WITNESS WHEREOF, Guarantor has set its hand as of
March 25, 2003.

 

	
   

  	
   

  	
  GUARANTOR:

  
	
  Witnesses (2 required)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/Richard LeSavoy

  	
   

  	
  UFP TECHNOLOGIES, INC., a Delaware

  corporation

  
	
  Witness

  	
   

  	
   

  
	
  Richard LeSavoy

  	
   

  	
   

  
	
  Print Name

  	
   

  	
  By:

  	
  /s/ Ronald J. Lataille

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President & CFO

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Wayne G. Williams

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  
	
  Wayne G. Williams

  	
   

  	
   

  
	
  Print Name

  	
   

  	
   

  

 

	
  STATE OF MA.

  	
  )

  
	
   

  	
  ) SS.

  
	
  COUNTY OF
  Essex

  	
  )

  
			

 

I, Joan F. Young, a Notary Public in and for
said County, in the State aforesaid, do hereby certify that Ron Lataille, the
VP-CFO of UFP TECHNOLOGIES, INC.,
a Delaware corporation (the “Corporation”), who is personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person and acknowledged that he/she signed and delivered
the said instrument as his/her own free and voluntary act and as the free and
voluntary act of the Corporation.

 

GIVEN under my hand and notarial seal, this 25th
day of March, 2003.

 

	
   

  	
  Joan F. Young

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  

 

J-3

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