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EXHIBIT 10.33

AIR COMMERCIAL REAL ESTATE ASSOCIATION

STANDARD INDUSTRIAL/COMMERCIAL

MULTI-TENANT LEASE — GROSS

1 .Basic Provisions (“Basic Provisions”).

     1.1 Parties: This Lease (“Lease”), dated for reference purposes only May 13, 2005.
is made by and between Scheu and Scheu
and Southwest Community Bank a California Banking Corporation (“Lessee”),
(collectively the “Parties”, or individually a “Party”).

     1.2(a) Premises: That certain portion of the Project (as defined below), including all improvements therein or to be provided by Lessor
under the terms of this Lease, commonly known by the street address of 8250 White Oak Avenue, Suite 100
located in the City of Rancho Cucamonga ,County of San Bernardino
State of California , with zip code 91730 as outlined on Exhibit B attached
hereto (“Premises”) and generally described as (describe briefly the nature of the
Premises): a commercial / office building
space of 2,557 rentable square feet, located within the White Oak Corporate Center, as
shown on Exhibits B and C attached to this lease agreement.

In addition to Lessee’s rights to use and occupy the Premises as hereinafter specified, Lessee
shall have non-exclusive rights to any utility raceways of the building containing the Premises
(“Building”)and to the Common Areas (as defined in Paragraph 2.7 below), but shall not have any
rights to the roof, or exterior walls of the Building or to any other buildings in the Project.
The Premises, the Building, the Common Areas, the land upon which they are located, along with all
other buildings and improvements thereon, are herein collectively referred to as the “Project.”
(See also Paragraph 2)

     1.2(b)Parking: 10 unreserved vehicle parking spaces . (See also Paragraph 2.6)

     1.3 Term: five (5 years and                      months (“Original Term”) commencing August 01, 2005
(“Commencement Date”) and ending July 31, 2010 (“Expiration Date”). (See also Paragraph 3)

     1.4 Early Possession : June 01, 2005 (“Early Possession Date”). (See also Paragraphs 3.2 and 3.3)

     1.5 Base Rent: $ 3,964.00 per month (“Base Rent”), payable on the first day
day of each month commencing August 01, 2005 — . (See also Paragraph 4)

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

     1.6 Lessee’s Share of Common Area Operating Expenses:                      percent (5.7%)(“Lessee’s Share”).
Lessee’s Share has been calculated by dividing the approximate square footage of the Premises by
the approximate square footage of the Project. In
the event that that size of the Premises and/or the Project are modified during the term of
this Lease, Lessor shall recalculate Lessee’s Share to reflect
such modification.

     1.7 Base Rent and Other Monies Paid Upon Execution:

          (a) Base Rent: $ 3,964.00 for the period August01, 2005 through August 31, 2005.

          (b) Common Area Operating Expenses: $ none for the period n/a

          (c) Security Deposit: $4,561.00 (“Security Deposit”). (See also Paragraph 5)

          (d) Other: $ none for n/a .

          (e) Total Due Upon Execution of this Lease: $8,525.00

     1.8 Agreed Us: full service bank branch with ATM. service and related bank /
financial uses. (See also Paragraph 6)

     1.9 Insuring Party. Lessor is the “Insuring Party”. (See also Paragraph 8)

     1.10 Real Estate Brokers: (See also Paragraph 15)

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

þ Delmar Commercial Real Estate Services, Inc. represents Lessor exclusively (“Lessor’s Broker”);

þ Delmar Commercial Real Estate Services, Inc. represents Lessee exclusively (“Lessee’s Broker”); or

o                                          represents both Lessor and Lessee (“Dual Agency”).

     (b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor
shall pay to the Brokers the brokerage fee agreed to in a separate written agreement (or
if there is no such agreement, the sum of n/a or n/a% of the total Base Rent for the brokerage services
rendered by the Brokers).

     1.11 Guarantor. The obligations of the Lessee under this Lease are to be guaranteed by n/a
(“Guarantor”). (See also Paragraph 37)

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

þ an Addendum consisting of Paragraphs 50 through 63

þ a site plan depicting the Premises;

þ a site plan depicting the Project;

þ a current set of the Rules and Regulations for the Project;

o a current set of the Rules and Regulations adopted by the owners’ association;

	 	 	 	 	 	 	 	 	 	 	 
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o a Work Letter;

þ other (specify): OPTION (S) TO RENEW, LESSEE CORPORATE RESOLUTION TO LEASE

2. Premises.

     2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the
Premises, for the term, at the rental. and
upon all of the terms, covenants and conditions set forth in this Lease. Unless otherwise
provided herein, any statement of size set forth in this Lease,
or that may have been used in calculating Rent, is an approximation which the Parties agree is
reasonable and any payments based thereon are not
subject to revision whether or not the actual size is more or less. NOTE: Lessee is advised to
verify the actual size prior to executing this Lease.

     2.2 Condition. Lessor shall deliver that portion of the Premises contained within the Building
(“Unit”) to Lessee broom clean and free
of debris on the Commencement Date or the Early Possession Date, whichever first occurs
(“Start Date”), and, so long as the required service
contracts described in Paragraph 7.1(b) below are obtained by Lessee and in effect within
thirty days following the Start Date, warrants that the existing electrical, plumbing, fire
sprinkler, lighting, heating, ventilating and air conditioning systems (“HVAC”), loading doors,
sump pumps, if any, and all other such elements in the Unit, other than those constructed by
Lessee, shall be in good operating condition on said date, that the structural elements of the
roof, bearing walls and foundation of the Unit shall be free of material defects, and that the Unit
does not contain hazardous levels of any mold or fungi defined as toxic under applicable state or
federal law. If a non-compliance with such warranty exists as of the Start Date, or if one of such
systems or elements should malfunction or fail within the appropriate warranty period, Lessor
shall, as Lessor’s sole obligation with respect to such matter, except as otherwise provided in
this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the
nature and extent of such
non-compliance, malfunction or failure, rectify same at Lessor’s expense. The warranty periods
shall be as follows: (i) 6 months as to the HVAC systems, and (ii) 30 days as to the remaining
systems and other elements of the Unit. If Lessee does not give Lessor the required notice within
the appropriate warranty period, correction of any such non-compliance, malfunction or failure
shall be the obligation of Lessee at Lessee’s sole cost and expense (except for the repairs to the
fire sprinkler systems, roof, foundations, and/or bearing walls — see Paragraph 7).

     2.3 Compliance. Lessor warrants that to the best of its knowledge the improvements on the
Premises and the Common Areas comply
with the building codes that were in effect at the time that each such improvement, or portion
thereof, was constructed, and also with all applicable laws,
covenants or restrictions of record, regulations, and ordinances in effect on the Start Date
(“Applicable Requirements”). Said warranty does not apply
to the use to which Lessee will put the Premises, modifications which may be required by the
Americans with Disabilities Act or any similar laws as a
result of Lessee’s use (see Paragraph 49), or to any Alterations or Utility Installations (as
defined in Paragraph 7.3(a)) made or to be made by Lessee.
NOTE: Lessee is responsible for determining whether or not the Applicable Requirements, and
especially the zoning are appropriate for
Lessee’s intended use, and acknowledges that past uses of the Premises may no longer be
allowed. If the Premises do not comply with said
warranty, Lessor shall, except as otherwise provided, promptly after receipt of written notice
from Lessee setting forth with specificity the nature and
extent of such non-compliance, rectify the same at Lessor’s expense. If Lessee does not give
Lessor written notice of a non-compliance with this
warranty within 6 months following the Start Date, correction of that non-compliance shall be
the obligation of Lessee at Lessee’s sole cost and
expense. If the Applicable Requirements are hereafter changed so as to require during the term
of this Lease the construction of an addition to or an
alteration of the Unit, Premises and/or Building, the remediation of any Hazardous Substance,
or the reinforcement or other physical modification of the
Unit, Premises and/or Building (“Capital Expenditure”), Lessor and Lessee shall allocate the
cost of such work as follows:

          (a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result
of the specific and unique use of the Premises by Lessee as compared with uses by tenants in
general, Lessee shall be fully responsible for the cost thereof, provided, however, that if such
Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds
6 months’ Base Rent, Lessee may instead terminate this Lease unless Lessor notifies Lessee, in
writing, within 10 days after receipt of Lessee’s termination notice that Lessor has elected to pay
the difference between the actual cost thereof and the amount equal to 6 months’ Base Rent. If
Lessee elects termination, Lessee shall immediately cease the use of the Premises which requires
such Capital Expenditure and deliver to Lessor written notice specifying a termination date at
least 90 days thereafter. Such termination date shall. however, in no event be earlier than the
last day that Lessee could legally utilize the Premises without commencing such Capital
Expenditure.

          (b) If such Capital Expenditure is not the result of the specific and unique use of the
Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor and Lessee
shall allocate the obligation to pay for the portion of such costs reasonably attributable to the
Premises pursuant to the formula set out in Paragraph 7.1(d); provided, however, that if such
Capital Expenditure is required during the last 2 years of this Lease or if Lessor reasonably
determines that it is not economically feasible to pay its share thereof, Lessor shall have the
option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies
Lessor, in writing, within 10 days after receipt of Lessor’s termination notice that Lessee will
pay for such Capital Expenditure. If Lessor does not elect to terminate, and fails to tender its
share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with
Interest, from Rent until Lessor’s share of such costs have been fully paid. If Lessee is unable to
finance Lessor’s share, or if the balance of the Rent due and payable for the remainder of this
Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right
to terminate this Lease upon 30 days written notice to Lessor.

          (c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to
apply only to non-voluntary,
unexpected, and new Applicable Requirements. If the Capital Expenditures are instead triggered
by Lessee as a result of an actual or proposed
change in use, change In intensity of use, or modification to the Premises then, and in that
event, Lessee shall either: (i) immediately cease such changed use or intensity of use and/or take
such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or
(ii) complete such Capital Expenditure at its own expense. Lessee shall not have any right to
terminate this Lease.

     2.4 Acknowledgements. Lessee acknowledges that: (a) it has been advised by Lessor and/or
Brokers to satisfy itself with respect to
the condition of the Premises (including but not limited to the electrical, HVAC and fire
sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and
the Americans with Disabilities Act), and their suitability for Lessee’s intended use, (b) Lessee
has made such investigation as it deems necessary with reference to such matters and assumes all
responsibility therefor as the same relate to its occupancy of the Premises, and (c) neither
Lessor, Lessor’s agents, nor Brokers have made any oral or written representations or warranties
with respect to said matters other than as set forth in this Lease. In addition, Lessor
acknowledges that: (i) Brokers have made no representations, promises or warranties concerning
Lessee’s ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor’s
sole responsibility to investigate the financial capability and/or suitability of all proposed
tenants.

     2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of
no force or effect if immediately
prior to the Start Date Lessee was the owner or occupant of the Premises. In such event,
Lessee shall be responsible for any necessary corrective
work.

     2.6 Vehicle Parking. Lessee shall be entitled to use the number of Parking Spaces specified in Paragraph 1.2(b) on those portions of
the Common Areas designated from time to time by Lessor for parking. Lessee shall not use more
parking spaces than said number. Said parking
spaces shall be used for parking by vehicles no larger than full-size passenger automobiles or
pick-up trucks, herein called “Permitted Size Vehicles.”

	 	 	 	 	 	 	 	 	 	 	 
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Lessor may regulate the loading and unloading of vehicles by adopting Rules and Regulations as
provided in Paragraph 2.9. No vehicles other than Permitted Size Vehicles may be parked in the
Common Area without the prior written permission of Lessor. In addition:

     (a) Lessee shall not permit or allow any vehicles, except temper,’ parking by en armored
vehicle, that belong to or are controlled by Lessee or Lessee’s employees, suppliers, shippers,
customers, contractors or invitees to be loaded, unloaded, or parked in areas other than those
designated
by Lessor for such activities.

     (b) Lessee shall not service or store any vehicles in the Common Areas.

     (c) If Lessee permits or allows any of the prohibited activities described in this Paragraph

     2.6, then Lessor shall have the right, without notice, in addition to such other rights and
remedies that it may have, to remove or tow away the vehicle involved and charge the cost to
Lessee, which
cost shall be immediately payable upon demand by Lessor.

     2.7 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 Project and interior utility raceways and installations within
the Unit that are provided and designated by the Lessor from
time to time for the general non-exclusive use of Lessor, Lessee and other tenants of the
Project and their respective employees, suppliers, shippers, customers, contractors and invitees,
including parking areas, loading and unloading areas, trash areas, roadways, walkways, driveways
and landscaped areas.

     2.8 Common Areas - Lessee’s Rights. Lessor grants to Lessee, for the benefit of Lessee and its employees, suppliers, shippers,
contractors. customers and invitees, during the term of this Lease, the non-exclusive right
to use, in common with others entitled to such use, the
Common Areas as they exist from time to time, subject to any rights, powers, and privileges
reserved by Lessor under the terms hereof or under the
terms of any rules and regulations or restrictions governing the use of the Project. Under no
circumstances shall the right herein granted to use the Common Areas be deemed to include the
right to store any property, temporarily or permanently, in the Common Areas. Any such storage
shall be permitted only by the prior written consent of Lessor or Lessor’s designated agent, which
consent may be revoked at any time. In the event that any unauthorized storage shall occur, then
Lessor shall have the right, without notice, in addition to such other rights and remedies that it
may have, to
remove the property and charge the cost to Lessee, which cost shall be immediately payable
upon demand by Lessor.

     2.9 Common Areas - Rules and Regulations. 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 establish, modify, amend and enforce reasonable rules and regulations
(“Rules and Regulations”) for the management, safety, care, and cleanliness of the grounds, the
parking and unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of the Building and the Project and their invitees.
Lessee agrees to abide by and conform to all such Rules and Regulations, and shall use its best
efforts to cause its employees, suppliers, shippers, customers, contractors and invitees to so
abide and conform. Lessor shall not be responsible to Lessee for the non-compliance with said
Rules and Regulations by other tenants of the Project.

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

     (a) To make changes to the Common Areas, including, without limitation, changes in the
location, size, shape and number of driveways, entrances, parking spaces, parking areas, loading
and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility
raceways:

     (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 outside the boundaries of the Project to be a part of the Common
Areas:

     (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 Project, or any portion thereof; and

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

3. Term.

     3.1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as
specified in Paragraph 1.3.

     3.2 Early Possession. If Lessee totally or partially occupies the Premises prior to the
Commencement Date, the obligation to pay
Base Rent shall be abated for the period of such early possession. All other terms of this
Lease (including but not limited to the obligations to pay
Lessee’s Share of Common Area Operating Expenses, Real Property Taxes and insurance premiums
and to maintain the Premises) shall be in effect during such period. Any such early possession
shall not affect the Expiration Date.

     3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to
deliver possession of the Premises to
Lessee by the Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession as agreed, Lessor shall not be subject to any liability therefor, nor shall such failure
affect the validity of this Lease or change the Expiration Date. Lessee shall not, however, be
obligated to pay Rent
or perform its other obligations until Lessor delivers possession of the Premises and any
period of rent abatement that Lessee would otherwise have
enjoyed shall run from the date of the delivery of possession and continue for a period equal
to what Lessee would otherwise have enjoyed, but minus
any days of delay caused by the acts or omissions of Lessee. If possession is not delivered
within 60 days after the Commencement Date, Lessee
may, at its option, by notice in writing within 10 days after the end of such 60 day period,
cancel this Lease, in which event the Parties shall be
discharged from all obligations hereunder. If such written notice is not received by Lessor
within said 10 day period, Lessee’s right to cancel shall
terminate. Except as otherwise provided. if possession is not tendered to Lessee by the Start
Date and Lessee does not terminate this Lease, as
aforesaid, any period of rent abatement that Lessee would otherwise have enjoyed shall run
from the date of delivery of possession and continue for a
period equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any
days of delay caused by the acts or omissions of
Lessee. If possession of the Premises is not delivered within 4 months after the Commencement
Date, this Lease shall terminate unless other
agreements are reached between Lessor and Lessee, in writing.

     3.4 Lessee Compliance. Lessor shall not be required to tender possession of the Premises to
Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5).
Pending delivery of such evidence, Lessee shall be required to perform all of its
obligations under this Lease from and after the Start Date, including the payment of Rent,
notwithstanding Lessor’s election to withhold possession
pending receipt of such evidence of insurance. Further, if Lessee is required to perform any
other conditions prior to or concurrent with the Start Date,
the Start Date shall occur but Lessor may elect to withhold possession until such conditions
are satisfied.

4. Rent.

     4.1. Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are
deemed to be rent (“Rent”).

     4.2 Common Area Operating Expenses. Lessee shall pay to Lessor during the term hereof, in addition to the Base Rent, Lessee’s
Share (as specified in Paragraph 1.6) of all Common Area Operating Expenses, as hereinafter
defined, during each calendar year of the term of this
Lease, in accordance with the following provisions:

     (a) “Common Area Operating Expenses” are defined, for purposes of this Lease, as all costs
incurred by Lessor relating to the
ownership and operation of the Project, including, but not limited to, the following:

	 	 	 	 	 	 	 	 	 	 	 
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               (i) The operation, repair and maintenance, in neat, clean, good order and condition, but not
the replacement (see subparagraph (e)), of the following:

                    (aa) The Common Areas and Common Area improvements, including parking areas, loading and
unloading areas, trash areas, roadways. parkways. walkways. driveways, landscaped areas, bumpers,
irrigation systems, Common Area lighting facilities. fences and
gates, elevators, roofs, and roof drainage systems.

                    (bb) Exterior signs and any tenant directories

                    (cc) . Any fire sprinkler systems.

               (ii) The cost of water, gas, electricity and telephone to service the Common Areas and any utilities not separately
metered.

               (iii) Trash disposal. pest control services, property management, security services. owner’s association dues and
fees, the cost to repaint the exterior of any structures and the cost of any environmental inspections.

               (iv) Reserves net aside for maintenance and repair of Common Areas and Common Area equipment.

               (v) Any increase above the Base Real Property Taxes (as defined in Paragraph 10).

               (vi) Any “Insurance Cost Increase” (as defined In Paragraph 8).

               (vii) Any deductible portion of an insured loss concerning the Building or the Common Areas.

               (viii) Auditors’, accountants’ and attorneys’ fees and costs related to the operation,
maintenance, repair and replacement of the Project.

               (ix) The cost of any Capital Expenditure to the Building or the Project not covered under the
provisions of
Paragraph 2.3 provided: however, that Lessor shall allocate the cost of any such Capital
Expenditure over a 12 year period and Lessee shall not be required to pay more than Lessee’s Share
of 1/144th of the cost of such Capital Expenditure in any given month.

               (x) Any other services to be provided by Lessor that are stated elsewhere in this Lease to be
a Common Area Operating Expense.

     (b) Any Common Area Operating Expenses and Real Property Taxes that are specifically
attributable to the Unit, the Building or to any
other building in the Project or to the operation, repair and maintenance thereof. shall be
allocated entirely to such Unit. Building, or other building.
However, any Common Area Operating Expenses and Real Property Taxes that are not specifically
attributable to the Building or to any other building
or to the operation, repair and maintenance thereof, shall be equitably allocated by Lessor to
all buildings in the Project.

     (c) The inclusion of the improvements. facilities and services set forth In Subparagraph
4.2(a) shall not be deemed to impose an
obligation upon Lessor to either have said improvements or facilities or to provide those
services unless the Project already has the same, Lessor
already provides the services, or Lessor has agreed elsewhere in this Lease to provide the
same or some of them.

     (d) Lessee’s Share of Common Area Operating Expenses Is payable monthly on the same day as the
Base Rent is due hereunder.
The amount of such payments shall be based on Lessor’s estimate of the annual Common Area
Operating Expenses. Within 60 days after written
request (but not more than once each year) Lessor shall deliver to Lessee a reasonably
detailed statement showing Lessee’s Share of the actual
Common Area Operating Expenses incurred during the preceding year. If Lessee’s payments during
such year exceed Lessee’s Share, Lessor shall
credit the amount of such over-payment against Lessee’s future payments. If Lessee’s payments
during such year were less than Lessee’s Share.

 Lessee shall pay to Lessor the amount of the deficiency within 10 days after delivery by
Lessor to Lessee of the statement.

     (e) Except as provided in paragraph 4.2(a)(viii), Common Area Operating Expenses shall not
include the cost of replacing equipment
or capital components such as the roof, foundations, exterior walls or Common Area capital
improvements, such as the parking lot paving, elevators,
fences that have a useful life for accounting purposes of 5 years or more.

     (I) Common Area Operating Expenses shall not include any expenses paid by any tenant directly
to third parties, or as to which Lessor

is otherwise reimbursed by any third party, other tenant or insurance proceeds.

          4.3 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset
or deduction (except as specifically permitted in this Lease), on or before the day on which
it is due. All monetary amounts shall be rounded to the nearest
whole dollar. In the event that any statement or invoice prepared by Lessor is inaccurate such
inaccuracy shall not constitute a waiver and Lessee shall
be obligated to pay the amount set forth in this Lease. Rent for any period during the term
hereof which is for less than one full calendar month shall be
prorated based upon the actual number of days of said month. Payment of Rent shall be made to
Lessor at its address stated herein or to such other
persons or place as Lessor may from time to time designate in writing. Acceptance of a payment
which is less than the amount then due shall not be a
waiver of Lessor’s rights to the balance of such Rent, regardless of Lessor’s endorsement of
any check so stating. In the event that any check, draft, or
other instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee
agrees to pay to Lessor the sum of $25 in addition to any
Late Charge and Lessor, at its option, may require all future Rent be paid by cashier’s check.
Payments will be applied first to accrued late charges and
attorney’s fees, second to accrued interest, then to Base Rent and Common Area Operating
Expenses, and any remaining amount to any other
outstanding charges or costs.

5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as
security for Lessee’s faithful performance
of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this
Lease, Lessor may use, apply or retain all or any portion
of said Security Deposit for the payment of any amount due Lessor or to reimburse or compensate
Lessor for any liability, expense, loss or damage
which Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or any
portion of the Security Deposit, Lessee shall within 10 days
after written request therefor deposit monies with Lessor sufficient to restore said Security
Deposit to the full amount required by this Lease. If the Base
Rent increases during the term of this Lease, Lessee shall, upon written request from Lessor,
deposit additional monies with Lessor so that the total
amount of the Security Deposit shall at all times bear the same proportion to the increased Base
Rent as the Initial Security Deposit bore to the initial
Base Rent. Should the Agreed Use be amended to accommodate a material change in the business of
Lessee or to accommodate a sublessee or
assignee, Lessor shall have the right to increase the Security Deposit to the extent necessary, in
Lessor’s reasonable judgment. to account for any
increased wear and tear that the Premises may suffer as a result thereof. If a change in control of
Lessee occurs during this Lease and following such
change the financial condition of Lessee is, in Lessor’s reasonable judgment, significantly
reduced, Lessee shall deposit such additional monies with
Lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable
level based on such change in financial condition.
Lessor shall not be required to keep the Security Deposit separate from its general accounts.
Within 14 days after the expiration or termination of this
Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and otherwise within 30
days after the Premises have been vacated pursuant
to Paragraph 7.4(c) below, Lessor shall return that portion of the Security Deposit not used or
applied by Lessor. No part of the Security Deposit shall
be considered to be held in trust. to bear interest or to be prepayment for any monies to be paid
by Lessee under this Lease.

6. Use.

     6.1 Use, Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal
use which Is reasonably comparable thereto, and for no other purpose. Lessee shall not use or
permit the use of the Premises in a manner that is unlawful, creates damage, waste or a
nuisance. or that disturbs occupants of or causes damage to neighboring premises or
properties. Other than guide, signal and seeing eye dogs. Lessee
shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. Lessor
shall not unreasonably withhold or delay Its consent to
any written request for a modification of the Agreed Use. so long as the same will not impair
the structural integrity of the Building or the mechanical or

	 	 	 	 	 	 	 	 	 	 	 
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electrical systems therein, and/or is not significantly more burdensome to the Project. If Lessor
elects to withhold consent. Lessor shall within 7 days after such request give written
notification of same, which notice shall include an explanation of Lessor’s objections to the
change in the Agreed Use.

     6.2 Hazardous Substances.

          (a) Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease
shall mean any product, substance, or waste whose presence, use, manufacture, disposal,
transportation, or release, either by itself or in combination with other materials expected to be
on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a
basis for potential liability of Lessor to any governmental agency or third party under any
applicable statute or common law theory. Hazardous Substances shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions
thereof. Lessee shall not engage in any activity in or on the Premises which constitutes a
Reportable Use of Hazardous Substances without the express prior written consent of Lessor and
timely compliance (at Lessee’s expense) with all Applicable Requirements. “Reportable Use” shall
mean (i) the installation or use of any above or below ground storage tank, (ii) the generation,
possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a
permit from, or with respect to which a report, notice, registration or business plan is required
to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a
Hazardous Substance with respect to which any Applicable Requirements requires that a notice be
given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the
foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in
the normal course of the Agreed Use, ordinary office supplies (copier toner, liquid paper, glue,
etc.) and common household cleaning materials, no long as such use is in compliance with all
Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring
property to any meaningful risk of contamination or damage or expose Lessor to any liability
therefor. In addition, Lessor may condition its consent to any Reportable Use upon receiving such
additional assurances as Lessor reasonably deems necessary to protect itself, the public, the
Premises and/or the environment against damage, contamination, injury and/or liability, including,
but not limited to, the installation (and removal on or before Lease expiration or termination) of
protective modifications (such as concrete encasements) and/or increasing the Security Deposit.

          (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a
Hazardous Substance has come to be located in, on, under or about the Premises, other than as
previously consented to by Lessor, Lessee shalt immediately give written notice of such fact to
Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation which it
has concerning the presence of such Hazardous Substance.

          (c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled
or released in, on, under, or about the Premises (including through the plumbing or sanitary sewer
system) and shall promptly, at Lessee’s expense, comply with all Applicable Requirements and take
all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or
required, for the cleanup of any contamination of, and for the maintenance, security and/or
monitoring of the Premises or neighboring properties. that was caused or materially contributed to
by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during
the term of this Lease, by or for Lessee, or any third party.

          (d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents,
employees, lenders and ground lessor, if any, harmless from and against any and all loss of rents
and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys’ and
consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises by
or for Lessee, or any third party (provided, however, that Lessee shall have no liability under
this Lease with respect to underground migration of any Hazardous Substance under the Premises from
areas outside of the Project not caused or contributed to by Lessee). Lessee’s obligations shall
include, but not be limited to, the effects of any contamination or injury to person, property or
the environment created or suffered by Lessee, and the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or termination of this Lease. No
termination, cancellation or release agreement entered into by Lessor and Lessee shall release
Lessee from its obligations under this Lease with respect to Hazardous Substances, unless
specifically so agreed by Lessor in writing at the time of such agreement.

          (e) Lessor Indemnification. Lessor and its successors and assigns shall indemnify, defend,
reimburse and hold Lessee. its employees and lenders, harmless from and against any and all
environmental damages, including the cost of remediation, which suffered as a direct result of
Hazardous Substances on the Premises prior to Lessee taking possession or which are caused by the
gross negligence or willful misconduct of Lessor, its agents or employees. Lessor’s obligations, as
and when required by the Applicable Requirements, shall include, but not be limited to, the cost of
investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration
or termination of this Lease.

          (f) (t) investigations and Remediations. Lessor shall retain the responsibility and pay for
any investigations or remediation measures required by governmental entities having jurisdiction
with respect to the existence of Hazardous Substances on the Premises prior to Lessee taking
possession, unless such remediation measure is required as a result of Lessee’s use (including
“Alterations”, as defined in paragraph 7.3(a) below) of the Premises, in which event Lessee shall
be responsible for such payment. Lessee shall cooperate fully in any such activities at the request
of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the Premises
at reasonable times in order to carry out Lessor’s investigative and remedial responsibilities.

          (g) (g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e))
occurs during the term of this Lease, unless Lessee is legally responsible therefor (in which case
Lessee shall make the investigation and remediation thereof required by the Applicable Requirements
and this Lease shall continue in full force and effect, but subject to Lessor’s rights under
Paragraph 6.2(d) and Paragraph 13). Lessor may, at Lessor’s option, either (i) investigate and
remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at
Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) if the
estimated cost to remediate such condition exceeds 12 times the then monthly Base Rent or $100,000,
whichever is greater, give written notice to Lessee. within 30 days after receipt by Lessor of
knowledge of the occurrence of such Hazardous Substance Condition, of Lessor’s desire to terminate
this Lease as of the date 60 days following the date of such notice. In the event Lessor elects to
give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of
Lessee’s commitment to pay the amount by which the cost of the remediation of such Hazardous
Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000,
whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof
within 30 days following such commitment. In such event, this Lease shall continue in full force
and effect, and Lessor shall proceed to make such remediation as soon as reasonably possible after
the required funds are available. If Lessee does not give such notice and provide the required
funds or assurance thereof within the time provided, this Lease shall terminate as of the date
specified in Lessor’s notice of termination.

     6.3 Lessee’s Compliance with Applicable Requirements. Except as otherwise provided In this
Lease, Lessee shall, at Lessee’s sole expense, fully, diligently and in a timely manner, materially
comply with all Applicable Requirements, the requirements of any applicable fire insurance
underwriter or rating bureau, and the recommendations of Lessor’s engineers and/or consultants
which relate in any manner to such Requirements, without regard to whether said Requirements are
now in effect or become effective after the Start Date. Lessee shall, within 10 days after receipt
of Lessor’s written request, provide Lessor with copies of all permits and other documents. and
other information evidencing Lessee’s compliance with any Applicable Requirements specified by
Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents
involved) of any threatened or actual claim, notice. citation, warning, complaint or report
pertaining to or Involving the failure of Lessee or the Premises to comply with any Applicable
Requirements. Likewise, Lessee shall immediately give written notice to Lessor of: (i) any water
damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive to
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that might indicate the presence of mold in the Premises.

     6.4 Inspection; Compliance. Lessor and Lessor’s “Lender” (as defined in Paragraph 30) and
consultants shall have the right to enter into Premises at any time, in the case of an emergency,
and otherwise at reasonable times after reasonable notice, for the purpose of inspecting the
condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any
such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a
Hazardous Substance condition (see Paragraph 9.1) is found to exist or be imminent. or the
inspection is requested or ordered by a governmental authority. In such case, Lessee shall upon
request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably
related to the violation or contamination. In addition, Lessee shall provide copies of all relevant
material safety data sheets (MSDS) to Lessor within 10 days of the receipt of written request
therefor.

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

     7.1 Lessee’s Obligations.

          (a) In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3
(Lessee’s Compliance with Applicable Requirements), 7.2 (Lessor’s Obligations). 9 (Damage or
Destruction), and 14 (Condemnation). Lessee shall, at Lessee’s sole expense, keep the Premises,
Utility Installations (intended for Lessee’s exclusive use, no matter where located), and
Alterations in good order, condition and repair (whether or not the portion of the Premises
requiring repairs, or the means of repairing the same, are reasonably or readily accessible to
Lessee. and whether or not the need for such repairs occurs as a result of Lessee’s use, any prior
use, the elements or the age of such portion of the Premises), including, but not limited to, all
equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities.
boilers, pressure vessels. fixtures, interior walls, interior surfaces of exterior walls, ceilings,
floors, windows, doors, plate glass, and skylights but excluding any items which are the
responsibility of Lessor pursuant to Paragraph 7.2. Lessee, in keeping the Premises in good order,
condition and repair, shall exercise and perform good maintenance practices, specifically including
the procurement and maintenance of the service contracts required by Paragraph 7.1(b) below.
Lessee’s obligations shall Include restorations, replacements or renewals when necessary to keep
the Premises and all improvements thereon or a part thereof in good order, condition and state of
repair.

          (b) Service Contracts. Lessee shall, at Lessee’s sole expense, procure and maintain contracts,
with copies to Lessor, In customary form and substance for. and with contractors specializing and
experienced in the maintenance of the following equipment and improvements, if any, if and when
Installed on the Premises: (i) HVAC equipment, (ii) boiler and pressure vessels, (iii) clarifiers,
and (iv) any other equipment, if reasonably required by Lessor. However, Lessor reserves the right.
upon notice to Lessee, to procure and maintain any or all of such service contracts. and Lessee
shall reimburse Lessor, upon demand, for the cost thereof.

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

          (d) Replacement. Subject to Lessee’s indemnification of Lessor as set forth in Paragraph 8.7
below, and without relieving Lessee of liability resulting from Lessee’s failure to exercise and
perform good maintenance practices, if an item described in Paragraph 7.1(b) cannot be repaired
other than at a cost which is in excess of 50% of the cost of replacing such item, then such item
shall be replaced by Lessor, and the cost thereof shall be prorated between the Parties and Lessee
shall only be obligated to pay, each month during the remainder of the term of this Lease, on the
date on which Base Rent is due, an amount equal to the product of multiplying the cost of such
replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (le.
1/144th of the cost per month). Lessee shall pay interest on the unamortized balance but may prepay
its obligation at any time.

     7.2 Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3
(Compliance), 4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee’s Obligations), 9 (Damage
or Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant to Paragraph 4.2,
shall keep in good order, condition and repair the foundations, exterior walls. structural
condition of interior bearing walls. exterior roof, fire sprinkler system, Common Area fire alarm
and/or smoke detection systems, fire hydrants, parking lots, walkways, parkways, driveways,
landscaping, fences, signs and utility systems serving the Common Areas and all parts thereof, as
well as providing the services for which there is a Common Area Operating Expense pursuant to
Paragraph 4.2. Lessor shall not be obligated to paint the exterior or interior surfaces of exterior
walls norshall Lessor be obligated to maintain, repair or replace windows, doors or plate glass of
the Premises. Lessee expressly waives the benefit of any statute now or hereafter in effect to the
extent it is inconsistent with the terms of this Lease.

     7.3 Utility Installations; Trade Fixtures; Alterations.

          (a) Definitions. The term “Utility Installations” refers to all floor and window coverings,
air and/or vacuum lines, power panels, electrical distribution, security and fire protection
systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on
the Premises. The term “Trade Fixtures” shall mean Lessee’s machinery and equipment that can be
removed without doing material damage to the Premises.. The term “Alterations” shall mean any
modification of the improvements, other than Utility Installations or Trade Fixtures, whether by
addition or deletion. “Lessee Owned Alterations and/or Utility Installations” are defined as
Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant
to Paragraph 7.4(a).

          (b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises
without Lessor’s prior written consent. Lessee may, however, make non-structural Utility
Installations to the interior of the Premises (excluding the roof) without such consent but upon
notice to Lessor, as long as they are not visible from the outside. do not involve puncturing,
relocating or removing the roof or any existing walls, will not affect the electrical, plumbing,
HVAC, and/or life safety systems, and the cumulative cost thereof during this Lease as extended
does not exceed a sum equal to 3 month’s Base Rent in the aggregate or a sum equal to one month’s
Base Rent in any one year. Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written approval of Lessor.
Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor
chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire
to make and which require the consent of the Lessor shall be presented to Lessor in written form
with detailed plans. Consent shall be deemed conditioned upon Lessee’s: (i) acquiring all
applicable governmental permits. (ii) furnishing Lessor with copies of both the permits and the
plans and specifications prior to commencement of the work, and (iii) compliance with all
conditions of said permits and other Applicable Requirements In a prompt and expeditious manner,
Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and
sufficient materials. Lessee shall promptly upon completion furnish Lessor with as-built plans and
specifications. For work which costs an amount in excess of one month’s Base Rent, Lessor may
condition its consent upon Lessee providing a lien and completion bond in an amount equal to 150%
of the estimated cost of such Alteration or Utility Installation and/or upon Lessee’s posting an
additional Security Deposit with Lessor.

          (c) Liens; Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or
alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or
may be secured by any mechanic’s or materialmen’s lien against the Premises or any interest
therein. Lessee shall give Lessor not less than 10 days notice prior to the commencement of any
work in, on or about the Premises, and Lessor shall have the right to post notices of
non-responsibility. If Lessee shall contest the validity of any such lien, claim or demand. then
Lessee shall, at its sole expense defend and protect itself. Lessor and the Premises against the
same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the
enforcement thereof. If Lessor shall require. Lessee shall furnish a surety bond in an amount equal
to 150% of the amount of such contested lien, Claim or demand, indemnifying Lessor against
liability for the same. If Lessor elects to participate in any such action,

	 	 	 	 	 	 	 	 	 	 	 
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Lessee shall pay Lessor’s attorneys’ fees and costs.

     7.4 Ownership; Removal; Surrender; and Restoration.

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

          (b) Removal. By delivery to Lessee of written notice from Lessor not earlier than 90 and not
later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all
Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of
this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without the required consent.

          (c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any
earlier termination date, with all of the improvements, parts and surfaces thereof broom clean and
free of debris, and in good operating order, condition and state of repair, ordinary wear and tear
excepted. “Ordinary wear and tear” shall not include any damage or deterioration that would have
been prevented by good maintenance practice. Notwithstanding the foregoing, if this Lease is for
12 months or less, then Lessee shall surrender the Premises in the same condition as delivered to
Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any
damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned
Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any
storage tank installed by or for Lessee. Lessee shall also completely remove from the Premises any
and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party
(except Hazardous Substances which were deposited via underground migration from areas outside of
the Premises) even if such removal would require Lessee to perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by
Lessee. Any personal property of Lessee not removed on or before the Expiration Date or any
earlier termination date shall be deemed to have been abandoned by Lessee and may be disposed of
or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a
holdover under the provisions of Paragraph 26 below.

8. Insurance; Indemnity.

     8.1 Payment of Premium Increases.

          (a) As used herein, the term “Insurance Cost Increase” is defined as any increase in the
actual cost of the insurance applicable to the Building and/or the Project and required to be
carded by Lessor, pursuant to Paragraphs 8.2(b), 8.3(a) and 8.3(b), (“Required Insurance”), over
and above the Base Premium, as hereinafter defined, calculated on an annual basis. Insurance Cost
Increase shall include, but not be limited to. requirements of the holder of a mortgage or deed of
trust covering the Premises, Building and/or Project, increased valuation of the Premises,
Building and/or Project, and/or a general premium rate increase. The term Insurance Cost Increase
shall not, however, include any premium increases resulting from the nature of the occupancy of
any other tenant of the Building. If the parties insert a dollar amount in Paragraph 1.9, such
amount shall be considered the “Base Premium.” The Base Premium shall be the annual premium
applicable to the 12 month period immediately preceding the Start Date. If, however, the Project
was not insured for the entirety of such 12 month period, then the Base Premium shall be the
lowest annual premium reasonably obtainable for the Required Insurance as of the Start Date,
assuming the most nominal use possible of the Building. In no event, however, shall Lessee be
responsible for any portion of the premium cost attributable to liability insurance coverage in
excess of $2,000,000 procured under Paragraph 8.2(b).

          (b) Lessee shall pay any Insurance Cost Increase to Lessor pursuant to Paragraph 4.2.
Premiums for policy periods commencing prior to, or extending beyond, the term of this Lease shall
be prorated to coincide with the corresponding Start Date or Expiration Date.

     8.2 Liability Insurance.

          (a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability
policy of insurance protecting Lessee and Lessor as an additional insured against claims for
bodily injury, personal injury and property damage based upon or arising out of the ownership,
use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount not less than
$1,000,000 per occurrence with an annual aggregate of not less than $2,000,000. Lessee shall add
Lessor as an additional insured by means of an endorsement at least as broad as the Insurance
Service Organization’s “Additional Insured-Managers or Lessors of Premises” Endorsement and
coverage shall also be extended to include damage caused by heat, smoke or fumes from a hostile
fire. The policy shall not contain any intra-insured exclusions as between insured persons or
organizations. but shall include coverage for liability assumed under this Lease as an “insured
contract” for the performance of Lessee’s indemnity obligations under this Lease. The limits of
said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any
obligation hereunder. Lessee shall provide an endorsement on its liability policy(ies) which
provides that its insurance shall be primary to and not contributory with any similar insurance
carried by Lessor, whose insurance shall be considered excess insurance only.

          (b) Carried by Lessor. Lessor shall maintain liability insurance as described in Paragraph
8.2(a), in addition to, and not in lieu of, the insurance required to be maintained by Lessee.
Lessee shall not be named as an additional insured therein.

     8.3 Property Insurance — Building, Improvements and Rental Value.

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

          (b) Rental Value. Lessor shall also obtain and keep in force a policy or policies in the name
of Lessor with loss payable to Lessor and any Lender, insuring the loss of the full Rent for one
year with an extended period of indemnity for an additional 180 days (“Rental Value
insurance”). Said insurance shall contain an agreed valuation provision in lieu of any
coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected
Rent otherwise payable by Lessee, for the next 12 month period.

          (c) Adjacent Premises. Lessee shall pay for any increase in the premiums for the property
insurance of the Building and for the Common Areas or other buildings In the Project if said
increase is caused by Lessee’s acts, omissions, use or occupancy of the Premises.

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

	 	 	 	 	 	 	 	 	 	 	 
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     8.4 Lessee’s Property; Business Interruption Insurance.

          (a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee’s
personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such
insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per
occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of
personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee
shall provide Lessor with written evidence that such insurance is in force.

          (b} Business Interruption—Lessee-shall-obtain and-maintain-loss-of-income-and-extra-expense
insurance-in the amounts as will reimburse-Lessee-for-direct-or indirect-loss-of-earnings
attributable-to all-perils-commonly-insured against-by-prudent lessees-in-the-business of Lesseeor
attributable-to-prevention-of access-to-the-Premises-as-a result of-such perils

          (c) No Representation of Adequate Coverage. Lessor makes no representation that the limits or
forms of coverage of insurance specified herein are adequate to cover Lessee’s property, business
operations or obligations under this Lease.

     8.5 Insurance Policies. Insurance required herein shall be by companies duly licensed or
admitted to transact business in the state where the Premises are located, and maintaining during
the policy term a “General Policyholders Rating” of at least A-, VI, as set forth in the most
current issue of “Best’s Insurance Guide”, or such other rating as may be required by a Lender.
Lessee shall not do or permit to be done anything which invalidates the required insurance
policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies
of such insurance or certificates evidencing the existence and amounts of the required insurance.
No such policy shall be cancelable or subject to modification except after 30 days prior written
notice to Lessor. Lessee shall. at least 10 days prior to the expiration of such policies,
furnish Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or
Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be
payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least one year,
or the length of the remaining term of this Lease. whichever is less. If either Party shall fail
to procure and maintain the insurance required to be carried by it, the other Party may, but
shall not be required to, procure and maintain the same.

     8.6 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor
each hereby release and relieve the other, and waive their entire right to recover damages
against the other, for loss of or damage to its property arising out of or incident to the perils
required to be insured against herein. The effect of such releases and waivers is not limited by
the amount of insurance carried or required, or by any deductibles applicable hereto. The Parties
agree to have their respective property damage insurance carriers waive any right to subrogation
that such companies may have against Lessor or Lessee, as the case may be, no long as the
insurance is not invalidated thereby.

     8.7 Indemnity. Except for Lessor’s gross negligence or willful misconduct, Lessee shall
indemnify, protect. defend and hold harmless the Premises, Lessor and its agents, Lessor’s master
or ground lessor, partners and Lenders, from and against any and all claims, loss of rents and/or
damages, liens, judgments, penalties, attorneys’ and consultants’ fees, expenses and/or
liabilities arising out of, involving, or in connection with, the use and/or occupancy of the
Premises by Lessee. If any action or proceeding is brought against Lessor by reason of any of the
foregoing matters, Lessee shall upon notice defend the same at Lessee’s expense by counsel
reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor
need not have first paid any such claim in order to be defended or indemnified.

     8.8 Exemption of Lessor from Liability. Lessor shall not be liable for injury or damage to
the person or goods, wares, merchandise or other property of Lessee, Lessee’s employees,
contractors, invitees, customers, or any other person In or about the Premises, whether such
damage or injury is caused by or results from fire, steam, electricity, gas. water or rain,
indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other
defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or
from any other cause, whether the said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building, or from other sources or places. Lessor shall
not be liable for any damages arising from any act or neglect of any other tenant of Lessor nor
from the failure of Lessor to enforce the provisions of any other lease in the Project.
Notwithstanding Lessor’s negligence or breach of this Lease, Lessor shall under no circumstances
be liable for injury to Lessee’s business or for any loss of income or profit therefrom.

     8.9 Failure to Provide Insurance. Lessee acknowledges that any failure on its part to obtain
or maintain the insurance required herein will expose Lessor to risks and potentially cause
Lessor to incur costs not contemplated by this Lease, the extent of which will he extremely
difficult to ascertain. Accordingly, for any month or portion thereof that Lessee does not
maintain the required insurance and/or does not provide Lessor with the required binders or
certificates evidencing the existence of the required insurance, the Base Rent shall be
automatically increased, without any requirement for notice to Lessee, by an amount equal to 10%
of the then existing Base Rent or $100, whichever is greater. The parties agree that such
increase in Base Rent represents fair and reasonable compensation for the additional risk/costs
that Lessor will incur by reason of Lessee’s failure to maintain the required insurance. Such
increase in Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach with
respect to the failure to maintain such insurance, prevent the exercise of any of the other
rights and remedies granted hereunder, nor relieve Lessee of its obligation to maintain the
insurance specified in this Lease.

9. Damage or Destruction.

     9.1 Definitions.

          (a) “Premises Partial Damage” shall mean damage or destruction to the improvements on the
Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be
repaired in 3 months or less from the date of the damage or destruction, and the cost thereof
does not exceed a sum equal to 6 month’s Base Rent. Lessor shall notify Lessee in writing within
30 days from the date of the damage or destruction as to whether or not the damage is Partial or
Total. Notwithstanding the foregoing, Premises Partial Damage shall not include damage to
windows, doors, and/or other similar items which Lessee has the responsibility to repair or
replace pursuant to the provisions of Paragraph 7.1.

          (b) “Premises Total Destruction” shall mean damage or destruction to the improvements on the
Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which
cannot reasonably be repaired in 3 months or less from the date of the damage or destruction
and/or the cost thereof exceeds a sum equal to 6 month’s Base Rent. Lessor shall notify Lessee in
writing within 30 days from the date of the damage or destruction as to whether or not the damage
is Partial or Total.

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

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

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

     9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss
occurs, then Lessor shall, at Lessor’s expense, repair such damage (but not Lessee’s Trade
Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and
this Lease shall continue in full force and effect; provided, however, that Lessee shall, at
Lessor’s election, make the repair of any damage or destruction the total cost to repair of which
is $10,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds
available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the
required insurance was not in force or the insurance proceeds are

	 	 	 	 	 	 	 	 	 	 	 
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not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in
proceeds as and when required to complete said repairs. In the event, however, such shortage was due
to the fact that, by reason of the unique nature of the improvements, full replacement cost
insurance coverage was not commercially reasonable and available, Lessor shall have no obligation
to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the
Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof,
within 10 days following receipt of written notice of such shortage and request therefor. If Lessor
receives said funds or adequate assurance thereof within said 10 day period, the party responsible
for making the repairs shall complete them as soon as reasonably possible and this Lease shall
remain in full force and effect. If such funds or assurance are not received. Lessor may
nevertheless elect by written notice to Lessee within 10 days thereafter to: (i) make such
restoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds,
in which case this Lease shall remain in full force and effect, or (ii) have this Lease terminate
30 days thereafter. Lessee shall not be entitled to reimbursement of any funds contributed by
Lessee to repair any such damage or destruction. Premises Partial Damage due to flood or earthquake
shall be subject to Paragraph 9.3, notwithstanding that there may be some insurance coverage. but
the net proceeds of any such insurance shall be made available for the repairs if made by either
Party.

     9.3 Partial Damage — Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss
occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make
the repairs at Lessee’s expense), Lessor may 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) terminate this Lease by giving written notice to Lessee within 30 days after receipt by
Lessor of knowledge of the occurrence of such damage. Such termination shall be effective 60 days
following the date of such notice. In the event Lessor elects to terminate this Lease, Lessee
shall have the right within 10 days after receipt of the termination notice to give written notice
to Lessor of Lessee’s commitment to pay for the repair of such damage without reimbursement from
Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30
days after making such commitment. In such event this Lease shall continue in full force and
effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the
required funds are available. If Lessee does not make the required commitment, this Lease shall
terminate as of the date specified in the termination notice.

     9.4 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total
Destruction occurs, this Lease shall terminate 60 days following such Destruction. If the damage
or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall
have the right to recover Lessor’s damages from Lessee, except as provided in Paragraph 8.6.

     9.5 Damage Near End of Term. If at any time during the last 6 months of this Lease there is
damage for which the cost to repair exceeds one month’s Base Rent, whether or not an Insured Loss,
Lessor may terminate this Lease effective 60 days following the date of occurrence of such damage
by giving a written termination notice to Lessee within 30 days after the date of occurrence of
such damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a)
exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or
adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date
which is 10 days after Lessee’s receipt of Lessor’s written notice purporting to terminate this
Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises
such option during such period and provides Lessor with funds (or adequate assurance thereof) to
cover any shortage in insurance proceeds, Lessor shall. at Lessor’s commercially reasonable
expense. repair such damage as soon as reasonably possible and this Lease shall continue in full
force and effect. If Lessee fails to exercise such option and provide such funds or assurance
during such period, then this Lease shall terminate on the date specified in the termination
notice and Lessee’s option shall be extinguished.

     9.6 Abatement of Rent; Lessee’s Remedies.

          (a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a
Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent
payable by Lessee for the period required for the repair, remediation or restoration of such
damage shall be abated in proportion to the degree to which Lessee’s use of the Premises is
impaired, but not to exceed the proceeds received from the Rental Value insurance. All other
obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability
for any such damage, destruction, remediation, repair or restoration except as provided herein.

          (b) Remedies. If Lessor shall be obligated to repair or restore the Premises and does not
commence, in a substantial and meaningful way, such repair or restoration within 90 days after
such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or
restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice,
of Lessee’s election to terminate this Lease on a date not less than 60 days following the giving
of such notice. If Lessee gives such notice and such repair or restoration is not commenced within
30 days thereafter, this Lease shall terminate as of the date specified in said notice. If the
repair or restoration is commenced within such 30 days, this Lease shall continue in full force
and effect. “Commence” shall mean either the unconditional authorization of the preparation of the
required plans, or the beginning of the actual work on the Premises, whichever first occurs.

     9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph
6.2(g) or Paragraph 9. an equitable adjustment shall be made concerning advance Base Rent and any
other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so
much of Lessee’s Security Deposit as has not been, or is not then required to be. used by Lessor.

     9.8 Waive Statutes. Lessor and Lessee agree that the terms of this Lease shall govern the
effect of any damage to or destruction of the Premises with respect to the termination of this
Lease and hereby waive the provisions of any present or future statute to the extent inconsistent
herewith.

10. Real Property Taxes.

     10.1 Definitions.

          (a) “Real Property Taxes.” As used herein, the term “Real Property Taxes” shall include any
form of assessment; real estate, general. special, ordinary or extraordinary, or rental levy or
tax (other than inheritance, personal income or estate taxes); improvement bond; and/or license
fee imposed upon or levied against any legal or equitable interest of Lessor in the Project,
Lessor’s right to other income therefrom, and/or Lessor’s business of leasing, by any authority
having the direct or indirect power to tax and where the funds are generated with reference to the
Project address and where the proceeds so generated are to be applied by the city, county or other
local taxing authority of a jurisdiction within which the Project is located. The term “Real
Property Taxes” shall also include any tax, fee, levy, assessment or charge, or any increase
therein: (i) imposed by reason of events occurring during the term of this Lease, including but
not limited to, a change in the ownership of the Project, (ii) a change in the Improvements
thereon, and/or (iii) levied or assessed on machinery or equipment provided by Lessor to Lessee
pursuant to this Lease.

          (b) “Base Real Property Taxes.” As used herein, the term “Base Real Property Taxes” shall be
the amount of Real Property Taxes, which are assessed against the Premises, Building, Project or
Common Areas in the calendar year during which the Lease is executed. In calculating Real Property
Taxes for any calendar year, the Real Property Taxes for any real estate tax year shall be
included in the calculation of Real Property Taxes for such calendar year based upon the number of
days which such calendar year and tax year have In common.

     10.2 Payment of Taxes. Except as otherwise provided in Paragraph 10.3, Lessor shall pay the
Real Property Taxes applicable to the Project, and said payments shall be included in the
calculation of Common Area Operating Expenses in accordance with the provisions of Paragraph 4.2.

     10.3 Additional Improvements. Common Area Operating Expenses shall not include Real Property
Taxes specified in the taxassessor’s records and work sheets as being caused by additional
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exclusive enjoyment of such other lessees. Notwithstanding Paragraph 10.2 hereof, Lessee shall,
however, pay to Lessor at the time Common Area Operating Expenses are payable under Paragraph 4.2,
the entirety of any increase in Real Property Taxes if assessed solely by reason of Alterations,
Trade Fixtures or Utility Installations placed upon the Premises by Lessee or at Lessee’s request
or by reason of any alterations or improvements to the Premises made by Lessor subsequent to the
execution of this Lease by the Parties.

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

     10.5 Personal Property Taxes. Lessee shall pay prior to delinquency all taxes assessed
against and levied upon Lessee Owned Alterations and Utility Installations, Trade Fixtures,
furnishings, equipment and all personal property of Lessee contained in the Premises. When
possible. Lessee shall cause its Lessee Owned Alterations and Utility Installations, Trade
Fixtures, furnishings, equipment and all other personal property to be assessed and billed
separately from the real property of Lessor. If any of Lessee’s said property shall be assessed
with Lessor’s real property, Lessee shall pay Lessor the taxes attributable to Lessee’s property
within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee’s
property.

11. Utilities and Services. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the Premises, together with
any taxes thereon. Notwithstanding the provisions of Paragraph 4.2, if at any time in Lessor’s
sole judgment, Lessor determines that Lessee is using a disproportionate amount of water,
electricity or other commonly metered utilities, or that Lessee is generating such a large volume
of trash as to require an increase in the size of the trash receptacle and/or an increase in the
number of times per month that it is emptied, then Lessor may increase Lessee’s Base Rent by an
amount equal to such increased costs. 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.:flit

     12.1 Lessor’s Consent Required.

          (a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or
encumber (collectively, “assign or assignment”) sublet all or any part of Lessee’s interest in
this Lease or in the Premises without Lessor’s prior written consent. Such consent shall not
unreasonably withheld or delayed.

          (b) Unless Lessee is a corporation and its stock is publicly traded on a national stock
exchange, a change in the control of Lesseeshall constitute an assignment requiring consent.
The-transfer, on-a-cumulative-basis, of 25%-or-more-of-the voting-control-of Lessee-shall
constitute a change in-control-for this purpose.

          (c) The involvement of Lessee or its assets in any transaction, or series of transactions (by
way of merger, sale, acquisition,financing, transfer, leveraged buy-out or otherwise), whether or
not a formal assignment or hypothecation of this Lease or Lessee’s assets occurs, which results or
will result in a reduction of the Net Worth of Lessee by an amount greater than 25% of such Net
Worth as it was represented at the time of the execution of this Lease or at the time of the most
recent assignment to which Lessor has consented, or as it exists immediately prior to said
transaction or transactions constituting such reduction, whichever was or is greater, shall be
considered an assignment of this Lease to which Lessor may withhold its consent. “Net Worth of
Lessee” shall mean the net worth of Lessee (excluding any guarantors) established under generally
accepted accounting principles.

          (d) An assignment or subletting without consent shall, at Lessor’s option, be a Default
curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any
notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a
noncurable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon 30 days written
notice, increase the monthly Base Rent to 110% of the Base Rent then in effect. Further, in the
event of such Breach and rental adjustment, (i) the purchase price of any option to purchase the
Premises held by Lessee shall be subject to similar adjustment to 110% of the price previously in
effect, and (ii) all fixed and non-fixed rental adjustments scheduled during the remainder of the
Lease term shall be increased to 110% of the scheduled adjusted rent.

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

          (f) Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee
is in Default at the time consent is requested.

          (g) Notwithstanding the foregoing, allowing a diminimus portion of the Premises, ie. 20
square feet or less, to be used by a thirdparty vendor in connection with the installation of a
vending machine or payphone shall not constitute a subletting.

12.2 Terms and Conditions Applicable to Assignment and Subletting.

          (a) Regardless of Lessor’s consent, no assignment or subletting shall : (i) be effective
without the express written assumption by such assignee or sublessee of the obligations of Lessee
under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Rent or for the performance of any other obligations to be
performed by Lessee.

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

          (c) Lessor’s consent to any assignment or subletting shall not constitute a consent to any
subsequent assignment or subletting.

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

          (e) Each request for consent to an assignment or subletting shall be in writing, accompanied
by information relevant to Lessor’s determination as to the financial and operational
responsibility and appropriateness of the proposed assignee or sublessee, including but not
limited to the intended use and/or required modification of the Premises, If any, together with a
fee of $500 as consideration for Lessor’s considering and processing said request. Lessee agrees
to provide Lessor with such other or additional information and/or documentation as may be
reasonably requested. (See also Paragraph 36)

          (f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such
assignment, entering into such sublease, or entering into possession of the Premises or any
portion thereof, be deemed to have assumed and agreed to conform and comply with each and every
term, covenant, condition and obligation herein to be observed or performed by Lessee during the
term of said assignment or sublease, other than such obligations as are contrary to or
inconsistent with provisions of an assignment or sublease to which Lessor has specifically
consented to in writing.

          (g) Lessor’s consent to any assignment or subletting shall not transfer to the assignee or
sublessee any Option granted to the original Lessee by this Lease unless such transfer is
specifically consented to by Lessor in writing. (See Paragraph 39.2)

     12.3 Additional Terms and Conditions Applicable to Subletting. The following terms and
conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be
deemed included in all subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent payable on
any sublease, and Lessor may

	 	 	 	 	 	 	 	 	 	 	 
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collect such Rent and apply same toward Lessee’s obligations under this Lease; provided, however,
that until a Breach shall occur in the performance of Lessee’s obligations, Lessee may collect
said Rent. In the event that the amount collected by Lessor exceeds Lessee’s then outstanding
obligations any such excess shall be refunded to Lessee. Lessor shall not, by reason of the
foregoing or any assignment of such sublease, nor by reason of the collection of Rent. be deemed
liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee’s
obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor stating that a Breach exists In the
performance of Lessee’s obligations under this Lease, to pay to Lessor all Rent due and to become
due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall pay all
Rents to Lessor without any obligation or right to inquire as to whether such Breach exists,
notwithstanding any claim from Lessee to the contrary.

          (b) In the event of a Breach by Lessee, Lessor may, at its option, require sublessee to
attorn to Lessor, in which event Lessor shall undertake the obligations of the sublessor under
such sublease from the time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by
such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor.

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

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

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

13. Default; Breach; Remedies.

     13.1 Default; Breach. A “Default” is defined as a failure by the Lessee to comply with or
perform any of the terms, covenants, conditions or Rules and Regulations under this Lease. A
“Breach” is defined as the occurrence of one or more of the following Defaults, and the failure of
Lessee to cure such Default within any applicable grace period:

          (a) The abandonment of the Premises; or the vacating of the Premises without providing a
commercially reasonable level of security, or where the coverage of the property insurance
described in Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable
assurances to minimize potential vandalism.

          (b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be
made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable
evidence of insurance or surety bond, or to fulfill any obligation under this Lease which
endangers or threatens life or property, where such failure continues for a period of 3 business
days following written notice to Lessee.

          (c) The commission of waste, act or acts constituting public or private nuisance, and/or an
illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business
days following written notice to Lessee.

          (d) The failure by Lessee to provide (i) reasonable written evidence of compliance with
Applicable Requirements, (ii) the service contracts, (Hi) the rescission of an unauthorized
assignment or subletting, (iv) an Estoppel Certificate, (v) a requested subordination, (vi)
evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph
41, (viii) material data safety sheets (MSDS), or (ix) any other documentation or information
which Lessor may reasonably require of Lessee under the terms of this Lease, where any such
failure continues for a period of 10 days following written notice to Lessee.

          (e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease,
or of the rules adopted under Paragraph 2.9 hereof, other than those described in subparagraphs
13.1(a), (b), (c) or (d), above. where such Default continues for a period of 30 days after
written notice; provided, however, that if the nature of Lessee’s Default is such that more than
30 days are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee
commences such cure withinsaid 30 day period and thereafter diligently prosecutes such cure
to completion.

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

          (f) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor
was materially false.

          (g) If the performance of Lessee’s obligations under this Lease is guaranteed: (i) the death
of a Guarantor, (ii) the termination of a Guarantor’s liability with respect to this Lease other
than in accordance with the terms of such guaranty, (iii) a Guarantor’s becoming insolvent or the
subject of a bankruptcy filing. (iv) a Guarantor’s refusal to honor the guaranty, or (v) a
Guarantor’s breach of its guaranty obligation on an anticipatory basis, and Lessee’s failure,
within 60 days following written notice of any such event, to provide written alternative
assurance or security, which, when coupled with the then existing resources of Lessee, equals or
exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of
execution of this Lease.

     13.2 Remedies. If Lessee fails to perform any of its affirmative duties or obligations,
within 10 days after written notice (or in case of an emergency, without notice), Lessor may, at
its option, perform such duty or obligation on Lessee’s behalf, including but not limited to the
obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or
approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and expenses incurred by
Lessor in such performance upon receipt of an invoice therefor. In the event of a Breach. Lessor
may, with or without further notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason of such Breach:

          (a) Terminate Lessee’s right to possession of the Premises by any lawful means. in which case this
Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such event
Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned at the
time of termination; (H) the worth at the time of award of the amount by which the unpaid rent
which would have been earned after termination until the time of award exceeds the amount of such
rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the time
of award of the amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided;
and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused
by the Lessee’s failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including but not limited to the cost of
recovering possession of the Premises, expenses of reletting, including necessary renovation and
alteration of the Premises, reasonable attorneys’ fees. and that portion of any leasing commission
paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The
worth at the time of award of the amount referred to in provision (iii) of the immediately
preceding sentence shall be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of the District within which the Premises are located at the time of award
plus one percent. Efforts by Lessor to mitigate damages caused by Lessee’s Breach of this Lease
shall not waive Lessor’s right to recover damages under Paragraph 12. If termination of this Lease
is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to
recover in such proceeding any unpaid Rent and damages as are recoverable therein. or Lessor may
reserve the right to recover all or any part thereof in a separate suit. If a notice and grace
period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit or to
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given to Lessee under the unlawful detainer statute shall also constitute the notice required
by Paragraph 13.1. In such case, the applicable grace
period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the
failure of Lessee to cure the Default within the
greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of
this Lease entitling Lessor to the remedies provided for
in this Lease and/or by said statute.

          (b) Continue the Lease and Lessee’s right to possession and recover the Rent as it becomes
due, in which event Lessee may sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to
relet, and/or the appointment of a receiver to protect the Lessor’s interests, shall not constitute a termination of the Lessee’s right to possession.

          (c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of
the state wherein the Premises are located. The expiration or termination of this Lease and/or the
termination of Lessee’s right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to matters occurring or accruing during the term
hereof or by reason of Lessee’s occupancy of the Premises,

     13.3 Inducement Recapture. Any agreement for free or abated rent or other charges, or for the
giving or paying by Lessor to or for Lessee of any cash or other bonus. inducement or consideration for Lessee’s entering into this
Lease, all of which concessions are hereinafter referred to as “Inducement Provisions”, shall be deemed conditioned upon Lessee’s full and faithful
performance of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any such Inducement Provision shall
automatically be deemed deleted from this Lease and of no further force or effect. and any rent, other charge, bonus, inducement or consideration
theretofore abated, given or paid by Lessor under such an Inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding
any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this
paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance.

     13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which will be extremely difficult to
ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed upon Lessor by any Lender.
Accordingly, if any Rent shall not be received by Lessor within 5 days after such amount shall be due, then. without any requirement for notice to
Lessee, Lessee shall immediately pay to Lessor a one-time l ate charge equal to 10% of each such overdue amount or $100, whichever is greater. The parties
hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such late payment.
Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee’s Default or Breach with respect to such overdue amount, nor
prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not
collected. for 3 consecutive installments of Base Rent. then notwithstanding any provision of this Lease to the contrary, Base Rent shall. at
Lessor‘s option, become due and payable quarterly in advance.

     13.5 Interest. Any monetary payment due Lessor hereunder, other than late charges, not
received by Lessor, when due as to scheduled payments (such as Base Rent) or within 30 days following the date on which it was
due for non-scheduled payment, shall bear Interest from the date when due, as to scheduled payments, or the 31st day after it was due as to
non-scheduled payments. The interest (“Interest”) charged shall be computed at the rate of 10% per annum but shall not exceed the maximum rate allowed by law.
Interest is payable in addition to the potential late charge provided for in Paragraph 13.4.

     13.6 Breach by Lessor.

          (a) Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails
within a reasonable time to perform an obligation required to be performed by Lessor. For purposes of this Paragraph, a reasonable
time shall in no event be less than 30 days after receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in
writing for such purpose, of written notice specifying wherein such obligation of Lessor has not been performed: provided, however, that if the
nature of Lessor’s obligation is such that more than 30 days are reasonably required for its performance, then Lessor shall not be in breach if performance
is commenced within such 30 day period and thereafter diligently pursued to completion.

          (b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender
cures said breach within 30 days after receipt of said notice, or if having commenced said cure they do not diligently pursue
it to completion, then Lessee may elect to cure said breach at Lessee’s expense and offset from Rent the actual and reasonable cost to perform such cure,
provided however, that such offset shall not exceed an amount equal to the greater of one month’s Base Rent or the Security Deposit, reserving
Lessee’s right to reimbursement from Lessor for any such expense in excess of such offset. Lessee shall document the cost of said cure and supply said
documentation to Lessor.

14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent
domain or sold under the threat of the exercise
of said power (collectively “Condemnation”), this Lease shall terminate as to the part taken as of
the date the condemning authority takes title or
possession, whichever first occurs. If more than 10% of the floor area of the Unit, or more than
25% of Lessee’s Reserved Parking Spaces, is taken by
Condemnation, Lessee may, at Lessee’s option, to be exercised in writing within 10 days after
Lessor shall have given Lessee written notice of such
taking (or In the absence of such notice, within 10 days after the condemning authority shall have
taken possession) terminate this Lease as of the date
the condemning aulhonty takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in
full force and effect as to the portion of the Premises remaining, except that the Base Rent shall
be reduced in proportion to the reduction in utility of the
Premises caused by such Condemnation. Condemnation awards and/or payments shall be the property of
Lessor, whether such award shall be made
as compensation for diminution in value of the leasehold, the value of the part taken, or for
severance damages: provided, however, that Lessee shall
be entitled to any compensation for Lessee’s relocation expenses, loss of business goodwill and/or
Trade Fixtures, without regard to whether or not this
Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility
Installations made to the Premises by Lessee, for purposes
of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled
to any and all compensation which is payable
therefor. In the event that this Lease is not terminated by reason of the Condemnation. Lessor
shall repair any damage to the Premises caused by
such Condemnation.

15. Brokerage Fees.

     15.1 Additional Commission. In addition to the payments owed pursuant to Paragraph 1.10 above,
and unless Lessor and the Brokers otherwise agree in writing Lessor agrees that: (a) if Lessee
exercises any Option, (b) if Lessee acquires from Lessor any rights to the Premises or
other premises owned by Lessor and located within the Project, (c) if Lessee remains in
possession of the Premises. with the consent of Lessor, after the expiration of this Lease, or (d) if Base Rent is increased, whether by agreement or
operation of an escalation clause herein, then, Lessor shall pay Brokers a fee in accordance with the schedule of the Brokers in effect at the time of the
execution of this Lease.

     15.2 Assumption of Obligations. Any buyer or transferee of Lessor’s Interest in this Lease
shall be deemed to have assumed Lessor’s obligation hereunder. Brokers shall be third party
beneficiaries of the provisions of Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to
Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such amounts
shall accrue Interest. In addition, if Lessor fails to pay any amounts to Lessee’s Broker when due, Lessee’s Broker may send written notice to Lessor
and Lessee of such failure and if Lessor fails to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and
offset such amounts against Rent. In addition, Lessee’s Broker shall be deemed to be a third party
beneficiary of any commission agreement entered into by and/or between Lessor and Lessor’s Broker
for the limited purpose of collecting any brokerage fee owed.

     15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent
and warran the other that it has had no dealings with any person. firm, broker or finder (other than the Brokers, if any)
in connection with this Lease, and that no one other than said

	 	 	 	 	 
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named Brokers is entitled to any commission or finder’s fee in connection herewith. Lessee and
Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may
be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including
any costs, expenses, attorneys’ fees reasonably incurred with respect thereto.

16. Estoppel Certificates.

          (a) Each Party (as “Responding Party”) shall within 10 days after written notice from the
other Party (the “Requesting Party”) execute, acknowledge and deliver to the Requesting Party a statement in writing in form
similar to the then most current “Estoppel Certificate” form published by the AIR Commercial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested by the Requesting Party.

          (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within
such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that: (i) the Lease is in full force and effect
without modification except as may be represented by the Requesting Party, (ii) there are no uncured defaults in the Requesting Party’s performance.
and (Hi) if Lessor is the Requesting Party, not more than one month’s rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon
the Requesting Party’s Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said
Certificate.

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

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

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

19. Days. Unless otherwise specifically indicated to the contrary, the word “days” as used in this
Lease shall mean and refer to calendar days.

20. Limitation on Liability. The obligations of Lessor under this Lease shall not constitute
personal obligations of Lessor, or its partners,
members, directors, officers or shareholders, and Lessee shall look to the Premises, and to no
other assets of Lessor, for the satisfaction of any liability
of Lessor with respect to this Lease. and shall not seek recourse against Lessor’s partners,
members, directors, officers or shareholders, or any of their personal assets for such satisfaction.

     21. Time of Essence. Time is of the essence with respect to the performance of all obligations to
be performed or observed by the Parties under this Lease.

22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the
Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective, Lessor and Lessee each represents and
warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility
of the other Party to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Party. The liability (including court
costs and attorneys’ fees), of any Broker with respect to negotiation, execution, delivery or performance by either Lessor or Lessee under this Lease or any
amendment or modification hereto shall be limited to an amount up to the fee received by such Broker pursuant to this Lease; provided, however, that the
foregoing limitation on each Broker’s liability shall not be applicable to any gross negligence or willful misconduct of such Broker.

23. Notices.

     23.1 Notice Requirements. All notices required or permitted by this Lease or applicable law
shall be in writing and may be delivered in person (by hand or by courier) or may be sent by
regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or
by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified
in this Paragraph 23. The addresses noted adjacent to a Party’s signature on this Lease shall be
that Party’s address for delivery or mailing of notices. Either Party may by written notice to the
other specify a different address for notice. except that upon Lessee’s taking possession of the
Premises, the Premises shall constitute Lessee’s address for notice. A copy of all notices to Lessor shall be concurrently transmitted to such party or parties at
such addresses as Lessor may from time to time hereafter designate in writing.

     23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of
delivery shown on the receipt card. or if no delivery date is shown, the postmark thereon. If
sent by regular mail the notice shall be deemed given 72 hours after the same is addressed as required herein and mailed with postage prepaid. Notices
delivered by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed given 24 hours after delivery of the
same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone
confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is
also delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal holiday,
it shall be deemed received on the next business day.

     24. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant or condition
hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of
the same or of any other term, covenant or condition hereof. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor’s consent to, or approval of, any subsequent or similar act by Lessee, or be
construed as the basis of an estoppel to enforce the provision or provisions of this Lease
requiring such consent. The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee.
Any payment by Lessee may be accepted by Lessor on account of monies or damages due Lessor, notwithstanding any qualifying statements or
conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless
specifically agreed to in writing by Lessor at or before the time
of deposit of such payment.

     25. Disclosures Regarding The Nature of a Real Estate Agency Relationship.

          (a) When entering into a discussion with a real estate agent regarding a real estate
transaction, a Lessor or Lessee should from the outset understand what type of agency relationship or representation it has with the agent or
agents in the transaction. Lessor and Lessee acknowledge being advised by the Brokers in this transaction, as follows:

               (i) Lessor’s Agent. A Lessor’s agent under a listing agreement with the Lessor acts as
the agent for the Lessor only. A Lessor’s agent or subagent has the following affirmative obligations: To the Lessor: A
fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessor. To the Lessee and the Lessor: a. Diligent exercise of
reasonable skills and care in performance of the agent’s duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the
agent materially affecting the value or desirability of the properly that are not known to. or within the diligent attention and observation of, the
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confidential information obtained from the other Party which does not involve the affirmative
duties set forth above.

               (ii) Lessee’s Agent. An agent can agree to act as agent for the Lessee only. In these
situations, the agent is not the Lessor’s agent. even if by agreement the agent may receive compensation for services
rendered, either in full or in part from the Lessor. An agent acting only for a Lessee has the following affirmative obligations. To the Lessee: A
fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the Lessor: a. Diligent exercise of
reasonable skills and care in performance of the agent’s duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the
agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the
Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative
duties set forth above.

               (iii) Agent Representing Both Lessor and Lessee. A real estate agent, either acting
directly or through one or more associate licenses, can legally be the agent of both the Lessor
and the Lessee in a transaction, but only with the knowledge and consent of both the Lessor and
the Lessee. In a dual agency situation, the agent has the following affirmative obligations
to both the Lessor and the Lessee: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Lessor or the Lessee.
b. Other duties to the Lessor and the Lessee as stated above in subparagraphs (I) or (ii). In representing both Lessor and Lessee, the agent may not
without the express permission of the respective Party, disclose to the other Party that the
Lessor will accept rent in an amount less than that indicated in the listing or that the Lessee is
willing to pay a higher rent than that offered. The above duties of the agent in a real estate transaction do not
relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and
Lessee should carefully read all agreements to assure that they adequately express their
understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice
is desired, consult a competent professional.

          (b) Brokers have no responsibility with respect to any default or breach hereof by either
Party. The Parties agree that no lawsuit or other legal proceeding involving any breach of duty. error or omission relating to this Lease
may be brought against Broker more than one year after the Start Date and that the liability
(including court costs and attorneys’ fees), of any Broker with respect to any such lawsuit and/or
legal proceeding shall not exceed the fee received by such Broker pursuant to this Lease; provided, however, that
the foregoing limitation on each Broker’s liability shall not be applicable to any gross
negligence or willful misconduct of such Broker.

          (c) Buyer and Seller agree to identify to Brokers as “Confidential” any communication or
information given Brokers that is considered by such Party to be confidential,

26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part
thereof beyond the expiration or termination of
this Lease. In the event that Lessee holds over, then the Base Rent shall be increased to 150% of
the Base Rent applicable immediately preceding the
expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any
holding over by Lessee.

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

28. Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be
observed or performed by Lessee are both covenants and conditions. In construing this Lease, all headings and titles are for the
convenience of the Parties only and shall not be considered a part of this Lease. Whenever required by the context, the singular shall include the plural and
vice versa. This Lease shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both
Parties had prepared it.

29. Binding Effect; Choice of Law. This Lease shall be binding upon the parties, their personal
representatives, successors and assigns and be governed by the laws of the State in which the Premises are located. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the county in which the Premises are located.

30. Subordination; Attornment; Non-Disturbance.

     30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate
to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, “Security Device”), now or
hereafter placed upon the Premises, to any and all advances made on the security thereof, and to
all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such
Security Devices (in this Lease together referred to as “Lender”) shall have no liability or obligation to
perform any of the obligations of Lessor under this Lease. Any Lender may elect to have this Lease and/or any Option granted hereby superior to the lien of
its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such Security Device,
notwithstanding the relative dates of the documentation or recordation thereof.

     30.2 Attornment. In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure
or termination of a Security Devise to which this Lease is subordinated (i) Lessee shall,
subject to the non-disturbance provisions of Paragraph 30.3, attorn to such new owner, and upon request, enter into a new lease, containing all of the
terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or. at the election of the new owner, this Lease will
automatically become a new lease between Lessee and such new owner, and (ii) Lessor shall
thereafter be relieved of any further obligations hereunder and such new owner shall assume all of
Lessor’s obligations, except that such new owner shall not: (a) be liable for any act or omission of any prior
lessor or with respect to events occurring prior to acquisition of ownership; (b) be subject to
any offsets or defenses which Lessee might have against any prior lessor. (c) be bound by
prepayment of more than one month’s rent, or (d) be liable for the return of any security deposit
paid to any prior lessor.

     30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor after the
execution of this Lease, Lessee’s subordination of this Lease shall be subject to receiving a commercially reasonable
non-disturbance agreement (a “Non-Disturbance Agreement”) from the Lender which Non-Disturbance Agreement provides that Lessee’s possession of the
Premises, and this Lease, including any options to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns
to the record owner of the Premises. Further, within 60 days after the execution of this Lease, Lessor shall use its commercially reasonable efforts
to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event that Lessor
is unable to provide the Non-Disturbance Agreement within said 60 days, then Lessee may, at
Lessee’s option, directly contact Lender and attempt to negotiate for the execution and delivery
of a Non-Disturbance Agreement.

     30.4 Self-Executing. The agreements contained in this Paragraph 30 shall be effective without
the execution of any further documents; provided, however, that, upon written request from Lessor
or a Lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor
shall execute such further writings as may be reasonably required to separately document any
subordination. attornment and/or Non-Disturbance Agreement provided for herein.

31. Attorneys’ Fees. If any Party or Broker brings an action or proceeding involving the Premises
whether founded in tort, contract or equity, or
to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding,
action, or appeal thereon, shall be entitled to reasonable attorneys’ fees. Such fees may be
awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding
is pursued to
decision or judgment. The term, “Prevailing Party" shall include, without limitation, a
Party or Broker who substantially obtains or defeats the relief
sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the
other Party or Broker of its claim or defense.
The attorneys‘ fees award shall not be computed in accordance with any court fee
schedule, but shall be such as to fully reimburse all attorneys‘ fees reasonably
incurred. In addition, Lessor shall be entitled to attorneys’ fees, costs and expenses incurred in
the preparation and service of notices of
Default and consultations in connection therewith, whether or not a legal action is subsequently
commenced in connection with such Default or resulting
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32. Lessor’s Access; Showing Premises; Repairs. Showing Premises; Repairs. Lessor and Lessor’s agents
shall have the right to enter the Premises at any time, in the case of an emergency, and
otherwise at reasonable times after reasonable prior notice for the purpose of showing the
same to prospective purchasers, lenders, or tenants, and making such alterations, repairs,
improvements or additions to the Premises as Lessor may deem necessary or desirable and the
erecting, using and maintaining of utilities, services, pipes and conduits through the Premises
and/or other
premises as long as there is no material adverse effect on Lessee’s use of the Premises. All such
activities shall be without abatement of rent or
liability to Lessee.

33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises
without Lessor’s prior written consent.
Lessor shall not be obligated to exercise any standard of reasonableness in determining whether
to permit an auction.

34. Signs. Lessor may place on the Premises ordinary “For Sale” signs at any time and ordinary
“For Lease” signs during the last 6 months of
the term hereof. Except for ordinary “For Sublease” signs which may be placed only on the
Premises, Lessee shall not place any sign upon the Project
without Lessor’s prior written consent. All signs must comply with all Applicable Requirements.

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

36. Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party
is required to an act by or for the other Party, such consent shall not be unreasonably withheld
or delayed. Lessor’s actual reasonable costs and expenses (including but not limited to
architects’, attorneys’, engineers’ and other consultants’ fees) incurred in the consideration
of, or response to. a request by Lessee for any Lessor consent,
including but riot limited to consents to an assignment, a subletting or the presence or use of a
Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting
documentation therefor. Lessor’s consent to any act, assignment or subletting shall not
constitute an
acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent
be deemed a waiver of any then existing Default or Breach, except as may be otherwise
specifically stated in writing by Lessor at the time of such consent. The failure to specify
herein any particular condition to Lessor’s consent shall not preclude the imposition by Lessor
at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being given. In the event
that either Party disagrees with any determination
made by the other hereunder and reasonably requests the reasons for such determination, the
determining party shall furnish its reasons in writing and
in reasonable detail within 10 business days following such request.

37. Guarantor.

     37.1 Execution. The Guarantors, if any, shall each execute a guaranty in the form most
recently published by the AIR Commercial Real Estate Association,.

     37.2 Default. It shall constitute a Default of the Lessee if any Guarantor fails or refuses,
upon request to provide: (a) evidence of the execution of the guaranty, including the authority
of the party signing on Guarantor’s behalf to obligate Guarantor, and in the case of a corporate
Guarantor, a certified copy of a resolution of its board of directors authorizing the making of
such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still in effect.

38. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the
covenants, conditions and provisions on
Lessee’s part to be observed and performed under this Lease, Lessee shall have quiet possession
and quiet enjoyment of the Premises during the term hereof.

39. Options. If Lessee is granted an option, as defined below, then the following provisions
shall apply. SEE ADDENDUM TO LEASE

     39.1 Definition. “Option” shall mean: (a) the right to extend the term of or renew this
Lease. or to-extend-or-renew-any lease-that we see on-other-property-of-Lessor; (b)-the right of-first-refusal-or first
offer-to-lease-either-the- Premises-or-other-property- of Lessors-(c) the-right-to purchase or
the right of first refusal-to-purchase the-Premise or-other-property-of Lessor.

     39.2 Options Personal To Original Lessee. Any Option granted to Lessee in this Lease is
personal to the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only while the original
Lessee is in full possession of the Premises and, if requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting.

     39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be
exercised unless the prior Options have been validly exercised.

     39.4 Effect of Default on Options.

          (a) Lessee shall have no right to exercise an Option: (i) during the period commencing with
the giving of any notice of Default and continuing until said Default is cured, (ii) during the
period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii)
during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been
given 3 or more notices of separate Default, whether or not
the Defaults are cured, during the 12 month period immediately preceding the exercise of the
Option.

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

          (c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee’s
due and timely exercise of the Option, if, after such exercise and prior to the commencement of the
extended term or completion of the purchase, (i) Lessee fails to pay Rent for a period of 30
days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or
(ii) if Lessee commits a Breach of this Lease.

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

41. Reservations. Lessor reserves the right: (i) to grant, without the consent or joinder of
Lessee, such easements, rights and dedications that Lessor deems necessary, (ii) to cause the
recordation of parcel maps and restrictions, and (iii) to create and/or install new utility
raceways, so long as
such easements, rights, dedications, maps, restrictions, and utility raceways do not unreasonably
interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably
requested by Lessor to effectuate such rights.

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. A Party who
does not initiate suit for the recovery of sums paid
“under protest” within 6 months shall be deemed to have waived its right to protest such payment.

43. Authority.: Multiple Parties; Execution.

          (a) If either Party hereto is a corporation, trust, limited liability company, partnership, or
similar entity, each individual executing this Lease on behalf of such entity represents and
warrants that he or she is duly authorized to execute and deliver this Lease on its behalf. Each
Party shall, within 30 days after request, deliver to the other Party satisfactory evidence of such
authority.

	 	 	 	 	 
	/ MF/

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          (b) If this Lease is executed by more than one person or entity as “Lessee”, each such person
or entity shall be jointly and severally liable hereunder. It is agreed that any one of the named
Lessees shall he empowered to execute any amendment to this Lease, or other document ancillary
thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named
Lessees had executed such document.

          (c) This Lease may be executed by the Parties in counterparts, each of which shall be deemed
an original and all of which together shall constitute one and the same instrument.

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

45. Offer. Preparation of this Lease by either party or their agent and submission of same to the
other Party shall not be deemed an offer to
lease to the other Party. This Lease is not intended to be binding until executed and delivered by
all Parties hereto.

46. Amendments. This Lease may be modified only in writing, signed by the Parties in interest at
the time of the modification. As long as they
do not materially change Lessee’s obligations hereunder, Lessee agrees to make such reasonable
non-monetary modifications to this Lease as may be reasonably required by a Lender in connection
with the obtaining of normal financing or refinancing of the Premises.

47. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.

48. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation and/or the
Arbitration of all disputes between the Parties
and/or Brokers arising out of this Lease · is Ris not attached to this Lease.

49. Americans with Disabilities Act. Since compliance with the Americans with Disabilities Act
(ADA) is dependent upon Lessee’s specific use
of the Premises, Lessor makes no warranty or representation as to whether or not the Premises
comply with ADA or any similar legislation. In the
event that Lessee’s use of the Premises requires modifications or additions to the Premises in
order to be in ADA compliance, Lessee agrees to make
any such necessary modifications and/or additions at Lessee’s expense.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED
HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES
HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE
ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS
LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:

1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID
INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,
THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE
WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED
USE. WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE
LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED.
 

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

	 	 	 	 	 	 	 
	Executed at: Upland, California

	 	 	 	Executed Calrsbad	 	 
	On: 5-20-05

	 	 	 	On: May 18, 2005	 	 
	 
	 	 	 	 	 	 
	By LESSOR:

	 	 	 	By LESSEE::	 	 
	Scheu and Scheu

	 	 	 	Southwest Community Bank	 	 
	 

	 	 	 	a California a Banking Coporation	 	 
	By: /Mary Lou Flowers/

	 	 	 	By: /Frank J. Mercardante/	 	 
	 	 	 
	Name Printed: Mary Lou Flowers	 	Name Frank J. Mercardante	 	 
	 
	 	 	 	 	 	 
	Title: Authorized Agent for Lessor	 	Title: Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	By:

	 	 

	 	By:	 	 
	Name Printed:

	 	 

	 	Name Printed:
	 	Stuart McFarland
	Title:

	 	 

	 	Title:
	 	Chief Operating Officer
	 
	 	 	 	 	 	 
	Address:

	 	P.O. Box 250
	 	Address:
	 	5810 ElCamino Real
	 

	 	Upland, Ca 91785
	 	 	 	Suite D
	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	 	 	Carlsbad, Ca 92008
	 

	 	 	 	 	 	 
	Telephone

	 	(909) 982-8933
	 	Telephone:
	 	(760) 918-2612
	Facsimile : (909) 982-7943

	 	 	 	Facsimile:       ( )	 	 
	Federal ID No

	 	 	 	Federal ID No.	 	 
	 	 	 	 	 

	 	 	 	 	 
	/ MF/

	 	PAGE 16 of 17
	 	/MJF/
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
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	Broker:

	 	Broker:
	Delmar Commercial. Real Estate Services, Inc.

	 	Delmar Commercial Real Estate Services, Inc.
	 
	 	 
	 

	 	 
	Att: Steve Wheatley

	 	Alt: Robert Jimenez
	Title:

	 	Title:
	 

	 	 

	Address: 10300 Fourth Street, Suite 100

	 	Address: 10300 Fourth Street, Suite 100
	Rancho Cucamonga, CA 91730

	 	Rancho Cucamonga, CA91730
	Telephone: (909) 945-4589

	 	Telephone: (909 ) 945-4598
	Facsimile: (909 ) 989-8987

	 	Facsimile: (909 ) 989-8987
	Federal ID No

	 	Federal Id No:
	 

	 	 

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

© Copyright 1998 By AIR Commercial Real Estate Association.

All rights reserved.

No part of these works may be reproduced in any from with out permission in writing.

	 	 	 	 	 
	/ MF/

	 	PAGE 17 of 17
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ADDENDUM TO LEASE AGREEMENT

BY AND BETWEEN

SCHEU and SCHEU AS LESSOR,

AND

SOUTHWEST COMMUNITY BANK AS LESSEE

DATED MAY 13, 2005

	50.	 	White Oak Corporate Center Rules and Regulations, Exhibit “A” attached hereto, shall be
incorporated into this Lease, and each of its provisions shall be deemed both a covenant and a
condition.

	51.	 	Subject to the provisions of Paragraph 6. Use, Lessee shall have the sole responsibility to
secure any and all governmental approvals relating to Lessee‘s use of the Premises,
including, but not necessarily limited to, a Certificate of Occupancy and/or Business License issued by the City of Rancho Cucamonga. Lessee shall
secure approvals as soon as reasonably possible and hold Lessor harmless from any costs and fees incurred in the
process, and from any fines or penalties arising from Lessee’s non-conformance with applicable
laws or regulations,

	52.	 	All payments and correspondence to Lessor will be made to Scheu and Scheu, P.O. Box 250,
Upland, CA 91785, until further notice provided for herein above in Paragraph 23.

	53.	 	Sign Installation: A sign shall he installed at Lessee’s expense in accordance with the
Uniform Sign Code established for the premises. Lessee shall not place, or permit to be placed, any sign,
marquee or awning on any part of the Premises, or so affixed to the Premises without written consent of Lessor: Lessee,
upon request of Lessor, shall immediately remove any sign or decoration which Lessee has
placed or permitted to be placed in, on or about the exterior of the Premises, or which may
be visible from the exterior of the Premises, which in the opinion of Lessor is objectionable
or offensive, or otherwise incompatible with the signing standards of the building of which
the Premises are a part and adjacent buildings and improvements of the Lessor. And, if Lessee
fails to remove said objectionable, offensive or incompatible sign on demand of Lessor,
Lessor may enter said Premises and remove the same. Upon written consent by Lessor to erect
sign, such sign must be placed within the area so designated for sign, and such sign must
comply with the format and standards outlined by Lessor. A copy of the sign format and
standard is available from Lessor. A sign described in the “Sign Criteria and Approval Form”
shall be installed upon the leased Premises in the described proper manner within 45 days of
Occupancy of the premises and at the sole cost of Lessee. If said sign
is not so installed, the lessor shall have the right to install a sign of Lessor’s design and
charge Lessee for all costs associated with such sign. Charges for said sign shall be payable
by Lessee within ten (10) days of presentation of billing by Lessor to Lessee. Such payment
shall be considered additional rent and shall be collectable as such. Lessee shall, at
Lessee’s termination, pay all costs to remove signage and repair damage to the building,
and/or glass, caused by removal of Lessee’s sign.
	 
	54.	 	PARKING AREAS, SERVICE AREAS AND COMMON AREAS:
	 
	 	 	The parking spaces referenced in Paragraph 1.2(b) are unreserved and as such Lessee shall not
post a sign, nor paint

the asphalt or curb, to create any exclusive parking spaces; provided, however Lessee may
designate up to four striped parking spaces at the northwest area of the premises for “20
minute parking”. No automobiles or motor vehicles shall he parked and left unattended in any
part of the common area or service yard not striped and designated for parking.
Lessee shall not store in the parking, service or common area any material,
supplies, equipment or machinery outside the Premises whether open, or in tanks, bins or
other container devices, and shall not otherwise obstruct parking, service or common area.
	 
	55.	 	MINI BLINDS:
	 
	 	 	All window coverings shall comply with the following make, model number and coloring:
To be determined.
	 
	56.	 	OUTSIDE WORK:
	 
	 	 	Except for that work that is performed by Lessee to light maintain and / or service its ATM
machine which is
permitted under this lease agreement, no work shall be permitted on the sidewalks, roofs,
streets, driveways, parking
or landscaped area. This includes, but is not limited to, assembly, construction, mechanical
work, painting, drying, layout, cleaning, or repair of goods or materials. Violation of this
paragraph shall constitute a material breach of this Lease.
	 
	57.	 	ADDITIONAL EARLY POSSESSION PROVISIONS:
	 
	 	 	Lessee understands that if Early Occupancy causes delay in the construction of any Tenant
Improvements, that such delay will not be a cause for forgiveness of any rent due. It is
further understood that any improvement of the leased Premises by the Lessee which may result
in the delay in construction of Tenant Improvements, or in the obtaining of a building permit
without prior written consent of Lessor. is hereby prohibited and shall be a material breach
of this lease.
	 
	 	 	In the event Lessee takes possession of the Premises prior to completion of building shell
construction, Lessee agrees to hold Lessor harmless from any and all claims for damages to
goods, equipment or inconvenience.
	 
	 	 	Any Early Possession being provided in this Lease shall be construed as Additional
Consideration for Lessee executing this Lease. Lessee and Lessor herein agree that said Additional Consideration for
Early Possession is equal

 

 

to the pro-rata rent due for the same period immediately following such Early Possession credit. In
the event Lessee defaults during the Term of this Lease, Lessee understands and agrees that Lessor
shall be entitled to recover this Additional Consideration as additional damages.

Except in the case of a delay caused by the Lessee, should Lessor be unable to deliver
possession of the leased
premises to Lessee by the early possession date as stated in paragraph 1.4 of the Lease
Agreement, the
Commencement Date of the lease as stated in paragraph 1.3 of the lease shall be extended the
same amount of days
from the original date of early possession to the actual date of early possession so that
Lessee receives a total of not
less than sixty (60) days of early possession without the requirement of paying the base rental
rate.

	58.	 	NON-DISCLOSURE OF RENT
	 
	 	 	Except as may be required by applicable laws, rules or regulations which may from time he
applicable to Lessee, at no time during the term of this Lease, or any Option thereof, shall
Lessee disclose the terms and conditions of this Lease
to any third (3rd) party (i.e., any party not affiliated with Lessor or Lessee’s business)
without prior written consent of Lessor. In the event Lessee makes an unauthorized disclosure
to a third (3rd) party without prior consent of Lessor, Lessor has the right to increase
Lessee’s gross monthly rental to an amount equal to an average of the prevailing rent
of the existing tenants located in comparable space at the White Oak Corporate Center.
	 
	59.	 	ADDITIONAL INSURED:
	 
	 	 	To clarify the “Additional Insured” endorsement referred to in Paragraph 8.2(a) the words
“Managers or Lessors of Premises” shall he changed to “Landlord Parties”. “Landlord Parties”
shall be defined as the Owner/Landlord, any Lender whose loan is, secured by a lien against
the Center, the Manager, the respective affiliates, subsidiaries, successors, assigns, heirs,
officers, directors, shareholders, partners, members, employees, agents and contractors.
	 
	60.	 	WI-FI ACESS:
	 
	A.	 	Wi-Fi
	 
	 	 	Tenant shall have the right to install a wireless intranet, Internet, and
communications network (“Network”, also known as “Wi-Fi”) within the Premises for the
exclusive use of Tenant and its employees, clients and customers, subject to this Clause and
all the other applicable clauses of this lease.
	 
	B	 	No solicitation
	 
	 	 	Tenant shall not solicit, suffer or permit other tenants or occupants of the White Oak
Corporate Center to use the Network or any other communications service, including, without
limitation, any wired or wireless Internet service that passes through, is transmitted
through, or emanates from the Premises.
	 
	C	 	 Interference
	 
	 	 	Tenant agrees that Tenants communications equipment and the communications equipment of
Tenants service providers and contractors located in or about the Premises or installed in
the White Oak Corporate Center to service the Premises, including, without limitation, any
antennas, switches, or other equipment (collectively, “Tenant’s Communications Equipment”)
shall be of a type and, if applicable, a frequency that will not cause radio frequency,
electromagnetic. or other interference to any other party or any equipment of any other
party including, without limitation. Landlord, other tenants, or occupants of the White Oak
Corporate Center or any other party. In the event that Tenants Communications Equipment
causes or is believed to cause any such interference, upon receipt of notice from Landlord
of such interference. Tenants will take all steps necessary to correct and eliminate the
interference. If the interference is not eliminated within 24 hours (or a shorter period if
landlord believes a shorter period to be appropriate) then, upon request for Landlord,
Tenant shall shut down the Tenants Communications Equipment pending resolution of the
interference, with the exception of intermittent testing upon prior notice to and with the
approval of Landlord.

Arbitration

If there is a dispute between Landlord and Tenant as to any such interference, then,
and only in such event, either party may submit such dispute to expedited arbitration in
accordance with California Law, except that the chosen arbitrator(s) shall be (an)
engineer(s) having at least Five (5) years of experience in telecommunications.

Acknowledgement Tenant acknowledges that Landlord has granted and/or may grant lease rights,
licenses, and other rights to various other tenants and occupants of the White Oak
Corporate Center and to telecommunications service providers.

	61.	 	RENT ESCALATIONS:
	 
	 	 	The monthly rent will be increased each twelve (12) months as listed below:

August 1, 2006 through July 31, 2007 monthly Base Rent shall be $4,083.00

August 1, 2007 through July 31, 2008 monthly Base Rent shall be $4,205.00

August 1, 2008 through July 31, 2009 monthly Base Rent shall be $4,33I.00

August 1, 2009 through July 31, 2010 monthly Base Rent shall be $4,461.00

2 of 3

 

62. TENANT IMPROVEMENTS: LESSEE, or LESSEE’s General Contractor, Thomas G. Matliock &
Associates, at LESSEE’s cost and expense, shall construct Tenant Improvements per a space plan mutually acceptable
to Lessor and Lessee; provided, however. LESSOR shall pay to LESSEE as a “TENANT IMPROVEMENT ALLOWANCE:’ the sum of
$89,495.00 which is equal to $35.00 per square foot of space being leased by LESSEE. Any costs for Tenant
Improvements above the total amount of $35.00 per square foot shall be paid by Lessee. No construction may begin on Tenant
Improvements, including installation of ATM machine on exterior of building, prior to the completion of the building shell
and all labor and material liens are removed from title. LESSEE shall cause a “Notice of Non-Responsibility” in favor of LESSOR. to
be recorded and posted per requirements of California Mechanics Lien Laws prior to commencement of
Tenant Improvements.

63. SECTION 12 AMENDMENT: Provisions of Section 12 to the contrary notwithstanding,
Lessor’s consent shall not be required in connection with the sale or merger of Lessee in a
transaction approved by applicable Banking regulators except that any
said sale or merger which causes a material change or modification of the use clause, Section 1.8
of the lease, shall be subject to Lessor’s consent, which shall not be unreasonably withheld or
delayed.

THIS SPACE

BLANK

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EXHIBIT “A”

WHITE OAK PROFESSIONAL CENTER RULES AND REGULATIONS

	1.	 	No sign, placard, picture, advertisement, name or notice shall be inscribed, displayed,
printed, or affixed on or to any part of the outside or inside of the building without the
prior written consent of Lessor. Lessor shall have the right to remove any such sign, placard,
picture, advertisement, name or notice without notice to, and at the expense of, Lessee.
Lessee will provide approved sign at Lessee’s cost. All approved signs or lettering on doors
shall be printed, painted, affixed or inscribed at the expense of Lessee by a person approved
by Lessor. Lessee shall not place anything or allow anything to be placed near the glass of
any window, door, partition or wall which may appear unsightly from outside the Premises;
provided, however, that Lessor may furnish and install a building standard window covering at
all exterior windows. Lessee shall not, without prior written consent of Lessor, cause or
otherwise sunscreen any window.

	2.	 	The sidewalks, exits and entrances shall not be obstructed by any of the Lessees or used by
them for any purpose other than for ingress and egress from their respective Premises.

	3.	 	No storage will be allowed outside the buildings or any of the common area. This includes
supplies, materials, goods, pallets, dunnage and vehicles. All trash must be placed in trash
receptacles. Violation will be remedied at Lessee’s expense.

	4.	 	Lessee shall not alter any lock or install any new or additional locks or any bolts on any
windows of the Premises without Lessor’s prior written consent, which Lessor shall not
unreasonably withhold.

	5.	 	The bathroom toilets, urinals, wash basins and other apparatus shall not be used for any
purpose other than 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 home by the Lessee who, or whose employees
or invitees shall have caused it.

	6.	 	Lessee shall not overload the floor of the Premises or in any way deface the Premises or any
part thereof. Equipment exceeding 1,000 lb /sq. 11. must be approved by Lessor.

	7.	 	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 building. Safes or other heavy objects shall, if considered necessary
by Lessor, stand on supports of such thickness as is necessary to properly distribute weight.
Lessor will not be responsible for loss of or damage to any such safe or property from any
cause, and said damage done to the building by moving or maintaining any such safe or other
property shall be repaired at the expense of the Lessee.

	8.	 	Lessee shall not use, keep or permit to he used or kept, 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 the Lessor or other occupants of the building by reason
of excess noise, odors, and/or vibrations, or interfere in any way with other Lessees or
those having business therein, nor shall any animals or birds be brought in or kept in or
about the Premises or the building.

	9.	 	No cooking or showering shall be done, or permitted by any Lessee, on the Premises. The
Premises may not be used for any improper, objectionable, or Immoral purpose, nor shall the
space be used as a residence, living quarters, or overnight lodging. An electric coffee pot,
small refrigerator or household microwave oven may he used on the Premises, solely as a
convenience during normal business hours.

	10.	 	Lessee shall not use or keep in the Premises or the building any kerosene, gasoline or
inflammable or combustible fluid or material, or use any method of heating or air
conditioning other than that supplied by Lessor, without Lessor’s prior written consent.

	11.	 	Lessor shall have the option to direct electricians as to where and how telephone
and other wires are to be introduced. No boring or cutting for wires will be allowed without
the prior consent of the Lessor. which Lessor shall not unreasonably withhold or delay.

	12.	 	The Lessor shall in no case he liable for damages for any error with regard to the admission
to or exclusion from the building of any person. In case of invasion, mob, riot, public
excitement, or other commotion, the Lessor reserves the right to prevent access to the
building during the continuance of the same by closing of doors or otherwise, for the safety
of the Lessees and protection of property in the Premises and the building.

	13.	 	Any vending machine of any description installed, maintained or operated upon the Premises
shall he for the sole use of Lessee and its patrons and employees, and Lessee shall assume
all liability for such.

	14.	 	In the event the name and/or street address of the building, of which the Premises are a
part, is changed by either Lessor or any government agency, Lessor shall have no liability to
Lessee in connection with such.

	15.	 	Lessee shall not disturb, solicit, or canvass any occupant of the building and shall
cooperate to prevent the same.

	16.	 	Without the written consent of Lessor, Lessee shall not use the name of the building in
connection with or in promoting or advertising the business of Lessee except as Lessee’s
address.

     17. All doors in the Premises shall be kept locked when the Premises are not in use.

	18.	 	There shall be no overnight parking of automobiles, trucks, vans, trailers, or any other
vehicles outside the building.

19. Lessee shall not affix any wall covering, nor glue or nail any mirror or paneling on any wall
of the premises without Lessor’s prior written authorization.

	20.	 	Lessee shall not grant permission to any car washing vendor to operate within the common
areas or the premises.

 

 

EXHIBIT B

SITE PLAN / LEASED PREMISES

[Detail not copied]

 

 

EXHIBIT C

FLOOR PLAN

[Detail not copied]

 

 

ADDENDUM

OPTION TO EXTEND

	 	 	 	 	 
	Dated:

	 	May 13, 2005	 	 
	By and Between

	 	Lessor) Scheu and Scheu	 	 
	 

	 	(Lessee) Southwest Community Bank	 	 
	Address of Premises:

	 	8250 White Oak Avenue, Suite 100	 	 
	 

	 	 	 	 
	 

	 	Rancho Cucamonga, Ca 91730	 	 
	 

	 	 	 	 

Lessee hereby grants to Lessee the option to extend the term of this lease for two
(2) additional sixty (60) month periods commencing when the respective prior term
expires under the same terms and conditions as contained in this Lease, except for
the monthly rent which shall be negotiated at the time the option is exercised. To
exercise such option Lessee, shall notify Lessor in writing of Lessee’s intent to
exercise such option no later than two hundred forty (240) days and no sooner than
one hundred eighty (180) days prior to the expiration of the initial term of this
Lease. The monthly rental rate and annual rental escalations during the option
period shall be at the then fair rental value, i.e., prevailing market rate for the
Premises. If within thirty (30) days after exercise of this option, Lessor and
Lessee have not agreed upon a rental rate, the rental rate shall be set by
arbitration through appraisers. In such an event, each of the parties within ten
(10) days shall select and be responsible for the payment of an MAI real estate
appraiser with at least five (5) years of full-time commercial appraisal experience
in Western San Bernardino County to act as arbitrators to appraise and set “the
rates,” as outlined above, for the Premises. The two appraisers appointed by the
parties as stated in this paragraph shall meet promptly and attempt to set “the
rates.” If either party does not appoint an appraiser within ten (10) days after
the other party has given written notice of the name of its appraiser, the single
appraiser appointed shall be the sole arbitrator and shall set “the rates”; the
cost of this appraiser shall be divided equally between Lessor and Lessee. If
Lessor and Lessee are unable to agree within thirty (30) days after the
appraiser(s) have been appointed, they shall within ten (10) days thereafter
jointly select a “final” appraiser meeting the qualifications stated in this
paragraph. The cost of this “final” appraiser shall be equally divided between
Lessor and Lessee. If Lessor and Lessee are unable to agree on the “final”
appraiser’s “rate” within a ten 10) day period, an agreement by and between any two
of the three appraisers shall set “the rates.” However, in no event shall the
monthly rent be less than that which was due for the last full month immediately
preceding the renewal period. Lessee’s Option to Renew shall be subject to the
condition that at the expiration of the original term or any extension thereof,
Lessee shall not have been in default in performance in any of the terms, covenants
and conditions of the Lease. This option does not grant Lessee any further Option
to Renew.exv10w1

 

Exhibit 10.1

NON-EXCLUSIVE CONSULTING AGREEMENT

This Non-Exclusive Consulting Agreement (“Agreement”) is entered into and effective as of the 16th
day of August, 2005, between Edward F. Houff (“Consultant” or “Houff”), and Kaiser Aluminum &
Chemical Corporation, a corporation with offices located at 27422 Portola Parkway, #350, Foothill
Ranch, CA 92610-2831 (“Kaiser”).

     WHEREAS, effective August 15, 2005, Kaiser has terminated Consultant as a Kaiser employee
“Without Cause,” and such termination constitutes a “Pro-Rating Event” for the purposes of
determining Consultant’s entitlement to severance and termination benefits under the Key Employment
Retention Program (“KERP”) approved by the Bankruptcy Court in Kaiser’s chapter 11 proceedings,
including Consultant’s Severance Agreement, Retention Agreement and Change in Control Severance
Agreement (a summary listing of such benefits and the references thereto is attached to this
Agreement and incorporated herein by reference); and

     WHEREAS, Consultant acknowledges that as a result of termination of Consultant’s employment
Consultant is not entitled to any benefits under his Change in Control Severance Agreement (the
“CIC Agreement”) and, in recognition of the foregoing, has, by execution of this Agreement,
permanently waived and released Kaiser from and against any and all claims for “Change in Control”
and “Tax Gross-Up” termination benefits in connection with the KERP, including any claims for
benefits under his CIC Agreement; and

     WHEREAS, Kaiser desires to have Consultant perform certain services for Kaiser as set forth
herein, and Consultant is willing to perform such services;

     NOW THEREFORE, in consideration of the mutual promises contained herein the parties hereto
agree as follows:

1. Term

     The term of this Agreement shall commence as of August 1, 2005 and shall continue in effect
for six months, through February 14, 2006. Termination of this Agreement, except for cause, before
February 14, 2006, may occur only by mutual consent or the death or permanent and total disability
of Consultant as a result of bodily injury, disease or mental disorder. This Agreement may be
renewed for such term, and upon such terms and conditions, as the parties may agree in a further
writing.

2. Services

     2.1 Consultant shall perform non-exclusive consulting services for Kaiser primarily in the
nature of the services provided when consultant was Chief Restructuring Officer and Senior Vice
President of Kaiser, which employment ended on August 15, 2005. A listing of subject areas in which
Kaiser and Consultant have agreed that Consultant will provide services to the Company is attached
to this Agreement and incorporated herein by reference. To the extent any services will not be
completed by the expiration of the term of this Agreement and Consultant and Kaiser have not agreed
to the terms of an extension, Consultant shall fully cooperate with Kaiser in all matters relating
to the winding up of Consultant’s pending work on behalf of Kaiser and the orderly transfer of any
such pending work to other employees or representatives of Kaiser as may be designated by Kaiser.

     2.2 Any additional services by Consultant beyond those referenced in paragraph 2.1 above shall
be performed by Consultant as agreed between Consultant and Kaiser and as authorized by Kaiser’s
CEO, Jack A. Hockema, or such other person as Consultant may agree.

     2.3 Consultant shall at all times act in accordance with his own best judgment, experience and
expertise as an independent Consultant. Consultant shall routinely communicate the status and

 

 

progress of the services being performed by Consultant to Kaiser’s CEO, General Counsel, CFO,
senior management and outside professionals, as appropriate, and solicit input and direction with
respect to tactical and strategic decisions required to be made in connection with the services to
be performed that are likely to affect the business, operations or liabilities of Kaiser and its
affiliates both during and after emergence.

     2.4 Consultant may perform consulting services for persons other than Kaiser so long as such
other consulting services do not present an actual conflict of interest for Consultant. Consultant
agrees to inform Kaiser when consulting services are being performed for others, and will provide a
certification that no conflict exists. Consultant will arrange his schedule and other work to
ensure that Kaiser work remains the primary priority for Consultant’s work and remains the first
call on Consultant’s resources and time. Should Consultant request a waiver of any potential
conflict with respect to either interest or time, Kaiser will not unreasonably withhold its consent
to waiver.

3. Fees and Reimbursements/Invoices

     3.1 For the initial term of the Agreement, Consultant’s compensation will be as
follows:

          3.1.1 A base fee of $43,200 per month (“Base Fee”), exclusive of expenses, for which
Consultant will provide up to 120 hours of services. Travel time that is not covered by other work
will be counted at one-half the number of hours, and there will be no premium for weekend or
holiday work. This amount will be pro-rated for the partial months of August 2005 and February
2006.

          3.1.2 Monthly hours worked in excess of 120, up to a maximum of 200 (“Additional Fee”),
exclusive of expenses, will be billed at $360 per hour, subject to the same terms and conditions
for travel, weekend and holiday work as provided in paragraph 3.1.1.

          3.1.3 Regardless of the number of hours actually worked in any month, Consultant agrees that
Kaiser will not be charged for any work in excess of 200 hours per month, exclusive of expenses.

     3.2 Both parties agree that Consultant is not an employee for state or federal tax purposes.
Consultant shall be solely responsible for payment of all FICA and federal, state and local income
taxes payable on compensation received hereunder. All travel time in connection with this Agreement
will be prorated as required and compensated at the above rates. In addition, upon submission of
proper documentation, Kaiser will reimburse Consultant for all reasonable and customary expenses
incurred while providing consulting services. The term “reasonable and customary” shall mean
expenses incurred consistent with Kaiser’s corporate policies on reimbursement of travel and
related expenses and also include costs for telephone, fax and mobile phone charges when used for
Kaiser business, but shall not include any costs or expenses incurred by Consultant to provide his
own working environment (office space, parking, etc.).

     3.3 Consultant’s compensation and expense reimbursement shall be paid as follows:

          3.3.1 Beginning in September 2005 and each month thereafter during the term of the Agreement,
Consultant’s Base Fee will be paid automatically by Kaiser by wire transfer monthly on the first
business day between the first and fifth day of the month. Consultant will also be paid in
September 2005 for the pro-rated Base Fee for the period from August 16-August 31, 2005.

					
	 	 	 	 	 
	 
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          3.3.2 Beginning in September 2005 and each month thereafter during the term of the Agreement,
by the fifth day of the month, Consultant will provide an invoice for the previous month that
provides a summary of time and activities as to the Base Fee, and a reasonably detailed description
of services and time, rounded up to the nearest tenth of the hour for any Additional Fee earned
during the previous month. Consultant will also submit a reasonably detailed schedule of expenses
for reimbursement including receipts. Bills and receipts may be submitted electronically.

          3.3.3 Statements for services and requests for expense reimbursement shall be submitted to

Kaiser Aluminum & Chemical Corp

Attn: John M. Donnan, Vice President and General Counsel

27422 Portola Parkway, #350

Foothill Ranch, CA 92610-2831

Fax: (949) 614-1867

john.donnan@kaiseraluminum.com

          3.3.4 Kaiser will promptly review the statements submitted with respect to the Additional Fee
and requests for expense reimbursement, and will pay all undisputed Additional Fee and expense
reimbursement amounts within 30 days of Kaiser’s receipt of such statement. Kaiser may request
additional information concerning the content of the Base Fee description and time but may not
withhold payment of the Base Fee. Questions regarding any Additional Fee and/or expenses will be
addressed promptly with a view toward reaching an agreement, and payment for any questioned
Additional Fee and/or expense amounts will be paid on the later of 30 days after the statement was
received or 10 days after the questions are resolved.

4. Independent Contractor

     4.1 Consultant shall perform services hereunder as an independent contractor and not as an
employee. He shall have no power or authority to act for, legally represent, or commit Kaiser in
any way unless Kaiser expressly authorizes him to do so.

     4.2 Consultant understands and agrees that during the period of this Agreement and any
extensions thereto he is not entitled to participate in or accrue benefits, and Consultant hereby
expressly waives any claim to participate in or accrue benefits, under Kaiser’s employee benefit
plans, including but not limited to KRP, Plan B, Severance Pay and Benefits Continuation, Personal
Choice, Life Insurance, Sick Leave with Salary Continuation, Long Term Disability, Accidental Death
and Dismemberment, Medical and Dental plans for services performed hereunder, except as he is
entitled to receive any such benefits as a result of his termination without cause as an employee
on August 15, 2005. For the avoidance of doubt, the parties agree that any and all benefits to
which Consultant may be entitled must derive, if at all, from his term of employment at Kaiser, and
not from his service as a Consultant. In addition, Consultant is not entitled to participate in any
employee bonus plans as a result of his service as a Consultant.

5. Protection of Confidential Information

     5.1 All work product of Consultant in the performance of this Agreement, including without
limitation, analyses, reports, photographs, data and other information, including any inventions or

					
	 	 	 	 	 
	 
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Edward. F. Houff

 

 

discoveries made by Consultant, shall be the property of Kaiser and shall be considered
Confidential Information. Any information disclosed to Consultant by Kaiser or others in
connection with service for Kaiser under this Agreement shall also be considered Confidential
Information, and shall, as between Kaiser and Consultant, be the property of Kaiser.

     5.2 Except as Kaiser may authorize in writing, Consultant shall not disclose
any Confidential Information or use it for any purpose other than the performance of his services
under this Agreement. Promptly upon Kaiser’s request, and in any event upon the termination of
this Agreement, Consultant shall deliver to Kaiser all such material (including all copies made
thereof) which Consultant has in his possession.

     5.3 Upon termination of this Agreement for any reasons, Consultant will, except as otherwise
agreed to in writing by the parties, return to Kaiser all property belonging to Kaiser, including
without limitation, computer equipment, computer programs, cellular telephones, beepers or other
property belonging to Kaiser, and documents, property and data of any nature and in any form,
including electronic or magnetic form, reflecting any confidential information described above.

6. Applicable Law/Entire Agreement

     6.1 This Agreement shall in all respects be governed by and construed in accordance with the
laws of the State of Texas, except that conflicts of laws/provisions of Texas law shall not be
applied for the purpose of making other law applicable.

     6.2 This Agreement, the Severance Agreement, the Retention Agreement and that certain Release
executed pursuant to the terms of the Severance Agreement constitute the entire agreement and
supersedes all prior agreements and understandings, both written and oral, between the parties
relating to Consultant’s activities as a Consultant and the termination of Consultant’s employment
with Kaiser, including, but not limited to the effect of such termination under the KERP and
related agreements. It may not be amended, supplemented or superseded except by a written
agreement signed by both parties.

7. Dispute Resolution

     7.1 If a dispute arises out of or related to this Agreement, and if the dispute cannot be
settled through direct discussions, then Kaiser and Consultant agree to first endeavor to settle
the dispute in an amicable and good faith manner by mediation before a mutually agreeable mediator,
before having recourse to any other proceeding or forum.

     7.2 Any controversy or claim arising out of or relating to this Agreement or the breach
thereof that cannot be resolved by good faith mediation shall on the written request of the
complaining party served on the other within thirty (30) calendar days of the event which forms the
basis of the controversy or claim, be submitted and resolved by final and binding arbitration in a
manner consistent with the rules of the American Arbitration Association. Service of the written
demand for arbitration shall be made by certified mail, with a return receipt requested. Time is
of the essence. If the request is not served within said thirty (30) days of the date a cause of
action arises, the complaining party’s claim(s) shall be forever waived and barred before any and
all forums, including, without limitation, arbitration or judicial forums. The Arbitrator shall
have no authority to alter, amend, modify or change any of the terms of the Agreement. The
decision of the Arbitrator shall be final and binding and judgment thereon may be

					
	 	 	 	 	 
	 
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entered in any court having jurisdiction thereof. The parties shall equally divide all costs
of the arbitration, but the parties shall bear their own expenses for attorney’s fees and witness
costs.

     7.3 The parties intend that the dispute resolution procedures outlined herein are mandatory
and shall be the exclusive means of resolving all disputes, between Consultant and Kaiser and/or
Kaiser’s employees, directors, officers, officers or managers involving or arising out of this
Agreement. However, this provision does not prevent either Party from first seeking injunctive
relief if necessary to enforce the terms of this Agreement.

8. Notices

          All notices, correspondence, consents, requests, demands, and other communications hereunder
shall be in writing and shall be deemed to have been duly given when actually received. Such
notices may be given personally, by registered or certified mail, by email, or by facsimile
transmission:

			
	if to Consultant:	 	Edward F. Houff

420 McGowen Street

Houston TX 77006

Fax: 800-853-3676

Phone: 713-522-0835

Email: efh446@gmail.com
	 
	if to Kaiser:	 	Kaiser Aluminum & Chemical Corp.

Attn: John M. Donnan, Vice President and General Counsel

27422 Portola Parkway, #350

Foothill Ranch, CA 92610-2831

Phone: (949) 614-1767

Fax: (949) 614-1867

john.donnan@kaiseraluminum.com

or to such other address as either party shall have last designated by notice to the other party hereto.

9. Waiver

     Failure of either Kaiser or Consultant to enforce at any time any of the provisions of this
Agreement shall in no way be construed to be a waiver of such provisions nor in any way affect the
validity of this Agreement or any part thereof or the right of either party thereafter to enforce
each and every provision thereof. The waiver of any provisions of this Agreement or any breach
thereof shall not constitute waiver of any subsequent breach of the same or any other provisions of
this Agreement.

10. Knowing and Voluntary Waiver

     Consultant understands and agrees that he:

	 	a.	 	Has carefully read and fully understands all of the provisions of this
Agreement, the KERP and agreements entered into by Consultant under the KERP, including
Consultant’s Severance Agreement, Retention Agreement and CIC Agreement and the

					
	 	 	 	 	 
	 
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Edward. F. Houff

 

 

	 	 	 	effect of his termination of Employment under this Agreement, the KERP and
Consultant’s Severance Agreement, Retention Agreement and CIC Agreement.
	 
	 	b.	 	Has had an opportunity to negotiate the terms of this Agreement.
	 
	 	c.	 	Is, through this Agreement, waiving right to employee benefits and/or any
future claim to benefits set forth in paragraph 4.2 of this Agreement, stemming from
activities as a Consultant during the period of this Agreement on and after August 1,
2005.
	 
	 	d.	 	Knowingly and voluntarily intends to be legally bound by the terms of this
Agreement.
	 
	 	e.	 	Was advised and hereby is advised in writing to consider the terms of this
Agreement and consult with an attorney of his choice prior to executing this Agreement.

11. Survival

     The obligations of Consultant under Section 5, 6 and 7 of this Agreement shall survive
termination or expiration of this Agreement.

     IN WITNESS WHEREOF, the parties have executed this Consulting Agreement as of the date first
set forth above.

	 	 	 	 	 	 	 
	CONSULTANT:	 	KAISER ALUMINUM & CHEMICAL CORP.	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
	 	 
	Edward F. Houff

	 	 	 	John M. Donnan	 	 
	 

	 	 	 	Vice President and General Counsel	 	 

					
	 	 	 	 	 
	 
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Edward. F. Houff

 

 

List of Subject Areas as to which Kaiser Desires and Consultant Agrees to Provide Services

n Regularly Scheduled Omnibus and Special bankruptcy court hearings

n Disclosure Statement, POR, Solicitation, Confirmation hearings

n Hearings and appellate work relating to bankruptcy issues, including stay proceedings

n PBGC Appeal of Distress Termination

n Insurance coverage litigation and settlements

n Trentwood environmental matters

n Senior/Sub Note/Gramercy Subordination Litigation and liquidating plan confirmation and
appeals, including stay proceedings

n Asbestos and other Tort Claim resolution and negotiations

n Asbestos workers’ compensation

n Communications with committees and futures representatives

n C11 communications with the Board

n New Board Search Committee

n Environmental reorganization matters

n Claims resolution issues

n Monument Select litigation

n Testimony and/or declarations as required to support particular pleadings

n Other assignments as agreed

 

	 	 	 
	 

	 	 

	EFH Initials

	 	JMD Initials

					
	 	 	 	 	 
	 
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Edward. F. Houff

 

 

SUMMARY OF BENEFITS DUE AND REFERENCES

TO APPLICABLE BENEFIT AGREEMENTS

	n 	 	 All benefits that are due and payable to Consultant under the Kaiser Key Employee
Retention Program (KERP), Consultant’s Severance Agreement (“Severance Agreement”),
Consultant’s Retention Agreement, each as approved by the Bankruptcy Court in 2002 in
Kaiser’s chapter 11 proceedings, for a “Termination Without Cause” and a “Pro-Rating
Event,” as those terms are used in the appropriate documents that generally describe and
are specific to Edward F. Houff, will be paid as and when due under those plans and
agreements as a result of Mr. Houff’s termination effective August 15, 2005.
	 
	n 	 	 No material change or alteration to such benefits is intended from the KERP and related
plans and agreements that were approved by the Bankruptcy Court
	 
	n 	 	 These severance benefits include, as of the termination on August 15, 2005

	 	o	 	Base pay times a multiplier of 2
	 
	 	o	 	Withheld retention payments equaling $400,000
	 
	 	o	 	“Welfare benefits” for 2 years as provided for in the Severance Agreement and
all other benefits provided by the severance plan implemented at part of the KERP
(note: does NOT include car lease continuation)
	 
	 	o	 	Normal end of service benefits and rights as a Kaiser employee (e.g. unused
vacation days for 2005, accrued but unused for 2006) unrelated to Severance
Agreement

	n 	 	 Deferred benefits under the KERP/Severance program

	 	o	 	LTI for 2002 through 2004 calculated and paid in accordance with the LTI program
and KERP (half at emergence, half at emergence + 1 yr)

	n 	 	 Other bargained for benefits

	 	o	 	$25,000 one-time moving expense payment (to be paid upon the earlier of an
actual move or upon termination of the Agreement)
	 
	 	o	 	2005 Short-Term Incentive Compensation, prorated for the period from January 1
to August 15, 2005, not to exceed $25,000, to be paid before March 15, 2006.

 

	 	 	 
	 

	 	 

	EFH Initials

	 	JMD Initials

					
	 	 	 	 	 
	 
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Edward. F. Houff

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