Document:

Prepared by R.R. Donnelley Financial -- Small Business Administration Loan

  
 
 
 Exhibit 10.4

  
 
	 [SBA LOGO]
 	 	 U.S. Small Business Administration
 
	 
	  	 	 NOTE
 

 
  
 
 
 
	 SBA Loan #    
 	  	 PLP-371-663-4006
 
	
	
	

	 SBA Loan Name
 	  	 NuTECH DIGITAL, INC.
 
	
	
	

	 Data
 	  	 July 12, 2000
 
	
	
	

	 Loan Amount
 	  	 $900,000.00
 
	
	
	

	 Interest Rate
 	  	 Variable
 
	
	
	

	 Borrower
 	  	 NuTECH DIGITAL, INC., and NuTECH ENTERTAINMENT
 
	
	
	

	 Operating Company
 	  	 N/A
 
	
	
	

	 Lender
 	  	 IMPERIAL BANK
 
	
	
	

 
  
 1.    PROMISE TO PAY: 
  

In return for the Loan, Borrower promises to pay to the order of Lender the amount of Nine Hundred Thousand & 00/100 Dollars, interest on the unpaid principal balance, and all
other amounts required by this Note. 
  
 2.    DEFINITIONS: 
  
 “Collateral” means any property taken as security for payment of this Note or any guarantee of this Note. 
  
 “Guarantor” means each person or entity that signs a guarantee of payment of this Note. 
  
 “Loan” means the loan evidenced by this Note. 
  
 “Loan Documents” means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collateral. 
  
 “SBA” means the Small Business Administration, an Agency of the United States of America. 
  
 3.    PAYMENT TERMS: 
  
 Borrower must make all payments at the place Lender designates. The
payment terms for this Note are: 
  
 See Payment Addendum attached hereto and by this reference made a part
hereof. 
  
 4.    RIGHT TO PREPAY: 
  
 Borrower may prepay this Note. Borrower may prepay 20 percent or less of the unpaid principal balance at any time without notice. If Borrower prepays more than 20 percent and the Loan has been sold on the secondary
market, Borrower must: 
  
 A.  Give Lender written notice; 
  
 SBA FORM 147 (10/22/98) Previous editions obsolete 
 

 1 

  
 PROMISSORY NOTE 
 (Continued) 
  
 Page 2 
  
 
 
 B.  Pay all accrued interest; and 
  
 C.  If the prepayment is received less than 21 days from the date Lender receives the notice, pay an amount equal to 21 days’ interest from the date
Lender receives the notice, less any interest accrued during the 21 days and paid under subparagraph B. 
  
 If Borrower does not
prepay within 60 days from the date Lender receives the notice, Borrower must give Lender a new notice. 
  
 5.    DEFAULT:

  
 Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or
Operating Company: 
  
 A.  Fails to do anything required by this Note and other Loan Documents;

  
 B.  Defaults on any other loan with Lender; 
  

C.  Does not preserve, or account to Lender’s satisfaction for, any of the Collateral or its proceeds; 
  
 D.  Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA; 

 
 E.  Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or
SBA; 
  
 F.  Defaults on any loan or agreement with another creditor. If Lender believes the default
may materially affect Borrower’s ability to pay this Note; 
  
 G.  Fails to pay any taxes when
due; 
  
 H.  Becomes the subject of a proceeding under nay bankruptcy or insolvency law; 

 
 I.  Has a receiver or liquidator appointed for any part of their business or property; 
  
 J.  Makes an assignment for the benefit of creditors; 
  
 K.  Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower’s ability to pay this Note;

  
 L.  Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without
Lender’s prior written consent; or 
  
 M.  Becomes the subject of a civil or criminal action that
Lender believes may materially affect Borrower’s ability to pay this Note. 
  
 6.    LENDER’S RIGHTS IF THERE IS A DEFAULT:

  
 Without notice or demand and without giving up any of its rights, Lender may: 
  
 A.  Require immediate payment of all amounts owing under this Note; 
  

B.  Collect all amounts owing from any Borrower or Guarantor; 
  
 C.  File suit and obtain judgement; 
  
 D.  Take possession of any Collateral; or 
  
 E.  Sell,
lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement. 
  
 7.    LENDER’S
GENERAL POWERS: 
  
 Without notice and without Borrower’s consent, Lender may: 
  
 A.   Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses; 

 
 B.  Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan
Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney’s fees and costs. If
Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance; 
  
 C.  Release anyone obligated to pay this Note; 
  
 D.  Compromise, release, renew, extend or substitute any of the Collateral, and 
  
 E.  Take any action necessary to protect the Collateral or collect amounts owing on this Note. 
  
 8.    WHEN
FEDERAL LAW APPLIES: 
  
 SBA Form 147 (10/22/98) Previous editions obsolete. 
 

 2 

 
	  	 	 PROMISSORY NOTE
 (Continued)
 	 	 Page 3
 

 
 

 
  
 When SBA is the holder, this Note will be interpreted and enforced under federal
law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from
state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law. 
  
 9.    SUCCESSORS AND ASSIGNS: 
  
 Under this Note, Borrower and Operating Company include the successors of each, and Lender includes its successors and assigns. 
  
 10.    GENERAL PROVISIONS: 
  

	 	A.
	 
	All individuals and entities signing this Note are jointly and severally liable. 
 

	 	B.
	 
	Borrower waives all suretyship defenses. 
 

	 	C.
	 
	Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender’s liens on
Collateral. 
 

	 	D.
	 
	Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up
any of them. 
 

	 	E.
	 
	Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note. 
 

	 	F.
	 
	If any part of this Note is unenforceable, all other parts remain in effect. 
 

	 	G.
	 
	To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower
also waives any defenses based upon any claim that Lender did not obtain any guarantee: did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale. 

  
 11.    STATE—SPECIFIC PROVISIONS: 
  
 Borrower acknowledges this Note is secured by a Deed of Trust in favor of Lender on real property located in Los Angeles County, State of California. That Deed of Trust contains the
following due-on-sale provision. 
  
 DUE ON SALE—CONSENT BY LENDER.    Lender may, at Lender’s
option, declare immediately due and payable all sums secured by the Deed Of Trust upon the sale or transfer, without Lender’s prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A “sale or
transfer” means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land
contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any
other method of conveyance of an interest in the Real Property. If any Borrower is a corporation, partnership or limited liability company, transfer also includes any change in ownership of more than twenty-five percent (25%) of the voting
stock, partnership interests or limited liability company interests, as the case may be, of such Borrower. However, this option shall not be exercised by Lender if such exercise is prohibited by applicable law. 
 

 3 

  
 PROMISSORY NOTE 
 (Continued) 
  
 Page 4 
  
 
 
 12.    BORROWER’S NAME(S) AND SIGNATURE(S). 
  
 By signing below, each individual or entity becomes obligated under this Note as Borrower. 
  
 BORROWER: 
  
 
	 NUTECH DIGITAL, INC.
 	 	  	 	  
	 
	 By:
 	 	 /s/    LEE KASPER
 
	 	  	 	  	 	  
	  	 	 Lee Kasper, President and Secretary of NuTECH DIGITAL, INC.
 	 	  	 	  	 	  

 
  
 
	 NUTECH ENTERTAINMENT
 	 	  	 	  
	 
	 By:
 	 	     /s/    LEE
KASPER
 
	 	  	 	 By:
 	 	 /s/    MICHELE KASPER
 

	  	 	 Lee Kasper, President of NuTECH ENTERTAINMENT
 	 	  	 	  	 	 Michele Kasper, Secretary of NuTECH ENTERTAINMENT
 

 
 

 4 

 PAYMENT ADDENDUM TO PROMISSORY NOTE—(CONTINUED—PAGE 4) 
  
 
 
 
	 Borrower:
 	  	 NUTECH DIGITAL, INC.
 NUTECH ENTERTAINMENT
 15210 Keswick
 Van Nuys, CA 91405
 	  	 Lender:
 	  	 IMPERIAL BANK
 SBA DEPARTMENT
 9920 South La Cienega Boulevard, 12th
Floor
 Inglewood, CA 90301
 

 
  
 
 
 The interest rate on this
Note will fluctuate. The initial interest rate is 11.00% per year. This initial rate is the prime rate on the date SBA received the loan application, plus 2.00%. 
  
 Borrower must pay principal and interest payments of $12,398.00 every month, beginning one month from the month of initial disbursement on this. Note: payments must be made on the same day as the date of initial disbursement on this Note in
the months they are due. 
  
 Lender will apply each installment payment first to pay interest accrued to the day Lender receives the payment, then to bring principal
current, then to pay any late fees, and will apply any remaining balance to reduce principal. 
  
 The interest rate will be adjusted every calendar quarter (the
“change period”). 
  
 The “Prime Rate” is the prime rate in effect on the first business day of the month in which an interest rate change occurs,
as published in the Wall Street Journal on the next business day. 
  
 The adjusted interest rate will be 2.00% above the Prime Rate. Lender will adjust the interest
rate on the first calendar day of each change period. The change in interest rate is effective on that day whether or not Lender gives Borrower notice of the change. The initial interest rate must remain in effect until the first change period
begins. 
  
 Lender must adjust the payment amount at least annually as needed to amortize principal over the remaining term of the note. 
  
 If SBA purchases the guaranteed portion of the unpaid principal balance, the interest rate becomes fixed at the rate in effect at the time of the earliest uncured payment default. If
there is no uncured payment default, the rate becomes fixed at the rate in effect at the time of purchase. 
  
 All remaining principal and accrued interest is due and
payable 10 years from date of initial disbursement. 
  
 Late Charge: If a payment on this Note is more than 10 days late, Lender may charge Borrower a late fee of up
to 5% of the unpaid portion of the regularly scheduled payment. 
  
 

  
 IMPERIAL BANK 
 Member FDIC 
 COMMERCIAL SECURITY AGREEMENT 
  
 
	 Grantor:
 	  	 NuTECH DIGITAL, INC
 	 	 Lender:
 	  	 IMPERIAL BANK
 
	  	  	 NuTECH ENTERTAINMENT
 	 	  	  	 SBA DEPARTMENT
 
	  	  	 15210 Keswick Street
 	 	  	  	 9920 South La Cienega Boulevard, 12th Floor
 
	  	  	 Van Nuys, CA 91405
 	 	  	  	 Inglewood, CA 90301
 

 
  
 THIS COMMERCIAL SECURITY AGREEMENT dated July 12, 2000, is made and executed between NuTECH DIGITAL,
INC.; and NuTECH ENTERTAINMENT (“Grantor”) and IMPERIAL BANK (“Lender”). 
  
 GRANT OF SECURITY INTEREST. For valuable
consideration, Grantor grants to Lender a security interest in the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which
Lender may have by law. 
  
 COLLATERAL DESCRIPTION. The word “Collateral” as used in this Agreement means the following described
property, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located, in which Grantor is giving to Lender a security interest for the payment of the Indebtedness and performance of all other obligations
under the Note and this Agreement: 
  
         See Exhibit “B” attached hereto and by this reference
made a part hereof. 
  
 In addition, the word “Collateral” also includes all the following, whether now owned or hereafter acquired, whether
now existing or hereafter arising, and wherever located: 
  

	 	(A)
	 
	All accessions, attachments, accessories, replacements and additions to any of the collateral described herein, whether added now or later. 
 

 

	 	(B)
	 
	All products and produce of any of the property described in this Collateral section. 
 

  

	 	(C)
	 
	All accounts, general intangibles, instruments, rents, monies, payments, and all other rights, arising out of a sale, lease, or other disposition of any of the property
described in this Collateral section. 
 

  

	 	(D)
	 
	All proceeds (including insurance proceeds) from the sale, destruction, loss, or other disposition of any of the property described in this Collateral section, and sums due
from a third party who has damaged or destroyed the Collateral or from that party’s insurer, whether due to judgment, settlement or other process. 
 

  

	 	(E)
	 
	All records and data relating to any of the property described in this Collateral section, whether in the form of a writing, photograph, microfilm, microfiche, or electronic
media, together with all of Grantor’s right, title, and interest in and to all computer software required to utilize, create, maintain, and process any such records or data on electronic media. 
 

  
 Despite any other provision of this Agreement, Lender is not granted, and will not have, a nonpurchase money security interest in household goods, to the extent such a security
interest would be prohibited by applicable law. In addition, if because of the type of any Property, Lender is required to give a notice of the right to cancel under Truth in Lending for the Indebtedness, then Lender will not have a security
interest in such Property unless and until such a notice is given. 
  
 GRANTOR’S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL.
With respect to the Collateral, Grantor represents and warrants to Lender that: 
  
 Perfection of Security Interest. Grantor agrees to execute
financing statements and to take whatever other actions are requested by Lender to perfect and continue Lender’s security interest in the Collateral. Upon request of Lender, Grantor will deliver to Lender any and all of the documents evidencing
or constituting the Collateral, and Grantor will note Lender’s interest upon any and all chattel paper if not delivered to Lender for possession by Lender. 
  
 Notices to Lender. Grantor will notify Lender in writing at Lender’s address shown above (or such other addresses as Lender may designate from time to time) prior to any (1) change in Grantor’s name, (2) change in
Grantor’s assumed business name(s), (3) change in the management of Grantor, (4) change in the authorized signer(s), (5) change in Grantor’s principal office address, (6) conversion of Grantor to a new or different type of business entity,
or (7) change in any other aspect of Grantor that directly or indirectly relates to any agreements between Grantor and Lender. No change in Grantor’s name will take effect until after Lender has been notified. 
  
 No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to which Grantor is a party, and its certificate or
articles of incorporation and bylaws do not prohibit any term or condition of this Agreement. 

  
 Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general
intangibles, as defined by the Uniform Commercial Code, the Collateral is enforceable in accordance with its terms, is genuine, and fully complies with all applicable laws and regulations concerning form, content and manner of preparation and
execution, and all persons appearing to be obligated on the Collateral have authority and capacity to contract and are in fact obligated as they appear to be on the Collateral. There shall be no setoffs or counterclaims against any of the
Collateral, and no agreement shall have been made under which any deductions or discounts may be claimed concerning the Collateral except those disclosed to Lender in writing. 
  
 Location of the Collateral. Except in the ordinary course of Grantor’s business, Grantor agrees to keep the Collateral at Grantor’s address shown above or at such other locations as are acceptable to
Lender. Upon Lender’s request, Grantor will deliver to Lender in form satisfactory to Lender a schedule of real properties and Collateral locations relating to Grantor’s operations, including without limitation the following: (1) all real
property Grantor owns or is purchasing; (2) all real property Grantor is renting or leasing; (3) all storage facilities Grantor owns, rents, leases, or uses; and (4) all other properties where Collateral is or may be located. 

 
 Removal of the Collateral. Except in the ordinary course of Grantor’s business, Grantor shall not remove the Collateral from its existing location without
Lender’s prior written consent. Grantor shall, whenever requested, advise Lender of the exact location of the Collateral. 
  
 Transactions Involving
Collateral. Except for inventory sold or accounts collected in the ordinary course of Grantor’s business, Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral. Grantor shall not pledge, mortgage,
encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or charge, other than the security interest provided for in this Agreement, without the prior written consent of Lender. This includes security
interests even if junior in right to the security interests granted under this Agreement. Unless waived by Lender, all proceeds from any disposition of the Collateral (for whatever reason) shall be held in trust for Lender and shall not be
commingled with any other funds; provided however, this requirement shall not constitute consent by Lender to any sale or other disposition. Upon receipt, Grantor shall immediately deliver any such proceeds to Lender. 
  
 Title. Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral, free and clear of all liens and encumbrances except for
the lien of this Agreement. No financing statement covering any of the Collateral is on file in any public office other than those which reflect the security interest created by this Agreement or to which Lender has specifically consented. Grantor
shall defend Lender’s rights in the Collateral against the claims and demands of all other persons. 
  
 Repairs and Maintenance. Grantor agrees
to keep and maintain, and to cause others to keep and maintain, the Collateral in good order, repair and condition at all times while this Agreement remains in effect. Grantor further agrees to pay when due all claims for work done on, or services
rendered or material furnished in connection with the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral. 
  
 Inspection of Collateral. Lender and Lender’s designated representatives and agents shall have the right at all reasonable times to examine and inspect the Collateral wherever located. 
  
 Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments and liens upon the Collateral, its use or operation, upon this Agreement, upon any
promissory note or notes evidencing the Indebtedness, or upon any of the other Related Documents. Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the
obligation to pay and so long as Lender’s interest in the Collateral is not jeopardized in Lender’s sole opinion. If the Collateral is subjected to a lien which is not discharged within fifteen (15) days, Grantor shall deposit with Lender
cash, a sufficient corporate surety bond or other security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, costs, attorneys’ fees or other charges that could accrue as a result of
foreclosure or sale of the Collateral. In any contest Grantor shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional obligee under any surety
bond furnished in the contest proceedings. Grantor further agrees to furnish Lender with evidence that such taxes, assessments, and governmental and other charges have been paid in full and in a timely manner. Grantor may withhold any such payment
or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender’s interest in the Collateral is not jeopardized. 
  
 Compliance with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules and regulations of all governmental authorities, including
without limitation all environmental laws, ordinances, rules and regulations, now or hereafter in effect, applicable to the ownership, production, disposition, or use of the Collateral. Grantor may contest in good faith any such law, ordinance or
regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Lender’s interest in the Collateral, in Lender’s opinion, is not jeopardized. 
  

Hazardous Substances. Grantor represents and warrants that the Collateral never has been, and never will be so long as this Agreement remains a lien on the Collateral, used in violation of any
Environmental Laws or for the generation, manufacture, storage, transportation, treatment, disposal, release or threatened release of any Hazardous Substance. The representations and warranties contained herein are based on Grantor’s due
diligence in investigating the Collateral for Hazardous Substances. 

  
 Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event
Grantor becomes liable for cleanup or other costs under any Environmental Laws, and (2) agrees to indemnify and hold harmless Lender against any and all claims and losses resulting from a breach of this provision of this Agreement. This obligation
to indemnify shall survive the payment of the Indebtedness and the satisfaction of this Agreement. 
  
 Maintenance of Casualty Insurance. Grantor
shall procure and maintain all risks insurance, including without limitation fire, theft and liability coverage together with such other insurance as Lender may require with respect to the Collateral, in form, amounts, coverages and basis reasonably
acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at least thirty (30) days’ prior written notice to Lender and not including any disclaimer of the insurer’s liability for failure to give such a notice. Each insurance
policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. In connection with all policies covering assets in which Lender holds
or is offered a security interest, Grantor will provide Lender with such loss payable or other endorsements as Lender may require. If Grantor at any time fails to obtain or maintain any insurance as required under this Agreement, Lender may (but
shall not be obligated to) obtain such insurance as Lender deems appropriate, including if Lender so chooses “single interest insurance,” which will cover only Lender’s interest in the Collateral. 
  
 Application of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Collateral. Lender may make proof of loss if Grantor fails to do so
within fifteen (15) days of the casualty. All proceeds of any insurance on the Collateral, including accrued proceeds thereon, shall be held by Lender as part of the Collateral. If Lender consents to repair or replacement of the damaged or destroyed
Collateral, Lender shall, upon satisfactory proof of expenditure, payor reimburse Grantor from the proceeds for the reasonable cost of repair or restoration. If Lender does not consent to repair or replacement of the Collateral, Lender shall retain
a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay the balance to Grantor. Any proceeds which have not been disbursed within six (6) months after their receipt and which Grantor has not committed to the repair or
restoration of the Collateral shall be used to prepay the Indebtedness. 
  
 Insurance Reserves. Lender may require Grantor to maintain with Lender
reserves for payment of insurance premiums, which reserves shall be created by monthly payments from Grantor of a sum estimated by Lender to be sufficient to produce, at least fifteen (15) days before the premium due date, amounts at least equal to
the insurance premiums to be paid. If fifteen (15) days before payment is due, the reserve funds are insufficient, Grantor shall upon demand pay any deficiency to Lender. The reserve funds shall be held by Lender as a general deposit and shall
constitute a non-interest-bearing account which Lender may satisfy by payment of the insurance premiums required to be paid by Grantor as they become due. Lender does not hold the reserve funds in trust for Grantor, and Lender is not the agent of
Grantor for payment of the insurance premiums required to be paid by Grantor. The responsibility for the payment of premiums shall remain Grantor’s sole responsibility. 
  
 Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy of insurance showing such information as Lender may reasonably request including the following: (1)
the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured; (5) the then current value on the basis of which insurance has been obtained and the manner of determining that value; and (6) the expiration
date of the policy. In addition, Grantor shall upon request by Lender (however not more often than annually) have an independent appraiser satisfactory to Lender determine, as applicable, the cash value or replacement cost of the Collateral.

  
 GRANTOR’S RIGHT TO POSSESSION. Until default, Grantor may have possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this Agreement or the Related Documents, provided that Grantor’s right to possession and beneficial use shall not apply to any Collateral where possession of the Collateral by
Lender is required by law to perfect Lender s security interest in such Collateral. If Lender at any time has possession of any Collateral, whether before or after an Event of Default, Lender shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral if Lender takes such action for that purpose as Grantor shall request or as Lender, in Lender’s sole discretion, shall deem appropriate under the circumstances, but failure to honor any request by
Grantor shall not of itself be deemed to be a failure to exercise reasonable care. Lender shall not be required to take any steps necessary to preserve any in the Collateral against prior parties, nor to protect, preserve or maintain any security
interest given to secure the Indebtedness. 
  
 LENDER’S EXPENDITURES. If any action or proceeding is commenced that would materially affect
Lender’s interest in the Collateral or if Grantor fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor’s failure to discharge or pay when due any amounts Grantor is required to
discharge or pay under this Agreement or any Related Documents, Lender on Grantor’s behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens,
security interests, encumbrances and other claims, at any time levied or placed on the Collateral and paying all costs for insuring, maintaining and preserving the Collateral All such expenditures incurred or paid by Lender for such purposes will
then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable on demand;
(B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a
balloon payment which will be due and payable at the Note’s maturity. The 

  
 Collateral also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies
to which Lender may be entitled upon Default. 
  
 DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:

  
 Payment Default. Grantor fails to make any payment when due under the Indebtedness. 
  
 Environmental Default. Failure of any party to comply with or perform when due any term, obligation, convenant or condition
contained in any environmental agreement executed in connection with any Indebtedness. 
  
 Other Defaults.
Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any
other agreement between Lender and Grantor. 
  
 False Statements. Any warranty, representation or
statement made or furnished to Lender by Grantor or on Grantor’s behalf under this Agreement, the Note, or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or
misleading at any time thereafter. 
  
 Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. 
  
 Insolvency. The dissolution or termination of Grantor’s existence as a going business, the insolvency of Grantor, the appointment of a receiver for any part
of Grantor’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. 
  
 Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding,
self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Grantor’s accounts, including deposit accounts, with
Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written
notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute. 
  
 Events Affecting Guarantor. Any of the preceding events occurs with respect to guarantor,
endorser, surety, or accommodation party of any of the Indebtedness or guarantor, endorser, surety, or accommodation party dies or becomes incompetent. 
  
 Adverse Change. A material adverse change occurs in Grantor’s financial condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired. 
  
 Insecurity. Lender in good faith believes itself insecure. 
  
 Cure Provisions. If any default, other than a default in payment, is curable and if Grantor has not been given a notice of a
breach of the same provision of this Agreement within the preceding twelve (12) months, it may be cured (and no event of default will have occurred) if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the
default within ten (10) days; or (2) if the cure requires more than ten (10) days, immediately initiates steps which Lender deems in Lender’s sole discretion to be sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. 
  
 RIGHTS AND REMEDIES ON DEFAULT. If an Event of
Default occurs under this Agreement, at any time thereafter, Lender shall have all the rights of a secured party under the California Uniform Commercial Code. In addition and without limitation, Lender may exercise anyone or more of the following
rights and remedies: 
  
 Accelerate Indebtedness. Lender may declare the entire Indebtedness, including
any prepayment penalty which Grantor would be required to pay, immediately due and payable, without notice of any kind to Grantor. 
  
 Assemble Collateral. Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any and all certificates of title and other documents relating to the Collateral. Lender may require
Grantor to assemble the Collateral and make it available to Lender at a place to be designated by Lender. Lender also shall have full power to enter upon the property of Grantor to take possession of and remove the Collateral. If the Collateral
contains other goods not covered by this Agreement at the time of repossession, Grantor agrees Lender may take such other goods, provided that Lender makes reasonable efforts to return them to Grantor after repossession. 

  
 Sell the Collateral. Lender shall have full power to sell, lease,
transfer, or otherwise deal with the Collateral or proceeds thereof in Lender’s own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily in value or is of
a type customarily sold on a recognized market, Lender will give Grantor reasonable notice of the time after which any private sale or any other intended disposition of the Collateral is to be made. The requirements of reasonable notice shall be met
if such notice is given at least fifteen (15) days, or such lesser time as required by state law, before the time of the sale or disposition. All expenses relating to the disposition of the Collateral, including without limitation the expenses of
retaking, holding, insuring, preparing for sale and selling the Collateral, shall become a part of the Indebtedness secured by this Agreement and shall be payable on demand, with interest at the Note rate from date of expenditure until repaid.

  
 Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all
or any part of the Collateral, with the power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the Rents from the Collateral and apply the proceeds, over and above the cost of the
receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender’s right to the appointment of a receiver shall exist whether or not the apparent value of the Collateral exceeds the Indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. 
  
 Collect
Revenues, Apply Accounts. Lender, either itself or through a receiver, may collect the payments, rents, income, and revenues from the Collateral. Lender may at any time in Lender’s discretion transfer any Collateral into Lender’s own
name or that of Lender’s nominee and receive the payments, rents, income, and revenues there from and hold the same as security for the Indebtedness or apply it to payment of the Indebtedness in such order of preference as Lender may determine.
Insofar as the Collateral consists of accounts, general intangibles, insurance policies, instruments, chattel paper, choses in action, or similar property, Lender may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose, or
realize on the Collateral as Lender may determine, whether or not Indebtedness or Collateral is then due. For these purposes, Lender may, on behalf of and in the name of Grantor, receive, open and dispose of mail addressed to Grantor; change any
address to which mail and payments are to be sent; and endorse notes, checks, drafts, money orders, documents of title, instruments and items pertaining to payment, shipment, or storage of any Collateral. To facilitate collection, Lender may notify
account debtors and obligors on any Collateral to make payments directly to Lender. 
  
 Obtain Deficiency.
If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment against Grantor for any deficiency remaining on the Indebtedness due to Lender after application of all amounts received from the exercise of the rights
provided in this Agreement. Grantor shall be liable for a deficiency even if the transaction described in this subsection is a sale of accounts or chattel paper. 
  
 Other Rights and Remedies. Lender shall have all the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, as may be
amended from time to time. In addition, Lender shall have and may exercise any or all other rights and remedies it may have available at law, in equity, or otherwise. 
  
 Election of Remedies. Except as may be prohibited by applicable law, all of Lender’s rights and remedies, whether evidenced by this Agreement, the Related
Documents, or by any other writing, shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy will not bar any other remedy, and an election to make expenditures or to take action to perform an
obligation of Grantor under this Agreement, after Grantor’s failure to perform, shall not affect Lender’s right to declare a default and exercise its remedies. 
  
 REFERENCE PROVISION. 1. Other than (i) non-judicial foreclosure and all matters in connection therewith regarding security interests in real or personal property; or (ii) the appointment of a receiver, or the
exercise of other provisional remedies (any and all of which may be initiated pursuant to applicable law), each controversy, dispute or claim between the parties arising out of or relating to this document (“Agreement”), which controversy,
dispute or claim is not settled in writing within thirty (30) days after the “Claim Date” (defined as the date on which a party subject to the Agreement gives written notice to all other parties that a controversy, dispute or claim
exists), will be settled by a reference proceeding in California in accordance with the provisions of Section 638 et seq. of the California Code of Civil Procedure, or their successor section (“CCP”), which shall constitute the exclusive
remedy for the settlement of any controversy, dispute or claim concerning this Agreement, including whether such controversy, dispute or claim is subject to the reference proceeding and except as set forth above, the parties waive their rights to
initiate any legal proceedings against each other in any court or jurisdiction other than the Superior Court in the County where the Real Property, if any, is located or Los Angeles County if none (the “Court”). The referee shall be a
retired Judge of the Court selected by mutual agreement of the parties, and if they cannot so agree within forty-five (45) days after the Claim Date, the referee shall be promptly selected by the Presiding Judge of the Court (or his representative).
The referee shall be appointed to sit as a temporary judge, with all of the powers for a temporary judge, as authorized by law, and upon selection should take and subscribe to the oath of office as provided for in Rule 244 of the California Rules of
Court (or any subsequently enacted Rule). Each party shall have one peremptory challenge pursuant to CCP 170.6. The referee shall (a) be requested to set the matter for hearing within sixty (60) days after the Claim Date and (b) try any and all
issues of law or fact and report a statement of decision upon them, if possible, within ninety (90) days of the Claim Date. Any decision rendered by the referee will be final, binding and conclusive and judgment shall be entered pursuant to CCP 644
in any court in the State California having jurisdiction. Any party 

 may apply for a reference proceeding at any time after thirty (30) days following notice to any other party of the nature of the controversy, dispute or claim,
by filing a petition for a hearing and/or trial. All discovery permitted by this Agreement shall be completed no later than fifteen (15) days before the first hearing date established by the referee. The referee may extend such period in the event
of a party’s refusal to provide requested discovery for any reason whatsoever, including, without limitation, legal objections raised to such discovery or unavailability of a witness due to absence or illness. No party shall be entitled to
“priority” in conducting discovery. Depositions may be taken by either party upon seven (7) days written notice, and request for production or inspection of documents shall be responded to within ten (10) days after service. All disputes
relating to discovery which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding upon the parties. Pending appointment of the referee as provided herein, the Superior Court is empowered to
issue temporary and/or provisional remedies, as appropriate. 
  
 2.    Except as expressly set forth in this Agreement, the referee
shall determine the manner in which the reference proceeding is conducted including the time and place of all hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding.
All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the referee. The party
making such a request shall have the obligation to arrange for and pay for the court reporter. The costs of the court reporter at the trial shall be borne equally by the parties. 
  
 3.    The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings
at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, to provide all temporary and/or provisional remedies and to enter equitable orders that will
be binding upon the parties. The referee shall issue a single judgment at the close of the reference proceeding which shall dispose of all of the claims of the parties that are the subject of the reference. The parties hereto expressly reserve the
right to contest or appeal from the final judgment or any appealable order or appealable judgment entered by the referee. The parties hereto expressly reserve the right to findings of fact, conclusions of law, a written statement of decision, and
the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this provision. 
  
 4.    In the event that the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by the
reference procedure herein described will be resolved and determined by arbitration. The arbitration will be conducted by a retired judge of the Court, in accordance with the California Arbitration Act, 1280 through 1294.2 of the amended from time
to time. The limitations with respect to discovery as set forth hereinabove shall apply to any such arbitration proceeding. 
  
 MISCELLANEOUS
PROVISIONS.    The following miscellaneous provisions are a part of this Agreement: 
  
 Amendments.    This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to
this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. 
  
 Attorneys’ Fees; Expenses.    Grantor agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s
attorneys’ fees and Lender’s legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Grantor shall pay the costs and expenses of such
enforcement. Costs and expenses include Lender’s attorneys’ fees and legal expenses whether or not there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Grantor also shall pay all court costs and such additional fees as may be directed by the court. 
  

Caption Headings.    Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define
the provisions of this Agreement. 
  
 Applicable Law.    The Loan secured by this lien was
made under a United States Small Business Administration (SBA) nationwide program which uses tax dollars to assist small business owners. If the United States is seeking to enforce this document, then under SBA regulations: (a) When SBA is the
holder of the Note, this document and all documents evidencing or securing this Loan will be construed in accordance with federal law. (b) Lender or SBA may use local or state procedures for purposes such as filing papers, recording documents,
giving notice, foreclosing liens, and other purposes. By using these procedures, SBA does not waive any federal immunity from local or state control, penalty, tax or liability. No Borrower or Guarantor may claim or assert against SBA any local or
state law to deny any obligation of Borrower, or defeat any claim of SBA with respect to this Loan. Any clause in this document requiring arbitration is not enforceable when SBA is the holder of the Note secured by this instrument. 

  
 Joint and Several Liability.    All obligations of
Grantor under this Agreement shall be joint and several, and all references to Grantor shall mean each and every Grantor. This means that each Grantor signing below is responsible for all obligations in this Agreement. Where anyone or more of the
parties is a corporation, partnership, limited liability company or similar entity, it is not necessary for Lender to inquire into the powers of any of the officers, directors, partners, members, or other agents acting or purporting to act on the
entity’s behalf, and any obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Agreement. 
  
 Preference Payments.    Any monies Lender pays because of an asserted preference claim in Grantor’s bankruptcy will become a part of the
Indebtedness and, at Lender’s option, shall be payable by Grantor as provided in this Agreement. 
  
 No
Waiver by Lender.    Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender’s right otherwise to demand strict compliance with that provision or any other
provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender’s rights or of any of Grantor’s obligations as to any future transactions. Whenever
the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be
granted or withheld in the sole discretion of Lender. 
  
 Notices.    Any notice
required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight
courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under
this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party’s address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor’s current
address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. 
  
 Power of Attorney.    Grantor hereby appoints Lender as Grantor’s irrevocable attorney-in-fact for the purpose of executing any
documents necessary to perfect or to continue the security interest granted in this Agreement. Lender may at any time, and without further authorization from Grantor, file a carbon, photographic or other reproduction of any financing statement or of
this Agreement for use as a financing statement. Grantor will reimburse Lender for all expenses for the perfection and the continuation of the perfection of Lender’s security interest in the Collateral. 
  
 Waiver of Co-Obligor’s Rights.    If more than one person is obligated for the Indebtedness, Grantor
irrevocably waives, disclaims and relinquishes all claims against such other person which Grantor has or would otherwise have by virtue of payment of the Indebtedness or any part thereof, specifically including but not limited to all rights of
indemnity, contribution or exoneration. 
  
 Severability.    If a court of competent
jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any person or circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other person or
circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise
required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. 
  
 Successors and Assigns.    Subject to any limitations stated in this Agreement on transfer of
Grantor’s interest, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Grantor, Lender, without notice to Grantor, may
deal with Grantor’s successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement or liability under the Indebtedness. 

 
 Survival of Representations and Warranties.    All representations, warranties, and agreements
made by Grantor in this Agreement shall survive the execution and delivery of this Agreement, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor’s Indebtedness shall be paid in full.

  
 Time is of the Essence.    Time is of the essence in the performance of this
Agreement. 
  
 Waive Jury.    All parties to this Agreement hereby waive the right to
any jury trial in any action, proceeding, or counterclaim brought by any party against any other party. 
  
 DEFINITIONS.     The
following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America.
Words and terms used !n the singular shall include the plural, and the plural shall include the singular, as the context 

 may require. Words and terms not otherwise defined In this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code:

  
 Agreement.    The word “Agreement” means this Commercial Security
Agreement, as this Commercial Security Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Commercial Security Agreement from time to time. 
  
 Borrower.    The word “Borrower” means NuTECH DIGITAL, INC.; and NuTECH ENTERTAINMENT, and all
other persons and entities signing the Note in whatever capacity. 
  
 Collateral.    The word “Collateral” means all of Grantor’s right, title and interest in and to all the Collateral as described in the Collateral Description section of this Agreement. 

 
 Default.    The word “Default” means the Default set forth in this Agreement in the section titled
“Default”. 
  
 Environmental Laws.    The words “Environmental
Laws” mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No.99-499 (“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety Code, Section 25100, et seq., or other applicable state or federal laws, rules,
or regulations adopted pursuant thereto. 
  
 Event of Default.    The words
“Event of Default” mean any of the Events of Default set forth in this Agreement in the Default section of this Agreement. 
  
 Grantor.    The word “Grantor” means NuTECH DIGITAL, INC.; and NuTECH ENTERTAINMENT. 
  
 Hazardous Substances.    The words “Hazardous Substances” mean materials that, because of their quantity, concentration or
physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The
words “Hazardous Substances” are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term “Hazardous
Substances” also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. 
  
 Indebtedness.    The word “Indebtedness” means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other
indebtedness and costs and expenses for which Grantor is responsible under this Agreement or under any of the Related Documents. 
  
 Lender.    The word “Lender” means IMPERIAL BANK, its successors and assigns. 
  
 Note.    The word “Note” means the Note executed by Grantor in the principal amount of $900,000.00 dated July 12, 2000, together
with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement. 
  
 Related Documents.    The words “Related Documents” mean all promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness.

  
 GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JULY 12,
2000. 
  
 GRANTOR: 
  
 
	 
	 NUTECH DIGITAL, INC. 
 
	 
	 By:
 	 	 /s/    Lee Kasper
 

	  	 	 Lee Kasper,
 President and Secretary of NuTech Digital, INC.

 
  
 
	 NUTECH ENTERTAINMENT
 	 	  	 	  
	 
	 By:
 	 	 /s/    Lee Kasper        
 
	 	  	 	 By:
 	 	 /s/    Michele Kasper        
 

	  	 	 Lee Kasper,
 President of NuTech Entertainment

	 	  	 	  	 	 Michele Kasper,
 Secretary of NuTech
Entertainment
 

 

  
 EXHIBIT “A” 
  
 Legal Description 
  
 The land referred to herein is situated in the City of Los
Angeles, County of Los Angeles, State of California and is described as follows: 
  
 Parcel B, in the City of Los Angeles, in the County of Los
Angeles, State of California, as shown on Parcel Map L. A. No.2799, filed in Book 55, Page 90 of Parcel Maps, in the office of County Recorder of said County. 
  
 Real property commonly known as 15210 KESWICK STREET. VAN NUYS. CALIFORNIA. 

  
 EXHIBIT “B” 
  
 
	 Borrower:
 	 	 NuTECH DIGITAL, INC.
 	 	 Lender:
 	 	 IMPERIAL BANK
 
	  	 	 NuTECH ENTERTAINMENT
 	 	  	 	 SBA DEPARTMENT
 
	  	 	 15210 Keswick Street
 	 	  	 	 9920 South La Cienega Boulevard, 12th Floor
 
	  	 	 Van Nuys, CA 91405
 	 	  	 	 Inglewood, CA 90301
 

 
  
 All of the following described property, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located: 
  
 a)  All goods which are used in the construction, occupancy or operation of
the real property described in Exhibit “A” attached hereto and incorporated herein by this reference (the “Property”), including but not limited to all appliances, furniture, and furnishings, appliances, machinery and equipment,
tools, fittings and parts therefor, building service and maintenance equipment and supplies, building materials and supplies; 
 b)  All goods now or hereafter located on the Property
which are or are to become fixtures; 
 c)  All inventory, chattel paper, accounts and contract rights, deposit accounts, documents, instruments; 
 d)  All general intangibles, including but not limited to all governmental permits relating to the property, all names under or by which the Property or any of the present or future improvements located on
the Property may at any time be operated or known and all rights to carry on business under any such names or any variant thereof, all trademarks, goodwill, patents and applications therefor, choses in action; 
 e)  All rights to payment and proceeds, including insurance proceeds, and claims arising on account of any damage to or taking the Property or any improvements thereon or any part thereof, and all causes of
action and any recoveries for any loss or diminution in value of the Property. 
 f)  All rents, revenues, reserves, deferred payments, deposits, royalties, bonuses, refunds, cost
savings delay rentals, issues, income, proceeds, profits, security, and other types of deposits, and other benefits, now or hereafter paid or payable for constructing, improving using, leasing, licensing, possessing, operating, residing in, mining,
selling, or otherwise enjoying the Property. 
 g)  All water stock relating to the Property, and all shares of stock or other evidence of ownership of any part of the Property that Is
owned by any Grantor in common with others, and all documents of membership in any owners’ or members association or similar group having responsibility for managing or operating any part of the Property; 
 h)  All proceeds and products of any of the foregoing, including without limitation, all accounts, general intangibles, insurance proceeds and refunds and other rights to payment. 
 i)  All records and data relating to any of the above, in whatever form, together with the storage media, hardware and software necessary to retrieve and process such records and data. 

 
 Collateral includes but is not limited to the following personal property described in Exhibit “C” attached hereto and by this reference made a part hereof.

  

  
 EXHIBIT “C” 
  
 
	 #
 	  	 QTY
 	  	 DESC.
 	  	 Model No./Serial No.
 	  	 Value Each
 	  	 Total Value
 
	   1
 	  	 1
 	  	 Alert Telephone System
 	  	 SM483C/KAB701343
 	  	 6,909.25
 	  	 6,909.25
 
	   2
 	  	 1
 	  	 Muratec Fax Machine
 	  	 F95/F9500078010551
 	  	 1,053.59
 	  	 1,053.59
 
	   3
 	  	 1
 	  	 End Table-Oak Finish
 	  	  	  	 149.95
 	  	 149.95
 
	   4
 	  	 4
 	  	 Sled Base Arm Chair-Oak Finish
 	  	  	  	 168.53
 	  	 674.12
 
	   5
 	  	 1
 	  	 Hot Point Refrigerator
 	  	 CTX18LYZGRWH/AT79245
 	  	 361.79
 	  	 361.79
 
	   6
 	  	 1
 	  	 Sharp Microwave Oven
 	  	 R-310AW/232515
 	  	 129.99
 	  	 129.99
 
	   7
 	  	 3
 	  	 Black Formica Desk
 	  	  	  	 227.66
 	  	 682.98
 
	   8
 	  	 1
 	  	 Photo Copy Machine
 	  	 7090S/13110
 	  	 3,014.76
 	  	 3,014.76
 
	   9
 	  	 1
 	  	 5 Piece Credenza Unit
 	  	  	  	 895.95
 	  	 895.95
 
	 10
 	  	 1
 	  	 Low Bookcase
 	  	  	  	 949.95
 	  	 949.95
 
	 11
 	  	 1
 	  	 Executive Desk
 	  	  	  	 519.95
 	  	 519.95
 
	 12
 	  	 9
 	  	 Blk. Adj. Desk Chairs
 	  	  	  	 152.34
 	  	 1,371.06
 
	 13
 	  	 1
 	  	 HP LaserJet Printer
 	  	 C4121A/USEF206994
 	  	 1,734.93
 	  	 1,734.93
 
	 14
 	  	 1
 	  	 HP LaserJet Printer
 	  	 CF120A/USMB046692
 	  	 1,699.00
 	  	 1,699.00
 
	 15
 	  	 1
 	  	 Hp LaserJet Color Printer
 	  	 C4568A/US6251413P
 	  	 1,877.00
 	  	 1,877.00
 
	 16
 	  	 1
 	  	 6 Shelf Oak Finish Hutch
 	  	  	  	 980.00
 	  	 980.00
 
	 17
 	  	 1
 	  	 Panasonic DVD Player
 	  	 L10-00516
 	  	 1,900.00
 	  	 1,900.00
 
	 18
 	  	 1
 	  	 Cardscan Executive
 	  	 4.0/A03640
 	  	 254.00
 	  	 254.00
 
	 19
 	  	 1
 	  	 5 shelf Bookcase
 	  	  	  	 175.12
 	  	 175.12
 
	 20
 	  	 1
 	  	 2 drawer 2x4 Crendenza
 	  	  	  	 487.90
 	  	 487.90
 
	 21
 	  	 1
 	  	 Front Office Desk-Oak Finish
 	  	  	  	 620.00
 	  	 620.00
 
	 22
 	  	 5
 	  	 Exec. Sec Desk-Oak Finish
 	  	  	  	 889.00
 	  	 4,445.00
 
	 23
 	  	 1
 	  	 Johnson Lift-Forklift
 	  	 PS6066/06099112A15100180495
 	  	 3,697.75
 	  	 3,697.75
 
	 24
 	  	 1
 	  	 CAT Pallet Lift
 	  	 GS/311766
 	  	 487.13
 	  	 487.13
 
	 25
 	  	 1
 	  	 Utility Cart
 	  	  	  	 151.78
 	  	 151.78
 
	 26
 	  	 1
 	  	 3 Story Ladder
 	  	  	  	 628.93
 	  	 628.93
 
	 27
 	  	 1
 	  	 48’ Mitsubishi Color Television
 	  	 VS50501A/101798
 	  	 3,550.00
 	  	 3,550.00
 
	 28
 	  	 1
 	  	 Yamaha Speaker
 	  	 SW-3/205066950
 	  	 868.00
 	  	 868.00
 
	 29
 	  	 1
 	  	 HP Fax/ Printer/Scan/Copier
 	  	 520/5679UB80BX
 	  	 1,961.57
 	  	 1,961.57
 
	 30
 	  	 2
 	  	 Trade Show Booth & Components
 	  	  	  	 5,821.69
 	  	 11,643.38
 
	 31
 	  	 1
 	  	 Wherehouse Shelving
 	  	  	  	 7,920.52
 	  	 7,920.52
 
	 32
 	  	 1
 	  	 Mitsubishi VHS
 	  	 HSU530/
 	  	 400.00
 	  	 400.00
 
	 33
 	  	 1
 	  	 Pioneer DVD LD
 	  	 DVL700/
 	  	 1,000.00
 	  	 1,000.00
 
	 34
 	  	 1
 	  	 Sony Receiver/Ampliphier
 	  	 STRDE835/
 	  	 400.00
 	  	 400.00
 
	 35
 	  	 1
 	  	 Pioneer DVD LD
 	  	 V555
 	  	 1,200.00
 	  	 1,200.00
 
	 36
 	  	 1
 	  	 Laptop Computer
 	  	 770-ED/9549-78-W9144
 	  	 4,500.00
 	  	 4,500.00
 
	 37
 	  	 1
 	  	 CD Burner
 	  	 4012CRD/00361016842
 	  	 400.00
 	  	 400.00
 
	 38
 	  	 1
 	  	 BTC-Video CD Player
 	  	 VCSSE1SBC/S6C230205
 	  	 500.00
 	  	 500.00
 
	 39
 	  	 2
 	  	 Wall Panels
 	  	  	  	 300.00
 	  	 600.00
 
	 40
 	  	 1
 	  	 Yamaha CDR
 	  	 CRW8424SX/ECE0002918
 	  	 500.00
 	  	 500.00
 
	 41
 	  	 1
 	  	 Sherwood Newcastle Audio Video/Receiver
 	  	 R-945/A98035160196
 	  	 500.00
 	  	 500.00
 
	 
	  	  	  	  	  	  	 TOTAL ASSETS
 	  	  	  	 71,795.35Prepared by R.R. Donnelley Financial -- Lease Agreement

  
 EXHIBIT 10.5 
  
 AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION 
 STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE—NET 
  
 (DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS) 
  
 1.    Basic Provisions (“Basic Provisions”). 
  
 1.1    Parties: This Lease (“Lease”), dated for reference purposes only, March 10, 2001, is made by and between Kathy Schreiber, Todd Lorber and Hiroko Lorber (“Lessor”)
and NuTech Digital. Inc., a California Corporation (“Lessee”), (collectively the “Parties,” or individually a “Party”). 
  
 1.2    Premises: That certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, and commonly known
as 7900 Gloria Avenue, located in the County of Los Angeles, State of California, and generally described as (describe briefly the nature of the property and, if applicable, the “Project”, if the property is
located within a Project) +/- 9,200 square foot office/warehouse building situated on M-2 zoned land. (“Premises”). (See also Paragraph 2) 
  
 1.3    Term: Five (5) years and Three (3) months (“Original Term”) commencing May 1, 2001 (“Commencement
Date”) and ending July 31 , 2006 (“Expiration Date”). (See also Paragraph 3) 
  
 1.4    Early Possession: Upon completion of building (“Early Possession Date”). (See also Paragraphs 3.2 and 3.3) 
  
 1.5    Base Rent: $7,800.00 per month (“Base Rent”), payable on the First day of each month commencing July 1, 2001. (See
also Paragraph 4 ) 
  
 x    If this box is
checked, there are provisions in this Lease for the Base Rent to be adjusted. 
  
 1.6    Base Rent: Paid
Upon Execution: $7,800.00 as Base Rent for the period June, 2001. 
  
 1.7    Security Deposit:
$7,800.00 (“Security Deposit”). (See also Paragraph 5) 
  
 1.8    Agreed Use:
warehousing of electronic components. DVD discs. general office and related lawful uses. (See also Paragraph 6) 
  
 1.9    Insuring Party: Lessor is the “Insuring Party” unless otherwise stated herein. (See also Paragraph 8) 
  
 1.10    Real Estate Brokers: (See also Paragraph 15) 
  
 (a)  Representation: The following real estate brokers (collectively, the “Brokers”) and brokerage relationships exist in this transaction (check applicable boxes): 

 
 x    Grubb & Ellis Company represents Lessor exclusively
(“Lessor’s Broker”); 
  
 x    Capital Commercial Real Estate Services represents Lessee exclusively (“Lessee’s Broker”); or 
  
  ̈                                      
       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 Broker the fee agreed to in their separate written agreement (or if there is no such agreement, the sum of
     % of the total Base Rent for the brokerage services rendered by said Broker). 
  
 1.11    Guarantor.    The obligations of the Lessee under this Lease are to be guaranteed by                 
(“Guarantor”). (See also Paragraph 37) 
  
 1.12    Addenda and
Exhibits.    Attached hereto is an Addendum or Addenda consisting of Paragraphs 50 through 56 and Exhibits “A”, all of which constitute a part of this Lease. 
  
 2.    Premises. 
  
         2.1    Letting.    Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, and upon all
of the terms, covenants and conditions set forth in this Lease. Unless otherwise provided herein, any statement of size set forth in this Lease, or that may have been used in calculating rental, is an approximation which the Parties agree is
reasonable and the rental based thereon is not subject to revision whether or not the actual size is more or less. 
  
 2.2    Condition.    Lessor shall deliver the Premises 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 within thirty (30) days following the Start Date, warrants that the existing electrical, plumbing, fire sprinkler, lighting,
heating, ventilating and air conditioning systems (“HVAC”), loading doors, if any, and all other such elements in the Premises, other than those constructed by Lessee, shall be in good operating condition on said date and that the
structural elements of the roof, bearing walls and foundation of any buildings on the Premises (the “Building”) shall be free of material defects. If a non-compliance with said warranty exists as of the Start Date, 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, rectify same at
Lessor’s expense. If, after the Start Date, Lessee does not give Lessor written notice of any non-compliance with this warranty within: (i) one year as to the surface of the roof and the structural portions of the roof, foundations and bearing
walls, (ii) six (6) months as to the HVAC systems, (iii) thirty (30) days as to the remaining systems and other elements of the Building, correction of such non-compliance shall be the obligation of Lessee at Lessee’s sole cost and expense.

  
 2.3    Compliance.    Lessor warrants that the improvements on the Premises
comply with all applicable laws, covenants or restrictions of record, building codes, regulations and ordinances (“Applicable Requirements”) in effect on the Start Date. Said warranty does not apply to the use to which Lessee
will put the Premises or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible for determining whether or not the zoning is 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 six (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 (as opposed to being in existence at the Start Date, which is addressed in Paragraph 6.2(e) below) so
as to require during the term of this Lease the construction of an addition to or an alteration of the Building, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the 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 two (2) years of this Lease and the cost thereof exceeds six (6) months’ Base Rent, Lessee may instead terminate this Lease unless Lessor notifies Lessee, in writing, within ten (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 six (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 ninety (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 such costs pursuant to the provisions of
Paragraph 7.1(c); provided, however, that if such Capital Expenditure is required during the last two 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 ninety (90) days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within ten (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 thirty (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 be fully responsible for the cost thereof, and 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 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 therefore as the same relate to its occupancy of the Premises; and (c) neither Lessor, Lessor’s agents, nor any Broker has 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: (a) Broker has made no representations, promises or warranties concerning Lessee’s ability to honor
the Lease or suitability to occupy the Premises; and (b) 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. 
  
 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 Real Property Taxes and insurance premiums and to maintain the Premises) shall, however, be in effect during such period. Any such early possession shall not affect the Expiration Date.

  
 3.3    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 therefore, nor shall such failure
affect the validity of this Lease. Lessee shall not, however, be obligated to pay Rent or perform its other obligations until it receives possession of the Premises. If possession is not delivered within sixty (60) days after the Commencement Date,
Lessee may, at its option, by notice in writing within ten (10) days after the end of such sixty (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 ten (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 four (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.    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. Rent for any period during the term hereof which is for less than one (1) 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. 
  
 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 said Security Deposit, Lessee shall within ten (10) days after written request therefore 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 said change in financial condition. Lessor shall not be required to keep the Security Deposit separate from its general accounts. Within fourteen (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 thirty (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 owners and/or occupants of, or causes damage to neighboring properties. 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 improvements on the Premises or the mechanical or electrical systems therein, is not significantly more burdensome to the
Premises. If Lessor elects to withhold consent, Lessor shall within five (5) business days after such request give written notification of same, which notice shall include an explanation of Lessor’s objections to the change in use.

  
 6.2    Hazardous Substances. 
  
         (a)  Reportable Uses Require Consent.    The term “Hazardous Substance” as used in this Lease shall mean any
product, substance, 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, so 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 therefore. 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 shall 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, 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 adjacent properties). 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 existed as a result of Hazardous Substances on the Premises prior to the Start Date 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)  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 the Start Date, 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)  Lessor Termination Option.    If a Hazardous Substance Condition occurs during the term of this Lease, unless Lessee is legally
responsible therefore (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 twelve (12) times the then monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee, within thirty (30) days after receipt by Lessor
of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor’s desire to terminate this Lease as of the date sixty (60) days following the date of such notice. In the event Lessor elects to give a termination notice, Lessee
may, within ten (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 twelve (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 thirty (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 the Premises, without regard to whether said
requirements are now in effect or become effective after the Start Date. Lessee 

  
 shall, within ten (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. 
  
 6.4    Inspection; Compliance.    Lessor and Lessor’s “Lender” (as defined in Paragraph 30 below) and consultants shall have
the right to enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such
inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a contamination 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 inspections, so long as such inspection is reasonably related to the violation or contamination. 
  
 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, 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, heating, ventilating, air-conditioning electrical lighting facilities, boilers, pressure vessels, fire protection system, fixtures, walls (interior and exterior), foundations, ceilings, roofs, floors,
windows, doors, plate glass, skylights, landscaping, driveways, parking lots, fences, retaining walls, signs, sidewalks and parkways located in, on, or adjacent to the Premises. 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. Lessee shall, during the term of this Lease, keep the exterior appearance of the Building in a first-class
condition consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including, when necessary, the exterior repainting of the Building. 
  
 (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) fire
extinguishing systems, including fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof covering and drains, (vi) driveways and parking lots, (vii) clarifiers (viii) basic utility feed to the perimeter of the Building,
and (ix) any other equipment, if reasonably required by Lessor. 
  
 (c)  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 the Basic Elements 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 Basic Elements, then such Basic Elements 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 the number of months of the useful life of such replacement as such useful life is specified pursuant to Federal income tax
regulations or guidelines for depreciation thereof (including interest on the unamortized balance as is then commercially reasonable in the judgment of Lessor’s accountants), with Lessee reserving the right to prepay its obligation at any time.

  
 7.2    Lessor’s Obligations.    Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all of
which obligations are intended to be that of the Lessee. It is the intention of the Parties that the terms of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises, and they expressly waive 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; Consent Required.    The term “Utility Installations” refers to all floor and window coverings, air lines, power panels,
electrical distribution, security and fire protection systems, communication systems, 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). 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, and the cumulative cost thereof during this Lease as extended does not exceed $50,000 in the
aggregate or $10,000 in anyone year. 
  
 (b)  Consent.    Any Alterations or Utility
Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with 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 equal to the greater of one month’s Base Rent, or $10,000, Lessor may condition its consent upon Lessee providing a lien and completion bond in an amount equal to one and one-half times the estimated cost of such
Alteration or Utility Installation and/or upon Lessee’s posting an additional Security Deposit with Lessor. 
  
 (c)  Indemnification.    Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or may
be secured by any mechanic’s or materialmen’s lien against the Premises or any interest therein. Lessee shall give Lessor not less than ten (10) days’ notice prior to the commencement of any work in, on or about the Premises, and
Lessor shall have the right to post notices of non-responsibility. 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 one and one-half times 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, 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 ninety (90) and not later
than thirty (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. 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, and the removal, replacement, or remediation of any soil, material or groundwater contaminated by Lessee. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. 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 For
Insurance.    Lessee shall pay for all insurance required under Paragraph 8 except to the extent of the cost attributable to liability insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per occurrence.
Premiums for policy periods commencing prior to or extending beyond the Lease term shall be prorated to correspond to the Lease term. Payment shall be made by Lessee to Lessor within ten (10) days following receipt of an invoice. 

 
 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
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 $2,000,000 per occurrence with an “Additional Insured-Managers or Lessors of Premises Endorsement” and contain the “Amendment of the Pollution Exclusion Endorsement” for
damage caused by heat, smoke or fumes from a hostile fire. The Policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an ‘insured
contract’ for the performance of Lessee’s indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. All insurance carried by
Lessee 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.    The Insuring Party shall obtain and keep in
force a policy or policies in the name of Lessor, with loss payable to Lessor, any groundlessor, and to any Lender(s) insuring loss or damage to the Premises. The amount of such insurance shall be equal to the full replacement cost of the Premises,
as the same shall exist from time to time, or the amount required by any Lenders, but in no event more than the commercially reasonable and available insurable value thereof. If Lessor is the Insuring Party, however, Lessee Owned Alterations and
Utility Installations, Trade Fixtures, and Lessee’s personal property shall be insured by Lessee under Paragraph 8.4 rather than by Lessor. 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, and Lessee shall be liable for such deductible amount in the event of an Insured Loss. 
  
 (b)  Rental Value.    The Insuring Party shall 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 (1) year. Said insurance shall provide that in the event the Lease is terminated by reason of an insured loss, the period of indemnity for such coverage shall be
extended beyond the date of the completion of repairs or replacement of the Premises, to provide for one full year’s loss of Rent from the date of any such loss. Said insurance shall contain an agreed valuation provision in lieu of any
coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next twelve (12) month period. Lessee shall be liable for any deductible amount in the event of such loss.

  
 (c)  Adjacent Premises.    If the Premises are part of a larger building, or of a group of
buildings owned by Lessor which are adjacent to the Premises, the Lessee shall pay for any increase in the premiums for the property insurance of such building or buildings if said increase is caused by Lessee’s acts, omissions, use or
occupancy of the Premises. 
  
 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 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 Lessee or 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 B+, V, 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 thirty (30) days prior written notice to Lessor. Lessee shall, at least thirty (30) days prior to the
expiration of such policies, furnish Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to
Lessor upon demand. 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, so 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, 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 of which the Premises are a part, 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. Notwithstanding Lessor’s negligence or breach of this Lease, Lessor shall under no circumstances be liable for injury to Lessee’s business or for any loss of income or profit therefrom.

  
 9.    Damage or Destruction. 
  
 9.1    Definitions. 
  
 (a)  “Premises Partial
Damage” shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired in six (6) months or less from the date of the damage or
destruction. Lessor shall notify Lessee in writing within thirty (30) days from the date of the damage or destruction as to whether or not the damage is Partial or Total. 
  
 (b)  “Premises Total Destruction” shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations and Trade
Fixtures, which cannot reasonably be repaired in six (6) months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within thirty (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. 
  
 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 not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds (except as to the deductible which is Lessee’s responsibility) 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 ten (10) days following
receipt of written notice of such shortage and request therefore. If Lessor receives said funds or adequate assurance thereof within said ten (10) day period, the party responsible for making the repairs shall complete them as soon as reasonably
possible and this Lease shall remain in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within ten (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 have this Lease terminate thirty (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 thirty (30) days
after receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be effective sixty (60) days following the date of such notice. In the event Lessor elects to terminate this Lease, Lessee shall have the right within ten
(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 thirty (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 sixty (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 six (6) months of this Lease there is
damage for which the cost to repair exceeds one (1) month’s Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective sixty (60) days following the date of occurrence of such damage by giving a written termination
notice to Lessee within thirty (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 ten 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 ninety (90) days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration, give written
notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee’s election to terminate this Lease on a date not less than sixty (60) days following the giving of such notice. If Lessee gives such notice and such repair or
restoration is not commenced within thirty (30) days thereafter, this Lease shall terminate as of the date specified in said notice. If the repair or restoration is commenced within said thirty (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    Definition of “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 Premises, 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 Building
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 Premises are located. The term “Real Property Taxes” shall also include any tax, fee,
levy, assessment or charge, or any increase therein, imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership of the Premises. 
  

10.2 
  
         (a)  Payment of
Taxes.    Lessee shall pay the Real Property Taxes applicable to the Premises during the term of this Lease. Subject to Paragraph 10.2(b), all such payments shall be made at least ten (10) days prior to any delinquency date.
Lessee shall promptly furnish Lessor with satisfactory evidence that such taxes have been paid. If any such taxes shall cover any period of time prior to or after the expiration or termination of this Lease, Lessee’s share of such taxes shall
be prorated to cover only that portion of the tax bill applicable to the period that this Lease is in effect, and Lessor shall reimburse Lessee for any overpayment. If Lessee shall fail to pay any required Real Property Taxes, Lessor shall have the
right to pay the same, and Lessee shall reimburse Lessor therefore upon demand. 
  
 (b)  Advance
Payment.    In the event Lessee incurs a late charge on any Rent payment, Lessor may, at Lessor’s option, estimate the current Real Property Taxes, and require that such taxes be paid in advance to Lessor by Lessee,
either: (i) in a lump sum amount equal to the installment due, at least twenty (20) days prior to the applicable delinquency date, or (ii) monthly in advance with the payment of the Base Rent. If Lessor elects to require payment monthly in advance,
the monthly payment shall be an amount equal to the amount of the estimated installment of taxes divided by the number of months remaining before the month in which said installment becomes delinquent. When the actual amount of the applicable tax
bill is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable taxes. If the amount collected by Lessor is insufficient to pay such Real Property Taxes when due,
Lessee shall pay Lessor, upon demand, such additional sums as are necessary to pay such obligations. All monies paid to Lessor under this Paragraph may be intermingled with other monies of Lessor and shall not bear interest. In the event of a Breach
by Lessee in the performance of its obligations under this Lease, then any balance of funds paid to Lessor under the provisions of this Paragraph may, at the option of Lessor, be treated as an additional Security Deposit. 
  
 10.3    Joint Assessment.    If the Premises are not separately assessed, Lessee’s liability shall
be an equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be conclusively determined by Lessor from the respective valuations assigned in the
assessor’s work sheets or such other information as may be reasonably available. 
  
 10.4    Personal
Property Taxes.    Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of
Lessee. When possible, Lessee shall cause such property to be assessed and billed separately from the real property of Lessor. If any of Lessee’s said personal property shall be assessed with Lessor’s real property, Lessee shall pay Lessor
the taxes attributable to Lessee’s property within ten (10) days after receipt of a written statement. 
  
 11.    Utilities.    Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes
thereon. If any such services are not separately metered to Lessee, Lessee shall pay a reasonable proportion, to be determined by Lessor, of all charges jointly metered. 
  
 12.    Assignment and Subletting. 
  
 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”) or sublet all or any part of Lessee’s interest in this Lease or in the Premises without Lessor’s prior written consent. 

 
 (b)  A change in the control of Lessee shall constitute an assignment requiring consent. The transfer, on a cumulative basis, of
twenty-five percent (25%) or more of the voting control of Lessee shall constitute a change in control for this purpose. 
  
 (c)  The involvement of Lessee or its assets in any transaction, or series of transactions (by way of merger, sale, acquisition, financing, 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 twenty-five percent (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 thirty (30)
days written notice, increase the monthly Base Rent to one hundred ten percent (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 one hundred ten percent (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 One Hundred
Ten Percent (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. 
  
 12.2    Terms and Conditions
Applicable to Assignment and Subletting. 
  
 (a)  Regardless of Lessor’s consent, any assignment or subletting
shall not: (i) be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease; (ii) release Lessee of any obligations hereunder: or (iii) 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 $1,000 or ten percent (10%) of the current monthly Base Rent applicable to the portion of the Premises which is the subject of the proposed assignment or
sublease, whichever is greater, 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. 

 
 (f)  Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment or entering into such sublease,
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. 
  
 12.3    Additional Terms and Conditions Applicable to Subletting.    See Addendum for additional provisions. 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 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. 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 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 three (3) business days
following written notice to Lessee. 
  
         (c)  The failure by Lessee to provide (i) reasonable
written evidence of compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignment or subletting, (iv) a Estoppel Certificate, (v) a requested subordination, (vi) evidence concerning any
guaranty and/or Guarantor, (vii) any document requested under Paragraph 42 (easements), or (viii) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues
for a period of ten (10) days following written notice to Lessee. 
  
 (d)  A Default by Lessee as to the terms,
covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, other than those described in subparagraphs 13.1 (a), (b) or (c), above, where such Default continues for a period of thirty (30) days after
written notice; provided, however, that if the nature of Lessee’s Default is such that more than thirty (30) days are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said thirty
(30) day period and thereafter diligently prosecutes such cure to completion. 
  
 (e)  The occurrence of any of the
following events: (i) the making 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 sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where
possession is not restored to Lessee within thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such
seizure is not discharged within thirty (30) days, provided, however, in the event that any provision of this subparagraph 13.1 (e) is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the
remaining provisions. 
  
 (f)  The discovery 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 10 honor the guaranty; or (v) a Guarantor’s breach of its guaranty obligation on an anticipatory basis, and Lessee’s failure, within sixty (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 ten (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. The costs and expenses of any such performance by Lessor shall be due and payable by Lessee upon receipt of invoice therefore. If any check given to Lessor by Lessee shall not be
honored by the bank upon which it is drawn, Lessor, at its option, may require all future payments to be made by Lessee to be by cashier’s check. 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; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss
that the Lessee proves could have been reasonably avoided; (iii) the worth at the time of 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 (1%). 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 perform or quit 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 five (5) days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a one-time late charge equal to ten percent (10%) of each such overdue amount. The Parties hereby agree that such late charge represents a fair and reasonable estimate of
the costs Lessor will incur by reason of 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 three (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 thirty (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 thirty-first (31st) day after it was due as to non-scheduled payments. The interest (“Interest”)
charged shall be equal to the prime rate reported in the Wall Street Journal as published closest prior to the date when due plus four percent (4%), 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 thirty (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 thirty (30) days
are reasonably required for its performance, then Lessor shall not be in breach if performance is commenced within such thirty (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 thirty (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 an amount equal to the greater of one month’s Base
Rent or the Security Deposit, and to pay an excess of such expense under protest, reserving Lessee’s right to reimbursement from Lessor. 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 ten
percent (10%) of any building portion of the Premises, or more than twenty-five percent (25%) of the land area portion of the Premises not occupied by any building, is taken by Condemnation, Lessee may, at Lessee’s option, to be exercised in
writing within ten (10) days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within ten (10) days after the condemning authority shall have taken possession) terminate this Lease as of the date
the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall
be reduced in 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 therefore. 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.    Brokers’ Fee. 
  
 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 any rights to the Premises or other premises owned by Lessor and located within the same Project, if any, within which the Premises is located, (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 said 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. Each Broker shall be a third party beneficiary of the provisions of
Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to a Broker any amounts due as and for commissions 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 ten (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. 
  
 15.3    Representations and Indemnities of Broker Relationships.    Lessee and Lessor each represent and warrant to the other that it has
had no dealings with any person, firm, broker or finder (other than the Brokers, if any) in connection with this Lease, and that no one other than said 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, and/or attorneys’ fees reasonably incurred with respect thereto. 
  
 16.    Estoppel Certificates. 
  
 (a)  Each Party (as “Responding
Party”) shall within ten (10) days after written notice from the other Party (the “Requesting Party”) execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current
“Estoppel Certificate” form published by the American Industrial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party. 
  
 (b)  If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such ten 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
(iii) if Lessor is the Requesting Party, not more than one month’s Rent has been paid in advance. Prospective purchasers and encumbrances 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 three (3) years. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth. 

 
 17.    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. Notwithstanding the above, and subject to the provisions of Paragraph 20 below, the original Lessor under this Lease, and all subsequent holders of the Lessor’s interest in this Lease shall
remain liable and responsible with regard to the potential duties and liabilities of Lessor pertaining to Hazardous Substances as outlined in Paragraph 6 above. 
  
 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.    Subject to the provisions of Paragraph 17 above, the obligations of Lessor under this Lease shall not constitute personal obligations of Lessor, the individual partners of Lessor or its or their individual
partners, 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 the individual
partners of Lessor, or its or their individual partners, 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 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 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 forty-eight (48) hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantee next day
delivery shall be deemed given twenty-four (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,
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.    Recording.    Either Lessor or Lessee shall, upon request of the other, execute, acknowledge and deliver to the other a short form memorandum of this Lease for
recording purposes. The Party requesting recordation shall be responsible for payment of any fees applicable thereto. 
  
 26.    No
Right To Holdover.    Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over, then the Base Rent shall be increased
to one hundred fifty percent (150%) of the Base Rent applicable during the month 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 “Lessor’s 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 recording thereof. 
  
 30.2    Attornment.    Subject to the non-disturbance provisions of Paragraph 30.3, Lessee agrees to attorn to a Lender or any other party who acquires ownership of the Premises by reason of a
foreclosure of a Security Device, and that in the event of such foreclosure, such new owner shall not: (i) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of ownership; (ii) be subject
to any offsets or defenses which Lessee might have against any prior lessor; or (iii) be bound by prepayment of more than one (1) month’s rent. 
  
 30.3    Non-Disturbance.    With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee’s subordination of this Lease shall be
subject to receiving 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 sixty (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 sixty (60) days,
then Lessee may, at Lessee’s option, directly contact Lessor’s 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 to enforce the terms hereof 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 Breach. 
  
 32.    Lessor’s Access; Showing Premises; Repairs.    Lessor and Lessor’s
agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times for the purpose of showing the same to prospective purchasers, lenders, or lessees, and making such alterations, repairs,
improvements or additions to the Premises as Lessor may deem necessary. All such activities shall be without abatement of rent or liability to Lessee. Lessor may at any time place on the Premises any ordinary “For Sale” signs and
Lessor may during the last six (6) months of the term hereof place on the Premises any ordinary “For Lease” signs. Lessee may at any time place on or about the Premises any ordinary “For Sublease” sign.

  
 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.    Except for ordinary “For Sublease” signs, Lessee shall not place any sign upon the Premises without Lessor’s prior written consent. All
signs must comply with all Applicable Requirements. Lessor shall have sole discretion to approve the method of attachment of any signange. 
  
 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 anyone or all existing subtenancies. Lessor’s
failure within ten (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 not 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 therefore. 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 ten (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 American Industrial Real Estate Association, and each such Guarantor shall have the same obligations as Lessee under this Lease. 
  
 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) a Tenancy Statement, 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. 
  
 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 Lessee has on other property of Lessor; (b)
the right of first refusal or first offer to lease either the Premises or other property of Lessor; (c) the right to purchase or the right of first refusal to purchase the Premises or other property of Lessor. 
  
 39.2    Options Personal To Original Lessee.    Each 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 three (3) or more notices of separate Default, whether or not the Defaults are
cured, during the twelve (12) month period immediately preceding the exercise of the Option. 
  
 (b)  The period of time
within which an Option may be exercised shall not be extended or enlarged by reason of Lessee’s inability to exercise an Option because of the provisions of Paragraph 39.4(a). 
  
 (c)  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, (i) Lessee fails to pay Rent for a period of thirty (30) days after such Rent becomes due (without any necessity of Lessor to give notice thereof), (ii) Lessor gives to Lessee three (3) or more notices of
separate Default during any twelve (12) month period, whether or not the Defaults are cured, or (iii) if Lessee commits a Breach of this Lease. 
  
 40.    Multiple Buildings.    If the Premises are a part of a group of buildings controlled by Lessor, Lessee agrees that it will observe all reasonable rules and regulations which Lessor may
make from time to time for the management, safety, and care of said properties, including the care and cleanliness of the grounds and including the parking, loading and unloading of vehicles, and that Lessee will pay its fair share of common
expenses incurred in connection therewith. 
  
 41.    Security Measures.    Lessee hereby acknowledges that
the rental payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises,
Lessee, its agents and invitees and their property from the acts of third parties. 
  
 42.    Reservations.    Lessor reserves to itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems
necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents
reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions. 
  
 43.    Performance Under
Protest.    If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is asserted shall have
the right to make payment “under protest” and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that
there was no legal 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. 
  
 44.    Authority.    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 thirty (30) days after request, deliver to the other
Party satisfactory evidence of such authority. 
  
 45.    Conflict.    Any conflict between the printed
provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 
  
 46.    Offer.    Preparation of this Lease by 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. 
  
 47.    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. 
  
 48.    Multiple Parties.    If more than one person or entity is named herein as either Lessor or Lessee, such multiple Parties shall have joint and several responsibility to comply with the
terms of this Lease. 
  
 49.    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  ̈ is not attached to this Lease. 
  
 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 AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY NY 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, AND THE
SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE.
  
 WARNING: IF THE PREMISES IS 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 IS LOCATED.
 
	

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

  
 
	 Executed at:
 	 	  	  	  	 	 Executed at:
 	 	  
	 	
	
	 	 	 	 	
	

	 on:
 	 	 3/15/01
 	  	  	 	 on:
 	 	 3/14/01
 
	 	
	
	 	 	 	 	
	

	 By LESSOR:
 	 	  	  	  	 	 By LESSEE:
 	 	  
	 Kathy Schriber, Todd Lorber and Hiroko Lorber
 	  	  	 	 NuTech Digital, Inc., a California Corporation
 
	
	 	 	
	

	 By:
 	 	 /s/    KATHY SCHRIBER
 	  	  	 	 By:
 	 	 /s/    LEE KASPER
 
	 	
	
	 	 	 	 	
	

	 Name Printed:
 	 	 Kathy Schriber
 	  	  	 	 Name Printed:
 	 	 Lee Kasper
 
	 	
	
	 	 	 	 	
	

	 Title:
 	 	 K
 	  	  	 	 Title:
 	 	 President
 
	 	
	
	 	 	 	 	
	

	 By:
 	 	 /s/    TODD LORBER
 	 	 /s/    HIROKO LORBER
 	  	  	 	 By:
 	 	  
	 	
	
	
	
	 	 	 	 	
	

	 Name Printed:
 	 	 Todd Lorber
 	 	 Hiroko Lorber
 	  	  	 	 Name Printed:
 	 	  
	 	
	
	
	
	 	 	 	 	
	

	 Title:
 	 	  	  	  	 	 Title:
 	 	  
	 	
	
	 	 	 	 	
	

	 Address:
 	 	 16625 Saticoy Street
 	  	  	 	 Address:
 	 	 15210 Keswick Street
 
	 	
	
	 	 	 	 	
	

	  	 	 Van Nuys, CA 91406
 	  	  	 	  	 	 Van Nuys, CA 91405
 
	 	
	
	 	 	 	 	
	

	 Telephone:
 	 	 (818) 787-2000
 	  	  	 	 Telephone:
 	 	 (818) 994-3831
 
	 	
	
	 	 	 	 	
	

	 Facsimile:
 	 	 (818)
 	  	  	 	 Facsimile:
 	 	 (818) 994-1575
 
	 	
	
	 	 	 	 	
	

	 Federal ID No.
 	 	  	  	  	 	 Federal ID No.
 	 	  
	 	
	
	 	 	 	 	
	

 
  
 NOTE: These forms are often modified to meet the changing requirements of law and industry needs. Always
write or call to make sure you are utilizing the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 So. Flower Street, Suite 600, Los Angeles California 90017. (213) 687-8777. Fax No. (213) 687-8616 

  
 ADDENDUM TO LEASE DATED MARCH 10, 2001 
 BY KATHY SCHREIBER, TODD LORBER AND HIROKO LORBER AS 
 LESSOR AND NUTECH DIGITAL INC. 
 A CALIFORNIA CORPORATION AS LESSEE 
  
 12.3a cont.)  In the event Lessee subleases the premises for
an amount greater than Lessee’ s costs, any overages shall be shared equally after Lessee’s expenses of subleasing have been accounted for. 
  
 50)  Abated Rent: Lessee shall pay no base rent for the month of May, 2001. Lessee shall, however be responsible for property insurance, real property taxes, and all utilities during this period. 
  
 51)  Lessor’s Construction: Lessor, at Lessor’s sole cost and expense, shall complete the building per the existing plans. In addition, Lessor shall
at its cost and expense, partition the upstairs offices as per Exhibit “A” attached hereto. 
  
 52)  Lessee’s Construction:
As a consideration for the abated rent referenced in paragraph 50, Lessee agrees to construct approximately 1,200 square feet of air-conditioned offices on the ground floor of the building and to construct two (2) additional restrooms on the
mezzanine level. All improvements shall be performed in accordance with local building codes and in a workmanlike manner. 
  
 53)  Lessee’s Right to Install HVAC: Lessee shall have the right to install HVAC in the warehouse area, provided Lessee installs said equipment according to current building codes. Lessee hereby agrees and acknowledges
that it shall not penetrate the roof membrane, nor install equipment on the roof without the prior approval of Lessor, and that any such penetration or installation could violate the roof warranty. 
  
 54)  Yard Maintenance: Lessee shall not store any equipment, materials or vehicles in the yard area without Lessor’s consent. Lessee agrees to maintain the
yard in a first class condition, free of debris. 
  
 
	  	 	  	 	  
	 
	  	 	 TL    KS    HL
 	 	  	 	  	 	 /s/    LEE KASPER
 
	 	
	
	 	 	 	 	
	

	  	 	 LESSOR
 	 	  	 	  	 	 LESSEE
 

 

  
 RENT ADJUSTMENT(S) 
 STANDARD LEASE ADDENDUM 
  
 Dated    March 10. 2001

  
 
	 By and Between
 	 	 (Lessor)    Kathy Schreiber, Todd Lorber and Hiroko Lorber
 
	  	 	 (Lessee)    NuTech Digital Inc., a California Corporation
 
	  	 	 Address of Premises:    7900 Gloria Avenue Van Nuys. CA 91406
 

 
  
 Paragraph 55  
  
 A.    RENT ADJUSTMENTS: 
 The monthly rent for each month of the adjustment period(s) specified
below shall be increased using the method(s) indicated below: 
  
 (Check Method(s) to be Used and Fill in
Appropriately) 
  
 x    I.    Cost of
Living Adjustment(s) (COLA) 
  
 a.  On (Fill in COLA Dates): May 1, 2002, May 1, 2003, May 1, 2004, May 1, 2005
the Base Rent shall be adjusted by the change, if any, from the Base Month specified below, in the Consumer Price Index of the Bureau of Labor Statistics of the U.S. Department of Labor for (select one):  ̈ CPI W (Urban Wage Earners and Clerical Workers) or þ CPI U (All Urban Consumers), for (Fill in Urban Area): Los Angeles, Anaheim. Riverside,

  
 All Items (1982-1984 =100), herein referred to as “CPI”. 
  
 b.  The monthly rent payable in accordance with paragraph A.I.a. of this Addendum shall be calculated as follows: the Base Rent set forth in paragraph 1.5 of the attached
Lease, shall be multiplied by a fraction the numerator of which shall be the CPI of the calendar month 2 months prior to the month(s) specified in paragraph A.I.a. above during which the adjustment is to take effect, and the denominator of which
shall be the CPI of the calendar month which is 2 months prior to (select one): þ the first month of the term of this Lease as set forth in paragraph 1.3 (“Base Month”) or  ̈ (Fill in Other “Base Month”):        . The sum so calculated shall constitute the new monthly rent hereunder, but
in no event, shall any such new monthly rent be less than the rent payable for the month immediately preceding the rent adjustment. 
  
 c.  In the event the compilation and/or publication of the CPI shall be transferred to any other governmental department or bureau or agency or shall be discontinued, then the index most nearly the same as the CPI shall be used to
make such calculation. In the event that the Parties cannot agree on such alternative index, then the matter shall be submitted for decision to the American Arbitration Association in accordance with the then rules of said Association and the
decision of the arbitrators shall be binding upon the parties. The cost of said Arbitration shall be paid equally by the Parties. 
  
 C.    BROKER’S FEE: 
 The Brokers shall be paid a Brokerage Fee for each adjustment specified above in accordance with paragraph 15 of the Lease

  

	NOTE:
	 
	These forms are often modified to meet changing requirements of law and needs of the industry . Always write or call to make sure you are utilizing the most current form:
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 S. FLOWER STREET, SUITE 600, Los Angeles, Calif. 90017. 
 

  
 OPTION(S) TO EXTEND 
 STANDARD LEASE ADDENDUM 
  
  
 Dated    March 10. 2001 
  
 
	 By and Between
 	 	 (Lessor)    Kathy Schreiber, Todd Lorber and Hiroko Lorber
 
	  	 	 (Lessee)    NuTech Digital Inc., a California Corporation
 
	 Address of Premises:
 	 	 7900 Gloria Avenue Van Nuys. CA 91406
 

 
  
 Paragraph 56  
  
 A.    OPTION(S) TO EXTEND: 
 Lessor hereby grants to Lessee the option to extend the term of
this Lease for One ( 1) additional Sixty ( 60) month period(s) commencing when the prior term expires upon each and all of the following terms and conditions: 
  
 (i)  In order to exercise an option to extend, Lessee must give written notice of such election to Lessor and Lessor must receive the same at least 3 but not more than 6 months prior to the
date that the option period would commence, time being of the essence. If proper notification of the exercise of an option is not given and/or received, such option shall automatically expire. Options (if there are more than one) may only be
exercised consecutively. 
  
 (ii)  The provisions of paragraph 39, including those relating to Lessee’s Default set forth in paragraph 39.4
of this Lease, are conditions of this Option. 
  
 (iii)  Except for the provisions of this Lease granting an option or options to extend the term,
all of the terms and conditions of this Lease except where specifically modified by this option shall apply. 
  
 (iv)  This Option 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 without the intention of thereafter assigning or subletting.

  
 (v)  The monthly rent for each month of the option period shall be calculated as follows, using the method(s) indicated below: 

 
 (Check Method(s) to be Used and Fill in Appropriately) 
  
 x    I.    Cost of Living Adjustment(s) (COLA) 
  
 a.  On (Fill in COLA Dates): August 1, 2006, August 1, 2007, August 1, 2008, August 1, 2009, August 1, 2010 the Base Rent shall be adjusted by the change, if any, from the Base Month specified below, in the Consumer Price
Index of the Bureau of Labor Statistics of the U.S. Department of Labor for (select one):  ̈ CPI W (Urban Wage Earners and Clerical Workers) or
x CPI U (All Urban Consumers), for (Fill in Urban Area): Los Angeles, Anaheim, Riverside 
  
 All Items (1982-1984=100), herein referred to as “CPI”. 
  
 b.  The monthly
rent payable in accordance with paragraph A.I.a. of this Addendum shall be calculated as follows: the Base Rent set forth in paragraph 1.5 of the attached Lease, shall be multiplied by a fraction the numerator of which shall be the CPI of the
calendar month 2 months prior to the month(s) specified in paragraph A.I.a. above during which the adjustment is to take effect, and the denominator of which shall be the CPI of the calendar month which is 2 months prior to (select one):
 ̈ the first month of the term of this Lease as set forth in paragraph 1.3 (“Base Month”) or x (Fill
in Other “Base Month”): May 1, 2001. The sum so calculated shall constitute the new monthly rent hereunder, but in no event, shall any such new monthly rent be less than the rent payable for the month immediately preceding the rent
adjustment. 
  
 c.  In the event the compilation and/or publication of the CPI shall be transferred to any other
governmental department or bureau or agency or shall be discontinued, then the index most nearly the same as the CPI shall be used to make such calculation. In the event that the Parties cannot agree on such alternative index, then the matter shall
be submitted for decision to the American Arbitration Association in accordance with the then rules of said Association and the decision of the arbitrators shall be binding upon the parties. The cost of said Arbitration shall be paid equally by the
Parties. 
  
 C.    BROKER’S FEE: 
 The Brokers shall be paid a
Brokerage Fee for each adjustment specified above in accordance with paragraph 15 of the Lease. 
  

	NOTE:
	 
	These forms are often modified to meet changing requirements of law and needs of the industry. Always write or call to make sure you are utilizing the most current form:
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 S. FLOWER STREET, SUITE 600, Los Angeles, Calif. 90017.

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