Document:

EXHIBIT 10.23

 

[LOGO]  AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION 

 

STANDARD SUBLEASE

(Long-form to be used with pre-1996 AIR
leases)

 

1.         Parties.
 This sublease
dated for reference purposes only November 1, 2000, is made by and between
ValueClick, Inc., a Delaware corporation ("Sublessor") and
BioEnterics Corporation, a California corporation ("Sublessee")

 

2.         Premises.  Sublessor hereby subleases to Sublessee and
Sublesee hereby subleases from Sublessor for the term, at the rental, and upon
all of the conditions set forth herein, that certain real property, including
all improvements therein, and commonly known by the street address of 6430 Via
Real located in the County of Santa Barbara, State of California and generally
described as (describe briefly the nature of the property) 6430 Via Real
(Building C), Suites 1 and 2, consisting of approximately 2,750 square feet ("Premises").

 

3.         Term.

 

3.1      Term.  The term of this Sublease shall be for
21-1/2 months commencing on December 15, 2000 and ending on September 30, 2002
unless sooner terminated pursuant to any provision hereof.

 

3.2      Delay
in Commencement. 
Sublessor agrees to use its best commercially reasonable efforts to
deliver possession of the Premises by the commencement date.  If, despite said efforts, Sublessor is
unable to deliver possession as agreed, Sublessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of this
Sublease.  Sublessee 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 days after the commencement date,
Sublessee may, at its option, by notice in writing within ten days after the
end of such sixty day period, cancel this Sublease, in which event the Parties
shall be discharged from all obligations hereunder.  If such written notice is not received by Sublessor within said
ten day period, Sublessee's right to cancel shall terminate.  Except as otherwise provided, if possession
is not tendered to Sublessee when required and Sublessee does not terminate
this Sublease, as aforesaid, any period of rent abatement that Sublessee would
otherwise have enjoyed shall run from the date of delivery of possession and
continue for a period equal to what Sublessee would otherwise have enjoyed
under the terms hereof, but minus any days of delay caused by the acts or
omissions of Sublessee.  If possession
is not delivered within 120 days after the commencement date, this Sublease
shall automatically terminate unless the Parties agree, in writing, to the
contrary.

 

4.         Rent.

 

4.1      Base
Rent.  Sublessee shall pay to Sublessor as Base Rent for the Premises
equal monthly payments of $3,575.00 in advance, on the 1st day of each month of
the term hereof.  Sublessee shall pay
Sublessor upon the execution hereof $5,362.50 as Base Rent for December 15
through December 30, 2000 and January 2001 Base Rent for any period during the
term hereof which is for less than one month shall be a pro rata portion of the
monthly installment.

 

4.2      Rent
Defined.  All
monetary obligations of Sublessee to Sublessor under the terms of this Sublease
(except for the Security Deposit) are deemed to be rent
("Rent").  Rent  shall be payable in lawful money of the
United States to Sublessor at the address stated herein or to such other
persons or at such other places as Sublessor may designate in writing.

 

5.         Security
Deposit.  Sublessee shall deposit with Sublessor upon execution hereof
$3,575.00 as security for Sublessee's faithful performance of Sublessee's
obligations hereunder.  If Sublessee
fails to pay Rent or other charges due hereunder, or otherwise defaults with
respect to any provision of this Sublease, Sublessor may use, apply or retain
all or any portion of said deposit for the payment of any Rent or other charge
in default or for the payment of any other sum to which Sublessor may become
obligated by reason of Sublessee's default, or to compensate Sublessor for any
loss or damage which Sublessor may suffer thereby.  If Sublessor so uses or applies all or any portion of said
deposit, Sublessee shall within ten days after written demand therefore forward
to Sublessor an amount sufficient to restore said Deposit to the full amount
provided for herein and Sublessee's failure to do so shall be a material breach
of this Sublease.  Sublessor shall not
be required to keep said Deposit separate from its general accounts.  If Sublessee performs all of Sublessee's
obligations hereunder, said Deposit or so much thereof as has not therefore
been applied by Sublessor, shall be returned, without payment of interest to
Sublessee (or at Sublessor's option, to the last assignee, if any, of
Sublessee's interest hereunder) at the expiration of the term hereof, and after
Sublessee has vacated the Premises.  No
trust relationship is created herein between Sublessor and Sublessee with
respect to said Security Deposit.

 

6.         Use.

 

6.1      Agreed
Use.  The
Premises shall be used and occupied only for general office use pursuant to
paragraph 6.1 of the Master Lease and for no other purpose.

 

6.2      Compliance.  NOTE: 
Sublessee is responsible for determining whether or not the zoning is
appropriate or its intended use, and acknowledges that past uses of the
Premises may no longer be allowed.

 

1

 

6.3      Acceptance
of Premises and Lessee.  Sublessee acknowledges that :

 

(a)       It has been advised by
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 Sublessee's intended use,

 

(b)       Sublessee has made such
investigation as it deems necessary with reference to such matters and assumes
all responsibility therefor as the same relate to its occupancy of the
Premises, and

 

(c)       neither Sublessor,
Sublessor'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
Sublease.

 

In addition, Sublessor
acknowledges that :

 

(a)       Broker has made no
representation, promises or warranties concerning Sublessee's ability to honor
the Sublease or suitability to occupy the Premises, and

 

(b)       it is Sublessor's sole
responsibility to investigate the financial capability and/or suitability of
all proposed tenants.

 

7.         Master
Lease

 

7.1       Sublessor is the lessee
of the Premises by virtue of a lease, hereinafter the "Master Lease", a copy of which
is attached hereto marked Exhibit 1, wherein William D. and Edna J. Wright dba
South Coast Business Park is the lessor, hereinafter the "Master Lessor"

 

7.2       This Sublease is and
shall be at all times subject and subordinate to the Master Lease.

 

7.3       The terms, conditions
and respective obligations of Sublessor and Sublessee to each other under this
Sublease shall be the terms and conditions of the Master Lease except for those
provisions of the Master Lease which are directly contradicted by this Sublease
in which event the terms of this Sublease document shall control over the
Master Lease.  Therefore, for the
purpose of this Sublease, wherever in the Master Lease the word
"Lessor" is used it shall be deemed to mean the Sublessor herein and
wherever in the Master Lease the word "Lessee" is used it shall be
deemed to mean the Sublessee herein.

 

7.4       During the term of this
Sublease and for all periods subsequent for obligations which have arisen prior
to the termination of this Sublease, Sublessee does hereby expressly assume and
agree to perform and comply with, for the benefit of Sublessor and Master
Lessor, each and every obligation of Sublessor under the Master Lease,
including without limitation, the obligations set forth in paragraph 4.2 and
Article 10 of the Master Lease, except for the following paragraphs which are
excluded therefrom:

paragraph 26

 

7.5       The obligations that
Sublessee has assumed under paragraph 7.4 hereof are hereinafter referred to as
the "Sublessee's Assumed
Obligations".  The
obligations that Sublessee has not assumed under paragraph 7.4 hereof are
hereinafter referred to as the "Sublessor's
Remaining Obligations".

 

7.6       Sublessee shall hold
Sublessor free and harmless from all liability, judgments, costs, damages,
claims or demands, including reasonable attorneys fees, arising out of
Sublessee's failure to comply with or perform Sublessee's Assumed Obligations.

 

7.7       Sublessor agrees to
maintain the Master Lease during the entire term of this Sublease, subject,
however, to any earlier termination of the Master Lease without the fault of
the Sublessor, and to comply with or perform Sublessor's Remaining Obligations
and to hold Sublessee free and harmless from all liability, judgments, costs,
damages, claims or demands arising out of Sublessor's failure to comply with or
perform Sublessor's Remaining Obligations.

 

7.8       Sublessor represents to
Sublessee that the Master Lease is in full force and effect and that no default
exists on the part of any Party to the Master Lease.

 

8.         Assignment
of Sublease and Default.

 

8.1       Sublessor hereby assigns
and transfers to Master Lessor the Sublessor's interest in this Sublease,
subject however to the provisions of Paragraph 8.2 hereof.

 

8.2       Master Lessor, by
executing this document, agrees that until a Default shall occur in the
performance of Sublessor's Obligations under the Master Lease, that Sublessor
may receive, collect and enjoy the Rent accruing under this Sublease.  However, if Sublessor shall Default in the
performance of its obligations to Master Lessor then Master Lessor may, at its
option, receive and collect, directly from Sublessee, all Rent owing and to be
owed under this Sublease.  Master Lessor
shall not, by reason of this assignment of the Sublease nor by reason of the collection
of the Rent from the Sublessee, be deemed liable to Sublessee for any failure
of the Sublessor to perform and comply with Sublessor's Remaining Obligations.

 

8.3       Sublessor hereby
irrevocably authorizes and directs Sublessee upon receipt of any written notice
from the Master Lessor stating that a Default exists in the performance of
Sublessor's obligations under the Master Lease, to pay to Master Lessor the
Rent due and to become due under the Sublease. 
Sublessor agrees that Sublessee shall have the right to rely upon any
such statement and request from Master Lessor, and that Sublessee shall pay
such Rent to Master Lessor without any obligation or right to inquire as to
whether such

 

2

 

Default exists and
notwithstanding any notice from or claim from Sublessor to the contrary and
Sublessor shall have no right or claim against Sublessee for any such Rent so
paid by Sublessee.

 

8.4       No changes or
modifications shall be made to this Sublease obtain the consent of Master
Lessor.

 

9.         Consent
of Master Lessor.

 

9.1       In the event that the
Master Lease requires that Sublessor obtain the consent of Master Lessor to any
subletting by Sublessor then, this Sublease shall not be effective unless,
within ten days of the date hereof, Master Lessor signs this Sublease thereby
giving its consent to this Subletting.

 

9.3       In the event that Master
Lessor does given such consent then:

 

(a)       Such consent shall not
release Sublessor of its obligations or after the primary liability of
Sublessor to pay the Rent and perform and comply with all of the obligations of
Sublessor to be performed under the Master Lease.

 

(b)       The acceptance of Rent
by Master Lessor from Sublessee or anyone else liable under the Master Lease
shall not be deemed a waiver by Master Lessor of any provisions of the Master
Lease.

 

(c)       The consent to this
Sublease shall not constitute a consent to any subsequent subletting or
assignment.

 

(d)       In the event of any
Default of Sublessor under the Master Lease, Master Lessor may proceed directly
against Sublessor, any guarantors or anyone else liable under the Master Lease
or this Sublease without first exhausting Master Lessor's remedies against any
other person or entity liable thereon to Master Lessor.

 

(e)       Master Lessor may
consent to subsequent sublettings and assignments of the Master Lease or this
Sublease or any amendments or modifications thereto without notifying Sublessor
or anyone else liable under the Master Lease and without obtaining their
consent and such action shall not relieve such persons from liability.

 

(f)        In the event that
Sublessor shall Default in its obligations under the Master Lease, then Master
Lessor, at its option and without being obligated to do so, may require
Sublessee to attorn to Master Lessor in which event Master Lessor shall
undertake the obligations of Sublessor under this Sublease from the time of the
exercise of said option to termination of this Sublease but Master Lessor shall
not be liable for any prepaid Rent nor any Security Deposit paid by Sublessee,
nor shall Master Lessor be liable for any other Defaults of the Sublessor under
the Sublessee.

 

9.4       The signatures of the
Master Lessor and any Guarantors of Sublessor at the end of this document shall
constitute their consent to the terms of this Sublease.

 

9.5       Master Lessor
acknowledges that, to the best of Master Lessor's knowledge, no Default
presently exists under the Master Lease of obligations to be performed by
Sublessor and that the Master Lease is in full force and effect.

 

9.6       In the event that
Sublessor Defaults under its obligations to be performed under the Master Lease
by Sublessor, Master Lessor agrees to deliver to Sublessee a copy of any such
notice of default.  Sublessee shall have
the right to cure any Default of Sublessor described in any notice of default
within 5 days after after service of such notice of default on Sublessee.  If such Default is cured by Sublessee then
Sublessee shall have the right of reimbursement and offset from and against
sublessor.

 

10.      Brokers
Fee

 

10.1     Upon execution hereof by
all parties, Sublessor shall pay to CRESA Partners a licensed real estate
broker ("Broker"), a fee
as set forth in a separate agreement between Sublessor and Broker for brokerage
services rendered by Broker to Sublesssor in this transaction.

 

10.2     Sublessor agrees that if
Sublessee exercises any option or right of first refusal as granted by
Sublessor herein, or any option or right substantially similar thereto, either
to extend the term of this Sublease, to renew this Sublease, to purchase the
Premises, or to lease or purchase adjacent property which Sublessor may own or
in which Sublessor has an interest, then Sublessor shall pay to Broker a fee in
accordance with the schedule of Broker in effect at the time of the execution
of this Sublease.  Notwithstanding the
foregoing, Sublessor's obligation under this Paragraph 10.2 is limited to a
transaction in which Sublessor is acting as a Sublessor, lessor or seller.

 

10.3     Any fee due from
Sublessor hereunder shall be due and payable upon the exercises of any option
to extend or renew, upon the execution of any new lease, or, in the event of a
purchase, at the close of escrow.

 

10.4     Any transferee of
Sublessor's interest in the Sublease by accepting an assignment thereof, shall
be deemed to have assumed the respective obligations of Sublessor under this
Paragraph 10.  Broker shall be deemed to
be a third-party beneficiary of this paragraph 10.

 

11.      Attorney's
Fees.  If any
party named herein brings an action to enforce the terms hereof or to declare
rights hereunder, the prevailing party in any such action, on trial and appeal,
shall be entitled to his reasonable attorney's fees to be paid by the losing
party as fixed by the Court.

 

12.      Additional
Provisions.  If
there are not additional provisions, draw a line from this point to the next
printed word after the space left here. 
If there are additional provisions place the same here.  See Addendum to Standard Sublease attached
hereto and incorporated herein by this reference.

 

3

 

 

ATTENTION:       NO REPRESENTATION OR RECOMMENDATION IS
MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY REAL ESTATE
BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS
SUBLEASE 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 SUBLEASE.

 

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 PROPERTY, THE STRUCTURAL
INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY
OF THE PREMISES FOR SUBLESSEE'S INTENDED USE.

 

WARNING:  IF THE SUBJECT PROPERTY IS LOCATED IN A
STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE SUBLEASE MAY NEED TO BE
REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.

 

	
  Executed at:

  	
   

  	
   

  	
  ValueClick
  Inc., a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
  on:

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
  4360 Park
  Terrace Drive, Suite 100

  	
   

  	
   

  	
   

  
	
  Address:

  	
  Westlake,
  CA  91361

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  "Sublessor" (Corporate Seal)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executed at:

  	
  BioEnterics
  Corporation

  	
   

  	
  BioEnterics Corporation, a California
  corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  on:

  	
  Nov 1, 2000

  	
   

  	
  By

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
  1035 Cindy Lane

  	
   

  	
   

  	
   

  
	
  Address:

  	
  Carpinteria, CA 93013

  	
   

  	
  By

  	
  V.P. Operations COO

  
	
   

  	
   

  	
  "Sublessee" (Corporate Seal)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executed at:

  	
   

  	
   

  	
  William D. and Edna. J. Wright dba

  
	
   

  	
   

  	
   

  	
  South Coast Business Park

  
	
   

  	
   

  	
   

  	
   

  
	
  on:

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
  130 Garden Street

  	
   

  	
   

  	
   

  
	
  Address:

  	
  Santa Barbara, CA 93101

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  "Master Lessor" (Corporate Seal)

  
												

 

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 So. Flower St, Suite 600, Los Angeles, CA 90017, (213) 687 8777.

 

4

 

GUARANTY

 

THIS GUARANTY dated
as of November 1, 2000 (“Guaranty”) is made by INAMED CORPORATION, a Delaware
corporation (“Guarantor”), in favor of VALUECLICK, INC., a Delaware corporation
(“Sublessor”), with reference to the following facts:

 

WHEREAS, William D.
and Edna J. Wright dba South Coast Business Park (“Master Lessor”) and
Sublessor entered into that certain Standard Industrial Lease – Multi-Tenant
dated as of August 30, 1999 (“Master Lease”), wherein Master Lessor agreed to
lease to Sublessor that certain premises located in the City of Carpinteria,
County of Los Angeles, State of California, commonly known as 6430 Via Real
(Building C), Suites 1 and 2, consisting of approximately 2,750 rentable square
feet (“Premises”);

 

WHEREAS, Sublessor
and BioEnterics Corporation, a California corporation (“Sublessee”) entered
into that certain Standard Sublease, dated as of November 1, 2000 (“Sublease”),
wherein Sublessor agreed to Sublease to Sublessee the Premises; and

 

WHEREAS, a condition
precedent of Sublessor entering into Sublease was the execution and delivery of
this Guaranty by Guarantor.

 

NOW, THEREFORE, in
consideration of the mutual covenants of Sublessor and Sublessee contained in
the Sublease and the covenants of Guarantor contained herein, the adequacy and
sufficiency of which are hereby acknowledged by Guarantor, Guarantor hereby
agrees as follows

 

1.             Guaranty.   This
Guaranty is made by Guarantor in favor of Sublessor. Guarantor unconditionally,
irrevocably and absolutely guarantees to Sublessor that (a) all sums payable by
Sublessee under the Sublease, including, without limitation, Base Rent and all
other Rent and charges payable by Sublessee under the Sublease shall be
promptly paid in full when due, in accordance with the provisions of the
Sublease, and (b) Sublessee shall perform and observe each and every covenant,
agreement, term, condition and obligation in the Sublease required to be
performed by Sublessee with respect to the Premises. This Guaranty is
irrevocable, unconditional and absolute. If, for any reason, any such sums
shall not be paid promptly when due or any such covenant agreement, term
condition or obligation is not performed in accordance with Sublease,
Guarantor, promptly after notice thereof from Sublessor, shall pay the same to
the person entitled thereto pursuant to the provisions of the Sublease, and
shall promptly perform and observe or cause to be performed and observed every
such covenant, agreement, term, condition and obligation regardless of: (a) any
defenses or rights of set-off or counterclaims which Sublessee or Guarantor may
have or assert; (b) whether Sublessor shall have taken any steps to enforce any
rights against Sublessee or any other remedy as a result of the default of
Sublessee including enforcing any rights to any collateral securing the
obligations of Sublessee; (c) any other condition or contingency; or (d) any
amendment, modification, extension, renewal or supplement to the Sublease.

 

1

 

2.             Non-Impairment of Guaranty.   The obligations, covenants, agreements and duties of Guarantor
under this Guaranty shall in no way be impaired or excused by reason of the
happening from time to time of any of the following, although any of which may
be without notice to and without the further consent of Guarantor:

 

(a)           the waiver by Sublessor of the
performance or observance by Sublessee, Guarantor or any other party of any of
the agreements, covenants, terms or conditions contained in the Sublease, this
Guaranty or any other instrument (other than the excuse from such performance
or observance but only to the extent expressly stated in such waiver);

 

(b)           the extension, in whole or in part,
of the time for payment by Sublessee or Guarantor of any sums owing or payable
under the Sublease or this Guaranty, or of any other obligations under or
arising out of or on account of the Sublease or this Guaranty;

 

(c)           any assignment of this Guaranty or
the Sublease, or subletting of the Premises or any part thereof;

 

(d)           the modification or amendment
(whether material or otherwise) of any of the obligations of Sublessee or
Guarantor under the Sublease or this Guaranty;

 

(e)           any failure, omission or delay on the
part of Sublessor to enforce, assert or exercise any right, power or any remedy
conferred on or available to Sublessor in or by the Sublease, this Guaranty or
any other instrument, or any action on the part of Sublessor or any other
person or entity granting indulgence or extension in any form whatsoever;

 

(f)            the voluntary or involuntary
liquidation, dissolution, or sale of all or substantially all of the assets,
marshalling of assets and liability, receivership, conservatorship, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of, or other similar proceeding
affecting Sublessee or Guarantor or any of their assets;

 

(g)           the release of Sublessee or Guarantor
from the performance or observance of any of the agreements, covenants, terms
or conditions contained in the Sublease or this Guaranty by operation of law;

 

(h)           the inability of Sublessor or Sublessee
to enforce any provision of the Sublease for any reason; or

 

(i)            the filing or the existence of any
grounds for the filing of a petition by or against Sublessee or Guarantor under
the Bankruptcy Reform Act, as the same may be amended or recodified from time
to time.

 

3.             Waivers.

 

(a)           Guarantor, to the extent Guarantor
may legally do so, waives any right now or hereafter existing requiring
Sublessor as a condition to proceeding against

 

2

 

Guarantor hereunder, to (i)
proceed against Sublessee, (ii) proceed against or exhaust any security held
from Sublessee, (iii) proceed against any other guarantor prior to proceeding
against Guarantor in any proceeding, or (iv) pursue any other remedy in
Sublessor’s power, including the benefits of section 2845 of the Civil Code of
California. GUARANTOR WAIVES ALL RIGHTS AND DEFENCES ARISING BY REASON OF ANY
DISABILITY OR OTHER DEFENSE OF SUBLESSEE OR BY REASON OF THE CESSATION FROM ANY
CAUSE WHATSOEVER OF THE LIABILITY OF SUBLESSEE OTHER THAN FULL PAYMENT OF ALL
SUMS OWING SUBLESSOR UNDER THE SUBLEASE AND FULL PERFOMANCE OF ALL SUBLESSEE’S
OBLIGATIONS UNDER THE SUBLEASE.

 

(b)           GUARANTOR, TO THE EXTENT GUARANTOR
MAY LEGALLY DO SO, WAIVES ANY RIGHTS AND DEFENCES GUARANTOR MAY OTHERWISE HAVE,
WHETHER NOW OR HEREAFTER EXISTING, BASED UPON AN ELECTION OF REMEDIES BY
SUBLESSOR WHICH LIMITS OR DESTROYS GUARANTOR’S SUBROGATION RIGHTS OR
GUARANTOR’S RIGHTS TO PROCEED AGAINST SUBLESSEE FOR REIMBURSEMENT.

 

(c)           Until the payment in full of all sums
owing Sublessor under the Sublease and full performance of all obligations of
Sublessee under the sublease, Guarantor shall have no right of subrogation.
Guarantor further waives all rights to enforce any remedy which Landlord now
has or may hereafter have against Sublessee, and waives the benefit of, and all
rights to participate in, any security now or hereafter held by Sublessor from
Sublessee.

 

(d)           Guarantor, to the extent Guarantor
may legally do so, waives the benefit of any statute of limitations affecting
the liability of Guarantor hereunder.

 

(e)           Guarantor shall not assert the
bankruptcy of Sublessee as a defense to Guarantor’s obligations hereunder, and
further agree that in the event a bankruptcy court approves Sublessee’s rejection
of the Sublease or orders or causes a rescission or revision of the Sublease or
releases Sublessee from any of its obligations under the Sublease, Guarantor
shall remain fully liable hereunder.

 

(f)            Guarantor waives any right to
require Sublessor to make any presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notice of dishonor, notices of
default or delinquency, notices of nonpayment, notices of the amounts from time
to time owing Sublessor under the Sublease or any other facts that may come to
Sublessor’s attention regarding the financial position of Sublessee or notice
of acceptance of this Guaranty.

 

4.             Indemnification by the Guarantor.   Without limitation on
any other obligations of the Guarantor under this Guaranty, the Guarantor shall
indemnify, defend and hold harmless Sublessor from and against, and shall pay
on demand, any and all losses, liabilities, damages, costs, expenses and
charges (including the reasonable fees and disbursements of Sublessor’s legal
counsel and the reasonable charges of Sublessor’s internal legal counsel)
suffered or incurred by Sublessor as a result of any breach by Guarantor of
this Guaranty.

 

3

 

5.             Bankruptcy.   In
the event of the rejection or disaffirmance of the Sublease by the Sublessee or
the Sublessee’s trustee in bankruptcy pursuant to bankruptcy law or any other
law affecting creditors’ rights, Guarantor shall, upon Sublessor’s request,
assume all monetary obligations and monetary liabilities of the Sublessee under
the Sublease with respect to the Premises and under the Sublease, to the same
extent as if Guarantor had been originally named instead of the Sublessee as a
party to such document and there had been no such rejection or disaffirmance;
and Guarantor will confirm such assumption in writing at the request of
Sublessor upon or after such rejection or disaffirmance.  Guarantor, upon such assumption, shall have
all rights of Sublessee under the Sublease (to the extent permitted by law).

 

6.             Representations and Warranties.   Guarantor represents and warrants as follows, which
representations and warranties shall be true and correct in all material
respects as of the date of this Guaranty and shall survive the execution of
this Guaranty: (a) Guarantor has received the copy of the Master Lease and
Sublease (and all exhibits, amendments and schedules thereto) and is familiar
with the terms and conditions thereunder; (b) the execution of this Guaranty
will not render Guarantor insolvent; (c) Guarantor is receiving consideration
for this Guaranty; (d) Guarantor is a corporation duly formed and validly
existing; (e) the persons executing this Guaranty on behalf of Guarantor have
been duly authorized to execute this Guaranty for Guarantor; and (f) the
financial information provided to Sublessor by Guarantor prior to execution of
the Sublease and this Guaranty is substantially true, correct and complete in
all material respects.

 

7.             Attorneys’ Fees.  
Any amount required to be paid by Guarantor to Sublessor pursuant to the
terms hereof shall bear interest from the date due (or originally due from, if
applicable) at the rate of six percent (6%) above the rate announced from time
to time by Bank of America as its “prime” or “reference” rate per annum, but in
no event more than the maximum rate permitted by law. All interest shall be
compounded monthly and shall be payable to Sublessor upon Sublessor’s demand.
If Sublessor is required to pursue any remedy against Guarantor hereunder, or
against Sublessee in connection with the Sublease, Guarantor shall pay to
Sublessor upon demand all fees and expenses of Sublessor’s counsel and all
other related costs incurred by Sublessor in connection therewith.

 

8.             Interpretation.  
This Guaranty may not be modified or amended except by a written
agreement duly executed by Guarantor or Sublessor. This Guarantor embodies the
parties’ entire agreement with respect to the subject matter hereof and
supersedes all prior agreements with respect thereto. Time is of the essence to
the performance of all of Guarantor’s obligations hereunder. This Guaranty
shall be binding upon, and inure to the benefit of, the parties hereto and
their respective successors and assigns.

 

9.             Governing Law.  
This Guaranty shall be governed by and construed in accordance with the
laws of the State of California applicable to contracts entered into in
California between parties residing in California. For the purposes of this
Guaranty only Guarantor hereby consents to the personal jurisdiction and venue
of any California state court located in the City of Los Angeles and United
States District Courts for the Central District of California, and any
successor courts, and the service of process by any means authorized by such
courts.

 

4

 

10.          Severability.
  If any provision of this Guaranty
or application thereof to any person or circumstance shall to any extent be
invalid or unenforceable, the remainder of this Guaranty (including the application
of such provision to persons or circumstances other than those to which it is
held invalid or unenforceable) shall not be affected thereby, and each
provision of this Guaranty shall be valid and enforced to the fullest extent
permitted by law.

 

11.          Termination
of Guaranty.   This
Guaranty shall terminate on the expiration or earlier termination of the Term
of the Sublease.

 

12.          Capitalized
Terms.   Unless
specifically defined otherwise in this Guaranty, all capitalized terms used in
this Guaranty shall have the meanings given to them in the Sublease.

 

IN WITNESS
WHEREOF, Guarantor has executed this Guaranty as of the day and year first
written above.

 

“GUARANTOR”

 

INAMED CORPORATION,

a Delaware corporation

 

	
  By:

  	
  /s/ David
  Bamberger

  	
   

  
	
  Name:

  	
  DAVID BAMBERGER

  	
   

  
	
  Title:

  	
  Sr V P

  	
   

  

 

5

 

Addendum to Standard Sublease Dated November
1, 2000

 

13.                                 Term.   Notwithstanding anything contained in
paragraph 3.1, Sublessor shall have the right, exercisable upon fourteen (14)
days prior written notice delivered to Sublessee, to accelerate the
commencement date of the Term of this Sublease to a date which is no sooner
than November 1, 2000.  Any acceleration
of the commencement date of the Term of this Sublease pursuant to this
paragraph 13 shall not change the expiration date of the Term of this Sublease.

 

14.                                 Base
Rent.   Notwithstanding anything
contained in paragraph 4.1, the Base Rent shall increase by three percent (3%)
per year commencing on the first anniversary of the commencement date of the
Term of this Sublease.

 

15.                                 “AS
IS”; No Warranties.  
Notwithstanding anything contained in paragraph 6.3, by occupying the
Premises, Sublessee represents that it has made a thorough inspection of the
Premises and is familiar with the condition of every part thereof.  Sublessee agrees that it enters into this
Sublease without any representations, warranties or promises by Sublessor, its
agents, representatives, employees, servants or any other person with respect
to the Premises; and no rights, easements or licenses are acquired by Sublessee
by implication or otherwise except as expressly set forth herein.  Sublessee agrees to accept the Premises “AS
IS” in the condition existing on the commencement date of the Term of this
Sublease and the taking of possession of the Premises by Sublessee shall be
conclusive evidence as against Sublessee that, at the time such possession was
so taken, the Premises were in good and satisfactory condition.  Sublessee further represents that it has made
a thorough examination of the Master Lease and that it is familiar with all the
terms, conditions and covenants contained therein.  Sublessee agrees that it enters into this Sublease without any
representations or warranties by Sublessor, its agents, officers,
representatives, employees, servants or any other person as to the condition of
the Premises or the terms, conditions and covenants of the Master Lease, except
as herein expressly set forth and neither Sublessor, nor its agents, officers,
employees or servants, shall be liable for any defects, latent or otherwise, in
the Premises.  Notwithstanding the
foregoing, Sublessor shall do each of the following prior to delivery of the
Premises to Sublessee: (1) deliver the Premises in broom clean condition; (2)
steam clean the carpets throughout the Premises; (3) have an HVAC service
company complete any necessary maintenance and repair work to the HVAC units
servicing the Premises and issue a report representing that such HVAC units are
operational and in working condition; provided, however, Sublessor does not
make, and expressly disclaims, any representation or warranty as to the
condition of the HVAC units or to the accuracy of such report, and Sublessee
shall be responsible for any maintenance and repair of the HVAC units
thereafter pursuant to the terms and conditions of the Master Lease; (4) ensure
that all existing lighting and plumbing fixtures shall be in working condition;
provided, however, Sublessee shall be responsible for the maintenance and repair
of such fixtures thereafter pursuant to the terms and conditions of the Master
Lease; and (5) replace or repair any stained or broken ceiling tiles.

 

1

 

16                                    Holding
Over.   Sublessee hereby
acknowledges that if Sublessee remains in possession of the Premises after the
expiration or earlier termination of the Term of this Sublease without
Sublessor’s express written consent, Sublessee’s continued possession of the
Premises shall be on the basis of a tenancy at sufferance and Sublessee shall
pay as rent during any such the holdover period an amount equal to two hundred
percent (200%) of Base Rent plus any other Rent due and owing under the
Master Lease and Sublease.  In addition
to paying Sublessor the increased Base Rent, Sublessee shall defend, indemnify
and hold Sublessor harmless from and against all claims, liability, damages,
costs or expenses, including reasonable attorneys’ fees and the costs of
defending the same, incurred by Sublessor and arising directly or indirectly
from Sublessee’s failure to timely surrender the Premises, including (a) any
rent payable by or any loss, costs or damages, including lost profits, claimed
by any prospective lessee or sublessee of the Premises or any portion thereof,
and (b) Sublessor’s damages as a result of such prospective lessee’s or
sublessee’s rescinding or refusing to enter into the prospective lease or
sublease, respectively, of the Premises or any portion thereof, because of or
related to Sublessee’s failure to timely surrender the Premises.

 

17                                    Guaranty.   Concurrently with the execution of this
Lease by Sublessee, Sublessee shall deliver to Sublessor a guaranty in form and
substance reasonably satisfactory to Sublessor pursuant to which Inamed
Corporation, a Delaware corporation, irrevocably, unconditionally and
absolutely guarantees the timely payment and performance of Sublessee’s
obligations hereunder.

 

18.                                 Signage.   Subject to the terms and conditions of the
Master Lease, Sublessee shall be entitled to all of Sublessor’s signage rights
under the Master Lease and shall have the right to have its signage installed
at the Premises at Sublessee’s sole cost and expense. The location, size,
graphics and color of the Sublessee’s signage shall be subject to approval by
Master Lessor and Sublessor. Upon expiration or earlier termination of this
Sublease, Sublessee shall remove Sublessee’s signage and repair any damage
caused by such removal, at Sublessee’s sole cost and expense.

 

19.                                 Insurance.   Sublessee shall deliver to Sublessor
executed copies of policies of insurance or certificates or binders thereof
evidencing compliance with the insurance requirements pursuant to paragraph 8.1
of the Master Lease.

 

2

 

STANDARD INDUSTRIAL LEASE — MULTI-TENANT

AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

[LOGO]

 

1.         Parties.  This Lease, dated, for reference purposes
only, August 30, 1999 is made by and between William D & Edna J. Wright dba
South Coast Business Park (herein called “Lessor”) and ValueClick, Inc., a
Delaware Corporation (herein called “Lessee”).

 

2.         Premises,
Parking and Common Areas.

 

2.1      Premises.   Lessor hereby leases to Lessee and Lessee
leases from Lessor for the term, at the rental, and upon all of the conditions
set forth herein, real property situated in the County of Santa Barbara, State
of California commonly known as South Coast Business Park, Phase I & II
(46,198 + 14,000 = 60,198 s.f. and described as 6430 Via Real, (Building C),
Suite’s 1 & 2, Carpinteria, CA, consisting of approximately 2,750 square
feet (See Exhibit “A”) herein referred to as the “Premises”, as may be outlined
on an Exhibit attached hereto, including rights to the Common Areas as
hereinafter specified but not including any rights to the roof of the Premises
or to any Building in the Industrial Center. 
The Premises are a portion of a building herein referred to as the
“Building.”  The Premises, the Building,
the Common Areas, the land upon which the same are located, along with all other
buildings and improvements thereon, are herein collectively referred to as the
“Industrial Center”.

 

2.2      Vehicle
Parking.  
Lessee shall be entitled to 9 vehicle parking spaces, unreserved and
unassigned, on those portions of the Common Areas designated by Lessor for
parking.  Lessee shall not use more
parking spaces than said number.  Said
parking spaces shall be used only for parking by vehicles no larger than full
size passenger automobiles or pick-up trucks, herein called “Permitted Size
Vehicles.”  Vehicle other than Permitted
Size Vehicles are herein referred to as “Oversized Vehicles.”

 

2.2.1    Lessee shall not permit
or allow any vehicles that belong to or are controlled by Lessee or Lessee’s
employees, suppliers, shippers customers, or invitees to be loaded, unloaded,
or parked in areas other than those designated by Lessor for such activities.

 

2.2.2    If Lessee permits or
allows any of the prohibited activities described in paragraph 2.2 of this
Lease, then Lessor shall have the right without notice, in addition to such
other rights and remedies that it may have, to remove or tow away the vehicle
involved and charge the cost to Lessee, which cost shall be immediately payable
upon demand by Lessor.

 

2.3      Common
Areas – Definition.   The
term “Common Areas” is defined as all areas and facilities outside the Premises
and within the exterior boundary line of the Industrial Center that are
provided and designated by the Lessor from time to time for the general
non-exclusive use of Lessor, Lessee and of other lessees of the Industrial
Center and their respective employees, suppliers, shippers, customers and
invitees, including parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways and landscape areas.

 

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

 

2.5      Common
Areas – Rules and Regulations.   Lessor
or such other person(s) as Lessor may appoint shall have the exclusive control
and management of the Common Areas and shall have the right, from time to time,
to establish, modify, amend and enforce reasonable rules and regulations with
respect thereto.  Lessee agrees to abide
by and conform to all such rules and regulations, and to cause its employees,
suppliers, shippers, customers, and invitees to so abide and conform.  Lessor shall not be responsible to Lessee
for the non-compliance with said rules and regulations by other lessees of the
Industrial Center.

 

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

 

(a)  To make changes to the
Common Areas, including, without limitation, changes in the location, size,
shape and number of driveways, entrances, parking spaces, parking areas,
loading and unloading areas, ingress, egress, direction of traffic, landscaped
areas and walkways; (b)  To close
temporarily any of the Common Areas for maintenance purposes so long as
reasonable access to the Premises remains available; (c)  To designate other land outside the
boundaries of the Industrial Center to be a part of the Common Areas; (d)  To add additional buildings and improvements
to the Common Areas; (e)  To use the
Common Areas while engaged in making additional improvements, repairs or
alterations to the Industrial Center, or any portion thereof; (f)  To do and perform such other acts and make
such other changes in, to or with respect to the Common areas and Industrial
Center as Lessor may, in the exercise of sound business judgment, deem to be
appropriate.

 

2.6.1    Lessor shall at all times
provide the parking facilities required by applicable law and in no event shall
the number of parking spaces that Lessee is entitled to under paragraph 2.2 be
reduced.

 

3.         Term.

 

3.1      Term.   The term of this
Lease shall be for approximately 3 years commencing on October 1, 1999 and
ending on September 30, 2002 unless sooner terminated pursuant to any provision
hereof.  See Addendum.

 

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

 

3.3      Early
Possession.  
If Lessee occupies the Premises prior to said commencement date, such
occupancy shall be subject to all provisions of this Lease, such occupancy
shall not advance the termination date, and Lessee shall pay rent for such
period at the initial monthly rates set forth below.

 

4.         Rent

 

4.1      Base
Rent.   Lessee
shall pay to Lessor, as Base Rent for the Premises, without any offset or
deduction, except as may be otherwise expressly provided in this Lease, on the
1st day of each month of the term hereof, monthly payments in advance of $
3,575.00.  See Addendum for cost of
living adjustments to Base Rent, and determination of rent during Extension
Periods.  Lessee shall pay Lessor upon
execution hereof $ 3,575.00 as Base Rent for 10/1/99 to 11/1/99.  Rent for any period during the term hereof
which is for less than one month shall be a pro rata portion of the Base
Rent.  Rent shall be payable in lawful
money of the United States to Lessor at the address stated herein or to such
other persons or at such other places as Lessor may designate in writing.

 

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

 

(a)       “Lessee’s Share” is
defined, for purposes of this Lease, as 4.56 percent.

 

(b)       “Operating Expenses” is
defined, for purposes of this Lease, as all costs Incurred by Lessor, if any,
for:

 

(i)        The Operation, repair
and maintenance, in neat, clean, good order and condition, of the following:

 

(aa)     The Common Areas,
including parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting facilities and fences and gates;

 

(bb)     Trash disposal services;

 

(cc)     Tenant directories;

 

(dd)     Fire detection systems
including sprinkler system maintenance and repair;

 

1

 

(ee)     Security services;

 

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

 

(gg)     Property management
expenses;

 

(ii)       Any deductible portion
of an insured loss concerning any of the items or matters described in this
paragraph 4.2;

 

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

 

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

 

(v)       The cost of water, gas
and electricity to service the Common Areas.

 

(c)       The inclusion of the
improvements, facilities and services set forth in paragraph 4.2 (b) (1) of the
definition of Operating Expenses shall not be deemed to impose an obligation
upon Lessor to either have said improvements or facilities or to provide those
services unless the Industrial Center already has the same, Lessor already
provides the services, or Lessor has agreed elsewhere in this Lease to provide
the same or some of them.

 

(d)       Lessee’s Share of
Operating Expenses shall be payable by Lessee within ten (10) days after a
reasonably detailed statement of actual expenses is presented to Lessee by
Lessor.  At Lessor’s option, however, an
amount may be estimated by Lessor from time to time of Lessee’s Share of annual
Operating Expenses and the same shall be payable monthly or quarterly, as
Lessor shall designate, during each twelve month period of the Lease term, on
the same day as the Base Rent is due hereunder.  In the event that Lessee pays Lessor’s estimate of Lessee’s Share
of Operating Expenses as aforesaid, Lessor shall deliver to Lessee within sixty
(60) days after the expiration of each calendar year a reasonably detailed
statement showing Lessee’s Share of the actual Operating Expenses incurred
during the preceding year.  If Lessee’s
payments under this paragraph 4.2(d) during said preceding year exceed Lessee’s
Share as indicated on said statement, Lessee shall be entitled to credit the
amount of such overpayment against Lessee’s Share of Operating Expenses next
falling due.  If Lessee’s payments under
this paragraph during said preceding year were less than Lessee’s Share as
indicated on said statement, Lessee shall pay to Lessor the amount of the
deficiency within ten (10) days after delivery by Lessor to Lessee of said
statement.

 

5.         Security
Deposit.   Lessee
shall deposit with Lessor upon execution hereof $ 3,575.00 as security for
Lessee’s faithful performance of Lessee’s obligations hereunder.  If Lessee fails to pay rent or other charges
due hereunder, or otherwise defaults with respect to any provision of this
Lease, Lessor may use, apply or retain all or any portion of said deposit for
the payment of any rent or other charge in default or for the payment of any
other sum to which Lessor may become obligated by reason of Lessee’s default,
or to compensate Lessor for any loss or damage which Lessor may suffer thereby.  If Lessor so uses or applies all or any
portion of said deposit, Lessee shall within ten (10) days after written demand
therefor deposit cash with Lessor in an amount sufficient to restore said
deposit to the full amount then required of Lessee.  If the monthly rent shall, from time to time, increase during the
term of this Lease, Lessee shall, at the time of such increase, deposit with
Lessor additional money as a security deposit so that the total amount of the
security deposit held by Lessor shall at all times bear the same proportion to
the then current Base Rent as the initial security deposit bears to the initial
Base Rent set forth in paragraph 4. 
Lessor shall not be required to keep said security deposit separate from
its general accounts.  If Lessee
performs all of Lessee’s obligations hereunder, said deposit, or so much
thereof as has not theretofore been applied by Lessor, shall be returned,
without payment of interest or other increment for its use, to Lessee (or, at)
Lessor’s option, to the last assignee, if any, of Lessee’s interest hereunder)
at the expiration of the term hereof, and after Lessee has vacated the
Premises.  No trust relationship is
created herein between Lessor and Lessee with respect to said Security Deposit.

 

6.         Use.

 

6.1      Use.   The Premises shall
be used and occupied only for general office use and for no other use without
Lessor’s prior written consent.  See
Addendum for additional terms.

 

6.2      Compliance
with Law.

 

(a)       Lessor warrants to
Lessee that the Premises, in the state existing on the date that the Lease term
commences, but without regard to the use for which Lessee will occupy the
Premises, does not violate any covenants or restrictions of record, or any
applicable building code, regulation or ordinance in effect on such Lease term
commencement date.  In the event it is
determined that this warranty has been violated, then it shall be the
obligation of the Lessor, after written notice from Lessee, to promptly, at
Lessor’s sole cost and expense, rectify any such violation.  In the event Lessee does not give to Lessor
written notice of the violation of this warranty within six months from the
date that the Lease term commences, the correction of same shall be the
obligation of the Lessee at Lessee’s sole cost.  This warranty contained in this paragraph 6.2(a) shall be of no
force or effect if, prior to the date of this Lease, Lessee was an owner or
occupant of the Premises and, in such event, Lessee shall correct any such
violation at Lessee’s sole cost.

 

(b)       Except as provided in
paragraph 6.2(a) Lessee shall, at Lessee’s expense, promptly comply with all
applicable statutes, ordinances, rules, regulations, orders, covenants and
restrictions of record, and requirements of any fire insurance underwriters or
rating bureaus, now in effect or which may hereafter come into effect, whether
or not they reflect a change in policy from that now existing, during the term
or any part of the term hereof, relating in any manner to the Premises and the
occupation and use by Lessee of the Premises and of the Common Areas.  Lessee shall not use nor permit the use of
the Premises or the Common Areas in any manner that will tend to create waste
or a nuisance or shall tend to disturb other occupants of the Industrial
Center.

 

6.3      Condition
of Premises.

 

(a)       Lessor shall deliver the
Premises to Lessee clean and free of debris on the Lease commencement date
(unless Lessee is already in possession) and Lessor warrants to Lessee that the
plumbing, lighting, air conditioning, heating, and loading doors in the
Premises shall be in good operating condition on the Lease commencement
date.  In the event that it is
determined that this warranty has been violated, then it shall be the
obligation of Lessor, after receipt of written notice from Lessee setting forth
with specificity the nature of the violation, to promptly, at Lessor’s sole
cost, rectify such violation.  Lessee’s
failure to give such written notice to Lessor within thirty (30) days after the
Lease commencement date shall cause the conclusive presumption that Lessor has
complied with all of Lessor’s obligations hereunder.  The warranty contained in this paragraph 6.3(a) shall be of no
force or effect if prior to the date of this Lease, Lessee was an owner or
occupant of the Premises.  See Addendum.

 

(b)       Except as otherwise provided
in this Lease, Lessee hereby accepts the Promises in the condition existing as
of the Lease commencement date or the date that Lessee takes possession of the
Premises, whichever is earlier, subject to all applicable zoning, municipal,
county and state laws, ordinances and regulations governing and regulating the
use of the Premises, and any covenants or restrictions of record, and accepts
this Lease subject thereto and to all matters disclosed thereby and by any
exhibits attached hereto.  Lessee acknowledges
that neither Lessor nor Lessor’s agent has made any representation or warranty
as to the present or future suitability of the Premises for the conduct of
Lessee’s business.

 

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

 

7.1      Lessor’s
Obligations.   Subject
to the provisions of paragraphs 4.2 (Operating Expenses), 6 (Use) 7.2  (Lessee’s Obligations) and 9 (Damage or
Destruction) and except for damage caused by any negligent or intentional act
or omission of Lessee, Lessee’s employees, suppliers, shippers, customers, or
invitees, in which event Lessee shall repair the damage, Lessor, at Lessor’s
expense, subject to reimbursement pursuant to paragraph 4.2, shall keep in good
condition and repair the foundations, exterior, walls, structural condition of
interior bearing walls, and roof of the Premises, as well as the parking lots,
walkways, driveways, landscaping, fences, signs and utility installations of
the Common Areas and all parts thereof, as well as providing the services for
which there is an Operating Expense pursuant to paragraph 4.2.  Lessor shall not, however, be obligated to
paint the exterior or interior surface of exterior walls, nor shall Lessor be
required to maintain, repair or replace windows, doors or plate glass of the
Premises.  Lessor shall have no
obligation to make repairs under this paragraph 7.1 until a reasonable time
after receipt of written notice from Lessee of the need for such repairs.  Lessee expressly waives the benefits of any
statute now or hereafter in effect which would otherwise afford Lessee the
right to make repairs at Lessor’s expense or to terminate this Lease because of
Lessor’s failure to keep the Premises in good order, condition and repair.  Lessor shall not be liable for damages or
loss of any kind of nature by reason of Lessor’s failure to furnish any Common
Area Services when such failure is caused by accident, breakage, repairs,
strikes, lockout, or other labor disturbances or disputes of any character, or
by any other cause beyond the reasonable control of Lessor.

 

7.2      Lessee’s
Obligations.

 

(a)       Subject to the
provisions of paragraphs 6 (Use), 7.1 
(Lessor’s Obligations), and 9 (Damage or Destruction), Lessee, at
Lessee’s expense, shall keep in good order, condition and repair the Premises and
every part thereof (whether or not the damaged portion of the Premises or the
means of repairing the same are reasonably or readily accessible to Lessee)
including, without limiting the generality of the foregoing, all plumbing,
heating, ventilating and air conditioning systems (Lessee shall procure and
maintain, at Lessee’s expense, a ventilating and air conditioning system
maintenance contract), electrical and lighting facilities and equipment within
the Premises, fixtures, interior walls and interior surfaces of exterior walls,
ceilings, windows, doors, plate glass, and skylights located within the
Premises.  Lessor reserves the right to
procure and maintain the ventilating and air conditioning system maintenance
contract and if Lessor so elects, Lessee shall reimburse Lessor, upon demand,
for the cost thereof.  Lessee shall be
responsible for clean up of all hazardous waste occurring in or about the
premises.

 

(b)       If Lessee fails to
perform Lessee’s obligations under this paragraph 7.2 or under any other
paragraph of this Lease, Lessor may enter upon the Premises after ten (10)
days’ prior written notice to Lessee (except in the case of emergency, in which
no notice shall be required), perform such obligations on Lessee’s behalf and
put the Premises in good order, condition and repair, and the cost thereof
together with interest thereon at the maximum rate then allowable by law shall
be due and payable as additional rent to Lessor together with Lessee’s next
Base Rent installment.

 

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

 

7.3      Alterations
and Additions.

 

(a)       Lessee shall not,
without Lessor’s prior written consent make any alterations, improvements,
additions, or Utility Installations in, on or about the Premises, or the
Industrial Center, except for nonstructural alterations to the Premises not
exceeding $2,500 in cumulative costs, during the term of this Lease.  In any event, whether or not in excess of
$2,500 in cumulative cost, Lessee shall make no change or alteration to the

 

2

 

exterior of the Premises nor
the exterior of the Building nor the Industrial Center without Lessor’s prior
written consent.  As used in this
paragraph 7.3 the term “Utility Installation” shall mean carpeting, window
coverings, air lines, power panels, electrical distribution systems, lighting
fixtures, space heaters, air conditioning, plumbing, and fencing.  Lessor may require that Lessee remove any or
all of said alterations, improvements, additions or Utility Installations at
the expiration of the term, and restore the Premises and the Industrial Center
to their prior condition.  Lessor may
require Lessee to provide Lessor, at Lessee’s sole cost and expense, a lien and
completion bond in an amount equal to one and one half times the estimated cost
of such improvements, to insure Lessor against any liability for mechanic’s and
materialmen’s liens and to insure competition of the work.  Should Lessee make any alterations,
improvements, additions or Utility Installations without the prior approval of
Lessor, Lessor may, at any time during the term of this Lease, require that
Lessee remove any or all of the same.

 

(b)       Any alterations,
improvements, additions or Utility Installations in or about the Premises or
the Industrial Center that Lessee shall desire to make and which requires the
consent of the Lessor shall be presented to Lessor in written form, with
proposed detailed plans.  If Lessor
shall give its consent, the consent shall be deemed conditioned upon Lessee
acquiring a permit to do so from appropriate governmental agencies, the
furnishing of a copy thereof to Lessor prior to the commencement of the work
and the compliance by Lessee of all conditions of said permit in a prompt and
expeditious manner.

 

(c)       Lessee shall pay, when
due, all claims for labor or materials furnished or alleged to have been
furnished to or for Lessee at or for use in the Premises, which claims are or
may be secured by any mechanic’s or materialmen’s lien against the Premises, or
the Industrial Center, or any interest therein.  Lessee shall give Lessor not less than ten (10) days’ notice
prior to the commencement of any work in the Premises and Lessor shall have the
right to post notices of non-responsibility in or on the Premises or the
Building as provided by law.  If Lessee
shall, in good faith, contest the validity of any such lien, claim or demand,
then Lessee shall, at its sole expense defend itself and Lessor against the
same and shall pay and satisfy any such adverse judgment that may be rendered
thereon before the enforcement thereof against the Lessor or the Premises or
the Industrial Center, upon the condition that if Lessor shall require, Lessee
shall furnish to Lessor a surety bond satisfactory to Lessor in an amount equal
to such contested lien claim or demand Indemnifying Lessor against liability
for the same and holding the Premises and the Industrial Center free from the
effect of such lien or claim.  In
addition, Lessor may require Lessee to pay Lessor’s attorney’s fees and costs
in participating in such action if Lessor shall decide it is to Lessor’s best
interest to do so.

 

(d)       All alterations,
improvements, additions and Utility Installations (whether or not such Utility
Installations constitute trade fixtures of Lessee), which may be made on the
Premises, shall be the property of Lessor and shall remain upon and be
surrendered with the Premises at the expiration of the Lease term, unless
Lessor requires their removal pursuant to paragraph 7.3(a).  Notwithstanding the provisions of this
paragraph 7.3(d), Lessee’s machinery and equipment, other than that which is
affixed to the Premises so that it cannot be removed without material damage to
the Premises, and other than Utility Installations, shall remain the property
of Lessee and may be removed by Lessee subject to the provisions of paragraph
7.2.

 

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

 

8.         Insurance;
Indemnity.

 

8.1      Liability
Insurance — Lessee.

 

See page 8 after article number 49

 

8.2      Liability
Insurance — Lessor.   Lessor
shall obtain and keep in force during the term of this Lessee a policy of Combined
Single Limit Bodily Injury and Property Damage Insurance, insuring Lessor, but
not Lessee, against any liability arising out of the ownership, use, occupancy
or maintenance of the Industrial Center in an amount not less than $1,000,000
per occurrence.

 

8.3      Property
Insurance.   Lessor
shall obtain and keep in force during the term of this Lease a policy or
policies of insurance covering loss or damage to the Industrial Center
improvements, but not Lessee’s personal property, fixtures, equipment or tenant
improvements, in an amount not to exceed the full replacement value thereof, as
the same may exist from time to time, providing protection against all perils
included within the classification of fire, extended coverage, vandalism,
malicious mischief, flood (in the event same is required by a lender having a
lien on the Premises) special extended perils (“all risk”, as such term is used
in the Insurance Industry), plate glass insurance and such other insurance as
Lessor deems advisable.  In addition,
Lessor shall obtain and keep in force, during the term of this Lease, a policy
of rental value insurance covering a period of one year, with loss payable to
Lessor, which insurance shall also cover all Operating Expenses for said
period.  In the event that the Premises
shall suffer an insured loss as defined in paragraph 9.1(g) hereof, the
deductible amounts under the casualty insurance policies retaining to the
Premises shall be paid by Lessee.

 

8.4      Payment
of Premium Increase.

 

(a)       After the term of this
Lease has commenced, Lessee shall not be responsible for paying Lessee’s Share
of any increase in the property insurance premium for the Industrial Center
specified by Lessor’s insurance carrier as being caused by the use, acts or
omissions of any other lessee of the Industrial Center, or by the nature of
such other lessee’s occupancy which create an extraordinary or unusual risk.

 

(b)       Lessee, however, shall
pay the entirety of any increase in the property insurance premium for the
Industrial Center over what it was immediately prior to the commencement of the
term of this Lease if the increase is specified by Lessor’s Insurance carrier
as being caused by the nature of Lessee’s occupancy or any act or omission of
Lessee.

 

8.5      Insurance
Policies.   Insurance
required hereunder shall be in companies holding a “General Policyholders
Rating” of at least B plus, or such other rating as may be required by a lender
having a lien on the Premises, as set forth in the most current issue of “Best
Insurance Guide.”  Lessee shall not do
or permit to be done anything which shall invalidate the Insurance policies
carried by Lessor.  Lessee shall deliver
to Lessor copies of liability insurance policies required under paragraph 8.1
or certificates evidencing the existence and amounts of such insurance within
seven (7) days after the commencement date of this Lease.  No such policy shall be cancellable or
subject to reduction of coverage or other modification except after thirty (30)
days prior written notice to Lessor. 
Lessee shall, at least thirty (30) days prior to the expiration of such
policies, furnish Lessor with renewals or “binders” thereof.

 

8.6      Waiver
of Subrogation.  
Lessee and Lessor each hereby release and relieve the other, and waive
their entire right of recovery against the other for loss or damage arising out
of or incident to the perils insured against which perils occur in, on or about
the Premises, whether due to the negligence of Lessor or Lessee or their
agents, employees, contractors and/or/invitees.  Lessee and Lessor shall, upon obtaining the policies of insurance
required give notice to the insurance carrier or carriers that the foregoing
mutual waiver of subrogation is contained in this Lease.

 

8.7      Indemnity.   Lessee shall
indemnify and hold harmless Lessor from and against any and all claims arising
from Lessee’s use of the Industrial Center, or from the conduct of Lessee’s
business or from any activity, work or things done, permitted or suffered by
Lessee in or about the Premises of elsewhere and shall further indemnify and
hold harmless Lessor from and against any and all claims arising from any
breach or default in the performance of any obligation on Lessee’s part to be
performed under the terms of this Lease, or arising from any act or omission of
Lessee, or any of Lessee’s agents, contractors, or employees, and from and
against all costs, attorney’s fees, expenses and liabilities incurred in the
defense of any such claim or any action or proceeding brought thereon; and in
case any action or proceeding be brought against Lessor by reason of any such
claim, Lessee upon notice from Lessor shall defend the same at Lessee’s expense
by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with
Lessee in such defense.  Lessee, as a
material part of the consideration to Lessor, hereby assumes all risk of damage
to property of Lessee or injury to persons, in, upon or about the Industrial
Center arising from any cause and Lessee hereby waives all claims in respect
thereof against Lessor.  See Addendum.

 

8.8      Exemption
of Lessor from Liability.   Lessee
hereby agrees that Lessor shall not be liable for injury to Lessee’s business
or any loss of income there from or for damage to the goods, wares, merchandise
or other property of Lessee.  Lessee’s
employees, invitees, customers, or any other person in or about the Premises or
the Industrial Center, nor shall Lessor be liable for injury to the person of
Lessee, Lessee’s employees, agents or contractors, whether such damage or
injury is caused by or results from fire, steam, electricity, gas, water or
rain, or from the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures,
or from any other cause, whether said damage or injury results from conditions
arising upon the Premises or upon other portions of the Industrial Center, or
from other sources or places and regardless of whether the cause of such damage
or injury or the means of repairing the same is inaccessible to Lessee.  Lessor shall not be liable for any damages
arising from any act or neglect of any other Lessee, occupant or user of the
Industrial Center, nor from the failure of Lessor to enforce the provisions of
any other lease of the Industrial Center.

 

9.         Damage
or Destruction

 

9.1      Definitions.

 

(a)       “Premises Partial
Damage” shall mean if the Premises are damaged or destroyed to the extent that
the cost of repair is less than fifty percent of the then replacement cost of
the Premises.

 

(b)       “Premises Total
Destruction” shall mean if the Premises are damaged or destroyed to the extent
that the cost of repair is fifty percent or more of the then replacement cost
of the Premises.

 

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

 

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

 

(e)       “Industrial Center
Buildings” shall mean all of the buildings on the Industrial Center site.

 

(f)        “Industrial Center
Buildings Total Destruction” shall mean if the Industrial Center Buildings are
damaged or destroyed to the extent that the cost of repair is fifty percent or
more of the then replacement cost of the Industrial Center Buildings.

 

3

 

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

 

(h)       “Replacement Cost” shall
mean the amount of money necessary to be spent in order to repair or rebuild
the damaged area to the condition that existed immediately prior to the damage
occurring excluding all improvements made by lessees.

 

9.2      Premises
Partial Damage; Premises Building Partial Damage.

 

(a)       Insured Loss:  Subject to the provisions of paragraphs 9.4
and 9.5, if at any time during the term of this Lease there is damage which is
not an Insured Loss and which fails into the classification of either Premises
Partial Damage or Premises Building Partial Damage, then Lessor shall, at
Lessor’s expense, repair such damage to the Premises, but not Lessee’s
fixtures, equipment or tenant improvements, as soon as reasonably possible and
this Lease shall continue in full force and effect.

 

(b)       Uninsured Loss:  Subject to the provisions of paragraphs 9.4
and 9.5, if at any time during the term of this Lease there is damage which is
not an insured Loss and which falls within the classification of Premises
Partial Damage or Premises Building Partial Damage, unless caused by a
negligent or willful act of Lessee (in which event Lessee shall make the
repairs at Lessee’s expense), which damage prevents Lessee from using the
Premises, Lessor may at Lessor’s option either (i) repair such damage as soon
as reasonably possible at Lessor’s expense, in which event this Lease shall
continue in full force and effect, or (ii) give written notice to Lessee within
thirty (30) days after the date of the occurrence of such damage of Lessor’s
intention to cancel and terminate this Lease as of the date of the occurrence
of such damage.  In the event Lessor
elects to give such notice of Lessor’s intention to cancel and terminate this Lease,
Lessee shall have the right within ten (10) days after the receipt of such
notice to give written notice to Lessor of Lessee’s intention to repair such
damage at Lessee’s expense, without reimbursement from Lessor, in which event
this Lease shall continue in full force and effect, and Lessee shall proceed to
make such repairs as soon as reasonably possible.  If Lessee does not give such notice within such 10-day period
this Lease shall be cancelled and terminated as of the date of the occurrence
of such damage.

 

9.3      Premises
Total Destruction; Premises Building Total Destruction; Industrial Center
Buildings Total Destruction.

 

(a)       Subject to the
provisions of paragraphs 9.4 and 9.5, if at any time during the term of this
Lease there is damage, whether or not it is an insured Loss, and which falls
into the classifications of either (i) Premises Total Destruction, or (ii)
Premises Building Total Destruction, or (iii) Industrial Center Buildings Total
Destruction, then Lessor may at Lessor’s option either (i) repair such damage
or destruction, but not Lessee’s fixtures, equipment or tenant improvements, as
soon as reasonably possible at Lessor’s expense, and this Lease shall continue
in full force and effect, or (ii) give written notice to Lessee within thirty
(30) days after the date of occurrence of such damage of Lessor’s intention to
cancel and terminate this Lease, in which case this Lease shall be cancelled
and terminated as of the date of the occurrence of such damage.

 

9.4      Damage
Near End of Term.

 

(a)       Subject to paragraph
9.4(b), if at any time during the last six months of the term of this Lease
there is substantial damage, whether or not an Insured Loss, which falls within
the classification of Premises Partial Damage, Lessor may at Lessor’s option
cancel and terminate this Lease as of the date of occurrence of such damage by
giving written notice to Lessee of Lessor’s election to do so within 30 days
after the date of occurrence of such damage.

 

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

 

9.5      Abatement
of Rent; Lessee’s Remedies.

 

(a)       In the event Lessor
repairs or restores the Premises pursuant to the provisions of this paragraph
9, the rent payable hereunder for the period during which such damage, repair
or restoration continues shall be abated in proportion to the degree to which
Lessee’s use of the Premises is impaired. 
Except for abatement of rent, if any, Lessee shall have no claim against
Lessor for any damage suffered by reason of any such damage, destruction,
repair or restoration.

 

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

 

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

 

9.7      Waiver.   Lessor and Lessee
waive the provisions of any statute which relate to termination of leases when
leased property is destroyed and agree that such event shall be governed by the
terms of this Lease.

 

10.      Real
Property Taxes.

 

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

 

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

 

10.3    Definition
of “Real Property Tax.”   As
used herein, the term “real property tax” shall include any form of real estate
tax of assessment, general, special, ordinary or extraordinary, and any license
fee, commercial rental tax, improvement bond or bonds, levy or tax (other than
inheritance, personal income or estate taxes) imposed on the Industrial Center
or any portion thereof by any authority having the direct or indirect power to
tax, including any city, county, state or federal government, or any school,
agricultural, sanitary, fire, street, drainage or other improvement district
thereof, as against any legal or equitable interest of Lessor in the Industrial
Center or in any portion thereof, as against Lessor’s right to rent or other
income there from, and as against Lessor’s business of leasing the Industrial
Center.  The term “real property tax”
shall also include any tax, fee, levy, assessment or charge (i) in substitution
of, partially or totally, any tax, fee, levy, assessment or charge hereinabove
included within the definition of “real property tax,” or (ii) the nature of
which was hereinbefore included within the definition of “real property tax,”
or (iii) which is imposed for a service or right not charged prior to June 1,
1978, or, if previously charged, has been increased since June 1, 1978, or (iv)
which is imposed as a result of a transfer, either partial or total, of
Lessor’s interest in the Industrial Center or which is added to a tax or charge
hereinbefore included within the definition of real property tax by reason of
such transfer, or (v) which is imposed by reason of this transaction, any
modifications or changes hereto, or any transfers hereof.

 

10.4    Joint
Assessment.  If
the Industrial Center is not separately assessed, Lessee’s Share of the real
property tax 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 determined by Lessor from the respective
valuations assigned in the assessor’s work sheets or such other information as
may be reasonably available.  Lessor’s
reasonable determination thereof, in good faith, shall be conclusive.

 

10.5    Personal
Property Taxes.

 

(a)       Lessee shall pay prior
to delinquency all taxes assessed against and levied upon trade fixtures, furnishings,
equipment and all other personal property of Lessee contained in the Premises
or elsewhere.  When possible, Lessee
shall cause said trade fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property of Lessor.

 

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

 

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

 

12.      Assignment
and Subletting.

 

12.1    Lessor’s
Consent Required.  
Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage, sublet, or otherwise transfer or encumber all or any part of Lessee’s
interest in the Lease or in the Premises, without Lessor’s prior written
consent, which Lessor shall not unreasonably withhold.  Lessor shall respond to Lessee’s request for
consent hereunder in a timely manner and any attempted assignment, transfer,
mortgage, encumbrance or subletting without such consent shall be void, and
shall constitute a breach of this Lease without the need for notice to Lessee
under paragraph 13.1  See Addendum for
additional terms.

 

4

 

12.3    Terms
and Conditions of Assignment.   Regardless of Lessor’s consent, no assignment
shall release Lessee of Lessee’s obligations hereunder or alter the primary
liability of Lessee to pay the Base Rent and Lessee’s Share of Operating
Expenses, and to perform all other obligations to be performed by Lessee
hereunder.  Lessor may accept rent from
any person other than Lessee pending approval or disapproval of such
assignment.  Neither a delay in the
approval or disapproval of such assignment nor the acceptance of rent shall
constitute a waiver or estoppel of Lessor’s right to exercise its remedies for
the breach of any of the terms or conditions of this paragraph 12 or this
Lease.  Consent to one assignment shall
not be deemed consent to any subsequent assignment.  In the event of default by any assignee of Lessee or any
successor of Lessee, in the performance of any of the terms hereof, Lessor may
proceed directly against Lessee without the necessity of exhausting remedies
against said assignee.  Lessor may
consent to subsequent assignments of this Lease or amendments or modifications
to this Lease with assignees of Lessee, without notifying Lessee, or any
successor of Lessee, and without obtaining its or their consent thereto and
such action shall not relieve Lessee of liability under this Lease.

 

12.4    Terms
and Conditions Applicable to Subletting. Regardless of
Lessor’s consent, the following terms and conditions shall apply to any
subletting by Lessee of all or any part of the Premises and shall be included
in subleases:

 

(a)       Lessee hereby assigns
and transfers to Lessor all of Lessee’s interest in all rentals and income
arising from any sublease heretofore or hereafter made by Lessee, and Lessor
may collect such rent and income and apply same toward Lessee’s obligations
under this Lease; provided, however, that until a default shall occur in the
performance of Lessee’s obligations under this Lease, Lessee may receive,
collect and enjoy the rents accruing under such sublease.  Lessor shall not, by reason of this or any
other assignment of such sublease to Lessor nor by reason of the collection of
the rents from a sublessee, be deemed liable to the sublessee for any failure
of Lessee to perform and comply with any of Lessee’s obligations to such
sublessee under such sublease.  Lessee
hereby irrevocably authorizes and directs any such sublessee, upon receipt of a
written notice from Lessor stating that a default exists in the performance of
Lessee’s obligations under this Lease, to pay to Lessor the rents due and to
become due under the sublease.  Lessee
agrees that such sublessee shall have the right to rely upon any such statement
and request from Lessor, and that such sublessee shall pay such rents to Lessor
without any obligation or right to inquire as to whether such default exists
and notwithstanding any notice from or claim from Lessee to the contrary.  Lessee shall have no right or claim against
such sublessee or Lessor for any such rents so paid by said sublessee to
Lessor.

 

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

 

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

 

(d)       The consent by Lessor to
any subletting shall not release Lessee from its obligations or after the
primary liability of Lessee to pay the rent and perform and comply with all of
the obligations of Lessee to be performed under this Lease.

 

(e)       The consent by Lessor to
any subletting shall not constitute a consent to any subsequent subletting by
Lessee or to any assignment or subletting by the sublessee.  However, Lessor may consent to subsequent
sublettings and assignments of the sublease or any amendments or modifications
thereto without notifying Lessee or anyone else liable on the Lessee or
subleased and without obtaining their consent and such action shall not relieve
such persons from liability.

 

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

 

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

 

(h)       Each and every consent
required of Lessee under a sublease shall also require the consent of Lessor.

 

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

 

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

 

(k)       With respect to any
subletting to which Lessor has consented, Lessor agrees to deliver a copy of
any notice of default by Lessee to the sublessee.  Such sublessee shall have the right to cure a default of Lessee
within ten (10) days after service of said notice of default upon such
sublessee, and the sublessee shall have a right of reimbursement and offset
from and against Lessee for any such defaults cured by the sublessee.

 

12.5    Attorney’s
Fees.   In the
event Lessee shall assign or sublet the Premises or request the consent of
Lessor to any assignment for subletting or if Lessee shall request the consent
of Lessor for any act Lessee proposes to do than Lessee shall pay Lessor’s
reasonable attorneys fees incurred in connection therewith, such attorneys fees
not to exceed $350.00 for each such request.

 

13.      Default:  Remedies.

 

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

 

(a)       The vacating or
abandonment of the Premises by Lessee.

 

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

 

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

 

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

 

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

 

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

 

(a)       Terminate Lessee’s right
to possession of the Premises by any lawful means, in which case this Lease and
the term hereof shall terminate and Lessee shall immediately surrender
possession of the Premises to Lessor. 
In such event Lessor shall be entitled to recover from Lessee all
damages incurred by Lessor by reason of Lessee’s default including, but not
limited to, the cost of recovering possessions of the Premises; expenses of
reletting, including necessary renovation and alteration of the Premises,
reasonable attorney’s fees, and any real estate commission actually paid; the
worth at the time of award by the court having jurisdiction thereof of the
amount by which the unpaid rent for the balance of the term after the time of
such award exceeds the amount of such rental loss for the same period that
Lessee proves could be reasonably avoided; that portion of the leasing
commission paid by Lessor pursuant to paragraph 15 applicable to the unexpired
term of this Lease.

 

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

 

(c)       Pursue any other remedy
now or hereafter available to Lessor under the laws or judicial decisions of
the state wherein the Premises are located. 
Unpaid installments of rent and other unpaid monetary obligations of Lessee
under the terms of this Lease shall bear interest from the date due at the
maximum rate then allowable by law. 
Lessor’s remedies shall include the relief set forth in section 1951.2
of the California Civil Code.

 

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

 

5

 

13.4    Late
Charges.  Lessee
hereby acknowledges that late payment by Lessee to Lessor of Base Rent,
Lessee’s Share of Operating Expenses or other sums due hereunder will cause
Lessor to incur costs not contemplated by this Lease, the exact amount of which
will be extremely difficult to ascertain. 
Such costs include, but are not limited to, processing and accounting
charges, and late charges which may be imposed on Lessor by the terms of any
mortgage or trust deed covering the Property. 
Accordingly, if any installment of Base Rent, Operating Expenses, or any
other sum due from Lessee shall not be received by Lessor or Lessor’s designee
within ten (10) days after such amount shall be due then, without any
requirement for notice to Lessee,. 
Lessee shall pay to Lessor a late charge equal to 6% of such overdue
amount.  The parties hereby agree that
such late charge represents a fair and reasonable estimate of the costs Lessor
will incur by reason of late payment by Lessee.  Acceptance of such late charge by Lessor shall in no event
constitute a waiver of Lessee’s default with respect to such overdue amount,
nor prevent Lessor from exercising any of the other rights and remedies granted
hereunder.  In the event that a late
charge is payable hereunder, whether or not collected, for three (3)
consecutive installments of any of the aforesaid monetary obligations of
Lessee, then Base Rent shall automatically become due and payable quarterly in
advance, rather than monthly, notwithstanding paragraph 4.1 or any other
provision of this Lease to the contrary.

 

14.      Condemnation.  If the premises or
any portion thereof or the Industrial center are taken under the power of
eminent domain, or sold under the threat of the exercise of said power (all of
which are herein called “condemnation”), this Lease shall terminate as to the
part so taken as of the date the condemning authority takes title or
possession, whichever first occurs.  If
more than ten percent of the floor area of the Premises, or more than
twenty-five percent of that portion of the Common Areas designated as parking
for the Industrial Center is taken by condemnation, Lessee may, at Lessee’s
option, to be exercised in writing only 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 rent shall be reduced in the proportion that the floor area of the
Premises taken bears to the total floor area of the Premises.  No reduction of rent shall occur if the only
area taken is that which does not have the Premises located thereon.  Any award for the taking of all or any part
of the Premises under the power of eminent domain or any payment made under
threat of the exercise of such power shall be the property of Lessor, whether
such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any award for loss of or damage to
Lessee’s trade fixtures and removable personal property.  In the event that this Lease is not
terminated by reason of such condemnation, Lessor shall to the extent of
severance damages received by Lessor in connection with such condemnation,
repair any damage to the Premises caused by such condemnation except to the
extent that Lessee has been reimbursed therefor by the condemning
authority.  Lessee shall pay any amount
in excess of such severance damages required to complete such repair.

 

15.      Broker’s
Fee.

 

(a)       Upon execution of this
Lease by both parties, Lessor shall pay to Pacifica Commercial Realty Licensed
real estate broker(s), a fee as set forth in a separate agreement between
Lessor and said broker(s), or in the event there is no separate agreement
between Lessor and said broker(s), the sum of $ 3,832.40, for brokerage
services rendered by said broker(s) to Lessor in this transaction.

 

(b)       Lessor agrees to pay
said fee not only on behalf of Lessor but also on behalf of any person,
corporation, association, or other entity having an ownership interest in said
real property or any part thereof, when such fee is due hereunder.  Any transferee of Lessor’s interests in this
Lease, whether such transfer is by agreement or by operation of law, shall be
deemed to have assumed Lessor’s obligation under this paragraph 15.

 

16.      Estoppel
Certificate.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

21.      Additional
Rent.  All
monetary obligations of Lessee to Lessor under the terms of this Lease,
including but not limited to Lessee’s share of Operating Expenses and insurance
and tax expenses payable shall be deemed to be rent.

 

22.      Incorporation
of Prior Agreements; Amendments.  This
Lease contains all agreements of the parties with respect to any matter
mentioned herein. No prior or contemporaneous agreement or understanding
pertaining to any such matter shall be effective.  This lease may be modified in writing only, signed by the parties
in interest at the time of the modification. Except as otherwise stated in this
Lease, Lessee hereby acknowledges that neither the real estate broker listed
paragraph 15 hereof nor any cooperating broker on this transaction nor the
Lessor or any employee or agents of any of said persons has made any oral or
written warranties or representations to Lessee relative to the condition or
use by Lessee of the Premises or the Property and Lessee acknowledges that
Lessee assumes all responsibility regarding the Occupational Safety Health Act,
the legal use and adaptability of the Premises and the compliance thereof with
all applicable laws and regulations in effect during the term of this Lease
except as otherwise specifically stated in this Lease.

 

23.      Notices.  Any notice required
or permitted to be given hereunder shall be in writing and may be given by
personal delivery or by certified mail, and if given personally or by mail,
shall be deemed sufficiently given if addressed to Lessee or to Lessor at the
address noted below the signature of the respective parties, as the case may
be.  Either party may by notice to the
other specify a different address for notice purposes except that upon Lessee’s
taking possession of the Premises, the Premises shall constitute Lessee’s
address for notice purposes.  A copy of
all notices required or permitted to be given to Lessor hereunder shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by notice to Lessee.

 

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

 

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

 

26.      Holding
Over.  If
Lessee, with Lessor’s consent, remains in possession of the Premises or any part
thereof after the expiration of he term hereof, such occupancy shall be a
tenancy from month to month upon all the provisions of this Lease pertaining to
the obligations of Lessee, but all Options, if any, granted under the terms of
this Lease shall be deemed terminated and be of no further effect during said
month to month tenancy.

 

6

 

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

 

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

 

29.      Binding
Effect: Choice of Law.  Subject
to any provisions hereof restricting or subletting by Lessee and subject to the
provision of paragraph 17, this Lease shall bind the parties, their personal
representatives, successors and assigns. 
The laws of the State where the Industrial Center is located and any
litigation concerning this Lease between the parties hereto shall be initiated
in the county in which the Industrial Center is located.

 

30.      Subordination.

 

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

 

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

 

31.      Attorney’s
Fees.  If either
party or the broker(s) named herein bring an action to enforce the terms hereof
or declare rights hereunder, the prevailing party in any such action, on trial
or appeal, shall be entitled to his reasonable attorney’s fees to be paid by
the losing party as fixed by the court. 
The provisions of this paragraph shall inure to the benefit of the
broker named herein who seeks to enforce a right hereunder.

 

32.      Lessor’s
Access.  Lessor
and Lessor’s agents shall have the right to enter the Premises at reasonable
times for the purpose of inspecting the same, showing the same to prospective
purchasers, lenders, or lessees, and making such alterations, repairs,
improvements or additions to the Premises or to the building of which they are
part as Lessor may deem necessary or desirable. Lessor may at any time place on
or about the premises or the Building any ordinary “For Sale” signs and Lessor
may at any time during the last 120 days of the term hereof place on or about
the premises any ordinary “For Lease” signs. 
All activities of Lessor pursuant to this paragraph shall be without
abatement of rent, nor shall Lessor have any liability to Lessee for the same.

 

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

 

34.      Signs.  Lessee shall not
place any sign upon the Premises or the industrial Center without Lessee’s
prior written consent.  Under no
circumstances shall Lessee place a sign on any roof of the Industrial Center.

 

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

 

36.      Consents.  Except for
paragraph 33 hereof, wherever in this Lease the consent of one party is
required to an act of the other party such consent shall not be unreasonably
withheld or delayed.

 

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

 

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

 

39.      Options.

 

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

 

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

 

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

 

39.4    Effect
of Default on Options.

 

(a)       Lessee shall have no
right to exercise an Option, notwithstanding any provision in the grant of
Option to the contrary, (i) during the time commencing from the date Lessor
gives to Lessee a notice of default pursuant to paragraph 13.1(b) or 13.1(c)
and continuing until the noncompliance alleged in said notice of default is
cured, or (ii) during the period of time commencing on the date after a
monetary obligation to Lessor is due from Lessee and unpaid (without any
necessity for notice thereof to Lessee) and continuing until the obligation is
paid, or (iii) at any time after an event of default described in paragraphs
13.1(a), 13.1(d), or 13.1(e) (without any necessity of Lessor to give notice of
such default to Lessee), nor (iv) in the event that Lessor has given to Lessee
three or more notices of default under paragraph 13.1(b), or paragraph 13.1(c),
whether or not the defaults are cured, during the 12 month period of time
immediately prior to the time that Lessee attempts to exercise the subject
Option.

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

45.      Offer.  Preparation of this
Lease by Lessor or Lessor’s agent and submission of same to Lessee shall not be
deemed an offer to lease.  This Lease
shall become binding upon Lessor and Lessee only when fully executed by Lessor
and Lessee.

 

46.      Addendum.  Attached hereto is an addendum or addenda
containing paragraphs A through H which constitute a part of this Lease.

 

47.      Modification
For Lender.  If
in connection with obtaining financing for the building, the Lender shall
request reasonable modifications in this Lease as a condition to such
financing, Lessee will not unreasonably withhold, delay, or defer its consent
thereto, provided that such modifications do not increase the obligations of
Lessee hereunder or materially adverse affect the leasehold interest hereby
created.

 

48.      Lessor
Option to Relocate Lessee.  At
any time after Lessee’s execution of this Lease, Lessor shall have the right,
upon providing Lessee thirty (30) days notice in writing, to provide and
furnish Lessee with space elsewhere in the building of approximately the same
size as said Premises, and to move and place Lessee in such new space at
Lessor’s expense.  In the event Lessor
moves Lessee to such new space, then this Lease and each and all of the terms
and covenants and conditions hereof shall thereupon remain in full force and
effect and be deemed applicable to such new space except that a revised Exhibit
“A” shall become a part of this Lease and shall reflect the location of the new
space and Paragraphs 4.1, 4.2 and 5 shall be amended to show correct data.  Should Lessee refuse to permit Lessor to
move Lessee to such new space at the end of said thirty (30) day period, Lessor
shall have the right to terminate this Lease by notice to such effect given to
Lessee in writing within ten (10) days following the end of said thirty (30)
day period, which termination shall be effective sixty (60) days after the date
of the original relocation by Lessor.

 

49.      Mortgage
Protection.  Lessee
agrees to give any mortgages and/or trust deed holders, as to all or a portion
of the Premises, by registered mail, a copy of any notice of default served
upon Lessor, provided that prior to such notice Lessee has been notified in
writing (by way of notice or assignment of rents and leases, or otherwise) of
the addresses of such mortgages and/or trust deed holders.  Lessee agrees not to exercise any remedies
available by virtue of a default unless Lessor shall have failed to cure such
default within thirty (30) days after receipt of notice of default or such
additional time as may be reasonably necessary to cure the default in the case
of a default incapable of being cured within thirty (30) days.  Lessee further agrees that the morgages
and/or trust deed holder shall have an additional thirty (30) days within which
to cure such default, or if such default cannot be cured within that time, then
such additional time as may be necessary if within such thirty (30) days any
mortgagee and/or trust deed holder has commenced and is diligently pursuing the
remedies necessary to cure such default (including but not limited to
commencement of foreclosure proceedings if necessary to effect such cure), in
which event such right, if any, as Lessee might otherwise have to terminate the
Lease shall not be exercised while such remedies are being so diligently
pursued.

 

8.1      Liability
Insurance-Lessee. 
Lessee shall, at Lessee’s expense, obtain and keep in force during the
term of this Lease a policy of Comprehensive General Liability insurance
utilizing an Insurance Services Office standard form with Broad Form General
Liability Endorsement (GL0404), or equivalent, in an amount of not less than 1)
$1,000,000 per occurrence of Bodily Injury and Property Damage combined single
limit with a $1,000,000 excess liability policy, or 2) $1,000,000 per
occurrence of Bodily Injury and Property Damage with a $2,000,000 General
Aggregate Bodily Injury and Property Damage, and shall insure Lessee with
Lessor as an additional insured against liability arising out of the use, occupancy
or maintenance of the Premises.  The
policy shall insure performance by Lessee of the indemnity provisions of this
paragraph 8.  The limits of said
insurance shall not, however, limit the liability of Lessee hereunder.

 

LESSOR AND LESSEE HAVE
CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED
HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLNTARY
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.

 

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

 

	
  LESSOR

  	
   

  	
  LESSEE

  
	
   

  	
   

  	
   

  
	
  William D & Edna J. Wright dba

  	
   

  	
  ValueClick, Inc.

  
	
  South Coast Business Park

  	
   

  	
  a Delaware Corporation

  
	
  By 

  	
  /s/
  [ILLEGIBLE]

  	
   

  	
  By 

  	
  /s/
  [ILLEGIBLE]

  
	
  By 

  	
   

  	
   

  	
  By 

  	
   

  
	
  Executed on

  	
  9/10/99

  	
   

  	
  Executed on

  	
   

  
	
  (Corporate Seal)

  	
   

  	
  (Corporate Seal)

  
	
   

  	
   

  	
   

  
	
  ADDRESS FOR NOTICES AND RENT

  	
   

  	
  ADDRESS

  
	
   

  	
   

  	
   

  
	
  130 Garden Street

  	
   

  	
   

  
	
  Santa Barbara, California 93101

  	
   

  	
   

  
	
   

  	
   

  	
   

  
							

 

8

 

1.     Conditions
Precedent to Effectiveness.  In addition to any other conditions for the benefit of Lessor
under this Lease, Lessor’s obligations under the Lease and the effectiveness of
the Lease as against the lessor are subject to the following condition for the
benefit of Lessor, which condition may be waived in Lessor’s sole and absolute
discretion.

 

a.     The execution and delivery by Q.A.D., Inc.,
the existing Lessee of Suites 1 & 2 of the Premises, of any document
necessary to terminate its leasehold interest in Suites 1 & 2, upon terms
and conditions which are acceptable to Lessor in Lessor’s sole and absolute
discretion.

 

IN WITNESS
WHEREOF, Lessor and Lessee have each caused this Addendum to be executed
concurrently with the Lease of which this Addendum forms a part.

 

LESSOR:

 

WILLIAM D & EDNA J. WRIGHT
dba

SOUTH COAST BUSINESS PART

 

	
  BY:

  	
  /s/ Tony Bortolozzo

  	
   

  	
   

  	
  Dated:

  	
  9/10/99

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  LESSEE: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VALUECLICK, INC., A DELAWARE CORPORATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BY:

  	
  /s/ J.P. Ziertz

  	
   

  	
  Dated:

  	
  9/2/99

  	
   

  
	
  Title

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BY:

  	
   

  	
   

  	
  Dated:

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
   

  

 

9

 

ADDENDUM
TO LEASE

 

This
ADDENDUM is attached to and forms a part of that certain Standard Industrial
Lease dated for reference purposes August 30, 1999, by and between William D
& Edna J. Wright dba South Coast Business Park (“Lessor”), and ValueClick,
Inc., a Delaware Corporation (“Lessee”). 
The said Standard Industrial Lease is hereby modified/supplemented (and
as modified/supplemented is hereinafter referred to as “this Lease”) in the
following particulars only:

 

A.            Option to Extend Term of Lease.  Lessee is hereby granted the option to
extend the term of this Lease for N/A
(        ) additional successive
periods of N/A (        ) years
each.  The options shall be exercised by
the delivery of written notice to Lessor no earlier than two hundred seventy
(270) days and no later than one hundred eighty (180) days prior to the
expiration of the lease term then in effect. 
Any extentions granted hereunder shall be on the same terms and
conditions applicable to the initial term except as to rent, which shall be
increased in accordance with Paragraph B(2) below.  Lessee’s right to exercise the options granted herein is subject
to the terms and conditions set forth in Paragraph 39 of this Lease.

 

B.            Adjustments to Base Rent.

(1)       Cost of Living Adjustments to Base
Rent.  The Base Rent payable pursuant to
Paragraph 4.1 shall be subject to further adjustment as of N/A, and as of the
same date each year thereafter during the initial lease term and any extension
period. Said date is hereinafter referred to as the “Adjustment Date.”  The adjustment shall be made as follows:

 

The
Base Rent for the Premises shall be adjusted by the same percentage as the
increase, if any, in the Consumer Price Index (All Items for All Urban Consumers
1982-84=100 Base), of the United States Department of Labor, Bureau of Labor
Statistics for Los Angeles-Anaheim-Riverside, CA (the “Index”).  The adjustment shall be calculated according
to the following formula: 

 

X
= A x B/C

 

X
= Adjusted rent

 

A
= Base rent as of the first month of the term then in effect.

 

B
= The monthly index for the third month immediately preceding the Adjustment
Date.

 

C
= The monthly index for the third month immediately preceding the first month
of the term then in effect.

 

The monthly rent as so
adjusted shall be payable for each month commencing with the Adjustment Date
and continuing until the next Adjustment Date.

 

1

 

If
the Index is discontinued or revised during the term of this Lease, such other
government Index or computation with which it is replaced shall be used in
order to obtain substantially the same result as would be obtained if the Index
had not been discontinued or revised.

 

2

 

D.            Use.  Paragraph 6 of this Lease is hereby supplemented as follows:

 

(1)       Prohibited Uses.  Lessee shall not do or permit anything to be
done in or about the Premises nor bring or keep anything therein which will in
any way increase the existing rate of or affect any fire or other insurance
upon the Premises or any of its contents, or cause a cancellation of any
insurance policy covering the Premises or any part thereof or any of its
contents.  Lessee shall not commit or
suffer to be committed any nuisance or waste in or upon the Premises.  Lessee shall not use the Premises or permit
anything to be done in or about the Premises which will in any way conflict
with any law, statute, ordinance or governmental rule or regulation now in
force or which may hereafter be enacted or promulgated.  Lessee shall not keep any animals or pets on
the Premises.  Lessee shall not use or
store “hazardous materials or wastes” on the Premises, as such terms are
defined by applicable federal and state law, without Lessor’s prior written
consent.  If such consent is given,
Lessee shall comply with governmental laws, rules and regulations pertaining to
hazardous materials and wastes.  Lessor
shall have a right of re-entry upon the Premises on reasonable notice and at
reasonable times for purposes of inspection, contamination testing and
remediation.

 

(2)       Installation of Specialized Equipment and
Use of Lessee’s Possessions on the Premises. 
Lessee shall not install on the Premises any specialized equipment
requiring the use of a power source (including, but not limited to, computer
hardware or software) without the prior written consent of Lessor.  Lessor shall give its consent to such
installation provided the conditions contained herein are satisfied.  Lessor shall not be liable to Lessee for
damage to Lessee or Lessee’s possessions, including but not limited to
furniture, fixtures, equipment (specialized or otherwise), and inventory, from
any cause.  Lessee waives all claims
against Lessor for damage to Lessee’s possessions arising for any reason.  Lessee shall comply with all laws,
regulations and ordinances relating to the condition and use of any and all of
Lessee’s possessions on the Premises, including laws requiring the alteration,
maintenance and restoration of the Premises as a result of Lessee’s particular
use.  Provided, however, any required
alterations to the Premises shall be conditioned upon Lessor’s prior written
consent.  The Premises shall not be
electrically overloaded. No equipment, machinery, apparatus or other appliance
shall be used or operated on the Premises in such a manner that such equipment
will in any way injure, vibrate or shake the Premises, or place an excessive
burden on power sources installed on the Premises.

 

E.             Assignment and Subletting.  Lessee hereby understands and agrees that
Lessor may withhold its consent to any requested assignment or subletting, and
such withholding of consent shall be deemed reasonable, in the event that the
proposed assignee or sublessee intends to use or store hazardous wastes or
materials on the Premises.  Also, it is
a requirement that Lessor receive seventy five percent (75%) of any
consideration or increase in rent received or to be received by Lessee for such
assignment or sublease.  Please note
that the term of the sublease may not exceed the term of the “master” lease.

 

F.             Indemnity.  The indemnification of Lessor by Lessee
pursuant to Paragraph 8.7 of this Lease shall also include and extend to any
violation by Lessee of applicable state, federal and local laws pertaining to
the use, storage and discharge of hazardous materials and wastes.

 

G.            Default.  Paragraph 13.1 of this Lease is supplemented to provide that the
release or discharge by Lessee of any hazardous material or wastes in or about
the Premises, or violation of any law or deviation from prescribed

 

3

 

procedures in the use or
storage of hazardous materials or wastes, shall constitute a material default
of this Lease by Lessee.  Wherever used
in this Lease, the terms hazardous wastes and/or hazardous materials shall
include all definitions of hazardous wastes and materials provided by both
federal and California law.

 

4

 

EXHIBIT
"A"

 

[GRAPHIC]EXHIBIT 10.24

 

[AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION LOGO]

 

AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

 

STANDARD SUBLEASE

(Short-form to be used with post 1995 AIR
leases)

 

1.          Parties.  This Sublease,
dated, for reference purposes only, December 21, 1999, is made by and between
Q.A.D., Inc., a Delaware Corporation (“Sublessor”) and BioEnterics Corporation
(“Sublessee”).

 

2.          Premises.  Sublessor hereby
subleases to Sublessee and Sublessee hereby subleases from Sublessor for the
term, at the rental, and upon all of the conditions set forth herein, that
certain real property, including all improvements therein, and commonly known
by the street address of 6430 Via Real, Suites 3, 4, and 5, Carpinteria located
in the County of Santa Barbara, State of California and generally described as
(describe briefly the nature of the property) three contiguous units consisting
of approximately 4,750 SF (“Premises”).

 

3.          Term.

 

3.1     Term.  The term of this Sublease shall
be for twenty-two (22) months commencing on February 1, 2000 and ending on
December 31, 2001 unless sooner terminated pursuant to any provision hereof.

 

3.2     Delay
in Commencement.  Sublessor
agrees to use reasonable efforts to deliver possession of the Premises by the
commencement date.  If, despite said
efforts, Sublessor is unable to deliver possession as agreed, Sublessee agrees
that Sublessor shall not be liable whatsoever for such failure to deliver
possession.

 

4.          Rent.

 

4.1     Base
Rent.  Sublessee shall pay to
Sublessor as Base Rent for the Premises equal monthly payments of $6,412.50 in
advance, on the first day of each month of the term hereof.  Sublessee shall pay Sublessor upon the
execution hereof $6,412.50 as Base Rent for February 1-28, 2000.  Base Rent for any period during the term
hereof which is for less than one month shall be a pro-rata portion of the
monthly installment.

 

4.2     Rent Defined.  All
monetary obligations of Sublessee to Sublessor under the terms of this Sublease
(except for the Security Deposit) are deemed to be rent (“Rent”). 
Rent shall be payable in lawful money of the United States to Sublessor
at the address stated herein or to such other persons or at such other places
as Sublessor may designate in writing.

 

5.          Security
Deposit.  Sublessee
shall deposit with Sublessor upon execution hereof $ 6,412.50 as security for
Sublessee’s faithful performance of Sublessee’s obligations hereunder. The
rights and obligations of Sublessor and Sublessee as to said Security Deposit
shall be as set forth in Paragraph 5 of the Master Lease (as modified by
Paragraph 7.3 of this Sublease).

 

6.          Use.

 

6.1     Agreed Use.  The
Premises shall be used and occupied only for general office use and for no
other purpose.

 

6.3     Acceptance of Premises and Lessee. 
Sublessee acknowledges that:

 

(a)     it has been advised by 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 Sublessee’s intended use,

 

(b)     Sublessee has made such investigation as it
deems necessary with reference to such matters and assumes all responsibility
therefor as the same relate to its occupancy of the Premises, and

 

(c)     neither Sublessor, Sublessor’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 Sublease

 

In addition, Sublessor acknowledges that:

 

(a)     Broker has made no representations,
promises or warranties concerning Sublessee’s ability to honor the Sublease or
suitability to occupy the Premises, and

 

(b)     it is Sublessor’s sole responsibility to
investigate the financial capability and/or suitability of all proposed
tenants.

 

7.          Master
Lease.

 

7.1     Sublessor is the lessee of
the Premises by virtue of a lease, hereinafter the “Master Lease”,
a copy of which is attached hereto marked Exhibit 1, wherein    William D. and Edna J. Wright dba South Coast
Business Park is the lessor, hereinafter the “Master
Lessor”.

 

7.2     This Sublease is and shall
be at all times subject and subordinate to the Master Lease and shall be
subject to consent of Master Lessor.

 

7.3     The terms, conditions and
respective obligations of Sublessor and Sublessee to each other under this
Sublease shall be subordinate to the terms and conditions of the Master Lease.

 

1

 

Therefore, for the purposes of
this Sublease, wherever in the Master Lease the word “Lessor” is used it shall
be deemed to mean the Sublessor herein and wherever in the Master Lease the
word “Lessee” is used it shall be deemed to mean the Sublessee herein.

 

7.4     During the term of this
Sublease and for all periods subsequent for obligations which have arisen prior
to the termination of this Sublease, Sublessee does hereby expressly assume and
agree to perform and comply with, for the benefit of Sublessor and Master
Lessor, each and every obligation of Sublessor under the Master Lease except
for the following paragraphs which are excluded therefrom:  Premises in this Sublease are 4,750 SF.

 

7.5     The obligations that
Sublessee has assumed under paragraph 7.4 hereof are hereinafter referred to as
the “Sublessee’s Assumed Obligations”. 
The obligations that Sublessee has not assumed under paragraph 7.4
hereof are hereinafter referred to as the “Sublessor’s
Remaining Obligations”.

 

7.6     Sublessee shall hold
Sublessor free and harmless from all liability, judgments, costs, damages,
claims or demands including reasonable attorneys’ fees, arising out of
Sublessee’s failure to comply with or perform Sublessee’s Assumed Obligations.

 

7.7     Sublessor agrees to
maintain the Master Lease during the entire term of this Sublease, subject,
however, to any earlier termination of the Master Lease without the fault of
the Sublessor, and to comply with or perform Sublessor’s Remaining Obligations
and to hold Sublessee free and harmless from all liability, judgments, costs,
damages, claims or demands arising out of Sublessor’s failure to comply with or
perform Sublessor’s Remaining Obligations.

 

7.8     Sublessor represents to
Sublessee that the Master Lease in full force and effect and that to
Sublessor’s knowledge no default exists on the part of any Party to the Master
Lease.

 

8.          Assignment
of Sublease and Default.

 

8.1     Sublessor hereby assigns
and transfers to Master Lessor the Sublessor’s interest in this Sublease,
subject however to the provisions of Paragraph 8.2 hereof.

 

8.2     Master Lessor, by
executing this document, agrees that until a Default shall occur in the
performance of Sublessor’s Obligations under the Master Lease, that Sublessor
may receive, collect and enjoy the Rent accruing under this Sublease.  However, if Sublessor shall Default in the
performance of its obligations to Master Lessor then Master Lessor may, at its
option, receive and collect, directly from Sublessee, all Rent owing and to be
owed under this Sublease.  Master Lessor
shall not, by reason of this assignment of the Sublease nor by reason of the
collection of the Rent from the Sublessee, be deemed liable to Sublessee for any
failure of the Sublessor to perform and comply with Sublessor’s Remaining
Obligations.

 

8.3     Sublessor hereby
irrevocably authorizes and directs Sublessee upon receipt of any written notice
from the Master Lessor stating that a Default exists in the performance of
Sublessor’s obligations under the Master Lease, to pay to Master Lessor the
Rent due and to become due under the Sublease. 
Sublessor agrees that Sublessee shall have the right to rely upon any
such statement and request from Master Lessor, and that Sublessee shall pay
such Rent to Master Lessor without any obligation or right to inquire as to
whether such Default exists and notwithstanding any notice from or claim from
Sublessor to the contrary and Sublessor shall have no right or claim against
Sublessee for any such Rent so paid by Sublessee.

 

8.4     No changes or
modifications shall be made to this Sublease without the consent of Master
Lessor.

 

9.          Consent
of Master Lessor.

 

9.1     In the event that the
Master Lease requires that Sublessor obtain the consent of Master Lessor to any
subletting by Sublessor then, this Sublease shall not be effective unless,
within ten days of the date hereof, Master Lessor signs this Sublease thereby
giving its consent to this Subletting.

 

9.2     In the event that the obligations
of the Sublessor under the Master Lease have been guaranteed by third parties
then neither this Sublease, nor the Master Lessor’s consent, shall be effective
unless, within 10 days of the date hereof, said guarantors sign this Sublease
thereby giving their consent to this Sublease.

 

9.3     In the event that Master
Lessor does give such consent then:

 

(a)      Such consent shall not
release Sublessor of its obligations or after the primary liability of
Sublessor to pay the Rent and perform and comply with all of the obligations of
Sublessor to be performed under the Master Lease.

 

(b)      The acceptance of Rent by
Master Lessor from Sublessee or anyone else liable under the Master Lease shall
not be deemed a waiver by Master Lessor of any provisions of the Master Lease.

 

(c)      The consent to this
Sublease shall not constitute a consent to any subsequent subletting or
assignment.

 

(d)      In the event of any
Default of Sublessor under the Master Lease, Master Lessor may proceed directly
against Sublessor, any guarantors or anyone else liable under the Master Lease
or this Sublease without first exhausting Master Lessor’s remedies against any
other person or entity liable thereon to Master Lessor.

 

(e)      Master Lessor may consent
to subsequent sublettings and assignments of the Master Lease or this Sublease
or any amendments or modifications thereto without notifying Sublessor or any
one else liable under the Master Lease and without obtaining their consent and
such action shall not relieve such persons from liability.

 

(f)       In the event that
Sublessor shall Default in its obligations under the Master Lease, then Master
Lessor, at its option and without being obligated to do so, may require
Sublessee to attorn to Master Lessor in which event Master Lessor shall
undertake the obligations of Sublessor under this Sublease from the time of the
exercise of said option to termination of this Sublease but Master Lessor shall
not be liable for any prepaid Rent nor any Security Deposit paid by Sublessee,
nor shall Master Lessor be liable for any other Defaults of the Sublessor under
the Sublease.

 

9.4     The signatures of the
Master Lessor and any Guarantors of Sublessor at the end of this document shall
constitute their consent to the terms of this Sublease.

 

9.5     Master Lessor acknowledges
that, to the best of Master Lessor’s knowledge, no Default presently exists
under the Master Lease of obligations to be performed by Sublessor and that the
Master Lease is in full force and effect.

 

9.6     In the event that
Sublessor Defaults under its obligations to be performed under the Master Lease
by Sublessor, Master Lessor agrees to deliver to Sublessee a copy of any such
notice of default.  Sublessee shall have
the right to cure any Default of Sublessor described in any notice of default
within ten days after service of such notice of default on Sublessee.  If such Default is cured by Sublessee then
Sublessee shall have the right of reimbursement and offset from and against
Sublessor.

 

10.        Brokers
Fee.

 

10.1   Upon execution hereof by
all parties, Sublessor shall pay to Pacifica Commercial Realty and CC
Commercial a licensed real estate broker (“Broker”), a fee as
set forth in a separate agreement between Sublessor and Broker, or in the event
there is no such separate agreement, the sum of $8464.50 for brokerage services
rendered by Broker to Sublessor in this transaction.

 

2

 

10.4   Any fee due from Sublessor
hereunder shall be due and payable upon the exercise of any option to extend or
renew, upon the execution of any new lease, or, in the event of a purchase, at
the close of escrow.

 

10.5   Any transferee of
Sublessor’s interest in this, by accepting an assignment thereof, shall be
deemed to have assumed the obligations of Sublessor under this Paragraph 10.

 

11.        Attorney’s
Fees.  If any party or the
Broker named herein brings an action to enforce the terms hereof or to declare
rights hereunder, the prevailing party in any such action, on trial and appeal,
shall be entitled to his reasonable attorney’s fees to be paid by the losing
party as fixed by the Court.

 

12.        Additional
Provisions.  [If there are no
additional provisions, draw a line from this point to the next printed word
after the space left here.  If there are
additional provisions place the same here.]

 

13.        Rent
Adjustment.  On February 1,
2001 the base rent shall be adjusted by the change, if any, in the Consumer
Price Index (All Items for All Urban Consumers 1982-84=100 Base) of the United
States Department of Labor, Bureau of Labor Statistics for Los Angeles -
Anaheim - Riverside, CA (the “Index”). 
The adjustment shall be calculated according to the following formula:

 

X = A x B/C

X = Adjusted Rent

A = Base Rent as of the first month of the sublease term

B = The monthly index for the third month immediately preceding the
Adjustment Date

C = The monthly index for the third month immediately preceding the
first month of the sublease term

 

The monthly rent as so adjusted
shall be payable for each month commencing with the Adjustment Date and
continuing until the next Adjustment Date.

 

ATTENTION:  NO REPRESENTATION OR RECOMMENDATION IS MADE
BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY REAL ESTATE BROKER
AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS SUBLEASE
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 SUBLEASE.

 

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 PROPERTY, THE STRUCTURAL INTEGRITY, THE CONDITION
OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR
SUBLESSEE’S INTENDED USE.

 

WARNING:  IF THE SUBJECT PROPERTY IS LOCATED IN A
STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE SUBLEASE MAY NEED TO BE
REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.

 

 

	
  Executed at:

  	
  8:00 AM

  	
   

  	
  Q.A.D., Inc., a Delaware Corporation

  
	
  on:

  	
  1/7/01

  	
   

  	
  By

  	
  /s/ Barry
  Anderson

  
	
  Address:

  	
  6267
  Carpinteria Ave, Ste. 100

  	
   

  	
  By

  	
   

  
	
   

  	
  Carpinteria,
  CA 93013

  	
   

  	
  “Sublessor”
  (Corporate Seal)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executed at:

  	
  3:30 PM

  	
   

  	
  BioEnterics Corporation

  
	
  on:

  	
  Dec 29, 1999

  	
   

  	
  By

  	
  /s/ Rich
  Marek

  
	
  Address:

  	
  1035 Cindy
  Lane

  	
   

  	
  By

  	
   

  
	
   

  	
  Carpinteria,
  CA 9301

  	
   

  	
  “Sublessor”
  (Corporate Seal)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executed at:

  	
  9:15 AM

  	
   

  	
  William and Edna Wright dba South Coast
  Business Park

  
	
  on:

  	
  1/12/00

  	
   

  	
  By

  	
  /s/ Jeanne
  Wright-Bortolozzo, Agent

  
	
  Address:

  	
  130 Garden
  Street

  	
   

  	
  By

  	
   

  
	
   

  	
  Santa
  Barbara, CA 93101

  	
   

  	
  “Master
  Lessor” (Corporate Seal)

  

 

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 INDSUTRIAL REAL ESTATE ASSOCIATION, 700 So. Flower St., Suite
600, Los Angeles, 90017.  (213)
687-8777.

 

3

 

ADDENDUM TO THAT CERTAIN SUBLEASE

DATED DECEMBER 21, 1999 FOR SPACE LOCATED AT

6430 VIA REAL, CARPINTERIA, CALIFORNIA

 

 

1.                    Sublessor
warrants that to the best of their knowledge, the building is free of asbestos
and hazardous materials and is compliant with building codes and ADA
requirements.

 

2.       Sublessor shall complete the following:

 

A.      Patch
and paint all wall damage, wall anchor holes.

B.       Replace
stained, discolored ceiling tiles.

C.       Commercial
cleaning of entire carpet area.

D.      In
the event that Sublessee chooses to relamp with a different bulb, Sublessor
agrees to split the cost of materials and complete the installation.

E.       Relamp
exit signs as required.

F.       Repair
flush valve assembly, ladies room.

G.       Remove
furniture.

H.      Will
request from Wright & Company a copy of 5 year fire inspection.

I.        Proximity
card system will be removed and patched. 
Alarm system is rented from Custom Alarm.  Sublessee should contact alarm company directly.

J.        Sublessee
to install own phone/paging system.

K.      Sublessor
will request Landlord to inspect the roof.

L.       Provide
mechanical, electrical, architectural prints for area as required subject to
reasonable notice.

M.     Remove
water filter system at breakroom sink.

N.      Sublessor
will request Master Lessor to identify parking spaces for occupants.

 

	
  Initials:

  	
   

  
	
   

  	
   

  
	
  Sublessee:

  	
  /s/
  [ILLEGIBLE]

  	
   

  	
  Sublessor:

  	
  /s/
  [ILLEGIBLE]

  	
   

  
						

 

 

STANDARD INDUSTRIAL LEASE — MULTI-TENANT

AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

 

[AMERICAN INDUSTRIAL REAL
ESTATE ASSOCIATION LOGO]

 

1.      Parties.  This Lease, dated for reference purposes
only, November 30, 1993 is made by and between William D. & Edna J. Wright
dba South Coast Business Park (herein called “Lessor”) and q.a.d., Inc., a
California Corporation (herein called “Lessee”).

 

2.      Premises, Parking and Common Areas.

 

2.1     Premises.  Lessor hereby leases to Lessee and Lessee
leases from Lessor for the term, at the rental, and upon all of the conditions
set forth herein, real property situated in the County of Santa Barbara, State
of California commonly known as South Coast Business Park, Phases I & II
(46,198 s.f. + 14,000 s.f. = 60,198 s.f. and described as 6430 Via Real,
Suite’s 3 thru 8 (building C), Carpinteria, CA consisting of approximately
9,500 square feet (see exhibit “A” attached hereto) herein referred to as the “Premises”, as may be outlined on an Exhibit
attached hereto, including rights to the Common Areas as hereinafter specified
but not including any rights to the roof of the Premises or to any Building in
the Industrial Center.  The Premises are
a portion of a building, herein referred to as the “Building”.  The Premises, the Building, the Common
Areas, the land upon which the same are located, along with all other buildings
and improvements thereon, are herein collectively referred to as the
“Industrial Center.”

 

2.2     Vehicle
Parking.  Lessee shall be
entitled to 29 vehicle parking spaces, unreserved and unassigned, on those
portions of the Common areas designated by Lessor for parking.  Lessee shall not use more parking spaces
than said number.  Said parking spaces
shall be used only for parking by vehicles no larger than full size passenger
automobiles or pick-up trucks, herein called “Permitted Size Vehicles.”  Vehicles other than Permitted Size Vehicles
are herein referred to as “Oversized Vehicles.”  Lessee shall have the non-exclusive right to use the lot located
at 6410 via Real for parking until such time that construction commences.

 

2.2.1 Lessee shall not permit or
allow any vehicles that belong to or are controlled by Lessee or Lessee’s
employees, suppliers, shippers, customers, or invitees to be loaded, unloaded,
or parked in areas other than those designated by Lessor for such activities.

 

2.2.2 If Lessee permits or allows
any of the prohibited activities described in paragraph 2.2 of this Lease, then
Lessor shall have the right, without notice, in addition to such other rights
and remedies that it may have, to remove or tow away the vehicle involved and
charge the cost to Lessee, which
cost shall be immediately payable upon demand by Lessor.

 

2.3   Common Areas — Definition. 
The term “Common Areas” is defined as all areas and facilities outside
the Premises and within the exiterior boundary line of the Industrial Center
that are provided and designated by the Lessor from time to time for the
general non-exclusive use of Lessor, 
Lessee and of other lessees of the Industrial Center and their
respective employees, suppliers, shippers, customers and invitees, including
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways and landscaped areas.

 

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

 

2.5   Common Areas — Rules and Regulations.  Lessor or such other person(s) as Lessor may
appoint shall have the exclusive control and management of the Common Areas and
shall have the right, from time to time, to establish, modify, amend and
enforce reasonable rules and regulations with respect thereto.  Lessee agrees to abide by and conform to all
such rules and regulations, and to cause its employees, suppliers, shippers,
customers, and invitees to so abide and conform.  Lessor shall not be responsible to Lessee for the non-compliance
with said rules and regulations by other lessees of the Industrial Center.

 

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

 

(a) To make changes to the Common Areas, including, without limitation,
changes in the location, size, shape and number of driveways, entrances,
parking spaces, parking areas, loading and unloading areas, ingress, egress,
direction of traffic, landscaped areas and walkways; (b) To close temporarily
any of the Common Areas for maintenance purposes so long as reasonable access
to the Premises remains available; (c) To designate other land outside the
boundaries of the Industrial Center to be a part of the Common Areas; (d) To
add additional buildings and improvements to the Common Areas; (e) To use the
Common Areas while engaged in making additional improvements, repairs or
alterations to the Industrial Center, or any portion thereof; (f) To and perform
such other acts and make such other changes in, to or with respect to the
Common Areas and Industrial Center as Lessor may, in the exercise of sound
business judgment, deem to be appropriate.

 

2.6.1 Lessor shall at all times
provide the parking facilities required by applicable law and in no event shall
the number of parking spaces that Lessee is entitled to under paragraph 2.2 be
reduced.

 

3.      Term.

 

3.1   Term.  The term of this
Lease shall be for fifty-six (56) months commencing on 5/1/94 or upon receipt of
final approval from City of Carp. and ending on in any event December 31, 1998
unless sooner terminated pursuant to any provision hereof.  See Addendum.

 

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

 

3.3.  Early Possession.  If
lessee occupies the Premises prior to said commencement date, such occupancy
shall be subject to all provisions of this Lease, such occupancy shall not
advance the termination date, and Lessee shall pay rent for such period at the
initial monthly rates set forth below.

 

4.      Rent.

 

4.1   Base Rent.  Lessee
shall pay to Lessor, as Base Rent for the Premises, without any offset or
deduction, except as may be otherwise expressly provided in this Lease, on the
1st day of each month of the term hereof, monthly payments in advance of
$11,875.00.  See Addendum for cost of
living adjustments to Base Rent, and determination of rent during Extension
Periods.  Lessee shall pay Lessor upon
execution hereof $11,875.00 as base Rent for first months rent.  Rent for any period during the term hereof
which is for less than one month shall be a pro rata portion of the Base
Rent.  Rent shall be payable in lawful
money of the United States to Lessor at the address stated herein or to such
other persons or at such other places as Lessor may designate in writing.

 

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

(a)    “Lessee’s Share” is
defined, for purposes of this Lease, as 15.78 percent, guaranteed not to exceed
$.22 per s.f. for the first 12 mos. of occupancy.

(b)    “Operating Expenses” is
defined, for purposes of this Lease, as all costs incurred by Lessor.  If any, for:

(i)      The operation, repair and
maintenance, in neat, clean, good order and condition, of the following:

(aa)    The Common Areas,
including parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting facilities and fences and gates;

(bb)   Trash disposal services;

(cc)    Tenant directories;

(dd)   Fire detection systems including
sprinkler system maintenance and repair;

 

 

 

(ee)    Security services;

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

(ii)     Any deductible portion of
an insured loss concerning any of the items or matters described in this
paragraph 4.2;

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

(iv)    The amount of the real
properly tax to be paid by Lessor under paragraph 10.1 thereof;

(v)     The cost of water, gas and
electricity to service the Common Areas.

 

(c)    The inclusion of the
improvements, facilities and services set forth in paragraph 4.2(b)(i) of the
definition of Operating Expenses shall not be deemed to impose an obligation
upon Lessor to either have said improvements or facilities or to provide those
services unless the Industrial Center already has the same, Lessor already
provides the services, or Lessor has agreed elsewhere in this Lease to provide
the same or some of them.

 

(d)    Lessee’s Share of Operating
Expenses shall be payable by Lessee within ten (10) days after a reasonably
detailed statement of actual expenses is presented to Lessee by Lessor.  At Lessor’s option, however, an amount may
be estimated by Lessor from time to time of Lessee’s Share of annual Operating
Expenses and the same shall be payable monthly or quarterly, as Lessor shall
designate, during each twelve-month period of the Lease term, on the same day
as the Base Rent is due hereunder.  In
the event that Lessee pays Lessor’s estimate of Lessee’s Share of Operating
Expenses as aforesaid, Lessor shall deliver to Lessee within sixty (60) days
after the expiration of each calendar year a reasonably detailed statement
showing Lessee’s Share of the actual Operating Expenses incurred during the
preceding year.  If Lessee’s payments
under this paragraph 4.2(d) during said preceding year exceed Lessee’s Share as
indicated on said statement, Lessee shall be entitled to credit the amount of
such overpayment against Lessee’s Share of Operating Expenses next falling
due.  If Lesse’s payments under this
paragraph during said preceding year were less than Lessee’s Share as indicated
on said statement, Lessee shall pay to Lessor the amount of the deficiency
within ten (10) days after delivery by Lessor to Lessee of said statement.

 

5.      Security
Deposit. 
Lessee shall deposit with Lessor upon execution hereof $11,875.00 as
security for Lessee’s faithful performance of Lessee’s obligations hereunder.  If Lessee fails to pay rent or other charges
due hereunder, or otherwise defaults with respect to any provision of this
Lease, Lessor may use, apply or retain all or any portion of said deposit for
the payment of any rent or other charge in default or for the payment of any
other sum to which Lessor may become obligated by reason of Lessee’s default,
or to compensate Lessor for any loss or damage which Lessor may suffer
thereby.  If Lessor so uses or applies
all or any portion of said deposit, Lessee shall within ten (10) days after
written demand therefor deposit cash with Lessor in an amount sufficient to
restore said deposit to the full amount then required of Lessee.  If the monthly rent shall, from time to time,
increase during the term of this Lease, Lessee shall, at the time of such
increase, deposit with Lessor additional money as a security deposit so that
the total amount of the security deposit held by Lessor shall at all times bear
the same proportion to the then current Base Rent as the initial security
deposit bears to the initial Base Rent set forth paragraph 4, Lessor shall not
be required to keep said security deposit separate from its general
accounts.  If Lessee performs all of
Lessee’s obligations hereunder, said deposit, or so much thereof as has not
theretofore been applied by Lessor, shall be returned, without payment of
interest or other increment for its use to Lessee (or, at Lessor’s option, to
the last assignee, if any, of Lessee’s interest hereunder) at the expiration of
the term hereof, and after Lessee has vacated the Premises.  No trust relationship is created herein
between Lessor and Lessee with respect to said Security Deposit.

 

6.      Use.

 

6.1     Use.  The Premises
shall be used and occupied only for the purpose of manufacturing, developing
and marketing computer software, & training class and for no other use
without Lessor’s prior written consent. 
See Addendum for additional terms.

 

6.2     Compliance with Law.

 

(a)       Lessor
warrants to Lessee that the Premises, in the state existing on the date that
the Lease term commences, but without regard to the use for which Lessee will
occupy the Premises, does not violate any covenants or restrictions of record,
or any applicable building code, regulation or ordinance in effect on such Lease
term commencement date.  In the event it
is determined that this warranty has been violated, then it shall be the
obligation of the Lessor, after written notice from Lessee, to promptly, at
Lessor’s sole cost and expense, rectify any such violation.  In the event Lessee does not give to Lessor
written notice of the violation of this warranty within six months from the
date that the Lease term commences, the correction of same shall be the
obligation of the Lossee at Lessee’s sole cost.  The warranty contained in this paragraph 6.2(a) shall be of no
force or effect if, prior to the date of this Lease, Lessee was an owner or
occupant of the Premises and, in such event, Lessee shall correct any such
violation at Lessee’s sole cost.

 

(b)       Expect
as provided in paragraph 6.2(a) Lessee shall, at Lessee’s expense, promptly
comply with all applicable statutes, ordinances, rules, regulations, orders,
covenants and restrictions of record, and requirements of any fire insurance
underwriters or rating bureaus, now in effect or which may hereafter come into
effect, whether or not they reflect a change in policy from that now existing,
during the term or any part of the term hereof, relating in any manner to the
Premises and the occupation and use by Lessee of the Premises and of the Common
Areas.  Lessee shall not use nor permit
the use of the Premises or the Common Areas in any manner that will tend to
create waste or a nuisance or shall lend to disturb other occupants of the
Industrial Center.

 

6.3     Condition of Premises.

 

(a)       Lessor
shall deliver the Premises to Lessee clean and free of debris on the Lease
commencement date (unless Lessee is already in possession) and Lessor warrants
to Lessee that the plumbing, lighting, air conditioning, heating, and loading
doors in the Premises shall be in good operating condition on the Lease
commencement date.  In the event that it
is determined that this warranty has been violated, then it shall be the
obligation of Lessor, after receipt of written notice from Lessee setting forth
with specificity the nature of the violation, to promptly, at Lessor’s sole
cost, rectify such violation.  Lessee’s
failure to give such written notice to Lessor within thirty (30) days after the
Lease commencement date shall cause the conclusive presumption that Lessor has
compiled with all of Lessor’s obligations hereunder.  The warranty contained in this paragraph 6.3(a) shall be of no
force or effect if prior to the date of this Lease, Lessee was an owner or
occupant of the Premises.  See Addendum.

 

(b)       Except
as otherwise provided in this Lease, Lessee hereby accepts the Premises in
their condition existing as of the Lease commencement date or the date that
Lessee takes possession of this Premises, whichever is earlier, subject to all
applicable zoning, municipal, county and state laws, ordinances and regulations
governing and regulating the use of the Premises, and any covenants or
restrictions of record, and accepts this Lease subject thereto and to all
matters disclosed thereby and by any exhibits attached hereto.  Lessee acknowledges that neither Lessor nor
Lessor’s agent has made any representation or warranty as to the present or
future suitability of the Premises for the conduct of Lessee’s business.

 

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

 

7.1     Lessor’s Obligations. 
Subject to the provisions of paragraphs 4.2 (Operating Expenses), 6
(Use).  7.2 (Lessee’s Obligations) and 9
(Damage or Destruction) and except for damage caused by any negligent or
intentional act or omission of Lessee, 
Lessee’s employees, suppliers, shippers, customers, or invitees, in
which event Lessee shall repair the damage. 
Lessor, at Lessor’s expense, subject to reimbursement pursuant to
paragraph 4.2 shall keep in good condition and repair the foundations, exterior
walls, structural condition of interior bearing walls, and roof of the
Premises, as well as the parking lots, walkways, driveways, landscaping,
fences, signs and utility installations of the Common Areas and all parts
thereof, as well as providing the services for which there is an Operating
Expense pursuant to paragraph 4.2. 
Lessor shall not, however, be obligated to paint the exterior or
interior surface of exterior walls, not shall Lessor be required to maintain,
repair or replace windows, doors or plate glass of the Premises.  Lessor shall have no obligation to make
repairs under this paragraph 7.1 until a reasonable time after receipt of
written notice from Lessee of the need for such repairs.  Lessee expressly waives the benefits of any
statute now or hereafter in effect which would otherwise afford Lessee the
right to make repair at Lessor’s expense or to terminate this Lease because of
Lessor’s failure to keep the Premises in good order, condition and repair.  Lessor shall not be liable for damages or
loss of any kind or nature by reason of Lessor’s failure to furnish any Common
Area Services when such failure is caused by accident, breakage, repairs,
strikes, lockout, or other labor disturbances or disputes of any character, or
by any other cause beyond the reasonable control of Lessor.

 

7.2     Lessee’s Obligations.

 

(a)       Subject
to the provisions of paragraphs 6 (Use), 7.1 (Lessor’s Obligations), and 9
(Damage or Destruction).  Lessee, at
Lessee’s expense, shall keep in good order, condition and repair the Premises
and every part thereof (whether or not the damaged portion of the Premises or
the means of repairing the same are reasonably or readily accessable to Lessee)
including, without limiting the generality of the foregoing, all plumbing, healing,
ventilating and air conditioning systems (Lessee shall procure and maintain, at
Lessee’s expense, a ventilating and air conditioning system maintenance
contract), electrical and lighting facilities and equipment within the
Premises, fixtures, interior walls and interior surfaces of exterior walls,
ceilings, windows, doors, plate glass, and skylights located within the
Premises.  Lessor reserves the right to
procure and maintain the ventilating and air conditioning system maintenance
contract and if Lessor so elects, Lessee shall reimburse Lessor, upon demand,
for the cost thereof.  Lessee shall be
responsible for clean-up of all hazardous waste occurring in or about the
premises.

 

(b)       If
Lessee fails to perform Lessee’s obligations under this paragraph 7.2 or under
any other paragraph of this Lease, Lessor may enter upon the Premises after ten
(10) days prior written notice to Lessee (except in the case of emergency, in
which no notice shall be required), perform such obligations on Lessee’s behalf
and put the Premises in good order, condition and repair, and the cost thereof
together with interest thereon at the maximum rate then allowable by law shall
be due and payable as additional rent to Lessor together with Lessee’s next
Base Rent Installment.

 

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

 

7.3     Alterations and Additions.

 

(a)       Lessees
shall not, without Lessor’s prior written consent make any alterations,
improvements, additions, or Utility installations in, on or about the Premises,
or the Industrial Center, except for nonstructural alterations to the Premises
not exceeding $2,500 in cumulative costs, during the term of this Lease.  In any event, whether or not in excess of
$2,500 in cumulative cost, Lessee shall make no change or alterations to the 

 

2

 

exterior of the Premises nor the exterior of
the Building nor the Industrial Center without Lessor’s prior written
consent.  As used in this paragraph 7.3
the term “Utility Installation” shall mean carpeting, window coverings, air
lines, power panels, electrical distribution systems, lighting fixtures, space
heaters, air conditioning, plumbing and fencing.  Lessor may require that Lessee remove any or all of said
alterations, improvements, additions or Utility Installations at the expiration
of the term, and restore the Premises and the Industrial Center to their prior
condition.  Lessor may require Lessee to
provide Lessor, at Lessee’s sole cost and expense, a lien and completion bond
in an amount equal to one and one-half times the estimated cost of such
improvements, to insure Lessor against any liability for mechanic’s and
materialmen’s liens and to insure completion of the work.  Should Lessee make any alterations, improvements,
additions or Utility installations without the prior approval of Lessor, Lessor
may, at any time during the term of this Lease, require that Lessee remove any
or all of the same.

 

(b)       Any
alterations, improvements, additions or Utility installation in or about the
Premises or the Industrial Center that Lessee shall desire to make and which
requires the consent of the Lessor shall be presented to Lessor in written
form, with proposed detailed plans.  If
Lessor shall give its consent, the consent shall be deemed conditioned upon
Lessee acquiring a permit to do so from appropriate governmental agencies, the
furnishing of a copy thereof to Lessor prior to the commencement of the work
and the compliance by Lessee of all conditions of said permit in a prompt and
expeditious manner.

 

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

 

(d)       All
alterations, improvements, additions and Utility installations (whether or not
such Utility installations constitute trade fixtures of Lessee), which may be
made on the Premises, shall be the property of Lessor and shall remain upon and
be surrendered with the Premises at the expiration of the Lease term, unless
Lessor requires their removal pursuant to paragraph 7.3(a).  Notwithstanding the provisions of this
paragraph 7.3(d), Lessee’s machinery and equipment, other than that which is
affixed to the Premises so that it cannot be removed without material damage to
the Premises, and other than Utility Installations, shall remain the properly
of Lessee and may be removed by Lessee subject to the provisions of paragraph
7.2.

 

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

 

8.      Insurance;
Indemnity.

 

8.1     Liability Insurance — Lessee.

 

See page 8 after article number 49

 

8.2     Liability Insurance — Lessor. 
Lessor shall obtain and keep in force during the term of this Lease a
policy of Combined Single Limit Bodily Injury and Properly Damage Insurance,
insuring Lessor, but not Lessee, against any liability arising out of the
ownership, use, occupancy or maintenance of the Industrial Center in an amount
not less than $1,000,000 per occurrence.

 

8.3     Properly Insurance. 
Lessors shall obtain and keep in force during the term of this Lease a
policy of insurance covering loss or damage to the Industrial Center
improvements, but not Lessee’s personal properly, fixtures, equipment or tenant
improvements.  In an amount not to
exceed the full replacement value thereof, as the same may exist from time to
time, providing protection against all perils included within the
classification of fire, extended coverage, vandalism, malicious  mischief, flood (in the event same is
required by a lender having a lien on the Premises) special extended perils
(“all risk”, as such term is used in the insurance industry), plate glass
insurance and such other insurance as Lessor deems advisable, in addition.  Lessor shall obtain and keep in force,
during the term of this Lease, a policy of rental value insurance covering a
period of one year, with loss payable to Lessor, which insurance shall also
cover all Operating Expenses for said period. 
In the event that the Premises shall suffer an insured loss as defined
in paragraph 9.1(g) hereof, the deductible amounts under the casually insurance
policies relating to the Premises shall be paid by Lessee.

 

8.4     Payment of Premium increase.

 

(a)       After
the term of this Lease has commenced, Lessee shall not be responsible for
paying Lessee’s Share of any increase in the property insurance premium for the
Industrial Center specified by Lessor’s insurance carrier as being caused by
the use, acts or omissions of any other lessee of the Industrial Center, or by
the nature of such other lessee’s occupancy which create an extraordinary or
unusual risk.

 

(b)       Lessee,
however, shall pay the entirety of any increase in the property insurance
premium for the Industrial Center over what it was immediately prior to the
commencement of the term of this Lease if the increase is specified by Lessor’s
insurance carrier as being caused by the nature of Lessee’s occupancy or any
act or omission of Lessee.

 

8.5     Insurance Policies. 
Insurance required hereunder shall be in companies holding a “General
Policyholders Rating” of at least 8 plus, or such other rating as may be
required by a lender having a lien on the Premises, as set forth in the most
current issue of “Best’s Insurance Guide.”  Lessee shall not do or permit to be done anything which shall
invalidate the insurance policies carried by Lessor.  Lessee shall deliver to Lessor copies of liability insurance
policies required under paragraph 8.1 or certificates evidencing the existence
and amounts of such insurance within seven (7) days after the commencement date
of this Lease.  No such policy shall be
cancelable or subject to reduction of coverage or other modification except
after thirty (30) days prior written notice to Lessor, Lessee shall, at least
thirty (30) days prior to the expiration of such policies, furnish Lessor with
renewals or “binders” thereof.

 

8.6     Waiver of Subrogation. 
Lessee and Lessor each hereby release and relieve the other, and waive
their entire right of recovery against the other for loss or damage arising out
of or incident to the perils insured against which perils occur in, on or about
the Premises, whether due to the negligence of Lessor or Lessee or their
agents, employees, contractors and/or invitees.  Lessee and Lessor shall, upon obtaining the policies of insurance
required give notice to the insurance carrier or carriers that the foregoing
mutual waiver of subrogation is contained in this Lease.

 

8.7     Indemnity.  Lessee
shall indemnify and hold harmless Lessor from and against any and all claims
arising from Lessee’s use of the Industrial Center, or from the conduct of
Lessee’s  business or from any activity,
work or things done, permitted or suffered by Lessee in or about the Premises
or elsewhere and shall further indemnify and hold harmless Lessor from and
against any and all claims arising from any breach or default in the
performance of any obligation on Lessee’s part to be performed under the terms
of this Lease, or arising from any act or omission of Lessee, or any of
Lessee’s agents, contractors, or employees, and from and against all costs,
attorney’s fees, expenses and liabilities incurred in the defense of any such
claim or any action or proceeding brought thereon; and in case any action or proceeding
be brought against Lessor by reason of any such claim.  Lessee upon notice from Lessor shall defend
the same at Leasee’s expense by counsel reasonably satisfactory to Lessor and
Lessor shall cooperate with Lessee in such defense.  Lessee, as a material part of the consideration to Lessor, hereby
assumes all risk of damage to property of Lessee or injury to persons, in, upon
or about the Industrial Center arising from any cause and Lessee hereby waives
all claims in respect thereof against Lessor. See Addendum.

 

8.8     Exemption of Lessor from Liability.  Lessee hereby agrees that Lessor shall not be liable for injury
to Lessee’s business or any loss of income therefrom or for damage to the
goods, wares, merchandise or other property of Lessee, Lessee’s employees,
invitees, customers, or any other person in or about the Premises or the
Industrial Center, nor shall Lessor be liable for injury to the person of
Lessee, Lessee’s employees, agents or contractors, whether such damage or
injury is caused by or results from fire, steam, electricity, gas water or
rain, or from the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures,
or from any other cause, whether said damage or injury results from conditions
arising upon the Premises or upon other portions of the Industrial Center, or
from other sources or places and regardless of whether the cause of such damage
or injury or the means of repairing the same is inaccessible to Lessee.  Lessor shall not be liable for any damages
arising from any act or neglect of any other lessee, occupant or user of the
Industrial Center, nor from the failure of Lessor to enforce the provisions of
any other lease of the Industrial Center.

 

9.      Damage
or Destruction.

 

9.1     Definitions.

 

(a)       “Premises
Partial Damage” shall mean if the Premises are damaged or destroyed to the
extent that the cost of repair is less than fifty percent of the then
replacement cost of the Premises.

(b)       “Premises
Total Destruction” shall mean if the Premises are damaged or destroyed to the
extent that the cost of repair is fifty percent or more of the then replacement
cost of the Premises.

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

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

(e)       “Industrial
Center Buildings” shall mean all of the buildings on the Industrial Center
site.

(f)        “Industrial
Center Buildings Total Destruction” shall mean if the Industrial Center
Building are damaged or destroyed to the extent that the cost of repair is
fifty percent or more of the then replacement cost of the Industrial Center
Buildings.

 

3

 

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

(h)       “Replacement
Cost” shall mean the amount of money necessary to be spent in order to repair
or rebuild the damaged area to the condition that existed immediately prior to
the damage occurring excluding all improvements made by lessees.

 

9.2     Premises Partial Damage; Premises Building Partial Damage.

 

(a)       Insured
Loss:  Subject to the provisions of
paragraphs 9.4 and 9.5, if at any time during the term of this Lease there is
damage which is an insured Loss and which falls into the classification of
either Premises Partial Damage or Premises Building Partial Damage, then Lessor
shall, at Lessor’s expense, repair such damage to the Premises, but not
Lessee’s fixtures, equipment or tenant improvements, as soon as reasonably
possible and this Lease shall continue in full force and effect.

 

(b)       Uninsured
Loss:  Subject to the provisions of
paragraphs 9.4 and 9.5, if at any time during the term of this Lease there is
damage which is not an insured Loss and which falls within the classification
of Premises Partial Damage or Premises Building Partial Damage, unless caused
by a negligent or willful act of Lessee (in which event Lessee shall make the
repairs at Lessee’s expense), which damage prevents Lessee from using the
Premises, Lessor may at Lessor’s option either (i) repair such damage as soon
as reasonably possible at Lessor’s expense, in which event this Lease shall
continue in full force and effect, or (ii) give written notice to Lessee within
thirty (30) days after the date of the occurrence of such damage of Lessor’s
intention to cancel and terminate this Lease as of the date of the occurrence
of such damage, in the event Lessor elects to give such notice of Lessor’s
intention to cancel and terminate this Lease, Lessee shall have the right
within ten (10) days after the receipt of such notice to give written notice to
Lessor of Lessee’s  intention to repair
such damage at Lessee’s expense, without reimbursement from Lessor, in which
event this Lease shall continue in full force and effect, and Lessee shall proceed
to make such repairs as soon as reasonably possible.  If Lessee does not give such notice within such 10-day period
this Lease shall be cancelled and terminated as of the date of the occurrence
of such damage.

 

9.3     Premises Total Destruction; Premises Building Total Destruction;
Industrial Center Buildings Total Destruction.

 

(a)       Subject
to the provisions of paragraphs 9.4 and 9.5, if at any time during the term of
this Lease there is damage, whether or not it is an Insured Loss, and which
falls into the classifications of either (i) Premises Total Destruction, or
(ii) Premises Building Total Destruction, or (iii) Industrial Center Buildings
Total Destruction, then Lessor may at Lessor’s option either (i) repair such
damage or destruction, but not Lessee’s fixtures, equipment or tenant
improvements, as soon as reasonably possible at Lessor’s expense, and this
Lease shall continue in full force and effect, or (ii) give written notice to
Lessee within thirty (30) days after the date of occurrence of such damage of
Lessor’s intention to cancel and terminate this Lease, in which case this Lease
shall be cancelled and terminated as of the date of the occurrence of such
damage.

 

9.4     Damage Near End of Term.

 

(a)       Subject
to paragraph 9.4(b), if at any time during the last six months of the term of
this Lease there is substantial damage, whether or not an Insured Loss, which
falls within the classification of Premises Partial Damage, Lessor may at
Lessor’s option cancel and terminate this Lease as of the date of occurrence of
such damage by giving written notice to Lessee of Lessor’s election to do so
within 30 days after the date of occurrence of such damage.

 

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

 

9.5     Abatement of Rent; Lessee’s Remedies.

 

(a)       In
the event Lessor repairs or restores the Premises pursuant to the provisions of
this paragraph 9, the rent payable hereunder for the period during which such
damage, repair or restoration continues shall be abated in proportion to the
degree to which Lessee’s use of the Premises is impaired.  Except for abatement of rent, if any, Lessee
shall have no claim against Lessor for any damage suffered by reason of any
such damage, destruction, repair or restoration.

 

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

 

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

 

9.7     Waiver.  Lessor and
Lessee waive the provisions of any statute which relate to termination of
leases when leased property is destroyed and agree that such event shall be
governed by the terms of this Lease.

 

10.    Real Property Taxes.

 

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

 

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

 

10.3   Definition of “Real Property Tax.”  As used herein, the term “real property tax” shall include any
form of real estate tax or assessment, general, special, ordinary or
extraordinary, and any license fee, commercial rental tax, improvement bond or
bonds, levy or tax (other than inheritance, personal income or estate taxes)
imposed on the Industrial Center or any portion thereof by any authority having
the direct or indirect power to tax, including any city, county, state or
federal government, or any school, agricultural, sanitary, fire, street,
drainage or other improvement district thereof, as against any legal or
equitable interest of Lessor in the Industrial Center or in any portion
thereof, as against Lessor’s right to rent or other income therefrom, and as
against Lessor’s business of leasing the Industrial Center.  The term “real property tax” shall also
include any tax, fee, levy, assessment or charge (i) in substitution of,
partially or totally, any tax, fee, levy, assessment or charge hereinabove
included within the definition of “real property tax.” or (ii) the nature of
which was hereinbefore included within the definition of “real property tax.”
or (iii) which is imposed for a service or right not charged prior to June 1,
1978, or, if previously charged, has been increased since June 1, 1978, or (iv)
which is imposed as a result of a transfer, either partial or total, of
Lessor’s interest in the Industrial Center or which is added to a tax or charge
hereinbefore included within the definition of real property tax by reason of
such transfer, or (v) which is imposed by reason of this transaction, any
modifications or changes hereto, or any transfers hereof.

 

10.4   Joint Assessment.  If
the Industrial Center is not separately assessed, Lessee’s Share of the real
property tax 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 determined by Lessor from the respective
valuations assigned in the assessor’s work sheets or such other information as
may be reasonably available.  Lessor’s
reasonable determination thereof, in good faith, shall be conclusive.

 

10.5   Personal Property Taxes.

 

(a)       Lessee
shall pay prior to delinquency all taxes assessed against and levied upon trade
fixtures, furnishings, equipment and all other personal property of Lessee
contained in the Premises or elsewhere. 
When possible, Lessee shall cause said trade fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of Lessor.

 

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

 

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

 

12.    Assignment and Subletting.

 

12.1   Lessor’s Consent Required. 
Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage, sublet, or otherwise transfer or encumber all or any part of Lessee’s
interest in the Lease or in the Premises, without Lessor’s prior written
consent, which Lessor shall not unreasonably withhold Lessor shall respond to
Lessee’s request for consent hereunder in a timely manner and any attempted
assignment, transfer, mortgage, encumbrance or subletting without such consent
shall be void, and shall constitute a breach of this Lease without the need for
notice to Lessee under paragraph 13.1. 
See Addendum for additional terms.

 

4

 

12.3     Terms and Conditions of Assignment.  Regardless of Lessor’s consent, no assignment shall release
Lessee of Lessee’s obligations hereunder or alter the primary liability of
Lessee to pay the Base Rent and Lessee’s Share of Operating Expenses, and to
perform all other obligations to be performed by Lessee hereunder.  Lessor may accept rent from any person other
than Lessee pending approval of disapproval of such assignment.  Neither a delay in the approval or
disapproval of such assignment nor the acceptance of rent shall constitute a
waiver or estoppel of Lessor’s right to exercise its remedies for the breach of
any of the terms or  conditions of this
paragraph 12 or this Lease.  Consent to
one assignment shall not be a deemed consent to any of the terms hereof, Lessor
may proceed directly against Lessee without the necessity of exhausting
remedies against said assignee.  Lessor
may consent to subsequent assignments of this Lease or amendments or
modifications to this Lease with assignees of Lessee, without notifying Lessee,
or any successor of Lessee, and without obtaining its or their consent thereto
and such action shall not relieve Lessee of liability under this Lease.

 

12.4     Terms and Conditions Applicable to Subletting.  Regardless of Lessor’s consent, the
following terms and conditions shall apply to any subletting by Lessee
subletting by Lessee of all or any part of the Premises and shall be included
in subleases:

 

(a)       Lessee
hereby assigns and transfers to Lessor all of Lessee’s interest in all rentals
and income arising from any sublease heretofore or hereafter made by Lessee,
and Lessor may collect such rent and income and apply same toward Lessee’s
obligations under this Lease; provided, however, that until a default shall
occur in the performance of Lessee’s obligations under this Lease.  Lessee may receive, collect and enjoy the
rents accruing under such sublease. 
Lessor shall not, by reason of this or any other assignment of such
sublease to Lessor nor by reason of the collection of the rents from a
sublessee, be deemed liable to the sublessee for any failure of Lessee to
perform and comply with any of Lessee’s obligations to such sublessee under
such sublease.  Lessee hereby
irrevocably authorizes and directs any such sublessee, upon receipt of a
written notice from Lessor stating that a default exists in the performance of
Lessee’s obligations under this Lease, to pay to Lessor the rents due and to
become due under the sublease.  Lessee
agrees that such sublessee shall have the right to rely upon any such statement
and request from Lessor, and that such sublessee shall pay such rents to Lessor
without any obligation or right to inquire as to whether such default exists
and notwithstanding any notice from or claim from Lessee to the contrary.  Lessee shall have no right or claim against
such sublessee or Lessor for any such rents so paid by said sublessee to
Lessor.

 

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

 

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

 

(d)       The
consent by Lessor to any subletting shall not release Lessee from its
obligations or alter the primary liability of Lessee to pay the rent and
perform and comply with all of the obligations of Lessee to be performed under
this Lease.

 

(e)       The
consent by Lessor to any subletting shall not constitute a consent to any
subsequent subletting by Lessee or to any assignment or subletting by the
sublessee.  However, Lessor may consent
to subsequent sublettings and assignments of the sublease or any amendments or
modifications thereto without notifying Lessee or anyone else liable on the
Lease or sublease and without obtaining their consent and such action shall not
relieve such persons from liability.

 

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

 

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

 

(h)       Each
and every consent required of Lessee under a sublease shall also require the
consent of Lessor.

 

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

 

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

 

(k)       With
respect to any subletting to which Lessor has consented, Lessor agrees to
deliver a copy of any notice of default by Lessee to the sublessee.  Such sublessee shall have the right to cure
a default of Lessee within ten (10) days after service of said notice of
default upon such sublessee, and the sublessee shall have a right of
reimbursement and offset from and against Lessee for any such defaults cured by
the sublessee.

 

12.5   Attorney’s Fees.  In
the event Lessee shall assign or sublet the Premises or request the consent of
Lessor to any assignment or subletting or if Lessee shall request the consent
of Lessor for any act Lessee proposes to do then Lessee shall pay Lessor’s
reasonable attorneys fees incurred in connection therewith, such attorneys fees
not to exceed $350.00 for each such request.

 

13.    Default;
Remedies.

 

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

(a)       The
vacating or abandonment of the Premises by Lessee.

 

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

 

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

 

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

 

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

 

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

 

(a) 
Terminate Lessee’s right to possession of the Premises by any lawful
means, in which case this Lease and the term hereof shall terminate and Lessee
shall immediately surrender possession of the Premises to Lessor.  In such event Lessor shall be entitled to
recover from Lessee all damages incurred by Lessor by reason of Lessee’s
default including, but not limited to, the cost of recovering possession of the
Premises; expenses of reletting, including necessary renovation and alteration
of Premises, reasonable attorney’s fees, and any real estate commission
actually paid; the worth at the time of award by the court having jurisdiction
thereof of the amount by which the unpaid rent for the balance of the term after
the time of such award exceeds the amount of such rental loss for the same
period that Lessee proves could be reasonably avoided; that portion of the
leasing commission paid by Lessor pursuant to paragraph 15 applicable to the
unexpired term of this Lease.

 

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

 

(c) 
Pursue any other remedy now or hereafter available to Lessor under the
laws or judicial decisions of the state wherein the Premises are located.  Unpaid installments or rent and other unpaid
monetary obligations of Lessee under the terms of this Lease shall bear
interest from the date due at the maximum rate then allowable by law.  Lessor’s remedies shall include the relief
set forth in Section 1951.2 of the California Civil Code.

 

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

 

5

 

13.4   Late Charges.  Lessee
hereby acknowledges that late payment by Lessee to Lessor of Base Rent,
Lessee’s Share of Operating Expenses or other sums due hereunder will cause
Lessor to incur costs not contemplated by this Lease, the exact amount of which
will be extremely difficult to ascertain. 
Such costs include, but are not limited to, processing and accounting
charges and late charges which may be imposed on Lessor by the terms of any
mortgage or trust deed covering the Property. 
Accordingly, if any installment of Base Rent, Operating Expenses, or any
other sum due from Lessee shall not be received by Lessor or Lessor’s designee
within ten (10) days after such amount shall be due, then without any requirement
for notice to Lessee, Lessee shall pay to Lessor a late charge equal to 6% of
such overdue amount.  The parties hereby
agree that such late charge represents a fair and reasonable estimate of the
costs Lessor will incur by reason of late payment by Lessee.  Acceptance of such late charge by Lessor
shall in no event constitute a waiver of Lessee’s default with respect to such
overdue amount, nor prevent Lessor from exercising any of the other rights and
remedies granted hereunder.  In the
event that a late charge is payable hereunder whether or not collected for
three (3) consecutive installments of any of the aforesaid monetary obligations
of Lessee, then Base Rent shall automatically become due and payable quarterly
in advance rather than monthly notwithstanding paragraph 4.1 or any other
provision of this Lease to the contrary.

 

14.    Condemnation.  If
the Premises or any portion thereof or the Industrial Center are taken under
the power of eminent domain, or sold under the threat of the exercise of said power
(all of which are herein called “condemnation”), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs.  If
more than ten percent of the floor area of
the Premises, or more than twenty-five percent of that portion of the
Common Areas designated as parking for the Industrial Center is taken by
condemnation, Lessee may, at Lessee’s option to be exercised in writing only
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 rent shall be
reduced in the proportion that the floor area of the Premises taken bears to
the total floor area of the Premises. 
No reduction of rent shall occur if the only area taken is that which
does not have the Premises located thereon. 
Any award for the taking of all or any part of the Premises under the
power of eminent domain or any payment made under threat of the exercise of
such power shall be the property of Lessor, whether such award shall be made as
compensation for diminution in value of the leasehold or for the taking of the
fee, or as severance damages; provided, however, that lessee shall be entitled
to any award for loss of or damage to Lessee’s trade fixtures and removable
personal property.  In the event that
this Lease is not terminated by reason of such condemnation.  Lessor shall to the extent of severance
damages received by Lessor in connection with such condemnation, repair any
damage to the Premises caused by such condemnation except to the extent that
Lessee has been reimbursed there for by the condemning authority.  Lessee shall pay any amount in excess of
such severance damages to complain such repair.

 

15.    Broker’s
Fee.

 

(a)      Upon execution of this
Lease by both parties, Lessor shall pay to Licensed real estate broker(s), a
fee as set forth in a separate agreement between Lessor and said broker(s), or
in the event there is no separate agreement between Lessor and said broker(s),
the sum of $               for brokerage
services rendered by said broker(s) to Lessor in this transaction.

 

(b)     Lessor agrees to pay said
fee not only on behalf of any person corporation, association or other entity
having an ownership interest in said real property or any part thereof, when
such fee is due hereunder.  Any
transferee of Lessor’s interests in this Lease, whether such transfer is by agreement
or by operation of law, shall be deemed to have assumed Lessor’s obligation
under this paragraph 15.  Said broker
shall be a third party beneficiary of the provisions of this paragraph 15.

 

16.    Estoppel
Certificate.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

21.    Additional Rent.  All monetary obligations of Lessee to
Lessor under the forms of this Lease, including but not limited to Lessee’s
Share of Operating Expenses and insurance and tax expenses payable shall be
deemed to be rent.

 

22.    Incorporation of Prior Agreement;
Amendments.        This
Lease contains all agreements of the parties with respect to any matter mentioned
herein.  No prior or contemporaneous
agreement or understanding pertaining to any such matter shall be
effective.  This lease may be modified
in writing only, signed by the parties in interest at the time of the
modification.  Except as otherwise stated
in this Lease, Lessee hereby acknowledges that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction
nor the Lessor or any employee or agents of any of said persons has made any
oral or written warranties or representations to Lessee relative to the
condition or use by Lessee of the Premises or the Property and Lessee
acknowledges that Lessee assumes all responsibility regarding the Occupational
Safety Health Act, the legal use and adaptability of the Premises and the
compliance thereof with all applicable laws and regulations in effect during
the term of this Lease except as otherwise specifically stated in this Lease.

 

23.    Notices.  Any notice required
or permitted to be given hereunder shall be in writing and may be given by
personal delivery or by certified mail and if given personally or by mail,
shall be deemed sufficiently given if addressed to Lessee or to Lessor at the
address noted below the signature of the respective parties as the case may
be.  Either party may by notice to the
other specify a different address for notice purposes except that upon Lessee’s
taking possession of the Premises, the Premises shall constitute Lessee’s
address for notice purposes.  A copy of
all notices required or permitted to be given to Lessor hereunder shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by notice to Lessee.

 

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

 

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

 

26.    Holding Over.  If Lessee, with Lessor’s consent,
remains in possession of the Premises or any part thereof after the expiration
of the term hereof, such occupancy shall be a tenancy from month to month upon
all the provisions of this Lease pertaining to the obligations of Lessee, but
all Options, if any, granted under the terms of this Lease shall be deemed
terminated and be of no further affect during said month to month tenancy.

 

6

 

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

 

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

 

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

 

30.    Subordination.

 

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

 

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

 

31.    Attorney’s
Fees.  If either party or the
broker(s) named herein bring an action to enforce the terms hereof or declare rights
hereunder, the prevailing party in any such action, on trial or appeal, shall
be entitled to his reasonable attorney’s fees to be paid by the losing party as
fixed by the court.  The provisions of
this paragraph shall inure to the benefit of the broker named herein who seeks
to enforce a right hereunder.

 

32.    Lessor’s Access.  Lessor and Lessor’s agents shall have the
right to enter the Premises at reasonable times for the purpose of inspecting
the same, showing the same to prospective purchasers, lender, or lessees, and
making such alterations, repairs, improvements or additions to the Premises or
to the building of which they are part as Lessor may deem necessary or
desirable.  Lessor may at any time place
on or about the Premises or the Building any ordinary “For Sale” signs and
Lessor may at any time during the last 120 days of the term hereof place on or
about the Premises any ordinary “For Lease” signs.  All activities of Lessor pursuant to this paragraph shall be
without abatement of rent, nor shall Lessor have any liability to Lessee for
the same.

 

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

 

34.    Signs.  Lessee shall not place any sign upon the
Premises or the Industrial Center without Lessor’s prior written consent.  Under no circumstances shall Lessee place a
sign on any roof of the Industrial Center.

 

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

 

36.    Consents.  Except for paragraph 33 hereof, wherever in
this Lease the consent of one party is required to an act of the other party
such consent shall not be unreasonably withheld or delayed.

 

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

 

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

 

39.    Options.

 

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

 

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

 

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

 

39.4   Effect of Default on Options.

 

(a)       Lessee
shall have no right to exercise an Option, notwithstanding any provision in the
grant of Option to the contrary.  (i)
during the time commencing from the date Lessor gives to Lessee a notice of
default pursuant to paragraph 13.1(b) or 13.1(c) and continuing until the
noncompliance alleged in said notice of default is cured, or (ii) during the
period of time commencing on the date after a monetary obligation to Lessor is
due from Lessee and unpaid (without any necessity for notice thereof to Lessee)
and continuing until the obligation is paid, or (iii) at any time after an
event of default described in paragraphs 13.1(a), 13.1(d), or 13.1(e) (without
any necessity of Lessor to give notice of such default to Lessee), nor (iv) in
the event the Lessor has given to Lessee three or more notices of default under
paragraph 13.1(b), or paragraph 13.1(c), whether or not the defaults are cured,
during the 12 month period of time immediately prior to the time that lessee
attempts to exercise the subject Option.

 

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

 

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

 

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

 

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

 

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

 

7

 

43.    Authority.  If Lessee is a corporation, trust, or
general or limited partnership, 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 behalf of said entity.  If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after execution of this
Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.

 

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

 

45.    Offer.  Preparation of this Lease by Lessor or
Lessor’s agent and submission of same to Lessee shall not be deemed an offer to
lease.  This Lease shall become binding
upon Lessor and Lessee only when fully executed by Lessor and Lessee.

 

46.    Addendum. 
Attached hereto is an addendum or addenda
containing paragraphs A through H which constitute a part of this Lease.

 

47.    Modification For Lender.  If in connection with obtaining financing
for the building, the Lender shall request reasonable modifications in this
Lease as a condition to such financing, Lessee will not unreasonably withhold,
delay, or defer its consent thereto, provided that such modifications do not
increase the obligations of Lessee hereunder or materially adverse affect the
leasehold interest hereby created.

 

48.

 

49.    Mortgage Protection.  Lessee agrees to give any mortgages and/or
trust deed holders, as to all or a portion of the Premises, by registered mail,
a copy of any notice of default served upon Lessor, provided that prior to such
notice Lessee has been notified in writing (by way of notice or assignment of
rents and leases, or otherwise) of the addresses of such mortgages and/or trust
deed holders.  Lessee agrees not to
exercise any remedies available by virtue of a default unless Lessor shall have
failed to cure such default within thirty (30) days after receipt of notice of
default or such additional time as may be reasonably necessary to cure the
default in the case of a default incapable of being cured within thirty (30)
days.  Lessee further agrees that the
mortgages and/or trust deed holder shall have an additional thirty (30) days
within which to cure such default, or if such default cannot be cured within
that time, then such additional time as may be necessary if within such thirty
(30) days any mortgagee and/or trust deed holder has commenced and is
diligently pursuing the remedies necessary to cure such default (including but
not limited to commencement of foreclosure proceedings if necessary to effect
such core), in which event such right, if any, as Lessee might otherwise have
to terminate the Lease shall not be exercised while such remedies are being so
diligently pursued.

 

8.1    Liability Insurance-Lessee.  Lessee shall, at Lessee’s expense, obtain
and keep in force during the term of this Lease a policy of Comprehensive
General Liability insurance utilizing an Insurance Services Office standard
form with Broad Form General Liability Endorsement (GL0404), or equivalent, in
an amount of not less than 1) $1,000,000 per occurrence of Bodily Injury and
Property Damage combined single limit with a $1,000,000 excess liability
policy, or 2)  $1,000,000 per occurrence
of Bodily Injury and Property Damage with a $2,000,000 General Aggregate Bodily
Injury and Property Damage, and shall insure Lessee with Lessor as an
additional insured against liability arising out of the use, occupancy or
maintenance of the Premises.  The policy
shall insure performance by Lessee of the indemnity provisions of this
paragraph 8.  The limits of said
insurance shall not, however, limit the liability of Lessee hereunder.

 

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

 

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

 

	
  LESSOR

  	
   

  	
  LESSEE

  
	
   

  	
   

  	
   

  
	
  William D.
  & Edna J. Wright dba

  South Coast Business Park

  	
   

  	
  q.a.d., Inc., a California Corporation

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/ William
  D. Wright

  	
   

  	
  By 

  	
  /s/ Pam
  Lopker

  
	
   

  	
   

  	
   

  	
   

  	
  Pam Lopker,
  its President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By 

  	
  /s/ Karl
  Lopker

  
	
   

  	
   

  	
   

  	
   

  	
  Karl Lopker,
  its Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
  Executed on 

  	
  Jan 20-94

  	
   

  	
  Executed on 

  	
  1/13/94

  
	
  (Corporate Seal)

  	
   

  	
   (Corporate Seal)

  
	
   

  	
   

  	
   

  
	
  ADDRESS FOR NOTICES AND RENT

  	
   

  	
  ADDRESS

  
	
   

  	
   

  	
   

  
	
  130 Garden Street

  	
   

  	
   

  
	
  Santa Barbara, California 90101

  	
   

  	
   

  
	
   

  	
   

  	
   

  
							

 

EXHIBIT A

 

[GRAPHIC OF SOUTH COAST
BUSINESS PARK]

 

 

ADDENDUM TO LEASE

 

This ADDENDUM
is attached to and forms a part of that certain Standard Industrial Lease dated
for reference purposes November 30, 1993, by and between William D &
Edna J. Wright dba South Coast Business Park (“Lessor”), and q.a.d., Inc., a
California Corporation (“Lessee”).  The
said Standard Industrial Lease is hereby modified/supplemented (and as
modified/supplemented is hereinafter referred to as “this Lease”) in the
following particulars only:

 

A.         Option to Extend Term of Lease.  Lease is hereby granted the option to extend
the term of this Lease for two (2) additional successive period of three (3)
years each.  The options shall be
exercised by the delivery of written notice to Lessor no earlier than two
hundred seventy (270) days and no later than one hundred eighty (180) days
prior to the expiration of the lease term then in effect.  Any extensions granted hereunder shall be on
the same terms and conditions applicable to the initial term except as to rent,
which shall be increased in accordance with Paragraph B(2) below.  Lessee’s right to exercise the options
granted herein is subject to the terms and conditions set forth in Paragraph 39
of this Lease.

 

B.          Adjustments to Base Rent.

(1)     Cost of Living Adjustments
to Base Rent.  The Base Rent payable
pursuant to Paragraph 4.1 shall be subject to further adjustment as of lease
anniversary date, and as of the same date each year thereafter during the
initial lease term and any extension period. 
Said date is hereinafter referred to as the “Adjustment Date.”  The adjustment shall be made as follows:

 

The Base Rent for the Premises shall be adjusted by the same percentage
as the change, if any, in the Consumer Price Index (All Items for all Urban
Consumers 1982-84=100 Base), of the United States Department of Labor, Bureau
of Labor Statistics for Los Angeles-Anaheim-Riverside, CA (the “Index”).  The adjustment shall be calculated according
to the following formula:

 

X = A x B/C

 

X = Adjusted rent

 

A = Base Rent as of the first month of the term then in effect.

 

B = The monthly index for the third month immediately preceding the
Adjustment Date.

 

C = The monthly index for the third month immediately preceding the
first month of the term then in effect.

 

The monthly rent as so adjusted
shall be payable for each month commencing with the Adjustment Date and
continuing until the next Adjustment Date.

 

1

 

If the Index is discontinued or revised during the term of this Lease,
such other government Index or computation with which it is replaced shall be
used in order in obtain substantially the same result as would be obtained if
the Index had not been discountined or revised.

 

(2)  Determination of Base Rent During Extension
Periods.  In the event Lessee exercises
the option to extend granted in Paragraph (a) above, the Base Rent payable at
the commencement of the applicable Extension Period shall be the then
prevailing market rate for a triple net lease of comparable lease Premises in
the surrounding geographical area. 
Prevailing market rate shall be determined by mutual agreement of Lessor
and Lessee on the basis of the value which will be obtained in an arms-length
transaction between an informed and willing tenant (other than a tenant
currently in possession of the demised Premises) and an informed and willing
landlord (other than the then existing landlord of demised Premises) under no
compulsion to lease.  If Lessor and
Lessee have not agreed upon the prevailing market rental rate by the date which
is thirty (30) days prior to the expiration of the lease term then in effect,
then the option to extend will automatically cease and be deemed
extinguished.  The base monthly rent as
determined pursuant to this Paragraph B(2) shall thereafter be subject to
further cost of living adjustments pursuant to the terms of Paragraph B(1)
above.

 

C.  Construction of Tenant Improvements.  Lessee understands and agrees
that Lessor is currently in the process of constructing the improvements which
shall comprise the Premises.  In the
course of such construction, Lessor hereby agrees to construct the tenant
improvements set forth in the plans and specifications attached hereto as
Exhibit “B”.  Such plans and
specifications are hereby clarified as follows:  SEE EXHIBIT “B”.  Lessee
has reviewed and approved all such plans and specifications.  Any changes or additions made by Lessee to
such plans and specifications shall be at Lessee’s sole cost and expense,
including a ten percent (10%) administrative payment to Lessor.  Such additional payments shall be paid by
Lessee to Lessor as follows:  (i) fifty
percent (50%) upon approval of such change by Lessor; and (ii) fifty percent
(50%) prior to occupancy of the Premises by Lessee.  All tenant improvements shall be deemed substantially completed
when the City of Carpinteria issues a Certificate of Occupancy for the Premises.  Notwithstanding the issuance of such Certificate,
Lessee shall be provided with a punch list of such tenant improvements prior to
the commencement of the lease term, and shall inspect the Premises after their
substantial completion.  Lessee shall
set forth any manner in which Lessee claims that the Premises to do not conform
to the plans and specifications attached hereto as Exhibit “B”, as reasonably
measured by the standards of finished, comparably priced industrial space in
the Santa Barbara area (hereinafter the “discrepancy”).  Lessor shall cure such discrepancies to the
extent Lessor deems such discrepancies to be reasonably claimed, within thirty
(30) days following commencement of the lease term.  Provided however, if any such discrepancy is incapable of cure
within such thirty (30)-day period, and Lessor has commenced the cure of such
discrepancy within such thirty (30)-day period, this provision shall be
satisfied.

 

2

D.         Use.  Paragraph 6 of this Lease is hereby
supplemented as follows:

(1)     Prohibited Uses.  Lessee shall not do or permit anything to be
done in or about the Premises not bring or keep anything therein which will in
any way increase the existing rate of or affect any fire or other insurance
upon the Premises or any of its contents, or cause a cancellation of any
insurance policy covering the Premises or any part thereof or any of its
contents.  Lessee shall not commit or
suffer to be committed any nuisance or waste in or upon the Premises.  Lessee shall not use the Premises or permit
anything to be done in or about the Premises which will in any way conflict
with any law, statute, ordinance or governmental rule or regulation now in
force or which may hereafter be enacted or promulgated.  Lessee shall not keep any animals or pets on
the Premises.  Lessee shall not use or
store “hazardous materials or wastes” on the Premises, as such terms are
defined by applicable federal and state law, without Lessor’s prior written
consent.  If such consent is given,
Lessee shall comply with governmental laws, rules and regulations pertaining to
hazardous materials and wastes.  Lessor
shall have a right of re-entry upon the Premises on reasonable notice and at
reasonable times for purposes of inspection, contamination testing and
remediation.

 

(2)     Installation of
Specialized Equipment and Use of Lessee’s Possessions on the Premises.  Lessee shall not install on the Premises any
specialized equipment requiring the use of a power source (including, but not
limited to, computer hardware or software) without the prior written consent of
Lessor.  Lessor shall give its consent
to such installation provided the conditions contained herein are
satisfied.  Lessor shall not be liable
to Lessee for damage to Lessee or Lessee’s possessions, including but not limited
to furniture, fixtures, equipment (specialized or otherwise), and inventory,
from any cause.  Lessee waives all
claims against Lessor for damage to Lessee’s possessions arising for any
reason.  Lessee shall comply with all
laws, regulations and ordinances relating to the condition and use of any and
all of Lessee’s possessions on the Premises, including laws requiring the
alteration, maintenance and restoration of the Premises as a result of Lessee’s
particular use.  Provided, however, any
required alterations to the Premises shall be conditioned upon Lessor’s prior
written consent.  The Premises shall not
be electrically overloaded.  No
equipment, machinery, apparatus or other appliance shall be used or operated on
the Premises in such a manner that such equipment will in any way injure,
vibrate or shake the Premises, or place an excessive burden on power sources
installed on the Premises.

 

E.          Assignment
and Subletting.  Lessee
hereby understands and agrees that Lessor may withhold its consent to any
requested assignment or subletting, and such withholding of consent shall be
deemed reasonable, in the event that the proposed assignee or sublessee intends
to use or store hazardous wastes or materials on the Premises.  The term of the sublease shall not exceed
the term of the master lease.

 

F.          Indemnity.  The indemnification of Lessor by Lessee
pursuant to Paragraph 8.7 of this Lease shall also include and extend to any
violation by Lessee of applicable state, federal and local laws pertaining to
the use, storage and discharge of hazardous materials and wastes.

 

G.         Default.  Paragraph 13.1 of this Lease is supplemented
to provide that the release or discharge by Lessee of any hazardous material or
wastes in or about the Premises, or violation of any law or deviation from
prescribed

 

3

 

procedures to the use or storage of hazardous materials or wastes,
shall constitute a material default of this Lease by Lessee.  Whereever used in this Lease, the terms
hazardous wastes and/or hazardous materials shall include all definitions of
hazardous wastes and materials provided by both federal and California law.

 

4

 

IN WITNESS
WHEREOF, Lessor and Lessee have each caused this Addendum to be executed
concurrently with the Lease of which this Addendum forms a part.

 

LESSOR:

 

WILLIAM D & EDNA J. WRIGHT
dba

SOUTH COAST BUSINESS PARK

 

	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ William
  D Wright

  	
   

  	
  Dated:

  	
  Jan 20-94

  
	
   

  	
   

  	
   

  
	
  LESSEE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  q.a.d.,
  Inc., a California Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Pam
  Lopker

  	
   

  	
  Dated:

  	
  1/13/94

  
	
  Pam Lopker, its President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Karl
  Lopker

  	
   

  	
  Dated:

  	
  1/13/94

  
	
  Karl Lopker, its Vice President

  	
   

  	
   

  

 

5

 

Addendum to Lease

Number Two

 

Building “C”

 

Lessor shall spend up to $25.00
per square foot of leased space being remodeled (suites 6,7 & 8).

 

Lessee shall pay in cash for
any tenant improvements requested by Lessee in excess of $25.00 per square
foot.

 

LESSOR:

 

William D Wright dba

South Coast Business Park

 

	
  By:

  	
  /s/ William
  D Wright

  	
   

  	
  Jan 20-94

  
	
   

  	
  Dated

  
	
  LESSEE:

  	
   

  
	
   

  	
   

  
	
  q.a.d.,
  Inc., a California Corporation

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Pam
  Lopker

  	
   

  	
  1/13/94

  
	
   

  	
  Pam Lopker,
  its President

  	
  Dated

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Karl
  Lopker

  	
   

  	
  1/3/94

  
	
   

  	
  Karl Lopker,
  its Vice President

  	
  Dated

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}]]