Document:

Exhibit 10.21(b)

 

Typed by:   Proofed by: PLEASE SIGN AND RETURN BOTH COPIES. A FULLY EXECUTED COPY WILL BE   RETURNED TO YOU. LEASE EXTENSION Date: January 15, 2016 RE:  3870 Del Amo Blvd., #506, Torrance, CA   90503 The undersigned hereby agree to extend that certain lease dated JULY   20, 2009 between 3830 DEL AMO BLVD, LLC and EMMAUS MEDICAL, INC. for One (1)   year commencing FEBRUARY 20, 2016 and ending FEBRUARY 19, 2017 at a monthly   rent of $1,960.00 payable in advance on the first day of each month. ALL OTHER   TERMS AND CONDITIONS OF SAID LEASE WILL REMAIN IN FULL FORCE AND EFFECT AND   ARE IN NO WAY AFFECTED BY THIS RENEWAL. LESSEE: EMMAUS MEDICAL, INC.   1/26/2016 BY:                                                DATE:_   Willis C. Lee, C.O.O. LESSOR: 3830 DEL AMO BLVD, LLC   BY: DATE:. Steven P. Fechner, Manager of   LLC Please return to: Surf Management, Inc., P.O. Box 3217, Torrance, CA   90510 Phone 310/533-5900Exhibit 10.21(c)

STANDARD   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE—GROSS AMERICAN INDUSTRIAL REAL   ESTATE ASSOCIATION   1. Basic   Provisions (“Basic Provisions”) 1.1 Parties: This Lease (“Lease”), dated for   reference purposes only, July 12, 2004, is made by and between ISADORE   SOCRANSKY (“Lessor”) and US AUTO PARTS (“Lessee”), (collectively the   “Parties,” or Individually a “Party”). 1.2(a) Premises: That certain portion   of the Building, Including all improvements therein or to be provided by   Lessor under the terms of this Lease, Commonly known by the street address of   17100 Margay Avenue, located in the City of Carson, County of Los Angeles,   state of California with zip code , as outlined on Exhibit attached hereto   (“Premises”). The “Building” is that certain building containing the Premises   and generally described as (describe briefly the nature of the Building):   38,048 square feet warehouse and office as part of an approximately 73,062   square foot building. In addition to Lessee’s rights to use and occupy the   Premises as hereinafter specified, Lessee shall have non-exclusive rights to   the Common Areas (as defined in Paragraph 2.7 below) as hereinafter   specified, but shall not have any rights to the roof, exterior walls or   utility raceways of the Building or to any other buildings in the Industrial   Center. The Premises, the Building, the Common Areas, the land upon which   they are located, along with all other buildings and improvements thereon,   are herein collectively referred to as the “Industrial Center.” (Also see   Paragraph 2.) 1.2(b) Parking: Sixty (60) unreserved vehicle parking spaces   (“Unreserved Parking Spaces”); and zero ( 0 ) reserved vehicle parking spaces   (“Reserved Parking Spaces”). (Also see Paragraph 2.6.) 1.3 Term: 2 years and   months (“Original Term”) commencing September 1, 2004 (“Commencement Date”)   and ending August 31, 2006 (“Expiration Date”). (Also see Paragraph 3.) 1.4   Early Possession: July 12, 2004 (“Early Possession Date”). (Also see   Paragraphs 3.2 and 3.3.) 1.5 Base Rent: $18,263.04 per month (“Base Rent”),   payable on the 1st day of each month commencing September 1, 2004 (Also see   Paragraph 4.)  If this box is checked,   this Lease provides for the Base Rent to be adjusted per Addendum 50,   attached hereto. 1.6 (a) Base Rent Paid Upon Execution: $18,263.04 as Base   Rent for the period . 1.6(b) Lessee’s Share of Common Area Operating   Expenses: 52.08% (XXX%) (“Lessee’s Share”) as determined by • prorata square   footage of the Premises as compared to the total square footage of the   Building or  other criteria as described   in Addendum . 1.7 Security Deposit: $18,263.04 (“Security Deposit”). (Also   see Paragraph 5.) 1.8 Permitted Use: Warehouse and distribution of auto parts   (“Permitted Use”) (Also see Paragraph 6.) 1.9 Insuring Party. Lessor is the   “Insuring Party.” (Also see Paragraph 8.) 1.12 Addenda and Exhibits. Attached   hereto to an Addendum or Addenda consisting of Paragraphs through , and   Exhibits through , all of which constitute a part of this Lease. See attached   Addendums, Paragraphs 50, 51, 52 and 53. 2. Premises, Parking and Common   Areas. 2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases   from Lessor, the Premises, for the term, at the rental, and upon all of the   terms, covenants and conditions set forth in this Lease. Unless otherwise provided   herein, any statement of square footage set forth in this Lease, or that may   have been used in calculating rental and/or Common Area Operating Expenses,   is an approximation which Lessor and Lessee agree is reasonable and the   rental and Lessee’s Share (as defined in Paragraph 1.6(b)) based thereon is   not subject to revision whether or not the actual square footage is more or   less. 2.2. Condition. Lessor shall deliver the Premises to Lessee clean and   free of debris on the Commencement Date and warrants to Lessee that the   existing plumbing, electrical systems, fire sprinkler system, lighting, air   conditioning and heating systems and loading doors, if any, in the Premises,   other than those constructed by Lessee, shall be in good operating condition   on the Commencement date. If a non-compliance with said warranty exists as of   the Commencement Date, Lessor shall, except as otherwise provided in this   Lease, promptly after receipt of written notice from Lessee setting forth   with specificity the nature and extent of such non-compliance, rectify same   at Lessor’s expense. If Lessee does not give Lessor written notice of a   non-compliance with this Warranty within thirty (30) days after the   Commencement Date, correction of that non-compliance shall be the obligation   of Lessee at Lessee’s sole cost and expense. 2.3 Compliance with Covenants,   Restrictions and Building Code. Lessor warrants that any improvements (other   than those constructed by Lessee or at Lessee’s direction) on or in the   Premises which have been constructed or installed by Lessor or with Lessor’s   consent or at Lessor’s direction shall comply with all applicable covenants   or restrictions of record and applicable building codes, regulations and   ordinances in effect on the Commencement Date. Lessor further warrants to   Lessee that Lessor has no knowledge of any claim having been made by any   governmental agency that a violation or violations of applicable building   codes, regulations, or ordinances exist with regard to the Premises as of the   Commencement Date. Said warranties shall not apply to any Alterations or   Utility Installations (defined in Paragraph 7.3(a)) made or to be made by   Lessee. If the Premises do not comply with said warranties, Lessor shall,   except as otherwise provided in this Lease, promptly after receipt of written   notice from Lessee given within six (6) months following the Commencement   Date and setting forth with specificity the nature and extent of such   non-compliance take such action, at Lessor’s expense, as may be reasonable or   appropriate to rectify the non-compliance. Lessor makes no warranty that the   Permitted Use in Paragraph 1.8 is permitted for the Premises under Applicable   Laws (as defined in Paragraph 2.4). 2.4 Acceptance of Premises. Lessee hereby   acknowledges: (a) that it has been advised by the Broker(s) to satisfy itself   with respect to the condition of the Premises (including but not limited to   the electrical and fire sprinkler systems, security, environmental aspects,   seismic and earthquake requirements, and compliance with the Americans with   Disabilities Act and applicable zoning, municipal, county, state and federal   laws, ordinances and regulations and any covenants or restrictions of record   (collectively, “Applicable Laws”) and the present and future suitability of   the Premises for Lessee’s intended use; (b) that Lessee has made such   investigation as it deems necessary with reference to such matters, is   satisfied with reference thereto, and assumes all responsibility therefore as   the same relate to Lessee’s occupancy of the Premises and/or the terms of   this Lease; and (c) that neither Lessor, nor any of Lessor’s agents, has made   any oral or written representations or warranties with respect to said   matters other than as set forth in this Lease. 2.5 Lessee as Prior Owner/Occupant.   The warranties made by Lessor in this Paragraph 2 shall be of no force or   effect if immediately prior to the date set forth in Paragraph 1.1 Lessee was   the owner or occupant of the Premises. In such event, Lessee shall, at   Lessee’s sole cost and expense, correct any non-compliance of the Premises   with said warranties.   Initials: ©   American Industrial Real Estate Association 1993 MULTI-TENANT–GROSS  

    

 

2.6 Vehicle   Parking. Lessee shall be entitled to use the number of Unreserved Parking   Spaces and Reserved Parking Spaces specified in Paragraph1.2(b) on those   portions of the Common Areas designated from time to time by Lessor for   parking. Lessee shall not use more parking spaces than said number. Said   parking spaces shall be used for parking by vehicles no larger than full-size   passenger automobiles or pick-up trucks, herein called “Permitted Size   Vehicles.” Vehicles other than Permitted Size Vehicles shall be parked and   loaded or unloaded as directed by Lessor in the Rules and Regulations (as   defined in Paragraph 40) issued by Lessor. (Also see Paragraph 2.9.) (a)   Lessee shall not permit or allow any vehicles that belong to or are   controlled by Lessee or Lessee’s employees, suppliers, shippers, customers,   contractors or invitees to be loaded, unloaded, or parked in areas other than   those designated by Lessor for such activities. (b) If Lessee permits or   allows any of the prohibited activities described in this Paragraph 2.6, then   Lessor shall have the right, without notice, in addition to such other rights   and remedies that it may have, to remove or tow away the vehicle involved and   charge the cost to Lessee, which cost shall be immediately payable upon   demand by Lessor. (c) Lessor shall at the Commencement Date of this Lease,   provide the parking facilities required by Applicable Law. 2.7 Common   Areas—Definition. The term “Common Areas” is defined as all areas and   facilities outside the Premises and within the exterior boundary line of the   industrial Center and interior utility raceways within the Premises that are   provided and designated by the Lessor from time to time for the general   non-exclusive use of Lessor, Lessee and other lessees of the Industrial   Center and their respective employees, suppliers, shippers, customers,   contractors and Invitees, including parking areas, loading and unloading   areas, trash areas, roadways, sidewalks, walkways, parkways, driveways and   landscaped areas. 2.8 Common Areas—Lessee’s Rights. Lessor hereby grants to   Lessee, for the benefit of Lessee and its employees, suppliers, shippers,   contractors, customers and invitees, during the term of this Lease, the   non-exclusive right to use, in common with others entitled to such use, the   Common Areas as they exist from time to time, subject to any rights, powers, and   privileges reserved by Lessor under the terms hereof or under the terms of   any rules and regulations or restrictions governing the use of the 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. 2.9 Common Areas —Rules and   Regulations. Lessor or such other person(s) as Lessor may appoint shall have   the exclusive control and management of the Common Areas and shall have the   right, from time to time, to establish, modify, amend and enforce reasonable   Rules and Regulations with respect thereto in accordance with Paragraph 40.   Lessee agrees to abide by and conform to all such Rules and Regulations, and   to cause its employees, suppliers, shippers, customers, contractors and   invitees to so abide and conform. Lessor shall not be responsible to Lessee   for the non-compliance with said rules and regulations by other lessees of   the Industrial Center. 2.10 Common Areas—Changes. Lessor shall have the   right, in Lessor’s sole discretion, from time to time: (a) To make changes to   the Common Areas, including, without limitation, changes in the location,   size, shape and number of driveways, entrances, parking spaces, parking   areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped   areas, walkways and utility raceways; (b) To close temporarily any of the   Common Areas for maintenance purposes so long as reasonable access to the   Premises remains available; (c) To designate other land outside the   boundaries of the 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; and (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. * 3. Term. 3.1   Term. The Commencement Date, Expiration Date and Original Term of this Lease   are as specified in Paragraph 1.3. 3.2 Early Possession. If an Early   Possession Date is specified in Paragraph 1.4 and if Lessee totally or   partially occupies the Premises after the Early Possession Date but prior to   the Commencement Date, the obligation to pay Base Rent shall be abated for   the period of such early occupancy. All other terms of this Lease, however,   (including but not limited to the obligations to pay Lessee’s Share of Common   Area Operating Expenses and to carry the insurance required by Paragraph 8)   shall be in effect during such period. Any such early possession shall not   affect nor advance the Expiration Date of the Original Term. 3.3 Delay in   Possession. If for any reason Lessor cannot deliver possession of the   Premises to Lessee by the Early Possession Date, if one is specified in   Paragraph 1.4, or if no Early Possession Date is specified, by the   Commencement 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, except as otherwise provided herein, be obligated to pay rent or perform   any other obligation of Lessee under the terms of this Lease until Lessor   delivers possession of the Premises to Lessee. If possession of the Premises   is not delivered to Lessee within sixty (60) days after the Commencement   Date, Lessee may, at its option, by notice in writing to Lessor within ten   (10) days after the end of said sixty (60) day period, cancel this Lease, in   which event the parties shall be discharged from all obligations hereunder;   provided further, however, that if such written notice of Lessee is not   received by Lessor within said ten (10) day period. Lessee’s right to cancel   this Lease hereunder shall terminate and be of no further force or effect.   Except as may be otherwise provided, and regardless of when the Original Term   actually commences, if possession is not tendered to Lessee when required by   this Lease and Lessee does not terminate this Lease, as aforesaid, the period   free of the obligation to pay Base Rent, if any, that Lessee would otherwise   have enjoyed shall run from the date of delivery of possession and continue   for a period equal to the period during which the Lessee would have otherwise   enjoyed under the terms hereof, but minus any days of delay caused by the   acts, changes or omissions of Lessee. 4. Rent. 4.1 Base Rent. Lessee shall   pay Base Rent and other rent or charges, as the same may be adjusted from   time to time, to Lessor in lawful money of the United States, without offset   or deduction, on or before the day on which it is due under the terms of this   Lease. Base Rent and all other rent and charges for any period during the   term hereof which is for less than one full month shall be prorated based   upon the actual number of days of the month involved. Payment of Base Rent   and other charges shall be made to Lessor at its address stated herein or to   such other persons or at such other addresses as Lessor may from time to time   designate in writing to Lessee. 4.2 Common Area Operating Expenses. Lessee   shall pay to Lessor during the term hereof, in addition to the Base Rent,   Lessee’s Share (as specified in Paragraph 1.6(b)) of all Common Area   Operating Expenses, as hereinafter defined, during each calendar year of the   term of this Lease, in accordance with the following provisions: (a) “Common   Area Operating Expenses” are defined, for purposes of this Lease, as all   costs incurred by Lessor relating to the ownership and operation of the   Industrial Center, including, but not limited to, the following: (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, fences and gates, elevators and roof. (bb) Exterior   signs and any tenant directories. (cc) Fire detection and sprinkler systems.   (ii) The cost of water, gas, electricity and telephone to service the Common   Areas. (iii) Trash disposal, property management and security services and   the costs’ of any environmental inspections. (iv) Reserves set aside for   maintenance and repair of Common Areas. (v) Any increase above the Base Real   Property Taxes (as defined in Paragraph 10.2(b)) for the Building and the   Common Areas. (vi) Any “Insurance Cost Increase” (as defined in Paragraph   8.1). (vii) The cost of Insurance carried by Lessor with respect to the   Common Areas. (viii) Any deductible portion of an insured loss concerning the   Building or the Common Areas. (ix) Any other services to be provided by Lessor   that are stated elsewhere in this Lease to be a Common Area Operating   Expense. (b) Any Common Area Operating Expenses and Real Property Taxes that   are specifically attributable to the Building or to any other building in the   Industrial Center or to the operation, repair and maintenance thereof, shall   be allocated entirely to the Building or to such other building. However, any   Common Area Operating Expenses and Real Property Taxes that are not   specifically attributable to the Building or to any other building or to the   operation, repair and maintenance thereof, shall be equitably allocated by   Lessor to all buildings in the Industrial Center. (c) The inclusion of the   improvements, facilities and services set forth in Subparagraph 4.2(a) shall   not be deemed to impose an obligation upon Lessor to either have said   improvements or facilities or to provide those services unless the 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 Common Area 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 Common   Area Operating Expenses and the same shall be payable monthly or quarterly,   as Lessor shall designate, during each 12-month period of the Lease term, on   the same day as the Base Rent is due hereunder. 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 Common   Area 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, Lessor shall be credited the   amount of such  MULTI-TENANT–GROSS   Initials: © American Industrial Real Estate Association 1993 —2— 

    

 

payment against   Lessee’s Share of Common Area Operating Expenses next becoming due. If   Lessee’s payments under this Paragraph 4.2(d) 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 Lessee’s execution hereof the Security Deposit set forth in   Paragraph 1.7 as security for Lessee’s faithful performance of Lessee’s   obligations under this Lease. If Lessee falls to pay Base Rent or other rent   or charges due hereunder, or otherwise Defaults under this lease (as defined   in Paragraph 13.1), Lessor may use, apply or retain all or any portion of   said Security Deposit for the payment of any amount due Lessor or reimburse   or compensate Lessor for any liability, cost, expense, loss or damage   (Including attorneys’ fees) which Lessor may suffer or incur by reason thereof.   If Lessor uses or applies all or any portion of said Security Deposit, Lessee   shall within ten (10) days after written request therefore deposit monies   with Lessor sufficient to restore said Security Deposit to the full amount   required by this Lease. Any time the Base Rent increases during the term of   this Lease, Lessee shall, upon written request from Lessor, deposit   additional monies with Lessor as an addition to the Security Deposit so that   the total amount of the Security Deposit 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 1.5. Lessor shall not   be required to keep all or any part of the Security Deposit separate from its   general accounts. Lessor shall, at the expiration or earlier termination of   the term hereof and after Lessee has vacated the Premises, return to Lessee   (or, at Lessor’s option, to the last assignee, if any, of Lessee’s interest   herein), that portion of the Security Deposit not used or applied by Lessor.   Unless otherwise expressly agreed in writing by Lessor, no part of the   Security Deposit shall be considered to be held in trust, to bear interest or   other increment for its use, or to be prepayment for any monies to be paid by   Lessee under this Lease. 6. Use. 6.1 Permitted Use. (a) Lessee shall use and   occupy the Premises only for the Permitted Use set forth in Paragraph 1.8, or   any other legal use which is reasonably comparable thereto, and for no other   purpose. Lessee shall not use or permit the use of the Premises in a manner   that is unlawful, creates waste or a nuisance, or that disturbs owners and/or   occupants of, or causes damage to the Premises or neighboring premises or   properties. (b) Lessor hereby agrees to not unreasonably withhold or delay   its consent to any written request by Lessee, Lessee’s assignees or   subtenants, and by prospective assignees and subtenants of Lessee, its   assignees and subtenants, for a modification of said Permitted Use, so long   as the same will not impair the structural integrity of the Improvements on   the Premises or in the Building or the mechanical or electrical systems   therein, does not conflict with uses by other lessees, is not significantly   more burdensome to the Premises or the Building and the improvements thereon,   and is otherwise permissible pursuant to this Paragraph 6. If Lessor elects   to withhold such consent, Lessor shall within five (5) business days after   such request give a written notification of same, which notice shall include   an explanation of Lessor’s reasonable objections to the change in use. 6.2   Hazardous Substances. (a) Reportable Uses Require Consent. The term   “Hazardous Substance” as used in this Lease shall mean any product,   substance, chemical, material or waste whose presence, nature, quantity   and/or intensity of existence, use, manufacture, disposal, transportation,   spill, release or effect, either by itself or in combination with other   materials expected to be on the Premises, is either: (i) potentially injurious   to the public health, safety or welfare, the environment, or the Premises;   (ii) regulated or monitored by any governmental authority; or (iii) a basis   for potential liability of Lessor to any governmental agency or third party   under any applicable statute or common law theory. Hazardous Substance shall   include, but not be limited to, hydrocarbons, petroleum, gasoline, crude oil   or any products or by-products thereof. Lessee shall not engage in any   activity in or about the Premises which constitutes a Reportable Use (as   hereinafter defined) of Hazardous Substances without the express prior   written consent of Lessor and compliance in a timely manner (at Lessee’s sole   cost and expense) with all Applicable Requirements (as defined in Paragraph   6.3). “Reportable Use” shall mean (i) the installation or use of any above or   below ground storage tank, (ii) the generation, possession, storage, use,   transportation, or disposal of a Hazardous Substance that requires a permit   from, or with respect to which a report, notice, registration or business   plan is required to be filed with, any governmental authority, and (iii) the   presence in, on or about the Premises of a Hazardous Substance with respect   to which any Applicable Laws require that a notice be given to persons entering   or occupying the Premises or neighboring properties. Notwithstanding the   foregoing, Lessee may, without Lessor’s prior consent, but upon notice to   Lessor and in compliance with all Applicable Requirements, use any ordinary   and customary materials reasonably required to be used by Lessee in the   normal course of the Permitted Use, so long as such use is not a Reportable   Use and does not expose the Premises or neighboring properties to any   meaningful risk of contamination or damage or expose Lessor to any liability   therefor. In addition, Lessor may (but without any obligation to do so)   condition its consent to any Reportable Use of any Hazardous Substance by   Lessee upon Lessee’s giving Lessor such additional assurances as Lessor, in   its reasonable discretion, deems necessary to protect itself, the public, the   Premises and the environment against damage, contamination or injury and/or   liability therefor, including but not limited to the installation (and, at   Lessor’s option, removal on or before Lease expiration or earlier   termination) of reasonably necessary protective modifications to the Premises   (such as concrete encasements) and/or the deposit of an additional Security   Deposit under Paragraph 5 hereof. (b) Duty to inform Lessor. If Lessee knows,   or has reasonable cause to believe, that a Hazardous Substance has come to be   located in, on, under or about the Premises or the Building, other than as   previously consented to by Lessor, Lessee shall immediately give Lessor   written notice thereof, together with a copy of any statement, report,   notice, registration, application, permit, business plan, license, claim,   action, or proceeding given to, or received from, any governmental authority   or private party concerning the presence, spill, release, discharge of, or   exposure to, such Hazardous Substance including but not limited to all such   documents as may be involved in any Reportable Use involving the Premises.   Lessee shall not cause or permit any Hazardous Substance to be spilled or   released in, on, under or about the Premises (including, without limitation,   through the plumbing or sanitary sewer system). (c) Indemnification. Lessee   shall indemnify, protect, defend and hold Lessor, its agents, employees,   lenders and ground lessor, if any, and the Premises, harmless from and   against any and all damages, liabilities, Judgments, costs, claims, liens,   expenses, penalties, loss of permits and attorneys’ and consultants’ fees   arising out of or involving any Hazardous Substance brought onto the Premises   by or for Lessee or by anyone under Lessee’s control. Lessee’s obligations   under this Paragraph 6.2(c) shall include, but not be limited to, the effects   of any contamination or injury to person, property or the environment created   or suffered by Lessee, and the cost of investigation (including consultants’   and attorneys’ fees and testing), removal, remediation, restoration and/or   abatement thereof, or of any contamination therein involved, and shall   survive the expiration or earlier termination of this Lease. No termination,   cancellation or release agreement entered into by Lessor and Lessee shall   release Lessee from its obligations under this Lease with respect to   Hazardous Substances, unless specifically so agreed by Lessor in writing at   the time of such agreement. 6.3 Lessee’s Compliance with Requirements. Lessee   shall, at Lessee’s sole cost and expense, fully, diligently and in a timely   manner, comply with all “Applicable Requirements,” which term is used in this   Lease to mean all laws, rules, regulations, ordinances, directives,   covenants, easements and restrictions of record, permits, the requirements of   any applicable fire insurance underwriter or rating bureau, and the   recommendations of Lessor’s engineers and/or consultants, relating in any   manner to the Premises (including but not limited to matters pertaining to   (i) industrial hygiene, (ii) environmental conditions on, in, under or about   the Premises, including soil and groundwater conditions, and (iii) the use,   generation, manufacture, production, installation, maintenance, removal,   transportation, storage, spill, or release of any Hazardous Substance), now   in effect or which may hereafter come into effect Lessee shall, within five   (5) days after receipt of Lessor’s written request, provide Lessor with   copies of all documents and information, including but not limited to   permits, registrations, manifests, applications, reports and certificates,   evidencing Lessee’s compliance with any Applicable Requirements specified by   Lessor, and shall immediately upon receipt, notify Lessor in writing (with   copies of any documents involved) of any threatened or actual claim, notice,   citation, warning, complaint or report pertaining to or involving failure by   Lessee or the Premises to comply with any Applicable Requirements. 6.4 Inspection;   Compliance with Law. Lessor, Lessor’s agents, employees, contractors and   designated representatives, and the holders of any mortgages, deeds of trust   or ground leases on the Premises (“Lenders”) shall have the right to enter   the Premises at any time in the case of an emergency, and otherwise at   reasonable times, for the purpose of inspecting the condition of the Premises   and for verifying compliance by Lessee with this Lease and all Applicable   Requirements (as defined in Paragraph 6.3), and Lessor shall be entitled to   employ experts and/or consultants in connection therewith to advise Lessor   with respect to Lessee’s activities, including but not limited to Lessee’s   installation, operation, use, monitoring, maintenance, or removal of any   Hazardous Substance on or from the Premises. The costs and expenses of any   such inspections shall be paid by the party requesting same, unless a Default   or Breach of this Lease by Lessee or a violation of Applicable Requirements   or a contamination, caused or materially contributed to by Lessee, is found   to exist or to be imminent, or unless the inspection is requested or ordered   by a governmental authority as the result of any such existing or imminent   violation or contamination. In such case, Lessee shall upon request reimburse   Lessor or Lessor’s Lender, as the case may be, for the costs and expenses of   such inspections. 7. Maintenance, Repairs, Utility Installations, Trade   Fixtures and Alterations. 7.1 Lessee’s Obligations. (a) Subject to the   provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance with Covenants,   Restrictions and Building Code), 7.2 (Lessor’s Obligations). 9 (Damage or   Destruction), and 14 (Condemnation), Lessee shall, at Lessee’s sole cost and   expense and at all times, keep the Premises and every part thereof in good   order, condition and repair (whether or not such portion of the Premises   requiring repair, or the means of repairing the same, are reasonably or   readily accessible to Lessee, and whether or not the need for such repairs   occurs as a result of Lessee’s use, any prior use, the elements or the age of   such portion of the Premises), including, without limiting the generality of   the foregoing, all equipment or facilities specifically serving the Premises,   such as plumbing, heating, air conditioning, ventilating, electrical,   lighting facilities, boilers, fired or unfired pressure vessels, fire hose   connections if within the Premises, fixtures, interior walls, interior   surfaces of exterior walls, ceilings, floors, windows, doors, plate glass,   and skylights, but excluding any items which are the responsibility of Lessor   pursuant to Paragraph 27. below. Lessee, in keeping the Premises in good   order, condition and repair, shall exercise and perform good maintenance   practices. Lessee’s obligations shall include restorations, replacements or   renewals when necessary to keep the Premises and all improvements thereon or   a part thereof in good order, condition and state of repair. (b) Lessee   shall, at Lessee’s sole cost and expense, procure and maintain a contract,   with copies to Lessor, in customary form and substance for and with a   contractor specializing and experienced in the inspection, maintenance and   service of the heating, air conditioning and ventilation system for the   Premises. However, Lessor reserves the right, upon notice to Lessee, to   procure and maintain the contract for the heating, air conditioning and   ventilating systems, and if Lessor so elects, Lessee shall reimburse Lessor,   upon demand, for the cost thereof. (c) If Lessee falls to perform Lessee’s   obligations under this Paragraph 7.1, Lessor may enter upon the Premises   after ten (10) days’ prior written notice to Lessee (except in the case of an   emergency, in which case no notice shall be required), perform such   obligations on Lessee’s behalf, and put the Premises in good order, condition   and repair, in accordance with Paragraph 13.2 below. 7.2 Lessor’s   Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3   (Compliance with Covenants, Restrictions and Building Code), 4.2 common on   Area Operating Expenses), 6 (Use), 7.1 (Lessee’s Obligations), 9 (Damage or   Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant   to Paragraph 4.2, shall keep in good order, condition and repair the   foundations, exterior walls, structural condition of interior bearing walls,   exterior roof, fire sprinkler and/or standpipe and hose (if located in the   Common Areas) or other automatic fire extinguishing system including fire   alarm and/or smoke detection    MULTI-TENANT–GROSS Initials: © American Industrial Real Estate   Association 1993 —3— 

    

 

payment against   Lessee’s Share of Common Area Operating Expenses next becoming due. If   Lessee’s payments under this Paragraph 4.2(d) 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 Lessee’s execution hereof the Security Deposit set forth in   Paragraph 1.7 as security for Lessee’s faithful performance of Lessee’s   obligations under this Lease. If Lessee falls to pay Base Rent or other rent   or charges due hereunder, or otherwise Defaults under this lease (as defined   in Paragraph 13.1), Lessor may use, apply or retain all or any portion of   said Security Deposit for the payment of any amount due Lessor or reimburse   or compensate Lessor for any liability, cost, expense, loss or damage   (Including attorneys’ fees) which Lessor may suffer or incur by reason   thereof. If Lessor uses or applies all or any portion of said Security   Deposit, Lessee shall within ten (10) days after written request therefore   deposit monies with Lessor sufficient to restore said Security Deposit to the   full amount required by this Lease. Any time the Base Rent increases during   the term of this Lease, Lessee shall, upon written request from Lessor,   deposit additional monies with Lessor as an addition to the Security Deposit   so that the total amount of the Security Deposit 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 1.5. Lessor shall not   be required to keep all or any part of the Security Deposit separate from its   general accounts. Lessor shall, at the expiration or earlier termination of   the term hereof and after Lessee has vacated the Premises, return to Lessee   (or, at Lessor’s option, to the last assignee, if any, of Lessee’s interest   herein), that portion of the Security Deposit not used or applied by Lessor.   Unless otherwise expressly agreed in writing by Lessor, no part of the   Security Deposit shall be considered to be held in trust, to bear interest or   other increment for its use, or to be prepayment for any monies to be paid by   Lessee under this Lease. 6. Use. 6.1 Permitted Use. (a) Lessee shall use and   occupy the Premises only for the Permitted Use set forth in Paragraph 1.8, or   any other legal use which is reasonably comparable thereto, and for no other   purpose. Lessee shall not use or permit the use of the Premises in a manner   that is unlawful, creates waste or a nuisance, or that disturbs owners and/or   occupants of, or causes damage to the Premises or neighboring premises or   properties. (b) Lessor hereby agrees to not unreasonably withhold or delay its   consent to any written request by Lessee, Lessee’s assignees or subtenants,   and by prospective assignees and subtenants of Lessee, its assignees and   subtenants, for a modification of said Permitted Use, so long as the same   will not impair the structural integrity of the Improvements on the Premises   or in the Building or the mechanical or electrical systems therein, does not   conflict with uses by other lessees, is not significantly more burdensome to   the Premises or the Building and the improvements thereon, and is otherwise   permissible pursuant to this Paragraph 6. If Lessor elects to withhold such   consent, Lessor shall within five (5) business days after such request give a   written notification of same, which notice shall include an explanation of   Lessor’s reasonable objections to the change in use. 6.2 Hazardous   Substances. (a) Reportable Uses Require Consent. The term “Hazardous   Substance” as used in this Lease shall mean any product, substance, chemical,   material or waste whose presence, nature, quantity and/or intensity of   existence, use, manufacture, disposal, transportation, spill, release or   effect, either by itself or in combination with other materials expected to   be on the Premises, is either: (i) potentially injurious to the public   health, safety or welfare, the environment, or the Premises; (ii) regulated   or monitored by any governmental authority; or (iii) a basis for potential   liability of Lessor to any governmental agency or third party under any   applicable statute or common law theory. Hazardous Substance shall include,   but not be limited to, hydrocarbons, petroleum, gasoline, crude oil or any   products or by-products thereof. Lessee shall not engage in any activity in   or about the Premises which constitutes a Reportable Use (as hereinafter defined)   of Hazardous Substances without the express prior written consent of Lessor   and compliance in a timely manner (at Lessee’s sole cost and expense) with   all Applicable Requirements (as defined in Paragraph 6.3). “Reportable Use”   shall mean (i) the installation or use of any above or below ground storage   tank, (ii) the generation, possession, storage, use, transportation, or   disposal of a Hazardous Substance that requires a permit from, or with   respect to which a report, notice, registration or business plan is required   to be filed with, any governmental authority, and (iii) the presence in, on   or about the Premises of a Hazardous Substance with respect to which any   Applicable Laws require that a notice be given to persons entering or   occupying the Premises or neighboring properties. Notwithstanding the   foregoing, Lessee may, without Lessor’s prior consent, but upon notice to   Lessor and in compliance with all Applicable Requirements, use any ordinary   and customary materials reasonably required to be used by Lessee in the   normal course of the Permitted Use, so long as such use is not a Reportable   Use and does not expose the Premises or neighboring properties to any   meaningful risk of contamination or damage or expose Lessor to any liability   therefor. In addition, Lessor may (but without any obligation to do so)   condition its consent to any Reportable Use of any Hazardous Substance by   Lessee upon Lessee’s giving Lessor such additional assurances as Lessor, in   its reasonable discretion, deems necessary to protect itself, the public, the   Premises and the environment against damage, contamination or injury and/or   liability therefor, including but not limited to the installation (and, at   Lessor’s option, removal on or before Lease expiration or earlier termination)   of reasonably necessary protective modifications to the Premises (such as   concrete encasements) and/or the deposit of an additional Security Deposit   under Paragraph 5 hereof. (b) Duty to inform Lessor. If Lessee knows, or has   reasonable cause to believe, that a Hazardous Substance has come to be   located in, on, under or about the Premises or the Building, other than as   previously consented to by Lessor, Lessee shall immediately give Lessor   written notice thereof, together with a copy of any statement, report,   notice, registration, application, permit, business plan, license, claim,   action, or proceeding given to, or received from, any governmental authority   or private party concerning the presence, spill, release, discharge of, or   exposure to, such Hazardous Substance including but not limited to all such   documents as may be involved in any Reportable Use involving the Premises.   Lessee shall not cause or permit any Hazardous Substance to be spilled or   released in, on, under or about the Premises (including, without limitation,   through the plumbing or sanitary sewer system). (c) Indemnification. Lessee   shall indemnify, protect, defend and hold Lessor, its agents, employees,   lenders and ground lessor, if any, and the Premises, harmless from and   against any and all damages, liabilities, Judgments, costs, claims, liens,   expenses, penalties, loss of permits and attorneys’ and consultants’ fees   arising out of or involving any Hazardous Substance brought onto the Premises   by or for Lessee or by anyone under Lessee’s control. Lessee’s obligations   under this Paragraph 6.2(c) shall include, but not be limited to, the effects   of any contamination or injury to person, property or the environment created   or suffered by Lessee, and the cost of investigation (including consultants’   and attorneys’ fees and testing), removal, remediation, restoration and/or   abatement thereof, or of any contamination therein involved, and shall   survive the expiration or earlier termination of this Lease. No termination,   cancellation or release agreement entered into by Lessor and Lessee shall   release Lessee from its obligations under this Lease with respect to   Hazardous Substances, unless specifically so agreed by Lessor in writing at   the time of such agreement. 6.3 Lessee’s Compliance with Requirements. Lessee   shall, at Lessee’s sole cost and expense, fully, diligently and in a timely   manner, comply with all “Applicable Requirements,” which term is used in this   Lease to mean all laws, rules, regulations, ordinances, directives,   covenants, easements and restrictions of record, permits, the requirements of   any applicable fire insurance underwriter or rating bureau, and the   recommendations of Lessor’s engineers and/or consultants, relating in any   manner to the Premises (including but not limited to matters pertaining to   (i) industrial hygiene, (ii) environmental conditions on, in, under or about   the Premises, including soil and groundwater conditions, and (iii) the use,   generation, manufacture, production, installation, maintenance, removal,   transportation, storage, spill, or release of any Hazardous Substance), now   in effect or which may hereafter come into effect Lessee shall, within five   (5) days after receipt of Lessor’s written request, provide Lessor with   copies of all documents and information, including but not limited to   permits, registrations, manifests, applications, reports and certificates,   evidencing Lessee’s compliance with any Applicable Requirements specified by   Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies   of any documents involved) of any threatened or actual claim, notice,   citation, warning, complaint or report pertaining to or involving failure by   Lessee or the Premises to comply with any Applicable Requirements. 6.4   Inspection; Compliance with Law. Lessor, Lessor’s agents, employees,   contractors and designated representatives, and the holders of any mortgages,   deeds of trust or ground leases on the Premises (“Lenders”) shall have the   right to enter the Premises at any time in the case of an emergency, and   otherwise at reasonable times, for the purpose of inspecting the condition of   the Premises and for verifying compliance by Lessee with this Lease and all   Applicable Requirements (as defined in Paragraph 6.3), and Lessor shall be   entitled to employ experts and/or consultants in connection therewith to   advise Lessor with respect to Lessee’s activities, including but not limited   to Lessee’s installation, operation, use, monitoring, maintenance, or removal   of any Hazardous Substance on or from the Premises. The costs and expenses of   any such inspections shall be paid by the party requesting same, unless a   Default or Breach of this Lease by Lessee or a violation of Applicable   Requirements or a contamination, caused or materially contributed to by   Lessee, is found to exist or to be imminent, or unless the inspection is   requested or ordered by a governmental authority as the result of any such   existing or imminent violation or contamination. In such case, Lessee shall   upon request reimburse Lessor or Lessor’s Lender, as the case may be, for the   costs and expenses of such inspections. 7. Maintenance, Repairs, Utility   Installations, Trade Fixtures and Alterations. 7.1 Lessee’s Obligations. (a)   Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance with   Covenants, Restrictions and Building Code), 7.2 (Lessor’s Obligations). 9   (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee’s   sole cost and expense and at all times, keep the Premises and every part   thereof in good order, condition and repair (whether or not such portion of   the Premises requiring repair, or the means of repairing the same, are   reasonably or readily accessible to Lessee, and whether or not the need for   such repairs occurs as a result of Lessee’s use, any prior use, the elements   or the age of such portion of the Premises), including, without limiting the   generality of the foregoing, all equipment or facilities specifically serving   the Premises, such as plumbing, heating, air conditioning, ventilating,   electrical, lighting facilities, boilers, fired or unfired pressure vessels,   fire hose connections if within the Premises, fixtures, interior walls,   interior surfaces of exterior walls, ceilings, floors, windows, doors, plate   glass, and skylights, but excluding any items which are the responsibility of   Lessor pursuant to Paragraph 27. below. Lessee, in keeping the Premises in   good order, condition and repair, shall exercise and perform good maintenance   practices. Lessee’s obligations shall include restorations, replacements or   renewals when necessary to keep the Premises and all improvements thereon or   a part thereof in good order, condition and state of repair. (b) Lessee   shall, at Lessee’s sole cost and expense, procure and maintain a contract,   with copies to Lessor, in customary form and substance for and with a   contractor specializing and experienced in the inspection, maintenance and   service of the heating, air conditioning and ventilation system for the   Premises. However, Lessor reserves the right, upon notice to Lessee, to   procure and maintain the contract for the heating, air conditioning and   ventilating systems, and if Lessor so elects, Lessee shall reimburse Lessor,   upon demand, for the cost thereof. (c) If Lessee falls to perform Lessee’s   obligations under this Paragraph 7.1, Lessor may enter upon the Premises   after ten (10) days’ prior written notice to Lessee (except in the case of an   emergency, in which case no notice shall be required), perform such   obligations on Lessee’s behalf, and put the Premises in good order, condition   and repair, in accordance with Paragraph 13.2 below. 7.2 Lessor’s   Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3   (Compliance with Covenants, Restrictions and Building Code), 4.2 common on   Area Operating Expenses), 6 (Use), 7.1 (Lessee’s Obligations), 9 (Damage or   Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant   to Paragraph 4.2, shall keep in good order, condition and repair the   foundations, exterior walls, structural condition of interior bearing walls,   exterior roof, fire sprinkler and/or standpipe and hose (if located in the   Common Areas) or other automatic fire extinguishing system including fire   alarm and/or smoke detection    MULTI-TENANT–GROSS Initials: © American Industrial Real Estate   Association 1993 —3— 

    

 

 

 systems and equipment, fire hydrants,   parking lots, walkways, parkways, driveways, landscaping, fences, signs and   utility systems serving the Common Areas and all parts thereof, as well as   providing the services for which there is a Common Area Operating Expense   pursuant to Paragraph 4.2. Lessor shall not be obligated to paint the   exterior or interior surfaces of exterior walls nor shall Lessor be obligated   to maintain, repair or replace windows, doors or plate glass of the Premises.   Lessee expressly waives the benefit of any statute now or hereafter in effect   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   Building, Industrial Center or Common Areas in good order, condition and   repair. 7.3 Utility Installations, Trade Fixtures, Alterations. (a)   Definitions; Consent Required. The term “Utility Installations” is used in   this Lease to refer to all air lines, power panels, electrical distribution,   security, fire protection systems, communications systems, lighting fixtures,   heating, ventilating and air conditioning equipment, plumbing, and fencing   in, on or about the Premises. The term “Trade Fixtures” shall mean Lessee’s   machinery and equipment which can be removed without doing material damage to   the Premises. The term “Alterations” shall mean any modification of the   improvements on the Premises which are provided by Lessor under the terms of   this Lease, other than Utility Installations or Trade Fixtures. “Lessee-Owned   Alterations and/or Utility Installations” are defined as Alterations and/or   Utility Installations made by Lessee that are not yet owned by Lessor   pursuant to Paragraph 7.4(a). Lessee shall not make nor cause to be made any   Alterations or Utility Installations in, on, under or about the Premises   without Lessor’s prior written consent. Lessee may, however, make   non-structural Utility Installations to the interior of the Premises   (excluding the roof) without Lessor’s consent but upon notice to Lessor, so   long as they are not visible from the outside of the Premises, do not involve   puncturing, relocating or removing the roof or any existing walls, or   changing or interfering with the fire sprinkler or fire detection systems and   the cumulative cost thereof during the term of this Lease as extended does   not exceed $2,500.00. (b) Consent. Any Alterations or Utility Installations   that Lessee shall desire to make and which require the consent of the Lessor   shall be presented to Lessor in written form with detailed plans. All   consents given by Lessor, whether by virtue of Paragraph 7.3(a) or by   subsequent specific consent, shall be deemed conditioned upon: (i) Lessee’s   acquiring all applicable permits required by governmental authorities; (ii)   the furnishing of copies of such permits together with a copy of the plans   and specifications for the Alteration or Utility Installation to Lessor prior   to commencement of the work thereon; and (iii) the compliance by Lessee with   all conditions of said permits in a prompt and expeditious manner. Any   Alterations or Utility Installations by Lessee during the term of this Lease   shall be done in a good and workmanlike manner, with good and sufficient   materials, and be in compliance with all Applicable Requirements. Lessee   shall promptly upon completion thereof furnish Lessor with as-built plans and   specifications therefor. Lessor may, (but without obligation to do so)   condition its consent to any requested Alteration or Utility Installation   that costs $2,500.00 or more upon Lessee’s providing Lessor with a lien and   completion bond in an amount equal to one and one-half times the estimated   cost of such Alteration or Utility Installation. (c) Lien Protection. Lessee   shall pay when due all claims for labor or materials furnished or alleged to   have been furnished to or for Lessee at or for use on the Premises, which   claims are or may be secured by any mechanic’s or materialmen’s lien against   the Premises or any interest therein. Lessee shall give Lessor not less than   ten (10) days’ notice prior to the commencement of any work in, on, or about   the Premises, and Lessor shall have the right to post notices of   non-responsibility in or on the Premises 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 and protect itself, Lessor and the   Premises against the same and shall pay and satisfy any such adverse judgment   that may be rendered thereon before the enforcement thereof against the   Lessor or the Premises. If Lessor shall require, Lessee shall furnish to   Lessor a surety bond satisfactory to Lessor in an amount equal to one and   one-half times the amount of such contested lien claim or demand,   indemnifying Lessor against liability for the same, as required by law for   the holding of the Premises 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 its best   interest to do so. 7.4 Ownership, Removal, Surrender, and Restoration. (a)   Ownership. Subject to Lessor’s right to require their removal and to cause   Lessee to become the owner thereof as hereinafter provided in this Paragraph   7.4, all Alterations and Utility Installations made to the Premises by Lessee   shall be the property of and owned by Lessee, but considered a part of the   Premises. Lessor may, at any time and at its option, elect in writing to   Lessee to be the owner of all or any specified part of the Lessee-Owned   Alterations and Utility Installations. Unless otherwise instructed per   Subparagraph 7.4(b) hereof, all Lessee-Owned Alterations and Utility   Installations shall, at the expiration or earlier termination of this Lease,   become the property of Lessor and remain upon the Premises and be surrendered   with the Premises by Lessee. (b) Removal. Unless otherwise agreed in writing,   Lessor may require that any or all Lessee-Owned Alterations or Utility Installations   be removed by the expiration or earlier termination of this Lease,   notwithstanding that their installation may have been consented to by Lessor.   Lessor may require the removal at any time of all or any part of any   Alterations or Utility Installations made without the required consent of   Lessor. (c) Surrender/Restoration. Lessee shall surrender the Premises by the   end of the last day of the Lease term or any earlier termination date, clean   and free of debris and in good operating order, condition and state of   repair, ordinary wear and tear excepted. Ordinary wear and tear shall not   include any damage or deterioration that would have been prevented by good   maintenance practice or by Lessee performing all of its obligations under   this Lease. Except as otherwise agreed or specified herein, the Premises, as   surrendered, shall include the Alterations and Utility Installations. The   obligation of Lessee shall include the repair of any damage occasioned by the   installation, maintenance or removal of Lessee’s Trade Fixtures, furnishings,   equipment, and Lessee-Owned Alterations and Utility Installations, as well as   the removal of any storage tank installed by or for Lessee, and the removal,   replacement, or remediation of any soil, material or ground water contaminated   by Lessee, all as may then be required by Applicable Requirements and/or good   practice. Lessee’s Trade Fixtures shall remain the property of Lessee and   shall be removed by Lessee subject to its obligation to repair and restore   the Premises per this Lease. 8. Insurance; Indemnity. 8.1 Payment of Premium   Increases. (a) As used herein, the term “Insurance Cost Increase” is defined   as any increase in the actual cost of the insurance applicable to the   Building and required to be carried by Lessor pursuant to Paragraphs 8.2(b),   8.3(a) and 8.3(b), (“Required Insurance”), over and above the Base Premium,   as hereinafter defined, calculated on an annual basis. “Insurance Cost   Increase” shall include, but not be limited to, requirements of the holder of   a mortgage or deed of trust covering the Premises, increased valuation of the   Premises, and/or a general premium rate increase. The term “Insurance Cost   Increase” shall not, however, include any premium increases resulting from   the nature of the occupancy of any other lessee of the Building. If the   parties insert a dollar amount in Paragraph 1.9, such amount shall be   considered the “Base Premium.” If a dollar amount has not been Inserted in   Paragraph 1.9 and if the Building has been previously occupied during the twelve   (12) month period immediately preceding the Commencement Date, the “Base   Premium” shall be the annual premium applicable to such twelve (12) month   period. If the Building was not fully occupied during such twelve (12) month   period, the “Base Premium” shall be the lowest annual premium reasonably   obtainable for the Required Insurance as of the Commencement Date, assuming   the most nominal use possible of the Building. In no event, however, shall   Lessee be responsible for any portion of the premium cost attributable to   liability insurance coverage in excess of $1,000,000 procured under Paragraph   8.2(b). (b) Lessee shall pay any Insurance Cost increase to Lessor pursuant   to Paragraph 4.2. Premiums for policy periods commencing prior to, or   extending beyond, the term of this Lease shall be prorated to coincide with   the corresponding Commencement Date or Expiration Date. 8.2 Liability   Insurance. (a) Carried by Lessee. Lessee shall obtain and keep in force   during the term of this Lease a Commercial General Liability policy of   insurance protecting Lessee, Lessor and any Lender(s) whose names have been   provided to Lessee in writing (as additional insureds) against claims for   bodily injury, personal injury and property damage based upon, involving or   arising out of the ownership, use, occupancy or maintenance of the Premises   and all areas appurtenant thereto. Such insurance shall be on an occurrence   basis providing single limit coverage in an amount not less than $1,000,000   per occurrence with an “Additional Insured-Managers or Lessors of Premises”   endorsement and contain the “Amendment of the Pollution Exclusion”   endorsement for damage caused by heat, smoke or fumes from a hostile fire.   The policy shall not contain any intra-insured exclusions as between insured   persons or organizations, but shall include coverage for liability assumed   under this Lease as an “insured contract” for the performance of Lessee’s   indemnity obligations under this Lease. The limits of said insurance required   by this Lease or as carried by Lessee shall not, however, limit the liability   of Lessee nor relieve Lessee of any obligation hereunder. All insurance to be   carried by Lessee shall be primary to and not contributory with any similar   insurance carried by Lessor, whose insurance shall be considered excess   insurance only. (b) Carried by Lessor. Lessor shall also maintain liability   insurance described in Paragraph 8.2(a) above, in addition to and not in lieu   of, the insurance required to be maintained by Lessee. Lessee shall not be   named as an additional insured therein. 8.3 Property Insurance-Building,   Improvements and Rental Value. (a) Building and Improvements. Lessor shall   obtain and keep in force during the term of this Lease a policy or policies   in the name of Lessor, with loss payable to Lessor and to any Lender(s),   insuring against loss or damage to the Premises. Such insurance shall be for   full replacement cost, as the same shall exist from time to time, or the   amount required by any Lender(s), but in no event more than the commercially reasonable   and available insurable value thereof if, by reason of the unique nature or   age of the improvements involved, such latter amount is less than full   replacement cost. Lessee-Owned Alterations and Utility Installations, Trade   Fixtures and Lessee’s personal property shall be insured by Lessee pursuant   to Paragraph 8.4. If the coverage is available and commercially appropriate,   Lessor’s policy or policies shall insure against all risks of direct physical   loss or damage (except the perils of flood and/or earthquake unless required   by a Lender or included in the Base Premium), including coverage for any   additional costs resulting from debris removal and reasonable amounts of   coverage for the enforcement of any ordinance or law regulating the   reconstruction or replacement of any undamaged sections of the Building   required to be demolished or removed by reason of the enforcement of any   building, zoning, safety or land use laws as the result of a covered loss,   but not including plate glass insurance. Said policy or policies shall also   contain an agreed valuation provision in lieu of any co-insurance clause,   waiver of subrogation, and inflation guard protection causing an increase in   the annual property insurance coverage amount by a factor of not less than the   adjusted U.S. Department of Labor Consumer Price Index for All Urban   Consumers for the city nearest to where the Premises are located. (b) Rental   Value. Lessor shall also obtain and keep in force during the term of this   Lease a policy or policies in the name of Lessor, with loss payable to Lessor   and any Lender(s), insuring the loss of the full rental and other charges   payable by all lessees of the Building to Lessor for one year (including all   Real Property Taxes, insurance costs, all Common Area Operating Expenses and   any scheduled rental increases). Said insurance may provide that in the event   the Lease is terminated by reason of an insured loss, the period of indemnity   for such coverage shall be extended beyond the date of the completion of   repairs or replacement of the Premises, to provide for one full year’s loss   of rental revenues from the date of any such loss. Said insurance shall   contain an agreed valuation , Provision in lieu of any co-insurance clause,   and the amount of coverage shall be adjusted annually to reflect the   projected rental income, Real Property Taxes, insurance premium costs and   other expenses, if any, otherwise payable, for the next 12-month period.   Common Area Operating Expenses shall include any deductible amount in the   event of such loss. (c) Adjacent Premises. Lessee shall pay for any increase   in the premiums for the property insurance of the Building and for the Common   Areas or other buildings in the Industrial Center if said increase is caused   by Lessee’s acts, omissions, use or occupancy of the Premises.  MULTI-TENANT–GROSS Initials: © American   Industrial Real Estate Association 1993 —4— 

    

 

  (d)   Lessee’s Improvements. Since Lessor is the Insuring Party, Lessor shall not   be required to insure Lessee-Owned Alterations and Utility Installations   unless the item in question has become the property of Lessor under the terms   of this Lease. 8.4 Lessee’s Property Insurance. Subject to the requirements   of Paragraph 8.5, Lessee at its cost shall either by separate policy or at   Lessor’s option, by endorsement to a policy already carried, maintain   insurance coverage on all of Lessee’s personal property. Trade Fixtures and   Lessee-Owned Alterations and Utility Installations in, on, or about the   Premises similar in coverage to that carried by Lessor as the Insuring Party   under Paragraph 8.3(a). Such Insurance shall be full replacement cost   coverage with a deductible not to exceed $1,000 per occurrence. The proceeds   from any such insurance shall be used by Lessee for the replacement of   personal property and the restoration of Trade Fixtures and Lessee-Owned   Alterations and Utility Installations. Upon request from Lessor, Lessee shall   provide Lessor with written evidence that such insurance is in force. 8.5   Insurance Policies. Insurance required hereunder shall be in companies duly   licensed to transact business in the state where the Premises are located,   and maintaining during the policy term a “General Policyholders Rating” of at   least B+, V, or such other rating as may be required by a Lender, 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 referred to in this Paragraph 8. Lessee shall cause to be delivered   to Lessor, within seven (7) days after the earlier of the Early Possession   Date or the Commencement Date, certified copies of, or certificates evidencing   the existence and amounts of, the insurance required under Paragraph 8.2(a)   and 8.4. No such policy shall be cancelable or subject to modification except   after thirty (30) days’ prior written notice to Lessor. Lessee shall at least   thirty (30) days prior to the expiration of such policies, furnish Lessor   with evidence of renewals or “insurance binders” evidencing renewal thereof,   or Lessor may order such insurance and charge the cost thereof to Lessee,   which amount shall be payable by Lessee to Lessor upon demand. 8.6 Waiver of   Subrogation. Without affecting any other rights or remedies, Lessee and   Lessor each hereby release and relieve the other, and waive their entire   right to recover damages (whether in contract or in tort) against the other, for   loss or damage to their property arising out of or incident to the perils   required to be insured against under Paragraph 8. The effect of such releases   and waivers of the right to recover damages shall not be limited by the   amount of insurance carried or required, or by any deductibles applicable   thereto. Lessor and Lessee agree to have their respective insurance companies   issuing property damage insurance waive any right to subrogation that such   companies may have against Lessor or Lessee, as the case may be, so long as   the insurance is not invalidated thereby. 8.7 Indemnity. Except for Lessor’s   negligence and/or breach of express warranties, Lessee shall indemnify,   protect, defend and hold harmless the Premises, Lessor and its agents,   Lessor’s master or ground lessor, partners and Lenders, from and against any   and all claims, loss of rents and/or damages, costs, liens, judgments,   penalties, loss of permits, attorneys’ and consultants’ fees, expenses and/or   liabilities arising out of, involving, or in connection with, the occupancy   of the Premises by Lessee, the conduct of Lessee’s business, any act,   omission or neglect of Lessee, its agents, contractors, employees or   invitees, and out of any Default or Breach by Lessee in the performance in a   timely manner of any obligation on Lessee’s part to be performed under this   Lease. The foregoing shall include, but not be limited to, the defense or   pursuit of any claim or any action or proceeding involved therein, and   whether or not (in the case of claims made against Lessor) litigated and/or   reduced to judgment. In case any action or proceeding be brought against   Lessor by reason of any of the foregoing matters, Lessee upon notice from   Lessor shall defend the same at Lessee’s expense by counsel reasonably   satisfactory to Lessor and Lessor shall cooperate with Lessee in such   defense. Lessor need not have first paid any such claim in order to be so   indemnified. 8.8 Exemption of Lessor from Liability. Lessor shall not be   liable for injury or damage to the person or goods, wares, merchandise or   other property of Lessee, Lessee’s employees, contractors, invitees,   customers, or any other person in or about the Premises, whether such damage   or injury is caused by or results from fire, steam, electricity, gas, water   or rain, or from the breakage, leakage, obstruction or other defects of   pipes, fire sprinklers, wires, appliances, plumbing, air conditioning or   lighting fixtures, or from any other cause, whether said injury or damage   results from conditions arising upon the Premises or upon other portions of   the Building of which the Premises are a part, from other sources or places,   and regardless of whether the cause of such damage or injury or the means of   repairing the same is accessible or not. Lessor shall not be liable for any   damages arising from any act or neglect of any other lessee of Lessor nor   from the failure by Lessor to enforce the provisions of any other lease in   the Industrial Center. Notwithstanding Lessor’s negligence or breach of this   Lease, Lessor shall under no circumstances be liable for injury to Lessee’s   business or for any loss of income or profit therefrom. 9. Damage or   Destruction. 9.1 Definitions. (a) “Premises Partial Damage” shall mean damage   or destruction to the Premises, other than Lessee-Owned Alterations and   Utility Installations, the repair cost of which damage or destruction is less   than fifty percent (50%) of the then Replacement Cost (as defined in   Paragraph 9.1(d)) of the Premises (excluding Lessee-Owned Alterations and   Utility Installations and Trade Fixtures) immediately prior to such damage or   destruction. (b) “Premises Total Destruction” shall mean damage or   destruction to the Premises, other than Lessee-Owned Alterations and Utility   Installations, the repair cost of which damage or destruction is fifty   percent (50%) or more of the then Replacement Cost of the Premises (excluding   Lessee-Owned Alterations and Utility installations and Trade Fixtures)   immediately prior to such damage or destruction. In addition, damage or   destruction to the Building, other than Lessee-Owned Alterations and Utility   Installations and Trade Fixtures of any lessees of the Building, the cost of   which damage or destruction is fifty percent (50%) or more of the then   Replacement Cost (excluding Lessee-Owned Alterations and Utility   Installations and Trade Fixtures of any lessees of the Building) of the   Building shall, at the option of Lessor, be deemed to be Premises Total   Destruction. (c) “Insured Loss” shall mean damage or destruction to the   Premises, other than Lessee-Owned Alterations and Utility Installations and   Trade Fixtures, which was caused by an event required to be covered by the   insurance described in Paragraph 8.3(a) irrespective of any deductible   amounts or coverage limits involved. (d) “Replacement Cost” shall mean the   cost to repair or rebuild the improvements owned by Lessor at the time of the   occurrence to their condition existing immediately prior thereto, including   demolition, debris removal and upgrading required by the operation of   applicable building codes, ordinances or laws, and without deduction for   depreciation. (e) “Hazardous Substance Condition” shall mean the occurrence   or discovery of a condition involving the presence of, or a contamination by,   a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the   Premises. 9.2 Premises Partial Damage—Insured Loss. If Premises Partial   Damage that is an Insured Loss occurs, then Lessor shall, at Lessor’s   expense, repair such damage (but not Lessee’s Trade Fixtures or Lessee-Owned   Alterations and Utility Installations) as soon as reasonably possible and   this Lease shall continue in full force and effect. In the event, however,   that there is a shortage of insurance proceeds and such shortage is due to   the fact that, by reason of the unique nature of the improvements in the   Premises, full replacement cost insurance coverage was not commercially   reasonable and available, Lessor shall have no obligation to pay for the   shortage in insurance proceeds or to fully restore the unique aspects of the   Premises unless Lessee provides Lessor with the funds to cover same, or   adequate assurance thereof, within ten (10) days following receipt of written   notice of such shortage and request therefor. If Lessor receives said funds   or adequate assurance thereof within said ten (10) day period, Lessor shall   complete them as soon as reasonably possible and this Lease shall remain in   full force and effect. If Lessor does not receive such funds or assurance   within said period, Lessor may nevertheless elect by written notice to Lessee   within ten (10) days thereafter to make such restoration and repair as is   commercially reasonable with Lessor paying any shortage in proceeds, in which   case this Lease shall remain in full force and effect. If Lessor does not   receive such funds or assurance within such ten (10) day period, and if   Lessor does not so elect to restore and repair, then this Lease shall   terminate sixty (60) days following the occurrence of the damage or   destruction. Unless otherwise agreed, Lessee shall in no event have any right   to reimbursement from Lessor for any funds contributed by Lessee to repair   any such damage or destruction. Premises Partial Damage due to flood or   earthquake shall be subject to Paragraph 9.3 rather than Paragraph 9.2,   notwithstanding that there may be some insurance coverage, but the net   proceeds of any such insurance shall be made available for the repairs if   made by either Party. 9.3 Partial Damage—Uninsured Loss. If Premises Partial   Damage that is not an Insured Loss occurs, unless caused by a negligent or   willful act of Lessee (in which event Lessee shall make the repairs at   Lessee’s expense and this Lease shall continue in full force and effect),   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 receipt by Lessor of knowledge of the   occurrence of such damage of Lessor’s desire to terminate this Lease as of   the date sixty (60) days following the date of such notice. In the event   Lessor elects to give such notice of Lessor’s intention to 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 commitment to pay   for the repair of such damage totally at Lessee’s expense and without   reimbursement from Lessor. Lessee shall provide Lessor with the required   funds or satisfactory assurance thereof within thirty (30) days following   such commitment from Lessee. In such event this Lease shall continue in full   force and effect, and Lessor shall proceed to make such repairs as soon as   reasonably possible after the required funds are available. If Lessee does   not give such notice and provide the funds or assurance thereof within the   times specified above, this Lease shall terminate as of the date specified in   Lessor’s notice of termination. 9.4 Total Destruction. Notwithstanding any   other provision hereof, if Premises Total Destruction occurs (including any   destruction required by any authorized public authority), this Lease shall   terminate sixty (60) days following the date of such Premises Total   Destruction, whether or not the damage or destruction is an Insured Loss or   was caused by a negligent or willful act of Lessee. In the event, however,   that the damage or destruction was caused by Lessee, Lessor shall have the   right to recover Lessor’s damages from Lessee except as released and waived   in Paragraph 9.7. 9.5 Damage Near End of Term. If at any time during the last   six (6) months of the term of this Lease there is damage for which the cost   to repair exceeds one month’s Base Rent, whether or not an Insured Loss,   Lessor may, at Lessor’s option, terminate this Lease effective sixty (60)   days following the date of occurrence of such damage by giving written notice   to Lessee of Lessor’s election to do so within thirty (30) days after the   date of occurrence of such damage. Provided, however, if Lessee at that time   has an exercisable option to extend this Lease or to purchase the Premises,   then Lessee may preserve this Lease by (a) exercising such option, and (b)   providing Lessor with any shortage in insurance proceeds (or adequate   assurance thereof) needed to make the repairs on or before the earlier of (i)   the date which is ten (10) days after Lessee’s receipt of Lessor’s written   notice purporting to terminate this Lease, or (ii) the day prior to the date   upon which such option expires. If Lessee duly exercises such option during   such period and provides Lessor with funds (or adequate assurance thereof) to   cover any shortage in insurance proceeds, Lessor shall, at Lessor’s expense   repair such damage as soon as reasonably possible and this Lease shall   continue in full force and effect. If Lessee fails to exercise such option   and provide such funds or assurance during such period, then this Lease shall   terminate as of the date set forth in the first sentence of this Paragraph   9.5. 9.6 Abatement of Rent; Lessee’s Remedies. (a) In the event of (i)   Premises Partial Damage or (ii) Hazardous Substance Condition for which   Lessee is not legally responsible, the Base Rent, Common Area Operating   Expenses and other charges, if any, payable by Lessee hereunder for the   period during which such damage or condition, its repair, remediation or   restoration continues, shall be abated in proportion to the degree to which   Lessee’s use of the Premises is impaired, but not in excess of proceeds from   insurance required to be carried under Paragraph 8.3(b). Except for abatement   of Base Rent, Common Area Operating Expenses and other charges, if any, as   aforesaid, all other obligations of Lessee hereunder shall be performed by   Lessee, and Lessee shall have no claim against Lessor for any damage suffered   by reason of any such damage, destruction, repair, remediation or   restoration.  MULTI-TENANT—GROSS   Initials: © American Industrial Real Estate Association 1993 —5— 

    

 

(b) If Lessor   shall be obligated to repair or restore the Premises under the provisions of   this Paragraph 9 and shall not commence, in a substantial and meaningful way,   the repair or restoration of the Premises within ninety (90) days after such   obligation shall accrue, Lessee may, at any time prior to the commencement of   such repair or restoration, give written notice to Lessor and to any Lenders   of which Lessee has actual notice of Lessee’s election to terminate this   Lease on a date not less than sixty (60) days following the giving of such   notice. If Lessee gives such notice to Lessor and such Lenders and such   repair or restoration is not commenced within thirty (30) days after receipt   of such notice, this Lease shall terminate as of the date specified in said   notice. If Lessor or a Lender commences the repair or restoration of the   Premises within thirty (30) days after the receipt of such notice, this Lease   shall continue in full force and effect “Commence” as used in this Paragraph   9.6 shall mean either the unconditional authorization of the preparation of   the required plans, or the beginning of the actual work on the Premises,   whichever occurs first. 9.7 Hazardous Substance Conditions. If a Hazardous   Substance Condition occurs, unless Lessee is legally responsible therefor (in   which case Lessee shall make the investigation and remediation thereof   required by Applicable Requirements and this Lease shall continue in full   force and effect, but subject to Lessor’s rights under Paragraph 6.2(c) and   Paragraph 13), Lessor may at Lessor’s option either (i) investigate and   remediate such Hazardous Substance Condition, if required, as soon as   reasonably possible at Lessor’s expense, in which event this Lease shall   continue in full force and effect, or (ii) if the estimated cost to   investigate and remediate such condition exceeds twelve (12) times the then   monthly Base Rent or $100,000 whichever is greater, give written notice to   Lessee within thirty (30) days after receipt by Lessor of knowledge of the   occurrence of such Hazardous Substance Condition of Lessor’s desire to   terminate this Lease as of the date sixty (60) days following the date of   such notice. In the event Lessor elects to give such notice of Lessor’s   intention to 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 commitment to pay for the excess costs of (a) investigation and   remediation of such Hazardous Substance Condition to the extent required by   Applicable Requirements, over (b) an amount equal to twelve (12) times the then   monthly Base Rent or $100,000, whichever is greater. Lessee shall provide   Lessor with the funds required of Lessee or satisfactory assurance thereof   within thirty (30) days following said commitment by Lessee. In such event   this Lease shall continue in full force and effect, and Lessor shall proceed   to make such investigation and remediation as soon as reasonably possible   after the required funds are available. If Lessee does not give such notice   and provide the required funds or assurance thereof within the time period   specified above, this Lease shall terminate as of the date specified in   Lessor’s notice of termination. 9.8 Termination—Advance Payments. Upon   termination of this Lease pursuant to this Paragraph 9, Lessor shall return   to Lessee any advance payment made by Lessee to Lessor and so much of   Lessee’s Security Deposit as has not been, or is not then required to be,   used by Lessor under the terms of this Lease. 9.9 Waiver of Statutes. Lessor   and Lessee agree that the terms of this Lease shall govern the effect of any   damage to or destruction of the Premises and the Building with respect to the   termination of this Lease and hereby waive the provisions of any present or   future statute to the extent it is inconsistent herewith. 10. Real Property   Taxes. 10.1 Payment of Taxes. Lessor shall pay the Real Property Taxes, as   defined in Paragraph 10.2(a), applicable to the Industrial Center, and except   as otherwise provided in Paragraph 10.3, any increases in such amounts over   the Base Real Property Taxes shall be included in the calculation of Common   Area Operating Expenses in accordance with the provisions of Paragraph 4.2.   10.2 Real Property Tax Definitions. (a) As used herein, the term “Real   Property Taxes” 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 upon the Industrial Center by any   authority having the direct or indirect power to tax, including any city,   state or federal government, or any school, agricultural, sanitary, fire,   street, drainage, or other improvement district thereof, levied against any   legal or equitable interest of Lessor in the Industrial Center or any portion   thereof, Lessor’s right to rent or other income therefrom, and/or Lessor’s   business of leasing the Premises. The term “Real Property Taxes” shall also   include any tax, fee, levy, assessment or charge, or any increase therein, imposed   by reason-of events occurring, or changes in Applicable Law taking effect,   during the term of this Lease, including but not limited to a change in the   ownership of the Industrial Center or in the improvements thereon, the   execution of this Lease, or any modification, amendment or transfer thereof,   and whether or not contemplated by the Parties. (b) As used herein, the term   “Base Real Property Taxes” shall be the amount of Real Property Taxes, which   are assessed against the Premises, Building or Common Areas in the calendar   year during which the Lease is executed. In calculating Real Property Taxes   for any calendar year, the Real Property Taxes for any real estate tax year   shall be included in the calculation of Real Property Taxes for such calendar   year based upon the number of days which such calendar year and tax year have   in common. 10.3 Additional Improvements. Common Area Operating Expenses shall   not include Real Property Taxes 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. Notwithstanding Paragraph 10.1 hereof, Lessee shall,   however, pay to Lessor at the time Common Area Operating Expenses are payable   under Paragraph 4.2, the entirety of any increase in Real Property Taxes if   assessed solely by reason of Alterations, Trade Fixtures or Utility   Installations placed upon the Premises by Lessee or at Lessee’s request. 10.4   Joint Assessment. If the Building is not separately assessed. Real Property   Taxes allocated to the Building shall be an equitable proportion of the Real   Property Taxes for all of the land and improvements included within the tax   parcel assessed, such proportion to be determined by Lessor from the   respective valuations assigned in the assessor’s work sheets or such other   information as may be reasonably available. Lessor’s reasonable determination   thereof, in good faith, shall be conclusive. 10.5 Lessee’s Property Taxes. Lessee   shall pay prior to delinquency all taxes assessed against and levied upon   Lessee-Owned Alterations and Utility Installations, Trade Fixtures,   furnishings, equipment and all personal property of Lessee contained in the   Premises or stored within the Industrial Center. When possible, Lessee shall   cause its Lessee-Owned Alterations and Utility Installations, Trade Fixtures,   furnishings, equipment and all other personal property to be assessed and   billed separately from the real property of Lessor. If any of Lessee’s said   property shall be assessed with Lessor’s real property, Lessee shall pay   Lessor the taxes attributable to Lessee’s property within ten (10) days after   receipt of a written statement setting forth the taxes applicable to Lessee’s   property. 11. Utilities. Lessee shall pay directly for all utilities and   services supplied to the Premises, including but not limited to electricity,   telephone, security, gas and cleaning of the Premises, together with any   taxes thereon. If any such utilities or services are not separately metered   to the Premises or separately billed to the Premises. Lessee shall pay to   Lessor a reasonable proportion to be determined by Lessor of all such charges   jointly metered or billed with other premises in the Building, in the manner   and within the time periods set forth in Paragraph 4.2(d). 12. Assignment and   Subletting. 12.1 Lessor’s Consent Required. (a) Lessee shall not voluntarily   or by operation of law assign, transfer, mortgage or otherwise transfer or   encumber (collectively, “assign”) or sublet all or any part of Lessee’s   interest in this Lease or in the Premises without Lessor’s prior written   consent given under and subject to the terms of Paragraph 36. (b) A change in   the control of Lessee shall constitute an assignment requiring Lessor’s   consent. The transfer, on a cumulative basis, of twenty-five percent (25%) or   more of the voting control of Lessee shall constitute a change in control for   this purpose. (c) The involvement of Lessee or its assets in any transaction,   or series of transactions (by way of merger, sale, acquisition, financing,   refinancing, transfer, leveraged buy-out or otherwise), whether or not a   formal assignment or hypothecation of this Lease or Lessee’s assets occurs,   which results or will result in a reduction of the Net Worth of Lessee, as   hereinafter defined, by an amount equal to or greater than twenty-five   percent (25%) of such Net Worth of Lessee as it was represented to Lessor at   the time of full execution and delivery of this Lease or at the time of the   most recent assignment to which Lessor has consented, or as it exists   immediately prior to said transaction or transactions constituting such   reduction, at whichever time said Net Worth of Lessee was or is greater,   shall be considered an assignment of this Lease by Lessee to which Lessor may   reasonably withhold its consent. “Net Worth of Lessee” for purposes of this   Lease shall be the net worth of Lessee (excluding any Guarantors) established   under generally accepted accounting principles consistently applied. (d) An   assignment or subletting of Lessee’s interest in this Lease without Lessor’s   specific prior written consent shall, at Lessor’s option, be a Default   curable after notice per Paragraph 13.1, or a non-curable Breach without the   necessity of any notice and grace period. If Lessor elects to treat such   unconsented to assignment or subletting as a non-curable Breach, Lessor shall   have the right to either: (i) terminate this Lease, or (ii) upon thirty (30)   days’ written notice (“Lessor’s Notice”), increase the monthly Base Rent for   the Premises to the greater of the then lair market rental value of the   Premises, as reasonably determined by Lessor, or one hundred ten percent   (110%) of the Base Rent then in effect. Pending determination of the new fair   market rental value, If disputed by Lessee, Lessee shall pay the amount set   forth in Lessor’s Notice, with any overpayment credited against the next   Installment(s) of Base Rent coming due, and any underpayment for the period   retroactively to the effective date of the adjustment being due and payable   immediately upon the determination thereof. Further, in the event of such   Breach and rental adjustment, (i) the purchase price of any option to   purchase the Premises held by Lessee shall be subject to similar adjustment   to the then fair market value as reasonably determined by Lessor (without the   Lease being considered an encumbrance or any deduction for depreciation or   obsolescence, and considering the Premises at its highest and best use and in   good condition) or one hundred ten percent (110%) of the price previously in   effect, (ii) any index-oriented rental or price adjustment formulas contained   in this Lease shall be adjusted to require that the base index be determined   with reference to the index applicable to the time of such adjustment, and   (iii) any fixed rental adjustments scheduled during the remainder of the   Lease term shall be increased in the same ratio as the new rental bears to   the Base Rent in effect immediately prior to the adjustment specified in   Lessor’s Notice. (e) Lessee’s remedy for any breach of this Paragraph 12.1 by   Lessor shall be limited to compensatory damages and/or injunctive relief.   12.2 Terms and Conditions Applicable to Assignment and Subletting. (a)   Regardless of Lessor’s consent, any assignment or subletting shall not (i) be   effective without the express written assumption by such assignee or   sublessee of the obligations of Lessee under this Lease, (ii) release Lessee   of any obligations hereunder, nor (iii) alter the primary liability of Lessee   for the payment of Base Rent and other sums due Lessor hereunder or for the   performance of any other obligations to be performed by Lessee under this   Lease. (b) Lessor may accept any rent or performance of Lessee’s obligations   from any person other than Lessee pending approval or disapproval of an   assignment. Neither a delay in the approval or disapproval of such assignment   nor the acceptance of any rent for performance shall constitute a waiver or   estoppel of Lessor’s right to exercise its remedies for the Default or Breach   by Lessee of any of the terms, covenants or conditions of this Lease. (c) The   consent of Lessor to any assignment or subletting shall not constitute   consent to any subsequent assignment or subletting by Lessee or to any subsequent   or successive assignment or subletting by the assignee or sublessee. However,   Lessor may consent to subsequent subletting and assignments of the sublease   or any amendments or modifications thereto without notifying Lessee or anyone   else liable under this Lease or the sublease and without obtaining their   consent, and such action shall not relieve such persons from liability under   this Lease or the sublease.    MULTI-TENANT–GROSS Initials: © American Industrial Real Estate   Association 1993 —6— 

 

 

    

 

 (d) In the event of any Default or Breach of   Lessee’s obligation under this Lease, Lessor may proceed directly against   Lessee, any Guarantors or anyone else responsible for the performance of the   Lessee’s obligations under this Lease, including any sublessee, without first   exhausting Lessor’s remedies against any other person or entity responsible   therefor to Lessor, or any security held by Lessor. (e) Each request for   consent to an assignment or subletting shall be in writing, accompanied by   information relevant to Lessor’s determination as to the financial and   operational responsibility and appropriateness of the proposed assignee or   sublessee, including but not limited to the intended use and/or required   modification of the Premises, if any, together with a non-refundable deposit   of $1,000 or ten percent (10%) of the monthly Base Rent applicable to the   portion of the Premises which is the subject of the proposed assignment or   sublease, whichever is greater, as reasonable consideration for Lessor’s   considering and processing the request for consent. Lessee agrees to provide   Lessor with such other or additional information and/or documentation as may   be reasonably requested by Lessor. (f) Any assignee of, or sublessee under,   this Lease shall, by reason of accepting such assignment or entering into   such sublease, be deemed, for the benefit of Lessor, to have assumed and   agreed to conform and comply with each and every term, covenant, condition   and obligation herein to be observed or performed by Lessee during the term   of said assignment or sublease, other than such obligations as are contrary   to or inconsistent with provisions of an assignment or sublease to which   Lessor has specifically consented in writing. (g) The occurrence of a transaction   described in Paragraph 12.2(c) shall give Lessor the right (but not the   obligation) to require that the Security Deposit be increased by an amount   equal to six (6) times the then monthly Base Rent, and Lessor may make the   actual receipt by Lessor of the Security Deposit increase a condition to   Lessor’s consent to such transaction. (h) Lessor, as a condition to giving   its consent to any assignment or subletting, may require that the amount and   adjustment schedule of the rent payable under this Lease be adjusted to what   is then the market value and/or adjustment schedule for property similar to   the Premises as then constituted, as determined by Lessor. 12.3 Additional   Terms and Conditions Applicable to Subletting. The following terms and   conditions shall apply to any subletting by Lessee of all or any part of the   Premises and shall be deemed included in all subleases under this Lease   whether or not expressly incorporated therein: (a) Lessee hereby assigns and   transfers to Lessor all of Lessee’s interest in all rentals and income   arising from any sublease of all or a portion of the Premises 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 Breach (as defined in Paragraph 13.1) shall occur in the   performance of Lessee’s obligations under this Lease, Lessee may, except as   otherwise provided in this Lease, receive, collect and enjoy the rents   accruing under such sublease. Lessor shall not, by reason of the foregoing   provision 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 Breach exists in the performance of Lessee’s   obligations under this Lease, to pay to Lessor the rents and other charges   due and to become due under the sublease. Sublessee shall rely upon any such   statement and request from Lessor and shall pay such rents and other charges   to Lessor without any obligation or right to inquire as to whether such   Breach exists and notwithstanding any notice from or claim from Lessee to the   contrary. Lessee shall have no right or claim against such sublessee, or,   until the Breach has been cured, against Lessor, for any such rents and other   charges so paid by said sublessee to Lessor. (b) In the event of a Breach by   Lessee 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   the sublease under such sublease from the time of the exercise of said option   to the expiration of such sublease; provided, however, Lessor shall not be   liable for any prepaid rents or security deposit paid by such sublessee to   such sublessor or for any other prior defaults or breaches of such sublessor   under such sublease. (c) Any matter or thing requiring the consent of the   sublessor under a sublease shall also require the consent of Lessor herein.   (d) No sublessee under a sublease approved by Lessor shall further assign or   sublet all or any part of the Premises without Lessor’s prior written   consent. (e) Lessor shall deliver a copy of any notice of Default or Breach   by Lessee to the sublessee, who shall have the right to cure the Default of   Lessee within the grace period, if any, specified in such notice. The   sublessee shall have a right of reimbursement and offset from and against   Lessee for any such Defaults cured by the sublessee. 13. Default; Breach;   Remedies. 13.1 Default; Breach. Lessor and Lessee agree that if an attorney   is consulted by Lessor in connection with a Lessee Default or Breach (as   hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence   for legal services and costs in the preparation and service of a notice of   Default, and that Lessor may include the cost of such services and costs in   said notice as rent due and payable to cure said default. A “Default” by   Lessee is defined as a failure by Lessee to observe, comply with or perform any   of the terms, covenants, conditions or rules applicable to Lessee under this   Lease. A “Breach” by Lessee is defined as the occurrence of any one or more   of the following Defaults, and, where a grace period for cure after notice is   specified herein, the failure by Lessee to cure such Default prior to the   expiration of the applicable grace period, and shall entitle Lessor to pursue   the remedies set forth in Paragraphs 13.2 and/or 13.3: (a) The vacating of   the Premises without the intention to reoccupy same, or the abandonment of   the Premises. (b) Except as expressly otherwise provided in this Lease, the   failure by Lessee to make any payment of Base Rent, Lessee’s Share of Common   Area Operating Expenses, or any other monetary payment required to be made by   Lessee hereunder as and when due, the failure by Lessee to provide Lessor   with reasonable evidence of insurance or surety bond required under this   Lease, or the failure of Lessee to fulfill any obligation under this Lease   which endangers or threatens life or property, where such failure continues   for a period of three (3) days following written notice thereof by or on   behalf of Lessor to Lessee. (c) Except as expressly otherwise provided in   this Lease, the failure by Lessee to provide Lessor with reasonable written   evidence (in duly executed original form, if applicable) of (i) compliance   with Applicable Requirements per Paragraph 6.3, (ii) the inspection,   maintenance and service contracts required under Paragraph 7.1(b), (iii) the   rescission of an unauthorized assignment or subletting per Paragraph 12.1,   (iv) a Tenancy Statement per Paragraphs 16 or 37, (v) the subordination or   non-subordination of this Lease per Paragraph 30, (vi) the guaranty of the   performance of Lessee’s obligations under this Lease if required under   Paragraphs 1.11 and 37, (vii) the execution of any document requested under   Paragraph 42 (easements), or (viii) any other documentation or information   which Lessor may reasonably require of Lessee under the terms of this lease,   where any such failure continues for a period of ten (10) days following   written notice by or on behalf of Lessor to Lessee. (d) A Default by Lessee   as to the terms, covenants, conditions or provisions of this Lease, or of the   rules adopted under Paragraph 40 hereof that are to be observed, complied   with or performed by Lessee, other than those described in Subparagraphs   13.1(a), (b) or (c), above, where such Default continues for a period of   thirty (30) days after written notice thereof by or on behalf of Lessor to Lessee;   provided, however, that if the nature of Lessee’s Default is such that more   than thirty (30) days are reasonably required for its cure, then it shall not   be deemed to be a Breach of this Lease by Lessee if Lessee commences such   cure within said thirty (30) day period and thereafter diligently prosecutes   such cure to completion. (e) The occurrence of any of the following events:   (i) the making by Lessee of any general arrangement or assignment for the   benefit of creditors; (ii) Lessee’s becoming a “debtor” as defined in 11 U.S.   Code Section 101 or any successor statute thereto (unless, in the case of a   petition filed against Lessee, the same is dismissed within sixty (60) days);   (iii) the appointment of a trustee or receiver to take possession of substantially   all of Lessee’s assets located at the Premises or of Lessee’s interest in   this Lease, where possession is not restored to Lessee within thirty (30)   days; or (iv) the attachment, execution or other judicial seizure of   substantially all of Lessee’s assets located at the Premises or of Lessee’s   interest in this Lease, where such seizure is not discharged within thirty   (30) days; provided, however, in the event that any provision of this   Subparagraph 13.1(e) is contrary to any applicable law, such provision shall   be of no force or effect, and shall not affect the validity of the remaining   provisions. (f) The discovery by Lessor that any financial statement of   Lessee or of any Guarantor, given to Lessor by Lessee or any Guarantor, was   materially false. (g) If the performance of Lessee’s obligations under this   Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a   Guarantor’s liability with respect to this Lease other than in accordance   with the terms of such guaranty, (iii) a Guarantor’s becoming insolvent or   the subject of a bankruptcy filing, (iv) a Guarantor’s refusal to honor the   guaranty, or (v) a Guarantor’s breach of its guaranty obligation on an   anticipatory breach basis, and Lessee’s failure, within sixty (60) days   following written notice by or on behalf of Lessor to Lessee of any such   event, to provide Lessor with written alternative assurances of security,   which, when coupled with the then existing resources of Lessee, equals or   exceeds the combined financial resources of Lessee and the Guarantors that   existed at the time of execution of this Lease. 13.2 Remedies. If Lessee   fails to perform any affirmative duty or obligation of Lessee under this   Lease, within ten (10) days after written notice to Lessee (or in case of an   emergency, without notice), Lessor may at its option (but without obligation   to do so), perform such duty or obligation on Lessee’s behalf, including but   not limited to the obtaining of reasonably required bonds, insurance   policies, or governmental licenses, permits or approvals. The costs and   expenses of any such performance by Lessor shall be due and payable by Lessee   to Lessor upon invoice therefor. If any check given to Lessor by Lessee shall   not be honored by the bank upon which it is drawn, Lessor, at its own option,   may require all future payments to be made under this Lease by Lessee to be   made only by cashier’s check. In the event of a Breach of this Lease by   Lessee (as defined in Paragraph 13.1), with or without further notice or   demand, and without limiting Lessor in the exercise of any right or remedy   which Lessor may have by reason of such Breach, Lessor may: (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: (i) the worth at the time of   award of the unpaid rent which had been earned at the time of termination;   (ii) the worth at the time of award of the amount by which the unpaid rent   which would have been earned after termination until the time of award   exceeds the amount of such rental loss that the Lessee proves could have been   reasonably avoided; (iii) the worth at the time of award of the amount by   which the unpaid rent for the balance of the term after the time of award   exceeds the amount of such rental loss that the Lessee proves could be   reasonably avoided; and (iv) any other amount necessary to compensate Lessor   for all the detriment proximately caused by the Lessee’s failure to perform   its obligations under this Lease or which in the ordinary course of things   would be likely to result therefrom, including but not limited to the cost of   recovering possession of the Premises, expenses of reletting, including   necessary renovation and alteration of the Premises, reasonable attorney’s   fees, and that portion of any leasing commission paid by Lessor in connection   with this Lease applicable to the unexpired term of this Lease. The worth at   the time of award of the amount referred to in provision (iii) of the   immediately preceding sentence shall be computed by discounting such amount   at the discount rate of the Federal Reserve Bank of San Francisco or the   Federal Reserve Bank District in which the Premises are located at the time   of award plus one percent (1%). Efforts by Lessor to mitigate damages caused   by Lessee’s Default or Breach of this Lease shall not waive Lessor’s right to   recover damages under this Paragraph 13.2. If termination of this Lease is   obtained through the provisional remedy of unlawful detainer, Lessor shall   have the right to recover in such proceeding    MULTI-TENANT–GROSS Initials: © American Industrial Real Estate   Association 1993 —7— 

    

 

ceeding the   unpaid rent and damages as are recoverable therein, or Lessor may reserve the   right to recover all or any part thereof in a separate suit for such rent   and/or damages. If a notice and grace period required under Subparagraph   13.1(b), (c) or (d) was not previously given, a notice to pay rent or quit,   or to perform or quit, as the case may be, given to Lessee under any statute   authorizing the forfeiture of leases for unlawful detainer shall also   constitute the applicable notice for grace period purposes required by   Subparagraph 13.1(b),(c) or (d). In such case, the applicable grace period   under the unlawful detainer statue shall run concurrently after the one such   statutory notice, and the failure of Lessee to cure the Default within the   greater of the two (2) such grace periods shall constitute both an unlawful   detainer and a Breach of this Lease entitling Lessor to the remedies provided   for in this Lease and/or by said statute. (b) Continue the Lease and Lessee’s   right to possession in effect (in California under California Civil Code   Section 1951.4) after Lessee’s Breach and recover the rent as it becomes due,   provided Lessee has the right to sublet or assign, subject only to reasonable   limitations. Lessor and Lessee agree that the limitations on assignment and   subletting in this Lease are reasonable. Acts of maintenance or preservation,   efforts to relet the Premises, or the appointment of a receiver to protect   the Lessor’s interest under this Lease, shall not constitute a termination of   the Lessee’s right to possession. (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. (d) The expiration or termination of   this Lease and/or the termination of Lessee’s right to possession shall not   relieve Lessee from liability under any indemnity provisions of this Lease as   to matters occurring or accruing during the term hereof or by reason of   Lessee’s occupancy of the Premises. 13.3 Inducement Recapture In Event of Breach.   Any agreement by Lessor for free or abated rent or other charges applicable   to the Premises, or for the giving or paying by Lessor to or for Lessee of   any cash or other bonus, inducement or consideration for Lessee’s entering   into this Lease, all of which concessions are hereinafter referred to as   “Inducement Provisions” shall be deemed conditioned upon Lessee’s full and   faithful performance of all of the terms; covenants and conditions of this   Lease to be performed or observed by Lessee during the term hereof as the   same may be extended. Upon the occurrence of a Breach (as defined in   Paragraph 13.1) of this Lease by Lessee, any such Inducement Provision shall   automatically be deemed deleted from this Lease and of no further force or   effect, and any rent, other charge, bonus, inducement or consideration   theretofore abated, given or paid by Lessor under such an Inducement   Provision shall be immediately due and payable by Lessee to Lessor, and   recoverable by Lessor, as additional rent due under this Lease,   notwithstanding any subsequent cure of said Breach by Lessee. The acceptance   by Lessor of rent or the cure of the Breach which initiated the operation of   this Paragraph 13.3 shall not be deemed a waiver by Lessor of the provisions   of this Paragraph 13.3 unless specifically so stated in writing by Lessor at   the time of such acceptance. 13.4 Late Charges. Lessee hereby acknowledges   that late payment by Lessee to Lessor of rent and 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 upon Lessor by the terms of any ground lease, mortgage or   deed of trust covering the Premises. Accordingly, if any installment of rent   or other sum due from Lessee shall not be received by Lessor or Lessor’s   designee within fifteen (15) 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 six percent (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 or Breach 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 Base Rent, then   notwithstanding Paragraph 4.1 or any other provision of this Lease to the   contrary, Base Rent shall, at Lessor’s option, become due and payable   quarterly in advance. 13.5 Breach by Lessor. Lessor shall not be deemed in   breach of this Lease unless Lessor fails within a reasonable time to perform   an obligation required to be performed by Lessor. For purposes of this   Paragraph 13.5, a reasonable time shall in no event be less than thirty (30)   days after receipt by Lessor, and by any Lender(s) whose name and address   shall have been furnished to Lessee in writing for such purpose, of written   notice specifying wherein such obligation of Lessor has not been performed;   provided, however, that if the nature of Lessor’s obligation is such that   more than thirty (30) days after such notice are reasonably required for its   performance, then Lessor shall not be in breach of this Lease if performance   is commenced within such thirty (30) day period and thereafter diligently   pursued to completion. 14. Condemnation. If the Premises or any portion   thereof are taken under the power of eminent domain or sold under the threat   of the exercise of said power (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 (10%) of the floor area of the Premises, or more   than twenty-five percent (25%) of the portion of the Common Areas designated   for Lessee’s parking, is taken by condemnation, Lessee may, at Lessee’s   option, to be exercised in writing within ten (10) days after Lessor shall   have given Lessee written notice of such taking (or in the absence of such   notice, within ten (10) days after the condemning authority shall have taken   possession) terminate this Lease as of the date the condemning authority   takes such possession. If Lessee does not terminate this Lease in accordance   with the foregoing, this Lease shall remain in full force and effect as to   the portion of the Premises remaining, except that the Base Rent shall be   reduced in the same proportion as the rentable floor area of the Premises   taken bears to the total rentable floor area of the Premises. No reduction of   Base Rent shall occur if the condemnation does not apply to any portion of   the Premises. 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 of value of the leasehold or for   the taking of the fee, or as severance damages; provided, however, that Lessee   shall be entitled to any compensation, separately awarded to Lessee for   Lessee’s relocation expenses and/or loss of Lessee’s Trade Fixtures. In the   event that this Lease is not terminated by reason of such condemnation,   Lessor shall to the extent of its net severance damages received, over and   above Lessee’s Share of the legal and other expenses incurred by Lessor in   the condemnation matter, repair any damage to the Premises caused by such   condemnation authority. Lessee shall be responsible for the payment of any   amount in excess of such net severance damages required to complete such   repair. 15. Brokers’ Fees. 15.1 Procuring Cause. The Broker(s) named in   Paragraph 1.10 is/are the procuring cause of this Lease. 15.2 Additional   Terms. Unless Lessor and Broker(s) have otherwise agreed in writing, Lessor   agrees that: (a) if Lessee exercises any Option (as defined in Paragraph   39.1) granted under this Lease or any Option subsequently granted, or (b) if   Lessee acquires any rights to the Premises or other premises in which Lessor   has an interest, or (c) if Lessee remains in possession of the Premises with   the consent of Lessor after the expiration of the term of this Lease after   having failed to exercise an Option, or (d) if said Brokers are the procuring   cause of any other lease or sale entered into between the Parties pertaining   to the Premises and/or any adjacent property in which Lessor has an interest,   or (e) if Base Rent is increased, whether by agreement or operation of an   escalation clause herein, then as to any of said transactions. Lessor shall   pay said Broker(s) a fee in accordance with the schedule of said Broker(s) in   effect at the time of the execution of this Lease. 15.3 Assumption of   Obligations. Any buyer or transferee of Lessor’s interest 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. Each Broker   shall be an intended third party beneficiary of the provisions of Paragraph   1.10 and of this Paragraph 15 to the extent of its interest in any commission   arising from this Lease and may enforce that right directly against Lessor   and its successors. 15.4 Representations and Warranties. Lessee and Lessor   each represent and warrant to the other that it has had no dealings with any   person, firm, broker or finder other than as named in Paragraph 1.10(a) in   connection with the negotiation of this Lease and/or the consummation of the   transaction contemplated hereby, and that no broker or other person, firm or   entity other than said named Broker(s) is entitled to any commission or   finder’s fee in connection with said transaction. Lessee and Lessor do each   hereby agree to indemnify, protect, defend and hold the other harmless from   and against liability for compensation or charges which may be claimed by any   such unnamed broker, finder or other similar party by reason of any dealings   or actions of the Indemnifying Party, including any costs, expenses, and/or   attorneys’ fees reasonably incurred with respect thereto. 16. Tenancy and   Financial Statements. 16.1 Tenancy Statement. Each Party (as “Responding   Party”) shall within ten (10) days after written notice from the other Party   (the “Requesting Party”) execute, acknowledge and deliver to the Requesting   Party a statement in writing in a form similar to the then most current   “Tenancy Statement” form published by the American Industrial Real Estate   Association, plus such additional information, confirmation and/or statements   as may be reasonably requested by the Requesting Party. 16.2 Financial   Statement. If Lessor desires to finance, refinance, or sell the Premises or   the Building, or any part thereof, Lessee and all Guarantors shall deliver to   any potential lender or purchaser designated by Lessor such financial statements   of Lessee and such Guarantors as may be reasonably required by such lender or   purchaser, including but not limited to Lessee’s financial statements for the   past three (3) years. All such financial statements shall be received by   Lessor and such lender or purchaser in confidence and shall be used only for   the purposes herein set forth. 17. Lessor’s Liability. The term “Lessor” as   used herein shall mean the owner or owners at the time in question of the fee   title to the Premises. In the event of a transfer of Lessor’s title or   interest in the Premises or in this Lease, Lessor shall deliver to the   transferee or assignee (in cash or by credit) any unused Security Deposit   held by Lessor at the time of such transfer or assignment. Except as provided   in Paragraph 15.3, upon such transfer or assignment and delivery of the   Security Deposit, as aforesaid, the prior Lessor shall be relieved of all   liability with respect to the obligations and/or covenants under this Lease   thereafter to be performed by the Lessor. Subject to the foregoing, the   obligations and/or covenants in this Lease to be performed by the Lessor   shall be binding only upon the Lessor as hereinabove defined. 18.   Severability. The invalidity of any provision of this Lease, as determined by   a court of competent jurisdiction, shall in no way affect the validity of any   other provision hereof. 19. Interest on Past-Due Obligations. Any monetary   payment due Lessor hereunder, other than late charges, not received by Lessor   within ten (10) days following the date on which it was due, shall bear   interest from the date due at the prime rate charged by the largest state   chartered bank in the state in which the Premises are located plus four   percent (4%) per annum, but not exceeding the maximum rate allowed by law, in   addition to the potential late charge provided for in Paragraph 13.4. 20.   Time of Essence. Time is of the essence with respect to the performance of   all obligations to be performed or observed by the Parties under this Lease.   21. Rent Defined. All monetary obligations of Lessee to Lessor under the   terms of this Lease are deemed to be rent. 22. No Prior or other Agreements;   Broker Disclaimer. This Lease contains all agreements between the Parties   with respect to any matter mentioned herein, and no other prior or   contemporaneous agreement or understanding shall be effective. Lessor and   Lessee each represents and warrants to the Brokers that it has made, and is   relying solely upon, its own investigation as to the nature, quality,   character and financial responsibility of the other Party to this Lease and   as to the nature, quality and character of the Premises. Brokers have no   responsibility with respect thereto or with respect to any default or breach   hereof by either Party. Each Broker shall be an intended third party   beneficiary of the provisions of this Paragraph 22.  MULTI-TENANT–GROSS Initials: © American   Industrial Real Estate Association 1993 —8— 

    

 

23. Notices.   23.1 Notice Requirements. All notices required or permitted by this Lease   shall be in writing and may be delivered in person (by hand or by messenger   or courier service) or may be sent by regular, certified or registered mail   or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile   transmission during normal business hours, and shall be deemed sufficiently   given if served in a manner specified in this Paragraph 23. The addresses   noted adjacent to a Party’s signature on this Lease shall be that Party’s   address for delivery or mailing of notice purposes. Either Party may by   written 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 the purpose of mailing or delivering   notices to Lessee. 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   written notice to Lessee. 23.2 Date of Notice. Any notice sent by registered   or certified mail, return receipt requested, shall be deemed given on the   date of delivery shown on the receipt card, or if no delivery date is shown,   the postmark thereon. If sent by regular mail, the notice shall be deemed   given forty-eight (48) hours after the same is addressed as required herein   and mailed with postage prepaid. Notices delivered by United States Express   Mail or overnight courier that guarantees next day delivery shall be deemed   given twenty-four (24) hours after delivery of the same to the United States   Postal Service or courier. If any notice is transmitted by facsimile   transmission or similar means, the same shall be deemed served or delivered   upon telephone or facsimile confirmation of receipt of the transmission   thereof, provided a copy is also delivered via delivery or mail. If notice is   received on a Saturday or a Sunday or a legal holiday, it shall be deemed   received on the next business day. 24. Waivers. No waiver by Lessor of the   Default or Breach of any term, covenant or condition hereof by Lessee, shall   be deemed a waiver of any other term, covenant or condition hereof, or of any   subsequent Default or Breach by Lessee of the same or any other term,   covenant or condition hereof. Lessor’s consent to, or approval of, any such   act shall not be deemed to render unnecessary the obtaining of Lessor’s   consent to, or approval of, any subsequent or similar act by Lessee, or be   construed as the basis of an estoppel to enforce the provision or provisions of   this Lease requiring such consent. Regardless of Lessor’s knowledge of a   Default or Breach at the time of accepting rent, the acceptance of rent by   Lessor shall not be a waiver of any Default or Breach by Lessee of any   provision hereof. Any payment given Lessor by Lessee may be accepted by   Lessor on account of moneys or damages due Lessor, notwithstanding any   qualifying statements or conditions made by Lessee in connection therewith,   which such statements and/or conditions shall be of no force or effect whatsoever   unless specifically agreed to in writing by Lessor at or before the time of   deposit of such payment. 25. Recording. Either Lessor or Lessee shall, upon   request of the other, execute, acknowledge and deliver to the other a short   form memorandum of this Lease for recording purposes. The Party requesting   recordation shall be responsible for payment of any fees or taxes applicable   thereto. 26. No Right To Holdover. Lessee has no right to retain possession   of the Premises or any part thereof beyond the expiration or earlier   termination of this Lease. In the event that Lessee holds over in violation   of this Paragraph 26 then the Base Rent payable from and after the time of   the expiration or earlier termination of this Lease shall be increased to two   hundred percent (200%) of the Base Rent applicable during the month   immediately preceding such expiration or earlier termination. Nothing   contained herein shall be construed as a consent by Lessor to any holding   over by Lessee. 27. Cumulative Remedies. No remedy or election hereunder   shall be deemed exclusive but shall, wherever possible, be cumulative with   all other remedies at law or in equity. 28. Covenants and Conditions. All   provisions of this Lease to be observed or performed by Lessee are both   covenants and conditions. 29. Binding Effect; Choice of Law. This Lease shall   be binding upon the Parties, their personal representatives, successors and   assigns and be governed by the laws of the State in which the Premises are   located. Any litigation between the Parties hereto concerning this Lease   shall be initiated in the county in which the Premises are located. 30.   Subordination; Attornment; Non-Disturbance. 30.1 Subordination. This Lease   and any Option granted hereby shall be subject and subordinate to any ground   lease, mortgage, deed of trust, or other hypothecation or security device   (collectively, “Security Device”), now or hereafter placed by Lessor upon the   real property of which the Premises are a part, to any and all advances made   on the security thereof, and to all renewals, modifications, consolidations,   replacements and extensions thereof. Lessee agrees that the Lenders holding   any such Security Device shall have no duty, liability or obligation to   perform any of the obligations of Lessor under this Lease, but that in the   event of Lessor’s default with respect to any such obligation, Lessee will   give any Lender whose name and address have been furnished Lessee in writing   for such purpose notice of Lessor’s default pursuant to Paragraph 13.5. If   any Lender shall elect to have this Lease and/or any Option granted hereby   superior to the lien of its Security Device and shall give written notice   thereof to Lessee, this Lease and such Options shall be deemed prior to such   Security Device, notwithstanding the relative dates of the documentation or   recordation thereof. 30.2 Attornment. Subject to the non-disturbance   provisions of Paragraph 30.3, Lessee agrees to attorn to a Lender or any   other party who acquires ownership of the Premises by reason of a foreclosure   of a Security Device, and that in the event of such foreclosure, such new   owner shall not: (i) be liable for any act or omission of any prior lessor or   with respect to events occurring prior to acquisition of ownership, (ii) be   subject to any offsets or defenses which Lessee might have against any prior   lessor, or (iii) be bound by prepayment of more than one month’s rent. 30.3   Non-Disturbance. With respect to Security Devices entered into by Lessor   after the execution of this lease, Lessee’s subordination of this Lease shall   subject to receiving assurance (a “non-disturbance agreement”) from the   Lender that Lessee’s possession and this Lease, including any options to   extend the term hereof, will not be disturbed so long as Lessee is not in   Breach hereof and attorns to the record owner of the Premises. 30.4   Self-Executing. The agreements contained in this Paragraph 30 shall be   effective without the execution of any further documents; provided, however,   that upon written request from Lessor or a Lender in connection with a sale,   financing or refinancing of Premises, Lessee and Lessor shall execute such   further writings as may be reasonably required to separately document any   such subordination or non-subordination, attornment and/or non-disturbance   agreement as is provided for herein. 31. Attorneys’ Fees. If any Party or   Broker brings an action or proceeding to enforce the terms hereof or declare   rights hereunder, the Prevailing Party (as hereafter defined) in any such   proceeding, action, or appeal thereon, shall be entitled to reasonable   attorneys’ fees. Such fees may be awarded in the same suit or recovered in a   separate suit, whether or not such action or proceeding is pursued to   decision or judgment. The term “Prevailing Party” shall include, without   limitation, a Party or Broker who substantially obtains or defeats the relief   sought, as the case may be, whether by compromise, settlement, judgment, or   the abandonment by the other Party or Broker of its claim or defense. The   attorneys’ fee award shall not be computed in accordance with any court fee   schedule, but shall be such as to fully reimburse all attorneys’ fees   reasonably incurred. Lessor shall be entitled to attorneys’ fees, costs and   expenses incurred in preparation and service of notices of Default and   consultations in connection therewith, whether or not a legal action is   subsequently commenced in connection with such Default or resulting Breach.   Broker(s) shall be intended third party beneficiaries of this Paragraph 31.   32. Lessor’s Access; Showing Premises; Repairs. Lessor and Lessor’s agents   shall have the right to enter the Premises at any time, in the case of an   emergency, and otherwise at reasonable times for the purpose of showing the   same to prospective purchasers, lenders, or lessees, and making such   alterations, repairs, improvements or additions to the Premises or to the   Building, as Lessor may reasonably deem necessary. Lessor may at any time   place on or about the Premises or Building any ordinary “For Sale” signs and   Lessor may at any time during the last one hundred eighty (180) days of the   term hereof place on or about the Premises any ordinary “For Lease” signs.   All such activities of Lessor shall be without abatement of rent or liability   to Lessee. 33. Auctions. Lessee shall not conduct, nor permit to be   conducted, either voluntarily or involuntarily, any auction upon the Premises   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 exterior of the   Premises or the Building, except that Lessee may, with Lessor’s prior written   consent, install (but not on the roof) such signs as are reasonably required   to advertise Lessee’s own business so long as such signs are in a location   designated by Lessor and comply with Applicable Requirements and the signage   criteria established for the Industrial Center by Lessor. The installation of   any sign on the Premises by or for Lessee shall be subject to the provisions   of Paragraph 7 (Maintenance, Repairs, Utility Installations, Trade Fixtures   and Alterations). Unless otherwise expressly agreed herein, Lessor reserves   all rights to the use of the roof of the Building, and the right to install   advertising signs on the Building, including the roof, which do not   unreasonably interfere with the conduct of Lessee’s business; Lessor shall be   entitled to all revenues from such advertising signs. 35. Termination;   Merger. Unless specifically stated otherwise in writing by Lessor, the   voluntary or other surrender of this Lease by Lessee, the mutual termination   or cancellation hereof, or a termination hereof by Lessor for Breach by   Lessee, shall automatically terminate any sublease or lesser estate in the   Premises; provided, however, Lessor shall, in the event of any such   surrender, termination or cancellation, have the option to continue any one   or all of any existing subtenancies. Lessor’s failure within ten (10) days   following any such event to make a written election to the contrary by   written notice to the holder of any such lesser interest shall constitute   Lessor’s election to have such event constitute the termination of such   interest. 36. Consents. (a) Except for Paragraph 33 hereof (Auctions) or as   otherwise provided herein, wherever in this Lease the consent of a Party is   required to an act by or for the other Party, such consent shall not be   unreasonably withheld or delayed. Lessor’s actual reasonable costs and   expenses (including but not limited to architects’, attorneys’, engineers’   and other consultants’ fees) incurred in the consideration of, or response   to, a request by Lessee for any Lessor consent pertaining to this Lease or the   Premises, including but not limited to consents to an assignment a subletting   or the presence or use of a Hazardous Substance, shall be paid by Lessee to   Lessor upon receipt of an invoice and supporting documentation therefor. In   addition to the deposit described in Paragraph 12.2(e), Lessor may, as a   condition to considering any such request by Lessee, require that Lessee   deposit with Lessor an amount of money (in addition to the Security Deposit   held under Paragraph 5) reasonably calculated by Lessor to represent the cost   Lessor will incur in considering and responding to Lessee’s request. Any   unused portion of said deposit shall be refunded to Lessee without interest.   Lessor’s consent to any act, assignment of this Lease or subletting of the   Premises by Lessee shall not constitute an acknowledgment that no Default or   Breach by Lessee of this Lease exists, nor shall such consent be deemed a   waiver of any then existing Default or Breach, except as may be otherwise   specifically stated in writing by Lessor at the time of such consent. (b) All   conditions to Lessor’s consent authorized by this Lease are acknowledged by   Lessee as being reasonable. The failure to specify herein any particular   condition to Lessor’s consent shall not preclude the impositions by Lessor at   the time of consent of such further or other conditions as are then   reasonable with reference to the particular matter for which consent is being   given. 37. Guarantor. 37.1 Form of Guaranty. If there are to be any   Guarantors of this Lease per Paragraph 1.11. the form of the guaranty to be   executed by each such Guarantor shall be in the form most recently published   by the American Industrial Real Estate Association, and each such Guarantor   shall have the same obligations as Lessee under this lease, including but not   limited to the obligation to provide the Tenancy Statement and information   required in Paragraph 16.    MULTI-TENANT—GROSS Initials: © American Industrial Real Estate   Association 1993 —9— 

    

 

 37.2 Additional Obligations of Guarantor. It   shall constitute a Default of the Lessee under this Lease if any such   Guarantor fails or refuses, upon reasonable request by Lessor to give: (a)   evidence of the due execution of the guaranty called for by this Lease,   including the authority of the Guarantor (and of the party signing on   Guarantor’s behalf) to obligate such Guarantor on said guaranty, and   resolution of its board of directors authorizing the making of such guaranty,   together with a certificate of incumbency showing the signatures of the   persons authorized to sign on its behalf, (b) current financial statements of   Guarantor as may from time to time be requested by Lessor, (c) a Tenancy   Statement, or (d) written confirmation that the guaranty is still in effect.   38. Quiet Possession. Upon payment by Lessee of the rent for the Premises and   the performance of all of the covenants, conditions and provisions on   Lessee’s part to be observed and performed under this Lease, Lessee shall   have quiet possession of the Premises for the entire term hereof subject to   all of the provisions of this Lease. 39. Options. 39.1 Definition. As used in   this Lease, the word “Option” has the following meaning: (a) the right 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; (b) the 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 property of Lessor or   the right of first offer to lease other property of Lessor; (c) the right to   purchase the Premises, or the right of first refusal to purchase the   Premises, or the right of first offer to purchase the Premises, or the right   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 to Original Lessee. Each   Option granted to Lessee in this Lease is personal to the original Lessee   named in Paragraph 1.1 hereof, and cannot be voluntarily or involuntarily   assigned or exercised by any person or entity other than said original Lessee   while the original Lessee is in full and actual possession of the Premises   and without the intention of thereafter assigning or subletting. The Options,   if any, herein granted to Lessee are not assignable, either as a part of an   assignment of this Lease or separately or apart therefrom, and no Option may   be separated from this Lease in any manner, 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   Options to extend or renew this Lease have been validly 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 period commencing with the giving of any notice of Default   under Paragraph 13.1 and continuing until the noticed Default is cured, or   (ii) during the period of time any monetary obligation due Lessor from Lessee   is unpaid (without regard to whether notice thereof is given Lessee), or   (iii) during the time Lessee is in Breach of this Lease, or (iv) in the event   that Lessor has given to Lessee three (3) or more notices of separate   Defaults under Paragraph 13.1 during the twelve (12) month period immediately   preceding the exercise of the Option, whether or not the Defaults are cured.   (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) Lessor gives to Lessee three (3) or more notices   of separate Defaults under Paragraph 13.1 during any twelve (12) month   period, whether or not the Defaults are cured, or (iii) if Lessee commits a   Breach of this Lease. 40. Rules and Regulations. Lessee agrees that it will   abide by, and keep and observe all reasonable rules and regulations (“Rules   and Regulations”) which Lessor may make from time to time for the management,   safety, care, and cleanliness of the grounds, the parking and unloading of   vehicles and the preservation of good order, as well as for the convenience   of other occupants or tenants of the Building and the Industrial Center and   their invitees. 41. Security Measures. Lessee hereby acknowledges that the   rental payable to Lessor hereunder does not include the cost of guard service   or other security measures, and that Lessor shall have no obligation   whatsoever to provide same. Lessee assumes all responsibility for the protection   of the Premises, Lessee, its agents and invitees and their property from the   acts of third parties. 42. Reservations: Lessor reserves the right, from time   to time, to grant, without the consent or joinder of Lessee, such easements,   rights of way, utility raceways, and dedications that Lessor deems necessary,   and to cause the recordation of parcel maps and restrictions, so long as such   easements, rights of way, utility raceways, dedications, maps and   restrictions do not reasonably interfere with the use of the Premises by   Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to   effectuate any such easement rights, dedication, map or restrictions. 43.   Performance Under Protest. If at any time a dispute shall arise as to any amount   or sum of money to be paid by one Party to the other under the provisions   hereof, the Party against whom the obligation to pay the money is asserted   shall have the right to make payment “under protest” and such payment shall   not be regarded as a voluntary payment and there shall survive the right on   the part of said Party to institute suit for recovery of such sum. If it   shall be adjudged that there was no legal obligation on the part of said   Party to pay such sum or any part thereof, said Party shall be entitled to   recover such sum or so much thereof as it was not legally required to pay   under the provisions of this Lease. 44. Authority. If either Party hereto 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 its behalf. If   Lessee is a corporation, trust or partnership, Lessee shall, within thirty   (30) days after request by Lessor, deliver to Lessor evidence satisfactory to   Lessor of such authority. 45. Conflict. Any conflict between the printed   provisions of this Lease and the typewritten or handwritten provisions shall   be controlled by the typewritten or handwritten provisions. 46. Offer. Preparation   of this Lease by either Lessor or Lessee or Lessor’s agent or Lessee’s agent   and submission of same to Lessee or Lessor shall not be deemed an offer to   lease. This Lease is not intended to be binding until executed and delivered   by all Parties hereto. 47. Amendments. This Lease may be modified only in   writing, signed by the parties in interest at the time of the modification.   The Parties shall amend this Lease from time to time to reflect any   adjustments that are made to the Base Rent or other rent payable under this   Lease. As long as they do not materially change Lessee’s obligations   hereunder, Lessee agrees to make such reasonable non-monetary modifications   to this Lease as may be reasonably required by an institutional insurance   company or pension plan Lender in connection with the obtaining of normal   financing or refinancing of the property of which the Premises are a part.   48. Multiple Parties. Except as otherwise expressly provided herein, if more   than one person or entity is named herein as either Lessor or Lessee, the   obligations of such multiple parties shall be the joint and several   responsibility of all persons or entities named herein as such Lessor or   Lessee. 53. Lessor will grant to Lessee the right to put in a pathway between   their current facility and these premises.    MULTI-TENANT–GROSS Initials: © American Industrial Real Estate   Association 1993 —10— 

    

 

LESSOR AND   LESSEE HAVE CAREFULLY HEAD AND REVIEWED THIS LEASE AND EACH TERM AND   PROVISION CONTAINED HEREIN. AND BY THE EXECUTION OF THIS LEASE SHOW THEIR   INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE   TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY   REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH   RESPECT TO THE PREMISES IF THIS LEASE HAS BEEN FILLED IN. IT HAS BEEN   PREPARED FOR YOUR ATTORNEY'S REVIEW AND APPROVAL FURTHER. EXPERTS SHOULD BE   CON¬SULTED TO EVALUATE THE CONDITION OF THE PROPERTY FOR THE POSSIBLE   PRESENCE OF ASBESTOS. UNDERGROUND STORAGE TANKS OR HAZ¬ARDOUS SUBSTANCES. NO   REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL   ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKERS OR THEIR CONTRACTORS, AGENTS   OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSE¬QUENCES   OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY   SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX   CONSEQUENCES OF THIS LEASE. IF THE SUBJECT PROPERTY IS IN A STATE OTHER THAN   CALIFORNIA. AN ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED SHOULD   BE CONSULTED. The parlies hereto have executed this Lease al the place and on   the dales specified above their respective signatures Torrance, California   Torrance, California By LESSOR: 2720 MONTEREY STREET, LLC, a California^   LESSEE: EMMAUS MEDICAL, INC., a Delaware Limited LiarxLlity Company   Corporation  Name Printed: Steven P.   Fechner Title. Manager of LLC Bv: Name Primed Title: Address 357 Van Ness   Way, Suite 100 Torrance, CA 90501 Telephone:) 310) 533-SQnn Facsimile:! 31Q   533-0775 BftOKCRr  

  . , Name Printed: Willis Lee Title: C.O.O.   Bv: Name Printed: Tide:, By: Name Prinleil:_ Title: Bv: Name l*rinleil:_   Title: By: Address: B»: Name Printed: Title: 1 elepliunc: ( ) Fnrsimile: ( )   Address NOTE: These forms are often modified to meet changing requirements of   law and needs of the industry Always wtite or call to make sure you are utilizing   the mosl current lorrn AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION. 345 So   Figueroa Si, M-1, Los Angeles. CA 90071 (213) 687-8777 SIGNATURE REQUIRED SEE   "**" ABOVE MULTI-TENANT—GROSS ©American Industrial Real Estate   Association 1993 

    

 

49 ADDENDUM   49.a Trash: I essor shall arrange for a trash collection service for all   tenants on Ihe premises of which the Premises are a pait Lessee shall pay its   proportionate sliaie of the tiasli collection charges based on the   proportionate amount of building space occupied and trash deposited in the   common trash containeis by Lessee, as determined by Lessor. The fee to Lessee   for liash collection shall be $ 25.00 per month which may be increased if it   is determined that the fee charged is insufficient to remove Lessee's trash,   or if trasli rales ate increased Lessee shall not deposit any household trash   or olher trash not specifically created in the normal course of operating its   business No hazardous substances shall be disposed of in the trash bins or   anywhere on the premises All trash must be placed into Hie containers 49.b   This lease is subject to all matters of record affecting the leal piopeity of   which the Piemises are a part, including without limitation, covenants,   conditions, restrictions, reservations, rights of way, easements and   exceptions, whether existing or heieafler created 49 c Subleasing: If Lessee,   with Lessor's consent, as required by this Lease, enters into a sublease of   the entire Premises, and if Lessee receives from the Sublessee, rent or other   consideration, either initially or over the term of the sublease, in excess   of the tent due Lessor under the Lease, of if Lessee enters into a sublease   of less than the entire Premises and receives from Ihe Sublessee rent or   other consideration in excess of the rent due Lessor under this Lease fairly   allocable to the poition of the Premises so subleased after appropriate   adjustments to assure that all olher payments called for under this Lease are   appiopiiately taken into account, then in either such event, Lessee shall pay   to Lessor, as additional rent, one half of the excess rent or other   consideration so received by Lessee from the Sublessee Such payment shall be   made by Lessee to Lessor within ten (10) days following receipt by Lessee from   its Sublessee of payment of such excess rent oi olher consideration A fully   executed copy of all subleases must be given to Lessor by Lessee 49 d CPI   Adjustment (s) (CPI): On February 1, 2018 and February 1, 2019 (each such day   lieieinaftei referred to as an "Adjustment Dale"), the Ltese Rent   payable by Lessee shall be adjusted by the increase in the Consumer Price   Index (C P I) through the applicable Adjustment Date. The increase shall be   calculated as follows: the Base Rent scheduled for payment by Lessee   immediately prior to the applicable Adjustment Dale shall be multiplied by a   fraction, the numerator of which shall be the CPI of the calendar month that   is three (3) months prior to the applicable Adjustment Date, and the   denominator of which shall be the C P I in effect three (3) months prior to   the lasl Adjustment Date If there has been no previous Adjustment Date during   the lease (or current lease extension), the lease (or current lease   extension) Commencement Date shall be used 1 he sum so calculated shall   constitute the Base Rent until the next Adjustment Date, but in no event   shall the Base Rent payable by Lessee be reduced. Lessor's failure to lequest   payment of an estimated or actual rent adjustment shall not constitute a   waiver of the right to any adjustment provided for in tins Lease The index   used shall be Ihe Consumer Price Index of the Bureau of Labor Statistics of   the United Slates Department of Labor for Uiban Consumers Los   Angeles-Anaheim-Riverside, California (1982-1984 = 100), "All Items In   Ihe event the compilation and/or publication of the C.P.I, shall be   transferred to any other governmental department or bureau or agency or shall   be discontinued, then the Index most nearly the same as this CPI. shall be   used to make such calculations In the event that Lessor and Lessee cannot   agiee on such alternative Index, then the matter shall be submitted for   decision to American Arbitration Association in Los Angeles in accordance   with the then current rules of said Association, and the decision of the   aibitiator shall be binding upon the parties The cost of said arbitrator   shall be paid equally by Lessor and Lessee 49 e Public Sales: Merchandise   sold on the Piemises shall not be sold on a retail basis to the general   public. No auctions, warehouse, garage, clearance, or any other type of sale   to the general public is allowed on the Premises without the written consent   of Lessor and any required governmental peimits 49 f Confidentiality: Lessee   agrees to maintain the confidentiality of the terms of this Lease, and not to   disclose such terms to any other occupants of the Pioject 49.g Delay in   Possession Notwithstanding paragraph 3 3, if the Commencement Date is delayed   two (2) weeks or more, there shall be a corresponding shift in the ending   date of Ihe lease If the Commencement Date is delayed less than (2) weeks,   the ending dale shall remain unchanged 49 I) Security Cameras Any   Lessoi-supplied notices on Ihe buildings regarding security cameras, and   auy-Lessor supplied cameras themselves are intended as a thett deterrent only   Lessor-supplied cameras are not operational Lessee is responsible for   informing its employees, agents, contractors, visitors, etc that   Lessor-supplied cameras should not be relied upon for safety or security 49 i   Surrender/Restoration: In addition to the terms and conditions of Paragraph 7   4(c). upon vacating the premises, I essee shall shampoo the carpeting, clean   Ihe reslrooms and remove all debris Should Lessee elect not to perform these   tasks, Lessor shall do so and charge a reasonable fee for this service. 49j   Civil Code 1938 Disclosure This property has not been inspected by a   Certified Access Specialist INITIALS />*—• (FumiOl Rev 6 1-13) 

    

 

1 Mo siijn.   placard, picture, advertisement, name, or notice shall ho inscribed,   displayed, printed or affixed In any part of Hie outside or inside of Hie   Industrial Center without the prior consent of Lessor. Lessor shall have Hit*   right to remove any unaiilhori?ed sign. placard, picture, advertisement, name   or notice, at the expense of, Lessee. All approved siijns or lettering on   doors shall he printed, painted, affixed or inscribed at the expense of   Lessee by a person approved by Lessor. Lessee shall not place anything. or   allow anything \0 lie placed, near the glass or any window, door, partition   or wall which may appear unsightly from outside the Premises, as determined   by Lessor. I essce shall not, without prior wiillen consent of Lessor,   olheiwise sunscieen any window. All signs must be maintained in good condition   at I essee's expense, or I essor may remove the signs at lessee's expense 2.   I lie sidewalks, halls, passages, exits, entrances, and stairways shall not   be obstructed by any of the Lessees or used by them for any oilier purpose   oilier than for ingress and egress to and fiom their respective Premises 3 I   essee shall not alter any lock or install any new or additional locks or any   bolls on any doors or windows of Hie Premises without prior consent of I   essor, and shall provide I essor wilh copies of any new enliy keys 1 he   toilet rooms, urinals, wash bowls and other apparatus shall not he used for   any purpose other than that for which they were constructed, and no foreign   substance of any kind whatsoever shall he thrown therein The expense of any   breakage, stoppage or damage resulting from the violation of this rule by   Lessee, Lessee's employees, or visitors, shall he borne by the Lessee. Lessee   shall not overload the floor of Hie Premises of in any way deface the   Premises or any part thereof G. Lessee shall not use, keep or permit to be   used or kepi any foul or noxious gas or subslance in the Premises, or permit   or suffer Hie Premises to be occupied or used in a manner offensive or   objectionable to the I essor or other oecupanls of the Industrial Center by reason   of noise, odors and/or vibrations, or inleileie in any way wilh older I   essees or those having business therein. 7 No animals or birds be brought in   or kept in or aboul the Premises or the Business Center. Lesser! shall nol   use or keep in Ihe Premises or the Duikling any kerosene, gasoline or   flammable or combustible Moid or material, or use any method of healing or   air conditioning oilier than thai supplied by Lessor Lessor will direct   electricians as to wheio and how lelephoue and telegraph wires aie to he   iulinduced into the building No boring or culling Wires will he allowed   without the consent of Ihe I essor 1 he location of telephones, call boxes   and other office equipment afhxed to Ihe Premises shall lie subject lo the   approval of I essor. Lessor reserved the right lo exclude or expel from the   luilosliial Center any person who, in Ihe judgment of Lessor, is intoxicated   or under Ihe influence of liguui or drugs, or who shall in any manner do any   act in violation of any of Ihe rules and regulations of ihe Industrial Center   111 essee shall not disturb, solicit, or canvass any occupant of the   Industiial Center ami shall cooper ale to prevenl same 12. Wilbuul Ihe   written consent of Lessor, I essee shall not use the name of the Industrial   Center in connection with or in promoting or advertising Ihe business of   Lessee except as Lessee's addiess. 13 No contact paper or wallpaper of any   type may bo applied anywhere without Lessor's wiillen permission, including   Ihe application lo any walls, cabinets, doors, etc. The expense of returning   Ihe premises to its original condition if this clause is violated will be   deducted from the security deposit 14. Lessee shall not, without Ihe consent   of Lessor, park vehicles or store ovornighl in Ihe common areas of the Industrial   Center. Vehicles in violation will be lower I without notice In I essee al   Lessee's expense 15 I essee and I essee's employees, customers, agents, and   conttactors shall observe all normal vehicle codes while at the Industiial   Ceutei and will not diive their vehicles in excess of 5 miles per hour while   on the premises I essee shall be responsible for enforcing these rules with   its employees, customers, agents, and couliacfors 10 I Jo cooking shall he   done or perm il lei I by any Lessee Oil the Premises, exccpl for a microwave,   nor shall the Premises Ire used for Hie storage of nieicliandise in office   spaces, (or washing clolhes, for lodging, or any improper, objectionable or   immoral purposes INITIALS: 

    

 

URF MANAGEMENT,   INC 357 Van Ness Way, Suite 100, Torrance. California 90501 Post Office Box   3217. Torrance, California 90510-3217 Phone (310)533-5900 Fax (310)533-0775   www.surfrnanagement.com Scale 1/8" - V Date of drawing 01-09-15 Date of   revision 00-00-00 MONTEREY BUSINESS PARK 2711 Monterey Street Suite 503   Torrance, California 90503

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