{"id":41902,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/butterfield-boulevard-morgan-hill-ca-lease-butterfield.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"butterfield-boulevard-morgan-hill-ca-lease-butterfield","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/land\/butterfield-boulevard-morgan-hill-ca-lease-butterfield.html","title":{"rendered":"Butterfield Boulevard (Morgan Hill, CA) Lease – Butterfield Technology Park LLC and Integrated Defense Technologies Inc."},"content":{"rendered":"BASIC PROVISIONS (\"BASIC PROVISIONS\").\n\n1.1 PARTIES: This Lease (\"LEASE\"), dated for reference purposes only\n JANUARY 4, ____ ,___ is made by and between BUTTERFIELD TECHNOLOGY\n PARK LLC (\"LESSOR\") and INTEGRATED DEFENSE TECHNOLOGIES, INC., A \n DELAWARE CORPORATION (\"LESSEE\"), (collectively the \"PARTIES\" or \n individually a \"PARTY\").\n\n1.2(a) Premises: That certain portion of the Project (as defined below),\n including all improvements therein or to be provided by Lessor under\n the terms of this Lease, commonly known by the street address of\n BUTTERFIELD BOULEVARD , located in the City of MORGAN HILL, County of\n SANTA CLARA, State of CALIFORNIA, with zip code 95037,as outlined on\n Exhibit A attached hereto (\"PREMISES\") and generally described as\n (describe briefly the nature of the Premises): APPROXIMATELY 52,100\n SQUARE FEET OF RESEARCH DEVELOPMENT SPACE IN A LARGER COMPLEX OF 85,300\n SQUARE FEET. In addition to Lessee's rights to use and occupy the\n Premises as hereinafter specified, Lessee shall have non-exclusive\n rights to the Common Areas (as defined in Paragraph 2.7 below) as\n hereinafter specified, but shall not have any rights to the roof,\n exterior walls or utility raceways of the building containing the\n Premises (\"BUILDING\") or to any other buildings in the Project. The\n Premises, the Building, the Common Areas, the land upon which they are\n located, along with all other buildings and improvements thereon, are\n herein collectively referred to as the \"PROJECT.\" (See also Paragraph\n 2)\n\n1.2(b) PARKING: 143 unreserved vehicle parking spaces (\"UNRESERVED PARKING\n SPACES\"), and -0- reserved vehicle parking spaces (\"RESERVED PARKING\n SPACES\"). (See also Paragraph 2.6)\n\n1.3 TERM: FIVE years and -0- months (\"ORIGINAL TERM\") commencing JULY 1,\n 2001 (\"COMMENCEMENT DATE\") and ending JUNE 30, 2006 (\"EXPIRATION \n DATE\") (See also Paragraph 3)\n\n1.4 Early Possession: N\/A (\"Early Possession Date\"). (See also Paragraphs\n 3.2 and 3.3)\n\n1.5 BASE RENT: $83,360.00 per month (\"BASE RENT\"), payable on the 1ST day\n of each month commencing JULY 1, 2001 *ADDENDUM PARAGRAPH #8 . (See\n also Paragraph 4) \/x\/ If this box is checked, there are provisions\n in this Lease for the Base Rent to be adjusted.\n\n1.6 LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES: SIXTY-ONE percent\n (61%). (\"LESSEE'S SHARE\").\n\n1.7 BASE RENT AND OTHER MONIES PAID UPON EXECUTION:\n\n (a) BASE RENT: $83,360.00 for the period JULY 1, 2001 THROUGH JULY\n 31, 2001\n (b) COMMON AREA OPERATING EXPENSES: $9,360.00 for the period\n (c) SECURITY DEPOSIT: $N\/A (\"SECURITY DEPOSIT\"). (See also \n Paragraph 5)\n (d) OTHER: $250,080.00* FOR LETTER OF CREDIT - SEE ADDENDUM, \n PARAGRAPH #7\n (e) TOTAL DUE UPON EXECUTION OF THIS LEASE: $83,360.00\n\n1.8 AGREED USE. GENERAL OFFICE, RESEARCH & DEVELOPMENT, MANUFACTURING AND\n STORAGE . (See also paragraph 6)\n\n1.9 INSURING PARTY. Lessor is the \"INSURING PARTY\". (See also Paragraph 8)\n\n1.10 REAL ESTATE BROKERS: (See also Paragraph 15)\n\n (a) REPRESENTATION: The following real estate brokers (the\n \"BROKERS\") and brokerage relationships exist in this transaction (check\n applicable boxes): \n\n\n Page 1 of 26\n\n\n\/X\/ COLLIERS INTERNATIONAL represents Lessor exclusively (\"LESSOR'S\n BROKER\");\n\n\/X\/ THE FREEMAN GROUP & COLLIERS INTERNATIONAL represents Lessee\n exclusively (\"LESSEE'S BROKER\"); or\n\n\/X\/ COLLIERS INTERNATIONAL represents both Lessor and Lessee (\"DUAL\n AGENCY\").\n\n (b) PAYMENT TO BROKERS: Upon execution and delivery of this\n Lease by both Parties, Lessor shall pay to the Brokers the brokerage\n fee agreed to in a separate written agreement (or if there is no such\n agreement, the sum of __ or __% of the total Base Rent for the\n brokerage services rendered by the Brokers).\n\n 1.11 GUARANTOR. The obligations of the Lessee under this Lease are\n to be guaranteed by N\/A (\"GUARANTOR\"). (See also Paragraph 37)\n\n\n 1.12 ADDENDA AND EXHIBITS. Attached hereto is an Addendum or Addenda\nconsisting of Paragraphs 1 _ through 8 and Exhibits A _ through __ all of which\nconstitute a part of this Lease.\n\n2. PREMISES.\n\n 2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases\nfrom Lessor, the Premises, for the term, at the rental, and upon all of the\nterms, covenants and conditions set forth in this Lease. Unless otherwise\nprovided herein, any statement of size set forth in this Lease, or that may have\nbeen used in calculating Rent, is an approximation which the Parties agree is\nreasonable and any payments based thereon are not subject to revision whether or\nnot the actual size is more or less.\n\n 2.2 CONDITION. Lessor shall deliver that portion of the Premises \ncontained within the Building (\"UNIT\") to Lessee broom clean and free of \ndebris on the Commencement Date or the Early Possession Date, whichever first \noccurs (\"START DATE\"), and, so long as the required service contracts \ndescribed in Paragraph 7.1(b) below are obtained by Lessee and in effect \nwithin thirty days following the Start Date, warrants that the existing \nelectrical, plumbing, fire sprinkler, lighting, heating, ventilating and air \nconditioning systems (\"HVAC\"), loading doors, if any, and all other such \nelements in the Unit, other than those constructed by Lessee, shall be in \ngood operating condition on said date and that the structural elements of the \nroof, bearing walls and foundation of the Unit shall be free of material \ndefects. If a non-compliance with such warranty exists as of the Start Date, \nor if one of such systems or elements should malfunction or fail within the \nappropriate warranty period, Lessor shall, as Lessor's sole obligation with \nrespect to such matter, except as otherwise provided in this Lease, promptly \nafter receipt of written notice from Lessee setting forth with specificity \nthe nature and extent of such non-compliance, malfunction or failure, rectify \nsame at Lessor's expense. The warranty periods shall be as follows: (i) 6 \nmonths as to the HVAC systems, and six (6) months as to the remaining systems \nand other elements of the Unit. If the manufacturing warranty or the \ncontractors warranty is longer than six (6) months said warranty benefits \nshall be passed through to Lessee. If Lessee does not give Lessor the \nrequired notice within the appropriate warranty period, correction of any \nsuch non-compliance, malfunction or failure shall be the obligation of Lessee \nat Lessee's sole cost and expense (except for the repairs to the fire \nsprinkler systems, roof, foundations, and\/or bearing walls - see Paragraph 7)\n\n 2.3 COMPLIANCE. Lessor warrants that the improvements on the Premises\nand the Common Areas comply with the building codes that were in effect at the\ntime that each such improvement, or portion thereof, was constructed, and also\nwith all applicable laws, covenants or restrictions of record, regulations, and\nordinances in effect on the Start Date (\"APPLICABLE REQUIREMENTS\"). Said\nwarranty does not apply to the use to which Lessee will put the Premises or to\nany Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made\nor to be made by Lessee. NOTE: LESSEE IS RESPONSIBLE FOR DETERMINING WHETHER OR\nNOT THE APPLICABLE REQUIREMENTS, AND ESPECIALLY THE ZONING, ARE APPROPRIATE FOR\nLESSEE'S INTENDED USE, AND ACKNOWLEDGES THAT PAST USES OF THE PREMISES MAY NO\nLONGER BE ALLOWED. If the Premises do not comply with said warranty, Lessor\nshall, except as otherwise provided, promptly after receipt of written notice\nfrom Lessee setting forth with specificity the nature and extent of such\nnon-compliance, rectify the same at Lessor's expense. If Lessee does not give\nLessor written notice of a non-compliance with this warranty within 6 months\nfollowing the Start Date, correction of that non-compliance shall be the\nobligation of Lessee at Lessee's sole cost and expense. If the Applicable\nRequirements are hereafter changed so as to require during the term of this\nLease the construction of an addition to or an alteration of the Unit, Premises\nand\/or Building, the remediation of any Hazardous Substance, or the\nreinforcement or other physical modification of the Unit, Premises and\/or\nBuilding (\"CAPITAL EXPENDITURE\"), Lessor and Lessee shall allocate the cost of\nsuch work as follows:\n\n (a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are\nrequired as a result of the specific and unique use of the Premises by Lessee as\ncompared with uses by tenants in general, Lessee shall be fully responsible for\nthe cost thereof, provided, however that if such Capital Expenditure is required\nduring the last 2 years of this Lease and the cost thereof exceeds 6 months'\nBase Rent, Lessee may instead terminate this Lease unless Lessor notifies\nLessee, in writing, within 10 days after receipt of Lessee's termination notice\nthat Lessor has elected to pay the difference between the actual cost thereof\nand the amount equal to 6 months' Base Rent. If Lessee elects termination,\nLessee shall immediately cease the use of the Premises which requires such\nCapital Expenditure and deliver to Lessor written notice specifying a\ntermination date at least 90 days thereafter. Such termination date shall,\nhowever, in no event be earlier than the last day that Lessee could legally\nutilize the Premises without commencing such Capital Expenditure.\n\n (b) If such Capital Expenditure is not the result of the specific and\nunique use of the Premises by Lessee (such as, governmentally mandated seismic\nmodifications), then Lessor and Lessee shall allocate the obligation to pay for\nthe portion of such costs reasonably attributable to the Premises pursuant to\nthe formula set out in Paragraph 7.1(d); provided, however, that if such Capital\nExpenditure is required during the last 2 years of this Lease or if Lessor\nreasonably determines that it is not economically feasible to pay its share\nthereof, Lessor shall have the option to terminate this Lease upon 90 days poor\nwritten notice to Lessee\n\n\n\n\nunless Lessee notifies Lessor, in writing, within 10 days after receipt of\nLessor's termination notice that Lessee will pay for such Capital Expenditure.\nIf Lessor does not elect to terminate, and fails to tender its share of any such\nCapital Expenditure, Lessee may advance such funds and deduct same, with\nInterest, from Rent until Lessor's share of such costs have been fully paid. If\nLessee is unable to finance Lessor's share, or if the balance of the Rent due\nand payable for the remainder of this Lease is not sufficient to fully reimburse\nLessee on an offset basis, Lessee shall have the right to terminate this Lease\nupon 30 days written notice to Lessor.\n\n (c) Notwithstanding the above, the provisions concerning Capital\nExpenditures are intended to apply only to non-voluntary, unexpected, and new\nApplicable Requirements. If the Capital Expenditures are instead triggered by\nLessee as a result of an actual or proposed change in use, change in intensity\nof use, or modification to the Premises then, and in that event. Lessee shall be\nfully responsible for the cost thereof, and Lessee shall not have any right to\nterminate this Lease.\n\n 2.4 ACKNOWLEDGEMENTS. Lessee acknowledges that: (a) it has been advised\nby Lessor and\/or Brokers to satisfy itself with respect to the condition of the\nPremises (including but not limited to the electrical, HVAC and fire sprinkler\nsystems, security, environmental aspects, and compliance with Applicable\nRequirements and the Americans with Disabilities Act), and their suitability for\nLessee's intended use, (b) Lessee has made such investigation as it deems\nnecessary with reference to such matters and assumes all responsibility therefor\nas the same relate to its occupancy of the Premises, and (c) neither Lessor,\nLessor's agents, nor Brokers have made any oral or written representations or\nwarranties with respect to said matters other than as set forth in this Lease.\nIn addition, Lessor acknowledges that: (i) Brokers have made no representations,\npromises or warranties concerning Lessee's ability to honor the Lease or\nsuitability to occupy the Premises, and (ii) it is Lessor's sole responsibility\nto investigate the financial capability and\/or suitability of all proposed\ntenants.\n\n 2.5 LESSEE AS PRIOR OWNER\/OCCUPANT. The warranties made by Lessor in\nParagraph 2 shall be of no force or effect if immediately prior to the Start\nDate Lessee was the owner or occupant of the Premises. In such event, Lessee\nshall be responsible for any necessary corrective work\n\n 2.6 VEHICLE PARKING. Lessee shall be entitled to use the number of\nUnreserved Parking Spaces and Reserved Parking Spaces specified in Paragraph\n1.2(b) on those portions of the Common Areas designated from time to time by\nLessor for parking. Lessee shall not use more parking spaces than said number.\nSaid parking spaces shall be used for parking by vehicles no larger than\nfull-size passenger automobiles or pick-up trucks, herein called \"PERMITTED SIZE\nVEHICLES.\" Lessor may regulate the loading and unloading of vehicles by adopting\nRules and Regulations as provided in Paragraph 2.9. No vehicles other than\nPermitted Size Vehicles may be parked in the Common Area without the prior\nwritten permission of Lessor.\n\n (a) Lessee shall not permit or allow any vehicles that belong to or are\ncontrolled by Lessee or Lessee's employees, suppliers, shippers, customers,\ncontractors or invitees to be loaded, unloaded, or parked in areas other than\nthose designated by Lessor for such activities.\n\n (b) Lessee shall not service or store any vehicles in the Common Areas.\n\n (c) If Lessee permits or allows any of the prohibited activities\ndescribed in this Paragraph 2.6, then Lessor shall have the right, without\nnotice, in addition to such other rights and remedies that it may have, to\nremove or tow away the vehicle involved and charge the cost to Lessee, which\ncost shall be immediately payable upon demand by Lessor.\n\n 2.7 COMMON AREAS - DEFINITION. The term \"Common Areas\" is defined as\nall areas and facilities outside the Premises and within the exterior boundary\nline of the Project and interior utility raceways and installations within the\nUnit that are provided and designated by the Lessor from time to time for the\ngeneral non-exclusive use of Lessor, Lessee and other tenants of the Project and\ntheir respective employees, suppliers, shippers, customers, contractors and\ninvitees, including parking areas, loading and unloading areas, trash areas,\nroadways, walkways, driveways and landscaped areas.\n\n 2.8 COMMON AREAS - LESSEE'S RIGHTS. Lessor grants to Lessee, for the\nbenefit of Lessee and its employees, suppliers, shippers, contractors, customers\nand invitees, during the term of this Lease, the non-exclusive right to use, in\ncommon with others entitled to such use, the Common Areas as they exist from\ntime to time, subject to any rights, powers, and privileges reserved by Lessor\nunder the terms hereof or under the terms of any rules and regulations or\nrestrictions governing the use of the Project. Under no circumstances shall the\nright herein granted to use the Common Areas be deemed to include the right to\nstore any property, temporarily or permanently, in the Common Areas. Any such\nstorage shall be permitted only by the prior written consent of Lessor or\nLessor's designated agent, which consent may be revoked at any time. In the\nevent that any unauthorized storage shall occur then Lessor shall have the\nright, without notice, in addition to such other rights and remedies that it may\nhave, to remove the property and charge the cost to Lessee, which cost shall be\nimmediately payable upon demand by Lessor.\n\n 2.9 COMMON AREAS - RULES AND REGULATIONS. Lessor or such other\nperson(s) as Lessor may appoint shall have the exclusive control and management\nof the Common Areas and shall have the right, from time to time, to establish,\nmodify, amend and enforce reasonable rules and regulations (\"RULES AND\nREGULATIONS\") for the management, safety, care, and cleanliness of the grounds,\nthe parking and unloading of vehicles and the preservation of good order, as\nwell as for the convenience of other occupants or tenants of the Building and\nthe Project and their invitees. Lessee agrees to abide by and conform to all\nsuch Rules and Regulations, and to cause its employees, suppliers, shippers,\ncustomers, contractors and invitees to so abide and conform. Lessor shall not be\nresponsible to Lessee for the non-compliance with said Rules and Regulations by\nother tenants of the Project.\n\n 2.10 COMMON AREAS - CHANGES. Lessor shall have the right, in Lessor's\nsole discretion, from time to time:\n\n\n\n\n\n (a) To make changes to the Common Areas, including, without limitation,\nchanges in the location, size, shape and number of driveways, entrances, parking\nspaces, parking areas, loading and unloading areas, ingress, egress, direction\nof traffic, landscaped areas, walkways and utility raceways;\n\n (b) To close temporarily any of the Common Areas for maintenance\npurposes so long as reasonable access to the Premises remains available;\n\n (c) To designate other land outside the boundaries of the Project to be\na part of the Common Areas;\n\n (d) To add additional buildings and improvements to the Common Areas;\n\n (e) To use the Common Areas while engaged in making additional\nimprovements, repairs or alterations to the Project, or any portion thereof; and\n\n (f) To do and perform such other acts and make such other changes in,\nto or with respect to the Common Areas and Project as Lessor may, in the\nexercise of sound business judgment, deem to be appropriate.\n\n3. TERM.\n\n 3.1 TERM. The Commencement Date, Expiration Date and Original Term of\nthis Lease are as specified in Paragraph 1.3.\n\n 3.2 EARLY POSSESSION. If Lessee totally or partially occupies the\nPremises prior to the Commencement Date, the obligation to pay Base Rent shall\nbe abated for the period of such early possession. All other terms of this Lease\n(including but not limited to the obligations to pay Lessee's Share of Common\nArea Operating Expenses, Real Property Taxes and insurance premiums and to\nmaintain the Premises) shall, however, be in effect during such period. Any such\nearly possession shall not affect the Expiration Date.\n\n 3.3 DELAY IN POSSESSION. Lessor agrees to use its best commercially\nreasonable efforts to deliver possession of the Premises to Lessee by the\nCommencement Date. If, despite said efforts, Lessor is unable to deliver\npossession as agreed, Lessor shall not be subject to any liability therefor, nor\nshall such failure affect the validity of this Lease. Lessee shall not, however,\nbe obligated to pay Rent or perform its other obligations until it receives\npossession of the Premises. If possession is not delivered within 60 days after\nthe Commencement Date, Lessee may, at its option, by notice in writing within 10\ndays after the end of such 60 day period, cancel this Lease, in which event the\nParties shall be discharged from all obligations hereunder. If such written\nnotice is not received by Lessor within said 10 day period, Lessee's right to\ncancel shall terminate. Except as otherwise provided, if possession is not\ntendered to Lessee by the Start Date and Lessee does not terminate this Lease,\nas aforesaid, any period of rent abatement that Lessee would otherwise have\nenjoyed shall run from the date of delivery of possession and continue for a\nperiod equal to what Lessee would otherwise have enjoyed under the terms hereof,\nbut minus any days of delay caused by the acts or omissions of Lessee. If\npossession of the Premises is not delivered within 4 months after the\nCommencement Date, this Lease shall terminate unless other agreements are\nreached between Lessor and Lessee, in writing.\n\n 3.4 LESSEE COMPLIANCE. Lessor shall not be required to tender\npossession of the Premises to Lessee until Lessee complies with its obligation\nto provide evidence of insurance (Paragraph 8.5). Pending delivery of such\nevidence, Lessee shall be required to perform all of its obligations under this\nLease from and after the Start Date, including the payment of Rent,\nnotwithstanding Lessor's election to withhold possession pending receipt of such\nevidence of insurance. Further, if Lessee is required to perform any other\nconditions prior to or concurrent with the Start Date, the Start Date shall\noccur but Lessor may elect to withhold possession until such conditions are\nsatisfied.\n\n4. RENT.\n\n 4.1 RENT DEFINED. All monetary obligations of Lessee to Lessor under\nthe terms of this Lease (except for the Security Deposit) are deemed to be rent\n(\"RENT\").\n\n 4.2 COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor during\nthe term hereof, in addition to the Base Rent, Lessee's Share (as specified in\nParagraph 1.6) of all Common Area Operating Expenses, as hereinafter defined,\nduring each calendar year of the term of this Lease, in accordance with the\nfollowing provisions:\n\n (a) \"COMMON AREA OPERATING EXPENSES\" are defined, for purposes of this\nLease, as all costs incurred by Lessor relating to the ownership and operation\nof the Project, including, but not limited to, the following:\n\n (i) The operation, repair and maintenance, in neat, clean,\n good order and condition of the following:\n\n (aa) The Common Areas and Common Area improvements, including\n parking areas, loading and unloading areas, trash areas, roadways,\n parkways, walkways, driveways, landscaped areas, bumpers, irrigation\n systems, Common Area lighting facilities, fences and gates, elevators,\n roofs, and roof drainage systems.\n (bb) Exterior signs and any tenant directories.\n (cc) Any fire detection and\/or sprinkler systems.\n (ii) The cost of water, gas, electricity and telephone to\n service the Common Areas and any utilities not separately \n metered.\n (iii) Trash disposal, pest control services, property\n management, security services, and the costs of any\n environmental inspections.\n\n\n (iv) Reserves set aside for maintenance and repair of Common \n Areas.\n (v) Real Property Taxes (as defined in Paragraph 10).\n (vi) The cost of the premiums for the insurance maintained by \n Lessor pursuant to Paragraph 8. \n (vii) Any deductible portion of an insured loss concerning the\n Building or the Common Areas \n (viii) The cost of any Capital Expenditure to the Building or\n the Project not covered under the provisions of Paragraph 2.3\n provided; however, that Lessor shall allocate the cost of any\n such Capital Expenditure over a 12 year period and Lessee\n shall not be required to pay more than Lessee's Share of\n 1\/144th of the cost of such Capital Expenditure in any given\n month.\n (ix) Any other services to be provided by Lessor that are\n stated elsewhere in this Lease to be a Common Area Operating \n Expense.\n\n (b) Any Common Area Operating Expenses and Real Property Taxes that are\nspecifically attributable to the Unit, the Building or to any other building in\nthe Project or to the operation, repair and maintenance thereof, shall be\nallocated entirely to such Unit, Building, or other building. However, any\nCommon Area Operating Expenses and Real Property Taxes that are not specifically\nattributable to the Building or to any other building or to the operation,\nrepair and maintenance thereof, shall be equitably allocated by Lessor to all\nbuildings in the Project.\n\n (c) The inclusion of the improvements, facilities and services set\nforth in Subparagraph 4.2(a) shall not be deemed to impose an obligation upon\nLessor to either have said improvements or facilities or to provide those\nservices unless the Project already has the same, Lessor already provides the\nservices, or Lessor has agreed elsewhere in this Lease to provide the same or\nsome of them.\n\n (d) Lessee's Share of Common Area Operating Expenses shall be payable\nby Lessee within 10 days after a reasonably detailed statement of actual\nexpenses is presented to Lessee. At Lessor's option, however, an amount may be\nestimated by Lessor from time to time of Lessee's Share of annual Common Area\nOperating Expenses and the same shall be payable monthly or quarterly, as Lessor\nshall designate, during each 12 month period of the Lease term, on the same day\nas the Base Rent is due hereunder. Lessor shall deliver to Lessee within 60 days\nafter the expiration of each calendar year a reasonably detailed statement\nshowing Lessee's Share of the actual Common Area Operating Expenses incurred\nduring the preceding year. If Lessee's payments under this Paragraph 4.2(d)\nduring the preceding year exceed Lessee's Share as indicated on such statement,\nLessor shall credit the amount of such over-payment against Lessee's Share of\nCommon Area Operating Expenses next becoming due. If Lessee's payments under\nthis Paragraph 4 2(d) during the preceding year were less than Lessee's Share as\nindicated on such statement, Lessee shall pay to Lessor the amount of the\ndeficiency within 10 days after delivery by Lessor to Lessee of the statement.\n\n 4.3 PAYMENT. Lessee shall cause payment of Rent to be received by\nLessor in lawful money of the United States, without offset or deduction (except\nas specifically permitted in this Lease), on or before the day on which it is\ndue. Rent for any period during the term hereof which is for less than one full\ncalendar month shall be prorated based upon the actual number of days of said\nmonth. Payment of Rent shall be made to Lessor at its address stated herein or\nto such other persons or place as Lessor may from time to time designate in\nwriting. Acceptance of a payment which is less than the amount then due shall\nnot be a waiver of Lessor's rights to the balance of such Rent, regardless of\nLessor's endorsement of any check so stating. In the event that any check,\ndraft, or other instrument of payment given by Lessee to Lessor is dishonored\nfor any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any\nlate charges which may be due.\n\n5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof the\nSecurity Deposit as security for Lessee's faithful performance of its\nobligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults\nunder this Lease, Lessor may use, apply or retain all or any portion of said\nSecurity Deposit for the payment of any amount due Lessor or to reimburse or\ncompensate Lessor for any liability, expense, loss or damage which Lessor may\nsuffer or incur by reason thereof. If Lessor uses or applies all or any portion\nof the Security Deposit, Lessee shall within 10 days after written request\ntherefor deposit monies with Lessor sufficient to restore said Security Deposit\nto the full amount required by this Lease. If the Base Rent increases during the\nterm of this Lease, Lessee shall, upon written request from Lessor, deposit\nadditional monies with Lessor so that the total amount of the Security Deposit\nshall at all times bear the same proportion to the increased Base Rent as the\ninitial Security Deposit bore to the initial Base Rent. Should the Agreed Use be\namended to accommodate a material change in the business of Lessee or to\naccommodate a sublessee or assignee, Lessor shall have the right to increase the\nSecurity Deposit to the extent necessary, in Lessor's reasonable judgment, to\naccount for any increased wear and tear that the Premises may suffer as a result\nthereof If a change in control of Lessee occurs during this Lease and following\nsuch change the financial condition of Lessee is, in Lessor's reasonable\njudgment, significantly reduced, Lessee shall deposit such additional monies\nwith Lessor as shall be sufficient to cause the Security Deposit to be at a\ncommercially reasonable level based on such change in financial condition.\nLessor shall not be required to keep the Security Deposit separate from its\ngeneral accounts. Within 14 days after the expiration or termination of this\nLease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and\notherwise within 30 days after the Premises have been vacated pursuant to\nParagraph 7 4(c) below, Lessor shall return that portion of the Security Deposit\nnot used or applied by Lessor. No part of the Security Deposit shall be\nconsidered to be held in trust, to bear interest or to be prepayment for any\nmonies to be paid by Lessee under this Lease.\n\n6. USE\n\n 6.1 USE. Lessee shall use and occupy the Premises only for the Agreed\nUse, or any other legal use which is reasonably comparable thereto, and for no\nother purpose. Lessee shall not use or permit the use of the Premises in a\nmanner that is unlawful, \n\n\n\ncreates damage, waste or a nuisance, or that disturbs occupants of or causes\ndamage to neighboring premises or properties. Lessor shall not unreasonably\nwithhold or delay its consent to any written request for a modification of the\nAgreed Use, so long as the same will not impair the structural integrity of the\nimprovements on the Premises or the mechanical or electrical systems therein,\nand\/or is not significantly more burdensome to the Premises. If Lessor elects to\nwithhold consent, Lessor shall within 7 days after such request give written\nnotification of same, which notice shall include an explanation of Lessor's\nobjections to the change in the Agreed Use.\n\n6.2 HAZARDOUS SUBSTANCES.\n\n (a) REPORTABLE USES REQUIRE CONSENT. The term \"HAZARDOUS SUBSTANCE\" as\nused in this Lease shall mean any product, substance, or waste whose presence,\nuse, manufacture, disposal, transportation, or release, either by itself or in\ncombination with other materials is expected to be on the Premises, is either:\n(i) potentially injurious to the public health, safety or welfare, the\nenvironment or the Premises, (ii) regulated or monitored by any governmental\nauthority, or (iii) a basis for potential liability of Lessor to any\ngovernmental agency or third party under any applicable statute or common law\ntheory. Hazardous Substances shall include, but not be limited to, hydrocarbons,\npetroleum, gasoline, and\/or crude oil or any products, by-products or fractions\nthereof. Lessee shall not engage in any activity in or on the Premises which\nconstitutes a Reportable Use of Hazardous Substances without the express prior\nwritten consent of Lessor and timely compliance (at Lessee's expense) with all\nApplicable Requirements. \"REPORTABLE USE\" shall mean (i) the installation or use\nof any above or below ground storage tank, (ii) the generation, possession,\nstorage, use, transportation, or disposal of a Hazardous Substance that requires\na permit from, or with respect to which a report, notice, registration or\nbusiness plan is required to be filed with, any governmental authority, and\/or\n(iii) the presence at the Premises of a Hazardous Substance with respect to\nwhich any Applicable Requirements requires that a notice be given to persons\nentering or occupying the Premises or neighboring properties. Notwithstanding\nthe foregoing, Lessee may use any ordinary and customary materials reasonably\nrequired to be used in the normal course of the Agreed Use, so long as such use\nis in compliance with all Applicable Requirements, is not a Reportable Use, and\ndoes not expose the Premises or neighboring property to any meaningful risk of\ncontamination or damage or expose Lessor to any liability therefor. In addition,\nLessor may condition its consent to any Reportable Use upon receiving such\nadditional assurances as Lessor reasonably deems necessary to protect itself,\nthe public, the Premises and\/or the environment against damage, contamination,\ninjury and\/or liability, including, but not limited to, the installation (and\nremoval on or before Lease expiration or termination) of protective\nmodifications (such as concrete encasements) and\/or increasing the Security\nDeposit.\n\n (b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable cause to\nbelieve, that a Hazardous Substance has come to be located in, on, under or\nabout the Premises, other than as previously consented to by Lessor, Lessee\nshall immediately give written notice of such fact to Lessor, and provide Lessor\nwith a copy of any report, notice, claim or other documentation which it has\nconcerning the presence of such Hazardous Substance.\n\n (c) LESSEE REMEDIATION. Lessee shall not cause or permit any Hazardous\nSubstance to be spilled or released in, on, under, or about the Premises\n(including through the plumbing or sanitary sewer system) and shall promptly, at\nLessee's expense, take all investigatory and\/or remedial action reasonably\nrecommended, whether or not formally ordered or required, for the cleanup of any\ncontamination of, and for the maintenance, security and\/or monitoring of the\nPremises or neighboring properties, that was caused or materially contributed to\nby Lessee, or pertaining to or involving any Hazardous Substance brought onto\nthe Premises during the term of this Lease, by or for Lessee, or any third\nparty.\n\n (d) LESSEE INDEMNIFICATION. Lessee shall indemnify, defend and hold\nLessor, its agents, employees, lenders and ground lessor, if any, harmless from\nand against any and all loss of rents and\/or damages, liabilities, judgments,\nclaims, expenses, penalties, and attorneys' and consultants' fees arising out of\nor involving any Hazardous Substance brought onto the Premises by or for Lessee,\nor any third party (provided, however, that Lessee shall have no liability under\nthis Lease with respect to underground migration of any Hazardous Substance\nunder the Premises from areas outside of the Project). Lessee's obligations\nshall include, but not be limited to, the effects of any contamination or injury\nto person, property or the environment created or suffered by Lessee, and the\ncost of investigation, removal, remediation, restoration and\/or abatement, and\nshall survive the expiration or termination of this Lease. No termination,\ncancellation or release agreement entered into by Lessor and Lessee shall\nrelease Lessee from its obligations under this Lease with respect to Hazardous\nSubstances, unless specifically so agreed by Lessor in writing at the time of\nsuch agreement.\n\n (e) LESSOR INDEMNIFICATION. Lessor and its successors and assigns shall\nindemnify, defend, reimburse and hold Lessee, its employees and lenders,\nharmless from and against any and all environmental damages, including the cost\nof remediation, which existed as a result of Hazardous Substances on the\nPremises prior to the Start Date or which are caused by the gross negligence or\nwillful misconduct of Lessor, its agents or employees. Lessor's obligations, as\nand when required by the Applicable Requirements, shall include, but not be\nlimited to, the cost of investigation, removal, remediation, restoration and\/or\nabatement, and shall survive the expiration or termination of this Lease.\n\n (f) INVESTIGATIONS AND REMEDIATIONS. Lessor shall retain the\nresponsibility and pay for any investigations or remediation measures required\nby governmental entities having jurisdiction with respect to the existence of\nHazardous Substances on the Premises prior to the Start Date, unless such\nremediation measure is required as a result of Lessee's use (including\n\"Alterations\", as defined in paragraph 7.3(a) below) of the Premises, in which\nevent Lessee shall be responsible for such payment. Lessee shall cooperate fully\nin any such activities at the request of Lessor, including allowing Lessor and\nLessor's agents to have reasonable access to the Premises at reasonable times in\norder to carry out Lessor's investigative and remedial responsibilities.\n\n\n\n\n (g) LESSOR TERMINATION OPTION. If a Hazardous Substance Condition (see\nParagraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally\nresponsible therefor (in which case Lessee shall make the investigation and\nremediation thereof required by the Applicable Requirements and this Lease shall\ncontinue in full force and effect, but subject to Lessor's rights under\nParagraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (i)\ninvestigate and remediate such Hazardous Substance Condition, if required, as\nsoon as reasonably possible at Lessor's expense, in which event this Lease shall\ncontinue in full force and effect, or (ii) if the estimated cost to remediate\nsuch condition exceeds 12 times the then monthly Base Rent or $100,000,\nwhichever is greater, give written notice to Lessee, within 30 days after\nreceipt by Lessor of knowledge of the occurrence of such Hazardous Substance\nCondition, of Lessor's desire to terminate this Lease as of the date 60 days\nfollowing the date of such notice. In the event Lessor elects to give a\ntermination notice, Lessee may, within 10 days thereafter, give written notice\nto Lessor of Lessee's commitment to pay the amount by which the cost of the\nremediation of such Hazardous Substance Condition exceeds an amount equal to 12\ntimes the then monthly Base Rent or $100,000, whichever is greater. Lessee shall\nprovide Lessor with said funds or satisfactory assurance thereof within 30 days\nfollowing such commitment. In such event, this Lease shall continue in full\nforce and effect, and Lessor shall proceed to make such remediation as soon as\nreasonably possible after the required funds are available. If Lessee does not\ngive such notice and provide the required funds or assurance thereof within the\ntime provided, this Lease shall terminate as of the date specified in Lessor's\nnotice of termination.\n\n 6.3 LESSEE'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as\notherwise provided in this Lease, Lessee shall, at Lessee's sole expense, fully,\ndiligently and in a timely manner, materially comply with all Applicable\nRequirements, the requirements of any applicable fire insurance underwriter or\nrating bureau, and the recommendations of Lessor's engineers and\/or consultants\nwhich relate in any manner to the Premises, without regard to whether said\nrequirements are now in effect or become effective after the Start Date. Lessee\nshall, within 10 days after receipt of Lessor's written request, provide Lessor\nwith copies of all permits and other documents, and other information evidencing\nLessee's compliance with any Applicable Requirements specified by Lessor, and\nshall immediately upon receipt, notify Lessor in writing (with copies of any\ndocuments involved) of any threatened or actual claim, notice, citation,\nwarning, complaint or report pertaining to or involving the failure of Lessee or\nthe Premises to comply with any Applicable Requirements.\n\n 6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's \"LENDER\" (as defined in\nParagraph 30) and consultants shall have the right to enter into Premises at any\ntime, in the case of an emergency, and otherwise at reasonable times, for the\npurpose of inspecting the condition of the Premises and for verifying compliance\nby Lessee with this Lease. The cost of any such inspections shall be paid by\nLessor, unless a violation of Applicable Requirements, or a contamination is\nfound to exist or be imminent, or the inspection is requested or ordered by a\ngovernmental authority. In such case, Lessee shall upon request reimburse Lessor\nfor the cost of such inspection, so long as such inspection is reasonably\nrelated to the violation or contamination.\n\n7. MAINTENANCE; REPAIRS, UTILITY INSTALLATIONS; TRADE FIXTURES AND \nALTERATIONS.\n\n 7.1 LESSEE'S OBLIGATIONS.\n\n (a) IN GENERAL. Subject to the provisions of Paragraph 2.2 (Condition),\n2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2\n(Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee\nshall, at Lessee's sole expense, keep the Premises, Utility Installations\n(intended for Lessee's exclusive use, no matter where located), and Alterations\nin good order, condition and repair (whether or not the portion of the Premises\nrequiring repairs, or the means of repairing the same, are reasonably or readily\naccessible to Lessee, and whether or not the need for such repairs occurs as a\nresult of Lessee's use, any prior use, the elements or the age of such portion\nof the Premises), including, but not limited to, all equipment or facilities,\nsuch as plumbing, HVAC equipment, electrical, lighting facilities, boilers,\npressure vessels, fixtures, interior walls, interior surfaces of exterior walls,\nceilings, floors, windows, doors, plate glass, and skylights but excluding any\nitems which are the responsibility of Lessor pursuant to Paragraph 7.2. Lessee,\nin keeping the Premises in good order, condition and repair, shall exercise and\nperform good maintenance practices, specifically including the procurement and\nmaintenance of the service contracts required by Paragraph 7.1(b) below.\nLessee's obligations shall include restorations, replacements or renewals when\nnecessary to keep the Premises and all improvements thereon or a part thereof in\ngood order, condition and state of repair.\n\n (b) SERVICE CONTRACTS. Lessee shall, at Lessee's sole expense, procure\nand maintain contracts, with copies to Lessor, in customary form and substance\nfor, and with contractors specializing and experienced in the maintenance of the\nfollowing equipment and improvements, if any, if and when installed on the\nPremises: (i) HVAC equipment, (ii) boiler and pressure vessels, (iii)\nclarifiers, and (iv) any other equipment, if reasonably required by Lessor.\nHowever, Lessor reserves the right, upon notice to Lessee, to procure and\nmaintain any or all of such service contracts, and if Lessor so elects, Lessee\nshall reimburse Lessor, upon demand, for the cost thereof.\n\n (c) FAILURE TO PERFORM. If Lessee fails to perform Lessee's obligations\nunder this Paragraph 7.1, Lessor may enter upon the Premises after 10 days'\nprior written notice to Lessee (except in the case of an emergency, in which\ncase no notice shall be required), perform such obligations on Lessee's behalf,\nand put the Premises in good order, condition and repair, and Lessee shall\npromptly reimburse Lessor for the cost thereof.\n\n (d) REPLACEMENT. Subject to Lessee's indemnification of Lessor as set\nforth in Paragraph 8.7 below, and without relieving Lessee of liability\nresulting from Lessee's failure to exercise and perform good maintenance\npractices, if an item described m Paragraph 7.1(b) cannot be repaired other than\nat a cost which is in excess of 50 % of the cost of replacing such item, then\nsuch item shall be replaced by Lessor, and the cost thereof shall be prorated\nbetween the Parties and Lessee shall only be obligated to pay, each month during\nthe remainder of the term of this Lease, on the date on which Base Rent is due,\nan amount equal to the product of multiplying the cost of such replacement by a\nfraction, the numerator of which is one, and the denominator of which is \n\n\n\n144 (i.e. 1\/144th of the cost per month). Lessee shall pay interest on the\nunamortized balance at a rate that is commercially reasonable in the judgment of\nLessor's accountants. Lessee may, however, prepay its obligation at any time.\n\n 7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs 2.2\n(Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6 (Use),\n7.1 (Lessee's Obligations), 9 (Damage or Destruction) and 14 (Condemnation),\nLessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good\norder, condition and repair the foundations, exterior walls, structural\ncondition of interior bearing walls, exterior roof, fire sprinkler system,\nCommon Area fire alarm and\/or smoke detection systems, fire hydrants, parking\nlots, walkways, parkways, driveways, landscaping, fences, signs and utility\nsystems serving the Common Areas and all parts thereof, as well as providing the\nservices for which there is a Common Area Operating Expense pursuant to\nParagraph 4.2 Lessor shall not be obligated to paint the exterior or interior\nsurfaces of exterior walls nor shall Lessor be obligated to maintain, repair or\nreplace windows, doors or plate glass of the Premises. Lessee expressly waives\nthe benefit of any statute now or hereafter in effect to the extent it is\ninconsistent with the terms of this Lease.\n\n 7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.\n\n (a) DEFINITIONS. The term \"UTILITY INSTALLATIONS\" refers to all floor\nand window coverings, air lines, power panels, electrical distribution, security\nand fire protection systems, communication systems, lighting fixtures, HVAC\nequipment, plumbing, and fencing in or on the Premises. The term \"TRADE\nFIXTURES\" shall mean Lessee's machinery and equipment that can be removed\nwithout doing material damage to the Premises. The term \"ALTERATIONS\" shall mean\nany modification of the improvements, other than Utility Installations or Trade\nFixtures, whether by addition or deletion. \"LESSEE OWNED ALTERATIONS AND\/OR\nUTILITY INSTALLATIONS\" are defined as Alterations and\/or Utility Installations\nmade by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).\n\n (b) CONSENT. Lessee shall not make any Alterations or Utility\nInstallations to the Premises without Lessor's prior written consent. Lessee\nmay, however, make non-structural Utility Installations to the interior of the\nPremises (excluding the roof) without such consent but upon notice to Lessor, as\nlong as they are not visible from the outside, do not involve puncturing,\nrelocating or removing the roof or any existing walls, and the cumulative cost\nthereof during this Lease as extended does not exceed a sum equal to 3 months'\nBase Rent in the aggregate or a sum equal to one month's Base Rent in any one\nyear. Notwithstanding the foregoing, Lessee shall not make or permit any roof\npenetrations and\/or install anything on the roof without the prior written\napproval of Lessor. Lessor may, as a precondition to granting such approval,\nrequire Lessee to utilize a contractor chosen and\/or approved by Lessor. Any\nAlterations or Utility Installations that Lessee shall desire to make and which\nrequire the consent of the Lessor shall be presented to Lessor in written form\nwith detailed plans. Consent shall be deemed conditioned upon Lessee's: (i)\nacquiring all applicable governmental permits, (ii) furnishing Lessor with\ncopies of both the permits and the plans and specifications prior to\ncommencement of the work, and (iii) compliance with all conditions of said\npermits and other Applicable Requirements in a prompt and expeditious manner.\nAny Alterations or Utility Installations shall be performed in a workmanlike\nmanner with good and sufficient materials. Lessee shall promptly upon completion\nfurnish Lessor with as-built plans and specifications. For work which costs an\namount in excess of one month's Base Rent, Lessor may condition its consent upon\nLessee providing a lien and completion bond in an amount equal to 150% of the\nestimated cost of such Alteration or Utility Installation and\/or upon Lessee's\nposting an additional Security Deposit with Lessor.\n\n (c) INDEMNIFICATION. Lessee shall pay, when due, all claims for labor\nor materials furnished or alleged to have been furnished to or for Lessee at or\nfor use on the Premises, which claims are or may be secured by any mechanic's or\nmaterialman's lien against the Premises or any interest therein. Lessee shall\ngive Lessor not less than 10 days notice prior to the commencement of any work\nin, on or about the Premises, and Lessor shall have the right to post notices of\nnon-responsibility. If Lessee shall contest the validity of any such lien, claim\nor demand, then Lessee shall, at its sole expense defend and protect itself,\nLessor and the Premises against the same and shall pay and satisfy any such\nadverse judgment that may be rendered thereon before the enforcement thereof. If\nLessor shall require, Lessee shall furnish a surety bond in an amount equal to\n150% of the amount of such contested lien, claim or demand, indemnifying Lessor\nagainst liability for the same. If Lessor elects to participate in any such\naction, Lessee shall pay Lessor's attorneys' fees and costs.\n\n 7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.\n\n (a) OWNERSHIP. Subject to Lessor's right to require removal or elect \nownership as hereinafter provided, all Alterations and Utility Installations \nmade by Lessee shall be the property of Lessee, but considered a part of the \nPremises. Upon Lessee receiving consent to Install additional alterations and \nutility installations Lessor must elect in writing to be the owner of all or \nany specified part of the Lessee Owned Alterations and Utility Installations. \nUnless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned \nAlterations and Utility Installations shall, at the expiration or termination \nof this Lease, become the property of Lessor and be surrendered by Lessee \nwith the Premises.\n\n (b) REMOVAL. By delivery to Lessee of written notice from Lessor not\nearlier than 90 and not later than 30 days prior to the end of the term of this\nLease, Lessor may require that any or all Lessee Owned Alterations or Utility\nInstallations be removed by the expiration or termination of this Lease. Lessor\nmay require the removal at any time of all or any part of any Lessee Owned\nAlterations or Utility Installations made without the required consent.\n\n (c) SURRENDER; RESTORATION. Lessee shall surrender the Premises by the\nExpiration Date or any earlier termination date, with all of the improvements,\nparts and surfaces thereof broom clean and free of debris, and in good operating\norder, condition and state of repair, ordinary wear and tear excepted. \"Ordinary\nwear and tear\" shall not include any damage or deterioration that would have\nbeen prevented by good maintenance practice. Notwithstanding the foregoing, if\nthis Lease is for 12 months or less, \n\n\n\nthen Lessee shall surrender the Premises in the same condition as delivered to\nLessee on the Start Date with NO allowance for ordinary wear and tear. Lessee\nshall repair any damage occasioned by the installation, maintenance or removal\nof Trade Fixtures, Lessee owned Alterations and\/or Unity Installations,\nfurnishings, and equipment as well as the removal of any storage tank installed\nby or for Lessee. Lessee shall also completely remove from the Premises any and\nall Hazardous Substances brought onto the Premises by or for Lessee, or any\nthird party (except Hazardous Substances which were deposited via underground\nmigration from areas outside of the Project) even if such removal would require\nLessee to perform or pay for work that exceeds statutory requirements. Trade\nFixtures shall remain the property of Lessee and shall be removed by Lessee. The\nfailure by Lessee to timely vacate the Premises pursuant to this Paragraph\n7.4(c) without the express written consent of Lessor shall constitute a holdover\nunder the provisions of Paragraph 26 below.\n\n8. INSURANCE; INDEMNITY.\n\n 8.1 PAYMENT OF PREMIUMS. The cost of the premiums for the insurance\npolicies required to be carried by Lessor, pursuant to Paragraphs 8.2(b), 8.3(a)\nand 8.3(b), shall be a Common Area Operating Expense. Premiums for policy\nperiods commencing prior to, or extending beyond, the term of this Lease shall\nbe prorated to coincide with the corresponding Start Date or Expiration Date.\n\n 8.2 LIABILITY INSURANCE.\n\n (a) CARRIED BY LESSEE. Lessee shall obtain and keep in force a\nCommercial General Liability policy of insurance protecting Lessee and Lessor as\nan additional insured against claims for bodily injury, personal injury and\nproperty damage based upon or arising out of the ownership, use, occupancy or\nmaintenance of the Premises and all areas appurtenant thereto. Such insurance\nshall be on an occurrence basis providing single limit coverage in an amount not\nless than $1,000,000 per occurrence with an annual aggregate of not less than\n$2,000,000, an \"Additional Insured-Managers or Lessors of Premises Endorsement\"\nand contain the \"Amendment of the Pollution Exclusion Endorsement\" for damage\ncaused by heat, smoke or fumes from a hostile fire. The policy shall not contain\nany intra-insured exclusions as between insured persons or organizations, but\nshall include coverage for liability assumed under this Lease as an \"INSURED\nCONTRACT\" for the performance of Lessee's indemnity obligations under this\nLease. The limits of said insurance shall not, however, limit the liability of\nLessee nor relieve Lessee of any obligation hereunder. All insurance carried by\nLessee shall be primary to and not contributory with any similar insurance\nearned by Lessor, whose insurance shall be considered excess insurance only.\n\n (b) CARRIED BY LESSOR. Lessor shall maintain liability insurance as\ndescribed in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance\nrequired to be maintained by Lessee. Lessee shall not be named as an additional\ninsured therein.\n\n 8.3 PROPERTY INSURANCE-BUILDING, IMPROVEMENTS AND RENTAL VALUE.\n\n (a) BUILDING AND IMPROVEMENTS. Lessor shall obtain and keep in force a\npolicy or policies of insurance in the name of Lessor, with loss payable to\nLessor, any ground-lessor, and to any Lender insuring loss or damage to the\nPremises. The amount of such insurance shall be equal to the full replacement\ncost of the Premises, as the same shall exist from time to time, or the amount\nrequired by any Lender, but in no event more than the commercially reasonable\nand available insurable value thereof. Lessee Owned Alterations and Utility\nInstallations, Trade Fixtures, and Lessee's personal property shall be insured\nby Lessee under Paragraph 8.4. If the coverage is available and commercially\nappropriate, such policy or policies shall insure against all risks of direct\nphysical loss or damage (except the perils of flood and\/or earthquake unless\nrequired by a Lender), including coverage for debris removal and the enforcement\nof any Applicable Requirements requiring the upgrading, demolition,\nreconstruction or replacement of any portion of the Premises as the result of a\ncovered loss. Said policy or policies shall also contain an agreed valuation\nprovision in lieu of any coinsurance clause, waiver of subrogation, and\ninflation guard protection causing an increase in the annual property insurance\ncoverage amount by a factor of not less than the adjusted U.S. Department of\nLabor Consumer Price Index for All Urban Consumers for the city nearest to where\nthe Premises are located. If such insurance coverage has a deductible clause,\nthe deductible amount shall not exceed $1,000 per occurrence.\n\n (b) RENTAL VALUE. Lessor shall also obtain and keep in force a policy\nor policies in the name of Lessor with loss payable to Lessor and any Lender,\ninsuring the loss of the full Rent for one year with an extended period of\nindemnity for an additional 180 days (\"RENTAL VALUE INSURANCE\"). Said insurance\nshall contain an agreed valuation provision in lieu of any coinsurance clause,\nand the amount of coverage shall be adjusted annually to reflect the protected\nRent otherwise payable by Lessee, for the next 12 month period.\n\n (c) ADJACENT PREMISES. Lessee shall pay for any increase in the\npremiums for the property insurance of the Building and for the Common Areas or\nother buildings in the Project if said increase is caused by Lessee's acts,\nomissions, use or occupancy of the Premises.\n\n (d) LESSEE'S IMPROVEMENTS. Since Lessor is the Insuring Party, Lessor\nshall not be required to insure Lessee Owned Alterations and Utility\nInstallations unless the item in question has become the property of Lessor\nunder the terms of this Lease.\n\n 8.4 LESSEE'S PROPERTY; BUSINESS INTERRUPTION INSURANCE.\n\n (a) PROPERTY DAMAGE. Lessee shall obtain and maintain insurance\ncoverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned\nAlterations and Utility Installations. Such insurance shall be full replacement\ncost coverage with a deductible of not to exceed $1,000 per occurrence. The\nproceeds from any such insurance shall be used by Lessee for the \n\n\n\nreplacement of personal property, Trade Fixtures and Lessee Owned Alterations\nand Utility Installations. Lessee shall provide Lessor with written evidence\nthat such insurance is in force.\n\n (b) BUSINESS INTERRUPTION. Lessee shall obtain and maintain loss of\nincome and extra expense insurance in amounts as will reimburse Lessee for\ndirect or indirect loss of earnings attributable to all perils commonly insured\nagainst by prudent lessees in the business of Lessee or attributable to\nprevention of access to the Premises as a result of such perils.\n\n (c) NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no\nrepresentation that the limits or forms of coverage of insurance specified\nherein are adequate to cover Lessee's property, business operations or\nobligations under this Lease.\n\n 8.5 INSURANCE POLICIES. Insurance required herein shall be by companies\nduly licensed or admitted to transact business in the state where the Premises\nare located, and maintaining during the policy term a \"General Policyholders\nRating\" of at least B+, V, as set forth in the most current issue of \"Best's\nInsurance Guide\", or such other rating as may be required by a Lender. Lessee\nshall not do or permit to be done anything which invalidates the required\ninsurance policies. Lessee shall, prior to the Start Date, deliver to Lessor\ncertified copies of policies of such insurance or certificates evidencing the\nexistence and amounts of the required insurance. No such policy shall be\ncancelable or subject to modification except after 30 days prior written notice\nto Lessor. Lessee shall, at least 30 days prior to the expiration of such\npolicies, furnish Lessor with evidence of renewals or \"insurance binders\"\nevidencing renewal thereof, or Lessor may order such insurance and charge the\ncost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon\ndemand. Such policies shall be for a term of at least one year, or the length of\nthe remaining term of this Lease, whichever is less. If either Party shall fail\nto procure and maintain the insurance required to be carried by it, the other\nParty may, but shall not be required to, procure and maintain the same.\n\n 8.6 WAIVER OF SUBROGATION. Without affecting any other rights or\nremedies, Lessee and Lessor each hereby release and relieve the other, and waive\ntheir entire right to recover damages against the other, for loss of or damage\nto its property arising out of or incident to the perils required to be insured\nagainst herein. The effect of such releases and waivers is not limited by the\namount of insurance carried or required, or by any deductibles applicable\nhereto. The Parties agree to have their respective property damage insurance\ncarriers wave any right to subrogation that such companies may have against\nLessor or Lessee, as the case may be, so long as the insurance is not\ninvalidated thereby.\n\n 8.7 INDEMNITY. Except for Lessor's gross negligence or willful\nmisconduct, Lessee shall indemnify, protect, defend and hold harmless the\nPremises, Lessor and its agents, Lessor's master or ground lessor, partners and\nLenders, from and against any and all claims, loss of rents and\/or damages,\nliens, judgments, penalties, attorneys' and consultants' fees, expenses and\/or\nliabilities arising out of, involving, or in connection with, the use and\/or\noccupancy of the Premises by Lessee. If any action or proceeding is brought\nagainst Lessor by reason of any of the foregoing matters, Lessee shall upon\nnotice defend the same at Lessee's expense by counsel reasonably satisfactory to\nLessor and Lessor shall cooperate with Lessee in such defense. Lessor need not\nhave first paid any such claim in order to be defended or indemnified.\n\n 8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for\ninjury or damage to the person or goods, wares, merchandise or other property of\nLessee, Lessee's employees, contractors, invitees, customers, or any other\nperson in or about the Premises, whether such damage or injury is caused by or\nresults from fire, steam, electricity, gas, water or raim, or from the breakage,\nleakage, obstruction or other defects of pipes, fire sprinklers,. wires,\nappliances, plumbing, HVAC or lighting fixtures, or from any other cause,\nwhether the said injury or damage results from conditions arising upon the\nPremises or upon other portions of the Building, or from other sources or\nplaces. Lessor shall not be liable for any damages arising from any act or\nneglect of any other tenant of Lessor nor from the failure of Lessor to enforce\nthe provisions of any other lease in the Project. Notwithstanding Lessor's\nnegligence or breach of this Lease, Lessor shall under no circumstances be\nliable for injury to Lessee's business or for any loss of income or profit\ntherefrom.\n\n9. DAMAGE OR DESTRUCTION.\n\n 9.1 DEFINITIONS.\n\n (a) \"PREMISES PARTIAL DAMAGE\" shall mean damage or destruction to \nthe improvements on the Premises, other than Lessee Owned Alterations and \nUtility Installations, which can reasonably be repaired in 3 months or less \nfrom the date of the damage or destruction, and the cost thereof does not \nexceed a sum equal to eighteen (18) months' Base Rent. Lessor shall notify \nLessee in writing within 30 days from the date of the damage or destruction \nas to whether or not the damage is Partial or Total.\n\n (b) \"PREMISES TOTAL DESTRUCTION\" shall mean damage or destruction to \nthe improvements on the Premises, other than Lessee Owned Alterations and \nUtility Installations and Trade Fixtures, which cannot reasonably be repaired \nin 5 months or less from the date of the damage or destruction and\/or the \ncost thereof exceeds a sum equal to 24 months' Base Rent. Lessor shall notify \nLessee in writing within 30 days from the date of the damage or destruction \nas to whether or not the damage is Partial or Total.\n\n (c) \"INSURED LOSS\" shall mean damages or destruction to improvements on\nthe Premises, other than Lessee Owned Alterations and Utility Installations and\nTrade Fixtures, which was caused by an event required to be covered by the\ninsurance described in Paragraph 8.3(a), irrespective of any deductible amounts\nor coverage limits involved.\n\n\n\n\n (d) \"REPLACEMENT COST\" shall mean the cost to repair or rebuild the\nimprovements owned by Lessor at the time of the occurrence to their condition\nexisting immediately prior thereto, including demolition, debris removal and\nupgrading required by the operation of Applicable Requirements, and without\ndeduction for depreciation.\n\n (e) \"HAZARDOUS SUBSTANCE CONDITION\" shall mean the occurrence or\ndiscovery of a condition involving the presence of, or a contamination by, a\nHazardous Substance as defined in Paragraph 6.2(a), in, on, or under the\nPremises.\n\n 9.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that is\nan Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such\ndamage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility\nInstallations) as soon as reasonably possible and this Lease shall continue in\nfull force and effect; provided, however, that Lessee shall, at Lessor's\nelection, make the repair of any damage or destruction the total cost to repair\nof which is $5,000 or less, and, in such event, Lessor shall make any applicable\ninsurance proceeds available to Lessee on a reasonable basis for that purpose.\nNotwithstanding the foregoing, if the required insurance was not in force or the\ninsurance proceeds are not sufficient to effect such repair, the Insuring Party\nshall promptly contribute the shortage in proceeds as and when required to\ncomplete said repairs. In the event, however, such shortage was due to the fact\nthat, by reason of the unique nature of the improvements, full replacement cost\ninsurance coverage was not commercially reasonable and available, Lessor shall\nhave no obligation to pay for the shortage in insurance proceeds or to fully\nrestore the unique aspects of the Premises unless Lessee provides Lessor with\nthe funds to cover same, or adequate assurance thereof, within 10 days following\nreceipt of written notice of such shortage and request therefor. If Lessor\nreceives said funds or adequate assurance thereof within said 10 day period, the\nparty responsible for making the repairs shall complete them as soon as\nreasonably possible and this Lease shall remain in full force and effect. If\nsuch funds or assurance are not received, Lessor may nevertheless elect by\nwritten notice to Lessee within 10 days thereafter to: (i) make such restoration\nand repair as is commercially reasonable with Lessor paying any shortage in\nproceeds, in which case this Lease shall remain in full force and effect, or\n(ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled\nto reimbursement of any funds contributed by Lessee to repair any such damage or\ndestruction. Premises Partial Damage due to flood or earthquake shall be subject\nto Paragraph 9.3, notwithstanding that there may be some insurance coverage, but\nthe net proceeds of any such insurance shall be made available for the repairs\nif made by either Party.\n\n 9.3 PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage that\nis not an Insured Loss occurs, unless caused by a negligent or willful act of\nLessee (in which event Lessee shall make the repairs at Lessee's expense),\nLessor may either: (i) repair such damage as soon as reasonably possible at\nLessor's expense, in which event this Lease shall continue in full force and\neffect, or (ii) terminate this Lease by giving written notice to Lessee within\n30 days after receipt by Lessor of knowledge of the occurrence of such damage.\nSuch termination shall be effective 60 days following the date of such notice.\nIn the event Lessor elects to terminate this Lease, Lessee shall have the right\nwithin 10 days after receipt of the termination notice to give written notice to\nLessor of Lessee's commitment to pay for the repair of such damage without\nreimbursement from Lessor. Lessee shall provide Lessor with said funds or\nsatisfactory assurance thereof within 30 days after making such commitment. In\nsuch event this Lease shall continue in full force and effect, and Lessor shall\nproceed to make such repairs as soon as reasonably possible after the required\nfunds are available. If Lessee does not make the required commitment, this Lease\nshall terminate as of the date specified in the termination notice.\n\n 9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a\nPremises Total Destruction occurs, this Lease shall terminate 60 days following\nsuch Destruction. If the damage or destruction was caused by the gross\nnegligence or willful misconduct of Lessee, Lessor shall have the right to\nrecover Lessor's damages from Lessee, except as provided in Paragraph 8.6.\n\n 9.5 DAMAGE NEAR END OF TERM. If at any time during the last 6 months of\nthis Lease there is damage for which the cost to repair exceeds one month's Base\nRent, whether or not an Insured Loss, Lessor may terminate this Lease effective\n60 days following the date of occurrence of such damage by giving a written\ntermination notice to Lessee within 30 days after the date of occurrence of such\ndamage. Notwithstanding the foregoing, ix Lessee at that time has an exercisable\noption to extend this Lease or to purchase the Premises, then Lessee may\npreserve this Lease by, (a) exercising such option and (b) providing Lessor with\nany shortage in insurance proceeds (or adequate assurance thereof) needed to\nmake the repairs on or before the earlier of (i) the date which is 10 days after\nLessee's receipt of Lessor's written notice purporting to terminate this Lease,\nor (ii) the day prior to the date upon which such option expires. If Lessee duly\nexercises such option during such period and provides Lessor with funds (or\nadequate assurance thereof) to cover any shortage in insurance proceeds, Lessor\nshall, at Lessor's commercially reasonable expense, repair such damage as soon\nas reasonably possible and this Lease shall continue in full force and effect.\nIf Lessee fails to exercise such option and provide such funds or assurance\nduring such period, then this Lease shall terminate on the date specified in the\ntermination notice and Lessee's option shall be extinguished.\n\n 9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.\n\n (a) ABATEMENT. In the event of Premises Partial Damage or Premises\nTotal Destruction Of a Hazardous Substance Condition for which Lessee is not\nresponsible under this Lease, the Rent payable by Lessee for the period required\nfor the repair, remediation or restoration of such damage shall be abated in\nproportion to the degree to which Lessee's use of the Premises is impaired, but\nnot to exceed the proceeds received from the Rental Value insurance. All other\nobligations of Lessee hereunder shall be performed by Lessee, and Lessor shall\nhave no liability for any such damage, obstruction, remediation, repair or\nrestoration except as provided herein.\n\n (b) REMEDIES. If Lessor shall be obligated to repair or restore the\nPremises and does not commence, in a substantial and meaningful way, such repair\nor restoration within 90 days after such obligation shall accrue, Lessee may, at\nany time prior to the commencement of such repair or restoration, give written\nnotice to Lessor and to any Lenders of which Lessee has \n\n\n 19\n\n\nactual notice, of Lessee's election to terminate this Lease on a date not less\nthan 60 days following the giving of such notice. If Lessee gives such notice\nand such repair or restoration is not commenced within 30 days thereafter, this\nLease shall terminate as of the date specified in said notice. If the repair or\nrestoration is commenced within such 30 days, this Lease shall continue in full\nforce and effect. \"Commence\" shall mean either the unconditional authorization\nof the preparation of the required plans, or the beginning of the actual work on\nthe Premises, whichever first occurs.\n\n 9.7 TERMINATION; ADVANCE PAYMENTS. Upon termination of this Lease\npursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be\nmade concerning advance Base Rent and any other advance payments made by Lessee\nto Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's\nSecurity Deposit as has not been, or is not then required to be, used by Lessor.\n\n 9.8 WAIVE STATUTES. Lessor and Lessee agree that the terms of this\nLease shall govern the effect of any damage to or destruction of the Premises\nwith respect to the termination of this Lease and hereby waive the provisions of\nany present or future statute to the extent inconsistent herewith.\n\n10. REAL PROPERTY TAXES.\n\n 10.1 DEFINITION. As used herein, the term \"REAL PROPERTY TAXES\" shall\ninclude any form of assessment; real estate, general, special, ordinary or\nextraordinary, or rental levy or tax (other than inheritance, personal income or\nestate taxes); improvement bond; and\/or license fee imposed upon or levied\nagainst any legal or equitable interest of Lessor in the Project, Lessor's right\nto other income therefrom, and\/or Lessor's business of leasing, by any authority\nhaving the direct or indirect power to tax and where the funds are generated\nwith reference to the Project address and where the proceeds so generated are to\nbe applied by the city, county or other local taxing authority of a jurisdiction\nwithin which the Project is located. The term \"Real Property Taxes\" shall also\ninclude any tax, fee, levy, assessment or charge, or any increase therein,\nimposed by reason of events occurring during the term of this Lease, including\nbut not limited to, a change in the ownership of the Project or any portion\nthereof or a change in the improvements thereon. In calculating Real Property\nTaxes for any calendar year, the Real Property Taxes for any real estate tax\nyear shall be included in the calculation of Real Property Taxes for such\ncalendar year based upon the number of days which such calendar year and tax\nyear have in common.\n\n 10.2 PAYMENT OF TAXES. Lessor shall pay the Real Property Taxes\napplicable to the Project, and except as otherwise provided in Paragraph 10.3,\nany such amounts shall be included in the calculation of Common Area Operating\nExpenses in accordance with the provisions of Paragraph 4.2.\n\n 10.3 ADDITIONAL IMPROVEMENTS. Common Area Operating Expenses shall not\ninclude Real Property Taxes specified in the tax assessor's records and work\nsheets as being caused by additional improvements placed upon the Project by\nother lessees or by Lessor for the exclusive enjoyment of such other lessees.\nNotwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at\nthe time Common Area Operating Expenses are payable under Paragraph 4.2, the\nentirety of any increase in Real Property Taxes if assessed solely by reason of\nAlterations, Trade Fixtures or Utility Installations placed upon the Premises by\nLessee or at Lessee's request.\n\n 10.4 JOINT ASSESSMENT. If the Building is not separately assessed, Real\nProperty Taxes allocated to the Building shall be an equitable proportion of the\nReal Property Taxes for all of the land and improvements included within the tax\nparcel assessed, such proportion to be determined by Lessor from the respective\nvaluations assigned in the assessor's work sheets or such other information as\nmay be reasonably available. Lessor's reasonable determination thereof, in good\nfaith, shall be conclusive.\n\n 10.5 PERSONAL PROPERTY TAXES. Lessee shall pay prior to delinquency all\ntaxes assessed against and levied upon Lessee Owned Alterations and Utility\nInstallations, Trade Fixtures, furnishings, equipment and all personal property\nof Lessee contained in the Premises. When possible, Lessee shall cause its\nLessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings,\nequipment and all other personal property to be assessed and billed separately\nfrom the real property of Lessor. If any of Lessee's said property shall be\nassessed with Lessor's real property, Lessee shall pay Lessor the taxes\nattributable to Lessee's property within 10 days offer receipt of a written\nstatement setting forth the taxes applicable to Lessee's property.\n\n11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,\ntelephone, trash disposal and other utilities and services supplied to the\nPremises, together with any taxes thereon. Notwithstanding the provisions of\nParagraph 4.2, if at any time in Lessor's sole judgment, Lessor determines that\nLessee is using a disproportionate amount of water, electricity or other\ncommonly metered utilities, or that Lessee is generating such a large volume of\ntrash as to require an increase in the size of the dumpster and\/or an increase\nin the number of times per month that the dumpster is emptied, then Lessor may\nincrease Lessee's Base Rent by an amount equal to such increased costs.\n\n12. ASSIGNMENT AND SUBLETTING.\n\n 12.1 LESSOR'S CONSENT REQUIRED.\n\n (a) Lessee shall not voluntarily or by operation of law assign,\ntransfer, mortgage or encumber (collectively, \"assign or assignment\") or sublet\nall or any part of Lessee's interest in this Lease or in the Premises without\nLessor's prior written consent.\n\n (b) A change in the control of Lessee shall constitute an assignment\nrequiring consent. The transfer, on a cumulative basis, of 25% or more of the\nvoting control of Lessee shall constitute a change in control for this purpose.\n\n (c) The involvement of Lessee or its assets in any transaction, or\nseries of transactions (by way of merger, sale, acquisition, financing,\ntransfer, leveraged buy-out or otherwise), whether or not a formal assignment or\nhypothecation of this Lease \n\n\n 20\n\n\nor Lessee's assets occurs, which results or will result in a reduction of the\nNet Worth of Lessee by an amount greater than 25% of such Net Worth as it was\nrepresented at the time of the execution of this Lease or at the time of the\nmost recent assignment to which Lessor has consented, or as it exists\nimmediately prior to said transaction or transactions constituting such\nreduction, whichever was or is greater, shall be considered an assignment of\nthis Lease to which Lessor may withhold its consent. \"NET WORTH OF LESSEE\" shall\nmean the net worth of Lessee (excluding any guarantors) established under\ngenerally accepted accounting principles.\n\n (d) An assignment or subletting without consent shall, at Lessor's\noption, be a Default curable after notice per Paragraph 13.1(c), or a noncurable\nBreach without the necessity of any notice and grace period. If Lessor elects to\ntreat such unapproved assignment or subletting as a noncurable Breach, Lessor\nmay either: (i) terminate this Lease, or (ii) upon 30 days written notice,\nincrease the monthly Base Rent to 110% of the Base Rent then in effect. Further,\nin the event of such Breach and rental adjustment, (i) the purchase price of any\noption to purchase the Premises held by Lessee shall be subject to similar\nadjustment to 110% of the price previously in effect, and (ii) all fixed and\nnon-fixed rental adjustments scheduled during the remainder of the Lease term\nshall be increased to 110% of the scheduled adjusted rent.\n\n (e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be\nlimited to compensatory damages and\/or injunctive relief.\n\n 12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.\n\n (a) Regardless of Lessor's consent, no assignment or subletting shall:\n(i) be effective without the express written assumption by such assignee or\nsublessee of the obligations of Lessee under this Lease, (ii) release Lessee of\nany obligations hereunder, or (iii) alter the primary liability of Lessee for\nthe payment of Rent or for the performance of any other obligations to be\nperformed by Lessee.\n\n (b) Lessor may accept Rent or performance of Lessee's obligations from\nany person other than Lessee pending approval or disapproval of an assignment.\nNeither a delay in the approval or disapproval of such assignment nor the\nacceptance of Rent or performance shall constitute a waiver or estoppel of\nLessor's right to exercise its remedies for Lessee's Default or Breach.\n\n (c) Lessor's consent to any assignment or subletting shall not\nconstitute a consent to any subsequent assignment or subletting.\n\n (d) In the event of any Default or Breach by Lessee, Lessor may proceed\ndirectly against Lessee, any Guarantors or anyone else responsible for the\nperformance of Lessee's obligations under this Lease, including any assignee or\nsublessee, without first exhausting Lessor's remedies against any other person\nor entity responsible therefore to Lessor, or any security held by Lessor.\n\n (e) Each request for consent to an assignment or subletting shall be \nin writing, accompanied by information relevant to Lessor's determination as \nto the financial and operational responsibility and appropriateness of the \nproposed assignee or sublessee, including but not limited to the intended use \nand\/or required modification of the Premises, if any, together with a fee of \n$1,000 as consideration for Lessor's considering and processing said request. \nLessee agrees to provide Lessor with such other or additional information \nand\/or documentation as may be reasonably requested.\n\n (f) Any assignee of, or sublessee under, this Lease shall, by reason of\naccepting such assignment or entering into such sublease, be deemed to have\nassumed and agreed to conform and comply with each and every term, covenant,\ncondition and obligation herein to be observed or performed by Lessee during the\nterm of said assignment or sublease, other than such obligations as are contrary\nto or inconsistent with provisions of an assignment or sublease to which Lessor\nhas specifically consented to in writing.\n\n (g) Lessor's consent to any assignment or subletting shall not transfer\nto the assignee or sublessee any Option granted to the original Lessee by this\nLease unless such transfer is specifically consented to by Lessor in writing.\n(See Paragraph 39.2)\n\n 12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The\nfollowing terms and conditions shall apply to any subletting by Lessee of all or\nany part of the Premises and shall be deemed included in all subleases under\nthis Lease whether or not expressly incorporated therein:\n\n (a) Lessee hereby assigns and transfers to Lessor all of Lessee's\ninterest in all Rent payable on any sublease, and Lessor may collect such Rent\nand apply same toward Lessee's obligations under this Lease; provided, however,\nthat until a Breach shall occur in the performance of Lessee's obligations,\nLessee may collect said Rent. Lessor shall not, by reason of the foregoing or\nany assignment of such sublease, nor by reason of the collection of Rent, be\ndeemed liable to the sublessee for any failure of Lessee to perform and comply\nwith any of Lessee's obligations to such sublessee. Lessee hereby irrevocably\nauthorizes and directs any such sublessee, upon receipt of a written notice from\nLessor stating that a Breach exists in the performance of Lessee's obligations\nunder this Lease, to pay to Lessor all Rent due and to become due under the\nsublease. Sublessee shall rely upon any such notice from Lessor and shall pay\nall Rents to Lessor without any obligation or right to inquire as to whether\nsuch Breach exists, notwithstanding any claim from Lessee to the contrary.\n\n (b) In the event of a Breach by Lessee, Lessor may, at its option,\nrequire sublessee to attorn to Lessor, in which event Lessor shall undertake the\nobligations of the sublessor under such sublease from the time of the exercise\nof said option to the \n\n\n\n\nexpiration of such sublease; provided, however, Lessor shall not be liable for\nany prepaid rents or security deposit paid by such sublessee to such sublessor\nor for any prior Defaults or Breaches of such sublessor.\n\n (c) Any matter requiring the consent of the sublessor under a sublease\nshall also require the consent of Lessor.\n\n (d) No sublessee shall further assign or sublet all or any part of the\nPremises without Lessor's prior written consent.\n\n (e) Lessor shall deliver a copy of any notice of Default or Breach by\nLessee to the sublessee, who shall have the right to cure the Default of Lessee\nwithin the grace period, if any, specified in such notice. The sublessee shall\nhave a right of reimbursement and offset from and against Lessee for any such\nDefaults cured by the sublessee.\n\n13. DEFAULT; BREACH; REMEDIES.\n\n 13.1 DEFAULT; BREACH. A \"Default\" is defined as a failure by the Lessee\nto comply with or perform any of the terms, covenants, conditions or Rules and\nRegulations under this Lease. A \"Breach\" is defined as the occurrence of one or\nmore of the following Defaults, and the failure of Lessee to cure such Default\nwithin any applicable grace period:\n\n (a) The abandonment of the Premises; or the vacating of the Premises\nwithout providing a commercially reasonable level of security or where the\ncoverage of the property insurance described in Paragraph 6.3 is jeopardized as\na result thereof, or without providing reasonable assurances to minimize\npotential vandalism.\n\n (b) The failure of Lessee to make any payment of Rent or any Security\nDeposit required to be made by Lessee hereunder, whether to Lessor or to a third\nparty, when due, to provide reasonable evidence of insurance or surety bond, or\nto fulfill any obligation under this Lease which endangers or threatens life or\nproperty, where such failure continues for a period of 3 business days following\nwritten notice to Lessee.\n\n (c) The failure by Lessee to provide (i) reasonable written evidence of\ncompliance with Applicable Requirements, (ii) the service contracts, (iii) the\nrescission of an unauthorized assignment or subletting, (iv) an Estoppel\nCertificate, (v) a requested subordination, (vi) evidence concerning any\nguaranty and\/or Guarantor, (vii) any document requested under Paragraph 41\n(easements), or (viii) any other documentation or information which Lessor may\nreasonably require of Lessee under the terms of this Lease, where any such\nfailure continues for a period of 10 days following written notice to Lessee.\n\n (d) A Default by Lessee as to the terms, covenants, conditions or\nprovisions of this Lease, or of the rules adopted under Paragraph 2.9 hereof,\nother than those described in subparagraphs 13.1(a), (b) or (c), above, where\nsuch Default continues for a period of 30 days after written notice, provided,\nhowever, that if the nature of Lessee's Default is such that more than 30 days\nare reasonably required for its cure, then it shall not be deemed to be a Breach\nif Lessee commences such cure within said 30 day period and thereafter\ndiligently prosecutes such cure to completion.\n\n (e) The occurrence of any of the following events: (i) the making of \nany general arrangement or assignment for the benefit of creditors, (ii) \nbecoming a \"debtor\" as defined in 11 U.S.C. Section 101 or any successor \nstatute thereto (unless, in the case of a petition filed against Lessee, the \nsame is dismissed within 60 days); (iii) the appointment of a trustee or \nreceiver to take possession of substantially all of Lessee's assets located \nat the Premises or of Lessee's interest in this Lease, where possession is \nnot restored to Lessee within 30 days; or (iv) the attachment, execution or \nother judicial seizure of substantially all of Lessee's assets located at the \nPremises or of Lessee's interest in this Lease, where such seizure is not \ndischarged within 30 days; provided, however, in the event that any provision \nof this subparagraph (e) is contrary to any applicable law, such provision \nshall be of no force or effect, and not affect the validity of the remaining \nprovisions.\n\n (f) The discovery that any financial statement of Lessee or of any\nGuarantor given to Lessor was materially false.\n\n (g) If the performance of Lessee's obligations under this Lease is\nguaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor's\nliability with respect to this Lease other than in accordance with the terms of\nsuch guaranty, (iii) a Guarantor's becoming insolvent or the subject of a\nbankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a\nGuarantor's breach of its guaranty obligation on an anticipatory basis, and\nLessee's failure, within 60 days following written notice of any such event, to\nprovide written alternative assurance or security, which, when coupled with the\nthen existing resources of Lessee, equals or exceeds the combined financial\nresources of Lessee and the Guarantors that existed at the time of execution of\nthis Lease.\n\n 13.2 REMEDIES. If Lessee fails to perform any of its affirmative duties\nor obligations, within 10 days after written notice (or in case of an emergency,\nwithout notice), Lessor may, at its option, perform such duty or obligation on\nLessee's behalf, including but not limited to the obtaining of reasonably\nrequired bonds, insurance policies, or governmental licenses, permits or\napprovals. The costs and expenses of any such performance by Lessor shall be due\nand payable by Lessee upon receipt of invoice therefor. If any check given to\nLessor by Lessee shall not be honored by the bank upon which it is drawn,\nLessor, at its option, may require all future payments to be made by Lessee to\nbe by cashier's check. In the event of a Breach, Lessor may, with or without\nfurther notice or demand, and without limiting Lessor in the exercise of any\nright or remedy which Lessor may have by reason of such Breach:\n\n (a) Terminate Lessee's right to possession of the Premises by any\nlawful means, in which case this Lease shall terminate and Lessee shall\nimmediately surrender possession to Lessor. In such event Lessor shall be\nentitled to recover from Lessee: (i) the unpaid Rent which had been earned at\nthe time of termination; (ii) the worth at the time of award of the amount by\nwhich the unpaid rent which would have been earned after termination until the\ntime of award exceeds the amount of such rental loss that the Lessee proves\ncould have been reasonably avoided, (iii) the worth at the time of award of the\namount by which the\n\n\n\n\nunpaid rent for the balance of the term after the time of award exceeds the\namount of such rental loss that the Lessee proves could be reasonably avoided;\nand (iv) any other amount necessary to compensate Lessor for all the detriment\nproximately caused by the Lessee's failure to perform its obligations under this\nLease or which in the ordinary course of things would be likely to result\ntherefrom, including but not limited to the cost of recovering possession of the\nPremises, expenses of reletting, including necessary renovation and alteration\nof the Premises, reasonable attorneys' fees, and that portion of any leasing\ncommission paid by Lessor in connection with this Lease applicable to the\nunexpired term of this Lease. The worth at the time of award of the amount\nreferred to in provision (iii) of the immediately preceding sentence shall be\ncomputed by discounting such amount at the discount rate of the Federal Reserve\nBank of the District within which the Premises are located at the time of award\nplus one percent. Efforts by Lessor to mitigate damages caused by Lessee's\nBreach of this Lease shall not waive Lessor's right to recover damages under\nParagraph 12. If termination of this Lease is obtained through the provisional\nremedy of unlawful detainer, Lessor shall have the right to recover in such\nproceeding any unpaid Rent and damages as are recoverable therein, or Lessor may\nreserve the right to recover all or any part thereof in a separate suit. If a\nnotice and grace period required under Paragraph 13.1 was not previously given,\na notice to pay rent or quit, or to perform or quit given to Lessee under the\nunlawful detainer statute shall also constitute the notice required by Paragraph\n13.1. In such case, the applicable grace period required by Paragraph 13.1 and\nthe unlawful detainer statute shall run concurrently, and the failure of Lessee\nto cure the Default within the greater of the two such grace periods shall\nconstitute both an unlawful detainer and a Breach of this Lease entitling Lessor\nto the remedies provided for in this Lease and\/or by said statute.\n\n (b) Continue the Lease and Lessee's right to possession and recover the\nRent as it becomes due, in which event Lessee may sublet or assign, subject only\nto reasonable limitations. Acts of maintenance, efforts to relet, and\/or the\nappointment of a receiver to protect the Lessor's interests, shall not\nconstitute a termination of the Lessee's right to possession.\n\n (c) Pursue any other remedy now or hereafter available under the laws\nor judicial decisions of the state wherein the Premises are located. The\nexpiration or termination of this Lease and\/or the termination of Lessee's right\nto possession shall not relieve Lessee from liability under any indemnity\nprovisions of this Lease as to matters occurring or accruing during the term\nhereof or by reason of Lessee's occupancy of the Premises.\n\n 13.3 INDUCEMENT RECAPTURE. Any agreement for free or abated rent or\nother charges, or for the giving or paying by Lessor to or for Lessee of any\ncash or other bonus, inducement or consideration for Lessee's entering into this\nLease, all of which concessions are hereinafter referred to as \"INDUCEMENT\nPROVISIONS\", shall be deemed conditioned upon Lessee's full and faithful\nperformance of all of the terms, covenants and conditions of this Lease. Upon\nBreach of this Lease by Lessee, any such Inducement Provision shall\nautomatically be deemed deleted from this Lease and of no further force or\neffect, and any rent, other charge, bonus, inducement or consideration\ntheretofore abated, given or paid by Lessor under such an Inducement Provision\nshall be immediately due and payable by Lessee to Lessor, notwithstanding any\nsubsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or\nthe cure of the Breach which initiated the operation of this paragraph shall not\nbe deemed a waiver by Lessor of the provisions of this paragraph unless\nspecifically so stated in writing by Lessor at the time of such acceptance.\n\n 13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by\nLessee of Rent will cause Lessor to incur costs not contemplated by this Lease,\nthe exact amount of which will be extremely difficult to ascertain. Such costs\ninclude, but are not limited to, processing and accounting charges, and late\ncharges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent\nshall not be received by Lessor within 5 days after such amount shall be due,\nthen, without any requirement for notice to Lessee, Lessee shall pay to Lessor a\none-time late charge equal to 10% 5% of each such overdue amount or $100,\nwhichever is greater. The parties hereby agree that such late charge represents\na fair and reasonable estimate of the costs Lessor will incur by reason of such\nlate payment. Acceptance of such late charge by Lessor shall in no event\nconstitute a waiver of Lessee's Default or Breach with respect to such overdue\namount, nor prevent the exercise of any of the other rights and remedies granted\nhereunder. In the event that a late charge is payable hereunder, whether or not\ncollected, for 3 consecutive installments of Base Rent, then notwithstanding any\nprovision of this Lease to the contrary, Base Rent shall, at Lessor's option,\nbecome due and payable quarterly in advance.\n\n 13.5 INTEREST. Any monetary payment due Lessor hereunder, other than\nlate charges, not received by Lessor, when due as to scheduled payments (such as\nBase Rent) or within 30 days following the date on which it was due for\nnon-scheduled payment, shall bear interest from the date when due, as to\nscheduled payments, or the 31st day after it was due as to non-scheduled\npayments. The interest (\"INTEREST\") charged shall be equal to the prime rate\nreported in the Wall Street Journal as published closest prior to the date when\ndue plus 4%, but shall not exceed the maximum rate allowed by law. Interest is\npayable in addition to the potential late charge provided for in Paragraph 13.4.\n\n 13.6 BREACH BY LESSOR.\n\n (a) NOTICE OF BREACH. Lessor shall not be deemed in breach of this\nLease unless Lessor fails within a reasonable time to perform an obligation\nrequired to be performed by Lessor. For purposes of this Paragraph, a reasonable\ntime shall in no event be less than 30 days after receipt by Lessor, and any\nLender whose name and address shall have been furnished Lessee in writing for\nsuch purpose, of written notice specifying wherein such obligation of Lessor has\nnot been performed; provided, however, that if the nature of Lessor's obligation\nis such that more than 30 days are reasonably required for its performance, then\nLessor shall not be in breach if performance is commenced within such 30 day\nperiod and thereafter diligently pursued to completion.\n\n (b) PERFORMANCE BY LESSEE ON BEHALF OF LESSOR. In the event that\nneither Lessor nor Lender cures said breach within 30 days after receipt of said\nnotice, or if having commenced said cure they do not diligently pursue it to\ncompletion, then Lessee may elect to cure said breach at Lessee's expense and\noffset from Rent an amount equal to the greater of one month's \n\n\n\nBase Rent or the Security Deposit, and to pay an excess of such expense under\nprotest, reserving Lessee's right to reimbursement from Lessor. Lessee shall\ndocument the cost of said cure and supply said documentation to Lessor.\n\n14. CONDEMNATION. If the Premises or any portion thereof are taken under \nthe power of eminent domain or sold under the threat of the exercise of said\npower (collectively \"CONDEMNATION\"), this Lease shall terminate as to the part\ntaken as of the date the condemning authority takes title or possession,\nwhichever first occurs. If more than 10% of the floor area of the Unit, or more\nthan 25% of Lessee's Reserved Parking Spaces, is taken by Condemnation, Lessee\nmay, at Lessee's option, to be exercised in writing within 10 days after Lessor\nshall have given Lessee written notice of such taking (or in the absence of such\nnotice, within 10 days after the condemning authority shall have taken\npossession) terminate this Lease as of the date the condemning authority takes\nsuch possession. If Lessee does not terminate this Lease in accordance with the\nforegoing, this Lease shall remain in full force and effect as to the portion of\nthe Premises remaining, except that the Base Rent shall be reduced in proportion\nto the reduction in utility of the Premises caused by such Condemnation.\nCondemnation awards and\/or payments shall be the property of Lessor, whether\nsuch award shall be made as compensation for diminution in value of the\nleasehold, the value of the part taken, or for severance damages; provided,\nhowever, that Lessee shall be entitled to any compensation for Lessee's\nrelocation expenses, loss of business goodwill and\/or Trade Fixtures, without\nregard to whether or not this Lease is terminated pursuant to the provisions of\nthis Paragraph. All Alterations and Utility Installations made to the Premises\nby Lessee, for purposes of Condemnation only, shall be considered the property\nof the Lessee and Lessee shall be entitled to any and all compensation which is\npayable therefor. In the event that this Lease is not terminated by reason of\nthe Condemnation, Lessor shall repair any damage to the Premises caused by such\nCondemnation. \n\n15. BROKERAGE FEES.\n\n 15.1 ADDITIONAL COMMISSION. In addition to the payments owed pursuant\nto Paragraph 1.10 above, and unless Lessor and the Brokers otherwise agree in\nwriting, Lessor agrees that: (a) if Lessee exercises any Option, (b) if Lessee\nacquires from Lessor any rights to the Premises or other premises owned by\nLessor and located within the Project, (c) if Lessee remains in possession of\nthe Premises, with the consent of Lessor, after the expiration of this Lease, or\n(d) if Base Rent is increased, whether by agreement or operation of an\nescalation clause herein, then, Lessor shall pay Brokers a fee in accordance\nwith the schedule of the Brokers in effect at the time of the execution of this\nLease.\n\n 15.2 ASSUMPTION OF OBLIGATIONS. Any buyer or transferee of Lessor's\ninterest in this Lease shall be deemed to have assumed Lessor's obligation\nhereunder. Brokers shall be third party beneficiaries of the provisions of\nParagraphs 1.10, 15, 22 and 31. If Lessor fails to pay to Brokers any amounts\ndue as and for brokerage fees pertaining to this Lease when due, then such\namounts shall accrue Interest. In addition, if Lessor fails to pay any amounts\nto Lessee's Broker when due, Lessee's Broker may send written notice to Lessor\nand Lessee of such failure and if Lessor fails to pay such amounts within 10\ndays after said notice, Lessee shall pay said monies to its Broker and offset\nsuch amounts against Rent. In addition, Lessee's Broker shall be deemed to be a\nthird party beneficiary of any commission agreement entered into by and\/or\nbetween Lessor and Lessor's Broker for the limited purpose of collecting any\nbrokerage fee owed.\n\n 15.3 REPRESENTATIONS AND INDEMNITIES OF BROKER RELATIONSHIPS. Lessee \nand Lessor each represent and warrant to the other that it has had no \ndealings with any person, firm, broker or finder (other than the Brokers, if \nany) in connection with this Lease, and that no one other than said named \nBrokers is entitled to any commission or finder's fee in connection herewith. \nLessee and Lessor do each hereby agree to indemnify, protect, defend and hold \nthe other harmless from and against liability for compensation or charges \nwhich may be claimed by any such unnamed broker, finder or other similar \nparty by reason of any dealings or actions of the indemnifying Party, \nincluding any costs, expenses, attorneys' fees reasonably incurred with \nrespect thereto.\n\n16. ESTOPPEL CERTIFICATES.\n\n (a) Each Party (as \"RESPONDING PARTY\") shall within 10 days after\nwritten notice from the other Party (the \"REQUESTING PARTY\") execute,\nacknowledge and deliver to the Requesting Party a statement in writing in form\nsimilar to the then most current \"ESTOPPEL CERTIFICATE\" form published by the\nAmerican Industrial Real Estate Association, plus such additional information,\nconfirmation and\/or statements as may be reasonably requested by the Requesting\nParty.\n\n (b) If the Responding Party shall fail to execute or deliver the\nEstoppel Certificate within such 10 day period, the Requesting Party may execute\nan Estoppel Certificate stating that (i) the Lease is in full force and effect\nwithout modification except as may be represented by the Requesting Party, (ii)\nthere are no uncured defaults in the Requesting Party's performance, and (iii)\nif Lessor is the Requesting Party, not more than one month's rent has been paid\nin advance. Prospective purchasers and encumbrances may rely upon the Requesting\nParty's Estoppel Certificate, and the Responding Party shall be estopped from\ndenying the truth of the facts contained in said Certificate.\n\n (c) If Lessor desires to finance, refinance, or sell the Premises, or\nany part thereof, Lessee and all Guarantors shall deliver to any potential\nlender or purchaser designated by Lessor such financial statements as may be\nreasonably required by such lender or purchaser, including but not limited to\nLessee's financial statements for the past 3 years. All such financial\nstatements shall be received by Lessor and such lender or purchaser in\nconfidence and shall be used only for the purposes herein set forth.\n\n17. DEFINITION OF LESSOR. The term \"LESSOR\" as used herein shall mean the \nowner or owners at the time in question of the fee title to the Premises, or, if\nthis is a sublease, of the Lessee's interest in the prior lease. In the event of\na transfer of Lessor's title or interest in the Premises or this Lease, Lessor\nshall deliver to the transferee or assignee (in cash or by credit) any unused\nSecurity Deposit held by Lessor. Except as provided in Paragraph 15, upon such\ntransfer or assignment and delivery of the Security Deposit, as aforesaid, the\nprior Lessor shall be relieved of all liability with respect to the obligations\nand\/or covenants under this \n\n\n\n\nLease thereafter to be performed by the Lessor. Subject to the foregoing, the\nobligations and\/or covenants in this Lease to be performed by the Lessor shall\nbe binding only upon the Lessor as hereinabove defined. Notwithstanding the\nabove, and subject to the provisions of Paragraph 20 below, the original Lessor\nunder this Lease, and all subsequent holders of the Lessor's interest in this\nLease shall remain liable and responsible with regard to the potential duties\nand liabilities of Lessor pertaining to Hazardous Substances as outlined in\nParagraph 6.2 above.\n\n18. SEVERABILITY. The invalidity of any provision of this Lease, as \ndetermined by a court of competent jurisdiction, shall in no way affect the\nvalidity of any other provision hereof.\n\n19. DAYS. Unless otherwise specifically indicated to the contrary, the word\n\"days\" as used in this Lease shall mean and refer to calendar days.\n\n20. LIMITATION ON LIABILITY. Subject to the provisions of Paragraph 17 \nabove, the obligations of Lessor under this Lease shall not constitute personal\nobligations of Lessor, the individual partners of Lessor or its or their\nindividual partners, directors, officers or shareholders, and Lessee shall look\nto the Premises, and to no other assets of Lessor, for the satisfaction of any\nliability of Lessor with respect to this Lease, and shall not seek recourse\nagainst the individual partners of Lessor, or its or their individual partners,\ndirectors, officers or shareholders, or any of their personal assets for such\nsatisfaction.\n\n21. TIME OF ESSENCE. Time is of the essence with respect to the performance\nof all obligations to be performed or observed by the Parties under this Lease.\n\n22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains \nall agreements between the Parties with respect to any matter mentioned herein,\nand no other prior or contemporaneous agreement or understanding shall be\neffective. Lessor and Lessee each represents and warrants to the Brokers that it\nhas made, and is relying solely upon, its own investigation as to the nature,\nquality, character and financial responsibility of the other Party to this Lease\nand as to the use, nature, quality and character of the Premises. Brokers have\nno responsibility with respect thereto or with respect to any default or breach\nhereof by either Party. The liability (including court costs and attorneys'\nfees) of any Broker with respect to negotiation, execution, delivery or\nperformance by either Lessor or Lessee under this Lease or any amendment or\nmodification hereto shall be limited to an amount up to the fee received by such\nBroker pursuant to this Lease; provided, however, that the foregoing limitation\non each Broker's liability shall not be applicable to any gross negligence or\nwillful misconduct of such Broker.\n\n23. NOTICES.\n\n 23.1 NOTICE REQUIREMENTS. All notices required or permitted by this\nLease or applicable law shall be in writing and may be delivered in person (by\nhand or by courier) or may be sent by regular, certified or registered mail or\nU.S. Postal Service Express Mail, with postage prepaid, or by facsimile\ntransmission, and shall be deemed sufficiently given if served in a manner\nspecified in this Paragraph 23 The addresses noted adjacent to a Party's\nsignature on this Lease shall be that Party's address for delivery or mailing of\nnotices. Either Party may by written notice to the other specify a different\naddress for notice, except that upon Lessee's taking possession of the Premises,\nthe Premises shall constitute Lessee's address for notice. A copy of all notices\nto Lessor shall be concurrently transmitted to such party or parties at such\naddresses as Lessor may from time to time hereafter designate in writing.\n\n 23.2 DATE OF NOTICE. Any notice sent by registered or certified mail,\nreturn receipt requested, shall be deemed given on the date of delivery shown on\nthe receipt card, or if no delivery date is shown, the postmark thereon. If sent\nby regular mail the notice shall be deemed given 48 hours after the same is\naddressed as required herein and mailed with postage prepaid. Notices delivered\nby United States Express Mail or overnight courier that guarantee next day\ndelivery shall be deemed given 24 hours after delivery of the same to the Postal\nService or courier. Notices transmitted by facsimile transmission or similar\nmeans shall be deemed delivered upon telephone confirmation of receipt\n(confirmation report from fax machine is sufficient), provided a copy is also\ndelivered via delivery or mail. If notice is received on a Saturday, Sunday or\nlegal holiday, it shall be deemed received on the next business day.\n\n24. WAIVERS. No waiver by Lessor of the Default or Breach of any term, \ncovenant or condition hereof by Lessee, shall be deemed a waiver of any other\nterm, covenant or condition hereof, or of any subsequent Default or Breach by\nLessee of the same or of any other term, covenant or condition hereof. Lessor's\nconsent to, or approval of, any act shall not be deemed to render unnecessary\nthe obtaining of Lessor's consent to, or approval of, any subsequent or similar\nact by Lessee, or be construed as the basis of an estoppel to enforce the\nprovision or provisions of this Lease requiring such consent. The acceptance of\nRent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any\npayment by Lessee may be accepted by Lessor on account of moneys or damages due\nLessor, notwithstanding any qualifying statements or conditions made by Lessee\nin connection therewith, which such statements and\/or conditions shall be of no\nforce or effect whatsoever unless specifically agreed to in writing by Lessor at\nor before the time of deposit of such payment.\n\n25. DISCLOSURES REGARDING THE NATURE OF A REAL ESTATE AGENCY RELATIONSHIP.\n\n (a) When entering into a discussion with a real estate agent regarding\na real estate transaction, a Lessor or Lessee should from the outset understand\nwhat type of agency relationship or representation it has with the agent or\nagents in the transaction. Lessor and Lessee acknowledge being advised by the\nBrokers in this transaction, as follows:\n\n\n\n (i) LESSOR'S AGENT. A Lessor's agent under a listing agreement with the\nLessor acts as the agent for the Lessor only. A Lessor's agent or subagent has\nthe following affirmative obligations: TO THE LESSOR: A fiduciary duty of utmost\ncare, integrity, honesty, and loyalty in dealings with the Lessor TO THE LESSEE\nAND THE LESSOR: (a) Diligent exercise of reasonable skills and care in\nperformance of the agent's duties. (b) A duty of honest and fair dealing and\ngood faith. (c) A duty to disclose all facts known to the agent materially\naffecting the value or desirability of the property that are not known to, or\nwithin the diligent attention and observation of, the Parties. An agent is not\nobligated to reveal to either Party any confidential information obtained from\nthe other Party which does not involve the affirmative duties set forth above,\n\n (ii) LESSEE'S AGENT. An agent can agree to act as agent for the Lessee\nonly. In these situations, the agent is not the Lessor's agent, even if by\nagreement the agent may receive compensation for services rendered, either in\nfull or in part from the Lessor. An agent acting only for a Lessee has the\nfollowing affirmative obligations: TO THE LESSEE: A fiduciary duty of utmost\ncare, integrity, honesty, and loyalty in dealings with the Lessee. TO THE LESSEE\nAND THE LESSOR: (a) Diligent exercise of reasonable skills and care in\nperformance of the agent's duties. (b) A duty of honest and fair dealing and\ngood faith. (c) A duty to disclose all facts known to the agent materially\naffecting the value or desirability of the property that are not known to, or\nwithin the diligent attention and observation of, the Parties. An agent is not\nobligated to reveal to either Party any confidential information obtained from\nthe other Party which does not involve the affirmative duties set forth above.\n\n (iii) AGENT REPRESENTING BOTH LESSOR AND LESSEE. A real estate agent,\neither acting directly or through one or more associate licenses, can legally be\nthe agent of both the Lessor and the Lessee in a transaction, but only with the\nknowledge and consent of both the Lessor and the Lessee. In a dual agency\nsituation, the agent has the following affirmative obligations to both the\nLessor and the Lessee: (a) A fiduciary duty of utmost care, integrity, honesty\nand loyalty in the dealings with either Lessor or the Lessee. (b) Other duties\nto the Lessor and the Lessee as stated above in subparagraphs (i) or (ii) In\nrepresenting both Lessor and Lessee, the agent may not without the express\npermission of the respective Party, disclose to the other Party that the Lessor\nwill accept rent in an amount less than that indicated in the listing or that\nthe Lessee is willing to pay a higher rent than that offered. The above duties\nof the agent in a real estate transaction do not relieve a Lessor or Lessee from\nthe responsibility to protect their own interests. Lessor and Lessee should\ncarefully read all agreements to assure that they adequately express their\nunderstanding of the transaction. A real estate agent is a person qualified to\nadvise about real estate. If legal or tax advice is desired, consult a competent\nprofessional. \n\n (b) Brokers have no responsibility with respect to any default or\nbreach hereof by either Party. The liability (including court costs and\nattorneys' fees), of any Broker with respect to any breach of duty, error or\nomission relating to this Lease shall not exceed the fee received by such Broker\npursuant to this Lease; provided, however, that the foregoing limitation on each\nBroker's liability shall not be applicable to any gross negligence or willful\nmisconduct of such Broker.\n\n (c) Buyer and Seller agree to identify to Brokers as \"Confidential\" any\ncommunication or information given Brokers that is considered by such Party to\nbe confidential.\n\n26. NO RIGHT TO HOLDOVER. Lessee has the right to retain possession of \nthe Premises or any part thereof beyond the expiration or termination of this \nLease for up to six (6) months with one hundred eighty (180) days prior \nwritten notice to Lessor. In the event that Lessee holds over, then the Base \nRent shall be increased to 150% of the Base Rent applicable immediately \npreceding the expiration or termination. Nothing contained herein shall be \nconstrued as consent by Lessor to any holding over by Lessee.\n\n27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed\nexclusive but shall, wherever possible, be cumulative with all other remedies at\nlaw or in equity. \n\n28. COVENANTS AND CONDITIONS; CONSTRUCTION OF AGREEMENT. All provisions of \nthis Lease to be observed or performed by Lessee are both covenants and\nconditions. In construing this Lease, all headings and titles are for the\nconvenience of the Parties only and shall not be considered a part of this\nLease. Whenever required by the context, the singular shall include the plural\nand vice versa. This Lease shall not be construed as if prepared by one of the\nParties, but rather according to its fair meaning as a whole, as if both Parties\nhad prepared. \n\n29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the \nparties, their personal representatives, successors and assigns and be governed\nby the laws of the State in which the Premises are located. Any litigation\nbetween the Parties hereto concerning this Lease shall be initiated in the\ncounty in which the Premises are located.\n\n30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.\n\n 30.1 SUBORDINATION. This Lease and any Option granted hereby shall be\nsubject and subordinate to any ground lease, mortgage, deed of trust, or other\nhypothecation or security device (collectively, \"SECURITY DEVICE\"), now or\nhereafter placed upon the Premises, to any and all advances made on the security\nthereof, and to all renewals, modifications, and extensions thereof. Lessee\nagrees that the holders of any such Security Devices (in this Lease together\nreferred to as \"LENDER\") shall have no liability or obligation to perform any of\nthe obligations of Lessor under this Lease. Any Lender may elect to have this\nLease and\/or any Option granted hereby superior to the lien of its Security\nDevice by giving written notice thereof to Lessee, whereupon this Lease and such\nOptions shall be deemed prior to such Security Device, notwithstanding the\nrelative dates of the documentation or recordation thereof.\n\n 30.2 ATTORNMENT. In the event that Lessor transfers title to the\nPremises, or the Premises are acquired by another upon the foreclosure or\ntermination of a Security Device to which this Lease is subordinated (i) Lessee\nshall, subject to the non-disturbance provisions of Paragraph 30.3, attorn to\nsuch new owner, and upon request, enter into a new lease, containing all of the\nterms and provisions of this Lease, with such new owner for the remainder of the\nterm hereof, or, at the election of such new owner, this Lease shall\nautomatically become a new Lease between lessee and such new owner, upon all of\nthe terms and conditions hereof, for the remainder of the term hereof, and (ii)\nLessor shall thereafter be relieved of any further obligations hereunder and\nsuch new owner \n\n\n\n\nshall assume all of Lessor's obligations hereunder, except that such new owner\nshall not (a) be liable for any act or omission of any prior lessor or with\nrespect to events occurring prior to acquisition of ownership; (b) be subject to\nany offsets or defenses which Lessee might have against any prior lessor, (c) be\nbound by prepayment of more than one month's rent, or (d) be liable for the\nreturn of any security deposit paid to any prior lessor.\n\n 30.3 NON-DISTURBANCE. With respect to Security Devices entered into by\nLessor after the execution of this Lease. Lessee's subordination of this Lease\nshall be subject to receiving a commercially reasonable non-disturbance\nagreement (a \"NON-DISTURBANCE AGREEMENT\") from the Lender which Non-Disturbance\nAgreement provides that Lessee's possession of the Premises, and this Lease,\nincluding any options to extend the term hereof, will not be disturbed so long\nas Lessee is not in Breach hereof and attorns to the record owner of the\nPremises. Further, within 60 days after the execution of this Lease, Lessor\nshall use its commercially reasonable efforts to obtain a Non-Disturbance\nAgreement from the holder of any pre-existing Security Device which is secured\nby the Premises. In the event that Lessor is unable to provide the\nNon-Disturbance Agreement within said 60 days, then Lessee may, at Lessee's\noption, directly contact Lender and attempt to negotiate for the execution and\ndelivery of a Non-Disturbance Agreement.\n\n 30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30\nshall be effective without the execution of any further documents; provided,\nhowever, that, upon written request from Lessor or a Lender in connection with a\nsale, financing or refinancing of the Premises, Lessee and Lessor shall execute\nsuch further writings as may be reasonably required to separately document any\nsubordination, attornment and\/or Non-Disturbance Agreement provided for herein.\n\n31. ATTORNEYS' FEES. If any Party or Broker brings an action or proceeding\ninvolving the Premises whether founded in tort, contract or equity, or to\ndeclare rights hereunder, the Prevailing Party (as hereafter defined) in any\nsuch proceeding, action, or appeal thereon, shall be entitled to reasonable\nattorneys' fees Such fees may be awarded in the same suit or recovered in a\nseparate suit, whether or not such action or proceeding is pursued to decision\nor judgment. The term, \"PREVAILING PARTY\" shall include, without limitation, a\nParty or Broker who substantially obtains or defeats the relief sought, as the\ncase may be, whether by compromise, settlement, judgment, or the abandonment by\nthe other Party or Broker of its claim or defense. The attorneys' fees award\nshall not be computed in accordance with any court fee schedule, but shall be\nsuch as to fully reimburse all attorneys' fees reasonably incurred. In addition,\nLessor shall be entitled to attorneys' fees, costs and expenses incurred in the\npreparation and service of notices of Default and consultations in connection\ntherewith, whether or not a legal action is subsequently commenced in connection\nwith such Default or resulting Breach ($200 is a reasonable minimum per\noccurrence for such services and consultation).\n\n32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents \nshall have the right to enter the Premises at any time, in the case of an\nemergency, and otherwise at reasonable times for the purpose of showing the same\nto prospective purchasers, lenders, or tenants, and making such alterations,\nrepairs, improvements or additions to the Premises as Lessor may deem necessary.\nAll such activities shall be without abatement of rent or liability to Lessee.\nLessor may at any time place on the Premises any ordinary \"FOR SALE\" signs and\nLessor may during the last 6 months of the term hereof place on the Premises any\nordinary \"FOR LEASE\" signs. Lessee may at any time place on the Premises any\nordinary \"FOR SUBLEASE\" sign.\n\n33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, any \nauction upon the Premises without Lessor's prior written consent. Lessor shall\nnot be obligated to exercise any standard of reasonableness in determining\nwhether to permit an auction. \n\n34. SIGNS. Except for ordinary \"For Sublease\" signs which may be placed \nonly on the Premises, Lessee shall not place any sign upon the Project without\nLessor's prior written consent. All signs must comply with all Applicable\nRequirements. \n\n35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by\nLessor, the voluntary or other surrender of this Lease by Lessee, the mutual\ntermination or cancellation hereof, or a termination hereof by Lessor for Breach\nby Lessee, shall automatically terminate any sublease or lesser estate in the\nPremises; provided, however, that Lessor may elect to continue any one or all\nexisting subtenancies. Lessor's failure within 10 days following any such event\nto elect to the contrary by written notice to the holder of any such lesser\ninterest, shall constitute Lessor's election to have such event constitute the\ntermination of such interest.\n\n36. CONSENTS. Except as otherwise provided herein, wherever in this Lease \nthe consent of a Party is required to an act by or for the other Party, such\nconsent shall not be unreasonably withheld or delayed. Lessor's actual\nreasonable costs and expenses (including but not limited to architects',\nattorneys', engineers' and other consultants' fees) incurred in the\nconsideration of, or response to, a request by Lessee for any Lessor consent,\nincluding but not limited to consents to an assignment, a subletting or the\npresence or use of a Hazardous Substance, shall be paid by Lessee upon receipt\nof an invoice and supporting documentation therefor. Lessor's consent to any\nact, assignment or subletting shall not constitute an acknowledgment that no\nDefault or Breach by Lessee of this Lease exists, nor shall such consent be\ndeemed a waiver of any then existing Default or Breach, except as may be\notherwise specifically stated in writing by Lessor at the time of such consent.\nThe failure to specify herein any particular condition to Lessor's consent shall\nnot preclude the imposition by Lessor at the time of consent of such further or\nother conditions as are then reasonable with reference to the particular matter\nfor which consent is being given. In the event that either Party disagrees with\nany determination made by the other hereunder and reasonably requests the\nreasons for such determination, the determining party shall furnish its reasons\nin writing and in reasonable detail within 10 business days following such\nrequest. \n\n37. GUARANTOR.\n\n 37.1 EXECUTION. The Guarantors, if any, shall each execute a guaranty\nin the form most recently published by the American Industrial Real Estate\nAssociation, and each such Guarantor shall have the same obligations as Lessee\nunder this Lease.\n\n\n\n\n 37.2 DEFAULT. It shall constitute a Default of the Lessee if any\nGuarantor fails or refuses, upon request to provide: (a) evidence of the\nexecution of the guaranty, including the authority of the party signing on\nGuarantor's behalf to obligate Guarantor, and in the case of a corporate\nGuarantor, a certified copy of a resolution of its board of directors\nauthorizing the making of such guaranty, (b) current financial statements, (c)\nan Estoppel Certificate, or (d) written confirmation that the guaranty is still\nin effect.\n\n38. QUIET POSSESSION. Subject to payment by Lessee of the Rent and\nperformance of all of the covenants, conditions and provisions on Lessee's part\nto be observed and performed under this Lease, Lessee shall have quiet\npossession and quiet enjoyment of the Premises during the term hereof.\n\n39. OPTIONS. If Lessee is granted an option, as defined below, then the \nfollowing provisions shall apply.\n\n 39.1 DEFINITION. \"Option\" shall mean: (a) the right to extend the term\nof or renew this Lease or to extend or renew any lease that Lessee has on other\nproperty of Lessor; (b) the right of first refusal or first offer to lease\neither the Premises or other property of Lessor; (c) the right to purchase or\nthe right of first refusal to purchase the Premises or other property of Lessor.\n\n 39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Any Option granted to Lessee\nin this Lease is personal to the original Lessee, and cannot be assigned or\nexercised by anyone other than said original Lessee and only while the original\nLessee is in full possession of the Premises and, if requested by Lessor, with\nLessee certifying that Lessee has no intention of thereafter assigning or\nsubletting.\n\n 39.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple\nOptions to extend or renew this Lease, a later Option cannot be exercised unless\nthe prior Options have been validly exercised.\n\n 39.4 EFFECT OF DEFAULT ON OPTIONS.\n\n (a) Lessee shall have no right to exercise an Option: (i) during the\nperiod commencing with the giving of any notice of Default and continuing until\nsaid Default is cured, (ii) during the period of time any Rent is unpaid\n(without regard to whether notice thereof is given Lessee), (iii) during the\ntime Lessee is in Breach of this Lease, or (iv) in the event that Lessee has\nbeen given 3 or more notices of separate Default, whether or not the Defaults\nare cured, during the 12 month period immediately preceding the exercise of the\nOption.\n\n (b) The period of time within which an Option may be exercised shall\nnot be extended or enlarged by reason of Lessee's inability to exercise an\nOption because of the provisions of Paragraph 39.4(a).\n\n (c) An Option shall terminate and be of no further force or effect,\nnotwithstanding Lessee's due and timely exercise of the Option, if, after such\nexercise and prior to the commencement of the extended term, (i) Lessee fails to\npay Rent for a period of 30 days after such Rent becomes due (without any\nnecessity of Lessor to give notice thereof), (ii) Lessor gives to Lessee 3 or\nmore notices of separate Default during any 12 month period, whether or not the\nDefaults are cured, or (iii) if Lessee commits a Breach of this Lease.\n\n40. SECURITY MEASURES. Lessee hereby acknowledges that the Rent payable to\nLessor hereunder does not include the cost of guard service or other security\nmeasures, and that Lessor shall have no obligation whatsoever to provide same.\nLessee assumes all responsibility for the protection of the Premises, Lessee,\nits agents and invitees and their property from the acts of third parties.\n\n41. RESERVATIONS. Lessor reserves the right: (i) to grant, without the \nconsent or joinder of Lessee, such easements, rights and dedications that Lessor\ndeems necessary, (ii) to cause the recordation of parcel maps and restrictions,\nand (iii) to create and\/or install new utility raceways, so long as such\neasements, rights, dedications, maps, restrictions, and utility raceways do not\nunreasonably interfere with the use of the Premises by Lessee. Lessee agrees to\nsign any documents reasonably requested by Lessor to effectuate such rights. \n\n42. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to \nany amount or sum of money to be paid by one Party to the other under the\nprovisions hereof, the Party against whom the obligation to pay the money is\nasserted shall have the right to make payment \"under protest\" and such payment\nshall not be regarded as a voluntary payment and there shall survive the right\non the part of said Party to institute suit for recovery of such sum. If it\nshall be adjudged that there was no legal obligation on the part of said Party\nto pay such sum or any part thereof, said Party shall be entitled to recover\nsuch sum or so much thereof as it was not legally required to pay.\n\n43. AUTHORITY. It either Party hereto is a corporation, trust, limited\nliability company, partnership, or similar entity, each individual executing\nthis Lease on behalf of such entity represents and warrants that he or she is\nduly authorized to execute and deliver this Lease on its behalf. Each party\nshall, within 30 days after request, deliver to the other party satisfactory\nevidence of such authority.\n\n44. CONFLICT. Any conflict between the printed provisions of this Lease and\nthe typewritten or handwritten provisions shall be controlled by the typewritten\nor handwritten provisions. \n\n45. OFFER. Preparation of this Lease by either party or their agent and\nsubmission of same to the other Party shall not be deemed an offer to lease to\nthe other Party. This Lease is not intended to be binding until executed and\ndelivered by all Parties hereto. \n\n46. AMENDMENTS. This Lease may be modified only in writing, signed by the\nParties in interest at the time of the modification. As long as they do not\nmaterially change Lessee's obligations hereunder, Lessee agrees to make such\nreasonable \n\n\n\n\nnon-monetary modifications to this Lease as may be reasonably required by a\nLender in connection with the obtaining of normal financing or refinancing of\nthe Premises.\n\n47. MULTIPLE PARTIES. If more than one person or entity is named herein as \neither Lessor or Lessee, such multiple Parties shall have joint and several\nresponsibility to comply with the terms of this Lease.\n\n48. WAIVER OF JURY TRIAL. The Parties hereby waive their respective rights \nto trial by jury in any action or proceeding involving the Property or arising\nout of this Agreement.\n\n49. MEDIATION AND ARBITRATION OF DISPUTES. An Addendum requiring the \nMediation and\/or the Arbitration of all disputes between the Parties and\/or\nBrokers arising out of this Lease \/_\/ is \/_\/ is not attached to this Lease.\n\n\n\n\n\nLESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND\nPROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR\nINFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE\nTIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE\nAND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE\nPREMISES.\n\nATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN\nINDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,\nLEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT\nRELATES. THE PARTIES ARE URGED TO:\n\n 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS\nLEASE.\n\n 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE\nCONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED\nTO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES,\nTHE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS,\nCOMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE\nPREMISES FOR LESSEE'S INTENDED USE.\n\nWARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN\nPROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE\nSTATE IN WHICH THE PREMISES ARE LOCATED.\n\nThe parties hereto have executed this Lease at the place and on the dates\nspecified above (their respective signatures.\n\n<\/pre>\n
\n
\nExecuted at: Executed at:
\n —————————————– ————————————
\non: on:
\n ————————————————– ———————————————
\nBy LESSOR: By LESSEE:<\/p>\nBUTTERFIELD TECHNOLOGY PARK LLC INTEGRATED DEFENSE TECHNOLOGIES, INC., A
\n——————————————————- ————————————————
\n DELAWARE CORPORATION
\n——————————————————- ————————————————<\/p>\n
By: \/s\/ Daniel Harris By: \/s\/ William E. Collins
\n ————————————————– ——————————————-
\nName Printed: DANIEL HARRIS Name Printed: WILLIAM E. COLLINS
\n —————————————- ———————————
\nTitle: PARTNER Title: V.P.
\n ———————————————– —————————————-
\nBy: By:
\n ————————————————– ———————————————
\nName Printed: Name Printed:
\n —————————————- ———————————–
\nTitle: Title:
\n ———————————————– ——————————————
\nAddress: Address:
\n ——————————————— —————————————-<\/p>\n
——————————————————- ————————————————<\/p>\n
——————————————————- ————————————————<\/p>\n
Telephone: ( ) Telephone: ( )
\n ——— ——————————– ——- ————————–
\nFacsimile: ( ) Facsimile: ( )
\n ——- ——————————– ——- ————————–
\nFederal ID No. Federal ID No.
\n ————————————— ———————————-
\n<\/c><\/s><\/table>\n
THESE FORMS ARE OFTEN MODIFIED TO MEET CHANGING REQUIREMENTS OF LAW AND NEEDS OF
\nTHE INDUSTRY. ALWAYS WRITE OR CALL TO MAKE SURE YOU ARE UTILIZING THE MOST
\nCURRENT FORM: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 SOUTH FLOWER
\nSTREET, SUITE 600, LOS ANGELES, CA 90017. (213) 687-8777.<\/p>\n
(C)COPYRIGHT 1999 BY AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION.
\n ALL RIGHTS RESERVED.
\nNO PART OF THESE WORKS MAY BE REPRODUCED IN ANY FORM WITHOUT PERMISSION IN
\nWRITING.<\/p>\n
ADDENDUM TO STANDARD INDUSTRIAL\/COMMERCIAL MULTI-TENANT LEASE NET BETWEEN
\nBUTTERFIELD TECHNOLOGY PARK LLC AS LESSOR AND INTEGRATED DEFENSE TECHNOLOGIES,
\nINC. A DELAWARE CORPORATION AS LESSEE FOR APPROXIMATELY 52,100 OF RESEARCH & DEVELOPMENT SPACE LOCATED AT BUTTERFIELD TECHNOLOGY PARK MORGAN HILL,
\nCALIFORNIA.<\/p>\n
1. LESSEE’S CONDITIONS OF THE LEASE: The following conditions must be
\n completed in the stated time lines or this Lease may be cancelled by
\n either party.<\/p>\n
A. Lessor shall have received its Building permit from the City
\n of Morgan Hill for the building Shell and entered into a
\n construction contract by January 31, 2001.<\/p>\n
2. IMPROVEMENT ALLOWANCE: Lessor shall contribute Thirty Dollars ($30.00)
\n per square foot toward construction of the Buildings Base interior
\n improvements including architectural design, engineering, and building
\n permits. Any additional tenant improvement costs shall be paid for by
\n Lessee.<\/p>\n
3. RENEWAL AT FAIR MARKET RENT.<\/p>\n
A. Renewal. Lessee shall have an option (the “Renewal Option”) to
\n extend the term of this lease for two (2) renewal terms of
\n five (5) years (the “Renewal Term”), by giving Owner notice
\n thereof not more than twelve (12) months, but at least six (6)
\n months, prior to, the date set forth above for the expiration
\n of the term of this lease (with time to be of the essence as
\n to the timely exercise of such Renewal Option). If Lessee
\n shall exercise the Renewal Option, then this lease shall be
\n extended for the Renewal Term upon all of the terms,
\n covenants, and conditions contained in this lease, except
\n that, during the Renewal Term the fixed annual rent shall be
\n market rental value (the “Market Value Rent”) of the demised
\n premises on the date that Lessee exercises the Renewal Option
\n (the “Exercise Date”), determined as provided in Section (B)
\n below.<\/p>\n
B. Arbitration. The term “Market Value Rent” shall mean the
\n annual fixed rent that a willing lessee would pay and a
\n willing Lessor would accept in an arms-length lease of the
\n demised premises as of the Exercise Date. If Owner and Lessee
\n shall fail to agree upon the Market Value Rent within sixty
\n (60) days after the Exercise Date, then Owner and Lessee each
\n shall give notice (the “Determination Notice”) to the other
\n setting forth their respective determinations of the Market
\n Value Rent, either party may apply to the American Arbitration
\n Association or any successor thereto for the designation of an
\n arbitrator satisfactory to both parties to render a final
\n determination of the Market Value Rent. The arbitrator shall
\n be a real estate appraiser or consultant who shall have at
\n least fifteen (15) years continuous experience in the business
\n of appraising. The arbitrator shall conduct such hearings and
\n investigations as the arbitrator shall deem appropriate and
\n shall, within thirty (30) days after having been appointed,
\n choose one of the determinations set forth in either Owner’s
\n or Lessee’s Determination Notice, and that choice by the
\n arbitrator shall be binding upon Owner and Lessee. Each party
\n shall pay its own counsel fees and expenses, if any, in
\n connection with any arbitration under this Section (B) and the
\n parties shall share equally all other expenses and fees of anv
\n such arbitration. The determination rendered in accordance
\n with the provisions of this Section (B) shall be final and
\n binding in fixing the Market Value Rent. The arbitrator shall
\n not have the power to add to, modify, or change any of the
\n provisions of this lease.<\/p>\n
4. RIGHT OF FIRST REFUSAL:<\/p>\n
A. As long as this Lease is in full force and effect without
\n default by Lessee, Lessor agrees that prior to renting any
\n available space in the Building (the “First Refusal Space”) to
\n a third party, Lessor will submit to Lessee a copy of the
\n proposed lease which Lessor is willing to accept from the
\n third party (the “Offered Lease”). On or before the 5th
\n business day after the date of such submission Lessee will
\n have the right (the “First Refusal Right”) to send Lessor a
\n notice stating that Lessee elects to rent the First Refusal
\n Space upon the identical terms and conditions set forth in the
\n Offered Lease (the “Offered Lease Terms”). Such notice must be
\n postmarked within the 5-day period and sent by registered or
\n certified mail, return receipt requested.<\/p>\n
B. If Lessee duly and timely exercises the First Refusal Right,
\n Lessor and Lessee will promptly (and in any event within 5
\n business days after Lessor’s receipt of Lessee’s notice and
\n Lessor review and approval of Lessee’s financials) enter into
\n a lease for the First Refusal Space (the “New Lease”) on the
\n Offered Lease Terms. If for any reason Lessee fails to duly
\n and timely exercise the First Refusal Right, or if Lessee
\n properly exercises it but thereafter for any reason (except
\n Lessor’s fault) does not timely enter into the New Lease,
\n Lessor will be free to rent the First Refusal Space to another
\n Lessee on the Offered Lease Terms.<\/p>\n
5. CPI RENTAL ADJUSTMENT: Effective as of each anniversary date of the
\n commencement of the term, the Base Rent shall be increased to equal the
\n sum of (i) the Base Rent as specified in Paragraph 1.5 of the Lease,
\n plus (ii) the product obtained by multiplying such amount by the
\n percentage increase in the Consumer Price Index measured from the
\n measuring month two months preceding the commencement of the term to
\n the measuring month two months preceding the anniversary date in
\n question. As used herein, the term “Consumer Price Index” shall mean
\n the United States Department of Labor’s Bureau of Labor Statistics’
\n Consumer Price Index, All Urban Consumers, All Items, San
\n Francisco-Oakland-San Jose, California (1982-84 equals 100), or the
\n successor of such index. However, throughout the original term of the
\n Lease the CPI rental adjustment shall not be less than three percent
\n (3%) nor more than eight percent (8%) of the monthly rent. Lessor shall
\n give notice to Lessee of the amount of the new Base Rent which shall be
\n due and payable effective as of the anniversary date and Lessee shall
\n upon the giving of such notice pay Landlord any shortage in Base Rent
\n accruing between the current anniversary date and the date of the
\n notice.<\/p>\n
6. SUBLEASE PROFITS: In addition to all of the provisions in Paragraph 12
\n of the Lease Agreement, Lessor agrees to split 50\/50 all sublease
\n profits after Lessee deducts all normal sublease expenses.<\/p>\n
7. LETTER OF CREDIT: Lessee shall provide Lessor with a Letter of Credit
\n in the amount of $250,080.00 in the form of an irrevocable Letter of
\n Credit as hereinafter described (the “Letter of Credit”):<\/p>\n
The Letter of Credit shall be (i) an irrevocable standby letter of
\n credit, (ii) be issued by a reputable bank reasonably approved by
\n Lessor, (iii) name Lessor as beneficiary, (iv) payable on sight draft
\n accompanied by a letter from Lessor’s attorney licensed to practice in
\n the State of California stating that upon review of the Standard
\n Industrial\/Commercial Multi-Tenant Lease-Net dated January 4, 2001, by
\n and between Butterfield Technology Park, LLC (“Lessor”) and Integrated
\n Defense Technologies, Inc. (“Lessee”), that the Lessor is entitled to
\n payment from Lessee because an Event of Default under the Lease has
\n occurred to the damage of the Lessor, written notice provided to Lessee
\n and that all applicable cure periods have expired, (v) in a form
\n reasonably acceptable to Lessor, which shall include provisions
\n protecting Lessor in the event of bankruptcy of Lessee, (vi) for an
\n initial term of the lease sixty (60) months. However, in the event
\n Lessee is not in default, the amount of the Letter of Credit shall be
\n reduced in months 13 and 25 by $83,360.00 for a total reduction of
\n $166,720.00. The Letter of Credit will be reduced by the remaining
\n $83,360.00, 2 months after the term of the lease if the option to renew
\n this contract is not taken and if the building is delivered to the
\n Lessor in broom clean condition.<\/p>\n
Within four (4) business days following execution of this Lease, Lessee
\n shall provide written proof to Lessor of Lessee’s application to
\n Lessee’s lender for the Letter of Credit. Within thirty (30) business
\n days following execution of this Lease, Lessee or Lessee’s lender shall
\n provide written notice to Lessor that the Letter of Credit has been
\n secured as set forth above, and provide all of the pertinent banking
\n account information for the Letter of Credit. Lessee shall provide
\n Lessor with the Letter of Credit at the same time.<\/p>\n
8. Lessor shall be responsible for delivering the shell building to Lessee
\n by July 1, 2001 based on Lessee having performed all of its obligations
\n under this Lease and all tenant improvements shall be completed by
\n Lessee with Lessor’s approval.<\/p>\n
LESSOR LESSEE<\/p>\n
By: \/s\/ Daniel Harris By: \/s\/ William E. Collins
\n ———————————- ———————————
\nDate: 2\/2\/01 Date:
\n ——————————— ——————————-<\/p>\n
BUTTER FIELD TECHNOLOGY PARK LLC.<\/p>\n
AMENDMENT TO LEASE<\/p>\n
This Amendment to Lease is entered into by and between IDT\/Zeta, Lessee
\nand Butterfield Technologies, Inc., Lessor, for the purposes of amending that
\ncertain Lease dated January 4, 2001 for a portion of the real estate property
\nlocated at 17680 Butterfield Blvd. (the Premises).<\/p>\n
Whereas Lessor has performed all of its obligations due to date, and<\/p>\n
Whereas Lessor is in the process of completing construction of The
\nPremises, and<\/p>\n
Whereas Lessee desires to start its Tenant Improvements prior to the
\ntime that Lessee is scheduled to take possession and rent becomes due under the
\nLease, and<\/p>\n
Whereas Lessor is willing to allow Lessee access to the Premises for
\nthe purpose of starting construction of the Tenant Improvements,<\/p>\n
The Parties, for consideration acknowledged and accepted, agree as
\nfollows:<\/p>\n
1. Lessor agrees to allow Lessee early possession of The Premises
\n for the purpose of Lessee beginning construction of its Tenant
\n Improvements.<\/p>\n
2. Rent due under the Lease does not begin until the existing
\n date of the initiation of the term of the Lease, July 1, 2001.<\/p>\n
3. Notwithstanding any term or condition of the Lease, Lessee
\n acknowledges acceptance of The Premises as they now are and
\n that Lessor has delivered The Premises to Lessee in full
\n compliance with the terms of the Lease.<\/p>\n
4. Lessee expressly waives any claims that the Premises have not
\n been delivered to it in complete condition, minus the Tenant
\n Improvements which Lessee acknowledges responsibility for
\n constructing in a timely manner. Lessee expressly waives any
\n claim against Lessor or its agents, for delay or disruption.<\/p>\n
5. Lessee agrees that it will not hinder, delay, obstruct or
\n otherwise interfere with Lessor’s work on The Premises and
\n that Lessor’s contractors have priority in the timing and
\n scheduling of their work including storage of materials,
\n staging, landscaping and the completion of the parking areas
\n including asphalting and striping. <\/p>\n
Page 1<\/p>\n
Lessee agrees to cooperate with Lessor’s contractors and
\n coordinate their contractors’ and subcontractors’ work with
\n Lessor’s when necessary.<\/p>\n
6. Lessee acknowledges that it may or is beginning work on The
\n Premises without an approved building permit from the City.
\n Lessee desires to begin its work as soon as possible and
\n assumes all the risk and financial responsibility for
\n performing the Tenant Improvements without such permit or
\n permits.<\/p>\n
Lessee agrees that Lessor shall have no obligation or responsibility to
\npay, pursuant to the terms of the Lease, for any Tenant Improvements not in
\nplace and approved by the City building inspectors. Lessee agrees to indemnify
\nLessor for any damages Lessor may incur should the City building inspectors or
\nother municipal authorities shut down all construction on The Premises due to
\nLessee’s activities.<\/p>\n
The Parties agree that this Amendment to Lease is not a novation of the
\nexisting Lease and that all of the existing terms and conditions of the Lease
\nare in full force and effect except as amended or modified herein.<\/p>\n
IDT\/Zeta<\/p>\n
By \/s\/ Norman D. Stecklein
\n —————————————<\/p>\n
ITS PRESIDENT \/ CEO
\n ————————————–<\/p>\n
Butterfield Technologies, Inc.<\/p>\n
By \/s\/
\n —————————————<\/p>\n
ITS
\n ————————————–<\/p>\n
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