HomeMy WebLinkAboutContracts & Agreements_228-2003_CCv0001.pdf 11/25/0-3)
Denise Ausherman
212 Brook Side Ave.
Redlands, CA 92373
7')
RE- Police Department Lease
406 Orange Street, 92C
Redlands, CA 92374
74
Dear Denise,
Enclosed please find 2 copies of The Lease Agreement and The Rent Adjustment Agreement.
Please execute both copies, keep one for your own records and forward the second copy to me.
Please initial all the pages at the bottom right hand comer and sign the page 14 of The Lease
Agreement, Please be advised that the documents will be voided if any changes are done.
If you have any question please contact me at 818-708-0888 Ext. 22.
Sincerely
Matthew Bamasian
Assistant Property Manager
16935 Vanowen St., Ste. 203, Van Nuys, CA 91406 Tel: (818) 708-0888 Fax: (818) 708-0130 Email: ophirmgt@earthlink.net
*))�r
STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE - NET
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. Basic Provisions("Basic Provisions").
11 Parties:This Lease("Lease"),dated for reference purposes only November 24 2003,is
made by and between Oranqe Street Plaza J'TC
("Lessor")and
City of Redlands
("Lessee"),(collectively the"Parties",or individually a-Party").
1.2(a) Premises: That certain portion of the Project (as defined below), including all improvements therein or to be provided by Lessor under the
terms of this Lease,commonly known by the street address of 406 Orange Street, #2C ,located
in the City of Redlands County of San Bernardino State of CA
,with zip code 9 2 3 7 4 as outlined on Exhibit A attached hereto("Premises")and generally
described as(describe briefly the nature of the Premises): Re t a i 1 S t o re
In addition to Lessee's rights to use and occupy the Premises as hereinafter specified, Lessee shall have non-exclusive rights to the Common Areas(as defined in
Paragraph 2.7 below) as hereinafter specified, but shall not have any rights to the roof, exterior walls or utility raceways of the building containing the Premises
("Building")or to any other buildings in the Project. The Premises,the Building, the Common Areas, the land upon which they are located, along with all other
buildings and improvements thereon,are herein collectively referred to as the"Project." (See also Paragraph 2)
1,2(b) Parking: Conunon Area unreserved vehicle parking spaces ("Unreserved Parking Spaces"); and
None reserved vehicle parking spaces("Reserved Parking Spaces"). (See also Paragraph 2,6)
1.3 Term: Fi ve years and --------------------------- months ("Original Term")
commencing 12/2/2 003 ("Commencement Date")and ending 12/1/2 0 0 8
("Expiration Date"). (See also Paragraph 3)
1.4 Early Possession:N/A ("Early Possession Date").
(See also Paragraphs 3.2 and 3.3)
1.5 Base Rent:$2,4 71.70 per month("Base Rent"'),payable on the 1 s t
day of each month commencing 12/2/2 0 0 3 (See also Paragraph 4)
If this box is checked,there are provisions in this Lease for the Base Rent to be adjusted.
1.6 Lessee's Share of Common Area Operating Expenses: !.22 (1, 498 scfft) percent(l..22 %)("'Lessee's Share"),
13 Base Rent and Other Monies Paid Upon Execution:
(a) Base Rent:$2, 4 711 .70 for the period Month
(b) Common Area Operating Expenses: $524 . 30 for the period Month
(c) Security Deposit:$N/A ("Security Deposit"). (See also Paragraph 5)
(d) Other:$N/A for N/A
(e) Total Due Upon Execution of this Lease:$N/A
1,8 Agreed Use:O enation of a Police Department Sub-Station
(See also Paragraph 6)
1.9 Insuring Party. Lessor is the"Insuring Party". (See also Paragraph 8)
1.10 Real Estate Brokers: (See also Paragraph 15)
(a) Representation: The following real estate brokers (the "Brokers") and brokerage relationships exist in this transaction (check
applicable boxes):
M Eric Tre4batch represents Lessor exclusively("Lessor's Broker");
0 represents Lessee exclusively("Lessee's Broker");or
n represents both Lessor and Lessee("Dual Agency")
(b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Brokers the brokerage fee
agreed to in a separate written agreement(or if there is no such agreement,the sum of N/A or %of the total Base Rent folhe brokerage
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services rendered bythe arokers).
1.11 Guarantor. The obligations oythe Lessee under this Lease are»oboguaranteed by _
("Guarantor"). (See also Paragraph 37)
112 Addenda and Exhibits, Attached hereto is an Addendum or Addenda consisting of Paragraphs 5 0 through —————— anuexWuits
_fthmvgh——————�.all ofwhich constitute apart ufthis Lease.
2. Premises.
2.1 Letting. Lessor hereby leases to Lessee,and Lessee hereby leases from Lessor,the Premises,for the term,at the rental,and upon all of the
terms,covenants and conditions set forth in this Lease. Unless otherwise provided herein,any statement of size set forth in this Lease,or that may have been used
incalculating Rent, iunnapproximation which the Parties agree isreasonable and any payments based thereon are not subject torevision whether o'not the actual
size iomore mless.
2.2 Condition. Lessor shall deliver that portion of the Premises contained within the Building('Unit")to Lessee broom clean and free of debris on
the Commencement Date or the Early Possession Date,whichever first occurs("Start Date"),and,so long as the required service contracts described in Paragraph
7.1(b) below are obtained byLessee and in effect within thirty days following the Start Dam.wa,mma that the existing e|emrioa|, p|umbing, fire sprinkler, nghUng,
heating,ventilating and air conditioning systems("HVAC"), loading doors, if any, and all other such elements in the Unit, other than those constructed by Lessee,
shall be in good operating condition on said date and that the structural elements of the roof,bearing walls and foundation of the Unit shall be free of material defects.
|fonon-compliance with such warranty exists amof the Start Date, or if one of such systems or elements should malfunction or fail within the appropriate warranty
period, Lessor shall,aoLessor's sole obligation with respect to such matter,except as otherwise provided in this Lease, promptly after receipt ofwritten noticefrom
Lessee setting forth with specificity the nature and extent of such non-compliance, malfunction or failure, rectify same at Lessor's expense. The warranty periods
shall be as follows: (i)6 months as to the HVAC systems, and(ii) 30 days as to the remaining systems and other elements of the Unit. If Lessee does not give
Lessor the required notice within the appropriate warranty period,correction of any such non-compliance, malfunction or failure shall be the obligation of Lessee at
Lessee's sole cost and expense(except for the repairs to the fire sprinkler systems,roof,foundations,and/or bearing walls-see Paragraph 7).
2.5 Compliance. Lessor warrants that the improvements uothe Premises and the Common Areas comply with the building codes that were in
effect at the time that each such improvement,or portion thereof,was constructed,and also with all applicable laws,covenants mrestrictions cxrecord, regulations,
and ordinances in effect on the Start Date("Applicable Requirements"). Said warranty does not apply tothe use mwhich Lessee will put the Premises o,toany
Alterations or Utility Installations(as defined in Paragraph 7.3(a))made or to be made by Lessee. NOTE: Lessee is responsible for determining whether or not
the Applicable Requirements,and especially the zoning,are appropriate for Lessee's intended use,and acknowledges that past uses of the Premises
may no longer be allowed, If the Premises do not comply with said warranty, Lessor shall,except as otherwise provided, promptly after receipt of written notice
from Lessee setting forth with specificity the nature and extent of such non-compliance,rectify the same at Lessors expense. |fLessee does not give Lessor written
notice ofenon-compliance with this warranty within 6 months following the Start Date,correction of that non-compliance shall be the obligation of Lessee at Lessee's
sole cost and expense. If the Applicable Requirements are hereafter changed so as to require during the term of this Lease the construction of an addition to or an
alteration of the Vnu. Premises and/or BuUding, the remediation of any Hazardous Gubstanoe, or the reinforcement or other physical modification of the uoit,
Premises and/or Building("Capital Expenditure"),Lessor and Lessee shall allocate the cost n/such work aefollows:
(a) Subject to Paragraph 2.3(c) helow, if such Capital Expenditures are required as a result of the specific and unique use of the
Premises by Lessee as compared with uena by tenants in ganera|, kmaoe shall be fully responsible for the cost/herenf, p,owued, however that if such Capital
Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rent, Lessee may instead terminate this Lease unless
Lessor notifies Lessee, in writing,within 10 days after receipt of Lessee's termination notice that Lessor has elected topay the difference between the actual cost
thereof and the amount equal toOmonths' Base Rent. |fLessee elects termination, Lessee shall immediately cease the use ofthe Premises which requires such
Capital Expenditure and deliver toLessor written notice specifying atermination date at least oodays thereafter. Such termination date shall,however,innnevent ue
earlier than the last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure,
(u) If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally
mandated seismic modifications),then Lessor and Lessee shall allocate the obligation to pay for the portion of such costs reasonably attributable oothe Premises
pursuant bzthe formula set out mParagraph r.1(d);provided,however,that if such Capital Expenditure is required during the last 2 years of this Lease or if Lessor
reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall have the option to terminate this Lease upon 9Odays prior written
notice to Lessee unless Lessee notifies Lessm, in writing, within 10 days after receipt of Leemo/s termination notice that Lessee will paw for such Capital
Expenditure. |fLessor does not elect to terminate,and fails to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same,
with|mmmst.from Rent until Lessor's uhp"a o/such costs have been fully paid. If Lessee is unable tufinance Lessor's eham,o/if the balance of the Rent due and
payable for the remainder ofthis Lease iunot sufficient to fully reimburse Lessee on an offset basis,Lessee shall have the right to terminate this Lease upon 30 days
written notice mLessor.
(o) Notwithstanding the above,the provisions concerning Capital Expenditures are intended to apply only to non-voluntary, unexpected,
and new Applicable Requirements, If the Capital EwmndUomu are instead triggered by Lessee as a result of an actual o, proposed change in use, change in
intensity o,use,urmodification tothe Premises then,and inthat event, Lessee shall uafully responsible for the cost thereof, and Lessee shall not have any right»o
terminate this Lease.
u: Acknowledgements. Lessee acknowledges that: (a) it has been advised by Lessor and/o, Brokers to aat|m0 itself with respect mthe
condition of the Premises (including but not limited mthe electrical, HVAC and fire sprinkler system*, socerkty, environmental ospactm, and compliance with
Applicable Requirements and the Americans with Disabilities Act), and their suitability for Lessee's intended use, (b) Lessee has made such investigation as it
deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises,and(c)neither Lessor,
Lessor's agents, nor Brokers have made any oral or written representations orwarranties with respect to said matters other than as set forth in this Lease. In
addition,Lessor acknowledges that:(i)Brokers have made nnrepresentations,promisesorwarranties concerning Lessee's ability tohonor the Lease nrsuitability vo
occupy the Premises,and(h)itiaLessor's sole responsibility toinvestigate the financial capability and/or suitability ofall proposed tenants.
2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of no force or effect ifimmediately prior mthe
Start Date Lessee was the owner or occupant of the Premises. In such event,Lessee shall be responsible for any necessary corrective work,
2.6 Vehicle Parking. Lessee oheo be entitled to use the number of Unreserved Parking Spaces and Reserved Parking 8pooem specified in
Paragraph Io(b)on those portions of the Common Arem designated from time ootime byLessor for parking. Lessee shall not use more parking spaces than said
number. Said parking spaces shall be used for parking by vehicles no larger than full-size passengerautomobiles nrpick-up trucks, herein called"Permitted Size
Vehicles." Lessor may regulate the loading and vmuouing of vehicles by adopting Rules and Regulations as provided in Paragraph 2.9. No vehicles other than
Permitted Size Vehicles may beparked mthe Common Area without the prior written permission ovLessor.
(m) Lessee shall not permit mallow any vehicles that belong to or are controlled by Lessee or Lessee's employees, suppliers,shippers,
customers,contractors or invitees to be loaded,unloaded,or parked in areas other than those designated by Lessor for such activities.
(b) Lessee shall not service mrstore any vehicles mthe Common Areas.
(c) |fLessee permits orallows any o[the prohibited activities described in this Paragraph 2,6, then Lessor shall have the right,without
notice, in addition to such other rights and remedies that it may have,to remove or tow away the vehicle involved and charge the cost to Lessee,which cost shall be
immediately payamaupon demand uyLessor.
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27 Common Areas'Definition. The term"Common Areas"is defined as all areas and facilities outside the Premises and within the exterior
boundary mm of the Project and interior utility raceways and installations within the Unit that are provided and designated by the Lessor from time mtime for the
general non-exclusive use of Lessor, Lessee and other tenants of the Project and their respective employees, uvppxem, abippers, cvsmmers, contractors and
invitees,including parking areas,loading and unloading areas,trash areas,roadways,walkways,driveways and landscaped areas.
2.8 Commonxremx-LosweenRighto, Lessor grants»nLessee, for the benefit nfLessee and its employees, suppliers, shippers, cvntractors,
customers and invitees, during the term ofthis Lease,the non-exclusive right tnuse, incommon with others entitled msuch use, the Common Areas aothey exist
from time totime, subject toany rights, pomem, and privileges reserved by Lessor under the terms hereof or under the terms ofany rules and regulations or
restrictions governing the use nrthe Project. Under no circumstances shall the right herein granted to use the Common Areas be deemed to include the right to
store any property, temporarily or permanently, in the Common Areas. Any such storage shall be permitted only by the prior written consent of Lessor or Lessor's
designated agent,which consent may b*revoked at any time. In the event that any unauthorized storage shall occur then Lessor shall have the right,without notice,
in addition to such other rights and remedies that it may have,to remove the property and charge the cost to Lessee,which cost shall be immediately payable upon
demand hyLessor.
2.9 Common Areas - Rules and Regulations. Lessor ursuch other person(s) as Lessor may appoint oxan have the exclusive control and
management of the Common Areas and shall have the right,from time to time,to establish, modify, amend and enforce reasonable rules and regulations("Rules
and Regulations")for the management, safety, care,and cleanliness of the grounds,the parking and unloading of vehicles and the preservation of good order,as
well aofor the convenience ufother occupants cxtenants of the Building and the Project and their invitees. Lessee agrees voabide byand conform toall such Rules
and Regulations,and to cause its employees,suppliers, shippers,customers,contractors and invitees to so abide and conform. Lessor shall not beresponsible tu
Lessee for the non-compliance with said Rules and Regulations by other tenants of the Project.
2.10 CommonAmau-Changms. Lessor shall have the right,inLessor's sole discretion,from time totime:
(e) Tomake changes Nthe Common Areas, including,without limitation,changes in the location,size,shape and number of driveways,
entrances,parking spaces,parking areas,loading and unloading areas,ingress,egress,direction of traffic,landscaped areas,walkways and utility raceways;
available; (b) Toclose temporarily any ofthe Common Areas for maintenance purposes svlong osm �
reasonable mPremises
(m Tndesignate other land outside the boundaries ofthe Project mbnepart of the Common Areas;
(u) Toadd additional buildings and improvements mthe Common Areas;
(e) To use the Common Areas while engaged in making additional improvements, repairs mra|vaouioos to the Project, o, any portion
thereof;and
M Touoand perform such other acts and make such other changes in,mmwith respect mthe Common Areas and Project as Lessor
may,mthe exercise ofsound business judgment,deem mueappropriate.
S. Tann.
31 Term. The Commencement Date,Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.
32 Early Possession. If Lessee totally or partially occupies the Premises prior to the Commencement Date,the obligation to pay Base Rent shall
be abated for the period of such early possession. All other terms of this Lease(including but not limited to the obligations to pay Lessee's Share of Common Area
Operating Expenses, Real Property Taxes and insurance premiums and to maintain the Premises)shall, however, be in effect during such period, Any such early
possession shall not affect the Expiration Date.
3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If,despite said efforts, Lessor is unable to deliver possession as agreed, Lessor shall not be subject to any liability therefor, nor shall such
failure affect the validity ofthis Lease. Lessee shall not, however, be obligated to pay Rent o, perform its other obligations until K receives possession of the
Premises. If possession is not delivered within 60 days after the Commencement Date,Lessee may,otits option,uynotice inwriting within 1Udays after the end uf
such 0Uday period,cancel this Lease, in which event the Parties shall be discharged from all obligations hereunder. If such written notice is not received by Lessor
within said 10 day period, Lessee's right to cancel shall terminate, Except as otherwise pmmded, if possession is not tendered to Lessee bythe Start Date and
Lessee does not terminate this Lease, as aforesaid, any period of rent abatement that Lessee would otherwise have enjoyed shall run from the date ofdelivery«[
possession and continue for a period equal to what Lessee would otherwise have enjoyed under the terms heneof,but minus any days urdelay caused bythe acts o,
omissions of Lessee. If possession of the Premises is not delivered within 4 nmntbo after the Commencement Date. this Leese shall terminate unless other
agreements are reached between Lessor and Lessee,inwriting.
3.4 Lessee Compliance. Lessor shall not berequired to tender possession of the Premises to Lessee until Lessee complies with its obligation to
provide evidence of insurance(Paragraph 8.5), Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under this Lease from
and after the Start Dete, including the payment of Rent, notwithstanding Lessor's election mwithhold possession pending receipt of such evidence ofinsurance.
Further, nLessee is required to perform any other conditions prior to or concurrent with the Start Date,the Start Date shall occur but Lessor may elect to withhold
possession until such conditions are satisfied.
*. Rent.
4.1 Rent Defined, All monetary obligations of Lessee to Lessor under the terms of this Lease(except for the Security Deposit)are deemed to be
rent("Rent"),
*.0 Common Area Operating Expenses. Lessee shall pay mLessor during the term hereof, inaddition 0othe Base Rent, Lessee's Share(as
specified inParagraph 1�6)of all Common Area Operating Expenses,as hereinafter defined,during each calendar year of the term of this Lease, in accordance with
the following provisions:
(o) "Common Area Operating Exppnovm" are definod, for purposes of this Lewme, as all costs incurred by Lessor relating to the
ownership and operation ofthe Project, including,but not limited to,the following:
(i) The operation,repair and maintenance,in neat,clean,good order and condition of the following:
(aa) The Common Areas and Common Area improvements,including parking areas,loading and unloading
trash areas,roadways, landscaped areas,bumpers,irrigation systems,
Common Area lighting facilities,fences and gates,elevators,roofs,and roof drainage systems.
(bb) Exterior signs and any tenant directories,
(cc) Any fire detection and/or sprinkler systems,
(ii) The cost of water,gas,electricity and telephone to service the Common Areas and any utilities not separately
metered.
(iii) Trash disposal,pest control services,property management,security services,and the costs of any environmental
inspections.
(iv) Reserves set aside for maintenance and repair o(Common Areas,
(v) Real Property Taxes(as defined mParagraph 1U)
(m) The cost of the premiums for the insurance maintained by Lessor pursuant to Paragraph 8.
(w0 Any deductible portion of an insured loss concerning the Building or the Common Areas.
<vm> The cost of any Capital Expenditure to the Building or the Project not covered under the provisions of Paragraph 2.3
pmvWed�however,that Lessor shall allocate the cost of any such Capital Expenditure over a12 year pen and-)
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Lessee shall not be required to pay more than Lessee's Share of 1/144th of the cost of such Capital Expenditure in
any given month.
(ix) Any other services to be provided by Lessor that are stated elsewhere in this Lease to be a Common Area Operating
Expense.
(b) Any Common Area Operating Expenses and Real Property Taxes that are specifically attributable to the Unit,the Building or to any
other building in the Project or to the operation, repair and maintenance thereof, shall be allocated entirely to such Unit, Building, or other building. However, any
Common Area Operating Expenses and Real Property Taxes that are not specifically attributable to the Building or to any other building or to the operation,repair and
maintenance thereof,shall be equitably allocated by Lessor to all buildings in the Project,
(c) The inclusion of the improvements, facilities and services set forth in Subparagraph 4.2(a) shall not be deemed to impose an
obligation upon Lessor to either have said improvements or facilities or to provide those services unless the Project already has the same, Lessor already provides
the services,or Lessor has agreed elsewhere in this Lease to provide the same or some of them.
(d) Lessee's Share of Common Area Operating Expenses shall be payable by Lessee within 10 days after a reasonably detailed
statement of actual expenses is presented to Lessee. At Lessor's option, however, an amount may be estimated by Lessor from time to time of Lessee's Share of
annual Common Area Operating Expenses and the same shall be payable monthly or quarterly,as Lessor shall designate,during each 12 month period of the Lease
term,on the same day as the Base Rent is due hereunder. Lessor shall deliver to Lessee within 60 days after the expiration of each calendar year a reasonably
detailed statement showing Lessee's Share of the actual Common Area Operating Expenses incurred during the preceding year. If Lessee's payments under this
Paragraph 4.2(d)during the preceding year exceed Lessee's Share as indicated on such statement, Lessor shall credit the amount of such over-payment against
Lessee's Share of Common Area Operating Expenses next becoming due. If Lessee's payments under this Paragraph 4.2(d)during the preceding year were less
than Lessee's Share as indicated on such statement,Lessee shall pay to Lessor the amount of the deficiency within 10 days after delivery by Lessor to Lessee of the
statement.
4.3 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction
(except as specifically permitted in this Lease),on or before the day on which it is due. Rent for any period during the term hereof which is for less than one full
calendar month shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at its address stated herein or to
such other persons or place as Lessor may from time to time designate in writing. Acceptance of a payment which is less than the amount then due shall not be a
waiver of Lessor's rights to the balance of such Rent, regardless of Lessor's endorsement of any check so stating. In the event that any check, draft, or other
instrument of payment given by Lessee to Lessor is dishonored for any reason,Lessee agrees to pay to Lessor the sum of$25 in addition to any late charges which
may be due.
5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessees faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of said Security
Deposit for the payment of any amount due Lessor or to reimburse or compensate Lessor for any liability,expense,loss or damage which Lessor may suffer or incur
by reason thereof. If Lessor uses or applies all or any portion of the Security Deposit,Lessee shall within 10 days after written request therefor deposit monies with
Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the term of this Lease,Lessee shall,
upon written request from Lessor,deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to
the increased Base Rent as the initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended to accommodate a material change in the
business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to increase the Security Deposit to the extent necessary, in Lessor's
reasonable judgment,to account for any increased wear and tear that the Premises may suffer as a result thereof. If a change in control of Lessee occurs during
this Lease and following such change the financial condition of Lessee is, in Lessor's reasonable judgment, significantly reduced, Lessee shall deposit such
additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level based on such change in financial
condition. Lessor shall not be required to keep the Security Deposit separate from its general accounts. Within 14 days after the expiration or termination of this
Lease,if Lessor elects to apply the Security Deposit only to unpaid Rent,and otherwise within 30 days after the Premises have been vacated pursuant to Paragraph
7.4(c)below,Lessor shall return that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit shall be considered to be held in
trust,to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease.
6. Use.
6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use,or any other legal use which is reasonably comparable thereto, and
for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs
occupants of or causes damage to neighboring premises or properties. Lessor shall not unreasonably withhold or delay its consent to any written request for a
modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvements on the Premises or the mechanical or electrical
systems therein, and/or is not significantly more burdensome to the Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after such request
give written notification of same,which notice shall include an explanation of Lessor's objections to the change in the Agreed Use.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent, The term "Hazardous Substance" as used in this Lease shall mean any product,
substance,or waste whose presence,use,manufacture,disposal,transportation,or release,either by itself or in combination with other materials expected to be on
the Premises,is either:(i)potentially injurious to the public health,safety or welfare,the environment or the Premises,(ii)regulated or monitored by any governmental
authority, or(iii) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous
Substances shall include,but not be limited to, hydrocarbons,petroleum,gasoline, and/or crude oil or any products, by-products or fractions thereof. Lessee shall
not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor
and timely compliance (at Lessee's expense) with all Applicable Requirements, "Reportable Use" shall mean (I) the installation or use of any above or below
ground storage tank,(ii)the generation, possession,storage, use,transportation,or disposal of a Hazardous Substance that requires a permit from,or with respect
to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a
Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or
neighboring properties. Notwithstanding the foregoing,Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of
the Agreed Use,so long as such use is in compliance with all Applicable Requirements,is not a Reportable Use,and does not expose the Premises or neighboring
property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition,Lessor may condition its consent to any Reportable
Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself,the public,the Premises and/or the environment against
damage, contamination, injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination)of protective
modifications(such as concrete encasements)and/or increasing the Security Deposit.
(b) Duty to Inform Lessor. If Lessee knows,or has reasonable cause to believe,that a Hazardous Substance has come to be located
in,on,under or about the Premises,other than as previously consented to by Lessor,Lessee shall immediately give written notice of such fact to Lessor,and provide
Lessor with a copy of any report,notice,claim or other documentation which it has concerning the presence of such Hazardous Substance.
(c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about
the Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, take all investigatory and/or remedial action
reasonably recommended.whether or not formally ordered or required,for the cleanup of any contamination of,and for the maintenance,security and/or monitoring
of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought
onto the Premises during the term of this Lease,by or for Lessee,or any third party.
fey
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k0 Lessee Indemnification, Lessee shall indemnify, defend and hold Lessor, its agents, *mployeao, lenders and ground lessor, if
any, harmless from and against any and all loss of rents and/or damages, liabilities,judgments, claims, expenses, penalties, and attorneys' and consultants'fees
arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party(provided, however, that Lessee shall have no
nom|dy under this Lease with respect to underground migration of any Hazardous Substance under the Premises from areas outside oYthe Pn4om) Lessee's
obligations shall include,but not be limited to,the effects of any contamination or injury toperson,property orthe environment created o,suffered uyLessee,anutxe
cost ofinvestigation, removal,remediation,restoration and/or abatement,and shall survive the expiration nrtermination ofthis Lease. Motermination,cancellation v,
release agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect mHazardous Substannes, unless
specifically soagreed byLessor inwriting at the time ovsuch agreement.
(e) Lessor Indemnification. Lessor and its successors and assigns sxoo indemnUy, uefend, reimburse and hold Lessee, its
mmpkxemm and |enuers, xonn|ons from and against any and all environmental damages, including the cost of remediation,which existed as o result nfHazardous
Substances on the Premises prior to the Start Date or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees. Lessor's
obligminns, an and when required bvthe Applicable Requimmentu, ohon ino|udn, but not be limited to, the cost of inveeigatiun, nemovo|, remediation, restoration
and/or abatement,and shall survive the expiration or termination of this Lease.
(0 Investigations and Remediomionw. Lessor shall retain the responsibility and pay for any investigations or remediation measures
required by governmental entities having jurisdiction with respect mthe existence n[Hazardous Substances on the Premises prior mthe Start Date, unless such
remediation measure is required as a result of Lessee's use(including"Alterations",as defined in paragraph73( )be|ow)ufthePnamiseu. inwhichem^tLeseee
shall baresponsible for such payment. Lessee shall cooperate fully inany such activities mthe request of Lessor, including allowing Lessor and Lessor's agents to
have reasonable access mthe Premises at reasonable times inorder iocarry out Lessor's investigative and remedial responsibilities.
(Q) Lessor Termination Option. If Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless
Lessee islegally responsible therefor(in which case Lessee shall make the investigation and remediation thereof required by the Applicable Requirements and this
Lease shall continue in full force and effect, but subject tn Lessor's rights under Paragraph 6.2(d) and Paragraph 19). Lessor may, at Lessor's option. either (i)
investigate and remediate such Hozanucmo Substance Condition, if required, as soon as reasonably possible at Lessor's expenoe, in which event this Lease shall
continue in full force and effect, or(ii) if the estimated cost to remediate such condition u^ce=jo 12 times the then monthly Base Rent or$100,000, whichever is
greater, give written notice to Lessee,within 30 days after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor's
desire to terminate this Lease as of the date 60 days following the date of such notice. |nthe event Lessor elects u,give atermination notice, Lessee may,within 10
days thoreaftor, give written notice to Lessor of Lessee's commitment to pay the amount by which the cost ufthe remediation of such Hsovnvus Substance
Condition exceeds an amount equal to 12 nmoe the then monthly Base Rent o,$10O.omO. whichever is greater. Lessee shall provide Lessor with said funds o,
satisfactorythereof within 30 days following such commitment. In such event,this Lease shall continue in full force and effect,and Lessor shall proceed
oomake such remediation assoon oereasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds
o,assurance thereof within the time provided,this Lease shall terminate as of the date specified in Lessor's notice of termination.
63 Lessee's Compliance with Applicable Requirements. Except as otherwise provided in this Lease, Lessee shall,at Lessee's sole expense,
fully' � timely
Applicable the m
menofon;oppii� underwriter
bunmu.and the recommendations ofLessor's engineers and/or consultants which relate many manner»othe Premises.without regard mwhether said requirements
are now ineffect mbecome effective after the Start Date. Lessee shall, within 10 days after receipt of Lessor's written request, provide Lessor with copies of all
permits and other documents, and other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall immediately
upon receipt, notify Lessor in writing (with copies ufany documents involved) many threatened or actual c|aim, npOme, citation, waminQ, complaint or report
pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements.
64 Inspection; omno|ianon, Lessor and Lessor's ^Lrndo/' (as defined in Paragraph ao) and consultants shall have the right to anu,, into
Premises at any time, in the case of an emergency, and otherwise at reasonable times,for the purpose of inspecting the condition of the Premises and for verifying
compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a contamination
is found to exist or be imminent, or the inspection is requested or ordered by a governmental authority. In such case, Lessee shall upon request reimburse Lessor
for the cost of such inspection,so long as such inspection is reasonably related to the violation or contamination.
7. Maintenance;Repairs,Utility Installations;Trade Fixtures and Alterations.
71 Lessee's Obligations.
(a) In General, Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable
Requirements), 7.2(Lessor's Db|Wauuna). 9(Damage orDeatmctinn). and 14(Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises, Utility
Installations (intended for Lessee's exclusive use, no matter where located), and Alterations in good order, condition and repair (whether or not the portion ofthe
Premises requiring repairs,or the means of repairing the same,are reasonably or readily accessible to Lessee,and whether nrnot the need for such repairs occurs
as a result of Lessee's use,any prior use,the elements or the age of such portion of the Premises), including,but not limited to, all equipment or facilities,such as
plumbing,HVAC equipment,electrical, lighting facilities,boilers,pressure vessels,fixtures,interior walls, interior surfaces of exterior walls,ceilings,floors,windows,
doors,plate glass, and skylights but excluding any items which are the responsibility of Lessor pursuant to Paragraph 7.2. Lessee, in keeping the Premises in good
order,condition and repair,shall exercise and perform good maintenance practices,specifically including the procurement and maintenance of the service contracts
required by Paragraph 7.1(b) below. Lessee's obligations mhuU include esmnmiono, replacements or renewals when necessary to keep the Premises and an
improvements thereon orapart thereof ingood order,condition and state o/repair.
(b) Service Contracts. Lessee shall, at Lessee's sole expense, procure and maintain contracts, with copies to Lessor, in customary
form and substance for, and with contractors specializing and experienced in the maintenance ofthe following equipment and imprmmmente, if any, if and when
installed on /he Premises: (i) HVAC equipment, (i0 boiler and pressure vessels, (i/i) clarifiers, and (k) any other equipment, if reasonably required by Lessor.
However, Lessor reserves the hght, upon notice to Lessee, to pmouva and maintain any or all of such service cunracts, and if Lmaom so elects, Lessee shall
reimburse Lessor,upon demand,for the cost thereof,
(u) Failure mPerform. If Lessee fails to perform Lessee's obligations under this Paragraph 7.1, Lessor mayenter upon the Premises
after 1Odays'priorwritten notice to Lessee(except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee's
behalf,and put the Premises ingood order,condition and repair,and Lessee shall promptly reimburse Lessor for the cost thereof.
(d) Replacement. Subject mLessee's indemnification ofLessor*m set forth in Paragraph 87 below, and without relieving Lessee of
liability resulting from Lessees failure to exercise and perform good maintenance practices,if an item described in Paragraph 7.1(b)cannot be repaired other than at
acost which isinexcess o(5O%ofthe cost ofreplacing such item,then such item shall be replacedby ,.and the cost thereof shall boprorated between the
Pa�esand Lessee shall only b*obligated vopay, each month during the remainder of the term v[this Lease, onthe date nnwhich Base Rent isdue, anamount
equal(othe product ofmultiplying the cost msuch replacement bypfraction.the numerator c*which|oone,and the denominator m/which im1w*tie. 1/1*uxovmm
cost per monh>. Lessee shall pay interest onthe unamortbe/balance atmrate that incommercially reasonable inthe judgment vfLessor's accountants- Lessee
may,however,prepay its obligation aany time.
72 Lessor's Obligations. Subject to the provisions of Paragraphs 2.2(Condition),2-3(Compliance),4.2(Common Area Operating Expenses).6
(Use). 7.1 (Lessee's Obligations), a(Damage or Destruction) and 14(Conuemnatinn), uemmc subject tnreimbursement pursuant m Paragraph 4,2, aba|| keep in
0mm mda,, condition and repair the foundations, exterior walls, ntmctom|condition of interior bearing walls, exterior nmf. fire sprinkler system, Common Area fire
alarm and/or smoke detection e>stame, fire oydrmma. parking |me, wa|m*ays, parkways, driveways, landscaping, fences, signs and utility systems serving the
Common Areas and all parts thereof, as well as providing the services for which there is a Common Area Operating Expense pursuant toL;ssor
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shall not be obligated to paint the exterior or interior surfaces of exterior walls nor shall Lessor be obligated to maintain, repair or replace windows,doors or plate
glass of the Premises. Lessee expressly waives the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease.
7.3 Utility Installations;Trade Fixtures;Alterations.
(a) Definitions. The term"Utility Installations"refers to all floor and window coverings,air lines,power panels,electrical distribution,
security and fire protection systems, communication systems, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises. The term"Trade
Fixtures"shall mean Lessees machinery and equipment that can be removed without doing material damage to the Premises. The term"Alterations"shall mean
any modification of the improvements,other than Utility Installations or Trade Fixtures,whether by addition or deletion. "Lessee Owned Alterations and/or Utility
Installations"are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).
(b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent.
Lessee may,however,make non-structural Utility Installations to the interior of the Premises(excluding the roof)without such consent but upon notice to Lessor,as
long as they are not visible from the outside,do not involve puncturing, relocating or removing the roof or any existing walls,and the cumulative cost thereof during
this Lease as extended does not exceed a sum equal to 3 month's Base Rent in the aggregate or a sum equal to one month's Base Rent in any one year.
Notwithstanding the foregoing,Lessee shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Lessor.
Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility
Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans. Consent
shall be deemed conditioned upon Lessee's; (i) acquiring all applicable governmental permits,(4)furnishing Lessor with copies of both the permits and the plans
and specifications prior to commencement of the work, and (iii)compliance with all conditions of said permits and other Applicable Requirements in a prompt and
expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly
upon completion furnish Lessor with as-built plans and specifications.For work which costs an amount in excess of one month's Base Rent,Lessor may condition
its consent upon Lessee providing a lien and completion bond in an amount equal to 150%of the estimated cost of such Alteration or Utility Installation and/or upon
Lessee's posting an additional Security Deposit with Lessor.
(c) Indemnification. Lessee shall pay,when due,all claims for labor or materials furnished or alleged to have been furnished to or for
Lessee at or for use on the Premises,which claims are or may be secured by any mechanic's or materialman's lien against the Premises or any interest therein.
Lessee shall give Lessor not less than 10 days notice prior to the commencement of any work in,on or about the Premises,and Lessor shall have the right to post
notices of non-responsibility. If Lessee shall contest the validity of any such lien,claim or demand,then Lessee shall,at its sole expense defend and protect itself,
Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If
Lessor shall require, Lessee shall furnish a surety bond in an amount equal to 150%of the amount of such contested lien, claim or demand, indemnifying Lessor
against liability for the same. If Lessor elects to participate in any such action,Lessee shall pay Lessor's attorneys'fees and costs,
7.4 Ownership;Removal;Surrender;and Restoration.
(a) Ownership. Subject to Lessor's right to require removal or elect ownership as hereinafter provided, all Alterations and Utility
Installations made by Lessee shall be the property of Lessee,but considered a part of the Premises. Lessor may,at any time,elect in writing to be the owner of all or
any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise instructed per paragraph 7.4(b)hereof,all Lessee Owned Alterations
and Utility Installations shall,at the expiration or termination of this Lease,become the property of Lessor and be surrendered by Lessee with the Premises.
(b) Removal. By delivery to Lessee of written notice from Lessor not earlier than 90 and not later than 30 days prior to the end of the
term of this Lease, Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of this Lease.
Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent.
(c) Surrender;Restoration. Lessee shall surrender the Premises by the Expiration Date or any earlier termination date,with all of the
improvements,parts and surfaces thereof broom clean and free of debris,and in good operating order,condition and state of repair,ordinary wear and tear excepted.
"Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by good maintenance practice. Notwithstanding the
foregoing,if this Lease is for 12 months or less,then Lessee shall surrender the Premises in the same condition as delivered to Lessee on the Start Date with NO
allowance for ordinary wear and tear. Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned
Alterations and/or Utility Installations,furnishings,and equipment as well as the removal of any storage tank installed by or for Lessee. Lessee shall also completely
remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party(except Hazardous Substances which
were deposited via underground migration from areas outside of the Project)even if such removal would require Lessee to perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. The failure by Lessee to timely vacate the Premises
pursuant to this Paragraph 7.4(c)without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below,
& Insurance;Indemnity.
8.1 Payment of Premiums. The cost of the premiums for the insurance policies required to be carried by Lessor,pursuant to Paragraphs 8.2(b),
8,3(a)and 8.3(b),shall be a Common Area Operating Expense. Premiums for policy periods commencing prior to,or extending beyond,the term of this Lease shall
be prorated to coincide with the corresponding Start Date or Expiration Date.
8,2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and
Lessor as an additional insured against claims for bodily injury,personal injury and property damage based upon or arising out of the ownership, use,occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not
less than$1,000,000 per occurrence with an annual aggregate of not less than$2,000,000,an"Additional Insured-Managers or Lessors of Premises Endorsement"
and contain the"Amendment of the Pollution Exclusion Endorsement"for damage caused by heat,smoke or fumes from a hostile fire. The policy shall not contain
any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "insured
contract"for the performance of Lessee's indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor
relieve Lessee of any obligation hereunder. All insurance carried by Lessee shall be primary to and not contributory with any similar insurance carried by Lessor,
whose insurance shall be considered excess insurance only.
(b) Carried by Lessor. Lessor shall maintain liability insurance as described in Paragraph 8.2(a),in addition to, and not in lieu of,the
insurance required to be maintained by Lessee. Lessee shalt not be named as an additional insured therein.
8.3 Property Insurance-Building,Improvements and Rental Value. ce in the name of Lessor, with
(a) Building and Improvements. Lessor shall obtain and keep in force a policy or policies of insurance
loss payable to Lessor, any ground-lessor, and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be equal to the full
replacement cost of the Premises, as the same shall exist from time to time, or the amount required by any Lender, but in no event more than the commercially
reasonable and available insurable value thereof. Lessee Owned Alterations and Utility Installations,Trade Fixtures,and Lessees personal property shall be insured
by Lessee under Paragraph 8.4. If the coverage is available and commercially appropriate,such policy or policies shall insure against all risks of direct physical loss
or damage(except the perils of flood and/or earthquake unless required by a Lender),including coverage for debris removal and the enforcement of any Applicable
Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or
policies shall also contain an agreed valuation provision in lieu of any coinsurance clause,waiver of subrogation,and inflation guard protection causing an increase in
the annual property insurance coverage amount by a factor of not less than the adjusted U.S.Department of Labor Consumer Price Index for All Urban Consumers
for the city nearest to where the Premises are located. If such insurance coverage has a deductible clause, the deductible amount shall not exceed $1,000 per
occurrence,
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1999-American industrial Real Estate Association FORM MTN-2-2199E
(b) Rental Value. Lessor shall also obtain and keep inforce apolicy mpolicies mthe name of Lessor with loss payable mLessor and
any Lender,insuring the loss of the full Rent for one year with an extended period of indemnity for an additional 180 days Said insurance
shall contain an agreed valuation pnmbkm in lie* ofany coinsurance clause, and the amount m/coverage shall be adjusted annually on nthe projected Rent
otherwise payable by Lessee,for the next 12month period.
(c) Adjacent Premises. Lessee shall pay for any increase in the premiums for the property insurance o/the Building and for the
Common Areas or other buildings in the Project if said increase is caused by Lessee's acts,omissions,use or occupancy of the Premises.
(d) Lessee's Improvements, Since Lessor is the Insuring Party, Lessor shall not be required to insure Lessee Owned Alterations and
Utility Installations unless the item in question has become the property of Lessor under the terms of this Lease.
8.4 Lessee's Property; Business Interruption Insurance.
(w) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's personal pmpmnv.Trade Fixtures, and
Lessee Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed$1,000 per occurrence,
The proceeds from any such insurance shall be used by Lessee for the replacement of personal property,Trade Fixtures and Lessee Owned Alterations and Utility
Installations. Lessee shall provide Lessor with written evidence that such insurance isivforce.
(b) Business Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will reimburse
Lessee for direct or indirect |oua of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to
prevention ofaccess mthe Premises asoresult oysuch perils.
(u) No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance
specified herein are adequate mcover Lessee's property,business operations mobligations under this Lease.
8.5 |nmuen»v Policies. Insurance required herein ehoU be by companies duly licensed or admitted to transact business in the state where the
Premises are|ncuued, and maintaining during the policy term o"General Policyholders Rating"of at least B+. V. as set forth in the most current issue of''gae n
Insurance Guide",or such other rating as may be required by a Lender. Lessee shall not do or permit to bedone anything which invalidates the required insurance
policies. Lessee shall, prior to the Start Date,deliver to Lessor certified copies of policies of such insurance or certificates evidencing the existence and amounts of
the required insurance, Nnsuch policy shall bocancelable to modification except after 30 days prior written notice to Lessor. Lessee shall, at least 30
days prior to the expiration of such policies,furnish Lessor with evidence of renewals or"insurance binders"evidencing renewal thereof, or Lessor may order such
insurance and charge the cost thereof mLessee,which amount shall bepayable byLessee u,Lessor upon demand. Such policies shall bnfor aterm nf at least one
year,or the length of the remaining term of this Lease,whichever is less. If either Party shall fail to procure and maintain the insurance required to be carried by it,
the other Party may,but shall not berequired to,procure and maintain the same.
8.0 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and
waive their entire right to recover damages against the other,for loss of or damage to its property arising out of or incident tothe perils required toboinsured against
herein, The effect of such releases and waivers is not limited by the amount of insurance carriecl or required, or by any deductibles applicable hereto. The Parties
agree to have their respective property damage insurance carriers waive any right to subrogation that such companies may have against Lessor orLessee, aathe
case may be,nolong oathe insurance ionot invalidated thereby.
87 Indemnity. Except for umonro gross negligence o, xmnfv| mieonnduct. Lessee shall indamnify, pmtect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor,partners and Lenders,from and against any and all claims, loss of rents and/or damages, liens,
judgments, penalties, attorneys' and consultants' fees, expenses and/or liabilities arising out of, inwdmnQ, or in connection with, the use and/or occupancyoJtxe
Premises by Lessee. If any action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at
Lessee's expense bycounsel reasonably satisfactory toLessor and Lessor shall cooperate with Lessee insuch defense. Lessor need not have first paid any such
claim inorder ozbedefended o,indemnified.
8.8 Exemption of Lessor from Liability, Lessor aho|| not be liable for injury o,damage»zthe person or goods, waem, merchandise orother
property of Lessee,Lessee's employees,contractors,invitees,customers,or any other person in or about the Premises,whether such damage minjury iscaused by
o, results from fire, s»aam, e|em,icuy, gaa, water or rain. orfrom the breakage, |oakage, obstruction orother defects of pipes, fire sprinklers, wies, appliances,
p|umbing. HVAC or lighting Omuem,or from any other cause,whether the said injury o,damage results from conditions arising upon the Premises o,upon other
portions nfthe Building,orfrom other sources n,places. Lessor shall not be liable for any damages arising from any act or neglect of any other tenant of Lessor nor
from the failure of Lessor to enforce the provisions of any other lease in the Project.Notwithstanding Lessor's negligence or breach of this Lease,Lessor shall under
oucircumstances beliable for injury to Lessee's business o,for any loss ofincome orprofit therefrom.
9, Damage orDestruction,
91 Definitions.
V$ "Premises partial Damaqe" exuU mean damage ordestruction to the improvements on the Premises, other than Lessee Owned
Alterations and Utility Installations,which can reasonably be repaired in 3 months or less from the date of the damage or destruction, and the cost thereofdoes not
exceed a sum equal to 6 month's Base Rent. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the
damage isPartial orTotal.
(u) "Premises Total Destruction"shall mean damage or destruction to the improvements on the Premises,other than Lessee Owned
Alterations and Utility Installations and Trade Fixtures,which cannot reasonably be repaired in 3 months or less from the date of the damage or destruction and/orthe
cost thereof exceeds asum equal uo8month's Base Rent. Lessor shall notify Lessee inwriting within aUdays from the date of the damage nrdestruction asto
whether mnot the damage ioPartial o,Total.
(n) "Insured Loss" mhe|| mean damage ordestruction mimprovements on the Premises, other than Lessee Owned Alterations and
Utility Installations and Trade Fimures, which was uauaau by an event required to be covered by the insurance described in Paragraph 8,3(o). irrespective of any
deductible amounts mcoverage limits involved.
(d) "Replacement Cost" shall mean the cost m repair orrebuild/he improvements owned byLessor at the time o/the occurrence hz
their condition existing immediately prim \hmneto, including demo|ition, debris removal and upgrading required by the operation of Applicable Requiements, and
without deduction for depreciation.
(m) "Hazardous Substance Condition" shall mean the occurrence or discovery of a condition involving the poesmno of, or a
contamination by,a Hazardous Substance as defined in Paragraph 6.2(a),in,on,or under the Premises.
92 Partial Damage-Insured Loss. 8aPremises Partial Damage txatiaam|nsuredLossopcvrs.menLessorshal|.at Lessor's expense, repair
such damage(but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations)as soon as reasonably possible and this Lease shall continue|n
full force and effect; pmwded, however, that Lessee shall, at Lessor's eledion, make the repair of any damage or destruction the total cost to repair of which is
$5.000 or |exo, and, in such mmm, Lessor shall make any applicable inov'onom proceeds available to Lessee on a reasonable basis no, that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair,the Insuring Party shall
promptly contribute the shortage in proceeds as and when required to complete said repairs. In the event, bcmnse,, such shortage was due mthe fact that, by
reason of the unique nature nfthe impxovements, full replacement cost insurance coverage was not commercially neamm^o*le and avmi|mule. Lessor shall have no
obligation to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds tocover
smme, madequate assurance thereof, within 10 days following receipt o«written notice oysuch shortage and request therefor. If Lessor nscexmn said funds or
adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this
Lease shall remain infull force and effect. nsuch funds massurance are not received, Lessor may nevertheless elect bywritten notice uo 10 day-,
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thereafter to: (Vmake suchrestoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds,in which case this Lease shall remain
in full force and effect, or(if) have this Lease terminate 30 days thereafter. Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to
repair any such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be
some insurance coverage,but the net proceeds of any such insurance shall be made available for the repairs if made by either Party.
93 Partial Damage-Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful
act of Lessee(in which event Lessee shall make the repairs at Lessee's expense), Lessor may either: (i) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and effect,or(ii)terminate this Lease by giving written notice to Lessee within 30 days after
receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be effective 60 days following the date of such notice. In the event Lessor
elects to terminate this Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee's
commitment to pay for the repair of such damage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof
within 30 days after making such commitment. In such event this Lease shall continue in full force and effect. and Lessor shall proceed to make such repairs as
soon as reasonably possible after the required funds are available. If Lessee does not make the required commitment, this Lease shall terminate as of the date
specified in the termination notice.
9.4 Total Destruction. Notwithstanding any other provision hereof, if Premises Total Destruction occurs. this Lease shall terminate UDdays
following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have the right to recover
Lessor's damages from Lessee,except ooprovided inParagraph 8.G.
9.5 Damage Near End of Term. If at any time during the last 6 months of this Lease there is damage for which the cost 0orepair exceeds one
month's Base Rent,whether mnot anInsured Loss, Lessor may terminate this Lease effective 60 days following the date of occurrence of such damage bygiving a
written termination notice to Lessee within 30 days after the date ofoccurrence ofsuch damage. Notwithstanding the foregoing, ifLessee at that time has on
exercisable option to extend this Lease or to purchase the Premises,then Lessee may preserve this Lease by, (a)exercising such option and (b)providing Lessor
with any shortage ininsurance proceeds (or adequate assurance thereuf]fneeded tomake the repairs onurbefore the earlier of(i)the date which io1Vdays after
Lessee's receipt of Lessor's written notice purporting to terminate this Lease,or(ii)the day prior to the date upon which such option expires. |fLessee duly exercises
such option during such period and provides Lessor with funds (or adequate ansu,anne(homn0 to omm, any shortage in insurance pmoeeds. Lessor nheU. at
Lessors commercially reasonable expense,repair such damage as soon as reasonably possible and this Lease shall continue in full force and effect. If Lessee fails
to exercise such option and provide such funds or assurance during such period,then this Lease shall terminate on the date specified in the termination notice and
Lessee's option shall bmextinguished.
s.s Abatement cxRent;Lessee's Remedies.
(o) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which
Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be
abated inproportion unthe degree mwhich Lessee's use of the Premises is impaired,but not to exceed the proceeds received from the Rental Value insurance. All
mxa,obligations of Lessee hereunder ohu8 be performed by Lemaca. and Lessor ahox have no liability for any such damoge, ueunucdmn, mmeuieUnn, repair or
restoration except asprovided herein.
(b) Remedies. If Lessor shall be obligated to repair or restore the Premises and does not commence, in a substantial and meaningful
way, such repair or restoration within 90 days after such obligation shall accrue, Lessee may,at any time prior to the commencement of such repair or restoration,
give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lesse�s election to terminate this Lease on a date not less than 60 days
following the giving of such notice. If Lessee gives such notice and such repair or restoration is not commenced within 30 days thereafter,this Lease shall terminate
asnfthe date specified insaid notice. If the repair or restoration is commenced within such 30 days,this Lease shall continue in full force and effect. ^CommenoeI'
shall mean either the unconditional authorization of the preparation of the required plans,or the beginning of the actual work on the Premises,whicheverfirst occurs.
9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) o,Paragraph s, an equitable adjustment
shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, inaddition, return mLessee uomuch of
Lessee's Security Deposit as has not been,or is not then required to be,used by Lessor.
8.8 Waive Statutes. Lessor and Lessee agree that the terms cf this Lease shall govern the effect ofany damage mn,destruction of the Premises
with respect to the termination of this Lease and hereby waive the provisions of any present or future statute to the extent inconsistent herewith.
10. Real Property Taxes.
10.1 Definition. As used herein,the term"Real Property Taxes"shall include any form of assessment; real estate, general, special, ordinary or
extraordinary,or rental levy or tax(other than inheritance,personal income or estate taxes);improvement bond;and/or license fee imposed upon or levied against any
legal or equitable interest of Lessor in the Project, Lessor's right to other income therefrom,and/or Lessor's business of leasing, by any authority having the direct or
indirect power to tax and where the funds are generated with reference to the Project address and where the proceeds so generated are to be applied by the city,
county urother bcu| taxing authority of aju,isuicticm within which the Project is located, The term "Real Property Taxes" shall also include any tax, fee. levy,
assessment or charge, or any increase therein, imposed by reason of events occurring during the term of this Lease, including but not limited to, achange inthe
ownership of the Project or any portion thereof or a change in the improvements thereon. |ncalculating Real Property Taxes for any calendar year,the Real Property
Taxes for any real estate tax year shall be included in the calculation of Real Property Taxes for such calendar year based upon the number of days which such
calendar year and tax year have mcommon.
102 Payment nfTaxes. Lessor shall pay the Real Property Taxes applicable to the Project,and except as otherwise provided in Paragraph 10.3.
any such amounts shall be included in the calculation of Common Area Operating Expenses in accordance with the provisions of Paragraph 4.2,
10.3 Additional Improvements. Common Area Operating Expenses shall not include Real Property Taxes specified inthe tax assessor's records
and work sheets as being caused by additional improvements placed upon the Project byother lessees u,byLessor for the exclusive enjoyment ofsuch other
lessees. Notwithstanding Paragraph 1O.2hereof,Lessee shall,however,pay to Lessor at the time Common Area Operating Expenses are payable under Paragraph
� h
4� .t een0etym[anyinceaeeinRea|PmpartyTammifeanessadsu|e|ybyneamonofAhen$iuns.TradeFimumenrVb|ity Installations placed upon the Premises by
Lessee ormLessee's request.
10.4 Joint Assessment. |fthe Building isnot separately assessed,Real Property Taxes allocated to the Building shall be an equitable proportion of
the Real Property Taxes for all of the land and improvements included within the tax parcel assessed,such proportion to be determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other information an maybe reasonably available. Losom,a reasonable determination thereof, in good
faith,shall beconclusive.
110�5 Personal Property Taxes, Lessee shall pay prior mdelinquency all taxes oameseod against and levied upon Lessee Owned Alterations and
Utility Installations, Trade Fixtures,furnishings, equipment and all personal property of Lessee contained in the Premises. When possible, Lessee shall cause its
Lessee Owned Alterations and Utility Installations,Trade Fixtures,furnishings,equipment and all other personal property to be assessed and billed separately from
the eo|property of Lessor, |fany o[Lessee's said property shall be assessed with Lessor's mm|pmpeny,Lessee shall pay Lessor the taxes attributable to Lessee's
property within 10 days after receipt of e written statement setting forth the taxes applicable to Lessee's property.
/1� Utilities. Lessee shaft pay for all water, gas, heat, |ight, power, ue|emonne, trash disposal and other mmnam and services supplied tothe Premises,
together with any taxes thereon. Notwithstanding the provisions oxParagraph 42. if at any time inLessor's sole judgment,Lessor determines that Lessee isusing a
disproportionate amount of water,electricity n,other commonly metered utilities,orthat Lessee isgenerating such mlarge volume of trash cstorequire onincrease in
the size of the dumpster and/or an increase in the number of times per month that the dumpster is emptied, then Lessor may increase Lessee's Base Rent by an
amount equal tosuch increased costs.
_Initials_
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@19S3-Amenosn Industrial Real Estate Association FORM mTw-o-uvyoE
12. Assignment and Subletting,
12.1 Lessor's Consent Required,
(a) Lessee shall not voluntarily or by operation of law assign,transfer,mortgage or encumber(collectively,"assign or assignment")or
sublet all or any part of Lessee's interest in this Lease or in the Premises without Lessor's prior written consent.
(b) A change in the control of Lessee shall constitute an assignment requiring consent, The transfer,on a cumulative basis,of 25%or
more of the voting control of Lessee shall constitute a change in control for this purpose.
(C) The involvement of Lessee or its assets in any transaction,or series of transactions(by way of merger, sale,acquisition,financing,
transfer,leveraged buy-out or otherwise),whether or not a formal assignment or hypothecation of this Lease or Lessee�s assets occurs,which results or will result in
a reduction of the Net Worth of Lessee by an amount greater than 25%of such Net Worth as it was represented at the time of the execution of this Lease or at the
time~the most recent assignment°which Lessor has consented,masuexists immediately prior to said transaction or transactions constituting such reduction,
whichever was or is greater,shall be considered an assignment of this Lease to which Lessor may withhold its consent. "Net Worth of Lessee"shall mean the net
worth of Lessee(excluding any guarantors)established under generally accepted accounting principles.
(d) An assignment or subletting without consent shall, at Lessors option, be a Default curable after notice per Paragraph 13.1(c), or a
noncurable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a noncurable Breach,
Lessor may either:(I)terminate this Lease,or(ii)upon 30 days written notice, increase the monthly Base Rent to 110%of the Base Rent then in effect. Further, in
the event of such Breach and rental adjustment,(i)the purchase price of any option to purchase the Premises held by Lessee shall be subject to similar adjustment
to I 10%of the price previously in effect, and(H)all fixed and non-fixed rental adjustments scheduled during the remainder of the Lease term shall be increased to
110%of the scheduled adjusted rent.
(e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injunctive relief.
^ .2.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessors consent, no assignment or subletting shall: (I) be effective without the express written assumption by such
assignee or sublessee of the obligations of Lessee under this Lease,(H)release Lessee of any obligations hereunder,or(iii)alter the primary liability of Lessee for the
payment of Rent or for the performance of any other obligations to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's obligations from any person other than Lessee pending approval or disapproval
of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver or estoppel
of Lessor's right to exercise its remedies for Lessees Default or Breach.
(c) Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting.
(d) In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else
responsible for the performance of Lessee's obligations under this Lease, including any assignee or sublessee,without first exhausting Lessor's remedies against
any other person or entity responsible therefore to Lessor,or any security held by Lessor.
(e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor's
determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the intended
use and/or required modification of the Premises, if any, together with a fee of$1,000 or 10%of the current monthly Base Rent applicable to the portion of the
Premises which is the subject of the proposed assignment or sublease,whichever is greater,as consideration for Lessor's considering and processing said request,
Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested.
(f) Any assignee of, or sublessee under,this Lease shall, by reason of accepting such assignment or entering into such sublease, be
deemed to have assumed and agreed to conform and comply with each and every term,covenant, condition and obligation herein to be observed or performed by
Lessee during the term of said assignment or sublease,other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to
which Lessor has specifically consented mmwriting.
u�a�«����o�(� L�a�a�n�» mm�a�4�me�mmu��iogsh�| nm�o�rmme urau�m�o��O�kmgmn�1�m*o���
unless such transfer is specifically consented to by Lessor mwriting.(See Paragraph 39,2)
/2,3 ^oumona/Terms and Conditions Applicable mSubletting. The following terms and conditions shall apply uoany subletting byLessee of
all or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessees interest in all Rent payable on any sublease, and Lessor may collect
such Rent and apply same toward Lessee's obligations under this Lease; provided, xmwe"e,, that until a Breach shall occur in the --f-nna^ce of --aeea
obligations, Lessee may collect said Rent, Lessor shall not,by reason of the foregoing or any assignment of such sublease, nor by reason of the collection~ Rsnt`bedesoed |iaule^uthemubhesaeehxanvfamuren[Lesseemperfnmanduomplywubamyof Lessee's obligations msuch sublessee. ------h---' ----h
ly
authorizes and directs any such sublessee,upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee's obligations under
this Lease,topay mLessor all Rent due and mbecome due under the sublease, Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to
Lessor without any obligation or right to inquire as to whether such Breach exists,notwithstanding any claim from Lessee to the contrary.(b) |nthe event of Breach by Lessee, Lessor may, at its option, require sublessee boettmnhu Lessor. in event Lessor shall
vmdedake�eob|��iooam[�ooub/easmunder such auh�aaehnm�edmo �the em��omyms���mmm�aoxpn$�nm[s---sublease; provided, however,
Lessor shall not beliable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor,
(o) Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor.
(u) Nosublessee shall further assign ssublet all orany part ofthe Premises without Lessor's priorwritten consent.
of Lessee n the(s) �samah�|d��sacopy ofany n�k�ofD�bukm,g�achby�meeahothe oubkssee.who shall hmm�er�h|hocure�eD�ou�
eQraceperind. ifsny, apecifiedinsuuhnmkce. Theaublesmeeahu||hmmarightof reimbursement and offset from and against Lessee for any
such Defaults cured bythe sublessee.
11 Default;Breach;Remedies.
1I1 Default;Breach. A^Defaulir'is defined asafailure by the Lessee tocomply with or perform any of the termscovenants,u���� �
�
and aUonmunder th�Le�`a. A''Bm�mM'�d�i�doathe ocoun �
ee��one ormo�/�the«�k�h Defaults, d the failure Lessee
mmmn�yw�|k�b�gn�ep�k�: -
(a) The abandonment of the Premises;or the vacating of the Premises without providing a commercially reasonable level o
where the ofthopn�emyimav�nne�sohhed�pen�mrhO.3iejeouao1�edama�sux�e��.mw�m�pn��|nQ��`mneb� ~^~f security,or
potential vandalism.
assurances~^~~^~~
(b) The failure of Lessee to make any payment of Rent many Security Deposit required mbemade byLessee hermndm whether to
u�scvmvmem/vdpm�y, ��v�endue.vopmv$e�asoneb�e�d�/mmoyinsu�ncemsun$ --'
y�oo� urtnru�||mmyob|���nun��toisLm�a*h�m-'
ton�u�a|Uempmpe�'. such tmUcontinues written endangers or
(iii) m
(c) The failure by Lessee to provide (V reasonable written evidence of compliance with Applicable Requirements, (Uthe� servicecm�a�e
. rescission of an unauthorized assignment msubletting, (k0 an Embq;oel Certificmte, h4 arequested subordination, (v0 evidence concerning any
guaranty and/or Guarantor, (vii) any document requested under Paragraph 41 (easements), or (viii) any other documentation or information which Lessor may
reasonably require of Lessee under the terms of this Lease,where any such failure continues for a period of 10 days following written notice to Lessee,
(u) A Default by Lessee as to the terms,covenants, conditions or provisions of this Lease,or of the rules adopted under Paragraph 2e
he��. �ha�anthose desuhbedionubpe�gsmha13,1(a). (b)cv(c). abn�.vhe�such De�u�uon# � s
n �� apeModof@Qd�so�r -.
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�1s9o'American Industrial Real Estate^s�oimjun FORM MTN-2-2/99E
however, that if the nature oxLessee's Default is such that more than 30 days are reasonably required for its cure, men it shall not bedeemed muea Breach if
Lessee commences such cure within said 3Oday period and thereafter diligently prosecutes such cure to completion.
$o The occurrence m/any oxthe following events: (I)the making of any general arrangement or assignment for the benefit of creditors;
(ii) becoming a "debtor" as defined in 11 U.S.C. § 101 or any ovuoossm statute thereto (unleao, in the case of e petition nhm against uyaoee, the some is
dismissed within DO days); (iii) the appointment of at,ustee or receiver ootake possession nfsubstantially all of Lessee's assets located at the Premises o, of
Lessee's interest in this Lease,where possession is not restored to Lessee within 30 days;or(iv)the attachment,execution or other judicial seizure of substantially
all u/Lessee's assets located at the Premises or of Lessee's interest in this Lease,where such seizure is not discharged within 30 days; provided, however, in the
event that any provision of this subparagraph (e) is contrary to any applicable|aw, such provision shall be of no force or effect, and not affect the validity of the
remaining provisions.
0V The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false.
(g) |fthe performance cx Lessee's obligations under this Lease is guaranteed: (V the death of Guarantor, (ii) the termination o, a
Guarantor's liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantors becoming insolvent or the subject of a
bankruptcy filing,<kAaGuarantor's refusal tnhonor the guaranty,ur(0oGuarantors breach of its guaranty obligation onananticipatory basis,and Lessee's failure,
within 60 days following written notice of any such event,to provide written alternative assurance or security,which,when coupled with the then existing resources Of
Lessee,equals orexceeds the combined financial resources ufLessee and the Guarantors that existed at the time ofexecution n,this Lease.
112 Remedies. |fLessee fails boperform any ufits affirmative duties obligations,within 10 days after written nd in case of an emergency,
without notice), Lessor may,at its option, perform such duty or obligation on Lessee's behalf,including but not limited to the obtaining of reasonably required bonds,
insurance policies,orgovernmental licenses,permits orapprovals. The costs and expenses ofany such performance Lessor shall bedue and payable by Lessee
upon receipt ofinvoice therefor. |fany check given 10Lessor b*Lessee shall not behonored bythe bank upon which kiodrawn,Lessor,atits option,may require all
future payments to be made by Lessee to be by cashiers check. In the event of a Breach, Lessor may,with or without further notice or demand,and without limiting
Lessor inthe exercise m[any right orremedy which Lessor may have byreason ofsuch Breach:
(o} Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee
shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i)the unpaid Rent which had been earned at the
time oftermination; (ii)the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award
exceeds the amount ofsuch rental loss that the Lessee proves could have been reasonably avoided; (i|i)the worth at the time ofaward ofthe amount bywhich the
unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided;and(iv)
any other amount necessary mcompensate Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligations under this Lease or
which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises,expenses of
mlettiog, including necessary renovation and alteration ovthe Premises, reasonable attorneys'fees, and that portion nfany leasing commission paid byLessor m
connection with this Lease applicable tothe unexpired term m[this Lease. The worth at the time oraward ofthe amount referred ozinprovision(m)ufthe immediately
pnecngingaentence,hanbeoomputedbydienoundngauchamnun/at the discount rate ufthe Federal Reserve Bank ovthe District within which the Premises are
located at the time of award plus one percent. Efforts byLessor m mitigate damages caused by Lessee's Bemux of this Lease shall not waive Lessor's right to
recover damages under Paragraph 1z If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to
recover insuch proceeding any unpaid Rent and damages ssare recoverable therein,or Lessor may reserve the right to recover all or any part thereof in a separate
suit. If a notice and grace period required under Paragraph 13.1 was not previously given,a notice to pay rent or quit,or to perform or quit given to Lessee under the
unlawful detainer statute shall also constitute the notice required by Paragraph 13.1. |osuch case,the applicable grace period required byParagraph 13.1 and the
unlawful detainer statute shall run concurrently,and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an
unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or
assign, subject only to reasonable limitations. Acts of maintenance,efforts to relet, and/or the appointment of a receiver to protect the Lessor's interests,shall not
constitute atermination ofthe Lessee's right topossession.
(u) Pursue any other remedy now o, hereafter mmi|ob|a under the laws or judicial decisions of the state wherein the Premises are
located. The expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from liability under any indemnity
provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Premises.
13.3 Inducement Recapture. Any agreement for free or abated rent or other charges,or for the giving or paying by Lessor to or for Lessee of any
cash orother bonus, inducement o, consideration for Lessee's entering into this uaone, all of which concessions are hereinafter referred uoas "Inducement
Provisions",shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms,covenants and conditions of this Lease. Upon Breach uf
this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other
charge, bonus, inducement or consideration theretofore abated,given or paid by Lessor under such an Inducement Provision shall be immediately due and payable
by Lessee to Lessor,notwithstanding any subsequent cure of said Breach by Lessee. The acceptance byLessor ufrent mthe cure ofthe Breach which initiated the
operation of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time cf
such acceptance.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this
Lease, the exact amount ofwhich will beextremely difficult tnascertain, Such costs include, but are not limited to, processing and accounting charges, and late
charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by Lessor within 5 days after such amount shall be due,
then,without any requirement for notice mLessee,Lessee shall pay to Lessor a one-time late charge equal to 10%of each such overdue amount or$100,whichever
is greater. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur uyreason ufsuch late payment.
Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's Default or Breach with respect tosuch overdue amount, nor prevent the
exercise ofany ofthe other rights and remedies granted hereunder. |nthe event that a late charge is payable hereunder,whether or not collected,for 3 consecutive
installments of Base Rent,then notwithstanding any provision of this Lease to the contrary, Base Rent shall,at Lessor's option,become due and payable quarterly in
advance.
135 Interest. Any monetaryt due Lessor hereunder,other h late charges, m received by Lessor,when due as to scheduled payments
(such as Base Rent) or within 30 days following the date on which it was due for non-scheduled payment, shall bear interest from the date when due, as to
scheduled payments,or the 31st day after it was due as to non-scheduled payments.The interest("Interest")charged shall be equal to the prime rate reported in
the Wall Street Journal as published closest prior to the date when due plus 4%, but shall not exceed the maximum rate allowed by law. Interest is payable in
addition to the potential late charge provided for in Paragraph 13.4.
13.6 Breach by Lessor.
(a) Notice wYBreach. Lessor shall not bedeemed mbreach of this Lease unless Lessor fails within a reasonable time mperform an
obligation required mbeperformed byLessor, For purposes of this Paragraph,a reasonable time shall in no event be less than 30 days after receipt by Lessor,and
any Lender whose name and address shall have been furnished Lessee in writing for such purpose, of written notice specifying wherein such obligation of Lessor
has not been performed;provided,however,that if the nature of Lessor's obligation is such that more than 30 days are reasonably required for its performance,then
Lessor shall not be in breach if performance is commenced within such 30 day period and thereafter diligently pursued to completion,
(u) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breachwm 0 days after
receipt of said notice,or if having commenced said cure they do not diligently pursue it to completion,then Lessee may elect to cure said breachexpense
Initials —2.0.
Page 10ov1s
and offset from Rent anamount equal mthe greater of one mumx Base Rent or the Security Deposit, and to pay an excess of such expense under protest,
reserving Lessee's right to reimbursement from Lessor. Lessee shall document the cost of said cure and supply said documentation to Lessor,
14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said
power(collectively"Condemnation"), this Lease shall terminate as to the part taken as of the date the condemning authority takes title or possession,whichever
first occurs. If more than 10%of the floor area of the Unit, or more than 25%of Lessee's Reserved Parking Spaces, is taken by Condemnation, Lessee may, at
Lessee's option,to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking(or in the absence of such notice,within
10 days after the condemning authority shall have taken possession)terminate this Lease as of the date the condemning authority takes such possession. If Lessee
does not terminate this Lease in accordance with the foregoing,this Lease shall remain in full force and effect as to the portion of the Premises remaining, except
that the Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards and/or payments
shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for
severance damages; provided, however,that Lessee shall be entitled to any compensation for Lessee's relocation expenses, loss of business goodwill and/or Trade
Fixtures,without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility Installations made to the
Premises by Lessee,for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation
which is payable therefor. In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by
such Condemnation.
15� Brokerage Fees.
15.1 Additional CissiIn addition hothe owed pursuant Oabove, and unless Lessor and the Brokers otherwise
agree in writing, Lessor if Lessee acquires from Lessor mthe Premises mother premises owned by
Lessor and located within the Project, (qnLessee remains in possession of the Premises,with the consent of Lessor, after the expiration of this Lease, or(d) if
Base Rent is increased,whether by agreement or operation of an escalation clause herein,then, Lessor shall pay Brokers a fee in accordance with the schedule of
the Brokers ineffect at the time cf the execution mrthis Lease.
15.2 Assumption nfObligations. Any buyer ortransferee of Lessor's interest in this Lease shall be deemed to have assumed Lessor's obligation
hereunder. Brokers shall h*third party beneficiaries nfthe provisions ofParagraphs 1 10. 15.22and 31. If Lessor fails mpay(nBrokers any amounts due euand
for brokerage fees pertaining to this Lease when due,then such amounts shall accrue Interest. In addition, if Lessor fails to pay any amounts to Lessee's Broker
when due, Lessee's Broker may send written notice to Lessor and Lessee of such failure and if Lessor fails mpay such amounts within 1Odays after said notice,
Lessee shall pay said monies to its Broker and offset such amounts against Rent. In addition,Lessee's Broker shall be deemed to be a third party beneficiary of any
commission agreement entered into by and/or between Lessor and Lessor's Brokerfor the limited purpose o[collecting any brokerage fee owed,
15.3 Representations and Indemnities prBroker Relationships, Lessee and Lessor each represent and warrant mthe other that ithas had nn
dealings with any person, non, ummy,or finder(other than the B,Wers, if any) in connection with this Leueu, and that no one other than said named Brokers is
entitled many commission n,finder's fee inconnection herewith. Lessee and Lessor do each hereby agree to indemnify,protect,defend and hold the other harmless
from and against liability for compensation or charges which may be claimed by any such unnamed broker,finder or other similar party by reason of any dealings or
actions of the indemnifying Party,including any costs,expenses,attorneys'fees reasonably incurred with respect,oanetn,
/0� Estoppel Certificates.
(o) Each pa ( "Responding ') shall within 10 days after written notice from the other P (the "Requesting Party'')
execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current"Estoppel Certificate"form published by
the American Industrial Real Estate Association,plus such additional information,confirmation and/or statements as may be reasonably requested bythe Requesting
Pony.
(b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period,the Requesting Party may
execute an Estoppel Certificate stating that; (i)the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ii)
there are nouncured defaults in the Requesting Party's performance, and (iii) ifLessor ia the Requesting Party, not more than one month's rent has been paid in
advance. Prospective purchasers and encumbrances may rely upon the Requesting Party's Estoppel Certificate,and the Responding Party shall be estopped from
denying the truth nfthe facts contained msaid Certificate.
(c) If Lessor desires to finance, refinanoe, o, so|| the Pmmiseo, or any part thamo. Lessee and all Guarantors shall deliver to any
potential lender orpurchaser designated byLessor such financial statements as may be reasonably required by such lender or purchaser,including but not limited to
Lessee's financial statements for the past ayears. All such financial statements shall bereceived bvLessor and such lender o,purchaser inconfidence and shall
beused only for the purposes herein set forth,
17. Definition ovLessor. The term''Lmsso/'aaused herein shall mean the owner o,owners at the time inquestion vfthe fee title mthe Premises, or, n
this is a sublease,of the Lessee's interest in the prior lease. In the event of a transfer of Lessor's title or interest in the Premises or this Lease,Lessor shall deliver to
the transferee or assignee(in cash or by credit)any unused Security Deposit held by Lessor, Except peprovided mParagraph 1c.upon such transfer orassignment
and delivery of the Security Deposit, as aforesaid,the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease
thereafter to be performed by the Lessor. Subject to the foregoing,the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only
upon the Lessor uuhereinabove defined. Notwithstanding the above,and subject tothe provisions n/Paragraph oVbelow,the original Lessor under this Lease,and
all subsequent holders of the Lessor's interest in this Lease shall remain liable and responsible with regard to the potential duties and liabilities of Lessor pertaining to
Hazardous Substances asoutlined inParagraph O2above.
18. Severability. The invalidity ufany provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19, Days. Unless otherwise specifically indicated to the contrary,the word"days"as used in this Lease shall mean and refer to calendar days.
20 Limitation onLiability, Subject to theprovisions nfParagraph 17 above,th obligations of Lessor undermi Lease shall
of Lessor, the individual partners of Lessor or its or their individual partners, directors, officers or shareholders, and Lessee shall look to the Premises, and to no
other assets of Lessor,for the satisfaction of any liability of Lessor with respect to this Lease,and shall not seek recourse against the individual partners of Lessor,or
its or their individual partners,directors,officers or shareholders,or any of their personal assets for such satisfaction.
21. Time of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease.
22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned
herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants to the Brokers that
it has made,and is refying solely upon, its own investigation as to the nature,quality,character and financial responsibility of the other Party to this Lease and as to
the use, nature,quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either
Party. The liability(including court costs and attorneys'fees),of any Broker with respect to negotiation,execution,delivery or performance by either Lessor or Lessee
under this Lease or any amendment or modification hereto shall be limited to an amount up to the fee received by such Broker pursuant to this Lease; provided,
however,that the foregoing limitation on each Brokers liability shall not be applicable to any gross negligence or willful misconduct of such Broker.
21 Notices.
23.1 Notice Requirements, All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered in person(by hand
o,bycourier)u,may besent uvregular,certified mregistered mail orU.S.Postal Service Express Mail,with postage prepaid,n,uyfacsimile transmission,and shall
be deemed sufficiently given if served in a manner specified in this Paragraph 23, The addresses noted adjacent to a Party's signature on this Lease shall uothat
Party's endmse fp,delivery or nmmn0 of notices. Either Party may by written notice to the other specify a different address for notice, see'm
Initials Initials
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�1ao9-American Industrial Real Estate Association FORwMTm-2-2/9eE
taking possession of the Premises, the
Premises shall constitute Lessee's address for notice. A copy of all notices mLessor shall be concurrently transmitted to
such party o,parties susuch addresses aeLessor may from time mtime hereafter designate iowriting.
23.2 Date of Notice, Any notice sent by registered or certified mail,return receipt requested,shall be deemed given on the date of delivery shown on the
receipt card,or ifnodelivery date is eomwn,the postmark thereon. If sent by regular mail the notice shall be deemed given 48 hours after the same in addressed no
required herein and mailed with postage prepaid. wm|cem delivered by United States Evpmeo Mail or overnight courier that guarantee next day delivery shall be
deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted hyfacsimile transmission orsimilar means shall bedeemed
delivered upon telephone confirmation of receipt(confirmation report from fax machine is sufficient),provided a copy is also delivered via delivery or mail. If notice is
received on a Saturday,Sunday or legal holiday,it shall be deemed received on the next business day.
z^. Waivers. No waiver by Lessor of the Default or Breach of any term,covenant or condition hereof by Lessee,shall be deemed a waiver of any other term,
covenant o/condition hereof,or of any subsequent Default or Breach by Lessee of the same or of any other term,covenant or condition hereof. Lessor's consent to,
or approval of,any act shall not be deemed to render unnecessary the obtaining of Lessor's consent to,or approval of,any subsequent or similar act by Lessee,or be
construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. The acceptance ofRent uyLessor shall not bea
waiver of any Default or Breach by Lessee, Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor,notwithstanding any
qualifying statements or conditions made byLessee in connection therewith, which such statements and/or conditions shall beufnoforce ureffect whatsoever
unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment.
2e� oiev|omum=Regarding The Nature of a Real Estate Agency Relationship.
(o) When entering into o discussion with o real estate agent regarding o real estate transaction, a Lessor or Lessee should from the outset
understand what type of agency relationship or representation it has with the agent or agents in the transaction. Lessor and Lessee acknowledge being advised by
the Brokers inthis transaction,asfollows:
(i> Lessor's Agent. A Lessor's agent under a listing agreement with the Lessor acts as the agent for the Lessor only. A Lessor's agent
or subagent has the following affirmative obligations: To the Lesso: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessor. To
the Lessee and the Lesso: (a)Diligent exercise of reasonable skills and care in performance of the agent's duties. (b)A duty of honest and fair dealing and good
faith. (c)A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention
and observation of,the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve
the affirmative duties set forth above.
(N Lessee's Agent. *nagent can agree u`act osagent for the Lessee only. mthese situations, the agent ionot the Lessor's agent,
even if by agreement the agent may receive compensation for services rendered,either in full or in part from the Lessor. *nagent acting only for aLessee has the
following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, integrity, honesty,and loyalty in dealings with the Lessee. To the Lessee and the
Le;sso: (a)Diligent exercise of reasonable skills and care in performance of the agent's duties, (b)A duty of honest and fair dealing and good faith. (c)A dutyto
disclose all facts known mthe agent materially affecting the value ordesirability mrthe property that are not known to,or within the diligent attention and observation
of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative
duties set forth above.
(iii) Agent Representing Both Lessor and Lessee. A real estate agent,either acting directly or through one or more associate licenses,
can legally b*the agent ofboth the Lessor and the Lessee in a transaction, but only with the knowledge and consent of both the Lessor and the Lessee. In a dual
agency situation, the aQam has the following affirmative obligations to both the Lessor and the Lessee: (a)Afiduciary duty of utmost care, integrity, honesty and
loyalty in the dealings with either Lessor or the Lessee. (b)Other duties to the Lessor and the Lessee as stated above in subparagraphs (i)or(ii). In representing
both Laanm and Lesoee,the agent may not without the express permission of the respective Panty,disclose mthe mha,Party that the Lessor will accept mot in an
amount |enn than that indicated in the listing n,that the Lessee is willing to pay higher rent than that offered. The above duties of the agent in a real estate
transaction uonot relieve a Lessor mLessee from the responsibility toprotect their own interests. Lessor and Lessee should carefully read all agreements toassure
that they adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate. |,legal o,tax advice io
desired,consult ocompetent professional,
(b) Brokers have no responsibility with respect to any default or breach hereof by either Party. The liability(including court costs and attorneys'
fees), of any Broker with respect to any breach of duty, error or omission relating to this Lease shall not exceed the fee received bysuch Broker pursuant to this
Lease;provided,however,that the foregoing limitation on each Broker's liability shall not be applicable tnany gross negligence orwillful misconduct ofsuch Broker.
(c) Buyer and Seller agree to identify to Brokers as"Confidential"any communication or information given Brokers that is considered by such Party
mbeconfidential.
2& NoRight TnHoldover. Lessee has noright to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease.
|nthe event that Lessee holds over,then the Base Rent shall be increased to 150%of the Base Rent applicable immediately preceding the expiration ortermination.
Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee,
27. Cumulative Remedies. muremedy o,election hereunder shall bedeemed exclusive but shall,wherever possible,be cumulative with all other remedies
atlaw n,inequity.
28. Covenants and Conditions;Construction of Agreement. All provisions of this Lease to be observed or maxnmned by Lessee are both covenants and
conditions, In construing this Lease,all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease. Whenever
required bythe context, the singular shall include the plural and vice versa. This Lease shall not be construed as if prepared by one of the Poniem, but rather
according tnits fair meaning auowhole,aeif both Parties had prepared it.
28. Binding Effect;Choice of Law. This Lease shall be binding upon the partiea,their personal emresentativen,successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are located.
oV. Subordination;Attn,nmem;Nnn'Disturbaoco.
30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage,deed of trust,or
other hypothecation or security device(collectively,"Security Device"), now or hereafter placed upon the Premises,to any and all advances made on the security
thereof,and mall renewals,modifications,and extensions thereof, Lessee agrees that the holders ofany such Security Devices(in this Lease together referred hzam
"Lender") shall have no liability or cbUgmtkm to perform any ofthe obligations of Lessor under this Leese. Any Lender may elect to have this Lease and/or any
Option granted hereby superior mthe lien ofits Security Device by giving written notice thereof to Lessee,whereupon this Lease and such Options shall be deemed
prior msuch Security Device,notwithstanding the.a/mUvmdates of the documentation mrecordation thereof.
30.2 &uomomeru, In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or
termination of Security Device mwhich this Lease is subordinated(i)Lessee shall,subject mthe non-disturbance provisions of Paragraph 30.3.attnrn to such new
owner,and upon request,enter into anew lease,containing all of the terms and provisions of this Lease,with such new owner for the remainder of the term hereof,
or,at the election of such new owner,this Lease shall automatically become a new Lease between Lessee and such new owner,upon all of the terms and conditions
hereof.for the remainder of the term hereof, and(ii)Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of
Lessors obligations hereunder,except that such new owner shall not: (a)buliable for any act mromission ufany prior lessor u,with respect uoevents occurring prior
to acquisition of ownership; (b)be subject to any offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than
one month's rent,or(d)be liable for the return of any security deposit paid to any prior lessor.
30,3 Nou'Dimzurbanre. With respect mSecurity Devices entered into byLessor after the execution m/this Lease, Lesaee' of this
ly
initials
Ihitials
Page 1umr1a
Lease shall be subject to receiving a commercially reasonable non-disturbance agreement (a "Non-Disturbance Agreement") from me Lender which
w�D��� ��m� ��� �� ��np�*�s� � �mPn�is-� �� m� �� i�x' ---
disturbed ,��»*p � um/»QomyoPd»n� memenoUeumnnhen�tvwnmxus
..~ owner Premises, puuxe,. within GU days after the execution of this Lease,`
the Premises. mthe event that Leprovide
oo�a��mderand ouem�tonegmia�for meexec��nand dexve�ofoNon-DiemAgreement.
' `
30A Self-Executing, The agreements contained in this Paragraph 30 shall be effective without txemmcuuvnnfanyfuxxeruouum*nts; pmwdod-
however, that, uponomMon request from Lessor or a Lender in connection with a sale, financing or refinancing of the Premises, Lesseeand Lessor shall exec
v^~suohrurthe,writingaasmaybmneaaonab|yequiredmaeparatelydmcunentonyaubnndinouno.ouo mnmnt and/or Non-Disturbance Agreement provided for herein.
31Attorneys' Fees, If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, u,00declare
rights hereunder,the Prevailing Party(as hereafter defined)inany such proceeding, action,mappeal thereon, shall msembledmmmme--r `-'oeen Such h
fees may uoawarded in the same suit or recovered in a separate suit. whether or not such action or proceeding is pursued to decision or judgment. The term,"Prevailing Party" shall include, withoutlimitation, a Party or Broker who substantially obtains o, defeats the relief sought, as the caso -` --' whetha
compromise, settlement,judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys'fees award shall not be computed in
accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred. |naddition, Lessor shall be entitled to
attorneys' costs and expenses incurred in the preparation and service ofnotices ofDefault and consultations in connection therewith, whetheror not~legal
action is subsequently commenced in connection with such Default or resulting Breach ($200 is n reasonable minimum perwocvrenoe — -' services and
by
32. Lessor's Access; Showing Premises; Repairs, Lessor and Lessor's agents shall have the right tnenter the Premises atany bmeinthe case n[an
emergency, and otherwise at reasonable times for the purpose m[shm�ng the same tnpm �
prospective purchasers, |en�� . or tenants, and making such alterations,
repairs, improvementsimprovementsor additions to the Premises as uaoynr may deem necessary, All such activities shall be without abatement of rent or liability usoe�
�ssormay etany Umaplace onthe P�mineeany nrdina�''ForS�e'o�nsand�ssormay du,in thelast 8months��the term hereof place o''the Pnam�eso-
ordinary''FnrLeaoe''s�nn. Lessee may�any Umoplace nnthe P�miseoany o�|no�''ForSuh�ane''sign.
''�
33. Auctions. Lessee shall not conduct,nor permit to be conducted,any auction upon the Premises without Lessor's prior written consent. Lessor shall not
be obligated to exercise any standard of reasonableness in determining whether to permit an auction.
n*. Signe, Except for ordinary"For Sublease"signs which may be placed only on the Premises, Lessee shall not place any sign upon the Project without
Lessor's prior written consent.All signs must comply with all Applicable Requirements.
35. Termination; Merger. Unless specifically stated otherwise in writing by Levsor, the voluntary o,other surrender of this Lease by Lessee, me mutual
termination or cancellation hereof, termination, u, utermination hemn, by �esmfor Breach by Laaoee, shall aumm�icanxvurmin�e any sublease lesser sacx `-tga /n me
Premises;pmwunx.however,m��eso,may e|e�monndnuoany one m000�ouoysumenanoioa. �msm/otoxunewumn1od�sfoxmmevent^ntme|em
bomeoonua�bvwriuenn�iceoothe huminterest, Lessor's � constitute
interest.
xn. Consents. Except aaotherwise provided herein,wherever inthis Lease the consent of a Party is required to an act by or for the other Party,such consent
shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs and expenses (including but not limited toarchitects', attorneys', engineers'
and
other consultants'fees) incurred in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an
assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation
therefor. Lessor's consent to any act,assignment or subletting shall not constitute an acknowledgment thatnoDefau|toreeacoby- sweoftoisLaa000xists'nm
shall such consent uedeemed awaiver nfany then existing Default o,Breach,except asmay beotherwise specifically stated inwriting byLessor at the time ofsuch
consent. The failure to specify herein any particular condition to Lessor's consent shall not preclude the imposition bvLessor atthe time nfconsent ofsuch further
or other conditions as are then reasonable with reference mthe particular matter for which consent is being given. In theevent-hm eithereitherParty disagrees with any
determination made bythe other hereunder and reasonably requests the reasons for such dete�moUon.the determining party shall furnish its reasons mwriting and
inreasonable detail within 1Obusiness days following such request.
87. Guarantor.
37.1 Execution. The Guarantors, if any,shall each execute a guaranty in the form most recently published by the American Industrial Real Estate
Association,and each such Guarantor shall have the same obligations as Lessee under this Lease.
37.2 Default. It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request toprovide: (a)evidence ofthe execution mr
the guaranty, including the authority of the party signing on Guarantor's behalf to obligate Guarantor,and inthe case nfucorporate Guarantor, acertified copy nfa
resolution nfits board o[directors authorizing the making oysuch guaranty, (b) current financial atatements. (c)onEamppa| or(d)w,iuenconU,m�ion
m�tbegvoran�iauunmcMeot. Certificate,
38. Quiet Possession. Subject to payment byLessee of the Rent and performance of all of the covenants,conditions and provisions on Lessee's part to be
oUoomeu and nedbnned under this Leasa.Lessee nbax have quiet possession and quiet enjoyment of the Premises during the term hereof.
3e, Options. If Lessee is granted an option,as defined below,then the following provisions shall apply.
39.1 Definition. "Option"shall mean: (a)the right to extend the term of or renew this Lease or to extend or renew any lease that Lessee has on
other property of Lessor; (b)the right of first refusal or first offer to lease either the Premises or other property of Lessor;(c)the right tnpurchase mthe right nffirst
refusal oopurchase the Premises o,other property of Lessor.
38.2 Options Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal mthe original Leasee and cannot be
assigned o,mmrciaedbyanyone mm
bmanoaiu� Lessee if
--��by��uo/
w�h�mssece�U�ingth��mueehas nointention ofmemofterassigning ormvb|a#ing. ' '
39.3 Multiple Options. |nthe event that Lessee has any multiple Options to extend or renew this Lease,a later Option cannot be exercised unless
the prior Options have been validly exercised.
ug.^ Effect cfDefault onOptions.
(a) Lessee shall have noright to exercise an Option: (i) during the period commencing with the giving m[any notice ofDefault and
continuing until said Default iscured, (ii)during the period nftime any Rent ieunpaid(without regard mwhether notice thereof iagiven Lnsse$ (iii)during the hme
�ssee�mBreach nfthis Lease,v,(i�inthe emntth��mseehas been giwm 3mmore nm|eoofaepa��o�au&.wh�hwrn,nmmeO�au'Ksare oumd duringme12mnnthpehcdimmodiam|yp�ovdin0theemn`iso'�,heO�inn. '
(b) The period m[time within which anOption may beexercised shall not buextended orenlarged uym �
auonufssee'nioaui|xyto
exercise anOption becausec�the provisions o*parag/opoon.x(o).
(c) aoOption shall terminate and bemrnofurther force o,effect,notwithstanding Lessee's due and timely exercise ufthe 0pnon � after
such exeoioeand p'kvmthe Lessee h`,aperiod or3mu� m
se�e,sucoR� uecomssuuewvo`' 'tuny
ne�ssM/'��ssu'tugive nmicethemn0. (ii)Lessor Q*matoLessee ao,mmrnnU�eorsepwm�De�u�uv�nQany 12mnmhpenno.mm�x*rn,n�the
o-uuo
umnue �
d.o,(iii)i� soeeoommi�a Breach^ftma uaase. ---
40� Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have noobligation whatsoever/oprovide same. Lessee assumes all responsibility for the protection nrthe premisen ��aeehs
agemsand inwu�aand meirpmpe�y�ommea��uftmndpa�i*a. ' '
mkia/m
Irfitials
1999-American Industrial Real Estate Association Page 113of15 FORM MTN-2-2199E
41. Reservations. Lessor reserves the right: (i) to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor
deems necessary, (ii) to cause the recordation of parcel maps and restrictions, and(iii)to create and/or install new utility raceways, so long as such easements,
rights, dedications, maps, restrictions, and utility raceways do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate such rights.
42. Performance Under Protest, If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the
provisions hereof,the Party against whom the obligation to pay the money is asserted shall have the right to make payment"under protest"and such payment shall
not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that
there was no legal obligation on the part of said Party to pay such sum or any part thereof,said Party shall be entitled to recover such sum or so much thereof as it
was not legally required to pay,
43, Authority. If either Party hereto is a corporation,trust, limited liability company, partnership, or similar entity, each individual executing this Lease on
behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf. Each party shall,within 30 days after
request,deliver to the other party satisfactory evidence of such authority.
44. Conflict. Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.
45. Offer, Preparation of this Lease by either party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other
Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto.
46. Amendments. This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. As long as they do not
materially change Lessee's obligations hereunder,Lessee agrees to make such reasonable non-monetary modifications to this Lease as may be reasonably required
by a Lender in connection with the obtaining of normal financing or refinancing of the Premises. and several
47. Multiple Parties. If more than one person or entity is named herein as either Lessor or Lessee, such multiple Parties shall have joint a
responsibility to comply with the terms of this Lease.
48. Waiver of Jury Trial. The Parties hereby waive their respective rights to trial by jury in any action or proceeding involving the Property or arising out of
this Agreement.
49. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation and/or the Arbitration of all disputes between the Parties and/or Brokers
arising out of this Lease 11 is 0 is not attached to this Lease.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN,AND BY THE
EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT,AT THE TIME
THIS LEASE IS EXECUTED,THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF
LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY
BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. I INVESTIGATION
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES, SAID INVE
SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES,THE
STRUCTURAL INTEGRITY,THE CONDITION OF THE ROOF AND OPERATING SYSTEMS,COMPLIANCE WITH THE AMERICANS WITH DISABILITIES
ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEES INTENDED USE,
WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE
REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED.
The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures.
Executed at: C Executed at:_R_edJand5,_CA1ifDX11i_a2003 ---
on: 0 on: December 2
By LESSOR: By LESSEE:
grange Street Plaza LLC City of Redlands
By: By:
Name Printed:Raymond..Arimand Name Print
Title:Mana in Member Title: Mayot_
Att
By: By:
',L
Name Printed: Name P' ed: o FOy Zed
V
Title: y
Title: Ci Clerk
P. Box 3005
Address: Address:
sCA
_116935 Vanowen Street, #203 Redd 'r d , 92373
Van Nuys, CA 9j_406_________
Telephone:(8 11 8)708-08 8 8 Telephone:(9 0 9) 798-7533
Initials
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Page 14 of 15
1999-American Industrial Real Estate Association FORM MTN-2-2199E
Facsimile:(8 18)708-0I30 rocsknUa(___
Federal|DNo. Federal|DNo.
These forms are often modified to meet changing requirements of law and needs of the industry.Always write or call to make sure you are utilizing the
most current form:American Industrial Real Estate Association,700 South Flower Street,Suite 600,Los Angeles,CA 90017.
(21n)8V7-8777.
@CupynQhd1V99BvAmerican Industrial Real Estate Association.
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|nitia|a --Ritials--
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RENT ADJUSTMENT(S)
STANDARD LEASE ADDENDUM
Dated 11/24/2003
By and Between (Lessor) Orange Street Plaza LLC
(Lessee)city of Redlands
Address of Premises:406 Orange Street, #2C
Redlands, CA 92374
Paragraph 50
A. RENT ADJUSTMENTS:
The monthly rent for each month of the adjustment period(s)specified below shall be increased using the method(s)indicated below:
(Check Methou(o)+nbeUsed and Fill inAppropriately)
10 |. Cost nfLiving Adjvstmoru(s)(COLA)
a. On(Fill inCOLA Datea):Annually on each anniversary date
the Base Rent shall be adjusted by the change, if any,from the Base Month specified below, in the Consumer Price Index of the Bureau of Labor Statistics of the
U.S. Department of Labor for(ae|ectone):[] CPI vv (Urban Wage eamsm and Clerical Workers) o, GD CPI o (An u,uon onnaumom). ,or(pm in Urban Area):
Sao Bernardino Los Angeles, Long Beach All
Items(1982'1984=100).herein referred maa''CPr.
u. The monthly rent puvaue in accordance with paogmpxaLu.ufthis Addendum shall be calculated as follows:the Base Rent set forth in paragraph
1.5 of the attached Lease,shall be multiplied by a fraction the numerator of which shall be the CPI of the calendar month 2 months prior to the month(s)specified in
paragraph A.I.a.above during which the adjustment is to take effect,and the denominator of which shall be the CPI of the calendar month which is 2 months prior to
(select one): P the first month o,the term nfthis Lease asset forth inparagraph 1.3(^BaaeMnnth'')or[] (Fill ioOther"Base Montx''):
.The sum eocalculated shall constitute the new monthly rent hereunder,but innoevent,shall any such
new monthly rent be less than the rent payable for the month immediately preceding the rent adjustment.
c. In the event the compilation and/or publication of the CPI shall be transferred to any other governmental department or bureau or agency or shall be
discontinued,then the index most nearly the same as the CPI shall be used to make such calculation. |nthe event that the Parties cannot agree nnsuch alternative
index,then the matter shall be submitted for decision to the American Arbitration Association in accordance with the then rules of said Association and the decision
ofthe arbitrators shall bebinding upon the parties.The cost u/said Arbitration aho{(bepai4equoUybythePanies.
O If. Market Rental Value ANwmtmwnns)(MRv)
a. On(Fill inMRV Adjustment Date(o):
the Base Rent shall beadjusted mthe"Market Rental Value"of the property asfollows:
1) Four months prior v,each Market Rental Value Adjustment Date described above,the Parties shall attempt to agree upon what the new MRV will
Initials: ��Z_�_ Initials:
REwTADJVSTMEN0S)
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@2Vmo'American Industrial Real Estate Association FQRMRA-3'monE
be on the adjustment date. If agreement cannot be reached within thirty days,then:
(a) Lessor and Lessee shall immediately appoint a mutually acceptable appraiser or broker to establish the new MRV within the next 30 days.
Any associated costs will be split equally between the Parties,or
(b) Both Lessor and Lessee shall each immediately make a reasonable determination of the MRV and submit such determination,in writing,to
arbitration in accordance with the following provisions:
(i)Within 15 days thereafter,Lessor and Lessee shall each select an 13 appraiser or 0 broker("Consultant"-check one)of their choice
to act as an arbitrator.The two arbitrators so appointed shall immediately select a third mutually acceptable Consultant to act as a third arbitrator,
(ii) The 3 arbitrators shall within 30 days of the appointment of the third arbitrator reach a decision as to what the actual MRV for the
Premises is,and whether Lessors or Lessee's submitted MRV is the closest thereto.The decision of a majority of the arbitrators shall be binding on the Parties.The
submitted MRV which is determined to be the closest to the actual MRV shall thereafter be used by the Parties.
(iii) If either of the Parties fails to appoint an arbitrator within the specified 15 days, the arbitrator timely appointed by one of them shall
reach a decision on his or her awn,and said decision shall be binding on the Parties.
(iv)The entire cost of such arbitration shall be paid by the party whose submitted MRV is not selected,ie.the one that is NOT the closest
to the actual MRV,
2) Notwithstanding the foregoing,the new MRV shall not be less than the rent payable for the month immediately preceding the rent adjustment.
b. Upon the establishment of each New Market Rental Value:
1)the new MRV will become the new"Base Rent"for the purpose of calculating any further Adjustments,and
2)the first month of each Market Rental Value term shall become the new`Base Month`for the purpose of calculating any further Adjustments.
O 111. Fixed Rental Adjustment(s)(FRA)
The Base Rent shall be increased to the following amounts on the dates set forth below:
On(Fill in FRA Adjustment Date(s)): The New Base Rent shall be:
B. NOTICE:
Unless specified otherwise herein, notice of any such adjustments, other than Fixed Rental Adjustments, shall be made as specified in paragraph 23 of the
Lease.
C, BROKER'S FEE:
The Brokers shall be paid a Brokerage Fee for each adjustment specified above in accordance with paragraph 15 of the Lease.
NOTE: These forms are often modified to meet changing requirements of law and needs of the industry. Always write or call to make sure you are
utilizing the most current form:AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION,700 S.Flower Street,Suite 600,Los Angeles,Calif.90017
Initials: initials: -
RENT ADJUSTMENT(S)
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02000-American Industrial Real Estate Association FORM RA-3-8100E